UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811- 21416
John Hancock Tax-Advantaged Dividend Income Fund
(Exact name of registrant as specified in charter)
601 Congress Street, Boston,
Massachusetts 02210
(Address of principal
executive offices) (Zip code)
Salvatore
Schiavone
Treasurer
601 Congress Street
Boston, Massachusetts
02210
(Name and address of agent for
service)
Registrant's telephone number, including area code: 617-663-4497
Date of fiscal year end: | October 31 |
Date of reporting period: | October 31, 2017 |
ITEM 1. REPORTS TO STOCKHOLDERS.
John Hancock
Tax-Advantaged Dividend Income Fund
Ticker: HTD
Annual report
10/31/17
Managed distribution plan
On September 19, 2016, the fund adopted a managed distribution plan (Plan). Under the Plan, the fund makes monthly distributions of an amount equal to $0.1380 per share, which will be paid monthly until further notice. The fund may make additional distributions (i) for purposes of not incurring federal income tax on investment company taxable income and net capital gain, if any, not included in such regular distributions and (ii) for purposes of not incurring federal excise tax on ordinary income and capital gain net income, if any, not included in such regular monthly distributions.
The Plan provides that the Board of Trustees of the fund may amend the terms of the Plan or terminate the Plan at any time without prior notice to the fund's shareholders. The Plan is subject to periodic review by the fund's Board of Trustees.
You should not draw any conclusions about the fund's investment performance from the amount of the fund's distributions or from the terms of the Plan. The fund's total return at NAV is presented in the Financial Highlights.
With each distribution that does not consist solely of net investment income, the fund will issue a notice to shareholders and an accompanying press release that will provide detailed information regarding the amount and composition of the distribution and other related information. The amounts and sources of distributions reported in the notice to shareholders are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes. The fund may at times distribute more than its net investment income and net realized capital gains; therefore, a portion of your distribution may result in a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the fund is paid back to you. A return of capital does not necessarily reflect the fund's investment performance and should not be confused with "yield" or "income."
A message to shareholders
Dear shareholder,
Wherever stock investors look today, the markets seem to exhibit undiminished strength, as evidenced by the fact that the Dow Jones Industrial Average, the S&P 500 Index, and the NASDAQ Composite Index reached and then surpassed all-time highs several times during the period. Economic and corporate data has continued to underpin investor optimism. Corporate earnings have generally been solid, with a weaker dollar helping to boost results for U.S.-based multinationals.
While stock markets continue their rise, investors have reason to be vigilant. U.S. stocks haven't experienced a drop of 10% in more than 21 months, and 16 months have passed since the last 5% pullback. This degree of calm in a rising market is rare, and history suggests stormier market conditions could be brewing. As the bull market advances, many stocks are moving deeper into overvalued territory, suggesting that market leaders could be vulnerable to any setbacks.
Given the risks of overvaluation, investors would do well to consider their options for diversification. Maintaining a diversified portfolio of stocks, bonds, and alternatives, alongside a disciplined investment program, is one approach that has stood the test of time. As always, your best resource to prepare for any market condition is your financial advisor, who can help ensure your portfolio is sufficiently diversified to meet your long-term objectives and to withstand the inevitable disappointments that can interrupt any market rise.
On behalf of everyone at John Hancock Investments, I'd like to take this opportunity to welcome new shareholders and to thank existing shareholders for the continued trust you've placed in us.
Sincerely,
Andrew G. Arnott
President and Chief Executive Officer
John Hancock Investments
This commentary reflects the CEO's views, which are subject to change at any time. Investing involves risks, including the potential loss of principal. Diversification does not guarantee a profit or eliminate the risk of a loss. It is not possible to invest directly into an index. For more up-to-date information, please visit our website at jhinvestments.com.
John Hancock
Tax-Advantaged Dividend Income Fund
Table of contents
2 | Your fund at a glance | |
4 | Discussion of fund performance | |
8 | Fund's investments | |
14 | Financial statements | |
18 | Financial highlights | |
19 | Notes to financial statements | |
28 | Auditor's report | |
29 | Tax information | |
30 | Additional information | |
33 | Continuation of investment advisory and subadvisory agreements | |
39 | Trustees and Officers | |
43 | More information |
INVESTMENT OBJECTIVE
The fund seeks to provide a high level of after-tax total return from dividend income and capital appreciation.
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/17 (%)
The index shown is a blended index that is 55% Bank of America Merrill Lynch Preferred Stock DRD Eligible Index and 45% S&P 500 Utilities Index.
The Bank of America Merrill Lynch Preferred Stock DRD Eligible Index consists of investment-grade fixed-rate U.S. dollar-denominated preferred securities and fixed-to-floating-rate securities. The index includes securities having a minimum remaining term of at least one year, Dividend Received Deduction (DRD) eligible preferred stock and senior debt.
The S&P 500 Utilities Index is a capitalization-weighted index that consists of companies in the S&P 500 Index that are primarily involved in water, electrical power, and natural gas distribution industries.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
The performance data contained within this material represents past performance, which does not guarantee future results.
Investment returns and principal value will fluctuate and a shareholder may sustain losses. Further, the fund's performance at net asset value (NAV) is different from the fund's performance at closing market price because the closing market price is subject to the dynamics of secondary market trading. Market risk may be augmented when shares are purchased at a premium to NAV or sold at a discount to NAV. Current month-end performance may be higher or lower than the performance cited. The fund's most recent performance can be found at jhinvestment.com or by calling 800-852-0218.
PERFORMANCE HIGHLIGHTS OVER THE LAST TWELVE MONTHS
Income-producing investments posted solid gains
Results were powered by a relatively favorable interest-rate backdrop, improved issuer fundamentals, and strong investor demand.
Utility and energy-related holdings were some of the fund's best performers
Common stock securities in the utilities and energy sectors generated strong gains.
Certain healthcare and energy companies detracted
Earnings misses and dividend cuts caused several holdings to underperform.
PORTFOLIO COMPOSITION AS OF
10/31/17 (%)
A note about risks
As is the case with all closed-end funds, shares of this fund may trade at a discount or a premium to the fund's net asset value (NAV). An investment in the fund is subject to investment and market risks, including the possible loss of the entire principal invested. There is no guarantee prior distribution levels will be maintained, and distributions may include a substantial return of capital. Fixed-income investments are subject to interest-rate and credit risk; their value will normally decline as interest rates rise or if a creditor, grantor, or counterparty is unable or unwilling to make principal, interest, or settlement payments. Investments in higher-yielding, lower-rated securities are subject to a higher risk of default. An issuer of securities held by the fund may default, have its credit rating downgraded, or otherwise perform poorly, which may affect fund performance. Liquiditythe extent to which a security may be sold or a derivative position closed without negatively affecting its market valuemay be impaired by reduced trading volume, heightened volatility, rising interest rates, and other market conditions. The fund's use of leverage creates additional risks, including greater volatility of the fund's NAV, market price, and returns. There is no assurance that the fund's leverage strategy will be successful. Focusing on a particular industry or sector may increase the fund's volatility and make it more susceptible to market, economic, and regulatory risks as well as other factors affecting those industries or sectors. Derivatives transactions, such as hedging and other strategic transactions, may increase a fund's volatility and could produce disproportionate losses, potentially more than the fund's principal investment.
An interview with Portfolio Manager Joseph H. Bozoyan, CFA, John Hancock Asset Management a division of Manulife Asset Management (US) LLC
Joseph H. Bozoyan, CFA
Portfolio Manager
John Hancock Asset Management
What was the market environment like for income-producing securities during the 12 months ended October 31, 2017?
Income-producing investmentsincluding the preferred securities and utility common stocks that are the main areas of emphasis for the fundperformed well on an absolute basis, benefiting from a mostly favorable interest-rate backdrop, improved issuer fundamentals, and strong demand for such securities from income-oriented investors. The period kicked off on a rather weak note, with income-producing investments performing poorly in the final months of 2016. The election of President Donald Trump and strong third-quarter U.S. economic data ratcheted expectations up for higher inflation and higher interest rates and drove the prices of income producing asset classes lower. Year-end tax-loss sellingwhich investors used to offset investment losses against gainsput additional pressure on income-producers during that span.
But preferred securities and, to a greater extent, utility common stocks, have fared significantly better so far in 2017. Interest-rate and inflation worries subsided as market participants questioned how easily President Trump would be able to push his economic stimulus and tax cuts through Congress. And even though the U.S. Federal Reserve raised short-term policy rates on two occasions in the first nine months of this year, most U.S. Treasury yields remained low and rangebound. That provided a neutral rate backdrop for income-producing asset classes.
Preferreds and utility commons were also bolstered by favorable supply-and-demand dynamics. There was scant issuance of new securities in each category, reducing the already tight supply of them. Utility commons generally posted the biggest gains, powered in part by the stability and visibility of their earnings and cash flow, which allowed them to pay out consistent dividends and added to their attractiveness to income-oriented investors.
What's your view on income-producing investments?
By period end, we felt that income producing investmentsgiven their strong run-up so far in 2017were approaching full valuation. With that in mind, we don't foresee most income-producers gaining much more ground over the short term, although we believe they'll be able to
We are particularly optimistic about the longer-term performance of utility common stocks. Companies continue to upgrade and strengthen their infrastructure and are investing in renewable energy, such as solar and wind. These developments, in our view, position utility companies for accelerated earnings and dividend growth over the next three to five years. Furthermore, utility common stocks look attractively valued when compared to higher-risk sectors within the S&P 500 Index.
What holdings contributed to performance?
The vast majority of the fund's income-producing investments posted gains for the period, but some of the utility common stock holdings were particular standouts. Centerpoint Energy, Inc. was one of
SECTOR COMPOSITION AS OF 10/31/17 (%)
Among our preferred securities holdings, convertible security holdings in Great Plains Energy, Inc. performed well, fueled by news that the company had agreed to a merger with Westar Energy, Inc. As part of its preparation for the merger, Great Plains called (redeemed) the fund's holdings in the company at an attractive premium to the purchase prices, so it is no longer in the portfolio.
What holdings hurt the fund's performance?
Teva Pharmaceutical Industries, Ltd., the world's largest maker of generic drugs, suffered price declines. The company continued to struggle amid increased political scrutiny of drug prices, as well as an earnings miss and dividend cut. Exposure to Kinder Morgan, Inc. detracted from results as well. The common stock of this pipeline company came under pressure, in part because Kinder Morgan's dividend yield remained low after being cut in 2016 when energy prices declined sharply, and investors became increasingly skeptical the company would raise dividends again.
TOP 10 ISSUERS AS OF 10/31/17 (%)
Were there any significant changes to the portfolio?
Low interest rates continued to support attractive conditions for companies to improve their balance sheets, redeeming older, more expensive preferred securities in the process. In the second half, there were a handful of other calls in addition to Great Plains. We were able to replace these with comparably yielding, newly issued securities, most notably the convertible preferreds of Crown Castle International Corp. and the common stock of Macquarrie Infrastructure Corp.
Can you tell us about a recent management change?
Effective August 31, 2017, Gregory Phelps retired. We wish him well.
