Transcription
Get our newest MarketIntelligence lyInvestment Guide What’s new at John Hancock Investments Results for investors Open-end fundsQ4 2018
A message from our CEOJanuary 2019Financial markets around the world experienced a meaningful rise in volatility in 2018, with many stock and bond indexes innegative territory by the close of the year. Investors reacted negatively to rising interest rates in the United States and slowinggrowth in other parts of the world—particularly China—and to the uncertainty surrounding tariffs and trade tensions. Given howlong the current economic expansion and bull market have lasted, it’s prudent to expect slower growth on the horizon. However,the U.S. economy has so far remained on track: Unemployment sits close to historic lows, corporate earnings are solid, andinflation has yet to be a concern. The question for investors in 2019 is whether equities will regain their footing in terms of thesepositives or continue to experience volatility resulting largely from headline risk.Our expanding exchange-traded fund (ETF) lineupAnother way investors cope with changing markets is by using strategies that have demonstrated their value over the long term.It’s one of the reasons we chose Dimensional Fund Advisors to create the indexes behind our suite of John Hancock MultifactorETFs. Dimensional’s approach leverages decades of academic research showing that a focus on smaller companies, lower-pricedstocks, and higher profitability has been an effective strategy throughout market cycles. In October, we introduced John HancockMultifactor Emerging Markets ETF (JHEM), the 14th ETF in our lineup. I’m pleased to report that investors have placed more than 2 billion in John Hancock Multifactor ETFs since 2015 as they look for lower-cost access to market exposure with strategies thathave the potential to endure in the face of changing markets. I’m also pleased to announce that we’ve lowered the expenses onall multifactor sector ETFs by 10 basis points (bps), effective January 1, 2019.More shareholder-friendly initiativesLowering fund expenses, when possible, is one of the ways we strive to continually enhance the investment value we provideour shareholders. In addition to the expense reduction for our sector ETFs, I’m pleased to announce we’ve cut expenses forJohn Hancock Floating Rate Income Fund by 10bps across all share classes available to individual investors. The change, alsoeffective January 1, 2019, makes this fund a more compelling option for mitigating the risks associated with rising interest rates.Another initiative related to expense reductions involves owners of Class C shares. In 2018, we proposed, and the funds’ trusteesagreed, to automatically convert Class C shares held for 10 years or longer to Class A shares, which carry lower long-term expenses.Conversion means that shareholders of Class C shares benefit from this lower expense throughout the remaining period they holdtheir investments. Shares will be converted on or around the 14th day of the month in which the 10-year anniversary (the 120thmonth) of purchase is reached. Conversions will be noted on the quarterly statements of qualifying shareholders.We know you have many options when it comes to how you position your clients, and we sincerely appreciate the trust you’veplaced in us. We look forward to continuing to earn your business in the months and years ahead.Sincerely,Andrew G. ArnottPresident and CEO, John Hancock InvestmentsHead of Wealth and Asset Management, United States and Europe
Quarterly Investment GuideDiscover our different approach4 Specialized managers worldwide6What’s new at John Hancock Investments10 Results for investors16 Fund symbols218U.S. ational equity5456586062646668707274Blue Chip Growth FundClassic Value FundDisciplined Value FundDisciplined Value Mid Cap FundEquity Income FundFinancial Industries FundFundamental All Cap Core FundFundamental Large Cap Core FundFundamental Large Cap Value FundNew Opportunities FundRegional Bank FundSmall Cap Core FundSmall Cap Growth FundSmall Cap Value FundU.S. Global Leaders Growth FundU.S. Growth FundU.S. Quality Growth FundValue Equity FundDisciplined Value International FundEmerging Markets Equity FundEmerging Markets FundFundamental Global Franchise FundGlobal Equity FundGlobal Shareholder Yield FundGlobal Thematic Opportunities FundGreater China Opportunities FundInternational Growth FundInternational Small Company FundFixed income747678808284868890Bond FundCalifornia Tax-Free Income FundEmerging