1. Name Title John Hancock Investments Date
Today we're going to discuss how to fine-tune your portfolio with alternatives.

2. Three things to know about market volatility1
We are going to live with it for a while 2
A traditional asset mix was no match for it in 2008
There are three things you need to know about market volatility—I’m going to go into each of them one by one.
First things first: Volatility isn’t going anywhere—we’re going to live with it for a while. I’ll show you how it’s become a persistent fixture in the markets, and why it hangs over us today more than ever.
Then we’ll look at the last major volatility we dealt with—the global financial crisis of I’ll show you how and why traditional asset mixes were no match for those market shocks.
Last, we’ll look at how the urge to run and stay in cash when markets get tough can be a big mistake for long-term investors.
Let’s go deeper into the first point. 3
Cash is not the answer for long-term investors

3. We are going to live with it for a while1
We are going to live with it for a while
The level of stock market volatility in recent years is unprecedented
S&P 500 Index, 1950 through 2013 (trading days per year with greater than +/–2% returns)
Lehman Brothers bankruptcy
Enron, WorldCom bankruptcies
European sovereign
debt crisis begins
Black Monday stock market crash
September 11 terrorist attacks
President Kennedy assassinated
Unemployment hits 10%
Tech bubble bursts
Korean War begins
President Nixon resigns
Long-Term Capital Management collapses
U.S. debt
downgraded
Warsaw Pact signed
Oil crisis
President Clinton impeached
Soviets launch Sputnik
Asian currency crisis
Cuban missile crisis
Iran hostage crisis
Take a look at this chart—it does a great job encapsulating the choppiness we’ve felt for more than a decade. The blue bars represent the number of trading days per year that the S&P 500 Index was up or down by 2% or more.
We see the Asian currency crisis in 1997; the bursting of the Internet bubble in 2000— nobody will forget that one; the Enron and WorldCom bankruptcies; way up here, the Lehman Brothers collapse and global financial crisis; and, finally and more recently, the European sovereign debt crisis and the downgrade of U.S. Treasury debt.
There’s a very important thread among many of these volatile times: Now more than ever we live in a global economy. The ripple effects of one country’s problems quickly reverberate around the world.
But why are these ripple effects more commonly felt today? In short, individuals, companies, and governments around the world are in a multi-year process of reducing debt built up over the past decade. This deleveraging process, while good for the long-term health of the markets, has made short-term economic activity and market returns less predictable. Low interest rates and high public debt mean policymakers have fewer tools to combat volatility. That means potentially more market shocks around the world—and more ripples.
Vietnam War escalates
2013
RECESSION
7/53–5/54
RECESSION
8/57–4/58
RECESSION
4/60–2/61
RECESSION
12/69–11/70
RECESSION
11/73–3/75
RECESSION
1/80–7/80
RECESSION
7/81–11/82
RECESSION
7/90–3/91
RECESSION
3/01–11/01
RECESSION
12/07–6/09
Source: FactSet, John Hancock Investments, as of It is not possible to invest directly in an index. See slides 15 and 16 for index definitions.

4. Emerging- market stocks2
A traditional asset mix was no match
for it in 2008
Nowhere to hide
Total returns by asset class (2008)
Emerging- market stocks
Int’l small cap
Global REITs
Natural resources
Int’l stocks
U.S. real estate
U.S. stocks
Bank loans
High- yield bonds
TIPS
U.S. bonds
–10%
–20%
–30%
–40%
–50%
–60%
Take a look at the ugly truth about how different asset classes fared in Had you spread your assets among these classes—and thought you had gained some measure of protection by diversifying—you were wrong. I’m sure many of you experienced this. From left to right, we go from the worst performers to the best, with the zero line at the top being the breakeven point. You’ll see most classes lost nearly 30% or more, with only U.S. bonds registering a small positive return. Whether you diversified by equity and fixed- income category or geographically, there was simply nowhere to hide.
With such a shock to the portfolio in so many places, it’s no wonder so many have sought shelter in the same place: cash. The immediate rationale is easy to understand: Stop the bleeding; protect what you have.
But what about the long term? What happens if you stay in cash?
Source: FactSet, as of Please see slides 15 and 16 for index definitions. Diversification does not guarantee investment returns and does not eliminate the risk of loss.