MANAGED BY
Joseph H. Bozoyan, CFA, JHAM On the fund since 2015 Investing since 1993 |
|
Brad Lutz, CFA, JHAM On the fund since 2017 Investing since 1992 |
|
Gregory McMurran, Analytic Investors On the fund since 2009 Investing since 1976 |
|
Dennis Bein, CFA, Analytic Investors On the fund since 2009 Investing since 1992 |
|
Harindra de Silva, Ph.D., CFA, Analytic Investors On the fund since 2009 Investing since 1988 |
Fund’s investments |
Shares | Value | ||||
Common stocks 74.6% (51.2% of Total investments) | $697,324,603 | ||||
(Cost $434,864,314) | |||||
Energy 11.2% | 104,714,739 | ||||
Oil, gas and consumable fuels 11.2% | |||||
BP PLC, ADR (A)(B) | 980,450 | 39,874,902 | |||
Enbridge, Inc. (A)(B) | 247,106 | 9,503,697 | |||
ONEOK, Inc. | 720,000 | 39,074,400 | |||
Royal Dutch Shell PLC, ADR, Class A | 258,000 | 16,261,740 | |||
Industrials 1.9% | 17,387,500 | ||||
Transportation infrastructure 1.9% | |||||
Macquarie Infrastructure Corp. | 250,000 | 17,387,500 | |||
Telecommunication services 4.0% | 37,797,489 | ||||
Diversified telecommunication services 3.8% | |||||
AT&T, Inc. (A)(B) | 575,000 | 19,348,750 | |||
CenturyLink, Inc. (A)(B) | 355,000 | 6,741,450 | |||
Verizon Communications, Inc. (B) | 199,160 | 9,533,789 | |||
Wireless telecommunication services 0.2% | |||||
Vodafone Group PLC, ADR (A)(B) | 75,000 | 2,173,500 | |||
Utilities 57.5% | 537,424,875 | ||||
Electric utilities 27.3% | |||||
Alliant Energy Corp. | 390,000 | 16,871,400 | |||
American Electric Power Company, Inc. (B) | 590,000 | 43,901,900 | |||
Avangrid, Inc. (A)(B) | 475,000 | 24,571,750 | |||
Duke Energy Corp. (A)(B) | 320,000 | 28,259,200 | |||
Entergy Corp. | 338,000 | 29,155,880 | |||
Eversource Energy (A)(B) | 490,000 | 30,693,600 | |||
FirstEnergy Corp. (A)(B) | 220,000 | 7,249,000 | |||
OGE Energy Corp. (C) | 540,000 | 19,893,600 | |||
Pinnacle West Capital Corp. | 50,000 | 4,385,500 | |||
PPL Corp. (B) | 500,000 | 18,780,000 | |||
The Southern Company (A)(B) | 405,000 | 21,141,000 | |||
Xcel Energy, Inc. (B) | 207,000 | 10,250,640 | |||
Gas utilities 4.2% | |||||
Atmos Energy Corp. | 300,000 | 26,172,000 | |||
ONE Gas, Inc. | 170,000 | 13,086,600 | |||
Multi-utilities 26.0% | |||||
Ameren Corp. | 540,000 | 33,474,600 | |||
Black Hills Corp. (A)(B) | 440,000 | 28,714,400 | |||
CenterPoint Energy, Inc. | 980,000 | 28,988,400 | |||
Dominion Energy, Inc. (A)(B) | 400,000 | 32,456,000 | |||
DTE Energy Company | 250,000 | 27,615,000 | |||
National Grid PLC, ADR (A)(B) | 265,833 | 16,229,105 |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 8 |
Shares | Value | ||||
Utilities (continued) | |||||
Multi-utilities (continued) | |||||
NiSource, Inc. | 770,000 | $20,304,900 | |||
Public Service Enterprise Group, Inc. | 70,000 | 3,444,000 | |||
Vectren Corp. (A)(B)(C) | 760,000 | 51,786,400 | |||
Preferred securities 68.3% (46.9% of Total investments) | $638,465,167 | ||||
(Cost $642,491,554) | |||||
Energy 5.0% | 46,462,959 | ||||
Oil, gas and consumable fuels 5.0% | |||||
Kinder Morgan, Inc., 9.750% (A)(B) | 1,235,717 | 46,462,959 | |||
Financials 37.4% | 349,753,803 | ||||
Banks 23.6% | |||||
Bank of America Corp., 6.204% (B) | 230,000 | 5,947,800 | |||
Bank of America Corp., 6.375% (B) | 139,000 | 3,614,000 | |||
Bank of America Corp., 6.500% (B) | 177,178 | 4,741,283 | |||
Bank of America Corp., 6.625% (B) | 355,000 | 9,233,550 | |||
Barclays Bank PLC, 8.125% (C) | 610,000 | 16,274,800 | |||
BB&T Corp., 5.200% | 480,000 | 12,187,200 | |||
BB&T Corp., 5.625% | 606,000 | 15,477,240 | |||
BB&T Corp. (Callable 11-1-17), 5.200% | 225,000 | 5,676,750 | |||
Citigroup, Inc., 8.125% (A)(B) | 270,400 | 7,565,792 | |||
Citigroup, Inc. (6.875% to 11-15-23, then 3 month LIBOR + 4.130%) (B) | 35,000 | 1,011,150 | |||
Citigroup, Inc. (7.125% to 9-30-23, then 3 month LIBOR + 4.040%) (B) | 210,854 | 6,072,595 | |||
HSBC Holdings PLC, 8.000% (C) | 325,000 | 8,742,500 | |||
HSBC Holdings PLC, 8.125% (B) | 50,000 | 1,361,500 | |||
JPMorgan Chase & Co., 5.450% (B) | 245,000 | 6,164,200 | |||
JPMorgan Chase & Co., 5.500% (B) | 980,000 | 24,598,000 | |||
JPMorgan Chase & Co., 6.100% (B) | 510,000 | 13,708,800 | |||
JPMorgan Chase & Co., 6.125% (B) | 98,888 | 2,650,198 | |||
JPMorgan Chase & Co., 6.700% (B) | 30,000 | 802,500 | |||
Santander Holdings USA, Inc., 7.300% | 120,000 | 3,060,000 | |||
The PNC Financial Services Group, Inc., 5.375% (C) | 280,000 | 7,154,000 | |||
The PNC Financial Services Group, Inc. (6.125% to 5-1-22, then 3 month LIBOR + 4.067%) | 40,000 | 1,128,800 | |||
U.S. Bancorp, 5.150% (C) | 720,000 | 18,489,600 | |||
U.S. Bancorp (6.500% to 1-15-22, then 3 month LIBOR + 4.468%) (B) | 296,000 | 8,518,880 | |||
Wells Fargo & Company, 6.000% (B) | 215,000 | 5,620,100 | |||
Wells Fargo & Company, 8.000% (B) | 1,200,000 | 30,624,000 | |||
Capital markets 12.7% | |||||
Deutsche Bank Contingent Capital Trust II, 6.550% | 10,000 | 257,400 | |||
Deutsche Bank Contingent Capital Trust III, 7.600% (B) | 797,893 | 20,777,134 | |||
Morgan Stanley, 6.625% (B) | 1,057,915 | 28,330,964 | |||
Morgan Stanley (6.375% to 10-15-24, then 3 month LIBOR + 3.708%) (B) | 220,000 | 6,160,000 | |||
Morgan Stanley (7.125% to 10-15-23, then 3 month LIBOR + 4.320%) (B) | 300,000 | 8,685,000 | |||
State Street Corp., 5.250% (B) | 910,000 | 22,913,800 |
9 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Financials (continued) | |||||
Capital markets (continued) | |||||
State Street Corp., 6.000% | 192,065 | $5,172,310 | |||
State Street Corp. (5.900% to 3-15-24, then 3 month LIBOR + 3.108%) (B) | 25,000 | 692,750 | |||
The Bank of New York Mellon Corp., 5.200% | 425,000 | 10,727,000 | |||
The Goldman Sachs Group, Inc., 5.950% (C) | 400,000 | 10,008,000 | |||
The Goldman Sachs Group, Inc., 6.200% (B) | 215,000 | 5,482,500 | |||
Consumer finance 0.7% | |||||
Capital One Financial Corp., 6.200% | 100,183 | 2,706,945 | |||
Capital One Financial Corp., 6.700% | 136,569 | 3,694,191 | |||
Insurance 0.4% | |||||
Aegon NV, 6.500% | 96,512 | 2,514,138 | |||
Prudential Financial, Inc., 5.750% (A)(B) | 47,460 | 1,206,433 | |||
Health care 1.8% | 17,041,551 | ||||
Pharmaceuticals 1.8% | |||||
Teva Pharmaceutical Industries, Ltd., 7.000% | 59,900 | 17,041,551 | |||
Industrials 0.4% | 3,434,574 | ||||
Machinery 0.4% | |||||
Stanley Black & Decker, Inc., 5.750% (A)(B) | 135,326 | 3,434,574 | |||
Real estate 1.5% | 14,311,890 | ||||
Equity real estate investment trusts 1.5% | |||||
Crown Castle International Corp., Series A, 6.875% (B) | 12,000 | 13,173,840 | |||
Ventas Realty LP, 5.450% | 45,000 | 1,138,050 | |||
Telecommunication services 4.1% | 38,087,237 | ||||
Diversified telecommunication services 2.3% | |||||
Qwest Corp., 6.125% (C) | 730,000 | 18,527,400 | |||
Qwest Corp., 7.500% | 34,122 | 882,736 | |||
Verizon Communications, Inc., 5.900% (B) | 60,000 | 1,606,200 | |||
Wireless telecommunication services 1.8% | |||||
Telephone & Data Systems, Inc., 5.875% | 340,000 | 8,595,200 | |||
Telephone & Data Systems, Inc., 6.625% | 39,768 | 1,023,231 | |||
Telephone & Data Systems, Inc., 6.875% | 261,064 | 6,691,070 | |||
United States Cellular Corp., 6.950% | 30,000 | 761,400 | |||
Utilities 18.1% | 169,373,153 | ||||
Electric utilities 13.5% | |||||
Duke Energy Corp., 5.125% | 221,008 | 5,653,385 | |||
Entergy Arkansas, Inc., 4.560% | 9,388 | 943,788 | |||
Entergy Mississippi, Inc., 4.920% | 8,190 | 844,338 | |||
Interstate Power & Light Company, 5.100% (C) | 1,382,023 | 35,407,429 | |||
Mississippi Power Company, 5.250% | 257,500 | 6,592,000 | |||
NextEra Energy Capital Holdings, Inc., 5.000% | 110,000 | 2,781,900 | |||
NextEra Energy, Inc., 6.123% | 206,000 | 11,742,000 |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 10 |
Shares | Value | ||||
Utilities (continued) | |||||
Electric utilities (continued) | |||||
PPL Capital Funding, Inc., 5.900% | 1,063,052 | $27,097,195 | |||
SCE Trust II, 5.100% (A)(B) | 1,275,000 | 32,882,250 | |||
The Southern Company, 6.250% | 80,000 | 2,158,400 | |||
Multi-utilities 4.6% | |||||
Dominion Energy, Inc., 6.750% | 507,000 | 26,531,310 | |||
DTE Energy Company, 5.250% (C) | 166,933 | 4,215,058 | |||
DTE Energy Company, 6.500% (C) | 120,000 | 6,591,600 | |||
Integrys Holding, Inc. (6.000% to 8-1-23, then 3 month LIBOR + 3.220%) | 210,000 | 5,932,500 | |||
Rate (%) | Maturity date | Par value^ | Value | ||
Corporate bonds 1.8% (1.3% of Total investments) | $17,293,750 | ||||
(Cost $16,600,000) | |||||
Consumer discretionary 0.4% | 3,757,500 | ||||
Automobiles 0.4% | |||||
General Motors Financial Company, Inc. (5.750% to 9-30-27, then 3 month LIBOR + 3.598%) (A)(B)(D) | 5.750 | 09-30-27 | 3,600,000 | 3,757,500 | |
Financials 1.1% | 10,150,000 | ||||
Consumer finance 1.1% | |||||
Discover Financial Services (5.500% to 10-30-27, then 3 month LIBOR + 3.076%) (D) | 5.500 | 10-30-27 | 10,000,000 | 10,150,000 | |
Utilities 0.3% | 3,386,250 | ||||
Electric utilities 0.3% | |||||
Southern California Edison Company (6.250% to 2-1-22, then 3 month LIBOR + 4.199%) (D) | 6.250 | 02-01-22 | 3,000,000 | 3,386,250 | |
Yield* (%) | Maturity date | Par value^ | Value | ||
Short-term investments 0.9% (0.6% of Total investments) | $8,100,000 | ||||
(Cost $8,100,000) | |||||
U.S. Government Agency 0.8% | 6,963,000 | ||||
Federal Agricultural Mortgage Corp. Discount Note | 0.850 | 11-01-17 | 410,000 | 410,000 | |
Federal Home Loan Bank Discount Note | 0.500 | 11-01-17 | 1,268,000 | 1,268,000 | |
Federal Home Loan Bank Discount Note | 0.700 | 11-01-17 | 2,861,000 | 2,861,000 | |
Federal Home Loan Bank Discount Note | 0.850 | 11-01-17 | 2,424,000 | 2,424,000 |
Par value^ | Value | ||||
Repurchase agreement 0.1% | 1,137,000 | ||||
Repurchase Agreement with State Street Corp. dated 10-31-17 at 0.340% to be repurchased at $1,137,011 on 11-1-17, collateralized by $1,105,000 U.S. Treasury Inflation Indexed Notes, 0.125% due 4-15-20 (valued at $1,162,496, including interest) | 1,137,000 | 1,137,000 |
11 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Total investments (Cost $1,102,055,868) 145.6% | $1,361,183,520 | ||||
Other assets and liabilities, net (45.6%) | (426,287,439) | ||||
Total net assets 100.0% | $934,896,081 |
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund unless otherwise indicated. | |
^All par values are denominated in U.S. dollars unless otherwise indicated. | |
Security Abbreviations and Legend | |
ADR | American Depositary Receipt |
LIBOR | London Interbank Offered Rate |
(A) | A portion of this security is on loan as of 10-31-17, and is a component of the fund's leverage under the Liquidity Agreement. |
(B) | All or a portion of this security is pledged as collateral pursuant to the Liquidity Agreement. Total collateral value at 10-31-17 was $590,136,419. A portion of the securities pledged as collateral were loaned pursuant to the Liquidity Agreement. The value of securities on loan amounted to $256,059,459. |
(C) | A portion of this security is segregated as collateral for options. Total collateral value at 10-31-17 was $104,720,471. |
(D) | Perpetual bonds have no stated maturity date. Date shown as maturity date is next call date. |
