This Document
This part of the simplified prospectus contains all the relevant details that you need to know about each of the Funds. Any information common to all of the Funds is described below under the same heading as in the Fund description. When reading a Fund description, please refer back to this section for a more complete understanding of the Fund.
Similarities of Manulife Corporate Classes to Other Mutual Funds The investment objectives and investment strategies of many of the Manulife Corporate Classes are similar to the objectives and strategies of corresponding mutual fund trusts sponsored by MAML and the sub-advisors of the Funds.
Although such Manulife Corporate Classes have these similar objectives and strategies, and in most cases will have investment portfolios managed by the same individuals, the performance of the Manulife Corporate Classes and the corresponding mutual fund trusts will not be identical. Some of the reasons this result occurs are the following: not all of the investments of the two groups of funds will be the same in all respects, the investments will be acquired at different times, in different amounts and at different prices, securities may be different due to related party restrictions, the two groups of funds will have different levels of income and expenses, and each fund will have different levels of purchases and redemptions from time to time, necessitating different portfolio transactions.
Securities Offered
We offer Advisor Series securities, Series B securities, Series C securities, Series CT securities, Series D securities, Series F securities, Series FT securities, Series I securities, Series L securities, Series LT securities, Series N securities and Series T securities, however, not all series of securities are offered for all Funds. Please refer to the Fund descriptions that follow to determine what series of securities are offered for each Fund.
What Does the Fund Invest In?
This section tells you the investment objective and strategies of the Fund or Pool, as applicable.
Investment Objective
Each Fund has its own distinct investment objective. This section tells you what that investment objective is.
Investment Strategies
In this section, you’ll find details about the
objectives and strategies of the Funds and the kinds of securities in which each Fund invests. Where the investment strategies section of a Fund indicates that the Fund has percentage or other restrictions on its investment in certain types of securities, if the restriction is adhered to at the time of investment, later changes in the market value of the
investment, the rating of the investment or the value of the Fund that cause the restriction to be exceeded, is generally not a violation of
the restriction.
Investments in Underlying Funds
A Fund may invest in securities of an Underlying Fund (including another Fund) if, among
other things,
䡲The Underlying Fund (other than a fund that issues index participation units) is subject to NI 81-102 and offers or has offered securities under National Instrument 81-101 – Mutual Fund Prospectus Disclosure or the Fund has relief to make such investment
䡲The investment objective of the Underlying Fund is consistent with the Fund’s investment objective 䡲MAML does not vote the Fund’s holdings in the Underlying Fund
䡲At the time the Fund purchases securities of the Underlying Fund, the Underlying Fund holds no more than 10% of the market value of its net assets in securities of other mutual funds other than a money market fund, a fund that tracks the performance of another mutual fund or a fund that issues index participation units
䡲The Fund and the Underlying Fund are both reporting issuers
䡲No management fees or incentive fees are payable by the Fund that, to a reasonable person, would duplicate a fee payable by the Underlying Fund for the same service
䡲No sales fees or redemption fees are payable by the Fund in relation to its purchases or redemptions of the securities of the Underlying Fund if the Underlying Fund is managed by the Manager or an affiliate of the Manager of the Fund
Derivatives Relief
All of the Funds, other than Manulife money market funds, have been granted derivatives relief to use as a “put option cover” a right or obligation to sell an equivalent quantity of the underlying interest of the standardized future, forward or swap when either: (i) a Fund opens or maintains a long position in a debt-like security that has a component that is a long position in a forward contract, or in a standardized future or forward contract; or (ii) a Fund enters into or maintains a swap position, and during the periods when the Fund is entitled to receive payments under the swap. Please see “Investment Restrictions and Exemptive Relief” in the AIF of the Funds for further details, including the conditions of this relief.
