UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-08568
John Hancock Financial Opportunities Fund (Exact name of registrant as specified in charter)
200 Berkeley Street, Boston, Massachusetts 02116 (Address of principal executive offices) (Zip code)
Salvatore Schiavone
Treasurer
200 Berkeley Street
Boston, Massachusetts 02116
(Name and address of agent for service) Registrant's telephone number, including area code: 617-663-4497
Date of fiscal year end: |
December 31 |
Date of reporting period: |
December 31, 2020 |
ITEM 1. REPORTS TO STOCKHOLDERS.
1 | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | ANNUAL REPORT |
ANNUAL REPORT | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | 2 |
3 | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | ANNUAL REPORT |
ANNUAL REPORT | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | 4 |
5 | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | ANNUAL REPORT |
ANNUAL REPORT | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | 6 |
Shares | Value | ||||
Common stocks 116.6% (95.1% of Total investments) | $623,269,684 | ||||
(Cost $422,214,438) | |||||
Financials 114.4% | 611,850,771 | ||||
Banks 97.2% | |||||
1st Source Corp. (A) | 121,706 | 4,904,752 | |||
Altabancorp | 9,327 | 260,410 | |||
American Business Bank (B) | 62,608 | 1,992,813 | |||
American National Bankshares, Inc. | 93,258 | 2,444,292 | |||
American River Bankshares | 79,125 | 1,040,494 | |||
American Riviera Bank (B) | 186,611 | 3,079,082 | |||
Ameris Bancorp | 290,965 | 11,077,038 | |||
Atlantic Capital Bancshares, Inc. (B) | 202,690 | 3,226,825 | |||
Atlantic Union Bankshares Corp. | 251,010 | 8,268,269 | |||
Avidbank Holdings, Inc. (B) | 200,000 | 3,500,000 | |||
Bank of America Corp. (A)(C) | 430,148 | 13,037,786 | |||
Bank of Commerce Holdings | 140,463 | 1,390,584 | |||
Bank of Marin Bancorp | 117,462 | 4,033,645 | |||
Bar Harbor Bankshares | 129,698 | 2,929,878 | |||
BayCom Corp. (B) | 123,093 | 1,867,321 | |||
Berkshire Hills Bancorp, Inc. | 172,246 | 2,948,852 | |||
Bremer Financial Corp. (D)(E) | 41,667 | 3,560,719 | |||
Bryn Mawr Bank Corp. | 80,000 | 2,447,600 | |||
Business First Bancshares, Inc. | 54,269 | 1,104,917 | |||
Cadence BanCorp | 286,424 | 4,703,082 | |||
California Bancorp, Inc. (B) | 99,644 | 1,550,461 | |||
Cambridge Bancorp | 55,526 | 3,872,939 | |||
Camden National Corp. | 54,131 | 1,936,807 | |||
Central Valley Community Bancorp | 59,413 | 884,660 | |||
Centric Financial Corp. (B)(D) | 275,000 | 2,198,625 | |||
Citigroup, Inc. | 222,183 | 13,699,804 | |||
Citizens Community Bancorp, Inc. | 107,710 | 1,172,962 | |||
Citizens Financial Group, Inc. | 380,430 | 13,604,177 | |||
City Holding Company | 30,868 | 2,146,869 | |||
Civista Bancshares, Inc. | 171,523 | 3,006,798 | |||
Coastal Financial Corp. (B) | 124,053 | 2,605,113 | |||
Columbia Banking System, Inc. (A)(C) | 183,487 | 6,587,183 | |||
Comerica, Inc. | 167,706 | 9,368,057 | |||
Communities First Financial Corp. (B) | 115,523 | 3,586,989 | |||
County Bancorp, Inc. | 68,128 | 1,504,266 | |||
Cullen/Frost Bankers, Inc. (A)(C) | 140,491 | 12,255,030 | |||
CVB Financial Corp. | 106,152 | 2,069,964 | |||
Eagle Bancorp Montana, Inc. | 118,378 | 2,511,981 | |||
East West Bancorp, Inc. | 43,408 | 2,201,220 |
7 | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Financials (continued) | |||||
Banks (continued) | |||||
Equity Bancshares, Inc., Class A (B) | 142,833 | $3,083,764 | |||
Evans Bancorp, Inc. | 69,760 | 1,921,190 | |||
Fifth Third Bancorp | 467,453 | 12,887,679 | |||
First Business Financial Services, Inc. | 60,700 | 1,117,487 | |||
First Community Corp. | 132,912 | 2,258,175 | |||
First Financial Bancorp | 403,431 | 7,072,145 | |||
First Horizon Corp. | 408,111 | 5,207,496 | |||
First Merchants Corp. | 114,010 | 4,265,114 | |||
First Mid Bancshares, Inc. | 68,559 | 2,307,696 | |||
FNB Corp. | 621,243 | 5,901,809 | |||
German American Bancorp, Inc. | 110,169 | 3,645,492 | |||
Glacier Bancorp, Inc. | 82,643 | 3,802,404 | |||
Great Southern Bancorp, Inc. | 40,257 | 1,968,567 | |||
Great Western Bancorp, Inc. | 141,778 | 2,963,160 | |||
Hancock Whitney Corp. | 263,808 | 8,974,748 | |||
HBT Financial, Inc. | 157,193 | 2,381,474 | |||
Heritage Commerce Corp. (A) | 519,533 | 4,608,258 | |||
Heritage Financial Corp. | 161,533 | 3,778,257 | |||
Horizon Bancorp, Inc. | 429,365 | 6,809,729 | |||
Howard Bancorp, Inc. (B) | 156,530 | 1,848,619 | |||
Huntington Bancshares, Inc. | 725,938 | 9,168,597 | |||
Independent Bank Corp. (Massachusetts) | 59,430 | 4,340,767 | |||
Independent Bank Corp. (Michigan) | 142,510 | 2,632,160 | |||
JPMorgan Chase & Co. (A)(C) | 103,071 | 13,097,232 | |||
KeyCorp (A)(C) | 827,532 | 13,579,801 | |||
Level One Bancorp, Inc. | 81,260 | 1,643,890 | |||
Live Oak Bancshares, Inc. (A)(C) | 100,017 | 4,746,807 | |||
M&T Bank Corp. | 103,750 | 13,207,375 | |||
Mackinac Financial Corp. | 144,450 | 1,843,182 | |||
Metrocity Bankshares, Inc. | 65,263 | 941,092 | |||
MidWestOne Financial Group, Inc. (A) | 91,068 | 2,231,166 | |||
NBT Bancorp, Inc. (A) | 81,173 | 2,605,653 | |||
Nicolet Bankshares, Inc. (A)(B) | 49,538 | 3,286,846 | |||
Northrim BanCorp, Inc. (A) | 97,720 | 3,317,594 | |||
Old National Bancorp (A) | 364,040 | 6,028,502 | |||
Old Second Bancorp, Inc. (A) | 318,549 | 3,217,345 | |||
Pacific Premier Bancorp, Inc. (A) | 285,177 | 8,934,595 | |||
PacWest Bancorp (A) | 201,725 | 5,123,815 | |||
Park National Corp. (A)(C) | 30,072 | 3,157,861 | |||
Peoples Bancorp, Inc. (A) | 122,945 | 3,330,580 | |||
Pinnacle Financial Partners, Inc. (A)(C) | 126,415 | 8,141,126 | |||
Popular, Inc. (A) | 49,867 | 2,808,509 | |||
Prime Meridian Holding Company | 108,010 | 1,895,576 |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | 8 |
Shares | Value | ||||
Financials (continued) | |||||
Banks (continued) | |||||
QCR Holdings, Inc. | 70,803 | $2,803,091 | |||
Red River Bancshares, Inc. | 11,564 | 572,996 | |||
Regions Financial Corp. | 703,904 | 11,346,932 | |||
Renasant Corp. | 185,399 | 6,244,238 | |||
SB Financial Group, Inc. | 247,702 | 4,527,993 | |||
Shore Bancshares, Inc. | 183,579 | 2,680,253 | |||
South Atlantic Bancshares, Inc. (B) | 289,568 | 3,547,208 | |||
South State Corp. (A)(C) | 29,868 | 2,159,456 | |||
Southern First Bancshares, Inc. (B) | 131,586 | 4,651,565 | |||
Stock Yards Bancorp, Inc. | 94,346 | 3,819,126 | |||
Synovus Financial Corp. | 230,856 | 7,472,809 | |||
TCF Financial Corp. | 258,153 | 9,556,824 | |||
The Community Financial Corp. | 50,699 | 1,342,510 | |||
The First Bancorp, Inc. | 245,664 | 6,239,866 | |||
The First Bancshares, Inc. | 210,000 | 6,484,800 | |||
The PNC Financial Services Group, Inc. (A)(C) | 88,073 | 13,122,877 | |||
TriCo Bancshares | 204,465 | 7,213,525 | |||
Truist Financial Corp. | 273,410 | 13,104,541 | |||
U.S. Bancorp | 276,266 | 12,871,233 | |||
United BanCorp of Alabama, Inc., Class A | 150,000 | 3,322,500 | |||
United Bankshares, Inc. (A)(C) | 147,123 | 4,766,785 | |||
United Community Banks, Inc. | 86,702 | 2,465,805 | |||
Washington Trust Bancorp, Inc. | 123,905 | 5,550,944 | |||
Zions Bancorp NA | 309,046 | 13,424,958 | |||
Capital markets 8.9% | |||||
Ares Management Corp., Class A | 195,864 | 9,215,401 | |||
Golub Capital BDC, Inc. | 125,102 | 1,768,942 | |||
Invesco, Ltd. (A)(C) | 114,189 | 1,990,314 | |||
KKR & Company, Inc. | 320,324 | 12,969,919 | |||
Oaktree Specialty Lending Corp. | 837,762 | 4,666,334 | |||
Sixth Street Specialty Lending, Inc. (A)(C) | 168,379 | 3,493,864 | |||
StepStone Group, Inc., Class A (B) | 21,087 | 839,263 | |||
The Blackstone Group, Inc., Class A | 197,318 | 12,788,180 | |||
Consumer finance 0.8% | |||||
Discover Financial Services | 45,454 | 4,114,951 | |||
Diversified financial services 1.5% | |||||
Eurazeo SE (B) | 69,866 | 4,747,376 | |||
Onex Corp. (A) | 58,449 | 3,354,768 | |||
Insurance 0.5% | |||||
Assured Guaranty, Ltd. (A)(C) | 82,048 | 2,583,692 | |||
Thrifts and mortgage finance 5.5% | |||||
OP Bancorp (A) | 170,717 | 1,314,521 |
9 | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Financials (continued) | |||||
Thrifts and mortgage finance (continued) | |||||
Premier Financial Corp. | 424,815 | $9,770,745 | |||
Provident Financial Holdings, Inc. (A) | 106,084 | 1,666,580 | |||
Southern Missouri Bancorp, Inc. | 105,980 | 3,226,031 | |||
Territorial Bancorp, Inc. | 39,164 | 941,111 | |||
Timberland Bancorp, Inc. | 13,555 | 328,844 | |||
Westbury Bancorp, Inc. (B) | 88,349 | 2,121,259 | |||
WSFS Financial Corp. | 222,599 | 9,990,243 | |||
Information technology 0.9% | 4,508,392 | ||||
IT services 0.9% | |||||
EVERTEC, Inc. | 114,659 | 4,508,392 | |||
Real estate 1.3% | 6,910,521 | ||||
Equity real estate investment trusts 1.3% | |||||
Park Hotels & Resorts, Inc. (A) | 50,154 | 860,141 | |||
Plymouth Industrial REIT, Inc. | 179,294 | 2,689,410 | |||
Simon Property Group, Inc. (A)(C) | 39,411 | 3,360,970 | |||
Preferred securities 3.7% (3.0% of Total investments) | $19,921,585 | ||||
(Cost $21,218,725) | |||||
Financials 3.3% | 17,970,149 | ||||
Banks 2.8% | |||||
Atlantic Union Bankshares Corp., 6.875% (A)(C) | 57,500 | 1,592,750 | |||
CNB Financial Corp., 7.125% | 60,000 | 1,561,200 | |||
Level One Bancorp, Inc., 7.500% | 50,000 | 1,337,500 | |||
Northpointe Bancshares, Inc. (8.250% to 12-30-25, then SOFR + 7.990%) (F) | 160,000 | 4,000,000 | |||
Pinnacle Financial Partners, Inc., 6.750% (A)(C) | 71,825 | 1,988,834 | |||
Tectonic Financial, Inc. (9.000% to 5-15-24, then 3 month LIBOR + 6.720%) | 186,840 | 1,541,430 | |||
United Community Banks, Inc., 6.875% (A)(C) | 57,500 | 1,590,450 | |||
WesBanco, Inc. (6.750% to 11-15-25, then 5 Year CMT + 6.557%) (A)(C) | 50,000 | 1,402,500 | |||
Mortgage real estate investment trusts 0.5% | |||||
Invesco Mortgage Capital, Inc. (7.750% to 12-27-24, then 3 month LIBOR + 5.180%) | 121,425 | 2,955,485 | |||
Real estate 0.4% | 1,951,436 | ||||
Equity real estate investment trusts 0.4% | |||||
Bluerock Residential Growth REIT, Inc., 8.250% | 15,978 | 401,048 | |||
Sotherly Hotels, Inc., 8.000% | 60,000 | 693,000 | |||
Sotherly Hotels, Inc., 8.250% | 70,625 | 857,388 | |||
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | 10 |
Rate (%) | Maturity date | Par value^ | Value | ||
Convertible bonds 0.7% (0.6% of Total investments) | $3,862,481 | ||||
(Cost $3,390,000) | |||||
Financials 0.7% | 3,862,481 | ||||
Insurance 0.7% | |||||
AXA SA (F) | 7.250 | 05-15-21 | 3,390,000 | 3,862,481 | |
Certificate of deposit 0.0% (0.0% of Total investments) | $80,063 | ||||
(Cost $80,063) | |||||
Country Bank for Savings | 1.140 | 08-29-22 | 2,104 | 2,104 | |
Eastern Savings Bank FSB | 0.200 | 04-22-21 | 1,954 | 1,954 | |
First Bank Richmond NA | 1.250 | 12-05-22 | 21,642 | 21,642 | |
First Federal of Northern Michigan | 0.100 | 01-07-21 | 3,051 | 3,051 | |
First National Bank | 0.400 | 06-17-22 | 1,360 | 1,360 | |
Home National Bank | 1.739 | 11-04-21 | 18,927 | 18,927 | |
Hudson United Bank | 0.800 | 04-23-21 | 2,224 | 2,224 | |
Machias Savings Bank | 0.500 | 05-31-21 | 2,006 | 2,006 | |
Milford Federal Bank | 0.300 | 04-26-21 | 2,057 | 2,057 | |
Mount Washington Co-operative Bank | 0.650 | 11-01-21 | 1,925 | 1,925 | |
Mt. McKinley Bank | 0.500 | 12-02-22 | 1,734 | 1,734 | |
MutualOne Bank | 2.020 | 09-09-21 | 4,097 | 4,097 | |
Newburyport Five Cents Savings Bank | 0.700 | 10-19-22 | 2,152 | 2,152 | |
Newtown Savings Bank | 0.450 | 06-01-21 | 1,982 | 1,982 | |
Rosedale Federal Savings & Loan Association | 0.500 | 06-01-21 | 2,040 | 2,040 | |
Salem Five Bancorp | 0.250 | 12-17-21 | 1,743 | 1,743 | |
Sunshine Federal Savings and Loan Association | 0.500 | 05-10-21 | 2,066 | 2,066 | |
The Milford Bank | 0.250 | 06-10-21 | 1,923 | 1,923 | |
U.S. Bancorp | 0.600 | 04-05-21 | 5,076 | 5,076 |
Par value^ | Value | ||||
Short-term investments 1.6% (1.3% of Total investments) | $8,508,000 | ||||
(Cost $8,508,000) | |||||
Repurchase agreement 1.6% | 8,508,000 | ||||
Repurchase Agreement with State Street Corp. dated 12-31-20 at 0.000% to be repurchased at $8,508,000 on 1-4-21, collateralized by $8,688,300 U.S. Treasury Bills, 0.000% due 12-30-21 (valued at $8,678,196) | 8,508,000 | 8,508,000 |
Total investments (Cost $455,411,226) 122.6% | $655,641,813 | ||||
Other assets and liabilities, net (22.6%) | (120,906,469) | ||||
Total net assets 100.0% | $534,735,344 |
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund unless otherwise indicated. | |
^All par values are denominated in U.S. dollars unless otherwise indicated. |
11 | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | 12 |
Interest rate swaps | ||||||||||
Counterparty (OTC)/
Centrally cleared |
Notional
amount |
Currency |
Payments
made |
Payments
received |
Fixed
payment frequency |
Floating
payment frequency |
Maturity
date |
Unamortized
upfront payment paid (received) |
Unrealized
appreciation (depreciation) |
Value |
Centrally cleared | 5,000,000 | USD | Fixed 1.790% | USD 3 month LIBOR BBA(a) | Semi-Annual | Quarterly | Aug 2022 | — | $(161,688) | $(161,688) |
Centrally cleared | 15,000,000 | USD | Fixed 1.220% | USD 3 month LIBOR BBA(a) | Semi-Annual | Quarterly | Mar 2030 | — | (537,825) | (537,825) |
Centrally cleared | 25,000,000 | USD | Fixed 1.136% | USD 3 month LIBOR BBA(a) | Semi-Annual | Quarterly | Mar 2030 | — | (699,709) | (699,709) |
Centrally cleared | 25,000,000 | USD | Fixed 1.077% | USD 3 month LIBOR BBA(a) | Semi-Annual | Quarterly | Mar 2030 | — | (560,161) | (560,161) |
— | $(1,959,383) | $(1,959,383) |
(a) | At 12-31-20, the 3 month LIBOR was 0.238%. |
Derivatives Currency Abbreviations | |
USD | U.S. Dollar |
Derivatives Abbreviations | |
BBA | The British Banker's Association |
LIBOR | London Interbank Offered Rate |
OTC | Over-the-counter |
13 | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Assets | |
Unaffiliated investments, at value (Cost $455,411,226) | $655,641,813 |
Receivable for centrally cleared swaps | 3,042,220 |
Cash | 624,638 |
Dividends and interest receivable | 1,310,778 |
Receivable from affiliates | 82,597 |
Other assets | 10,525 |
Total assets | 660,712,571 |
Liabilities | |
Liquidity agreement | 125,000,000 |
Payable for investments purchased | 672,027 |
Interest payable | 80,636 |
Payable to affiliates | |
Administrative services fees | 137,662 |
Trustees' fees | 162 |
Other liabilities and accrued expenses | 86,740 |
Total liabilities | 125,977,227 |
Net assets | $534,735,344 |
Net assets consist of | |
Paid-in capital | $334,892,865 |
Total distributable earnings (loss) | 199,842,479 |
Net assets | $534,735,344 |
Net asset value per share | |
Based on 18,772,598 shares of beneficial interest outstanding - unlimited number of shares authorized with no par value | $28.48 |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK Financial Opportunities Fund | 14 |
Investment income | |
Dividends | $19,967,564 |
Interest | 327,095 |
Less foreign taxes withheld | (3,453) |
Total investment income | 20,291,206 |
Expenses | |
Investment management fees | 6,491,591 |
Interest expense | 1,420,023 |
Administrative services fees | 1,439,472 |
Transfer agent fees | 37,178 |
Trustees' fees | 41,432 |
Custodian fees | 62,459 |
Printing and postage | 162,369 |
Professional fees | 98,308 |
Stock exchange listing fees | 23,750 |
Other | 166,061 |
Total expenses | 9,942,643 |
Less expense reductions | (905,078) |
Net expenses | 9,037,565 |
Net investment income | 11,253,641 |
Realized and unrealized gain (loss) | |
Net realized gain (loss) on | |
Unaffiliated investments and foreign currency transactions | 29,032,405 |
Swap contracts | (132,829) |
28,899,576 | |
Change in net unrealized appreciation (depreciation) of | |
Unaffiliated investments and translation of assets and liabilities in foreign currencies | (144,240,146) |
Swap contracts | (1,934,616) |
(146,174,762) | |
Net realized and unrealized loss | (117,275,186) |
Decrease in net assets from operations | $(106,021,545) |
15 | JOHN HANCOCK Financial Opportunities Fund | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Year ended
12-31-20 |
Year ended
12-31-19 |
|
Increase (decrease) in net assets | ||
From operations | ||
Net investment income | $11,253,641 | $9,428,160 |
Net realized gain | 28,899,576 | 32,879,416 |
Change in net unrealized appreciation (depreciation) | (146,174,762) | 135,538,454 |
Increase (decrease) in net assets resulting from operations | (106,021,545) | 177,846,030 |
Distributions to shareholders | ||
From earnings | (41,170,080) | (41,109,769) |
Total distributions | (41,170,080) | (41,109,769) |
Fund share transactions | ||
Issued pursuant to Dividend Reinvestment Plan | 1,872,121 | 665,138 |
Total increase (decrease) | (145,319,504) | 137,401,399 |
Net assets | ||
Beginning of year | 680,054,848 | 542,653,449 |
End of year | $534,735,344 | $680,054,848 |
Share activity | ||
Shares outstanding | ||
Beginning of year | 18,691,524 | 18,670,462 |
Issued pursuant to Dividend Reinvestment Plan | 81,074 | 21,062 |
End of year | 18,772,598 | 18,691,524 |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK Financial Opportunities Fund | 16 |
Cash flows from operating activities | |
Net decrease in net assets from operations | $(106,021,545) |
Adjustments to reconcile net decrease in net assets from operations to net cash provided by operating activities: | |
Long-term investments purchased | (56,367,582) |
Long-term investments sold | 95,605,325 |
Net purchases and sales in short-term investments | (7,206,928) |
Net amortization of premium (discount) | 37,548 |
(Increase) Decrease in assets: | |
Receivable for centrally cleared swaps | (2,984,777) |
Dividends and interest receivable | 185,139 |
Receivable from affiliates | 19,017 |
Other assets | (28) |
Increase (Decrease) in liabilities: | |
Payable for investments purchased | 672,027 |
Interest payable | (172,679) |
Payable to affiliates | (31,903) |
Other liabilities and accrued expenses | 15,348 |
Net change in unrealized (appreciation) depreciation on: | |
Investments | 144,240,862 |
Net realized (gain) loss on: | |
Investments | (29,032,159) |
Proceeds received as return of capital | 964,351 |
Net cash provided by operating activities | $39,922,016 |
Cash flows provided by (used in) financing activities | |
Distributions to shareholders | $(39,297,959) |
Net cash used in financing activities | $(39,297,959) |
Net increase in cash | $624,057 |
Cash at beginning of year | $581 |
Cash at end of year | $624,638 |
Supplemental disclosure of cash flow information: | |
Cash paid for interest | $(1,592,702) |
Noncash financing activities not included herein consists of reinvestment distributions | $1,872,121 |
17 | JOHN HANCOCK Financial Opportunities Fund | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Period ended | 12-31-20 | 12-31-19 | 12-31-18 | 12-31-17 | 12-31-16 |
Per share operating performance | |||||
Net asset value, beginning of period | $36.38 | $29.06 | $36.94 | $34.98 | $26.17 |
Net investment income1 | 0.60 | 0.50 | 0.39 | 0.37 | 0.50 |
Net realized and unrealized gain (loss) on investments | (6.30) | 9.02 | (6.61) | 3.07 | 9.79 |
Total from investment operations | (5.70) | 9.52 | (6.22) | 3.44 | 10.29 |
Less distributions | |||||