* | Yield represents either the annualized yield at the date of purchase, the stated coupon rate or, for floating rate securities, the rate at period end. |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 12 |
Open contracts | Number
of contracts |
Position | Expiration
date |
Notional
basis* |
Notional
value* |
Unrealized
appreciation (depreciation) |
10-Year U.S. Treasury Note Futures | 980 | Short | Dec 2017 | $(124,212,932) | $(122,438,750) | $1,774,182 |
$1,774,182 |
Options on index | ||||||||
Counterparty
(OTC)/ Exchange- traded |
Name
of issuer |
Exercise
price |
Expiration
date |
Number
of contracts |
Notional
amount |
Premium | Value | |
Calls | ||||||||
Exchange-traded | NASDAQ 100 Stock Index | USD | 6,000.00 | Nov 2017 | 20 | 2,000 | $244,383 | $(522,100) |
Exchange-traded | Russell 2000 Index | USD | 1,430.00 | Dec 2017 | 95 | 9,500 | 366,625 | (779,475) |
Exchange-traded | S&P 500 Index | USD | 2,585.00 | Nov 2017 | 42 | 4,200 | 17,607 | (27,300) |
Exchange-traded | S&P 500 Index | USD | 2,660.00 | Dec 2017 | 265 | 26,500 | 32,293 | (58,300) |
Exchange-traded | S&P 500 Index | USD | 2,575.00 | Jan 2018 | 158 | 15,800 | 720,262 | (746,550) |
$1,381,170 | $(2,133,725) |
Interest rate swaps | ||||||||||
Counterparty
(OTC)/ Centrally cleared |
Notional
amount |
Currency | Payments
made |
Payments
received |
Fixed
payment frequency |
Floating
payment frequency |
Maturity
date |
Unamortized
upfront payment paid (received) |
Unrealized
appreciation (depreciation) |
Value |
Centrally cleared | 107,000,000 | USD | Fixed 2.136% | USD LIBOR BBA(a) | Semi-Annual | Quarterly | Oct 2022 | — | $(199,770) | $(199,770) |
— | $(199,770) | $(199,770) |
(a) | At 10-31-17, the 3 month LIBOR was 1.3812% |
Derivatives currency abbreviations | |
USD | U.S. Dollar |
Derivatives abbreviations | |
BBA | The British Banker's Association |
LIBOR | London Interbank Offered Rate |
13 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial statements
STATEMENT OF ASSETS AND LIABILITIES 10-31-17
Assets | |||||||||||||
Investments, at value (Cost $1,102,055,868) | $1,361,183,520 | ||||||||||||
Cash held at broker for futures contracts | 1,029,000 | ||||||||||||
Dividends and interest receivable | 2,186,967 | ||||||||||||
Receivable for futures variation margin | 76,567 | ||||||||||||
Receivable for centrally cleared swaps | 1,471,921 | ||||||||||||
Other receivables and prepaid expenses | 25,023 | ||||||||||||
Total assets | 1,365,972,998 | ||||||||||||
Liabilities | |||||||||||||
Liquidity agreement | 427,900,000 | ||||||||||||
Due to custodian | 163,605 | ||||||||||||
Written options, at value (premium received $1,381,170) | 2,133,725 | ||||||||||||
Interest payable | 686,754 | ||||||||||||
Payable to affiliates | |||||||||||||
Accounting and legal services fees | 19,988 | ||||||||||||
Trustees' fees | 728 | ||||||||||||
Other liabilities and accrued expenses | 172,117 | ||||||||||||
Total liabilities | 431,076,917 | ||||||||||||
Net assets | $934,896,081 | ||||||||||||
Net assets consist of | |||||||||||||
Paid-in capital | $658,330,704 | ||||||||||||
Undistributed net investment income | 4,270,244 | ||||||||||||
Accumulated net realized gain (loss) on investments, futures contracts, options written, foreign currency transactions and swap agreements | 12,373,143 | ||||||||||||
Net unrealized appreciation (depreciation) on investments, futures contracts, options written, translation of assets and liabilities in foreign currencies and swap agreements | 259,921,990 | ||||||||||||
Net assets | $934,896,081 | ||||||||||||
Net asset value per share | |||||||||||||
Based on 35,384,961 shares of beneficial interest outstanding unlimited number of shares authorized with no par value | $26.42 |
STATEMENT OF OPERATIONS For the year ended 10-31-17
Investment income | ||||||||||||||||||||||||
Dividends | $76,981,706 | |||||||||||||||||||||||
Interest | 282,647 | |||||||||||||||||||||||
Less foreign taxes withheld | (813,798 | ) | ||||||||||||||||||||||
Total investment income | 76,450,555 | |||||||||||||||||||||||
Expenses | ||||||||||||||||||||||||
Investment management fees | 10,064,044 | |||||||||||||||||||||||
Interest expense | 7,006,015 | |||||||||||||||||||||||
Accounting and legal services fees | 312,019 | |||||||||||||||||||||||
Transfer agent fees | 33,066 | |||||||||||||||||||||||
Trustees' fees | 46,085 | |||||||||||||||||||||||
Printing and postage | 285,758 | |||||||||||||||||||||||
Professional fees | 105,184 | |||||||||||||||||||||||
Custodian fees | 107,016 | |||||||||||||||||||||||
Stock exchange listing fees | 34,157 | |||||||||||||||||||||||
Other | 18,709 | |||||||||||||||||||||||
Total expenses | 18,012,053 | |||||||||||||||||||||||
Less expense reductions | (106,319 | ) | ||||||||||||||||||||||
Net expenses | 17,905,734 | |||||||||||||||||||||||
Net investment income | 58,544,821 | |||||||||||||||||||||||
Realized and unrealized gain (loss) | ||||||||||||||||||||||||
Net realized gain (loss) on | ||||||||||||||||||||||||
Investments and foreign currency transactions | 20,683,378 | |||||||||||||||||||||||
Futures contracts | 3,682,258 | |||||||||||||||||||||||
Written options | (3,708,931 | ) | ||||||||||||||||||||||
Swap contracts | (90,362 | ) | ||||||||||||||||||||||
20,566,343 | ||||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) of | ||||||||||||||||||||||||
Investments and translation of assets and liabilities in foreign currencies | 13,050,246 | |||||||||||||||||||||||
Futures contracts | 332,641 | |||||||||||||||||||||||
Written options | (1,658,421 | ) | ||||||||||||||||||||||
Swap contracts | (62,221 | ) | ||||||||||||||||||||||
11,662,245 | ||||||||||||||||||||||||
Net realized and unrealized gain | 32,228,588 | |||||||||||||||||||||||
Increase in net assets from operations | $90,773,409 |
STATEMENTS OF CHANGES IN NET ASSETS
Year ended 10-31-17 | Year ended 10-31-16 | |||||||||||||||||||||||||
Increase (decrease) in net assets | ||||||||||||||||||||||||||
From operations | ||||||||||||||||||||||||||
Net investment income | $58,544,821 | $51,021,194 | ||||||||||||||||||||||||
Net realized gain | 20,566,343 | 7,178,911 | ||||||||||||||||||||||||
Change in net unrealized appreciation (depreciation) | 11,662,245 | 73,396,942 | ||||||||||||||||||||||||
Increase in net assets resulting from operations | 90,773,409 | 131,597,047 | ||||||||||||||||||||||||
Distributions to shareholders | ||||||||||||||||||||||||||
From net investment income | (58,597,495 | ) | (52,113,439 | ) | ||||||||||||||||||||||
From net realized gain | (5,799,595 | ) | | |||||||||||||||||||||||
Total distributions | (64,397,090 | ) | (52,113,439 | ) | ||||||||||||||||||||||
From fund share transactions | ||||||||||||||||||||||||||
Repurchased | | (6,678,427 | ) | |||||||||||||||||||||||
Total increase | 26,376,319 | 72,805,181 | ||||||||||||||||||||||||
Net assets | ||||||||||||||||||||||||||
Beginning of year | 908,519,762 | 835,714,581 | ||||||||||||||||||||||||
End of year | $934,896,081 | $908,519,762 | ||||||||||||||||||||||||
Undistributed net investment income | $4,270,244 | $4,227,705 | ||||||||||||||||||||||||
Share activity | ||||||||||||||||||||||||||
Shares outstanding | ||||||||||||||||||||||||||
Beginning of year | 35,384,961 | 35,711,161 | ||||||||||||||||||||||||
Shares repurchased | | (326,200 | ) | |||||||||||||||||||||||
End of year | 35,384,961 | 35,384,961 |
STATEMENT OF CASH FLOWS For the year ended 10-31-17
Cash flows from operating activities | ||||||
Net increase in net assets from operations | $90,773,409 | |||||
Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities: | ||||||
Long-term investments purchased | (147,768,829) | |||||
Long-term investments sold | 150,271,583 | |||||
Decrease in short-term investments | 6,110,000 | |||||
Decrease in cash held at broker for futures contracts | 294,000 | |||||
Increase in receivable for centrally cleared swaps | (1,471,921) | |||||
Increase in dividends and interest receivable | (147,485) | |||||
Increase in receivable for future variation margin | (153,130) | |||||
Increase in other receivables and prepaid expenses | (11,270) | |||||
Increase in due to custodian | 133,849 | |||||
Decrease in payable for investments purchased | (1,035,568) | |||||
Decrease in unrealized appreciation/depreciation of swap contracts | (137,549) | |||||
Increase in payable for written options | 1,025,577 | |||||
Increase in interest payable | 260,658 | |||||
Decrease in payable to affiliates | (49,609) | |||||
Increase in other liabilities and accrued expenses | 60,000 | |||||
Net change in unrealized (appreciation) depreciation on investments | (13,077,765) | |||||
Net realized gain on investments | (20,678,860) | |||||
Net cash provided by operating activities | $64,397,090 | |||||
Cash flows from financing activities | ||||||
Distributions to common shareholders net of reinvestments | ($64,397,090) | |||||
Net cash used in financing activities | ($64,397,090 | ) | ||||
Net change in cash | | |||||
Cash at beginning of year | | |||||
Cash at end of year | | |||||
Supplemental disclosure of cash flow information: | ||||||
Cash paid for interest | $6,745,357 |
Financial highlights
COMMON SHARES Period Ended | 10-31-17 | 10-31-16 | 10-31-15 | 10-31-14 | 10-31-13 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share operating performance | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, beginning of period | $25.68 | $23.40 | $23.82 | $20.65 | $20.49 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income1 | 1.65 | 1.44 | 1.38 | 1.54 | 1.30 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net realized and unrealized gain (loss) on investments | 0.91 | 2.29 | (0.44 | ) | 2.95 | 0.03 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total from investment operations | 2.56 | 3.73 | 0.94 | 4.49 | 1.33 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Less distributions to common shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net investment income | (1.66 | ) | (1.47 | ) | (1.45 | ) | (1.35 | ) | (1.18 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
From net realized gain | (0.16 | ) | | | | | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total distributions | (1.82 | ) | (1.47 | ) | (1.45 | ) | (1.35 | ) | (1.18 | ) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Anti-dilutive impact of repurchase plan | | 0.02 | 2 | 0.09 | 2 | 0.03 | 2 | 0.01 | 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net asset value, end of period | $26.42 | $25.68 | $23.40 | $23.82 | $20.65 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Per share market value, end of period | $25.60 | $23.83 | $20.98 | $21.84 | $18.34 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return at net asset value (%)3,4 | 10.73 | 16.97 | 5.24 | 23.42 | 7.28 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total return at market value (%)3 | 15.62 | 21.06 | 2.91 | 27.41 | 2.37 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios and supplemental data | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net assets applicable to common shares, end of period (in millions) | $935 | $909 | $836 | $883 | $775 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Ratios (as a percentage of average net assets): | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses before reductions | 1.97 | 1.72 | 1.64 | 1.56 | 1.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Expenses including reductions5 | 1.96 | 1.71 | 1.63 | 1.55 | 1.59 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net investment income | 6.41 | 5.78 | 5.88 | 6.95 | 6.29 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Portfolio turnover (%) | 11 | 18 | 11 | 7 | 23 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Senior securities | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Total debt outstanding end of period (in millions) | $428 | $428 | $428 | $428 | $419 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset coverage per $1,000 of debt6 | $3,185 | $3,123 | $2,953 | $3,063 | $2,850 |
