Majestic Multi-Factor ETFs: Here Are 3 to Consider April 30, 2021
Whether it’s momentum, volatility, size, quality, or value, there is no one-size-fits-all solution when it comes to factor investing. This is where multi-factor funds can assist, and one place to start is the strongest 2021 performers.
Given varying market conditions, investors often need more than just one factor. The potential benefits an investor can reap using a multi-factor approach becomes fully apparent when considering that a single factor does not allow for adaptability when the market environment changes.
“Multifactor strategies build upon the long-standing concept of diversification: that combining exposures to multiple drivers of returns otherwise known as factors can help soften the effect of drawdowns and increase the potential for outperformance,” ETF provider BlackRock notes on its website.
Multi-Factor + Energy? The JHME ETF Is Already Up 20% YTD February 22, 2021
With an energy rally underway thanks to strong oil prices and a keen interest in renewable sources, ETF investors can get a factor-based strategy in the sector using the
JHME seeks to provide investment results that closely correspond, before fees and expenses, to the performance of the John Hancock Dimensional Energy Index (the index). The fund normally invests at least 80% of its net assets (plus any borrowings for investment purposes) in securities that compose the fund’s index.
The index is designed to comprise securities in the energy sector within the U.S. Universe whose market capitalizations are larger than that of the 1001st largest U.S. company at the time of reconstitution. The fund is up 30% within the last six months.