A message to shareholders
John Hancock
Multifactor ETFs
Table of contents
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 1 |
Multifactor exchange-traded funds (ETFs) at a
glance
Many traditional
indexes and index funds are weighted by market capitalization, a bias that can expose investors to certain risks and potentially reduce returns. Strategic beta strategies such as John Hancock Multifactor ETFs offer a
different approach. Each ETF seeks to improve on cap-weighted strategies by tracking an index that combines active management insight with the discipline of a rules based approach.
STRATEGIC
BETA1: STRIKING A BALANCE BETWEEN ACTIVE AND PASSIVE INVESTING
PHILOSOPHY
BACKING INDEX DESIGN
According to
Dimensional Fund Advisors, subadvisor for all John Hancock Multifactor ETFs, there are four key factors that drive higher expected returns, and these factors guide Dimensional’s index construction and semiannual
reconstitution.
Market
Equity premium—stocks
over bonds
Company size
Small-cap premium—small
company stocks over large company stocks
Relative
price2
Value premium—value
stocks over growth stocks
Profitability3
Profitability
premium—stocks of highly profitable companies over stocks of less profitable companies
To be considered
a true factor, a premium must be sensible, persistent across time periods, pervasive across markets, robust in data, and cost effective.
WHY
MULTIFACTOR?
Individual
factors can be volatile: there’s no telling which will be the best performing from year to year. Adopting a multifactor approach is one way investors can pursue more consistent—and more
attractive—risk-adjusted returns.
1 Strategic beta (also known as smart beta) defines a set of investment strategies that seek to improve on traditional market-capitalization weighted indexes in order to
lower risk and achieve better diversification.
2 Relative price as measured by the price-to-book ratio; value stocks are those with lower price-to-book ratios.
3 Profitability is a measure of current profitability, based on information from individual companies’ income statements.
| 2 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT |
Portfolio summary
Multifactor Developed International
ETF
SECTOR COMPOSITION AS OF
10/31/2022 (% of net assets)
| TOP 10 HOLDINGS AS OF 10/31/2022 (% of net assets) | |
| Shell PLC | 1.7 |
| TotalEnergies SE | 1.4 |
| Nestle SA | 1.4 |
| ABB, Ltd. | 1.2 |
| Roche Holding AG | 1.1 |
| ASML Holding NV | 1.0 |
| Novartis AG | 1.0 |
| Wolters Kluwer NV | 0.9 |
| Novo Nordisk A/S, B Shares | 0.9 |
| BP PLC | 0.9 |
| TOTAL | 11.5 |
| 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 excludes cash and cash equivalents. | |
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 3 |
Multifactor Emerging Markets ETF
SECTOR COMPOSITION AS OF
10/31/2022 (% of total investments)
| TOP 10 HOLDINGS AS OF 10/31/2022 (% of total investments) | |
| Samsung Electronics Company, Ltd. | 3.8 |
| Taiwan Semiconductor Manufacturing Company, Ltd. | 3.2 |
| Tencent Holdings, Ltd. | 2.1 |
| Reliance Industries, Ltd. | 1.7 |
| HDFC Bank, Ltd. | 1.3 |
| Infosys, Ltd. | 1.2 |
| Alibaba Group Holding, Ltd., ADR | 1.1 |
| ICICI Bank, Ltd. | 1.0 |
| China Construction Bank Corp., H Shares | 1.0 |
| Housing Development Finance Corp., Ltd. | 0.9 |
| TOTAL | 17.3 |
| 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 excludes cash and cash equivalents. | |
| 4 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT |
Multifactor Large Cap ETF
SECTOR COMPOSITION AS OF
10/31/2022 (% of net assets)
| TOP 10 HOLDINGS AS OF 10/31/2022 (% of net assets) | |
| Apple, Inc. | 4.0 |
| Microsoft Corp. | 3.5 |
| Amazon.com, Inc. | 1.8 |
| Alphabet, Inc., Class A | 1.5 |
| Johnson & Johnson | 1.0 |
| UnitedHealth Group, Inc. | 1.0 |
| Exxon Mobil Corp. | 0.9 |
| Berkshire Hathaway, Inc., Class B | 0.9 |
| JPMorgan Chase & Co. | 0.8 |
| Chevron Corp. | 0.7 |
| TOTAL | 16.1 |
| 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 excludes cash and cash equivalents. | |
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 5 |
Multifactor Mid Cap ETF
SECTOR COMPOSITION AS OF
10/31/2022 (% of net assets)
| TOP 10 HOLDINGS AS OF 10/31/2022 (% of net assets) | |
| Nucor Corp. | 0.5 |
| Dollar Tree, Inc. | 0.5 |
| Parker-Hannifin Corp. | 0.5 |
| ON Semiconductor Corp. | 0.5 |
| Ameriprise Financial, Inc. | 0.5 |
| Keysight Technologies, Inc. | 0.5 |
| Enphase Energy, Inc. | 0.4 |
| United Rentals, Inc. | 0.4 |
| Arthur J. Gallagher & Company | 0.4 |
| Diamondback Energy, Inc. | 0.4 |
| TOTAL | 4.6 |
| 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 excludes cash and cash equivalents. | |
| 6 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT |
Multifactor Small Cap ETF
SECTOR COMPOSITION AS OF
10/31/2022 (% of net assets)
| TOP 10 HOLDINGS AS OF 10/31/2022 (% of net assets) | |
| EMCOR Group, Inc. | 0.5 |
| Kinsale Capital Group, Inc. | 0.5 |
| Texas Roadhouse, Inc. | 0.5 |
| Halozyme Therapeutics, Inc. | 0.5 |
| Interactive Brokers Group, Inc., Class A | 0.5 |
| SouthState Corp. | 0.5 |
| Harley-Davidson, Inc. | 0.5 |
| Curtiss-Wright Corp. | 0.5 |
| Acuity Brands, Inc. | 0.5 |
| Medpace Holdings, Inc. | 0.5 |
| TOTAL | 5.0 |
| 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 excludes cash and cash equivalents. | |
Notes about risk
Each fund is subject to various
risks as described in the fund’s prospectus. Political tensions and armed conflicts, including the Russian invasion of Ukraine, and any resulting economic sanctions on entities and/or individuals of a particular
country could lead such a country into an economic recession. The COVID-19 disease has resulted in significant disruptions to global business activity. A widespread health crisis such as a global pandemic could cause
substantial market volatility, exchange-trading suspensions, and closures, which may lead to less liquidity in certain instruments, industries, sectors, or the markets, generally, and may ultimately affect fund
performance. For more information, please refer to the “Principal risk” section of the prospectus. Current and future portfolio holdings are subject to change and risk. Investing involves risk, including
the potential loss of principal. There is no guarantee that a fund’s investment strategy will be successful and there can be no assurance that active trading markets for shares will develop or be maintained by
market makers or authorized participants.
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 7 |
Your expenses
These examples are intended to help
you understand your ongoing operating expenses of investing in the fund so you can compare these costs with the ongoing costs of investing in other funds.
Understanding fund expenses
As a shareholder of a fund, you
incur two types of costs:
■Transaction costs, which may include creation and redemption fees and brokerage charges.
■Ongoing operating expenses, including management fees, and other fund expenses.
We are presenting only your ongoing
operating expenses here.
Actual expenses/actual returns
The first line of each fund in the
following table is intended to provide information about a fund’s actual ongoing operating expenses, and is based on the fund’s actual NAV return. It assumes an account value of $1,000.00 on May 1, 2022,
with the same investment held until October 31, 2022.
Together with the value of your
account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at October 31, 2022, by $1,000.00, then multiply it by the “expenses
paid” from the table. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:
Hypothetical example for comparison
purposes
The second line of each fund in the
following table allows you to compare a fund’s ongoing operating expenses with those of any other fund. It provides an example of the fund’s hypothetical account values and hypothetical expenses based on
the fund’s actual expense ratio and an assumed 5% annualized return before expenses (which is not the fund’s actual return). It assumes an account value of $1,000.00 on May 1, 2022, with the same
investment held until October 31, 2022. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses. Please remember that these hypothetical account values
and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Remember, these examples do not
include any transaction costs. A fund charges a transaction fee per creation unit to those creating or redeeming creation units, and those buying or selling shares in the secondary market will incur customary
brokerage commissions and charges. Therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher.
See the prospectus for details regarding transaction costs.
SHAREHOLDER EXPENSE EXAMPLE
CHART
| Account value on 5-1-2022 | Ending value on 10-31-2022 | Expenses paid during 10-31-20221 | Annualized expense ratio | |
| Multifactor Developed International ETF | ||||
| Actual expenses/actual returns | $1,000.00 | $868.70 | $1.84 | 0.39% |
| Hypothetical example for comparison purposes | 1,000.00 | 1,023.20 | 1.99 | 0.39% |
| Multifactor Emerging Markets ETF | ||||
| Actual expenses/actual returns | $1,000.00 | $817.60 | $2.24 | 0.49% |
| Hypothetical example for comparison purposes | 1,000.00 | 1,022.70 | 2.50 | 0.49% |
| Multifactor Large Cap ETF | ||||
| Actual expenses/actual returns | $1,000.00 | $951.20 | $1.43 | 0.29% |
| Hypothetical example for comparison purposes | 1,000.00 | 1,023.70 | 1.48 | 0.29% |
| Multifactor Mid Cap ETF | ||||
| Actual expenses/actual returns | $1,000.00 | $956.30 | $2.02 | 0.41% |
| Hypothetical example for comparison purposes | 1,000.00 | 1,023.10 | 2.09 | 0.41% |
| 8 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL |
SHAREHOLDER EXPENSE EXAMPLE CHART (continued)
| Account value on 5-1-2022 | Ending value on 10-31-2022 | Expenses paid during 10-31-20221 | Annualized expense ratio | |
| Multifactor Small Cap ETF | ||||
| Actual expenses/actual returns | $1,000.00 | $978.00 | $2.09 | 0.42% |
| Hypothetical example for comparison purposes | 1,000.00 | 1,023.10 | 2.14 | 0.42% |
| 1 | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). |
| SEMIANNUAL | JOHN HANCOCK MULTIFACTOR ETFS | 9 |
Funds’ investments
| 10 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
DERIVATIVES
FUTURES
| Open contracts | Number of contracts | Position | Expiration date | Notional basis^ | Notional value^ | Unrealized appreciation (depreciation) |
| S&P 500 E-Mini Index Futures | 3 | Long | Dec 2022 | $586,582 | $582,450 | $(4,132) |
| $(4,132) |
^ Notional basis refers to the
contractual amount agreed upon at inception of open contracts; notional value represents the current value of the open contract.
See Notes to financial statements
regarding investment transactions and other derivatives information.
| 36 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial statements
STATEMENTS OF ASSETS AND
LIABILITIES 10-31-22 (unaudited)
| Multifactor Developed International ETF | Multifactor Emerging Markets ETF | Multifactor Large Cap ETF | Multifactor Mid Cap ETF | |
| Assets | ||||
| Unaffiliated investments, at value | $398,503,983 | $621,398,131 | $713,827,771 | $2,551,939,387 |
| Affiliated investments, at value | 2,056,251 | 278,877 | 303,383 | 2,139,584 |
| Total investments, at value | 400,560,234 | 621,677,008 | 714,131,154 | 2,554,078,971 |
| Cash | — | — | 656,741 | 1,273,430 |
| Foreign currency, at value | 744,469 | 2,583,263 | — | — |
| Collateral held at broker for futures contracts | — | — | 29,917 | — |
| Dividends and interest receivable | 1,767,796 | 450,537 | 563,254 | 1,588,378 |
| Receivable for fund shares sold | — | — | — | 5,808,930 |
| Receivable for investments sold | 253,074 | 76,064 | — | 551,289 |
| Receivable for securities lending income | 3,710 | 1,190 | 522 | 7,978 |
| Other assets | 14,521 | 22,534 | 22,471 | 51,634 |
| Total assets | 403,343,804 | 624,810,596 | 715,404,059 | 2,563,360,610 |
| Liabilities | ||||
| Payable for futures variation margin | — | — | 4,125 | — |
| Due to custodian | 6,591 | — | — | — |
| Foreign capital gains tax payable | — | 4,233,797 | — | — |
| Payable for investments purchased | 1,408 | 2,486 | — | 6,134,853 |
| Payable upon return of securities loaned | 2,056,285 | 278,874 | 306,607 | 2,149,942 |
| Payable to affiliates | ||||
| Investment management fees | 99,816 | 195,624 | 128,249 | 741,836 |
| Accounting and legal services fees | 17,457 | 28,090 | 33,054 | 109,451 |
| Trustees’ fees | 209 | 537 | 454 | 1,946 |
| Other liabilities and accrued expenses | 149,513 | 392,521 | 136,056 | 345,493 |
| Total liabilities | 2,331,279 | 5,131,929 | 608,545 | 9,483,521 |
| Net assets | $401,012,525 | $619,678,667 | $714,795,514 | $2,553,877,089 |
| Net assets consist of | ||||
| Paid-in capital | $486,388,225 | $750,976,663 | $682,918,365 | $2,433,860,144 |
| Total distributable earnings (loss) | (85,375,700) | (131,297,996) | 31,877,149 | 120,016,945 |
| Net assets | $401,012,525 | $619,678,667 | $714,795,514 | $2,553,877,089 |
| Unaffiliated investments, at cost | $442,233,258 | $709,951,707 | $660,001,165 | $2,380,788,660 |
| Affiliated investments, at cost | $2,056,203 | $278,878 | $303,387 | $2,139,533 |
| Foreign currency, at cost | $738,402 | $2,669,975 | — | — |
| Securities loaned, at value | $5,483,202 | $904,093 | $982,786 | $11,773,219 |
| Net asset value per share | ||||
| Based on net asset values and shares outstanding-the fund has an unlimited number of shares authorized with no par value. | ||||
| Net assets | $401,012,525 | $619,678,667 | $714,795,514 | $2,553,877,089 |
| Shares outstanding | 15,700,000 | 29,000,000 | 14,475,000 | 55,025,000 |
| Net asset value per share | $25.54 | $21.37 | $49.38 | $46.41 |
| 50 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL | SEE NOTES TO FINANCIAL STATEMENTS |
STATEMENTS OF ASSETS AND LIABILITIES 10-31-22 (unaudited)
Continued
| Multifactor Small Cap ETF | |
| Assets | |
| Unaffiliated investments, at value | $336,305,758 |
| Affiliated investments, at value | 459,332 |
| Total investments, at value | 336,765,090 |
| Dividends and interest receivable | 67,324 |
| Receivable for investments sold | 1,607,237 |
| Receivable for securities lending income | 1,804 |
| Other assets | 14,102 |
| Total assets | 338,455,557 |
| Liabilities | |
| Payable for investments purchased | 184,135 |
| Payable for fund shares repurchased | 1,560,036 |
| Payable upon return of securities loaned | 460,758 |
| Payable to affiliates | |
| Investment management fees | 91,546 |
| Accounting and legal services fees | 14,629 |
| Trustees’ fees | 166 |
| Other liabilities and accrued expenses | 91,646 |
| Total liabilities | 2,402,916 |
| Net assets | $336,052,641 |
| Net assets consist of | |
| Paid-in capital | $395,899,181 |
| Total distributable earnings (loss) | (59,846,540) |
| Net assets | $336,052,641 |
| Unaffiliated investments, at cost | $324,117,273 |
| Affiliated investments, at cost | $459,330 |
| Securities loaned, at value | $4,221,988 |
| Net asset value per share | |
| Based on net asset values and shares outstanding-the fund has an unlimited number of shares authorized with no par value. | |
| Net assets | $336,052,641 |
| Shares outstanding | 10,775,000 |
| Net asset value per share | $31.19 |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL | JOHN HANCOCK MULTIFACTOR ETFS | 51 |
STATEMENTS OF OPERATIONS For the six months ended 10-31-22 (unaudited)
| Multifactor Developed International ETF | Multifactor Emerging Markets ETF | Multifactor Large Cap ETF | Multifactor Mid Cap ETF | |
| Investment income | ||||
| Dividends from unaffiliated investments | $8,565,203 | $18,015,717 | $6,810,772 | $22,421,756 |
| Non-cash dividends | 770,645 | — | — | — |
| Securities lending | 53,084 | 14,341 | 7,073 | 181,687 |
| Interest | 7,010 | 7,509 | 4,560 | 18,419 |
| Less foreign taxes withheld | (780,109) | (2,172,916) | (879) | (6,096) |
| Total investment income | 8,615,833 | 15,864,651 | 6,821,526 | 22,615,766 |
| Expenses | ||||
| Investment management fees | 769,495 | 1,429,971 | 968,885 | 4,534,077 |
| Accounting and legal services fees | 34,225 | 50,778 | 57,268 | 189,992 |
| Transfer agent fees | 5,042 | 5,042 | 5,042 | 5,042 |
| Trustees’ fees | 4,563 | 6,459 | 7,689 | 24,245 |
| Custodian fees | 77,575 | 257,907 | 68,829 | 199,208 |
| Printing and postage | 12,193 | 10,845 | 20,096 | 55,238 |
| Professional fees | 30,564 | 34,343 | 40,501 | 85,845 |
| Stock exchange listing fees | 2,967 | 4,679 | 3,673 | 4,531 |
| Other | 15,040 | 14,426 | 18,610 | 36,235 |
| Total expenses | 951,664 | 1,814,450 | 1,190,593 | 5,134,413 |
| Less expense reductions | (93,494) | (222,018) | (109,913) | (89,844) |
| Net expenses | 858,170 | 1,592,432 | 1,080,680 | 5,044,569 |
| Net investment income | 7,757,663 | 14,272,219 | 5,740,846 | 17,571,197 |
| Realized and unrealized gain (loss) | ||||
| Net realized gain (loss) on | ||||
| Unaffiliated investments and foreign currency transactions and foreign currency transactions | (15,317,588) | (16,199,192) | (7,700,136) | (39,236,104) |
| Affiliated investments | (2,175) | (390) | (94) | (3,613) |
| Futures contracts | (411,768) | (249,872) | (36,566) | (92,425) |
| Redemptions in kind | 4,897,979 | 851,864 | 18,074,056 | 49,832,899 |
| (10,833,552) | (15,597,590) | 10,337,260 | 10,500,757 | |
| Change in net unrealized appreciation (depreciation) of | ||||
| Unaffiliated investments and translation of assets and liabilities in foreign currencies and translation of assets and liabilities in foreign currencies | (59,473,936) | (128,472,612)1 | (56,017,497) | (139,848,167) |
| Affiliated investments | 614 | 125 | 22 | 517 |
| Futures | — | — | (4,132) | — |
| (59,473,322) | (128,472,487) | (56,021,607) | (139,847,650) | |
| Net realized and unrealized loss | (70,306,874) | (144,070,077) | (45,684,347) | (129,346,893) |
| Decrease in net assets from operations | $(62,549,211) | $(129,797,858) | $(39,943,501) | $(111,775,696) |
| 1 | Net of $345,039 decrease in deferred foreign withholding taxes. |
| 52 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL | SEE NOTES TO FINANCIAL STATEMENTS |
STATEMENTS OF OPERATIONS For the six months ended 10-31-22 (unaudited)
Continued
| Multifactor Small Cap ETF | |
| Investment income | |
| Dividends from unaffiliated investments | $2,990,044 |
| Securities lending | 7,343 |
| Interest | 3,837 |
| Less foreign taxes withheld | (3,479) |
| Total investment income | 2,997,745 |
| Expenses | |
| Investment management fees | 679,152 |
| Accounting and legal services fees | 26,798 |
| Transfer agent fees | 5,042 |
| Trustees’ fees | 3,741 |
| Custodian fees | 40,634 |
| Printing and postage | 12,577 |
| Professional fees | 26,939 |
| Stock exchange listing fees | 1,780 |
| Other | 12,183 |
| Total expenses | 808,846 |
| Less expense reductions | (77,452) |
| Net expenses | 731,394 |
| Net investment income | 2,266,351 |
| Realized and unrealized gain (loss) | |
| Net realized gain (loss) on | |
| Unaffiliated investments and foreign currency transactions and foreign currency transactions | (15,871,291) |
| Affiliated investments | (686) |
| Futures contracts | 58,555 |
| Redemptions in kind | 16,143,077 |
| 329,655 | |
| Change in net unrealized appreciation (depreciation) of | |
| Unaffiliated investments and translation of assets and liabilities in foreign currencies and translation of assets and liabilities in foreign currencies | (12,004,497) |
| Affiliated investments | 52 |
| (12,004,445) | |
| Net realized and unrealized loss | (11,674,790) |
| Decrease in net assets from operations | $(9,408,439) |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL | JOHN HANCOCK MULTIFACTOR ETFS | 53 |
STATEMENTS OF CHANGES IN NET
ASSETS
| Multifactor Developed International ETF | Multifactor Emerging Markets ETF | Multifactor Large Cap ETF | ||||
| Six months ended 10-31-22 (unaudited) | Year ended 4-30-22 | Six months ended 10-31-22 (unaudited) | Year ended 4-30-22 | Six months ended 10-31-22 (unaudited) | Year ended 4-30-22 | |
| Increase (decrease) in net assets | ||||||
| From operations | ||||||
| Net investment income | $7,757,663 | $14,946,190 | $14,272,219 | $17,285,712 | $5,740,846 | $8,581,950 |
| Net realized gain (loss) | (10,833,552) | 12,647,177 | (15,597,590) | (551,133) | 10,337,260 | 27,074,095 |
| Change in net unrealized depreciation | (59,473,322) | (66,945,494) | (128,472,487) | (115,024,799) | (56,021,607) | (49,027,535) |
| Decrease in net assets resulting from operations | (62,549,211) | (39,352,127) | (129,797,858) | (98,290,220) | (39,943,501) | (13,371,490) |
| Distributions to shareholders | ||||||
| From earnings | (8,655,521) | (16,282,455) | (4,592,547) | (18,823,632) | (4,190,819) | (8,541,390) |
| From fund share transactions | ||||||
| Shares issued | 21,601,326 | 123,309,794 | 100,153,863 | 71,215,603 | 35,874,935 | 170,026,286 |
| Shares repurchased | (32,052,063) | (69,777,522) | (6,937,382) | (29,222,676) | (58,805,064) | (72,014,924) |
| Total from fund share transactions | (10,450,737) | 53,532,272 | 93,216,481 | 41,992,927 | (22,930,129) | 98,011,362 |
| Total increase (decrease) | (81,655,469) | (2,102,310) | (41,173,924) | (75,120,925) | (67,064,449) | 76,098,482 |
| Net assets | ||||||
| Beginning of period | 482,667,994 | 484,770,304 | 660,852,591 | 735,973,516 | 781,859,963 | 705,761,481 |
| End of period | $401,012,525 | $482,667,994 | $619,678,667 | $660,852,591 | $714,795,514 | $781,859,963 |
| Share activity | ||||||
| Shares outstanding | ||||||
| Beginning of period | 16,100,000 | 14,500,000 | 25,100,000 | 23,600,000 | 14,975,000 | 13,225,000 |
| Shares issued | 800,000 | 3,700,000 | 4,200,000 | 2,500,000 | 725,000 | 3,050,000 |
| Shares repurchased | (1,200,000) | (2,100,000) | (300,000) | (1,000,000) | (1,225,000) | (1,300,000) |
| End of period | 15,700,000 | 16,100,000 | 29,000,000 | 25,100,000 | 14,475,000 | 14,975,000 |
| 54 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL | SEE NOTES TO FINANCIAL STATEMENTS |
STATEMENTS OF CHANGES IN NET ASSETS
Continued
| Multifactor Mid Cap ETF | Multifactor Small Cap ETF | |||
| Six months ended 10-31-22 (unaudited) | Year ended 4-30-22 | Six months ended 10-31-22 (unaudited) | Year ended 4-30-22 | |
| Increase (decrease) in net assets | ||||
| From operations | ||||
| Net investment income | $17,571,197 | $20,239,746 | $2,266,351 | $3,805,766 |
| Net realized gain | 10,500,757 | 87,205,470 | 329,655 | 29,531,594 |
| Change in net unrealized depreciation | (139,847,650) | (234,507,963) | (12,004,445) | (65,353,940) |
| Decrease in net assets resulting from operations | (111,775,696) | (127,062,747) | (9,408,439) | (32,016,580) |
| Distributions to shareholders | ||||
| From earnings | (10,179,998) | (18,319,101) | (1,073,157) | (4,761,782) |
| From fund share transactions | ||||
| Shares issued | 389,624,047 | 605,048,219 | 34,492,775 | 109,353,746 |
| Shares repurchased | (124,393,825) | (212,516,812) | (64,643,370) | (122,188,867) |
| Total from fund share transactions | 265,230,222 | 392,531,407 | (30,150,595) | (12,835,121) |
| Total increase (decrease) | 143,274,528 | 247,149,559 | (40,632,191) | (49,613,483) |
| Net assets | ||||
| Beginning of period | 2,410,602,561 | 2,163,453,002 | 376,684,832 | 426,298,315 |
| End of period | $2,553,877,089 | $2,410,602,561 | $336,052,641 | $376,684,832 |
| Share activity | ||||
| Shares outstanding | ||||
| Beginning of period | 49,450,000 | 41,975,000 | 11,775,000 | 12,075,000 |
| Shares issued | 8,200,000 | 11,525,000 | 1,075,000 | 3,225,000 |
| Shares repurchased | (2,625,000) | (4,050,000) | (2,075,000) | (3,525,000) |
| End of period | 55,025,000 | 49,450,000 | 10,775,000 | 11,775,000 |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL | JOHN HANCOCK MULTIFACTOR ETFS | 55 |
Financial Highlights
MULTIFACTOR DEVELOPED
INTERNATIONAL ETF
| Period ended | 10-31-221 | 4-30-22 | 4-30-21 | 4-30-20 | 4-30-19 | 4-30-18 |
| Per share operating performance | ||||||
| Net asset value, beginning of period | $29.98 | $33.43 | $24.33 | $28.75 | $30.68 | $27.17 |
| Net investment income2 | 0.483 | 0.97 | 0.70 | 0.73 | 0.91 | 0.77 |
| Net realized and unrealized gain (loss) on investments | (4.38) | (3.34) | 8.99 | (4.21) | (2.31) | 3.43 |
| Total from investment operations | (3.90) | (2.37) | 9.69 | (3.48) | (1.40) | 4.20 |
| Less distributions | ||||||
| From net investment income | (0.54) | (1.08) | (0.59) | (0.94) | (0.53) | (0.69) |
| Net asset value, end of period | $25.54 | $29.98 | $33.43 | $24.33 | $28.75 | $30.68 |
| Total return (%)4 | (13.13)5 | (7.45) | 40.26 | (12.57) | (4.54) | 15.64 |
| Ratios and supplemental data | ||||||
| Net assets, end of period (in millions) | $401 | $483 | $485 | $433 | $512 | $68 |
| Ratios (as a percentage of average net assets): | ||||||
| Expenses before reductions | 0.436 | 0.42 | 0.43 | 0.52 | 0.55 | 0.80 |
| Expenses including reductions | 0.396 | 0.39 | 0.39 | 0.45 | 0.45 | 0.45 |
| Net investment income | 3.533,6 | 2.92 | 2.43 | 2.46 | 3.28 | 2.60 |
| Portfolio turnover (%)7 | 8 | 10 | 8 | 10 | 17 | 15 |
| 1 | Six months ended 10-31-22. Unaudited. |
| 2 | Based on average daily shares outstanding. |
| 3 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
| 4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
| 5 | Not annualized. |
| 6 | Annualized. |
| 7 | Portfolio turnover rate excludes securities received or delivered from in-kind transactions. |
MULTIFACTOR EMERGING MARKETS
ETF
| Period ended | 10-31-221 | 4-30-22 | 4-30-21 | 4-30-20 | 4-30-192 |
| Per share operating performance | |||||
| Net asset value, beginning of period | $26.33 | $31.19 | $21.61 | $25.87 | $25.00 |
| Net investment income3 | 0.534 | 0.72 | 0.50 | 0.66 | 0.14 |
| Net realized and unrealized gain (loss) on investments | (5.31) | (4.79) | 9.57 | (4.29) | 0.78 |
| Total from investment operations | (4.78) | (4.07) | 10.07 | (3.63) | 0.92 |
| Less distributions | |||||
| From net investment income | (0.18) | (0.79) | (0.49) | (0.63) | (0.05) |
| Net asset value, end of period | $21.37 | $26.33 | $31.19 | $21.61 | $25.87 |
| Total return (%)5 | (18.24)6 | (13.33) | 46.99 | (14.44) | 3.716 |
| Ratios and supplemental data | |||||
| Net assets, end of period (in millions) | $620 | $661 | $736 | $685 | $818 |
| Ratios (as a percentage of average net assets): | |||||
| Expenses before reductions | 0.567 | 0.56 | 0.55 | 0.67 | 0.717 |
| Expenses including reductions | 0.497 | 0.49 | 0.49 | 0.55 | 0.557 |
| Net investment income | 4.394,7 | 2.43 | 1.89 | 2.69 | 0.977 |
| Portfolio turnover (%)8 | 5 | 12 | 25 | 22 | 3 |
| 1 | Six months ended 10-31-22. Unaudited. |
| 2 | Period from 9-27-18 (commencement of operations) to 4-30-19. |
| 3 | Based on average daily shares outstanding. |
| 4 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
| 5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
| 6 | Not annualized. |
| 7 | Annualized. |
| 8 | Portfolio turnover rate excludes securities received or delivered from in-kind transactions. |
| 56 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL | SEE NOTES TO FINANCIAL STATEMENTS |
MULTIFACTOR LARGE CAP ETF
| Period ended | 10-31-221 | 4-30-22 | 4-30-21 | 4-30-20 | 4-30-19 | 4-30-18 |
| Per share operating performance | ||||||
| Net asset value, beginning of period | $52.21 | $53.37 | $36.16 | $37.97 | $34.52 | $31.09 |
| Net investment income2 | 0.393 | 0.63 | 0.66 | 0.73 | 0.70 | 0.51 |
| Net realized and unrealized gain (loss) on investments | (2.94) | (1.15) | 17.30 | (1.83) | 3.25 | 3.42 |
| Total from investment operations | (2.55) | (0.52) | 17.96 | (1.10) | 3.95 | 3.93 |
| Less distributions | ||||||
| From net investment income | (0.28) | (0.64) | (0.75) | (0.71) | (0.50) | (0.50) |
| Net asset value, end of period | $49.38 | $52.21 | $53.37 | $36.16 | $37.97 | $34.52 |
| Total return (%)4 | (4.88)5 | (1.06) | 50.22 | (3.04) | 11.74 | 12.69 |
| Ratios and supplemental data | ||||||
| Net assets, end of period (in millions) | $715 | $782 | $706 | $789 | $922 | $401 |
| Ratios (as a percentage of average net assets): | ||||||
| Expenses before reductions | 0.326 | 0.32 | 0.31 | 0.34 | 0.35 | 0.40 |
| Expenses including reductions | 0.296 | 0.29 | 0.29 | 0.33 | 0.34 | 0.35 |
| Net investment income | 1.543,6 | 1.12 | 1.50 | 1.92 | 1.96 | 1.53 |
| Portfolio turnover (%)7 | 3 | 4 | 7 | 6 | 6 | 5 |
| 1 | Six months ended 10-31-22. Unaudited. |
| 2 | Based on average daily shares outstanding. |
| 3 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
| 4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
| 5 | Not annualized. |
| 6 | Annualized. |
| 7 | Portfolio turnover rate excludes securities received or delivered from in-kind transactions. |
MULTIFACTOR MID CAP ETF
| Period ended | 10-31-221 | 4-30-22 | 4-30-21 | 4-30-20 | 4-30-19 | 4-30-18 |
| Per share operating performance | ||||||
| Net asset value, beginning of period | $48.75 | $51.54 | $32.39 | $36.60 | $34.04 | $30.65 |
| Net investment income2 | 0.343 | 0.44 | 0.39 | 0.48 | 0.53 | 0.34 |
| Net realized and unrealized gain (loss) on investments | (2.48) | (2.83) | 19.23 | (4.29) | 2.44 | 3.36 |
| Total from investment operations | (2.14) | (2.39) | 19.62 | (3.81) | 2.97 | 3.70 |
| Less distributions | ||||||
| From net investment income | (0.20) | (0.40) | (0.47) | (0.40) | (0.41) | (0.31) |
| Net asset value, end of period | $46.41 | $48.75 | $51.54 | $32.39 | $36.60 | $34.04 |
| Total return (%)4 | (4.37)5 | (4.72) | 61.03 | (10.56) | 8.98 | 12.11 |
| Ratios and supplemental data | ||||||
| Net assets, end of period (in millions) | $2,554 | $2,411 | $2,163 | $1,331 | $1,030 | $332 |
| Ratios (as a percentage of average net assets): | ||||||
| Expenses before reductions | 0.426 | 0.42 | 0.42 | 0.43 | 0.45 | 0.52 |
| Expenses including reductions | 0.416 | 0.41 | 0.41 | 0.42 | 0.44 | 0.45 |
| Net investment income | 1.433,6 | 0.84 | 0.96 | 1.33 | 1.53 | 1.03 |
| Portfolio turnover (%)7 | 9 | 10 | 20 | 11 | 13 | 11 |
| 1 | Six months ended 10-31-22. Unaudited. |
| 2 | Based on average daily shares outstanding. |
| 3 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
| 4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
| 5 | Not annualized. |
| 6 | Annualized. |
| 7 | Portfolio turnover rate excludes securities received or delivered from in-kind transactions. |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL | JOHN HANCOCK MULTIFACTOR ETFS | 57 |
MULTIFACTOR SMALL CAP ETF
| Period ended | 10-31-221 | 4-30-22 | 4-30-21 | 4-30-20 | 4-30-19 | 4-30-182 |
| Per share operating performance | ||||||
| Net asset value, beginning of period | $31.99 | $35.30 | $21.77 | $26.89 | $25.69 | $25.00 |
| Net investment income3 | 0.204 | 0.31 | 0.36 | 0.33 | 0.29 | 0.13 |
| Net realized and unrealized gain (loss) on investments | (0.91) | (3.23) | 13.51 | (5.13) | 1.16 | 0.56 |
| Total from investment operations | (0.71) | (2.92) | 13.87 | (4.80) | 1.45 | 0.69 |
| Less distributions | ||||||
| From net investment income | (0.09) | (0.39) | (0.34) | (0.32) | (0.25) | — |
| Net asset value, end of period | $31.19 | $31.99 | $35.30 | $21.77 | $26.89 | $25.69 |
| Total return (%)5 | (2.20)6 | (8.39) | 64.17 | (18.07) | 5.71 | 2.776 |
| Ratios and supplemental data | ||||||
| Net assets, end of period (in millions) | $336 | $377 | $426 | $463 | $439 | $39 |
| Ratios (as a percentage of average net assets): | ||||||
| Expenses before reductions | 0.467 | 0.45 | 0.45 | 0.55 | 0.60 | 0.907,8 |
| Expenses including reductions | 0.427 | 0.42 | 0.42 | 0.49 | 0.50 | 0.517,8 |
| Net investment income | 1.304,7 | 0.90 | 1.31 | 1.30 | 1.13 | 1.057 |
| Portfolio turnover (%)9 | 25 | 40 | 56 | 36 | 33 | 17 |
| 1 | Six months ended 10-31-22. Unaudited. |
| 2 | Period from 11-8-17 (commencement of operations) to 4-30-18. |
| 3 | Based on average daily shares outstanding. |
| 4 | Net investment income is affected by the timing and frequency of the declaration of dividends by the securities in which the fund invests. |
| 5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
| 6 | Not annualized. |
| 7 | Annualized. |
| 8 | Certain expenses are presented unannualized due to the short reporting period. |
| 9 | Portfolio turnover rate excludes securities received or delivered from in-kind transactions. |
| 58 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL | SEE NOTES TO FINANCIAL STATEMENTS |
Notes to financial statements (unaudited)
Note 1—Organization
John Hancock Exchange-Traded Fund
Trust (the Trust) is an open-end management investment company organized as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act). It is a series
company with multiple investment series, five of which are presented in this report (the funds).
