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 number811- 1677
John Hancock Capital Series
(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: | October 31 | |
Date of reporting period: | April 30, 2019 |
ITEM 1. REPORTS TO STOCKHOLDERS.
John Hancock
U.S. Global Leaders Growth Fund
Semiannual report 4/30/19
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 shares) 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,
The six months ended April 30, 2019, were a study in contrasts. The final months of 2018 were very volatile; the markets lost ground as fears of slowing economic growth, mounting trade tensions between the United States and China, and a pullback in oil prices spooked investors. Many of those fears were quelled as favorable earnings reports, early signs of progress with the China trade dispute, and signals from the U.S. Federal Reserve (Fed) that interest-rate hikes were on hold sparked a market rebound during the first four months of 2019. Subsequent to period end, however, we saw reignited trade tensions with China and Mexico partially offset by more dovish comments on interest rates from the Fed.
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 turbulence 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, which are subject to change at any time. Investing involves risks, including the potential loss of principal. Diversification does not guarantee a profit or eliminate the risk of a loss. It is not possible to invest directly in an index. For more up-to-date information, please visit our website at jhinvestments.com.
John Hancock
U.S. Global Leaders Growth Fund
INVESTMENT OBJECTIVE
The fund seeks long-term growth of capital.
AVERAGE ANNUAL TOTAL RETURNS AS OF 4/30/19 (%)
The Russell 1000 Growth Index is an unmanaged index of companies in the Russell 1000 Index (the 1,000 largest U.S. publicly traded companies) with high 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.
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 4/30/19 (%)
TOP 10 HOLDINGS AS OF 4/30/19 (%)
Ecolab, Inc. | 4.6 |
Yum! Brands, Inc. | 4.6 |
Visa, Inc., Class A | 4.3 |
Autodesk, Inc. | 4.2 |
Microsoft Corp. | 4.2 |
salesforce.com, Inc. | 4.2 |
Amazon.com, Inc. | 4.2 |
The Walt Disney Company | 4.1 |
Equinix, Inc. | 4.0 |
UnitedHealth Group, Inc. | 4.0 |
TOTAL | 42.4 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
A note about risks
The fund is 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 APRIL 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 | 14.93 | 12.78 | 15.00 | 9.68 | 82.45 | 304.41 | |
Class B | 15.09 | 12.85 | 14.89 | 10.08 | 83.02 | 300.80 | |
Class C | 19.08 | 13.09 | 14.73 | 14.03 | 84.97 | 294.99 | |
Class I1 | 21.26 | 14.23 | 15.95 | 15.59 | 94.53 | 339.40 | |
Class R21,2 | 20.81 | 13.77 | 15.51 | 15.37 | 90.63 | 322.87 | |
Class R61,2 | 21.39 | 14.36 | 15.92 | 15.64 | 95.60 | 338.29 | |
Index 1† | 17.43 | 14.50 | 16.96 | 12.09 | 96.84 | 379.00 | |
Index 2† | 13.49 | 11.63 | 15.32 | 9.76 | 73.32 | 316.02 |
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%, 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, and Class R6 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 prospectus 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 June 30, 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 | ||
Gross | 1.16 | 1.91 | 1.91 | 0.92 | 1.31 | 0.81 | |
Net (%) | 1.15 | 1.90 | 1.90 | 0.91 | 1.30 | 0.80 |
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 Growth 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 $10,000 investment in John Hancock U.S. Global Leaders Growth Fund for the share classes and periods indicated, assuming all distributions were reinvested. For comparison, we've shown the same investment in two separate indexes.
Start date | With maximum sales charge ($) | Without sales charge ($) | Index 1 ($) | Index 2 ($) | |
Class B3 | 4-30-09 | 40,080 | 40,080 | 47,900 | 41,602 |
Class C3 | 4-30-09 | 39,499 | 39,499 | 47,900 | 41,602 |
Class I1 | 4-30-09 | 43,940 | 43,940 | 47,900 | 41,602 |
Class R21,2 | 4-30-09 | 42,287 | 42,287 | 47,900 | 41,602 |
Class R61,2 | 4-30-09 | 43,829 | 43,829 | 47,900 | 41,602 |
The Russell 1000 Growth Index is an unmanaged index of companies in the Russell 1000 Index (the 1,000 largest U.S. publicly traded companies) with high price-to-book ratios and higher forecasted growth values.
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 prospectus. |
2 | Class R2 and Class R6 shares were first offered on 3-1-12 and 9-1-11, respectively. 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 |
6 | JOHN HANCOCK U.S. GLOBAL LEADERS GROWTH FUND | SEMIANNUAL REPORT |
Account value on 11-1-2018 | Ending value on 4-30-2019 | Expenses paid during period ended 4-30-20191 | Annualized expense ratio | ||
Class A | Actual expenses/actual returns | $1,000.00 | $1,154.40 | $6.20 | 1.16% |
Hypothetical example | 1,000.00 | 1,019.00 | 5.81 | 1.16% | |
Class B | Actual expenses/actual returns | 1,000.00 | 1,150.30 | 10.18 | 1.91% |
Hypothetical example | 1,000.00 | 1,015.30 | 9.54 | 1.91% | |
Class C | Actual expenses/actual returns | 1,000.00 | 1,150.20 | 10.18 | 1.91% |
Hypothetical example | 1,000.00 | 1,015.30 | 9.54 | 1.91% | |
Class I | Actual expenses/actual returns | 1,000.00 | 1,155.90 | 4.92 | 0.92% |
Hypothetical example | 1,000.00 | 1,020.20 | 4.61 | 0.92% | |
Class R2 | Actual expenses/actual returns | 1,000.00 | 1,153.70 | 6.89 | 1.29% |
Hypothetical example | 1,000.00 | 1,018.40 | 6.46 | 1.29% | |
Class R6 | Actual expenses/actual returns | 1,000.00 | 1,156.40 | 4.33 | 0.81% |
Hypothetical example | 1,000.00 | 1,020.80 | 4.06 | 0.81% |
1 | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
SEMIANNUAL REPORT | JOHN HANCOCK U.S. GLOBAL LEADERS GROWTH FUND | 7 |
Fund’s investments |
Shares | Value | ||||
Common stocks 98.3% | $1,468,960,924 | ||||
(Cost $888,588,982) | |||||
Communication services 10.5% | 157,182,902 | ||||
Entertainment 4.0% | |||||
The Walt Disney Company | 442,076 | 60,551,150 | |||
Interactive media and services 6.5% | |||||
Alphabet, Inc., Class C (A) | 47,848 | 56,866,391 | |||
Facebook, Inc., Class A (A) | 205,612 | 39,765,361 | |||
Consumer discretionary 22.0% | 327,817,407 | ||||
Hotels, restaurants and leisure 4.6% | |||||
Yum! Brands, Inc. | 651,466 | 68,006,536 | |||
Internet and direct marketing retail 7.2% | |||||
Amazon.com, Inc. (A) | 32,204 | 62,041,650 | |||
Booking Holdings, Inc. (A) | 24,808 | 46,018,592 | |||
Specialty retail 6.6% | |||||
Lowe's Companies, Inc. | 344,367 | 38,961,682 | |||
The TJX Companies, Inc. | 829,277 | 45,510,722 | |||
Ulta Beauty, Inc. (A) | 41,323 | 14,420,901 | |||
Textiles, apparel and luxury goods 3.6% | |||||
NIKE, Inc., Class B | 601,814 | 52,857,324 | |||
Consumer staples 6.7% | 100,534,066 | ||||
Food products 2.9% | |||||
Mondelez International, Inc., Class A | 863,347 | 43,901,195 | |||
Personal products 3.8% | |||||
The Estee Lauder Companies, Inc., Class A | 329,625 | 56,632,871 | |||
Health care 17.6% | 263,388,589 | ||||
Biotechnology 2.9% | |||||
Regeneron Pharmaceuticals, Inc. (A) | 124,610 | 42,758,675 | |||
Health care equipment and supplies 8.0% | |||||
Abbott Laboratories | 740,878 | 58,944,254 | |||
Becton, Dickinson and Company | 203,118 | 48,898,627 | |||
Danaher Corp. | 94,330 | 12,493,065 | |||
Health care providers and services 4.0% | |||||
UnitedHealth Group, Inc. | 253,915 | 59,179,969 | |||
Pharmaceuticals 2.7% | |||||
Novo Nordisk A/S, ADR | 838,890 | 41,113,999 |
8 | JOHN HANCOCK U.S. GLOBAL LEADERS GROWTH FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Information technology 29.9% | $447,367,092 | ||||
IT services 14.1% | |||||
Automatic Data Processing, Inc. | 275,910 | 45,356,845 | |||
FleetCor Technologies, Inc. (A) | 204,809 | 53,444,909 | |||
PayPal Holdings, Inc. (A) | 417,885 | 47,124,891 | |||
Visa, Inc., Class A | 395,283 | 64,996,384 | |||
Software 15.8% | |||||
Autodesk, Inc. (A) | 354,615 | 63,195,939 | |||
Intuit, Inc. | 192,480 | 48,324,029 | |||
Microsoft Corp. | 480,271 | 62,723,393 | |||
salesforce.com, Inc. (A) | 376,176 | 62,200,702 | |||
Materials 7.6% | 112,825,527 | ||||
Chemicals 7.6% | |||||
Ecolab, Inc. | 370,874 | 68,270,483 | |||
Linde PLC | 247,171 | 44,555,044 | |||
Real estate 4.0% | 59,845,341 | ||||
Equity real estate investment trusts 4.0% | |||||
Equinix, Inc. | 131,615 | 59,845,341 | |||
Yield (%) | Shares | Value | |||
Short-term investments 2.3% | $33,840,157 | ||||
(Cost $33,840,157) | |||||
Money market funds 2.3% | 33,840,157 | ||||
State Street Institutional U.S. Government Money Market Fund, Premier Class | 2.3673(B) | 33,840,157 | 33,840,157 |
Total investments (Cost $922,429,139) 100.6% | $1,502,801,081 | ||||
Other assets and liabilities, net (0.6%) | (8,289,418) | ||||
Total net assets 100.0% | $1,494,511,663 |
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 4-30-19. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK U.S. GLOBAL LEADERS GROWTH FUND | 9 |
Financial statements |
Assets | |
Unaffiliated investments, at value (Cost $922,429,139) | $1,502,801,081 |
Dividends and interest receivable | 871,182 |
Receivable for fund shares sold | 3,456,519 |
Receivable for investments sold | 14,301,267 |
Other assets | 139,618 |
Total assets | 1,521,569,667 |
Liabilities | |
Payable for investments purchased | 23,019,769 |
Payable for fund shares repurchased | 2,404,356 |
Payable to affiliates | |
Investment management fees | 884,073 |
Accounting and legal services fees | 103,079 |
Transfer agent fees | 126,153 |
Distribution and service fees | 208,543 |
Trustees' fees | 982 |
Other liabilities and accrued expenses | 311,049 |
Total liabilities | 27,058,004 |
Net assets | $1,494,511,663 |
Net assets consist of | |
Paid-in capital | $877,819,536 |
Total distributable earnings (loss) | 616,692,127 |
Net assets | $1,494,511,663 |
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 ($690,215,405 ÷ 13,740,211 shares)1 | $50.23 |
Class B ($10,928,861 ÷ 265,297 shares)1 | $41.19 |
Class C ($72,378,312 ÷ 1,756,037 shares)1 | $41.22 |
Class I ($546,888,344 ÷ 10,041,767 shares) | $54.46 |
Class R2 ($1,767,445 ÷ 33,266 shares) | $53.13 |
Class R6 ($172,333,296 ÷ 3,142,530 shares) | $54.84 |
Maximum offering price per share | |
Class A (net asset value per share ÷ 95%)2 | $52.87 |
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. |
10 | JOHN HANCOCK U.S. Global Leaders Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Investment income | |
Dividends | $7,832,875 |
Interest | 382,794 |
Securities lending | 733 |
Less foreign taxes withheld | (92,039) |
Total investment income | 8,124,363 |
Expenses | |
Investment management fees | 5,098,863 |
Distribution and service fees | 1,180,038 |
Accounting and legal services fees | 166,934 |
Transfer agent fees | 753,329 |
Trustees' fees | 13,390 |
Custodian fees | 84,371 |
State registration fees | 57,828 |
Printing and postage | 111,776 |
Professional fees | 37,408 |
Other | 23,608 |
Total expenses | 7,527,545 |
Less expense reductions | (51,223) |
Net expenses | 7,476,322 |
Net investment income | 648,041 |
Realized and unrealized gain (loss) | |
Net realized gain (loss) on | |
Unaffiliated investments | 38,381,045 |
Affiliated investments | 201 |
38,381,246 | |
Change in net unrealized appreciation (depreciation) of | |
Unaffiliated investments | 151,479,790 |
151,479,790 | |
Net realized and unrealized gain | 189,861,036 |
