UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21777
John Hancock Funds III
(Exact name of registrant as specified in charter)
601 Congress Street, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
Salvatore Schiavone
Treasurer
601 Congress Street
Boston, Massachusetts 02210
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-663-4497
Date of fiscal year end: | February 29 |
Date of reporting period: | February 29, 2016 |
ITEM 1. REPORT TO SHAREHOLDERS
John Hancock
International Core Fund
Annual report 2/29/16
A message to shareholders
Dear shareholder,
The period covered by this report was a challenging one for investors in global equities. Oil prices hit multi-year lows before rebounding in February. Concerns about slowing global growth added to negative investor psychology, and stock prices fell around the world. The investment landscape improved after the close of the period as stocks and other so-called risk assets regained much of the ground lost earlier in the year.
Despite the recent increase in volatility, the economic picture offers reasons for optimism. In December, the U.S. Federal Reserve raised short-term interest rates for the first time in nine years on evidence that the persistent strength in the labor markets warranted a somewhat less accommodative stance. Central banks outside of the United States continued to stimulate growth and to signal that they will take action to support economies and markets.
Volatile market environments are naturally unsettling. At John Hancock Investments, portfolio risk management is a critical part of our role as an asset manager, and our dedicated risk team is focused on these issues every day. We continually strive for new ways to analyze potential risks and have liquidity tools in place, such as a credit facility and an interfund lending program. However, your best resource in times like these is your financial advisor, who can ensure your portfolio is sufficiently diversified to meet your long-term objectives and to withstand the inevitable bumps along the way.
On behalf of everyone at John Hancock Investments, I'd like to take this opportunity to thank you for the continued trust you've placed in us.
Sincerely,
Andrew G. Arnott
President and Chief Executive Officer
John Hancock Investments
This commentary reflects the CEO's views as of February 29, 2016. They are subject to change at any time. All investments entail risks, including the possible loss of principal. For more up-to-date information, you can visit our website at jhinvestments.com.
John Hancock
International Core Fund
INVESTMENT OBJECTIVE
The fund seeks high total return.
AVERAGE ANNUAL TOTAL RETURNS AS OF 2/29/16 (%)
The MSCI EAFE Index (gross of foreign withholding tax on dividends) (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Figures from Morningstar, Inc. include reinvested distributions and do not take into account sales charges. Actual load-adjusted performance is lower.
1On 6-9-06, through a reorganization, the fund acquired all of the assets of the GMO International Disciplined Equity Fund (the predecessor fund). The predecessor fund offered its Class III shares, inception date 9-16-05, in exchange for Class A shares, which were first offered on 6-12-06. The predecessor fund's Class III shares' returns have been recalculated to reflect the gross fees and expenses of Class A shares.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. 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.
PERFORMANCE HIGHLIGHTS OVER THE LAST TWELVE MONTHS
Fund and benchmark declined amid a challenging economic environment
Most developed-market stocks outside the United States, as represented by the fund's benchmark, the MSCI EAFE Index, declined as a slowdown in China's GDP growth and falling oil prices fueled concerns about the outlook for the global economy.
European holdings and Valeant Pharmaceuticals position detracted
The fund posted a negative return and trailed the benchmark, and an overweight in European value stocks and a position in Valeant Pharmaceuticals International, Inc. weighed on relative results.
Positive impact from positioning in Australia and Japan and in the telecommunication services sector
The fund's positioning in Australia and Japan and stock selection in the telecommunication services sector added relative value.
SECTOR COMPOSITION AS OF 2/29/16 (%)
A note about risks
Foreign investing has additional risks, such as currency and market volatility and political and social instability. Hedging, derivatives, and other strategic transactions may increase a fund's volatility and could produce disproportionate losses, potentially more than the fund's principal investment. 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. Large company stocks could fall out of favor. The stock prices of midsize and small companies can change more frequently and dramatically than those of large companies. The value of a company's equity securities is subject to changes in the company's financial condition and overall market and economic conditions. Please see the fund's prospectuses for additional risks.
![davidcowan.jpg](https://capedge.com/proxy/N-CSR/0001145443-16-001766/davidcowan.jpg)
David Cowan, Ph.D.
Portfolio Manager
GMO
What factors drove the generally negative return for international stocks during the 12-month period?
The performance of the fund's benchmark, the MSCI EAFE Index, was negative overall; however, in the early months of the period, most stocks in developed markets outside the United States rose. Accommodative monetary policies were a key catalyst, as the European Central Bank, the Bank of Japan, and the People's Bank of China expanded their economic stimulus initiatives. Signs of a modest economic rebound across much of Europe also lifted investor sentiment, and economic data in the United States remained generally strong, providing support for global equities.
However, the market's momentum faded over the late spring and summer of 2015 as worries about a slowdown in China's economic growth dominated the market narrative, fueling concerns about ripple effects around the world among China's trading partners. These fears were amplified when China devalued its currency, triggering concerns about disinflationary trends against a backdrop of weakening global growth. Selling reached a peak after Chinese manufacturing data fell to the weakest level in six years, but stocks rebounded in the fall as conditions in China and other countries stabilized. In the United States, strong employment figures led the U.S. Federal Reserve to raise interest rates for the first time since 2006. However, the market recovery was relatively brief, as stocks took another steep dive entering 2016 in response to fresh signs of slower growth in China and additional weakening in crude oil prices. Oil fell below $30 a barrel at one point in January, the lowest level in nearly 13 years, amid a global supply glut and concerns of weakening demand. Further expansion of accommodative monetary policies in Europe and Japan, including Japan's introduction of negative interest rates, helped to offset these headwinds somewhat in early 2016. However, market volatility persisted, and the benchmark's overall return for the period remained negative. Among the countries in the fund's benchmark, all but two posted negative returns.
How did this environment affect the portfolio team's management of the fund?
The market environment generally does not cause us to alter our approach. With its relatively balanced reliance on valuation-based stock selection techniques combined with our top-down assessment, we maintained an approach that we believe makes the fund flexible and responsive to
The fund underperformed relative to its benchmark during the period. What factors had the most significant negative impacts?
The fund's overweight in European value stocks—including U.K. equities—relative to the benchmark weighed on performance, as these equities underperformed their growth-oriented counterparts in the European equity market. Within Germany, our stock selection was a key detractor. Another significant negative was the fund's overweight in energy, one of the weakest-performing sectors during the period. The slump in oil prices reduced profitability for many energy companies, and two particular energy holdings that had large negative impacts on the fund's relative performance were integrated energy firms whose shares declined sharply, Royal Dutch Shell PLC (Netherlands) and BP PLC (U.K.).
Which equity position had the most significant negative impact on relative performance?
By a wide margin, the fund's position in Valeant Pharmaceuticals International, Inc. (Canada) was the largest individual stock detractor. Shares of Valeant began to drop sharply in the fall of 2015 amid allegations of excessive price increases by the company and questionable business and accounting practices; resulting regulatory investigations weighed further on the stock. The stock's price tumbled nearly 67% during the 12-month period, during which we reduced the fund's
TOP 10 HOLDINGS AS OF 2/29/16 (%)
Total SA | 3.1 |
AstraZeneca PLC | 2.6 |
Daimler AG | 2.4 |
Allianz SE | 2.2 |
KDDI Corp. | 2.2 |
AXA SA | 2.0 |
Swiss Re AG | 2.0 |
Nippon Telegraph & Telephone Corp. | 2.0 |
BASF SE | 1.8 |
Sumitomo Mitsui Financial Group, Inc. | 1.7 |
TOTAL | 22.0 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
TOP 10 COUNTRIES AS OF 2/29/16 (%)
Japan | 24.3 |
United Kingdom | 15.0 |
Germany | 11.3 |
France | 10.0 |
Hong Kong | 4.0 |
Switzerland | 4.0 |
Canada | 3.6 |
Australia | 3.5 |
Italy | 2.6 |
Netherlands | 2.3 |
TOTAL | 80.6 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
What factors had positive impacts on the fund's relative performance?
At the country level, the fund's underweight in Australian equities contributed to relative results, as the Australian equity market underperformed. The slump in commodity prices weighed on Australia's prominent commodities producers and on its economy more broadly. In Japan, our stock selection had a positive impact.
At the sector level, the fund's overweight in telecommunication services and our stock selection within the sector significantly aided results.
Among the individual positions that significantly contributed were overweights in three Japanese telecommunication services companies: Nippon Telegraph & Telephone Corp., NTT DOCOMO, Inc., and KDDI Corp.
How was the fund positioned at the end of the period?
As has been the case for several years, we continue to favor European value stocks in the international market, owing to valuations that we find attractive.
At the regional level, the fund was slightly overweight in Japan, its largest country exposure. It was also significantly overweight in France, Germany, and Italy, among others, and underweight in Australia and Switzerland.
At the sector level, the fund was overweight in consumer discretionary, telecommunication services, and energy. It was underweight in financials, consumer staples, and information technology.
Were there any substantive changes in the fund's operations?
Effective September 1, 2015, Neil Constable, Ph.D., and Chris Fortson were named portfolio managers of the fund, and Thomas R. Hancock, Ph.D., no longer serves as a portfolio manager of the fund. Ben Inker, CFA, Sam Wilderman, CFA, and I continue to serve as portfolio managers of the fund.
MANAGED BY
![]() | David Cowan, Ph.D. On the fund since 2009 Investing since 2004 |
![]() | Ben Inker, CFA On the fund since 2014 Investing since 1992 |
![]() | Sam Wilderman, CFA On the fund since 2014 Investing since 1996 |
![]() | Neil Constable, Ph.D. On the fund since 2015 Investing since 2003 |
![]() | Chris Fortson On the fund since 2015 Investing since 2006 |
TOTAL RETURNS FOR THE PERIOD ENDED FEBRUARY 29, 2016
Average annual total returns (%) with maximum sales charge | Cumulative total returns (%) with maximum sales charge | |||||||||||||||||||||||||
1-year | 5-year | 10-year | Since inception | 5-year | 10-year | Since inception | ||||||||||||||||||||
Class A | -23.32 | -1.59 | -0.01 | 1 | — | -7.68 | -0.07 | 1 | — | |||||||||||||||||
Class B2 | -23.89 | -1.69 | -0.23 | — | -8.19 | -2.26 | — | |||||||||||||||||||
Class C2 | -20.68 | -1.33 | -0.22 | — | -6.46 | -2.21 | — | |||||||||||||||||||
Class I2,3 | -19.03 | -0.20 | 0.94 | — | -1.01 | 9.77 | — | |||||||||||||||||||
Class R12,3 | -19.62 | -0.94 | 0.22 | — | -4.62 | 2.17 | — | |||||||||||||||||||
Class R22,3 | -19.41 | -0.94 | -0.30 | — | -4.60 | -2.92 | — | |||||||||||||||||||
Class R33 | -19.54 | -0.84 | — | 3.98 | 4 | -4.13 | — | 30.26 | 4 | |||||||||||||||||
Class R43 | -19.21 | -0.48 | — | 4.34 | 4 | -2.36 | — | 33.37 | 4 | |||||||||||||||||
Class R53 | -19.03 | -0.25 | — | 4.60 | 4 | -1.23 | — | 35.65 | 4 | |||||||||||||||||
Class R62,3 | -18.94 | -0.12 | 1.07 | — | -0.58 | 11.24 | — | |||||||||||||||||||
Class 13 | -18.98 | -0.12 | — | -0.08 | 5 | -0.60 | — | -0.70 | 5 | |||||||||||||||||
Class NAV3 | -18.96 | -0.08 | — | 0.33 | 6 | -0.40 | — | 3.22 | 6 | |||||||||||||||||
Index† | -14.80 | 1.01 | 1.95 | — | 5.15 | 21.35 | — |
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, Class R6, Class 1, and Class NAV shares.
The expense ratios of the fund, both net (including any fee waivers and/or expense limitations) and gross (excluding any fee waivers and/or expense limitations), are set forth according to the most recent publicly available prospectuses for the fund and may differ from those disclosed in the Financial highlights tables in this report. Had the 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 | Class 1 | Class NAV | |
Gross (%) | 1.40 | 2.10 | 2.10 | 1.08 | 1.74 | 1.49 | 1.64 | 1.34 | 1.04 | 0.99 | 1.02 | 0.97 |
Net (%) | 1.38 | 2.10 | 2.10 | 1.08 | 1.74 | 1.49 | 1.64 | 1.24 | 1.04 | 0.97 | 1.02 | 0.97 |
Please refer to the most recent prospectus and annual or semiannual report for more information on expenses and any expense limitation arrangements for each class.
The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility and other factors, the fund's current performance may be higher or lower than the performance shown. For current to the most recent month-end performance data, please call 800-225-5291 or visit the fund's website at jhinvestments.com.
The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The fund's performance results reflect any applicable fee waivers or expense reductions, without which the expenses would increase and results would have been less favorable.
† | Index is the MSCI EAFE Index. |
See the following page for footnotes.
This chart and table show what happened to a hypothetical $10,000 investment in John Hancock International Core Fund for the share classes and periods indicated, assuming all distributions were reinvested. For comparison, we've shown the same investment in the MSCI EAFE Index.
Start date | With maximum sales charge ($) | Without sales charge ($) | Index ($) | |
Class B2,7 | 2-28-06 | 9,774 | 9,774 | 12,135 |
Class C2,7 | 2-28-06 | 9,779 | 9,779 | 12,135 |
Class I2,3 | 2-28-06 | 10,977 | 10,977 | 12,135 |
Class R12,3 | 2-28-06 | 10,217 | 10,217 | 12,135 |
Class R22,3 | 2-28-06 | 9,708 | 9,708 | 12,135 |
Class R33 | 5-22-09 | 13,026 | 13,026 | 15,052 |
Class R43 | 5-22-09 | 13,337 | 13,337 | 15,052 |
Class R53 | 5-22-09 | 13,565 | 13,565 | 15,052 |
Class R62,3 | 2-28-06 | 11,124 | 11,124 | 12,135 |
Class 13 | 11-6-06 | 9,930 | 9,930 | 10,789 |
Class NAV3 | 8-29-06 | 10,322 | 10,322 | 11,332 |
The MSCI EAFE Index (gross of foreign withholding tax on dividends) (Europe, Australasia, Far East) is a free float-adjusted market capitalization index that is designed to measure developed market equity performance, excluding the U.S. and Canada.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Footnotes related to performance pages
1 | On 6-9-06, through a reorganization, the fund acquired all of the assets of the GMO International Disciplined Equity Fund (the predecessor fund). The predecessor fund offered its Class III shares, inception date 9-16-05, in exchange for Class A shares, which were first offered on 6-12-06. The predecessor fund's Class III shares' returns have been recalculated to reflect the gross fees and expenses of Class A shares. |
2 | Class B, Class C, Class I, and Class R1 shares were first offered on 6-12-06; Class R6 shares were first offered on 9-1-11; Class R2 shares were first offered on 3-1-12. Returns prior to these dates are those of Class A shares that have been recalculated to apply the gross fees and expenses of Class B, Class C, Class I, Class R1, Class R6, and Class R2 shares, as applicable. |
3 | For certain types of investors, as described in the fund's prospectuses. |
4 | From 5-22-09. |
5 | From 11-6-06. |
6 | From 8-29-06. |
7 | The contingent deferred sales charge is not applicable. |
These examples are intended to help you understand your ongoing operating expenses of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds.
Understanding fund expenses
As a shareholder of the fund, you incur two types of costs:
• | Transaction costs, which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc. |
• | Ongoing operating expenses, including management fees, distribution and service fees (if applicable), and other fund expenses. |
We are presenting only your ongoing operating expenses here.
Actual expenses/actual returns
This example is intended to provide information about the fund's actual ongoing operating expenses, and is based on the fund's actual return. It assumes an account value of $1,000.00 on September 1, 2015, with the same investment held until February 29, 2016.
Beginning Account value on 9-1-2015 | Ending value on 2-29-2016 | Expenses paid during period ended 2-29-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $872.40 | $6.42 | 1.38% |
Class B | 1,000.00 | 869.00 | 9.67 | 2.08% |
Class C | 1,000.00 | 869.40 | 9.67 | 2.08% |
Class I | 1,000.00 | 873.60 | 4.98 | 1.07% |
Class R1 | 1,000.00 | 870.80 | 8.05 | 1.73% |
Class R2 | 1,000.00 | 872.10 | 10.75 | 2.31% |
Class R3 | 1,000.00 | 871.20 | 7.63 | 1.64% |
Class R4 | 1,000.00 | 872.90 | 5.87 | 1.26% |
Class R5 | 1,000.00 | 874.00 | 4.75 | 1.02% |
Class R6 | 1,000.00 | 874.20 | 4.57 | 0.98% |
Class 1 | 1,000.00 | 874.10 | 4.71 | 1.01% |
Class NAV | 1,000.00 | 874.20 | 4.47 | 0.96% |
Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2016, by $1,000.00, then multiply it by the "expenses paid" for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:
Hypothetical example for comparison purposes
This table allows you to compare the fund's ongoing operating expenses with those of any other fund. It provides an example of the fund's hypothetical account values and hypothetical expenses based on each class's actual expense ratio and an assumed 5% annualized return before expenses (which is not the fund's actual return). It assumes an account value of $1,000.00 on September 1, 2015, with the same investment held until February 29, 2016. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses. Please remember that these hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Beginning Account value on 9-1-2015 | Ending value on 2-29-2016 | Expenses paid during period ended 2-29-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $1,018.00 | $6.92 | 1.38% |
Class B | 1,000.00 | 1,014.50 | 10.42 | 2.08% |
Class C | 1,000.00 | 1,014.50 | 10.42 | 2.08% |
Class I | 1,000.00 | 1,019.50 | 5.37 | 1.07% |
Class R1 | 1,000.00 | 1,016.30 | 8.67 | 1.73% |
Class R2 | 1,000.00 | 1,013.40 | 11.56 | 2.31% |
Class R3 | 1,000.00 | 1,016.70 | 8.22 | 1.64% |
Class R4 | 1,000.00 | 1,018.60 | 6.32 | 1.26% |
Class R5 | 1,000.00 | 1,019.80 | 5.12 | 1.02% |
Class R6 | 1,000.00 | 1,020.00 | 4.92 | 0.98% |
Class 1 | 1,000.00 | 1,019.80 | 5.07 | 1.01% |
Class NAV | 1,000.00 | 1,010.05 | 4.82 | 0.96% |
Remember, these examples do not include any transaction costs, therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectuses for details regarding transaction costs.
1 | Expenses are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Fund's investments
As of 2-29-16 | ||||||||||||||||||||||||||
Shares | Value | |||||||||||||||||||||||||
Common stocks 92.3% | $1,492,103,100 | |||||||||||||||||||||||||
(Cost $1,660,880,817) | ||||||||||||||||||||||||||
Australia 3.5% | 56,236,548 | |||||||||||||||||||||||||
Abacus Property Group | 126,328 | 260,853 | ||||||||||||||||||||||||
Adelaide Brighton, Ltd. | 441,097 | 1,554,376 | ||||||||||||||||||||||||
ASX, Ltd. | 39,039 | 1,168,295 | ||||||||||||||||||||||||
Australia & New Zealand Banking Group, Ltd. | 40,620 | 648,024 | ||||||||||||||||||||||||
Bendigo & Adelaide Bank, Ltd. | 25,593 | 155,880 | ||||||||||||||||||||||||
BT Investment Management, Ltd. | 16,278 | 105,808 | ||||||||||||||||||||||||
BWP Trust | 109,334 | 252,244 | ||||||||||||||||||||||||
Challenger, Ltd. | 25,760 | 137,794 | ||||||||||||||||||||||||
Charter Hall Group | 17,949 | 56,320 | ||||||||||||||||||||||||
Charter Hall Retail REIT | 78,825 | 241,889 | ||||||||||||||||||||||||
CIMIC Group, Ltd. | 36,628 | 822,536 | ||||||||||||||||||||||||
Cromwell Property Group | 454,062 | 328,466 | ||||||||||||||||||||||||
Dexus Property Group | 219,447 | 1,175,960 | ||||||||||||||||||||||||
Downer EDI, Ltd. | 604,249 | 1,430,813 | ||||||||||||||||||||||||
Fairfax Media, Ltd. | 2,094,909 | 1,147,654 | ||||||||||||||||||||||||
Genworth Mortgage Insurance Australia, Ltd. | 40,924 | 63,195 | ||||||||||||||||||||||||
Goodman Group | 381,274 | 1,759,169 | ||||||||||||||||||||||||
Investa Office Fund | 388,961 | 1,098,862 | ||||||||||||||||||||||||
IOOF Holdings, Ltd. (L) | 80,691 | 479,548 | ||||||||||||||||||||||||
Lend Lease Group | 153,264 | 1,420,735 | ||||||||||||||||||||||||
Macquarie Group, Ltd. | 73,828 | 3,372,833 | ||||||||||||||||||||||||
Mirvac Group | 919,748 | 1,197,276 | ||||||||||||||||||||||||
Nine Entertainment Company Holdings, Ltd. | 43,928 | 46,725 | ||||||||||||||||||||||||
OZ Minerals, Ltd. | 508,348 | 1,821,893 | ||||||||||||||||||||||||
Perpetual, Ltd. | 6,458 | 190,448 | ||||||||||||||||||||||||
Premier Investments, Ltd. | 4,208 | 39,458 | ||||||||||||||||||||||||
Scentre Group | 2,770,790 | 8,614,885 | ||||||||||||||||||||||||
Seven West Media, Ltd. | 96,764 | 67,782 | ||||||||||||||||||||||||
Shopping Centres Australasia Property Group | 22,793 | 36,830 | ||||||||||||||||||||||||
Sonic Healthcare, Ltd. | 43,597 | 572,759 | ||||||||||||||||||||||||
South32, Ltd. (I) | 445,790 | 396,671 | ||||||||||||||||||||||||
Stockland | 720,426 | 2,138,052 | ||||||||||||||||||||||||
Suncorp Group, Ltd. | 206,696 | 1,647,251 | ||||||||||||||||||||||||
Telstra Corp., Ltd. | 2,916,558 | 10,902,412 | ||||||||||||||||||||||||
The GPT Group | 478,680 | 1,676,309 | ||||||||||||||||||||||||
The Star Entertainment Group, Ltd. | 415,956 | 1,543,220 | ||||||||||||||||||||||||
Thorn Group, Ltd. | 203,265 | 258,050 | ||||||||||||||||||||||||
Vicinity Centres | 1,073,378 | 2,376,417 |
Shares | Value | |||||||||||||||||||||||||
Australia (continued) | ||||||||||||||||||||||||||
Westfield Corp. (I) | 356,419 | $2,534,870 | ||||||||||||||||||||||||
Woodside Petroleum, Ltd. | 108,153 | 1,943,471 | ||||||||||||||||||||||||
WorleyParsons, Ltd. (L) | 185,074 | 550,515 | ||||||||||||||||||||||||
Austria 0.4% | 6,989,337 | |||||||||||||||||||||||||
Oesterreichische Post AG | 31,263 | 1,122,044 | ||||||||||||||||||||||||
OMV AG | 137,880 | 3,618,181 | ||||||||||||||||||||||||
UNIQA Insurance Group AG | 2,379 | 14,411 | ||||||||||||||||||||||||
voestalpine AG | 77,409 | 2,234,701 | ||||||||||||||||||||||||
Belgium 1.1% | 18,229,004 | |||||||||||||||||||||||||
Ageas | 75,534 | 2,786,905 | ||||||||||||||||||||||||
AGFA-Gevaert NV (I) | 188,440 | 694,574 | ||||||||||||||||||||||||
bpost SA | 112,950 | 2,802,920 | ||||||||||||||||||||||||
D'Ieteren SA | 14,958 | 551,061 | ||||||||||||||||||||||||
Delhaize Group | 81,259 | 8,217,416 | ||||||||||||||||||||||||
Mobistar SA (I) | 10,836 | 225,345 | ||||||||||||||||||||||||
Proximus | 48,712 | 1,532,844 | ||||||||||||||||||||||||
Umicore SA | 31,429 | 1,417,939 | ||||||||||||||||||||||||
Canada 4.9% | 78,589,184 | |||||||||||||||||||||||||
Air Canada (I) | 343,900 | 1,835,150 | ||||||||||||||||||||||||
Bank of Montreal | 61,500 | 3,393,182 | ||||||||||||||||||||||||
BCE, Inc. | 99,200 | 4,284,736 | ||||||||||||||||||||||||
Canadian Imperial Bank of Commerce | 98,700 | 6,561,763 | ||||||||||||||||||||||||
Canadian Tire Corp., Ltd., Class A | 17,800 | 1,730,534 | ||||||||||||||||||||||||
Celestica, Inc. (I) | 25,100 | 258,421 | ||||||||||||||||||||||||
CI Financial Corp. | 85,500 | 1,893,891 | ||||||||||||||||||||||||
Cogeco Communications, Inc. | 2,000 | 93,762 | ||||||||||||||||||||||||
Corus Entertainment, Inc., B Shares | 7,000 | 55,669 | ||||||||||||||||||||||||
Industrial Alliance Insurance & Financial Services, Inc. | 17,000 | 456,977 | ||||||||||||||||||||||||
Laurentian Bank of Canada | 7,200 | 242,927 | ||||||||||||||||||||||||
Linamar Corp. | 17,100 | 746,940 | ||||||||||||||||||||||||
Magna International, Inc. | 150,000 | 5,820,399 | ||||||||||||||||||||||||
Metro, Inc. | 314,900 | 10,063,766 | ||||||||||||||||||||||||
Power Corp. of Canada | 69,300 | 1,505,854 | ||||||||||||||||||||||||
RONA, Inc. | 4,500 | 78,426 | ||||||||||||||||||||||||
Royal Bank of Canada | 104,000 | 5,309,150 | ||||||||||||||||||||||||
Sun Life Financial, Inc. | 146,800 | 4,376,875 | ||||||||||||||||||||||||
Suncor Energy, Inc. (L) | 323,200 | 7,902,037 | ||||||||||||||||||||||||
Toromont Industries, Ltd. | 14,200 | 333,642 | ||||||||||||||||||||||||
Transcontinental, Inc., Class A | 112,400 | 1,595,033 | ||||||||||||||||||||||||
Valeant Pharmaceuticals International, Inc. (I) | 304,712 | 20,050,050 |
Shares | Value | |||||||||||||||||||||||||
China 0.1% | $1,725,893 | |||||||||||||||||||||||||
Yangzijiang Shipbuilding Holdings, Ltd. | 2,683,500 | 1,725,893 | ||||||||||||||||||||||||
Colombia 0.0% | 222,060 | |||||||||||||||||||||||||
Pacific Exploration and Production Corp. (I)(L) | 225,900 | 222,060 | ||||||||||||||||||||||||
Denmark 1.2% | 18,988,994 | |||||||||||||||||||||||||
AP Moeller - Maersk A/S, Class B | 2,918 | 3,834,847 | ||||||||||||||||||||||||
Carlsberg A/S, B Shares | 49,195 | 4,242,354 | ||||||||||||||||||||||||
Novo Nordisk A/S, B Shares | 171,379 | 8,823,391 | ||||||||||||||||||||||||
Pandora A/S | 12,531 | 1,581,888 | ||||||||||||||||||||||||
Sydbank A/S | 2,945 | 80,081 | ||||||||||||||||||||||||
TDC A/S | 100,507 | 426,433 | ||||||||||||||||||||||||
Faroe Islands 0.1% | 1,779,105 | |||||||||||||||||||||||||
Bakkafrost P/F | 49,795 | 1,779,105 | ||||||||||||||||||||||||
Finland 1.1% | 18,126,191 | |||||||||||||||||||||||||
Fortum OYJ | 163,050 | 2,160,424 | ||||||||||||||||||||||||
Metso OYJ | 14,684 | 324,277 | ||||||||||||||||||||||||
Neste OYJ | 124,940 | 3,911,386 | ||||||||||||||||||||||||
Sampo OYJ, A Shares | 61,474 | 2,765,307 | ||||||||||||||||||||||||
Sponda OYJ | 109,936 | 446,930 | ||||||||||||||||||||||||
Stora Enso OYJ, R Shares | 266,136 | 2,191,194 | ||||||||||||||||||||||||
Tieto OYJ | 63,726 | 1,664,362 | ||||||||||||||||||||||||
UPM-Kymmene OYJ | 275,619 | 4,662,311 | ||||||||||||||||||||||||
France 10.0% | 162,236,771 | |||||||||||||||||||||||||
Alten SA | 3,086 | 177,762 | ||||||||||||||||||||||||
AXA SA | 1,458,268 | 32,062,407 | ||||||||||||||||||||||||
BNP Paribas SA | 123,374 | 5,753,826 | ||||||||||||||||||||||||
Carrefour SA | 36,073 | 954,189 | ||||||||||||||||||||||||
Casino Guichard Perrachon SA (L) | 19,854 | 893,869 | ||||||||||||||||||||||||
Christian Dior SE | 56,839 | 9,995,363 | ||||||||||||||||||||||||
Cie de Saint-Gobain | 44,829 | 1,731,900 | ||||||||||||||||||||||||
Cie Generale des Etablissements Michelin | 70,435 | 6,353,679 | ||||||||||||||||||||||||
CNP Assurances | 32,133 | 475,201 | ||||||||||||||||||||||||
Credit Agricole SA | 7,784 | 81,351 | ||||||||||||||||||||||||
Engie SA | 15,918 | 246,354 | ||||||||||||||||||||||||
Euler Hermes Group | 2,992 | 247,743 | ||||||||||||||||||||||||
LVMH Moet Hennessy Louis Vuitton SE | 15,354 | 2,550,885 | ||||||||||||||||||||||||
Mercialys SA | 2,760 | 60,682 | ||||||||||||||||||||||||
Metropole Television SA | 63,817 | 1,069,154 | ||||||||||||||||||||||||
Nexity SA | 1,673 | 77,232 | ||||||||||||||||||||||||
Orange SA | 149,826 | 2,595,064 | ||||||||||||||||||||||||
Rallye SA (L) | 14,646 | 238,219 |
Shares | Value | |||||||||||||||||||||||||
France (continued) | ||||||||||||||||||||||||||
Renault SA | 74,048 | $6,752,040 | ||||||||||||||||||||||||
Rexel SA | 113,964 | 1,395,206 | ||||||||||||||||||||||||
Sanofi | 31,882 | 2,526,286 | ||||||||||||||||||||||||
Schneider Electric SE | 25,980 | 1,548,557 | ||||||||||||||||||||||||
SCOR SE | 123,901 | 4,333,432 | ||||||||||||||||||||||||
Societe BIC SA | 5,193 | 720,263 | ||||||||||||||||||||||||
Societe Generale SA | 177,610 | 6,237,871 | ||||||||||||||||||||||||
Suez Environnement Company | 121,853 | 2,104,886 | ||||||||||||||||||||||||
Total SA (L) | 1,118,845 | 50,147,372 | ||||||||||||||||||||||||
Trigano SA | 7,710 | 447,343 | ||||||||||||||||||||||||
Valeo SA | 24,319 | 3,362,177 | ||||||||||||||||||||||||
Vinci SA | 29,515 | 2,038,648 | ||||||||||||||||||||||||
Vivendi SA | 725,911 | 15,057,810 | ||||||||||||||||||||||||
Germany 10.7% | 172,738,508 | |||||||||||||||||||||||||
ADVA Optical Networking SE (I) | 119,463 | 1,234,578 | ||||||||||||||||||||||||
Allianz SE | 245,097 | 36,354,687 | ||||||||||||||||||||||||
Amadeus Fire AG | 3,258 | 228,815 | ||||||||||||||||||||||||
Aurubis AG | 34,004 | 1,534,323 | ||||||||||||||||||||||||
BASF SE | 461,110 | 29,897,583 | ||||||||||||||||||||||||
Bayerische Motoren Werke AG | 156,146 | 12,685,057 | ||||||||||||||||||||||||
Bechtle AG | 2,024 | 172,482 | ||||||||||||||||||||||||
Daimler AG | 562,879 | 38,296,879 | ||||||||||||||||||||||||
Deutsche Beteiligungs AG | 8,541 | 244,830 | ||||||||||||||||||||||||
Deutsche EuroShop AG | 1,004 | 42,320 | ||||||||||||||||||||||||
Deutsche Lufthansa AG (I) | 398,367 | 5,932,487 | ||||||||||||||||||||||||
Deutsche Telekom AG | 747,245 | 12,499,219 | ||||||||||||||||||||||||
Evonik Industries AG | 49,051 | 1,473,586 | ||||||||||||||||||||||||
Freenet AG | 49,459 | 1,469,413 | ||||||||||||||||||||||||
Grand City Properties SA | 8,439 | 175,224 | ||||||||||||||||||||||||
Hannover Rueck SE | 42,961 | 4,409,085 | ||||||||||||||||||||||||
HeidelbergCement AG | 29,894 | 2,186,849 | ||||||||||||||||||||||||
K+S AG | 140,929 | 2,945,866 | ||||||||||||||||||||||||
Leoni AG | 29,865 | 867,311 | ||||||||||||||||||||||||
METRO AG | 43,056 | 1,053,660 | ||||||||||||||||||||||||
Muenchener Rueckversicherungs-Gesellschaft AG | 45,365 | 8,905,008 | ||||||||||||||||||||||||
ProSiebenSat.1 Media SE | 145,527 | 7,438,352 | ||||||||||||||||||||||||
Rheinmetall AG | 6,591 | 468,123 | ||||||||||||||||||||||||
Rhoen-Klinikum AG | 24,476 | 722,990 | ||||||||||||||||||||||||
Salzgitter AG | 13,016 | 296,587 | ||||||||||||||||||||||||
Software AG | 15,791 | 556,695 | ||||||||||||||||||||||||
STADA Arzneimittel AG | 19,111 | 646,499 |
Shares | Value | |||||||||||||||||||||||||
Hong Kong 4.0% | $64,557,812 | |||||||||||||||||||||||||
BOC Hong Kong Holdings, Ltd. | 2,102,500 | 5,462,715 | ||||||||||||||||||||||||
Champion REIT | 714,000 | 346,935 | ||||||||||||||||||||||||
CK Hutchison Holdings, Ltd. | 818,472 | 9,868,208 | ||||||||||||||||||||||||
Dah Sing Banking Group, Ltd. | 377,200 | 626,107 | ||||||||||||||||||||||||
Dah Sing Financial Holdings, Ltd. | 68,800 | 362,890 | ||||||||||||||||||||||||
First Pacific Company, Ltd. | 84,000 | 57,890 | ||||||||||||||||||||||||
Hang Seng Bank, Ltd. | 174,000 | 2,941,654 | ||||||||||||||||||||||||
Henderson Land Development Company, Ltd. | 186,000 | 1,004,276 | ||||||||||||||||||||||||
HKT Trust & HKT, Ltd. | 368,000 | 509,205 | ||||||||||||||||||||||||
Hongkong Land Holdings, Ltd. | 893,800 | 5,244,946 | ||||||||||||||||||||||||
Hutchison Telecommunications Hong Kong Holdings, Ltd. | 1,206,000 | 406,124 | ||||||||||||||||||||||||
Hysan Development Company, Ltd. | 668,000 | 2,644,417 | ||||||||||||||||||||||||
Kerry Properties, Ltd. | 856,000 | 2,007,739 | ||||||||||||||||||||||||
Luk Fook Holdings International, Ltd. | 211,000 | 418,024 | ||||||||||||||||||||||||
Man Wah Holdings, Ltd. | 289,200 | 341,757 | ||||||||||||||||||||||||
Pacific Textiles Holdings, Ltd. | 753,000 | 1,098,243 | ||||||||||||||||||||||||
PCCW, Ltd. | 1,209,000 | 767,795 | ||||||||||||||||||||||||
Power Assets Holdings, Ltd. | 98,500 | 932,889 | ||||||||||||||||||||||||
Shun Tak Holdings, Ltd. | 1,180,000 | 368,255 | ||||||||||||||||||||||||
Sino Land Company, Ltd. | 502,000 | 696,579 | ||||||||||||||||||||||||
SJM Holdings, Ltd. | 2,644,000 | 1,608,446 | ||||||||||||||||||||||||
SmarTone Telecommunications Holdings, Ltd. | 272,500 | 448,488 | ||||||||||||||||||||||||
Sun Hung Kai Properties, Ltd. | 734,589 | 8,234,980 | ||||||||||||||||||||||||
Swire Pacific, Ltd., Class A | 335,000 | 3,271,930 | ||||||||||||||||||||||||
Swire Properties, Ltd. | 129,000 | 331,471 | ||||||||||||||||||||||||
Techtronic Industries Company, Ltd. | 397,000 | 1,516,716 | ||||||||||||||||||||||||
