Correspondence 0001193125-23-290553 from John Hancock Exchange-Traded Fund Trust (CIK 0001478482)
John Hancock Exchange-Traded Fund Trust (CIK 0001478482)
Date: Dec. 7, 2023 · CIK: 0001478482 · Accession: 0001193125-23-290553
AI Filing Summary & Sentiment
File numbers found in text: 333-183173
Letter
VIA EDGAR Division of Investment Management 100 F Street, N.E. Washington, D.C. 20549 Attention: Sonny Oh Re: John Hancock Exchange-Traded Fund Trust (the “Registrant”) — File Nos. 333-183173 and 811- 22733; Amendment to Registration Statement on Form N-1A
Dear Mr. Oh:
On behalf of the Registrant, I submit this letter in response to comments received by telephone on November 6, 2023, from the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”) with respect to Post-effective Amendment No. 58 under the Securities Act of 1933, as amended, and Amendment No. 61 under the Investment Company Act of 1940, as amended (the “1940 Act”), to the Registrant’s Registration Statement on Form N-1A, filed with the SEC on September 28, 2023, accession no. 0001193125-23-245621 (the “Registration Statement”) relating to the registration of John Hancock Disciplined Value International Select ETF (the “Fund”), a new series of the Registrant.
For convenience, I have set forth each comment below, followed by the Registrant’s response. Unless otherwise stated, capitalized terms have the same meaning as in the Registration Statement.
General Comments
1. Comment - The Staff reminds the Registrant that the company and its management are responsible for the accuracy and adequacy of its disclosures not withstanding any review, comments, action or absence of action by the Staff. Where a comment is made in one location it is applicable to all similar disclosures appearing elsewhere in the same registration statement.
Response – The Registrant respectfully acknowledges the Staff’s comment.
Prospectus
2. Comment – The Staff notes that certain information is missing from the Registration Statement. Please include all missing information in the definitive filing. Please also include the completed fee table under “Fund summary — Fees and expenses” and expense example table under “Fund summary — Expense example” as part of this letter. Please note that the Staff may have additional comments on the supplemental materials.
December 7, 2023
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Response – The Registrant respectfully acknowledges the comment and has included all missing information in the definitive filing. In addition, the fee table and expense example table for the Fund is included in Appendix A to this letter.
3. Comment – Under “Fund summary — Fees and expenses — Annual Fund Operating Expenses,” in footnote 2, please confirm that the duration of both contractual waivers will be in effect for at least a one-year period from the date of effectiveness of the registration statement. Please also disclose, if applicable, whether the adviser may recoup expenses, and if so, disclose the time period and that recoupment may only occur if it does not result in an expense ratio that exceeds the expense cap in place at the time of both the waiver and recoupment.
Response – The Registrant confirms that any contractual waivers will be in effect for at least one year from the date of effectiveness, and further notes that waived or reimbursed expenses are not subject to recoupment by the adviser.
4. Comment – Under “Fund summary — Fees and expenses — Annual Fund Operating Expenses,” in footnote 2, if the two waivers are not expected to be triggered, please remove the last two line items of the fee table.
Response – The Registrant confirms that the two waivers described in footnote 2 are expected to be triggered in the first year.
5. Comment – Under “Fund summary — Expense example,” the third sentence of the first paragraph, states as follows: “The example assumes a 5% average annual return and that fund expenses will not change over the periods.” Please disclose that the first year reflects the waivers in place.
Response – The Registrant supplementally confirms that the expense example reflects the effect of contractual fee limitations only for the periods described in the fee table, as permitted by Item 3, Instruction 4(a). However, as Form N-1A does not require disclosure related to this approach, the Registrant respectfully declines to make any changes in response to this comment.
6. Comment – The Staff notes that the “Fund summary — Principal investment strategies” section includes definitions for “convertible securities” and “equity participations.” The Staff recognizes the importance of brevity but asks that the Registrant consider whether definitions should also be included for any of the following: depository receipts, REITs, participatory notes and limited partnership interests.
Response – The Registrant notes that depositary receipts are defined in “Additional Investment Policies and Other Instruments — Depositary Receipts” as “certificates typically issued by a bank or trust company that give their holders the right to receive securities issued by a foreign or domestic corporation.”
