John Hancock Variable Trust Advisers is a limited liability company founded in 1997 and is an
indirect principally owned subsidiary of Manulife Financial Corporation (“MFC”), a diversified
international management and holding company with interests in companies that are active in,
among other things, financial services and insurance. MFC is a publicly traded company based in
Toronto, Canada that trades as ‘MFC’ on the Toronto Stock Exchange, New York Stock Exchange
(the “NYSE”), and the Philippine Stock Exchange, and under '945' in Hong Kong.
John Hancock Variable Trust Advisers provides discretionary investment advisory services as a
“manager of managers” to the John Hancock Variable Insurance Trust (“JHVIT” or the “Trust”), a
no-load, registered open-end investment company that serves as the underlying investment
medium for variable annuity and variable life contracts issued by John Hancock Life Insurance
Company (U.S.A.) and affiliated entities as well as several nonaffiliated insurance companies (each
series of JHVIT is referred to herein as a “JHVIT fund” or a “Fund”).
Pursuant to the terms of investment advisory agreements with the Trust, John Hancock Variable
Trust Advisers administers the business affairs of the Trust, negotiates and contracts with affiliated
and unaffiliated sub-advisers (“Sub-Advisers”) that provide investment advisory services to
individual portfolios of the Trust, and supervises the activities of the Sub-Advisers on behalf of the
Trust, as further described herein. John Hancock Variable Trust Advisers is also responsible for
performing or paying for various services provided to the Trust, including providing office space and
all necessary office facilities and equipment to perform its duties under the investment advisory
agreements and any personnel necessary for the oversight and/or conduct of the investment
operations of the Trust. John Hancock Variable Trust Advisers also agrees to permit individuals
who are directors, officers, or employees of John Hancock Variable Trust Advisers to serve (if duly
elected or appointed) as Trustees and President of the Trust without remuneration from or other
direct cost to the Trust. In addition, John Hancock Variable Trust Advisers allows the Trust to use
the recognizable and valuable brand name, “John Hancock”.
The advisory agreement between a Trust and John Hancock Variable Trust Advisers may be
terminated at any time, without the payment of a penalty, by the Board of Trustees of the Trust (the
“Board”), by a vote of the majority of the outstanding voting securities of the Trust, or, with respect
to any portfolio, by the Board or by the vote of a majority of the outstanding voting securities of the
series of shares of such portfolio, on sixty days written notice to John Hancock Variable Trust
Advisers, or by John Hancock Variable Trust Advisers, on sixty days written notice to the Trust. An
advisory agreement will automatically terminate, without payment of any penalty, in the event of its
assignment (as defined in the Investment Company Act of 1940, as amended (“1940 Act”)).
Description of Investment Advisory Services
The Investment Oversight team of John Hancock Variable Trust Advisers employs highly
experienced and well-credentialed professionals.
Key advisory responsibilities include researching new investment products, asset classes, and
investment managers, and monitoring the performance of investment managers on an ongoing
basis.
As a manager of managers, John Hancock Variable Trust Advisers administers the business and
affairs of the Trust, including the investment portfolios of the Funds, and retains, supervises, and
compensates Sub-Advisers to manage the assets of the investment portfolios of the Funds. In its
role as manager-of-managers, John Hancock Variable Trust Advisers has supervisory
responsibility for managing the investment and reinvestment of the Funds’ portfolio assets through
proactive oversight and monitoring of the Sub-Advisers and the Funds. John Hancock Variable
Trust Advisers is responsible for developing overall investment strategies for the Funds and
overseeing and implementing the Funds’ continuous investment programs and provides a variety
of advisory oversight and investment research services. John Hancock Variable Trust Advisers
also provides management and transition services associated with certain fund events (e.g.,
strategy, portfolio manager or subadviser changes) and coordinates and oversees services
provided under other agreements. John Hancock Variable Trust Advisers has ultimate
responsibility to oversee a Sub-Adviser and recommend to the Board its hiring, termination, and
replacement. In this capacity, John Hancock Variable Trust Advisers among other things:
(i) monitors on a daily basis the compliance of the Sub-Adviser with the investment
objectives and related policies of the Fund;
(ii) monitors significant changes that may impact the Sub-Adviser’s overall business and
regularly performs due diligence reviews of the Sub-Adviser;
(iii) reviews the performance, and monitors the liquidity, of the Sub-Adviser; and
(iv) reports regularly on such performance to the Board.