The investment objective of each
fund is to seek to provide investment results that closely correspond, before fees and expenses, to the performance of their respective Index as listed below:
| ETF | Index |
| Multifactor Developed International ETF | John Hancock Dimensional Developed International Index |
| Multifactor Emerging Markets ETF | John Hancock Dimensional Emerging Markets Index |
| Multifactor Large Cap ETF | John Hancock Dimensional Large Cap Index |
| Multifactor Mid Cap ETF | John Hancock Dimensional Mid Cap Index |
| Multifactor Small Cap ETF | John Hancock Dimensional Small Cap Index |
Note 2—Significant accounting policies
The financial statements have been
prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP), which require management to make certain estimates and assumptions as of the date of the financial
statements. Actual results could differ from those estimates and those differences could be significant. The funds qualify as investment companies under Topic 946 of Accounting Standards Codification of US GAAP.
Events or transactions occurring
after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting
policies of the funds:
Security valuation. Investments are stated at value as of the scheduled close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. In case of emergency or other
disruption resulting in the NYSE not opening for trading or the NYSE closing at a time other than the regularly scheduled close, the net asset value (NAV) may be determined as of the regularly scheduled close of the
NYSE pursuant to the Advisor’s Valuation Policies and Procedures.
In order to value the securities,
the funds use the following valuation techniques: Equity securities, including exchange-traded funds and closed-end funds, held by the funds are typically valued at the last sale price or official closing price on the
exchange or principal market where the security trades. In the event there were no sales during the day or closing prices are not available, the securities are valued using the last available bid price. Investments in
open-end mutual funds, including John Hancock Collateral Trust (JHCT), are valued at their respective NAVs each business day. Futures contracts whose settlement prices are determined as of the close of the NYSE are
typically valued based on the settlement price while other futures contracts are typically valued at the last traded price on the exchange on which they trade. Foreign securities and currencies are valued in U.S.
dollars based on foreign currency exchange rates supplied by an independent pricing vendor valued at London close.
In certain instances, the Pricing
Committee of the Advisor may determine to value equity securities using prices obtained from another exchange or market if trading on the exchange or market on which prices are typically obtained did not open for
trading as scheduled, or if trading closed earlier than scheduled, and trading occurred as normal on another exchange or market.
Other portfolio securities and
assets, for which reliable market quotations are not readily available, are valued at fair value as determined in good faith by the Pricing Committee following procedures established by the Advisor and adopted by the
Board of Trustees. The frequency with which these fair valuation procedures are used cannot be predicted and fair value of securities may differ significantly from the value that would have been used had a ready
market for such securities existed. Trading in foreign securities may be completed before the scheduled daily close of trading on the NYSE. Significant events at the issuer or market level may affect the values of
securities between the time when the valuation of the securities is generally determined and the close of the NYSE. If a significant event occurs, these securities may be fair valued, as determined in good faith by
the Pricing Committee, following procedures established by the Advisor and adopted by the Board of Trustees. The Advisor may use fair value adjustment factors provided by an independent pricing vendor to value certain
foreign securities in order to adjust for events that may occur between the close of foreign exchanges or markets and the close of the NYSE.
The funds use a three-tier hierarchy
to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities,
including registered investment companies. Level 2 includes securities valued using other significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment
speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities
valued using significant unobservable inputs when market prices are not readily available or reliable, including the Advisor’s assumptions in determining the fair value of investments. Factors used in
determining value may include market or issuer specific events or trends, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the
risks associated with investing in those securities. Changes in valuation techniques and related inputs may result in transfers into or out of an assigned level within the disclosure hierarchy.
The following is a summary of the
values by input classification of the funds’ investments as of October 31, 2022, by major security category or type:
| Total value at 10-31-22 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
| Multifactor Developed International ETF | ||||
| Investments in securities: |
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 59 |
| Total value at 10-31-22 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
| Multifactor Developed International ETF (continued) | ||||
| Assets | ||||
| Common stocks | ||||
| Australia | $30,312,190 | $30,312,190 | — | — |
| Austria | 978,987 | 978,987 | — | — |
| Belgium | 3,576,494 | 3,576,494 | — | — |
| Chile | 362,877 | 362,877 | — | — |
| Denmark | 10,912,189 | 10,912,189 | — | — |
| Finland | 5,697,036 | 5,697,036 | — | — |
| France | 42,650,643 | 42,650,643 | — | — |
| Germany | 26,753,949 | 26,753,949 | — | — |
| Hong Kong | 8,326,228 | 8,326,228 | — | — |
| Ireland | 3,984,902 | 3,984,902 | — | — |
| Israel | 2,128,844 | 2,128,844 | — | — |
| Italy | 8,330,085 | 8,330,085 | — | — |
| Japan | 94,852,050 | 94,852,050 | — | — |
| Luxembourg | 1,213,392 | 1,213,392 | — | — |
| Macau | 121,470 | 121,470 | — | — |
| Malaysia | 233,567 | 233,567 | — | — |
| Mexico | 69,220 | 69,220 | — | — |
| Netherlands | 17,421,402 | 17,421,402 | — | — |
| New Zealand | 578,032 | 578,032 | — | — |
| Norway | 3,019,438 | 3,019,438 | — | — |
| Portugal | 1,008,239 | 1,008,239 | — | — |
| Singapore | 6,933,206 | 6,933,206 | — | — |
| Spain | 11,278,571 | 11,278,571 | — | — |
| Sweden | 11,678,409 | 11,678,409 | — | — |
| Switzerland | 43,010,916 | 43,010,916 | — | — |
| United Arab Emirates | 104 | — | $104 | — |
| United Kingdom | 60,448,510 | 60,448,510 | — | — |
| United States | 30,620 | 30,620 | — | — |
| Preferred securities | 2,591,005 | 2,591,005 | — | — |
| Short-term investments | 2,057,659 | 2,057,659 | — | — |
| Total investments in securities | $400,560,234 | $400,560,130 | $104 | — |
| Multifactor Emerging Markets ETF | ||||
| Investments in securities: | ||||
| Assets | ||||
| Common stocks | ||||
| Brazil | $30,259,304 | $30,259,304 | — | — |
| Chile | 2,550,145 | 2,550,145 | — | — |
| China | 125,870,235 | 125,870,235 | — | — |
| Hong Kong | 7,889,142 | 7,889,142 | — | — |
| India | 142,099,166 | 142,099,166 | — | — |
| Indonesia | 17,385,177 | 17,385,177 | — | — |
| Malaysia | 12,496,053 | 12,496,053 | — | — |
| Mexico | 18,542,665 | 18,542,665 | — | — |
| Netherlands | 286,658 | 286,658 | — | — |
| Philippines | 6,948,584 | 6,948,584 | — | — |
| Poland | 4,165,102 | 4,165,102 | — | — |
| Russia | 427,470 | — | — | $427,470 |
| Saudi Arabia | 26,088,564 | 26,088,564 | — | — |
| South Africa | 26,087,671 | 26,087,671 | — | — |
| South Korea | 77,591,881 | 77,591,881 | — | — |
| Taiwan | 91,162,310 | 91,162,310 | — | — |
| 60 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT |
| Total value at 10-31-22 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
| Multifactor Emerging Markets ETF (continued) | ||||
| Thailand | $15,538,212 | $15,538,212 | — | — |
| Turkey | 2,706,804 | 2,706,804 | — | — |
| United Kingdom | 58,836 | 58,836 | — | — |
| United States | 151,199 | 151,199 | — | — |
| Preferred securities | 12,971,521 | 12,971,521 | — | — |
| Rights | 3,461 | 3,461 | — | — |
| Short-term investments | 396,848 | 396,848 | — | — |
| Total investments in securities | $621,677,008 | $621,249,538 | — | $427,470 |
| Multifactor Large Cap ETF | ||||
| Investments in securities: | ||||
| Assets | ||||
| Common stocks | $713,663,733 | $713,663,733 | — | — |
| Short-term investments | 467,421 | 467,421 | — | — |
| Total investments in securities | $714,131,154 | $714,131,154 | — | — |
| Derivatives: | ||||
| Liabilities | ||||
| Futures | $(4,132) | $(4,132) | — | — |
| Multifactor Mid Cap ETF | ||||
| Investments in securities: | ||||
| Assets | ||||
| Common stocks | $2,551,833,242 | $2,551,833,242 | — | — |
| Short-term investments | 2,245,729 | 2,245,729 | — | — |
| Total investments in securities | $2,554,078,971 | $2,554,078,971 | — | — |
| Multifactor Small Cap ETF | ||||
| Investments in securities: | ||||
| Assets | ||||
| Common stocks | $335,916,428 | $335,916,428 | — | — |
| Short-term investments | 848,662 | 848,662 | — | — |
| Total investments in securities | $336,765,090 | $336,765,090 | — | — |
Security transactions and related
investment income. Investment security transactions are accounted for on a trade date plus one basis for daily NAV calculations. However, for financial reporting purposes, investment transactions are
reported on trade date. Interest income is accrued as earned. Dividend income is recorded on ex-date, except for dividends of certain foreign securities where the dividend may not be known until after the ex-date. In
those cases, dividend income, net of withholding taxes, is recorded when the fund becomes aware of the dividends. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Gains and
losses on securities sold are determined on the basis of identified cost and may include proceeds from litigation.
Real estate investment trusts. The funds may invest in real estate investment trusts (REITs). Distributions from REITs may be recorded as income and subsequently characterized by the REIT at the end of their fiscal year
as a reduction of cost of investments and/or as a realized gain. As a result, the funds will estimate the components of distributions from these securities. Such estimates are revised when the actual components of the
distributions are known.
Securities lending. The funds may lend their securities to earn additional income. The funds receive collateral from the borrower in an amount not less than the market value of the loaned securities. The
funds may invest their cash collateral in JHCT, an affiliate of the funds, which has a floating NAV and is registered with the Securities and Exchange Commission (SEC) as an investment company. JHCT is a prime money
market fund and invests in short-term money market investments. Each fund will receive the benefit of any gains and bear any losses generated by JHCT with respect to the cash collateral.
The funds have the right to recall
loaned securities on demand. If a borrower fails to return loaned securities when due, then the lending agent is responsible and indemnifies the funds for the lent securities. The lending agent uses the collateral
received from the borrower to purchase replacement securities of the same issue, type, class and series of the loaned securities. If the value of the collateral is less than the purchase cost of replacement
securities, the lending agent is responsible for satisfying the shortfall but only to the extent that the shortfall is not due to any decrease in the value of JHCT.
Although the risk of loss on
securities lent is mitigated by receiving collateral from the borrower and through lending agent indemnification, the funds could experience a delay in recovering securities or could experience a lower than expected
return if the borrower fails to return the securities on a timely basis. During the existence of the loan, the funds will receive from the borrower amounts equivalent to any dividends, interest or other distributions
on the loaned securities, as well as interest on
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 61 |
such amounts. The funds receive compensation for
lending their securities by retaining a portion of the return on the investment of the collateral and compensation from fees earned from borrowers of the securities. Securities lending income received by the funds is
net of fees retained by the securities lending agent. Net income received from JHCT is a component of securities lending income as recorded on the Statements of operations.
Obligations to repay collateral
received by the funds are shown on the Statements of assets and liabilities as Payable upon return of securities loaned and are secured by the loaned securities. The following table summarizes the values of securities
loaned by the funds and the corresponding cash collateral received at October 31, 2022. In addition, non-cash collateral in the form of U.S. Treasuries was pledged, as indicated below. This non-cash collateral cannot
be sold or repledged by the funds, and accordingly, is not reflected in the funds’ net assets.
| Fund | Market value of securities on loan | Cash collateral received | Non-cash collateral |
| Multifactor Developed International ETF | $5,483,202 | $2,056,285 | $3,795,290 |
| Multifactor Emerging Markets ETF | 904,093 | 278,874 | 699,630 |
| Multifactor Large Cap ETF | 982,786 | 306,607 | 741,066 |
| Multifactor Mid Cap ETF | 11,773,219 | 2,149,942 | 10,239,080 |
| Multifactor Small Cap ETF | 4,221,988 | 460,758 | 3,963,920 |
Foreign investing. Assets, including investments, and liabilities denominated in foreign currencies are translated into U.S. dollar values each day at the prevailing exchange rate. Purchases and sales of
securities, income and expenses are translated into U.S. dollars at the prevailing exchange rate on the date of the transaction. The effect of changes in foreign currency exchange rates on the value of securities is
reflected as a component of the realized and unrealized gains (losses) on investments. Foreign investments are subject to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar
value of securities denominated in that currency.
Funds that invest internationally
generally carry more risk than funds that invest strictly in U.S. securities. These risks are heightened for investments in emerging markets. Risks can result from differences in economic and political conditions,
regulations, market practices (including higher transaction costs), accounting standards and other factors.
There may be unexpected restrictions
on investments or on exposures to investments in companies located in certain foreign countries, such as China. For example, a government may restrict investment in companies or industries considered important to
national interests, or intervene in the financial markets, such as by imposing trading restrictions, or banning or curtailing short selling. As a result of forced sales of a security, or inability to participate in an
investment the manager otherwise believes is attractive, a fund may incur losses.
Trading in certain Chinese
securities through Hong Kong Stock Connect or Bond Connect, mutual market access programs that enable foreign investment in the People’s Republic of China, is subject to certain restrictions and risks.
Securities offered through these programs may lose purchase eligibility and any changes in laws, regulations and policies impacting these programs may affect security prices, which could adversely affect the
funds’ performance.
Foreign taxes. The funds may be subject to withholding tax on income, capital gains or repatriations imposed by certain countries, a portion of which may be recoverable. Foreign taxes are accrued based
upon the funds’ understanding of the tax rules and rates that exist in the foreign markets in which it invests. Taxes are accrued based on gains realized by the funds as a result of certain foreign security
sales. In certain circumstances, estimated taxes are accrued based on unrealized appreciation of such securities. Investment income is recorded net of foreign withholding taxes.
Overdraft. The funds may have the ability to borrow from banks for temporary or emergency purposes, including meeting redemption requests that otherwise might require the untimely sale of securities.
Pursuant to the funds’ custodian agreement, the custodian may loan money to the funds to make properly authorized payments. The funds are obligated to repay the custodian for any overdraft, including any related
costs or expenses. The custodian may have a lien, security interest or security entitlement in any fund property that is not otherwise segregated or pledged, to the extent of any overdraft, and to the maximum extent
permitted by law.
Line of credit. The funds and other affiliated funds have entered into a syndicated line of credit agreement with Citibank, N.A. as the administrative agent that enables them to participate in a $1
billion unsecured committed line of credit. Excluding commitments designated for a certain fund and subject to the needs of all other affiliated funds, a fund can borrow up to an aggregate commitment amount of $750
million, subject to asset coverage and other limitations as specified in the agreement.
A commitment fee payable at the end
of each calendar quarter, based on the average daily unused portion of each line of credit, is charged to each participating fund based on a combination of fixed and asset-based allocations and is reflected in Other
expenses on the Statements of operations.
Commitment fees for the six months
ended October 31, 2022 were as follows:
| Fund | Commitment fee |
| Multifactor Developed International ETF | $2,293 |
| Multifactor Emerging Markets ETF | 2,509 |
| Multifactor Large Cap ETF | 2,812 |
| Multifactor Mid Cap ETF | 4,730 |
| Multifactor Small Cap ETF | 2,166 |
| 62 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT |
Expenses. Within the John Hancock group of funds complex, expenses that are directly attributable to an individual fund are allocated to such fund. Expenses that are not readily attributable to a
specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund’s relative net assets. Expense estimates are accrued
in the period to which they relate and adjustments are made when actual amounts are known.
Federal income taxes. Each fund intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal
income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.
For federal income tax purposes, as
of April 30, 2022, certain funds have short-term and long-term capital loss carryforwards available to offset future net realized capital gains. These carryforwards do not expire. The following table details the
capital loss carryforwards available as of April 30, 2022:
| No Expiration Date | ||
| Fund | Short Term | Long Term |
| Multifactor Developed International ETF | $12,179,222 | $20,805,806 |
| Multifactor Emerging Markets ETF | 17,614,284 | 12,928,210 |
| Multifactor Large Cap ETF | 14,174,353 | 21,776,731 |
| Multifactor Mid Cap ETF | 67,609,853 | 3,994,981 |
| Multifactor Small Cap ETF | 52,117,176 | 21,813,893 |
Due to certain Internal Revenue
Code rules, utilization of the capital loss carryforwards may be limited in future years.
As of April 30, 2022, the funds had
no uncertain tax positions that would require financial statement recognition, derecognition or disclosure. The funds’ federal tax returns are subject to examination by the Internal Revenue Service for a period
of three years.
For federal income tax purposes, the
costs of investments owned on October 31, 2022, including short-term investments, were as follows:
| Fund | Aggregate cost | Unrealized appreciation | Unrealized (depreciation) | Net unrealized appreciation/ (depreciation) |
| Multifactor Developed International ETF | $445,612,824 | $19,429,383 | $(64,481,973) | $(45,052,590) |
| Multifactor Emerging Markets ETF | 714,008,597 | 64,439,097 | (156,770,686) | (92,331,589) |
| Multifactor Large Cap ETF | 660,669,637 | 110,679,812 | (57,222,427) | 53,457,385 |
| Multifactor Mid Cap ETF | 2,385,243,002 | 343,857,912 | (175,021,943) | 168,835,969 |
| Multifactor Small Cap ETF | 324,651,306 | 35,951,460 | (23,837,676) | 12,113,784 |
Distribution of income and
gains. Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The funds generally declare and pay dividends at least semiannually
from net investment income, if any. Capital gain distributions, if any, are typically distributed annually.
Such distributions, on a tax basis,
are determined in conformity with income tax regulations, which may differ from US GAAP. Distributions in excess of tax basis earnings and profits, if any, are reported in the funds’ financial statements as a
return of capital. The final determination of tax characteristics of the funds’ distribution will occur at the end of the year and will subsequently be reported to shareholders.
Capital accounts within the
financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any, will reverse in a subsequent
period. Book-tax differences are primarily attributable to investments in passive foreign investment companies, wash sale loss deferrals and redemptions-in-kind.
Note 3—Derivative instruments
The funds may invest in derivatives
in order to meet their investment objective. Derivatives include a variety of different instruments that may be traded in the over-the-counter (OTC) market, on a regulated exchange or through a clearing facility. The
risks in using derivatives vary depending upon the structure of the instruments, including the use of leverage, optionality, the liquidity or lack of liquidity of the contract, the creditworthiness of the counterparty
or clearing organization and the volatility of the position. Some derivatives involve risks that are potentially greater than the risks associated with investing directly in the referenced securities or other
referenced underlying instrument. Specifically, the funds are exposed to the risk that the counterparty to an OTC derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor
its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction.
Certain derivatives are traded or
cleared on an exchange or central clearinghouse. Exchange-traded or centrally-cleared transactions generally present less counterparty risk to a fund than OTC transactions. The exchange or clearinghouse stands between
the funds and the broker to the contract and therefore, credit risk is generally limited to the failure of the exchange or clearinghouse and the clearing member.
Futures. A futures contract is a contractual agreement to buy or sell a particular currency or financial instrument at a pre-determined price in the future. Futures are traded on an exchange and
cleared through a central clearinghouse. Risks related to the use of futures contracts include possible illiquidity of the futures markets and contract prices that can be highly volatile and imperfectly correlated to
movements in the underlying financial instrument and potential losses in excess of the amounts recognized on the Statements of assets and liabilities. Use of long futures contracts subjects the funds to the risk of
loss up to the notional value of the futures contracts. Use of short futures contracts subjects the funds to unlimited risk of loss.
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 63 |
Upon entering into a futures
contract, the fund is required to deposit initial margin with the broker in the form of cash or securities. The amount of required margin is set by the broker and is generally based on a percentage of the contract
value. The margin deposit must then be maintained at the established level over the life of the contract. Cash that has been pledged by a fund, if any, is detailed in the Statements of assets and liabilities as
Collateral held at broker for futures contracts. Securities pledged by the funds, if any, are identified in the Funds’ investments. Subsequent payments, referred to as variation margin, are made or received by a
fund periodically and are based on changes in the market value of open futures contracts. Futures contracts are marked-to-market daily and unrealized gain or loss is recorded by the fund. Receivable/Payable for
futures variation margin is included in the Statements of assets and liabilities. When the contract is closed, a fund records a realized gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The following table details how the
funds used futures contracts during the six months ended October 31, 2022. In addition, the table summarizes the range of notional contract amounts held by the funds, as measured at each quarter end:
| Fund | Reason | USD Notional range |
| Multifactor Developed International ETF | The fund used futures contracts to meet the transactional needs of the portfolio and to equitize cash balances, if needed. As of October 31, 2022, there were no open futures contracts. | Up to $10.7 million, as measured during the period |
| Multifactor Emerging Markets ETF | The fund used futures contracts to meet the transactional needs of the portfolio and to equitize cash balances, if needed. As of October 31, 2022, there were no open futures contracts. | Up to $7.9 million, as measured during the period |
| Multifactor Large Cap ETF | The fund used futures contracts to meet the transactional needs of the portfolio and to equitize cash balances, if needed. | Up to $1.0 million, as measured during the period |
| Multifactor Mid Cap ETF | The fund used futures contracts to meet the transactional needs of the portfolio and to equitize cash balances, if needed. As of October 31, 2022, there were no open futures contracts. | Up to $7.5 million, as measured during the period |
| Multifactor Small Cap ETF | The fund used futures contracts to meet the transactional needs of the portfolio and to equitize cash balances, if needed. As of October 31, 2022, there were no open futures contracts. | Up to $2.9 million, as measured during the period |
Fair value of derivative instruments
by risk category
The table below summarizes the fair
value of derivatives held by the funds at October 31, 2022 by risk category:
| Fund | Risk | Statements of assets and liabilities location | Financial instruments location | Assets derivatives fair value | Liabilities derivatives fair value |
| Multifactor Large Cap ETF | Equity | Receivable/payable for futures variation margin1 | Futures | — | $(4,132) |
| 1 | Reflects cumulative appreciation/depreciation on open futures as disclosed in the Derivatives section of Funds’ investments. Only the period end variation margin receivable/payable is separately reported on the Statements of assets and liabilities. |
Effect of derivative instruments on
the Statements of operations
The table below summarizes the net
realized gain (loss) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the six months ended October 31, 2022:
| Statements of operations location - Net realized gain (loss) on: | ||
| Fund | Risk | Futures contracts |
| Multifactor Developed International ETF | Equity | $(411,768) |
| Multifactor Emerging Markets ETF | Equity | $(249,872) |
| Multifactor Large Cap ETF | Equity | $(36,566) |
| Multifactor Mid Cap ETF | Equity | $(92,425) |
| Multifactor Small Cap ETF | Equity | $58,555 |
The table below summarizes the net
change in unrealized appreciation (depreciation) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the six months ended October 31,
2022:
| Statements of operations location - Change in net unrealized appreciation (depreciation) of: | ||
| Fund | Risk | Futures contracts |
| Multifactor Large Cap ETF | Equity | $(4,132) |
| 64 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT |
Note 4—Guarantees and indemnifications
Under the Trust’s
organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust, including the funds. Additionally, in the normal course of
business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future
claims that may be made against the Trust that have not yet occurred. The risk of material loss from such claims is considered remote.
Note 5—Fees and transactions with affiliates
John Hancock Investment Management
LLC (the Advisor) serves as investment advisor for the funds. The Advisor is an indirect, principally owned subsidiary of John Hancock Life Insurance Company (U.S.A.), which in turn is a subsidiary of Manulife
Financial Corporation (MFC).