5. Cash is not the answer for long-term investors3
Cash is not the answer for long-term investors
How long does it take to recover from losses?
Assuming
10% loss
20% loss
30% loss
40% loss
1% yearly return
11 years
23 years
36 years
51 years
3% yearly return
4 years
8 years
13 years
18 years
5% yearly return
3 years
5 years
12 years
7% yearly return
2 years
6 years
9 years
The answer for long-term investors is that recovering from losses becomes very hard, further jeopardizing your future financial plans. Simply put, today’s low returns on money markets and cash-equivalent investments greatly extend the time it takes to recover from a market shock.
Let’s take a look at exactly how long, based on different rates of return. Let’s focus on this far-right column and assume that you’ve experienced a 40% portfolio loss, which many did in If you earned 3% annually—with compounding returns—you would need nearly 20 years to recoup your 2008 losses! And if you were a retiree and needed to draw on your investments for income during that period? Your climb uphill would be even longer.
So, if a traditional asset mix didn’t work—and if cash hinders your recovery—what choice do you have in the face of ongoing volatility?
Source: John Hancock Investments. For illustration purposes only.

6. Half of the biggest market swings since 1950 occurred in the past 10 years
Investors face a choice:
Double-down
Try to rebuild account values through more aggressive strategies
Retreat
Preserve assets with ultraconservative—
and low return—investments
Invest smarter
Take advantage of investments and strategies to pursue positive returns with less volatility
Well, when you consider that half of the biggest market swings since 1950 have occurred in the past 10 years, you have three choices to deal with volatility:
1. Double-down. You can get even more aggressive to try to rebuild your account values. Of course, you’ll also be stepping farther out on the limb, adding risk that could inflict serious damage if the market heads in the wrong direction again.
2. You could retreat. In that case, you just want to preserve what you have left through ultraconservative, low return investments. But, as we just saw, you could live a lifetime without ever recovering what you lost, jeopardizing your financial plans for the future.
3. Invest smarter. You can decide to take advantage of investments and strategies to pursue positive returns with less volatility.
Of course, option three sounds like the best plan, right? But how, exactly, does that work?
Source: FactSet, as of 12/31/13. Since 1950, 23 of the top 50 daily gains and 27 of the top 50 daily losses in the S&P 500 Index occurred between 2004 and 2013.

7. Consider alternatives to traditional markets
Alternatives have generated returns independent of traditional markets
Growth of $100,000 (12/31/99 to 9/30/14)
Diversified alternatives portfolio
Annual
total return
Standard
deviation
Correlation
Over the past 14 years, a diversified portfolio of alternative investments would have outperformed the S&P 500 Index with less volatility.
7.75%
8.41%
0.77
S&P 500 Index
Annual
total return
Standard
deviation
Correlation
Stocks have been quite volatile during the past 14 years –with only modest returns.
3.98%
15.37%
1.00
Global REITs
Emerging-market bonds
Commodities
Gold
Emerging-market stocks
Relative value
Macro strategies
Merger arbitrage
Market neutral
Your best bet for positive returns with less volatility may be to look at alternative investments that have generated returns that are independent of traditional markets. In other words, no matter how traditional markets such as equities and bonds perform, these alternatives will set their own course, including their own unique volatility patterns. Why is that important for you? In short, when traditional assets zig, alternatives often zag, which can help portfolios become more resilient to today’s inevitable bouts of volatility.
On the far left of the chart, we start with a $100,000 investment in 1999 in each of the asset classes and strategies you see listed. As you can see on the far right, the totals you would have earned vary greatly by the end of September 2014, with the S&P 500 Index trailing all of these various alternative investment strategies.
Granted, some of these alternatives have been fairly volatile over this time, but what happens when you build a diversified portfolio of alternatives and compare it to the S&P 500 Index? For the period, you would have gained more than 9% a year with diversified alternatives compared with less than 2% for the index—and you would have done it with less volatility, as measured by standard deviation. Higher returns, less volatility: That’s why we call this option investing smarter.
Source: Morningstar Direct, as of 9/30/14. The diversified alternatives portfolio is represented by an equal-weighted blend of all nine alternative categories shown in the above chart. Please see slides 15 and 16 for index and asset class definitions. It is not possible to invest directly in an index. Diversification does ensure a profit or protect against a loss. Standard deviation measures performance fluctuation, may not be indicative of future risk, and is not a predictor of returns. Correlation is a statistical measure that describes how investments move in relation to each other, which ranges from –1.00 to The closer the number is to 1.00 or –1.00, the more closely the two investments are related. Past performance does not guarantee future results.

