John Hancock Investments has selected Dimensional Fund Advisors to manage six multifactor exchange-traded funds (ETFs). Dimensional employs a rules-based, or strategic beta, approach.
Dimensional seeks to improve outcomes for investors by focusing on additional factors outside of market capitalisation that, through historical analysis, have been shown to have the potential for higher expected returns.
The Board of Trustees of John Hancock Exchange-Traded Fund Trust approved the ETF product offering in June 2015.
Dimensional started applying the concept of multifactor investing more than 30 years ago, and today the firm is one of the most well-respected managers in the industry. Dimensional's approach is rooted in decades of academic research into the factors that drive expected returns, along with a record of delivering results to investors. John Hancock Investments has had a relationship with Dimensional and its portfolio management teams since 2006, resulting in strategies being offered as both individual John Hancock mutual funds and through John Hancock asset allocation portfolios.
The suite of ETFs includes:
• John Hancock Multifactor Large Cap ETF
• John Hancock Multifactor Mid Cap ETF
• John Hancock Multifactor Consumer Discretionary ETF
• John Hancock Multifactor Financials ETF
• John Hancock Multifactor Healthcare ETF
• John Hancock Multifactor Technology ETF
As disclosed in the registration statement, each ETF will maintain an objective of seeking to provide investment results that closely correspond, before fees and expenses, to the performance of its underlying index; Dimensional will be designing the six underlying indexes. While the ETFs are passively managed, the indexes will embody Dimensional's multifactor investment philosophy and approach to portfolio construction, along with rules aimed at minimising unnecessary or costly turnover.
