Fund commentary. John Hancock Retirement Living Portfolios Q1 2016

Transcription

1 John Hancock Retirement Living Portfolios Fund commentary Seek: Long-term growth of capital or a balance between a high level of current income and growth of capital Use for: Broadly diversified, risk-targeted portfolio Managed by Robert M. Boyda On the portfolio since 2010 Investing since 1979 Marcelle Daher, CFA On the portfolio since 2013 Investing since 1999 Nathan W. Thooft, CFA On the portfolio since 2013 Investing since 2000 John Hancock Asset Management Established asset manager with global resources and expertise extending across equity, fixed-income, and alternative investments as well as asset allocation strategies Highlights Global developed-market stocks finished the quarter roughly where they started, recovering from an initial pounding early in 2016; emerging-market equities rebounded to post solid gains. Most fixed-income markets fared well, including local currency emerging debt, long duration U.S. Treasuries, and corporate credit; prices across the commodity markets were more mixed. Defensive sectors often overlooked by stock pickers surged; in this difficult environment for active managers, John Hancock Retirement Living Portfolios trailed their blended benchmarks. Market review and outlook From the quarter s beginning to its end, broad global equity indexes were basically flat, masking a spike in intraperiod volatility readings during the opening weeks of Returns from emerging equity markets led the way, followed by more modest results from U.S. stocks. Equity markets in Europe and Japan declined. Bonds rallied throughout much of the world. Emerging-market debt and U.S. Treasuries performed particularly well, reflecting confidence that the U.S. Federal Reserve (Fed) will continue to pursue a relatively accommodative interest-rate policy. Corporate issues also closed the quarter with positive returns as investors returned to the credit markets to take advantage of attractive yield spreads. After a sustained period of price weaknesses, gold staged a striking comeback as the U.S. dollar weakened against the world s other major currencies. Global real estate investment trusts were up. Portfolio changes We slightly reduced the portfolios stock exposure and increased the bond weighting. We pared positions in bank loans, redeploying the proceeds to other debt assets, including Treasury Inflation- Protected Securities, or TIPS. As always, we favor a diversified approach to the capital markets, with broad global representation. We also populate the portfolios with absolute return mandates that target positive returns throughout the course of a given market cycle, an approach we find especially attractive in an environment of below-average prospective returns. This commentary reflects the views of the portfolio managers through 3/31/16. The managers views are subject to change as market and other conditions warrant. No forecasts are guaranteed. This commentary is provided for informational purposes only and is not an endorsement of any security, mutual, sector, or index. John Hancock Asset Management, John Hancock Advisers, LLC, and their affiliates, employees, and clients may hold or trade the securities mentioned in this commentary. Diversification does not guarantee a profit or eliminate the risk of a loss.

2 John Hancock Retirement Living through 2010 Portfolio A: JLAAX R1: JLADX R2: JLAEX R3: JLAFX R4: JLAGX R5: JLAHX R6: JLAIX Morningstar category: Target Date Lipper category: Mixed-Asset Target 2010 Funds Active Bond Fund (Declaration/JHAM) Sleeve (JHAM) 8.50 Total Return Fund (PIMCO) 7.92 Floating Rate Income Fund (WAMCO) 7.17 Strategic Income Opportunities Fund (JHAM) 5.45 Sleeve (JHAM) 5.43 Short Duration Credit Opportunities Fund (Stone Harbor) 4.67 Price) 3.91 Real Return Bond Fund (PIMCO) 3.64 Spectrum Income Fund (T. Rowe Price) 3.58 Core Bond Fund (Wells Capital) 2.92 (Standard Life) 2.62 Global Bond Fund (PIMCO) 2.14 Emerging Markets Debt Fund (JHAM) 1.81 Global Income Fund (Stone Harbor) 1.79 Quadrant) 1.74 U.S. Equity Fund (GMO) 1.74 Asia Pacific Total Return Bond Fund (JHAM) 1.72 Global Short Duration Credit Fund (JHAM) 1.48 Global Shareholder Yield Fund (Epoch) 1.28 Sleeve (JHAM) 0.98 U.S. High Yield Bond Fund (Wells Capital) 0.94 Global Equity Fund (JHAM) 0.94 Natural Resources Fund (Jennison) 0.93 Mid Cap Stock Fund (Wellington) 0.89 Equity Income Fund (T. Rowe Price) 0.87 Blue Chip Growth Fund (T. Rowe Price) 0.83 Capital Appreciation Fund (Jennison) 