John Hancock International Growth Fund Outperformed on TSM

John Hancock International Growth Fund beat its benchmark, the MSCI All Country World ex-USA Growth Index, in the first quarter, driven by security selection in technology. Taiwan Semiconductor Manufacturing Co. was the biggest contributor, benefiting from strong demand for AI-related chips, the fund manager said in its quarterly commentary.

The top detractor was Adyen NV, a Dutch payment-technology company. Its shares slumped after weaker-than-expected financial results, the firm noted.

Management positioned the portfolio for continued economic acceleration. The fund remains overweight growth and valuation-upgrade factors and underweight quality factors, a bet that lower-quality names with higher upside will lead in a reacceleration. As of March 31, the largest sector overweights were in communication services and financials. Healthcare was the biggest underweight.

The broader backdrop was challenging. The Middle East conflict pushed energy prices higher and fueled inflation concerns, creating headwinds for international equities, the commentary said.

TSM, which carries an AlphaScala Alpha Score of 69 out of 100, has been a standout as AI chip demand drives its earnings. The fund's overweight in growth factors suggests the manager expects that trend to persist.

Management remains overweight growth and valuation factors, betting on continued economic acceleration.