The Manulife John Hancock Investments Disciplined Value Select ETF (ticker: JDVL) and Disciplined Value International Select ETF (ticker: JDVI) seek to accomplish something many value strategies struggle to deliver: steady performance across changing markets. Rather than relying on superior earnings forecasts or informational advantages, the funds center on characteristics that research suggests can persist over time—valuation, fundamental quality, and business momentum.
Launched through a partnership between Manulife John Hancock Investments and Boston Partners, JDVL and JDVI aim to outperform over time by limiting downside risk in falling markets while keeping pace in rising markets, targeting large-cap companies with attractive relative valuations, strong fundamentals, and positive business momentum.
In conversation with The Wealth Advisor, Paul Heathwood, Head of North American Investor Relations & Distribution for Boston Partners, emphasizes that the funds’ foundation rests on data and discipline—not market forecasting. “We focus on three investible anomalies: the value anomaly, the fundamental anomaly, and the momentum anomaly,” he says. “You can look back and the academic research will tell you that these anomalies persist, and they can add value in a portfolio.”
A Framework Grounded in Probabilities
The disciplined value select investment process rejects the notion that successful investing requires predicting the future with precision. Instead, the funds seek to tilt the odds in investors’ favor by consistently applying a thoughtful framework across all market conditions.
“What our job is, is to build a portfolio that exhibits these characteristics more attractively than the benchmark,” Heathwood says. “And if we can do that, we think we have increased the probabilities of success.”
Heathwood contrasts that approach with active managers who pursue what he describes as informational advantages—believing they can build better earnings forecasts or access unique sources of information. “We view investing, successful investing, about probabilities,” he notes. “We think that’s very difficult to do consistently over time. So, we’d rather lean on this edge of characteristics that work in those investible anomalies.”
By focusing on persistent, research-backed factors rather than fleeting market trends, JDVL seeks a more consistent source of return. Decades of data show that companies combining value, quality, and momentum characteristics have often outperformed over full market cycles. JDVL systematically hunts for those companies that demonstrate all three.
The Three Circles: Beyond Simple Value
Although the funds bear “value” in their names, the portfolios’ success depends on more than valuation alone.
“Value is an important part of what we do, but it’s not a great timing tool,” Heathwood cautions. “Things can be inexpensive, and they can be inexpensive for a while.”
That’s where the second element—fundamental quality—comes in. This factor is intended to address why some cheap stocks deserve their discounts while others represent genuine opportunities. These strategies target companies with high operating returns, attractive profitability, and growth characteristics. Strong fundamentals help separate temporary setbacks from permanent impairments.
The third component adds the timing element many pure value strategies lack: momentum. But the funds’ definition of momentum differs significantly from price-based momentum strategies. “A very important part of our mixture is momentum, where you—and this is a bit of a timing tool—where you want to see tangible signs that things are getting better. We’re really looking at the business itself,” Heathwood explains.
He clarifies that the team doesn’t chase price trends. “We’re not focused on price momentum, so the price of the stock is not what attracts us to it in the movement of the price of the stock,” Heathwood says. “What are the underlying fundamentals? What do we have to pay for those fundamentals, and are things getting better or worse on the margin? And if they’re getting better, that will be a key element to add to the portfolio.”
Income statements showing improving margins, balance sheets demonstrating strengthening financial positions, and other tangible business improvements signal when the fund should commit capital. The approach aims to avoid value traps—stocks that appear cheap but face deteriorating business conditions—while capturing opportunities where fundamentals inflect positively.
Concentration Meets Conviction
JDVL holds 35 to 50 positions, representing the portfolio management team’s highest-conviction ideas within the large-cap value universe, and JDVI focuses on a similar range of non-U.S. companies. The concentration stands in contrast to the 80 to 100 positions in the corresponding mutual fund strategy, aiming to offer advisors access to a more focused implementation. The ETFs are managed by the same team running the mutual fund strategy.
“Same philosophy, same process, same team managing the mutual fund portfolios manage the ETF portfolios,” Heathwood points out.
The ETF structure brings advantages beyond the mutual fund’s track record. Tax efficiency, intraday liquidity, and transparent holdings might appeal to advisors and clients who prefer the ETF format. Turnover also tends to run somewhat lower in the ETF versions, thanks to the structure’s tax management capabilities.
The Case for Value in Current Markets
JDVL and JDVI seek to capitalize on an environment Heathwood says may be particularly conducive to the value style.