1 | Based on average daily shares outstanding. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2 | The repurchase plan was completed at an average repurchase price of $20.47, $20.33, $18.77 and $18.09, respectively, for 326,200 shares, 1,341,340 shares, 488,887 shares and 193,358 shares, respectively. The repurchases for the periods ended 10-31-16, 10-31-15, 10-31-14 and 10-31-13 were $6,678,427, $27,270,838, $9,175,619 and $3,496,915, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
3 | Total return based on net asset value reflects changes in the fund's net asset value during each period. Total return based on market value reflects changes in market value. Each figure assumes that distributions from income, capital gains and tax return of capital, if any, were reinvested. These figures will differ depending upon the level of any discount from or premium to net asset value at which the fund's shares traded during the period. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
5 | Expenses including reductions excluding interest expense were 1.19%, 1.19%, 1.20%, 1.22% and 1.23% for the periods ended 10-31-17, 10-31-16, 10-31-15, 10-31-14 and 10-31-13, respectively. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
6 | Asset coverage equals the total net assets plus borrowings divided by the borrowings of the fund outstanding at period end (Note 8). As debt outstanding changes, the level of invested assets may change accordingly. Asset coverage ratio provides a measure of leverage. |
Note 1 Organization
John Hancock Tax-Advantaged Dividend Income Fund (the fund) is a closed-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the 1940 Act).
Note 2 Significant accounting policies
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP), which require management to make certain estimates and assumptions as of the date of the financial statements. Actual results could differ from those estimates and those differences could be significant. The fund qualifies as an investment company under Topic 946 of Accounting Standards Codification of US GAAP.
Events or transactions occurring after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the fund:
Security valuation. Investments are stated at value as of the scheduled close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 p.m., Eastern Time. In case of emergency or other disruption resulting in the NYSE not opening for trading or the NYSE closing at a time other than the regularly scheduled close, the net asset value (NAV) may be determined as of the regularly scheduled close of the NYSE pursuant to the fund's Valuation Policies and Procedures.
In order to value the securities, the fund uses the following valuation techniques: Equity securities held by the fund are typically valued at the last sale price or official closing price on the exchange or principal market where the security trades. In the event there were no sales during the day or closing prices are not available, the securities are valued using the last available bid price. Debt obligations are valued based on the evaluated prices provided by an independent pricing vendor or from broker-dealers. Independent pricing vendors utilize matrix pricing which takes into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data, as well as broker supplied prices. Options listed on an exchange are valued at the mean of the most recent bid and ask prices from the exchange where the option trades. Swaps and unlisted options are valued using evaluated prices obtained from an independent pricing vendor. Futures contracts are valued at settlement prices, which are the official closing prices published by the exchange on which they trade. Foreign securities and currencies are valued in U.S. dollars based on foreign currency exchange rates supplied by an independent pricing vendor.
In certain instances, the Pricing Committee may determine to value equity securities using prices obtained from another exchange or market if trading on the exchange or market on which prices are typically obtained did not open for trading as scheduled, or if trading closed earlier than scheduled, and trading occurred as normal on another exchange or market.
Other portfolio securities and assets, for which reliable market quotations are not readily available, are valued at fair value as determined in good faith by the fund's Pricing Committee following procedures established by the Board of Trustees. The frequency with which these fair valuation procedures are used cannot be predicted and fair value of securities may differ significantly from the value that would have been used had a ready market for such securities existed.
The fund uses a three-tier hierarchy to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities. Level 2 includes securities valued using other significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities valued using significant unobservable inputs when market prices are not readily available or reliable, including the fund's own assumptions in determining the fair value of investments. Factors used in determining value may include market or issuer specific events or trends, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques and related inputs may result in transfers into or out of an assigned level within the disclosure hierarchy.
The following is a summary of the values by input classification of the fund's investments as of October 31, 2017, by major security category or type:
Total value at 10-31-17 |
Level 1 quoted price |
Level 2 significant observable inputs |
Level 3 significant unobservable inputs |
||||||||||||||
Investments in securities: | |||||||||||||||||
Assets | |||||||||||||||||
Common stocks | $697,324,603 | $697,324,603 | | | |||||||||||||
Preferred securities | |||||||||||||||||
Energy | 46,462,959 | 46,462,959 | | | |||||||||||||
Financials | 349,753,803 | 349,753,803 | | | |||||||||||||
Healthcare | 17,041,551 | 17,041,551 | | | |||||||||||||
Industrials | 3,434,574 | 3,434,574 | | | |||||||||||||
Real estate | 14,311,890 | 14,311,890 | | | |||||||||||||
Telecommunication services | 38,087,237 | 36,481,037 | $1,606,200 | | |||||||||||||
Utilities | 169,373,153 | 161,652,527 | 7,720,626 | | |||||||||||||
Corporate bonds | 17,293,750 | | 17,293,750 | | |||||||||||||
Short-term investments | 8,100,000 | | 8,100,000 | | |||||||||||||
Total investments in securities | $1,361,183,520 | $1,326,462,944 | $34,720,576 | | |||||||||||||
Derivatives: | |||||||||||||||||
Assets | |||||||||||||||||
Futures | $1,774,182 | $1,774,182 | | | |||||||||||||
Liabilities | |||||||||||||||||
Written options | (2,133,725 | ) | (2,133,725 | ) | | | |||||||||||
Swap contracts | (199,770 | ) | | $(199,770 | ) | |
Repurchase agreements. The fund may enter into repurchase agreements. When the fund enters into a repurchase agreement, it receives collateral that is held in a segregated account by the fund's custodian. The collateral amount is marked-to-market and monitored on a daily basis to ensure that the collateral held is in an amount not less than the principal amount of the repurchase agreement plus any accrued interest. Collateral received by the fund for repurchase agreements is disclosed in the Fund's investments as part of the caption related to the repurchase agreement.
Repurchase agreements are typically governed by the terms and conditions of the Master Repurchase Agreement and/or Global Master Repurchase Agreement (collectively, MRA). Upon an event of default, the non-defaulting party may close out all transactions traded under the MRA and net amounts owed. Absent an event of default, assets and liabilities resulting from repurchase agreements are not offset in the Statement of assets and liabilities. In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the collateral value may decline or the counterparty may have insufficient assets to pay back claims resulting from close-out of the transactions.
Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily NAV calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Interest income includes coupon interest and amortization/accretion of premiums/discounts on debt securities. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by stopping current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful. Dividend income is recorded on the ex-date, except for dividends of foreign securities where the dividend may not be known until after the ex-date. In those cases, dividend income, net of withholding taxes, is recorded when the fund becomes aware of the dividends. Foreign taxes are provided for based on the fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds from litigation.
Foreign taxes. The fund may be subject to withholding tax on income and/or capital gains or repatriation taxes imposed by certain countries in which the fund invests. Taxes are accrued based upon investment income, realized gains or unrealized appreciation.
Overdrafts. Pursuant to the custodian agreement, the fund's custodian may, in its discretion, advance funds to the fund to make properly authorized payments. When such payments result in an overdraft, the fund is obligated to repay the custodian for any overdraft, including any costs or expenses associated with the overdraft. The custodian may have a lien, security interest or security entitlement in any fund property that is not otherwise segregated or pledged, to the maximum extent permitted by law, to the extent of any overdraft.
Expenses. Within the John Hancock group of funds complex, expenses that are directly attributable to an individual fund are allocated to such fund. Expenses that are not readily attributable to a specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund's relative net assets. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Federal income taxes. The fund intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.
As of October 31, 2017, the fund had no uncertain tax positions that would require financial statement recognition, derecognition or disclosure. The fund's federal tax returns are subject to examination by the Internal Revenue Service for a period of three years.