Increase in net assets from operations | $190,509,077 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK U.S. Global Leaders Growth Fund | 11 |
Six months ended 4-30-19 (unaudited) | Year ended 10-31-18 | |
Increase (decrease) in net assets | ||
From operations | ||
Net investment income (loss) | $648,041 | $(877,266) |
Net realized gain | 38,381,246 | 184,856,299 |
Change in net unrealized appreciation (depreciation) | 151,479,790 | (13,252,335) |
Increase in net assets resulting from operations | 190,509,077 | 170,726,698 |
Distributions to shareholders | ||
From net investment income and net realized gain | ||
Class A | (69,118,650) | (40,115,324) |
Class B | (1,675,247) | (1,232,810) |
Class C | (9,327,579) | (8,254,625) |
Class I | (72,648,617) | (42,870,457) |
Class R2 | (169,763) | (354,874) |
Class R6 | (15,029,985) | (7,877,251) |
Total distributions | (167,969,841) | (100,705,341) |
From fund share transactions | (62,180,343) | 6,463,786 |
Total increase (decrease) | (39,641,107) | 76,485,143 |
Net assets | ||
Beginning of period | 1,534,152,770 | 1,457,667,627 |
End of period | $1,494,511,663 | $1,534,152,770 |
12 | JOHN HANCOCK U.S. Global Leaders Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial highlights |
CLASS A SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $49.26 | $47.15 | $41.00 | $43.87 | $45.02 | $42.25 |
Net investment income (loss)2 | —3 | (0.07) | (0.05) | (0.03) | 0.07 | 0.11 |
Net realized and unrealized gain (loss) on investments | 6.60 | 5.51 | 8.31 | (0.13) | 4.98 | 3.90 |
Total from investment operations | 6.60 | 5.44 | 8.26 | (0.16) | 5.05 | 4.01 |
Less distributions | ||||||
From net investment income | — | — | — | (0.04) | (0.10) | (0.03) |
From net realized gain | (5.63) | (3.33) | (2.11) | (2.67) | (6.10) | (1.21) |
Total distributions | (5.63) | (3.33) | (2.11) | (2.71) | (6.20) | (1.24) |
Net asset value, end of period | $50.23 | $49.26 | $47.15 | $41.00 | $43.87 | $45.02 |
Total return (%)4,5 | 15.446 | 12.11 | 21.12 | (0.42) | 13.19 | 9.74 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $690 | $612 | $577 | $608 | $660 | $600 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.167 | 1.16 | 1.17 | 1.18 | 1.18 | 1.19 |
Expenses including reductions | 1.167 | 1.15 | 1.16 | 1.17 | 1.17 | 1.18 |
Net investment income (loss) | (0.02)7 | (0.14) | (0.12) | (0.07) | 0.16 | 0.27 |
Portfolio turnover (%) | 16 | 42 | 41 | 44 | 30 | 43 |
1 | Six months ended 4-30-19. 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. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK U.S. Global Leaders Growth Fund | 13 |
CLASS B SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $41.57 | $40.57 | $35.82 | $38.90 | $40.80 | $38.65 |
Net investment loss2 | (0.14) | (0.37) | (0.32) | (0.29) | (0.22) | (0.19) |
Net realized and unrealized gain (loss) on investments | 5.39 | 4.70 | 7.18 | (0.12) | 4.42 | 3.55 |
Total from investment operations | 5.25 | 4.33 | 6.86 | (0.41) | 4.20 | 3.36 |
Less distributions | ||||||
From net realized gain | (5.63) | (3.33) | (2.11) | (2.67) | (6.10) | (1.21) |
Net asset value, end of period | $41.19 | $41.57 | $40.57 | $35.82 | $38.90 | $40.80 |
Total return (%)3,4 | 15.035 | 11.28 | 20.22 | (1.16) | 12.33 | 8.93 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $11 | $13 | $16 | $19 | $24 | $27 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.916 | 1.91 | 1.92 | 1.93 | 1.93 | 1.94 |
Expenses including reductions | 1.916 | 1.90 | 1.91 | 1.92 | 1.92 | 1.93 |
Net investment loss | (0.75)6 | (0.89) | (0.86) | (0.82) | (0.60) | (0.48) |
Portfolio turnover (%) | 16 | 42 | 41 | 44 | 30 | 43 |
1 | Six months ended 4-30-19. 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. |
14 | JOHN HANCOCK U.S. Global Leaders Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS C SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $41.59 | $40.59 | $35.84 | $38.92 | $40.81 | $38.66 |
Net investment loss2 | (0.15) | (0.37) | (0.32) | (0.29) | (0.22) | (0.19) |
Net realized and unrealized gain (loss) on investments | 5.41 | 4.70 | 7.18 | (0.12) | 4.43 | 3.55 |
Total from investment operations | 5.26 | 4.33 | 6.86 | (0.41) | 4.21 | 3.36 |
Less distributions | ||||||
From net realized gain | (5.63) | (3.33) | (2.11) | (2.67) | (6.10) | (1.21) |
Net asset value, end of period | $41.22 | $41.59 | $40.59 | $35.84 | $38.92 | $40.81 |
Total return (%)3,4 | 15.025 | 11.28 | 20.21 | (1.16) | 12.36 | 8.92 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $72 | $70 | $102 | $117 | $136 | $133 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.916 | 1.91 | 1.92 | 1.93 | 1.93 | 1.94 |
Expenses including reductions | 1.916 | 1.90 | 1.91 | 1.92 | 1.92 | 1.93 |
Net investment loss | (0.76)6 | (0.91) | (0.86) | (0.82) | (0.59) | (0.48) |
Portfolio turnover (%) | 16 | 42 | 41 | 44 | 30 | 43 |
1 | Six months ended 4-30-19. 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 U.S. Global Leaders Growth Fund | 15 |
CLASS I SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $52.86 | $50.25 | $43.45 | $46.27 | $47.12 | $44.12 |
Net investment income2 | 0.07 | 0.05 | 0.06 | 0.08 | 0.18 | 0.24 |
Net realized and unrealized gain (loss) on investments | 7.16 | 5.89 | 8.85 | (0.13) | 5.25 | 4.07 |
Total from investment operations | 7.23 | 5.94 | 8.91 | (0.05) | 5.43 | 4.31 |
Less distributions | ||||||
From net investment income | — | — | — | (0.10) | (0.18) | (0.10) |
From net realized gain | (5.63) | (3.33) | (2.11) | (2.67) | (6.10) | (1.21) |
Total distributions | (5.63) | (3.33) | (2.11) | (2.77) | (6.28) | (1.31) |
Net asset value, end of period | $54.46 | $52.86 | $50.25 | $43.45 | $46.27 | $47.12 |
Total return (%)3 | 15.594 | 12.37 | 21.44 | (0.14) | 13.48 | 10.01 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $547 | $694 | $751 | $313 | $293 | $317 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.935 | 0.92 | 0.91 | 0.92 | 0.91 | 0.93 |
Expenses including reductions | 0.925 | 0.91 | 0.90 | 0.91 | 0.91 | 0.92 |
Net investment income | 0.285 | 0.09 | 0.13 | 0.19 | 0.41 | 0.53 |
Portfolio turnover (%) | 16 | 42 | 41 | 44 | 30 | 43 |
1 | Six months ended 4-30-19. 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. |
16 | JOHN HANCOCK U.S. Global Leaders Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R2 SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $51.80 | $49.48 | $42.99 | $45.89 | $46.82 | $43.93 |
Net investment income (loss)2 | (0.04) | (0.14) | (0.12) | (0.09) | (0.05) | 0.06 |
Net realized and unrealized gain (loss) on investments | 7.00 | 5.79 | 8.72 | (0.13) | 5.27 | 4.06 |
Total from investment operations | 6.96 | 5.65 | 8.60 | (0.22) | 5.22 | 4.12 |
Less distributions | ||||||
From net investment income | — | — | — | (0.01) | (0.05) | (0.02) |
From net realized gain | (5.63) | (3.33) | (2.11) | (2.67) | (6.10) | (1.21) |
Total distributions | (5.63) | (3.33) | (2.11) | (2.68) | (6.15) | (1.23) |
Net asset value, end of period | $53.13 | $51.80 | $49.48 | $42.99 | $45.89 | $46.82 |
Total return (%)3 | 15.374 | 11.95 | 20.93 | (0.54) | 13.01 | 9.59 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $2 | $2 | $5 | $6 | $8 | $34 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.295 | 1.30 | 1.31 | 1.32 | 1.30 | 1.33 |
Expenses including reductions | 1.295 | 1.29 | 1.30 | 1.32 | 1.29 | 1.32 |
Net investment income (loss) | (0.15)5 | (0.28) | (0.26) | (0.21) | (0.11) | 0.13 |
Portfolio turnover (%) | 16 | 42 | 41 | 44 | 30 | 43 |
1 | Six months ended 4-30-19. 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 U.S. Global Leaders Growth Fund | 17 |
CLASS R6 SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $53.17 | $50.47 | $43.59 | $46.39 | $47.23 | $44.19 |
Net investment income2 | 0.08 | 0.11 | 0.11 | 0.13 | 0.24 | 0.28 |
Net realized and unrealized gain (loss) on investments | 7.22 | 5.92 | 8.88 | (0.13) | 5.25 | 4.09 |
Total from investment operations | 7.30 | 6.03 | 8.99 | — | 5.49 | 4.37 |
Less distributions | ||||||
From net investment income | — | — | — | (0.13) | (0.23) | (0.12) |
From net realized gain | (5.63) | (3.33) | (2.11) | (2.67) | (6.10) | (1.21) |
Total distributions | (5.63) | (3.33) | (2.11) | (2.80) | (6.33) | (1.33) |
Net asset value, end of period | $54.84 | $53.17 | $50.47 | $43.59 | $46.39 | $47.23 |
Total return (%)3 | 15.644 | 12.50 | 21.56 | (0.03) | 13.61 | 10.15 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $172 | $143 | $6 | $5 | $6 | $4 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.825 | 0.81 | 0.82 | 0.82 | 0.82 | 0.83 |
Expenses including reductions | 0.815 | 0.80 | 0.80 | 0.80 | 0.80 | 0.80 |
Net investment income | 0.335 | 0.21 | 0.23 | 0.30 | 0.55 | 0.64 |
Portfolio turnover (%) | 16 | 42 | 41 | 44 | 30 | 43 |
1 | Six months ended 4-30-19. 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. |
18 | JOHN HANCOCK U.S. Global Leaders Growth Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Note 1 — Organization
John Hancock U.S. Global Leaders Growth Fund (the fund) is a series of John Hancock Capital Series (the Trust), an open-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the 1940 Act). The investment objective of the fund is to seek long-term growth of capital.
The funds may offer multiple classes of shares. The shares currently offered by the fund are detailed in the Statements of assets and liabilities. Class A and Class C are offered to all investors. Class B shares are closed to new investors. Class I shares are offered to institutions and certain investors. Class R2 shares are available only to certain retirement and 529 plans. Class R6 shares are only available to certain retirement plans, institutions and other investors. Class B shares convert to Class A shares eight years after purchase. Class C shares convert to Class A shares ten years after purchase (certain exclusions may apply). Shareholders of each class have exclusive voting rights to matters that affect that class. The distribution and service fees, if any, and transfer agent fees for each class may differ.
Note 2 — Significant accounting policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP), which require management to make certain estimates and assumptions as of the date of the financial statements. Actual results could differ from those estimates and those differences could be significant. The fund qualifies as an investment company under Topic 946 of Accounting Standards Codification of US GAAP.
Events or transactions occurring after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the fund:
Security valuation.Investments are stated at value as of the scheduled close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 p.m., Eastern Time. In case of emergency or other disruption resulting in the NYSE not opening for trading or the NYSE closing at a time other than the regularly scheduled close, the net asset value (NAV) may be determined as of the regularly scheduled close of the NYSE pursuant to the fund's Valuation Policies and Procedures.
In order to value the securities, the fund uses the following valuation techniques: Equity securities held by the fund are typically valued at the last sale price or official closing price on the exchange or principal market where the security trades. In the event there were no sales during the day or closing prices are not available, the securities are valued using the last available bid price. Investments by the fund in open-end mutual funds are valued at their respective NAVs each business day.
