John Hancock Multifactor Small Cap ETF

John Hancock Multifactor Small Cap ETF (JHSC) tracks the John Hancock Dimensional Small Cap Index. The index is a rules-based mix of US small companies that leaves out expensive, less profitable and fast-asset-growing stocks. The fund is widely spread, with 489 holdings and the top 10 at 5.38% of assets as of June 30, 2026. Its 0.42% expense ratio is above the 0.28% average of similar funds and far above SCHA's 0.04%.

• Over the year to Oct 27, 2026, JHSC returned +11.9%, 7th of 9 among similar funds.
• Its 5-year annualized return was +6.9%.
• In the 2020 COVID crash it fell 42.7% and regained its old high 7.8 months after the low.
• Its worst full calendar year was 2022 (-14.7%); its best was 2019 (+24.4%).
• The deepest fall in its price history was 42.7% (Feb 20, 2020 to Mar 23, 2020), recovered by Nov 16, 2020.

As of Jun 30, 2026, the fund held 489 securities; the ten largest made up 5.38% of assets.

• Over the three months to Jun 30, 2026, investors withdrew a net $62.3M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +8.14%, +1.07%, +3.97%.

JHSC tries to match the John Hancock Dimensional Small Cap Index, before fees. Dimensional Fund Advisors builds and maintains the index. It starts with US companies smaller than the 750th largest. It then drops the very smallest, using a cutoff based on the 1,350th largest company or the bottom 2.5% of the market by free-float value. Free float counts only the shares that actually trade publicly.

Next come the factor screens. This rules-based approach is often called multifactor or smart beta investing. Stocks are sorted by size, relative price (how expensive a share is) and profitability. Companies with high prices and low profitability are generally left out. Among the smaller names, firms whose assets are growing quickly are also generally left out. The rules also set each stock's weight. No single company can be above 4% when the index is rebuilt.

The index is rebuilt and rebalanced twice a year. The fund must keep at least 80% of its net assets in index stocks, and it generally holds the same stocks as the index. As of June 30, 2026, it held no derivatives and 0.75% in cash. The prospectus lists portfolio turnover of 43%. Because the fund follows fixed rules, it will not move to cash in a downturn. Fees and trading costs can make its returns differ from the index.

• JHSC charges 0.42% a year, versus an average of 0.28% for the similar funds below (7th of 9, cheapest first).
• Of that, 0.39% is the management fee; the rest covers other fund expenses.
• The fee includes a 0.03% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $43 in the first year and $564 over 10 years (assuming a 5% annual return).

Its small-company focus and drops as deep as 42.7% make it better suited as a smaller add-on to a broad core holding than as the main one.

JHSC could add US small-company stocks, tilted toward cheaper and more profitable firms, alongside a core of large companies. Expect a rough ride at times. The fund launched in November 2017, so it has no record from the 2008 crisis. In the 2020 COVID crash it fell 42.7% in about a month and took 7.8 months to recover. In the 2022 bear market it dropped 23.2% and needed 14.6 months to recover, finally getting back in December 2023. Its worst calendar year was 2022, at -14.57%. Someone who has to sell shares or draw income during a slump could lock in losses.

Income is modest. The trailing yield was 1.04% as of October 27, 2026, paid twice a year. In the SEC's standard $10,000 example, costs total $564 over 10 years. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.