John Hancock Investments has announced a reduction in fees – its fourth such move in less than three years – on a broad range of funds that together represent more than USD36 billion in assets under management.
Reductions of up to 26 basis points or up to 38 per cent per fund vary by fund and result from a combination of direct cuts, contractual expense caps, new breakpoints, and growing economies of scale.
"Maximising the value we provide our mutual fund shareholders goes well beyond the strong risk-adjusted performance of our funds," says Andrew G Arnott, President and CEO of John Hancock Investments. "We remain intensely focused on fees and on ensuring that our funds are cost effective for investors."
Much of the opportunity to repeatedly lower expenses stems from surging assets under management at John Hancock Investments and the greater economies of scale it provides. The firm has experienced 14 consecutive calendar quarters of positive net flows, and mutual fund assets have increased nearly 16 per cent year-over-year through the end of May. This dramatic growth has been driven in large part by the firm's exceptionally strong performance, with 35 funds rated four or five stars by Morningstar at the highest-rated share class.
"Investors and financial advisors increasingly have turned to our unique manager-of-managers approach because they value the more than 25 years' experience in manager research and oversight we put into every one of our funds," says Arnott. "We're pleased that our growth in assets under management enables us to share those greater economies of scale with our investors."
Funds with contractual expense reductions to net expense ratios ranging from one to 24 basis points include:
• John Hancock Global Income Fund (Class A and Class I only)
• John Hancock International Core Fund (Class A and Class I only)
• John Hancock Small Cap Value Fund (Class A and Class I only)
• John Hancock Small Company Fund (Class A and Class I only)
• John Hancock Value Equity Fund
In addition to these expense reductions, other John Hancock mutual funds continue to see their expenses decline due to asset growth and lower custodian fees. Expenses are estimated to be between three and 24 basis points lower going forward for Class A shares for the following funds:
• John Hancock Core High Yield Fund
• John Hancock Disciplined Value Fund
• John Hancock Disciplined Value Mid Cap Fund
• John Hancock Global Shareholder Yield Fund
• John Hancock International Growth Fund
• John Hancock International Value Equity
• John Hancock Strategic Growth Fund
John Hancock Investments also lowered expenses by 20 to 26 basis points across both the John Hancock Retirement Living II target-date suite and the John Hancock Retirement Choices target-date suite, which total 20 funds. Target-date funds have played an increasingly important role as default options in retirement plans. These cuts provide significant cost savings for shareholders while also positioning the funds for future growth.