Markets Debt FundFloating Rate Income FundGovernment Income FundHigh Yield FundHigh Yield Municipal Bond FundIncome FundInvestment Grade Bond Fund92949698Q4 2018Short Duration Credit Opportunities FundSpectrum Income FundStrategic Income Opportunities FundTax-Free Bond Fund100 Alternative100102104106108110112114116Absolute Return Currency FundAlternative Asset Allocation FundDisciplined Alternative Yield FundEnduring Assets FundGlobal Absolute Return Strategies FundGlobal Conservative Absolute Return FundGlobal Focused Strategies FundSeaport Long/Short FundTechnical Opportunities Fund118 Asset allocation118120122124126128130Balanced FundIncome Allocation FundMultimanager Lifestyle Aggressive PortfolioMultimanager Lifestyle Balanced PortfolioMultimanager Lifestyle Conservative PortfolioMultimanager Lifestyle Growth PortfolioMultimanager Lifestyle Moderate Portfolio132 ESG132134136138ESG All Cap Core FundESG Core Bond FundESG International Equity FundESG Large Cap Core Fund140 ETF140142144146148150152154156158160162164166John Hancock Multifactor Consumer Discretionary ETFJohn Hancock Multifactor Consumer Staples ETFJohn Hancock Multifactor Developed International ETFJohn Hancock Multifactor Emerging Markets ETFJohn Hancock Multifactor Energy ETFJohn Hancock Multifactor Financials ETFJohn Hancock Multifactor Healthcare ETFJohn Hancock Multifactor Industrials ETFJohn Hancock Multifactor Large Cap ETFJohn Hancock Multifactor Materials ETFJohn Hancock Multifactor Mid Cap ETFJohn Hancock Multifactor Small Cap ETFJohn Hancock Multifactor Technology ETFJohn Hancock Multifactor Utilities ETF168 Pricing options169 How to contact us1
Discover our different approachA trusted brandJohn Hancock Investments is a premier asset managerrepresenting one of America’s most trusted brands, witha heritage of financial stewardship dating back to 1862.Helping our shareholders pursue their financial goals isat the core of everything we do. It’s why we support therole of professional financial advice and operate withthe highest standards of conduct and integrity.150 years of promises keptDiverse capabilities to help serve our clients Mutual funds Managed accounts ETFs Retirement portfolios Closed-end funds UCITS funds2 Education savings ESG funds 132 billion in assets under managementacross asset classes3 From our earliest days as a four-person operation onBoston’s State Street, John Hancock has grown toinclude a diversified global investment firm. The New York Times named John Hancock one of themost powerful brands of the 20th century.1Closed-end funds19881990Target-riskportfolios21% International equity3% Alternative1% Other419921994Educationsavings1996Our team of 200 professionals who specialize in manager researchand oversight vets more than 225 new strategies and holds over 100in-person oversight meetings with managers annually.All data is as of 12/31/18 unless otherwise noted.1 The New York Times, 1999.2 Not all funds are available to all investors. Funds domiciled outside the United States are not available to U.S. persons.3 89 billion in retail mutual fund and ETF assets and 43 billion in retirement assets, including seed capital.4 Includes money market funds, hybrid funds, and fund-of-fund allocations to unaffiliated products.228% Fixed incomeManaged accountsIntroduced multimanager approach196946% U.S. equity199820002002
Q4 2018A better way to investResults for investorsWe serve investors globally through a unique multimanagerapproach: We search the world to find proven portfolioteams with specialized expertise for every strategy we offer,then we apply robust investment oversight to ensure theycontinue to meet our uncompromising standards and servethe best interests of our shareholders.Our unique approach to asset management enables us toprovide a diverse set of investments backed by some ofthe world’s best managers, along with strong risk-adjustedreturns across asset classes.74 proven portfolio teams 77% of funds outperformed their Morningstar categoryaverages over the past 10 years 50 funds rated 4 or 5 stars by Morningstar at thehighest-rated share class28 elite asset managersPlease refer to pages 14–15 for complete Morningstar Rating information.111 investment strategiesESG fundsTarget-dateportfoliosUCITSfundsAlternative AssetAllocation tive list of asset managers shows managers of stand-alone funds only. All logos are the property of their respective owners.3
