Fixed-income investing at John Hancock Investments

Fixed-income investments have a vital role to play in a broad range of diversified portfolios, from dampening equity volatility to providing current income and pursuing capital preservation.


Fixed-income funds are designed to help:

  • Provide diversification from equities  
  • Generate current income 
  • Add stability to a portfolio

EXPLORE OUR FUNDS

Fixed-income funds are designed to help:

  • Provide diversification from equities  
  • Generate current income 
  • Add stability to a portfolio

EXPLORE OUR FUNDS

Bond investors face new challenges

Bond prices tend to move in the opposite direction of interest rates, and for nearly three decades, longer-term interest rates steadily declined, sending prices on existing bonds higher. Today’s historically low rates have already begun to rise, and bond investors could discover that their portfolios contain more risk than they intend.

 

After 30 years of declining rates, bond investors need new sources of return

Passive strategies have significant exposure to interest-rate risk

Because the income offered today in many bond market sectors is so low, it could take years for coupon payments to make up for capital losses due to rising rates. According to one study, in an average rising-rate scenario (where rates rise 3% over about three years), bondholders in the highest-rated securities could lose more than 22% of their bond portfolios’ principal value during that period.1

Look beyond mainstream bond funds for more promising opportunities

During periods of rising interest rates over the past 30 years, U.S. Treasuries and core U.S. bonds have historically been among the worst performers. 
More specialized sectors, on the other hand, generally fared well, in part because they're less reliant on declining interest rates to fuel performance. Today, these sectors tend to offer higher yields as well.

yield
Annualized return during rising rates

High-yield bonds

Debt issued by lower credit quality companies, typically less sensitive to interest rates and driven more by corporate fundamentals

6.20%

11.66%

Emerging-market debt

Debt issued by governments and corporations within developing economies, often buttressed by strong demographic trends, such as growing consumer classes

6.02%

10.45%

Floating-rate notes

Interest payments on these bank loans made to corporations float along with interest rates, paying higher coupons as rates rise

6.92%

10.13%

Short-term credit

Bonds with shorter maturities are less sensitive to rising rates since bondholders can expect to have their principal repaid relatively soon

3.50%

3.25%

yield
Annualized return during rising rates

Mortgage-backed securities

Income payments to these bonds are derived from pools of mortgages, and as housing fundamentals improve, the risk of defaults tends to decrease

3.77%

2.34%

Core U.S. bonds

U.S. investment-grade bonds dominated by government securities whose returns are driven by rate movements

3.68%

1.71%

10-year U.S. Treasuries

Some of the most heavily traded securities in the world, 10-year U.S. Treasuries are the de facto proxy for intermediate-term interest rates

3.06%

–2.66%

Broadening your fixed-income portfolio can help you lessen risks and potentially boost returns

Adding more types of fixed-income investments to your portfolio doesn’t necessarily mean taking on more risk. In fact, a broadly diversified bond portfolio generated more income and higher returns than an index-oriented portfolio over the past 10 years, and did so with less volatility. 

Traditional index-oriented portfolio
Diversified bond portfolio
Income generation
3.68%
4.48%
Average duration (years)
6.00
4.98
10-year annualized return
3.77%
4.85%
Standard deviation 
(over three years)
2.66%
2.35%
Ending value of $100,000 invested 10 years ago (rebalanced quarterly)
$144,824
$162,335
Core U.S. bonds
Emerging-market debt
High-yield bonds
Mortgage-backed securities
Floating-rate notes
Short-term credit

Finding the best specialized manager for every fund we offer

Our multimanager approach puts us in a unique position to evaluate the skill sets, track records, and experience of today’s portfolio managers, and our fixed-income lineup features a range of portfolios managed by some of the industry’s best teams.

Bain Capital Credit
Breckinridge Capital Advisors
John Hancock Asset Management
Stone Harbor Investment Partners
T. Rowe Price

Explore our fixed-income funds

At John Hancock Investments, our fixed-income funds are designed to pursue a range of investor goals. We’ve offered fixed-income strategies to individual and institutional investors for more than 30 years, and today we oversee nearly $28 billion in fixed-income assets across a range of strategies, managed by some of the best specialized portfolio teams from around the world.

TICKER FUND NAME MANAGED BY MORNINGSTAR CATEGORY USE FOR
JHBIX Bond Fund John Hancock Asset Management Intermediate-Term Bond Diversifying income holdings
JCAFX California Tax-Free Income Fund John Hancock Asset Management Muni California Long Tax planning strategies
JBOIX ESG Core Bond Fund Breckinridge Capital Advisors Intermediate-Term Bond Opportunistic fixed-income holding
JMKIX Emerging Markets Debt Fund John Hancock Asset Management Emerging Markets Bond Diversifying income holdings
JFIIX Floating Rate Income Fund Bain Capital Credit Bank Loan High current income and reducing interest-rate risk
JGIFX Government Income Fund John Hancock Asset Management Intermediate Government High-quality income opportunities
JYHIX High Yield Fund John Hancock Asset Management High Yield Bond Generating income
JHYMX High Yield Municipal Bond Fund John Hancock Asset Management High Yield Muni Tax planning strategies
JSTIX Income Fund John Hancock Asset Management Multisector Bond Diversifying income holdings
JHS Income Securities Trust John Hancock Asset Management Closed-End Intermediate-Term Bond Diversifying income holdings
TIUSX Investment Grade Bond Fund John Hancock Asset Management Intermediate-Term Bond High-quality income opportunities
JHI Investors Trust John Hancock Asset Management Closed-End Multisector Bond Diversifying income
HPI Preferred Income Fund John Hancock Asset Management Closed-End Preferred Stock Diversifying sources of income
HPF Preferred Income Fund II John Hancock Asset Management Closed-End Preferred Stock Diversifying sources of income
HPS Preferred Income Fund III John Hancock Asset Management Closed-End Preferred Stock Diversifying sources of income
JMBIX Short Duration Credit Opportunities Fund Stone Harbor Investment Partners Multisector Bond Diversifying income holdings and reducing interest-rate risk
JIPIX Strategic Income Opportunities Fund John Hancock Asset Management Multisector Bond Diversifying income holdings
JTBDX Tax-Free Bond Fund John Hancock Asset Management Muni National Long Tax planning strategies

Find out more

Flexible is the new core: fixed income investing for the next 30 years 

Read the white paper

 

Investing involves risks, including the potential loss of principal. These products carry many individual risks, including some that are unique to each fund. Please click a fund's name above to learn all of the risks associated with each investment.