John Hancock has completed its core multi-factor ETFs suite, adding on a small-cap option to its standing large- and mid-cap offerings.
John Hancock recently launched the John Hancock Multifactor Small Cap ETF (NYSEArca: JHSC), which has a 0.50% expense ratio.
Similar to its large- and mid-cap multifactor ETFs, the Multifactor Small Cap ETF will try to reflect the performance of the John Hancock Dimensional Small Cap Index, which was developed in concert with Dimensional Fund Advisors and focuses on companies whose market capitalization are smaller than the 750th largest U.S. compnay but excluding the smallest 4% of U.S. companies.
The smart-beta ETFs follow a rules-based selection process that is seen as a multi-factor approach, combining a number of factors in a single portfolio. Securities are adjusted by relative price and profitability. The underlying indices may overweight stocks with lower relative prices and underweight names with higher relative prices. The indices can also adjust for profitability by overweighting stocks with higher profitability and underweighting those with lower profitability.
Related: Constructing a Portfolio with Multi-Factor, Smart Beta ETFs