In certain instances, the Pricing Committee may determine to value equity securities using prices obtained from another exchange or market if trading on the exchange or market on which prices are typically obtained did not open for trading as scheduled, or if trading closed earlier than scheduled, and trading occurred as normal on another exchange or market. Other portfolio securities and assets, for which reliable market quotations are not readily available, are valued at fair value as determined in good faith by the fund's Pricing Committee following procedures established by the Board of Trustees. The frequency with which these fair valuation procedures are used cannot be predicted and fair value of securities may differ significantly from the value that would have been used had a ready market for such securities existed.
The fund uses a three-tier hierarchy to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities, including registered investment companies. Level 2 includes securities valued using other significant
observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities valued using significant unobservable inputs when market prices are not readily available or reliable, including the fund's own assumptions in determining the fair value of investments. Factors used in determining value may include market or issuer specific events or trends, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques and related inputs may result in transfers into or out of an assigned level within the disclosure hierarchy.
As of April 30, 2019, all investments are categorized as Level 1 under the hierarchy described above.
Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily NAV calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Interest income includes coupon interest and amortization/accretion of premiums/discounts on debt securities. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by stopping current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful. Dividend income is recorded on the ex-date, except for dividends of foreign securities where the dividend may not be known until after the ex-date. In those cases, dividend income, net of withholding taxes, is recorded when the fund becomes aware of the dividends. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds from litigation.
Real estate investment trusts. The fund may invest in real estate investment trusts (REITs). Distributions from REITs may be recorded as income and subsequently characterized by the REIT at the end of the fiscal year as a reduction of cost of investments and/or as a realized gain. As a result, the fund will estimate the components of distributions from these securities. Such estimates are revised when the actual components of the distributions are known.
Securities lending. The fund may lend its securities to earn additional income. The fund receives cash collateral from the borrower in an amount not less than the market value of the loaned securities. The fund will invest its collateral in JHCT, an affiliate of the fund, which has a floating NAV and is registered with the Securities and Exchange Commission as an investment company. JHCT invests in short-term money market investments. The fund will receive the benefit of any gains and bear any losses generated by JHCT with respect to the cash collateral.
The fund has the right to recall loaned securities on demand. If a borrower fails to return loaned securities when due, then the lending agent is responsible and indemnifies the fund for the lent securities. The lending agent uses the collateral received from the borrower to purchase replacement securities of the same issue, type, class and series of the loaned securities. If the value of the collateral is less than the purchase cost of replacement securities, the lending agent is responsible for satisfying the shortfall but only to the extent that the shortfall is not due to any decrease in the value of JHCT.
Although the risk of the loss of the securities lent is mitigated by receiving collateral from the borrower and through lending agent indemnification, the fund could experience a delay in recovering securities or could experience a lower than expected return if the borrower fails to return the securities on a timely basis. The fund receives compensation for lending its securities by retaining a portion of the return on the investment of the collateral and compensation from fees earned from borrowers of the securities. Securities lending income received by the fund is net of fees retained by the securities lending agent. Net income received from JHCT is a component of securities lending income as recorded on the Statement of operations. As of April 30, 2019, there were no securities on loan.
Foreign taxes. The fund may be subject to withholding tax on income, capital gains or repatriation taxes imposed by certain countries, a portion of which may be recoverable. Foreign taxes are accrued based upon the fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Taxes are accrued based on gains realized by the fund as a result of certain foreign security sales. In certain circumstances, estimated taxes are accrued based on unrealized appreciation of such securities. Investment income is recorded net of foreign withholding taxes.
Line of credit.The fund may have the ability to borrow from banks for temporary or emergency purposes, including meeting redemption requests that otherwise might require the untimely sale of securities. Pursuant to the fund's custodian agreement, the custodian may loan money to the fund to make properly authorized payments. The fund is obligated to repay the custodian for any overdraft, including any related costs or expenses. The custodian may have a lien, security interest or security entitlement in any fund property that is not otherwise segregated or pledged, to the extent of any overdraft, and to the maximum extent permitted by law.
The fund and other affiliated funds have entered into a syndicated line of credit agreement with Citibank, N.A. as the administrative agent that enables them to participate in a $750 million unsecured committed line of credit. Excluding commitments designated for a certain fund and subject to the needs of all other affiliated funds, the fund can borrow up to an aggregate commitment amount of $500 million, subject to asset coverage and other limitations as specified in the agreement. A commitment fee payable at the end of each calendar quarter, based on the average daily unused portion of the line of credit, is charged to each participating fund based on a combination of fixed and asset based allocations and is reflected in Other expenses on the Statement of operations. For the six months ended April 30, 2019, the fund had no borrowings under the line of credit. Commitment fees for the six months ended April 30, 2019 were $2,035.
Expenses. Within the John Hancock group of funds complex, expenses that are directly attributable to an individual fund are allocated to such fund. Expenses that are not readily attributable to a specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund's relative net assets. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Class allocations. Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the net assets of the class. Class-specific expenses, such as distribution and service fees, if any, and transfer agent fees, for all classes, are charged daily at the class level based on the net assets of each class and the specific expense rates applicable to each class.
Federal income taxes. The fund intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.
As of October 31, 2018, the fund had no uncertain tax positions that would require financial statement recognition, derecognition or disclosure. The fund's federal tax returns are subject to examination by the Internal Revenue Service for a period of three years.
Distribution of income and gains. Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The fund generally declares and pays dividends and capital gain distributions, if any, annually.
Distributions paid by the fund with respect to each class of shares are calculated in the same manner, at the same time and in the same amount, except for the effect of class level expenses that may be applied differently to each class.
Such distributions, on a tax basis, are determined in conformity with income tax regulations, which may differ from US GAAP. Distributions in excess of tax basis earnings and profits, if any, are reported in the fund's financial statements as a return of capital. The final determination of tax characteristics of the fund's distribution will occur at the end of the year and will subsequently be reported to shareholders.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any, will reverse in a subsequent period. Book-tax differences are primarily attributable to net operating losses, treating a portion of the proceeds from redemptions as distributions for tax purposes, and wash sale loss deferrals.
Note 3 — Guarantees and indemnifications
Under the Trust's organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust, including the fund. Additionally, in the normal course of business, the fund enters into contracts with service providers that contain general indemnification clauses. The fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the fund that have not yet occurred. The risk of material loss from such claims is considered remote.
Note 4 — Fees and transactions with affiliates
John Hancock Advisers, LLC (the Advisor) serves as investment advisor for the fund. John Hancock Funds, LLC (the Distributor), an affiliate of the Advisor, serves as principal underwriter of the fund. The Advisor and the Distributor are indirect, wholly owned subsidiaries of Manulife Financial Corporation (MFC).
Management fee. The fund has an investment management agreement with the Advisor under which the fund pays a monthly management fee to the Advisor equivalent on an annual basis to the sum of: (a) 0.75% of the first $500 million of the fund's average daily net assets; (b) 0.73% of the next $500 million of the fund's average daily net assets; (c) 0.71% of the next $1 billion of the fund's average daily net assets; (d) 0.70% of the next $3 billion of the fund's average daily net assets; and (e) 0.65% of the fund's average daily net assets in excess of $5 billion. The Advisor has a subadvisory agreement with Sustainable Growth Advisers, LP. The fund is not responsible for payment of the subadvisory fees.
The Advisor has contractually agreed to waive a portion of its management fee and/or reimburse expenses for certain funds of the John Hancock group of funds complex, including the fund (the participating portfolios). 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. During the six months ended April 30, 2019, this waiver amounted to 0.01% of the fund's average net assets on an annualized basis. This agreement expires on June 30, 2020, unless renewed by mutual agreement of the Fund and the Advisor based upon a determination that this is appropriate under the circumstances at that time.
For the six months ended April 30, 2019, the expense reductions described above amounted to the following:
Class | Expense reduction | Class | Expense reduction | |
Class A | $22,801 | Class R2 | $60 | |
Class B | 423 | Class R6 | 5,449 | |
Class C | 2,512 | Total | $51,223 | |
Class I | 19,978 |
Expenses waived or reimbursed in the current fiscal period are not subject to recapture in future fiscal periods.
The investment management fees, including the impact of the waivers and reimbursements as described above, incurred for the six months ended April 30, 2019 were equivalent to a net annual effective rate of 0.72% of the fund's average daily net assets.
Accounting and legal services. Pursuant to the Accounting and Legal Services Agreement, the fund reimburses the Advisor for all expenses associated with providing the administrative, financial, legal, compliance, accounting and recordkeeping services to the fund, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. These expenses are allocated to each share class based on its relative net assets at the time the expense was incurred. These accounting and legal services fees incurred for the six months ended April 30, 2019 amounted to an annual rate of 0.02% of the fund's average daily net assets.
Distribution and service plans. The fund has a distribution agreement with the Distributor. The fund has adopted distribution and service plans with respect to Class A, Class B, Class C, and Class R2 pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for services provided as the distributor of shares of the fund. In addition, under a service plan for Class R2 shares, the fund pays for certain other services. The fund may pay up to the following contractual rates of distribution and service fees under these arrangements, expressed as an annual percentage of average daily net assets for each class of the fund's shares.
Class | Rule 12b-1 fee | Service fee | Class | Rule 12b-1 fee | Service fee | |
Class A | 0.25% | — | Class C | 1.00% | — | |
Class B | 1.00% | — | Class R2 | 0.25% | 0.25% |
Sales charges. Class A shares are assessed up-front sales charges, which resulted in payments to the Distributor amounting to $307,585 for the six months ended April 30, 2019. Of this amount, $51,316 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $254,644 was paid as sales commissions to broker-dealers and $1,625 was paid as sales commissions to sales personnel of Signator Investors, Inc., which had been a broker-dealer affiliate of the Advisor through November 2, 2018.
Class A, Class B and Class C shares may be subject to contingent deferred sales charges (CDSCs). Certain Class A shares that are acquired through purchases of $1 million or more and are redeemed within one year of purchase are subject to a 1.00% sales charge. Class B shares that are redeemed within six years of purchase are subject to CDSCs, at declining rates, beginning at 5.00%. Class C shares that are redeemed within one year of purchase are subject to a 1.00% CDSC. CDSCs are applied to the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from CDSCs are used to compensate the Distributor for providing distribution-related services in connection with the sale of these shares. During the six months ended April 30, 2019, CDSCs received by the Distributor amounted to $3,761, $1,836 and $4,375 for Class A, Class B and Class C shares, respectively.
Transfer agent fees. The John Hancock group of funds has a complex-wide transfer agent agreement with John Hancock Signature Services, Inc. (Signature Services), an affiliate of the Advisor. The transfer agent fees paid to Signature Services are determined based on the cost to Signature Services (Signature Services Cost) of providing recordkeeping services. It also includes out-of-pocket expenses, including payments made to third-parties for recordkeeping services provided to their clients who invest in one or more John Hancock funds. In addition, Signature Services Cost may be reduced by certain fees that Signature Services receives in connection with retirement and small accounts. Signature Services Cost is calculated monthly and allocated, as applicable, to five categories of share classes: Retail Share and Institutional Share Classes of Non-Municipal Bond Funds, Class R6 Shares, Retirement Share Classes and Municipal Bond Share Classes. Within each of these categories, the applicable costs are allocated to the affected John Hancock affiliated funds and/or classes, based on the relative average daily net assets.
Class level expenses. Class level expenses for the six months ended April 30, 2019 were:
Class | Distribution and service fees | Transfer agent fees |
Class A | $776,216 | $348,947 |
Class B | 57,759 | 6,492 |
Class C | 342,177 | 38,460 |
Class I | — | 349,145 |
Class R2 | 3,886 | 111 |
Class R6 | — | 10,174 |
Total | $1,180,038 | $753,329 |
Trustee expenses.Thefund compensates each Trustee who is not an employee of the Advisor or its affiliates. The costs of paying Trustee compensation and expenses are allocated to the fund based on its net assets relative to other funds within the John Hancock group of funds complex.
