John Hancock High Yield ETF (JHHY US) - Portfolio Construction Methodology

Core Insights - The John Hancock High Yield ETF (JHHY) aims to maximize current income from USD-denominated below-investment-grade corporate bonds while maintaining characteristics similar to the U.S. high-yield market [1] Investment Strategy - The ETF invests at least 80% of net assets in bonds rated BB–D/Ba–D or unrated equivalents at the time of purchase, covering both U.S. and foreign corporate issuers [1] - There is no average-maturity limit for the portfolio, allowing for flexibility in bond selection [1] Portfolio Construction - The portfolio construction combines top-down sector and interest-rate positioning with bottom-up fundamental analysis and relative-value assessments [1] - The ETF typically targets over 400 positions to ensure high diversification and aims for risk traits comparable to the ICE BofA U.S. High Yield Constrained Index [1] Risk Management - Derivatives such as credit default swaps and foreign-currency swaps may be utilized for risk management, efficient exposure, and return enhancement [1] - The creation and redemption process may be cash-based, which can influence tax efficiency and turnover [1]