The Registrant notes that REITs are defined in “Fund summary — Principal risks — Real estate investment trust (REIT) risk” as “pooled investment vehicles that typically invest in real estate directly or in loans collateralized by real estate.”
December 7, 2023
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The Registrant notes that participatory notes are defined in “Fund summary — Principal risks — Participatory notes risk” as “interests in securities listed on certain foreign exchanges” with returns “linked to the performance of the issuers of the underlying securities.”
The Registrant believes that the risks associated with limited partnership interests are sufficiently described in “Fund summary — Principal risks — Master limited partnership (MLP) risk” and thus respectfully declines to make any changes in response to this comment.
7. Comment – The “Fund summary — Principal investment strategies” section defines non-U.S. companies as “companies: (i) that are organized under the laws of a foreign country; (ii) whose principal trading market is in a foreign country; or (iii) that have a majority of their assets, or that derive a significant portion of their revenue or profits, from businesses, investments, or sales outside of the United States.” With respect to (iii), please revise the phrase “a significant portion” to reflect that it should greater than 50% for consistency with footnote 24 of Final Rule: Investment Company Names, Rel. No. IC-24828, Jan. 17, 2001.
Response – The Registrant has revised the disclosure under “Fund summary — Principal investment strategies” and “Fund details — Principal investment strategies” as follows:
The fund defines non-U.S. companies as companies: (i) that are organized under the laws of a foreign country; (ii) whose principal trading market is in a foreign country; or (iii) that have a majority of their assets, or that derive a significant portionmajority of their revenue or profits, from businesses, investments, or sales outside of the United States.
8. Comment – Under “Fund summary — Principal investment strategies,” the Staff notes the Fund’s non-U.S. investments may include emerging- and frontier-market investments. Please disclose how this term is defined.
Response – The Registrant notes that “frontier-market” is defined in its corresponding risk disclosure under “Fund summary — Principal risks:”
Frontier-market countries generally have smaller economies and less-developed capital markets and political systems than traditional emerging-market countries, which magnifies emerging-market risks.
The Registrant respectfully notes that the term “emerging-market” is used industry-wide without specificity. Additionally, the Registrant notes that the risks of “emerging-market” countries are defined in its corresponding risk disclosure under “Fund summary — Principal risks,” which has been added in response to Comment 13, and believes that such disclosure adequately informs shareholders with respect to the parameters of emerging-market investments.
December 7, 2023
Page
9. Comment – The disclosure under “Fund summary — Principal investment strategies” states that the Fund may invest in derivatives. Please confirm supplementally whether investment in derivatives will count towards the Fund’s 80% policy, and if so please explain how investments in derivatives will be valued for such purposes. Please also ensure that the Fund’s derivatives disclosure is tailored to the Fund and fully describes how the Fund will use derivatives to achieve its investment objective and the risks associated with the use of derivatives. See the letter from Barry Miller of the Division of Investment Management of the SEC to the Investment Company Institute dated July 30, 2010 (the “Derivatives Disclosure Letter”).
Response – The Registrant reserves the right to use derivatives to count towards the Fund’s 80% Policy. The Fund generally uses market value, and not notional value, to value derivatives in connection with its 80% Policy. The Registrant also confirms that it has reviewed the derivatives disclosure included in the Fund’s prospectus and has determined that it is consistent with the views set forth in the Derivatives Disclosure Letter.
10. Comment – Under “Fund summary — Principal risks,” the Staff notes that the principal risks appear in alphabetical order. Please reorder the risks in order of significance rather than alphabetically.
Response – The Registrant respectfully submits that the current order of the principal risks is in compliance with the requirements of Form N-1A, which does not require listing the principal risks of investing in a fund in any particular order. The Registrant further notes that the alphabetical ordering convention of its “Principal risks” is consistent across the John Hancock complex. However, in order to clarify for shareholders that they should not make any assumptions regarding the significance of the risk factors based on their current order, the Registrant includes the following disclosure in the introductory paragraph under the heading “Fund summary — Principal risks”:
The fund’s main risks are listed below in alphabetical order, not in order of importance.