From net investment income | (0.65) | (0.48) | (0.40) | (0.42) | (0.40) |
From net realized gain | (1.55) | (1.72) | (1.26) | (1.06) | (1.08) |
Total distributions | (2.20) | (2.20) | (1.66) | (1.48) | (1.48) |
Anti-dilutive impact of repurchase plan | — | — | — | — | —2,3 |
Net asset value, end of period | $28.48 | $36.38 | $29.06 | $36.94 | $34.98 |
Per share market value, end of period | $30.35 | $36.30 | $27.93 | $39.33 | $36.27 |
Total return at net asset value (%)4,5 | (13.38) | 33.71 | (17.42) | 10.08 | 41.10 |
Total return at market value (%)4 | (7.49) | 38.81 | (25.46) | 13.03 | 36.60 |
Ratios and supplemental data | |||||
Net assets, end of period (in millions) | $535 | $680 | $543 | $689 | $651 |
Ratios (as a percentage of average net assets): | |||||
Expenses before reductions | 2.21 | 2.27 | 2.04 | 1.93 | 2.02 |
Expenses including reductions6 | 2.01 | 2.08 | 1.86 | 1.75 | 1.82 |
Net investment income | 2.50 | 1.52 | 1.04 | 1.07 | 1.88 |
Portfolio turnover (%) | 10 | 13 | 11 | 5 | 11 |
Senior securities | |||||
Total debt outstanding end of period (in millions) | $125 | $125 | $120 | $110 | $110 |
Asset coverage per $1,000 of debt7 | $5,278 | $6,440 | $5,522 | $7,265 | $6,922 |
1 | Based on average daily shares outstanding. |
2 | Less than $0.005 per share. |
3 | The repurchase plan was completed at an average repurchase price of $20.79 for 10,000 shares for the period ended 12-31-16. |
4 | Total return based on net asset value reflects changes in the fund’s net asset value during each period. Total return based on market value reflects changes in market value. Each figure assumes that distributions from income, capital gains and tax return of capital, if any, were reinvested. |
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
6 | Expenses including reductions excluding interest expense were 1.69%, 1.50%, 1.44%, 1.45% and 1.58% for the periods ended 12-31-20, 12-31-19, 12-31-18, 12-31-17 and 12-31-16, respectively. |
7 | Asset coverage equals the total net assets plus borrowings divided by the borrowings of the fund outstanding at period end (Note 8). As debt outstanding changes, the level of invested assets may change accordingly. Asset coverage ratio provides a measure of leverage. |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK Financial Opportunities Fund | 18 |
19 | JOHN HANCOCK Financial Opportunities Fund | ANNUAL REPORT |
Total
value at 12-31-20 |
Level 1
quoted price |
Level 2
significant observable inputs |
Level 3
significant unobservable inputs |
|
Investments in securities: | ||||
Assets | ||||
Common stocks | ||||
Financials | ||||
Banks | $519,958,433 | $512,303,513 | $4,094,201 | $3,560,719 |
Capital markets | 47,732,217 | 47,732,217 | — | — |
Consumer finance | 4,114,951 | 4,114,951 | — | — |
Diversified financial services | 8,102,144 | 3,354,768 | 4,747,376 | — |
Insurance | 2,583,692 | 2,583,692 | — | — |
Thrifts and mortgage finance | 29,359,334 | 29,359,334 | — | — |
Information technology | ||||
IT services | 4,508,392 | 4,508,392 | — | — |
Real estate | ||||
Equity real estate investment trusts | 6,910,521 | 6,910,521 | — | — |
Preferred securities | ||||
Financials | ||||
Banks | 15,014,664 | 11,014,664 | 4,000,000 | — |
Mortgage real estate investment trusts | 2,955,485 | 2,955,485 | — | — |
Real estate | ||||
Equity real estate investment trusts | 1,951,436 | 1,951,436 | — | — |
Convertible bonds | 3,862,481 | — | 3,862,481 | — |
Certificate of deposit | 80,063 | — | 80,063 | — |
Short-term investments | 8,508,000 | — | 8,508,000 | — |
Total investments in securities | $655,641,813 | $626,788,973 | $25,292,121 | $3,560,719 |
Derivatives: | ||||
Liabilities | ||||
Swap contracts | $(1,959,383) | — | $(1,959,383) | — |
ANNUAL REPORT | JOHN HANCOCK Financial Opportunities Fund | 20 |
21 | JOHN HANCOCK Financial Opportunities Fund | ANNUAL REPORT |
December 31, 2020 | December 31, 2019 | |
Ordinary income | $12,092,108 | $8,905,318 |
Long-term capital gains | 29,077,972 | 32,204,451 |
Total | $41,170,080 | $41,109,769 |
ANNUAL REPORT | JOHN HANCOCK Financial Opportunities Fund | 22 |
23 | JOHN HANCOCK Financial Opportunities Fund | ANNUAL REPORT |
1 | Reflects cumulative value of swap contracts. Receivable/payable for centrally cleared swaps, which includes value and margin, are shown separately on the Statement of assets and liabilities. |
Statement of operations location - Net realized gain (loss) on: | |
Risk | Swap contracts |
Interest rate | $(132,829) |
Statement of operations location - Change in net unrealized appreciation (depreciation) of: | |
Risk | Swap contracts |
Interest rate | $(1,934,616) |
ANNUAL REPORT | JOHN HANCOCK Financial Opportunities Fund | 24 |
25 | JOHN HANCOCK Financial Opportunities Fund | ANNUAL REPORT |
• | the likelihood of greater volatility of NAV and market price of shares; |
• | fluctuations in the interest rate paid for the use of the LA; |
• | increased operating costs, which may reduce the fund’s total return; |
• | the potential for a decline in the value of an investment acquired through leverage, while the fund’s obligations under such leverage remains fixed; and |
• | the fund is more likely to have to sell securities in a volatile market in order to meet asset coverage or other debt compliance requirements. |
ANNUAL REPORT | JOHN HANCOCK Financial Opportunities Fund | 26 |
27 | JOHN HANCOCK Financial Opportunities Fund | ANNUAL REPORT |
Issuer,
Description |
Original
acquisition date |
Acquisition
cost |
Beginning
share amount |
Shares
purchased |
Shares
sold |
Ending
share amount |
Value as a
percentage of net assets |
Ending
value |
Bremer Financial Corp. | 10-25-19 | $5,000,040 | 41,667 | — | — | 41,667 | 0.7% | $3,560,719 |
Centric Financial Corp. | 5-22-18 | 2,543,750 | 275,000 | — | — | 275,000 | 0.4% | 2,198,625 |
$5,759,344 |
ANNUAL REPORT | JOHN HANCOCK Financial Opportunities Fund | 28 |
29 | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | ANNUAL REPORT |
ANNUAL REPORT | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | 30 |
Payment Date | Income Distributions |
March 31, 2020 | $0.5500 |
June 30, 2020 | 0.5500 |
September 30, 2020 | 0.5500 |
December 31, 2020 | 0.5500 |
Total | $2.2000 |
31 | | |
| | 32 |
33 | | |
ANNUAL REPORT | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | 34 |
Independent Trustees (continued) | ||
Name, year of birth
Position(s) held with fund Principal occupation(s) and other directorships during past 5 years |
Trustee
of the Trust since1 |
Number of John
Hancock funds overseen by Trustee |
Deborah C. Jackson, Born: 1952 | 2008 | 196 |
Trustee | ||
President, Cambridge College, Cambridge, Massachusetts (since 2011); 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); Board of Directors, Association of Independent Colleges and Universities of Massachusetts (2014-2017); 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 American Student Assistance Corporation (1996–2009); 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). | ||
James M. Oates,2 Born: 1946 | 2012 | 196 |
Trustee | ||
Managing Director, Wydown Group (financial consulting firm) (since 1994); Chairman and Director, Emerson Investment Management, Inc. (2000-2015); Independent Chairman, Hudson Castle Group, Inc. (formerly IBEX Capital Markets, Inc.) (financial services company) (1997–2011); Director, Stifel Financial (since 1996); Director, Investor Financial Services Corporation (1995–2007); Director, Connecticut River Bancorp (1998-2014); Director/Trustee, Virtus Funds (since 1988). Trustee (since 2004) and Chairperson of the Board (2005-2016) of various trusts within the John Hancock Fund Complex. | ||
Steven R. Pruchansky, Born: 1944 | 1994 | 196 |
Trustee and Vice Chairperson of the Board | ||
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. | ||
Frances G. Rathke,2,* Born: 1960 | 2020 | 196 |
Trustee | ||
Director, Northern New England Energy Corporation (since 2017); 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, Audit Committee Chair and Compensation Committee Member, Planet Fitness (since 2016); Director, Citizen Cider, Inc. (high-end hard cider and hard seltzer company) (since 2016); Chief Financial Officer and Treasurer, Keurig Green Mountain, Inc. (2003-retired 2015); Independent Financial Consultant, Frances Rathke Consulting (strategic and financial consulting services) (2001-2003); Chief Financial Officer and Secretary, Ben & Jerry’s Homemade, Inc. (1989-2000, including prior positions); Senior Manager, Coopers & Lybrand, LLC (independent public accounting firm) (1982-1989). Trustee of various trusts within the John Hancock Fund Complex (since 2020). |
35 | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | ANNUAL REPORT |
Independent Trustees (continued) | ||
Name, year of birth
Position(s) held with fund Principal occupation(s) and other directorships during past 5 years |
Trustee
of the Trust since1 |
Number of John
Hancock funds overseen by Trustee |
Gregory A. Russo, Born: 1949 | 2008 | 196 |
Trustee | ||
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); Vice Chairman, Risk & Regulatory Matters, KPMG LLP (KPMG) (2002–2006); Vice Chairman, Industrial Markets, KPMG (1998–2002); Chairman and Treasurer,Westchester County, New York, Chamber of Commerce (1986–1992); Director, Treasurer, and Chairman of Audit and Finance Committees, Putnam Hospital Center (1989–1995); Director and Chairman of Fundraising Campaign, United Way of Westchester and Putnam Counties, New York (1990–1995). Trustee of various trusts within the John Hancock Fund Complex (since 2008). |
ANNUAL REPORT | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | 36 |
Principal officers who are not Trustees (continued) | |
Name, year of birth
Position(s) held with fund Principal occupation(s) during past 5 years |
Officer
of the Trust since |
Salvatore Schiavone, Born: 1965 | 2010 |
Treasurer | |
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, Born: 1973 | 2018 |
Secretary and Chief Legal Officer | |
Vice President and Deputy Chief Counsel, John Hancock Investment Management (since 2015); Assistant Vice President and Senior Counsel (2009–2015), John Hancock Investment Management; Chief Legal Officer and Secretary of various trusts within the John Hancock Fund Complex (since 2018); Assistant Secretary of John Hancock Investment Management LLC and John Hancock Variable Trust Advisers LLC (since 2009). | |
Trevor Swanberg, Born: 1979 | 2020 |
Chief Compliance Officer | |
Chief Compliance Officer, various trusts within the John Hancock Fund Complex, John Hancock Investment Management LLC, and John Hancock Variable Trust Advisers LLC (since 2020); Deputy Chief Compliance Officer, various trusts within the John Hancock Fund Complex (2018–2020); Deputy Chief Compliance Officer, John Hancock Investment Management LLC and John Hancock Variable Trust Advisers LLC (2019–2020); Assistant Chief Compliance Officer, various trusts within the John Hancock Fund Complex (2016–2018); 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). |
1 | Mr. Bardelis, Mr. Burgess, Ms. Harrison and Ms. Rathke serve as Trustees for a term expiring in 2021; Mr. Arnott, Ms. Jackson, Mr. Oates and Mr. Pruchansky serve as Trustees for a term expiring in 2022; Mr. Boyle, Mr. Cunningham, Ms. Fey, Mr. McClellan and Mr. Russo serve as Trustees for a term expiring in 2023; Mr. Boyle has served as Trustee at various times prior to date listed in the table. |
2 | Member of the Audit Committee. |
3 | The Trustee is a Non-Independent Trustee due to current or former positions with the Advisor and certain of its affiliates. |
* | Appointed as Independent Trustee effective as of September 15, 2020. |
37 | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | ANNUAL REPORT |
ANNUAL REPORT | JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND | 38 |
MF1469856 | P9A 12/20 |
ITEM 2. CODE OF ETHICS.
As of the end of the period, December 31, 2020, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief Executive Officer, Chief Financial Officer and Treasurer (respectively, the principal executive officer, the principal financial officer and the principal accounting officer, the "Senior Financial Officers"). A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Peter S. Burgess is the audit committee financial expert and is "independent", pursuant to general instructions on Form N-CSR Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The aggregate fees billed for professional services rendered by the principal accountant(s) for the audit of the registrant's annual financial statements or services that are normally provided by the accountant(s) in connection with statutory and regulatory filings or engagements amounted to $43,115 for the fiscal period ended December 31, 2020, $34,737 for the fiscal year ended December 31, 2019.
(b) Audit-Related Services
Audit-related fees during the fiscal periods ended December 31, 2020 and December 31, 2019 amounted to $5 and $5, respectively, billed to the registrant or to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant ("control affiliates").
(c) Tax Fees
The aggregate fees billed for professional services rendered by the principal accountant(s) for the tax compliance, tax advice and tax planning ("tax fees") amounted to $3,837 for the fiscal periods ended December 31, 2020 and 2019. The nature of the services comprising the tax fees was the review of the registrant's tax returns and tax distribution requirements.
(d) All Other Fees
Other fees amounted to $89 for the fiscal period ended December 31, 2020, and $84 for the fiscal year ended December 31, 2019, billed to the registrant or to the control affiliates for products and services provided by the principal accountant. The nature of the services comprising the all other fees consisted mainly of review of foreign tax withholding rates.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The trust's Audit Committee must pre-approve all audit and non-audit services provided by the independent registered public accounting firm (the "Auditor") relating to the operations or financial reporting of the funds. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The trust's Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee's consideration of audit-related and non-audit services by the Auditor. The policies and procedures require that any audit-related and non-audit service provided by the Auditor and any non-audit service provided by the Auditor to a fund service provider that relates directly to the operations and financial reporting of a fund are subject to approval by the Audit Committee before such service is provided. Audit-related services provided by the Auditor that are expected to exceed $25,000 per instance/per fund are subject to specific
pre-approval by the Audit Committee. Tax services provided by the Auditor that are expected to exceed $30,000 per instance/per fund are subject to specific pre-approval by the Audit Committee.
All audit services, as well as the audit-related and non-audit services that are expected to exceed the amounts stated above, must be approved in advance of provision of the service by formal resolution of the Audit Committee. At the regularly scheduled Audit Committee meetings, the Committee reviews a report summarizing the services, including fees, provided by the Auditor.
(e)(2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
Audit-Related Fees, Tax Fees and All Other Fees:
There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.
(f)According to the registrant's principal accountant, for the fiscal year ended December 31, 2020, the percentage of hours spent on the audit of the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons who were not full-time, permanent employees of principal accountant was less than 50%.
(g)The aggregate non-audit fees billed by the registrant's accountant(s) for services rendered to the registrant and rendered to the registrant's control affiliates for each of the last two fiscal years of the registrant were $1,433,589 for the fiscal period ended December 31, 2020 and $1,057,490 for the fiscal year ended December 31, 2019.
(h)The audit committee of the registrant has considered the non-audit services provided by the registrant's principal accountant(s) to the control affiliates and has determined that the services that were not pre-approved are compatible with maintaining the principal accountant(s)' independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately-designated standing audit committee comprised of independent trustees. The members of the audit committee are as follows:
Peter S. Burgess - Chairman
Charles L. Bardelis
James M. Oates
Frances G. Rathke
ITEM 6. SCHEDULE OF INVESTMENTS.
(a)Not applicable.
(b)Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED- END MANAGEMENT INVESTMENT COMPANIES.
See attached exhibit "Proxy Voting Policies and Procedures".
ITEM 8.
PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Information about the Manulife Investment Management (US) LLC ("Manulife IM (US)") portfolio managers Below is a list of the Manulife Investment Management (US) LLC "Manulife IM (US)" portfolio managers who share joint responsibility for the day-to-day investment management of the Fund subject to oversight
by John Hancock Investment Management LLC (the "Adviser"). It provides a brief summary of their business careers over the past five years. Information is provided as of December 31, 2020.
Susan A. Curry
Managing Director and Portfolio Manager
Manulife Investment Management (US) LLC since 2006
Managed the Fund since 2004
Began business career in 1993
Ryan P. Lentell, CFA
Managing Director and Portfolio Manager
Manulife Investment Management (US) LLC since 2008
Managed the Fund since 2008
Began business career in 1999
Other Accounts the Portfolio Managers are Managing
The table below indicates, for each portfolio manager, information about the accounts over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of December 31, 2020. For purposes of the table, "Other Pooled Investment Vehicles" may include investment partnerships and group trusts, and "Other Accounts" may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts.
Accounts within the total accounts that are subject to a performance-based advisory fee: None.
Conflicts of Interest. When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. The principal types of potential conflicts of interest that may arise are discussed below. For the reasons outlined below, the Fund does not believe that any material conflicts are likely to arise out of a portfolio manager's responsibility for the management of the Fund as well as one or more other accounts. The Advisor and Subadvisor have adopted procedures that are intended to monitor compliance with the policies referred to in the following paragraphs. Generally, the risks of such conflicts of interests are increased to the extent that a portfolio manager has a financial incentive to favor one account over another. The Advisor and Subadvisor have structured their compensation arrangements in a manner that is intended to limit such potential for conflicts of interests. See "Compensation of Portfolio Managers" below.
