Why John Hancock Infrastructure Fund Beat Its Benchmark by a Wide Margin

The John Hancock Infrastructure Fund delivered Q1 2026 results that outpaced the MSCI All Country World Index by a wide margin. The fund's commentary flagged a performance gap large enough to demand an explanation beyond simple sector allocation.

Q1 Outperformance Against a Tech-Heavy Benchmark

A first-pass reading attributes the gap to a rotation out of growth stocks. The MSCI All Country World Index carries a heavy weight in technology stocks, which faced valuation pressure as interest rates adjusted higher in the first quarter. Infrastructure holdings–utilities, transportation, energy infrastructure, and industrial exposures–tend to command lower valuations, higher dividend yields, and earnings tied to contracted revenue or regulated returns. When growth stocks reprice, capital flows rotate toward tangible asset plays. That rotation likely drove the fund's relative advantage.

Why Infrastructure Earnings Can Hold Up Better

The gap between the fund and the ACWI may reflect a more structural factor than a simple growth-to-value shift. Infrastructure funds benefit from visibility in capital spending. Government stimulus programs, energy transition mandates, and data center buildouts create multi-year demand for transmission lines, pipelines, and rail. All of these categories sit inside the fund's mandate. In Q1 2026, several large-scale project announcements in North America and Europe reinforced the case for infrastructure cash flows. The ACWI, by contrast, faced headwinds from currency volatility and uneven earnings in Chinese and emerging-market technology names.

Infrastructure companies can pass cost increases through long-term contracts or regulated tariffs. When inflation stays elevated, that pricing power becomes a premium. The ACWI's technology sector lacks that pass-through in many segments. The result: a divergence in earnings resilience that showed up in stock performance.

MSCI as the Benchmark Under Pressure

The MSCI All Country World Index is constructed by MSCI Inc., a provider with its own market dynamics. MSCI holds an Alpha Score of 46/100, labeled Mixed, in AlphaScala's proprietary ranking system. That score reflects a balance of valuation and growth factors that have not favored the index's technology-heavy composition in the current rate environment. For investors comparing their fund's performance, understanding the index's exposure is as important as the fund's stock selection. The ACWI's tech weight, combined with lower economic sensitivity, makes it a more volatile benchmark for infrastructure strategies.

The wide margin suggests that active management decisions–or the simple structural allocation to infrastructure assets–added value relative to a passive global equity basket. That distinction matters for watchlist decisions. If the macro environment holds with higher rates and steady capex demand, infrastructure funds may continue to generate alpha against broad equity indices. If rate cuts materialize later in 2026, the tech-heavy ACWI could close the gap.

The Next Monitoring Trigger

For investors tracking the John Hancock Infrastructure Fund, the Q1 2026 commentary sets up a clear monitoring trigger. The outperformance may persist if infrastructure earnings remain insulated from the earnings slowdown expected in technology. The key checkpoints are the fund's next holdings disclosure, the trajectory of 10-year Treasury yields, and the pace of government infrastructure contract awards. A widening of the relative performance gap beyond the current quarter would confirm the rotation thesis. A narrowing would signal mean reversion.