John Hancock Corporate Bond ETF underperformed its benchmark, the Bloomberg U.S. Corporate Bond Index. Sector allocation and yield curve positioning weighed on performance while individual security selection produced mixed results. Given the high degree of geopolitical uncertainty, we continue to take a long-term view in managing the fund, avoiding any reactionary moves to current events.
U.S. investment-grade corporate bonds gained in the third quarter. The fund outperformed its benchmark, the Bloomberg U.S. Corporate Bond Index. Investment-grade corporate bonds outperformed the broader bond market, benefiting from a risk-on market environment.
U.S. investment-grade corporate bonds declined in Q4 2024 despite Fed rate cuts, driven by strong economic data and geopolitical factors. The fund outperformed the Bloomberg U.S. Corporate Bond Index due to superior individual security selection, though suboptimal maturity structure detracted from performance. Key contributors to outperformance included bonds from Ally Financial and Viatris, while Microsoft and Tapestry detracted.
| Name | Quantity | Cost | Value | Profit ($) | Gain (%) |
|---|---|---|---|---|---|
| CAL CoreCap Advisors LLC CoreCap Advisors LLC | 31,120 | $663,925.31 | $652,586.4 | -$11,338.91 | -1.71% |
| GBW Granite Bay Wealth Management LLC Granite Bay Wealth Management LLC | 1.79M | $37.86M | $37.65M | -$215,168.26 | -0.57% |
| EM Erin Mccann Simplicity Wealth LLC | 98,561 | $2.11M | $2.07M | -$42,127.54 | -2% |
Lydia Moore MRP Capital Investments LLC | 42,634 | $895,384.1 | $894,034.98 | -$1,349.12 | -0.15% |
Envestnet Portfolio Solutions Inc. Envestnet Portfolio Solutions, Inc. | 14,499 | $306,944 | $305,131.45 | -$1,812.55 | -0.59% |
| ARCA Exchange | US Country |
The company specializes in financial investment, focusing primarily on corporate bonds. It operates under a principle of committing at least 80% of its net assets, including any borrowed funds for investment purposes, into corporate bonds. Remaining adaptable, the company also allocates a portion of its assets toward investment-grade bank loans and maintains liquidity through investments in cash and equivalents. Additionally, the company is open to international investment opportunities, allowing for up to 10% of its total assets to be invested in securities denominated in foreign currencies. This strategic diversification is tailored to manage risk and capitalize on various financial instruments to achieve favorable returns.
As the core of its investment portfolio, the company focuses on pouring at least 80% of its net assets, along with any funds borrowed for investment purposes, into corporate bonds. This strategy is primarily aimed at generating income through interest, thereby providing a steady return on investment while managing risk.
Up to 20% of the company's net assets can be allocated towards investment-grade bank loans, including loan participations. This diversification helps in enhancing the portfolio’s yield potential, offering a blend of fixed returns similar to bonds but with possibly higher yields reflective of the additional risk associated with lending.
Investment in cash and cash equivalents is also a part of the company's strategy, providing liquidity and safeguarding assets against market volatility. This precautionary measure ensures that a portion of the portfolio can be quickly accessed or reallocated in response to market fluctuations or to exploit new investment opportunities.
Understanding the value of geographical diversification, the company allows for up to 10% of its total assets to be allocated in securities denominated in foreign currencies. This not only hedges against domestic market fluctuations but also opens doors to potentially higher returns from international markets, adding a global dimension to the investment portfolio.