| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 8.2% | 3.7% | 16.0% |
| 2025 |
|---|
| 16.0% |
The John Hancock Balanced Fund delivered strong Q4 performance with a 3.74% quarterly return and 16.00% annual return, driven primarily by effective security selection. The fund's equity portfolio outperformed due to strong stock picking in communication services and healthcare sectors, with notable contributions from Eli Lilly's GLP-1 drug franchise growth, Freeport-McMoRan benefiting from rising copper and gold prices, and Alphabet. However, positions in Zebra Technologies and BellRing Brands detracted, along with the fund's lack of exposure to Apple. The fixed-income portfolio also outperformed through an underweight in U.S. Treasuries and overweight in mortgage-backed securities. Looking forward, managers expect continued strong earnings supported by robust holiday spending but note elevated equity valuations and anticipate increased volatility from geopolitical uncertainty, upcoming midterm elections, and divergent central bank policies. The team actively repositioned the portfolio, establishing seven new equity positions while reducing equity allocation to maintain desired underweight, and shifted fixed-income exposure toward securitized credit while reducing corporate bond allocations.
Active security selection and tactical asset allocation across balanced equity and fixed-income portfolio to generate returns while managing risk through diversification.
The managers expect Q4 earnings to remain strong driven by robust holiday spending, while noting that equity valuations appear elevated. They anticipate increased volatility in the coming year due to geopolitical uncertainty, upcoming U.S. midterm elections, and divergent central bank policies. For fixed income, they expect the Fed to maintain a cautious approach with increased volatility as investors navigate uncertainty regarding future Fed policy, while viewing elevated longer-term yields as potentially attractive.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Feb 3 2026 | 2025 Q4 | AAPL, AMZN, AVGO, BRBR, FCX, GOOGL, JPM, LLY, MSFT, ZBRA | asset allocation, Balanced, equities, fixed income, healthcare, materials, security selection, technology | - | Eli Lilly & Company contributed to relative performance with shares rising amid continued growth in its GLP-1 drug franchise. Freeport-McMoRan benefited from rising copper and… |
| Oct 19 2025 | 2025 Q3 | - | AI, credit, diversification, equities, fixed income |
CMG US GOOGL US MU US |
The fund benefited from AI-related equity exposure in Broadcom and Micron, alongside balanced positioning in credit-oriented fixed income. Managers emphasize flexibility amid rate cuts and… |
| Jul 22 2025 | 2025 Q2 | - | asset allocation, balanced allocation, diversification, income, risk management | - | The letter emphasizes balanced portfolio construction as a way to navigate uncertain macro conditions marked by inflation risks and policy shifts. Management highlights the role… |
| Mar 31 2025 | 2025 Q1 | - | - | - | - |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q4 |
CopperMarket shifted from deficit to surplus as Chinese demand stalled for first time in 25 years while supply expanded by 3 million tonnes since 2021. Exchange inventories reached 1.2 million tonnes, highest since 2003. Bearish outlook as China transitions from under-consuming to over-consuming copper. |
Base Metals China Inventories Surplus |
GLP1Eli Lilly represents the fund's exposure to the GLP-1 obesity and diabetes treatment market, which continues to show exceptional growth. Mounjaro and Zepbound sales more than doubled year-over-year, with demand continuing to outpace supply. The fund sees this as a multi-decade growth opportunity with expanding indications and sustained competitive advantages. |
Obesity Diabetes Pharmaceuticals Growth Innovation | |
| 2025 Q3 |
AIAI has been integrated into RGA's research process through tools like NotebookLM, Gems in Gemini, and Claude Code. The firm views AI as a force multiplier for human judgment rather than a replacement, emphasizing the Kasparov Law principle. They believe the market narrative around AI displacement is swinging to unhelpful extremes, creating investment opportunities. |
Machine Learning Automation Software Productivity Innovation |
CreditFund focuses on elevated carry in high yield credit markets with spreads remaining range bound below 300 basis points. Manager believes high yield credit is fundamentally strong but valuations are tight, particularly in higher quality BBs. Strategy emphasizes sourcing positions with higher income levels given limited price appreciation opportunities. |
High Yield Credit Spreads Carry Investment Grade | |
| 2025 Q2 |
Balanced |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
|---|---|---|---|---|---|---|---|---|---|---|