Management fee.The funds have an investment management agreement with the Advisor under which each fund pays a monthly management fee to the Advisor equivalent on an annual basis as detailed below. The
Advisor has a subadvisory agreement with Dimensional Fund Advisors LP. The funds are not responsible for payment of the subadvisory fees.
The management fee structure is as
follows:
The Advisor has contractually
agreed to waive a portion of its management fee and/or reimburse expenses for certain funds of the John Hancock group of funds complex, including the funds (the participating portfolios). This waiver is based upon
aggregate net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of the funds.
During the six months ended October 31, 2022, this waiver amounted to 0.01% of the funds’ average daily net assets, on an annualized basis. This arrangement expires on July 31, 2024, unless renewed by mutual
agreement of the funds and the Advisor based upon a determination that this is appropriate under the circumstances at that time.
The Advisor has contractually agreed
to reduce its management fee or, if necessary, make a payment to each fund, in an amount equal to the amount by which expenses of the fund exceed the following:
Expenses means all the expenses of
the funds, excluding taxes, brokerage commissions, interest expense, litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the funds’ business, borrowing
costs, prime brokerage fees, acquired fund fees and expenses paid indirectly, and short dividend expense. The funds’ expense limitation agreement expires on August 31, 2023, unless renewed by mutual agreement of
the funds and the Advisor based upon a determination that this is appropriate under the circumstances at that time.
The expense reductions described
above amount to the following for the six months ended October 31, 2022.
Expenses waived or reimbursed in
the current fiscal period are not subject to recapture in future fiscal periods.
The investment management fees,
including the impact of the waivers and reimbursements as described above, incurred for the six months ended October 31, 2022, were equivalent to a net annual effective rate of the funds’ average daily net
assets:
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 65 |
Accounting and legal services. Pursuant to a service agreement, the funds reimburse the Advisor for all expenses associated with providing the administrative, financial, legal, compliance, accounting and recordkeeping
services to the funds, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. These accounting and legal services fees incurred, for the six months
ended October 31, 2022, amounted to an annual rate of 0.02% of the funds’ average daily net assets.
Trustee expenses. The funds compensate each Trustee who is not an employee of the Advisor or its affiliates. The costs of paying Trustee compensation and expenses are allocated to each fund based on their
net assets relative to other funds within the John Hancock group of funds complex.
Note 6—Capital share transactions
Each fund will issue and redeem
shares only in a large number of specified shares, each called a “creation unit,” or multiples thereof. Multifactor Large Cap ETF, Multifactor Mid Cap ETF, and Multifactor Small Cap ETF issue and redeem
shares at NAV in creation units of 25,000 shares. Multifactor Developed International ETF and Multifactor Emerging Markets ETF issue and redeem shares at NAV in creation units of 100,000 shares.
Only authorized participants may
engage in creation or redemption transactions directly with the funds. Such transactions generally take place when an authorized participant deposits into a fund a designated portfolio of securities (including any
portion of such securities for which cash may be substituted) and a specified amount of cash approximating the holdings of the fund in exchange for a specified number of creation units. Similarly, shares can be
redeemed only in creation units, generally for a designated portfolio of securities (including any portion of such securities for which cash may be substituted) held by a fund and a specified amount of cash. For
purposes of US GAAP, in-kind redemption transactions are treated as a sale of securities and any resulting gains and losses are recognized based on the market value of the securities on the date of the transfer.
Authorized participants pay a transaction fee to the custodian when purchasing and redeeming creation units of the funds. The transaction fee is used to defray the costs associated with the issuance and redemption of
creation units. Individual shares of the funds may only be purchased and sold in secondary market transactions through brokers. Secondary market transactions may be subject to brokerage commissions. Shares of the
funds are listed and traded on the NYSE Arca, Inc., trade at market prices rather than NAV, and may trade at a price greater than or less than NAV.
Authorized participants transacting
in creation or redemption of units for cash may also pay an additional variable charge to compensate the relevant fund for the costs associated with purchasing or selling the applicable securities. For the six months
ended October 31, 2022, such variable charges were approximately $100 and $125,200 for Multifactor Developed International ETF and Multifactor Emerging Markets ETF, respectively. These charges are included in shares
issued or repurchased on the Statements of Changes in Net Assets.
Note 7—Purchase and sale of securities
Purchases and sales of securities,
other than short-term investments, are aggregated below for the six months ended October 31, 2022. In addition, purchases and sales of in-kind transactions are aggregated below for the six months ended October 31,
2022:
| Purchases | Sales and maturities | |||
| Fund | In-kind transactions | Non in-kind transactions | In-kind transactions | Non in-kind transactions |
| Multifactor Developed International ETF | $10,286,718 | $46,751,744 | $31,254,820 | $34,957,140 |
| Multifactor Emerging Markets ETF | 18,594,677 | 122,852,203 | 5,345,247 | 31,542,921 |
| Multifactor Large Cap ETF | 35,727,109 | 23,779,246 | 58,639,020 | 22,700,800 |
| Multifactor Mid Cap ETF | 380,360,780 | 240,171,235 | 116,875,200 | 230,522,403 |
| Multifactor Small Cap ETF | 34,259,666 | 88,514,680 | 64,324,433 | 87,033,726 |
Note 8—Industry or sector risk
Certain funds may invest a large
percentage of their assets in one or more particular industries or sectors of the economy. If a large percentage of a fund’s assets are economically tied to a single or small number of industries or sectors of
the economy, the fund will be less diversified than a more broadly diversified fund, and it may cause the fund to underperform if that industry or sector underperforms. In addition, focusing on a particular industry
or sector may make the fund’s NAV more volatile. Further, a fund that invests in particular industries or sectors is particularly susceptible to the impact of market, economic, regulatory and other factors
affecting those industries or sectors. Financial services companies can be hurt by economic declines, changes in interest rates, and regulatory and market impacts.
Note 9—Emerging-market risk
Foreign investing especially in
emerging markets, has additional risks, such as currency and market volatility and political and social instability. Funds that invest a significant portion of assets in the securities of issuers based in countries
with emerging market economies are subject to greater levels of foreign investment risk than funds investing primarily in more-developed foreign markets, since emerging-market securities may present other risks
greater than, or in addition to, the risks of investing in developed foreign countries.
Note 10—Investment by affiliated funds
Certain investors in the funds are
affiliated funds that are managed by the Advisor and its affiliates. The affiliated funds do not invest in the funds for the purpose of exercising management or control; however, this investment may represent a
significant portion of the funds’ net assets. At October 31, 2022, funds within the John Hancock group of funds complex had the following affiliate ownership as a percentage of the funds’ net assets (funds
with an affiliate ownership of 5% or more are disclosed separately):
| Fund | Affiliated fund | Affiliated Concentration |
| Multifactor Developed International ETF | John Hancock Variable Insurance Trust Managed Volatility Growth Portfolio | 42.29% |
| 66 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT |
| Fund | Affiliated fund | Affiliated Concentration |
| John Hancock Variable Insurance Trust Managed Volatility Balanced Portfolio | 19.10% | |
| Other affiliated funds | 2.83% | |
| Total | 64.22% | |
| Multifactor Emerging Markets ETF | John Hancock Funds II Multimanager Lifestyle Growth Portfolio | 29.03% |
| John Hancock Variable Insurance Trust Managed Volatility Growth Portfolio | 19.16% | |
| John Hancock Funds II Multimanager Lifestyle Balanced Portfolio | 18.75% | |
| John Hancock Funds II Multimanager Lifestyle Aggressive Portfolio | 10.43% | |
| John Hancock Variable Insurance Trust Managed Volatility Balanced Portfolio | 9.40% | |
| Other affiliated funds | 5.62% | |
| Total | 92.39% | |
| Multifactor Mid Cap ETF | Total other affiliated funds | 8.47% |
| Multifactor Small Cap ETF | John Hancock Variable Insurance Trust Managed Volatility Growth Portfolio | 35.20% |
| John Hancock Variable Insurance Trust Managed Volatility Balanced Portfolio | 16.68% | |
| Other affiliated funds | 4.27% | |
| Total | 56.15% |
Note 11—Investment in affiliated underlying funds
The funds may invest in affiliated
underlying funds that are managed by the Advisor and its affiliates. Information regarding the funds’ fiscal year to date purchases and sales of the affiliated underlying funds as well as income and capital
gains earned by the funds, if any, is as follows:
| Dividends and distributions | |||||||||
| Affiliate | Ending share amount | Beginning value | Cost of purchases | Proceeds from shares sold | Realized gain (loss) | Change in unrealized appreciation (depreciation) | Income distributions received | Capital gain distributions received | Ending value |
| Multifactor Developed International ETF | |||||||||
| John Hancock Collateral Trust* | 205,810 | $10,869,912 | $24,226,030 | $(33,038,130) | $(2,175) | $614 | $53,084 | — | $2,056,251 |
| Multifactor Emerging Markets ETF | |||||||||
| John Hancock Collateral Trust* | 27,913 | $2,767,388 | $2,857,793 | $(5,346,039) | $(390) | $125 | $14,341 | — | $278,877 |
| Multifactor Large Cap ETF | |||||||||
| John Hancock Collateral Trust* | 30,366 | $468,378 | $2,693,457 | $(2,858,380) | $(94) | $22 | $7,073 | — | $303,383 |
| Multifactor Mid Cap ETF | |||||||||
| John Hancock Collateral Trust* | 214,151 | $7,902,546 | $44,594,583 | $(50,354,449) | $(3,613) | $517 | $181,687 | — | $2,139,584 |
| Multifactor Small Cap ETF | |||||||||
| John Hancock Collateral Trust* | 45,975 | $761,349 | $10,076,185 | $(10,377,568) | $(686) | $52 | $7,343 | — | $459,332 |
| * | Refer to the Securities lending note within Note 2 for details regarding this investment. |
Note 12—Coronavirus (COVID-19) pandemic
The COVID-19 disease has resulted in
significant disruptions to global business activity. A widespread health crisis such as a global pandemic could cause substantial market volatility, exchange-trading suspensions, and closures, which may lead to less
liquidity in certain instruments, industries, sectors or the markets generally, and may ultimately affect fund performance.
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 67 |
SPECIAL SHAREHOLDER MEETING
John Hancock Exchange-Traded Fund
Trust held a Special Meeting of Shareholders on Friday, September 9, 2022. The following proposal was considered by the shareholders:
Proposal: To elect seven Trustees as members of the Board of Trustees of the Trust.
THE PROPOSAL PASSED ON September 9, 2022
| Total votes for the nominee | Total votes withheld from the nominee | |
| Independent Trustees | ||
| Frances G. Rathke | 108,098,453.899 | 1,210,343.509 |
| Noni L. Ellison | 107,738,905.434 | 1,569,891.974 |
| Dean C. Garfield | 107,863,117.913 | 1,445,679.495 |
| Patricia Lizarraga | 107,968,362.933 | 1,340,434.475 |
| Non-Independent Trustees | ||
| Andrew G. Arnott | 108,465,487.916 | 843,309.492 |
| Marianne Harrison | 108,576,111.219 | 732,686.189 |
| Paul Lorentz | 107,724,410.239 | 1,584,387.169 |
| 68 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT |
EVALUATION OF ADVISORY AND
SUBADVISORY AGREEMENTS BY THE BOARD OF TRUSTEES
This section describes the
evaluation by the Board of Trustees (the Board) of John Hancock Exchange-Traded Fund Trust (the Trust) of the Advisory Agreement (the Advisory Agreement) with John Hancock Investment Management LLC (the Advisor) and
the Subadvisory Agreement (the Subadvisory Agreement) with Dimensional Fund Advisors LP (the Subadvisor) with respect to each of the portfolios of the Trust included in this report (the Funds). The Advisory Agreement
and Subadvisory Agreement are collectively referred to as the Agreements. Prior to the June 21-23, 2022 videoconference1 meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the
Agreements at a videoconference meeting held on May 24-25, 2022. The Trustees who are not “interested persons” of the Trust as defined by the Investment Company Act of 1940, as amended (the
“1940 Act”) (the “Independent Trustees”) also met separately to evaluate and discuss the information presented, including with counsel to the Independent Trustees and a third-party consulting
firm.
Approval of Advisory and Subadvisory
Agreements
At a videoconference meeting held on
June 21-23, 2022, the Board, including the Trustees who are not parties to any Agreement or considered to be interested persons of the Trust under the 1940 Act, reapproved for an annual period the continuation of the
Advisory Agreement between the Trust and the Advisor and the Subadvisory Agreement between the Advisor and the Subadvisor with respect to each of the Funds identified in Appendix A.
In considering the Advisory
Agreement and the Subadvisory Agreement with respect to each Fund, the Board received in advance of the meetings a variety of materials relating to each Fund, the Advisor and the Subadvisor, including comparative
performance, fee and expense information for peer groups of similar funds prepared by an independent third-party provider of fund data; performance information for the Funds’ benchmark indices; and, with respect
to the Subadvisor, comparative performance information for comparably managed accounts, as applicable; and other information provided by the Advisor and the Subadvisor regarding the nature, extent and quality of
services provided by the Advisor and the Subadvisor under their respective Agreements, as well as information regarding the Advisor’s revenues and costs of providing services to the Funds and any compensation
paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreement is considered, particular focus is given to information concerning Fund performance,
comparability of fees and total expenses, and profitability. However, the Board noted that the evaluation process with respect to the Advisor and the Subadvisor is an ongoing one. In this regard, the Board also took
into account discussions with management and information provided to the Board (including its various committees) at prior meetings with respect to the services provided by the Advisor and the Subadvisor to the Funds,
including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisor with respect to the Funds it manages. The information received and
considered by the Board in connection with the May and June meetings and throughout the year was both written and oral. The Board also considered the nature, quality, and extent of the non-advisory services, if any,
to be provided to the Funds by the Advisor and/or its affiliates, including administrative services. The Board considered the Advisory Agreement and the Subadvisory Agreement separately in the course of its
review. In doing so, the Board noted the respective roles of the Advisor and Subadvisor in providing services to the Funds. In addition, although the Board approved the renewal of the Agreements for all the Funds at
the June meeting, the Board considered each Fund separately.
Throughout the process, the Board
asked questions of and requested additional information from management. The Board is assisted by counsel for the Trust and the Independent Trustees are also separately assisted by independent legal counsel throughout
the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements and discussed
the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement
with respect to each Fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends
prevailing generally in the economy, the securities markets and the industry) and did not treat any single factor as determinative, and each Trustee may have attributed different weights to different factors. The
Board’s conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board’s ongoing regular review of Fund performance and operations
throughout the year.
Nature, extent and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the Funds, the Board reviewed information provided by the
Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor’s compliance and regulatory history, including its Form ADV.
The Board also noted that on a regular basis it receives and reviews information from the Trust’s Chief Compliance Officer (CCO) regarding the Funds’ compliance policies and procedures established pursuant
to Rule 38a-1 under the 1940 Act. The Board observed that the scope of services provided by the Advisor, and of the undertakings required of the Advisor in connection with those services, including maintaining and
monitoring its own and the fund’s compliance programs, risk management programs, liquidity management programs and cybersecurity programs, had expanded over time as a result of regulatory, market and other
developments. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the Funds, including, but not limited to, general supervision of and coordination of the services
provided by the Subadvisor, and is also responsible for monitoring and reviewing the activities of the Subadvisor and other third-party service providers, including the Funds’ distributor. The Board also
considered the significant risks assumed by the Advisor in connection with the services provided to the Funds including entrepreneurial risk in sponsoring new Funds and ongoing risks including investment, operational,
enterprise, litigation, regulatory and compliance risks with respect to all Funds.
1On June 19, 2020, as a result of health and safety measures put in place to combat the global COVID-19 pandemic, the Securities and Exchange Commission issued an exemptive order
(the “Order”) pursuant to Sections 6(c) and 38(a) of the Investment Company Act of 1940, as amended (the “1940 Act”), that temporarily exempts registered investment management companies from
the in-person voting requirements under the 1940 Act, subject to certain requirements, including that votes taken pursuant to the Order are ratified at the next in-person meeting. The Board determined that reliance on
the Order was necessary or appropriate due to the circumstances related to current or potential effects of COVID-19 and therefore, the Board’s May and June meetings were held via videoconference in reliance on
the Order. This exemptive order supersedes, in part, a similar, earlier exemptive order issued by the SEC.
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 69 |
In considering the nature, extent,
and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor’s management and the quality of the performance of the Advisor’s duties, through
Board meetings, discussions and reports during the preceding year and through each Trustee’s experience as a Trustee of the Trust and of the other trusts in the John Hancock group of funds complex (the John
Hancock Fund Complex).
In the course of their
deliberations regarding the Advisory Agreement, the Board considered, among other things:
(a)the skills and competency with which the Advisor has in the past managed the Trust’s affairs and its subadvisory relationships, the Advisor’s oversight and monitoring of the
Subadvisor’s investment performance and compliance programs, such as the Subadvisor’s compliance with fund policies and objectives, review of brokerage matters, including with respect to trade allocation
and best execution, and the Advisor’s timeliness in responding to performance issues;
(b)the background, qualifications and skills of the Advisor’s personnel;
(c)the Advisor’s compliance policies and procedures and its responsiveness to regulatory changes and fund industry developments;
(d)the Advisor’s administrative capabilities, including its ability to supervise the other service providers for the Funds, as well as the Advisor’s oversight of any securities
lending activity, its monitoring of class action litigation and collection of class action settlements on behalf of the Funds, and bringing loss recovery actions on behalf of the Funds;
(e)the financial condition of the Advisor and whether it has the financial wherewithal to provide a high level and quality of services to the Funds;
(f)the Advisor’s initiatives intended to improve various aspects of the Trust’s operations and investor experience with the Funds; and
(g)the Advisor’s reputation and experience in serving as an investment adviser to the Trust and the benefit to shareholders of investing in funds that are part of a family of funds
offering a variety of investments.
The Board concluded that the Advisor
may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the Funds.
Investment performance. In considering each Fund’s performance, the Board noted that it reviews at its regularly scheduled meetings information about the Funds’ performance results. In connection with
the consideration of the Advisory Agreement, the Board:
(a)reviewed information prepared by management regarding the Funds’ performance;
(b)considered the comparative performance of each Fund’s respective benchmark index;
(c)considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; and
(d)took into account the Advisor’s analysis of each Fund’s performance and its plans and recommendations regarding the Trust’s subadvisory arrangements generally and with
respect to particular Funds.
The Board noted that while it found
the data provided by the independent third-party generally useful it recognized its limitations, including in particular that the data may vary depending on the end date selected and the results of the performance
comparisons may vary depending on the selection of the peer group. The Board reviewed Fund performance against each Fund’s respective benchmark and concluded that the performance of certain Funds has generally
been in line with or generally outperformed the historical performance of comparable funds based on the median percentile and/or each Fund’s respective benchmark with certain exceptions noted in Appendix A. In
such cases, the Board concluded that such performance is being monitored and reasonably addressed, where appropriate.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of fund data, including, among other data, each Fund’s contractual and net management fees
(and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the Fund in light of the nature, extent and quality of the
management and advisory and subadvisory services provided by the Advisor and the Subadvisor. The Board considered each Fund’s ranking within a smaller group of peer funds chosen by the independent third-party
provider, as well as the Fund’s ranking within broader groups of funds. In comparing each Fund’s contractual and net management fees to that of comparable funds, the Board noted that such fees include both
advisory and administrative costs.
The Board took into account
management’s discussion of the Funds’ expenses, including previous actions taken to reduce management fees for certain of the Funds. The Board also took into account management’s discussion with
respect to the overall management fee and the fees of the Subadvisor, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee, in each case in light of the services
rendered for those amounts and the risks undertaken by the Advisor. The Board also noted that the Advisor pays the subadvisory fees of the Funds, and that such fees are negotiated at arm’s length with respect to
the Subadvisor. The Board also took into account that management had agreed to implement an overall fee waiver across the complex, including each of the Funds, which is discussed further below. The Board also noted
management’s discussion of the Funds’ expenses, as well as any actions taken over the past several years to reduce the Funds’ operating expenses. The Board also noted that, in addition, the Advisor
is currently waiving fees and/or reimbursing expenses with respect to each Fund. The Board also took into account that management has approved the implementation of breakpoints in each Fund’s subadvisory fee
schedule. The Board reviewed information provided by the Advisor concerning the investment advisory fees charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the John
Hancock Fund Complex) having similar investment mandates, if any. The Board considered any differences between the Advisor’s and Subadvisor’s services to a Fund and the services they provide to other
comparable clients or funds. The Board concluded that the advisory fee paid with respect to each of the Funds is reasonable in light of the nature, extent and quality of the services provided to the Funds under the
Advisory Agreement.
| 70 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT |
Profitability/Fall out benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor’s relationship with the Trust, the
Board:
(a)reviewed financial information of the Advisor;
(b)reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to each Fund;
(c)received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole and with respect to each Fund;
(d)received information with respect to the Advisor’s allocation methodologies used in preparing the profitability data and considered that the Advisor hired an independent
third-party consultant to provide an analysis of the Advisor’s allocation methodologies;
(e)considered that the John Hancock insurance companies that are affiliates of the Advisor, as shareholders of the Trust directly or through their separate accounts, receive certain tax
credits or deductions relating to foreign taxes paid and dividends received by certain Funds of the Trust and noted that these tax benefits, which are not available to participants in qualified retirement plans under
applicable income tax law, are reflected in the profitability analysis reviewed by the Board;
(f)considered that the Advisor also provides administrative services to the Funds on a cost basis pursuant to an administrative services agreement;
(g)noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the Funds;
(h)noted that the subadvisory fees for the Funds are paid by the Advisor and are negotiated at arm’s length;
(i)noted that the Advisor also pays the Subadvisor a license fee in connection with each Fund’s use of its Underlying Index;
(j)considered the Advisor’s ongoing costs and expenditures necessary to improve services, meet new regulatory and compliance requirements, and adapt to other challenges impacting the
fund industry; and
(k)considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to each Fund and the risks that it assumes as
Advisor, including entrepreneurial, operational, reputational, litigation and regulatory risk.
Based upon its review, the Board
concluded that the level of profitability, if any, of the Advisor and its affiliates from their relationship with each Fund was reasonable and not excessive.
Economies of scale. In considering the extent to which a Fund may realize any economies of scale and whether fee levels reflect these economies of scale for the benefit of Fund shareholders, the
Board:
(a)considered that the Advisor has contractually agreed to waive a portion of its management fee for certain funds of the John Hancock Fund Complex, including the Funds (the participating
portfolios) or otherwise reimburse the expenses of the participating portfolios (the reimbursement). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the reimbursement
is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each Fund;
(b)the Board also took into account management’s discussion of each Fund’s advisory fee structure; and
(c)considered the effect of the Funds’ growth in size on their performance and fees. The Board also noted that if the Funds’ assets increase over time, the Funds may realize
other economies of scale.
Approval of Subadvisory Agreement
In making its determination with
respect to approval of the Subadvisory Agreement, the Board reviewed:
(1)information relating to the Subadvisor’s business, including current subadvisory services to the Trust (and other funds in the John Hancock Fund Complex);
(2)the historical and current performance of each Fund and comparative performance information relating to the Fund’s benchmark and comparable funds;
(3)the subadvisory fee for each Fund, including the approved breakpoints for each of the Funds and to the extent available, comparable fee information prepared by an independent
third-party provider of fund data; and
(4)information relating to the nature and scope of any material relationships and their significance to the Trust’s Advisor and Subadvisor.
Nature, extent, and quality of services. With respect to the services provided by the Subadvisor with respect to each Fund, the Board received information provided to the Board by the Subadvisor, including the Subadvisor’s
Form ADV, as well as took into account information presented throughout the past year. The Board considered the Subadvisor’s current level of staffing and its overall resources, as well as received information
relating to the Subadvisor’s compensation program. The Board reviewed the Subadvisor’s history and investment experience, as well as information regarding the qualifications, background, and
responsibilities of the Subadvisor’s investment and compliance personnel who provide services to the Funds. The Board also considered, among other things, the Subadvisor’s compliance program and any
disciplinary history. The Board also considered the Subadvisor’s risk assessment and monitoring process. The Board reviewed the Subadvisor’s regulatory history, including whether it was involved in any
regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular, periodic reviews of the
Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust’s CCO and his staff conduct regular, periodic compliance
reviews with the Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of the Subadvisor and procedures reasonably designed to
assure compliance with the federal securities laws. The Board also took into account the financial condition of the Subadvisor.
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 71 |
The Board considered the
Subadvisor’s investment process and philosophy. The Board took into account that the Subadvisor’s responsibilities include the development and maintenance of an investment program for each Fund that is
consistent with the Fund’s investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance
controls related to performance of these services. The Board also received information with respect to the Subadvisor’s brokerage policies and practices, including with respect to best execution and soft
dollars.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with each Fund, the Board noted that the fees under the
Subadvisory Agreement are paid by the Advisor and not the Funds.
The Board also relied on the ability
of the Advisor to negotiate the Subadvisory Agreement with the Subadvisor, which is not affiliated with the Advisor, and the fees thereunder at arm’s length. As a result, the costs of the services to be provided
and the profits to be realized by the Subadvisor from its relationship with the Trust were not a material factor in the Board’s consideration of the Subadvisory Agreement.
The Board also received information
regarding the nature and scope (including their significance to the Advisor and its affiliates and to the Subadvisor) of any material relationships with respect to the Subadvisor, which include arrangements in which
the Subadvisor or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment
companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of
interest the Advisor might have in connection with the Subadvisory Agreement.
In addition, the Board considered
other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor’s relationship with the Funds, such as the opportunity to provide advisory services to additional funds in
the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the Fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays subadvisory fees to the Subadvisor. As noted above, the Board also considered each
Fund’s subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the Funds as included in the report prepared by the independent third-party provider of fund data, to the
extent available. The Board noted that the limited size of the Lipper peer groups were not sufficient for comparative purposes. The Board also took into account the subadvisory fees paid by the Advisor to the
Subadvisor with respect to the Funds to fees charged by each Fund’s Subadvisor to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered each Fund’s performance as compared to the Fund’s respective peer group median and the benchmark index and noted that the Board reviews
information about the Fund’s performance results at its regularly scheduled meetings. The Board noted the Advisor’s expertise and resources in monitoring the performance, investment style, and
risk-adjusted performance of the Subadvisor. The Board was mindful of the Advisor’s focus on the Subadvisor’s performance. The Board also noted the Subadvisor’s long-term performance record for
similar accounts, as applicable.
The Board’s decision to
approve the Subadvisory Agreement with respect to each Fund was based on a number of determinations, including the following:
(1)the Subadvisor has extensive experience and demonstrated skills as a manager;
(2)although not without variation, the performance of certain Funds have generally been in line with or generally outperformed the historical performance of comparable funds, based on the
median percentile, and/or each Fund’s respective benchmark, with certain exceptions noted in Appendix A (with respect to such exceptions, the Board concluded that the Fund’s performance is being monitored
and reasonably addressed, where appropriate);
(3)the subadvisory fees are reasonable in relation to the level and quality of services being provided under the Subadvisory Agreement; and
(4)that the subadvisory fees are paid by the Advisor and not the Funds and the Board has approved the implementation of breakpoints to each of the Fund’s subadvisory fee schedule.
Additional information relating to
each Fund’s fees and expenses and performance that the Board considered in approving the Advisory Agreement and Subadvisory Agreement for a particular Fund is set forth in Appendix A.
***
Based on the Board’s
evaluation of all factors that the Board deemed to be material, including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees,
concluded that renewal of the Advisory Agreement and the Subadvisory Agreement with respect to each Fund would be in the best interest of each of the respective Funds and its shareholders. Accordingly, the Board, and
the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreement with respect to each Fund for an additional one-year period.
| 72 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT |
APPENDIX A
| Portfolio (subadvisor) | Performance of fund, as of 12.31.2021 | Fees and expenses | Comments |
| Multifactor Developed International ETF(Dimensional Fund Advisors LP) | Benchmark Index – The fund outperformed for the one-year period and underperformed for the three- and five-year periods.Morningstar Category – The fund outperformed the peer group median for the one-year period and underperformed the peer group median for the three- and five-year periods. | Subadvisor fee comparative data not provided due to limited size of Lipper peer group for this purpose.Net management fees for this fund are higher than the peer group median.Net total expenses for this fund are higher than the peer group median. | The Board took into account management’s discussion of the factors that contributed to the fund’s performance relative to the benchmark index and peer group median for the three- and five-year periods, including the impact of past and current market conditions on the fund’s strategy and management’s plans for the fund.The Board also noted the fund’s favorable performance relative to the benchmark index and peer group median for the one-year period.The Board took into account management’s discussion of the fund’s expenses. |
| Multifactor Emerging Markets ETF(Dimensional Fund Advisors LP) | Benchmark Index - The fund outperformed for the one-year period and underperformed for the three-year period and for the period since September 30, 2018.Morningstar Category - The fund outperformed the peer group median for the three-year period and for the period since September 30, 2018 and underperformed for the one-year period. | Subadvisor fee comparative data not provided due to limited size of Lipper peer group for this purpose.Net management fees for this fund are lower than the peer group median.Net total expenses for this fund are higher than the peer group median. | The Board took into account management’s discussion of the fund’s performance, including the favorable performance relative to the peer group median for the three-year period and for the period since September 30, 2018 and relative to the benchmark index for the one-year period.The Board took into account management’s discussion of the fund’s expenses. |
| Multifactor Large Cap ETF(Dimensional Fund Advisors LP) | Benchmark Index – The fund outperformed for the one-year period and underperformed for the three- and five-year periods.Morningstar Category – The fund performed in-line with the peer group for the three-year period and underperformed the peer group median for the one- and five-year periods. | Subadvisor fee comparative data not provided due to limited size of Lipper peer group for this purpose.Net management fees for this fund are equal to the peer group median.Net total expenses for this fund are higher than the peer group median. | The Board took into account management’s discussion of the factors that contributed to the Fund’s performance relative to the benchmark index for the three- and five-year periods and relative to the peer group median for the one-, and five-year periods, including the impact of past and current market conditions on the fund’s strategy and management’s plans for the fund.The Board also noted the fund’s favorable performance relative to the benchmark index for the one-year period.The Board took into account management’s discussion of the fund’s expenses. |
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 73 |
| Portfolio (subadvisor) | Performance of fund, as of 12.31.2021 | Fees and expenses | Comments |
| Multifactor Mid Cap ETF(Dimensional Fund Advisors LP) | Benchmark Index – The fund outperformed for the one-, three- and five-year periods.Morningstar Category – The fund outperformed the peer group median for the one-, three- and five-year periods. | Subadvisor fee comparative data not provided due to limited size of Lipper peer group for this purpose.Net management fees for this fund are higher than the peer group median.Net total expenses for this fund are equal to the peer group median. | The Board took into account management’s discussion of the fund’s performance, including the favorable performance relative to the benchmark index and the peer group median for the one-, three- and five-year periods.The Board took into account management’s discussion of the fund’s expenses. |
| Multifactor Small Cap ETF(Dimensional Fund Advisors LP) | Benchmark Index – The fund outperformed for the one-year period and underperformed for the three-year period and for the period since November 30, 2017.Morningstar Category – The fund underperformed the peer group median for the one- and three-year periods and for the period since November 30, 2017. | Subadvisor fee comparative data not provided due to limited size of Lipper peer group for this purpose.Net management fees for this fund are higher than the peer group median.Net total expenses for this fund are higher than the peer group median. | The Board took into account management’s discussion of the factors that contributed to the fund’s performance relative to the benchmark index for the three-year period and for the period since November 30, 2017 and relative to the peer group median for the one- and three-year periods and for the period since November 30, 2017, including the impact of past and current market conditions on the fund’s strategy and management’s outlook for the fund.The Board also noted the fund’s favorable performance relative to the benchmark index for the one-year period.The Board took into account management’s discussion of the fund’s expenses. |
| 74 | JOHN HANCOCK MULTIFACTOR ETFS | SEMIANNUAL REPORT |
More information
† Non-Independent Trustee
* Member of the Audit Committee
^ Elected to serve as Independent Trustee effective
as of September 9, 2022.