8. The benefits of being different
Many alternative assets and strategies have shown low correlation to stocks
Correlation
Global REITs
Real estate investment trusts that typically own and operate
income-producing property
0.63
Emerging-market bonds
Debt securities issued by developing countries, frequently with different economic drivers and rates of inflation than developed nations
0.53
Commodities
Markets where contracts for raw materials such as wheat are exchanged
0.33
Gold
A commodity traditionally used as a store of value and a hedge against inflation
0.06
Emerging-market stocks
Stocks of nations experiencing rapid growth and industrialization, often with a nascent but growing middle class
0.78
Relative value
A strategy predicated on realization of a valuation discrepancy in the relationship between multiple securities
0.58
Macro strategies
Top-down strategies in which the investment process is predicated on movements in underlying economic variables
0.20
Merger arbitrage
A strategy focused on securities of companies that are engaged in a
corporate transaction
0.55
Market neutral
An investment strategy that hedges out specific market risks
0.25
One of the reasons these alternative investment strategies were able to outperform the S&P 500 Index over the lost decade is because they generally exhibit low correlation to equities.
The closer an investment’s correlation is to 1.00, the more closely the investment will mirror the performance of the S&P 500 Index. On the far right, you’ll see the correlation with equities (as measured by the index) for each alternative investment strategy.
But, you may be wondering, if this is such a smart and successful strategy, why hasn’t it been employed more often?
Source: Morningstar Direct, as of 9/30/14. Please see slides 15 and 16 for asset class definitions. It is in not possible to invest directly in an index. Diversification does ensure a profit or protect against a loss. Past performance does not guarantee future results.

9. The average university endowment had a 53% allocation to alternative investments in 2013
Endowment asset allocation in 2013
Survey of 831 universities
What institutional investors have known for some time
Defined benefit plans, university endowments, and other institutional investors have used alternatives for years as a way to help:
53% Alternative strategies
Manage volatility
Make their annual payouts to retirees
Build assets
Well, it has been, by institutional investors.
Take universities, for example. The average university endowment had more than 50% allocated to alternative investments in 2013.
This is not a new development. They are simply following what the larger institutional investor universe has known for some time. That is, defined benefit plans, university endowments, and other institutional investors can use alternatives to help manage volatility, make annual payouts to retirees, and build assets.
Now, doesn’t that sound like something you’d be interested in doing?
18% International equities
16% Domestic equities
10% Fixed income
3% Short-term securities
Source: National Association of College and University Business Officers, 2014.

