Q3 2017 Fund commentary ETF John Hancock Multifactor ETFs Seek: To pursue results that closely correspond, before fees and expenses, to the indexes Use for: Core or targeted equity exposure MANAGED BY Lukas J. Smart, CFA On the funds since Investing since 2003 Joel P. Schneider On the funds since Investing since 2011 Dimensional Fund Advisors A pioneer in applying insight from academic research to a systematic investment process that pursues higher expected returns advanced portfolio design and implementation Highlights Overall, the U.S. stock market generated positive performance, but underperformed developed and emerging markets. Eight of the nine multifactor sector exchange-traded funds (ETFs) produced positive returns and the Multifactor Consumer Staples, Financials, and Materials ETFs outperformed their benchmarks. The Multifactor Consumer Discretionary, Energy, Healthcare, Industrials, and Utilities ETFs underperformed their benchmarks, while the Multifactor Technology ETF performed in line with its benchmark. Market review and outlook The U.S. market had positive performance, but underperformed both developed and emerging markets. Along the market capitalization dimension, small caps outperformed large caps, while mid caps had the weakest relative performance, underperforming large and small caps. Along the relative price dimension, large-cap value stocks underperformed large-cap growth stocks and small-cap value stocks underperformed small-cap growth stocks. Profitability premiums were mixed in the U.S. market. High-profitability stocks outperformed among large caps and underperformed among small caps. Compared with other market-cap-weighted measures of the market, indexes emphasize smaller capitalizations, lower relative price, and higher-profitability securities. Our ETFs, in turn, are designed to track their custom indexes. We believe that incorporating these dimensions of expected returns into an investment strategy offers the potential for outperformance over time, and we view an ETF as a vehicle well suited to our systematic and transparent investment approach. As a result of each ETF s diversified investment approach, performance is determined principally by broad trends within the defined sector rather than by the behavior of a limited group of securities within the asset class. Portfolio changes Changes were made to the funds as a result of a regularly scheduled reconstitution, the semiannual process by which the list of stocks and their weights in the indexes is upd, as well as any unscheduled changes to the indexes driven by company events. Reconstitutions ensure the funds, and the custom indexes they track, maintain their intended exposure to the dimensions of expected returns. This commentary reflects the views of the portfolio managers 9/30/17. The managers views are subject to change as market and other conditions warrant. No forecasts are guaranteed. This commentary is provided for informational purposes only and is not an endorsement of any security, mutual fund, sector, or index. Dimensional Fund Advisors LP and their affiliates, employees, and clients may hold or trade the securities mentioned in this commentary.
John Hancock Multifactor ETFs John Hancock Multifactor Consumer Discretionary ETF (JHMC) Morningstar category: Consumer Cyclical Lipper category: Consumer Services Funds Amazon.com, Inc. 5.56 Comcast Corp., Class A 4.23 Home Depot, Inc. 3.69 The Walt Disney Company 2.87 McDonald s Corp. 1.95 Delphi Automotive PLC 1.81 Starbucks Corp. 1.74 Ross Stores, Inc. 1.67 Lowe s Companies, Inc. 1.61 Dollar General, Corp. 1.52 TOTAL 26.65 John Hancock Multifactor Consumer Discretionary ETF underperformed its benchmark, the Russell 1000 Consumer Discretionary Index. Our greater emphasis on higher-profitability stocks detracted from relative performance, as higher-profitability stocks generally underperformed lower-profitability stocks among large-cap stocks in the sector. Conversely, our emphasis on smaller stocks contributed positively to relative performance, as that segment of the market outperformed. Issuer capping also had a positive impact on the fund s relative performance. asset value 1.35 9.31 11.95 9.43 9/28/15 Market price 1.29 9.27 11.88 9.42 9/28/15 Consumer Discretionary Index 1.48 9.72 12.52 9.98 Russell 1000 Consumer Discretionary Index 2 1.51 13.10 15.18 13.42 Expense ratios (%) 1.07 0.50 8/31/18 John Hancock Multifactor Consumer Staples ETF (JHMS) Morningstar category: Consumer Defensive Lipper category: Consumer Goods Funds The Coca-Cola Company 5.84 The Procter & Gamble Company 5.82 PepsiCo, Inc. 5.70 Wal-Mart Stores, Inc. 5.58 Philip Morris International 5.09 Altria Group, Inc. 4.85 CVS Health Corp. 3.98 Costco Wholesale Corp. 3.49 The Kroger Company 2.98 Archer-Daniels-Midland Company 2.72 TOTAL 46.05 John Hancock Multifactor Consumer Staples ETF outperformed its benchmark, the Russell 1000 Consumer Staples Index. Our greater emphasis on smaller stocks and lower relative price (value) stocks had a positive impact on relative performance, as those stocks outperformed in the sector. Conversely, our emphasis on stocks with higher profitability detracted from relative performance, as higher-profitability stocks underperformed in the sector. asset value 1.14 3.61 2.23 3.30 3/28/16 Market price 1.30 3.45 2.10 3.22 3/28/16 Consumer Staples Index 1.01 3.99 2.70 3.80 Russell 1000 Consumer Staples Index 4 1.98 5.20 3.35 4.17 Expense ratios (%) 1.18 0.50 8/31/18 Market performance is determined using the bid/ask midpoint at 4 p.m., Eastern time, when the NAV is typically calculated; your returns may differ if you traded shares at other times. NAV is calculated by dividing the total value of all the securities in the fund s portfolio plus cash, interest, and receivables, minus any liabilities, by the number of fund shares outstanding. 1 Listed holdings are a portion of the fund s total and may change at any time. They are not recommendations to buy or sell any security. Data is expressed as a percentage of net assets and excludes cash and cash equivalents. 2 The Russell 1000 Consumer Discretionary Index tracks stocks in the consumer discretionary sector of the Russell 1000 Index. It is not possible to invest directly in an index. 3 (what you pay) represents the effect of a fee waiver and/or expense reimbursement and is subject to change. 4 The Russell 1000 Consumer Staples Index tracks stocks in the consumer staples sector of the Russell 1000 Index. It is not possible to invest directly in an index. 2
Q3 2017 All data as of 9/30/17 John Hancock Multifactor Energy ETF (JHME) Morningstar category: Equity Energy Lipper category: Natural Resources Funds Chevron Corp. 5.72 Exxon Mobil Corp. 5.61 Marathon Petroleum Corp. 4.73 Kinder Morgan, Inc. 4.22 Anadarko Petroleum Corp. 3.85 Valero Energy Corp. 3.83 EOG Resources, Inc. 3.74 Occidental Petroleum Corp. 3.50 The Williams Companies, Inc. 3.50 Andeavor 3.31 TOTAL 42.01 John Hancock Multifactor Energy ETF slightly underperformed its benchmark, the Russell 1000 Energy Index. Our greater emphasis on stocks with higher profitability detracted from relative performance, as stocks with higher profitability underperformed in the sector. Conversely, our greater emphasis on low relative price (value) stocks contributed positively to relative performance, as value stocks outperformed high relative price (growth) stocks in the energy sector. Issuer capping also had a positive impact on relative performance. asset value 6.77 8.26 1.57 8.51 3/28/16 Market price 6.78 8.26 1.55 8.53 3/28/16 Energy Index 6.91 7.94 1.08 9.04 Russell 1000 Energy Index 2 6.84 7.15 0.69 8.90 Expense ratios (%) 1.15 0.50 8/31/18 John Hancock Multifactor Financials ETF (JHMF) Morningstar category: Financial Lipper category: Financial Services Funds JPMorgan Chase & Company 4.01 Bank of America Corp. 3.99 Berkshire Hathaway, Inc., Class B 3.88 Wells Fargo & Company 3.71 Citigroup, Inc. 3.23 Visa, Inc., Class A 3.12 Mastercard, Inc., Class A 2.20 US Bancorp 1.55 The Goldman Sachs Group, Inc. 1.50 Capital One Financial Corp. 1.45 TOTAL 28.64 John Hancock Multifactor Financials ETF outperformed its benchmark, the Russell 1000 Financial Services Index. Our greater emphasis on stocks with higher profitability contributed positively to relative performance, as stocks with higher profitability outperformed in the financials sector. Real estate investment trusts (REITs) underperformed, and the index s inclusion of REITs detracted from its relative performance. Conversely, our greater emphasis on low relative price (value) mid-cap stocks detracted from relative performance, as mid-cap value stocks underperformed. asset value 5.04 12.59 32.21 19.86 9/28/15 Market price 5.02 12.51 32.19 19.86 9/28/15 Financials Index 5.17 12.94 32.89 20.45 Russell 1000 Financial Services Index 4 4.97 13.15 27.41 19.06 Expense ratios (%) 0.99 0.50 8/31/18 Market performance is determined using the bid/ask midpoint at 4 p.m., Eastern time, when the NAV is typically calculated; your returns may differ if you traded shares at other times. NAV is calculated by dividing the total value of all the securities in the fund s portfolio plus cash, interest, and receivables, minus any liabilities, by the number of fund shares outstanding. 