John Hancock Freedom 529 - Annual report 6/30/15
John Hancock Freedom 529 - Annual report 6/30/15
1 Table of contents 3 John Hancock Freedom 529 Letter 4 Investment commentary 6 Long-term returns 9 Portfolio highlights—Enrollment-based portfolios 9 Portfolio 2033–2036 10 Portfolio 2029–2032 11 Portfolio 2025–2028 12 Portfolio 2021–2024 13 Portfolio 2017–2020 14 College Portfolio 15 Portfolio highlights—Static portfolios 15 Future Trends Portfolio 16 Equity Portfolio 17 Fixed Income Portfolio 18 Short-Term Bond Portfolio 19 JH Money Market Portfolio 20 Portfolio highlights—Lifestyle portfolios 20 Lifestyle Growth 529 Portfolio 21 Lifestyle Balanced 529 Portfolio 22 Lifestyle Moderate 529 Portfolio 23 Portfolio highlights—Individual portfolios 23 T.
Rowe Price New Horizons 529 Portfolio 24 Jennison Capital Appreciation 529 Portfolio 25 T. Rowe Price Small-Cap Stock 529 Portfolio 26 T. Rowe Price Blue Chip Growth 529 Portfolio 27 Templeton International Value 529 Portfolio 28 T. Rowe Price Mid-Cap Value 529 Portfolio 29 T. Rowe Price Equity Income 529 Portfolio 30 American Mutual 529 Portfolio 32 Selected financial data John Hancock Freedom 529
3 John Hancock Freedom 529 Letter 1 Diversification does not guarantee a profit or eliminate the risk of a loss. 2 How America Saves for College 2015, Sallie Mae, January 2015. This commentary reflects the CEO’s views as of 6/30/15.They are subject to change at any time. For more up-to-date information, you can visit our website at jhinvestments.com. Dear College Saver: Economic growth in the United States has been relatively robust over the past year, with employment, housing, and corporate profits all strengthening.The U.S. Federal Reserve has widely signaled its intention to begin raising short-term interest rates this year in response to more robust economic activity.
Outside the United States, economies have struggled to replicate the kind of success we have enjoyed at home, with Europe and, more recently, China taking steps to jump-start flagging economies or stem the pace of economic slowdown.
This divergence of economic health around the world has created volatility in global markets, including in the United States.At the time of this writing, stocks have experienced their first correction (a decline of 10% or more) since 2011. Unpleasant as they are, these periods can ultimately be beneficial to the long-term health of markets, resetting valuations and investor expectations on a more realistic trajectory.The near-term challenge for many investors will be maintaining the discipline to stick to a well-constructed, long-term financial plan in the face of short-term market dynamics.As always, we recommend that your first course of action be a conversation with your financial advisor.
The benefits of planning1 We also believe investors can be well served by owning the kind of broadly diversified portfolios available in the John Hancock Freedom 529 Plan. Our portfolios are designed to offer a deeper level of diversification through a mix of different asset classes, managers, investment strategies, or securities in every portfolio.This diversification can be helpful over time in mitigating the effects of changing global markets.Your steady contributions are another key factor in your Plan’s success. More than one-quarter of parents saving for college (27%) use a 529 Plan and 41% use an automatic investment feature.2 Enhancements to the Plan Enhancing investment flexibility and expanding your Plan’s menu of investment choices are two ways we seek to help you build a more resilient college savings portfolio.That’s why I’m pleased to highlight the following enhancements to the John Hancock Freedom 529 Plan: Effective April 2015, the John Hancock Disciplined Value International Fund and John Hancock International Growth Fund were added to the Enrollment-Based Portfolios and the static Equity Portfolio to complement and broaden the existing international allocation within those portfolios.
In December 2014, legislation was approved that allows Account Holders to make investment changes twice per year per Beneficiary, up from once per year per Beneficiary. These and other enhancements can be found in your updated Plan Disclosure Document, which you can find in the college savings section of jhinvestments.com. We know you have many choices when it comes to saving for your child’s education, and on behalf of everyone at the firm, I thank you for choosing John Hancock Freedom 529. Sincerely, Andrew G.Arnott President and CEO John Hancock Investments
4 Barclays U.S.Aggregate Bond Index MSCI EAFE Index Russell 2000 Index Nasdaq Composite Index* S&P 500 5.30 13.13 4.75 6.49 5.88 -3.82 -0.10 1.86 1.23 7.42 Market Commentary Market performance has a direct effect on the overall performance of investments in the John Hancock Freedom 529 Plan.The following is designed to provide a summary of market performance for the period ended June 30, 2015.
Stocks Gained Amid Heightened Volatility U.S. stocks generated solid gains for the 12-month reporting period. According to recent government estimates, the U.S. economy contracted at an annualized real rate of 0.2% in the first quarter of 2015. Transitory factors, such as harsh winter weather, a stronger dollar, a West Coast ports strike, and plunging oil prices in the second half of 2014, contributed to the contraction. Over the last 12 months, however, U.S. economic growth has been relatively strong compared with growth in developed Asian and European countries.We believe the economy generated better growth in the second quarter as evidenced by increased consumer spending, a jump in home sales, a pickup in exports, and solid jobs and income growth.
There were periods of heightened market volatility amid intermittent concerns about sluggish global growth, geopolitical tensions in Ukraine and the Middle East, and fears that the Federal Reserve would raise short-term U.S. interest rates sooner than the expected mid-2015 time frame.Additionally, fears of a Greek exit from the eurozone stoked investor concerns at the end of the reporting period. Stocks in developed non-U.S. markets declined in U.S. dollar terms over the last 12 months and lagged U.S. shares, but local currency returns were solidly higher. Emerging markets equities also declined in U.S.
dollar terms but recorded gains in local currency terms during the reporting period.
The U.S. dollar strengthened markedly against most currencies. Much of the dollar strength stemmed from diverging monetary policies and economic growth prospects for the U.S. and overseas economies. Bonds Deliver Steady Results Ahead Of Possible Fed Action U.S. bonds produced positive returns over the last year. Longer-term Treasuries posted good results as yields declined despite pressure from the Fed’s decision to curtail and then end its asset purchases in October 2014.Asset-backed and agency mortgage-backed securities also recorded solid gains. High yield bonds, which trailed investment-grade issues in late 2014, performed well in the first half of 2015, supported by rising oil prices, moderate levels of new issuance, and demand for fixed income investments with above-average yield.
Local currency bonds in developed and emerging markets declined sharply in dollar terms, hurt by the dollar’s appreciation, while U.S. dollar-denominated emerging markets debt posted more modest losses.
Although the Fed could begin raising interest rates later in 2015, many global central banks, including the European Central Bank and the Bank of Japan, are in the midst of aggressive stimulus policies. Fed Chair Janet Yellen has repeatedly stated that the central bank’s first Investment commentary GLOBAL MARKET RETURNS AS OF 6/30/15 (%) Periods ended 6/30/15 ¢ ¢ 6-month return 12-month return *Principal return only. Russell Investment Group is the source and owner of the trademarks, service marks, and copyrights related to the Russell indexes. Russell is a trademark of Russell Investment Group.
MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein.The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products.This report is not approved, reviewed, or produced by MSCI.