11. Comment – The “Fund summary — Principal investment strategies” section includes references to sponsored and unsponsored depositary receipts and shares and trust certificates and notes that the Fund may “seek to increase its income by lending portfolio securities.” Please consider adding corresponding risk disclosure under “Fund summary — Principal risks” and “Fund details — Principal risks of investing.”
Response – With respect to depository receipts, the Registrant notes that the following disclosure regarding depositary receipts is included under “Fund summary — Principal risks — Foreign securities risk”:
If applicable, depositary receipts are subject to most of the risks associated with investing in foreign securities directly because the value of a depositary receipt is dependent upon the market price of the underlying foreign equity security. Depositary receipts are also subject to liquidity risk.
In addition, additional risk disclosure regarding depository receipts is included under “Fund details — Principal risks of investing — Foreign securities risk.”
December 7, 2023
Page
With respect to securities lending, the Registrant notes that the following disclosure is included under “Fund details — Additional investment strategies — Securities lending”:
As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the collateral should the borrower of the securities fail financially. The fund could also lose money if investments made with cash collateral decline in value.
In addition, the Registrant believes that the risks associated with securities lending are sufficiently described under the under the heading “Credit and counterparty risk” and that the risks associated with trust certificates are sufficiently described under the heading “Characteristics of Hybrid Instruments.”
Accordingly, the Registrant respectfully declines to make any changes in response to this comment.
12. Comment – “Fund summary — Principal risks — Credit and counterparty risk” states: “The issuer or guarantor of a fixed-income security, the counterparty to an over-the-counter derivatives contract, or a borrower of fund securities may not make timely payments or otherwise honor its obligations. A downgrade or default affecting any of the fund’s securities could affect the fund’s performance.” Please confirm whether the disclosure regarding the issuer or guarantor of a fixed-income security is relevant to this Fund.
Response – The Registrant has revised the disclosure under “Fund summary — Principal risks — Credit and counterparty risk” as follows:
The issuer or guarantor of a fixed-income security, the counterparty to an over-the-counter derivatives contract, or a borrower of fund securities may not make timely payments or otherwise honor its obligations. A downgrade or default affecting any of the fund’s securities could affect the fund’s performance.
In addition, the Registrant has made corresponding updates to the disclosure under “Fund details — Principal risks of investing — Credit and counterparty risk.”
13. Comment – The Staff notes that “Frontier-market risk” is included under “Fund summary — Principal risks.” Please include emerging markets risk with frontier market risk or add it as a separate risk.
Response – The Registrant has added the following disclosure under “Fund summary — Principal risks”:
Emerging-market risk. The risks of investing in foreign securities are magnified in emerging markets. Emerging-market countries may experience higher inflation, interest rates, and unemployment and greater social, economic, and political uncertainties than more developed countries.
In addition, the Registrant has added the corresponding disclosure under “Fund details — Principal risks of investing.”
14. Comment – The Staff notes that “Non-diversified risk” is included under “Fund summary — Principal risks.” Please include corresponding disclosure in the Fund’s principal investment strategies.
December 7, 2023
Page
Response – The Registrant has added the following disclosure under “Fund summary — Principal investment strategies” and “Fund details — Principal investment strategies”:
The fund is non-diversified, which means that it may invest in a smaller number of issuers than a diversified fund and may invest more of its assets in the securities of a single issuer.
15. Comment – Under “Fund summary — Principal risks — Small and mid-sized company risk,” please remove the reference to small sized companies or revise the Fund’s principal investment strategies to reflect that the Fund will invest in small sized companies.
Response – The requested change has been made “Fund summary — Principal risks — Small and mid-sized company risk,” and “Fund details — Principal risks of investing — Small and mid-sized company risk.”
16. Comment – While past performance is not shown in the “Fund summary — Past performance” section because the Fund has not yet commenced operations, please supplementally provide the broad-based market index the Fund intends to use when it is appropriate to display past performance in this section.
Response – It is anticipated that the broad-based market index will be the MSCI ACWI ex US Index, but the Registrant respectfully notes that the advisor may determine to select a different broad-based market index when preparing the performance disclosure in the future.
