SEC Company Response from JOHN HANCOCK MUNICIPAL SECURITIES TRUST (CIK 0000857769) — Jan 7, 2020
JOHN HANCOCK MUNICIPAL SECURITIES TRUST (CIK 0000857769)
Date: Jan. 7, 2020 · CIK: 0000857769 · Accession: 0001145443-20-000018
AI Filing Summary & Sentiment
File numbers found in text: 811-00560, 811-02402, 811-02485, 811-03006, 811-04651, 811-05968, 811-05979, 811-21777, 811-21779, 811-22733
Letter
VIA EDGAR Division of Investment Management Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 02549 Attention: Jeff Long John Hancock Bond Trust N-CSR for the Period Ended May 31, 2019 and Form N-1A effective October 1, 2019, File No. 811-03006 John Hancock Sovereign Bond Fund N-CSR for the Period Ended May 31, 2019 and Form N-1A effective October 1, 2019, File No. 811-02402 John Hancock California Tax-Free Income Fund N-CSR Filing for the Period Ended May 31, 2019 and Form N-1A effective October 1, 2019, File No. 811-05979 John Hancock Funds II Form N-CSR for the Periods Ended July 31, 2019 and August 31, 2019 and Form N-1A effective December 1, 2019 and January 1, 2019; File No. 811-21779
Re:
Dear Mr. Long:
This letter responds to the comments of the Staff of the Securities and Exchange Commission (“SEC”), which were conveyed to us by telephone on December 2, 2019 with respect to the filings on Form N-CSR and Form N-1A for the John Hancock Funds listed on Annex A, attached hereto. The Staff’s comments are set forth below, each followed by the respective fund’s response.
1.
Comment: The following funds had significant investments that reference LIBOR rates: John Hancock Funds II Short Duration Credit Opportunities, John Hancock Funds II Floating Rate Income Fund, John Hancock Funds II High Yield Fund, and John Hancock Bond Trust High Yield Fund.
Securities and Exchange Commission January 6, 2020 Page 2 of 7
Should the discontinuation of LIBOR be listed as a principal risk in the prospectus for the applicable funds?
Response: We plan to include risk disclosure related to the discontinuation of LIBOR for relevant funds beginning with our January 1, 2020 prospectus updates.
2. Comment: For John Hancock Funds II Income Allocation Fund, the prospectus effective January 1, 2019 reflects the same expenses for Management fee, Rule 12b-1 fees, Other expenses, and Acquired fund fees and expenses in the fee table for Class I and Class R6 but “Total annual fund operating expenses” differ.
Response: The total gross and total net operating expense ratios are correct; however for Class R6 “Other Expenses” had a typographical error and was overstated. Other expense ratio of 1.65% should have been 1.55%. The annual prospectus update for the fund will be effective January 1, 2020.
3. Comment: The investment objective for John Hancock Funds II Disciplined Value Alternative Yield Fund involves a covered call option strategy. Please consider also stating that with this strategy the fund may give up the right to benefit from potential price increases.
Response: We will include this risk disclosure in the annual prospectus update.
4. Comment: John Hancock Funds II Global Absolute Return Strategies Fund has significant investments in derivatives; however the Discussion of fund performance does not discuss the impact of investing in derivatives.
Response: The impact on results for each of the strategies discussed in the Discussion of fund performance is inclusive of any derivatives included within that strategy. For example, the Canadian interest rates strategy discussed as having a positive impact on performance is inclusive of both long portfolio positions and derivatives which make up that specific investment strategy. In the future, we will explicitly state that the discussion includes the effect of the derivatives utilized to meet the specific strategy being implemented, when applicable.
5. Comment: The Other liabilities and accrued expenses amount on the Statement of Assets and Liabilities for Multifactor Consumer Staples ETF and Multifactor Utilities ETF appears to be significant. Are there any material liabilities or expenses that should broken out?
Response: The balance for each of the funds is comprised of third-party fund accounting and custody expenses, audit expense, printing expense, and other miscellaneous expenses. We do not consider any of these balances to be individually material to the fund or requiring a separate line item on the Statement of Assets and Liabilities.
6. Comment: The portfolio for John Hancock Funds II Emerging Markets Debt Fund reflects a maturity date of 6-5-15 for Petrobras Global Finance BV. Is this bond defaulted?
