UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21777
John Hancock Funds III
(Exact name of registrant as specified in charter)
200 Berkeley Street, Boston, Massachusetts 02116
(Address of principal executive offices) (Zip code)
Salvatore Schiavone
Treasurer
200 Berkeley Street
Boston, Massachusetts 02116
(Name and address of agent for service)
Registrant's telephone number, including area code:617-663-4497
Date of fiscal year end: | March 31 | |
Date of reporting period: | September 30, 2019 |
ITEM 1. REPORTS TO STOCKHOLDERS.
John Hancock
Disciplined Value Fund
Semiannual report 9/30/19
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change, and you do not need to take any action. You may elect to receive shareholder reports and other communications electronically by calling John Hancock Investment Management at 800-225-5291 (Class A, Class B and Class C shares) or 888-972-8696 (Class I, Class I2, Class R1, Class R2, Class R3, Class R4, Class R5, and Class R6) or by contacting your financial intermediary.
You may elect to receive all reports in paper, free of charge, at any time. You can inform John Hancock Investment Management or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by following the instructions listed above. Your election to receive reports in paper will apply to all funds held with John Hancock Investment Management or your financial intermediary.
A message to shareholders
Dear shareholder,
It was a rather volatile time for stock markets in the United States during the six months ended September 30, 2019, with investor uncertainty surrounding trade with China, the impeachment inquiry against President Trump, and the broader health of the global economy leading to some dramatic swings in performance. Investors, who had generally shunned risk in the final months of 2018, regained their risk appetites in the first half of 2019. The rally in stocks continued through the end of July, when stocks again suffered a setback. Against this backdrop, the U.S. Federal Reserve pivoted from a normalizing stance to an easing stance, cutting rates for the first time in more than a decade in July and again in September.
While economic fundamentals in the United States appear reasonably solid, with a strong labor market and a confident consumer base, there are sure to be patches of market turbulence as the year goes on, particularly if the threat of a recession increases. As always, your best resource in unpredictable markets is your financial advisor, who can help position your portfolio so that it's sufficiently diversified to meet your long-term objectives and to withstand the inevitable bouts of market volatility along the way.
On behalf of everyone at John Hancock Investment Management, I'd like to take this opportunity to welcome new shareholders and thank existing shareholders for the continued trust you've placed in us.
Sincerely,
Andrew G. Arnott
President and CEO,
John Hancock Investment Management
Head of Wealth and Asset Management,
United States and Europe
This commentary reflects the CEO's views as of this report's period end and are subject to change at any time. Diversification does not guarantee investment returns and does not eliminate risk of loss. All investments entail risks, including the possible loss of principal. For more up-to-date information, you can visit our website at jhinvestments.com.
John Hancock
Disciplined Value Fund
INVESTMENT OBJECTIVE
The fund seeks to provide long-term growth of capital primarily through investment in equity securities. Current income is a secondary objective.
AVERAGE ANNUAL TOTAL RETURNS AS OF 9/30/19 (%)
The Russell 1000 Value Index is an unmanaged index containing those securities in the Russell 1000 Index with a lower price-to-book ratio and less-than-average growth orientation.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Figures from Morningstar, Inc. include reinvested distributions and do not take into account sales charges. Actual load-adjusted performance is lower.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative. Performance of the other share classes will vary based on the difference in the fees and expenses of those classes. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current month-end performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling 800-225-5291. For further information on the fund's objectives, risks, and strategy, see the fund's prospectus.
SECTOR COMPOSITION AS OF 9/30/19 (%)
TOP 10 HOLDINGS AS OF 9/30/19 (%)
Berkshire Hathaway, Inc., Class B | 4.6 |
Bank of America Corp. | 3.8 |
Comcast Corp., Class A | 3.1 |
JPMorgan Chase & Co. | 3.0 |
The Procter & Gamble Company | 2.7 |
Wells Fargo & Company | 2.6 |
Verizon Communications, Inc. | 2.5 |
Citigroup, Inc. | 2.3 |
Chubb, Ltd. | 2.3 |
United Technologies Corp. | 2.2 |
TOTAL | 29.1 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
A note about risks
The fund may be subject to various risks as described in the fund's prospectus. For more information, please refer to the "Principal risks" section of the prospectus.
COUNTRY COMPOSITION AS OF 9/30/19 (%)
United States | 87.1 |
Ireland | 3.0 |
Netherlands | 2.3 |
Switzerland | 2.3 |
Canada | 1.5 |
United Kingdom | 1.4 |
Bermuda | 1.1 |
Other countries | 1.3 |
TOTAL | 100.0 |
As a percentage of net assets. |
TOTAL RETURNS FOR THE PERIOD ENDED SEPTEMBER 30, 2019
Average annual total returns (%) with maximum sales charge | Cumulative total returns (%) with maximum sales charge | ||||||
1-year | 5-year | 10-year | 6-month | 5-year | 10-year | ||
Class A | -6.88 | 5.68 | 10.15 | -0.87 | 31.83 | 162.88 | |
Class B | -7.16 | 5.66 | 9.83 | -1.04 | 31.66 | 155.45 | |
Class C | -3.60 | 5.98 | 9.86 | 3.00 | 33.70 | 156.12 | |
Class I1 | -1.70 | 7.05 | 11.04 | 4.55 | 40.59 | 185.05 | |
Class I21 | -1.70 | 7.05 | 11.05 | 4.55 | 40.58 | 185.27 | |
Class R11 | -2.32 | 6.35 | 10.26 | 4.19 | 36.02 | 165.68 | |
Class R21,2 | -2.12 | 6.61 | 10.59 | 4.29 | 37.74 | 173.59 | |
Class R31 | -2.25 | 6.45 | 10.38 | 4.25 | 36.71 | 168.57 | |
Class R41 | -1.88 | 6.89 | 10.81 | 4.44 | 39.56 | 179.13 | |
Class R51 | -1.64 | 7.10 | 11.09 | 4.54 | 40.94 | 186.27 | |
Class R61,2 | -1.58 | 7.17 | 11.05 | 4.59 | 41.37 | 185.27 | |
Class NAV1 | -1.57 | 7.18 | 11.16 | 4.59 | 41.46 | 188.06 | |
Index 1† | 4.00 | 7.79 | 11.46 | 5.25 | 45.53 | 195.98 | |
Index 2† | 4.25 | 10.84 | 13.24 | 6.08 | 67.27 | 246.74 |
Performance figures assume all distributions have been reinvested. Figures reflect maximum sales charge on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares' CDSC declines annually between years 1 to 6 according to the following schedule: 5%, 4%, 3%, 3%, 2%, and 1%. No sales charge will be assessed after the sixth year. Class C shares sold within one year of purchase are subject to a 1% CDSC. Sales charges are not applicable to Class I, Class I2, Class R1, Class R2, Class R3, Class R4, Class R5, Class R6, and Class NAV shares.
The expense ratios of the fund, both net (including any fee waivers and/or expense limitations) and gross (excluding any fee waivers and/or expense limitations), are set forth according to the most recent publicly available prospectuses for the fund and may differ from those disclosed in the Financial highlights tables in this report. Net expenses reflect contractual expense limitations in effect until July 31, 2020 and are subject to change. Had the contractual fee waivers and expense limitations not been in place, gross expenses would apply. The expense ratios are as follows:
Class A | Class B | Class C | Class I | Class I2 | Class R1 | Class R2 | Class R3 | Class R4 | Class R5 | Class R6 | Class NAV | |
Gross (%) | 1.06 | 1.81 | 1.81 | 0.81 | 0.81 | 1.46 | 1.21 | 1.36 | 1.06 | 0.76 | 0.71 | 0.70 |
Net (%) | 1.05 | 1.80 | 1.80 | 0.80 | 0.80 | 1.45 | 1.20 | 1.35 | 0.95 | 0.75 | 0.70 | 0.69 |
Please refer to the most recent prospectus and annual or semiannual report for more information on expenses and any expense limitation arrangements for each class.
The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility and other factors, the fund's current performance may be higher or lower than the performance shown. For current to the most recent month-end performance data, please call 800-225-5291 or visit the fund's website at jhinvestments.com.
The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The fund's performance results reflect any applicable fee waivers or expense reductions, without which the expenses would increase and results would have been less favorable.
† | Index 1 is the Russell 1000 Value Index; Index 2 is the S&P 500 Index. |
See the following page for footnotes.
This chart and table show what happened to a hypothetical $10,000 investment in John Hancock Disciplined Value Fund for the share classes and periods indicated, assuming all distributions were reinvested. For comparison, we've shown the same investment in two separate indexes.
Start date | With maximum sales charge ($) | Without sales charge ($) | Index 1 ($) | Index 2 ($) | |
Class B3 | 9-30-09 | 25,545 | 25,545 | 29,598 | 34,674 |
Class C3 | 9-30-09 | 25,612 | 25,612 | 29,598 | 34,674 |
Class I1 | 9-30-09 | 28,505 | 28,505 | 29,598 | 34,674 |
Class I21 | 9-30-09 | 28,527 | 28,527 | 29,598 | 34,674 |
Class R11 | 9-30-09 | 26,568 | 26,568 | 29,598 | 34,674 |
Class R21,2 | 9-30-09 | 27,359 | 27,359 | 29,598 | 34,674 |
Class R31 | 9-30-09 | 26,857 | 26,857 | 29,598 | 34,674 |
Class R41 | 9-30-09 | 27,913 | 27,913 | 29,598 | 34,674 |
Class R51 | 9-30-09 | 28,627 | 28,627 | 29,598 | 34,674 |
Class R61,2 | 9-30-09 | 28,527 | 28,527 | 29,598 | 34,674 |
Class NAV1 | 9-30-09 | 28,806 | 28,806 | 29,598 | 34,674 |
The Russell 1000 Value Index is an unmanaged index containing those securities in the Russell 1000 Index with a lower price-to-book ratio and less-than-average growth orientation.
The S&P 500 Index is an unmanaged index that includes 500 widely traded common stocks.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Footnotes related to performance pages
1 | For certain types of investors, as described in the fund's prospectuses. |
2 | Class R6, and Class R2 shares were first offered on 9-1-11, and 3-1-12, respectively. Returns shown prior to Class R2 and Class R6 shares' commencement dates are those of Class A shares that have not been adjusted for class-specific expenses; otherwise, returns would vary. |
3 | The contingent deferred sales charge is not applicable. |
Your expenses |
SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 7 |
Account value on 4-1-2019 | Ending value on 9-30-2019 | Expenses paid during period ended 9-30-20191 | Annualized expense ratio | ||
Class A | Actual expenses/actual returns | $1,000.00 | $1,043.40 | $5.42 | 1.06% |
Hypothetical example | 1,000.00 | 1,019.70 | 5.35 | 1.06% | |
Class B | Actual expenses/actual returns | 1,000.00 | 1,039.60 | 9.23 | 1.81% |
Hypothetical example | 1,000.00 | 1,016.00 | 9.12 | 1.81% | |
Class C | Actual expenses/actual returns | 1,000.00 | 1,040.00 | 9.23 | 1.81% |
Hypothetical example | 1,000.00 | 1,016.00 | 9.12 | 1.81% | |
Class I | Actual expenses/actual returns | 1,000.00 | 1,045.50 | 4.14 | 0.81% |
Hypothetical example | 1,000.00 | 1,021.00 | 4.09 | 0.81% | |
Class I2 | Actual expenses/actual returns | 1,000.00 | 1,045.50 | 4.14 | 0.81% |
Hypothetical example | 1,000.00 | 1,021.00 | 4.09 | 0.81% | |
Class R1 | Actual expenses/actual returns | 1,000.00 | 1,041.90 | 7.35 | 1.44% |
Hypothetical example | 1,000.00 | 1,017.80 | 7.26 | 1.44% | |
Class R2 | Actual expenses/actual returns | 1,000.00 | 1,042.90 | 6.13 | 1.20% |
Hypothetical example | 1,000.00 | 1,019.00 | 6.06 | 1.20% | |
Class R3 | Actual expenses/actual returns | 1,000.00 | 1,042.50 | 6.84 | 1.34% |
Hypothetical example | 1,000.00 | 1,018.30 | 6.76 | 1.34% | |
Class R4 | Actual expenses/actual returns | 1,000.00 | 1,044.40 | 4.86 | 0.95% |
Hypothetical example | 1,000.00 | 1,020.30 | 4.80 | 0.95% | |
Class R5 | Actual expenses/actual returns | 1,000.00 | 1,045.40 | 3.84 | 0.75% |
Hypothetical example | 1,000.00 | 1,021.30 | 3.79 | 0.75% | |
Class R6 | Actual expenses/actual returns | 1,000.00 | 1,045.90 | 3.58 | 0.70% |
Hypothetical example | 1,000.00 | 1,021.50 | 3.54 | 0.70% | |
Class NAV | Actual expenses/actual returns | 1,000.00 | 1,045.90 | 3.53 | 0.69% |
Hypothetical example | 1,000.00 | 1,021.60 | 3.49 | 0.69% |
1 | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). |
8 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT |
Fund’s investments |
Shares | Value | ||||
Common stocks 99.0% | $14,651,530,840 | ||||
(Cost $12,774,457,528) | |||||
Communication services 9.9% | 1,472,552,306 | ||||
Diversified telecommunication services 2.5% | |||||
Verizon Communications, Inc. | 6,190,643 | 373,667,211 | |||
Interactive media and services 2.2% | |||||
Alphabet, Inc., Class A (A) | 264,499 | 322,990,309 | |||
Media 5.2% | |||||
Altice USA, Inc., Class A (A) | 2,464,616 | 70,685,187 | |||
Comcast Corp., Class A | 10,237,265 | 461,495,906 | |||
Fox Corp., Class A | 4,747,819 | 149,722,472 | |||
Liberty Global PLC, Series C (A) | 3,950,871 | 93,991,221 | |||
Consumer discretionary 5.3% | 778,556,082 | ||||
Hotels, restaurants and leisure 1.7% | |||||
Las Vegas Sands Corp. | 2,794,547 | 161,413,035 | |||
Wyndham Destinations, Inc. | 1,250,342 | 57,540,739 | |||
Wyndham Hotels & Resorts, Inc. | 668,502 | 34,588,293 | |||
Household durables 1.1% | |||||
Lennar Corp., A Shares | 1,573,987 | 87,907,174 | |||
Toll Brothers, Inc. | 1,807,245 | 74,187,407 | |||
Internet and direct marketing retail 0.9% | |||||
Booking Holdings, Inc. (A) | 64,154 | 125,909,282 | |||
Specialty retail 1.6% | |||||
AutoZone, Inc. (A) | 164,059 | 177,941,673 | |||
Best Buy Company, Inc. | 856,189 | 59,068,479 | |||
Consumer staples 5.0% | 734,309,084 | ||||
Food products 2.3% | |||||
Mondelez International, Inc., Class A | 3,913,367 | 216,487,462 | |||
Tyson Foods, Inc., Class A | 1,327,231 | 114,327,678 | |||
Household products 2.7% | |||||
The Procter & Gamble Company | 3,244,042 | 403,493,944 | |||
Energy 9.7% | 1,440,014,076 | ||||
Energy equipment and services 0.0% | |||||
Apergy Corp. (A) | 217,896 | 5,894,087 | |||
Oil, gas and consumable fuels 9.7% | |||||
Chevron Corp. | 1,110,784 | 131,738,982 | |||
Cimarex Energy Company | 2,529,430 | 121,260,874 | |||
ConocoPhillips | 3,808,687 | 217,018,985 | |||
Marathon Petroleum Corp. | 3,727,167 | 226,425,395 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 9 |
Shares | Value | ||||
Energy (continued) | |||||
Oil, gas and consumable fuels (continued) | |||||
Noble Energy, Inc. | 6,972,303 | $156,597,925 | |||
Pioneer Natural Resources Company | 598,807 | 75,311,956 | |||
Royal Dutch Shell PLC, ADR, Class A | 2,907,599 | 171,112,201 | |||
TOTAL SA, ADR | 2,699,916 | 140,395,632 | |||
Valero Energy Corp. | 2,278,954 | 194,258,039 | |||
Financials 27.7% | 4,099,426,722 | ||||
Banks 13.1% | |||||
Bank of America Corp. | 19,303,062 | 563,070,319 | |||
BB&T Corp. | 1,888,692 | 100,799,492 | |||
Citigroup, Inc. | 4,972,810 | 343,521,715 | |||
JPMorgan Chase & Co. | 3,753,908 | 441,797,433 | |||
SunTrust Banks, Inc. | 1,480,070 | 101,828,816 | |||
Wells Fargo & Company | 7,563,693 | 381,512,675 | |||
Capital markets 0.3% | |||||
The Charles Schwab Corp. | 1,103,255 | 46,149,157 | |||
Consumer finance 0.7% | |||||
Discover Financial Services | 1,249,397 | 101,313,603 | |||
Diversified financial services 4.6% | |||||
Berkshire Hathaway, Inc., Class B (A) | 3,269,975 | 680,220,201 | |||
Insurance 9.0% | |||||
American International Group, Inc. | 5,878,683 | 327,442,643 | |||
Aon PLC | 574,212 | 111,150,217 | |||
Chubb, Ltd. | 2,092,224 | 337,768,643 | |||
Everest Re Group, Ltd. | 585,638 | 155,832,415 | |||
The Allstate Corp. | 2,235,906 | 242,998,264 | |||
The Travelers Companies, Inc. | 1,103,108 | 164,021,129 | |||
Health care 15.1% | 2,240,142,129 | ||||
Biotechnology 0.7% | |||||
Biogen, Inc. (A) | 464,720 | 108,196,110 | |||
Health care equipment and supplies 2.9% | |||||
Medtronic PLC | 2,888,442 | 313,742,570 | |||
Zimmer Biomet Holdings, Inc. | 849,347 | 116,589,863 | |||
Health care providers and services 9.3% | |||||
Anthem, Inc. | 783,819 | 188,194,942 | |||
Cigna Corp. | 1,936,363 | 293,920,540 | |||
CVS Health Corp. | 2,869,414 | 180,973,941 | |||
Humana, Inc. | 266,271 | 68,077,507 | |||
McKesson Corp. | 968,196 | 132,313,665 | |||
Quest Diagnostics, Inc. | 1,720,039 | 184,095,774 | |||
UnitedHealth Group, Inc. | 870,149 | 189,100,781 |
10 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Health care (continued) | |||||
Health care providers and services (continued) | |||||
Universal Health Services, Inc., Class B | 901,272 | $134,064,210 | |||
Pharmaceuticals 2.2% | |||||
Novo Nordisk A/S, ADR | 1,072,029 | 55,423,899 | |||
Pfizer, Inc. | 7,666,249 | 275,448,327 | |||
Industrials 11.6% | 1,712,083,094 | ||||
Aerospace and defense 2.2% | |||||
United Technologies Corp. | 2,418,614 | 330,189,183 | |||
Air freight and logistics 2.4% | |||||
C.H. Robinson Worldwide, Inc. | 905,741 | 76,788,722 | |||
United Parcel Service, Inc., Class B | 2,243,473 | 268,812,935 | |||
Airlines 1.6% | |||||
Delta Air Lines, Inc. | 2,055,972 | 118,423,987 | |||
Southwest Airlines Company | 2,159,424 | 116,630,490 | |||
Building products 0.8% | |||||
Owens Corning | 1,874,352 | 118,459,046 | |||
Electrical equipment 1.3% | |||||
Eaton Corp. PLC | 2,315,789 | 192,557,855 | |||
Machinery 1.0% | |||||
Dover Corp. | 1,496,198 | 148,961,473 | |||
Road and rail 2.3% | |||||
Kansas City Southern | 1,328,691 | 176,729,190 | |||
Union Pacific Corp. | 1,015,744 | 164,530,213 | |||
Information technology 7.1% | 1,055,367,920 | ||||
Communications equipment 1.7% | |||||
Cisco Systems, Inc. | 5,007,971 | 247,443,847 | |||
Semiconductors and semiconductor equipment 2.6% | |||||
KLA Corp. | 801,272 | 127,762,820 | |||
Lam Research Corp. | 407,964 | 94,284,560 | |||
NXP Semiconductors NV | 1,584,630 | 172,914,826 | |||
Software 2.8% | |||||
Microsoft Corp. | 610,525 | 84,881,291 | |||
Oracle Corp. | 4,005,787 | 220,438,459 | |||
Symantec Corp. | 4,555,316 | 107,642,117 | |||
Materials 5.1% | 748,607,815 | ||||
Chemicals 2.6% | |||||
DuPont de Nemours, Inc. | 2,389,811 | 170,417,422 | |||
FMC Corp. | 1,352,247 | 118,565,017 | |||
The Mosaic Company | 4,827,841 | 98,970,741 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 11 |
Shares | Value | ||||
Materials (continued) | |||||
Construction materials 0.9% | |||||
CRH PLC, ADR | 3,897,847 | $133,930,023 | |||
Metals and mining 1.6% | |||||
Barrick Gold Corp. | 13,082,782 | 226,724,612 | |||
Real estate 1.3% | 195,227,585 | ||||
Equity real estate investment trusts 1.3% | |||||
Equity Residential | 1,226,471 | 105,795,388 | |||
Essex Property Trust, Inc. | 273,786 | 89,432,197 | |||
Utilities 1.2% | 175,244,027 | ||||
Electric utilities 1.2% | |||||
Edison International | 2,323,575 | 175,244,027 | |||
Yield (%) | Shares | Value | |||
Short-term investments 1.0% | $143,093,596 | ||||
(Cost $143,093,596) | |||||
Money market funds 1.0% | 143,093,596 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 1.8787(B) | 143,093,596 | 143,093,596 |
Total investments (Cost $12,917,551,124) 100.0% | $14,794,624,436 | ||||
Other assets and liabilities, net (0.0%) | (3,845,611) | ||||
Total net assets 100.0% | $14,790,778,825 |
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund. | |
Security Abbreviations and Legend | |
ADR | American Depositary Receipt |
(A) | Non-income producing security. |
(B) | The rate shown is the annualized seven-day yield as of 9-30-19. |
12 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial statements |
Assets | |
Unaffiliated investments, at value (Cost $12,917,551,124) | $14,794,624,436 |
Dividends and interest receivable | 14,398,959 |
Receivable for fund shares sold | 16,297,406 |
Receivable for investments sold | 241,019,702 |
Receivable for securities lending income | 1,335 |
Other assets | 443,673 |
Total assets | 15,066,785,511 |
Liabilities | |
Payable for investments purchased | 230,719,421 |
Payable for fund shares repurchased | 42,265,416 |
Payable to affiliates | |
Accounting and legal services fees | 1,259,375 |
Transfer agent fees | 901,461 |
Distribution and service fees | 38,589 |
Other liabilities and accrued expenses | 822,424 |
Total liabilities | 276,006,686 |
Net assets | $14,790,778,825 |
Net assets consist of | |
Paid-in capital | $11,883,002,488 |
Total distributable earnings (loss) | 2,907,776,337 |
Net assets | $14,790,778,825 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 13 |
Net asset value per share | |
Based on net asset value and shares outstanding - the fund has an unlimited number of shares authorized with no par value | |
Class A ($1,053,888,843 ÷ 49,843,462 shares)1 | $21.14 |
Class B ($3,915,176 ÷ 198,929 shares)1 | $19.68 |
Class C ($219,203,688 ÷ 11,102,506 shares)1 | $19.74 |
Class I ($7,456,369,018 ÷ 364,321,211 shares) | $20.47 |
Class I2 ($42,882,374 ÷ 2,095,134 shares) | $20.47 |
Class R1 ($16,353,447 ÷ 802,445 shares) | $20.38 |
Class R2 ($89,148,605 ÷ 4,367,071 shares) | $20.41 |
Class R3 ($13,561,860 ÷ 665,414 shares) | $20.38 |
Class R4 ($117,532,674 ÷ 5,743,677 shares) | $20.46 |
Class R5 ($145,542,419 ÷ 7,096,647 shares) | $20.51 |
Class R6 ($4,536,587,467 ÷ 221,202,077 shares) | $20.51 |
Class NAV ($1,095,793,254 ÷ 53,409,163 shares) | $20.52 |
Maximum offering price per share | |
Class A (net asset value per share ÷ 95%)2 | $22.25 |
1 | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
2 | On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced. |
14 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Investment income | |
Dividends | $162,534,615 |
Interest | 1,930,528 |
Securities lending | 9,815 |
Less foreign taxes withheld | (1,765,166) |
Total investment income | 162,709,792 |
Expenses | |
Investment management fees | 48,787,666 |
Distribution and service fees | 3,093,892 |
Accounting and legal services fees | 1,500,830 |
Transfer agent fees | 5,572,850 |
Trustees' fees | 155,035 |
Custodian fees | 688,333 |
State registration fees | 203,208 |
Printing and postage | 376,258 |
Professional fees | 142,774 |
Other | 182,840 |
Total expenses | 60,703,686 |
Less expense reductions | (616,735) |
Net expenses | 60,086,951 |
Net investment income | 102,622,841 |
Realized and unrealized gain (loss) | |
Net realized gain (loss) on | |
Unaffiliated investments and foreign currency transactions | 408,855,332 |
Affiliated investments | 1,955 |
408,857,287 | |
Change in net unrealized appreciation (depreciation) of | |
Unaffiliated investments | 150,817,044 |
Affiliated investments | 344 |
150,817,388 | |
Net realized and unrealized gain | 559,674,675 |
Increase in net assets from operations | $662,297,516 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 15 |
Six months ended 9-30-19 (unaudited) | Year ended 3-31-19 | |
Increase (decrease) in net assets | ||
From operations | ||
Net investment income | $102,622,841 | $217,933,817 |
Net realized gain | 408,857,287 | 1,084,887,904 |
Change in net unrealized appreciation (depreciation) | 150,817,388 | (1,233,949,764) |
Increase in net assets resulting from operations | 662,297,516 | 68,871,957 |
Distributions to shareholders | ||
From earnings | ||
Class A | — | (96,773,159) |
Class B | — | (565,315) |
Class C | — | (19,995,932) |
Class I | — | (656,997,874) |
Class I2 | — | (4,341,818) |
Class R1 | — | (1,460,119) |
Class R2 | — | (8,904,584) |
Class R3 | — | (1,150,321) |
Class R4 | — | (13,999,852) |
Class R5 | — | (16,429,256) |
Class R6 | — | (412,557,295) |
Class NAV | — | (98,778,716) |
Total distributions | — | (1,331,954,241) |
From fund share transactions | (780,232,018) | 1,172,354,452 |
Total decrease | (117,934,502) | (90,727,832) |
Net assets | ||
Beginning of period | 14,908,713,327 | 14,999,441,159 |
End of period | $14,790,778,825 | $14,908,713,327 |
16 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial highlights |
CLASS A SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $20.25 | $22.11 | $20.71 | $17.64 | $19.44 | $18.94 |
Net investment income2 | 0.12 | 0.26 | 0.20 | 0.18 | 0.16 | 0.20 |
Net realized and unrealized gain (loss) on investments | 0.77 | (0.28) | 2.39 | 3.08 | (1.18) | 1.19 |
Total from investment operations | 0.89 | (0.02) | 2.59 | 3.26 | (1.02) | 1.39 |
Less distributions | ||||||
From net investment income | — | (0.23) | (0.18) | (0.19) | (0.19) | (0.10) |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.84) | (1.19) | (0.19) | (0.78) | (0.89) |
Net asset value, end of period | $21.14 | $20.25 | $22.11 | $20.71 | $17.64 | $19.44 |
Total return (%)3,4 | 4.345 | 0.45 | 12.42 | 18.50 | (5.29) | 7.53 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $1,054 | $1,092 | $1,289 | $1,449 | $2,375 | $2,705 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.076 | 1.06 | 1.06 | 1.07 | 1.08 | 1.08 |
Expenses including reductions | 1.066 | 1.05 | 1.05 | 1.06 | 1.07 | 1.08 |
Net investment income | 1.136 | 1.18 | 0.92 | 0.96 | 0.87 | 1.04 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Does not reflect the effect of sales charges, if any. |
5 | Not annualized. |
6 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 17 |
CLASS B SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $18.92 | $20.76 | $19.52 | $16.64 | $18.38 | $18.00 |
Net investment income2 | 0.04 | 0.09 | 0.03 | 0.03 | 0.02 | 0.04 |
Net realized and unrealized gain (loss) on investments | 0.72 | (0.26) | 2.24 | 2.91 | (1.12) | 1.13 |
Total from investment operations | 0.76 | (0.17) | 2.27 | 2.94 | (1.10) | 1.17 |
Less distributions | ||||||
From net investment income | — | (0.06) | (0.02) | (0.06) | (0.05) | — |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.67) | (1.03) | (0.06) | (0.64) | (0.79) |
Net asset value, end of period | $19.68 | $18.92 | $20.76 | $19.52 | $16.64 | $18.38 |
Total return (%)3,4 | 3.965 | (0.34) | 11.61 | 17.66 | (6.02) | 6.68 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $4 | $6 | $9 | $13 | $14 | $19 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.826 | 1.81 | 1.81 | 1.82 | 1.85 | 1.91 |
Expenses including reductions | 1.816 | 1.80 | 1.80 | 1.81 | 1.84 | 1.90 |
Net investment income | 0.386 | 0.42 | 0.16 | 0.18 | 0.09 | 0.20 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Does not reflect the effect of sales charges, if any. |
5 | Not annualized. |
6 | Annualized. |
18 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS C SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $18.98 | $20.82 | $19.57 | $16.69 | $18.43 | $18.03 |
Net investment income2 | 0.04 | 0.09 | 0.03 | 0.03 | 0.02 | 0.07 |
Net realized and unrealized gain (loss) on investments | 0.72 | (0.26) | 2.25 | 2.91 | (1.12) | 1.12 |
Total from investment operations | 0.76 | (0.17) | 2.28 | 2.94 | (1.10) | 1.19 |
Less distributions | ||||||
From net investment income | — | (0.06) | (0.02) | (0.06) | (0.05) | — |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.67) | (1.03) | (0.06) | (0.64) | (0.79) |
Net asset value, end of period | $19.74 | $18.98 | $20.82 | $19.57 | $16.69 | $18.43 |
Total return (%)3,4 | 4.005 | (0.35) | 11.58 | 17.61 | (6.00) | 6.78 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $219 | $235 | $275 | $293 | $309 | $302 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.826 | 1.81 | 1.81 | 1.82 | 1.83 | 1.84 |
Expenses including reductions | 1.816 | 1.80 | 1.80 | 1.81 | 1.82 | 1.83 |
Net investment income | 0.386 | 0.43 | 0.16 | 0.18 | 0.12 | 0.35 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Does not reflect the effect of sales charges, if any. |
5 | Not annualized. |
6 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 19 |
CLASS I SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.58 | $21.45 | $20.12 | $17.14 | $18.91 | $18.44 |
Net investment income2 | 0.14 | 0.30 | 0.25 | 0.22 | 0.20 | 0.25 |
Net realized and unrealized gain (loss) on investments | 0.75 | (0.27) | 2.32 | 3.00 | (1.14) | 1.16 |
Total from investment operations | 0.89 | 0.03 | 2.57 | 3.22 | (0.94) | 1.41 |
Less distributions | ||||||
From net investment income | — | (0.29) | (0.23) | (0.24) | (0.24) | (0.15) |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.90) | (1.24) | (0.24) | (0.83) | (0.94) |
Net asset value, end of period | $20.47 | $19.58 | $21.45 | $20.12 | $17.14 | $18.91 |
Total return (%)3 | 4.554 | 0.64 | 12.71 | 18.80 | (5.02) | 7.86 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $7,456 | $7,399 | $6,988 | $7,540 | $6,730 | $7,026 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.825 | 0.82 | 0.81 | 0.81 | 0.81 | 0.81 |
Expenses including reductions | 0.815 | 0.81 | 0.80 | 0.80 | 0.80 | 0.81 |
Net investment income | 1.385 | 1.43 | 1.17 | 1.18 | 1.13 | 1.34 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
20 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS I2 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.58 | $21.45 | $20.12 | $17.14 | $18.92 | $18.45 |
Net investment income2 | 0.14 | 0.30 | 0.25 | 0.22 | 0.20 | 0.24 |
Net realized and unrealized gain (loss) on investments | 0.75 | (0.27) | 2.32 | 3.00 | (1.15) | 1.17 |
Total from investment operations | 0.89 | 0.03 | 2.57 | 3.22 | (0.95) | 1.41 |
Less distributions | ||||||
From net investment income | — | (0.29) | (0.23) | (0.24) | (0.24) | (0.15) |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.90) | (1.24) | (0.24) | (0.83) | (0.94) |
Net asset value, end of period | $20.47 | $19.58 | $21.45 | $20.12 | $17.14 | $18.92 |
Total return (%)3 | 4.554 | 0.64 | 12.71 | 18.80 | (5.07) | 7.85 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $43 | $50 | $54 | $54 | $49 | $89 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.825 | 0.82 | 0.81 | 0.81 | 0.82 | 0.84 |
Expenses including reductions | 0.815 | 0.81 | 0.80 | 0.80 | 0.81 | 0.83 |
Net investment income | 1.365 | 1.43 | 1.16 | 1.18 | 1.11 | 1.28 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 21 |
CLASS R1 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.56 | $21.41 | $20.09 | $17.13 | $18.90 | $18.43 |
Net investment income2 | 0.07 | 0.16 | 0.11 | 0.10 | 0.09 | 0.12 |
Net realized and unrealized gain (loss) on investments | 0.75 | (0.26) | 2.32 | 2.98 | (1.15) | 1.15 |
Total from investment operations | 0.82 | (0.10) | 2.43 | 3.08 | (1.06) | 1.27 |
Less distributions | ||||||
From net investment income | — | (0.14) | (0.10) | (0.12) | (0.12) | (0.01) |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.75) | (1.11) | (0.12) | (0.71) | (0.80) |
Net asset value, end of period | $20.38 | $19.56 | $21.41 | $20.09 | $17.13 | $18.90 |
Total return (%)3 | 4.194 | 0.01 | 11.99 | 18.00 | (5.66) | 7.09 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $16 | $16 | $21 | $27 | $26 | $22 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.455 | 1.46 | 1.46 | 1.47 | 1.48 | 1.54 |
Expenses including reductions | 1.445 | 1.45 | 1.45 | 1.46 | 1.47 | 1.53 |
Net investment income | 0.755 | 0.77 | 0.52 | 0.53 | 0.48 | 0.63 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
22 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R2 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.57 | $21.43 | $20.10 | $17.13 | $18.90 | $18.44 |
Net investment income2 | 0.10 | 0.22 | 0.16 | 0.14 | 0.13 | 0.19 |
Net realized and unrealized gain (loss) on investments | 0.74 | (0.27) | 2.33 | 2.99 | (1.14) | 1.14 |
Total from investment operations | 0.84 | (0.05) | 2.49 | 3.13 | (1.01) | 1.33 |
Less distributions | ||||||
From net investment income | — | (0.20) | (0.15) | (0.16) | (0.17) | (0.08) |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.81) | (1.16) | (0.16) | (0.76) | (0.87) |
Net asset value, end of period | $20.41 | $19.57 | $21.43 | $20.10 | $17.13 | $18.90 |
Total return (%)3 | 4.294 | 0.24 | 12.30 | 18.32 | (5.42) | 7.39 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $89 | $102 | $135 | $135 | $136 | $120 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.215 | 1.21 | 1.21 | 1.21 | 1.22 | 1.25 |
Expenses including reductions | 1.205 | 1.20 | 1.20 | 1.21 | 1.21 | 1.24 |
Net investment income | 0.995 | 1.02 | 0.76 | 0.78 | 0.74 | 0.99 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 23 |
CLASS R3 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.55 | $21.41 | $20.09 | $17.12 | $18.89 | $18.43 |
Net investment income2 | 0.08 | 0.18 | 0.13 | 0.12 | 0.10 | 0.14 |
Net realized and unrealized gain (loss) on investments | 0.75 | (0.27) | 2.32 | 2.99 | (1.14) | 1.15 |
Total from investment operations | 0.83 | (0.09) | 2.45 | 3.11 | (1.04) | 1.29 |
Less distributions | ||||||
From net investment income | — | (0.16) | (0.12) | (0.14) | (0.14) | (0.04) |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.77) | (1.13) | (0.14) | (0.73) | (0.83) |
Net asset value, end of period | $20.38 | $19.55 | $21.41 | $20.09 | $17.12 | $18.89 |
Total return (%)3 | 4.254 | 0.08 | 12.10 | 18.17 | (5.57) | 7.20 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $14 | $12 | $16 | $22 | $30 | $28 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.355 | 1.36 | 1.35 | 1.36 | 1.37 | 1.43 |
Expenses including reductions | 1.345 | 1.35 | 1.34 | 1.35 | 1.37 | 1.42 |
Net investment income | 0.815 | 0.86 | 0.63 | 0.66 | 0.57 | 0.73 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
24 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R4 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.59 | $21.45 | $20.12 | $17.14 | $18.92 | $18.45 |
Net investment income2 | 0.12 | 0.27 | 0.22 | 0.19 | 0.18 | 0.25 |
Net realized and unrealized gain (loss) on investments | 0.75 | (0.27) | 2.32 | 3.00 | (1.16) | 1.12 |
Total from investment operations | 0.87 | — | 2.54 | 3.19 | (0.98) | 1.37 |
Less distributions | ||||||
From net investment income | — | (0.25) | (0.20) | (0.21) | (0.21) | (0.11) |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.86) | (1.21) | (0.21) | (0.80) | (0.90) |
Net asset value, end of period | $20.46 | $19.59 | $21.45 | $20.12 | $17.14 | $18.92 |
Total return (%)3 | 4.444 | 0.52 | 12.54 | 18.63 | (5.22) | 7.67 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $118 | $143 | $231 | $286 | $268 | $228 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.065 | 1.06 | 1.06 | 1.07 | 1.06 | 1.08 |
Expenses including reductions | 0.955 | 0.95 | 0.95 | 0.96 | 0.96 | 0.97 |
Net investment income | 1.245 | 1.26 | 1.02 | 1.03 | 1.00 | 1.31 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 25 |
CLASS R5 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.62 | $21.48 | $20.15 | $17.16 | $18.94 | $18.47 |
Net investment income2 | 0.14 | 0.31 | 0.26 | 0.23 | 0.21 | 0.24 |
Net realized and unrealized gain (loss) on investments | 0.75 | (0.26) | 2.32 | 3.00 | (1.15) | 1.19 |
Total from investment operations | 0.89 | 0.05 | 2.58 | 3.23 | (0.94) | 1.43 |
Less distributions | ||||||
From net investment income | — | (0.30) | (0.24) | (0.24) | (0.25) | (0.17) |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.91) | (1.25) | (0.24) | (0.84) | (0.96) |
Net asset value, end of period | $20.51 | $19.62 | $21.48 | $20.15 | $17.16 | $18.94 |
Total return (%)3 | 4.544 | 0.75 | 12.73 | 18.88 | (5.02) | 7.98 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $146 | $166 | $198 | $200 | $275 | $376 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.765 | 0.76 | 0.76 | 0.76 | 0.77 | 0.73 |
Expenses including reductions | 0.755 | 0.75 | 0.75 | 0.75 | 0.76 | 0.72 |
Net investment income | 1.435 | 1.48 | 1.22 | 1.27 | 1.16 | 1.27 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
26 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R6 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.61 | $21.48 | $20.14 | $17.16 | $18.94 | $18.47 |
Net investment income2 | 0.15 | 0.32 | 0.27 | 0.24 | 0.23 | 0.31 |
Net realized and unrealized gain (loss) on investments | 0.75 | (0.27) | 2.33 | 3.00 | (1.15) | 1.12 |
Total from investment operations | 0.90 | 0.05 | 2.60 | 3.24 | (0.92) | 1.43 |
Less distributions | ||||||
From net investment income | — | (0.31) | (0.25) | (0.26) | (0.27) | (0.17) |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.92) | (1.26) | (0.26) | (0.86) | (0.96) |
Net asset value, end of period | $20.51 | $19.61 | $21.48 | $20.14 | $17.16 | $18.94 |
Total return (%)3 | 4.594 | 0.76 | 12.84 | 18.97 | (5.00) | 7.99 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $4,537 | $4,584 | $4,564 | $3,077 | $2,024 | $1,444 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.715 | 0.71 | 0.71 | 0.72 | 0.72 | 0.72 |
Expenses including reductions | 0.705 | 0.70 | 0.70 | 0.69 | 0.69 | 0.69 |
Net investment income | 1.485 | 1.54 | 1.25 | 1.27 | 1.26 | 1.63 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 27 |
CLASS NAV SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.62 | $21.49 | $20.15 | $17.16 | $18.94 | $18.47 |
Net investment income2 | 0.15 | 0.33 | 0.27 | 0.24 | 0.23 | 0.27 |
Net realized and unrealized gain (loss) on investments | 0.75 | (0.28) | 2.34 | 3.01 | (1.15) | 1.16 |
Total from investment operations | 0.90 | 0.05 | 2.61 | 3.25 | (0.92) | 1.43 |
Less distributions | ||||||
From net investment income | — | (0.31) | (0.26) | (0.26) | (0.27) | (0.17) |
From net realized gain | — | (1.61) | (1.01) | — | (0.59) | (0.79) |
Total distributions | — | (1.92) | (1.27) | (0.26) | (0.86) | (0.96) |
Net asset value, end of period | $20.52 | $19.62 | $21.49 | $20.15 | $17.16 | $18.94 |
Total return (%)3 | 4.594 | 0.77 | 12.85 | 18.95 | (4.95) | 7.98 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $1,096 | $1,105 | $1,219 | $1,245 | $750 | $844 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.705 | 0.70 | 0.70 | 0.70 | 0.70 | 0.69 |
Expenses including reductions | 0.695 | 0.69 | 0.69 | 0.69 | 0.69 | 0.69 |
Net investment income | 1.505 | 1.54 | 1.28 | 1.27 | 1.25 | 1.45 |
Portfolio turnover (%) | 29 | 69 | 45 | 65 | 61 | 44 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
28 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Notes to financial statements (unaudited) |
SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 29 |
30 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT |
SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 31 |
32 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT |
Class | Expense reduction |
Class A | $39,433 |
Class B | 171 |
Class C | 8,407 |
Class I | 277,369 |
Class I2 | 1,623 |
Class R1 | 600 |
Class R2 | 3,516 |
Class | Expense reduction |
Class R3 | $464 |
Class R4 | 4,859 |
Class R5 | 5,808 |
Class R6 | 167,640 |
Class NAV | 41,039 |
Total | $550,929 |
SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 33 |
Class | Rule 12b-1 Fee | Service fee |
Class A | 0.30% | — |
Class B | 1.00% | — |
Class C | 1.00% | — |
Class R1 | 0.50% | 0.25% |
Class R2 | 0.25% | 0.25% |
Class R3 | 0.50% | 0.15% |
Class R4 | 0.25% | 0.10% |
Class R5 | — | 0.05% |
Class | Distribution and service fees | Transfer agent fees |
Class A | $1,332,705 | $625,433 |
34 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT |
Class | Distribution and service fees | Transfer agent fees |
Class B | $23,213 | $2,714 |
Class C | 1,136,659 | 133,323 |
Class I | — | 4,495,664 |
Class I2 | — | 26,408 |
Class R1 | 59,613 | 950 |
Class R2 | 236,230 | 5,548 |
Class R3 | 39,907 | 733 |
Class R4 | 226,788 | 7,663 |
Class R5 | 38,777 | 9,140 |
Class R6 | — | 265,274 |
Total | $3,093,892 | $5,572,850 |
Borrower or Lender | Weighted Average Loan Balance | Days Outstanding | Weighted Average Interest Rate | Interest Income (Expense) |
Lender | $5,961,781 | 4 | 2.360% | $1,563 |
Six Months Ended 9-30-19 | Year Ended 3-31-19 | |||
Shares | Amount | Shares | Amount | |
Class A shares | ||||
Sold | 3,477,533 | $72,213,745 | 9,569,929 | $207,425,723 |
Distributions reinvested | — | — | 4,960,098 | 94,985,868 |
Repurchased | (7,544,337) | (156,446,462) | (18,918,870) | (406,531,010) |
Net decrease | (4,066,804) | $(84,232,717) | (4,388,843) | $(104,119,419) |
Class B shares | ||||
Sold | 331 | $6,375 | 11,891 | $237,117 |
Distributions reinvested | — | — | 28,822 | 516,784 |
Repurchased | (92,681) | (1,794,794) | (205,780) | (4,153,192) |
Net decrease | (92,350) | $(1,788,419) | (165,067) | $(3,399,291) |
SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 35 |
Six Months Ended 9-30-19 | Year Ended 3-31-19 | |||
Shares | Amount | Shares | Amount | |
Class C shares | ||||
Sold | 364,417 | $7,052,709 | 1,904,627 | $37,952,720 |
Distributions reinvested | — | — | 1,016,186 | 18,281,188 |
Repurchased | (1,640,093) | (31,773,172) | (3,767,579) | (76,202,010) |
Net decrease | (1,275,676) | $(24,720,463) | (846,766) | $(19,968,102) |
Class I shares | ||||
Sold | 44,693,620 | $893,145,008 | 111,952,595 | $2,334,678,792 |
Distributions reinvested | — | — | 29,864,095 | 552,485,754 |
Repurchased | (58,220,982) | (1,167,783,449) | (89,707,048) | (1,831,894,283) |
Net increase (decrease) | (13,527,362) | $(274,638,441) | 52,109,642 | $1,055,270,263 |
Class I2 shares | ||||
Sold | 63,872 | $1,277,378 | 116,398 | $2,415,486 |
Distributions reinvested | — | — | 234,229 | 4,333,235 |
Repurchased | (527,884) | (10,503,281) | (320,123) | (6,990,181) |
Net increase (decrease) | (464,012) | $(9,225,903) | 30,504 | $(241,460) |
Class R1 shares | ||||
Sold | 115,719 | $2,299,375 | 269,688 | $5,592,580 |
Distributions reinvested | — | — | 47,717 | 883,243 |
Repurchased | (137,881) | (2,755,136) | (483,663) | (10,113,192) |
Net decrease | (22,162) | $(455,761) | (166,258) | $(3,637,369) |
Class R2 shares | ||||
Sold | 339,173 | $6,768,813 | 919,555 | $18,862,900 |
Distributions reinvested | — | — | 362,873 | 6,716,771 |
Repurchased | (1,179,643) | (23,213,622) | (2,370,440) | (50,415,063) |
Net decrease | (840,470) | $(16,444,809) | (1,088,012) | $(24,835,392) |
Class R3 shares | ||||
Sold | 231,461 | $4,655,230 | 90,292 | $1,868,437 |
Distributions reinvested | — | — | 62,178 | 1,150,285 |
Repurchased | (194,429) | (3,908,905) | (294,238) | (6,083,846) |
Net increase (decrease) | 37,032 | $746,325 | (141,768) | $(3,065,124) |
Class R4 shares | ||||
Sold | 461,355 | $9,221,044 | 1,274,605 | $27,157,069 |
Distributions reinvested | — | — | 755,931 | 13,999,851 |
Repurchased | (1,992,755) | (40,266,711) | (5,504,672) | (117,568,717) |
Net decrease | (1,531,400) | $(31,045,667) | (3,474,136) | $(76,411,797) |
36 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT |
Six Months Ended 9-30-19 | Year Ended 3-31-19 | |||
Shares | Amount | Shares | Amount | |
Class R5 shares | ||||
Sold | 370,996 | $7,471,538 | 994,259 | $20,610,888 |
Distributions reinvested | — | — | 886,630 | 16,429,257 |
Repurchased | (1,713,789) | (34,407,240) | (2,638,461) | (54,438,870) |
Net decrease | (1,342,793) | $(26,935,702) | (757,572) | $(17,398,725) |
Class R6 shares | ||||
Sold | 15,252,506 | $305,601,166 | 45,397,477 | $956,142,171 |
Distributions reinvested | — | — | 22,117,614 | 409,618,214 |
Repurchased | (27,808,914) | (557,607,939) | (46,226,115) | (964,352,069) |
Net increase (decrease) | (12,556,408) | $(252,006,773) | 21,288,976 | $401,408,316 |
Class NAV shares | ||||
Sold | 3,035,836 | $60,070,310 | 2,989,409 | $61,144,563 |
Distributions reinvested | — | — | 5,330,746 | 98,778,716 |
Repurchased | (5,939,105) | (119,553,998) | (8,731,977) | (191,170,727) |
Net decrease | (2,903,269) | $(59,483,688) | (411,822) | $(31,247,448) |
Total net increase (decrease) | (38,585,674) | $(780,232,018) | 61,988,878 | $1,172,354,452 |
SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE FUND | 37 |
Dividends and distributions | |||||||||
Affiliate | Beginning share amount | Shares purchased | Shares sold | Ending share amount | Income distributions received | Capital gain distributions received | Realized gain (loss) | Change in unrealized appreciation (depreciation) | Ending value |
John Hancock Collateral Trust* | 6,626,454 | 5,875,944 | (12,502,398) | — | — | — | $1,955 | $344 | — |
* | Refer to the Securities lending note within Note 2 for details regarding this investment. |
38 | JOHN HANCOCK DISCIPLINED VALUE FUND | SEMIANNUAL REPORT |
Continuation of Investment Advisory and Subadvisory Agreements
Evaluation of Advisory and Subadvisory Agreements by the Board of Trustees
This section describes the evaluation by the Board of Trustees (the Board) of John Hancock Funds III (the Trust) of the Advisory Agreement (the Advisory Agreement) with John Hancock Investment Management, LLC (the Advisor, formerly John Hancock Advisers, LLC) and the Subadvisory Agreement (the Subadvisory Agreement) with Boston Partners Global Investors, Inc. (the Subadvisor), for John Hancock Disciplined Value Fund (the fund). The Advisory Agreement and Subadvisory Agreement are collectively referred to as the Agreements. Prior to the June23-26, 2019 in-person meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the Agreements at an in-person meeting held on May28-30, 2019.