17. Comment – In “Fund summary — Portfolio management” and “Who’s who — Subadvisor,” please state the month a
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CORRESP 1 filename1.htm John Hancock Exchange-Traded Fund Trust One International Place, 40th Floor 100 Oliver Street Boston, MA 02110 +1 617 728 7100 Main +1 617 275 8384 Fax www.dechert.com Kaitlin McGrath kaitlin.mcgrath@dechert.com +1 617 728 7116 Direct +1 617 275 8395 Fax December 7, 2023 VIA EDGAR Division of Investment Management U.S. Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549 Attention: Sonny Oh Re: John Hancock Exchange-Traded Fund Trust (the “Registrant”) — File Nos. 333-183173 and 811- 22733; Amendment to Registration Statement on Form N-1A Dear Mr. Oh: On behalf of the Registrant, I submit this letter in response to comments received by telephone on November 6, 2023, from the staff (the “Staff”) of the Securities and Exchange Commission (the “SEC”) with respect to Post-effective Amendment No. 58 under the Securities Act of 1933, as amended, and Amendment No. 61 under the Investment Company Act of 1940, as amended (the “1940 Act”), to the Registrant’s Registration Statement on Form N-1A, filed with the SEC on September 28, 2023, accession no. 0001193125-23-245621 (the “Registration Statement”) relating to the registration of John Hancock Disciplined Value International Select ETF (the “Fund”), a new series of the Registrant. For convenience, I have set forth each comment below, followed by the Registrant’s response. Unless otherwise stated, capitalized terms have the same meaning as in the Registration Statement. General Comments 1. Comment - The Staff reminds the Registrant that the company and its management are responsible for the accuracy and adequacy of its disclosures not withstanding any review, comments, action or absence of action by the Staff. Where a comment is made in one location it is applicable to all similar disclosures appearing elsewhere in the same registration statement. Response – The Registrant respectfully acknowledges the Staff’s comment. Prospectus 2. Comment – The Staff notes that certain information is missing from the Registration Statement. Please include all missing information in the definitive filing. Please also include the completed fee table under “Fund summary — Fees and expenses” and expense example table under “Fund summary — Expense example” as part of this letter. Please note that the Staff may have additional comments on the supplemental materials. December 7, 2023 Page 2 Response – The Registrant respectfully acknowledges the comment and has included all missing information in the definitive filing. In addition, the fee table and expense example table for the Fund is included in Appendix A to this letter. 3. Comment – Under “Fund summary — Fees and expenses — Annual Fund Operating Expenses,” in footnote 2, please confirm that the duration of both contractual waivers will be in effect for at least a one-year period from the date of effectiveness of the registration statement. Please also disclose, if applicable, whether the adviser may recoup expenses, and if so, disclose the time period and that recoupment may only occur if it does not result in an expense ratio that exceeds the expense cap in place at the time of both the waiver and recoupment. Response – The Registrant confirms that any contractual waivers will be in effect for at least one year from the date of effectiveness, and further notes that waived or reimbursed expenses are not subject to recoupment by the adviser. 4. Comment – Under “Fund summary — Fees and expenses — Annual Fund Operating Expenses,” in footnote 2, if the two waivers are not expected to be triggered, please remove the last two line items of the fee table. Response – The Registrant confirms that the two waivers described in footnote 2 are expected to be triggered in the first year. 5. Comment – Under “Fund summary — Expense example,” the third sentence of the first paragraph, states as follows: “The example assumes a 5% average annual return and that fund expenses will not change over the periods.” Please disclose that the first year reflects the waivers in place. Response – The Registrant supplementally confirms that the expense example reflects the effect of contractual fee limitations only for the periods described in the fee table, as permitted by Item 3, Instruction 4(a). However, as Form N-1A does not require disclosure related to this approach, the Registrant respectfully declines to make any changes in response to this comment. 6. Comment – The Staff notes that the “Fund summary — Principal investment strategies” section includes definitions for “convertible securities” and “equity participations.” The Staff recognizes the importance of brevity but asks that the Registrant consider whether definitions should also be included for any of the following: depository receipts, REITs, participatory notes and limited partnership interests. Response – The Registrant notes that depositary receipts are defined in “Additional Investment Policies and Other Instruments — Depositary Receipts” as “certificates typically issued by a bank or trust company that give their holders the right to receive securities issued by a foreign or domestic corporation.” The Registrant notes that REITs are defined in “Fund summary — Principal risks — Real estate investment trust (REIT) risk” as “pooled investment vehicles that typically invest in real estate directly or in loans collateralized by real estate.” 