Investing in John Hancock Mutual Funds

John Hancock is one of the most prominent fund families on the market, offering mutual funds that can be included in your 401(k) or other retirement accounts, as well as 529 college savings strategies and closed-end funds.

The company prides itself on being a premier asset manager, boasting its “manager-of-manager approach,” with over 250 annual meetings to identify proven managers and 73 established portfolio teams.

Diversification

Diversification is an integral component of any investment strategy, helping to mitigate risk by spreading your money across different investments, decreasing the chance that one adverse news event could impact all at once, and increasing the chances of positive returns across more than one of your holdings. Diversification should be part of every investment plan regardless of whether you save for retirement or another purpose.

John Hancock offers various funds that provide diversification, such as target-date portfolios. These portfolios manage asset allocation and diversification for you automatically, shifting investments away from more volatile stocks toward bonds as you approach retirement. Though more expensive than basic ETFs, target-date portfolios can save time and effort by managing assets for you.

John Hancock Mutual Fund’s website makes it easy to compare investment fees. Select “Mutual Funds” under Performance, choose your fund, and browse its prospectus page containing shareholder fees and annual operating expenses to determine which John Hancock funds best fit your situation quickly.

John Hancock Mutual Fund’s website allows you to quickly locate fund ratings for each investment they offer, with many receiving four and five-star ratings from Morningstar based on performance history, style of assets, and manager quality of each fund. By selecting high-rated funds, you will maximize returns.

John Hancock provides a diverse portfolio of funds, but some are only available through specific 401(k) plans. For example, their Total Stock Market Index Trust tracks an incompatible index than Vanguard’s version and thus may not be suitable for Boglehead investors.

John Hancock offers more than individual mutual funds; they also provide retirement planning services such as investment advisory and brokerage accounts. John Hancock investment advisors can assist in selecting investments suitable to your financial goals and risk tolerance – this advice is free for existing customers – helping navigate the complex world of investments.

Taxes

John Hancock provides participants various investment choices, such as mutual funds, 529 college savings plan strategies, and closed-end funds. Many funds available in John Hancock retirement accounts provide diversification across large, medium, and small-cap stocks and fixed income and tax efficiency with low taxable distributions – the firm currently manages over $100 billion in assets!

Portfolios managed by experienced professionals of this firm aim to deliver superior long-term returns. Access is provided to diverse assets, including domestic and international equity and debt securities, real estate investments, private equity holdings, and emerging markets. Furthermore, its investment team includes dedicated macro and global equity strategists that use fundamental research techniques to find opportunities across market cycles.

As a fiduciary, John Hancock must disclose all material facts and circumstances about its charges on plans. Plaintiffs in this matter allege that John Hancock improperly retained foreign tax credits (FTCs) generated by investments held within programs in its “Separate Accounts” without informing either plan about these credits, then used them offset fees charged in violation of ERISA fiduciary duties.

Plaintiffs asserted that John Hancock’s actions resulted in over $100 million added to their firm and violated ERISA’s strict fiduciary requirements, leading them to claim they should recover this amount as part of a constructive trust about taxes owed.

John Hancock group annuity contracts invest contributions in a sub-account that supports shares of mutual funds, collective trusts, and ETFs selected by their Plan. Ticker symbols in the table below reflect these underlying funds rather than John Hancock sub-accounts; therefore, information publicly accessed using these symbols does not reflect unit value and expense ratios for these John Hancock sub-accounts.

The performance numbers shown above represent the total returns for underlying funds, excluding the Fund’s operating expenses as well as certain contract-level and participant-level charges and guaranteed benefit fees if elected by your Plan. Please be aware that total returns do not consider brokerage commissions; these could reduce your actual return.

Expenses

Mutual fund investing can be an excellent way to save for retirement, but investors must understand the fees involved and their effect on returns. There are various kinds of fees charged: direct and indirect charges may vary; some immediate costs, such as 12b-1 fees, compensate brokers and insurance agents, while indirect charges, such as sub-transfer agency (sub-TA) charges, cover recordkeeping expenses.

As a John Hancock fund investor, your fees depend on what the fund spends for services. This is reflected by the gross expense ratio or percentage of fund assets dedicated to management and operating expenses. The total gross expense ratio includes all direct and indirect costs such as accounting fees; administrator and advisor fees; custodial fees (12b-1); distribution (12b-1) fees; legal, organizational, professional shareholder reporting & registration fees, etc.

Expenses can differ significantly between funds, with actively managed funds usually having higher costs than index-based ones. Before making your investment decision, thoroughly understand each fund’s fee structure.

John Hancock provides a diverse selection of mutual funds organized into three categories: equity, fixed income, and international. Each fund category offers various investment strategies; for instance, some focus on large companies, while others invest in midsize firms or startups. John Hancock funds provide you with diversification in your portfolio, while many even offer tax advantages.

John Hancock offers mutual funds that track market indexes. These funds aim to mimic the performance of various domestic, international, and global stock markets. Furthermore, John Hancock provides bond funds with municipal and corporate bond exposure.

Some funds specialize in high-yield and emerging market investments, but their performance could be affected by currency fluctuations or political and social instability.

John Hancock 401(k) fees are calculated based on the size and assets of your plan rather than how many participants there are, making fees often hidden from investors. Therefore, it’s wise to review your 401(k) account regularly to assess any potentially excessive fees; if these prove too costly for you to bear, then considering switching providers might be an option.

Fees

Officers elected by each fund’s Trustees manage day-to-day operations and implement policies formulated by them, whether those officers work for John Hancock Investment Management or another company within the Fund Complex. John Hancock Investment Management may pay its Officers employed as employees by other companies within its Fund Complex complex for services provided such as tax return preparation, shareholder reports, and regulatory filings – this amount was equal to an effective annual rate of 0.79% of average daily net assets as of March 31.

Each Fund incurs expenses related to its management of investments and operations in addition to paying its Manager Fee, such as brokerage, deposit, transactional fees and amortized depreciation and amortized cost method valuation expenses, amortized depreciation expenses, and any related fund-related expenses. As of March 31, 2020, these other expenses amounted to approximately 1.0% of average daily net assets.

Securities lending expenses represent the costs incurred by the Fund in borrowing and returning securities to lenders, such as borrowing periods and collateral costs for replacing them. Securities lending fees incurred by the Fund totaled $0.01 per share during 2020.

Investing in Funds involves risk, including potential loss of principal. Before investing, investors should carefully review each Fund’s investment objectives, risks, charges, expenses, and any other pertinent information in its prospectus and summary prospectus. To obtain a prospectus or summary prospectus from John Hancock Investment Management Distributors LLC, contact their Investor Relations Department at (800) 625-2654. Please read both documents thoroughly before investing, as investments are neither FDIC-insured nor guaranteed by any bank or entity; their value may fluctuate, and there can be no assurance they will reach their stated objective.