This is an actively managed bond ETF that invests most of its net assets in US mortgage-backed securities (MBS). It holds both government agency issued or guaranteed MBS and privately issued MBS, and the management team selects securities with the aim of outperforming its benchmark.

It suits investors who want stable current income within the bond portion of a portfolio while also seeking the potential for excess returns from active management.

It is an ETF run by John Hancock using an active management approach.

Under normal conditions, the fund invests most of its net assets in mortgage-backed securities, holding both government agency MBS and privately issued MBS. It allocates a portion to other asset-backed securities and cash equivalents, and the management team adjusts duration and holdings at its discretion depending on the interest rate and credit environment.

• Active management in which the team selects securities rather than simply tracking an index
• A portfolio that makes broad use of both government agency and private-label MBS

Assets under management (AUM) stand at $206.5M, and the total expense ratio is 0.39% per year.

Compared with similar MBS bond ETFs such as MBB and VMBS, the structural difference is active management, and performance and cost characteristics vary with the manager's discretion.

MBS react sensitively to the policy rate and mortgage rate trends, and price volatility tends to rise during periods of changing rates. Recently as well, return trends have moved in line with market expectations for the path of interest rates.

Demand for bonds that offer stable current income underpins fund flows, and money tends to flow into bond ETFs when expectations grow that rates have peaked. The fund tends to move together with interest in the broader active bond ETF category.

Monthly distributions and the potential for excess returns from active management are its strengths, while interest rate sensitivity and a relatively high fee are points to check.

The three ETFs shown in the table, MBB, VMBS and SPMB, invest in the same MBS bonds but are passive products that track an index and tend to have lower fees. JHMB, by contrast, differs in that it is actively managed. Among active MBS funds, JMBS is the direct comparison, and investors seeking broader exposure to the US aggregate bond market can also consider aggregate bond ETFs such as AGG and BND.

Here are the points to review before investing in JHMB. Although it is a bond fund, performance can vary with the interest rate environment, prepayments and the fee structure, so it is wise to check duration and distribution trends before buying.

Interest rate changes and mortgage prepayments are the main drivers of price and cash flow fluctuations. Even for a bond fund, short-term valuation losses can occur when rates rise, so duration risk should be considered as well.

It is a choice worth considering for investors who seek stable bond income while hoping for excess returns from active management. If cost is the priority, passive MBS ETFs such as MBB and VMBS may fit better, while JHMB suits those who prefer active management.