John Hancock Freedom 529 Annual report 6/30/7
John Hancock Freedom 529 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 0 Portfolio 2029 2032 Portfolio 2025 2028 2 Portfolio 202 2024 3 Portfolio 207 2020 4 College Portfolio 5 Portfolio highlights Static portfolios 5 Future Trends Portfolio 6 Equity Portfolio 7 Fixed Income Portfolio 8 Short-Term Bond Portfolio 9 Money Market Portfolio 20 Portfolio highlights Multimanager Lifestyle portfolios 20 Multimanager Lifestyle Growth 529 Portfolio 2 Multimanager Lifestyle Balanced 529 Portfolio 22 Multimanager Lifestyle Moderate 529 Portfolio 23 Portfolio highlights Individual portfolios 23 New Horizons Portfolio 24 Capital Appreciation Portfolio 25 Small-Cap Stock Portfolio 26 Blue Chip Growth Portfolio 27 International Value Portfolio 28 Mid-Cap Value Portfolio 29 Equity Income Portfolio 30 American Mutual Portfolio 32 Selected financial data
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John Hancock Freedom 529 Letter Dear College Saver: Equity markets generally delivered solid gains over the ended June 30, 207, both in the United States and beyond, supported by rising economic activity, stronger corporate earnings, and low levels of inflation. With the U.S. bull market in its ninth year, investors in U.S. equities should expect more tempered returns going forward, given high valuations and tightening monetary policy. Indeed, non-u.s. markets recently reversed a multi-year bout of underperformance and have begun to outpace those in the United States as growth strengthens around the world. Monetary policy also remains accommodative in many parts of the world as central banks strive to spur economic growth that has lagged behind that of the United States. Bond markets were a study in contrast over the past, with credit-sensitive segments enjoying solid gains, while interest-rate-sensitive areas posted much more muted returns and, in some cases, losses. Regardless of what happens in the markets, the many investment options offered through the John Hancock Freedom 529 plan can help you find the right path toward diversification and meeting your long-term college planning goals. Plan enhancements Helping our shareholders pursue their financial goals is at the core of everything we do. To help you better prepare for your loved one s college education, I m pleased to share a number of recent enhancements to the plan. A fee reduction: We ve lowered the annual account maintenance fee from $25 to $5. An exciting new opportunity: As a John Hancock Freedom 529 account holder or beneficiary, you are now eligible for a waiver of the nonresident tuition surcharge at the University of Alaska and can receive the in-state rate, regardless of the state you live in. You must hold the account for at least two years to qualify for this discount. A name change: To better reflect our multimanager approach, the names of the Lifestyle 529 Portfolios have been changed, effective February, 207: Lifestyle Balanced 529 Portfolio is now Multimanager Lifestyle Balanced 529 Portfolio Lifestyle Growth 529 Portfolio is now Multimanager Lifestyle Growth 529 Portfolio Lifestyle Moderate 529 Portfolio is now Multimanager Lifestyle Moderate 529 Portfolio To learn more about these and other changes, please review the Plan Disclosure Document, which can be found in the college savings section at jhinvestments.com. We know you have many choices when it comes to saving for college, 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 Diversification does not guarantee a profit or eliminate the risk of a loss. 3
Investment commentary 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, 207. U.S. stocks surge as economy picks up, corporate earnings rebound Steady economic growth and a rebound in corporate profits lifted stock markets worldwide in our fiscal year ended June 30, 207. U.S. stocks were range-bound early in the period amid caution before November s presidential election and uncertainty about the timing of the Federal Reserve s interest rate hikes. After the election, U.S. stocks soared as investors pinned their hopes on tax cuts, deregulation, and other business-friendly policies under the new administration. A long-awaited corporate earnings recovery fueled the rally. Overall profits for the S&P 500 rose at their fastest year-over-year pace in several years in the first quarter of 207 a welcome change after five quarters of earnings declines that began in mid-205. The S&P 500 Index rose to record levels through June, joining many global stock benchmarks that reached all-time highs. U.S. small-cap stocks outperformed their larger peers. Growth stocks outpaced value stocks among large- and mid-cap stocks, while small-cap growth and small-cap value stocks fared roughly the same, according to various Russell indexes. Nine of sectors in the S&P 500 Index advanced while two fell. Financials gained the most, driven by rising interest rates, hopes for deregulation, and favorable results of the Fed s annual stress test for banks. Information technology was the next best performer due to outsized gains in a few technology and Internet stocks. Conversely, telecommunication services retreated as wireless operators grappled with weak subscriber growth and growing competition. The energy sector declined as crude oil prices sank in the first half of 207 amid a persistent global oversupply of oil. Signs of steady economic growth outside the U.S. offset mounting concerns about the Trump administration s ability to deliver on its agenda. Evidence of a sustained recovery grew more plentiful in Europe and Japan, helped by ultra-low interest rates and other accommodative measures implemented by central banks in both markets. Emerging markets stocks outperformed developed markets stocks as the global recovery translated into increased trade, benefiting export-driven economies across the developing world. All major emerging regions advanced, led by Asia, as strong growth in China drove economic activity in the region. U.S. investment-grade bonds retreat, but high yield shines U.S. investment-grade bonds slightly declined over our fiscal year. In the second half of 206, yields on longer-term Treasuries rose and prices fell as economic data improved and the Fed signaled that it was drawing closer to raising interest rates for the first time since December 205. (Bond prices and yields move in opposite directions.) Yields spiked after the election on anticipation of pro-growth policies under President GLOBAL MARKET RETURNS AS OF 6/30/7 (%) Periods ended 6/30/7 6-month return 2-month return 26.80 24.60 20.83 7.90 4.07 4.23 9.34 4.99 2.27 S&P 500 Index Nasdaq Composite Index* Russell 2000 Index MSCI EAFE Index Bloomberg Barclays U.S. Aggregate Bond Index * 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. Bloomberg Index Services Ltd. Copyright 207, Bloomberg Index Services Ltd. Used with permission. -0.3 4
