Investment Platform Construction
Asset Class Selection
John Hancock Investment Management Services selects the underlying asset classes that are consistent with product specific risk management requirements to be used in the Lifestyle Portfolios.
Manager Selection
Next, they use a proprietary selection process to identify the best-suited investment managers to be used for each asset class.
To begin the construction of the Lifestyle Portfolios, MFC Global optimizes the available asset classes. Thousands of simulations help to create well-diversified portfolios that vary by potential risk and return characteristics.
Once the asset class mixes are determined, DeAM acts as a consultant to help determine the appropriate allocation to the underlying funds and managers to optimize each portfolio?s probability of outperformance.
Ø DeAM analyzes information such as historical returns, risk measures, correlations, and probability of future performance.
Ø The goal is to build Lifestyle Portfolios that maximize the probability of outperforming the asset class allocations while helping to minimize downside risk.
Once the portfolios are complete, MFC Global continually monitors the economic environment and investment markets to determine if any changes are needed.
Ø The Lifestyle Portfolios are monitored daily and incoming cash flows are directed to those underlying funds that most significantly deviate from their target allocations. This process is utilized to help maintain the target allocations.
Ø MFC Global will rebalance the portfolios periodically.
Ø MFC Global may periodically make changes to the percentage of assets in any specific underlying fund if it would better enable the Lifestyle Portfolios to pursue their investment goals.