Approval of Advisory and Subadvisory Agreements
At in-person meetings held on June 23-26, 2019, the Board, including the Trustees who are not parties to any Agreement or considered to be interested persons of the Trust under the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees), reapproved for an annual period the continuation of the Advisory Agreement between the Trust and the Advisor and the Subadvisory Agreement between the Advisor and the Subadvisor with respect to the fund.
In considering the Advisory Agreement and the Subadvisory Agreement, the Board received in advance of the meetings a variety of materials relating to the fund, the Advisor and the Subadvisor, including comparative performance, fee and expense information for a peer group of similar funds prepared by an independent third-party provider of fund data, performance information for an applicable benchmark index; and, with respect to the Subadvisor, comparative performance information for comparably managed accounts, as applicable, and other information provided by the Advisor and the Subadvisor regarding the nature, extent and quality of services provided by the Advisor and the Subadvisor under their respective Agreements, as well as information regarding the Advisor's revenues and costs of providing services to the fund and any compensation paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreement are considered, particular focus is given to information concerning fund performance, comparability of fees and total expenses, and profitability. However, the Board notes that the evaluation process with respect to the Advisor and the Subadvisor is an ongoing one. In this regard, the Board also took into account discussions with management and information provided to the Board (including its various committees) at prior meetings with respect to the services provided by the Advisor and the Subadvisor to the fund, including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisor with respect to the fund. The information received and considered by the Board in connection with the May and June meetings and throughout the year was both written and oral. The Board also considered the nature, quality, and extent of non-advisory services, if any, to be provided to the fund by the Advisor's affiliates, including distribution services. The Board considered the Advisory Agreement and Subadvisory Agreement separately in the course of its review. In doing so, the Board noted the respective roles of the Advisor and Subadvisor in providing services to the fund.
Throughout the process, the Board asked questions of and requested additional information from management. The Board is assisted by counsel for the Trust and the Independent Trustees are also separately assisted by independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements and discussed the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement with respect to the fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets, and the industry) and did not treat any single factor as determinative, and each Trustee may have attributed different weights to different factors. The Board's conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board's ongoing regular review of fund performance and operations throughout the year.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the fund, the Board reviewed information provided by the Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor's compliance and regulatory history, including its Form ADV. The Board also noted that on a regular basis it receives and reviews information from the Trust's Chief Compliance Officer (CCO) regarding the fund's compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board observed that the scope of services provided by the Advisor, and of the undertakings required of the Advisor in connection with those services, including maintaining and monitoring its own and the fund's compliance programs, risk management programs, liquidity management programs and cybersecurity programs, had expanded over time as a result of regulatory, market and other developments. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the fund, including, but not limited to, general supervision of and coordination of the services provided by the Subadvisor, and is also responsible for monitoring and reviewing the activities of the Subadvisor and other third-party service providers. The Board also considered the significant risks assumed by the Advisor in connection with the services provided to the fund including entrepreneurial risk in sponsoring new funds and ongoing risks including investment, operational, enterprise, litigation, regulatory and compliance risks with respect to all funds.
In considering the nature, extent, and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor's management and the quality of the performance of the Advisor's duties, through Board meetings, discussions and reports during the preceding year and through each Trustee's experience as a Trustee of the Trust and of the other trusts in the John Hancock group of funds complex (the John Hancock Fund Complex).
In the course of their deliberations regarding the Advisory Agreement, the Board considered, among other things:
(e) | the financial condition of the Advisor and whether it has the financial wherewithal to provide a high level and quality of services to the fund; |
(f) | the Advisor's initiatives intended to improve various aspects of the Trust's operations and investor experience with the fund; and |
(g) | the Advisor's reputation and experience in serving as an investment advisor to the Trust and the benefit to shareholders of investing in funds that are part of a family of funds offering a variety of investments. |
The Board concluded that the Advisor may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the fund.
Investment performance.In considering the fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the fund's performance results. In connection with the consideration of the Advisory Agreement, the Board:
(a) | reviewed information prepared by management regarding the fund's performance; |
(b) | considered the comparative performance of an applicable benchmark index; |
(c) | considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; and |
(d) | took into account the Advisor's analysis of the fund's performance and its plans and recommendations regarding the Trust's subadvisory arrangements generally. |
The Board noted that while it found the data provided by the independent third-party generally useful it recognized its limitations, including in particular that the data may vary depending on the end date selected and the results of the performance comparisons may vary depending on the selection of the peer group. The Board noted that the fund outperformed its benchmark index for the three- and ten-year periods and underperformed its benchmark index for the one- and five-year periods ended December 31, 2018. The Board also noted that the fund underperformed its peer group average for the one-year period and outperformed its peer group average for the three-, five- and ten-year periods ended December 31, 2018. The Board took into account management's discussion of the fund's performance, including the impact of market conditions on the fund's more recent performance and the favorable performance relative to the benchmark index for the three- and ten-year periods and to and peer group for the three-, five- and ten-year periods. The Board concluded that the fund's performance has generally been in line with or outperformed the historical performance of comparable funds and the fund's benchmark index over the longer term.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of fund data, including, among other data, the fund's contractual and net management fees (and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the fund in light of the nature, extent and quality of the management and advisory and subadvisory services provided by the Advisor to the Subadvisor. The Board considered the fund's ranking within a smaller group of peer funds chosen by the independent third-party provider, as well as the fund's ranking within a broader group of funds. In comparing the fund's contractual and net management fees to those of comparable funds, the Board noted that such fees include both advisory and administrative costs. The Board noted that net management fees and net total expenses for the fund are higher than the peer group median.
The Board took into account management's discussion of the fund's expenses. The Board also took into account management's discussion with respect to the overall management fee and the fees of the Subadvisor, including the
amount of the advisory fee retained by the Advisor after payment of the subadvisory fee, in each case in light of the services rendered for those amounts and the risks undertaken by the Advisor. The Board also noted that the Advisor pays the subadvisory fee, and that such fees are negotiated at arm's length with respect to the Subadvisor. In addition, the Board took into account that management had agreed to implement an overall fee waiver across the complex, including the fund, which is discussed further below. The Board also noted actions taken over the past several years to reduce the fund's operating expenses. The Board also noted that, in addition, the Advisor is currently waiving fees and/or reimbursing expenses with respect to the fund and that the fund has breakpoints in its contractual management fee schedule that reduces management fees as assets increase. The Board also noted that the fund's distributor, an affiliate of the Advisor, has agreed to waive a portion of its Rule 12b-1 fee for a share class of the fund. The Board reviewed information provided by the Advisor concerning the investment advisory fee charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the John Hancock Fund Complex) having similar investment mandates, if any. The Board considered any differences between the Advisor's and Subadvisor's services to the fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee paid with respect to the fund is reasonable in light of the nature, extent and quality of the services provided to the fund under the Advisory Agreement.
Profitability/Fall out benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor's relationship with the Trust, the Board:
(a) | reviewed financial information of the Advisor; |
(b) | reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to the fund; |
(c) | received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole and with respect to the fund; |
(d) | received information with respect to the Advisor's allocation methodologies used in preparing the profitability data and considered that the Advisor hired an independent third-party consultant to provide an analysis of the Advisor's allocation methodologies; |
(e) | considered that the John Hancock insurance companies that are affiliates of the Advisor, as shareholders of the Trust directly or through their separate accounts, receive certain tax credits or deductions relating to foreign taxes paid and dividends received by certain funds of the Trust and noted that these tax benefits, which are not available to participants in qualified retirement plans under applicable income tax law, are reflected in the profitability information reviewed by the Board; |
(f) | considered that the Advisor also provides administrative services to the fund on a cost basis pursuant to an administrative services agreement; |
(g) | noted that affiliates of the Advisor provide transfer agency services and distribution services to the fund, and that the fund's distributor also receives Rule 12b-1 payments to support distribution of the fund; |
(h) | noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the fund; |
(i) | noted that the subadvisory fee for the fund is paid by the Advisor and is negotiated at arm's length; |
(j) | considered the Advisor's ongoing costs and expenditures necessary to improve services, meet new regulatory and compliance requirements, and adapt to other challenges impacting the fund industry; and |
(k) | considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the fund and the risks that it assumes as Advisor, including entrepreneurial, operational, reputational, litigation and regulatory risk. |
Based upon its review, the Board concluded that the level of profitability, if any, of the Advisor and its affiliates from their relationship with the fund was reasonable and not excessive.
Economies of scale. In considering the extent to which economies of scale would be realized as the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders, the Board:
(a) | considered that the Advisor has contractually agreed to waive a portion of its management fee for certain funds of the John Hancock Fund Complex, including the fund (the participating portfolios) or otherwise reimburse the expenses of the participating portfolios (the reimbursement). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund; |
(b) | reviewed the fund's advisory fee structure and concluded that: (i) the fund's fee structure contains breakpoints at the subadvisory fee level and that such breakpoints are reflected as breakpoints in the advisory fees for the fund; and (ii) although economies of scale cannot be measured with precision, these arrangements permit shareholders of the fund to benefit from economies of scale if the fund grows. The Board also took into account management's discussion of the fund's advisory fee structure; and |
(c) | the Board also considered the effect of the fund's growth in size on its performance and fees. The Board also noted that if the fund's assets increase over time, the fund may realize other economies of scale. |
Approval of Subadvisory Agreement
In making its determination with respect to approval of the Subadvisory Agreement, the Board reviewed:
(1) | information relating to the Subadvisor's business, including current subadvisory services to the Trust (and other funds in the John Hancock Fund Complex); |
(2) | the historical and current performance of the fund and comparative performance information relating to an applicable benchmark index and comparable funds; |
(3) | the subadvisory fee for the fund, including any breakpoints, and to the extent available, comparable fee information prepared by an independent third party provider of fund data; and |
(4) | information relating to the nature and scope of any material relationships and their significance to the Trust's Advisor and Subadvisor. |
Nature, extent, and quality of services. With respect to the services provided by the Subadvisor, the Board received information provided to the Board by the Subadvisor, including the Subadvisor's Form ADV, as well as took into account information presented throughout the past year. The Board considered the Subadvisor's current level of staffing and its overall resources, as well as received information relating to the Subadvisor's compensation program. The Board reviewed the Subadvisor's history and investment experience, as well as information regarding the qualifications, background, and responsibilities of the Subadvisor's investment and compliance personnel who provide services to the fund. The Board also considered, among other things, the Subadvisor's compliance program and any disciplinary history. The Board also considered the Subadvisor's risk assessment and monitoring process. The
Board reviewed the Subadvisor's regulatory history, including whether it was involved in any regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular, periodic reviews of the Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust's CCO and his staff conduct regular, periodic compliance reviews with the Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of the Subadvisor and procedures reasonably designed to assure compliance with the federal securities laws. The Board also took into account the financial condition of the Subadvisor.
The Board considered the Subadvisor's investment process and philosophy. The Board took into account that the Subadvisor's responsibilities include the development and maintenance of an investment program for the fund that is consistent with the fund's investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services. The Board also received information with respect to the Subadvisor's brokerage policies and practices, including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the fund, the Board noted that the fees under the Subadvisory Agreement are paid by the Advisor and not the fund.
The Board also relied on the ability of the Advisor to negotiate the Subadvisory Agreement with the Subadvisor, which is not affiliated with the Advisor, and the fees thereunder at arm's length. As a result, the costs of the services to be provided and the profits to be realized by the Subadvisor from its relationship with the Trust were not a material factor in the Board's consideration of the Subadvisory Agreement.
The Board also received information regarding the nature and scope (including their significance to the Advisor and its affiliates and to the Subadvisor) of any material relationships with respect to the Subadvisor, which include arrangements in which the Subadvisor or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreement.
In addition, the Board considered other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor's relationship with the fund, such as the opportunity to provide advisory services to additional funds in the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays a subadvisory fee to the Subadvisor. As noted above, the Board also considered the fund's subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the fund as included in the report prepared by the independent third party provider of fund data, to the extent available. The Board noted that the limited size of the Lipper peer group was not sufficient for comparative purposes. The Board also took into account the subadvisory fees paid by the Advisor to the Subadvisor with respect to the fund and compared them to fees charged by the Subadvisor to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered the fund's performance as compared to the fund's peer group and the benchmark index and noted that the Board reviews information about the fund's performance
results at its regularly scheduled meetings. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor. The Board was mindful of the Advisor's focus on the Subadvisor's performance. The Board also noted the Subadvisor's long-term performance record for similar accounts, as applicable.
The Board's decision to approve the Subadvisory Agreement was based on a number of determinations, including the following:
(1) | the Subadvisor has extensive experience and demonstrated skills as a manager; |
(2) | the performance of the fund has generally been in line with or outperformed the historical performance of comparable funds and the fund's benchmark index over the longer term; |
(3) | the subadvisory fee is reasonable in relation to the level and quality of services being provided under the Subadvisory Agreement; and |
(4) | noted that the subadvisory fees are paid by the Advisor not the fund and that the subadvisory fee breakpoints are reflected as breakpoints in the advisory fees for the fund in order to permit shareholders to benefit from economies of scale if the fund grows. |
* * *
Based on the Board's evaluation of all factors that the Board deemed to be material, including those factors described above, the Board, including the Independent Trustees, concluded that renewal of the Advisory Agreement and the Subadvisory Agreement would be in the best interest of the fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreement for an additional one-year period.
Trustees Hassell H. McClellan,Chairperson Officers Andrew G. Arnott Francis V. Knox, Jr. Charles A. Rizzo Salvatore Schiavone Christopher (Kit) Sechler | Investment advisor John Hancock Investment Management LLC Subadvisor Boston Partners Global Investors, Inc. Portfolio Managers David T. Cohen, CFA Principal distributor John Hancock Investment Management Distributors LLC Custodian State Street Bank and Trust Company Transfer agent John Hancock Signature Services, Inc. Legal counsel K&L Gates LLP |
* Member of the Audit Committee
† Non-Independent Trustee
The fund's proxy voting policies and procedures, as well as the fund proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.
All of the fund's holdings as of the end of the third month of every fiscal quarter are filed with the SEC on Form N-PORT within 60 days of the end of the fiscal quarter. The fund's Form N-PORT filings are available on our website and the SEC's website, sec.gov.
We make this information on your fund, as well asmonthly portfolio holdings, and other fund details available on our website at jhinvestments.com or by calling 800-225-5291.
You can also contact us: | |||
800-225-5291 jhinvestments.com | Regular mail: John Hancock Signature Services, Inc. | Express mail: John Hancock Signature Services, Inc. |
John Hancock family of funds
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A fund's investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. To obtain a prospectus, contact your financial professional, call John Hancock Investment Management at 800-225-5291, or visit our website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
ASSET ALLOCATION Balanced Income Allocation Multi-Index Lifetime Portfolios Multi-Index Preservation Portfolios Multimanager Lifestyle Portfolios Multimanager Lifetime Portfolios Retirement Income 2040 EXCHANGE-TRADED FUNDS John Hancock Multifactor Consumer Discretionary ETF John Hancock Multifactor Consumer Staples ETF John Hancock Multifactor Developed International ETF John Hancock Multifactor Emerging Markets ETF John Hancock Multifactor Energy ETF John Hancock Multifactor Financials ETF John Hancock Multifactor Healthcare ETF John Hancock Multifactor Industrials ETF John Hancock Multifactor Large Cap ETF John Hancock Multifactor Materials ETF John Hancock Multifactor Media and John Hancock Multifactor Mid Cap ETF John Hancock Multifactor Small Cap ETF John Hancock Multifactor Technology ETF John Hancock Multifactor Utilities ETF | ENVIRONMENTAL, SOCIAL, AND ESG All Cap Core ESG Core Bond ESG International Equity ESG Large Cap Core CLOSED-END FUNDS Financial Opportunities Hedged Equity & Income Income Securities Trust Investors Trust Preferred Income Preferred Income II Preferred Income III Premium Dividend Tax-Advantaged Dividend Income Tax-Advantaged Global Shareholder Yield |
John Hancock Multifactor ETF shares are bought and sold at market price (not NAV), and are not individually redeemed
from the fund. Brokerage commissions will reduce returns.
John Hancock ETFs are distributed by Foreside Fund Services, LLC, and are subadvised by Dimensional Fund Advisors LP.
Foreside is not affiliated with John Hancock Investment Management Distributors LLC or Dimensional Fund Advisors LP.
Dimensional Fund Advisors LP receives compensation from John Hancock in connection with licensing rights to the
John Hancock Dimensional indexes. Dimensional Fund Advisors LP does not sponsor, endorse, or sell, and makes no
representation as to the advisability of investing in, John Hancock Multifactor ETFs.
John Hancock Investment Management
A trusted brand
John Hancock Investment Management is a premier asset manager
representing one of America's most trusted brands, with a heritage of
financial stewardship dating back to 1862. Helping our shareholders
pursue their financial goals is at the core of everything we do. It's why
we support the role of professional financial advice and operate with
the highest standards of conduct and integrity.
A better way to invest
We serve investors globally through a unique multimanager approach:
We search the world to find proven portfolio teams with specialized
expertise for every strategy we offer, then we apply robust investment
oversight to ensure they continue to meet our uncompromising
standards and serve the best interests of our shareholders.
Results for investors
Our unique approach to asset management enables us to provide
a diverse set of investments backed by some of the world's best
managers, along with strong risk-adjusted returns across asset classes.
John Hancock Investment Management Distributors LLC n Member FINRA, SIPC
200 Berkeley Street n Boston, MA 02116-5010 n 800-225-5291 n jhinvestments.com
This report is for the information of the shareholders of John Hancock Disciplined Value Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.
MF975090 | 340SA 9/19 11/19 |
John Hancock
Disciplined Value Mid Cap Fund
Semiannual report 9/30/19
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change, and you do not need to take any action. You may elect to receive shareholder reports and other communications electronically by calling John Hancock Investment Management at 800-225-5291 (Class A and Class C shares) or 888-972-8696 (Class I, Class R2, Class R4, Class R6, and Class ADV) or by contacting your financial intermediary.
You may elect to receive all reports in paper, free of charge, at any time. You can inform John Hancock Investment Management or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by following the instructions listed above. Your election to receive reports in paper will apply to all funds held with John Hancock Investment Management or your financial intermediary.
A message to shareholders
Dear shareholder,
It was a rather volatile time for stock markets in the United States during the six months ended September 30, 2019, with investor uncertainty surrounding trade with China, the impeachment inquiry against President Trump, and the broader health of the global economy leading to some dramatic swings in performance. Investors, who had generally shunned risk in the final months of 2018, regained their risk appetites in the first half of 2019. The rally in stocks continued through the end of July, when stocks again suffered a setback. Against this backdrop, the U.S. Federal Reserve pivoted from a normalizing stance to an easing stance, cutting rates for the first time in more than a decade in July and again in September.
While economic fundamentals in the United States appear reasonably solid, with a strong labor market and a confident consumer base, there are sure to be patches of market turbulence as the year goes on, particularly if the threat of a recession increases. As always, your best resource in unpredictable markets is your financial advisor, who can help position your portfolio so that it's sufficiently diversified to meet your long-term objectives and to withstand the inevitable bouts of market volatility along the way.
On behalf of everyone at John Hancock Investment Management, I'd like to take this opportunity to welcome new shareholders and thank existing shareholders for the continued trust you've placed in us.
Sincerely,
Andrew G. Arnott
President and CEO,
John Hancock Investment Management
Head of Wealth and Asset Management,
United States and Europe
This commentary reflects the CEO's views as of this report's period end and are subject to change at any time. Diversification does not guarantee investment returns and does not eliminate risk of loss. All investments entail risks, including the possible loss of principal. For more up-to-date information, you can visit our website at jhinvestments.com.
John Hancock
Disciplined Value Mid Cap Fund
INVESTMENT OBJECTIVE
The fund seeks long-term growth of capital with current income as a secondary objective.
AVERAGE ANNUAL TOTAL RETURNS AS OF 9/30/19 (%)
The Russell Midcap Value Index is an unmanaged index that measures the performance of those Russell Midcap Index companies with lower price-to-book ratios and lower forecasted growth values.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Figures from Morningstar, Inc. include reinvested distributions and do not take into account sales charges. Actual load-adjusted performance is lower.
1 | After the close of business on 7-9-10, holders of Investor shares of the former Robeco Boston Partners Mid Cap Value Fund (the predecessor fund) became owners of an equal number of full and fractional Class A shares of John Hancock Disciplined Value Mid Cap Fund, which were first offered on 7-12-10. Returns shown prior to Class A shares' commencement dates are those of the predecessor fund's Investor shares. |
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative. Performance of the other share classes will vary based on the difference in the fees and expenses of those classes. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current month-end performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling 800-225-5291. For further information on the fund's objectives, risks, and strategy, see the fund's prospectus.
SECTOR COMPOSITION AS OF 9/30/19 (%)
TOP 10 HOLDINGS AS OF 9/30/19 (%)
Alleghany Corp. | 2.2 |
Reinsurance Group of America, Inc. | 1.6 |
Discover Financial Services | 1.6 |
TE Connectivity, Ltd. | 1.5 |
Dover Corp. | 1.5 |
Huntington Bancshares, Inc. | 1.4 |
SunTrust Banks, Inc. | 1.4 |
Aon PLC | 1.4 |
TD Ameritrade Holding Corp. | 1.4 |
Boston Properties, Inc. | 1.4 |
TOTAL | 15.4 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
A note about risks
The fund may be subject to various risks as described in the fund's prospectus. For more information, please refer to the "Principal risks" section of the prospectus.
TOTAL RETURNS FOR THE PERIOD ENDED SEPTEMBER 30, 2019
Average annual total returns (%) with maximum sales charge | Cumulative total returns (%) with maximum sales charge | ||||||
1-year | 5-year | 10-year | 6-month | 5-year | 10-year | ||
Class A1 | -3.41 | 7.58 | 12.53 | 2.34 | 44.10 | 225.47 | |
Class C1 | 0.00 | 7.87 | 12.40 | 6.27 | 46.05 | 221.77 | |
Class I1,2 | 1.89 | 8.97 | 13.41 | 7.84 | 53.62 | 252.02 | |
Class R21,2 | 1.50 | 8.52 | 12.98 | 7.61 | 50.54 | 238.88 | |
Class R41,2 | 1.77 | 8.81 | 13.16 | 7.74 | 52.50 | 244.27 | |
Class R61,2 | 2.03 | 9.07 | 13.42 | 7.89 | 54.36 | 252.25 | |
Class ADV1,2 | 1.63 | 8.66 | 13.06 | 7.67 | 51.50 | 241.37 | |
Index† | 1.60 | 7.55 | 12.29 | 4.45 | 43.92 | 218.77 |
Performance figures assume all distributions are reinvested. Figures reflect maximum sales charges on Class A shares of 5% and the applicable contingent deferred sales charge (CDSC) on Class C shares. Class C shares sold within one year of purchase are subject to a 1% CDSC. Sales charges are not applicable to Class I, Class R2, Class R4, Class R6, and Class ADV shares.
The expense ratios of the fund, both net (including any fee waivers and/or expense limitations) and gross (excluding any fee waivers and/or expense limitations), are set forth according to the most recent publicly available prospectuses for the fund and may differ from those disclosed in the Financial highlights tables in this report. Net expenses reflect contractual expense limitations in effect until July 31, 2020 and are subject to change. Had the contractual fee waivers and expense limitations not been in place, gross expenses would apply. The expense ratios are as follows:
Class A | Class C | Class I | Class R2 | Class R4 | Class R6 | Class ADV | |
Gross (%) | 1.12 | 1.87 | 0.87 | 1.27 | 1.12 | 0.77 | 1.12 |
Net (%) | 1.11 | 1.86 | 0.86 | 1.26 | 1.01 | 0.76 | 1.11 |
Please refer to the most recent prospectus and annual or semiannual report for more information on expenses and any expense limitation arrangements for each class.
The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility and other factors, the fund's current performance may be higher or lower than the performance shown. For current to the most recent month-end performance data, please call 800-225-5291 or visit the fund's website at jhinvestments.com.
The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The fund's performance results reflect any applicable fee waivers or expense reductions, without which the expenses would increase and results would have been less favorable.
† | Index is the Russell Midcap Value Index. |
See the following page for footnotes.
This chart and table show what happened to a hypothetical $10,000 investment in John Hancock Disciplined Value Mid Cap Fund for the share classes and periods indicated, assuming all distributions were reinvested. For comparison, we've shown the same investment in the Russell Midcap Value Index.