Television Broadcasts, Ltd. | 122,700 | 482,637 | ||||||||||||||||||||||||
Texwinca Holdings, Ltd. | 360,000 | 342,579 | ||||||||||||||||||||||||
The Bank of East Asia, Ltd. | 87,000 | 275,944 | ||||||||||||||||||||||||
The Link REIT | 864,500 | 4,871,975 | ||||||||||||||||||||||||
The Wharf Holdings, Ltd. | 573,000 | 2,874,280 | ||||||||||||||||||||||||
Value Partners Group, Ltd. | 262,000 | 219,809 | ||||||||||||||||||||||||
Wheelock & Company, Ltd. | 678,000 | 2,675,817 | ||||||||||||||||||||||||
Xinyi Glass Holdings, Ltd. | 1,118,000 | 590,402 | ||||||||||||||||||||||||
Yue Yuen Industrial Holdings, Ltd. | 198,500 | 705,690 | ||||||||||||||||||||||||
Isle of Man 0.1% | 1,646,056 | |||||||||||||||||||||||||
Playtech PLC | 140,357 | 1,646,056 | ||||||||||||||||||||||||
Israel 1.5% | 23,675,326 | |||||||||||||||||||||||||
Bank Hapoalim BM | 533,197 | 2,604,654 | ||||||||||||||||||||||||
Bank Leumi Le-Israel BM (I) | 1,292,029 | 4,310,291 | ||||||||||||||||||||||||
Bezeq The Israeli Telecommunication Corp., Ltd. | 866,293 | 1,942,117 | ||||||||||||||||||||||||
Check Point Software Technologies, Ltd. (I) | 30,200 | 2,508,714 |
Shares | Value | |||||||||||||||||||||||||
Israel (continued) | ||||||||||||||||||||||||||
Harel Insurance Investments & Financial Services, Ltd. | 82,253 | $278,635 | ||||||||||||||||||||||||
Israel Discount Bank, Ltd., Class A (I) | 996,703 | 1,601,106 | ||||||||||||||||||||||||
Mizrahi Tefahot Bank, Ltd. | 4,384 | 48,400 | ||||||||||||||||||||||||
Partner Communications Company, Ltd. (I) | 32,620 | 152,288 | ||||||||||||||||||||||||
Teva Pharmaceutical Industries, Ltd. | 182,309 | 10,229,121 | ||||||||||||||||||||||||
Italy 2.6% | 41,884,534 | |||||||||||||||||||||||||
A2A SpA | 891,883 | 1,020,248 | ||||||||||||||||||||||||
ACEA SpA | 40,691 | 545,414 | ||||||||||||||||||||||||
Amplifon SpA | 88,254 | 707,715 | ||||||||||||||||||||||||
ASTM SpA | 13,954 | 152,026 | ||||||||||||||||||||||||
Banca Mediolanum SpA | 218,168 | 1,542,679 | ||||||||||||||||||||||||
Enel SpA | 3,050,313 | 12,190,446 | ||||||||||||||||||||||||
Eni SpA | 1,128,711 | 15,785,338 | ||||||||||||||||||||||||
EXOR SpA | 24,735 | 815,323 | ||||||||||||||||||||||||
Hera SpA | 683,453 | 1,925,100 | ||||||||||||||||||||||||
Iren SpA | 105,170 | 166,476 | ||||||||||||||||||||||||
Italmobiliare SpA | 16,657 | 454,247 | ||||||||||||||||||||||||
MARR SpA | 26,921 | 525,828 | ||||||||||||||||||||||||
Recordati SpA | 62,294 | 1,497,850 | ||||||||||||||||||||||||
Reply SpA | 4,202 | 510,903 | ||||||||||||||||||||||||
Snam SpA | 18,691 | 100,726 | ||||||||||||||||||||||||
Societa Cattolica di Assicurazioni SCRL | 119,807 | 779,796 | ||||||||||||||||||||||||
Telecom Italia SpA | 106,430 | 82,096 | ||||||||||||||||||||||||
Telecom Italia SpA (I) | 3,087,637 | 3,000,265 | ||||||||||||||||||||||||
Unipol Gruppo Finanziario SpA | 22,210 | 82,058 | ||||||||||||||||||||||||
Japan 24.3% | 392,803,118 | |||||||||||||||||||||||||
Adastria Company, Ltd. | 8,000 | 207,447 | ||||||||||||||||||||||||
ADEKA Corp. | 55,000 | 728,560 | ||||||||||||||||||||||||
Aeon Company, Ltd. | 54,600 | 716,007 | ||||||||||||||||||||||||
Aisin Seiki Company, Ltd. | 65,800 | 2,633,083 | ||||||||||||||||||||||||
Alpine Electronics, Inc. | 22,900 | 258,675 | ||||||||||||||||||||||||
AOKI Holdings, Inc. | 48,600 | 546,860 | ||||||||||||||||||||||||
Aoyama Trading Company, Ltd. | 42,600 | 1,573,136 | ||||||||||||||||||||||||
Arcland Sakamoto Company, Ltd. | 25,000 | 235,964 | ||||||||||||||||||||||||
Asahi Glass Company, Ltd. | 180,000 | 871,278 | ||||||||||||||||||||||||
Asahi Kasei Corp. | 379,000 | 2,144,726 | ||||||||||||||||||||||||
Asatsu-DK, Inc. | 13,000 | 337,887 | ||||||||||||||||||||||||
Autobacs Seven Company, Ltd. | 35,000 | 593,258 | ||||||||||||||||||||||||
Bridgestone Corp. | 182,400 | 6,386,120 | ||||||||||||||||||||||||
Brother Industries, Ltd. | 11,000 | 120,148 | ||||||||||||||||||||||||
Calsonic Kansei Corp. | 211,000 | 1,548,750 | ||||||||||||||||||||||||
Canon Marketing Japan, Inc. | 5,400 | 90,910 |
Shares | Value | |||||||||||||||||||||||||
Japan (continued) | ||||||||||||||||||||||||||
Canon, Inc. | 305,200 | $8,601,925 | ||||||||||||||||||||||||
Central Glass Company, Ltd. | 160,000 | 913,855 | ||||||||||||||||||||||||
Central Japan Railway Company | 70,900 | 12,685,195 | ||||||||||||||||||||||||
Century Tokyo Leasing Corp. | 18,200 | 620,942 | ||||||||||||||||||||||||
Chiyoda Integre Company, Ltd. | 12,900 | 291,078 | ||||||||||||||||||||||||
Coca-Cola West Company, Ltd. | 14,200 | 317,738 | ||||||||||||||||||||||||
Cosmo Energy Holdings Company, Ltd. (I) | 39,400 | 422,244 | ||||||||||||||||||||||||
Credit Saison Company, Ltd. | 17,900 | 303,078 | ||||||||||||||||||||||||
CyberAgent, Inc. | 4,200 | 172,366 | ||||||||||||||||||||||||
Daicel Corp. | 25,300 | 322,826 | ||||||||||||||||||||||||
Daihatsu Motor Company, Ltd. | 53,800 | 747,052 | ||||||||||||||||||||||||
Daiichi Sankyo Company, Ltd. | 37,100 | 774,595 | ||||||||||||||||||||||||
Daiichikosho Company, Ltd. | 16,700 | 698,471 | ||||||||||||||||||||||||
Daikyo, Inc. | 79,000 | 125,252 | ||||||||||||||||||||||||
Daito Trust Construction Company, Ltd. | 22,300 | 3,020,290 | ||||||||||||||||||||||||
Daiwa House Industry Company, Ltd. | 32,000 | 875,733 | ||||||||||||||||||||||||
Daiwabo Holdings Company, Ltd. | 168,000 | 296,408 | ||||||||||||||||||||||||
DCM Holdings Company, Ltd. | 128,800 | 947,864 | ||||||||||||||||||||||||
DeNA Company, Ltd. | 92,661 | 1,352,480 | ||||||||||||||||||||||||
Denka Company, Ltd. | 362,000 | 1,282,335 | ||||||||||||||||||||||||
Descente, Ltd. | 18,900 | 282,077 | ||||||||||||||||||||||||
Doutor Nichires Holdings Company, Ltd. | 25,200 | 396,114 | ||||||||||||||||||||||||
Exedy Corp. | 11,700 | 233,299 | ||||||||||||||||||||||||
Fuji Heavy Industries, Ltd. | 115,616 | 3,782,589 | ||||||||||||||||||||||||
Fuji Oil Holdings, Inc. | 50,500 | 855,699 | ||||||||||||||||||||||||
FUJIFILM Holdings Corp. | 312,300 | 11,705,070 | ||||||||||||||||||||||||
Fujitsu General, Ltd. | 11,000 | 149,886 | ||||||||||||||||||||||||
Fukuoka Financial Group, Inc. | 62,000 | 196,479 | ||||||||||||||||||||||||
Fuyo General Lease Company, Ltd. | 8,100 | 343,652 | ||||||||||||||||||||||||
Geo Holdings Corp. | 34,100 | 509,548 | ||||||||||||||||||||||||
Gree, Inc. | 152,100 | 717,773 | ||||||||||||||||||||||||
Gunze, Ltd. | 40,000 | 104,949 | ||||||||||||||||||||||||
H2O Retailing Corp. | 8,700 | 149,900 | ||||||||||||||||||||||||
Hanwa Company, Ltd. | 322,000 | 1,325,102 | ||||||||||||||||||||||||
Haseko Corp. | 263,100 | 2,277,080 | ||||||||||||||||||||||||
Hitachi Capital Corp. | 7,400 | 158,769 | ||||||||||||||||||||||||
Hitachi Chemical Company, Ltd. | 52,100 | 847,865 | ||||||||||||||||||||||||
Hokuhoku Financial Group, Inc. | 101,000 | 150,330 | ||||||||||||||||||||||||
Honda Motor Company, Ltd. | 155,903 | 4,009,652 | ||||||||||||||||||||||||
Horiba, Ltd. | 6,700 | 219,560 | ||||||||||||||||||||||||
Hoya Corp. | 48,600 | 1,756,248 | ||||||||||||||||||||||||
Idemitsu Kosan Company, Ltd. | 70,800 | 1,071,714 | ||||||||||||||||||||||||
Inpex Corp. | 272,700 | 1,965,999 |
Shares | Value | |||||||||||||||||||||||||
Japan (continued) | ||||||||||||||||||||||||||
Isuzu Motors, Ltd. | 96,100 | $961,444 | ||||||||||||||||||||||||
ITOCHU Corp. | 1,582,200 | 18,652,878 | ||||||||||||||||||||||||
Itochu Enex Company, Ltd. | 43,900 | 323,145 | ||||||||||||||||||||||||
Jafco Company, Ltd. | 7,700 | 212,114 | ||||||||||||||||||||||||
Japan Airlines Company, Ltd. | 243,900 | 8,727,115 | ||||||||||||||||||||||||
Japan Tobacco, Inc. | 8,000 | 318,119 | ||||||||||||||||||||||||
JSR Corp. | 15,500 | 217,283 | ||||||||||||||||||||||||
JX Holdings, Inc. | 456,700 | 1,773,982 | ||||||||||||||||||||||||
K's Holdings Corp. | 66,900 | 2,177,365 | ||||||||||||||||||||||||
Kaneka Corp. | 188,000 | 1,407,900 | ||||||||||||||||||||||||
Kanematsu Corp. | 458,000 | 608,852 | ||||||||||||||||||||||||
Kawasaki Kisen Kaisha, Ltd. | 774,000 | 1,295,277 | ||||||||||||||||||||||||
KDDI Corp. | 1,361,400 | 34,781,047 | ||||||||||||||||||||||||
Keihin Corp. | 41,800 | 575,011 | ||||||||||||||||||||||||
Kobe Steel, Ltd. | 884,000 | 679,994 | ||||||||||||||||||||||||
Kohnan Shoji Company, Ltd. (L) | 9,800 | 133,003 | ||||||||||||||||||||||||
Koito Manufacturing Company, Ltd. | 13,400 | 590,277 | ||||||||||||||||||||||||
Kokuyo Company, Ltd. | 58,200 | 578,108 | ||||||||||||||||||||||||
Konica Minolta, Inc. | 38,500 | 322,797 | ||||||||||||||||||||||||
Kuraray Company, Ltd. | 90,500 | 989,574 | ||||||||||||||||||||||||
Kuroda Electric Company, Ltd. | 12,100 | 164,529 | ||||||||||||||||||||||||
Leopalace21 Corp. (I) | 223,700 | 1,297,933 | ||||||||||||||||||||||||
Marubeni Corp. | 927,024 | 4,644,558 | ||||||||||||||||||||||||
Marui Group Company, Ltd. | 13,300 | 182,298 | ||||||||||||||||||||||||
Medipal Holdings Corp. | 136,135 | 2,086,291 | ||||||||||||||||||||||||
Mitsuba Corp. | 6,600 | 87,844 | ||||||||||||||||||||||||
Mitsubishi Chemical Holdings Corp. | 410,249 | 2,070,013 | ||||||||||||||||||||||||
Mitsubishi Corp. | 229,495 | 3,672,731 | ||||||||||||||||||||||||
Mitsubishi Electric Corp. | 467,000 | 4,727,843 | ||||||||||||||||||||||||
Mitsubishi UFJ Financial Group, Inc. | 5,261,400 | 22,704,568 | ||||||||||||||||||||||||
Mitsubishi UFJ Lease & Finance Company, Ltd. | 71,100 | 306,675 | ||||||||||||||||||||||||
Mitsui & Company, Ltd. | 914,500 | 10,542,267 | ||||||||||||||||||||||||
Mitsui Engineering & Shipbuilding Company, Ltd. | 441,000 | 581,846 | ||||||||||||||||||||||||
Mizuho Financial Group, Inc. | 3,808,600 | 5,618,592 | ||||||||||||||||||||||||
Murata Manufacturing Company, Ltd. | 7,100 | 851,990 | ||||||||||||||||||||||||
NHK Spring Company, Ltd. | 73,400 | 669,979 | ||||||||||||||||||||||||
Nichiha Corp. | 28,800 | 389,143 | ||||||||||||||||||||||||
Nifco, Inc. | 5,000 | 225,878 | ||||||||||||||||||||||||
Nippo Corp. | 50,000 | 746,043 | ||||||||||||||||||||||||
Nippon Electric Glass Company, Ltd. | 169,000 | 803,759 | ||||||||||||||||||||||||
Nippon Light Metal Holdings Company, Ltd. | 156,600 | 244,045 | ||||||||||||||||||||||||
Nippon Paper Industries Company, Ltd. | 117,100 | 1,978,175 | ||||||||||||||||||||||||
Nippon Steel & Sumikin Bussan Corp. | 154,000 | 474,469 |
Shares | Value | |||||||||||||||||||||||||
Japan (continued) | ||||||||||||||||||||||||||
Nippon Telegraph & Telephone Corp. | 744,900 | $31,544,518 | ||||||||||||||||||||||||
Nippon Television Holdings, Inc. | 11,250 | 192,331 | ||||||||||||||||||||||||
Nippon Yusen KK | 260,000 | 479,159 | ||||||||||||||||||||||||
Nipro Corp. | 48,400 | 453,473 | ||||||||||||||||||||||||
Nissan Motor Company, Ltd. | 1,653,767 | 14,999,112 | ||||||||||||||||||||||||
Nissin Kogyo Company, Ltd. | 5,400 | 67,582 | ||||||||||||||||||||||||
Nitori Holdings Company, Ltd. | 39,400 | 3,026,146 | ||||||||||||||||||||||||
NOK Corp. | 38,200 | 615,694 | ||||||||||||||||||||||||
Nomura Holdings, Inc. | 398,100 | 1,682,276 | ||||||||||||||||||||||||
Nomura Real Estate Holdings, Inc. | 17,500 | 313,235 | ||||||||||||||||||||||||
North Pacific Bank, Ltd. | 49,100 | 121,648 | ||||||||||||||||||||||||
NTT DOCOMO, Inc. | 579,743 | 13,494,506 | ||||||||||||||||||||||||
Onward Holdings Company, Ltd. | 57,000 | 346,229 | ||||||||||||||||||||||||
Open House Company, Ltd. | 5,100 | 92,096 | ||||||||||||||||||||||||
Orient Corp. (I) | 199,400 | 351,337 | ||||||||||||||||||||||||
ORIX Corp. | 177,200 | 2,319,710 | ||||||||||||||||||||||||
Osaka Gas Company, Ltd. | 143,000 | 544,985 | ||||||||||||||||||||||||
Otsuka Holdings Company, Ltd. | 276,600 | 9,776,263 | ||||||||||||||||||||||||
PanaHome Corp. | 41,000 | 290,197 | ||||||||||||||||||||||||
Press Kogyo Company, Ltd. | 81,100 | 277,928 | ||||||||||||||||||||||||
Relo Holdings, Inc. | 600 | 73,546 | ||||||||||||||||||||||||
Resona Holdings, Inc. | 506,600 | 1,776,699 | ||||||||||||||||||||||||
Ricoh Company, Ltd. | 196,700 | 1,942,535 | ||||||||||||||||||||||||
Ryohin Keikaku Company, Ltd. | 12,100 | 2,464,868 | ||||||||||||||||||||||||
Saizeriya Company, Ltd. | 6,600 | 135,715 | ||||||||||||||||||||||||
San-A Company, Ltd. | 3,400 | 144,676 | ||||||||||||||||||||||||
Sangetsu Company, Ltd. | 1,700 | 30,065 | ||||||||||||||||||||||||
Sanshin Electronics Company, Ltd. | 27,700 | 207,323 | ||||||||||||||||||||||||
Sanyo Shokai, Ltd. | 128,000 | 269,883 | ||||||||||||||||||||||||
Seiko Epson Corp. | 68,700 | 1,104,563 | ||||||||||||||||||||||||
Sekisui Chemical Company, Ltd. | 243,400 | 2,695,834 | ||||||||||||||||||||||||
Sekisui House, Ltd. | 295,900 | 4,815,749 | ||||||||||||||||||||||||
Shimachu Company, Ltd. | 3,400 | 72,157 | ||||||||||||||||||||||||
Shimamura Company, Ltd. | 2,500 | 276,573 | ||||||||||||||||||||||||
Showa Denko KK | 409,000 | 406,102 | ||||||||||||||||||||||||
SKY Perfect JSAT Holdings, Inc. | 11,875 | 72,238 | ||||||||||||||||||||||||
Sojitz Corp. | 1,946,700 | 3,745,673 | ||||||||||||||||||||||||
Sumitomo Corp. | 462,000 | 4,548,117 | ||||||||||||||||||||||||
Sumitomo Forestry Company, Ltd. | 100,500 | 1,121,940 | ||||||||||||||||||||||||
Sumitomo Heavy Industries, Ltd. | 150,000 | 618,658 | ||||||||||||||||||||||||
Sumitomo Metal Mining Company, Ltd. | 184,000 | 1,977,445 | ||||||||||||||||||||||||
Sumitomo Mitsui Financial Group, Inc. | 961,000 | 26,965,839 | ||||||||||||||||||||||||
Sumitomo Mitsui Trust Holdings, Inc. | 334,000 | 973,187 |
Shares | Value | |||||||||||||||||||||||||
Japan (continued) | ||||||||||||||||||||||||||
Sumitomo Osaka Cement Company, Ltd. | 94,000 | $343,409 | ||||||||||||||||||||||||
Sumitomo Rubber Industries, Ltd. | 128,900 | 1,842,246 | ||||||||||||||||||||||||
Sumitomo Seika Chemicals Company, Ltd. | 51,000 | 262,847 | ||||||||||||||||||||||||
Suruga Bank, Ltd. | 9,700 | 155,378 | ||||||||||||||||||||||||
Suzuken Company, Ltd. | 8,700 | 282,723 | ||||||||||||||||||||||||
T-Gaia Corp. | 19,800 | 229,005 | ||||||||||||||||||||||||
Takashimaya Company, Ltd. | 49,000 | 392,078 | ||||||||||||||||||||||||
The 77 Bank, Ltd. | 17,000 | 60,228 | ||||||||||||||||||||||||
The Bank of Kyoto, Ltd. | 22,000 | 137,647 | ||||||||||||||||||||||||
The Bank of Yokohama, Ltd. | 86,000 | 389,940 | ||||||||||||||||||||||||
The Chiba Bank, Ltd. | 50,000 | 234,482 | ||||||||||||||||||||||||
The Daishi Bank, Ltd. | 9,000 | 29,834 | ||||||||||||||||||||||||
The Gunma Bank, Ltd. | 24,000 | 105,456 | ||||||||||||||||||||||||
The Hachijuni Bank, Ltd. | 16,000 | 73,386 | ||||||||||||||||||||||||
The Hiroshima Bank, Ltd. | 21,000 | 78,258 | ||||||||||||||||||||||||
The Hyakugo Bank, Ltd. | 61,000 | 219,931 | ||||||||||||||||||||||||
The Iyo Bank, Ltd. | 10,600 | 73,327 | ||||||||||||||||||||||||
The Joyo Bank, Ltd. | 39,000 | 135,084 | ||||||||||||||||||||||||
The Juroku Bank, Ltd. | 10,000 | 31,258 | ||||||||||||||||||||||||
The Keiyo Bank, Ltd. | 5,000 | 18,954 | ||||||||||||||||||||||||
The Musashino Bank, Ltd. | 1,000 | 25,608 | ||||||||||||||||||||||||
The Nishi-Nippon City Bank, Ltd. | 166,000 | 299,949 | ||||||||||||||||||||||||
The Ogaki Kyoritsu Bank, Ltd. | 7,000 | 21,847 | ||||||||||||||||||||||||
The San-In Godo Bank, Ltd. | 6,000 | 35,640 | ||||||||||||||||||||||||
The Shizuoka Bank, Ltd. | 26,000 | 190,048 | ||||||||||||||||||||||||
The Yokohama Rubber Company, Ltd. | 79,700 | 1,270,813 | ||||||||||||||||||||||||
Toei Company, Ltd. | 26,000 | 203,216 | ||||||||||||||||||||||||
Toho Holdings Company, Ltd. | 69,100 | 1,432,790 | ||||||||||||||||||||||||
Tokai Rika Company, Ltd. | 48,200 | 949,320 | ||||||||||||||||||||||||
Tokai Tokyo Financial Holdings, Inc. | 17,500 | 85,088 | ||||||||||||||||||||||||
Token Corp. | 4,600 | 342,677 | ||||||||||||||||||||||||
Tokyo Electric Power Company, Inc. (I) | 343,200 | 1,738,451 | ||||||||||||||||||||||||
Tokyo Gas Company, Ltd. | 94,000 | 433,880 | ||||||||||||||||||||||||
Tokyo Seimitsu Company, Ltd. | 8,200 | 153,526 | ||||||||||||||||||||||||
Topre Corp. | 13,000 | 241,669 | ||||||||||||||||||||||||
Tosoh Corp. | 489,000 | 1,858,792 | ||||||||||||||||||||||||
Toyo Tire & Rubber Company, Ltd. | 16,400 | 248,717 | ||||||||||||||||||||||||
Toyoda Gosei Company, Ltd. | 16,400 | 313,463 | ||||||||||||||||||||||||
Toyota Boshoku Corp. | 11,100 | 175,078 | ||||||||||||||||||||||||
Toyota Tsusho Corp. | 199,800 | 4,032,085 | ||||||||||||||||||||||||
TPR Company, Ltd. | 15,100 | 363,770 | ||||||||||||||||||||||||
TS Tech Company, Ltd. | 59,200 | 1,315,236 | ||||||||||||||||||||||||
Ube Industries, Ltd. | 310,000 | 524,505 |
Shares | Value | |||||||||||||||||||||||||
Japan (continued) | ||||||||||||||||||||||||||
UKC Holdings Corp. | 15,400 | $275,260 | ||||||||||||||||||||||||
Unipres Corp. | 2,700 | 48,895 | ||||||||||||||||||||||||
UNY Group Holdings Company, Ltd. | 146,200 | 946,846 | ||||||||||||||||||||||||
USS Company, Ltd. | 11,100 | 174,707 | ||||||||||||||||||||||||
Valor Company, Ltd. | 51,700 | 1,117,667 | ||||||||||||||||||||||||
Wacoal Holdings Corp. | 40,000 | 460,094 | ||||||||||||||||||||||||
West Japan Railway Company | 35,000 | 2,047,590 | ||||||||||||||||||||||||
Xebio Company, Ltd. | 2,000 | 31,723 | ||||||||||||||||||||||||
Yamaguchi Financial Group, Inc. | 79,000 | 743,720 | ||||||||||||||||||||||||
Yamaha Motor Company, Ltd. | 8,000 | 119,076 | ||||||||||||||||||||||||
Yamazen Corp. | 38,200 | 303,140 | ||||||||||||||||||||||||
Yuasa Trading Company, Ltd. | 17,500 | 384,307 | ||||||||||||||||||||||||
Malta 0.0% | 144,676 | |||||||||||||||||||||||||
BGP Holdings PLC (I) | 2,714,128 | 144,676 | ||||||||||||||||||||||||
Netherlands 2.3% | 36,482,746 | |||||||||||||||||||||||||
Boskalis Westminster NV | 9,991 | 363,471 | ||||||||||||||||||||||||
Corbion NV | 33,663 | 747,960 | ||||||||||||||||||||||||
Delta Lloyd NV (L) | 101,837 | 635,130 | ||||||||||||||||||||||||
Heineken Holding NV | 28,359 | 2,053,902 | ||||||||||||||||||||||||
Heineken NV | 67,508 | 5,417,754 | ||||||||||||||||||||||||
ING Groep NV | 3,459 | 41,236 | ||||||||||||||||||||||||
Koninklijke Ahold NV | 481,333 | 10,539,983 | ||||||||||||||||||||||||
PostNL NV (I) | 601,680 | 2,336,008 | ||||||||||||||||||||||||
Royal Dutch Shell PLC, A Shares (L) | 240,637 | 5,481,756 | ||||||||||||||||||||||||
TomTom NV (I) | 89,150 | 799,901 | ||||||||||||||||||||||||
Wolters Kluwer NV | 214,068 | 8,065,645 | ||||||||||||||||||||||||
New Zealand 0.1% | 2,001,456 | |||||||||||||||||||||||||
Air New Zealand, Ltd. | 359,149 | 644,481 | ||||||||||||||||||||||||
Chorus, Ltd. | 105,127 | 271,378 | ||||||||||||||||||||||||
Nuplex Industries, Ltd. | 101,853 | 337,545 | ||||||||||||||||||||||||
SKY Network Television, Ltd. | 264,011 | 748,052 | ||||||||||||||||||||||||
Norway 1.5% | 23,838,024 | |||||||||||||||||||||||||
DNB ASA | 63,653 | 733,736 | ||||||||||||||||||||||||
Orkla ASA | 324,927 | 2,680,373 | ||||||||||||||||||||||||
Statoil ASA | 628,222 | 9,145,179 | ||||||||||||||||||||||||
Storebrand ASA (I) | 274,573 | 1,078,508 | ||||||||||||||||||||||||
Telenor ASA | 307,883 | 4,596,358 | ||||||||||||||||||||||||
Yara International ASA | 144,609 | 5,603,870 | ||||||||||||||||||||||||
Portugal 0.1% | 1,788,014 | |||||||||||||||||||||||||
CTT-Correios de Portugal SA | 193,766 | 1,485,276 |
Shares | Value | |||||||||||||||||||||||||
Portugal (continued) | ||||||||||||||||||||||||||
EDP - Energias de Portugal SA | 97,752 | $302,738 | ||||||||||||||||||||||||
Singapore 0.6% | 9,505,176 | |||||||||||||||||||||||||
Ascendas Real Estate Investment Trust | 520,100 | 894,849 | ||||||||||||||||||||||||
BW LPG, Ltd. (S) | 96,178 | 624,276 | ||||||||||||||||||||||||
CapitaLand Commercial Trust | 583,600 | 593,319 | ||||||||||||||||||||||||
CapitaLand Mall Trust | 490,700 | 763,655 | ||||||||||||||||||||||||
CapitaLand Retail China Trust | 203,500 | 206,196 | ||||||||||||||||||||||||
CDL Hospitality Trusts | 288,100 | 262,300 | ||||||||||||||||||||||||
DBS Group Holdings, Ltd. | 371,300 | 3,576,187 | ||||||||||||||||||||||||
Frasers Centrepoint Trust | 16,700 | 23,575 | ||||||||||||||||||||||||
Golden Agri-Resources, Ltd. | 3,958,800 | 1,041,705 | ||||||||||||||||||||||||
Keppel REIT | 86,300 | 57,648 | ||||||||||||||||||||||||
Mapletree Commercial Trust | 21,500 | 21,555 | ||||||||||||||||||||||||
Mapletree Greater China Commercial Trust | 825,000 | 533,658 | ||||||||||||||||||||||||
Mapletree Industrial Trust | 311,700 | 342,388 | ||||||||||||||||||||||||
Mapletree Logistics Trust | 85,800 | 59,463 | ||||||||||||||||||||||||
Starhill Global REIT | 374,800 | 198,555 | ||||||||||||||||||||||||
UOL Group, Ltd. | 76,000 | 305,847 | ||||||||||||||||||||||||
Spain 1.7% | 27,712,739 | |||||||||||||||||||||||||
Ebro Foods SA | 17,160 | 350,197 | ||||||||||||||||||||||||
Enagas SA | 51,058 | 1,433,203 | ||||||||||||||||||||||||
Endesa SA | 274,194 | 4,942,125 | ||||||||||||||||||||||||
Gas Natural SDG SA | 93,527 | 1,628,712 | ||||||||||||||||||||||||
Iberdrola SA | 1,623,876 | 10,461,397 | ||||||||||||||||||||||||
Red Electrica Corp. SA | 17,835 | 1,410,450 | ||||||||||||||||||||||||
Repsol SA | 411,741 | 4,236,787 | ||||||||||||||||||||||||
Telefonica SA | 325,925 | 3,249,868 | ||||||||||||||||||||||||
Sweden 1.4% | 22,577,672 | |||||||||||||||||||||||||
Axfood AB | 25,638 | 429,323 | ||||||||||||||||||||||||
Bilia AB, A Shares | 23,939 | 462,611 | ||||||||||||||||||||||||
Castellum AB | 32,672 | 493,316 | ||||||||||||||||||||||||
Fabege AB | 24,212 | 374,489 | ||||||||||||||||||||||||
Fastighets AB Balder, B Shares (I) | 12,008 | 277,017 | ||||||||||||||||||||||||
Hufvudstaden AB, A Shares | 19,632 | 285,931 | ||||||||||||||||||||||||
Industrivarden AB, C Shares | 26,505 | 407,869 | ||||||||||||||||||||||||
Investor AB, B Shares | 57,362 | 1,900,233 | ||||||||||||||||||||||||
L E Lundbergforetagen AB, B Shares | 673 | 33,902 | ||||||||||||||||||||||||
NCC AB, B Shares | 56,478 | 1,900,228 | ||||||||||||||||||||||||
Sandvik AB | 384,374 | 3,493,835 | ||||||||||||||||||||||||
Securitas AB, B Shares | 92,546 | 1,383,414 | ||||||||||||||||||||||||
Skanska AB, B Shares | 90,329 | 1,920,053 |
Shares | Value | |||||||||||||||||||||||||
Sweden (continued) | ||||||||||||||||||||||||||
Telefonaktiebolaget LM Ericsson, B Shares | 767,462 | $7,048,587 | ||||||||||||||||||||||||
Volvo AB, B Shares | 143,826 | 1,440,697 | ||||||||||||||||||||||||
Wihlborgs Fastigheter AB | 36,861 | 726,167 | ||||||||||||||||||||||||
Switzerland 4.0% | 64,495,736 | |||||||||||||||||||||||||
Adecco SA (I) | 25,121 | 1,454,947 | ||||||||||||||||||||||||
Ascom Holding AG | 24,700 | 412,812 | ||||||||||||||||||||||||
Autoneum Holding AG (I) | 1,873 | 402,355 | ||||||||||||||||||||||||
Baloise Holding AG | 12,274 | 1,543,934 | ||||||||||||||||||||||||
Banque Cantonale Vaudoise | 283 | 181,837 | ||||||||||||||||||||||||
Cembra Money Bank AG (I) | 3,570 | 231,469 | ||||||||||||||||||||||||
dorma+kaba Holding AG (I) | 949 | 567,729 | ||||||||||||||||||||||||
EMS-Chemie Holding AG | 1,137 | 527,233 | ||||||||||||||||||||||||
Flughafen Zuerich AG | 508 | 403,003 | ||||||||||||||||||||||||
Forbo Holding AG (I) | 260 | 269,723 | ||||||||||||||||||||||||
Georg Fischer AG | 604 | 410,632 | ||||||||||||||||||||||||
Helvetia Holding AG | 1,204 | 636,111 | ||||||||||||||||||||||||
Kuehne + Nagel International AG | 8,036 | 1,042,299 | ||||||||||||||||||||||||
LafargeHolcim, Ltd. (I) | 47,231 | 1,858,309 | ||||||||||||||||||||||||
Logitech International SA | 19,995 | 308,662 | ||||||||||||||||||||||||
Roche Holding AG | 5,807 | 1,489,004 | ||||||||||||||||||||||||
Sika AG | 72 | 273,414 | ||||||||||||||||||||||||
Swiss Life Holding AG (I) | 12,419 | 3,024,220 | ||||||||||||||||||||||||
Swiss Re AG | 360,220 | 31,928,445 | ||||||||||||||||||||||||
Swisscom AG | 2,836 | 1,381,894 | ||||||||||||||||||||||||
The Swatch Group AG | 12,112 | 4,194,176 | ||||||||||||||||||||||||
The Swatch Group AG | 3,502 | 243,219 | ||||||||||||||||||||||||
Vontobel Holding AG | 9,962 | 433,493 | ||||||||||||||||||||||||
Zurich Insurance Group AG (I) | 53,240 | 11,276,816 | ||||||||||||||||||||||||
United Kingdom 15.0% | 243,128,420 | |||||||||||||||||||||||||
AstraZeneca PLC | 734,354 | 41,752,826 | ||||||||||||||||||||||||
Beazley PLC | 216,280 | 1,077,169 | ||||||||||||||||||||||||
Bellway PLC | 36,524 | 1,299,511 | ||||||||||||||||||||||||
Berkeley Group Holdings PLC | 154,310 | 6,949,024 | ||||||||||||||||||||||||
Bovis Homes Group PLC | 59,173 | 784,637 | ||||||||||||||||||||||||
BP PLC | 3,123,967 | 15,161,181 | ||||||||||||||||||||||||
British American Tobacco PLC | 482,896 | 26,271,528 | ||||||||||||||||||||||||
BT Group PLC | 1,358,243 | 9,146,604 | ||||||||||||||||||||||||
Carillion PLC (L) | 391,255 | 1,491,430 | ||||||||||||||||||||||||
Centrica PLC | 3,341,827 | 9,609,785 | ||||||||||||||||||||||||
Compass Group PLC | 269,594 | 4,726,620 | ||||||||||||||||||||||||
Crest Nicholson Holdings PLC | 241,354 | 1,873,795 | ||||||||||||||||||||||||
CYBG PLC (I) | 5,837 | 15,123 |
Shares | Value | |||||||||||||||||||||||||
United Kingdom (continued) | ||||||||||||||||||||||||||
EnQuest PLC (I) | 846,557 | $164,089 | ||||||||||||||||||||||||
Galliford Try PLC | 23,482 | 477,975 | ||||||||||||||||||||||||
GlaxoSmithKline PLC | 748,653 | 14,508,904 | ||||||||||||||||||||||||
Henderson Group PLC | 626,413 | 2,033,744 | ||||||||||||||||||||||||
Home Retail Group PLC | 1,131,148 | 2,767,803 | ||||||||||||||||||||||||
Hunting PLC | 64,778 | 315,610 | ||||||||||||||||||||||||
IG Group Holdings PLC | 225,471 | 2,376,877 | ||||||||||||||||||||||||
Imperial Brands PLC | 223,866 | 11,554,999 | ||||||||||||||||||||||||
Inchcape PLC | 388,969 | 3,975,507 | ||||||||||||||||||||||||
Indivior PLC | 218,756 | 510,560 | ||||||||||||||||||||||||
Intermediate Capital Group PLC | 206,773 | 1,654,774 | ||||||||||||||||||||||||
J Sainsbury PLC | 510,606 | 1,797,193 | ||||||||||||||||||||||||
Jupiter Fund Management PLC | 114,364 | 632,806 | ||||||||||||||||||||||||
Kingfisher PLC | 1,515,896 | 7,002,361 | ||||||||||||||||||||||||
Lookers PLC | 206,706 | 442,955 | ||||||||||||||||||||||||
Marks & Spencer Group PLC | 206,046 | 1,211,729 | ||||||||||||||||||||||||
National Express Group PLC | 36,019 | 164,112 | ||||||||||||||||||||||||
Persimmon PLC (I) | 383,311 | 11,584,169 | ||||||||||||||||||||||||
Reckitt Benckiser Group PLC | 172,866 | 15,746,287 | ||||||||||||||||||||||||
Royal Mail PLC | 765,141 | 4,819,498 | ||||||||||||||||||||||||
Savills PLC | 15,752 | 143,506 | ||||||||||||||||||||||||
The Sage Group PLC | 591,219 | 4,878,530 | ||||||||||||||||||||||||
Unilever NV | 248,689 | 10,842,460 | ||||||||||||||||||||||||
WH Smith PLC | 125,711 | 3,148,218 | ||||||||||||||||||||||||
WM Morrison Supermarkets PLC (L) | 1,217,431 | 3,352,309 | ||||||||||||||||||||||||
WPP PLC | 800,585 | 16,862,212 | ||||||||||||||||||||||||
Preferred securities 0.6% | $10,169,450 | |||||||||||||||||||||||||
(Cost $17,457,476) | ||||||||||||||||||||||||||
Germany 0.6% | 10,169,450 | |||||||||||||||||||||||||
Jungheinrich AG | 5,907 | 447,764 | ||||||||||||||||||||||||
Porsche Automobil Holding SE | 145,218 | 6,567,734 | ||||||||||||||||||||||||
Volkswagen AG | 27,122 | 3,153,952 | ||||||||||||||||||||||||
Yield (%) | Shares | Value | ||||||||||||||||||||||||
Securities lending collateral 1.2% | $19,499,485 | |||||||||||||||||||||||||
(Cost $19,499,274) | ||||||||||||||||||||||||||
John Hancock Collateral Trust (W) | 0.4639(Y) | 1,948,916 | 19,499,485 | |||||||||||||||||||||||
Yield (%)* | Maturity date | Par value^ | Value | |||||||||||||||||||||||
Short-term investments 7.6% | $123,090,314 | |||||||||||||||||||||||||
(Cost $123,090,569) | ||||||||||||||||||||||||||
U.S. Government 6.4% | 102,930,372 | |||||||||||||||||||||||||
U.S. Treasury Bill | 0.052 | 04-28-16 | 25,000,000 | 24,988,950 |
Yield (%)* | Maturity date | Par value^ | Value | |||||||||||||||||||||||
U.S. Government (continued) | ||||||||||||||||||||||||||
U.S. Treasury Bill | 0.073 | 04-14-16 | 15,000,000 | $14,994,900 | ||||||||||||||||||||||
U.S. Treasury Bill | 0.076 | 04-21-16 | 18,000,000 | 17,992,692 | ||||||||||||||||||||||
U.S. Treasury Bill | 0.180 | 03-03-16 | 5,000,000 | 4,999,965 | ||||||||||||||||||||||
U.S. Treasury Bill | 0.315 | 06-02-16 | 15,000,000 | 14,987,985 | ||||||||||||||||||||||
U.S. Treasury Bill | 0.470 | 06-23-16 | 15,000,000 | 14,984,850 | ||||||||||||||||||||||
U.S. Treasury Bill | 0.526 | 08-04-16 | 10,000,000 | 9,981,030 | ||||||||||||||||||||||
Yield (%) | Shares | Value | ||||||||||||||||||||||||
Money market funds 1.2% | 20,159,942 | |||||||||||||||||||||||||
JPMorgan U.S. Treasury Plus Money Market Fund | 0.1529(Y) | 20,159,942 | $20,159,942 | |||||||||||||||||||||||
Total investments (Cost $1,820,928,136)† 101.7% | $1,644,862,349 | |||||||||||||||||||||||||
Other assets and liabilities, net (1.7%) | ($27,514,336 | ) | ||||||||||||||||||||||||
Total net assets 100.0% | $1,617,348,013 |
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. | ||||||||||||||||||||||||||
Key to Security Abbreviations and Legend | ||||||||||||||||||||||||||
REIT | Real Estate Investment Trust | |||||||||||||||||||||||||
(I) | Non-income producing security. | |||||||||||||||||||||||||
(L) | A portion of this security is on loan as of 2-29-16. | |||||||||||||||||||||||||
(S) | These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. | |||||||||||||||||||||||||
(W) | Investment is an affiliate of the fund, the advisor and/or subadvisor. This security represents the investment of cash collateral received for securities lending. | |||||||||||||||||||||||||
(Y) | The rate shown is the annualized seven-day yield as of 2-29-16. | |||||||||||||||||||||||||
* | Yield represents either the annualized yield at the date of purchase, the stated coupon rate or, for floating rate securities, the rate at period end. | |||||||||||||||||||||||||
† | At 2-29-16, the aggregate cost of investment securities for federal income tax purposes was $1,867,923,956. Net unrealized depreciation aggregated to $223,061,607, of which $45,483,292 related to appreciated investment securities and $268,544,899 related to depreciated investment securities. |
Financial statements
STATEMENT OF ASSETS AND LIABILITIES 2-29-16
Assets | |||||||||||||||||||||||||||||||||
Unaffiliated investments, at value (Cost $1,801,428,862) including $18,519,845 of securities loaned | 1,625,362,864 | ||||||||||||||||||||||||||||||||
Affiliated investments, at value (Cost $19,499,274) | 19,499,485 | ||||||||||||||||||||||||||||||||
Total investments, at value (Cost $1,820,928,136) | 1,644,862,349 | ||||||||||||||||||||||||||||||||
Foreign currency, at value (Cost $752,124) | 752,809 | ||||||||||||||||||||||||||||||||
Cash held at broker for futures contracts | 975,178 | ||||||||||||||||||||||||||||||||
Receivable for investments sold | 2,148,911 | ||||||||||||||||||||||||||||||||
Receivable for fund shares sold | 2,647,194 | ||||||||||||||||||||||||||||||||
Dividends and interest receivable | 4,854,010 | ||||||||||||||||||||||||||||||||
Other receivables and prepaid expenses | 56,943 | ||||||||||||||||||||||||||||||||
Total assets | 1,656,297,394 | ||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Payable for investments purchased | 17,136,568 | ||||||||||||||||||||||||||||||||
Payable for fund shares repurchased | 1,118,605 | ||||||||||||||||||||||||||||||||
Payable upon return of securities loaned | 19,463,750 | ||||||||||||||||||||||||||||||||
Payable for futures variation margin | 664,084 | ||||||||||||||||||||||||||||||||
Payable to affiliates | |||||||||||||||||||||||||||||||||
Accounting and legal services fees | 42,725 | ||||||||||||||||||||||||||||||||
Transfer agent fees | 53,118 | ||||||||||||||||||||||||||||||||
Distribution and service fees | 497 | ||||||||||||||||||||||||||||||||
Trustees' fees | 990 | ||||||||||||||||||||||||||||||||
Other liabilities and accrued expenses | 469,044 | ||||||||||||||||||||||||||||||||
Total liabilities | 38,949,381 | ||||||||||||||||||||||||||||||||
Net assets | $1,617,348,013 | ||||||||||||||||||||||||||||||||
Net assets consist of | |||||||||||||||||||||||||||||||||
Paid-in capital | $2,021,325,565 | ||||||||||||||||||||||||||||||||
Undistributed net investment income | 1,516,160 | ||||||||||||||||||||||||||||||||
Accumulated net realized gain (loss) on investments, futures contracts and foreign currency transactions | (226,748,450 | ) | |||||||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) on investments, futures contracts and translation of assets and liabilities in foreign currencies | (178,745,262 | ) | |||||||||||||||||||||||||||||||
Net assets | $1,617,348,013 | ||||||||||||||||||||||||||||||||
STATEMENT OF ASSETS AND LIABILITIES (continued)
Net asset value per share | |||||||||||||||||||||
Based on net asset values and shares outstanding - The fund has an unlimited number of shares authorized with no par value | |||||||||||||||||||||
Class A ($109,854,026 ÷ 4,169,052 shares)1 | $26.35 | ||||||||||||||||||||
Class B ($1,677,725 ÷ 63,757 shares)1 | $26.31 | ||||||||||||||||||||
Class C ($9,873,095 ÷ 375,283 shares)1 | $26.31 | ||||||||||||||||||||
Class I ($514,099,720 ÷ 19,445,120 shares) | $26.44 | ||||||||||||||||||||
Class R1 ($774,429 ÷ 29,400 shares) | $26.34 | ||||||||||||||||||||