0.77 Strategic Growth Fund (JHAM) 0.77 Sleeve (JHAM) 0.75 The portfolio was up in absolute terms, trailing its custom blended benchmark. An underweight allocation to emerging-market equities hurt results, as did an overweight allocation to bank loans. However, an overweight allocation to defensively oriented equity strategies provided a relative boost, as did an underweight allocation to international developed-market services were underrepresented. Individual holdings that hindered results included Floating Rate Income Fund (WAMCO), Blue Chip Growth Fund (T. Rowe Price), and Capital Appreciation Fund (Jennison). (Standard Life) also struggled during the quarter; long exposure to European and Japanese equity markets and to the U.S. dollar detracted from performance, as did short exposure to U.S. duration in this declining interest-rate environment. Holdings that fared better included Spectrum Income Fund (T. Rowe Price), Global Shareholder Yield Fund (Epoch), and Equity Income Fund (T. Rowe Price). Quadrant), which takes long and short foreign exchange positions, often demonstrating low correlations with the broader stock and bond markets, also had a strong quarter; short exposure to the British pound boosted results, as did long exposure to the Japanese yen. date Class R1 (without sales charge) /30/06 Class R6 (without sales charge) /30/06 Morningstar Target Date Average Blended benchmark Gross Net (what you pay) of globally issued, U.S. dollar-denominated high-yield bonds. The blended index reflects the portfolio s asset allocation under normal conditions and adjusts over time as follows: 40.6% Russell 3000 Index/17.4% MSCI ACWI ex-u.s. Index/33.6% Barclays U.S. Aggregate Bond Index/8.4% BofA Merrill Lynch U.S. High Yield Master II Index from the portfolio s inception to 11/30/07; 39.2%/16.8%/35.2%/8.8% from 12/1/07 to 11/30/08; 37.8%/16.2%/36.8%/9.2% from 12/1/08 to 11/30/09; 36.4%/15.6%/38.4%/9.6% from 12/1/09 to 11/30/10; 35%/15%/40%/10% from 12/1/10 to 11/30/11; 33.25%/14.25%/42.00%/10.50% from 12/1/11 to 11/30/12; 32.38%/13.88%/43.00%/10.75% from 12/1/12 to 11/30/13; 31.50%/13.50%/44.00%/11.00% from 12/1/13 to 11/30/14; and %/13.125%/45.000%/11.250% from 12/1/14 to present. It is not possible to invest directly in an index. 2

3 John Hancock Retirement Living through 2015 Portfolio A: JLBAX R1: JLBDX R2: JLBKX R3: JLBFX R4: JLBGX R5: JLBHX R6: JLBJX Morningstar category: Target Date Lipper category: Mixed-Asset Target 2015 Funds Sleeve (JHAM) Active Bond Fund (Declaration/JHAM) 8.26 Sleeve (JHAM) 6.44 Total Return Fund (PIMCO) 6.27 Floating Rate Income Fund (WAMCO) 6.13 Strategic Income Opportunities Fund (JHAM) 5.19 Short Duration Credit Opportunities Fund (Stone Harbor) 4.47 Price) 4.32 Spectrum Income Fund (T. Rowe Price) 3.41 Real Return Bond Fund (PIMCO) 3.30 (Standard Life) 2.54 Core Bond Fund (Wells Capital) 2.37 U.S. Equity Fund (GMO) 1.84 Global Income Fund (Stone Harbor) 1.75 Global Bond Fund (PIMCO) 1.74 Quadrant) 1.69 Emerging Markets Debt Fund (JHAM) 1.64 Asia Pacific Total Return Bond Fund (JHAM) 1.45 Global Short Duration Credit Fund (JHAM) 1.43 Global Shareholder Yield Fund (Epoch) 1.38 Sleeve (JHAM) 1.17 Mid Cap Stock Fund (Wellington) 1.12 Natural Resources Fund (Jennison) 1.05 Equity Income Fund (T. Rowe Price) 1.02 Blue Chip Growth Fund (T. Rowe Price) 0.98 Global Equity Fund (JHAM) 0.95 Emerging Markets Fund (DFA) 0.93 Capital Appreciation Fund (Jennison) 0.90 Sleeve (JHAM) 0.90 Strategic Growth Fund (JHAM) 0.90 The portfolio was up in absolute terms, trailing its custom blended benchmark. An underweight allocation to emerging-market equities hurt results, as did an overweight allocation to bank loans. However, an overweight allocation to defensively oriented equity strategies provided a relative boost, as did an underweight allocation to international developed-market services were underrepresented. Individual holdings that hindered results included Floating Rate Income Fund (WAMCO), Blue Chip Growth Fund (T. Rowe Price), and Capital Appreciation Fund (Jennison). (Standard Life) also struggled during the quarter; long exposure to European and Japanese equity markets and to the U.S. dollar detracted from performance, as did short exposure to U.S. duration in this declining interest-rate environment. Holdings that fared better included Spectrum Income Fund (T. Rowe Price), Global Shareholder Yield Fund (Epoch), and Equity Income Fund (T. Rowe Price). Quadrant), which takes long and short foreign exchange positions, often demonstrating low