Money Managers Tap Academic Research to Craft Enhanced ETF Strategies

More money managers are beginning to adapt their time-tested management styles into rules-based or factor indexing methodology that is brought to market through ETF investment vehicle.

For instance, John Hancock offers broad smart-beta ETFs to fill out a core portfolio position, including the John Hancock Multifactor Large Cap ETF (NYSEArca: JHML) and John Hancock Multifactor Mid Cap ETF (NYSEArca: JHMM), along with a suite of multifactor sector-specific ETF strategies for investors seeking to overweight targeted areas of the market.

The John Hancock Multifactor ETFs track indices developed by Dimensional Fund Advisors, which act as the subadvisor to the funds.

“We really focus on finding the best investment managers in our mutual fund business, so we did extend that into our ETF business and found – what is in my opinion and I think a lot of folks out there – the forefathers of strategic beta, and that’s Dimensional Funds,” Steve Deroian, Head of ETF Strategy for John Hancock, said at the recent Morningstar ETF Conference.