Response: The maturity date for this security is June 5, 2115.
7. Comment: Does John Hancock Funds II Floating Rate Income Fund hold any covenant lite term loans, and if so, is the risk of investing in these types of loans adequately disclosed in the prospectus?
Response: We will include this risk disclosure in the annual prospectus update.
Securities and Exchange Commission January 6, 2020 Page 3 of 7
8. Comment: Several funds include an Investments in affiliates table. The beginning amount, acquisitions, disposals, and ending amount should be based on value and not shares.
Response: We are in process of updating the presentation of this table to confirm with the updated guidance. This update will be presented beginning with our November 30, 2019 N-CSR filing.
The Staff has requested that the funds provide the following representations in their response to the Staff’s comments:
The funds listed in Annex A each acknowledges that:
1. It is responsible for the adequacy and accuracy of the disclosure in its Form N-CSR filings;
2. Staff comments or changes to disclosure in response to Staff comments in the filings reviewed by the Staff do not foreclose the SEC from taking any action with respect to filings on Form N-CSR; and
3. It may not assert Staff comments as a defense in any proceeding initiated by the SEC or any person under the federal securities laws of the United States.
* * *
We hope that these foregoing responses adequately address the Staff’s comments. If you have any questions, please do not hesitate to contact me at (617) 663-4497.
Sincerely,
/s/ Salvatore Schiavone
Salvatore Schiavone
Show Raw Text
CORRESP 1 filename1.htm John Hancock Group of Funds 200 Berkeley Street Boston, Massachusetts 02116 January 6, 2020 VIA EDGAR Division of Investment Management Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 02549 Attention: Jeff Long Re: John Hancock Funds III Form N-CSR Annual Reports to Shareholders (“Form N-CSR”) for the Period Ended March 31, 2019 and Form N-1A Registration Statement (“Form N-1A”) effective August 1, 2019; File No. 811-21777 John Hancock Current Interest N-CSR for the Period Ended March 31, 2019 and Form N-1A effective August 1, 2019, File No. 811-02485 John Hancock Exchange-Traded Fund Trust N-CSR for the Period Ended April 30, 2019 and Form N-1A effective September 1, 2019, File No. 811-22733 John Hancock Strategic Series Form N-CSR for the Period Ended May 31, 2019 and Form N-1A effective October 1, 2019; File No. 811-04651 John Hancock Municipal Securities Trust N-CSR for the Period Ended May 31, 2019 and Form N-1A effective October 1, 2019, File No. 811-05968 John Hancock Bond Trust N-CSR for the Period Ended May 31, 2019 and Form N-1A effective October 1, 2019, File No. 811-03006 John Hancock Sovereign Bond Fund N-CSR for the Period Ended May 31, 2019 and Form N-1A effective October 1, 2019, File No. 811-02402 John Hancock California Tax-Free Income Fund N-CSR Filing for the Period Ended May 31, 2019 and Form N-1A effective October 1, 2019, File No. 811-05979 John Hancock Funds II Form N-CSR for the Periods Ended July 31, 2019 and August 31, 2019 and Form N-1A effective December 1, 2019 and January 1, 2019; File No. 811-21779 Dear Mr. Long: This letter responds to the comments of the Staff of the Securities and Exchange Commission (“SEC”), which were conveyed to us by telephone on December 2, 2019 with respect to the filings on Form N-CSR and Form N-1A for the John Hancock Funds listed on Annex A, attached hereto. The Staff’s comments are set forth below, each followed by the respective fund’s response. 1. Comment: The following funds had significant investments that reference LIBOR rates: John Hancock Funds II Short Duration Credit Opportunities, John Hancock Funds II Floating Rate Income Fund, John Hancock Funds II High Yield Fund, and John Hancock Bond Trust High Yield Fund. Securities and Exchange Commission January 6, 2020 Page 2 of 7 Should the discontinuation of LIBOR be listed as a principal risk in the prospectus for the applicable funds? Response: We plan to include risk disclosure related to the discontinuation of LIBOR for relevant funds beginning with our January 1, 2020 prospectus updates. 2. Comment: For John Hancock Funds II Income Allocation Fund, the prospectus effective January 1, 2019 reflects the same expenses for Management fee, Rule 12b-1 fees, Other expenses, and Acquired fund fees and expenses in the fee table for Class I and Class R6 but “Total annual fund operating expenses” differ. Response: The total gross and total net operating expense ratios are correct; however for Class R6 “Other Expenses” had a typographical error and was overstated. Other expense ratio of 1.65% should have been 1.55%. The annual prospectus update for the fund will be effective January 1, 2020. 3. Comment: The investment objective for John Hancock Funds II Disciplined Value Alternative Yield Fund involves a covered call option strategy. Please consider also stating that with this strategy the fund may give up the right to benefit from potential price increases. Response: We will include this risk disclosure in the annual prospectus update. 