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 28 |
Date of reporting period: | August 31, 2016 |
ITEM 1. REPORT TO SHAREHOLDERS.
John Hancock
International Core Fund
Semiannual report 8/31/16
A message to shareholders
Dear shareholder,
The U.K.'s vote in late June to leave the European Union (EU) created a challenging backdrop for global financial markets; however, most international indexes ended the period with strong gains. The U.K.'s move creates a number of unknowns for the near term, the most important of which is whether other EU countries will follow suit. Meanwhile, the World Bank in June downgraded its 2016 global growth forecast from 2.9% to 2.4%, citing stubbornly low commodity prices and weak global trade, among other factors. Emerging markets were the best performers, as many countries benefited from stabilizing commodity prices and more promising economic growth prospects.
As this dynamic plays out, it is prudent to expect continued market volatility. 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 we have liquidity tools in place to help meet the needs of our shareholders. Whether the markets are up or down, one of your best resources is your financial advisor, who can help 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 August 31, 2016. They are subject to change at any time. All investments entail risks, including the possible loss of principal. Diversification does not guarantee a profit or eliminate the risk of a loss. 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 8/31/16 (%)
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.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative. Performance of the other share classes will vary based on the difference in the fees and expenses of those classes. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current month-end performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling 800-225-5291. For further information on the fund's objectives, risks, and strategy, see the fund's prospectus.
PERFORMANCE HIGHLIGHTS OVER THE LAST SIX MONTHS
Markets performed well despite volatility
International stocks gained ground during the six-month period, despite sluggish global growth and the unexpected success of the Brexit referendum in the United Kingdom.
Fund underperformed its benchmark
Compared with its benchmark, the MSCI EAFE Index, the fund was hampered by weak stock selection in the industrials and consumer discretionary sectors.
Financials and healthcare were sources of strength
Relative to the benchmark, the fund benefited from security selection in financials, as well as favorable positioning in the healthcare sector.
SECTOR COMPOSITION AS OF 8/31/16 (%)
A note about risks
Foreign investing, especially in emerging markets, has additional risks, such as currency and market volatility and political and social instability. 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 (if at all) to which a security may be sold or a derivative position closed without negatively affecting its market value—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.
![neilconstable.jpg](https://capedge.com/proxy/N-CSRS/0001145443-16-002244/neilconstable.jpg)
Neil Constable, Ph.D.
Portfolio Manager
GMO
How did the fund perform for the six months ended August 31, 2016?
Coming into the reporting period, developed-country international stocks were just beginning to bounce back after a difficult stretch of performance that went back to mid-2015. As global growth remained sluggish, the prospect of continued stimulus from economic policymakers around the world was one factor driving equities higher. The strong results for the six-month timeframe came despite severe, but ultimately short-lived, volatility in June, when the United Kingdom voted for Brexit—the popular term for the country's unexpected decision to terminate its long-standing relationship with the European Union. Stocks plunged in the first few days after this vote, but once investors digested the news, equities resumed their upward climb for the rest of the period.
Against this backdrop, the fund produced a solid gain in absolute terms that nevertheless trailed its benchmark, the MSCI EAFE Index.
What was behind the fund's results relative to the benchmark?
Our investment approach, which emphasizes attractively valued stocks, tended to lead us toward cyclical (economically sensitive) companies, such as automakers, retailers, and industrial firms, and away from higher-quality stocks, many of which were trading at high premiums.
Unfortunately, cyclical stocks tended to lag this period, as investors favored companies with a measure of defensiveness in an uncertain global economic environment. Relative to the benchmark, our security selection detracted from performance in those categories dominated by economically sensitive stocks, such as industrials and consumer discretionary. On the positive side, security selection in the financials sector added value, and the fund was also well positioned in the healthcare sector.
On a country basis relative to the benchmark, the fund was hampered the most by weak stock picking in Germany, although favorable picks in Italy tempered this result.
Which individual holdings detracted from performance relative to the benchmark?
Certain airline stocks detracted from the fund's relative performance, especially Deutsche Lufthansa AG, based in Germany, and Japan Airlines Company, Ltd. In fact, many airline companies were challenged this period, partly due to the financial impact of higher oil prices on their bottom lines, and these two fund holdings were no exception to the trend.
Another detractor was Persimmon PLC, a U.K.-based home builder facing lots of headwinds this period. Persimmon is a cyclical company in a country experiencing slow growth along with substantial economic and political uncertainty following the Brexit vote. All are factors that have depressed home building activity and could continue to do so, leaving this stock out of favor with investors. Acknowledging these risks, we reduced the fund's position slightly, but continued to hold it at period end due to Persimmon's attractive valuation.
We were cautious about U.K. financial stocks, owing to their relatively high valuations, and tended to look to other markets for our desired exposure to the sector. As discussed, security selection in the financials category added to the fund's relative performance, largely because we avoided weak-performing names in the benchmark.
In place of U.K. financials, we found opportunities among Japanese banks and European insurance companies. Unfortunately, two of these in the latter category, Swiss Re AG and France's AXA SA,
TOP 10 HOLDINGS AS OF 8/31/16 (%)
TOTAL SA | 3.4 |
AstraZeneca PLC | 2.9 |
KDDI Corp. | 2.7 |
Daimler AG | 2.7 |
Sumitomo Mitsui Financial Group, Inc. | 2.6 |
Allianz SE | 2.4 |
Swiss Re AG | 2.4 |
Nippon Telegraph & Telephone Corp. | 2.3 |
Mitsubishi UFJ Financial Group, Inc. | 2.0 |
AXA SA | 2.0 |
TOTAL | 25.4 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
Which individual holdings contributed to relative performance?
Two large Japanese financial companies, Sumitomo Mitsui Financial Group, Inc. and Mitsubishi UFJ Financial Group, Inc., added value to the fund. Increased optimism on the part of investors that more Japanese economic stimulus programs could be coming, as well as less perceived exposure to ongoing challenges in Europe and the United Kingdom, helped drive both stocks higher.
Another contributor was BASF SE, a German chemical producer in which the fund was overweight due to what we saw as an attractive valuation. Although many cyclically oriented stocks failed to keep pace with the benchmark this period, BASF was a notable exception to this trend, gaining 29% for the period. As a group, material stocks were strong performers, benefiting from an increased level of takeover activity among chemical companies and from reasonably stable oil and commodity prices. Unfortunately, the fund was underweight relative to the benchmark and was not able to fully capitalize on these trends.
What was your approach to managing the fund?
We continued to emphasize a quantitative, or data-driven, approach to investing the fund's assets. During the period, we began to phase out the fundamental research component of our strategy.
TOP 10 COUNTRIES AS OF 8/31/16 (%)
Japan | 26.8 |
United Kingdom | 15.9 |
Germany | 10.8 |
France | 8.9 |
Switzerland | 5.1 |
Australia | 5.0 |
Hong Kong | 4.8 |
Netherlands | 3.3 |
Italy | 3.0 |
Canada | 2.9 |
TOTAL | 86.5 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
Accordingly, we have opted to focus more intently on our core quantitative management strategy, which continued to emphasize stocks with a combination of attractive valuation, quality, and growth characteristics.
At period end, how was the fund positioned?
Based on this approach, we continued to find a number of opportunities in Europe meeting our criteria, especially in the consumer discretionary sector, in which the fund was meaningfully overweight on average during the period. This included a handful of automakers whose share price has been beaten down, in our view, but that continued to offer investors a good combination of value and growth potential.
During the period, the fund's composition remained relatively consistent, as we kept the portfolio broadly diversified across a number of areas. We also positioned the fund to take advantage of the potential for renewed growth in Europe. If this situation comes to pass, we believe it could allow some of the more cyclically oriented stocks in the fund to appreciate closer to what we see as their fair value.
Can you tell us about recent manager changes?
Effective July 1, 2016, portfolio managers Ben Inker, Sam Wilderman, Chris Fortson, and David Cowan were removed from the team.
MANAGED BY
![]() | Neil Constable, Ph.D. On the fund since 2015 Investing since 2003 |
TOTAL RETURNS FOR THE PERIOD ENDED AUGUST 31, 2016
Average annual total returns (%) with maximum sales charge | Cumulative total returns (%) with maximum sales charge | ||||||||||||||||||||||||||||
1-year | 5-year | 10-year | Since inception | 6-month | 5-year | 10-year | Since inception | ||||||||||||||||||||||
Class A | -9.46 | 2.27 | 0.12 | — | 3.79 | 11.89 | 1.26 | — | |||||||||||||||||||||
Class B | -10.06 | 2.18 | -0.10 | — | 3.89 | 11.40 | -0.99 | — | |||||||||||||||||||||
Class C | -6.30 | 2.54 | -0.10 | — | 7.86 | 13.38 | -1.00 | — | |||||||||||||||||||||
Class I1 | -4.41 | 3.69 | 1.06 | — | 9.42 | 19.86 | 11.09 | — | |||||||||||||||||||||
Class R11 | -5.02 | 2.94 | 0.35 | — | 9.07 | 15.60 | 3.55 | — | |||||||||||||||||||||
Class R21,2 | -4.75 | 3.07 | -0.13 | — | 9.21 | 16.33 | -1.33 | — | |||||||||||||||||||||
Class R31 | -4.92 | 3.06 | — | 4.95 | 3 | 9.14 | 16.24 | — | 42.16 | 3 | |||||||||||||||||||
Class R41 | -4.56 | 3.44 | — | 5.32 | 3 | 9.34 | 18.43 | — | 45.83 | 3 | |||||||||||||||||||
Class R51 | -4.34 | 3.67 | — | 5.58 | 3 | 9.46 | 19.72 | — | 48.47 | 3 | |||||||||||||||||||
Class R61,2 | -4.29 | 3.78 | 1.16 | — | 9.48 | 20.39 | 12.27 | — | |||||||||||||||||||||
Class 11 | -4.34 | 3.78 | — | 0.85 | 4 | 9.44 | 20.35 | — | 8.67 | 4 | |||||||||||||||||||
Class NAV1 | -4.29 | 3.83 | 1.18 | — | 9.49 | 20.66 | 12.44 | — | |||||||||||||||||||||
Index† | 0.38 | 5.48 | 2.19 | — | 10.76 | 30.58 | 24.13 | — |
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 (%) | 1.39 | 2.09 | 2.09 | 1.07 | 1.73 | 1.48 | 1.63 | 1.33 | 1.03 | 0.98 | 1.01 | 0.96 |
Net (%) | 1.38 | 2.09 | 2.09 | 1.07 | 1.73 | 1.48 | 1.63 | 1.23 | 1.03 | 0.96 | 1.01 | 0.96 |
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 B5 | 8-31-06 | 9,901 | 9,901 | 12,413 |
Class C5 | 8-31-06 | 9,900 | 9,900 | 12,413 |
Class I1 | 8-31-06 | 11,109 | 11,109 | 12,413 |
Class R11 | 8-31-06 | 10,355 | 10,355 | 12,413 |
Class R21,2 | 8-31-06 | 9,867 | 9,867 | 12,413 |
Class R31 | 5-22-09 | 14,216 | 14,216 | 16,673 |
Class R41 | 5-22-09 | 14,583 | 14,583 | 16,673 |
Class R51 | 5-22-09 | 14,847 | 14,847 | 16,673 |
Class R61,2 | 8-31-06 | 11,227 | 11,227 | 12,413 |
Class 11 | 11-6-06 | 10,867 | 10,867 | 11,950 |
Class NAV1 | 8-31-06 | 11,244 | 11,244 | 12,413 |
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 | For certain types of investors, as described in the fund's prospectuses. |
2 | 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 R6 and Class R2 shares, as applicable. |
3 | From 5-22-09. |
4 | From 11-6-06. |
5 | 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 March 1, 2016, with the same investment held until August 31, 2016.
Beginning Account value on 3-1-2016 | Ending value on 8-31-2016 | Expenses paid during period ended 8-31-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $1,092.60 | $7.17 | 1.36% |
Class B | 1,000.00 | 1,088.90 | 11.00 | 2.09% |
Class C | 1,000.00 | 1,088.60 | 11.00 | 2.09% |
Class I | 1,000.00 | 1,094.20 | 5.75 | 1.09% |
Class R1 | 1,000.00 | 1,090.70 | 9.06 | 1.72% |
Class R2 | 1,000.00 | 1,092.10 | 7.70 | 1.46% |
Class R3 | 1,000.00 | 1,091.40 | 8.49 | 1.61% |
Class R4 | 1,000.00 | 1,093.40 | 6.38 | 1.21% |
Class R5 | 1,000.00 | 1,094.60 | 5.39 | 1.02% |
Class R6 | 1,000.00 | 1,094.80 | 5.07 | 0.96% |
Class 1 | 1,000.00 | 1,094.40 | 5.33 | 1.01% |
Class NAV | 1,000.00 | 1,094.90 | 5.07 | 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 August 31, 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 March 1, 2016, with the same investment held until August 31, 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 3-1-2016 | Ending value on 8-31-2016 | Expenses paid during period ended 8-31-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $1,018.30 | $6.92 | 1.36% |
Class B | 1,000.00 | 1,014.70 | 10.61 | 2.09% |
Class C | 1,000.00 | 1,014.70 | 10.61 | 2.09% |
Class I | 1,000.00 | 1,019.70 | 5.55 | 1.09% |
Class R1 | 1,000.00 | 1,016.50 | 8.74 | 1.72% |
Class R2 | 1,000.00 | 1,017.80 | 7.43 | 1.46% |
Class R3 | 1,000.00 | 1,017.10 | 8.19 | 1.61% |
Class R4 | 1,000.00 | 1,019.10 | 6.16 | 1.21% |
Class R5 | 1,000.00 | 1,020.10 | 5.19 | 1.05% |
Class R6 | 1,000.00 | 1,020.40 | 4.89 | 0.96% |
Class 1 | 1,000.00 | 1,020.10 | 5.14 | 1.01% |
Class NAV | 1,000.00 | 1,020.40 | 4.89 | 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 184/365 (to reflect the one-half year period). |
Fund's investments
As of 8-31-16 (unaudited) | ||||||||||||||||||||||||||
Shares | Value | |||||||||||||||||||||||||
Common stocks 98.0% | $1,195,382,552 | |||||||||||||||||||||||||
(Cost $1,209,026,700) | ||||||||||||||||||||||||||
Australia 5.0% | 61,622,850 | |||||||||||||||||||||||||
Abacus Property Group | 152,204 | 344,836 | ||||||||||||||||||||||||
Adelaide Brighton, Ltd. | 495,691 | 1,952,917 | ||||||||||||||||||||||||
ASX, Ltd. | 9,025 | 346,485 | ||||||||||||||||||||||||
BT Investment Management, Ltd. | 26,900 | 178,597 | ||||||||||||||||||||||||
BWP Trust | 146,768 | 358,003 | ||||||||||||||||||||||||
Challenger, Ltd. | 19,301 | 133,082 | ||||||||||||||||||||||||
Charter Hall Retail REIT | 76,997 | 247,251 | ||||||||||||||||||||||||
CIMIC Group, Ltd. | 52,003 | 1,154,814 | ||||||||||||||||||||||||
Cromwell Property Group | 340,206 | 260,532 | ||||||||||||||||||||||||
Dexus Property Group | 515,697 | 3,761,785 | ||||||||||||||||||||||||
Downer EDI, Ltd. | 593,784 | 2,182,722 | ||||||||||||||||||||||||
Fairfax Media, Ltd. | 1,802,131 | 1,332,185 | ||||||||||||||||||||||||
Investa Office Fund | 514,722 | 1,761,947 | ||||||||||||||||||||||||
IOOF Holdings, Ltd. (L) | 51,492 | 344,265 | ||||||||||||||||||||||||
Lend Lease Group | 88,126 | 913,196 | ||||||||||||||||||||||||
Mirvac Group | 1,437,530 | 2,501,969 | ||||||||||||||||||||||||
Nufarm, Ltd. | 23,787 | 150,462 | ||||||||||||||||||||||||
OZ Minerals, Ltd. | 567,553 | 2,722,892 | ||||||||||||||||||||||||
Pact Group Holdings, Ltd. | 24,102 | 111,254 | ||||||||||||||||||||||||
Scentre Group | 3,745,880 | 13,974,726 | ||||||||||||||||||||||||
Shopping Centres Australasia Property Group | 113,165 | 196,170 | ||||||||||||||||||||||||
Sigma Pharmaceuticals, Ltd. | 61,761 | 56,551 | ||||||||||||||||||||||||
Sonic Healthcare, Ltd. | 96,080 | 1,658,576 | ||||||||||||||||||||||||
Stockland | 439,094 | 1,598,535 | ||||||||||||||||||||||||
Telstra Corp., Ltd. (L) | 3,328,139 | 13,142,578 | ||||||||||||||||||||||||
The GPT Group | 919,740 | 3,678,873 | ||||||||||||||||||||||||
The Star Entertainment Group, Ltd. | 569,231 | 2,520,405 | ||||||||||||||||||||||||
Thorn Group, Ltd. | 170,181 | 184,674 | ||||||||||||||||||||||||
Westfield Corp. (I) | 233,929 | 1,794,228 | ||||||||||||||||||||||||
Woodside Petroleum, Ltd. | 50,253 | 1,076,610 | ||||||||||||||||||||||||
WorleyParsons, Ltd. | 161,168 | 981,730 | ||||||||||||||||||||||||
Austria 0.6% | 7,234,474 | |||||||||||||||||||||||||
Mayr Melnhof Karton AG | 259 | 29,193 | ||||||||||||||||||||||||
Oesterreichische Post AG (I) | 24,031 | 863,149 | ||||||||||||||||||||||||
OMV AG | 145,667 | 4,081,621 | ||||||||||||||||||||||||
Raiffeisen Bank International AG | 18,295 | 260,336 | ||||||||||||||||||||||||
voestalpine AG | 60,351 | 2,000,175 |
Shares | Value | |||||||||||||||||||||||||
Belgium 0.6% | $6,752,008 | |||||||||||||||||||||||||
Ageas | 44,052 | 1,527,544 | ||||||||||||||||||||||||
AGFA-Gevaert NV (I) | 176,616 | 560,100 | ||||||||||||||||||||||||
bpost SA | 84,628 | 2,153,661 | ||||||||||||||||||||||||
D'ieteren SA | 13,051 | 630,688 | ||||||||||||||||||||||||
Orange Belgium SA | 14,415 | 335,996 | ||||||||||||||||||||||||
Proximus SADP | 11,752 | 359,931 | ||||||||||||||||||||||||
Umicore SA | 20,033 | 1,184,088 | ||||||||||||||||||||||||
Canada 2.9% | 35,254,824 | |||||||||||||||||||||||||
Air Canada (I) | 140,800 | 962,001 | ||||||||||||||||||||||||
Bank of Montreal | 23,200 | 1,538,765 | ||||||||||||||||||||||||
BCE, Inc. | 116,200 | 5,428,987 | ||||||||||||||||||||||||
Canadian Imperial Bank of Commerce | 74,000 | 5,874,180 | ||||||||||||||||||||||||
Canadian Tire Corp., Ltd., Class A | 15,400 | 1,577,461 | ||||||||||||||||||||||||
Cascades, Inc. | 19,900 | 169,349 | ||||||||||||||||||||||||
Celestica, Inc. (I) | 30,100 | 320,877 | ||||||||||||||||||||||||
CGI Group, Inc., Class A (I) | 29,500 | 1,435,859 | ||||||||||||||||||||||||
Chorus Aviation, Inc. | 9,600 | 43,849 | ||||||||||||||||||||||||
CI Financial Corp. (L) | 102,500 | 2,006,386 | ||||||||||||||||||||||||
Cogeco Communications, Inc. | 5,000 | 241,917 | ||||||||||||||||||||||||
IAMGOLD Corp. (I) | 66,500 | 246,954 | ||||||||||||||||||||||||
Laurentian Bank of Canada | 4,900 | 183,685 | ||||||||||||||||||||||||
Linamar Corp. | 13,600 | 561,257 | ||||||||||||||||||||||||
Martinrea International, Inc. | 8,500 | 54,251 | ||||||||||||||||||||||||
Metro, Inc. | 278,300 | 9,452,099 | ||||||||||||||||||||||||
Russel Metals, Inc. | 3,400 | 56,494 | ||||||||||||||||||||||||
Sun Life Financial, Inc. (L) | 72,700 | 2,293,980 | ||||||||||||||||||||||||
The North West Company, Inc. | 8,700 | 194,513 | ||||||||||||||||||||||||
Toromont Industries, Ltd. | 22,300 | 674,748 | ||||||||||||||||||||||||
Transcontinental, Inc., Class A | 103,200 | 1,510,935 | ||||||||||||||||||||||||
Westjet Airlines, Ltd. | 23,100 | 426,277 | ||||||||||||||||||||||||
China 0.1% | 1,555,052 | |||||||||||||||||||||||||
Yangzijiang Shipbuilding Holdings, Ltd. | 2,773,900 | 1,555,052 | ||||||||||||||||||||||||
Denmark 0.9% | 10,625,204 | |||||||||||||||||||||||||
AP Moeller - Maersk A/S, Class B | 2,186 | 3,270,173 | ||||||||||||||||||||||||
Carlsberg A/S, B Shares | 26,292 | 2,468,059 | ||||||||||||||||||||||||
Dfds A/S | 4,134 | 217,986 | ||||||||||||||||||||||||
Novo Nordisk A/S, B Shares | 99,763 | 4,668,986 | ||||||||||||||||||||||||
Faroe Islands 0.1% | 1,454,799 | |||||||||||||||||||||||||
Bakkafrost P/F | 40,549 | 1,454,799 |
Shares | Value | |||||||||||||||||||||||||
Finland 1.3% | $15,285,309 | |||||||||||||||||||||||||
Fortum OYJ | 60,730 | 936,817 | ||||||||||||||||||||||||
Metso OYJ | 1,112 | 31,130 | ||||||||||||||||||||||||
Neste OYJ | 127,329 | 5,303,531 | ||||||||||||||||||||||||
Nokian Renkaat OYJ | 6,855 | 247,486 | ||||||||||||||||||||||||
Sampo OYJ, A Shares | 4,489 | 193,081 | ||||||||||||||||||||||||
Sponda OYJ | 117,044 | 611,150 | ||||||||||||||||||||||||
Stora Enso OYJ, R Shares | 170,464 | 1,504,521 | ||||||||||||||||||||||||
Tieto OYJ | 47,747 | 1,424,905 | ||||||||||||||||||||||||
UPM-Kymmene OYJ | 250,383 | 5,032,688 | ||||||||||||||||||||||||
France 8.9% | 108,773,816 | |||||||||||||||||||||||||
Alten SA | 5,253 | 361,006 | ||||||||||||||||||||||||
AXA SA | 1,145,008 | 24,099,266 | ||||||||||||||||||||||||
BNP Paribas SA | 103,582 | 5,289,978 | ||||||||||||||||||||||||
Capgemini SA | 1,746 | 170,601 | ||||||||||||||||||||||||
Christian Dior SE | 42,587 | 7,379,926 | ||||||||||||||||||||||||
Cie Generale des Etablissements Michelin | 49,906 | 5,319,793 | ||||||||||||||||||||||||
CNP Assurances | 40,194 | 648,350 | ||||||||||||||||||||||||
Euler Hermes Group | 2,654 | 219,611 | ||||||||||||||||||||||||
Legrand SA | 6,172 | 370,788 | ||||||||||||||||||||||||
Metropole Television SA | 47,815 | 849,225 | ||||||||||||||||||||||||
Rallye SA | 1,043 | 16,935 | ||||||||||||||||||||||||
Rexel SA | 85,388 | 1,375,469 | ||||||||||||||||||||||||
SCOR SE | 96,035 | 2,833,528 | ||||||||||||||||||||||||
Societe BIC SA | 7,834 | 1,144,740 | ||||||||||||||||||||||||
Societe Generale SA | 142,339 | 5,196,755 | ||||||||||||||||||||||||
Suez | 78,316 | 1,187,526 | ||||||||||||||||||||||||
TOTAL SA | 860,177 | 41,096,110 | ||||||||||||||||||||||||
Trigano SA | 5,777 | 338,592 | ||||||||||||||||||||||||
Valeo SA | 48,171 | 2,501,856 | ||||||||||||||||||||||||
Vivendi SA | 432,335 | 8,373,761 | ||||||||||||||||||||||||
Germany 10.3% | 125,720,505 | |||||||||||||||||||||||||
ADVA Optical Networking SE (I) | 97,875 | 835,138 | ||||||||||||||||||||||||
Allianz SE | 194,775 | 28,954,641 | ||||||||||||||||||||||||
Amadeus Fire AG | 2,441 | 178,180 | ||||||||||||||||||||||||
Aurubis AG | 26,425 | 1,391,368 | ||||||||||||||||||||||||
BASF SE | 212,748 | 17,257,155 | ||||||||||||||||||||||||
Bayerische Motoren Werke AG | 114,232 | 9,925,936 | ||||||||||||||||||||||||
Bechtle AG | 3,549 | 395,976 | ||||||||||||||||||||||||
Daimler AG | 468,437 | 32,425,613 | ||||||||||||||||||||||||
Deutsche Beteiligungs AG | 7,917 | 263,970 | ||||||||||||||||||||||||
Deutsche Lufthansa AG | 492,503 | 5,729,118 | ||||||||||||||||||||||||
Deutsche Telekom AG | 246,530 | 4,112,445 |
Shares | Value | |||||||||||||||||||||||||
Germany (continued) | ||||||||||||||||||||||||||
Evonik Industries AG | 62,484 | $2,096,614 | ||||||||||||||||||||||||
Fraport AG Frankfurt Airport Services Worldwide | 8,697 | 484,666 | ||||||||||||||||||||||||
Freenet AG | 19,639 | 563,429 | ||||||||||||||||||||||||
Hannover Rueck SE | 29,936 | 3,060,322 | ||||||||||||||||||||||||
HeidelbergCement AG | 20,241 | 1,878,343 | ||||||||||||||||||||||||
K+S AG (L) | 87,128 | 1,821,007 | ||||||||||||||||||||||||
Leoni AG | 22,376 | 827,880 | ||||||||||||||||||||||||
Muenchener Rueckversicherungs-Gesellschaft AG (Munich Re) | 17,166 | 3,099,851 | ||||||||||||||||||||||||
OSRAM Licht AG | 2,866 | 149,728 | ||||||||||||||||||||||||
ProSiebenSat.1 Media SE | 119,616 | 5,160,986 | ||||||||||||||||||||||||
Rheinmetall AG | 1,809 | 130,536 | ||||||||||||||||||||||||
RHOEN-KLINIKUM AG | 33,076 | 977,847 | ||||||||||||||||||||||||
Salzgitter AG | 6,297 | 191,393 | ||||||||||||||||||||||||
Software AG | 47,167 | 1,875,319 | ||||||||||||||||||||||||
STADA Arzneimittel AG | 36,046 | 1,933,044 | ||||||||||||||||||||||||
Hong Kong 4.8% | 58,170,395 | |||||||||||||||||||||||||
BOC Hong Kong Holdings, Ltd. | 1,621,500 | 5,661,265 | ||||||||||||||||||||||||
Champion REIT | 772,000 | 491,828 | ||||||||||||||||||||||||
CK Hutchison Holdings, Ltd. | 689,472 | 8,846,232 | ||||||||||||||||||||||||
Dah Sing Banking Group, Ltd. | 368,000 | 675,301 | ||||||||||||||||||||||||
Dah Sing Financial Holdings, Ltd. | 74,800 | 504,594 | ||||||||||||||||||||||||
Hang Seng Bank, Ltd. | 19,100 | 334,515 | ||||||||||||||||||||||||
Henderson Land Development Company, Ltd. | 110,000 | 641,797 | ||||||||||||||||||||||||
HKT Trust & HKT, Ltd. | 276,000 | 380,616 | ||||||||||||||||||||||||
Hongkong Land Holdings, Ltd. | 669,700 | 4,340,523 | ||||||||||||||||||||||||
Hutchison Telecommunications Hong Kong Holdings, Ltd. | 904,000 | 311,978 | ||||||||||||||||||||||||
Hysan Development Company, Ltd. | 500,000 | 2,410,851 | ||||||||||||||||||||||||
Kerry Properties, Ltd. | 732,000 | 2,125,896 | ||||||||||||||||||||||||
Link REIT | 1,064,500 | 7,732,445 | ||||||||||||||||||||||||
Luk Fook Holdings International, Ltd. | 199,000 | 453,643 | ||||||||||||||||||||||||
Man Wah Holdings, Ltd. | 728,800 | 494,511 | ||||||||||||||||||||||||
Pacific Textiles Holdings, Ltd. | 564,000 | 741,147 | ||||||||||||||||||||||||
PCCW, Ltd. | 906,000 | 574,130 | ||||||||||||||||||||||||
Shun Tak Holdings, Ltd. | 994,000 | 327,385 | ||||||||||||||||||||||||
Sino Land Company, Ltd. | 402,000 | 687,055 | ||||||||||||||||||||||||
SJM Holdings, Ltd. | 2,721,000 | 1,707,046 | ||||||||||||||||||||||||
SmarTone Telecommunications Holdings, Ltd. | 244,000 | 402,296 | ||||||||||||||||||||||||
Sun Hung Kai Properties, Ltd. | 373,589 | 5,248,281 | ||||||||||||||||||||||||
Swire Pacific, Ltd., Class A | 289,000 | 3,188,249 | ||||||||||||||||||||||||
Swire Properties, Ltd. | 85,200 | 239,631 | ||||||||||||||||||||||||
Techtronic Industries Company, Ltd. | 297,500 | 1,205,093 | ||||||||||||||||||||||||
Television Broadcasts, Ltd. | 100,200 | 357,325 |
Shares | Value | |||||||||||||||||||||||||
Hong Kong (continued) | ||||||||||||||||||||||||||
Texwinca Holdings, Ltd. | 302,000 | $215,492 | ||||||||||||||||||||||||
The Wharf Holdings, Ltd. | 480,000 | 3,382,816 | ||||||||||||||||||||||||
Value Partners Group, Ltd. | 139,000 | 127,725 | ||||||||||||||||||||||||
Wheelock & Company, Ltd. | 508,000 | 2,900,738 | ||||||||||||||||||||||||
Xinyi Automobile Glass Hong Kong Enterprises, Ltd. (I) | 117,000 | 24,131 | ||||||||||||||||||||||||
Xinyi Glass Holdings, Ltd. (I) | 936,000 | 804,609 | ||||||||||||||||||||||||
Yue Yuen Industrial Holdings, Ltd. | 148,500 | 631,251 | ||||||||||||||||||||||||
Ireland 0.1% | 1,860,812 | |||||||||||||||||||||||||
AerCap Holdings NV (I) | 26,300 | 1,051,211 | ||||||||||||||||||||||||
