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Manulife Investments, in partnership with Dimensional Fund Advisors Canada, has launched a range of multi-factor ETFs on Toronto Stock Exchange, targeting Canadian large caps, US large and mid caps, and international equities.
Tracking in-house indices developed by Dimensional, each ETF increases exposure to factors that historically have been shown to boost risk-adjusted returns over the long-term. The chosen factors are based in part on the research of Nobel Laureate Eugene Fama and renowned researcher Kenneth French, both of whom serve on Dimensional’s board of directors.
Dimensional’s approach favours firms with smaller market capitalisations, lower relative prices, higher profitability, and positive price momentum.
Dimensional is considered a pioneer in the factor-investing and smart beta space, having developed its approach over 35 years of market research.
“What distinguishes Dimensional is our commitment to implementing the great ideas in finance,” said Eduardo Repetto, co-CEO, Dimensional Fund Advisors. “Decades of academic research into the factors that drive higher expected returns have found that in equity markets, relative performance among stocks largely depends on company size, relative price, and profitability. We have worked with Manulife to construct indices that the ETFs seek to track which emphasize and balance those factors while managing investment costs.”
“Our core strategy is to identify exceptional managers and offer value-added products to investors,” added Bernard Letendre, President, Manulife Investments. “We took our time entering the ETF market to ensure we had a great value proposition for our clients and we believe we achieved this with this initial line-up of ETFs.”
The newly launched ETFs, along with their respective management expense ratios (MERs) are listed below.
Manulife Multifactor Canadian Large Cap Index ETF (MCLC). MER – 0.40%
Manulife Multifactor US Large Cap Index ETF (MULC). MER – 0.35%
Manulife Multifactor US Mid Cap Index ETF (MUMC). MER – 0.45%
Manulife Multifactor Developed International Index ETF (MINT). MER – 0.50%
MULC, MUMC and MINT are also offered with built in currency risk mitigation relative to the Canadian dollar. The currency-hedged share classes have MERs of 0.40%, 0.50% and 0.55% respectively.