Specialized managers worldwideWe serve investors globally through a unique multimanager approach: We search the world to find proven portfolio teams withspecialized expertise for every strategy we offer, then we apply robust investment oversight to ensure they continue to meet ouruncompromising standards and serve the best interests of our shareholders.Aberdeen Standard Investments—Asset manager that provides innovative solutions inglobal multi-asset portfolios with special expertise in absolute return investing and disciplinedrisk managementBain Capital Credit—A leading global credit specialist, combining industry-specific microand macro trend research with rigorous, bottom-up security analysisBarrow, Hanley, Mewhinney & Strauss—Traditional, value-oriented manager followinga disciplined investment process for since the 1970s that employs fundamental research to findundervalued opportunitiesBoston Common Asset Management—An experienced investment manager and a leaderin global impact initiatives dedicated to the pursuit of financial return and social changeBoston Partners—Specialist in traditional value equity investing based on a time-testedinvestment process developed in the 1980s that emphasizes investing in companies with attractive value characteristics, strong business fundamentals, and positive business momentumBrandywine Global Investment Management—Institutional boutique manager thatfocuses on value investing across equity, global, fixed-income, and alternative asset classesBreckinridge Capital Advisors—An independently owned investment manager exclusivelyfocused on high-grade fixed income, offering municipal, corporate, government, and sustainablebond strategiesDimensional Fund Advisors—A pioneer in applying insight from academic research toa systematic investment process that pursues higher expected returns through advanced portfolio design and implementationEpoch Investment Partners—Manager of a unique equity strategy that seeks strongrisk-adjusted returns by emphasizing companies that generate growth of free cash flow, theintelligent use of that cash flow, and strong management teams with a track record of delivering returns to shareholders, such as cash dividends, share buybacks, and debt reductionAll logos are the property of their respective owners. Representative list of asset managers is as of 12/31/18.4
Q4 2018First Quadrant—Boutique manager of currency strategies for over 20 years, employinga systematic, theory-based process emphasizing dynamic allocation to profit from market inefficienciesGW&K Investment Management—Boutique manager using both fundamental r esearchand quantitative screening to identify high-quality small companies with sustainable, above-average earnings growth in niche marketsJohn Hancock Asset Management—Established asset manager with global resources andexpertise extending across equity, fixed-income, and alternative investments as well as assetallocation strategiesPictet Asset Management—A pioneer in thematic equity investing with a strategic focus onglobal and international marketsPzena Investment Management—Global investment manager employing a classic deepvalue equity strategy that seeks to generate excess long-term returns by focusing on good businesses trading at temporarily depressed pricesRedwood Investments—An institutional equity investment boutique that employs a uniquecombination of quantitative and qualitative analysis. Founded in 2004, the firm emphasizes acollaborative team structure and a best-ideas approach to portfolio constructionStone Harbor Investment Partners—Specialist in fixed-income investing with expertise covering a broad range of global credit segments, including high-yield and emerging-market debtSustainable Growth Advisers—Boutique investment manager focused on high-convictiongrowth stock investing in U.S. and global large-cap equitiesTrillium Asset Management—An employee-owned investment management firm with morethan 30 years of experience integrating environmental, social, and governance (ESG) factorsand shareholder advocacy into its investment processT. Rowe Price—Long-tenured manager offering expertise across asset classes and a risk-aware style of investing built on fundamental, in-house research on a global scaleWellington Management—Long-established global asset manager investing across the equity, fixed-income, currency, and commodity markets, including multistrategy, specialty,and alternative investment approaches5
