Investors tend to focus on the most prominent names in the markets, and many will overlook the growth opportunity in the middle-sized segment.
In the upcoming webcast, Mid-Cap ETFs: Why Diversifying Away From Mega-Caps Makes Sense Now, Joseph Hohn, Senior Portfolio Manager, Dimensional Fund Advisors; Matthew Miskin, Co-Chief Investment Strategist, John Hancock Investment Management; and Michelle Fuller, Senior Managing Director, Head of ETF Distribution, John Hancock Investment Management, will focus on the middle capitalization-weighted companies and ways financial advisors can enhance their portfolio with a mid-cap strategy.
Specifically, John Hancock has compiled a suite of disciplined factor-based strategies to better engage with markets during more volatile periods. The John Hancock Multifactor ETFs track indices developed by Dimensional Fund Advisors, which act as the subadvisor to the funds. They offer several ETFs, including the John Hancock Multifactor Mid Cap ETF (NYSEArca: JHMM), to help investors to overweight targeted areas of the market.
The smart-beta ETF follows a rules-based selection process that is seen as a multi-factor approach, combining several 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 comparable prices. The indices can also adjust for profitability by overweighting stocks with higher profitability and underweighting those with lower profitability.
The underlying index also implements 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 helps the ETFs follow a more equal-weight tilt with greater exposure to smaller companies than traditional market-cap weighted index funds in an attempt to capture the size premium and limit risks associated with high-flying, large-cap stocks that may be overbought in an ongoing bull market rally.
Financial advisors who are interested in learning more about mid-cap strategies can register for the Tuesday, August 18, webcast here.