EQUITIES. Making the most of the market s long-term potential

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Maryann Cummings
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1 EQUITIES Making the most of the market s long-term potential

2 Three things to know about the stock market 1 It s one of the best ways to build wealth Stocks have outpaced bonds and inflation over time, despite a litany of volatility-inducing events More than any other investment, stocks represent the dynamic nature and potential of a country s economy. Stocks have helped millions of investors build wealth, outpacing bonds and inflation over the long term despite wars, recessions, and a host of other setbacks along the way. n Stocks (S&P 500 Index) $10,000,000 n Bonds (Bloomberg Barclays U.S. Aggregate Bond Index) 1987 Black Monday stock market crash 2 It s global 1985 Savings and loan crisis begins Opportunities to invest in stocks from outside the United States have grown dramatically in recent decades as mature and open up to foreign 1,000, Unemployment hits 10% investment. U.S. businesses have also become more global over time, serving new consumer and sourcing a greater portion of their 1979 Iran hostage crisis begins revenues from overseas. 100, Nearly half of the world s stock market opportunity lies outside the United States Global stock market capitalization 1 are home to: 2017 Non-U.S. 48% U.S. 52% 7 of the 10 largest energy companies 6 of the 10 largest banks 5 of the 10 largest materials companies Source: For Global stock market capitalization, data is from MSCI Inc., as of 1/31/18. For largest companies, data is from Morningstar, Inc., as of 1/31/ Market capitalization is the of a corporation determined by the market price of its issued and outstanding common stock. Global stock market capitalization shown here reflects country weights in the MSCI All Country World Index, which tracks the performance of publicly traded large- and mid-cap stocks of companies in 23 developed and 23 emerging. It is not possible to invest directly in an index. Source for the mountain chart (above): John Hancock Investments, The S&P 500 Index tracks the performance of 500 of the largest publicly traded companies in the United States. The Bloomberg Barclays U.S. Aggregate Bond Index tracks the performance of U.S. investment-grade bonds in government, asset-backed, and corporate debt. The Consumer Price Index is an index of the variation in prices paid by typical consumers for retail goods and other items. It is not possible to invest directly in an index. Past performance does not guarantee future results.

3 Bull lasted longer and had more impact Since 1956, the market completed 11 bull and 11 bear. The bear averaged a decline of 27% and lasted only 14 months in duration, while the bull averaged a gain of 155% and lasted 51 months. Source: S&P Dow Jones Indices, n Inflation (Consumer Price Index) n Recession 1991 Persian Gulf War 1998 Long-Term Capital Management collapse, President Clinton impeached 1994 Mexican peso crisis 2000 Tech bubble bursts 2002 Enron, WorldCom bankruptcies 2008 Lehman Brothers bankruptcy 2011 U.S. debt downgraded 2016 Oil prices sink to multi-year lows $10,067,612 $2,046, September 11 terrorist attacks 1997 Asian currency crisis 2003 Iraq invasion 2009 European sovereign debt crisis begins $459, Corrections are normal On any given day, the market can seem like a popularity contest, where investors emotions decide which stocks get punished and which get rewarded. Occasionally, the market will also decline when investors believe it has grown too quickly. The challenge for investors is to ride out these temporary storms and realize that while the market doesn t go up in a straight line, it has gone up over time. The market will often experience setbacks before moving higher S&P 500 Index ( ) n Calendar year return n Intrayear decline 40% Source: Standard & Poor s, John Hancock Investments, as of 12/31/17. It is not possible to invest directly in an index. Past performance does not guarantee future results. 3