4. Comment: John Hancock Funds II Global Absolute Return Strategies Fund has significant investments in derivatives; however the Discussion of fund performance does not discuss the impact of investing in derivatives. Response: The impact on results for each of the strategies discussed in the Discussion of fund performance is inclusive of any derivatives included within that strategy. For example, the Canadian interest rates strategy discussed as having a positive impact on performance is inclusive of both long portfolio positions and derivatives which make up that specific investment strategy. In the future, we will explicitly state that the discussion includes the effect of the derivatives utilized to meet the specific strategy being implemented, when applicable. 5. Comment: The Other liabilities and accrued expenses amount on the Statement of Assets and Liabilities for Multifactor Consumer Staples ETF and Multifactor Utilities ETF appears to be significant. Are there any material liabilities or expenses that should broken out? Response: The balance for each of the funds is comprised of third-party fund accounting and custody expenses, audit expense, printing expense, and other miscellaneous expenses. We do not consider any of these balances to be individually material to the fund or requiring a separate line item on the Statement of Assets and Liabilities. 6. Comment: The portfolio for John Hancock Funds II Emerging Markets Debt Fund reflects a maturity date of 6-5-15 for Petrobras Global Finance BV. Is this bond defaulted? Response: The maturity date for this security is June 5, 2115. 7. Comment: Does John Hancock Funds II Floating Rate Income Fund hold any covenant lite term loans, and if so, is the risk of investing in these types of loans adequately disclosed in the prospectus? Response: We will include this risk disclosure in the annual prospectus update. Securities and Exchange Commission January 6, 2020 Page 3 of 7 8. Comment: Several funds include an Investments in affiliates table. The beginning amount, acquisitions, disposals, and ending amount should be based on value and not shares. Response: We are in process of updating the presentation of this table to confirm with the updated guidance. This update will be presented beginning with our November 30, 2019 N-CSR filing. The Staff has requested that the funds provide the following representations in their response to the Staff’s comments: The funds listed in Annex A each acknowledges that: 1. It is responsible for the adequacy and accuracy of the disclosure in its Form N-CSR filings; 2. Staff comments or changes to disclosure in response to Staff comments in the filings reviewed by the Staff do not foreclose the SEC from taking any action with respect to filings on Form N-CSR; and 3. It may not assert Staff comments as a defense in any proceeding initiated by the SEC or any person under the federal securities laws of the United States. * * * We hope that these foregoing responses adequately address the Staff’s comments. If you have any questions, please do not hesitate to contact me at (617) 663-4497. Sincerely, /s/ Salvatore Schiavone Salvatore Schiavone Treasurer John Hancock Group of Funds Securities and Exchange Commission January 6, 2020 Page 4 of 7 Annex A Trust Name Fund Name SEC File Number FYE John Hancock Current Interest Money Market Fund 811-02485 3/31 John Hancock Funds III Disciplined Value Fund 811-21777 3/31 John Hancock Funds III Disciplined Value Mid Cap Fund 811-21777 3/31 John Hancock Funds III Global Shareholder Yield Fund 811-21777 3/31 John Hancock Funds III International Growth Fund 811-21777 3/31 John Hancock Funds III U.S. Quality Growth Fund 811-21777 3/31 John Hancock Investment Trust Diversified Real Assets Fund 811-00560 3/31 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Consumer Discretionary ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Consumer Staples ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Developed International ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Emerging Markets ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Energy ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Financials ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Healthcare ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Industrials ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Large Cap ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Materials ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Media and Communications ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Mid Cap ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Small Cap ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Technology ETF 811-22733 4/30 John Hancock Exchange-Traded Fund Trust John Hancock Multifactor Utilities ETF 811-22733 4/30 John Hancock Bond Trust ESG Core Bond Fund 811-03006 5/31 John Hancock Bond Trust Government Income Fund 811-03006 5/31 John Hancock Bond