John Hancock 2040 Lifetime Blend Q4 2025 Review

Quarterly Performance Overview

During the final quarter of 2025, the majority of asset classes within the portfolio delivered strong performance, which was indicative of the broadly positive conditions prevailing across global financial markets at that time. This supportive environment contributed to gains across various sectors, allowing investors to benefit from upward momentum in equities, fixed income, and alternative investments alike.

The John Hancock 2040 Lifetime Blend Portfolio achieved positive returns over this period. However, it narrowly trailed its designated benchmark index. This outcome highlights the competitive nature of the market, where even solid gains can fall just short of reference standards due to specific positioning and execution factors.

Key Contributors to Results

A detailed analysis of the portfolio’s performance reveals that strategic asset allocation decisions played a pivotal role in driving returns. By maintaining a well-balanced mix of investments tailored to the fund’s target retirement horizon of 2040, the allocation strategy effectively captured opportunities presented by the market rally. This approach ensured exposure to high-performing areas without excessive concentration risk.

On the other hand, the results from the underlying investment managers had a mildly negative impact on overall performance. While many managers navigated the quarter successfully, certain selections underperformed relative to their peers or benchmarks, which tempered the fund’s total return. This underscores the challenges of manager selection in a multimanager framework, where individual variances can influence aggregate outcomes.

Strategic Portfolio Adjustments

To bolster the portfolio’s prospects for sustained long-term growth, the management team implemented modest repositioning adjustments. These changes were carefully calibrated to take advantage of asset categories exhibiting compelling valuations and promising return profiles over extended periods. The goal was to enhance expected future performance while preserving the fund’s hallmark commitment to comprehensive diversification across multiple asset types.

Such tactical shifts on the margins allow the portfolio to adapt to evolving market dynamics without disrupting its core structure. By tilting slightly toward undervalued opportunities, the fund positions itself to potentially outperform in subsequent periods, all while mitigating downside risks through broad-based exposure.

Market Environment in Q4 2025

The closing quarter of 2025 was marked by a confluence of favorable factors that propelled most major asset categories higher. Equities, particularly in growth-oriented sectors, benefited from continued economic resilience and positive corporate earnings surprises. Fixed income markets also saw gains, supported by stabilizing interest rate expectations and improving credit conditions globally.

Alternative assets, including real estate and commodities, contributed positively as well, reflecting renewed investor appetite for yield-generating investments amid a backdrop of moderating inflation. This widespread strength across traditional and non-traditional holdings created an ideal setting for diversified portfolios like the John Hancock 2040 Lifetime Blend to generate meaningful appreciation.

Forward-Looking Outlook for 2026

Looking ahead into 2026, the portfolio’s management anticipates that diversification will gain even greater significance. As patterns of market leadership expand beyond a narrow set of outperformers, opportunities are likely to emerge across a broader spectrum of asset classes. This shift could reward funds that maintain flexible, multi-asset positioning capable of capturing value in various market regimes.

The fund is strategically aligned to pursue these emerging prospects, leveraging its multimanager platform to access specialized expertise in equities, bonds, and alternatives. By emphasizing resilience and adaptability, the portfolio aims to navigate potential volatility while compounding returns toward its 2040 retirement target.

Fund Characteristics and Positioning

John Hancock Investment Management, as part of Manulife Investment Management, employs a distinctive multimanager methodology for this Lifetime Blend Portfolio. This approach integrates robust in-house research with an extensive network of external specialist managers, all subjected to stringent oversight protocols. The outcome is a diversified suite of investments designed for enduring performance and prudent stewardship.

Targeted at investors planning for retirement around 2040, the portfolio gradually shifts its risk profile over time, reducing equity exposure and increasing fixed income as the horizon approaches. This glide path ensures alignment with changing investor needs, balancing growth potential with capital preservation in later years.

Performance Attribution Insights

• Asset allocation emerged as a clear positive driver, benefiting from timely exposure to top-performing categories during the quarter.
• Underlying manager performance presented headwinds, with select holdings lagging amid sector rotations and style dispersions.
• Overall, the fund’s structure demonstrated resilience, posting gains in a quarter characterized by broad market advances.

These dynamics illustrate the nuanced interplay between top-down allocation decisions and bottom-up security selection. Moving forward, ongoing refinements aim to optimize this balance, enhancing the portfolio’s competitive edge relative to peers and benchmarks.

Broader Implications for Target-Date Investors

For those utilizing target-date funds like the John Hancock 2040 Lifetime Blend, this quarterly review reinforces the value of a disciplined, diversified strategy. Even in quarters of slight relative underperformance, the fund’s absolute returns contribute meaningfully to long-term objectives. Investors are reminded that short-term variances are normal within a multi-decade investment horizon.

The emphasis on modest adjustments to capture higher-potential areas while upholding diversification principles positions the portfolio well for evolving market conditions. As 2026 unfolds, this proactive stance should enable the fund to adapt effectively, supporting steady progress toward retirement goals.