John Hancock Investments Lowers Expenses Again

Expense reductions of up to 38 percent to provide significant and immediate cost savings to investors across a range of strong-performing funds

Jul 06, 2015, 18:12 ET from John Hancock Investments

BOSTON, July 6, 2015 /PRNewswire/ -- John Hancock Investments today announced a sweeping package of expense reductions—its fourth such move in less than three years—on a broad range of funds that together represent more than $36 billion in assets under management. Reductions of up to 26 basis points or up to 38 percent per fund vary by fund and result from a combination of direct cuts, contractual expense caps, new breakpoints, and growing economies of scale.

"Maximizing the value we provide our mutual fund shareholders goes well beyond the strong risk-adjusted performance of our funds," said Andrew G. Arnott, President and CEO of John Hancock Investments. "We remain intensely focused on fees and on ensuring that our funds are cost effective for investors."

Much of the opportunity to repeatedly lower expenses stems from surging assets under management at John Hancock Investments and the greater economies of scale it provides. The firm has experienced 14 consecutive calendar quarters of positive net flows, and mutual fund assets have increased nearly 16 percent year-over-year through the end of May. This dramatic growth has been driven in large part by the firm's exceptionally strong performance, with 35 funds rated four or five stars by Morningstar at the highest-rated share class.[1]

"Investors and financial advisors increasingly have turned to our unique manager-of-managers approach because they value the more than 25 years' experience in manager research and oversight we put into every one of our funds," explained Arnott. "We're pleased that our growth in assets under management enables us to share those greater economies of scale with our investors."   

Funds with contractual expense reductions to net expense ratios ranging from one to 24 basis points include:

  • John Hancock Global Income Fund (Class A and Class I only)
  • John Hancock International Core Fund (Class A and Class I only)
  • John Hancock Small Cap Value Fund (Class A and Class I only)
  • John Hancock Small Company Fund (Class A and Class I only)
  • John Hancock Value Equity Fund

In addition to these expense reductions, other John Hancock mutual funds continue to see their expenses decline due to asset growth and lower custodian fees. Expenses are estimated to be between three and 24 basis points lower going forward for Class A shares for the following funds:

  • John Hancock Core High Yield Fund
  • John Hancock Disciplined Value Fund
  • John Hancock Disciplined Value Mid Cap Fund
  • John Hancock Global Shareholder Yield Fund
  • John Hancock International Growth Fund
  • John Hancock International Value Equity
  • John Hancock Strategic Growth Fund

John Hancock Investments also lowered expenses by 20 to 26 basis points across both the John Hancock Retirement Living II target-date suite and the John Hancock Retirement Choices target-date suite, which total 20 funds. Target-date funds have played an increasingly important role as default options in retirement plans. These cuts provide significant cost savings for shareholders while also positioning the funds for future growth.

These expense reductions follow additional reductions made in the John Hancock Freedom 529 plan and 23 other fee reductions in the mutual fund lineup over the last few years.

Additional details of these new expense reductions can be found in the funds' latest prospectus material.

All investments involve risk, including the possible loss of principal. The stock prices of midsize and small companies can change more frequently and dramatically than those of large companies. Growth stocks may be more susceptible to earnings disappointments, and value stocks may decline in price. Large company stocks could fall out of favor, and foreign investing, especially in emerging markets, has additional risks, such as currency and market volatility and political and social instability. Fixed-income investments are subject to interest-rate and credit risk; their value will normally decline as interest rates rise or if a creditor is unable to make principal or interest payments. Investments in higher-yielding, lower-rated securities include a higher risk of default. Please see the fund's prospectus for additional risks.

John Hancock Freedom 529 is distributed by John Hancock Distributors LLC, which is an affiliate of John Hancock Funds LLC, the distributor of John Hancock Investments.

There may be 529 plans offered by the account holder's or beneficiary's home state that offer potential state income tax or other benefits to its residents that should be considered before investing. Please call 866-626-8529 to obtain a Plan Disclosure Document or prospectus for any of the underlying funds. The Plan Disclosure Document contains complete details on investment objectives, risks, fees, charges, and expenses, as well as more information about municipal fund securities and the underlying investment companies that should be considered before investing. You should read the Plan Disclosure Document carefully prior to investing.

John Hancock Freedom 529 is a college savings plan offered by the Education Trust of Alaska, managed by T. Rowe Price, and distributed by John Hancock Distributors LLC through other broker/dealers that have a selling agreement with John Hancock Distributors LLC. John Hancock Distributors LLC is a member of FINRA and is listed with the Municipal Securities Rulemaking Board (MSRB). © 2015. John Hancock. All rights reserved.

529 plans are not FDIC insured, may lose value and are not bank or state guaranteed.

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 us at jhinvestments.com. Please read the prospectus carefully before investing or sending money.

About John Hancock Investments
John Hancock has helped individuals and institutions build and protect wealth since 1862. Today, we are one of America's strongest and most-recognized brands. As a manager of managers, John Hancock Investments searches the world to find proven portfolio teams with specialized expertise for every fund we offer, then we apply vigorous investment oversight to ensure they continue to meet our uncompromising standards and serve the best interests of our shareholders. Our unique approach to asset management has led to a diverse set of investments deeply rooted in investor needs, along with strong risk-adjusted returns across asset classes. John Hancock Investments managed nearly $130 billion in assets as of March 31, 2015.

About John Hancock Financial and Manulife
John Hancock Financial is a division of Manulife, a leading Canada-based financial services group with principal operations in Asia, Canada, and the United States. Operating as Manulife in Canada and Asia, and primarily as John Hancock in the United States, our group of companies offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents, and distribution partners. Assets under management by Manulife and its subsidiaries were C$821 billion (US$648 billion) as of March 31, 2015. Manulife Financial Corporation trades as MFC on the TSX, NYSE, and PSE, and under 945 on the SEHK. Manulife can be found at manulife.com.

The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers and administers a broad range of financial products, including life insurance, annuities, investments,  401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at johnhancock.com.

[1] Data as of May 31, 2015. For each fund with at least a 3-year history, Morningstar calculates a Morningstar rating based on a Morningstar Risk-Adjusted Return that accounts for variation in a fund's monthly performance (including effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewarding consistent performance. The top 10.0% of funds in each category, the next 22.5%, 35.0%, 22.5%, and bottom 10.0% receive 5, 4, 3, 2, or 1 star(s), respectively. Each share class is counted as a fraction of one fund within this scale and is rated separately, which may cause slight variations in the distribution percentages. The overall Morningstar rating for a fund is derived from a weighted average of the performance associated with its 3-, 5-, and 10-year (if applicable) Morningstar rating metrics. Out of 73 funds rated by Morningstar, 15 funds received a 5-star Overall rating and 20 funds received a 4-star overall rating. Past performance does not guarantee future results.

SOURCE John Hancock Investments