As markets push ahead, many investors are focused on the S&P 500 and the Dow Jones Industrial Average breaking toward new highs. However, investors shouldn’t forget about small-cap stocks and related exchange traded funds.
“Everyone knows that they need small-cap, but it is a constrained asset class,” Steve Deroian, Head of ETF Strategy for John Hancock, said at the Inside ETFs 2018 conference. “We believe right now is a good time to re-evaluate it. With the run up in the large-cap space, we felt that people are a little under indexed to small cap.”
In an attempt to help investors better access the small-cap segment, John Hancock has partnered up with Dimensional Advisors in offering the John Hancock Multifactor Small Cap ETF (NYSEArca: JHSC). The smart-beta, small-cap ETF may be a great way for investors to gain exposure to the small capitalization segment through a rules-based indexing methodology that could potentially enhance returns and diminish downside risks.