Manulife and Dimensional to partner on multifactor ETF suite

Feb 1st, 2017 | By | Category: Equities

Manulife Investments, in partnership with Dimensional Fund Advisors Canada, are planning to launch a series of four multifactor ETFs on Toronto Stock Exchange tracking Canadian large cap, developed international, US large cap, and US mid cap exposures.

Manulife and Dimensional to partner on multifactor ETF suite

Eduardo Repetto, Co-CEO and Co-CIO of Dimensional.

Factor investing sits between passive and active management, and attempts to deliver superior returns to investors by using an alternative form of indexing based on risk premia.

The ETFs will track indices designed by Dimensional which focus on 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.

“A key component of our strategy is to employ only the highest quality managers for our investment platform, and that’s precisely what we have gained with our Dimensional partnership,” said Bernard Letendre, President, Manulife Investments.  “ETFs have become an essential component of investors’ portfolios, now we can offer Canadians a best-in-class product managed by the bench strength of Dimensional.”

“Dimensional has applied advanced financial science to investment solutions for more than 35 years and our approach is rooted in decades of research into the factors that drive higher expected returns,” added Eduardo Repetto, Co-CEO and Co-CIO of Dimensional. “We are excited to work with Manulife to bring our investment approach to the Canadian ETF market.”

Manulife is expected to launch its ETFs in April 2017.

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