correlations with the broader stock and bond markets, also had a strong quarter; short exposure to the British pound boosted results, as did long exposure to the Japanese yen. date Class R1 (without sales charge) /30/06 Class R6 (without sales charge) /30/06 Morningstar Target Date Average Blended benchmark Gross Net (what you pay) of globally issued, U.S. dollar-denominated high-yield bonds. The blended index reflects the portfolio s asset allocation under normal conditions and adjusts over time as follows: 49% Russell 3000 Index/21% MSCI ACWI ex-u.s. Index/24% Barclays U.S. Aggregate Bond Index/6% BofA Merrill Lynch U.S. High Yield Master II Index from the portfolio s inception to 11/30/07; 46.9%/20.1%/26.4%/6.6% from 12/1/07 to 11/30/08; 45.5%/19.5%/28.0%/7.0% from 12/1/08 to 11/30/09; 43.4%/18.6%/30.4%/7.6% from 12/1/09 to 11/30/10; 42%/18%/32%/8% from 12/1/10 to 11/30/11; 40.6%/17.4%/33.6%/8.4% from 12/1/11 to 11/30/12; 39.2%/16.8%/35.2%/8.8% from 12/1/12 to 11/30/13; 37.8%/16.2%/36.8%/9.2% from 12/1/13 to 11/30/14; and 6.4%/15.6%/38.4%/9.6% from 12/1/14 to present. It is not possible to invest directly in an index. 3

4 John Hancock Retirement Living through 2020 Portfolio A: JLDAX R1: JLDDX R2: JLDEX R3: JLDFX R4: JLDGX R5: JLDHX R6: JLDIX Morningstar category: Target Date Lipper category: Mixed-Asset Target 2020 Funds Sleeve (JHAM) Sleeve (JHAM) 7.91 Active Bond Fund (Declaration/JHAM) 5.42 Strategic Income Opportunities Fund (JHAM) 4.86 Floating Rate Income Fund (WAMCO) 4.71 Short Duration Credit Opportunities Fund (Stone Harbor) 4.19 Total Return Fund (PIMCO) 4.17 Price) 3.91 Spectrum Income Fund (T. Rowe Price) 3.18 Real Return Bond Fund (PIMCO) 2.84 (Standard Life) 2.42 Price) 1.66 Core Bond Fund (Wells Capital) 1.63 Global Income Fund (Stone Harbor) 1.62 Quadrant) 1.61 U.S. Equity Fund (GMO) 1.60 Financial Industries Fund (JHAM) 1.46 Sleeve (JHAM) 1.44 Mid Cap Stock Fund (Wellington) 1.42 Emerging Markets Debt Fund (JHAM) 1.41 Global Short Duration Credit Fund (JHAM) 1.31 Equity Income Fund (T. Rowe Price) 1.30 Blue Chip Growth Fund (T. Rowe Price) 1.26 Global Bond Fund (PIMCO) 1.22 Global Shareholder Yield Fund (Epoch) 1.22 Capital Appreciation Fund (Jennison) 1.16 Strategic Growth Fund (JHAM) 1.16 Emerging Markets Fund (DFA) 1.13 Templeton) 1.12 International Small Company Fund (DFA) 1.12 The portfolio was up in absolute terms, trailing its custom blended benchmark. An underweight allocation to emerging-market equities hurt results, as did an overweight allocation to bank loans. However, an overweight allocation to defensively oriented equity strategies provided a relative boost, as did an underweight allocation to international developed-market services were underrepresented. Individual holdings that hindered results included Floating Rate Income Fund (WAMCO), Blue Chip Growth Fund (T. Rowe Price), and Capital Appreciation Fund (Jennison). (Standard Life) also struggled during the quarter; long exposure to European and Japanese equity markets and to the U.S. dollar detracted from performance, as did short exposure to U.S. duration in this declining interest-rate environment. Holdings that fared better included Spectrum Income Fund (T. Rowe Price), Global Shareholder Yield Fund (Epoch), and Equity Income Fund (T. Rowe Price). Quadrant), which takes long and short foreign exchange positions, often demonstrating low correlations with the broader stock and bond markets, also had a strong quarter; short exposure to the British pound boosted results, as did long exposure to the Japanese yen. date Class R1 (without sales charge) /30/06 Class R6 (without sales charge) /30/06 Morningstar Target Date Average Blended benchmark Gross Net (what you pay) of globally issued, U.S. dollar-denominated high-yield bonds. The blended index reflects the portfolio s asset allocation under normal conditions and adjusts over time as follows: 56.7% Russell 3000 Index/24.3% MSCI ACWI ex-u.s. Index/15.2% Barclays U.S. Aggregate Bond Index/3.8% BofA Merrill Lynch U.S. High Yield Master II Index from the portfolio s inception to 11/30/07; 55.3%/23.7%/16.8%/4.2 % from 12/1/07 to 11/30/08; 53.9%/23.1%/18.4%/4.6% from 12/1/08 to 11/30/09; 51.8%/22.2%/20.8%/5.2% from 12/1/09 to 11/30/10; 50.4%/21.6%/22.4%/5.6% from 12/1/10 to 11/30/11; 49%/21%/24%/6% from 12/1/11 to 11/30/12; 46.9%/20.1%/26.4%/6.6% from 12/1/12 to 11/30/13; 45.5%/19.5%/28.0%/7.0% from 12/1/13 to 11/30/14; and 43.4%/18.6%/30.4%/7.6% from 12/1/14 to present. It is not possible to invest directly in an index. 4

