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As filed with the U.S. Securities and Exchange Commission on June 28, 2024
File No. [ ]
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-14
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 | ☒ | |
PRE-EFFECTIVE AMENDMENT NO. | ☐ | |
POST-EFFECTIVE AMENDMENT NO. | ☐ |
JOHN HANCOCK INVESTMENT TRUST
(Exact Name of Registrant as Specified in Charter)
200 Berkeley Street
Boston, Massachusetts 02116
(Address of Principal Executive Offices)
800-225-5291
(Registrant’s Area Code and Telephone Number)
Christopher Sechler, Esq.
200 Berkeley Street
Boston, Massachusetts 02116
(Name and Address of Agent for Service)
Copies to:
Christopher P. Harvey, Esq.
Stephanie A. Capistron, Esq.
Dechert LLP
One International Place, 40th Floor
100 Oliver Street
Boston, MA 02110-2605
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after the effective date of this Registration Statement.
TITLE OF SECURITIES BEING REGISTERED:
Shares of beneficial interest of Registrant
Calculation of Registration Fee under the Securities Act of 1933: No filing fee is due because of reliance on Section 24(f) of the Investment Company Act of 1940, which permits registration of an indefinite number of securities.
It is proposed that this filing will become effective on July 29, 2024 pursuant to Rule 488 under the Securities Act of 1933, as amended.
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JOHN HANCOCK INVESTMENT TRUST
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement contains the following papers and documents:
Cover Sheet
Contents of Registration Statement
Notice of Special Meeting to Shareholders
Part A – Proxy Statement/Prospectus
Part B – Statement of Additional Information
Part C – Other Information
Signature Pages
Exhibits
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The RBB Fund, Inc.
Boston Partners Global Long/Short Fund
July 29, 2024
Dear Shareholder:
I am writing to ask for your support for an important opportunity involving your investment in Boston Partners Global Long/Short Fund (the “Boston Partners Fund”), a series of The RBB Fund, Inc.
Boston Partners Global Investors, Inc. (“Boston Partners”) has entered into an agreement with John Hancock Investment Management LLC (“JHIM”) that proposes to reorganize the Boston Partners Fund into a new mutual fund with the same investment objective and substantially similar policies and restrictions, but offered and managed through the John Hancock organization (the “Reorganization”). The name of the acquiring fund is John Hancock Disciplined Value Global Long/Short Fund (the “Acquiring Fund”), a newly organized series of John Hancock Investment Trust.
After the reorganization, or “fund adoption” as it is sometimes called, JHIM would be the investment advisor to the Acquiring Fund and Boston Partners would serve as the subadvisor with responsibility for the investment and reinvestment of the Acquiring Fund’s assets, subject to JHIM oversight, using a substantially similar investment strategy to the one that Boston Partners currently uses for the Boston Partners Fund. JHIM or its affiliates will assist in all other operations of the Acquiring Fund, including the distribution of Acquiring Fund shares and provision of transfer agency and administrative services. The Acquiring Fund’s principal investment strategies and principal risks are substantially similar to those of the Boston Partners Fund and are explained in detail in the enclosed proxy materials.
Boston Partners’ Motivation for Agreeing to the Fund Adoption
John Hancock’s overall distribution strategy and capabilities extend to both institutional and retail investors, with an especially strong emphasis on and success through retail distribution channels (such as individual investors and broker-dealers). Boston Partners expects that John Hancock’s robust retail distribution franchise may offer a better chance of introducing investors to the international management capability of Boston Partners than if Boston Partners continued its current path with the Boston Partners Fund. In short, Boston Partners views the proposed Reorganization as potentially beneficial to Boston Partners, to John Hancock, and, most importantly, to the shareholders of the Boston Partners Fund.
The Reorganization Offers You Potential Advantages
Here are the most important potential advantages we see:
You will become a shareholder in a newly created fund that will benefit from the experience of John Hancock in the distribution of mutual funds through a broader range of channels than those currently available to the Boston Partners Fund. A broader range of channels can result in a greater potential to increase asset size and achieve important potential long-term economies of scale. Although not guaranteed, John Hancock has adopted several other mutual funds and most have grown considerably over their original size.
In addition, assuming the Acquiring Fund realizes its potential for growth, certain administrative costs would be spread across the Acquiring Fund’s larger asset base, which could increase its overall efficiency, with the potential to lower costs further.
Moreover, as a shareholder of the Acquiring Fund, you will have access to the additional investment options and shareholder services offered by the John Hancock family of funds, while pursuing substantially the same investment goals with Boston Partners as the subadvisor of the Acquiring Fund.
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Holders of Institutional Class shares of the Boston Partners Fund will receive Class I shares of the Acquiring Fund, and holders of Investor Class shares of the Boston Partners Fund will receive Class A shares of the Acquiring Fund. The management fee for the Acquiring Fund will be less than the management fee for the Boston Partners Fund at all asset levels. In addition, as a result of a contractual limitation of expenses agreed to by JHIM in effect through February 28, 2026, the maximum net annual operating expenses of Class I and Class A shares of the Acquiring Fund are expected to be lower than the current annual net operating expenses of the Boston Partners Fund’s Institutional Class and Investor Class shares, respectively.
The proposed Reorganization is expected to have no negative tax impact on shareholders.
What Will Not Change as a Result of the Proposed Reorganization
Boston Partners will remain an independent investment advisor and will continue to serve in such capacity for its own funds, the Boston Partners funds, which are also separate series of The RBB Fund, Inc. (As of May 31, 2024, the combined total assets of the Boston Partners funds were approximately $3.34 million.) None of the other Boston Partners funds are directly affected by the Reorganization.
We Need Your Vote of Approval.
After careful consideration and for the reasons described in these materials, the Board of Directors of The RBB Fund, Inc. have unanimously approved the Reorganization and shareholder approval is required to complete the Reorganization. The enclosed combined proxy statement and prospectus contains a further explanation and important details about the reorganization, which I strongly encourage you to read before voting. Please note that if timely approved by the shareholders, the reorganization is scheduled to take place at the close of business on or about September 27, 2024.
Your Vote Matters!
You are being asked to approve these changes. No matter how large or small your fund holdings, your vote is extremely important. After you review the proxy materials, please submit your vote promptly to help us avoid the need for additional mailings. Please return your proxy card in the postage-paid envelope as soon as possible. You also may vote over the Internet or by telephone. Please follow the instructions on the enclosed proxy card to use these methods of voting. I am confident that the proposed Reorganization will help Boston Partners better serve all of the Boston Partners Fund’s shareholders.
If you have questions, please call 1-888-972-8696 between 9:00 a.m. and 10:00 p.m. (Central Time) Monday through Friday. I thank you for your time and your prompt vote on this matter.
Sincerely, |
Steven Plump |
President |
The RBB Fund, Inc. |
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Boston Partners Global Long/Short Fund
(the “Boston Partners Fund”)
a series of The RBB Fund, Inc.
615 East Michigan Street
Milwaukee, Wisconsin 53202-5207
Notice of Special Meeting of Shareholders
Scheduled for September 17, 2024
This is the formal agenda for the Boston Partners Fund’s shareholder meeting. It describes what matters will be voted on and the time and place of the meeting, in case you want to attend in person.
To the shareholders of the Boston Partners Fund:
A shareholder meeting of the Boston Partners Fund will be held at the offices of U.S. Bank Global Fund Services, 615 East Michigan Street, 3rd Floor, Milwaukee, Wisconsin 53202, on September 17, 2024, at 10:00 a.m., Eastern Time, to consider the following:
1. | A proposal to approve an Agreement and Plan of Reorganization between The RBB Fund, Inc., on behalf of the Boston Partners Fund, and John Hancock Investment Trust, on behalf of John Hancock Disciplined Value Global Long/Short Fund, a new series of John Hancock Investment Trust (the “Acquiring Fund”). Under this agreement, the Boston Partners Fund would transfer all of its assets to the Acquiring Fund in exchange for corresponding shares of the Acquiring Fund. These shares would be distributed, as described in the accompanying proxy statement and prospectus, proportionately to you and the other shareholders of the Boston Partners Fund, in redemption of and in exchange for your shares of the Boston Partners Fund. The Acquiring Fund would also assume all of the Boston Partners Fund’s known liabilities. The Board of Directors of The RBB Fund, Inc. recommends that you vote FOR this proposal. |
2. | Any other business that may properly come before the meeting. |
Shareholders of record as of the close of business on July 12, 2024 are entitled to vote at the meeting and any related adjournments or postponements and follow-up meetings.
Whether or not you expect to attend the meeting, please complete and return the enclosed proxy card. If shareholders do not return their proxies in sufficient numbers, additional shareholder solicitation may be required.
Sincerely, |
Steven Plump |
President |
The RBB Fund, Inc. |
July 29, 2024
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PRELIMINARY COMBINED PROXY STATEMENT AND PROSPECTUS
SUBJECT TO COMPLETION
The information in this combined proxy statement and prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This combined proxy statement and prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
PROXY STATEMENT of
Boston Partners Global Long/Short Fund (the “Acquired Fund”)
a series of The RBB Fund, Inc. (the “Company”)
PROSPECTUS for
John Hancock Disciplined Value Global Long/Short Fund
(the “Acquiring Fund”)
a series of John Hancock Investment Trust
(the “Trust”)
The address of the Acquired Fund is 615 East Michigan Street, Milwaukee, Wisconsin 53202-5207, and the address of the Acquiring Fund is 200 Berkeley Street, Boston, Massachusetts 02216. The Acquired Fund and the Acquiring Fund are together referred to as the “Funds.”
* * * * * *
This proxy statement and prospectus, which you should read carefully, sets forth concisely the information about the proposed reorganization and the Acquiring Fund that you should know before voting with respect to the proposed reorganization and investing in the Acquiring Fund. Please read it carefully and retain it for future reference.
This proxy statement and prospectus constitutes a proxy statement for the Acquired Fund and also constitutes a prospectus of the Acquiring Fund, filed by the Trust with the Securities and Exchange Commission (the “SEC”) as part of the Trust’s Registration Statement on Form N-14 (the “Registration Statement”). This proxy statement and prospectus, which constitutes part of a Registration Statement filed by the Trust with the SEC under the Securities Act of 1933, as amended (the “Securities Act”), does not include certain information contained elsewhere in such Registration Statement. Reference is hereby made to the Registration Statement and to the exhibits and amendments thereto for further information with respect to the Acquiring Fund and the shares offered. Statements contained herein concerning the provisions of such documents are summaries of such documents.
Acquired Fund | Acquiring Fund | Shareholders Entitled to Vote | ||||
Proposal | Boston Partners Global Long/Short Fund | John Hancock Disciplined Value Global Long/Short Fund | Boston Partners Global Long/Short Fund Shareholders of Record as of July 12, 2024 |
How the Reorganization Will Work
• | The Acquired Fund will transfer all of its assets to the Acquiring Fund. The Acquiring Fund will assume all of the Acquired Fund’s known liabilities. |
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• | The Acquiring Fund will be managed by the same portfolio managers, plus one additional portfolio manager, as the Acquired Fund, using substantially similar investment strategies and portfolio management techniques. |
• | The Acquiring Fund will issue Class I shares to the Acquired Fund in an amount equal to the value of the Acquired Fund’s net assets attributable to its Institutional Class shares. These shares will be distributed to the Acquired Fund’s Institutional Class shareholders in proportion to their holdings on the reorganization date. |
• | The Acquiring Fund will issue Class A shares to the Acquired Fund in an amount equal to the value of the Acquired Fund’s net assets attributable to its Investor Class shares. These shares will be distributed to the Acquired Fund’s Investor Class shareholders in proportion to their holdings on the reorganization date. |
• | The Acquired Fund will be terminated and shareholders of the Acquired Fund will become shareholders of the Acquiring Fund. |
• | For U.S. federal income tax purposes, the reorganization is intended to be a tax-free reorganization and not to result in income, gain or loss being recognized by the Acquired Fund, the Acquiring Fund or the shareholders of the Acquired Fund. |
Rationale for the Reorganization
The reorganization is intended to reorganize the Acquired Fund into a newly organized fund advised by the Acquiring Fund’s advisor, John Hancock Investment Management LLC (“JHIM”), and subadvised by the Acquired Fund’s advisor, Boston Partners Global Investors, Inc. (“Boston Partners”). Like the Acquired Fund, the Acquiring Fund seeks long-term capital growth, and each Fund utilizes substantially similar principal investment strategies.
Immediately following the reorganization of the Acquired Fund into the Acquiring Fund, as a result of a contractual limitation of expenses agreed to by JHIM, the maximum net annual operating expenses of Class I and Class A shares of the Acquiring Fund are expected to be lower than the current annual net operating expenses of the Acquired Fund’s Institutional Class and Investor Class shares, respectively, until February 28, 2026. In addition, the Acquiring Fund may potentially realize lower long-term per-share expenses resulting from economies of scale if the Acquiring Fund’s assets grow.
Boston Partners believes that the Acquiring Fund will be in a better position to grow assets than the Acquired Fund would be as currently positioned. The Acquiring Fund is expected to benefit from the experience of the John Hancock fund complex in the distribution of mutual funds through a broader range of distribution channels and additional share classes than currently available to the Acquired Fund. The Acquiring Fund may be better positioned in the market to increase asset size and achieve additional economies of scale, which may enable the Acquiring Fund to benefit from the ability to achieve better net prices on securities trades and spread fixed expenses in a manner that may contribute to achieving a lower expense ratio in the long-term than the Acquired Fund would be expected to achieve as currently constituted.
JHIM will pay all reasonable costs and expenses, including legal counsel fees and proxy solicitation costs, if any, of Boston Partners, the Company, and the Acquired Fund incurred in connection with the reorganization up to a maximum of $200,000. Boston Partners will be responsible for their own costs and expenses, as well as the cost and expenses of the Company and the Acquired Fund, incurred in connection with the reorganization that, collectively, exceed $200,000.
Shares of the Acquiring Fund are not deposits or obligations of, or guaranteed or endorsed by, any bank or other depository institution. These shares are not federally insured by the Federal Deposit Insurance Corporation, the U.S. Federal Reserve Board or any other government agency.
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Shares of the Acquiring Fund have not been approved or disapproved by the SEC. The SEC has not passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Where to Get More Information
• |
• | The Statement of Additional Information of the Acquired Fund dated May 3, 2024 |
• | The Annual Report of the Acquired Fund for the fiscal year ended August 31, 2023 |
• | The Semiannual Report of the Acquired Fund for the six months ended February 29, 2024 |
• | The statement of additional information (“SAI”) dated July 29, 2024 that relates to this proxy statement and prospectus and the reorganization, and contains additional information about the Acquired Fund and the Acquiring Fund |
These documents and additional information about the Acquired Fund are on file with the SEC.
These documents are incorporated by reference into (and therefore legally part of) this proxy statement and prospectus.
The Acquiring Fund is a newly organized series and currently has no assets or liabilities. The Acquiring Fund was created specifically in connection with the Agreement and Plan of Reorganization for the purpose of acquiring the assets and existing liabilities of the Acquired Fund and will not commence operations until the date of the reorganization. The Acquiring Fund does not have any annual or semi-annual reports to date.
You may request a free copy of the SAI relating to this proxy statement and prospectus without charge by writing to the Acquiring Fund at John Hancock Signature Services, Inc., P.O. Box 219909, Kansas City, MO 64121-9909, or by calling toll-free at 888-972-8696.
You may obtain copies of the Acquired Fund’s prospectus, related statement of additional information, and/or annual or semi-annual reports of the Acquired Fund without charge by contacting the Company at 1-888-261-4073 or on the EDGAR Database by visiting the SEC’s website at http://www.sec.gov.
To ask questions about this proxy statement and prospectus, call our toll-free telephone number: 888-972-8696.
The date of this proxy statement and prospectus is July 29, 2024.
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PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION | 29 | |||
31 | ||||
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36 | ||||
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A-1 | ||||
B-1 | ||||
APPENDIX C - ADDITIONAL INFORMATION ABOUT THE ACQUIRING FUND | C-1 |
This proxy statement and prospectus is being used by the Board of Directors of the Company (the “Company Board” and each member, a “Director”) to solicit proxies to be voted at a special meeting of the Acquired Fund’s shareholders (the “Special Meeting”). This Special Meeting will be held at 615 East Michigan Street, Milwaukee, Wisconsin 53202, on September 17, 2024, at 10:00 a.m., Eastern Time. The purpose of the Special Meeting is to consider the proposal to approve the Agreement and Plan of Reorganization (the “Agreement”) providing for the reorganization of the Acquired Fund into the Acquiring Fund (the “Reorganization”). This proxy statement and prospectus is being mailed to the Acquired Fund’s shareholders on or around August 6, 2024.
The proxy statement and prospectus includes information that is specific to this proposal, including summary comparisons. You should read the entire proxy statement and prospectus carefully, including Appendix A, which contains the form of Agreement, because it contains details that are not in the summary.
Who is Eligible to Vote?
Shareholders of record on July 12, 2024, are entitled to attend and vote at the Special Meeting or any adjourned or postponed meeting. Each share is entitled to one vote. Shares represented by properly executed proxies, unless revoked before or at the Special Meeting, will be voted according to shareholders’ instructions. If you sign a proxy but do not fill in a vote, your shares will be voted to approve the Agreement. If any other business comes before the Special Meeting, your shares will be voted at the discretion of the persons named as proxies.
Approval of Agreement and Plan of Reorganization Between the Acquired Fund and the Acquiring Fund
A proposal to approve an Agreement and Plan of Reorganization between the Acquired Fund and the Acquiring Fund. Under this Agreement, the Acquired Fund would transfer all of its assets to the Acquiring Fund in exchange for Class I and Class A shares of the Acquiring Fund, as described in the Agreement. These shares would be distributed proportionately to the shareholders of the Acquired Fund. The Acquiring Fund would also assume the Acquired Fund’s known liabilities. The Company Board recommends that shareholders vote FOR this proposal.
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SUMMARY COMPARISONS OF THE FUNDS
Comparison of the Funds’ Organization, Investment Objectives, Strategies, and Policies
As the above table below indicates, both Funds have the same investment objectives and substantially similar policies. The Acquiring Fund will be managed by the same portfolio managers, plus one additional portfolio manager, as the Acquired Fund, using substantially similar investment strategies and portfolio management techniques.
There are certain differences between the principal investment strategies of the Acquired Fund and the Acquiring Fund, however, these differences are not anticipated to result in material differences in the way in which the Acquired Fund is currently managed compared to how the Acquiring Fund will be managed. These differences include, among other differences, that the Acquiring Fund has adopted a policy to invest at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of equity and equity-related securities that meet the fund’s value criteria. The Acquired Fund has not adopted an 80% investment policy but has been managed in a manner consistent with the Acquiring Fund’s 80% investment policy. In addition, the disclosure for the Acquiring Fund explicitly notes that Boston Partners may consider environmental, social, and/or governance (“ESG”) factors, alongside other relevant factors, as part of its investment process in managing the Acquiring Fund whereas consideration of ESG factors is not explicitly described as part of the investment process in the Acquired Fund’s prospectus in light of its overall materiality to the investment process.
Acquired Fund | Acquiring Fund | |
Approximate Net Assets of Each Fund (as of May 31, 2024) | ||
$169,752,855.11 | $0 | |
Investment Advisor | ||
Boston Partners Global Investors, Inc. | John Hancock Investment Management LLC | |
Investment Subadvisor | ||
N/A | Boston Partners Global Investors, Inc. | |
Portfolio Managers | ||
Christopher K. Hart, CFA
• Portfolio Manager
• Has managed the Acquired Fund since 2013
• Joined Boston Partners in 2002 | ||
Joshua M. Jones, CFA
• Portfolio Manager
• Has managed the Acquired Fund since 2013
• Joined Boston Partners in 2006 | ||
Soyoun Song
• Portfolio Manager
• Will manage the Acquiring Fund upon its inception
• Joined Boston Partners in 2019
• Began business career in 2005 |
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Acquired Fund | Acquiring Fund | |
Investment Objective | ||
Each Fund seeks long-term growth of capital. | ||
Principal Investment Strategies | ||
The Acquired Fund invests in long positions in stocks identified by Boston Partners as undervalued and takes short positions in stocks that Boston Partners has identified as overvalued. The cash proceeds from short sales will be invested in short-term cash instruments to produce a return on such proceeds just below the federal funds rate. Short sales are considered speculative transactions and a form of leverage. The Acquired Fund invests, both long and short, in securities issued by U.S. and non-U.S. companies of any capitalization size.
With a long position, the Acquired Fund purchases a stock outright; with a short position, the Acquired Fund sells a security that it does not own and must borrow to meet its settlement obligations. The Acquired Fund may invest in securities of companies operating for three years or less (“unseasoned issuers”). Boston Partners will determine the size of each long or short position by analyzing the tradeoff between the attractiveness of each position and its impact on the risk of the overall portfolio. Boston Partners examines various factors in determining the value characteristics of such issuers including price-to-book value ratios and price-to-earnings ratios. These value characteristics are examined in the context of the issuer’s operating and financial fundamentals, including return on equity, earnings growth and cash flow. Boston Partners selects securities for the Acquired Fund based on a continuous study of trends in industries and companies, earnings power and growth and other investment criteria.
The Acquired Fund may invest in all types of equity and equity-related securities, including without limitation exchange-traded and over-the-counter common and preferred stocks, warrants, options, rights, convertible securities, sponsored and unsponsored depositary receipts and shares, trust certificates, limited partnership interests, shares of other investment companies (including exchanged-traded funds (“ETFs”)), real estate investment trusts (“REITs”) and equity participation. An equity participation is a type of loan that gives the lender a portion of equity ownership in a property, in addition to principal and interest payments. A convertible security is a bond, debenture, note, preferred stock or other security that may be converted into or exchanged for a prescribed amount of common stock of the same or a different issuer within a particular period of time at a specified price or formula. | Under normal circumstances, the Acquiring Fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of equity and equity-related securities that meet the Acquiring Fund’s value criteria, including without limitation exchange-traded and over-the-counter common and preferred stocks, warrants, options, rights, convertible securities, sponsored and unsponsored depositary receipts and shares, trust certificates, limited partnership interests, shares of other investment companies (including ETFs), and REITs. A convertible security is a bond, debenture, note, preferred stock or other security that may be converted into or exchanged for a prescribed amount of common stock of the same or a different issuer within a particular period of time at a specified price or formula. The Acquiring Fund invests, both long and short, in securities issued by U.S. and non-U.S. companies of any capitalization size.
The Acquiring Fund defines non-U.S. companies as companies (i) that are organized under the laws of a foreign country; (ii) whose principal trading market is in a foreign country; or (iii) that have a majority of their assets, or that derive a significant portion of their revenue or profits from businesses, investments or sales, outside of the United States. The Acquiring Fund principally will be invested in issuers located in countries with developed securities markets, but may also invest in issuers located in emerging markets. The Acquiring Fund will allocate its assets among various regions and countries, including the United States (but in no less than three different countries).
For long positions, the Acquiring Fund generally invests in the equity securities of issuers Boston Partners believes are undervalued. For short positions, the Acquiring Fund generally takes positions in securities Boston Partners has identified as overvalued. Boston Partners applies a bottom-up stock selection process using a combination of fundamental and quantitative analysis of issuer-specific factors such as price-to-book value, price-to-sales and earnings ratios, dividend yields, strength of management, and cash flow. The Acquiring Fund may invest in unseasoned issuers. Boston Partners will determine the size of each long or short position by analyzing the tradeoff between |
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Acquired Fund | Acquiring Fund | |
The Acquired Fund defines non-U.S. companies as companies (i) that are organized under the laws of a foreign country; (ii) whose principal trading market is in a foreign country; or (iii) that have a majority of their assets, or that derive a significant portion of their revenue or profits from businesses, investments or sales, outside of the United States. Under normal market conditions, the Acquired Fund invests significantly (ordinarily at least 40% — unless market conditions are not deemed favorable by Boston Partners, in which case the Acquired Fund would invest at least 30%) in non-U.S. companies. The Acquired Fund principally will be invested in issuers located in countries with developed securities markets, but may also invest in issuers located in emerging markets. The Acquired Fund will allocate its assets among various regions and countries, including the United States (but in no less than three different countries).
The Acquired Fund’s portfolio is rebalanced regularly. Boston Partners assesses each investment’s changing characteristics relative to its contribution to portfolio risk. Boston Partners will sell an investment held long or close out a short position that Boston Partners believes no longer offers an appropriate return-to-risk tradeoff.
Under normal circumstances, Boston Partners expects to sell securities short so that the Acquired Fund’s portfolio is approximately 50% net long with an average of between 30% and 70% net long.
To meet margin requirements, redemptions or pending investments, the Acquired Fund may also temporarily hold a portion of its assets in full faith and credit obligations of the United States government and in short-term notes, commercial paper or other money market instruments.
Boston Partners will sell a stock when it no longer meets one or more investment criteria, either through obtaining target value or due to an adverse change in fundamentals or business momentum. Each holding has a target valuation established at purchase, which Boston Partners constantly monitors and adjusts as appropriate. The Acquired Fund may participate as a purchaser in initial public offerings of securities (“IPO”). An IPO is a company’s first offering of stock to the public.
The Acquired Fund may invest from time to time a significant portion of its assets in smaller issuers which are more volatile and less liquid than investments in issuers with larger market capitalizations. | the attractiveness of each position and its impact on the risk of the overall portfolio. Boston Partners examines various factors in determining the value characteristics of such issuers including price-to-book value ratios and price-to-earnings ratios. These value characteristics are examined in the context of the issuer’s operating and financial fundamentals, including return on equity, earnings growth and cash flow. Boston Partners selects securities for the Acquiring Fund based on an ongoing study of trends in industries and companies, earnings power and growth and other investment criteria.
The Acquiring Fund may take both physical and synthetic long and short positions in a variety of equity and derivative instruments. The Acquiring Fund may hold significant synthetic short exposures. The Acquiring Fund’s long and short exposures will primarily be maintained on individual securities. With a physical short position, the Acquiring Fund sells a security that it does not own that must be returned later to meet its settlement obligations.
Derivative instruments in which the Acquiring Fund may take long and short positions include futures and forwards, such as equity index futures and foreign currency forward contracts; swaps, such as total return swaps; and call and put options. Derivatives may be used to reduce risk, obtain efficient market exposure, and/or enhance investment returns. Derivative instruments may magnify the Acquiring Fund’s gains and losses.
The Acquiring Fund’s portfolio is rebalanced regularly. Boston Partners assesses each investment’s changing characteristics relative to its contribution to portfolio risk. Boston Partners will sell an investment or close out a position that it believes no longer offers an appropriate return-to-risk trade-off. Under normal circumstances, Boston Partners expects to maintain long and short positions so that the Acquiring Fund’s portfolio is approximately between 30% and 70% net long.
Boston Partners will sell an investment or close out a position when it no longer meets one or more investment criteria, either through obtaining target value or due to an adverse change in fundamentals or business momentum. Each holding has a target valuation established at purchase, which Boston Partners constantly monitors and adjusts as appropriate. |
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Acquired Fund | Acquiring Fund | |
The Acquired Fund may invest up to 15% of its net assets in illiquid investments, including investments that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions on resale.
In general, the Acquired Fund’s investments are broadly diversified over a number of industries and, as a matter of policy, the Acquired Fund is limited to investing a maximum of 25% of its total assets in any one industry. The Acquired Fund is non-diversified, and may invest in fewer securities at any one time than a diversified fund.
The Acquired Fund may invest up to 20% of its net assets in high yield debt obligations, such as bonds and debentures, used by U.S. and foreign corporations and other business organizations (e.g., trusts or limited liability companies). Such high yield debt obligations are not considered to be investment grade. Non-investment grade fixed income securities (commonly known as “junk bonds”) are rated BB or lower by S&P Global, or have a comparable rating by another nationally recognized statistical rating organization (or, if unrated are determined by Boston Partners to be of comparable quality at the time of investment). The Acquired Fund may invest in securities of the lowest rating category, including securities in default. Boston Partners may, but is not required to, sell a bond or note held by the Acquired Fund in the event that its credit rating is downgraded.
The Acquired Fund may (but is not required to) invest in derivatives, including put and call options, futures, forward contracts and swaps, in lieu of investing directly in a security, currency or instrument, for hedging and non-hedging purposes.
While Boston Partners intends to fully invest the Acquired Fund’s assets at all times in accordance with the above-mentioned policies, the Acquired Fund reserves the right to hold up to 100% of its assets, as a temporary defensive measure, in cash and eligible U.S. dollar-denominated money market instruments and make investments inconsistent with its investment objective. Boston Partners will determine when market conditions warrant temporary defensive measures. | To meet margin requirements, redemptions or pending investments, the Acquiring Fund may also temporarily hold a portion of its assets in full faith and credit obligations of the United States government and in short-term notes, commercial paper or other money market instruments.
The Acquiring Fund may participate as a purchaser in IPOs of securities. An IPO is a company’s first offering of stock to the public.
The Acquiring Fund may invest from time to time a significant portion of its assets in smaller issuers which are more volatile and less liquid than investments in issuers with larger market capitalizations.
The Acquiring Fund may invest up to 15% of its net assets in illiquid investments, including investments that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions on resale.
In general, the Acquiring Fund’s investments are broadly diversified over a number of industries and, as a matter of policy, the Acquiring Fund is limited to investing a maximum of 25% of its total assets in any one industry. The Acquiring Fund is non-diversified, which means that it may invest in a smaller number of issuers than a diversified fund and may invest more of its assets in the securities of a single issuer. |
Comparison of Principal Investment Risks
The risks associated with an investment in the Acquired Fund and the Acquiring Fund are substantially similar but there are certain differences between the principal risks of the Acquired Fund and the Acquiring Fund. For example, the Acquiring Fund’s prospectus includes the following additional principal risks compared to the Acquired Fund’s prospectus: Credit and counterparty risk, Equity securities risk, Leveraging risk, Liquidity risk, Preferred stocks risk, Synthetic short exposure risk, Value investment risk, and Warrants risk. In addition, there are certain other differences between the risk disclosures for the Acquiring Fund and those of the Acquired Fund. However, any differences in the disclosure or description of such risks are not anticipated to result in or reflect any material differences in how the Acquired Fund is currently managed compared to how the Acquiring Fund will be managed. For example, the Acquired Fund and the Acquiring Fund may use different terminology to describe the risks applicable to such Fund’s principal investment strategies and the differences may reflect a clarification of the risks associated with an investment in the Acquiring Fund.
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Please refer to the Acquired Fund’s prospectus for more information regarding the Acquired Fund’s risks.
Principal Risks of the Acquiring Fund
Convertible securities risk. Convertible securities are subject to certain risks of both equity and debt securities. The market values of convertible securities tend to fall as interest rates rise and rise as interest rates fall. As the market price of underlying common stock declines below the conversion price, the market value of the convertible security tends to be increasingly influenced by its yield.
Credit and counterparty risk. The issuer or guarantor of a fixed-income security, the counterparty to an over-the-counter derivatives contract, or a borrower of fund securities may not make timely payments or otherwise honor its obligations. U.S. government securities are subject to varying degrees of credit risk depending upon the nature of their support. A downgrade or default affecting any of the Acquiring Fund’s securities could affect the Acquiring Fund’s performance.
Currency risk. Fluctuations in exchange rates may adversely affect the U.S. dollar value of a fund’s investments. Foreign currencies may decline in value, which could negatively impact performance.
Economic and market events risk. Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth, may at times result in unusually high market volatility, which could negatively impact performance. Reduced liquidity in credit and fixed-income markets could adversely affect issuers worldwide. Banks and financial services companies could suffer losses if interest rates rise or economic conditions deteriorate.
Equity securities risk. The price of equity securities may decline due to changes in a company’s financial condition or overall market conditions.
ETFs risk. The risks of owning shares of an ETF include the risks of owning the underlying securities the ETF holds. Lack of liquidity in an ETF could result in the ETF being more volatile than its underlying securities. An ETF’s shares could trade at a significant premium or discount to its NAV. A fund bears ETF fees and expenses indirectly.
Foreign securities risk. Less information may be publicly available regarding foreign issuers, including foreign government issuers. Foreign securities may be subject to foreign taxes and may be more volatile than U.S. securities. 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. Depositary receipts are subject to most of the risks associated with investing in foreign securities directly because the value of a depositary receipt is dependent upon the market price of the underlying foreign equity security. Depositary receipts are also subject to liquidity risk.
Hong Kong Stock Connect Program (“Stock Connect”) risk. Trading in China A-Shares through Stock Connect, a mutual market access program that enables foreign investment in the People’s Republic of China (“PRC”), is subject to certain restrictions and risks. Securities listed on Stock Connect may lose purchase eligibility, which could adversely affect the Acquiring Fund’s performance. Trading through Stock Connect is subject to trading, clearance, and settlement procedures that may continue to develop as the program matures. Any changes in laws, regulations and policies applicable to Stock Connect may affect China A-Share prices. These risks are heightened by the underdeveloped state of the PRC’s investment and banking systems in general.
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Hedging, derivatives, and other strategic transactions risk. Hedging, derivatives, and other strategic transactions may increase a fund’s volatility and could produce disproportionate losses, potentially more than the Acquiring Fund’s principal investment. Risks of these transactions are different from and possibly greater than risks of investing directly in securities and other traditional instruments. Under certain market conditions, derivatives could become harder to value or sell and may become subject to liquidity risk (i.e., the inability to enter into closing transactions). Derivatives and other strategic transactions that the Acquiring Fund intends to utilize include: foreign currency forward contracts, futures contracts, options, swaps, and total return swaps. Foreign currency forward contracts, futures contracts, options, and swaps generally are subject to counterparty risk. In addition, swaps may be subject to interest-rate and settlement risk, and the risk of default of the underlying reference obligation. Derivatives associated with foreign currency transactions are subject to currency risk.
High portfolio turnover risk. Trading securities actively and frequently can increase transaction costs (thus lowering performance) and taxable distributions.
Illiquid and restricted securities risk. Illiquid and restricted securities may be difficult to value and may involve greater risks than liquid securities. Illiquidity may have an adverse impact on a particular security’s market price and the Acquiring Fund’s ability to sell the security.
Initial public offerings risk. IPO share prices are frequently volatile and may significantly impact fund performance.
Leveraging risk. Using derivatives may result in a leveraged portfolio. Leveraging long exposures increases a fund’s losses when the value of its investments declines. Some derivatives have the potential for unlimited loss, regardless of the size of the initial investment.
Liquidity risk. The extent (if at all) to which a security may be sold or a derivative position closed without negatively impacting its market value may be impaired by reduced market activity or participation, legal restrictions, or other economic and market impediments.
Non-diversified risk. Adverse events affecting a particular issuer or group of issuers may magnify losses for non-diversified funds, which may invest a large portion of assets in any one issuer or a small number of issuers.
Operational and cybersecurity risk. Cybersecurity breaches may allow an unauthorized party to gain access to fund assets, customer data, or proprietary information, or cause a fund or its service providers to suffer data corruption or lose operational functionality. Similar incidents affecting issuers of a fund’s securities may negatively impact performance. Operational risk may arise from human error, error by third parties, communication errors, or technology failures, among other causes.
Preferred stock risk. Preferred stock generally ranks senior to common stock with respect to dividends and liquidation but ranks junior to debt securities. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock may be subject to optional or mandatory redemption provisions.
REIT risk. REITs, pooled investment vehicles that typically invest in real estate directly or in loans collateralized by real estate, carry risks associated with owning real estate, including the potential for a decline in value due to economic or market conditions.
Short sales risk. In a short sale, a fund pays interest on a borrowed security. The Acquiring Fund will lose money if the price of the borrowed security increases between the short sale and the replacement date.
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Small and mid-sized company risk. Small and mid-sized companies are generally less established and may be more volatile than larger companies. Small and/or mid-capitalization securities may underperform the market as a whole.
Synthetic short exposure risk. The Acquiring Fund will gain synthetic short exposure through a forward commitment through a swap agreement. Synthetic short exposures involve the risk that losses may be exaggerated, potentially losing more money than the actual cost of the investment.
Unseasoned issuers risk. Unseasoned issuers may not have an established financial history and may have limited product lines, markets or financial resources. Unseasoned issuers may depend on a few key personnel for management and may be susceptible to losses and risks of bankruptcy. As a result, such securities may be more volatile and difficult to sell.
Value investment style risk. Value securities may underperform the market as a whole, which may cause value-oriented funds to underperform equity funds with other investment strategies. Securities the manager believes are undervalued may never perform as expected.
Warrants risk. The prices of warrants may not precisely reflect the prices of their underlying securities. Warrant holders do not receive dividends or have voting or credit rights. A warrant ceases to have value if not exercised prior to its expiration date.
Comparison of Investment Restrictions
As required by the Investment Company Act of 1940, as amended (the “1940 Act”), each Fund has adopted investment policies that can be changed only with shareholder approval. These policies are referred to as “fundamental investment restrictions.” Each Fund has substantially similar fundamental investment restrictions, related to concentration, borrowing, underwriting, issuing senior securities, making loans, and investing in commodities and real estate. While the Funds’ fundamental investment restrictions related to borrowing, underwriting, and issuing senior securities are different, such differences are not anticipated to result in or reflect any material differences in how the Acquired Fund is currently managed compared to how the Acquiring Fund will be managed. In addition, each Fund operates as a non-diversified company.
Fundamental Investment Restrictions
Fundamental Restriction | Acquired Fund | Acquiring Fund | ||
Borrowing | The Acquired Fund will not borrow money or issue senior securities, except that the Acquired Fund may borrow from banks and enter into reverse repurchase agreements for temporary purposes in amounts up to one-third of the value of the Acquired Fund’s total assets at the time of such borrowing and provided that there is at least 300% asset coverage for the borrowings of the Acquired Fund. The Acquired Fund may not mortgage, pledge or hypothecate any assets, except in connection with any such borrowing and then in amounts not in excess of one-third of the value of the Acquired Fund’s total assets at the time of such borrowing. However, the amount shall not be in excess of lesser of the dollar amounts borrowed or 331/3% of the value of the Acquired Fund’s total assets at the time of such borrowing, provided that: (a) short sales and related borrowings of securities are not subject to this restriction; and (b) for the purposes of this restriction, collateral arrangements with respect to options, short sales, stock index, interest rate, currency or other futures, options on futures contracts, collateral arrangements with respect to initial and variation margin and collateral arrangements with respect to swaps and other derivatives are not deemed to be a pledge or other encumbrance of assets. Securities held in escrow or separate accounts in connection with the Acquired Fund’s investment practices are not considered to be borrowings or deemed to be pledged for purposes of this limitation. | The Acquiring Fund will not borrow money, except as permitted under the 1940 Act, as amended, and as interpreted or modified by regulatory authority having jurisdiction, from time to time. |
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Senior Securities | The Acquired Fund will not issue any senior securities, except as permitted under the 1940 Act. | The Acquiring Fund will not issue senior securities, except as permitted under the 1940 Act, as amended, and as interpreted or modified by regulatory authority having jurisdiction, from time to time. | ||
Underwriting | The Acquired Fund will not act as an underwriter of securities within the meaning of the Securities Act, except insofar as it might be deemed to be an underwriter upon disposition of certain portfolio securities acquired within the limitation on purchases of restricted securities. | The Acquiring Fund will not engage in the business of underwriting securities issued by others, except to the extent that the Acquiring Fund may be deemed to be an underwriter in connection with the disposition of portfolio securities. | ||
Real Estate | The Acquired Fund will not purchase or sell real estate (including real estate limited partnership interests), provided that the Acquired Fund may invest: (a) in securities secured by real estate or interests therein or issued by companies that invest in real estate or interests therein; or (b) in REITS. | The Acquiring Fund will not purchase or sell real estate, which term does not include securities of companies which deal in real estate or mortgages or investments secured by real estate or interests therein, except that the Acquiring Fund reserves freedom of action to hold and to sell real estate acquired as a result of the Acquiring Fund’s ownership of securities. | ||
Commodities | The Acquired Fund will not purchase or sell commodities or commodity contracts, except that the Acquired Fund may deal in forward foreign exchanges between currencies of the different countries in which it may invest and purchase and sell stock index and currency options, stock index futures, financial futures and currency futures contracts and related options on such futures. | The Acquiring Fund will not purchase or sell commodities, except as permitted under the 1940 Act, as amended, and as interpreted or modified by regulatory authority having jurisdiction, from time to time. |
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Loans | The Acquired Fund will not make loans, except through loans of portfolio securities and repurchase agreements, provided that for purposes of this restriction the acquisition of bonds, debentures or other debt instruments or interests therein and investment in government obligations, loan participations and assignments, short-term commercial paper, certificates of deposit and bankers’ acceptances shall not be deemed to be the making of a loan. | The Acquiring Fund will not make loans except as permitted under the 1940 Act, as amended, and as interpreted or modified by regulatory authority having jurisdiction, from time to time. | ||
Concentration | The Acquired Fund will not invest 25% or more of its total assets, taken at market value at the time of each investment, in the securities of one or more issuers in any particular industry (excluding the U.S. government and its agencies and instrumentalities). | The Acquiring Fund will not concentrate its investments in a particular industry, as that term is used in the 1940 Act, as amended, and as interpreted or modified by regulatory authority having jurisdiction, from time to time. |
Non-Fundamental Investment Restrictions
In addition, each Fund has also adopted investment restrictions that are “non-fundamental” (i.e., restrictions that can be changed by board of director or trustee action alone) which are set forth below. While there are differences between the non-fundamental investment restrictions of the Acquired Fund and Acquiring Fund, such differences are not anticipated to result in or reflect any material differences in how the Acquired Fund is currently managed compared to how the Acquiring Fund will be managed.