1 Listed holdings are a portion of the fund s total and may change at any time. They are not recommendations to buy or sell any security. Data is expressed as a percentage of net assets and excludes cash and cash equivalents. 2 The Russell 1000 Energy Index tracks stocks in the energy sector of the Russell 1000 Index. It is not possible to invest directly in an index. 3 (what you pay) represents the effect of a fee waiver and/or expense reimbursement and is subject to change. 4 The Russell 1000 Financial Services Index tracks stocks in the financial services sector of the Russell 1000 Index. It is not possible to invest directly in an index. 3
John Hancock Multifactor ETFs John Hancock Multifactor Healthcare ETF (JHMH) Morningstar category: Health Lipper category: Health/Biotechnology Funds Johnson & Johnson 5.82 Pfizer, Inc. 5.25 UnitedHealth Group, Inc. 5.14 Amgen, Inc. 3.86 Merck & Company, Inc. 3.49 Abbvie, Inc. 2.94 Gilead Sciences, Inc. 2.81 Celgene Corp. 2.30 Cardinal Health, Inc. 2.24 Medtronic PLC 2.22 TOTAL 36.07 John Hancock Multifactor Healthcare ETF underperformed its benchmark, the Russell 1000 Healthcare Index. Our greater emphasis on mid-cap stocks and low relative price (value) stocks detracted from relative performance, as those segments of the market generally underperformed in the healthcare sector. Additionally, higher-profitability stocks underperformed lower-profitability stocks among smaller-cap stocks. However, higher-profitability stocks in the broader large-cap market outperformed and contributed positively to relative performance. Issuer capping also had a positive impact on relative performance. asset value 1.38 18.26 13.59 13.49 9/28/15 Market price 1.30 18.17 13.54 13.46 9/28/15 Healthcare Index 1.51 18.73 14.16 14.02 Russell 1000 Healthcare Index 2 3.36 20.27 15.36 14.36 Expense ratios (%) 1.06 0.50 8/31/18 John Hancock Multifactor Industrials ETF (JHMI) Morningstar category: Industrials Lipper category: Industrials Funds General Electric Company 2.88 3M Company 1.87 The Boeing Company 1.78 Union Pacific Corp. 1.67 Honeywell International, Inc. 1.54 United Technologies Corp. 1.50 Paccar, Inc. 1.33 Fiserv, Inc. 1.32 CSX Corp. 1.31 Accenture PLD, Class A 1.31 TOTAL 16.51 John Hancock Multifactor Industrials ETF underperformed its benchmark, the Russell 1000 Producer Durables Index. Our greater emphasis on low relative price (value) stocks detracted from relative performance, as value stocks generally underperformed high relative price (growth) stocks in the sector. Conversely, our greater emphasis on smaller stocks and stocks with higher profitability contributed positively to relative performance, as these securities outperformed in the sector. Issuer capping also had a positive impact on relative performance. asset value 5.02 15.92 23.78 20.84 3/28/16 Market price 4.89 15.81 23.65 20.78 3/28/16 Industrials Index 5.15 16.39 24.43 21.46 Russell 1000 Producer Durables Index 4 5.19 14.94 24.01 20.06 Expense ratios (%) 1.12 0.50 8/31/18 Market performance is determined using the bid/ask midpoint at 4 p.m., Eastern time, when the NAV is typically calculated; your returns may differ if you traded shares at other times. NAV is calculated by dividing the total value of all the securities in the fund s portfolio plus cash, interest, and receivables, minus any liabilities, by the number of fund shares outstanding. 1 Listed holdings are a portion of the fund s total and may change at any time. They are not recommendations to buy or sell any security. Data is expressed as a percentage of net assets and excludes cash and cash equivalents. 2 The Russell 1000 Healthcare Index tracks stocks in the healthcare sector of the Russell 1000 Index. It is not possible to invest directly in an index. 3 (what you pay) represents the effect of a fee waiver and/or expense reimbursement and is subject to change. 4 The Russell 1000 Producer Durables Index tracks stocks in the industrials sector of the Russell 1000 Index. It is not possible to invest directly in an index. 4
