John Hancock Reduces Mutual Fund Expenses

As of February 1, for nearly all R6 shares (an institutional share class that includes qualified 401(k) plans, endowments and foundations, among others), the funds’ adviser has agreed to contractually waive and/or reimburse all class-specific expenses. This expense reduction has been in place on a voluntary basis since January 1, 2014. As a result, fund expenses have decreased on average by eight basis points, and some funds have decreased expenses up to 20 basis points. 

The firm is reducing sales charges for Class A shares on 16 fixed-income funds, including the elimination of the front-end sales charges on the John Hancock Floating Rate Income Fund and the John Hancock Short Duration Credit Opportunities Fund for investments of $250,000 or more. John Hancock Investments is also modifying the CDSC schedule for Class A shares of John Hancock Floating Rate Income Fund and John Hancock Short Duration Credit Opportunities Fund.

“We’re pleased to open the New Year by continuing our program of fund expense reductions, this time on nearly our entire fixed-income fund lineup. These latest fee cuts will help put more of our shareholders’ investment dollars to work more quickly,” says Andrew G. Arnott, president and CEO.

For the John Hancock Floating Rate Fund, initial investments between $250,000 and $499,999 and between $500,000 and $999,999, which had 2% and 1.5% sales charges, respectively, will now have no sales charge. Initial investments of $1 million or more will continue to carry no sales charge. For investments of less than $100,000 sales charges will drop from 3% to 2.5%, and for investments between $100,000 to $249,999 will go from 2.5% to 2%.

The John Hancock Short Duration Credit Opportunities Fund will see investments between $250,000 and $499,999 and between $500,000 and $999,999, which had 2.75% and 2% sales charges, respectively, carry no sales charge. Initial investments of $1 million or more continue to carry no sales charge. For investments of less than $100,000 the sales charge will drop from 4.5% to 2.5%, and for investments of between $100,000 to $249,999, the fee will drop from 3.75% to 2%.

Fourteen other fixed-income funds will see charges for initial investments up to $100,000 decrease from 4.5% to 4%. For investments between $100,000 and $249,000 sales charges will drop from 3.75% to 3.50%. Investments between $250,000 and $499,999 will now have a sales charge of 2.50%.  Investments between $500,000 and $999,999 will continue to have a sales charge of 2%, and investments of $1 million or more will continue to carry no sales charge.

The funds with this new sales charge schedule are as follows:  John Hancock Bond Fund, John Hancock Core High Yield Fund, John Hancock Emerging Markets Debt Fund, John Hancock Global Income Fund, John Hancock Government Income Fund, John Hancock Focused High Yield Fund, John Hancock Income Fund, John Hancock Investment Grade Bond Fund, John Hancock Strategic Income Opportunities Fund, John Hancock California Tax-Free Income Fund, John Hancock High Yield Municipal Bond Fund, John Hancock Massachusetts Tax-Free Income Fund, John Hancock New York Tax-Free Income Fund, John Hancock Tax-Free Bond Fund.

Purchases of Class A shares at net asset value where a front end sales charge is not imposed are subject to a contingent deferred sales charge (CDSC). Effective February 3, for John Hancock Floating Rate Income Fund and John Hancock Short Duration Credit Opportunities Fund, the CDSC rate imposed on Class A shares will be lowered from 1% to 0.50% for purchases of $250,000 or more that are not subject to a front end sales charge. Additionally, the period of time for which a CDSC may be collected will be extended from 12 months to 18 months from the date of purchase. For the other 14 fixed-income funds, the CDSC remains 1% for purchases of Class A shares of $1million or more that were not subject to a front end sales charge and are sold within 12 months from the date of purchase.

Moreover, effective February 3, any exchanges into Class A shares will remain subject to the original CDSC schedule associated with the initial purchase of shares that are being exchanged.  For purposes of determining the holding period for calculating the CDSC, shares will continue to age from their original purchase date.