2 December 7, 2023 Page 3 The Registrant notes that participatory notes are defined in “Fund summary — Principal risks — Participatory notes risk” as “interests in securities listed on certain foreign exchanges” with returns “linked to the performance of the issuers of the underlying securities.” The Registrant believes that the risks associated with limited partnership interests are sufficiently described in “Fund summary — Principal risks — Master limited partnership (MLP) risk” and thus respectfully declines to make any changes in response to this comment. 7. Comment – The “Fund summary — Principal investment strategies” section defines non-U.S. companies as “companies: (i) that are organized under the laws of a foreign country; (ii) whose principal trading market is in a foreign country; or (iii) that have a majority of their assets, or that derive a significant portion of their revenue or profits, from businesses, investments, or sales outside of the United States.” With respect to (iii), please revise the phrase “a significant portion” to reflect that it should greater than 50% for consistency with footnote 24 of Final Rule: Investment Company Names, Rel. No. IC-24828, Jan. 17, 2001. Response – The Registrant has revised the disclosure under “Fund summary — Principal investment strategies” and “Fund details — Principal investment strategies” as follows: The fund defines non-U.S. companies as companies: (i) that are organized under the laws of a foreign country; (ii) whose principal trading market is in a foreign country; or (iii) that have a majority of their assets, or that derive a significant portionmajority of their revenue or profits, from businesses, investments, or sales outside of the United States. 8. Comment – Under “Fund summary — Principal investment strategies,” the Staff notes the Fund’s non-U.S. investments may include emerging- and frontier-market investments. Please disclose how this term is defined. Response – The Registrant notes that “frontier-market” is defined in its corresponding risk disclosure under “Fund summary — Principal risks:” Frontier-market countries generally have smaller economies and less-developed capital markets and political systems than traditional emerging-market countries, which magnifies emerging-market risks. The Registrant respectfully notes that the term “emerging-market” is used industry-wide without specificity. Additionally, the Registrant notes that the risks of “emerging-market” countries are defined in its corresponding risk disclosure under “Fund summary — Principal risks,” which has been added in response to Comment 13, and believes that such disclosure adequately informs shareholders with respect to the parameters of emerging-market investments. 3 December 7, 2023 Page 4 9. Comment – The disclosure under “Fund summary — Principal investment strategies” states that the Fund may invest in derivatives. Please confirm supplementally whether investment in derivatives will count towards the Fund’s 80% policy, and if so please explain how investments in derivatives will be valued for such purposes. Please also ensure that the Fund’s derivatives disclosure is tailored to the Fund and fully describes how the Fund will use derivatives to achieve its investment objective and the risks associated with the use of derivatives. See the letter from Barry Miller of the Division of Investment Management of the SEC to the Investment Company Institute dated July 30, 2010 (the “Derivatives Disclosure Letter”). Response – The Registrant reserves the right to use derivatives to count towards the Fund’s 80% Policy. The Fund generally uses market value, and not notional value, to value derivatives in connection with its 80% Policy. The Registrant also confirms that it has reviewed the derivatives disclosure included in the Fund’s prospectus and has determined that it is consistent with the views set forth in the Derivatives Disclosure Letter. 10. Comment – Under “Fund summary — Principal risks,” the Staff notes that the principal risks appear in alphabetical order. Please reorder the risks in order of significance rather than alphabetically. Response – The Registrant respectfully submits that the current order of the principal risks is in compliance with the requirements of Form N-1A, which does not require listing the principal risks of investing in a fund in any particular order. The Registrant further notes that the alphabetical ordering convention of its “Principal risks” is consistent across the John Hancock complex. However, in order to clarify for shareholders that they should not make any assumptions regarding the significance of the risk factors based on their current order, the Registrant includes the following disclosure in the introductory paragraph under the heading “Fund summary — Principal risks”: The fund’s main risks are listed below in alphabetical order, not in order of importance. 