Summary

• U.S. stocks returned -4.33% in the first quarter, as concern about the viability of artificial intelligence-related investments began to surface and conflict in the Middle East took center stage.
• Growth stocks widely lagged value in Q1, while small-caps bested large-caps following a spike in crude oil prices driven by joint U.S.-Israeli strikes on Iran.
• The financials sector struggled as investors worried that major banks could be at risk from their exposure to private funds that have experienced heavy redemptions.
• U.S. taxable investment-grade bonds were little changed in Q1, as a positive start to the year was upended in March by the sudden rise in geopolitical risk.
• The John Hancock Freedom 529 portfolio recorded a low single-digit loss for the quarter but outperformed its blended benchmark, aided by its tactical overweight of real assets.

Quarterly commentary ^¹,² Highlights

• Although U.S. stocks began the year with positive momentum, they declined in Q1, as the conflict in the Middle East took center stage.

• Joint U.S.-Israeli strikes on Iran began on