Expanding on its line of multifactor exchange traded fund strategies, John Hancock launched its first international ETF, allowing investors diversify into global markets through a smart beta indexing approach.
On Friday, John Hancock rolled out the John Hancock Multifactor Developed International ETF (NYSEArca: JHMD). JHMD has a 0.45% net expense ratio.
“Adding an ETF focused on international investing is a logical extension of our product line, and we are pleased to be able to bring Dimensional’s proven multifactor approach to investors seeking to invest in international markets,” Andrew G. Arnott, president and CEO of John Hancock Investments, said in a note.
The Multifactor Developed International ETF tries to reflect the performance of the John Hancock Dimensional Developed International Index, which is comprised of developed market companies outside the U.S. and Canada. The underlying index also implements a rules-based screening or multifactor screening process that small-caps, lower relative price and higher profitability, which academic research has linked to higher expected returns.
Specifically, the small-cap premium corresponds to the outperformance of small-caps over large-caps. The companies that trade at lower relative price or a value premium relates to value stocks over growth stocks. Lastly, the profitability premium shows that highly profitable companies tend to do better than less profitable companies.