10. Adding alternatives can help dampen portfolio volatility
A portfolio that included alternatives produced higher risk-adjusted returns
Annual return
4.98%
5.72%
Sharpe ratio¹
0.36
0.47
Standard deviation2
9.21%
8.30%
Ending value of $100,000 invested 1/00 through 9/14
$204,770
$227,162
Traditional portfolio
Traditional portfolio plus alternatives
Stocks
Bonds
Diversified alternatives
Performance results since 2000
The good news: You can, with mutual funds.
Let’s take to second to rewind and see how your portfolio might have fared had you mixed in alternatives before the recent market downturns. In this chart, we compare two portfolios with a starting balance of $100,000 in On the left, we have a traditional portfolio of 40% bonds and 60% stocks. On the right, we’ve maintained the same ratio of stocks to bonds and added alternatives to the mix as well.
Since 2000, the portfolio that included alternatives would have generated higher returns with less volatility. And it’s no surprise that such a combination would have resulted in a higher Sharpe ratio, meaning higher returns per unit of risk.
Of course, the portion of your portfolio that you devote to alternative assets and strategies ultimately depends on your goals, investment time horizon, and the counsel of your financial advisor. But the value is clear.
So, how can you pursue this strategy?
Source: FactSet and Morningstar Direct, as of 9/30/14. Diversified alternatives is represented by an equal-weighted blend of all nine alternative categories shown on slides 7 and 8. Please see slides 15 and 16 for index and asset class definitions. It is not possible to invest directly in an index. Performance figures assume reinvestment of dividends and capital gains. This chart is for illustrative purposes only and does not represent the performance of any John Hancock fund. Diversification does ensure a profit or protect against a loss. Past performance does not guarantee future results.
1 Sharpe ratio is a measure of excess return per unit of risk, as defined by standard deviation. A higher Sharpe ratio suggests better risk-adjusted performance.
2 Standard deviation measures performance fluctuation—generally, the higher the standard deviation, the greater the expected volatility.

11. Investing in alternatives with John Hancock Investments
John Hancock Global Absolute Return Strategies Fund (JHAAX) Managed by Standard Life Investments
Why this fund?
The fund combines a variety of asset classes and strategies to seek to profit from inefficiencies in global markets while providing positive absolute returns over a full market cycle.
Average annual total returns as of 9/30/14 (%)
1 year
3 year
5 year
10 year
Life of fund 12/19/11
Class A (without sales charge)
6.82 —
5.63
Class A (with 5% maximum sales charge)
1.48
3.70
Expense ratio: 1.78%
John Hancock Investments is here to help. We have offered investors exposure to alternative investments since Here are four options worth considering as a way to seek to mitigate volatility, add uncorrelated assets to your portfolio, and potentially increase long-term performance as a result. Of course, I should remind you that past performance does not guarantee future results.
Let’s take a closer look at each of these options.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative, and results for other share classes will vary. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling

12. Investing in alternatives with John Hancock Investments
John Hancock Absolute Return Currency Fund (JCUAX) Managed by First Quadrant
Why this fund?
The fund uses long and short currency positions to pursue positive absolute returns with low overall correlation to stock and bond markets.
Average annual total returns as of 9/30/14¹ (%)
1 year
3 year
5 year
10 year
Life of fund 8/2/10
Class A (without sales charge)
6.83
4.54 –
1.57
Class A (with 3% maximum sales charge)
3.68
3.48
0.83
Expense ratio: 1.53%
John Hancock Investments is here to help. We have offered investors exposure to alternative investments since Here are four options worth considering as a way to seek to mitigate volatility, add uncorrelated assets to your portfolio, and potentially increase long-term performance as a result. Of course, I should remind you that past performance does not guarantee future results.
Let’s take a closer look at each of these options.
1 Prior to 1/31/14, the fund was named John Hancock Currency Strategies Fund.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative, and results for other share classes will vary. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling

13. Investing in alternatives with John Hancock Investments
John Hancock Technical Opportunities Fund (JTCAX) Managed by Wellington Management
Why this fund?
This fund uses a flexible investment approach, with an unconstrained bottom-up stock selection process based on technical analysis.
Average annual total returns as of 9/30/14¹ (%)
1 year
3 year
5 year
10 year
Life of fund 8/3/09
Class A (without sales charge)
10.00
18.51
9.55 –
9.69
Class A (with 5% maximum sales charge)
4.49
16.50
8.43
8.60
Expense ratio: 1.76%
John Hancock Investments is here to help. We have offered investors exposure to alternative investments since Here are four options worth considering as a way to seek to mitigate volatility, add uncorrelated assets to your portfolio, and potentially increase long-term performance as a result. Of course, I should remind you that past performance does not guarantee future results.
Let’s take a closer look at each of these options.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative, and results for other share classes will vary. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling

