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Thursday, July 07, 2016

John Hancock Slashes TDF Fees

Reported by Gerelyn Terzo

John Hancock Investments [profile] is paying it forward to investors.

Todd Cassler
John Hancock Investments
President of Institutional Distribution
The Boston-based investment manager cut fees on its suite of target date funds (TDFs) in addition to four other mutual funds comprised of $14.4 billion in total assets.

Changes to the fee structure, which MFWire has learned took effect on July 1, include:
  • John Hancock Retirement Living Portfolios: 9 basis point reduction

  • John Hancock Enduring Assets Fund: 30 basis point reduction

  • John Hancock Investment Grade Bond Fund: 30 basis point reduction

  • John Hancock Strategic Income Opportunities Fund: additional breakpoints added to the fund's expense schedule

  • John Hancock Value Equity Fund: 9 basis point reduction

The fee reductions apply to all share classes across the TDFs as well as the John Hancock Enduring Assets Fund, the John Hancock Investment Grade Bond Fund and the John Hancock Value Equity Fund.

A catalyst for the fee changes is a rise in assets under management at John Hancock that the manager of managers wants to share with investors.

Todd Cassler, president of institutional distribution at John Hancock Investments, tells MFWire:
All else being equal, we’ve found that lower expenses tend to prompt greater interest and net inflows -- especially in the highly fee-sensitive retirement plan marketplace. Fee cuts can foster a virtuous circle that benefits retirement plan participants, plan fiduciaries, and, by extension, our business as well. We view this as a classic win-win-win scenario.
It's not the first time John Hancock Investments has introduced more competitive fees. "Prior to this month’s expense cuts, John Hancock Investments last enacted across-the-board fee reductions for John Hancock Retirement Living Portfolios in 2014, a move that helped us promote a more cost-conscious, open-architecture active management target- date offering to plan fiduciaries," says Cassler.

Details of the fee changes will become available in the latest fund prospectuses.


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