Acquired Fund’s Non-Fundamental Investment Restrictions:
• | The Acquired Fund will not make investments for the purpose of exercising control or management, but investments by the Acquired Fund in wholly-owned investment entities created under the laws of certain countries will not be deemed the making of investments for the purpose of exercising control or management. |
• | The Acquired Fund will not purchase securities on margin, except that the Acquired Fund may use margin to the extent necessary to engage in short sales and may obtain such short-term credits as are necessary for the clearance of portfolio transactions; and provided that margin deposits in connection with options, futures contracts, options on futures contracts, transactions in currencies or other derivative instruments shall not constitute purchasing securities on margin. |
• | The Acquired Fund will not hold illiquid investments in an amount exceeding, in the aggregate, 15% of the Acquired Fund’s net assets. |
Acquiring Fund’s Non-Fundamental Investment Restrictions:
• | The Acquiring Fund will not knowingly invest more than 15% of the value of its net assets in securities or other investments, including repurchase agreements maturing in more than seven days but excluding master demand notes, which are not readily marketable. |
• | The Acquiring Fund will not make short sales of securities or maintain a short position, if, when added together, more than 25% of the value of the Acquiring Fund’s net assets would be: (i) deposited as collateral for the obligation to replace securities borrowed to effect short sales; and (ii) allocated to segregated accounts in connection with short sales, except that it may obtain such short-term credits as may be required to clear transactions. For purposes of this restriction, collateral arrangements with respect to hedging and other strategic transactions will not be deemed to involve the use of margin. Short sales “against-the-box” are not subject to this limitation. |
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• | The Acquiring Fund will not pledge, hypothecate, mortgage or transfer (except as provided in the Acquiring Fund’s fundamental investment restriction regarding senior securities) as security for indebtedness any securities held by the Acquiring Fund, except in an amount of not more than 10% of the value of the Acquiring Fund’s total assets and then only to secure borrowings permitted by the Acquiring Fund’s fundamental investment restriction regarding borrowing and non-fundamental investment restriction regarding short sales. For purposes of this restriction, collateral arrangements with respect to hedging and other strategic transactions will not be deemed to involve a pledge of assets.1 |
1 | “Other strategic transactions” can include short sales and derivative transactions intended for non-hedging purposes. |
Comparison of the Funds’ Classes of Shares
The following table compares the expense structures of the Acquired Fund’s Institutional Class and Investor Class shares and the Acquiring Fund’s Class I and Class A shares, respectively. In addition to Class I and Class A shares, the Acquiring Fund will also offer Class C, Class R6, and Class NAV shares, which are not described in this proxy statement and prospectus.
Acquiring Fund Class A shareholders who acquire their shares through the Reorganization may continue to purchase additional Class A shares into their existing converted account without paying any front-end sales charges. After the closing date of the Reorganization, new investors are offered Class A shares subject to a front-end sales load of 5% of the purchase price, unless a discount or waiver is available, as described in the table below.
Acquired Fund’s Institutional Class Shares | Acquiring Fund’s Class I Shares | |
Institutional Class shares are offered without front-end sales loads or contingent deferred sales charges (“CDSCs”). | Class I shares are offered without front-end sales loads or CDSCs. | |
Institutional Class shares are not subject to any distribution and service (“Rule 12b-1”) fees. | Class I shares are not subject to any Rule 12b-1 fees. | |
Acquired Fund’s Investor Class Shares Investor Class shares are offered without front-end sales loads or CDSCs.
Investor Class shares are subject to Rule 12b-1 fees at an annual rate of 0.25%. | Acquiring Fund’s Class A Shares Class A shares are subject to front-end sales loads of 5% as a percentage of the purchase price. Class A shares are subject to CDSCs of 1% on certain purchases, including those of $1 million or more, as a percentage of the purchase price or sale price, whichever is less.
Class A shares are subject to Rule 12b-1 fees at an annual rate of 0.25%.
Class A shares are subject to small account fees for account balances under $1,000. |
Comparison of Maryland Corporations and Massachusetts Business Trusts
The Company, of which the Acquired Fund is a series, is organized as a Maryland corporation, while the Trust, of which the Acquiring Fund is a series, is organized as a Massachusetts business trust. While there are differences between the two forms of organization, the differences relate to the corporate structure of the Funds and do not affect the Funds’ investment operations. To the extent that the two states differ in their treatment of shareholder and board liability, these differences are generally addressed in a fund’s organizational documents and/or its agreements. The following table summarizes the key differences between these two organizational systems.
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Issue | Maryland Corporation | Massachusetts Business Trust | ||
Shareholder liability | Limited by statute. | Remote possibility of shareholder liability that must be disclosed in the fund’s SAI. Limited by a fund’s declaration of trust (for the Trust, the “Declaration”) and contractual provisions. | ||
Director/Trustee liability | As permitted under laws of either state, director/trustee liability is limited by the organizational document and/or contractual provisions. | |||
Annual shareholder meetings | Neither state has a statutory requirement to hold annual shareholder meetings, except that Maryland requires an annual meeting when an election of directors is required. | |||
Shareholder approval of certain actions1 | Required for:
• Mergers or consolidations;
• Changing domicile;
• Amending articles of incorporation; and
• Dissolving the corporation. | No statutory requirement, only if required by declaration of trust (including actions to amend declaration of trust). The Declaration provides that shareholders have the power to vote for certain actions, such as amending the Declaration, electing trustees, and as required under the 1940 Act or as deemed necessary by the trustees. | ||
Number of authorized shares | Articles of incorporation must provide for a definite number of shares to be issued, which may be amended by the board without shareholder approval. | Unlimited. | ||
Treatment of multiple classes/series | Statute specifically recognizes separation of classes. Board authorized by statute to classify or reclassify unissued stock. | Subject to provisions in declaration of trust. The Declaration specifically provides for multiple series and classes. | ||
Development of controlling law2 | Corporate law is well-developed, providing clear guidelines as to the rights and obligations of funds organized as Maryland corporations. | Law is not as well-developed and often subject to interpretation. Massachusetts corporation law is often used as an analogy. | ||
State income taxation | With some exceptions, same treatment as under federal tax laws, i.e., none if a fund meets certain requirements. | None. | ||
Franchise taxes | None. | None. |
1 | Please note that the 1940 Act requires shareholder approval of certain actions regardless of a fund’s state of organization. For example, Rule 17a-8 under the 1940 Act generally requires shareholder approval of mergers between affiliated funds. |
2 | Please note that the Funds must comply with the 1940 Act and other federal securities laws. As a result, many disputes that arise in the course of a fund’s operations are addressed under federal, rather than state, law. |
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Comparison of Buying, Selling and Exchanging Shares
Acquired Fund | Acquiring Fund | |||
Buying shares | Investors may buy shares at their public offering price through a financial representative or the Acquired Fund’s transfer agent, U.S. Bancorp Fund Services, LLC, doing business as U.S. Bank Global Fund Services (“U.S. Bank Global Fund Services”). | Investors may buy shares at their public offering price through a financial representative or the Acquiring Fund’s transfer agent, John Hancock Signature Services, Inc. (“Signature Services”). | ||
Minimum initial investment | The minimum initial investment for Institutional Class shares of the Acquired Fund is $100,000. Additional investments of at least $5,000 may be made at any time. The minimum investment requirements may occasionally be reduced or waived by the Acquired Fund.
The minimum initial investment for Investor Class shares of the Acquired Fund is $2,500. Additional investments of at least $100 may be made at any time. The minimum investment requirements may occasionally be reduced or waived by the Acquired Fund. | The minimum initial investment for Class I shares of the Acquiring Fund is $250,000. The minimum initial investment requirement may be waived, in the Acquiring Fund’s sole discretion, for certain investors.
The minimum initial investment for Class A shares is $1,000. The minimum initial investment requirement may be waived, in the Acquiring Fund’s sole discretion, for certain investors. | ||
Exchanging Shares | A shareholder may exchange Institutional Class shares of any Boston Partners investment fund for Institutional Class shares in an identically registered account of another Boston Partners investment fund. Beneficial holders with financial intermediary sponsored fee-based programs of Institutional Class shares are eligible to exchange their shares in a particular share class of the Acquired Fund for shares in a different share class of a fund if the shareholder meets the eligibility requirement for that class of shares or the shareholder is otherwise eligible to purchase that class of shares.
Beneficial holders with financial intermediary sponsored fee-based programs of Investor Class Shares of any Boston Partners Investment Fund are eligible to exchange their shares for Institutional Class Shares of the same Boston Partners fund if the accumulated value of their Investor Class shares exceeds the minimum initial investment amount for Institutional Class shares ($100,000) or the shareholder is otherwise eligible to purchase the Institutional Class shares.
In addition, a shareholder may exchange Investor Class shares of any Boston Partners investment fund for Investor Class shares in an identically registered account of another Boston Partners investment fund. | Shareholders may exchange Class A shares of one John Hancock fund for shares of the same class of any other John Hancock fund that is then offering that class, generally without paying any sales charges, if applicable.
Shareholders may exchange Class I shares of one John Hancock fund for shares of the same class of any other John Hancock fund or for John Hancock Money Market Fund Class A shares.
The registration for both accounts involved in an exchange must be identical. |
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Selling Shares | Shareholders may sell their shares by submitting a proper written or telephone request to the transfer agent. Unless shareholders have declined telephone transaction privileges on their account application, shareholders may redeem shares by telephone. | Shareholders may sell their shares by submitting a proper written, telephone or Internet request to the transfer agent. In certain circumstances, the request must be in writing. | ||
Net asset value | The Acquired Fund’s NAV is calculated once daily at the close of regular trading hours on the New York Stock Exchange (“NYSE”) (generally 4:00 p.m. Eastern time) on each day the NYSE is open. If market quotations are unavailable or deemed unreliable by the Acquired Fund’s administrator, U.S. Bank Global Fund Services, in consultation with Boston Partners, securities will be valued by Boston Partners, as the Acquired Fund’s valuation designee in accordance with procedures adopted by the Company Board and under the Company Board’s ultimate supervision. In addition, the prices of foreign securities may be affected by events that occur after the close of a foreign market but before a fund prices its shares. In such instances, a foreign security may be fair valued in accordance with procedures adopted by the Company Board. | The NAV for each class of shares of the Acquiring Fund is normally determined once daily as of the close of regular trading on the NYSE) (typically 4:00 p.m., Eastern time, on each business day that the NYSE is open). If market quotations, official closing prices, or information furnished by a pricing vendor are not readily available or are otherwise deemed unreliable or not representative of the fair value of such security because of market- or issuer-specific events, a security will be valued at its fair value as determined in good faith by the Board of Trustees of the Trust’s (the “Trust Board”) valuation designee, JHIM. |
Comparison of Expenses
Shareholders of both Funds pay various expenses, either directly or indirectly. Transaction expenses are charged directly to your account. Operating expenses are paid from the Fund’s assets and, therefore, are paid by shareholders indirectly. Future expenses for all share classes may be greater or less than those shown in the following tables.
As the tables below indicate, the maximum hypothetical pro forma net annual operating expenses of the Acquiring Fund’s Class I and Class A shares after the Reorganization are expected to be lower than the net annual operating expenses of the Acquired Fund’s Institutional Class and Investor Class shares, respectively. Further, to the extent that the Acquiring Fund’s assets grow after the closing of the Reorganization, the estimated total annual operating expenses of the Acquiring Fund’s Class I and Class A shares (before waivers and reimbursements) could potentially decline below the current total annual operating expenses of the Acquired Fund’s Institutional Class and Investor Class shares.
The management fee schedule for the Acquiring Fund includes breakpoints and is less than the management fee for the Acquired Fund at all asset levels. The management fee schedule for the Acquired Fund does not include breakpoints.
The Funds’ Expenses
The following expense tables briefly describe the fees and the expenses that holders of the Acquired Fund’s Institutional Class shares and Investor Class shares, and the Acquiring Fund’s Class I shares and Class A shares, may pay if they buy and hold shares of each respective Fund, and are based on expenses paid by Institutional Class shares and Investor Class Shares of the Acquired Fund as of May 3, 2024 and estimated expenses of the Class I shares and Class A shares of the Acquiring Fund. The tables also show the pro forma expenses of the Acquiring Fund assuming the Reorganization with the Acquired Fund had occurred at the beginning of the twelve-month period ended September 30, 2025, i.e., on October 31, 2024. However, pro forma numbers are estimated in good faith and are hypothetical. The Acquiring Fund’s actual expenses after the Reorganization may be greater or less than those shown.
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The tables describe the fees and expenses you may pay if you buy, hold, and sell Institutional Class or Investor Class shares of the Acquired Fund or Class I or Class A shares of the Acquiring Fund. You may pay other fees, such as brokerage commissions and other fees to financial intermediaries, which are not reflected in the tables and examples below. Please note that Acquiring Fund Class A shareholders who acquire their shares through the Reorganization may continue to purchase additional Class A shares into their existing converted account without paying any front-end sales charges. You may qualify for sales charge discounts on Class A shares of the Acquiring Fund 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 CDSC waivers. More information about the Acquiring Fund’s waivers and other discounts is available from your financial professional and on page C-3 of Appendix C under “Sales charge reductions and waivers” or page 76 of the Acquiring Fund’s Statement of Additional Information under “Sales Charges on Class A and Class C Shares.”
Shareholder fees (%) (fees paid directly from your investment) | Acquired Fund Institutional Class | John Hancock Disciplined Value Global Long/Short Fund Class I (Pro Forma, Assuming Reorganization with Acquired Fund) Class I | ||
Maximum front-end sales charge (load) on purchases, as a % of purchase price | None | None | ||
Maximum deferred sales charge (load) as a % of purchase or sale price, whichever is less | None | None | ||
Small account fee (for fund account balances under $1,000) ($) | None | None |
Shareholder fees (%) (fees paid directly from your investment) | Acquired Fund Investor Class | John Hancock Disciplined Value Global Long/Short Fund Class A (Pro Forma, Assuming Reorganization with Acquired Fund) Class A | ||
Maximum front-end sales charge (load) on purchases, as a % of purchase price | None | 5.00 | ||
Maximum deferred sales charge (load) as a % of purchase or sale price, whichever is less | None | 1.00 (on certain purchases, including those of $1 million or more) | ||
Small account fee (for fund account balances under $1,000) ($) | None | 20 |
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Annual fund operating expenses (%) (expenses that you pay each year as a percentage of the value of your investment) | Acquired Fund Institutional Class | John Hancock Disciplined Value Global (Pro Forma, Assuming Reorganization with Acquired Fund) Class I | ||||||
Management fee | 1.50 | 1.40 | ||||||
Distribution and service (Rule 12b-1) fees | None | 0.00 | ||||||
Other expenses | 0.29 | 0.31 | (2) | |||||
Short Sales Expenses: | ||||||||
Dividend expense on short sales | 0.01 | (1) | — | |||||
Interest Expense on borrowings | 0.00 | — | ||||||
Total annual fund operating expenses | 1.80 | 1.71 | ||||||
Contractual expense reimbursement | — | -0.06 | (3) | |||||
Total annual fund operating expenses after expense reimbursements | 1.80 | 1.65 |
(1) | “Dividend expense on short sales” has been restated to reflect estimated expenses for the current fiscal year. |
(2) | “Other expenses” have been estimated for the Acquiring Fund’s first year of operations. |
(3) | JHIM contractually agrees to reduce its management fee or, if necessary, make payment to the Acquiring Fund in an amount equal to the amount by which expenses of the Acquiring Fund exceed 1.53% of average daily net assets of the Acquiring Fund. For purposes of this agreement, “expenses of the fund” means all Acquiring 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, 2026, unless renewed by mutual agreement of JHIM and the Acquiring Fund based upon a determination that this is appropriate under the circumstances at that time. JHIM also contractually agrees to waive a portion of its management fee and/or reimburse expenses for the Acquiring 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, including the Acquiring Fund (the participating portfolios). This waiver equals, on an annualized basis, 0.0100% of that portion of the aggregate net assets of all the participating portfolios that exceeds $75 billion but is less than or equal to $125 billion; 0.0125% of that portion of the aggregate net assets of all the participating portfolios that exceeds $125 billion but is less than or equal to $150 billion; 0.0150% of that portion of the aggregate net assets of all the participating portfolios that exceeds $150 billion but is less than or equal to $175 billion; 0.0175% of that portion of the aggregate net assets of all the participating portfolios that exceeds $175 billion but is less than or equal to $200 billion; 0.0200% of that portion of the aggregate net assets of all the participating portfolios that exceeds $200 billion but is less than or equal to $225 billion; and 0.0225% of that portion of the aggregate net assets of all the participating portfolios that exceeds $225 billion. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each participating portfolio. This agreement expires on July 31, 2025, unless renewed by mutual agreement of the Acquiring Fund and JHIM based upon a determination that this is appropriate under the circumstances at that time. |
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Annual fund operating expenses (%) (expenses that you pay each year as a percentage of the value of your investment) | Acquired Fund Investor Class | John Hancock Disciplined Value Global Long/Short Fund Class A (Pro Forma, Assuming Reorganization with Acquired Fund) Class A | ||||||
Management fee | 1.50 | 1.40 | ||||||
Distribution and service (Rule 12b-1) fees | 0.25 | 0.25 | ||||||
Other expenses | 0.29 | 0.31 | (2) | |||||
Short Sales Expenses: | ||||||||
Dividend expense on short sales | 0.01 | (1) | — | |||||
Interest Expense on borrowings | 0.00 | — | ||||||
Total annual fund operating expenses | 2.05 | 1.96 | ||||||
Contractual expense reimbursement | — | -0.06 | (3) | |||||
Total annual fund operating expenses after expense reimbursements | 2.05 | 1.90 |
(1) | “Dividend expense on short sales” has been restated to reflect estimated expenses for the current fiscal year. |
(2) | “Other expenses” have been estimated for the Acquiring Fund’s first year of operations. |
(3) | JHIM contractually agrees to reduce its management fee or, if necessary, make payment to the Acquiring Fund in an amount equal to the amount by which expenses of the Acquiring Fund exceed 1.53% of average daily net assets of the Acquiring Fund. For purposes of this agreement, “expenses of the fund” means all Acquiring 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, 2026, unless renewed by mutual agreement of JHIM and the Acquiring Fund based upon a determination that this is appropriate under the circumstances at that time. JHIM also contractually agrees to waive a portion of its management fee and/or reimburse expenses for the Acquiring 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, including the Acquiring Fund (the participating portfolios). This waiver equals, on an annualized basis, 0.0100% of that portion of the aggregate net assets of all the participating portfolios that exceeds $75 billion but is less than or equal to $125 billion; 0.0125% of that portion of the aggregate net assets of all the participating portfolios that exceeds $125 billion but is less than or equal to $150 billion; 0.0150% of that portion of the aggregate net assets of all the participating portfolios that exceeds $150 billion but is less than or equal to $175 billion; 0.0175% of that portion of the aggregate net assets of all the participating portfolios that exceeds $175 billion but is less than or equal to $200 billion; 0.0200% of that portion of the aggregate net assets of all the participating portfolios that exceeds $200 billion but is less than or equal to $225 billion; and 0.0225% of that portion of the aggregate net assets of all the participating portfolios that exceeds $225 billion. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each participating portfolio. This agreement expires on July 31, 2025, unless renewed by mutual agreement of the Acquiring Fund and JHIM based upon a determination that this is appropriate under the circumstances at that time. |
Examples
The hypothetical examples below show what your expenses would be if you invested $10,000 (or $100,000 with respect to Institutional Class shares of the Acquired Fund) over different time periods in the Acquired Fund and the Acquiring Fund, based on fees and expenses incurred by the Acquired Fund as of May 3, 2024. The expense examples shown for the Acquiring Fund assume that the investor sells shares at the end of the period. Pro forma expenses of the Acquiring Fund assuming the Reorganization with the Acquired Fund had occurred at the beginning of the 12-month period, on October 31, 2024, also are included. Each example assumes that you reinvested all distributions, that the average annual return was 5% and that Fund expenses did not change over the period. The pro forma examples are for comparison purposes only and are not a representation of the Acquired Fund’s or Acquiring Fund’s actual expenses or returns, either past or future.
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Acquired Fund Institutional Class | Acquired Fund Investor Class | Acquiring Fund Class I (Pro Forma) (Assuming Reorganization with Acquired Fund) | Acquiring Fund Class A (Pro Forma) (Assuming Reorganization with Acquired Fund) | |||||||||||||
1 year | $ | 1,829 | $ | 208 | $ | 168 | $ | 683 | ||||||||
3 years | $ | 5,664 | $ | 643 | $ | 533 | $ | 1,079 | ||||||||
5 years | $ | 9,748 | $ | 1,103 | $ | 923 | $ | 1,499 | ||||||||
10 years | $ | 21,159 | $ | 2,379 | $ | 2,014 | $ | 2,666 |
Portfolio Turnover
Each Fund pays transaction costs, such as commissions, when it buys and sells securities (or “turns over” its portfolio). 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. These costs, which are not reflected in annual fund operating expenses or in the examples above, affect each Fund’s performance. During the most recent fiscal year, the Acquired Fund’s portfolio turnover rate was 172% of the average value of its portfolio. As the Acquiring Fund has not yet commenced operations, it has no portfolio turnover information to report.
Exchanging Shares
As described above, shareholders of either Fund may exchange their shares for shares of the same class of another fund offered by the respective fund complex. See “Comparison of Buying, Selling and Exchanging Shares” for more details.
For information regarding exchanging shares of the Acquiring Fund, call your financial representative or Signature Services at 800-225-5291 (Class A shares) or 888-972-8696 (Class I shares).
Comparison of Advisory and Distribution Arrangements
The Acquired Fund’s and the Acquiring Fund’s advisory, expense limitation and distribution arrangements differ as set forth below.
Advisory Agreements
Acquired Fund
As investment advisor to the Acquired Fund, Boston Partners provides investment management and investment advisory services to investment companies and other institutional and proprietary accounts. Boston Partners, located at One Beacon Street, Boston, MA 02108, is a subsidiary of ORIX Corporation Europe N.V. (formerly Robeco Groep N.V.), a Dutch public limited liability company (“ORIX Europe”). Founded in 1929, ORIX Europe is one of the world’s oldest asset management organizations. ORIX Europe is owned by ORIX Corporation, an integrated financial services group based in Tokyo, Japan.
Subject to the general supervision of the Company Board, Boston Partners manages the Acquired Fund’s portfolios and is responsible for the selection and management of all portfolio investments of the Acquired Fund in accordance with the Acquired Fund’s investment objectives and policies.
A discussion regarding the basis for the Company Board’s approval of the Acquired Fund’s advisory agreement with Boston Partners is available in the Acquired Fund’s annual report to shareholders for the fiscal year ended August 31, 2023.
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Acquiring Fund
JHIM will serve as investment advisor to the Acquiring Fund and will be responsible for the supervision of Boston Partner’s services to the Acquiring Fund pursuant to its advisory agreement (the “Advisory Agreement”) with the Acquiring Fund. JHIM is located at 200 Berkeley Street, Boston, MA 02116.
Pursuant to the Advisory Agreement and subject to general oversight by the Trust Board, JHIM will manage and supervise the investment operations and business affairs of the Acquiring Fund. JHIM will provide the Acquiring Fund with all necessary office facilities and equipment and any personnel necessary for the oversight and/or conduct of the investment operations of the Acquiring Fund. JHIM will also coordinate and oversee the services provided to the Acquiring Fund under other agreements, including custodial, administrative and transfer agency services.
As subadvisor to the Acquiring Fund, Boston Partners will be responsible for the Acquiring Fund’s portfolio management activities, subject to oversight by JHIM. Boston Partners is located at One Beacon Street, 30th Floor, Boston, MA 02108. Boston Partners is an indirect, wholly owned subsidiary of ORIX Corporation of Japan.
Boston Partners will manage the investment and reinvestment of the assets of the Acquiring Fund, subject to the supervision of the Trust Board and JHIM. Boston Partners will formulate a continuous investment program for the Acquiring Fund consistent with its investment objectives and policies outlined in this proxy statement and prospectus. Boston Partners will implement such programs by purchases and sales of securities and will regularly report to JHIM and the Trust Board with respect to the implementation of such programs. Boston Partners, at its expense, will furnish all necessary investment and management facilities, including salaries of personnel required for it.
The Acquiring Fund relies on an order from the Securities and Exchange Commission (SEC) permitting JHIM, subject to approval by the Trust Board, to appoint a subadvisor or change the terms of a subadvisory agreement without obtaining shareholder approval. The Acquiring Fund, therefore, is able to change subadvisors or the fees paid to a subadvisor, from time to time, without the expense and delays associated with obtaining shareholder approval of the change. This order does not, however, permit JHIM to appoint a subadvisor that is an affiliate of JHIM or the Acquiring Fund (other than by reason of serving as a subadvisor to the Acquiring Fund), or to increase the subadvisory fee of an affiliated subadvisor, without the approval of the shareholders.
Management Fees. Under each Fund’s advisory arrangements, each Fund pays the advisor a management fee stated as an annual percentage of the current value of the net assets of each Fund, and that rate is applied to the average daily net assets of each Fund. The current advisory fees for each Fund are as follows:
Acquired Fund
Average daily net assets | Annual rate | |||
All assets | 1.50 | % |
Acquiring Fund
Average Daily Net Assets | Annual rate | |||
First $250 Million of Aggregate Net Assets | 1.40 | % | ||
Next $750 Million of Aggregate Net Assets | 1.375 | % | ||
Excess over $1 Billion of Aggregate Net Assets | 1.350 | % |
JHIM will pay subadvisory fees to Boston Partners from its own assets and not from the Acquiring Fund’s assets.
Expense Limitation Arrangements
Acquired Fund:
Boston Partners has agreed to limit the annual operating expenses of the Acquired Fund’s Institutional Class and Investor Class shares to 2.00% of the average daily net assets of the Acquired Fund’s Institutional Class shares (excluding acquired fund fees and expenses and short sale dividend expenses, brokerage commissions, extraordinary items, interest or taxes) and for the Acquired Fund’s Investor Class shares to 2.25% of the average daily net assets of the Acquired Fund’s Investor Shares (excluding acquired fund fees and expenses and short sale dividend expenses, brokerage commissions, extraordinary items, interest or taxes) until December 31, 2024. Only the Company Board may terminate the waiver prior to December 31, 2024. Boston Partners may discontinue this arrangement at any time after December 31, 2024.
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Acquiring Fund:
JHIM has contractually agreed to reduce its management fee or, if necessary, make payment to the Acquiring Fund in an amount equal to the amount by which expenses of the Acquiring Fund exceed 1.53% of average daily net assets of the Acquiring Fund. For purposes of this agreement, “expenses of the fund” means all Acquiring 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, 2026, unless renewed by mutual agreement of JHIM and the Acquiring Fund based upon a determination that this is appropriate under the circumstances at that time. JHIM has also contractually agreed to waive a portion of its management fee and/or reimburse expenses for the Acquiring 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, including the Acquiring Fund (the participating portfolios). This waiver equals, on an annualized basis, 0.0100% of that portion of the aggregate net assets of all the participating portfolios that exceeds $75 billion but is less than or equal to $125 billion; 0.0125% of that portion of the aggregate net assets of all the participating portfolios that exceeds $125 billion but is less than or equal to $150 billion; 0.0150% of that portion of the aggregate net assets of all the participating portfolios that exceeds $150 billion but is less than or equal to $175 billion; 0.0175% of that portion of the aggregate net assets of all the participating portfolios that exceeds $175 billion but is less than or equal to $200 billion; 0.0200% of that portion of the aggregate net assets of all the participating portfolios that exceeds $200 billion but is less than or equal to $225 billion; and 0.0225% of that portion of the aggregate net assets of all the participating portfolios that exceeds $225 billion. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each participating portfolio. This agreement expires on July 31, 2025, unless renewed by mutual agreement of the Acquiring Fund and JHIM based upon a determination that this is appropriate under the circumstances at that time.
Distribution Arrangements
Neither the Acquired Fund’s Institutional Class shares nor the Acquiring Fund’s Class I shares have any Rule 12b-1 fees.
The Acquired Fund’s Company Board approved a distribution agreement and adopted a plan of distribution for Investor Class shares pursuant to Rule 12b-1 under the Act. The distributor, Quasar Distributors, LLC, is entitled to receive from the Acquired Fund’s Investor Class shares a distribution fee with respect to the shares, which is accrued daily and paid monthly, of up to 0.25% on an annualized basis of the average daily net assets of the shares. The actual amount of such compensation under the plan is agreed upon by the Company Board and by Quasar Distributors, LLC. Because these fees are paid out of the Acquired Fund’s assets on an ongoing basis, over time these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. Amounts paid to Quasar Distributors, LLC under the plan may be used by Quasar Distributors, LLC to cover expenses that are related to (i) the sale of the shares, (ii) ongoing servicing and/or maintenance of the accounts of shareholders, and (iii) sub-transfer agency services, sub-accounting services or administrative services related to the sale of the shares, all as set forth in the Acquired Fund’s Rule 12b-1 plan. Ongoing servicing and/or maintenance of the accounts of shareholders may include updating and mailing prospectuses and shareholder reports, responding to inquiries regarding shareholder accounts and acting as agent or intermediary between shareholders and the Acquired Fund or its service providers. Quasar Distributors, LLC may delegate some or all of these functions to service organizations. The plan obligates the Acquired Fund, during the period it is in effect, to accrue and pay to Quasar Distributors, LLC on behalf of the shares the fee agreed to under the distribution agreement. Payments under the plan are not tied exclusively to expenses actually incurred by Quasar Distributors, LLC, and the payments may exceed distribution expenses actually incurred.
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The Acquired Fund’s Investor Class and the Acquiring Fund’s Class A shares have Rule 12b-1 fees of 0.25% on an annual basis. The Acquiring Fund’s Rule 12b-1 fees will be paid to the Acquiring Fund’s distributor, John Hancock Investment Management Distributors LLC, and may be used by John Hancock Investment Management Distributors LLC for expenses relating to the sale, distribution of, and shareholder or administrative services for holders of the shares of the class, and for the payment of service fees that come within Rule 2341 of the Conduct Rules of the Financial Industry Regulatory Authority. Because Rule 12b-1 fees are paid out of the Acquiring Fund’s assets on an ongoing basis, over time they will increase the cost of your investment and may cost shareholders more than other types of sales charges. Your broker-dealer or agent may charge you a fee to effect transactions in fund shares. Other share classes of the Acquiring Fund, which have their own expense structure, may be offered in separate prospectuses.
Fund Performance
Past performance records of the Acquired Fund through December 31, 2023, including: (1) calendar year total returns (without sales charges); and (2) average annual total returns (including imposition of sales charges), are set forth under “Acquired Fund Past Performance” beginning on page 31 of this proxy statement and prospectus. The Acquiring Fund has not yet commenced operations and, therefore, has no performance information to report.
PROPOSAL TO APPROVE THE AGREEMENT AND PLAN OF REORGANIZATION
Description of Reorganization
You are being asked to approve the Agreement, a form of which is attached to this proxy statement as Appendix A. Additional information about the Reorganization and the Agreement is set forth below under “Further Information on the Reorganization.” The Agreement provides for the Reorganization on the following terms:
The Reorganization is scheduled to occur at the close of business on or about September 27, 2024, but may occur on any later date before November 29, 2024. The Acquired Fund will transfer all of its assets to the Acquiring Fund and the Acquiring Fund will assume all of the Acquired Fund’s known liabilities. The net asset value of both Funds will be computed as of 4:00 p.m., Eastern Time, on the date of closing of the Reorganization (“Closing Date”).
The Acquiring Fund will issue Class I and Class A shares to the Acquired Fund in an amount equal to the net assets attributable to the Acquired Fund’s Institutional Class and Investor Class shares, respectively. As part of the liquidation of the Acquired Fund, these shares will immediately be distributed to Institutional Class and Investor Class shareholders of record of the Acquired Fund (in redemption of their Acquired Fund shares) in proportion to their holdings on the Closing Date. As a result, Institutional Class shareholders of the Acquired Fund will become Class I shareholders of the Acquiring Fund, and Investor Class shareholders of the Acquired Fund will become Class A shareholders of the Acquiring Fund.
After the Acquiring Fund’s shares are issued, the Acquired Fund will cease operations and be terminated.
Reasons for the Proposed Reorganization
The Company Board, including the Company’s Directors who are not “interested persons” (as defined in the 1940 Act) (“Independent Directors”), considered the Reorganization at a meeting held on May 15-16, 2024.
The Company Board discussed, among other matters, the proposed Reorganization with representatives of Boston Partners and the estimated fees and expenses and service providers for the Acquiring Fund. The Company Board noted that Boston Partners would continue to manage the Acquiring Fund’s assets on a day-to-day basis as subadvisor to the Acquiring Fund following the closing of the Reorganization.
The Company Board reviewed the expected total operating expense ratio for the Acquiring Fund, which is lower than the total operating expense ratio of the Acquired Fund, and considered that JHIM had indicated that it would enter into a contractual limitation of expenses in effect through February 28, 2026 with respect to the Acquiring Fund. The Company Board noted that the Acquiring Fund would have the same investment objective and substantially similar investment strategies as the Acquired Fund following the close of the Reorganization.
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In approving the Reorganization, the Company Board, including the Independent Directors (with the advice and assistance of independent counsel) considered, among other things and in no order of priority:
• | the expectation that the Reorganization will constitute a “reorganization” within the meaning of Section 368(a)(1)(F) of the Code and that the Acquired Fund and its shareholders generally will not recognize gain or loss for U.S. federal income tax purposes in the Reorganization; |
• | the terms and conditions of the draft Agreement, including the Acquiring Fund’s assumption of the assets and known liabilities of the Acquired Fund; |
• | that shareholders of the Acquired Fund would experience continuity in portfolio management because Boston Partners, the investment advisor to the Acquired Fund, would continue to manage the Acquiring Fund’s assets on a day-to-day basis as subadvisor to the Acquiring Fund; |
• | that JHIM, as investment advisor to the Acquiring Fund, would be responsible for the overall management of the Acquiring Fund’s operations and would oversee Boston Partners in accordance with the terms of the subadvisory agreement with respect to the Acquiring Fund; |
• | the investment objective of the Acquired Fund and the Acquiring Fund are the same, and that the investment strategies and policies of the Acquired Fund and the Acquiring Fund are substantially similar; |
• | the management fee for the Acquiring Fund will be less than the management fee for the Acquired Fund at all asset levels; |
• | that JHIM has agreed to a contractual limitation of expenses in effect through February 28, 2026 with respect to the Acquiring Fund, and as a result, the maximum net annual operating expenses of Class I and Class A shares of the Acquiring Fund are expected to be lower than the current annual net operating expenses of the Acquired Fund’s Institutional Class and Investor Class shares, respectively, through at least February 28, 2026; |
• | the costs of the Reorganization will not be borne by the Acquired Fund. The costs of the Reorganization will be borne by JHIM and Boston Partners according to an agreement between them; |
• | the historical performance of the Acquired Fund, although no assurances may be given that the Acquiring Fund will achieve any particular level of performance after the Reorganization; |
• | that the Acquiring Fund will assume the financial and performance history of the Acquired Fund at the closing of the Reorganization; |
• | the qualifications and experience of the Acquiring Fund’s service providers; |
• | that the Reorganization will be submitted to the shareholders of the Acquired Fund for their approval; and |
• | that the Reorganization was recommended by Boston Partners, the Acquired Fund’s current advisor, which believes that the reorganization of the Acquired Fund into the Acquiring Fund could benefit the Acquired Fund and its shareholders. |
The Company Board, including the Independent Directors, was aware of and considered that Boston Partners has an interest in recommending the Reorganization to the Company Board. If shareholders of the Acquired Fund approve the Reorganization, Boston Partners will become the investment subadvisor to the Acquiring Fund and receive subadvisory fees for managing the portfolio of the Acquiring Fund. The Company Board also considered how the shareholders of the other mutual funds advised by Boston Partners would perceive this transaction and the effect on their funds.
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The Company Board noted that if shareholders of the Acquired Fund do not approve the Reorganization, the Acquired Fund would not be reorganized into the Acquiring Fund, that the Acquired Fund would remain within the Company and that Boston Partners would continue to serve as investment advisor to the Acquired Fund. The Company Board may then consider whether any additional action may be necessary, including the possible merger with another fund or liquidation of the Acquired Fund.
ACQUIRED FUND PAST PERFORMANCE
Set forth below is past performance information for the Acquired Fund, which may help provide an indication of the Acquiring Fund’s risk.
Performance information for the Acquiring Fund is not presented because it has not yet commenced operations. As accounting successor to the Acquired Fund, the Acquiring Fund will assume the Acquired Fund’s historical performance after the Reorganization. Performance information in the bar chart and table below illustrates the variability of the Acquired Fund’s returns and provides some indication of the risks of investing in the Acquired Fund (and if the Reorganization is effected, the Acquiring Fund) by showing changes in the Acquired Fund’s performance from year to year.
Acquired Fund – Investor Class Shares:
The table compares the average annual total returns of the Acquired Fund’s Investor Class shares to those of the MSCI® World Index—Net Return, a broad-based, unmanaged total return performance benchmark of internationally traded common stocks. For periods shown below, performance is the actual performance of the Investor Class shares of the Acquired Fund and has not been adjusted to reflect the fees and expenses, including any Rule 12b-1 fees and/or sales charges, of the Class A shares of the Acquiring Fund. As a result, the performance shown below may be higher than if adjusted to reflect the fees and expenses of the Class A shares of the Acquiring Fund. All returns assume reinvestment of dividends and distributions.
Past performance (before and after taxes) does not indicate future results.
Calendar Year Total Returns – Investor Class Shares
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Quarterly Returns
During the period shown in the above bar chart, the Acquired Fund’s highest quarterly return was 13.50% for the quarter ended December 31, 2020, and its lowest quarterly return was -17.66% for the quarter ended March 31, 2020.
The year-to-date total return for the three months ended March 31, 2024 was 6.20%.
Average Annual Total Returns for Periods Ended December 31, 2023
1 Year | 5 Years | Since Inception (April 11, 2014) | ||||||||||
Investor Class before taxes | 8.11 | % | 8.75 | % | 5.27 | % | ||||||
Investor Class after taxes on distributions(1) | 7.77 | % | 8.52 | % | 5.09 | % | ||||||
Investor Class after taxes on distributions and sale of Acquired Fund Shares | 5.04 | % | 6.89 | % | 4.18 | % | ||||||
MSCI® World Index - Net Return (reflects no deduction for fees, expenses or taxes) | 23.79 | % | 12.80 | % | 8.95 | % |
(1) After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
Acquired Fund - Institutional Class Shares:
The table compares the average annual total returns of the Acquired Fund’s Institutional Class shares to those of the MSCI® World Index - Net Return, a broad-based, unmanaged total return performance benchmark of internationally traded common stocks. For periods shown below, performance is the actual performance of the Institutional Class shares of the Acquired Fund and has not been adjusted to reflect the fees and expenses of the Class I shares of the Acquiring Fund. As a result, the performance shown below may be higher than if adjusted to reflect the fees and expenses of the Class I shares of the Acquiring Fund. All returns assume reinvestment of dividends and distributions.
Past performance (before and after taxes) does not indicate future results.
Calendar Year Total Returns – Institutional Class Shares
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Quarterly Returns
During the period shown in the above bar chart, the Acquired Fund’s quarterly return was 13.63% for the quarter ended December 31, 2020, and its lowest quarterly return was -17.57% for the quarter ended March 31, 2020.
The year-to-date total return for the three months ended March 31, 2024 was 6.22%.
Average Annual Total Returns for Periods Ended December 31, 2023
1 Year | 5 Years | 10 Years | ||||||||||
Institutional Class before taxes | 8.35 | % | 9.03 | % | 5.22 | % | ||||||
Institutional Class after taxes on distributions (1) | 7.98 | % | 8.77 | % | 5.04 | % | ||||||
Institutional Class after taxes on distributions and sale of Acquired Fund Shares | 5.21 | % | 7.12 | % | 4.15 | % | ||||||
MSCI® World Index—Net Return (reflects no deduction for fees, expenses or taxes) | 23.79 | % | 12.80 | % | 8.60 | % |
(1) After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Fund shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts.
FURTHER INFORMATION ON THE REORGANIZATION
Tax Status of the Reorganization
The Reorganization is intended to be a tax-free reorganization and not to result in income, gain or loss for federal income tax purposes to the Acquiring Fund, the Acquired Fund or the shareholders of the Acquired Fund and will not take place unless the Funds receive a satisfactory opinion from Dechert LLP, substantially to the effect that the Reorganization will be a “reorganization” within the meaning of Section 368(a)(1)(F) of the Internal Revenue Code of 1986, as amended (the “Code”).
As a result, with respect to the Reorganization, for federal income tax purposes:
• | The Reorganization will constitute a “reorganization” within the meaning of Section 368(a)(1)(F) of the Code, and the Acquired Fund and the Acquiring Fund will each be a “party to a reorganization” within the meaning of Section 368(b) of the Code; |
• | No gain or loss will be recognized by the Acquired Fund upon the transfer of all of its assets to the Acquiring Fund solely in exchange for Acquiring Fund shares and the assumption of the known liabilities of the Acquired Fund by the Acquiring Fund or upon the distribution by the Acquired Fund of the Acquiring Fund shares to the Acquired Fund’s shareholders in exchange for their Acquired Fund shares, except that the Acquired Fund may be required to recognize gain or loss with respect to contracts described in Section 1256(b) of the Code or stock in a passive foreign investment company, as defined in Section 1297(a) of the Code; |
• | No gain or loss will be recognized by the Acquiring Fund upon the receipt of the Acquired Fund’s assets solely in exchange for Acquiring Fund shares and the assumption of the Acquired Fund’s liabilities by the Acquiring Fund; |
• | The tax basis of the assets of the Acquired Fund acquired by the Acquiring Fund will be the same as the basis of those assets in the hands of the Acquired Fund immediately before the transfer, adjusted for any gain or loss required to be recognized in paragraph (2) above; |
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• | The tax holding period of the assets of the Acquired Fund in the hands of the Acquiring Fund will include the Acquired Fund’s tax holding period for those assets (except where the investment activities of the Acquiring Fund have the effect of reducing or eliminating a tax holding period with respect to an asset and except for any asset with respect to which gain or loss is required to be recognized as described in paragraph (2) above); |
• | No gain or loss will be recognized by the Acquired Fund shareholders upon the exchange of their shares of the Acquired Fund solely for the Acquiring Fund shares as part of the Reorganization; |
• | The aggregate tax basis of the Acquiring Fund shares received by each Acquired Fund shareholder in the Reorganization will be the same as the aggregate tax basis of such shareholder’s shares of the Acquired Fund surrendered in exchange therefor; |
• | The tax holding period of the Acquiring Fund shares received by each Acquired Fund shareholder will include the tax holding period of such shareholder’s shares of the Acquired Fund surrendered in the exchange, provided that the shares of the Acquired Fund were held by such shareholder as capital assets on the date of the exchange; and |
• | The Acquiring Fund will succeed to and take into account the tax attributes of the Acquired Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in the Code, the regulations thereunder, and existing court decisions and published interpretations of the Code and regulations. |
In rendering such opinion, counsel shall rely upon, among other things, reasonable assumptions as well as representations of the Acquired Fund and the Acquiring Fund. Notwithstanding the foregoing, no opinion will be expressed as to the tax consequences of the Reorganization on contracts or securities on which gain or loss is recognized upon the transfer of an asset regardless of whether such transfer would otherwise be a nonrecognition transaction under the Code.
