THEMATIC Harnessing the power INVESTING of global megatrends An unconstrained equity fund
Investing in global equities using a thematic approach is very different from traditional investment styles. The managers of John Hancock Global Thematic Opportunities Fund identify themes underpinned by secular megatrends set to structurally change the way we live, how society operates, and how business gets done. Stocks representing different themes are selected based on how well the managers believe they’re positioned for the future as it’s redefined by these deep structural changes.
Megatrends play out over decades Megatrends are powerful forces that are transforming the future of our world and the global investment landscape. They range from technological paradigm shifts like the network economy to long-term changes in global demographics.
High im act Megatrends
T en s
Mic ot en s
Tem o a henomena ea s
Megatrends we’ve identified Pictet currently has identified 14 megatrends, each of which we believe will drive future investment opportunities.
The increasing connectedness of business processes and economic activity, enabling the Network economy transfer of knowledge and goods directly from provider to receiver The ability to meet current needs without compromising the ability of future generations to Sustainability meet theirs Knowledge is becoming an economic resource in the way raw materials, labor, and capital Knowledge society have traditionally been as society transitions from the industrial age to the information age Consumers are increasingly focusing on the intangible qualities of products and services, such Immaterialization as their ethical or aesthetic appeal, rather than their material attributes
Democratization More power to the people—politically, economically, and culturally
The increase in the rate of technological progress over time, resulting in products having Acceleration and complexity a shorter shelf life
Technology development The application of science and knowledge to commercial or industrial processes
Megatrends are subject to change over time. 2 3 Themes: investable ideas where megatrends converge John Hancock Global Thematic Opportunities Fund offers exposure through a single portfolio to the best ideas of Pictet Asset Management’s global thematic approach. The fund aims to deliver risk-adjusted returns that exceed global equity market returns by investing in those companies that the managers consider most likely to maintain competitive advantages in the future.
Clean energy: a growth opportunity as the world transitions to a lower-carbon economy The clean energy theme is supported by five megatrends—economic growth, focus on health, sustainability, technology development, and globalization.
Economic g owth Polarization Democratization
Acceleration and complexity
G o a i ation Knowledge society
oc s on hea th Demographic development
Commercialization Techno og eve o ment
Network economy Individualization Immaterialization
S staina i it
Megatrends we’ve identified Pictet currently has identified 14 megatrends, each of which we believe will drive future investment opportunities.
Economic growth The increase in the world’s capacity to produce goods and services
The evolution of a society once characterized by collective norms to one in which freedom Individualization of choice and the expression of one’s individuality are more dominant The process of increasing the efficiency of a sector by transforming it into a Commercialization commercial business The increasing global connectedness and flow of people, capital, products, services, Globalization information, technology, and culture
Polarization When extremes grow at the expense of the middle ground
Aging populations, rising wealth, and technological advances are making health a major Focus on health source of expenditure for governments, organizations, and individuals across the world The widening demographic divide between countries with younger workers and those, Demographic development mostly in the West, with an aging and shrinking workforce
2 3 12 themes in a single portfolio
A rigorous approach is required to identify and prioritize investable themes that sit at the intersections of multiple megatrends. Pictet has identified a series of 12 investable themes, from which the portfolio managers select the best ideas for John Hancock Global Thematic Opportunities Fund.
Biotech Harness the power of medical innovation
Clean energy Join the transition to a lower-carbon economy
Digital Put the digital revolution to work in your portfolio
Global environmental Harness growth opportunities while safeguarding the environment opportunities
Health Support solutions that improve people’s quality of life
Nutrition Help prevent and cure disease
Premium brands Share in the potential growth of the global aspirational brands market
Robotics Discover the next frontier of technological achievement
Security Support the solutions that create a safer world
Harness the investment potential of sustainable, better-connected cities Smart city of tomorrow
Timber One of the world’s most environmentally friendly, renewable resources
Water Water is an essential natural resource—and demand is rapidly rising
4 5 Thematic portfolio construction Dynamic industries, specialized companies The fund doesn’t invest in every segment of the economy. Instead, it focuses on the world’s fastest-growing sectors—dynamic industries such as clean energy and robotics—as well as themes built around essential resources, such as water. Portfolio construction combines qualitative and quantitative techniques Rapidly growing industries are fertile ground for thematic investments
➤ Clean energy—share of global installed capacity1 (%) Stocks in the aggregate 1,650 thematic universe
300 Best ideas defined by Wind 13 the portfolio managers 7 2015 2040 Highest ranked stocks 4 330 in quant model Solar 29 Companies on the 110 short list of investment
➤ Robotics—global robotic market2 (USD billion) 50 Stocks in a final portfolio Personal 10% CAGR3 Commercial Industrial
2000 2005 2010 2015E 2020E 2025E Unlike many other equity funds, John Hancock Global ➤ Water—finite global supply is under stress due to economic growth and Thematic Opportunities other megatrends Fund invests mainly in focused companies that are US$1 trillion4 Size of water market by 2025 highly exposed to underlying themes; these can be smaller, US$14 trillion Investment needed by 2030 to stabilize water supply in Asia and South America specialized companies—firms with specific expertise and Global water infrastructure investment a clear competitive edge. US$20 trillion needed by 2025–2030
1 International Energy Agency, Pictet Asset Management, February 2018. 2 Boston Consulting Group, Pictet Asset Management, September 2014. 3 Compound annual growth rate (CAGR) is the year-over-year growth rate applied to an investment or other part of a company’s activities over a multiple-year period. 4 Water market data from GWI, Global Water Market, 2015.