John Hancock Variable Trust Advisers employs a team of investment professionals who provide
these ongoing research and monitoring services.
Pursuant to an order from the SEC, John Hancock Variable Trust Advisers, subject to Board
approval, is permitted to appoint a new Sub-Adviser for a Fund, or change the terms of a sub-
advisory agreement, without obtaining shareholder approval. The SEC order does not, however,
permit John Hancock Variable Trust Advisers to appoint a Sub-Adviser that is an affiliate of John
Hancock Variable Trust Advisers or of the relevant JHVIT fund (other than by reason of serving as
Sub-Adviser), or to increase the sub- advisory fee of an affiliated Sub-Adviser without shareholder
approval.
The John Hancock Variable Trust Advisers team of professionals is responsible for the selection
of Sub-Advisers and monitoring Sub-Adviser performance. The team closely monitors each sub-
advised portfolio on a daily, monthly, quarterly and annual basis. Team members periodically
meeting with each Sub-Adviser to perform due diligence on the advisory services provided by
the Sub-Adviser, as well as the business and compliance operations of the Sub-Adviser. John
Hancock Variable Trust Advisers recommends to the Board the continuation or termination of the
sub-advisory agreements at least annually.
The process for selecting new Sub-Advisers involves the use of screening models with and in-
depth data analysis as well as the industry knowledge of the members of the investment team. A
rigorous five-step process is used in selecting Sub-Adviser candidates:
(i) initial screening by investment style;
(ii) firm review to identify managers who demonstrate the potential to produce above average
results;
(iii) quantitative analysis of performance;
(iv) qualitative analysis of the investment team, philosophy, process and risk management
practices through in-person interviews; and
(v) final selection, based on management review of the investment team’s findings and the
capacity of the Sub-Adviser and the liquidity of the new fund.
New Sub-Advisers are also reviewed by the Manulife Global Investment Product Committee.
Sub-Advisers that are selected by John Hancock Variable Trust Advisers are generally required to
adhere to pre-established value propositions. In monitoring the Sub-Advisers, John Hancock
Variable Trust Advisers generally focuses on longer-term performance rather than short-term
performance metrics. Although a Sub-Adviser’s performance record is one of several factors used
to determine whether a Sub-Adviser should be retained or replaced, additional oversight may be
considered if:
(i) value proposition criteria are violated;
(ii) performance is not aligned with the performance blueprint;
(iii) the Sub-Adviser experiences major organizational changes such as resignations
or a change in ownership; or
(iv) the fund’s risk profile is outside of expectations.
During a full review of a Sub-Adviser, John Hancock Variable Trust Advisers focuses on identifying
and assessing the issue that has caused the full review to be undertaken. If John Hancock
Variable Trust Advisers determines that the Sub-Adviser can no longer deliver its value proposition
to the JHVIT fund and its shareholders, a recommendation will be made to the Board to replace
the Sub-Adviser.
Further information regarding John Hancock Variable Trust Advisers’ screening, supervision, and
review of Sub-Advisers is described in Item 8 – Methods of Analysis, Investment Strategies and
Risk of Loss.
In the event of the replacement of a Sub-Adviser or the merger of one or more JHVIT funds, John
Hancock Variable Trust Advisers manages the transition or merger transaction of the relevant
Fund’s portfolio investments to the new Sub-Adviser in an effort to minimize transaction costs and
avoid other implicit costs. This involves the development of strategic plans to execute all fund
events (e.g., fund launches, mergers, and liquidations), taking into consideration downstream
impacts on services provided to the Funds by global business units, in coordination with legal,
compliance, tax, product, operations, and other business units of John Hancock Variable Trust
Advisers or its affiliates, and with the fund’s Sub-Adviser(s).