| Oct 19, 2025 | Fund Letters | Michael J . Scanlon | CMG US | Chipotle Mexican Grill, Inc. | Consumer Discretionary | Restaurants | Bear | NYSE | consumer, growth, inflation, Margins, Restaurants, valuation | Login |
| Oct 19, 2025 | Fund Letters | Michael J . Scanlon | GOOGL US | Alphabet Inc. | Communication Services | Interactive Media & Services | Bull | NASDAQ | advertising, AI, cloud, diversification, growth, Margins, valuation | Login |
| Oct 19, 2025 | Fund Letters | Michael J . Scanlon | MU US | Micron Technology, Inc. | Information Technology | Semiconductors | Bull | NASDAQ | AI, data centers, growth, Memory, recovery, semiconductors, valuation | Login |
| TICKER | COMMENTARY |
|---|---|
| AAPL | Apple Inc. represents 1.6% of company owned with cost basis of $6,255 million and market value of $61,962 million, providing $280 million in 2025 dividends. |
| AMZN | One company we own that we think has unique positioning to benefit from both the infrastructure and application layers is Amazon. Amazon's logistical prowess is one of the foremost moats in business today and it can and will be enhanced with AI. The company will do this in multiple ways, with better orchestration of its logistics assets and underlying cargo, as well as the buildout of more capable, sophisticated and robust robotics. Amazon is singularly well positioned to dominate the coordination layer, with AI's help, across its entire logistics network. |
| AVGO | The primary contributors to its performance were our exposures to Broadcom |
| BRBR | Our smallest position remains BellRing Brands, which is experiencing slower-than-expected growth due to increased competition. We added to the position, as we believe valuation has become more attractive and growth could improve in 2026. |
| FCX | Freeport McMoRan was able to recover the share price drawdown seen in September following a major mudflow event at their Grasberg mine, which resulted in a full suspension of production and a material cut to guidance. The share price finished 2025 at its high. |
| GOOGL | In the third quarter, Google, Kairos Power, and the Tennessee Valley Authority announced a major collaboration centered on a novel power purchase agreement. Google followed this announcement with another significant step forward. On October 27, Google and NextEra Energy announced plans to restart the Duane Arnold Energy Center. |
| JPM | JPMorgan (JPM) has identified 42 AI-related stocks in the S&P 500, which today represent 45% of the index's market cap. They estimate that these stocks have accounted for 78% of S&P 500 returns, 66% of earnings growth, and 71% of capital spending growth since ChatGPT launched in November 2022. As it relates to the impact on the U.S. economy, JPM estimates tech sector capital spending contributed 40%-45% of U.S. GDP growth through the first 9 months of the year, up from less than 5% during the same period in 2023. |
| LLY | Eli Lilly shares were a top performer in 4Q25 after delivering strong Q3 2025 earnings in October. Revenue rose 54% year-over-year to $17.6 billion, and adjusted EPS of $7.02 beat consensus of $6.02. Growth was driven by its GLP-1 franchises, Mounjaro and Zepbound, where sales more than doubled year-over-year, alongside strength in other therapeutic areas. Management raised full-year guidance for both revenue and earnings, reinforcing investor confidence in the company's growth outlook. |
| MSFT | MSFT was a detractor in 4Q25 following its fiscal first-quarter 2026 earnings report released on October 29. While results were better than expected operationally, investor reaction was driven by guidance and capital expenditure intensity rather than headline performance. Revenue grew 17% year-over-year, exceeding consensus expectations, and Azure revenue increased 39% year-over-year, also ahead of estimates. However, management guided to a sequential deceleration in Azure growth in fiscal Q2, signaling some moderation after a period of exceptional demand. |
| ZBRA | back in November, Zebra Technologies (ZBRA) hit our insider radar. On the surface, the valuation of the $12.6B business appeared attractive at less than a 14x P/E, a modest debt burden and decent return on incremental invested capital. It looked like a worthwhile investment candidate – but the wheels came flying off when we did our risk review. What these attractive statistics do not tell you is that management had entered into a transformative acquisition of commercial touch screen provider, Elo Touch for $1.3B. The problem, management almost certainly paid too much for a business generating ~$80M in EBITDA (earnings before interest, taxes and depreciation) (press release). At over 16x EBITDA, the acquisition blew out the capital structure with debt and presented significant execution risk resulting in an expected risk-adjusted return well below our threshold of safety. |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
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