Class R2 ($206,996 ÷ 7,817 shares) | $26.48 | ||||||||||||||||||||
Class R3 ($419,253 ÷ 15,827 shares) | $26.49 | ||||||||||||||||||||
Class R4 ($67,236 ÷ 2,542 shares) | $26.45 | ||||||||||||||||||||
Class R5 ($120,435 ÷ 4,555 shares) | $26.44 | ||||||||||||||||||||
Class R6 ($994,124 ÷ 37,560 shares) | $26.47 | ||||||||||||||||||||
Class 1 ($35,664,528 ÷ 1,346,916 shares) | $26.48 | ||||||||||||||||||||
Class NAV ($943,596,446 ÷ 35,672,010 shares) | $26.45 | ||||||||||||||||||||
Maximum offering price per share | |||||||||||||||||||||
Class A (net assets value per share ÷ 95%)2 | $27.74 |
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. |
STATEMENT OF OPERATIONS For the year ended 2-29-16
Investment income | ||||||||||||||||||||||||
Dividends | $57,593,397 | |||||||||||||||||||||||
Securities lending | 1,436,454 | |||||||||||||||||||||||
Interest | 70,926 | |||||||||||||||||||||||
Less foreign taxes withheld | (5,519,245 | ) | ||||||||||||||||||||||
Total investment income | 53,581,532 | |||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Investment management fees | 14,707,625 | |||||||||||||||||||||||
Distribution and service fees | 523,034 | |||||||||||||||||||||||
Accounting and legal services fees | 232,781 | |||||||||||||||||||||||
Transfer agent fees | 766,886 | |||||||||||||||||||||||
Trustees' fees | 22,006 | |||||||||||||||||||||||
State registration fees | 199,669 | |||||||||||||||||||||||
Printing and postage | 117,384 | |||||||||||||||||||||||
Professional fees | 162,000 | |||||||||||||||||||||||
Custodian fees | 734,435 | |||||||||||||||||||||||
Registration and filing fees | 75,778 | |||||||||||||||||||||||
�� | Other | 79,713 | ||||||||||||||||||||||
Total expenses | 17,621,311 | |||||||||||||||||||||||
Less expense reductions | (153,727 | ) | ||||||||||||||||||||||
Net expenses | 17,467,584 | |||||||||||||||||||||||
Net investment income | 36,113,948 | |||||||||||||||||||||||
Realized and unrealized gain (loss) | ||||||||||||||||||||||||
Net realized gain (loss) on | ||||||||||||||||||||||||
Unaffiliated investments and foreign currency transactions | (160,648,729 | ) | ||||||||||||||||||||||
Affiliated investments | (1,286 | ) | ||||||||||||||||||||||
Futures contracts | (3,165,802 | ) | ||||||||||||||||||||||
(163,815,817 | ) | |||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of | ||||||||||||||||||||||||
Unaffiliated investments and translation of assets and liabilities in foreign currencies | (228,644,390 | ) | ||||||||||||||||||||||
Affiliated investments | 423 | |||||||||||||||||||||||
Futures contracts | (2,670,156 | ) | ||||||||||||||||||||||
(231,314,123 | ) | |||||||||||||||||||||||
Net realized and unrealized loss | (395,129,940 | ) | ||||||||||||||||||||||
Decrease in net assets from operations | ($359,015,992 | ) |
STATEMENTS OF CHANGES IN NET ASSETS
Year ended 2-29-16 | Year ended 2-28-15 | |||||||||||||||||||||||||||||||||||||||||||||||
Increase (decrease) in net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
From operations | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | $36,113,948 | $31,584,385 | ||||||||||||||||||||||||||||||||||||||||||||||
Net realized gain (loss) | (163,815,817 | ) | 121,544,541 | |||||||||||||||||||||||||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) | (231,314,123 | ) | (194,624,802 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Decrease in net assets resulting from operations | (359,015,992 | ) | (41,495,876 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Distributions to shareholders | ||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||||||||||||||||||||||||||
Class A | (1,992,429 | ) | (3,337,701 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class B | (14,681 | ) | (60,350 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class C | (95,480 | ) | (272,511 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class I | (10,632,399 | ) | (19,689,726 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R1 | (7,303 | ) | (12,379 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R2 | (2,902 | ) | (6,327 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R3 | (5,337 | ) | (5,356 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R4 | (1,628 | ) | (2,953 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R5 | (1,926 | ) | (4,261 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R6 | (3,901 | ) | (5,738 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | (806,576 | ) | (1,452,520 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class NAV | (21,651,850 | ) | (26,695,437 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (35,216,412 | ) | (51,545,259 | ) | ||||||||||||||||||||||||||||||||||||||||||||
From fund share transactions | 529,119,067 | 59,050,987 | ||||||||||||||||||||||||||||||||||||||||||||||
Total increase (decrease) | 134,886,663 | (33,990,148 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning of year | 1,482,461,350 | 1,516,451,498 | ||||||||||||||||||||||||||||||||||||||||||||||
End of year | $1,617,348,013 | $1,482,461,350 | ||||||||||||||||||||||||||||||||||||||||||||||
Undistributed net investment income | $1,516,160 | $574,279 |
Financial highlights
Class A Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.20 | $35.40 | $28.81 | $27.72 | $30.85 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.56 | 0.62 | 1.05 | 2 | 0.71 | 0.58 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (6.92 | ) | (1.77 | ) | 6.52 | 1.31 | (3.32 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.36 | ) | (1.15 | ) | 7.57 | 2.02 | (2.74 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.49 | ) | (1.05 | ) | (0.98 | ) | (0.93 | ) | (0.39 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.35 | $33.20 | $35.40 | $28.81 | $27.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3,4 | (19.28 | ) | (2.98 | ) | 26.56 | 7.41 | (8.73 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $110 | $112 | $109 | $91 | $374 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.40 | 1.47 | 1.46 | 1.58 | 1.58 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.39 | 1.47 | 1.46 | 1.58 | 1.58 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.81 | 1.81 | 3.27 | 2 | 2.66 | 2.05 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 | 42 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. |
Class B Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.12 | $35.27 | $28.70 | $27.61 | $30.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.37 | 0.34 | 0.73 | 2 | 0.42 | 0.44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (6.95 | ) | (1.74 | ) | 6.53 | 1.41 | (3.34 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.58 | ) | (1.40 | ) | 7.26 | 1.83 | (2.90 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.23 | ) | (0.75 | ) | (0.69 | ) | (0.74 | ) | (0.19 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.31 | $33.12 | $35.27 | $28.70 | $27.61 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3,4 | (19.92 | ) | (3.77 | ) | 25.50 | 6.71 | (9.38 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $2 | $3 | $3 | $3 | $4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.30 | 2.66 | 2.64 | 2.94 | 2.49 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 2.15 | 2.31 | 2.30 | 2.30 | 2.30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.18 | 1.02 | 2.28 | 2 | 1.56 | 1.58 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 | 42 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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. |
Class C Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.12 | $35.27 | $28.70 | $27.61 | $30.71 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.35 | 0.29 | 0.83 | 2 | 0.42 | 0.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (6.91 | ) | (1.68 | ) | 6.43 | 1.41 | (3.34 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.56 | ) | (1.39 | ) | 7.26 | 1.83 | (2.91 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.25 | ) | (0.76 | ) | (0.69 | ) | (0.74 | ) | (0.19 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.31 | $33.12 | $35.27 | $28.70 | $27.61 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3,4 | (19.89 | ) | (3.76 | ) | 25.50 | 6.71 | (9.41 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $10 | $12 | $8 | $4 | $4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.13 | 2.30 | 2.46 | 2.77 | 2.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 2.12 | 2.29 | 2.30 | 2.30 | 2.30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.14 | 0.86 | 2.59 | 2 | 1.54 | 1.53 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 | 42 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Class I Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.32 | $35.52 | $28.90 | $27.78 | $30.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.67 | 0.71 | 1.10 | 2 | 0.68 | 0.72 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (6.96 | ) | (1.76 | ) | 6.60 | 1.49 | (3.36 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.29 | ) | (1.05 | ) | 7.70 | 2.17 | (2.64 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.59 | ) | (1.15 | ) | (1.08 | ) | (1.05 | ) | (0.52 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.44 | $33.32 | $35.52 | $28.90 | $27.78 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3 | (19.03 | ) | (2.65 | ) | 26.94 | 7.92 | (8.33 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $514 | $541 | $527 | $392 | $411 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.08 | 1.14 | 1.15 | 1.17 | 1.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.08 | 1.13 | 1.15 | 1.17 | 1.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.15 | 2.08 | 3.42 | 2 | 2.49 | 2.54 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 | 42 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Does not reflect the effect of sales charges, if any. |
Class R1 Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.16 | $35.33 | $28.75 | $27.66 | $30.77 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.41 | 0.43 | 0.85 | 2 | 0.51 | 0.53 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (6.89 | ) | (1.70 | ) | 6.56 | 1.43 | (3.33 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.48 | ) | (1.27 | ) | 7.41 | 1.94 | (2.80 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | �� | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.34 | ) | (0.90 | ) | (0.83 | ) | (0.85 | ) | (0.31 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.34 | $33.16 | $35.33 | $28.75 | $27.66 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3 | (19.62 | ) | (3.38 | ) | 26.00 | 7.10 | (9.00 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1 | $1 | — | 4 | — | 4 | — | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.46 | 4.91 | 5.71 | 7.16 | 7.37 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.79 | 1.90 | 1.90 | 1.90 | 1.90 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.34 | 1.26 | 2.67 | 2 | 1.87 | 1.88 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 | 42 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Less than $500,000. |
Class R2 Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.34 | $35.53 | $28.91 | $27.80 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.63 | 0.51 | 0.94 | 3 | 0.59 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (7.06 | ) | (1.72 | ) | 6.60 | 1.43 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.43 | ) | (1.21 | ) | 7.54 | 2.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.43 | ) | (0.98 | ) | (0.92 | ) | (0.91 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.48 | $33.34 | $35.53 | $28.91 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | (19.41 | ) | (3.15 | ) | 26.32 | 7.39 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | — | 5 | — | 5 | — | 5 | — | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 3.61 | 8.98 | 15.89 | 20.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.54 | 1.65 | 1.65 | 1.65 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.03 | 1.51 | 2.94 | 3 | 2.16 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 |
1 | The inception date for Class R2 shares is 3-1-12. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | �� | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Less than $500,000. |
Class R3 Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.36 | $35.54 | $28.92 | $27.80 | $30.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.38 | 0.48 | 1.09 | 2 | 0.53 | 0.57 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (6.86 | ) | (1.73 | ) | 6.40 | 1.46 | (3.38 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.48 | ) | (1.25 | ) | 7.49 | 1.99 | (2.81 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.39 | ) | (0.93 | ) | (0.87 | ) | (0.87 | ) | (0.33 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.49 | $33.36 | $35.54 | $28.92 | $27.80 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3 | (19.54 | ) | (3.28 | ) | 26.12 | 7.28 | (8.95 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | — | 4 | — | 4 | — | 4 | — | 4 | — | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.96 | 9.34 | 18.96 | 47.36 | 45.66 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.67 | 1.80 | 1.80 | 1.80 | 1.80 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.27 | 1.40 | 3.36 | 2 | 1.93 | 2.01 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 | 42 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Less than $500,000. |
Class R4 Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.31 | $35.51 | $28.89 | $27.79 | $30.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.70 | 0.69 | 0.99 | 2 | 0.64 | 0.65 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (7.06 | ) | (1.82 | ) | 6.63 | 1.44 | (3.38 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.36 | ) | (1.13 | ) | 7.62 | 2.08 | (2.73 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.50 | ) | (1.07 | ) | (1.00 | ) | (0.98 | ) | (0.42 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.45 | $33.31 | $35.51 | $28.89 | $27.79 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3 | (19.21 | ) | (2.91 | ) | 26.66 | 7.61 | (8.67 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | — | 4 | — | 4 | — | 4 | — | 4 | — | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 4.41 | 15.63 | 21.10 | 42.45 | 42.74 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.31 | 1.40 | 1.40 | 1.43 | 1.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.22 | 2.01 | 3.05 | 2 | 2.34 | 2.29 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 | 42 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Less than $500,000. |
Class R5 Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.30 | $35.51 | $28.90 | $27.78 | $30.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.75 | 0.70 | 1.11 | 2 | 0.70 | 0.73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (7.04 | ) | (1.77 | ) | 6.57 | 1.45 | (3.38 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.29 | ) | (1.07 | ) | 7.68 | 2.15 | (2.65 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.57 | ) | (1.14 | ) | (1.07 | ) | (1.03 | ) | (0.51 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.44 | $33.30 | $35.51 | $28.90 | $27.78 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3 | (19.03 | ) | (2.72 | ) | 26.87 | 7.88 | (8.38 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | — | 4 | — | 4 | — | 4 | — | 4 | — | 4 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 4.06 | 12.76 | 16.15 | 21.14 | 20.87 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.10 | 1.20 | 1.20 | 1.20 | 1.20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.40 | 2.05 | 3.45 | 2 | 2.57 | 2.58 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 | 42 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Less than $500,000. |
Class R6 Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.36 | $35.57 | $28.94 | $27.82 | $28.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.65 | 0.76 | 1.13 | 3 | 0.73 | 0.26 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (6.92 | ) | (1.77 | ) | 6.60 | 1.45 | 0.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.27 | ) | (1.01 | ) | 7.73 | 2.18 | 0.36 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.62 | ) | (1.20 | ) | (1.10 | ) | (1.06 | ) | (0.54 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.47 | $33.36 | $35.57 | $28.94 | $27.82 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | (18.94 | ) | (2.51 | ) | 27.00 | 7.95 | 1.49 | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1 | — | 6 | — | 6 | — | 6 | — | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.89 | 11.51 | 14.17 | 21.97 | 16.83 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.97 | 1.00 | 1.12 | 1.12 | 1.12 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.18 | 2.22 | 3.50 | 3 | 2.66 | 1.98 | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 | 42 | 8 |
1 | The inception date for Class R6 shares is 9-1-11. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Less than $500,000. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | The portfolio turnover is shown for the period from 3-1-11 to 2-29-12. |
Class 1 Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.37 | $35.58 | $28.94 | $27.82 | $30.99 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.70 | 0.76 | 1.14 | 2 | 0.75 | 0.79 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (6.98 | ) | (1.78 | ) | 6.61 | 1.44 | (3.41 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.28 | ) | (1.02 | ) | 7.75 | 2.19 | (2.62 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.61 | ) | (1.19 | ) | (1.11 | ) | (1.07 | ) | (0.55 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.48 | $33.37 | $35.58 | $28.94 | $27.82 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3 | (18.98 | ) | (2.56 | ) | 27.09 | 8.00 | (8.27 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $36 | $42 | $44 | $37 | $39 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.02 | 1.06 | 1.06 | 1.08 | 1.07 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.01 | 1.05 | 1.06 | 1.08 | 1.07 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.25 | 2.20 | 3.53 | 2 | 2.76 | 2.76 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 | 42 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Class NAV Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $33.34 | $35.55 | $28.92 | $27.80 | $30.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.68 | 0.77 | 1.14 | 2 | 0.82 | 0.81 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (6.95 | ) | (1.78 | ) | 6.62 | 1.38 | (3.43 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (6.27 | ) | (1.01 | ) | 7.76 | 2.20 | (2.62 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.62 | ) | (1.20 | ) | (1.13 | ) | (1.08 | ) | (0.56 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.45 | $33.34 | $35.55 | $28.92 | $27.80 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3 | (18.96 | ) | (2.51 | ) | 27.14 | 8.06 | (8.24 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $944 | $771 | $823 | $611 | $753 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 0.97 | 1.01 | 1.01 | 1.03 | 1.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.96 | 1.00 | 1.00 | 1.03 | 1.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.20 | 2.25 | 3.54 | 2 | 3.03 | 2.84 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 70 | 81 | 47 | 53 | 42 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net investment income per share and ratio of net investment income to average net assets reflect a special dividend received by the fund which amounted to $0.24 and 0.77%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Note 1 — Organization
John Hancock International Core Fund (the fund) is a series of John Hancock Funds III (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 high total return.
The fund may offer multiple classes of shares. The shares currently offered are detailed in the Statement 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 plans. Class R6 shares are available only to certain retirement plans, institutions and other investors. Class 1 shares are offered only to certain affiliates of Manulife Financial Corporation (MFC). Class NAV shares are offered to John Hancock affiliated funds of funds and certain 529 plans. 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, state registration fees and printing and postage for each class may differ. Class B shares convert to Class A shares eight years after purchase.
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 NAV may be determined as of the regularly schedule close of the NYSE pursuant to the fund's Valuation Policies and Procedures. The time at which shares and transactions are priced and until which orders are accepted may vary to the extent permitted by the Securities and Exchange Commission and applicable regulations. 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 was acquired or most likely will be sold. 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, including John Hancock Collateral Trust (JHCT), are valued at their respective net asset values each business day. Futures contracts are valued at settlement prices, which are the official closing prices published by the exchange on which they trade. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rates supplied by an independent pricing vendor. Securities that trade only in the over-the-counter (OTC) market are valued using bid 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. Trading in foreign securities may be completed before the scheduled daily close of trading on the NYSE. Significant events at the issuer or market level may affect the values of securities between the time when the valuation of the securities is generally determined and the close of the NYSE. If a significant event occurs, these securities may be fair valued, as determined in good faith by the fund's Pricing Committee, following procedures established by the Board of Trustees. The fund uses fair value adjustment
factors provided by an independent pricing vendor to value certain foreign securities in order to adjust for events that may occur between the close of foreign exchanges or markets and the close of the NYSE.
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.
The following is a summary of the values by input classification of the fund's investments as of February 29, 2016, by major security category or type:
Total value at 2-29-16 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | ||||||||||||||
Common stocks | |||||||||||||||||
Australia | $56,236,548 | — | $56,236,548 | — | |||||||||||||
Austria | 6,989,337 | — | 6,989,337 | — | |||||||||||||
Belgium | 18,229,004 | — | 18,229,004 | — | |||||||||||||
Canada | 78,589,184 | $78,589,184 | — | — | |||||||||||||
China | 1,725,893 | — | 1,725,893 | — | |||||||||||||
Colombia | 222,060 | 222,060 | — | — | |||||||||||||
Denmark | 18,988,994 | — | 18,988,994 | — | |||||||||||||
Faroe Islands | 1,779,105 | — | 1,779,105 | — | |||||||||||||
Finland | 18,126,191 | — | 18,126,191 | — | |||||||||||||
France | 162,236,771 | — | 162,236,771 | — | |||||||||||||
Germany | 172,738,508 | — | 172,738,508 | — | |||||||||||||
Hong Kong | 64,557,812 | — | 64,557,812 | — | |||||||||||||
Isle of Man | 1,646,056 | — | 1,646,056 | — | |||||||||||||
Israel | 23,675,326 | 2,508,714 | 21,166,612 | — | |||||||||||||
Italy | 41,884,534 | — | 41,884,534 | — | |||||||||||||
Japan | 392,803,118 | — | 392,803,118 | — | |||||||||||||
Malta | 144,676 | — | — | $144,676 | |||||||||||||
Netherlands | 36,482,746 | — | 36,482,746 | — | |||||||||||||
New Zealand | 2,001,456 | — | 2,001,456 | — | |||||||||||||
Norway | 23,838,024 | — | 23,838,024 | — | |||||||||||||
Portugal | 1,788,014 | — | 1,788,014 | — | |||||||||||||
Singapore | 9,505,176 | — | 9,505,176 | — | |||||||||||||
Spain | 27,712,739 | — | 27,712,739 | — | |||||||||||||
Sweden | 22,577,672 | — | 22,577,672 | — | |||||||||||||
Switzerland | 64,495,736 | — | 64,495,736 | — | |||||||||||||
United Kingdom | 243,128,420 | — | 243,128,420 | — | |||||||||||||
Preferred securities | 10,169,450 | — | 10,169,450 | — | |||||||||||||
Securities lending collateral | 19,499,485 | 19,499,485 | — | — |
Total value at 2-29-16 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | ||||||||||||||
Short-term investments | 123,090,314 | 20,159,942 | 102,930,372 | — | |||||||||||||
Total investments in securities | $1,644,862,349 | $120,979,385 | $1,523,738,288 | $144,676 | |||||||||||||
Other financial instruments | |||||||||||||||||
Futures | ($2,670,156 | ) | ($684,212 | ) | ($1,985,944 | ) | — |
Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. 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. Foreign taxes are provided for based on the fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. 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 net asset value and is registered with the Securities and Exchange Commission as an investment company. JHCT invests cash received as collateral as part of the securities lending program 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 may receive 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. 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 February 29, 2016, the fund loaned common stocks value at $18,519,845 and received $19,463,750 of cash collateral.
Foreign currency translation. 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.
Funds that invest internationally generally carry more risk than funds that invest strictly in U.S. securities. These risks are heightened for investments in emerging markets. Risks can result from differences in economic and political conditions, regulations, market practices (including higher transaction costs), accounting standards and other factors. Foreign investments are also 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.
Foreign taxes. The fund may be subject to withholding tax on income and/or capital gains or repatriation taxes imposed by certain countries in which the fund invests. Taxes are accrued based upon investment income, realized gains or unrealized appreciation.
Line of credit. The fund may 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. (Citibank) as the administrative agent, that enables them to participate in a $750 million unsecured committed line of credit. Prior to June 30, 2015, the fund and other affiliated funds had an agreement with Citibank that enabled them to participate in a $300 million unsecured committed line of credit. A commitment fee, payable at the end of each calendar quarter, based on the average daily unused portion of the effective line of credit, is charged to each participating fund on a pro rata basis and is reflected in Other expenses on the Statement of operations. Commitment fees for the year ended February 29, 2016 were $3,155. For the year ended February 29, 2016, the fund had no borrowings under either line of credit.
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 calculated daily at the class level based on the net assets of each class and the specific expense rates applicable to each class. Through June 30, 2015, class-specific expenses, such as state registration fees and printing and postage, for all classes were calculated 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.
Under the Regulated Investment Company Modernization Act of 2010, the fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Any losses incurred during those taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
For federal income tax purposes, as of February 29, 2016, the fund has a capital loss carryforward of $182,553,975 available to offset future net realized capital gains. The following table details the capital loss carryforward available as of February 29, 2016:
Capital loss carryforward expiring February 28, | No expiration date | ||
2018 | 2019 | Short term | Long term |
$14,781,454 | $7,043,412 | $70,606,052 | $90,123,057 |
As of February 29, 2016, 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 typically declares and pays dividends and capital gain distributions, if any, at least annually. The tax character of distributions for the years ended February 29, 2016 and February 28, 2015 was as follows:
February 29, 2016 | February 28, 2015 | |
Ordinary Income | $35,216,412 | $51,545,259 |
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. As of February 29, 2016, the components of distributable earnings on a tax basis consisted of $3,580,233 of undistributed ordinary income.
Such distributions and distributable earnings 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.
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 foreign currency transactions, wash sale loss deferrals, derivative transactions and passive foreign investment companies.
Note 3 — Derivative Instruments
The fund may invest in derivatives in order to meet its investment objective. Derivatives include a variety of different instruments that may be traded in the OTC market, on a regulated exchange or through a clearing facility. The risks in using derivatives vary depending upon the structure of the instruments, including the use of leverage, optionality, the liquidity or lack of liquidity of the contract, the creditworthiness of the counterparty or clearing organization and the volatility of the position. Some derivatives involve risks that are potentially greater than the risks associated with investing directly in the referenced securities or other referenced underlying instrument. Specifically, the fund is exposed to the risk that the counterparty to an OTC derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction.
Futures are traded or cleared on an exchange. Exchange-traded derivatives generally present less counterparty risk to a fund than OTC transactions. The exchange stands between the fund and the broker to the contract and therefore, credit risk is generally limited to the failure of the exchange and the clearing member.
Margin requirements for exchange-traded derivatives are set by the broker. Margin for exchange-traded transactions is detailed in the Statement of assets and liabilities as Cash held at broker for futures contracts.
Futures. A futures contract is a contractual agreement to buy or sell a particular currency or financial instrument at a pre-determined price in the future. Risks related to the use of futures contracts include possible illiquidity of the futures markets, contract prices that can be highly volatile and imperfectly correlated to movements in the underlying financial instrument and potential losses in excess of the amounts recognized on the Statement of assets and liabilities. Use of long futures contracts subjects the fund to the risk of loss up to the notional value of the futures contracts. Use of short futures contracts subjects the fund to unlimited risk of loss.
Upon entering into a futures contract, the fund is required to deposit initial margin with the broker in the form of cash or securities. The amount of required margin is generally based on a percentage of the contract value; this amount is the initial margin for the trade. The margin deposit must then be maintained at the established level over the life of the contract.
Futures margin receivable / payable is included on the Statement of assets and liabilities. Futures contracts are marked-to-market daily and an appropriate payable or receivable for the change in value (variation margin) and unrealized gain or loss is recorded by the fund. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
During the year ended February 29, 2016, the fund used futures contracts to gain exposure to certain securities markets. The fund held futures contracts with notional values ranging up to $65.5 million, as measured at each quarter end. The following table summarizes the contracts held at February 29, 2016:
Open contracts | Number of contracts | Position | Expiration date | Notional basis | Notional value | Unrealized appreciation (depreciation) | ||||||||||||||
Euro Stoxx 50 Futures | 864 | Long | Mar 2016 | $28,472,052 | $27,398,285 | ($1,073,767 | ) | |||||||||||||
FTSE 100 Index Futures | 165 | Long | Mar 2016 | 13,481,990 | 13,841,288 | 359,298 | ||||||||||||||
Hang Seng Index Futures | 26 | Long | Mar 2016 | 3,200,425 | 3,186,128 | (14,297 | ) | |||||||||||||
SPI 200 Futures | 60 | Long | Mar 2016 | 5,175,125 | 5,205,382 | 30,257 | ||||||||||||||
Topix Index Futures | 139 | Long | Mar 2016 | 17,825,578 | 15,853,931 | (1,971,647 | ) | |||||||||||||
($2,670,156 | ) |
Notional basis refers to the contractual amount agreed upon at inception of open contracts; notional value represents the current value of the open contract.
Fair value of derivative instruments by risk category
The table below summarizes the fair value of derivatives held by the fund at February 29, 2016 by risk category:
Risk | Statement of assets and liabilities location | Financial instruments location | Asset derivatives fair value | Liability derivatives fair value | ||||||||||
Equity | Receivable/payable for futures | Futures† | $389,555 | ($3,059,711 | ) |
† Reflects cumulative appreciation/depreciation on futures as disclosed in Note 3. Only the period end variation margin is separately disclosed on the Statement of assets and liabilities.