•A portfolio manager could favor one account over another in allocating new investment opportunities that have limited supply, such as initial public offerings and private placements. If, for example, an initial public offering that was expected to appreciate in value significantly shortly after the offering was allocated to a single account, that account may be expected to have better investment performance than other accounts that did not receive an allocation on the initial public offering. The Subadvisor has policies that require a portfolio manager to allocate such investment
opportunities in an equitable manner and generally to allocate such investments proportionately among all accounts with similar investment objectives.
•A portfolio manager could favor one account over another in the order in which trades for the accounts are placed. If a portfolio manager determines to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more favorable price than accounts that made subsequent transactions. The less liquid the market for the security or the greater the percentage that the proposed aggregate purchases or sales represent of average daily trading volume, the greater the potential for accounts that make subsequent purchases or sales to receive a less favorable price. When a portfolio manager intends to trade the same security for more than one account, the policies of the Subadvisor generally require that such trades be "bunched," which means that the trades for the individual accounts are aggregated and each account receives the same price. There are some types of accounts as to which bunching may not be possible for contractual reasons (such as directed brokerage arrangements). Circumstances may also arise where the trader believes that bunching the orders may not result in the best possible price. Where those accounts or circumstances are involved, the Subadvisor will place the order in a manner intended to result in as favorable a price as possible for such client.
•A portfolio manager could favor an account if the portfolio manager's compensation is tied to the performance of that account rather than all accounts managed by the portfolio manager. If, for example, the portfolio manager receives a bonus based upon the performance of certain accounts relative to a benchmark while other accounts are disregarded for this purpose, the portfolio manager will have a financial incentive to seek to have the accounts that determine the portfolio manager's bonus achieve the best possible performance to the possible detriment of other accounts. Similarly, if the Subadvisor receives a performance-based advisory fee, the portfolio manager may favor that account, whether or not the performance of that account directly determines the portfolio manager's compensation. The investment performance on specific accounts is not a factor in determining the portfolio manager's compensation. See "Compensation of Portfolio Managers" below. Neither the Advisor nor the Subadvisor receives a performance- based fee with respect to any of the accounts managed by the portfolio managers.
•A portfolio manager could favor an account if the portfolio manager has a beneficial interest in the account, in order to benefit a large client or to compensate a client that had poor returns. For example, if the portfolio manager held an interest in an investment partnership that was one of the accounts managed by the portfolio manager, the portfolio manager would have an economic incentive to favor the account in which the portfolio manager held an interest. The Subadvisor imposes certain trading restrictions and reporting requirements for accounts in which a portfolio manager or certain family members have a personal interest in order to confirm that such accounts are not favored over other accounts.
•If the different accounts have materially and potentially conflicting investment objectives or strategies, a conflict of interest may arise. For example, if a portfolio manager purchases a security for one account and sells the same security short for another account, such trading pattern could disadvantage either the account that is long or short. In making portfolio manager assignments, the Subadvisor seeks to avoid such potentially conflicting situations. However, where a portfolio manager is responsible for accounts with differing investment objectives and policies, it is possible that the portfolio manager will conclude that it is in the best interest of one account to sell a portfolio security while another account continues to hold or increase the holding in such security.
Compensation of Portfolio Managers. The Subadvisor has adopted a system of compensation for portfolio managers and others involved in the investment process that is applied systematically among investment professionals. At the Subadvisor, the structure of compensation of investment professionals is currently
composed of the following basic components: base salary and short-and long-term incentives. The following describes each component of the compensation package for the individuals identified as a portfolio manager for the Funds.
•Base salary. Base compensation is fixed and normally reevaluated on an annual basis. The Subadvisor seeks to set compensation at market rates, taking into account the experience and responsibilities of the investment professional.
•Incentives. Only investment professionals are eligible to participate in the short-and long-term incentive plan. Under the plan, investment professionals are eligible for an annual cash award. The plan is intended to provide a competitive level of annual bonus compensation that is tied to the investment professional achieving superior investment performance and aligns the financial incentives of the Subadvisor and the investment professional. Any bonus under the plan is completely discretionary, with a maximum annual bonus that may be well in excess of base salary. Payout of a portion of this bonus may be deferred for up to five years. While the amount of any bonus is discretionary, the following factors are generally used in determining bonuses under the plan:
•Investment Performance: The investment performance of all accounts managed by the investment professional over one, three and five-year periods are considered. With respect to fixed income accounts, relative yields are also used to measure performance. The pre-tax performance of each account is measured relative to an appropriate benchmark and universe as identified in the table below.
•Financial Performance: The profitability of the Subadvisor and its parent company are also considered in determining bonus awards.
•In addition to the above, compensation may also include a revenue component for an investment team derived from a number of factors including, but not limited to client assets under management, investment performance, and firm metrics.
•Manulife Equity Awards. A limited number of senior investment professionals may receive options to purchase shares of Manulife Financial stock. Generally, such option would permit the investment professional to purchase a set amount of stock at the market price on the date of grant. The option can be exercised for a set period (normally a number of years or until termination of employment) and the investment professional would exercise the option if the market value of Manulife Financial stock increases. Some investment professionals may receive restricted stock grants, where the investment professional is entitled to receive the stock at no or nominal cost, provided that the stock is forgone if the investment professional's employment is terminated prior to a vesting date.
•Deferred Incentives. Investment professionals may receive deferred incentives which are fully invested in strategies managed by the team/individuals as well as other Manulife Asset Management strategies.
The Subadvisor also permits investment professionals to participate on a voluntary basis in a deferred compensation plan, under which the investment professional may elect on an annual basis to defer receipt of a portion of their compensation until retirement. Participation in the plan is voluntary.
Share Ownership by Portfolio Managers. The following table indicates as of as of December 31, 2020, the value of shares beneficially owned by the portfolio managers in the Fund.
|
Range of Beneficial |
Portfolio Manager |
Ownership |
Susan A. Curry |
$10,001-$50,000 |
Ryan P. Lentell, CFA |
$100,001-$500,000 |
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS
(a)Not applicable.
REGISTRANT PURCHASES OF EQUITY SECURITIES
|
|
|
Total Number |
Maximum |
|
|
|
of |
Number |
|
|
|
Shares |
of Shares |
|
|
|
Purchased |
that May |
|
Total |
Average |
as Part of |
Yet Be |
|
Number of |
Price |
Publicly |
Purchased |
|
Shares |
|
Announced |
Under the |
Period |
Purchased |
per Share |
Plans* |
Plans |
Jan-20 |
- |
- |
- |
1,869,152 |
Feb-20 |
- |
- |
- |
1,869,152 |
Mar-20 |
- |
- |
- |
1,869,152 |
Apr-20 |
- |
- |
- |
1,869,152 |
May-20 |
- |
- |
- |
1,869,152 |
Jun-20 |
- |
- |
- |
1,869,152 |
Jul-20 |
- |
- |
- |
1,869,152 |
Aug-20 |
- |
- |
- |
1,869,152 |
Sep-20 |
- |
- |
- |
1,869,152 |
Oct-20 |
- |
- |
- |
1,869,152 |
Nov-20 |
- |
- |
- |
1,869,152 |
Dec-20 |
- |
- |
- |
1,877,260 |
Total |
- |
- |
|
|
*In May 2009, the Board of Trustees approved a share repurchase plan, which was subsequently reviewed by the Board of Trustees each year in December. Under the current share repurchase plan, the Fund may purchase in the open market up to 10% of its outstanding common shares as of December 31, 2020. The current plan is in effect between January 1, 2021 and December 31, 2021.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a)The registrant has adopted procedures by which shareholders may recommend nominees to the registrant's Board of Trustees. A copy of the procedures is filed as an exhibit to this Form N-CSR. See attached "John Hancock Funds – Nominating and Governance Committee Charter".
ITEM 11. CONTROLS AND PROCEDURES.
(a)Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b)There were no changes in the registrant's internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The Fund did not participate directly in securities lending activities. See Note 8 to financial statements in Item 1.
ITEM 13. EXHIBITS.
(a)(1) Code of Ethics for Senior Financial Officers is attached.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
John Hancock Financial Opportunities Fund
By: |
/s/ Andrew Arnott |
|
------------------------------ |
|
Andrew Arnott |
|
President |
Date: |
February 11, 2021 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: |
/s/ Andrew Arnott |
|
------------------------------- |
|
Andrew Arnott |
|
President |
Date: |
February 11, 2021 |
By: |
/s/ Charles A. Rizzo |
|
-------------------------------- |
|
Charles A. Rizzo |
|
Chief Financial Officer |
Date: |
February 11, 2021 |
John Hancock Code of Ethics
January 1, 2008
(Revised September 17, 2020)
This is the Code of Ethics for the following:
John Hancock Investment Management, LLC and John Hancock Variable Trust Advisers, LLC, LLC (each, a "John Hancock Adviser")
and
John Hancock Investment Management
Distributors, LLC
John Hancock Distributors, LLC,
each open-end fund, closed-end fund, and exchange traded
fund advised by a John Hancock Adviser
(the "John Hancock Affiliated Funds"),
(together, called "John Hancock")
Table of Contents
Introduction........................................................................................................................................... |
4 |
Standards of Business Conduct ............................................................................................................ |
5 |
Applicability and Scope......................................................................................................................... |
5 |
Access Levels ......................................................................................................................................... |
6 |
Access Level 1 ............................................................................................................................... |
6 |
Access Level 2 ............................................................................................................................... |
6 |
Access Level 3 ............................................................................................................................... |
7 |
Overview of Rules for All Access Persons ........................................................................................... |
7 |
Brokerage Account Disclosure ......................................................................................................... |
7 |
Brokerage Account Examples (non-exclusive list) .................................................................... |
7 |
Employee Compensation Instruments (non-exclusive list)...................................................... |
8 |
College Savings Plans - 529s........................................................................................................ |
8 |
401(k) and John Hancock Variable Products: John Hancock Affiliated Funds Reporting ...... |
9 |
Managed Accounts........................................................................................................................ |
9 |
Preferred Brokerage Account Requirements............................................................................. |
9 |
Opening/Closing Accounts ........................................................................................................ |
10 |
Statements and Duplicate Confirmations of Trades ................................................................ |
10 |
Personal Trading ................................................................................................................................. |
10 |
Personal Trading Restrictions for all Access Persons .................................................................. |
11 |
Reporting and Pre-clearance..................................................................................................... |
11 |
Level 1 Access Persons: Additional Personal Trading Restrictions and Disclosures ........... |
12 |
Level 2 Access Persons: Additional Personal Trading Restrictions and Disclosures ........... |
15 |
Level 3 Access Persons: Additional Personal Trading Restrictions and Disclosures ........... |
17 |
Pre-clearance Process ................................................................................................................ |
17 |
Reporting and Certification Requirements ....................................................................................... |
18 |
Reporting ......................................................................................................................................... |
18 |
Reporting Upon Designation ..................................................................................................... |
18 |
Quarterly Reporting ................................................................................................................... |
18 |
Annual Reporting ....................................................................................................................... |
19 |
Ad Hoc Reporting ....................................................................................................................... |
19 |
2 |
|
Administration and Enforcement ...................................................................................................... |
20 |
Administration of the Code............................................................................................................. |
20 |
Subadviser Compliance................................................................................................................... |
20 |
Adoption and Approval.............................................................................................................. |
20 |
Subadviser Reporting & Recordkeeping Requirements.......................................................... |
21 |
Reporting to the Board .............................................................................................................. |
21 |
Reporting Violations ....................................................................................................................... |
21 |
Exemptions & Appeals .................................................................................................................... |
22 |
Exemptions: ................................................................................................................................. |
22 |
Appeals......................................................................................................................................... |
22 |
Interpretation and Enforcement.................................................................................................... |
22 |
Education of Employees.................................................................................................................. |
23 |
Recordkeeping................................................................................................................................. |
23 |
Other Important Policies ................................................................................................................ |
24 |
MFC Code of Business Conduct & Ethics (All Covered Employees) ....................................... |
24 |
John Hancock Conflicts of Interest Policy (All Covered Employees)..................................... |
24 |
John Hancock Gift & Entertainment Policy (All Covered Employees) .................................... |
25 |
John Hancock Insider Trading Policy (All Covered Employees) ............................................. |
25 |
John Hancock Pay to Play Rule on Political Contributions (All Covered Associates)............ |
25 |
John Hancock Whistleblower Policy (All Covered Employees)............................................... |
26 |
Policy and Procedures Regarding Disclosure of Portfolio Holdings (All Covered Employees) |
|
..................................................................................................................................................... |
26 |
Additional Policies Outside the Code (All Covered Employees)............................................. |
27 |
Appendix .............................................................................................................................................. |
28 |
Definitions........................................................................................................................................ |
28 |
Preferred Brokers List .................................................................................................................... |
32 |
Compliance Contacts....................................................................................................................... |
33 |
3
Introduction
John Hancock is required by law to adopt a Code of Ethics. The purpose of a Code of Ethics is to ensure that companies and their Covered Persons comply with all applicable laws and to prevent abuses in the investment advisory business that can arise when conflicts of interest exist between the employees of an investment advisor and its clients. By adopting and enforcing a Code of Ethics, we strengthen the trust and confidence entrusted in us by demonstrating that at John Hancock, client interests come first.
The Code of Ethics (the Code) that follows represents a balancing of important interests. On the one hand, as registered investment advisers, the John Hancock Advisers owe a duty of undivided loyalty to their clients and must avoid even the appearance of a conflict that might be perceived as abusing the trust they have placed in John Hancock. On the other hand, the John Hancock Advisers do not want to prevent conscientious professionals from investing for their own accounts where conflicts do not exist or that are immaterial to investment decisions affecting the John Hancock Advisers' clients.
When conflicting interests cannot be reconciled, the Code makes clear that, first and foremost, Covered Persons owe a fiduciary duty to John Hancock clients. In most cases, this means that the affected employee will be required to forego conflicting personal securities transactions. In some cases, personal investments will be permitted, but only in a manner, which, because of the circumstances and applicable controls, cannot reasonably be perceived as adversely affecting John Hancock client portfolios or taking unfair advantage of the relationship John Hancock employees have to John Hancock clients.
The Code contains specific rules prohibiting defined types of conflicts. Since every potential conflict cannot be anticipated by the Code, it also contains general provisions prohibiting conflict situations. In view of these general provisions, it is critical that any Covered Person who is in doubt about the applicability of the Code in a given situation seek a determination from Chief Compliance Officer (CCO), designee, or the Code of Ethics Administration Group about the propriety of the conduct in advance.
It is critical that the Code be strictly observed. Not only will adherence to the Code ensure that John Hancock renders the best possible service to its clients, it will help to ensure that no individual is liable for violations of law.
It should be emphasized that adherence to this policy is a fundamental condition of employment at John Hancock. Every Covered Person is expected to adhere to the requirements of the Code despite any inconvenience that may be involved. Any Covered Person failing to do so may be subject to disciplinary action, including financial penalties and termination of employment as determined by the CCO, designee, or Ethics Oversight Committee.
4
Standards of Business Conduct
Each Covered Person within the John Hancock organization is responsible for maintaining the very highest ethical standards when conducting our business.
This means that you must at all times:
•Place the interests of clients first. You have a fiduciary duty at all times to place the interests of our clients and fund investors first.
•Conduct all personal trading in full compliance with this Code. All of your personal securities transactions must be conducted consistent with the provisions of the Code that apply to you and in such a manner as to avoid any actual or potential conflict of interest or other abuse of your position of trust and responsibility.
•Avoid taking inappropriate advantage of your position at John Hancock. You should not take inappropriate advantage of your position or engage in any fraudulent or manipulative practice (such as front-running or manipulative market timing) with respect to our clients' accounts or fund investors.
•Maintain confidentiality of our clients and John Hancock. You must treat as confidential any information concerning the identity of security holdings and financial circumstances of clients or fund investors.
•Comply with applicable Federal Securities Laws. You must comply with all applicable federal Securities Laws.
•Report any violation of the Code. You must promptly report any violation of the Code that comes to your attention to the CCO (or designee) of your company.
It is essential that you understand and comply with the general principles, noted above, in letter and in spirit as no set of rules can anticipate every possible problem or conflict situation. Failure to comply with the general principles and the provisions of the Code may result in disciplinary action, including termination of employment.
Applicability and Scope
Individuals subject to this policy will be notified by the CCO, designee, or the Code of Ethics Administration Group. Generally, if you meet the requirements listed below, you are deemed an Access Person1 and this Code applies to you2:
•a director, officer or other Supervised Person of a John Hancock Adviser;
•an interested director, officer or Access Person of John Hancock Investment Management Distributors, LLC, John Hancock Distributors, LLC, or a John Hancock open-end or closed-end fund registered under the 1940 Act and are advised by a John Hancock Adviser;3
• an employee of Manulife Financial Corporation (MFC) or its subsidiaries who
1See the Definitions section and contact a member of the Office of the CCO with any questions.
2Access Persons of John Hancock GA Mortgage Trust that are personnel of John Hancock Investment Management, LLC are covered by this Code.
3 Disinterested Trustees of John Hancock open-end and closed-end funds registered under the 1940 Act and advised by a John Hancock Adviser are subject to a separate Code of Ethics adopted by the Board of Trustees.
5
participates in making recommendations for, or receives information about, portfolio trades or holdings of the John Hancock Affiliated Funds.4
Access Levels
The requirements of this policy will differ depending on your Access Level category. There are three categories for persons covered by the Code, taking into account position, duties and access to information regarding fund portfolio trades.5 You will receive notification as to your particular category, based on the Code of Ethics Administration Group's understanding of your current role in coordination with the Office of the CCO. If you have a level of investment access beyond your assigned category, or if you are promoted or change duties and as a result should more appropriately be included in a different category, it is your responsibility to notify the CCO, designee, or the Code of Ethics Administration Group.
Please note: If a specific Code provision (examples: personal investing restriction or limitations, pre-clearance obligation, or reporting obligation, etc.) applies to the Access Person, it also applies to all Securities and Brokerage Accounts over which the Access Person has Beneficial Ownership.
Access Level 1
A person who, in connection with his/her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by the Fund or account.
Examples (may include but are not limited to):
•Portfolio Managers
•Analysts
•Traders
Access Level 2
A person who, in connection with his/her regular functions or duties, has regular access to nonpublic information regarding any clients' purchase or sale of securities, nonpublic information regarding the portfolio holdings of any John Hancock Affiliated Fund(s), is involved in making securities recommendations to clients, or has regular access to such recommendations that are nonpublic.
Examples (may include but are not limited to):
•Office of the CCO
4The preceding excludes John Hancock Asset Management (U.S.) and John Hancock Asset Management (N.A.) each of whom have adopted their own Code of Ethics in accordance with Rule 204A-1 under the Advisers Act.
5 The Code of Ethics Administration Group, CCO (or designee) may modify the requirements of this Code for those John Hancock Associates whose covered status is expected not to exceed 90 days (for instance contractors, co-ops and interns) or in instances where a person is subject to another Code of Ethics or fiduciary duty and where the modification is not otherwise specifically prohibited by law. In reliance on an SEC no-action letter, the Code of Ethics Administration Group or CCO (or designee) may include in the definition of "John Hancock Associate" any person of a John Hancock Affiliate who is engaged, directly or indirectly in John Hancock's investment advisory activities.
6
•Fund Administration
•Investment Management Services
•Technology Resources Personnel (as designated)
•Legal Staff
•Marketing (as designated)
Access Level 3
A person who, in connection with his/her regular functions or duties, has periodic access to nonpublic information regarding any clients' purchase or sale of securities or nonpublic information regarding the portfolio holdings of any John Hancock Affiliated Funds.
Examples (may include but are not limited to):
•Marketing (as designated)
•Product Development
•E-Commerce
•Corporate Publishing
•Technology Resources Personnel (as designated)
Overview of Rules for All Access Persons
This policy contains rules regarding your obligations to comply with federal Securities Laws and John Hancock's standards of conduct. Access Persons are responsible for complying with the personal trading restrictions and obligations of their access designation level including: Brokerage Account disclosure, personal trading restrictions, pre-clearance requirements, disclosure requirements, and various reporting and certification requirements.
Brokerage Account Disclosure
You must use the automated compliance reporting system ("StarCompliance"), to disclose all Brokerage Accounts that have the capability to hold Reportable Securities including all Brokerage Accounts:
•of your own; regardless of what is currently held in the account,
•of your spouse, Significant Other, minor children or family members sharing the same household (Household Family Member),
•over which you have discretion or give advice or information, and/or
•in which your Household Family Member have Beneficial Ownership, or the opportunity to directly or indirectly profit or share in any profit derived from a Reportable Securities transaction.
