Is the John Hancock Multifactor Small Cap ETF (JHSC) currently considered a robust ETF?

Overview of the John Hancock Multifactor Small Cap ETF (JHSC)

Introduced on November 8, 2017, the John Hancock Multifactor Small Cap ETF (JHSC) is a smart beta exchange-traded fund that aims to provide investors with comprehensive access to the Small Cap Blend segment of the market.

Understanding Smart Beta ETFs

Traditionally, the ETF landscape has been shaped by funds that follow market capitalization-weighted indexes, which are designed to mirror the performance of the overall market or specific sectors.

These cap-weighted indexes are popular for their cost-effectiveness, simplicity, and transparency, making them suitable for those who believe in efficient markets.

However, if you prefer to seek returns above the market average through strategic stock selection, smart beta ETFs may be more appealing. These funds follow alternative weighting methods rather than relying solely on market capitalization.

Smart beta strategies often select stocks based on specific financial metrics or a blend of factors, aiming to enhance risk-adjusted returns. While there are numerous approaches—from equal-weighted to those focused on fundamentals or volatility—not all have consistently outperformed traditional benchmarks.

About the Fund and Its Benchmark

Managed by John Hancock, this ETF has accumulated over $699.5 million in assets, positioning it as an average-sized fund within the Small Cap Blend category. Its objective is to closely track the performance of the JOHN HANCOCK DIMENSIONAL SMALL CAP INDEX, before accounting for fees and expenses.

The underlying index includes a selection of U.S. companies with market capitalizations below the 750th largest, excluding the smallest 4% of firms at each rebalancing.

Fees and Expenses

Expense ratios play a crucial role in determining long-term returns for ETF investors. Lower-cost funds can often outperform pricier alternatives when all other factors are equal.

JHSC charges an annual operating expense of 0.42%, which is competitive with similar ETFs in its category.

The fund’s trailing 12-month dividend yield stands at 1.03%.

Sector Allocation and Leading Holdings

ETFs are designed to offer broad diversification, reducing the risk associated with individual stocks. However, it’s still important to review a fund’s holdings before investing. Most ETFs, including JHSC, provide daily transparency of their portfolios.

JHSC allocates the largest portion of its assets to the Industrials sector (approximately 21.9%), followed by Financials and Information Technology.

Among individual holdings, Sandisk Corp (SNDK) makes up about 2.1% of the fund, with Revolution Medicines Inc (RVMD) and Mks Inc (MKSI) also among the top positions.

The top ten holdings together represent roughly 7.61% of the fund’s total assets.

Performance and Risk Profile

Year-to-date, JHSC has delivered a return of around 9.07%, and over the past year (as of February 25, 2026), it has gained approximately 17.27%. During this period, the ETF’s price has ranged between $32.47 and $46.28.

JHSC has a three-year beta of 1.03 and a standard deviation of 18.87%, indicating its risk and volatility relative to the market. With a portfolio of about 514 stocks, the fund achieves significant diversification, helping to mitigate company-specific risks.

Other ETF Options

For those seeking alternatives, the John Hancock Multifactor Small Cap ETF is a solid choice for investors aiming to outperform the Small Cap Blend segment. However, there are other notable ETFs to consider.

• iShares Russell 2000 ETF (IWM): Tracks the Russell 2000 Index, with $75.3 billion in assets and a 0.19% expense ratio.
• iShares Core S&P Small-Cap ETF (IJR): Follows the S&P SmallCap 600 Index, holding $96.09 billion in assets and charging 0.06% in fees.

Investors who prioritize lower costs and reduced risk may prefer traditional market cap-weighted ETFs that aim to replicate the Small Cap Blend’s returns.

Conclusion