Trust High Yield Fund 811-03006 5/31 John Hancock Bond Trust Investment Grade Bond Fund 811-03006 5/31 John Hancock California Tax-Free Income Fund California Tax-Free Income Fund 811-05979 5/31 John Hancock Municipal Securities Trust High Yield Municipal Bond Fund 811-05968 5/31 John Hancock Municipal Securities Trust Tax-Free Bond Fund 811-05968 5/31 John Hancock Sovereign Bond Fund Bond Fund 811-02402 5/31 Securities and Exchange Commission January 6, 2020 Page 5 of 7 John Hancock Strategic Series Income Fund 811-04651 5/31 John Hancock Funds II Absolute Return Currency Fund 811-21779 7/31 John Hancock Funds II Diversified Strategies Fund 811-21779 7/31 John Hancock Funds II Fundamental All Cap Core Fund 811-21779 7/31 John Hancock Funds II Multi-Asset Absolute Return Fund (formerly, Global Absolute Return Strategies Fund) 811-21779 7/31 John Hancock Funds II Short Duration Credit Opportunities Fund 811-21779 7/31 John Hancock Funds II Alternative Asset Allocation Fund 811-21779 8/31 John Hancock Funds II Asia Pacific Total Return Bond Fund 811-21779 8/31 John Hancock Funds II Blue Chip Growth Fund 811-21779 8/31 John Hancock Funds II Capital Appreciation Fund 811-21779 8/31 John Hancock Funds II Capital Appreciation Value Fund 811-21779 8/31 John Hancock Funds II Core Bond Fund 811-21779 8/31 John Hancock Funds II Disciplined Alternative Yield Fund (formerly Redwood Fund) 811-21779 8/31 John Hancock Funds II Emerging Markets Debt Fund 811-21779 8/31 John Hancock Funds II Emerging Markets Fund 811-21779 8/31 John Hancock Funds II Equity Income Fund 811-21779 8/31 John Hancock Funds II Floating Rate Income Fund 811-21779 8/31 John Hancock Funds II Fundamental Global Franchise Fund 811-21779 8/31 John Hancock Funds II Global Bond Fund 811-21779 8/31 John Hancock Funds II Global Equity Fund 811-21779 8/31 John Hancock Funds II Health Sciences Fund 811-21779 8/31 John Hancock Funds II High Yield Fund 811-21779 8/31 John Hancock Funds II Income Allocation Fund 811-21779 8/31 John Hancock Funds II International Growth Stock Fund 811-21779 8/31 John Hancock Funds II International Small Company Fund 811-21779 8/31 John Hancock Funds II International Small Cap Fund 811-21779 8/31 John Hancock Funds II International Strategic Equity Allocation Fund 811-21779 8/31 John Hancock Funds II International Value Fund 811-21779 8/31 John Hancock Funds II Mid Cap Stock Fund 811-21779 8/31 John Hancock Funds II Mid Value Fund 811-21779 8/31 John Hancock Funds II Multi-Index 2010 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2015 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2020 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2020 Preservation Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2025 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2025 Preservation Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2030 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2030 Preservation Portfolio 811-21779 8/31 Securities and Exchange Commission January 6, 2020 Page 6 of 7 John Hancock Funds II Multi-Index 2035 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2035 Preservation Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2040 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2040 Preservation Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2045 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2045 Preservation Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2050 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2050 Preservation Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2055 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2055 Preservation Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2060 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index 2060 Preservation Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index Income Preservation Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index Lifestyle Aggressive Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index Lifestyle Balanced Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index Lifestyle Conservative Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index Lifestyle Growth Portfolio 811-21779 8/31 John Hancock Funds II Multi-Index Lifestyle Moderate Portfolio 811-21779 8/31 John Hancock Funds II Multimanager 2010 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multimanager 2015 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multimanager 2020 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multimanager 2025 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multimanager 2030 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multimanager 2035 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multimanager 2040 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multimanager 2045 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multimanager 2050 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multimanager 2055 Lifetime Portfolio 811-21779 8/31 John Hancock Funds II Multimanager 2060 Lifetime Portfolio 811-21779 8/31 J