Managed distribution plan. On September 19, 2016, the fund adopted a managed distribution plan (Plan). Under the Plan, the fund makes monthly distributions of an amount equal to $0.1380 per share, which will be paid monthly until further notice.
Distributions under the Plan may consist of net investment income, net realized long-term capital gains, net realized short-term capital gains and, to the extent necessary, return of capital. Return of capital distributions may be necessary when the fund's net investment income and net capital gains are insufficient to meet the minimum distribution. In addition, the fund may also make additional distributions for the purpose of not incurring federal income and excise taxes.
The Board of Trustees may terminate or reduce the amount paid under the Plan at any time. The termination or reduction may have an adverse effect on the market price of the fund's shares.
Distribution of income and gains. Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The fund generally declares and pays dividends monthly and capital gain distributions, if any, annually. The tax character of distributions for the years ended October 31, 2017 and 2016 was as follows:
October 31, 2017 | October 31, 2016 | |
Ordinary income | $58,597,495 | $52,113,439 |
Long-term capital gain | 5,799,595 | |
Total | $64,397,090 | $52,113,439 |
As of October 31, 2017, the components of distributable earnings on a tax basis consisted of $4,305,901 of undistributed ordinary income and $18,628,649 of undistributed long-term capital gains.
Such distributions and distributable earnings, on a tax basis, are determined in conformity with income tax regulations, which may differ from US GAAP. Distributions in excess of tax basis earnings and profits, if any, are reported in the fund's financial statements as a return of capital.
Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any, will reverse in a subsequent period. Book-tax differences are primarily attributable to wash sale loss deferrals and derivative transactions.
Statement of cash flows. Information on financial transactions that have been settled through the receipt and disbursement of cash is presented in the Statement of cash flows. The cash amount shown in the Statement of cash flows is the amount included in the fund's Statement of assets and liabilities and represents the cash on hand at the fund's custodian and does not include any short-term investments or cash held at broker for futures contracts.
Note 3 Derivative instruments
The fund may invest in derivatives in order to meet its investment objective. Derivatives include a variety of different instruments that may be traded in the over-the-counter (OTC) market, on a regulated exchange or through a clearing facility. The risks in using derivatives vary depending upon the structure of the instruments, including the use of leverage, optionality, the liquidity or lack of liquidity of the contract, the creditworthiness of the counterparty or clearing organization and the volatility of the position. Some derivatives involve risks that are potentially greater than the risks associated with investing directly in the referenced securities or other referenced underlying instrument. Specifically, the fund is exposed to the risk that the counterparty to an OTC derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction.
Certain swaps are typically traded through the OTC market. Certain options and swaps are regulated by the Commodity Futures Trading Commission. Derivative counterparty risk is managed through an ongoing evaluation of the creditworthiness of all potential counterparties and, if applicable, designated clearing organizations. The fund attempts to reduce its exposure to counterparty risk for derivatives traded in the OTC market, whenever possible, by entering into an International Swaps and Derivatives Association (ISDA) Master Agreement with each of its OTC counterparties. The ISDA gives each party to the agreement the right to terminate all transactions traded under the agreement if there is certain deterioration in the credit quality or contractual default of the other party, as defined in the ISDA. Upon an event of default or a termination of the ISDA, the non-defaulting party has the right to close out all transactions and to net amounts owed.
Futures and certain options are traded on an exchange. Exchange-traded transactions generally present less counterparty risk to a fund than OTC transactions. The exchange stands between the fund and the broker to the contract and therefore, credit risk is generally limited to the failure of the exchange and the clearing member.
Centrally-cleared swap contracts are subject to clearinghouse rules, including initial and variation margin requirements, daily settlement of obligations and the clearinghouse guarantee of payments to the broker. There is, however, still counterparty risk due to the potential insolvency of the broker with respect to any margin held in the brokers' customer accounts. While clearing members are required to segregate customer assets from their own assets, in the event of insolvency, there may be a shortfall in the amount of margin held by the broker for its clients. Collateral or margin requirements for exchange-traded or centrally-cleared derivatives are set by the broker or applicable clearinghouse. Margin for exchange-traded and centrally-cleared transactions is detailed in the Statement of assets and liabilities as Cash held at broker for futures contracts and receivable for centrally cleared swaps, respectively. Securities pledged by the fund for exchange-traded and centrally-cleared transactions, if any, are identified in the Fund's investments.
Futures. A futures contract is a contractual agreement to buy or sell a particular currency or financial instrument at a pre-determined price in the future. Risks related to the use of futures contracts include possible illiquidity of the futures markets, contract prices that can be highly volatile and imperfectly correlated to movements in the underlying financial instrument and potential losses in excess of the amounts recognized on the Statement of assets and liabilities. Use of long futures contracts subjects the fund to the risk of loss up to the notional value of the futures contracts. Use of short futures contracts subjects the fund to unlimited risk of loss.
Upon entering into a futures contract, the fund is required to deposit initial margin with the broker in the form of cash or securities. The amount of required margin is generally based on a percentage of the contract value; this amount is the initial margin for the trade. The margin deposit must then be maintained at the established level over the life of the contract. Futures margin receivable / payable is included on the Statement of assets and liabilities. Futures contracts are marked-to-market daily and an appropriate payable or receivable for the change in value (variation margin) and unrealized gain or loss is recorded by the fund. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed.
During the year ended October 31, 2017, the fund used futures contracts to manage against anticipated interest rate changes. The fund held futures contracts with USD notional values ranging up to $127.0 million, as measured at each quarter end.
Options. There are two types of options, put options and call options. Options are traded either OTC or on an exchange. A call option gives the purchaser of the option the right to buy (and the seller the obligation to sell) the underlying instrument at the exercise price. A put option gives the purchaser of the option the right to sell (and the writer the obligation to buy) the underlying instrument at the exercise price. Writing puts and buying calls may increase the fund's exposure to changes in the value of the underlying instrument. Buying puts and writing calls may decrease the fund's exposure to such changes. Risks related to the use of options include the loss of premiums, possible illiquidity of the options markets, trading restrictions imposed by an exchange and movements in underlying security values, and for written options, potential losses in excess of the amounts recognized on the Statement of assets and liabilities. In addition, OTC options are subject to the risks of all OTC derivatives contracts.
When the fund purchases an option, the premium paid by the fund is included in the Fund's investments and subsequently "marked-to-market" to reflect current market value. If the purchased option expires, the fund realizes a loss equal to the cost of the option. If the fund exercises a call option, the cost of the securities acquired by exercising the call is increased by the premium paid to buy the call. If the fund exercises a put option, it realizes a gain or loss from the sale of the underlying security and the proceeds from such sale are decreased by the premium paid. If the fund enters into a closing sale transaction, the fund realizes a gain or loss, depending on whether proceeds from the closing sale are greater or less than the original cost. When the fund writes an option, the premium received is included as a liability and subsequently "marked-to-market" to reflect the current market value of the option written. Premiums received from writing options that expire unexercised are recorded as realized gains. Premiums received from writing options which are exercised or are closed are added to or offset against the proceeds or amount paid on the transaction to determine the realized gain or loss. If a put option on a security is exercised, the premium received reduces the cost basis of the securities purchased by the fund.
During the year ended October 31, 2017, the fund wrote option contracts to hedge against changes in securities markets and to generate potential income. The fund held written options contracts with market values from $0.5 million to $2.1 million, as measured at each quarter end.
Interest rate swaps. Interest rate swaps represent an agreement between the fund and a counterparty to exchange cash flows based on the difference between two interest rates applied to a notional amount. The payment flows are usually netted against each other, with the difference being paid by one party to the other. The fund settles accrued net interest receivable or payable under the swap contracts at specified, future intervals. Swap agreements are privately negotiated in the OTC market or may be executed on a registered commodities exchange (centrally cleared swaps). Swaps are marked-to-market daily and the change in value is recorded as unrealized appreciation/depreciation of swap contracts. A termination payment by the counterparty or the fund is recorded as realized gain or loss, as well as the net periodic payments received or paid by the fund. The value of the swap will typically impose collateral posting obligations on the party that is considered out-of-the-money on the swap.
Entering into swap agreements involves, to varying degrees, elements of credit, market and documentation risk that may provide outcomes that are in excess of the amounts recognized on the Statement of assets and liabilities. Such risks involve the possibility that there will be no liquid market for the swap, or that a counterparty may default on its obligation or delay payment under the swap terms. The counterparty may disagree or contest the terms of the swap. In addition to interest rate risk, market risks may also impact the swap. The fund may also suffer losses if it is unable to terminate or assign outstanding swaps or reduce its exposure through offsetting transactions.
During the year ended October 31, 2017, the fund used interest rate swaps to manage against anticipated interest rate changes. The fund held interest rate swaps with total USD notional amounts ranging up to $107.0 million, as measured at each quarter end.
Fair value of derivative instruments by risk category
The table below summarizes the fair value of derivatives held by the fund at October 31, 2017 by risk category:
Risk | Statement of assets and liabilities location |
Financial instruments location |
Assets derivatives fair value |
Liabilities derivatives fair value |
|||||||||||||
Interest rate | Receivable/payable for futures | Futures | $1,774,182 | | |||||||||||||
Equity | Written options, at value | Written options | | ($2,133,725 | ) | ||||||||||||
Interest rate | Receivable for centrally cleared swaps | Interest rate swaps^ | | (199,770 | ) | ||||||||||||
$1,774,182 | ($2,333,495 | ) | |||||||||||||||
Reflects cumulative appreciation/depreciation on futures as disclosed in Fund's investments. Only the year end variation margin is separately disclosed on the Statement of assets and liabilities. | |||||||||||||||||
^ Reflects cumulative value of swap contracts. Receivable for centrally cleared swaps, which includes value and margin, is shown on the Statement of assets and liabilities. Margin on centrally cleared swaps at October 31, 2017 amounted to $1,671,691. |
For financial reporting purposes, the fund does not offset OTC derivative assets or liabilities that are subject to master netting arrangements, as defined by the ISDAs, in the Statement of assets and liabilities. In the event of default by the counterparty or a termination of the agreement, the ISDA allows an offset of amounts across the various transactions between the fund and the applicable counterparty.
Effect of derivative instruments on the Statement of operations
The table below summarizes the net realized gain (loss) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the year ended October 31, 2017:
Statement of operations location - net realized gain (loss) on: | ||||||||||||||
Risk | Futures contracts |
Written options |
Swap contracts |
Total | ||||||||||
Equity | | ($3,708,931 | ) | | ($3,708,931 | ) | ||||||||
Interest rate | $3,682,258 | | ($90,362 | ) | 3,591,896 | |||||||||
Total | $3,682,258 | ($3,708,931 | ) | ($90,362 | ) | ($117,035 | ) |
The table below summarizes the net change in unrealized appreciation (depreciation) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the year ended October 31, 2017:
Statement of operations location - change in net unrealized appreciation (depreciation) of: | ||||||||||||||
Risk | Futures contracts |
Written options |
Swap contracts |
Total | ||||||||||
Equity | | ($1,658,421 | ) | | ($1,658,421 | ) | ||||||||
Interest rate | $332,641 | | ($62,221 | ) | 270,420 | |||||||||
Total | $332,641 | ($1,658,421 | ) | ($62,221 | ) | ($1,388,001 | ) |
Note 4 Guarantees and indemnifications
Under the fund's organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund enters into contracts with service providers that contain general indemnification clauses. The fund's maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the fund that have not yet occurred. The risk of material loss from such claims is considered remote.