ETF and Silver Relief
The Manulife Managed Solutions, Manulife Manulife Diversified Income Portfolio, Manulife Global Strategic Balanced Yield Fund, Manulife Global Tactical Credit Fund, Manulife Strategic Balanced Yield Fund, Manulife Strategic Income Fund, Manulife U.S. Dollar Strategic Income Fund, Manulife U.S. Dollar Strategic Balanced Yield Fund, Manulife Diversified Strategies Fund, Manulife U.S.
Balanced Private Trust and Manulife Global Fixed Income Private Trust have obtained regulatory approval to permit the Funds to purchase and hold securities of certain additional types of ETFs, silver and/or silver derivatives. These additional types of ETFs seek to replicate: (a) the daily performance of an index by (i) a multiple or an inverse multiple of 200% or (ii) an inverse multiple of 100%, or (b) the performance of gold or silver, either (i) on an unlevered basis or (ii) by a multiple of 200%. A Fund will not be able to make further purchases of these additional types of ETFs when more than 10% of its assets taken at market value at the time of the transaction are already invested in such ETFs.
This regulatory approval also allows these Funds to invest directly in silver, certain silver certificates, and derivatives the underlying interest of which is silver.
A Fund will not be able to make further purchases
of silver or silver-related investments if 10% of its assets taken at market value at the time of the transaction are already invested in gold and silver products.
The Manulife Managed Solutions, Manulife Diversified Income Portfolio and Manulife Diversified Strategies Fund have additionally
obtained regulatory relief so that they may invest in other commodity ETFs that have exposure to one or more physical commodities, other than gold or silver, on an unlevered basis. These physical commodities may include, without limitation, precious metals commodities (such as platinum, platinum certificates, palladium and palladium certificates), energy commodities (such as crude oil, gasoline, heating oil and natural gas), industrials and/or metals commodities (such as aluminum, copper, nickel and zinc) and agricultural
commodities (such as coffee, corn, cotton, lean hogs, live cattle, soybeans, soybean oil, sugar and wheat). ETFs that seek to replicate the price of these commodities are subject to the risks associated with investing directly in these commodities, as applicable.
These same Funds have also applied for regulatory relief so that they may invest up to 10% of their assets in the following absolute return ETFs: 1. IQ Hedge Multi-Strategy Tracker ETF; 2. IQ Hedge Macro Tracker ETF; and 3. Proshares Hedge Replication ETF (collectively, the "Absolute Return ETFs"). MAML believes that having the ability to invest a limited portion of the above-noted Funds' assets in the Absolute Return ETFs will increase diversification opportunities and improve their overall risk/reward profile. By investing in these Absolute Return ETFs, these Funds will be able to gain exposure to the benefits of absolute return strategies through stock exchange listed, transparent, regulated and liquid investments.
The Absolute Return ETFs: (i) are not themselves
"hedge funds" nor are they funds of hedge funds;
(ii) do not seek to provide leveraged returns and the amount of loss that can result from an
investment by a Fund will be limited to the amount invested by the Fund in the Absolute Return ETF;
(iii) have highly transparent portfolios and trading information, all of which is available on a daily basis further to the listing of their securities for trading on the NYSE Arca; (iv) are publicly offered mutual funds subject to the United States Investment
manner that is identical in all material respects to the regulation of other exchange traded funds listed on stock exchanges in the United States that fall within the definition of "index participation unit" in NI 81-102; (vi) invest according to a specific named index; and (vii) are unaffiliated with MAML.
If the relief is granted, it is expected that a Fund will not be able to make further purchases of these additional types of ETFs when more than 10% of its assets are already invested in such ETFs and Commodity products.
Please see “Investment Restrictions” in the AIF of the Funds for further details, including the conditions of these exemptions.