No tax ruling has been or will be received from the Internal Revenue Service (“IRS”) in connection with the Reorganization. An opinion of counsel is not binding on the IRS or a court and no assurance can be given that the IRS would not assert, or a court would not sustain, a contrary position. If the Reorganization were consummated but the IRS or the courts were to determine that the Reorganization did not qualify as a tax-free reorganization under the Code, and thus was taxable, the Acquired Fund would recognize gain or loss on the transfer of its assets to the Acquiring Fund, and each shareholder of the Acquired Fund that held shares in a taxable account would recognize a taxable gain or loss equal to the difference between its tax basis in the Acquired Fund shares and the fair market value of the shares of the Acquiring Fund it received.
The tax year of the Acquired Fund is expected to continue with the Acquiring Fund, and the capital gains, if any, resulting from portfolio turnover prior to the Reorganization will be carried over to the Acquiring Fund. If the Reorganization were to end the tax year of the Acquired Fund (which is not the intended or expected plan as of the date of this proxy statement), it would accelerate distributions to shareholders from the Acquired Fund for its short tax year ending on the Closing Date. Such distributions may be taxable and would include any capital gains resulting from portfolio turnover prior to the Reorganization.
The tax year for the Acquired Fund is August 31. Following the Reorganization, the tax year for the Acquiring Fund will become October 31.
Assuming the Reorganization qualifies as a tax-free reorganization under the Code, as expected, the Acquiring Fund will succeed to the tax attributes of the Acquired Fund upon the closing of the Reorganization, including any capital loss carryovers that could have been used by the Acquired Fund to offset its future realized capital gains, if any, for federal income tax purposes. Capital losses of the Acquired Fund, if any, may be carried forward indefinitely to offset future capital gains. As of the fiscal year ended August 31, 2023, the Acquired Fund had capital loss carryovers of $141,607.
This description of the federal income tax consequences of the Reorganization is made without regard to the particular circumstances of any shareholder. Shareholders are urged to consult their own tax advisors as to the specific consequences to them of the Reorganization, including the applicability and effect of state, local, foreign and other tax laws.
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Additional Terms of the Agreement and Plan of Reorganization
Certain terms of the Agreement are described above. The following is a summary of certain additional terms of the Agreement. This summary and any other description of the terms of the Agreement contained in this proxy statement and prospectus are qualified in their entirety by Appendix A, the Form of Agreement and Plan of Reorganization, in its entirety, that is proposed for the Reorganization.
Conditions to Closing the Reorganization. The obligation of the Acquired Fund to consummate the Reorganization is subject to the satisfaction of certain conditions, including the performance by the Acquiring Fund of all its obligations under the Agreement and the receipt of all consents, orders and permits necessary to consummate the Reorganization (see Agreement, paragraph 8).
The obligation of the Acquiring Fund to consummate the Reorganization is subject to the satisfaction of certain conditions, including the Acquired Fund’s performance of all of its obligations under the Agreement, the receipt of certain documents and financial statements from the Acquired Fund and the receipt of all consents, orders and permits necessary to consummate the Reorganization (see Agreement, paragraph 9).
The obligations of the Acquired Fund and the Acquiring Fund are subject to approval of the Agreement by the necessary vote of the outstanding shares of the Acquired Fund, in accordance with the provisions of the Acquired Fund’s charter and by-laws. The Funds’ obligations are also subject to the receipt of a favorable opinion of Dechert LLP as to the federal income tax consequences of the Reorganization (see Agreement, paragraphs 8(f) and 9(f)).
Termination of Agreement. The Company Board or the Trust Board may terminate the Agreement (even if the shareholders of the Acquired Fund have already approved it) at any time before the Reorganization, subject to certain conditions.
Expenses of the Reorganization. The costs incurred in connection with the Reorganization are estimated to be approximately $455,000. JHIM will pay all reasonable costs and expenses, including legal counsel fees and proxy solicitation costs, of Boston Partners, the Company and the Acquired Fund incurred in connection with the Acquired Fund’s reorganization into the Acquiring Fund up to a maximum of $200,000. Boston Partners will be responsible for their own costs and expenses, as well as the cost and expenses of the Company and Acquired Fund, incurred in connection with the reorganization that, collectively, exceed $200,000.
With respect to the proposal, the following tables set forth the capitalization of the Acquired Fund as of June 7, 2024, and the pro forma combined capitalization of both Funds as if the Reorganization had occurred on that date. The Acquiring Fund will have no assets until the Closing Date, when it will assume the assets of the Acquired Fund.
Acquired Fund | Acquiring Fund1 | Acquiring Fund Pro forma | ||||||||||
Net Assets (millions) | $ | 171,118,997.08 | N/A | $ | 171,118,997.08 | |||||||
Net Asset Value Per Share | ||||||||||||
Institutional Class/Class I | $ | 16.67 | N/A | $ | 16.67 | |||||||
Investor Class/Class A | $ | 16.36 | N/A | $ | 16.36 | |||||||
Shares Outstanding | ||||||||||||
Institutional Class/Class I | 9,495,809.035 | N/A | 9,495,809.035 | |||||||||
Investor Class/Class A | 783,582.381 | N/A | 783,582.381 |
(1) | The Acquiring Fund is a shell fund without any shares outstanding and, therefore, no estimated capitalization is available. |
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ADDITIONAL INFORMATION ABOUT THE FUNDS
The following table shows where you can find additional information about the Funds.
Type of Information | Headings in Acquired Fund Prospectus | Heading in proxy statement and prospectus and/or | ||
Investment objective and policies | Summary Section: Investment Objective/Summary of Principal Investment Strategies/Summary of Principal Risks Additional Information About the Funds’ Investment and Risks: Investment Objectives/Additional Information About the Funds’ Principal Investments and Risks (The Acquired Fund’s shares are offered in a combined prospectus that relates to the Acquired Fund and other series of the Company dated May 3, 2024 and filed on the SEC’s website, accession number: 0001398344-24-008575.) | Fund summary: Investment objective, Principal investment strategies, Principal risks (See Summary Comparison of the Funds in this proxy statement and prospectus and Appendix B)
Fund details: Principal investment strategies/Principal risks of investing (See Summary Comparison of the Funds in this proxy statement and prospectus and Appendix B) | ||
Investment advisor | Management of the Fund- Investment Adviser | Who’s who: Investment advisor, Subadvisor (See Summary Comparison of the Funds in this proxy statement and prospectus and Appendix B) | ||
Portfolio management | Management of the Fund - Portfolio Managers | Who’s who: Subadvisor (See Summary Comparison of the Funds in this proxy statement and prospectus and Appendix B) | ||
Expenses | Expenses and Fees | Fund summary: Fees and expenses (See Summary Comparison of the Funds in this proxy statement and prospectus and Appendix B) | ||
Financial Intermediary Compensation | Summary Section: Payments to Broker-Dealers and Other Financial Intermediaries | Fund summary: Payments to broker-dealers and other financial intermediaries (See Appendix B) | ||
Purchase of shares | Shareholder Information: Purchase of Fund Shares | Your Account: Opening an account, Buying shares, Transaction policies, Additional investor services (See Appendix C) | ||
Redemption of shares | Shareholder Information: Redemption of Fund Shares | Your account: Selling shares, Transaction policies (See Appendix C) | ||
Dividends, distributions and taxes | Dividends and Distributions; Taxes | Your account: Dividends and account policies (See Appendix C) | ||
Financial Highlights | Financial Highlights | The Acquiring Fund has not commenced operations and, therefore, does not have financial highlights. The fiscal year end for the Acquired Fund is August 31. Following the Reorganization, the fiscal year end for the Acquiring Fund will become October 31. |
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BOARD EVALUATION AND RECOMMENDATION
For the reasons described above, the Company Board, including the Company’s independent directors, approved the Reorganization on behalf of the Acquired Fund. In particular, the Company Board determined that the Reorganization is in the best interests of the Acquired Fund and that the interests of the Acquired Fund’s shareholders would not be diluted as a result of the Reorganization.
The Directors of the Company unanimously recommend that shareholders of the Acquired Fund vote FOR the proposal to approve the Agreement and Plan of Reorganization. |
The Reorganization is expected to benefit JHIM and Boston Partners. JHIM has engaged Boston Partners as the subadvisor for the Acquiring Fund. Therefore, JHIM would benefit from the fees it receives from the Acquiring Fund and from the addition of a well-managed fund with strong historical performance to the John Hancock family of funds, while Boston Partners would benefit from the subadvisory fees it receives for managing the portfolio of the Acquiring Fund, and from John Hancock’s distribution capabilities in growing the Acquiring Fund.
JHIM and Boston Partners have entered into an overall business arrangement under which Boston Partners has agreed not to offer investment management services to certain competitors of JHIM for the investment strategies it manages for JHIM, subject to further conditions, for a period of up to five years. None of the Company, the Trust, the Acquiring Fund or the Acquired Fund is a party to any of these arrangements, and they are not binding upon the Funds or their respective boards. In approving the Reorganization and the Agreement, the Company Board, including the Company’s independent directors, was aware of and considered these potential conflicts of interest, including any financial obligations of JHIM to Boston Partners.
VOTING RIGHTS AND REQUIRED VOTE
All shares of the Acquired Fund are entitled to vote on the proposal. The presence of one-third of the Acquired Fund’s outstanding shares present in person or represented by proxy and entitled to vote at a shareholders’ meeting constitutes a quorum at such meeting. Shareholders of the Acquired Fund will vote together to approve the Agreement. Assuming a quorum is present, the Agreement will be approved by the affirmative “vote of a majority of the outstanding voting securities” (as such phrase is defined in the 1940 Act) of shareholders of the Acquired Fund. The “vote of a majority of the outstanding voting securities” means, with regard to shares of the Acquired Fund, the affirmative vote of the lesser of (i) 67% or more of the aggregate outstanding shares present at the meeting if more than 50% of the aggregate outstanding shares are present in person or by proxy or (ii) more than 50% of the aggregate outstanding voting shares.
The approval of the Agreement by the Acquired Fund’s shareholders is required for the consummation of the Reorganization on behalf of the Acquired Fund. If the Agreement is not approved by the Acquired Fund’s shareholders, the Company may seek to adjourn the Special Meeting of shareholders to obtain sufficient votes to approve the Agreement.
All shares represented by each properly signed proxy received before the meeting will be voted at the Special Meeting. Proxies may be voted by mail, by telephone at the toll-free telephone number listed on the enclosed proxy card, or via the Internet at the website shown on the enclosed proxy card. If a shareholder specifies how the proxy is to be voted on any business properly to come before the Special Meeting, it will be voted in accordance with instruction given. If no choice is indicated on the proxy, it will be voted “FOR” approval of the Reorganization. If any other matters come before the Special Meeting, proxies will be voted by the persons named as proxies in accordance with their best judgment.
All proxies voted, including abstentions and broker non-votes (where the underlying holder has not voted and the broker does not have discretionary authority to vote the shares), will be counted toward establishing a quorum. Approval of the Agreement to implement the Reorganization will occur only if a sufficient number of votes are cast “FOR” that proposal. Abstentions and broker non-votes do not constitute a vote “FOR” and will have no effect on the outcome of the voting.
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With respect to the proposal to adjourn, there will be no broker non-votes and abstentions will have no effect on the outcome of the proposal. Unless marked to the contrary, proxies received will be voted “FOR” the proposal to adjourn.
Revocation of Proxy
Any shareholder giving a proxy may revoke it before it is exercised at the Special Meeting by submitting to the secretary of the Company a written notice of revocation or a subsequently signed proxy card, or by attending the Special Meeting and voting in person. A prior proxy can also be revoked through the website or toll-free telephone number listed on the enclosed proxy card. If not so revoked, the shares represented by the proxy will be cast at the Special Meeting and any postponements or adjournments thereof. Attendance by a shareholder at the Special Meeting does not, in itself, revoke a proxy.
INFORMATION CONCERNING THE MEETING
Solicitation of Proxies
In addition to the mailing of these proxy materials, proxies may be solicited: by fax or in person by the Directors, officers and employees of the Company, on behalf of the Acquired Fund; by personnel of the Acquired Fund’s investment advisor, Boston Partners, and its transfer agent, U.S. Bank Global Fund Services, or by broker-dealer firms. [ ] has agreed to provide proxy solicitation services to the Acquired Fund. It is currently anticipated that shareholders will not bear any costs associated with these proxy solicitation services. JHIM will pay all reasonable costs and expenses, including legal counsel fees and proxy solicitation costs, if any, of Boston Partners, the Company, and the Acquired Fund incurred in connection with the Reorganization up to a maximum of $200,000.
Outstanding Shares and Quorum
As of July 12, 2024 (the “Record Date”), the numbers of shares of common stock of the Acquired Fund outstanding were as follows:
Acquired Fund | Shares Outstanding | |
Institutional Class | [ ] | |
Investor Class | [ ] |
Only shareholders of record on the Record Date are entitled to receive notice of and to vote at the meeting. Pursuant to the Articles of Incorporation of the Company, one-third of the outstanding shares of the Acquired Fund that are entitled to vote will be considered a quorum for the transaction of business.
Other Business
The Company Board knows of no other business to be brought before the Special Meeting. If any other matters come before the Special Meeting, it is the intention of the Company Board that proxies that do not contain specific restrictions to the contrary will be voted on those matters in accordance with the judgment of the persons named in the enclosed form of proxy.
Adjournments
Shareholders will also be asked to vote on a proposal to adjourn the Special Meeting to solicit additional proxies if a quorum does not exist or if a quorum exists but there are insufficient votes at the time of the adjournment to approve the Agreement. Any business that might have been transacted at the Special Meeting may be transacted at any such adjourned session at which a quorum is present. Approval of the proposal to adjourn the Special Meeting to solicit additional proxies if there are insufficient votes at the time of the adjournment to approve the Agreement, requires a majority of the votes represented at the Special Meeting, whether or not a quorum is present. The Special Meeting may be held as adjourned without further notice if such time and place are announced at the Special Meeting at which the adjournment is taken and the adjourned meeting is held within a reasonable time after the date set for the original meeting unless a new record date of the adjourned meeting is fixed by the Company Board. Notice of any such adjourned meeting will be given to each shareholder of record entitled to vote at the adjourned meeting in accordance with the Acquired Fund’s bylaws.
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Shareholders’ Proposals
The Acquired Fund is not required and does not intend to hold annual or other periodic meetings of shareholders except as required by the 1940 Act. By observing this policy, the Acquired Fund seeks to avoid the expenses customarily incurred in the preparation of proxy materials and the holding of shareholder meetings, as well as the related expenditure of staff time. If the Reorganization is not completed, the next meeting of the shareholders of the Acquired Fund will be held at such time as the Company Board may determine or at such time as may be legally required. Any shareholder proposal intended to be presented at such meeting must be received by the Acquired Fund at its office at a reasonable time before the meeting, as determined by the Company Board, to be included in the Acquired Fund’s proxy statement and form of proxy relating to that meeting, and it must satisfy all other legal requirements.
OWNERSHIP OF SHARES OF THE FUNDS
To the knowledge of the Acquired Fund, as of [ ], 2024, the following persons owned of record or beneficially 5% or more of the outstanding Institutional Class shares and Investor Class shares of common stock of the Acquired Fund. A shareholder who owns beneficially more than 25% of a fund or a class of a fund is deemed to control the fund or class.
[To be updated]
As of [ ], 2024, there were no outstanding shares of the Acquiring Fund.
[As of [ ], 2024, the Company Board members, Trust Board members, and officers of each Fund owned in the aggregate less than 1% of the outstanding shares of their respective Funds.]
The financial statements and financial highlights of the Acquired Fund for the fiscal year ended August 31, 2023, and the six months ended February 29, 2024, are incorporated by reference into this proxy statement and prospectus. The financial statements and financial highlights for the fiscal year ended August 31, 2023, have been audited by the independent registered public accounting firm Ernst & Young LLP, as stated in its report, which is incorporated herein by reference. The financial statements and financial highlights for the fiscal year ended August 31, 2023, have been incorporated herein by reference in reliance on their report given on their authority as experts in accounting and auditing. The Acquiring Fund has not commenced operations and, therefore, does not have financial statements and financial highlights.
Each Fund is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and the 1940 Act, and files reports, proxy materials and other information with the SEC. Such materials are available on the SEC’s EDGAR Database on its website at sec.gov, and copies may be obtained, after paying a duplicating fee, by email request addressed to publicinfo@sec.gov.
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APPENDIX A - FORM OF AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the “Agreement”) is made as of [_________], 2024, by and between The RBB Fund, Inc., a Maryland corporation (the “Company”), on behalf of its series, Boston Partners Global Long/Short Fund (the “Acquired Fund”), and John Hancock Investment Trust, a Massachusetts business trust (the “Trust”), on behalf of its series, John Hancock Disciplined Value Global Long/Short Fund (the “Acquiring Fund” and together with the Acquired Fund, the “Funds” or individually, each a “Fund”).
This Agreement is intended to be and is adopted as a plan of reorganization and liquidation within the meaning of Section 361(a) and Section 368(a)(1)(F) of the United States Internal Revenue Code of 1986, as amended (the “Code”), and any successor provision or regulation.
The reorganization will consist of the transfer of all assets of the Acquired Fund attributable to each class of its shares in exchange for shares of the Acquiring Fund, which is being established solely for the purpose of acquiring those assets and continuing the Acquired Fund’s business, as described below (such shares, the “Merger Shares”), and the assumption by the Acquiring Fund of all known liabilities of the Acquired Fund and the distribution of the Merger Shares to the shareholders of the Acquired Fund in liquidation of the Acquired Fund, all upon the terms and conditions set forth in this Agreement.
Each of the Company and the Trust is duly organized and validly existing under, and in conformity with, the laws of jurisdiction of its organization, and has the power to own all of its assets and to carry out its obligations under this Agreement. Each of the Company and the Trust is qualified as a foreign association in every jurisdiction where required, except to the extent that failure to so qualify would not have a material adverse effect on the Company or the Trust, as the case may be. Each of the Company and the Trust is duly registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company and such registration has not been revoked or rescinded and is in full force and effect. The Acquired Fund and the Acquiring Fund are each a non-diversified separate series of the Company and the Trust, respectively, duly established and designated in accordance with the applicable provisions of the Company’s Articles of Incorporation dated February 17, 1988, as amended and supplemented with respect to the Acquired Fund (the “Articles”), and the Trust’s Amended and Restated Declaration of Trust dated January 22, 2016, as may be amended (the “Declaration”), respectively, and the 1940 Act.
The Company’s Board of Directors (the “Company Board”) and the Trust’s Board of Trustees (the “Board”): (i) have adopted and approved this Agreement and the transactions hereby contemplated; and (ii) have determined that participation therein is in the best interests of their respective Funds and that the interests of the existing shareholders thereof will not be diluted as a result of the Reorganization (as defined below).
All covenants and obligations of a Fund contained herein shall be deemed to be covenants and obligations of the Company or the Trust, as the case may be, acting on behalf of that Fund, and all rights and benefits created hereunder in favor of a Fund shall inure to, and shall be enforceable by, the Company or the Trust, as the case may be, acting on behalf of that Fund.
In order to consummate the reorganization contemplated by this Agreement (the “Reorganization”) and in consideration of the promises and the covenants and agreements hereinafter set forth, and intending to be legally bound, each party hereby agrees as follows:
1. Representations and Warranties of the Acquiring Fund.
The Trust, on behalf of the Acquiring Fund, represents and warrants to, and agrees with, the Acquired Fund that:
(a) The Acquiring Fund is a series of the Trust and, in conformity with the laws of The Commonwealth of Massachusetts, has the power to own all of its assets and to carry out its obligations under this Agreement. Each of the Trust and the Acquiring Fund has all necessary federal, state and local authorizations to carry on its business as it is now being conducted and to carry out this Agreement.
(b) The Acquiring Fund was formed for the purpose of effecting the Reorganization, has not engaged in any business prior to the Reorganization, and will never have owned any assets prior to the Reorganization. The Acquiring Fund is and will at the Closing Date be treated as a separate corporation under Section 851(g) of the Code.
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(c) The Acquiring Fund has no known liabilities of a material nature, contingent or otherwise. As of the Valuation Time (as defined in Section 3(c)), the Acquiring Fund will advise the Acquired Fund in writing of all known liabilities, contingent or otherwise, whether or not incurred in the ordinary course of business, existing or accrued as of such time.
(d) The Trust, on behalf of the Acquiring Fund, has full power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action of the Board, and this Agreement constitutes a valid and binding contract enforceable in accordance with its terms subject to approval by the Acquired Fund’s shareholders and subject to the effects of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer or similar laws relating to or affecting the rights or remedies of creditors’ generally; a party’s obligations of good faith, fair dealing, diligence, reasonableness, or due notice; equitable rights, remedies, or defenses; indemnifications from or against liability and court decisions with respect thereto.
(e) Except as has been disclosed in writing to the Acquired Fund, there are no material legal, administrative or other proceedings pending or, to the knowledge of the Trust or the Acquiring Fund, threatened against the Trust or the Acquiring Fund which assert liability on the part of the Trust or the Acquiring Fund or which materially affect the financial condition of the Trust or the Acquiring Fund or the Trust’s or the Acquiring Fund’s ability to consummate the Reorganization. Neither the Trust nor the Acquiring Fund is charged with or, to the best of its knowledge, threatened with any violation or investigation of any possible violation of any provisions of any federal, state or local law or regulation or administrative ruling relating to any aspect of its business.
(f) Neither the Trust nor the Acquiring Fund is obligated under any provision of the Declaration of Trust or the Trust’s Amended and Restated By-laws, dated March 8, 2005, as may be amended, and neither is a party to any contract or other commitment or obligation, nor is subject to any order or decree, which would be violated by its execution of or performance under this Agreement, except insofar as the Acquiring Fund and the Acquired Fund may mutually agree that the Acquiring Fund may take such necessary action to amend such contract or other commitment or obligation to cure any potential violation as a condition precedent to the Reorganization.
(g) There are no material contracts outstanding to which the Acquiring Fund is a party that have not been disclosed in the N-14 Registration Statement (as defined in sub-section (i) below) or that will not otherwise be disclosed to the Acquired Fund prior to the Valuation Time.
(h) No consent, approval, authorization or order of any court or government authority is required for the consummation by the Acquiring Fund of the Reorganization, except such as may be required under the Securities Act of 1933, as amended (the “1933 Act”), the Securities Exchange Act of 1934, as amended (the “1934 Act”), and the 1940 Act or state securities laws (which term as used herein shall include the laws of the District of Columbia and Puerto Rico).
(i) The registration statement on Form N-14 filed with the Securities and Exchange Commission (the “Commission”) by the Trust on behalf of the Acquiring Fund and relating to the Merger Shares issuable hereunder, and the proxy statement of the Acquired Fund relating to the meeting of the Acquired Fund’s shareholders referred to in Section 6(b) herein (together with the documents incorporated therein by reference, the “Proxy Statement/Prospectus”), and any supplement or amendment thereto or to the documents therein (as amended or supplemented, the “N-14 Registration Statement”), on the effective date of the N-14 Registration Statement, at the time of the shareholders’ meeting referred to in Section 6(b) of this Agreement and at the Closing Date (as such term is defined in Section 7, below), insofar as it relates to the Acquiring Fund:
(A) did and will comply in all material respects with the provisions of the 1933 Act, the 1934 Act, and the 1940 Act and the rules and regulations thereunder; and
(B) does not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Proxy Statement/Prospectus included therein did not or will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that none of the representations and warranties in this sub-section shall apply to statements in or omissions from the N-14 Registration Statement made in reliance upon and in conformity with information furnished by the Acquired Fund for use in the N-14 Registration Statement.
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(j) All issued and outstanding shares of the Acquiring Fund are, and at the Closing Date will be, duly and validly issued and outstanding, fully paid, and nonassessable by the Acquiring Fund. In regard to the statement above that the outstanding shares will be nonassessable, it is noted that the Trust is a “Massachusetts business trust” and under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the Acquiring Fund. The Acquiring Fund does not have outstanding any security convertible into any of the Acquiring Fund shares.
(k) The Merger Shares to be issued to the Acquired Fund pursuant to this Agreement have been duly authorized and, when issued and delivered pursuant to this Agreement, will be legally and validly issued Class A and Class I shares of beneficial interest in the Acquiring Fund and will be fully paid and nonassessable by the Acquiring Fund, and no shareholder of the Acquiring Fund will have any preemptive right of subscription or purchase in respect thereof. In regard to the statement above that the Merger Shares will be nonassessable, it is noted that the Trust is a “Massachusetts business trust” and under Massachusetts law, shareholders could, under certain circumstances, be held personally liable for the obligations of the Trust.
(l) At or prior to the Closing Date, the Merger Shares to be transferred to the Acquired Fund for distribution to the shareholders of the Acquired Fund on the Closing Date will be duly qualified for offering to the public in all states of the United States in which the sale of shares of the Acquired Fund presently are qualified, and there will be a sufficient number of such shares registered under the 1933 Act and, as may be necessary, with each pertinent state securities commission to permit the transfers contemplated by this Agreement to be consummated.
(m) At or prior to the Closing Date, the Acquiring Fund will have obtained any and all regulatory, trustee and shareholder approvals necessary to issue the Merger Shares to the Acquired Fund.
(n) The Acquiring Fund will take all steps necessary after the Closing Date to qualify for taxation as a “regulated investment company” (“RIC”) under Sections 851 and 852 of the Code. As of the Closing Date, no federal, state or other tax returns of the Acquiring Fund will have been required by law to be filed and no federal, state or other taxes will be due by the Acquiring Fund; the Acquiring Fund will not have been required to pay any assessments; and the Acquiring Fund will not have any tax liabilities. Consequently, as of the Closing Date, the Acquiring Fund will not have any tax deficiency or liability asserted against it or question with respect thereto raised, and the Acquiring Fund will not be under audit by the Internal Revenue Service or by any state or local tax authority for taxes in excess of those already paid.
(o) The Acquiring Fund is not under the jurisdiction of a court in a “Title 11 or similar case” (within the meaning of Section 368(a)(3)(A) of the Code).
2. Representations and Warranties of the Acquired Fund.
The Company, on behalf of the Acquired Fund, represents and warrants to, and agrees with, the Acquiring Fund that:
(a) The Acquired Fund is a series of the Company and, in conformity with the laws of the State of Maryland, has the power to own all of its assets and to carry out its obligations under this Agreement. Each of the Company and the Acquired Fund has all necessary federal, state and local authorizations to carry on its business as it is now being conducted and to carry out this Agreement.
(b) The Acquired Fund has elected to be, and has met the requirements of Subchapter M of Subtitle A, Chapter 1 of the Code (“Subchapter M”) for treatment as a RIC within the meaning of Sections 851 and 852 of the Code at all times since its inception, and will continue to meet such requirements at all times through the Closing Date. The Acquired Fund has not at any time since its inception been liable for, and is not now liable for, and will not be liable for on the Closing Date, any material income or excise tax pursuant to Sections 852 or 4982 of the Code.
(c) The Company, on behalf of the Acquired Fund, has full power and authority to enter into and perform its obligations under this Agreement. The execution, delivery and performance of this Agreement has been duly authorized by all necessary action of the Company Board, and this Agreement constitutes a valid and binding contract enforceable in accordance with its terms subject to approval by the Acquired Fund’s shareholders and subject to the effects of bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer or similar laws relating to or affecting the rights or remedies of creditors’ generally; a party’s obligations of good faith, fair dealing, diligence, reasonableness, or due notice; equitable rights, remedies, or defenses; indemnifications from or against liability and court decisions with respect thereto.
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(d) The Acquiring Fund has been furnished with: (i) the annual report of the Acquired Fund for the fiscal year ended August 31, 2023, and the audited financial statements appearing therein, having been audited by Ernst & Young LLP, independent registered public accounting firm; and (b) the semiannual report of the Acquired Fund for the six months ended February 29, 2024, which in each case fairly presents the financial condition and result of operations of the Acquired Fund as of the date indicated, in conformity with accounting principles generally accepted in the United States applied on a consistent basis.
(e) The Acquired Fund has no known liabilities of a material nature, contingent or otherwise, other than those that are shown as belonging to it on its statement of assets and liabilities as of February 29, 2024, and those incurred in the ordinary course of business as an investment company since such date. As of the Valuation Time, the Acquired Fund will advise the Acquiring Fund in writing of all known liabilities, contingent or otherwise, whether or not incurred in the ordinary course of business, existing or accrued as of such time.
(f) Except as has been disclosed in writing to the Acquiring Fund, there are no material legal, administrative or other proceedings pending or, to the knowledge of the Company or the Acquired Fund, threatened against the Company or the Acquired Fund which assert liability on the part of the Company or the Acquired Fund, or which materially affect the financial condition of the Company or the Acquired Fund or the Company’s or the Acquired Fund’s ability to consummate the Reorganization. There have been no material changes to the financial condition of the Acquired Fund since the date of the financial statements included in the semiannual report of the Acquired Fund for the six months ended February 29, 2024. Neither the Company nor the Acquired Fund is charged with or, to the best of its knowledge, threatened with any violation or investigation of any possible violation of any provisions of any federal, state or local law or regulation or administrative ruling relating to any aspect of its business.
(g) There are no material contracts outstanding to which the Acquired Fund is a party that have not been disclosed in the N-14 Registration Statement or its registration statement on Form N-1A or that will not otherwise be disclosed to the Acquiring Fund prior to the Valuation Time.
(h) Neither the Company nor the Acquired Fund is obligated under any provision of the Articles or the Company’s By-laws dated August 16, 1988, as may be amended (the “Company By-laws”), and neither is a party to any contract or other commitment or obligation, nor is subject to any order or decree, which would be violated by its execution of or performance under this Agreement, except insofar as the Acquired Fund and the Acquiring Fund may mutually agree that the Acquired Fund may take such necessary action to amend such contract or other commitment or obligation to cure any potential violation as a condition precedent to the Reorganization.
(i) The Acquired Fund has timely filed, or intends to file, or has obtained extensions to file, all material federal, state, and local tax returns which are required to be filed by it, and has paid or has obtained extensions to pay, all material federal, state and local taxes shown on said returns to be due and owing and all assessments received by it, up to and including the taxable year in which the Closing Date occurs. All such tax returns are true, correct and complete in all material respects. All material tax liabilities of the Acquired Fund have been adequately provided for on its books, and no tax deficiency or liability of the Acquired Fund has been asserted and no question with respect thereto has been raised by the Internal Revenue Service or by any state or local tax authority for taxes in excess of those already paid, up to and including the taxable year in which the Closing Date occurs.
(j) As used in this Agreement, the term “Acquired Fund Investments” shall mean: (i) the investments of the Acquired Fund shown on its schedule of investments as of the Valuation Time furnished to the Acquiring Fund; and (ii) all other assets owned by the Acquired Fund or liabilities incurred as of the Valuation Time that have been disclosed in writing to the Acquiring Fund. At the Valuation Time and the Closing Date, the Acquired Fund will have full right, power and authority to sell, assign, transfer and deliver the Acquired Fund Investments. At the Closing Date, subject only to the obligation to deliver the Acquired Fund Investments as contemplated by this Agreement, the Acquired Fund will have good and marketable title to all of the Acquired Fund Investments, and the Acquiring Fund will acquire all of the Acquired Fund Investments free and clear of any encumbrances, liens or security interests and without any restrictions upon the transfer thereof (except those imposed by the federal or state securities laws and those imperfections of title or encumbrances as do not materially detract from the value or use of the Acquired Fund Investments or materially affect title thereto).
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(k) No consent, approval, authorization or order of any court or governmental authority is required for the consummation by the Acquired Fund of the Reorganization, except such as may be required under the 1933 Act, the 1934 Act, the 1940 Act or state securities laws.
(l) The N-14 Registration Statement, on the effective date of the N-14 Registration Statement, at the time of the shareholders’ meeting referred to in Section 6(b) of this Agreement and at the Closing Date, insofar as it relates to the Acquired Fund:
(A) did and will comply in all material respects with the provisions of the 1933 Act, the 1934 Act and the 1940 Act and the rules and regulations thereunder, and
(B) does not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Proxy Statement/Prospectus included therein did not or will not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that none of the representations and warranties in this sub-section shall apply to statements in or omissions from the N-14 Registration Statement made in reliance upon and in conformity with information furnished by the Acquiring Fund for use in the N-14 Registration Statement.
(m) All issued and outstanding shares of the Acquired Fund are, and at the Closing Date will be, duly and validly issued and outstanding, fully paid and nonassessable by the Acquired Fund (“Acquired Fund Shares”). The Acquired Fund does not have outstanding any security of one class that is convertible into any other class of the Acquired Fund Shares.
(n) All of the issued and outstanding shares of the Acquired Fund were offered for sale and sold in conformity with all applicable federal and state securities laws.
(o) The books and records of the Acquired Fund made available to the Acquiring Fund and/or its counsel are substantially true and correct and contain no material misstatements or omissions with respect to the operations of the Acquired Fund.
(p) The Acquired Fund will not sell or otherwise dispose of any of the Merger Shares to be received in the Reorganization, except in distribution to the shareholders of the Acquired Fund, as provided in Section 3 of this Agreement.
(q) The Acquired Fund is not under the jurisdiction of a court in a “Title 11 or similar case” (within the meaning of Section 368(a)(3)(A) of the Code).
3. The Reorganization.
(a) Subject to the requisite approval of the shareholders of the Acquired Fund, and to the other terms and conditions contained herein, the Acquired Fund agrees to sell, convey, transfer and deliver to the Acquiring Fund, and the Acquiring Fund agrees to acquire from the Acquired Fund, on the Closing Date, all of the Acquired Fund Investments (including interest accrued as of the Valuation Time on debt instruments) and to assume all of the known liabilities of the Acquired Fund, in exchange for that number of Merger Shares provided for in Section 4. Pursuant to this Agreement, as soon as practicable after the Closing Date, the Company will redeem its Acquired Fund Shares in exchange for all Merger Shares received by it and will distribute such Merger Shares to its shareholders. Such distributions shall be accomplished by the opening of shareholder accounts on the share ledger records of the Acquiring Fund in the amounts due the shareholders of the Acquired Fund based on their respective holdings in the Acquired Fund as of the Valuation Time.
(b) The Acquired Fund will pay or cause to be paid to the Acquiring Fund any interest the Acquired Fund receives on or after the Closing Date with respect to any of the Acquired Fund Investments transferred to the Acquiring Fund hereunder.
(c) The Valuation Time shall be 4:00 p.m., Eastern Time, on the Closing Date, or such earlier or later day and time as may be mutually agreed upon in writing (the “Valuation Time”).
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(d) Recourse for known liabilities assumed from the Acquired Fund by the Acquiring Fund in the Reorganization will be limited to the assets acquired by the Acquiring Fund. The known liabilities of the Acquired Fund, as of the Valuation Time, shall be confirmed to the Acquiring Fund pursuant to Section 2(e) of this Agreement.
(e) The Acquired Fund will cease operations and be terminated as a series of the Company following the Closing Date.
4. Valuation.
(a) On the Closing Date, the Acquiring Fund will deliver to the Acquired Fund a number of full and fractional Merger Shares having an aggregate net asset value equal, in the case of Class I and Class A shares of the Acquiring Fund, to the value of the assets of the Acquired Fund attributable to Institutional Class and Investor Class Shares of the Acquired Fund, respectively, on such date less the value of the liabilities attributable to Institutional Class and Investor Class shares of the Acquired Fund assumed by the Acquiring Fund on that date, determined as hereinafter provided in this Section 4.
(b) The net asset value of the Merger Shares to be delivered to the Acquired Fund, the value of the assets attributable to the Acquired Fund Shares, and the value of the liabilities of the Acquired Fund to be assumed by the Acquiring Fund, shall in each case be determined as of the Valuation Time.
(c) The net asset value of the Merger Shares shall be computed in the manner set forth in the then-current prospectus or statement of additional information of the Acquiring Fund. The value of the assets and liabilities of the Acquired Fund shall be determined by the Acquiring Fund, in cooperation with the Acquired Fund, pursuant to procedures which the Acquiring Fund would use in determining the fair market value of the Acquiring Fund’s assets and liabilities.
(d) No adjustment shall be made in the net asset value of either the Acquired Fund or the Acquiring Fund to take into account differences in realized and unrealized gains and losses.
(e) The Acquiring Fund shall issue the Merger Shares to the Acquired Fund. The Acquired Fund shall promptly distribute the Merger Shares to the shareholders of the Acquired Fund by establishing open accounts for each Acquired Fund shareholder on the share ledger records of the Acquiring Fund. Certificates representing Merger Shares will not be issued to Acquired Fund shareholders.
(f) The Acquiring Fund shall assume all of the known liabilities of the Acquired Fund, whether accrued or contingent, in connection with the acquisition of assets and subsequent liquidation and dissolution of the Acquired Fund or otherwise, except for the Acquired Fund’s liabilities, if any, arising pursuant to this Agreement.
5. Payment of Expenses.
(a) John Hancock Investment Management LLC will pay all reasonable costs and expenses, including legal counsel fees and proxy solicitation costs, if any, of Boston Partners Global Investors, Inc., the Company, and the Acquired Fund incurred in connection with the Reorganization up to a maximum of $200,000. Boston Partners Global Investors, Inc. will be responsible for their own costs and expenses, as well as the cost and expenses of the Company and the Acquired Fund, incurred in connection with the Reorganization that, collectively, exceed $200,000.
(b) Notwithstanding any other provisions of this Agreement, if for any reason the Reorganization contemplated by this Agreement is not consummated, neither the Acquiring Fund nor the Acquired Fund shall be liable to the other for any damages resulting therefrom, including, without limitation, consequential damages, except as specifically set forth above.
(c) Notwithstanding any of the foregoing, costs and expenses will in any event be paid by the party directly incurring them if and to the extent that the payment by another party of such costs and expenses would result in the disqualification of such party as a RIC within the meaning of Subchapter M or would prevent the Reorganization from qualifying as a reorganization within the meaning of Section 368(a)(1)(F) of the Code.
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6. Covenants of the Acquired Fund and the Acquiring Fund.
The Acquired Fund and the Acquiring Fund hereby covenant and agree with the other as follows:
(a) Each of the Acquired Fund and the Acquiring Fund will operate its business as presently conducted in the ordinary course of business between the date hereof and the Closing Date, it being understood that with respect to the Acquired Fund, such ordinary course of business will include regular and customary periodic dividends and distributions, and with respect to the Acquiring Fund, it shall be limited to such actions as are customary to the organization of a new series prior to its commencement of operations.
(b) The Company, on behalf of the Acquired Fund, will call a meeting of its shareholders to be held prior to the Closing Date to consider and act upon this Agreement and take all other reasonable action necessary to obtain the required shareholder approval of the Reorganization contemplated hereby.
(c) In connection with the Acquired Fund shareholders’ meeting referred to in sub-section (b) above, the Acquiring Fund will prepare the Prospectus/Proxy Statement for such meeting, to be included in the N -14 Registration Statement, which the Trust, on behalf of the Acquiring Fund, will prepare and file for registration under the 1933 Act of the Merger Shares to be distributed to the Acquired Fund’s shareholders pursuant hereto, all in compliance with the applicable requirements of the 1933 Act, the 1934 Act, and the 1940 Act. The Acquiring Fund will use its best efforts to provide for the N-14 Registration Statement to become effective as promptly as practicable. The Acquired Fund and the Acquiring Fund will cooperate fully with each other, and each will furnish to the other the information relating to itself to be set forth in the N-14 Registration Statement, as required by the 1933 Act, the 1934 Act, the 1940 Act and the rules and regulations thereunder and the state securities laws.
(d) The information to be furnished by the Acquired Fund and the Acquiring Fund for use in the N-14 Registration Statement shall be accurate and complete in all material respects and shall comply with federal securities and other laws and regulations thereunder applicable thereto.
(e) Reserved.
(f) Subject to the provisions of this Agreement, the Acquired Fund and the Acquiring Fund will each take, or cause to be taken, all action, and do or cause to be done, all things reasonably necessary, proper or advisable to cause the conditions to the other party’s obligations to consummate the transactions contemplated hereby to be met or fulfilled and otherwise to consummate and make effective such transactions.
(g) The Trust, having filed a post-effective amendment to its Registration Statement on Form N-1A (the “Trust’s N-1A Registration Statement”) with the Commission registering the Acquiring Fund and its shares under the 1933 Act and 1940 Act, shall file any supplements and amendments as may be required. The Acquiring Fund shall use all reasonable efforts to obtain the approvals and authorizations required by the 1933 Act, the 1940 Act, and to register the Acquiring Fund’s shares with such state securities agencies as it may deem appropriate, in order to commence operations on the Closing Date.
(h) The Company shall, on behalf of the Acquired Fund:
(A) following the consummation of the Reorganization, terminate the Acquired Fund in accordance with the laws of the State of Maryland, the Articles and the Company By-laws, the 1940 Act and any other applicable law;
(B) not make any distributions of any Merger Shares other than to the respective Acquired Fund shareholders and without first paying or adequately providing for the payment of all of its respective liabilities not assumed by the Acquiring Fund, if any; and
(C) on and after the Closing Date, not conduct any business on behalf of the Acquired Fund except in connection with the termination of the Acquired Fund.