Start date | With maximum sales charge ($) | Without sales charge ($) | Index ($) | |
Class C1,3 | 9-30-09 | 32,177 | 32,177 | 31,877 |
Class I1,2 | 9-30-09 | 35,202 | 35,202 | 31,877 |
Class R21,2 | 9-30-09 | 33,888 | 33,888 | 31,877 |
Class R41,2 | 9-30-09 | 34,427 | 34,427 | 31,877 |
Class R61,2 | 9-30-09 | 35,225 | 35,225 | 31,877 |
Class ADV1,2 | 9-30-09 | 34,137 | 34,137 | 31,877 |
The Russell Midcap Value Index is an unmanaged index that measures the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Footnotes related to performance pages
1 | Class A, Class C, Class R2, Class R4, and Class R6 shares were first offered on 7-12-10, 8-15-11, 3-1-12, 7-2-13, and 9-1-11, respectively; Class I and Class ADV shares were first offered on 7-12-10. Investor shares and Institutional shares of Robeco Boston Partners Mid Cap Value Fund (the predecessor fund) were first offered on 6-2-97. Returns shown prior to Class A and Class ADV shares' commencement dates are those of the predecessor fund's Investor shares. Returns shown prior to Class I shares' commencement date are those of the predecessor fund's Institutional shares. Returns shown prior to Class C, Class R2, Class R4, and Class R6 shares' commencement dates are those of the predecessor fund's Investor shares (prior to 7-12-10) and the fund's Class A shares (from 7-12-10), that have not been adjusted for class-specific expenses; otherwise, returns would vary. |
2 | For certain types of investors, as described in the fund's prospectuses. |
3 | The contingent deferred sales charge is not applicable. |
Your expenses |
6 | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | SEMIANNUAL REPORT |
Account value on 4-1-2019 | Ending value on 9-30-2019 | Expenses paid during period ended 9-30-20191 | Annualized expense ratio | ||
Class A | Actual expenses/actual returns | $1,000.00 | $1,077.00 | $5.76 | 1.11% |
Hypothetical example | 1,000.00 | 1,019.50 | 5.60 | 1.11% | |
Class C | Actual expenses/actual returns | 1,000.00 | 1,072.70 | 9.64 | 1.86% |
Hypothetical example | 1,000.00 | 1,015.70 | 9.37 | 1.86% | |
Class I | Actual expenses/actual returns | 1,000.00 | 1,078.40 | 4.47 | 0.86% |
Hypothetical example | 1,000.00 | 1,020.70 | 4.34 | 0.86% | |
Class R2 | Actual expenses/actual returns | 1,000.00 | 1,076.10 | 6.44 | 1.24% |
Hypothetical example | 1,000.00 | 1,018.80 | 6.26 | 1.24% | |
Class R4 | Actual expenses/actual returns | 1,000.00 | 1,077.40 | 5.19 | 1.00% |
Hypothetical example | 1,000.00 | 1,020.00 | 5.05 | 1.00% | |
Class R6 | Actual expenses/actual returns | 1,000.00 | 1,078.90 | 3.95 | 0.76% |
Hypothetical example | 1,000.00 | 1,021.20 | 3.84 | 0.76% | |
Class ADV | Actual expenses/actual returns | 1,000.00 | 1,076.70 | 5.76 | 1.11% |
Hypothetical example | 1,000.00 | 1,019.50 | 5.60 | 1.11% |
1 | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). |
SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 7 |
Fund’s investments |
Shares | Value | ||||
Common stocks 97.1% | $12,948,067,210 | ||||
(Cost $9,967,673,451) | |||||
Communication services 3.3% | 443,883,289 | ||||
Entertainment 1.7% | |||||
Activision Blizzard, Inc. | 1,768,340 | 93,580,553 | |||
Electronic Arts, Inc. (A) | 371,019 | 36,293,079 | |||
NetEase, Inc., ADR | 218,738 | 58,223,681 | |||
Take-Two Interactive Software, Inc. (A) | 327,804 | 41,086,953 | |||
Media 1.6% | |||||
Altice USA, Inc., Class A (A) | 2,579,303 | 73,974,410 | |||
Fox Corp., Class A | 1,609,763 | 50,763,876 | |||
Liberty Global PLC, Series C (A) | 2,069,453 | 49,232,287 | |||
Omnicom Group, Inc. (B) | 520,159 | 40,728,450 | |||
Consumer discretionary 7.0% | 930,283,470 | ||||
Auto components 0.6% | |||||
Gentex Corp. | 1,467,764 | 40,414,882 | |||
Lear Corp. | 378,523 | 44,627,862 | |||
Hotels, restaurants and leisure 1.7% | |||||
International Game Technology PLC (B) | 2,855,970 | 40,583,334 | |||
Las Vegas Sands Corp. | 1,153,543 | 66,628,644 | |||
Wyndham Destinations, Inc. | 1,488,215 | 68,487,654 | |||
Wyndham Hotels & Resorts, Inc. | 1,015,997 | 52,567,685 | |||
Household durables 1.1% | |||||
Lennar Corp., A Shares | 1,266,138 | 70,713,807 | |||
Whirlpool Corp. | 453,164 | 71,763,051 | |||
Internet and direct marketing retail 2.2% | |||||
eBay, Inc. | 3,248,928 | 126,643,213 | |||
Expedia Group, Inc. | 1,213,241 | 163,071,723 | |||
Multiline retail 0.4% | |||||
Dollar Tree, Inc. (A)(B) | 405,635 | 46,307,292 | |||
Specialty retail 1.0% | |||||
AutoZone, Inc. (A) | 65,115 | 70,625,031 | |||
Ross Stores, Inc. | 617,654 | 67,849,292 | |||
Consumer staples 1.6% | 219,673,757 | ||||
Beverages 0.5% | |||||
Coca-Cola European Partners PLC (New York Stock Exchange) | 1,212,536 | 67,235,121 | |||
Food products 1.1% | |||||
Nomad Foods, Ltd. (A) | 4,334,096 | 88,848,968 | |||
Tyson Foods, Inc., Class A | 738,213 | 63,589,668 |
8 | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Energy 3.9% | $526,837,024 | ||||
Energy equipment and services 0.3% | |||||
Apergy Corp. (A) | 1,741,404 | 47,104,978 | |||
Oil, gas and consumable fuels 3.6% | |||||
Cimarex Energy Company | 907,382 | 43,499,893 | |||
Diamondback Energy, Inc. | 645,765 | 58,060,731 | |||
Marathon Oil Corp. | 2,521,699 | 30,941,247 | |||
Marathon Petroleum Corp. | 1,581,554 | 96,079,406 | |||
Noble Energy, Inc. (B) | 4,269,343 | 95,889,444 | |||
Pioneer Natural Resources Company | 291,595 | 36,673,903 | |||
Valero Energy Corp. | 1,391,218 | 118,587,422 | |||
Financials 24.1% | 3,208,079,161 | ||||
Banks 7.2% | |||||
East West Bancorp, Inc. | 3,147,406 | 139,398,612 | |||
Fifth Third Bancorp | 5,702,848 | 156,143,978 | |||
Huntington Bancshares, Inc. | 13,514,467 | 192,851,444 | |||
KeyCorp | 8,548,022 | 152,496,712 | |||
Regions Financial Corp. | 8,043,841 | 127,253,565 | |||
SunTrust Banks, Inc. | 2,727,254 | 187,635,075 | |||
Capital markets 4.5% | |||||
Ameriprise Financial, Inc. | 814,492 | 119,811,773 | |||
E*TRADE Financial Corp. | 3,175,157 | 138,722,609 | |||
Moody's Corp. | 342,839 | 70,223,712 | |||
Raymond James Financial, Inc. | 561,983 | 46,341,118 | |||
State Street Corp. | 718,984 | 42,556,663 | |||
TD Ameritrade Holding Corp. | 3,983,138 | 186,012,545 | |||
Consumer finance 2.3% | |||||
Discover Financial Services | 2,619,876 | 212,445,745 | |||
SLM Corp. | 4,315,919 | 38,087,985 | |||
Synchrony Financial | 1,606,906 | 54,779,426 | |||
Insurance 10.1% | |||||
Alleghany Corp. (A) | 363,661 | 290,114,196 | |||
Aon PLC | 964,815 | 186,759,240 | |||
Everest Re Group, Ltd. | 211,721 | 56,336,841 | |||
Globe Life, Inc. | 691,856 | 66,252,131 | |||
Loews Corp. | 1,580,965 | 81,388,078 | |||
Marsh & McLennan Companies, Inc. | 794,130 | 79,452,707 | |||
Reinsurance Group of America, Inc. | 1,333,400 | 213,183,992 | |||
The Allstate Corp. | 1,528,798 | 166,149,767 | |||
The Travelers Companies, Inc. | 686,769 | 102,115,683 | |||
W.R. Berkley Corp. | 1,406,141 | 101,565,564 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 9 |
Shares | Value | ||||
Health care 8.4% | $1,122,105,141 | ||||
Health care equipment and supplies 1.3% | |||||
Boston Scientific Corp. (A) | 1,284,319 | 52,258,940 | |||
Zimmer Biomet Holdings, Inc. | 922,178 | 126,587,374 | |||
Health care providers and services 4.5% | |||||
AmerisourceBergen Corp. | 1,133,112 | 93,289,111 | |||
Centene Corp. (A)(B) | 1,309,420 | 56,645,509 | |||
DaVita, Inc. (A) | 543,109 | 30,995,231 | |||
Humana, Inc. | 366,378 | 93,671,863 | |||
Laboratory Corp. of America Holdings (A) | 636,769 | 106,977,192 | |||
McKesson Corp. | 550,719 | 75,261,259 | |||
Molina Healthcare, Inc. (A) | 307,019 | 33,686,125 | |||
Universal Health Services, Inc., Class B | 723,589 | 107,633,864 | |||
Health care technology 0.3% | |||||
Change Healthcare, Inc. (A)(B) | 3,705,167 | 44,758,417 | |||
Life sciences tools and services 1.8% | |||||
Avantor, Inc. (A) | 2,759,337 | 40,562,254 | |||
ICON PLC (A) | 652,205 | 96,095,885 | |||
IQVIA Holdings, Inc. (A) | 661,842 | 98,865,958 | |||
Pharmaceuticals 0.5% | |||||
Jazz Pharmaceuticals PLC (A) | 505,823 | 64,816,159 | |||
Industrials 17.7% | 2,359,824,977 | ||||
Aerospace and defense 3.5% | |||||
Curtiss-Wright Corp. | 555,697 | 71,890,521 | |||
Huntington Ingalls Industries, Inc. | 375,660 | 79,561,031 | |||
L3Harris Technologies, Inc. | 864,893 | 180,451,276 | |||
Spirit AeroSystems Holdings, Inc., Class A | 1,010,162 | 83,075,723 | |||
Textron, Inc. | 978,238 | 47,894,532 | |||
Air freight and logistics 0.4% | |||||
C.H. Robinson Worldwide, Inc. (B) | 662,824 | 56,194,219 | |||
Airlines 1.1% | |||||
Southwest Airlines Company | 2,777,157 | 149,994,250 | |||
Building products 1.1% | |||||
Masco Corp. | 1,277,397 | 53,241,907 | |||
Owens Corning | 1,389,514 | 87,817,285 | |||
Commercial services and supplies 0.7% | |||||
IAA, Inc. (A) | 1,687,646 | 70,425,468 | |||
KAR Auction Services, Inc. (B) | 1,090,902 | 26,781,644 | |||
Electrical equipment 2.8% | |||||
AMETEK, Inc. | 1,915,671 | 175,896,911 | |||
Eaton Corp. PLC | 1,416,248 | 117,761,021 | |||
EnerSys | 507,714 | 33,478,661 |
10 | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Industrials (continued) | |||||
Electrical equipment (continued) | |||||
Hubbell, Inc. | 348,052 | $45,734,033 | |||
Machinery 4.4% | |||||
Dover Corp. | 1,966,270 | 195,761,841 | |||
Ingersoll-Rand PLC | 386,515 | 47,622,513 | |||
ITT, Inc. | 1,459,954 | 89,334,585 | |||
PACCAR, Inc. (B) | 796,066 | 55,732,581 | |||
Parker-Hannifin Corp. | 674,175 | 121,762,747 | |||
WABCO Holdings, Inc. (A) | 604,790 | 80,890,663 | |||
Professional services 1.2% | |||||
ManpowerGroup, Inc. | �� | 820,901 | 69,152,700 | ||
Robert Half International, Inc. | 1,604,367 | 89,299,067 | |||
Road and rail 1.2% | |||||
Kansas City Southern | 1,170,530 | 155,692,195 | |||
Trading companies and distributors 1.3% | |||||
Air Lease Corp. | 1,014,369 | 42,420,912 | |||
HD Supply Holdings, Inc. (A) | 2,450,860 | 96,012,441 | |||
WESCO International, Inc. (A) | 752,444 | 35,944,250 | |||
Information technology 10.5% | 1,403,571,763 | ||||
Electronic equipment, instruments and components 2.3% | |||||
Arrow Electronics, Inc. (A) | 719,660 | 53,672,243 | |||
Flex, Ltd. (A) | 4,409,415 | 46,144,528 | |||
TE Connectivity, Ltd. | 2,185,302 | 203,626,440 | |||
IT services 3.9% | |||||
Alliance Data Systems Corp. | 409,186 | 52,429,002 | |||
Amdocs, Ltd. | 890,566 | 58,875,318 | |||
Fidelity National Information Services, Inc. | 1,312,126 | 174,197,848 | |||
Global Payments, Inc. | 434,382 | 69,066,738 | |||
Leidos Holdings, Inc. | 1,196,790 | 102,780,325 | |||
Science Applications International Corp. (B) | 793,958 | 69,352,231 | |||
Semiconductors and semiconductor equipment 2.7% | |||||
KLA Corp. | 765,257 | 122,020,229 | |||
Marvell Technology Group, Ltd. | 1,867,567 | 46,633,148 | |||
NXP Semiconductors NV | 939,721 | 102,542,356 | |||
Qorvo, Inc. (A) | 1,199,810 | 88,953,913 | |||
Software 0.6% | |||||
CDK Global, Inc. | 1,587,969 | 76,365,429 | |||
Technology hardware, storage and peripherals 1.0% | |||||
Hewlett Packard Enterprise Company | 3,644,952 | 55,293,922 | |||
Western Digital Corp. | 617,401 | 36,821,796 | |||
Xerox Holdings Corp. | 1,497,703 | 44,796,297 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 11 |
Shares | Value | ||||
Materials 4.9% | $647,676,102 | ||||
Chemicals 2.6% | |||||
Corteva, Inc. | 2,791,710 | 78,167,880 | |||
FMC Corp. | 1,619,036 | 141,957,076 | |||
Nutrien, Ltd. | 1,784,880 | 89,029,814 | |||
The Mosaic Company | 2,066,820 | 42,369,810 | |||
Construction materials 0.3% | |||||
Eagle Materials, Inc. | 408,175 | 36,739,832 | |||
Containers and packaging 1.6% | |||||
Avery Dennison Corp. | 850,304 | 96,569,025 | |||
Crown Holdings, Inc. (A) | 569,840 | 37,643,630 | |||
Graphic Packaging Holding Company | 4,797,915 | 70,769,246 | |||
Metals and mining 0.4% | |||||
Steel Dynamics, Inc. | 1,826,503 | 54,429,789 | |||
Real estate 8.0% | 1,064,627,103 | ||||
Equity real estate investment trusts 8.0% | |||||
American Homes 4 Rent, Class A | 2,838,891 | 73,498,888 | |||
Boston Properties, Inc. | 1,423,167 | 184,527,833 | |||
CubeSmart | 1,515,842 | 52,902,886 | |||
Douglas Emmett, Inc. | 2,583,107 | 110,634,473 | |||
Duke Realty Corp. | 2,486,902 | 84,480,061 | |||
Equity Residential | 2,077,881 | 179,238,015 | |||
Kilroy Realty Corp. | 883,915 | 68,848,139 | |||
Prologis, Inc. | 966,274 | 82,345,870 | |||
Regency Centers Corp. | 1,900,063 | 132,035,378 | |||
Retail Properties of America, Inc., Class A | 3,443,669 | 42,426,002 | |||
SL Green Realty Corp. | 656,753 | 53,689,558 | |||
Utilities 7.7% | 1,021,505,423 | ||||
Electric utilities 6.0% | |||||
Alliant Energy Corp. | 813,337 | 43,863,264 | |||
American Electric Power Company, Inc. | 739,234 | 69,258,833 | |||
Edison International | 1,440,175 | 108,617,999 | |||
Entergy Corp. | 1,429,707 | 167,790,414 | |||
Evergy, Inc. | 1,295,017 | 86,196,332 | |||
FirstEnergy Corp. | 1,841,821 | 88,831,027 | |||
Pinnacle West Capital Corp. | 439,553 | 42,667,410 | |||
Xcel Energy, Inc. | 2,825,534 | 183,348,901 | |||
Independent power and renewable electricity producers 0.4% | |||||
Vistra Energy Corp. | 2,114,156 | 56,511,390 | |||
Multi-utilities 1.3% | |||||
DTE Energy Company | 1,311,822 | 174,419,853 |
12 | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Yield (%) | Shares | Value | |||
Securities lending collateral 0.7% | $95,958,773 | ||||
(Cost $95,959,184) | |||||
John Hancock Collateral Trust (C) | 2.1169(D) | 9,589,452 | 95,958,773 | ||
Short-term investments 2.8% | $378,354,699 | ||||
(Cost $378,354,699) | |||||
Money market funds 2.8% | 378,354,699 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 1.8787(D) | 378,354,699 | 378,354,699 |
Total investments (Cost $10,441,987,334) 100.6% | $13,422,380,682 | ||||
Other assets and liabilities, net (0.6%) | (85,691,843) | ||||
Total net assets 100.0% | $13,336,688,839 |
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund. | |
Security Abbreviations and Legend | |
ADR | American Depositary Receipt |
(A) | Non-income producing security. |
(B) | All or a portion of this security is on loan as of 9-30-19. |
(C) | Investment is an affiliate of the fund, the advisor and/or subadvisor. This security represents the investment of cash collateral received for securities lending. |
(D) | The rate shown is the annualized seven-day yield as of 9-30-19. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 13 |
Financial statements |
Assets | |
Unaffiliated investments, at value (Cost $10,346,028,150) including $92,597,176 of securities loaned | $13,326,421,909 |
Affiliated investments, at value (Cost $95,959,184) | 95,958,773 |
Total investments, at value (Cost $10,441,987,334) | 13,422,380,682 |
Dividends and interest receivable | 21,480,020 |
Receivable for fund shares sold | 22,007,133 |
Receivable for investments sold | 11,159,368 |
Receivable for securities lending income | 51,638 |
Other assets | 450,334 |
Total assets | 13,477,529,175 |
Liabilities | |
Payable for investments purchased | 29,686,559 |
Payable for fund shares repurchased | 12,246,441 |
Payable upon return of securities loaned | 95,964,808 |
Payable to affiliates | |
Accounting and legal services fees | 1,098,175 |
Transfer agent fees | 988,293 |
Distribution and service fees | 29,471 |
Other liabilities and accrued expenses | 826,589 |
Total liabilities | 140,840,336 |
Net assets | $13,336,688,839 |
Net assets consist of | |
Paid-in capital | $10,130,356,429 |
Total distributable earnings (loss) | 3,206,332,410 |
Net assets | $13,336,688,839 |
Net asset value per share | |
Based on net asset value and shares outstanding - the fund has an unlimited number of shares authorized with no par value | |
Class A ($1,108,582,415 ÷ 53,958,741 shares)1 | $20.55 |
Class C ($169,415,200 ÷ 8,254,763 shares)1 | $20.52 |
Class I ($8,640,061,371 ÷ 402,406,619 shares) | $21.47 |
Class R2 ($125,590,918 ÷ 5,879,975 shares) | $21.36 |
Class R4 ($74,293,909 ÷ 3,465,321 shares) | $21.44 |
Class R6 ($3,218,000,788 ÷ 149,877,849 shares) | $21.47 |
Class ADV ($744,238 ÷ 36,316 shares) | $20.49 |
Maximum offering price per share | |
Class A (net asset value per share ÷ 95%)2 | $21.63 |
1 | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
2 | On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced. |
14 | JOHN HANCOCK Disciplined Value Mid Cap Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Investment income | |
Dividends | $115,615,775 |
Interest | 3,153,299 |
Securities lending | 137,393 |
Less foreign taxes withheld | (319,643) |
Total investment income | 118,586,824 |
Expenses | |
Investment management fees | 45,513,937 |
Distribution and service fees | 2,791,487 |
Accounting and legal services fees | 1,309,487 |
Transfer agent fees | 5,881,770 |
Trustees' fees | 125,995 |
Custodian fees | 540,955 |
State registration fees | 109,559 |
Printing and postage | 336,560 |
Professional fees | 138,117 |
Other | 164,081 |
Total expenses | 56,911,948 |
Less expense reductions | (511,308) |
Net expenses | 56,400,640 |
Net investment income | 62,186,184 |
Realized and unrealized gain (loss) | |
Net realized gain (loss) on | |
Unaffiliated investments and foreign currency transactions | 249,477,211 |
Affiliated investments | (1,478) |
249,475,733 | |
Change in net unrealized appreciation (depreciation) of | |
Unaffiliated investments | 649,850,022 |
Affiliated investments | (472) |
649,849,550 | |
Net realized and unrealized gain | 899,325,283 |
Increase in net assets from operations | $961,511,467 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 15 |
Six months ended 9-30-19 (unaudited) | Year ended 3-31-19 | |
Increase (decrease) in net assets | ||
From operations | ||
Net investment income | $62,186,184 | $109,792,218 |
Net realized gain | 249,475,733 | 475,252,358 |
Change in net unrealized appreciation (depreciation) | 649,849,550 | (1,083,555,809) |
Increase (decrease) in net assets resulting from operations | 961,511,467 | (498,511,233) |
Distributions to shareholders | ||
From earnings | ||
Class A | — | (144,723,293) |
Class C | — | (22,813,889) |
Class I | — | (917,596,549) |
Class R2 | — | (15,192,670) |
Class R4 | — | (9,323,306) |
Class R6 | — | (316,546,525) |
Class ADV | — | (186,668) |
Total distributions | — | (1,426,382,900) |
From fund share transactions | 25,554,471 | (384,273,493) |
Total increase (decrease) | 987,065,938 | (2,309,167,626) |
Net assets | ||
Beginning of period | 12,349,622,901 | 14,658,790,527 |
End of period | $13,336,688,839 | $12,349,622,901 |
16 | JOHN HANCOCK Disciplined Value Mid Cap Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial highlights |
CLASS A SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.08 | $22.35 | $21.61 | $18.49 | $20.19 | $18.23 |
Net investment income2 | 0.07 | 0.12 | 0.07 | 0.10 | 0.13 | 0.05 |
Net realized and unrealized gain (loss) on investments | 1.40 | (1.01) | 2.11 | 3.57 | (0.63) | 2.42 |
Total from investment operations | 1.47 | (0.89) | 2.18 | 3.67 | (0.50) | 2.47 |
Less distributions | ||||||
From net investment income | — | (0.13) | (0.06) | (0.14) | (0.07) | (0.06) |
From net realized gain | — | (2.25) | (1.38) | (0.41) | (1.13) | (0.45) |
Total distributions | — | (2.38) | (1.44) | (0.55) | (1.20) | (0.51) |
Net asset value, end of period | $20.55 | $19.08 | $22.35 | $21.61 | $18.49 | $20.19 |
Total return (%)3,4 | 7.705 | (2.98) | 10.15 | 19.96 | (2.59) | 13.78 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $1,109 | $1,184 | $1,547 | $2,088 | $1,971 | $2,148 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.126 | 1.11 | 1.11 | 1.12 | 1.13 | 1.13 |
Expenses including reductions | 1.116 | 1.10 | 1.10 | 1.12 | 1.12 | 1.13 |
Net investment income | 0.726 | 0.58 | 0.30 | 0.48 | 0.70 | 0.28 |
Portfolio turnover (%) | 27 | 53 | 53 | 50 | 47 | 35 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Does not reflect the effect of sales charges, if any. |
5 | Not annualized. |
6 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 17 |
CLASS C SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.13 | $22.42 | $21.77 | $18.65 | $20.43 | $18.53 |
Net investment loss2 | —3 | (0.04) | (0.10) | (0.05) | (0.01) | (0.08) |
Net realized and unrealized gain (loss) on investments | 1.39 | (1.00) | 2.13 | 3.58 | (0.64) | 2.43 |
Total from investment operations | 1.39 | (1.04) | 2.03 | 3.53 | (0.65) | 2.35 |
Less distributions | ||||||
From net realized gain | — | (2.25) | (1.38) | (0.41) | (1.13) | (0.45) |
Net asset value, end of period | $20.52 | $19.13 | $22.42 | $21.77 | $18.65 | $20.43 |
Total return (%)4,5 | 7.276 | (3.72) | 9.35 | 18.99 | (3.27) | 12.90 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $169 | $182 | $278 | $319 | $329 | $366 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.877 | 1.86 | 1.86 | 1.87 | 1.88 | 1.89 |
Expenses including reductions | 1.867 | 1.85 | 1.85 | 1.87 | 1.87 | 1.88 |
Net investment loss | (0.03)7 | (0.19) | (0.43) | (0.27) | (0.06) | (0.42) |
Portfolio turnover (%) | 27 | 53 | 53 | 50 | 47 | 35 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Less than $0.005 per share. |
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
5 | Does not reflect the effect of sales charges, if any. |
6 | Not annualized. |
7 | Annualized. |
18 | JOHN HANCOCK Disciplined Value Mid Cap Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS I SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.91 | $23.22 | $22.39 | $19.14 | $20.86 | $18.81 |
Net investment income2 | 0.10 | 0.18 | 0.14 | 0.16 | 0.20 | 0.12 |
Net realized and unrealized gain (loss) on investments | 1.46 | (1.06) | 2.19 | 3.69 | (0.67) | 2.49 |
Total from investment operations | 1.56 | (0.88) | 2.33 | 3.85 | (0.47) | 2.61 |
Less distributions | ||||||
From net investment income | — | (0.18) | (0.12) | (0.19) | (0.12) | (0.11) |
From net realized gain | — | (2.25) | (1.38) | (0.41) | (1.13) | (0.45) |
Total distributions | — | (2.43) | (1.50) | (0.60) | (1.25) | (0.56) |
Net asset value, end of period | $21.47 | $19.91 | $23.22 | $22.39 | $19.14 | $20.86 |
Total return (%)3 | 7.844 | (2.79) | 10.46 | 20.25 | (2.35) | 14.13 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $8,640 | $7,784 | $9,799 | $9,512 | $7,802 | $7,116 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.875 | 0.88 | 0.86 | 0.86 | 0.87 | 0.87 |
Expenses including reductions | 0.865 | 0.87 | 0.85 | 0.86 | 0.86 | 0.86 |
Net investment income | 0.995 | 0.82 | 0.58 | 0.75 | 0.99 | 0.63 |
Portfolio turnover (%) | 27 | 53 | 53 | 50 | 47 | 35 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 19 |
CLASS R2 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.85 | $23.14 | $22.32 | $19.09 | $20.81 | $18.77 |
Net investment income2 | 0.06 | 0.09 | 0.04 | 0.07 | 0.11 | 0.04 |
Net realized and unrealized gain (loss) on investments | 1.45 | (1.04) | 2.19 | 3.68 | (0.66) | 2.48 |
Total from investment operations | 1.51 | (0.95) | 2.23 | 3.75 | (0.55) | 2.52 |
Less distributions | ||||||
From net investment income | — | (0.09) | (0.03) | (0.11) | (0.04) | (0.03) |
From net realized gain | — | (2.25) | (1.38) | (0.41) | (1.13) | (0.45) |
Total distributions | — | (2.34) | (1.41) | (0.52) | (1.17) | (0.48) |
Net asset value, end of period | $21.36 | $19.85 | $23.14 | $22.32 | $19.09 | $20.81 |
Total return (%)3 | 7.614 | (3.14) | 10.03 | 19.76 | (2.74) | 13.66 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $126 | $131 | $188 | $216 | $234 | $250 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.255 | 1.27 | 1.26 | 1.27 | 1.27 | 1.29 |
Expenses including reductions | 1.245 | 1.26 | 1.25 | 1.26 | 1.27 | 1.28 |
Net investment income | 0.595 | 0.41 | 0.17 | 0.35 | 0.56 | 0.19 |
Portfolio turnover (%) | 27 | 53 | 53 | 50 | 47 | 35 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
20 | JOHN HANCOCK Disciplined Value Mid Cap Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R4 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.90 | $23.20 | $22.38 | $19.13 | $20.85 | $18.81 |
Net investment income2 | 0.09 | 0.15 | 0.09 | 0.12 | 0.16 | 0.10 |
Net realized and unrealized gain (loss) on investments | 1.45 | (1.05) | 2.20 | 3.70 | (0.66) | 2.47 |
Total from investment operations | 1.54 | (0.90) | 2.29 | 3.82 | (0.50) | 2.57 |
Less distributions | ||||||
From net investment income | — | (0.15) | (0.09) | (0.16) | (0.09) | (0.08) |
From net realized gain | — | (2.25) | (1.38) | (0.41) | (1.13) | (0.45) |
Total distributions | — | (2.40) | (1.47) | (0.57) | (1.22) | (0.53) |
Net asset value, end of period | $21.44 | $19.90 | $23.20 | $22.38 | $19.13 | $20.85 |
Total return (%)3 | 7.744 | (2.90) | 10.26 | 20.09 | (2.50) | 13.93 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $74 | $74 | $97 | $95 | $104 | $118 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.115 | 1.12 | 1.12 | 1.11 | 1.12 | 1.15 |
Expenses including reductions | 1.005 | 1.01 | 1.01 | 1.00 | 1.02 | 1.04 |
Net investment income | 0.845 | 0.68 | 0.42 | 0.60 | 0.81 | 0.49 |
Portfolio turnover (%) | 27 | 53 | 53 | 50 | 47 | 35 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 21 |
CLASS R6 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.90 | $23.21 | $22.38 | $19.13 | $20.85 | $18.81 |
Net investment income2 | 0.11 | 0.21 | 0.17 | 0.18 | 0.22 | 0.14 |
Net realized and unrealized gain (loss) on investments | 1.46 | (1.07) | 2.18 | 3.69 | (0.67) | 2.48 |
Total from investment operations | 1.57 | (0.86) | 2.35 | 3.87 | (0.45) | 2.62 |
Less distributions | ||||||
From net investment income | — | (0.20) | (0.14) | (0.21) | (0.14) | (0.13) |
From net realized gain | — | (2.25) | (1.38) | (0.41) | (1.13) | (0.45) |
Total distributions | — | (2.45) | (1.52) | (0.62) | (1.27) | (0.58) |
Net asset value, end of period | $21.47 | $19.90 | $23.21 | $22.38 | $19.13 | $20.85 |
Total return (%)3 | 7.894 | (2.66) | 10.56 | 20.35 | (2.25) | 14.21 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $3,218 | $2,994 | $2,748 | $1,774 | $1,053 | $807 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.775 | 0.77 | 0.77 | 0.77 | 0.77 | 0.78 |
Expenses including reductions | 0.765 | 0.76 | 0.76 | 0.76 | 0.76 | 0.77 |
Net investment income | 1.095 | 0.96 | 0.71 | 0.86 | 1.13 | 0.73 |
Portfolio turnover (%) | 27 | 53 | 53 | 50 | 47 | 35 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
22 | JOHN HANCOCK Disciplined Value Mid Cap Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS ADV SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $19.03 | $22.30 | $21.56 | $18.46 | $20.15 | $18.20 |
Net investment income2 | 0.08 | 0.11 | 0.07 | 0.11 | 0.12 | 0.04 |
Net realized and unrealized gain (loss) on investments | 1.38 | (1.00) | 2.11 | 3.54 | (0.63) | 2.40 |
Total from investment operations | 1.46 | (0.89) | 2.18 | 3.65 | (0.51) | 2.44 |
Less distributions | ||||||
From net investment income | — | (0.13) | (0.06) | (0.14) | (0.05) | (0.04) |
From net realized gain | — | (2.25) | (1.38) | (0.41) | (1.13) | (0.45) |
Total distributions | — | (2.38) | (1.44) | (0.55) | (1.18) | (0.49) |
Net asset value, end of period | $20.49 | $19.03 | $22.30 | $21.56 | $18.46 | $20.15 |
Total return (%)3 | 7.674 | (2.98) | 10.17 | 19.88 | (2.59) | 13.67 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $1 | $1 | $2 | $2 | $1 | $1 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.125 | 1.11 | 1.11 | 1.13 | 1.42 | 3.12 |
Expenses including reductions | 1.115 | 1.10 | 1.10 | 1.12 | 1.16 | 1.25 |
Net investment income | 0.765 | 0.49 | 0.32 | 0.55 | 0.63 | 0.21 |
Portfolio turnover (%) | 27 | 53 | 53 | 50 | 47 | 35 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 23 |
Notes to financial statements (unaudited) |
24 | JOHN HANCOCK Disciplined Value Mid Cap Fund | SEMIANNUAL REPORT |
SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 25 |
26 | JOHN HANCOCK Disciplined Value Mid Cap Fund | SEMIANNUAL REPORT |
SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 27 |
Class | Expense reduction |
Class A | $43,340 |
Class C | 6,534 |
Class I | 302,128 |
Class R2 | 4,741 |
Class | Expense reduction |
Class R4 | $2,777 |
Class R6 | 114,217 |
Class ADV | 24 |
Total | $473,761 |
Class | Rule 12b-1 Fee | Service fee |
Class A | 0.30% | — |
Class C | 1.00% | — |
Class R2 | 0.25% | 0.25% |
Class R4 | 0.25% | 0.10% |
Class ADV | 0.25% | — |
28 | JOHN HANCOCK Disciplined Value Mid Cap Fund | SEMIANNUAL REPORT |
Class | Distribution and service fees | Transfer agent fees |
Class A | $1,465,779 | $688,024 |
Class C | 883,956 | 103,683 |
Class I | — | 4,896,544 |
Class R2 | 311,953 | 7,492 |
Class R4 | 128,982 | 4,401 |
Class R6 | — | 181,242 |
Class ADV | 817 | 384 |
Total | $2,791,487 | $5,881,770 |
SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 29 |
Borrower or Lender | Weighted Average Loan Balance | Days Outstanding | Weighted Average Interest Rate | Interest Income (Expense) |
Lender | $39,513,911 | 4 | 2.085% | $9,154 |
Six Months Ended 9-30-19 | Year Ended 3-31-19 | |||
Shares | Amount | Shares | Amount | |
Class A shares | ||||
Sold | 5,325,845 | $106,052,623 | 9,600,767 | $196,392,115 |
Distributions reinvested | — | — | 7,176,446 | 124,941,934 |
Repurchased | (13,430,167) | (269,597,248) | (23,945,531) | (486,398,627) |
Net decrease | (8,104,322) | $(163,544,625) | (7,168,318) | $(165,064,578) |
Class C shares | ||||
Sold | 290,764 | $5,804,122 | 535,694 | $10,538,379 |
Distributions reinvested | — | — | 1,097,981 | 19,203,695 |
Repurchased | (1,528,168) | (30,487,522) | (4,549,113) | (92,210,346) |
Net decrease | (1,237,404) | $(24,683,400) | (2,915,438) | $(62,468,272) |
Class I shares | ||||
Sold | 60,003,437 | $1,251,181,052 | 96,199,367 | $2,043,980,260 |
Distributions reinvested | — | — | 42,216,483 | 766,651,337 |
Repurchased | (48,481,009) | (1,006,903,044) | (169,569,857) | (3,552,367,272) |
Net increase (decrease) | 11,522,428 | $244,278,008 | (31,154,007) | $(741,735,675) |
Class R2 shares | ||||
Sold | 462,987 | $9,576,393 | 1,473,157 | $30,719,374 |
Distributions reinvested | — | — | 678,989 | 12,303,280 |
Repurchased | (1,178,888) | (24,333,646) | (3,661,304) | (79,802,365) |
Net decrease | (715,901) | $(14,757,253) | (1,509,158) | $(36,779,711) |
Class R4 shares | ||||
Sold | 362,862 | $7,539,714 | 878,937 | $19,103,976 |
Distributions reinvested | — | — | 513,681 | 9,323,305 |
Repurchased | (637,852) | (13,192,971) | (1,849,341) | (38,431,474) |
Net decrease | (274,990) | $(5,653,257) | (456,723) | $(10,004,193) |
30 | JOHN HANCOCK Disciplined Value Mid Cap Fund | SEMIANNUAL REPORT |
Six Months Ended 9-30-19 | Year Ended 3-31-19 | |||
Shares | Amount | Shares | Amount | |
Class R6 shares | ||||
Sold | 14,397,064 | $300,951,300 | 48,812,674 | $1,040,348,591 |
Distributions reinvested | — | — | 16,526,815 | 299,796,417 |
Repurchased | (14,959,310) | (311,145,660) | (33,281,169) | (707,145,429) |
Net increase (decrease) | (562,246) | $(10,194,360) | 32,058,320 | $632,999,579 |
Class ADV shares | ||||
Sold | 6,049 | $122,110 | 1,749 | $38,161 |
Distributions reinvested | — | — | 10,753 | 186,669 |
Repurchased | (648) | (12,752) | (76,260) | (1,445,473) |
Net increase (decrease) | 5,401 | $109,358 | (63,758) | $(1,220,643) |
Total net increase (decrease) | 632,966 | $25,554,471 | (11,209,082) | $(384,273,493) |
Dividends and distributions | |||||||||
Affiliate | Beginning share amount | Shares purchased | Shares sold | Ending share amount | Income distributions received | Capital gain distributions received | Realized gain (loss) | Change in unrealized appreciation (depreciation) | Ending value |
John Hancock Collateral Trust* | 613,969 | 41,936,540 | (32,961,057) | 9,589,452 | — | — | $(1,478) | $(472) | $95,958,773 |
* | Refer to the Securities lending note within Note 2 for details regarding this investment. |
SEMIANNUAL REPORT | JOHN HANCOCK DISCIPLINED VALUE MID CAP FUND | 31 |
Continuation of Investment Advisory and Subadvisory Agreements
Evaluation of Advisory and Subadvisory Agreements by the Board of Trustees
This section describes the evaluation by the Board of Trustees (the Board) of John Hancock Funds III (the Trust) of the Advisory Agreement (the Advisory Agreement) with John Hancock Investment Management, LLC (the Advisor, formerly John Hancock Advisers, LLC) and the Subadvisory Agreement (the Subadvisory Agreement) with Boston Partners Global Investors, Inc. (the Subadvisor), for John Hancock Disciplined Value Mid Cap Fund (the fund). The Advisory Agreement and Subadvisory Agreement are collectively referred to as the Agreements. Prior to the June23-26, 2019 in-person meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the Agreements at an in-person meeting held on May28-30, 2019.
Approval of Advisory and Subadvisory Agreements
At in-person meetings held on June 23-26, 2019, the Board, including the Trustees who are not parties to any Agreement or considered to be interested persons of the Trust under the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees), reapproved for an annual period the continuation of the Advisory Agreement between the Trust and the Advisor and the Subadvisory Agreement between the Advisor and the Subadvisor with respect to the fund.
In considering the Advisory Agreement and the Subadvisory Agreement, the Board received in advance of the meetings a variety of materials relating to the fund, the Advisor and the Subadvisor, including comparative performance, fee and expense information for a peer group of similar funds prepared by an independent third-party provider of fund data, performance information for an applicable benchmark index; and, with respect to the Subadvisor, comparative performance information for comparably managed accounts, as applicable, and other information provided by the Advisor and the Subadvisor regarding the nature, extent and quality of services provided by the Advisor and the Subadvisor under their respective Agreements, as well as information regarding the Advisor's revenues and costs of providing services to the fund and any compensation paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreement are considered, particular focus is given to information concerning fund performance, comparability of fees and total expenses, and profitability. However, the Board notes that the evaluation process with respect to the Advisor and the Subadvisor is an ongoing one. In this regard, the Board also took into account discussions with management and information provided to the Board (including its various committees) at prior meetings with respect to the services provided by the Advisor and the Subadvisor to the fund, including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisor with respect to the fund. The information received and considered by the Board in connection with the May and June meetings and throughout the year was both written and oral. The Board also considered the nature, quality, and extent of non-advisory services, if any, to be provided to the fund by the Advisor's affiliates, including distribution services. The Board considered the Advisory Agreement and the Subadvisory Agreement separately in the course of its review. In doing so, the Board noted the respective roles of the Advisor and Subadvisor in providing services to the fund.
Throughout the process, the Board asked questions of and requested additional information from management. The Board is assisted by counsel for the Trust and the Independent Trustees are also separately assisted by independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements
and discussed the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement with respect to the fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets, and the industry) and did not treat any single factor as determinative, and each Trustee may have attributed different weights to different factors. The Board's conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board's ongoing regular review of fund performance and operations throughout the year.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the fund, the Board reviewed information provided by the Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor's compliance and regulatory history, including its Form ADV. The Board also noted that on a regular basis it receives and reviews information from the Trust's Chief Compliance Officer (CCO) regarding the fund's compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board observed that the scope of services provided by the Advisor, and of the undertakings required of the Advisor in connection with those services, including maintaining and monitoring its own and the fund's compliance programs, risk management programs, liquidity management programs and cybersecurity programs, had expanded over time as a result of regulatory, market and other developments. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the fund, including, but not limited to, general supervision of and coordination of the services provided by the Subadvisor, and is also responsible for monitoring and reviewing the activities of the Subadvisor and other third-party service providers. The Board considered the significant risks assumed by the Advisor in connection with the services provided to the fund including entrepreneurial risk in sponsoring new funds and ongoing risks including investment, operational, enterprise, litigation, regulatory and compliance risks with respect to all funds.
In considering the nature, extent, and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor's management and the quality of the performance of the Advisor's duties, through Board meetings, discussions and reports during the preceding year and through each Trustee's experience as a Trustee of the Trust and of the other trusts in the John Hancock group of funds complex (the John Hancock Fund Complex).
In the course of their deliberations regarding the Advisory Agreement, the Board considered, among other things:
(a) | the skills and competency with which the Advisor has in the past managed the Trust's affairs and its subadvisory relationship, the Advisor's oversight and monitoring of the Subadvisor's investment performance and compliance programs, such as the Subadvisor's compliance with fund policies and objectives, review of brokerage matters, including with respect to trade allocation and best execution and the Advisor's timeliness in responding to performance issues; |
(b) | the background, qualifications and skills of the Advisor's personnel; |
(c) | the Advisor's compliance policies and procedures and its responsiveness to regulatory changes and fund industry developments; |
The Board concluded that the Advisor may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the fund.
Investment performance.In considering the fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the fund's performance results. In connection with the consideration of the Advisory Agreement, the Board:
(a) | reviewed information prepared by management regarding the fund's performance; |
(b) | considered the comparative performance of an applicable benchmark index; |
(c) | considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; and |
(d) | took into account the Advisor's analysis of the fund's performance and its plans and recommendations regarding the Trust's subadvisory arrangements generally. |
The Board noted that while it found the data provided by the independent third-party generally useful it recognized its limitations, including in particular that data may vary depending on the end date selected and the results of the performance comparisons may vary depending on the selection of the peer group. The Board noted that the fund underperformed its benchmark index and peer group average for the one- and three-year periods and outperformed its benchmark index and peer group average for the five- and ten-year periods ended December 31, 2018. The Board took into account management's discussion of the fund's performance, including the impact of market conditions on the fund's more recent performance and the favorable performance relative to the benchmark index and peer group average for the five- and ten-year periods. The Board concluded that the fund's performance has generally been in line with or outperformed the historical performance of comparable funds and the fund's benchmark index over the longer term.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of fund data, including, among other data, the fund's contractual and net management fees (and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the fund in light of the nature, extent and quality of the management and advisory and subadvisory services provided by the Advisor and the Subadvisor. The Board considered the fund's ranking within a smaller group of peer funds chosen by the independent third-party provider, as well as the fund's ranking within a broader group of funds. In comparing the fund's contractual and net management fees to those of comparable funds, the Board noted
that such fees include both advisory and administrative costs. The Board noted that net management fees and net total expenses for the fund are higher than the peer group median.
The Board took into account management's discussion of the fund's expenses. The Board took into account management's discussion with respect to the overall management fee and the fees of the Subadvisor, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee, in each case in light of the services rendered for those amounts and the risks undertaken by the Advisor. The Board also noted that the Advisor pays the subadvisory fee, and that such fees are negotiated at arm's length with respect to the Subadvisor. In addition, the Board took into account that management had agreed to implement an overall fee waiver across the complex, including the fund, which is discussed further below. The Board also noted actions taken over the past several years to reduce the fund's operating expenses. The Board also noted that, in addition, the fund has breakpoints in its contractual management fee schedule that reduces management fees as assets increase. The Board also noted that the fund's distributor, an affiliate of the Advisor, has agreed to waive a portion of its Rule 12b-1 fee for a share class of the fund. The Board reviewed information provided by the Advisor concerning the investment advisory fee charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the John Hancock Fund Complex) having similar investment mandates, if any. The Board considered any differences between the Advisor's and Subadvisor's services to the fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee paid with respect to the fund is reasonable in light of the nature, extent and quality of the services provided to the fund under the Advisory Agreement.
