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John Hancock Investments finds DC plan sponsors adding alternatives

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SOURCE John Hancock Investments

BOSTON, Feb. 18, 2014 /PRNewswire/ -- John Hancock Investments' defined contribution (DC) clients are adding alternative mutual funds to their menu of plan options at a rapid pace. Since the end of 2012, more than 400 plans have added John Hancock Investments' alternative strategies-including John Hancock Global Absolute Return Strategies Fund and John Hancock Alternative Asset Allocation Fund.

"After the heightened volatility of the past few years, plan sponsors and record-keepers are starting to embrace investments and strategies that are less correlated with traditional stock and bond markets," said Andrew G. Arnott, President and CEO of John Hancock Investments. "These strategies offer participants the potential for a deeper level of diversification and a way to actively manage volatility. At the same time, the mutual fund structure offers the advantages of lower fees, daily liquidity, and stringent oversight that investors don't typically get through hedge funds."

Respondents in a January Ignites reader poll seemed to agree, predicting that liquid alternatives would be the top asset-gathering category in 2014, due both to their potential to generate returns and to the lukewarm outlook for traditional equity and fixed-income products.[1]

"John Hancock Investments has provided access to alternative investments through our unique manager-of-managers approach for nearly two decades," said Todd J. Cassler, President of Institutional Distribution for John Hancock Investments. "We have a great deal of experience identifying successful alternative managers, incorporating those strategies into diversified portfolios, and providing a high level of oversight. Our risk management and manager due diligence capabilities on alternative investments help to make our strategies attractive for retirement plans."

Among the firm's successful strategies in DC plans is the John Hancock Global Absolute Return Strategies Fund. The fund is managed by a team of portfolio managers at Standard Life Investments (Corporate Funds) Ltd. and takes an unconstrained approach to pursuing positive returns with lower volatility.  "In a retirement plan menu, absolute return funds can offer participants a way to reduce the effect of market volatility without settling for the near-zero returns of money markets," said Cassler.

Another fund that has been finding an audience in retirement plans is the John Hancock Alternative Asset Allocation Fund, a fund of funds that invests in alternative asset classes, including, but not limited to, currencies, global real estate, commodities, natural resources, and emerging-market debt.

"Retirement plan sponsors and participants are finding multiple benefits in this all-in-one approach," said Cassler. "Because the assets are professionally allocated among multiple alternative strategies and managers, participants don't need to worry about being conversant with all the details of all the strategies. At the same time, plan sponsors are able to add this varied alternative asset category in a single, diversified option."

John Hancock Investments' commitment to alternative investments continues to grow. Recently, the firm announced the launch of two new alternative funds managed by Wellington Management. John Hancock Seaport Fund combines long and short equity positions across a range of sectors, employing bottom-up stock picking and fundamental research, alongside top-down views on sector valuations. John Hancock Enduring Equity Fund focuses on companies that own physical assets with very long economic lives, such as transportation infrastructure, midstream energy, and telecommunication services companies. These types of companies tend to exhibit low levels of earnings volatility, which may help the fund mitigate losses during flat or negative equity markets.

About John Hancock Investments
John Hancock Investments provides asset management services to individuals and institutions through a unique manager-of-managers approach. We combine unbiased asset management with vigorous investment oversight to offer investors a deeper level of diversification and proven results across asset classes. A wealth management business of John Hancock Financial, we managed more than $111 billion in assets as of December 31, 2013, across mutual funds, college savings plans, and retirement plans.

About John Hancock Financial and Manulife Financial
John Hancock Financial is a division of Manulife Financial, a leading Canada-based financial services group with principal operations in Asia, Canada, and the United States. Operating as Manulife Financial in Canada and Asia and primarily as John Hancock in the United States, the company offers clients a diverse range of financial protection products and wealth management services through its extensive network of employees, agents, and distribution partners. Funds under management by Manulife Financial and its subsidiaries were C$588 billion (US$563 billion) as of December 31, 2013. Manulife Financial Corporation trades as MFC on the TSX, NYSE and PSE, and under 945 on the SEHK. Manulife Financial can be found on the Internet at manulife.com.

The John Hancock unit, through its insurance companies, is one of the largest life insurers in the United States. John Hancock offers and administers a broad range of financial products, including life insurance, annuities, investments,  401(k) plans, long-term care insurance, college savings, and other forms of business insurance. Additional information about John Hancock may be found at johnhancock.com.


[1] Ignites, "Liquid Alts Products Tipped to Be Hottest of 2014," January 15, 2014.

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