Brokerage Account Examples (non-exclusive list)
You need to report:
•Brokerage Accounts
7
•John Hancock 401(k) accounts
•MFC Global Share Ownership Plan (GSOP)
•Solium accounts (some if they hold reportable securities including options on MFC securities)
•Self-directed IRA accounts
•Custodial accounts
•Mutual fund accounts*
•College investment plans 529s*
•401(k)/403(b) accounts*
•Dividend reinvestment program or dividend reinvestment plan (DRIP)
•Registered Retirement Savings Plan (RRSP/RESP/TFSA)
•Stock Purchase accounts
*if they have the capability to hold John Hancock Affiliated Funds
Employee Compensation Instruments (non-exclusive list)
You need to report:
•John Hancock 401(k)
•MFC Global Share Ownership Plan (GSOP)
•Options acquired from MFC (only MFC Solium account options that are granted)
•Public company employer as part of employee compensation
•Sole discretion accounts
•Accounts holding John Hancock Affiliated Funds
•Certain Manulife Pension Plans (RPS, RRSP)
You are not responsible for reporting:
•MFC Restricted Share Units (RSU)
•Deferred Share Units (DSU)
•Performance Share Units (PSU)
•US John Hancock Pension Plans
•Employer phantom stock/phantom option interest (granted as compensation to employee, only employer can redeem interest and interest is non-transferrable)
To prevent any potential violations of the Code, you are strongly encouraged to request clarification for accounts that are in question from the Code of Ethics Administration Group INVDIVCodeofEthics@manulife.com.
College Savings Plans - 529s
You must report John Hancock affiliated 529 plans including both the Freedom 529 plan and any other 529 plans that can hold John Hancock Affiliated Funds. You are not required to report transactions or holdings in 529 Plans for which the Adviser or a control affiliate does not manage, distribute, market or underwrite the 529 Plan or the investments and strategies
8
underlying the 529 Plan. If you have any questions about this requirement, please contact the Code of Ethics Administration Group or a member of the Office of the CCO.
401(k) and John Hancock Variable Products: John Hancock Affiliated Funds Reporting
You must report your holdings and trades in a John Hancock Affiliated Funds. This includes voluntary trades in your John Hancock affiliated accounts such as your 401(k) and any external Brokerage Account.
To comply with this requirement, if you purchase a John Hancock variable product you must provide your contract or policy number to the Code of Ethics Administration Group and if you have a John Hancock 401(k), you must you must enter the Brokerage Account on StarCompliance.
Managed Accounts
Managed Accounts are considered fully managed if neither Access Person nor Household Family Member has no direct influence or control. Prior to the execution of Reportable Securities transactions in the Managed Account, you must obtain approval from the CCO (or designee). Once the Brokerage Account is approved as a Managed Account, in writing from the CCO (or designee) of the Adviser/Trust, the transactions do not need to be pre-cleared. Exemption requests which pose a conflict of interest for the CCO (or designee) will be escalated to the Ethics Oversight Committee for review and consideration.
You may request approval by disclosing the Brokerage Account in the automated compliance system, marking it as a Managed Account and by providing the appropriate evidence as described below. You are required to provide evidence that you or your Household Family Member has no direct or indirect influence or control including not being able to:
1)Suggest that the trustee or third-party discretionary manager make any particular purchases or sales of Reportable Securities;
2)Direct the trustee or third-party discretionary manager to make any particular purchases or sales of Reportable Securities; and
3)Consult with the trustee or third-party discretionary manager as to the particular allocation of investments to be made in your account.
You may also be asked to periodically attest to the status of the Managed Account(s) and provide electronic feeds or duplicate statements.
Preferred Brokerage Account Requirements
You must maintain your Brokerage Accounts at one of the preferred brokers approved by John Hancock. Upon designation as an Access Person, you have 45 calendar days to (i) qualify any non-compliant Brokerage Account as an exempt account or (ii) transfer all assets to a preferred broker and close the non- compliant account. Please note that you are not required to move 401(k) accounts. Exceptions may be granted with the approval from the CCO, its designee, or the Code of Ethics Administration Group. Requests for exceptions to this policy
9
must be submitted in writing to the Code of Ethics Administration Group. A list of the Preferred Brokers can be found in the Appendix.
Opening/Closing Accounts
You are required to report each transaction in any Reportable Security to the Code of Ethics Administration Group. To comply with this requirement, you:
•Are required to notify the Code of Ethics Administration team within 10 days of opening or closing a Brokerage Account. In the case of a new Brokerage Account in which you have a beneficial interest, you must notify the Code of Ethics Administration Group before any trades are placed.
•Are required by this Code and by the Insider Trading Policy to inform your broker- dealer that you are employed by a financial institution. Your broker- dealer is subject to certain rules designed to prevent favoritism toward your Brokerage Accounts. You may not accept negotiated commission rates that you believe may be more favorable than the broker grants to accounts with similar characteristics.
•Must notify the broker-dealer if you are registered with the Financial Industry Regulatory Authority or are employed by John Hancock Investment Management Distributors, LLC or John Hancock Distributors, LLC.
Statements and Duplicate Confirmations of Trades
The Code of Ethics Administration Group may rely on information submitted by your broker as part of your reporting requirements under the Code. Upon notification of your Brokerage Account, the Code of Ethics Administration Group will notify the broker-dealer to have duplicate confirmations of any trade, as well as statements or other information concerning the Brokerage Account, sent to:
John Hancock Financial Services
Attention: General Funds Compliance
197Clarendon Street, C-03-13 Boston, MA 02116
Personal Trading
Personal Trading is a privilege and must always come second to the fiduciary duty you owe to our clients. Below is a list of personal trading restrictions for all Access Persons.
All Access Persons must:
•Disclose holdings in Reportable Securities (including John Hancock Affiliated Funds and John Hancock Variable Products)
•Disclose Brokerage Accounts
•Pre-clear applicable Reportable Securities transactions
10
Personal Trading Restrictions for all Access Persons
All Access Persons are prohibited from:
•Profiting from the purchase and sale of a John Hancock Affiliated Fund within 30 calendar days.
•Engaging in speculative transactions involving MFC securities including: options, hedging or short sales involving securities issues by Manulife.
•Transacting in securities that appear on the confidential John Hancock Restricted list (pre-clearance requests will be denied).
•Transacting in Initial Public Offerings (IPOs), Private Placements, and Limited Offerings without obtaining proper pre-clearance approval.6
•Transacting in securities while in possession of material nonpublic information including but not limited to: fund events, due diligence visits etc.
An Access Person who either directs 45 or more trades in a quarter or redeems shares of a John Hancock Affiliated Fund within 30 days of purchase, should expect additional scrutiny of his or her trades and he or she may be subject to limitations on the number of trades allowed during a given period.
Reporting and Pre-clearance
As an Access Person, you are required to report to the Code of Ethics Administration Group each transaction in any Reportable Security. You must ensure that all transactions (unless it is an Involuntary Issuer Transaction) and holdings in Reportable Securities are properly reflected in the requisite initial, quarterly and annual reporting certifications. To facilitate the reporting process, please ensure that you have properly disclosed your correct Brokerage Account information to the Code of Ethics Administration Group in the automated compliance system, including the disclosure of participation in the John Hancock 401(k) and Manulife GSOP.
The transaction and holding reporting requirement does not include John Hancock money market funds or any dividend reinvestment, payroll deduction, systematic investment/withdrawal and/or other program trades. Please note that different requirements apply to shares of John Hancock Affiliated Funds, including a 30-day holding period requirement.
As an Access Person, in addition to your reporting obligations, you have pre-clearance obligations for certain securities, depending on your Access Level group. Please see the appropriate access level below, for more detailed information.
6Please note, Level 1 Access Persons and Registered Representatives are prohibited from purchasing IPOs.
11
Level 1 Access Persons: Additional Personal Trading Restrictions and Disclosures
Please note, there are additional restrictions that apply to all Access Persons listed in the section entitled, "Personal Trading Restrictions for All Access Persons".
Level 1 Access Persons
•Pre-clear MFC Securities: You must pre-clear all transactions in MFC securities including stock, company issued options, securities such as debt, and sell transactions in the MFC Global Share Ownership Plan.
•Pre-clear all of the following securities: You must pre-clear and receive approval prior to transactions in the following securities:
Stocks; including sell transactions of MFC Shares held in your Global Share Ownership Plan
Bonds;
Government securities that are not direct obligations of the U.S. government, such as Fannie Mae, or municipal securities, in each case that mature in more than one year;
John Hancock Affiliated Funds;7
Closed-end funds (including John Hancock affiliated closed-end funds)
Options on securities, on indexes, and on currencies;
Swaps on securities, on indexes, and on currencies;
Limited partnerships;
Exchange traded funds and notes;
Domestic unit investment trusts;
Non-US unit investment trusts and Non-US mutual funds;
Private investment funds and hedge funds; and
Futures, investment contracts or any other instrument that is considered a "security" under the Securities Act of 1933;
Private Placements, limited offerings8.
•Ban on IPOs: You may not acquire securities in an IPO. You may not purchase any newly-issued Reportable Security until it is listed on a public exchange.
•Seven Day Blackout: You are prohibited from buying or selling a Reportable Security within 7 calendar days before or after that Reportable Security is traded for a fund that the Person manages or for a John Hancock Affiliated Fund unless no conflict of interest exists in relation to that Reportable Security as determined by the Code of Ethics Administration Group.
•Gifting Reportable Securities: If you gift or donate shares of a Reportable Security it is considered a sale and you must receive pre-clearance approval.
•Inheriting Reportable Securities: If you inherit shares of a Reportable Security you
7John Hancock Affiliated open ended mutual funds do not require pre-clearance, only reporting. However, there are certain holding period requirements. A list of John Hancock Affiliated Funds can be found on StarCompliance.
8 Level 1 Access Persons are banned from participation in IPOs.
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must notify the Code of Ethics Administration Group within 10 days.
•30 Day Hold John Hancock Affiliated Funds: You cannot profit from the purchase and sale of a John Hancock Affiliated Funds within 30 calendar days.
•60 Day Hold: You may not profit from the purchase and sale (or sale and purchase) of the same (or equivalent) Reportable Security (see note on John Hancock Affiliated Funds) within 60 calendar days, also known as a "Ban on Short Term Profits".
o Exclusion: pre-clearance requests in a Reportable Security with a market capitalization of $5 billion or more would, in most cases, not be subject to the 60 day hold and would be approved if they are appropriately pre-cleared.
Options requiring additional consideration are as follows:
Call Options
You can purchase a call option that is subject to pre-clearance only if the call option has an expiration of equal to or greater than 60 days from the date of purchase. You must either (i) hold the option for at least 60 days prior to sale or (ii) if exercised, must hold the option and the underlying Security of the option for a total of 60 days (i.e., the period during which the call option was held will count towards the 60 day holding period for the underlying Security).
You can sell (i.e. write) a call option that is subject to pre-clearance only if the underlying Security (in the corresponding quantity) has been held for at least 60 days (i.e. covered call). You can not engage in a subsequent purchase of a call option unless the conditions specified above are met.
Put Options
You can purchase a put option that is subject to pre-clearance only if the put option has a period to expiration of at least 60 days from the date of purchase and you hold the put option for at least 60 days. If you purchases a put option on a Security already owned (i.e. put hedge), the time the underlying Security has been held will count towards the 60 day holding period for the put.
You may not sell (i.e. write) a put option on a Security.
You may not use derivatives including futures, options on futures, or options or warrants on a Security to circumvent the restrictions of the Code. (i.e. you may not use derivative transactions with respect to a Security if the Code otherwise prohibits them from taking the same position directly in the underlying Security.)
•Ownership Ban: Securities of Sub-advisers: you are prohibited from owning securities of any sub-adviser of a John Hancock Affiliated Fund.9
9MFC securities are excluded from Level 1 & Level 2 sub-adviser ownership prohibition. The list of securities of sub-advisers can be found on the automated compliance system or upon request from the CCO.
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•Must promptly disclose:
o Ownership of Securities Under Consideration for John Hancock Affiliated Fund: Any direct or indirect beneficial interest in a Reportable Security that is under consideration for purchase or sale in a John Hancock Affiliated Fund.
oPrivate Placement Conflicts: You must disclose holdings of any Reportable Securities purchased in a private placement when you participate in a decision to purchase or sell that same issuer's securities for a John Hancock Affiliated Fund.
•Restriction on Securities Under Active Consideration: You are prohibited from buying or selling a Reportable Security if the Reportable Security is being actively traded by a John Hancock Affiliated Fund.
oExceptions:
De Minimis Trading: pre-clearance requests for 500 shares or less of a particular Reportable Security within a market value of $25K or less, aggregated daily, would, in most cases, not be subject to the 7- day blackout period restrictions and the restriction on actively traded securities.
Market Cap Securities: pre-clearance requests in a Reportable Security with a market capitalization of $5B or more would not be subject to the blackout period restrictions and the restriction on actively traded securities.
•Pre-clearance of Exchange Traded Funds/Exchange Traded Notes (ETF/ETN) and Options on Reportable Securities: you are required to pre-clear ETFs, ETNs and Options on Reportable Securities.
o Exceptions to the pre-clearance requirement for ETF/ETN or options on Reportable Securities (provided it is not a John Hancock Affiliated Fund):
o has an average market capitalization of $5 billion or more; o is based on a non-covered security;
o or is based on a Broad-Based Index.
•Prohibition on Investment Clubs, Good Until Canceled Orders, or Limit Orders: You may not participate in:
oinvestment clubs,
o"good until cancelled orders", or
o"limit orders" unless the limit orders are day orders that automatically expire at the end of the trading day and cancel any orders that have not been executed.
Investment Professionals Only
Level 1 Access Persons who are "Investment Professionals" (Analysts and Portfolio Managers) must disclose the following:
oOwnership of 5% or Greater: 5% or greater interest in a company, John Hancock Affiliated Funds and its affiliates may not make any investment in that company;
oOwnership of 1% or greater 1% or greater interest in a company, you cannot
14
participate in any decision by John Hancock Funds and its affiliates to buy or sell that company's securities;
•ANY other interest in a company, you cannot recommend or participate in a decision by John Hancock Affiliated Funds, and its affiliates to buy or sell that company's securities unless your personal interest is fully disclosed at all stages of the investment decision.
In such instances, you must initially disclose that beneficial interest orally to the primary portfolio manager (or other appropriate analyst) of the Affiliated Fund(s) or account or the appropriate Chief Investment Officer. Following the oral disclosure, you must send a written acknowledgement to the primary portfolio manager with a copy to the Code of Ethics Administration Group.
Level 2 Access Persons: Additional Personal Trading Restrictions and Disclosures
Please note, there are additional restrictions that apply to all Access Persons listed in the section entitled, "Personal Trading Restrictions for All Access Persons".
Level 2 Access Persons:
•Pre-clear MFC Securities: You must pre-clear all transactions in MFC securities including stock, company issued options, sell transactions in the MFC Global Share Ownership Plan, and any other securities such as debt.
•Pre-clear the following securities: You must pre-clear and receive approval prior to transactions in the following securities:
Stocks; including sell transactions of MFC Shares held in your Global Share Ownership Plan
Bonds;
Government securities that are not direct obligations of the U.S. government, such as Fannie Mae, or municipal securities, in each case that mature in more than one year;
John Hancock Affiliated Funds;10
Closed-end funds (including John Hancock affiliated closed-end funds)
Options on securities, on indexes, and on currencies;
Swaps on securities, on indexes, and on currencies;
Limited partnerships;
Exchange traded funds and notes;
Domestic unit investment trusts;
Non-US unit investment trusts and Non-US mutual funds;
Private investment funds and hedge funds; and
Futures, investment contracts or any other instrument that is considered a "security" under the Securities Act of 1933;
10John Hancock Affiliated open ended mutual funds do not require pre-clearance, only reporting. However, there are certain holding period requirements.
15
IPOs11, Private Placements, limited offerings.
•Three Day Blackout Period: You are prohibited from knowingly buying or selling a Reportable Security within three calendar days before and after that Reportable Security is traded for a John Hancock Affiliated Fund unless no conflict of interest exists in relation to that Reportable Security as determined by the Code of Ethics Administration Group.
•Gifting Reportable Securities: If you gift or donate shares of a Reportable Security the transaction is considered a sale and you must receive pre-clearance approval.
•Inheriting Reportable Securities: If you inherit shares of a Reportable Security you must notify the Code of Ethics Administration Group within 10 days.
•30 Day Hold John Hancock Affiliated Funds: You cannot profit from the purchase and sale of a John Hancock Affiliated Funds within 30 calendar days.
•60 Day Hold: You may not profit from the purchase and sale (or sale and purchase) of the same (or equivalent) Reportable Security within 60 calendar days, also known as a "Ban on Short Term Profits".
o Exclusion: pre-clearance requests in a Reportable Security with a market capitalization of $5 billion or more would, in most cases, not be subject to the Ban on Short Term Profits, and would be approved if they are appropriately pre-cleared.
•Ownership Ban: Securities of Sub-advisers: you are prohibited from owning securities of any sub-adviser of a John Hancock Affiliated Fund.12
•Restriction on Securities Under Active Consideration: You are prohibited from buying or selling a Reportable Security if the security is being actively traded by a John Hancock Affiliated Fund.
o Exceptions:
De Minimis Trading: pre-clearance requests for 500 shares or less of a particular Reportable Security within a market value of $25K or less, aggregated daily, would, in most cases, not be subject to the 7- day blackout period restrictions and the restriction on actively traded securities.
Market Cap Securities: pre-clearance requests in a Reportable Security with a market capitalization of $5B or more would not be subject to the blackout period restrictions and the restriction on actively traded securities.
•Pre-clearance of Exchange Traded Funds/Exchange Traded Notes (ETF/ETN) and Options on Reportable Securities: you are required to pre-clear ETFs, ETNs and Options on Reportable Securities.
o Exceptions to the pre-clearance requirement for ETF/ETN or options on Reportable Securities (provided it is not a John Hancock Affiliated Fund):
has an average market capitalization of $5 billion or more;
11Level 1 Access Persons are banned from participation in IPOs.
12MFC securities are excluded from Level 1 &Level 2 sub-adviser ownership prohibition. The list of securities of sub-advisers can be found on the automated compliance system or upon request from the CCO.
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is based on a non-covered security;
or is based on a Broad-Based Index.
•Prohibition on Investment Clubs, Good Until Canceled Orders, or Limit Orders: You may not participate in:
o investment clubs,
o "good until cancelled orders", or
o "limit orders" unless the limit orders are day orders that automatically expire at the end of the trading day and cancel any orders that have not been executed.
Level 3 Access Persons: Additional Personal Trading Restrictions and Disclosures
Please note, there are additional restrictions that apply to all Access Persons listed in the section entitled, "Personal Trading Restrictions for All Access Persons".
Level 3 Access Persons:
•Pre-clear transactions in:
oclosed-end funds and exchange traded funds advised by a John Hancock Adviser
otransactions in IPOs
oprivate placements and limited offerings.
•Gift or Donation of Reportable Securities: You must obtain pre-clearance approval prior to gifting or donating any Reportable Securities transactions that would require pre-clearance.
•Inheritance of Reportable Securities: If you inherit shares of a Reportable Security you must notify the Code of Ethics Administration Group within 10 days.
•30 Day Hold John Hancock Affiliated Funds: You cannot profit from the purchase and sale of a John Hancock Affiliated Funds within 30 calendar days.
An Access level 3 Person is not required to pre-clear other trades. However, please keep in mind that an Access level 3 Person is required to report Reportable Securities transactions after every trade (even those that are not required to be pre-cleared) by requiring your broker to submit duplicate confirmation statements or electronic feeds to the Code of Ethics Administration Group. You must also ensure that all transactions in Reportable Securities are properly reported on your quarterly transaction/annual holdings certification.
Pre-clearance Process
You may request a trade pre-clearance through the automated compliance system, StarCompliance.
Please note that:
•You may not trade until clearance approval is received.
•Clearance approval is valid only for the date granted (i.e. the pre-clearance requested date and the trade date should be the same).
•A separate procedure should be followed for requesting pre-clearance of
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an IPO, a private placement, or a limited offering in StarCompliance.
Certain transactions in securities that would normally require pre-clearance are exempt from the pre-clearance requirement in the following situations: (1) shares are being purchased as part of an Automatic Investment Plan; (2) shares are being purchased as part of a dividend reinvestment plan; or (3) transactions are being made in a Managed/discretionary account, an account over which you have designated a third party as having sole discretion to trade (you must have approval from the CCO (or designee) to establish a discretionary account).
Reporting and Certification Requirements
Reporting
All Access Persons, regardless of their level, must complete and submit reports and certifications to compliance using StarCompliance, the automated compliance system, in an accurate and timely manner as described below.
Reporting Upon Designation
Within 10 calendar days after designation as an Access Person, you must complete and submit to compliance using StarCompliance:
•Initial Holdings Report: A report of all Brokerage Accounts (please see the definition section) that hold or have the ability to hold any Reportable Securities and all Reportable Securities holdings current as of the date you became an Access Person.
