BOSTON, Jan. 21, 2014 /PRNewswire/ -- John Hancock Investments today announced the launch of two innovative mutual funds targeting lower-volatility equity strategies designed to provide attractive risk-adjusted returns. John Hancock Seaport Fund employs a long/short, multi-sleeve equity strategy similar to a hedge fund-of-funds to pursue a more favorable risk/return profile than global equities. John Hancock Enduring Equity Fund invests in companies around the world with long-lived physical assets and competitive advantages that may result in low levels of earnings volatility and offer the potential for dividend income and inflation protection.
"We see a clear need among investors and financial advisors for strategies that have the ability to participate in the market's upward trend but with less volatility along the way," said Andrew G. Arnott, President and CEO of John Hancock Investments. "Both new funds offer the potential for attractive risk-adjusted returns while seeking to minimize risk."
John Hancock Investments selected portfolio teams at Wellington Management Company, LLP, to manage both funds, furthering John Hancock's commitment to bringing institutional-level investments to individual investors.
"The new funds are managed by the same Wellington Management portfolio managers who run alternative investments on behalf of institutional clients," said Leo M. Zerilli, Head of Investments for John Hancock Investments. "We believe the portfolio managers we have selected are among the best in the industry for what we are trying to accomplish with these two new strategies. We have a more than 20-year relationship with Wellington Management, and over the years we've done significant due diligence on the firm and their investment professionals."
John Hancock Seaport Fund (Class A: JSFBX) seeks capital appreciation by allocating assets to a number of investment strategies through which it will take both long and short positions. John Hancock Investments will allocate assets among several distinct Wellington portfolio teams, with an initial allocation of 35 percent to diversified equity, 25 percent to healthcare, 20 percent to financial services, and 20 to percent technology. This initial allocation is likely to change over time.
"Our long experience overseeing both asset-allocation portfolios and alternative strategies makes us ideally suited to manage the strategy allocations in the pursuit of risk-adjusted returns," said Zerilli.
The fund employs bottom-up stock picking and fundamental research alongside top-down views on the valuation of various sectors. The ability to short segments of the market—borrowing a security to sell at one price and later buying it back at a lower price—through exchange-traded pooled investment vehicles (e.g., ETFs) and derivatives, opens up a broad area of investment and risk management potential that historically has been beyond the reach of most equity mutual funds.
Said Arnott: "The fund employs an investment approach similar to that employed by hedge fund-of-funds and strives to achieve a better absolute and risk-adjusted return than the MSCI World Index over a full market cycle, but with less net equity exposure—roughly 50 percent to 80 percent of the Index, on average."
John Hancock Seaport Fund's four portfolio teams are led by Michael T. Carmen, CFA, CPA, and Steve C. Angeli, CFA (diversified equity); Nicholas C. Adams, Andrew R. Heiskell, Jennifer N. Berg, CFA, and Mark T. Lynch (financial services); Robert L. Deresiewcz, Jean M. Hynes, CFA, Ann C. Gallo, and Kirk J. Mayer, CFA (healthcare); and John F. Averill, CFA, and Bruce Glazer (technology).
Regarding the fund's management team, Arnott added, "We are pleased that our mutual fund shareholders now have access to Wellington Management's long/short expertise, which dates back to 1994 and now includes some $15 billion in assets." He noted that fund shareholders generally pay much lower minimum investments and fees than hedge fund investors in similar strategies, adding, "Shareholders will have all the benefits of daily liquidity and pricing and reporting transparency that comes with a mutual fund, along with the vigorous oversight provided by John Hancock Investments."
John Hancock Enduring Equity Fund (Class A: JEEBX) seeks total return from capital appreciation and income while aiming to outperform global equities over time, particularly during periods of flat or negative market performance. The fund's global strategy centers on companies with long-lived physical assets, predominantly in the utilities, energy, infrastructure, and transportation sectors. These companies tend to have advantaged competitive positions and exhibit lower levels of earnings volatility due to government regulation or long-term contractual commitments.
"Traditionally used as a hedge against inflation, these companies also have the potential to provide a source of dividend income that is less affected by rising interest rates, a key investor concern in today's market," says Zerilli.
John Hancock Enduring Equity Fund is managed by Wellington Management veteran, Tom Levering, whose low-volatility strategy was previously available only to high-net-worth and institutional clients.
Both funds were launched in December of 2013 and are available for sale in Classes A, I, and R6.
The Seaport Fund's strategies entail a high degree of risk. Leveraging, short positions, a non diversified portfolio focused in a few sectors, and the use of hedging and derivatives greatly amplify the risk of potential loss and can increase costs. A non-diversified portfolio holds a limited number of securities making it vulnerable to events affecting a single issuer. The stock prices of midsized and small companies can change more frequently and dramatically than those of large companies. 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 or unwilling to make principal or interest payments. Investments in higher-yielding, lower-rated securities include a higher risk of default. Exchange-traded funds reflect the risks inherent in their underlying securities, including liquidity risk. The use of hedging and derivatives could produce disproportionate gains or losses and may increase costs. Please see the fund's prospectus for additional risks.
While the Enduring Equity Fund is not managed to track a benchmark, its multiple strategies and focus on investments in certain sectors may lead it to lag broad market rallies. The Fund is non-diversified and holds a limited number of securities making it vulnerable to events affecting a single issuer. Master limited partnerships and other energy companies are susceptible to changes in energy and commodity prices. Natural resources investments are subject to political and regulatory developments, and the uncertainty of exploration. The stock prices of midsized and small companies can change more frequently and dramatically than those of large companies. 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 or unwilling to make principal or interest payments. Investments in higher-yielding, lower-rated securities include a higher risk of default. Foreign investing, especially in emerging markets, has additional risks, such as currency and market volatility, and political and social instability. The use of hedging and derivatives could produce disproportionate gains or losses and may increase costs. Illiquid securities may be difficult to sell at a price approximating their value. REITs may decline in value, just like direct ownership of real estate. Please see the fund's prospectus for additional risks.
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. Please read the prospectus carefully before investing or sending money. These products are available for sale only within the United States.
About John Hancock Investments
John Hancock Investments provides asset management services to individuals and institutions through a unique manager-of-managers approach. We combine unbiased asset management with vigorous investment oversight to offer investors a deeper level of diversification and strong risk-adjusted returns across asset classes. A wealth management business of John Hancock Financial, we managed more than $100 billion in assets as of September 30, 2013, across mutual funds, college savings plans, and retirement plans.
About John Hancock Financial and Manulife Financial
John Hancock Financial is a division of Manulife Financial, a leading Canada-based financial services group with principal operations in Asia, Canada, and the United States. Operating as Manulife Financial in Canada and Asia, and primarily as John Hancock in the United States, the Company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents, and distribution partners. Funds under management by Manulife Financial and its subsidiaries were C$575 billion (US$559 billion) as of September 30, 2013. Manulife Financial Corporation trades as MFC on the TSX, NYSE, and PSE, and under 945 on the SEHK. Manulife Financial can be found on the Internet 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, fixed products, 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.
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