Trump and an interest rate increase in December. This year, however, longer-term Treasury yields reversed course as inflation stayed tame and investors surmised that Trump s expansionary fiscal agenda would take longer than expected to materialize. Following the Fed s rate hike in December 206, the central bank raised interest rates in March and June and signaled one more hike in 207. It also announced plans to start gradually reducing its $4.5 trillion balance sheet consisting of Treasuries and mortgage-backed securities later this year. In the investment-grade universe, long-term corporate bonds performed the best as credit spreads the yield difference between Treasuries and bonds with some credit risk narrowed as the earnings recovery supported corporate fundamentals. On the other hand, long-term Treasuries declined. High yield bonds widely outpaced their investment-grade peers. High yield bonds rallied as they benefited from commodity prices stabilizing well above their lows in early 206, a subdued default outlook, and strong demand in an environment of low-yielding securities globally. Bonds in developed non-u.s. markets declined in dollar terms as government bond yields in the UK and the eurozone rose over the past year. In the UK, government bond yields rebounded from their post- Brexit lows and after some Bank of England policymakers signaled in June that they were leaning toward increasing rates. In the eurozone, government bond yields surged from very low levels as speculation grew that the improving economy would lead the European Central Bank to start unwinding its years-long stimulus program. Currency weakness in our fiscal year s first half also hurt dollar-based returns. The British pound and Japanese yen each fell sharply against the dollar over the last, though most global currencies have appreciated against the greenback in 207. Dollar-denominated emerging markets bonds rose modestly in dollar terms, overcoming a postelection sell-off last November. Stable global growth, higher commodity prices, and relatively higher interest rates in most developing countries helped support the asset class. INTEREST RATE LEVELS (%) 3.0 0-year Treasury note 5-year Treasury note 90-day Treasury bill 2.5 2.0.5.0 0.5 0.0 6/6 7/6 8/6 9/6 0/6 /6 2/6 /7 2/7 3/7 4/7 5/7 6/7 Definitions of the benchmarks cited in this report: Bank of America Merrill Lynch U.S. High Yield Master Index tracks the performance of U.S. dollar-denominated below investment-grade corporate debt issued in the U.S.; Bloomberg Barclays 3 Year Government/Credit Bond Index tracks short-term debt instruments; Bloomberg Barclays U.S. 5 Year U.S. Treasury TIPS Index measures the performance of inflation protected obligations of the U.S. Treasury with maturities of to 5 years; Bloomberg Barclays U.S. Aggregate Bond Index tracks investment-grade corporate and government bonds; Citigroup 3-Month Treasury Bill Index tracks short-term U.S. government debt instruments; Morningstar Financial Index tracks funds that invest primarily in equity securities of financial services companies; Morningstar Health Index tracks funds that invest primarily in equity securities of health care companies; Morningstar Technology Index tracks funds that invest primarily in equity securities of technology companies; MSCI All Country (AC) World Index ex USA measures equity market performance of developed and emerging countries, excluding the U.S.; MSCI EAFE Index tracks the stocks of about,000 companies in Europe, Australasia, and the Far East (EAFE); Nasdaq Composite Index tracks U.S. stocks traded in the over-the-counter market; Russell 000 Index tracks the performance of the,000 largest U.S. companies; Russell 000 Growth Index tracks the Russell 000 companies with higher price-to-book ratios and higher forecast growth values; Russell 000 Value Index tracks the Russell 000 companies with lower price-to-book ratios and lower forecast growth values; Russell 2000 Index tracks the stocks of 2,000 small-cap U.S. companies; Russell 2000 Growth Index tracks the Russell 2000 companies with higher price-to-book ratios and higher forecast growth values; Russell 3000 Index measures the performance of the 3,000 largest U.S. companies representing approximately 98% of the investable U.S. equity market; Russell Midcap Value Index tracks the performance of mid-cap stocks with lower price-to-book ratios and lower forecast growth values; S&P 500 Index tracks the stocks of 500 primarily large-cap U.S. companies. It is not possible to invest in an index. 5
Long-term returns* JOHN HANCOCK FREEDOM 529 INVESTMENT PERFORMANCE Performance information for each of the John Hancock Freedom 529 Investment Options as of June 30, 207, follows. For more recent performance, please visit johnhancockfreedom529.com or contact your financial advisor. Current performance may be higher or lower than that quoted. As always, past performance cannot guarantee future results. Average annual total returns as of 6/30/7 Without a sales charge (%) With a sales charge (%) ENROLLMENT-BASED year 3 years 5 years 0 years ITD year 3 years 5 years 0 years ITD Inception date Portfolio 2033 2036 A 9.58 6.57 3.60 3.98 5/29/5 C2 4 8.59 5.7 8.59 5.7 5/29/5 F 2.60 2.60 4/28/7 Portfolio 2029 2032 A 9.03 5.68.70 8.73 3.08 3.80 0.50 7.78 4/29/ B 3 8.8 4.88 0.88 7.9 4.8 3.96 0.75 7.9 4/29/ C2 4 8.5 4.90 0.89 7.93 8.5 4.90 0.89 7.93 4/29/ F 2.60 2.60 4/28/7 Portfolio 2025 2028 A 2 5.45 4.90 0.87 5.36 5.56 9.67 3.04 9.68 4.79 5.00 4/30/07 B 3 4.60 4.3 0.07 4.59 4.79 0.60 3.20 9.93 4.59 4.79 4/30/07 C2 4 4.6 4.3 0.08 4.58 4.78 4.6 4.3 0.08 4.58 4.78 4/30/07 F 2.30 2.30 4/28/7 Portfolio 202 2024 A 2.84 4.9 9.09 4.44 7.85 6.25 2.33 7.92 3.88 7.45 4/30/03 B 3 0.99 3.4 8.28 3.65 6.32 6.99 2.46 8.3 3.65 6.32 9/30/03 C2 4 0.96 3.4 8.27 3.66 7.0 0.96 3.4 8.27 3.66 7.0 4/30/03 F.80.80 4/28/7 Portfolio 207 2020 A 7.53 3.8 7.08 4.5 4.82 3.77.96 6.32 3.78 4.59 7/2/0 A 2 (effective 6/3/02) 7.53 3.8 7.08 4.5 5.85 2.5.34 5.93 3.59 5.47 7/2/0 B 3 6.72 2.4 6.28 3.37 5.92 2.72.45 6.2 3.37 5.92 9/30/03 C 4 7.28 2.92 6.80 3.88 4.56 7.28 2.92 6.80 3.88 4.56 7/2/0 C2 4 6.74 2.4 6.27 3.37 6.95 6.74 2.4 6.27 3.37 6.95 9/30/02 F.0.0 4/28/7 College Portfolio A 4.53 2.05 3.49 3.8 3.90 0.87 0.84 2.75 3.44 3.67 7/2/0 A 2 (effective 6/3/02) 4.53 2.05 3.49 3.8 4.0-0.69 0.23 2.37 3.26 3.72 7/2/0 B 3 3.69.28 2.7 3.03 3.34-0.3 0.30 2.53 3.03 3.34 9/30/03 C 4 4.25.80 3.22 3.56 3.63 4.25.80 3.22 3.56 3.63 7/2/0 C2 4 3.75.30 2.7 3.04 3.6 3.75.30 2.7 3.04 3.6 9/30/02 F 0.70 0.70 4/28/7 MULTIMANAGER LIFESTYLE Multimanager Lifestyle Growth 529 A 2 5.83 4.5 9.4 4.36 5.49 0.04 2.65 8.24 3.80 4.97 6/30/06 B 3 4.98 3.72 8.59 3.57 4.70 0.98 2.78 8.45 3.57 4.70 6/30/06 C2 4 4.96 3.7 8.6 3.58 4.67 4.96 3.7 8.6 3.58 4.67 6/30/06 F 2.40 2.40 4/28/7 Multimanager Lifestyle Balanced 529 A 2 2.45 3.79 7.67 4.35 5.28 6.83.94 6.5 3.79 4.76 6/30/06 B 3.66 3.0 6.88 3.58 4.48 7.66 2.06 6.72 3.58 4.48 6/30/06 C2 4.58 3.0 6.86 3.57 4.48.58 3.0 6.86 3.57 4.48 6/30/06 F 2.00 2.00 4/28/7 Multimanager Lifestyle Moderate 529 A 2 8.75 3.0 5.88 4.45 5.09 3.32.7 4.74 3.89 4.58 6/30/06 B 3 7.90 2.22 5.09 3.66 4.27 3.90.25 4.92 3.66 4.27 6/30/06 C2 4 7.88 2.24 5.09 3.67 4.29 7.88 2.24 5.09 3.67 4.29 6/30/06 F.50.50 4/28/7 6 * The long-term returns are annualized through June 30, 207. However, if a portfolio has less than year of performance history, the since-inception (ITD) figure is not annualized and represents a cumulative total return.
