John Hancock Launches ETFs

As ETFs have grown in popularity, more traditional mutual fund sponsors and asset managers have jumped on the bandwagon. The latest of which is Manulife Financial Corp’s (MFC) insurance and investment manager John Hancock. At the end of September, Hancock launched six new multi-factor or smart-beta ETF strategies. This was both Hancock’s and Manulife’s first forays into ETFs. Building on its relationship with various sub-managers, Hancock tapped Dimensional Fund Advisors to manage and develop the indexes for the six new smart-beta ETFs. That partnership could help set the funds apart in the now crowed smart-beta sea. While most investors may not have heard of Dimensional, it is one of the first and most successful managers to explore multi-factor and rules-based investing. It’s been doing that for nearly three decades and based much of its expertise on academic research conducted by world-famous economists Eugene Fama and Ken French — both of whom are both board members. Dimensional’s line-up of mutual funds — which are only sold by select brokers and investment advisors — are some of best returning funds on the market. They are no slouch when it comes to smart-beta and multi-factor investing. They basically wrote the book on it. John Hancock’s suite of six new smart-beta funds will screen for metrics such as consistent profitability, lower relative price or “value” as well as focusing on smaller market-cap stocks within the respective indexes. Stocks are pretty much equally weighted in the funds. Dimensional uses its own set of parent indexes, as opposed to the S&P 500, to screen for its multi-factors. Expenses for the new ETFs will range from 0.35% to 0.50% — or $35 to $50 per year for $10,000 invested. That makes them pretty darn cheap — even cheaper than many of Dimensional’s own mutual