Effect of derivative instruments on the Statement of operations
The table below summarizes the net realized gain (loss) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the year ended February 29, 2016:
Risk | Statement of operations location | Futures contracts | ||||||
Equity | Net realized gain (loss) | ($3,165,802 | ) |
The table below summarizes the net change in unrealized appreciation (depreciation) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the year ended February 29, 2016:
Risk | Statement of operations location | Futures contracts | ||||||
Equity | Change in unrealized appreciation (depreciation) | ($2,670,156 | ) |
Note 4 — 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 5 — 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 MFC.
Management fee. Effective July 1, 2015, the fund has an investment management agreement with the Advisor under which the fund pays a daily management fee to the Advisor, equivalent on an annual basis to the sum of: a) 0.920% of the first $100 million of the fund's aggregate average daily net assets (together with the assets of any other applicable fund identified in the advisory agreement); b) 0.890% of the next $900 million of the fund's aggregate average daily net assets; c) 0.860% of the next $1 billion of the fund's aggregate average daily net assets; d) 0.830% of the next $1 billion of the fund's aggregate average daily net assets; e) 0.800% of the next $1 billion of the fund's aggregate average daily net assets; and f) 0.780% of the fund's aggregate average daily net assets in excess of $4 billion. The Advisor has a subadvisory agreement with Grantham, Mayo, Van Otterloo & Co. LLC. The fund is not responsible for payment of the subadvisory fees.
Prior to July 1, 2015, the fund had an investment management agreement with the Advisor under which the fund paid a daily management fee to the Advisor, on an annual basis, equal to the sum of: a) 0.920% of the first $100 million of the fund's aggregate average daily net assets (together with the assets of any other applicable fund identified in the advisory agreement); b) 0.895% of the next $900 million of the fund's aggregate average daily net assets; c) 0.880% of the next $1 billion of the fund's aggregate average daily net assets; d) 0.850% of the next $1 billion of the fund's aggregate average daily net assets; e) 0.825% of the next $1 billion of the fund's aggregate average daily net assets; and f) 0.800% of the fund's aggregate average daily net assets in excess of $4 billion.
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 year ended February 29, 2016, this waiver amounted to 0.01% of the fund's average net assets. This arrangement may be amended or terminated at any time by the Advisor upon notice to the fund and with the approval of the Board of Trustees.
The Advisor has contractually agreed to waive all or a portion of its management fee and/or reimburse or pay operating expenses of the fund to the extent necessary to maintain the fund's total operating expenses at 1.38% and 1.08% for Class A and Class I shares, respectively, excluding certain expenses such as taxes, brokerage commissions, interest expense, litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the fund's business, acquired fund fees and short dividend expense. These expense limitations shall remain in effect until June 30, 2017, unless renewed by mutual agreement of the fund and the Advisor based upon a determination that this is appropriate under the circumstances at the time. Prior to July 1, 2015, Class C, Class R1, Class R2, Class R3, Class R4, Class R5, and Class R6 shares had fee waivers and/or reimbursement such that the expenses would not exceed 2.30%, 1.90%, 1.65%, 1.80%, 1.40%, 1.20%, and 1.12% for Class C, Class R1, Class R2, Class R3, Class R4, Class R5, and Class R6 shares, respectively.
Prior to July 1, 2015, the Advisor contractually agreed to waive and/or reimburse all class specific expenses for Class B shares of the fund, including Rule 12b-1 fees and transfer agency fees and service fees, as applicable, to the extent they exceed 1.30% of average annual net assets (on an annualized basis) attributable to Class B shares (the Class Expense Waiver).
The Advisor has contractually agreed to waive and/or reimburse all class specific expenses for Class R6 shares of the fund to the extent they exceed 0.00% of average annual net assets, on an annualized basis. The expense limitation expires on June 30, 2017, unless renewed by mutual agreement of the fund and the Advisor based upon a determination that this is appropriate under the circumstances at the time.
The expense reductions described above amounted to the following for the year ended February 29, 2016:
Class | Expense reductions | Class | Expense reductions | |
Class A | $9,264 | Class R4 | $3,427 | |
Class B | 3,134 | Class R5 | 3,446 | |
Class C | 905 | Class R6 | 4,690 | |
Class I | 40,955 | Class 1 | 3,102 | |
Class R1 | 3,683 | Class NAV | 72,876 | |
Class R2 | 4,733 | Total | $153,613 | |
Class R3 | 3,398 |
The investment management fees, including the impact of the waivers and reimbursements as described above, incurred for the year ended February 29, 2016, were equivalent to a net annual effective rate of 0.86% of the fund's average daily net assets.
Accounting and legal services. Pursuant to a service agreement, the fund reimburses the Advisor for all expenses associated with providing the administrative, financial, legal, 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 year ended February 29, 2016 amounted to an annual rate of 0.01% 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, Class R4, Class R5, and Class 1 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 | 0.30% | — | Class R3 | 0.50% | 0.15% | |
Class B | 1.00% | — | Class R4 | 0.25% | 0.10% | |
Class C | 1.00% | — | Class R5 | — | 0.05% | |
Class R1 | 0.50% | 0.25% | Class 1 | 0.05% | — | |
Class R2 | 0.25% | 0.25% |
The fund's Distributor has contractually agreed to waive 0.10% of Rule 12b-1 fees for Class R4 shares. The current waiver agreement expires on June 30, 2017, 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 $114 for Class R4 shares for the year ended February 29, 2016.
Sales charges. Class A shares are assessed up-front sales charges, which resulted in payments to the Distributor amounting to $1,084,698 for the year ended February 29, 2016. Of this amount, $187,019 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $893,949 was paid as sales commissions to broker-dealers and $3,730 was paid as sales commissions to sales personnel of Signator Investors, Inc., a broker-dealer affiliate of the Advisor.
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 year ended February 29, 2016, CDSCs received by the Distributor amounted to $842, $2,294 and $1,946 for Class A, Class B and Class C shares, respectively.
Transfer agent fees. The fund has a 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 year ended February 29, 2016 were:
Class | Distribution and service fees | Transfer agent fees | State registration fees | Printing and postage |
Class A | $354,550 | $148,232 | $6,253 | $6,127 |
Class B | 21,056 | 2,645 | 4,224 | 129 |
Class C | 119,652 | 15,018 | 4,500 | 500 |
Class I | — | 600,748 | 15,559 | 21,337 |
Class R1 | 4,114 | 88 | 3,964 | 39 |
Class R2 | 1,011 | 37 | 4,995 | 18 |
Class R3 | 1,686 | 42 | 3,513 | 17 |
Class R4 | 398 | 18 | 3,513 | 10 |
Class R5 | 52 | 19 | 3,513 | 12 |
Class R6 | — | 39 | 4,588 | 45 |
Class 1 | 20,515 | — | — | — |
Total | $523,034 | $766,886 | $54,622 | $28,234 |
Effective July 1, 2015, state registration fees and printing and postage are treated as fund level expenses and are not included in the table above. For the period July 1, 2015 to February 29, 2016, state registration fees and printing and postage amounted to $145,047 and $89,150, respectively.
Trustee expenses. The fund 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 each fund based on its net assets relative to other funds within the John Hancock group of funds complex.
Note 6 — Fund share transactions
Transactions in fund shares for the years ended February 29, 2016 and February 28, 2015 were as follows:
Year ended 2-29-16 | Year ended 2-28-15 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class A shares | ||||||||||||||||||||||||||
Sold | 1,583,670 | $49,216,049 | 1,241,454 | $42,456,199 | ||||||||||||||||||||||
Distributions reinvested | 68,179 | 1,969,684 | 107,972 | 3,280,189 | ||||||||||||||||||||||
Repurchased | (841,522 | ) | (25,518,279 | ) | (1,080,319 | ) | (37,612,136 | ) | ||||||||||||||||||
Net increase | 810,327 | $25,667,454 | 269,107 | $8,124,252 |
Year ended 2-29-16 | Year ended 2-28-15 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class B shares | ||||||||||||||||||||||||||
Sold | 7,938 | $237,284 | 9,074 | $315,452 | ||||||||||||||||||||||
Distributions reinvested | 470 | 13,566 | 1,872 | 56,821 | ||||||||||||||||||||||
Repurchased | (20,191 | ) | (623,641 | ) | (31,309 | ) | (1,037,633 | ) | ||||||||||||||||||
Net decrease | (11,783 | ) | ($372,791 | ) | (20,363 | ) | ($665,360 | ) | ||||||||||||||||||
Class C shares | ||||||||||||||||||||||||||
Sold | 113,119 | $3,583,881 | 231,098 | $7,958,404 | ||||||||||||||||||||||
Distributions reinvested | 3,220 | 93,021 | 8,342 | 253,168 | ||||||||||||||||||||||
Repurchased | (114,023 | ) | (3,480,866 | ) | (101,787 | ) | (3,421,510 | ) | ||||||||||||||||||
Net increase | 2,316 | $196,036 | 137,653 | $4,790,062 | ||||||||||||||||||||||
Class I shares | ||||||||||||||||||||||||||
Sold | 5,458,663 | $165,925,846 | 5,235,922 | $179,552,256 | ||||||||||||||||||||||
Distributions reinvested | 359,736 | 10,421,562 | 632,252 | 19,258,385 | ||||||||||||||||||||||
Repurchased | (2,622,108 | ) | (80,579,906 | ) | (4,446,623 | ) | (145,611,804 | ) | ||||||||||||||||||
Net increase | 3,196,291 | $95,767,502 | 1,421,551 | $53,198,837 | ||||||||||||||||||||||
Class R1 shares | ||||||||||||||||||||||||||
Sold | 23,630 | $693,551 | 3,746 | $124,458 | ||||||||||||||||||||||
Distributions reinvested | 88 | 2,532 | 246 | 7,481 | ||||||||||||||||||||||
Repurchased | (9,849 | ) | (300,069 | ) | (308 | ) | (10,445 | ) | ||||||||||||||||||
Net increase | 13,869 | $396,014 | 3,684 | $121,494 | ||||||||||||||||||||||
Class R2 shares | ||||||||||||||||||||||||||
Sold | 7,392 | $229,576 | 2,960 | $102,837 | ||||||||||||||||||||||
Distributions reinvested | 43 | 1,243 | 79 | 2,425 | ||||||||||||||||||||||
Repurchased | (6,046 | ) | (191,707 | ) | (1,674 | ) | (56,687 | ) | ||||||||||||||||||
Net increase | 1,389 | $39,112 | 1,365 | $48,575 | ||||||||||||||||||||||
Class R3 shares | ||||||||||||||||||||||||||
Sold | 11,784 | $346,556 | 1,076 | $38,435 | ||||||||||||||||||||||
Distributions reinvested | 184 | 5,337 | 143 | 4,360 | ||||||||||||||||||||||
Repurchased | (2,086 | ) | (60,970 | ) | (6 | ) | (192 | ) | ||||||||||||||||||
Net increase | 9,882 | $290,923 | 1,213 | $42,603 | ||||||||||||||||||||||
Class R4 shares | ||||||||||||||||||||||||||
Sold | 827 | $25,859 | 1,715 | $55,440 | ||||||||||||||||||||||
Distributions reinvested | 56 | 1,628 | 59 | 1,808 | ||||||||||||||||||||||
Repurchased | (2,577 | ) | (78,270 | ) | (777 | ) | (28,484 | ) | ||||||||||||||||||
Net increase (decrease) | (1,694 | ) | ($50,783 | ) | 997 | $28,764 | ||||||||||||||||||||
Class R5 shares | ||||||||||||||||||||||||||
Sold | 1,803 | $51,022 | 1,031 | $35,089 | ||||||||||||||||||||||
Distributions reinvested | 66 | 1,926 | 100 | 3,041 | ||||||||||||||||||||||
Repurchased | (1,411 | ) | (44,885 | ) | (390 | ) | (14,135 | ) | ||||||||||||||||||
Net increase | 458 | $8,063 | 741 | $23,995 |
Year ended 2-29-16 | Year ended 2-28-15 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class R6 shares | ||||||||||||||||||||||||||
Sold | 34,346 | $931,385 | 630 | $21,025 | ||||||||||||||||||||||
Distributions reinvested | 58 | 1,670 | 47 | 1,437 | ||||||||||||||||||||||
Repurchased | (1,919 | ) | (52,951 | ) | (53 | ) | (1,830 | ) | ||||||||||||||||||
Net increase | 32,485 | $880,104 | 624 | $20,632 | ||||||||||||||||||||||
Class 1 shares | ||||||||||||||||||||||||||
Sold | 233,717 | $7,392,774 | 162,098 | $5,543,589 | ||||||||||||||||||||||
Distributions reinvested | 27,803 | 806,576 | 47,624 | 1,452,520 | ||||||||||||||||||||||
Repurchased | (171,318 | ) | (5,247,321 | ) | (202,727 | ) | (6,836,578 | ) | ||||||||||||||||||
Net increase | 90,202 | $2,952,029 | 6,995 | $159,531 | ||||||||||||||||||||||
Class NAV shares | ||||||||||||||||||||||||||
Sold | 11,874,216 | $384,308,797 | 1,300,450 | $43,997,681 | ||||||||||||||||||||||
Distributions reinvested | 747,131 | 21,651,850 | 876,122 | 26,695,437 | ||||||||||||||||||||||
Repurchased | (90,064 | ) | (2,615,243 | ) | (2,193,503 | ) | (77,535,516 | ) | ||||||||||||||||||
Net increase (decrease) | 12,531,283 | $403,345,404 | (16,931 | ) | ($6,842,398 | ) | ||||||||||||||||||||
Total net increase | 16,675,025 | $529,119,067 | 1,806,636 | $59,050,987 |
Affiliates of the fund owned 9% and 100% of shares of beneficial interest of Class R6 and Class NAV, respectively, on February 29, 2016.
Note 7 — Purchase and sale of securities
Purchases and sales of securities, other than short-term investments, amounted to $1,571,773,879 and $1,126,285,692, respectively, for the year ended February 29, 2016.
Note 8 — Investment by affiliated funds
Certain investors in the fund are affiliated funds that are managed by the Advisor and its affiliates. The affiliated funds do not invest in the fund for the purpose of exercising management or control; however, this investment may represent a significant portion of the fund's net assets. At February 29, 2016, funds within the John Hancock group of funds complex held 58.3% of the fund's net assets. The following funds had an affiliate ownership of 5% or more of the fund's net assets:
Fund | Affiliate concentration |
John Hancock Funds II Lifestyle Growth Portfolio | 24.3% |
John Hancock Funds II Lifestyle Balanced Portfolio | 16.1% |
John Hancock Funds II Lifestyle Aggressive Portfolio | 9.0% |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock International Core Fund:
In our opinion, the accompanying statement of assets and liabilities, including the fund's investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock International Core Fund (the "Fund") at February 29, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at February 29, 2016 by correspondence with the custodian, transfer agent, and brokers, and the application of alternative auditing procedures where securities purchased confirmations had not been received, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
April 14, 2016
Unaudited
For federal income tax purposes, the following information is furnished with respect to the distributions of the fund, if any, paid during its taxable year ended February 29, 2016.
The fund reports the maximum amount allowable of its net taxable income as eligible for the corporate dividends-received deduction.
The fund reports the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003.
Income derived from foreign sources was $45,917,274. The fund intends to pass through foreign tax credits of $3,841,364.
Eligible shareholders will be mailed a 2016 Form 1099-DIV in early 2017. This will reflect the tax character of all distributions paid in calendar year 2016.
Please consult a tax advisor regarding the tax consequences of your investment in the fund.
This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the fund and execute policies formulated by the Trustees.
Independent Trustees
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
James M. Oates, Born: 1946 | 2012 | 228 |
Trustee and Chairperson of the Board Managing Director, Wydown Group (financial consulting firm) (since 1994); Chairman and Director, Emerson Investment Management, Inc. (since 2000); Independent Chairman, Hudson Castle Group, Inc. (formerly IBEX Capital Markets, Inc.) (financial services company) (1997-2011); Director, Stifel Financial (since 1996); Director, Investor Financial Services Corporation (1995-2007); Director, Connecticut River Bancorp (1998-2014); Director, Virtus Funds (formerly Phoenix Mutual Funds) (since 1988). Trustee and Chairperson of the Board, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee and Chairperson of the Board, John Hancock retail funds3 (since 2012); Trustee (2005-2006 and since 2012) and Chairperson of the Board (since 2012), John Hancock Funds III; Trustee (since 2004) and Chairperson of the Board (since 2005), John Hancock Variable Insurance Trust; Trustee and Chairperson of the Board, John Hancock Funds II (since 2005). |
Charles L. Bardelis,2 Born: 1941 | 2012 | 228 |
Trustee Director, Island Commuter Corp. (marine transport). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Funds III (2005-2006 and since 2012); Trustee, John Hancock Variable Insurance Trust (since 1988); Trustee, John Hancock Funds II (since 2005). |
Peter S. Burgess,2 Born: 1942 | 2012 | 228 |
Trustee Consultant (financial, accounting, and auditing matters) (since 1999); Certified Public Accountant; Partner, Arthur Andersen (independent public accounting firm) (prior to 1999); Director, Lincoln Educational Services Corporation (since 2004); Director, Symetra Financial Corporation (2010-2016); Director, PMA Capital Corporation (2004-2010). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Funds III (2005-2006 and since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2005). |
William H. Cunningham, Born: 1944 | 1994 | 228 |
Trustee Professor, University of Texas, Austin, Texas (since 1971); former Chancellor, University of Texas System and former President of the University of Texas, Austin, Texas; Chairman (since 2009) and Director (since 2006), Lincoln National Corporation (insurance); Director, Southwest Airlines (since 2000); former Director, LIN Television (2009-2014). Trustee, John Hancock retail funds3 (since 1986); Trustee, John Hancock Variable Insurance Trust (since 2012); Trustee, John Hancock Funds II (2005-2006 and since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Grace K. Fey, Born: 1946 | 2012 | 228 |
Trustee Chief Executive Officer, Grace Fey Advisors (since 2007); Director and Executive Vice President, Frontier Capital Management Company (1988-2007); Director, Fiduciary Trust (since 2009). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2008). |
Independent Trustees (continued)
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
Theron S. Hoffman,2 Born: 1947 | 2012 | 228 |
Trustee Chief Executive Officer, T. Hoffman Associates, LLC (consulting firm) (since 2003); Director, The Todd Organization (consulting firm) (2003-2010); President, Westport Resources Management (investment management consulting firm) (2006-2008); Senior Managing Director, Partner, and Operating Head, Putnam Investments (2000-2003); Executive Vice President, The Thomson Corp. (financial and legal information publishing) (1997-2000). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2008). |
Deborah C. Jackson, Born: 1952 | 2008 | 228 |
Trustee President, Cambridge College, Cambridge, Massachusetts (since 2011); Chief Executive Officer, American Red Cross of Massachusetts Bay (2002-2011); Board of Directors of Eastern Bank Corporation (since 2001); Board of Directors of Eastern Bank Charitable Foundation (since 2001); Board of Directors of American Student Assistance Corporation (1996-2009); Board of Directors of Boston Stock Exchange (2002-2008); Board of Directors of Harvard Pilgrim Healthcare (health benefits company) (2007-2011). Trustee, John Hancock retail funds3 (since 2008); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Hassell H. McClellan, Born: 1945 | 2012 | 228 |
Trustee Trustee, Virtus Variable Insurance Trust (formerly Phoenix Edge Series Funds) (since 2008); Director, The Barnes Group (since 2010); Associate Professor, The Wallace E. Carroll School of Management, Boston College (retired 2013). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Funds III (2005-2006 and since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2005). |
Steven R. Pruchansky, Born: 1944 | 1994 | 228 |
Trustee and Vice Chairperson of the Board Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and President, Greenscapes of Southwest Florida, Inc. (until 2000); Member, Board of Advisors, First American Bank (until 2010); Managing Director, Jon James, LLC (real estate) (since 2000); Partner, Right Funding, LLC (since 2014); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty Trust (until 1994); President, Maxwell Building Corp. (until 1991). Trustee (since 1992) and Chairperson of the Board (2011-2012), John Hancock retail funds3; Trustee and Vice Chairperson of the Board, John Hancock retail funds3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2012); Trustee, and Vice Chairperson of the Board, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Independent Trustees (continued)
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
Gregory A. Russo, Born: 1949 | 2009 | 228 |
Trustee Director and Audit Committee Chairman (since 2012), and Member, Audit Committee and Finance Committee (since 2011), NCH Healthcare System, Inc. (holding company for multi-entity healthcare system); Director and Member (since 2012) and Finance Committee Chairman (since 2014), The Moorings, Inc. (nonprofit continuing care community); Vice Chairman, Risk & Regulatory Matters, KPMG LLP (KPMG) (2002-2006); Vice Chairman, Industrial Markets, KPMG (1998-2002); Chairman and Treasurer, Westchester County, New York, Chamber of Commerce (1986-1992); Director, Treasurer, and Chairman of Audit and Finance Committees, Putnam Hospital Center (1989-1995); Director and Chairman of Fundraising Campaign, United Way of Westchester and Putnam Counties, New York (1990-1995). Trustee, John Hancock retail funds3 (since 2008); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Non-Independent Trustees4
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
James R. Boyle, Born: 1959 | 2015 | 228 |
Non-Independent Trustee* Chairman and Chief Executive Officer, Zillion Group, Inc. (formerly HealthFleet, Inc.) (healthcare) (since 2014); Executive Vice President and Chief Executive Officer, U.S. Life Insurance Division of Genworth Financial, Inc. (insurance) (January 2014-July 2014); Senior Executive Vice President, Manulife Financial Corporation, President and Chief Executive Officer, John Hancock (1999-2012); Chairman and Director, John Hancock Advisers, LLC, John Hancock Funds, LLC, and John Hancock Investment Management Services, LLC (2005-2010). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (2005-2010; 2012-2014 and since 2015); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (2005-2014 and since 2015). *Effective 3-10-15. |
Craig Bromley, Born: 1966 | 2012 | 228 |
Non-Independent Trustee President, John Hancock Financial Service (since 2012); Senior Executive Vice President and General Manager, U.S. Division, Manulife Financial Corporation (since 2012); President and Chief Executive Officer, Manulife Insurance Company (Manulife Japan) (2005-2012, including prior positions). Trustee, John Hancock retail funds,3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Warren A. Thomson, Born: 1955 | 2012 | 228 |
Non-Independent Trustee Senior Executive Vice President and Chief Investment Officer, Manulife Financial Corporation and The Manufacturers Life Insurance Company (since 2009); Chairman, Manulife Asset Management (since 2001, including prior positions); Director and Chairman, Manulife Asset Management Limited (since 2006); Director and Chairman, Hancock Natural Resources Group, Inc. (since 2013). Trustee, John Hancock retail funds,3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Principal officers who are not Trustees
Name, year of birth Position(s) held with fund Principal occupation(s) during past 5 years | Officer of the Trust since |
Andrew G. Arnott, Born: 1971 | 2007 |
President Senior Vice President, John Hancock Financial Services (since 2009); Director and Executive Vice President, John Hancock Advisers, LLC (since 2005, including prior positions); Director and Executive Vice President, John Hancock Investment Management Services, LLC (since 2006, including prior positions); President, John Hancock Funds, LLC (since 2004, including prior positions); President, John Hancock retail funds,3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2007, including prior positions); President, John Hancock Collateral Trust (since 2015); President, John Hancock Exchange-Traded Fund Trust (since 2014). |
John J. Danello, Born: 1955 | 2014 |
Senior Vice President, Secretary, and Chief Legal Officer Vice President and Chief Counsel, John Hancock Wealth Management (since 2005); Senior Vice President (since 2007) and Chief Legal Counsel (2007-2010), John Hancock Funds, LLC and The Berkeley Financial Group, LLC; Senior Vice President (since 2006, including prior positions) and Chief Legal Officer and Secretary (since 2014), John Hancock retail funds,3 John Hancock Funds II and John Hancock Variable Insurance Trust; Senior Vice President, Chief Legal Officer and Secretary, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Vice President, John Hancock Life & Health Insurance Company (since 2009); Vice President, John Hancock Life Insurance Company (USA) and John Hancock Life Insurance Company of New York (since 2010); and Senior Vice President, Secretary, and Chief Legal Counsel (2007-2014, including prior positions) of John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC. |
Francis V. Knox, Jr., Born: 1947 | 2005 |
Chief Compliance Officer Vice President, John Hancock Financial Services (since 2005); Chief Compliance Officer, John Hancock retail funds,3 John Hancock Variable Insurance Trust, John Hancock Funds II, John Hancock Advisers, LLC, and John Hancock Investment Management Services, LLC (since 2005); Chief Compliance Officer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Charles A. Rizzo, Born: 1957 | 2007 |
Chief Financial Officer Vice President, John Hancock Financial Services (since 2008); Senior Vice President, John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC (since 2008); Chief Financial Officer, John Hancock retail funds,3 John Hancock Variable Insurance Trust and John Hancock Funds II (since 2007); Chief Financial Officer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Salvatore Schiavone, Born: 1965 | 2010 |
Treasurer Assistant Vice President, John Hancock Financial Services (since 2007); Vice President, John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC (since 2007); Treasurer, John Hancock retail funds3 (since 2007, including prior positions); Treasurer, John Hancock Variable Insurance Trust and John Hancock Funds II (2007-2009 and since 2010, including prior positions); Treasurer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.
The Statement of Additional Information of the fund includes additional information about members of the Board of Trustees of the Trust and is available without charge, upon request, by calling 800-225-5291.
1 | Each Trustee holds office until his or her successor is elected and qualified, or until the Trustee's death, retirement, resignation, or removal. Mr. Boyle has served as Trustee at various times prior to the date listed in the table. |
2 | Member of the Audit Committee. |
3 | "John Hancock retail funds" comprises John Hancock Funds III and 36 other John Hancock funds consisting of 26 series of other John Hancock trusts and 10 closed-end funds. |
4 | The Trustee is a Non-Independent Trustee due to current or former positions with the Advisor and certain affiliates. |
Trustees James M. Oates, Chairperson Officers Andrew G. Arnott John J. Danello Francis V. Knox, Jr. Charles A. Rizzo Salvatore Schiavone | Investment advisor John Hancock Advisers, LLC Subadvisor Grantham, Mayo, Van Otterloo & Co. LLC Principal distributor John Hancock Funds, LLC Custodian Citibank, N.A. Transfer agent John Hancock Signature Services, Inc. Legal counsel K&L Gates LLP Independent registered public accounting firm PricewaterhouseCoopers, LLP |
*Member of the Audit Committee
†Non-Independent Trustee
The fund's proxy voting policies and procedures, as well as the fund proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.
The fund's complete list of portfolio holdings, for the first and third fiscal quarters, is filed with the SEC on Form N-Q. The fund's Form N-Q is available on our website and the SEC's website, sec.gov, and can be reviewed and copied (for a fee) at the SEC's Public Reference Room in Washington, DC. Call 800-SEC-0330 to receive information on the operation of the SEC's Public Reference Room.
We make this information on your fund, as well as monthly 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 Balanced Blue Chip Growth Classic Value Disciplined Value Disciplined Value Mid Cap Equity Income Fundamental All Cap Core Fundamental Large Cap Core Fundamental Large Cap Value New Opportunities Select Growth Small Cap Equity Small Cap Value Small Company Strategic Growth U.S. Equity U.S. Global Leaders Growth Value Equity GLOBAL AND INTERNATIONAL EQUITY FUNDS Disciplined Value International Emerging Markets Emerging Markets Equity Global Equity Global Shareholder Yield Greater China Opportunities International Core International Growth International Small Company International Value Equity | INCOME FUNDS Bond California Tax-Free Income Core High Yield Emerging Markets Debt Floating Rate Income Focused High Yield Global Income Government Income 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 Enduring Assets Financial Industries Global Absolute Return Strategies Global Conservative Absolute Return Global Real Estate Natural Resources Redwood Regional Bank Seaport Technical Opportunities |
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 Income Allocation Fund Lifestyle Aggressive Portfolio Lifestyle Balanced Portfolio Lifestyle Conservative Portfolio Lifestyle Growth Portfolio Lifestyle Moderate Portfolio Retirement Choices Portfolios (2010-2055) Retirement Living Portfolios (2010-2055) Retirement Living II Portfolios (2010-2055) EXCHANGE-TRADED FUNDS John Hancock Multifactor Consumer Discretionary ETF John Hancock Multifactor Financials ETF John Hancock Multifactor Healthcare ETF John Hancock Multifactor Large Cap ETF John Hancock Multifactor Mid Cap ETF John Hancock Multifactor Technology ETF 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 |
"As an investment firm,
upholding the proud
tradition of John Hancock
comes down to one thing:
putting shareholders
first. We believe that if
our shareholders are
successful, then we will
be successful."
Andrew G. Arnott
President and Chief Executive Officer
John Hancock Investments
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 Investments
A trusted brand
John Hancock Investments 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 build funds based on investor needs, then search the world to find
proven portfolio teams with specialized expertise in those strategies.
As a manager of managers, we apply vigorous oversight to ensure that
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 601 Congress Street n Boston, MA 02210-2805 800-225-5291 n jhinvestments.com | |
This report is for the information of the shareholders of John Hancock International Core Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus. | ||
MF279520 | 66A 2/16 4/16 |
John Hancock
International Growth Fund
Annual report 2/29/16
A message to shareholders
Dear shareholder,
The period covered by this report was a challenging one for investors in global equities. Oil prices hit multi-year lows before rebounding in February. Concerns about slowing global growth added to negative investor psychology, and stock prices fell around the world. The investment landscape improved after the close of the period as stocks and other so-called risk assets regained much of the ground lost earlier in the year.
Despite the recent increase in volatility, the economic picture offers reasons for optimism. In December, the U.S. Federal Reserve raised short-term interest rates for the first time in nine years on evidence that the persistent strength in the labor markets warranted a somewhat less accommodative stance. Central banks outside of the United States continued to stimulate growth and to signal that they will take action to support economies and markets.
Volatile market environments are naturally unsettling. At John Hancock Investments, portfolio risk management is a critical part of our role as an asset manager, and our dedicated risk team is focused on these issues every day. We continually strive for new ways to analyze potential risks and have liquidity tools in place, such as a credit facility and an interfund lending program. However, your best resource in times like these is your financial advisor, who can ensure your portfolio is sufficiently diversified to meet your long-term objectives and to withstand the inevitable bumps along the way.
On behalf of everyone at John Hancock Investments, I'd like to take this opportunity to thank you for the continued trust you've placed in us.
Sincerely,
Andrew G. Arnott
President and Chief Executive Officer
John Hancock Investments
This commentary reflects the CEO's views as of February 29, 2016. They are subject to change at any time. All investments entail risks, including the possible loss of principal. For more up-to-date information, you can visit our website at jhinvestments.com.
John Hancock
International Growth Fund
INVESTMENT OBJECTIVE
The fund seeks high total return primarily through capital appreciation.
AVERAGE ANNUAL TOTAL RETURNS AS OF 2/29/16 (%)
The MSCI AC World ex-USA Growth Index (gross of foreign withholding tax on dividends) is a free float-adjusted market capitalization index that is designed to measure the equity performance of growth-oriented stocks in developed (excluding the U.S.) and emerging markets.
The MSCI EAFE Growth Index (gross of foreign withholding tax on dividends) is a free float-adjusted market capitalization index that is designed to measure the performance of growth-oriented developed market stocks within Europe, Australasia, and the Far East.
The MSCI EAFE Index (gross of foreign withholding tax on dividends) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Figures from Morningstar, Inc. include reinvested distributions and do not take into account sales charges. Actual load-adjusted performance is lower. Since-inception returns for the Morningstar fund category average are not available.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. 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.
PERFORMANCE HIGHLIGHTS OVER THE LAST TWELVE MONTHS
Fund and benchmark declined amid a challenging economic environment
Most developed-market stocks outside the United States as represented by the fund's benchmark, the MSCI AC World ex-USA Growth Index, declined as a slowdown in China's GDP growth and falling oil prices accentuated concerns about the outlook for the global economy.
Contribution from stock picking helped the fund outperform on a relative basis
The fund posted a negative overall return, but it outperformed its benchmark, largely as a result of our effective stock picking in the consumer discretionary, healthcare, and financials sectors.
Sector allocations in consumer staples, information technology detracted
The fund's sector allocations in consumer staples and information technology detracted from relative performance.
SECTOR COMPOSITION AS OF 2/29/16 (%)
A note about risks
Foreign investing, especially in emerging markets, has additional risks, such as currency and market volatility and political and social instability. Growth stocks may be subject to greater price fluctuations because their prices tend to place greater emphasis on earnings expectations. The value of a company's equity securities is subject to changes in the company's financial condition, and overall market and economic conditions. 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. Hedging, derivatives, and other strategic transactions may increase a fund's volatility and could produce disproportionate losses, potentially more than the fund's principal investment. Actively trading securities can increase transaction costs (thus lowering performance) and taxable distributions. A higher portfolio turnover rate may indicate higher transaction costs and may result in higher taxes when fund shares are held in a taxable account. Please see the fund's prospectuses for additional risks.
![johnaboselli.jpg](https://capedge.com/proxy/N-CSR/0001145443-16-001766/johnaboselli.jpg)
John A. Boselli, CFA
Portfolio Manager
Wellington Management Company LLP
Can you describe the market environment during the 12-month period and the factors underlying the generally negative returns for international stocks?
The performance of the fund's benchmark, the MSCI AC World ex-USA Growth Index, was negative overall. However, in the early months of the period, most stocks in developed markets outside the United States rose. Accommodative monetary policies were a key catalyst, as the European Central Bank, the Bank of Japan, and the People's Bank of China expanded their economic stimulus initiatives. Signs of a modest economic rebound across much of Europe also lifted investor sentiment.
However, this momentum faded over the late spring and summer of 2015 as worries about a slowdown in China's economic growth dominated the market narrative. These fears were amplified when China devalued its currency, triggering concerns about disinflationary trends against a backdrop of weakening global growth. Selling reached a peak after Chinese manufacturing data fell to the weakest level in six years. Although stocks rebounded in the fall, they took another steep dive entering 2016 amid further signs of slower growth in China and additional weakening in crude oil prices. Oil fell below $30 a barrel at one point in January, the lowest level in nearly 13 years, amid a global supply glut and concerns of weakening demand. Further expansion of accommodative monetary policies in Europe and Japan, including Japan's introduction of negative interest rates, helped to offset these headwinds somewhat in early 2016. However, the benchmark's overall return for the period remained negative.
Although its overall return was negative, the fund outperformed relative to its benchmark. At the sector level, what key factors had the most significant impact on this result?
Our security selection contributed to relative performance in seven of the ten sectors, led by strong stock picking in the consumer discretionary, healthcare, and financials sectors. While sector allocations are typically by-products of our bottom-up approach to managing the fund, relative results were hindered by the fund's allocations in consumer staples and information technology. An underweight in consumer staples detracted, as this sector outperformed relative to the broad
Which equity positions had the biggest positive impact on the fund's performance?
Top contributors to relative returns during the period included Ono Pharmaceutical Company, Ltd., Pandora A/S, and DSV A/S. Shares of Japan-based Ono Pharmaceutical were supported by positive expectations for Opdivo, a drug that Ono codeveloped and that was approved in the United States to treat melanoma and lung cancer. Shares of Pandora, a Denmark-based jewelry maker, rose as the company continued to expand its store footprint across a number of geographies, adding to its already significant reach. Another Danish company, the global freight transportation and logistics services provider DSV, saw its shares rise on the heels of its October 2015 announcement of plans to acquire UTi Worldwide, a U.S.-based air and sea freight company that was not held in the fund during the period. The market reacted favorably to the acquisition, as it appeared that DSV could realize cost savings from integrating UTi into its existing operations.
Which positions had the biggest negative impact on the fund's relative results?
A position in India-based ICICI Bank, Ltd. was the largest detractor from relative performance. Its shares dropped amid persistent concerns over asset quality in the banking sector and negative sentiment among foreign investors toward India's equity market. A position in China-based
TOP 10 HOLDINGS AS OF 2/29/16 (%)
Roche Holding AG | 3.6 |
British American Tobacco PLC | 2.7 |
Taiwan Semiconductor Manufacturing Company, Ltd. | 2.6 |
Novo Nordisk A/S, B Shares | 2.6 |
Tencent Holdings, Ltd. | 2.5 |
Anheuser-Busch InBev NV | 2.4 |
Novartis AG | 2.3 |
Unilever NV | 2.2 |
Reckitt Benckiser Group PLC | 2.1 |
Compass Group PLC | 2.0 |
TOTAL | 25.0 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
TOP 10 COUNTRIES AS OF 2/29/16 (%)
United Kingdom | 32.8 |
Switzerland | 12.1 |
Japan | 10.7 |
Denmark | 5.7 |
India | 5.0 |
United States | 4.2 |
China | 3.9 |
Australia | 3.3 |
Germany | 3.1 |
Ireland | 2.9 |
TOTAL | 83.7 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
How was the fund positioned at the end of the period?
