John Hancock Preferred Income ETF — Q3 2025 Performance and Outlook

In the third quarter of 2025, the John Hancock Preferred Income ETF navigated a mixed fixed-income backdrop marked by continued rate sensitivity and fluctuating credit spreads. Preferred securities, the fund’s core holdings, reacted to shifting expectations around interest-rate policy and issuer credit fundamentals. Managers emphasized income generation while managing duration exposure and credit risk, positioning the portfolio to capture attractive yields without taking excessive leverage.

Market conditions during Q3 saw investors weigh the prospects for slower rate cuts against resilient economic data. That environment increased volatility for income-oriented sectors, including preferreds, as pricing adjusted to new assumptions on rates and bank capital dynamics. The fund’s managers responded by selectively rotating across sectors and seniority tiers within the preferred market, prioritizing issues with stronger credit profiles and favorable call features.

Allocation strategy focused on maintaining a diversified mix of issuers and coupon structures to moderate downside in volatile trading windows. The team balanced higher-yielding, lower-rated issues with investment-grade and bank-issued preferreds to preserve current income while limiting exposure to deep spread widening. Liquidity considerations also shaped security selection, with emphasis on issues that historically trade with more predictable secondary-market depth.

Distribution policy continued to center on steady income for shareholders. Rather than chasing short-term price appreciation, the fund maintained discipline around coupon capture and regular payouts, which remain central to its value proposition for yield-focused investors. Risk controls — including stress testing across rate and spread scenarios — were highlighted as core to portfolio construction.

Looking ahead, the commentary suggests a cautious but opportunistic stance. If rate volatility stabilizes or search-for-yield persists, preferred securities could offer compelling income opportunities relative to other fixed-income sectors. Conversely, a sharper-than-expected slowdown in economic activity or a sudden widening of credit spreads would raise risks for lower-quality issues, reinforcing the importance of credit selection.

For investors, the takeaway is to consider this ETF as an income-focused allocation within a diversified portfolio, with the understanding that preferred securities carry unique duration and credit sensitivities. The fund’s Q3 positioning reflects a pragmatic effort to balance yield and risk as markets continue to digest evolving macroeconomic signals.