Principal Risks include: Asset-Backed Security Risk for Stable Value Fund, Capital Preservation, Credit and Counterparty Risk for Stable Value Fund, Equity Wash, Extension Risk, Interest Rate Risk for Stable Value, Investment Grade Securities for Stable Value Fund, Manager Risk for Stable Value Fund, Market Risk for Stable Value Fund, Maturity/Duration for Stable Value Fund, Prepayment Risk for Stable Value Fund, Private Fund, Risks Relating to John Hancock, Stabilizing Agreement/Wrap Provider Risk and Wrap Contracts. See disclosure for details.
Asset-Backed Security Risk for Stable Value Fund A Separate Account or a portfolio related to other benefit responsive contracts may invest in asset backed securities. Asset-backed securities include interests in pools of residential or commercial mortgages, debt securities, commercial or consumer loans, or other receivables. Often, the issuer of asset-backed securities is a special purpose entity and the investor's recourse is limited to the assets comprising the pool. The value of such securities depends on many factors, including, but not limited to, changes in interest rates, the structure of the pool and the priority of the securities within that structure, the credit quality of the underlying assets, the skill of the pool's servicer, the market's perception of the pool's servicer, and credit enhancement features (if any).
Capital Preservation The fund seeks capital preservation, but there can be no assurances that it will achieve this goal.
Credit and Counterparty Risk for Stable Value Fund An investor purchasing a fixed income security (including a GIC or other benefit responsive contract) faces the risk that the value of that fixed income security may decline because the credit-worthiness of the issuer, guarantor or other counterparty may deteriorate, or such party may fail to make timely payments of interest or principal to the investor. Timely payment under unsecured fixed income securities (including GICs and other benefit responsive contracts) is dependent entirely upon the performance of the issuer, guarantor or counterparty.
Equity Wash Transfers from the Stable Value Fund to a competing fund are subject to a standard 90-day equity wash provision. Competing funds include other stable value investments, money markets and most fixed income funds with a duration of 3 years or less.
Extension Risk The issuer of a security may repay principal more slowly than expected because of rising interest rates. In this event, short- and medium duration securities are effectively converted into longer-duration securities, increasing their sensitivity to interest-rate changes and causing their prices to decline.
Interest Rate Risk for Stable Value Many fixed income investments face the risk that the securities will decline in value because of changes in interest rates. Generally, fixed income investments will decrease in value when interest rates rise (and increase in value when interest rates fall).
Investment Grade Securities for Stable Value Fund Investments in investment-grade securities that are not rated in the highest rating categories may lack the capacity to pay principal and interest compared with higher rated securities and may be subject to increased credit risk.
Manager Risk for Stable Value Fund Actively managed investments are subject to the risk that the investment managers' usage of investment techniques and risk analysis to make investment decisions fails to perform as expected, which may cause the relevant portfolio to lose money or underperform investments with similar objectives and strategies or the market in general.
Market Risk for Stable Value Fund Although individual securities or individual funds may outperform the market, the entire market may decline as a result of rising interest rates, regulatory developments or deteriorating economic conditions. A market decline could adversely affect the market value of existing fixed income investments of a portfolio (including a Separate Account), as well as the yield available on investments of new cash flows.
Maturity/Duration for Stable Value Fund Securities with longer maturities or durations typically have higher yields but may be subject to increased interest-rate risk and price volatility compared with securities with shorter maturities, which have lower yields but greater price stability.
Prepayment Risk for Stable Value Fund As interest rates decline, the issuers of certain fixed income securities, including asset-backed securities, may prepay principal earlier than scheduled, forcing the applicable portfolio manager to reinvest in potentially lower yielding securities. Increased rates of prepayments will generally result in a loss of interest income if the portfolio manager is required to reinvest at a lower interest rate.
Private Fund The fund is not a mutual fund and is privately offered. Prospectuses are not required and prices are not available in local publications.
Risks Relating to John Hancock The fund invests a portion of its assets (including cash and cash equivalents) in a separate account of John Hancock Life & Health Insurance Company (JHLH). The fund's right to receive payments for the benefit of, and its ability to distribute payments to, plan participants depends on the timely liquidation of separate account assets. While an insolvency of JHLH should not diminish the assets of the Separate Account, it could delay the timing of payments to plan participants. Because the fund invests in the separate account, the value of the fund and its ability to honor withdrawal requests from plan participants depends, in part, on the performance of JHLH.
Stabilizing Agreement/Wrap Provider Risk The trustee of a stable value fund and/or the manager or sponsor of the underlying investments of a stable value fund typically endeavor to maintain one or more Stabilizing Agreements (also known as a Wrap Agreement) with Stability Provider(s) (also known as Wrap Providers) in an attempt to maintain the book value of the fund or the underlying investments. The obligations of each Stability Provider are general, unsecured obligations of such Stability Provider. Default by a Stability Provider could result in participant withdrawals from the fund at less than book value. The fund expects that the use of Stabilizing Agreements will (when combined with any benefit responsive contracts and short-term investments held as underlying investments), under most circumstances, permit the fund to pay all withdrawals from the fund at book value. However, the default of a Stability Provider and an inability to obtain a replacement Stabilizing Agreement could render the fund unable to pay withdrawals at book value. Thus, the ability of a stable value fund to pay withdrawals at book value depends on the ability of the Stability Provider(s) to make payments under the Stabilizing Agreements.
Wrap Contracts The fund may be exposed to risks associated with the providers of any wrap contracts (synthetic GICs) covering the fund's assets, including credit risk and capacity risk.
Other:
f1. The Gross Expense Ratio does not include fee waivers or expense reimbursements which result in lower actual cost to the investor. The Net Expense Ratio represents the effect of a fee waiver and/or expense reimbursement and is subject to change.
In addition to fees charged by JHRPS for its services to the plan, affiliates of JHRPS receive investment management and other fees from the John Hancock Funds and other funds advised or sub-advised by JHRPS's affiliates.
Marketing support services are provided by John Hancock Distributors LLC.
Index Description:
i41. FTSE Treasury Bill 3 Month Index is an unmanaged, market capitalization weighted, index of 3-month Treasury bills. An investment cannot be made directly into an index.
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