| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| 8.05% | -0.59% | -0.59% |
The John Hancock Balanced Fund delivered a -0.59% return in Q1 2026 as economic growth and solid earnings were overshadowed by geopolitical concerns, AI spending bubble fears, and rising energy costs. The fund's equity portfolio significantly outperformed due to overweights in energy and materials sectors, with strong stock picking in information technology and consumer discretionary. Key contributors included Applied Materials benefiting from data center chip demand, and energy holdings Valero and Suncor gaining from geopolitical commodity price increases. Microsoft was the largest detractor on AI concerns, though managers added to the position citing long-term competitive strength and reasonable valuation. The fixed-income portfolio underperformed primarily due to unfavorable yield curve positioning. Looking ahead, managers expect the Fed to remain cautious on rates given geopolitical challenges. They view current stock valuations as more reasonable after the downturn, creating what they believe is a strong environment for bottom-up security selection amid periodic market volatility.
The fund seeks current income and long-term growth through a balanced approach of equity and fixed-income investments, emphasizing active security selection to capitalize on market volatility and mispricing opportunities.
Given the challenging geopolitical climate, we expect the Fed to take a cautious approach to future interest rate decisions. After a downturn, stock valuations now strike us as a bit more reasonable. The combination of more favorable pricing and periodic big market swings presents what we believe to be a strong environment for bottom-up security selection.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Apr 18 2026 | 2026 Q1 | AMAT, MSFT, SU, VLO, XOM | AI, asset allocation, Balanced, energy, fixed income, Geopolitical, technology | - | Balanced fund posted -0.59% in Q1 as geopolitical turmoil and AI bubble concerns weighed on markets. Energy overweights and tech stock picking drove equity outperformance while fixed-income lagged on yield curve positioning. Managers see more reasonable valuations post-downturn creating opportunities for active security selection despite ongoing geopolitical and monetary policy uncertainties. |
| 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 | - | John Hancock Balanced Fund delivered strong 16% annual returns through superior security selection, particularly in communication services and healthcare. Key contributors included Eli Lilly's GLP-1 growth and Freeport-McMoRan's commodity exposure. Managers actively repositioned portfolios while maintaining balanced allocation, expecting continued earnings strength but anticipating increased volatility from geopolitical uncertainty and elevated valuations. |
| Oct 19 2025 | 2025 Q3 | AAPL, AMZN, AVGO, CMG, DLR, EQT, FCX, GOOGL, JPM, MSFT, MU, TSLA | AI, asset allocation, Balanced, credit, fixed income, semiconductors |
CMG US GOOGL US MU US |
Balanced fund delivered 5.04% Q3 return despite equity underperformance from consumer discretionary selection. AI investments including semiconductors and data centers contributed positively. Fixed-income outperformed via credit allocation over Treasuries. Managers expect rising volatility from tariff impacts but maintain flexible positioning across asset classes to capitalize on AI opportunities while managing economic uncertainty. |
| Jul 22 2025 | 2025 Q2 | AAPL, AMZN, AVGO, CMG, DLR, EQT, FCX, GOOGL, JPM, MSFT, MU, TSLA | AI, asset allocation, Balanced, credit, fixed income, technology | - | John Hancock Balanced Fund returned 5.04% in Q3 2025 with mixed equity performance offset by strong fixed-income results. Equity underperformance from consumer discretionary selection was partially offset by communication services gains and AI-driven semiconductor strength. Fixed-income outperformed through credit overweights versus Treasuries. Managers added AI infrastructure plays while expecting increased volatility ahead. |
| Mar 31 2025 | 2025 Q1 | AVGO, DE, GOOGL, MRVL, NVDA, TSLA | AI, asset allocation, Balanced, Rate Cuts, semiconductors, tariffs, valuation | - | Balanced fund declined 1.84% in Q1 as tariff concerns offset initial Trump rally optimism. Semiconductor holdings hurt by AI spending fears while avoiding NVIDIA helped. Managers reduced equity allocation to 58% amid uncertainty, established new positions through active stock picking. Expect continued volatility but see favorable environment for security selection given elevated valuations. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2026 Q1 |
AIConcerns about a possible bubble in AI spending triggered large price swings in certain stocks. Microsoft saw shares fall on concerns about some of the company's AI initiatives, though the managers added to their position citing the firm's long-term competitive strength. |
AI Data Centers Semiconductors Technology Bubble |
EnergyGeopolitical turmoil pushed up commodity prices, benefiting energy sector holdings. The fund maintained overweights in energy and materials sectors, with petroleum refiner Valero Energy and integrated energy firm Suncor Energy contributing to performance. |
Oil Refiners Geopolitical Commodities Energy | |
| 2025 Q4 |
AIAI enthusiasm supported large-cap growth companies and drove technology earnings. Long-term capital investment in AI reflects demographic pressures and labor scarcity. AI-related investment expected to slow from exceptionally fast levels but remains a multi-year trend supporting growth. |