What’s new at John Hancock InvestmentsA digital destination fully redesigned tomake investment decisions easierIntroducing the all-new jhinvestments.comTake a deeper dive into fund data withpowerful analytic tools: Comprehensive risk and return metrics Detailed performance attribution Historical portfolio composition Performance hypos Fund Compare, an interactive hub for researchingthousands of funds and ETFs from across theindustry, powered by Morningstar6
Q4 2018Register to create a fully personalized,interactive online experience:Tap into the collective insight of ourglobal network of asset managers: Monitor funds, download associated funddocuments, and explore related thought leadership Timely economic news, market returns,and industry trends Create your own Dashboard to follow fundsand market trends Insight and analysis on the trendsmoving markets today Get assistance with LiveChat, our real-timemessaging feature for registered advisors Market research and our 12- to 18-monthoutlook across asset classesUnlock the full suite of powerful newbusiness-building tools and featuresRegister today at jhinvestments.com/signup.7
What’s new at John Hancock Investments (continued)Market Intelligence The latest thinking fromour asset management networkIn our latest edition of Market Intelligence, a comprehensive survey ofthe investment landscape across asset classes, we investigate the themesthat are likely to move markets in the year ahead. Get the views fromour network:Available online andin the App Store!Q1 2019 OutlookAs of December 31, 2018Market IntelligenceTHE LATEST THINKING FROM OUR ASSET MANAGEMENT NETWORKjhinvestments.com Global growth moderatingEarnings growth peakingThe U.S. economy remainsrelatively strong, but growth rateselsewhere have shifted down agear as challenges mount in Asiaand Europe.The fundamental backdrop hadbeen supporting equity markets,but earnings growth may havepeaked as the impact of U.S. fiscalstimulus fades.Order code: MIBOOKMonetary policy tighteningnearing its limitsThe U.S. Federal Reserve isapproaching the end of its ratehiking cycle, and the withdrawalof liquidity from the globalfinancial system has weighed ona range of asset classes.Ask your John Hancock Investments Business Consultant for a detailed review of Market Intelligence and how the trends takingplace in today’s markets may affect your practice. Register today at jhinvestments.com/signup. John Hancock Investments reduces expenses on multifactor sector ETFsLowering fund expenses is one of the ways we strive to continually enhance the investment value we provide our shareholders.We’re pleased to announce that on January 1, 2019, we lowered the expenses on all nine of our multifactor sector ETFs by10 basis points. Our entire lineup tracks indexes designed by Dimensional Fund Advisors, one of the pioneers of factor-basedinvesting. To learn more, see pages 140–167.Diversification does not guarantee a profit or eliminate the risk of a loss.8
Q4 2018A closer look at John Hancock Disciplined Value FundMark E. Donovan, CFASenior Portfolio ManagerBoston PartnersThe fund has been a steady performer over the long term, boasting a 4- or 5-staroverall Morningstar Rating for the past 15 years. What’s driven the consistencyof the fund’s results?Our value investing discipline is rooted in three fundamental truths. We believe thatlow-valuation stocks outperform high-valuation stocks, that companies with strongfundamentals—particularly high returns on invested capital—outperform companies withpoor fundamentals, and that stocks with positive business momentum outperform thosewith negative momentum. These beliefs—and our discipline in sticking with our approachacross market cycles—are what drive the fund’s competitive return profile.After the market’s sharp pullback toward the end 2018, where are you now finding the most attractive opportunities?We think the setup in 2019 for valuation-conscious stock investors is strong, as we continue to see a relatively bifurcated market in termsof valuations. Financials, for example, are currently very cheap, and represent the largest absolute sector weight in the fund. We find banks,in particular, to be well positioned in terms of prospective loan growth, margin expansion, benign credit conditions, and attractivecapital returns. In addition, healthcare is the fund’s largest active weight, which is bound up with the fund’s exposure to Johnson &Johnson (J&J)—a top holding in the fund and one of its longest-held positions. J&J exemplifies our investment philosophy very well,and from a fundamental standpoint, we think its consumer product, drug, and medical device businesses are all extremely strong.John Hancock