Note 5 — Fund share transactions
Transactions in funds shares for the six months ended April 30, 2019 and for the year ended October 31, 2018 were as follows:
Six months ended 4-30-19 | Year ended 10-31-18 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class A shares | ||||||||||||||||||||||||||
Sold | 1,100,152 | $50,198,676 | 1,728,175 | $83,523,760 | ||||||||||||||||||||||
Distributions reinvested | 1,555,898 | 66,312,369 | 842,616 | 38,431,702 | ||||||||||||||||||||||
Repurchased | (1,342,148 | ) | (61,833,394 | ) | (2,391,458 | ) | (115,390,942 | ) | ||||||||||||||||||
Net increase | 1,313,902 | $54,677,651 | 179,333 | $6,564,520 | ||||||||||||||||||||||
Class B shares | ||||||||||||||||||||||||||
Sold | 3,309 | $120,189 | 9,909 | $407,228 | ||||||||||||||||||||||
Distributions reinvested | 43,715 | 1,532,211 | 29,529 | 1,143,957 | ||||||||||||||||||||||
Repurchased | (91,259 | ) | (3,499,797 | ) | (113,601 | ) | (4,648,778 | ) | ||||||||||||||||||
Net decrease | (44,235 | ) | $(1,847,397 | ) | (74,163 | ) | $(3,097,593 | ) | ||||||||||||||||||
Class C shares | ||||||||||||||||||||||||||
Sold | 163,250 | $6,025,316 | 178,632 | $7,356,278 | ||||||||||||||||||||||
Distributions reinvested | 249,890 | 8,763,643 | 201,802 | 7,821,856 | ||||||||||||||||||||||
Repurchased | (334,200 | ) | (12,612,189 | ) | (1,228,507 | ) | (50,092,307 | ) | ||||||||||||||||||
Net increase (decrease) | 78,940 | $2,176,770 | (848,073 | ) | $(34,914,173 | ) | ||||||||||||||||||||
Class I shares | ||||||||||||||||||||||||||
Sold | 2,096,259 | $105,797,922 | 5,104,265 | $266,498,529 | ||||||||||||||||||||||
Distributions reinvested | 1,521,468 | 70,246,195 | 844,360 | 41,246,991 | ||||||||||||||||||||||
Repurchased | (6,710,607 | ) | (314,737,383 | ) | (7,761,361 | ) | (396,298,832 | ) | ||||||||||||||||||
Net decrease | (3,092,880 | ) | $(138,693,266 | ) | (1,812,736 | ) | $(88,553,312 | ) |
Six months ended 4-30-19 | Year ended 10-31-18 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class R2 shares | ||||||||||||||||||||||||||
Sold | 4,773 | $232,563 | 15,755 | $780,375 | ||||||||||||||||||||||
Distributions reinvested | 3,706 | 167,161 | 6,094 | 292,693 | ||||||||||||||||||||||
Repurchased | (18,998 | ) | (956,887 | ) | (88,104 | ) | (4,405,952 | ) | ||||||||||||||||||
Net decrease | (10,519 | ) | $(557,163 | ) | (66,255 | ) | $(3,332,884 | ) | ||||||||||||||||||
Class R6 shares | ||||||||||||||||||||||||||
Sold | 516,612 | $26,221,091 | 3,154,507 | $160,962,893 | ||||||||||||||||||||||
Distributions reinvested | 323,400 | 15,028,390 | 160,487 | 7,876,721 | ||||||||||||||||||||||
Repurchased | (383,159 | ) | (19,186,419 | ) | (741,743 | ) | (39,042,386 | ) | ||||||||||||||||||
Net increase | 456,853 | $22,063,062 | 2,573,251 | $129,797,228 | ||||||||||||||||||||||
Total net increase (decrease) | (1,297,939 | ) | $(62,180,343 | ) | (48,643 | ) | $6,463,786 |
Note 6 — Purchase and sale of securities
Purchases and sales of securities, other than short-term investments, amounted to $217,149,704 and $436,073,222, respectively, for the six months ended April 30, 2019.
Note 7 — Industry or sector risk
The fund may invest a large percentage of its assets in one or more particular industries or sectors of the economy. If a large percentage of the fund's assets are economically tied to a single or small number of industries or sectors of the economy, the fund will be less diversified than a more broadly diversified fund, and it may cause the fund to underperform if that industry or sector underperforms. In addition, focusing on a particular industry or sector may make the fund's NAV more volatile. Further, a fund that invests in particular industries or sectors is particularly susceptible to the impact of market, economic, regulatory and other factors affecting those industries or sectors.
Note 8 — Investment in affiliated underlying funds
The fund may invest in affiliated underlying funds that are managed by the Advisor and its affiliates. Information regarding the fund's purchases and sales of the affiliated underlying funds as well as income and capital gains earned, if any, during the period is as follows:
Dividends and distributions | ||||||||||||||||||||||||||||||||||||||
Fund | 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* | — | 4,122,940 | (4,122,940 | ) | — | — | — | $201 | — | — | ||||||||||||||||||||||||||||
*Refer to the Securities lending note within Note 2 for details regarding this investment. |
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 Advisers, LLC Subadvisor Sustainable Growth Advisers, LP (SGA) Portfolio Managers George P. Fraise Principal distributor John Hancock Funds, 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
#Effective 6-19-18
**Effective 9-13-18
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 Fundamental Large Cap Value New Opportunities Regional Bank Small Cap Core Small Cap Growth Small Cap Value U.S. Global Leaders Growth U.S. Quality Growth Value Equity 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 Credit Opportunities Spectrum Income Strategic Income Opportunities Tax-Free Bond ALTERNATIVE AND SPECIALTY FUNDS Absolute Return Currency Alternative Asset Allocation Disciplined Alternative Yield Global Absolute Return Strategies Infrastructure 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 Investments 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 Funds, 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 Funds, 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. Global Leaders Growth Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.
MF838023 | 26SA 4/19 6/19 |
John Hancock
Classic Value Fund
Semiannual report 4/30/19
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 R1, Class R2, Class R3, Class R4, Class R5 and Class R6 shares) 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,
The six months ended April 30, 2019, were a study in contrasts. The final months of 2018 were very volatile; the markets lost ground as fears of slowing economic growth, mounting trade tensions between the United States and China, and a pullback in oil prices spooked investors. Many of those fears were quelled as favorable earnings reports, early signs of progress with the China trade dispute, and signals from the U.S. Federal Reserve (Fed) that interest-rate hikes were on hold sparked a market rebound during the first four months of 2019. Subsequent to period end, however, we saw reignited trade tensions with China and Mexico partially offset by more dovish comments on interest rates from the Fed.
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 turbulence 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, which are subject to change at any time. Investing involves risks, including the potential loss of principal. Diversification does not guarantee a profit or eliminate the risk of a loss. It is not possible to invest directly in an index. For more up-to-date information, please visit our website at jhinvestments.com.
John Hancock
Classic Value Fund
INVESTMENT OBJECTIVE
The fund seeks long-term growth of capital.
AVERAGE ANNUAL TOTAL RETURNS AS OF 4/30/19 (%)
The Russell 1000 Value Index is an unmanaged index containing those securities in the Russell 1000 Index with a 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 4/30/19 (%)
TOP 10 HOLDINGS AS OF 4/30/19 (%)
American International Group, Inc. | 4.3 |
Citigroup, Inc. | 4.0 |
Capital One Financial Corp. | 3.9 |
Ford Motor Company | 3.8 |
General Electric Company | 3.5 |
Morgan Stanley | 3.3 |
MetLife, Inc. | 3.2 |
Halliburton Company | 3.2 |
Cognizant Technology Solutions Corp., Class A | 3.1 |
Bank of America Corp. | 3.1 |
TOTAL | 35.4 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
A note about risks
The fund is 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 APRIL 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 | -7.80 | 5.77 | 12.11 | -1.16 | 32.39 | 213.66 | |
Class B | -8.44 | 5.74 | 12.01 | -1.37 | 32.20 | 210.99 | |
Class C | -4.65 | 6.06 | 11.84 | 2.65 | 34.19 | 206.17 | |
Class I1 | -2.72 | 7.13 | 13.03 | 4.17 | 41.12 | 240.22 | |
Class R11 | -3.33 | 6.45 | 12.30 | 3.86 | 36.69 | 218.89 | |
Class R21,2 | -3.09 | 6.72 | 12.65 | 3.97 | 38.44 | 229.07 | |
Class R31,2 | -3.20 | 6.56 | 12.39 | 3.88 | 37.40 | 221.57 | |
Class R41,2 | -2.74 | 7.08 | 12.87 | 4.15 | 40.78 | 235.56 | |
Class R51,2 | -2.65 | 7.20 | 13.05 | 4.21 | 41.55 | 241.11 | |
Class R61,2 | -2.63 | 7.24 | 13.01 | 4.20 | 41.84 | 239.68 | |
Index† | 9.06 | 8.27 | 13.76 | 7.90 | 48.77 | 262.89 |
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%, 1%. No sales charge will be assessed after the sixth year. Class C shares held for less than one year are subject to a 1% CDSC. Sales charges are not applicable to Class I, Class R1, Class R2, Class R3, Class R4, Class R5, and Class R6 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 February 29, 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 R1 | Class R2 | Class R3 | Class R4 | Class R5 | Class R6 | |
Gross (%) | 1.17 | 1.92 | 1.92 | 0.93 | 1.57 | 1.32 | 1.47 | 1.17 | 0.87 | 0.82 |
Net (%) | 1.16 | 1.91 | 1.91 | 0.92 | 1.56 | 1.31 | 1.46 | 1.06 | 0.86 | 0.81 |
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 Value Index. |
See the following page for footnotes.
This chart and table show what happened to a hypothetical $10,000 investment in John Hancock Classic Value Fund for the share classes and periods indicated, assuming all distributions were reinvested. For comparison, we've shown the same investment in the Russell 1000 Value Index.
Start date | With maximum sales charge ($) | Without sales charge ($) | Index ($) | |
Class B3 | 4-30-09 | 31,099 | 31,099 | 36,289 |
Class C3 | 4-30-09 | 30,617 | 30,617 | 36,289 |
Class I1 | 4-30-09 | 34,022 | 34,022 | 36,289 |
Class R11 | 4-30-09 | 31,889 | 31,889 | 36,289 |
Class R21,2 | 4-30-09 | 32,907 | 32,907 | 36,289 |
Class R31,2 | 4-30-09 | 32,157 | 32,157 | 36,289 |
Class R41,2 | 4-30-09 | 33,556 | 33,556 | 36,289 |
Class R51,2 | 4-30-09 | 34,111 | 34,111 | 36,289 |
Class R61,2 | 4-30-09 | 33,968 | 33,968 | 36,289 |
The Russell 1000 Value Index is an unmanaged index containing those securities in the Russell 1000 Index with a 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.