Average annual total returns as of 6/30/7 Without a sales charge (%) With a sales charge (%) STATIC year 3 years 5 years 0 years ITD year 3 years 5 years 0 years ITD Inception date Future Trends Portfolio A 27.6 2.78 8.42 9.90 8.0 23.4.45 7.58 9.5 7.86 7/2/0 A 2 (effective 6/3/02) 27.6 2.78 8.42 9.90 0.7 2.23 0.77 7.5 9.3 9.78 7/2/0 B 3 26.65.95 7.52 9.08 9.78 22.65.4 7.42 9.08 9.78 9/30/03 C 4 27.32 2.5 8.3 9.63 7.80 27.32 2.5 8.3 9.63 7.80 7/2/0 C2 4 26.64.94 7.53 9.07.37 26.64.94 7.53 9.07.37 9/30/02 F 4.20 4.20 4/28/7 Equity Portfolio A 20. 5.89.78 5.83 6.03 5.9 4.64 0.99 5.46 5.79 7/2/0 A 2 (effective 6/3/02) 20. 5.89.78 5.83 7. 4. 4.00 0.59 5.26 6.73 7/2/0 B 3 9.24 5.0 0.97 5.04 7.32 5.24 4.9 0.84 5.04 7.32 9/30/03 C 4 9.82 5.62.52 5.57 5.77 9.82 5.62.52 5.57 5.77 7/2/0 C2 4 9.24 5.0 0.96 5.04 8.27 9.24 5.0 0.96 5.04 8.27 9/30/02 F 2.80 2.80 4/28/7 Fixed Income Portfolio A 2.64 2.28 3.03 4.85 5.7-0.95.07 2.30 4.48 4.94 7/2/0 A 2 (effective 6/3/02) 2.64 2.28 3.03 4.85 5.0 -.47 0.46.92 4.29 4.64 7/2/0 B 3.87.52 2.25 4.06 3.89-2.3 0.55 2.07 4.06 3.89 9/30/03 C 4 2.37 2.02 2.77 4.58 4.89 2.37 2.02 2.77 4.58 4.89 7/2/0 C2 4.88.5 2.25 4.06 4.22.88.5 2.25 4.06 4.22 9/30/02 F 0.90 0.90 4/28/7 Short-Term Bond Portfolio A 0.56 0.5 0.52.89 2.28-2.96-0.68-0.9.53 2.05 7/2/0 A 2 (effective 6/3/02) 0.56 0.5 0.52.89 2. -3.46 -.28-0.56.34.75 7/2/0 B 3-0.7-0.23-0.22.3.08-4.7 -.24-0.42.3.08 9/30/03 C 4 0.29 0.25 0.28.64 2.02 0.29 0.25 0.28.64 2.02 7/2/0 C2 4-0.7-0.25-0.22.2.2-0.7-0.25-0.22.2.2 9/30/02 F 0.20 0.20 4/28/7 INDIVIDUAL New Horizons Portfolio A 2 25.27 0.35 6.2 0.93.82 9.0 8.39 4.96 0.34.35 9/30/04 B 3 24.33 9.52 5.34 0.09 0.94 20.33 8.68 5.23 0.09 0.94 9/30/04 C2 4 24.32 9.53 5.35 0.0 0.96 24.32 9.53 5.35 0.0 0.96 9/30/04 F 3.60 3.60 4/28/7 International Value Portfolio A 2 23.26 -.7 7.95 0.6 7.09-2.93 6.79 0.05 /30/07 B 3 22.40 -.9 7.6-0.2 8.40-2.90 7.00-0.2 /30/07 C2 4 22.43 -.9 7.7-0.3 22.43 -.9 7.7-0.3 /30/07 F 2.40 2.40 4/28/7 Small-Cap Stock Portfolio A 2 20. 7.05 3.8 8.33 0.95 4.0 5.4.96 7.75 0.53 4/30/03 B 3 9.7 6.24 2.32 7.50 9.40 5.7 5.35 2.20 7.50 9.40 9/30/03 C2 4 9.8 6.24 2.32 7.48 0.05 9.8 6.24 2.32 7.48 0.05 4/30/03 F 0.80 0.80 4/28/7 Mid-Cap Value Portfolio A 2 4.80 7.08 4.6 6.99.44 9.06 5.7 2.94 6.4.03 9/30/02 B 3 3.93 6.28 3.30 6.7 9.43 9.93 5.38 3.8 6.7 9.43 9/30/03 C2 4 3.95 6.28 3.3 6.8 0.55 3.95 6.28 3.3 6.8 0.55 9/30/02 F 0.80 0.80 4/28/7 Capital Appreciation Portfolio A 2 23.87 0.2 4.62 8.09 7.67 8.25 3.39 7.48 /30/07 B 3 22.92 9.38 3.77 7.29 8.92 8.54 3.65 7.29 /30/07 C2 4 22.90 9.38 3.76 7.30 22.90 9.38 3.76 7.30 /30/07 F 3.0 3.0 4/28/7 7
Average annual total returns as of 6/30/7 Without a sales charge (%) With a sales charge (%) INDIVIDUAL year 3 years 5 years 0 years ITD year 3 years 5 years 0 years ITD Inception date Blue Chip Growth Portfolio A 2 27.5.80 6.24 8.74 0.43 20.79 9.8 4.99 8.6 0.02 9/30/02 B 3 26.20 0.97 5.38 7.94 8.62 22.20 0.6 5.26 7.94 8.62 9/30/03 C2 4 26.22 0.96 5.37 7.94 9.56 26.22 0.96 5.37 7.94 9.56 9/30/02 F 4.20 4.20 4/28/7 Equity Income Portfolio A 2 7.25 5.4.52 4.76 7.90.39 3.53 0.33 4.9 7.49 4/30/03 B 3 6.37 4.60 0.68 3.97 6.63 2.37 3.68 0.55 3.97 6.63 9/30/03 C2 4 6.4 4.6 0.68 3.97 7.03 6.4 4.6 0.68 3.97 7.03 4/30/03 F.80.80 4/28/7 American Mutual Portfolio A 2.62 7.4.59 5.85 8.06 6.04 5.23 0.39 5.28 7.65 4/30/03 B 3 0.78 6.33 0.76 5.04 6.85 6.78 5.43 0.63 5.04 6.85 9/30/03 C2 4 0.73 6.33 0.76 5.04 7.2 0.73 6.33 0.76 5.04 7.2 4/30/03 F.70.70 4/28/7 Average annual total returns as of 6/30/7 Without a sales charge (%) Total return (%) STATIC year 3 years 5 years 0 years ITD 7-day simple yield 5 7-day compound yield 5 Inception date Money Market Portfolio 5 Original Money Market Portfolio 0.04 0.0 0.0 0.43 0.98 0.37 0.30 9/30/04 A 0.04 0.0 0.36 0.30 8/29/4 C2 4 0.04 0.0 0.36 0.30 8/29/4 F 0.9 0.3 0.30 4/28/7 The performance data presented represent past performance. Past performance is not a guarantee of future results, and current performance may be higher or lower than the performance quoted. Investment returns in John Hancock Freedom 529 portfolios and the value of an investor s units will fluctuate and may be worth more or less than the original cost when redeemed. Performance with a sales charge reflects a 3.5% maximum sales charge for units purchased prior to June 3, 2002. 2 Performance with a sales charge reflects a 5.25% maximum sales charge for units purchased on or after June 3, 2002, until September 2, 204, unless grandfather rules apply. Please see plan disclosure document for additional details. Performance with a sales charge reflects a 5.00% (4.00% for Short-Term Bond and Fixed Income Portfolios) maximum sales charge for units purchased on or after September 2, 204. 3 All B portfolios carry a 6-year contingent deferred sales charge or CDSC (maximum of 5%, declining over 6 years). B returns with a sales charge reflect the applicable sales charge for the period shown. B units of each portfolio are charged an annual program management fee of 0.25%, an annual Trust fee of 0.05%, and an annual distribution and service fee of 0.25%. 4 C2 units do not have a sales charge. For Accounts established on or after October, 2002, C units are referred to as C2. 5 The Trustee has authorized the Program Manager to waive all or a portion of the annual program management fee for the Money Market Portfolio to the extent necessary to maintain the respective net yield of the Original Money Market Portfolio, Money Market Portfolio A, and Money Market Portfolio C2 at 0.0% or above. The fee waiver has the effect of increasing the portfolio s net yield. Without this waiver, the yield on the portfolio could be lower. An investment in the Money Market Portfolio is not insured or guaranteed by the FDIC or any other government agency. Although the portfolio seeks to preserve the value of your investment at $.00 per unit, it is possible to lose money by investing in the portfolio. Performance figures reflect the deduction of program fees, underlying investment management fees, and other expenses of the underlying mutual funds in which the portfolio invests. Performance does not reflect the annual account maintenance fee of $5. If it were reflected, performance would be lower. The performance of the enrollment-based Investment Options reflects changes in asset allocations over time relating to the targeted college enrollment date of Beneficiaries for which the particular Investment Option is designed. Assets are automatically moved to the College Portfolio in the second quarter of the third year in the title of the Investment Option and may not remain invested in the referenced Investment Option for a portion of the period reported. 8
