| July 12, 2019 | Abigail P. Hemnes abigail.hemnes@klgates.com T +1 617 951 9053 |
VIA EDGAR
Division of Investment Management
U.S. Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C. 02549
Attention: Sonny Oh
| Re: | John Hancock Investment Trust (the “Trust”) — File Nos. 002-10156, 811-00560 Registration Statement on Form N-1A |
Dear Mr. Oh:
On behalf of the Trust, we submit this letter in response to comments received by telephone on June 24, 2019, from the staff (“Staff”) of the Securities and Exchange Commission (the “SEC”) with respect to Post-effective Amendment No. 195 under the Securities Act of 1933, as amended, and Amendment No. 147 under the Investment Company Act of 1940, as amended (the “1940 Act”), to the Trust’s Registration Statement on Form N-1A, filed with the SEC on May 10, 2019, accession no. 001133228-19-003342 (the “Amendment”). The Amendment relates to the registration of Class A, Class C, Class I, Class R6, and Class NAV shares of John Hancock Diversified Macro Fund, a newly established series of the Trust (the “Fund”).
For convenience, we have set forth each comment below, followed by the Trust’s response. Unless otherwise stated, capitalized terms have the same meaning as in the Amendment.
Cover Page Comments
| 1. | Comment — Please include the exchange ticker symbol for each class of shares of the Fund on the front covers of the prospectuses and the Statement of Additional Information (the “SAI”). |
Response — The exchange ticker symbol of each class of shares of the Fund will be included on the front cover of the appropriate prospectus and the SAI when such class is offered to the general public.
K&L GATES LLP
State Street Financial Center One Lincoln Street Boston MA 02111
T +1 617 261 3100 F +1 617 261 3175 klgates.com
Prospectus Comments
| 2. | Comment — Under “Fund Summary — Fees and expenses,” if the Trust intends to designate Class I shares of the Fund as “Clean Shares” for purposes of the relief provided by the SEC staff in its no action letter to Capital Group (publicly available January 11, 2017) (“Capital Group”), please confirm that the conditions described in that letter have been satisfied. |
Response — The Trust notes that certain brokers may use Class I shares as “clean shares,” for purposes of the relief provided inCapital Group. Supplementally, the Trust confirms that the conditions described in that letter have been satisfied.
| 3. | Comment — Under “Fund Summary — Fees and expenses,” in the “Shareholder fees” table, please move the parenthetical disclosure regarding the Class A maximum deferred sales charge to a footnote. |
Response — The Trust believes that the placement of this disclosure is appropriate. Accordingly, the Trust respectfully declines to make any changes in response to this comment.
| 4. | Comment —Please provide for the staff’s review completed fee tables under “Fund summary — Fees and expenses.” |
Response — The fee tables for the Fund and the share classes described in the Amendment are included in Appendix A to this letter.
| 5. | Comment — Regarding the disclosure under “Fund summary — Expense example,” please disclose in the narrative introduction that the contractual waivers are reflected for only one year. Alternatively, please confirm that the expense examples reflect the effect of contractual fee waivers only for the periods described in the fee table. |
Response — The Trust confirms that the expense examples reflect the effect of contractual fee waivers only for the periods described in the fee table, as permitted by Item 3, Instruction 4(a). However, as Form N-1A does not require disclosure related to this approach, the Trust respectfully declines to make any changes in response to this comment:
| 6. | Comment — The Fund states under “Fund summary — Principal investment strategies” that the Fund’s strategies may incorporate a variety of models that generate “macro fundamental forecasts.” Please briefly explain what is meant by “macro fundamental forecasts.” |
Response — Supplementally, the Trust notes that the term “macro fundamental forecasts,” as it pertains to the Fund’s principal investment strategies, relates to the asset return forecasts estimated by the underlying models, which are determined by using a variety of fundamental, macro-oriented data points related to the macro economy, including such examples as gross domestic product, inflation, employment, and interest rates.
| 2 |
| 7. | Comment — With respect to investing in derivatives, please review the Fund’s principal investment strategies and principal risk disclosure to ensure the disclosure is not generic and fully describes how the Fund will use derivatives and the risks associated with this use. See the letter from Barry Miller of the Division of Investment Management of the SEC to the Investment Company Institute dated July 30, 2010 (the “Derivatives Disclosure Letter”). |
Response — The Trust confirms that it has reviewed the derivatives disclosure included in the Fund’s prospectus and has determined that it is consistent with the views set forth in theDerivatives Disclosure Letter.