The Trust has established “Funds of Funds” which invest in a number of other underlying funds
and may invest in certain other types of investments. John Hancock Variable Trust Advisers is
responsible for oversight of the Funds of Funds, including the monitoring of the asset allocation
strategies and processes employed by the Sub-Advisers of such funds. John Hancock Variable
Trust Advisers and its Trade Oversight Committee also oversee rebalancing of the funds' assets,
and have adopted procedures to help minimize any negative impact of rebalancings on the
underlying funds. John Hancock Variable Trust Advisers also has the authority, with Board
approval, to manage a Funds of Funds directly and, in that case, would be responsible for
implementing asset allocation strategies, including by rebalancing the Funds of Funds’ underlying
funds to maintain target allocations. It is not the current practice of John Hancock Variable Trust
Advisers to exercise this authority in the normal course of business. Certain Fund of Funds
warrant focused monitoring by John Hancock Variable Trust Advisers, which includes evaluating
the Sub-Adviser's asset class mix and manager mix decisions, determining the effectiveness of the
optimization process, and monitoring cash flows and trading efficiencies.
John Hancock Variable Trust Advisers develops and provides detailed reports for the Board of the
Trust on a regular basis. These reports include performance and liquidity data, due diligence
information and compliance, risk, derivatives and other reports, based on John Hancock Variable
Trust Advisers’ ongoing portfolio and Sub-Adviser monitoring activities. John Hancock Variable
Trust Advisers also prepares ad hoc reports and consults with Investment and Compliance
Committees established by the Boards to monitor Sub-Adviser performance and assists these
committees in the preparation of performance reports to the full Board.
John Hancock Variable Trust Advisers also oversees the John Hancock family of funds inter-fund
lending program, and the management by Sub-Advisers of overnight cash held by the Funds.
John Hancock Variable Trust Advisers has a committee governance structure that provides
oversight of certain of the services John Hancock Variable Trust Advisers provides to the Funds.
The services overseen by the John Hancock Variable Trust Advisers committees include
investment, operational, legal, compliance, risk oversight, disclosure oversight and proxy voting.
Each of the John Hancock Variable Trust Advisers Committees is listed below.
1. Risk and Investment Operations (“RIO”) Committee
2. Trade Oversight Committee
3. Complex Securities Committee
4. Multi-Manager and Multi-Style Funds Investment Oversight Committee
5. Service Provider Oversight Committee
6. Disclosure Review Committee
7. Proxy Voting Committee
8. Liquidity Risk Management Committee
9. Investment Risk Oversight Committee
10. Accounting Policies Committee
11. Ethics Oversight
Committee
12. Investment Oversight Committee
13. Derivatives Risk Management Committee
14. Pricing Committee
Compliance Support and Oversight
John Hancock Variable Trust Advisers also provides the John Hancock Funds with ongoing
compliance support and oversight through programs designed to ensure that there are adequate
procedures in place to deter, detect, correct, and report on control weaknesses that could
potentially result in a violation of Federal securities laws. This program is administered pursuant to
the requirements of Rule 206(4)-7 of the Investment Advisers Act of 1940, as amended (the
“Advisers Act”) and is managed by John Hancock Variable Trust Advisers’ duly appointed Chief
Compliance Officer (“CCO”).
The role of the CCO and the Compliance Office (“CCO’s Office”) is to: (a) develop and monitor a
compliance program for John Hancock Variable Trust Advisers based on an on-going review of
risk and current legal and regulatory developments; (b) oversee and manage compliance issues;
(c) ensure that John Hancock Variable Trust Advisers complies with applicable legal and
regulatory requirements; and (d) ensure that the John Hancock Variable Trust Advisers employees
comply with internal policies and procedures. These responsibilities include: designing and
overseeing the appropriate implementation of policies and procedures to reasonably assure
compliance with applicable federal securities laws and regulations; providing employee training on
certain key policies such as Code of Ethics, Insider Trading, Gifts and Entertainment and the
Whistleblower Policy; managing and/or participating in investigations into regulatory and
compliance issues; and responding to requests for information from regulatory authorities.
In carrying out this role, the CCO’s Office has developed a compliance oversight program
designed to reasonably ensure that the requirements imposed by federal securities laws are
implemented effectively throughout John Hancock Variable Trust Advisers and by its third-party
service providers, including the Sub-Advisers to the Funds. The Compliance Program involves
four main components: (1) development and maintenance of policies and procedures; (2) risk
assessments; (3) policy review and evaluation and (4) Sub-Adviser and service provider
oversight (“Service Provider Oversight”).
