John Hancock Investments, begun trading a New Multifactor International Equity ETF, the John Hancock Multifactor Developed International ETF (NYSE Arca: JHMD), on Friday, December 16, 2016. Here is a synopsis of the new ETF:

FUND INFORMATION:

Symbol: JHMD	Exchange: NYSE ARCA
Name: John Hancock Multifactor Developed International ETF	Net Expense Ratio: 0.45%

 

FUND OBJECTIVE:
The John Hancock Multifactor Developed International ETF seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the John Hancock Dimensional Developed International Index.

REFERENCE INDEX:
The John Hancock Dimensional Developed International Index is designed to comprise a subset of securities of companies associated with developed markets outside the U.S. and Canada. Eligible companies are generally considered to be those with market capitalizations in the top 85% of the eligible country and the top 90% of all companies in the eligible countries at the time of reconstitution. The selection and weighting of securities in the Index involves a rules-based process that may sometimes be referred to as multifactor investing, factor-based investing, strategic beta, or smart beta. With respect to each country, securities are classified according to their market capitalization, relative price, and profitability.

Weights for individual securities are determined by adjusting their free-float adjusted market capitalization weight within the universe of eligible names so that names with smaller market capitalizations, lower relative price and higher profitability generally receive an increased weight relative to their unadjusted weight, and vice versa. This process can be summarized as follows:

• Adjustments for market capitalization: Company weights are generally determined on a country specific basis and based primarily on market capitalization. Within each country, eligible securities are assigned into size groups, with the intent of increasing the weights of smaller names within the eligible universe and decreasing weights of larger names within the eligible universe. Securities in the smaller market capitalization group will have a larger size-adjustment factor applied to their free-float market capitalization. Securities in the larger market capitalization group will receive a lower size adjustment factor.

• Adjustments for relative price and profitability: Adjustments for relative price and profitability may be implemented within each country. Within each country, securities (other than real estate investment trusts (REITs), or REIT-like entities) are assigned to a relative price group and to a profitability group. REITs and REIT-like entities are types of real estate companies that pool investors’ funds for investment primarily in income producing real estate or real estate related loans or interests. REITs or REIT-like entities are generally assigned to separate relative price and profitability groups. Relative price adjustment factors are assigned with the intent of increasing the weights of names with lower relative prices and decreasing the weights of names with higher relative prices. Similarly, profitability adjustment factors are assigned with the intent of increasing the weights of names with higher profitability and decreasing the weights of names with lower profitability.

• Securities are then weighted after taking into account their free-float, size, relative price and profitability adjustments, subject to a cap of 4% on a single company at time of reconstitution. The weight of any single company engaged in a securities-related business will be reduced if such company’s weight reaches or exceeds 4.75% between reconstitutions.

The Index is reconstituted and rebalanced on a semiannual basis. The fund, using an indexing investment approach, attempts to approximate the investment performance of the Index by investing in a portfolio of securities that generally replicates the Index. The fund may concentrate its investments in a particular country, region, industry or group of industries to the extent the Index concentrates in a country, region, industry or group of industries.
As of the date of the fund’s prospectus, the following countries are currently designated as eligible countries: Australia, Austria, Belgium, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The list of designated eligible countries may vary over time. In addition to the countries listed above, the fund may continue to hold investments in countries that are not currently designated as an eligible country, but had been authorized for investment in the past, and may reinvest distributions received in connection with such existing investments in such previously eligible country. The Index may include securities associated with an eligible country, such as, among others: (a) securities of a company that is incorporated and domiciled within an eligible country and that has an issued security that trades on an eligible exchange in an eligible country; (b) securities of a company that derives at least 50% of its revenues or profits from goods produced or sold, investments made, or services performed in an eligible country; (c) securities of a company that holds at least 50% of its assets in an eligible country; (d) securities of a company that has a security denominated in the currency of an eligible country for the purpose of financing operations in that eligible country; (e) securities of companies in eligible countries in the form of depositary shares; or (f) securities that provide financial exposure to and derive their value from securities issued by a company in an eligible country. As a result, the value of the securities of such companies may reflect economic and market forces in such other countries or regions as well as in the eligible countries.

Fund Top Holdings (12/28/16):

TOYOTA MOTOR CORP – 7203	1.88%
ABB LTD REG – ABBN	1.19%
NOVARTIS AG REG – NOVN	1.02%
BASF SE – BAS	1.00%
NESTLE SA REG – NESN	0.94%
HSBC HOLDINGS PLC – HSBA	0.90%
ROCHE HOLDING AG GENUSSCHEIN – ROG	0.89%
DAIMLER AG REGISTERED SHARES – DAI	0.88%
ZURICH INSURANCE GROUP AG – ZURN	0.81%
TOTAL SA – FP	0.73%

 

 

Fund’s Top Countries (12/28/16):

JP	25.43%
GB	18.38%
DE	9.45%
FR	9.08%
CH	8.28%
AU	6.93%
HK	3.39%
NL	3.12%
ES	3.08%
SE	2.81%

 

 

 

Useful Links:
JHMD Home Page

ETFtrack comment:
JHMD is the 12th ETF John Hancock Investments has developed with Dimensional Fund Advisors in the past 18 months.
John Hancock Investments has had a relationship with Dimensional and its portfolio management teams since 2006, with strategies offered as both individual John Hancock mutual funds and through John Hancock asset allocation portfolios.
Dimensional began applying the concept of multifactor investing more than 30 years ago, and today the firm is one of the most respected managers in the industry. Dimensional’s approach is rooted in decades of academic research into the factors that drive expected returns and they offer a compelling track record of delivering results to investors.