Foreign Government Debt Relief Manulife Asia Total Return Bond Fund, Manulife Emerging Markets Debt Fund, Manulife Global Tactical Credit Fund, Manulife Global Fixed Income Private Trust, Manulife U.S. Dollar Strategic Income Fund, Manulife Strategic Investment Grade Global Bond Fund and Manulife Strategic Income Fund have received regulatory approval to invest up to 20% of their net assets in securities issued or guaranteed as to principal by any government or government agency (other than a government or agency of Canada, a province or territory thereof, or the United States, in which investment is
unrestricted) or any permitted supranational agency (as defined in NI 81-102) provided the securities have a minimum credit rating of “AA” from Standard & Poor’s or the equivalent rating by any other rating agency listed in NI 81-102. These Funds similarly can invest up to 35% of their net assets in the same type of debt securities with a minimum credit rating of “AAA”. This approval is subject to conditions that: (i) these 20% and 35%
exemptions may not be combined for the Fund; (ii) the securities purchased must be traded on a mature and liquid market; and (iii) the securities purchased must be consistent with the
fundamental investment objectives of the Fund.
Investment Risk
Classification Methodology
The methodology used to determine the Fund’s investment risk classification for purposes of disclosure in this simplified prospectus and in the fund facts document is based on guidelines released by the Investment Funds Institute of Canada (“IFIC”) in August 2014 (the "2014 Guidelines”). In the 2014 Guidelines, IFIC concluded that the most comprehensive, easily understood form of risk in this context is historical volatility risk as measured by the standard deviation of fund performance. However, the Manager and IFIC recognize that other types of risk, both
measurable and non-measurable, may exist and we remind you that a Fund’s historical performance may not be indicative of future returns and that a Fund’s historical volatility may not be indicative of its future volatility. IFIC created 6 categories of volatility risk: very low, low, below average,
average, above average and high. We adopted the 2014 Guidelines, however, we have classified each Fund’s risk in accordance with 5 of IFIC’s 6
categories (we have combined very low and low into one category and renamed the “below
average” category to “low to medium”, “average”
to “medium” and “above average” to “medium to high”). There may be times when these methods produce a result that the Manager believes is inappropriate in which case the Manager may determine the risk classification of the Fund based on other factors, including, for example, the types of investments made by the Fund and the liquidity of those investments.
Based on the 2014 Guidelines, each respective Fund’s risk classification as described in this document, is determined by comparing a Fund’s average three year standard deviation over a period of 10 years (or since the inception of a Fund, if 10 years of performance history does not exist) with the category in which it is included.
If a Fund in question does not have at least three years of monthly return history, the benchmark index which most closely resembles the Fund’s strategy is used as a proxy.
Should the Fund’s average standard deviation not fall within the standard deviation range indicated for that Fund’s particular category due to particular manager style, process or other qualitative factors, we may place the Fund in a higher or lower volatility classification, as appropriate.
Each Fund is assigned an investment risk rating in one of the following categories:
䡲Low – for funds with a level of risk that is typically associated with investments in money market funds and Canadian fixed income funds;
䡲Low to Medium – for funds with a level of risk that is typically associated with investments in balanced funds and global and/or corporate fixed income funds;
䡲Medium – for funds with a level of risk that is typically associated with investments in equity portfolios that are diversified among a number of large-capitalization Canadian and/or international equity securities;
䡲Medium to High – for funds with a level of risk that is typically associated with investments in equity funds that may concentrate their
investments in specific regions or in specific sectors of the economy; and
䡲High – for funds with a level of risk that is typically associated with investment in equity portfolios that may concentrate their investments in specific regions or in specific sectors of the
economy where there is a substantial risk of loss (for example, emerging markets, precious metals).
The investment risk level for a Fund is determined when the Fund is first created and is reviewed at least annually and/or any time a material change occurs in the Fund.
Information about the methodology and the 2014 Guidelines used by the Manager to determine each Fund’s risk level is available on request, at no cost
by calling toll-free at 1 888 588 7999 or by writing Client Services at Manulife Investments, a division of Manulife Asset Management Limited, Order Receipt Office, 500 King Street North, Delivery Station 500 G-B, Waterloo, Ontario, N2J 4C6.
Who Should Invest in This Fund?
This section tells you the type of investment portfolio or investor for which the Fund or Pool, as applicable, may be suitable. This is meant as a general guide only. For advice about your own circumstances, please consult your financial advisor.