ICON PLC (I) | 6,000 | 460,740 | ||||||||||||||||||||||||
Smurfit Kappa Group PLC | 14,134 | 348,861 | ||||||||||||||||||||||||
Isle of Man 0.1% | 1,056,064 | |||||||||||||||||||||||||
Playtech PLC | 88,263 | 1,056,064 | ||||||||||||||||||||||||
Israel 2.1% | 25,948,860 | |||||||||||||||||||||||||
Bank Hapoalim BM | 618,645 | 3,321,604 | ||||||||||||||||||||||||
Bank Leumi Le-Israel BM (I) | 1,057,405 | 3,962,408 | ||||||||||||||||||||||||
Bezeq The Israeli Telecommunication Corp., Ltd. | 690,965 | 1,388,791 | ||||||||||||||||||||||||
Check Point Software Technologies, Ltd. (I) | 101,200 | 7,766,088 | ||||||||||||||||||||||||
Harel Insurance Investments & Financial Services, Ltd. | 61,628 | 222,928 | ||||||||||||||||||||||||
Israel Discount Bank, Ltd., Class A (I) | 743,715 | 1,343,047 | ||||||||||||||||||||||||
Mizrahi Tefahot Bank, Ltd. | 3,285 | 39,653 | ||||||||||||||||||||||||
Partner Communications Company, Ltd. (I) | 24,441 | 116,453 | ||||||||||||||||||||||||
Teva Pharmaceutical Industries, Ltd. | 138,228 | 7,001,804 | ||||||||||||||||||||||||
Teva Pharmaceutical Industries, Ltd., ADR | 15,600 | 786,084 | ||||||||||||||||||||||||
Italy 3.0% | 36,044,144 | |||||||||||||||||||||||||
A2A SpA | 878,188 | 1,165,502 | ||||||||||||||||||||||||
ACEA SpA | 30,488 | 397,436 | ||||||||||||||||||||||||
Amplifon SpA | 87,728 | 922,753 | ||||||||||||||||||||||||
ASTM SpA | 14,936 | 170,838 | ||||||||||||||||||||||||
Banca Mediolanum SpA | 379,214 | 2,634,540 | ||||||||||||||||||||||||
Biesse SpA | 3,123 | 44,567 | ||||||||||||||||||||||||
Enel SpA | 2,097,312 | 9,267,880 | ||||||||||||||||||||||||
Eni SpA | 815,339 | 12,308,439 | ||||||||||||||||||||||||
EXOR SpA | 30,659 | 1,260,654 | ||||||||||||||||||||||||
Hera SpA | 602,284 | 1,669,646 | ||||||||||||||||||||||||
Iren SpA | 192,669 | 317,193 | ||||||||||||||||||||||||
Italmobiliare SpA | 12,480 | 515,028 | ||||||||||||||||||||||||
MARR SpA | 20,171 | 388,522 | ||||||||||||||||||||||||
Recordati SpA | 109,610 | 3,317,505 | ||||||||||||||||||||||||
Reply SpA | 3,873 | 477,582 | ||||||||||||||||||||||||
Snam SpA | 32,827 | 182,203 |
Shares | Value | |||||||||||||||||||||||||
Italy (continued) | ||||||||||||||||||||||||||
Societa Cattolica di Assicurazioni SCRL | 101,469 | $588,019 | ||||||||||||||||||||||||
Telecom Italia SpA | 458,125 | 415,837 | ||||||||||||||||||||||||
Japan 26.8% | 326,468,945 | |||||||||||||||||||||||||
ADEKA Corp. | 49,500 | 728,555 | ||||||||||||||||||||||||
Aisin Seiki Company, Ltd. | 49,300 | 2,332,017 | ||||||||||||||||||||||||
Alpine Electronics, Inc. | 17,200 | 207,292 | ||||||||||||||||||||||||
Amano Corp. | 1,300 | 18,704 | ||||||||||||||||||||||||
AOKI Holdings, Inc. | 44,600 | 460,121 | ||||||||||||||||||||||||
Aoyama Trading Company, Ltd. | 34,700 | 1,127,112 | ||||||||||||||||||||||||
Arcland Sakamoto Company, Ltd. | 20,200 | 216,771 | ||||||||||||||||||||||||
Asahi Glass Company, Ltd. | 23,000 | 146,448 | ||||||||||||||||||||||||
Asahi Holdings, Inc. | 8,500 | 146,021 | ||||||||||||||||||||||||
Asahi Kasei Corp. | 255,000 | 2,154,343 | ||||||||||||||||||||||||
Asatsu-DK, Inc. | 7,500 | 184,073 | ||||||||||||||||||||||||
Autobacs Seven Company, Ltd. | 29,800 | 413,141 | ||||||||||||||||||||||||
Bridgestone Corp. | 98,100 | 3,373,950 | ||||||||||||||||||||||||
Calsonic Kansei Corp. | 179,000 | 1,410,418 | ||||||||||||||||||||||||
Canon, Inc. | 212,300 | 6,087,848 | ||||||||||||||||||||||||
Cawachi, Ltd. | 6,100 | 135,008 | ||||||||||||||||||||||||
Central Glass Company, Ltd. | 138,000 | 530,310 | ||||||||||||||||||||||||
Central Japan Railway Company | 67,700 | 11,132,687 | ||||||||||||||||||||||||
Century Tokyo Leasing Corp. | 15,700 | 590,355 | ||||||||||||||||||||||||
Chiyoda Integre Company, Ltd. | 11,200 | 212,082 | ||||||||||||||||||||||||
Coca-Cola West Company, Ltd. | 32,700 | 741,652 | ||||||||||||||||||||||||
Concordia Financial Group, Ltd. (I) | 18,100 | 93,579 | ||||||||||||||||||||||||
Cosmo Energy Holdings Company, Ltd. | 29,500 | 307,998 | ||||||||||||||||||||||||
Credit Saison Company, Ltd. | 10,900 | 187,908 | ||||||||||||||||||||||||
Daicel Corp. | 44,300 | 566,093 | ||||||||||||||||||||||||
Daiichi Sankyo Company, Ltd. | 47,700 | 1,095,877 | ||||||||||||||||||||||||
Daiichikosho Company, Ltd. | 12,900 | 500,037 | ||||||||||||||||||||||||
Daito Trust Construction Company, Ltd. | 17,700 | 2,607,296 | ||||||||||||||||||||||||
Daiwa House Industry Company, Ltd. | 41,200 | 1,064,374 | ||||||||||||||||||||||||
Daiwabo Holdings Company, Ltd. | 172,000 | 365,959 | ||||||||||||||||||||||||
DCM Holdings Company, Ltd. | 118,900 | 906,275 | ||||||||||||||||||||||||
DeNA Company, Ltd. | 69,461 | 2,064,047 | ||||||||||||||||||||||||
Denka Company, Ltd. | 300,000 | 1,268,296 | ||||||||||||||||||||||||
Descente, Ltd. | 17,200 | 192,432 | ||||||||||||||||||||||||
Doutor Nichires Holdings Company, Ltd. | 27,900 | 493,298 | ||||||||||||||||||||||||
DTS Corp. | 6,300 | 129,708 | ||||||||||||||||||||||||
Exedy Corp. | 8,800 | 218,492 | ||||||||||||||||||||||||
FamilyMart Company, Ltd. | 13,607 | 975,329 | ||||||||||||||||||||||||
Fuji Heavy Industries, Ltd. | 106,716 | 4,247,533 |
Shares | Value | |||||||||||||||||||||||||
Japan (continued) | ||||||||||||||||||||||||||
Fuji Oil Holdings, Inc. | 32,100 | $624,064 | ||||||||||||||||||||||||
FUJIFILM Holdings Corp. | 275,800 | 10,378,456 | ||||||||||||||||||||||||
Fujitsu General, Ltd. | 10,000 | 203,424 | ||||||||||||||||||||||||
Fukuoka Financial Group, Inc. | 41,000 | 173,869 | ||||||||||||||||||||||||
Fuyo General Lease Company, Ltd. | 8,300 | 391,077 | ||||||||||||||||||||||||
Geo Holdings Corp. | 29,800 | 379,625 | ||||||||||||||||||||||||
Gree, Inc. | 38,100 | 193,443 | ||||||||||||||||||||||||
Gunze, Ltd. | 35,000 | 103,273 | ||||||||||||||||||||||||
Hanwa Company, Ltd. | 250,000 | 1,396,341 | ||||||||||||||||||||||||
Haseko Corp. | 198,800 | 1,884,326 | ||||||||||||||||||||||||
Heiwado Company, Ltd. | 2,400 | 43,212 | ||||||||||||||||||||||||
Hitachi Capital Corp. | 10,400 | 216,730 | ||||||||||||||||||||||||
Hitachi Chemical Company, Ltd. | 39,000 | 841,923 | ||||||||||||||||||||||||
Horiba, Ltd. | 7,600 | 353,594 | ||||||||||||||||||||||||
Hoya Corp. | 33,000 | 1,279,931 | ||||||||||||||||||||||||
Idemitsu Kosan Company, Ltd. | 53,000 | 965,783 | ||||||||||||||||||||||||
Information Services International-Dentsu, Ltd. | 3,800 | 69,497 | ||||||||||||||||||||||||
Inpex Corp. | 102,900 | 891,902 | ||||||||||||||||||||||||
Isuzu Motors, Ltd. | 67,600 | 779,683 | ||||||||||||||||||||||||
ITOCHU Corp. | 1,622,000 | 19,154,047 | ||||||||||||||||||||||||
Itochu Enex Company, Ltd. | 35,500 | 257,497 | ||||||||||||||||||||||||
Jafco Company, Ltd. | 5,800 | 169,333 | ||||||||||||||||||||||||
Japan Airlines Company, Ltd. | 254,100 | 7,755,672 | ||||||||||||||||||||||||
Japan Tobacco, Inc. | 19,900 | 771,105 | ||||||||||||||||||||||||
K's Holdings Corp. | 104,400 | 1,648,532 | ||||||||||||||||||||||||
Kaneka Corp. | 157,000 | 1,282,246 | ||||||||||||||||||||||||
Kanematsu Corp. | 420,000 | 617,484 | ||||||||||||||||||||||||
KDDI Corp. | 1,142,600 | 33,403,489 | ||||||||||||||||||||||||
Keihin Corp. | 37,800 | 581,252 | ||||||||||||||||||||||||
Kobe Steel, Ltd. | 633,000 | 588,412 | ||||||||||||||||||||||||
Kohnan Shoji Company, Ltd. | 9,700 | 176,457 | ||||||||||||||||||||||||
Koito Manufacturing Company, Ltd. | 1,600 | 76,390 | ||||||||||||||||||||||||
Kokuyo Company, Ltd. | 55,700 | 769,826 | ||||||||||||||||||||||||
Konica Minolta, Inc. | 66,800 | 603,449 | ||||||||||||||||||||||||
Kuraray Company, Ltd. | 94,800 | 1,356,583 | ||||||||||||||||||||||||
Kuroda Electric Company, Ltd. | 14,900 | 280,026 | ||||||||||||||||||||||||
Leopalace21 Corp. | 12,700 | 84,298 | ||||||||||||||||||||||||
Marubeni Corp. | 672,024 | 3,353,602 | ||||||||||||||||||||||||
Medipal Holdings Corp. | 109,135 | 1,728,476 | ||||||||||||||||||||||||
Mitsubishi Chemical Holdings Corp. | 355,949 | 2,252,430 | ||||||||||||||||||||||||
Mitsubishi Electric Corp. | 350,000 | 4,580,258 | ||||||||||||||||||||||||
Mitsubishi UFJ Financial Group, Inc. | 4,531,500 | 24,961,885 | ||||||||||||||||||||||||
Mitsubishi UFJ Lease & Finance Company, Ltd. | 72,000 | 338,112 |
Shares | Value | |||||||||||||||||||||||||
Japan (continued) | ||||||||||||||||||||||||||
Mitsui & Company, Ltd. | 581,000 | $7,736,030 | ||||||||||||||||||||||||
Mitsui Engineering & Shipbuilding Company, Ltd. | 330,000 | 457,404 | ||||||||||||||||||||||||
Mizuho Financial Group, Inc. | 3,579,600 | 6,236,833 | ||||||||||||||||||||||||
Namura Shipbuilding Company, Ltd. | 12,900 | 80,949 | ||||||||||||||||||||||||
NHK Spring Company, Ltd. | 58,800 | 555,022 | ||||||||||||||||||||||||
Nichiha Corp. | 26,700 | 493,985 | ||||||||||||||||||||||||
Nifco, Inc. | 3,700 | 186,538 | ||||||||||||||||||||||||
Nippo Corp. | 46,000 | 833,671 | ||||||||||||||||||||||||
Nippon Electric Glass Company, Ltd. | 53,000 | 266,496 | ||||||||||||||||||||||||
Nippon Light Metal Holdings Company, Ltd. | 117,300 | 249,587 | ||||||||||||||||||||||||
Nippon Paper Industries Company, Ltd. | 90,700 | 1,680,430 | ||||||||||||||||||||||||
Nippon Steel & Sumikin Bussan Corp. | 142,000 | 486,360 | ||||||||||||||||||||||||
Nippon Telegraph & Telephone Corp. | 649,600 | 28,562,309 | ||||||||||||||||||||||||
Nippon Television Holdings, Inc. | 8,450 | 136,583 | ||||||||||||||||||||||||
Nippon Yusen KK | 74,000 | 134,938 | ||||||||||||||||||||||||
Nipro Corp. | 29,300 | 365,178 | ||||||||||||||||||||||||
Nissan Motor Company, Ltd. | 205,230 | 2,016,490 | ||||||||||||||||||||||||
Nissin Electric Company, Ltd. | 9,400 | 146,321 | ||||||||||||||||||||||||
Nitori Holdings Company, Ltd. | 22,200 | 2,247,183 | ||||||||||||||||||||||||
NOK Corp. | 28,600 | 582,386 | ||||||||||||||||||||||||
Nomura Real Estate Holdings, Inc. | 16,500 | 269,101 | ||||||||||||||||||||||||
NTT DOCOMO, Inc. | 238,143 | 6,005,799 | ||||||||||||||||||||||||
Onward Holdings Company, Ltd. | 45,000 | 316,727 | ||||||||||||||||||||||||
Open House Company, Ltd. | 6,100 | 131,912 | ||||||||||||||||||||||||
Orient Corp. (I) | 149,400 | 297,986 | ||||||||||||||||||||||||
ORIX Corp. | 132,800 | 1,913,770 | ||||||||||||||||||||||||
Osaka Gas Company, Ltd. | 40,000 | 157,619 | ||||||||||||||||||||||||
Otsuka Holdings Company, Ltd. | 244,200 | 10,589,392 | ||||||||||||||||||||||||
PanaHome Corp. | 44,000 | 325,715 | ||||||||||||||||||||||||
Pola Orbis Holdings, Inc. | 5,500 | 439,285 | ||||||||||||||||||||||||
Press Kogyo Company, Ltd. | 83,500 | 359,166 | ||||||||||||||||||||||||
Resona Holdings, Inc. | 370,800 | 1,698,162 | ||||||||||||||||||||||||
Ricoh Company, Ltd. | 126,300 | 1,140,781 | ||||||||||||||||||||||||
Ryohin Keikaku Company, Ltd. | 2,100 | 379,158 | ||||||||||||||||||||||||
San-A Company, Ltd. | 5,600 | 262,558 | ||||||||||||||||||||||||
Sanshin Electronics Company, Ltd. | 26,700 | 218,956 | ||||||||||||||||||||||||
Sanyo Shokai, Ltd. | 116,000 | 184,067 | ||||||||||||||||||||||||
Seiko Epson Corp. | 22,300 | 427,396 | ||||||||||||||||||||||||
Sekisui Chemical Company, Ltd. | 186,300 | 2,608,535 | ||||||||||||||||||||||||
Sekisui House, Ltd. | 257,700 | 4,157,690 | ||||||||||||||||||||||||
Showa Denko KK | 30,600 | 379,739 | ||||||||||||||||||||||||
Sojitz Corp. | 1,993,700 | 4,781,887 | ||||||||||||||||||||||||
Sumitomo Chemical Company, Ltd. | 57,000 | 261,503 |
Shares | Value | |||||||||||||||||||||||||
Japan (continued) | ||||||||||||||||||||||||||
Sumitomo Corp. | 171,400 | $1,859,824 | ||||||||||||||||||||||||
Sumitomo Forestry Company, Ltd. | 87,500 | 1,184,522 | ||||||||||||||||||||||||
Sumitomo Heavy Industries, Ltd. | 112,000 | 550,928 | ||||||||||||||||||||||||
Sumitomo Mitsui Financial Group, Inc. | 895,500 | 31,326,487 | ||||||||||||||||||||||||
Sumitomo Mitsui Trust Holdings, Inc. | 147,000 | 527,469 | ||||||||||||||||||||||||
Sumitomo Osaka Cement Company, Ltd. | 185,000 | 837,756 | ||||||||||||||||||||||||
Sumitomo Rubber Industries, Ltd. | 97,600 | 1,450,914 | ||||||||||||||||||||||||
Sumitomo Seika Chemicals Company, Ltd. | 47,000 | 325,965 | ||||||||||||||||||||||||
Sundrug Company, Ltd. | 10,600 | 767,951 | ||||||||||||||||||||||||
Suzuken Company, Ltd. | 9,600 | 278,742 | ||||||||||||||||||||||||
T-Gaia Corp. | 24,100 | 330,034 | ||||||||||||||||||||||||
Takashimaya Company, Ltd. | 37,000 | 271,032 | ||||||||||||||||||||||||
The Chiba Bank, Ltd. | 37,000 | 219,768 | ||||||||||||||||||||||||
The Hyakugo Bank, Ltd. | 46,000 | 169,148 | ||||||||||||||||||||||||
The Joyo Bank, Ltd. | 29,000 | 115,369 | ||||||||||||||||||||||||
The Nippon Signal Company, Ltd. | 13,800 | 112,151 | ||||||||||||||||||||||||
The Nishi-Nippon City Bank, Ltd. | 124,000 | 258,241 | ||||||||||||||||||||||||
The Yokohama Rubber Company, Ltd. | 59,700 | 971,579 | ||||||||||||||||||||||||
Toei Company, Ltd. | 19,000 | 143,150 | ||||||||||||||||||||||||
Toho Holdings Company, Ltd. | 59,900 | 1,164,486 | ||||||||||||||||||||||||
Tokai Rika Company, Ltd. | 38,900 | 771,607 | ||||||||||||||||||||||||
Token Corp. | 4,400 | 324,669 | ||||||||||||||||||||||||
Tokyo Electric Power Company, Inc. (I) | 207,900 | 837,906 | ||||||||||||||||||||||||
Tokyo Seimitsu Company, Ltd. | 11,000 | 292,865 | ||||||||||||||||||||||||
Toppan Printing Company, Ltd. | 27,000 | 240,952 | ||||||||||||||||||||||||
Topre Corp. | 10,500 | 206,537 | ||||||||||||||||||||||||
Tosoh Corp. | 428,000 | 2,640,591 | ||||||||||||||||||||||||
Toyoda Gosei Company, Ltd. | 11,500 | 265,434 | ||||||||||||||||||||||||
Toyota Boshoku Corp. | 8,300 | 190,456 | ||||||||||||||||||||||||
Toyota Tsusho Corp. | 149,800 | 3,430,269 | ||||||||||||||||||||||||
TPR Company, Ltd. | 14,500 | 371,356 | ||||||||||||||||||||||||
TS Tech Company, Ltd. | 48,700 | 1,132,706 | ||||||||||||||||||||||||
Ube Industries, Ltd. | 232,000 | 422,343 | ||||||||||||||||||||||||
UKC Holdings Corp. | 13,900 | 212,435 | ||||||||||||||||||||||||
Valor Holdings Company, Ltd. | 44,900 | 1,212,324 | ||||||||||||||||||||||||
Wacoal Holdings Corp. | 35,000 | 374,776 | ||||||||||||||||||||||||
West Japan Railway Company | 19,800 | 1,134,642 | ||||||||||||||||||||||||
Yamaguchi Financial Group, Inc. | 59,000 | 623,396 | ||||||||||||||||||||||||
Yamazen Corp. | 32,400 | 246,382 | ||||||||||||||||||||||||
Yuasa Trading Company, Ltd. | 16,300 | 315,733 | ||||||||||||||||||||||||
Luxembourg 0.1% | 899,756 | |||||||||||||||||||||||||
APERAM SA | 10,421 | 431,528 |
Shares | Value | |||||||||||||||||||||||||
Luxembourg (continued) | ||||||||||||||||||||||||||
RTL Group SA | 5,562 | $468,228 | ||||||||||||||||||||||||
Malta 0.0% | 172,566 | |||||||||||||||||||||||||
BGP Holdings PLC (I) | 2,714,128 | 172,566 | ||||||||||||||||||||||||
Netherlands 3.3% | 40,132,759 | |||||||||||||||||||||||||
Aalberts Industries NV | 17,863 | 600,359 | ||||||||||||||||||||||||
AVG Technologies NV (I) | 19,600 | 487,256 | ||||||||||||||||||||||||
Boskalis Westminster NV | 8,997 | 322,610 | ||||||||||||||||||||||||
Corbion NV | 24,289 | 663,809 | ||||||||||||||||||||||||
Heineken Holding NV | 32,081 | 2,586,070 | ||||||||||||||||||||||||
Heineken NV | 41,909 | 3,753,424 | ||||||||||||||||||||||||
Koninklijke Ahold Delhaize NV | 601,576 | 14,441,872 | ||||||||||||||||||||||||
PostNL NV (I) | 788,803 | 3,459,297 | ||||||||||||||||||||||||
Randstad Holding NV | 22,278 | 1,054,024 | ||||||||||||||||||||||||
Royal Dutch Shell PLC, A Shares | 86,957 | 2,125,199 | ||||||||||||||||||||||||
TomTom NV (I) | 81,880 | 754,195 | ||||||||||||||||||||||||
Wolters Kluwer NV | 234,974 | 9,884,644 | ||||||||||||||||||||||||
New Zealand 0.2% | 2,410,520 | |||||||||||||||||||||||||
Air New Zealand, Ltd. | 356,085 | 583,649 | ||||||||||||||||||||||||
Chorus, Ltd. | 42,037 | 129,569 | ||||||||||||||||||||||||
Fletcher Building, Ltd. | 77,674 | 596,741 | ||||||||||||||||||||||||
Nuplex Industries, Ltd. | 76,313 | 296,142 | ||||||||||||||||||||||||
SKY Network Television, Ltd. | 228,283 | 804,419 | ||||||||||||||||||||||||
Norway 1.6% | 19,646,116 | |||||||||||||||||||||||||
DNB ASA | 47,692 | 578,375 | ||||||||||||||||||||||||
Ocean Yield ASA | 5,269 | 42,293 | ||||||||||||||||||||||||
Orkla ASA | 379,855 | 3,476,241 | ||||||||||||||||||||||||
Salmar ASA | 8,048 | 222,724 | ||||||||||||||||||||||||
Statoil ASA | 470,953 | 7,388,225 | ||||||||||||||||||||||||
Storebrand ASA (I) | 205,724 | 868,857 | ||||||||||||||||||||||||
Telenor ASA | 193,556 | 3,375,435 | ||||||||||||||||||||||||
Yara International ASA | 104,311 | 3,693,966 | ||||||||||||||||||||||||
Portugal 0.1% | 1,484,802 | |||||||||||||||||||||||||
CTT-Correios de Portugal SA | 183,855 | 1,350,448 | ||||||||||||||||||||||||
The Navigator Company SA | 40,491 | 134,354 | ||||||||||||||||||||||||
Singapore 0.7% | 8,533,033 | |||||||||||||||||||||||||
Ascendas Real Estate Investment Trust | 448,700 | 806,371 | ||||||||||||||||||||||||
BW LPG, Ltd. (S) | 102,330 | 269,727 | ||||||||||||||||||||||||
CapitaLand Commercial Trust | 778,000 | 881,466 | ||||||||||||||||||||||||
CapitaLand Mall Trust | 726,500 | 1,151,149 | ||||||||||||||||||||||||
CapitaLand Retail China Trust | 175,900 | 210,455 |
Shares | Value | |||||||||||||||||||||||||
Singapore (continued) | ||||||||||||||||||||||||||
CDL Hospitality Trusts | 215,900 | $219,455 | ||||||||||||||||||||||||
DBS Group Holdings, Ltd. | 201,100 | 2,209,441 | ||||||||||||||||||||||||
Golden Agri-Resources, Ltd. | 2,966,100 | 782,328 | ||||||||||||||||||||||||
Mapletree Greater China Commercial Trust | 833,200 | 672,195 | ||||||||||||||||||||||||
Mapletree Industrial Trust | 350,000 | 457,108 | ||||||||||||||||||||||||
SATS, Ltd. | 52,900 | 182,803 | ||||||||||||||||||||||||
Starhill Global REIT | 371,000 | 219,137 | ||||||||||||||||||||||||
UOL Group, Ltd. | 63,500 | 258,735 | ||||||||||||||||||||||||
Venture Corp., Ltd. | 31,500 | 212,663 | ||||||||||||||||||||||||
South Africa 0.0% | 87,436 | |||||||||||||||||||||||||
Mondi PLC | 4,297 | 87,436 | ||||||||||||||||||||||||
Spain 2.0% | 24,433,736 | |||||||||||||||||||||||||
Ebro Foods SA | 79,685 | 1,783,814 | ||||||||||||||||||||||||
Endesa SA | 608,707 | 12,404,728 | ||||||||||||||||||||||||
Iberdrola SA | 769,222 | 5,066,805 | ||||||||||||||||||||||||
Repsol SA | 385,337 | 5,176,365 | ||||||||||||||||||||||||
Viscofan SA | 37 | 2,024 | ||||||||||||||||||||||||
Sweden 1.4% | 17,471,739 | |||||||||||||||||||||||||
Axfood AB | 102,048 | 1,811,152 | ||||||||||||||||||||||||
Bilia AB, A Shares | 23,717 | 603,766 | ||||||||||||||||||||||||
Bonava AB, B Shares (I) | 44,876 | 540,987 | ||||||||||||||||||||||||
Castellum AB | 32,494 | 491,270 | ||||||||||||||||||||||||
Fabege AB | 22,285 | 413,043 | ||||||||||||||||||||||||
Fastighets AB Balder, B Shares (I) | 32,561 | 908,699 | ||||||||||||||||||||||||
Hufvudstaden AB, A Shares | 17,685 | 307,421 | ||||||||||||||||||||||||
Industrivarden AB, C Shares | 8,348 | 151,977 | ||||||||||||||||||||||||
Indutrade AB | 4,446 | 95,507 | ||||||||||||||||||||||||
Intrum Justitia AB | 33,046 | 1,042,384 | ||||||||||||||||||||||||
Investor AB, B Shares | 23,631 | 833,273 | ||||||||||||||||||||||||
NCC AB, B Shares | 44,876 | 1,118,238 | ||||||||||||||||||||||||
Sandvik AB | 237,575 | 2,577,094 | ||||||||||||||||||||||||
Securitas AB, B Shares | 49,807 | 865,179 | ||||||||||||||||||||||||
Skanska AB, B Shares | 32,246 | 705,886 | ||||||||||||||||||||||||
Svenska Cellulosa AB, B Shares | 16,430 | 504,987 | ||||||||||||||||||||||||
Telefonaktiebolaget LM Ericsson, B Shares | 523,394 | 3,727,756 | ||||||||||||||||||||||||
Wihlborgs Fastigheter AB | 35,594 | 773,120 | ||||||||||||||||||||||||
Switzerland 5.1% | 62,165,036 | |||||||||||||||||||||||||
Adecco Group AG | 49,458 | 2,849,264 | ||||||||||||||||||||||||
Ascom Holding AG | 20,791 | 380,711 | ||||||||||||||||||||||||
Autoneum Holding AG | 2,002 | 565,864 | ||||||||||||||||||||||||
Baloise Holding AG | 8,954 | 1,066,764 |
Shares | Value | |||||||||||||||||||||||||
Switzerland (continued) | ||||||||||||||||||||||||||
Banque Cantonale Vaudoise | 253 | $166,165 | ||||||||||||||||||||||||
Bucher Industries AG | 161 | 40,794 | ||||||||||||||||||||||||
Cembra Money Bank AG (I) | 6,268 | 454,101 | ||||||||||||||||||||||||
dorma+kaba Holding AG | 1,280 | 1,005,370 | ||||||||||||||||||||||||
Emmi AG (I) | 124 | 82,738 | ||||||||||||||||||||||||
EMS-Chemie Holding AG | 4,479 | 2,385,129 | ||||||||||||||||||||||||
Flughafen Zuerich AG | 2,177 | 402,967 | ||||||||||||||||||||||||
Forbo Holding AG (I) | 388 | 533,240 | ||||||||||||||||||||||||
Georg Fischer AG | 1,854 | 1,492,130 | ||||||||||||||||||||||||
Givaudan SA | 610 | 1,261,743 | ||||||||||||||||||||||||
Helvetia Holding AG | 902 | 451,197 | ||||||||||||||||||||||||
Implenia AG | 671 | 45,279 | ||||||||||||||||||||||||
Kudelski SA (I) | 2,284 | 42,863 | ||||||||||||||||||||||||
Kuehne + Nagel International AG | 31,234 | 4,363,875 | ||||||||||||||||||||||||
LafargeHolcim, Ltd. (I) | 4,891 | 259,678 | ||||||||||||||||||||||||
Logitech International SA (SIX Swiss Exchange) | 50,649 | 1,061,879 | ||||||||||||||||||||||||
Roche Holding AG | 16,732 | 4,084,286 | ||||||||||||||||||||||||
SGS SA | 236 | 519,082 | ||||||||||||||||||||||||
Sika AG | 256 | 1,220,560 | ||||||||||||||||||||||||
Swiss Life Holding AG (I) | 12,428 | 3,115,890 | ||||||||||||||||||||||||
Swiss Re AG | 340,751 | 28,795,717 | ||||||||||||||||||||||||
The Swatch Group AG | 5,438 | 276,367 | ||||||||||||||||||||||||
UBS Group AG | 43,612 | 632,012 | ||||||||||||||||||||||||
Valora Holding AG | 515 | 140,359 | ||||||||||||||||||||||||
Vontobel Holding AG | 11,631 | 562,175 | ||||||||||||||||||||||||
Zurich Insurance Group AG (I) | 15,257 | 3,906,837 | ||||||||||||||||||||||||
United Kingdom 15.9% | 194,116,992 | |||||||||||||||||||||||||
3i Group PLC | 5,384 | 43,454 | ||||||||||||||||||||||||
AstraZeneca PLC | 550,215 | 35,516,819 | ||||||||||||||||||||||||
AstraZeneca PLC, ADR (L) | 14,500 | 475,745 | ||||||||||||||||||||||||
Beazley PLC | 168,073 | 860,704 | ||||||||||||||||||||||||
Bellway PLC | 35,779 | 1,095,094 | ||||||||||||||||||||||||
Berkeley Group Holdings PLC | 158,160 | 5,549,307 | ||||||||||||||||||||||||
Bovis Homes Group PLC | 47,450 | 558,593 | ||||||||||||||||||||||||
BP PLC | 1,623,896 | 9,128,841 | ||||||||||||||||||||||||
British American Tobacco PLC | 376,437 | 23,355,068 | ||||||||||||||||||||||||
British American Tobacco PLC, ADR | 8,900 | 1,105,291 | ||||||||||||||||||||||||
Carillion PLC | 301,911 | 1,031,620 | ||||||||||||||||||||||||
Centrica PLC | 2,520,011 | 7,705,586 | ||||||||||||||||||||||||
Compass Group PLC | 195,572 | 3,701,674 | ||||||||||||||||||||||||
Crest Nicholson Holdings PLC | 180,835 | 1,104,532 | ||||||||||||||||||||||||
EnQuest PLC (I) | 634,284 | 222,563 |
Shares | Value | |||||||||||||||||||||||||
United Kingdom (continued) | ||||||||||||||||||||||||||
Galliford Try PLC | 17,594 | $262,385 | ||||||||||||||||||||||||
GlaxoSmithKline PLC | 560,929 | 12,074,097 | ||||||||||||||||||||||||
GlaxoSmithKline PLC, ADR | 25,600 | 1,112,576 | ||||||||||||||||||||||||
Henderson Group PLC | 563,545 | 1,765,054 | ||||||||||||||||||||||||
Home Retail Group PLC (L) | 847,514 | 1,776,453 | ||||||||||||||||||||||||
Hunting PLC | 48,535 | 296,114 | ||||||||||||||||||||||||
IG Group Holdings PLC | 168,934 | 2,110,119 | ||||||||||||||||||||||||
Imperial Brands PLC | 210,526 | 11,042,755 | ||||||||||||||||||||||||
Inchcape PLC | 291,435 | 2,685,854 | ||||||||||||||||||||||||
Indivior PLC | 163,903 | 676,592 | ||||||||||||||||||||||||
Intermediate Capital Group PLC | 141,111 | 1,103,357 | ||||||||||||||||||||||||
International Consolidated Airlines Group SA | 184,925 | 931,226 | ||||||||||||||||||||||||
J Sainsbury PLC | 382,572 | 1,207,292 | ||||||||||||||||||||||||
Jupiter Fund Management PLC | 91,413 | 503,364 | ||||||||||||||||||||||||
Kingfisher PLC | 1,175,850 | 5,734,675 | ||||||||||||||||||||||||
Lookers PLC | 154,875 | 277,834 | ||||||||||||||||||||||||
National Express Group PLC | 26,987 | 125,338 | ||||||||||||||||||||||||
Persimmon PLC | 316,080 | 7,571,580 | ||||||||||||||||||||||||
Reckitt Benckiser Group PLC | 129,520 | 12,511,427 | ||||||||||||||||||||||||
Royal Mail PLC | 704,430 | 4,753,567 | ||||||||||||||||||||||||
Savills PLC | 11,802 | 114,655 | ||||||||||||||||||||||||
The Sage Group PLC | 458,404 | 4,367,555 | ||||||||||||||||||||||||
Unilever NV | 186,330 | 8,573,245 | ||||||||||||||||||||||||
WH Smith PLC | 105,881 | 2,119,153 | ||||||||||||||||||||||||
WM Morrison Supermarkets PLC | 856,029 | 2,214,986 | ||||||||||||||||||||||||
WPP PLC | 725,525 | 16,750,848 | ||||||||||||||||||||||||
Preferred securities 0.5% | $6,321,192 | |||||||||||||||||||||||||
(Cost $9,976,657) | ||||||||||||||||||||||||||
Germany 0.5% | 6,321,192 | |||||||||||||||||||||||||
Jungheinrich AG | 26,223 | 823,552 | ||||||||||||||||||||||||
Porsche Automobil Holding SE | 108,805 | 5,497,640 | ||||||||||||||||||||||||
Yield (%) | Shares | Value | ||||||||||||||||||||||||
Securities lending collateral 1.1% | $13,927,299 | |||||||||||||||||||||||||
(Cost $13,927,299) | ||||||||||||||||||||||||||
John Hancock Collateral Trust (W) | 0.6375(Y) | 1,391,867 | 13,927,299 | |||||||||||||||||||||||
Yield* (%) | Maturity date | Par value^ | Value | |||||||||||||||||||||||
Short-term investments 1.1% | $12,850,157 | |||||||||||||||||||||||||
(Cost $12,849,606) | ||||||||||||||||||||||||||
U.S. Government 0.8% | 8,889,026 | |||||||||||||||||||||||||
U.S. Treasury Bill | 0.372 | 01-05-17 | 8,900,000 | 8,889,026 |
Yield (%) | Shares | Value | ||||||||||||||||||||||||
Money market funds 0.3% | $3,961,131 | |||||||||||||||||||||||||
JPMorgan U.S. Treasury Plus Money Market Fund, Institutional Class | 0.1886(Y) | 3,961,131 | 3,961,131 | |||||||||||||||||||||||
Total investments (Cost $1,245,780,262)† 100.7% | $1,228,481,200 | |||||||||||||||||||||||||
Other assets and liabilities, net (0.7%) | ($8,475,181 | ) | ||||||||||||||||||||||||
Total net assets 100.0% | $1,220,006,019 |
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 | ||||||||||||||||||||||||||
ADR | American Depositary Receipts | |||||||||||||||||||||||||
(I) | Non-income producing security. | |||||||||||||||||||||||||
(L) | A portion of this security is on loan as of 8-31-16. | |||||||||||||||||||||||||
(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 8-31-16. | |||||||||||||||||||||||||