“I think having exposure to value is something you want in your portfolio,” he says. “We think the setup for value is very interesting, particularly in the more normalized rate environment. And with inflation being persistent, we think that’s going to be tough on multiples.”
Recent market history demonstrates value’s role in diversified portfolios. “If you look over the last five years, you’ve had a true market cycle post COVID, where you had a down market, things have recovered, value has done quite well in that environment,” notes Heathwood.
The 2022 experience proved particularly instructive. When growth stocks declined amid rising rates and multiple compression, value strategies generally provided better downside protection. For portfolios constructed to weather various market conditions, the defensive characteristics matter.
On the international side, he points out, “You have a pretty significant valuation discount, but I think the market is misunderstanding how improved the fundamentals are outside the U.S.” Businesses that have implemented corporate governance reforms—whether they’re Japanese or Korean industrial firms or European financial companies—are in considerably better shape now than they were a decade and a half ago, Heathwood says.
“So, there’s a lot of interesting opportunities outside the U.S. with improving fundamentals, a pretty significant evaluation discount,” he adds. “And as U.S. investors, you get the added benefit of some currency diversification, particularly with the U.S. dollar coming down a bit and still maybe being a bit overvalued. So, I think the opportunity for international is just excellent. And then being able to do it in an ETF in a more tax-efficient way, that’s just an easy add to an overall international asset allocation.”
Many client portfolios currently carry substantial growth exposure, either by design or as a consequence of strong performance in growth-oriented holdings over recent years. “I think whether it be the performance of growth means you’re overallocated or you’ve decided you need value, we think that the case for value is as strong as ever,” Heathwood observes. “And you can certainly see that over the last five plus years, and particularly in down markets, value again has done fairly well when the market was down, particularly in 2022.”
Active Management: A Requirement in Value
Heathwood argues that active management is essential in value investing, as passive approaches often underperform and may place advisors at a structural disadvantage.
“If you look at the data, going passive in value puts you in the third quartile,” he points out. “So, there are a lot of good active value managers out there. You have to find the right one.”
Many value-oriented ETFs tie themselves to single factors—free cash flow, book value, or another metric. Single-factor approaches may perform during certain periods but can lack adaptability across changing market conditions. “That may work for a period of time,” Heathwood says. “But if you’re looking for a consistent core building block of your overall asset allocation you want to do with an ETF, we think that disciplined value series of ETFs is the way to do it.”
The funds’ multifactor approach aims to provide more consistent results by balancing valuation, quality, and momentum simultaneously. “Whether it’s in U.S. large cap, international large cap, we think we’re going to be very competitive relative to the benchmark,” he adds. “And we think the ETF delivery system is a great way to do it. So, we’re really excited about being able to offer that to the advisor community.”
Portfolio Applications
Manulife John Hancock Investments’ disciplined value strategies seek to serve as a core large-cap holding with several potential applications within client portfolios. Advisors might consider the funds as replacements for underperforming value managers, as additions to portfolios lacking value exposure, or as complements to core equity positions carrying growth bias.
“I would say that you want value to be a core building block within your portfolio,” Heathwood suggests. “If you are looking to replace a potential underperforming value manager or you want to just add a value exposure or move away from core, that would be a very smart thing to do.”
JDVL and JDVI aim to enhance existing portfolio holdings rather than requiring wholesale restructuring. “Very complementary to existing exposure you have in the portfolio, and you’ve probably done very well with,” he notes.
For clients who have benefited from strong growth stock performance, the question becomes whether current positioning remains appropriate for future market conditions. JDVL and JDVI might offer a way to add value exposure without abandoning successful strategies, creating more balanced allocations designed to perform across different environments.
The partnership between Manulife John Hancock Investments and Boston Partners combines the former’s distribution capabilities and ETF expertise with a time-tested value approach. Boston Partners has employed the same investment process for three decades, with portfolio managers averaging multiple decades of investment experience.
“We think our competitive advantage is really in process and culture,” Heathwood adds. “We’re a process-driven firm. We focus on those three investible anomalies, and that shows through with the efficacy of the results we’ve been able to put up.”
Finding the Right Fit
The funds charge competitive expense ratios within the active value ETF landscape, and portfolios reflect the team’s bottom-up stock selection approach. No single position exceeds 5% of assets, underscoring the strategies’ focus on conviction while avoiding overconcentration.