‡ Elected to serve as Non-Independent Trustee
effective as of September 9, 2022.
The funds’ proxy voting
policies and procedures, as well as the funds’ proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at
sec.gov or on our website.
All of the funds’ holdings as
of the end of the third month of every fiscal quarter are filed with the SEC on Form N-PORT within 60 days of the end of the fiscal quarter. The funds’ Form N-PORT filings are available on our website and the
SEC’s website, sec.gov.
We make this information on your
funds’, as well as monthly portfolio holdings, and other funds’ details available on our website at jhinvestments.com/etf or by calling 800-225-6020.
| You can also contact us: | |
| 800-225-6020 | Regular mail: |
| jhinvestments.com/etf | John Hancock Investment Management 200 Berkeley Street Boston, MA 02116 |
| SEMIANNUAL REPORT | JOHN HANCOCK MULTIFACTOR ETFS | 75 |
John Hancock family of funds
A fund’s investment
objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. To obtain a prospectus, contact your financial
professional, call John Hancock Investment Management at 800-225-5291, or visit our website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
John Hancock ETF shares are bought
and sold at market price (not NAV), and are not individually redeemed from the fund. Brokerage commissions will reduce returns.
John Hancock ETFs are distributed by
Foreside Fund Services, LLC, and are subadvised by Manulife Investment Management (US) LLC or Dimensional Fund Advisors LP. Foreside is not affiliated with John Hancock Investment Management Distributors LLC, Manulife
Investment Management (US) LLC or Dimensional Fund Advisors LP.
Dimensional Fund Advisors LP
receives compensation from John Hancock in connection with licensing rights to the John Hancock Dimensional 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.
A message to shareholders
Portfolio summary
Corporate Bond ETF
SECTOR COMPOSITION AS OF
10/31/2022 (% of net assets)
QUALITY COMPOSITION AS OF
10/31/2022 (% of net assets)
Ratings are from Moody’s
Investors Service, Inc. If not available, we have used S&P Global Ratings. In the absence of ratings from these agencies, we have used Fitch Ratings, Inc. “Not rated” securities are those with no
ratings available from these agencies. All ratings are as of 10-31-22 and do not reflect subsequent downgrades or upgrades, if any.
| COUNTRY COMPOSITION AS OF 10/31/2022 (% of net assets) | |
| United States | 86.9 |
| United Kingdom | 4.8 |
| Canada | 2.7 |
| Norway | 1.6 |
| France | 1.2 |
| Germany | 1.0 |
| Netherlands | 1.0 |
| Other countries | 0.8 |
| TOTAL | 100.0 |
| 2 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT |
Mortgage-Backed Securities ETF
PORTFOLIO COMPOSITION AS OF
10/31/2022 (% of net assets)
QUALITY COMPOSITION AS OF
10/31/2022 (% of net assets)
Ratings are from Moody’s
Investors Service, Inc. If not available, we have used S&P Global Ratings. In the absence of ratings from these agencies, we have used Fitch Ratings, Inc. “Not rated” securities are those with no
ratings available from these agencies. All ratings are as of 10-31-22 and do not reflect subsequent downgrades or upgrades, if any.
| SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 3 |
Preferred Income ETF
SECTOR COMPOSITION AS OF
10/31/2022 (% of net assets)
QUALITY COMPOSITION AS OF
10/31/2022 (% of net assets)
Ratings are from Moody’s
Investors Service, Inc. If not available, we have used S&P Global Ratings. In the absence of ratings from these agencies, we have used Fitch Ratings, Inc. “Not rated” securities are those with no
ratings available from these agencies. All ratings are as of 10-31-22 and do not reflect subsequent downgrades or upgrades, if any.
| COUNTRY COMPOSITION AS OF 10/31/2022 (% of net assets) | |
| United States | 85.4 |
| Canada | 8.4 |
| United Kingdom | 3.0 |
| Bermuda | 1.7 |
| Other countries | 1.5 |
| TOTAL | 100.0 |
| 4 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT |
U.S. High Dividend ETF
SECTOR COMPOSITION AS OF
10/31/2022 (% of net assets)
| TOP 10 HOLDINGS AS OF 10/31/2022 (% of net assets) | |
| Apple, Inc. | 6.3 |
| Microsoft Corp. | 4.7 |
| Exxon Mobil Corp. | 2.5 |
| Gilead Sciences, Inc. | 2.4 |
| Prudential Financial, Inc. | 2.2 |
| IBM Corp. | 2.2 |
| Cisco Systems, Inc. | 2.1 |
| Intuit, Inc. | 2.1 |
| The Blackstone Group, Inc. | 2.1 |
| NVIDIA Corp. | 2.0 |
| TOTAL | 28.6 |
| Cash and cash equivalents are not included. | |
Notes about risk
Each fund is subject to various
risks as described in the fund’s prospectus. Political tensions and armed conflicts, including the Russian invasion of Ukraine, and any resulting economic sanctions on entities and/or individuals of a particular
country could lead such a country into an economic recession. The COVID-19 disease has resulted in significant disruptions to global business activity. A widespread health crisis such as a global pandemic could cause
substantial market volatility, exchange-trading suspensions, and closures, which may lead to less liquidity in certain instruments, industries, sectors, or the markets, generally, and may ultimately affect fund
performance. For more information, please refer to the “Principal risk” section of the prospectus. Current and future portfolio holdings are subject to change and risk. Investing involves risk, including
the potential loss of principal. There is no guarantee that a fund’s investment strategy will be successful and there can be no assurance that active trading markets for shares will develop or be maintained by
market makers or authorized participants.
| SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 5 |
Your expenses
These examples are intended to help
you understand your ongoing operating expenses of investing in the fund so you can compare these costs with the ongoing costs of investing in other funds.
Understanding fund expenses
As a shareholder of a fund, you
incur two types of costs:
■Transaction costs, which may include creation and redemption fees and brokerage charges.
■Ongoing operating expenses, including management fees, and other fund expenses.
We are presenting only your ongoing
operating expenses here.
Actual expenses/actual returns
The first line of each fund in the
following table is intended to provide information about a fund’s actual ongoing operating expenses, and is based on the fund’s actual NAV return. It assumes an account value of $1,000.00 on May 1, 2022,
with the same investment held until October 31, 2022.
Together with the value of your
account, you may use this information to estimate the operating expenses that you paid over the period. Simply divide your account value at October 31, 2022, by $1,000.00, then multiply it by the “expenses
paid” from the table. For example, for an account value of $8,600.00, the operating expenses should be calculated as follows:
Hypothetical example for comparison
purposes
The second line of each fund in the
following table allows you to compare a fund’s ongoing operating expenses with those of any other fund. It provides an example of the fund’s hypothetical account values and hypothetical expenses based on
the fund’s actual expense ratio and an assumed 5% annualized return before expenses (which is not the fund’s actual return). It assumes an account value of $1,000.00 on May 1, 2022, with the same
investment held until October 31, 2022. Look in any other fund shareholder report to find its hypothetical example and you will be able to compare these expenses. Please remember that these hypothetical account values
and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period.
Remember, these examples do not
include any transaction costs. A fund charges a transaction fee per creation unit to those creating or redeeming creation units, and those buying or selling shares in the secondary market will incur customary
brokerage commissions and charges. Therefore, these examples will not help you to determine the relative total costs of owning different funds. If transaction costs were included, your expenses would have been higher.
See the prospectus for details regarding transaction costs.
SHAREHOLDER EXPENSE EXAMPLE
CHART
| Account value on 5-1-2022 | Ending value on 10-31-2022 | Expenses paid during 10-31-20221 | Annualized expense ratio | |
| Corporate Bond ETF | ||||
| Actual expenses/actual returns | $1,000.00 | $919.70 | $1.40 | 0.29% |
| Hypothetical example for comparison purposes | 1,000.00 | 1,023.70 | 1.48 | 0.29% |
| Mortgage-Backed Securities ETF | ||||
| Actual expenses/actual returns | $1,000.00 | $930.50 | $1.90 | 0.39% |
| Hypothetical example for comparison purposes | 1,000.00 | 1,023.20 | 1.99 | 0.39% |
| Preferred Income ETF | ||||
| Actual expenses/actual returns | $1,000.00 | $954.80 | $2.66 | 0.54% |
| Hypothetical example for comparison purposes | 1,000.00 | 1,022.50 | 2.75 | 0.54% |
| U.S. High Dividend ETF | ||||
| Actual expenses/actual returns2 | $1,000.00 | $1,069.00 | $0.32 | 0.34% |
| Hypothetical example for comparison purposes | 1,000.00 | 1,004.50 | 0.33 | 0.34% |
| 6 | JOHN HANCOCK ETFS | SEMIANNUAL |
SHAREHOLDER EXPENSE EXAMPLE CHART (continued)
| 1 | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period). |
| 2 | The commencement of operations of the fund is 09-27-22. Actual Expenses are equal to the fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 33/ 365 (to reflect the period). |
| SEMIANNUAL | JOHN HANCOCK ETFS | 7 |
Funds’ investments
CORPORATE BOND ETF
As of 10-31-22 (unaudited)
| Rate (%) | Maturity date | Par value^ | Value | ||
| Corporate bonds 98.7% | $16,522,043 | ||||
| (Cost $20,520,894) | |||||
| Communication services 7.0% | 1,177,300 | ||||
| Diversified telecommunication services 1.9% | |||||
| AT&T, Inc. | 3.500 | 06-01-41 | 128,000 | 90,434 | |
| Verizon Communications, Inc. | 2.650 | 11-20-40 | 351,000 | 222,802 | |
| Entertainment 1.5% | |||||
| TWDC Enterprises 18 Corp. | 4.125 | 12-01-41 | 215,000 | 174,231 | |
| Warnermedia Holdings, Inc. (A) | 4.279 | 03-15-32 | 100,000 | 80,775 | |
| Media 3.6% | |||||
| Charter Communications Operating LLC | 3.500 | 06-01-41 | 446,000 | 281,745 | |
| Comcast Corp. | 3.750 | 04-01-40 | 425,000 | 327,313 | |
| Consumer discretionary 9.7% | 1,625,156 | ||||
| Automobiles 2.7% | |||||
| General Motors Financial Company, Inc. | 2.700 | 08-20-27 | 308,000 | 259,534 | |
| Hyundai Capital America (A) | 0.800 | 01-08-24 | 213,000 | 201,035 | |
| Hotels, restaurants and leisure 4.4% | |||||
| Booking Holdings, Inc. | 3.650 | 03-15-25 | 234,000 | 225,646 | |
| Expedia Group, Inc. | 3.250 | 02-15-30 | 319,000 | 257,088 | |
| Marriott International, Inc. | 4.625 | 06-15-30 | 276,000 | 247,587 | |
| Internet and direct marketing retail 1.7% | |||||
| Amazon.com, Inc. | 2.500 | 06-03-50 | 468,000 | 277,951 | |
| Specialty retail 0.9% | |||||
| The Home Depot, Inc. | 3.625 | 04-15-52 | 216,000 | 156,315 | |
| Consumer staples 1.7% | 290,882 | ||||
| Beverages 0.5% | |||||
| Anheuser-Busch InBev Worldwide, Inc. | 4.600 | 04-15-48 | 113,000 | 93,155 | |
| Food products 1.2% | |||||
| Kraft Heinz Foods Company | 3.875 | 05-15-27 | 115,000 | 107,750 | |
| Kraft Heinz Foods Company | 5.200 | 07-15-45 | 103,000 | 89,977 | |
| Energy 10.6% | 1,775,728 | ||||
| Oil, gas and consumable fuels 10.6% | |||||
| Aker BP ASA (A) | 3.750 | 01-15-30 | 319,000 | 271,310 | |
| Cenovus Energy, Inc. | 5.400 | 06-15-47 | 213,000 | 181,477 | |
| Enbridge, Inc. (5.750% to 4-15-30, then 5 Year CMT + 5.314%) | 5.750 | 07-15-80 | 298,000 | 263,316 | |
| Energy Transfer LP | 5.250 | 04-15-29 | 213,000 | 199,607 | |
| Kinder Morgan, Inc. | 3.600 | 02-15-51 | 93,000 | 60,193 | |
| MPLX LP | 4.500 | 04-15-38 | 213,000 | 169,805 | |
| Sabine Pass Liquefaction LLC | 5.750 | 05-15-24 | 287,000 | 286,673 | |
| Targa Resources Partners LP | 4.875 | 02-01-31 | 200,000 | 176,462 | |
| The Williams Companies, Inc. | 2.600 | 03-15-31 | 213,000 | 166,885 | |
| Financials 33.4% | 5,586,801 | ||||
| Banks 22.3% | |||||
| Bank of America Corp. (2.592% to 4-29-30, then SOFR + 2.150%) | 2.592 | 04-29-31 | 521,000 | 411,351 | |
| Bank of America Corp. (2.972% to 7-21-51, then SOFR + 1.560%) | 2.972 | 07-21-52 | 175,000 | 103,976 | |
| Barclays PLC | 4.375 | 01-12-26 | 425,000 | 394,552 | |
| Citigroup, Inc. (2.976% to 11-5-29, then SOFR + 1.422%) | 2.976 | 11-05-30 | 425,000 | 346,700 | |
| Citizens Financial Group, Inc. | 3.250 | 04-30-30 | 425,000 | 348,890 | |
| Credit Agricole SA (A) | 3.250 | 01-14-30 | 266,000 | 203,588 | |
| JPMorgan Chase & Co. (2.739% to 10-15-29, then SOFR + 1.510%) | 2.739 | 10-15-30 | 468,000 | 377,572 | |
| JPMorgan Chase & Co. (3.157% to 4-22-41, then SOFR + 1.460%) | 3.157 | 04-22-42 | 225,000 | 153,756 | |
| Lloyds Banking Group PLC | 4.450 | 05-08-25 | 425,000 | 407,339 | |
| 8 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
| Rate (%) | Maturity date | Par value^ | Value | ||
| Financials (continued) | |||||
| Banks (continued) | |||||
| Santander Holdings USA, Inc. | 4.400 | 07-13-27 | 425,000 | $384,072 | |
| U.S. Bancorp (5.727% to 10-21-25, then SOFR + 1.430%) | 5.727 | 10-21-26 | 250,000 | 250,693 | |
| Wells Fargo & Company (2.879% to 10-30-29, then 3 month CME Term SOFR + 1.432%) | 2.879 | 10-30-30 | 425,000 | 348,697 | |
| Capital markets 9.1% | |||||
| Ares Capital Corp. | 3.875 | 01-15-26 | 213,000 | 190,963 | |
| Blackstone Private Credit Fund | 2.350 | 11-22-24 | 228,000 | 208,574 | |
| Deutsche Bank AG (2.311% to 11-16-26, then SOFR + 1.219%) | 2.311 | 11-16-27 | 213,000 | 170,017 | |
| Morgan Stanley (4.431% to 1-23-29, then 3 month LIBOR + 1.628%) | 4.431 | 01-23-30 | 374,000 | 341,276 | |
| The Bank of New York Mellon Corp. (4.414% to 7-24-25, then SOFR + 1.345%) | 4.414 | 07-24-26 | 257,000 | 249,616 | |
| The Goldman Sachs Group, Inc. (1.431% to 3-9-26, then SOFR + 0.798%) | 1.431 | 03-09-27 | 425,000 | 363,596 | |
| Insurance 2.0% | |||||
| Prudential Financial, Inc. (3.700% to 7-1-30, then 5 Year CMT + 3.035%) | 3.700 | 10-01-50 | 213,000 | 165,567 | |
| Teachers Insurance & Annuity Association of America (A) | 4.270 | 05-15-47 | 213,000 | 166,006 | |
| Health care 7.9% | 1,326,011 | ||||
| Biotechnology 0.9% | |||||
| AbbVie, Inc. | 4.250 | 11-21-49 | 186,000 | 144,300 | |
| Health care providers and services 4.9% | |||||
| AmerisourceBergen Corp. | 3.450 | 12-15-27 | 213,000 | 194,196 | |
| CVS Health Corp. | 4.300 | 03-25-28 | 129,000 | 121,044 | |
| HCA, Inc. | 4.125 | 06-15-29 | 213,000 | 187,953 | |
| UnitedHealth Group, Inc. | 3.500 | 08-15-39 | 205,000 | 157,492 | |
| Universal Health Services, Inc. (A) | 2.650 | 10-15-30 | 213,000 | 159,347 | |
| Pharmaceuticals 2.1% | |||||
| Eli Lilly & Company | 2.250 | 05-15-50 | 105,000 | 62,646 | |
| Royalty Pharma PLC | 1.750 | 09-02-27 | 213,000 | 175,555 | |
| Viatris, Inc. | 4.000 | 06-22-50 | 213,000 | 123,478 | |
| Industrials 5.1% | 844,817 | ||||
| Aerospace and defense 0.9% | |||||
| The Boeing Company | 3.750 | 02-01-50 | 223,000 | 142,683 | |
| Airlines 2.3% | |||||
| Delta Air Lines, Inc. (A) | 4.750 | 10-20-28 | 213,000 | 198,151 | |
| United Airlines 2020-1 Class A Pass Through Trust | 5.875 | 10-15-27 | 187,321 | 180,371 | |
| Trading companies and distributors 1.9% | |||||
| AerCap Ireland Capital DAC | 2.450 | 10-29-26 | 159,000 | 134,267 | |
| Air Lease Corp. | 2.875 | 01-15-26 | 213,000 | 189,345 | |
| Information technology 11.0% | 1,838,626 | ||||
| Communications equipment 0.6% | |||||
| Motorola Solutions, Inc. | 2.300 | 11-15-30 | 133,000 | 99,510 | |
| IT services 0.9% | |||||
| Visa, Inc. | 2.700 | 04-15-40 | 213,000 | 151,163 | |
| Semiconductors and semiconductor equipment 4.0% | |||||
| Broadcom Corp. | 3.625 | 01-15-24 | 207,000 | 202,730 | |
| Micron Technology, Inc. | 4.185 | 02-15-27 | 213,000 | 197,596 | |
| NVIDIA Corp. | 2.850 | 04-01-30 | 319,000 | 271,426 | |
| Software 3.1% | |||||
| Microsoft Corp. | 2.525 | 06-01-50 | 457,000 | 286,689 | |
| Oracle Corp. | 2.300 | 03-25-28 | 117,000 | 97,872 | |
| Oracle Corp. | 3.950 | 03-25-51 | 202,000 | 132,151 | |
| Technology hardware, storage and peripherals 2.4% | |||||
| Apple, Inc. | 2.700 | 08-05-51 | 425,000 | 267,058 | |
| Dell International LLC (A) | 3.450 | 12-15-51 | 159,000 | 89,968 | |
| Dell International LLC | 8.350 | 07-15-46 | 40,000 | 42,463 | |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 9 |
| Rate (%) | Maturity date | Par value^ | Value | ||
| Materials 3.1% | $518,300 | ||||
| Chemicals 1.0% | |||||
| Braskem Netherlands Finance BV (A) | 4.500 | 01-31-30 | 200,000 | 162,284 | |
| Construction materials 1.1% | |||||
| Vulcan Materials Company | 3.500 | 06-01-30 | 213,000 | 181,036 | |
| Metals and mining 1.0% | |||||
| Freeport-McMoRan, Inc. | 5.450 | 03-15-43 | 213,000 | 174,980 | |
| Real estate 3.8% | 627,232 | ||||
| Equity real estate investment trusts 3.8% | |||||
| Equinix, Inc. | 1.550 | 03-15-28 | 213,000 | 169,878 | |
| GLP Capital LP | 5.375 | 04-15-26 | 213,000 | 203,321 | |
| Host Hotels & Resorts LP | 3.375 | 12-15-29 | 319,000 | 254,033 | |
| Utilities 5.4% | 911,190 | ||||
| Electric utilities 4.2% | |||||
| NextEra Energy Capital Holdings, Inc. | 2.750 | 11-01-29 | 266,000 | 222,875 | |
| NRG Energy, Inc. (A) | 4.450 | 06-15-29 | 287,000 | 253,574 | |
| Vistra Operations Company LLC (A) | 4.300 | 07-15-29 | 266,000 | 232,055 | |
| Multi-utilities 1.2% | |||||
| CenterPoint Energy Resources Corp. | 1.750 | 10-01-30 | 266,000 | 202,686 | |
| Yield (%) | Shares | Value | |||
| Short-term investments 0.4% | $67,270 | ||||
| (Cost $67,269) | |||||
| Short-term funds 0.4% | 67,270 | ||||
| John Hancock Collateral Trust (B) | 3.1986(C) | 6,727 | 67,217 | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class | 2.9329(C) | 53 | 53 | ||
| Total investments (Cost $20,588,163) 99.1% | $16,589,313 | ||||
| Other assets and liabilities, net 0.9% | 152,675 | ||||
| Total net assets 100.0% | $16,741,988 | ||||
| The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund. | |
| ^All par values are denominated in U.S. dollars unless otherwise indicated. | |
| Security Abbreviations and Legend | |
| CME | Chicago Mercantile Exchange |
| CMT | Constant Maturity Treasury |
| LIBOR | London Interbank Offered Rate |
| SOFR | Secured Overnight Financing Rate |
| (A) | These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. Rule 144A securities amounted to $2,018,093 or 12.1% of the fund’s net assets as of 10-31-22. |
| (B) | Investment is an affiliate of the fund, the advisor and/or subadvisor. |
| (C) | The rate shown is the annualized seven-day yield as of 10-31-22. |
MORTGAGE-BACKED SECURITIES ETF
As of 10-31-22 (unaudited)
| Rate (%) | Maturity date | Par value^ | Value | ||
| U.S. Government and Agency obligations 43.9% | $10,221,702 | ||||
| (Cost $12,419,903) | |||||
| U.S. Government 0.7% | 166,344 | ||||
| U.S. Treasury | |||||
| Bond | 3.000 | 08-15-52 | 100,000 | 80,078 | |
| Bond | 3.375 | 08-15-42 | 100,000 | 86,266 | |
| U.S. Government Agency 43.2% | 10,055,358 | ||||
| Federal Home Loan Mortgage Corp. | |||||
| 30 Yr Pass Thru | 2.500 | 09-01-51 | 182,398 | 150,698 | |
| 30 Yr Pass Thru | 2.500 | 01-01-52 | 267,235 | 220,791 | |
| 30 Yr Pass Thru | 3.000 | 05-01-51 | 281,263 | 242,715 | |
| 10 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
| Rate (%) | Maturity date | Par value^ | Value | ||
| U.S. Government Agency (continued) | |||||
| 30 Yr Pass Thru | 3.000 | 06-01-51 | 249,920 | $213,364 | |
| 30 Yr Pass Thru | 3.000 | 02-01-52 | 305,370 | 260,107 | |
| 30 Yr Pass Thru | 3.500 | 09-01-47 | 362,197 | 324,857 | |
| Federal National Mortgage Association | |||||
| 30 Yr Pass Thru | 2.000 | 07-01-51 | 299,081 | 237,556 | |
| 30 Yr Pass Thru | 2.000 | 08-01-51 | 545,479 | 434,120 | |
| 30 Yr Pass Thru | 2.000 | 08-01-51 | 398,246 | 315,451 | |
| 30 Yr Pass Thru | 2.000 | 09-01-51 | 565,101 | 449,383 | |
| 30 Yr Pass Thru | 2.500 | 04-01-51 | 264,438 | 217,158 | |
| 30 Yr Pass Thru | 2.500 | 07-01-51 | 307,801 | 254,788 | |
| 30 Yr Pass Thru | 2.500 | 08-01-51 | 525,431 | 433,622 | |
| 30 Yr Pass Thru | 2.500 | 08-01-51 | 571,093 | 471,841 | |
| 30 Yr Pass Thru | 2.500 | 08-01-51 | 314,749 | 259,851 | |
| 30 Yr Pass Thru | 2.500 | 08-01-51 | 447,110 | 369,405 | |
| 30 Yr Pass Thru | 2.500 | 09-01-51 | 456,981 | 377,275 | |
| 30 Yr Pass Thru | 2.500 | 12-01-51 | 271,511 | 223,900 | |
| 30 Yr Pass Thru | 2.500 | 01-01-52 | 271,347 | 223,425 | |
| 30 Yr Pass Thru | 2.500 | 03-01-52 | 565,061 | 466,327 | |
| 30 Yr Pass Thru | 3.000 | 11-01-46 | 374,947 | 326,783 | |
| 30 Yr Pass Thru | 3.000 | 11-01-46 | 216,610 | 188,785 | |
| 30 Yr Pass Thru | 3.000 | 04-01-47 | 220,543 | 191,799 | |
| 30 Yr Pass Thru | 3.000 | 05-01-50 | 240,796 | 208,209 | |
| 30 Yr Pass Thru | 3.000 | 11-01-50 | 261,840 | 226,854 | |
| 30 Yr Pass Thru | 3.000 | 07-01-51 | 234,562 | 200,839 | |
| 30 Yr Pass Thru | 3.000 | 08-01-51 | 516,470 | 442,863 | |
| 30 Yr Pass Thru | 3.000 | 02-01-52 | 299,357 | 255,500 | |
| 30 Yr Pass Thru | 3.500 | 12-01-46 | 169,992 | 153,317 | |
| 30 Yr Pass Thru | 3.500 | 02-01-47 | 198,635 | 178,343 | |
| 30 Yr Pass Thru | 3.500 | 02-01-48 | 261,888 | 234,971 | |
| 30 Yr Pass Thru | 3.500 | 11-01-48 | 229,378 | 205,981 | |
| 30 Yr Pass Thru | 3.500 | 04-01-50 | 229,725 | 206,275 | |
| 30 Yr Pass Thru | 3.500 | 04-01-51 | 219,232 | 196,031 | |
| 30 Yr Pass Thru | 3.500 | 03-01-52 | 145,128 | 128,795 | |
| 30 Yr Pass Thru | 4.000 | 04-01-47 | 118,211 | 109,580 | |
| 30 Yr Pass Thru | 4.000 | 03-01-48 | 133,092 | 123,208 | |
| 30 Yr Pass Thru | 4.000 | 06-01-49 | 115,091 | 106,616 | |
| 30 Yr Pass Thru | 4.000 | 06-01-49 | 119,981 | 111,258 | |
| 30 Yr Pass Thru | 4.000 | 04-01-50 | 121,852 | 112,717 | |
| Collateralized mortgage obligations 37.2% | $8,676,789 | ||||
| (Cost $10,118,534) | |||||
| Commercial and residential 21.5% | 5,013,495 | ||||
| Angel Oak Mortgage Trust LLC | |||||
| Series 2020-3, Class A2 (A)(B) | 2.410 | 04-25-65 | 116,825 | 105,306 | |
| Series 2021-2, Class A3 (A)(B) | 1.447 | 04-25-66 | 166,178 | 127,086 | |
| Bellemeade RE, Ltd. | |||||
| Series 2021-3A, Class M2 (1 month SOFR + 3.150%) (A)(C) | 6.147 | 09-25-31 | 200,000 | 171,686 | |
| BRAVO Residential Funding Trust | |||||
| Series 2021-NQM1, Class M1 (A)(B) | 2.316 | 02-25-49 | 100,000 | 88,629 | |
| Bunker Hill Loan Depositary Trust | |||||
| Series 2019-3, Class M1 (A) | 3.269 | 11-25-59 | 100,000 | 95,526 | |
| BX Commercial Mortgage Trust | |||||
| Series 2021-MC, Class E (1 month LIBOR + 2.100%) (A)(C) | 5.512 | 04-15-34 | 100,000 | 90,248 | |
| Series 2021-VOLT, Class F (1 month LIBOR + 2.400%) (A)(C) | 5.812 | 09-15-36 | 200,000 | 182,050 | |
| CAMB Commercial Mortgage Trust | |||||
| Series 2019-LIFE, Class F (1 month LIBOR + 2.550%) (A)(C) | 5.962 | 12-15-37 | 200,000 | 186,311 | |
| COLT Mortgage Loan Trust | |||||
| Series 2021-1, Class A1 (A)(B) | 0.910 | 06-25-66 | 204,256 | 160,278 | |
| Series 2021-4, Class A1 (A)(B) | 1.397 | 10-25-66 | 173,194 | 136,284 | |
| Series 2021-4, Class B1 (A)(B) | 3.764 | 10-25-66 | 200,000 | 124,962 | |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 11 |
| Rate (%) | Maturity date | Par value^ | Value | ||
| Commercial and residential (continued) | |||||
| Series 2021-HX1, Class B1 (A)(B) | 3.110 | 10-25-66 | 100,000 | $65,201 | |
| DBGS Mortgage Trust | |||||
| Series 2018-BIOD, Class D (1 month LIBOR + 1.300%) (A)(C) | 4.614 | 05-15-35 | 91,376 | 87,258 | |
| Eagle RE, Ltd. | |||||
| Series 2021-2, Class M1B (1 month SOFR + 2.050%) (A)(C) | 5.047 | 04-25-34 | 200,000 | 194,707 | |
| FREMF Mortgage Trust | |||||
| Series 2016-K56, Class B (A)(B) | 3.944 | 06-25-49 | 200,000 | 186,656 | |
| Series 2018-K730, Class B (A)(B) | 3.795 | 02-25-50 | 200,000 | 190,660 | |
| Imperial Fund Mortgage Trust | |||||
| Series 2021-NQM2, Class M1 (A)(B) | 2.489 | 09-25-56 | 200,000 | 114,923 | |
| Series 2022-NQM5, Class A3 (6.250% to 7-1-26, then 7.250% thereafter) (A) | 6.250 | 08-25-67 | 97,965 | 91,973 | |
| KNDL Mortgage Trust | |||||
| Series 2019-KNSQ, Class E (1 month LIBOR + 1.800%) (A)(C) | 5.212 | 05-15-36 | 275,000 | 265,376 | |
| Life Mortgage Trust | |||||
| Series 2021-BMR, Class F (1 month LIBOR + 2.350%) (A)(C) | 5.762 | 03-15-38 | 201,509 | 187,381 | |