We maintained our emphasis on companies that we view as high quality by focusing on those that generate substantial free cash flows and return that cash to shareholders in the form of dividend payouts or share repurchases.
Around the world, there appeared to be higher stress in the credit system. Despite positive economic indicators in the United States, we observed rising yields in the high-yield corporate debt market. In the emerging markets, spreads for credit default swaps increased, and expanding credit pressures in China were a further cause for concern. We saw several indicators of potential economic instability in China, including excess investment, high inventory, capital outflows, and currency weakness.
The fund continued to be underweight in Japan, a market that exports a large volume of products to China and the broader Pacific Rim, and, as a result, is vulnerable to the slowdown in China's economic growth.
At the sector level, the fund's most significant overweight positions were in healthcare and
information technology. Within financials, the fund was underweight in banks. It also was underweight in energy and commodities stocks, as well as in cyclical industrials.
Among the positions that we initiated during the period was Unilever NV, a Netherlands-based multinational consumer goods company that, in our view, generates strong returns on capital and possesses an attractive dividend yield. We also added U.K.-based global liquor manufacturer Diageo PLC. We view Diageo as a high-quality company that generates strong free cash flows and possesses improving businesses in the United States and the emerging markets.
MANAGED BY
![]() | John A. Boselli, CFA On the fund since 2014 Investing since 1996 |
TOTAL RETURNS FOR THE PERIOD ENDED FEBRUARY 29, 2016
Average annual total returns (%) with maximum sales charge | Cumulative total returns (%) with maximum sales charge | ||||||
1-year | 5-year | Since inception1 | 5-year | Since inception1 | |||
Class A | -12.47 | 4.20 | 4.06 | 22.86 | 47.21 | ||
Class B | -13.16 | 4.17 | 3.83 | 22.67 | 44.06 | ||
Class C | -9.43 | 4.49 | 3.82 | 24.58 | 43.97 | ||
Class I2 | -7.59 | 5.64 | 5.02 | 31.56 | 61.04 | ||
Class R22,3 | -8.03 | 5.23 | 4.59 | 29.05 | 54.65 | ||
Class R42,3 | -7.81 | 5.29 | 4.61 | 29.38 | 55.03 | ||
Class R62,3 | -7.46 | 5.37 | 4.65 | 29.86 | 55.62 | ||
Class 12 | -7.49 | 5.72 | 5.07 | 32.09 | 61.81 | ||
Class NAV2,3 | -7.60 | 5.33 | 4.64 | 29.66 | 55.37 | ||
Index 1† | -13.31 | 0.55 | 2.94 | 2.77 | 32.58 | ||
Index 2† | -10.15 | 2.53 | 3.20 | 13.31 | 35.87 | ||
Index 3† | -14.80 | 1.01 | 2.02 | 5.15 | 21.47 |
Performance figures assume all distributions have been reinvested. Figures reflect maximum sales charges on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares' CDSC declines annually between years 1 to 6 according to the following schedule: 5%, 4%, 3%, 3%, 2%, and 1%. No sales charge will be assessed after the sixth year. Class C shares sold within one year of purchase are subject to a 1% CDSC. Sales charges are not applicable to Class I, Class R2, Class R4, Class R6, Class 1, and Class NAV shares.
The expense ratios of the fund, both net (including any fee waivers and/or expense limitations) and gross (excluding any fee waivers and/or expense limitations), are set forth according to the most recent publicly available prospectuses for the fund and may differ from those disclosed in the Financial highlights tables in this report. Had the fee waivers and expense limitations not been in place, gross expenses would apply. The expense ratios are as follows:
Class A | Class B | Class C | Class I | Class R2* | Class R4* | Class R6* | Class 1 | Class NAV* | |
Gross (%) | 1.45 | 2.15 | 2.15 | 1.14 | 1.54 | 1.39 | 1.04 | 1.07 | 1.02 |
Net (%) | 1.35 | 2.05 | 2.05 | 1.05 | 1.45 | 1.20 | 1.02 | 1.07 | 1.02 |
* | Expenses have been estimated for the first year of operations of the fund's Class R2, Class R4, Class R6 and Class NAV shares. |
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 MSCI AC World ex-USA Growth Index; Index 2 is the MSCI EAFE Growth Index; Index 3 is the MSCI EAFE Index. |
See the following page for footnotes.
This chart and table show what happened to a hypothetical $10,000 investment in John Hancock International Growth Fund for the share classes and periods indicated, assuming all distributions were reinvested. For comparison, we've shown the same investment in three separate indexes.
Start date | With maximum sales charge ($) | Without sales charge ($) | Index 1 ($) | Index 2 ($) | Index 3 ($) | |
Class B4 | 6-12-06 | 14,406 | 14,406 | 13,258 | 13,587 | 12,147 |
Class C4 | 6-12-06 | 14,397 | 14,397 | 13,258 | 13,587 | 12,147 |
Class I2 | 6-12-06 | 16,104 | 16,104 | 13,258 | 13,587 | 12,147 |
Class R22,3 | 6-12-06 | 15,465 | 15,465 | 13,258 | 13,587 | 12,147 |
Class R42,3 | 6-12-06 | 15,503 | 15,503 | 13,258 | 13,587 | 12,147 |
Class R62,3 | 6-12-06 | 15,562 | 15,562 | 13,258 | 13,587 | 12,147 |
Class 12 | 6-12-06 | 16,181 | 16,181 | 13,258 | 13,587 | 12,147 |
Class NAV2,3 | 6-12-06 | 15,537 | 15,537 | 13,258 | 13,587 | 12,147 |
The MSCI AC World ex-USA Growth Index (gross of foreign withholding tax on dividends) is a free float-adjusted market capitalization index that is designed to measure the equity performance of growth-oriented stocks in developed (excluding the U.S.) and emerging markets.
The MSCI EAFE Growth Index (gross of foreign withholding tax on dividends) is a free float-adjusted market capitalization index that is designed to measure the performance of growth-oriented developed market stocks within Europe, Australasia, and the Far East.
The MSCI EAFE Index (gross of foreign withholding tax on dividends) is a free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. and Canada.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Footnotes related to performance pages
1 | From 6-12-06. |
2 | For certain types of investors, as described in the fund's prospectuses. |
3 | Class R2, Class R4, and Class R6 shares were first offered on 3-27-15. Class NAV shares were first offered on 6-2-15. The returns prior to these dates are those of Class A shares and may be higher or lower than if adjusted to reflect the expenses of any other share classes. |
4 | The contingent deferred sales charge is not applicable. |
These examples are intended to help you understand your ongoing operating expenses of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds.
Understanding fund expenses
As a shareholder of the fund, you incur two types of costs:
• | Transaction costs, which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc. |
• | Ongoing operating expenses, including management fees, distribution and service fees (if applicable), and other fund expenses. |
We are presenting only your ongoing operating expenses here.
Actual expenses/actual returns
This example is intended to provide information about the fund's actual ongoing operating expenses, and is based on the fund's actual return. It assumes an account value of $1,000.00 on September 1, 2015, with the same investment held until February 29, 2016.
Beginning Account value on 9-1-2015 | Ending value on 2-29-2016 | Expenses paid during period ended 2-29-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $949.90 | $6.55 | 1.35% |
Class B | 1,000.00 | 946.20 | 9.93 | 2.05% |
Class C | 1,000.00 | 946.60 | 9.93 | 2.05% |
Class I | 1,000.00 | 951.30 | 5.08 | 1.05% |
Class R2 | 1,000.00 | 949.00 | 7.06 | 1.46% |
Class R4 | 1,000.00 | 950.50 | 5.87 | 1.21% |
Class R6 | 1,000.00 | 951.80 | 4.56 | 0.94% |
Class 1 | 1,000.00 | 951.40 | 4.77 | 0.98% |
Class NAV | 1,000.00 | 952.00 | 4.51 | 0.93% |
Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2016, by $1,000.00, then multiply it by the "expenses paid" for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:
Hypothetical example for comparison purposes
This table allows you to compare the fund's ongoing operating expenses with those of any other fund. It provides an example of the fund's hypothetical account values and hypothetical expenses based on each class's actual expense ratio and an assumed 5% annualized return before expenses (which is not the fund's actual return). It assumes an account value of $1,000.00 on September 1, 2015, with the same investment held until February 29, 2016. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses. Please remember that these hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Beginning Account value on 9-1-2015 | Ending value on 2-29-2016 | Expenses paid during period ended 2-29-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $1,018.10 | $6.78 | 1.35% |
Class B | 1,000.00 | 1,014.70 | 10.28 | 2.05% |
Class C | 1,000.00 | 1,014.70 | 10.28 | 2.05% |
Class I | 1,000.00 | 1,019.70 | 5.26 | 1.05% |
Class R2 | 1,000.00 | 1,017.60 | 7.31 | 1.46% |
Class R4 | 1,000.00 | 1,018.80 | 6.08 | 1.21% |
Class R6 | 1,000.00 | 1,020.20 | 4.72 | 0.94% |
Class 1 | 1,000.00 | 1,020.00 | 4.94 | 0.98% |
Class NAV | 1,000.00 | 1,020.20 | 4.67 | 0.93% |
Remember, these examples do not include any transaction costs, therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectuses for details regarding transaction costs.
1 | Expenses are equal to the fund's annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Fund's investments
As of 2-29-16 | ||||||||||||||
Shares | Value | |||||||||||||
Common stocks 96.6% | $1,960,719,303 | |||||||||||||
(Cost $2,025,441,720) | ||||||||||||||
Australia 3.3% | 66,805,177 | |||||||||||||
Amcor, Ltd. | 3,509,927 | 34,997,971 | ||||||||||||
CSL, Ltd. | 434,969 | 31,807,206 | ||||||||||||
Belgium 2.4% | 48,817,734 | |||||||||||||
Anheuser-Busch InBev NV | 436,351 | 48,817,734 | ||||||||||||
China 3.9% | 79,942,712 | |||||||||||||
New Oriental Education & Technology Group, Inc., ADR | 927,205 | 28,863,892 | ||||||||||||
Tencent Holdings, Ltd. | 2,791,570 | 51,078,820 | ||||||||||||
Denmark 5.7% | 116,484,903 | |||||||||||||
DSV A/S | 733,089 | 29,978,158 | ||||||||||||
Novo Nordisk A/S, B Shares | 1,029,198 | 52,987,920 | ||||||||||||
Pandora A/S | 265,521 | 33,518,825 | ||||||||||||
Finland 1.3% | 25,499,172 | |||||||||||||
Sampo OYJ, A Shares | 566,858 | 25,499,172 | ||||||||||||
Germany 3.1% | 62,081,543 | |||||||||||||
ProSiebenSat.1 Media SE | 672,108 | 34,353,598 | ||||||||||||
United Internet AG | 569,405 | 27,727,945 | ||||||||||||
Hong Kong 1.0% | 20,461,801 | |||||||||||||
Guangdong Investment, Ltd. | 16,855,897 | 20,461,801 | ||||||||||||
India 5.0% | 101,788,667 | |||||||||||||
Bharti Infratel, Ltd. | 5,035,107 | 26,073,367 | ||||||||||||
HCL Technologies, Ltd. | 1,860,249 | 22,146,361 | ||||||||||||
HDFC Bank, Ltd. | 1,018,783 | 16,570,225 | ||||||||||||
HDFC Bank, Ltd., ADR | 189,405 | 10,004,372 | ||||||||||||
Sun Pharmaceutical Industries, Ltd. | 2,158,036 | 26,994,342 | ||||||||||||
Ireland 2.9% | 59,322,312 | |||||||||||||
ICON PLC (I) | 418,177 | 29,757,475 | ||||||||||||
Medtronic PLC | 382,024 | 29,564,837 | ||||||||||||
Israel 1.6% | 31,396,971 | |||||||||||||
Check Point Software Technologies, Ltd. (I)(L) | 377,958 | 31,396,971 | ||||||||||||
Japan 10.7% | 216,780,533 | |||||||||||||
Astellas Pharma, Inc. | 2,598,090 | 37,380,995 | ||||||||||||
Fuji Heavy Industries, Ltd. | 892,400 | 29,196,502 | ||||||||||||
Hoya Corp. | 705,119 | 25,480,737 | ||||||||||||
Japan Tobacco, Inc. | 918,006 | 36,504,422 |
Shares | Value | |||||||||||||
Japan (continued) | ||||||||||||||
Nippon Telegraph & Telephone Corp. | 487,400 | $20,640,084 | ||||||||||||
NTT DOCOMO, Inc. | 1,336,000 | 31,097,677 | ||||||||||||
Ono Pharmaceutical Company, Ltd. | 197,020 | 36,480,116 | ||||||||||||
Jordan 1.1% | 22,199,236 | |||||||||||||
Hikma Pharmaceuticals PLC | 851,781 | 22,199,236 | ||||||||||||
Netherlands 1.6% | 32,143,848 | |||||||||||||
ASML Holding NV | 352,848 | 32,143,848 | ||||||||||||
Singapore 1.3% | 26,750,460 | |||||||||||||
Broadcom, Ltd. | 199,675 | 26,750,460 | ||||||||||||
South Korea 1.4% | 28,055,570 | |||||||||||||
LG Household & Health Care, Ltd. | 39,967 | 28,055,570 | ||||||||||||
Switzerland 12.1% | 245,060,497 | |||||||||||||
Actelion, Ltd. (I) | 253,811 | 35,157,698 | ||||||||||||
Julius Baer Group, Ltd. (I) | 516,512 | 20,608,653 | ||||||||||||
Novartis AG | 643,720 | 45,851,184 | ||||||||||||
Partners Group Holding AG | 92,353 | 33,428,191 | ||||||||||||
Roche Holding AG | 281,301 | 72,129,894 | ||||||||||||
UBS Group AG | 2,479,865 | 37,884,877 | ||||||||||||
Taiwan 2.6% | 53,092,233 | |||||||||||||
Taiwan Semiconductor Manufacturing Company, Ltd. | 11,867,000 | 53,092,233 | ||||||||||||
United Kingdom 32.8% | 666,549,592 | |||||||||||||
Admiral Group PLC | 1,075,442 | 25,824,568 | ||||||||||||
Aon PLC | 301,964 | 28,774,150 | ||||||||||||
ARM Holdings PLC | 2,265,547 | 31,132,072 | ||||||||||||
AstraZeneca PLC | 490,769 | 27,903,426 | ||||||||||||
BAE Systems PLC | 4,142,378 | 29,366,699 | ||||||||||||
Booker Group PLC | 8,829,226 | 20,334,119 | ||||||||||||
British American Tobacco PLC | 1,002,275 | 54,527,882 | ||||||||||||
Compass Group PLC | 2,310,512 | 40,508,732 | ||||||||||||
Diageo PLC | 1,375,694 | 35,355,771 | ||||||||||||
IG Group Holdings PLC | 2,683,614 | 28,290,203 | ||||||||||||
Imperial Tobacco Group PLC | 597,353 | 30,832,789 | ||||||||||||
Next PLC | 315,960 | 29,603,741 | ||||||||||||
Persimmon PLC (I) | 1,028,261 | 31,075,417 | ||||||||||||
Reckitt Benckiser Group PLC | 476,334 | 43,389,052 | ||||||||||||
Sky PLC | 2,139,982 | 30,906,080 | ||||||||||||
Smith & Nephew PLC | 2,017,784 | 32,744,352 | ||||||||||||
St. James's Place PLC | 2,172,925 | 25,813,209 | ||||||||||||
The Sage Group PLC | 2,793,878 | 23,054,091 | ||||||||||||
Unilever NV | 1,008,215 | 43,956,634 |
Shares | Value | |||||||||||||
United Kingdom (continued) | ||||||||||||||
Worldpay Group PLC (I)(S) | 6,079,696 | $24,276,125 | ||||||||||||
WPP PLC | 1,371,189 | 28,880,480 | ||||||||||||
United States 2.8% | 57,486,342 | |||||||||||||
Allergan PLC (I) | 97,290 | 28,224,802 | ||||||||||||
Amdocs, Ltd. | 515,531 | 29,261,540 | ||||||||||||
Yield (%) | Shares | Value | ||||||||||||
Securities lending collateral 1.4% | $28,332,326 | |||||||||||||
(Cost $28,331,119) | ||||||||||||||
John Hancock Collateral Trust (W) | 0.4639(Y | ) | 2,831,732 | 28,332,326 | ||||||||||
Total investments (Cost $2,053,772,839)† 98.0% | $1,989,051,629 | |||||||||||||
Other assets and liabilities, net 2.0% | $41,355,589 | |||||||||||||
Total net assets 100.0% | $2,030,407,218 |
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund. | ||||||||||||||
Key to Security Abbreviations and Legend | ||||||||||||||
ADR | American Depositary Receipts | |||||||||||||
(I) | Non-income producing security. | |||||||||||||
(L) | A portion of this security is on loan as of 2-29-16. | |||||||||||||
(S) | These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. | |||||||||||||
(W) | Investment is an affiliate of the fund, the advisor and/or subadvisor. This security represents the investment of cash collateral received for securities lending. | |||||||||||||
(Y) | The rate shown is the annualized seven-day yield as of 2-29-16. | |||||||||||||
† | At 2-29-16, the aggregate cost of investment securities for federal income tax purposes was $2,056,837,192. Net unrealized depreciation aggregated to $67,785,563, of which $50,552,533 related to appreciated investment securities and $118,338,096 related to depreciated investment securities. |
Financial statements
STATEMENT OF ASSETS AND LIABILITIES 2-29-16
Assets | |||||||||||||||||||||||||||||||||
Unaffiliated investments, at value (Cost $2,025,441,720) including $27,853,882 of securities loaned | $1,960,719,303 | ||||||||||||||||||||||||||||||||
Affiliated investments, at value (Cost $28,331,119) | 28,332,326 | ||||||||||||||||||||||||||||||||
Total investments, at value (Cost $2,053,772,839) | 1,989,051,629 | ||||||||||||||||||||||||||||||||
Cash | 32,829,191 | ||||||||||||||||||||||||||||||||
Foreign currency, at value (Cost $734) | 728 | ||||||||||||||||||||||||||||||||
Receivable for investments sold | 9,874,766 | ||||||||||||||||||||||||||||||||
Receivable for fund shares sold | 26,753,550 | ||||||||||||||||||||||||||||||||
Dividends and interest receivable | 3,471,686 | ||||||||||||||||||||||||||||||||
Receivable for securities lending income | 8,235 | ||||||||||||||||||||||||||||||||
Receivable due from advisor | 28,662 | ||||||||||||||||||||||||||||||||
Other receivables and prepaid expenses | 122,668 | ||||||||||||||||||||||||||||||||
Total assets | 2,062,141,115 | ||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Payable for investments purchased | 70,250 | ||||||||||||||||||||||||||||||||
Payable for fund shares repurchased | 2,676,768 | ||||||||||||||||||||||||||||||||
Payable upon return of securities loaned | 28,332,850 | ||||||||||||||||||||||||||||||||
Payable to affiliates | |||||||||||||||||||||||||||||||||
Accounting and legal services fees | 37,499 | ||||||||||||||||||||||||||||||||
Transfer agent fees | 159,916 | ||||||||||||||||||||||||||||||||
Distribution and service fees | 741 | ||||||||||||||||||||||||||||||||
Trustees' fees | 495 | ||||||||||||||||||||||||||||||||
Other liabilities and accrued expenses | 455,378 | ||||||||||||||||||||||||||||||||
Total liabilities | 31,733,897 | ||||||||||||||||||||||||||||||||
Net assets | $2,030,407,218 | ||||||||||||||||||||||||||||||||
Net assets consist of | |||||||||||||||||||||||||||||||||
Paid-in capital | $2,185,320,037 | ||||||||||||||||||||||||||||||||
Undistributed net investment income | 1,301,675 | ||||||||||||||||||||||||||||||||
Accumulated net realized gain (loss) on investments and foreign currency transactions | (91,424,904 | ) | |||||||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | (64,789,590 | ) | |||||||||||||||||||||||||||||||
Net assets | $2,030,407,218 | ||||||||||||||||||||||||||||||||
STATEMENT OF ASSETS AND LIABILITIES (continued)
Net asset value per share | |||||||||||||||||||||
Based on net asset values and shares outstanding - The fund has an unlimited number of shares authorized with no par value | |||||||||||||||||||||
Class A ($615,495,396 ÷ 30,921,653 shares)1 | $19.90 | ||||||||||||||||||||
Class B ($1,989,609 ÷ 100,976 shares)1 | $19.70 | ||||||||||||||||||||
Class C ($113,414,278 ÷ 5,768,775 shares)1 | $19.66 | ||||||||||||||||||||
Class I ($1,168,359,842 ÷ 58,601,825 shares) | $19.94 | ||||||||||||||||||||
Class R2 ($1,273,914 ÷ 63,951 shares) | $19.92 | ||||||||||||||||||||
Class R4 ($2,740,936 ÷ 137,476 shares) | $19.94 | ||||||||||||||||||||
Class R6 ($2,446,437 ÷ 122,637 shares) | $19.95 | ||||||||||||||||||||
Class 1 ($38,768,086 ÷ 1,945,311 shares) | $19.93 | ||||||||||||||||||||
Class NAV ($85,918,720 ÷ 4,311,726 shares) | $19.93 | ||||||||||||||||||||
Maximum offering price per share | |||||||||||||||||||||
Class A (net assets value per share ÷ 95%)2 | $20.95 |
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. |
STATEMENT OF OPERATIONS For the year ended 2-29-16
Investment income | ||||||||||||||||||||||||
Dividends | $22,626,148 | |||||||||||||||||||||||
Securities lending | 91,821 | |||||||||||||||||||||||
Interest | 1,513 | |||||||||||||||||||||||
Less foreign taxes withheld | (1,174,208 | ) | ||||||||||||||||||||||
Total investment income | 21,545,274 | |||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Investment management fees | 10,230,329 | |||||||||||||||||||||||
Distribution and service fees | 1,848,121 | |||||||||||||||||||||||
Accounting and legal services fees | 157,553 | |||||||||||||||||||||||
Transfer agent fees | 1,266,144 | |||||||||||||||||||||||
Trustees' fees | 11,905 | |||||||||||||||||||||||
State registration fees | 136,699 | |||||||||||||||||||||||
Printing and postage | 102,048 | |||||||||||||||||||||||
Professional fees | 101,340 | |||||||||||||||||||||||
Custodian fees | 333,640 | |||||||||||||||||||||||
Registration and filing fees | 288,090 | |||||||||||||||||||||||
Other | 47,544 | |||||||||||||||||||||||
Total expenses | 14,523,413 | |||||||||||||||||||||||
Less expense reductions | (132,570 | ) | ||||||||||||||||||||||
Net expenses | 14,390,843 | |||||||||||||||||||||||
Net investment income | 7,154,431 | |||||||||||||||||||||||
Realized and unrealized gain (loss) | ||||||||||||||||||||||||
Net realized gain (loss) on | ||||||||||||||||||||||||
Unaffiliated investments and foreign currency transactions | (90,877,231 | ) | ||||||||||||||||||||||
Affiliated investments | (1,743 | ) | ||||||||||||||||||||||
(90,878,974 | ) | |||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of | ||||||||||||||||||||||||
Unaffiliated investments and translation of assets and liabilities in foreign currencies | (85,974,772 | ) | ||||||||||||||||||||||
Affiliated investments | 1,239 | |||||||||||||||||||||||
(85,973,533 | ) | |||||||||||||||||||||||
Net realized and unrealized loss | (176,852,507 | ) | ||||||||||||||||||||||
Decrease in net assets from operations | ($169,698,076 | ) |
STATEMENTS OF CHANGES IN NET ASSETS
Year ended 2-29-16 | Year ended 2-28-15 | |||||||||||||||||||||||||||||||||||||||||||||||
Increase (decrease) in net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
From operations | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | $7,154,431 | $4,894,445 | ||||||||||||||||||||||||||||||||||||||||||||||
Net realized gain (loss) | (90,878,974 | ) | 53,662,737 | |||||||||||||||||||||||||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) | (85,973,533 | ) | (41,189,146 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Increase (decrease) in net assets resulting from operations | (169,698,076 | ) | 17,368,036 | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to shareholders | ||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||||||||||||||||||||||||||
Class A | (818,693 | ) | (2,076,485 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class B | — | (18,824 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class C | — | (111,601 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class I | (4,166,349 | ) | (3,224,326 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R41 | (3,401 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Class R61 | (8,167 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
Class 1 | (188,512 | ) | (377,806 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class NAV2 | (514,934 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | ||||||||||||||||||||||||||||||||||||||||||||||||
Class A | — | (15,751,297 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class B | — | (246,055 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class C | — | (1,372,983 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class I | — | (20,794,947 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class 1 | — | (2,333,810 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (5,700,056 | ) | (46,308,134 | ) | ||||||||||||||||||||||||||||||||||||||||||||
From fund share transactions | 1,878,340,204 | (88,615,950 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Total increase (decrease) | 1,702,942,072 | (117,556,048 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning of year | 327,465,146 | 445,021,194 | ||||||||||||||||||||||||||||||||||||||||||||||
End of year | $2,030,407,218 | $327,465,146 | ||||||||||||||||||||||||||||||||||||||||||||||
Undistributed (accumulated distributions in excess of) net investment income | $1,301,675 | ($35,771 | ) |
1 | The inception date for Class R4 and Class R6 shares is 3-27-15. | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | The inception date for Class NAV shares is 6-2-15. |
Financial highlights
Class A Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $21.64 | $24.60 | $21.28 | $19.98 | $20.99 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.10 | 0.24 | 0.25 | 0.23 | 0.30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.81 | ) | 0.83 | 3.94 | 2.65 | (1.12 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.71 | ) | 1.07 | 4.19 | 2.88 | (0.82 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.03 | ) | (0.47 | ) | (0.15 | ) | (0.42 | ) | (0.19 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (3.56 | ) | (0.72 | ) | (1.16 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.03 | ) | (4.03 | ) | (0.87 | ) | (1.58 | ) | (0.19 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $19.90 | $21.64 | $24.60 | $21.28 | $19.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)2,3 | (7.86 | ) | 5.91 | 19.95 | 14.82 | (3.80 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $615 | $140 | $130 | $73 | $49 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.38 | 1.53 | 1.56 | 1.68 | 1.66 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.37 | 1.52 | 1.55 | 1.60 | 1.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.48 | 1.02 | 1.09 | 1.13 | 1.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 82 | 204 | 42 | 61 | 55 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Class B Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $21.55 | $24.50 | $21.22 | $19.94 | $20.93 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.02 | — | 2 | 0.10 | 0.10 | 0.12 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.87 | ) | 0.88 | 3.90 | 2.62 | (1.06 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.85 | ) | 0.88 | 4.00 | 2.72 | (0.94 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | — | (0.27 | ) | — | (0.28 | ) | (0.05 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (3.56 | ) | (0.72 | ) | (1.16 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | — | (3.83 | ) | (0.72 | ) | (1.44 | ) | (0.05 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $19.70 | $21.55 | $24.50 | $21.22 | $19.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3,4 | (8.58 | ) | 5.07 | 19.07 | 14.00 | (4.47 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $2 | $2 | $2 | $1 | $1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.32 | 3.18 | 3.29 | 3.92 | 4.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 2.12 | 2.34 | 2.30 | 2.30 | 2.33 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.07 | — | 5 | 0.46 | 0.47 | 0.63 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 82 | 204 | 42 | 61 | 55 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Less than $0.005 per share. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Less than 0.005%. |
Class C Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $21.49 | $24.45 | $21.18 | $19.91 | $20.91 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss)1 | (0.07 | ) | (0.03 | ) | 0.07 | 0.10 | 0.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.76 | ) | 0.92 | 3.92 | 2.61 | (1.05 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.83 | ) | 0.89 | 3.99 | 2.71 | (0.95 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | — | (0.29 | ) | — | (0.28 | ) | (0.05 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (3.56 | ) | (0.72 | ) | (1.16 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | — | (3.85 | ) | (0.72 | ) | (1.44 | ) | (0.05 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $19.66 | $21.49 | $24.45 | $21.18 | $19.91 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)2,3 | (8.52 | ) | 5.11 | 19.05 | 13.97 | (4.52 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $113 | $13 | $7 | $2 | $2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.08 | 2.40 | 2.62 | 3.32 | 3.34 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 2.07 | 2.30 | 2.30 | 2.30 | 2.33 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | (0.33 | ) | (0.11 | ) | 0.32 | 0.48 | 0.52 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 82 | 204 | 42 | 61 | 55 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Class I Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $21.67 | $24.62 | $21.31 | $20.01 | $21.04 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.16 | 0.35 | 0.31 | 0.43 | 0.37 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.80 | ) | 0.81 | 3.95 | 2.53 | (1.12 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.64 | ) | 1.16 | 4.26 | 2.96 | (0.75 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.09 | ) | (0.55 | ) | (0.23 | ) | (0.50 | ) | (0.28 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (3.56 | ) | (0.72 | ) | (1.16 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.09 | ) | (4.11 | ) | (0.95 | ) | (1.66 | ) | (0.28 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $19.94 | $21.67 | $24.62 | $21.31 | $20.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)2 | (7.59 | ) | 6.33 | 20.31 | 15.23 | (3.42 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | �� | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1,168 | $152 | $290 | $79 | $162 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.06 | 1.19 | 1.21 | 1.27 | 1.20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.06 | 1.18 | 1.21 | 1.25 | 1.20 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.73 | 1.46 | 1.33 | 2.09 | 1.88 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 82 | 204 | 42 | 61 | 55 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Class R2 Shares Period ended | 2-29-16 | 1 | |||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||
Net asset value, beginning of period | $21.46 | ||||||||||||||||||||||||||||
Net investment income | 0.02 | ||||||||||||||||||||||||||||
Net realized and unrealized loss on investments | (1.56 | ) | |||||||||||||||||||||||||||
Total from investment operations | (1.54 | ) | |||||||||||||||||||||||||||
Net asset value, end of period | $19.92 | ||||||||||||||||||||||||||||
Total return (%)2 | (7.18 | ) 3 | |||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1 | ||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||
Expenses before reductions | 1.90 | 4 | |||||||||||||||||||||||||||
Expenses including reductions | 1.52 | 4 | |||||||||||||||||||||||||||
Net investment income | 0.11 | 4 | |||||||||||||||||||||||||||
Portfolio turnover (%) | 82 | 5 |
1 | The inception date for Class R2 shares is 3-27-15. | |||||||||||||||||||||||||||||||||||||
2 | Total returns would have been lower had certain expenses not been reduced during the applicable period. | |||||||||||||||||||||||||||||||||||||
3 | Not annualized. | |||||||||||||||||||||||||||||||||||||
4 | Annualized. | |||||||||||||||||||||||||||||||||||||
5 | The portfolio turnover is shown for the period from 3-1-15 to 2-29-16. |
Class R4 Shares Period ended | 2-29-16 | 1 | |||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||
Net asset value, beginning of period | $21.46 | ||||||||||||||||||||||||||||
Net investment income | 0.05 | ||||||||||||||||||||||||||||
Net realized and unrealized loss on investments | (1.54 | ) | |||||||||||||||||||||||||||
Total from investment operations | (1.49 | ) | |||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||
From net investment income | (0.03 | ) | |||||||||||||||||||||||||||
Total distributions | (0.03 | ) | |||||||||||||||||||||||||||
Net asset value, end of period | $19.94 | ||||||||||||||||||||||||||||
Total return (%)2 | (6.95 | ) 3 | |||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $3 | ||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||
Expenses before reductions | 1.66 | 4 | |||||||||||||||||||||||||||
Expenses including reductions | 1.24 | 4 | |||||||||||||||||||||||||||
Net investment income | 0.24 | 4 | |||||||||||||||||||||||||||
Portfolio turnover (%) | 82 | 5 |
1 | The inception date for Class R4 shares is 3-27-15. | |||||||||||||||||||||||||||||||||||||
2 | Total returns would have been lower had certain expenses not been reduced during the applicable period. | |||||||||||||||||||||||||||||||||||||
3 | Not annualized. | |||||||||||||||||||||||||||||||||||||
4 | Annualized. | |||||||||||||||||||||||||||||||||||||
5 | The portfolio turnover is shown for the period from 3-1-15 to 2-29-16. |
Class R6 Shares Period ended | 2-29-16 | 1 | |||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||
Net asset value, beginning of period | $21.46 | ||||||||||||||||||||||||||||
Net investment income2 | 0.12 | ||||||||||||||||||||||||||||
Net realized and unrealized loss on investments | (1.53 | ) | |||||||||||||||||||||||||||
Total from investment operations | (1.41 | ) | |||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||
From net investment income | (0.10 | ) | |||||||||||||||||||||||||||
Total distributions | (0.10 | ) | |||||||||||||||||||||||||||
Net asset value, end of period | $19.95 | ||||||||||||||||||||||||||||
Total return (%)3 | (6.59 | ) 4 | |||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $2 | ||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||
Expenses before reductions | 1.37 | 5 | |||||||||||||||||||||||||||
Expenses including reductions | 0.95 | 5 | |||||||||||||||||||||||||||
Net investment income | 0.60 | 5 | |||||||||||||||||||||||||||
Portfolio turnover (%) | 82 | 6 |
1 | The inception date for Class R6 shares is 3-27-15. | |||||||||||||||||||||||||||||||||||||
2 | Based on average daily shares outstanding. | |||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable period. | |||||||||||||||||||||||||||||||||||||
4 | Not annualized. | |||||||||||||||||||||||||||||||||||||
5 | Annualized. | |||||||||||||||||||||||||||||||||||||
6 | The portfolio turnover is shown for the period from 3-1-15 to 2-29-16. |
Class 1 Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $21.65 | $24.61 | $21.30 | $20.00 | $21.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.23 | 0.28 | 0.37 | 0.34 | 0.36 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.84 | ) | 0.90 | 3.92 | 2.63 | (1.09 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.61 | ) | 1.18 | 4.29 | 2.97 | (0.73 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.11 | ) | (0.58 | ) | (0.26 | ) | (0.51 | ) | (0.29 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (3.56 | ) | (0.72 | ) | (1.16 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.11 | ) | (4.14 | ) | (0.98 | ) | (1.67 | ) | (0.29 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $19.93 | $21.65 | $24.61 | $21.30 | $20.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)2 | (7.49 | ) | 6.39 | 20.43 | 15.29 | (3.33 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $39 | $20 | $16 | $11 | $9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.00 | 1.10 | 1.12 | 1.19 | 1.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.99 | 1.09 | 1.12 | 1.15 | 1.14 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.06 | 1.18 | 1.59 | 1.68 | 1.83 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 82 | 204 | 42 | 61 | 55 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Class NAV Shares Period ended | 2-29-16 | 1 | |||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||
Net asset value, beginning of period | $22.66 | ||||||||||||||||||||||||||||
Net investment income2 | 0.11 | ||||||||||||||||||||||||||||
Net realized and unrealized loss on investments | (2.72 | ) | |||||||||||||||||||||||||||
Total from investment operations | (2.61 | ) | |||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||
From net investment income | (0.12 | ) | |||||||||||||||||||||||||||
Total distributions | (0.12 | ) | |||||||||||||||||||||||||||
Net asset value, end of period | $19.93 | ||||||||||||||||||||||||||||
Total return (%)3 | (11.57 | ) 4 | |||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $86 | ||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||
Expenses before reductions | 0.94 | 5 | |||||||||||||||||||||||||||
Expenses including reductions | 0.93 | 5 | |||||||||||||||||||||||||||
Net investment income | 0.69 | 5 | |||||||||||||||||||||||||||
Portfolio turnover (%) | 82 | 6 |
1 | The inception date for Class NAV shares is 6-2-15. | |||||||||||||||||||||||||||||||||||||
2 | Based on average daily shares outstanding. | |||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable period. | |||||||||||||||||||||||||||||||||||||
4 | Not annualized. | |||||||||||||||||||||||||||||||||||||
5 | Annualized. | |||||||||||||||||||||||||||||||||||||
6 | The portfolio turnover is shown for the period from 3-1-15 to 2-29-16. |
Note 1 — Organization
John Hancock International Growth Fund (the fund) is a series of John Hancock Funds III (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 high total return, primarily through capital appreciation.