Q3 2017 All data as of 9/30/17 John Hancock Multifactor Materials ETF (JHMA) Morningstar category: Natural Resources Lipper category: Basic Materials Funds Dow Chemical Company 6.00 International Paper Company 5.99 Freeport-McMoRan, Inc. 5.62 Nucor Corp. 5.43 Monsanto Company 5.22 Praxair, Inc. 4.54 LyondellBasell Industries NV, Class A 4.50 Newmont Mining Corp. 4.49 PPG Industries, Inc. 4.37 Eastman Chemical Company 4.09 TOTAL 50.25 John Hancock Multifactor Materials ETF outperformed its benchmark, the Russell 1000 Materials and Processing Index. Our greater emphasis on low relative price (value) stocks contributed positively to relative performance, as value stocks outperformed growth in the sector. Conversely, our greater emphasis on stocks with high profitability detracted from relative performance, as these securities underperformed. Issuer capping also had a negative impact on relative performance. asset value 7.72 15.91 22.88 21.41 3/28/16 Market price 7.45 15.75 22.72 21.32 3/28/16 Materials Index 7.77 16.25 23.40 21.95 Russell 1000 Materials and Processing Index 2 5.47 15.59 21.34 20.10 Expense ratios (%) 1.15 0.50 8/31/18 John Hancock Multifactor Technology ETF (JHMT) Morningstar category: Technology Lipper category: Science & Technology Funds Microsoft Corp. 5.72 Facebook, Inc., Class A 5.68 Apple, Inc. 5.41 Alphabet, Inc., Class A 4.72 Intel Corp. 4.42 Cisco Systems, Inc. 3.33 Oracle Corp. 3.07 International Business Machines Corp. 2.53 Texas Instruments, Inc. 1.81 Western Digital Corp. 1.79 TOTAL 38.48 John Hancock Multifactor Technology ETF slightly underperformed its benchmark, the Russell 1000 Technology Index. With low relative price (value) stocks underperforming high relative price (growth) stocks, our greater emphasis on value stocks detracted from relative performance. Conversely, our greater emphasis on smaller stocks contributed positively to relative performance, as smaller stocks outperformed in the technology sector. Issuer capping also had a positive impact on the fund s relative performance. asset value 8.17 25.33 26.89 26.60 9/28/15 Market price 7.99 25.26 27.13 26.62 9/28/15 Technology Index 8.30 25.76 27.40 27.12 Russell 1000 Technology Index 4 8.21 26.98 28.59 26.42 Expense ratios (%) 1.00 0.50 8/31/18 Market performance is determined using the bid/ask midpoint at 4 p.m., Eastern time, when the NAV is typically calculated; your returns may differ if you traded shares at other times. NAV is calculated by dividing the total value of all the securities in the fund s portfolio plus cash, interest, and receivables, minus any liabilities, by the number of fund shares outstanding. 1 Listed holdings are a portion of the fund s total and may change at any time. They are not recommendations to buy or sell any security. Data is expressed as a percentage of net assets and excludes cash and cash equivalents. 2 The Russell 1000 Materials and Processing Index tracks stocks in the materials sector of the Russell 1000 Index. It is not possible to invest directly in an index. 3 (what you pay) represents the effect of a fee waiver and/or expense reimbursement and is subject to change. 4 The Russell 1000 Technology Index tracks stocks in the technology sector of the Russell 1000 Index. It is not possible to invest directly in an index. 5
John Hancock Multifactor ETFs Q3 2017 All data as of 9/30/17 John Hancock Multifactor Utilities ETF (JHMU) Morningstar category: Utilities Lipper category: Utility Funds Edison International 5.62 Consolid Edison, Inc. 4.75 Public Service Enterprise Group, Inc. 4.62 Xcel Energy, Inc. 4.27 Exelon Corp. 4.19 Dominion Energy, Inc. 4.11 PG&E Corp. 3.85 NextEra Energy, Inc. 3.72 American Electric Power Company, Inc. 3.61 DTE Energy Company 3.33 TOTAL 42.07 John Hancock Multifactor Utilities ETF underperformed its benchmark, the Russell 1000 Utilities Index. Underperformance was primarily driven by differences in sector definition between the fund and index. Relative to most commercial measures of the utilities sector, our approach generally results in the fund maintaining greater allocations to securities of smaller-cap issuers and securities trading at lower prices relative to their book values. In the