5 John Hancock Retirement Living through 2025 Portfolio A: JLEAX R1: JLEDX R2: JLEEX R3: JLEFX R4: JLEGX R5: JLEHX R6: JLEIX Morningstar category: Target Date Lipper category: Mixed-Asset Target 2025 Funds Sleeve (JHAM) Sleeve (JHAM) 9.59 Price) 4.06 Strategic Income Opportunities Fund (JHAM) 3.44 Floating Rate Income Fund (WAMCO) 3.36 Active Bond Fund (Declaration/JHAM) 3.31 Short Duration Credit Opportunities Fund (Stone Harbor) 2.95 Total Return Fund (PIMCO) 2.57 Alpha Opportunities Fund (Wellington) 2.41 Real Return Bond Fund (PIMCO) 2.32 (Standard Life) 2.30 Spectrum Income Fund (T. Rowe Price) 2.27 Mid Cap Stock Fund (Wellington) 1.86 Price) 1.83 Sleeve (JHAM) 1.74 Equity Income Fund (T. Rowe Price) 1.73 Emerging Markets Fund (DFA) 1.72 U.S. Equity Fund (GMO) 1.68 Financial Industries Fund (JHAM) 1.67 Blue Chip Growth Fund (T. Rowe Price) 1.66 Capital Appreciation Fund (Jennison) 1.53 Quadrant) 1.53 Strategic Growth Fund (JHAM) 1.53 Templeton) 1.43 International Small Company Fund (DFA) 1.43 Fundamental Large Cap Value Fund (JHAM) 1.35 Global Shareholder Yield Fund (Epoch) 1.35 Sleeve (JHAM) 1.33 Mid Value Fund (T. Rowe Price) 1.29 Global Income Fund (Stone Harbor) 1.28 The portfolio was up in absolute terms, trailing its custom blended benchmark. An underweight allocation to emerging-market equities hurt results, as did overweight allocations to financials and healthcare stocks. However, an overweight allocation to defensively oriented equity strategies Japanese equity markets and to the U.S. dollar detracted from performance, as did short exposure to U.S. duration in this declining interest-rate environment. Holdings that fared better included Spectrum Income Fund (T. Rowe Price), Global Shareholder Yield Fund (Epoch), and Equity Income Fund (T. Rowe Price). Quadrant), which takes long and short foreign exchange positions, often demonstrating low correlations with the broader stock and bond markets, also had a strong quarter; short exposure to the British pound boosted results, as did long exposure to the Japanese yen. date Class R1 (without sales charge) /30/06 Class R6 (without sales charge) /30/06 Morningstar Target Date Average Blended benchmark Gross Net (what you pay) of globally issued, U.S. dollar-denominated high-yield bonds. The blended index reflects the portfolio s asset allocation under normal conditions and adjusts over time as follows: 62.3% Russell 3000 Index/26.7% MSCI ACWI ex-u.s. Index/8.8% Barclays U.S. Aggregate Bond Index/2.2% BofA Merrill Lynch U.S. High Yield Master II Index from the portfolio s inception to 11/30/07; 61.6%/26.4%/9.6%/2.4% from 12/1/07 to 11/30/08; 60.2%/25.8%/11.2%/2.8% from 12/1/08 to 11/30/09; 59.5%/25.5%/12.0%/3.0% from 12/1/09 to 11/30/10; 58.1%/24.9%/13.6%/3.4% from 12/1/10 to 11/30/11; 56.7%/24.3%/15.2%/3.8% from 12/1/11 to 11/30/12; 55.3%/23.7%/16.8%/4.2% from 12/1/12 to 11/30/13; 53.9%/23.1%/18.4%/4.6% from 12/1/13 to 11/30/14; and 51.8%/22.2%/20.8%/5.2% from 12/1/14 to present. It is not possible to invest directly in an index. 5

6 John Hancock Retirement Living through 2030 Portfolio A: JLFAX R1: JLFDX R2: JLFEX R3: JLFFX R4: JLFGX R5: JLFHX R6: JLFIX Morningstar category: Target Date Lipper category: Mixed-Asset Target 2030 Funds Sleeve (JHAM) Sleeve (JHAM) Alpha Opportunities Fund (Wellington) 4.13 Price) 3.47 Emerging Markets Fund (DFA) 2.40 Mid Cap Stock Fund (Wellington) 2.28 Price) 2.19 (Standard Life) 2.15 Strategic Income Opportunities Fund (JHAM) 2.14 Equity Income Fund (T. Rowe Price) 2.13 Blue Chip Growth Fund (T. Rowe Price) 2.03 Sleeve (JHAM) 2.03 Floating Rate Income Fund (WAMCO) 1.96 Financial Industries Fund (JHAM) 1.88 Capital Appreciation Fund (Jennison) 1.87 Strategic Growth Fund (JHAM) 1.87 Short Duration Credit Opportunities Fund (Stone Harbor) 1.82 Templeton) 1.77 International Small Company Fund (DFA) 1.77 Real Return Bond Fund (PIMCO) 1.76 Fundamental Large Cap Value Fund (JHAM) 1.64 Mid Value Fund (T. Rowe Price) 1.58 Active Bond Fund (Declaration/JHAM) 1.55 Sleeve (JHAM) 1.55 Quadrant) 1.44 Spectrum Income Fund (T. Rowe Price) 1.42 U.S. Equity Fund (GMO) 1.40 Total Return Fund (PIMCO) 1.27 Global Shareholder Yield Fund (Epoch) 1.22 International Value Fund (Franklin Templeton) 1.17 The portfolio was effectively flat for the quarter, trailing its custom blended benchmark. An underweight allocation to emerging-market equities hurt results, as did overweight allocations to financials and healthcare stocks. However, an overweight allocation to defensively oriented equity strategies Japanese equity