John Hancock Mortgage-Backed Securities ETF

JHMB

Market cap $203M

John Hancock Mortgage-Backed Securities ETF underperformed its benchmark, the Bloomberg U.S. MBS Index, during the first quarter period. In March, bond yields soared and prices fell in response to escalating conflict in the Middle East and stoking concerns about rising inflation. Investors began pricing in an interest rate increase before year-end as geopolitical uncertainty led to dramatic changes in expectations for Federal Reserve interest rate policy.

John Hancock Mortgage-Backed Securities ETF underperformed its benchmark, the Bloomberg U.S. MBS Index. Yield curve positioning contributed positively to performance, while sector allocation and individual security selection detracted from relative results. We continue to see favorable valuations and attractive total return prospects in the MBS market.

MBS saw positive returns in the third quarter. The fund outperformed its benchmark, the Bloomberg U.S. MBS Index. MBS outperformed the broader bond market, benefiting from their relatively high yields.

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MBS underperformed the broader bond market in Q4 2024 due to higher interest-rate sensitivity, despite the Fed's rate cuts. The fund outperformed its benchmark, driven by sector allocation, particularly in non-government-agency residential MBS and asset-backed securities. Security selection and yield curve positioning detracted from performance, with 30-year conventional mortgages and longer duration being notable drags.

A changing interest rate narrative prompted many advisors and investors to reevaluate their bond exposures this month. Asset managers stepped in to offer their perspectives on the changing market dynamics and where the risks and opportunities lie in the 2024 Fixed Income Symposium hosted by VettaFi.