* | 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 8-31-16, the aggregate cost of investment securities for federal income tax purposes was $1,292,776,082. Net unrealized depreciation aggregated to $64,294,882, of which $71,075,164 related to appreciated investment securities and $135,370,046 related to depreciated investment securities. |
Financial statements
STATEMENT OF ASSETS AND LIABILITIES 8-31-16 (unaudited)
Assets | |||||||||||||||||||||||||||||||||
Unaffiliated investments, at value (Cost $1,231,852,963) including $13,175,018 of securities loaned | $1,214,553,901 | ||||||||||||||||||||||||||||||||
Affiliated investments, at value (Cost $13,927,299) | 13,927,299 | ||||||||||||||||||||||||||||||||
Total investments, at value (Cost $1,245,780,262) | 1,228,481,200 | ||||||||||||||||||||||||||||||||
Foreign currency, at value (Cost $983,018) | 977,985 | ||||||||||||||||||||||||||||||||
Receivable for fund shares sold | 479,527 | ||||||||||||||||||||||||||||||||
Dividends and interest receivable | 5,048,746 | ||||||||||||||||||||||||||||||||
Receivable for securities lending income | 9,502 | ||||||||||||||||||||||||||||||||
Other receivables and prepaid expenses | 135,875 | ||||||||||||||||||||||||||||||||
Total assets | 1,235,132,835 | ||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Payable for fund shares repurchased | 720,183 | ||||||||||||||||||||||||||||||||
Payable upon return of securities loaned | 13,883,888 | ||||||||||||||||||||||||||||||||
Payable to affiliates | |||||||||||||||||||||||||||||||||
Accounting and legal services fees | 34,236 | ||||||||||||||||||||||||||||||||
Transfer agent fees | 17,290 | ||||||||||||||||||||||||||||||||
Distribution and service fees | 891 | ||||||||||||||||||||||||||||||||
Trustees' fees | 1,912 | ||||||||||||||||||||||||||||||||
Investment management fees | 2,713 | ||||||||||||||||||||||||||||||||
Other liabilities and accrued expenses | 465,703 | ||||||||||||||||||||||||||||||||
Total liabilities | 15,126,816 | ||||||||||||||||||||||||||||||||
Net assets | $1,220,006,019 | ||||||||||||||||||||||||||||||||
Net assets consist of | |||||||||||||||||||||||||||||||||
Paid-in capital | $1,483,436,765 | ||||||||||||||||||||||||||||||||
Undistributed net investment income | 32,560,278 | ||||||||||||||||||||||||||||||||
Accumulated net realized gain (loss) on investments, futures contracts and foreign currency transactions | (278,647,258 | ) | |||||||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | (17,343,766 | ) | |||||||||||||||||||||||||||||||
Net assets | $1,220,006,019 | ||||||||||||||||||||||||||||||||
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 ($112,835,058 ÷ 3,919,144 shares)1 | $28.79 | ||||||||||||||||||||
Class B ($1,516,398 ÷ 52,936 shares)1 | $28.65 | ||||||||||||||||||||
Class C ($9,495,716 ÷ 331,559 shares)1 | $28.64 | ||||||||||||||||||||
Class I ($37,008,222 ÷ 1,279,308 shares) | $28.93 | ||||||||||||||||||||
Class R1 ($964,914 ÷ 33,591 shares) | $28.73 | ||||||||||||||||||||
Class R2 ($230,703 ÷ 7,977 shares) | $28.92 | ||||||||||||||||||||
Class R3 ($451,783 ÷ 15,629 shares) | $28.91 | ||||||||||||||||||||
Class R4 ($95,562 ÷ 3,304 shares) | $28.92 | ||||||||||||||||||||
Class R5 ($145,653 ÷ 5,033 shares) | $28.94 | ||||||||||||||||||||
Class R6 ($825,837 ÷ 28,500 shares) | $28.98 | ||||||||||||||||||||
Class 1 ($38,131,378 ÷ 1,315,686 shares) | $28.98 | ||||||||||||||||||||
Class NAV ($1,018,304,795 ÷ 35,162,153 shares) | $28.96 | ||||||||||||||||||||
Maximum offering price per share | |||||||||||||||||||||
Class A (net assets value per share ÷ 95%)2 | $30.31 |
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 six months ended 8-31-16 (unaudited)
Investment income | ||||||||||||||||||||||||
Dividends | $41,960,430 | |||||||||||||||||||||||
Securities lending | 691,715 | |||||||||||||||||||||||
Interest | 52,136 | |||||||||||||||||||||||
Less foreign taxes withheld | (4,453,585 | ) | ||||||||||||||||||||||
Total investment income | 38,250,696 | |||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Investment management fees | 6,306,826 | |||||||||||||||||||||||
Distribution and service fees | 250,775 | |||||||||||||||||||||||
Accounting and legal services fees | 115,440 | |||||||||||||||||||||||
Transfer agent fees | 237,234 | |||||||||||||||||||||||
Trustees' fees | 15,798 | |||||||||||||||||||||||
State registration fees | 82,059 | |||||||||||||||||||||||
Printing and postage | 78,654 | |||||||||||||||||||||||
Professional fees | 99,050 | |||||||||||||||||||||||
Custodian fees | 79,108 | |||||||||||||||||||||||
Other | 15,134 | |||||||||||||||||||||||
Total expenses | 7,280,078 | |||||||||||||||||||||||
Less expense reductions | (73,500 | ) | ||||||||||||||||||||||
Net expenses | 7,206,578 | |||||||||||||||||||||||
Net investment income | 31,044,118 | |||||||||||||||||||||||
Realized and unrealized gain (loss) | ||||||||||||||||||||||||
Net realized gain (loss) on | ||||||||||||||||||||||||
Unaffiliated investments and foreign currency transactions | (52,607,588 | ) | ||||||||||||||||||||||
Affiliated investments | 7,887 | |||||||||||||||||||||||
Futures contracts | 700,893 | |||||||||||||||||||||||
(51,898,808 | ) | |||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of | ||||||||||||||||||||||||
Unaffiliated investments and translation of assets and liabilities in foreign currencies | 158,731,551 | |||||||||||||||||||||||
Affiliated investments | (211 | ) | ||||||||||||||||||||||
Futures contracts | 2,670,156 | |||||||||||||||||||||||
161,401,496 | ||||||||||||||||||||||||
Net realized and unrealized gain | 109,502,688 | |||||||||||||||||||||||
Increase in net assets from operations | $140,546,806 |
STATEMENTS OF CHANGES IN NET ASSETS
Six months ended 8-31-16 | Year ended 2-29-16 | |||||||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||
Increase (decrease) in net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
From operations | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | $31,044,118 | $36,113,948 | ||||||||||||||||||||||||||||||||||||||||||||||
Net realized loss | (51,898,808 | ) | (163,815,817 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) | 161,401,496 | (231,314,123 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Increase (decrease) in net assets resulting from operations | 140,546,806 | (359,015,992 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to shareholders | ||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||||||||||||||||||||||||||
Class A | — | (1,992,429 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class B | — | (14,681 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class C | — | (95,480 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class I | — | (10,632,399 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class R1 | — | (7,303 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class R2 | — | (2,902 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class R3 | — | (5,337 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class R4 | — | (1,628 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class R5 | — | (1,926 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class R6 | — | (3,901 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class 1 | — | (806,576 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class NAV | — | (21,651,850 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Total distributions | — | (35,216,412 | ) | |||||||||||||||||||||||||||||||||||||||||||||
From fund share transactions | (537,888,800 | ) | 529,119,067 | |||||||||||||||||||||||||||||||||||||||||||||
Total increase (decrease) | (397,341,994 | ) | 134,886,663 | |||||||||||||||||||||||||||||||||||||||||||||
Net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning of period | 1,617,348,013 | 1,482,461,350 | ||||||||||||||||||||||||||||||||||||||||||||||
End of period | $1,220,006,019 | $1,617,348,013 | ||||||||||||||||||||||||||||||||||||||||||||||
Undistributed net investment income | $32,560,278 | $1,516,160 |
Financial highlights
Class A Shares Period ended | 8-31-16 | 1 | 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 | $26.35 | $33.20 | $35.40 | $28.81 | $27.72 | $30.85 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.52 | 0.56 | 0.62 | 1.05 | 3 | 0.71 | 0.58 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.92 | (6.92 | ) | (1.77 | ) | 6.52 | 1.31 | (3.32 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.44 | (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 | $28.79 | $26.35 | $33.20 | $35.40 | $28.81 | $27.72 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4,5 | 9.26 | 6 | (19.28 | ) | (2.98 | ) | 26.56 | 7.41 | (8.73 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $113 | $110 | $112 | $109 | $91 | $374 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.40 | 7,8 | 1.40 | 1.47 | 1.46 | 1.58 | 1.58 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.36 | 7,8 | 1.39 | 1.47 | 1.46 | 1.58 | 1.58 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.62 | 7 | 1.81 | 1.81 | 3.27 | 3 | 2.66 | 2.05 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 | 42 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. |
Class B Shares Period ended | 8-31-16 | 1 | 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 | $26.31 | $33.12 | $35.27 | $28.70 | $27.61 | $30.70 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.42 | 0.37 | 0.34 | 0.73 | 3 | 0.42 | 0.44 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.92 | (6.95 | ) | (1.74 | ) | 6.53 | 1.41 | (3.34 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.34 | (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 | $28.65 | $26.31 | $33.12 | $35.27 | $28.70 | $27.61 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4,5 | 8.89 | 6 | (19.92 | ) | (3.77 | ) | 25.50 | 6.71 | (9.38 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $2 | $2 | $3 | $3 | $3 | $4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.10 | 7,8 | 2.30 | 2.66 | 2.64 | 2.94 | 2.49 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 2.09 | 7,8 | 2.15 | 2.31 | 2.30 | 2.30 | 2.30 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.93 | 7 | 1.18 | 1.02 | 2.28 | 3 | 1.56 | 1.58 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 | 42 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. |
Class C Shares Period ended | 8-31-16 | 1 | 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 | $26.31 | $33.12 | $35.27 | $28.70 | $27.61 | $30.71 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.42 | 0.35 | 0.29 | 0.83 | 3 | 0.42 | 0.43 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.91 | (6.91 | ) | (1.68 | ) | 6.43 | 1.41 | (3.34 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.33 | (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 | $28.64 | $26.31 | $33.12 | $35.27 | $28.70 | $27.61 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4,5 | 8.86 | 6 | (19.89 | ) | (3.76 | ) | 25.50 | 6.71 | (9.41 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $9 | $10 | $12 | $8 | $4 | $4 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.10 | 7,8 | 2.13 | 2.30 | 2.46 | 2.77 | 2.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 2.09 | 7,8 | 2.12 | 2.29 | 2.30 | 2.30 | 2.30 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.91 | 7 | 1.14 | 0.86 | 2.59 | 3 | 1.54 | 1.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 | 42 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. |
Class I Shares Period ended | 8-31-16 | 1 | 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 | $26.44 | $33.32 | $35.52 | $28.90 | $27.78 | $30.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.84 | 0.67 | 0.71 | 1.10 | 3 | 0.68 | 0.72 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.65 | (6.96 | ) | (1.76 | ) | 6.60 | 1.49 | (3.36 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.49 | (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 | $28.93 | $26.44 | $33.32 | $35.52 | $28.90 | $27.78 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 9.42 | 5 | (19.03 | ) | (2.65 | ) | 26.94 | 7.92 | (8.33 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $37 | $514 | $541 | $527 | $392 | $411 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.10 | 6,7 | 1.08 | 1.14 | 1.15 | 1.17 | 1.16 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.09 | 6,7 | 1.08 | 1.13 | 1.15 | 1.17 | 1.16 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 5.86 | 6 | 2.15 | 2.08 | 3.42 | 3 | 2.49 | 2.54 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 | 42 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. |
Class R1 Shares Period ended | 8-31-16 | 1 | 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 | $26.34 | $33.16 | $35.33 | $28.75 | $27.66 | $30.77 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.45 | 0.41 | 0.43 | 0.85 | 3 | 0.51 | 0.53 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.94 | (6.89 | ) | (1.70 | ) | 6.56 | 1.43 | (3.33 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.39 | (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 | $28.73 | $26.34 | $33.16 | $35.33 | $28.75 | $27.66 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 9.07 | 5 | (19.62 | ) | (3.38 | ) | 26.00 | 7.10 | (9.00 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1 | $1 | $1 | — | 6 | — | 6 | — | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.73 | 7,8 | 2.46 | 4.91 | 5.71 | 7.16 | 7.37 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.72 | 7,8 | 1.79 | 1.90 | 1.90 | 1.90 | 1.90 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.17 | 7 | 1.34 | 1.26 | 2.67 | 3 | 1.87 | 1.88 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 | 42 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. |
Class R2 Shares Period ended | 8-31-16 | 1 | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $26.48 | $33.34 | $35.53 | $28.91 | $27.80 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income3 | 0.50 | 0.63 | 0.51 | 0.94 | 4 | 0.59 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.94 | (7.06 | ) | (1.72 | ) | 6.60 | 1.43 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.44 | (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 | $28.92 | $26.48 | $33.34 | $35.53 | $28.91 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)5 | 9.21 | 6 | (19.41 | ) | (3.15 | ) | 26.32 | 7.39 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | — | 7 | — | 7 | — | 7 | — | 7 | — | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.47 | 8,9 | 3.61 | 8.98 | 15.89 | 20.70 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.46 | 8,9 | 1.54 | 1.65 | 1.65 | 1.65 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.43 | 8 | 2.03 | 1.51 | 2.94 | 4 | 2.16 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | The inception date for Class R2 shares is 3-1-12. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Less than $500,000. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. |
Class R3 Shares Period ended | 8-31-16 | 1 | 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 | $26.49 | $33.36 | $35.54 | $28.92 | $27.80 | $30.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.48 | 0.38 | 0.48 | 1.09 | 3 | 0.53 | 0.57 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.94 | (6.86 | ) | (1.73 | ) | 6.40 | 1.46 | (3.38 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.42 | (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 | $28.91 | $26.49 | $33.36 | $35.54 | $28.92 | $27.80 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 9.14 | 5 | (19.54 | ) | (3.28 | ) | 26.12 | 7.28 | (8.95 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | — | 6 | — | 6 | — | 6 | — | 6 | — | 6 | — | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.62 | 7,8 | 2.96 | 9.34 | 18.96 | 47.36 | 45.66 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.61 | 7,8 | 1.67 | 1.80 | 1.80 | 1.80 | 1.80 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.35 | 7 | 1.27 | 1.40 | 3.36 | 3 | 1.93 | 2.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 | 42 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. |
Class R4 Shares Period ended | 8-31-16 | 1 | 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 | $26.45 | $33.31 | $35.51 | $28.89 | $27.79 | $30.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.52 | 0.70 | 0.69 | 0.99 | 3 | 0.64 | 0.65 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.95 | (7.06 | ) | (1.82 | ) | 6.63 | 1.44 | (3.38 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.47 | (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 | $28.92 | $26.45 | $33.31 | $35.51 | $28.89 | $27.79 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 9.34 | 5 | (19.21 | ) | (2.91 | ) | 26.66 | 7.61 | (8.67 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | — | 6 | — | 6 | — | 6 | — | 6 | — | 6 | — | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.31 | 7,8 | 4.41 | 15.63 | 21.10 | 42.45 | 42.74 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.21 | 7,8 | 1.31 | 1.40 | 1.40 | 1.43 | 1.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.58 | 7 | 2.22 | 2.01 | 3.05 | 3 | 2.34 | 2.29 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 | 42 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. |
Class R5 Shares Period ended | 8-31-16 | 1 | 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 | $26.44 | $33.30 | $35.51 | $28.90 | $27.78 | $30.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.56 | 0.75 | 0.70 | 1.11 | 3 | 0.70 | 0.73 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.94 | (7.04 | ) | (1.77 | ) | 6.57 | 1.45 | (3.38 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.50 | (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 | $28.94 | $26.44 | $33.30 | $35.51 | $28.90 | $27.78 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 9.46 | 5 | (19.03 | ) | (2.72 | ) | 26.87 | 7.88 | (8.38 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | — | 6 | — | 6 | — | 6 | — | 6 | — | 6 | — | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.03 | 7,8 | 4.06 | 12.76 | 16.15 | 21.14 | 20.87 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.02 | 7,8 | 1.10 | 1.20 | 1.20 | 1.20 | 1.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.86 | 7 | 2.40 | 2.05 | 3.45 | 3 | 2.57 | 2.58 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 | 42 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. |
Class R6 Shares Period ended | 8-31-16 | 1 | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $26.47 | $33.36 | $35.57 | $28.94 | $27.82 | $28.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income3 | 0.59 | 0.65 | 0.76 | 1.13 | 4 | 0.73 | 0.26 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.92 | (6.92 | ) | (1.77 | ) | 6.60 | 1.45 | 0.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.51 | (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 | $28.98 | $26.47 | $33.36 | $35.57 | $28.94 | $27.82 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)5 | 9.48 | 6 | (18.94 | ) | (2.51 | ) | 27.00 | 7.95 | 1.49 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1 | $1 | — | 7 | — | 7 | — | 7 | — | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 0.98 | 8,9 | 2.89 | 11.51 | 14.17 | 21.97 | 16.83 | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.96 | 8,9 | 0.97 | 1.00 | 1.12 | 1.12 | 1.12 | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 4.07 | 8 | 2.18 | 2.22 | 3.50 | 4 | 2.66 | 1.98 | 8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 | 42 | 10 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | The inception date for Class R6 shares is 9-1-11. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Less than $500,000. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
10 | The portfolio turnover is shown for the period from 3-1-11 to 2-29-12. |
Class 1 Shares Period ended | 8-31-16 | 1 | 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 | $26.48 | $33.37 | $35.58 | $28.94 | $27.82 | $30.99 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.57 | 0.70 | 0.76 | 1.14 | 3 | 0.75 | 0.79 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.93 | (6.98 | ) | (1.78 | ) | 6.61 | 1.44 | (3.41 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.50 | (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 | $28.98 | $26.48 | $33.37 | $35.58 | $28.94 | $27.82 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 9.44 | 5 | (18.98 | ) | (2.56 | ) | 27.09 | 8.00 | (8.27 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $38 | $36 | $42 | $44 | $37 | $39 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.02 | 6,7 | 1.02 | 1.06 | 1.06 | 1.08 | 1.07 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.01 | 6,7 | 1.01 | 1.05 | 1.06 | 1.08 | 1.07 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.93 | 6 | 2.25 | 2.20 | 3.53 | 3 | 2.76 | 2.76 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 | 42 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. |
Class NAV Shares Period ended | 8-31-16 | 1 | 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 | $26.45 | $33.34 | $35.55 | $28.92 | $27.80 | $30.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.57 | 0.68 | 0.77 | 1.14 | 3 | 0.82 | 0.81 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.94 | (6.95 | ) | (1.78 | ) | 6.62 | 1.38 | (3.43 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.51 | (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 | $28.96 | $26.45 | $33.34 | $35.55 | $28.92 | $27.80 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 9.49 | 5 | (18.96 | ) | (2.51 | ) | 27.14 | 8.06 | (8.24 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1,018 | $944 | $771 | $823 | $611 | $753 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 0.97 | 6,7 | 0.97 | 1.01 | 1.01 | 1.03 | 1.02 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.96 | 6,7 | 0.96 | 1.00 | 1.00 | 1.03 | 1.02 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.97 | 6 | 2.20 | 2.25 | 3.54 | 3 | 3.03 | 2.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 18 | 70 | 81 | 47 | 53 | 42 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Includes reimbursement for overbilling of custody expenses in prior years of 0.03%. |
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 for each class may differ. Class B shares convert to Class A shares eight years after purchase.
The fund's Trustees have approved the merger of this fund with John Hancock Disciplined Value International Fund, pursuant to shareholder approval, on or about November 4, 2016. As of July 28, 2016, the fund was closed to new investors.
Note 2 — Significant accounting policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP), which require management to make certain estimates and assumptions as of the date of the financial statements. Actual results could differ from those estimates and those differences could be significant. The fund qualifies as an investment company under Topic 946 of Accounting Standards Codification of US GAAP.
Events or transactions occurring after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the fund:
Security valuation. Investments are stated at value as of the scheduled close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 p.m., Eastern Time. In case of emergency or other disruption resulting in the NYSE not opening for trading or the NYSE closing at a time other than the regularly scheduled close, the net asset value (NAV) may be determined as of the regularly scheduled close of the NYSE pursuant to the fund's Valuation Policies and Procedures. 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 (SEC) 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 NAVs 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.
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 August 31, 2016, by major security category or type:
Total value at 8-31-16 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | ||||||||||||||
Common stocks | |||||||||||||||||
Australia | $61,622,850 | — | $61,622,850 | — | |||||||||||||
Austria | 7,234,474 | — | 7,234,474 | — | |||||||||||||
Belgium | 6,752,008 | — | 6,752,008 | — | |||||||||||||
Canada | 35,254,824 | $35,254,824 | — | — | |||||||||||||
China | 1,555,052 | — | 1,555,052 | — | |||||||||||||
Denmark | 10,625,204 | — | 10,625,204 | — | |||||||||||||
Faroe Islands | 1,454,799 | — | 1,454,799 | — | |||||||||||||
Finland | 15,285,309 | — | 15,285,309 | — | |||||||||||||
France | 108,773,816 | — | 108,773,816 | — | |||||||||||||
Germany | 125,720,505 | — | 125,720,505 | — | |||||||||||||
Hong Kong | 58,170,395 | — | 58,170,395 | — | |||||||||||||
Ireland | 1,860,812 | 1,511,951 | 348,861 | — | |||||||||||||
Isle of Man | 1,056,064 | — | 1,056,064 | — | |||||||||||||
Israel | 25,948,860 | 8,552,172 | 17,396,688 | — | |||||||||||||
Italy | 36,044,144 | — | 36,044,144 | — | |||||||||||||
Japan | 326,468,945 | — | 326,468,945 | — | |||||||||||||
Luxembourg | 899,756 | — | 899,756 | — | |||||||||||||
Malta | 172,566 | — | — | $172,566 | |||||||||||||
Netherlands | 40,132,759 | 487,256 | 39,645,503 | — | |||||||||||||
New Zealand | 2,410,520 | — | 2,410,520 | — | |||||||||||||
Norway | 19,646,116 | — | 19,646,116 | — | |||||||||||||
Portugal | 1,484,802 | — | 1,484,802 | — | |||||||||||||
Singapore | 8,533,033 | — | 8,533,033 | — | |||||||||||||
South Africa | 87,436 | — | 87,436 | — | |||||||||||||
Spain | 24,433,736 | — | 24,433,736 | — | |||||||||||||
Sweden | 17,471,739 | — | 17,471,739 | — | |||||||||||||
Switzerland | 62,165,036 | — | 62,165,036 | — |
Total value at 8-31-16 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | ||||||||||||||
United Kingdom | 194,116,992 | 2,693,612 | 191,423,380 | — | |||||||||||||
Preferred securities | 6,321,192 | — | 6,321,192 | — | |||||||||||||
Securities lending collateral | 13,927,299 | 13,927,299 | — | — | |||||||||||||
Short-term investments | 12,850,157 | 3,961,131 | 8,889,026 | — | |||||||||||||
Total investments in securities | $1,228,481,200 | $66,388,245 | $1,161,920,389 | $172,566 |
Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily NAV calculations. However, for financial reporting purposes, investment transactions are reported on trade date. 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 NAV and is registered with the SEC 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. Securities lending income received by the fund is net of fees retained by the securities lending agent. Net income received from JHCT is a component of securities lending income as recorded on the Statement of operations.