The fund may offer multiple classes of shares. The shares currently offered are detailed in the Statement 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 R2 and Class R4 shares are available only to certain retirement plans. Class R6 shares are available only to certain retirement plans, institutions and other investors. Class 1 shares are offered only to certain affiliates of Manulife Financial Corporation (MFC). Class NAV shares are offered to John Hancock affiliated funds and certain 529 plans. 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. Class B shares convert to Class A shares eight years after purchase.
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 NAV may be determined as of the regularly scheduled close of the NYSE pursuant to the fund's Valuation Policies and Procedures. The time at which shares and transactions are priced and until which orders are accepted may vary to the extent permitted by the Securities and Exchange Commission and applicable regulations. 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 was acquired or most likely will be sold. 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, including John Hancock Collateral Trust (JHCT), are valued at their respective net asset values each business day. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rates supplied by an independent pricing vendor. Securities that trade only in the over-the-counter (OTC) market are valued using bid 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. Trading in foreign securities may be completed before the scheduled daily close of trading on the NYSE. Significant events at the issuer or market level may affect the values of securities between the time when the valuation of the securities is generally determined and the close of the NYSE. If a significant event occurs, these securities may be fair valued, as determined in good faith by the fund's Pricing Committee, following procedures established by the Board of Trustees. The fund uses fair value adjustment factors provided by an independent pricing vendor to value certain foreign securities in order to adjust for events that may occur between the close of foreign exchanges or markets and the close of the NYSE.
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.
The following is a summary of the values by input classification of the fund's investments as of February 29, 2016, by major security category or type:
Total value at 2-29-16 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | ||
Common stocks | |||||
Australia | $66,805,177 | — | $66,805,177 | — | |
Belgium | 48,817,734 | — | 48,817,734 | — | |
China | 79,942,712 | $28,863,892 | 51,078,820 | — | |
Denmark | 116,484,903 | — | 116,484,903 | — | |
Finland | 25,499,172 | — | 25,499,172 | — | |
Germany | 62,081,543 | — | 62,081,543 | — | |
Hong Kong | 20,461,801 | — | 20,461,801 | — | |
India | 101,788,667 | 10,004,372 | 91,784,295 | — | |
Ireland | 59,322,312 | 59,322,312 | — | — | |
Israel | 31,396,971 | 31,396,971 | — | — | |
Japan | 216,780,533 | — | 216,780,533 | — | |
Jordan | 22,199,236 | — | 22,199,236 | — | |
Netherlands | 32,143,848 | — | 32,143,848 | — | |
Singapore | 26,750,460 | 26,750,460 | — | — | |
South Korea | 28,055,570 | — | 28,055,570 | — | |
Switzerland | 245,060,497 | — | 245,060,497 | — | |
Taiwan | 53,092,233 | — | 53,092,233 | — | |
United Kingdom | 666,549,592 | 28,774,150 | 637,775,442 | — | |
United States | 57,486,342 | 57,486,342 | — | — | |
Securities lending collateral | 28,332,326 | 28,332,326 | — | — | |
Total investments in securities | $1,989,051,629 | $270,930,825 | $1,718,120,804 | — |
Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. 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. Foreign taxes are provided for based on the fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. 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 net asset value and is registered with the Securities and Exchange Commission as an investment company. JHCT invests cash received as collateral as part of the securities lending program 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 may receive 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. 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 February 29, 2016, the fund loaned common stocks valued at $27,853,882 and received $28,332,850 of cash collateral.
Foreign currency translation. 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.
Funds that invest internationally generally carry more risk than funds that invest strictly in U.S. securities. These risks are heightened for investments in emerging markets. Risks can result from differences in economic and political conditions, regulations, market practices (including higher transaction costs), accounting standards and other factors. Foreign investments are also 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.
Foreign taxes. The fund may be subject to withholding tax on income and/or capital gains or repatriation taxes imposed by certain countries in which the fund invests. Taxes are accrued based upon investment income, realized gains or unrealized appreciation.
Line of credit. The fund may 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. (Citibank) as the administrative agent, that enables them to participate in a $750 million unsecured committed line of credit. Prior to June 30, 2015, the fund and other affiliated funds had an agreement with Citibank that enabled them to participate in a $300 million unsecured committed line of credit. A commitment fee, payable at the end of each calendar quarter, based on the average daily unused portion of the effective line of credit, is charged to each participating fund on a pro rata basis and is
reflected in Other expenses on the Statement of operations. Commitment fees for the year ended February 29, 2016 were $2,607. For the year ended February 29, 2016, the fund had no borrowings under either line of credit.
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 calculated daily at the class level based on the net assets of each class and the specific expense rates applicable to each class. Through June 30, 2015, class-specific expenses, such as state registration fees and printing and postage, for all classes were calculated daily at the class level based on the net assets of each class and specific expense rate 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.
Under the Regulated Investment Company Modernization Act of 2010, the fund is permitted to carry forward capital losses for an unlimited period. Capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.
For federal income tax purposes, as of February 29, 2016, the fund has a short-term capital loss carryfoward of $88,360,551 available to offset future net realized capital gains. This carryforward does not expire.
As of February 29, 2016, 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 typically declares and pays dividends and capital gain distributions, if any, at least annually. The tax character of distributions for the years ended February 29, 2016 and February 28, 2015 was as follows:
February 29, 2016 | February 28, 2015 | |
Ordinary Income | $5,700,056 | $12,161,897 |
Long-term capital gains | — | $34,146,237 |
Total | $5,700,056 | $46,308,134 |
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. As of February 29, 2016, the components of distributable earnings on a tax basis consisted of $1,301,675 of undistributed ordinary income.
Such distributions and distributable earnings, 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.
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.
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 daily management fee to the Advisor, equivalent on an annual basis to the sum of (a) 0.900% of the first $500 million of the fund's average daily net assets; (b) 0.850% of the next $500 million of the fund's average daily net assets, and (c) 0.800% of the fund's average daily net assets in excess of $1 billion. The Advisor has a subadvisory agreement with Wellington Management Company LLP. 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 year ended February 29, 2016, this waiver amounted to 0.01% of the fund's average net assets. This arrangement may be amended or terminated at any time by the Advisor upon notice to the fund and with the approval of the Board of Trustees.
Effective September 17, 2015 (with the exception of Class 1), the Advisor has contractually agreed to waive fees and/or reimburse certain expenses for each share class of the fund. This agreement excludes taxes, brokerage commissions, interest expense, litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the fund's business, acquired fees and expenses paid indirectly and short dividend expense. The fee waivers and/or reimbursements are such that these expenses will not exceed 1.35%, 2.05%, 2.05% 1.05%, 1.45%, 1.20%, and 1.15% of average net assets for Class A, Class B, Class C, Class I, Class R2, Class R4, and Class 1 shares, respectively. The current expense limitation agreement will remain in effect through June 30, 2016 for Class 1 shares and June 30, 2017 for Class A, Class B, Class C, Class I, Class R2 and Class R4 shares, unless renewed by mutual agreement of the fund and the Advisor based upon a determination that this is appropriate under the circumstances at the time. Prior to July 1, 2015, Class A and Class C shares had fee waivers and/or reimbursement such that the expenses would not exceed 1.60% and 2.30% for Class A and Class C shares, respectively. Prior to September 17, 2015, Class I, Class R2, and Class R4 shares had fee waivers and/or reimbursement such that the expenses would not exceed 1.24%, 1.69%, and 1.44% of average net assets, respectively.
Prior to July 1, 2015, the Advisor contractually agreed to waive and/or reimburse all class specific expenses for Class B shares of the fund, including Rule 12b-1 fees and transfer agency fees and service fees, as applicable, to the extent they exceed 1.30% of average annual net assets attributable to Class B shares (the Class Expense Waiver).
The Advisor has contractually agreed to waive and/or reimburse all class specific expenses for Class R6 shares of the fund to the extent they exceed 0.00% of average annual net assets, on an annualized basis. The expense limitation expires on June 30, 2017, unless renewed by mutual agreement of the fund and the Advisor based upon a determination that this is appropriate under the circumstances at the time.
The expense reductions described above amounted to the following for the year ended February 29, 2016:
Class | Expense reductions | Class | Expense reductions | |
Class A | $52,489 | Class R4 | $3,269 | |
Class B | 4,062 | Class R6 | 4,286 | |
Class C | 9,415 | Class 1 | 2,313 | |
Class I | 47,499 | Class NAV | 5,303 | |
Class R2 | 2,868 | Total | $131,504 |
The investment management fees, including the impact of the waivers and reimbursements as described above, incurred for the year ended February 29, 2016, were equivalent to a net annual effective rate of 0.84% of the fund's average daily net assets.
Accounting and legal services. Pursuant to a service agreement, the fund reimburses the Advisor for all expenses associated with providing the administrative, financial, legal, 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 year ended February 29, 2016 amounted to an annual rate of 0.01% 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 R2, Class R4 and Class 1 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 R2 and Class R4 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 A | 0.30% | — |
Class B | 1.00% | — |
Class C | 1.00% | — |
Class R2 | 0.25% | 0.25% |
Class R4 | 0.25% | 0.10% |
Class 1 | 0.05% | — |
The fund's Distributor has contractually agreed to waive 0.10% of Rule 12b-1 fees for Class R4 shares. The current waiver agreement expires on June 30, 2017, 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 $1,066 for Class R4 shares for the year ended February 29, 2016.
Sales charges. Class A shares are assessed up-front sales charges, which resulted in payments to the Distributor amounting to $3,623,603 for the year ended February 29, 2016. Of this amount, $611,872 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $2,999,474 was paid as sales commissions to broker-dealers and $12,257 was paid as sales commissions to sales personnel of Signator Investors, Inc., a broker-dealer affiliate of the Advisor.
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 year ended February 29, 2016, CDSCs received by the Distributor amounted to $2,231, $2,235 and $20,956 for Class A, Class B and Class C shares, respectively.
Transfer agent fees. The fund has a 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 year ended February 29, 2016 were:
Class | Distribution and service fees | Transfer agent fees | State registration fees | Printing and postage |
Class A | $1,153,583 | $479,149 | $9,707 | $6,476 |
Class B | 20,363 | 2,545 | 4,782 | 147 |
Class C | 651,718 | 81,151 | 4,909 | 606 |
Class I | — | 702,840 | 6,454 | 6,686 |
Class R2 | 3,391 | 123 | 3,760 | 28 |
Class R4 | 3,569 | 172 | 3,761 | 8 |
Class R6 | — | 164 | 4,040 | 8 |
Class 1 | 15,497 | — | — | — |
Total | $1,848,121 | $1,266,144 | $37,413 | $13,959 |
Effective July 1, 2015, state registration fees and printing and postage are treated as fund level expenses and are not included in the table above. For the period July 1, 2015 to February 29, 2016, state registration fees and printing and postage amounted to $99,286 and $88,089, respectively.
Trustee expenses. The fund 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 each 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 fund shares for the years ended February 29, 2016 and February 28, 2015 were as follows:
Year ended 2-29-16 | Year ended 2-28-15 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class A shares | ||||||||||||||||||||||||||
Sold | 30,296,417 | $652,123,320 | 3,872,773 | $89,197,062 | ||||||||||||||||||||||
Distributions reinvested | 37,422 | 806,063 | 870,844 | 17,190,462 | ||||||||||||||||||||||
Repurchased | (5,892,970 | ) | (123,829,522 | ) | (3,537,619 | ) | (86,355,594 | ) | ||||||||||||||||||
Net increase | 24,440,869 | $529,099,861 | 1,205,998 | $20,031,930 | ||||||||||||||||||||||
Class B shares | ||||||||||||||||||||||||||
Sold | 43,893 | $950,453 | 11,751 | $269,871 | ||||||||||||||||||||||
Distributions reinvested | — | — | 11,409 | 224,646 | ||||||||||||||||||||||
Repurchased | (23,186 | ) | (489,433 | ) | (17,977 | ) | (410,047 | ) | ||||||||||||||||||
Net increase | 20,707 | $461,020 | 5,183 | $84,470 |
Year ended 2-29-16 | Year ended 2-28-15 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class C shares | ||||||||||||||||||||||||||
Sold | 5,682,409 | $121,374,986 | 353,368 | $7,865,929 | ||||||||||||||||||||||
Distributions reinvested | — | — | 58,230 | 1,143,641 | ||||||||||||||||||||||
Repurchased | (535,075 | ) | (11,149,899 | ) | (92,860 | ) | (2,139,704 | ) | ||||||||||||||||||
Net increase | 5,147,334 | $110,225,087 | 318,738 | $6,869,866 | ||||||||||||||||||||||
Class I shares | ||||||||||||||||||||||||||
Sold | 65,900,813 | $1,417,620,775 | 7,959,907 | $188,904,055 | ||||||||||||||||||||||
Distributions reinvested | 160,677 | 3,464,207 | 959,666 | 18,953,405 | ||||||||||||||||||||||
Repurchased | (14,492,634 | ) | (309,958,268 | ) | (13,666,278 | ) | (328,851,005 | ) | ||||||||||||||||||
Net increase (decrease) | 51,568,856 | $1,111,126,714 | (4,746,705 | ) | ($120,993,545 | ) | ||||||||||||||||||||
Class R2 shares1 | ||||||||||||||||||||||||||
Sold | 67,764 | $1,480,916 | — | — | ||||||||||||||||||||||
Repurchased | (3,813 | ) | (81,033 | ) | — | — | ||||||||||||||||||||
Net increase | 63,951 | $1,399,883 | — | — | ||||||||||||||||||||||
Class R4 shares1 | ||||||||||||||||||||||||||
Sold | 152,395 | $3,282,916 | — | — | ||||||||||||||||||||||
Distributions reinvested | 151 | 3,252 | — | — | ||||||||||||||||||||||
Repurchased | (15,070 | ) | (313,187 | ) | — | — | ||||||||||||||||||||
Net increase | 137,476 | $2,972,981 | — | — | ||||||||||||||||||||||
Class R6 shares1 | ||||||||||||||||||||||||||
Sold | 123,984 | $2,660,310 | — | — | ||||||||||||||||||||||
Distributions reinvested | 356 | 7,688 | — | — | ||||||||||||||||||||||
Repurchased | (1,703 | ) | (34,471 | ) | — | — | ||||||||||||||||||||
Net increase | 122,637 | $2,633,527 | — | — | ||||||||||||||||||||||
Class 1 shares | ||||||||||||||||||||||||||
Sold | 1,191,160 | $25,899,826 | 269,172 | $6,025,547 | ||||||||||||||||||||||
Distributions reinvested | 8,748 | 188,512 | 137,367 | 2,711,616 | ||||||||||||||||||||||
Repurchased | (168,568 | ) | (3,618,687 | ) | (142,058 | ) | (3,345,834 | ) | ||||||||||||||||||
Net increase | 1,031,340 | $22,469,651 | 264,481 | $5,391,329 | ||||||||||||||||||||||
Class NAV shares2 | ||||||||||||||||||||||||||
Sold | 4,844,041 | $109,195,857 | — | — | ||||||||||||||||||||||
Distributions reinvested | 23,895 | 514,934 | — | — | ||||||||||||||||||||||
Repurchased | (556,210 | ) | (11,759,311 | ) | — | — | ||||||||||||||||||||
Net increase | 4,311,726 | $97,951,480 | — | — | ||||||||||||||||||||||
Total net increase (decrease) | 86,844,896 | $1,878,340,204 | (2,952,305 | ) | ($88,615,950 | ) |
1 The inception date for Class R2, Class R4 and Class R6 shares is 3-27-15.
2 The inception date for Class NAV shares is 6-2-15.
Affiliates of the fund owned 100% of shares of beneficial interest of Class 1 and Class NAV on February 29, 2016.
Note 6 — Purchase and sale of securities
Purchases and sales of securities, other than short-term investments, amounted to $2,780,389,201 and $963,454,147, respectively, for the year ended February 29, 2016.
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 net asset value 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 by affiliated funds
Certain investors in the fund are affiliated funds that are managed by the Advisor and its affiliates. The affiliated funds do not invest in the fund for the purpose of exercising management or control; however, this investment may represent a significant portion of the fund's net assets. At February 29, 2016, there were no affiliated funds with an ownership of 5% or more of the fund's net assets.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock International Growth Fund:
In our opinion, the accompanying statement of assets and liabilities, including the fund's investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock International Growth Fund (the "Fund") at February 29, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at February 29, 2016 by correspondence with the custodian and transfer agent, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
April 14, 2016
Unaudited
For federal income tax purposes, the following information is furnished with respect to the distributions of the fund, if any, paid during its taxable year ended February 29, 2016.
The fund reports the maximum amount allowable of its net taxable income as eligible for the corporate dividends-received deduction.
The fund reports the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003.
Income derived from foreign sources was $21,716,982. The fund intends to pass through foreign tax credits of $1,071,219.
Eligible shareholders will be mailed a 2016 Form 1099-DIV in early 2017. This will reflect the tax character of all distributions paid in calendar year 2016.
Please consult a tax advisor regarding the tax consequences of your investment in the fund.
This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the fund and execute policies formulated by the Trustees.
Independent Trustees
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
James M. Oates, Born: 1946 | 2012 | 228 |
Trustee and Chairperson of the Board Managing Director, Wydown Group (financial consulting firm) (since 1994); Chairman and Director, Emerson Investment Management, Inc. (since 2000); Independent Chairman, Hudson Castle Group, Inc. (formerly IBEX Capital Markets, Inc.) (financial services company) (1997-2011); Director, Stifel Financial (since 1996); Director, Investor Financial Services Corporation (1995-2007); Director, Connecticut River Bancorp (1998-2014); Director, Virtus Funds (formerly Phoenix Mutual Funds) (since 1988). Trustee and Chairperson of the Board, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee and Chairperson of the Board, John Hancock retail funds3 (since 2012); Trustee (2005-2006 and since 2012) and Chairperson of the Board (since 2012), John Hancock Funds III; Trustee (since 2004) and Chairperson of the Board (since 2005), John Hancock Variable Insurance Trust; Trustee and Chairperson of the Board, John Hancock Funds II (since 2005). |
Charles L. Bardelis,2 Born: 1941 | 2012 | 228 |
Trustee Director, Island Commuter Corp. (marine transport). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Funds III (2005-2006 and since 2012); Trustee, John Hancock Variable Insurance Trust (since 1988); Trustee, John Hancock Funds II (since 2005). |
Peter S. Burgess,2 Born: 1942 | 2012 | 228 |
Trustee Consultant (financial, accounting, and auditing matters) (since 1999); Certified Public Accountant; Partner, Arthur Andersen (independent public accounting firm) (prior to 1999); Director, Lincoln Educational Services Corporation (since 2004); Director, Symetra Financial Corporation (2010-2016); Director, PMA Capital Corporation (2004-2010). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Funds III (2005-2006 and since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2005). |
William H. Cunningham, Born: 1944 | 2006 | 228 |
Trustee Professor, University of Texas, Austin, Texas (since 1971); former Chancellor, University of Texas System and former President of the University of Texas, Austin, Texas; Chairman (since 2009) and Director (since 2006), Lincoln National Corporation (insurance); Director, Southwest Airlines (since 2000); former Director, LIN Television (2009-2014). Trustee, John Hancock retail funds3 (since 1986); Trustee, John Hancock Variable Insurance Trust (since 2012); Trustee, John Hancock Funds II (2005-2006 and since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Grace K. Fey, Born: 1946 | 2012 | 228 |
Trustee Chief Executive Officer, Grace Fey Advisors (since 2007); Director and Executive Vice President, Frontier Capital Management Company (1988-2007); Director, Fiduciary Trust (since 2009). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2008). |
Independent Trustees (continued)
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
Theron S. Hoffman,2 Born: 1947 | 2012 | 228 |
Trustee Chief Executive Officer, T. Hoffman Associates, LLC (consulting firm) (since 2003); Director, The Todd Organization (consulting firm) (2003-2010); President, Westport Resources Management (investment management consulting firm) (2006-2008); Senior Managing Director, Partner, and Operating Head, Putnam Investments (2000-2003); Executive Vice President, The Thomson Corp. (financial and legal information publishing) (1997-2000). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2008). |
Deborah C. Jackson, Born: 1952 | 2008 | 228 |
Trustee President, Cambridge College, Cambridge, Massachusetts (since 2011); Chief Executive Officer, American Red Cross of Massachusetts Bay (2002-2011); Board of Directors of Eastern Bank Corporation (since 2001); Board of Directors of Eastern Bank Charitable Foundation (since 2001); Board of Directors of American Student Assistance Corporation (1996-2009); Board of Directors of Boston Stock Exchange (2002-2008); Board of Directors of Harvard Pilgrim Healthcare (health benefits company) (2007-2011). Trustee, John Hancock retail funds3 (since 2008); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Hassell H. McClellan, Born: 1945 | 2012 | 228 |
Trustee Trustee, Virtus Variable Insurance Trust (formerly Phoenix Edge Series Funds) (since 2008); Director, The Barnes Group (since 2010); Associate Professor, The Wallace E. Carroll School of Management, Boston College (retired 2013). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Funds III (2005-2006 and since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2005). |
Steven R. Pruchansky, Born: 1944 | 2006 | 228 |
Trustee and Vice Chairperson of the Board Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and President, Greenscapes of Southwest Florida, Inc. (until 2000); Member, Board of Advisors, First American Bank (until 2010); Managing Director, Jon James, LLC (real estate) (since 2000); Partner, Right Funding, LLC (since 2014); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty Trust (until 1994); President, Maxwell Building Corp. (until 1991). Trustee (since 1992) and Chairperson of the Board (2011-2012), John Hancock retail funds3; Trustee and Vice Chairperson of the Board, John Hancock retail funds3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2012); Trustee, and Vice Chairperson of the Board, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Independent Trustees (continued)
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
Gregory A. Russo, Born: 1949 | 2008 | 228 |
Trustee Director and Audit Committee Chairman (since 2012), and Member, Audit Committee and Finance Committee (since 2011), NCH Healthcare System, Inc. (holding company for multi-entity healthcare system); Director and Member (since 2012) and Finance Committee Chairman (since 2014), The Moorings, Inc. (nonprofit continuing care community); Vice Chairman, Risk & Regulatory Matters, KPMG LLP (KPMG) (2002-2006); Vice Chairman, Industrial Markets, KPMG (1998-2002); Chairman and Treasurer, Westchester County, New York, Chamber of Commerce (1986-1992); Director, Treasurer, and Chairman of Audit and Finance Committees, Putnam Hospital Center (1989-1995); Director and Chairman of Fundraising Campaign, United Way of Westchester and Putnam Counties, New York (1990-1995). Trustee, John Hancock retail funds3 (since 2008); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Non-Independent Trustees4
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
James R. Boyle, Born: 1959 | 2015 | 228 |
Non-Independent Trustee* Chairman and Chief Executive Officer, Zillion Group, Inc. (formerly HealthFleet, Inc.) (healthcare) (since 2014); Executive Vice President and Chief Executive Officer, U.S. Life Insurance Division of Genworth Financial, Inc. (insurance) (January 2014-July 2014); Senior Executive Vice President, Manulife Financial Corporation, President and Chief Executive Officer, John Hancock (1999-2012); Chairman and Director, John Hancock Advisers, LLC, John Hancock Funds, LLC, and John Hancock Investment Management Services, LLC (2005-2010). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (2005-2010; 2012-2014 and since 2015); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (2005-2014 and since 2015). *Effective 3-10-15. |
Craig Bromley, Born: 1966 | 2012 | 228 |
Non-Independent Trustee President, John Hancock Financial Service (since 2012); Senior Executive Vice President and General Manager, U.S. Division, Manulife Financial Corporation (since 2012); President and Chief Executive Officer, Manulife Insurance Company (Manulife Japan) (2005-2012, including prior positions). Trustee, John Hancock retail funds,3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Warren A. Thomson, Born: 1955 | 2012 | 228 |
Non-Independent Trustee Senior Executive Vice President and Chief Investment Officer, Manulife Financial Corporation and The Manufacturers Life Insurance Company (since 2009); Chairman, Manulife Asset Management (since 2001, including prior positions); Director and Chairman, Manulife Asset Management Limited (since 2006); Director and Chairman, Hancock Natural Resources Group, Inc. (since 2013). Trustee, John Hancock retail funds,3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Principal officers who are not Trustees
Name, year of birth Position(s) held with fund Principal occupation(s) during past 5 years | Officer of the Trust since |
Andrew G. Arnott, Born: 1971 | 2009 |
President Senior Vice President, John Hancock Financial Services (since 2009); Director and Executive Vice President, John Hancock Advisers, LLC (since 2005, including prior positions); Director and Executive Vice President, John Hancock Investment Management Services, LLC (since 2006, including prior positions); President, John Hancock Funds, LLC (since 2004, including prior positions); President, John Hancock retail funds,3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2007, including prior positions); President, John Hancock Collateral Trust (since 2015); President, John Hancock Exchange-Traded Fund Trust (since 2014). |
John J. Danello, Born: 1955 | 2014 |
Senior Vice President, Secretary, and Chief Legal Officer Vice President and Chief Counsel, John Hancock Wealth Management (since 2005); Senior Vice President (since 2007) and Chief Legal Counsel (2007-2010), John Hancock Funds, LLC and The Berkeley Financial Group, LLC; Senior Vice President (since 2006, including prior positions) and Chief Legal Officer and Secretary (since 2014), John Hancock retail funds,3 John Hancock Funds II and John Hancock Variable Insurance Trust; Senior Vice President, Chief Legal Officer and Secretary, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Vice President, John Hancock Life & Health Insurance Company (since 2009); Vice President, John Hancock Life Insurance Company (USA) and John Hancock Life Insurance Company of New York (since 2010); and Senior Vice President, Secretary, and Chief Legal Counsel (2007-2014, including prior positions) of John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC. |
Francis V. Knox, Jr., Born: 1947 | 2006 |
Chief Compliance Officer Vice President, John Hancock Financial Services (since 2005); Chief Compliance Officer, John Hancock retail funds,3 John Hancock Variable Insurance Trust, John Hancock Funds II, John Hancock Advisers, LLC, and John Hancock Investment Management Services, LLC (since 2005); Chief Compliance Officer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Charles A. Rizzo, Born: 1957 | 2007 |
Chief Financial Officer Vice President, John Hancock Financial Services (since 2008); Senior Vice President, John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC (since 2008); Chief Financial Officer, John Hancock retail funds,3 John Hancock Variable Insurance Trust and John Hancock Funds II (since 2007); Chief Financial Officer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Salvatore Schiavone, Born: 1965 | 2010 |
Treasurer Assistant Vice President, John Hancock Financial Services (since 2007); Vice President, John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC (since 2007); Treasurer, John Hancock retail funds3 (since 2007, including prior positions); Treasurer, John Hancock Variable Insurance Trust and John Hancock Funds II (2007-2009 and since 2010, including prior positions); Treasurer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.
The Statement of Additional Information of the fund includes additional information about members of the Board of Trustees of the Trust and is available without charge, upon request, by calling 800-225-5291.
1 | Each Trustee holds office until his or her successor is elected and qualified, or until the Trustee's death, retirement, resignation, or removal. Mr. Boyle has served as Trustee at various times prior to the date listed in the table. |
2 | Member of the Audit Committee. |
3 | "John Hancock retail funds" comprises John Hancock Funds III and 36 other John Hancock funds consisting of 26 series of other John Hancock trusts and 10 closed-end funds. |
4 | The Trustee is a Non-Independent Trustee due to current or former positions with the Advisor and certain affiliates. |
Trustees James M. Oates, Chairperson Officers Andrew G. Arnott John J. Danello Francis V. Knox, Jr. Charles A. Rizzo Salvatore Schiavone | Investment advisor John Hancock Advisers, LLC Subadvisor Wellington Management Company LLP Principal distributor John Hancock Funds, LLC Custodian Citibank. N.A. Transfer agent John Hancock Signature Services, Inc. Legal counsel K&L Gates LLP Independent registered public accounting firm PricewaterhouseCoopers, LLP |
*Member of the Audit Committee
†Non-Independent Trustee
The fund's proxy voting policies and procedures, as well as the fund proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.
The fund's complete list of portfolio holdings, for the first and third fiscal quarters, is filed with the SEC on Form N-Q. The fund's Form N-Q is available on our website and the SEC's website, sec.gov, and can be reviewed and copied (for a fee) at the SEC's Public Reference Room in Washington, DC. Call 800-SEC-0330 to receive information on the operation of the SEC's Public Reference Room.
We make this information on your fund, as well as monthly 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 Balanced Blue Chip Growth Classic Value Disciplined Value Disciplined Value Mid Cap Equity Income Fundamental All Cap Core Fundamental Large Cap Core Fundamental Large Cap Value New Opportunities Select Growth Small Cap Equity Small Cap Value Small Company Strategic Growth U.S. Equity U.S. Global Leaders Growth Value Equity GLOBAL AND INTERNATIONAL EQUITY FUNDS Disciplined Value International Emerging Markets Emerging Markets Equity Global Equity Global Shareholder Yield Greater China Opportunities International Core International Growth International Small Company International Value Equity | INCOME FUNDS Bond California Tax-Free Income Core High Yield Emerging Markets Debt Floating Rate Income Focused High Yield Global Income Government Income 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 Enduring Assets Financial Industries Global Absolute Return Strategies Global Conservative Absolute Return Global Real Estate Natural Resources Redwood Regional Bank Seaport Technical Opportunities |
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 Income Allocation Fund Lifestyle Aggressive Portfolio Lifestyle Balanced Portfolio Lifestyle Conservative Portfolio Lifestyle Growth Portfolio Lifestyle Moderate Portfolio Retirement Choices Portfolios (2010-2055) Retirement Living Portfolios (2010-2055) Retirement Living II Portfolios (2010-2055) EXCHANGE-TRADED FUNDS John Hancock Multifactor Consumer Discretionary ETF John Hancock Multifactor Financials ETF John Hancock Multifactor Healthcare ETF John Hancock Multifactor Large Cap ETF John Hancock Multifactor Mid Cap ETF John Hancock Multifactor Technology ETF 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 |
"As an investment firm,
upholding the proud
tradition of John Hancock
comes down to one thing:
putting shareholders
first. We believe that if
our shareholders are
successful, then we will
be successful."
Andrew G. Arnott
President and Chief Executive Officer
John Hancock Investments
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 Investments
A trusted brand
John Hancock Investments 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 build funds based on investor needs, then search the world to find
proven portfolio teams with specialized expertise in those strategies.
As a manager of managers, we apply vigorous oversight to ensure that
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 601 Congress Street n Boston, MA 02210-2805 800-225-5291 n jhinvestments.com | |
This report is for the information of the shareholders of John Hancock International Growth Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus. | ||
MF279521 | 87A 2/16 4/16 |
John Hancock
Global Shareholder Yield Fund
Annual report 2/29/16
A message to shareholders
Dear shareholder,
The period covered by this report was a challenging one for investors in global equities. Oil prices hit multi-year lows before rebounding in February. Concerns about slowing global growth added to negative investor psychology, and stock prices fell around the world. The investment landscape improved after the close of the period as stocks and other so-called risk assets regained much of the ground lost earlier in the year.
Despite the recent increase in volatility, the economic picture offers reasons for optimism. In December, the U.S. Federal Reserve raised short-term interest rates for the first time in nine years on evidence that the persistent strength in the labor markets warranted a somewhat less accommodative stance. Central banks outside of the United States continued to stimulate growth and to signal that they will take action to support economies and markets.
Volatile market environments are naturally unsettling. At John Hancock Investments, portfolio risk management is a critical part of our role as an asset manager, and our dedicated risk team is focused on these issues every day. We continually strive for new ways to analyze potential risks and have liquidity tools in place, such as a credit facility and an interfund lending program. However, your best resource in times like these is your financial advisor, who can ensure your portfolio is sufficiently diversified to meet your long-term objectives and to withstand the inevitable bumps along the way.
On behalf of everyone at John Hancock Investments, I'd like to take this opportunity to thank you for the continued trust you've placed in us.
Sincerely,
Andrew G. Arnott
President and Chief Executive Officer
John Hancock Investments
This commentary reflects the CEO's views as of February 29, 2016. They are subject to change at any time. All investments entail risks, including the possible loss of principal. For more up-to-date information, you can visit our website at jhinvestments.com.
John Hancock
Global Shareholder Yield Fund
INVESTMENT OBJECTIVE
The fund seeks to provide a high level of income as its primary objective. Capital appreciation is a secondary investment objective.
AVERAGE ANNUAL TOTAL RETURNS AS OF 2/29/16 (%)
The MSCI World Index (gross of foreign withholding tax on dividends) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Figures from Morningstar, Inc. include reinvested distributions and do not take into account sales charges. Actual load-adjusted performance is lower. Since-inception returns for the Morningstar fund category average are not available.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. 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.
PERFORMANCE HIGHLIGHTS OVER THE LAST TWELVE MONTHS
A rough 12 months for global stocks
Many global equity indexes fell by more than 10% as declining commodity prices and slowing economic growth in many emerging markets led to heightened market volatility.
The fund held up better than its benchmark
The fund declined in value but outperformed its benchmark, the MSCI World Index, for the one-year period.
Utilities and consumer staples added value
The fund's holdings in utilities and consumer staples stocks (particularly those related to the tobacco industry) contributed the most to performance compared with the index.
SECTOR COMPOSITION AS OF 2/29/16 (%)
A note about risks
Foreign investing, especially in emerging markets, has additional risks, such as currency and market volatility and political and social instability. 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. Investments in higher-yielding, lower-rated securities include a higher risk of default. The value of a company's equity securities is subject to changes in the company's financial condition and overall market and economic conditions. Actively trading securities can increase transaction costs (thus lowering performance) and taxable distributions. Hedging, derivatives, and other strategic transactions may increase a fund's volatility and could produce disproportionate losses, potentially more than the fund's principal investment. Fund distributions generally depend on income from underlying investments and may vary or cease altogether in the future. Please see the fund's prospectus for additional risks.
![ericlsappenfield.jpg](https://capedge.com/proxy/N-CSR/0001145443-16-001766/ericlsappenfield.jpg)
Eric L. Sappenfield
Portfolio Manager
Epoch
Can you give us an overview of the global equity markets over the past 12 months?
Many broad global stock indexes declined by more than 10% in an environment of elevated volatility. Slowing economic growth in China, the world's second-largest economy, put downward pressure on commodity prices and had a ripple effect on many emerging economies, especially those dependent on commodity exports. Many of the world's central banks remained accommodative, with some—such as the Bank of Japan (BoJ) and the European Central Bank (ECB)—dramatically increasing their economic stimulus efforts. Over the past 12 months, both the BoJ and ECB expanded their quantitative easing measures and cut certain key interest rates below zero.
The primary exception to the global trend of accommodative central banks was the U.S. Federal Reserve (Fed), which raised its short-term interest-rate target in December. The Fed's first rate hike since June 2006 ended seven years of near-zero interest rates.
Regionally, the U.S. equity market held up the best, reflecting the relative strength of the U.S. economy. Stocks in Europe and the Asia/Pacific region fell more broadly, while emerging markets suffered the largest declines.
How did the fund perform in this environment?
The fund declined for the reporting period, reflecting the broad weakness in many global equity markets; however, it held up better than its benchmark, the MSCI World Index. The fund's overall decline was mitigated by collecting a large portion of our return target in cash dividends. In addition, the fund benefited from owning a diversified portfolio of companies that focused on share buybacks and debt reduction while maintaining growth in free cash flow—revenue available to either distribute to shareholders or reinvest after current capital expenditures and tax obligations have been met. Finally, our risk management process aided results by limiting the influence of any single stock on the fund's overall level of shareholder yield.
