A sound investment process and strong management team underpin JHancock Multifactor Developed Intl ETF's Morningstar Medalist Rating of Gold. The portfolio maintains a sizable cost advantage over competitors, priced within the cheapest fee quintile among peers.  

 The strategy's investment process inspires confidence and earns a High Process Pillar rating. Independent of the rating, analysis of the strategy's portfolio shows it has maintained a significant overweight position in liquidity exposure and an underweight in quality exposure compared with category peers. High liquidity exposure is attributed to stocks with a high trading volume, lending managers more flexibility. And a low quality exposure is rooted in stocks with higher financial leverage and lower profitability. The strategy’s management team earns an Above Average People Pillar rating. The strategy's parent organization earns the firm an Above Average Parent Pillar rating. People Pillar and Parent Pillar ratings for this strategy are indirectly assigned by a Morningstar analyst rather than algorithmically derived. Please see the notes following each pillar section for more details. The details of assigning methods can be found in each pillar section.

Analyst Rating

TotalEnergies SE

ASML Hld

Shell PLC

National Energy Services Reunited

Moelis

Dollar General

Novan

DTE Energy

Ormat Technologies

AstraZeneca

Morningstar's evaluation of this security's process aims to determine the likelihood that it will outperform its Morningstar Category index on a risk-adjusted basis over the long term. JHancock Multifactor Developed Intl ETF earns a High Process Pillar rating. 

The leading factor in the rating is that this fund tracks an index. Historical data, such as Morningstar's Active/Passive Barometer, finds that passively managed funds have generally outperformed their active counterparts, especially over longer time horizons. Impressive risk-adjusted performance also bolsters the rating. This can be seen in the fund's five-year alpha calculated relative to the category index, which suggests that the managers have shown skill in their allocation of risk. 

 This strategy tends to hold smaller, deeper value companies than its average peer in the Foreign Large Blend Morningstar Category. Looking at additional factor exposure, this strategy has consistently tilted toward companies with relatively higher trading volumes in the last few years. More-liquid assets are easier to buy and sell without adversely moving their prices and tend to provide some ballast during market selloffs. They also are easier to sell to meet redemptions if a host of investors decide to leave the fund in a short period of time. In recent months, the strategy was more exposed to the Liquidity factor compared with its Morningstar Category peers as well. This strategy has also tilted toward low-quality stocks, companies with higher financial leverage and lower profitability over peers in recent years. Such positions do not tend to provide much ballast for a portfolio. Similarly, in recent months, the strategy also had less exposure to the Quality factor than peers. Additionally, the managers have tended to overweight yield, shown by the portfolio's high exposure to stocks paying dividends or buying back shares. Higher-yield stocks can provide steady income, but also have their risks. Dividend payers may cut payouts, for instance, if their earnings fall. Nevertheless, the fund's Yield exposure was in line with peers in the latest month. More information on a fund and its respective category's factor exposure can be found in the Factor Profile module within the Portfolio section. 

 The portfolio has allocations in its top two sectors, industrials and utilities, that are similar to the category. The sectors with low exposure compared to category peers are technology and healthcare, with technology underweighting the average portfolio by 4.2 percentage points of assets and healthcare similar to the average. The portfolio is positioned across 675 holdings and its assets are more dispersed than peers in the category. In particular, 11.6% of the fund’s assets are concentrated in the top 10 fund holdings, compared to the category average's 15.4%. And finally, in terms of portfolio turnover, on a year-over-year basis, 12% of the fund's holdings have turned over, whether through increasing, decreasing, or changing a position.

High

Process

JHancock Multifactor Developed Intl ETF benefits considerably from its team, earning it an Above Average People Pillar rating. There are four managers listed on the fund: Andres Torres, Rita Chen, Casey Baum, Joseph Hohn. Together, they manage a total of five strategies, with solid long-term prospects. The strategies average a Silver asset-weighted Morningstar Medalist Rating, indicating a position to deliver positive alpha relative to the category median in aggregate.  

 Note: This People Pillar rating is indirectly assigned by an analyst. Morningstar analysts evaluate the People Pillar for passive products at the brand level and may also differentiate by asset class. There is at least one other passive strategy at the firm that is covered by a Morningstar analyst, so the People Pillar rating of the fund is inherited from the rating that the Morningstar analyst assigned to investment vehicles under the same brand name.

Above Average

People

Manulife Financial Corp has revamped its wealth- and asset-management business off the long-term strength of its successful U.S. unit, meriting an Above Average Parent rating. 

One of Canada’s Big Three life insurance companies, Manulife operates primarily in Canada, the United States, and Asia, with the bulk of assets in the U.S. The firm united its investment and wealth-management groups into a single, global segment in 2017 and 2018 and showcased it as a high-potential business. Since then, the group has restructured to mix three regional heads—U.S. & Europe, Asia, and Canada—with three global leaders segmented by channel: Retail, Retirement, and Institutional.

Manulife has entrusted this initiative to key individuals from its U.S. outfit, John Hancock Investments. For instance, Andy Arnott recently shifted from focusing on the U.S. and European unit to head up the firm’s global retail efforts. Leadership hopes this structure will allow it to leverage successful initiatives in its distinct regional markets.

John Hancock’s manager research team has long prioritized best-in-class managers regardless of firm affiliation. While much of the firm’s fixed-income strategies are run by Manulife teams globally, external managers dominate the firm’s equity lineup in the U.S. In its home market of Canada, Manulife’s internal teams, which boast strengths and weaknesses, manage most of the firm’s offerings, though the firm also has a strategic partnership with investment stalwart Mawer.

Parent

John Hancock Multifactor Developed International ETF

JHMD tracks an index of stocks from developed markets ex-US and Canada, covering 85% of the market capitalization. Holdings are weighted based on fundamental and technical factors.  

The John Hancock Multifactor Developed International ETF (JHMD) hits a new 52-week high. Are more gains in store?

Multifactor Developed International ETF (JHMD) Hits a 52-Week High

International equities performed admirably in 2019 but still trailed their U.S. rivals. With valuation in markets outside the U.S. still attractive, 2020 could bring out-performance for some developed markets strategies.

News for John Hancock Multifactor Developed International ETF ETF (JHMD)