14. Investing in alternatives with John Hancock Investments
John Hancock Alternative Asset Allocation Fund (JAAAX) Managed by John Hancock Asset Management
Why this fund?
This one-stop solution invests in a diversified portfolio of more than 15 distinct alternative asset classes and strategies to help dampen volatility when combined with more traditional investments
Average annual total returns as of 9/30/14¹ (%)
1 year
3 year
5 year
10 year
Life of fund 1/2/09
Class A (without sales charge)
4.01
5.70
5.85 –
10.65
Class A (with 5% maximum sales charge)
─1.19
3.91
4.77
9.66
Net expense ratio (what you pay): 1.69%2
Gross expense ratio: 1.80%
John Hancock Investments is here to help. We have offered investors exposure to alternative investments since Here are four options worth considering as a way to seek to mitigate volatility, add uncorrelated assets to your portfolio, and potentially increase long-term performance as a result. Of course, I should remind you that past performance does not guarantee future results.
Let’s take a closer look at each of these options.
1 Performance information prior to 12/20/10 reflects an allocation to a different mix of underlying funds and would have been different if the fund had been allocated to its current
mix of underlying funds.
2 Represents the effect of a fee waiver and/or expense reimbursement through 12/31/14 for Class A shares, and is subject to change.
The past performance shown here reflects reinvested distributions and the beneficial effect of any expense reductions, and does not guarantee future results. Returns for periods shorter than one year are cumulative, and results for other share classes will vary. Shares will fluctuate in value and, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance cited, and can be found at jhinvestments.com or by calling

15. Index and term definitions
Bank loans are represented by the Barclays U.S. High-Yield Loan Index, which tracks the performance of U.S. dollar-denominated, below-investment-grade-rated corporate debt publicly issued in the U.S. domestic market.
Commodities are represented by the Morningstar Commodities Index, a broadly representative benchmark of commodities traded via futures contracts on U.S. exchanges.
Emerging-market bonds are represented by the J.P. Morgan Emerging Markets Bond Index (EMBI) Global Index, a market- capitalization-weighted index that tracks the performance of U.S. dollar-denominated Brady bonds, Eurobonds, and traded loans issued by sovereign and quasisovereign entities.
Emerging-market stocks are represented on slide 4 by the MSCI Emerging Markets Index and by the MSCI Emerging Markets Investable Market Index on slides 7 and 8, both of which are designed to track the performance of publicly traded large- and mid- cap emerging-market stocks.
Global real estate investment trusts (REITs) are represented on slide 4 by the Dow Jones Wilshire Global REIT Index, a measure of the types of global real estate securities that represent the ownership and operation of commercial or residential real estate, and on slides 7 and 8 by the FTSE NAREIT All REITs Index, a market-capitalization-weighted index that includes all tax-qualified REITs.
Gold is represented by the Morningstar Gold Commodity Index, a subset of the Morningstar Commodities Index.
High-yield bonds are represented by the Bank of America Merrill Lynch U.S. High Yield Master II Index, which tracks the performance of globally issued, U.S. dollar-denominated high-yield bonds.
International small cap is represented by the MSCI Europe, Australasia, and Far East (EAFE) Small Cap Index tracks the performance of publicly traded small-cap stocks of companies in those regions. Total returns are calculated gross of foreign withholding tax on dividends.
International stocks are represented by the MSCI Europe, Australasia, and Far East (EAFE) Growth Index tracks the performance of publicly traded growth-oriented large- and mid-cap stocks of companies in those regions. Total returns are calculated gross of foreign withholding tax on dividends.
Macro strategies are represented by the HFRI Macro Index, which involves making leveraged bets on anticipated price movements of stock markets, interest rates, foreign exchange, and physical commodities.
It is not possible to invest directly in an index. Past performance does not guarantee future results.
For reference, here are the index and term definitions we used in this presentation.