(i) Each of the Acquired Fund and the Acquiring Fund agrees that by the Closing Date all of its federal and other tax returns and reports required to be filed on or before such date (taking into account extensions) shall have been filed, and either all taxes shown as due on said returns have been paid or adequate liability reserves have been provided for the payment of such taxes.
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(j) The Acquiring Fund agrees to report the Reorganization as a reorganization qualifying under Section 368(a)(1)(F) of the Code, with the Acquiring Fund as the successor to the Acquired Fund. Neither the Acquiring Fund nor the Acquired Fund shall take any action or cause any action to be taken (including, without limitation, the filing of any tax return) that results in the failure of the Reorganization to qualify as a reorganization within the meaning of Section 368(a)(1)(F) of the Code or is inconsistent with the treatment of the Reorganization as a reorganization within the meaning of such Code section. At or prior to the Closing Date, the Company, the Trust, the Acquiring Fund, and the Acquired Fund will take such action, or cause such action to be taken, as is reasonably necessary to enable Dechert LLP (“Dechert”), special counsel to the Acquiring Fund, to render the tax opinion required herein (including, without limitation, each party’s execution of representations reasonably requested by and addressed to Dechert).
(k) In connection with the covenant in subsection (i) above, each of the Acquired Fund and Acquiring Fund will cooperate with each other in filing any tax return, amended return or claim for refund, determining a liability for taxes or a right to a refund of taxes or participating in or conducting any audit or other proceeding in respect of taxes. The Acquiring Fund will retain for a period of ten (10) years following the Closing Date all returns, schedules and work papers and all material records or other documents relating to tax matters of the Acquired Fund for such Acquired Fund’s taxable period first ending after the Closing Date and for all prior taxable periods.
(l) After the Closing Date, the Acquired Fund shall prepare, or cause its agents to prepare, any federal, state or local tax returns required to be filed by the Acquired Fund in accordance with applicable law with respect to the tax periods ending on or before the Closing Date and shall further cause such tax returns to be duly filed with the appropriate taxing authorities.
7. Closing Date.
(a) Delivery of the assets of the Acquired Fund to be transferred, together with any other Acquired Fund Investments, assumption of the known liabilities of the Acquired Fund to be assumed, and delivery of the Merger Shares to be issued as provided in this Agreement shall be made at such place and time as the Acquired Fund and Acquiring Fund shall mutually agree, as of the close of business on September 27, 2024 or at such other time and date agreed to by the Acquired Fund and the Acquiring Fund, the date and time upon which such delivery is to take place being referred to herein as the “Closing Date.”
(b) To the extent that any Acquired Fund Investments, for any reason, are not transferable on the Closing Date, the Acquired Fund shall cause such Acquired Fund Investments to be transferred to the Acquiring Fund’s account with its custodian at the earliest practicable date thereafter.
(c) The Acquired Fund will deliver to the Acquiring Fund on the Closing Date: (i) copies of all relevant tax books and records; and (ii) confirmation or other adequate evidence as to the tax basis of the Acquired Fund Investments delivered to the Acquiring Fund hereunder.
(d) As soon as practicable after the close of business on the Closing Date, the Acquired Fund shall deliver to the Acquiring Fund a list of the names and addresses of all of the shareholders of record of the Acquired Fund on the Closing Date and the number of Acquired Fund Shares owned by each such shareholder, certified to the best of its knowledge and belief by the transfer agent for the Acquired Fund or by its President.
8. Conditions of the Acquired Fund’s Obligations.
The obligations of the Acquired Fund hereunder shall be subject to the following conditions:
(a) That this Agreement shall have been adopted, and the Reorganization shall have been approved, by the Board and that the Acquiring Fund shall have delivered to the Acquired Fund a copy of the resolutions approving this Agreement adopted by the Board certified by its Secretary.
(b) Reserved.
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(c) That the Acquiring Fund shall have furnished to the Acquired Fund a certificate signed by the Acquiring Fund’s President (or any Vice President), its Chief Financial Officer, or its Treasurer (or any Assistant Treasurer), dated as of the Closing Date, certifying that, as of the Valuation Time and as of the Closing Date, all representations and warranties of the Acquiring Fund made in this Agreement are true and correct in all material respects with the same effect as if made at and as of such dates, and that the Acquiring Fund has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to each of such dates.
(d) That there shall not be any material litigation pending with respect to the matters contemplated by this Agreement.
(e) That the Acquired Fund shall have received the opinion(s), in form satisfactory to the Company, of Dechert, special counsel for the Acquiring Fund, dated as of the Closing Date, addressed to the Acquired Fund substantially in the form and to the effect that:
(A) both the Acquiring Fund and the Trust are duly formed and validly existing under the laws of the Commonwealth of Massachusetts;
(B) the Acquiring Fund is a separate series of the Trust, an open-end, management investment company registered under the 1940 Act;
(C) this Agreement and the Reorganization provided for herein and the execution of this Agreement have been duly authorized and approved by all requisite action of the Board, and this Agreement has been duly executed and delivered by the Trust on behalf of the Acquiring Fund and (assuming this Agreement is a valid and binding obligation of the other party hereto) is a valid and binding obligation of the Acquiring Fund;
(D) neither the execution or delivery by the Trust on behalf of the Acquiring Fund of this Agreement nor the consummation by the Acquiring Fund of the Reorganization contemplated hereby violates any provision of any statute or any published regulation or any judgment or order disclosed to counsel by the Acquiring Fund as being applicable to the Acquiring Fund;
(E) the Merger Shares have been duly authorized and, upon issuance thereof in accordance with this Agreement, will be validly issued, fully paid and nonassessable, except to the extent shareholders could under certain circumstances, in accordance with Massachusetts law, be held personally liable for the obligations of the Acquiring Fund; and
(F) to their knowledge and subject to the qualifications set forth below, the execution and delivery by the Trust on behalf of the Acquiring Fund of this Agreement and the consummation of the Reorganization herein contemplated do not require, under the laws of the Commonwealth of Massachusetts or any state in which the Acquiring Fund is qualified to do business or the federal laws of the United States, the consent, approval, authorization, registration, qualification or order of, or filing with, any court or governmental agency or body (except such as have been obtained under the 1933 Act, the 1934 Act, the 1940 Act or the rules and regulations thereunder). Counsel need express no opinion, however, as to any such consent, approval, authorization, registration, qualification, order or filing which may be required as a result of the involvement of other parties to this Agreement in the transactions herein contemplated because of their legal or regulatory status or because of any other facts specifically pertaining to them.
(f) That the Acquired Fund shall have obtained an opinion, in form satisfactory to the Company, from Dechert dated as of the Closing Date (which opinion will be subject to certain qualifications), addressed to the Company, on behalf of the Acquired Fund, and based upon such representations of the parties as Dechert may reasonably request and the existing provisions of the Code, Treasury regulations promulgated thereunder, current administrative rules, and court decisions, that for federal income tax purposes:
(A) The Reorganization will constitute a “reorganization” within the meaning of Section 368(a)(1)(F) of the Code, and the Acquired Fund and the Acquiring Fund will each be a “party to a reorganization” within the meaning of Section 368(b) of the Code;
(B) No gain or loss will be recognized by the Acquired Fund upon the transfer of all of its assets to the Acquiring Fund solely in exchange for Merger Shares and the assumption of the known liabilities of the Acquired Fund by the Acquiring Fund or upon the distribution by the Acquired Fund of the Merger Shares to the Acquired
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Fund’s shareholders in exchange for their Acquired Fund Shares, except that the Acquired Fund may be required to recognize gain or loss with respect to contracts described in Section 1256(b) of the Code or stock in a passive foreign investment company, as defined in Section 1297(a) of the Code;
(C) No gain or loss will be recognized by the Acquiring Fund upon the receipt of the Acquired Fund’s assets solely in exchange for Merger Shares and the assumption of the Acquired Fund’s known liabilities by the Acquiring Fund;
(D) The tax basis of the assets of the Acquired Fund acquired by the Acquiring Fund will be the same as the basis of those assets in the hands of the Acquired Fund immediately before the transfer, adjusted for any gain or loss required to be recognized in paragraph (B) above;
(E) The tax holding period of the assets of the Acquired Fund in the hands of the Acquiring Fund will include the Acquired Fund’s tax holding period for those assets (except where the investment activities of the Acquiring Fund have the effect of reducing or eliminating a tax holding period with respect to an asset and except for any asset with respect to which gain or loss is required to be recognized as described in paragraph (B) above);
(F) No gain or loss will be recognized by the Acquired Fund shareholders upon the exchange of their Acquired Fund Shares solely for the Merger Shares as part of the Reorganization;
(G) The aggregate tax basis of the Merger Shares received by each Acquired Fund shareholder in the Reorganization will be the same as the aggregate tax basis of such shareholder’s Acquired Fund Shares surrendered in exchange therefor;
(H) The tax holding period of the Merger Shares received by each Acquired Fund shareholder will include the tax holding period of such shareholder’s Acquired Fund Shares surrendered in the exchange, provided that the Acquired Fund Shares were held by such shareholder as capital assets on the date of the exchange; and
(I) The Acquiring Fund will succeed to and take into account the tax attributes of the Acquired Fund described in Section 381(c) of the Code, subject to the conditions and limitations specified in the Code, the regulations thereunder, and existing court decisions and published interpretations of the Code and regulations.
(g) That all proceedings taken by the Acquiring Fund and its counsel in connection with the Reorganization and all documents incidental thereto shall be satisfactory in form and substance to the Company.
(h) That the N-14 Registration Statement shall have become effective under the 1933 Act, and no stop order suspending such effectiveness shall have been instituted or, to the knowledge of the Trust or the Acquiring Fund, be contemplated by the Commission.
(i) That the Trust’s N-1A Registration Statement shall have become effective under the 1933 Act, and that no stop order suspending such effectiveness shall have been instituted or, to the knowledge of the Trust or the Acquiring Fund, be contemplated by the Commission.
9. Conditions of the Acquiring Fund’s Obligations.
The obligations of the Acquiring Fund hereunder shall be subject to the following conditions:
(a) That this Agreement shall have been adopted, and the Reorganization shall have been approved, by the Company’s Board and by the affirmative vote of the holders of a majority of the outstanding Acquired Fund Shares (as defined in the Articles); and the Acquired Fund shall have delivered to the Acquiring Fund a copy of the resolutions approving this Agreement adopted by the Company Board, and a certificate setting forth the vote of the holders of the Acquired Fund Shares obtained, each certified by such Board’s Secretary.
(b) That the Acquired Fund shall have furnished to the Acquiring Fund a statement of its assets, liabilities and capital, with values determined as provided in Section 4 of this Agreement, together with a schedule of the Acquired Fund’s investments with their respective dates of acquisition and tax costs, all as of the Valuation Time, certified on the Acquired Fund’s behalf by its President (or any Vice President) or its Treasurer (or any Assistant Treasurer), and a certificate signed by the Acquired Fund’s President (or any Vice President) or its Treasurer (or any Assistant Treasurer), dated as of the Closing Date, certifying that as of the Valuation Time and as of the Closing Date there has been no material adverse change in the financial position of the Acquired Fund since the date of the Acquired Fund’s most recent annual report or semiannual report, as applicable, other than changes in the Acquired Fund Investments since that date or changes in the market value of the Acquired Fund Investments.
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(c) That the Acquired Fund shall have furnished to the Acquiring Fund a certificate signed by the Acquired Fund’s President (or any Vice President), its Chief Financial Officer or its Treasurer (or any Assistant Treasurer), dated as of the Closing Date, certifying that, as of the Valuation Time and as of the Closing Date, all representations and warranties of the Acquired Fund made in this Agreement are true and correct in all material respects with the same effect as if made at and as of such dates, and that the Acquired Fund has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied at or prior to each of such dates.
(d) That there shall not be any material litigation pending with respect to the matters contemplated by this Agreement.
(e) That the Acquiring Fund shall have received the opinion, in form satisfactory to the Trust, of Faegre Drinker Biddle & Reath LLP, counsel for the Acquired Fund, dated as of the Closing Date, addressed to the Acquiring Fund, substantially in the form and to the effect that:
(A) both the Acquired Fund and the Company are duly formed and validly existing under the laws of the State of Maryland;
(B) the Acquired Fund is a separate series of the Company, an open-end, management investment company registered under the 1940 Act;
(C) this Agreement and the Reorganization provided for herein and the execution of this Agreement have been duly authorized and approved by all requisite action of the Company’s Board, and this Agreement has been duly executed and delivered by the Company on behalf of the Acquired Fund and (assuming this Agreement is a valid and binding obligation of the other party hereto) is a valid and binding obligation of the Acquired Fund;
(D) neither the execution or delivery by the Company on behalf of the Acquired Fund of this Agreement nor the consummation by the Acquired Fund of the Reorganization contemplated hereby violates any provision of any statute, or any published regulation or any judgment or order disclosed to counsel by the Acquired Fund as being applicable to the Acquired Fund; and
(E) to their knowledge and subject to the qualifications set forth below, the execution and delivery by the Company, on behalf of the Acquired Fund, of the Agreement and the consummation of the Reorganization herein contemplated do not require, under the laws of the State of Maryland or any state in which the Acquired Fund is qualified to do business, or the federal laws of the United States, the consent, approval, authorization, registration, qualification or order of, or filing with, any court or governmental agency or body (except such as have been obtained under the 1933 Act, the 1934 Act, the 1940 Act or the rules and regulations thereunder). Counsel need express no opinion, however, as to any such consent, approval, authorization, registration, qualification, order or filing that may be required as a result of the involvement of other parties to this Agreement in the transactions herein contemplated because of their legal or regulatory status or because of any other facts specifically pertaining to them. Such opinion may rely on an opinion of Venable LLP to the extent set forth in such opinion, in which case, Faegre Drinker Biddle & Reath LLP shall provide a copy of Venable LLP’s opinion to the Acquiring Fund.
(f) That the Acquiring Fund shall have obtained an opinion from Dechert dated as of the Closing Date (which opinion shall be subject to certain qualifications), addressed to the Trust, on behalf of the Acquiring Fund, and based upon such representations of the parties as Dechert may reasonably request and the existing provisions of the Code, Treasury regulations promulgated thereunder, current administrative rules, and court decisions, that federal income tax consequences of the Reorganization shall be as described in Section 8(f) of this Agreement.
(g) That the N-14 Registration Statement shall have become effective under the 1933 Act and no stop order suspending such effectiveness shall have been instituted or, to the knowledge of the Company or the Acquired Fund, be contemplated by the Commission.
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(h) That the Trust’s N-1A Registration Statement shall have become effective under the 1933 Act, and that no stop order suspending such effectiveness shall have been instituted or, to the knowledge of the Trust or the Acquiring Fund, be contemplated by the Commission.
(i) That the Acquired Fund’s custodian shall have delivered to the Acquiring Fund a certificate identifying all assets of the Acquired Fund held or maintained by such custodian as of the Valuation Time.
(j) That all proceedings taken by the Acquired Fund and its counsel in connection with the Reorganization and all documents incidental thereto shall be satisfactory in form and substance to the Trust.
10. Termination, Postponement and Waivers.
(a) Notwithstanding anything contained in this Agreement to the contrary, this Agreement may be terminated and the Reorganization abandoned at any time (whether before or after adoption thereof by the shareholders of the Acquired Fund) prior to the Closing Date, or the Closing Date may be postponed,
(A) by consent of the Company Board and the Board, acting on behalf of their respective Funds;
(B) by the Company Board, on behalf of the Acquired Fund, if any condition of the Acquiring Fund’s obligations set forth in Section 8 of this Agreement has not been fulfilled or waived by such Board;
(C) by the Board, on behalf of the Acquiring Fund, if any condition of the Acquired Fund’s obligations set forth in Section 9 of this Agreement has not been fulfilled or waived by such Board; or
(D) by either party because of a material breach by the other of any representation, warranty, covenant or agreement contained herein to be performed by the other party at or prior to the Reorganization.
(b) If the Reorganization contemplated by this Agreement has not been consummated by November 29, 2024, this Agreement automatically shall terminate on that date, unless a later date is agreed to by the Boards of the Company and the Trust, acting on behalf of their respective Funds.
(c) In the event of termination of this Agreement pursuant to the provisions hereof, the same shall become void and have no further effect, and there shall not be any liability on the part of the Acquired Fund, the Acquiring Fund or persons who are their directors, trustees, officers, agents, or shareholders in respect of this Agreement.
(d) At any time prior to the Closing Date, any of the terms or conditions of this Agreement may be waived by the Company Board or the Board, on behalf of whichever Fund is entitled to the benefit thereof, if, in the judgment of such Board after consultation with its counsel, such action or waiver will not have a material adverse effect on the benefits intended under this Agreement to the shareholders of the respective Fund, on behalf of which such action is taken.
(e) The respective representations and warranties contained in Sections 1 and 2 of this Agreement shall expire with, and be terminated by, the consummation of the Reorganization, and the Acquired Fund and the Acquiring Fund, and the officers, directors, trustees, agents or shareholders of such Funds shall not have any liability with respect to such representations or warranties after the Closing Date. This provision shall not protect any officer, director, trustee, agent or shareholder of either the Acquired Fund or the Acquiring Fund against any liability to the entity for which that officer, director, trustee, agent or shareholder so acts or to its shareholders, to which that officer, director, trustee, agent or shareholder otherwise would be subject by reason of willful misfeasance, bad faith, gross negligence, or reckless disregard of his or her duties in the conduct of such office.
(f) If any order or orders of the Commission with respect to this Agreement shall be issued prior to the Closing Date and shall impose any terms or conditions that are determined by action of the Boards of the Company and the Trust to be acceptable, such terms and conditions shall be binding as if a part of this Agreement without further vote or approval of the shareholders of the Acquired Fund unless such terms and conditions shall result in a change in the method of computing the number of Merger Shares to be issued to the Acquired Fund, in which event, unless such terms and conditions shall have been included in the proxy solicitation materials furnished to the shareholders of the Acquired Fund prior to the meeting at which the Reorganization shall have been approved, this Agreement shall not be consummated and shall terminate unless the Acquired Fund promptly shall call a special meeting of shareholders at which such conditions so imposed shall be submitted for approval.
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11. Indemnification.
(a) Each party (an “Indemnitor”) shall indemnify and hold the other and its officers, directors, trustees, agents and persons controlled by or controlling any of them (each an “Indemnified Party”) harmless from and against any and all losses, damages, liabilities, claims, demands, judgments, settlements, deficiencies, taxes, assessments, charges, costs and expenses of any nature whatsoever (including reasonable attorneys’ fees) including amounts paid in satisfaction of judgments, in compromise or as fines and penalties, and counsel fees reasonably incurred by such Indemnified Party in connection with the defense or disposition of any claim, action, suit or other proceeding, whether civil or criminal, before any court or administrative or investigative body in which such Indemnified Party may be or may have been involved as a party or otherwise or with which such Indemnified Party may be or may have been threatened (collectively, the “Losses”) arising out of or related to any claim of a breach of any representation, warranty or covenant made herein by the Indemnitor, provided, however, that no Indemnified Party shall be indemnified hereunder against any Losses arising directly from such Indemnified Party’s: (i) willful misfeasance; (ii) bad faith; (iii) gross negligence; or (iv) reckless disregard of the duties involved in the conduct of such Indemnified Party’s position.
(b) The Indemnified Party shall use its best efforts to minimize any liabilities, damages, deficiencies, claims, judgments, assessments, costs, and expenses in respect of which indemnity may be sought hereunder. The Indemnified Party shall give written notice to the Indemnitor within the earlier of ten (10) days of receipt of written notice to the Indemnified Party or thirty (30) days from discovery by the Indemnified Party of any matters which may give rise to a claim for indemnification or reimbursement under this Agreement. The failure to give such notice shall not affect the right of the Indemnified Party to indemnity hereunder unless such failure has materially and adversely affected the rights of the Indemnitor. At any time after ten (10) days from the giving of such notice, the Indemnified Party may, at its option, resist, settle, or otherwise compromise, or pay such claim unless it shall have received notice from the Indemnitor that the Indemnitor intends, at the Indemnitor’s sole cost and expense, to assume the defense of any such matter, in which case the Indemnified Party shall have the right, at no cost or expense to the Indemnitor, to participate in such defense. If the Indemnitor does not assume the defense of such matter, and in any event until the Indemnitor states in writing that it will assume the defense, the Indemnitor shall pay all costs of the Indemnified Party arising out of the defense until the defense is assumed; provided, however, that the Indemnified Party shall consult with the Indemnitor and obtain the Indemnitor’s prior written consent to any payment or settlement of any such claim. The Indemnitor shall keep the Indemnified Party fully apprised at all times as to the status of the defense. If the Indemnitor does not assume the defense, the Indemnified Party shall keep the Indemnitor apprised at all times as to the status of the defense. Following indemnification as provided for hereunder, the Indemnitor shall be subrogated to all rights of the Indemnified Party with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made.
12. Other Matters.
(a) All covenants, agreements, representations and warranties made under this Agreement and any certificates delivered pursuant to this Agreement shall be deemed to have been material and relied upon by each of the parties, notwithstanding any investigation made by them or on their behalf.
(b) All notices hereunder shall be sufficiently given for all purposes hereunder if in writing and delivered personally or sent by registered mail or certified mail, postage prepaid. Notice to the Acquired Fund shall be addressed to Boston Partners Global Long/Short Fund, c/o The RBB Fund, Inc., 615 East Michigan Street, Milwaukee, Wisconsin 53202, Attention: President, or at such other address as the Acquired Fund may designate by written notice to the Acquiring Fund. Notice to the Acquiring Fund shall be addressed to John Hancock Disciplined Value Global Long/Short Fund, c/o John Hancock Investment Trust, 200 Berkeley Street, Boston, Massachusetts 02216, Attention: Chief Legal Officer, or at such other address and to the attention of such other person as the Acquiring Fund may designate by written notice to the Acquired Fund. Any notice shall be deemed to have been served or given as of the date such notice is delivered personally or mailed.
(c) This Agreement supersedes all previous correspondence and oral communications between the parties regarding the Reorganization, constitutes the only understanding with respect to the Reorganization, may not be changed except by a letter of agreement signed by each party and shall be governed by and construed in accordance with the domestic substantive laws of the Commonwealth of Massachusetts applicable to agreements made and to be performed in said state, without giving effect to any choice or conflicts of law rule or provision that would result in the application of the domestic substantive laws of any other jurisdiction.
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(d) It is expressly agreed that the obligations of the Company, on behalf of the Acquired Fund, and the Trust, on behalf of the Acquiring Fund, hereunder shall not be binding upon any of its respective directors, trustees, shareholders, nominees, officers, agents, or employees personally, but shall bind only the respective Fund’s property, as provided in the Articles or the Declaration, as the case may be. The execution and delivery of this Agreement has been authorized by the Company Board, on behalf of the Acquired Fund, and by the Board, on behalf of the Acquiring Fund, and signed by authorized officers of each respective Fund, acting as such, and neither such authorization by such directors or trustees, nor such execution and delivery by such officers shall be deemed to have been made by any of them individually or to impose any liability on any of them personally, but shall bind only the Fund property on behalf of the relevant Fund as provided in the Articles or the Declaration, as the case may be.
(e) This Agreement may be executed in any number of counterparts, each of which, when executed and delivered, shall be deemed to be an original but all such counterparts together shall constitute but one instrument.
THE REST OF THIS PAGE IS INTENTIONALLY BLANK.
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IN WITNESS WHEREOF, the parties have hereunto caused this Agreement to be executed and delivered by their duly authorized officers as of the day and year first written above.
JOHN HANCOCK INVESTMENT TRUST,
on behalf of its John Hancock Disciplined Value Global Long/Short Fund
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THE RBB FUND, INC. on behalf of its Boston Partners Global Long/Short Fund | ||
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Agreed and accepted as to Section 5 only: | ||
JOHN HANCOCK INVESTMENT MANAGEMENT LLC, on behalf of itself and its affiliates | ||
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Name: |
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BOSTON PARTNERS GLOBAL INVESTORS, INC., on behalf of itself and its affiliates | ||
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Table of Contents
APPENDIX B - ADDITIONAL INFORMATION ABOUT THE ACQUIRING FUND’S INVESTMENT
STRATEGIES AND RELATED RISKS
Principal investment strategies
Investment Objective: The fund seeks long-term growth of capital.
The Board of Trustees can change the fund’s investment objective and strategies without shareholder approval. The fund will provide written notice to shareholders at least 60 days prior to a change in its 80% investment policy.
Under normal circumstances, the fund invests at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of equity and equity-related securities that meet the fund’s value criteria, including without limitation exchange-traded and over-the-counter common and preferred stocks, warrants, options, rights, convertible securities, sponsored and unsponsored depositary receipts and shares, trust certificates, limited partnership interests, shares of other investment companies (including exchange-traded funds (ETFs)), and real estate investment trusts (REITs). A convertible security is a bond, debenture, note, preferred stock or other security that may be converted into or exchanged for a prescribed amount of common stock of the same or a different issuer within a particular period of time at a specified price or formula. The fund invests, both long and short, in securities issued by U.S. and non-U.S. companies of any capitalization size.
The fund defines non-U.S. companies as companies (i) that are organized under the laws of a foreign country; (ii) whose principal trading market is in a foreign country; or (iii) that have a majority of their assets, or that derive a significant portion of their revenue or profits from businesses, investments or sales, outside of the United States. The fund principally will be invested in issuers located in countries with developed securities markets, but may also invest in issuers located in emerging markets. The fund will allocate its assets among various regions and countries, including the United States (but in no less than three different countries).
For long positions, the fund generally invests in the equity securities of issuers the manager believes are undervalued. For short positions, the fund generally takes positions in securities the manager has identified as overvalued. The manager applies a bottom-up stock selection process using a combination of fundamental and quantitative analysis of issuer-specific factors such as price-to-book value, price-to-sales and earnings ratios, dividend yields, strength of management, and cash flow. The fund may invest in securities of companies operating for three years or less (“unseasoned issuers”). The manager will determine the size of each long or short position by analyzing the tradeoff between the attractiveness of each position and its impact on the risk of the overall portfolio. The manager examines various factors in determining the value characteristics of such issuers including price-to-book value ratios and price-to-earnings ratios. These value characteristics are examined in the context of the issuer’s operating and financial fundamentals, including return on equity, earnings growth and cash flow. The manager selects securities for the fund based on an ongoing study of trends in industries and companies, earnings power and growth and other investment criteria.
The manager considers environmental, social, and/or governance (ESG) factors, alongside other relevant factors, as part of its investment process. ESG factors may include, but are not limited to, matters regarding board diversity, climate change policies, and supply chain and human rights policies. The ESG characteristics utilized in the fund’s investment process may change overtime and one or more characteristics may not be relevant with respect to all issuers that are eligible fund investments.
The fund may take both physical and synthetic long and short positions in a variety of equity and derivative instruments. The fund may hold significant synthetic short exposures. The fund’s long and short exposures will primarily be maintained on individual securities. With a physical short position, the fund sells a security that it does not own that must be returned later to meet its settlement obligations.
Derivative instruments in which the fund may take long and short positions include futures and forwards, such as equity index futures and foreign currency forward contracts; swaps, such as total return swaps; and call and put options. Derivatives may be used to reduce risk, obtain efficient market exposure, and/or enhance investment returns. Derivative instruments may magnify the fund’s gains and losses.
The fund’s portfolio is rebalanced regularly. The manager assesses each investment’s changing characteristics relative to its contribution to portfolio risk. The manager will sell an investment or close out a position that it believes no longer offers an appropriate return-to-risk trade-off. Under normal circumstances, the manager expects to maintain long and short positions so that the fund’s portfolio is approximately between 30% and 70% net long.
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The manager will sell an investment or close out a position when it no longer meets one or more investment criteria, either through obtaining target value or due to an adverse change in fundamentals or business momentum. Each holding has a target valuation established at purchase, which the manager constantly monitors and adjusts as appropriate.
To meet margin requirements, redemptions or pending investments, the fund may also temporarily hold a portion of its assets in full faith and credit obligations of the United States government and in short-term notes, commercial paper or other money market instruments.
The fund may participate as a purchaser in initial public offerings of securities (IPO). An IPO is a company’s first offering of stock to the public.
The fund may invest from time to time a significant portion of its assets in smaller issuers which are more volatile and less liquid than investments in issuers with larger market capitalizations.
The fund may invest up to 15% of its net assets in illiquid investments, including investments that are illiquid by virtue of the absence of a readily available market or legal or contractual restrictions on resale.
In general, the fund’s investments are broadly diversified over a number of industries and, as a matter of policy, the fund is limited to investing a maximum of 25% of its total assets in any one industry. The fund is non-diversified, which means that it may invest in a smaller number of issuers than a diversified fund and may invest more of its assets in the securities of a single issuer.
The fund may deviate from its principal investment strategies during transition periods, which may include the reassignment of portfolio management, a change in investment objective or strategy, a reorganization or liquidation, or the occurrence of large inflows or outflows.
Securities lending
The fund may lend its securities so long as such loans do not represent more than 331/3% of the fund’s total assets. The borrower will provide collateral to the lending portfolio so that the value of the loaned security will be fully collateralized. The collateral may consist of cash, cash equivalents, or securities issued or guaranteed by the U.S. government or its agencies or instrumentalities. The borrower must also agree to increase the collateral if the value of the loaned securities increases. As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the collateral should the borrower of the securities fail financially.
Temporary defensive investing
The fund may invest up to 100% of its assets in cash, money market instruments, repurchase agreements, or other short-term instruments for the purpose of protecting the fund in the event the manager determines that market, economic, political, or other conditions warrant a defensive posture.
To the extent that the fund is in a defensive position, its ability to achieve its investment objective will be limited.
Principal risks of investing
An investment in the fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund’s shares will go up and down in price, meaning that you could lose money by investing in the fund. Many factors influence a fund’s performance. The fund’s investment strategy may not produce the intended results.
Instability in the financial markets has led many governments, including the U.S. government, to take a number of unprecedented actions designed to support certain financial institutions and segments of the financial markets that have experienced extreme volatility and, in some cases, a lack of liquidity. Federal, state, and other governments, and their regulatory agencies or self-regulatory organizations, may take actions that affect the regulation of the instruments in which the fund invests, or the issuers of such instruments, in ways that are unforeseeable. Legislation or regulation may also change the way in which the fund itself is regulated. Such legislation or regulation could limit or preclude
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the fund’s ability to achieve its investment objective. In addition, political events within the United States and abroad could negatively impact financial markets and the fund’s performance. Further, certain municipalities of the United States and its territories are financially strained and may face the possibility of default on their debt obligations, which could directly or indirectly detract from the fund’s performance.
Governments or their agencies may also acquire distressed assets from financial institutions and acquire ownership interests in those institutions. The implications of government ownership and disposition of these assets are unclear, and such a program may have positive or negative effects on the liquidity, valuation, and performance of the fund’s portfolio holdings. Furthermore, volatile financial markets can expose the fund to greater market and liquidity risk, increased transaction costs, and potential difficulty in valuing portfolio instruments held by the fund.
The principal risks of investing in the fund are summarized in its fund summary above. Below are descriptions of the main factors that may play a role in shaping the fund’s overall risk profile. The descriptions appear in alphabetical order, not in order of importance. For further details about fund risks, including additional risk factors that are not discussed in this prospectus because they are not considered primary factors, see the fund’s Statement of Additional Information (SAI).
Convertible securities risk
Convertible securities are subject to certain risks of both equity and debt securities. Convertible securities may be converted or exchanged (by the holder or by the issuer) into shares of the underlying common stock (or cash or securities of equivalent value) at a stated exchange ratio. A convertible security may also be called for redemption or conversion by the issuer after a particular date and under certain circumstances (including a specified price) established upon issue. Convertible securities generally offer lower interest or dividend yields than nonconvertible fixed-income securities of similar credit quality because of the potential for capital appreciation. The market values of convertible securities tend to decline as interest rates increase and, conversely, to increase as interest rates decline. However, a convertible security’s market value also tends to reflect the market price of common stock of the issuing company, particularly when that stock price is greater than the convertible security’s conversion price. The conversion price is defined as the predetermined price or exchange ratio at which the convertible security can be converted or exchanged for the underlying common stock. As the market price of the underlying common stock declines below the conversion price, the price of the convertible security tends to be increasingly influenced by the yield of the convertible security. Thus, it may not decline in price to the same extent as the underlying common stock. In the event of a liquidation of the issuing company, convertible securities generally entail less risk than the company’s common stock.
Credit and counterparty risk
This is the risk that an issuer of a U.S. government security, the issuer or guarantor of a fixed-income security, the counterparty to an over-the-counter (OTC) derivatives contract (see “Hedging, derivatives, and other strategic transactions risk”), or a borrower of a fund’s securities will be unable or unwilling to make timely principal, interest, or settlement payments, or otherwise honor its obligations. Credit risk associated with investments in fixed-income securities relates to the ability of the issuer to make scheduled payments of principal and interest on an obligation. A fund that invests in fixed-income securities is subject to varying degrees of risk that the issuers of the securities will have their credit ratings downgraded or will default, potentially reducing the fund’s share price and income level. Nearly all fixed-income securities are subject to some credit risk, which may vary depending upon whether the issuers of the securities are corporations, domestic or foreign governments, or their subdivisions or instrumentalities. U.S. government securities are subject to varying degrees of credit risk depending upon whether the securities are supported by the full faith and credit of the United States; supported by the ability to borrow from the U.S. Treasury; supported only by the credit of the issuing U.S. government agency, instrumentality, or corporation; or otherwise supported by the United States. For example, issuers of many types of U.S. government securities (e.g., the Federal Home Loan Mortgage Corporation (Freddie Mac), Federal National Mortgage Association (Fannie Mae), and Federal Home Loan Banks), although chartered or sponsored by Congress, are not funded by congressional appropriations, and their fixed-income securities, including asset-backed and mortgage-backed securities, are neither guaranteed nor insured by the U.S. government. An agency of the U.S. government has placed Fannie Mae and Freddie Mac into conservatorship, a statutory process with the objective of returning the entities to normal business operations. It is unclear what effect this conservatorship will have on the securities issued or guaranteed by Fannie Mae or Freddie Mac. As a result, these securities are subject to more credit risk than U.S. government securities that are supported by the full faith and credit of the United States (e.g., U.S. Treasury bonds). When a fixed-income security is not rated, a manager may have to assess the risk of the security itself. Asset-backed securities, whose principal and interest payments are supported by pools of other assets, such as credit card receivables and automobile loans, are subject to further risks, including the risk that the obligors of the underlying assets default on payment of those assets.
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Funds that invest in below-investment-grade securities, also called junk bonds (e.g., fixed-income securities rated Ba or lower by Moody’s Investors Service, Inc. or BB or lower by S&P Global Ratings or Fitch Ratings, as applicable, at the time of investment, or determined by a manager to be of comparable quality to securities so rated) are subject to increased credit risk. The sovereign debt of many foreign governments, including their subdivisions and instrumentalities, falls into this category. Below-investment-grade securities offer the potential for higher investment returns than higher-rated securities, but they carry greater credit risk: their issuers’ continuing ability to meet principal and interest payments is considered speculative, they are more susceptible to real or perceived adverse economic and competitive industry conditions, and they may be less liquid than higher-rated securities.
In addition, a fund is exposed to credit risk to the extent that it makes use of OTC derivatives (such as forward foreign currency contracts and/or swap contracts) and engages to a significant extent in the lending of fund securities or the use of repurchase agreements. OTC derivatives transactions can be closed out with the other party to the transaction. If the counterparty defaults, a fund will have contractual remedies, but there is no assurance that the counterparty will be able to meet its contractual obligations or that, in the event of default, a fund will succeed in enforcing them. A fund, therefore, assumes the risk that it may be unable to obtain payments owed to it under OTC derivatives contracts or that those payments may be delayed or made only after the fund has incurred the costs of litigation. While the manager intends to monitor the creditworthiness of contract counterparties, there can be no assurance that the counterparty will be in a position to meet its obligations, especially during unusually adverse market conditions.
Currency risk
If currencies do not perform as the manager expects, the fund could have significant losses which exceed the amount invested in the currency instruments since currency transactions involve a small investment of cash relative to the magnitude of the risks assumed, thereby magnifying the impact of any resulting gain or loss. Currency risk includes the risk that fluctuations in exchange rates may adversely affect the U.S. dollar value of a fund’s investments. Currency risk includes both the risk that currencies in which a fund’s investments are traded, or currencies in which a fund has taken an active investment position, will decline in value relative to the U.S. dollar and, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency being hedged. Currency rates in foreign countries may fluctuate significantly for a number of reasons, including the forces of supply and demand in the foreign exchange markets, actual or perceived changes in interest rates, and intervention (or the failure to intervene) by U.S. or foreign governments or central banks, or by currency controls or political developments in the U.S. or abroad. Certain funds may engage in proxy hedging of currencies by entering into derivative transactions with respect to a currency whose value is expected to correlate to the value of a currency the fund owns or wants to own. This presents the risk that the two currencies may not move in relation to one another as expected. In that case, the fund could lose money on its investment and also lose money on the position designed to act as a proxy hedge. A fund may also take active currency positions and may cross-hedge currency exposure represented by its securities into another foreign currency. This may result in a fund’s currency exposure being substantially different than that suggested by its securities investments. All funds with foreign currency holdings and/or that invest or trade in securities denominated in foreign currencies or related derivative instruments may be adversely affected by changes in foreign currency exchange rates. Derivative foreign currency transactions (such as futures, forwards and swaps) may also involve leveraging risk, in addition to currency risk. Leverage may disproportionately increase a fund’s portfolio losses and reduce opportunities for gain when interest rates, stock prices or currency rates are changing.
Economic and market events risk
Events in certain sectors historically have resulted, and may in the future result, in an unusually high degree of volatility in the financial markets, both domestic and foreign. These events have included, but are not limited to: bankruptcies, corporate restructurings, and other similar events; bank failures; governmental efforts to limit short selling and high frequency trading; measures to address U.S. federal and state budget deficits; social, political, and economic instability in Europe; economic stimulus by the Japanese central bank; dramatic changes in energy prices and currency exchange rates; and China’s economic slowdown. Interconnected global economies and financial
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markets increase the possibility that conditions in one country or region might adversely impact issuers in a different country or region. Both domestic and foreign equity markets have experienced increased volatility and turmoil, with issuers that have exposure to the real estate, mortgage, and credit markets particularly affected. Financial institutions could suffer losses as interest rates rise or economic conditions deteriorate.
In addition, relatively high market volatility and reduced liquidity in credit and fixed-income markets may adversely affect many issuers worldwide. Actions taken by the U.S. Federal Reserve (Fed) or foreign central banks to stimulate or stabilize economic growth, such as interventions in currency markets, could cause high volatility in the equity and fixed-income markets. Reduced liquidity may result in less money being available to purchase raw materials, goods, and services from emerging markets, which may, in turn, bring down the prices of these economic staples. It may also result in emerging-market issuers having more difficulty obtaining financing, which may, in turn, cause a decline in their securities prices.
Beginning in March 2022, the Fed began increasing interest rates and has signaled the potential for further increases. As a result, risks associated with rising interest rates are currently heightened. It is difficult to accurately predict the pace at which the Fed will increase interest rates any further, or the timing, frequency or magnitude of any such increases, and the evaluation of macro-economic and other conditions could cause a change in approach in the future. Any such increases generally will cause market interest rates to rise and could cause the value of a fund’s investments, and the fund’s net asset value (NAV), to decline, potentially suddenly and significantly. As a result, the fund may experience high redemptions and, as a result, increased portfolio turnover, which could increase the costs that the fund incurs and may negatively impact the fund’s performance.
In addition, as the Fed increases the target Fed funds rate, any such rate increases, among other factors, could cause markets to experience continuing high volatility. A significant increase in interest rates may cause a decline in the market for equity securities. These events and the possible resulting market volatility may have an adverse effect on the fund.
Political turmoil within the United States and abroad may also impact the fund. Although the U.S. government has honored its credit obligations, it remains possible that the United States could default on its obligations. While it is impossible to predict the consequences of such an unprecedented event, it is likely that a default by the United States would be highly disruptive to the U.S. and global securities markets and could significantly impair the value of the fund’s investments. Similarly, political events within the United States at times have resulted, and may in the future result, in a shutdown of government services, which could negatively affect the U.S. economy, decrease the value of many fund investments, and increase uncertainty in or impair the operation of the U.S. or other securities markets. In recent years, the U.S. renegotiated many of its global trade relationships and imposed or threatened to impose significant import tariffs. These actions could lead to price volatility and overall declines in U.S. and global investment markets.
Uncertainties surrounding the sovereign debt of a number of European Union (EU) countries and the viability of the EU have disrupted and may in the future disrupt markets in the United States and around the world. If one or more countries leave the EU or the EU dissolves, the global securities markets likely will be significantly disrupted. On January 31, 2020, the United Kingdom (UK) left the EU, commonly referred to as “Brexit,” the UK ceased to be a member of the EU, and the UK and EU entered into a Trade and Cooperation Agreement. While the full impact of Brexit is unknown, Brexit has already resulted in volatility in European and global markets. There remains significant market uncertainty regarding Brexit’s ramifications, and the range and potential implications of possible political, regulatory, economic, and market outcomes are difficult to predict.
A widespread health crisis such as a global pandemic could cause substantial market volatility, exchange trading suspensions and closures, which may lead to less liquidity in certain instruments, industries, sectors or the markets generally, and may ultimately affect fund performance. For example, the coronavirus (COVID-19) pandemic has resulted and may continue to result in significant disruptions to global business activity and market volatility due to disruptions in market access, resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. While many countries have lifted some or all restrictions related to the coronavirus (COVID-19) and the United States ended the public health emergency and national emergency declarations relating to the coronavirus (COVID-19) pandemic on May 11, 2023, the continued impact of coronavirus (COVID-19) and related variants is uncertain. The impact of a health crisis and other epidemics and pandemics that may arise in the future, could affect the global economy in ways that cannot necessarily be foreseen at the present time. A health crisis may exacerbate other pre-existing political, social and economic risks. Any such impact could adversely affect the fund’s performance, resulting in losses to your investment.