Obligations to repay collateral received by the fund are shown on the Statement of assets and liabilities as Payable upon return of securities loaned and are secured by the loaned securities. As of August 31, 2016, the fund loaned common stocks valued at $13,175,018 and received $13,883,888 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.
Effective June 30, 2016, 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 $1 billion unsecured committed line of credit. Excluding commitments designated for certain funds, the fund can borrow up to an aggregate commitment amount of $750 million, subject to asset coverage and other limitations as specified in the agreement. A commitment fee payable at the end of each calendar quarter, based on the average daily unused portion of the line of credit, is charged to each participating fund based on a combination of fixed and asset based allocations and is reflected in Other expenses on the Statement of operations. Prior to June 30, 2016, the fund had a similar agreement that enabled them to participate in a $750 million unsecured committed line of credit. For the six months ended August 31, 2016, the fund had no borrowings under either line of credit. Commitment fees for the six months ended August 31, 2016, were $3,456.
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.
During the year ended August 31, 2016, the fund received reimbursement from State Street Bank for overbilling of custody out-of-pocket fees from prior years. As a result of the reimbursement, the fund reflects negative custodian fees in the current reporting period. Custodian fees incurred by the fund for the six months ended August 31, 2016 prior to this reimbursement was $410,471.
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.
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.
Distributions paid by the fund with respect to each class of shares are calculated in the same manner, at the same time and in the same amount, except for the effect of class level expenses that may be applied differently to each class.
Such distributions, on a tax basis, are determined in conformity with income tax regulations, which may differ from US GAAP.
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 investments in 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 (over-the-counter) 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 on an exchange or central clearinghouse. Exchange-traded transactions 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.
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 six months ended August 31, 2016, the fund used futures contracts to gain exposure to certain securities markets. The fund held futures contracts with notional values up to approximately $65.5 million, as measured at each quarter end. At August 31, 2016, the fund held no open futures contracts.
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 six months ended August 31, 2016:
Statement of operations location - Net realized gain (loss) on: | |
Risk | Futures contracts |
Equity | $700,893 |
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 six months ended August 31, 2016:
Statement of operations location - Change in unrealized appreciation (depreciation): | |
Risk | Futures contracts |
Equity | $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 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) 0.920% 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.
The Advisor has contractually agreed to waive a portion of its management fee and/or reimburse expenses for certain funds of the John Hancock group of funds complex, including the fund (the participating portfolios). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund. During the six months ended August 31, 2016, this waiver amounted to 0.01% of the fund's average net assets (on an annualized basis). 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 August 31, 2017, or until the merger date, 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 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 shall remain in effect until August 31, 2017, or until the merger date, 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.
For the six months ended August 31, 2016, the expense reductions described above amounted to the following:
Class | Expense reductions | Class | Expense reductions | |
Class A | $24,043 | Class R4 | $3 | |
Class B | 61 | Class R5 | 5 | |
Class C | 378 | Class R6 | 111 | |
Class I | 9,525 | Class 1 | 1,435 | |
Class R1 | 34 | Class NAV | 37,837 | |
Class R2 | 8 | Total | $73,457 | |
Class R3 | 17 |
Expenses waived or reimbursed in the current fiscal period are not subject to recapture in future fiscal periods.
The investment management fees, including the impact of the waivers and reimbursements as described above, incurred for the six months ended August 31, 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 six months ended August 31, 2016 amounted to an annual rate of 0.02% of the fund's average daily net assets.
Distribution and service plans. The fund has a distribution agreement with the Distributor. The fund has adopted distribution and service plans with respect to Class A, Class B, Class C, Class R1, Class R2, Class R3, 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 shall remain in effect until August 31, 2017, or until the merger date, 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 $43 for Class R4 shares for the six months ended August 31, 2016.
Sales charges. Class A shares are assessed up-front sales charges, which resulted in payments to the Distributor amounting to $179,640 for the six months ended August 31, 2016. Of this amount, $30,854 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $146,888 was paid as sales commissions to broker-dealers and $1,898 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 six months ended August 31, 2016, CDSCs received by the Distributor amounted to $504, $686 and $943 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 six months ended August 31, 2016 were:
Class | Distribution and service fees | Transfer agent fees |
Class A | $176,980 | $75,191 |
Class B | 8,107 | 1,036 |
Class C | 50,589 | 6,456 |
Class I | — | 154,316 |
Class R1 | 3,401 | 80 |
Class R2 | 505 | 18 |
Class R3 | 1,442 | 40 |
Class R4 | 140 | 7 |
Class R5 | 31 | 12 |
Class R6 | — | 78 |
Class 1 | 9,580 | — |
Total | $250,775 | $237,234 |
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.
Interfund lending program Pursuant to an Exemptive Order issued by the SEC, the fund, along with certain other funds advised by the Advisor or its affiliates, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, no interfund loans were outstanding. The fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or lender | Weighted average loan balance | Days outstanding | Weighted average interest rate | Interest income |
Lender | $18,529,404 | 1 | 0.70% | $360 |
Note 6 — Fund share transactions
Transactions in fund shares for the six months ended August 31, 2016 and year ended February 29, 2016 were as follows:
Six months ended 8-31-16 | Year ended 2-29-16 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class A shares | ||||||||||||||||||||||||||
Sold | 436,873 | $12,335,986 | 1,583,670 | $49,216,049 | ||||||||||||||||||||||
Distributions reinvested | — | — | 68,179 | 1,969,684 | ||||||||||||||||||||||
Repurchased | (686,781 | ) | (19,397,035 | ) | (841,522 | ) | (25,518,279 | ) | ||||||||||||||||||
Net increase (decrease) | (249,908 | ) | ($7,061,049 | ) | 810,327 | $25,667,454 | ||||||||||||||||||||
Class B shares | ||||||||||||||||||||||||||
Sold | 5,973 | $165,993 | 7,938 | $237,284 | ||||||||||||||||||||||
Distributions reinvested | — | — | 470 | 13,566 | ||||||||||||||||||||||
Repurchased | (16,794 | ) | (472,665 | ) | (20,191 | ) | (623,641 | ) | ||||||||||||||||||
Net decrease | (10,821 | ) | ($306,672 | ) | (11,783 | ) | ($372,791 | ) | ||||||||||||||||||
Class C shares | ||||||||||||||||||||||||||
Sold | 17,016 | $476,807 | 113,119 | $3,583,881 | ||||||||||||||||||||||
Distributions reinvested | — | — | 3,220 | 93,021 | ||||||||||||||||||||||
Repurchased | (60,740 | ) | (1,712,967 | ) | (114,023 | ) | (3,480,866 | ) | ||||||||||||||||||
Net increase (decrease) | (43,724 | ) | ($1,236,160 | ) | 2,316 | $196,036 | ||||||||||||||||||||
Class I shares | ||||||||||||||||||||||||||
Sold | 1,323,583 | $37,472,679 | 5,458,663 | $165,925,846 | ||||||||||||||||||||||
Distributions reinvested | — | — | 359,736 | 10,421,562 | ||||||||||||||||||||||
Repurchased | (19,489,395 | ) | (550,737,980 | ) | (2,622,108 | ) | (80,579,906 | ) | ||||||||||||||||||
Net increase (decrease) | (18,165,812 | ) | ($513,265,301 | ) | 3,196,291 | $95,767,502 | ||||||||||||||||||||
Class R1 shares | ||||||||||||||||||||||||||
Sold | 5,196 | $148,191 | 23,630 | $693,551 | ||||||||||||||||||||||
Distributions reinvested | — | — | 88 | 2,532 | ||||||||||||||||||||||
Repurchased | (1,005 | ) | (28,538 | ) | (9,849 | ) | (300,069 | ) | ||||||||||||||||||
Net increase | 4,191 | $119,653 | 13,869 | $396,014 | ||||||||||||||||||||||
Class R2 shares | ||||||||||||||||||||||||||
Sold | 1,486 | $42,713 | 7,392 | $229,576 | ||||||||||||||||||||||
Distributions reinvested | — | — | 43 | 1,243 | ||||||||||||||||||||||
Repurchased | (1,326 | ) | (36,340 | ) | (6,046 | ) | (191,707 | ) | ||||||||||||||||||
Net increase | 160 | $6,373 | 1,389 | $39,112 | ||||||||||||||||||||||
Class R3 shares | ||||||||||||||||||||||||||
Sold | 1,477 | $41,954 | 11,784 | $346,556 | ||||||||||||||||||||||
Distributions reinvested | — | — | 184 | 5,337 | ||||||||||||||||||||||
Repurchased | (1,675 | ) | (46,864 | ) | (2,086 | ) | (60,970 | ) | ||||||||||||||||||
Net increase (decrease) | (198 | ) | ($4,910 | ) | 9,882 | $290,923 | ||||||||||||||||||||
Class R4 shares | ||||||||||||||||||||||||||
Sold | 795 | $22,771 | 827 | $25,859 | ||||||||||||||||||||||
Distributions reinvested | — | — | 56 | 1,628 | ||||||||||||||||||||||
Repurchased | (33 | ) | (935 | ) | (2,577 | ) | (78,270 | ) | ||||||||||||||||||
Net increase (decrease) | 762 | $21,836 | (1,694 | ) | ($50,783 | ) |
Six months ended 8-31-16 | Year ended 2-29-16 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class R5 shares | ||||||||||||||||||||||||||
Sold | 538 | $15,297 | 1,803 | $51,022 | ||||||||||||||||||||||
Distributions reinvested | — | — | 66 | 1,926 | ||||||||||||||||||||||
Repurchased | (60 | ) | (1,732 | ) | (1,411 | ) | (44,885 | ) | ||||||||||||||||||
Net increase | 478 | $13,565 | 458 | $8,063 | ||||||||||||||||||||||
Class R6 shares | ||||||||||||||||||||||||||
Sold | 3,432 | $96,273 | 34,346 | $931,385 | ||||||||||||||||||||||
Distributions reinvested | — | — | 58 | 1,670 | ||||||||||||||||||||||
Repurchased | (12,492 | ) | (345,015 | ) | (1,919 | ) | (52,951 | ) | ||||||||||||||||||
Net increase (decrease) | (9,060 | ) | ($248,742 | ) | 32,485 | $880,104 | ||||||||||||||||||||
Class 1 shares | ||||||||||||||||||||||||||
Sold | 61,111 | $1,731,031 | 233,717 | $7,392,774 | ||||||||||||||||||||||
Distributions reinvested | — | — | 27,803 | 806,576 | ||||||||||||||||||||||
Repurchased | (92,341 | ) | (2,616,176 | ) | (171,318 | ) | (5,247,321 | ) | ||||||||||||||||||
Net increase (decrease) | (31,230 | ) | ($885,145 | ) | 90,202 | $2,952,029 | ||||||||||||||||||||
Class NAV shares | ||||||||||||||||||||||||||
Sold | 477,134 | $13,305,749 | 11,874,216 | $384,308,797 | ||||||||||||||||||||||
Distributions reinvested | — | — | 747,131 | 21,651,850 | ||||||||||||||||||||||
Repurchased | (986,991 | ) | (28,347,997 | ) | (90,064 | ) | (2,615,243 | ) | ||||||||||||||||||
Net increase (decrease) | (509,857 | ) | ($15,042,248 | ) | 12,531,283 | $403,345,404 | ||||||||||||||||||||
Total net increase (decrease) | (19,015,019 | ) | ($537,888,800 | ) | 16,675,025 | $529,119,067 |
Affiliates of the fund owned 13% and 100% of shares of beneficial interest of Class R6 and Class NAV, respectively, on August 31, 2016. Such concentration of shareholders' capital could have a material effect on the fund if such shareholders redeem from the fund.
Note 7 — Purchase and sale of securities
Purchases and sales of securities, other than short-term investments, amounted to $253,646,114 and $659,562,628, respectively, for the six months ended August 31, 2016.
Note 8 — Country or region concentration risk
The fund may invest a large percentage of its assets in a single country or region. The fund's performance could be disproportionately affected by factors particular to that country or region. These factors may include economic or political changes, acts of terrorism, natural disasters, reliance on trading partners or natural resources, detrimental budget deficits and other financial difficulties. Currency fluctuations and political and economic developments may adversely impact the value of foreign securities. The risks of investing in foreign securities are magnified in emerging markets. Emerging-market countries may experience higher rates of inflation, interest, and unemployment, and greater social, economic, and political uncertainties, than more developed countries.
Note 9 — 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 August 31, 2016, funds within the John Hancock group of funds complex held 83.5% 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 | 35.3% |
John Hancock Funds II Lifestyle Balanced Portfolio | 23.0% |
John Hancock Funds II Lifestyle Aggressive Portfolio | 13.2% |
Continuation of Investment Advisory and Subadvisory Agreements
Evaluation of Advisory and Subadvisory Agreements by the Board of Trustees
This section describes the evaluation by the Board of Trustees (the Board) of John Hancock Funds III (the Trust) of the Advisory Agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Advisor) and the Subadvisory Agreement (the Subadvisory Agreement) with Grantham, Mayo, Van Otterloo & Co. LLC (the Subadvisor), for John Hancock International Core Fund (the fund). The Advisory Agreement and Subadvisory Agreement are collectively referred to as the Agreements. Prior to the June 20-23, 2016 meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the Agreements at an in-person meeting held on May 24-25, 2016.
Approval of Advisory and Subadvisory Agreements
At in-person meetings held on June 20-23, 2016, the Board, including the Trustees who are not considered to be interested persons of the Trust under the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees), reapproved for an annual period the continuation of the Advisory Agreement between the Trust and the Advisor and the Subadvisory Agreement between the Advisor and the Subadvisor with respect to the fund.
In considering the Advisory Agreement and the Subadvisory Agreement, the Board received in advance of the meetings a variety of materials relating to the fund, the Advisor and the Subadvisor, including comparative performance, fee and expense information for a peer group of similar funds prepared by an independent third-party provider of mutual fund data, performance information for an applicable benchmark index; and, with respect to the Subadvisor, comparative performance information for comparably managed accounts, as applicable, and other information provided by the Advisor and the Subadvisor regarding the nature, extent and quality of services provided by the Advisor and the Subadvisor under their respective Agreements, as well as information regarding the Advisor's revenues and costs of providing services to the fund and any compensation paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreement are considered, particular focus is given to information concerning fund performance, comparability of fees and total expenses, and profitability. However, the Board notes that the evaluation process with respect to the Advisor and the Subadvisor is an ongoing one. In this regard, the Board also took into account discussions with management and information provided to the Board at prior meetings with respect to the services provided by the Advisor and the Subadvisor to the fund, including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisor with respect to the fund. The Board also considered the nature, quality, and extent of non-advisory services, if any, to be provided to the fund by the Advisor's affiliates, including distribution services.
Throughout the process, the Board asked questions of and requested additional information from management. The Board is assisted by counsel for the Trust and the Independent Trustees are also separately assisted by independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements and discussed the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement with respect to the fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets, and the industry) and does not treat any single factor as determinative, and each Trustee may attribute different weights to different factors. The Board's conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board's ongoing regular review of fund performance and operations throughout the year.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the fund, the Board reviewed information provided by the Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor's compliance and regulatory history, including its Form ADV. The Board also noted that on a regular basis it receives and reviews information from the Trust's Chief Compliance Officer (CCO) regarding the fund's compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board also considered the Advisor's risk management processes. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the fund, including, but not limited to, general supervision of and coordination of the services provided by the Subadvisor, and is also responsible for monitoring and reviewing the activities of the Subadvisor and other third-party service providers.
In considering the nature, extent, and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor's management and the quality of the performance of the Advisor's duties, through Board meetings, discussions and reports during the preceding year and through each Trustee's experience as a Trustee of the Trust and of the other trusts in the John Hancock group of funds complex (the John Hancock Fund Complex).
In the course of their deliberations regarding the Advisory Agreement, the Board considered, among other things:
(a) | the skills and competency with which the Advisor has in the past managed the Trust's affairs and its subadvisory relationship, the Advisor's oversight and monitoring of the Subadvisor's investment performance and compliance programs, such as the Subadvisor's compliance with fund policies and objectives, review of brokerage matters, including with respect to trade allocation and best execution and the Advisor's timeliness in responding to performance issues; | |
(b) | the background, qualifications and skills of the Advisor's personnel; | |
(c) | the Advisor's compliance policies and procedures and its responsiveness to regulatory changes and mutual fund industry developments; | |
(d) | the Advisor's administrative capabilities, including its ability to supervise the other service providers for the fund; | |
(e) | the financial condition of the Advisor and whether it has the financial wherewithal to provide a high level and quality of services to the fund; and | |
(f) | the Advisor's reputation and experience in serving as an investment advisor to the Trust and the benefit to shareholders of investing in funds that are part of a family of funds offering a variety of investments. |
The Board concluded that the Advisor may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the fund.
Investment performance. In considering the fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the fund's performance results. In connection with the consideration of the Advisory Agreement, the Board:
(a) | reviewed information prepared by management regarding the fund's performance; | |
(b) | considered the comparative performance of an applicable benchmark index; | |
(c) | considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; and | |
(d) | took into account the Advisor's analysis of the fund's performance and its plans and recommendations regarding the Trust's subadvisory arrangements generally. |
The Board noted that the fund underperformed its benchmark index for the one-, three- and five-year periods ended December 31, 2015. The Board also noted that the fund underperformed its peer group average for the one-year period
ended December 31, 2015 and outperformed its peer group average for the three- and five-year periods ended December 31, 2015. The Board took into account management's discussion of the fund's performance, including the favorable performance relative to the peer group for the three- and five-year periods. The Board took into account management's proposal to merge the fund into another fund in the complex and concluded that the fund's performance is being monitored and reasonably addressed.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of mutual fund data, including, among other data, the fund's contractual and net management fees (and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the fund. The Board considered the fund's ranking within a smaller group of peer funds chosen by the independent third-party provider, as well as the fund's ranking within a broader group of funds. In comparing the fund's contractual and net management fees to those of comparable funds, the Board noted that such fees include both advisory and administrative costs. The Board noted that net management fees and total expenses for the fund are higher than the peer group median.
The Board took into account management's discussion of the fund's expenses. The Board also took into account management's discussion with respect to the advisory/subadvisory fee structure, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee. The Board also noted that the Advisor pays the subadvisory fee, and that such fees are negotiated at arm's length with respect to the Subadvisor. In addition, the Board took into account that management had agreed to implement an overall fee waiver across the complex, including the fund, which is discussed further below. The Board also noted actions taken over the past several years to reduce the fund's operating expenses. The Board also noted that, in addition, the Advisor is currently waiving fees and/or reimbursing expenses with respect to the fund and that the fund has breakpoints in its contractual management fee schedule that reduces management fees as assets increase. The Board also noted that the fund's distributor, an affiliate of the Advisor, has agreed to waive a portion of its Rule 12b-1 fee for a share class of the fund. The Board reviewed information provided by the Advisor concerning the investment advisory fee charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the John Hancock Fund Complex) having similar investment mandates, if any. The Board considered any differences between the Advisor's and Subadvisor's services to the fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee paid with respect to the fund is reasonable.
Profitability/indirect benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor's relationship with the Trust, the Board:
(a) | reviewed financial information of the Advisor; | |||||||
(b) | reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to the fund; | |||||||
(c) | received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole; | |||||||
(d) | received information with respect to the Advisor's allocation methodologies used in preparing the profitability data; | |||||||
(e) | considered that the John Hancock insurance companies that are affiliates of the Advisor, as shareholders of the Trust directly or through their separate accounts, receive certain tax credits or deductions relating to foreign taxes paid and dividends received by certain funds of the Trust and noted that these tax benefits, which are not available to participants in qualified retirement plans under applicable income tax law, are reflected in the profitability information reviewed by the Board; | |||||||
(f) | considered that the Advisor also provides administrative services to the fund on a cost basis pursuant to an administrative services agreement; | |||||||
(g) | noted that affiliates of the Advisor provide transfer agency services and distribution services to the fund, and that the fund's distributor also receives Rule 12b-1 payments to support distribution of the fund; |
(h) | noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the fund; | |||||||
(i) | noted that the subadvisory fee for the fund is paid by the Advisor and is negotiated at arm's length; and | |||||||
(j) | considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the fund and the entrepreneurial risk that it assumes as Advisor. |
Based upon its review, the Board concluded that the level of profitability, if any, of the Advisor and its affiliates from their relationship with the fund was reasonable and not excessive.
Economies of scale. In considering the extent to which economies of scale would be realized as the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders, the Board:
(a) | considered that the Advisor has contractually agreed to waive a portion of its management fee for certain funds of the John Hancock Fund Complex, including the fund (the participating portfolios) or otherwise reimburse the expenses of the participating portfolios (the reimbursement). 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; | |
(b) | reviewed the fund's advisory fee structure and concluded that: (i) the fund's fee structure contains breakpoints at the subadvisory fee level and that such breakpoints are reflected as breakpoints in the advisory fees for the fund; and (ii) although economies of scale cannot be measured with precision, these arrangements permit shareholders of the fund to benefit from economies of scale if the fund grows. The Board also took into account management's discussion of the fund's advisory fee structure; and | |
(c) | the Board also considered the effect of the fund's growth in size on its performance and fees. The Board also noted that if the fund's assets increase over time, the fund may realize other economies of scale. |
Approval of Subadvisory Agreement
In making its determination with respect to approval of the Subadvisory Agreement, the Board reviewed:
(1) | information relating to the Subadvisor's business, including current subadvisory services to the Trust (and other funds in the John Hancock Fund Complex); | |
(2) | the historical and current performance of the fund and comparative performance information relating to an applicable benchmark index and comparable funds; | |
(3) | the subadvisory fee for the fund, including any breakpoints, and to the extent available, comparable fee information prepared by an independent third party provider of fund data; and | |
(4) | information relating to the nature and scope of any material relationships and their significance to the Trust's Advisor and Subadvisor. |
Nature, extent, and quality of services. With respect to the services provided by the Subadvisor, the Board received information provided to the Board by the Subadvisor, including the Subadvisor's Form ADV, as well as took into account information presented throughout the past year. The Board considered the Subadvisor's current level of staffing and its overall resources, as well as received information relating to the Subadvisor's compensation program. The Board reviewed the Subadvisor's history and investment experience, as well as information regarding the qualifications, background, and responsibilities of the Subadvisor's investment and compliance personnel who provide services to the fund. The Board also considered, among other things, the Subadvisor's compliance program and any disciplinary history. The Board also considered the Subadvisor's risk assessment and monitoring process. The Board reviewed the Subadvisor's regulatory history, including whether it was involved in any regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular,
periodic reviews of the Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust's CCO and his staff conduct regular, periodic compliance reviews with the Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of the Subadvisor and procedures reasonably designed to assure compliance with the federal securities laws. The Board also took into account the financial condition of the Subadvisor.
The Board considered the Subadvisor's investment process and philosophy. The Board took into account that the Subadvisor's responsibilities include the development and maintenance of an investment program for the fund that is consistent with the fund's investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services. The Board also received information with respect to the Subadvisor's brokerage policies and practices, including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the fund, the Board noted that the fees under the Subadvisory Agreement are paid by the Advisor and not the fund.
The Board also relied on the ability of the Advisor to negotiate the Subadvisory Agreement with the Subadvisor, which is not affiliated with the Advisor, and the fees thereunder at arm's length. As a result, the costs of the services to be provided and the profits to be realized by the Subadvisor from its relationship with the Trust were not a material factor in the Board's consideration of the Subadvisory Agreement.
The Board also received information regarding the nature and scope (including their significance to the Advisor and its affiliates and to the Subadvisor) of any material relationships with respect to the Subadvisor, which include arrangements in which the Subadvisor or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreement.
In addition, the Board considered other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor's relationship with the fund, such as the opportunity to provide advisory services to additional funds in the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays a subadvisory fee to the Subadvisor. As noted above, the Board also considered the fund's subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the fund as included in the report prepared by the independent third party provider of fund data, to the extent available. The Board noted that the limited size of the Lipper peer group was not sufficient for comparative purposes. The Board also took into account the subadvisory fees paid by the Advisor to the Subadvisor with respect to the fund and compared them to fees charged by the Subadvisor to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered the fund's performance as compared to the fund's peer group and the benchmark index and noted that the Board reviews information about the fund's performance results at its regularly scheduled meetings. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor. The Board was mindful of the Advisor's focus on the Subadvisor's performance. The Board also noted the Subadvisor's long-term performance record for similar accounts, as applicable.
The Board's decision to approve the Subadvisory Agreement was based on a number of determinations, including the following:
(1) | the Subadvisor has extensive experience and demonstrated skills as a manager; |
(2) | the performance of the fund is being monitored and reasonably addressed; | |||||||
(3) | the subadvisory fee is reasonable in relation to the level and quality of services being provided; and | |||||||
(4) | noted that the subadvisory fees are paid by the Advisor not the fund and that the subadvisory fee breakpoints are reflected as breakpoints in the advisory fees for the fund in order to permit shareholders to benefit from economies of scale if the fund grows. | |||||||
* * * |
Based on the Board's evaluation of all factors that the Board deemed to be material, including those factors described above, the Board, including the Independent Trustees, concluded that renewal of the Advisory Agreement and the Subadvisory Agreement would be in the best interest of the fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreement for an additional one-year period.
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 |
*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. |
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from the fund. Brokerage commissions will reduce returns.
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John Hancock Investments is a premier asset manager representing one of
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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
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![]() | 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. | ||
MF318211 | 66SA 8/16 10/16 |
John Hancock
International Growth Fund
Semiannual report 8/31/16
A message to shareholders
Dear shareholder,
The U.K.'s vote in late June to leave the European Union (EU) created a challenging backdrop for global financial markets; however, most international indexes ended the period with strong gains. The U.K.'s move creates a number of unknowns for the near term, the most important of which is whether other EU countries will follow suit. Meanwhile, the World Bank in June downgraded its 2016 global growth forecast from 2.9% to 2.4%, citing stubbornly low commodity prices and weak global trade, among other factors. Emerging markets were the best performers, as many countries benefited from stabilizing commodity prices and more promising economic growth prospects.
As this dynamic plays out, it is prudent to expect continued market volatility. 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 we have liquidity tools in place to help meet the needs of our shareholders. Whether the markets are up or down, one of your best resources is your financial advisor, who can help 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 August 31, 2016. They are subject to change at any time. All investments entail risks, including the possible loss of principal. Diversification does not guarantee a profit or eliminate the risk of a loss. 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 8/31/16 (%)
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.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative. Performance of the other share classes will vary based on the difference in the fees and expenses of those classes. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current month-end performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling 800-225-5291. For further information on the fund's objectives, risks, and strategy, see the fund's prospectus.
PERFORMANCE HIGHLIGHTS OVER THE LAST SIX MONTHS
Markets rose amid a challenging economic environment
Most developed-market stocks outside the United States posted strong gains as key central banks expanded stimulative monetary policies and economic and market conditions in China stabilized.
The fund underperformed on a relative basis
The fund posted a positive overall return, but underperformed its benchmark, the MSCI AC World ex-USA Growth Index, largely as a result of a negative impact from stock selection in the consumer discretionary and healthcare sectors.
Overweight in information technology was a positive factor
The fund's overweight in the information technology sector contributed to relative performance.
SECTOR COMPOSITION AS OF 8/31/16 (%)
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 (if at all) to which a security may be sold or a derivative position closed without negatively affecting its market value—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 prospectus for additional risks.
![johnaboselli.jpg](https://capedge.com/proxy/N-CSRS/0001145443-16-002244/johnaboselli.jpg)
John A. Boselli, CFA
Portfolio Manager
Wellington Management Company LLP
Can you describe the market environment during the six-month period ended August 31, 2016?
Most stocks in markets outside the United States posted strong gains in the double digits in percentage terms. Further expansion of stimulative monetary policies from central banks in China, Japan, and Europe provided support for equities, and concerns about the ability of China's government to manage its economy through a period of slower growth and elevated credit stress eased somewhat. Recoveries in the prices of oil and other commodities also helped to drive the rally in global stocks.
The general upward trend in global equity prices was interrupted by a spike in market volatility in late June when U.K. voters approved a referendum to leave the European Union (Brexit). Following a long period of closer European integration, this historic vote marked a profound change in how the United Kingdom will interact with the rest of Europe. While the uncertainty about the outcome of the vote is now behind us, we are entering a new period of uncertainty regarding the implementation of Brexit, which may heighten near-term volatility. In the days following the vote, global equities sold off sharply before recovering most of their losses.
While global economic growth remained slow during the period, the indicators that we monitor to recognize turning points in macroeconomic cycles gained momentum overall, as underlying data that had been mostly negative early in the period subsequently shifted in a positive direction, increasing the potential for economic activity to pick up going forward. When evaluating stocks during this transition, we gradually shifted to place more weight on growth and valuation characteristics while placing somewhat less emphasis on the quality and total capital return characteristics that had predominated earlier in the period. This shift resulted in some material changes in sector weights during the period, including a reduction in the fund's healthcare weighting and an increase in its financials weighting.
Although its overall return was positive, the fund underperformed relative to its benchmark, the MSCI AC World ex-USA Growth Index. What key factors had the most significant impact on this result?
Overall, our security selection detracted from relative performance. While sector allocations are typically by-products of our bottom-up approach to managing the fund, there were significant sector-level performance differences relative to the benchmark. Our weakest selection was in the consumer discretionary and healthcare sectors; an underweight in the materials sector also had a negative impact, as the sector outperformed. Healthcare underperformed, and the fund's overweight was a negative factor. On the positive side, an overweight in information technology was a contributor, as the sector outperformed.