4 Combining multiple equity strategies can make for a smoother ride Over time, diversifying across several different types of stocks can help manage risk and potentially boost returns because different segments of the stock market are typically tied to varying conditions in the underlying economy. While diversification can t prevent a loss, it can temper volatility and help investors avoid the emotional ups and downs of investing that cause many to abandon well-made financial plans. There s no telling which equity strategy will be the best performing from year to year Annual returns of common equity categories WORST PERFORMER BEST PERFORMER 28.92% 36.85% 38.44% 38.44% 38.54% 40.22% 43.06% 44.32% 53.18% 79.02% 46.29% 37.99% 37.21% 34.47% 34.21% 32.46% 20.58% 19.69% 29.09% 26.38% 24.75% 24.50% 20.54% 19.20% 16.71% 15.51% 8.21% 2.64% 0.39% 1.38% 1.65% 2.91% 4.79% 5.50% 11.73% 18.17% 18.63% 18.51% 18.05% 17.90% 17.51% 17.03% 15.81% 15.26% 14.59% 43.30% 35.74% 34.52% 33.48% 33.46% 32.53% 29.26% 23.29% 2.27% 14.75% 13.45% 13.05% 11.90% 7.08% 5.60% 4.22% 1.82% 4.48% 5.67% 0.20% 0.39% 1.38% 3.37% 3.83% 4.78% 7.47% 14.60% 4 Source: Morningstar Direct, John Hancock Investments, are represented by the MSCI Markets Index, which tracks the performance of publicly traded large- and mid Growth Index, the Russell 1000 Value Index, the Russell Midcap Growth Index, the Russell Midcap Value Index, the Russell 2000 Growth Index, and the Russell 2000 Value Index. These indexes track higher price-to-book ratios and higher forecasted s; and indexes track those companies with lower price-to-book ratios and lower forecasted s. is represen of companies in those regions. Total returns are calculated gross of foreign withholding tax on dividends. are represented by an equal-weighted blend of all eight categories sho indicative of future risk, and is not a predictor of returns. Sharpe ratio is a measure of excess return per unit of risk, as defined by standard deviation. A higher Sharpe ratio suggests better risk-adjuste

5 Consider this: % 37.75% Reducing risk doesn t have to mean sacrificing returns Even a simple diversified strategy of owning all equity categories in equal amounts produced competitive risk-adjusted returns, as measured by Sharpe ratio. Average return 10.00% Volatility (standard deviation) 22.59% Risk-adjusted return (Sharpe ratio) 0.78 Holding stocks for longer periods of time can greatly diminish the effects of short-term volatility. Since 1950, 12-month returns of the S&P 500 Index have been as high as 53% and as low as 45%. However, over 20-year rolling periods, annualized returns are much less extreme, with a high of 14% and a low of 2% % 30.21% 9.19% 20.08% 0.64 Range of returns Annualized returns of the S&P 500 Index over rolling periods, % 25.62% 9.10% 19.98% 0.60 Highest return Lowest return 13.49% 25.27% 9.10% 18.48% % 11.60% 22.17% 8.17% 18.32% % 21.98% 7.14% 18.86% % 13.66% 7.10% 17.86% % 13.34% 2.42% 15.88% % 7.84% 2.02% 15.27% cap emerging-market stocks. Large-, mid-, and small-cap and stocks and are represented, respectively, by the Russell 1000 the performance of publicly traded large-, mid-, or small-cap companies in the United States; indexes track those companies with ted by the MSCI Europe, Australasia, and Far East (EAFE) Index, which tracks the performance of publicly traded large- and mid-cap stocks wn in the above chart. It is not possible to invest directly in an index. Standard deviation measures performance fluctuation, may not be d performance. Past performance does not guarantee future results. 12 month 5 year 10 year Source: Morningstar, as of 12/31/ year 5