Portfolio highlights Enrollment-based portfolios PORTFOLIO 2033 2036 Portfolio 2033 2036 generated a double-digit return and performed in line with its weighted benchmark for the 2-month period ended June 30, 207. The portfolio s focus is long-term capital appreciation. Its assets are primarily held in a diversified selection of growth and value stock funds invested in U.S. companies and companies in international developed and emerging markets. Later in the portfolio s life cycle, it will incorporate more lower-volatility, fixed income investments. Overall, security selection in the underlying funds contributed to relative performance. The T. Rowe Price Blue Chip Growth Fund outperformed its style-specific benchmark and contributed the most to relative performance, followed by the John Hancock Capital Appreciation Fund and John Hancock Disciplined Value Fund. Conversely, the T. Rowe Price Real Assets Fund, John Hancock International Growth Fund, and Oppenheimer International Growth Fund trailed their respective benchmarks and detracted from relative performance. The inclusion of diversifying sectors that are not included in the benchmark detracted from relative returns. Specifically, exposure to real assets through the T. Rowe Price Real Assets Fund which invests in energy and commodity companies weighed on relative returns as crude oil prices slumped in 207 amid a continued global oversupply of oil. Performance comparison as of 6/30/7 (%) A, including sales charge 3.60 A, excluding sales charge 9.58 C2 8.59 F Weighted benchmark 2 9.34 Equity 6/30/6 6/30/7 00% 00% Portfolio composition (%) T. Rowe Price Blue Chip Growth Fund 5. 5.5 T. Rowe Price Equity Income Fund 4.6 4.4 John Hancock Capital Appreciation Fund (Jennison) 0. 0.3 T. Rowe Price Mid-Cap Value Fund 8. 7.9 John Hancock Disciplined Value Fund (Boston Partners) 7.4 7.5 T. Rowe Price New Horizons Fund 7.6 7.4 John Hancock International Growth Fund (Wellington) 6. 6. John Hancock International Value Fund (Templeton) 5.9 6.0 Oppenheimer International Growth Fund 5.8 6.0 John Hancock Disciplined Value International Fund (Boston Partners) 5.9 6.0 T. Rowe Price Real Assets Fund 5.2 4.7 John Hancock Emerging Markets Fund (Dimensional Fund Advisors) 4.4 4.4 American Mutual Fund 3.8 3.8 current to the most recent month-end is available at johnhancockfreedom529.com or by calling -866-222-7498. Average annual total returns may be found on pages 6 7. Performance for A, including sales charge reflects a 5.25% maximum sales charge for units purchased on or after June 3, 2002, until September 2, 204, unless grandfather rules apply. Performance with a sales charge reflects a 5.00% (4.00% for the Short-Term Bond and Fixed Income Portfolios) maximum sales charge for units purchased on or after September 2, 204. The application of breakpoint pricing or rights of accumulation to a A Account could result in a lesser sales charge. B units carry a 6-year contingent deferred sales charge (maximum of 5.00%, declining over 6 years). Performance for B, including sales charge reflects the applicable sales charge for the periods shown. C2 units are not assessed a sales charge. does not reflect the annual account maintenance fee of $5. If it did, performance would be lower. Please refer to the Plan Disclosure Document for more detailed information on the fees and 2 As of June 30, 207, the weighted benchmark is composed of: Russell 3000 Index 70.00% and MSCI AC World Index ex USA 30.00%. 9
PORTFOLIO 2029 2032 Portfolio 2029 2032 generated a double-digit return and outperformed its weighted benchmark for the 2-month period ended June 30, 207. The portfolio s focus is long-term capital appreciation. Its assets are primarily held in a diversified selection of growth and value stock funds invested in U.S. companies and companies in international developed and emerging markets. The portfolio also includes an allocation to lowervolatility, fixed income funds. Overall, security selection in the underlying funds contributed to relative performance. The T. Rowe Price Blue Chip Growth Fund outperformed its style-specific benchmark and contributed the most to relative performance, followed by the John Hancock Capital Appreciation Fund and John Hancock Disciplined Value Fund. Conversely, the T. Rowe Price Real Assets Fund, John Hancock International Growth Fund, and Oppenheimer International Growth Fund trailed their respective benchmarks and detracted from relative performance. The inclusion of diversifying sectors that are not included in the benchmark detracted from relative returns. Specifically, exposure to real assets through the T. Rowe Price Real Assets Fund which invests in energy and commodity companies weighed on relative returns as crude oil prices slumped in 207 amid a continued global oversupply of oil. Performance comparison as of 6/30/7 (%) A, including sales charge 3.08 A, excluding sales charge 9.03 B, including sales charge 4.8 B, excluding sales charge 8.8 C2 8.5 F Weighted benchmark 2 8.72 Equity Fixed Income 6/30/6 6/30/7 5.6% 00% 94.4% Portfolio composition (%) T. Rowe Price Blue Chip Growth Fund 5. 