Which equity positions had the biggest negative impact on the fund's performance?
The fund's position in U.K.-based home builder Persimmon PLC was the top detractor as the stock declined in line with U.K. home builders following the Brexit vote. Investors worried that a potential economic slowdown would weigh on the housing market and home prices. We sold the fund's position in Persimmon during the period, as our forecasts for the company's growth rate and free cash flow margins declined and we expected negative earnings revisions. A position in Japan-based Ono Pharmaceutical Company, Ltd. also had a negative impact, as the stock came under pressure after Japanese regulators announced plans to review pricing for groundbreaking, high-priced drugs in great demand, starting with OPDIVO, a drug that Ono Pharmaceutical codeveloped and that was
TOP 10 HOLDINGS AS OF 8/31/16 (%)
Tencent Holdings, Ltd. | 3.2 |
Taiwan Semiconductor Manufacturing Company, Ltd. | 3.2 |
British American Tobacco PLC | 2.8 |
Alibaba Group Holding, Ltd., ADR | 2.5 |
Novo Nordisk A/S, B Shares | 2.1 |
Anheuser-Busch InBev SA | 2.1 |
AIA Group, Ltd. | 2.1 |
Unilever NV | 2.1 |
Samsung Electronics Company, Ltd. | 2.0 |
Compass Group PLC | 1.9 |
TOTAL | 24.0 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
Which positions had the biggest positive impact on the fund's relative results?
The top contributor was the fund's position in AAC Technologies Holdings, Inc., a China-based company engaged in designing and manufacturing miniature acoustic components found in mobile handsets, tablets, and other electronics. A position in Taiwan-based Largan Precision Company, Ltd., a maker of lenses used in smartphone cameras and other applications, also contributed. The company's shares outperformed as Largan posted strong results, supporting investor confidence in positive trends surrounding the growing use of dual cameras in smartphones, starting with Apple's
TOP 10 COUNTRIES AS OF 8/31/16 (%)
United Kingdom | 21.4 |
China | 9.7 |
Japan | 9.2 |
Brazil | 5.9 |
Denmark | 5.3 |
Taiwan | 4.8 |
Ireland | 4.5 |
South Korea | 4.4 |
India | 3.8 |
Switzerland | 3.4 |
TOTAL | 72.4 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
latest iPhone. We view Largan as the leader in this technology and believe the company is poised to benefit from this status.
Another contributor was China-based Tencent Holdings, Ltd. Shares of the Internet services company outperformed as earnings results exceeded expectations, led by the company's mobile gaming segment, which continued to grow. We continued to view Tencent positively at the end of the period as a result of its strong organic revenue growth driven by its competitive positioning in social media advertising, its portfolio of entertainment assets, and its growing importance as a gateway for mobile traffic. It was the largest holding in the portfolio at period end.
How was the fund positioned at the end of the period?
The fund remained underweight in developed Asian markets, including Japan, although we did add positions in three Japanese stocks, Recruit Holdings Company, Ltd., Daito Trust Construction Company, Ltd., and Keyence Corp., that rank highly in our search for organic revenue growth. Recruit is the leading provider of classified advertising in Japan, benefiting from the growth trend in online advertising while trading at a discount to the market, in our view. We view Keyence as a high-quality company and the dominant provider of industrial vision sensors, with growth supported by the trend toward automation.
We maintained the fund's overweight in the information technology sector and transitioned from an underweight to an overweight in financials during the period, as we added positions in insurance companies AIA Group, Ltd. (Hong Kong) and Saga PLC (U.K.) as well as emerging-markets banks Itau Unibanco Holding SA (Brazil) and Bank Central Asia Tbk PT (Indonesia).
The fund ended the period with a roughly equal weight position in healthcare after we sold positions that included AstraZeneca PLC (U.K.) and Roche Holding AG (Switzerland). The fund was underweight in several sectors, most notably in energy, industrials, consumer discretionary, and materials.
MANAGED BY
![]() | John A. Boselli, CFA On the fund since 2014 Investing since 1996 |
TOTAL RETURNS FOR THE PERIOD ENDED AUGUST 31, 2016
Average annual total returns (%) with maximum sales charge | Cumulative total returns (%) with maximum sales charge | ||||||
1-year | 5-year | 10-year | 6-month | 5-year | 10-year | ||
Class A | -0.54 | 7.55 | 3.92 | 4.68 | 43.92 | 46.87 | |
Class B | -1.06 | 7.56 | 3.68 | 4.85 | 43.95 | 43.47 | |
Class C | 2.95 | 7.87 | 3.67 | 8.82 | 46.03 | 43.33 | |
Class I1 | 5.01 | 9.02 | 4.86 | 10.38 | 54.00 | 60.80 | |
Class R21,2 | 4.57 | 8.62 | 4.43 | 10.19 | 51.21 | 54.28 | |
Class R41,2 | 4.82 | 8.69 | 4.47 | 10.28 | 51.71 | 54.79 | |
Class R61,2 | 5.10 | 8.80 | 4.52 | 10.43 | 52.48 | 55.58 | |
Class 11 | 5.07 | 9.12 | 4.91 | 10.44 | 54.71 | 61.57 | |
Class NAV1,2 | 5.13 | 8.77 | 4.50 | 10.44 | 52.26 | 55.35 | |
Index 1† | 6.04 | 4.67 | 3.28 | 13.17 | 25.64 | 38.03 | |
Index 2† | 4.00 | 6.33 | 3.30 | 10.22 | 35.89 | 38.37 | |
Index 3† | 0.38 | 5.48 | 2.19 | 10.76 | 30.58 | 24.13 |
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 (%) | 1.37 | 2.07 | 2.07 | 1.05 | 1.46 | 1.31 | 0.96 | 0.99 | 0.94 |
Net (%) | 1.35 | 2.05 | 2.05 | 1.05 | 1.45 | 1.20 | 0.94 | 0.99 | 0.94 |
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 B3 | 8-31-06 | 14,347 | 14,347 | 13,803 | 13,837 | 12,413 |
Class C3 | 8-31-06 | 14,333 | 14,333 | 13,803 | 13,837 | 12,413 |
Class I1 | 8-31-06 | 16,080 | 16,080 | 13,803 | 13,837 | 12,413 |
Class R21,2 | 8-31-06 | 15,428 | 15,428 | 13,803 | 13,837 | 12,413 |
Class R41,2 | 8-31-06 | 15,479 | 15,479 | 13,803 | 13,837 | 12,413 |
Class R61,2 | 8-31-06 | 15,558 | 15,558 | 13,803 | 13,837 | 12,413 |
Class 11 | 8-31-06 | 16,157 | 16,157 | 13,803 | 13,837 | 12,413 |
Class NAV1,2 | 8-31-06 | 15,535 | 15,535 | 13,803 | 13,837 | 12,413 |
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 | For certain types of investors, as described in the fund's prospectuses. |
2 | 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. |
3 | 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 March 1, 2016, with the same investment held until August 31, 2016.
Beginning Account value on 3-1-2016 | Ending value on 8-31-2016 | Expenses paid during period ended 8-31-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $1,102.00 | $6.99 | 1.32% |
Class B | 1,000.00 | 1,098.50 | 10.68 | 2.02% |
Class C | 1,000.00 | 1,098.20 | 10.68 | 2.02% |
Class I | 1,000.00 | 1,103.80 | 5.36 | 1.01% |
Class R2 | 1,000.00 | 1,101.90 | 7.42 | 1.40% |
Class R4 | 1,000.00 | 1,102.80 | 6.04 | 1.14% |
Class R6 | 1,000.00 | 1,104.30 | 4.77 | 0.90% |
Class 1 | 1,000.00 | 1,104.40 | 4.99 | 0.94% |
Class NAV | 1,000.00 | 1,104.40 | 4.72 | 0.89% |
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 August 31, 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 March 1, 2016, with the same investment held until August 31, 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 3-1-2016 | Ending value on 8-31-2016 | Expenses paid during period ended 8-31-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $1,018.60 | $6.72 | 1.32% |
Class B | 1,000.00 | 1,015.00 | 10.26 | 2.02% |
Class C | 1,000.00 | 1,015.00 | 10.26 | 2.02% |
Class I | 1,000.00 | 1,020.10 | 5.14 | 1.01% |
Class R2 | 1,000.00 | 1,018.10 | 7.12 | 1.40% |
Class R4 | 1,000.00 | 1,019.50 | 5.80 | 1.14% |
Class R6 | 1,000.00 | 1,020.70 | 4.58 | 0.90% |
Class 1 | 1,000.00 | 1,020.50 | 4.79 | 0.94% |
Class NAV | 1,000.00 | 1,020.70 | 4.53 | 0.89% |
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 184/365 (to reflect the one-half year period). |
Fund's investments
As of 8-31-16 (unaudited) | |||||||||||
Shares | Value | ||||||||||
Common stocks 96.0% | $2,640,854,056 | ||||||||||
(Cost $2,415,876,010) | |||||||||||
Australia 1.9% | 52,439,826 | ||||||||||
Amcor, Ltd. | 4,366,958 | 52,439,826 | |||||||||
Belgium 3.2% | 89,212,973 | ||||||||||
Anheuser-Busch InBev SA | 471,461 | 58,494,927 | |||||||||
UCB SA | 373,705 | 30,718,046 | |||||||||
Brazil 4.6% | 125,792,501 | ||||||||||
Ambev SA | 5,718,800 | 33,984,817 | |||||||||
BM&FBovespa SA | 6,326,200 | 35,086,784 | |||||||||
CCR SA | 4,799,500 | 25,355,961 | |||||||||
Hypermarcas SA | 3,880,600 | 31,364,939 | |||||||||
Canada 1.1% | 29,879,787 | ||||||||||
The Bank of Nova Scotia | 561,300 | 29,879,787 | |||||||||
China 9.7% | 267,116,673 | ||||||||||
AAC Technologies Holdings, Inc. | 4,053,500 | 46,166,492 | |||||||||
Alibaba Group Holding, Ltd., ADR (I) | 719,210 | 69,900,020 | |||||||||
New Oriental Education & Technology Group, Inc., ADR | 919,051 | 36,284,133 | |||||||||
TAL Education Group, ADR (I) | 435,213 | 26,008,329 | |||||||||
Tencent Holdings, Ltd. | 3,424,970 | 88,757,699 | |||||||||
Denmark 5.3% | 145,463,894 | ||||||||||
DSV A/S | 912,035 | 45,240,433 | |||||||||
Novo Nordisk A/S, B Shares | 1,262,531 | 59,087,435 | |||||||||
Pandora A/S | 330,357 | 41,136,026 | |||||||||
France 1.2% | 33,247,892 | ||||||||||
Edenred | 1,522,802 | 33,247,892 | |||||||||
Germany 2.9% | 78,327,263 | ||||||||||
GEA Group AG | 279,700 | 14,985,506 | |||||||||
ProSiebenSat.1 Media SE | 836,233 | 36,080,346 | |||||||||
United Internet AG | 663,639 | 27,261,411 | |||||||||
Hong Kong 3.2% | 88,881,516 | ||||||||||
AIA Group, Ltd. | 9,246,050 | 58,233,204 | |||||||||
Guangdong Investment, Ltd. | 19,847,897 | 30,648,312 | |||||||||
India 3.8% | 104,856,050 | ||||||||||
Bharti Infratel, Ltd. | 5,823,819 | 30,453,807 | |||||||||
HDFC Bank, Ltd. | 1,319,560 | 30,455,426 | |||||||||
HDFC Bank, Ltd., ADR | 200,495 | 14,365,467 |
Shares | Value | ||||||||||
India (continued) | |||||||||||
Maruti Suzuki India, Ltd. | 391,965 | $29,581,350 | |||||||||
Indonesia 2.8% | 75,863,619 | ||||||||||
Bank Central Asia Tbk PT | 35,208,165 | 39,901,555 | |||||||||
Telekomunikasi Indonesia Persero Tbk PT | 113,802,470 | 35,962,064 | |||||||||
Ireland 4.5% | 124,832,354 | ||||||||||
Experian PLC | 2,299,346 | 45,724,519 | |||||||||
ICON PLC (I) | 503,788 | 38,685,881 | |||||||||
Medtronic PLC | 464,460 | 40,421,954 | |||||||||
Japan 9.2% | 252,095,977 | ||||||||||
Daito Trust Construction Company, Ltd. | 228,000 | 33,585,502 | |||||||||
Fuji Heavy Industries, Ltd. | 916,200 | 36,466,784 | |||||||||
Japan Tobacco, Inc. | 1,141,106 | 44,216,710 | |||||||||
Keyence Corp. | 55,100 | 38,666,490 | |||||||||
NTT DOCOMO, Inc. | 1,661,000 | 41,889,249 | |||||||||
Ono Pharmaceutical Company, Ltd. | 1,055,100 | 27,501,237 | |||||||||
Recruit Holdings Company, Ltd. | 781,900 | 29,770,005 | |||||||||
Jordan 1.0% | 28,245,642 | ||||||||||
Hikma Pharmaceuticals PLC | 1,004,713 | 28,245,642 | |||||||||
Netherlands 2.8% | 77,411,256 | ||||||||||
ASML Holding NV | 424,525 | 45,318,043 | |||||||||
Heineken NV | 358,338 | 32,093,213 | |||||||||
Singapore 1.6% | 43,294,879 | ||||||||||
Broadcom, Ltd. | 245,408 | 43,294,879 | |||||||||
South Korea 4.4% | 121,507,901 | ||||||||||
LG Household & Health Care, Ltd. | 32,253 | 27,481,491 | |||||||||
NAVER Corp. | 52,899 | 40,028,357 | |||||||||
Samsung Electronics Company, Ltd. | 37,228 | 53,998,053 | |||||||||
Switzerland 3.4% | 93,488,206 | ||||||||||
Actelion, Ltd. (I) | 244,600 | 40,767,792 | |||||||||
Partners Group Holding AG | 114,913 | 52,720,414 | |||||||||
Taiwan 4.8% | 131,501,735 | ||||||||||
Largan Precision Company, Ltd. | 387,400 | 43,319,600 | |||||||||
Taiwan Semiconductor Manufacturing Company, Ltd. | 15,879,000 | 88,182,135 | |||||||||
United Kingdom 21.4% | 589,439,238 | ||||||||||
Admiral Group PLC (I) | 1,276,226 | 34,386,343 | |||||||||
Aon PLC | 371,136 | 41,325,994 | |||||||||
BAE Systems PLC | 4,141,926 | 29,268,849 | |||||||||
Booker Group PLC | 15,369,471 | 35,564,248 | |||||||||
British American Tobacco PLC | 1,229,510 | 76,281,793 |
Shares | Value | ||||||||||
United Kingdom (continued) | |||||||||||
Compass Group PLC | 2,801,854 | $53,031,872 | |||||||||
Diageo PLC | 1,780,863 | 49,356,373 | |||||||||
IHS Markit, Ltd. (I) | 898,821 | 33,544,000 | |||||||||
Just Eat PLC (I) | 3,761,598 | 26,732,587 | |||||||||
Reckitt Benckiser Group PLC | 528,883 | 51,089,260 | |||||||||
Saga PLC | 11,782,086 | 34,091,332 | |||||||||
Smith & Nephew PLC | 1,993,020 | 32,203,199 | |||||||||
Unilever NV | 1,237,020 | 56,916,630 | |||||||||
Worldpay Group PLC (I)(S) | 9,084,408 | 35,646,758 | |||||||||
United States 3.2% | 87,954,874 | ||||||||||
Allergan PLC (I) | 134,907 | 31,641,088 | |||||||||
Amdocs, Ltd. | 498,762 | 29,985,571 | |||||||||
Eaton Corp. PLC | 395,675 | 26,328,215 | |||||||||
Preferred securities 1.3% | $36,845,833 | ||||||||||
(Cost $31,508,709) | |||||||||||
Brazil 1.3% | 36,845,833 | ||||||||||
Itau Unibanco Holding SA | 3,318,900 | 36,845,833 | |||||||||
Total investments (Cost $2,447,384,719)† 97.3% | $2,677,699,889 | ||||||||||
Other assets and liabilities, net 2.7% | $73,413,123 | ||||||||||
Total net assets 100.0% | $2,751,113,012 |
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. | ||||||||||
(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. | ||||||||||
† | At 8-31-16, the aggregate cost of investment securities for federal income tax purposes was $2,450,449,072. Net unrealized appreciation aggregated to $227,250,817, of which $281,944,328 related to appreciated investment securities and $54,693,511 related to depreciated investment securities. |
Financial statements
STATEMENT OF ASSETS AND LIABILITIES 8-31-16 (unaudited)
Assets | |||||||||||||||||||||||||||||||||
Investments, at value (Cost $2,447,384,719) | $2,677,699,889 | ||||||||||||||||||||||||||||||||
Cash | 47,248,675 | ||||||||||||||||||||||||||||||||
Foreign currency, at value (Cost $255,085) | 255,075 | ||||||||||||||||||||||||||||||||
Receivable for investments sold | 3,178,646 | ||||||||||||||||||||||||||||||||
Receivable for fund shares sold | 23,660,960 | ||||||||||||||||||||||||||||||||
Dividends and interest receivable | 6,414,087 | ||||||||||||||||||||||||||||||||
Receivable for securities lending income | 9,938 | ||||||||||||||||||||||||||||||||
Receivable due from advisor | 19 | ||||||||||||||||||||||||||||||||
Other receivables and prepaid expenses | 203,688 | ||||||||||||||||||||||||||||||||
Total assets | 2,758,670,977 | ||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Payable for investments purchased | 3,218,949 | ||||||||||||||||||||||||||||||||
Payable for fund shares repurchased | 3,677,369 | ||||||||||||||||||||||||||||||||
Payable to affiliates | |||||||||||||||||||||||||||||||||
Accounting and legal services fees | 35,093 | ||||||||||||||||||||||||||||||||
Transfer agent fees | 254,513 | ||||||||||||||||||||||||||||||||
Distribution and service fees | 1,743 | ||||||||||||||||||||||||||||||||
Other liabilities and accrued expenses | 370,298 | ||||||||||||||||||||||||||||||||
Total liabilities | 7,557,965 | ||||||||||||||||||||||||||||||||
Net assets | $2,751,113,012 | ||||||||||||||||||||||||||||||||
Net assets consist of | |||||||||||||||||||||||||||||||||
Paid-in capital | $2,682,750,064 | ||||||||||||||||||||||||||||||||
Undistributed net investment income | 24,479,465 | ||||||||||||||||||||||||||||||||
Accumulated net realized gain (loss) on investments and foreign currency transactions | (186,418,499 | ) | |||||||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | 230,301,982 | ||||||||||||||||||||||||||||||||
Net assets | $2,751,113,012 | ||||||||||||||||||||||||||||||||
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 ($740,470,130 ÷ 33,753,001 shares)1 | $21.94 | ||||||||||||||||||||||||||||||||
Class B ($1,774,662 ÷ 82,009 shares)1 | $21.64 | ||||||||||||||||||||||||||||||||
Class C ($150,027,734 ÷ 6,948,282 shares)1 | $21.59 | ||||||||||||||||||||||||||||||||
Class I ($1,673,628,775 ÷ 76,045,999 shares) | $22.01 | ||||||||||||||||||||||||||||||||
Class R2 ($2,562,954 ÷ 116,785 shares) | $21.95 | ||||||||||||||||||||||||||||||||
Class R4 ($2,887,576 ÷ 131,288 shares) | $21.99 | ||||||||||||||||||||||||||||||||
Class R6 ($38,913,331 ÷ 1,766,516 shares) | $22.03 | ||||||||||||||||||||||||||||||||
Class 1 ($46,030,804 ÷ 2,091,734 shares) | $22.01 | ||||||||||||||||||||||||||||||||
Class NAV ($94,817,046 ÷ 4,308,094 shares) | $22.01 | ||||||||||||||||||||||||||||||||
Maximum offering price per share | |||||||||||||||||||||||||||||||||
Class A (net assets value per share ÷ 95%)2 | $23.09 |
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 six months ended 8-31-16 (unaudited)
Investment income | ||||||||||||||||||||||||
Dividends | $40,484,220 | |||||||||||||||||||||||
Securities lending | 209,295 | |||||||||||||||||||||||
Interest | 4,208 | |||||||||||||||||||||||
Less foreign taxes withheld | (3,263,117 | ) | ||||||||||||||||||||||
Total investment income | 37,434,606 | |||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Investment management fees | 10,291,572 | |||||||||||||||||||||||
Distribution and service fees | 1,790,061 | |||||||||||||||||||||||
Accounting and legal services fees | 183,400 | |||||||||||||||||||||||
Transfer agent fees | 1,376,383 | |||||||||||||||||||||||
Trustees' fees | 17,713 | |||||||||||||||||||||||
State registration fees | 116,137 | |||||||||||||||||||||||
Printing and postage | 66,080 | |||||||||||||||||||||||
Professional fees | 75,717 | |||||||||||||||||||||||
Custodian fees | 401,026 | |||||||||||||||||||||||
Registration and filing fees | 19,677 | |||||||||||||||||||||||
Other | 15,715 | |||||||||||||||||||||||
Total expenses | 14,353,481 | |||||||||||||||||||||||
Less expense reductions | (96,665 | ) | ||||||||||||||||||||||
Net expenses | 14,256,816 | |||||||||||||||||||||||
Net investment income | 23,177,790 | |||||||||||||||||||||||
Realized and unrealized gain (loss) | ||||||||||||||||||||||||
Net realized gain (loss) on | ||||||||||||||||||||||||
Unaffiliated investments and foreign currency transactions | (94,998,806 | ) | ||||||||||||||||||||||
Affiliated investments | 5,211 | |||||||||||||||||||||||
(94,993,595 | ) | |||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of | ||||||||||||||||||||||||
Unaffiliated investments and translation of assets and liabilities in foreign currencies | 295,092,779 | |||||||||||||||||||||||
Affiliated investments | (1,207 | ) | ||||||||||||||||||||||
295,091,572 | ||||||||||||||||||||||||
Net realized and unrealized gain | 200,097,977 | |||||||||||||||||||||||
Increase in net assets from operations | $223,275,767 |
STATEMENTS OF CHANGES IN NET ASSETS
Six months ended 8-31-16 | Year ended 2-29-16 | |||||||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||
Increase (decrease) in net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
From operations | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | $23,177,790 | $7,154,431 | ||||||||||||||||||||||||||||||||||||||||||||||
Net realized loss | (94,993,595 | ) | (90,878,974 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) | 295,091,572 | (85,973,533 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Increase (decrease) in net assets resulting from operations | 223,275,767 | (169,698,076 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to shareholders | ||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||||||||||||||||||||||||||
Class A | — | (818,693 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class I | — | (4,166,349 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class R4 | — | (3,401 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class R6 | — | (8,167 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class 1 | — | (188,512 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class NAV | — | (514,934 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Total distributions | — | (5,700,056 | ) | |||||||||||||||||||||||||||||||||||||||||||||
From fund share transactions | 497,430,027 | 1,878,340,204 | ||||||||||||||||||||||||||||||||||||||||||||||
Total increase | 720,705,794 | 1,702,942,072 | ||||||||||||||||||||||||||||||||||||||||||||||
Net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning of period | 2,030,407,218 | 327,465,146 | ||||||||||||||||||||||||||||||||||||||||||||||
End of period | $2,751,113,012 | $2,030,407,218 | ||||||||||||||||||||||||||||||||||||||||||||||
Undistributed net investment income | $24,479,465 | $1,301,675 |
Financial highlights
Class A Shares Period ended | 8-31-16 | 1 | 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 | $19.90 | $21.64 | $24.60 | $21.28 | $19.98 | $20.99 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.18 | 0.10 | 0.24 | 0.25 | 0.23 | 0.30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.86 | (1.81 | ) | 0.83 | 3.94 | 2.65 | (1.12 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.04 | (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 | $21.94 | $19.90 | $21.64 | $24.60 | $21.28 | $19.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3,4 | 10.20 | 5 | (7.86 | ) | 5.91 | 19.95 | 14.82 | (3.80 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $740 | $615 | $140 | $130 | $73 | $49 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.33 | 6 | 1.38 | 1.53 | 1.56 | 1.68 | 1.66 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.32 | 6 | 1.37 | 1.52 | 1.55 | 1.60 | 1.59 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.72 | 6 | 0.48 | 1.02 | 1.09 | 1.13 | 1.50 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 44 | 82 | 204 | 42 | 61 | 55 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Annualized. |
Class B Shares Period ended | 8-31-16 | 1 | 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 | $19.70 | $21.55 | $24.50 | $21.22 | $19.94 | $20.93 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.12 | 0.02 | — | 3 | 0.10 | 0.10 | 0.12 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.82 | (1.87 | ) | 0.88 | 3.90 | 2.62 | (1.06 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 1.94 | (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 | $21.64 | $19.70 | $21.55 | $24.50 | $21.22 | $19.94 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4,5 | 9.85 | 6 | (8.58 | ) | 5.07 | 19.07 | 14.00 | (4.47 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $2 | $2 | $2 | $2 | $1 | $1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.03 | 7 | 2.32 | 3.18 | 3.29 | 3.92 | 4.00 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 2.02 | 7 | 2.12 | 2.34 | 2.30 | 2.30 | 2.33 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.10 | 7 | 0.07 | — | 8 | 0.46 | 0.47 | 0.63 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 44 | 82 | 204 | 42 | 61 | 55 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Less than $0.005 per share. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | Less than 0.005%. |
Class C Shares Period ended | 8-31-16 | 1 | 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 | $19.66 | $21.49 | $24.45 | $21.18 | $19.91 | $20.91 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss)2 | 0.11 | (0.07 | ) | (0.03 | ) | 0.07 | 0.10 | 0.10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.82 | (1.76 | ) | 0.92 | 3.92 | 2.61 | (1.05 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 1.93 | (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 | $21.59 | $19.66 | $21.49 | $24.45 | $21.18 | $19.91 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3,4 | 9.82 | 5 | (8.52 | ) | 5.11 | 19.05 | 13.97 | (4.52 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $150 | $113 | $13 | $7 | $2 | $2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.03 | 6 | 2.08 | 2.40 | 2.62 | 3.32 | 3.34 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 2.02 | 6 | 2.07 | 2.30 | 2.30 | 2.30 | 2.33 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income (loss) | 1.00 | 6 | (0.33 | ) | (0.11 | ) | 0.32 | 0.48 | 0.52 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 44 | 82 | 204 | 42 | 61 | 55 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Annualized. |
Class I Shares Period ended | 8-31-16 | 1 | 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 | $19.94 | $21.67 | $24.62 | $21.31 | $20.01 | $21.04 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.22 | 0.16 | 0.35 | 0.31 | 0.43 | 0.37 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.85 | (1.80 | ) | 0.81 | 3.95 | 2.53 | (1.12 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.07 | (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 | $22.01 | $19.94 | $21.67 | $24.62 | $21.31 | $20.01 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3 | 10.38 | 4 | (7.59 | ) | 6.33 | 20.31 | 15.23 | (3.42 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1,674 | $1,168 | $152 | $290 | $79 | $162 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.02 | 5 | 1.06 | 1.19 | 1.21 | 1.27 | 1.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.01 | 5 | 1.06 | 1.18 | 1.21 | 1.25 | 1.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.00 | 5 | 0.73 | 1.46 | 1.33 | 2.09 | 1.88 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 44 | 82 | 204 | 42 | 61 | 55 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Annualized. |
Class R2 Shares Period ended | 8-31-16 | 1 | 2-29-16 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $19.92 | $21.46 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income3 | 0.17 | 0.02 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.86 | (1.56 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.03 | (1.54 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $21.95 | $19.92 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 10.19 | 5 | (7.18 | ) 5 | ||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $3 | $1 | ||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.41 | 6 | 1.90 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.40 | 6 | 1.52 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.58 | 6 | 0.11 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 44 | 82 | 7 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | The inception date for Class R2 shares is 3-27-15. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | The portfolio turnover is shown for the period from 3-1-15 to 2-29-16. |
Class R4 Shares Period ended | 8-31-16 | 1 | 2-29-16 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $19.94 | $21.46 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income3 | 0.21 | 0.05 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.84 | (1.54 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.05 | (1.49 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | — | (0.03 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $21.99 | $19.94 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 10.28 | 5 | (6.95 | ) 5 | ||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $3 | $3 | ||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.24 | 6 | 1.66 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.14 | 6 | 1.24 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.93 | 6 | 0.24 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 44 | 82 | 7 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | The inception date for Class R4 shares is 3-27-15. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | The portfolio turnover is shown for the period from 3-1-15 to 2-29-16. |
Class R6 Shares Period ended | 8-31-16 | 1 | 2-29-16 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $19.95 | $21.46 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income3 | 0.20 | 0.12 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.88 | (1.53 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.08 | (1.41 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | — | (0.10 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $22.03 | $19.95 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 10.43 | 5 | (6.59 | ) 5 | ||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $39 | $2 | ||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 0.93 | 6 | 1.37 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.90 | 6 | 0.95 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 1.89 | 6 | 0.60 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 44 | 82 | 7 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | The inception date for Class R6 shares is 3-27-15. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | The portfolio turnover is shown for the period from 3-1-15 to 2-29-16. |
Class 1 Shares Period ended | 8-31-16 | 1 | 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 | $19.93 | $21.65 | $24.61 | $21.30 | $20.00 | $21.02 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.22 | 0.23 | 0.28 | 0.37 | 0.34 | 0.36 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.86 | (1.84 | ) | 0.90 | 3.92 | 2.63 | (1.09 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.08 | (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 | $22.01 | $19.93 | $21.65 | $24.61 | $21.30 | $20.00 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)3 | 10.44 | 4 | (7.49 | ) | 6.39 | 20.43 | 15.29 | (3.33 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $46 | $39 | $20 | $16 | $11 | $9 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 0.95 | 5 | 1.00 | 1.10 | 1.12 | 1.19 | 1.16 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.94 | 5 | 0.99 | 1.09 | 1.12 | 1.15 | 1.14 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.09 | 5 | 1.06 | 1.18 | 1.59 | 1.68 | 1.83 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 44 | 82 | 204 | 42 | 61 | 55 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Annualized. |
Class NAV Shares Period ended | 8-31-16 | 1 | 2-29-16 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $19.93 | $22.66 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income3 | 0.23 | 0.11 | ||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 1.85 | (2.72 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.08 | (2.61 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | — | (0.12 | ) | |||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $22.01 | $19.93 | ||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 10.44 | 5 | (11.57 | ) 5 | ||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $95 | $86 | ||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 0.90 | 6 | 0.94 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.89 | 6 | 0.93 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.17 | 6 | 0.69 | 6 | ||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 44 | 82 | 7 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | The inception date for Class NAV shares is 6-2-15. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | 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 net asset value (NAV) may be determined as of the regularly scheduled close of the NYSE pursuant to the fund's Valuation Policies and Procedures. 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 (SEC) 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 are valued at their respective NAVs 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.