Disciplined Value Fund investment philosophyTargets companies with attractive relative valuations, strong fundamentals, and positive business momentumHow much arewe paying?What arewe buying?BusinessfundamentalsValuationWe buy stocks that exhibit: Attractive value characteristics Strong business fundamentals Catalyst for changeWe sell stocks based on:Is the business gettingbetter, staying thesame, or getting worse? Valuation: Appreciation to price target, or Weakening business fundamentals, or Reversal of momentumBusinessmomentumPortfolios with all three characteristics tendto outperform over timeSource: Boston Partners, 2019.To understand the full risks of John Hancock Disciplined Value Fund, please see pages 22 and 23.9
Results for investors4- and 5-star Morningstar ratings across asset classes1 as of 12/31/18U.S. EQUITYCategoryOverall Morningstar Rating Disciplined Value Fund (JVLIX)Boston PartnersRated 3 stars for 3 years out of 1,100 funds, 3 stars for 5 years out of 937 funds,and 4 stars for 10 years out of 686 funds.Large value Disciplined Value Mid Cap Fund2 (JVMIX)Boston PartnersRated 2 stars for 3 years out of 382 funds, 4 stars for 5 years out of 335 funds,and 5 stars for 10 years out of 235 funds.Mid-cap blend U.S. Global Leaders Growth Fund (USLIX)Sustainable Growth AdvisersRated 4 stars for 3 years out of 1,247 funds, 3 stars for 5 years out of 1,107 funds,and 4 stars for 10 years out of 799 funds.Large growth U.S. Growth Fund3 (JHUIX)Wellington ManagementRated 5 stars for 3 years out of 1,247 funds, 4 stars for 5 years out of 1,107 funds,and 2 stars for 10 years out of 799 funds.Large growth Greater China Opportunities Fund (JCOIX)John Hancock Asset ManagementRated 4 stars for 3 years out of 81 funds, 4 stars for 5 years out of 73 funds,and 3 stars for 10 years out of 41 funds.China region International Growth Fund4 (GOGIX)Wellington ManagementRated 4 stars for 3 years out of 364 funds, 5 stars for 5 years out of 315 funds,and 4 stars for 10 years out of 228 funds.Foreign large growth Managed byINTERNATIONAL EQUITYFIXED INCOME10 Bond Fund (JHBIX)John Hancock Asset ManagementRated 4 stars for 3 years out of 876 funds, 5 stars for 5 years out of 767 funds,and 5 stars for 10 years out of 560 funds.Intermediate-term bondCalifornia Tax-Free Income Fund (JCAFX)John Hancock Asset ManagementRated 4 stars for 3 years out of 90 funds, 3 stars for 5 years out of 87 funds,and 4 stars for 10 years out of 71 funds.Muni California longEmerging Markets Debt Fund (JMKIX)John Hancock Asset ManagementRated 4 stars for 3 years out of 224 funds and 4 stars for 5 years out of 174 funds.Emerging markets bond High Yield Fund (JYHIX)John Hancock Asset ManagementRated 4 stars for 3 years out of 604 funds, 3 stars for 5 years out of 507 funds,and 5 stars for 10 years out of 329 funds.High yield bond Investment Grade Bond Fund (TIUSX)John Hancock Asset ManagementRated 3 stars for 3 years out of 876 funds, 4 stars for 5 years out of 767 funds,and 5 stars for 10 years out of 560 funds.Intermediate-term bond
Q4 2018ALTERNATIVEManaged byCategoryOverall Morningstar Rating Enduring Assets Fund5 (JEEIX)Wellington ManagementRated 4 stars for 3 years out of 72 funds and 4 stars for 5 years out of 59 funds.Infrastructure Seaport Long/Short Fund6 (JSFDX)Wellington ManagementRated 3 stars for 3 years out of 199 funds and 4 stars for 5 years out of 118 funds.Long/short equity Balanced Fund (SVBIX)John Hancock Asset ManagementRated 4 stars for 3 years out of 697 funds, 4 stars for 5 years out of 610 funds,and 4 stars for 10 years out of 440 funds.Allocation—50% to 70% equity Income Allocation Fund (JIAIX)Rated 4 stars for 3 years out of 175 funds.John Hancock Asset ManagementAllocation—15% to 30% equity John Hancock Multifactor Financials ETF (JHMF)Rated 4 stars for 3 years out of 96 funds.Dimensional Fund AdvisorsFinancial John Hancock Multifactor Healthcare ETF (JHMH)Rated 4 stars for 3 years out of 130 funds.Dimensional Fund AdvisorsHealth John Hancock Multifactor Mid Cap ETF (JHMM)Rated 4 stars for 3 years out of 382 funds.Dimensional Fund AdvisorsMid-cap blend ASSET ALLOCATIONETFOverall rating is based on 3-, 5-, and 10-year, if applicable, Morningstar Risk-Adjusted Returns and accounts for variation in a fund’s monthly performance. Other share classes may berated differently. Hollow stars indicate Morningstar’s extended performance rating.7All funds may experience periods of negative performance.1 Ratings shown for mutual funds are Class I shares. Ratings for other share classes