Development and Maintenance of Policies and Procedures
The CCO’s Office, in conjunction with John Hancock Variable Trust Advisers’ business units, has
developed policies and procedures that address the regulatory risks that are
associated with John Hancock Variable Trust Advisers’ operation. In addition, these policies
include procedures that address the manner in which the CCO’s office will oversee the
compliance and internal control programs implemented by the Sub-Advisers and service
providers. These policies and procedures are evaluated on at least an annual basis by the CCO’s
Office, in conjunction with John Hancock Variable Trust Advisers’ business units, with all material
changes requiring CCO’s Office and Board of Directors approval. The CCO’s Office, in conjunction
with John Hancock Variable Trust Advisers’ business units, develops compliance policies as new
regulations become effective and continually evaluates and amends existing policies as
necessary.
Risk Assessment
The risk assessment process is a key component of the Compliance Program as it provides an
indication of the potential risk associated with each compliance policy and procedure. The risk
assessment process is designed to evaluate the effectiveness of the underlying processes
supporting the compliance policies. In conjunction with each John Hancock Investment
Management business unit, the CCO’s Office conducts an assessment of the organization’s risk. It
is a comprehensive process that starts with a baseline assessment established by the business
units and the CCO’s Office. The risk assessment process leverages Risk Control Self-
Assessments performed by the Operational Risk Team over key business areas and also considers
various internal/external emerging risk factors; including but not limited to, organizational changes,
new product initiatives, and SEC enforcement actions, risk alerts and exam priorities. The CCO’s
Office may make adjustments to the baseline risk assessments as a result of all the information
gathered.
Policy Review and Evaluation
After assessing the risk environment, the CCO’s Office then focuses on testing the compliance
program’s effectiveness. This is conducted through a series of tests that are centered on the
operational and control environment that supports the Compliance Policies. In conducting the
testing, the CCO’s Office, in conjunction with John Hancock Variable Trust Advisers’ business
units, prepares detailed test scripts which are designed to test the key activities/controls of each
process. Once these test scripts are prepared, the CCO’s Office, working with John Hancock
Variable Trust Advisers’ business units, conducts testing on the effectiveness of the control
environment. At the conclusion of the testing, the CCO’s Office prepares reports for Senior
Management which summarize the results of the process.
Sub-Adviser and Service Provider Oversight
The CCO’s Office has established a standardized approach for assessing all Sub-Adviser
compliance programs. For prospective Sub-Advisers and prior to any onsite due diligence meeting,
each Sub-Adviser is asked to provide a response to a preliminary questionnaire which is then
utilized by the CCO’s Office as the initial step in fulfilling its oversight responsibilities. These
narratives are reviewed for adequacy, comprehensiveness and completeness.
The CCO’s Office also requires that each Sub-Adviser complete a due diligence questionnaire and
provide additional documentation (e.g. Compliance Manuals, Code of Ethics, etc.) on the firm’s
processes, controls, and policies in place to address the requirements of the 1940 Act, the Advisers
Act, and other federal securities laws.
Responses to these questions are then reviewed by the CCO’s Office to assist in determining the
adequacy of the Sub-Advisers’ compliance programs. The responses and requested documents are
reviewed before the meeting in order to establish a preliminary understanding of the internal
controls in place.
In addition, Sub-Adviser evaluation by the CCO’s Office includes onsite and virtual due diligence
meetings. A typical onsite meeting with a Sub-Adviser includes sessions with representatives from
Legal, Compliance, Trading, Operations, Fund Management and the Chief Compliance Officer. The
results of onsite meetings are documented and then reviewed with senior management of John
Hancock Variable Trust Advisers and the Funds’ Board of Trustees. If the CCO’s Office is not
satisfied with the Sub-Advisers’ compliance program, the Sub- Adviser will not be approved to sub-
advise a John Hancock Fund.