4 5 Why invest thematically?
Thematic investing focuses on the long term, which helps investors benefit from secular growth opportunities across a diverse range of regions, industries, and companies. In this way, it offers several key benefits to investors.
1 Alpha generation for the long term With a portfolio of stocks that are leveraged to megatrends, thematic investing can offer exposure to the future generations of market leaders.
2 Underappreciated value opportunities Investing in stocks that are well positioned to benefit from long-term secular growth trends can mean focusing on opportunities whose value has yet to be captured by the market.
3 Portfolio diversification Secular Thematic investment strategies can cross traditional growth equity investing boundaries, including sectors and geographies. By being benchmark-agnostic and conviction-weighted, thematic strategies may have low
overlap with global equity indexes. Thematic focus Benchmark- Value agnostic
Diversification does not guarantee a profit or eliminate the risk of a loss.
About Pictet Asset Management
Pictet Asset Management is an independent asset manager, overseeing over US$183 billion as of March 31, 2020, for clients across a range of equity, fixed- income, alternative, and multi-asset products. Pictet provides specialist investment services through segregated accounts and investment funds to some of the world’s largest pension funds, financial institutions, sovereign wealth funds, intermediaries, and their clients.
6 Develop your thematic strategy
Many investors who are new to thematic investing may be reluctant to overhaul their portfolios, which are typically tied to traditional benchmarks. The good news is that a thematic fund like John Hancock Global Thematic Opportunities Fund can complement an existing portfolio.
Thematic investing expertise Pictet has been a pioneer in thematic investment for more than 20 years. Based in Geneva, Switzerland, Pictet provides specialist investment services to some of the world’s largest and most sophisticated investors. With John Hancock Global Thematic Opportunities Fund, we bring Pictet’s institutional market leadership and innovative thematic approach to the individual U.S.-based investor.
Benefit from a network of experts Each theme in the fund is supported by a team of investment experts. They’re neither generalists nor order-takers but seasoned specialists who’ve come to know their themes and related industries over many years and market cycles.
These teams work in collaboration with megatrend experts, a distinguished group of industry practitioners and academics who’ve developed a deep understanding of the structural trends transforming our world.
Identify future trends • Advisory boards Evaluate the Investment experts Industry practitioners regulatory environment Pictet’s and leading academics investment managers • Collaborate on defining key subthemes
7 John Hancock Investment Management
A trusted brand John Hancock Investment Management is a premier asset manager with a heritage of financial stewardship dating back to 1862. Helping our shareholders pursue their financial goals is at the core of everything we do. It’s why we support the role of professional financial advice and operate with the highest standards of conduct and integrity.
A better way to invest We serve investors globally through a unique multimanager approach: We search the world to find proven portfolio teams with specialized expertise for every strategy we offer, then we apply robust investment oversight to ensure they continue to meet our uncompromising standards and serve the best interests of our shareholders.
Results for investors Our unique approach to asset management enables us to provide a diverse set of investments backed by some of the world’s best managers, along with strong risk-adjusted returns across asset classes.
Thematic investing involves the risk that long-term market themes are incorrectly identified or that the securities chosen to represent those themes underperform. Foreign investing, especially in emerging markets, has additional risks, such as currency and market volatility and political and social instability. A portfolio concentrated in one sector or that holds a limited number of securities may fluctuate more than a diversified portfolio. ADRs, GDRs, and EDRs (American depositary receipts, global depositary receipts, and European depositary receipts) may carry those same risks because the value of a depositary receipt is dependent on the market price of the underlying foreign equity security. The use of hedging and derivatives could produce disproportionate gains or losses and may increase costs. Owning an ETF generally reflects the risks of owning the underlying securities it is designed to track. REITs may decline in value, just like direct ownership of real estate. The price of equity securities may decline due to changes in a company’s financial condition or overall market conditions. Liquidity—the extent to which a security may be sold or a derivative position closed without negatively affecting its market value, if at all—may be impaired by reduced trading volume, heightened volatility, rising interest rates, and other market conditions. Please see the fund’s prospectus for additional risks. Request a prospectus or summary prospectus from your financial professional, by visiting jhinvestments.com, or by calling us at 800-225-5291. The prospectus includes investment objectives, risks, fees, expenses, and other information that you should consider carefully before investing.
Connect with John Hancock Investment Management: @JH_Investments
John Hancock Investment Management Distributors LLC Member FINRA, SIPC 200 Berkeley Street Boston, MA 02116 800-225-5291 jhinvestments.com NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE. NOT INSURED BY ANY GOVERNMENT AGENCY. MF1291746 GTOBR 8/20