Note 5 Fees and transactions with affiliates
John Hancock Advisers, LLC (the Advisor) serves as investment advisor for the fund. The Advisor is an indirect, wholly owned subsidiary of Manulife Financial Corporation (MFC).
Management fee. The fund has an investment management agreement with the Advisor under which the fund pays a daily management fee to the Advisor equivalent on an annual basis to 0.75% of the fund's average daily managed assets
(net assets plus borrowings under the Liquidity Agreement) (see Note 8). The Advisor has a subadvisory agreement with John Hancock Asset Management a division of Manulife Asset Management (US) LLC, an indirectly owned subsidiary of MFC and an affiliate of the Advisor, and a subadvisory agreement with Analytic Investors, LLC. The fund is not responsible for payment of the subadvisory fees.
The Advisor has contractually agreed to waive a portion of its management fee and/or reimburse expenses for certain funds of the John Hancock group of funds complex, including the fund (the participating portfolios). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund. During the year ended October 31, 2017, this waiver amounted to 0.01% of the fund's average daily managed assets. This arrangement may be amended or terminated at any time by the Advisor upon notice to the fund and with the approval of the Board of Trustees.
The expense reductions described above amounted to $106,319 for the year ended October 31, 2017.
Expenses waived or reimbursed in the current fiscal period are not subject to recapture in future fiscal periods.
The investment management fees, including the impact of the waivers and reimbursements as described above, incurred for the year ended October 31, 2017 were equivalent to a net annual effective rate of 0.74% of the fund's average daily managed assets.
Accounting and legal services. Pursuant to a service agreement, the fund reimburses the Advisor for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services to the fund, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. These accounting and legal services fees incurred for the year ended October 31, 2017 amounted to an annual rate of 0.02% of the fund's average daily managed assets.
Trustee expenses. The fund compensates each Trustee who is not an employee of the Advisor or its affiliates. These Trustees receive from the fund and the other John Hancock closed-end funds an annual retainer. In addition, Trustee out-of-pocket expenses are allocated to the fund based on its net assets relative to other funds within the John Hancock group of funds complex.
Note 6 Fund share transactions
In December 2007, the Board of Trustees approved a share repurchase plan, which is subsequently reviewed and approved by the Board of Trustees each year in December. Under the current share repurchase plan, the fund may purchase in the open market up to 10% of its outstanding common shares as of December 31, 2016. The current share repurchase plan will remain in effect between January 1, 2017 and December 31, 2017.
During the year ended October 31, 2017, there was no activity under the share repurchase plan. For the year ended October 31, 2016, the fund repurchased 0.91% of its common shares outstanding under the repurchase program. The weighted average discount per share on these repurchases amount to 11.56% for the year ended October 31, 2016. Shares repurchased and corresponding dollar amounts are included on the Statements of changes in net assets. The anti-dilutive impacts of these share repurchases are included on the Financial highlights.
Note 7 Leverage risk
The fund utilizes a Liquidity Agreement to increase its assets available for investment. When the fund leverages its assets, common shareholders bear the fees associated with the Liquidity Agreement and have potential to benefit or be disadvantaged from the use of leverage. The Advisor's fee is also increased in dollar terms from the use of leverage. Consequently, the fund and the Advisor may have differing interests in determining whether to leverage the fund's assets. Leverage creates risks that may adversely affect the return for the holders of common shares, including:
| the likelihood of greater volatility of NAV and market price of common shares; |
| fluctuations in the interest rate paid for the use of the Liquidity Agreement; |
| increased operating costs, which may reduce the fund's total return; |
| the potential for a decline in the value of an investment acquired through leverage, while the fund's obligations under such leverage remains fixed; and |
| the fund is more likely to have to sell securities in a volatile market in order to meet asset coverage or other debt compliance requirements. |
To the extent the income or capital appreciation derived from securities purchased with funds received from leverage exceeds the cost of leverage, the fund's return will be greater than if leverage had not been used; conversely, returns would be lower if the cost of the leverage exceeds the income or capital appreciation derived. The use of securities lending to obtain leverage in the fund's investments may subject the fund to greater risk of loss than would reinvestment of collateral in short term highly rated investments.
In addition to the risks created by the fund's use of leverage, the fund is subject to the risk that it would be unable to timely, or at all, obtain replacement financing if the Liquidity Agreement is terminated. Were this to happen, the fund would be required to de-leverage, selling securities at a potentially inopportune time and incurring tax consequences. Further, the fund's ability to generate income from the use of leverage would be adversely affected.
Note 8 Liquidity agreement
The fund has entered into a Liquidity Agreement (LA) with State Street Bank and Trust Company (SSB) that allows it to borrow or otherwise access up to $428 million (maximum facility amount) through a line of credit, securities lending and reverse repurchase agreements. The amounts outstanding at October 31, 2017 are shown in the Statement of assets and liabilities as the Liquidity agreement.
The fund pledges its assets as collateral to secure obligations under the LA. The fund retains the risks and rewards of the ownership of assets pledged to secure obligations under the LA and makes these assets available for securities lending and reverse repurchase transactions with SSB acting as the fund's authorized agent for these transactions. All transactions initiated through SSB are required to be secured with cash collateral received from the securities borrower (the Borrower) or cash is received from the reverse repurchase agreement (Reverse Repo) counterparties. Securities lending transactions will be secured with cash collateral in amounts at least equal to 100% of the market value of the securities utilized in these transactions. Cash received by SSB from securities lending or Reverse Repo transactions is credited against the amounts borrowed under the line of credit.
Upon return of securities by the Borrower or Reverse Repo counterparty, SSB will return the cash collateral to the Borrower or proceeds from the Reverse Repo, as applicable, which will eliminate the credit against the line of credit and will cause the drawdowns under the line of credit to increase by the amounts returned. Income earned on the loaned securities is retained by SSB, and any interest due on the reverse repurchase agreements is paid by SSB.
SSB has indemnified the fund for certain losses that may arise if the Borrower or a Reverse Repo Counterparty fails to return securities when due. With respect to securities lending transactions, upon a default of the securities borrower, SSB uses the collateral received from the Borrower to purchase replacement securities of the same issue, type, class and series. If the value of the collateral is less than the purchase cost of replacement securities, SSB is responsible for satisfying the shortfall but only to the extent that the shortfall is not due to any of the fund's losses on the reinvested cash collateral. Although the risk of the loss of the securities is mitigated by receiving collateral from the Borrower or proceeds from the Reverse Repo counterparty and through SSB indemnification, the fund could experience a delay in recovering securities or could experience a lower than expected return if the Borrower or Reverse Repo counterparty fails to return the securities on a timely basis.
Under normal circumstances, interest charged is at the rate of one month LIBOR (London Interbank Offered Rate) plus 0.625%, is payable monthly on the aggregate balance of the drawdowns outstanding under the LA. As of October 31, 2017, the fund had an aggregate balance of $427,900,000 at an interest rate of 1.87%, which is reflected in the Liquidity agreement on the Statement of assets and liabilities. During the year ended October 31, 2017, the average balance of the LA and the effective average interest rate were $427,900,000 and 1.64%, respectively.
After the six month anniversary of the effective date of the agreement, the fund may terminate the LA with 60 days' notice. If certain asset coverage and collateral requirements, or other covenants are not met, the LA could be deemed in default and result in termination. Absent a default or facility termination event, SSB is required to provide the fund with 360 days' notice prior to terminating the LA.
Note 9 Purchase and sale of securities
Purchases and sales of securities, other than short-term investments, amounted to $147,768,829 and $150,271,583, respectively, for the year ended October 31, 2017.
Note 10 Industry or sector risk
The fund may invest a large percentage of its assets in one or more particular industries or sectors of the economy. If a large percentage of the fund's assets are economically tied to a single or small number of industries or sectors of the economy, the fund will be less diversified than a more broadly diversified fund, and it may cause the fund to underperform if that industry or sector underperforms. In addition, focusing on a particular industry or sector may make the fund's NAV more volatile. Further, a fund that invests in particular industries or sectors is particularly susceptible to the impact of market, economic, regulatory and other factors affecting those industries or sectors.
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of John Hancock Tax-Advantaged Dividend Income Fund:
In our opinion, the accompanying statement of assets and liabilities, including the fund's investments, and the related statements of operations, of changes in net assets, and of cash flows and the financial highlights present fairly, in all material respects, the financial position of the John Hancock Tax-Advantaged Dividend Income Fund (the "Fund") as of October 31, 2017, the results of its operations and its cash flows for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities as of October 31, 2017 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
Boston, Massachusetts
December 15, 2017
Unaudited
For federal income tax purposes, the following information is furnished with respect to the distributions of the fund, if any, paid during its taxable year ended October 31, 2017.
The fund reports the maximum amount allowable of its net taxable income as eligible for the corporate dividends-received deduction.
The fund reports the maximum amount allowable of its net taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The fund paid $5,799,595 in capital gain dividends.
Eligible shareholders will be mailed a 2017 Form 1099-DIV in early 2018. This will reflect the tax character of all distributions paid in calendar year 2017.
Please consult a tax advisor regarding the tax consequences of your investment in the fund.
Unaudited
Investment objective and policy
The fund is a closed-end, diversified management investment company, common shares of which were initially offered to the public on February 25, 2004, and are publicly traded on the New York Stock Exchange (the NYSE). The fund's investment objective is to provide a high level of after-tax total return from dividend income and capital appreciation. The fund utilizes a credit facility agreement to increase its assets available for investments.
Under normal market conditions, the fund will invest at least 80% of its assets (net assets plus borrowings for investment purposes) in dividend-paying common and preferred securities that the subadvisors believe at the time of acquisition are eligible to pay dividends which, for individual shareholders, qualify for U.S. federal income taxation at rates applicable to long-term capital gains, which are currently taxed to noncorporate taxpayers at a maximum rate of 20% (15% or 0% for individuals in certain tax brackets) (tax-advantaged dividends). The fund will notify shareholders at least 60 days prior to any change in this 80% investment policy. Tax-advantaged dividends generally include dividends from domestic corporations and dividends from foreign corporations that meet certain specified criteria. The fund generally can pass the tax treatment of tax-advantaged dividends it receives through to its common shareholders. The fund may write (sell) covered call index options on up to 30% of the value of the fund's total assets.
Dividends and distributions
During the year ended October 31, 2017, distributions from net investment income totaling $1.6560 per share and distributions from capital gains totaling $0.1639 per share were paid to shareholders. The dates of payments and the amounts per share were as follows:
Payment Date | Income Distributions |
November 30, 2016 | $0.1380 |
December 19, 2016 | 0.1380 |
January 31, 2017 | 0.1380 |
February 28, 2017 | 0.1380 |
March 31, 2017 | 0.1380 |
April 28, 2017 | 0.1380 |
May 31, 2017 | 0.1380 |
June 30, 2017 | 0.1380 |
July 31, 2017 | 0.1380 |
August 31, 2017 | 0.1380 |
September 29, 2017 | 0.1380 |
October 31, 2017 | 0.1380 |
Total | $1.6560 |
Payment Date | Additional Distributions |
December 19, 2016 | $0.1639 |
Total | $1.8199 |
Dividend reinvestment plan
The fund's Dividend Reinvestment Plan (the Plan) provides that distributions of dividends and capital gains are automatically reinvested in common shares of the fund by Computershare Trust Company, N.A. (the Plan Agent). Every shareholder holding at least one full share of the fund is entitled to participate in the Plan. In addition, every shareholder who became a shareholder of the fund after June 30, 2011, and holds at least one full share of the fund will be automatically enrolled in the Plan. Shareholders may withdraw from the Plan at any time and shareholders who do not participate in the Plan will receive all distributions in cash.