16. Index and term definitions
Market neutral strategies are represented by the HFRI Equity Market Neutral Index, which seeks to profit by exploiting pricing inefficiencies between related equity securities, neutralizing exposure to market risk by combining long and short positions.
Merger arbitrage strategies are represented by the HFRI Merger Arbitrage Index, sometimes called risk arbitrage, which involves investment in event-driven situations such as leveraged buyouts, mergers, and hostile takeovers.
Natural resources are represented by the MSCI Natural Resources Index, which features equity securities of companies engaged in the natural resources industry.
Relative value strategies are represented by the HFRI Relative Value Index, which maintains positions predicated on realization of a valuation discrepancy in the relationship between multiple securities.
TIPS (Treasury Inflation Protected Securities) are represented by the Barclays U.S. Treasury U.S. TIPS Index, an unmanaged index that consists of inflation-protected securities issued by the U.S. Treasury.
U.S. bonds are represented by the Barclays U.S. Aggregate Bond Index, which tracks the performance of U.S. investment-grade bonds in government, asset-backed, and corporate debt markets.
U.S. stocks are represented by the S&P 500 Index, which tracks the performance of 500 of the largest publicly traded companies in the United States.
U.S. real estate is represented by the FTSE NAREIT Equity REIT Index, an unmanaged index consisting of the most actively
traded REITs.
A diversified alternatives portfolio, an equal weighting of all of the above indexes.
It is not possible to invest directly in an index. Past performance does not guarantee future results.

17. A word about risk
Absolute return funds are not designed to outperform stocks and bonds in strong markets. They employ certain techniques intended to reduce risk and volatility and provide protection against a decline in assets. There is no guarantee that the fund will achieve its objectives. The use of hedging and derivatives may increase volatility and costs. The issuer or grantor of a security, or counterparty to a transaction, may be unable or unwilling to make principal, interest, or settlement payments. Currency transactions are affected by fluctuations in exchange rates, which may adversely affect the U.S. dollar value of a fund’s investments. Illiquid securities may be difficult to sell at a price approximating their value. Investments in higher-yielding, lower-rated securities include a higher risk of default. Absolute Return Currency Fund will use currency transactions to seek to achieve gains. However, losses could exceed the amount invested in the currency instruments. Technical Opportunities Fund may invest its assets in a small number of issuers. Performance could suffer significantly from adverse events affecting these issuers. A portfolio concentrated in one sector or that holds a limited number of securities may fluctuate more than a diversified portfolio. Frequent trading may increase fund transaction costs. Owning an ETF generally reflects the risks of owning the underlying securities it is designed to track. The fund may invest in IPOs, which are frequently volatile in price and may lead to increased portfolio turnover. The fund can invest up to 100% of its assets in cash, which may cause the fund to not meet its investment objective. Alternative Asset Allocation Fund’s performance depends on the advisor’s skill in determining the strategic asset class allocations, the mix of underlying funds, and the performance of those underlying funds. The underlying funds’ performance may be lower than the performance of the asset class they were selected to represent. The fund is subject to the same risks as the underlying funds in which it invests: Stocks and bonds can decline due to adverse issuer, market, regulatory, or economic developments; foreign investing, especially in emerging markets, has additional risks, such as currency and market volatility and political and social instability; the securities of small-capitalization companies are subject to higher volatility than larger, more established companies; and high-yield bonds are subject to additional risks, such as increased risk of default. Fixed-income investments are subject to interest-rate and credit risk; their value will normally decline as interest rates rise or if a creditor is unable or unwilling to make principal or interest payments.
It’s important to understand a fund’s risks. Always read the prospectus carefully before investing.

18. A fund’s investment objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. To obtain a prospectus, contact your financial professional, call John Hancock Investments at , or visit our website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
Thank you very much for your time. If you have any questions, I’d be happy to answer them.
John Hancock Funds, LLC ▪ Member FINRA, SIPC
601 Congress Street ▪ Boston, MA ▪ ▪ jhinvestments.com
NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE. NOT INSURED BY ANY GOVERNMENT AGENCY.
MF DPCPPT 10/14