11. Comment – The “Fund summary — Principal investment strategies” section includes references to sponsored and unsponsored depositary receipts and shares and trust certificates and notes that the Fund may “seek to increase its income by lending portfolio securities.” Please consider adding corresponding risk disclosure under “Fund summary — Principal risks” and “Fund details — Principal risks of investing.” Response – With respect to depository receipts, the Registrant notes that the following disclosure regarding depositary receipts is included under “Fund summary — Principal risks — Foreign securities risk”: If applicable, depositary receipts are subject to most of the risks associated with investing in foreign securities directly because the value of a depositary receipt is dependent upon the market price of the underlying foreign equity security. Depositary receipts are also subject to liquidity risk. In addition, additional risk disclosure regarding depository receipts is included under “Fund details — Principal risks of investing — Foreign securities risk.” 4 December 7, 2023 Page 5 With respect to securities lending, the Registrant notes that the following disclosure is included under “Fund details — Additional investment strategies — Securities lending”: As with other extensions of credit, there are risks of delay in recovery or even loss of rights in the collateral should the borrower of the securities fail financially. The fund could also lose money if investments made with cash collateral decline in value. In addition, the Registrant believes that the risks associated with securities lending are sufficiently described under the under the heading “Credit and counterparty risk” and that the risks associated with trust certificates are sufficiently described under the heading “Characteristics of Hybrid Instruments.” Accordingly, the Registrant respectfully declines to make any changes in response to this comment. 12. Comment – “Fund summary — Principal risks — Credit and counterparty risk” states: “The issuer or guarantor of a fixed-income security, the counterparty to an over-the-counter derivatives contract, or a borrower of fund securities may not make timely payments or otherwise honor its obligations. A downgrade or default affecting any of the fund’s securities could affect the fund’s performance.” Please confirm whether the disclosure regarding the issuer or guarantor of a fixed-income security is relevant to this Fund. Response – The Registrant has revised the disclosure under “Fund summary — Principal risks — Credit and counterparty risk” as follows: The issuer or guarantor of a fixed-income security, the counterparty to an over-the-counter derivatives contract, or a borrower of fund securities may not make timely payments or otherwise honor its obligations. A downgrade or default affecting any of the fund’s securities could affect the fund’s performance. In addition, the Registrant has made corresponding updates to the disclosure under “Fund details — Principal risks of investing — Credit and counterparty risk.” 13. Comment – The Staff notes that “Frontier-market risk” is included under “Fund summary — Principal risks.” Please include emerging markets risk with frontier market risk or add it as a separate risk. Response – The Registrant has added the following disclosure under “Fund summary — Principal risks”: Emerging-market risk. The risks of investing in foreign securities are magnified in emerging markets. Emerging-market countries may experience higher inflation, interest rates, and unemployment and greater social, economic, and political uncertainties than more developed countries. In addition, the Registrant has added the corresponding disclosure under “Fund details — Principal risks of investing.” 14. Comment – The Staff notes that “Non-diversified risk” is included under “Fund summary — Principal risks.” Please include corresponding disclosure in the Fund’s principal investment strategies. 5 December 7, 2023 Page 6 Response – The Registrant has added the following disclosure under “Fund summary — Principal investment strategies” and “Fund details — Principal investment strategies”: The fund is non-diversified, which means that it may invest in a smaller number of issuers than a diversified fund and may invest more of its assets in the securities of a single issuer. 15. Comment – Under “Fund summary — Principal risks — Small and mid-sized company risk,” please remove the reference to small sized companies or revise the Fund’s principal investment strategies to reflect that the Fund will invest in small sized companies. Response – The requested change has been made “Fund summary — Principal risks — Small and mid-sized company risk,” and “Fund details — Principal risks of investing — Small and mid-sized company risk.” 16. Comment – While past performance is not shown in the “Fund summary — Past performance” section because the Fund has not yet commenced operations, please supplementally provide the broad-based market index the Fund intends to use when it is appropriate to display past performance in this section. Response – It is anticipated that the broad-based market index will be the MSCI ACWI ex US Index, but the Registrant respectfully notes that the advisor may determine to select a different broad-based market index when preparing the performance disclosure in the future. 17. Comment – In “Fund summary — Portfolio management” and “Who’s who — Subadvisor,” please state the month a