Prospectus Supplement
John Hancock Collateral Trust (the “Trust” or the
“Fund”)
Supplement dated March 28,
2024 to the current Prospectus, as may be supplemented (the Prospectus)
At its meeting held on March 25-28, 2024, the Board of Trustees of the Trust (the Board) approved amendments to the Rule 2a-7 Money Market Compliance Policies and Procedures.
Effective as of April 2, 2024, (the “Effective Date”), the following information supplements and supersedes any information to the contrary relating to the Fund contained in the current Prospectus.
In connection with the Board action described above, the Prospectus is further hereby amended as follows:
1.
The following information in “Item 9. INVESTMENT OBJECTIVES, PRINCIPAL
INVESTMENT STRATEGIES, RELATED RISKS, AND DISCLOSURE OF PORTFOLIO HOLDINGS” is revised and restated as follows:
(b)
Implementation of Investment Objective
The Fund invests only in U.S. dollar-denominated securities that, at
the time of investment, are “eligible securities” as defined by Rule 2a-7 under the Investment Company Act of 1940 (“Rule 2a-7”). These securities may
be issued by:
•
U.S.
and foreign companies;
•
U.S. and foreign banks;
•
U.S. and foreign governments;
•
U.S.
agencies, states and municipalities; and
•
International organizations such as the World Bank and the International Monetary
Fund.
The Fund may also invest in repurchase agreements based on these securities.
The Fund maintains a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. Unlike the Fund’s
dollar-weighted average maturity, the Fund’s dollar-weighted average life is calculated without reference to the reset dates of variable rate debt obligations held by the Fund.
As stated above, the Fund will invest in “eligible
securities” as defined under Rule 2a-7, which include securities issued by another money market fund, government securities or securities that have a remaining maturity
of no more than 397 calendar days and are determined by the Fund’s Board or its delegate to present minimal credit risk based on an assessment of the issuer’s
credit quality, including the capacity of the issuer or guarantor to meet its financial obligations. The Fund’s Board has adopted procedures by which the Adviser will
conduct this initial and ongoing assessment, as required.
The Fund will not acquire any security if, after doing so, more than 5% of its total assets would be invested in illiquid investments. An
“illiquid investment” is an investment that the Fund reasonably expects cannot be sold or disposed of in current market conditions in seven calendar days or less without the sale or disposition significantly changing the market value of the investment.
The Fund, at the time of investment, will have at least 25% of its
assets in cash, direct obligations of the U.S. government or securities readily convertible to cash within one business day. The Fund, at the time of investment, will have at
least 50% of its assets in cash, direct obligations of the U.S. government, including certain government agency securities issued at a discount with remaining maturities of
60 days or less, and securities readily convertible to cash within five business days.
In managing the Fund, the Subadvisor searches aggressively for the
best values on securities that meet the Fund’s credit and maturity requirements. The Subadvisor tends to favor corporate securities and looks for relative yield
advantages between, for example, a company’s secured and unsecured short-term debt obligations.
In pursuing its investment objective and implementing its investment
strategies, the Fund will comply with Rule 2a-7.
Pursuant to Rule 2a-7, the Fund is designated as an
“institutional” money market fund and is required to utilize current market-based prices to value its portfolio securities and transact at a floating net asset
value (NAV) that uses four-decimal-place precision ($10.0000). Because the share price of the Fund will fluctuate, when a shareholder sells its shares, they may be worth more
or less than what the shareholder originally paid for them. Accordingly, a
shareholder may recognize capital gain or loss for federal income tax purposes upon the redemption of Fund shares.
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