Artificial Intelligence Technology Investment Growth Productivity |
ValuationsEquity valuations remain elevated with S&P 500 trading near 23x forward earnings, well above long-term average of 15.6x. Elevated valuations constrain longer-term returns and increase market sensitivity to earnings disappointments. Returns will depend more on earnings durability than multiple expansion. |
Valuations Multiples Earnings Risk Returns | |
EarningsStrong corporate earnings drove market gains, particularly in technology and communication services. Consensus expects continued earnings growth in low-double-digit range. Much of technology-led earnings growth supported by long-term capital investment rather than leverage. |
Earnings Growth Technology Corporate Investment | |
DollarWeaker U.S. dollar, down 9.4% in 2025, provided notable tailwind for foreign assets. Dollar weakness helped international equities meaningfully outperform U.S. markets and boosted returns for European and emerging market investments in dollar terms. |
Dollar Currency International Foreign Returns | |
RatesFederal Reserve cut rates by 25 basis points in December to 3.5%-3.75% range. Fed cut rates three times in 2025 and expects one more cut in 2026. Markets pricing roughly two additional cuts. Higher yields have improved income potential with 10-year Treasury at 4.18%. |
Interest Rates Federal Reserve Monetary Policy Bonds Income | |
| 2025 Q3 |
AIThe fund added to nontraditional AI beneficiaries including EQT Corp. and Freeport-McMoRan, which could profit from increased electricity demand, and data center operator Digital Realty Trust. Semiconductor companies Micron and Broadcom contributed to performance on higher demand fueled by artificial intelligence. |
Data Centers Semiconductors Electricity Infrastructure |
CreditCredit-oriented sectors of the fixed-income market rose amid solid economic growth and healthy earnings. The fund increased allocation to investment-grade and high-yield corporate bonds as well as securitized credit, with favorable asset allocation contributing to outperformance. |
Corporate Bonds High Yield Securitized Investment Grade | |
| 2025 Q2 |
AIThe fund added to nontraditional AI beneficiaries including EQT Corp. and Freeport-McMoRan, which could profit from increased electricity demand, and data center operator Digital Realty Trust. Semiconductor companies Micron and Broadcom contributed to performance on higher demand fueled by artificial intelligence. |
Data Centers Semiconductors Electricity Infrastructure |
CreditCredit-oriented sectors of the fixed-income market rose amid steady economic growth, healthy earnings, and elevated investor risk appetite. The fund increased allocation to investment-grade and high-yield corporate bonds as well as securitized credit. |
Corporate Bonds High Yield Securitized Risk Appetite | |
| 2025 Q1 |
AIAI spending concerns weighed on semiconductor stocks like Marvell and Broadcom, while competitive threats affected Alphabet. The fund increased allocation to Alphabet believing concerns are misguided and shares undervalued. Not holding NVIDIA contributed to relative performance as AI chipmaker underperformed. |
Semiconductors Technology Valuation Competition Spending |
Trade PolicyTrump administration's tariff stance emerged as a key concern during the quarter, raising fears of slowing growth or potential recession. These worries weighed on equity valuations and contributed to market weakness after initial rally on pro-business policy hopes. |
Tariffs Growth Recession Policy Valuations | |
RatesConcerns about economic weakness led markets to anticipate additional rate cuts from the Federal Reserve. More rate-sensitive assets like longer-dated Treasuries gained the most, while the bond market delivered solid gains amid optimism about potential interest rate cuts. |
Federal Reserve Treasuries Economic Weakness Rate Cuts Bonds |
| 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 |
|---|---|
| AMAT | semiconductor-equipment company Applied Materials, Inc. contributed to relative performance, as the firm benefited from robust chip demand amid the rapid build-out of data centers |
| VLO | Overweights in petroleum refiner Valero Energy Corp. and Suncor Energy, Inc., a Canadian integrated energy firm, also helped as geopolitical turmoil pushed up commodity prices |
| SU | Overweights in petroleum refiner Valero Energy Corp. and Suncor Energy, Inc., a Canadian integrated energy firm, also helped as geopolitical turmoil pushed up commodity prices |
| XOM | a lack of exposure to another strong performer in the energy sector, ExxonMobil Corp., detracted from the fund's relative performance |
| MSFT | the fund's largest individual detractor was Microsoft Corp., which saw its shares fall on concerns about some of the company's AI initiatives. We added to the fund's position in this software maker, however, because of the firm's long-term competitive strength, large cash stake, and what we saw as its reasonable valuation as of quarter end |
| Ticker | Put/Call | Amount Bought | Shares Bought | % Change | Weight % |
|---|---|---|---|---|---|
| No Recent Buys Data | |||||
| Ticker | Put/Call | Amount Sold | Shares Sold | % Change | Weight % | Status |
|---|---|---|---|---|---|---|
| No Recent Sells Data | ||||||
| Industry | Prev Quarter % | Current Quarter % | Change |
|---|---|---|---|
| No industry data available | |||
