BOSTON, Oct. 3, 2014 /PRNewswire/ -- John Hancock Investments, an industry leader in asset allocation, today announced immediate expense reductions across its top-performing suite of Retirement Living Portfolios, providing significant cost savings for shareholders and positioning the products for the growing target-date market.
John Hancock Retirement Living Portfolios are unique in that they combine up to 50 distinct investment strategies from 20 specialized managers worldwide. Active asset allocation decisions are made by the global asset allocation team at John Hancock Asset Management, a pioneer in portfolio solutions for the retirement market, managing over $118 billion in multi-asset strategies. The Retirement Living Suite comprises ten portfolios with target retirement dates spanning from 2010 to 2055. Each portfolio eligible to be rated by Morningstar carries a 4- or 5-star rating on its R6 share class as of August 31, 2014. John Hancock Investments has lowered expenses by 20 to 26 basis points across the entire suite.
Target-date funds, introduced in the 1990s, experienced rapid adoption rates after the Pension Protection Act of 2006 paved the way for plan sponsors to add the broadly diversified portfolios as default investment options in plans with automatic enrollment. In 2013, the Department of Labor issued guidance to plan fiduciaries choosing among target-date strategies that highlighted the diversification benefits of portfolios populated with multiple managers. Today, industry researcher Cerulli Associates projects that target-date funds are on track to receive 63 percent of all 401(k) contributions and could make up 35 percent of all 401(k) assets by 2018.
"America's large pension plans and endowments routinely hire specialized managers for every sleeve of a diversified portfolio to ensure a diversity of expertise and investment approaches," explained Andrew G. Arnott, president and CEO of John Hancock Investments. "We believe participants in defined contribution retirement plans deserve the same, so we designed our Retirement Living Portfolios to offer a deeper level of diversification—by security, asset class, investment style, and manager. Plan sponsors and participants have enthusiastically embraced these portfolios as a way to automatically manage risk along the road to retirement. The expense reductions we announced today will lower fees while enabling our unique manager-of-managers approach to reach an even wider number of plan sponsors and participants in the future."
The portfolio's performance depends on the advisor's skill in determining asset class allocations, the mix of underlying funds, and the performance of those underlying funds. The portfolio is subject to the same risks as the underlying funds and exchange-traded funds in which it invests: Stocks and bonds can decline due to adverse issuer, market, regulatory, or economic developments; foreign investing, especially in emerging markets, has additional risks, such as currency and market volatility and political and social instability; the securities of small companies are subject to higher volatility than those of larger, more established companies; and high-yield bonds are subject to additional risks, such as increased risk of default. Each portfolio's name refers to the approximate retirement year of the investors for whom the portfolio's asset allocation strategy is designed. The portfolios with dates farther off initially allocate more aggressively to stock funds. As a portfolio approaches and passes its target date, the allocation will gradually migrate to more conservative, fixed-income funds. The principal value of each portfolio is not guaranteed, and you could lose money at any time, including at, or after, the target date. Hedging and other strategic transactions may increase volatility and result in losses if not successful. Please see the portfolio's prospectus for additional risks.
A portfolio's investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. To obtain a prospectus, contact your financial professional, call John Hancock Investments at 800-225-5291, or visit our website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
About John Hancock Investments
John Hancock has helped individuals and institutions build and protect wealth since 1862. Today, we are one of America's strongest and most-recognized brands. As a manager of managers, we search the world to find proven portfolio teams with specialized expertise for every fund we offer, then apply vigorous investment oversight to ensure they continue to meet our uncompromising standards. Our unique approach to asset management has led to a diverse set of investments deeply rooted in investor needs, along with strong risk-adjusted returns across asset classes. John Hancock Investments managed more than $123 billion in assets as of June 30, 2014.
About John Hancock Financial and Manulife
John Hancock Financial is a division of Manulife, a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Operating as Manulife in Canada and Asia, and primarily as John Hancock in the United States, our group of companies offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents and distribution partners. Funds under management by Manulife and its subsidiaries were C$637 billion (US$597 billion) as at June 30 2014. Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife can be found on the Internet at manulife.com.
The John Hancock unit, through its insurance companies, comprises one of the largest life insurers in the United States. John Hancock offers and administers a broad range of financial products, including life insurance, annuities, investments, 401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at johnhancock.com.
SOURCE John Hancock Investments