•Initial Certification of Compliance: Certify to your understanding of the Code of Ethics.
•Initial Training: Certify that you have attended a training on the Code of Ethics Policy.
Quarterly Reporting
Within 30 calendar days after the end of each calendar quarter, you must complete and submit to compliance using StarCompliance:
•Quarterly Certification: a report of all Brokerage Accounts and all transactions in Reportable Securities (including transactions in John Hancock Affiliated Funds, including sell transactions in your Global Share Ownership Plan (GSOP) and voluntary transactions, such as fund exchanges, in your John Hancock 401(k)).
•Managed Account Certification: A certification of related to your Managed Accounts (only if applicable).
Additional transaction notes:
•All transactions in John Hancock Affiliated Funds and Variable Products must be reported.
•Only sell transactions of MFC stock in your Global Share Ownership Plan (GSOP) need to be reported.
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•Only voluntary transactions, such as fund exchanges, need to be reported for transactions in your John Hancock 401(k) Savings account.
For each Brokerage Account you must certify that the following information is captured accurately:
•Account number
•Brokerage Firm
For each transaction required to be reported you must certify the following information was captured accurately:
•the date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares, and principal amount of each Reportable Security involved;
•the nature of the transaction (i.e. purchase, sale or any other type of acquisition or disposition);
•the price at which the transaction was effected;
•the name of the broker, dealer or bank with or through which the transaction was effected.
Annual Reporting
At a date designated by the Code of Ethics Administration Group, at least annually (or additionally when the Code has been materially changed), you must complete and submit to compliance:
•Annual Holdings Report: disclosing all of your Brokerage Accounts that hold or can hold any Reportable Securities and all holdings in Reportable Securities, current as of a date not more than 45 days before the report is submitted.
o John Hancock Affiliated Funds & Variable Products holdings must be reported, regardless of where they are held.
o Global Share Ownership holdings of Manulife Financial Corporation, Inc. (MFC) stock must be reported.
•Annual (or additionally when the Code has been materially changed) Certification of Code of Ethics: acknowledging that you have received, read, and complied with the requirements of the Code of Ethics.
Ad Hoc Reporting
Throughout the year you must complete and submit to compliance:
•Brokerage Account Changes: You are required to promptly notify (within 10 days) Compliance of any applicable account changes.
•Changes to the Code of Ethics: You are required to complete an additional certification of compliance stating that you read, received and understood material changes to the Code of Ethics.
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Administration and Enforcement
Administration of the Code
Sub-adviser Compliance
A sub-adviser to a John Hancock Affiliated Fund has a number of Code of Ethics responsibilities:
•The sub-adviser must have adopted their own code of ethics in accordance with Rule 204A-1(b) under the Advisers Act which has been approved by the Board of Trustees;
•On a quarterly basis, each sub-adviser certifies compliance with their Code of Ethics or reports material violations if such have occurred; and
•Each sub-advisor must report quarterly to the CCO (or designee), any material changes to its Code of Ethics.
Adoption and Approval
The Board of a John Hancock Affiliated Fund, including a majority of the Fund's Independent Board Members, must approve the Code of Ethics of the Fund's adviser, sub-adviser or principal underwriter (if an affiliate of the underwriter serves as a Board member or officer of the Fund or the adviser) before initially retaining its services.
Each material change to a Code of Ethics of a sub-adviser to a fund must be approved by the Board of the John Hancock Affiliated Fund, including a majority of the Fund's Independent Board Members, no later than six months after adoption of the material change.
The Board may only approve the Code if they determine that the Code:
•Contains provisions reasonably necessary to prevent the subadviser's Access Persons (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from engaging in any conduct prohibited by Rule 17j-1 and 204A-1;
•Requires the sub-adviser's Access Persons to make reports to at least the extent required in Rule 17j-1(d) and Rule 204A-1(b);
•Requires the sub-adviser to institute appropriate procedures for review of these reports by management or compliance personnel (as contemplated by Rule 17j- 1(d)(3) and Rule 204 A- 1(a)(3));
•Provides for notification of the sub-adviser's Access Persons in accordance with Rule 17j-1(d)(4) and Rule 204A-1(a)(5);
•Requires the sub-adviser's Access Persons who are Investment Personnel to obtain the pre- clearances required by Rule 17j-1(e); and
•Requires the sub-adviser's Access Persons to obtain the pre-clearances required by Rule 204A- 1(c).
The CCO of the John Hancock Affiliated Funds oversees each of the fund's sub-adviser to ensure compliance with each of the provisions included in this section.
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Sub-adviser Reporting & Recordkeeping Requirements
Each sub-adviser must complete an annual Code of Ethics questionnaire and certification as to their compliance under Rule 17j-1 and summary of any violation to the relevant John Hancock Adviser, whom present summaries to the Board of Trustees annually during their 2nd quarter meeting (which is typically held in June).
Reporting to the Board
No less frequently than annually, the Office of the CCO will furnish to the Board of Trustees a written report that:
•describes issues that arose during the previous year under the Code of Ethics or the related procedures, including, but not limited to, information about material Code or procedure violations, as well as any sanctions imposed in response to the material violations, and
•certifies that each entity, including the sub-advisers have adopted procedures reasonably necessary to prevent its Access Persons from violating its Code of Ethics,
•Any material changes to the Code are presented to the Trustees within six months for their approval.
The CCO of the John Hancock Affiliated Funds oversees each of the fund's sub-adviser to ensure compliance with each of the provisions included in this section.
Reporting Violations
If you know of any violation of the Code, you have a responsibility to promptly report it to the CCO of your company. You should also report any deviations from the controls and procedures that safeguard John Hancock and the assets of our clients.
Since we cannot anticipate every situation that will arise, it is important that we have a way to approach questions and concerns. Always ask first, act later. If you are unsure of what to do in any situation, seek guidance before you act.
Speak to your manager, a member of the Human Resources Department or Legal Department or your divisional compliance officer if you have:
•a doubt about a particular situation;
•a question or concern about a business practice; or
•a question about potential conflicts of interest
You may report suspected or potential illegal or unethical behavior without fear of retaliation. John Hancock does not permit retaliation of any kind for good faith reports of illegal or unethical behavior. Concerns about potential or suspected illegal or unethical behavior should be referred to a member of the Human Resources or Legal Department. John Hancock relies on the Manulife Code of Business Conduct which advises that unethical, unprofessional, illegal, fraudulent or other questionable behavior may also be reported by
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calling a confidential toll-free Ethics Hotline at 1-866-294-9534 or at www.ManulifeEthics.com.
Exemptions & Appeals
Exemptions: to the Code may be granted by the CCO (or designee) where supported by applicable facts and circumstances. If you believe that you have a situation that warrants an exemption to any of the rules and restrictions of this Code you need to submit a written request to the CCO (or designee). All requests will be reviewed on a case by case basis. The CCO (or designee) will provide a written response detailing its decision once the review has been completed.
Exemption requests which pose a conflict of interest for the CCO will be escalated to the Ethics Oversight Committee for review and consideration.
Appeals: If you believe that your request has been incorrectly denied or that an action is not warranted, you may appeal the decision. To make an appeal, you need to give the CCO (or designee) of the Adviser/Trust a written explanation of your reasons for appeal within 30 days of the date that you were informed of the decision. Be sure to include any extenuating circumstances or other factors not previously considered. During the review process, you may, at your own expense, engage an attorney to represent you. The Code of Ethics Administration Group may arrange for Ethics Oversight Committee or other parties to be part of the review process.
Interpretation and Enforcement
The Code cannot anticipate every situation in which personal interests may be in conflict with the interests of our clients and fund investors. You should be responsive to the spirit and intent of the Code as well as its specific provisions.
When any doubt exists regarding any Code provision or whether a conflict of interest with clients or fund investors might exist, you should discuss the situation in advance with the CCO (or designee) of your company. The Code is designed to detect and prevent fraud against clients and fund investors, and to avoid the appearance of impropriety.
The CCO has general administrative responsibility for the Code as it applies to the covered employees; an appropriate member of the Code of Ethics Administration Group will administer procedures to review personal trading activity. The Code of Ethics Administration Group also regularly reviews the forms and reports it receives. If these reviews uncover information that is incomplete, questionable, or potentially in violation of the rules in this document, the Code of Ethics Administration Group will investigate the matter and may contact you.
The Board of the John Hancock Affiliated Funds approve material amendments to the Code and authorize sanctions imposed on Access Persons of the Funds. Accordingly, the Code of Ethics Administration Group will refer violations to the CCO of the Trust/Adviser (or
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designee) for further review and action, including determination if the matter should be presented to the Ethics Oversight Committee and/or the Board of Trustees for recommended action.
The following factors will be considered when determining a fine or other disciplinary action:
•the person's position and function (senior personnel may be held to a higher standard);
•the amount of the trade;
•whether the John Hancock Affiliated Funds hold the security and were trading the same day;
•whether the violation was by a family member;
•whether the person has had a prior violation and which policy was involved; and
•whether the employee self-reported the violation.
John Hancock takes all rule violations seriously and, at least once a year, provides the Board of the John Hancock Affiliated Funds with a summary of all material violations and sanctions, significant conflicts of interest and other related issues for their review. Sanctions for violations could include (but are not limited to) fines, disgorgement, limitations on personal trading activity, suspension or termination of the Covered Person's position with John Hancock and/or a report to the appropriate regulatory authority.
You should be aware that other Securities Laws and regulations not addressed by the Code may also apply to you, depending on your role at John Hancock.
The CCO of the Adviser/Trust (or designee) and the Ethics Oversight Committee retain the discretion to interpret the Code's provisions and to decide how they apply to any given situation.
Education of Employees
This Code constitutes the Code of Ethics required by Rule 17j-1 under the Investment Company Act of 1940 and by Rule 204A-1 under the Investment Advisers Act of 1940. T h e Code of Ethics Administration Group will provide a copy of the Code (and any amendments) to each person subject to the Code. T h e Code of Ethics Administration Group in coordination with the CCO or designee will also administer initial and annual training to employees on the principles and procedures of the Code and other related policies.
Recordkeeping
The Code of Ethics Administration Group will maintain a:
•Copy of the current Code for John Hancock and a copy of each Code of Ethics in effect at any time within the past five years.
•Record of any violation of the Code, and of any action taken as a result of the violation, for six years.
•Copy of each report made by an Access Person under the Code, for six years (the
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first two years in a readily accessible place).
•Record of all persons, currently or within the past five years, who are or were, required to make reports under the Code. This record will also indicate who was responsible for reviewing these reports.
•Record of any decision, and the reasons supporting the decision, to approve the acquisition by an Access Level I Persons of IPOs or private placement securities, for six years.
•Record of any decision, and the reasons supporting the decision, to approve the acquisition by an Access Person of the John Hancock Advisers IPOs or private placement securities, for six years.
Other Important Policies
The John Hancock Affiliated Funds have additional policies or may rely on certain MFC policies. Summary excerpts of such policies are listed below please review each full policy for additional details.
MFC Code of Business Conduct & Ethics (All Covered Employees)
The MFC Code of Business Conduct and Ethics (the MFC Code) provides standards for ethical behavior when representing the Company and when dealing with employees, field representatives, customers, investors, external suppliers, competitors, government authorities and the public.
The MFC Code applies to directors, officers and employees of MFC, its subsidiaries and controlled affiliates. Sales representatives and third-party business associates are also expected to abide by all applicable provisions of the MFC Code and adhere to the principles and values set out in the MFC Code when representing Manulife to the public or performing services for, or on behalf of, Manulife.
Other important issues in the MFC Code include:
•MFC values;
•Ethics in workplace;
•Ethics in business relationships;
•Conflicts of Interest;
•Handling information;
•Receiving or giving of gifts, entertainment or favors;
•Misuse or misrepresentation of your corporate position;
•Disclosure of confidential or proprietary information;
•Disclosure of outside business activities;
•Antitrust activities; and
•Political campaign contributions and expenditures relating to public officials. John Hancock Conflicts of Interest Policy (All Covered Employees)
Conflicts of Interest are both inherent to the investment advisory business and also exist as a result of our unique organizational structure. The Conflicts of Interest Policy governs
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organizational/Adviser conflicts, rather than personal conflicts (such as outside business activities or gifts and entertainment). Our fiduciary obligation as an adviser to the Funds requires us to effectively disclose and/or manage these conflicts, which we do today through various documents and controls, and ultimately to act in the best interest of our clients and the Fund shareholders.
John Hancock Gift & Entertainment Policy (All Covered Employees)
You are subject to the Gift and Entertainment Policy for the John Hancock Advisers which is designed to prevent the appearance of an impropriety, potential conflict of interest or improper payment.
The Gift & Entertainment Policy covers many issues relating to giving and accepting of gifts and entertainment when dealing with business partners, such as:
•Gift & Business Entertainment Limits
•Restrictions on Gifts & Entertainment
•Reporting of Gifts & Entertainment
John Hancock Insider Trading Policy (All Covered Employees)
The antifraud provisions of the federal Securities Laws generally prohibit persons with material nonpublic information from trading on or communicating the information to others. Sanctions for violations can include civil injunctions, permanent bars from the securities industry, civil penalties up to three times the profits made or losses avoided, criminal fines and jail sentences. While Access Level I Persons are most likely to come in contact with material nonpublic information, the rules (and sanctions) in this area apply to all persons covered under this code and extend to activities both related and unrelated to your job duties.
The John Hancock Insider Trading Policy (the Insider Trading Policy) covers a number of important issues, such as:
•Possession, misuse and access to material nonpublic information
John Hancock Pay to Play Rule on Political Contributions (All Covered Associates)
The Pay to Play rule restricts Investment Advisers and certain employees who fall within the definition of Covered Associates from making contributions to elected officials (including incumbents, candidates, or successful candidates for an elective office of a government entity) who may be able to influence the selection of the investment adviser to manage the assets of government entities (any state or political subdivision of a state). The rule has three primary elements:
•A two-year prohibition on an adviser's providing compensated investment advisory services to a government entity after a contribution has been made by the adviser or one of its covered associates;
•A prohibition on the use of third-party solicitors who are not themselves regulated persons subject to pay-to-play restrictions on political contributions; and
•A prohibition on bundling and other efforts by advisers to solicit political contributions to certain officials of a government entity to which the adviser is
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seeking to provide services.
Sanctions for violating the rule include a prohibition from receiving compensation for providing advisory services to a fund in which such government entity's participant-directed plan or program invests for two years thereafter, otherwise known as a "time-out" period.
John Hancock Whistleblower Policy (All Covered Employees)
The Committees of the mutual funds' Board of Trustees investigate improprieties or suspected improprieties in the operations of the Funds and has established procedures for the confidential, anonymous submission by employees of John Hancock Investment Management, LLC and John Hancock Variable Trust Advisers, LLC. (collectively the "Advisers") or any other provider of services to the Funds or Advisers of complaints regarding accounting, internal accounting controls, auditing matters or violations of the Securities Laws. The objective of this policy is to provide a mechanism by which complaints and concerns regarding accounting, internal accounting controls, auditing matters or violations of Securities Laws may be raised and addressed without the fear or threat of retaliation. The funds desire and expect that the employees and officers of the Advisers, or any other service provider to the funds will report any complaints or concerns they may have regarding accounting, internal accounting controls or auditing matters.
Persons may submit complaints or concerns to the attention of funds' CCO (or designee) by sending a letter or other writing to the funds' principal executive offices, by telephone call to or an email to the Ethics Hotline, Ethics Hotline can be reached at 1-866-294-9534, or through the Ethicspoint website at www.manulifeethics.com. The Ethics Hotline and Ethicspoint website are operated by an independent third party, which maintains the anonymity of all complaints.
Complaints and concerns may be made anonymously to the funds' CCO (or designee) or the respective Committee's Chairperson. Furthermore, nothing in this policy prohibits reporting possible violations of applicable law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation.
Policy and Procedures Regarding Disclosure of Portfolio Holdings (All Covered Employees)
It is our policy not to disclose nonpublic information regarding Fund portfolio holdings except in the limited circumstances noted in this Policy. You can only provide nonpublic information regarding portfolio holdings to any person, including affiliated persons, on a "need to know" basis (i.e., the person receiving the information must have a legitimate business purpose for obtaining the information prior to it being publicly available and you must have a legitimate business purpose for disclosing the information in this manner). We consider nonpublic information regarding Fund portfolio holdings to be confidential and the intent of the policy and procedures is to guard against selective disclosure of such information
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in a manner that would not be in the best interest of Fund shareholders.
Additional Policies Outside the Code (All Covered Employees)
•Policy Regarding Dissemination of Mutual Fund Portfolio Information
•Manulife Financial Corporation Anti-Fraud Policy
•John Hancock Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF) Program
•Conflict of Interest Rules for Directors and Officers
•John Hancock Non-Cash Compensation Policy
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Appendix
Definitions
Access Person:
You are an "Access Person" if you are a "Supervised Person" who has access to nonpublic information regarding any client's purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any John Hancock Affiliated Fund, or who is involved in making securities recommendations to clients, or who has access to such recommendations that are nonpublic.
Automatic Investment Plan:
Means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan.
Beneficial Ownership:
Means the opportunity, directly or indirectly, to profit or share in any profit (for loss) derived from a Reportable Securities transaction. This includes Reportable Securities held by an Access Person's Household Family Member and Covered Securities held through certain family trusts, family custodial accounts, entities controlled by the Access Person, portfolios from which the Supervised Person may receive a performance fee, and other circumstances in which the Access Person may profit, directly or indirectly through any contract, arrangement, understanding, relationship, or otherwise, from transactions in the respective Reportable Securities, as defined further in Rule 16a-1 (a) (2) of the Securities Exchange Act of 1934.
Broad-Based Index:
For the purposed of this Code a Broad-Based Index will include the following:
•the S&P 100, S&P Midcap 400, S&P 500, FTSE 100, and Nikkei 225;
•Direct obligations of the U.S. Government (e.g., treasury securities)
•Indirect obligations of the U.S. Government with a maturity of less than 1 year (GNMA)
•Commodities;
•Foreign currency
Brokerage Account:
Any of your accounts:
•Which have the capability to hold Reportable Securities;
•Accounts of your spouse, Significant Other, minor children or family members sharing your household (together, "Household Members");
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•Accounts in which you or your Household Members have a Beneficial Ownership;
•Accounts over which you have discretion, give advice or information or have Power of Attorney (POA).
Covered Person:
Includes all "Access Persons" as defined under Securities and Exchange Commission (SEC) Rule 17j-1 under the Investment Company Act of 1940, as amended (the "1940 Act"), and "Supervised Persons" as defined under SEC Rule 204A-1 under the Investment Advisers Act of 1940, as amended (the "Advisers Act").
Household Family Member:
An Access Person's spouse, Significant Other, minor children, or other family member who also shares the same household as the Access Person.
Investment Professionals:
Means a Supervised Person who are either Portfolio Managers, Analysts, and Traders.
Involuntary Issuer Transaction:
Transaction where the account owner has not determined the timing as to when the purchase or sale transaction will occur or the amount of shares purchased or sold, i.e. making changes to existing positions or asset allocations within the John Hancock retirement plans, buying or selling shares of a Reportable Security, etc.
Involuntary Issuer Transactions include:
•transactions which result from a corporate action applicable to all similar security holders (such as splits, tender offers, mergers, stock dividends, etc.); or
•automatic dividend reinvestment and stock purchase plan acquisitions.
Please note: any transaction that overrides the pre-set schedule or allocations must be included in a quarterly transaction report.
John Hancock Affiliated Fund:
For the purposes of this Code, a John Hancock Affiliated Fund shall include both:
•a "John Hancock Mutual Fund" (i.e., a 1940 Act mutual fund that is advised or sub- advised by a John Hancock Adviser or by another Manulife entity); or
•"John Hancock Variable Product" (i.e., contracts funded by insurance company separate accounts that use one or more portfolios of John Hancock Variable Insurance Trust).
•Any other financial product or security advised or sub-advised by a John Hancock Adviser or John Hancock Insurance or another Manulife entity.
The definition for John Hancock Affiliated Fund does not include John Hancock money market funds. A list of John Hancock Affiliated Funds can be found on StarCompliance.
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John Hancock Variable Products:
Contracts funded by insurance company separate accounts that use one or more portfolios of John Hancock Variable Insurance Trust.
Managed Account:
Any account over which neither you nor a Household Family Member has direct or indirect influence or control and cannot a) suggest purchases or sales of investments to the trustee or third-party discretionary manager; b) direct purchases or sales of investments; or c) consult with the trustee or third-party discretionary manager as to the particular allocation of investments to be made in the account.
Private Placements:
Securities exempt from SEC registration under section 4(2), section 4(6) and/or rules 504 506 under the Securities Act.