| MFA Trust | |||||
| Series 2020-NQM3, Class M1 (A)(B) | 2.654 | 01-26-65 | 100,000 | 85,855 | |
| New Residential Mortgage Loan Trust | |||||
| Series 2019-4A, Class A1B (A)(B) | 3.500 | 12-25-58 | 81,614 | 73,403 | |
| Oaktown RE VII, Ltd. | |||||
| Series 2021-2, Class M1B (1 month SOFR + 2.900%) (A)(C) | 5.897 | 04-25-34 | 200,000 | 186,751 | |
| OBX Trust | |||||
| Series 2022-NQM1, Class A1 (A)(B) | 2.305 | 11-25-61 | 134,193 | 106,774 | |
| PKHL Commercial Mortgage Trust | |||||
| Series 2021-MF, Class F (1 month LIBOR + 3.350%) (A)(C) | 6.763 | 07-15-38 | 300,000 | 279,583 | |
| Ready Capital Mortgage Trust | |||||
| Series 2019-5, Class E (A)(B) | 5.413 | 02-25-52 | 250,000 | 196,116 | |
| Towd Point Mortgage Trust | |||||
| Series 2019-4, Class B1B (A)(B) | 3.500 | 10-25-59 | 315,000 | 202,138 | |
| Triangle RE, Ltd. | |||||
| Series 2021-3, Class M1B (1 month SOFR + 2.900%) (A)(C) | 5.897 | 02-25-34 | 200,000 | 191,072 | |
| TRK Trust | |||||
| Series 2021-INV1, Class A1 (A)(B) | 1.153 | 07-25-56 | 156,269 | 129,567 | |
| Verus Securitization Trust | |||||
| Series 2019-4, Class A1 (2.642% to 10-25-23, then 3.642% thereafter) (A) | 2.642 | 11-25-59 | 72,295 | 68,646 | |
| Series 2020-5, Class A1 (1.218% to 10-1-24, then 2.218% thereafter) (A) | 1.218 | 05-25-65 | 113,249 | 102,413 | |
| Series 2020-INV1, Class A2 (A)(B) | 3.035 | 03-25-60 | 170,000 | 161,135 | |
| Series 2021-1, Class A2 (A)(B) | 1.052 | 01-25-66 | 106,295 | 82,406 | |
| Series 2021-3, Class A1 (A)(B) | 1.046 | 06-25-66 | 107,388 | 83,591 | |
| Series 2021-3, Class A3 (A)(B) | 1.437 | 06-25-66 | 89,491 | 68,915 | |
| Series 2022-4, Class A1 (4.474% to 4-1-26, then 5.474% thereafter) (A) | 4.474 | 04-25-67 | 89,591 | 83,850 | |
| Visio Trust | |||||
| Series 2019-2, Class A1 (A)(B) | 2.722 | 11-25-54 | 65,147 | 58,779 | |
| U.S. Government Agency 15.7% | 3,663,294 | ||||
| Federal Home Loan Mortgage Corp. | |||||
| Series 2016-SC01, Class M2 (B) | 3.906 | 07-25-46 | 99,470 | 96,121 | |
| Series 2019-HQA2, Class B1 (1 month LIBOR + 4.100%) (A)(C) | 7.686 | 04-25-49 | 200,000 | 193,173 | |
| Series 2021-HQA2, Class M2 (1 month SOFR + 2.050%) (A)(C) | 5.047 | 12-25-33 | 300,000 | 264,234 | |
| Series 5150, Class IS IO | 1.500 | 08-25-51 | 1,741,000 | 153,574 | |
| Series 5250, Class AY | 2.000 | 01-25-55 | 449,999 | 291,708 | |
| Series K109, Class X1 IO | 1.583 | 04-25-30 | 1,990,769 | 174,009 | |
| Series K116, Class X1 IO | 1.425 | 07-25-30 | 2,739,454 | 221,103 | |
| Series K118, Class X1 IO | 0.959 | 09-25-30 | 3,187,105 | 180,583 | |
| Series X2FX, Class X1 IO | 0.632 | 09-25-25 | 15,999,708 | 150,880 | |
| Federal National Mortgage Association | |||||
| Series 2019-R01, Class 2B1 (1 month LIBOR + 4.350%) (A)(C) | 7.936 | 07-25-31 | 200,000 | 196,045 | |
| Series 2021-R01, Class 1B1 (1 month SOFR + 3.100%) (A)(C) | 6.097 | 10-25-41 | 200,000 | 180,655 | |
| Series 2022-22, Class B | 2.000 | 07-25-54 | 400,000 | 239,840 | |
| Government National Mortgage Association | |||||
| Series 2014-103, Class DA (B) | 3.250 | 09-16-54 | 103,990 | 99,238 | |
| Series 2014-135, Class IO | 0.421 | 01-16-56 | 15,140,206 | 280,004 | |
| Series 2016-26, Class IO | 0.675 | 02-16-58 | 5,271,687 | 135,883 | |
| 12 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
| Rate (%) | Maturity date | Par value^ | Value | ||
| U.S. Government Agency (continued) | |||||
| Series 2017-159, Class IO | 0.434 | 06-16-59 | 3,971,192 | $135,520 | |
| Series 2018-23, Class IO | 0.562 | 11-16-59 | 2,059,264 | 88,066 | |
| Series 2021-153, Class IA IO | 0.100 | 08-16-61 | 19,553,936 | 103,135 | |
| Series 2021-178, Class IA IO | 0.100 | 10-16-61 | 39,260,689 | 207,206 | |
| Series 2021-62, Class IA IO | 0.100 | 02-16-63 | 19,177,118 | 101,854 | |
| Series 2022-141, Class BC | 2.100 | 06-01-64 | 265,000 | 170,463 | |
| Asset backed securities 17.4% | $4,060,374 | ||||
| (Cost $4,534,418) | |||||
| Asset backed securities 17.4% | 4,060,374 | ||||
| AMSR Trust | |||||
| Series 2020-SFR1, Class C (A) | 2.419 | 04-17-37 | 150,000 | 135,682 | |
| Series 2020-SFR4, Class D (A) | 2.006 | 11-17-37 | 314,000 | 275,577 | |
| Apex Credit CLO, Ltd. | |||||
| Series 2019-2A, Class D (3 month LIBOR + 4.050%) (A)(C) | 8.408 | 10-25-32 | 150,000 | 128,226 | |
| Barings CLO, Ltd. | |||||
| Series 2013-IA, Class DR (3 month LIBOR + 2.550%) (A)(C) | 6.793 | 01-20-28 | 250,000 | 233,765 | |
| CLI Funding VIII LLC | |||||
| Series 2021-1A, Class A (A) | 1.640 | 02-18-46 | 145,371 | 123,312 | |
| Columbia Cent CLO XXVIII, Ltd. | |||||
| Series 2018-28A, Class BR (3 month LIBOR + 2.150%) (A)(C) | 5.013 | 11-07-30 | 350,000 | 321,137 | |
| Diamond Infrastructure Funding LLC | |||||
| Series 2021-1A, Class C (A) | 3.475 | 04-15-49 | 200,000 | 154,200 | |
| Driven Brands Funding LLC | |||||
| Series 2019-1A, Class A2 (A) | 4.641 | 04-20-49 | 202,125 | 179,532 | |
| Elara HGV Timeshare Issuer LLC | |||||
| Series 2021-A, Class D (A) | 3.320 | 08-27-35 | 153,561 | 134,162 | |
| FirstKey Homes Trust | |||||
| Series 2021-SFR2, Class E1 (A) | 2.258 | 09-17-38 | 200,000 | 163,201 | |
| Hertz Vehicle Financing LLC | |||||
| Series 2022-2A, Class A (A) | 2.330 | 06-26-28 | 200,000 | 170,669 | |
| LCM XV LP | |||||
| Series 15A, Class DR (3 month LIBOR + 3.700%) (A)(C) | 7.943 | 07-20-30 | 250,000 | 212,377 | |
| Madison Park Funding XLI, Ltd. | |||||
| Series 12A, Class DR (3 month LIBOR + 2.800%) (A)(C) | 7.125 | 04-22-27 | 250,000 | 226,236 | |
| Progress Residential Trust | |||||
| Series 2020-SFR1, Class C (A) | 2.183 | 04-17-37 | 300,000 | 269,477 | |
| Series 2021-SFR3, Class E2 (A) | 2.688 | 05-17-26 | 100,000 | 83,181 | |
| Series 2021-SFR4, Class A (A) | 1.558 | 05-17-38 | 200,000 | 173,478 | |
| Series 2021-SFR4, Class E1 (A) | 2.409 | 05-17-38 | 150,000 | 124,514 | |
| Series 2021-SFR5, Class E2 (A) | 2.359 | 07-17-38 | 225,000 | 183,479 | |
| Store Master Funding I-VII & XIV | |||||
| Series 2019-1, Class A2 (A) | 3.650 | 11-20-49 | 190,850 | 154,959 | |
| Taco Bell Funding LLC | |||||
| Series 2021-1A, Class A2I (A) | 1.946 | 08-25-51 | 198,500 | 164,723 | |
| TIF Funding II LLC | |||||
| Series 2021-1A, Class A (A) | 1.650 | 02-20-46 | 129,656 | 106,497 | |
| Tricon Residential Trust | |||||
| Series 2021-SFR1, Class G (A) | 4.133 | 07-17-38 | 100,000 | 81,743 | |
| Vantage Data Centers Issuer LLC | |||||
| Series 2021-1A, Class A2 (A) | 2.165 | 10-15-46 | 125,000 | 107,817 | |
| Voya CLO, Ltd. | |||||
| Series 2018-2A, Class E (3 month LIBOR + 5.250%) (A)(C) | 9.329 | 07-15-31 | 200,000 | 152,430 | |
| Yield (%) | Shares | Value | |||
| Short-term investments 1.0% | $227,370 | ||||
| (Cost $227,368) | |||||
| Short-term funds 1.0% | 227,370 | ||||
| John Hancock Collateral Trust (D) | 3.1986(E) | 22,745 | 227,241 | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class | 2.9329(E) | 129 | 129 | ||
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 13 |
| Total investments (Cost $27,300,223) 99.5% | $23,186,235 | ||||
| Other assets and liabilities, net 0.5% | 126,930 | ||||
| Total net assets 100.0% | $23,313,165 | ||||
| The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund. | |
| ^All par values are denominated in U.S. dollars unless otherwise indicated. | |
| Security Abbreviations and Legend | |
| IO | Interest-Only Security - (Interest Tranche of Stripped Mortgage Pool). Rate shown is the annualized yield at the end of the period. |
| LIBOR | London Interbank Offered Rate |
| SOFR | Secured Overnight Financing Rate |
| (A) | These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. Rule 144A securities amounted to $9,907,976 or 42.5% of the fund’s net assets as of 10-31-22. |
| (B) | Variable or floating rate security, the interest rate of which adjusts periodically based on a weighted average of interest rates and prepayments on the underlying pool of assets. The interest rate shown is the current rate as of period end. |
| (C) | Variable rate obligation. The coupon rate shown represents the rate at period end. |
| (D) | Investment is an affiliate of the fund, the advisor and/or subadvisor. |
| (E) | The rate shown is the annualized seven-day yield as of 10-31-22. |
DERIVATIVES
FUTURES
| Open contracts | Number of contracts | Position | Expiration date | Notional basis^ | Notional value^ | Unrealized appreciation (depreciation) |
| U.S. Treasury Long Bond Futures | 8 | Long | Dec 2022 | $1,023,793 | $964,000 | $(59,793) |
| $(59,793) |
^ Notional basis refers to the
contractual amount agreed upon at inception of open contracts; notional value represents the current value of the open contract.
See Notes to financial statements
regarding investment transactions and other derivatives information.
PREFERRED INCOME ETF
As of 10-31-22 (unaudited)
| Shares | Value | ||||
| Preferred securities 52.8% | $12,009,068 | ||||
| (Cost $13,330,492) | |||||
| Communication services 4.5% | 1,019,982 | ||||
| Diversified telecommunication services 1.0% | |||||
| Qwest Corp., 6.500% | 14,000 | 240,100 | |||
| Media 0.3% | |||||
| Paramount Global, 5.750% | 2,100 | 61,005 | |||
| Wireless telecommunication services 3.2% | |||||
| Telephone & Data Systems, Inc., 6.000% | 10,163 | 179,885 | |||
| Telephone & Data Systems, Inc., 6.625% | 8,747 | 175,727 | |||
| U.S. Cellular Corp., 5.500% | 4,904 | 83,711 | |||
| U.S. Cellular Corp., 5.500% | 4,992 | 85,363 | |||
| U.S. Cellular Corp., 6.250% | 9,979 | 194,191 | |||
| Consumer discretionary 0.9% | 196,948 | ||||
| Internet and direct marketing retail 0.9% | |||||
| Qurate Retail, Inc., 8.000% | 3,086 | 148,807 | |||
| QVC, Inc., 6.250% | 3,084 | 48,141 | |||
| Energy 1.5% | 344,773 | ||||
| Oil, gas and consumable fuels 1.5% | |||||
| Enbridge, Inc., 6.375% (6.375% to 4-15-23, then 3 month LIBOR + 3.593%) | 7,500 | 178,125 | |||
| NuStar Logistics LP, 10.813% (3 month LIBOR + 6.734%) (A) | 6,690 | 166,648 | |||
| Financials 25.9% | 5,897,839 | ||||
| Banks 13.7% | |||||
| Bank of America Corp., 6.450% (6.450% to 11-28-22, then 3 month LIBOR + 1.327%) | 4,820 | 122,428 | |||
| Bank of America Corp., 7.250% | 245 | 284,313 | |||
| Citigroup Capital XIII, 10.785% (3 month LIBOR + 6.370%) (A) | 13,884 | 381,116 | |||
| 14 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
| Shares | Value | ||||
| Financials (continued) | |||||
| Banks (continued) | |||||
| Citigroup, Inc., 7.125% (7.125% to 9-30-23, then 3 month LIBOR + 4.040%) | 11,335 | $282,922 | |||
| Fifth Third Bancorp, 6.000% | 8,218 | 179,481 | |||
| First Republic Bank, 4.125% | 7,560 | 116,651 | |||
| First Republic Bank, 4.250% | 17,184 | 272,882 | |||
| Fulton Financial Corp., 5.125% | 4,911 | 98,613 | |||
| PacWest Bancorp, 7.750% (7.750% to 9-1-27, then 5 Year CMT + 4.820%) | 9,480 | 235,294 | |||
| Pinnacle Financial Partners, Inc., 6.750% | 6,257 | 152,358 | |||
| Synovus Financial Corp., 6.300% (6.300% to 6-21-23, then 3 month LIBOR + 3.352%) | 6,705 | 156,897 | |||
| The PNC Financial Services Group, Inc., 6.850% (3 month LIBOR + 4.068%) (A) | 4,794 | 122,007 | |||
| Wells Fargo & Company, 4.750% | 18,557 | 334,026 | |||
| Wells Fargo & Company, 6.625% (6.625% to 3-15-24, then 3 month LIBOR + 3.690%) | 11,517 | 288,040 | |||
| WesBanco, Inc., 6.750% (6.750% to 11-15-25, then 5 Year CMT + 6.557%) | 3,942 | 98,787 | |||
| Capital markets 4.9% | |||||
| Brookfield Finance, Inc., 4.625% | 4,331 | 72,674 | |||
| Morgan Stanley, 6.375% (6.375% to 10-15-24, then 3 month LIBOR + 3.708%) | 8,243 | 200,222 | |||
| Morgan Stanley, 6.500% | 8,630 | 214,024 | |||
| Morgan Stanley, 6.875% (6.875% to 1-15-24, then 3 month LIBOR + 3.940%) | 3,463 | 86,644 | |||
| Morgan Stanley, 7.125% (7.125% to 10-15-23, then 3 month LIBOR + 4.320%) | 21,299 | 533,535 | |||
| Consumer finance 0.5% | |||||
| Navient Corp., 6.000% | 6,472 | 119,344 | |||
| Insurance 6.8% | |||||
| American Equity Investment Life Holding Company, 6.625% (6.625% to 9-1-25, then 5 Year CMT + 6.297%) | 5,637 | 130,553 | |||
| American Financial Group, Inc., 5.125% | 5,301 | 105,278 | |||
| American International Group, Inc., 5.850% | 10,483 | 230,626 | |||
| Athene Holding, Ltd., Series A, 6.350% (6.350% to 6-30-29, then 3 month LIBOR + 4.253%) | 11,366 | 270,624 | |||
| Brighthouse Financial, Inc., 6.600% | 11,780 | 264,932 | |||
| Reinsurance Group of America, Inc., 7.125% (7.125% to 10-15-27, then 5 Year CMT + 3.456%) | 11,842 | 299,070 | |||
| RenaissanceRe Holdings, Ltd., 4.200% | 7,584 | 126,425 | |||
| Unum Group, 6.250% | 5,250 | 118,073 | |||
| Health care 1.1% | 255,885 | ||||
| Health care equipment and supplies 1.1% | |||||
| Becton, Dickinson and Company, 6.000% | 5,250 | 255,885 | |||
| Industrials 0.7% | 160,245 | ||||
| Trading companies and distributors 0.7% | |||||
| WESCO International, Inc., 10.625% (10.625% to 6-22-25, then 5 Year CMT + 10.325%) | 5,935 | 160,245 | |||
| Real estate 0.8% | 183,473 | ||||
| Equity real estate investment trusts 0.8% | |||||
| Pebblebrook Hotel Trust, 6.375% | 7,023 | 128,100 | |||
| Vornado Realty Trust, 5.400% | 3,360 | 55,373 | |||
| Utilities 17.4% | 3,949,923 | ||||
| Electric utilities 3.4% | |||||
| Duke Energy Corp., 5.750% | 8,666 | 204,778 | |||
| NextEra Energy, Inc., 5.279% | 4,571 | 225,990 | |||
| NextEra Energy, Inc., 6.219% | 2,500 | 120,625 | |||
| NextEra Energy, Inc., 6.926% | 3,812 | 177,258 | |||
| SCE Trust III, 5.750% (5.750% to 3-15-24, then 3 month LIBOR + 2.990%) | 2,771 | 53,591 | |||
| Gas utilities 1.6% | |||||
| South Jersey Industries, Inc., 5.625% | 6,771 | 118,560 | |||
| Spire, Inc., 7.500% | 1,213 | 61,572 | |||
| UGI Corp., 7.250% | 2,166 | 183,850 | |||
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 15 |
| Shares | Value | ||||
| Utilities (continued) | |||||
| Independent power and renewable electricity producers 2.3% | |||||
| The AES Corp., 6.875% | 5,250 | $517,178 | |||
| Multi-utilities 10.1% | |||||
| Algonquin Power & Utilities Corp., 6.200% (6.200% to 7-1-24, then 3 month LIBOR + 4.010%) | 12,235 | 277,367 | |||
| Algonquin Power & Utilities Corp., 6.875% (6.875% to 10-17-23, then 3 month LIBOR + 3.677%) | 18,430 | 413,754 | |||
| CMS Energy Corp., 5.625% | 8,028 | 173,646 | |||
| CMS Energy Corp., 5.875% | 5,778 | 125,903 | |||
| DTE Energy Company, 5.250% | 8,615 | 185,050 | |||
| Integrys Holding, Inc., 6.000% (6.000% to 8-1-23, then 3 month LIBOR + 3.220%) | 7,300 | 167,900 | |||
| NiSource, Inc., 6.500% (6.500% to 3-15-24, then 5 Year CMT + 3.632%) | 12,261 | 302,969 | |||
| NiSource, Inc., 7.750% | 3,696 | 376,881 | |||
| Sempra Energy, 5.750% | 12,111 | 263,051 | |||
| Common stocks 2.9% | $649,048 | ||||
| (Cost $628,439) | |||||
| Energy 1.9% | 418,644 | ||||
| Oil, gas and consumable fuels 1.9% | |||||
| BP PLC, ADR | 6,221 | 207,035 | |||
| Equitrans Midstream Corp. | 9,202 | 77,481 | |||
| The Williams Companies, Inc. | 4,098 | 134,128 | |||
| Utilities 1.0% | 230,404 | ||||
| Multi-utilities 1.0% | |||||
| Algonquin Power & Utilities Corp. | 6,118 | 230,404 | |||
| Rate (%) | Maturity date | Par value^ | Value | ||
| Corporate bonds 41.4% | $9,424,295 | ||||
| (Cost $10,427,835) | |||||
| Communication services 1.8% | 410,471 | ||||
| Media 1.1% | |||||
| Paramount Global (6.375% to 3-30-27, then 5 Year CMT + 3.999%) | 6.375 | 03-30-62 | 301,000 | 254,471 | |
| Wireless telecommunication services 0.7% | |||||
| SoftBank Group Corp. (6.875% to 7-19-27, then 5 Year ICE Swap Rate + 4.854%) (B) | 6.875 | 07-19-27 | 200,000 | 156,000 | |
| Consumer discretionary 1.6% | 367,224 | ||||
| Automobiles 1.6% | |||||
| General Motors Financial Company, Inc. (5.700% to 9-30-30, then 5 Year CMT + 4.997%) (B) | 5.700 | 09-30-30 | 118,000 | 100,300 | |
| General Motors Financial Company, Inc. (6.500% to 9-30-28, then 3 month LIBOR + 3.436%) (B) | 6.500 | 09-30-28 | 316,000 | 266,924 | |
| Energy 5.1% | 1,164,310 | ||||
| Oil, gas and consumable fuels 5.1% | |||||
| DCP Midstream LP (7.375% to 12-15-22, then 3 month LIBOR + 5.148%) (B) | 7.375 | 12-15-22 | 349,000 | 343,784 | |
| Enbridge, Inc. (7.375% to 10-15-27, then 5 Year CMT + 3.708%) | 7.375 | 01-15-83 | 175,000 | 165,142 | |
| Energy Transfer LP (6.625% to 2-15-28, then 3 month LIBOR + 4.155%) (B) | 6.625 | 02-15-28 | 639,000 | 457,684 | |
| MPLX LP (6.875% to 2-15-23, then 3 month LIBOR + 4.652%) (B) | 6.875 | 02-15-23 | 129,000 | 125,775 | |
| TransCanada Trust (5.600% to 12-7-31, then 5 Year CMT + 3.986%) | 5.600 | 03-07-82 | 84,000 | 71,925 | |
| Financials 27.5% | 6,259,831 | ||||
| Banks 19.3% | |||||
| Bank of America Corp. (5.875% to 3-15-28, then 3 month LIBOR + 2.931%) (B) | 5.875 | 03-15-28 | 258,000 | 222,074 | |
| Bank of America Corp. (6.125% to 4-27-27, then 5 Year CMT + 3.231%) (B) | 6.125 | 04-27-27 | 336,000 | 317,520 | |
| Bank of America Corp. (6.500% to 10-23-24, then 3 month LIBOR + 4.174%) (B) | 6.500 | 10-23-24 | 40,000 | 39,700 | |
| Barclays PLC (8.000% to 6-15-24, then 5 Year CMT + 5.672%) (B) | 8.000 | 06-15-24 | 262,000 | 246,528 | |
| BNP Paribas SA (7.750% to 8-16-29, then 5 Year CMT + 4.899%) (B)(C) | 7.750 | 08-16-29 | 205,000 | 193,281 | |
| Citizens Financial Group, Inc. (6.375% to 4-6-24, then 3 month LIBOR + 3.157%) (B) | 6.375 | 04-06-24 | 265,000 | 241,615 | |
| CoBank ACB (6.450% to 10-1-27, then 5 Year CMT + 3.487%) (B) | 6.450 | 10-01-27 | 179,000 | 173,631 | |
| Comerica, Inc. (5.625% to 7-1-25, then 5 Year CMT + 5.291%) (B) | 5.625 | 07-01-25 | 171,000 | 166,092 | |
| Huntington Bancshares, Inc. (5.625% to 7-15-30, then 10 Year CMT + 4.945%) (B) | 5.625 | 07-15-30 | 82,000 | 74,525 | |
| 16 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
| Rate (%) | Maturity date | Par value^ | Value | ||
| Financials (continued) | |||||
| Banks (continued) | |||||
| JPMorgan Chase & Co. (4.600% to 2-1-25, then SOFR + 3.125%) (B) | 4.600 | 02-01-25 | 304,000 | $271,290 | |
| JPMorgan Chase & Co. (6.750% to 2-1-24, then 3 month LIBOR + 3.780%) (B) | 6.750 | 02-01-24 | 224,000 | 224,000 | |
| Lloyds Banking Group PLC (7.500% to 6-27-24, then 5 Year U.S. Swap Rate + 4.760%) (B) | 7.500 | 06-27-24 | 249,000 | 237,415 | |
| M&T Bank Corp. (3.500% to 9-1-26, then 5 Year CMT + 2.679%) (B) | 3.500 | 09-01-26 | 309,000 | 228,932 | |
| SVB Financial Group (4.100% to 2-15-31, then 10 Year CMT + 3.064%) (B) | 4.100 | 02-15-31 | 200,000 | 122,947 | |
| SVB Financial Group (4.700% to 11-15-31, then 10 Year CMT + 3.064%) (B) | 4.700 | 11-15-31 | 296,000 | 197,580 | |
| The Bank of Nova Scotia (8.625% to 10-27-27, then 5 Year CMT + 4.389%) | 8.625 | 10-27-82 | 200,000 | 201,070 | |
| The PNC Financial Services Group, Inc. (3.400% to 9-15-26, then 5 Year CMT + 2.595%) (B) | 3.400 | 09-15-26 | 129,000 | 96,266 | |
| The PNC Financial Services Group, Inc. (6.000% to 5-15-27, then 5 Year CMT + 3.000%) (B) | 6.000 | 05-15-27 | 341,000 | 316,278 | |
| The PNC Financial Services Group, Inc. (6.200% to 9-15-27, then 5 Year CMT + 3.238%) (B) | 6.200 | 09-15-27 | 233,000 | 220,698 | |
| The PNC Financial Services Group, Inc. (3 month LIBOR + 3.678%) (A)(B) | 6.460 | 02-01-23 | 48,000 | 47,879 | |
| The Toronto-Dominion Bank (8.125% to 10-31-27, then 5 Year CMT + 4.075%) | 8.125 | 10-31-82 | 279,000 | 282,139 | |
| U.S. Bancorp (3.700% to 1-15-27, then 5 Year CMT + 2.541%) (B) | 3.700 | 01-15-27 | 258,000 | 200,595 | |
| Wells Fargo & Company (5.900% to 6-15-24, then 3 month LIBOR + 3.110%) (B) | 5.900 | 06-15-24 | 80,000 | 72,550 | |
| Capital markets 2.5% | |||||
| The Bank of New York Mellon Corp. (3.750% to 12-20-26, then 5 Year CMT + 2.630%) (B) | 3.750 | 12-20-26 | 119,000 | 91,651 | |
| The Charles Schwab Corp. (4.000% to 6-1-26, then 5 Year CMT + 3.168%) (B) | 4.000 | 06-01-26 | 174,000 | 143,054 | |
| The Charles Schwab Corp. (4.000% to 12-1-30, then 10 Year CMT + 3.079%) (B) | 4.000 | 12-01-30 | 130,000 | 96,558 | |
| The Charles Schwab Corp. (5.000% to 6-1-27, then 5 Year CMT + 3.256%) (B) | 5.000 | 06-01-27 | 101,000 | 89,638 | |
| The Charles Schwab Corp. (5.375% to 6-1-25, then 5 Year CMT + 4.971%) (B) | 5.375 | 06-01-25 | 136,000 | 132,770 | |
| Consumer finance 1.4% | |||||
| American Express Company (3.550% to 9-15-26, then 5 Year CMT + 2.854%) (B) | 3.550 | 09-15-26 | 217,000 | 167,361 | |
| Discover Financial Services (6.125% to 6-23-25, then 5 Year CMT + 5.783%) (B) | 6.125 | 06-23-25 | 162,000 | 155,633 | |
| Diversified financial services 0.8% | |||||
| Enstar Finance LLC (5.750% to 9-1-25, then 5 Year CMT + 5.468%) | 5.750 | 09-01-40 | 211,000 | 187,027 | |
| Insurance 3.5% | |||||
| Markel Corp. (6.000% to 6-1-25, then 5 Year CMT + 5.662%) (B) | 6.000 | 06-01-25 | 157,000 | 150,319 | |
| MetLife, Inc. (5.875% to 3-15-28, then 3 month LIBOR + 2.959%) (B) | 5.875 | 03-15-28 | 230,000 | 206,320 | |
| SBL Holdings, Inc. (6.500% to 11-13-26, then 5 Year CMT + 5.620%) (B)(C) | 6.500 | 11-13-26 | 263,000 | 198,565 | |
| SBL Holdings, Inc. (7.000% to 5-13-25, then 5 Year CMT + 5.580%) (B)(C) | 7.000 | 05-13-25 | 306,000 | 246,330 | |
| Utilities 5.4% | 1,222,459 | ||||
| Electric utilities 2.8% | |||||
| Edison International (5.000% to 12-15-26, then 5 Year CMT + 3.901%) (B) | 5.000 | 12-15-26 | 119,000 | 96,390 | |
| Edison International (5.375% to 3-15-26, then 5 Year CMT + 4.698%) (B) | 5.375 | 03-15-26 | 342,000 | 279,038 | |
| NextEra Energy Capital Holdings, Inc. (5.650% to 5-1-29, then 3 month LIBOR + 3.156%) | 5.650 | 05-01-79 | 242,000 | 204,449 | |
| The Southern Company (3.750% to 6-15-26, then 5 Year CMT + 2.915%) | 3.750 | 09-15-51 | 86,000 | 68,163 | |
| Independent power and renewable electricity producers 1.5% | |||||
| Vistra Corp. (7.000% to 12-15-26, then 5 Year CMT + 5.740%) (B)(C) | 7.000 | 12-15-26 | 117,000 | 103,499 | |
| Vistra Corp. (8.000% to 10-15-26, then 5 Year CMT + 6.930%) (B)(C) | 8.000 | 10-15-26 | 241,000 | 228,950 | |
| Multi-utilities 1.1% | |||||
| CenterPoint Energy, Inc. (6.125% to 9-1-23, then 3 month LIBOR + 3.270%) (B) | 6.125 | 09-01-23 | 12,000 | 11,270 | |
| Dominion Energy, Inc. (4.350% to 1-15-27, then 5 Year CMT + 3.195%) (B) | 4.350 | 01-15-27 | 86,000 | 71,147 | |
| Dominion Energy, Inc. (5.750% to 10-1-24, then 3 month LIBOR + 3.057%) | 5.750 | 10-01-54 | 172,000 | 159,553 | |
| Capital preferred securities 0.8% | $175,947 | ||||
| (Cost $195,558) | |||||
| Financials 0.8% | 175,947 | ||||
| Insurance 0.8% | |||||
| MetLife Capital Trust IV (7.875% to 12-15-37, then 3 month LIBOR + 3.960%) (C) | 7.875 | 12-15-37 | 168,000 | 175,947 | |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 17 |
| Yield (%) | Shares | Value | |||
| Short-term investments 0.8% | $182,390 | ||||
| (Cost $182,391) | |||||
| Short-term funds 0.8% | 182,390 | ||||
| John Hancock Collateral Trust (D) | 3.1986(E) | 18,225 | 182,086 | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class | 2.9329(E) | 304 | 304 | ||
| Total investments (Cost $24,764,715) 98.7% | $22,440,748 | ||||
| Other assets and liabilities, net 1.3% | 295,860 | ||||
| Total net assets 100.0% | $22,736,608 | ||||
| The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund unless otherwise indicated. | |
| ^All par values are denominated in U.S. dollars unless otherwise indicated. | |
| Security Abbreviations and Legend | |
| ADR | American Depositary Receipt |
| CMT | Constant Maturity Treasury |
| ICE | Intercontinental Exchange |
| LIBOR | London Interbank Offered Rate |
| SOFR | Secured Overnight Financing Rate |
| (A) | Variable rate obligation. The coupon rate shown represents the rate at period end. |
| (B) | Perpetual bonds have no stated maturity date. Date shown as maturity date is next call date. |
| (C) | These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. |
| (D) | Investment is an affiliate of the fund, the advisor and/or subadvisor. |
| (E) | The rate shown is the annualized seven-day yield as of 10-31-22. |
DERIVATIVES
FUTURES
| Open contracts | Number of contracts | Position | Expiration date | Notional basis^ | Notional value^ | Unrealized appreciation (depreciation) |
| 10-Year U.S. Treasury Note Futures | 8 | Short | Dec 2022 | $(942,923) | $(884,750) | $58,173 |
| $58,173 |
^ Notional basis refers to the
contractual amount agreed upon at inception of open contracts; notional value represents the current value of the open contract.