may vary due to fees and expenses.2 As of 1/31/14, the fund is closed to new investors.3 As of 10/31/18, the fund is closed to new investors.4 As of 3/23/18, the fund is closed to new investors.5 As of 3/1/19, the fund will be named John Hancock Infrastructure Fund.6 Prior to 4/20/18, the fund was named John Hancock Seaport Fund.7 For each managed product, including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts, with at least a 3-year history, Morningstarcalculates a Morningstar Rating based on a Morningstar Risk-Adjusted Return that accounts for variation in a fund’s monthly excess performance, placing more emphasis on downward variations and rewardingconsistent performance. Exchange-traded funds and open-end mutual funds are considered a single population for comparative purposes. The top 10.0% of funds in each category, the next 22.5%, 35.0%,22.5%, and bottom 10.0% receive 5, 4, 3, 2, or 1 star(s), respectively. The overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its3-, 5-, and 10-year (if applicable) Morningstar Rating metrics. The rating formula most heavily weights the 3-year rating, using the following calculation: 100% 3-year rating for 36 to 59 months of total returns,60% 5-year rating/40% 3-year rating for 60 to 119 months of total returns, and 50% 10-year rating/30% 5-year rating/20% 3-year rating for 120 or more months of total returns. Star ratings do not reflectthe effect of any applicable sales load. Morningstar’s extended performance rating is calculated by adjusting the historical total returns of the oldest share class to reflect the fee structure of a youngershare class, and then compounding the combined record of actual and adjusted performance into the 3-, 5-, and 10-year time periods necessary to produce Morningstar Risk-Adjusted Returns and a MorningstarRating. Extended performance ratings do not affect actual Morningstar ratings; the overall ratings for multi-share class funds are based on actual performance only or extended performance only. Once a shareclass turns 3 years old, the overall Morningstar Rating will be based on actual ratings only. Adjusted historical performance is only an approximation of actual returns, and Morningstar’s calculation methodologymay differ from those used by other entities. Past performance does not guarantee future results. 2019 Morningstar. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate,complete, or timely. Neither Morningstar nor any of its content providers are responsible for any damages or losses arising from any use of this information.Investing involves risks, including the potential loss of principal. The following are some general risks associated with various asset classes: equity market, mid- and small-capitalization,fixed-income, investment-grade, credit, interest-rate, foreign and emerging-market, currency, concentration, commodity, ESG policy, derivative, alternative, liquidity, and manager risks.This is not an all-inclusive list, and risks will vary. Please refer to the individual fact sheets for additional information and the prospectuses for full risk disclosures.11
Results for investors (continued)Annual returns for years ended December 31Performance is at net asset value and does not reflect sales charges. For complete performance information, please refer to the individual factsheets in this guide. For performance data current to the most recent month end, contact your financial professional or callJohn Hancock Investments at 800-225-5291. The performance data contained within this material represents past performance, whichdoes not guarantee future results. The return and principal value of an investment will fluctuate, so that shares, when redeemed, may beworth more or less than the original cost. Each fund’s current performance may be higher or lower and is subject to substantial changes.U.S. EQUITY FUNDS (%)Blue Chip GrowthClassic ValueDisciplined ValueDisciplined Value Mid Cap2Equity IncomeFinancial IndustriesFundamental All Cap CoreFundamental Large Cap CoreFundamental Large Cap ValueNew OpportunitiesRegional BankSmall Cap CoreSmall Cap GrowthSmall Cap ValueU.S. Global Leaders GrowthU.S. Growth4U.S. Quality Growth5Value .45–15.07–14.24
16 Fund symbols 18 U.S. equity 18 Blue Chip Growth Fund 20 Classic Value Fund 22 Disciplined Value Fund 24 Disciplined Value Mid Cap Fund 26 Equity Income Fund 28 Financial Industries Fund 30 Fundamental All Cap Core Fund 32 Fundamental Large Cap Core Fund 34 Fundamental Large Cap Value Fund 36 New Opportunities Fu