4.7 T. Rowe Price Equity Income Fund 4.6 3.7 John Hancock Capital Appreciation Fund (Jennison) 0. 9.5 T. Rowe Price Mid-Cap Value Fund 8. 7.5 John Hancock Disciplined Value Fund (Boston Partners) 7.4 7.2 T. Rowe Price New Horizons Fund 7.6 6.9 John Hancock Disciplined Value International Fund (Boston Partners) 5.8 5.7 Oppenheimer International Growth Fund 5.8 5.7 John Hancock International Value Fund (Templeton) 6.0 5.7 John Hancock International Growth Fund (Wellington) 6. 5.7 T. Rowe Price Real Assets Fund 5.2 4.4 John Hancock Emerging Markets Fund (Dimensional Fund Advisors) 4.4 4. American Mutual Fund 3.8 3.5 T. Rowe Price Spectrum Income Fund 0.0 2.9 John Hancock Core Bond Fund (Wells Capital) 0.0 2.2 John Hancock Strategic Income Opportunities Fund (JHAM) 0.0 0.6 current to the most recent month-end is available at johnhancockfreedom529.com or by calling -866-222-7498. Average annual total returns may be found on pages 6 7. Performance for A, including sales charge reflects a 5.25% maximum sales charge for units purchased on or after June 3, 2002, until September 2, 204, unless grandfather rules apply. Performance with a sales charge reflects a 5.00% (4.00% for the Short-Term Bond and Fixed Income Portfolios) maximum sales charge for units purchased on or after September 2, 204. The application of breakpoint pricing or rights of accumulation to a A Account could result in a lesser sales charge. B units carry a 6-year contingent deferred sales charge (maximum of 5.00%, declining over 6 years). Performance for B, including sales charge reflects the applicable sales charge for the periods shown. C2 units are not assessed a sales charge. does not reflect the annual account maintenance fee of $5. If it did, performance would be lower. Please refer to the Plan Disclosure Document for more detailed information on the fees and 2 As of June 30, 207, the weighted benchmark is composed of: Russell 3000 Index 66.50%, MSCI AC World Index ex USA 28.50%, and Bloomberg Barclays U.S. Aggregate Bond Index 5.00%. 0
PORTFOLIO 2025 2028 Portfolio 2025 2028 generated a double-digit return and outperformed its weighted benchmark for the 2-month period ended June 30, 207. The portfolio s focus is long-term capital appreciation. Its assets are primarily held in a diversified selection of growth and value stock funds invested in U.S. companies and companies in international developed and emerging markets. The portfolio also includes an allocation to lower-volatility, fixed income funds. Overall, security selection in the underlying funds contributed to relative performance. The T. Rowe Price Blue Chip Growth Fund outperformed its style-specific benchmark and contributed to relative performance, as did the T. Rowe Price Spectrum Income Fund and John Hancock Capital Appreciation Fund. Conversely, the T. Rowe Price Real Assets Fund and Oppenheimer International Growth Fund trailed their respective benchmarks and detracted from relative performance. The inclusion of diversifying sectors that are not included in the benchmark detracted from relative returns. Specifically, exposure to real assets through the T. Rowe Price Real Assets Fund which invests in energy and commodity companies weighed on relative returns as crude oil prices slumped in 207 amid a continued global oversupply of oil. Performance comparison as of 6/30/7 (%) A, including sales charge 9.67 A, excluding sales charge 5.45 B, including sales charge 0.60 B, excluding sales charge 4.60 C2 4.6 F Weighted benchmark 2 4.58 Fixed Income Equity 6/30/6 6/30/7 20.2% 25.8% 79.8% 74.2% Portfolio composition (%) T. Rowe Price Spectrum Income Fund 0.2 3.0 T. Rowe Price Blue Chip Growth Fund 2.0.7 T. Rowe Price Equity Income Fund.6 0.8 John Hancock Core Bond Fund (Wells Capital) 7.6 9.7 John Hancock Capital Appreciation Fund (Jennison) 8.0 7.4 T. Rowe Price Mid-Cap Value Fund 6.5 5.9 John Hancock Disciplined Value Fund (Boston Partners) 5.9 5.6 T. Rowe Price New Horizons Fund 6. 5.4 John Hancock International Value Fund (Templeton) 4.7 4.5 John Hancock Disciplined Value International Fund (Boston Partners) 4.6 4.5 John Hancock International Growth Fund (Wellington) 4.9 4.5 Oppenheimer International Growth Fund 4.7 4.4 T. Rowe Price Real Assets Fund 4. 3.5 John Hancock Emerging Markets Fund (Dimensional Fund Advisors) 3.5 3.2 John Hancock Strategic Income Opportunities Fund (JHAM) 2.5 3. American Mutual Fund 3. 2.8 current to the most recent month-end is available at johnhancockfreedom529.com or by calling -866-222-7498. Average annual total returns may be found on pages 6 7. Performance for A, including sales charge reflects a 5.25% maximum sales charge for units purchased on or after June 3, 2002, until September 2, 204, unless grandfather rules apply. Performance with a sales charge reflects a 5.00% (4.00% for the Short-Term Bond and Fixed Income Portfolios) maximum sales charge for units purchased on or after September 2, 204. The application of breakpoint pricing or rights of accumulation to a A Account could result in a lesser sales charge. B units carry a 6-year contingent deferred sales charge (maximum of 5.00%, declining over 6 years). Performance for B, including sales charge reflects the applicable sales charge for the periods shown. C2 units are not assessed a sales charge. does not reflect the annual account maintenance fee of $5. If it did, performance would be lower. Please refer to the Plan Disclosure Document for more detailed information on the fees and 2 As of June 30, 207, the weighted benchmark is composed of: Russell 3000 Index 52.50%, MSCI AC World Index ex USA 22.50%, and Bloomberg Barclays U.S. Aggregate Bond Index 25.00%.