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Political and military events, including in Ukraine, North Korea, Russia, Venezuela, Iran, Syria, and other areas of the Middle East, and nationalist unrest in Europe and South America, also may cause market disruptions.
As a result of continued political tensions and armed conflicts, including the Russian invasion of Ukraine commencing in February of 2022, the extent and ultimate result of which are unknown at this time, the United States and the EU, along with the regulatory bodies of a number of countries, have imposed economic sanctions on certain Russian corporate entities and individuals, and certain sectors of Russia’s economy, which may result in, among other things, the continued devaluation of Russian currency, a downgrade in the country’s credit rating, and/or a decline in the value and liquidity of Russian securities, property or interests. These sanctions could also result in the immediate freeze of Russian securities and/or funds invested in prohibited assets, impairing the ability of a fund to buy, sell, receive or deliver those securities and/or assets. These sanctions or the threat of additional sanctions could also result in Russia taking counter measures or retaliatory actions, which may further impair the value and liquidity of Russian securities. The United States and other nations or international organizations may also impose additional economic sanctions or take other actions that may adversely affect Russia-exposed issuers and companies in various sectors of the Russian economy. Any or all of these potential results could lead Russia’s economy into a recession. Economic sanctions and other actions against Russian institutions, companies, and individuals resulting from the ongoing conflict may also have a substantial negative impact on other economies and securities markets both regionally and globally, as well as on companies with operations in the conflict region, the extent to which is unknown at this time. The United States and the EU have also imposed similar sanctions on Belarus for its support of Russia’s invasion of Ukraine. Additional sanctions may be imposed on Belarus and other countries that support Russia. Any such sanctions could present substantially similar risks as those resulting from the sanctions imposed on Russia, including substantial negative impacts on the regional and global economies and securities markets.
In addition, there is a risk that the prices of goods and services in the United States and many foreign economies may decline overtime, known as deflation. Deflation may have an adverse effect on stock prices and creditworthiness and may make defaults on debt more likely. If a country’s economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse. Further, there is a risk that the present value of assets or income from investments will be less in the future, known as inflation. Inflation rates may change frequently and drastically as a result of various factors, including unexpected shifts in the domestic or global economy, and a fund’s investments may be affected, which may reduce a fund’s performance. Further, inflation may lead to the rise in interest rates, which may negatively affect the value of debt instruments held by the fund, resulting in a negative impact on a fund’s performance. Generally, securities issued in emerging markets are subject to a greater risk of inflationary or deflationary forces, and more developed markets are better able to use monetary policy to normalize markets.
Equity securities risk
Common and preferred stocks represent equity ownership in a company. Stock markets are volatile. The price of equity securities will fluctuate, and can decline and reduce the value of a fund investing in equities. The price of equity securities fluctuates based on changes in a company’s financial condition and overall market and economic conditions. The value of equity securities purchased by a fund could decline if the financial condition of the companies in which the fund is invested declines, or if overall market and economic conditions deteriorate. An issuer’s financial condition could decline as a result of poor management decisions, competitive pressures, technological obsolescence, undue reliance on suppliers, labor issues, shortages, corporate restructurings, fraudulent disclosures, irregular and/or unexpected trading activity among retail investors, or other factors. Changes in the financial condition of a single issuer can impact the market as a whole.
Even a fund that invests in high-quality, or blue chip, equity securities, or securities of established companies with large market capitalizations (which generally have strong financial characteristics), can be negatively impacted by poor overall market and economic conditions. Companies with large market capitalizations may also have less growth potential than smaller companies and may be less able to react quickly to changes in the marketplace.
The fund generally does not attempt to time the market. Because of its exposure to equities, the possibility that stock market prices in general will decline over short or extended periods subjects the fund to unpredictable declines in the value of its investments, as well as periods of poor performance.
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ESG integration risk
The manager considers ESG factors that it deems relevant or additive, along with other material factors and analysis, when managing the fund. The portion of the fund’s investments for which the manager considers these ESG factors may vary, and could increase or decrease overtime. In certain situations, the extent to which these ESG factors may be applied according to the manager’s integrated investment process may not include U.S. Treasuries, government securities, or other asset classes. ESG factors may include, but are not limited to, matters regarding board diversity, climate change policies, and supply chain and human rights policies. Incorporating ESG criteria and making investment decisions based on certain ESG characteristics, as determined by the manager, carries the risk that the fund may perform differently, including underperforming, funds that do not utilize ESG criteria, or funds that utilize different ESG criteria. Integration of ESG factors into the fund’s investment process may result in a manager making different investments for the fund than for a fund with a similar investment universe and/or investment style that does not incorporate such considerations in its investment strategy or processes, and the fund’s investment performance may be affected. Because ESG factors are one of many considerations for the fund, the manager may nonetheless include companies with low ESG characteristics or exclude companies with high ESG characteristics in the fund’s investments.
The ESG characteristics utilized in the fund’s investment process may change overtime, and different ESG characteristics may be relevant to different investments. Although the manager has established its own structure to oversee ESG integration in accordance with the fund’s investment objective and strategies, successful integration of ESG factors will depend on the manager’s skill in researching, identifying, and applying these factors, as well as on the availability of relevant data. The method of evaluating ESG factors and subsequent impact on portfolio composition, performance, proxy voting decisions and other factors, is subject to the interpretation of the manager in accordance with the fund’s investment objective and strategies. ESG factors may be evaluated differently by different managers, and may not carry the same meaning to all investors and managers. The manager may employ active shareowner engagement to raise ESG issues with the management of select portfolio companies. The regulatory landscape with respect to ESG investing in the United States is evolving and any future rules or regulations may require the fund to change its investment process with respect to ESG integration.
Exchange-traded funds (ETFs) risk
ETFs are a type of investment company bought and sold on a securities exchange. A fund could purchase shares of an ETF to gain exposure to a portion of the U.S. or a foreign market. The risks of owning shares of an ETF include the risks of directly owning the underlying securities and other instruments the ETF holds. A lack of liquidity in an ETF (e.g., absence of an active trading market) could result in the ETF being more volatile than its underlying securities. The existence of extreme market volatility or potential lack of an active trading market for an ETF’s shares could result in the ETF’s shares trading at a significant premium or discount to its net asset value (NAV). An ETF has its own fees and expenses, which are indirectly borne by the fund. A fund may also incur brokerage and other related costs when it purchases and sells ETFs. Also, in the case of passively-managed ETFs, there is a risk that an ETF may fail to closely track the index or market segment that it is designed to track due to delays in the ETF’s implementation of changes to the composition of the index or other factors.
Foreign securities risk
Funds that invest in securities traded principally in securities markets outside the United States are subject to additional and more varied risks, as the value of foreign securities may change more rapidly and extremely than the value of U.S. securities. Less information may be publicly available regarding foreign issuers, including foreign government issuers. Foreign securities may be subject to foreign taxes and may be more volatile than U.S. securities. Currency fluctuations and political and economic developments may adversely impact the value of foreign securities. The securities markets of many foreign countries are relatively small, with a limited number of companies representing a small number of industries. Additionally, issuers of foreign securities may not be subject to the same degree of regulation as U.S. issuers. Reporting, accounting, and auditing standards of foreign countries differ, in some cases significantly, from U.S. standards. There are generally higher commission rates on foreign portfolio transactions, transfer taxes, higher custodial costs, and the possibility that foreign taxes will be charged on dividends and interest payable on foreign securities, some or all of which may not be reclaimable. Also, adverse changes in investment or exchange control regulations (which may include suspension of the ability to transfer currency or assets from a country); political changes; or diplomatic developments could adversely affect a fund’s investments. In the event of nationalization, expropriation, confiscatory taxation, or other confiscation, the fund could lose a substantial portion of, or its entire investment in, a foreign security. Some of the foreign securities risks are also applicable to funds that invest a material portion of their assets in securities of foreign issuers traded in the United States.
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Depositary receipts are subject to most of the risks associated with investing in foreign securities directly because the value of a depositary receipt is dependent upon the market price of the underlying foreign equity security. Depositary receipts are also subject to liquidity risk. Additionally, the Holding Foreign Companies Accountable Act (HFCAA) could cause securities of foreign companies, including American depositary receipts, to be delisted from U.S. stock exchanges if the companies do not allow the U.S. government to oversee the auditing of their financial information. Although the requirements of the HFCAA apply to securities of all foreign issuers, the SEC has thus far limited its enforcement efforts to securities of Chinese companies. If securities are delisted, a fund’s ability to transact in such securities will be impaired, and the liquidity and market price of the securities may decline. The fund may also need to seek other markets in which to transact in such securities, which could increase the fund’s costs.
Emerging-market risk.
Investments in the securities of issuers based in countries with emerging-market economies are subject to greater levels of risk and uncertainty than investments in more-developed foreign markets, since emerging-market securities may present market, credit, currency, liquidity, legal, political, and other risks greater than, or in addition to, the risks of investing in developed foreign countries. These risks include high currency exchange-rate fluctuations; increased risk of default (including both government and private issuers); greater social, economic, and political uncertainty and instability (including the risk of war); more substantial governmental involvement in the economy; less governmental supervision and regulation of the securities markets and participants in those markets; controls on foreign investment and limitations on repatriation of invested capital and on a fund’s ability to exchange local currencies for U.S. dollars; unavailability of currency hedging techniques in certain emerging-market countries; the fact that companies in emerging-market countries may be newly organized, smaller, and less seasoned; the difference in, or lack of, auditing and financial reporting requirements or standards, which may result in the unavailability of material information about issuers; different clearance and settlement procedures, which may be unable to keep pace with the volume of securities transactions or otherwise make it difficult to engage in such transactions; difficulties in obtaining and/or enforcing legal judgments against non-U.S. companies and non-U.S. persons, including company directors and officers, in foreign jurisdictions; and significantly smaller market capitalizations of emerging-market issuers. In addition, shareholders of emerging market issuers, such as the fund, often have limited rights and few practical remedies in emerging markets. Finally, the risks associated with investments in emerging markets often are significant, and vary from jurisdiction to jurisdiction and company to company.
Hong Kong Stock Connect Program (Stock Connect) risk.
Trading in China A-Shares listed and traded on certain Chinese stock exchanges through Stock Connect, a mutual market access program designed to, among other things, enable foreign investment in the People’s Republic of China (PRC) via brokers in Hong Kong, is subject to both a number of restrictions imposed by Chinese securities regulations and local exchange listing rules as well as certain risks. Securities listed on Stock Connect may lose purchase eligibility, which could adversely affect the fund’s performance. Trading through Stock Connect is subject to trading, clearance, and settlement procedures that may continue to develop as the program matures. Any changes in laws, regulations and policies applicable to Stock Connect may affect China A-Share prices. These risks are heightened by the underdeveloped state of the PRC’s investment and banking systems in general.
Hedging, derivatives, and other strategic transactions risk
The ability of a fund to utilize hedging, derivatives, and other strategic transactions to benefit the fund will depend in part on its manager’s ability to predict pertinent market movements and market risk, counterparty risk, credit risk, interest-rate risk, and other risk factors, none of which can be assured. The skills required to utilize hedging and other strategic transactions are different from those needed to select a fund’s securities. Even if the manager only uses hedging and other strategic transactions in a fund primarily for hedging purposes or to gain exposure to a particular securities market, if the transaction does not have the desired outcome, it could result in a significant loss to a fund. The amount of loss could be more than the principal amount invested. These transactions may also increase the volatility of a fund and may involve a small investment of cash relative to the magnitude of the risks assumed, thereby magnifying the impact of any resulting gain or loss. For example, the potential loss from the use of futures can exceed a fund’s initial investment in such contracts. In addition, these transactions could result in a loss to a fund if the counterparty to the transaction does not perform as promised.
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A fund may invest in derivatives, which are financial contracts with a value that depends on, or is derived from, the value of underlying assets, reference rates, or indexes. Derivatives may relate to stocks, bonds, interest rates, currencies or currency exchange rates, and related indexes. A fund may use derivatives for many purposes, including for hedging and as a substitute for direct investment in securities or other assets. Derivatives may be used in a way to efficiently adjust the exposure of a fund to various securities, markets, and currencies without a fund actually having to sell existing investments and make new investments. This generally will be done when the adjustment is expected to be relatively temporary or in anticipation of effecting the sale of fund assets and making new investments overtime. Further, since many derivatives have a leverage component, adverse changes in the value or level of the underlying asset, reference rate, or index can result in a loss substantially greater than the amount invested in the derivative itself. Certain derivatives have the potential for unlimited loss, regardless of the size of the initial investment. When a fund uses derivatives for leverage, investments in that fund will tend to be more volatile, resulting in larger gains or losses in response to market changes. To limit risks associated with leverage, a fund is required to comply with Rule 18f-4 under the Investment Company Act of 1940, as amended (the Derivatives Rule) as outlined below. Fora description of the various derivative instruments the fund may utilize, refer to the SAI.
The regulation of the U.S. and non-U.S. derivatives markets has undergone substantial change in recent years and such change may continue. In particular, the Dodd-Frank Wall Street Reform and Consumer Protection Act, and regulations promulgated or proposed thereunder require many derivatives to be cleared and traded on an exchange, expand entity registration requirements, impose business conduct requirements on dealers that enter into swaps with a pension plan, endowment, retirement plan or government entity, and required banks to move some derivatives trading units to a non-guaranteed affiliate separate from the deposit-taking bank or divest them altogether. Although the Commodity Futures Trading Commission (CFTC) has released final rules relating to clearing, reporting, recordkeeping and registration requirements under the legislation, many of the provisions are subject to further final rule making, and thus its ultimate impact remains unclear. New regulations could, among other things, restrict the fund’s ability to engage in derivatives transactions (for example, by making certain types of derivatives transactions no longer available to the fund) and/or increase the costs of such derivatives transactions (for example, by increasing margin or capital requirements), and the fund may be unable to fully execute its investment strategies as a result. Limits or restrictions applicable to the counterparties with which the fund engages in derivative transactions also could prevent the fund from using these instruments or affect the pricing or other factors relating to these instruments, or may change the availability of certain investments.
The Derivatives Rule mandates that a fund adopt and/or implement: (i) value-at-risk limitations (VaR); (ii) a written derivatives risk management program; (iii) new Board oversight responsibilities; and (iv) new reporting and recordkeeping requirements. In the event that a fund’s derivative exposure is 10% or less of its net assets, excluding certain currency and interest rate hedging transactions, it can elect to be classified as a limited derivatives user (Limited Derivatives User) under the Derivatives Rule, in which case the fund is not subject to the full requirements of the Derivatives Rule. Limited Derivatives Users are excepted from VaR testing, implementing a derivatives risk management program, and certain Board oversight and reporting requirements mandated by the Derivatives Rule. However, a Limited Derivatives User is still required to implement written compliance policies and procedures reasonably designed to manage its derivatives risks.
The Derivatives Rule also provides special treatment for reverse repurchase agreements, similar financing transactions and unfunded commitment agreements. Specifically, a fund may elect whether to treat reverse repurchase agreements and similar financing transactions as “derivatives transactions” subject to the requirements of the Derivatives Rule or as senior securities equivalent to bank borrowings for purposes of Section 18 of the Investment Company Act of 1940. In addition, when-issued or forward settling securities transactions that physically settle within 35-days are deemed not to involve a senior security.
At any time after the date of this prospectus, legislation may be enacted that could negatively affect the assets of the fund. Legislation or regulation may change the way in which the fund itself is regulated. The advisor cannot predict the effects of any new governmental regulation that may be implemented, and there can be no assurance that any new governmental regulation will not adversely affect the fund’s ability to achieve its investment objectives.
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The use of derivative instruments may involve risks different from, or potentially greater than, the risks associated with investing directly in securities and other, more traditional assets. In particular, the use of derivative instruments exposes a fund 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, although either party may engage in an offsetting transaction that puts that party in the same economic position as if it had closed out the transaction with the counterparty or may obtain the other party’s consent to assign the transaction to a third party. If the counterparty defaults, the fund will have contractual remedies, but there is no assurance that the counterparty will meet its contractual obligations or that, in the event of default, the fund will succeed in enforcing them. For example, because the contract for each OTC derivatives transaction is individually negotiated with a specific counterparty, a fund is subject to the risk that a counterparty may interpret contractual terms (e.g., the definition of default) differently than the fund when the fund seeks to enforce its contractual rights. If that occurs, the cost and unpredictability of the legal proceedings required for the fund to enforce its contractual rights may lead it to decide not to pursue its claims against the counterparty. The fund, therefore, assumes the risk that it may be unable to obtain payments owed to it under OTC derivatives contracts or that those payments may be delayed or made only after the fund has incurred the costs of litigation. While a manager intends to monitor the creditworthiness of counterparties, there can be no assurance that a counterparty will meet its obligations, especially during unusually adverse market conditions. To the extent a fund contracts with a limited number of counterparties, the fund’s risk will be concentrated and events that affect the creditworthiness of any of those counterparties may have a pronounced effect on the fund. Derivatives are also subject to a number of other risks, including market risk, liquidity risk and operational risk. Since the value of derivatives is calculated and derived from the value of other assets, instruments, or references, there is a risk that they will be improperly valued. Derivatives also involve the risk that changes in their value may not correlate perfectly with the assets, rates, or indexes they are designed to hedge or closely track. Suitable derivatives transactions may not be available in all circumstances. The fund is also subject to the risk that the counterparty closes out the derivatives transactions upon the occurrence of certain triggering events. In addition, a manager may determine not to use derivatives to hedge or otherwise reduce risk exposure. Government legislation or regulation could affect the use of derivatives transactions and could limit a fund’s ability to pursue its investment strategies.
A detailed discussion of various hedging and other strategic transactions appears in the SAI. To the extent that the fund utilizes the following list of certain derivatives and other strategic transactions, it will be subject to associated risks. The main risks of each appear below.
Foreign currency forward contracts. Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), foreign currency risk, and risk of disproportionate loss are the principal risks of engaging in transactions involving foreign currency forward contracts.
Futures contracts. Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), and risk of disproportionate loss are the principal risks of engaging in transactions involving futures contracts.
Options. Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), and risk of disproportionate loss are the principal risks of engaging in transactions involving options. Counterparty risk does not apply to exchange-traded options.
Swaps. Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), interest-rate risk, settlement risk, risk of default of the underlying reference obligation, and risk of disproportionate loss are the principal risks of engaging in transactions involving swaps.
Total return swaps. Counterparty risk, liquidity risk (i.e., the inability to enter into closing transactions), market risk, interest-rate risk, settlement risk, risk of default of the underlying reference obligation, and risk of disproportionate loss are the principal risks of engaging in total return swaps.
High portfolio turnover risk
A high fund portfolio turnover rate (over 100%) generally involves correspondingly greater brokerage commission and tax expenses, which must be borne directly by a fund and its shareholders, respectively. The portfolio turnover rate of a fund may vary from year to year, as well as within a year.
Illiquid and restricted securities risk
Certain securities are considered illiquid or restricted due to a limited trading market, legal or contractual restrictions on resale or transfer, or are otherwise illiquid because they cannot be sold or disposed of in seven calendar days or less without the sale or disposition significantly changing the market value of the investment. Securities that have limitations on their resale are referred to as “restricted securities.” Certain restricted securities that are eligible for
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resale to qualified institutional purchasers may not be regarded as illiquid. Illiquid and restricted securities may be difficult to value and may involve greater risks than liquid securities. Market quotations for such securities may be volatile and/or subject to large spreads between bid and ask price. Illiquidity may have an adverse impact on market price and the fund’s ability to sell particular securities when necessary to meet the fund’s liquidity needs or in response to a specific economic event. The fund may incur additional expense when disposing of illiquid or restricted securities, including all or a portion of the cost to register the securities.
Initial public offerings (IPOs) risk
Certain funds may invest a portion of their assets in shares of IPOs. IPOs may have a magnified impact on the performance of a fund with a small asset base. The impact of IPOs on a fund’s performance will likely decrease as the fund’s asset size increases, which could reduce the fund’s returns. IPOs may not be consistently available to a fund for investing, particularly as the fund’s asset base grows. IPO shares are frequently volatile in price due to the absence of a prior public market, the small number of shares available for trading, and limited information about the issuer. Therefore, a fund may hold IPO shares for a very short period of time. This may increase the turnover of a fund and may lead to increased expenses for a fund, such as commissions and transaction costs. In addition, IPO shares can experience an immediate drop in value if the demand for the securities does not continue to support the offering price.
Leveraging risk
A fund’s use of derivatives may cause its portfolio to be leveraged (i.e., the fund’s exposure to underlying securities, assets or currencies exceeds its net asset value). Leveraging long exposures increases a fund’s losses when the value of its investments declines. Because many derivatives have a leverage component (i.e., a notional value in excess of the assets needed to establish and/or maintain the derivative position), adverse changes in the value or level of the underlying asset, rate, or index may result in a loss substantially greater than the amount invested in the derivative itself. In the case of swaps, the risk of loss generally is related to a notional principal amount, even if the parties have not made any initial investment. Some derivatives have the potential for unlimited loss, regardless of the size of the initial investment.
Liquidity risk
The extent (if at all) to which a security may be sold or a derivative position closed without negatively impacting its market value may be impaired by reduced market activity or participation, legal restrictions, or other economic and market impediments. Funds with principal investment strategies that involve investments in securities of companies with smaller market capitalizations, foreign securities, derivatives, or securities with substantial market and/or credit risk tend to have the greatest exposure to liquidity risk. Exposure to liquidity risk may be heightened for funds that invest in securities of emerging markets and related derivatives that are not widely traded, and that may be subject to purchase and sale restrictions.
Non-diversified risk
Overall risk can be reduced by investing in securities from a diversified pool of issuers, while overall risk is increased by investing in securities of a small number of issuers. If a fund is not diversified within the meaning of the Investment Company Act of 1940, as amended, that means it is allowed to invest a large portion of assets in any one issuer or a small number of issuers, which may result in greater susceptibility to associated risks. As a result, credit, market, and other risks associated with a non-diversified fund’s investment strategies or techniques may be more pronounced than for funds that are diversified.
Operational and cybersecurity risk
With the increased use of technologies, such as mobile devices and “cloud”-based service offerings and the dependence on the internet and computer systems to perform necessary business functions, the fund’s service providers are susceptible to operational and information or cybersecurity risks that could result in losses to the fund and its shareholders. Intentional cybersecurity breaches include unauthorized access to systems, networks, or devices (such as through “hacking” activity or “phishing”); infection from computer viruses or other malicious software code; and attacks that shut down, disable, slow, or otherwise disrupt operations, business processes, or website access or functionality. Cyber-attacks can also be carried out in a manner that does not require gaining unauthorized access, such as causing denial-of-service attacks on the service providers’ systems or websites rendering them unavailable to intended users or via “ransomware” that renders the systems inoperable until appropriate actions are taken. In addition, unintentional incidents can occur, such as the inadvertent release of confidential information (possibly resulting in the violation of applicable privacy laws).
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A cybersecurity breach could result in the loss or theft of customer data or funds, loss or theft of proprietary information or corporate data, physical damage to a computer or network system, or costs associated with system repairs. Such incidents could cause a fund, the advisor, a manager, or other service providers to incur regulatory penalties, reputational damage, additional compliance costs, litigation costs or financial loss. In addition, such incidents could affect issuers in which a fund invests, and thereby cause the fund’s investments to lose value.
Cyber-events have the potential to materially affect the fund and the advisor’s relationships with accounts, shareholders, clients, customers, employees, products, and service providers. The fund has established risk management systems reasonably designed to seek to reduce the risks associated with cyber-events. There is no guarantee that the fund will be able to prevent or mitigate the impact of any or all cyber-events.
The fund is exposed to operational risk arising from a number of factors, including, but not limited to, human error, processing and communication errors, errors of the fund’s service providers, counterparties, or other third parties, failed or inadequate processes and technology or system failures.
In addition, other disruptive events, including (but not limited to) natural disasters and public health crises may adversely affect the fund’s ability to conduct business, in particular if the fund’s employees or the employees of its service providers are unable or unwilling to perform their responsibilities as a result of any such event. Even if the fund’s employees and the employees of its service providers are able to work remotely, those remote work arrangements could result in the fund’s business operations being less efficient than under normal circumstances, could lead to delays in its processing of transactions, and could increase the risk of cyber-events.
Preferred stock risk
Preferred stock generally has a preference as to dividends and liquidation over an issuer’s common stock but ranks junior to debt securities in an issuer’s capital structure. Unlike interest payments on debt securities, preferred stock dividends are payable only if declared by the issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption provisions.
Real estate investment trust (REIT) risk
REITs are subject to risks associated with the ownership of real estate. Some REITs experience market risk and liquidity risk due to investment in a limited number of properties, in a narrow geographic area, or in a single property type, which increases the risk that such REIT could be unfavorably affected by the poor performance of a single investment or investment type. These companies are also sensitive to factors such as changes in real estate values and property taxes, interest rates, cash flow of underlying real estate assets, supply and demand, and the management skill and creditworthiness of the issuer. Borrowers could default on or sell investments that a REIT holds, which could reduce the cash flow needed to make distributions to investors. In addition, REITs may also be affected by tax and regulatory requirements impacting the REITs’ ability to qualify for preferential tax treatments or exemptions. REITs require specialized management and pay management expenses. REITs also are subject to physical risks to real property, including weather, natural disasters, terrorist attacks, war, or other events that destroy real property.
REITs include equity REITs and mortgage REITs. Equity REITs may be affected by changes in the value of the underlying property owned by the trusts, while mortgage REITs may be affected by the quality of any credit extended. Further, equity and mortgage REITs are dependent upon management skills and generally may not be diversified. Equity and mortgage REITs are also subject to heavy cash flow dependency, defaults by borrowers or lessees, and self-liquidations. In addition, equity and mortgage REITs could possibly fail to qualify for tax-free pass-through of income under the Internal Revenue Code of 1986, as amended (the Code), or to maintain their exemptions from registration under the Investment Company Act of 1940, as amended. The above factors may also adversely affect a borrower’s or a lessee’s ability to meet its obligations to the REIT. In the event of a default by a borrower or lessee, the REIT may experience delays in enforcing its rights as a mortgagee or lessor and may incur substantial costs associated with protecting its investments. In addition, even many of the larger REITs in the industry tend to be small to medium-sized companies in relation to the equity markets as a whole. Moreover, shares of REITs may trade less frequently and, therefore, are subject to more erratic price movements than securities of larger issuers.
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Short sales risk
The fund may make short sales of securities. This means the fund may sell a security that it does not own in anticipation of a decline in the market value of the security. The fund generally borrows the security to deliver to the buyer in a short sale. The fund must then buy the security at its market price when the borrowed security must be returned to the lender. Short sales involve costs and risk. The fund must pay the lender interest on a security it borrows, and the fund will lose money if the price of the borrowed security increases between the time of the short sale and the date when the fund replaces the borrowed security. Further, if other short positions of the same security are closed out at the same time, a “short squeeze” can occur where demand exceeds the supply for the security sold short. A short squeeze makes it more likely that the fund will need to replace the borrowed security at an unfavorable price. The fund may also make short sales “against the box.” In a short sale against the box, at the time of sale, the fund owns or has the right to acquire the identical security, or one equivalent in kind or amount, at no additional cost.
Subject to regulatory requirements, until the fund closes its short position or replaces a borrowed security, the fund will comply with all applicable regulatory requirements, including the Derivatives Rule.
Small and mid-sized company risk
Market risk and liquidity risk may be pronounced for securities of companies with medium-sized market capitalizations and are particularly pronounced for securities of companies with smaller market capitalizations. These companies may have limited product lines, markets, or financial resources, or they may depend on a few key employees. The securities of companies with medium and smaller market capitalizations may trade less frequently and in lesser volume than more widely held securities, and their value may fluctuate more sharply than those securities. They may also trade in the OTC market or on a regional exchange, or may otherwise have limited liquidity. Investments in less-seasoned companies with medium and smaller market capitalizations may present greater opportunities for growth and capital appreciation, but also involve greater risks than are customarily associated with more established companies with larger market capitalizations. These risks apply to all funds that invest in the securities of companies with smaller- or medium-sized market capitalizations. For purposes of the fund’s investment policies, the market capitalization of a company is based on its capitalization at the time the fund purchases the company’s securities. Market capitalizations of companies change over time. The fund is not obligated to sell a company’s security simply because, subsequent to its purchase, the company’s market capitalization has changed to be outside the capitalization range, if any, in effect for the fund.
Synthetic short exposure risk
The fund will gain synthetic short exposure through a forward commitment through a swap agreement. If the price of the reference security has increased during this time, then the fund will incur a loss equal to the increase in price from the time that the short exposure was entered into plus any transaction costs (i.e., premiums and interest) paid to the broker-dealer to borrow securities. Therefore, synthetic short exposures involve the risk that losses may be exaggerated, potentially losing more money than the actual cost of the investment.
Unseasoned issuers risk
Unseasoned issuers may not have an established financial history and may have limited product lines, markets or financial resources. Unseasoned issuers may depend on a few key personnel for management and may be susceptible to losses and risks of bankruptcy. As a result, such securities may be more volatile and difficult to sell.
Value investment style risk
Certain equity securities (generally referred to as value securities) are purchased primarily because they are selling at prices below what the manager believes to be their fundamental value and not necessarily because the issuing companies are expected to experience significant earnings growth. The fund bears the risk that the companies that issued these securities may not overcome the adverse business developments or other factors causing their securities to be perceived by the manager to be underpriced or that the market may never come to recognize their fundamental value. A value security may not increase in price, as anticipated by the manager investing in such securities, if other investors fail to recognize the company’s value and bid up the price or invest in markets favoring faster growing companies. The fund’s strategy of investing in value securities also carries the risk that in certain markets, value securities will underperform growth securities. In addition, securities issued by U.S. entities with substantial foreign operations may involve risks relating to economic, political or regulatory conditions in foreign countries.
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Warrants risk
Warrants are rights to purchase securities at specific prices and are valid for a specific period of time. Warrant prices do not necessarily move parallel to the prices of the underlying securities, and warrant holders receive no dividends and have no voting rights or rights with respect to the assets of an issuer. The price of a warrant may be more volatile than the price of its underlying security, and a warrant may offer greater potential for capital appreciation as well as capital loss. Warrants cease to have value if not exercised prior to the expiration date. These factors can make warrants more speculative than other types of investments.
Who’s who
The following are the names of the various entities involved with the fund’s investment and business operations, along with brief descriptions of the role each entity performs.
Board of Trustees
The Trustees oversee the fund’s business activities and retain the services of the various firms that carry out the fund’s operations.
Investment advisor
The investment advisor manages the fund’s business and investment activities.
Founded in 1968, the advisor is an indirect principally owned subsidiary of John Hancock Life Insurance Company (U.S.A.), which in turn is a subsidiary of Manulife Financial Corporation.
The advisor’s parent company has been helping individuals and institutions work toward their financial goals since 1862. The advisor offers investment solutions managed by leading institutional money managers, taking a disciplined team approach to portfolio management and research, leveraging the expertise of seasoned investment professionals. As of March 31, 2024, the advisor had total assets under management of approximately $162.5 billion.
Subject to general oversight by the Board of Trustees, the advisor manages and supervises the investment operations and business affairs of the fund. The advisor selects, contracts with and compensates one or more subadvisors to manage all or a portion of the fund’s portfolio assets, subject to oversight by the advisor. In this role, the advisor has supervisory responsibility for managing the investment and reinvestment of the fund’s portfolio assets through proactive oversight and monitoring of the subadvisor and the fund, as described in further detail below. The advisor is responsible for developing overall investment strategies for the fund and overseeing and implementing the fund’s continuous investment programs and provides a variety of advisory oversight and investment research services. The advisor also provides management and transition services associated with certain fund events (e.g., strategy, portfolio manager, or subadvisor changes) and coordinates and oversees services provided under other agreements.
The advisor has ultimate responsibility to oversee a subadvisor and recommend to the Board of Trustees its hiring, termination, and replacement. In this capacity, the advisor, among other things: (i) monitors on a daily basis the compliance of the subadvisor with the investment objectives and related policies of the fund; (ii) monitors significant changes that may impact the subadvisor’s overall business and regularly performs due diligence reviews of the subadvisor; (iii) reviews the performance of the subadvisor; and (iv) reports periodically on such performance to the Board of Trustees. The advisor employs a team of investment professionals who provide these ongoing research and monitoring services.
Additional information about fund expenses
The fund’s annual operating expenses will likely vary throughout the period and from year to year. The fund’s expenses for the current fiscal year may be higher than the expenses listed in the fund’s “Annual fund operating expenses” table, for some of the following reasons: (i) a significant decrease in anticipated average net assets may result in an increase in the expense ratio because certain fund expenses do not decrease as asset levels decrease; or (ii) fees may be incurred for extraordinary events such as fund tax expenses.
Custodian
The custodian holds the fund’s assets, settles all portfolio trades, and collects most of the valuation data required for calculating the fund’s net asset value.
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Citibank, N.A.
388 Greenwich Street
New York, NY 10013
Principal distributor
The principal distributor markets the fund and distributes shares through selling brokers, financial planners, and other financial professionals.
John Hancock Investment Management Distributors LLC
200 Berkeley Street
Boston, MA 02116
Additional information
The fund has entered into contractual arrangements with various parties that provide services to the fund, which may include, among others, the advisor, subadvisor, custodian, principal distributor, and transfer agent, as described above and in the SAI. Fund shareholders are not parties to, or intended or “third-party” beneficiaries of, any of these contractual arrangements. These contractual arrangements are not intended to, nor do they, create in any individual shareholder or group of shareholders any right, either directly or on behalf of the fund, to either: (a) enforce such contracts against the service providers; or (b) seek any remedy under such contracts against the service providers.
The advisor internally credits a portion of its profits to an affiliated business, John Hancock Retirement (JHR), which is the record keeper for certain 401(k) plans that invest in Class R6 shares. JHR may reduce the record keeping fees paid to it by such 401(k) plans by a commensurate amount. JHR may discontinue this practice with adequate notice to plan sponsors.
This prospectus provides information concerning the fund that you should consider in determining whether to purchase shares of the fund. Each of this prospectus, the SAI, or any contract that is an exhibit to the fund’s registration statement, is not intended to, nor does it, give rise to an agreement or contract between the fund and any investor. Each such document also does not give rise to any contract or create rights in any individual shareholder, group of shareholders, or other person. The foregoing disclosure should not be read to suggest any waiver of any rights conferred by federal or state securities laws.
Payments to broker-dealers and other financial intermediaries
If you purchase the fund through a broker-dealer or other financial intermediary (such as a bank, registered investment advisor, financial planner, or retirement plan administrator), the fund and its related companies may pay the broker-dealer or other intermediary for the sale of fund shares and related services. These payments may create a conflict of interest by influencing the broker-dealer or other intermediary and your salesperson to recommend the fund over another investment. These payments are not applicable to Class R6 shares. Ask your salesperson or visit your financial intermediary’s website for more information.
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APPENDIX C – ADDITIONAL INFORMATION ABOUT THE ACQUIRING FUND
Choosing an eligible share class
Class A shares have a Rule 12b-1 plan that allows the class to pay fees for the sale, distribution, and service of its shares. Class I shares do not have a Rule 12b-1 plan. Your financial professional can help you decide which share class you are eligible to buy and is best for you. Each class’s eligibility guidelines are described below.
Class A shares
Class A shares are not available to group retirement plans that do not currently hold Class A shares of the fund and that are eligible to invest in Class I shares or any of the R share classes, except as provided below. Such group retirement plans include defined benefit plans, 401(k) plans, 457 plans, 403(b)(7) plans, pension and profit-sharing plans, and nonqualified deferred compensation plans. Individual retirement accounts (IRAs), Roth IRAs, SIMPLE IRAs, individual (“solo” or “single”) 401(k) plans, individual profit sharing plans, individual 403(b) plans, individual defined benefit plans, simplified employee pensions (SEPs), SAR-SEPs, 529 tuition programs and Coverdell Educational Savings Accounts are not considered group retirement plans and are not subject to this restriction on the purchase of Class A shares.
Investment in Class A shares by such group retirement plans will be permitted in the following circumstances:
• | The plan currently holds assets in Class A shares of the fund or any John Hancock fund; |
• | Class A shares of the fund or any other John Hancock fund were established as an investment option under the plan prior to January 1, 2013, and the fund’s representatives have agreed that the plan may invest in Class A shares after that date; |
• | Class A shares of the fund or any other John Hancock fund were established as a part of an investment model prior to January 1, 2013, and the fund’s representatives have agreed that plans utilizing such model may invest in Class A shares after that date; and |
• | Such group retirement plans offered through an intermediary brokerage platform that does not require payments relating to the provisions of services to the fund, such as providing omnibus account services, transaction-processing services, or effecting portfolio transactions for the fund, that are specific to assets held in such group retirement plans and vary from such payments otherwise made for such services with respect to assets held in non-group retirement plan accounts. |
Class I shares
Class I shares are offered without any sales charge to the following types of investors if they also meet the minimum initial investment requirement for purchases of Class I shares (see “Opening an account”):
• | Clients of financial intermediaries who: (i) charge such clients a fee for advisory, investment, consulting, or similar services; (ii) have entered into an agreement with the distributor to offer Class I shares through a no-load program or investment platform; or (iii) have entered into an agreement with the distributor to offer Class I shares to clients on certain brokerage platforms where the intermediary is acting solely as an agent for the investor who may be required to pay a commission and/or other forms of compensation to the intermediary. Other share classes of the fund have different fees and expenses. |
• | Retirement and other benefit plans |
• | Endowment funds, foundations, donor advised funds, and other charitable entities |
• | Any state, county, or city, or its instrumentality, department, authority, or agency |
• | Accounts registered to insurance companies, trust companies, and bank trust departments |
• | Any entity that is considered a corporation for tax purposes |
• | Investment companies, both affiliated and not affiliated with the advisor |
• | Trustees, employees of the advisor or its affiliates, employees of the subadvisor, members of the fund’s portfolio management team and the spouses and children (under age 21) of the aforementioned |
Class cost structure
Class A shares
• | A front-end sales charge, as described in the section “How sales charges for Class A and Class C shares are calculated” |
• | Distribution and service (Rule 12b-1) fees of 0.25% |
• | A 1.00% CDSC on certain shares sold within one year of purchase |
Class I shares
• | No front-end or deferred sales charges; however, if you purchase Class I shares through a broker acting solely as an agent on behalf of its customers, you may be required to pay a commission to the broker |
• | No Rule 12b-1 fees |
Rule 12b-1 fees
Rule 12b-1 fees will be paid to the fund’s distributor, John Hancock Investment Management Distributors LLC, and may be used by the distributor for expenses relating to the sale, distribution of, and shareholder or administrative services for holders of the shares of the class, and for the payment of service fees that come within Rule 2341 of the Conduct Rules of the Financial Industry Regulatory Authority (FINRA).
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Because Rule 12b-1 fees are paid out of the fund’s assets on an ongoing basis, over time they will increase the cost of your investment and may cost shareholders more than other types of sales charges.
Your broker-dealer or agent may charge you a fee to effect transactions in fund shares. Other share classes of the fund, which have their own expense structure, may be offered in separate prospectuses.
Additional payments to financial intermediaries
Class A shares of the fund are primarily sold through financial intermediaries, such as brokers, banks, registered investment advisors, financial planners, and retirement plan administrators. These firms may be compensated for selling shares of the fund in two principal ways:
• | directly, by the payment of sales commissions, if any; and |
• | indirectly, as a result of the fund paying Rule 12b-1 fees. |
Class I shares do not carry sales commissions or pay Rule 12b-1 fees. However, if you purchase Class I shares through a broker acting solely as an agent on behalf of its customers, you may be required to pay a commission to the broker.
Certain firms may request, and the distributor may agree to make, payments in addition to sales commissions and Rule 12b-1 fees, if applicable, out of the distributor’s own resources.
These additional payments are sometimes referred to as revenue sharing. These payments assist in the distributor’s efforts to promote the sale of the fund’s shares. The distributor agrees with the firm on the methods for calculating any additional compensation, which may include the level of sales or assets attributable to the firm. Not all firms receive additional compensation, and the amount of compensation varies. These payments could be significant to a firm. The distributor determines which firms to support and the extent of the payments it is willing to make. The distributor generally chooses to compensate firms that have a strong capability to distribute shares of the fund and that are willing to cooperate with the distributor’s promotional efforts.
The distributor hopes to benefit from revenue sharing by increasing the fund’s net assets, which, as well as benefiting the fund, would result in additional management and other fees for the advisor and its affiliates. In consideration for revenue sharing, a firm may feature the fund in its sales system or give preferential access to members of its sales force or management. In addition, the firm may agree to participate in the distributor’s marketing efforts by allowing the distributor or its affiliates to participate in conferences, seminars, or other programs attended by the intermediary’s sales force. Although an
intermediary may seek revenue-sharing payments to offset costs incurred by the firm in servicing its clients who have invested in the fund, the intermediary may earn a profit on these payments. Revenue-sharing payments may provide your firm with an incentive to favor the fund.
The SAI discusses the distributor’s revenue-sharing arrangements in more detail. Your intermediary may charge you additional fees other than those disclosed in this prospectus. You can ask your firm about any payments it receives from the distributor or the fund, as well as about fees and/or commissions it charges.
The distributor, advisor, and their affiliates may have other relationships with your firm relating to the provisions of services to the fund, such as providing omnibus account services, transaction-processing services, or effecting portfolio transactions for the fund. If your intermediary provides these services, the advisor or the fund may compensate the intermediary for these services. In addition, your intermediary may have other compensated relationships with the advisor or its affiliates that are not related to the fund.