The CCO’s Office utilizes a similar approach for the ongoing oversight of its Sub- Advisers once
they are approved to sub-advise a John Hancock Fund. The CCO’s Office continues to conduct
on-site due diligence meetings on a prescribed schedule. In addition, the CCO’s Office monitors
the compliance programs of the Sub-Advisers on an ongoing basis by requiring the completion of
quarterly, annual and periodic compliance questionnaires, quarterly certifications concerning
adherence to prospectus guidelines and disclosures as well as annual certification of the Sub-
Advisers’ Code of Ethics. Further, the CCO’s Office oversees the monitoring of the investment
activities of the Sub- Advisers on a daily post trade basis to ensure that each portfolio investment
is in compliance with prospectus guidelines and other regulatory requirements.
Service Provider Oversight is similar to the oversight performed for Sub-Advisers, but incorporates
additional techniques based upon information which is generally available. The goal of the
oversight performed by the Global Wealth and Asset Management’s Vendor Management
department is to ensure that the Funds’ service providers have satisfactory operational controls
and that the service providers are fulfilling their fiduciary and contractual obligations.
The Global Wealth and Asset Management Vendor Management Group (“Vendor Management”)
maintains a framework that includes, but is not limited to, the following processes:
1. Due diligence questionnaires – The due diligence questionnaires are used to gather current
information on topics such as financial viability, results of regulatory reviews, business continuity
programs, information security, business code of conduct issues and a number of other topics, to
gain a better understanding of each provider’s overall control environment and risk monitoring
process.
2. On-site/Virtual due diligence visits of the service provider – This allows the CCO’s Office, Fund
Administration, Vendor Management and subject matter experts from the various business units
to discuss and make observations as to the adequacy of the internal operational control
environment and provides a forum to discuss the results of independent assurance tests and
operational and performance issues. The forum also provides the service provider with an
opportunity to present future key initiatives.
3. Independent attestation report reviews – Vendor Management reviews the results of these reports
to confirm that the controls are adequate, complete, and operating as intended. These reports
may be in the form of SOC-1 Reports, Agreed-Upon Procedures or other similar reports. For
those service providers that provide these reports, Vendor Management obtains copies, and
performs a detailed review to assess the adequacy, scope and completeness of the testing.
Vendor Management, in conjunction with the business owners, evaluates the implications of the
results of the testing to form a basis for determining the effectiveness of the internal control
environment.
4. Monthly operational report reviews – Vendor Management obtains and reviews monthly
operational management reports that are prepared by the custodians and shared with the
management of John Hancock. The purpose of reviewing these reports is to ensure that
operational processes are performing as intended, confirm Key Performance Indicators (KPI) are
reported accurately, and identify areas which require further discussion or explanation from the
service provider.
5. Service Provider Scorecards/Performance Evaluations – A tool used for key service providers to
ensure that the services being provided to John Hancock continue to meet expectations. Vendor
Management facilitates the scorecard process by obtaining feedback from the business owners
on a regular basis and providing that feedback to the vendor in a formal performance scorecard.
John Hancock Variable Trust Advisers is advised by internal and external legal counsel in
connection with general investment company governance, exemptive applications and SEC no-
action letters drafted and filed on its behalf, dissolutions of subsidiaries, and mergers and
acquisitions. Legal counsel services are provided to John Hancock Variable Trust Advisers in
connection with the investment advisory services John Hancock Variable Trust Advisers provides
to the funds related to new and existing products, acquisitions of mutual fund assets,
determinations of fee breakpoints and valuations. John Hancock Variable Trust Advisers also
receives legal counsel related to proxy materials, tax reporting and communications, and
preparation of 15(c) material for review by the Board of Trustees.
John Hancock Variable Trust Advisers provides services to the Trust related both to any litigation
against JHVIT or the JHVIT funds and litigation that JHVIT or the JHVIT funds may initiate. John
Hancock Variable Trust Advisers regularly monitors class actions related to securities held by the
JHVIT funds and provides support for the JHVIT funds to join such class actions where
appropriate.
Assets Under Management
As of December 31, 2023, John Hancock Variable Trust Advisers managed approximately
$65,090,895,426 of assets on a discretionary basis including fund of funds in the Trust. As of
December 31, 2023, John Hancock Variable Trust Advisers did not provide continuous and
regular supervisory or management services on a non-discretionary basis.