Footnotes related to performance pages
1 | For certain types of investors, as described in the fund's prospectus. |
2 | Class R2 shares were first offered on 3-1-12; Class R3, Class R4, and Class R5 shares were first offered on 5-22-09; Class R6 shares were first offered on 9-1-11. Returns prior to these dates are those of Class A shares and have not been adjusted for expenses; otherwise, returns would vary. |
3 | The contingent deferred sales charge is not applicable. |
Your expenses |
6 | JOHN HANCOCK CLASSIC VALUE FUND | SEMIANNUAL REPORT |
Account value on 11-1-2018 | Ending value on 4-30-2019 | Expenses paid during period ended 4-30-20191 | Annualized expense ratio | ||
Class A | Actual expenses/actual returns | $1,000.00 | $1,040.40 | $5.92 | 1.17% |
Hypothetical example | 1,000.00 | 1,019.00 | 5.86 | 1.17% | |
Class B | Actual expenses/actual returns | 1,000.00 | 1,036.30 | 9.69 | 1.92% |
Hypothetical example | 1,000.00 | 1,015.30 | 9.59 | 1.92% | |
Class C | Actual expenses/actual returns | 1,000.00 | 1,036.50 | 9.69 | 1.92% |
Hypothetical example | 1,000.00 | 1,015.30 | 9.59 | 1.92% | |
Class I | Actual expenses/actual returns | 1,000.00 | 1,041.70 | 4.71 | 0.93% |
Hypothetical example | 1,000.00 | 1,020.20 | 4.66 | 0.93% | |
Class R1 | Actual expenses/actual returns | 1,000.00 | 1,038.60 | 7.89 | 1.56% |
Hypothetical example | 1,000.00 | 1,017.10 | 7.80 | 1.56% | |
Class R2 | Actual expenses/actual returns | 1,000.00 | 1,039.70 | 6.52 | 1.29% |
Hypothetical example | 1,000.00 | 1,018.40 | 6.46 | 1.29% | |
Class R3 | Actual expenses/actual returns | 1,000.00 | 1,038.80 | 7.38 | 1.46% |
Hypothetical example | 1,000.00 | 1,017.60 | 7.30 | 1.46% | |
Class R4 | Actual expenses/actual returns | 1,000.00 | 1,041.50 | 4.91 | 0.97% |
Hypothetical example | 1,000.00 | 1,020.00 | 4.86 | 0.97% | |
Class R5 | Actual expenses/actual returns | 1,000.00 | 1,042.10 | 4.41 | 0.87% |
Hypothetical example | 1,000.00 | 1,020.50 | 4.36 | 0.87% | |
Class R6 | Actual expenses/actual returns | 1,000.00 | 1,042.00 | 4.15 | 0.82% |
Hypothetical example | 1,000.00 | 1,020.70 | 4.11 | 0.82% |
1 | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181/365 (to reflect the one-half year period). |
SEMIANNUAL REPORT | JOHN HANCOCK CLASSIC VALUE FUND | 7 |
Fund’s investments |
Shares | Value | ||||
Common stocks 98.9% | $2,329,121,182 | ||||
(Cost $2,123,612,654) | |||||
Communication services 5.5% | 130,085,289 | ||||
Media 5.5% | |||||
News Corp., Class A | 801,694 | 9,957,039 | |||
Omnicom Group, Inc. | 645,742 | 51,678,732 | |||
The Interpublic Group of Companies, Inc. | 2,976,066 | 68,449,518 | |||
Consumer discretionary 14.8% | 347,007,153 | ||||
Auto components 3.1% | |||||
Lear Corp. | 503,610 | 72,016,230 | |||
Automobiles 3.8% | |||||
Ford Motor Company | 8,480,049 | 88,616,512 | |||
Household durables 4.6% | |||||
Mohawk Industries, Inc. (A) | 445,706 | 60,727,443 | |||
Newell Brands, Inc. | 3,347,427 | 48,136,000 | |||
Textiles, apparel and luxury goods 3.3% | |||||
Gildan Activewear, Inc. | 694,922 | 25,621,774 | |||
PVH Corp. | 402,273 | 51,889,194 | |||
Energy 11.2% | 263,580,593 | ||||
Energy equipment and services 7.2% | |||||
Baker Hughes, a GE Company | 1,645,229 | 39,518,401 | |||
Halliburton Company | 2,659,624 | 75,347,148 | |||
National Oilwell Varco, Inc. | 2,095,331 | 54,771,952 | |||
Oil, gas and consumable fuels 4.0% | |||||
Cenovus Energy, Inc. (B) | 4,855,238 | 48,115,409 | |||
Royal Dutch Shell PLC, ADR, Class A | 721,355 | 45,827,683 | |||
Financials 41.0% | 966,120,134 | ||||
Banks 12.5% | |||||
Bank of America Corp. | 2,376,024 | 72,658,814 | |||
Citigroup, Inc. | 1,316,059 | 93,045,371 | |||
JPMorgan Chase & Co. | 537,719 | 62,402,290 | |||
Wells Fargo & Company | 1,367,917 | 66,220,862 | |||
Capital markets 10.4% | |||||
Franklin Resources, Inc. | 1,355,773 | 46,896,188 | |||
KKR & Company, Inc., Class A (B) | 1,330,285 | 32,525,468 | |||
Morgan Stanley | 1,589,638 | 76,700,034 | |||
The Goldman Sachs Group, Inc. | 265,715 | 54,716,033 | |||
UBS Group AG (A) | 2,577,126 | 34,636,573 | |||
Consumer finance 3.9% | |||||
Capital One Financial Corp. | 976,094 | 90,610,806 |
8 | JOHN HANCOCK CLASSIC VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Financials (continued) | |||||
Diversified financial services 4.8% | |||||
AXA Equitable Holdings, Inc. | 2,807,732 | $63,707,439 | |||
Voya Financial, Inc. | 908,335 | 49,858,508 | |||
Insurance 9.4% | |||||
American International Group, Inc. | 2,105,219 | 100,145,268 | |||
Axis Capital Holdings, Ltd. | 800,848 | 45,528,209 | |||
MetLife, Inc. | 1,657,669 | 76,468,271 | |||
Health care 7.4% | 174,852,512 | ||||
Biotechnology 1.7% | |||||
Amgen, Inc. | 219,072 | 39,283,991 | |||
Health care providers and services 3.5% | |||||
Cardinal Health, Inc. | 560,830 | 27,318,029 | |||
McKesson Corp. | 472,956 | 56,400,003 | |||
Pharmaceuticals 2.2% | |||||
Mylan NV (A) | 1,921,100 | 51,850,489 | |||
Industrials 8.2% | 192,766,218 | ||||
Industrial conglomerates 3.5% | |||||
General Electric Company | 7,987,420 | 81,232,061 | |||
Machinery 4.7% | |||||
Dover Corp. | 251,139 | 24,621,668 | |||
Stanley Black & Decker, Inc. | 488,230 | 71,574,518 | |||
Wabtec Corp. (B) | 207,074 | 15,337,971 | |||
Information technology 8.1% | 191,467,171 | ||||
IT services 3.1% | |||||
Cognizant Technology Solutions Corp., Class A | 1,007,301 | 73,492,681 | |||
Software 2.1% | |||||
Oracle Corp. | 883,675 | 48,893,738 | |||
Technology hardware, storage and peripherals 2.9% | |||||
Hewlett Packard Enterprise Company | 4,369,434 | 69,080,752 | |||
Utilities 2.7% | 63,242,112 | ||||
Electric utilities 2.7% | |||||
Edison International | 991,722 | 63,242,112 |
Yield (%) | Shares | Value | |||
Securities lending collateral 0.8% | $18,320,884 | ||||
(Cost $18,318,951) | |||||
John Hancock Collateral Trust (C) | 2.5189(D) | 1,830,770 | 18,320,884 | ||
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK CLASSIC VALUE FUND | 9 |
Par value^ | Value | ||||
Short-term investments 0.9% | $21,452,000 | ||||
(Cost $21,452,000) | |||||
Repurchase agreement 0.9% | 21,452,000 | ||||
Repurchase Agreement with State Street Corp. dated 4-30-19 at 1.300% to be repurchased at $21,452,775 on 5-1-19, collateralized by $21,570,000 U.S. Treasury Notes, 2.625% due 7-15-21 (valued at $21,885,591, including interest) | 21,452,000 | 21,452,000 |
Total investments (Cost $2,163,383,605) 100.6% | $2,368,894,066 | ||||
Other assets and liabilities, net (0.6%) | (13,439,350) | ||||
Total net assets 100.0% | $2,355,454,716 |
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) | All or a portion of this security is on loan as of 4-30-19. |
(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 4-30-19. |
10 | JOHN HANCOCK CLASSIC VALUE FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial statements |
Assets | |
Unaffiliated investments, at value (Cost $2,145,064,654) including $17,921,055 of securities loaned | $2,350,573,182 |
Affiliated investments, at value (Cost $18,318,951) | 18,320,884 |
Total investments, at value (Cost $2,163,383,605) | 2,368,894,066 |
Dividends and interest receivable | 1,749,673 |
Receivable for fund shares sold | 3,497,878 |
Receivable for investments sold | 6,056,356 |
Other assets | 179,901 |
Total assets | 2,380,377,874 |
Liabilities | |
Due to custodian | 754,868 |
Payable for investments purchased | 1,000,363 |
Payable for fund shares repurchased | 2,641,843 |
Payable upon return of securities loaned | 18,314,765 |
Payable to affiliates | |
Investment management fees | 1,436,262 |
Accounting and legal services fees | 161,947 |
Transfer agent fees | 189,287 |
Distribution and service fees | 97,443 |
Trustees' fees | 1,701 |
Other liabilities and accrued expenses | 324,679 |
Total liabilities | 24,923,158 |
Net assets | $2,355,454,716 |
Net assets consist of | |
Paid-in capital | $2,060,509,490 |
Total distributable earnings (loss) | 294,945,226 |
Net assets | $2,355,454,716 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK Classic Value Fund | 11 |
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 ($353,061,590 ÷ 11,018,901 shares)1 | $32.04 |
Class B ($2,057,019 ÷ 65,155 shares)1 | $31.57 |
Class C ($25,557,759 ÷ 809,966 shares)1 | $31.55 |
Class I ($1,579,174,899 ÷ 49,208,756 shares) | $32.09 |
Class R1 ($2,902,490 ÷ 90,396 shares) | $32.11 |
Class R2 ($512,491 ÷ 16,022 shares) | $31.99 |
Class R3 ($637,628 ÷ 19,939 shares) | $31.98 |
Class R4 ($71,348 ÷ 2,224 shares) | $32.08 |
Class R5 ($61,748 ÷ 1,923 shares) | $32.11 |
Class R6 ($391,417,744 ÷ 12,189,050 shares) | $32.11 |
Maximum offering price per share | |
Class A (net asset value per share ÷ 95%)2 | $33.73 |
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. |
12 | JOHN HANCOCK Classic Value Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Investment income | |
Dividends | $39,122,985 |
Non-cash dividends | 3,301,403 |
Interest | 226,263 |
Securities lending | 9,282 |
Less foreign taxes withheld | (355,440) |
Total investment income | 42,304,493 |
Expenses | |
Investment management fees | 8,372,258 |
Distribution and service fees | 585,778 |
Accounting and legal services fees | 268,258 |
Transfer agent fees | 1,185,256 |
Trustees' fees | 21,669 |
Custodian fees | 131,394 |
State registration fees | 94,420 |
Printing and postage | 113,556 |
Professional fees | 43,442 |
Other | 36,594 |
Total expenses | 10,852,625 |
Less expense reductions | (81,925) |
Net expenses | 10,770,700 |
Net investment income | 31,533,793 |
Realized and unrealized gain (loss) | |
Net realized gain (loss) on | |
Unaffiliated investments and foreign currency transactions | 64,994,691 |
Affiliated investments | 4,186 |
64,998,877 | |
Change in net unrealized appreciation (depreciation) of | |
Unaffiliated investments | 1,504,977 |
Affiliated investments | 1,933 |
1,506,910 | |
Net realized and unrealized gain | 66,505,787 |
Increase in net assets from operations | $98,039,580 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK Classic Value Fund | 13 |
Six months ended 4-30-19 (unaudited) | Year ended 10-31-18 | |
Increase (decrease) in net assets | ||
From operations | ||
Net investment income | $31,533,793 | $37,342,487 |
Net realized gain | 64,998,877 | 24,253,712 |
Change in net unrealized appreciation (depreciation) | 1,506,910 | (96,996,470) |
Increase (decrease) in net assets resulting from operations | 98,039,580 | (35,400,271) |
Distributions to shareholders | ||
From net investment income and net realized gain | ||
Class A | (7,360,608) | (3,493,763) |
Class B | (34,706) | (11,751) |
Class C | (352,002) | (213,388) |
Class I | (35,683,141) | (17,742,839) |
Class R1 | (51,460) | (22,029) |
Class R2 | (170,439) | (60,489) |
Class R3 | (27,551) | (9,760) |
Class R4 | (1,632) | (870) |
Class R5 | (1,701) | (869) |
Class R6 | (9,493,876) | (4,515,692) |
Total distributions | (53,177,116) | (26,071,450) |
From fund share transactions | 16,900,115 | 140,624,274 |
Total increase | 61,762,579 | 79,152,553 |
Net assets | ||
Beginning of period | 2,293,692,137 | 2,214,539,584 |
End of period | $2,355,454,716 | $2,293,692,137 |
14 | JOHN HANCOCK Classic Value Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial highlights |
CLASS A SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $31.52 | $32.32 | $26.12 | $25.49 | $25.82 | $23.12 |
Net investment income2 | 0.40 | 0.46 | 0.34 | 0.43 | 0.28 | 0.18 |
Net realized and unrealized gain (loss) on investments | 0.79 | (0.94) | 6.38 | 0.54 | (0.39) | 2.72 |
Total from investment operations | 1.19 | (0.48) | 6.72 | 0.97 | (0.11) | 2.90 |
Less distributions | ||||||
From net investment income | (0.39) | (0.32) | (0.52) | (0.34) | (0.22) | (0.20) |
From net realized gain | (0.28) | — | — | — | — | — |
Total distributions | (0.67) | (0.32) | — | — | — | — |
Net asset value, end of period | $32.04 | $31.52 | $32.32 | $26.12 | $25.49 | $25.82 |
Total return (%)3,4 | 4.045 | (1.53) | 25.91 | 3.90 | (0.42) | 12.64 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $353 | $348 | $354 | $308 | $351 | $384 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.186 | 1.17 | 1.18 | 1.19 | 1.19 | 1.19 |