See Notes to financial statements
regarding investment transactions and other derivatives information.
U.S. HIGH DIVIDEND ETF
As of 10-31-22 (unaudited)
| Shares | Value | ||||
| Common stocks 99.5% | $5,306,123 | ||||
| (Cost $4,971,640) | |||||
| Communication services 6.1% | 327,530 | ||||
| Diversified telecommunication services 4.1% | |||||
| AT&T, Inc. | 1,838 | 33,507 | |||
| Lumen Technologies, Inc. | 12,423 | 91,433 | |||
| Verizon Communications, Inc. | 2,545 | 95,107 | |||
| Media 2.0% | |||||
| Comcast Corp., Class A | 485 | 15,394 | |||
| Omnicom Group, Inc. | 505 | 36,739 | |||
| The Interpublic Group of Companies, Inc. | 1,858 | 55,350 | |||
| Consumer discretionary 7.5% | 401,204 | ||||
| Auto components 0.4% | |||||
| Lear Corp. | 162 | 22,471 | |||
| Automobiles 1.1% | |||||
| Ford Motor Company | 4,383 | 58,601 | |||
| Hotels, restaurants and leisure 1.9% | |||||
| Starbucks Corp. | 1,192 | 103,215 | |||
| Household durables 0.3% | |||||
| Garmin, Ltd. | 182 | 16,023 | |||
| 18 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
| Shares | Value | ||||
| Consumer discretionary (continued) | |||||
| Specialty retail 2.1% | |||||
| Best Buy Company, Inc. | 808 | $55,275 | |||
| The Home Depot, Inc. | 182 | 53,896 | |||
| Textiles, apparel and luxury goods 1.7% | |||||
| NIKE, Inc., Class B | 263 | 24,375 | |||
| VF Corp. | 2,384 | 67,348 | |||
| Consumer staples 4.2% | 222,537 | ||||
| Food and staples retailing 1.9% | |||||
| Costco Wholesale Corp. | 141 | 70,712 | |||
| Sysco Corp. | 364 | 31,508 | |||
| Food products 0.6% | |||||
| Archer-Daniels-Midland Company | 303 | 29,385 | |||
| Tobacco 1.7% | |||||
| Philip Morris International, Inc. | 990 | 90,932 | |||
| Energy 5.4% | 285,942 | ||||
| Oil, gas and consumable fuels 5.4% | |||||
| Chevron Corp. | 505 | 91,355 | |||
| Exxon Mobil Corp. | 1,172 | 129,869 | |||
| ONEOK, Inc. | 1,091 | 64,718 | |||
| Financials 12.5% | 665,208 | ||||
| Banks 0.3% | |||||
| Huntington Bancshares, Inc. | 1,172 | 17,791 | |||
| Capital markets 7.3% | |||||
| BlackRock, Inc. | 162 | 104,637 | |||
| CME Group, Inc. | 242 | 41,939 | |||
| Franklin Resources, Inc. | 545 | 12,780 | |||
| T. Rowe Price Group, Inc. | 949 | 100,746 | |||
| The Blackstone Group, Inc. | 1,212 | 110,462 | |||
| The Charles Schwab Corp. | 263 | 20,953 | |||
| Consumer finance 0.3% | |||||
| American Express Company | 101 | 14,993 | |||
| Insurance 3.0% | |||||
| Principal Financial Group, Inc. | 444 | 39,130 | |||
| Prudential Financial, Inc. | 1,131 | 118,970 | |||
| Mortgage real estate investment trusts 1.6% | |||||
| Annaly Capital Management, Inc. | 4,464 | 82,807 | |||
| Health care 13.0% | 696,653 | ||||
| Biotechnology 3.3% | |||||
| Amgen, Inc. | 182 | 49,204 | |||
| Gilead Sciences, Inc. | 1,616 | 126,791 | |||
| Health care equipment and supplies 2.8% | |||||
| Abbott Laboratories | 566 | 56,000 | |||
| Medtronic PLC | 1,091 | 95,288 | |||
| Health care providers and services 1.7% | |||||
| UnitedHealth Group, Inc. | 162 | 89,934 | |||
| Life sciences tools and services 1.2% | |||||
| Agilent Technologies, Inc. | 121 | 16,740 | |||
| Danaher Corp. | 101 | 25,419 | |||
| Thermo Fisher Scientific, Inc. | 40 | 20,559 | |||
| Pharmaceuticals 4.0% | |||||
| Eli Lilly & Company | 182 | 65,900 | |||
| Merck & Company, Inc. | 626 | 63,351 | |||
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 19 |
| Shares | Value | ||||
| Health care (continued) | |||||
| Pharmaceuticals (continued) | |||||
| Pfizer, Inc. | 1,879 | $87,467 | |||
| Industrials 4.7% | 250,034 | ||||
| Air freight and logistics 1.9% | |||||
| United Parcel Service, Inc., Class B | 606 | 101,669 | |||
| Electrical equipment 1.1% | |||||
| Rockwell Automation, Inc. | 222 | 56,677 | |||
| Machinery 0.7% | |||||
| Caterpillar, Inc. | 182 | 39,396 | |||
| Road and rail 0.8% | |||||
| Old Dominion Freight Line, Inc. | 61 | 16,751 | |||
| Union Pacific Corp. | 121 | 23,854 | |||
| Trading companies and distributors 0.2% | |||||
| W.W. Grainger, Inc. | 20 | 11,687 | |||
| Information technology 36.6% | 1,954,914 | ||||
| Communications equipment 2.1% | |||||
| Cisco Systems, Inc. | 2,485 | 112,894 | |||
| IT services 10.2% | |||||
| Automatic Data Processing, Inc. | 182 | 43,989 | |||
| Fidelity National Information Services, Inc. | 283 | 23,486 | |||
| IBM Corp. | 828 | 114,504 | |||
| Mastercard, Inc., Class A | 222 | 72,856 | |||
| Paychex, Inc. | 869 | 102,811 | |||
| The Western Union Company | 7,009 | 94,692 | |||
| Visa, Inc., Class A | 444 | 91,979 | |||
| Semiconductors and semiconductor equipment 8.8% | |||||
| Broadcom, Inc. | 222 | 104,367 | |||
| KLA Corp. | 222 | 70,252 | |||
| Lam Research Corp. | 61 | 24,692 | |||
| Monolithic Power Systems, Inc. | 162 | 54,991 | |||
| NVIDIA Corp. | 808 | 109,056 | |||
| NXP Semiconductors NV | 101 | 14,754 | |||
| Qualcomm, Inc. | 465 | 54,712 | |||
| Texas Instruments, Inc. | 222 | 35,660 | |||
| Software 8.1% | |||||
| Intuit, Inc. | 263 | 112,433 | |||
| Microsoft Corp. | 1,071 | 248,611 | |||
| NortonLifeLock, Inc. | 606 | 13,653 | |||
| Oracle Corp. | 747 | 58,318 | |||
| Technology hardware, storage and peripherals 7.4% | |||||
| Apple, Inc. | 2,202 | 337,651 | |||
| HP, Inc. | 1,212 | 33,475 | |||
| Seagate Technology Holdings PLC | 505 | 25,078 | |||
| Materials 2.5% | 131,260 | ||||
| Chemicals 0.9% | |||||
| LyondellBasell Industries NV, Class A | 606 | 46,329 | |||
| Containers and packaging 1.0% | |||||
| International Paper Company | 909 | 30,551 | |||
| Packaging Corp. of America | 182 | 21,878 | |||
| Metals and mining 0.6% | |||||
| Newmont Corp. | 768 | 32,502 | |||
| 20 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
| Shares | Value | ||||
| Real estate 5.2% | $276,400 | ||||
| Equity real estate investment trusts 5.2% | |||||
| Extra Space Storage, Inc. | 81 | 14,373 | |||
| Gaming and Leisure Properties, Inc. | 1,939 | 97,183 | |||
| Medical Properties Trust, Inc. | 8,100 | 92,745 | |||
| Prologis, Inc. | 505 | 55,929 | |||
| VICI Properties, Inc. | 505 | 16,170 | |||
| Utilities 1.8% | 94,441 | ||||
| Electric utilities 1.8% | |||||
| Exelon Corp. | 1,010 | 38,976 | |||
| NextEra Energy, Inc. | 545 | 42,238 | |||
| The Southern Company | 202 | 13,227 | |||
| Yield (%) | Shares | Value | |||
| Short-term investments 0.1% | $7,342 | ||||
| (Cost $7,342) | |||||
| Short-term funds 0.1% | 7,342 | ||||
| John Hancock Collateral Trust (A) | 3.1986(B) | 735 | 7,342 | ||
| Total investments (Cost $4,978,982) 99.6% | $5,313,465 | ||||
| Other assets and liabilities, net 0.4% | 21,423 | ||||
| Total net assets 100.0% | $5,334,888 | ||||
| The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund. | |
| Security Abbreviations and Legend | |
| (A) | Investment is an affiliate of the fund, the advisor and/or subadvisor. |
| (B) | The rate shown is the annualized seven-day yield as of 10-31-22. |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 21 |
Financial statements
STATEMENTS OF ASSETS AND
LIABILITIES 10-31-22 (unaudited)
| Corporate Bond ETF | Mortgage-Backed Securities ETF | Preferred Income ETF | U.S. High Dividend ETF | |
| Assets | ||||
| Unaffiliated investments, at value | $16,522,096 | $22,958,994 | $22,258,662 | $5,306,123 |
| Affiliated investments, at value | 67,217 | 227,241 | 182,086 | 7,342 |
| Total investments, at value | 16,589,313 | 23,186,235 | 22,440,748 | 5,313,465 |
| Receivable for futures variation margin | — | — | 10,250 | — |
| Cash | 6,117 | — | 192,000 | 39 |
| Collateral held at broker for futures contracts | — | 50,000 | 40,000 | — |
| Dividends and interest receivable | 178,696 | 108,215 | 126,271 | 5,373 |
| Receivable from affiliates | 7,389 | 8,987 | 11,082 | 8,767 |
| Other assets | 8,839 | 7,039 | 15,260 | 41,519 |
| Total assets | 16,790,354 | 23,360,476 | 22,835,611 | 5,369,163 |
| Liabilities | ||||
| Payable for futures variation margin | — | 5,996 | — | — |
| Payable for investments purchased | — | — | 65,027 | — |
| Payable to affiliates | ||||
| Accounting and legal services fees | 771 | 1,256 | 1,155 | 76 |
| Other liabilities and accrued expenses | 47,595 | 40,059 | 32,821 | 34,199 |
| Total liabilities | 48,366 | 47,311 | 99,003 | 34,275 |
| Net assets | $16,741,988 | $23,313,165 | $22,736,608 | $5,334,888 |
| Net assets consist of | ||||
| Paid-in capital | $21,203,753 | $27,748,411 | $25,237,270 | $4,990,399 |
| Total distributable earnings (loss) | (4,461,765) | (4,435,246) | (2,500,662) | 344,489 |
| Net assets | $16,741,988 | $23,313,165 | $22,736,608 | $5,334,888 |
| Unaffiliated investments, at cost | $20,520,947 | $27,072,984 | $24,582,628 | $4,971,640 |
| Affiliated investments, at cost | $67,216 | $227,239 | $182,087 | $7,342 |
| Net asset value per share | ||||
| Based on net asset values and shares outstanding-the fund has an unlimited number of shares authorized with no par value. | ||||
| Net assets | $16,741,988 | $23,313,165 | $22,736,608 | $5,334,888 |
| Shares outstanding | 850,000 | 1,125,000 | 1,050,000 | 200,000 |
| Net asset value per share | $19.70 | $20.72 | $21.65 | $26.67 |
| 22 | JOHN HANCOCK ETFS | SEMIANNUAL | SEE NOTES TO FINANCIAL STATEMENTS |
STATEMENTS OF OPERATIONS For the six months ended 10-31-22 (unaudited)
| Corporate Bond ETF | Mortgage-Backed Securities ETF | Preferred Income ETF | U.S. High Dividend ETF1 | |
| Investment income | ||||
| Interest | $299,330 | $530,521 | $235,854 | — |
| Dividends from affiliated investments | 630 | 2,087 | 1,726 | $44 |
| Dividends from unaffiliated investments | — | — | 394,159 | 11,513 |
| Less foreign taxes withheld | — | — | (1,221) | — |
| Total investment income | 299,960 | 532,608 | 630,518 | 11,557 |
| Expenses | ||||
| Investment management fees | 21,704 | 42,156 | 50,666 | 1,323 |
| Accounting and legal services fees | 1,389 | 1,889 | 1,589 | 76 |
| Transfer agent fees | 5,042 | 5,042 | 4,585 | 565 |
| Trustees’ fees | 264 | 343 | 310 | — |
| Custodian fees | 18,390 | 14,051 | 11,792 | 1,512 |
| Printing and postage | 8,216 | 8,578 | 7,749 | 1,263 |
| Professional fees | 14,111 | 23,589 | 54,688 | 6,507 |
| Stock exchange listing fees | 4,768 | 2,732 | 5,316 | — |
| Other | 5,885 | 5,872 | 30,793 | 961 |
| Total expenses | 79,769 | 104,252 | 167,488 | 12,207 |
| Less expense reductions | (53,469) | (55,902) | (111,658) | (10,656) |
| Net expenses | 26,300 | 48,350 | 55,830 | 1,551 |
| Net investment income | 273,660 | 484,258 | 574,688 | 10,006 |
| Realized and unrealized gain (loss) | ||||
| Net realized gain (loss) on | ||||
| Unaffiliated investments | (313,601) | (116,150) | (207,839) | — |
| Affiliated investments | (17) | (45) | (73) | — |
| Futures contracts | — | — | 118,453 | — |
| (313,618) | (116,195) | (89,459) | — | |
| Change in net unrealized appreciation (depreciation) of | ||||
| Unaffiliated investments | (1,432,404) | (2,068,788) | (1,313,480) | 334,483 |
| Affiliated investments | 1 | 2 | (1) | — |
| Futures | — | (59,793) | (28,805) | — |
| (1,432,403) | (2,128,579) | (1,342,286) | 334,483 | |
| Net realized and unrealized gain (loss) | (1,746,021) | (2,244,774) | (1,431,745) | 334,483 |
| Increase (decrease) in net assets from operations | $(1,472,361) | $(1,760,516) | $(857,057) | $344,489 |
| 1 | Period from 9-27-22 (commencement of operations) to 10-31-22. |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL | JOHN HANCOCK ETFS | 23 |
STATEMENTS OF CHANGES IN NET
ASSETS
| Corporate Bond ETF | Mortgage-Backed Securities ETF | Preferred Income ETF | ||||
| Six months ended 10-31-22 (unaudited) | Year ended 4-30-22 | Six months ended 10-31-22 (unaudited) | Period ended 4-30-221 | Six months ended 10-31-22 (unaudited) | Period ended 4-30-222 | |
| Increase (decrease) in net assets | ||||||
| From operations | ||||||
| Net investment income | $273,660 | $483,655 | $484,258 | $327,241 | $574,688 | $263,561 |
| Net realized gain (loss) | (313,618) | 51,177 | (116,195) | (71,609) | (89,459) | (131,610) |
| Change in net unrealized appreciation (depreciation) | (1,432,403) | (2,747,007) | (2,128,579) | (2,045,202) | (1,342,286) | (923,508) |
| Increase (decrease) in net assets resulting from operations | (1,472,361) | (2,212,175) | (1,760,516) | (1,789,570) | (857,057) | (791,557) |
| Distributions to shareholders | ||||||
| From earnings | (326,052) | (640,804) | (536,522) | (351,819) | (588,899) | (265,880) |
| From fund share transactions | ||||||
| Shares issued | — | 1,207,092 | 564,887 | 27,186,705 | 9,607,411 | 15,632,590 |
| Total increase (decrease) | (1,798,413) | (1,645,887) | (1,732,151) | 25,045,316 | 8,161,455 | 14,575,153 |
| Net assets | ||||||
| Beginning of period | 18,540,401 | 20,186,288 | 25,045,316 | — | 14,575,153 | — |
| End of period | $16,741,988 | $18,540,401 | $23,313,165 | $25,045,316 | $22,736,608 | $14,575,153 |
| Share activity | ||||||
| Shares outstanding | ||||||
| Beginning of period | 850,000 | 800,000 | 1,100,000 | — | 625,000 | — |
| Shares issued | — | 50,000 | 25,000 | 1,100,000 | 425,000 | 625,000 |
| End of period | 850,000 | 850,000 | 1,125,000 | 1,100,000 | 1,050,000 | 625,000 |
| 1 | Period from 8-18-21 (commencement of operations) to 4-30-22. |
| 2 | Period from 12-14-21 (commencement of operations) to 4-30-22. |
| 24 | JOHN HANCOCK ETFS | SEMIANNUAL | SEE NOTES TO FINANCIAL STATEMENTS |
STATEMENTS OF CHANGES IN NET ASSETS
Continued
| U.S. High Dividend ETF | |
| Period ended 10-31-223 (unaudited) | |
| Increase (decrease) in net assets | |
| From operations | |
| Net investment income | $10,006 |
| Net realized gain (loss) | — |
| Change in net unrealized appreciation (depreciation) | 334,483 |
| Increase (decrease) in net assets resulting from operations | 344,489 |
| Distributions to shareholders | |
| From earnings | — |
| From fund share transactions | |
| Shares issued | 4,990,399 |
| Total increase (decrease) | 5,334,888 |
| Net assets | |
| Beginning of period | — |
| End of period | $5,334,888 |
| Share activity | |
| Shares outstanding | |
| Beginning of period | — |
| Shares issued | 200,000 |
| End of period | 200,000 |
| 3 | Period from 9-27-22 (commencement of operations) to 10-31-22. |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL | JOHN HANCOCK ETFS | 25 |
Financial Highlights
CORPORATE BOND ETF
| Period ended | 10-31-221 | 4-30-22 | 4-30-212 |
| Per share operating performance | |||
| Net asset value, beginning of period | $21.81 | $25.23 | $25.00 |
| Net investment income3 | 0.32 | 0.60 | 0.05 |
| Net realized and unrealized gain (loss) on investments | (2.05) | (3.23) | 0.22 |
| Total from investment operations | (1.73) | (2.63) | 0.27 |
| Less distributions | |||
| From net investment income | (0.38) | (0.79) | (0.04) |
| Net asset value, end of period | $19.70 | $21.81 | $25.23 |
| Total return (%)4 | (8.03)5 | (10.77) | 1.105 |
| Ratios and supplemental data | |||
| Net assets, end of period (in millions) | $17 | $19 | $20 |
| Ratios (as a percentage of average net assets): | |||
| Expenses before reductions | 0.886 | 0.94 | 0.727 |
| Expenses including reductions | 0.296 | 0.29 | 0.297 |
| Net investment income | 3.036 | 2.39 | 2.276 |
| Portfolio turnover (%) | 13 | 36 | 08 |
| 1 | Six months ended 10-31-22. Unaudited. |
| 2 | Period from 3-30-21 (commencement of operations) to 4-30-21. |
| 3 | Based on average daily shares outstanding. |
| 4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
| 5 | Not annualized. |
| 6 | Annualized. |
| 7 | Annualized. Certain expenses are presented unannualized. |
| 8 | Portfolio turnover for the period is 0% due to no sales activity. |
MORTGAGE-BACKED SECURITIES ETF
| Period ended | 10-31-221 | 4-30-222 |
| Per share operating performance | ||
| Net asset value, beginning of period | $22.77 | $25.00 |
| Net investment income3 | 0.44 | 0.38 |
| Net realized and unrealized gain (loss) on investments | (2.01) | (2.22) |
| Total from investment operations | (1.57) | (1.84) |
| Less distributions | ||
| From net investment income | (0.48) | (0.39) |
| Net asset value, end of period | $20.72 | $22.77 |
| Total return (%)4 | (6.95)5 | (7.43)5 |
| Ratios and supplemental data | ||
| Net assets, end of period (in millions) | $23 | $25 |
| Ratios (as a percentage of average net assets): | ||
| Expenses before reductions | 0.846 | 0.937 |
| Expenses including reductions | 0.396 | 0.397 |
| Net investment income | 3.916 | 2.206 |
| Portfolio turnover (%) | 10 | 33 |
| 1 | Six months ended 10-31-22. Unaudited. |
| 2 | Period from 8-18-21 (commencement of operations) to 4-30-22. |
| 3 | Based on average daily shares outstanding. |
| 4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
| 5 | Not annualized. |
| 6 | Annualized. |
| 7 | Annualized. Certain expenses are presented unannualized. |
| 26 | JOHN HANCOCK ETFS | SEMIANNUAL | SEE NOTES TO FINANCIAL STATEMENTS |
PREFERRED INCOME ETF
| Period ended | 10-31-221 | 4-30-222 |
| Per share operating performance | ||
| Net asset value, beginning of period | $23.32 | $25.00 |
| Net investment income3 | 0.63 | 0.43 |
| Net realized and unrealized gain (loss) on investments | (1.67) | (1.68) |
| Total from investment operations | (1.04) | (1.25) |
| Less distributions | ||
| From net investment income | (0.63) | (0.43) |
| Net asset value, end of period | $21.65 | $23.32 |
| Total return (%)4 | (4.52)5 | (5.05)5 |
| Ratios and supplemental data | ||
| Net assets, end of period (in millions) | $23 | $15 |
| Ratios (as a percentage of average net assets): | ||
| Expenses before reductions | 1.626 | 1.157 |
| Expenses including reductions | 0.546 | 0.547 |
| Net investment income | 5.566 | 4.576 |
| Portfolio turnover (%) | 18 | 15 |
| 1 | Six months ended 10-31-22. Unaudited. |
| 2 | Period from 12-14-21 (commencement of operations) to 4-30-22. |
| 3 | Based on average daily shares outstanding. |
| 4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
| 5 | Not annualized. |
| 6 | Annualized. |
| 7 | Annualized. Certain expenses are presented unannualized. |
U.S. HIGH DIVIDEND ETF
| Period ended | 10-31-221 |
| Per share operating performance | |
| Net asset value, beginning of period | $24.95 |
| Net investment income2 | 0.05 |
| Net realized and unrealized gain (loss) on investments | 1.67 |
| Total from investment operations | 1.72 |
| Net asset value, end of period | $26.67 |
| Total return (%)3 | 6.904 |
| Ratios and supplemental data | |
| Net assets, end of period (in millions) | $5 |
| Ratios (as a percentage of average net assets): | |
| Expenses before reductions | 2.165 |
| Expenses including reductions | 0.345 |
| Net investment income | 2.196 |
| Portfolio turnover (%) | 07 |
| 1 | Period from 9-27-22 (commencement of operations) to 10-31-22. |
| 2 | Based on average daily shares outstanding. |
| 3 | Total returns would have been lower had certain expenses not been reduced during the period. |
| 4 | Not annualized. |
| 5 | Annualized. Certain expenses are presented unannualized. |
| 6 | Annualized. |
| 7 | Portfolio turnover for the period is 0% due to no sales activity. |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL | JOHN HANCOCK ETFS | 27 |
Notes to financial statements (unaudited)
Note 1—Organization
John Hancock Exchange-Traded Fund
Trust (the Trust) is an open-end management investment company organized as a Massachusetts business trust. The Trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act). It is a series
company with multiple investment series, four of which are presented in this report (the funds).
The investment objective of
Corporate Bond ETF is to seek a high level of current income consistent with prudent investment risk.
The investment objective of
Mortgage-Backed Securities ETF is to seek a high level of current income while seeking to outperform the benchmark over a market cycle.
The investment objective of
Preferred Income ETF is to seek a high level of current income, consistent with preservation of capital.
The investment objective of U.S.
High Dividend ETF is to seek a high level of current income. Long-term growth of capital is a secondary objective.
U.S. High Dividend ETF commenced
operations on September 27, 2022.
Note 2—Significant accounting policies
The financial statements have been
prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP), which require management to make certain estimates and assumptions as of the date of the financial
statements. Actual results could differ from those estimates and those differences could be significant. The funds qualify as investment companies under Topic 946 of Accounting Standards Codification of US GAAP.
Events or transactions occurring
after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting
policies of the funds:
Security valuation. Investments are stated at value as of the scheduled close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. In case of emergency or other
disruption resulting in the NYSE not opening for trading or the NYSE closing at a time other than the regularly scheduled close, the net asset value (NAV) may be determined as of the regularly scheduled close of the
NYSE pursuant to the Advisor’s Valuation Policies and Procedures.
In order to value the securities,
the funds use the following valuation techniques: Debt obligations are typically valued based on evaluated prices provided by an independent pricing vendor. Independent pricing vendors utilize matrix pricing, which
takes into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data, as well as broker
supplied prices. Equity securities, including exchange-traded or closed-end funds, are typically valued at the last sale price or official closing price on the exchange or principal market where the security trades.
In the event there were no sales during the day or closing prices are not available, the securities are valued using the last available bid price. Investments by the funds in open-end mutual funds, including John
Hancock Collateral Trust (JHCT), are valued at their respective NAVs each business day. Futures contracts whose settlement prices are determined as of the close of the NYSE are typically valued based on the settlement
price while other futures contracts are typically valued at the last traded price on the exchange on which they trade.