Profitability/Fall out benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor's relationship with the Trust, the Board:
(a) | reviewed financial information of the Advisor; |
(b) | reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to the fund; |
(c) | received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole and with respect to the fund; |
(d) | received information with respect to the Advisor's allocation methodologies used in preparing the profitability data and considered that the Advisor hired an independent third-party consultant to provide an analysis of the Advisor's allocation methodologies; |
(e) | considered that the John Hancock insurance companies that are affiliates of the Advisor, as shareholders of the Trust directly or through their separate accounts, receive certain tax credits or deductions relating to foreign taxes paid and dividends received by certain funds of the Trust and noted that these tax benefits, which are not available to participants in qualified retirement plans under applicable income tax law, are reflected in the profitability information reviewed by the Board; |
(f) | considered that the Advisor also provides administrative services to the fund on a cost basis pursuant to an administrative services agreement; |
(g) | noted that affiliates of the Advisor provide transfer agency services and distribution services to the fund, and that the fund's distributor also receives Rule 12b-1 payments to support distribution of the fund; |
(h) | noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the fund; |
(i) | noted that the subadvisory fee for the fund is paid by the Advisor and is negotiated at arm's length; |
(j) | considered the Advisor's ongoing costs and expenditures necessary to improve services, meet new regulatory and compliance requirements, and adapt to other challenges impacting the fund industry; and |
(k) | considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the fund and the risks that it assumes as Advisor, including entrepreneurial, operational, reputational, litigation and regulatory risk. |
Based upon its review, the Board concluded that the level of profitability, if any, of the Advisor and its affiliates from their relationship with the fund was reasonable and not excessive.
Economies of scale. In considering the extent to which economies of scale would be realized as the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders, the Board:
(a) | considered that the Advisor has contractually agreed to waive a portion of its management fee for certain funds of the John Hancock Fund Complex, including the fund (the participating portfolios) or otherwise reimburse the expenses of the participating portfolios (the reimbursement). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund; |
(b) | reviewed the fund's advisory fee structure and concluded that: (i) the fund's fee structure contains breakpoints at the subadvisory fee level and that such breakpoints are reflected as breakpoints in the advisory fees for the fund; and (ii) although economies of scale cannot be measured with precision, these arrangements permit shareholders of the fund to benefit from economies of scale if the fund grows. The Board also took into account management's discussion of the fund's advisory fee structure; and |
(c) | the Board also considered the effect of the fund's growth in size on its performance and fees. The Board also noted that if the fund's assets increase over time, the fund may realize other economies of scale. |
Approval of Subadvisory Agreement
In making its determination with respect to approval of the Subadvisory Agreement, the Board reviewed:
(1) | information relating to the Subadvisor's business, including current subadvisory services to the Trust (and other funds in the John Hancock Fund Complex); |
(2) | the historical and current performance of the fund and comparative performance information relating to an applicable benchmark index and comparable funds; |
(3) | the subadvisory fee for the fund, including any breakpoints, and to the extent available, comparable fee information prepared by an independent third party provider of fund data; and |
(4) | information relating to the nature and scope of any material relationships and their significance to the Trust's Advisor and Subadvisor. |
Nature, extent, and quality of services. With respect to the services provided by the Subadvisor, the Board received information provided to the Board by the Subadvisor, including the Subadvisor's Form ADV, as well as took into account information presented throughout the past year. The Board considered the Subadvisor's current level of staffing and its overall resources, as well as received information relating to the Subadvisor's compensation program. The Board reviewed the Subadvisor's history and investment experience, as well as information regarding the
qualifications, background, and responsibilities of the Subadvisor's investment and compliance personnel who provide services to the fund. The Board also considered, among other things, the Subadvisor's compliance program and any disciplinary history. The Board also considered the Subadvisor's risk assessment and monitoring process. The Board reviewed the Subadvisor's regulatory history, including whether it was involved in any regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular, periodic reviews of the Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust's CCO and his staff conduct regular, periodic compliance reviews with the Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of the Subadvisor and procedures reasonably designed to assure compliance with the federal securities laws. The Board also took into account the financial condition of the Subadvisor.
The Board considered the Subadvisor's investment process and philosophy. The Board took into account that the Subadvisor's responsibilities include the development and maintenance of an investment program for the fund that is consistent with the fund's investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services. The Board also received information with respect to the Subadvisor's brokerage policies and practices, including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the fund, the Board noted that the fees under the Subadvisory Agreement are paid by the Advisor and not the fund.
The Board also relied on the ability of the Advisor to negotiate the Subadvisory Agreement with the Subadvisor, which is not affiliated with the Advisor, and the fees thereunder at arm's length. As a result, the costs of the services to be provided and the profits to be realized by the Subadvisor from its relationship with the Trust were not a material factor in the Board's consideration of the Subadvisory Agreement.
The Board also received information regarding the nature and scope (including their significance to the Advisor and its affiliates and to the Subadvisor) of any material relationships with respect to the Subadvisor, which include arrangements in which the Subadvisor or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreement.
In addition, the Board considered other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor's relationship with the fund, such as the opportunity to provide advisory services to additional funds in the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays a subadvisory fee to the Subadvisor. As noted above, the Board also considered the fund's subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the fund as included in the report prepared by the independent third party provider of fund data, to the extent available. The Board noted that the limited size of the Lipper peer group was not sufficient for comparative purposes. The Board also took into account the subadvisory fees paid by the Advisor to the Subadvisor with respect to the fund and compared them to fees charged by the Subadvisor to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered the fund's performance as compared to the fund's peer group and the benchmark index and noted that the Board reviews information about the fund's performance results at its regularly scheduled meetings. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor. The Board was mindful of the Advisor's focus on the Subadvisor's performance. The Board also noted the Subadvisor's long-term performance record for similar accounts, as applicable.
The Board's decision to approve the Subadvisory Agreement was based on a number of determinations, including the following:
(1) | the Subadvisor has extensive experience and demonstrated skills as a manager; |
(2) | the performance of the fund has generally been in line with or outperformed the historical performance of comparable funds and the fund's benchmark index over the longer term; |
(3) | subadvisory fee is reasonable in relation to the level and quality of services being provided under the Subadvisory Agreement; and |
(4) | noted that the subadvisory fees are paid by the Advisor not the fund and that the subadvisory fee breakpoints are reflected as breakpoints in the advisory fees for the fund in order to permit shareholders to benefit from economies of scale if the fund grows. |
* * *
Based on the Board's evaluation of all factors that the Board deemed to be material, including those factors described above, the Board, including the Independent Trustees, concluded that renewal of the Advisory Agreement and the Subadvisory Agreement would be in the best interest of the fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreement for an additional one-year period.
Trustees Hassell H. McClellan,Chairperson Officers Andrew G. Arnott Francis V. Knox, Jr. Charles A. Rizzo Salvatore Schiavone Christopher (Kit) Sechler | Investment advisor John Hancock Investment Management LLC Subadvisor Boston Partners Global Investors, Inc. Portfolio Managers Joseph F. Feeney, Jr., CFA Principal distributor John Hancock Investment Management Distributors LLC Custodian State Street Bank and Trust Company Transfer agent John Hancock Signature Services, Inc. Legal counsel K&L Gates LLP |
* Member of the Audit Committee
† Non-Independent Trustee
The fund's proxy voting policies and procedures, as well as the fund proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.
All of the fund's holdings as of the end of the third month of every fiscal quarter are filed with the SEC on Form N-PORT within 60 days of the end of the fiscal quarter. The fund's Form N-PORT filings are available on our website and the SEC's website, sec.gov.
We make this information on your fund, as well asmonthly portfolio holdings, and other fund details available on our website at jhinvestments.com or by calling 800-225-5291.
You can also contact us: | |||
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we support the role of professional financial advice and operate with
the highest standards of conduct and integrity.
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Our unique approach to asset management enables us to provide
a diverse set of investments backed by some of the world's best
managers, along with strong risk-adjusted returns across asset classes.
John Hancock Investment Management Distributors LLC n Member FINRA, SIPC
200 Berkeley Street n Boston, MA 02116-5010 n 800-225-5291 n jhinvestments.com
This report is for the information of the shareholders of John Hancock Disciplined Value Mid Cap Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.
MF975094 | 363SA 9/19 11/19 |
John Hancock
Global Shareholder Yield Fund
Semiannual report 9/30/19
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change, and you do not need to take any action. You may elect to receive shareholder reports and other communications electronically by calling John Hancock Investment Management at 800-225-5291 (Class A, Class B and Class C shares) or 888-972-8696 (Class I, Class R2, and Class R6) or by contacting your financial intermediary.
You may elect to receive all reports in paper, free of charge, at any time. You can inform John Hancock Investment Management or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by following the instructions listed above. Your election to receive reports in paper will apply to all funds held with John Hancock Investment Management or your financial intermediary.
A message to shareholders
Dear shareholder,
It was a rather volatile time for global stock markets during the six months ended September 30, 2019, with investor uncertainty surrounding global trade, a slowdown in China, and the latest developments on the Brexit front leading to some dramatic swings in performance. Central banks introduced stimulative measures late in the period, with the U.S. Federal Reserve cutting interest rates twice and the European Central Bank rolling out a sweeping package in September.
The economic fundamentals around the globe are relatively mixed today, with the United States appearing fairly healthy, Europe on somewhat less stable footing, and emerging economies on divergent paths. With an uncertain outlook, it's safe to say there are sure to be patches of market turbulence as the year goes on. As always, your best resource in unpredictable markets is your financial advisor, who can help position your portfolio so that it's sufficiently diversified to meet your long-term objectives and to withstand the inevitable bouts of market volatility along the way.
On behalf of everyone at John Hancock Investment Management, I'd like to take this opportunity to welcome new shareholders and thank existing shareholders for the continued trust you've placed in us.
Sincerely,
Andrew G. Arnott
President and CEO,
John Hancock Investment Management
Head of Wealth and Asset Management,
United States and Europe
This commentary reflects the CEO's views as of this report's period end and are subject to change at any time. Diversification does not guarantee investment returns and does not eliminate risk of loss. All investments entail risks, including the possible loss of principal. For more up-to-date information, you can visit our website at jhinvestments.com.
John Hancock
Global Shareholder Yield Fund
INVESTMENT OBJECTIVE
The fund seeks to provide a high level of income as its primary objective. Capital appreciation is a secondary investment objective.
AVERAGE ANNUAL TOTAL RETURNS AS OF 9/30/19 (%)
The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Figures from Morningstar, Inc. include reinvested distributions and do not take into account sales charges. Actual load-adjusted performance is lower.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative. Performance of the other share classes will vary based on the difference in the fees and expenses of those classes. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current month-end performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling 800-225-5291. For further information on the fund's objectives, risks, and strategy, see the fund's prospectus.
SECTOR COMPOSITION AS OF 9/30/19 (%)
TOP 10 HOLDINGS AS OF 9/30/19 (%)
Duke Energy Corp. | 1.9 |
Welltower, Inc. | 1.8 |
AXA SA | 1.8 |
Allianz SE | 1.8 |
BCE, Inc. | 1.7 |
Verizon Communications, Inc. | 1.7 |
Muenchener Rueckversicherungs-Gesellschaft AG | 1.6 |
Entergy Corp. | 1.6 |
FirstEnergy Corp. | 1.6 |
AT&T, Inc. | 1.6 |
TOTAL | 17.1 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
A note about risks
The fund may be subject to various risks as described in the fund's prospectus. For more information, please refer to the "Principal risks" section of the prospectus.
TOP 10 COUNTRIES AS OF 9/30/19 (%)
United States | 53.9 |
United Kingdom | 9.5 |
France | 7.3 |
Canada | 6.1 |
Germany | 6.1 |
Italy | 3.3 |
Switzerland | 2.9 |
Australia | 1.8 |
Japan | 1.7 |
Netherlands | 1.4 |
TOTAL | 94.0 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
TOTAL RETURNS FOR THE PERIOD ENDED SEPTEMBER 30, 2019
Average annual total returns (%) with maximum sales charge | Cumulative total returns (%) with maximum sales charge | SEC 30-day yield (%) subsidized | SEC 30-day yield (%) unsubsidized1 | ||||||||
1-year | 5-year | 10-year | 6-month | 5-year | 10-year | as of 9-30-19 | as of 9-30-19 | ||||
Class A | -0.70 | 3.03 | 7.67 | -2.11 | 16.09 | 109.43 | 2.65 | 2.46 | |||
Class B | -1.23 | 2.99 | 7.59 | -2.44 | 15.86 | 107.85 | 2.08 | 1.94 | |||
Class C | 2.63 | 3.33 | 7.43 | 1.56 | 17.81 | 104.85 | 2.05 | 1.90 | |||
Class I2 | 4.72 | 4.37 | 8.58 | 3.15 | 23.87 | 127.77 | 3.04 | 2.89 | |||
Class R22,3 | 4.31 | 3.95 | 8.12 | 2.95 | 21.36 | 118.21 | 2.66 | 2.53 | |||
Class R62,3 | 4.84 | 4.49 | 8.57 | 3.12 | 24.59 | 127.57 | 3.14 | 3.00 | |||
Class NAV2 | 4.83 | 4.49 | 8.69 | 3.11 | 24.56 | 130.05 | 3.14 | 3.02 | |||
Index† | 1.83 | 7.18 | 9.01 | 4.56 | 41.46 | 136.91 | — | — |
Performance figures assume all distributions have been reinvested. Figures reflect maximum sales charges on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares' CDSC declines annually between years 1 to 6 according to the following schedule: 5%, 4%, 3%, 3%, 2%, and 1%. No sales charge will be assessed after the sixth year. Class C shares sold within one year of purchase are subject to a 1% CDSC. Sales charges are not applicable to Class I, Class R2, Class R6, and Class NAV shares.
The expense ratios of the fund, both net (including any fee waivers and/or expense limitations) and gross (excluding any fee waivers and/or expense limitations), are set forth according to the most recent publicly available prospectuses for the fund and may differ from those disclosed in the Financial highlights tables in this report. Net expenses reflect contractual expense limitations in effect until July 31, 2020 and are subject to change. Had the contractual fee waivers and expense limitations not been in place, gross expenses would apply. The expense ratios are as follows:
Class A | Class B | Class C | Class I | Class R2 | Class R6 | Class NAV | |
Gross (%) | 1.28 | 1.98 | 1.98 | 0.98 | 1.38 | 0.88 | 0.87 |
Net (%) | 1.09 | 1.84 | 1.84 | 0.84 | 1.24 | 0.74 | 0.86 |
Please refer to the most recent prospectus and annual or semiannual report for more information on expenses and any expense limitation arrangements for each class.
The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility and other factors, the fund's current performance may be higher or lower than the performance shown. For current to the most recent month-end performance data, please call 800-225-5291 or visit the fund's website at jhinvestments.com.
The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The fund's performance results reflect any applicable fee waivers or expense reductions, without which the expenses would increase and results would have been less favorable.
† | Index is the MSCI World Index. |
See the following page for footnotes.
This chart and table show what happened to a hypothetical $10,000 investment in John Hancock Global Shareholder Yield Fund for the share classes and periods indicated, assuming all distributions were reinvested. For comparison, we've shown the same investment in the MSCI World Index.
Start date | With maximum sales charge ($) | Without sales charge ($) | Index ($) | |
Class B4 | 9-30-09 | 20,785 | 20,785 | 23,691 |
Class C4 | 9-30-09 | 20,485 | 20,485 | 23,691 |
Class I2 | 9-30-09 | 22,777 | 22,777 | 23,691 |
Class R22,3 | 9-30-09 | 21,821 | 21,821 | 23,691 |
Class R62,3 | 9-30-09 | 22,757 | 22,757 | 23,691 |
Class NAV2 | 9-30-09 | 23,005 | 23,005 | 23,691 |
The MSCI World Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Footnotes related to performance pages
1 | Unsubsidized yield reflects what the yield would have been without the effect of reimbursements and waivers. |
2 | For certain types of investors, as described in the fund's prospectuses. |
3 | Class R2 and Class R6 shares were first offered 3-1-12 and 9-1-11, respectively. The returns prior to these dates are those of Class A shares that have not been adjusted for class-specific expenses; otherwise, returns would vary. |
4 | The contingent deferred sales charge is not applicable. |
Your expenses |
SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 7 |
Account value on 4-1-2019 | Ending value on 9-30-2019 | Expenses paid during period ended 9-30-20191 | Annualized expense ratio | ||
Class A | Actual expenses/actual returns | $1,000.00 | $1,030.40 | $5.53 | 1.09% |
Hypothetical example | 1,000.00 | 1,019.60 | 5.50 | 1.09% | |
Class B | Actual expenses/actual returns | 1,000.00 | 1,025.60 | 9.32 | 1.84% |
Hypothetical example | 1,000.00 | 1,015.80 | 9.27 | 1.84% | |
Class C | Actual expenses/actual returns | 1,000.00 | 1,025.60 | 9.32 | 1.84% |
Hypothetical example | 1,000.00 | 1,015.80 | 9.27 | 1.84% | |
Class I | Actual expenses/actual returns | 1,000.00 | 1,031.50 | 4.27 | 0.84% |
Hypothetical example | 1,000.00 | 1,020.80 | 4.24 | 0.84% | |
Class R2 | Actual expenses/actual returns | 1,000.00 | 1,029.50 | 6.14 | 1.21% |
Hypothetical example | 1,000.00 | 1,019.00 | 6.11 | 1.21% | |
Class R6 | Actual expenses/actual returns | 1,000.00 | 1,031.20 | 3.76 | 0.74% |
Hypothetical example | 1,000.00 | 1,021.30 | 3.74 | 0.74% | |
Class NAV | Actual expenses/actual returns | 1,000.00 | 1,031.10 | 3.76 | 0.74% |
Hypothetical example | 1,000.00 | 1,021.30 | 3.74 | 0.74% |
1 | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). |
8 | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | SEMIANNUAL REPORT |
Fund’s investments |
Shares | Value | ||||
Common stocks 97.5% | $1,910,043,562 | ||||
(Cost $1,626,397,590) | |||||
Australia 1.8% | 34,536,996 | ||||
Commonwealth Bank of Australia | 201,909 | 11,014,029 | |||
Macquarie Group, Ltd. | 123,460 | 10,943,769 | |||
Westpac Banking Corp. | 629,821 | 12,579,198 | |||
Canada 6.1% | 120,122,414 | ||||
BCE, Inc. | 705,889 | 34,142,255 | |||
Nutrien, Ltd. | 342,722 | 17,094,973 | |||
Pembina Pipeline Corp. | 561,996 | 20,832,263 | |||
Rogers Communications, Inc., Class B | 292,956 | 14,269,125 | |||
Royal Bank of Canada | 177,470 | 14,396,121 | |||
TELUS Corp. | 544,767 | 19,387,677 | |||
France 7.3% | 142,012,955 | ||||
AXA SA | 1,354,206 | 34,578,131 | |||
Cie Generale des Etablissements Michelin SCA | 146,609 | 16,323,948 | |||
Sanofi | 209,138 | 19,373,107 | |||
SCOR SE | 262,353 | 10,831,927 | |||
TOTAL SA (A) | 564,447 | 29,389,016 | |||
Unibail-Rodamco-Westfield | 118,316 | 17,248,090 | |||
Vinci SA | 132,462 | 14,268,736 | |||
Germany 6.1% | 119,500,091 | ||||
Allianz SE | 147,895 | 34,425,932 | |||
BASF SE | 273,230 | 19,103,781 | |||
Deutsche Post AG | 563,931 | 18,793,193 | |||
Muenchener Rueckversicherungs-Gesellschaft AG | 124,746 | 32,221,748 | |||
Siemens AG | 139,711 | 14,955,437 | |||
Italy 3.3% | 64,963,544 | ||||
Assicurazioni Generali SpA | 896,430 | 17,372,598 | |||
Snam SpA | 5,124,252 | 25,883,862 | |||
Terna Rete Elettrica Nazionale SpA | 3,379,730 | 21,707,084 | |||
Japan 1.7% | 32,144,331 | ||||
Takeda Pharmaceutical Company, Ltd. | 543,700 | 18,657,437 | |||
Tokio Marine Holdings, Inc. | 251,400 | 13,486,894 | |||
Netherlands 1.4% | 27,283,978 | ||||
Royal Dutch Shell PLC, ADR, Class A | 463,619 | 27,283,978 | |||
Norway 1.0% | 19,671,031 | ||||
Orkla ASA | 2,161,814 | 19,671,031 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 9 |
Shares | Value | ||||
South Korea 0.8% | $15,185,402 | ||||
Samsung Electronics Company, Ltd., GDR (B) | 14,904 | 15,185,402 | |||
Spain 0.6% | 12,108,909 | ||||
Naturgy Energy Group SA | 456,546 | 12,108,909 | |||
Sweden 0.5% | 10,063,984 | ||||
Svenska Handelsbanken AB, A Shares | 1,075,777 | 10,063,984 | |||
Switzerland 2.9% | 57,564,250 | ||||
Nestle SA | 116,361 | 12,619,879 | |||
Novartis AG | 291,754 | 25,320,452 | |||
Roche Holding AG | 67,398 | 19,623,919 | |||
Taiwan 0.6% | 12,253,941 | ||||
Taiwan Semiconductor Manufacturing Company, Ltd., ADR | 263,639 | 12,253,941 | |||
United Kingdom 9.5% | 186,580,473 | ||||
AstraZeneca PLC, ADR (A) | 417,322 | 18,600,042 | |||
BAE Systems PLC | 3,377,801 | 23,655,597 | |||
British American Tobacco PLC | 522,134 | 19,282,444 | |||
British American Tobacco PLC, ADR | 187,119 | 6,904,691 | |||
Coca-Cola European Partners PLC (New York Stock Exchange) | 192,569 | 10,677,951 | |||
GlaxoSmithKline PLC | 923,381 | 19,792,210 | |||
Imperial Brands PLC | 903,447 | 20,287,868 | |||
Lloyds Banking Group PLC | 20,006,381 | 13,262,565 | |||
Micro Focus International PLC | 583,865 | 8,204,542 | |||
National Grid PLC | 2,273,730 | 24,618,246 | |||
Unilever PLC | 354,305 | 21,294,317 | |||
United States 53.9% | 1,056,051,263 | ||||
3M Company | 77,937 | 12,812,843 | |||
AbbVie, Inc. | 205,124 | 15,531,989 | |||
Altria Group, Inc. | 534,995 | 21,881,296 | |||
Ameren Corp. (A) | 145,527 | 11,649,436 | |||
American Electric Power Company, Inc. | 177,474 | 16,627,539 | |||
Amgen, Inc. | 55,943 | 10,825,530 | |||
AT&T, Inc. | 811,425 | 30,704,316 | |||
BB&T Corp. (A) | 278,429 | 14,859,756 | |||
BlackRock, Inc. | 25,720 | 11,461,861 | |||
Broadcom, Inc. | 36,652 | 10,118,518 | |||
CenterPoint Energy, Inc. | 405,193 | 12,228,725 | |||
Chevron Corp. | 121,398 | 14,397,803 | |||
Cisco Systems, Inc. | 378,097 | 18,681,773 | |||
CME Group, Inc. | 53,370 | 11,279,216 | |||
Darden Restaurants, Inc. | 21,311 | 2,519,386 | |||
Dominion Energy, Inc. | 334,372 | 27,097,507 | |||
Dow, Inc. | 373,636 | 17,803,755 |
10 | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
United States (continued) | |||||
Duke Energy Corp. | 383,884 | $36,799,120 | |||
Eaton Corp. PLC | 289,360 | 24,060,284 | |||
Emerson Electric Company | 237,275 | 15,864,207 | |||
Entergy Corp. | 264,909 | 31,089,720 | |||
Enterprise Products Partners LP | 720,186 | 20,582,916 | |||
Exxon Mobil Corp. | 277,143 | 19,569,067 | |||
FirstEnergy Corp. | 637,943 | 30,767,991 | |||
Hanesbrands, Inc. (A) | 880,452 | 13,488,525 | |||
IBM Corp. | 123,314 | 17,932,322 | |||
Intel Corp. | 230,845 | 11,895,443 | |||
Iron Mountain, Inc. | 601,869 | 19,494,537 | |||
Johnson & Johnson | 129,890 | 16,805,168 | |||
Kimberly-Clark Corp. | 127,318 | 18,085,522 | |||
KLA Corp. | 79,091 | 12,611,060 | |||
Las Vegas Sands Corp. | 348,518 | 20,130,400 | |||
Leggett & Platt, Inc. (A) | 324,726 | 13,294,282 | |||
Lockheed Martin Corp. | 36,652 | 14,296,479 | |||
LyondellBasell Industries NV, Class A | 168,075 | 15,037,670 | |||
Magellan Midstream Partners LP (A) | 252,065 | 16,704,348 | |||
McDonald's Corp. | 60,444 | 12,977,931 | |||
Merck & Company, Inc. | 303,987 | 25,589,626 | |||
MetLife, Inc. | 416,036 | 19,620,258 | |||
Microsoft Corp. | �� | 107,384 | 14,929,598 | ||
Occidental Petroleum Corp. | 320,225 | 14,240,406 | |||
People's United Financial, Inc. | 652,668 | 10,204,464 | |||
PepsiCo, Inc. | 122,817 | 16,838,211 | |||
Pfizer, Inc. | 766,157 | 27,528,021 | |||
Philip Morris International, Inc. | 299,005 | 22,703,450 | |||
Phillips 66 | 149,566 | 15,315,558 | |||
PPL Corp. | 654,597 | 20,613,260 | |||
Public Storage | 46,940 | 11,512,974 | |||
Target Corp. | 138,893 | 14,849,051 | |||
Texas Instruments, Inc. | 171,687 | 22,188,828 | |||
The Coca-Cola Company | 347,875 | 18,938,315 | |||
The Home Depot, Inc. | 55,943 | 12,979,895 | |||
The Procter & Gamble Company | 127,318 | 15,835,813 | |||
United Parcel Service, Inc., Class B | 99,025 | 11,865,176 | |||
UnitedHealth Group, Inc. | 53,559 | 11,639,442 | |||
Verizon Communications, Inc. | 560,716 | 33,844,818 | |||
Watsco, Inc. | 82,534 | 13,963,102 | |||
WEC Energy Group, Inc. | 121,600 | 11,564,160 | |||
Wells Fargo & Company | 248,206 | 12,519,511 | |||
Welltower, Inc. | 383,884 | 34,799,085 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 11 |
Yield (%) | Shares | Value | |||
Securities lending collateral 2.2% | $43,223,450 | ||||
(Cost $43,221,599) | |||||
John Hancock Collateral Trust (C) | 2.1169(D) | 4,319,451 | 43,223,450 |
Total investments (Cost $1,669,619,189) 99.7% | $1,953,267,012 | ||||
Other assets and liabilities, net 0.3% | 6,825,737 | ||||
Total net assets 100.0% | $1,960,092,749 |
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund. | |
Security Abbreviations and Legend | |
ADR | American Depositary Receipt |
GDR | Global Depositary Receipt |
(A) | All or a portion of this security is on loan as of 9-30-19. |
(B) | These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. |
(C) | Investment is an affiliate of the fund, the advisor and/or subadvisor. This security represents the investment of cash collateral received for securities lending. |
(D) | The rate shown is the annualized seven-day yield as of 9-30-19. |
12 | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial statements |
Assets | |
Unaffiliated investments, at value (Cost $1,626,397,590) including $41,780,650 of securities loaned | $1,910,043,562 |
Affiliated investments, at value (Cost $43,221,599) | 43,223,450 |
Total investments, at value (Cost $1,669,619,189) | 1,953,267,012 |
Cash | 28,712,848 |
Foreign currency, at value (Cost $770,363) | 769,402 |
Dividends and interest receivable | 8,398,462 |
Receivable for fund shares sold | 1,444,671 |
Receivable for investments sold | 35,922,993 |
Receivable for securities lending income | 31,519 |
Receivable from affiliates | 22,372 |
Other assets | 115,710 |
Total assets | 2,028,684,989 |
Liabilities | |
Payable for investments purchased | 19,345,474 |
Payable for fund shares repurchased | 5,434,336 |
Payable upon return of securities loaned | 43,283,756 |
Payable to affiliates | |
Accounting and legal services fees | 166,651 |
Transfer agent fees | 116,857 |
Distribution and service fees | 139 |
Trustees' fees | 396 |
Other liabilities and accrued expenses | 244,631 |
Total liabilities | 68,592,240 |
Net assets | $1,960,092,749 |
Net assets consist of | |
Paid-in capital | $1,648,422,288 |
Total distributable earnings (loss) | 311,670,461 |
Net assets | $1,960,092,749 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 13 |
Net asset value per share | |
Based on net asset value and shares outstanding - the fund has an unlimited number of shares authorized with no par value | |
Class A ($331,734,430 ÷ 29,738,356 shares)1 | $11.16 |
Class B ($2,244,066 ÷ 200,861 shares)1 | $11.17 |
Class C ($66,280,944 ÷ 5,932,229 shares)1 | $11.17 |
Class I ($781,965,601 ÷ 69,832,029 shares) | $11.20 |
Class R2 ($750,565 ÷ 66,968 shares) | $11.21 |
Class R6 ($329,727,291 ÷ 29,491,099 shares) | $11.18 |
Class NAV ($447,389,852 ÷ 39,983,982 shares) | $11.19 |
Maximum offering price per share | |
Class A (net asset value per share ÷ 95%)2 | $11.75 |
1 | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
2 | On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced. |
14 | JOHN HANCOCK Global Shareholder Yield Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Investment income | |
Dividends | $49,666,390 |
Interest | 398,322 |
Securities lending | 375,895 |
Less foreign taxes withheld | (2,404,160) |
Total investment income | 48,036,447 |
Expenses | |
Investment management fees | 7,971,563 |
Distribution and service fees | 861,385 |
Accounting and legal services fees | 202,604 |
Transfer agent fees | 733,858 |
Trustees' fees | 21,180 |
Custodian fees | 254,776 |
State registration fees | 70,617 |
Printing and postage | 80,648 |
Professional fees | 43,517 |
Other | 34,705 |
Total expenses | 10,274,853 |
Less expense reductions | (1,522,160) |
Net expenses | 8,752,693 |
Net investment income | 39,283,754 |
Realized and unrealized gain (loss) | |
Net realized gain (loss) on | |
Unaffiliated investments and foreign currency transactions | 18,583,086 |
Affiliated investments | (5,945) |
18,577,141 | |
Change in net unrealized appreciation (depreciation) of | |
Unaffiliated investments and translation of assets and liabilities in foreign currencies | 2,437,908 |
Affiliated investments | 1,277 |
2,439,185 | |
Net realized and unrealized gain | 21,016,326 |
Increase in net assets from operations | $60,300,080 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 15 |
Six months ended 9-30-19 (unaudited) | Year ended 3-31-19 | |
Increase (decrease) in net assets | ||
From operations | ||
Net investment income | $39,283,754 | $74,015,611 |
Net realized gain | 18,577,141 | 27,988,241 |
Change in net unrealized appreciation (depreciation) | 2,439,185 | (343,263) |
Increase in net assets resulting from operations | 60,300,080 | 101,660,589 |
Distributions to shareholders | ||
From earnings | ||
Class A | (6,057,027) | (18,749,401) |
Class B | (37,729) | (251,126) |
Class C | (1,007,790) | (4,077,675) |
Class I | (15,576,006) | (47,923,352) |
Class R2 | (13,426) | (56,799) |
Class R6 | (6,723,129) | (24,556,365) |
Class NAV | (9,089,809) | (27,887,901) |
From net investment income | ||
Total distributions | (38,504,916) | (123,502,619) |
From fund share transactions | (99,449,329) | (272,070,100) |
Total decrease | (77,654,165) | (293,912,130) |
Net assets | ||
Beginning of period | 2,037,746,914 | 2,331,659,044 |
End of period | $1,960,092,749 | $2,037,746,914 |
16 | JOHN HANCOCK Global Shareholder Yield Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial highlights |
CLASS A SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $11.03 | $11.14 | $11.31 | $10.78 | $9.89 | $11.78 | $11.74 |
Net investment income3 | 0.21 | 0.35 | 0.04 | 0.32 | 0.27 | 0.33 | 0.36 |
Net realized and unrealized gain (loss) on investments | 0.12 | 0.16 | (0.16) | 0.53 | 0.92 | (1.42) | 0.55 |
Total from investment operations | 0.33 | 0.51 | (0.12) | 0.85 | 1.19 | (1.09) | 0.91 |
Less distributions | |||||||
From net investment income | (0.20) | (0.35) | (0.05) | (0.32) | (0.30) | (0.32) | (0.44) |
From net realized gain | — | (0.27) | — | — | — | (0.48) | (0.43) |
Total distributions | (0.20) | (0.62) | (0.05) | (0.32) | (0.30) | (0.80) | (0.87) |
Net asset value, end of period | $11.16 | $11.03 | $11.14 | $11.31 | $10.78 | $9.89 | $11.78 |
Total return (%)4,5 | 3.046 | 4.86 | (1.03)6 | 7.87 | 12.21 | (9.38) | 8.10 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $332 | $334 | $348 | $355 | $381 | $470 | $580 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 1.297 | 1.28 | 1.307 | 1.27 | 1.29 | 1.29 | 1.33 |
Expenses including reductions | 1.097 | 1.09 | 1.097 | 1.09 | 1.26 | 1.28 | 1.32 |
Net investment income | 3.737 | 3.18 | 3.787 | 2.85 | 2.62 | 3.03 | 2.99 |
Portfolio turnover (%) | 13 | 16 | 2 | 19 | 25 | 33 | 23 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
5 | Does not reflect the effect of sales charges, if any. |
6 | Not annualized. |
7 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 17 |
CLASS B SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $11.05 | $11.15 | $11.30 | $10.78 | $9.89 | $11.78 | $11.74 |
Net investment income3 | 0.17 | 0.27 | 0.03 | 0.25 | 0.20 | 0.25 | 0.27 |
Net realized and unrealized gain (loss) on investments | 0.11 | 0.17 | (0.15) | 0.50 | 0.92 | (1.42) | 0.55 |
Total from investment operations | 0.28 | 0.44 | (0.12) | 0.75 | 1.12 | (1.17) | 0.82 |
Less distributions | |||||||
From net investment income | (0.16) | (0.27) | (0.03) | (0.23) | (0.23) | (0.24) | (0.35) |
From net realized gain | — | (0.27) | — | — | — | (0.48) | (0.43) |
Total distributions | (0.16) | (0.54) | (0.03) | (0.23) | (0.23) | (0.72) | (0.78) |
Net asset value, end of period | $11.17 | $11.05 | $11.15 | $11.30 | $10.78 | $9.89 | $11.78 |
Total return (%)4,5 | 2.566 | 4.16 | (1.05)6 | 6.98 | 11.42 | (10.10) | 7.26 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $2 | $4 | $7 | $7 | $11 | $12 | $17 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 1.997 | 1.97 | 2.007 | 1.97 | 1.99 | 2.02 | 2.10 |
Expenses including reductions | 1.847 | 1.84 | 1.847 | 1.84 | 1.97 | 2.02 | 2.10 |
Net investment income | 3.167 | 2.49 | 3.037 | 2.19 | 1.94 | 2.31 | 2.24 |
Portfolio turnover (%) | 13 | 16 | 2 | 19 | 25 | 33 | 23 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
5 | Does not reflect the effect of sales charges, if any. |
6 | Not annualized. |
7 | Annualized. |
18 | JOHN HANCOCK Global Shareholder Yield Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS C SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $11.05 | $11.16 | $11.31 | $10.78 | $9.90 | $11.79 | $11.74 |
Net investment income3 | 0.17 | 0.27 | 0.03 | 0.24 | 0.20 | 0.25 | 0.27 |
Net realized and unrealized gain (loss) on investments | 0.11 | 0.16 | (0.15) | 0.52 | 0.91 | (1.41) | 0.56 |
Total from investment operations | 0.28 | 0.43 | (0.12) | 0.76 | 1.11 | (1.16) | 0.83 |
Less distributions | |||||||
From net investment income | (0.16) | (0.27) | (0.03) | (0.23) | (0.23) | (0.25) | (0.35) |
From net realized gain | — | (0.27) | — | — | — | (0.48) | (0.43) |
Total distributions | (0.16) | (0.54) | (0.03) | (0.23) | (0.23) | (0.73) | (0.78) |
Net asset value, end of period | $11.17 | $11.05 | $11.16 | $11.31 | $10.78 | $9.90 | $11.79 |
Total return (%)4,5 | 2.566 | 4.06 | (1.05)6 | 6.98 | 11.41 | (10.02) | 7.42 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $66 | $75 | $107 | $110 | $126 | $133 | $168 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 1.997 | 1.97 | 2.007 | 1.97 | 1.99 | 1.99 | 2.03 |
Expenses including reductions | 1.847 | 1.84 | 1.847 | 1.84 | 1.97 | 1.98 | 2.02 |
Net investment income | 3.037 | 2.49 | 3.037 | 2.11 | 1.92 | 2.33 | 2.24 |
Portfolio turnover (%) | 13 | 16 | 2 | 19 | 25 | 33 | 23 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
5 | Does not reflect the effect of sales charges, if any. |
6 | Not annualized. |
7 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 19 |
CLASS I SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $11.07 | $11.18 | $11.35 | $10.82 | $9.93 | $11.83 | $11.78 |
Net investment income3 | 0.22 | 0.38 | 0.04 | 0.36 | 0.31 | 0.37 | 0.39 |
Net realized and unrealized gain (loss) on investments | 0.13 | 0.16 | (0.15) | 0.51 | 0.91 | (1.43) | 0.56 |
Total from investment operations | 0.35 | 0.54 | (0.11) | 0.87 | 1.22 | (1.06) | 0.95 |
Less distributions | |||||||
From net investment income | (0.22) | (0.38) | (0.06) | (0.34) | (0.33) | (0.36) | (0.47) |
From net realized gain | — | (0.27) | — | — | — | (0.48) | (0.43) |
Total distributions | (0.22) | (0.65) | (0.06) | (0.34) | (0.33) | (0.84) | (0.90) |
Net asset value, end of period | $11.20 | $11.07 | $11.18 | $11.35 | $10.82 | $9.93 | $11.83 |
Total return (%)4 | 3.155 | 5.10 | (0.96)5 | 8.10 | 12.51 | (9.13) | 8.50 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $782 | $815 | $881 | $894 | $1,245 | $957 | $1,242 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 0.996 | 0.99 | 1.006 | 0.97 | 0.97 | 0.97 | 1.01 |
Expenses including reductions | 0.846 | 0.84 | 0.846 | 0.84 | 0.95 | 0.97 | 1.00 |
Net investment income | 3.986 | 3.44 | 4.036 | 3.12 | 2.91 | 3.37 | 3.24 |
Portfolio turnover (%) | 13 | 16 | 2 | 19 | 25 | 33 | 23 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
5 | Not annualized. |
6 | Annualized. |
20 | JOHN HANCOCK Global Shareholder Yield Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R2 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $11.08 | $11.19 | $11.35 | $10.82 | $9.93 | $11.82 | $11.78 |
Net investment income3 | 0.20 | 0.33 | 0.03 | 0.30 | 0.26 | 0.32 | 0.31 |
Net realized and unrealized gain (loss) on investments | 0.13 | 0.16 | (0.14) | 0.53 | 0.92 | (1.43) | 0.58 |
Total from investment operations | 0.33 | 0.49 | (0.11) | 0.83 | 1.18 | (1.11) | 0.89 |
Less distributions | |||||||
From net investment income | (0.20) | (0.33) | (0.05) | (0.30) | (0.29) | (0.30) | (0.42) |
From net realized gain | — | (0.27) | — | — | — | (0.48) | (0.43) |
Total distributions | (0.20) | (0.60) | (0.05) | (0.30) | (0.29) | (0.78) | (0.85) |
Net asset value, end of period | $11.21 | $11.08 | $11.19 | $11.35 | $10.82 | $9.93 | $11.82 |
Total return (%)4 | 2.955 | 4.68 | (0.98)5 | 7.68 | 12.04 | (9.51) | 7.93 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $1 | $1 | $1 | $1 | $1 | $1 | $1 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 1.346 | 1.36 | 1.386 | 1.37 | 1.36 | 1.86 | 3.22 |
Expenses including reductions | 1.216 | 1.22 | 1.246 | 1.24 | 1.34 | 1.43 | 1.47 |
Net investment income | 3.626 | 3.02 | 3.626 | 2.62 | 2.50 | 2.92 | 2.66 |
Portfolio turnover (%) | 13 | 16 | 2 | 19 | 25 | 33 | 23 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
5 | Not annualized. |
6 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 21 |
CLASS R6 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $11.06 | $11.16 | $11.34 | $10.81 | $9.92 | $11.81 | $11.77 |
Net investment income3 | 0.23 | 0.39 | 0.04 | 0.31 | 0.30 | 0.38 | 0.39 |
Net realized and unrealized gain (loss) on investments | 0.11 | 0.17 | (0.16) | 0.57 | 0.93 | (1.42) | 0.57 |
Total from investment operations | 0.34 | 0.56 | (0.12) | 0.88 | 1.23 | (1.04) | 0.96 |
Less distributions | |||||||
From net investment income | (0.22) | (0.39) | (0.06) | (0.35) | (0.34) | (0.37) | (0.49) |
From net realized gain | — | (0.27) | — | — | — | (0.48) | (0.43) |
Total distributions | (0.22) | (0.66) | (0.06) | (0.35) | (0.34) | (0.85) | (0.92) |
Net asset value, end of period | $11.18 | $11.06 | $11.16 | $11.34 | $10.81 | $9.92 | $11.81 |
Total return (%)4 | 3.125 | 5.31 | (1.03)5 | 8.22 | 12.66 | (8.94) | 8.56 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $330 | $351 | $477 | $483 | $2 | $1 | $—6 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 0.887 | 0.88 | 0.897 | 0.87 | 0.87 | 1.45 | 6.51 |
Expenses including reductions | 0.747 | 0.74 | 0.747 | 0.74 | 0.85 | 0.85 | 0.87 |
Net investment income | 4.097 | 3.57 | 4.137 | 2.61 | 2.85 | 3.48 | 3.32 |
Portfolio turnover (%) | 13 | 16 | 2 | 19 | 25 | 33 | 23 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
5 | Not annualized. |
6 | Less than $500,000. |
7 | Annualized. |
22 | JOHN HANCOCK Global Shareholder Yield Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS NAV SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $11.06 | $11.17 | $11.34 | $10.81 | $9.92 | $11.82 | $11.78 |
Net investment income3 | 0.23 | 0.39 | 0.04 | 0.36 | 0.32 | 0.37 | 0.41 |
Net realized and unrealized gain (loss) on investments | 0.12 | 0.16 | (0.15) | 0.52 | 0.91 | (1.42) | 0.55 |
Total from investment operations | 0.35 | 0.55 | (0.11) | 0.88 | 1.23 | (1.05) | 0.96 |
Less distributions | |||||||
From net investment income | (0.22) | (0.39) | (0.06) | (0.35) | (0.34) | (0.37) | (0.49) |
From net realized gain | — | (0.27) | — | — | — | (0.48) | (0.43) |
Total distributions | (0.22) | (0.66) | (0.06) | (0.35) | (0.34) | (0.85) | (0.92) |
Net asset value, end of period | $11.19 | $11.06 | $11.17 | $11.34 | $10.81 | $9.92 | $11.82 |
Total return (%)4 | 3.115 | 5.30 | (0.94)5 | 8.11 | 12.76 | (9.03) | 8.57 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $447 | $458 | $511 | $514 | $535 | $554 | $696 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 0.876 | 0.87 | 0.886 | 0.86 | 0.86 | 0.86 | 0.88 |
Expenses including reductions | 0.746 | 0.74 | 0.746 | 0.74 | 0.85 | 0.85 | 0.87 |
Net investment income | 4.086 | 3.54 | 4.136 | 3.19 | 3.03 | 3.45 | 3.42 |
Portfolio turnover (%) | 13 | 16 | 2 | 19 | 25 | 33 | 23 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
5 | Not annualized. |
6 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 23 |
Notes to financial statements (unaudited) |
24 | JOHN HANCOCK Global Shareholder Yield Fund | SEMIANNUAL REPORT |
Total value at 9-30-19 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
Investments in securities: | ||||
Assets | ||||
Common stocks | ||||
Australia | $34,536,996 | — | $34,536,996 | — |
Canada | 120,122,414 | $120,122,414 | — | — |
France | 142,012,955 | — | 142,012,955 | — |
Germany | 119,500,091 | — | 119,500,091 | — |
Italy | 64,963,544 | — | 64,963,544 | — |
Japan | 32,144,331 | — | 32,144,331 | — |
Netherlands | 27,283,978 | 27,283,978 | — | — |
Norway | 19,671,031 | — | 19,671,031 | — |
South Korea | 15,185,402 | — | 15,185,402 | — |
Spain | 12,108,909 | — | 12,108,909 | — |
Sweden | 10,063,984 | — | 10,063,984 | — |
Switzerland | 57,564,250 | — | 57,564,250 | — |
Taiwan | 12,253,941 | 12,253,941 | — | — |
United Kingdom | 186,580,473 | 36,182,684 | 150,397,789 | — |
United States | 1,056,051,263 | 1,056,051,263 | — | — |
SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 25 |
Total value at 9-30-19 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
Securities lending collateral | $43,223,450 | $43,223,450 | — | — |
Total investments in securities | $1,953,267,012 | $1,295,117,730 | $658,149,282 | — |
26 | JOHN HANCOCK Global Shareholder Yield Fund | SEMIANNUAL REPORT |
SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 27 |
28 | JOHN HANCOCK Global Shareholder Yield Fund | SEMIANNUAL REPORT |
Class | Expense reduction |
Class A | $327,627 |
Class B | 2,046 |
Class C | 51,672 |
Class I | 601,381 |
Class | Expense reduction |
Class R2 | $509 |
Class R6 | 241,474 |
Class NAV | 297,451 |
Total | $1,522,160 |
SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 29 |
Class | Rule 12b-1 Fee |
Class A | 0.30% |
Class B | 1.00% |
Class C | 1.00% |
Class R2 | 0.25% |
Class | Distribution and service fees | Transfer agent fees |
Class A | $495,053 | $193,653 |
Class B | 14,139 | 1,650 |
Class C | 350,398 | 41,073 |
Class I | — | 477,628 |
Class R2 | 1,795 | 46 |
Class R6 | — | 19,808 |
Total | $861,385 | $733,858 |
30 | JOHN HANCOCK Global Shareholder Yield Fund | SEMIANNUAL REPORT |
Six Months Ended 9-30-19 | Year Ended 3-31-19 | |||
Shares | Amount | Shares | Amount | |
Class A shares | ||||
Sold | 2,203,916 | $24,273,099 | 5,161,275 | $56,794,764 |
Distributions reinvested | 533,898 | 5,935,204 | 1,729,739 | 18,423,338 |
Repurchased | (3,266,448) | (35,966,839) | (7,845,691) | (86,052,357) |
Net decrease | (528,634) | $(5,758,536) | (954,677) | $(10,834,255) |
Class B shares | ||||
Sold | 603 | $6,649 | 4,751 | $53,547 |
Distributions reinvested | 2,834 | 31,548 | 18,486 | 196,711 |
Repurchased | (137,811) | (1,516,484) | (290,776) | (3,181,473) |
Net decrease | (134,374) | $(1,478,287) | (267,539) | $(2,931,215) |
Class C shares | ||||
Sold | 96,688 | $1,067,923 | 274,532 | $3,029,238 |
Distributions reinvested | 87,138 | 969,853 | 368,049 | 3,918,414 |
Repurchased | (1,083,431) | (11,922,490) | (3,370,446) | (37,274,570) |
Net decrease | (899,605) | $(9,884,714) | (2,727,865) | $(30,326,918) |
Class I shares | ||||
Sold | 6,480,906 | $71,698,713 | 12,921,368 | $142,302,285 |
Distributions reinvested | 1,383,587 | 15,436,300 | 4,441,626 | 47,545,936 |
Repurchased | (11,605,483) | (128,723,257) | (22,619,195) | (249,211,116) |
Net decrease | (3,740,990) | $(41,588,244) | (5,256,201) | $(59,362,895) |
Class R2 shares | ||||
Sold | 2,574 | $28,478 | 11,527 | $127,833 |
Distributions reinvested | 1,192 | 13,317 | 5,270 | 56,283 |
Repurchased | (8,375) | (92,927) | (48,362) | (535,315) |
Net decrease | (4,609) | $(51,132) | (31,565) | $(351,199) |
Class R6 shares | ||||
Sold | 2,390,450 | $26,364,031 | 6,476,957 | $71,621,251 |
Distributions reinvested | 603,312 | 6,720,892 | 2,295,625 | 24,540,724 |
Repurchased | (5,272,933) | (58,210,365) | (19,726,348) | (215,104,129) |
Net decrease | (2,279,171) | $(25,125,442) | (10,953,766) | $(118,942,154) |
SEMIANNUAL REPORT | JOHN HANCOCK GLOBAL SHAREHOLDER YIELD FUND | 31 |
Six Months Ended 9-30-19 | Year Ended 3-31-19 | |||
Shares | Amount | Shares | Amount | |
Class NAV shares | ||||
Sold | 16,199 | $178,066 | 352,106 | $3,936,930 |
Distributions reinvested | 815,230 | 9,089,809 | 2,605,631 | 27,887,901 |
Repurchased | (2,229,552) | (24,830,849) | (7,312,294) | (81,146,295) |
Net decrease | (1,398,123) | $(15,562,974) | (4,354,557) | $(49,321,464) |
Total net decrease | (8,985,506) | $(99,449,329) | (24,546,170) | $(272,070,100) |
Fund | Affiliated Concentration |
John Hancock Funds II Multimanager Lifestyle Growth Portfolio | 7.1% |
John Hancock Funds II Multimanager Lifestyle Balanced Portfolio | 6.9% |
Dividends and distributions | |||||||||
Affiliate | Beginning share amount | Shares purchased | Shares sold | Ending share amount | Income distributions received | Capital gain distributions received | Realized gain (loss) | Change in unrealized appreciation (depreciation) | Ending value |
John Hancock Collateral Trust* | 2,852,238 | 52,478,155 | (51,010,942) | 4,319,451 | — | — | $(5,945) | $1,277 | $43,223,450 |
* | Refer to the Securities lending note within Note 2 for details regarding this investment. |
32 | JOHN HANCOCK Global Shareholder Yield Fund | SEMIANNUAL REPORT |
CONTINUATION OF INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS
Evaluation of Advisory and Subadvisory Agreements by the Board of Trustees
This section describes the evaluation by the Board of Trustees (the Board) of John Hancock Funds III (the Trust) of the Advisory Agreement (the Advisory Agreement) with John Hancock Investment Management, LLC (the Advisor, formerly John Hancock Advisers, LLC) and the Subadvisory Agreement (the Subadvisory Agreement) with Epoch Investment Partners, Inc. (the Subadvisor), for John Hancock Global Shareholder Yield Fund (the fund). The Advisory Agreement and Subadvisory Agreement are collectively referred to as the Agreements. Prior to the June23-26, 2019 in-person meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the Agreements at an in-person meeting held on May28-30, 2019.