PORTFOLIO 202 2024 Portfolio 202 2024 generated a double-digit return and outperformed its weighted benchmark for the 2-month period ended June 30, 207. The portfolio systematically increases its allocation to lower-volatility, fixed income investments, reflecting its long-term strategy of becoming more conservative over time. At fiscal year-end, about 53% of the portfolio s assets were in a diversified selection of growth and value stock funds invested in U.S. companies and companies in international developed and emerging markets. The rest of the portfolio s assets were in fixed income. Overall, security selection in the underlying funds contributed to relative performance. The T. Rowe Price Spectrum Income Fund outperformed its style-specific benchmark and contributed the most to relative performance, followed by the T. Rowe Price Blue Chip Growth Fund and John Hancock Strategic Income Opportunities Fund. Conversely, the T. Rowe Price Real Assets Fund, John Hancock International Growth Fund, and Oppenheimer International Growth Fund trailed their respective benchmarks and detracted from relative performance. The inclusion of diversifying sectors that are not included in the benchmark detracted from relative returns. Specifically, exposure to real assets through the T. Rowe Price Real Assets Fund which invests in energy and commodity companies weighed on relative returns as crude oil prices slumped in 207 amid a continued global oversupply of oil. Performance comparison as of 6/30/7 (%) A, including sales charge 6.25 A, excluding sales charge.84 B, including sales charge 6.99 B, excluding sales charge 0.99 C2 0.96 F Weighted benchmark 2 0.33 Fixed Income Equity 58.6% 6/30/6 6/30/7 4.4% 47.4% 52.6% Portfolio composition (%) T. Rowe Price Spectrum Income Fund 20.8 23.8 John Hancock Core Bond Fund (Wells Capital) 5.6 7.6 T. Rowe Price Blue Chip Growth Fund 8.8 8.4 T. Rowe Price Equity Income Fund 8.5 7.7 John Hancock Strategic Income Opportunities Fund (JHAM) 5. 5.9 John Hancock Capital Appreciation Fund (Jennison) 5.8 5.5 T. Rowe Price Mid-Cap Value Fund 4.7 4.2 John Hancock Disciplined Value Fund (Boston Partners) 4.4 4.0 T. Rowe Price New Horizons Fund 4.5 3.7 John Hancock International Value Fund (Templeton) 3.4 3.2 John Hancock Disciplined Value International Fund (Boston Partners) 3.5 3. John Hancock International Growth Fund (Wellington) 3.6 3. Oppenheimer International Growth Fund 3.4 3. T. Rowe Price Real Assets Fund 3.0 2.6 John Hancock Emerging Markets Fund (Dimensional Fund Advisors) 2.6 2. American Mutual Fund 2.3 2.0 current to the most recent month-end is available at johnhancockfreedom529.com or by calling -866-222-7498. Average annual total returns may be found on pages 6 7. Performance for A, including sales charge reflects a 5.25% maximum sales charge for units purchased on or after June 3, 2002, until September 2, 204, unless grandfather rules apply. Performance with a sales charge reflects a 5.00% (4.00% for the Short-Term Bond and Fixed Income Portfolios) maximum sales charge for units purchased on or after September 2, 204. The application of breakpoint pricing or rights of accumulation to a A Account could result in a lesser sales charge. B units carry a 6-year contingent deferred sales charge (maximum of 5.00%, declining over 6 years). Performance for B, including sales charge reflects the applicable sales charge for the periods shown. C2 units are not assessed a sales charge. does not reflect the annual account maintenance fee of $5. If it did, performance would be lower. Please refer to the Plan Disclosure Document for more detailed information on the fees and 2 As of June 30, 207, the weighted benchmark is composed of: Russell 3000 Index 37.60%, Bloomberg Barclays U.S. Aggregate Bond Index 46.25%, MSCI AC World Index ex USA 6.5%. 2
PORTFOLIO 207 2020 Portfolio 207 2020 generated a single-digit return and outperformed its weighted benchmark for the 2-month period ended June 30, 207. The portfolio systematically increases its allocation to lower-volatility, fixed income investments, reflecting its long-term strategy of becoming more conservative over time. At fiscal year-end, roughly 70% of the portfolio was invested in fixed income, with the balance in a diversified selection of growth and value stock funds invested in U.S. companies and companies in international developed and emerging markets. Overall, security selection in the underlying funds contributed to relative performance. The T. Rowe Price Spectrum Income Fund outperformed its style-specific benchmark and contributed the most to relative performance, followed by the T. Rowe Price Blue Chip Growth Fund and John Hancock Strategic Income Opportunities Fund. Conversely, the T. Rowe Price Real Assets Fund, American Mutual Fund, and T. Rowe Price Limited Duration Inflation Focused Bond Fund trailed their respective benchmarks and detracted from relative performance. The inclusion of diversifying sectors that are not included in the benchmark detracted from relative returns. Specifically, exposure to real assets through the T. Rowe Price Real Assets Fund which invests in energy and commodity companies weighed on relative returns as crude oil prices slumped in 207 amid a continued global oversupply of oil. Performance comparison as of 6/30/7 (%) A, including sales charge 3.77 (issues before June 3, 2002) A, including sales charge 2.5 (issues on or after June 3, 2002) A, excluding sales charge 7.53 B, including sales charge 2.72 B, excluding sales charge 6.72 C 7.28 C2 6.74 F Weighted benchmark 2 5.89 Fixed Income Equity 6/30/6 6/30/7 36.9% 30.5% 63.% 69.5% Portfolio composition (%) T. Rowe Price Limited Duration Inflation Focused Bond Fund 2.9 23.3 T. Rowe Price Spectrum Income Fund 25.2 23. John Hancock Core Bond Fund (Wells Capital) 8.8 7.2 T. Rowe Price Blue Chip Growth Fund 7.6 7.6 T. Rowe Price Equity Income Fund 7.4 6.8 John Hancock Strategic Income Opportunities Fund (JHAM) 6.2 5.8 John Hancock Capital Appreciation Fund (Jennison) 5. 