Reportable Securities:
Means any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a "security", or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, or warrant or right to subscribe to or purchase any of the foregoing, except it should not include:
(i)Direct obligations of the Government of the United States;
(ii)Bankers' acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements;
(iii)Shares issued by money market funds;
(iv)Shares issued by open-end funds other than reportable funds; and
(v)Shares issued by unit investment trusts that are invested exclusively in one or more open-end funds, none of which are reportable funds.
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Please note: Reportable Securities includes both John Hancock Affiliated Funds and John Hancock Variable Products.
Securities Laws:
Means the Securities Act of 1933, as amended (the "Securities Act"), the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Investment Company Act of 1940, the Investment Advisers Act of 1940, Title V of the Gramm-Leach-Bliley Act, any rules adopted by the SEC under any of these statutes, the Bank Secrecy Act as it applies to funds and investment advisers, and any rules adopted there under by the SEC or the Department of the Treasury.
Significant Others:
Two people who (1) share the same primary residence; (2) share living expenses; and (3) are in a committed relationship and intend to remain in the relationship indefinitely.
Supervised Person:
Is defined by the Advisers Act to mean a partner, officer, director (or other person occupying a similar status or performing similar functions) or employee, as well as any other person who provides advice on behalf of the adviser and is subject to the adviser's supervision and control. However, in reliance on the Prudential no-action letter, John Hancock does not treat as a "Supervised Employee" any of its "non-advisory personnel", as defined below.
In reliance on the Prudential no-action letter, John Hancock treats as an "Advisory Person" any "Supervised Employee" who is involved, directly, or indirectly, in John Hancock Financial Services investment advisory activities, as well as any "Supervised Employee" who is an Access Person. John Hancock treats as "non-advisory personnel", and does not treat as a Supervised Person, those individuals who have no involvement, directly or indirectly, in John Hancock investment advisory activities, and who are not Access Persons.
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Preferred Brokers List
Preferred Brokers List While employed by John Hancock, you must maintain your Brokerage Accounts at one of the preferred brokers approved by John Hancock. The following are the preferred brokers:
Ameriprise |
Sanders Morris Harris |
Bank of Oklahoma |
Scottrade |
Bank of Texas |
Stifel |
Barclays Wealth Management |
TD Ameritrade |
Brave Warrior Advisors |
T. Rowe Price |
Charles Schwab |
Thompson Davis & Co. |
Chase Investment Services |
UBS |
Citigroup |
US Trust |
Constellation Wealth Management |
Vanguard |
Credit Suisse |
Robert W. Baird & Co. |
DB Alex Brown |
|
Edward Jones |
|
E*Trade |
|
Fidelity |
|
First Republic |
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Goldman Sachs Wealth Management |
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HSBC Private Bank |
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Interactive Brokers |
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JB Were |
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JP Morgan Private Bank |
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JP Morgan Securities |
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Lincoln Financial |
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Merrill Lynch & Bank of America |
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Morgan Stanley Private Wealth |
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Morgan Stanley Smith Barney |
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Northern Trust |
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Northern Trust Institutional |
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Oppenheimer & Co. |
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OptionsXpress |
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Pershing Advisor Solutions |
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Piper Jaffray |
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Raymond James |
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Revolution Capital |
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Compliance Contacts
Code of Ethics Contacts |
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Code of Ethics Administration Group |
INVDIVCodeofEthics@manulife.com |
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33
JOHN HANCOCK VARIABLE INSURANCE TRUST
JOHN HANCOCK FUNDS
JOHN HANCOCK FUNDS II
JOHN HANCOCK EXCHANGE-TRADED FUND TRUST
SARBANES-OXLEY CODE OF ETHICS
FOR
PRINCIPAL EXECUTIVE, PRINCIPAL FINANCIAL OFFICER & TREASURER
I.Covered Officers/Purpose of the Code
This code of ethics (this "Code") for John Hancock Variable Insurance Trust, John Hancock Funds1, and John Hancock Funds II, John Hancock Exchange-Traded Fund Trust and, each a registered management investment company under the Investment Company Act of 1940, as amended ("1940 Act"), which may issue shares in separate and distinct series (each investment company and series thereunder to be hereinafter referred to as a "Fund"), applies to each Fund's Principal Executive Officer ("President"), Principal Financial Officer ("Chief Financial Officer") and Treasurer ("Treasurer") (the "Covered Officers" as set forth in Exhibit A) for the purpose of promoting:
honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;
full, fair, accurate, timely and understandable disclosure in reports and documents that the Fund files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Fund;
compliance with applicable laws and governmental rules and regulations;
the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and
accountability for adherence to the Code.
1John Hancock Funds includes the following trusts: John Hancock Financial Opportunities Fund; John Hancock Bond Trust; John Hancock California Tax-Free Income Fund; John Hancock Capital Series; John Hancock Funds III; John Hancock Income Securities Trust; John Hancock Investment Trust; John Hancock Investment Trust II; John Hancock Investors Trust; John Hancock Municipal Securities Trust; John Hancock Premium Dividend Fund ; John Hancock Preferred Income Fund; John Hancock Preferred Income Fund II; John Hancock Preferred Income Fund III; John Hancock Sovereign Bond Fund; John Hancock Strategic Series; John Hancock Tax-Advantaged Dividend Income Fund; John Hancock Tax-Advantaged Global Shareholder Yield Fund; John Hancock Hedged Equity and Income Fund; and John Hancock Collateral Trust.
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Each of the Covered Officers should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.
II.Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest Overview
A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his service to, the Fund. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Fund. Certain conflicts of interest arise out of the relationships between the Covered Officers and the Fund and already are subject to conflict of interest provisions in the Investment Company Act of 1940, as amended (the "Investment Company Act") and the Investment Advisers Act of 1940, as amended (the "Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Fund because of their status as "affiliated persons" of the Fund. Each of the Covered Officers is an officer or employee of the investment adviser or a service provider ("Service Provider") to the Fund. The Fund's, the investment adviser's and the Service Provider's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code.
Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Fund and the investment adviser and the Service Provider of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Fund, for the investment adviser or for the Service Provider), be involved in establishing policies and implementing decisions which will have different effects on the investment adviser, the Service Provider and the Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Fund and the investment adviser and the Service Provider and is consistent with the performance by the Covered Officers of their duties as officers of the Fund. Thus, if such participation is performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, it will be deemed to have been handled ethically. In addition, it is recognized by the Fund's Board of Trustees/Directors (the "Board") that the Covered Officers may also be officers or employees of one or more other investment companies covered by other Codes.
Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but the Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Fund.
***
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Each Covered Officer must:
not use his/her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally to the detriment of the Fund;
not cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than for the benefit of the Fund; and
not use material non-public knowledge of portfolio transactions made or contemplated for the Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions.
Additionally, conflicts of interest may arise in other situations, the propriety of which may be discussed, if material, with the Fund's Chief Compliance Officer ("CCO"). Examples of these include:
serve as a director/trustee on the board of any public or private company;
the receipt of any non-nominal gifts;
the receipt of any entertainment from any company with which the Fund has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety (or other formulation as the Fund already uses in another code of conduct);
any ownership interest in, or any consulting or employment relationship with, any of the Fund's service providers, other than its investment adviser, any sub-adviser, principal underwriter, administrator or any affiliated person thereof; and
a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership.
III.Disclosure & Compliance
Each Covered Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Fund;
Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, whether within or outside the Fund, including to the Fund's directors and auditors, and to governmental regulators and self- regulatory organizations;
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Each Covered Officer should, to the extent appropriate within his/her area of responsibility, consult with other officers and employees of the Fund and the Fund's adviser or any sub-adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Fund files with, or submits to, the SEC and in other public communications made by the Fund; and
It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations.
IV. Reporting & Accountability
Each Covered Officer must:
upon adoption of the Code (or thereafter as applicable, upon becoming an Covered Officer), affirm in writing to the Fund's CCO that he/she has received, read, and understands the Code;
annually thereafter affirm to the Fund's CCO that he/she has complied with the requirements of the Code;
not retaliate against any employee or Covered Officer or their affiliated persons for reports of potential violations that are made in good faith;
notify the Fund's CCO promptly if he/she knows of any violation of this Code (Note: failure to do so is itself a violation of this Code); and
report at least annually any change in his/her affiliations from the prior year.
The Fund's CCO is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, any approvals or waivers sought by the Principal Executive Officer will be considered by the Fund's Board or the Compliance Committee thereof (the "Committee").
The Fund will follow these procedures in investigating and enforcing this Code:
the Fund's CCO will take all appropriate action to investigate any potential violations reported to him/her;
if, after such investigation, the CCO believes that no violation has occurred, the CCO is not required to take any further action;
any matter that the CCO believes is a violation will be reported to the Board or, if applicable, Compliance Committee;
if the Board or, if applicable, Compliance Committee concurs that a violation has occurred, the Board, either upon its determination of a violation or upon
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recommendation of the Compliance Committee, if applicable, will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the Service Provider or the investment adviser or its board; or a recommendation to dismiss the Registrant's Executive Officer;
the Board, or if applicable the Compliance Committee, will be responsible for granting waivers, as appropriate; and
any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules.
V.Other Policies & Procedures
This Code shall be the sole code of ethics adopted by the Fund for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Fund, the Fund's adviser, any sub- adviser, principal underwriter or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Fund's and its investment adviser's codes of ethics under Rule 204A-1 under the Investment Advisers Act and Rule 17j-1 under the Investment Company Act, respectively, are separate requirements applying to the Covered Officers and others and are not part of this Code.
VI. Amendments
Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Fund's Board, including a majority of independent directors.
VII. Confidentiality
All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Fund's Board and its counsel, the investment adviser and the relevant Service Providers.
VIII. Internal Use
The Code is intended solely for the internal use by the Fund and does not constitute an admission, by or on behalf of the Fund, as to any fact, circumstance, or legal conclusion.
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Exhibit A
Persons Covered by this Code of Ethics
(As of December 31, 2019)
John Hancock Variable Insurance Trust
Principal Executive Officer and President Andrew Arnott
Principal Financial Officer and Chief Financial Officer Charles Rizzo
Treasurer Salvatore Schiavone
John Hancock Funds
Principal Executive Officer and President Andrew Arnott
Principal Financial Officer and Chief Financial Officer Charles Rizzo
Treasurer Salvatore Schiavone
John Hancock Funds II
Principal Executive Officer and President Andrew Arnott
Principal Financial Officer and Chief Financial Officer Charles Rizzo
Treasurer Salvatore Schiavone
John Hancock Exchange-Traded Trust
Principal Executive Officer and President Andrew Arnott
Principal Financial Officer and Chief Financial Officer Charles Rizzo
Treasurer Salvatore Schiavone
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CERTIFICATION
I, Andrew Arnott, certify that:
1.I have reviewed this report on Form N-CSR of the John Hancock Financial Opportunities Fund (the "registrant");
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting, and
5.The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 11, 2021 |
/s/ Andrew Arnott |
|
Andrew Arnott |
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President |
CERTIFICATION
I, Charles A. Rizzo, certify that:
1.I have reviewed this report on Form N-CSR of the John Hancock Financial Opportunities Fund (the "registrant");
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting, and
5.The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 11, 2021 |
/s/ Charles A Rizzo_____________________ |
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Charles A. Rizzo |
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Chief Financial Officer |
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
In connection with the attached Report of John Hancock Financial Opportunities Fund (the "registrant") on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the registrant does hereby certify that, to the best of such officer's knowledge:
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant as of, and for, the periods presented in the Report.
/s/ Andrew Arnott
--------------------------------
Andrew Arnott President
Dated: February 11, 2021
/s/ Charles A. Rizzo
-------------------------------
Charles A. Rizzo Chief Financial Officer
Dated: February 11, 2021
A signed original of this written statement, required by Section 906, has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.
Manulife Investment Management Global Proxy Voting Policy and
Procedures
(External)
External Policy is available on https://www.manulifeim.com/institutional/ca/en
Manulife Investment Management Global Proxy Voting Policy and Procedures
Executive Summary
Each investment team at Manulife Investment Management ("Manulife IM")1 is responsible for investing in line with its investment philosophy and clients' objectives. Manulife IM's approach to proxy voting aligns with its organizational structure and encourages best practices in governance and management of environmental and social risks and opportunities. Manulife IM has adopted and implemented proxy voting policies and procedures to ensure that proxies are voted in the best interests of its clients for whom it has proxy voting authority.
This Global Proxy Voting Policy and Procedures ("Policy") applies to each of the Manulife IM advisory affiliates listed in Appendix A. In seeking to adhere to local regulatory requirements of the jurisdiction in which an advisory affiliate operates, additional procedures specific to that affiliate may be implemented to ensure compliance, where applicable. The Policy is not intended to cover every possible situation that may arise in the course of business, but rather to act as a decision-making guide. It is therefore subject to change and interpretation from time-to-time as facts and circumstances dictate.
Statement of Policy
•The right to vote is a basic component of share ownership and is an important control mechanism to ensure that a company is managed in the best interests of its shareholders. Where clients delegate proxy voting authority to Manulife IM, Manulife IM has a fiduciary duty to exercise voting rights responsibly.
•Where Manulife IM is granted and accepts responsibility for voting proxies for client accounts, it will seek to ensure proxies are received and voted in the best interests of the client with a view to maximize the economic value of their equity securities, unless it determines that it is in the best interests of the client to refrain from voting a given proxy.
•If there is any potential material proxy-related conflict of interest between Manulife IM and its clients, identification and resolution processes are in place to provide for determination in the best interests of the client.
•Manulife IM will disclose information about its proxy voting policies and procedures to its clients.
•Manulife IM will maintain certain records relating to proxy voting.
1Manulife Investment Management is the unified global brand for Manulife's Global Wealth and Asset Management (GWAM) business which serves individual investors and institutional clients in three businesses: Retirement, Retail and Institutional Asset Management (Public Markets and Private Markets)
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Manulife Investment Management Global Proxy Voting Policy and Procedures
Philosophy on Sustainable Investing
Manulife IM's commitment to sustainable investment2 is focused on protecting and enhancing the value of our clients' investments and, as active owners in the companies in which we invest, we believe that voting at shareholder meetings can contribute to the long-term sustainability of our investee companies. Manulife IM will seek to exercise the rights and responsibilities associated with equity ownership, on behalf of its clients, with a focus on maximizing long-term shareholder returns, as well as enhancing and improving the operating strength of the companies to create sustainable value for shareholders.
Manulife IM invests in a wide range of securities across the globe, ranging from large multinationals to smaller early stage companies, and from well-developed markets to emerging and frontier markets. Expectations of those companies vary by market to reflect local standards, regulations and laws. Manulife IM believes, however, that successful companies across regions are generally better positioned over the long-term if they have:
•Robust oversight including a strong and effective board with independent and objective leaders working on behalf of shareholders;
•Mechanisms to mitigate risk such as effective internal controls, board expertise covering a firm's unique risk profile, and routine use of KPIs to measure and assess long-term risks;
•A management team aligned with shareholders through remuneration structures that incentivize long- term performance through the judicious and sustainable stewardship of company resources;
•Transparent and thorough reporting of the components of the business that are most significant to shareholders and stakeholders with focus on the firm's long-term success and,
•Management focused on all forms of capital including environmental, social and human capital.
The Manulife Investment Management Voting Principles ("Voting Principles") outlined in Appendix B provide guidance for our voting decisions. An active decision to invest in a firm reflects a positive conviction in the investee company and we generally expect to be supportive of management for that reason. Manulife IM may seek to challenge management's recommendations, however, if they contravene these Voting Principles or Manulife IM otherwise determines that doing so is in the best interest of itsclients.
Manulife IM also regularly engages with boards and management on environmental, social or corporate governance issues consistent with the principles stipulated in our Sustainable Investing Statement and our ESG
2Further information on Sustainable Investing at Manulife IM can be found at manulifeim.com/institutional.
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Manulife Investment Management Global Proxy Voting Policy and Procedures
Engagement Policy. Manulife IM may, through these engagements, request certain changes of the portfolio company to mitigate risks or maximize opportunities. In the context of preparing for a shareholder meeting, Manulife IM will review progress on requested changes for those companies engaged. In an instance where Manulife IM determines that the issuer has not made sufficient improvements on an issue, then we may take voting action to demonstrate our concerns.
In rare circumstances Manulife IM may consider filing, or co-filing, a shareholder resolution at an investee company. This may occur where our team has engaged with management regarding a material sustainability risk or opportunity, and where we determine that the company has not made satisfactory progress on the matter within a reasonable time period. Any such decision will be in the sole discretion of Manulife IM and acted on where we believe filing, or co-filing, a proposal is in the best interests of our clients.
Manulife IM may also divest of holdings in a company where Portfolio Managers are dissatisfied with company financial performance, strategic direction and/or management of material sustainability risks or opportunities.
Procedures
Receipt of Ballots and Proxy Materials
Proxies received are reconciled against the client's holdings, and the custodian bank will be notified if proxies have not been forwarded to the proxy service provider when due.
Voting Proxies
Manulife IM has adopted the Voting Principles contained in Appendix B of this Policy.
Manulife IM has deployed the services of a proxy voting services provider to ensure the timely casting of votes, and to provide relevant and timely proxy voting research to inform our voting decisions. Manulife IM periodically reviews the detailed policies created by the proxy voting service provider to ensure consistency with our Voting Principles, to the extent this is possible.
Portfolio managers actively review voting options and make voting decisions for their holdings. Where Manulife IM holds a significant ownership position in an issuer, the rationale for a portfolio manager's voting decision is specifically recorded, including whether the vote cast aligns with the recommendations of the proxy voting services provider or has been voted differently. A significant ownership position in an investment is defined as those cases where Manulife IM holds at least 2% of a company's issued share capital in aggregate across all Manulife IM client accounts.
The Manulife IM ESG Research and Integration Team ("ESG Team") is an important resource for portfolio management teams on proxy matters. This team provides advice on specific proxy votes for individual issuers if needed. ESG Team advice is supplemental to the research and recommendations provided by our proxy voting services provider. In particular, ESG analysts actively review voting resolutions for companies in which:
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Manulife Investment Management Global Proxy Voting Policy and Procedures
•Manulife IM's aggregated holdings across all client accounts represent 2% or greater of issued capital;
•A meeting agenda includes shareholder resolutions related to environmental and social risk management issues, or where the subject of a shareholder resolution is deemed to be material to our investment decision; or
•The issuer has been engaged by Manulife IM within the past two years seeking a change in behavior.
After review, the ESG Team may provide research and advice to investment staff in line with the Voting Principles.
Manulife IM also has an internal Proxy Voting Working Group ("Working Group") comprising senior managers from across Manulife IM including the equity investment team, Legal, Compliance, and the ESG Team. The Working Group operates under the auspices of the Manulife IM Public Markets Sustainable Investing Committee. The Working Group regularly meets to review and discuss voting decisions on shareholder proposals or instances where a portfolio manager recommends a vote different than the recommendation of the proxy voting services provider.
Manulife IM clients retain the authority, and may choose, to lend shareholdings. Manulife IM, however, generally retains the ability to recall shares in order to execute proxy votes. Manulife IM will, where feasible, weigh the benefit of casting votes at a given meeting when deciding whether to recall lent shares for voting.
Manulife IM may refrain from voting a proxy where we have agreed with a client in advance to limit the situations in which we will execute votes. Manulife may also refrain from voting due to logistical considerations that may have a detrimental effect on our ability to vote. These issues may include, but are not limited to:
•Costs associated with voting the proxy exceed the expected benefits to clients;
•Underlying securities have been lent out pursuant to a client's securities lending program and have not been subject to recall;
•Short notice of a shareholder meeting;
•Requirements to vote proxies in person;
•Restrictions on a non-national's ability to exercise votes, determined by local market regulation;
•Restrictions on the sale of securities in proximity to the shareholder meeting (i.e. "share blocking");
•Requirements to disclose commercially sensitive information that may be made public (i.e. "re- registration");
•Requirements to provide local agents with power of attorney to facilitate the voting instructions (such proxies are voted on a best-efforts basis); or
•Inability of a client's custodian to forward and process proxies electronically.
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Manulife Investment Management Global Proxy Voting Policy and Procedures
If a Manulife IM portfolio manager believes it is in the best interest of a client to vote proxies in a manner inconsistent with the Policy, the portfolio manager will submit new voting instructions to a member of the ESG Team with rationale for the new instructions. The ESG Team will then support the portfolio manager in developing voting decision rationale that aligns with this Policy and the Voting Principles. The ESG Team will then submit the vote change to the Working Group. The Working Group will review the change and ensure that the rationale is sound, and the decision will promote the long-term success of the issuer.