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 August 31, 2016, by major security category or type:
Total value at 8-31-16 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | ||
Common stocks | |||||
Australia | $52,439,826 | — | $52,439,826 | — | |
Belgium | 89,212,973 | — | 89,212,973 | — | |
Brazil | 125,792,501 | $125,792,501 | — | — | |
Canada | 29,879,787 | 29,879,787 | — | — | |
China | 267,116,673 | 132,192,482 | 134,924,191 | — | |
Denmark | 145,463,894 | — | 145,463,894 | — | |
France | 33,247,892 | — | 33,247,892 | — | |
Germany | 78,327,263 | — | 78,327,263 | — | |
Hong Kong | 88,881,516 | — | 88,881,516 | — | |
India | 104,856,050 | 14,365,467 | 90,490,583 | — | |
Indonesia | 75,863,619 | — | 75,863,619 | — | |
Ireland | 124,832,354 | 79,107,835 | 45,724,519 | — | |
Japan | 252,095,977 | — | 252,095,977 | — | |
Jordan | 28,245,642 | — | 28,245,642 | — | |
Netherlands | 77,411,256 | — | 77,411,256 | — | |
Singapore | 43,294,879 | 43,294,879 | — | — | |
South Korea | 121,507,901 | — | 121,507,901 | — | |
Switzerland | 93,488,206 | — | 93,488,206 | — | |
Taiwan | 131,501,735 | — | 131,501,735 | — | |
United Kingdom | 589,439,238 | 74,869,994 | 514,569,244 | — | |
United States | 87,954,874 | 87,954,874 | — | — | |
Preferred securities | 36,845,833 | 36,845,833 | — | — | |
Total investments in securities | $2,677,699,889 | $624,303,652 | $2,053,396,237 | — |
Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily NAV calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. 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 John Hancock Collateral Trust (JHCT), an affiliate of the fund which has a floating NAV and is registered with the SEC 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.
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.
Effective June 30, 2016, 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 it to participate in a $1 billion unsecured committed line of credit. Excluding commitments designated for certain funds, the fund can borrow up to an aggregate commitment amount of $750 million, subject to asset coverage and other limitations as specified in the agreement. A commitment fee payable at the end of each calendar quarter, based on the average daily unused portion of the line of credit, is charged to each participating fund based on a combination of fixed and asset based allocations and is reflected in Other expenses on the Statement of
operations. Prior to June 30, 2016, the fund had a similar agreement that enabled them to participate in a $750 million unsecured committed line of credit. For the six months ended August 31, 2016, the fund had no borrowings under either line of credit. Commitment fees for the six months ended August 31, 2016 were $3,043.
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.
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, as of February 29, 2016, the fund has a short-term capital loss carryforward 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.
Distributions paid by the fund with respect to each class of shares are calculated in the same manner, at the same time and in the same amount, except for the effect of class level expenses that may be applied differently to each class.
Such distributions, on a tax basis, are determined in conformity with income tax regulations, which may differ from US GAAP.
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 aggregate average daily net assets (together with the assets of any other applicable fund identified in the advisory
agreement); (b) 0.850% of the next $500 million of the fund's aggregate average daily net assets, and (c) 0.800% of the fund's aggregate 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 six months ended August 31, 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 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%, and1.20% of average net assets for Class A, Class B, Class C, Class I, Class R2, and Class R4, respectively. The current expense limitation agreement will remain in effect through 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 June 30, 2016, Class 1 shares had fee waivers and/or reimbursements such that the expenses would not exceed 1.15% of average net assets.
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 six months ended August 31, 2016:
Class | Expense reductions | Class | Expense reductions | |
Class A | $26,587 | Class R4 | $106 | |
Class B | 72 | Class R6 | 3,815 | |
Class C | 5,164 | Class 1 | 1,634 | |
Class I | 54,321 | Class NAV | 3,469 | |
Class R2 | 72 | Total | $95,240 |
Expenses waived or reimbursed in the current fiscal period are not subject to recapture in future fiscal periods.
The investment management fees, including the impact of the waivers and reimbursements as described above, incurred for the six months ended August 31, 2016, were equivalent to a net annual effective rate of 0.82% 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 six months ended August 31, 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 $1,425 for Class R4 shares for the six months ended August 31, 2016.
Sales charges. Class A shares are assessed up-front sales charges, which resulted in payments to the Distributor amounting to $609,905 for the six months ended August 31, 2016. Of this amount, $102,606 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $505,639 was paid as sales commissions to broker-dealers and $1,660 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 six months ended August 31, 2016, CDSCs received by the Distributor amounted to $8,237, $1,813 and $28,753 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 six months ended August 31, 2016 were:
Class | Distribution and service fees | Transfer agent fees | ||||||
Class A | $1,068,812 | $453,244 | ||||||
Class B | 9,705 | 1,240 | ||||||
Class C | 691,253 | 87,869 | ||||||
Class I | — | 830,982 | ||||||
Class R2 | 4,694 | 166 | ||||||
Class R4 | 4,646 | 250 | ||||||
Class R6 | — | 2,632 |
Class | Distribution and service fees | Transfer agent fees | ||||||
Class 1 | 10,951 | — | ||||||
Class NAV | — | — | ||||||
Total | $1,790,061 | $1,376,383 |
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 six months ended August 31, 2016 and year ended February 29, 2016 were as follows:
Six months ended 8-31-16 | Year ended 2-29-16 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class A shares | ||||||||||||||||||||||||||
Sold | 9,280,481 | $196,625,278 | 30,296,417 | $652,123,320 | ||||||||||||||||||||||
Distributions reinvested | — | — | 37,422 | 806,063 | ||||||||||||||||||||||
Repurchased | (6,449,133 | ) | (137,229,839 | ) | (5,892,970 | ) | (123,829,522 | ) | ||||||||||||||||||
Net increase | 2,831,348 | $59,395,439 | 24,440,869 | $529,099,861 | ||||||||||||||||||||||
Class B shares | ||||||||||||||||||||||||||
Sold | 2,880 | $59,819 | 43,893 | $950,453 | ||||||||||||||||||||||
Repurchased | (21,847 | ) | (458,813 | ) | (23,186 | ) | (489,433 | ) | ||||||||||||||||||
Net increase (decrease) | (18,967 | ) | ($398,994 | ) | 20,707 | $461,020 | ||||||||||||||||||||
Class C shares | ||||||||||||||||||||||||||
Sold | 1,867,999 | $39,015,292 | 5,682,409 | $121,374,986 | ||||||||||||||||||||||
Repurchased | (688,492 | ) | (14,482,969 | ) | (535,075 | ) | (11,149,899 | ) | ||||||||||||||||||
Net increase | 1,179,507 | $24,532,323 | 5,147,334 | $110,225,087 | ||||||||||||||||||||||
Class I shares | ||||||||||||||||||||||||||
Sold | 31,800,807 | $678,058,946 | 65,900,813 | $1,417,620,775 | ||||||||||||||||||||||
Distributions reinvested | — | — | 160,677 | 3,464,207 | ||||||||||||||||||||||
Repurchased | (14,356,633 | ) | (302,718,833 | ) | (14,492,634 | ) | (309,958,268 | ) | ||||||||||||||||||
Net increase | 17,444,174 | $375,340,113 | 51,568,856 | $1,111,126,714 | ||||||||||||||||||||||
Class R2 shares1 | ||||||||||||||||||||||||||
Sold | 82,767 | $1,773,165 | 67,764 | $1,480,916 | ||||||||||||||||||||||
Repurchased | (29,933 | ) | (623,725 | ) | (3,813 | ) | (81,033 | ) | ||||||||||||||||||
Net increase | 52,834 | $1,149,440 | 63,951 | $1,399,883 | ||||||||||||||||||||||
Class R4 shares1 | ||||||||||||||||||||||||||
Sold | 10,865 | $230,426 | 152,395 | $3,282,916 | ||||||||||||||||||||||
Distributions reinvested | — | — | 151 | 3,252 | ||||||||||||||||||||||
Repurchased | (17,053 | ) | (359,494 | ) | (15,070 | ) | (313,187 | ) | ||||||||||||||||||
Net increase (decrease) | (6,188 | ) | ($129,068 | ) | 137,476 | $2,972,981 | ||||||||||||||||||||
Class R6 shares1 | ||||||||||||||||||||||||||
Sold | 1,671,559 | $35,132,685 | 123,984 | $2,660,310 | ||||||||||||||||||||||
Distributions reinvested | — | — | 356 | 7,688 | ||||||||||||||||||||||
Repurchased | (27,680 | ) | (586,155 | ) | (1,703 | ) | (34,471 | ) | ||||||||||||||||||
Net increase | 1,643,879 | $34,546,530 | 122,637 | $2,633,527 |
Six months ended 8-31-16 | Year ended 2-29-16 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class 1 shares | ||||||||||||||||||||||||||
Sold | 334,145 | $7,081,075 | 1,191,160 | $25,899,826 | ||||||||||||||||||||||
Distributions reinvested | — | — | 8,748 | 188,512 | ||||||||||||||||||||||
Repurchased | (187,722 | ) | (3,994,800 | ) | (168,568 | ) | (3,618,687 | ) | ||||||||||||||||||
Net increase | 146,423 | $3,086,275 | 1,031,340 | $22,469,651 | ||||||||||||||||||||||
Class NAV shares2 | ||||||||||||||||||||||||||
Sold | 238,924 | $5,064,708 | 4,844,041 | $109,195,857 | ||||||||||||||||||||||
Distributions reinvested | — | — | 23,895 | 514,934 | ||||||||||||||||||||||
Repurchased | (242,556 | ) | (5,156,739 | ) | (556,210 | ) | (11,759,311 | ) | ||||||||||||||||||
Net increase (decrease) | (3,632 | ) | ($92,031 | ) | 4,311,726 | $97,951,480 | ||||||||||||||||||||
Total net increase | 23,269,378 | $497,430,027 | 86,844,896 | $1,878,340,204 |
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 on August 31, 2016. Such concentration of shareholders' capital could have a material effect on the fund if such shareholders redeem from the fund.
Note 6 — Purchase and sale of securities
Purchases and sales of securities, other than short-term investments, amounted to $1,561,587,710 and $1,044,775,971, respectively, for the six months ended August 31, 2016.
Continuation of Investment Advisory and Subadvisory Agreements
Evaluation of Advisory and Subadvisory Agreements by the Board of Trustees
This section describes the evaluation by the Board of Trustees (the Board) of John Hancock Funds III (the Trust) of the Advisory Agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Advisor) and the Subadvisory Agreement (the Subadvisory Agreement) with Wellington Management Company LLP (the Subadvisor), for John Hancock International Growth Fund (the fund). The Advisory Agreement and Subadvisory Agreement are collectively referred to as the Agreements. Prior to the June 20-23, 2016 meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the Agreements at an in-person meeting held on May 24-25, 2016.
Approval of Advisory and Subadvisory Agreements
At in-person meetings held on June 20-23, 2016, the Board, including the Trustees who are not considered to be interested persons of the Trust under the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees), reapproved for an annual period the continuation of the Advisory Agreement between the Trust and the Advisor and the Subadvisory Agreement between the Advisor and the Subadvisor with respect to the fund.
In considering the Advisory Agreement and the Subadvisory Agreement, the Board received in advance of the meetings a variety of materials relating to the fund, the Advisor and the Subadvisor, including comparative performance, fee and expense information for a peer group of similar funds prepared by an independent third-party provider of mutual fund data, performance information for an applicable benchmark index; and, with respect to the Subadvisor, comparative performance information for comparably managed accounts, as applicable, and other information provided by the Advisor and the Subadvisor regarding the nature, extent and quality of services provided by the Advisor and the Subadvisor under their respective Agreements, as well as information regarding the Advisor's revenues and costs of providing services to the fund and any compensation paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreement are considered, particular focus is given to information concerning fund performance, comparability of fees and total expenses, and profitability. However, the Board notes that the evaluation process with respect to the Advisor and the Subadvisor is an ongoing one. In this regard, the Board also took into account discussions with management and information provided to the Board at prior meetings with respect to the services provided by the Advisor and the Subadvisor to the fund, including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisor with respect to the fund. The Board also considered the nature, quality, and extent of non-advisory services, if any, to be provided to the fund by the Advisor's affiliates, including distribution services.
Throughout the process, the Board asked questions of and requested additional information from management. The Board is assisted by counsel for the Trust and the Independent Trustees are also separately assisted by independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements and discussed the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement with respect to the fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets, and the industry) and does not treat any single factor as determinative, and each Trustee may attribute different weights to different factors. The Board's conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board's ongoing regular review of fund performance and operations throughout the year.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the fund, the Board reviewed information provided by the Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor's compliance and regulatory history, including its Form ADV. The Board also noted that on a regular basis it receives and reviews information from the Trust's Chief Compliance Officer (CCO) regarding the fund's compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board also considered the Advisor's risk management processes. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the fund, including, but not limited to, general supervision of and coordination of the services provided by the Subadvisor, and is also responsible for monitoring and reviewing the activities of the Subadvisor and other third-party service providers.
In considering the nature, extent, and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor's management and the quality of the performance of the Advisor's duties, through Board meetings, discussions and reports during the preceding year and through each Trustee's experience as a Trustee of the Trust and of the other trusts in the John Hancock group of funds complex (the John Hancock Fund Complex).
In the course of their deliberations regarding the Advisory Agreement, the Board considered, among other things:
(a) | the skills and competency with which the Advisor has in the past managed the Trust's affairs and its subadvisory relationship, the Advisor's oversight and monitoring of the Subadvisor's investment performance and compliance programs, such as the Subadvisor's compliance with fund policies and objectives, review of brokerage matters, including with respect to trade allocation and best execution and the Advisor's timeliness in responding to performance issues; | |
(b) | the background, qualifications and skills of the Advisor's personnel; | |
(c) | the Advisor's compliance policies and procedures and its responsiveness to regulatory changes and mutual fund industry developments; | |
(d) | the Advisor's administrative capabilities, including its ability to supervise the other service providers for the fund; | |
(e) | the financial condition of the Advisor and whether it has the financial wherewithal to provide a high level and quality of services to the fund; and | |
(f) | the Advisor's reputation and experience in serving as an investment advisor to the Trust and the benefit to shareholders of investing in funds that are part of a family of funds offering a variety of investments. |
The Board concluded that the Advisor may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the fund.
Investment performance. In considering the fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the fund's performance results. In connection with the consideration of the Advisory Agreement, the Board:
(a) | reviewed information prepared by management regarding the fund's performance; | |
(b) | considered the comparative performance of an applicable benchmark index; | |
(c) | considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; and | |
(d) | took into account the Advisor's analysis of the fund's performance and its plans and recommendations regarding the Trust's subadvisory arrangements generally. |
The Board noted that the fund outperformed its benchmark index and its peer group average for the one-, three- and five-year periods ended December 31, 2015. The Board concluded that the fund's performance has generally been in line with or outperformed the historical performance of comparable funds and the fund's benchmark index.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of mutual fund data, including, among other data, the fund's contractual and net management fees (and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the fund. The Board considered the fund's ranking within a smaller group of peer funds chosen by the independent third-party provider, as well as the fund's ranking within a broader group of funds. In comparing the fund's contractual and net management fees to those of comparable funds, the Board noted that such fees include both advisory and administrative costs. The Board noted that net management fees and total expenses for the fund are higher than the peer group median.
The Board took into account management's discussion of the fund's expenses. The Board also took into account management's discussion with respect to the advisory/subadvisory fee structure, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee. The Board also noted that the Advisor pays the subadvisory fee, and that such fees are negotiated at arm's length with respect to the Subadvisor. In addition, the Board took into account that management had agreed to implement an overall fee waiver across the complex, including the fund, which is discussed further below. The Board also noted actions taken over the past several years to reduce the fund's operating expenses. The Board also noted that, in addition, the Advisor is currently waiving fees and/or reimbursing expenses with respect to the fund and that the fund has breakpoints in its contractual management fee schedule that reduces management fees as assets increase. The Board also noted that the fund's distributor, an affiliate of the Advisor, has agreed to waive a portion of its Rule 12b-1 fee for a share class of the fund. The Board reviewed information provided by the Advisor concerning the investment advisory fee charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the John Hancock Fund Complex) having similar investment mandates, if any. The Board considered any differences between the Advisor's and Subadvisor's services to the fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee paid with respect to the fund is reasonable.
Profitability/indirect benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor's relationship with the Trust, the Board:
(a) | reviewed financial information of the Advisor; | |||||||
(b) | reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to the fund; | |||||||
(c) | received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole; | |||||||
(d) | received information with respect to the Advisor's allocation methodologies used in preparing the profitability data; | |||||||
(e) | considered that the John Hancock insurance companies that are affiliates of the Advisor, as shareholders of the Trust directly or through their separate accounts, receive certain tax credits or deductions relating to foreign taxes paid and dividends received by certain funds of the Trust and noted that these tax benefits, which are not available to participants in qualified retirement plans under applicable income tax law, are reflected in the profitability information reviewed by the Board; | |||||||
(f) | considered that the Advisor also provides administrative services to the fund on a cost basis pursuant to an administrative services agreement; | |||||||
(g) | noted that affiliates of the Advisor provide transfer agency services and distribution services to the fund, and that the fund's distributor also receives Rule 12b-1 payments to support distribution of the fund; | |||||||
(h) | noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the fund; | |||||||
(i) | noted that the subadvisory fee for the fund is paid by the Advisor and is negotiated at arm's length; and |
(j) | considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the fund and the entrepreneurial risk that it assumes as Advisor. |
Based upon its review, the Board concluded that the level of profitability, if any, of the Advisor and its affiliates from their relationship with the fund was reasonable and not excessive.
Economies of scale. In considering the extent to which economies of scale would be realized as the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders, the Board:
(a) | considered that the Advisor has contractually agreed to waive a portion of its management fee for certain funds of the John Hancock Fund Complex, including the fund (the participating portfolios) or otherwise reimburse the expenses of the participating portfolios (the reimbursement). 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; | |
(b) | reviewed the fund's advisory fee structure and concluded that: (i) the fund's fee structure contains breakpoints at the subadvisory fee level and that such breakpoints are reflected as breakpoints in the advisory fees for the fund; and (ii) although economies of scale cannot be measured with precision, these arrangements permit shareholders of the fund to benefit from economies of scale if the fund grows. The Board also took into account management's discussion of the fund's advisory fee structure; and | |
(c) | the Board also considered the effect of the fund's growth in size on its performance and fees. The Board also noted that if the fund's assets increase over time, the fund may realize other economies of scale. |
Approval of Subadvisory Agreement
In making its determination with respect to approval of the Subadvisory Agreement, the Board reviewed:
(1) | information relating to the Subadvisor's business, including current subadvisory services to the Trust (and other funds in the John Hancock Fund Complex); | |
(2) | the historical and current performance of the fund and comparative performance information relating to an applicable benchmark index and comparable funds; | |
(3) | the subadvisory fee for the fund, including any breakpoints, and to the extent available, comparable fee information prepared by an independent third party provider of fund data; and | |
(4) | information relating to the nature and scope of any material relationships and their significance to the Trust's Advisor and Subadvisor. |
Nature, extent, and quality of services. With respect to the services provided by the Subadvisor, the Board received information provided to the Board by the Subadvisor, including the Subadvisor's Form ADV, as well as took into account information presented throughout the past year. The Board considered the Subadvisor's current level of staffing and its overall resources, as well as received information relating to the Subadvisor's compensation program. The Board reviewed the Subadvisor's history and investment experience, as well as information regarding the qualifications, background, and responsibilities of the Subadvisor's investment and compliance personnel who provide services to the fund. The Board also considered, among other things, the Subadvisor's compliance program and any disciplinary history. The Board also considered the Subadvisor's risk assessment and monitoring process. The Board reviewed the Subadvisor's regulatory history, including whether it was involved in any regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular, periodic reviews of the Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust's CCO and his staff conduct regular, periodic compliance reviews with the Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the
regulatory compliance systems of the Subadvisor and procedures reasonably designed to assure compliance with the federal securities laws. The Board also took into account the financial condition of the Subadvisor.
The Board considered the Subadvisor's investment process and philosophy. The Board took into account that the Subadvisor's responsibilities include the development and maintenance of an investment program for the fund that is consistent with the fund's investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services. The Board also received information with respect to the Subadvisor's brokerage policies and practices, including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the fund, the Board noted that the fees under the Subadvisory Agreement are paid by the Advisor and not the fund.
The Board also relied on the ability of the Advisor to negotiate the Subadvisory Agreement with the Subadvisor, which is not affiliated with the Advisor, and the fees thereunder at arm's length. As a result, the costs of the services to be provided and the profits to be realized by the Subadvisor from its relationship with the Trust were not a material factor in the Board's consideration of the Subadvisory Agreement.
The Board also received information regarding the nature and scope (including their significance to the Advisor and its affiliates and to the Subadvisor) of any material relationships with respect to the Subadvisor, which include arrangements in which the Subadvisor or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreement.
In addition, the Board considered other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor's relationship with the fund, such as the opportunity to provide advisory services to additional funds in the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays a subadvisory fee to the Subadvisor. As noted above, the Board also considered the fund's subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the fund as included in the report prepared by the independent third party provider of fund data, to the extent available. The Board noted that the limited size of the Lipper peer group was not sufficient for comparative purposes. The Board also took into account the subadvisory fees paid by the Advisor to the Subadvisor with respect to the fund and compared them to fees charged by the Subadvisor to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered the fund's performance as compared to the fund's peer group and the benchmark index and noted that the Board reviews information about the fund's performance results at its regularly scheduled meetings. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor. The Board was mindful of the Advisor's focus on the Subadvisor's performance. The Board also noted the Subadvisor's long-term performance record for similar accounts, as applicable.
The Board's decision to approve the Subadvisory Agreement was based on a number of determinations, including the following:
(1) | the Subadvisor has extensive experience and demonstrated skills as a manager; | |||||||
(2) | the performance of the fund has generally been in line with or outperformed the historical performance of comparable funds and the fund's benchmark index; |
(3) | the subadvisory fee is reasonable in relation to the level and quality of services being provided; and | |||||||
(4) | noted that the subadvisory fees are paid by the Advisor not the fund and that the subadvisory fee breakpoints are reflected as breakpoints in the advisory fees for the fund in order to permit shareholders to benefit from economies of scale if the fund grows. | |||||||
* * * |
Based on the Board's evaluation of all factors that the Board deemed to be material, including those factors described above, the Board, including the Independent Trustees, concluded that renewal of the Advisory Agreement and the Subadvisory Agreement would be in the best interest of the fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreement for an additional one-year period.
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 |
*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 Small Cap Value Small Company Strategic Growth U.S. Global Leaders Growth U.S. 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 Focused Strategies 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 Retirement Living Portfolios Retirement Living II Portfolios EXCHANGE-TRADED FUNDS John Hancock Multifactor Consumer Discretionary ETF John Hancock Multifactor Consumer Staples ETF John Hancock Multifactor Energy ETF John Hancock Multifactor Financials ETF John Hancock Multifactor Healthcare ETF John Hancock Multifactor Industrials ETF John Hancock Multifactor Large Cap ETF John Hancock Multifactor Materials ETF John Hancock Multifactor Mid Cap ETF John Hancock Multifactor Technology ETF John Hancock Multifactor Utilities ETF | ENVIRONMENTAL, SOCIAL, AND GOVERNANCE FUNDS ESG All Cap Core ESG Large Cap Core CLOSED-END FUNDS Financial Opportunities Hedged Equity & Income Income Securities Trust Investors Trust Preferred Income Preferred Income II Preferred Income III Premium Dividend Tax-Advantaged Dividend Income Tax-Advantaged Global Shareholder Yield |
John Hancock Multifactor ETF shares are bought and sold at market price (not NAV), and are not individually redeemed
from the fund. Brokerage commissions will reduce returns.
John Hancock ETFs are distributed by Foreside Fund Services, LLC, and are subadvised by Dimensional Fund Advisors LP.
Foreside is not affiliated with John Hancock Funds, LLC or Dimensional Fund Advisors LP.
Dimensional Fund Advisors LP receives compensation from John Hancock in connection with licensing rights to the
John Hancock Dimensional indexes. Dimensional Fund Advisors LP does not sponsor, endorse, or sell, and makes no
representation as to the advisability of investing in, John Hancock Multifactor ETFs.
John Hancock 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. | ||
MF318212 | 87SA 8/16 10/16 |
John Hancock
Global Shareholder Yield Fund
Semiannual report 8/31/16
A message to shareholders
Dear shareholder,
The U.K.'s vote in late June to leave the European Union (EU) created a challenging backdrop for global financial markets; however, most international indexes ended the period with strong gains. The U.K.'s move creates a number of unknowns for the near term, the most important of which is whether other EU countries will follow suit. Meanwhile, the World Bank in June downgraded its 2016 global growth forecast from 2.9% to 2.4%, citing stubbornly low commodity prices and weak global trade, among other factors. Emerging markets were the best performers, as many countries benefited from stabilizing commodity prices and more promising economic growth prospects.
As this dynamic plays out, it is prudent to expect continued market volatility. 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 we have liquidity tools in place to help meet the needs of our shareholders. Whether the markets are up or down, one of your best resources is your financial advisor, who can help 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 August 31, 2016. They are subject to change at any time. All investments entail risks, including the possible loss of principal. Diversification does not guarantee a profit or eliminate the risk of a loss. 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 8/31/16 (%)
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. Returns for periods shorter than one year are cumulative. Performance of the other share classes will vary based on the difference in the fees and expenses of those classes. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current month-end performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling 800-225-5291. For further information on the fund's objectives, risks, and strategy, see the fund's prospectus.
PERFORMANCE HIGHLIGHTS OVER THE LAST SIX MONTHS
Global stocks rebounded
Global equity markets posted double-digit gains as increased economic stimulus measures and a recovery in commodity prices provided the catalyst for a stock market rally.
Fund underperformed the benchmark, but produced strong return
The fund produced a strong return but trailed the performance of its benchmark, the MSCI World Index.
Contributors and detractors
The fund's healthcare holdings contributed positively to performance versus the index, while the financials sector detracted from relative results.
SECTOR COMPOSITION AS OF 8/31/16 (%)
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 (if at all) to which a security may be sold or a derivative position closed without negatively affecting its market value—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-CSRS/0001145443-16-002244/ericlsappenfield.jpg)
Eric L. Sappenfield
Portfolio Manager
Epoch
Let's begin with an overview of the global equity markets. What factors influenced global stock market performance over the six months ended August 31, 2016?
Global equity markets posted double-digit gains for the period, driven largely by optimism about a global economic recovery. The period began shortly after a sharp downswing in global stocks, as rapidly falling oil prices and China's slowing growth rate elevated concerns about the health of the global economy. However, aggressive economic stimulus measures from many of the world's central banks—including the introduction of negative interest rates in Japan and further quantitative easing by the European Central Bank—provided the catalyst for an equity market rebound. Firming commodity prices, particularly a sharp recovery in the price of oil, also aided the rally in global stocks.
Despite the generally positive direction for global equities, market volatility remained elevated. Stocks were choppy as investors expressed concern about an ongoing slowdown in the Chinese economy, a potential interest-rate increase by the U.S. Federal Reserve (Fed), and the surprising outcome of the U.K.'s referendum to leave the European Union (Brexit). Geopolitical events, ranging from a coup in Turkey to terrorist attacks in France, also contributed to overall market volatility.
Every region of the globe posted positive returns for the six-month period. Emerging markets were the best performers, benefiting from more promising economic growth prospects. Among developed markets, the Asia/Pacific region generated the best returns, followed by the United States, with Europe lagging.
How did this environment affect fund performance?
The fund enjoyed a strong absolute return for the period, capturing returns from cash dividends, while also benefiting from various companies' share buybacks and debt reduction efforts. The fund's diversified portfolio of high-quality companies continued to consistently grow free cash flow (revenue available to distribute to shareholders or reinvest after current capital expenditures and tax obligations have been met) during the period. On a relative basis, however, the fund's return trailed that of its benchmark, the MSCI World Index.
What factors generally accounted for fund's underperformance?
Financial stocks, one of the largest sector weightings in the portfolio during the period, detracted the most from relative performance. One of the most significant individual detractors in this sector was Corrections Corp. of America (CCA), a real estate investment trust that owns and operates privatized correctional and detention facilities in the United States. The stock declined as the U.S. Department of Justice announced its intention to reduce and eventually eliminate the use of private prisons by the Federal Bureau of Prisons (BOP). The U.S. Department of Homeland Security (DHS) also initiated a review of its use of private prison facilities. Despite these headlines, the company lost only one prison contract with the BOP to date. We continue to monitor the DHS strategic review, but we believe that the outcome will ultimately be favorable for CCA and the private prison industry.
Another detractor from the financials sector was Germany-based insurance firm Muenchener Rueckversicherungs-Gesellschaft AG (Munich Re). Shares traded lower early in the reporting period with the announcement of a restructuring program for ERGO, the company's primary insurance business in Germany. Like many other European financial stocks, Munich Re was also negatively affected by the Brexit outcome and persistently low interest rates in the eurozone. Despite these headwinds, Munich Re is a dominant global reinsurer that generates significant free cash flow and has an exceptionally strong capital position. It remains committed to a progressive dividend policy and is continuing to execute the €1 billion share repurchase program announced in mid-March.