| 8. | Comment — Please disclose that the investment adviser to the Subsidiary complies with provisions of the 1940 Act relating to investment advisory contracts (Section 15) as an investment adviser to the Fund under Section 2(a)(20) of the 1940 Act. |
Response — Supplementally, the Trust confirms that the Amendment includes this disclosure.
| 9. | Comment — Please disclose whether the Fund with the Subsidiary has received a private letter ruling from the Internal Revenue Service (“IRS”) stating that undistributed income derived from its Subsidiary is qualifying income. If the Fund has not received a private letter ruling, please disclose its basis for determining that such undistributed income is qualifying income, such as an opinion of counsel. |
Response — Supplementally, the Trust notes that it has not received a private letter ruling from the IRS stating that undistributed income derived from its Subsidiary is qualifying income. The Trust further notes that it is relying on an Opinion of Counsel as its basis for determining that such undistributed income is qualifying income, but that it believes such opinion is not necessary as Regulations recently issued by the IRS clarify that the annual net profit, if any, realized by such a subsidiary and imputed for income tax purposes to the Fund will constitute qualifying income whether or not the imputed income is distributed by the subsidiary to the Fund. The Trust further notes that the new Regulations remove the uncertainty that existed as a result of previously proposed regulations that provided a different conclusion. However, in response to the Staff’s comment, the Trust has replaced the “Tax risk” disclosure in the “Fund details” section under the heading “Principal risks of investing” with the following:
Tax Risk
In order for the fund to satisfy tax requirements applicable to regulated investment companies, the fund must derive at least 90% of its gross income each taxable year from certain qualifying sources of income. Commodity-related investments generally generate income that is not from a qualified source for purposes of meeting this 90% test. The rules regarding the extent to which income, if any, realized by a wholly owned non-U.S. subsidiary (such as the Subsidiary) of the fund and included in the fund’s annual income for U.S. federal income tax purposes, but that is not currently repatriated to the fund, will constitute qualifying income have been clarified by Regulations recently issued by the IRS. Those Regulations provide that the annual net profit, if any, realized by such a subsidiary
| 3 |
and imputed for income tax purposes to the fund will constitute qualifying income whether or not the imputed income is distributed by the subsidiary to the fund. The new Regulations remove the uncertainty that existed as a result of previously proposed regulations that provided a different conclusion. The tax treatment of commodity-related investments and income from the Subsidiary may be adversely affected by future legislation, Treasury Regulations and/or guidance issued by the IRS that could affect the character, timing and/or amount of the fund’s taxable income or any gains and distributions made by the fund.
| 10. | Comment — Please confirm that the financial statements of the Subsidiary will be consolidated with those of the Fund. |
Response — The Trust so confirms.
| 11. | Comment — Please confirm that: (1) the Subsidiary’s management fee, including any performance fee, will be included in the “Management fee” line item of the Fund’s “Annual fund operating expenses table” and that the Subsidiary’s expenses will be included in the “Other expenses” line item of the Fund’s “Annual fund operating expenses table;” (2) the Subsidiary and its board of directors will agree to designate an agent for service of process in the United States; and (3) the Subsidiary and its board of directors will agree to inspection by the Staff of the Subsidiary’s books and records, which will be maintained in accordance with Section 31 of the 1940 Act. |
Response — The Trust so confirms.
| 12. | Comment — Under “Fund summary — Principal risks,” please reorder the risks to appear in order of importance or highlight those risks that are most relevant to shareholders upfront.See Dalia Blass, Keynote Address - ICI Securities Law Developments Conference, October 25, 2018, available at: https://www.sec.gov/news/speech/speech-blass-102518#. |
Response — The Trust respectfully submits that the current order of the principal risks is in compliance with the requirements of Form N-1A, which does not require listing the principal risks of investing in a fund in any particular order. The Trust further notes that the alphabetical ordering convention of its “Principal risks” is consistent across the John Hancock complex. For these reasons, and in order to maintain consistency of disclosure complex-wide, the Trust respectfully declines to make this change.
| 13. | Comment — Under “Fund details — Principal investment strategies,” per Item 9(a) of Form N-1A, please state the investment objective of the Fund. |
Response —In response to the Staff’s comment, the Trust respectfully notes that General Instruction C.3.(a) to Form N-1A states that “[i]nformation that is included in response to Items 2 through 8 need not be repeated elsewhere in the prospectus.” As the Fund’s investment objective is stated in response to Item 2 in the Fund summary under the heading “Investment objective,” it need not be repeated in response to Item 9(a). Therefore, the Trust respectfully declines to make any changes in response to this comment.