Other portfolio securities and
assets, for which reliable market quotations are not readily available, are valued at fair value as determined in good faith by the Pricing Committee following procedures established by the Advisor and adopted by the
Board of Trustees. The frequency with which these fair valuation procedures are used cannot be predicted and fair value of securities may differ significantly from the value that would have been used had a ready
market for such securities existed.
The funds use a three-tier hierarchy
to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities,
including registered investment companies. Level 2 includes securities valued using other significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment
speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities
valued using significant unobservable inputs when market prices are not readily available or reliable, including the Advisor’s assumptions in determining the fair value of investments. Factors used in
determining value may include market or issuer specific events or trends, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the
risks associated with investing in those securities. Changes in valuation techniques and related inputs may result in transfers into or out of an assigned level within the disclosure hierarchy.
The following is a summary of the
values by input classification of the funds’ investments as of October 31, 2022, by major security category or type:
| Total value at 10-31-22 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
| Corporate Bond ETF | ||||
| Investments in securities: | ||||
| Assets | ||||
| Corporate bonds | $16,522,043 | — | $16,522,043 | — |
| Short-term investments | 67,270 | $67,270 | — | — |
| Total investments in securities | $16,589,313 | $67,270 | $16,522,043 | — |
| Mortgage-Backed Securities ETF | ||||
| Investments in securities: | ||||
| Assets |
| 28 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT |
| Total value at 10-31-22 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
| Mortgage-Backed Securities ETF (continued) | ||||
| U.S. Government and Agency obligations | $10,221,702 | — | $10,221,702 | — |
| Collateralized mortgage obligations | 8,676,789 | — | 8,676,789 | — |
| Asset backed securities | 4,060,374 | — | 4,060,374 | — |
| Short-term investments | 227,370 | $227,370 | — | — |
| Total investments in securities | $23,186,235 | $227,370 | $22,958,865 | — |
| Derivatives: | ||||
| Liabilities | ||||
| Futures | $(59,793) | $(59,793) | — | — |
| Preferred Income ETF | ||||
| Investments in securities: | ||||
| Assets | ||||
| Preferred securities | ||||
| Communication services | $1,019,982 | $1,019,982 | — | — |
| Consumer discretionary | 196,948 | 196,948 | — | — |
| Energy | 344,773 | 344,773 | — | — |
| Financials | 5,897,839 | 5,598,769 | $299,070 | — |
| Health care | 255,885 | 255,885 | — | — |
| Industrials | 160,245 | 160,245 | — | — |
| Real estate | 183,473 | 183,473 | — | — |
| Utilities | 3,949,923 | 3,720,451 | 229,472 | — |
| Common stocks | 649,048 | 649,048 | — | — |
| Corporate bonds | 9,424,295 | — | 9,424,295 | — |
| Capital preferred securities | 175,947 | — | 175,947 | — |
| Short-term investments | 182,390 | 182,390 | — | — |
| Total investments in securities | $22,440,748 | $12,311,964 | $10,128,784 | — |
| Derivatives: | ||||
| Assets | ||||
| Futures | $58,173 | $58,173 | — | — |
| U.S. High Dividend ETF | ||||
| Investments in securities: | ||||
| Assets | ||||
| Common stocks | $5,306,123 | $5,306,123 | — | — |
| Short-term investments | 7,342 | 7,342 | — | — |
| Total investments in securities | $5,313,465 | $5,313,465 | — | — |
Stripped securities. Stripped securities are financial instruments structured to separate principal and interest cash flows so that one class receives principal payments from the underlying assets (PO or
principal only), while the other class receives the interest cash flows (IO or interest only). Both PO and IO investments represent an interest in the cash flows of an underlying stripped security. If the underlying
assets experience greater than anticipated prepayments of principal, the funds may fail to fully recover its initial investment in an IO security. The market value of these securities can be extremely volatile in
response to changes in interest rates or prepayments on the underlying securities. In addition, these securities present additional credit risk such that the funds may not receive all or part of its principal or
interest payments because the borrower or issuer has defaulted on its obligation.
Mortgage and asset backed
securities. The funds may invest in mortgage-related securities, such as mortgage-backed securities, and other asset-backed securities, which are debt obligations that represent interests in pools of
mortgages or other income-bearing assets, such as consumer loans or receivables. Such securities often involve risks that are different from the risks associated with investing in other types of debt securities.
Mortgage-backed and other asset-backed securities are subject to changes in the payment patterns of borrowers of the underlying debt. When interest rates fall, borrowers are more likely to refinance or prepay their
debt before its stated maturity. This may result in the funds having to reinvest the proceeds in lower yielding securities, effectively reducing the funds’ income. Conversely, if interest rates rise and
borrowers repay their debt more slowly than expected, the time in which the mortgage-backed and other asset-backed securities are paid off could be extended, reducing the funds’ cash available for reinvestment
in higher yielding securities. The timely payment of principal and interest of certain mortgage-related securities is guaranteed with the full faith and credit of the U.S. Government. Pools created and guaranteed by
non-governmental issuers, including government-sponsored corporations (e.g. FNMA), may be supported by various forms of insurance or guarantees, but there can be no assurance that private insurers or guarantors can
meet their obligations under the insurance policies or guarantee arrangements. The funds are also subject to risks associated with securities with
| SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 29 |
contractual cash flows including asset-backed and
mortgage related securities such as collateralized mortgage obligations, mortgage pass-through securities and commercial mortgage-backed securities. The value, liquidity and related income of these securities are
sensitive to changes in economic conditions, including real estate value, pre-payments, delinquencies and/or defaults, and may be adversely affected by shifts in the market’s perception of the issuers and
changes in interest rates.
Real estate investment trusts. The funds may invest in real estate investment trusts (REITs). Distributions from REITs may be recorded as income and subsequently characterized by the REIT at the end of their fiscal year
as a reduction of cost of investments and/or as a realized gain. As a result, the funds will estimate the components of distributions from these securities. Such estimates are revised when the actual components of the
distributions are known.
Security transactions and related
investment income. Investment security transactions are accounted for on a trade date plus one basis for daily NAV calculations. However, for financial reporting purposes, investment transactions are
reported on trade date. Interest income is accrued as earned. Interest income includes coupon interest and amortization/accretion of premiums/discounts on debt securities. Debt obligations may be placed in a
non-accrual status and related interest income may be reduced by stopping current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful. Dividend income
is recorded on ex-date, except for dividends of certain foreign securities where the dividend may not be known until after the ex-date. In those cases, dividend income, net of withholding taxes, is recorded when the
fund becomes aware of the dividends. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Gains and losses on securities sold are determined on the basis of identified cost and
may include proceeds from litigation.
Foreign investing. Assets, including investments, and liabilities denominated in foreign currencies are translated into U.S. dollar values each day at the prevailing exchange rate. Purchases and sales of
securities, income and expenses are translated into U.S. dollars at the prevailing exchange rate on the date of the transaction. The effect of changes in foreign currency exchange rates on the value of securities is
reflected as a component of the realized and unrealized gains (losses) on investments. Foreign investments are subject to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar
value of securities denominated in that currency.
Funds that invest internationally
generally carry more risk than funds that invest strictly in U.S. securities. Risks can result from differences in economic and political conditions, regulations, market practices (including higher transaction costs),
accounting standards and other factors.
Foreign taxes. The funds may be subject to withholding tax on income, capital gains or repatriations imposed by certain countries, a portion of which may be recoverable. Foreign taxes are accrued based
upon the funds’ understanding of the tax rules and rates that exist in the foreign markets in which it invests. Taxes are accrued based on gains realized by the funds as a result of certain foreign security
sales. In certain circumstances, estimated taxes are accrued based on unrealized appreciation of such securities. Investment income is recorded net of foreign withholding taxes.
Overdraft. The funds may have the ability to borrow from banks for temporary or emergency purposes, including meeting redemption requests that otherwise might require the untimely sale of securities.
Pursuant to the funds’ custodian agreement, the custodian may loan money to the funds to make properly authorized payments. The funds are obligated to repay the custodian for any overdraft, including any related
costs or expenses. The custodian may have a lien, security interest or security entitlement in any fund property that is not otherwise segregated or pledged, to the extent of any overdraft, and to the maximum extent
permitted by law.
Line of credit. The funds, with the exception of U.S. High Dividend ETF, and other affiliated funds have entered into a syndicated line of credit agreement with Citibank, N.A. as the administrative agent
that enables them to participate in a $1 billion unsecured committed line of credit. Excluding commitments designated for a certain fund and subject to the needs of all other affiliated funds, a fund can borrow up to
an aggregate commitment amount of $750 million, subject to asset coverage and other limitations as specified in the agreement.
A commitment fee payable at the end
of each calendar quarter, based on the average daily unused portion of each line of credit, is charged to each participating fund based on a combination of fixed and asset-based allocations and is reflected in Other
expenses on the Statements of operations. For the period ended October 31, 2022, the funds had no borrowings under the line of credit.
Commitment fees for the period ended
October 31, 2022 were as follows:
| Fund | Commitment fee |
| Corporate Bond ETF | $1,701 |
| Mortgage-Backed Securities ETF | 1,709 |
| Preferred Income ETF | 1,745 |
Expenses. Within the John Hancock group of funds complex, expenses that are directly attributable to an individual fund are allocated to such fund. Expenses that are not readily attributable to a
specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund’s relative net assets. Expense estimates are accrued
in the period to which they relate and adjustments are made when actual amounts are known.
Federal income taxes. Each fund intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal
income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.
For federal income tax purposes, as
of April 30, 2022, certain funds have short-term and long-term capital loss carryforwards available to offset future net realized capital gains. These carryforwards do not expire. The following table details the
capital loss carryforwards available as of April 30, 2022:
| No Expiration Date | ||
| Fund | Short Term | Long Term |
| Mortgage-Backed Securities ETF | $152,706 | — |
| 30 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT |
| No Expiration Date | ||
| Fund | Short Term | Long Term |
| Preferred Income ETF | $43,576 | — |
As of April 30, 2022, the funds had
no uncertain tax positions that would require financial statement recognition, derecognition or disclosure. The funds’ federal tax returns are subject to examination by the Internal Revenue Service for a period
of three years.
For federal income tax purposes, the
costs of investments owned on October 31, 2022, including short-term investments, were as follows:
| Fund | Aggregate cost | Unrealized appreciation | Unrealized (depreciation) | Net unrealized appreciation/ (depreciation) |
| Corporate Bond ETF | $20,739,197 | $9,578 | $(4,159,462) | $(4,149,884) |
| Mortgage-Backed Securities ETF | 27,319,290 | 312 | (4,193,160) | (4,192,848) |
| Preferred Income ETF | 24,803,572 | 191,174 | (2,495,825) | (2,304,651) |
| U.S. High Dividend ETF | 4,978,982 | 388,724 | (54,241) | 334,483 |
Distribution of income and
gains. Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. U.S. High Dividend ETF generally declares and pay dividends from net
investment income quarterly. All other funds generally declare and pay dividends from net investment income monthly. All funds generally declare and pay capital gain distributions, if any, annually.
Such distributions, on a tax basis,
are determined in conformity with income tax regulations, which may differ from US GAAP. Distributions in excess of tax basis earnings and profits, if any, are reported in the funds’ financial statements as a
return of capital. The final determination of tax characteristics of the distribution will occur at the end of the year and will subsequently be reported to shareholders.
Capital accounts within the
financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any, will reverse in a subsequent
period. Book-tax differences are primarily attributable to derivative transactions and amortization and accretion on debt securities.
Note 3—Derivative instruments
The funds may invest in derivatives
in order to meet their investment objective. Derivatives include a variety of different instruments that may be traded in the over-the-counter (OTC) market, on a regulated exchange or through a clearing facility. The
risks in using derivatives vary depending upon the structure of the instruments, including the use of leverage, optionality, the liquidity or lack of liquidity of the contract, the creditworthiness of the counterparty
or clearing organization and the volatility of the position. Some derivatives involve risks that are potentially greater than the risks associated with investing directly in the referenced securities or other
referenced underlying instrument. Specifically, the funds are exposed to the risk that the counterparty to an OTC derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor
its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction.
Certain derivatives are traded or
cleared on an exchange or central clearinghouse. Exchange-traded or centrally-cleared transactions generally present less counterparty risk to a fund than OTC transactions. The exchange or clearinghouse stands between
the funds and the broker to the contract and therefore, credit risk is generally limited to the failure of the exchange or clearinghouse and the clearing member.
Futures. A futures contract is a contractual agreement to buy or sell a particular currency or financial instrument at a pre-determined price in the future. Futures are traded on an exchange and
cleared through a central clearinghouse. Risks related to the use of futures contracts include possible illiquidity of the futures markets and contract prices that can be highly volatile and imperfectly correlated to
movements in the underlying financial instrument and potential losses in excess of the amounts recognized on the Statements of assets and liabilities. Use of long futures contracts subjects the funds to the risk of
loss up to the notional value of the futures contracts. Use of short futures contracts subjects the funds to unlimited risk of loss.
Upon entering into a futures
contract, the fund is required to deposit initial margin with the broker in the form of cash or securities. The amount of required margin is set by the broker and is generally based on a percentage of the contract
value. The margin deposit must then be maintained at the established level over the life of the contract. Cash that has been pledged by a fund, if any, is detailed in the Statements of assets and liabilities as
Collateral held at broker for futures contracts. Securities pledged by the funds, if any, are identified in the Funds’ investments. Subsequent payments, referred to as variation margin, are made or received by a
fund periodically and are based on changes in the market value of open futures contracts. Futures contracts are marked-to-market daily and unrealized gain or loss is recorded by the fund. Receivable/Payable for
futures variation margin is included in the Statements of assets and liabilities. When the contract is closed, a fund records a realized gain or loss equal to the difference between the value of the contract at the
time it was opened and the value at the time it was closed.
The following table details how the
funds used futures contracts during the six months ended October 31, 2022. In addition, the table summarizes the range of notional contract amounts held by the funds, as measured at each quarter end:
| Fund | Reason | USD Notional range |
| Mortgage-Backed Securities ETF | The fund used futures contracts to manage against changes in interest rate. | Up to $1.0 million |
| Preferred Income ETF | The fund used futures contracts to manage against changes in interest rate. | From $0.9 million to $2.3 million |
| SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 31 |
Fair value of derivative instruments
by risk category
The table below summarizes the fair
value of derivatives held by the funds at October 31, 2022 by risk category:
| Fund | Risk | Statements of assets and liabilities location | Financial instruments location | Assets derivatives fair value | Liabilities derivatives fair value |
| Mortgage-Backed Securities ETF | Interest rate | Receivable/payable for futures variation margin1 | Futures | — | $(59,793) |
| Preferred Income ETF | Interest rate | Receivable/payable for futures variation margin1 | Futures | $58,173 | — |
| 1 | Reflects cumulative appreciation/depreciation on open futures as disclosed in the Derivatives section of the Funds’ investments. Only the period end variation margin receivable/payable is separately reported on the Statements of assets and liabilities. |
Effect of derivative instruments on
the Statements of operations
The table below summarizes the net
realized gain (loss) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the period ended October 31, 2022:
| Statements of operations location - Net realized gain (loss) on: | ||
| Fund | Risk | Futures contracts |
| Preferred Income ETF | Interest rate | $118,453 |
The table below summarizes the net
change in unrealized appreciation (depreciation) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the period ended October 31, 2022:
| Statements of operations location - Change in net unrealized appreciation (depreciation) of: | ||
| Fund | Risk | Futures contracts |
| Mortgage-Backed Securities ETF | Interest rate | $(59,793) |
| Preferred Income ETF | Interest rate | $(28,805) |
Note 4—Guarantees and indemnifications
Under the Trust’s
organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust, including the funds. Additionally, in the normal course of
business, the Trust enters into contracts with service providers that contain general indemnification clauses. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future
claims that may be made against the Trust that have not yet occurred. The risk of material loss from such claims is considered remote.
Note 5—Fees and transactions with affiliates
John Hancock Investment Management
LLC (the Advisor) serves as investment advisor for the funds. The Advisor is an indirect, principally owned subsidiary of John Hancock Life Insurance Company (U.S.A.), which in turn is a subsidiary of Manulife
Financial Corporation.
Management fee. The funds have an investment management agreement with the Advisor under which Corporate Bond ETF, Mortgage-Backed Securities ETF, Preferred Income ETF and U.S. High Dividend ETF pay a
monthly management fee to the Advisor equivalent on an annual basis to 0.24%, 0.34%, 0.49% and 0.29%, respectively, of average daily net assets. The Advisor has a subadvisory agreement with Manulife Investment
Management (US) LLC, an indirectly owned subsidiary of Manulife Financial Corporation and an affiliate of the Advisor. The funds are not responsible for payment of the subadvisory fees.
The Advisor has contractually agreed
to waive a portion of its management fee and/or reimburse expenses for certain funds of the John Hancock group of funds complex, including the funds (the participating portfolios). This waiver is based upon aggregate
net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of the funds. During the
period ended October 31, 2022, this waiver amounted to 0.01% of the funds’ average daily net assets, on an annualized basis. This arrangement expires on July 31, 2024, unless renewed by mutual agreement of the
funds and the Advisor based upon a determination that this is appropriate under the circumstances at that time.
The Advisor contractually agrees to
reduce its management fee or, if necessary, make a payment to Corporate Bond ETF, Mortgage-Backed Securities ETF, Preferred Income ETF and U.S. High Dividend ETF in an amount equal to the amount by which expenses of
the funds exceed 0.29%, 0.39%, 0.54% and 0.34%, respectively, of average daily net assets. Expenses means all the expenses of the funds, excluding (a) taxes,(b) brokerage commissions,(c) interest expense,(d)
litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the funds’ business,(e) borrowing costs,(f) prime brokerage fees,(g) acquired fund fees and
expenses paid indirectly, and (h) short dividend expense. This agreement expires on August 31, 2024 for U.S. High Dividend ETF, and on August 31, 2023 for Corporate Bond ETF, Preferred Income ETF and Mortgage-Backed
Securities ETF, unless renewed by mutual agreement of the funds and the Advisor based upon a determination that this is appropriate under the circumstances at that time.
| 32 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT |
The expense reductions described
above amount to the following for the period ended October 31, 2022.
Expenses waived or reimbursed in
the current fiscal period are not subject to recapture in future fiscal periods.
The investment management fees,
including the impact of the waivers and reimbursements as described above, incurred for the period ended October 31, 2022, were equivalent to a net annual effective rate of the funds’ average daily net
assets:
Accounting and legal services. Pursuant to a service agreement, the funds reimburse the Advisor for all expenses associated with providing the administrative, financial, legal, compliance, accounting and recordkeeping
services to the funds, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. These accounting and legal services fees incurred, for the period
ended October 31, 2022, amounted to an annual rate of 0.02% of the funds’ average daily net assets.
Trustee expenses. The funds compensate each Trustee who is not an employee of the Advisor or its affiliates. The costs of paying Trustee compensation and expenses are allocated to each fund based on their
net assets relative to other funds within the John Hancock group of funds complex.
Note 6—Capital share transactions
The funds will issue and redeem
shares only in a large number of specified shares, each called a “creation unit,” or multiples thereof. The funds issue and redeem shares at NAV in creation units of 50,000, 25,000, 25,000 and 10,000
shares for Corporate Bond ETF, Mortgage-Backed Securities ETF, Preferred Income ETF and U.S. High Dividend ETF, respectively.
Only authorized participants may
engage in creation or redemption transactions directly with the funds. Such transactions generally take place when an authorized participant deposits into a fund a designated portfolio of securities and/or cash in
exchange for a specified number of creation units. Similarly, shares can be redeemed only in creation units, generally for a designated portfolio of securities and/or cash. For purposes of US GAAP, in-kind redemption
transactions are treated as a sale of securities and any resulting gains and losses are recognized based on the market value of the securities on the date of the transfer. Authorized participants pay a transaction fee
to the custodian when purchasing and redeeming creation units of the funds. The transaction fee is used to defray the costs associated with the issuance and redemption of creation units. Individual shares of the funds
may only be purchased and sold in secondary market transactions through brokers. Secondary market transactions may be subject to brokerage commissions. Shares of the funds are listed and traded on the NYSE Arca, Inc.,
trade at market prices rather than NAV, and may trade at a price greater than or less than NAV.
Authorized participants transacting
in creation or redemption of units for cash may also pay an additional variable charge to compensate the relevant fund for the costs associated with purchasing or selling the applicable securities. For the period
ended October 31, 2022, such variable charges were $564 and $48,233 for Mortgage-Backed Securities ETF and Preferred Income ETF, respectively. These charges are included in shares sold or repurchased on the Statements
of Changes in Net Assets.
Affiliates of Corporate Bond ETF,
Mortgage-Backed Securities ETF, Preferred Income ETF and U.S. High Dividend ETF owned 85%, 65%, 40% and 95%, respectively, of shares of the fund on October 31, 2022. Such concentration of shareholders’ capital
could have a material effect on a fund if such shareholders redeem from the fund.
Note 7—Purchase and sale of securities
Purchases and sales of securities,
other than short-term investments, are aggregated below for the period ended October 31, 2022. In addition, purchases and sales of in-kind transactions are aggregated below for the period ended October 31, 2022:
| Purchases | Sales and maturities | |||
| Fund | In-kind transactions | Non in-kind transactions | In-kind transactions | Non in-kind transactions |
| Corporate Bond ETF | — | $2,381,564 | — | $2,371,734 |
| Mortgage-Backed Securities ETF | — | 2,777,908 | — | 2,407,204 |
| Preferred Income ETF | $5,050,119 | 8,276,532 | — | 3,618,997 |
| U.S. High Dividend ETF | 4,920,936 | 50,704 | — | — |
| Purchases and sales of U.S. Treasury obligations for Mortgage-Backed Securities ETF aggregated $175,253 and $0, respectively, for the period ended October 31, 2022. |
| SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 33 |
Note 8—Industry or sector risk
The funds may invest a large
percentage of their assets in one or more particular industries or sectors of the economy. If a large percentage of a fund’s assets are economically tied to a single or small number of industries or sectors of
the economy, the funds will be less diversified than a more broadly diversified fund, and it may cause the fund to underperform if that industry or sector underperforms. In addition, focusing on a particular industry
or sector may make the fund’s NAV more volatile. Further, a fund that invests in particular industries or sectors is particularly susceptible to the impact of market, economic, regulatory and other factors
affecting those industries or sectors.
Note 9—Investment in affiliated underlying funds
The funds may invest in affiliated
underlying funds that are managed by the Advisor and its affiliates. Information regarding the funds’ fiscal year to date purchases and sales of the affiliated underlying funds as well as income and capital
gains earned by the funds, if any, is as follows:
| Dividends and distributions | |||||||||
| Affiliate | Ending share amount | Beginning value | Cost of purchases | Proceeds from shares sold | Realized gain (loss) | Change in unrealized appreciation (depreciation) | Income distributions received | Capital gain distributions received | Ending value |
| Corporate Bond ETF | |||||||||
| John Hancock Collateral Trust | 6,727 | — | $274,923 | $(207,690) | $(17) | $1 | $630 | — | $67,217 |
| Mortgage-Backed Securities ETF | |||||||||
| John Hancock Collateral Trust | 22,745 | — | $2,265,874 | $(2,038,590) | $(45) | $2 | $2,087 | — | $227,241 |
| Preferred Income ETF | |||||||||
| John Hancock Collateral Trust | 18,225 | — | $1,329,760 | $(1,147,600) | $(73) | $(1) | $1,726 | — | $182,086 |
| U.S. High Dividend ETF | |||||||||
| John Hancock Collateral Trust | 735 | — | $75,080 | $(67,738) | — | — | $44 | — | $7,342 |
Note 10—Coronavirus (COVID-19) pandemic
The COVID-19 disease has resulted in
significant disruptions to global business activity. A widespread health crisis such as a global pandemic could cause substantial market volatility, exchange-trading suspensions, and closures, which may lead to less
liquidity in certain instruments, industries, sectors or the markets generally, and may ultimately affect fund performance.
Note 11—LIBOR discontinuation risk
LIBOR (London Interbank Offered
Rate) is a measure of the average interest rate at which major global banks can borrow from one another. Following allegations of rate manipulation and concerns regarding its thin liquidity, in July 2017, the U.K.
Financial Conduct Authority, which regulates LIBOR, announced that it will stop encouraging banks to provide the quotations needed to sustain LIBOR. As market participants transition away from LIBOR, LIBOR’s
usefulness may deteriorate and these effects could be experienced until the permanent cessation of the majority of U.S. LIBOR rates in 2023. The transition process may lead to increased volatility and illiquidity in
markets that currently rely on LIBOR to determine interest rates. LIBOR’s deterioration may adversely affect the liquidity and/or market value of securities that use LIBOR as a benchmark interest rate.
The ICE Benchmark Administration
Limited, the administrator of LIBOR, ceased publishing certain LIBOR maturities, including some U.S. LIBOR maturities, on December 31, 2021, and is expected to cease publishing the remaining and most liquid U.S. LIBOR
maturities on June 30, 2023. It is expected that market participants have or will transition to the use of alternative reference or benchmark rates prior to the applicable LIBOR publication cessation date.
Additionally, although regulators have encouraged the development and adoption of alternative rates such as the Secured Overnight Financing Rate ("SOFR"), the future utilization of LIBOR or of any particular
replacement rate remains uncertain.
The impact on the transition away
from LIBOR referenced financial instruments remains uncertain. It is expected that market participants will adopt alternative rates such as SOFR or otherwise amend such financial instruments to include fallback
provisions and other measures that contemplate the discontinuation of LIBOR. Uncertainty and risk remain regarding the willingness and ability of issuers and lenders to include alternative rates and revised provisions
in new and existing contracts or instruments. To facilitate the transition of legacy derivatives contracts referencing LIBOR, the International Swaps and Derivatives Association, Inc. launched a protocol to
incorporate fallback provisions. There are obstacles to converting certain longer term securities to a new benchmark or benchmarks and the effectiveness of one versus multiple alternative reference rates has not been
determined. Certain proposed replacement rates, such as SOFR, are materially different from LIBOR, and will require changes to the applicable spreads. Furthermore, the risks associated with the conversion from LIBOR
may be exacerbated if an orderly transition is not completed in a timely manner.
| 34 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT |
Note 12—New accounting pronouncement
In March 2020, the Financial
Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU), ASU 2020-04, which provides optional, temporary relief with respect to the financial reporting of contracts subject to certain types of
modifications due to the planned discontinuation of the LIBOR and other IBOR-based reference rates as of the end of 2021. The temporary relief provided by ASU 2020-04 is effective for certain reference rate-related
contract modifications that occur during the period March 12, 2020 through December 31, 2022. Management expects that the adoption of the guidance will not have a material impact to the financial statements.
| SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 35 |
SPECIAL SHAREHOLDER MEETING
John Hancock Exchange-Traded Fund
Trust held a Special Meeting of Shareholders on Friday, September 9, 2022. The following proposal was considered by the shareholders:
Proposal: To elect seven Trustees as members of the Board of Trustees of the Trust.
THE PROPOSAL PASSED ON September 9, 2022
| Total votes for the nominee | Total votes withheld from the nominee | |
| Independent Trustees | ||
| Frances G. Rathke | 108,098,453.899 | 1,210,343.509 |
| Noni L. Ellison | 107,738,905.434 | 1,569,891.974 |
| Dean C. Garfield | 107,863,117.913 | 1,445,679.495 |
| Patricia Lizarraga | 107,968,362.933 | 1,340,434.475 |
| Non-Independent Trustee | ||
| Andrew G. Arnott | 108,465,487.916 | 843,309.492 |
| Marianne Harrison | 108,576,111.219 | 732,686.189 |
| Paul Lorentz | 107,724,410.239 | 1,584,387.169 |
| 36 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT |
EVALUATION OF ADVISORY AND
SUBADVISORY AGREEMENTS BY THE BOARD OF TRUSTEES
This section describes the
evaluation by the Board of Trustees (the Board) of John Hancock Exchange-Traded Fund Trust (the Trust) of the Advisory Agreement (the Advisory Agreement) with John Hancock Investment Management LLC (the Advisor) and
the Subadvisory Agreement (the Subadvisory Agreement) with Manulife Investment Management (US) LLC (the Subadvisor) with respect to each of the John Hancock Corporate Bond ETF and John Hancock Mortgage-Backed
Securities ETF (the Funds). The Advisory Agreement and Subadvisory Agreement are collectively referred to as the Agreements. Prior to the June 21-23, 2022 videoconference1 meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the
Agreements at a videoconference meeting held on May 24-25, 2022. The Trustees who are not “interested persons” of the Trust as defined by the Investment Company Act of 1940, as amended (the "1940
Act”) (the Independent Trustees) also met separately to evaluate and discuss the information presented, including with counsel to the Independent Trustees and a third-party consulting firm.
Approval of Advisory and Subadvisory
Agreements
At a videoconference meeting held on
June 21-23, 2022, the Board, including the Trustees who are not parties to any Agreement or considered to be interested persons of the Trust under the 1940 Act, reapproved for an annual period the continuation of the
Advisory Agreement between the Trust and the Advisor and the Subadvisory Agreement between the Advisor and the Subadvisor with respect to each of the Funds identified in Appendix A.