markets and to the U.S. dollar detracted from performance, as did short exposure to U.S. duration in this declining interest-rate environment. Holdings that fared better included Global Shareholder Yield Fund (Epoch) and Equity Income Fund (T. Rowe Price). Quadrant), which takes long and short foreign exchange positions, often demonstrating low correlations with the broader stock and bond markets, also had a strong quarter; short exposure to the British pound boosted results, as did long exposure to the Japanese yen. date Class R1 (without sales charge) /30/06 Class R6 (without sales charge) /30/06 Morningstar Target Date Average Blended benchmark Gross Net (what you pay) of globally issued, U.S. dollar-denominated high-yield bonds. The blended index reflects the portfolio s asset allocation under normal conditions and adjusts over time as follows: 65.5% Russell 3000 Index/28.5% MSCI ACWI ex-u.s. Index/4.0% Barclays U.S. Aggregate Bond Index/1.0% BofA Merrill Lynch U.S. High Yield Master II Index from the portfolio s inception to 11/30/07; 65.8%/28.2%/4.8%/1.2% from 12/1/07 to 11/30/08; 65.1%/27.9%/5.6%/1.4% from 12/1/08 to 11/30/09; 64.4%/27.6%/6.4%/1.6% from 12/1/09 to 11/30/10; 63.7%/27.3%/7.2%/1.8% from 12/1/10 to 11/30/11; 62.3%/26.7%/8.8%/2.2% from 12/1/11 to 11/30/12; 61.6%/26.4%/9.6%/2.4% from 12/1/12 to 11/30/13; 60.2%/25.8%/11.2%/2.8% from 12/1/13 to 11/30/14; and 59.5%/25.5%/12.0%/3.0% from 12/1/14 to present. It is not possible to invest directly in an index. 6

7 John Hancock Retirement Living through 2035 Portfolio A: JLHAX R1: JLHDX R2: JLHEX R3: JLHFX R4: JLHGX R5: JLHHX R6: JLHIX Morningstar category: Target Date Lipper category: Mixed-Asset Target 2035 Funds Sleeve (JHAM) Sleeve (JHAM) Alpha Opportunities Fund (Wellington) 4.07 Price) 3.69 Emerging Markets Fund (DFA) 3.05 Mid Cap Stock Fund (Wellington) 2.59 Price) 2.38 Sleeve (JHAM) 2.25 Equity Income Fund (T. Rowe Price) 2.21 Blue Chip Growth Fund (T. Rowe Price) 2.11 Templeton) 2.09 International Small Company Fund (DFA) 2.09 Financial Industries Fund (JHAM) 2.06 Capital Appreciation Fund (Jennison) 1.93 Strategic Growth Fund (JHAM) 1.93 Mid Value Fund (T. Rowe Price) 1.80 Sleeve (JHAM) 1.73 Fundamental Large Cap Value Fund (JHAM) 1.70 (Standard Life) 1.61 International Value Fund (Franklin Templeton) 1.49 U.S. Equity Fund (GMO) 1.48 Emerging Markets Equity Fund (JHAM) 1.40 Global Shareholder Yield Fund (Epoch) 1.26 Natural Resources Fund (Jennison) 1.26 Global Equity Fund (JHAM) 1.11 Strategic Income Opportunities Fund (JHAM) 1.11 Real Return Bond Fund (PIMCO) 1.09 Quadrant) 1.07 Disciplined Value Fund (Boston Partners) 0.99 Short Duration Credit Opportunities Fund (Stone Harbor) 0.95 The portfolio was effectively flat for the quarter, trailing its custom blended benchmark. An underweight allocation to emerging-market equities hurt results, as did overweight allocations to financials and healthcare stocks. However, an overweight allocation to defensively oriented equity strategies s Japanese equity markets and to the U.S. dollar detracted from performance, as did short exposure to U.S. duration in this declining interest-rate environment. Holdings that fared better included Global Shareholder Yield Fund (Epoch) and Equity Income Fund (T. Rowe Price). Quadrant), which takes long and short foreign exchange positions, often demonstrating low correlations with the broader stock and bond markets, also had a strong quarter; short exposure to the British pound boosted results, as did long exposure to the Japanese yen. date Class R1 (without sales charge) /30/06 Class R6 (without sales charge) /30/06 Morningstar Target Date Average Blended benchmark Gross Net (what you pay) of globally issued, U.S. dollar-denominated high-yield bonds. The blended index reflects the portfolio s asset allocation under normal conditions and adjusts over time as follows: 68.6% Russell 3000 Index/29.4% MSCI ACWI ex-u.s. Index/1.6% Barclays U.S. Aggregate Bond Index/0.4% BofA Merrill Lynch U.S. High Yield Master II Index from the portfolio s inception to 11/30/07; 66.5%/28.5%/4.0%/1.0% from 12/1/07 to 11/30/08; 66.5%/28.5%/4.0%/1.0% from 12/1/08 to 11/30/09; 66.5%/28.5%/4.0%/1.0% from 12/1/09 to 11/30/10; 66.5%/28.5%/4.0%/1.0% from 12/1/10 to 11/30/11; 66.5%/28.5%/4.0%/1.0% from 12/1/11 to 11/30/12; 65.8%/28.2%/4.8%/1.2% from 12/1/12 to 11/30/13; 65.1%/27.9%/5.6%/1.4% from 12/1/13 to 11/30/14; and 64.4%/27.6%/6.4%/1.6% from 12/1/14 to present. It is not possible to invest directly in an index. 7