Approval of Advisory and Subadvisory Agreements
At in-person meetings held on June 23-26, 2019, the Board, including the Trustees who are not parties to any Agreement or considered to be interested persons of the Trust under the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees), reapproved for an annual period the continuation of the Advisory Agreement between the Trust and the Advisor and the Subadvisory Agreement between the Advisor and the Subadvisor with respect to the fund.
In considering the Advisory Agreement and the Subadvisory Agreement, the Board received in advance of the meetings a variety of materials relating to the fund, the Advisor and the Subadvisor, including comparative performance, fee and expense information for a peer group of similar funds prepared by an independent third-party provider of fund data, performance information for an applicable benchmark index; and, with respect to the Subadvisor, comparative performance information for comparably managed accounts, as applicable, and other information provided by the Advisor and the Subadvisor regarding the nature, extent and quality of services provided by the Advisor and the Subadvisor under their respective Agreements, as well as information regarding the Advisor's revenues and costs of providing services to the fund and any compensation paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreement are considered, particular focus is given to information concerning fund performance, comparability of fees and total expenses, and profitability. However, the Board notes that the evaluation process with respect to the Advisor and the Subadvisor is an ongoing one. In this regard, the Board also took into account discussions with management and information provided to the Board (including its various committees) at prior meetings with respect to the services provided by the Advisor and the Subadvisor to the fund, including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisor with respect to the fund. The information received and considered by the Board in connection with the May and June meetings and throughout the year was both written and oral. The Board also considered the nature, quality, and extent of non-advisory services, if any, to be provided to the fund by the Advisor's affiliates, including distribution services. The Board considered the Advisory Agreement and the Subadvisory Agreement separately in the course of its review. In doing so, the Board noted the respective roles of the Advisor and Subadvisor in providing services to the fund.
Throughout the process, the Board asked questions of and requested additional information from management. The Board is assisted by counsel for the Trust and the Independent Trustees are also separately assisted by independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements and discussed the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement with respect to the fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets, and the industry) and did not treat any single factor as determinative, and each Trustee may have attributed different weights to different factors. The Board's conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board's ongoing regular review of fund performance and operations throughout the year.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the fund, the Board reviewed information provided by the Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor's compliance and regulatory history, including its Form ADV. The Board also noted that on a regular basis it receives and reviews information from the Trust's Chief Compliance Officer (CCO) regarding the fund's compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board observed that the scope of services provided by the Advisor, and of the undertakings required of the Advisor in connection with those services, including maintaining and monitoring its own and the fund's compliance programs, risk management programs, liquidity management programs and cybersecurity programs, had expanded over time as a result of regulatory, market and other developments. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the fund, including, but not limited to, general supervision of and coordination of the services provided by the Subadvisor, and is also responsible for monitoring and reviewing the activities of the Subadvisor and other third-party service providers. The Board also considered the significant risks assumed by the Advisor in connection with the services provided to the fund including entrepreneurial risk in sponsoring new funds and ongoing risks including investment, operational, enterprise, litigation, regulatory and compliance risks with respect to all funds.
In considering the nature, extent, and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor's management and the quality of the performance of the Advisor's duties, through Board meetings, discussions and reports during the preceding year and through each Trustee's experience as a Trustee of the Trust and of the other trusts in the John Hancock group of funds complex (the John Hancock Fund Complex).
In the course of their deliberations regarding the Advisory Agreement, the Board considered, among other things:
(e) | the financial condition of the Advisor and whether it has the financial wherewithal to provide a high level and quality of services to the fund; |
(f) | the Advisor's initiatives intended to improve various aspects of the Trust's operations and investor experience with the fund; and |
(g) | the Advisor's reputation and experience in serving as an investment advisor to the Trust and the benefit to shareholders of investing in funds that are part of a family of funds offering a variety of investments. |
The Board concluded that the Advisor may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the fund.
Investment performance.In considering the fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the fund's performance results. In connection with the consideration of the Advisory Agreement, the Board:
(a) | reviewed information prepared by management regarding the fund's performance; |
(b) | considered the comparative performance of an applicable benchmark index; |
(c) | considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; and |
(d) | took into account the Advisor's analysis of the fund's performance and its plans and recommendations regarding the Trust's subadvisory arrangements generally. |
The Board noted that while it found the data provided by the independent third-party generally useful it recognized its limitations, including in particular that the data may vary depending on the end date selected and that the results of the performance comparisons may vary depending on the selection of the peer group. The Board noted that the fund underperformed its benchmark index for the one-, three-,five- and ten-year periods ended December 31, 2018. The Board also noted that the fund outperformed its peer group average for the one-year period and underperformed its peer group average for the three-, five- and ten-year periods ended December 31, 2018. The Board took into account management's discussion of the fund's performance, including favorable performance relative to the peer group for the one-year period. The Board concluded that the fund's performance is being monitored and reasonably addressed, where appropriate.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of fund data, including, among other data, the fund's contractual and net management fees (and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the fund in light of the nature, extent and quality of the management and advisory and subadvisory services provided by the Advisor and the Subadvisor. The Board considered the fund's ranking within a smaller group of peer funds chosen by the independent third-party provider, as well as the fund's ranking within a broader group of funds. In comparing the fund's contractual and net management fees to those of comparable funds, the Board noted that such fees include both advisory and administrative costs. The Board noted that net management fees and total expenses for the fund are lower than the peer group median.
The Board took into account management's discussion with respect to the overall management fee and the fees of the Subadvisor, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee, in each case in light of the services rendered for those amounts and the risks undertaken by the Advisor. The Board also noted that the Advisor pays the subadvisory fee, and that such fees are negotiated at arm's length with respect to the
Subadvisor. The Board also took into account that management had agreed to implement an overall fee waiver across the complex, including the fund, which is discussed further below. The Board also noted that, in addition, the Advisor is currently waiving fees and/or reimbursing expenses with respect to the fund. The Board reviewed information provided by the Advisor concerning investment advisory fees charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the complex) having similar investment mandates, if any. The Board considered any differences between the Advisor's and a Subadvisor's services to the fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee paid with respect to the fund is reasonable in light of the nature, extent and quality of the services provided to the fund under the Advisory Agreement.
Profitability/Fall out benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor's relationship with the Trust, the Board:
(a) | reviewed financial information of the Advisor; |
(b) | reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to the fund; |
(c) | received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole and with respect to the fund; |
(d) | received information with respect to the Advisor's allocation methodologies used in preparing the profitability data and considered that the Advisor hired an independent third-party consultant to provide an analysis of the Advisor's allocation methodologies; |
(e) | considered that the John Hancock insurance companies that are affiliates of the Advisor, as shareholders of the Trust directly or through their separate accounts, receive certain tax credits or deductions relating to foreign taxes paid and dividends received by certain funds of the Trust and noted that these tax benefits, which are not available to participants in qualified retirement plans under applicable income tax law, are reflected in the profitability information reviewed by the Board; |
(f) | considered that the Advisor also provides administrative services to the fund on a cost basis pursuant to an administrative services agreement; |
(g) | noted that affiliates of the Advisor provide transfer agency services and distribution services to the fund, and that the fund's distributor also receives Rule 12b-1 payments to support distribution of the fund; |
(h) | noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the fund; |
(i) | noted that the subadvisory fee for the fund is paid by the Advisor and is negotiated at arm's length; |
(j) | considered the Advisor's ongoing costs and expenditures necessary to improve services, meet new regulatory and compliance requirements, and adapt to other challenges impacting the fund industry; and |
(k) | considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the fund and the risks that it assumes as Advisor, including entrepreneurial, operational, reputational, litigation and regulatory risk. |
Based upon its review, the Board concluded that the level of profitability, if any, of the Advisor and its affiliates from their relationship with the fund was reasonable and not excessive.
Economies of scale. In considering the extent to which economies of scale would be realized as the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders, the Board:
(a) | considered that the Advisor has contractually agreed to waive a portion of its management fee for certain funds of the John Hancock Fund Complex, including the fund (the participating portfolios) or otherwise reimburse the expenses of the participating portfolios (the reimbursement). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund; |
(b) | the Board also took into account management's discussion of the fund's advisory fee structure; and |
(c) | the Board also considered the effect of the fund's growth in size on its performance and fees. The Board also noted that if the fund's assets increase over time, the fund may realize other economies of scale. |
Approval of Subadvisory Agreement
In making its determination with respect to approval of the Subadvisory Agreement, the Board reviewed:
(1) | information relating to the Subadvisor's business, including current subadvisory services to the Trust (and other funds in the John Hancock Fund Complex); |
(2) | the historical and current performance of the fund and comparative performance information relating to an applicable benchmark index and comparable funds; |
(3) | the subadvisory fee for the fund, including any breakpoints, and to the extent available, comparable fee information prepared by an independent third party provider of fund data; and |
(4) | information relating to the nature and scope of any material relationships and their significance to the Trust's Advisor and Subadvisor. |
Nature, extent, and quality of services. With respect to the services provided by the Subadvisor, the Board received information provided to the Board by the Subadvisor, including the Subadvisor's Form ADV, as well as took into account information presented throughout the past year. The Board considered the Subadvisor's current level of staffing and its overall resources, as well as received information relating to the Subadvisor's compensation program. The Board reviewed the Subadvisor's history and investment experience, as well as information regarding the qualifications, background, and responsibilities of the Subadvisor's investment and compliance personnel who provide services to the fund. The Board also considered, among other things, the Subadvisor's compliance program and any disciplinary history. The Board also considered the Subadvisor's risk assessment and monitoring process. The Board reviewed the Subadvisor's regulatory history, including whether it was involved in any regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular, periodic reviews of the Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust's CCO and his staff conduct regular, periodic compliance reviews with the Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of the Subadvisor and procedures reasonably designed to assure compliance with the federal securities laws. The Board also took into account the financial condition of the Subadvisor.
The Board considered the Subadvisor's investment process and philosophy. The Board took into account that the Subadvisor's responsibilities include the development and maintenance of an investment program for the fund that is
consistent with the fund's investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services. The Board also received information with respect to the Subadvisor's brokerage policies and practices, including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the fund, the Board noted that the fees under the Subadvisory Agreement are paid by the Advisor and not the fund.
The Board also relied on the ability of the Advisor to negotiate the Subadvisory Agreement with the Subadvisor, which is not affiliated with the Advisor, and the fees thereunder at arm's length. As a result, the costs of the services to be provided and the profits to be realized by the Subadvisor from its relationship with the Trust were not a material factor in the Board's consideration of the Subadvisory Agreement.
The Board also received information regarding the nature and scope (including their significance to the Advisor and its affiliates and to the Subadvisor) of any material relationships with respect to the Subadvisor, which include arrangements in which the Subadvisor or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreement.
In addition, the Board considered other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor's relationship with the fund, such as the opportunity to provide advisory services to additional funds in the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays a subadvisory fee to the Subadvisor. As noted above, the Board also considered the fund's subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the fund as included in the report prepared by the independent third party provider of fund data, to the extent available. The Board noted that the limited size of the Lipper peer group was not sufficient for comparative purposes. The Board also took into account the subadvisory fees paid by the Advisor to the Subadvisor with respect to the fund and compared them to fees charged by the Subadvisor to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered the fund's performance as compared to the fund's peer group and the benchmark index and noted that the Board reviews information about the fund's performance results at its regularly scheduled meetings. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor. The Board was mindful of the Advisor's focus on the Subadvisor's performance. The Board also noted the Subadvisor's long-term performance record for similar accounts, as applicable.
The Board's decision to approve the Subadvisory Agreement was based on a number of determinations, including the following:
(1) | the Subadvisor has extensive experience and demonstrated skills as a manager; |
(2) | the performance of the fund is being monitored and reasonably addressed, where appropriate; |
(3) | the subadvisory fee is reasonable in relation to the level and quality of services being provided under the Subadvisory Agreement; and |
(4) | noted that the subadvisory fees are paid by the Advisor not the fund. |
* * *
Based on the Board's evaluation of all factors that the Board deemed to be material, including those factors described above, the Board, including the Independent Trustees, concluded that renewal of the Advisory Agreement and the Subadvisory Agreement would be in the best interest of the fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreement for an additional one-year period.
Trustees Hassell H. McClellan,Chairperson Officers Andrew G. Arnott Francis V. Knox, Jr. Charles A. Rizzo Salvatore Schiavone Christopher (Kit) Sechler | Investment advisor John Hancock Investment Management LLC Subadvisor Epoch Investment Partners, Inc. Portfolio Managers William W. Priest, CFA Principal distributor John Hancock Investment Management Distributors LLC Custodian Citibank, N.A. Transfer agent John Hancock Signature Services, Inc. Legal counsel K&L Gates LLP |
* Member of the Audit Committee
† Non-Independent Trustee
The fund's proxy voting policies and procedures, as well as the fund proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.
All of the fund's holdings as of the end of the third month of every fiscal quarter are filed with the SEC on Form N-PORT within 60 days of the end of the fiscal quarter. The fund's Form N-PORT filings are available on our website and the SEC's website, sec.gov.
We make this information on your fund, as well asmonthly portfolio holdings, and other fund details available on our website at jhinvestments.com or by calling 800-225-5291.
You can also contact us: | |||
800-225-5291 jhinvestments.com | Regular mail: John Hancock Signature Services, Inc. | Express mail: John Hancock Signature Services, Inc. |
John Hancock family of funds
DOMESTIC EQUITY FUNDS Blue Chip Growth Classic Value Disciplined Value Disciplined Value Mid Cap Equity Income Financial Industries Fundamental All Cap Core Fundamental Large Cap Core New Opportunities Regional Bank Small Cap Core Small Cap Growth Small Cap Value U.S. Global Leaders Growth U.S. Quality Growth GLOBAL AND INTERNATIONAL EQUITY FUNDS Disciplined Value International Emerging Markets Emerging Markets Equity Fundamental Global Franchise Global Equity Global Shareholder Yield Global Thematic Opportunities International Dynamic Growth International Growth International Small Company | INCOME FUNDS Bond California Tax-Free Income Emerging Markets Debt Floating Rate Income Government Income High Yield High Yield Municipal Bond Income Investment Grade Bond Money Market Short Duration Bond Short Duration Credit Opportunities Strategic Income Opportunities Tax-Free Bond ALTERNATIVE AND SPECIALTY FUNDS Absolute Return Currency Alternative Asset Allocation Disciplined Alternative Yield Diversified Macro Infrastructure Multi-Asset Absolute Return Seaport Long/Short |
A fund's investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. To obtain a prospectus, contact your financial professional, call John Hancock Investment Management at 800-225-5291, or visit our website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
ASSET ALLOCATION Balanced Income Allocation Multi-Index Lifetime Portfolios Multi-Index Preservation Portfolios Multimanager Lifestyle Portfolios Multimanager Lifetime Portfolios Retirement Income 2040 EXCHANGE-TRADED FUNDS John Hancock Multifactor Consumer Discretionary ETF John Hancock Multifactor Consumer Staples ETF John Hancock Multifactor Developed International ETF John Hancock Multifactor Emerging Markets ETF John Hancock Multifactor Energy ETF John Hancock Multifactor Financials ETF John Hancock Multifactor Healthcare ETF John Hancock Multifactor Industrials ETF John Hancock Multifactor Large Cap ETF John Hancock Multifactor Materials ETF John Hancock Multifactor Media and John Hancock Multifactor Mid Cap ETF John Hancock Multifactor Small Cap ETF John Hancock Multifactor Technology ETF John Hancock Multifactor Utilities ETF | ENVIRONMENTAL, SOCIAL, AND ESG All Cap Core ESG Core Bond ESG International Equity ESG Large Cap Core CLOSED-END FUNDS Financial Opportunities Hedged Equity & Income Income Securities Trust Investors Trust Preferred Income Preferred Income II Preferred Income III Premium Dividend Tax-Advantaged Dividend Income Tax-Advantaged Global Shareholder Yield |
John Hancock Multifactor ETF shares are bought and sold at market price (not NAV), and are not individually redeemed
from the fund. Brokerage commissions will reduce returns.
John Hancock ETFs are distributed by Foreside Fund Services, LLC, and are subadvised by Dimensional Fund Advisors LP.
Foreside is not affiliated with John Hancock Investment Management Distributors LLC or Dimensional Fund Advisors LP.
Dimensional Fund Advisors LP receives compensation from John Hancock in connection with licensing rights to the
John Hancock Dimensional indexes. Dimensional Fund Advisors LP does not sponsor, endorse, or sell, and makes no
representation as to the advisability of investing in, John Hancock Multifactor ETFs.
John Hancock Investment Management
A trusted brand
John Hancock Investment Management is a premier asset manager
representing one of America's most trusted brands, with a heritage of
financial stewardship dating back to 1862. Helping our shareholders
pursue their financial goals is at the core of everything we do. It's why
we support the role of professional financial advice and operate with
the highest standards of conduct and integrity.
A better way to invest
We serve investors globally through a unique multimanager approach:
We search the world to find proven portfolio teams with specialized
expertise for every strategy we offer, then we apply robust investment
oversight to ensure they continue to meet our uncompromising
standards and serve the best interests of our shareholders.
Results for investors
Our unique approach to asset management enables us to provide
a diverse set of investments backed by some of the world's best
managers, along with strong risk-adjusted returns across asset classes.
John Hancock Investment Management Distributors LLC n Member FINRA, SIPC
200 Berkeley Street n Boston, MA 02116-5010 n 800-225-5291 n jhinvestments.com
This report is for the information of the shareholders of John Hancock Global Shareholder Yield Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.
MF975096 | 320SA 9/19 11/19 |
John Hancock
International Growth Fund
Semiannual report 9/30/19
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change, and you do not need to take any action. You may elect to receive shareholder reports and other communications electronically by calling John Hancock Investment Management at 800-225-5291 (Class A, Class B and Class C shares) or 888-972-8696 (Class I, Class R2, Class R4, and Class R6) or by contacting your financial intermediary.
You may elect to receive all reports in paper, free of charge, at any time. You can inform John Hancock Investment Management or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by following the instructions listed above. Your election to receive reports in paper will apply to all funds held with John Hancock Investment Management or your financial intermediary.
A message to shareholders
Dear shareholder,
It was a rather volatile time for global stock markets during the six months ended September 30, 2019, with investor uncertainty surrounding global trade, a slowdown in China, and the latest developments on the Brexit front leading to some dramatic swings in performance. Central banks introduced stimulative measures late in the period, with the U.S. Federal Reserve cutting interest rates twice and the European Central Bank rolling out a sweeping package in September.
The economic fundamentals around the globe are relatively mixed today, with the United States appearing fairly healthy, Europe on somewhat less stable footing, and emerging economies on divergent paths. With an uncertain outlook, it's safe to say there are sure to be patches of market turbulence as the year goes on. As always, your best resource in unpredictable markets is your financial advisor, who can help position your portfolio so that it's sufficiently diversified to meet your long-term objectives and to withstand the inevitable bouts of market volatility along the way.
On behalf of everyone at John Hancock Investment Management, I'd like to take this opportunity to welcome new shareholders and thank existing shareholders for the continued trust you've placed in us.
Sincerely,
Andrew G. Arnott
President and CEO,
John Hancock Investment Management
Head of Wealth and Asset Management,
United States and Europe
This commentary reflects the CEO's views as of this report's period end and are subject to change at any time. Diversification does not guarantee investment returns and does not eliminate risk of loss. All investments entail risks, including the possible loss of principal. For more up-to-date information, you can visit our website at jhinvestments.com.
John Hancock
International Growth Fund
INVESTMENT OBJECTIVE
The fund seeks high total return primarily through capital appreciation.
AVERAGE ANNUAL TOTAL RETURNS AS OF 9/30/19 (%)
The MSCI AC World ex-USA Growth Index is a free float-adjusted market capitalization index that is designed to measure the equity performance of growth-oriented stocks in developed (excluding the U.S.) and emerging markets.
The MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Figures from Morningstar, Inc. include reinvested distributions and do not take into account sales charges. Actual load-adjusted performance is lower.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative. Performance of the other share classes will vary based on the difference in the fees and expenses of those classes. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current month-end performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling 800-225-5291. For further information on the fund's objectives, risks, and strategy, see the fund's prospectus.
SECTOR COMPOSITION AS OF 9/30/19 (%)
TOP 10 HOLDINGS AS OF 9/30/19 (%)
Nestle SA | 5.0 |
Taiwan Semiconductor Manufacturing Company, Ltd. | 4.0 |
Alibaba Group Holding, Ltd., ADR | 3.3 |
Tencent Holdings, Ltd. | 3.3 |
AstraZeneca PLC | 2.7 |
Novartis AG | 2.6 |
Unilever NV | 2.5 |
Safran SA | 2.4 |
ASML Holding NV | 2.3 |
Keyence Corp. | 2.3 |
TOTAL | 30.4 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
A note about risks
The fund may be subject to various risks as described in the fund's prospectus. For more information, please refer to the "Principal risks" section of the prospectus.
TOP 10 COUNTRIES AS OF 9/30/19 (%)
United Kingdom | 13.9 |
China | 12.9 |
France | 12.9 |
Switzerland | 11.5 |
Japan | 8.6 |
Netherlands | 8.0 |
Ireland | 6.7 |
Taiwan | 5.4 |
Canada | 3.5 |
India | 3.0 |
TOTAL | 86.4 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
TOTAL RETURNS FOR THE PERIOD ENDED SEPTEMBER 30, 2019
Average annual total returns (%) with maximum sales charge | Cumulative total returns (%) with maximum sales charge | ||||||
1-year | 5-year | 10-year | 6-month | 5-year | 10-year | ||
Class A | -4.37 | 6.52 | 7.93 | -1.70 | 37.15 | 114.44 | |
Class B | -4.94 | 6.53 | 7.84 | -1.89 | 37.23 | 112.73 | |
Class C | -1.01 | 6.86 | 7.68 | 2.12 | 39.32 | 109.66 | |
Class I1 | 0.96 | 7.95 | 8.85 | 3.65 | 46.60 | 133.60 | |
Class R21,2 | 0.59 | 7.51 | 8.43 | 3.43 | 43.66 | 124.60 | |
Class R41,2 | 0.84 | 7.76 | 8.55 | 3.54 | 45.28 | 127.14 | |
Class R61,2 | 1.09 | 8.03 | 8.69 | 3.69 | 47.16 | 130.08 | |
Class 11 | 1.06 | 8.03 | 8.92 | 3.65 | 47.13 | 135.07 | |
Class NAV1,2 | 1.08 | 8.00 | 8.67 | 3.65 | 46.95 | 129.74 | |
Index 1† | 2.03 | 4.86 | 5.82 | 3.47 | 26.81 | 76.02 | |
Index2† | -1.34 | 3.27 | 4.90 | 2.57 | 17.46 | 61.40 |
Performance figures assume all distributions have been reinvested. Figures reflect maximum sales charges on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares' CDSC declines annually between years 1 to 6 according to the following schedule: 5%, 4%, 3%, 3%, 2%, and 1%. No sales charge will be assessed after the sixth year. Class C shares sold within one year of purchase are subject to a 1% CDSC. Sales charges are not applicable to Class I, Class R2, Class R4, Class R6, Class 1, and Class NAV shares.
The expense ratios of the fund, both net (including any fee waivers and/or expense limitations) and gross (excluding any fee waivers and/or expense limitations), are set forth according to the most recent publicly available prospectuses for the fund and may differ from those disclosed in the Financial highlights tables in this report. Net expenses reflect contractual fee waivers and expense limitations in effect until July 31, 2020 and are subject to change. Had the contractual fee waivers and expense limitations not been in place, gross expenses would apply. The expense ratios are as follows:
Class A | Class B | Class C | Class I | Class R2 | Class R4 | Class R6 | Class 1 | Class NAV | |
Gross (%) | 1.29 | 1.99 | 1.99 | 0.99 | 1.39 | 1.24 | 0.89 | 0.92 | 0.87 |
Net (%) | 1.28 | 1.98 | 1.98 | 0.98 | 1.38 | 1.13 | 0.88 | 0.91 | 0.86 |
Please refer to the most recent prospectuses and annual or semiannual report for more information on expenses and any expense limitation arrangements for each class.
The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility and other factors, the fund's current performance may be higher or lower than the performance shown. For current to the most recent month-end performance data, please call 800-225-5291 or visit the fund's website at jhinvestments.com.
The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The fund's performance results reflect any applicable fee waivers or expense reductions, without which the expenses would increase and results would have been less favorable.
† | Index 1 is the MSCI AC World ex-USA Growth Index; Index 2 is the MSCI EAFE Index. |
See the following page for footnotes.
This chart and table show what happened to a hypothetical $10,000 investment in John Hancock International Growth Fund for the share classes and periods indicated, assuming all distributions were reinvested. For comparison, we've shown the same investment in two separate indexes.
Start date | With maximum sales charge ($) | Without sales charge ($) | Index 1 ($) | Index 2 ($) | |
Class B3 | 9-30-09 | 21,273 | 21,273 | 17,602 | 16,140 |
Class C3 | 9-30-09 | 20,966 | 20,966 | 17,602 | 16,140 |
Class I1 | 9-30-09 | 23,360 | 23,360 | 17,602 | 16,140 |
Class R21,2 | 9-30-09 | 22,460 | 22,460 | 17,602 | 16,140 |
Class R41,2 | 9-30-09 | 22,714 | 22,714 | 17,602 | 16,140 |
Class R61,2 | 9-30-09 | 23,008 | 23,008 | 17,602 | 16,140 |
Class 11 | 9-30-09 | 23,507 | 23,507 | 17,602 | 16,140 |
Class NAV1,2 | 9-30-09 | 22,974 | 22,974 | 17,602 | 16,140 |
The MSCI AC World ex-USA Growth Index is a free float-adjusted market capitalization index that is designed to measure the equity performance of growth-oriented stocks in developed (excluding the U.S.) and emerging markets.