Expenses including reductions | 1.176 | 1.16 | 1.17 | 1.18 | 1.18 | 1.18 |
Net investment income | 2.016 | 1.37 | 1.12 | 1.76 | 1.07 | 0.73 |
Portfolio turnover (%) | 21 | 28 | 45 | 21 | 17 | 24 |
1 | Six months ended 4-30-19. 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 Classic Value Fund | 15 |
CLASS B SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $30.91 | $31.70 | $25.66 | $25.04 | $25.37 | $22.72 |
Net investment income2 | 0.28 | 0.22 | 0.12 | 0.25 | 0.08 | —3 |
Net realized and unrealized gain (loss) on investments | 0.79 | (0.92) | 6.26 | 0.52 | (0.38) | 2.68 |
Total from investment operations | 1.07 | (0.70) | 6.38 | 0.77 | (0.30) | 2.68 |
Less distributions | ||||||
From net investment income | (0.13) | (0.09) | (0.34) | (0.15) | (0.03) | (0.03) |
From net realized gain | (0.28) | — | — | — | — | — |
Total distributions | (0.41) | (0.09) | — | — | — | — |
Net asset value, end of period | $31.57 | $30.91 | $31.70 | $25.66 | $25.04 | $25.37 |
Total return (%)4,5 | 3.636 | (2.22) | 24.96 | 3.10 | (1.18) | 11.79 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $2 | $3 | $4 | $6 | $8 | $11 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.937 | 1.92 | 1.93 | 1.94 | 1.93 | 1.94 |
Expenses including reductions | 1.927 | 1.91 | 1.92 | 1.93 | 1.93 | 1.93 |
Net investment income | 1.297 | 0.65 | 0.40 | 1.03 | 0.32 | 0.01 |
Portfolio turnover (%) | 21 | 28 | 45 | 21 | 17 | 24 |
1 | Six months ended 4-30-19. 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. |
16 | JOHN HANCOCK Classic Value Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS C SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $30.89 | $31.69 | $25.65 | $25.03 | $25.36 | $22.71 |
Net investment income (loss)2 | 0.28 | 0.26 | 0.11 | 0.24 | 0.08 | (0.01) |
Net realized and unrealized gain (loss) on investments | 0.80 | (0.97) | 6.27 | 0.53 | (0.38) | 2.69 |
Total from investment operations | 1.08 | (0.71) | 6.38 | 0.77 | (0.30) | 2.68 |
Less distributions | ||||||
From net investment income | (0.14) | (0.09) | (0.34) | (0.15) | (0.03) | (0.03) |
From net realized gain | (0.28) | — | — | — | — | — |
Total distributions | (0.42) | (0.09) | — | — | — | — |
Net asset value, end of period | $31.55 | $30.89 | $31.69 | $25.65 | $25.03 | $25.36 |
Total return (%)3,4 | 3.655 | (2.25) | 24.96 | 3.11 | (1.18) | 11.80 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $26 | $26 | $75 | $76 | $88 | $101 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.936 | 1.92 | 1.93 | 1.94 | 1.94 | 1.94 |
Expenses including reductions | 1.926 | 1.91 | 1.92 | 1.93 | 1.93 | 1.93 |
Net investment income (loss) | 1.266 | 0.76 | 0.38 | 1.01 | 0.32 | (0.04) |
Portfolio turnover (%) | 21 | 28 | 45 | 21 | 17 | 24 |
1 | Six months ended 4-30-19. 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 Classic Value Fund | 17 |
CLASS I SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $31.62 | $32.42 | $26.19 | $25.56 | $25.90 | $23.19 |
Net investment income2 | 0.43 | 0.55 | 0.41 | 0.51 | 0.35 | 0.24 |
Net realized and unrealized gain (loss) on investments | 0.79 | (0.95) | 6.41 | 0.53 | (0.40) | 2.74 |
Total from investment operations | 1.22 | (0.40) | 6.82 | 1.04 | (0.05) | 2.98 |
Less distributions | ||||||
From net investment income | (0.47) | (0.40) | (0.59) | (0.41) | (0.29) | (0.27) |
From net realized gain | (0.28) | — | — | — | — | — |
Total distributions | (0.75) | (0.40) | — | — | — | — |
Net asset value, end of period | $32.09 | $31.62 | $32.42 | $26.19 | $25.56 | $25.90 |
Total return (%)3 | 4.174 | (1.29) | 26.24 | 4.18 | (0.19) | 12.95 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $1,579 | $1,518 | $1,767 | $1,146 | $1,591 | $2,355 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.945 | 0.93 | 0.92 | 0.93 | 0.92 | 0.93 |
Expenses including reductions | 0.935 | 0.92 | 0.91 | 0.92 | 0.91 | 0.92 |
Net investment income | 2.245 | 1.62 | 1.35 | 2.07 | 1.34 | 0.97 |
Portfolio turnover (%) | 21 | 28 | 45 | 21 | 17 | 24 |
1 | Six months ended 4-30-19. 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. |
18 | JOHN HANCOCK Classic Value Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R1 SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $31.50 | $32.31 | $26.13 | $25.49 | $25.83 | $23.13 |
Net investment income2 | 0.34 | 0.33 | 0.21 | 0.34 | 0.17 | 0.08 |
Net realized and unrealized gain (loss) on investments | 0.81 | (0.94) | 6.40 | 0.55 | (0.38) | 2.73 |
Total from investment operations | 1.15 | (0.61) | 6.61 | 0.89 | (0.21) | 2.81 |
Less distributions | ||||||
From net investment income | (0.26) | (0.20) | (0.43) | (0.25) | (0.13) | (0.11) |
From net realized gain | (0.28) | — | — | — | — | — |
Total distributions | (0.54) | (0.20) | — | — | — | — |
Net asset value, end of period | $32.11 | $31.50 | $32.31 | $26.13 | $25.49 | $25.83 |
Total return (%)3 | 3.864 | (1.92) | 25.43 | 3.53 | (0.82) | 12.21 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $3 | $3 | $4 | $3 | $3 | $7 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.565 | 1.56 | 1.57 | 1.55 | 1.57 | 1.57 |
Expenses including reductions | 1.565 | 1.56 | 1.56 | 1.55 | 1.57 | 1.57 |
Net investment income | 1.615 | 0.99 | 0.71 | 1.40 | 0.64 | 0.32 |
Portfolio turnover (%) | 21 | 28 | 45 | 21 | 17 | 24 |
1 | Six months ended 4-30-19. 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 Classic Value Fund | 19 |
CLASS R2 SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $31.44 | $32.24 | $26.07 | $25.46 | $25.85 | $23.16 |
Net investment income2 | 0.23 | 0.40 | 0.25 | 0.36 | 0.26 | 0.17 |
Net realized and unrealized gain (loss) on investments | 0.94 | (0.92) | 6.41 | 0.58 | (0.41) | 2.75 |
Total from investment operations | 1.17 | (0.52) | 6.66 | 0.94 | (0.15) | 2.92 |
Less distributions | ||||||
From net investment income | (0.34) | (0.28) | (0.49) | (0.33) | (0.24) | (0.23) |
From net realized gain | (0.28) | — | — | — | — | — |
Total distributions | (0.62) | (0.28) | — | — | — | — |
Net asset value, end of period | $31.99 | $31.44 | $32.24 | $26.07 | $25.46 | $25.85 |
Total return (%)3 | 3.974 | (1.66) | 25.71 | 3.76 | (0.56) | 12.70 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $1 | $9 | $7 | $1 | $—5 | $—5 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.306 | 1.32 | 1.33 | 1.33 | 1.26 | 1.19 |
Expenses including reductions | 1.296 | 1.31 | 1.32 | 1.32 | 1.26 | 1.18 |
Net investment income | 0.896 | 1.21 | 0.84 | 1.47 | 0.99 | 0.68 |
Portfolio turnover (%) | 21 | 28 | 45 | 21 | 17 | 24 |
1 | Six months ended 4-30-19. 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. |
20 | JOHN HANCOCK Classic Value Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R3 SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $31.42 | $32.20 | $26.03 | $25.41 | $25.75 | $23.08 |
Net investment income2 | 0.38 | 0.39 | 0.24 | 0.36 | 0.20 | 0.09 |
Net realized and unrealized gain (loss) on investments | 0.76 | (0.94) | 6.38 | 0.53 | (0.39) | 2.74 |
Total from investment operations | 1.14 | (0.55) | 6.62 | 0.89 | (0.19) | 2.83 |
Less distributions | ||||||
From net investment income | (0.30) | (0.23) | (0.45) | (0.27) | (0.15) | (0.16) |
From net realized gain | (0.28) | — | — | — | — | — |
Total distributions | (0.58) | (0.23) | — | — | — | — |
Net asset value, end of period | $31.98 | $31.42 | $32.20 | $26.03 | $25.41 | $25.75 |
Total return (%)3 | 3.884 | (1.74) | 25.58 | 3.57 | (0.73) | 12.34 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $1 | $1 | $1 | $1 | $1 | $1 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.475 | 1.40 | 1.47 | 1.48 | 1.48 | 1.47 |
Expenses including reductions | 1.465 | 1.40 | 1.47 | 1.47 | 1.47 | 1.47 |
Net investment income | 1.885 | 1.17 | 0.79 | 1.48 | 0.78 | 0.37 |
Portfolio turnover (%) | 21 | 28 | 45 | 21 | 17 | 24 |
1 | Six months ended 4-30-19. 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 Classic Value Fund | 21 |
CLASS R4 SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $31.60 | $32.40 | $26.17 | $25.55 | $25.90 | $23.19 |
Net investment income2 | 0.43 | 0.53 | 0.40 | 0.48 | 0.34 | 0.23 |
Net realized and unrealized gain (loss) on investments | 0.78 | (0.94) | 6.40 | 0.54 | (0.41) | 2.74 |
Total from investment operations | 1.21 | (0.41) | 6.80 | 1.02 | (0.07) | 2.97 |
Less distributions | ||||||
From net investment income | (0.45) | (0.39) | (0.57) | (0.40) | (0.28) | (0.26) |
From net realized gain | (0.28) | — | — | — | — | — |
Total distributions | (0.73) | (0.39) | — | — | — | — |
Net asset value, end of period | $32.08 | $31.60 | $32.40 | $26.17 | $25.55 | $25.90 |
Total return (%)3 | 4.154 | (1.33) | 26.20 | 4.10 | (0.24) | 12.92 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $—5 | $—5 | $—5 | $—5 | $—5 | $—5 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.086 | 1.07 | 1.08 | 1.08 | 1.08 | 1.07 |
Expenses including reductions | 0.976 | 0.96 | 0.97 | 0.97 | 0.97 | 0.96 |
Net investment income | 2.206 | 1.58 | 1.31 | 1.96 | 1.28 | 0.93 |
Portfolio turnover (%) | 21 | 28 | 45 | 21 | 17 | 24 |
1 | Six months ended 4-30-19. 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. |
22 | JOHN HANCOCK Classic Value Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
CLASS R5 SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $31.65 | $32.44 | $26.21 | $25.57 | $25.92 | $23.22 |
Net investment income2 | 0.42 | 0.57 | 0.43 | 0.54 | 0.37 | 0.25 |
Net realized and unrealized gain (loss) on investments | 0.81 | (0.94) | 6.40 | 0.52 | (0.40) | 2.74 |
Total from investment operations | 1.23 | (0.37) | 6.83 | 1.06 | (0.03) | 2.99 |
Less distributions | ||||||
From net investment income | (0.49) | (0.42) | (0.60) | (0.42) | (0.32) | (0.29) |
From net realized gain | (0.28) | — | — | — | — | — |
Total distributions | (0.77) | (0.42) | (0.60) | (0.42) | (0.32) | (0.29) |
Net asset value, end of period | $32.11 | $31.65 | $32.44 | $26.21 | $25.57 | $25.92 |
Total return (%)3 | 4.214 | (1.22) | 26.27 | 4.27 | (0.11) | 13.02 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $—5 | $—5 | $—5 | $—5 | $—5 | $—5 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.886 | 0.87 | 0.88 | 0.86 | 0.85 | 0.84 |
Expenses including reductions | 0.876 | 0.87 | 0.87 | 0.86 | 0.84 | 0.83 |
Net investment income | 2.166 | 1.68 | 1.40 | 2.22 | 1.40 | 1.03 |
Portfolio turnover (%) | 21 | 28 | 45 | 21 | 17 | 24 |
1 | Six months ended 4-30-19. 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. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK Classic Value Fund | 23 |
CLASS R6 SHARES Period ended | 4-30-191 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 |
Per share operating performance | ||||||
Net asset value, beginning of period | $31.67 | $32.46 | $26.21 | $25.59 | $25.94 | $23.21 |
Net investment income2 | 0.45 | 0.57 | 0.47 | 0.52 | 0.39 | 0.27 |
Net realized and unrealized gain (loss) on investments | 0.78 | (0.93) | 6.39 | 0.54 | (0.42) | 2.74 |
Total from investment operations | 1.23 | (0.36) | 6.86 | 1.06 | (0.03) | 3.01 |
Less distributions | ||||||
From net investment income | (0.51) | (0.43) | (0.61) | (0.44) | (0.32) | (0.28) |
From net realized gain | (0.28) | — | — | — | — | — |
Total distributions | (0.79) | (0.43) | — | — | — | — |
Net asset value, end of period | $32.11 | $31.67 | $32.46 | $26.21 | $25.59 | $25.94 |
Total return (%)3 | 4.204 | (1.17) | 26.41 | 4.26 | (0.09) | 13.11 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $391 | $384 | $1 | $1 | $1 | $1 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 0.835 | 0.82 | 0.83 | 0.83 | 0.83 | 0.83 |
Expenses including reductions | 0.825 | 0.81 | 0.81 | 0.81 | 0.81 | 0.80 |
Net investment income | 2.355 | 1.71 | 1.53 | 2.11 | 1.51 | 1.08 |
Portfolio turnover (%) | 21 | 28 | 45 | 21 | 17 | 24 |
1 | Six months ended 4-30-19. 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 Classic Value Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Note 1 — Organization
John Hancock Classic Value Fund (the fund) is a series of John Hancock Capital Series (the Trust), an open-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the 1940 Act). The investment objective of the fund is to seek long-term growth of capital.