How sales charges for Class A shares are calculated
Class A sales charges are as follows:
Your investment ($) | As a % of offering price* | As a % of your investment | ||||||
Up to 49,999 | 5.00 | 5.26 | ||||||
50,000-99,999 | 4.50 | 4.71 | ||||||
100,000-249,999 | 3.50 | 3.63 | ||||||
250,000-499,999 | 2.50 | 2.56 | ||||||
1,000,000 and over | See below |
* | Offering price is the net asset value pershare plus any initial sales charge. |
You may qualify for a reduced Class A sales charge if you own or are purchasing Class A, Class C, Class I, Class R2, Class R4, Class R5, or Class R6 shares of a John Hancock open-end mutual fund. To receive the reduced sales charge, you must tell your broker or financial professional at the time you purchase the fund’s Class A shares about any other John Hancockmutual funds held by you, your spouse, or your children under the age of 21. This includes investments held in an individual retirement account, in an employee benefit plan, or with a broker or financial professional other than the one handling your current purchase. John Hancock will credit the combined value, at the current offering price, of all eligible accounts to determine whether you qualify for a reduced sales charge on your current purchase. You may need to provide documentation for these accounts, such as an account statement. For more information about sales charges, reductions, and waivers, you may visit the fund’s website at jhinvestments.com, which includes hyperlinks to facilitate access to this information. You may also consult your broker or financial professional, or refer to the section entitled “Sales Charges on Class A and Class C Shares” in the fund’s SAI. You may request an SAI from your broker or financial professional by accessing the fund’s website at jhinvestments.com or by calling Signature Services at 800-225-5291.
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Investments of $1million or more
Class A shares are available with no front-end sales charge on investments of $1 million or more. There is a CDSC on any Class A sharesupon which a commission or finder’s fee was paid that are sold within one year of purchase, as follows:
Class A deferred charges on investments of $1 million or more
Years after purchase | CDSC (%) | |||
1st year | 1.00 | |||
After 1st year | None |
For purposes of this CDSC, all purchases made during a calendar month are counted as having been made on the first day of that month.
The CDSC is based on the lesser of the original purchase cost or the current market value of the shares being sold, and is not charged on shares you acquired by reinvesting your dividends. To keep your CDSC as low as possible, each time you place a request to sell shares, we will first sell any shares in your account that are not subject to a CDSC.
Sales charge reductions and waivers
The availability of certain sales charge waivers and discounts will depend on whether you purchase your shares directly from the fund or through a financial intermediary. Intermediaries may have different policies and procedures regarding the availability of front-end sales charge waivers or CDSC waivers (See Appendix 1—Intermediary sales charge waivers, which includes information about specific sales charge waivers applicable to the intermediaries identified therein).
Reducing your Class A sales charges
There are several ways you can combine multiple purchases of shares of John Hancock funds to take advantage of the breakpoints in the sales charge schedule. The first three ways can be combined in any manner.
• | Accumulation privilege—lets you add the value of any class of shares of any John Hancock open-end fund you already own to the amount of your next Class A investment for purposes of calculating the sales charge. However, Class A shares of money market funds will not qualify unless you have already paid a sales charge on those shares. |
• | Letter of intention—lets you purchase Class A shares of a fund over a 13-month period and receive the same sales charge as if all shares had been purchased at once. You can use a letter of intention to qualify for reduced sales charges if you plan to invest at least to the first breakpoint level (generally $50,000 or $100,000 depending on the specific fund) in a John Hancock fund’s Class A shares during the next 13 months. Completing a letter of intention does not obligate you to purchase additional shares. However, if you do not buy enough shares to qualify for the lower sales charges by |
the earlier of the end of the 13-month period or when you sell your shares, your sales charges will be recalculated to reflect your actual amount purchased. It is your responsibility to tell John Hancock Signature Services Inc. or your financial professional when you believe you have purchased shares totaling an amount eligible for reduced sales charges, as stated in your letter of intention. Further information is provided in the SAI. |
• | Combination privilege—lets you combine shares of all funds for purposes of calculating the Class A sales charge. |
To utilize any reduction, you must complete the appropriate section of your application, or contact your financial professional or Signature Services. Consult the SAI for additional details (see the back cover of this prospectus).
Group investment program
A group may be treated as a single purchaser under the accumulation and combination privileges. Each investor has an individual account, but the group’s investments are lumped together for sales charge purposes, making the investors potentially eligible for reduced sales charges. There is no charge or obligation to invest (although initial investments per account opened must satisfy minimum initial investment requirements specified in the section entitled “Opening an account”), and individual investors may close their accounts at any time.
To utilize this program, you must contact your financial professional or Signature Services to find out how to qualify. Consult the SAI for additional details (see the back cover of this prospectus).
CDSC waivers
As long as Signature Services is notified at the time you sell, any CDSC for Class A shares will be waived in the following cases, as applicable:
• | to make payments through certain systematic withdrawal plans |
• | redemptions pursuant to the fund’s right to liquidate an account that is below the minimum account value stated below in “Dividends and account policies,” under the subsection “Small accounts” |
• | redemptions of Class A shares by a group retirement plan that continues to offer the same or another John Hancock mutual fund as an investment to its participants |
• | redemptions made under certain liquidation, merger or acquisition transactions involving other investment companies or personal holding companies |
• | to make certain distributions from a retirement plan |
• | because of shareholder death or disability |
• | rollovers, contract exchanges, or transfers of John Hancock custodial 403(b)(7) account assets required by John Hancock as a result of its decision to discontinue maintaining and administering 403(b)(7) accounts |
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To utilize a waiver, you must contact your financial professional or Signature Services. Consult the SAI for additional details (see the back cover of this prospectus). Please note, these waivers are distinct from those described in Appendix 1, “Intermediary sales charge waivers.”
Reinstatement privilege
If you sell shares of a John Hancock fund, you may reinvest some or all of the proceeds back into the same share class of the same fund and account from which it was removed, within 120 days without a sales charge, subject to fund minimums, as long as Signature Services or your financial professional is notified before you reinvest. If you paid a CDSC when you sold your shares, you will be credited with the amount of the CDSC. Consult the SAI for additional details.
To utilize this privilege, you must contact your financial professional or Signature Services. Consult the SAI for additional details (see the back cover of this prospectus).
Waivers for certain investors
Class A shares may be offered without front-end sales charges or CDSCs to the following individuals and institutions:
• | Selling brokers and their employees and sales representatives (and their Immediate Family, as defined in the SAI) |
• | Financial intermediaries utilizing fund shares in eligible retirement platforms, fee-based, or wrap investment products |
• | Financial intermediaries who offer shares to self-directed investment brokerage accounts that may or may not charge a transaction fee to their customers |
• | Fund Trustees and other individuals who are affiliated with these or other John Hancock funds, including employees of John Hancock companies or Manulife Financial Corporation (and their Immediate Family, as defined in the SAI) |
• | Individuals exchanging shares held in an eligible fee-based program for Class A shares, provided however, subsequent purchases in Class A shares will be subject to applicable sales charges |
• | Individuals transferring assets held in a SIMPLE IRA, SEP, or SARSEP invested in John Hancock funds directly to an IRA |
• | Individuals converting assets held in an IRA, SIMPLE IRA, SEP, or SARSEP invested in John Hancock funds directly to a Roth IRA |
• | Individuals recharacterizing assets from an IRA, Roth IRA, SEP, SARSEP, or SIMPLE IRA invested in John Hancock funds back to the original account type from which they were converted |
• | Participants in group retirement plans that are eligible and permitted to purchase Class A shares as described in the “Choosing an eligible share class” section above. This waiver is contingent upon the group retirement plan being in a recordkeeping arrangement and does not apply to group retirement plans transacting business with the fund through a brokerage relationship in which sales charges are customarily imposed, unless such brokerage relationship qualifies for a sales charge waiver as described. In addition, this waiver does not apply to a group retirement plan that leaves its current recordkeeping arrangement and subsequently transacts business with the fund through a brokerage relationship in which sales charges are customarily imposed. Whether a sales charge waiver is available to your group retirement plan through its record keeper depends upon the policies and procedures of your intermediary. Please consult your financial professional for further information |
• | Terminating participants in a pension, profit-sharing, or other plan qualified under Section 401(a) of the Code, or described in Section 457(b) of the Code, (i) that is funded by certain John Hancock group annuity contracts, (ii) for which John Hancock Trust Company serves as trustee or custodian, or (iii) the trustee or custodian of which has retained John Hancock Retirement Plan Services (“RPS”) as a service provider, rolling over assets (directly or within 60 days after distribution) from such a plan (or from a John Hancock Managed IRA or John Hancock Annuities IRA into which such assets have already been rolled over) to a John Hancock custodial IRA or John Hancock custodial Roth IRA or other John Hancock branded IRA offered through Manulife | John Hancock Brokerage Services LLC that invests in John Hancock funds, or the subsequent establishment of or any rollover into a new John Hancock fund account by such terminating participants and/or their Immediate Family (as defined in the SAI), including subsequent investments into such accounts, and that are held directly at John Hancock funds or at the John Hancock Personal Financial Services (“PFS”) Financial Center |
• | Participants in a terminating pension, profit-sharing, or other plan qualified under Section 401(a) of the Code, or described in Section 457(b) of the Code (the assets of which, immediately prior to such plan’s termination, were (a) held in certain John Hancock group annuity contracts, (b) in trust or custody by John Hancock Trust Company, or (c) by a trustee or custodian which has retained John Hancock RPS as a service provider, but have been transferred from such contracts or trust funds and are held either: (i) in trust by a distribution processing organization; or (ii) in a custodial IRA or custodial Roth IRA sponsored by an authorized third-party trust company and made available through John Hancock), rolling over assets (directly or within 60 days after distribution) from such a plan to a John Hancock |
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custodial IRA or John Hancock custodial Roth IRA or other John Hancock branded IRA offered through Manulife | John Hancock Brokerage Services LLC that invests in John Hancock funds, or the subsequent establishment of or any rollover into a new John Hancock fund account by such participants and/or their Immediate Family (as defined in the SAI), including subsequent investments into such accounts, and that are held directly at John Hancock funds or at the PFS Financial Center |
• | Participants actively enrolled in a John Hancock RPS plan account (or an account the trustee of which has retained John Hancock RPS as a service provider) rolling over or transferring assets into a new John Hancock custodial IRA or John Hancock custodial Roth IRA or other John Hancock branded IRA offered through Manulife | John Hancock Brokerage Services LLC that invests in John Hancock funds through John Hancock PFS (to the extent such assets are otherwise prohibited from rolling over or transferring into such participant’s John Hancock RPS plan account), including subsequent investments into such accounts, and that are held directly at John Hancock funds or at the John Hancock PFS Financial Center |
• | Individuals rolling over assets held in a John Hancock custodial 403(b)(7) account into a John Hancock custodial IRA account |
• | Former employees/associates of John Hancock, its affiliates, or agencies rolling over (directly or indirectly within 60 days after distribution) to a new John Hancock custodial IRA or John Hancock custodial Roth IRA from the John Hancock Employee Investment-Incentive Plan (TIP), John Hancock Savings Investment Plan (SIP), or the John Hancock Pension Plan, and such participants and their Immediate Family (as defined in the SAI) subsequently establishing or rolling over assets into a new John Hancock account through the John Hancock PFS Group, including subsequent investments into such accounts, and that are held directly at John Hancock funds or at the John Hancock PFS Financial Center |
• | A member of a class action lawsuit against insurance companies who is investing settlement proceeds |
To utilize a waiver, you must contact your financial professional or Signature Services. Consult the SAI for additional details (see the back cover of this prospectus). Please note, these waivers are distinct from those described in Appendix 1, “Intermediary sales charge waivers.”
Other waivers
Front-end sales charges and CDSCs are not imposed in connection with the following transactions:
• | Exchanges from one John Hancock fund to the same class of any other John Hancock fund (see “Transaction policies” in this prospectus for additional details) |
• | Dividend reinvestments (see “Dividends and account policies” in this prospectus for additional details) |
• | In addition, the availability of certain sales charge waivers and discounts will depend on whether you purchase your shares directly from the fund or through a financial intermediary. Intermediaries may have different policies and procedures regarding the availability of front-end sales charge waivers or CDSC waivers (See Appendix 1—Intermediary sales charge waivers, which includes information about specific sales charge waivers applicable to the intermediaries identified therein). In all instances, it is the purchaser’s responsibility to notify the fund or the purchaser’s financial intermediary at the time of purchase of any relationship or other facts qualifying the purchaser for sales charge waivers or discounts. For waivers and discounts not available through a particular intermediary, shareholders will have to purchase fund shares directly from the fund or through another intermediary to receive these waivers or discounts. |
Opening an account
1 | Read this prospectus carefully. |
2 | Determine if you are eligible by referring to “Choosing an eligible share class.” |
3 | Determine how much you want to invest. The minimum initial investments for Class A, and Class I shares are described below. There are no subsequent minimum investment requirements for these share classes. |
Share Class | Minimum initial investment | |
Class A | $1,000 ($250 for group investments). However, there is no minimum initial investment for certain group retirement plans using salary deduction or similar group methods of payment, for fee-based or wrap accounts of selling firms that have executed a fee-based or wrap agreement with the distributor, or for certain other eligible investment product platforms. | |
Class I | $250,000. However, the minimum initial investment requirement may be waived, at the fund’s sole discretion, for investors in certain fee-based, wrap, or other investment platform programs, or in certain brokerage platforms where the intermediary is acting solely as an agent for the investor. The fund also may waive the minimum initial investment for other categories of investors at its discretion, including for Trustees, employees of the advisor or its affiliates, employees of the subadvisor, members of the fund’s portfolio management team and the spouses and children (under age 21) of the aforementioned. |
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4 | All shareholders must complete the account application, carefully following the instructions. If you have any questions, please contact your financial professional or call Signature Services at 800-225-5291 for Class A shares or 888-972-8696 for Class I shares. |
5 | For Class A shares, complete the appropriate parts of the account privileges application. By applying for privileges now, you can avoid the delay and inconvenience of having to file an additional application if you want to add privileges later. |
6 | Make your initial investment using the instructions under “Buying shares.” You and your financial professional can initiate any purchase, exchange, or sale of shares. |
Important information about opening a new account
To help the government fight the funding of terrorism and money laundering activities, the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act) requires all financial institutions to obtain, verify, and record information that identifies each person or entity that opens an account.
For individual investors opening an account. When you open an account, you will be asked for your name, residential address, date of birth, and Social Security number.
For investors other than individuals. When you open an account, you will be asked for the name of the entity, its principal place of business, and taxpayer identification number (TIN), and you may be requested to provide information on persons with authority or control over the account, including, but not limited to, name, residential address, date of birth, and Social Security number. You may also be asked to provide documents, such as articles of incorporation, trust instruments, or partnership agreements, and other information that will help Signature Services identify the entity. Please see the mutual fund account application for more details.
Information for plan participants
Plan participants generally must contact their plan service provider to purchase, redeem, or exchange shares. The administrator of a retirement plan or employee benefits office can provide participants with detailed information on how to participate in the plan, elect a fund as an investment option, elect different investment options, alter the amounts contributed to the plan, or change allocations among investment options. For questions about participant accounts, participants should contact their employee benefits office, the plan administrator, or the organization that provides recordkeeping services for the plan.
Financial service firms may provide some of the shareholder servicing and account maintenance services required by retirement plan accounts and their plan participants, including transfers of registration, dividend payee changes, and generation of confirmation statements, and may arrange for plan administrators to provide other investment or administrative services. Financial service firms may charge retirement plans and plan participants transaction fees and/or other additional amounts for such services. Similarly, retirement plans may charge plan participants for certain expenses. These fees and additional amounts could reduce an investment return in the fund.
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Your account
Buying shares
Class A shares
Opening an account
By check
• | Make out a check for the investment amount, payable to “John Hancock Signature Services, Inc.” |
• | Deliver the check and your completed application to your financial professional or mail them to Signature Services (address below). |
By exchange
• | Call your financial professional or Signature Services to request an exchange. |
By wire
• | Deliver your completed application to your financial professional or mail it to Signature Services. |
• | Obtain your account number by calling your financial professional or Signature Services. |
• | Obtain wiring instructions by calling Signature Services. |
• | Instruct your bank to wire the amount of your investment. Specify the fund name, the share class, your account number, and the name(s) in which the account is registered. Your bank may charge a fee to wire funds. |
By internet
• | See “By exchange” and “By wire.” |
By phone
• | See “By exchange” and “By wire.” |
Adding to an account
• | Make out a check for the investment amount, payable to “John Hancock Signature Services, Inc.” |
• | Include a note specifying the fund name, the share class, your account number, and the name(s) in which the account is registered. |
• | Deliver the check and your investment slip or note to your financial professional, or mail them to Signature Services (address below). |
• | Log on to the website below to process exchanges between funds. |
• | Call EASI-Line for automated service. |
• | Call your financial professional or Signature Services to request an exchange. |
• | Obtain wiring instructions by calling Signature Services. |
• | Instruct your bank to wire the amount of your investment. Specify the fund name, the share class, your account number, and the name(s) in which the account is registered. Your bank may charge a fee to wire funds. |
• | Verify that your bank or credit union is a member of the Automated Clearing House (ACH) system. |
• | Complete the “Bank information” section on your account application. |
• | Log on to the website below to initiate purchases using your authorized bank account. |
• | Verify that your bank or credit union is a member of the ACH system. |
• | Complete the “To purchase, exchange, or redeem shares via telephone” and “Bank information” sections on your account application. |
• | Call EASI-Line for automated service. |
• | Call your financial professional or call Signature Services between 8:00A.M. and 7:00P.M., Monday–Thursday, and on Friday, between 8:00A.M. and 6:00P.M., Eastern time. |
To add to an account using the Monthly Automatic Accumulation Program, see “Additional investor services.”
Regular mail John Hancock Signature Services, Inc. P.O. Box 219909 Kansas City, MO 64121-9909 | Express delivery John Hancock Signature Services, Inc. 430 W 7th Street Suite 219909 Kansas City, MO 64105-1407 | Website jhinvestments.com | EASI-Line (24/7 automated service) 800-338-8080 | Signature Services, Inc. 800-225-5291 |
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Your account
Buying shares
Class I shares
Opening an account
By check
• | Make out a check for the investment amount, payable to “John Hancock Signature Services, Inc.” |
• | Deliver the check and your completed application to your financial professional or mail them to Signature Services (address below). |
By exchange
• | Call your financial professional or Signature Services to request an exchange. |
By wire
• | Deliver your completed application to your financial professional or mail it to Signature Services. |
• | Obtain your account number by calling your financial professional or Signature Services. |
• | Obtain wiring instructions by calling Signature Services. |
• | Instruct your bank to wire the amount of your investment. Specify the fund name, the share class, your account number, and the name(s) in which the account is registered. Your bank may charge a fee to wire funds. |
By internet
• | See “By exchange” and “By wire.” |
By phone
• | See “By exchange” and “By wire.” |
Adding to an account
• | Make out a check for the investment amount, payable to “John Hancock Signature Services, Inc.” |
• | Include a note specifying the fund name, the share class, your account number, and the name(s) in which the account is registered. |
• | Deliver the check and your investment slip or note to your financial professional, or mail them to Signature Services (address below). |
• | Log on to the website below to process exchanges between funds. |
• | You may exchange Class I shares for other Class I shares or John Hancock Money Market Fund Class A shares. |
• | Call your financial professional or Signature Services to request an exchange. |
• | Obtain wiring instructions by calling Signature Services. |
• | Instruct your bank to wire the amount of your investment. Specify the fund name, the share class, your account number, and the name(s) in which the account is registered. Your bank may charge a fee to wire funds. |
• | Verify that your bank or credit union is a member of the Automated Clearing House (ACH) system. |
• | Complete the “Bank information” section on your account application. |
• | Log on to the website below to initiate purchases using your authorized bank account. |
• | Verify that your bank or credit union is a member of the ACH system. |
• | Complete the “To purchase, exchange, or redeem shares via telephone” and “Bank information” sections on your account application. |
• | Call EASI-Line for automated service. |
• | Call your financial professional or call Signature Services between 8:30A.M. and 5:00P.M., Eastern time, on most business days. |
Regular mail John Hancock Signature Services, Inc. P.O. Box 219909 Kansas City, MO 64121-9909 | Express delivery John Hancock Signature Services, Inc. 430 W 7th Street Suite 219909 Kansas City, MO 64105-1407 | Website jhinvestments.com | EASI-Line (24/7 automated service) 800-338-8080 | Signature Services, Inc. 800-225-5291 |
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Your account
Selling shares
Class A shares
By letter
• | Accounts of any type |
• | Sales of any amount |
By internet
• | Most accounts |
• | Sales of up to $100,000 |
By phone
• | Most accounts |
• | Sales of up to $100,000 |
By wire or electronic funds transfer (EFT)
• | Requests by letter to sell any amount |
• | Requests by internet or phone to sell up to $100,000 |
By exchange
• | Accounts of any type |
• | Sales of any amount |
To sell some or all of your shares
• | Write a letter of instruction or complete a stock power indicating the fund name, the share class, your account number, the name(s) in which the account is registered, and the dollar value or number of shares you wish to sell. |
• | Include all signatures and any additional documents that may be required (see the next page). |
• | Mail the materials to Signature Services (address below). |
• | A check will be mailed to the name(s) and address in which the account is registered, or otherwise according to your letter of instruction. |
• | Log on to the website below to initiate redemptions from your fund. |
• | Call EASI-Line for automated service. |
• | Call your financial professional or call Signature Services between 8:00A.M. and 7:00P.M., Monday–Thursday, and on Friday, between 8:00A.M. and 6:00P.M., Eastern time. |
• | To verify that the internet or telephone redemption privilege is in place on an account, or to request the form to add it to an existing account, call Signature Services. |
• | A $4 fee will be deducted from your account. Your bank may also charge a fee for this service. |
• | Obtain a current prospectus for the fund into which you are exchanging by accessing the fund’s website or by calling your financial professional or Signature Services. |
• | Log on to the website below to process exchanges between your funds. |
• | Call EASI-Line for automated service. |
• | Call your financial professional or Signature Services to request an exchange. |
To sell shares through a systematic withdrawal plan, see “Additional investor services.”
Regular mail John Hancock Signature Services, Inc. P.O. Box 219909 Kansas City, MO 64121-9909 | Express delivery John Hancock Signature Services, Inc. 430 W 7th Street Suite 219909 Kansas City, MO 64105-1407 | Website jhinvestments.com | EASI-Line (24/7 automated service) 800-338-8080 | Signature Services, Inc. 800-225-5291 |
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Your account
Selling shares in writing
Class A shares
In certain circumstances, you will need to make your request to sell shares in writing. You may need to include additional items with your request, unless they were previously provided to Signature Services and are still accurate. These items are shown in the table below. You may also need to include a signature guarantee, which protects you against fraudulent orders. You will need a signature guarantee if:
• | your address has been changed within the past 30 days or bank of record has changed within the past 15 days, and you would like the payment to be sent to your new address or bank, |
• | you are selling more than $100,000 worth of shares (this requirement is waived for certain entities operating under a signed fax trading agreement with John Hancock), or |
• | you are requesting payment other than by a check mailed to the address/bank of record and payable to the registered owner(s). |
You will need to obtain your signature guarantee from a member of the Medallion Signature Guarantee Program. Most broker-dealers, banks, credit unions, and securities exchanges are members of this program. A notary public CANNOT provide a signature guarantee. Signature Services may make exceptions to any of the signature guarantee requirements.
Seller | Requirements for written requests | |
Owners of individual, joint, or UGMA/UTMA accounts (custodial accounts for minors) | • Letter of instruction
• On the letter, the signatures and titles of all persons authorized to sign for the account, exactly as the account is registered
• Medallion signature guarantee, if applicable (see above) | |
Owners of corporate, sole proprietorship, general partner, or association accounts | • Letter of instruction
• Corporate business/organization resolution, certified within the past 12 months, or a John Hancock business/organization certification form
• On the letter and the resolution, the signature of the person(s) authorized to sign for the account
• Medallion signature guarantee, if applicable (see above) | |
Owners or trustees of trust accounts | • Letter of instruction
• On the letter, the signature(s) of the trustee(s)
• Copy of the trust document, certified within the past 12 months, or a John Hancock trust certification form
• Medallion signature guarantee, if applicable (see above) | |
Joint tenancy shareholders with rights of survivorship with deceased co-tenant(s) | • Letter of instruction signed by surviving tenant(s)
• Copy of the death certificate
• Medallion signature guarantee, if applicable (see above)
• Inheritance tax waiver, if applicable | |
Executors of shareholder estates | • Letter of instruction signed by the executor
• Copy of the order appointing executor, certified within the past 12 months
• Medallion signature guarantee, if applicable (see above)
• Inheritance tax waiver, if applicable
| |
Administrators, conservators, guardians, and other sellers, or account types not listed above | • Call Signature Services for instructions |
Regular mail John Hancock Signature Services, Inc. P.O. Box 219909 Kansas City, MO 64121-9909 | Express delivery John Hancock Signature Services, Inc. 430 W 7th Street Suite 219909 Kansas City, MO 64105-1407 | Website jhinvestments.com | EASI-Line (24/7 automated service) 800-338-8080 | Signature Services, Inc. 800-225-5291 |
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Your account
Selling shares
Class I shares
By letter
• | Sales of any amount |
By internet
• | Most accounts |
• | Sales of up to $100,000 |
By phone
Amounts up to $100,000:
• | Most accounts |
Amounts up to $5 million
• | Available to the following types of accounts: custodial accounts held by banks, trust companies, or broker-dealers; endowments and foundations; corporate accounts; group retirement plans; and pension accounts (excluding IRAs, 403(b) plans, and all John Hancock custodial retirement accounts) |
By wire or electronic funds transfer (EFT)
• | Requests by letter to sell any amount |
• | Qualified requests by phone to sell to $5 million (accounts with telephone redemption privileges) |
By exchange
• | Sales of any amount |
To sell some or all of your shares
• | Write a letter of instruction or complete a stock power indicating the fund name, the share class, your account number, the name(s) in which the account is registered, and the dollar value or number of shares you wish to sell. |
• | Include all signatures and any additional documents that may be required (see the next page). |
• | Mail the materials to Signature Services (address below). |
• | A check will be mailed to the name(s) and address in which the account is registered, or otherwise according to your letter of instruction. |
• | Certain requests will require a Medallion signature guarantee. Please refer to “Selling shares in writing” on the next page. |
• | Log on to the website below to initiate redemptions from your fund. |
• | Redemption proceeds of up to $100,000may be sent by wire or by check. A check will be mailed to the exact name(s) and address on the account. |
• | To place your request with a representative at John Hancock, call Signature Services between 8:30A.M. and 5:00P.M., Eastern time, on most business days, or contact your financial professional. |
• | Redemption proceeds exceeding $100,000 will be wired to your designated bank account, unless a Medallion signature guaranteed letter is provided requesting payment by check. Please refer to “Selling shares in writing.” |
• | To verify that the telephone redemption privilege is in place on an account, or to request the form to add it to an existing account, call Signature Services. |
• | Amounts up to $100,000 may be sent by EFT or by check. Your bank may charge a fee for this service. |
• | Amounts of $5 million or more will be sent by wire. |
• | Obtain a current prospectus for the fund into which you are exchanging by accessing the fund’s website or by calling your financial professional or Signature Services. |
• | You may only exchange Class I shares for other Class I shares or John Hancock Money Market Fund Class A shares. |
• | Call your financial professional or Signature Services to request an exchange. |
Regular mail John Hancock Signature Services, Inc. P.O. Box 219909 Kansas City, MO 64121-9909 | Express delivery John Hancock Signature Services, Inc. 430 W 7th Street Suite 219909 Kansas City, MO 64105-1407 | Website jhinvestments.com | EASI-Line (24/7 automated service) 800-338-8080 | Signature Services, Inc. 800-225-5291 |
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Your account
Selling shares in writing
Class I shares
In certain circumstances, you will need to make your request to sell shares in writing. You may need to include additional items with your request, unless they were previously provided to Signature Services and are still accurate. These items are shown in the table below. You may also need to include a signature guarantee, which protects you against fraudulent orders. You will need a signature guarantee if:
• | your address has been changed within the past 30 days or bank of record has changed within the past 15 days, and you would like the payment to be sent to your new address or bank; |
• | you are selling more than $100,000 worth of shares and are requesting payment by check (this requirement is waived for certain entities operating under a signed fax trading agreement with John Hancock); |
• | you are selling more than $5 million worth of shares from the following types of accounts: custodial accounts held by banks, trust companies, or broker-dealers; endowments and foundations; corporate accounts; group retirement plans; and pension accounts (excluding IRAs, 403(b) plans, and all John Hancock custodial retirement accounts); or |
• | you are requesting payment other than by a check mailed to the address/bank of record and payable to the registered owner(s). |
You will need to obtain your signature guarantee from a member of the Medallion Signature Guarantee Program. Most broker-dealers, banks, credit unions, and securities exchanges are members of this program. A notary public CANNOT provide a signature guarantee. Signature Services may make exceptions to any of the signature guarantee requirements.
Seller | Requirements for written requests | |
Owners of individual, joint, or UGMA/UTMA accounts (custodial accounts for minors) | • Letter of instruction
• On the letter, the signatures and titles of all persons authorized to sign for the account, exactly as the account is registered
• Medallion signature guarantee, if applicable (see above) | |
Owners of corporate, sole proprietorship, general partner, or association accounts | • Letter of instruction
• Corporate business/organization resolution, certified within the past 12 months, or a John Hancock business/organization certification form
• On the letter and the resolution, the signature of the person(s) authorized to sign for the account
• Medallion signature guarantee, if applicable (see above) | |
Owners or trustees of trust accounts | • Letter of instruction
• On the letter, the signature(s) of the trustee(s)
• Copy of the trust document, certified within the past 12 months, or a John Hancock trust certification form
• Medallion signature guarantee, if applicable (see above) | |
Joint tenancy shareholders with rights of survivorship with deceased co-tenant(s) | • Letter of instruction signed by surviving tenant(s)
• Copy of the death certificate
• Medallion signature guarantee, if applicable (see above)
• Inheritance tax waiver, if applicable
| |
Executors of shareholder estates | • Letter of instruction signed by the executor
• Copy of the order appointing executor, certified within the past 12 months
• Medallion signature guarantee, if applicable (see above)
• Inheritance tax waiver, if applicable | |
Administrators, conservators, guardians, and other sellers, or account types not listed above | • Call Signature Services for instructions |
Regular mail | Express delivery | Website | Signature Services, Inc. | |||
John Hancock Signature Services, Inc. P.O. Box 219909 Kansas City, MO 64121-9909 | John Hancock Signature Services, Inc. 430 W 7th Street Suite 219909 Kansas City, MO 64105-1407 | jhinvestments.com | 888-972-8696 |
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Your account
Transaction policies
Valuation of shares
The net asset value (NAV) for each class of shares of the fund is normally determined once daily as of the close of regular trading on the New York Stock Exchange (NYSE) (typically 4:00 P.M., Eastern time, on each business day that the NYSE is open). In case of emergency or other disruption resulting in the NYSE not opening for trading or the NYSE closing at a time other than the regularly scheduled close, the NAV may be determined as of the regularly scheduled close of the NYSE pursuant to the advisor’s Valuation Policies and Procedures. The time at which shares and transactions are priced and until which orders are accepted may vary to the extent permitted by the Securities and Exchange Commission and applicable regulations. On holidays or other days when the NYSE is closed, the NAV is not calculated and the fund does not transact purchase or redemption requests. Trading of securities that are primarily listed on foreign exchanges may take place on weekends and U.S. business holidays on which the fund’s NAV is not calculated. Consequently, the fund’s portfolio securities may trade and the NAV of the fund’s shares may be significantly affected on days when a shareholder will not be able to purchase or redeem shares of the fund.
Each class of shares of the fund has its own NAV, which is computed by dividing the total assets, minus liabilities, allocated to each share class by the number of fund shares outstanding for that class. The current NAV of the fund is available on our website at jhinvestments.com.
Valuation of securities
The Board has designated the fund’s advisor as the valuation designee to perform fair value functions for the fund in accordance with the advisor’s valuation policies and procedures. As valuation designee, the advisor will determine the fair value, in good faith, of securities and other assets held by the fund for which market quotations are not readily available and, among other things, will assess and manage material risks associated with fair value determinations, select, apply and test fair value methodologies, and oversee and evaluate pricing services and other valuation agents used in valuing the fund’s investments. The advisor is subject to Board oversight and reports to the Board information regarding the fair valuation process and related material matters. The advisor carries out its responsibilities as valuation designee through its Pricing Committee.
Portfolio securities are valued by various methods that are generally described below. Portfolio securities also may be fair valued by the advisor’s Pricing Committee in certain instances pursuant to procedures established by the advisor and adopted by the Board of Trustees. Equity securities are generally valued at the last sale price or, for certain markets, the official closing price as of the close of the relevant exchange. Securities not traded on a particular day are valued using last available bid prices. A security that is listed or traded on more than one exchange is typically valued at the price on the exchange where the security was acquired or most likely will be sold. 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. Equity securities traded principally in foreign markets are typically valued using the last sale price or official closing price in the relevant exchange or market, as adjusted by an independent pricing vendor to reflect fair value as of the close of the NYSE. On any day a foreign market is closed and the NYSE is open, any foreign securities will typically be valued using the last price or official closing price obtained from the relevant exchange on the prior business day adjusted based on information provided by an independent pricing vendor to reflect fair value as of the close of the NYSE. Debt obligations are typically valued based on evaluated prices provided by an independent pricing vendor. The value of securities denominated in foreign currencies is converted into U.S. dollars at the exchange rate supplied by an independent pricing vendor. Forward foreign currency contracts are valued at the prevailing forward rates which are based on foreign currency exchange spot rates and forward points supplied by an independent pricing vendor. Exchange-traded options are valued at the mid-price of the last quoted bid and ask prices. Futures contracts whose settlement prices are determined as of the close of the NYSE are typically valued based on the settlement price, while other futures contracts are typically valued at the last traded price on the exchange on which they trade as of the close of the NYSE. Foreign equity index futures that trade in the electronic trading market subsequent to the close of regular trading may be valued at the last traded price in the electronic trading market as of the close of the NYSE, or may be fair valued based on fair value adjustment factors provided by an independent pricing vendor in order to adjust for events that may occur between the close of foreign exchanges or markets and the close of the NYSE. Swaps and unlisted options are generally valued using evaluated prices obtained from an independent pricing vendor. Shares of other open-end investment companies that are not exchange-traded funds (underlying funds) are valued based on the NAVs of such underlying funds.
Pricing vendors may use matrix pricing or valuation models that utilize certain inputs and assumptions to derive values, including transaction data, broker-dealer quotations, credit quality information, general market conditions, news, and other factors and assumptions. The fund may receive different prices when it sells odd-lot positions than it would receive for sales of institutional round lot positions. Pricing vendors generally value securities assuming orderly transactions of institutional round lot sizes, but a fund may hold or transact in such securities in smaller, odd lot sizes.
The Pricing Committee engages in oversight activities with respect to pricing vendors, which includes, among other things, monitoring significant or unusual price fluctuations above predetermined tolerance levels from the prior day, back-testing of pricing vendor prices against actual trades, conducting periodic due diligence meetings and reviews, and periodically reviewing the inputs, assumptions and methodologies used by these vendors. Nevertheless, market quotations, official closing prices, or information furnished by a pricing vendor could be inaccurate, which could lead to a security being valued incorrectly.
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If market quotations, official closing prices, or information furnished by a pricing vendor are not readily available or are otherwise deemed unreliable or not representative of the fair value of such security because of market- or issuer-specific events, a security will be valued at its fair value as determined in good faith by the Board’s valuation designee, the advisor. In certain instances, therefore, the Pricing Committee may determine that a reported valuation does not reflect fair value, based on additional information available or other factors, and may accordingly determine in good faith the fair value of the assets, which may differ from the reported valuation.
Fair value pricing of securities is intended to help ensure that a fund’s NAV reflects the fair market value of the fund’s portfolio securities as of the close of regular trading on the NYSE (as opposed to a value that no longer reflects market value as of such close), thus limiting the opportunity for aggressive traders or market timers to purchase shares of the fund at deflated prices reflecting stale security valuations and promptly sell such shares at a gain, thereby diluting the interests of long-term shareholders. However, a security’s valuation may differ depending on the method used for determining value, and no assurance can be given that fair value pricing of securities will successfully eliminate all potential opportunities for such trading gains.
The use of fair value pricing has the effect of valuing a security based upon the price the fund might reasonably expect to receive if it sold that security in an orderly transaction between market participants, but does not guarantee that the security can be sold at the fair value price. Further, because of the inherent uncertainty and subjective nature of fair valuation, a fair valuation price may differ significantly from the value that would have been used had a readily available market price for the investment existed and these differences could be material.
Regarding the fund’s investment in an underlying fund that is not an ETF, which (as noted above) is valued at such underlying fund’s NAV, the prospectus for such underlying fund explains the circumstances and effects of fair value pricing for that underlying fund.
Buy and sell prices
When you buy shares, you pay the NAV, plus any applicable sales charges, as described earlier. When you sell shares, you receive the NAV, minus any applicable deferred sales charges.
Execution of requests
The fund is open for business when the NYSE is open, typically 9:30A.M. to 4:00P.M. Eastern time, Monday through Friday. A purchase or redemption order received in good order by the fund prior to the close of regular trading on the NYSE, on a day the fund is open for business, will be effected at that day’s NAV. An order received in good order after the fund close will generally be effected at the NAV determined on the next business day. 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 time until which orders are accepted may vary to the extent permitted by the Securities and Exchange Commission and applicable regulations. This may result in the fund closing for business prior to the time at which the fund’s NAV is determined. In this case, orders submitted after the fund closing may receive the NAV determined on the next business day.
At times of peak activity, it may be difficult to place requests by telephone, if available for your share class. During these times, consider using EASI-Line (if available for your share class), accessing jhinvestments.com, or sending your request in writing.
The fund typically expects to mail or wire redemption proceeds between 1 and 3 business days following the receipt of the shareholder’s redemption request. Processing time is not dependent on the chosen delivery method. In unusual circumstances, the fund may temporarily suspend the processing of sell requests or may postpone payment of proceeds for up to three business days or longer, as allowed by federal securities laws.
Under normal market conditions, the fund typically expects to meet redemption requests through holdings of cash or cash equivalents or through sales of portfolio securities, and may access other available liquidity facilities. In unusual or stressed market conditions, such as, for example, during a period of time in which a foreign securities exchange is closed, in addition to the methods used in normal market conditions, the fund may meet redemption requests through the use of its line of credit, interfund lending facility, redemptions in kind, or such other liquidity means or facilities as the fund may have in place from time to time.
Telephone transactions
For your protection, telephone requests may be recorded in order to verify their accuracy. Also for your protection, telephone redemption transactions are not permitted on accounts in which a name, mailing address, or recorded bank has changed within the past 30 days.
Proceeds from telephone transactions can only be sent to the address or bank on record.
Exchanges and conversions
You may exchange Class A shares of one John Hancock fund for shares of the same class of any other John Hancock fund that is then offering that class, generally without paying any sales charges, if applicable.
You may exchange Class I shares of one John Hancock fund for shares of the same class of any other John Hancock fund or for John Hancock Money Market Fund Class A shares.
The registration for both accounts involved in an exchange must be identical.
Note: Once exchanged into John Hancock Money Market Fund Class A shares, shares may only be exchanged back into the original class from which the shares were exchanged.
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Your account
As applicable, shares acquired in an exchange will be subject to the CDSC rate and holding schedule of the fund in which such shares were originally purchased if and when such shares are redeemed. For purposes of determining the holding period for calculating the CDSC, shares will continue to age from their original purchase date.
Provided the fund’s eligibility requirements are met, and to the extent the referenced share class is offered by the fund, an investor in the fund pursuant to a fee-based, wrap, or other investment platform program of certain firms, as determined by the fund, may be afforded an opportunity to make a conversion of (i) Class A shares and/or Class C shares (not subject to a CDSC) also owned by the investor in the same fund to Class I shares or Class R6 shares of that fund; or (ii) Class I shares also owned by the investor to Class R6 shares of the same fund. Investors that no longer participate in a fee-based, wrap, or other investment platform program of certain firms may be afforded an opportunity to make a conversion to Class A shares of the same fund. Class C shares may be converted to Class A at the request of the applicable financial intermediary after the expiration of the CDSC period, provided that the financial intermediary through which a shareholder purchased or holds Class C shares has records verifying that the Class C share CDSC period has expired and the position is held in an omnibus or dealer-controlled account. The fund may in its sole discretion permit a conversion of one share class to another share class of the same fund in certain circumstances other than those described above.
In addition, Trustees, employees of the advisor or its affiliates, employees of the subadvisor, members of the fund’s portfolio management team and the spouses and children (under age 21) of the aforementioned, may make a conversion of Class A or Class I shares also owned by the investor in the same fund to Class R6 shares. If Class R6 shares are unavailable, such investors may make a conversion of Class A shares in the same fund to Class I shares.
The conversion of one share class to another share class of the same fund in these particular circumstances should not cause the investor to realize taxable gain or loss. For further details, see “Additional information concerning taxes” in the SAI for information regarding taxation upon the redemption or exchange of shares of the fund (see the back cover of this prospectus).
The fund may change or cancel its exchange policies at any time, upon 60 days’ written notice to its shareholders. For further details, see “Additional services and programs” in the SAI (see the back cover of this prospectus).
Excessive trading
The fund is intended for long-term investment purposes only and does not knowingly accept shareholders who engage in market timing or other types of excessive short-term trading. Short-term trading into and out of the fund can disrupt portfolio investment strategies and may increase fund expenses for all shareholders, including long-term shareholders who do not generate these costs.
Right to reject or restrict purchase and exchange orders
Purchases and exchanges should be made primarily for investment purposes. The fund reserves the right to restrict, reject, or cancel (with respect to cancellations within one day of the order), for any reason and without any prior notice, any purchase or exchange order, including transactions representing excessive trading and transactions accepted by any shareholder’s financial intermediary. For example, the fund may, in its discretion, restrict, reject, or cancel a purchase or exchange order even if the transaction is not subject to a specific limitation on exchange activity, as described below, if the fund or its agent determines that accepting the order could interfere with the efficient management of the fund’s portfolio, or otherwise not be in the fund’s best interest in light of unusual trading activity related to your account. In the event that the fund rejects or cancels an exchange request, neither the redemption nor the purchase side of the exchange will be processed. If you would like the redemption request to be processed even if the purchase order is rejected, you should submit separate redemption and purchase orders rather than placing an exchange order. The fund reserves the right to delay for up to one business day, consistent with applicable law, the processing of exchange requests in the event that, in the fund’s judgment, such delay would be in the fund’s best interest, in which case both the redemption and purchase side of the exchange will receive the fund’s NAV at the conclusion of the delay period. The fund, through its agents in their sole discretion, may impose these remedial actions at the account holder level or the underlying shareholder level.