8 John Hancock Retirement Living through 2040 Portfolio A: JLIAX R1: JLIDX R2: JLIEX R3: JLIFX R4: JLIGX R5: JLIHX R6: JLIIX Morningstar category: Target Date Lipper category: Mixed-Asset Target 2040 Funds Sleeve (JHAM) Sleeve (JHAM) Alpha Opportunities Fund (Wellington) 4.13 Price) 3.68 Emerging Markets Fund (DFA) 3.16 Mid Cap Stock Fund (Wellington) 2.75 Price) 2.55 Sleeve (JHAM) 2.36 Equity Income Fund (T. Rowe Price) 2.32 International Small Company Fund (DFA) 2.22 Templeton) 2.20 Blue Chip Growth Fund (T. Rowe Price) 2.19 Financial Industries Fund (JHAM) 2.13 Capital Appreciation Fund (Jennison) 2.01 Strategic Growth Fund (JHAM) 2.01 Mid Value Fund (T. Rowe Price) 1.91 Sleeve (JHAM) 1.81 Fundamental Large Cap Value Fund (JHAM) 1.77 International Value Fund (Franklin Templeton) 1.59 U.S. Equity Fund (GMO) 1.55 (Standard Life) 1.54 Emerging Markets Equity Fund (JHAM) 1.43 Global Shareholder Yield Fund (Epoch) 1.31 Natural Resources Fund (Jennison) 1.26 Global Equity Fund (JHAM) 1.14 Disciplined Value Fund (Boston Partners) 1.03 Quadrant) 1.03 International Core Fund (GMO) 0.98 Fundamental Global Franchise Fund (JHAM) 0.94 Redwood Fund (Boston Partners) 0.91 The portfolio was effectively flat for the quarter, trailing its custom blended benchmark. An underweight allocation to emerging-market equities hurt results, as did overweight allocations to financials and healthcare stocks. However, an overweight allocation to defensively oriented equity strategies Japanese equity markets and to the U.S. dollar detracted from performance, as did short exposure to U.S. duration in this declining interest-rate environment. Holdings that fared better included Global Shareholder Yield Fund (Epoch) and Equity Income Fund (T. Rowe Price). Quadrant), which takes long and short foreign exchange positions, often demonstrating low correlations with the broader stock and bond markets, also had a strong quarter; short exposure to the British pound boosted results, as did long exposure to the Japanese yen. date Class R1 (without sales charge) /30/06 Class R6 (without sales charge) /30/06 Morningstar Target Date Average Blended benchmark Gross Net (what you pay) of globally issued, U.S. dollar-denominated high-yield bonds. The blended index reflects the portfolio s asset allocation under normal conditions and adjusts over time as follows: 70% Russell 3000 Index/30% MSCI ACWI ex-u.s. Index/0% Barclays U.S. Aggregate Bond Index/0% BofA Merrill Lynch U.S. High Yield Master II Index from the portfolio s inception to 11/30/07; 66.5%/28.5%/4.0%/1.0% from 12/1/07 to 11/30/08; 66.5%/28.5%/4.0%/1.0% from 12/1/08 to 11/30/09; 66.5%/28.5%/4.0%/1.0% from 12/1/09 to 11/30/10; 66.5%/28.5%/4.0%/1.0% from 12/1/10 to 11/30/11; 66.5%/28.5%/4.0%/1.0% from 12/1/11 to 11/30/12; 66.5%/28.5%/4.0%/1.0% from 12/1/12 to 11/30/13; 66.5%/28.5%/4.0%/1.0% from 12/1/13 to 11/30/14; and 66.5%/28.5%/4.0%/1.0% from 12/1/14 to present. It is not possible to invest directly in an index. 8

9 John Hancock Retirement Living through 2045 Portfolio A: JLJAX R1: JLJDX R2: JLJEX R3: JLJFX R4: JLJGX R5: JLJHX R6: JLJIX Morningstar category: Target Date Lipper category: Mixed-Asset Target 2045 Funds Sleeve (JHAM) Sleeve (JHAM) Alpha Opportunities Fund (Wellington) 4.12 Price) 3.65 Emerging Markets Fund (DFA) 3.16 Mid Cap Stock Fund (Wellington) 2.73 Price) 2.54 Sleeve (JHAM) 2.37 Equity Income Fund (T. Rowe Price) 2.32 International Small Company Fund (DFA) 2.21 Templeton) 2.20 Blue Chip Growth Fund (T. Rowe Price) 2.18 Financial Industries Fund (JHAM) 2.13 Capital Appreciation Fund (Jennison) 2.00 Strategic Growth Fund (JHAM) 2.00 Mid Value Fund (T. Rowe Price) 1.94 Sleeve (JHAM) 1.81 Fundamental Large Cap Value Fund (JHAM) 1.76 International Value Fund (Franklin Templeton) 1.61 U.S. Equity Fund (GMO) 1.55 (Standard Life) 1.53 Emerging Markets Equity Fund (JHAM) 1.42 Global Shareholder Yield Fund (Epoch) 1.30 Natural Resources Fund (Jennison) 1.27 Global Equity Fund (JHAM) 1.14 Disciplined Value Fund (Boston Partners) 1.03 Quadrant) 1.03 International Core Fund (GMO) 0.97 Fundamental Global Franchise Fund (JHAM) 0.93 Redwood Fund (Boston Partners) 0.91 The portfolio was effectively flat for the quarter, trailing its custom blended benchmark. An underweight allocation to emerging-market equities hurt results, as did overweight allocations to financials and healthcare stocks. However, an overweight allocation to defensively oriented equity strategies Japanese equity markets and to the U.S. dollar detracted from its performance, as did short exposure to U.S. duration