The John Hancock Multi-Manager Lifestyle Balanced Portfolio experienced positive returns during the second quarter of 2025, yet it did not match the performance of its designated benchmark. This outcome stemmed largely from strategic asset allocation choices. While the portfolio's diversified methodology generally aims for stability, it found itself out of sync with a market that aggressively favored growth-oriented investments and leading U.S. technology firms. Consequently, specific overweight positions, such as in fixed income, defensive stocks, and smaller to mid-sized U.S. companies, although contributing positively in absolute terms, hindered the portfolio's comparative showing against the benchmark.
As the second quarter commenced with considerable market volatility, financial landscapes gradually stabilized, culminating in positive overall returns for the three-month period. During this rebound, certain market segments, notably growth stocks, less-established companies, and the behemoths of the U.S. technology sector, demonstrated exceptional strength and led the upward movement. In contrast, the portfolio's deliberate focus on a balanced, multi-manager approach, which includes allocations to diverse asset classes and market capitalizations, meant it did not fully capture the rapid gains seen in these concentrated areas of market exuberance.
The investment team's philosophy emphasizes a disciplined, long-term perspective. Their strategy is rooted in fundamental analysis and a consistent allocation across various asset classes, rather than reacting to short-term market fluctuations or attempting to capitalize on temporary momentum plays. This steadfast approach, while sometimes leading to periods of relative underperformance during sharp, sector-specific rallies, is designed to deliver more consistent and sustainable returns over extended time horizons, prioritizing risk management and capital preservation.
Ultimately, while the portfolio delivered a gain, it was outpaced by its benchmark due to prevailing market dynamics. Growth-oriented equities, companies with lower quality characteristics, and the dominant U.S. technology firms significantly drove market advances. The portfolio's strategic allocation to a more diversified set of assets, including overweight positions in bonds, defensive equities, and U.S. mid and small-cap stocks, while fundamentally sound, did not align with the market's aggressive rally during this specific period. The long-term investment horizon remains the guiding principle, intentionally avoiding speculative market timing or chasing transient trends.