Additionally, the underlying indices implement market-capitalization adjustments where they increase the weights of smaller companies within the eligible universe and decrease the weights of larger names. The weighting methodology suggests that the ETFs will follow a more equal-weight tilt with greater exposure to smaller companies than traditional market-cap weighted index funds.
Related: Institutional Smart-Beta ETF Adoption is Quickly Rising
For instance, JHML’s market-cap weightings include 32.0% mega-caps, 36.9% large-caps and 31.2% mid-caps. In contrast, the S&P 500 index focuses on 50.0% mega-caps, along with 36.0% large-caps and 14.0% mid-caps. Moreover, JHML’s top holdings include a less top heavy Apple (NasdaqGS: AAPL) 2.1%, Exxon Mobil (NYSE: XOM) 1.4% and Microsoft (NasdaqGS: MSFT) 1.4%.
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