On Thursday, John Hancock Investment Management bolstered its ETF lineup by launching the John Hancock High Yield ETF (JHHY).
JHHY is actively managed and has a net expense ratio of 0.52%. The fund is benchmarked to the ICE BofA US High Yield Constrained Index. Its investment goals are to strengthen current income and provide capital appreciation.
As a high yield ETF, JHHY primarily invests in junk bonds with similar characteristics to components within the index. Bonds selected for the portfolio will generally range between BB+ to D from S&P Global Ratings or Fitch Ratings. Additionally, the ETF may invest in bonds that Moody’s Investors rated between Ba1 and D.
The portfolio managers construct investments by incorporating fundamental and relative value analysis. Through an actively managed strategy, assets are periodically reevaluated to best capture shifting economic conditions. In regard to sector positioning, JHHY uses a top-down analysis to better allocate investments amid interest rate risk.
“High yield ETFs are looking more attractive again, as investors weigh reinvestment risk in the face of future rate cuts. They’ve done well on a total return basis, and there’s been a growing interest in low-cost, active high yield products in particular,” VettaFi Senior Industry Analyst Kirsten Chang added.
Established Experience
Marathon Asset Management serves as the fund’s subadvisor. Touting the firm’s extensive investment experience, John Hancock noted that, as of December 31, 2023, Marathon oversaw over $22 billion in AUM.
“We are excited to launch JHHY at a time when investors are seeking income and looking for the potential benefits of a high yield strategy in an active ETF structure. Marathon’s consistent portfolio construction process and nimble approach to the high yield credit market allows for diverse positioning and the potential to provide investors with favorable opportunities within the high yield universe,” noted Steve Deroian, co-head of retail product for John Hancock Investment Management.
John Hancock Investment Management currently has about 14 ETFs listed in the U.S. These funds represent over $6.4 billion in assets under management.
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