Exchange limitation policies
The Board of Trustees has adopted the following policies and procedures by which the fund, subject to the limitations described below, takes steps reasonably designed to curtail excessive trading practices.
Limitation on exchange activity
The fund or its agent may reject or cancel a purchase order, suspend or terminate the exchange privilege, or terminate the ability of an investor to invest in John Hancock funds if the fund or its agent determines that a proposed transaction involves market timing or disruptive trading that it believes is likely to be detrimental to the fund. The fund or its agent cannot ensure that it will be able to identify all cases of market timing or disruptive trading, although it attempts to have adequate procedures in place to do so. The fund or its agent may also reject or cancel any purchase order (including an exchange) from an investor or group of investors for any other reason. Decisions to reject or cancel purchase orders (including exchanges) in the fund are inherently subjective and will be made in a manner believed to be in the best interest of the fund’s shareholders. The fund does not have any arrangement to permit market timing or disruptive trading.
Exchanges made on the same day in the same account are aggregated for purposes of counting the number and dollar amount of exchanges made by the account holder. The exchange limits referenced above will not be imposed or may be modified under certain circumstances. For example, these exchange limits may be modified for accounts held by certain retirement plans to
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conform to plan exchange limits, ERISA considerations, or U.S. Department of Labor regulations. Certain automated or preestablished exchange, asset allocation, and dollar-cost-averaging programs are not subject to these exchange limits. These programs are excluded from the exchange limitation since the fund believes that they are advantageous to shareholders and do not offer an effective means for market timing or excessive trading strategies. These investment tools involve regular and predetermined purchase or redemption requests made well in advance of any knowledge of events affecting the market on the date of the purchase or redemption.
These exchange limits are subject to the fund’s ability to monitor exchange activity, as discussed under “Limitation on the ability to detect and curtail excessive trading practices” below. Depending upon the composition of the fund’s shareholder accounts, and in light of the limitations on the ability of the fund to detect and curtail excessive trading practices, a significant percentage of the fund’s shareholders may not be subject to the exchange limitation policy described above. In applying the exchange limitation policy, the fund considers information available to it at the time and reserves the right to consider trading activity in a single account or multiple accounts under common ownership, control, or influence.
Limitation on the ability to detect and curtail excessive trading practices
Shareholders seeking to engage in excessive trading practices sometimes deploy a variety of strategies to avoid detection and, despite the efforts of the fund to prevent excessive trading, there is no guarantee that the fund or its agent will be able to identify such shareholders or curtail their trading practices. The ability of the fund and its agent to detect and curtail excessive trading practices may also be limited by operational systems and technological limitations. Because the fund will not always be able to detect frequent trading activity, investors should not assume that the fund will be able to detect or prevent all frequent trading or other practices that disadvantage the fund. For example, the ability of the fund to monitor trades that are placed by omnibus or other nominee accounts is severely limited in those instances in which the financial intermediary, including a financial advisor, broker, retirement plan administrator, or fee-based program sponsor, maintains the records of the fund’s underlying beneficial owners. Omnibus or other nominee account arrangements are common forms of holding shares of the fund, particularly among certain financial intermediaries, such as financial advisors, brokers, retirement plan administrators, or fee-based program sponsors. These arrangements often permit the financial intermediary to aggregate its clients’ transactions and ownership positions and do not identify the particular underlying shareholder(s) to the fund. However, the fund will work with financial intermediaries as necessary to discourage shareholders from engaging in abusive trading practices and to impose restrictions on excessive trades. In this regard, the fund has entered into information-sharing agreements with financial intermediaries pursuant to which these intermediaries are required to provide to the fund, at the fund’s request, certain information relating to their customers investing in the fund through omnibus or other nominee accounts. The fund will use this information to attempt to identify excessive trading practices.
Financial intermediaries are contractually required to follow any instructions from the fund to restrict or prohibit future purchases from shareholders that are found to have engaged in excessive trading in violation of the fund’s policies. The fund cannot guarantee the accuracy of the information provided to it from financial intermediaries and so cannot ensure that it will be able to detect abusive trading practices that occur through omnibus or other nominee accounts. As a consequence, the fund’s ability to monitor and discourage excessive trading practices in these types of accounts may be limited.
Excessive trading risk
To the extent that the fund or its agent is unable to curtail excessive trading practices in the fund, these practices may interfere with the efficient management of the fund’s portfolio and may result in the fund engaging in certain activities to a greater extent than it otherwise would, such as maintaining higher cash balances, using its line of credit, and engaging in increased portfolio transactions. Increased portfolio transactions and use of the line of credit would correspondingly increase the fund’s operating costs and decrease the fund’s investment performance. Maintenance of higher levels of cash balances would likewise result in lower fund investment performance during periods of rising markets.
While excessive trading can potentially occur in the fund, certain types of funds are more likely than others to be targets of excessive trading. For example:
• | A fund that invests a significant portion of its assets in small- or mid-capitalization stocks or securities in particular industries that may trade infrequently or are fair valued as discussed under “Valuation of securities” entails a greater risk of excessive trading, as investors may seek to trade fund shares in an effort to benefit from their understanding of the value of those types of securities (referred to as price arbitrage). |
• | A fund that invests a material portion of its assets in securities of foreign issuers may be a potential target for excessive trading if investors seek to engage in price arbitrage based upon general trends in the securities markets that occur subsequent to the close of the primary market for such securities. |
• | A fund that invests a significant portion of its assets in below-investment-grade (junk) bonds that may trade infrequently or are fair valued as discussed under “Valuation of securities” incurs a greater risk of excessive trading, as investors may seek to trade fund shares in an effort to benefit from their understanding of the value of those types of securities (referred to as price arbitrage). |
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Your account
Any frequent trading strategies may interfere with efficient management of a fund’s portfolio and raise costs. A fund that invests in the types of securities discussed above may be exposed to this risk to a greater degree than a fund that invests in highly liquid securities. These risks would be less significant, for example, in a fund that primarily invests in U.S. government securities, money market instruments, investment-grade corporate issuers, or large-capitalization U.S. equity securities. Any successful price arbitrage may cause dilution in the value of the fund shares held by other shareholders.
Account information
The fund is required by law to obtain information for verifying an account holder’s identity. For example, an individual will be required to supply his or her name, residential address, date of birth, and Social Security number. If you do not provide the required information, we may not be able to open your account. If verification is unsuccessful, the fund may close your account, redeem your shares at the next NAV, minus any applicable sales charges, and take any other steps that it deems reasonable.
Certificated shares
The fund does not issue share certificates. Shares are electronically recorded.
Sales in advance of purchase payments
When you place a request to sell shares for which the purchase money has not yet been collected, the request will be executed in a timely fashion, but the fund will not release the proceeds to you until your purchase payment clears. This may take up to 10 business days after the purchase.
Dividends and account policies
Account statements
For Class A shares, in general, you will receive account statements as follows:
• | after every transaction (except a dividend reinvestment, automatic investment, or systematic withdrawal) that affects your account balance |
• | after any changes of name or address of the registered owner(s) |
• | in all other circumstances, every quarter |
For Class I shares, in general, you will receive account statements as follows:
• | after every transaction (except a dividend reinvestment) that affects your account balance |
• | after any changes of name or address of the registered owner(s) |
• | in all other circumstances, every quarter |
Every year you should also receive, if applicable, a Form 1099 tax information statement, mailed by February 15.
Dividends
The fund typically declares and pays income dividends and capital gains, if any, at least annually.
Dividend reinvestments
Most investors have their dividends reinvested in additional shares of the same class of the same fund. If you choose this option, or if you do not indicate any choice, your dividends will be reinvested. Alternatively, you may choose to have your dividends and capital gains sent directly to your bank account or a check may be mailed if your combined dividend and capital gains amount is $10 or more. However, if the check is not deliverable or the combined dividend and capital gains amount is less than $10, your proceeds will be reinvested. If five or more of your dividend or capital gains checks remain uncashed after 180 days, all subsequent dividends and capital gains will be reinvested. No front-end sales charge or CDSC will be imposed on shares derived from reinvestment of dividends or capital gains distributions.
Taxability of dividends
For investors who are not exempt from federal income taxes, dividends you receive from the fund, whether reinvested or taken as cash, are generally considered taxable. Dividends from the fund’s short-term capital gains are taxable as ordinary income. Dividends from the fund’s long-term capital gains are taxable at a lower rate. Whether gains are short-term or long-term depends on the fund’s holding period. Some dividends paid in January may be taxable as if they had been paid the previous December.
The Form 1099 that is mailed to you every February, if applicable, details your dividends and their federal tax category, although you should verify your tax liability with your tax professional.
Returns of capital
If the fund’s distributions exceed its taxable income and capital gains realized during a taxable year, all or a portion of the distributions made in the same taxable year may be recharacterized as a return of capital to shareholders. A return of capital distribution will generally not be taxable, but will reduce each shareholder’s cost basis in the fund and result in a higher reported capital gain or lower reported capital loss when those shares on which the distribution was received are sold.
Taxability of transactions
Any time you sell or exchange shares, it is considered a taxable event for you if you are not exempt from federal income taxes. Depending on the purchase price and the sale price of the shares you sell or exchange, you may have a gain or a loss on the transaction. You are responsible for any tax liabilities generated by your transactions.
Small accounts
If the value of your account of Class A shares is less than $1,000, you may be asked to purchase more shares within 30 days. If you do not take action, the fund may close out your account and mail you the proceeds. Alternatively, the fund may charge you $20 a year to maintain your account. You will not be charged a CDSC if your account is closed for this reason.
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Your account
Additional investor services
Monthly Automatic Accumulation Program (MAAP)
MAAP lets you set up regular investments from paychecks or bank accounts to the John Hancock fund(s) to purchase Class A shares. Investors determine the frequency and amount of investments ($25 minimum per month), and they can terminate the program at any time. To establish, you must satisfy the minimum initial investment requirements specified in the section “Opening an account” and complete the appropriate parts of the account application.
Systematic withdrawal plan
This plan may be used for routine bill payments or periodic withdrawals from your account of Class A shares. To establish:
• | Make sure you have at least $5,000 worth of shares in your account. |
• | Make sure you are not planning to invest more money in this account (buying shares during a period when you are also selling shares of the same fund is not advantageous to you because of sales charges). |
• | Specify the payee(s). The payee may be yourself or any other party, and there is no limit to the number of payees you may have, as long as they are all on the same payment schedule. |
• | Determine the schedule: monthly, quarterly, semiannually, annually, or in certain selected months. |
• | Fill out the relevant part of the account application. To add a systematic withdrawal plan to an existing account, contact your financial professional or Signature Services. |
Retirement plans
John Hancock funds offer a range of retirement plans, including Traditional and Roth IRAs, Coverdell ESAs, SIMPLE plans, and SEPs. Using these plans, you can invest in any John Hancock fund. To find out more, call Signature Services at 800-225-5291.
John Hancock does not accept requests to establish new John Hancock custodial 403(b)(7) accounts, does not accept requests for exchanges or transfers into your existing John Hancock custodial 403(b)(7) accounts, and requires additional disclosure documentation if you direct John Hancock to exchange or transfer some or all of your John Hancock custodial 403(b)(7) account assets to another 403(b)(7) contract or account. In addition, the fund no longer accepts salary deferrals into 403(b)(7) accounts. Please refer to the SAI for more information regarding these restrictions.
Disclosure of fund holdings
The following information for the fund is posted on the website, jhinvestments.com, generally on the fifth business day after month end: top 10 holdings; top 10 sector analysis; total return/yield; top 10 countries; average quality/maturity; beta/alpha; and top 10 portfolio composition. All of the holdings of the fund will be posted to the website no earlier than 15 days after each calendar month end, and will remain posted on the website for six months. All of the fund’s holdings as of the end of the third month of every fiscal quarter will be disclosed on Form N-PORT within 60 days of the end of the fiscal quarter. All of the fund’s holdings as of the end of the second and fourth fiscal quarters will be disclosed on Form N-CSR within 70 days of the end of such fiscal quarters. A description of the fund’s policies and procedures with respect to the disclosure of its portfolio securities is available in the SAI.
C-18
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PRELIMINARY STATEMENT OF ADDITIONAL INFORMATION
SUBJECT TO COMPLETION
The information in this Statement of Additional Information is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This Statement of Additional Information is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
STATEMENT OF ADDITIONAL INFORMATION
July 29, 2024
BOSTON PARTNERS GLOBAL LONG/SHORT FUND
(the “Acquired Fund,” a series of The RBB Fund, Inc.)
AND
JOHN HANCOCK DISCIPLINED VALUE GLOBAL LONG/SHORT FUND
(the “Acquiring Fund,” a series of John Hancock Investment Trust)
This Statement of Additional Information (“SAI”) is not a prospectus. It should be read in conjunction with the related combined proxy statement and prospectus (also dated July 29, 2024). This SAI provides additional information about the Acquired Fund and the Acquiring Fund (the “Funds”). The Acquired Fund is a series of The RBB Fund, Inc., a Maryland corporation, and the Acquiring Fund is a series of John Hancock Investment Trust (the “Trust”), a Massachusetts business trust. Please retain this SAI for further reference.
This SAI is intended to supplement the information provided in a combined proxy statement and prospectus dated July 29, 2024, relating to the proposed reorganization of the Acquired Fund into the Acquiring Fund (the “Reorganization”) and in connection with the solicitation by the Acquired Fund of proxies to be voted at the Special Meeting of Shareholders of the Acquired Fund to be held on September 17, 2024.
A copy of the proxy statement and prospectus can be obtained free of charge by writing or telephoning:
U.S. Bancorp Fund Services, LLC
615 East Michigan Street
Milwaukee, Wisconsin 53202
1-888-261-4073
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2 | ||||
3 | ||||
4 |
Table of Contents
INFORMATION INCORPORATED BY REFERENCE
The following are incorporated by reference:
1. |
2. |
3. |
4. |
Table of Contents
SUPPLEMENTAL FINANCIAL INFORMATION
Tables showing the fees and expenses of the Acquired Fund and the fees and expenses of the Acquiring Fund on a pro forma basis after giving effect to the proposed Reorganization are included in the “Comparison of Expenses” section of the proxy statement and prospectus. Only pro forma combined fees and expenses information is provided for the Acquiring Fund because the Acquiring Fund will not commence operations until the Reorganization is completed.
The Reorganization will not result in a material change to the Acquired Fund’s portfolio holdings due to the investment restrictions of the Acquiring Fund, as the Acquiring Fund has the same or similar investment objectives, investment strategies, and investment restrictions as the Acquired Fund (except as otherwise noted in the proxy statement and prospectus). Accordingly, a schedule of investments of the Acquired Fund modified to show the effects of such change is not required and is not included. There are no material differences between the accounting and valuation policies of the Acquired Fund and the Acquiring Fund.
Table of Contents
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A | I | |
John Hancock Disciplined Value Global Long/Short Fund | JAKRX | JAKUX |
P.O. Box 219909
Kansas City, MO 64121-9909
800-225-5291
jhinvestments.com
![](https://capedge.com/proxy/N-14/0001193125-24-172232/g632654mim_blk.gif)
Term | Definition |
“1933 Act” | the Securities Act of 1933, as amended |
“1940 Act” | the Investment Company Act of 1940, as amended |
“Advisers Act” | the Investment Advisers Act of 1940, as amended |
“Advisor” | John Hancock Investment Management LLC, 200 Berkeley Street, Boston, Massachusetts 02116 |
“Advisory Agreement” | an investment advisory agreement or investment management contract between the Trust and the Advisor |
“Affiliated Subadvisors” | Manulife Investment Management (North America) Limited and Manulife Investment Management (US) LLC, as applicable |
“affiliated underlying funds” | underlying funds that are advised by John Hancock’s investment advisor or its affiliates |
“BDCs” | business development companies |
“Board” | Board of Trustees of the Trust |
“Bond Connect” | Mutual Bond Market Access between Mainland China and Hong Kong |
“Brown Brothers Harriman” | Brown Brothers Harriman & Co. |
“CATS” | Certificates of Accrual on Treasury Securities |
“CBOs” | Collateralized Bond Obligations |
“CCO” | Chief Compliance Officer |
“CDSC” | Contingent Deferred Sales Charge |
“CEA” | the Commodity Exchange Act, as amended |
“China A-Shares” | Chinese stock exchanges |
“CIBM” | China interbank bond market |
“CLOs” | Collateralized Loan Obligations |
“CMOs” | Collateralized Mortgage Obligations |
“Code” | the Internal Revenue Code of 1986, as amended |
“COFI floaters” | Cost of Funds Index |
“CPI” | Consumer Price Index |
“CPI-U” | Consumer Price Index for Urban Consumers |
“CPO” | Commodity Pool Operator |
“CFTC” | Commodity Futures Trading Commission |
“Citibank” | Citibank, N.A., 388 Greenwich Street, New York, NY 10013 |
“Distributor” | John Hancock Investment Management Distributors LLC, 200 Berkeley Street, Boston, Massachusetts 02116 |
“EMU” | Economic and Monetary Union |
“ETFs” | Exchange-Traded Funds |
“ETNs” | Exchange-Traded Notes |
“EU” | European Union |
“Fannie Mae” | Federal National Mortgage Association |
“FATCA” | Foreign Account Tax Compliance Act |
“Fed” | U.S. Federal Reserve |
“FHFA” | Federal Housing Finance Agency |
“FHLBs” | Federal Home Loan Banks |
“FICBs” | Federal Intermediate Credit Banks |
“Fitch” | Fitch Ratings |
“Freddie Mac” | Federal Home Loan Mortgage Corporation |
“funds” or “series” | The John Hancock funds within this SAI as noted on the front cover and as the context may require |
“funds of funds” | funds that seek to achieve their investment objectives by investing in underlying funds, as permitted by Section 12(d) of the 1940 Act and the rules thereunder |
“GNMA” | Government National Mortgage Association |
“HKSCC” | Hong Kong Securities Clearing Company |
“IOs” | Interest-Only |
“IRA” | Individual Retirement Account |
Term | Definition |
“IRS” | Internal Revenue Service |
“JHCT” | John Hancock Collateral Trust |
“JH Distributors” | John Hancock Distributors, LLC |
“JHLICO New York” | John Hancock Life Insurance Company of New York |
“JHLICO U.S.A.” | John Hancock Life Insurance Company (U.S.A.) |
“LOI” | Letter of Intention |
“LIBOR” | London Interbank Offered Rate |
“MAAP” | Monthly Automatic Accumulation Program |
“Manulife Financial” or “MFC” | Manulife Financial, a publicly traded company based in Toronto, Canada |
“Manulife IM (NA)” | Manulife Investment Management (North America) Limited |
“Manulife IM (US)” | Manulife Investment Management (US) LLC |
“MiFID II” | Markets in Financial Instruments Directive |
“Moody's” | Moody’s Investors Service, Inc |
“NAV” | Net Asset Value |
“NRSRO” | Nationally Recognized Statistical Rating Organization |
“NYSE” | New York Stock Exchange |
“OID” | Original Issue Discount |
“OTC” | Over-The-Counter |
“PAC” | Planned Amortization Class |
“PFS” | Personal Financial Services |
“POs” | Principal-Only |
“PRC” | People's Republic of China |
“REITs” | Real Estate Investment Trusts |
“RIC” | Regulated Investment Company |
“RPS” | John Hancock Retirement Plan Services |
“SARSEP” | Salary Reduction Simplified Employee Pension Plan |
“SEC” | Securities and Exchange Commission |
“SEP” | Simplified Employee Pension |
“SIMPLE” | Savings Incentive Match Plan for Employees |
“S&P” | S&P Global Ratings |
“SLMA” | Student Loan Marketing Association |
“SPACs” | Special Purpose Acquisition Companies |
“State Street” | State Street Bank and Trust Company, One Congress Street, Suite 1, Boston, MA 02114 |
“Stock Connect” | Hong Kong Stock Connect Program |
“subadvisor” | Any subadvisors employed by John Hancock within this SAI as noted in Appendix B and as the context may require |
“TAC” | Target Amortization Class |
“TIGRs” | Treasury Receipts, Treasury Investors Growth Receipts |
Term | Definition |
“Trust” | John Hancock Bond Trust John Hancock California Tax-Free Income Fund John Hancock Capital Series John Hancock Current Interest John Hancock Exchange-Traded Fund Trust John Hancock Funds II John Hancock Funds III John Hancock Investment Trust John Hancock Investment Trust II John Hancock Municipal Securities Trust John Hancock Sovereign Bond Fund John Hancock Strategic Series John Hancock Variable Insurance Trust |
“TSA” | Tax-Sheltered Annuity |
“unaffiliated underlying funds” | underlying funds that are advised by an entity other than John Hancock’s investment advisor or its affiliates |
“underlying funds” | funds in which the funds of funds invest |
“UK” | United Kingdom |
Trust | Date of Organization |
John Hancock Investment Trust | December 21, 1984 |
Fund | Commencement of Operations |
Disciplined Value Global Long-Short Fund | December 31, 2013 (predecessor fund inception date; expected to commence as a series of Investment Trust on or about September 30, 2024) |
Name (Birth Year) | Current Position(s) with the Trust1 | Principal Occupation(s) and Other Directorships During the Past 5 Years | Number of Funds in John Hancock Fund Complex Overseen by Trustee |
Non-Independent Trustees | |||
Andrew G. Arnott2 (1971) | Trustee (since 2017) | Global Head of Retail for Manulife (since 2022); Head of Wealth and Asset Management, United States and Europe, for John Hancock and Manulife (2018-2023); Director and Chairman, John Hancock Investment Management LLC (2005-2023, including prior positions); Director and Chairman, John Hancock Variable Trust Advisers LLC (2006-2023, including prior positions); Director and Chairman, John Hancock Investment Management Distributors LLC (2004-2023, including prior positions); President of various trusts within the John Hancock Fund Complex (2007-2023, including prior positions). Trustee of various trusts within the John Hancock Fund Complex (since 2017). | 179 |
Paul Lorentz2 (1968) | Trustee (since 2022) | Global Head, Manulife Wealth and Asset Management (since 2017); General Manager, Manulife, Individual Wealth Management and Insurance (2013–2017); President, Manulife Investments (2010–2016). Trustee of various trusts within the John Hancock Fund Complex (since 2022). | 177 |
Name (Birth Year) | Current Position(s) with the Trust1 | Principal Occupation(s) and Other Directorships During the Past 5 Years | Number of Funds in John Hancock Fund Complex Overseen by Trustee |
Independent Trustees | |||
James R. Boyle (1959) | Trustee (2005–2010, 2012–2014, and since 2015) | Board Member, United of Omaha Life Insurance Company (since 2022). Board Member, Mutual of Omaha Investor Services, Inc. (since 2022). Foresters Financial, Chief Executive Officer (2018–2022) and board member (2017–2022). Manulife Financial and John Hancock, more than 20 years, retiring in 2012 as Chief Executive Officer, John Hancock and Senior Executive Vice President, Manulife Financial. Trustee of various trusts within the John Hancock Fund Complex (2005–2014 and since 2015). | 177 |
William H. Cunningham (1944) | Trustee (since 1986) | Professor, University of Texas, Austin, Texas (since 1971); former Chancellor, University of Texas System and former President of the University of Texas, Austin, Texas; Director (since 2006), Lincoln National Corporation (insurance); Director, Southwest Airlines (since 2000). Trustee of various trusts within the John Hancock Fund Complex (since 1986). | 179 |
Name (Birth Year) | Current Position(s) with the Trust1 | Principal Occupation(s) and Other Directorships During the Past 5 Years | Number of Funds in John Hancock Fund Complex Overseen by Trustee |
Independent Trustees | |||
Noni L. Ellison (1971) | Trustee (since 2022) | Senior Vice President, General Counsel & Corporate Secretary, Tractor Supply Company (rural lifestyle retailer) (since 2021); General Counsel, Chief Compliance Officer & Corporate Secretary, Carestream Dental, L.L.C. (2017–2021); Associate General Counsel & Assistant Corporate Secretary, W.W. Grainger, Inc. (global industrial supplier) (2015–2017); Board Member, Goodwill of North Georgia, 2018 (FY2019)–2020 (FY2021); Board Member, Howard University School of Law Board of Visitors (since 2021); Board Member, University of Chicago Law School Board of Visitors (since 2016); Board member, Children’s Healthcare of Atlanta Foundation Board (2021–2023); Board Member, Congressional Black Caucus Foundation (since 2024). Trustee of various trusts within the John Hancock Fund Complex (since 2022). | 177 |
Grace K. Fey (1946) | Trustee (since 2012) | Chief Executive Officer, Grace Fey Advisors (since 2007); Director and Executive Vice President, Frontier Capital Management Company (1988–2007); Director, Fiduciary Trust (since 2009). Trustee of various trusts within the John Hancock Fund Complex (since 2008). | 182 |
Dean C. Garfield (1968) | Trustee (since 2022) | Vice President, Netflix, Inc. (since 2019); President & Chief Executive Officer, Information Technology Industry Council (2009–2019); NYU School of Law Board of Trustees (since 2021); Member, U.S. Department of Transportation, Advisory Committee on Automation (since 2021); President of the United States Trade Advisory Council (2010–2018); Board Member, College for Every Student (2017–2021); Board Member, The Seed School of Washington, D.C. (2012–2017); Advisory Board Member of the Block Center for Technology and Society (since 2019). Trustee of various trusts within the John Hancock Fund Complex (since 2022). | 177 |
Deborah C. Jackson (1952) | Trustee (since 2008) | President, Cambridge College, Cambridge, Massachusetts (2011–2023); Board of Directors, Amwell Corporation (since 2020); Board of Directors, Massachusetts Women’s Forum (2018–2020); Board of Directors, National Association of Corporate Directors/New England (2015–2020); Chief Executive Officer, American Red Cross of Massachusetts Bay (2002–2011); Board of Directors of Eastern Bank Corporation (since 2001); Board of Directors of Eastern Bank Charitable Foundation (since 2001); Board of Directors of Boston Stock Exchange (2002–2008); Board of Directors of Harvard Pilgrim Healthcare (health benefits company) (2007–2011). Trustee of various trusts within the John Hancock Fund Complex (since 2008). | 180 |
Hassell H. McClellan (1945) | Trustee (since 2012) and Chairperson of the Board (since 2017) | Trustee of Berklee College of Music (since 2022); Director/Trustee, Virtus Funds (2008–2020); Director, The Barnes Group (2010–2021); Associate Professor, The Wallace E. Carroll School of Management, Boston College (retired 2013). Trustee (since 2005) and Chairperson of the Board (since 2017) of various trusts within the John Hancock Fund Complex. | 182 |
Name (Birth Year) | Current Position(s) with the Trust1 | Principal Occupation(s) and Other Directorships During the Past 5 Years | Number of Funds in John Hancock Fund Complex Overseen by Trustee |
Independent Trustees | |||
Steven R. Pruchansky (1944) | Trustee (since 1994) and Vice Chairperson of the Board (since 2012) | Managing Director, Pru Realty (since 2017); Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (2014–2020); Director and President, Greenscapes of Southwest Florida, Inc. (until 2000); Member, Board of Advisors, First American Bank (until 2010); Managing Director, Jon James, LLC (real estate) (since 2000); Partner, Right Funding, LLC (2014–2017); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty Trust (until 1994); President, Maxwell Building Corp. (until 1991). Trustee (since 1992), Chairperson of the Board (2011–2012), and Vice Chairperson of the Board (since 2012) of various trusts within the John Hancock Fund Complex. | 177 |
Frances G. Rathke (1960) | Trustee (since 2020) | Director, Audit Committee Chair, Oatly Group AB (plant-based drink company) (since 2021); Director, Audit Committee Chair and Compensation Committee Member, Green Mountain Power Corporation (since 2016); Director, Treasurer and Finance & Audit Committee Chair, Flynn Center for Performing Arts (since 2016); Director and Audit Committee Chair, Planet Fitness (since 2016); Chief Financial Officer and Treasurer, Keurig Green Mountain, Inc. (2003–retired 2015). Trustee of various trusts within the John Hancock Fund Complex (since 2020). | 177 |
Gregory A. Russo (1949) | Trustee (since 2009) | Director and Audit Committee Chairman (2012–2020), and Member, Audit Committee and Finance Committee (2011–2020), NCH Healthcare System, Inc. (holding company for multi-entity healthcare system); Director and Member (2012–2018), and Finance Committee Chairman (2014–2018), The Moorings, Inc. (nonprofit continuing care community); Global Vice Chairman, Risk & Regulatory Matters, KPMG LLP (KPMG) (2002–2006); Vice Chairman, Industrial Markets, KPMG (1998–2002). Trustee of various trusts within the John Hancock Fund Complex (since 2008). | 177 |
Name (Birth Year) | Current Position(s) with the Trust1 | Principal Occupation(s) During the Past 5 Years |
Kristie M. Feinberg (1975) | President (since 2023) | Head of Wealth & Asset Management, U.S. and Europe, for John Hancock and Manulife (since 2023); Director and Chairman, John Hancock Investment Management LLC (since 2023); Director and Chairman, John Hancock Variable Trust Advisers LLC (since 2023); Director and Chairman, John Hancock Investment Management Distributors LLC (since 2023); CFO and Global Head of Strategy, Manulife Investment Management (2021–2023, including prior positions); CFO Americas & Global Head of Treasury, Invesco, Ltd., Invesco US (2019–2020, including prior positions); Senior Vice President, Corporate Treasurer and Business Controller, OppenheimerFunds (2001–2019, including prior positions); President of various trusts within the John Hancock Fund Complex (since 2023). |
Charles A. Rizzo (1957) | Chief Financial Officer (since 2007) | Vice President, John Hancock Financial Services (since 2008); Senior Vice President, John Hancock Investment Management LLC and John Hancock Variable Trust Advisers LLC (since 2008); Chief Financial Officer of various trusts within the John Hancock Fund Complex (since 2007). |
Salvatore Schiavone (1965) | Treasurer (since 2010) | Assistant Vice President, John Hancock Financial Services (since 2007); Vice President, John Hancock Investment Management LLC and John Hancock Variable Trust Advisers LLC (since 2007); Treasurer of various trusts within the John Hancock Fund Complex (since 2007, including prior positions). |
Christopher (Kit) Sechler (1973) | Secretary and Chief Legal Officer (since 2018) | Vice President and Deputy Chief Counsel, John Hancock Investment Management (since 2015); Assistant Vice President and Senior Counsel (2009–2015), John Hancock Investment Management; Assistant Secretary of John Hancock Investment Management LLC and John Hancock Variable Trust Advisers LLC (since 2009); Chief Legal Officer and Secretary of various trusts within the John Hancock Fund Complex (since 2009, including prior positions). |
Trevor Swanberg (1979) | Chief Compliance Officer (since 2020) | Chief Compliance Officer, John Hancock Investment Management LLC and John Hancock Variable Trust Advisers LLC (since 2020); Deputy Chief Compliance Officer, John Hancock Investment Management LLC and John Hancock Variable Trust Advisers LLC (2019–2020); Assistant Chief Compliance Officer, John Hancock Investment Management LLC and John Hancock Variable Trust Advisers LLC (2016–2019); Vice President, State Street Global Advisors (2015–2016); Chief Compliance Officer of various trusts within the John Hancock Fund Complex (since 2016, including prior positions). |
Name of Trustee | Total Compensation from Investment Trust ($) | Total Compensation from the Trusts and the John Hancock Fund Complex ($)2 |
Independent Trustees | ||
James R. Boyle | 36,069 | 455,000 |
Peter S. Burgess3 | 1,897 | 22,000 |
William H. Cunningham | 36,069 | 530,000 |
Noni L. Ellison | 34,324 | 435,000 |
Grace K. Fey | 37,813 | 630,000 |
Dean C. Garfield | 34,324 | 435,000 |
Deborah C. Jackson | 36,069 | 535,000 |
Patricia Lizarraga4 | 32,300 | 413,000 |
Hassell H. McClellan | 52,205 | 826,000 |
Steven R. Pruchansky | 36,069 | 455,000 |
Frances G. Rathke | 36,069 | 455,000 |
Gregory A. Russo | 37,813 | 475,000 |
Non-Independent Trustees | ||
Andrew G. Arnott | 0 | 0 |
Marianne Harrison5 | 0 | 0 |
Paul Lorentz | 0 | 0 |
Trust/Funds | Disciplined Value Global Long/Short Fund | Total – John Hancock Fund Complex |
Independent Trustees | ||
James R. Boyle | None | Over $100,000 |
William H. Cunningham | None | Over $100,000 |
Trust/Funds | Disciplined Value Global Long/Short Fund | Total – John Hancock Fund Complex |
Noni L. Ellison | None | Over $100,000 |
Grace K. Fey | None | Over $100,000 |
Dean C. Garfield1 | None | Over $100,000 |
Deborah C. Jackson | None | Over $100,000 |
Hassell H. McClellan | None | Over $100,000 |
Steven R. Pruchansky | None | Over $100,000 |
Frances G. Rathke | None | Over $100,000 |
Gregory A. Russo | None | Over $100,000 |
Non-Independent Trustees | ||
Andrew G. Arnott | None | Over $100,000 |
Paul Lorentz | None | None |
Share Class | Rule 12b-1 Fee (%) |
Class A | 0.25 |
Class C | 1.00 |
Business Partner Firms |
Ameriprise Financial Services, Inc. |
Avantax Wealth Management |
Avantax Planning Partners, Inc. |
Banc of America/Merrill Lynch |
BOK Financial Securities, Inc. |
Centaurus Financial, Inc. |
Cetera - Advisor Network LLC |
Cetera - Advisors LLC |
Cetera - Financial Institutions |
Cetera - Financial Specialists, Inc. |
Charles Schwab |
Commonwealth Financial Network |
Concourse Financial Group Securities |
Crown Capital Securities L.P. |
DA Davidson & Co Inc. |
Edward D. Jones & Co. LP |
Fidelity - Fidelity Brokerage Services LLC |
Fidelity - Fidelity Investments Institutional Operations Company, Inc. |
Business Partner Firms |
Fidelity - National Financial Services LLC |
Fifth Third Securities, Inc. |
First Command Financial Planning |
First Horizon Advisors |
Geneos Wealth Management |
GWFS Equities, Inc. |
HUB International Ltd |
Independent Financial Group |
J.P. Morgan Securities LLC |
Key Investment Services |
LPL Financial LLC |
MML Investor Services, Inc. |
Money Concepts Capital Corp. |
Morgan Stanley Wealth Management, LLC |
Northwestern Mutual Investment Services, LLC |
Osaic - American Portfolios Financial Services, Inc. |
Osaic - FSC Securities Corporation |
Osaic - Osaic Institutions, Inc. |
Osaic - Osaic Services, Inc. |
Osaic - Osaic Wealth, Inc. |
Osaic - Woodbury Financial Services |
Osaic - Securities America, Inc. |
Osaic - Triad Advisors, LLC. |
Principal Securities, Inc. |
Raymond James and Associates, Inc. |
Raymond James Financial Services, Inc. |
RBC Capital Markets Corporation |
Robert W. Baird & Co. |
Sanctuary Wealth Group, LLC |
Stifel, Nicolaus, & Co, Inc. |
TD Ameritrade |
The Investment Center, Inc. |
Transamerica Financial Advisors, Inc. |
UBS Financial Services, Inc. |
Unionbanc Investment Services |
Wells Fargo Advisors |
First Year Broker or Other Selling Firm Compensation | ||||
Investor Pays Sales Charge (% of Offering Price)1 | Selling Firm Receives Commission (%)2 | Selling Firm Receives Rule 12b-1 Service Fee (%) | Total Selling Firm Compensation (%)3,4 | |
Class A investments5 | ||||
Up to $49,999 | 5.00 | 4.25 | 0.25 | 4.50 |
First Year Broker or Other Selling Firm Compensation | ||||
Investor Pays Sales Charge (% of Offering Price)1 | Selling Firm Receives Commission (%)2 | Selling Firm Receives Rule 12b-1 Service Fee (%) | Total Selling Firm Compensation (%)3,4 | |
$50,000–$99,999 | 4.50 | 3.75 | 0.25 | 4.00 |
$100,000–$249,999 | 3.50 | 2.85 | 0.25 | 3.10 |
$250,000–$499,999 | 2.50 | 2.10 | 0.25 | 2.35 |
$500,000–$999,999 | 2.00 | 1.60 | 0.25 | 1.85 |
Class A investments of $1 million or more6 | ||||
First $1M–$4,999,999 | — | 0.75 | 0.25 | 1.00 |
Next $1–$5M above that | — | 0.25 | 0.25 | 0.50 |
Next $1 or more above that | — | 0.00 | 0.25 | 0.25 |
Class C investments7 | ||||
All amounts | — | 0.75 | 0.25 | 1.00 |
Class R6 investments | ||||
All amounts | — | 0.00 | 0.00 | 0.00 |
Class I investments8 | ||||
All amounts | — | 0.00 | 0.00 | 0.00 |
Entity Receiving Portfolio Information | Disclosure Purpose |
Acadia | Messaging application to be used for margins |
Accenture | Operational Functions |
Alter Domus | Senior Loan Servicing |
Bank of New York Mellon | Back Office Functions, Middle Office Functions, Reconciliation Services |
Bloomberg L.P. | Pricing and Risk Analysis, Reporting Agency, Order Management & Fixed Income Attribution, Master Data Management |
Broadridge Financial Solutions | Proxy Voting, Software Vendor |
Brown Brothers Harriman & Co. | Reconciliation, Corporate Actions, Securities Lending |
Capital Institutional Services (CAPIS) | Broker Dealer, Commission Recapture, Transition Services |
Charles River | Trading and Guidline Monitoring |
Citibank | Cash & Securities Reconciliation |
Citicorp Global Transactions Services | Middle Office Functions |
Clearwater | Analysis & Reporting Services |
Confluence Technologies | Consulting |
DataLend | Securities Lending Analytics |
DG3 | Financial Reporting, Type Setting |
Donnelley Financial Solutions | Financial Reporting, Printing |
DUCO | Reconciliation services |
Eagle Investment Systems | Performance, Portfolio Accounting |
Electra Information Systems | Reconciliation |
Ernst & Young | Tax Reporting |
EVARE | Analytics, Data Gathering, Reconciliation |
FactSet | Data Gathering, Analytics, Performance, Reconciliation Equity Attribution, Client Reporting |
Fairview Investment Services | GIPS Verification |
Foley Hoag | Foreign Currency Trade Review |
FRT | Class Action Filling |
FX Transparency | Analysis & Evaluation of FX transactions |
Gainskeeper | Wash Sales, REIT Data |
Glass Lewis | Proxy Voting |
Goldman Sachs (GSAL) | Securities Lending |
Entity Receiving Portfolio Information | Disclosure Purpose |
IHS Markit | Service Provider, Operational Functions, Data Management |
Institutional Shareholder Services (ISS) | Proxy Voting, Class Action |
Interactive Data | Pricing |
ITG | Cash and Position Reconciliation |
KPMG | Tax Reporting |
Law Firm of Davis and Harman | Development of Revenue Ruling |
Lipper | Ratings, Survey Service |
Milestone | Service Provider-Valuation Oversight |
Morningstar, Inc. | Ratings, Surveys |
MSCI Inc. | Portfolio Liquidity Evaluation Services and Analytics |
National Financial Services | Securities Lending |
OSTTRA TriResolve | Portfolio reconciliation and exeception management |
PricewaterhouseCoopers LLP | Audit Services |
Proxymity | Proxy Voting |
RSM US LLP | Consulting |
Russell Implementation Services | Transition Services |
SS&C Advent (Apx Advent) | Cash & Securities Reconciliation |
SS&C Sylvan | Performance |
SS&C Technologies | Reconciliation, Trade Settlement |
Star Compliance | Code of Ethics Monitoring |
State Street | Collateral Services, Middle-office operations, Fund Administration Functions |
State Street Closed End Financing | All SS lending funds |
State Street Investment Management Solutions | Operational Functions |
SunGard | Securities Lending Analytics |
SWIFT | Accounting Messages, Custody Messages, Trade Messaging |
WNS | Back office and operational processes services |
Wolters Kluwer | Tax, Audit |
Type of Distribution | 401(a) Plan (401(k), MPP, PSP) & 457 | 403(b) | Roth IRA & Coverdell ESA | IRA, SEP IRA & Simple IRA | Non-Retirement |
Death or Disability | Waived | Waived | Waived | Waived | Waived |
Over 70½ (or 72, in the case of individuals for whom the minimum distribution requirements begin at age 72) | Waived | Waived | Waived1 | Waived1 | 12% of account value annually in periodic payments |
Type of Distribution | 401(a) Plan (401(k), MPP, PSP) & 457 | 403(b) | Roth IRA & Coverdell ESA | IRA, SEP IRA & Simple IRA | Non-Retirement |
Between 59½ and 70½ (or 72, in the case of individuals for whom the minimum distribution requirements begin at age 72) | Waived | Waived | 12% of account value annually in periodic payments | Waived for Life Expectancy or 12% of account value annually in periodic payments | 12% of account value annually in periodic payments |
Under 59½ (Class C only) | Waived for annuity payments (72t2) or 12% of account value annually in periodic payments | Waived for annuity payments (72t) or 12% of account value annually in periodic payments | 12% of account value annually in periodic payments | Waived for annuity payments (72t) or 12% of account value annually in periodic payments | 12% of account value annually in periodic payments |
Termination of Plan | Not Waived | Waived | N/A | N/A | N/A |
Hardships | Waived | Waived | N/A | N/A | N/A |
Qualified Domestic Relations Orders | Waived | Waived | N/A | N/A | N/A |
Termination of Employment Before Normal Retirement Age | Waived | Waived | N/A | N/A | N/A |
Return of Excess | Waived | Waived | Waived | Waived | N/A |
Long-Term Issue Ratings
Short-Term Issue Ratings
![](https://capedge.com/proxy/N-14/0001193125-24-172232/g632654moodysglobal.jpg)
Indicates the strongest intrinsic capacity for timely payment of financial commitments; may have an added (“+”) to denote any exceptionally strong credit feature.