4.7 John Hancock Disciplined Value Fund (Boston Partners) 3.8 3.6 American Mutual Fund 2.0.8 T. Rowe Price Real Assets Fund.9.5 John Hancock Disciplined Value International Fund (Boston Partners).5 0.9 John Hancock International Value Fund (Templeton).5 0.9 John Hancock International Growth Fund (Wellington).5 0.9 Oppenheimer International Growth Fund.4 0.9 T. Rowe Price Mid-Cap Value Fund.4 0.5 T. Rowe Price New Horizons Fund.4 0.4 John Hancock Emerging Markets Fund (Dimensional Fund Advisors) 0.4 0. current to the most recent month-end is available at johnhancockfreedom529.com or by calling -866-222-7498. Average annual total returns may be found on pages 6 7. Performance for A, including sales charge reflects a 5.25% maximum sales charge for units purchased on or after June 3, 2002, until September 2, 204, unless grandfather rules apply. Performance with a sales charge reflects a 5.00% (4.00% for the Short-Term Bond and Fixed Income Portfolios) maximum sales charge for units purchased on or after September 2, 204. The application of breakpoint pricing or rights of accumulation to a A Account could result in a lesser sales charge. B units carry a 6-year contingent deferred sales charge (maximum of 5.00%, declining over 6 years). Performance for B, including sales charge reflects the applicable sales charge for the periods shown. C2 units are not assessed a sales charge. does not reflect the annual account maintenance fee of $5. If it did, performance would be lower. Please refer to the Plan Disclosure Document for more detailed information on the fees and 2 As of June 30, 207, the weighted benchmark is composed of: Bloomberg Barclays U.S. Aggregate Bond Index 47.00%, Russell 3000 Index 27.0%, Bloomberg Barclays U.S. 5 Year Treasury TIPS Index 2.50%, MSCI AC World Index ex USA 4.40%. 3
COLLEGE PORTFOLIO The College Portfolio generated a single-digit return and outperformed its weighted benchmark for the 2-month period ended June 30, 207. The portfolio invests in a diversified blend of bonds and conservative fixed income securities, representing about 80% of assets. It also holds a 20% allocation in stocks. This structure is designed to allow investors to generate growth in their college savings accounts while reducing the risk of principal loss through a combination of diversification and conservative fixed income investments. Overall, security selection in the underlying funds contributed to relative performance. The T. Rowe Price Spectrum Income Fund outperformed its style-specific benchmark and contributed the most to relative performance, followed by the T. Rowe Price Blue Chip Growth Fund and John Hancock Strategic Income Opportunities Fund. Conversely, the T. Rowe Price Limited Duration Inflation Focused Bond Fund trailed its respective benchmark and detracted from relative performance. The inclusion of diversifying sectors that are not included in the benchmark detracted from relative returns. Specifically, exposure to real assets through the T. Rowe Price Real Assets Fund which invests in energy and commodity companies weighed on relative returns as crude oil prices slumped in 207 amid a continued global oversupply of oil. Performance comparison as of 6/30/7 (%) A, including sales charge 0.87 (issues before June 3, 2002) A, including sales charge -0.69 (issues on or after June 3, 2002) A, excluding sales charge 4.53 B, including sales charge -0.3 B, excluding sales charge 3.69 C 4.25 C2 3.75 F Weighted benchmark 2 3.52 6/30/6 6/30/7 Fixed Income Equity 9.7% 20.2% 80.3% 79.8% Portfolio composition (%) T. Rowe Price Limited Duration Inflation Focused Bond Fund 40.0 39.8 T. Rowe Price Spectrum Income Fund 20.2 20.0 John Hancock Core Bond Fund (Wells Capital) 5. 4.9 T. Rowe Price Blue Chip Growth Fund 5.0 5.3 John Hancock Strategic Income Opportunities Fund (JHAM) 5. 5.0 T. Rowe Price Equity Income Fund 4.8 4.9 John Hancock Capital Appreciation Fund (Jennison) 3.3 3.3 John Hancock Disciplined Value Fund (Boston Partners) 2.5 2.5 American Mutual Fund.3.3 T. Rowe Price Real Assets Fund.0.0 Oppenheimer International Growth Fund 0.4 0.5 John Hancock International Value Fund (Templeton) 0.5 0.5 John Hancock International Growth Fund (Wellington) 0.4 0.5 John Hancock Disciplined Value International Fund (Boston Partners) 0.4 0.5 current to the most recent month-end is available at johnhancockfreedom529.com or by calling -866-222-7498. Average annual total returns may be found on pages 6 7. Performance for A, including sales charge reflects a 5.25% maximum sales charge for units purchased on or after June 3, 2002, until September 2, 204, unless grandfather rules apply. Performance with a sales charge reflects a 5.00% (4.00% for the Short-Term Bond and Fixed Income Portfolios) maximum sales charge for units purchased on or after September 2, 204. The application of breakpoint pricing or rights of accumulation to a A Account could result in a lesser sales charge. B units carry a 6-year contingent deferred sales charge (maximum of 5.00%, declining over 6 years). Performance for B, including sales charge reflects the applicable sales charge for the periods shown. C2 units are not assessed a sales charge. does not reflect the annual account maintenance fee of $5. If it did, performance would be lower. Please refer to the Plan Disclosure Document for more detailed information on the fees and 2 As of June 30, 207, the weighted benchmark is composed of: Bloomberg Barclays U.S. 5 Year Treasury TIPS Index 40.00%, Bloomberg Barclays U.S. Aggregate Bond Index 40.00%, Russell 3000 Index 8.00%, and MSCI AC World Index ex USA 2.00%. 4
Portfolio highlights Static portfolios FUTURE TRENDS PORTFOLIO The Future Trends Portfolio generated a double-digit return and underperformed its weighted benchmark for the 2-month period ended June 30, 207. The Future Trends Portfolio invests in three underlying funds: the T. Rowe Price Science & Technology Fund, T. Rowe Price Health Sciences Fund, and T. Rowe Price Financial Services Fund. Each fund focuses on an area within the broader market that provides products or services that are expected to play a key role in driving future economic growth. All three underlying funds share a common strategic approach: They invest in fundamentally strong companies deemed to have the best growth prospects within their specific sectors. The T. Rowe Price Science & Technology Fund detracted from relative performance chiefly due to unfavorable positioning in the media industry. The T. Rowe Price Health Sciences Fund performed in line with the weighted benchmark as unfavorable positioning in pharmaceuticals and health care services companies generally offset positive results in biotechnology