John Hancock Preferred Income ETF Q4 2024 Commentary

Summary

• The U.S. bond market declined in Q4 2024 as bond yields rose sharply despite Fed rate cuts, driven by strong economic data and geopolitical factors.
• The John Hancock Preferred Income ETF outperformed its benchmark due to strong security selection in the banking sector and preferred stock, but underperformed in the communications and energy sectors.
• Opportunities exist in lower capital structures of high-quality businesses for income generation and capital preservation, with a preference for defensive sectors like electric utilities.
• The flexibility of the preferred security universe allows for strategic allocation across fixed-income sectors, aiding navigation through softer economic environments.

Torsten Asmus

Highlights

• The U.S. bond market declined in the fourth quarter as bond yields rose sharply.
• The fund outperformed its benchmark, the ICE BofA U.S. All Capital Securities Index.
• Security selection within the banking sector was a positive