Good intrinsic capacity for timely payment of financial commitments.
The intrinsic capacity for timely payment of financial commitments is adequate.
Minimal capacity for timely payment of financial commitments, plus heightened vulnerability to near term adverse changes in financial and economic conditions.
Default is a real possibility.
Indicates an entity that has defaulted on one or more of its financial commitments, although it continues to meet other financial obligations. Typically applicable to entity ratings only.
Indicates a broad-based default event for an entity, or the default of a short-term obligation.
US Municipal Short-Term Versus Long-Term Ratings | ||
NOTES | LONG-TERM RATING | DEMAND OBLIGATIONS WITH CONDITIONAL LIQUIDITY SUPPORT |
MIG 1 | Aaa Aa1 Aa2 Aa3 A1 A2 | VMIG 1 |
MIG 2 | A3 | VMIG 2 |
MIG 3 | Baa1 Baa2 Baa3 | VMIG 3* SG |
SG | Ba1, Ba2, Ba3 B1, B2, B3 Caa1, Caa2, Caa3 Ca, C |
Fund | Portfolio Managers |
Disciplined Value Global Long/Short Fund | Christopher K. Hart, CFA, Joshua M. Jones, CFA, and Soyoun Song |
Other Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | ||||
Portfolio Manager | Number of Accounts | Assets (in millions) | Number of Accounts | Assets (in millions) | Number of Accounts | Assets (in millions) |
Christopher K. Hart | 5 | $3,822 | 5 | $6,566 | 34 | $4,165 |
Joshua M. Jones | 5 | $3,822 | 5 | $6,566 | 34 | $4,165 |
Soyoun Song | 6 | $3,832 | 5 | $6,566 | 33 | $4,148 |
Other Registered Investment Companies | Other Pooled Investment Vehicles | Other Accounts | ||||
Portfolio Manager | Number of Accounts | Assets (in millions) | Number of Accounts | Assets (in millions) | Number of Accounts | Assets (in millions) |
Christopher K. Hart | 0 | $0 | 0 | $0 | 0 | $0 |
Joshua M. Jones | 0 | $0 | 0 | $0 | 0 | $0 |
Soyoun Song | 0 | $0 | 0 | $0 | 0 | $0 |
Portfolio Manager | Dollar Range of Shares Owned1 |
Christopher K. Hart | over $1,000,000 |
Joshua M. Jones | $50,001–$100,000 |
Soyoun Song | over $1,000,000 |
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JOHN HANCOCK FUNDS
PROXY VOTING POLICIES AND PROCEDURES
(Updated December 10, 2019)
Overview
Each fund of the Trust or any other registered investment company (or series thereof) (each, a “fund”) is required to disclose its proxy voting policies and procedures in its registration statement and, pursuant to Rule 30b1-4 under the 1940 Act, file annually with the Securities and Exchange Commission and make available to shareholders its actual proxy voting record.
Investment Company Act
An investment company is required to disclose in its SAI either (a) a summary of the policies and procedures that it uses to determine how to vote proxies relating to portfolio securities or (b) a copy of its proxy voting policies.
A fund is also required by Rule 30b1-4 of the Investment Company Act of 1940 to file Form N-PX annually with the SEC, which contains a record of how the fund voted proxies relating to portfolio securities. For each matter relating to a portfolio security considered at any shareholder meeting, Form N-PX is required to include, among other information, the name of the issuer of the security, a brief identification of the matter voted on, whether and how the fund cast its vote, and whether such vote was for or against management. In addition, a fund is required to disclose in its SAI and its annual and semi-annual reports to shareholders that such voting record may be obtained by shareholders, either by calling a toll-free number or through the fund’s website, at the fund’s option.
Advisers Act
Under Advisers Act Rule 206(4)-6, investment advisers are required to adopt proxy voting policies and procedures, and investment companies typically rely on the policies of their advisers or sub-advisers.
Policy
The Majority of the Independent Board of Trustees (the “Board”) of each registered investment company of the Trusts, has adopted these proxy voting policies and procedures (the “Trust Proxy Policy”).
It is the Advisers’ policy to comply with Rule 206(4)-6 of the Advisers Act and Rule 30b1-4 of the 1940 Act as described above. In general, Advisers defer proxy voting decisions to the sub-advisers managing the Funds. It is the policy of the Trusts to delegate the responsibility for voting proxies relating to portfolio securities held by a Fund to the Fund’s respective Adviser or, if the Fund’s Adviser has delegated portfolio management responsibilities to one or more investment sub-adviser(s), to the fund’s sub-adviser(s), subject to the Board’s continued oversight. The sub-adviser for each Fund shall vote all proxies relating to securities held by each Fund and in that connection, and subject to any further policies and procedures contained herein, shall use proxy voting policies and procedures adopted by each sub-adviser in conformance with Rule 206(4)-6 under the Advisers Act.
If an instance occurs where a conflict of interest arises between the shareholders and the designated sub-adviser, however, Advisers retain the right to influence and/or direct the conflicting proxy voting decisions in the best interest of shareholders.
Delegation of Proxy Voting Responsibilities
It is the policy of the Trust to delegate the responsibility for voting proxies relating to portfolio securities held by a fund to the fund’s investment adviser (“adviser”) or, if the fund’s adviser has delegated portfolio management responsibilities to one or more investment sub-adviser(s), to the fund’s sub-adviser(s), subject to the Board’s continued oversight. The sub-adviser for each fund shall vote all proxies relating to securities held by each fund and in that connection, and subject to any further policies and procedures contained herein, shall use proxy voting policies and procedures adopted by each sub-adviser in conformance with Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Except as noted below under Material Conflicts of Interest, the Trust Proxy Policy with respect to a Fund shall incorporate that adopted by the Fund’s sub-adviser with respect to voting proxies held by its clients (the “Sub-adviser Proxy Policy”). Each Sub-adviser Policy, as it may be amended from time to time, is hereby incorporated by reference into the Trust Proxy Policy. Each sub-adviser to a Fund is directed to comply with these policies and procedures in voting proxies relating to portfolio securities held by a fund, subject to oversight by the Fund’s adviser and by the Board. Each Adviser to a Fund retains the responsibility, and is directed, to oversee each sub- adviser’s compliance with these policies and procedures, and to adopt and implement such additional policies and procedures as it deems necessary or appropriate to discharge its oversight responsibility. Additionally, the Trust’s Chief Compliance Officer (“CCO”) shall conduct such monitoring and supervisory activities as the CCO or the Board deems necessary or appropriate in order to appropriately discharge the CCO’s role in overseeing the sub-advisers’ compliance with these policies and procedures.
The delegation by the Board of the authority to vote proxies relating to portfolio securities of the funds is entirely voluntary and may be revoked by the Board, in whole or in part, at any time.
Voting Proxies of Underlying Funds of a Fund of Funds
A. Where the Fund of Funds is not the Sole Shareholder of the Underlying Fund
With respect to voting proxies relating to the shares of an underlying fund (an “Underlying Fund”) held by a Fund of the Trust operating as a fund of funds (a “Fund of Funds”) in reliance on Section 12(d)(1)(G) of the 1940 Act where the Underlying Fund has shareholders other than the Fund of Funds which are not other Fund of Funds, the Fund of Funds will vote proxies relating to shares of the Underlying Fund in the same proportion as the vote of all other holders of such Underlying Fund shares.
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B. Where the Fund of Funds is the Sole Shareholder of the Underlying Fund
In the event that one or more Funds of Funds are the sole shareholders of an Underlying Fund, the Adviser to the Fund of Funds or the Trusts will vote proxies relating to the shares of the Underlying Fund as set forth below unless the Board elects to have the Fund of Funds seek voting instructions from the shareholders of the Funds of Funds in which case the Fund of Funds will vote proxies relating to shares of the Underlying Fund in the same proportion as the instructions timely received from such shareholders.
1. Where Both the Underlying Fund and the Fund of Funds are Voting on Substantially Identical Proposals
In the event that the Underlying Fund and the Fund of Funds are voting on substantially identical proposals (the “Substantially Identical Proposal”), then the Adviser or the Fund of Funds will vote proxies relating to shares of the Underlying Fund in the same proportion as the vote of the shareholders of the Fund of Funds on the Substantially Identical Proposal.
2. Where the Underlying Fund is Voting on a Proposal that is Not Being Voted on by the Fund of Funds
(a) Where there is No Material Conflict of Interest Between the Interests of the Shareholders of the Underlying Fund and the Adviser Relating to the Proposal
In the event that the Fund of Funds is voting on a proposal of the Underlying Fund and the Fund of Funds is not also voting on a substantially identical proposal and there is no material conflict of interest between the interests of the shareholders of the Underlying Fund and the Adviser relating to the Proposal, then the Adviser will vote proxies relating to the shares of the Underlying Fund pursuant to its Proxy Voting Procedures.
(b) Where there is a Material Conflict of Interest Between the Interests of the Shareholders of the Underlying Fund and the Adviser Relating to the Proposal
In the event that the Fund of Funds is voting on a proposal of the Underlying Fund and the Fund of Funds is not also voting on a substantially identical proposal and there is a material conflict of interest between the interests of the shareholders of the Underlying Fund and the Adviser relating to the Proposal, then the Fund of Funds will seek voting instructions from the shareholders of the Fund of Funds on the proposal and will vote proxies relating to shares of the Underlying Fund in the same proportion as the instructions timely received from such shareholders. A material conflict is generally defined as a proposal involving a matter in which the Adviser or one of its affiliates has a material economic interest.
Material Conflicts of Interest
If (1) a sub-adviser to a Fund becomes aware that a vote presents a material conflict between the interests of (a) shareholders of the Fund; and (b) the Fund’s Adviser, sub-adviser, principal underwriter, or any of their affiliated persons, and (2) the sub-adviser does not propose to vote on the particular issue in the manner prescribed by its Sub-adviser Proxy Policy or the material conflict of interest procedures set forth in its Sub-adviser Proxy Policy are otherwise triggered, then the sub-adviser will follow the material conflict of interest procedures set forth in its Sub-adviser Proxy Policy when voting such proxies.
If a Sub-adviser Proxy Policy provides that in the case of a material conflict of interest between Fund shareholders and another party, the sub-adviser will ask the Board to provide voting instructions, the sub-adviser shall vote the proxies, in its discretion, as recommended by an independent third party, in the manner prescribed by its Sub-adviser Proxy Policy or abstain from voting the proxies.
Proxy Voting Committee(s)
The Advisers will from time to time, and on such temporary or longer-term basis as they deem appropriate, establish one or more Proxy Voting Committees. A Proxy Voting Committee shall include the Advisers’ CCO and may include legal counsel. The terms of reference and the procedures under which a Proxy Voting Committee will operate will be reviewed from time to time by the Legal and Compliance Department. Records of the deliberations and proxy voting recommendations of a Proxy Voting Committee will be maintained in accordance with applicable law, if any, and these Proxy Procedures. Requested shareholder proposals or other Shareholder Advocacy in the name of a Fund must be submitted for consideration pursuant to the Shareholder Advocacy Policy and Procedures.
Securities Lending Program
Certain of the Funds participate in a securities lending program with the Trusts through an agent lender. When a Fund’s securities are out on loan, they are transferred into the borrower’s name and are voted by the borrower, in its discretion. Where a sub-adviser determines, however, that a proxy vote (or other shareholder action) is materially important to the client’s account, the sub-adviser should request that the agent recall the security prior to the record date to allow the sub-adviser to vote the securities.
Disclosure of Proxy Voting Policies and Procedures in the Trust’s Statement of Additional Information (“SAI”)
The Trust shall include in its SAI a summary of the Trust Proxy Policy and of the Sub-adviser Proxy Policy included therein. (In lieu of including a summary of these policies and procedures, the Trust may include each full Trust Proxy Policy and Sub-adviser Proxy Policy in the SAI.)
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Disclosure of Proxy Voting Policies and Procedures in Annual and Semi-Annual Shareholder Reports
The Trusts shall disclose in annual and semi-annual shareholder reports that a description of the Trust Proxy Policy, including the Sub- adviser Proxy Policy, and the Trusts’ proxy voting record for the most recent 12 months ended June 30 are available on the Securities and Exchange Commission’s (“SEC”) website, and without charge, upon request, by calling a specified toll-free telephone number. The Trusts will send these documents within three business days of receipt of a request, by first-class mail or other means designed to ensure equally prompt delivery. The Fund Administration Department is responsible for preparing appropriate disclosure regarding proxy voting for inclusion in shareholder reports and distributing reports. The Legal Department supporting the Trusts is responsible for reviewing such disclosure once it is prepared by the Fund Administration Department.
Filing of Proxy Voting Record on Form N-PX
The Trusts will annually file their complete proxy voting record with the SEC on Form N-PX. The Form N-PX shall be filed for the twelve months ended June 30 no later than August 31 of that year. The Fund Administration department, supported by the Legal Department supporting the Trusts, is responsible for the annual filing.
Regulatory Requirement
Rule 206(4)-6 of the Advisers Act and Rule 30b1-4 of the 1940 Act
Reporting
Disclosures in SAI: The Trusts shall disclose in annual and semi-annual shareholder reports that a description of the Trust Proxy Policy, including the Sub-adviser Proxy Policy, and the Trusts’ proxy voting record for the most recent 12 months ended June 30.
Form N-PX: The proxy voting service will file Form N-PX for each twelve-month period ending on June 30. The filing must be submitted to the SEC on or before August 31 of each year.
Procedure
Review of Sub-advisers’ Proxy Voting The Trusts have delegated proxy voting authority with respect to Fund portfolio securities in accordance with the Trust Policy, as set forth above.
Consistent with this delegation, each sub-adviser is responsible for the following:
1. Implementing written policies and procedures, in compliance with Rule 206(4)-6 under the Advisers Act, reasonably designed to ensure that the sub-adviser votes portfolio securities in the best interest of shareholders of the Trusts.
2. Providing the Advisers with a copy and description of the Sub-adviser Proxy Policy prior to being approved by the Board as a sub-adviser, accompanied by a certification that represents that the Sub-adviser Proxy Policy has been adopted in conformance with Rule 206(4)-6 under the Advisers Act. Thereafter, providing the Advisers with notice of any amendment or revision to that Sub-adviser Proxy Policy or with a description thereof. The Advisers are required to report all material changes to a Sub-adviser Proxy Policy quarterly to the Board. The CCO’s annual written compliance report to the Board will contain a summary of the material changes to each Sub-adviser Proxy Policy during the period covered by the report.
3. Providing the Adviser with a quarterly certification indicating that the sub-adviser did vote proxies of the funds and that the proxy votes were executed in a manner consistent with the Sub-adviser Proxy Policy. If the sub-adviser voted any proxies in a manner inconsistent with the Sub-adviser Proxy Policy, the sub-adviser will provide the Adviser with a report detailing the exceptions.
Adviser Responsibilities The Trusts have retained a proxy voting service to coordinate, collect, and maintain all proxy-related information, and to prepare and file the Trust’s reports on Form N-PX with the SEC.
The Advisers, in accordance with their general oversight responsibilities, will periodically review the voting records maintained by the proxy voting service in accordance with the following procedures:
1. Receive a file with the proxy voting information directly from each sub-adviser on a quarterly basis.
2. Select a sample of proxy votes from the files submitted by the sub-advisers and compare them against the proxy voting service files for accuracy of the votes.
3. Deliver instructions to shareholders on how to access proxy voting information via the Trust’s semi-annual and annual shareholder reports.
The Fund Administration Department, in conjunction with the Legal Department supporting the Trusts, is responsible for the foregoing procedures.
Proxy Voting Service Responsibilities Proxy voting services retained by the Trusts are required to undertake the following procedures:
• | Aggregation of Votes: |
The proxy voting service’s proxy disclosure system will collect fund-specific and/or account-level voting records, including votes cast by multiple sub- advisers or third-party voting services.
• | Reporting: |
The proxy voting service’s proxy disclosure system will provide the following reporting features:
1. multiple report export options;
2. report customization by fund-account, portfolio manager, security, etc.; and
3. account details available for vote auditing.
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• | Form N-PX Preparation and Filing: |
The Advisers will be responsible for oversight and completion of the filing of the Trusts’ reports on Form N-PX with the SEC. The proxy voting service will prepare the EDGAR version of Form N-PX and will submit it to the adviser for review and approval prior to filing with the SEC. The proxy voting service will file Form N-PX for each twelve-month period ending on June 30. The filing must be submitted to the SEC on or before August 31 of each year. The Fund Administration Department, in conjunction with the Legal Department supporting the Trusts, is responsible for the foregoing procedures.
The Fund Administration Department in conjunction with the CCO oversees compliance with this policy.
The Fund Administration Department maintains operating procedures affecting the administration and disclosure of the Trusts’ proxy voting records.
The Trusts’ Chief Legal Counsel is responsible for including in the Trusts’ SAI information regarding the Advisers’ and each sub-advisers proxy voting policies as required by applicable rules and form requirements.
Key Contacts
Investment Compliance
Escalation/Reporting Violations
All John Hancock employees are required to report any known or suspected violation of this policy to the CCO of the Funds.
Related Policies and Procedures
7B Registration Statements and Prospectuses
Document Retention Requirements
The Fund Administration Department and The CCO’s Office is responsible for maintaining all documentation created in connection with this policy. Documents will be maintained for the period set forth in the Records Retention Schedule. See Compliance Policy: Books and Records.
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5E: Proxy Voting Policies and Procedures for the Adviser
General Compliance Policies for Trust & Adviser
Section 5: Fiduciary Standards & Affiliated Persons Issues
Applies to | Adviser | |
Risk Theme | Proxy Voting | |
Policy Owner | Jim Interrante | |
Effective Date | 12-1-2019 |
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5E. Advisers Proxy Voting Policy
Overview
The SEC adopted Rule 206(4)-6 under the Advisers Act, which requires investment advisers with voting authority to adopt and implement written policies and procedures that are reasonably designed to ensure that the investment adviser votes client securities in the best interest of clients. The procedures must include how the investment adviser addresses material conflicts that may arise between the interests of the investment adviser and those of its clients. The Advisers are registered investment advisers under the Advisers Act and serve as the investment advisers to the Funds. The Advisers generally retain one or more sub-advisers to manage the assets of the Funds, including voting proxies with respect to a Fund’s portfolio securities. From time to time, however, the Advisers may elect to manage directly the assets of a Fund, including voting proxies with respect to such Fund’s portfolio securities, or a Fund’s Board may otherwise delegate to the Advisers authority to vote such proxies. Rule 206(4)-6 under the Advisers Act requires that a registered investment adviser adopt and implement written policies and procedures reasonably designed to ensure that it votes proxies with respect to a client’s securities in the best interest of the client.
Firms are required by Advisers Act Rule 204-2(c)(2) to maintain records of their voting policies and procedures, a copy of each proxy statement that the investment adviser receives regarding client securities, a record of each vote cast by the investment adviser on behalf of a client, a copy of any document created by the investment adviser that was material to making a decision how to vote proxies on behalf of a client, and a copy of each written client request for information on how the adviser voted proxies on behalf of the client, as well as a copy of any written response by the investment adviser to any written or oral client request for information on how the adviser voted that client’s proxies.
Investment companies must disclose information about the policies and procedures used to vote proxies on the investment company’s portfolio securities and must file the fund’s proxy voting record with the SEC annually on Form N-PX.
Pursuant thereto, the Advisers have adopted and implemented these proxy voting policies and procedures (the “Proxy Procedures”).
Policy
It is the Advisers’ policy to comply with Rule 206(4)-6 and Rule 204-2(c)(2) under the Advisers Act as described above. In general, the Advisers delegate proxy voting decisions to the sub-advisers managing the funds. If an instance occurs where a conflict of interest arises between the shareholders and a particular sub-adviser, however, the Adviser retains the right to influence and/or direct the conflicting proxy voting decisions.
Regulatory Requirement
Rule 206(4)-6 under the Advisers Act
Reporting
Form N-PX
Advisers will provide the Board with notice and a copy of any amendments or revisions to the Procedures and will report quarterly to the Board all material changes to these Proxy Procedures.
The CCO’s annual written compliance report to the Board will contain a summary of material changes to the Proxy Procedures during the period covered by the report.
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If the Advisers or the Designated Person vote any proxies in a manner inconsistent with either these Proxy Procedures or a Fund’s proxy voting policies and procedures, the CCO will provide the Board with a report detailing such exceptions.
Procedure
Fiduciary Duty
The Advisers have a fiduciary duty to vote proxies on behalf of a Fund in the best interest of the Fund and its shareholders.
Voting of Proxies—Advisers
The Advisers will vote proxies with respect to a Fund’s portfolio securities when authorized to do so by the Fund and subject to the Fund’s proxy voting policies and procedures and any further direction or delegation of authority by the Fund’s Board. The decision on how to vote a proxy will be made by the person(s) to whom the Advisers have from time to time delegated such responsibility (the “Designated Person”). The Designated Person may include the Fund’s portfolio manager(s) or a Proxy Voting Committee, as described below.
When voting proxies with respect to a Fund’s portfolio securities, the following standards will apply:
• | The Designated Person will vote based on what it believes is in the best interest of the Fund and its shareholders and in accordance with the Fund’s investment guidelines. |
• | Each voting decision will be made independently. To assist with the analysis of voting issues and/or to carry out the actual voting process the Designated Person may enlist the services of (1) reputable professionals (who may include persons employed by or otherwise associated with the Advisers or any of its affiliated persons) or (2) independent proxy evaluation services such as Institutional Shareholder Services. However, the ultimate decision as to how to vote a proxy will remain the responsibility of the Designated Person. |
• | The Advisers believe that a good management team of a company will generally act in the best interests of the company. Therefore, the Designated Person will take into consideration as a key factor in voting proxies with respect to securities of a company that are held by the Fund the quality of the company’s management. In general, the Designated Person will vote as recommended by company management except in situations where the Designated Person believes such recommended vote is not in the best interests of the Fund and its shareholders. |
• | As a general principle, voting with respect to the same portfolio securities held by more than one Fund should be consistent among those Funds having substantially the same investment mandates. |
• | The Advisers will provide the Fund, from time to time in accordance with the Fund’s proxy voting policies and procedures and any applicable laws and regulations, a record of the Advisers’ voting of proxies with respect to the Fund’s portfolio securities. |
Material Conflicts of Interest
In carrying out its proxy voting responsibilities, the Advisers will monitor and resolve potential material conflicts (“Material Conflicts”) between the interests of (a) a Fund and (b) the Advisers or any of its affiliated persons. Affiliates of the Advisers include Manulife Financial Corporation and its subsidiaries. Material Conflicts may arise, for example, if a proxy vote relates to matters involving any of these companies or other issuers in which the Advisers or any of their affiliates has a substantial equity or other interest.
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5E. Advisers Proxy Voting Policy
If the Advisers or a Designated Person become aware that a proxy voting issue may present a potential Material Conflict, the issue will be referred to the Advisers’ Legal Department and/or the Office of the CCO. If the Legal Department and/or the Office of the CCO, as applicable determines that a potential Material Conflict does exist, a Proxy Voting Committee will be appointed to consider and resolve the issue. The Proxy Voting Committee may make any determination that it considers reasonable and may, if it chooses, request the advice of an independent, third-party proxy service on how to vote the proxy.
Voting Proxies of Underlying Funds of a Fund of Funds
The Advisers or the Designated Person will vote proxies with respect to the shares of a Fund that are held by another Fund that operates as a Fund of Funds”) in the manner provided in the proxy voting policies and procedures of the Fund of Funds (including such policies and procedures relating to material conflicts of interest) or as otherwise directed by the board of trustees or directors of the Fund of Funds.
Proxy Voting Committee(s)
The Advisers will from time to time, and on such temporary or longer-term basis as they deem appropriate, establish one or more Proxy Voting Committees. A Proxy Voting Committee shall include the Advisers’ CCO and may include legal counsel. The terms of reference and the procedures under which a Proxy Voting Committee will operate will be reviewed from time to time by the Legal and Compliance Department. Records of the deliberations and proxy voting recommendations of a Proxy Voting Committee will be maintained in accordance with applicable law, if any, and these Proxy Procedures. Requested shareholder proposals or other Shareholder Advocacy must be submitted for consideration pursuant to the Shareholder Advocacy Policy and Procedures.
Voting of Proxies - SubAdvisers
In the case of proxies voted by a sub-adviser to a Fund pursuant to the Fund’s proxy voting procedures, the Advisers will request the sub-adviser to certify to the Advisers that the sub-adviser has voted the Fund’s proxies as required by the Fund’s proxy voting policies and procedures and that such proxy votes were executed in a manner consistent with these Proxy Procedures and to provide the Advisers with a report detailing any instances where the sub-adviser voted any proxies in a manner inconsistent with the Fund’s proxy voting policies and procedures. The COO of the Advisers will then report to the Board on a quarterly basis regarding the sub-adviser certification and report to the Board any instance where the sub-adviser voted any proxies in a manner inconsistent with the Fund’s proxy voting policies and procedures.
The Fund Administration Department maintains procedures affecting all administration functions for the mutual funds. These procedures detail the disclosure and administration of the Trust’s proxy voting records.
The Trust’s Chief Legal Counsel is responsible for including, in the SAI of each Trust, information about the proxy voting of the Advisers and each sub-adviser.
Reporting to Fund Boards
The CCO of the Advisers will provide the Board with a copy of these Proxy Procedures, accompanied by a certification that represents that the Proxy Procedures have been adopted by the Advisers in conformance with Rule 206(4)-6 under the Advisers Act. Thereafter, the Advisers will provide the Board with notice and a copy of any amendments or revisions to the Procedures and will report quarterly to the Board all material changes to these Proxy Procedures.
The CCO’s annual written compliance report to the Board will contain a summary of material changes to the Proxy Procedures during the period covered by the report.
If the Advisers or the Designated Person vote any proxies in a manner inconsistent with either these Proxy Procedures or a Fund’s proxy voting policies and procedures, the CCO will provide the Board with a report detailing such exceptions
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Key Contacts
Investment Compliance
Escalation/Reporting Violations
All John Hancock employees are required to report any known or suspected violation of this policy to the CCO of the Funds.
Related Policies and Procedures
N/A
Document Retention Requirements
The Advisers will retain (or arrange for the retention by a third party of) such records relating to proxy voting pursuant to these Proxy Procedures as may be required from time to time by applicable law and regulations, including the following:
1. | These Proxy Procedures and all amendments hereto; |
2. | All proxy statements received regarding Fund portfolio securities; |
3. | Records of all votes cast on behalf of a Fund; |
4. | Records of all Fund requests for proxy voting information; |
5. | Any documents prepared by the Designated Person or a Proxy Voting Committee that were material to or memorialized the basis for a voting decision; |
6. | All records relating to communications with the Funds regarding Conflicts; and |
7. | All minutes of meetings of Proxy Voting Committees. |
The Office of the CCO, and/or the Legal Department are responsible for maintaining the documents set forth above as needed and deemed appropriate. Such documents will be maintained in the Office of the CCO, and/or the Legal Department for the period set forth in the Records Retention Schedule.
Version History | ||||
Date | Effective Date | Approving Party | ||
1 | 01-01-2012 | |||
2 | 02-01-2015 | |||
3 | Sept. 2015 | |||
4 | 05-01-2017 | |||
5 | 12-01-2019 |
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BOSTON PARTNERS GLOBAL INVESTORS, INC.
Proxy Voting Policies and Procedures
February 2024
Boston Partners
One Beacon Street, 30th Floor
Boston, MA 02108—www.boston-partners.com
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PROXY VOTING POLICIES AND PROCEDURES
Boston Partners Global Investors, Inc. (“Boston Partners”) is an investment adviser comprised of two divisions, Boston Partners and Weiss, Peck & Greer Partners (“WPG”). Boston Partners’ Governance Committee (the “Committee”) is comprised of representatives from portfolio management, securities analyst, portfolio research, quantitative research, investor relations, sustainability and engagement, and legal/compliance teams. The Committee is responsible for administering and overseeing Boston Partners’ proxy voting process. The Committee makes decisions on proxy policy, establishes formal Boston Partners’ Proxy Voting Policies (the “Proxy Voting Policies”) and updates the Proxy Voting Policies as necessary, but no less frequently than annually. In addition, the Committee, in its sole discretion, delegates certain functions to internal departments and/or engages third-party vendors to assist in the proxy voting process. Finally, members of the Committee are responsible for evaluating and resolving conflicts of interest relating to Boston Partners’ proxy voting process.
To assist Boston Partners in carrying out our responsibilities with respect to proxy activities, Boston Partners has engaged Institutional Shareholder Services Inc. (“ISS”), a third-party corporate governance research service, which is registered as an investment adviser. ISS receives all proxy-related materials for securities held in client accounts and votes the proposals in accordance with Boston Partners’ Proxy Voting Policies. ISS assists Boston Partners with voting execution through an electronic vote management system that allows ISS to pre-populate and automatically submit votes in accordance with Boston Partners’ Proxy Voting Policies. While Boston Partners may consider ISS’s recommendations on proxy issues, Boston Partners bears ultimate responsibility for proxy voting decisions and can change votes via ISS’ electronic voting platform at any time before a meeting’s cut-off date. ISS also provides recordkeeping and vote-reporting services.
How Boston Partners Votes
For those clients who delegate proxy voting authority to Boston Partners, Boston Partners has full discretion over votes cast on behalf of clients. All proxy votes on behalf of clients are voted the same way; however, Boston Partners may refrain from voting proxies for certain clients in certain markets. These arrangements are outlined in respective client investment management agreements. Boston Partners may also refrain from voting proxies on behalf of clients when shares are out on loan; when share blocking is required to vote; where it is not possible to vote shares; where there are legal or operational difficulties; where Boston Partners believes the administrative burden and/ or associated cost exceeds the expected benefit to a client; or where not voting or abstaining produces the desired outcome.
Boston Partners meets with ISS at least annually to review ISS policy changes, themes, methodology, and to review the Proxy Voting Policies. The information is taken to the Committee to discuss and decide what changes, if any, need to be made to the Proxy Voting Policies for the upcoming year.
The Proxy Voting Policies provide standard positions on likely issues for the upcoming proxy season. In determining how proxies should be voted, including those proxies the Proxy Voting Policies do not address or where the Proxy Voting Policies’ application is ambiguous, Boston Partners primarily focuses on maximizing the economic value of its clients’ investments. This is accomplished through engagements with Boston Partners’ analysts and issuers, as well as independent research conducted by Boston Partners’ Sustainability and Engagement Team. In the case of social and political responsibility issues that, in its view, do not primarily involve financial considerations, it is Boston Partners’ objective to support shareholder proposals that it believes promote good corporate citizenship. If Boston Partners believes that any research provided by ISS or other sources is incorrect, that research is ignored in the proxy voting decision, which is escalated to the Committee so that all relevant facts can be discussed, and a final vote determination can be made. Boston Partners is alerted to proposals that may require more detailed analysis via daily system generated refer notification emails. These emails prompt the Committee Secretary to call a Committee meeting to discuss the items in question.
Although Boston Partners has instructed ISS to vote in accordance with the Proxy Voting Policies, Boston Partners retains the right to deviate from the Proxy Voting Policies if, in its estimation, doing so would be in the best interest of clients.
Conflicts
Boston Partners believes clients are sufficiently insulated from any actual or perceived conflicts Boston Partners may encounter between its interests and those of its clients because Boston Partners votes proxies based on the predetermined Proxy Voting Policies. However, as noted, Boston Partners may deviate from the Proxy Voting Policies in certain circumstances, or the Proxy Voting Policies may not address certain proxy voting proposals. If a member of Boston Partners’ research or portfolio management team recommends that Boston Partners vote a particular proxy proposal in a manner inconsistent with the Proxy Voting Policies or if the Proxy Voting
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Policies do not address a particular proposal, Boston Partners will adhere to certain procedures designed to ensure that the decision to vote the particular proxy proposal is based on the best interest of Boston Partners’ clients. These procedures require the individual requesting a deviation from the Proxy Voting Policies to complete a Conflicts Questionnaire (the “Questionnaire”) along with written documentation of the economic rationale supporting the request. The Questionnaire seeks to identify possible relationships with the parties involved in the proxy that may not be apparent. Based on the responses to the Questionnaire, the Committee (or a subset of the Committee) will determine whether it believes a material conflict of interest is present. If a material conflict of interest is found to exist, Boston Partners will vote in accordance with client instructions, seek the recommendation of an independent third-party or resolve the conflict in such other manner as Boston Partners believes is appropriate, including by making its own determination that a particular vote is, notwithstanding the conflict, in the best interest of clients.
Oversight
Meetings and upcoming votes are reviewed by the Committee Secretary with a focus on votes against management. Votes on behalf of Boston Partners’ clients are reviewed and compared against ISS’ recommendations. When auditing vote instructions, which Boston Partners does at least annually, ballots voted for a specified period are requested from ISS, and a sample of those meetings are reviewed by Boston Partners’ Operations Team. The information is then forwarded to compliance/ the Committee Secretary for review. Any perceived exceptions are reviewed with ISS and an analysis of what the potential vote impact would have been is conducted. ISS’ most recent SOC-1 indicates they have their own control and audit personnel and procedures, and a sample of ballots are randomly selected on a quarterly basis. ISS compares ballots to applicable vote instructions recorded in their database. Due diligence meetings with ISS are conducted periodically.
Disclosures
A copy of Boston Partners’ Proxy Voting Policies and Procedures, as updated from time to time, as well as information regarding the voting of securities for a client account are available upon request from your Boston Partners relationship manager. A copy of Boston Partners’ Proxy Voting Policies and Procedures are also available at https://www.boston-partners.com/. For general inquires, contact (617) 832-8162.
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Other Information
1.(a) | Amended and Restated Declaration of Trust dated January 22, 2016. – previously filed as exhibit 99.(a) to post-effective |
1.(a).1 | Amendment dated December 13, 2018 to the Amended and Restated Declaration of Trust dated January 22, 2016. – |
2.(a) | Amended and Restated By-Laws dated March 8, 2005. – previously filed as exhibit 99.(b) to post-effective amendment no. |
2.(a).1 | Amendment dated March 11, 2008 to the Amended and Restated By-Laws dated March 8, 2005. – previously filed as |
2.(a).2 | Amendment dated June 9, 2009 to the Amended and Restated By-Laws dated March 8, 2005. – previously filed as exhibit |
2.(a).3 | Amendment dated August 31, 2010 to the Amended and Restated By-Laws dated March 8, 2005. – previously filed as |
2.(a).4 | Amendment dated March 10, 2016 to the Amended and Restated By-Laws dated March 8, 2005. – previously filed as |
3 | Not applicable. |
4 | Form of Agreement and Plan of Reorganization (filed herewith as Exhibit A to the Proxy Statement/Prospectus). |
5 | See Exhibits 1 and 2. |
6.(a) | Amended and Restated Advisory Agreement dated June 30, 2020 between John Hancock Investment Trust (the “Registrant”) and John Hancock Investment Management LLC1 (the “Advisor”). – previously filed as exhibit 99.(d) to |
6.(a).1 | Form of Amendment to Advisory Agreement dated June 27, 2024 between the Registrant and the Advisor relating to John Hancock Disciplined Value Global Long/Short Fund. – FILED HEREWITH. |
6.(a).2 | Subadvisory Agreement dated June 25, 2014 between the Advisor and Boston Partners Global Investors, Inc. (formerly, Robeco Investment Management, Inc.) (“Boston Partners Subadvisory Agreement”). - previously filed as exhibit 99.(d).15 |
6.(a).3 | Form of Amendment dated June 27, 2024 to the Boston Partners Subadvisory Agreement relating to John Hancock Disciplined Value Global Long/Short Fund. – FILED HEREWITH. |
7.(a) | Amended and Restated Distribution Agreement dated June 30, 2020 between the Registrant and John Hancock Investment Management Distributors LLC (the “Distributor”). – previously filed as exhibit 99.(e) to post-effective |
8 | Not Applicable. |
9.(a) | Master Global Custodial Services Agreement dated March 3, 2014 among John Hancock Mutual Funds and Citibank. N.A. |
9.(a).1 | Amendment dated August 1, 2019 to Master Global Custodial Services Agreement dated March 3, 2014 among John Hancock Mutual Funds and Citibank. N.A. – previously filed as exhibit 99.(g).3 to post-effective amendment no. 205 filed |
9.(a).2 | Amendment dated June 1, 2021 to Master Global Custodial Services Agreement dated March 3, 2014 among John Hancock Mutual Funds and Citibank, N.A. – previously filed as exhibit 99(g)(5) to post-effective amendment no. 166 filed |
9.(a).3 | Form of Amendment dated June 27, 2024 to Master Global Custodial Services Agreement dated March 3, 2014 among John Hancock Mutual Funds and Citibank, N.A. – FILED HEREWITH. |
10.(a) | Rule 18f-3 Plan. Amended and Restated Multiple Class Plan pursuant to Rule 18f-3 dated December 17, 2014, as amended June 22, 2017 (“18f-3 Plan”), for certain John Hancock Mutual Funds advised by John Hancock Investment |
10.(a).1 | Amended and Restated Distribution Plan Pursuant to Rule 12b-1 dated June 30, 2020 relating to Class A Shares. – |
10.(a).2 | Form of Amendment dated June 27, 2024 to Amended and Restated Distribution Plan Pursuant to Rule 12b-1 dated June 30, 2020 relating to Class A Shares. – FILED HEREWITH. |
10.(a).3 | Form of Rule 12b-1 Fee Waiver Letter Agreement dated December 14, 2023, between the Registrant and the Distributor. |
11 | Opinion of Dechert LLP regarding legality of issuance of shares and other matters. – FILED HEREWITH. |
12.(a) | Form of Opinion of Dechert LLP on tax matters. – FILED HEREWITH. |
12.(a).1 | Consent of Dechert LLP. – FILED HEREWITH. |
13.(a) | Amended and Restated Transfer Agency and Service Agreement dated July 1, 2013 (“Restated Transfer Agency Agreement”) between John Hancock Mutual Funds advised by John Hancock Investment Management LLC and John Hancock Signature Services, Inc. – previously filed as exhibit 99.(h).5 to post-effective amendment no. 124 filed on |
13.(a).1 | Amendment dated October 1, 2013 to the Restated Transfer Agency Agreement. – previously filed as exhibit 99.(h).6 to |
13.(a).2 | Amendment dated December 14, 2023 to the Restated Transfer Agency Agreement. – previously filed as exhibit 99(h)(6) |
13.(a).3 | Form of Amendment dated June 27, 2024 to Restated Transfer Agency Agreement. – FILED HEREWITH. |
13.(a).4 | Amended and Restated Service Agreement dated June 24, 2021 between the Registrant and the Advisor. – previously |
13.(a).5 | Service Agreement dated June 30, 2020 among the Registrant, the Advisor, and the Registrant’s Chief Compliance |
13.(a).6 | Services Agreement dated March 3, 2014 among John Hancock Mutual Funds and Citi Fund Services Ohio, Inc. – |
13.(a).7 | Amendment dated February 1, 2015 to Services Agreement dated March 3, 2014 among John Hancock Mutual Funds and Citi Fund Services Ohio, Inc. – previously filed as exhibit 99.(h).10 to post-effective amendment no. 142 filed on |
13.(a).8 | Amendment dated September 1, 2019 to Services Agreement dated March 3, 2014 among John Hancock Mutual Funds and Citi Fund Services Ohio, Inc. – previously filed as exhibit 99.(h).10 to post-effective amendment no. 205 filed on |
13.(a).9 | Amendment dated June 1, 2021 to Services Agreement dated March 3, 2014 among John Hancock Mutual Funds and Citi Fund Services Ohio, Inc. – previously filed as exhibit 99(h)(11) to post-effective amendment no. 166 filed on July 16, |
13.(a).10 | Form of Expense Limitation Letter Agreement and Voluntary Expense Limitation Notice dated December 14, 2023 between the Registrant and the Advisor. – previously filed as exhibit 99(h)(14) to post-effective amendment no. 225 filed |
13.(a).11 | Agreement to Waive Advisory Fees and Reimburse Expenses dated June 29, 2023 between the Registrant and the Advisor. |
13.(a).12 | Fund of Funds Investment Agreement dated January 19, 2022 between the Registrant and John Hancock Variable |
14 | Consent of Independent Registered Public Accounting Firm. – FILED HEREWITH. |
15 | Not Applicable. |
16 | Power of Attorney dated June 27, 2024. – FILED HEREWITH. |
17 | Form of Proxy Card. – FILED HEREWITH. |
JOHN HANCOCK INVESTMENT TRUST | |
By: | /s/ Kristie M. Feinberg |
Name: Kristie M. Feinberg Title: President |
Signature | Title | Date |
/s/ Kristie M. Feinberg | President | June 28, 2024 |
Kristie M. Feinberg | ||
/s/ Charles A. Rizzo | Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | June 28, 2024 |
Charles A. Rizzo | ||
/s/ Andrew G. Arnott* | Trustee | June 28, 2024 |
Andrew G. Arnott | ||
/s/ James R. Boyle* | Trustee | June 28, 2024 |
James R. Boyle | ||
/s/ William H. Cunningham* | Trustee | June 28, 2024 |
William H. Cunningham | ||
/s/ Noni L. Ellison* | Trustee | June 28, 2024 |
Noni L. Ellison | ||
/s/ Grace K. Fey* | Trustee | June 28, 2024 |
Grace K. Fey | ||
/s/ Dean C. Garfield* | Trustee | June 28, 2024 |
Dean C. Garfield | ||
/s/ Deborah C. Jackson* | Trustee | June 28, 2024 |
Deborah C. Jackson | ||
/s/ Paul Lorentz* | Trustee | June 28, 2024 |
Paul Lorentz | ||
/s/ Hassell H. McClellan* | Trustee | June 28, 2024 |
Hassell H. McClellan | ||
/s/ Steven R. Pruchansky* | Trustee | June 28, 2024 |
Steven R. Pruchansky | ||
/s/ Frances G. Rathke* | Trustee | June 28, 2024 |
Frances G. Rathke | ||
Trustee | June 28, 2024 | |
Gregory A. Russo |