The fund may offer multiple classes of shares. The shares currently outstanding by the fund are detailed in the Statements of assets and liabilities. Class A and Class C shares are offered to all investors. Class B shares are closed to new investors.Class I shares are offered to institutions and certain investors. Class R1, Class R2, Class R3, Class R4, and Class R5 shares are available only to certain retirement and 529 plans. Class R6 shares are only available to certain retirement plans, institutions and other investors. Class B shares convert to Class A shares eight years after purchase. Class C shares convert to Class A shares ten years after purchase (certain exclusions may apply). Shareholders of each class have exclusive voting rights to matters that affect that class. The distribution and service fees, if any, and transfer agent fees for each class may differ.
Note 2 — Significant accounting policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP), which require management to make certain estimates and assumptions as of the date of the financial statements. Actual results could differ from those estimates and those differences could be significant. The fund qualifies as an investment company under Topic 946 of Accounting Standards Codification of US GAAP.
Events or transactions occurring after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the fund:
Security valuation.Investments are stated at value as of the scheduled close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 p.m., Eastern Time. In case of emergency or other disruption resulting in the NYSE not opening for trading or the NYSE closing at a time other than the regularly scheduled close, the net asset value (NAV) may be determined as of the regularly scheduled close of the NYSE pursuant to the fund's Valuation Policies and Procedures.
In order to value the securities, the fund uses the following valuation techniques: Equity securities held by the fund are typically valued at the last sale price or official closing price on the exchange or principal market where the security trades. In the event there were no sales during the day or closing prices are not available, the securities are valued using the last available bid price. Debt obligations are typically valued based on the evaluated prices provided by an independent pricing vendor. Independent pricing vendors utilize matrix pricing which takes into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data, as well as broker supplied prices.
In certain instances, the Pricing Committee may determine to value equity securities using prices obtained from another exchange or market if trading on the exchange or market on which prices are typically obtained did not open for trading as scheduled, or if trading closed earlier than scheduled, and trading occurred as normal on another exchange or market.
Other portfolio securities and assets, for which reliable market quotations are not readily available, are valued at fair value as determined in good faith by the fund's Pricing Committee following procedures established by the Board of Trustees. The frequency with which these fair valuation procedures are used cannot be predicted and fair value of
securities may differ significantly from the value that would have been used had a ready market for such securities existed.
The fund uses a three-tier hierarchy to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities. Level 2 includes securities valued using other significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities valued using significant unobservable inputs when market prices are not readily available or reliable, including the fund's own assumptions in determining the fair value of investments. Factors used in determining value may include market or issuer specific events or trends, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques and related inputs may result in transfers into or out of an assigned level within the disclosure hierarchy.
As of April 30, 2019, all investments are categorized as Level 1 under the hierarchy described above, except for repurchase agreements, which are categorized as Level 2.
Repurchase agreements.The fund may enter into repurchase agreements. When the fund enters into a repurchase agreement, it receives collateral that is held in a segregated account by the fund's custodian. The collateral amount is marked-to-market and monitored on a daily basis to ensure that the collateral held is in an amount not less than the principal amount of the repurchase agreement plus any accrued interest. Collateral received by the fund for repurchase agreements is disclosed in the Fund's investments as part of the caption related to the repurchase agreement.
Repurchase agreements are typically governed by the terms and conditions of the Master Repurchase Agreement and/or Global Master Repurchase Agreement (collectively, MRA). Upon an event of default, the non-defaulting party may close out all transactions traded under the MRA and net amounts owed. Absent an event of default, assets and liabilities resulting from repurchase agreements are not offset in the Statement of assets and liabilities. In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the collateral value may decline or the counterparty may have insufficient assets to pay back claims resulting from close-out of the transactions.
Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily NAV calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Interest income includes coupon interest and amortization/accretion of premiums/discounts on debt securities. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by stopping current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful. Dividend income is recorded on the ex-date, except for dividends of foreign securities where the dividend may not be known until after the ex-date. In those cases, dividend income, net of withholding taxes, is recorded when the fund becomes aware of the dividends. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds from litigation.
Securities lending. The fund may lend its securities to earn additional income. The fund receives cash collateral from the borrower in an amount not less than the market value of the loaned securities. The fund will invest its collateral in JHCT, an affiliate of the fund, which has a floating NAV and is registered with the Securities and Exchange Commission
as an investment company. JHCT invests in short-term money market investments. The fund will receive the benefit of any gains and bear any losses generated by JHCT with respect to the cash collateral.
The fund has the right to recall loaned securities on demand. If a borrower fails to return loaned securities when due, then the lending agent is responsible and indemnifies the fund for the lent securities. The lending agent uses the collateral received from the borrower to purchase replacement securities of the same issue, type, class and series of the loaned securities. If the value of the collateral is less than the purchase cost of replacement securities, the lending agent is responsible for satisfying the shortfall but only to the extent that the shortfall is not due to any decrease in the value of JHCT.
Although the risk of the loss of the securities lent is mitigated by receiving collateral from the borrower and through lending agent indemnification, the fund could experience a delay in recovering securities or could experience a lower than expected return if the borrower fails to return the securities on a timely basis. The fund receives compensation for lending its securities by retaining a portion of the return on the investment of the collateral and compensation from fees earned from borrowers of the securities. Securities lending income received by the fund is net of fees retained by the securities lending agent. Net income received from JHCT is a component of securities lending income as recorded on the Statement of operations.
Obligations to repay collateral received by the fund are shown on the Statement of assets and liabilities as Payable upon return of securities loaned and are secured by the loaned securities. As of April 30, 2019, the fund loaned common stocks valued at $17,921,055 and received $18,314,765 of cash collateral.
Foreign investing. Assets, including investments, and liabilities denominated in foreign currencies, are translated into U.S. dollar values each day at the prevailing exchange rate. Purchases and sales of securities, income and expenses are translated into U.S. dollars at the prevailing exchange rate on the date of the transaction. The effect of changes in foreign currency exchange rates on the value of securities is reflected as a component of the realized and unrealized gains (losses) on investments. Foreign investments are subject to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar value of securities denominated in that currency.
Funds that invest internationally generally carry more risk than funds that invest strictly in U.S. securities. Risks can result from differences in economic and political conditions, regulations, market practices (including higher transaction costs), accounting standards and other factors.
Foreign taxes. The fund may be subject to withholding tax on income, capital gains or repatriation taxes imposed by certain countries, a portion of which may be recoverable. Foreign taxes are accrued based upon the fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Taxes are accrued based on gains realized by the fund as a result of certain foreign security sales. In certain circumstances, estimated taxes are accrued based on unrealized appreciation of such securities. Investment income is recorded net of foreign withholding taxes.
Line of credit.The fund may have the ability to borrow from banks for temporary or emergency purposes, including meeting redemption requests that otherwise might require the untimely sale of securities. Pursuant to the fund's custodian agreement, the custodian may loan money to the fund to make properly authorized payments. The fund is obligated to repay the custodian for any overdraft, including any related costs or expenses. The custodian may have a lien, security interest or security entitlement in any fund property that is not otherwise segregated or pledged, to the extent of any overdraft, and to the maximum extent permitted by law.
The fund and other affiliated funds have entered into a syndicated line of credit agreement with Citibank, N.A. as the administrative agent that enables them to participate in a $750 million unsecured committed line of credit. Excluding
commitments designated for a certain fund and subject to the needs of all other affiliated funds, the fund can borrow up to an aggregate commitment amount of $500 million, subject to asset coverage and other limitations as specified in the agreement. A commitment fee payable at the end of each calendar quarter, based on the average daily unused portion of the line of credit, is charged to each participating fund based on a combination of fixed and asset based allocations and is reflected in Other expenses on the Statement of operations. For the six months ended April 30, 2019, the fund had no borrowings under the line of credit. Commitment fees for the six months ended April 30, 2019 were $2,637.
Expenses. Within the John Hancock group of funds complex, expenses that are directly attributable to an individual fund are allocated to such fund. Expenses that are not readily attributable to a specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund's relative net assets. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Class allocations. Income, common expenses and realized and unrealized gains (losses) are determined at the fund level and allocated daily to each class of shares based on the net assets of the class. Class-specific expenses, such as distribution and service fees, if any, and transfer agent fees, for all classes, are charged daily at the class level based on the net assets of each class and the specific expense rates applicable to each class.
Federal income taxes. The fund intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.
As of October 31, 2018, the fund had no uncertain tax positions that would require financial statement recognition, derecognition or disclosure. The fund's federal tax returns are subject to examination by the Internal Revenue Service for a period of three years.
Distribution of income and gains. Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The fund generally declares and pays dividends and capital gain distributions, if any, annually.
Distributions paid by the fund with respect to each class of shares are calculated in the same manner, at the same time and in the same amount, except for the effect of class level expenses that may be applied differently to each class.
Such distributions, on a tax basis, are determined in conformity with income tax regulations, which may differ from US GAAP. Distributions in excess of tax basis earnings and profits, if any, are reported in the fund's financial statements as a return of capital. The final determination of tax characteristics of the fund's distribution will occur at the end of the year and will subsequently be reported to shareholders.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any,will reverse in a subsequent period. Book-tax differences are primarily attributable to wash sale loss deferrals and litigation proceeds.
Note 3 — Guarantees and indemnifications
Under the Trust's organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust, including the fund. Additionally, in the normal course of business, the fund enters into contracts with service providers that contain general indemnification clauses. The fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the fund that have not yet occurred. The risk of material loss from such claims is considered remote.
Note 4 — Fees and transactions with affiliates
John Hancock Advisers, LLC (the Advisor) serves as investment advisor for the fund. John Hancock Funds, LLC (the Distributor), an affiliate of the Advisor, serves as principal underwriter of the fund. The Advisor and the Distributor are indirect, wholly owned subsidiaries of Manulife Financial Corporation (MFC).
Management fee. The fund has an investment management agreement with the Advisor under which the fund pays a monthly management fee to the Advisor equivalent on an annual basis to the sum of: (a) 0.750% of the first $2.5 billion of the fund's average daily net assets; (b) 0.740% of the next $2.5 billion of the fund's average daily net assets and (c) 0.730%of the fund's average daily net assets in excess of $5 billion. The Advisor has a subadvisory agreement with Pzena Investment Management, LLC. The fund is not responsible for payment of the subadvisory fees.
The Advisor has contractually agreed to waive a portion of its management fee and/or reimburse expenses for certain funds of the John Hancock group of funds complex, including the fund (the participating portfolios). 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. During the six months ended April 30, 2019, this waiver amounted to 0.01% of the fund's average net assets on an annualized basis. This agreement expires on June 30, 2020, unless renewed by mutual agreement of the fund and the Advisor based upon a determination that this is appropriate under the circumstances at that time.
For the six months ended April 30, 2019, the expense reductions described above amounted to the following:
Class | Expense reduction | Class | Expense reduction | |
Class A | $12,296 | Class R3 | $48 | |
Class B | 86 | Class R4 | 2 | |
Class C | 928 | Class R5 | 2 | |
Class I | 54,600 | Class R6 | 13,617 | |
Class R1 | 104 | Total | $81,891 | |
Class R2 | 208 |
Expenses waived or reimbursed in the current fiscal period are not subject to recapture in future fiscal periods.
The investment management fees, including the impact of the waivers and reimbursements as described above, incurred for the six months ended April 30, 2019were equivalent to a net annual effective rate of 0.74% of the fund's average daily net assets.