Outside of the financials sector, one of the biggest detractors was hard disk drive manufacturer Seagate Technology PLC. Seagate declined after a disappointing earnings report that highlighted the challenging conditions in its industry. Although the company remains committed to its dividend and shareholder yield policies, the visibility into near-term cash generation was significantly diminished, so we eliminated the stock from the portfolio.
TOP 10 HOLDINGS AS OF 8/31/16 (%)
Welltower, Inc. | 2.0 |
AT&T, Inc. | 1.8 |
National Grid PLC | 1.8 |
Philip Morris International, Inc. | 1.8 |
BCE, Inc. | 1.8 |
Vodafone Group PLC | 1.7 |
PPL Corp. | 1.7 |
Verizon Communications, Inc. | 1.7 |
Duke Energy Corp. | 1.7 |
Altria Group, Inc. | 1.6 |
TOTAL | 17.6 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
On the positive side, what holdings aided fund performance?
One of the leading contributors was document management and storage company Iron Mountain, Inc. The company completed its acquisition of competitor Recall Holdings, which should boost cash generation and support an increase in the pace of free cash flow growth. The dividend is well supported, and management has provided dividend and cash flow growth guidelines through 2020.
Another top contributor to fund performance was specialized semiconductor manufacturer Microchip Technology, Inc. Shares reacted positively to the company's second-quarter earnings report, which showed broad-based positive demand. Microchip also indicated that its acquisition of competitor Atmel Corp. would contribute to the bottom line sooner than expected, supporting the deal rationale and return projections. The company pays a well-covered dividend and is focused on deleveraging its balance sheet in the wake of the Atmel acquisition.
What changes did you make to the portfolio?
In our ongoing efforts to improve the fund's shareholder yield, we added eight new positions to the portfolio during the past six months and eliminated six existing holdings.
The new holdings are U.S. microchip designer QUALCOMM, Inc., U.S. network products maker Cisco Systems, Inc., French tire manufacturer Cie Generale des Etablissements Michelin, U.S. electric and natural gas utility Dominion Resources, Inc., Swiss pharmaceutical firm Novartis AG, Italian regulated utility Snam SpA, U.K. satellite broadcaster Sky PLC, and U.S. asset manager BlackRock, Inc.
In addition to Seagate, we closed out positions in Norwegian chemicals producer Yara International ASA, Canadian telecommunication services provider Shaw Communications, Inc., French media
TOP 10 COUNTRIES AS OF 8/31/16 (%)
United States | 49.0 |
United Kingdom | 13.9 |
Germany | 7.7 |
France | 6.2 |
Canada | 4.2 |
Switzerland | 3.7 |
Australia | 3.3 |
Italy | 2.2 |
Norway | 1.8 |
Singapore | 1.3 |
TOTAL | 93.3 |
As a percentage of net assets. | |
Cash and cash equivalents are not included. |
company Vivendi SA, U.S. utility company TECO Energy, Inc., and U.S. energy producer California Resources Corp.
How was the fund positioned at the end of the period?
Based on our fundamental bottom-up investment approach, the largest sector weightings in the portfolio at the end of the period were utilities, consumer staples, and telecommunication services. In contrast, the consumer discretionary and materials sectors were the smallest weightings in the portfolio.
Globally, the outlook for corporate earnings remains challenging. We see little room for valuation multiples to expand, indicating that dividends and earnings growth will be more important drivers of equity market returns.
Given that backdrop, we are keeping the fund invested in companies that have proven they can grow their free cash flow, even in a tepid economic environment, and that have a disciplined approach to allocating cash for the benefit of shareholders. Our focus on finding high-quality companies with strong balance sheets and the ability to consistently generate and grow free cash flow—and return it to shareholders through dividends, share buybacks, and debt reduction—should prove even more relevant in this environment.
MANAGED BY
![]() | Eric L. Sappenfield On the fund since inception Investing since 1986 |
![]() | William W. Priest, CFA 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 AUGUST 31, 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 | 6-month | 5-year | Since inception | as of 8-31-16 | as of 8-31-16 | ||||||||||||||||||||||||||||
Class A | 2.70 | 7.33 | 4.44 | 2 | 3.63 | 42.43 | 51.08 | 2 | 2.47 | 2.46 | |||||||||||||||||||||||||
Class B | 2.43 | 7.36 | 4.26 | 2 | 3.71 | 42.63 | 48.60 | 2 | 1.90 | 1.89 | |||||||||||||||||||||||||
Class C | 6.45 | 7.71 | 4.28 | 2 | 7.70 | 44.97 | 48.96 | 2 | 1.90 | 1.89 | |||||||||||||||||||||||||
Class I3 | 8.55 | 8.84 | 5.44 | 2 | 9.21 | 52.71 | 65.40 | 2 | 2.94 | 2.93 | |||||||||||||||||||||||||
Class R23,4 | 8.03 | 8.18 | 4.18 | 2 | 8.98 | 48.18 | 47.53 | 2 | 2.44 | 2.43 | |||||||||||||||||||||||||
Class R63,4 | 8.69 | 8.92 | 5.46 | 2 | 9.29 | 53.28 | 65.70 | 2 | 3.03 | 3.00 | |||||||||||||||||||||||||
Class NAV3 | 8.68 | 8.97 | 6.22 | 5 | 9.39 | 53.64 | 65.44 | 5 | 3.03 | 3.02 | |||||||||||||||||||||||||
Index† | 7.32 | 10.14 | 4.29 | 2 | 12.90 | 62.07 | 49.11 | 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 (%) | 1.29 | 1.99 | 1.99 | 0.97 | 1.38 | 0.88 | 0.86 |
Net (%) | 1.29 | 1.99 | 1.99 | 0.97 | 1.38 | 0.86 | 0.86 |
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 | 14,860 | 14,860 | 14,911 |
Class C6 | 3-1-07 | 14,896 | 14,896 | 14,911 |
Class I3 | 3-1-07 | 16,540 | 16,540 | 14,911 |
Class R23,4 | 3-1-07 | 14,753 | 14,753 | 14,911 |
Class R63,4 | 3-1-07 | 16,570 | 16,570 | 14,911 |
Class NAV3 | 4-28-08 | 16,544 | 16,544 | 14,245 |
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 March 1, 2016, with the same investment held until August 31, 2016.
Beginning Account value on 3-1-2016 | Ending value on 8-31-2016 | Expenses paid during period ended 8-31-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $1,090.80 | $6.85 | 1.30% |
Class B | 1,000.00 | 1,087.10 | 10.52 | 2.00% |
Class C | 1,000.00 | 1,087.00 | 10.52 | 2.00% |
Class I | 1,000.00 | 1,092.10 | 5.22 | 0.99% |
Class R2 | 1,000.00 | 1,089.80 | 7.16 | 1.36% |
Class R6 | 1,000.00 | 1,092.90 | 4.59 | 0.87% |
Class NAV | 1,000.00 | 1,093.90 | 4.59 | 0.87% |
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 August 31, 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 March 1, 2016, with the same investment held until August 31, 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 3-1-2016 | Ending value on 8-31-2016 | Expenses paid during period ended 8-31-20161 | Annualized expense ratio | |
Class A | $1,000.00 | $1,018.70 | $6.61 | 1.30% |
Class B | 1,000.00 | 1,015.10 | 10.16 | 2.00% |
Class C | 1,000.00 | 1,015.10 | 10.16 | 2.00% |
Class I | 1,000.00 | 1,020.30 | 5.04 | 0.99% |
Class R2 | 1,000.00 | 1,018.30 | 6.92 | 1.36% |
Class R6 | 1,000.00 | 1,020.80 | 4.43 | 0.87% |
Class NAV | 1,000.00 | 1,020.80 | 4.43 | 0.87% |
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 184/365 (to reflect the one-half year period). |
Fund's investments
As of 8-31-16 (unaudited) | ||||||||||||||
Shares | Value | |||||||||||||
Common stocks 97.2% | $2,089,812,570 | |||||||||||||
(Cost $1,797,120,901) | ||||||||||||||
Australia 3.3% | 70,547,758 | |||||||||||||
Commonwealth Bank of Australia | 247,630 | 13,340,428 | ||||||||||||
Sonic Healthcare, Ltd. | 790,990 | 13,654,426 | ||||||||||||
Telstra Corp., Ltd. | 6,298,930 | 24,874,015 | ||||||||||||
Westpac Banking Corp. | 845,059 | 18,678,889 | ||||||||||||
Canada 4.2% | 91,236,707 | |||||||||||||
Agrium, Inc. | 137,950 | 13,292,862 | ||||||||||||
BCE, Inc. | 815,070 | 38,080,937 | ||||||||||||
Rogers Communications, Inc., Class B | 585,785 | 25,085,928 | ||||||||||||
TELUS Corp. | 450,454 | 14,776,980 | ||||||||||||
France 6.2% | 133,306,124 | |||||||||||||
AXA SA | 873,300 | 18,380,561 | ||||||||||||
Cie Generale des Etablissements Michelin | 158,505 | 16,896,039 | ||||||||||||
Sanofi | 128,595 | 9,923,206 | ||||||||||||
SCOR SE | 435,420 | 12,847,136 | ||||||||||||
TOTAL SA | 640,110 | 30,582,114 | ||||||||||||
Unibail-Rodamco SE (L) | 105,465 | 29,020,486 | ||||||||||||
Vinci SA | 206,070 | 15,656,582 | ||||||||||||
Germany 7.7% | 166,555,764 | |||||||||||||
Allianz SE | 102,830 | 15,286,386 | ||||||||||||
BASF SE | 268,260 | 21,760,038 | ||||||||||||
Daimler AG | 349,675 | 24,204,805 | ||||||||||||
Deutsche Post AG | 719,530 | 22,732,264 | ||||||||||||
Deutsche Telekom AG | 1,240,040 | 20,685,501 | ||||||||||||
Muenchener Rueckversicherungs-Gesellschaft AG (Munich Re) | 182,510 | 32,957,815 | ||||||||||||
Siemens AG | 242,496 | 28,928,955 | ||||||||||||
Italy 2.2% | 48,205,224 | |||||||||||||
Snam SpA | 2,705,500 | 15,016,640 | ||||||||||||
Terna Rete Elettrica Nazionale SpA | 6,418,010 | 33,188,584 | ||||||||||||
Netherlands 1.3% | 27,410,162 | |||||||||||||
Royal Dutch Shell PLC, ADR, Class A | 560,535 | 27,410,162 | ||||||||||||
Norway 1.8% | 39,438,248 | |||||||||||||
Orkla ASA | 2,074,830 | 18,987,796 | ||||||||||||
Statoil ASA | 1,303,588 | 20,450,452 | ||||||||||||
Singapore 1.3% | 27,646,371 | |||||||||||||
Singapore Exchange, Ltd. | 2,255,551 | 12,496,753 | ||||||||||||
Singapore Telecommunications, Ltd. | 5,141,983 | 15,149,618 |
Shares | Value | |||||||||||||
Spain 0.7% | $14,941,010 | |||||||||||||
Gas Natural SDG SA | 723,270 | 14,941,010 | ||||||||||||
Sweden 0.9% | 18,621,254 | |||||||||||||
Svenska Handelsbanken AB, A Shares | 1,444,895 | 18,621,254 | ||||||||||||
Switzerland 3.7% | 80,059,345 | |||||||||||||
Nestle SA | 166,260 | 13,249,729 | ||||||||||||
Novartis AG | 197,185 | 15,530,882 | ||||||||||||
Roche Holding AG | 97,706 | 23,850,062 | ||||||||||||
Swisscom AG | 57,343 | 27,428,672 | ||||||||||||
Taiwan 1.0% | 21,525,685 | |||||||||||||
Taiwan Semiconductor Manufacturing Company, Ltd., ADR | 748,980 | 21,525,685 | ||||||||||||
United Kingdom 13.9% | 298,036,947 | |||||||||||||
AstraZeneca PLC, ADR (L) | 898,080 | 29,466,005 | ||||||||||||
BAE Systems PLC | 3,571,970 | 25,241,265 | ||||||||||||
British American Tobacco PLC | 495,366 | 30,733,712 | ||||||||||||
Diageo PLC | 564,800 | 15,653,354 | ||||||||||||
GlaxoSmithKline PLC | 1,478,310 | 31,820,888 | ||||||||||||
Imperial Brands PLC | 641,835 | 33,666,278 | ||||||||||||
National Grid PLC | 2,851,170 | 39,237,694 | ||||||||||||
Sky PLC | 1,335,206 | 14,884,278 | ||||||||||||
SSE PLC | 994,935 | 19,669,029 | ||||||||||||
Unilever PLC | 447,395 | 20,768,571 | ||||||||||||
Vodafone Group PLC | 12,226,712 | 36,895,873 | ||||||||||||
United States 49.0% | 1,052,281,971 | |||||||||||||
AbbVie, Inc. | 369,330 | 23,674,053 | ||||||||||||
Altria Group, Inc. | 520,225 | 34,381,670 | ||||||||||||
Ameren Corp. | 527,885 | 26,088,077 | ||||||||||||
Arthur J. Gallagher & Company | 244,280 | 12,069,875 | ||||||||||||
AT&T, Inc. | 963,240 | 39,377,251 | ||||||||||||
Automatic Data Processing, Inc. | 154,270 | 13,854,989 | ||||||||||||
BlackRock, Inc. | 38,505 | 14,355,049 | ||||||||||||
CenturyLink, Inc. | 663,280 | 18,439,184 | ||||||||||||
Cisco Systems, Inc. | 570,800 | 17,945,952 | ||||||||||||
CME Group, Inc. | 176,600 | 19,134,610 | ||||||||||||
Corrections Corp. of America | 543,492 | 8,657,828 | ||||||||||||
Dominion Resources, Inc. | 214,305 | 15,892,859 | ||||||||||||
Duke Energy Corp. | 458,498 | 36,523,951 | ||||||||||||
Eaton Corp. PLC | 256,200 | 17,047,548 | ||||||||||||
Emerson Electric Company | 289,620 | 15,257,182 | ||||||||||||
Entergy Corp. | 398,530 | 31,165,046 | ||||||||||||
Enterprise Products Partners LP | 798,770 | 21,087,528 | ||||||||||||
Exxon Mobil Corp. | 311,980 | 27,185,937 |
Shares | Value | |||||||||||||
United States (continued) | ||||||||||||||
Iron Mountain, Inc. | 644,315 | $24,748,139 | ||||||||||||
Johnson & Johnson | 126,785 | 15,130,522 | ||||||||||||
Kimberly-Clark Corp. | 174,790 | 22,383,607 | ||||||||||||
Lockheed Martin Corp. | 74,610 | 18,127,992 | ||||||||||||
McDonald's Corp. | 224,510 | 25,966,827 | ||||||||||||
Merck & Company, Inc. | 281,960 | 17,704,268 | ||||||||||||
Microchip Technology, Inc. (L) | 321,410 | 19,898,493 | ||||||||||||
Microsoft Corp. | 257,940 | 14,821,232 | ||||||||||||
Occidental Petroleum Corp. | 395,905 | 30,425,299 | ||||||||||||
People's United Financial, Inc. | 958,140 | 15,569,775 | ||||||||||||
PepsiCo, Inc. | 131,080 | 13,992,790 | ||||||||||||
Pfizer, Inc. | 391,610 | 13,628,028 | ||||||||||||
Philip Morris International, Inc. | 389,030 | 38,875,768 | ||||||||||||
PPL Corp. | 1,060,120 | 36,870,974 | ||||||||||||
QUALCOMM, Inc. | 437,975 | 27,623,083 | ||||||||||||
Regal Entertainment Group, Class A (L) | 778,130 | 16,636,419 | ||||||||||||
Reynolds American, Inc. | 641,044 | 31,776,551 | ||||||||||||
RR Donnelley & Sons Company | 1,121,830 | 19,183,293 | ||||||||||||
Texas Instruments, Inc. | 317,180 | 22,056,697 | ||||||||||||
The Coca-Cola Company | 291,320 | 12,652,028 | ||||||||||||
The Dow Chemical Company | 473,105 | 25,377,352 | ||||||||||||
The Procter & Gamble Company | 197,195 | 17,217,095 | ||||||||||||
The Southern Company | 353,050 | 18,122,057 | ||||||||||||
United Parcel Service, Inc., Class B | 157,700 | 17,223,994 | ||||||||||||
Verizon Communications, Inc. | 701,094 | 36,688,249 | ||||||||||||
Waste Management, Inc. | 255,360 | 16,327,718 | ||||||||||||
WEC Energy Group, Inc. | 509,446 | 30,505,626 | ||||||||||||
Wells Fargo & Company | 341,100 | 17,327,878 | ||||||||||||
Welltower, Inc. | 563,930 | 43,281,628 | ||||||||||||
Yield (%) | Shares | Value | ||||||||||||
Securities lending collateral 2.8% | $59,644,515 | |||||||||||||
(Cost $59,642,612) | ||||||||||||||
John Hancock Collateral Trust (W) | 0.6375(Y | ) | 5,960,756 | 59,644,515 | ||||||||||
Short-term investments 1.6% | $34,428,117 | |||||||||||||
(Cost $34,428,117) | ||||||||||||||
Money market funds 1.6% | 34,428,117 | |||||||||||||
Fidelity Institutional Money Market Government Portfolio, Institutional Class | 0.2600(Y | ) | 34,428,117 | 34,428,117 | ||||||||||
Total investments (Cost $1,891,191,630)† 101.6% | $2,183,885,202 | |||||||||||||
Other assets and liabilities, net (1.6%) | ($35,183,999 | ) | ||||||||||||
Total net assets 100.0% | $2,148,701,203 |
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 | |||||||||||||
(L) | A portion of this security is on loan as of 8-31-16. | |||||||||||||
(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 8-31-16. | |||||||||||||
† | At 8-31-16, the aggregate cost of investment securities for federal income tax purposes was $1,899,003,098. Net unrealized appreciation aggregated to $284,882,104, of which $353,083,410 related to appreciated investment securities and $68,201,306 related to depreciated investment securities. |
Financial statements
STATEMENT OF ASSETS AND LIABILITIES 8-31-16 (unaudited)
Assets | |||||||||||||||||||||||||||||||||
Unaffiliated investments, at value (Cost $1,831,549,018) including $57,517,050 of securities loaned | $2,124,240,687 | ||||||||||||||||||||||||||||||||
Affiliated investments, at value (Cost $59,642,612) | 59,644,515 | ||||||||||||||||||||||||||||||||
Total investments, at value (Cost $1,891,191,630) | 2,183,885,202 | ||||||||||||||||||||||||||||||||
Foreign currency, at value (Cost $99,214) | 99,214 | ||||||||||||||||||||||||||||||||
Receivable for fund shares sold | 15,861,629 | ||||||||||||||||||||||||||||||||
Dividends and interest receivable | 11,681,858 | ||||||||||||||||||||||||||||||||
Receivable for securities lending income | 128,730 | ||||||||||||||||||||||||||||||||
Other receivables and prepaid expenses | 119,501 | ||||||||||||||||||||||||||||||||
Total assets | 2,211,776,134 | ||||||||||||||||||||||||||||||||
Liabilities | |||||||||||||||||||||||||||||||||
Payable for fund shares repurchased | 2,740,806 | ||||||||||||||||||||||||||||||||
Payable upon return of securities loaned | 59,653,270 | ||||||||||||||||||||||||||||||||
Payable to affiliates | |||||||||||||||||||||||||||||||||
Accounting and legal services fees | 45,627 | ||||||||||||||||||||||||||||||||
Transfer agent fees | 157,846 | ||||||||||||||||||||||||||||||||
Distribution and service fees | 611 | ||||||||||||||||||||||||||||||||
Trustees' fees | 2,214 | ||||||||||||||||||||||||||||||||
Other liabilities and accrued expenses | 474,557 | ||||||||||||||||||||||||||||||||
Total liabilities | 63,074,931 | ||||||||||||||||||||||||||||||||
Net assets | $2,148,701,203 | ||||||||||||||||||||||||||||||||
Net assets consist of | |||||||||||||||||||||||||||||||||
Paid-in capital | $1,959,082,846 | ||||||||||||||||||||||||||||||||
Undistributed net investment income | 9,208,810 | ||||||||||||||||||||||||||||||||
Accumulated net realized gain (loss) on investments and foreign currency transactions | (112,244,989 | ) | |||||||||||||||||||||||||||||||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities in foreign currencies | 292,654,536 | ||||||||||||||||||||||||||||||||
Net assets | $2,148,701,203 | ||||||||||||||||||||||||||||||||
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 ($508,637,188 ÷ 48,061,078 shares)1 | $10.58 | ||||||||||||||||||||||||||||||||
Class B ($11,863,434 ÷ 1,121,022 shares)1 | $10.58 | ||||||||||||||||||||||||||||||||
Class C ($139,689,943 ÷ 13,194,041 shares)1 | $10.59 | ||||||||||||||||||||||||||||||||
Class I ($918,982,989 ÷ 86,493,966 shares) | $10.62 | ||||||||||||||||||||||||||||||||
Class R2 ($1,009,674 ÷ 95,038 shares) | $10.62 | ||||||||||||||||||||||||||||||||
Class R6 ($1,006,673 ÷ 94,883 shares) | $10.61 | ||||||||||||||||||||||||||||||||
Class NAV ($567,511,302 ÷ 53,441,616 shares) | $10.62 | ||||||||||||||||||||||||||||||||
Maximum offering price per share | |||||||||||||||||||||||||||||||||
Class A (net assets value per share ÷ 95%)2 | $11.14 |
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 six months ended 8-31-16 (unaudited)
Investment income | ||||||||||||||||||||||||
Dividends | $55,452,396 | |||||||||||||||||||||||
Securities lending | 305,447 | |||||||||||||||||||||||
Interest | 82,623 | |||||||||||||||||||||||
Less foreign taxes withheld | (3,432,336 | ) | ||||||||||||||||||||||
Total investment income | 52,408,130 | |||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Investment management fees | 8,739,079 | |||||||||||||||||||||||
Distribution and service fees | 1,548,485 | |||||||||||||||||||||||
Accounting and legal services fees | 164,950 | |||||||||||||||||||||||
Transfer agent fees | 969,199 | |||||||||||||||||||||||
Trustees' fees | 19,513 | |||||||||||||||||||||||
State registration fees | 76,263 | |||||||||||||||||||||||
Printing and postage | 107,690 | |||||||||||||||||||||||
Professional fees | 105,369 | |||||||||||||||||||||||
Custodian fees | 349,874 | |||||||||||||||||||||||
Other | 26,074 | |||||||||||||||||||||||
Total expenses | 12,106,496 | |||||||||||||||||||||||
Less expense reductions | (81,602 | ) | ||||||||||||||||||||||
Net expenses | 12,024,894 | |||||||||||||||||||||||
Net investment income | 40,383,236 | |||||||||||||||||||||||
Realized and unrealized gain (loss) | ||||||||||||||||||||||||
Net realized gain (loss) on | ||||||||||||||||||||||||
Unaffiliated investments and foreign currency transactions | 3,041,003 | |||||||||||||||||||||||
Affiliated investments | (10,657 | ) | ||||||||||||||||||||||
3,030,346 | ||||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of | ||||||||||||||||||||||||
Unaffiliated investments and translation of assets and liabilities in foreign currencies | 148,699,088 | |||||||||||||||||||||||
Affiliated investments | 1,903 | |||||||||||||||||||||||
148,700,991 | ||||||||||||||||||||||||
Net realized and unrealized gain | 151,731,337 | |||||||||||||||||||||||
Increase in net assets from operations | $192,114,573 |
STATEMENTS OF CHANGES IN NET ASSETS
Six months ended 8-31-16 | Year ended 2-29-16 | |||||||||||||||||||||||||||||||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||||||||||||||||||||||||||
Increase (decrease) in net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
From operations | ||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | $40,383,236 | $79,050,948 | ||||||||||||||||||||||||||||||||||||||||||||||
Net realized gain (loss) | 3,030,346 | (19,547,888 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) | 148,700,991 | (304,309,620 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Increase (decrease) in net assets resulting from operations | 192,114,573 | (244,806,560 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Distributions to shareholders | ||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | ||||||||||||||||||||||||||||||||||||||||||||||||
Class A | (9,648,132 | ) | (15,908,865 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class B | (194,784 | ) | (312,238 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class C | (2,191,755 | ) | (3,515,222 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class I | (17,982,699 | ) | (36,220,453 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R2 | (17,701 | ) | (33,565 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class R6 | (20,061 | ) | (29,367 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Class NAV | (11,763,615 | ) | (21,679,609 | ) | ||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | ||||||||||||||||||||||||||||||||||||||||||||||||
Class A | — | (22,412,725 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class B | — | (586,723 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class C | — | (6,495,421 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class I | — | (44,789,082 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class R2 | — | (48,929 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class R6 | — | (42,665 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Class NAV | — | (27,209,972 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (41,818,747 | ) | (179,284,836 | ) | ||||||||||||||||||||||||||||||||||||||||||||
From fund share transactions | (128,978,697 | ) | (154,387,828 | ) | ||||||||||||||||||||||||||||||||||||||||||||
Total increase (decrease) | 21,317,129 | (578,479,224 | ) | |||||||||||||||||||||||||||||||||||||||||||||
Net assets | ||||||||||||||||||||||||||||||||||||||||||||||||
Beginning of period | 2,127,384,074 | 2,705,863,298 | ||||||||||||||||||||||||||||||||||||||||||||||
End of period | $2,148,701,203 | $2,127,384,074 | ||||||||||||||||||||||||||||||||||||||||||||||
Undistributed net investment income | $9,208,810 | $10,644,321 |
Financial highlights
Class A Shares Period ended | 8-31-16 | 1 | 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 | $9.89 | $11.78 | $11.74 | $10.46 | $9.81 | $9.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.18 | 0.33 | 0.36 | 0.45 | 3 | 0.29 | 0.26 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.71 | (1.42 | ) | 0.55 | 1.57 | 0.63 | 0.29 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 0.89 | (1.09 | ) | 0.91 | 2.02 | 0.92 | 0.55 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.20 | ) | (0.32 | ) | (0.44 | ) | (0.31 | ) | (0.27 | ) | (0.24 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.20 | ) | (0.80 | ) | (0.87 | ) | (0.74 | ) | (0.27 | ) | (0.24 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $10.58 | $9.89 | $11.78 | $11.74 | $10.46 | $9.81 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4,5 | 9.08 | 6 | (9.38 | ) | 8.10 | 19.85 | 9.66 | 5.98 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $509 | $470 | $580 | $553 | $276 | $215 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.31 | 7 | 1.29 | 1.33 | 1.34 | 1.43 | 1.53 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.30 | 7 | 1.28 | 1.32 | 1.34 | 1.42 | 1.42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.45 | 7 | 3.03 | 2.99 | 4.01 | 3 | 2.92 | 2.78 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 15 | 33 | 23 | 40 | 21 | 19 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Annualized. |
Class B Shares Period ended | 8-31-16 | 1 | 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 | $9.89 | $11.78 | $11.74 | $10.46 | $9.81 | $9.49 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.15 | 0.25 | 0.27 | 0.35 | 3 | 0.22 | 0.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.70 | (1.42 | ) | 0.55 | 1.58 | 0.64 | 0.29 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 0.85 | (1.17 | ) | 0.82 | 1.93 | 0.86 | 0.49 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.16 | ) | (0.24 | ) | (0.35 | ) | (0.22 | ) | (0.21 | ) | (0.17 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.16 | ) | (0.72 | ) | (0.78 | ) | (0.65 | ) | (0.21 | ) | (0.17 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $10.58 | $9.89 | $11.78 | $11.74 | $10.46 | $9.81 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4,5 | 8.71 | 6 | (10.10 | ) | 7.26 | 18.95 | 8.90 | 5.33 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $12 | $12 | $17 | $17 | $11 | $8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.01 | 7 | 2.02 | 2.10 | 2.15 | 2.29 | 2.54 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 2.00 | 7 | 2.02 | 2.10 | 2.12 | 2.12 | 2.11 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.78 | 7 | 2.31 | 2.24 | 3.11 | 3 | 2.21 | 2.17 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 15 | 33 | 23 | 40 | 21 | 19 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Annualized. |
Class C Shares Period ended | 8-31-16 | 1 | 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 | $9.90 | $11.79 | $11.74 | $10.46 | $9.81 | $9.50 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.15 | 0.25 | 0.27 | 0.36 | 3 | 0.22 | 0.20 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.70 | (1.41 | ) | 0.56 | 1.58 | 0.64 | 0.28 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 0.85 | (1.16 | ) | 0.83 | 1.94 | 0.86 | 0.48 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.16 | ) | (0.25 | ) | (0.35 | ) | (0.23 | ) | (0.21 | ) | (0.17 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.16 | ) | (0.73 | ) | (0.78 | ) | (0.66 | ) | (0.21 | ) | (0.17 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $10.59 | $9.90 | $11.79 | $11.74 | $10.46 | $9.81 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4,5 | 8.70 | 6 | (10.02 | ) | 7.42 | 18.97 | 8.90 | 5.22 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $140 | $133 | $168 | $127 | $65 | $45 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 2.01 | 7 | 1.99 | 2.03 | 2.05 | 2.15 | 2.29 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 2.00 | 7 | 1.98 | 2.02 | 2.05 | 2.12 | 2.11 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 2.76 | 7 | 2.33 | 2.24 | 3.22 | 3 | 2.22 | 2.13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 15 | 33 | 23 | 40 | 21 | 19 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Does not reflect the effect of sales charges, if any. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Annualized. |
Class I Shares Period ended | 8-31-16 | 1 | 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 | $9.93 | $11.83 | $11.78 | $10.49 | $9.84 | $9.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.21 | 0.37 | 0.39 | 0.47 | 3 | 0.31 | 0.32 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.70 | (1.43 | ) | 0.56 | 1.59 | 0.65 | 0.27 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 0.91 | (1.06 | ) | 0.95 | 2.06 | 0.96 | 0.59 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.22 | ) | (0.36 | ) | (0.47 | ) | (0.34 | ) | (0.31 | ) | (0.28 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.22 | ) | (0.84 | ) | (0.90 | ) | (0.77 | ) | (0.31 | ) | (0.28 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $10.62 | $9.93 | $11.83 | $11.78 | $10.49 | $9.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 9.21 | 5 | (9.13 | ) | 8.50 | 20.28 | 10.07 | 6.45 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $919 | $957 | $1,242 | $893 | $641 | $249 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 0.99 | 6 | 0.97 | 1.01 | 1.01 | 1.05 | 1.12 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.99 | 6 | 0.97 | 1.00 | 1.01 | 1.03 | 0.97 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.86 | 6 | 3.37 | 3.24 | 4.19 | 3 | 3.10 | 3.43 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 15 | 33 | 23 | 40 | 21 | 19 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Annualized. |
Class R2 Shares Period ended | 8-31-16 | 1 | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $9.93 | $11.82 | $11.78 | $10.49 | $9.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income3 | 0.18 | 0.32 | 0.31 | 0.50 | 4 | 0.29 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.70 | (1.43 | ) | 0.58 | 1.52 | 0.63 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 0.88 | (1.11 | ) | 0.89 | 2.02 | 0.92 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.19 | ) | (0.30 | ) | (0.42 | ) | (0.30 | ) | (0.27 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.19 | ) | (0.78 | ) | (0.85 | ) | (0.73 | ) | (0.27 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $10.62 | $9.93 | $11.82 | $11.78 | $10.49 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)5 | 8.98 | 6 | (9.51 | ) | 7.93 | 19.78 | 9.58 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1 | $1 | $1 | $1 | — | 7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.37 | 8 | 1.86 | 3.22 | 8.52 | 19.42 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 1.36 | 8 | 1.43 | 1.47 | 1.47 | 1.47 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.41 | 8 | 2.92 | 2.66 | 4.38 | 4 | 2.91 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 15 | 33 | 23 | 40 | 21 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | The inception date for Class R2 shares is 3-1-12. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Less than $500,000. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | Annualized. |
Class R6 Shares Period ended | 8-31-16 | 1 | 2-29-16 | 2-28-15 | 2-28-14 | 2-28-13 | 2-29-12 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $9.92 | $11.81 | $11.77 | $10.49 | $9.84 | $9.29 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income3 | 0.21 | 0.38 | 0.39 | 0.48 | 4 | 0.33 | 0.13 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.70 | (1.42 | ) | 0.57 | 1.58 | 0.64 | 0.52 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 0.91 | (1.04 | ) | 0.96 | 2.06 | 0.97 | 0.65 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.22 | ) | (0.37 | ) | (0.49 | ) | (0.35 | ) | (0.32 | ) | (0.10 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.22 | ) | (0.85 | ) | (0.92 | ) | (0.78 | ) | (0.32 | ) | (0.10 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $10.61 | $9.92 | $11.81 | $11.77 | $10.49 | $9.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)5 | 9.29 | 6 | (8.94 | ) | 8.56 | 20.29 | 10.12 | 7.12 | 6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $1 | $1 | — | 7 | — | 7 | — | 7 | — | 7 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 0.90 | 8 | 1.45 | 6.51 | 10.30 | 10.38 | 15.93 | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.87 | 8 | 0.85 | 0.87 | 0.97 | 0.97 | 0.97 | 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.87 | 8 | 3.48 | 3.32 | 4.26 | 4 | 3.29 | 2.82 | 8 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 15 | 33 | 23 | 40 | 21 | 19 | 9 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | The inception date for Class R6 shares is 9-1-11. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Not annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
7 | Less than $500,000. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
8 | Annualized. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
9 | The portfolio turnover is shown for the period from 3-1-11 to 2-29-12. |
Class NAV Shares Period ended | 8-31-16 | 1 | 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 | $9.92 | $11.82 | $11.78 | $10.49 | $9.84 | $9.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income2 | 0.21 | 0.37 | 0.41 | 0.49 | 3 | 0.35 | 0.29 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.71 | (1.42 | ) | 0.55 | 1.59 | 0.62 | 0.31 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 0.92 | (1.05 | ) | 0.96 | 2.08 | 0.97 | 0.60 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (0.22 | ) | (0.37 | ) | (0.49 | ) | (0.36 | ) | (0.32 | ) | (0.29 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | — | (0.48 | ) | (0.43 | ) | (0.43 | ) | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (0.22 | ) | (0.85 | ) | (0.92 | ) | (0.79 | ) | (0.32 | ) | (0.29 | ) | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $10.62 | $9.92 | $11.82 | $11.78 | $10.49 | $9.84 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return (%)4 | 9.39 | 5 | (9.03 | ) | 8.57 | 20.47 | 10.17 | 6.53 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets, end of period (in millions) | $568 | $554 | $696 | $653 | $944 | $1,019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 0.88 | 6 | 0.86 | 0.88 | 0.88 | 0.90 | 0.99 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions | 0.87 | 6 | 0.85 | 0.87 | 0.87 | 0.89 | 0.94 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 3.90 | 6 | 3.45 | 3.42 | 4.35 | 3 | 3.56 | 3.11 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 15 | 33 | 23 | 40 | 21 | 19 |
1 | Six months ended 8-31-16. Unaudited. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 | Annualized. |
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 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 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 net asset value (NAV) may be determined as of the regularly scheduled close of the NYSE pursuant to the fund's Valuation Policies and Procedures. 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 (SEC) 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 NAVs 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.