| 4 |
| 14. | Comment — Under “Fund details — Principal risks,” please expand upon “Commodity risk.” |
Response — In response to the Staff’s comment, the Trust has revised the disclosure under the heading “Fund details - Commodity risk” as follows:
The market price of commodity investments may be volatile due to fluctuating demand, supply disruption, speculation, and other factors. Certain commodity investments may have no active trading market at times.The value of commodities investments will generally be affected by overall market movements and factors specific to a particular industry or commodity, which may include weather, embargoes, tariffs, and health, political, international and regulatory developments. Economic and other events (whether real or perceived) can reduce the demand for commodities, which may reduce market prices and cause the value of shares of the fund to fall. Exposure to commodities and commodities markets may subject the fund to greater volatility than investments in traditional securities. Certain types of commodities instruments (such as total return swaps and commodity-linked notes) are subject to the risk that the counterparty to the instrument will not perform or will be unable to perform in accordance with the terms of the instrument. To the extent commodity-related investments are held through the Subsidiary, the Subsidiary is not subject to U.S. laws (including securities laws) and their protections. The Subsidiary is subject to the laws of the Cayman Islands, a foreign jurisdiction, and may be affected by developments in that jurisdiction.
| 15. | Comment — Under “Fund details — Principal risks of investing,” please update the disclosure under the heading “Economic and market events risk” regarding China’s economic slowdown. In addition, if the Fund expects to invest in Chinese yuan, please include appropriate disclosure. |
Response — In response to the first portion of the Staff’s comment, the Trust notes that it monitors developments in the financial markets, both domestic and foreign, and periodically updates its related disclosures. Therefore, the Trust confirms the disclosure is accurate and reasonably current and respectfully declines to make any changes in response to this comment.
In response to the second portion of the Staff’s comment, the Trust supplementally notes that the Fund’s investment universe does not include the Chinese yuan as a traded foreign currency and that there is no plan to add this currency to the Fund’s principal investment strategies. Accordingly, the Trust does not believe that any disclosure changes are necessary in this regard.
| 16. | Comment — Under “Fund details — Principal risks of investing,” the Staff notes that there is disclosure regarding the risks of investing in emerging markets. Please confirm whether the Fund intends to invest in emerging markets as part of its principal investment strategies and, if so, please add corresponding disclosure to the principal investment strategies. If the Fund intends to invest in emerging markets, please also disclose how the Fund determines what constitutes an emerging market. |
| 5 |
Response —In response to the Staff’s comment, upon further review, the Trust has determined that the Fund’s investment universe does not have significant exposure to emerging markets and, therefore, has removed the emerging markets risk disclosure.
* * * * *
The Trust, on behalf of the Fund, intends to file definitive forms of prospectus and SAI that will reflect the above responses to the Staff’s comments. If you have any questions, please call me at (617) 951-9053.
| Sincerely, | ||||
| /s/ Abigail P. Hemnes | ||||
| Abigail P. Hemnes |
| cc: | Mara Moldwin, Assistant Secretary of the Trust |
| 6 |
Appendix A
Fee Schedules
Diversified Macro Fund – Class A, C, I and R6
Fees and expenses
This table describes the fees and expenses you may pay if you buy and hold shares of the fund. You may qualify for sales charge discounts on Class A shares if you and your family invest, or agree to invest in the future, at least $50,000 in the John Hancock family of funds. Intermediaries may have different policies and procedures regarding the availability of front-end sales charge waivers or contingent deferred sales charge (CDSC) waivers (See Appendix 1 - Intermediary sales charge waivers, which includes information about specific sales charge waivers applicable to the intermediaries identified therein). Although the fund does not impose any sales charges on Class I shares, you may pay commissions to your broker on your purchases and sales of Class I shares, which are not reflected in the table and example below. More information about these and other discounts is available from your financial representative and on pages 17 to 19 of this prospectus under “Sales charge reductions and waivers” or pages 84 to 87 of the fund’s Statement of Additional Information under “Sales Charges on Class A and Class C Shares.”