The MSCI EAFE Index is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Footnotes related to performance pages
1 | For certain types of investors, as described in the fund's prospectuses. |
2 | Class R2, Class R4, and Class R6 shares were first offered on 3-27-15. Class NAV shares were first offered on 6-2-15. The returns prior to these dates are those of Class A shares that have not been adjusted for class-specific expenses; otherwise, returns would vary. |
3 | The contingent deferred sales charge is not applicable. |
Your expenses |
SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 7 |
Account value on 4-1-2019 | Ending value on 9-30-2019 | Expenses paid during period ended 9-30-20191 | Annualized expense ratio | ||
Class A | Actual expenses/actual returns | $1,000.00 | $1,034.70 | $6.56 | 1.29% |
Hypothetical example | 1,000.00 | 1,018.60 | 6.51 | 1.29% | |
Class B | Actual expenses/actual returns | 1,000.00 | 1,031.10 | 10.10 | 1.99% |
Hypothetical example | 1,000.00 | 1,015.10 | 10.03 | 1.99% | |
Class C | Actual expenses/actual returns | 1,000.00 | 1,031.20 | 10.11 | 1.99% |
Hypothetical example | 1,000.00 | 1,015.10 | 10.03 | 1.99% | |
Class I | Actual expenses/actual returns | 1,000.00 | 1,036.50 | 5.04 | 0.99% |
Hypothetical example | 1,000.00 | 1,020.10 | 5.00 | 0.99% | |
Class R2 | Actual expenses/actual returns | 1,000.00 | 1,034.30 | 7.02 | 1.38% |
Hypothetical example | 1,000.00 | 1,018.10 | 6.96 | 1.38% | |
Class R4 | Actual expenses/actual returns | 1,000.00 | 1,035.40 | 5.75 | 1.13% |
Hypothetical example | 1,000.00 | 1,019.40 | 5.70 | 1.13% | |
Class R6 | Actual expenses/actual returns | 1,000.00 | 1,036.90 | 4.48 | 0.88% |
Hypothetical example | 1,000.00 | 1,020.60 | 4.45 | 0.88% | |
Class 1 | Actual expenses/actual returns | 1,000.00 | 1,036.50 | 4.68 | 0.92% |
Hypothetical example | 1,000.00 | 1,020.40 | 4.65 | 0.92% | |
Class NAV | Actual expenses/actual returns | 1,000.00 | 1,036.50 | 4.43 | 0.87% |
Hypothetical example | 1,000.00 | 1,020.70 | 4.40 | 0.87% |
1 | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). |
8 | JOHN HANCOCK INTERNATIONAL GROWTH FUND | SEMIANNUAL REPORT |
Fund’s investments |
Shares | Value | ||||
Common stocks 99.6% | $9,159,289,723 | ||||
(Cost $7,470,995,206) | |||||
Australia 1.1% | 101,796,756 | ||||
Qantas Airways, Ltd. | 23,953,966 | 101,796,756 | |||
Canada 3.5% | 319,191,799 | ||||
Canadian National Railway Company | 2,026,183 | 181,933,600 | |||
Dollarama, Inc. | 3,833,998 | 137,258,199 | |||
China 12.9% | 1,186,958,317 | ||||
Alibaba Group Holding, Ltd., ADR (A) | 1,802,276 | 301,394,616 | |||
China Tower Corp., Ltd., H Shares (B) | 580,786,642 | 131,808,770 | |||
Midea Group Company, Ltd., Class A | 12,296,615 | 88,159,008 | |||
Ping An Insurance Group Company of China, Ltd., H Shares | 11,520,392 | 132,412,117 | |||
Shenzhou International Group Holdings, Ltd. | 10,030,500 | 130,850,912 | |||
TAL Education Group, ADR (A) | 2,950,754 | 101,033,817 | |||
Tencent Holdings, Ltd. (C) | 7,203,300 | 301,299,077 | |||
Denmark 2.3% | 211,246,069 | ||||
Carlsberg A/S, Class B | 698,742 | 103,258,744 | |||
DSV A/S | 1,136,110 | 107,987,325 | |||
France 12.9% | 1,181,711,344 | ||||
Airbus SE | 1,464,811 | 190,174,908 | |||
Alstom SA | 2,547,372 | 105,520,710 | |||
Capgemini SE | 908,604 | 106,989,544 | |||
Edenred | 3,140,331 | 150,641,529 | |||
Kering SA (C) | 245,931 | 125,323,152 | |||
LVMH Moet Hennessy Louis Vuitton SE | 466,630 | 185,140,695 | |||
Safran SA | 1,423,005 | 224,053,431 | |||
Worldline SA (A)(B)(C) | 1,490,033 | 93,867,375 | |||
Germany 2.2% | 205,928,685 | ||||
adidas AG | 661,574 | 205,928,685 | |||
Hong Kong 2.0% | 186,149,354 | ||||
AIA Group, Ltd. | 19,737,925 | 186,149,354 | |||
India 3.0% | 276,481,340 | ||||
HDFC Bank, Ltd. | 8,724,762 | 151,202,125 | |||
ICICI Bank, Ltd. | 20,553,157 | 125,279,215 | |||
Indonesia 0.9% | 82,117,395 | ||||
Bank Mandiri Persero Tbk PT | 166,954,000 | 82,117,395 | |||
Ireland 6.7% | 612,622,082 | ||||
Accenture PLC, Class A (C) | 881,870 | 169,627,695 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 9 |
Shares | Value | ||||
Ireland (continued) | |||||
Experian PLC | 5,235,330 | $167,420,432 | |||
ICON PLC (A) | 839,839 | 123,741,878 | |||
Medtronic PLC | 1,397,828 | 151,832,077 | |||
Japan 8.6% | 791,643,487 | ||||
Bandai Namco Holdings, Inc. | 2,538,500 | 158,294,736 | |||
Hoya Corp. | 2,419,800 | 198,188,705 | |||
Keyence Corp. | 333,700 | 207,713,601 | |||
Nexon Company, Ltd. (A) | 8,544,300 | 103,814,747 | |||
Tokyo Electron, Ltd. | 643,500 | 123,631,698 | |||
Netherlands 8.0% | 736,186,235 | ||||
ASML Holding NV | 846,836 | 210,027,433 | |||
Heineken NV (C) | 1,178,329 | 127,274,306 | |||
Koninklijke Philips NV | 3,249,927 | 150,176,638 | |||
QIAGEN NV (A) | 2,825,121 | 92,519,312 | |||
Wolters Kluwer NV | 2,140,587 | 156,188,546 | |||
Singapore 1.2% | 110,404,034 | ||||
DBS Group Holdings, Ltd. | 6,102,666 | 110,404,034 | |||
South Korea 1.7% | 157,583,244 | ||||
SK Hynix, Inc. | 2,294,445 | 157,583,244 | |||
Spain 1.8% | 169,145,659 | ||||
Cellnex Telecom SA (A)(B) | 4,095,170 | 169,145,659 | |||
Switzerland 11.5% | 1,059,971,331 | ||||
Logitech International SA | 2,218,797 | 90,166,172 | |||
Nestle SA | 4,209,167 | 456,503,276 | |||
Novartis AG | 2,747,240 | 238,424,693 | |||
Partners Group Holding AG | 194,510 | 149,375,201 | |||
Temenos AG (A) | 749,489 | 125,501,989 | |||
Taiwan 5.4% | 495,672,111 | ||||
MediaTek, Inc. | 10,845,000 | 129,030,617 | |||
Taiwan Semiconductor Manufacturing Company, Ltd. | 41,281,323 | 366,641,494 | |||
United Kingdom 13.9% | 1,274,480,481 | ||||
Aon PLC | 798,328 | 154,532,351 | |||
AstraZeneca PLC | 2,768,487 | 247,194,443 | |||
Compass Group PLC | 6,363,802 | 163,757,122 | |||
Diageo PLC | 4,301,020 | 175,697,145 | |||
IHS Markit, Ltd. (A) | 2,566,729 | 171,662,836 | |||
Smith & Nephew PLC | 5,287,205 | 127,325,373 | |||
Unilever NV | 3,902,090 | 234,311,211 |
10 | JOHN HANCOCK INTERNATIONAL GROWTH FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Yield (%) | Shares | Value | |||
Securities lending collateral 0.4% | $37,102,286 | ||||
(Cost $37,101,756) | |||||
John Hancock Collateral Trust (D) | 2.1169(E) | 3,707,744 | 37,102,286 | ||
Par value^ | Value | ||||
Short-term investments 0.3% | $26,500,000 | ||||
(Cost $26,500,000) | |||||
Repurchase agreement 0.3% | 26,500,000 | ||||
Bank of America Corp. Tri-Party Repurchase Agreement dated 9-30-19 at 2.320% to be repurchased at $16,501,063 on 10-1-19, collateralized by $15,551,666 Government National Mortgage Association, 2.863%-5.298% due 10-20-67 to 8-20-69 (valued at $16,830,001, including interest) | 16,500,000 | 16,500,000 | |||
Societe Generale SA Tri-Party Repurchase Agreement dated 9-30-19 at 2.320% to be repurchased at $10,000,644 on 10-1-19, collateralized by $3,819,762 Federal National Mortgage Association, 3.500% due 6-1-49 (valued at $3,934,960, including interest), $2,100 U.S. Treasury Bills, 0.000% due 1-2-20 to 2-6-20 (valued at $2,088, including interest) and $6,107,100 U.S. Treasury Notes, 2.000%-2.125% due 10-31-22 to 8-15-25 (valued at $6,262,955, including interest) | 10,000,000 | 10,000,000 |
Total investments (Cost $7,534,596,962) 100.3% | $9,222,892,009 | ||||
Other assets and liabilities, net (0.3%) | (28,314,647) | ||||
Total net assets 100.0% | $9,194,577,362 |
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund. | |
^All par values are denominated in U.S. dollars unless otherwise indicated. | |
Security Abbreviations and Legend | |
ADR | American Depositary Receipt |
(A) | Non-income producing security. |
(B) | These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. |
(C) | All or a portion of this security is on loan as of 9-30-19. |
(D) | Investment is an affiliate of the fund, the advisor and/or subadvisor. This security represents the investment of cash collateral received for securities lending. |
(E) | The rate shown is the annualized seven-day yield as of 9-30-19. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 11 |
Financial statements |
Assets | |
Unaffiliated investments, at value (Cost $7,497,495,206) including $35,344,551 of securities loaned | $9,185,789,723 |
Affiliated investments, at value (Cost $37,101,756) | 37,102,286 |
Total investments, at value (Cost $7,534,596,962) | 9,222,892,009 |
Cash | 97,840 |
Foreign currency, at value (Cost $903,957) | 903,575 |
Dividends and interest receivable | 17,198,363 |
Receivable for fund shares sold | 10,198,468 |
Receivable for securities lending income | 19,751 |
Other assets | 251,726 |
Total assets | 9,251,561,732 |
Liabilities | |
Foreign capital gains tax payable | 6,368,736 |
Payable for investments purchased | 25 |
Payable for fund shares repurchased | 11,031,217 |
Payable upon return of securities loaned | 37,104,411 |
Payable to affiliates | |
Accounting and legal services fees | 785,048 |
Transfer agent fees | 636,399 |
Distribution and service fees | 7,777 |
Trustees' fees | 2,274 |
Other liabilities and accrued expenses | 1,048,483 |
Total liabilities | 56,984,370 |
Net assets | $9,194,577,362 |
Net assets consist of | |
Paid-in capital | $7,911,119,201 |
Total distributable earnings (loss) | 1,283,458,161 |
Net assets | $9,194,577,362 |
12 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Net asset value per share | |
Based on net asset value and shares outstanding - the fund has an unlimited number of shares authorized with no par value | |
Class A ($562,444,242 ÷ 20,290,925 shares)1 | $27.72 |
Class B ($782,629 ÷ 28,830 shares)1 | $27.15 |
Class C ($235,521,154 ÷ 8,694,143 shares)1 | $27.09 |
Class I ($5,515,576,425 ÷ 198,283,730 shares) | $27.82 |
Class R2 ($35,962,827 ÷ 1,296,501 shares) | $27.74 |
Class R4 ($7,342,367 ÷ 264,233 shares) | $27.79 |
Class R6 ($1,763,275,303 ÷ 63,319,618 shares) | $27.85 |
Class 1 ($76,209,051 ÷ 2,740,559 shares) | $27.81 |
Class NAV ($997,463,364 ÷ 35,864,135 shares) | $27.81 |
Maximum offering price per share | |
Class A (net asset value per share ÷ 95%)2 | $29.18 |
1 | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
2 | On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 13 |
Investment income | |
Dividends | $122,989,367 |
Securities lending | 1,345,552 |
Interest | 787,798 |
Less foreign taxes withheld | (13,820,637) |
Total investment income | 111,302,080 |
Expenses | |
Investment management fees | 37,921,410 |
Distribution and service fees | 2,274,113 |
Accounting and legal services fees | 954,174 |
Transfer agent fees | 3,957,570 |
Trustees' fees | 93,084 |
Custodian fees | 1,561,846 |
State registration fees | 108,898 |
Printing and postage | 272,537 |
Professional fees | 110,998 |
Other | 295,752 |
Total expenses | 47,550,382 |
Less expense reductions | (351,229) |
Net expenses | 47,199,153 |
Net investment income | 64,102,927 |
Realized and unrealized gain (loss) | |
Net realized gain (loss) on | |
Unaffiliated investments and foreign currency transactions | (77,689,441) |
Affiliated investments | (3,737) |
(77,693,178) | |
Change in net unrealized appreciation (depreciation) of | |
Unaffiliated investments and translation of assets and liabilities in foreign currencies | 347,184,948 |
Affiliated investments | 344 |
347,185,292 | |
Net realized and unrealized gain | 269,492,114 |
Increase in net assets from operations | $333,595,041 |
14 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Six months ended 9-30-19 (unaudited) | Year ended 3-31-19 | |
Increase (decrease) in net assets | ||
From operations | ||
Net investment income | $64,102,927 | $87,829,784 |
Net realized loss | (77,693,178) | (327,404,032) |
Change in net unrealized appreciation (depreciation) | 347,185,292 | (203,438,382) |
Increase (decrease) in net assets resulting from operations | 333,595,041 | (443,012,630) |
Distributions to shareholders | ||
From earnings | ||
Class A | — | (14,660,561) |
Class B | — | (20,861) |
Class C | — | (4,998,651) |
Class I | — | (144,368,088) |
Class R2 | — | (906,042) |
Class R4 | — | (191,219) |
Class R6 | — | (49,853,759) |
Class 1 | — | (2,141,203) |
Class NAV | — | (28,574,370) |
Total distributions | — | (245,714,754) |
From fund share transactions | (580,108,091) | 245,618,755 |
Total decrease | (246,513,050) | (443,108,629) |
Net assets | ||
Beginning of period | 9,441,090,412 | 9,884,199,041 |
End of period | $9,194,577,362 | $9,441,090,412 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 15 |
Financial highlights |
CLASS A SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $26.79 | $28.52 | $28.43 | $21.69 | $19.90 | $21.64 | $24.60 |
Net investment income3 | 0.154 | 0.19 | 0.02 | 0.11 | 0.17 | 0.10 | 0.24 |
Net realized and unrealized gain (loss) on investments | 0.78 | (1.31) | 0.07 | 6.69 | 1.75 | (1.81) | 0.83 |
Total from investment operations | 0.93 | (1.12) | 0.09 | 6.80 | 1.92 | (1.71) | 1.07 |
Less distributions | |||||||
From net investment income | — | (0.15) | — | (0.06) | (0.13) | (0.03) | (0.47) |
From net realized gain | — | (0.46) | — | — | — | — | (3.56) |
Total distributions | — | (0.61) | — | (0.06) | (0.13) | (0.03) | (4.03) |
Net asset value, end of period | $27.72 | $26.79 | $28.52 | $28.43 | $21.69 | $19.90 | $21.64 |
Total return (%)5,6 | 3.477 | (3.69) | 0.327 | 31.38 | 9.62 | (7.86) | 5.91 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $562 | $609 | $827 | $803 | $427 | $615 | $140 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 1.308 | 1.28 | 1.298 | 1.29 | 1.32 | 1.38 | 1.53 |
Expenses including reductions | 1.298 | 1.28 | 1.288 | 1.28 | 1.32 | 1.37 | 1.52 |
Net investment income | 1.094,8 | 0.72 | 0.698 | 0.41 | 0.79 | 0.48 | 1.02 |
Portfolio turnover (%) | 36 | 98 | 4 | 65 | 94 | 82 | 204 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
6 | Does not reflect the effect of sales charges, if any. |
7 | Not annualized. |
8 | Annualized. |
16 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS B SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $26.33 | $28.06 | $27.99 | $21.45 | $19.70 | $21.55 | $24.50 |
Net investment income (loss)3 | 0.054 | 0.02 | —5 | (0.04) | 0.04 | 0.02 | —5 |
Net realized and unrealized gain (loss) on investments | 0.77 | (1.29) | 0.07 | 6.58 | 1.71 | (1.87) | 0.88 |
Total from investment operations | 0.82 | (1.27) | 0.07 | 6.54 | 1.75 | (1.85) | 0.88 |
Less distributions | |||||||
From net investment income | — | — | — | — | — | — | (0.27) |
From net realized gain | — | (0.46) | — | — | — | — | (3.56) |
Total distributions | — | (0.46) | — | — | — | — | (3.83) |
Net asset value, end of period | $27.15 | $26.33 | $28.06 | $27.99 | $21.45 | $19.70 | $21.55 |
Total return (%)6,7 | 3.118 | (4.36) | 0.258 | 30.49 | 8.88 | (8.58) | 5.07 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $1 | $1 | $2 | $2 | $2 | $2 | $2 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 2.009 | 1.98 | 1.999 | 1.99 | 2.03 | 2.32 | 3.18 |
Expenses including reductions | 1.999 | 1.98 | 1.989 | 1.98 | 2.02 | 2.12 | 2.34 |
Net investment income (loss) | 0.414,9 | 0.08 | (0.01)9 | (0.15) | 0.19 | 0.07 | —10 |
Portfolio turnover (%) | 36 | 98 | 4 | 65 | 94 | 82 | 204 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
5 | Less than $0.005 per share. |
6 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
7 | Does not reflect the effect of sales charges, if any. |
8 | Not annualized. |
9 | Annualized. |
10 | Less than 0.005%. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 17 |
CLASS C SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $26.27 | $28.00 | $27.93 | $21.40 | $19.66 | $21.49 | $24.45 |
Net investment income (loss)3 | 0.054 | —5 | —5 | (0.09) | 0.01 | (0.07) | (0.03) |
Net realized and unrealized gain (loss) on investments | 0.77 | (1.27) | 0.07 | 6.62 | 1.73 | (1.76) | 0.92 |
Total from investment operations | 0.82 | (1.27) | 0.07 | 6.53 | 1.74 | (1.83) | 0.89 |
Less distributions | |||||||
From net investment income | — | — | — | — | — | — | (0.29) |
From net realized gain | — | (0.46) | — | — | — | — | (3.56) |
Total distributions | — | (0.46) | — | — | — | — | (3.85) |
Net asset value, end of period | $27.09 | $26.27 | $28.00 | $27.93 | $21.40 | $19.66 | $21.49 |
Total return (%)6,7 | 3.128 | (4.37) | 0.258 | 30.51 | 8.85 | (8.52) | 5.11 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $236 | $263 | $349 | $333 | $145 | $113 | $13 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 2.009 | 1.98 | 1.999 | 1.99 | 2.03 | 2.08 | 2.40 |
Expenses including reductions | 1.999 | 1.98 | 1.989 | 1.98 | 2.02 | 2.07 | 2.30 |
Net investment income (loss) | 0.404,9 | (0.01) | (0.01)9 | (0.33) | 0.03 | (0.33) | (0.11) |
Portfolio turnover (%) | 36 | 98 | 4 | 65 | 94 | 82 | 204 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
5 | Less than $0.005 per share. |
6 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
7 | Does not reflect the effect of sales charges, if any. |
8 | Not annualized. |
9 | Annualized. |
18 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS I SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $26.84 | $28.59 | $28.49 | $21.72 | $19.94 | $21.67 | $24.62 |
Net investment income3 | 0.194 | 0.24 | 0.02 | 0.18 | 0.20 | 0.16 | 0.35 |
Net realized and unrealized gain (loss) on investments | 0.79 | (1.30) | 0.08 | 6.72 | 1.77 | (1.80) | 0.81 |
Total from investment operations | 0.98 | (1.06) | 0.10 | 6.90 | 1.97 | (1.64) | 1.16 |
Less distributions | |||||||
From net investment income | — | (0.23) | — | (0.13) | (0.19) | (0.09) | (0.55) |
From net realized gain | — | (0.46) | — | — | — | — | (3.56) |
Total distributions | — | (0.69) | — | (0.13) | (0.19) | (0.09) | (4.11) |
Net asset value, end of period | $27.82 | $26.84 | $28.59 | $28.49 | $21.72 | $19.94 | $21.67 |
Total return (%)5 | 3.656 | (3.45) | 0.356 | 31.82 | 9.96 | (7.59) | 6.33 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $5,516 | $5,576 | $5,631 | $5,424 | $2,380 | $1,168 | $152 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 1.007 | 1.00 | 1.007 | 0.99 | 1.02 | 1.06 | 1.19 |
Expenses including reductions | 0.997 | 0.99 | 0.997 | 0.98 | 1.01 | 1.06 | 1.18 |
Net investment income | 1.384,7 | 0.89 | 0.987 | 0.70 | 0.94 | 0.73 | 1.46 |
Portfolio turnover (%) | 36 | 98 | 4 | 65 | 94 | 82 | 204 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
6 | Not annualized. |
7 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 19 |
CLASS R2 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-163 |
Per share operating performance | ||||||
Net asset value, beginning of period | $26.82 | $28.55 | $28.45 | $21.71 | $19.92 | $21.46 |
Net investment income (loss)4 | 0.145 | 0.15 | 0.02 | 0.13 | (0.02) | 0.02 |
Net realized and unrealized gain (loss) on investments | 0.78 | (1.30) | 0.08 | 6.65 | 1.91 | (1.56) |
Total from investment operations | 0.92 | (1.15) | 0.10 | 6.78 | 1.89 | (1.54) |
Less distributions | ||||||
From net investment income | — | (0.12) | — | (0.04) | (0.10) | — |
From net realized gain | — | (0.46) | — | — | — | — |
Total distributions | — | (0.58) | — | (0.04) | (0.10) | — |
Net asset value, end of period | $27.74 | $26.82 | $28.55 | $28.45 | $21.71 | $19.92 |
Total return (%)6 | 3.437 | (3.81) | 0.357 | 31.23 | 9.54 | (7.18)7 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $36 | $43 | $43 | $37 | $12 | $1 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.398 | 1.38 | 1.328 | 1.40 | 1.42 | 1.908 |
Expenses including reductions | 1.388 | 1.37 | 1.318 | 1.39 | 1.42 | 1.528 |
Net investment income (loss) | 1.035,8 | 0.54 | 0.718 | 0.49 | (0.08) | 0.118 |
Portfolio turnover (%) | 36 | 98 | 4 | 65 | 94 | 829 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | The inception date for Class R2 shares is 3-27-15. |
4 | Based on average daily shares outstanding. |
5 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
6 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
7 | Not annualized. |
8 | Annualized. |
9 | Portfolio turnover is shown for the period from 3-1-15 to 2-29-16. |
20 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R4 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-163 |
Per share operating performance | ||||||
Net asset value, beginning of period | $26.84 | $28.57 | $28.48 | $21.72 | $19.94 | $21.46 |
Net investment income4 | 0.175 | 0.22 | 0.02 | 0.17 | 0.19 | 0.05 |
Net realized and unrealized gain (loss) on investments | 0.78 | (1.30) | 0.07 | 6.69 | 1.75 | (1.54) |
Total from investment operations | 0.95 | (1.08) | 0.09 | 6.86 | 1.94 | (1.49) |
Less distributions | ||||||
From net investment income | — | (0.19) | — | (0.10) | (0.16) | (0.03) |
From net realized gain | — | (0.46) | — | — | — | — |
Total distributions | — | (0.65) | — | (0.10) | (0.16) | (0.03) |
Net asset value, end of period | $27.79 | $26.84 | $28.57 | $28.48 | $21.72 | $19.94 |
Total return (%)6 | 3.547 | (3.53) | 0.327 | 31.60 | 9.81 | (6.95)7 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $7 | $8 | $8 | $9 | $5 | $3 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.248 | 1.24 | 1.258 | 1.24 | 1.25 | 1.668 |
Expenses including reductions | 1.138 | 1.13 | 1.148 | 1.13 | 1.14 | 1.248 |
Net investment income | 1.255,8 | 0.80 | 0.838 | 0.64 | 0.88 | 0.248 |
Portfolio turnover (%) | 36 | 98 | 4 | 65 | 94 | 829 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | The inception date for Class R4 shares is 3-27-15. |
4 | Based on average daily shares outstanding. |
5 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
6 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
7 | Not annualized. |
8 | Annualized. |
9 | Portfolio turnover is shown for the period from 3-1-15 to 2-29-16. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 21 |
CLASS R6 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-163 |
Per share operating performance | ||||||
Net asset value, beginning of period | $26.86 | $28.61 | $28.50 | $21.73 | $19.95 | $21.46 |
Net investment income4 | 0.205 | 0.27 | 0.03 | 0.05 | 0.20 | 0.12 |
Net realized and unrealized gain (loss) on investments | 0.79 | (1.30) | 0.08 | 6.88 | 1.79 | (1.53) |
Total from investment operations | 0.99 | (1.03) | 0.11 | 6.93 | 1.99 | (1.41) |
Less distributions | ||||||
From net investment income | — | (0.26) | — | (0.16) | (0.21) | (0.10) |
From net realized gain | — | (0.46) | — | — | — | — |
Total distributions | — | (0.72) | — | (0.16) | (0.21) | (0.10) |
Net asset value, end of period | $27.85 | $26.86 | $28.61 | $28.50 | $21.73 | $19.95 |
Total return (%)6 | 3.697 | (3.32) | 0.397 | 31.91 | 10.08 | (6.59)7 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $1,763 | $1,836 | $1,795 | $1,702 | $18 | $2 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.898 | 0.89 | 0.898 | 0.90 | 0.93 | 1.378 |
Expenses including reductions | 0.888 | 0.88 | 0.888 | 0.89 | 0.90 | 0.958 |
Net investment income | 1.495,8 | 1.01 | 1.098 | 0.16 | 0.95 | 0.608 |
Portfolio turnover (%) | 36 | 98 | 4 | 65 | 94 | 829 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | The inception date for Class R6 shares is 3-27-15. |
4 | Based on average daily shares outstanding. |
5 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
6 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
7 | Not annualized. |
8 | Annualized. |
9 | Portfolio turnover is shown for the period from 3-1-15 to 2-29-16. |
22 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS 1 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-16 | 2-28-15 |
Per share operating performance | |||||||
Net asset value, beginning of period | $26.83 | $28.57 | $28.47 | $21.71 | $19.93 | $21.65 | $24.61 |
Net investment income3 | 0.204 | 0.28 | 0.03 | 0.21 | 0.23 | 0.23 | 0.28 |
Net realized and unrealized gain (loss) on investments | 0.78 | (1.30) | 0.07 | 6.70 | 1.76 | (1.84) | 0.90 |
Total from investment operations | 0.98 | (1.02) | 0.10 | 6.91 | 1.99 | (1.61) | 1.18 |
Less distributions | |||||||
From net investment income | — | (0.26) | — | (0.15) | (0.21) | (0.11) | (0.58) |
From net realized gain | — | (0.46) | — | — | — | — | (3.56) |
Total distributions | — | (0.72) | — | (0.15) | (0.21) | (0.11) | (4.14) |
Net asset value, end of period | $27.81 | $26.83 | $28.57 | $28.47 | $21.71 | $19.93 | $21.65 |
Total return (%)5 | 3.656 | (3.32) | 0.356 | 31.86 | 10.04 | (7.49) | 6.39 |
Ratios and supplemental data | |||||||
Net assets, end of period (in millions) | $76 | $78 | $93 | $91 | $50 | $39 | $20 |
Ratios (as a percentage of average net assets): | |||||||
Expenses before reductions | 0.937 | 0.92 | 0.927 | 0.93 | 0.95 | 1.00 | 1.10 |
Expenses including reductions | 0.927 | 0.92 | 0.927 | 0.92 | 0.94 | 0.99 | 1.09 |
Net investment income | 1.454,7 | 1.05 | 1.067 | 0.79 | 1.09 | 1.06 | 1.18 |
Portfolio turnover (%) | 36 | 98 | 4 | 65 | 94 | 82 | 204 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | Based on average daily shares outstanding. |
4 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
6 | Not annualized. |
7 | Annualized. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 23 |
CLASS NAV SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-182 | 2-28-18 | 2-28-17 | 2-29-163 |
Per share operating performance | ||||||
Net asset value, beginning of period | $26.82 | $28.57 | $28.47 | $21.71 | $19.93 | $22.66 |
Net investment income4 | 0.215 | 0.29 | 0.03 | 0.23 | 0.19 | 0.11 |
Net realized and unrealized gain (loss) on investments | 0.78 | (1.31) | 0.07 | 6.69 | 1.81 | (2.72) |
Total from investment operations | 0.99 | (1.02) | 0.10 | 6.92 | 2.00 | (2.61) |
Less distributions | ||||||
From net investment income | — | (0.27) | — | (0.16) | (0.22) | (0.12) |
From net realized gain | — | (0.46) | — | — | — | — |
Total distributions | — | (0.73) | — | (0.16) | (0.22) | (0.12) |
Net asset value, end of period | $27.81 | $26.82 | $28.57 | $28.47 | $21.71 | $19.93 |
Total return (%)6 | 3.657 | (3.27) | 0.357 | 31.91 | 10.10 | (11.57)7 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $997 | $1,028 | $1,136 | $1,151 | $864 | $86 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.888 | 0.87 | 0.878 | 0.88 | 0.91 | 0.948 |
Expenses including reductions | 0.878 | 0.87 | 0.878 | 0.87 | 0.90 | 0.938 |
Net investment income | 1.505,8 | 1.06 | 1.108 | 0.89 | 0.91 | 0.698 |
Portfolio turnover (%) | 36 | 98 | 4 | 65 | 94 | 829 |
1 | Six months ended 9-30-19. Unaudited. |
2 | For the one-month period ended 3-31-18. The fund changed its fiscal year end from February 28 to March 31. |
3 | The inception date for Class NAV shares is 6-2-15. |
4 | Based on average daily shares outstanding. |
5 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
6 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
7 | Not annualized. |
8 | Annualized. |
9 | The portfolio turnover is shown for the period from 3-1-15 to 2-29-16. |
24 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Notes to financial statements (unaudited) |
SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 25 |
Total value at 9-30-19 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
Investments in securities: | ||||
Assets | ||||
Common stocks | ||||
Australia | $101,796,756 | — | $101,796,756 | — |
Canada | 319,191,799 | $319,191,799 | — | — |
China | 1,186,958,317 | 402,428,433 | 784,529,884 | — |
Denmark | 211,246,069 | — | 211,246,069 | — |
France | 1,181,711,344 | — | 1,181,711,344 | — |
Germany | 205,928,685 | — | 205,928,685 | — |
Hong Kong | 186,149,354 | — | 186,149,354 | — |
India | 276,481,340 | — | 276,481,340 | — |
Indonesia | 82,117,395 | — | 82,117,395 | — |
Ireland | 612,622,082 | 445,201,650 | 167,420,432 | — |
Japan | 791,643,487 | — | 791,643,487 | — |
Netherlands | 736,186,235 | — | 736,186,235 | — |
Singapore | 110,404,034 | — | 110,404,034 | — |
26 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT |
Total value at 9-30-19 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
South Korea | $157,583,244 | — | $157,583,244 | — |
Spain | 169,145,659 | — | 169,145,659 | — |
Switzerland | 1,059,971,331 | — | 1,059,971,331 | — |
Taiwan | 495,672,111 | — | 495,672,111 | — |
United Kingdom | 1,274,480,481 | $326,195,187 | 948,285,294 | — |
Securities lending collateral | 37,102,286 | 37,102,286 | — | — |
Short-term investments | 26,500,000 | — | 26,500,000 | — |
Total investments in securities | $9,222,892,009 | $1,530,119,355 | $7,692,772,654 | — |
SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 27 |
28 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT |
SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 29 |
Class | Expense reduction |
Class A | $21,824 |
Class B | 31 |
Class C | 9,238 |
Class I | 207,065 |
Class R2 | 1,514 |
Class | Expense reduction |
Class R4 | $294 |
Class R6 | 66,844 |
Class 1 | 2,898 |
Class NAV | 37,554 |
Total | $347,262 |
30 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT |
Class | Rule 12b-1 Fee | Service fee |
Class A | 0.30% | — |
Class B | 1.00% | — |
Class C | 1.00% | — |
Class R2 | 0.25% | 0.25% |
Class R4 | 0.25% | 0.10% |
Class 1 | 0.05% | — |
Class | Distribution and service fees | Transfer agent fees |
Class A | $885,122 | $346,188 |
SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 31 |
Class | Distribution and service fees | Transfer agent fees |
Class B | $4,238 | $496 |
Class C | 1,249,151 | 146,502 |
Class I | — | 3,355,647 |
Class R2 | 102,251 | 2,396 |
Class R4 | 13,770 | 466 |
Class R6 | — | 105,875 |
Class 1 | 19,581 | — |
Total | $2,274,113 | $3,957,570 |
Borrower or Lender | Weighted Average Loan Balance | Days Outstanding | Weighted Average Interest Rate | Interest Income (Expense) |
Borrower | $16,653,297 | 2 | 2.367% | $(2,190) |
Lender | 3,766,410 | 3 | 2.335% | 733 |
Six Months Ended 9-30-19 | Year Ended 3-31-19 | |||
Shares | Amount | Shares | Amount | |
Class A shares | ||||
Sold | 1,128,819 | $30,861,394 | 3,934,860 | $107,881,677 |
Distributions reinvested | — | — | 588,267 | 14,212,523 |
Repurchased | (3,561,738) | (97,613,120) | (10,780,632) | (288,739,157) |
Net decrease | (2,432,919) | $(66,751,726) | (6,257,505) | $(166,644,957) |
Class B shares | ||||
Sold | 734 | $20,221 | 1,025 | $27,679 |
Distributions reinvested | — | — | 735 | 17,482 |
Repurchased | (8,518) | (227,109) | (27,519) | (722,736) |
Net decrease | (7,784) | $(206,888) | (25,759) | $(677,575) |
32 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT |
Six Months Ended 9-30-19 | Year Ended 3-31-19 | |||
Shares | Amount | Shares | Amount | |
Class C shares | ||||
Sold | 118,199 | $3,166,800 | 924,629 | $24,604,117 |
Distributions reinvested | — | — | 197,102 | 4,679,208 |
Repurchased | (1,427,193) | (38,193,788) | (3,565,527) | (92,001,072) |
Net decrease | (1,308,994) | $(35,026,988) | (2,443,796) | $(62,717,747) |
Class I shares | ||||
Sold | 22,735,267 | $624,389,999 | 95,608,369 | $2,596,657,426 |
Distributions reinvested | — | — | 5,206,727 | 125,950,713 |
Repurchased | (32,161,422) | (883,902,151) | (90,103,831) | (2,356,584,416) |
Net increase (decrease) | (9,426,155) | $(259,512,152) | 10,711,265 | $366,023,723 |
Class R2 shares | ||||
Sold | 127,666 | $3,494,693 | 441,295 | $11,837,910 |
Distributions reinvested | — | — | 33,567 | 812,332 |
Repurchased | (428,841) | (11,766,981) | (370,850) | (10,005,761) |
Net increase (decrease) | (301,175) | $(8,272,288) | 104,012 | $2,644,481 |
Class R4 shares | ||||
Sold | 27,968 | $764,515 | 69,035 | $1,861,755 |
Distributions reinvested | — | — | 7,905 | 191,219 |
Repurchased | (60,484) | (1,658,251) | (74,859) | (2,008,808) |
Net increase (decrease) | (32,516) | $(893,736) | 2,081 | $44,166 |
Class R6 shares | ||||
Sold | 3,707,142 | $102,207,895 | 17,610,134 | $484,165,158 |
Distributions reinvested | — | — | 2,047,381 | 49,546,630 |
Repurchased | (8,726,331) | (238,218,337) | (14,078,112) | (373,109,601) |
Net increase (decrease) | (5,019,189) | $(136,010,442) | 5,579,403 | $160,602,187 |
Class 1 shares | ||||
Sold | 97,452 | $2,667,505 | 394,196 | $10,902,977 |
Distributions reinvested | — | — | 88,589 | 2,141,203 |
Repurchased | (278,093) | (7,656,210) | (833,044) | (22,291,454) |
Net decrease | (180,641) | $(4,988,705) | (350,259) | $(9,247,274) |
Class NAV shares | ||||
Sold | 755,002 | $20,372,972 | 1,905,823 | $49,201,008 |
Distributions reinvested | — | — | 1,182,714 | 28,574,370 |
Repurchased | (3,208,864) | (88,818,138) | (4,532,900) | (122,183,627) |
Net decrease | (2,453,862) | $(68,445,166) | (1,444,363) | $(44,408,249) |
Total net increase (decrease) | (21,163,235) | $(580,108,091) | 5,875,079 | $245,618,755 |
SEMIANNUAL REPORT | JOHN HANCOCK INTERNATIONAL GROWTH FUND | 33 |
Dividends and distributions | |||||||||
Affiliate | Beginning share amount | Shares purchased | Shares sold | Ending share amount | Income distributions received | Capital gain distributions received | Realized gain (loss) | Change in unrealized appreciation (depreciation) | Ending value |
John Hancock Collateral Trust* | 3,528,641 | 136,429,276 | (136,250,173) | 3,707,744 | — | — | $(3,737) | $344 | $37,102,286 |
* | Refer to the Securities lending note within Note 2 for details regarding this investment. |
34 | JOHN HANCOCK International Growth Fund | SEMIANNUAL REPORT |
CONTINUATION OF INVESTMENT ADVISORY AND SUBADVISORY AGREEMENTS
Evaluation of Advisory and Subadvisory Agreements by the Board of Trustees
This section describes the evaluation by the Board of Trustees (the Board) of John Hancock Funds III (the Trust) of the Advisory Agreement (the Advisory Agreement) with John Hancock Investment Management, LLC (the Advisor, formerly John Hancock Advisers, LLC) and the Subadvisory Agreement (the Subadvisory Agreement) with Wellington Management Company LLP (the Subadvisor), for John Hancock International Growth Fund (the fund). The Advisory Agreement and Subadvisory Agreement are collectively referred to as the Agreements. Prior to the June23-26, 2019 in-person meeting, at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the Agreements at an in-person meeting held on May28-30, 2019.
Approval of Advisory and Subadvisory Agreements
At in-person meetings held on June 23-26, 2019, the Board, including the Trustees who are not parties to any Agreement or considered to be interested persons of the Trust under the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees), reapproved for an annual period the continuation of the Advisory Agreement between the Trust and the Advisor and the Subadvisory Agreement between the Advisor and the Subadvisor with respect to the fund.
In considering the Advisory Agreement and the Subadvisory Agreement, the Board received in advance of the meetings a variety of materials relating to the fund, the Advisor and the Subadvisor, including comparative performance, fee and expense information for a peer group of similar funds prepared by an independent third-party provider of fund data, performance information for an applicable benchmark index; and, with respect to the Subadvisor, comparative performance information for comparably managed accounts, as applicable, and other information provided by the Advisor and the Subadvisor regarding the nature, extent and quality of services provided by the Advisor and the Subadvisor under their respective Agreements, as well as information regarding the Advisor's revenues and costs of providing services to the fund and any compensation paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreement are considered, particular focus is given to information concerning fund performance, comparability of fees and total expenses, and profitability. However, the Board notes that the evaluation process with respect to the Advisor and the Subadvisor is an ongoing one. In this regard, the Board also took into account discussions with management and information provided to the Board (including its various committees) at prior meetings with respect to the services provided by the Advisor and the Subadvisor to the fund, including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisor with respect to the fund. The information received and considered by the Board in connection with the May and June meetings and throughout the year was both written and oral. The Board also considered the nature, quality, and extent of non-advisory services, if any, to be provided to the fund by the Advisor's affiliates, including distribution services. The Board considered the Advisory Agreement and the Subadvisory Agreement separately in the course of its review. In doing so, the Board noted the respective roles of the Advisor and Subadvisor in providing services to the fund.
Throughout the process, the Board asked questions of and requested additional information from management. The Board is assisted by counsel for the Trust and the Independent Trustees are also separately assisted by independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements and discussed the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement with respect to the fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets, and the industry) and did not treat any single factor as determinative, and each Trustee may have attributed different weights to different factors. The Board's conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board's ongoing regular review of fund performance and operations throughout the year.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the fund, the Board reviewed information provided by the Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor's compliance and regulatory history, including its Form ADV. The Board also noted that on a regular basis it receives and reviews information from the Trust's Chief Compliance Officer (CCO) regarding the fund's compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board observed that the scope of services provided by the Advisor, and of the undertakings required of the Advisor in connection with those services, including maintaining and monitoring its own and the fund's compliance programs, risk management programs, liquidity management programs and cybersecurity programs, had expanded over time as a result of regulatory, market and other developments. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the fund, including, but not limited to, general supervision of and coordination of the services provided by the Subadvisor, and is also responsible for monitoring and reviewing the activities of the Subadvisor and other third-party service providers. The Board also considered the significant risks assumed by the Advisor in connection with the services provided to the fund including entrepreneurial risk in sponsoring new funds and ongoing risks including investment, operational, enterprise, litigation, regulatory and compliance risks with respect to all funds.
In considering the nature, extent, and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor's management and the quality of the performance of the Advisor's duties, through Board meetings, discussions and reports during the preceding year and through each Trustee's experience as a Trustee of the Trust and of the other trusts in the John Hancock group of funds complex (the John Hancock Fund Complex).
In the course of their deliberations regarding the Advisory Agreement, the Board considered, among other things:
(e) | the financial condition of the Advisor and whether it has the financial wherewithal to provide a high level and quality of services to the fund; |
(f) | the Advisor's initiatives intended to improve various aspects of the Trust's operations and investor experience with the fund; and |
(g) | the Advisor's reputation and experience in serving as an investment advisor to the Trust and the benefit to shareholders of investing in funds that are part of a family of funds offering a variety of investments. |
The Board concluded that the Advisor may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the fund.
