John Hancock will be adopting to broaden its mutual fund family rather than selling it. The insurer, which was acquired by Canada's ManuLife last year, will make an announcement as soon as today, reports the Boston Globe.

The deal is expected to encompass Hancock's adoption of eight mutual funds from Grantham, Mayo, Van Otterloo & Co. (GMO), a Boston-based institutional asset manager. While GMO would likely to continue the assets as a subadvisor, Hancock would take over distribution and the other services as the funds' advisor. Hancock is also expected to open its lineup of asset allocation funds to retail investors. Those funds are now limited to 401(k) plans and insurance buyers.

The current John Hancock fund lineup was both undersized and underperforming, according to the Globe, leaving executives with the decision to either grow it or sell it. The fund unit claims $30 billion in assets under management and the majority of its funds receive just one- or two-star ratings from Morningstar while nine percent receive above average ratings. ManuLife, which acquired Boston-based Hancock and then assumed the Hancock name for its U.S.-based business, had no mutual fund business of its own and has instead offered products of other fund managers through its annuity product line.

Hancock is expected to add up to 100 sales and other jobs during the next 18 months in order to support growth in its fund unit.

John D. DesPrez III, chief executive of Hancock's wealth management operations, told the Globe that the adoption is intended to move John Hancock funds "from a second-tier fund company to a first-tier company." He added that the deal would effectively achieve this goal "overnight." 

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