6 The benefits of a diversified portfolio Diversifying the equity strategies in your portfolio can open up new sources of investment opportunity around the world while also potentially improving your portfolio s overall risk/return profile. A diversified equity strategy has helped increase return potential 20-year performance results Traditional stock portfolio stock portfolio 10% n U.S. stocks n Value stocks n Growth stocks 100% 15% 40% n Developed foreign market stocks n -market stocks 15% 20% Annualized return 6.46% 6.62% Sharpe ratio Standard deviation 14.86% 15.34% Ending of $100,000 invested 20 years ago (rebalanced quarterly) $349,541 $360,526 6 Diversification does not guarantee a profit or eliminate the risk of a loss. Source: Morningstar Direct, as of 3/31/18. This is for illustrative purposes only. U.S. stocks are represented by the S&P 500 Index, which tracks the performance of 500 of the largest publicly traded companies in the United States. Value stocks are represented by the Russell 3000 Value Index, an unmanaged index of those companies in the Russell 3000 Index with lower price-to-book ratios and lower forecasted s. Growth stocks are represented by the Russell 3000 Growth Index, an unmanaged index of those companies in the Russell 3000 Index with higher price-to-book ratios and higher forecasted s. Developed foreign market stocks are represented by the MSCI World ex-usa Index, which tracks the performance of publicly traded large- and mid-cap stocks of developed-market companies outside the United States. Total returns are calculated gross of foreign withholding tax on dividends. -market stocks are represented by the MSCI Markets Index, which tracks the performance of publicly traded large- and mid-cap emerging-market stocks. It is not possible to invest directly in an index. Past performance does not guarantee future results. Sharpe ratio is a measure of excess return per unit of risk, as defined by standard deviation. A higher Sharpe ratio suggests better risk-adjusted performance. Standard deviation is a statistical measure of the historic volatility of a portfolio. It measures the fluctuation of a fund s periodic returns from the mean or average. The larger the deviation, the larger the standard deviation and the higher the risk. Value stocks may decline in price. Large company stocks could fall out of favor. Foreign investing, especially in emerging, has additional risks, such as currency and market volatility and political and social instability, and illiquid securities may be difficult to sell at a price approximating their. Hedging and other strategic transactions may increase volatility and result in losses if not successful. Growth stocks may be more susceptible to earnings disappointments. A portfolio concentrated in one sector or that holds a limited number of securities may fluctuate more than a diversified portfolio. Fund distributions generally depend on income from underlying investments and may vary or cease altogether in the future. The stock prices of midsize and small companies can change more frequently and dramatically than those of large companies. Currency transactions are affected by fluctuations in exchange rates. Please see the funds prospectuses for additional risks. This material is not intended to be, nor shall it be interpreted or construed as, a recommendation or providing advice, impartial or otherwise. John Hancock Investments and its representatives and affiliates may receive compensation derived from the sale of and/or from any investment made in its products and services.