Investment performance.In considering the fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the fund's performance results. In connection with the consideration of the Advisory Agreement, the Board:
(a) | reviewed information prepared by management regarding the fund's performance; |
(b) | considered the comparative performance of an applicable benchmark index; |
(c) | considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; and |
(d) | took into account the Advisor's analysis of the fund's performance and its plans and recommendations regarding the Trust's subadvisory arrangements generally. |
The Board noted that while it found the data provided by the independent third-party generally useful it recognized its limitations, including in particular that the data may vary depending on the end date selected and that the results of the performance comparisons may vary depending on the selection of the peer group. The Board noted that the fund outperformed its benchmark index and peer group average for the one, three-, five- and ten-year periods ended December 31, 2018. The Board took into account management's discussion of the fund's performance, including favorable performance relative to the benchmark index and peer group for the one-, three-, five- and ten-year periods. The Board concluded that the fund's performance has generally been in line with or outperformed the historical performance of comparable funds and the fund's benchmark index.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of fund data, including, among other data, the fund's contractual and net management fees (and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the fund in light of the nature, extent and quality of the management and advisory and subadvisory services provided by the Advisor and the Subadvisor. The Board considered the fund's ranking within a smaller group of peer funds chosen by the independent third-party provider, as well as the fund's ranking within a broader group of funds. In comparing the fund's contractual and net management fees to those of comparable funds, the Board noted that such fees include both advisory and administrative costs. The Board noted that net management fees for the fund are lower than the peer group median and total expenses for the fund are equal to the peer group median.
The Board took into account management's discussion with respect to the overall management fee and the fees of the Subadvisor, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee, in each case in light of the services rendered for those amounts and the risks undertaken by the Advisor. The Board also noted that the Advisor pays the subadvisory fee, and that such fees are negotiated at arm's length with respect to the Subadvisor. The Board also took into account that management had agreed to implement an overall fee waiver across
the complex, including the fund, which is discussed further below. The Board also noted actions taken over the past several years to reduce the fund's operating expenses. The Board also noted that, in addition, the Advisor is currently waiving fees and/or reimbursing expenses with respect to the fund and that the fund has breakpoints in its contractual management fee schedule that reduces management fees as assets increase. The Board reviewed information provided by the Advisor concerning investment advisory fees charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the complex) having similar investment mandates, if any. The Board considered any differences between the Advisor's and a Subadvisor's services to a fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee paid with respect to the fund is reasonable in light of the nature, extent and quality of the services provided to the fund under the Advisory Agreement.
Profitability/Fall out benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor's relationship with the Trust, the Board:
(a) | reviewed financial information of the Advisor; |
(b) | reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to the fund; |
(c) | received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole and with respect to the fund; |
(d) | received information with respect to the Advisor's allocation methodologies used in preparing the profitability data and considered that the Advisor hired an independent third-party consultant to provide an analysis of the Advisor's allocation methodologies; |
(e) | considered that the John Hancock insurance companies that are affiliates of the Advisor, as shareholders of the Trust directly or through their separate accounts, receive certain tax credits or deductions relating to foreign taxes paid and dividends received by certain funds of the Trust and noted that these tax benefits, which are not available to participants in qualified retirement plans under applicable income tax law, are reflected in the profitability information reviewed by the Board; |
(f) | considered that the Advisor also provides administrative services to the fund on a cost basis pursuant to an administrative services agreement; |
(g) | noted that affiliates of the Advisor provide transfer agency services and distribution services to the fund, and that the fund's distributor also receives Rule 12b-1 payments to support distribution of the fund; |
(h) | noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the fund; |
(i) | noted that the subadvisory fee for the fund is paid by the Advisor and is negotiated at arm's length; |
(j) | considered the Advisor's ongoing costs and expenditures necessary to improve services, meet new regulatory and compliance requirements, and adapt to other challenges impacting the fund industry; and |
(k) | considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the fund and the risks that it assumes as Advisor, including entrepreneurial, operational, reputational, litigation and regulatory risk. |
Based upon its review, the Board concluded that the level of profitability, if any, of the Advisor and its affiliates from their relationship with the fund was reasonable and not excessive.
Economies of scale. In considering the extent to which economies of scale would be realized as the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders, the Board:
(a) | considered that the Advisor has contractually agreed to waive a portion of its management fee for certain funds of the John Hancock Fund Complex, including the fund (the participating portfolios) or otherwise reimburse the expenses of the participating portfolios (the reimbursement). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund; |
(b) | reviewed the fund's advisory fee structure and concluded that: (i) the fund's fee structure contains breakpoints at the subadvisory fee level and that such breakpoints are reflected as breakpoints in the advisory fees for the fund; and (ii) although economies of scale cannot be measured with precision, these arrangements permit shareholders of the fund to benefit from economies of scale if the fund grows. The Board also took into account management's discussion of the fund's advisory fee structure; and |
(c) | the Board also considered the effect of the fund's growth in size on its performance and fees. The Board also noted that if the fund's assets increase over time, the fund may realize other economies of scale. |
Approval of Subadvisory Agreement
In making its determination with respect to approval of the Subadvisory Agreement, the Board reviewed:
(1) | information relating to the Subadvisor's business, including current subadvisory services to the Trust (and other funds in the John Hancock Fund Complex); |
(2) | the historical and current performance of the fund and comparative performance information relating to an applicable benchmark index and comparable funds; |
(3) | the subadvisory fee for the fund, including any breakpoints, and to the extent available, comparable fee information prepared by an independent third party provider of fund data; and |
(4) | information relating to the nature and scope of any material relationships and their significance to the Trust's Advisor and Subadvisor. |
Nature, extent, and quality of services. With respect to the services provided by the Subadvisor, the Board received information provided to the Board by the Subadvisor, including the Subadvisor's Form ADV, as well as took into account information presented throughout the past year. The Board considered the Subadvisor's current level of staffing and its overall resources, as well as received information relating to the Subadvisor's compensation program. The Board reviewed the Subadvisor's history and investment experience, as well as information regarding the qualifications, background, and responsibilities of the Subadvisor's investment and compliance personnel who provide services to the fund. The Board also considered, among other things, the Subadvisor's compliance program and any disciplinary history. The Board also considered the Subadvisor's risk assessment and monitoring process. The Board reviewed the Subadvisor's regulatory history, including whether it was involved in any regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular, periodic reviews of the Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust's CCO and his staff conduct regular, periodic compliance reviews with the Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of the Subadvisor and
procedures reasonably designed to assure compliance with the federal securities laws. The Board also took into account the financial condition of the Subadvisor.
The Board considered the Subadvisor's investment process and philosophy. The Board took into account that the Subadvisor's responsibilities include the development and maintenance of an investment program for the fund that is consistent with the fund's investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services. The Board also received information with respect to the Subadvisor's brokerage policies and practices, including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the fund, the Board noted that the fees under the Subadvisory Agreement are paid by the Advisor and not the fund.
The Board also relied on the ability of the Advisor to negotiate the Subadvisory Agreement with the Subadvisor, which is not affiliated with the Advisor, and the fees thereunder at arm's length. As a result, the costs of the services to be provided and the profits to be realized by the Subadvisor from its relationship with the Trust were not a material factor in the Board's consideration of the Subadvisory Agreement.
The Board also received information regarding the nature and scope (including their significance to the Advisor and its affiliates and to the Subadvisor) of any material relationships with respect to the Subadvisor, which include arrangements in which the Subadvisor or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreement.
In addition, the Board considered other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor's relationship with the fund, such as the opportunity to provide advisory services to additional funds in the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays a subadvisory fee to the Subadvisor. As noted above, the Board also considered the fund's subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the fund as included in the report prepared by the independent third party provider of fund data, to the extent available. The Board noted that the limited size of the Lipper peer group was not sufficient for comparative purposes. The Board also took into account the subadvisory fees paid by the Advisor to the Subadvisor with respect to the fund and compared them to fees charged by the Subadvisor to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered the fund's performance as compared to the fund's peer group and the benchmark index and noted that the Board reviews information about the fund's performance results at its regularly scheduled meetings. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor. The Board was mindful of the Advisor's focus on the Subadvisor's performance. The Board also noted the Subadvisor's long-term performance record for similar accounts, as applicable.
The Board's decision to approve the Subadvisory Agreement was based on a number of determinations, including the following:
* * *
Based on the Board's evaluation of all factors that the Board deemed to be material, including those factors described above, the Board, including the Independent Trustees, concluded that renewal of the Advisory Agreement and the Subadvisory Agreement would be in the best interest of the fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreement for an additional one-year period.
Trustees Hassell H. McClellan,Chairperson Officers Andrew G. Arnott Francis V. Knox, Jr. Charles A. Rizzo Salvatore Schiavone Christopher (Kit) Sechler | Investment advisor John Hancock Investment Management LLC Subadvisor Wellington Management Company LLP Portfolio Manager John A. Boselli, CFA Principal distributor John Hancock Investment Management Distributors LLC Custodian Citibank. N.A. Transfer agent John Hancock Signature Services, Inc. Legal counsel K&L Gates LLP |
* Member of the Audit Committee
† Non-Independent Trustee
The fund's proxy voting policies and procedures, as well as the fund proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.
All of the fund's holdings as of the end of the third month of every fiscal quarter are filed with the SEC on Form N-PORT within 60 days of the end of the fiscal quarter. The fund's Form N-PORT filings are available on our website and the SEC's website, sec.gov.
We make this information on your fund, as well asmonthly portfolio holdings, and other fund details available on our website at jhinvestments.com or by calling 800-225-5291.
You can also contact us: | |||
800-225-5291 jhinvestments.com | Regular mail: John Hancock Signature Services, Inc. | Express mail: John Hancock Signature Services, Inc. |
John Hancock family of funds
DOMESTIC EQUITY FUNDS Blue Chip Growth Classic Value Disciplined Value Disciplined Value Mid Cap Equity Income Financial Industries Fundamental All Cap Core Fundamental Large Cap Core New Opportunities Regional Bank Small Cap Core Small Cap Growth Small Cap Value U.S. Global Leaders Growth U.S. Quality Growth GLOBAL AND INTERNATIONAL EQUITY FUNDS Disciplined Value International Emerging Markets Emerging Markets Equity Fundamental Global Franchise Global Equity Global Shareholder Yield Global Thematic Opportunities International Dynamic Growth International Growth International Small Company | INCOME FUNDS Bond California Tax-Free Income Emerging Markets Debt Floating Rate Income Government Income High Yield High Yield Municipal Bond Income Investment Grade Bond Money Market Short Duration Bond Short Duration Credit Opportunities Strategic Income Opportunities Tax-Free Bond ALTERNATIVE AND SPECIALTY FUNDS Absolute Return Currency Alternative Asset Allocation Disciplined Alternative Yield Diversified Macro Infrastructure Multi-Asset Absolute Return Seaport Long/Short |
A fund's investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. To obtain a prospectus, contact your financial professional, call John Hancock Investment Management at 800-225-5291, or visit our website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
ASSET ALLOCATION Balanced Income Allocation Multi-Index Lifetime Portfolios Multi-Index Preservation Portfolios Multimanager Lifestyle Portfolios Multimanager Lifetime Portfolios Retirement Income 2040 EXCHANGE-TRADED FUNDS John Hancock Multifactor Consumer Discretionary ETF John Hancock Multifactor Consumer Staples ETF John Hancock Multifactor Developed International ETF John Hancock Multifactor Emerging Markets ETF John Hancock Multifactor Energy ETF John Hancock Multifactor Financials ETF John Hancock Multifactor Healthcare ETF John Hancock Multifactor Industrials ETF John Hancock Multifactor Large Cap ETF John Hancock Multifactor Materials ETF John Hancock Multifactor Media and John Hancock Multifactor Mid Cap ETF John Hancock Multifactor Small Cap ETF John Hancock Multifactor Technology ETF John Hancock Multifactor Utilities ETF | ENVIRONMENTAL, SOCIAL, AND ESG All Cap Core ESG Core Bond ESG International Equity ESG Large Cap Core CLOSED-END FUNDS Financial Opportunities Hedged Equity & Income Income Securities Trust Investors Trust Preferred Income Preferred Income II Preferred Income III Premium Dividend Tax-Advantaged Dividend Income Tax-Advantaged Global Shareholder Yield |
John Hancock Multifactor ETF shares are bought and sold at market price (not NAV), and are not individually redeemed
from the fund. Brokerage commissions will reduce returns.
John Hancock ETFs are distributed by Foreside Fund Services, LLC, and are subadvised by Dimensional Fund Advisors LP.
Foreside is not affiliated with John Hancock Investment Management Distributors LLC or Dimensional Fund Advisors LP.
Dimensional Fund Advisors LP receives compensation from John Hancock in connection with licensing rights to the
John Hancock Dimensional indexes. Dimensional Fund Advisors LP does not sponsor, endorse, or sell, and makes no
representation as to the advisability of investing in, John Hancock Multifactor ETFs.
John Hancock Investment Management
A trusted brand
John Hancock Investment Management is a premier asset manager
representing one of America's most trusted brands, with a heritage of
financial stewardship dating back to 1862. Helping our shareholders
pursue their financial goals is at the core of everything we do. It's why
we support the role of professional financial advice and operate with
the highest standards of conduct and integrity.
A better way to invest
We serve investors globally through a unique multimanager approach:
We search the world to find proven portfolio teams with specialized
expertise for every strategy we offer, then we apply robust investment
oversight to ensure they continue to meet our uncompromising
standards and serve the best interests of our shareholders.
Results for investors
Our unique approach to asset management enables us to provide
a diverse set of investments backed by some of the world's best
managers, along with strong risk-adjusted returns across asset classes.
John Hancock Investment Management Distributors LLC n Member FINRA, SIPC
200 Berkeley Street n Boston, MA 02116-5010 n 800-225-5291 n jhinvestments.com
This report is for the information of the shareholders of John Hancock International Growth Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.
MF975102 | 87SA 9/19 11/19 |
John Hancock
U.S. Quality Growth Fund
Semiannual report 9/30/19
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund's shareholder reports like this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the fund or from your financial intermediary. Instead, the reports will be made available on a website, and you will be notified by mail each time a report is posted and provided with a website link to access the report.
If you already elected to receive shareholder reports electronically, you will not be affected by this change, and you do not need to take any action. You may elect to receive shareholder reports and other communications electronically by calling John Hancock Investment Management at 800-225-5291 (Class A and Class C shares) or 888-972-8696 (Class I, Class R2, Class R4, and Class R6) or by contacting your financial intermediary.
You may elect to receive all reports in paper, free of charge, at any time. You can inform John Hancock Investment Management or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by following the instructions listed above. Your election to receive reports in paper will apply to all funds held with John Hancock Investment Management or your financial intermediary.
A message to shareholders
Dear shareholder,
It was a rather volatile time for stock markets in the United States during the six months ended September 30, 2019, with investor uncertainty surrounding trade with China, the impeachment inquiry against President Trump, and the broader health of the global economy leading to some dramatic swings in performance. Investors, who had generally shunned risk in the final months of 2018, regained their risk appetites in the first half of 2019. The rally in stocks continued through the end of July, when stocks again suffered a setback. Against this backdrop, the U.S. Federal Reserve pivoted from a normalizing stance to an easing stance, cutting rates for the first time in more than a decade in July and again in September.
While economic fundamentals in the United States appear reasonably solid, with a strong labor market and a confident consumer base, there are sure to be patches of market turbulence as the year goes on, particularly if the threat of a recession increases. As always, your best resource in unpredictable markets is your financial advisor, who can help position your portfolio so that it's sufficiently diversified to meet your long-term objectives and to withstand the inevitable bouts of market volatility along the way.
On behalf of everyone at John Hancock Investment Management, I'd like to take this opportunity to welcome new shareholders and thank existing shareholders for the continued trust you've placed in us.
Sincerely,
Andrew G. Arnott
President and CEO,
John Hancock Investment Management
Head of Wealth and Asset Management,
United States and Europe
This commentary reflects the CEO's views as of this report's period end and are subject to change at any time. Diversification does not guarantee investment returns and does not eliminate risk of loss. All investments entail risks, including the possible loss of principal. For more up-to-date information, you can visit our website at jhinvestments.com.
John Hancock
U.S. Quality Growth Fund
INVESTMENT OBJECTIVE
The fund seeks long-term capital appreciation.
AVERAGE ANNUAL TOTAL RETURNS AS OF 9/30/19 (%)
The Russell 1000 Growth Index is an unmanaged index that measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 Index companies with higher price-to-book ratios and higher forecasted growth values.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Figures from Morningstar, Inc. include reinvested distributions and do not take into account sales charges. Actual load-adjusted performance is lower. Since-inception returns for the Morningstar fund category average are not available.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative. Performance of the other share classes will vary based on the difference in the fees and expenses of those classes. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current month-end performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling 800-225-5291. For further information on the fund's objectives, risks, and strategy, see the fund's prospectus.
SECTOR COMPOSITION AS OF 9/30/19 (%)
TOP 10 HOLDINGS AS OF 9/30/19 (%)
Microsoft Corp. | 8.5 |
Alphabet, Inc., Class A | 6.3 |
Amazon.com, Inc. | 4.8 |
Facebook, Inc., Class A | 4.1 |
Visa, Inc., Class A | 3.3 |
Mastercard, Inc., Class A | 2.9 |
UnitedHealth Group, Inc. | 2.5 |
The Home Depot, Inc. | 2.3 |
Adobe, Inc. | 2.0 |
Lockheed Martin Corp. | 1.9 |
TOTAL | 38.6 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
A note about risks
The fund may be subject to various risks as described in the fund's prospectus. For more information, please refer to the "Principal risks" section of the prospectus.
TOTAL RETURNS FOR THE PERIOD ENDED SEPTEMBER 30, 2019
Average annual total returns (%) with maximum sales charge | Cumulative total returns (%) with maximum sales charge | ||||||
1-year | 5-year | Since inception1 | 6-month | 5-year | Since inception1 | ||
Class A | 0.20 | 11.29 | 14.51 | 0.79 | 70.69 | 187.01 | |
Class C2 | 3.61 | 11.60 | 14.70 | 4.67 | 73.12 | 190.76 | |
Class I3 | 5.66 | 12.73 | 15.61 | 6.17 | 82.06 | 209.27 | |
Class R22,3 | 5.29 | 12.31 | 15.18 | 5.98 | 78.70 | 200.47 | |
Class R42,3 | 5.54 | 12.56 | 15.35 | 6.16 | 80.70 | 203.84 | |
Class R62,3 | 5.80 | 12.82 | 15.52 | 6.22 | 82.77 | 207.31 | |
Class NAV3 | 5.82 | 12.89 | 15.78 | 6.23 | 83.31 | 212.81 | |
Index† | 3.71 | 13.39 | 16.24 | 6.20 | 87.46 | 222.73 |
Performance figures assume all distributions are reinvested. Figures reflect the maximum sales charge on Class A shares of 5% and the applicable contingent deferred sales charge (CDSC) on Class C shares. Class C shares sold within one year of purchase are subject to a 1% CDSC. Sales charges are not applicable to Class I, Class R2, Class R4, Class R6, and Class NAV shares.
The expense ratios of the fund, both net (including any fee waivers or expense limitations) and gross (excluding any fee waivers or expense limitations), are set forth according to the most recent publicly available prospectuses for the fund and may differ from those disclosed in the Financial highlights tables in this report. Net expenses reflect contractual expense limitations in effect until July 31, 2020 and are subject to change. Had the contractual fee waivers and expense limitations not been in place, gross expenses would apply. The expense ratios are as follows:
Class A | Class C | Class I | Class R2 | Class R4 | Class R6 | Class NAV | |
Gross (%) | 1.01 | 1.76 | 0.76 | 1.15 | 1.00 | 0.65 | 0.64 |
Net (%) | 1.00 | 1.75 | 0.75 | 1.14 | 0.89 | 0.64 | 0.63 |
Please refer to the most recent prospectus and annual or semiannual report for more information on expenses and any expense limitation arrangements for each class.
The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility and other factors, the fund's current performance may be higher or lower than the performance shown. For current to the most recent month-end performance data, please call 800-225-5291 or visit the fund's website at jhinvestments.com.
The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The fund's performance results reflect any applicable fee waivers or expense reductions, without which the expenses would increase and results would have been less favorable.
† | Index is the Russell 1000 Growth Index. |
See the following page for footnotes.
This chart and table show what happened to a hypothetical $10,000 investment in John Hancock U.S. Quality Growth Fund for the share classes and periods indicated, assuming all distributions were reinvested. For comparison, we've shown the same investment in the Russell 1000 Growth Index.
Start date | With maximum sales charge ($) | Without sales charge ($) | Index ($) | |
Class C2,4 | 12-20-11 | 29,076 | 29,076 | 32,273 |
Class I3 | 12-20-11 | 30,927 | 30,927 | 32,273 |
Class R22,3 | 12-20-11 | 30,047 | 30,047 | 32,273 |
Class R42,3 | 12-20-11 | 30,384 | 30,384 | 32,273 |
Class R62,3 | 12-20-11 | 30,731 | 30,731 | 32,273 |
Class NAV3 | 12-20-11 | 31,281 | 31,281 | 32,273 |
The Russell 1000 Growth Index is an unmanaged index that measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Footnotes related to performance pages
1 | From 12-20-11. |
2 | Class C shares were first offered on 8-28-14; Class R2, Class R4, and Class R6 shares were first offered on 3-27-15. Returns prior to these dates are those of Class A shares that have not been adjusted for class-specific expenses; otherwise, returns would vary. |
3 | For certain types of investors, as described in the fund's prospectuses. |
4 | The contingent deferred sales charge is not applicable. |
Your expenses |
6 | JOHN HANCOCK U.S. QUALITY GROWTH FUND | SEMIANNUAL REPORT |
Account value on 4-1-2019 | Ending value on 9-30-2019 | Expenses paid during period ended 9-30-20191 | Annualized expense ratio | ||
Class A | Actual expenses/actual returns | $1,000.00 | $1,061.00 | $5.20 | 1.01% |
Hypothetical example | 1,000.00 | 1,020.00 | 5.10 | 1.01% | |
Class C | Actual expenses/actual returns | 1,000.00 | 1,056.70 | 9.05 | 1.76% |
Hypothetical example | 1,000.00 | 1,016.20 | 8.87 | 1.76% | |
Class I | Actual expenses/actual returns | 1,000.00 | 1,061.70 | 3.92 | 0.76% |
Hypothetical example | 1,000.00 | 1,021.20 | 3.84 | 0.76% | |
Class R2 | Actual expenses/actual returns | 1,000.00 | 1,059.80 | 5.92 | 1.15% |
Hypothetical example | 1,000.00 | 1,019.30 | 5.81 | 1.15% | |
Class R4 | Actual expenses/actual returns | 1,000.00 | 1,061.60 | 4.64 | 0.90% |
Hypothetical example | 1,000.00 | 1,020.50 | 4.55 | 0.90% | |
Class R6 | Actual expenses/actual returns | 1,000.00 | 1,062.20 | 3.35 | 0.65% |
Hypothetical example | 1,000.00 | 1,021.80 | 3.29 | 0.65% | |
Class NAV | Actual expenses/actual returns | 1,000.00 | 1,062.30 | 3.30 | 0.64% |
Hypothetical example | 1,000.00 | 1,021.80 | 3.23 | 0.64% |
1 | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period). |
SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 7 |
Fund’s investments |
Shares | Value | ||||
Common stocks 98.7% | $887,342,604 | ||||
(Cost $703,786,413) | |||||
Communication services 14.2% | 128,067,693 | ||||
Entertainment 2.2% | |||||
Electronic Arts, Inc. (A) | 109,920 | 10,752,374 | |||
Take-Two Interactive Software, Inc. (A) | 71,336 | 8,941,254 | |||
Interactive media and services 10.4% | |||||
Alphabet, Inc., Class A (A) | 46,479 | 56,757,366 | |||
Facebook, Inc., Class A (A) | 205,734 | 36,637,111 | |||
Media 1.6% | |||||
Comcast Corp., Class A | 332,289 | 14,979,588 | |||
Consumer discretionary 13.8% | 123,827,660 | ||||
Hotels, restaurants and leisure 1.2% | |||||
Hilton Worldwide Holdings, Inc. | 115,039 | 10,711,281 | |||
Household durables 1.4% | |||||
NVR, Inc. (A) | 3,351 | 12,456,840 | |||
Internet and direct marketing retail 5.9% | |||||
Amazon.com, Inc. (A) | 24,640 | 42,772,822 | |||
Expedia Group, Inc. | 74,587 | 10,025,239 | |||
Specialty retail 5.3% | |||||
Ross Stores, Inc. | 120,926 | 13,283,721 | |||
The Home Depot, Inc. | 90,372 | 20,968,111 | |||
The TJX Companies, Inc. | 244,163 | 13,609,646 | |||
Consumer staples 2.6% | 23,123,609 | ||||
Beverages 1.1% | |||||
Monster Beverage Corp. (A) | 174,902 | 10,154,810 | |||
Food and staples retailing 1.5% | |||||
Sysco Corp. | 163,335 | 12,968,799 | |||
Financials 7.8% | 69,947,364 | ||||
Capital markets 3.8% | |||||
Intercontinental Exchange, Inc. | 110,845 | 10,227,668 | |||
S&P Global, Inc. | 52,492 | 12,859,490 | |||
The Blackstone Group, Inc., Class A (B) | 218,165 | 10,655,179 | |||
Consumer finance 1.4% | |||||
American Express Company | 106,805 | 12,632,895 | |||
Insurance 2.6% | |||||
Aon PLC | 60,997 | 11,807,189 | |||
The Progressive Corp. | 152,297 | 11,764,943 |
8 | JOHN HANCOCK U.S. QUALITY GROWTH FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Health care 10.7% | $95,939,143 | ||||
Health care equipment and supplies 5.1% | |||||
Abbott Laboratories | 149,198 | 12,483,397 | |||
Baxter International, Inc. | 119,880 | 10,485,904 | |||
Boston Scientific Corp. (A) | 307,355 | 12,506,275 | |||
Medtronic PLC | 96,289 | 10,458,915 | |||
Health care providers and services 2.6% | |||||
UnitedHealth Group, Inc. | 104,720 | 22,757,750 | |||
Life sciences tools and services 1.2% | |||||
Agilent Technologies, Inc. | 143,067 | 10,963,224 | |||
Pharmaceuticals 1.8% | |||||
Eli Lilly & Company | 145,611 | 16,283,678 | |||
Industrials 8.5% | 76,918,678 | ||||
Aerospace and defense 3.3% | |||||
L3Harris Technologies, Inc. | 59,202 | 12,351,905 | |||
Lockheed Martin Corp. | 43,805 | 17,086,578 | |||
Professional services 2.4% | |||||
IHS Markit, Ltd. (A) | 172,866 | 11,561,278 | |||
TransUnion | 130,312 | 10,569,606 | |||
Road and rail 2.8% | |||||
Norfolk Southern Corp. | 50,862 | 9,137,867 | |||
Union Pacific Corp. | 100,083 | 16,211,444 | |||
Information technology 39.4% | 354,310,462 | ||||
Electronic equipment, instruments and components 1.4% | |||||
CDW Corp. | 105,380 | 12,987,031 | |||
IT services 19.6% | |||||
Accenture PLC, Class A | 86,117 | 16,564,605 | |||
Automatic Data Processing, Inc. | 83,196 | 13,429,498 | |||
EPAM Systems, Inc. (A) | 55,185 | 10,061,329 | |||
Ex-Sigma LLC (A)(C)(D) | 510 | 203,108 | |||
Fidelity National Information Services, Inc. | 112,981 | 14,999,358 | |||
Fiserv, Inc. (A) | 120,416 | 12,473,893 | |||
FleetCor Technologies, Inc. (A) | 39,812 | 11,417,285 | |||
Global Payments, Inc. | 90,551 | 14,397,609 | |||
Mastercard, Inc., Class A | 97,221 | 26,402,307 | |||
PayPal Holdings, Inc. (A) | 164,683 | 17,059,512 | |||
VeriSign, Inc. (A) | 50,136 | 9,457,154 | |||
Visa, Inc., Class A | 171,621 | 29,520,528 | |||
Semiconductors and semiconductor equipment 4.7% | |||||
KLA Corp. | 87,983 | 14,028,889 | |||
Marvell Technology Group, Ltd. | 358,535 | 8,952,619 | |||
Micron Technology, Inc. (A) | 196,196 | 8,406,999 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 9 |
Shares | Value | ||||
Information technology (continued) | |||||
Semiconductors and semiconductor equipment (continued) | |||||
Teradyne, Inc. | 181,120 | $10,488,659 | |||
Software 13.7% | |||||
Adobe, Inc. (A) | 66,308 | 18,317,585 | |||
Intuit, Inc. | 46,789 | 12,443,067 | |||
Microsoft Corp. | 550,397 | 76,521,694 | |||
salesforce.com, Inc. (A) | 108,985 | 16,177,733 | |||
Real estate 1.7% | 15,207,995 | ||||
Equity real estate investment trusts 1.7% | |||||
American Tower Corp. | 68,774 | 15,207,995 |
Yield (%) | Shares | Value | |||
Securities lending collateral 0.5% | $4,643,760 | ||||
(Cost $4,643,853) | |||||
John Hancock Collateral Trust (E) | 2.1169(F) | 464,065 | 4,643,760 | ||
Short-term investments 0.7% | $5,629,732 | ||||
(Cost $5,629,732) | |||||
Money market funds 0.7% | 5,629,732 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 1.8787(F) | 5,629,732 | 5,629,732 |
Total investments (Cost $714,059,998) 99.9% | $897,616,096 | ||||
Other assets and liabilities, net 0.1% | 1,323,496 | ||||
Total net assets 100.0% | $898,939,592 |
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund. | |
Security Abbreviations and Legend | |
(A) | Non-income producing security. |
(B) | All or a portion of this security is on loan as of 9-30-19. |
(C) | Direct placement securities are restricted as to resale, and the fund has limited rights to registration under the Securities Act of 1933. For more information on this security refer to the Notes to financial statements. |
(D) | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. |
(E) | Investment is an affiliate of the fund, the advisor and/or subadvisor. This security represents the investment of cash collateral received for securities lending. |
(F) | The rate shown is the annualized seven-day yield as of 9-30-19. |
10 | JOHN HANCOCK U.S. QUALITY GROWTH FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial statements |
Assets | |
Unaffiliated investments, at value (Cost $709,416,145) including $4,318,920 of securities loaned | $892,972,336 |
Affiliated investments, at value (Cost $4,643,853) | 4,643,760 |
Total investments, at value (Cost $714,059,998) | 897,616,096 |
Dividends and interest receivable | 249,506 |
Receivable for fund shares sold | 6,957,328 |
Receivable for securities lending income | 876 |
Other assets | 99,302 |
Total assets | 904,923,108 |
Liabilities | |
Payable for fund shares repurchased | 1,091,153 |
Payable upon return of securities loaned | 4,644,000 |
Payable to affiliates | |
Accounting and legal services fees | 74,893 |
Transfer agent fees | 76,473 |
Distribution and service fees | 230 |
Trustees' fees | 326 |
Other liabilities and accrued expenses | 96,441 |
Total liabilities | 5,983,516 |
Net assets | $898,939,592 |
Net assets consist of | |
Paid-in capital | $718,137,188 |
Total distributable earnings (loss) | 180,802,404 |
Net assets | $898,939,592 |
Net asset value per share | |
Based on net asset value and shares outstanding - the fund has an unlimited number of shares authorized with no par value | |
Class A ($497,035,020 ÷ 28,871,239 shares)1 | $17.22 |
Class C ($22,055,257 ÷ 1,314,273 shares)1 | $16.78 |
Class I ($259,812,068 ÷ 14,955,876 shares) | $17.37 |
Class R2 ($805,536 ÷ 46,355 shares) | $17.38 |
Class R4 ($840,137 ÷ 48,297 shares) | $17.40 |
Class R6 ($99,581,874 ÷ 5,719,356 shares) | $17.41 |
Class NAV ($18,809,700 ÷ 1,080,760 shares) | $17.40 |
Maximum offering price per share | |
Class A (net asset value per share ÷ 95%)2 | $18.13 |
1 | Redemption price per share is equal to net asset value less any applicable contingent deferred sales charge. |
2 | On single retail sales of less than $50,000. On sales of $50,000 or more and on group sales the offering price is reduced. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 11 |
Investment income | |
Dividends | $4,086,980 |
Interest | 71,321 |
Securities lending | 1,703 |
Total investment income | 4,160,004 |
Expenses | |
Investment management fees | 2,394,061 |
Distribution and service fees | 717,216 |
Accounting and legal services fees | 75,220 |
Transfer agent fees | 434,404 |
Trustees' fees | 4,171 |
Custodian fees | 59,077 |
State registration fees | 64,738 |
Printing and postage | 41,060 |
Professional fees | 46,531 |
Other | 25,455 |
Total expenses | 3,861,933 |
Less expense reductions | (31,380) |
Net expenses | 3,830,553 |
Net investment income | 329,451 |
Realized and unrealized gain (loss) | |
Net realized gain (loss) on | |
Unaffiliated investments | 788,626 |
Affiliated investments | (402) |
788,224 | |
Change in net unrealized appreciation (depreciation) of | |
Unaffiliated investments | 42,063,027 |
Affiliated investments | (93) |
42,062,934 | |
Net realized and unrealized gain | 42,851,158 |
Increase in net assets from operations | $43,180,609 |
12 | JOHN HANCOCK U.S. Quality Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Six months ended 9-30-19 (unaudited) | Year ended 3-31-19 | |
Increase (decrease) in net assets | ||
From operations | ||
Net investment income | $329,451 | $1,088,219 |
Net realized gain | 788,224 | 723,086,484 |
Change in net unrealized appreciation (depreciation) | 42,062,934 | (485,932,482) |
Increase in net assets resulting from operations | 43,180,609 | 238,242,221 |
Distributions to shareholders | ||
From earnings | ||
Class A | — | (83,061,817) |
Class C | — | (1,692,850) |
Class I | — | (5,130,366) |
Class R2 | — | (174,632) |
Class R4 | — | (156,581) |
Class R6 | — | (1,983,279) |
Class NAV | — | (267,256,660) |
Total distributions | — | (359,456,185) |
From fund share transactions | ||
Fund share transactions | 77,732,478 | (1,167,772,986) |
Issued in reorganization | 229,828,003 | — |
From fund share transactions | 307,560,481 | (1,167,772,986) |
Total increase (decrease) | 350,741,090 | (1,288,986,950) |
Net assets | ||
Beginning of period | 548,198,502 | 1,837,185,452 |
End of period | $898,939,592 | $548,198,502 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 13 |
Financial highlights |
CLASS A SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $16.23 | $17.94 | $16.89 | $15.33 | $16.44 | $15.50 |
Net investment income (loss)2 | —3 | (0.01) | 0.01 | 0.04 | 0.03 | 0.03 |
Net realized and unrealized gain (loss) on investments | 0.99 | 2.22 | 3.62 | 2.12 | (0.24) | 2.14 |
Total from investment operations | 0.99 | 2.21 | 3.63 | 2.16 | (0.21) | 2.17 |
Less distributions | ||||||
From net investment income | — | (0.03) | (0.03) | (0.04) | (0.05) | — |
From net realized gain | — | (3.89) | (2.55) | (0.56) | (0.85) | (1.23) |
Total distributions | — | (3.92) | (2.58) | (0.60) | (0.90) | (1.23) |
Net asset value, end of period | $17.22 | $16.23 | $17.94 | $16.89 | $15.33 | $16.44 |
Total return (%)4,5 | 6.106 | 12.22 | 21.91 | 14.34 | (1.45) | 14.68 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $497 | $404 | $379 | $343 | $18 | $18 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.027 | 1.10 | 1.10 | 1.11 | 1.19 | 1.33 |
Expenses including reductions | 1.017 | 1.09 | 1.09 | 1.10 | 1.18 | 1.30 |
Net investment income (loss) | (—)7,8 | (0.07) | 0.03 | 0.27 | 0.20 | 0.16 |
Portfolio turnover (%) | 499 | 8810 | 83 | 94 | 90 | 109 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Less than $0.005 per share. |
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
5 | Does not reflect the effect of sales charges, if any. |
6 | Not annualized. |
7 | Annualized. |
8 | Less than 0.005%. |
9 | Excludes in-kind transactions and merger activity. |
10 | Excludes in-kind transactions. |
14 | JOHN HANCOCK U.S. Quality Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS C SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-152 |
Per share operating performance | ||||||
Net asset value, beginning of period | $15.88 | $17.71 | $16.80 | $15.32 | $16.51 | $16.49 |
Net investment loss3 | (0.06) | (0.14) | (0.13) | (0.08) | (0.09) | (0.04) |
Net realized and unrealized gain (loss) on investments | 0.96 | 2.20 | 3.59 | 2.12 | (0.25) | 1.29 |
Total from investment operations | 0.90 | 2.06 | 3.46 | 2.04 | (0.34) | 1.25 |
Less distributions | ||||||
From net realized gain | — | (3.89) | (2.55) | (0.56) | (0.85) | (1.23) |
Net asset value, end of period | $16.78 | $15.88 | $17.71 | $16.80 | $15.32 | $16.51 |
Total return (%)4,5 | 5.676 | 11.44 | 20.95 | 13.53 | (2.24) | 8.206 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $22 | $12 | $18 | $17 | $1 | $1 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.777 | 1.85 | 1.85 | 1.86 | 2.50 | 7.037 |
Expenses including reductions | 1.767 | 1.84 | 1.84 | 1.85 | 1.94 | 2.057 |
Net investment loss | (0.76)7 | (0.85) | (0.72) | (0.48) | (0.54) | (0.42)7 |
Portfolio turnover (%) | 498 | 889 | 83 | 94 | 90 | 10910 |
1 | Six months ended 9-30-19. Unaudited. |
2 | The inception date for Class C shares is 8-28-14. |
3 | Based on average daily shares outstanding. |
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
5 | Does not reflect the effect of sales charges, if any. |
6 | Not annualized. |
7 | Annualized. |
8 | Excludes in-kind transactions and merger activity. |
9 | Excludes in-kind transactions. |
10 | Portfolio turnover is shown for the period from 4-1-14 to 3-31-15. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 15 |
CLASS I SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $16.36 | $18.05 | $16.98 | $15.41 | $16.53 | $15.58 |
Net investment income2 | 0.02 | 0.04 | 0.06 | 0.08 | 0.08 | 0.10 |
Net realized and unrealized gain (loss) on investments | 0.99 | 2.23 | 3.64 | 2.13 | (0.24) | 2.14 |
Total from investment operations | 1.01 | 2.27 | 3.70 | 2.21 | (0.16) | 2.24 |
Less distributions | ||||||
From net investment income | — | (0.07) | (0.08) | (0.08) | (0.11) | (0.06) |
From net realized gain | — | (3.89) | (2.55) | (0.56) | (0.85) | (1.23) |
Total distributions | — | (3.96) | (2.63) | (0.64) | (0.96) | (1.29) |
Net asset value, end of period | $17.37 | $16.36 | $18.05 | $16.98 | $15.41 | $16.53 |
Total return (%)3 | 6.174 | 12.55 | 22.12 | 14.70 | (1.17) | 15.07 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $260 | $115 | $20 | $17 | $10 | $12 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.775 | 0.87 | 0.84 | 0.85 | 0.90 | 1.50 |
Expenses including reductions | 0.765 | 0.86 | 0.83 | 0.84 | 0.88 | 0.94 |
Net investment income | 0.235 | 0.25 | 0.31 | 0.47 | 0.50 | 0.62 |
Portfolio turnover (%) | 496 | 887 | 83 | 94 | 90 | 109 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Annualized. |
6 | Excludes in-kind transactions and merger activity. |
7 | Excludes in-kind transactions. |
16 | JOHN HANCOCK U.S. Quality Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R2 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-152 |
Per share operating performance | ||||||
Net asset value, beginning of period | $16.40 | $18.08 | $17.02 | $15.44 | $16.55 | $16.50 |
Net investment income (loss)3 | (0.01) | (0.04) | (0.02) | 0.03 | 0.01 | —4 |
Net realized and unrealized gain (loss) on investments | 0.99 | 2.25 | 3.64 | 2.14 | (0.25) | 0.05 |
Total from investment operations | 0.98 | 2.21 | 3.62 | 2.17 | (0.24) | 0.05 |
Less distributions | ||||||
From net investment income | — | —4 | (0.01) | (0.03) | (0.02) | — |
From net realized gain | — | (3.89) | (2.55) | (0.56) | (0.85) | — |
Total distributions | — | (3.89) | (2.56) | (0.59) | (0.87) | — |
Net asset value, end of period | $17.38 | $16.40 | $18.08 | $17.02 | $15.44 | $16.55 |
Total return (%)5 | 5.986 | 12.13 | 21.68 | 14.30 | (1.63) | 0.306 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $1 | $1 | $1 | $1 | $—7 | $—7 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.168 | 1.25 | 1.22 | 1.18 | 4.73 | 15.098 |
Expenses including reductions | 1.158 | 1.25 | 1.21 | 1.17 | 1.32 | 13.968 |
Net investment income (loss) | (0.13)8 | (0.22) | (0.11) | 0.19 | 0.06 | —8,9 |
Portfolio turnover (%) | 4910 | 8811 | 83 | 94 | 90 | 10912 |
1 | Six months ended 9-30-19. Unaudited. |
2 | The inception date for Class R2 shares is 3-27-15. |
3 | Based on average daily shares outstanding. |
4 | Less than $0.005 per share. |
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
6 | Not annualized. |
7 | Less than $500,000. |
8 | Annualized. |
9 | Less than 0.005%. |
10 | Excludes in-kind transactions and merger activity. |
11 | Excludes in-kind transactions. |
12 | Portfolio turnover is shown for the period from 4-1-14 to 3-31-15. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 17 |
CLASS R4 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-152 |
Per share operating performance | ||||||
Net asset value, beginning of period | $16.39 | $18.08 | $17.01 | $15.43 | $16.55 | $16.50 |
Net investment income3 | 0.01 | 0.01 | 0.03 | 0.07 | 0.04 | —4 |
Net realized and unrealized gain (loss) on investments | 1.00 | 2.24 | 3.65 | 2.14 | (0.25) | 0.05 |
Total from investment operations | 1.01 | 2.25 | 3.68 | 2.21 | (0.21) | 0.05 |
Less distributions | ||||||