What stocks helped the fund outpace its benchmark during the reporting period?
The fund's holdings in the utilities sector, one of the largest sector weightings in the portfolio during the reporting period, helped the most. Three of the top five contributors to both absolute and relative performance came from the utilities sector—U.S. electric utilities TECO Energy, Inc. and WEC Energy Group, Inc. and Italian power grid company Terna Rete Elettrica Nazionale SpA. TECO agreed to be acquired at a premium by Canadian utility Emera, Inc. (not held in the portfolio) during the period, while both WEC Energy and Terna continued to generate solid cash flow growth and raised their dividends.
The consumer staples sector also contributed favorably to fund performance, led by tobacco stocks. Industry consolidation was one positive factor—Reynolds American, Inc., the fund's leading contributor for the reporting period, acquired Lorillard, Inc. (a fund holding at the time that we tendered in the acquisition) in mid-2015, creating the second-largest tobacco producer in the United States. In addition, the pricing power of tobacco companies allowed them to generate attractive levels of free cash flow, and they returned cash to shareholders through sizable and growing dividends. Along with Reynolds American, leading contributors in the portfolio included Philip Morris International, Inc. and Altria Group, Inc.
Shifting gears, what holdings detracted from fund performance compared with the benchmark?
The materials and energy sectors were hit hard by falling commodity prices, and the fund's holdings in these two sectors were no exception. The most significant detractors were energy company
TOP 10 HOLDINGS AS OF 2/29/16 (%)
BCE, Inc. | 2.1 |
AT&T, Inc. | 2.1 |
Philip Morris International, Inc. | 2.1 |
Verizon Communications, Inc. | 2.1 |
National Grid PLC | 2.0 |
PPL Corp. | 1.9 |
WEC Energy Group, Inc. | 1.9 |
Welltower, Inc. | 1.9 |
Muenchener Rueckversicherungs-Gesellschaft AG | 1.8 |
Terna Rete Elettrica Nazionale SpA | 1.7 |
TOTAL | 19.6 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
TOP 10 COUNTRIES AS OF 2/29/16 (%)
United States | 48.7 |
United Kingdom | 13.4 |
France | 7.1 |
Germany | 6.5 |
Canada | 5.7 |
Australia | 3.2 |
Norway | 2.9 |
Switzerland | 2.7 |
Italy | 1.7 |
Singapore | 1.3 |
TOTAL | 93.2 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
Two other notable detractors included British publishing company Pearson PLC and disk drive maker Seagate Technology PLC. Pearson lowered earnings guidance late in the period in response to weaker-than-expected college enrollment and policy-related headwinds, while slowing demand for PCs weighed on Seagate. Concerns about longer-term growth and dividend coverage led us to eliminate Pearson from the portfolio, but the fund still owns Seagate, which continues to deliver strong free cash flow and an attractive dividend.
What changes did you make to the portfolio during the reporting period?
The elevated market volatility presented us with a number of opportunities to improve the fund's shareholder yield. New holdings added to the portfolio during the reporting period included U.S. information technology services company Iron Mountain, Inc., U.S. power producer Entergy Corp., U.S. energy company Exxon Mobil Corp., chip maker Taiwan Semiconductor Manufacturing Company, Ltd., and German financial services provider Allianz SE.
We also closed out positions in a number of stocks during the reporting period. In addition to previously mentioned sales, we eliminated Swiss pharmaceutical firm Novartis AG, U.K. water utility United Utilities Group PLC, French utility Electricite de France SA, U.S. energy producer ConocoPhillips, and U.K. mining company Rio Tinto PLC.
How was the fund positioned at the end of the period?
We continue to focus on individual companies that enhance shareholder value by growing free cash flows and returning them to shareholders in the form of dividends, share buybacks, and debt reduction. Based on our investment decision-making process, the largest sector weightings in the portfolio at the end of the period were telecommunication services, financials, and utilities. In contrast, the consumer discretionary and materials sectors were the smallest weightings in the portfolio.
The broad-based expansion of valuations that drove outsized market gains in 2012-2014 was not present over the past year. Certainly, the loss of economic momentum in China—which has been responsible for nearly half of the world's growth since 2009—casts a long shadow. Growing debt accumulation is another headwind for economies and equity markets around the globe.
In our view, profitability will be challenged in a world where revenue growth is hard to come by. Consequently, we believe the ability to consistently generate free cash flow and properly deploy that cash flow will differentiate the winners from the losers.
MANAGED BY
![]() | Eric L. Sappenfield On the fund since inception Investing since 1986 |
![]() | William W. Priest, CFA, CPA On the fund since inception Investing since 1965 |
![]() | John Tobin, Ph.D., CFA On the fund since 2014 Investing since 1981 |
![]() | Kera Van Valen, CFA On the fund since 2014 Investing since 2001 |
![]() | Michael A. Welhoelter, CFA On the fund since inception Investing since 1986 |
TOTAL RETURNS FOR THE PERIOD ENDED FEBRUARY 29, 2016
Average annual total returns (%) with maximum sales charge | Cumulative total returns (%) with maximum sales charge | SEC 30-day yield (%) subsidized | SEC 30-day yield (%) unsubsidized1 | ||||||||||||||||||||||||||||||||
1-year | 5-year | Since inception | 5-year | Since inception | as of 2-29-16 | as of 2-29-16 | |||||||||||||||||||||||||||||
Class A | -13.91 | 5.33 | 3.69 | 2 | 29.62 | 38.50 | 2 | 2.60 | 2.59 | ||||||||||||||||||||||||||
Class B | -14.29 | 5.32 | 3.53 | 2 | 29.58 | 36.70 | 2 | 2.07 | 2.07 | ||||||||||||||||||||||||||
Class C | -10.86 | 5.67 | 3.56 | 2 | 31.77 | 37.04 | 2 | 2.07 | 2.07 | ||||||||||||||||||||||||||
Class I3 | -9.13 | 6.80 | 4.72 | 2 | 38.96 | 51.45 | 2 | 3.04 | 3.03 | ||||||||||||||||||||||||||
Class R23,4 | -9.51 | 6.04 | 3.42 | 2 | 34.05 | 35.37 | 2 | 2.68 | 2.64 | ||||||||||||||||||||||||||
Class R63,4 | -8.94 | 6.89 | 4.73 | 2 | 39.54 | 51.62 | 2 | 3.14 | 3.12 | ||||||||||||||||||||||||||
Class NAV3 | -9.03 | 6.91 | 5.42 | 5 | 39.64 | 51.24 | 5 | 3.15 | 3.15 | ||||||||||||||||||||||||||
Index† | -10.49 | 5.51 | 3.14 | 2 | 30.75 | 32.07 | 2 | — | — |
Performance figures assume all distributions have been reinvested. Figures reflect maximum sales charges on Class A shares of 5%, and the applicable contingent deferred sales charge (CDSC) on Class B and Class C shares. The Class B shares' CDSC declines annually between years 1 to 6 according to the following schedule: 5%, 4%, 3%, 3%, 2%, and 1%. No sales charge will be assessed after the sixth year. Class C shares sold within one year of purchase are subject to a 1% CDSC. Sales charges are not applicable to Class I, Class R2, Class R6, and Class NAV shares.
The expense ratios of the fund, both net (including any fee waivers and/or expense limitations) and gross (excluding any fee waivers and/or expense limitations), are set forth according to the most recent publicly available prospectuses for the fund and may differ from those disclosed in the Financial highlights tables in this report. Had the fee waivers and expense limitations not been in place, gross expenses would apply. The expense ratios are as follows:
Class A | Class B | Class C | Class I | Class R2 | Class R6 | Class NAV | |
Gross (%) | 1.28 | 1.98 | 1.98 | 0.97 | 1.38 | 0.87 | 0.85 |
Net (%) | 1.28 | 1.98 | 1.98 | 0.97 | 1.38 | 0.85 | 0.85 |
Please refer to the most recent prospectus and annual or semiannual report for more information on expenses and any expense limitation arrangements for each class.
The returns reflect past results and should not be considered indicative of future performance. The return and principal value of an investment will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Due to market volatility and other factors, the fund's current performance may be higher or lower than the performance shown. For current to the most recent month-end performance data, please call 800-225-5291 or visit the fund's website at jhinvestments.com.
The performance table above and the chart on the next page do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. The fund's performance results reflect any applicable fee waivers or expense reductions, without which the expenses would increase and results would have been less favorable.
† | Index is the MSCI World Index. |
See the following page for footnotes.
This chart and table show what happened to a hypothetical $10,000 investment in John Hancock Global Shareholder Yield Fund for the share classes and periods indicated, assuming all distributions were reinvested. For comparison, we've shown the same investment in the MSCI World Index.
Start date | With maximum sales charge ($) | Without sales charge ($) | Index ($) | |
Class B6 | 3-1-07 | 13,670 | 13,670 | 13,207 |
Class C6 | 3-1-07 | 13,704 | 13,704 | 13,207 |
Class I3 | 3-1-07 | 15,145 | 15,145 | 13,207 |
Class R23,4 | 3-1-07 | 13,537 | 13,537 | 13,207 |
Class R63,4 | 3-1-07 | 15,162 | 15,162 | 13,207 |
Class NAV3 | 4-28-08 | 15,124 | 15,124 | 12,617 |
The MSCI World Index (gross of foreign withholding tax on dividends) is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed markets.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
Footnotes related to performance pages
1 | Unsubsidized yields reflect what the yield would have been without the effect of reimbursements and waivers. |
2 | From 3-1-07. |
3 | For certain types of investors, as described in the fund's prospectuses. |
4 | Class R2 and Class R6 shares were first offered 3-1-12 and 9-1-11, respectively. The returns prior to these dates are those of Class A shares that have been recalculated to apply the gross fees and expenses of Class R2 and Class R6 shares, as applicable. |
5 | From 4-28-08. |
6 | The contingent deferred sales charge is not applicable. |
These examples are intended to help you understand your ongoing operating expenses of investing in the fund so you can compare these costs with the ongoing costs of investing in other mutual funds.
Understanding fund expenses
As a shareholder of the fund, you incur two types of costs:
• | Transaction costs, which include sales charges (loads) on purchases or redemptions (varies by share class), minimum account fee charge, etc. |
• | Ongoing operating expenses, including management fees, distribution and service fees (if applicable), and other fund expenses. |
We are presenting only your ongoing operating expenses here.
Actual expenses/actual returns
This example is intended to provide information about the fund's actual ongoing operating expenses, and is based on the fund's actual return. It assumes an account value of $1,000.00 on September 1, 2015, with the same investment held until February 29, 2016.
Beginning Account value on 9-1-2015 | Ending value on 2-29-2016 | Expenses paid during period ended 2-29-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $991.30 | $6.39 | 1.29% |
Class B | 1,000.00 | 988.20 | 9.84 | 1.99% |
Class C | 1,000.00 | 988.50 | 9.84 | 1.99% |
Class I | 1,000.00 | 993.90 | 4.81 | 0.97% |
Class R2 | 1,000.00 | 991.30 | 6.83 | 1.38% |
Class R6 | 1,000.00 | 994.60 | 4.26 | 0.86% |
Class NAV | 1,000.00 | 993.60 | 4.26 | 0.86% |
Together with the value of your account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at February 29, 2016, by $1,000.00, then multiply it by the "expenses paid" for your share class from the table above. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:
Hypothetical example for comparison purposes
This table allows you to compare the fund's ongoing operating expenses with those of any other fund. It provides an example of the fund's hypothetical account values and hypothetical expenses based on each class's actual expense ratio and an assumed 5% annualized return before expenses (which is not the fund's actual return). It assumes an account value of $1,000.00 on September 1, 2015, with the same investment held until February 29, 2016. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses. Please remember that these hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Beginning Account value on 9-1-2015 | Ending value on 2-29-2016 | Expenses paid during period ended 2-29-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $1,018.40 | $6.47 | 1.29% |
Class B | 1,000.00 | 1,015.00 | 9.97 | 1.99% |
Class C | 1,000.00 | 1,015.00 | 9.97 | 1.99% |
Class I | 1,000.00 | 1,020.00 | 4.87 | 0.97% |
Class R2 | 1,000.00 | 1,018.00 | 6.92 | 1.38% |
Class R6 | 1,000.00 | 1,020.60 | 4.32 | 0.86% |
Class NAV | 1,000.00 | 1,020.60 | 4.32 | 0.86% |
Remember, these examples do not include any transaction costs, therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher. See the prospectuses for details regarding transaction costs.
1 | Expenses are equal to the fund's annualized expense ratio multiplied by the average account value over the period, multiplied by 182/366 (to reflect the one-half year period). |
Fund's investments
As of 2-29-16 | ||||||||||||||
Shares | Value | |||||||||||||
Common stocks 96.9% | $2,061,243,668 | |||||||||||||
(Cost $1,917,162,078) | ||||||||||||||
Australia 3.2% | 68,553,594 | |||||||||||||
Commonwealth Bank of Australia | 264,330 | 13,186,662 | ||||||||||||
Sonic Healthcare, Ltd. | 841,090 | 11,049,885 | ||||||||||||
Telstra Corp., Ltd. | 6,938,530 | 25,936,982 | ||||||||||||
Westpac Banking Corp. | 898,659 | 18,380,065 | ||||||||||||
Canada 5.7% | 121,436,558 | |||||||||||||
Agrium, Inc. | 146,350 | 12,575,856 | ||||||||||||
BCE, Inc. | 1,053,550 | 45,505,885 | ||||||||||||
Rogers Communications, Inc., Class B | 961,040 | 35,571,976 | ||||||||||||
Shaw Communications, Inc., Class B | 762,750 | 13,208,598 | ||||||||||||
TELUS Corp. | 500,354 | 14,574,243 | ||||||||||||
France 7.1% | 151,325,821 | |||||||||||||
AXA SA | 674,000 | 14,818,992 | ||||||||||||
Sanofi | 135,895 | 10,768,136 | ||||||||||||
SCOR SE | 766,500 | 26,808,306 | ||||||||||||
Total SA | 680,610 | 30,505,390 | ||||||||||||
Unibail-Rodamco SE | 112,365 | 27,956,788 | ||||||||||||
Vinci SA | 385,160 | 26,603,617 | ||||||||||||
Vivendi SA | 668,388 | 13,864,592 | ||||||||||||
Germany 6.5% | 138,454,112 | |||||||||||||
Allianz SE | 108,530 | 16,098,011 | ||||||||||||
BASF SE | 284,160 | 18,424,448 | ||||||||||||
Daimler AG | 253,950 | 17,278,122 | ||||||||||||
Deutsche Post AG | 531,510 | 12,601,189 | ||||||||||||
Deutsche Telekom AG | 945,865 | 15,821,550 | ||||||||||||
Muenchener Rueckversicherungs-Gesellschaft AG | 192,610 | 37,808,742 | ||||||||||||
Siemens AG | 220,910 | 20,422,050 | ||||||||||||
Italy 1.7% | 36,785,633 | |||||||||||||
Terna Rete Elettrica Nazionale SpA | 7,069,710 | 36,785,633 | ||||||||||||
Netherlands 1.3% | 27,048,548 | |||||||||||||
Royal Dutch Shell PLC, ADR, Class A | 594,735 | 27,048,548 | ||||||||||||
Norway 2.9% | 61,362,274 | |||||||||||||
Orkla ASA | 2,285,430 | 18,852,867 | ||||||||||||
Statoil ASA | 2,022,970 | 29,448,863 | ||||||||||||
Yara International ASA | 337,030 | 13,060,544 | ||||||||||||
Singapore 1.3% | 27,586,771 | |||||||||||||
Singapore Exchange, Ltd. | 2,484,651 | 12,826,996 |
Shares | Value | |||||||||||||
Singapore (continued) | ||||||||||||||
Singapore Telecommunications, Ltd. | 5,572,483 | $14,759,775 | ||||||||||||
Spain 0.6% | 13,382,409 | |||||||||||||
Gas Natural SDG SA | 768,470 | 13,382,409 | ||||||||||||
Sweden 0.9% | 19,640,837 | |||||||||||||
Svenska Handelsbanken AB, A Shares | 1,535,895 | 19,640,837 | ||||||||||||
Switzerland 2.7% | 57,412,780 | |||||||||||||
Nestle SA | 175,560 | 12,277,084 | ||||||||||||
Roche Holding AG | 59,455 | 15,245,174 | ||||||||||||
Swisscom AG | 61,343 | 29,890,522 | ||||||||||||
Taiwan 0.9% | 18,740,619 | |||||||||||||
Taiwan Semiconductor Manufacturing Company, Ltd., ADR | 795,780 | 18,740,619 | ||||||||||||
United Kingdom 13.4% | 283,909,423 | |||||||||||||
AstraZeneca PLC, ADR | 956,280 | 27,416,548 | ||||||||||||
BAE Systems PLC | 3,934,670 | 27,894,187 | ||||||||||||
British American Tobacco PLC | 526,760 | 28,657,910 | ||||||||||||
Diageo PLC | 599,400 | 15,404,769 | ||||||||||||
GlaxoSmithKline PLC | 1,571,810 | 30,461,697 | ||||||||||||
Imperial Tobacco Group PLC | 682,535 | 35,229,517 | ||||||||||||
National Grid PLC | 3,140,770 | 41,947,389 | ||||||||||||
SSE PLC | 1,058,235 | 20,269,211 | ||||||||||||
Unilever PLC | 474,795 | 20,284,403 | ||||||||||||
Vodafone Group PLC | 11,983,212 | 36,343,792 | ||||||||||||
United States 48.7% | 1,035,604,289 | |||||||||||||
AbbVie, Inc. | 310,555 | 16,959,409 | ||||||||||||
Altria Group, Inc. | 553,225 | 34,062,063 | ||||||||||||
Ameren Corp. | 561,685 | 26,371,111 | ||||||||||||
Arthur J. Gallagher & Company | 269,080 | 10,722,838 | ||||||||||||
AT&T, Inc. | 1,228,120 | 45,379,034 | ||||||||||||
Automatic Data Processing, Inc. | 169,970 | 14,394,759 | ||||||||||||
California Resources Corp. | 39,490 | 22,197 | ||||||||||||
CenturyLink, Inc. | 1,068,610 | 32,688,780 | ||||||||||||
CME Group, Inc. | 186,900 | 17,090,136 | ||||||||||||
Corrections Corp. of America | 813,785 | 23,542,800 | ||||||||||||
Duke Energy Corp. | 487,098 | 36,181,639 | ||||||||||||
Eaton Corp. PLC | 275,900 | 15,646,289 | ||||||||||||
Emerson Electric Company | 307,720 | 15,025,968 | ||||||||||||
Entergy Corp. | 423,830 | 30,604,764 | ||||||||||||
Enterprise Products Partners LP | 534,330 | 12,487,292 | ||||||||||||
Exxon Mobil Corp. | 231,285 | 18,537,493 | ||||||||||||
Iron Mountain, Inc. | 1,024,210 | 30,091,290 | ||||||||||||
Johnson & Johnson | 135,885 | 14,296,461 |
Shares | Value | |||||||||||||
United States (continued) | ||||||||||||||
Kimberly-Clark Corp. | 192,590 | $25,094,477 | ||||||||||||
Lockheed Martin Corp. | 82,110 | 17,718,517 | ||||||||||||
McDonald's Corp. | 247,310 | 28,982,259 | ||||||||||||
Merck & Company, Inc. | 299,260 | 15,025,845 | ||||||||||||
Microchip Technology, Inc. | 354,010 | 15,749,905 | ||||||||||||
Microsoft Corp. | 273,740 | 13,927,891 | ||||||||||||
Occidental Petroleum Corp. | 420,105 | 28,911,626 | ||||||||||||
People's United Financial, Inc. | 1,019,540 | 14,895,479 | ||||||||||||
PepsiCo, Inc. | 144,480 | 14,133,034 | ||||||||||||
Pfizer, Inc. | 416,310 | 12,351,918 | ||||||||||||
Philip Morris International, Inc. | 485,210 | 44,168,666 | ||||||||||||
PPL Corp. | 1,167,720 | 40,858,523 | ||||||||||||
Regal Entertainment Group, Class A | 826,930 | 16,282,252 | ||||||||||||
Reynolds American, Inc. | 706,144 | 35,610,842 | ||||||||||||
RR Donnelley & Sons Company | 1,235,730 | 18,758,381 | ||||||||||||
Seagate Technology PLC | 584,325 | 18,324,432 | ||||||||||||
TECO Energy, Inc. | 598,490 | 16,440,520 | ||||||||||||
Texas Instruments, Inc. | 349,280 | 18,518,826 | ||||||||||||
The Coca-Cola Company | 309,620 | 13,353,911 | ||||||||||||
The Dow Chemical Company | 502,205 | 24,412,185 | ||||||||||||
The Procter & Gamble Company | 208,595 | 16,748,093 | ||||||||||||
The Southern Company | 374,750 | 18,055,455 | ||||||||||||
United Parcel Service, Inc., Class B | 166,600 | 16,085,230 | ||||||||||||
Verizon Communications, Inc. | 868,499 | 44,058,954 | ||||||||||||
Waste Management, Inc. | 281,360 | 15,713,956 | ||||||||||||
WEC Energy Group, Inc. | 722,176 | 40,694,618 | ||||||||||||
Wells Fargo & Company | 362,500 | 17,008,500 | ||||||||||||
Welltower, Inc. | 621,130 | 39,615,671 | ||||||||||||
Yield (%) | Shares | Value | ||||||||||||
Short-term investments 2.7% | $57,322,877 | |||||||||||||
(Cost $57,322,877) | ||||||||||||||
Money market funds 2.7% | 57,322,877 | |||||||||||||
Fidelity Institutional Money Market Government Portfolio | 0.2100(Y | ) | 57,322,877 | 57,322,877 | ||||||||||
Total investments (Cost $1,974,484,955)† 99.6% | $2,118,566,545 | |||||||||||||
Other assets and liabilities, net 0.4% | $8,817,529 | |||||||||||||
Total net assets 100.0% | $2,127,384,074 |
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund. | ||||||||||||||
Key to Security Abbreviations and Legend | ||||||||||||||
ADR | American Depositary Receipts | |||||||||||||
(Y) | The rate shown is the annualized seven-day yield as of 2-29-16. | |||||||||||||
† | At 2-29-16, the aggregate cost of investment securities for federal income tax purposes was $1,982,296,423. Net unrealized appreciation aggregated to $136,270,122, of which $275,194,221 related to appreciated investment securities and $138,924,099 related to depreciated investment securities. |
Financial statements
STATEMENT OF ASSETS AND LIABILITIES 2-29-16
Assets | |||||||||||||||||||||||||||||||||
Investments, at value (Cost $1,974,484,955) | 2,118,566,545 | ||||||||||||||||||||||||||||||||
Foreign currency, at value (Cost $155,271) | 153,421 | ||||||||||||||||||||||||||||||||
Receivable for fund shares sold | 4,624,466 | ||||||||||||||||||||||||||||||||
Dividends and interest receivable | 9,923,172 | ||||||||||||||||||||||||||||||||
Other receivables and prepaid expenses | 84,737 | ||||||||||||||||||||||||||||||||
Total assets | 2,133,352,341 | ||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Payable for fund shares repurchased | 5,391,985 | ||||||||||||||||||||||||||||||||
Payable to affiliates | |||||||||||||||||||||||||||||||||
Accounting and legal services fees | 57,619 | ||||||||||||||||||||||||||||||||
Transfer agent fees | 136,417 | ||||||||||||||||||||||||||||||||
Distribution and service fees | 388 | ||||||||||||||||||||||||||||||||
Trustees' fees | 1,421 | ||||||||||||||||||||||||||||||||
Other liabilities and accrued expenses | 380,437 | ||||||||||||||||||||||||||||||||
Total liabilities | 5,968,267 | ||||||||||||||||||||||||||||||||
Net assets | $2,127,384,074 | ||||||||||||||||||||||||||||||||
Net assets consist of | |||||||||||||||||||||||||||||||||
Paid-in capital | $2,088,061,543 | ||||||||||||||||||||||||||||||||
Undistributed net investment income | 10,644,321 | ||||||||||||||||||||||||||||||||
Accumulated net realized gain (loss) on investments and foreign currency transactions | (115,275,335 | ) | |||||||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | 143,953,545 | ||||||||||||||||||||||||||||||||
Net assets | $2,127,384,074 | ||||||||||||||||||||||||||||||||
Net asset value per share | |||||||||||||||||||||||||||||||||
Based on net asset values and shares outstanding - The fund has an unlimited number of shares authorized with no par value | |||||||||||||||||||||||||||||||||
Class A ($469,612,468 ÷ 47,475,315 shares)1 | $9.89 | ||||||||||||||||||||||||||||||||
Class B ($11,975,727 ÷ 1,210,660 shares)1 | $9.89 | ||||||||||||||||||||||||||||||||
Class C ($133,191,627 ÷ 13,458,932 shares)1 | $9.90 | ||||||||||||||||||||||||||||||||
Class I ($956,618,340 ÷ 96,338,239 shares) | $9.93 | ||||||||||||||||||||||||||||||||
Class R2 ($899,523 ÷ 90,617 shares) | $9.93 | ||||||||||||||||||||||||||||||||
Class R6 ($888,083 ÷ 89,563 shares) | $9.92 | ||||||||||||||||||||||||||||||||
Class NAV ($554,198,306 ÷ 55,841,194 shares) | $9.92 | ||||||||||||||||||||||||||||||||
Maximum offering price per share | |||||||||||||||||||||||||||||||||
Class A (net assets value per share ÷ 95%)2 | $10.41 |
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. |
STATEMENT OF OPERATIONS For the year ended 2-29-16
Investment income | ||||||||||||||||||||||||
Dividends | $111,017,390 | |||||||||||||||||||||||
Less foreign taxes withheld | (5,692,623 | ) | ||||||||||||||||||||||
Total investment income | 105,324,767 | |||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Investment management fees | 19,519,728 | |||||||||||||||||||||||
Distribution and service fees | 3,291,585 | |||||||||||||||||||||||
Accounting and legal services fees | 335,070 | |||||||||||||||||||||||
Transfer agent fees | 2,100,029 | |||||||||||||||||||||||
Trustees' fees | 34,352 | |||||||||||||||||||||||
State registration fees | 205,968 | |||||||||||||||||||||||
Printing and postage | 182,750 | |||||||||||||||||||||||
Professional fees | 205,659 | |||||||||||||||||||||||
Custodian fees | 485,451 | |||||||||||||||||||||||
Registration and filing fees | 33,972 | |||||||||||||||||||||||
Other | 74,142 | |||||||||||||||||||||||
Total expenses | 26,468,706 | |||||||||||||||||||||||
Less expense reductions | (194,887 | ) | ||||||||||||||||||||||
Net expenses | 26,273,819 | |||||||||||||||||||||||
Net investment income | 79,050,948 | |||||||||||||||||||||||
Realized and unrealized gain (loss) | ||||||||||||||||||||||||
Net realized gain (loss) on | ||||||||||||||||||||||||
Investments and foreign currency transactions | (19,547,888 | ) | ||||||||||||||||||||||
(19,547,888 | ) | |||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of | ||||||||||||||||||||||||
Investments and translation of assets and liabilities in foreign currencies | (304,309,620 | ) | ||||||||||||||||||||||
(304,309,620 | ) | |||||||||||||||||||||||
Net realized and unrealized loss | (323,857,508 | ) | ||||||||||||||||||||||
Decrease in net assets from operations | ($244,806,560 | ) |
STATEMENTS OF CHANGES IN NET ASSETS
Year ended 2-29-16 | Year ended 2-28-15 | |||||||||||||||||||||||||||||||||||||||||||||||
Increase (decrease) in net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
From operations | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | $79,050,948 | $78,990,253 | ||||||||||||||||||||||||||||||||||||||||||||||
Net realized gain (loss) | (19,547,888 | ) | 61,397,066 | |||||||||||||||||||||||||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) | (304,309,620 | ) | 48,574,230 | |||||||||||||||||||||||||||||||||||||||||||||
Increase (decrease) in net assets resulting from operations | (244,806,560 | ) | 188,961,549 | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to shareholders | ||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||||||||||||||||||||||||||
Class A | (15,908,865 | ) | (20,928,672 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class B | (312,238 | ) | (486,696 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class C | (3,515,222 | ) | (4,343,243 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class I | (36,220,453 | ) | (42,929,623 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R2 | (33,565 | ) | (29,513 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R6 | (29,367 | ) | (12,521 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class NAV | (21,679,609 | ) | (27,036,853 | ) | ||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | ||||||||||||||||||||||||||||||||||||||||||||||||
Class A | (22,412,725 | ) | (19,485,409 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class B | (586,723 | ) | (590,390 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class C | (6,495,421 | ) | (5,577,950 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class I | (44,789,082 | ) | (42,201,354 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R2 | (48,929 | ) | (36,286 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R6 | (42,665 | ) | (12,656 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class NAV | (27,209,972 | ) | (24,485,458 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (179,284,836 | ) | (188,156,624 | ) | ||||||||||||||||||||||||||||||||||||||||||||
From fund share transactions | (154,387,828 | ) | 461,724,827 | |||||||||||||||||||||||||||||||||||||||||||||
Total increase (decrease) | (578,479,224 | ) | 462,529,752 | |||||||||||||||||||||||||||||||||||||||||||||
Net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning of year | 2,705,863,298 | 2,243,333,546 | ||||||||||||||||||||||||||||||||||||||||||||||
End of year | $2,127,384,074 | $2,705,863,298 | ||||||||||||||||||||||||||||||||||||||||||||||
Undistributed net investment income | $10,644,321 | $7,541,308 |
Financial highlights
Class A Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $11.78 | $11.74 | $10.46 | $9.81 | $9.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.33 | 0.36 | 0.45 | 2 | 0.29 | 0.26 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.42 | ) | 0.55 | 1.57 | 0.63 | 0.29 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.09 | ) | 0.91 | 2.02 | 0.92 | 0.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.32 | ) | (0.44 | ) | (0.31 | ) | (0.27 | ) | (0.24 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.80 | ) | (0.87 | ) | (0.74 | ) | (0.27 | ) | (0.24 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $9.89 | $11.78 | $11.74 | $10.46 | $9.81 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3,4 | (9.38 | ) | 8.10 | 19.85 | 9.66 | 5.98 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $470 | $580 | $553 | $276 | $215 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.29 | 1.33 | 1.34 | 1.43 | 1.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.28 | 1.32 | 1.34 | 1.42 | 1.42 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.03 | 2.99 | 4.01 | 2 | 2.92 | 2.78 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 33 | 23 | 40 | 21 | 19 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net Investment income per share and the percentage of average net assets reflects special dividends received by the fund, which amounted to $0.08 and 0.72%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Class B Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $11.78 | $11.74 | $10.46 | $9.81 | $9.49 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.25 | 0.27 | 0.35 | 2 | 0.22 | 0.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.42 | ) | 0.55 | 1.58 | 0.64 | 0.29 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.17 | ) | 0.82 | 1.93 | 0.86 | 0.49 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.24 | ) | (0.35 | ) | (0.22 | ) | (0.21 | ) | (0.17 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.72 | ) | (0.78 | ) | (0.65 | ) | (0.21 | ) | (0.17 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $9.89 | $11.78 | $11.74 | $10.46 | $9.81 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3,4 | (10.10 | ) | 7.26 | 18.95 | 8.90 | 5.33 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $12 | $17 | $17 | $11 | $8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.02 | 2.10 | 2.15 | 2.29 | 2.54 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 2.02 | 2.10 | 2.12 | 2.12 | 2.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.31 | 2.24 | 3.11 | 2 | 2.21 | 2.17 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 33 | 23 | 40 | 21 | 19 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net Investment income per share and the percentage of average net assets reflects special dividends received by the fund, which amounted to $0.08 and 0.72%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Class C Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $11.79 | $11.74 | $10.46 | $9.81 | $9.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.25 | 0.27 | 0.36 | 2 | 0.22 | 0.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.41 | ) | 0.56 | 1.58 | 0.64 | 0.28 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.16 | ) | 0.83 | 1.94 | 0.86 | 0.48 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.25 | ) | (0.35 | ) | (0.23 | ) | (0.21 | ) | (0.17 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.73 | ) | (0.78 | ) | (0.66 | ) | (0.21 | ) | (0.17 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $9.90 | $11.79 | $11.74 | $10.46 | $9.81 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3,4 | (10.02 | ) | 7.42 | 18.97 | 8.90 | 5.22 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $133 | $168 | $127 | $65 | $45 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.99 | 2.03 | 2.05 | 2.15 | 2.29 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.98 | 2.02 | 2.05 | 2.12 | 2.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.33 | 2.24 | 3.22 | 2 | 2.22 | 2.13 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 33 | 23 | 40 | 21 | 19 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net Investment income per share and the percentage of average net assets reflects special dividends received by the fund, which amounted to $0.08 and 0.72%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Class I Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $11.83 | $11.78 | $10.49 | $9.84 | $9.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.37 | 0.39 | 0.47 | 2 | 0.31 | 0.32 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.43 | ) | 0.56 | 1.59 | 0.65 | 0.27 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.06 | ) | 0.95 | 2.06 | 0.96 | 0.59 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.36 | ) | (0.47 | ) | (0.34 | ) | (0.31 | ) | (0.28 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.84 | ) | (0.90 | ) | (0.77 | ) | (0.31 | ) | (0.28 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $9.93 | $11.83 | $11.78 | $10.49 | $9.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3 | (9.13 | ) | 8.50 | 20.28 | 10.07 | 6.45 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $957 | $1,242 | $893 | $641 | $249 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 0.97 | 1.01 | 1.01 | 1.05 | 1.12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.97 | 1.00 | 1.01 | 1.03 | 0.97 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.37 | 3.24 | 4.19 | 2 | 3.10 | 3.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 33 | 23 | 40 | 21 | 19 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net Investment income per share and the percentage of average net assets reflects special dividends received by the fund, which amounted to $0.08 and 0.72%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Class R2 Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $11.82 | $11.78 | $10.49 | $9.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.32 | 0.31 | 0.50 | 3 | 0.29 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.43 | ) | 0.58 | 1.52 | 0.63 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.11 | ) | 0.89 | 2.02 | 0.92 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.30 | ) | (0.42 | ) | (0.30 | ) | (0.27 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.78 | ) | (0.85 | ) | (0.73 | ) | (0.27 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $9.93 | $11.82 | $11.78 | $10.49 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | (9.51 | ) | 7.93 | 19.78 | 9.58 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1 | $1 | $1 | — | 5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.86 | 3.22 | 8.52 | 19.42 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.43 | 1.47 | 1.47 | 1.47 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.92 | 2.66 | 4.38 | 3 | 2.91 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 33 | 23 | 40 | 21 |
1 | The inception date for Class R2 shares is 3-1-12. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Net Investment income per share and the percentage of average net assets reflects special dividends received by the fund, which amounted to $0.08 and 0.72%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Less than $500,000. |
Class R6 Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | 1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $11.81 | $11.77 | $10.49 | $9.84 | $9.29 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.38 | 0.39 | 0.48 | 3 | 0.33 | 0.13 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.42 | ) | 0.57 | 1.58 | 0.64 | 0.52 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.04 | ) | 0.96 | 2.06 | 0.97 | 0.65 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.37 | ) | (0.49 | ) | (0.35 | ) | (0.32 | ) | (0.10 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.85 | ) | (0.92 | ) | (0.78 | ) | (0.32 | ) | (0.10 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $9.92 | $11.81 | $11.77 | $10.49 | $9.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | (8.94 | ) | 8.56 | 20.29 | 10.12 | 7.12 | 5 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1 | — | 6 | — | 6 | — | 6 | — | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.45 | 6.51 | 10.30 | 10.38 | 15.93 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.85 | 0.87 | 0.97 | 0.97 | 0.97 | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.48 | 3.32 | 4.26 | 3 | 3.29 | 2.82 | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 33 | 23 | 40 | 21 | 19 | 8 |
1 | The inception date for Class R6 shares is 9-1-11. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Net Investment income per share and the percentage of average net assets reflects special dividends received by the fund, which amounted to $0.08 and 0.72%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Less than $500,000. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | The portfolio turnover is shown for the period from 3-1-11 to 2-29-12. |
Class NAV Shares Period ended | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $11.82 | $11.78 | $10.49 | $9.84 | $9.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 0.37 | 0.41 | 0.49 | 2 | 0.35 | 0.29 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | (1.42 | ) | 0.55 | 1.59 | 0.62 | 0.31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | (1.05 | ) | 0.96 | 2.08 | 0.97 | 0.60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.37 | ) | (0.49 | ) | (0.36 | ) | (0.32 | ) | (0.29 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.85 | ) | (0.92 | ) | (0.79 | ) | (0.32 | ) | (0.29 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $9.92 | $11.82 | $11.78 | $10.49 | $9.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3 | (9.03 | ) | 8.57 | 20.47 | 10.17 | 6.53 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $554 | $696 | $653 | $944 | $1,019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 0.86 | 0.88 | 0.88 | 0.90 | 0.99 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.85 | 0.87 | 0.87 | 0.89 | 0.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.45 | 3.42 | 4.35 | 2 | 3.56 | 3.11 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 33 | 23 | 40 | 21 | 19 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Net Investment income per share and the percentage of average net assets reflects special dividends received by the fund, which amounted to $0.08 and 0.72%, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
Note 1 — Organization
John Hancock Global Shareholder Yield Fund (the fund) is a series of John Hancock Funds III (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 to provide a high level of income. Capital appreciation is a secondary investment objective.