and products and devices companies. The T. Rowe Price Financial Services Fund contributed to relative performance. Financial stocks performed well over the period amid a rising interest rate environment and stable global financial markets. Returns were particularly strong in the 206 postelection rally as investors anticipated expansionary fiscal policy and financial deregulation under the Trump administration. Bank stocks also received a boost in June when they passed the Federal Reserve s annual stress test, effectively allowing them to substantially boost dividends and share buybacks. Performance comparison as of 6/30/7 (%) A, including sales charge 23.4 (issues before June 3, 2002) A, including sales charge 2.23 (issues on or after June 3, 2002) A, excluding sales charge 27.6 B, including sales charge 22.65 B, excluding sales charge 26.65 C 27.32 C2 26.64 F Weighted benchmark 2 28.33 Equity 6/30/6 6/30/7 00% 00% Portfolio composition (%) T. Rowe Price Science & Technology Fund 34.9 33.6 T. Rowe Price Health Sciences Fund 32.7 33.4 T. Rowe Price Financial Services Fund 32.4 33.0 Top five holdings of each underlying fund as of 6/30/7 (%) T. Rowe Price Health Sciences Fund UnitedHealth Group 5.6 Becton, Dickinson & Company 4.0 Intuitive Surgical 3.5 Allergan 3.3 Alexion Pharmaceuticals 2.8 T. Rowe Price Financial Services Fund J.P. Morgan Chase 5.5 Citigroup 5.3 Wells Fargo 4.6 State Street 3.5 Visa 3.0 T. Rowe Price Science & Technology Fund Amazon.com 6.5 Microsoft 6.4 Red Hat 6.3 Qualcomm 4.8 Altaba 4.5 current to the most recent month-end is available at johnhancockfreedom529.com or by calling -866-222-7498. Average annual total returns may be found on pages 6 7. Performance for A, including sales charge reflects a 5.25% maximum sales charge for units purchased on or after June 3, 2002, until September 2, 204, unless grandfather rules apply. Performance with a sales charge reflects a 5.00% (4.00% for the Short-Term Bond and Fixed Income Portfolios) maximum sales charge for units purchased on or after September 2, 204. The application of breakpoint pricing or rights of accumulation to a A Account could result in a lesser sales charge. B units carry a 6-year contingent deferred sales charge (maximum of 5.00%, declining over 6 years). Performance for B, including sales charge reflects the applicable sales charge for the periods shown. C2 units are not assessed a sales charge. does not reflect the annual account maintenance fee of $5. If it did, performance would be lower. Please refer to the Plan Disclosure Document for more detailed information on the fees and 2 As of June 30, 207, the weighted benchmark is composed of: Morningstar Technology Index 34.00%, Morningstar Financial Index 33.00%, and Morningstar Health Index 33.00%. 5
EQUITY PORTFOLIO The Equity Portfolio generated a double-digit return and outperformed its weighted benchmark for the 2-month period ended June 30, 207. The portfolio s focus is long-term capital appreciation. Its assets are held in a diversified selection of growth and value stock funds invested in U.S. companies and companies in international developed and emerging markets. Overall, security selection in the underlying funds contributed to relative performance. The T. Rowe Price Blue Chip Growth Fund outperformed its style-specific benchmark and contributed the most to relative performance, followed by the John Hancock Capital Appreciation Fund and T. Rowe Price Equity Income Fund. Conversely, the John Hancock International Growth Fund and Oppenheimer International Growth Fund trailed their respective benchmarks and detracted from relative performance. Tactical decisions to overweight and underweight asset classes lifted relative returns. An underweight to real assets relative to global stocks added value. The inclusion of diversifying sectors that are not included in the benchmark detracted from relative returns. Specifically, exposure to real assets through the T. Rowe Price Real Assets Fund which invests in energy and commodity companies weighed on relative returns as crude oil prices slumped in 207 amid a continued global oversupply of oil. Performance comparison as of 6/30/7 (%) A, including sales charge 5.9 (issues before June 3, 2002) A, including sales charge 4. (issues on or after June 3, 2002) A, excluding sales charge 20. B, including sales charge 5.24 B, excluding sales charge 9.24 C 9.82 C2 9.24 F Weighted benchmark 2 9.34 Equity 6/30/6 6/30/7 00% 00% Portfolio composition (%) T. Rowe Price Blue Chip Growth Fund 6. 6.9 T. Rowe Price Equity Income Fund 4.8 4.3 John Hancock Capital Appreciation Fund (Jennison) 9.4 9.8 T. Rowe Price New Horizons Fund 7.0 8. T. Rowe Price Mid-Cap Value Fund 6. 7.7 John Hancock Disciplined Value Fund (Boston Partners) 7.2 7. John Hancock Disciplined Value International Fund (Boston Partners) 6.5 6.7 John Hancock International Value Fund (Templeton) 6.8 6.6 John Hancock International Growth Fund (Wellington) 6.4 6.6 Oppenheimer International Growth Fund 6.2 6.4 John Hancock Emerging Markets Fund (Dimensional Fund Advisors) 6. 4.0 American Mutual Fund 3.8 3.5 T. Rowe Price Real Assets Fund 3.6 2.3 current to the most recent month-end is available at johnhancockfreedom529.com or by calling -866-222-7498. Average annual total returns may be found on pages 6 7. Performance for A, including sales charge reflects a 5.25% maximum sales charge for units purchased on or after June 3, 2002, until September 2, 204, unless grandfather rules apply. Performance with a sales charge reflects a 5.00% (4.00% for the Short-Term Bond and Fixed Income Portfolios) maximum sales charge for units purchased on or after September 2, 204. The application of breakpoint pricing or rights of accumulation to a A Account could result in a lesser sales charge. B units carry a 6-year contingent deferred sales charge (maximum of 5.00%, declining over 6 years). Performance for B, including sales charge reflects the applicable sales charge for the periods shown. C2 units are not assessed a sales charge. does not reflect the annual account maintenance fee of $5. If it did, performance would be lower. Please refer to the Plan Disclosure Document for more detailed information on the fees and 2 As of June 30, 207, the weighted benchmark is composed of: Russell 3000 Index 70.00% and MSCI AC World Index ex USA 30.00%. 6