in this declining interest-rate environment. Holdings that fared better included Global Shareholder Yield Fund (Epoch) and Equity Income Fund (T. Rowe Price). Quadrant), which takes long and short foreign exchange positions, often demonstrating low correlations with the broader stock and bond markets, also had a strong quarter; short exposure to the British pound boosted results, as did long exposure to the Japanese yen. date Class R1 (without sales charge) /30/06 Class R6 (without sales charge) /30/06 Morningstar Target Date Average Blended benchmark Gross Net (what you pay) of globally issued, U.S. dollar-denominated high-yield bonds. The blended index reflects the portfolio s asset allocation under normal conditions and adjusts over time as follows: 70% Russell 3000 Index/30% MSCI ACWI ex-u.s. Index/0% Barclays U.S. Aggregate Bond Index/0% BofA Merrill Lynch U.S. High Yield Master II Index from the portfolio s inception to 11/30/07; 66.5%/28.5%/4.0%/1.0% from 12/1/07 to 11/30/08; 66.5%/28.5%/4.0%/1.0% from 12/1/08 to 11/30/09; 66.5%/28.5%/4.0%/1.0% from 12/1/09 to 11/30/10; 66.5%/28.5%/4.0%/1.0% from 12/1/10 to 11/30/11; 66.5%/28.5%/4.0%/1.0% from 12/1/11 to 11/30/12; 66.5%/28.5%/4.0%/1.0% from 12/1/12 to 11/30/13; 66.5%/28.5%/4.0%/1.0% from 12/1/13 to 11/30/14; and 66.5%/28.5%/4.0%/1.0% from 12/1/14 to present. It is not possible to invest directly in an index. 9

10 John Hancock Retirement Living through 2050 Portfolio A: JLKAX R1: JLKDX R2: JLKEX R3: JLKFX R4: JLKGX R5: JLKHX R6: JLKRX Morningstar category: Target Date Lipper category: Mixed-Asset Target 2050 Funds Sleeve (JHAM) Sleeve (JHAM) Alpha Opportunities Fund (Wellington) 4.17 Price) 3.58 Emerging Markets Fund (DFA) 2.95 Mid Cap Stock Fund (Wellington) 2.76 Price) 2.67 Sleeve (JHAM) 2.38 Equity Income Fund (T. Rowe Price) 2.32 Templeton) 2.23 International Small Company Fund (DFA) 2.22 Blue Chip Growth Fund (T. Rowe Price) 2.21 Financial Industries Fund (JHAM) 2.14 Capital Appreciation Fund (Jennison) 2.03 Strategic Growth Fund (JHAM) 2.03 Mid Value Fund (T. Rowe Price) 1.92 Sleeve (JHAM) 1.82 Fundamental Large Cap Value Fund (JHAM) 1.78 International Value Fund (Franklin Templeton) 1.61 (Standard Life) 1.55 U.S. Equity Fund (GMO) 1.54 Global Shareholder Yield Fund (Epoch) 1.29 Emerging Markets Equity Fund (JHAM) 1.21 Global Equity Fund (JHAM) 1.15 Natural Resources Fund (Jennison) 1.07 Disciplined Value Fund (Boston Partners) 1.04 Quadrant) 1.04 International Core Fund (GMO) 0.99 Fundamental Global Franchise Fund (JHAM) 0.95 Redwood Fund (Boston Partners) 0.92 The portfolio was effectively flat for the quarter, trailing its custom blended benchmark. An underweight allocation to emerging-market equities hurt results, as did overweight allocations to financials and healthcare stocks. However, an overweight allocation to defensively oriented equity strategies Japanese equity markets and to the U.S. dollar detracted from performance, as did short exposure to U.S. duration in this declining interest-rate environment. Holdings that fared better included Global Shareholder Yield Fund (Epoch) and Equity Income Fund (T. Rowe Price). Quadrant), which takes long and short foreign exchange positions, often demonstrating low correlations with the broader stock and bond markets, also had a strong quarter; short exposure to the British pound boosted results, as did long exposure to the Japanese yen. date Class R1 (without sales charge) /1/12 Class R6 (without sales charge) /1/12 Morningstar Target Date Average Blended benchmark S&P 500 Index Barclays U.S. Aggregate Bond Index Gross Net (what you pay) /29/11 is the inception date for the oldest class of shares, Class 1 shares. Class R1 and R6 shares were first offered on 3/1/12; returns prior to this date are those of Class 1 which have been recalculated to apply the gross fees and expenses of Class R1 or R6 shares, respectively. of globally issued, U.S. dollar-denominated high-yield bonds. The blended index reflects the portfolio s asset allocation under normal conditions and adjusts over time as follows: 66.5% Russell 3000 Index/28.5% MSCI ACWI ex-u.s. Index/4.0% Barclays U.S. Aggregate Bond Index/1.0% BofA Merrill Lynch U.S. High Yield Master II Index from the portfolio s inception to 11/30/11; 66.5%/28.5%/4.0%/1.0% from 12/1/11 to 11/30/12; 66.5%/28.5%/4.0%/1.0 from 12/1/12 to 11/30/13; 66.5%/28.5%/4.0%/1.0% from 12/1/13 to 11/30/14; and 66.5%/28.5%/4.0%/1.0% from 12/1/14 to present. It is not possible to invest directly in an index. 10