If the fund declares a dividend or distribution payable either in cash or in common shares of the fund and the market price of shares on the payment date for the distribution or dividend equals or exceeds the fund's net asset value per share (NAV), the fund will issue common shares to participants at a value equal to the higher of NAV or 95% of the market price. The number of additional shares to be credited to each participant's account will be determined by dividing the dollar amount of the distribution or dividend by the higher of NAV or 95% of the market price. If the market price is lower than NAV, or if dividends or distributions are payable only in cash, then participants will receive shares purchased by the Plan Agent on participants' behalf on the NYSE or otherwise on the open market. If the market price exceeds NAV before the Plan Agent has completed its purchases, the average per share purchase price may exceed NAV, resulting in fewer shares being acquired than if the fund had issued new shares.
There are no brokerage charges with respect to common shares issued directly by the fund. However, whenever shares are purchased or sold on the NYSE or otherwise on the open market, each participant will pay a pro rata portion of brokerage trading fees, currently $0.05 per share purchased or sold. Brokerage trading fees will be deducted from amounts to be invested.
The reinvestment of dividends and net capital gains distributions does not relieve participants of any income tax that may be payable on such dividends or distributions.
Shareholders participating in the Plan may buy additional shares of the fund through the Plan at any time in amounts of at least $50 per investment, up to a maximum of $10,000, with a total calendar year limit of $100,000. Shareholders will be charged a $5 transaction fee plus $0.05 per share brokerage trading fee for each order. Purchases of additional shares of the fund will be made on the open market. Shareholders who elect to utilize monthly electronic fund transfers to buy additional shares of the fund will be charged a $2 transaction fee plus $0.05 per share brokerage trading fee for each automatic purchase. Shareholders can also sell fund shares held in the Plan account at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agent's website at www.computershare.com/investor. The Plan Agent will mail a check (less applicable brokerage trading fees) on settlement date. Pursuant to regulatory changes, effective September 5, 2017, the settlement date is changed from three business days after the shares have been sold to two business days after the shares have been sold. If shareholders choose to sell shares through their stockbroker, they will need to request that the Plan Agent electronically transfer those shares to their stockbroker through the Direct Registration System.
Shareholders participating in the Plan may withdraw from the Plan at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agent's website at www.computershare.com/investor. Such termination will be effective immediately if the notice is received by the Plan Agent prior to any dividend or distribution record date; otherwise, such termination will be effective on the first trading day after the payment date for such dividend or distribution, with respect to any subsequent dividend or distribution. If shareholders withdraw from the Plan, their shares will be credited to their account; or, if they wish, the Plan Agent will sell their full and fractional shares and send the shareholders the proceeds, less a transaction fee of $5 and less brokerage trading fees of $0.05 per share. If a shareholder does not maintain at least one whole share of common stock in the Plan account, the Plan Agent may terminate such shareholder's participation in the Plan after written notice. Upon termination, shareholders will be sent a check for the cash value of any fractional share in the Plan account, less any applicable broker commissions and taxes.
Shareholders who hold at least one full share of the fund may join the Plan by notifying the Plan Agent by telephone, in writing or by visiting the Plan Agent's website at www.computershare.com/investor. If received in proper form by the Plan Agent before the record date of a dividend, the election will be effective with respect to all dividends paid after such record date. If shareholders wish to participate in the Plan and their shares are held in the name of a brokerage firm, bank or other nominee, shareholders should contact their nominee to see if it will participate in the Plan. If shareholders wish to participate in the Plan, but their brokerage firm, bank or other nominee is unable to participate on their behalf, they will need to request that their shares be re-registered in their own name, or they will not be able to participate. The Plan Agent will administer the Plan on the basis of the number of shares certified from time to time by shareholders as representing the total amount registered in their name and held for their account by their nominee.
Experience under the Plan may indicate that changes are desirable. Accordingly, the fund and the Plan Agent reserve the right to amend or terminate the Plan. Participants generally will receive written notice at least 90 days before the effective
date of any amendment. In the case of termination, participants will receive written notice at least 90 days before the record date for the payment of any dividend or distribution by the fund.
Effective November 1, 2013, the Plan was revised to provide that Computershare Trust Company, N.A. no longer provides mail loss insurance coverage when shareholders mail their certificates to the fund's administrator.
All correspondence or requests for additional information about the Plan should be directed to Computershare Trust Company, N.A., at the address stated below, or by calling 800-852-0218, 201-680-6578 (For International Telephone Inquiries) and 800-952-9245 (For the Hearing Impaired (TDD)).
Shareholder communication and assistance
If you have any questions concerning the fund, we will be pleased to assist you. If you hold shares in your own name and not with a brokerage firm, please address all notices, correspondence, questions or other communications regarding the fund to the transfer agent at:
Regular Mail:
Computershare
P.O. Box 505000
Louisville, KY 40233
Registered or Overnight Mail:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
If your shares are held with a brokerage firm, you should contact that firm, bank or other nominee for assistance.
Continuation of Investment Advisory and Subadvisory Agreements
Evaluation of Advisory and Subadvisory Agreements by the Board of Trustees
This section describes the evaluation by the Board of Trustees (the Board) of John Hancock Tax-Advantaged Dividend Income Fund (the fund) of the Advisory Agreement (the Advisory Agreement) with John Hancock Advisers, LLC (the Advisor) and the Subadvisory Agreements (the Subadvisory Agreements) with John Hancock Asset Management a division of Manulife Asset Management (US) LLC (JHAM) and Analytic Investors, LLC (Analytic and collectively, the Subadvisors). The Advisory Agreement and Subadvisory Agreements are collectively referred to as the Agreements. Prior to the June 19-22, 2017 in-person meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the Agreements at an in-person meeting held on May 22-24, 2017.
Approval of Advisory and Subadvisory Agreements
At in-person meetings held on June 19-22, 2017, the Board, including the Trustees who are not parties to any Agreement or considered to be interested persons of the fund under the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees), reapproved for an annual period the continuation of the Advisory Agreement between the fund and the Advisor and the Subadvisory Agreements between the Advisor and the Subadvisors with respect to the fund.
In considering the Advisory Agreement and the Subadvisory Agreements, the Board received in advance of the meetings a variety of materials relating to the fund, the Advisor and the Subadvisors, including comparative performance, fee and expense information for a peer group of similar funds prepared by an independent third-party provider of fund data, performance information for an applicable benchmark index; and other pertinent information, such as the market premium and discount information, and, with respect to the Subadvisors, comparative performance information for comparably managed accounts, as applicable, and other information provided by the Advisor and the Subadvisors regarding the nature, extent and quality of services provided by the Advisor and the Subadvisors under their respective Agreements, as well as information regarding the Advisor's revenues and costs of providing services to the fund and any compensation paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreements are considered, particular focus is given to information concerning fund performance, comparability of fees and total expenses, and profitability. However, the Board notes that the evaluation process with respect to the Advisor and the Subadvisors is an ongoing one. In this regard, the Board also took into account discussions with management and information provided to the Board (including its various committees) at prior meetings with respect to the services provided by the Advisor and the Subadvisors to the fund, including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisors with respect to the fund. The information received and considered by the Board in connection with the May and June meetings and throughout the year was both written and oral. The Board noted the affiliation of JHAM with the Advisor, noting any potential conflicts of interest. The Board also considered the nature, quality, and extent of non-advisory services, if any, to be provided to the fund by the Advisor's affiliates. The Board considered the Advisory Agreement and Subadvisory Agreement separately in the course of its review. In doing so, the Board noted the respective roles of the Advisor and Subadvisor in providing services to the fund.
Throughout the process, the Board asked questions of and requested additional information from management. The Board is assisted by counsel for the fund and the Independent Trustees are also separately assisted by independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements and discussed the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement with respect to the fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets, and the industry) and did not treat any single factor as
determinative, and each Trustee may have attributed different weights to different factors. The Board's conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board's ongoing regular review of fund performance and operations throughout the year.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the fund, the Board reviewed information provided by the Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor's compliance and regulatory history, including its Form ADV. The Board also noted that on a regular basis it receives and reviews information from the fund's Chief Compliance Officer (CCO) regarding the fund's compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board observed that the scope of services provided by the Advisor, and of the undertakings required of the Advisor in connection with those services, including maintaining and monitoring its own and the fund's compliance programs, risk management programs, liquidity management programs and cybersecurity programs, had expanded over time as a result of regulatory, market and other developments. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the fund, including, but not limited to, general supervision of and coordination of the services provided by the Subadvisors, and is also responsible for monitoring and reviewing the activities of the Subadvisors and other third-party service providers. The Board also considered the significant risks assumed by the Advisor in connection with the services provided to the fund including entrepreneurial risk in sponsoring new funds and ongoing risks including investment, operational, enterprise, litigation, regulatory and compliance risk with respect to all funds.
The Board also considered the differences between the Advisor's services to the fund and the services it provides to other clients that are not closed-end funds, including, for example, the differences in services related to the regulatory and legal obligations of closed-end funds.
In considering the nature, extent, and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor's management and the quality of the performance of the Advisor's duties, through Board meetings, discussions and reports during the preceding year and through each Trustee's experience as a Trustee of the fund and of the other funds in the John Hancock group of funds complex (the John Hancock Fund Complex).
In the course of their deliberations regarding the Advisory Agreement, the Board considered, among other things:
(a) | the skills and competency with which the Advisor has in the past managed the fund's affairs and its subadvisory relationships, the Advisor's oversight and monitoring of the Subadvisors' investment performance and compliance programs, such as the Subadvisors' compliance with fund policies and objectives, review of brokerage matters, including with respect to trade allocation and best execution and the Advisor's timeliness in responding to performance issues; |
(b) | the background, qualifications and skills of the Advisor's personnel; |
(c) | the Advisor's compliance policies and procedures and its responsiveness to regulatory changes and fund industry developments; |
(d) | the Advisor's administrative capabilities, including its ability to supervise the other service providers for the fund; |
(e) | the financial condition of the Advisor and whether it has the financial wherewithal to provide a high level and quality of services to the fund; |
(f) | the Advisor's initiatives intended to improve various aspects of the fund's operations and investor experience with the fund; and |
(g) | the Advisor's reputation and experience in serving as an investment advisor to the fund and the benefit to shareholders of investing in funds that are part of a family of funds offering a variety of investments. |
The Board concluded that the Advisor may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the fund.
Investment performance. In considering the fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the fund's performance results. In connection with the consideration of the Advisory Agreement, the Board:
(a) | reviewed information prepared by management regarding the fund's performance; |
(b) | considered the comparative performance of an applicable benchmark index; |
(c) | considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; |
(d) | took into account the Advisor's analysis of the fund's performance; and |
(e) | considered the fund's share performance and premium/discount information. |
The Board noted that while it found the data provided by the independent third-party generally useful it recognized its limitations, including in particular that the data may vary depending on the end date selected and the results of the performance comparisons may vary depending on the selection of the peer group. The Board noted that, based on its net asset value, the fund outperformed its benchmark index and peer group average for the one-, three-, five- and ten-year periods ended December 31, 2016. The Board took into account management's discussion of the fund's performance, including the favorable performance relative to the benchmark index and peer group for the one-, three-, five- and ten-year periods. The Board concluded that the fund's performance has generally been in line with or outperformed the historical performance of comparable funds and the fund's benchmark index.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of fund data, including, among other data, the fund's contractual and net management fees (and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the fund in light of the nature, extent and quality of the management and advisory and subadvisory services provided by the Advisor and the Subadvisor. The Board considered the fund's ranking within a smaller group of peer funds chosen by the independent third-party provider, as well as the fund's ranking within a broader group of funds. In comparing the fund's contractual and net management fees to those of comparable funds, the Board noted that such fees include both advisory and administrative costs.