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 August 31, 2016, by major security category or type:
Total value at 8-31-16 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | ||
Common stocks | |||||
Australia | $70,547,758 | — | $70,547,758 | — | |
Canada | 91,236,707 | $91,236,707 | — | — | |
France | 133,306,124 | — | 133,306,124 | — | |
Germany | 166,555,764 | — | 166,555,764 | — | |
Italy | 48,205,224 | — | 48,205,224 | — | |
Netherlands | 27,410,162 | 27,410,162 | — | — | |
Norway | 39,438,248 | — | 39,438,248 | — | |
Singapore | 27,646,371 | — | 27,646,371 | — | |
Spain | 14,941,010 | — | 14,941,010 | — | |
Sweden | 18,621,254 | — | 18,621,254 | — | |
Switzerland | 80,059,345 | — | 80,059,345 | — | |
Taiwan | 21,525,685 | 21,525,685 | — | — | |
United Kingdom | 298,036,947 | 29,466,005 | 268,570,942 | — | |
United States | 1,052,281,971 | 1,052,281,971 | — | — | |
Securities lending collateral | 59,644,515 | 59,644,515 | — | — | |
Short-term investments | 34,428,117 | 34,428,117 | — | — | |
Total investments in securities | $2,183,885,202 | $1,315,993,162 | $867,892,040 | — |
Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily NAV calculations. However, for financial reporting purposes, investment transactions are reported on trade date. 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.
Effective June 30, 2016, 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 $1 billion unsecured committed line of credit. Excluding commitments designated for certain funds, the fund can borrow up to an aggregate commitment amount of $750 million, subject to asset coverage and other limitations as specified in the agreement. A commitment fee payable at the end of each calendar quarter, based on the average daily unused portion of the line of credit, is charged to each participating fund based on a combination of fixed and asset based allocations and is reflected in Other expenses on the Statement of operations. Prior to June 30, 2016, the fund had a similar agreement that enabled it to participate in a $750 million unsecured committed line of credit. For the six months ended August 31, 2016, the fund had no borrowings under either line of credit. Commitment fees for the six months ended August 31, 2016, were $4,272.
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.
Federal income taxes. The fund intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.
As of 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 generally declares and pays dividends quarterly and capital gain distributions, if any, annually.
Distributions paid by the fund with respect to each class of shares are calculated in the same manner, at the same time and in the same amount, except for the effect of class level expenses that may be applied differently to each class.
Such distributions, on a tax basis, are determined in conformity with income tax regulations, which may differ from US GAAP.
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 six months ended August 31, 2016, this waiver amounted to 0.01% of the fund's average net assets (on an annualized basis). 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.
Prior to July 1, 2016, the Advisor had 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 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) attributable to Class R6 shares (the class expense waiver). The class expense waiver 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 that time.
For the six months ended August 31, 2016, the expense reductions described above amounted to the following:
Class | Expense reductions | Class | Expense reductions | |
Class A | $19,244 | Class R2 | $38 | |
Class B | 467 | Class R6 | 121 | |
Class C | 5,304 | Class NAV | 21,282 | |
Class I | 35,146 | Total | $81,602 |
Expenses waived or reimbursed in the current fiscal period are not subject to recapture in future fiscal periods.
The investment management fees, including the impact of the waivers and reimbursements as described above, incurred for the six months ended August 31, 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 six months ended August 31, 2016 amounted to an annual rate of 0.02% of the fund's average daily net assets.
Distribution and service plans. The fund has a distribution agreement with the Distributor. The fund has adopted distribution and service plans with respect to Class A, Class B, Class C and Class R2 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 $547,473 for the year ended August 31, 2016. Of this amount, $93,766 was retained and used for printing prospectuses, advertising, sales literature and other purposes, $451,162 was paid as sales commissions to broker-dealers and $2,545 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 six months ended August 31, 2016, CDSCs received by the Distributor amounted to $2,793, $9,777 and $3,926 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 six months ended August 31, 2016 were:
Class | Distribution and service fees | Transfer agent fees |
Class A | $773,036 | $328,283 |
Class B | 62,619 | 7,987 |
Class C | 710,436 | 90,579 |
Class I | — | 542,177 |
Class R2 | 2,394 | 88 |
Class R6 | — | 85 |
Total | $1,548,485 | $969,199 |
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.
Interfund lending program Pursuant to an Exemptive Order issued by the SEC, the fund, along with certain other funds advised by the Advisor or its affiliates, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating affiliated funds. At period end, no interfund loans were outstanding. The fund's activity in this program during the period for which loans were outstanding was as follows:
Borrower or lender | Weighted average loan balance | Days outstanding | Weighted average interest rate | Interest income (expense) |
Borrower | $97,398,353 | 5 | 0.700% | ($9,469) |
Lender | $20,510,931 | 3 | 0.710% | $1,214 |
Note 5 — Fund share transactions
Transactions in fund shares for the six months ended August 31, 2016 and year ended February 29, 2016 were as follows:
Six months ended 8-31-16 | Year ended 2-29-16 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class A shares | ||||||||||||||||||||||||||
Sold | 6,114,937 | $64,448,712 | 12,988,813 | $141,830,521 | ||||||||||||||||||||||
Distributions reinvested | 933,808 | 9,515,232 | 3,650,890 | 37,774,679 | ||||||||||||||||||||||
Repurchased | (6,462,982 | ) | (68,286,281 | ) | (18,406,136 | ) | (198,023,915 | ) | ||||||||||||||||||
Net increase (decrease) | 585,763 | $5,677,663 | (1,766,433 | ) | ($18,418,715 | ) | ||||||||||||||||||||
Class B shares | ||||||||||||||||||||||||||
Sold | 34,926 | $365,124 | 37,856 | $406,269 | ||||||||||||||||||||||
Distributions reinvested | 14,198 | 144,778 | 69,139 | 713,045 | ||||||||||||||||||||||
Repurchased | (138,762 | ) | (1,462,520 | ) | (307,309 | ) | (3,306,303 | ) | ||||||||||||||||||
Net decrease | (89,638 | ) | ($952,618 | ) | (200,314 | ) | ($2,186,989 | ) | ||||||||||||||||||
Class C shares | ||||||||||||||||||||||||||
Sold | 1,284,682 | $13,557,659 | 2,552,507 | $28,296,220 | ||||||||||||||||||||||
Distributions reinvested | 203,023 | 2,071,143 | 902,501 | 9,313,786 | ||||||||||||||||||||||
Repurchased | (1,752,596 | ) | (18,477,922 | ) | (4,277,843 | ) | (45,937,158 | ) | ||||||||||||||||||
Net decrease | (264,891 | ) | ($2,849,120 | ) | (822,835 | ) | ($8,327,152 | ) | ||||||||||||||||||
Class I shares | ||||||||||||||||||||||||||
Sold | 27,267,069 | $289,727,745 | 25,978,642 | $282,688,478 | ||||||||||||||||||||||
Distributions reinvested | 1,725,802 | 17,676,027 | 7,630,235 | 79,403,301 | ||||||||||||||||||||||
Repurchased | (38,837,144 | ) | (413,042,221 | ) | (42,313,928 | ) | (456,473,543 | ) | ||||||||||||||||||
Net decrease | (9,844,273 | ) | ($105,638,449 | ) | (8,705,051 | ) | ($94,381,764 | ) |
Six months ended 8-31-16 | Year ended 2-29-16 | |||||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Class R2 shares | ||||||||||||||||||||||||||
Sold | 15,805 | $167,151 | 42,457 | $455,553 | ||||||||||||||||||||||
Distributions reinvested | 1,721 | 17,605 | 7,751 | 80,387 | ||||||||||||||||||||||
Repurchased | (13,105 | ) | (138,411 | ) | (73,045 | ) | (768,518 | ) | ||||||||||||||||||
Net increase (decrease) | 4,421 | $46,345 | (22,837 | ) | ($232,578 | ) | ||||||||||||||||||||
Class R6 shares | ||||||||||||||||||||||||||
Sold | 7,660 | $81,426 | 77,540 | $867,395 | ||||||||||||||||||||||
Distributions reinvested | 1,964 | 20,061 | 6,783 | 69,824 | ||||||||||||||||||||||
Repurchased | (4,304 | ) | (45,468 | ) | (29,617 | ) | (316,169 | ) | ||||||||||||||||||
Net increase | 5,320 | $56,019 | 54,706 | $621,050 | ||||||||||||||||||||||
Class NAV shares | ||||||||||||||||||||||||||
Sold | 1,610,250 | $17,250,516 | 918,471 | $10,328,098 | ||||||||||||||||||||||
Distributions reinvested | 1,150,337 | 11,763,615 | 4,706,809 | 48,889,581 | ||||||||||||||||||||||
Repurchased | (5,160,165 | ) | (54,332,668 | ) | (8,691,173 | ) | (90,679,359 | ) | ||||||||||||||||||
Net decrease | (2,399,578 | ) | ($25,318,537 | ) | (3,065,893 | ) | ($31,461,680 | ) | ||||||||||||||||||
Total net decrease | (12,002,876 | ) | ($128,978,697 | ) | (14,528,657 | ) | ($154,387,828 | ) |
Affiliates of the fund owned 99.2% of shares of beneficial interest of Class NAV, respectively, on August 31, 2016. Such concentration of shareholders' capital could have a material effect on the fund if such shareholders redeem from the fund.
Note 6 — Purchase and sale of securities
Purchases and sales of securities, other than short-term investments, amounted to $269,545,944 and $392,851,083, respectively, for the six months ended August 31, 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 August 31, 2016, funds within the John Hancock group of funds complex held 26.3% 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 | 8.5% |
John Hancock Funds II Lifestyle Balanced Portfolio | 7.9% |
Continuation of Investment Advisory and Subadvisory Agreements
Evaluation of Advisory and Subadvisory Agreements by the Board of Trustees
This section describes the evaluation by the Board of Trustees (the Board) of John Hancock Funds III (the Trust) of the Advisory Agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Advisor) and the Subadvisory Agreement (the Subadvisory Agreement) with Epoch Investment Partners, Inc. (the Subadvisor), for John Hancock Global Shareholder Yield Fund (the fund). The Advisory Agreement and Subadvisory Agreement are collectively referred to as the Agreements. Prior to the June 20-23, 2016 meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the Agreements at an in-person meeting held on May 24-25, 2016.
Approval of Advisory and Subadvisory Agreements
At in-person meetings held on June 20-23, 2016, the Board, including the Trustees who are not considered to be interested persons of the Trust under the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees), reapproved for an annual period the continuation of the Advisory Agreement between the Trust and the Advisor and the Subadvisory Agreement between the Advisor and the Subadvisor with respect to the fund.
In considering the Advisory Agreement and the Subadvisory Agreement, the Board received in advance of the meetings a variety of materials relating to the fund, the Advisor and the Subadvisor, including comparative performance, fee and expense information for a peer group of similar funds prepared by an independent third-party provider of mutual fund data, performance information for an applicable benchmark index; and, with respect to the Subadvisor, comparative performance information for comparably managed accounts, as applicable, and other information provided by the Advisor and the Subadvisor regarding the nature, extent and quality of services provided by the Advisor and the Subadvisor under their respective Agreements, as well as information regarding the Advisor's revenues and costs of providing services to the fund and any compensation paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreement are considered, particular focus is given to information concerning fund performance, comparability of fees and total expenses, and profitability. However, the Board notes that the evaluation process with respect to the Advisor and the Subadvisor is an ongoing one. In this regard, the Board also took into account discussions with management and information provided to the Board at prior meetings with respect to the services provided by the Advisor and the Subadvisor to the fund, including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisor with respect to the fund. The Board also considered the nature, quality, and extent of non-advisory services, if any, to be provided to the fund by the Advisor's affiliates, including distribution services.
Throughout the process, the Board asked questions of and requested additional information from management. The Board is assisted by counsel for the Trust and the Independent Trustees are also separately assisted by independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements and discussed the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement with respect to the fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets, and the industry) and does not treat any single factor as determinative, and each Trustee may attribute different weights to different factors. The Board's conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board's ongoing regular review of fund performance and operations throughout the year.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the fund, the Board reviewed information provided by the Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor's compliance and regulatory history, including its Form ADV. The Board also noted that on a regular basis it receives and reviews information from the Trust's Chief Compliance Officer (CCO) regarding the fund's compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board also considered the Advisor's risk management processes. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the fund, including, but not limited to, general supervision of and coordination of the services provided by the Subadvisor, and is also responsible for monitoring and reviewing the activities of the Subadvisor and other third-party service providers.
In considering the nature, extent, and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor's management and the quality of the performance of the Advisor's duties, through Board meetings, discussions and reports during the preceding year and through each Trustee's experience as a Trustee of the Trust and of the other trusts in the John Hancock group of funds complex (the John Hancock Fund Complex).
In the course of their deliberations regarding the Advisory Agreement, the Board considered, among other things:
(a) | the skills and competency with which the Advisor has in the past managed the Trust's affairs and its subadvisory relationship, the Advisor's oversight and monitoring of the Subadvisor's investment performance and compliance programs, such as the Subadvisor's compliance with fund policies and objectives, review of brokerage matters, including with respect to trade allocation and best execution and the Advisor's timeliness in responding to performance issues; | |
(b) | the background, qualifications and skills of the Advisor's personnel; | |
(c) | the Advisor's compliance policies and procedures and its responsiveness to regulatory changes and mutual fund industry developments; | |
(d) | the Advisor's administrative capabilities, including its ability to supervise the other service providers for the fund; | |
(e) | the financial condition of the Advisor and whether it has the financial wherewithal to provide a high level and quality of services to the fund; and | |
(f) | the Advisor's reputation and experience in serving as an investment advisor to the Trust and the benefit to shareholders of investing in funds that are part of a family of funds offering a variety of investments. |
The Board concluded that the Advisor may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the fund.
Investment performance. In considering the fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the fund's performance results. In connection with the consideration of the Advisory Agreement, the Board:
(a) | reviewed information prepared by management regarding the fund's performance; | |
(b) | considered the comparative performance of an applicable benchmark index; | |
(c) | considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; and | |
(d) | took into account the Advisor's analysis of the fund's performance and its plans and recommendations regarding the Trust's subadvisory arrangements generally. |
The Board noted that the fund underperformed its benchmark index for the one- and three-year periods ended December 31, 2015, and outperformed its benchmark index for the five-year period ended December 31, 2015. The Board noted that the
fund outperformed its peer group average for the one-, three- and five-year periods ended December 31, 2015. The Board took into account management's discussion of the fund's performance, including the favorable performance relative to the benchmark index for the five-year period and the favorable performance relative to the peer group for the one-, three-, and five-year periods. The Board concluded that the fund's performance has generally been in line with or outperformed the historical performance of comparable funds.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of mutual fund data, including, among other data, the fund's contractual and net management fees (and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the fund. The Board considered the fund's ranking within a smaller group of peer funds chosen by the independent third-party provider, as well as the fund's ranking within a broader group of funds. In comparing the fund's contractual and net management fees to those of comparable funds, the Board noted that such fees include both advisory and administrative costs. The Board noted that net management fees for the fund are higher than the peer group median and that total expenses for the fund are equal to the peer group median.
The Board took into account management's discussion of the fund's expenses. The Board also took into account management's discussion with respect to the advisory/subadvisory fee structure, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee. The Board also noted that the Advisor pays the subadvisory fee, and that such fees are negotiated at arm's length with respect to the Subadvisor. In addition, the Board took into account that management had agreed to implement an overall fee waiver across the complex, including the fund, which is discussed further below. The Board also noted actions taken over the past several years to reduce the fund's operating expenses. The Board also noted that, in addition, the Advisor is currently waiving fees and/or reimbursing expenses with respect to the fund. The Board reviewed information provided by the Advisor concerning the investment advisory fee charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the John Hancock Fund Complex) having similar investment mandates, if any. The Board considered any differences between the Advisor's and Subadvisor's services to the fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee paid with respect to the fund is reasonable.
Profitability/indirect benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor's relationship with the Trust, the Board:
(a) | reviewed financial information of the Advisor; | |||||||
(b) | reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to the fund; | |||||||
(c) | received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole; | |||||||
(d) | received information with respect to the Advisor's allocation methodologies used in preparing the profitability data; | |||||||
(e) | considered that the John Hancock insurance companies that are affiliates of the Advisor, as shareholders of the Trust directly or through their separate accounts, receive certain tax credits or deductions relating to foreign taxes paid and dividends received by certain funds of the Trust and noted that these tax benefits, which are not available to participants in qualified retirement plans under applicable income tax law, are reflected in the profitability information reviewed by the Board; | |||||||
(f) | considered that the Advisor also provides administrative services to the fund on a cost basis pursuant to an administrative services agreement; | |||||||
(g) | noted that affiliates of the Advisor provide transfer agency services and distribution services to the fund, and that the fund's distributor also receives Rule 12b-1 payments to support distribution of the fund; | |||||||
(h) | noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the fund; |
(i) | noted that the subadvisory fee for the fund is paid by the Advisor and is negotiated at arm's length; and | |||||||
(j) | considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the fund and the entrepreneurial risk that it assumes as Advisor. |
Based upon its review, the Board concluded that the level of profitability, if any, of the Advisor and its affiliates from their relationship with the fund was reasonable and not excessive.
Economies of scale. In considering the extent to which economies of scale would be realized as the fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders, the Board:
(a) | considered that the Advisor has contractually agreed to waive a portion of its management fee for certain funds of the John Hancock Fund Complex, including the fund (the participating portfolios) or otherwise reimburse the expenses of the participating portfolios (the reimbursement). 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; | |
(b) | the Board also took into account management's discussion of the fund's advisory fee structure; and | |
(c) | the Board also considered the effect of the fund's growth in size on its performance and fees. The Board also noted that if the fund's assets increase over time, the fund may realize other economies of scale. |
Approval of Subadvisory Agreement
In making its determination with respect to approval of the Subadvisory Agreement, the Board reviewed:
(1) | information relating to the Subadvisor's business, including current subadvisory services to the Trust (and other funds in the John Hancock Fund Complex); | |
(2) | the historical and current performance of the fund and comparative performance information relating to an applicable benchmark index and comparable funds; | |
(3) | the subadvisory fee for the fund and to the extent available, comparable fee information prepared by an independent third party provider of fund data; and | |
(4) | information relating to the nature and scope of any material relationships and their significance to the Trust's Advisor and Subadvisor. |
Nature, extent, and quality of services. With respect to the services provided by the Subadvisor, the Board received information provided to the Board by the Subadvisor, including the Subadvisor's Form ADV, as well as took into account information presented throughout the past year. The Board considered the Subadvisor's current level of staffing and its overall resources, as well as received information relating to the Subadvisor's compensation program. The Board reviewed the Subadvisor's history and investment experience, as well as information regarding the qualifications, background, and responsibilities of the Subadvisor's investment and compliance personnel who provide services to the fund. The Board also considered, among other things, the Subadvisor's compliance program and any disciplinary history. The Board also considered the Subadvisor's risk assessment and monitoring process. The Board reviewed the Subadvisor's regulatory history, including whether it was involved in any regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular, periodic reviews of the Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust's CCO and his staff conduct regular, periodic compliance reviews with the Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of the Subadvisor and procedures reasonably designed to assure compliance with the federal securities laws. The Board also took into account the financial condition of the Subadvisor.
The Board considered the Subadvisor's investment process and philosophy. The Board took into account that the Subadvisor's responsibilities include the development and maintenance of an investment program for the fund that is consistent with the fund's investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services. The Board also received information with respect to the Subadvisor's brokerage policies and practices, including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the fund, the Board noted that the fees under the Subadvisory Agreement are paid by the Advisor and not the fund.
The Board also relied on the ability of the Advisor to negotiate the Subadvisory Agreement with the Subadvisor, which is not affiliated with the Advisor, and the fees thereunder at arm's length. As a result, the costs of the services to be provided and the profits to be realized by the Subadvisor from its relationship with the Trust were not a material factor in the Board's consideration of the Subadvisory Agreement.
The Board also received information regarding the nature and scope (including their significance to the Advisor and its affiliates and to the Subadvisor) of any material relationships with respect to the Subadvisor, which include arrangements in which the Subadvisor or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreement.
In addition, the Board considered other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor's relationship with the fund, such as the opportunity to provide advisory services to additional funds in the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays a subadvisory fee to the Subadvisor. As noted above, the Board also considered the fund's subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the fund as included in the report prepared by the independent third party provider of fund data, to the extent available. The Board noted that the limited size of the Lipper peer group was not sufficient for comparative purposes. The Board also took into account the subadvisory fees paid by the Advisor to the Subadvisor with respect to the fund and compared them to fees charged by the Subadvisor to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered the fund's performance as compared to the fund's peer group and the benchmark index and noted that the Board reviews information about the fund's performance results at its regularly scheduled meetings. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisor. The Board was mindful of the Advisor's focus on the Subadvisor's performance. The Board also noted the Subadvisor's long-term performance record for similar accounts, as applicable.
The Board's decision to approve the Subadvisory Agreement was based on a number of determinations, including the following:
(1) | the Subadvisor has extensive experience and demonstrated skills as a manager; | |||||||
(2) | the performance of the fund has generally been in line with or outperformed the historical performance of comparable funds; | |||||||
(3) | the subadvisory fee is reasonable in relation to the level and quality of services being provided; and | |||||||
(4) | noted that the subadvisory fees are paid by the Advisor not the fund. |
Based on the Board's evaluation of all factors that the Board deemed to be material, including those factors described above, the Board, including the Independent Trustees, concluded that renewal of the Advisory Agreement and the Subadvisory Agreement would be in the best interest of the fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreement for an additional one-year period.
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 |
*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 Small Cap Value Small Company Strategic Growth U.S. Global Leaders Growth U.S. 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 Focused Strategies 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 Retirement Living Portfolios Retirement Living II Portfolios EXCHANGE-TRADED FUNDS John Hancock Multifactor Consumer Discretionary ETF John Hancock Multifactor Consumer Staples ETF John Hancock Multifactor Energy ETF John Hancock Multifactor Financials ETF John Hancock Multifactor Healthcare ETF John Hancock Multifactor Industrials ETF John Hancock Multifactor Large Cap ETF John Hancock Multifactor Materials ETF John Hancock Multifactor Mid Cap ETF John Hancock Multifactor Technology ETF John Hancock Multifactor Utilities ETF | ENVIRONMENTAL, SOCIAL, AND GOVERNANCE FUNDS ESG All Cap Core ESG Large Cap Core CLOSED-END FUNDS Financial Opportunities Hedged Equity & Income Income Securities Trust Investors Trust Preferred Income Preferred Income II Preferred Income III Premium Dividend Tax-Advantaged Dividend Income Tax-Advantaged Global Shareholder Yield |
John Hancock Multifactor ETF shares are bought and sold at market price (not NAV), and are not individually redeemed
from the fund. Brokerage commissions will reduce returns.
John Hancock ETFs are distributed by Foreside Fund Services, LLC, and are subadvised by Dimensional Fund Advisors LP.
Foreside is not affiliated with John Hancock Funds, LLC or Dimensional Fund Advisors LP.
Dimensional Fund Advisors LP receives compensation from John Hancock in connection with licensing rights to the
John Hancock Dimensional indexes. Dimensional Fund Advisors LP does not sponsor, endorse, or sell, and makes no
representation as to the advisability of investing in, John Hancock Multifactor ETFs.
John Hancock 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. | ||
MF318209 | 320SA 8/16 10/16 |
ITEM 2. CODE OF ETHICS.
Not applicable at this time.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable at this time.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. SCHEDULE OF INVESTMENTS.
(a) | This schedule is included as part of the Report to shareholders filed under Item 1 of this form. |
(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.
Not applicable.
ITEM 11. CONTROLS AND PROCEDURES.
(a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The registrant maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in this Form N-CSR is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission. Such disclosure and procedures include controls and procedures designed to ensure that such information is accumulated and communicated to the registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
Within 90 days prior to the filing date of this Form N-CSR, the registrant had carried out an evaluation, under the supervision and with the participation of the registrant’s management, including the registrant’s principal executive officer and the registrant’s principal financial officer, of the effectiveness of the design and operation of the registrant’s disclosure controls and
procedures relating to information required to be disclosed on Form N-CSR. Based on such evaluation, the registrant’s principal executive officer and principal financial officer concluded that the registrant’s disclosure controls and procedures are operating effectively to ensure that:
(i) information required to be disclosed in this Form N-CSR is recorded, processed, summarized and reported within the periods specified in the rules and forms of the Securities and Exchange Commission, and
(ii) information is accumulated and communicated to the registrant’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
(b) CHANGE IN REGISTRANT’S INTERNAL CONTROL: Not applicable.
ITEM 12. EXHIBITS.
(a) The certification required by Rule 30a-2(a) under the 1940 Act.
(b) The certification required by Rule 30a-2(b) under the 1940 Act.
(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: | October 21, 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: | October 21, 2016 |
By: | /s/ Charles A. Rizzo |
Charles A. Rizzo | |
Chief Financial Officer | |
Date: | October 21, 2016 |