In considering the Advisory
Agreement and the Subadvisory Agreement with respect to each Fund, the Board received in advance of the meetings a variety of materials relating to each Fund, the Advisor and the Subadvisor, including comparative
performance, fee and expense information for peer groups of similar funds prepared by an independent third-party provider of fund data; performance information for the Funds’ benchmark indices; and, with respect
to the Subadvisor, comparative performance information for comparably managed accounts, as applicable; and other information provided by the Advisor and the Subadvisor regarding the nature, extent and quality of
services provided by the Advisor and the Subadvisor under their respective Agreements, as well as information regarding the Advisor’s revenues and costs of providing services to the Funds and any compensation
paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreement is considered, particular focus is given to information concerning Fund performance,
comparability of fees and total expenses, and profitability. However, the Board noted that the evaluation process with respect to the Advisor and the Subadvisor is an ongoing one. In this regard, the Board also took
into account discussions with management and information provided to the Board (including its various committees) at prior meetings with respect to the services provided by the Advisor and the Subadvisor to the Funds,
including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisor with respect to the Funds it manages. The information received and
considered by the Board in connection with the May and June meetings and throughout the year was both written and oral. The Board noted the affiliation of the Subadvisor with the Advisor, noting any potential
conflicts of interest. The Board also considered the nature, quality, and extent of the non-advisory services, if any, to be provided to the Funds by the Advisor and/or its affiliates,
including administrative services. The Board considered the Advisory Agreement and the Subadvisory Agreement separately in the course of its review. In doing so, the Board noted the respective roles of the Advisor and
Subadvisor in providing services to the Funds. In addition, although the Board approved the renewal of the Agreements for all the Funds at the June meeting, the Board considered each Fund separately.
Throughout the process, the Board
asked questions of and requested additional information from management. The Board is assisted by counsel for the Trust and the Independent Trustees are also separately assisted by independent legal counsel throughout
the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements and discussed
the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement
with respect to each Fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends
prevailing generally in the economy, the securities markets and the industry) and did not treat any single factor as determinative, and each Trustee may have attributed different weights to different factors. The
Board’s conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board’s ongoing regular review of Fund performance and operations
throughout the year.
Nature, extent and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the Funds, the Board reviewed information provided by the
Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor’s compliance and regulatory history, including its Form ADV.
The Board also noted that on a regular basis it receives and reviews information from the Trust’s Chief Compliance Officer (CCO) regarding the Funds’ compliance policies and procedures established pursuant
to Rule 38a-1 under the 1940 Act. The Board observed that the scope of services provided by the Advisor, and of the undertakings required of the Advisor in connection with those services, including maintaining and
monitoring its own and the fund’s compliance programs, risk management programs, liquidity management programs and cybersecurity programs, had expanded over time as a result of regulatory, market and other
developments. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the Funds, including, but not limited to, general supervision of and coordination of the services
provided by the
1On June 19, 2020, as a result of health and safety measures put in place to combat the global COVID-19 pandemic, the Securities and Exchange Commission issued an exemptive order
(the “Order”) pursuant to Sections 6(c) and 38(a) of the Investment Company Act of 1940, as amended (the “1940 Act”), that temporarily exempts registered investment management companies from
the in-person voting requirements under the 1940 Act, subject to certain requirements, including that votes taken pursuant to the Order are ratified at the next in-person meeting. The Board determined that reliance on
the Order was necessary or appropriate due to the circumstances related to current or potential effects of COVID-19 and therefore, the Board’s May and June meetings were held via videoconference in reliance on
the Order. This exemptive order supersedes, in part, a similar, earlier exemptive order issued by the SEC.
| SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 37 |
Subadvisor, and is also responsible for monitoring
and reviewing the activities of the Subadvisor and third-party service providers, including the Funds’ distributor. The Board also considered the significant risks assumed by the Advisor in connection with the
services provided to the Funds including entrepreneurial risk in sponsoring new Funds and ongoing risks including investment, operational, enterprise, litigation, regulatory and compliance risks with respect to all
Funds.
In considering the nature, extent,
and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor’s management and the quality of the performance of the Advisor’s duties, through
Board meetings, discussions and reports during the preceding year and through each Trustee’s experience as a Trustee of the Trust and of the other trusts in the John Hancock group of funds complex (the John
Hancock Fund Complex).
In the course of their
deliberations regarding the Advisory Agreement, the Board considered, among other things:
(a)the skills and competency with which the Advisor has in the past managed the Trust’s affairs and its subadvisory relationships, the Advisor’s oversight and monitoring of the
Subadvisor’s investment performance and compliance programs, such as the Subadvisor’s compliance with fund policies and objectives, review of brokerage matters, including with respect to trade allocation
and best execution, and the Advisor’s timeliness in responding to performance issues;
(b)the background, qualifications and skills of the Advisor’s personnel;
(c)the Advisor’s compliance policies and procedures and its responsiveness to regulatory changes and fund industry developments;
(d)the Advisor’s administrative capabilities, including its ability to supervise the other service providers for the Funds, as well as the Advisor’s oversight of any securities
lending activity, its monitoring of class action litigation and collection of class action settlements on behalf of the Funds, and bringing loss recovery actions on behalf of the Funds;
(e)the financial condition of the Advisor and whether it has the financial wherewithal to provide a high level and quality of services to the Funds;
(f)the Advisor’s initiatives intended to improve various aspects of the Trust’s operations and investor experience with the Funds; and
(g)the Advisor’s reputation and experience in serving as an investment adviser to the Trust and the benefit to shareholders of investing in funds that are part of a family of funds
offering a variety of investments.
The Board concluded that the Advisor
may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the Funds.
Investment performance. In considering each Fund’s performance, the Board noted that it reviews at its regularly scheduled meetings information about the Funds’ performance results. In connection with
the consideration of the Advisory Agreement, the Board:
(a)reviewed information prepared by management regarding the Funds’ performance;
(b)considered the comparative performance of each Fund’s respective benchmark index;
(c)considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; and
(d)took into account the Advisor’s analysis of each Fund’s performance and its plans and recommendations regarding the Trust’s subadvisory arrangements generally and with
respect to particular Funds.
The Board noted that while it found
the data provided by the independent third-party generally useful it recognized its limitations, including in particular that the data may vary depending on the end date selected and the results of the performance
comparisons may vary depending on the selection of the peer group. The Board reviewed Fund performance against each Fund’s respective benchmark and concluded that the performance of the Funds has generally been
in line with or generally outperformed the historical performance of comparable funds based on the median percentile and/or each Fund’s respective benchmark or is being monitored and reasonably addressed, where
appropriate as noted in Appendix A.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of fund data, including, among other data, each Fund’s contractual and net management fees
(and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the Fund in light of the nature, extent and quality of the
management and advisory and subadvisory services provided by the Advisor and the Subadvisor. The Board considered each Fund’s ranking within a smaller group of peer funds chosen by the independent third-party
provider, as well as the Fund’s ranking within broader groups of funds. In comparing each Fund’s contractual and net management fees to that of comparable funds, the Board noted that such fees include both
advisory and administrative costs.
The Board took into account
management’s discussion of the Funds’ expenses, including previous actions taken to reduce management fees for certain of the Funds. The Board also took into account management’s discussion with
respect to the overall management fee and the fees of the Subadvisor, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee, in each case in light of the services
rendered for those amounts and the risks undertaken by the Advisor. The Board also noted that the Advisor pays the subadvisory fees of the Funds. The Board also took into account that management had agreed to
implement an overall fee waiver across the complex, including each of the Funds, which is discussed further below. The Board also noted management’s discussion of the Funds’ expenses, as well as any
actions taken over the past several years to reduce the Funds’ operating expenses. The Board also noted that, in addition, the Advisor is currently waiving fees and/or reimbursing expenses with respect to each
Fund. The Board also took into account that management has approved the implementation of breakpoints in each Fund’s subadvisory fee schedule. The Board reviewed information provided by the Advisor concerning
the investment advisory fees charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the John Hancock Fund Complex) having similar investment
| 38 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT |
mandates, if any. The Board considered any
differences between the Advisor’s and Subadvisor’s services to a Fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee paid with respect to each
of the Funds is reasonable in light of the nature, extent and quality of the services provided to the Funds under the Advisory Agreement.
Profitability/Fall out benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor’s relationship with the Trust, the
Board:
(a)reviewed financial information of the Advisor;
(b)reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to each Fund;
(c)received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole and with respect to each Fund;
(d)received information with respect to the Advisor’s allocation methodologies used in preparing the profitability data and considered that the Advisor hired an independent
third-party consultant to provide an analysis of the Advisor’s allocation methodologies;
(e)considered that the John Hancock insurance companies that are affiliates of the Advisor, as shareholders of the Trust directly or through their separate accounts, receive certain tax
credits or deductions relating to foreign taxes paid and dividends received by certain Funds of the Trust and noted that these tax benefits, which are not available to participants in qualified retirement plans under
applicable income tax law, are reflected in the profitability analysis reviewed by the Board;
(f)considered that the Advisor also provides administrative services to the Funds on a cost basis pursuant to an administrative services agreement;
(g)noted that the fund’s Subadvisor is an affiliate of the Advisor;
(h)noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the Funds;
(i)noted that the subadvisory fee is paid by the Advisor;
(j)noted that the Advisor also pays the Subadvisor a license fee in connection with each Fund’s use of its Underlying Index;
(k)considered the Advisor’s ongoing costs and expenditures necessary to improve services, meet new regulatory and compliance requirements, and adapt to other challenges impacting the
fund industry; and
(l)considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to each Fund and the risks that it assumes as
Advisor, including entrepreneurial, operational, reputational, litigation and regulatory risk.
Based upon its review, the Board
concluded that the level of profitability, if any, of the Advisor and its affiliates from their relationship with each Fund was reasonable and not excessive.
Economies of scale. In considering the extent to which a Fund may realize any economies of scale and whether fee levels reflect these economies of scale for the benefit of Fund shareholders, the
Board:
(a)considered that the Advisor has contractually agreed to waive a portion of its management fee for certain funds of the John Hancock Fund Complex, including the Funds (the participating
portfolios) or otherwise reimburse the expenses of the participating portfolios (the reimbursement). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the reimbursement
is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each Fund;
(b)the Board also took into account management’s discussion of each Fund’s advisory fee structure; and
(c)considered the effect of the Funds’ growth in size on their performance and fees. The Board also noted that if the Funds’ assets increase over time, the Funds may realize
other economies of scale.
Approval of Subadvisory Agreement
In making its determination with
respect to approval of the Subadvisory Agreement, the Board reviewed:
(1)information relating to the Subadvisor’s business, including current subadvisory services to the Trust (and other funds in the John Hancock Fund Complex);
(2)the historical and current performance of each Fund and comparative performance information relating to the Fund’s benchmark and comparable funds; and
(3)the subadvisory fee for each Fund, including the approved breakpoints for each of the Funds and to the extent available, comparable fee information prepared by an independent
third-party provider of fund data.
Nature, extent, and quality of services. With respect to the services provided by the Subadvisor with respect to each Fund, the Board received information provided to the Board by the Subadvisor, including the Subadvisor’s
Form ADV, as well as took into account information presented throughout the past year. The Board considered the Subadvisor’s current level of staffing and its overall resources, as well as received information
relating to the Subadvisor’s compensation program. The Board reviewed the Subadvisor’s history and investment experience, as well as information regarding the qualifications, background, and
responsibilities of the Subadvisor’s investment and compliance personnel who provide services to the Funds. The Board also considered, among other things, the Subadvisor’s compliance program and any
disciplinary history. The Board also considered the Subadvisor’s risk assessment and monitoring process. The Board reviewed the Subadvisor’s regulatory history, including whether it was involved in any
regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as
| SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 39 |
appropriate. The Board noted that the Advisor
conducts regular, periodic reviews of the Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust’s CCO and his staff
conduct regular, periodic compliance reviews with the Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of the Subadvisor and
procedures reasonably designed to assure compliance with the federal securities laws. The Board also took into account the financial condition of the Subadvisor.
The Board considered the
Subadvisor’s investment process and philosophy. The Board took into account that the Subadvisor’s responsibilities include the development and maintenance of an investment program for each Fund that is
consistent with the Fund’s investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance
controls related to performance of these services. The Board also received information with respect to the Subadvisor’s brokerage policies and practices, including with respect to best execution and soft
dollars.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with each Fund, the Board noted that the fees under the
Subadvisory Agreement are paid by the Advisor and not the Funds.
The Board also received information
and took into account any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreement.
In addition, the Board considered
other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor’s relationship with the Funds, such as the opportunity to provide advisory services to additional funds in
the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the Fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays subadvisory fees to the Subadvisor. As noted above, the Board also considered each
Fund’s subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the Funds as included in the report prepared by the independent third-party provider of fund data, to the
extent available. The Board noted that the limited size of the Lipper peer groups were not sufficient for comparative purposes. The Board also took into account the subadvisory fees paid by the Advisor to the
Subadvisor with respect to the Funds to fees charged by each Fund’s Subadvisor to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered each Fund’s performance as compared to the Fund’s respective peer group median and the benchmark index and noted that the Board reviews
information about the Fund’s performance results at its regularly scheduled meetings. The Board noted the Advisor’s expertise and resources in monitoring the performance, investment style, and
risk-adjusted performance of the Subadvisor. The Board was mindful of the Advisor’s focus on the Subadvisor’s performance. The Board also noted the Subadvisor’s long-term performance record for
similar accounts, as applicable.
The Board’s decision to
approve the Subadvisory Agreement with respect to each Fund was based on a number of determinations, including the following:
(1)the Subadvisor has extensive experience and demonstrated skills as a manager;
(2)the performance of the Funds have generally been in line with or generally outperformed the historical performance of comparable funds, based on the median percentile, and/or each
Fund’s respective benchmark or is being monitored and reasonably addressed, where appropriate as noted in Appendix A;
(3)the subadvisory fees are reasonable in relation to the level and quality of services being provided under the Subadvisory Agreement; and
(4)that the subadvisory fees are paid by the Advisor and not the Funds and the Board has approved the implementation of breakpoints to each of the Fund’s subadvisory fee schedule.
Additional information relating to
each Fund’s fees and expenses and performance that the Board considered in approving the Advisory Agreement and Subadvisory Agreement for a particular Fund is set forth in Appendix A.
***
Based on the Board’s
evaluation of all factors that the Board deemed to be material, including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees,
concluded that renewal of the Advisory Agreement and the Subadvisory Agreement with respect to each Fund would be in the best interest of each of the respective Funds and its shareholders. Accordingly, the Board, and
the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreement with respect to each Fund for an additional one-year period.
| 40 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT |
APPENDIX A
| Portfolio (subadvisors) | Performance of fund, as of 12.31.2021 | Fees and expenses | Comments |
| Corporate Bond ETF(Manulife Investment Management (US) LLC) | Benchmark Index – The fund underperformed for the period since March 31, 2021.Morningstar Category – The fund underperformed the peer group median for the period since March 31, 2021. | Subadvisor fee comparative data not provided due to limited size of Lipper peer group for this purpose.Net management fees for this fund are lower than the peer group median.Net total expenses for this fund are lower than the peer group median. | The Board took into account management’s discussion of the factors that contributed to the fund’s performance relative to the benchmark index and relative to the peer group median for the period since March 31, 2021, including the impact of past and current market conditions on the fund’s strategy and management’s outlook for the fund.The Board also noted the relatively limited performance history of the fund. |
| Mortgage-Backed Securities ETF(Manulife Investment Management (US) LLC) | Benchmark Index - The fund outperformed for the period since August 31, 2021.Morningstar Category - The fund outperformed the peer group median for the period since August 31, 2021. | Subadvisor fee comparative data not provided due to limited size of Lipper peer group for this purpose.Net management fees for this fund are lower than the peer group median.Net total expenses for this fund are lower than the peer group median. | The Board took into account management’s discussion of the fund’s performance, including the favorable performance relative to the benchmark index and to the peer group median for the period since August 31, 2021.The Board also noted the relatively limited performance history of the fund. |
| SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 41 |
EVALUATION OF ADVISORY AND
SUBADVISORY AGREEMENTS BY THE BOARD OF TRUSTEES
Approval of Advisory and Subadvisory
Agreements
At a meeting held on September
20-22, 2022, at which Trustees were present and participated in person, the Board of Trustees (the Board) of John Hancock Exchange-Traded Fund Trust (the Trust), including all of the Trustees who are not parties to
any Agreement or considered to be interested persons of the Trust under the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees), approved the establishment of John Hancock U.S. High
Dividend ETF (the New Fund). The Trustees who are not “interested persons” of the Trust as defined by the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees) also met
separately to evaluate and discuss the information presented, including with counsel to the Independent Trustees.
This section describes the
evaluation by the Board of:
(a)an amendment to the advisory agreement between the Trust and John Hancock Investment Management LLC (the Advisor) (the Advisory Agreement); and
(b)an amendment to the subadvisory agreement between the Advisor and Manulife Investment Management (US) LLC (the Subadvisor) with respect to the New Fund (the Subadvisory Agreement).
In considering the amendments to the
Advisory Agreement and the Subadvisory Agreement with respect to the New Fund, the Board received in advance of the meeting a variety of materials relating to the New Fund, the Advisor and the Subadvisor, including
comparative fee and expense information for a group of comparable exchange-traded funds, and other information regarding the nature, extent, and quality of services to be provided by the Advisor and the Subadvisor
under their respective Agreements, as well as information regarding the Advisor’s anticipated revenues and costs of providing services in connection with its proposed relationship to the New Fund and any
compensation paid to affiliates of the Advisor. The Board also took into account discussions with management and information provided to the Board (including its various committees) at prior meetings with respect to
the services provided by the Advisor and the Subadvisor to other John Hancock Funds, including other exchange-traded funds (the Funds), including quarterly performance reports prepared by management containing reviews
of investment results, and periodic presentations from the Subadvisor with respect to the other Funds that it manages. The information received and considered by the Board in connection with the September meeting and
throughout the year (with respect to other Funds) was both written and oral. The Board noted the affiliation of the Subadvisor with the Advisor, noting any potential conflicts of interest. The Board also considered
the nature, quality, and extent of the non-advisory services, if any, to be provided to the New Fund by the Advisor and/or its affiliates, including administrative services. The Board also took into account
information with respect to the New Fund presented at the June 21-23, 2022 meeting. The Board considered the Advisory Agreement and the Subadvisory Agreement separately in the course of its review. In doing so, the
Board noted the respective roles of the Advisor and Subadvisor in providing services to the New Fund.
Throughout the process, the Board
asked questions of and were afforded the opportunity to request additional information from management. The Board is assisted by counsel for the Trust, and the Independent Trustees are also separately assisted by
independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed
Advisory Agreement and Subadvisory Agreement and discussed the proposed Advisory Agreement and Subadvisory Agreement in private sessions with their independent legal counsel at which no representatives of management
were present.
Approval of Advisory Agreement
In approving the Advisory Agreement
with respect to the New Fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends
prevailing generally in the economy, the securities markets and the industry) and did not treat any single factor as determinative, and each Trustee may have attributed different weights to different factors. The
Board’s conclusions may have been based in part on its consideration of the advisory and subadvisory arrangements for other Funds in prior years.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services to be provided to the New Fund, the Board reviewed information provided
by the Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor’s compliance and regulatory history, including its Form
ADV. The Board also noted that on a regular basis it receives and reviews information from the Trust’s Chief Compliance Officer (CCO) regarding the Funds’ compliance policies and procedures established
pursuant to Rule 38a-1 under the 1940 Act. The Board considered the investment strategy proposed for the New Fund. The Board observed that the scope of services provided by the Advisor, and of the undertakings
required of the Advisor in connection with those services, including maintaining and monitoring its own and the New Fund’s compliance programs, risk management programs, liquidity risk management programs and
cybersecurity programs, had expanded over time as a result of regulatory, market and other developments. The Board considered that the Advisor would be responsible for the management of the day-to-day operations of
the New Fund, including, but not limited to, general supervision and coordination of the services to be provided by the Subadvisor, and also would be responsible for monitoring and reviewing the activities of the
Subadvisor and third-party service providers, including the New Fund’s distributor. The Board also considered the significant risks assumed by the Advisor in connection with the services to be provided to the
New Fund including entrepreneurial risk in sponsoring new funds and ongoing risks including investment, operational, enterprise, litigation, regulatory and compliance risks with respect to all funds.
In considering the nature, extent,
and quality of the services to be provided by the Advisor, the Trustees also took into account their knowledge of the Advisor’s management of other Funds and the quality of the performance of the Advisor’s
duties with respect to other Funds, through Board meetings, discussions and reports during the preceding year and through each Trustee’s experience as a Trustee of the Trust and of the other trusts in the John
Hancock group of funds complex (the John Hancock Fund Complex).
| 42 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT |
In the course of their
deliberations regarding the Advisory Agreement, the Board considered, among other things:
(a)the skills and competency with which the Advisor has in the past managed the Trust’s affairs and its subadvisory relationships, including those with the Subadvisor, the
Advisor’s oversight and monitoring of the Subadvisor’s investment performance and compliance programs, such as the Subadvisor’s compliance with fund policies and objectives, review of brokerage
matters, including with respect to trade allocation and best execution and the Advisor’s timeliness in responding to performance issues;
(b)the background, qualifications and skills of the Advisor’s personnel;
(c)the Advisor’s compliance policies and procedures and its responsiveness to regulatory changes and fund industry developments;
(d)the Advisor’s administrative capabilities, including its ability to supervise the other service providers for the New Fund, as well as the Advisor’s oversight of any
securities lending activity, its monitoring of class action litigation and collection of class action settlements on behalf of the New Fund, and bringing loss recovery actions on behalf of the New Fund;
(e)the financial condition of the Advisor and whether it has the financial wherewithal to provide a high level and quality of services to the New Fund;
(f)the Advisor’s initiatives intended to improve various aspects of the Trust’s operations and investor experience with the New Fund; and
(g)the Advisor’s reputation and experience in serving as an investment advisor to the Trust, and the benefit to shareholders of investing in funds that are part of a family of funds
offering a variety of investments.
The Board concluded that the Advisor
may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the New Fund.
Investment performance. In connection with its consideration of the Advisory Agreement, the Board considered the New Fund’s proposed investment strategy and processes. The Board also considered the
investment performance of other Funds managed by the Advisor as well as back-tested performance information of the proposed strategy for the New Fund. The Board also considered the experience of the portfolio
management team that would be responsible for managing the New Fund’s assets.
Fees and Expenses. The Board reviewed comparative information including, among other data, the New Fund’s anticipated total net expenses as compared to similarly situated exchange-traded funds deemed to
be comparable to the New Fund in light of the nature, extent and quality of the management and advisory and subadvisory services provided by the Advisor and the Subadvisor.
The Board took into account
management’s discussion of the New Fund’s anticipated expenses. The Board also took into account management’s discussion with respect to the proposed management fee and the fees of the Subadvisor,
including the amount of the advisory fee to be retained by the Advisor after payment of the subadvisory fee, in each case in light of the services rendered for those amounts and the risks undertaken by the Advisor.
The Board also noted that the Advisor, and not the New Fund, would be responsible for paying the subadvisory fees. The Board also took into account that management has agreed to implement an overall fee waiver across
a number of funds in the complex, including the New Fund, which is discussed further below. The Board also noted that the Advisor has contractually agreed to waive fees and/or reimburse expenses with respect to the
New Fund for a specified period. The Board reviewed information provided by the Advisor concerning the investment advisory fee charged by the Advisor or one of its advisory affiliates to other clients (including other
funds in the John Hancock Fund Complex) having similar investment mandates, if any. The Board considered any differences between the Advisor’s and Subadvisor’s services to the fund and the services they
provide to other comparable clients or funds. The Board concluded that the advisory fees to be paid by the New Fund are reasonable in light of the nature, extent and quality of the services expected to be provided to
the New Fund under the Advisory Agreement.
Profitability/Fall Out Benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor’s relationship with the New Fund, the
Board:
(a)noted that because the New Fund was not yet in existence, no actual revenue, cost or profitability data was available for the Board to review, although the Board received information
from the Adviser on its projected profitability with respect to the New Fund;
(b)reviewed and considered information presented by the Advisor regarding the advisory fees and advisory spreads prior to distribution, operations and overhead for the New Fund;
(c)noted that the Advisor will derive reputational and other indirect benefits from providing advisory services to the New Fund;
(d)noted that the subadvisory fee for the New Fund will be paid by Advisor;
(e)noted that the New Fund’s Subadvisor is an affiliate of the Advisor;
(f)considered the Advisor’s ongoing costs and expenditures necessary to improve services, meet new regulatory and compliance requirements, and adapt to other challenges impacting the
fund industry; and
(g)considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it will provide to the New Fund and the risks that it assumes
as Advisor, including entrepreneurial, operational, reputational, litigation and regulatory risk.
Based upon its review, the Board
concluded that the anticipated level of profitability, if any, of the Advisor and its affiliates from their relationship with the New Fund is reasonable and not excessive.
| SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 43 |
Economies of Scale. In considering the extent to which economies of scale would be realized if the New Fund grows and whether fee levels reflect these economies of scale for the benefit of fund shareholders,
the Board:
(a)considered that the Advisor has contractually agreed to waive a portion of its management fee for certain funds of the John Hancock Fund Complex, including the New Fund (the
participating portfolios) or otherwise reimburse the expenses of the participating portfolios (the reimbursement). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the
reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund;
(b)took into account management’s discussion of the New Fund’s advisory fee structure; and
(c)the Board also noted that if the New Fund’s assets increase over time, the New Fund may realize other economies of scale.
Approval of Subadvisory Agreement
In making its determination with
respect to approval of the Subadvisory Agreement, the Board reviewed:
(a)information relating to the Subadvisor’s business, including current subadvisory services to the Trust (and other funds in the John Hancock Fund Complex); and
(b)the proposed subadvisory fee for the New Fund, including any breakpoints.
Nature, Extent, and Quality of Services. With respect to the services to be provided by the Subadvisor, the Board received and reviewed information provided to the Board by the Subadvisor with respect to the New Fund and took into
account information presented throughout the past year with respect to Funds in the complex managed by the Advisor and subadvised by the Subadvisor. In this regard, the Board considered the Subadvisor’s current
level of staffing and its overall resources, as well as considered information relating to the Subadvisor’s compensation program. The Board reviewed the Subadvisor’s history and investment experience, as
well as information regarding the qualifications, background, and responsibilities of the Subadvisor’s investment and compliance personnel who will provide services to the New Fund. The Board also considered the
Subadvisor’s risk assessment and monitoring processes. The Board reviewed the Subadvisor’s regulatory history, including whether it was involved in any regulatory actions or investigations as well as
material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular periodic reviews of the Subadvisor and its operations in regard to the
Funds, including regarding investment processes and organizational and staffing matters. The Board also noted that the Trust’s CCO and his staff conduct regular, periodic compliance reviews with the Subadvisor
and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of the Subadvisor and procedures reasonably designed to assure compliance with the
federal securities laws. The Board also took into account the financial condition of the Subadvisor.
The Board considered the
Subadvisor’s investment process and philosophy. The Board also considered the experience of the portfolio management team that would be responsible for managing the New Fund’s assets.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the New Fund, the Board noted that the fees under the
Subadvisory Agreement will be paid by the Advisor and not the New Fund. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the
Subadvisory Agreement.
In addition, the Board considered
other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor’s relationship with the New Fund, such as the opportunity to provide advisory services to additional funds
in the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the New Fund will pay an advisory fee to the Advisor and that, in turn, the Advisor will pay a subadvisory fee to the Subadvisor.
Subadvisor performance. As noted above, the Board considered the New Fund’s investment strategy and processes. The Board noted the Advisor’s expertise and resources in monitoring the performance,
investment style and risk-adjusted performance of the Subadvisor. The Board was mindful of the Advisor’s focus on the Subadvisor’s performance.
The Board’s decision to
approve the Subadvisory Agreement was based on a number of determinations, including the following:
(1)the Subadvisor has extensive experience and demonstrated skills as a manager, and currently subadvises other Funds in the complex and the Board is generally satisfied with the
Subadvisor’s management of these Funds, and may reasonably be expected to provide a high quality of investment management services to the New Fund;
(2)the proposed subadvisory fees are reasonable in relation to the level and quality of services to be provided under the Subadvisory Agreement; and
(3)that the subadvisory fees will be paid by the Advisor not the New Fund.
***
Based on the Board’s
evaluation of all factors that it deemed to be material, including those factors described above, and assisted by the advice of independent legal counsel, the Board, including the Independent Trustees, concluded that
approval of the Advisory Agreement and the Subadvisory Agreement would be in the best interest of the New Fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the
amendments to the Advisory Agreement and Subadvisory Agreement.
| 44 | JOHN HANCOCK ETFS | SEMIANNUAL REPORT |
More information
† Non-Independent Trustee
* Member of the Audit Committee
^ Elected to serve as Independent Trustee effective
as of September 9, 2022.
‡ Elected to serve as Non-Independent Trustee
effective as of September 9, 2022.
The funds’ proxy voting
policies and procedures, as well as the funds’ proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at
sec.gov or on our website.
All of the funds’ holdings as
of the end of the third month of every fiscal quarter are filed with the SEC on Form N-PORT within 60 days of the end of the fiscal quarter. The funds’ Form N-PORT filings are available on our website and the
SEC’s website, sec.gov.
We make this information on your
funds’, as well as monthly portfolio holdings, and other funds’ details available on our website at jhinvestments.com/etf or by calling 800-225-6020.
| You can also contact us: | |
| 800-225-6020 | Regular mail: |
| jhinvestments.com/etf | John Hancock Investment Management 200 Berkeley Street Boston, MA 02116 |
| SEMIANNUAL REPORT | JOHN HANCOCK ETFS | 45 |
John Hancock family of funds
A fund’s investment
objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. To obtain a prospectus, contact your financial
professional, call John Hancock Investment Management at 800-225-5291, or visit our website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
John Hancock ETF shares are bought
and sold at market price (not NAV), and are not individually redeemed from the fund. Brokerage commissions will reduce returns.
John Hancock ETFs are distributed by
Foreside Fund Services, LLC, and are subadvised by Manulife Investment Management (US) LLC or Dimensional Fund Advisors LP. Foreside is not affiliated with John Hancock Investment Management Distributors LLC, Manulife
Investment Management (US) LLC or Dimensional Fund Advisors LP.
Dimensional Fund Advisors LP
receives compensation from John Hancock in connection with licensing rights to the John Hancock Dimensional 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.