Accounting and legal services. Pursuant to the Accounting and Legal Services Agreement, the fund reimburses the Advisor for all expenses associated with providing the administrative, financial, legal, compliance, accounting and recordkeeping services to the fund, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. These expenses are allocated to each share class based on its relative net assets at the time the expense was incurred. These accounting and legal services fees incurred for the six months ended April 30, 2019 amounted to an annual rate of 0.02% of the fund's average daily net assets.
Distribution and service plans. The fund has a distribution agreement with the Distributor. The fund has adopted distribution and service plans with respect to Class A, Class B, Class C, Class R1, Class R2, Class R3, and Class R4 shares pursuant to Rule 12b-1 under the 1940 Act, to pay the Distributor for services provided as the distributor of shares of the fund. In addition, under a service plan for Class R1, Class R2, Class R3, Class R4, and Class R5 shares, the fund pays for certain other services. The fund may pay up to the following contractual rates of distribution and service
fees under these arrangements, expressed as an annual percentage of average daily net assets for each class of the fund's shares:
Class | Rule 12b-1 fee | Service fee | Class | Rule 12b-1 fee | Service fee | |
Class A | 0.25% | — | Class R2 | 0.25% | 0.25% | |
Class B | 1.00% | — | Class R3 | 0.50% | 0.15% | |
Class C | 1.00% | — | Class R4 | 0.25% | 0.10% | |
Class R1 | 0.50% | 0.25% | Class R5 | — | 0.05% |
The fund's Distributor has contractually agreed to waive 0.10% of Rule12b-1 fees for Class R4 shares. The current waiver agreement expires on February 29, 2020, unless renewed by mutual agreement of the fund and the Distributor based upon a determination that this is appropriate under the circumstances at the time. This contractual waiver amounted to $34 for Class R4 shares for the six months ended April 30, 2019.
Sales charges. Class A shares are assessed up-front sales charges, which resulted in payments to the Distributor amounting to $101,006 for the six months ended April 30, 2019. Of this amount, $16,042 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $84,626 was paid as sales commissions to broker-dealers and $338 was paid as sales commissions to sales personnel of Signator Investors, Inc., which had been a broker-dealer affiliate of the Advisor through November 2, 2018.
Class A, Class B and Class C shares may be subject to contingent deferred sales charges (CDSCs). Certain Class A shares that are acquired through purchases of $1 million or more and are redeemed within one year of purchase are subject to a 1.00% sales charge. Class B shares that are redeemed within six years of purchase are subject to CDSCs, at declining rates, beginning at 5.00%. Class C shares that are redeemed within one year of purchase are subject to a 1.00% CDSC. CDSCs are applied to the lesser of the current market value at the time of redemption or the original purchase cost of the shares being redeemed. Proceeds from CDSCs are used to compensate the Distributor for providing distribution-related services in connection with the sale of these shares. During the six months ended April 30, 2019, CDSCs received by the Distributor amounted to $79, $167 and $426 for Class A, Class B and Class C shares, respectively.
Transfer agent fees. The John Hancock group of funds has a complex-wide transfer agent agreement with John Hancock Signature Services, Inc. (Signature Services), an affiliate of the Advisor. The transfer agent fees paid to Signature Services are determined based on the cost to Signature Services (Signature Services Cost) of providing recordkeeping services. It also includes out-of-pocket expenses, including payments made to third-parties for recordkeeping services provided to their clients who invest in one or more John Hancock funds. In addition, Signature Services Cost may be reduced by certain fees that Signature Services receives in connection with retirement and small accounts. Signature Services Cost is calculated monthly and allocated, as applicable, to five categories of share classes: Retail Share and Institutional Share Classes of Non-Municipal Bond Funds, Class R6 Shares, Retirement Share Classes and Municipal Bond Share Classes. Within each of these categories, the applicable costs are allocated to the affected John Hancock affiliated funds and/or classes, based on the relative average daily net assets.
Class level expenses. Class level expenses for the six months ended April 30, 2019 were:
Class | Distribution and service fees | Transfer agent fees | ||||||
Class A | $419,007 | $188,423 | ||||||
Class B | 11,814 | 1,328 | ||||||
Class C | 126,527 | 14,226 |
Class | Distribution and service fees | Transfer agent fees | ||||||
Class I | — | $955,074 | ||||||
Class R1 | $10,431 | 194 | ||||||
Class R2 | 13,685 | 407 | ||||||
Class R3 | 4,213 | 90 | ||||||
Class R4 | 84 | 5 | ||||||
Class R5 | 17 | 5 | ||||||
Class R6 | — | 25,504 | ||||||
Total | $585,778 | $1,185,256 |
Trustee expenses.Thefund compensates each Trustee who is not an employee of the Advisor or its affiliates. The costs of paying Trustee compensation and expenses are allocated to the fund based on its net assets relative to other funds within the John Hancock group of funds complex.
Interfund lending program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with certain other funds advised by the Advisor or its affiliates, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, no interfund loans were outstanding. Interest expense is included in Other expenses on the Statement of operations. The fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or lender | Weighted average loan balance | Days outstanding | Weighted average interest rate | Interest (expense) |
Borrower | $13,857,658 | 4 | 2.350% | ($3,618) |
Note 5 — Fund share transactions
Transactions in fund shares for the six months ended April 30, 2019 and for the year ended October 31, 2018 were as follows:
Six months ended 4-30-19 | Year ended 10-31-18 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class A shares | ||||||||||||||||||||||||||
Sold | 692,789 | $20,585,406 | 2,006,273 | $68,327,765 | ||||||||||||||||||||||
Distributions reinvested | 243,463 | 6,892,431 | 96,879 | 3,228,010 | ||||||||||||||||||||||
Repurchased | (968,727 | ) | (29,124,896 | ) | (2,014,562 | ) | (67,661,377 | ) | ||||||||||||||||||
Net increase (decrease) | (32,475 | ) | $(1,647,059 | ) | 88,590 | $3,894,398 | ||||||||||||||||||||
Class B shares | ||||||||||||||||||||||||||
Sold | 1,652 | $45,991 | 2,773 | $90,175 | ||||||||||||||||||||||
Distributions reinvested | 1,163 | 32,533 | 338 | 11,102 | ||||||||||||||||||||||
Repurchased | (26,015 | ) | (784,591 | ) | (52,999 | ) | (1,750,841 | ) | ||||||||||||||||||
Net decrease | (23,200 | ) | $(706,067 | ) | (49,888 | ) | $(1,649,564 | ) | ||||||||||||||||||
Class C shares | ||||||||||||||||||||||||||
Sold | 108,596 | $3,032,630 | 78,780 | $2,614,557 | ||||||||||||||||||||||
Distributions reinvested | 11,105 | 310,501 | 6,124 | 201,289 | ||||||||||||||||||||||
Repurchased | (162,617 | ) | (4,817,793 | ) | (1,611,127 | ) | (54,059,338 | ) | ||||||||||||||||||
Net decrease | (42,916 | ) | $(1,474,662 | ) | (1,526,223 | ) | $(51,243,492 | ) |
Six months ended 4-30-19 | Year ended 10-31-18 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class I shares | ||||||||||||||||||||||||||
Sold | 6,781,710 | $200,701,432 | 13,499,554 | $456,832,057 | ||||||||||||||||||||||
Distributions reinvested | 1,206,310 | 34,174,754 | 489,456 | 16,328,256 | ||||||||||||||||||||||
Repurchased | (6,787,991 | ) | (205,363,238 | ) | (20,486,916 | ) | (680,004,271 | ) | ||||||||||||||||||
Net increase (decrease) | 1,200,029 | $29,512,948 | (6,497,906 | ) | $(206,843,958 | ) | ||||||||||||||||||||
Class R1 shares | ||||||||||||||||||||||||||
Sold | 4,914 | $143,731 | 13,832 | $464,484 | ||||||||||||||||||||||
Distributions reinvested | 1,488 | 42,283 | 561 | 18,732 | ||||||||||||||||||||||
Repurchased | (17,871 | ) | (528,804 | ) | (23,545 | ) | (785,740 | ) | ||||||||||||||||||
Net decrease | (11,469 | ) | $(342,790 | ) | (9,152 | ) | $(302,524 | ) | ||||||||||||||||||
Class R2 shares | ||||||||||||||||||||||||||
Sold | 11,963 | $356,624 | 120,982 | $4,127,774 | ||||||||||||||||||||||
Distributions reinvested | 6,014 | 170,086 | 1,813 | 60,331 | ||||||||||||||||||||||
Repurchased | (288,570 | ) | (8,981,615 | ) | (58,238 | ) | (1,944,693 | ) | ||||||||||||||||||
Net increase (decrease) | (270,593 | ) | $(8,454,905 | ) | 64,557 | $2,243,412 | ||||||||||||||||||||
Class R3 shares | ||||||||||||||||||||||||||
Sold | 5,142 | $158,491 | 7,362 | $253,881 | ||||||||||||||||||||||
Distributions reinvested | 974 | 27,552 | 293 | 9,760 | ||||||||||||||||||||||
Repurchased | (29,307 | ) | (918,872 | ) | (6,046 | ) | (204,359 | ) | ||||||||||||||||||
Net increase (decrease) | (23,191 | ) | $(732,829 | ) | 1,609 | $59,282 | ||||||||||||||||||||
Class R5 shares | ||||||||||||||||||||||||||
Sold | 531 | $16,395 | 313 | $10,451 | ||||||||||||||||||||||
Distributions reinvested | 60 | 1,701 | 26 | 869 | ||||||||||||||||||||||
Repurchased | (831 | ) | (25,673 | ) | (230 | ) | (7,723 | ) | ||||||||||||||||||
Net increase (decrease) | (240 | ) | $(7,577 | ) | 109 | $3,597 | ||||||||||||||||||||
Class R6 shares | ||||||||||||||||||||||||||
Sold | 995,684 | $30,169,251 | 14,035,414 | $459,838,473 | ||||||||||||||||||||||
Distributions reinvested | 334,673 | 9,484,641 | 135,322 | 4,515,692 | ||||||||||||||||||||||
Repurchased | (1,277,653 | ) | (38,900,836 | ) | (2,070,964 | ) | (69,891,042 | ) | ||||||||||||||||||
Net increase | 52,704 | $753,056 | 12,099,772 | $394,463,123 | ||||||||||||||||||||||
Total net increase | 848,649 | $16,900,115 | 4,171,468 | $140,624,274 |
There were no share transactions for Class R4 for the six months ended April 30,2019 and for the year ended October 31, 2018.
Affiliates of the fund owned 100% of shares of Class R4 on April 30, 2019.
Note 6 — Purchase and sale of securities
Purchases and sales of securities, other than short-term investments, amounted to $469,508,237 and $496,622,168, respectively, for the six months ended April 30, 2019.
Note 7 — Industry or sector risk
The fund may invest a large percentage of its assets in one or more particular industries or sectors of the economy. If a large percentage of the fund's assets are economically tied to a single or small number of industries or sectors of the economy, the fund will be less diversified than a more broadly diversified fund, and it may cause the fund to underperform if that industry or sector underperforms. In addition, focusing on a particular industry or sector may make the fund's NAV more volatile. Further, a fund that invests in particular industries or sectors is particularly susceptible to the impact of market, economic, regulatory and other factors affecting those industries or sectors.
Note 8 — Investment in affiliated underlying funds
The fund may invest in affiliated underlying funds that are managed by the Advisor and its affiliates. Information regarding the fund's purchases and sales of the affiliated underlying funds as well as income and capital gains earned, if any, during the period is as follows:
Dividends and distributions | ||||||||||||||||||||||||||||||||||||||
Fund | 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* | — | 8,556,195 | (6,725,425 | ) | 1,830,770 | — | — | $4,186 | $1,933 | $18,320,884 | ||||||||||||||||||||||||||||
*Refer to the Securities lending note within Note 2 for details regarding this investment. |
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 Advisers, LLC Subadvisor Pzena Investment Management, LLC Portfolio Managers John J. Flynn Principal distributor John Hancock Funds, 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
#Effective 6-19-18
**Effective 9-13-18
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 Investments 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 Funds, 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.
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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 Funds, 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 Classic Value Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus.
MF837930 | 38SA 4/19 6/19 |
ITEM 2. CODE OF ETHICS.
Not applicable.
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.
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.
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, Governance and Administration 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) 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) 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, Governance and Administration 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 Capital Series
By: | /s/ Andrew Arnott |
Andrew Arnott | |
President | |
Date: | June 21, 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: | June 21, 2019 |
By: | /s/ Charles A. Rizzo |
Charles A. Rizzo | |
Chief Financial Officer | |
Date: | June 21, 2019 |