With the goal of outperforming their respective benchmarks through security selection and position sizing rather than sector bets or market timing, the funds’ disciplined process aims to deliver results through complete market cycles rather than short-term performance chasing.
Manulife John Hancock Investments’ partnership with Boston Partners on JDVL and JDVI brings a probability-based value approach into an accessible ETF structure. The emphasis on quantifiable characteristics rather than subjective forecasts aims to provide repeatable performance across varying market environments.
“We know the niche that we fill within,” Heathwood emphasizes. “We think we do it rather well, and we’ve got the various investment vehicles that one would be interested in to help you do that in a tax-efficient and fee-efficient way.”
For advisors seeking actively managed value exposure built on empirical research and decades of implementation experience, JDVL and JDVI can address a specific role in strategic portfolio construction—offering disciplined exposure to value opportunities through a tax-aware, transparent ETF structure.
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Additional Resources
- Contact Manulife John Hancock Investments
- Manulife John Hancock Investments ETFs
- JDVL Investor Fact Sheet
- JDVI Investor Fact Sheet
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Disclosures
As of September 30, 2025.
This commentary is provided for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. No forecasts are guaranteed. The information contained here is based on sources believed to be reliable, but it is neither all-inclusive nor guaranteed by John Hancock Investment Management.
John Hancock Investment Management is not affiliated with Wealth Advisor.
Diversification does not guarantee a profit or eliminate the risk of a loss.
Investing involves risks, including the potential loss of principal. There is no guarantee that a fund’s investment strategy will be successful. Foreign investing, especially in emerging and frontier markets, has additional risks, such as currency and market volatility and political and social instability. Value stocks may decline in price. The use of hedging and derivatives could produce disproportionate gains or losses and may increase costs. It is possible that an active trading market for fund shares will not develop, which may hurt your ability to buy or sell fund shares, particularly in times of market stress. Trading securities actively can increase transaction costs, therefore lowering performance and taxable distributions. Large company stocks could fall out of favor, and illiquid securities may be difficult to sell at a price approximating their value. The stock prices of small and midsize companies can change more frequently and dramatically than those of large companies. The fund may invest its assets in a small number of issuers. Performance could suffer significantly from adverse events affecting these issuers. Liquidity—the extent to which a security may be sold or a derivative position closed without negatively affecting its market value, if at all—may be impaired by reduced trading volume, heightened volatility, rising interest rates, and other market conditions. Shares may trade at a premium or discount to their NAV in the secondary market. These variations may be greater when markets are volatile or subject to unusual conditions. There can be no assurance that active trading markets for the shares will develop or be maintained by market makers or authorized participants. Please see the fund’s prospectus for additional risks.
Clients should read and carefully consider a fund’s investment objectives, risks, charges, and expenses before investing. To request a prospectus or summary prospectus with this and other important information, call us at 800-225-6020, or visit us at jhinvestments.com/etf.
John Hancock ETFs are distributed by Foreside Fund Services, LLC in the United States, and are subadvised by Boston Partners, Dimensional Fund Advisors LP, Marathon Asset Management, or our affiliates Manulife Investment Management (US) LLC, and CQS (US), LLC. Foreside is not affiliated with John Hancock Investment Management Distributors LLC, Manulife Investment Management (US) LLC, CQS (US), LLC, Boston Partners, Dimensional Fund Advisors LP, or Marathon Asset Management.
It is important to note that there are material differences between investing in an ETF versus a mutual fund. ETFs trade on the major stock exchanges at any time during the day. Prices fluctuate throughout the day like stocks. ETFs generally have lower operating expenses, no investment minimums, are tax efficient, have no sales loads, and have brokerage commissions.
Mutual funds trade at closing NAV when shares are priced once a day after the markets close. Operating expenses may vary. Most mutual funds have investment minimums and are less tax efficient than ETFs; many mutual funds have sales charges, and they have no brokerage commissions.
A mutual fund is a pooled collection of assets that invests in stocks, bonds, and other investments and is regulated by the U.S. Securities and Exchange Commission. Mutual funds distributed by John Hancock Investment Management Distributors LLC, 200 Berkeley Street, Boston, MA 02116.
NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE. NOT INSURED BY ANY GOVERNMENT AGENCY.
THIS MATERIAL IS FOR INSTITUTIONAL/BROKER-DEALER USE ONLY. NOT FOR DISTRIBUTION OR USE WITH THE PUBLIC.
JHS-832706-2025-10-31 12/25