weightings of individual positions, we also place greater emphasis on companies that have demonstrated higher profitability. Additionally, the fund holds companies involved in the provision of gas, electric, and water power as well as energy trading or the provision of related infrastructure or services and excludes telecommunication services, a sector that is included in the benchmark. The fund s lack of exposure to telecommunication service securities held by the benchmark detracted from relative performance, as that subset of the index outperformed. Looking at holdings outside the telecommunications industry, our greater emphasis on low relative price (value) stocks also had a negative impact on relative performance, as that segment of the market underperformed. Conversely, our greater emphasis on mid-cap stocks contributed positively to relative performance, as mid caps outperformed large caps in the sector. With higherprofitability stocks outperforming lower-profitability stocks in the utilities sector, our greater emphasis on higher-profitability stocks also benefited relative performance. asset value 2.74 10.81 11.95 9.64 3/28/16 Market price 2.74 10.78 12.01 9.66 3/28/16 Utilities Index 2.87 11.31 12.61 10.27 Russell 1000 Utilities Index 2 4.30 4.45 7.17 6.70 Expense ratios (%) 1.18 0.50 8/31/18 Market performance is determined using the bid/ask midpoint at 4 p.m., Eastern time, when the NAV is typically calculated; your returns may differ if you traded shares at other times. NAV is calculated by dividing the total value of all the securities in the fund s portfolio plus cash, interest, and receivables, minus any liabilities, by the number of fund shares outstanding. 1 Listed holdings are a portion of the fund s total and may change at any time. They are not recommendations to buy or sell any security. Data is expressed as a percentage of net assets and excludes cash and cash equivalents. 2 The Russell 1000 Utilities Index tracks stocks in the utilities sector of the Russell 1000 Index. It is not possible to invest directly in an index. 3 (what you pay) represents the effect of a fee waiver and/or expense reimbursement and is subject to change. 6
WHAT YOU SHOULD KNOW BEFORE INVESTING Investing involves risks, including the potential loss of principal. There is no guarantee that a fund s investment strategies will be successful. Foreign investing has additional risks, such as currency and market volatility and political and social instability. Large company stocks could fall out of favor. The stock prices of midsize and small companies can change more frequently and dramatically than those of large companies, and value stocks may decline in price. A portfolio concentrated in one industry or sector or that holds a limited number of securities may fluctuate more than a diversified portfolio. Shares may trade at a premium or discount to their NAV in the secondary market, and a fund s holdings and returns may deviate from those of its index. These variations may be greater when markets are volatile or subject to unusual conditions. Errors in the construction or calculation of a fund s index may occur from time to time. 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. John Hancock Multifactor ETF shares are bought and sold at market price (not NAV), and are not individually redeemed from the fund. Brokerage commissions will reduce returns. Dimensional Fund Advisors LP receives compensation from John Hancock in connection with licensing rights to the indexes. Dimensional Fund Advisors LP does not sponsor, endorse, or sell, and makes no representation as to the advisability of investing in, John Hancock Multifactor ETFs. Request a prospectus or summary prospectus from your financial advisor, by visiting jhinvestments.com/etf, or by calling us at 800-225-5291. The prospectus includes investment objectives, risks, fees, expenses, and other information that you should consider carefully before investing. 7
Connect with John Hancock Investments: @JH_Investments jhinvestmentsblog.com John Hancock ETFs are distributed by Foreside Fund Services, LLC, and are subadvised by Dimensional Fund Advisors LP. Foreside is not affiliated with John Hancock Funds, LLC or Dimensional Fund Advisors LP. NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE. NOT INSURED BY ANY GOVERNMENT AGENCY. JHAN-2017-10-24-0771 ETFMFC 11/17