| Shareholder fees (%) (fees paid directly from your investment) | A | C | I | R6 |
| Maximum front-end sales charge (load) on purchases, as a % of purchase price | 5.00 | None | None | None |
| Maximum deferred sales charge (load) as a % of purchase or sale price, whichever is less | 1.00 (on certain purchases, including those of $1 million or more) | 1.00 | None | None |
| Small account fee (for fund account balances under $1,000) ($) | 20 | 20 | None | None |
| Annual fund operating expenses (%) (expenses that you pay each year as a percentage of the value of your investment) | A | C | I | R6 | ||||
| Management fee | 1.20 | 1.20 | 1.20 | 1.20 | ||||
| Distribution and service (Rule 12b-1) fees | 0.25 | 1.00 | 0.00 | 0.00 | ||||
| Total other expenses1 | 0.31 | 0.31 | 0.31 | 0.20 | ||||
| Total annual fund operating expenses | 1.76 | 2.51 | 1.51 | 1.40 | ||||
| Contractual expense reimbursement2 | -0.06 | -0.06 | -0.06 | -0.06 | ||||
| Total annual fund operating expenses after expense reimbursements | 1.70 | 2.45 | 1.45 | 1.34 |
| 1 | ”Other expenses” have been estimated for the fund’s first year of operations. |
| 2 | The advisor contractually agrees to reduce its management fee or, if necessary, make payment to the fund in an amount equal to the amount by which expenses of the fund exceed 1.33% of average daily net assets of the fund. For purposes of this agreement, “expenses of the fund” means all fund expenses, excluding (a) taxes; (b) brokerage commissions; (c) interest expense; (d) litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the fund’s business; (e) class-specific expenses; (f) borrowing costs; (g) prime brokerage fees; (h) acquired fund fees and expenses paid indirectly; and (i) short dividend expense. This agreement expires on February 28, 2021, 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. The advisor also contractually agrees to waive a portion of its management fee and/or reimburse expenses for the fund and certain other John Hancock funds according to an asset level breakpoint schedule that is based on the aggregate net assets of all the funds participating in the waiver or reimbursement. This waiver is allocated proportionally among the participating funds. This agreement expires on July 31, 2021, 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. |
Expense example
This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. Please see below a hypothetical example showing the expenses of a $10,000 investment for the time
| 7 |
periods indicated and then, except as shown below, assuming you sell all of your shares at the end of those periods. The example assumes a 5% average annual return and that fund expenses will not change over the periods. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
| Expenses ($) | A | C | I | R6 | ||||||
| Shares | Sold | Not Sold | ||||||||
| 1 year | 664 | 348 | 248 | 148 | 136 | |||||
| 3 years | 1,021 | 776 | 776 | 471 | 437 | |||||
Diversified Macro Fund – Class NAV
Fees and expenses
This table describes the fees and expenses you may pay if you buy and hold shares of the fund.
| Shareholder fees (%) (fees paid directly from your investment) | NAV |
| Maximum front-end sales charge (load) | None |
| Maximum deferred sales charge (load) | None |
| Annual fund operating expenses (%) (expenses that you pay each year as a percentage of the value of your investment) | NAV | |
| Management fee | 1.20 | |
| Other expenses1 | 0.19 | |
| Total annual fund operating expenses | 1.39 | |
| Contractual expense reimbursement2 | -0.06 | |
| Total annual fund operating expenses after expense reimbursements | 1.33 |
| 1 | ”Other expenses” have been estimated for the fund’s first year of operations. |
| 2 | The advisor contractually agrees to reduce its management fee or, if necessary, make payment to the fund in an amount equal to the amount by which expenses of the fund exceed 1.33% of average daily net assets of the fund. For purposes of this agreement, “expenses of the fund” means all fund expenses, excluding (a) taxes, (b) brokerage commissions, (c) interest expense, (d) litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the fund’s business, (e) class-specific expenses, (f) acquired fund fees and expenses paid indirectly, (g) borrowing costs, (h) prime brokerage fees, and (i) short dividend expense. This agreement expires on February 28, 2021, 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. The advisor also contractually agrees to waive a portion of its management fee and/or reimburse expenses for the fund and certain other John Hancock funds according to an asset level breakpoint schedule that is based on the aggregate net assets of all the funds participating in the waiver or reimbursement. This waiver is allocated proportionally among the participating funds. This agreement expires on July 31, 2021, 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. |
Expense example
This example is intended to help you compare the cost of investing in the fund with the cost of investing in other mutual funds. Please see below a hypothetical example showing the expenses of a $10,000 investment for the time periods indicated and then assuming you sell all of your shares at the end of those periods. The example assumes a 5% average annual return and that fund expenses will not change over the periods. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:
| Expenses ($) | NAV | |
| 1 year | 135 | |
| 3 years | 434 |
| 8 |