From net investment income | — | (0.05) | (0.06) | (0.07) | (0.06) | — |
From net realized gain | — | (3.89) | (2.55) | (0.56) | (0.85) | — |
Total distributions | — | (3.94) | (2.61) | (0.63) | (0.91) | — |
Net asset value, end of period | $17.40 | $16.39 | $18.08 | $17.01 | $15.43 | $16.55 |
Total return (%)5 | 6.166 | 12.36 | 22.05 | 14.60 | (1.47) | 0.306 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $1 | $1 | $1 | $—7 | $—7 | $—7 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.018 | 1.10 | 1.06 | 1.02 | 4.73 | 15.098 |
Expenses including reductions | 0.908 | 1.00 | 0.95 | 0.91 | 1.13 | 1.188 |
Net investment income | 0.128 | 0.03 | 0.18 | 0.44 | 0.25 | 0.188 |
Portfolio turnover (%) | 499 | 8810 | 83 | 94 | 90 | 10911 |
1 | Six months ended 9-30-19. Unaudited. |
2 | The inception date for Class R4 shares is 3-27-15. |
3 | Based on average daily shares outstanding. |
4 | Less than $0.005 per share. |
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
6 | Not annualized. |
7 | Less than $500,000. |
8 | Annualized. |
9 | Excludes in-kind transactions and merger activity. |
10 | Excludes in-kind transactions. |
11 | Portfolio turnover is shown for the period from 4-1-14 to 3-31-15. |
18 | JOHN HANCOCK U.S. Quality Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R6 SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-152 |
Per share operating performance | ||||||
Net asset value, beginning of period | $16.39 | $18.08 | $17.01 | $15.42 | $16.55 | $16.50 |
Net investment income3 | 0.03 | 0.05 | 0.05 | 0.09 | 0.10 | —4 |
Net realized and unrealized gain (loss) on investments | 0.99 | 2.24 | 3.67 | 2.16 | (0.25) | 0.05 |
Total from investment operations | 1.02 | 2.29 | 3.72 | 2.25 | (0.15) | 0.05 |
Less distributions | ||||||
From net investment income | — | (0.09) | (0.10) | (0.10) | (0.13) | — |
From net realized gain | — | (3.89) | (2.55) | (0.56) | (0.85) | — |
Total distributions | — | (3.98) | (2.65) | (0.66) | (0.98) | — |
Net asset value, end of period | $17.41 | $16.39 | $18.08 | $17.01 | $15.42 | $16.55 |
Total return (%)5 | 6.226 | 12.68 | 22.26 | 14.87 | (1.09) | 0.306 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $100 | $15 | $9 | $1 | $—7 | $—7 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.668 | 0.75 | 0.75 | 0.75 | 4.75 | 15.918 |
Expenses including reductions | 0.658 | 0.74 | 0.74 | 0.73 | 0.73 | 0.818 |
Net investment income | 0.308 | 0.29 | 0.25 | 0.50 | 0.65 | 0.638 |
Portfolio turnover (%) | 499 | 8810 | 83 | 94 | 90 | 10911 |
1 | Six months ended 9-30-19. Unaudited. |
2 | The inception date for Class R6 shares is 3-27-15. |
3 | Based on average daily shares outstanding. |
4 | Less than $0.005 per share. |
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
6 | Not annualized. |
7 | Less than $500,000. |
8 | Annualized. |
9 | Excludes in-kind transactions and merger activity. |
10 | Excludes in-kind transactions. |
11 | Portfolio turnover is shown for the period from 4-1-14 to 3-31-15. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 19 |
CLASS NAV SHARES Period ended | 9-30-191 | 3-31-19 | 3-31-18 | 3-31-17 | 3-31-16 | 3-31-15 |
Per share operating performance | ||||||
Net asset value, beginning of period | $16.38 | $18.07 | $17.00 | $15.42 | $16.55 | $15.58 |
Net investment income2 | 0.03 | 0.03 | 0.07 | 0.10 | 0.10 | 0.12 |
Net realized and unrealized gain (loss) on investments | 0.99 | 2.26 | 3.65 | 2.14 | (0.25) | 2.17 |
Total from investment operations | 1.02 | 2.29 | 3.72 | 2.24 | (0.15) | 2.29 |
Less distributions | ||||||
From net investment income | — | (0.09) | (0.10) | (0.10) | (0.13) | (0.09) |
From net realized gain | — | (3.89) | (2.55) | (0.56) | (0.85) | (1.23) |
Total distributions | — | (3.98) | (2.65) | (0.66) | (0.98) | (1.32) |
Net asset value, end of period | $17.40 | $16.38 | $18.07 | $17.00 | $15.42 | $16.55 |
Total return (%)3 | 6.234 | 12.69 | 22.30 | 14.81 | (1.09) | 15.43 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $19 | $—5 | $1,410 | $1,592 | $1,666 | $2,078 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.656 | 0.74 | 0.73 | 0.73 | 0.74 | 0.72 |
Expenses including reductions | 0.646 | 0.73 | 0.73 | 0.73 | 0.74 | 0.72 |
Net investment income | 0.316 | 0.18 | 0.40 | 0.61 | 0.64 | 0.72 |
Portfolio turnover (%) | 497 | 888 | 83 | 94 | 90 | 109 |
1 | Six months ended 9-30-19. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
4 | Not annualized. |
5 | Less than $500,000. |
6 | Annualized. |
7 | Excludes in-kind transactions and merger activity. |
8 | Excludes in-kind transactions. |
20 | JOHN HANCOCK U.S. Quality Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Notes to financial statements (unaudited) |
SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 21 |
Total value at 9-30-19 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
Investments in securities: | ||||
Assets | ||||
Common stocks | ||||
Communication services | $128,067,693 | $128,067,693 | — | — |
Consumer discretionary | 123,827,660 | 123,827,660 | — | — |
Consumer staples | 23,123,609 | 23,123,609 | — | — |
Financials | 69,947,364 | 69,947,364 | — | — |
Health care | 95,939,143 | 95,939,143 | — | — |
Industrials | 76,918,678 | 76,918,678 | — | — |
Information technology | 354,310,462 | 354,107,354 | — | $203,108 |
Real estate | 15,207,995 | 15,207,995 | — | — |
Securities lending collateral | 4,643,760 | 4,643,760 | — | — |
Short-term investments | 5,629,732 | 5,629,732 | — | — |
Total investments in securities | $897,616,096 | $897,412,988 | — | $203,108 |
22 | JOHN HANCOCK U.S. Quality Growth Fund | SEMIANNUAL REPORT |
SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 23 |
24 | JOHN HANCOCK U.S. Quality Growth Fund | SEMIANNUAL REPORT |
Class | Expense reduction |
Class A | $18,153 |
Class C | 736 |
Class I | 7,938 |
Class R2 | 34 |
Class | Expense reduction |
Class R4 | $32 |
Class R6 | 3,404 |
Class NAV | 654 |
Total | $30,951 |
Class | Rule 12b-1 Fee | Service fee |
Class A | 0.25% | — |
Class C | 1.00% | — |
Class R2 | 0.25% | 0.25% |
Class R4 | 0.25% | 0.10% |
SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 25 |
Class | Distribution and service fees | Transfer agent fees |
Class A | $614,005 | $288,516 |
Class C | 99,442 | 11,699 |
Class I | — | 128,445 |
Class R2 | 2,272 | 54 |
Class R4 | 1,497 | 50 |
Class R6 | — | 5,640 |
Total | $717,216 | $434,404 |
26 | JOHN HANCOCK U.S. Quality Growth Fund | SEMIANNUAL REPORT |
Borrower or Lender | Weighted Average Loan Balance | Days Outstanding | Weighted Average Interest Rate | Interest Income (Expense) |
Lender | $1,500,000 | 3 | 2.340% | $293 |
Six Months Ended 9-30-19 | Year Ended 3-31-19 | |||
Shares | Amount | Shares | Amount | |
Class A shares | ||||
Sold | 1,204,171 | $20,569,2401 | 2,190,898 | $37,187,427 |
Issued in reorganization | 4,540,944 | 75,293,391 | — | — |
Distributions reinvested | — | — | 4,951,957 | 80,912,745 |
Repurchased | (1,781,693) | (30,332,672) | (3,373,280) | (55,260,901) |
Net increase | 3,963,422 | $65,529,959 | 3,769,575 | $62,839,271 |
Class C shares | ||||
Sold | 420,086 | $7,000,4711 | 374,821 | $5,572,801 |
Issued in reorganization | 374,818 | 6,079,328 | — | — |
Distributions reinvested | — | — | 91,024 | 1,459,117 |
Repurchased | (215,492) | (3,587,426) | (724,672) | (13,006,185) |
Net increase (decrease) | 579,412 | $9,492,373 | (258,827) | $(5,974,267) |
Class I shares | ||||
Sold | 5,030,795 | $86,923,7421 | 6,662,479 | $101,675,911 |
Issued in reorganization | 4,260,837 | 71,208,808 | — | — |
Distributions reinvested | — | — | 308,435 | 5,047,263 |
Repurchased | (1,384,980) | (23,764,350) | (1,031,980) | (16,000,869) |
Net increase | 7,906,652 | $134,368,200 | 5,938,934 | $90,722,305 |
Class R2 shares | ||||
Sold | 2,243 | $38,6101 | 5,407 | $89,857 |
Distributions reinvested | — | — | 10,401 | 171,599 |
Repurchased | (12,609) | (219,118) | (3,345) | (57,599) |
Net increase (decrease) | (10,366) | $(180,508) | 12,463 | $203,857 |
SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 27 |
Six Months Ended 9-30-19 | Year Ended 3-31-19 | |||
Shares | Amount | Shares | Amount | |
Class R4 shares | ||||
Sold | 1,597 | $27,5461 | 4,965 | $89,513 |
Distributions reinvested | — | — | 9,493 | 156,581 |
Repurchased | (3,542) | (61,077) | (5,284) | (96,119) |
Net increase (decrease) | (1,945) | $(33,531) | 9,174 | $149,975 |
Class R6 shares | ||||
Sold | 977,230 | $16,841,4371 | 502,744 | $7,838,421 |
Issued in reorganization | 4,614,044 | 77,246,476 | — | — |
Distributions reinvested | — | — | 120,357 | 1,983,279 |
Repurchased | (791,681) | (13,640,102) | (212,973) | (3,444,592) |
Net increase | 4,799,593 | $80,447,811 | 410,128 | $6,377,108 |
Class NAV shares | ||||
Sold | 1,254,640 | $20,975,1571 | 441,456 | $7,977,037 |
Distributions reinvested | — | — | 16,148,421 | 267,256,374 |
Repurchased | (176,908) | (3,038,980) | (94,579,725) | (1,597,324,646) |
Net increase (decrease) | 1,077,732 | $17,936,177 | (77,989,848) | $(1,322,091,235) |
Total net increase (decrease) | 18,314,500 | $307,560,481 | (68,108,401) | $(1,167,772,986) |
1 | Includes in-kind subscriptions of approximately $18.4 million by affiliates of the fund. The cost basis of the contributed securities is equal to the market value of the securities on the date of the subscription. |
28 | JOHN HANCOCK U.S. Quality Growth Fund | SEMIANNUAL REPORT |
Dividends and distributions | |||||||||
Affiliate | Beginning share amount | Shares purchased | Shares sold | Ending share amount | Income distributions received | Capital gain distributions received | Realized gain (loss) | Change in unrealized appreciation (depreciation) | Ending value |
John Hancock Collateral Trust* | — | 2,793,007 | (2,328,942) | 464,065 | — | — | $(402) | $(93) | $4,643,760 |
* | Refer to the Securities lending note within Note 2 for details regarding this investment. |
Issuer, Description | Original acquisition date | Acquisition cost | Beginning share amount | Shares purchased | Shares sold | Ending share amount | Value as a percentage of net assets | Ending value |
Ex-Sigma LLC | 10-31-14 | $4,726,919 | 510 | — | — | 510 | 0.0%* | $203,108 |
* | Less than 0.05%. |
SEMIANNUAL REPORT | JOHN HANCOCK U.S. QUALITY GROWTH FUND | 29 |
Acquiring Fund | Acquired Fund | Net Asset Value of the Acquired Fund | Appreciation of the Acquired Fund's Investment | Shares Redeemed by the Acquired Fund | Shares Issued by the Acquiring Fund | Acquiring Fund Net Assets Prior to Combination | Acquiring Fund Total Net Assets After Combination |
U.S. Quality Growth Fund | John Hancock Funds II U.S. Growth Fund | $229,828,003 | $51,116,210 | 18,999,208 | 13,790,643 | $582,981,914 | $812,809,917 |
Net investment income | $414,558 |
Net realized and unrealized gain (loss) | 54,333,470 |
Increase (decrease) in net assets from operations | $54,748,028 |
30 | JOHN HANCOCK U.S. Quality Growth Fund | SEMIANNUAL REPORT |
Continuation of Investment Advisory and Subadvisory Agreements
Evaluation of Advisory and Subadvisory Agreements by the Board of Trustees
This section describes the evaluation by the Board of Trustees (the Board) of John Hancock Funds III (the Trust) of the Advisory Agreement (the Advisory Agreement) with John Hancock Investment Management, LLC (the Advisor, formerly John Hancock Advisers, LLC) and the Subadvisory Agreement (the Subadvisory Agreement) with Wellington Management Company LLP (the Subadvisor), for John Hancock U.S. Quality Growth Fund (the fund, formerly Strategic Growth Fund). The Advisory Agreement and Subadvisory Agreement are collectively referred to as the Agreements. Prior to the June23-26, 2019 in-person meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the Agreements at an in-person meeting held on May28-30, 2019.
Approval of Advisory and Subadvisory Agreements
At in-person meetings held on June 23-26, 2019, the Board, including the Trustees who are not parties to any Agreement or considered to be interested persons of the Trust under the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees), reapproved for an annual period the continuation of the Advisory Agreement between the Trust and the Advisor and the Subadvisory Agreement between the Advisor and the Subadvisor with respect to the fund.
In considering the Advisory Agreement and the Subadvisory Agreement, the Board received in advance of the meetings a variety of materials relating to the fund, the Advisor and the Subadvisor, including comparative performance, fee and expense information for a peer group of similar funds prepared by an independent third-party provider of fund data, performance information for an applicable benchmark index; and, with respect to the Subadvisor, comparative performance information for comparably managed accounts, as applicable, and other information provided by the Advisor and the Subadvisor regarding the nature, extent and quality of services provided by the Advisor and the Subadvisor under their respective Agreements, as well as information regarding the Advisor's revenues and costs of providing services to the fund and any compensation paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreement are considered, particular focus is given to information concerning fund performance, comparability of fees and total expenses, and profitability. However, the Board notes that the evaluation process with respect to the Advisor and the Subadvisor is an ongoing one. In this regard, the Board also took into account discussions with management and information provided to the Board (including its various committees) at prior meetings with respect to the services provided by the Advisor and the Subadvisor to the fund, including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisor with respect to the fund. The information received and considered by the Board in connection with the May and June meetings and throughout the year was both written and oral. The Board also considered the nature, quality, and extent of non-advisory services, if any, to be provided to the fund by the Advisor's affiliates, including distribution services. The Board considered the Advisory Agreement and the Subadvisory Agreements separately in the course of its review. In doing so, the Board noted the respective roles of the Advisor and Subadvisor in providing services to the fund.
Throughout the process, the Board asked questions of and requested additional information from management. The Board is assisted by counsel for the Trust and the Independent Trustees are also separately assisted by independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements
and discussed the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement with respect to the fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets, and the industry) and did not treat any single factor as determinative, and each Trustee may have attributed different weights to different factors. The Board's conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board's ongoing regular review of fund performance and operations throughout the year.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the fund, the Board reviewed information provided by the Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor's compliance and regulatory history, including its Form ADV. The Board also noted that on a regular basis it receives and reviews information from the Trust's Chief Compliance Officer (CCO) regarding the fund's compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board observed that the scope of services provided by the Advisor, and of the undertakings required of the Advisor in connection with those services, including maintaining and monitoring its own and the fund's compliance programs, risk management programs, liquidity management programs and cybersecurity programs, had expanded over time as a result of regulatory, market and other developments. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the fund, including, but not limited to, general supervision of and coordination of the services provided by the Subadvisor, and is also responsible for monitoring and reviewing the activities of the Subadvisor and third-party service providers. The Board also considered the significant risks assumed by the Advisor in connection with the services provided to the fund including entrepreneurial risk in sponsoring new funds and ongoing risks including investment, operational, enterprise, litigation, regulatory and compliance risk with respect to all funds.
In considering the nature, extent, and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor's management and the quality of the performance of the Advisor's duties, through Board meetings, discussions and reports during the preceding year and through each Trustee's experience as a Trustee of the Trust and of the other trusts in the John Hancock group of funds complex (the John Hancock Fund Complex).
In the course of their deliberations regarding the Advisory Agreement, the Board considered, among other things:
(a) | the skills and competency with which the Advisor has in the past managed the Trust's affairs and its subadvisory relationship, the Advisor's oversight and monitoring of the Subadvisor's investment performance and compliance programs, such as the Subadvisor's compliance with fund policies and objectives, review of brokerage matters, including with respect to trade allocation and best execution and the Advisor's timeliness in responding to performance issues; |
(b) | the background, qualifications and skills of the Advisor's personnel; |
(c) | the Advisor's compliance policies and procedures and its responsiveness to regulatory changes and fund industry developments; |
The Board concluded that the Advisor may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the fund.
Investment performance.In considering the fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the fund's performance results. In connection with the consideration of the Advisory Agreement, the Board:
(a) | reviewed information prepared by management regarding the fund's performance; |
(b) | considered the comparative performance of an applicable benchmark index; |
(c) | considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; and |
(d) | took into account the Advisor's analysis of the fund's performance and its plans and recommendations regarding the Trust's subadvisory arrangements generally. |
The Board noted that while it found the data provided by independent third-party generally useful it recognized its limitations, including in particular that the data may vary depending on the end date selected and the results of the performance comparisons may vary depending on the selection of the peer group. The Board noted that the fund outperformed its benchmark index for the one-year period and underperformed its benchmark index for the three- and five-year and since inception periods ended December 31, 2018. The Board also noted that the fund outperformed its peer group average for the one-, three- and five-year and since inception periods ended December 31, 2018. The Board took into account management's discussion of the fund's performance, including the favorable performance relative to the benchmark for the one-year period and to the peer group for the one-, three- and five-year and since inception periods. The Board concluded that the fund's performancehas generally been in line with or outperformed the historical performance of comparable funds.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of fund data, including, among other data, the fund's contractual and net management fees (and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the fund in light of the nature, extent and quality of the management and advisory and subadvisory services provided by the Advisor and the Subadvisor. The Board considered the fund's ranking within a smaller group of peer funds chosen by the independent third-party provider, as well as the fund's ranking within a broader group of funds. In comparing the fund's contractual and net management fees to those of comparable funds, the Board noted
that such fees include both advisory and administrative costs. The Board noted that net management fees for the fund are higher than the peer group median and that net total expenses for the fund are lower than the peer group median.
The Board took into account management's discussion of the fund's expenses, including that a new, lower fee schedule was approved in September 2018. The Board also took into account management's discussion with respect to the overall management fee and the fees of the Subadvisor, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee, in each case in light of the services rendered for those amounts and the risks undertaken by the Advisor. The Board also noted that the Advisor pays the subadvisory fee, and that such fees are negotiated at arm's length with respect to the Subadvisor. In addition, the Board took into account that management had agreed to implement an overall fee waiver across the complex, including the fund, which is discussed further below. The Board also noted actions taken over the past several years to reduce the fund's operating expenses. The Board also noted that, in addition, the Advisor is currently waiving fees and/or reimbursing expenses with respect to the fund and that the fund has breakpoints in its contractual management fee schedule that reduces management fees as assets increase. The Board also noted that the fund's distributor, an affiliate of the Advisor, has agreed to waive a portion of its Rule 12b-1 fee for a share class of the fund. The Board noted that the fund has a voluntary fee waiver and/or expense reimbursement, which reduces certain expenses of the fund. The Board reviewed information provided by the Advisor concerning the investment advisory fee charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the John Hancock Fund Complex) having similar investment mandates, if any. The Board considered any differences between the Advisor's and Subadvisor's services to the fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee paid with respect to the fund is reasonable in light of the nature, extent and quality of the services provided to the fund under the Advisory Agreement.
Profitability/Fall out benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor's relationship with the Trust, the Board:
(a) | reviewed financial information of the Advisor; |
(b) | reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to the fund; |
(c) | received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole and with respect to the fund; |
(d) | received information with respect to the Advisor's allocation methodologies used in preparing the profitability data and considered that the Advisor hired an independent third-party consultant to provide an analysis of the Advisor's allocation methodologies; |
(e) | considered that the John Hancock insurance companies that are affiliates of the Advisor, as shareholders of the Trust directly or through their separate accounts, receive certain tax credits or deductions relating to foreign taxes paid and dividends received by certain funds of the Trust and noted that these tax benefits, which are not available to participants in qualified retirement plans under applicable income tax law, are reflected in the profitability information reviewed by the Board; |
(f) | considered that the Advisor also provides administrative services to the fund on a cost basis pursuant to an administrative services agreement; |
(g) | noted that affiliates of the Advisor provide transfer agency services and distribution services to the fund, and that the fund's distributor also receives Rule 12b-1 payments to support distribution of the fund; |
(h) | noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the fund; |
(i) | noted that the subadvisory fee for the fund is paid by the Advisor and is negotiated at arm's length; |
(j) | considered the Advisor's ongoing costs and expenditures necessary to improve services, meet new regulatory and compliance requirements, and adapt to other challenges impacting the fund industry; and |
(k) | considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the fund and the risks it assumes as Advisor, including entrepreneurial, operational, reputational, litigation and regulatory risk. |
Based upon its review, the Board concluded that the level of profitability, if any, of the Advisor and its affiliates from their relationship with the fund was reasonable and not excessive.
Economies of scale. In considering the extent to which economies of scale would be realized as the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders, the Board:
(a) | considered that the Advisor has contractually agreed to waive a portion of its management fee for certain funds of the John Hancock Fund Complex, including the fund (the participating portfolios) or otherwise reimburse the expenses of the participating portfolios (the reimbursement). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund; |
(b) | reviewed the fund's advisory fee structure and concluded that: (i) the fund's fee structure contains breakpoints at the subadvisory fee level and that such breakpoints are reflected as breakpoints in the advisory fees for the fund; and (ii) although economies of scale cannot be measured with precision, these arrangements permit shareholders of the fund to benefit from economies of scale if the fund grows. The Board also took into account management's discussion of the fund's advisory fee structure; and |
(c) | the Board also considered the effect of the fund's growth in size on its performance and fees. The Board also noted that if the fund's assets increase over time, the fund may realize other economies of scale. |
Approval of Subadvisory Agreement
In making its determination with respect to approval of the Subadvisory Agreement, the Board reviewed:
(1) | information relating to the Subadvisor's business, including current subadvisory services to the Trust (and other funds in the John Hancock Fund Complex); |
(2) | the historical and current performance of the fund and comparative performance information relating to an applicable benchmark index and comparable funds; and |
(3) | the subadvisory fee for the fund, including any breakpoints, and to the extent available, comparable fee information prepared by an independent third party provider of fund data. |
Nature, extent, and quality of services. With respect to the services provided by the Subadvisor, the Board received information provided to the Board by the Subadvisor, including the Subadvisor's Form ADV, as well as took into account information presented throughout the past year. The Board considered the Subadvisor's current level of staffing and its overall resources, as well as received information relating to the Subadvisor's compensation program. The Board reviewed the Subadvisor's history and investment experience, as well as information regarding the
qualifications, background, and responsibilities of the Subadvisor's investment and compliance personnel who provide services to the fund. The Board also considered, among other things, the Subadvisor's compliance program and any disciplinary history. The Board also considered the Subadvisor's risk assessment and monitoring process. The Board reviewed the Subadvisor's regulatory history, including whether it was involved in any regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular, periodic reviews of the Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust's CCO and his staff conduct regular, periodic compliance reviews with the Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of the Subadvisor and procedures reasonably designed to assure compliance with the federal securities laws. The Board also took into account the financial condition of the Subadvisor.
The Board considered the Subadvisor's investment process and philosophy. The Board took into account that the Subadvisor's responsibilities include the development and maintenance of an investment program for the fund that is consistent with the fund's investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services. The Board also received information with respect to the Subadvisor's brokerage policies and practices, including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the fund, the Board noted that the fees under the Subadvisory Agreement are paid by the Advisor and not the fund. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreement.
The Board also relied on the ability of the Advisor to negotiate the Subadvisory Agreement with the Subadvisor, which is not affiliated with the Advisor, and the fees thereunder at arm's length. As a result, the costs of the services to be provided and the profits to be realized by the Subadvisor from its relationship with the Trust were not a material factor in the Board's consideration of the Subadvisory Agreement.
The Board also received information regarding the nature and scope (including their significance to the Advisor and its affiliates and to the Subadvisor) of any material relationships with respect to the Subadvisor, which include arrangements in which the Subadvisor or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreement.
In addition, the Board considered other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor's relationship with the fund, such as the opportunity to provide advisory services to additional funds in the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays a subadvisory fee to the Subadvisor. As noted above, the Board also considered the fund's subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the fund as included in the report prepared by the independent third party provider of fund data, to the extent available. The Board noted that the fund's subadvisory fees are below the peer group median. The Board also took into account the subadvisory fees paid by the Advisor to the Subadvisor with respect to the fund and compared them to fees charged by the Subadvisor to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered the fund's performance as compared to the fund's peer group and the benchmark index and noted that the Board reviews information about the fund's performance results at its regularly scheduled meetings. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor. The Board was mindful of the Advisor's focus on the Subadvisor's performance. The Board also noted the Subadvisor's long-term performance record for similar accounts, as applicable.
The Board's decision to approve the Subadvisory Agreement was based on a number of determinations, including the following:
(1) | the Subadvisor has extensive experience and demonstrated skills as a manager; |
(2) | the performance of the fund has generally been in line with or outperformed the historical performance of comparable funds; |
(3) | the subadvisory fee is reasonable in relation to the level and quality of services being provided under the Subadvisory Agreement; and |
(4) | noted that the subadvisory fees are paid by the Advisor not the fund and that the subadvisory fee breakpoints are reflected as breakpoints in the advisory fees for the fund in order to permit shareholders to benefit from economies of scale if the fund grows. |
* * *
Based on the Board's evaluation of all factors that the Board deemed to be material, including those factors described above, the Board, including the Independent Trustees, concluded that renewal of the Advisory Agreement and the Subadvisory Agreement would be in the best interest of the fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreement for an additional one-year period.
Initial Board Consideration of Wellington Management Company LLP Subadvisory Agreement
At its in-person meeting held on September 11-13, 2018, the Board, including the Independent Trustees, approved the Wellington Management Company LLP (Wellington) Subadvisory Agreement (the Wellington Subadvisory Agreement) between the Advisor and Wellington (the Subadvisor) with respect to the Fund.
In considering the Wellington Subadvisory Agreement, the Board received in advance of the meeting a variety of materials relating to the Fund and Wellington including comparative performance, fee and expense information of Wellington and Manulife Investment Management (US) LLC (Manulife IM (US), formerly John Hancock Asset Management a division of Manulife Asset Management (US) LLC); performance information for relevant indices; and other pertinent information, such as comparative performance information for comparably managed accounts, as applicable; and other information provided by Wellington regarding the nature, extent and quality of services to be provided by Wellington under the Wellington Subadvisory Agreement. The Board also took into account discussions with management and information provided to the Board with respect to the services to be provided by Wellington to the Fund. The Board also received an in-person presentation from Wellington regarding its firm and the proposed strategy for the Fund, during which the Board had the opportunity to ask questions of Wellington. The information received and considered by the Board was both written and oral.
Throughout the process, the Board asked questions of and requested additional information from management. The Board was assisted by counsel for the Trust and the Independent Trustees were also separately assisted by
independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed Wellington Subadvisory Agreement and discussed the approval of the Agreement in private sessions with their independent legal counsel at which no representatives of management were present.
In approving the Wellington Subadvisory Agreement, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets and the industry) and did not treat any single factor as determinative, and each Trustee may have attributed different weights to different factors.
Approval of Wellington Subadvisory Agreement
In making its determination with respect to approval of the Wellington Subadvisory Agreement, the Board reviewed (i) information relating to Wellington's business; (ii) the historical performance of the Fund under the management of Manulife IM (US), which included comparative performance information of the Fund and the Fund's previous benchmark index and the performance of a comparable composite managed by Wellington; (iii) the subadvisory fee for the Fund; and (iv) information relating to the nature and scope of any material relationships and their significance to the Fund's Advisor and the Subadvisor. The Board also considered that the subadvisory fee rates for the Fund under the Wellington Subadvisory Agreement: (i) are lower or equal to the rates under the Manulife IM (US) Subadvisory Agreement depending on the Fund's level of assets; (ii) are paid by the Advisor not the Fund; (iii) are a product of arms-length negotiation between the Advisor and Wellington; and (iv) are reasonable. In addition, approval of the Wellington Subadvisory Agreement will not result in any increase in the advisory fees for the Fund and an amendment to the Fund's advisory agreement will have the effect of reducing the Fund's the advisory fees at all asset levels.
Nature, extent, and quality of services. With respect to the services to be provided to the Fund by Wellington, the Board received information provided to the Board by Wellington, which included an in-person presentation from Wellington regarding its firm and proposed investment strategy for the Fund. The Board considered Wellington's current level of staffing and its overall resources. The Board reviewed Wellington's history and investment experience, as well as information regarding the qualifications, background, and responsibilities of Wellington's investment and compliance personnel who will provide services to the Fund. The Board also considered, among other things, Wellington's compliance program and any disciplinary history. The Board also considered Wellington's risk assessment and monitoring processes. The Board reviewed Wellington's regulatory history, including whether it was currently involved in any regulatory actions or investigations as well as material litigation, and any settlements and mitigating actions undertaken, as appropriate. The Board noted that the Advisor would conduct regular periodic reviews of Wellington and its operations in regard to the Fund, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust's Chief Compliance Officer and his staff would conduct regular, periodic compliance reviews with Wellington and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of Wellington and procedures reasonably designed by it to assure compliance with the federal securities laws. The Board also took into account the financial condition of Wellington.
The Board considered Wellington's investment process and philosophy. The Board took into account that Wellington's responsibilities will include the development and maintenance of an investment program for the Fund that is consistent with the Fund's investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance
of these services. The Board also received information with respect to Wellington's brokerage policies and practices, including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by Wellington and the profitability to Wellington of its relationship with the Fund, the Board noted that the fees under the Wellington Subadvisory Agreement are paid by the Advisor and not the Fund. The Board also noted that there will be no increase in the advisory fees paid by the Fund as a consequence of the execution of the Wellington Subadvisory Agreement and that a proposed amendment to the Fund's advisory agreement will have the effect of reducing the Fund's the advisory fees at all asset levels. The Board noted that the subadvisory fees under the Wellington Subadvisory Agreement would be lower than or equal to the fees under the Manulife IM (US) Subadvisory Agreement depending on the Fund's level of assets.
The Board also relied on the ability of the Advisor to negotiate the Wellington Subadvisory Agreement with Wellington, which is not affiliated with the Advisor, and the fees thereunder at arm's length. As a result, the costs of the services to be provided and the profits to be realized by Wellington from its relationship with the Trust were not a material factor in the Board's consideration of the Wellington Subadvisory Agreement.
Trustees Hassell H. McClellan,Chairperson Officers Andrew G. Arnott Francis V. Knox, Jr. Charles A. Rizzo Salvatore Schiavone Christopher (Kit) Sechler | Investment advisor John Hancock Investment Management LLC Subadvisor Wellington Management Company LLP Portfolio Manager John A. Boselli, CFA Principal distributor John Hancock Investment Management Distributors LLC Custodian State Street Bank and Trust Company Transfer agent John Hancock Signature Services, Inc. Legal counsel K&L Gates LLP |
* Member of the Audit Committee
† Non-Independent Trustee
The fund's proxy voting policies and procedures, as well as the fund proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.
All of the fund's holdings as of the end of the third month of every fiscal quarter are filed with the SEC on Form N-PORT within 60 days of the end of the fiscal quarter. The fund's Form N-PORT filings are available on our website and the SEC's website, sec.gov.
We make this information on your fund, as well asmonthly portfolio holdings, and other fund details available on our website at jhinvestments.com or by calling 800-225-5291.
You can also contact us: | |||
800-225-5291 jhinvestments.com | Regular mail: John Hancock Signature Services, Inc. | Express mail: John Hancock Signature Services, Inc. |
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DOMESTIC EQUITY FUNDS Blue Chip Growth Classic Value Disciplined Value Disciplined Value Mid Cap Equity Income Financial Industries Fundamental All Cap Core Fundamental Large Cap Core New Opportunities Regional Bank Small Cap Core Small Cap Growth Small Cap Value U.S. Global Leaders Growth U.S. Quality Growth GLOBAL AND INTERNATIONAL EQUITY FUNDS Disciplined Value International Emerging Markets Emerging Markets Equity Fundamental Global Franchise Global Equity Global Shareholder Yield Global Thematic Opportunities International Dynamic Growth International Growth International Small Company | INCOME FUNDS Bond California Tax-Free Income Emerging Markets Debt Floating Rate Income Government Income High Yield High Yield Municipal Bond Income Investment Grade Bond Money Market Short Duration Bond Short Duration Credit Opportunities Strategic Income Opportunities Tax-Free Bond ALTERNATIVE AND SPECIALTY FUNDS Absolute Return Currency Alternative Asset Allocation Disciplined Alternative Yield Diversified Macro Infrastructure Multi-Asset Absolute Return Seaport Long/Short |
A fund's investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. To obtain a prospectus, contact your financial professional, call John Hancock Investment Management at 800-225-5291, or visit our website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
ASSET ALLOCATION Balanced Income Allocation Multi-Index Lifetime Portfolios Multi-Index Preservation Portfolios Multimanager Lifestyle Portfolios Multimanager Lifetime Portfolios Retirement Income 2040 EXCHANGE-TRADED FUNDS John Hancock Multifactor Consumer Discretionary ETF John Hancock Multifactor Consumer Staples ETF John Hancock Multifactor Developed International ETF John Hancock Multifactor Emerging Markets ETF John Hancock Multifactor Energy ETF John Hancock Multifactor Financials ETF John Hancock Multifactor Healthcare ETF John Hancock Multifactor Industrials ETF John Hancock Multifactor Large Cap ETF John Hancock Multifactor Materials ETF John Hancock Multifactor Media and John Hancock Multifactor Mid Cap ETF John Hancock Multifactor Small Cap ETF John Hancock Multifactor Technology ETF John Hancock Multifactor Utilities ETF | ENVIRONMENTAL, SOCIAL, AND ESG All Cap Core ESG Core Bond ESG International Equity ESG Large Cap Core CLOSED-END FUNDS Financial Opportunities Hedged Equity & Income Income Securities Trust Investors Trust Preferred Income Preferred Income II Preferred Income III Premium Dividend Tax-Advantaged Dividend Income Tax-Advantaged Global Shareholder Yield |
John Hancock Multifactor ETF shares are bought and sold at market price (not NAV), and are not individually redeemed
from the fund. Brokerage commissions will reduce returns.
John Hancock ETFs are distributed by Foreside Fund Services, LLC, and are subadvised by Dimensional Fund Advisors LP.
Foreside is not affiliated with John Hancock Investment Management Distributors LLC or Dimensional Fund Advisors LP.
Dimensional Fund Advisors LP receives compensation from John Hancock in connection with licensing rights to the
John Hancock Dimensional indexes. Dimensional Fund Advisors LP does not sponsor, endorse, or sell, and makes no
representation as to the advisability of investing in, John Hancock Multifactor ETFs.
John Hancock Investment Management
A trusted brand
John Hancock Investment Management is a premier asset manager
representing one of America's most trusted brands, with a heritage of
financial stewardship dating back to 1862. Helping our shareholders
pursue their financial goals is at the core of everything we do. It's why
we support the role of professional financial advice and operate with
the highest standards of conduct and integrity.
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We serve investors globally through a unique multimanager approach:
We search the world to find proven portfolio teams with specialized
expertise for every strategy we offer, then we apply robust investment
oversight to ensure they continue to meet our uncompromising
standards and serve the best interests of our shareholders.
Results for investors
Our unique approach to asset management enables us to provide
a diverse set of investments backed by some of the world's best
managers, along with strong risk-adjusted returns across asset classes.
John Hancock Investment Management Distributors LLC n Member FINRA, SIPC
200 Berkeley Street n Boston, MA 02116-5010 n 800-225-5291 n jhinvestments.com
This report is for the information of the shareholders of John Hancock U.S. Quality Growth Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.
MF975107 | 393SA 9/19 11/19 |
ITEM 2. CODE OF ETHICS.
Not applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The registrant has adopted procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees. A copy of the procedures is filed as an exhibit to this Form N-CSR. See attached “John Hancock Funds – Nominating and Governance Committee Charter”.
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 13. EXHIBITS.
(a)(1) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.
(b)(1) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.
(c)(1) Submission of Matters to a Vote of Security Holders is attached. See attached “John Hancock Funds – Nominating and Governance Committee Charter”.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
John Hancock Funds III
By: | /s/ Andrew Arnott |
Andrew Arnott | |
President | |
Date: | November 18, 2019 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Andrew Arnott |
Andrew Arnott | |
President | |
Date: | November 18, 2019 |
By: | /s/ Charles A. Rizzo |
Charles A. Rizzo | |
Chief Financial Officer | |
Date: | November 18, 2019 |