The fund may offer multiple classes of shares. The shares currently offered are detailed in the Statement 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 R2 shares are available only to certain retirement plans. Class R6 shares are available only to certain retirement plans, institutions and other investors. Class NAV shares are offered to John Hancock affiliated funds of funds and certain 529 plans. 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, state registration fees and printing and postage for each class may differ. Class B shares convert to Class A shares eight years after purchase.
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 NAV may be determined as of the regularly schedule close of the NYSE pursuant to the fund's Valuation Policies and Procedures. The time at which shares and transactions are priced and until which orders are accepted may vary to the extent permitted by the Securities and Exchange Commission and applicable regulations. 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 was acquired or most likely will be sold. 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, including John Hancock Collateral Trust (JHCT), are valued at their respective net asset values each business day. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rates supplied by an independent pricing vendor. Securities that trade only in the over-the-counter (OTC) market are valued using bid 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. Trading in foreign securities may be completed before the scheduled daily close of trading on the NYSE. Significant events at the issuer or market level may affect the values of securities between the time when the valuation of the securities is generally determined and the close of the NYSE. If a significant event occurs, these securities may be fair valued, as determined in good faith by the fund's Pricing Committee, following procedures established by the Board of Trustees. The fund uses fair value adjustment factors provided by an independent pricing vendor to value certain foreign securities in order to adjust for events that may occur between the close of foreign exchanges or markets and the close of the NYSE.
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.
The following is a summary of the values by input classification of the fund's investments as of February 29, 2016, by major security category or type:
Total value at 2-29-16 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | ||
Common stocks | |||||
Australia | $68,553,594 | — | $68,553,594 | — | |
Canada | 121,436,558 | $121,436,558 | — | — | |
France | 151,325,821 | — | 151,325,821 | — | |
Germany | 138,454,112 | — | 138,454,112 | — | |
Italy | 36,785,633 | — | 36,785,633 | — | |
Netherlands | 27,048,548 | 27,048,548 | — | — | |
Norway | 61,362,274 | — | 61,362,274 | — | |
Singapore | 27,586,771 | — | 27,586,771 | — | |
Spain | 13,382,409 | — | 13,382,409 | — | |
Sweden | 19,640,837 | — | 19,640,837 | — | |
Switzerland | 57,412,780 | — | 57,412,780 | — | |
Taiwan | 18,740,619 | 18,740,619 | — | — | |
United Kingdom | 283,909,423 | 27,416,548 | 256,492,875 | — | |
United States | 1,035,604,289 | 1,035,604,289 | — | — | |
Short-term investments | 57,322,877 | 57,322,877 | — | — | |
Total investments in securities | $2,118,566,545 | $1,287,569,439 | $830,997,106 | — |
Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. 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. Distributions received on securities that represent a tax return of capital or capital gain are recorded as a reduction of cost of investments and/or as a realized gain if amounts are estimable. Foreign taxes are provided for based on the fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds from litigation.
Foreign currency translation. 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.
Funds that invest internationally generally carry more risk than funds that invest strictly in U.S. securities. These risks are heightened for investments in emerging markets. Risks can result from differences in economic and political conditions, regulations, market practices (including higher transaction costs), accounting standards and other factors. Foreign investments are also 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.
Foreign taxes. The fund may be subject to withholding tax on income and/or capital gains or repatriation taxes imposed by certain countries in which the fund invests. Taxes are accrued based upon investment income, realized gains or unrealized appreciation.
Line of credit. The fund may 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. (Citibank) as the administrative agent, that enables them to participate in a $750 million unsecured committed line of credit. Prior to June 30, 2015, the fund and other affiliated funds had an agreement with Citibank that enabled them to participate in a $300 million unsecured committed line of credit. A commitment fee, payable at the end of each calendar quarter, based on the average daily unused portion of the effective line of credit, is charged to each participating fund on a pro rata basis and is reflected in Other expenses on the Statement of operations. Commitment fees for the year ended February 29, 2016 were $4,006. For the year ended February 29, 2016, the fund had no borrowings under either line of credit.
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, state registration fees and printing and postage, for all classes, are calculated daily at the class level based on the net assets of each class and the specific expense rates applicable to each class. Through June 30, 2015, class-specific expenses, such as state registration fees and printing and postage, for all classes were calculated 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.
For federal income tax purposes, net capital losses of $107,463,867 that are the result of security transactions occurring after October 31, 2015, are treated as occurring on March 1, 2016, the first day of the fund's next taxable year.
As of February 29, 2016, 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 typically declares and pays dividends quarterly. Capital gain distributions, if any, at least annually.
The tax character of distributions for the years ended February 29, 2016 and February 28, 2015 was as follows:
February 28, 2016 | February 28, 2015 | |
Ordinary Income | $77,699,319 | $95,767,121 |
Long-Term Capital Gain | 101,585,517 | 92,389,503 |
Total | $179,284,836 | $188,156,624 |
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. As of February 29, 2016, the components of distributable earnings on a tax basis consisted of $10,644,321 of undistributed ordinary income.
Such distributions and distributable earnings, 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.
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 partnerships.
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 daily management fee to the Advisor, equivalent on an annual basis to the sum of 0.800% of average daily net assets. The Advisor has a subadvisory agreement with Epoch Investment Partners, Inc. 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 year ended February 29, 2016, this waiver amounted to 0.01% of the fund's average net assets. This arrangement may be amended or terminated at any time by the Advisor upon notice to the fund and with the approval of the Board of Trustees.
The Advisor has contractually agreed to waive all or a portion of its management fee and/or reimburse or pay operating expenses of the fund to the extent necessary to maintain the fund's total operating expenses at 1.47% for Class R2 shares, excluding certain expenses such as taxes, brokerage commissions, interest expense, litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the fund's business, acquired fund fees and short dividend expense. The expense limitation expires on June 30, 2016, unless renewed by mutual agreement of the fund and the Advisor based upon a determination that this is appropriate under the circumstances at the time. Prior to July 1, 2015, Class R6 shares had waivers and/or reimbursement such that expenses would not exceed 0.97% for Class R6 shares.
Prior to July 1, 2015, the Advisor contractually agreed to waive and/or reimburse all class specific expenses for Class B shares of the fund, including Rule 12b-1 fees and transfer agency fees and service fees, as applicable, to the extent they exceed 1.30% of average annual net assets (on an annualized basis) attributable to Class B shares (the Class Expense Waiver).
The Advisor has contractually agreed to waive and/or reimburse all class specific expenses for Class R6 shares of the fund to the extent they exceed 0.00% of average annual net assets, on an annualized basis. The expense limitation expires on June 30, 2017, unless renewed by mutual agreement of the fund and the Advisor based upon a determination that this is appropriate under the circumstances at the time.
Effective September 1, 2015, the Advisor voluntarily agrees to reduce its management fee or, if necessary, make payment to Class R2 shares of the fund, in an amount equal to the amount by which the expenses of Class R2 shares exceed 1.38% of the average annual net assets (on an annualized basis) attributable to the class. For purposes of this agreement, "expenses of the fund" means all the expenses of the share class (including fund expenses attributable to the class), excluding: (a) taxes; (b) brokerage commissions; (c) interest expense; (d) litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the fund's business; (e) acquired fund fees and expenses paid indirectly; (f) borrowing costs; (g) prime brokerage fees; and (h) short dividend expense. This agreement will continue in effect until terminated at any time by the Advisor on notice to the fund.
The expense reductions described above amounted to the following for the year ended February 29, 2016:
Class | Expense reductions | Class | Expense reductions | |
Class A | $40,289 | Class R2 | $4,914 | |
Class B | 1,079 | Class R6 | 5,387 | |
Class C | 11,715 | Class NAV | 48,178 | |
Class I | 83,325 | Total | $194,887 |
The investment management fees, including the impact of the waivers and reimbursements as described above, incurred for the year ended February 29, 2016 were equivalent to a net annual effective rate of 0.79% of the fund's average daily net assets.
Accounting and legal services. Pursuant to a service agreement, the fund reimburses the Advisor for all expenses associated with providing the administrative, financial, legal, 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 year ended February 29, 2016 amounted to an annual rate of 0.01% 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 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 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 A | 0.30% | — |
Class B | 1.00% | — |
Class C | 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 $3,028,331 for the year ended February 29, 2016. Of this amount, $521,421 was retained and used for
printing prospectuses, advertising, sales literature and other purposes, $2,501,723 was paid as sales commissions to broker-dealers and $5,187 was paid as sales commissions to sales personnel of Signator Investors, Inc., a broker-dealer affiliate of the Advisor.
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 year ended February 29, 2016, CDSCs received by the Distributor amounted to $5,358, $18,596 and $20,793 for Class A, Class B and Class C shares, respectively.
Transfer agent fees. The fund has a 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 year ended February 29, 2016 were:
Class | Distribution and service fees | Transfer agent fees | State registration fees | Printing and postage |
Class A | $1,596,454 | $667,973 | $18,682 | $18,279 |
Class B | 142,483 | 17,893 | 5,175 | 465 |
Class C | 1,547,063 | 194,199 | 8,046 | 3,479 |
Class I | — | 1,219,640 | 24,944 | 31,112 |
Class R2 | 5,585 | 181 | 5,563 | 62 |
Class R6 | — | 143 | 5,119 | 56 |
Total | $3,291,585 | $2,100,029 | $67,529 | $53,453 |
Effective July 1, 2015, state registration fees and printing and postage are treated as fund level expenses and are not included in the table above. For the period July 1, 2015 to February 29, 2016, state registration fees and printing and postage amounted to $138,439 and $129,297, respectively.
Trustee expenses. The fund 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 each 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 fund shares for the years ended February 29, 2016 and February 28, 2015 were as follows:
Year ended 2-29-16 | Year ended 2-28-15 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class A shares | ||||||||||||||||||||||||||
Sold | 12,988,813 | $141,830,521 | 20,719,507 | $248,267,051 | ||||||||||||||||||||||
Distributions reinvested | 3,650,890 | 37,774,679 | 3,469,242 | 39,825,466 | ||||||||||||||||||||||
Repurchased | (18,406,136 | ) | (198,023,915 | ) | (22,029,303 | ) | (258,739,581 | ) | ||||||||||||||||||
Net increase (decrease) | (1,766,433 | ) | ($18,418,715 | ) | 2,159,446 | $29,352,936 | ||||||||||||||||||||
Class B shares | ||||||||||||||||||||||||||
Sold | 37,856 | $406,269 | 166,047 | $1,961,689 | ||||||||||||||||||||||
Distributions reinvested | 69,139 | 713,045 | 74,877 | 856,685 | ||||||||||||||||||||||
Repurchased | (307,309 | ) | (3,306,303 | ) | (238,338 | ) | (2,849,017 | ) | ||||||||||||||||||
Net increase (decrease) | (200,314 | ) | ($2,186,989 | ) | 2,586 | ($30,643 | ) | |||||||||||||||||||
Class C shares | ||||||||||||||||||||||||||
Sold | 2,552,507 | $28,296,220 | 4,752,670 | $56,729,485 | ||||||||||||||||||||||
Distributions reinvested | 902,501 | 9,313,786 | 781,411 | 8,933,617 | ||||||||||||||||||||||
Repurchased | (4,277,843 | ) | (45,937,158 | ) | (2,090,014 | ) | (24,867,403 | ) | ||||||||||||||||||
Net increase (decrease) | (822,835 | ) | ($8,327,152 | ) | 3,444,067 | $40,795,699 | ||||||||||||||||||||
Class I shares | ||||||||||||||||||||||||||
Sold | 25,978,642 | $282,688,478 | 44,841,443 | $538,638,175 | ||||||||||||||||||||||
Distributions reinvested | 7,630,235 | 79,403,301 | 7,155,019 | 82,144,457 | ||||||||||||||||||||||
Repurchased | (42,313,928 | ) | (456,473,543 | ) | (22,743,540 | ) | (270,635,958 | ) | ||||||||||||||||||
Net increase (decrease) | (8,705,051 | ) | ($94,381,764 | ) | 29,252,922 | $350,146,674 | ||||||||||||||||||||
Class R2 shares | ||||||||||||||||||||||||||
Sold | 42,457 | $455,553 | 75,096 | $890,451 | ||||||||||||||||||||||
Distributions reinvested | 7,751 | 80,387 | 4,971 | 56,777 | ||||||||||||||||||||||
Repurchased | (73,045 | ) | (768,518 | ) | (11,879 | ) | (134,980 | ) | ||||||||||||||||||
Net increase (decrease) | (22,837 | ) | ($232,578 | ) | 68,188 | $812,248 | ||||||||||||||||||||
Class R6 shares | ||||||||||||||||||||||||||
Sold | 77,540 | $867,395 | 16,700 | $197,531 | ||||||||||||||||||||||
Distributions reinvested | 6,783 | 69,824 | 1,336 | 15,272 | ||||||||||||||||||||||
Repurchased | (29,617 | ) | (316,169 | ) | (2,266 | ) | (26,284 | ) | ||||||||||||||||||
Net increase | 54,706 | $621,050 | 15,770 | $186,519 | ||||||||||||||||||||||
Class NAV shares | ||||||||||||||||||||||||||
Sold | 918,471 | $10,328,098 | 5,275,151 | $63,578,517 | ||||||||||||||||||||||
Distributions reinvested | 4,706,809 | 48,889,581 | 4,483,816 | 51,522,311 | ||||||||||||||||||||||
Repurchased | (8,691,173 | ) | (90,679,359 | ) | (6,277,534 | ) | (74,639,434 | ) | ||||||||||||||||||
Net increase (decrease) | (3,065,893 | ) | ($31,461,680 | ) | 3,481,433 | $40,461,394 | ||||||||||||||||||||
Total net increase (decrease) | (14,528,657 | ) | ($154,387,828 | ) | 38,424,412 | $461,724,827 |
Affiliates of the fund owned 100% of shares of beneficial interest of Class NAV, respectively, on February 29, 2016.
Note 6 — Purchase and sale of securities
Purchases and sales of securities, other than short-term investments, amounted to $783,152,156 and $999,324,744, respectively, for the year ended February 29, 2016.
Note 7 — Investment by affiliated funds
Certain investors in the fund are affiliated funds that are managed by the Advisor and its affiliates. The affiliated funds do not invest in the fund for the purpose of exercising management or control; however, this investment may represent a significant portion of the fund's net assets. At February 29, 2016, funds within the John Hancock group of funds complex held 25.9% of the fund's net assets. The following funds had an affiliate ownership of 5% or more of the fund's net assets:
Fund | Affiliate concentration |
John Hancock Funds II Lifestyle Growth Portfolio | 8.4% |
John Hancock Funds II Lifestyle Balanced Portfolio | 8.0% |
Report of Independent Registered Public Accounting Firm
To the Board of Trustees of John Hancock Funds III and Shareholders of John Hancock Global Shareholder Yield Fund:
In our opinion, the accompanying statement of assets and liabilities, including the fund's investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of John Hancock Global Shareholder Yield Fund (the "Fund") at February 29, 2016, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods indicated, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at February 29, 2016 by correspondence with the custodian, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
April 14, 2016
Unaudited
For federal income tax purposes, the following information is furnished with respect to the distributions of the fund, if any, paid during its taxable year ended February 29, 2016.
The fund reports the maximum amount allowable of its net taxable income as eligible for the corporate dividends-received deduction.
The fund reports the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The fund paid $101,585,517 in capital gain dividends.
Eligible shareholders will be mailed a 2016 Form 1099-DIV in early 2017. This will reflect the tax character of all distributions paid in calendar year 2016.
Please consult a tax advisor regarding the tax consequences of your investment in the fund.
This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the fund and execute policies formulated by the Trustees.
Independent Trustees
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
James M. Oates, Born: 1946 | 2012 | 228 |
Trustee and Chairperson of the Board Managing Director, Wydown Group (financial consulting firm) (since 1994); Chairman and Director, Emerson Investment Management, Inc. (since 2000); Independent Chairman, Hudson Castle Group, Inc. (formerly IBEX Capital Markets, Inc.) (financial services company) (1997-2011); Director, Stifel Financial (since 1996); Director, Investor Financial Services Corporation (1995-2007); Director, Connecticut River Bancorp (1998-2014); Director, Virtus Funds (formerly Phoenix Mutual Funds) (since 1988). Trustee and Chairperson of the Board, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee and Chairperson of the Board, John Hancock retail funds3 (since 2012); Trustee (2005-2006 and since 2012) and Chairperson of the Board (since 2012), John Hancock Funds III; Trustee (since 2004) and Chairperson of the Board (since 2005), John Hancock Variable Insurance Trust; Trustee and Chairperson of the Board, John Hancock Funds II (since 2005). |
Charles L. Bardelis,2 Born: 1941 | 2012 | 228 |
Trustee Director, Island Commuter Corp. (marine transport). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Funds III (2005-2006 and since 2012); Trustee, John Hancock Variable Insurance Trust (since 1988); Trustee, John Hancock Funds II (since 2005). |
Peter S. Burgess,2 Born: 1942 | 2012 | 228 |
Trustee Consultant (financial, accounting, and auditing matters) (since 1999); Certified Public Accountant; Partner, Arthur Andersen (independent public accounting firm) (prior to 1999); Director, Lincoln Educational Services Corporation (since 2004); Director, Symetra Financial Corporation (2010-2016); Director, PMA Capital Corporation (2004-2010). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Funds III (2005-2006 and since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2005). |
William H. Cunningham, Born: 1944 | 2006 | 228 |
Trustee Professor, University of Texas, Austin, Texas (since 1971); former Chancellor, University of Texas System and former President of the University of Texas, Austin, Texas; Chairman (since 2009) and Director (since 2006), Lincoln National Corporation (insurance); Director, Southwest Airlines (since 2000); former Director, LIN Television (2009-2014). Trustee, John Hancock retail funds3 (since 1986); Trustee, John Hancock Variable Insurance Trust (since 2012); Trustee, John Hancock Funds II (2005-2006 and since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Grace K. Fey, Born: 1946 | 2012 | 228 |
Trustee Chief Executive Officer, Grace Fey Advisors (since 2007); Director and Executive Vice President, Frontier Capital Management Company (1988-2007); Director, Fiduciary Trust (since 2009). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2008). |
Independent Trustees (continued)
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
Theron S. Hoffman,2 Born: 1947 | 2012 | 228 |
Trustee Chief Executive Officer, T. Hoffman Associates, LLC (consulting firm) (since 2003); Director, The Todd Organization (consulting firm) (2003-2010); President, Westport Resources Management (investment management consulting firm) (2006-2008); Senior Managing Director, Partner, and Operating Head, Putnam Investments (2000-2003); Executive Vice President, The Thomson Corp. (financial and legal information publishing) (1997-2000). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2008). |
Deborah C. Jackson, Born: 1952 | 2008 | 228 |
Trustee President, Cambridge College, Cambridge, Massachusetts (since 2011); Chief Executive Officer, American Red Cross of Massachusetts Bay (2002-2011); Board of Directors of Eastern Bank Corporation (since 2001); Board of Directors of Eastern Bank Charitable Foundation (since 2001); Board of Directors of American Student Assistance Corporation (1996-2009); Board of Directors of Boston Stock Exchange (2002-2008); Board of Directors of Harvard Pilgrim Healthcare (health benefits company) (2007-2011). Trustee, John Hancock retail funds3 (since 2008); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Hassell H. McClellan, Born: 1945 | 2012 | 228 |
Trustee Trustee, Virtus Variable Insurance Trust (formerly Phoenix Edge Series Funds) (since 2008); Director, The Barnes Group (since 2010); Associate Professor, The Wallace E. Carroll School of Management, Boston College (retired 2013). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Funds III (2005-2006 and since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2005). |
Steven R. Pruchansky, Born: 1944 | 2006 | 228 |
Trustee and Vice Chairperson of the Board Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and President, Greenscapes of Southwest Florida, Inc. (until 2000); Member, Board of Advisors, First American Bank (until 2010); Managing Director, Jon James, LLC (real estate) (since 2000); Partner, Right Funding, LLC (since 2014); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty Trust (until 1994); President, Maxwell Building Corp. (until 1991). Trustee (since 1992) and Chairperson of the Board (2011-2012), John Hancock retail funds3; Trustee and Vice Chairperson of the Board, John Hancock retail funds3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2012); Trustee, and Vice Chairperson of the Board, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Independent Trustees (continued)
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
Gregory A. Russo, Born: 1949 | 2008 | 228 |
Trustee Director and Audit Committee Chairman (since 2012), and Member, Audit Committee and Finance Committee (since 2011), NCH Healthcare System, Inc. (holding company for multi-entity healthcare system); Director and Member (since 2012) and Finance Committee Chairman (since 2014), The Moorings, Inc. (nonprofit continuing care community); Vice Chairman, Risk & Regulatory Matters, KPMG LLP (KPMG) (2002-2006); Vice Chairman, Industrial Markets, KPMG (1998-2002); Chairman and Treasurer, Westchester County, New York, Chamber of Commerce (1986-1992); Director, Treasurer, and Chairman of Audit and Finance Committees, Putnam Hospital Center (1989-1995); Director and Chairman of Fundraising Campaign, United Way of Westchester and Putnam Counties, New York (1990-1995). Trustee, John Hancock retail funds3 (since 2008); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Non-Independent Trustees4
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years | Trustee of the Trust since1 | Number of John Hancock funds overseen by Trustee |
James R. Boyle, Born: 1959 | 2015 | 228 |
Non-Independent Trustee* Chairman and Chief Executive Officer, Zillion Group, Inc. (formerly HealthFleet, Inc.) (healthcare) (since 2014); Executive Vice President and Chief Executive Officer, U.S. Life Insurance Division of Genworth Financial, Inc. (insurance) (January 2014-July 2014); Senior Executive Vice President, Manulife Financial Corporation, President and Chief Executive Officer, John Hancock (1999-2012); Chairman and Director, John Hancock Advisers, LLC, John Hancock Funds, LLC, and John Hancock Investment Management Services, LLC (2005-2010). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (2005-2010; 2012-2014 and since 2015); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (2005-2014 and since 2015). *Effective 3-10-15. |
Craig Bromley, Born: 1966 | 2012 | 228 |
Non-Independent Trustee President, John Hancock Financial Service (since 2012); Senior Executive Vice President and General Manager, U.S. Division, Manulife Financial Corporation (since 2012); President and Chief Executive Officer, Manulife Insurance Company (Manulife Japan) (2005-2012, including prior positions). Trustee, John Hancock retail funds,3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Warren A. Thomson, Born: 1955 | 2012 | 228 |
Non-Independent Trustee Senior Executive Vice President and Chief Investment Officer, Manulife Financial Corporation and The Manufacturers Life Insurance Company (since 2009); Chairman, Manulife Asset Management (since 2001, including prior positions); Director and Chairman, Manulife Asset Management Limited (since 2006); Director and Chairman, Hancock Natural Resources Group, Inc. (since 2013). Trustee, John Hancock retail funds,3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Principal officers who are not Trustees
Name, year of birth Position(s) held with fund Principal occupation(s) during past 5 years | Officer of the Trust since |
Andrew G. Arnott, Born: 1971 | 2009 |
President Senior Vice President, John Hancock Financial Services (since 2009); Director and Executive Vice President, John Hancock Advisers, LLC (since 2005, including prior positions); Director and Executive Vice President, John Hancock Investment Management Services, LLC (since 2006, including prior positions); President, John Hancock Funds, LLC (since 2004, including prior positions); President, John Hancock retail funds,3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2007, including prior positions); President, John Hancock Collateral Trust (since 2015); President, John Hancock Exchange-Traded Fund Trust (since 2014). |
John J. Danello, Born: 1955 | 2014 |
Senior Vice President, Secretary, and Chief Legal Officer Vice President and Chief Counsel, John Hancock Wealth Management (since 2005); Senior Vice President (since 2007) and Chief Legal Counsel (2007-2010), John Hancock Funds, LLC and The Berkeley Financial Group, LLC; Senior Vice President (since 2006, including prior positions) and Chief Legal Officer and Secretary (since 2014), John Hancock retail funds,3 John Hancock Funds II and John Hancock Variable Insurance Trust; Senior Vice President, Chief Legal Officer and Secretary, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Vice President, John Hancock Life & Health Insurance Company (since 2009); Vice President, John Hancock Life Insurance Company (USA) and John Hancock Life Insurance Company of New York (since 2010); and Senior Vice President, Secretary, and Chief Legal Counsel (2007-2014, including prior positions) of John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC. |
Francis V. Knox, Jr., Born: 1947 | 2006 |
Chief Compliance Officer Vice President, John Hancock Financial Services (since 2005); Chief Compliance Officer, John Hancock retail funds,3 John Hancock Variable Insurance Trust, John Hancock Funds II, John Hancock Advisers, LLC, and John Hancock Investment Management Services, LLC (since 2005); Chief Compliance Officer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Charles A. Rizzo, Born: 1957 | 2007 |
Chief Financial Officer Vice President, John Hancock Financial Services (since 2008); Senior Vice President, John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC (since 2008); Chief Financial Officer, John Hancock retail funds,3 John Hancock Variable Insurance Trust and John Hancock Funds II (since 2007); Chief Financial Officer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
Salvatore Schiavone, Born: 1965 | 2010 |
Treasurer Assistant Vice President, John Hancock Financial Services (since 2007); Vice President, John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC (since 2007); Treasurer, John Hancock retail funds3 (since 2007, including prior positions); Treasurer, John Hancock Variable Insurance Trust and John Hancock Funds II (2007-2009 and since 2010, including prior positions); Treasurer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015). |
The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.
The Statement of Additional Information of the fund includes additional information about members of the Board of Trustees of the Trust and is available without charge, upon request, by calling 800-225-5291.
1 | Each Trustee holds office until his or her successor is elected and qualified, or until the Trustee's death, retirement, resignation, or removal. Mr. Boyle has served as Trustee at various times prior to the date listed in the table. |
2 | Member of the Audit Committee. |
3 | "John Hancock retail funds" comprises John Hancock Funds III and 36 other John Hancock funds consisting of 26 series of other John Hancock trusts and 10 closed-end funds. |
4 | The Trustee is a Non-Independent Trustee due to current or former positions with the Advisor and certain affiliates. |
Trustees James M. Oates, Chairperson Officers Andrew G. Arnott John J. Danello Francis V. Knox, Jr. Charles A. Rizzo Salvatore Schiavone | Investment advisor John Hancock Advisers, LLC Subadvisor Epoch Investment Partners, Inc. Principal distributor John Hancock Funds, LLC Custodian Citibank, N.A. Transfer agent John Hancock Signature Services, Inc. Legal counsel K&L Gates LLP Independent registered public accounting firm PricewaterhouseCoopers, LLP |
*Member of the Audit Committee
†Non-Independent Trustee
The fund's proxy voting policies and procedures, as well as the fund proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.
The fund's complete list of portfolio holdings, for the first and third fiscal quarters, is filed with the SEC on Form N-Q. The fund's Form N-Q is available on our website and the SEC's website, sec.gov, and can be reviewed and copied (for a fee) at the SEC's Public Reference Room in Washington, DC. Call 800-SEC-0330 to receive information on the operation of the SEC's Public Reference Room.
We make this information on your fund, as well as monthly 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 Balanced Blue Chip Growth Classic Value Disciplined Value Disciplined Value Mid Cap Equity Income Fundamental All Cap Core Fundamental Large Cap Core Fundamental Large Cap Value New Opportunities Select Growth Small Cap Equity Small Cap Value Small Company Strategic Growth U.S. Equity U.S. Global Leaders Growth Value Equity GLOBAL AND INTERNATIONAL EQUITY FUNDS Disciplined Value International Emerging Markets Emerging Markets Equity Global Equity Global Shareholder Yield Greater China Opportunities International Core International Growth International Small Company International Value Equity | INCOME FUNDS Bond California Tax-Free Income Core High Yield Emerging Markets Debt Floating Rate Income Focused High Yield Global Income Government Income 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 Enduring Assets Financial Industries Global Absolute Return Strategies Global Conservative Absolute Return Global Real Estate Natural Resources Redwood Regional Bank Seaport Technical Opportunities |
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 Income Allocation Fund Lifestyle Aggressive Portfolio Lifestyle Balanced Portfolio Lifestyle Conservative Portfolio Lifestyle Growth Portfolio Lifestyle Moderate Portfolio Retirement Choices Portfolios (2010-2055) Retirement Living Portfolios (2010-2055) Retirement Living II Portfolios (2010-2055) EXCHANGE-TRADED FUNDS John Hancock Multifactor Consumer Discretionary ETF John Hancock Multifactor Financials ETF John Hancock Multifactor Healthcare ETF John Hancock Multifactor Large Cap ETF John Hancock Multifactor Mid Cap ETF John Hancock Multifactor Technology ETF 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 |
"As an investment firm,
upholding the proud
tradition of John Hancock
comes down to one thing:
putting shareholders
first. We believe that if
our shareholders are
successful, then we will
be successful."
Andrew G. Arnott
President and Chief Executive Officer
John Hancock Investments
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 Investments
A trusted brand
John Hancock Investments 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 build funds based on investor needs, then search the world to find
proven portfolio teams with specialized expertise in those strategies.
As a manager of managers, we apply vigorous oversight to ensure that
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 601 Congress Street n Boston, MA 02210-2805 800-225-5291 n jhinvestments.com | |
This report is for the information of the shareholders of John Hancock Global Shareholder Yield Fund. It is not authorized for distribution to prospective investors unless preceded or accompanied by a prospectus. | ||
MF279518 | 320A 2/16 4/16 |
ITEM 2. CODE OF ETHICS.
As of the end of the year, February 29, 2016, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief Executive Officer, Chief Financial Officer and Treasurer (respectively, the principal executive officer, the principal financial officer and the principal accounting officer, the “Senior Financial Officers”). A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Peter S. Burgess is the audit committee financial expert and is “independent”, pursuant to general instructions on Form N-CSR Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The aggregate fees billed for professional services rendered by the principal accountant, for the audits of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements amounted to the following for the fiscal years ended February 29, 2016 and February 28, 2015. These fees were billed to the registrant and were approved by the registrant’s audit committee.
Fund | February 29, 2016 | February 28, 2015 |
John Hancock Global Shareholder Yield Fund | $ 39,846 | $ 39,077 |
John Hancock International Growth Fund | 51,418 | 39,355 |
John Hancock International Core Fund | 50,267 | 44,943 |
Total | $ 141,531 | $ 123,375 |
(b) Audit-Related Services
Audit-related service fees for assurance and related services by the principal accountant are billed to the registrant or to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser (“control affiliates”) that provides ongoing services to the registrant. The nature of the services provided was affiliated service provider internal controls reviews. In addition, amounts billed to control affiliates for service provider internal controls reviews were $103,474 and $103,940 for the fiscal years ended February 29, 2016 and February 28, 2015, respectively.
Fund | February 29, 2016 | February 28, 2015 |
John Hancock Global Shareholder Yield Fund | $ 525 | $ 519 |
John Hancock International Growth Fund | 525 | 519 |
John Hancock International Core Fund | 525 | 519 |
Total | $ 1,575 | $ 1,557 |
(c) Tax Fees
The aggregate fees billed for professional services rendered by the principal accountant for tax compliance, tax advice and tax planning (“tax fees”) amounted to the following for the fiscal years ended February 29, 2016 and February 28, 2015. The nature of the services comprising the tax fees was the review of the registrant’s tax returns and tax distribution requirements. These fees were billed to the registrant and were approved by the registrant’s audit committee.
Fund | February 29, 2016 | February 28, 2015 |
John Hancock Global Shareholder Yield Fund | $ 3,500 | $ 3,450 |
John Hancock International Growth Fund | 4,000 | 3,900 |
John Hancock International Core Fund | 4,000 | 3,900 |
Total | $ 11,500 | $ 11,250 |
(d) All Other Fees
The nature of the services comprising all other fees is attestation services surrounding new class launches and miscellaneous tax services. Other fees amounted to the following for the fiscal years ended February 29, 2016 and February 28, 2015 billed to the registrant or to the control affiliates.
Fund | February 29, 2016 | February 28, 2015 |
John Hancock Global Shareholder Yield Fund | $ 1,704 | $ 120 |
John Hancock International Growth Fund | 9,804 | 120 |
John Hancock International Core Fund | 1,704 | 120 |
Total | $ 13,212 | $ 360 |
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The trust’s Audit Committee must pre-approve all audit and non-audit services provided by the independent registered public accounting firm (the “Auditor”) relating to the operations or financial reporting of the funds. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The trust+’s Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee’s consideration of audit-related and non-audit services by the Auditor. The policies and procedures require that any audit-related and non-audit service provided by the Auditor and any non-audit service provided by the Auditor to a fund service provider that relates directly to the operations and financial reporting of a fund are subject to approval by the Audit Committee before such service is provided. Audit-related services provided by the Auditor that are expected to exceed $25,000 per year/per fund are subject to specific pre-approval by the Audit Committee. Tax services provided by the Auditor that are expected to exceed $30,000 per year/per fund are subject to specific pre-approval by the Audit Committee.
All audit services, as well as the audit-related and non-audit services that are expected to exceed the amounts stated above, must be approved in advance of provision of the service by formal resolution of the Audit Committee. At the regularly scheduled Audit Committee meetings, the Committee reviews a report summarizing the services, including fees, provided by the Auditor.
(e)(2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
Audit-Related Fees, Tax Fees and All Other Fees:
There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.
(f) According to the registrant’s principal accountant for the fiscal year ended February 29, 2016, the percentage of hours spent on the audit of the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons who were not full-time, permanent employees of principal accountant was less than 50%.
(g) The aggregate non-audit fees billed by the registrant’s principal accountant for non-audit services rendered to the registrant and rendered to the registrant's control affiliates were $6,260,177 for the fiscal year ended February 29, 2016 and $6,279,236 for the fiscal year ended February 28, 2015.
(h) The audit committee of the registrant has considered the non-audit services provided by the registrant’s principal accountant to the control affiliates and has determined that the services that were not pre-approved are compatible with maintaining the principal accountant’s independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately-designated standing audit committee comprised of independent trustees. The members of the audit committee are as follows:
Peter S. Burgess - Chairman
Charles L. Bardelis
Theron S. Hoffman
ITEM 6. SCHEDULE OF INVESTMENTS.
(a) | Not applicable. |
(b) | Not applicable. |
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
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 registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. EXHIBITS.
(a)(1) Code of Ethics for Senior Financial Officers is attached.
(a)(2) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.
(b)(1) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.
(c)(1) Submission of Matters to a Vote of Security Holders is attached. See attached “John Hancock Funds – Nominating, Governance and Administration Committee Charter”.
(c)(2) Contact person at the registrant.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
John Hancock Funds III
By: | /s/ Andrew Arnott |
Andrew Arnott | |
President | |
Date: | April 20, 2016 |
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: | April 20, 2016 |
By: | /s/ Charles A. Rizzo |
Charles A. Rizzo | |
Chief Financial Officer | |
Date: | April 20, 2016 |