Distribution Policy
This section tells you how often the Fund pays out distributions of income and capital gains or dividends or a return of capital and how they are paid. Please see “Income Tax Considerations for Investors” for more information.
Fund Expenses Indirectly Borne by Investors
This example is intended to help you compare the cost of investing in a series of securities of one of the Funds or Pools, as applicable, with the cost of investing in other mutual funds. It shows the cumulative fees and expenses you may pay indirectly over different time periods. These expenses are indirectly borne by you because they are paid out of Fund or Pool assets, which indirectly reduces your return. This example assumes:
䡲You invest $1,000 in securities of the Fund or Pool, as applicable
䡲The securities of the Fund you invest in earn 5%
each year, although the actual return will likely be different
䡲You paid the same management expense ratio each year as you did in the Fund’s or Pool’s last completed financial year, as applicable
See the “Fees and expenses” table for more information about the cost of investing in the Funds or Pools.
FUND DETAILS
Type of fund Canadian Equity
Date started Advisor Series and Series F securities - April 2, 2001 Series I securities - August 19, 2010
Series FT6 and Series T6 securities - August 10, 2012 Series D securities - August 1, 2014
Nature of securities1
Advisor Series, Series D, Series F, Series FT6, Series I and Series T6 shares of a class of a mutual fund corporation
Eligible plans Securities of the Fund are qualified
investments for Registered Plans. We reserve the right to limit purchases (including switches) by Registered Plans into the Fund.
Portfolio advisor Manulife Asset Management Limited
Toronto, Ontario
1Series IT and Series O securities of this Fund also exist. The rights attached to Series IT and Series O securities do not materially affect the rights attached to the other securities of the Fund.
WHAT DOES THE FUND INVEST IN?
Investment Objective
The fundamental investment objective of the Fund is to obtain capital preservation and appreciation by investing primarily in a select number of
Canadian equities.
The fundamental investment objective of the Fund cannot be changed without the approval of investors who own securities in the Fund.
Investment Strategies
The portfolio advisor seeks to achieve the
fundamental investment objective of the Fund by investing in securities trading below their intrinsic value. Investment analysis is focused on
understanding and evaluating the factors that make a company profitable including profit margins, the use of assets, debt levels, revenues and reinvestment opportunities. This effort is complemented by an evaluation of the unique strengths of each business in relation to its
competitors. Emphasis is placed on businesses with
a strong track record of allocating capital while the level of investment in a company’s securities is primarily determined by the attractiveness of its valuation.
Although diversified by industry and company, the Fund’s portfolio will typically be focused
and concentrated.
The Fund may also invest up to 49% of its assets in foreign securities in a manner consistent with its investment objective.
The Fund may hold a portion of its assets in cash or short-term money market securities for
administrative purposes or while searching for investment opportunities and/or due to general market or economic conditions.
The portfolio turnover rate of the Fund may be greater than 70%. This means the Fund may frequently trade the securities in its portfolio, which may have implications for you as an investor:
䡲The Fund may earn taxable capital gains, which may be passed on to you
䡲Your returns may be reduced by the higher trading costs associated with frequent trading The Fund may also invest in other investment funds, including ETFs, that may or may not be managed by the Manager (or one of its affiliates or associates) in order to gain indirect exposure to markets, sectors or asset classes. Investments by the Fund in securities of other investment funds may be done directly or indirectly, through a specified derivative.
The Fund may invest in or use derivatives for hedging and non-hedging purposes in a manner consistent with the investment objective of the Fund and as permitted by applicable securities legislation or by the exemption described under
“Derivatives Relief” in “Specific Information About Each of the Funds Described in This Document”.
Derivatives may be used for hedging purposes in the event of significant cash flows into or out of the Fund and to provide protection for the Fund.
Derivatives may be used for non-hedging purposes in order to invest indirectly in securities or financial markets and to gain exposure to other currencies.
Derivatives may be used for non-hedging purposes in order to invest indirectly in securities or financial markets and to gain exposure to other currencies.