On occasion, there may be proxy votes which are not within the research and recommendation coverage universe of the proxy voting service provider. Portfolio managers responsible for the proxy votes will provide voting recommendations to the ESG Team and those items may be escalated to the Working Group for review to ensure that the voting decision rationale is sound, and the decision will promote the long-term success of the issuer. the Manulife IM Proxy Operations Team will be notified of the voting decisions and execute the votes accordingly.
Manulife IM does not engage in the practice of "empty voting" (a term embracing a variety of factual circumstances that result in a partial, or total, separation of the right to vote at a shareholders meeting from beneficial ownership of the shares on the meeting date). Manulife IM prohibits investment managers from creating large hedge positions solely to gain the vote while avoiding economic exposure to the market. Manulife IM will not knowingly vote borrowed shares (for example, shares borrowed for short sales and hedging transactions).
Engagement of the Proxy Voting Service Provider
Manulife IM has contracted with a third-party proxy service provider to assist with the proxy voting process. Except in instances where a client retains voting authority, Manulife IM will instruct custodians of client accounts to forward all proxy statements and materials received in respect of client accounts to the proxy service provider.
Manulife IM has engaged its proxy voting service provider to:
•Research and make voting recommendations;
•Ensure proxies are voted and submitted in a timely manner;
•Perform other administrative functions of proxy voting;
•Maintain records of proxy statements and provide copies of such proxy statements promptly upon request;
•Maintain records of votes cast; and
•Provide recommendations with respect to proxy voting matters in general.
Scope of Proxy Voting Authority
Manulife IM and our clients shape the proxy voting relationship by agreement provided there is full and fair disclosure and informed consent. Manulife IM may agree with clients to other proxy voting arrangements in which
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Manulife Investment Management Global Proxy Voting Policy and Procedures
Manulife IM does not assume proxy voting responsibility or will only vote in limited circumstances.3
While the application of our fiduciary duty in the context of proxy voting will vary with the scope of the voting authority we assume, we acknowledge the relationship in all cases remains that of a fiduciary to the client. Beyond the general discretion retained by Manulife IM to withhold from voting as outlined above, Manulife IM may enter a specific agreement with a client not to exercise voting authority on certain matters where the cost of voting would be high or the benefit to the client would be low.
Disclosure of Proxy Votes
Manulife IM may inform company management of our voting intentions ahead of casting the vote. This is in line with Manulife IM's objective to provide the opportunity for companies to better understand our investment process, policies and objectives.
We will not intentionally disclose to anyone else, including other investors, our voting intention prior to casting the vote.
Manulife IM keeps records of proxy voting available for inspection by clients, regulatory authorities or government agencies.
Manulife IM will annually disclose voting records aggregated across funds.
Conflicts of Interest
Manulife IM has an established infrastructure designed to identify conflicts of interest throughout all aspects of the business. Proxy voting proposals may raise conflicts between the interests of Manulife IM's clients and the interests of Manulife IM, its affiliates, or employees. Apparent conflicts are reviewed by the Working Group to determine whether there is a conflict of interest and, if so, whether the conflict is material. Manulife IM shall consider any of the following circumstances a potential material conflict of interest:
•Manulife IM has a business relationship or potential relationship with the issuer;
•Manulife IM has a business relationship with the proponent of the proxy proposal; or
•Manulife IM members, employees or consultants have a personal or other business relationship with managers of the business such as top-level executives, corporate directors or director candidates.
3We acknowledge SEC guidance on this issue from August 2019 which lists several non-exhaustive examples of possible voting arrangements between the client and investment advisor including: (i) an agreement with the client to exercise voting authority pursuant to specific parameters designed to serve the client's best interest; (ii) an agreement with the client to vote in favor of all proposals made by particular shareholder proponents; or (iii) an agreement with the client to vote in accordance with the voting recommendations of management of the issuer. All such arrangements could be subject to conditions depending on instruction from the client.
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Manulife Investment Management Global Proxy Voting Policy and Procedures
In addressing any such potential material conflict Manulife IM will seek to ensure proxy votes are cast in the advisory client's best interests and are not affected by Manulife IM's potential conflict. In the event a potential material conflict of interest exists, the Working Group or its designee will either (i) review the proxy voting decisions to ensure robust rationale, that the voting decision will protect or enhance shareholder value over the long-term, and is in line with the best interest of the client; (ii) vote such proxy according to the specific recommendation of the proxy voting services provider; (iii) abstain; or (iv) request the client vote such proxy. The basis for the voting decision, including the process for the determination of the decision that is in the best interests of the client, is recorded.
Voting Shares of Manulife Financial Corporation
Manulife Financial Corporation ("MFC") is the publicly listed parent company of Manulife IM. Generally, legislation restricts the ability of a public company (and its subsidiaries) to hold shares in itself within its own accounts. Accordingly, the MFC Share Investment Policy outlines the limited circumstances in which MFC or its subsidiaries may, or may not, invest or hold shares in MFC on behalf of MFC or its subsidiaries.4
The MFC Share Investment Policy does not apply to investments made on behalf of unaffiliated third parties, which remain assets of the client.5 Such investing may be restricted, however, by specific client guidelines, other Manulife policies or other applicable laws.
Where Manulife IM is charged with voting MFC shares we will execute votes in proportion with all other shareholders (i.e. proportional or 'echo' vote). This is intended to neutralize the effect of our vote on the meeting outcome.
Policy Responsibility and Oversight
The Working Group oversees and monitors the Policy and Manulife IM's proxy voting function. The Working Group is responsible for reviewing regular reports, potential conflicts of interest, vote changes and non-routine proxy voting items. The Working Group also oversees the third-party proxy voting service provider. The Working Group will meet at least monthly and report to the Manulife IM Public Markets Sustainable Investing Committee and, where requested, the Manulife IM Operating Committee.
Manulife IM's Proxy Operations Team is responsible for the daily administration of the proxy voting process for all Manulife IM operations that have contracted with a third-party proxy voting services provider. Significant proxy voting issues identified by Manulife IM's Proxy Operations Team are escalated to the Chief Compliance Officer or its designee, and the Working Group.
4This includes general funds, affiliated segregated funds or separate accounts, and affiliated mutual / pooled funds.
5This includes assets managed or advised for unaffiliated third parties, such as unaffiliated mutual/pooled funds and unaffiliated institutional advisory portfolios.
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The Working Group is responsible for the proper oversight of any service providers hired by Manulife IM to assist it in the proxy voting process. This oversight includes:
Annual Due Diligence: Manulife IM conducts an annual due diligence review of the proxy voting research service provider. This oversight includes an evaluation of the service provider's industry reputation, points of risk, compliance with laws and regulations and technology infrastructure. Manulife IM also reviews the provider's capabilities to meet Manulife IM's requirements including reporting competencies; the adequacy and quality of the proxy advisory firm's staffing and personnel; the quality and accuracy of sources of data and information; the strength of policies and procedures that enable it to make proxy voting recommendations based on current and accurate information; and the strength of policies and procedures to address conflicts of interest of the service provider related to its voting recommendations.
Regular Updates: Manulife also requests that the proxy voting research service provider deliver updates regarding any business changes that alter that firm's ability to provide independent proxy voting advice and services aligned with our policies.
Additional Oversight in Process: Manulife IM has additional control mechanisms built into the proxy voting process to act as checks on the service provider and ensure that decisions are made in the best interest of our clients. These mechanisms include:
•Sampling pre-populated votes: Where we utilize a third-party research provider for either voting recommendations or voting execution (or both), we may assess "pre-populated" votes shown on the vendor's electronic voting platform before such votes are cast to ensure alignment with the Voting Principles.
•Consideration of additional information: Where Manulife IM utilizes a proxy service provider for voting recommendations, we consider additional information that may become available regarding voting items. This additional information may include filings by an issuer or shareholder proponent that are issued subsequent to the filing of meeting materials.
•Decision scrutiny from the Working Group: Where our voting policies and procedures do not address how to vote on a particular matter, or where the matter is highly contested or controversial (e.g. major acquisitions involving takeovers or contested director elections where a shareholder has proposed its own slate of directors), review by the Working Group may be necessary or appropriate to ensure votes cast on behalf of its client are cast in the client's best interest.
Record Keeping and Reporting
Manulife IM provides clients with a copy of the Voting Policy upon request and it is also available on our website at manulifeim.com/institutional. Manulife IM describes its proxy voting procedures to its clients in the relevant or
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required disclosure document and discloses to its clients the process to obtain information on how Manulife IM voted that client's proxies.
Manulife IM keeps records of proxy voting activities and those records include proxy voting policies and procedures, records of votes cast on behalf of clients, records of client requests for proxy voting information; and any documents generated in making a vote decision. These documents are available for inspection by clients, regulatory authorities or government agencies.
Manulife IM will disclose voting records on its website and those records will be updated on an annual basis. The voting records will generally reflect the voting decisions made for retail, institutional and other client funds in the aggregate.
Policy Amendments and Exceptions
This policy is subject to periodic review by the Proxy Voting Working Group. The Working Group may suggest amendments to this Policy and any such amendments must be approved by the Manulife IM Public Markets Sustainable Investing Committee and the Manulife IM Operating Committee.
Any deviation from this Policy will only be permitted with the prior approval of the Chief Investment Officer or Chief Administrative Officer (or their designee), with the counsel of the Chief Compliance Officer / General Counsel.
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APPENDIX A Manulife IM Advisory Affiliates in Scope of Policy
+Investment management business only.
Manulife Investment Management Limited
Manulife Investment Management (North America) Limited
Manulife Investment Management (Hong Kong) Limited
PT Manulife Aset Manajemen Indonesia*
Manulife Investment Management (Japan) Limited
Manulife Investment Management (Malaysia) Bhd.
Manulife Investment Management and Trust Corporation
Manulife Investment Management (Singapore) Pte. Ltd.
Manulife IM (Switzerland) LLC
Manulife Investment Management (Taiwan) Co., Ltd.*
Manulife Investment Management (Europe) Limited
Manulife Investment Management (US) LLC
Manulife Investment Fund Management (Vietnam) Company Limited*
*By reason of certain local regulations and laws with respect to voting, e.g.: manual/physical voting processes or the absence of a third-party proxy voting service provider for those jurisdictions, Manulife Investment Fund Management (Vietnam) Company Limited, and PT Manulife Aset Manajemen Indonesia do not engage a third- party service provider to assist in their proxy voting processes. Manulife Investment Management (Taiwan) Co., Ltd. Uses the third-party proxy voting service provider to execute votes for non-Taiwanese entities only.
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Manulife Investment Management Global Proxy Voting Policy and Procedures
APPENDIX B Manulife IM Voting Principles
Manulife Investment Management ("Manulife IM") believes that strong management of all forms of corporate capital, whether financial, social or environmental will mitigate risks, create opportunities and drive value over the long-term. Manulife IM reviews and considers environmental, social and corporate governance risks and opportunities in our investment decisions. Once invested, Manulife IM continues its oversight through active ownership which includes portfolio company engagement and proxy voting of underlying shares. We believe proxy voting is a vital component of this continued oversight as it provides a voice for minority shareholders regarding management actions.
Manulife IM has developed some key principles that drive our proxy voting decisions and engagements. We believe these principles preserve value and generally lead to outcomes that drive positive firm performance. These principles dictate our voting on issues ranging from director elections and executive compensation to the preservation of shareholder rights and stewardship of environmental and social capital. The facts and circumstances of each issuer are unique, and Manulife IM may deviate from these principles where we believe doing so will preserve or create value over the long-term. These principles also do not address the specific content of all proposals voted around the globe, but provide a general lens of value preservation, value creation, risk management and protection of shareholder rights through which Manulife IM analyzes all voting matters.
I.Boards and Directors: Manulife IM uses the following principles to review proposals covering director elections and board structure in the belief that they encourage engaged and accountable leadership of a firm.
a.Board Independence: The most effective boards are composed of directors with a diverse skill set that can provide an objective view of the business, oversee management, and make decisions in the best interest of the shareholder body at large. To create and preserve this voice, boards should have a significant number of non-executive, independent directors. The actual number of independent directors can vary by market and Manulife IM accounts for these differences when reviewing the independence of the board. Ideally, however, there is an independent majority among directors at a given firm.
b.Committee Independence: Manulife IM also prefers that key board committees are composed of independent directors. Specifically, the audit, nomination and compensation committees should be entirely or majority composed of independent directors.
c.Attendance: A core part of a director's duties is to remain an engaged and productive participant at board and committee meetings. Directors should, therefore, attend at least 75% of board and committee meetings in the aggregate over the course of a calendar year.
d.Gender Diversity: In line with the principles expressed in relation to 'Board Independence' above,
Manulife IM believes boards with strong gender representation are better equipped to manage
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risks and oversee business resilience over the long-term compared to firms with low gender balance. Manulife IM generally expects boards to have at least one woman on the board and encourages companies to aspire to a higher balance of gender representation.
e.Classified/Staggered Boards: Manulife IM prefers that directors be subject to election and re- election on an annual basis. Annual elections operate to hold directors accountable for their actions in a given year in a timely manner. Shareholders should have the ability to voiceconcerns through a director vote and to potentially remove problematic directors if necessary. Manulife IM generally opposes the creation of classified or staggered director election cycles designed to extend director terms beyond one year. Manulife IM also supports proposals to eliminate these structures.
f.Overboarding: Manulife IM believes directors should limit their outside board seats in order to ensure that they have the time and attention to provide their director role at a firm in question. Generally, this means directors should not sit on more than 5 public company boards. The role of CEO requires an individual's significant time and attention. Directors holding the role of CEO at any public firm, therefore, should not sit on more than 3 public company boards inclusive of the firm at which they hold the CEO role.
g.Independent Chair/CEO: Governance failures can occur where a manager has firm control over a board through the combination of the Chair/CEO roles. Manulife IM generally supports the separation of the Chair/CEO roles as a means to prevent board 'capture' by management. We will evaluate proposals to separate the Chair/CEO roles on a case-by-case basis, for example, however considering such factors as the establishment of a strong lead independent director role or the temporary need for the combination of the CEO/Chair roles to help the firm through a leadership transition.
h.Vote Standard: Manulife IM supports a vote standard that allows resolutions to pass, or fail, based on a majority voting standard. Manulife IM expects companies to adopt a majority vote standard for director elections and supports the elimination of a plurality vote standard except in the case of contested elections.
i.Contested Elections: Where there is a proxy contest or a director's election is otherwise contested, Manulife IM evaluates the proposals on a case-by-case basis. Consideration is given to firm performance, whether there have been significant failures of oversight, and whether the proponent for change makes a compelling case that board turnover will drive firm value.
j.Significant and Problematic Actions or Omissions: Manulife IM believes boards should be held accountable to shareholders in instances where there is a significant failure of oversight that has led to a loss of firm value or otherwise curtailed shareholder rights. Manulife IM considers
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withholding from, or voting against, certain directors where the board acted, or failed to act, in a way that significantly affected shareholder rights or otherwise negatively affected firm value. Some examples of actions that might warrant a vote against directors include, but are not limited to, the following:
i.Failure of Oversight: Manulife IM may take action against directors where there has been a significant negative event leading to a loss of shareholder value and stakeholder confidence. A failure may manifest itself in multiple ways including adverse auditor opinions, material misstatements, failures of leadership and governance and environmental or human rights violations.
ii.Adoption of Anti-Takeover Mechanism: Boards should generally review takeover offers independently and objectively in consideration of the potential value created or lost for shareholders. Manulife IM holds boards accountable when they create or prolong certain mechanisms, bylaws or article amendments that act to frustrate genuine offers that may lead to value creation for shareholders. These can include 'poison pills'; classes of shares with differential voting rights; classified, or staggered, board structures; unilateral bylaw amendments and supermajority voting provisions.
iii.Problematic Executive Compensation Practices: Manulife IM encourages companies to adopt best practices for executive compensation in the markets in which they operate. Generally, this means that pay should be aligned with performance. Manulife IM may hold directors accountable where this alignment is not robust. We may also hold boards accountable where they have not adequately responded to shareholder votes against a previous proposal on remuneration or have adopted problematic agreements or practices (e.g. 'golden parachutes', repricing of options).
iv.Bylaw/ Article Adoption and Amendments: Shareholders should have the ability to vote on any change to company articles or bylaws that will materially change their rights as shareholders. Any amendments should require only a majority of votes to pass. Manulife IM will hold directors accountable where a board has amended or adopted bylaw and/or article provisions that significantly curtail shareholder rights.
v.Engagement Responsiveness: Manulife IM regularly engages with issuers to discuss ESG risks and opportunities and may request changes from firms during these discussions. Manulife IM may vote against certain directors where we have engaged with an issuerand requested certain changes, but the firm has not made sufficient progress on those matters.
II.Environmental and Social Proposals: Manulife IM expects its portfolio companies to manage material environmental and social issues affecting its business, whether risks or opportunities, with a view towards
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long-term value preservation and creation.6 Manulife IM expects firms to identify material environmental and social risks and opportunities specific to their business, to develop strategies to manage those matters, and to provide meaningful, substantive reporting while demonstrating progress year-over-year against their plans. Proposals touching on management of risks and opportunities related to environmental and social issues are often put forth as shareholder proposals but can be proposed by management as well. Manulife IM reviews these proposals on a case-by-case basis considering, among other factors:
a.The Magnitude of the Risk/Opportunity: Manulife IM evaluates the level of materiality of a certain environmental or social issue identified in a proposal as it pertains to the firm's ability to generate value over the long-term. This review includes deliberation of the effect an issue will have on the financial statements and/or the cost of capital.
b.The Firm's Current Management of the Risk/Opportunity: Manulife IM analyzes a firm's current approach to an issue to determine whether the firm has robust plans, infrastructure and reporting to mitigate the risk or embrace the opportunity.
c.Firm's Current Disclosure Framework: Manulife IM expects firms to disclose enough information for shareholders to assess the company's management of environmental and social risks and opportunities material to the business. Manulife IM may support proposals calling for enhanced firm disclosure regarding environmental and social issues where additional information would help our evaluation of a company's exposure, and response, to those factors.
d.Legislative or Regulatory Action of a Risk/Opportunity: When reviewing proposals on environmental or social factors, Manulife IM considers whether a given risk or opportunity is currently addressed by local regulation or law in the markets in which a firm operates and whether those rules are designed to adequately manage an issue. Manulife IM also considers whether a firm should proactively address a matter in anticipation of future legislation or regulation.
e.Cost to, or Disruption of, the Business: When reviewing environmental and social proposals Manulife IM assesses the potential cost of the requested action against the benefit provided to the firm and its shareholders. Particular attention is paid to proposals that request actions that are overly prescriptive on management or that request a firm exit markets or operations that are essential to its business.
III.Shareholder Rights: Manulife IM generally supports management or shareholder proposals that protect, or improve, shareholder rights and opposes proposals that remove, or curtail, existing rights.
6For more information on issues generally of interest to our firm please see the Manulife Investment Management Engagement Policy and the Manulife Investment Management Sustainable Investing Policy.
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a.Shareholder Rights Plans ("Poison Pills"): Manulife IM opposes mechanisms intended to frustrate genuine takeover offers. Manulife IM may, however, support shareholder rights plans where the plan has a trigger of 20% ownership or more and will expire in three years or less. In conjunction with these requirements Manulife IM evaluates the company's strategic rationale for adopting the poison pill.
b.Supermajority Voting: Shareholders should have the ability to direct change at a firm based on a majority vote. Manulife IM opposes the creation, or continuation, of any bylaw, charter or article provisions that require approval of more than a majority of shareholders for amendment of those documents. Manulife IM may consider supporting such a standard where the supermajority requirement is intended to protect minority shareholders.
c.Proxy Access: Manulife IM believes that shareholders have a right to appoint representatives to the board that best protect their interests. The power to propose nominees without holding a proxy contest is a way to protect that right and is potentially less costly to management and shareholders. Accordingly, Manulife IM supports creation of a proxy access right (or similar power at non-U.S. firms) provided there are reasonable thresholds of ownership and a reasonable number of shareholders can aggregate ownership to meet those thresholds.
d.Written Consent: Written consent provides shareholders the power to formally demand board action outside of the context of an annual general meeting. Shareholders can use written consent as a nimble method of holding boards accountable. Manulife IM supports the right of written consent so long as that right is reasonably tailored to reflect the will of a majority of shareholders. Manulife IM may not support such a right, however, where there is a holder with a significant, or controlling, stake. Manulife IM evaluates the substance of any written actual consent proposal in- line with these principles.
e.Right to Call a Special Meeting: Manulife IM is supportive of the shareholder right to call a special meeting. This right allows shareholders to quickly respond to events which can significantly affect firm value. Manulife IM believes that a 10% ownership threshold to call a special meeting reasonably protects this shareholder right while reducing the possibility of undue distraction for management.