7 Equity investing with John Hancock Investments We offer a range of equity funds managed by specialized portfolio teams with proven track records in those strategies. Average annual total returns as of 3/31/18 2 (%) Ticker 1 year 3 year 5 year 10 year Life of fund John Hancock Disciplined Value Fund Managed by Boston Partners I: 1/2/97 A: 1/16/97 Class I (without sales charge) JVLIX Class A (without sales charge) JVLAX Class A (with 5% max. sales charge) JVLAX Class I net expense ratio (what you pay): 0.81% Gross expense ratio: 0.81% Class A net expense ratio (what you pay): 1.07% Gross expense ratio: 1.07% John Hancock Disciplined Value Fund Managed by Boston Partners I: 12/30/11 A: 12/30/11 Class I (without sales charge) JDVIX Class A (without sales charge) JDIBX Class A (with 5% max. sales charge) JDIBX Class I net expense ratio (what you pay): 0.98% 3 Gross expense ratio: 1.01% Class A net expense ratio (what you pay): 1.30% 3 Gross expense ratio: 1.32% John Hancock Fundamental Large Cap Core Fund Managed by John Hancock Asset Management I: 3/1/01 A: 9/30/84 Class I (without sales charge) JLVIX Class A (without sales charge) TAGRX Class A (with 5% max. sales charge) TAGRX Class I net expense ratio (what you pay): 0.78% 3 Gross expense ratio: 0.78% Class A net expense ratio (what you pay): 1.04% Gross expense ratio: 1.04% John Hancock Global Shareholder Yield Fund Managed by Epoch Investment Partners I: 3/1/07 A: 3/1/07 Class I (without sales charge) JGYIX Class A (without sales charge) JGYAX Class A (with 5% max. sales charge) JGYAX Class I net expense ratio (what you pay): 0.84% 4 Gross expense ratio: 0.97% Class A net expense ratio (what you pay): 1.09% 4 Gross expense ratio: 1.29% John Hancock U.S. Global Leaders Growth Fund Managed by Sustainable Growth Advisers I: 5/20/02 A: 9/29/95 Class I (without sales charge) USLIX Class A (without sales charge) USGLX Class A (with 5% max. sales charge) USGLX Class I net expense ratio (what you pay): 0.91% Gross expense ratio: 0.91% Class A net expense ratio (what you pay): 1.17% Gross expense ratio: 1.17% Why this fund? The fund s veteran management team takes an all-weather approach, seeking to limit downside risk in falling while keeping pace in rising. The fund seeks to outperform non-u.s. equity over time by limiting downside risk in falling while keeping pace in rising. The fund is designed to be opportunistic in its positioning within both and stocks, targeting quality companies that may be priced below their long-term potential. The fund invests in worldwide and employs strong risk controls to generate income across all market environments with a lower level of volatility. The fund seeks a focused portfolio of high-quality U.S. companies characterized by pricing power, recurring revenues, and global reach. Ask your advisor Ask your financial advisor how equity funds from John Hancock Investments can help you better position your portfolio for building wealth. 2 Returns for John Hancock Disciplined Value Fund prior to the commencement date of Class A and Class I shares are those of Robeco Boston Partners Large Cap Value Fund and have not been adjusted for expenses; otherwise, returns would vary. John Hancock Disciplined Value Fund is the successor to Robeco Investment Management Equity Fund (predecessor fund) and was first offered on 9/29/14. Returns prior to this date are those of the predecessor fund s institutional class shares, launched on 12/30/11, and may be higher than if adjusted to reflect the expenses of any other share classes. John Hancock Fundamental Large Cap Core Fund was incepted on 10/4/49. Performance prior to 9/30/84 is not available for Class A shares. On 5/17/02, John Hancock U.S. Global Leaders Growth Fund acquired all of the assets of the Sustainable Growth Advisers, LP U.S. Global Leaders Growth Fund, the fund s predecessor, pursuant to a reorganization. Performance prior to 5/17/02 reflects the performance of the fund s predecessor. 3 Represents the effect of a fee waiver and/or expense reimbursement through 2/28/19. 4 Represents the effect of a fee waiver and/or expense reimbursement through 2/28/19 for John Hancock Disciplined Value Fund, through 2/28/18 for John Hancock Fundamental Large Cap Core Fund, and through 6/30/18 for John Hancock Global Shareholder Yield Fund, and is subject to change. The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative, and results for other share classes will vary. Shares will fluctuate in and, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance cited. For the most recent month-end performance, visit jhinvestments.com. 7

8 John Hancock Investments A trusted brand John Hancock Investments is a premier asset manager representing one of America s most trusted brands, with a heritage of financial stewardship dating back to Helping our shareholders pursue their financial goals is at the core of everything we do. It s why we support the role of professional financial advice and operate with the highest standards of conduct and integrity. A better way to invest We serve investors globally through a unique multimanager approach: We search the world to find proven portfolio teams with specialized expertise for every strategy we offer, then we apply robust investment oversight to ensure they continue to meet our uncompromising standards and serve the best interests of our shareholders. Results for investors Our unique approach to asset management enables us to provide a diverse set of investments backed by some of the world s best managers, along with strong risk-adjusted returns across asset classes. Request a prospectus or summary prospectus from your financial advisor, by visiting jhinvestments.com, or by calling us at The prospectus includes investment objectives, risks, fees, expenses, and other information that you should consider carefully before investing. Connect with John Hancock jhinvestmentsblog.com John Hancock Funds, LLC Member FINRA, SIPC 601 Congress Street Boston, MA jhinvestments.com NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE. NOT INSURED BY ANY GOVERNMENT AGENCY. MF GROWTHBR 4/18

INTERNATIONAL EQUITIES. Charting a course for global opportunities

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