11 John Hancock Retirement Living through 2055 Portfolio A: JLKLX R1: JLKMX R2: JLKNX R3: JLKPX R4: JLKQX R5: JLKSX R6: JLKTX Morningstar category: Target Date Lipper category: Mixed-Asset Target Funds Sleeve (JHAM) Sleeve (JHAM) Alpha Opportunities Fund (Wellington) 4.19 Price) 3.60 Emerging Markets Fund (DFA) 2.86 Mid Cap Stock Fund (Wellington) 2.77 Price) 2.55 Sleeve (JHAM) 2.39 Equity Income Fund (T. Rowe Price) 2.34 Templeton) 2.23 International Small Company Fund (DFA) 2.23 Blue Chip Growth Fund (T. Rowe Price) 2.22 Capital Appreciation Fund (Jennison) 2.04 Strategic Growth Fund (JHAM) 2.04 Financial Industries Fund (JHAM) 2.02 Mid Value Fund (T. Rowe Price) 1.92 Sleeve (JHAM) 1.83 Fundamental Large Cap Value Fund (JHAM) 1.79 International Value Fund (Franklin Templeton) 1.61 U.S. Equity Fund (GMO) 1.58 (Standard Life) 1.56 Global Shareholder Yield Fund (Epoch) 1.23 Emerging Markets Equity Fund (JHAM) 1.18 Global Equity Fund (JHAM) 1.16 Disciplined Value Fund (Boston Partners) 1.05 Quadrant) 1.05 Natural Resources Fund (Jennison) 1.04 International Core Fund (GMO) 1.00 Fundamental Global Franchise Fund (JHAM) 0.94 Redwood Fund (Boston Partners) 0.93 The portfolio was effectively flat for the quarter, trailing its custom blended benchmark. An underweight allocation to emerging-market equities hurt results, as did overweight allocations to financials and healthcare stocks. However, an overweight allocation to defensively oriented equity strategies Japanese equity markets and to the U.S. dollar detracted from performance, as did short exposure to U.S. duration in this declining interest-rate environment. Holdings that fared better included Global Shareholder Yield Fund (Epoch) and Equity Income Fund (T. Rowe Price). Quadrant), which takes long and short foreign exchange positions, often demonstrating low correlations with the broader stock and bond markets, also had a strong quarter; short exposure to the British pound boosted results, as did long exposure to the Japanese yen. Average annual total returns (%) date Class R1 (without sales charge) /26/14 Class R6 (without sales charge) /26/14 Morningstar Target Date Average Blended benchmark S&P 500 Index Barclays U.S. Aggregate Bond Index Gross Net (what you pay) The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. The Barclays U.S. Aggregate Bond Index tracks the performance of U.S. investment-grade bonds in of globally issued, U.S. dollar-denominated high-yield bonds. The blended index reflects the portfolio s asset allocation under normal conditions and adjusts over time as follows: 66.5% Russell 3000 Index/28.5% MSCI ACWI ex-u.s. Index/4.0% Barclays U.S. Aggregate Bond Index/1.0% BofA Merrill Lynch U.S. High Yield Master II Index from the portfolio s inception to 11/30/14; and 66.5%/28.5%/4.0%/1.0% from 12/1/14 to present. It is not possible to invest directly in an index. 11

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13 What you should know before investing The portfolios performance depends on the advisor s skill in determining asset class allocations, the mix of underlying s, and the performance of those underlying s. The portfolios are subject to the same risks as the underlying s and exchange-traded s in which they invest: Stocks and bonds can decline due to adverse issuer, market, regulatory, or economic developments; foreign investing, especially in emerging markets, has additional risks, such as currency and market volatility and political and social instability; the securities of small companies are subject to higher volatility than those of larger, more established companies; and high-yield bonds are subject to additional risks, such as increased risk of default. Liquidity the extent to which a security may be sold or a derivative position closed without negatively affecting its market value, if at all may be impaired by reduced trading volume, heightened volatility, rising interest rates, and other market conditions. Please see the portfolios prospectuses for additional risks. A portfolio s investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the portfolio. To obtain a prospectus, contact your financial professional, call John Hancock Investments at , or visit our website at jhinvestments.com. Please read the prospectus carefully before investing or sending money. Connect with John Hancock jhinvestmentsblog.com John Hancock Funds, LLC Member FINRA, SIPC 601 Congress Street Boston, MA jhinvestments.com Not FDIC insured. May lose value. no bank guarantee. not insured by any government agency. MF RLTCOMGD 4/16