IV. Executive Compensation: Manulife IM encourages companies to align executive incentives with shareholder interests when designing executive compensation plans. Companies should provide shareholders with transparent, comprehensive and substantive disclosure regarding executive compensation that aids shareholder assessment of the alignment between executive pay and firm performance. Companies should also have the flexibility to design remuneration programs that fit a firm's business model, business sector and industry and overall corporate strategy. No one template of executive remuneration can fit all companies.
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a.Advisory Votes on Executive Compensation: While acknowledging that there is no singular model for executive compensation, Manulife IM scrutinizes companies closely that have certain practices. Some concerning practices can include:
i.Misalignment Between Pay and Company Performance: Pay should generally move in tandem with corporate performance. Firms where CEO pay remains flat, or increases, though corporate performance remains down relative to peers are particularly concerning.
ii.One-Time Grants: A firm's one-time grant to an executive, outside of the normal salary, bonus and long-term award structure, may be indicative of an overall failure of the board to design an effective remuneration plan. A company should have a robust justification for making grants outside of the normal remuneration framework.
iii.Significant Quantity of Non-Performance Based Pay: Executive pay should generally be weighted more heavily towards performance-based remuneration to create the alignment between pay and performance. Companies should provide a robust explanation for any significant awards made that vest solely based on time or are not otherwise tied to performance.
iv.Lack of Rigor in Performance Targets: Performance targets should challenge managers to improve corporate performance and outperform peers. Targets should, where applicable, generally align with, or even outpace, guidance; incentivize outperformance against a peer group; and otherwise remain challenging.
v.Lack of Disclosure: Transparency is essential to shareholder analysis and understanding of executive remuneration at a company. Manulife IM expects firms to clearly disclose all major components of remuneration. This includes disclosure of amounts, performance metrics and targets, vesting terms, and pay outcomes.
vi.Repricing of Options: Resetting the exercise price of outstanding options significantly undermines the incentive nature of the initial option grant. Though a firm may have a strong justification for repricing options, Manulife IM believes that firms should put such decisions to a shareholder vote. Manulife IM may oppose an advisory vote on executive compensation where a company has repriced outstanding options for executives without that shareholder approval.
vii.Adoption of Problematic Severance Agreements ("Golden Parachutes"): Manulife IM believes managers should be incentivized to pursue and complete transactions that may benefit shareholders. Severance agreements, if structured appropriately, can provide such inducements. At the same time, however, the significant payment associated with severance agreements could potentially drive managers to pursue transactions at the
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expense of shareholder value. Manulife IM may oppose an executive remuneration proposal where a firm has adopted, or amended, an agreement with an executive that contains an excise tax gross-up provision, permits accelerated vesting of equity upon a change-in- control, allows an executive to unilaterally trigger the severance payment, or pays out in an amount greater than 300% of salary and bonus combined.
V.Capital Structure: Manulife IM believes firms should balance the need to raise capital and encourage investment with the rights and interests of the existing shareholder body. Evaluation of proposals to issue shares, repurchase shares, conduct stock splits or otherwise restructure capital are evaluated on a case- by-case basis with some specific requests covered here:
a.Common Stock Authorization: Requests to increase the pool of shares authorized for issuance are evaluated on a case-by-case basis with consideration given to the size of the current pool, recent use of authorized shares by management, and the company rationale for the proposed increase. Manulife IM also supports these increases where the company intends to execute a split of shares or pay a stock dividend.
b.Reverse Stock Splits: Manulife IM generally supports proposals for a reverse stock split if the company plans to proportionately reduce the number of shares authorized for issue in order to mitigate against the risk of excessive dilution to our holdings. We may also support these proposals in instances where the firm needs to quickly raise capital in order to continue operations.
c.Dual Class Voting Structure: Voting power should align with economic interest at a given firm. Manulife IM opposes the creation of new classes of stock with differential voting rights and supports the elimination of these structures.
VI. Corporate Transactions and Restructurings: Manulife IM reviews mergers, acquisitions, restructurings and reincorporations on a case-by-case basis through the lens of whether the transaction will create shareholder value. Considerations include fairness of the terms, valuation of the event, changes to management and leadership, realization of synergies and efficiencies and whether the rationale for a strategic shift is compelling.
VII. Audit-related Issues: Manulife IM believes that an effective auditor will remain independent and objective in their review of company reporting. Firms should be transparent regarding auditor fees and other services provided by an auditor which may create a conflict of interest. Manulife IM uses the below principles to guide voting decisions related to auditors.
a.Auditor Ratification: Manulife IM generally approves the reappointment of the auditor absent evidence that they have either failed in their duties or appear to have a conflict that may not allow independent and objective oversite of a firm.
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b.Auditor Rotation: If Manulife IM believes that the independence and objectivity of an auditor may be impaired at a firm, we may support a proposal requesting a rotation of auditor. Reasons to support the rotation of the auditor can include a significant failure in the audit function and excessive tenure of the auditor at the firm.
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JOHN HANCOCK FUNDS1
NOMINATING AND GOVERNANCE COMMITTEE CHARTER
Overall Role and Responsibility
The Nominating and Governance Committee (the "Committee") of each of the Trusts shall (1) make determinations and recommendations to the Board of Trustees (the "Board") regarding issues related to (a) the composition of the Board and (b) corporate governance matters applicable to the Trustees who are not "interested persons" as defined in the Investment Company Act of 1940, as amended (the "1940 Act"), of any of the Trusts, or of any Fund's investment adviser, subadviser or principal underwriter and who are "independent" as defined in the rules of the New York Stock Exchange ("NYSE") (the "Independent Trustees") and (2) discharge such additional duties, responsibilities and functions as are delegated to it from time to time.
Membership
The Nominating and Governance Committee (the "Committee") shall be composed of all of the Independent Trustees of the Board. One member of the Committee shall be appointed by the Board as Chair of the Committee. The chair shall be responsible for leadership of the Committee, including scheduling meetings or reviewing and approving the schedule for them, preparing agendas or reviewing and approving them before meetings, presiding over meetings of the Committee and making reports to the full Board, as appropriate.
Structure, Operations and Governance
Meetings and Actions by Written Consent. The Committee shall meet as often as required or as the Committee deems appropriate, with or without management present. Meetings may be called and notice given by the Committee chair or a majority of the members of the Committee. Members may attend meetings in person or by telephone. The Committee may act by written consent to the extent permitted by law and the Funds' governing documents. The Committee shall report to the Board on any significant action it takes not later than the next following Board meeting.
Required Vote and Quorum. The affirmative vote of a majority of the members of the Committee participating in any meeting of the Committee at which a quorum is present is necessary for the adoption of any resolution. At least a majority of the Committee members present at the meeting in person or by telephone shall constitute a quorum for the transaction of business.
1"John Hancock Funds" includes each trust and series as may be amended from time to time (each individually, a "Trust," and collectively, the "Trusts," and each series thereof, a "Portfolio" or "Fund," and collectively, the "Portfolios" or "Funds").
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Delegation to Subcommittees. The Committee may delegate any portion of its authority to a subcommittee of one or more members.
Appropriate Resources and Authority. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain special counsel and other advisers, experts or consultants, at the Funds' expense, as it determines necessary or appropriate to carry out its duties and responsibilities. In addition, the Committee shall have direct access to such officers of and service providers to the Funds as it deems desirable.
Review of Charter. The Committee Charter shall be approved by at least a majority of the Independent Trustees of the Trust. The Committee shall review and assess the adequacy of this Charter periodically and, where necessary or as it deems desirable, will recommend changes to the Board for its approval. The Board may amend this Charter at any time in response to recommendations from the Committee or on its own motion.
Executive Sessions. The Committee may meet privately and may invite non-members to attend such meetings. The Committee may meet with representatives of the Investment Management Services department of the Funds' advisers, internal legal counsel of the Funds' advisers, members of the John Hancock Funds Risk & Investment Operations Committee (the "RIO Committee") and with representatives of the Funds' service providers, including the subadvisers, to discuss matters that relate to the areas for which the Committee has responsibility.
Specific Duties and Responsibilities
The Committee shall have the following duties and powers, to be exercised at such times and in such manner as the Committee shall determine:
1.Except where a Trust is legally required to nominate individuals recommended by another, to identify individuals qualified to serve as Independent Trustees of the Trusts, and to consider and recommend to the full Board nominations of individuals to serve as Trustees.
2.To consider, as it deems necessary or appropriate, the criteria for persons to fill existing or newly created Trustee vacancies. The Committee shall use the criteria and principles set forth in Annex A to guide its Trustee selection process.
3.To consider and recommend changes to the Board regarding the size, structure, and composition of the Board.
4.To evaluate, from time to time, and determine changes to the retirement policies for the Independent Trustees, as appropriate.
5.To periodically review the Board's committee structure and, in collaboration with the Chairs of the various Committees, the charters of the Board's committees, and
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recommend to the Board of Trustees changes to the committee structure and charters as it deems appropriate.
6.To retain and terminate any firm(s) to be used to identify or evaluate or assist in identifying or evaluating potential Independent Board nominees, subject to the Board's sole authority to approve the firm's fees and other retention terms.
7.To consider and determine the amount of compensation to be paid by the Trusts to the Independent Trustees, including the compensation of the Chair of the Board or any Vice-Chair of the Board and of Committee Chairs, and to address compensation-related matters. The Chair of the Board has been granted the authority to approve special compensation to Independent Trustees in recognition of any significant amount of additional time and service to the Trusts provided by them, subject to ratification of any such special compensation by the Committee at the next regular meeting of the Committee.
8.To coordinate and administer an annual self-evaluation of the Board, which will include, at a minimum, a review of its effectiveness in overseeing the number of Funds in the Fund complex and the effectiveness of its committee structure.
9.To review the Board Governance Procedures and recommend to the Board of Trustees changes to the Procedures as the Committee deems appropriate.
10.To report its activities to the full Board and to make such recommendations with respect to the matters described above and other matters as the Committee may deem necessary or appropriate.
Additional Responsibilities
The Committee will also perform other tasks assigned to it from time to time by the Chair of the Board or by the Board, and will report findings and recommendations to the Board, as appropriate.
Last revised:
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ANNEX A
The Committee may take into account a wide variety of factors in considering Trustee candidates, including (but not limited to) the criteria set forth below. The Committee may determine that a candidate who does not satisfy these criteria in one or more respects should nevertheless be considered as a nominee if the Committee finds that the criteria satisfied by the candidate and the candidate's other qualifications demonstrate the appropriate level of fitness to serve.
General Criteria
1.Nominees should have a reputation for integrity, honesty and adherence to high ethical standards, and such other personal characteristics as a capacity for leadership and the ability to work well with others.
2.Nominees should have business, professional, academic, financial, accounting or other experience and qualifications which demonstrate that they will make a valuable contribution as Trustees.
3.Nominees should have a commitment to understand the Funds, and the responsibilities of a trustee/director of an investment company and to regularly attend and participate in meetings of the Board and its committees.
4.Nominees should have the ability to understand the sometimes conflicting interests of the various constituencies of the Funds, including shareholders and the investment adviser, and to act in the interests of all shareholders.
5.Nominees should not have, nor appear to have, a conflict of interest that would impair their ability to represent the interests of all the shareholders and to fulfill the responsibilities of a trustee.
6.Nominees should have experience on corporate or other institutional bodies having oversight responsibilities.
It is the intent of the Committee that at least one Independent Trustee be an "audit committee financial expert" as that term is defined in Item 3 of Form N-CSR.
Application of Criteria to Current Trustees
The re-nomination of current Trustees should not be viewed as automatic, but should be based on continuing qualification under the criteria set forth above based on, among other things, the current Trustee's contribution to the Board and any committee on which he or she serves.
Review of Nominations
1.The Committee believes that it is in the best interests of each Trust and its shareholders to obtain highly-qualified candidates to serve as members of the Board.
2.In nominating candidates who would be Independent Trustees, the Committee believes that no particular qualities or skills nor any specific minimum qualifications or disqualifications are controlling or paramount. The Committee shall take into consideration any such factors as it deems appropriate; however, the appropriate mix of skills, expertise and attributes needed to maintain an effective board are sought in the applicant pool as part of every search the Board undertakes for new trustees, including but not limited to the diversity of thought, as well as of gender, race, ethnic background and geographic origin. These factors may also include (but are not limited to) the person's character, integrity, judgment, skill and experience with investment companies and other organizations of comparable purpose, complexity and size and subject to similar legal restrictions and oversight; the interplay of the candidate's experience with the experience of other Board members; and the extent to which the candidate would be a desirable addition to the Board and any Committees thereof. Other factors that the Committee may take into consideration include a person's availability and commitment to attend meetings and perform his or her responsibilities; whether or not the person has or had any relationships that might impair or appear to impair his or her independence, such as any business, financial or family relationships with Fund management, the investment adviser and/or any subadviser of the Funds, as applicable, Fund service providers, or their affiliates or with Fund shareholders. The Committee will strive to achieve a group that reflects a diversity of experiences in respect of industries, professions and other experiences, and that is diversified as to thought, gender, race, ethnic background and geographic origin.
3.While the Committee is solely responsible for the selection and recommendation to the Board of Independent Trustee candidates, the Committee may consider nominees recommended by any source, including shareholders, management, legal counsel and Board members, as it deems appropriate. The Committee may retain a professional search firm or a consultant to assist the Committee in a search for a qualified candidate. Any recommendations from shareholders shall be directed to the Secretary of the relevant Trust at such address as is set forth in the Trust's disclosure documents. Recommendations from management may be submitted to the Committee Chair. All recommendations shall include all information relating to such person that is required to be disclosed in solicitations of proxies for the election of Board members and as specified
in the relevant Trust's By-Laws, and must be accompanied by a written consent of the proposed candidate to stand for election if nominated for the Board and to serve if elected by shareholders.
4.Any shareholder nomination must be submitted in compliance with all of the pertinent provisions of Rule 14a-8 under the Securities Exchange Act of 1934 in order to be considered by the Committee. In evaluating a nominee recommended by a shareholder, the Committee, in addition to the criteria discussed above, may consider the objectives of the shareholder in submitting that nomination and whether such objectives are consistent with the interests of all shareholders. If the Board determines to include a shareholder's candidate among the slate of its designated nominees, the candidate's name will be placed on the Trust's proxy card. If the Board determines not to include such candidate among its designated nominees, and the shareholder has satisfied the requirements of Rule 14a-8, the shareholder's candidate will be treated as a nominee of the shareholder who originally nominated the candidate. In that case, the candidate will not be named on the proxy card distributed with the Trust's proxy statement.
5.As long as a current Independent Trustee continues, in the opinion of the Committee, to satisfy the criteria listed above, the Committee generally would favor the re-nomination of a current Trustee rather than a new candidate. Consequently, while the Committee will consider nominees recommended by shareholders to serve as trustees, the Committee may only act upon such recommendations if there is a vacancy on the Board, or the Committee determines that the selection of a new or additional Trustee is in the best interests of the relevant Trust. In the event that a vacancy arises or a change in Board membership is determined to be advisable, the Committee will, in addition to any shareholder recommendations, consider candidates identified by other means as discussed in this Annex A.
6.With respect to candidates for Independent Trustee, a biography of each candidate shall be acquired and shall be reviewed by counsel to the Independent Trustees and counsel to the Trust to determine the candidate's eligibility to serve as an Independent Trustee.
7.The Committee may from time to time establish specific requirements and/or additional factors to be considered for Independent Trustee candidates as it deems necessary or appropriate.
8.After its consideration of relevant factors, the Committee shall present its recommendation(s) to the full Board for its consideration.
Important information regarding your distributions
We are providing shareholders of the John Hancock Financial Opportunities Fund with information concerning the portion of the distributions made for September 30, 2020, that was from a source other than net investment company book income. No action is required on your part.
The amounts and sources of distributions reported in this notice are estimates, are not being provided for tax reporting purposes and may later be determined to be from taxable net investment income, short-term gains, long-term gains (to the extent permitted by law), and return of capital. The actual amounts and sources for tax reporting purposes will depend upon the Fund's investment experience during the remainder of the fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
Payable Date: |
Ticker # |
Fund Name |
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|
CUSIP |
September 30, 2020 |
BTO |
John Hancock Financial |
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|
409735206 |
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|
Opportunities Fund |
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For the period 7/1/2020- |
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For the fiscal year-to-date period |
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|
9/30/2020 |
|
1/1/2020-9/30/2020 3 |
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|
|
Current |
% of |
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|
% of |
|
|
Distribution |
Current |
|
Cumulative |
Cumulative |
Source |
|
($) |
Distribution |
|
Distributions ($) |
Distributions |
Estimated Net Investment Income (1) |
0.1663 |
30% |
|
0.6073 |
37% |
|
Estimated Short-Term Capital Gain (1) |
0.0000 |
0% |
|
0.0000 |
0% |
|
Estimated Long-Term Capital Gain (1) |
0.0000 |
0% |
|
0.5601 |
34% |
|
Estimated Return of Capital (1), (2) |
0.3837 |
70% |
|
0.4809 |
29% |
|
Total (per common share) |
|
0.5500 |
100% |
|
1.6483 |
100% |
|
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|
|
|
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(1)The amounts and sources of distributions reported above are only estimates on a book basis. These estimates may, and likely will, vary over time based on the investment activities of the Fund and changes in the value of portfolio investments. The sources of distributions may later be determined to be from taxable net investment income, short-term gains, long-term gains (to the extent permitted by law), and return of capital. Investors should understand that a return of capital is not a distribution from income or gains of a Fund.
(2)On a tax basis, the estimated components of the current distribution and cumulative distribution would include an estimated return of capital of $0.0000 (0%) and $0.0000 (0%), respectively. These amounts are estimates and the actual amounts and sources for tax reporting purposes may change upon final determination of tax characteristics and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
(3)The Fund's current fiscal year began on January 1, 2020, and will end on December 31, 2020.
If you have questions or need additional information, please contact your financial professional or call the John Hancock Investment Management Closed-End Fund Information Line at 1-800-843- 0090, Monday through Friday between 8:00 a.m. and 7:00 p.m., Eastern Time.
Important information regarding your distributions
We are providing shareholders of the John Hancock Financial Opportunities Fund with information concerning the portion of the distributions made for December 31, 2020, that was from a source other than net investment company book income. No action is required on your part.
The amounts and sources of distributions reported in this notice are estimates, are not being provided for tax reporting purposes and may later be determined to be from taxable net investment income, short-term gains, long-term gains (to the extent permitted by law), and return of capital. The actual amounts and sources for tax reporting purposes will depend upon the Fund's investment experience during the remainder of the fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
Payable Date: |
Ticker # |
Fund Name |
|
|
|
CUSIP |
December 31, 2020 |
BTO |
John Hancock Financial |
|
|
409735206 |
|
|
|
Opportunities Fund |
|
|
|
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|
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|
|
|
|
|
|
For the period 10/1/2020- |
|
For the fiscal year-to-date period |
||
|
|
12/31/2020 |
|
1/1/2020-12/31/2020 3 |
||
|
|
Current |
% of |
|
|
% of |
|
|
Distribution |
Current |
|
Cumulative |
Cumulative |
Source |
|
($) |
Distribution |
|
Distributions ($) |
Distributions |
Estimated Net Investment Income (1) |
0.1784 |
32% |
|
0.7738 |
35% |
|
Estimated Short-Term Capital Gain (1) |
0.0000 |
0% |
|
0.0000 |
0% |
|
Estimated Long-Term Capital Gain (1) |
0.3716 |
68% |
|
0.9608 |
44% |
|
Estimated Return of Capital (1), (2) |
0.0000 |
0% |
|
0.4610 |
21% |
|
Total (per common share) |
|
0.5500 |
100% |
|
2.1956 |
100% |
|
|
|
|
|
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|
(1)The amounts and sources of distributions reported above are only estimates on a book basis. These estimates may, and likely will, vary over time based on the investment activities of the Fund and changes in the value of portfolio investments. The sources of distributions may later be determined to be from taxable net investment income, short-term gains, long-term gains (to the extent permitted by law), and return of capital. Investors should understand that a return of capital is not a distribution from income or gains of a Fund.
(2)On a tax basis, the estimated components of the current distribution and cumulative distribution would include an estimated return of capital of $0.1595 (29%) and $0.6367 (29%), respectively. These amounts are estimates and the actual amounts and sources for tax reporting purposes may change upon final determination of tax characteristics and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
(3)The Fund's current fiscal year began on January 1, 2020, and will end on December 31, 2020.
If you have questions or need additional information, please contact your financial professional or call the John Hancock Investment Management Closed-End Fund Information Line at 1-800-843- 0090, Monday through Friday between 8:00 a.m. and 7:00 p.m., Eastern Time.