The Board also took into account the impact of leverage on fund expenses. The Board took into account the management fee structure, including that management fees for the fund were based on the fund's total managed assets, which are attributable to common stock and borrowings. The Board noted that net management fees for the fund are lower than the peer group median and that net total expenses for the fund are equal to the peer group median.
The Board took into account management's discussion of the fund's expenses. The Board took into account management's discussion with respect to the overall management fee, the fees of the Subadvisor, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee, in each case in light of the services rendered for those amounts and the risks undertaken by the Advisor. The Board also noted that the Advisor pays the subadvisory fees. In addition, the Board took into account that management had agreed to implement an overall fee waiver across the complex, including the fund, which is discussed further below. The Board reviewed information provided by the Advisor concerning the investment advisory fee charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the John Hancock Fund Complex) having similar investment mandates, if any. The Board considered any differences between the Advisor's and Subadvisors' services to the fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee paid with respect to the fund is reasonable in light of the nature, extent and quality of the services provided to the fund under the Advisory Agreement.
Profitability/Fall out benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates (including JHAM) from the Advisor's relationship with the fund, the Board:
(a) | reviewed financial information of the Advisor; |
(b) | reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to the fund; |
(c) | received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole and with respect to the fund; |
(d) | received information with respect to the Advisor's allocation methodologies used in preparing the profitability data and considered that the advisor hired an independent third-party consultant to provide an analysis of the Advisor's allocation methodologies; |
(e) | considered that the Advisor also provides administrative services to the fund on a cost basis pursuant to an administrative services agreement; |
(f) | noted that JHAM is an affiliate of the Advisor; |
(g) | noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the fund; |
(h) | noted that the subadvisory fees for the fund are paid by the Advisor, and are negotiated at arm's length for Analytic; |
(i) | considered the Advisor's ongoing costs and expenditures necessary to improve services, meet new regulatory and compliance requirements, and adapt to the other challenges impacting the fund industry; and |
(j) | considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the fund and the risks that it assumes as Advisor, including entrepreneurial, operational, reputational, litigation and regulatory risk. |
Based upon its review, the Board concluded that the level of profitability, if any, of the Advisor and its affiliates (including JHAM) from their relationship with the fund was reasonable and not excessive.
Economies of scale. In considering the extent to which the fund may realize any economies of scale and whether fee levels reflect these economies of scale for the benefit of the fund shareholders, the Board noted that the fund has a limited ability to increase its assets as a closed-end fund. The Board took into account management's discussions of the current advisory fee structure, and, as noted above, the services the Advisor provides in performing its functions under the Advisory Agreement and in supervising the Subadvisors.
The Board also considered potential economies of scale that may be realized by the fund as part of the John Hancock Fund Complex. Among them, the Board noted that the Advisor has contractually agreed to waive a portion of its management fee and/or reimburse expenses for certain funds of the John Hancock Fund Complex, including the fund (the participating portfolios). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund. The Board also considered the Advisor's overall operations and its ongoing investment in its business in order to expand the scale of, and improve the quality of, its operations that benefit the fund. The Board determined that the management fee structure for the fund was reasonable.
Approval of Subadvisory Agreements
In making its determination with respect to approval of the Subadvisory Agreements, the Board reviewed:
(1) | information relating to the Subadvisors' business, including current subadvisory services to the fund (and other funds in the John Hancock Fund Complex); |
(2) | the historical and current performance of the fund and comparative performance information relating to an applicable benchmark index and comparable funds; |
(3) | the subadvisory fees for the fund and to the extent available, comparable fee information prepared by an independent third party provider of fund data; and |
(4) | information relating to the nature and scope of any material relationships and their significance to the fund's Advisor and the Subadvisors. |
Nature, extent, and quality of services. With respect to the services provided by the Subadvisors, the Board received information provided to the Board by the Subadvisors, including the Subadvisors' respective Form ADV, as well as took into account information presented throughout the past year. The Board considered each Subadvisor's current level of staffing and its overall resources, as well as received information relating to each Subadvisor's compensation program. The Board reviewed each Subadvisor's history and investment experience, as well as information regarding the qualifications, background, and responsibilities of each Subadvisor's investment and compliance personnel who provide services to the fund. The Board also considered, among other things, each Subadvisor's compliance program and any disciplinary history. The Board also considered each Subadvisor's risk assessment and monitoring process. The Board reviewed each Subadvisor's regulatory history, including whether it was involved in any regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular, periodic reviews of each Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the fund's CCO and his staff conduct regular, periodic compliance reviews with each Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of each Subadvisor and procedures reasonably designed to assure compliance with the federal securities laws. The Board also took into account the financial condition of each Subadvisor.
The Board considered each Subadvisor's investment process and philosophy. The Board took into account that each Subadvisor's responsibilities include the development and maintenance of an investment program for the fund that is consistent with the fund's investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services. The Board also received information with respect to each Subadvisor's brokerage policies and practices, including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by each Subadvisor and the profitability to each Subadvisor of its relationship with the fund, the Board noted that the fees under each Subadvisory Agreement are paid by the Advisor and not the fund. The Board also relied on the ability of the Advisor to negotiate the Analytic's Subadvisory Agreement and the fees thereunder at arm's length. As a result, the costs of the services to be provided and the profits to be realized by the Analytic from its relationship with the fund were not a material factor in the Board's consideration of Analytic's Subadvisory Agreement. The Board also considered any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreements.
The Board also received information regarding the nature and scope (including their significance to the Advisor and its affiliates and Analytic) of any material relationships with respect to the Analytic, which include arrangements in which the Analytic or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Analytic's Subadvisory Agreement.
In addition, the Board considered other potential indirect benefits that the Subadvisors and its affiliates may receive from the Subadvisors' relationship with the fund, such as the opportunity to provide advisory services to additional funds in the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays subadvisory fees to the Subadvisors. As noted above, the Board also considered the fund's subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the fund as included in the report prepared by the
independent third party provider of fund data, to the extent available. The Board noted that the limited size of the Lipper peer group was not sufficient for comparative purposes. The Board also took into account the subadvisory fees paid by the Advisor to the Subadvisors with respect to the fund and compared them to fees charged by the Subadvisors to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered the fund's performance as compared to the fund's peer group and the benchmark index and noted that the Board reviews information about the fund's performance results at its regularly scheduled meetings. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisors. The Board was mindful of the Advisor's focus on the Subadvisors' performance. The Board also noted the Subadvisors' long-term performance record for similar accounts, as applicable.
The Board's decision to approve the Subadvisory Agreements was based on a number of determinations, including the following:
(1) | the Subadvisor has extensive experience and demonstrated skills as a manager; |
(2) | the fund's performance, based on net asset value, has generally been in line with or outperformed the historical performance of comparable funds and the fund's benchmark index; and |
(3) | the subadvisory fees are reasonable in relation to the level and quality of services being provided under the Subadvisory Agreement. |
* * *
Based on the Board's evaluation of all factors that the Board deemed to be material, including those factors described above, the Board, including the Independent Trustees, concluded that renewal of the Advisory Agreement and the Subadvisory Agreements would be in the best interest of the fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreements for an additional one-year period.
This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the fund and execute policies formulated by the Trustees.
Independent Trustees
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years |
Trustee of the Trust since1 |
Number of John Hancock funds overseen by Trustee |
Hassell H. McClellan, Born: 1945 | 2012 | 223 |
Trustee and Chairperson of the Board Director/Trustee, Virtus Funds (since 2008); Director, The Barnes Group (since 2010); Associate Professor, The Wallace E. Carroll School of Management, Boston College (retired 2013). Trustee (since 2014) and Chairperson of the Board (since 2017), John Hancock Collateral Trust; Trustee (since 2015) and Chairperson of the Board (since 2017), John Hancock Exchange-Traded Fund Trust; Trustee (since 2012) and Chairperson of the Board (since 2017), John Hancock retail funds3; Trustee (2005-2006 and since 2012) and Chairperson of the Board (since 2017), John Hancock Funds III; Trustee (since 2005) and Chairperson of the Board (since 2017), John Hancock Variable Insurance Trust and John Hancock Funds II. |
Charles L. Bardelis,2 Born: 1941 | 2012 | 223 |
Trustee Director, Island Commuter Corp. (marine transport). Trustee, John Hancock Collateral Trust (since 2014), Trustee, John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Funds III (2005-2006 and since 2012); Trustee, John Hancock Variable Insurance Trust (since 1988); Trustee, John Hancock Funds II (since 2005). |
Peter S. Burgess,2 Born: 1942 | 2012 | 223 |
Trustee Consultant (financial, accounting, and auditing matters) (since 1999); Certified Public Accountant; Partner, Arthur Andersen (independent public accounting firm) (prior to 1999); Director, Lincoln Educational Services Corporation (since 2004); Director, Symetra Financial Corporation (2010-2016); Director, PMA Capital Corporation (2004-2010). Trustee, John Hancock Collateral Trust (since 2014); Trustee, John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Funds III (2005-2006 and since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2005). |
William H. Cunningham, Born: 1944 | 2004 | 223 |
Trustee Professor, University of Texas, Austin, Texas (since 1971); former Chancellor, University of Texas System and former President of the University of Texas, Austin, Texas; Chairman (since 2009) and Director (since 2006), Lincoln National Corporation (insurance); Director, Southwest Airlines (since 2000); former Director, LIN Television (2009-2014). Trustee, John Hancock retail funds3 (since 1986); Trustee, John Hancock Variable Insurance Trust (since 2012); Trustee, John Hancock Funds II (2005-2006 and since 2012); Trustee, John Hancock Collateral Trust (since 2014); Trustee, John Hancock Exchange-Traded Fund Trust (since 2015). |
Grace K. Fey, Born: 1946 | 2012 | 223 |
Trustee Chief Executive Officer, Grace Fey Advisors (since 2007); Director and Executive Vice President, Frontier Capital Management Company (1988-2007); Director, Fiduciary Trust (since 2009). Trustee, John Hancock Collateral Trust (since 2014); Trustee, John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2008). |
Independent Trustees (continued)
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years |
Trustee of the Trust since1 |
Number of John Hancock funds overseen by Trustee |
Theron S. Hoffman,2 Born: 1947 | 2012 | 223 |
Trustee Chief Executive Officer, T. Hoffman Associates, LLC (consulting firm) (since 2003); Director, The Todd Organization (consulting firm) (2003-2010); President, Westport Resources Management (investment management consulting firm) (2006-2008); Senior Managing Director, Partner, and Operating Head, Putnam Investments (2000-2003); Executive Vice President, The Thomson Corp. (financial and legal information publishing) (1997-2000). Trustee, John Hancock Collateral Trust (since 2014); Trustee, John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (since 2012); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2008). |
Deborah C. Jackson, Born: 1952 | 2008 | 223 |
Trustee President, Cambridge College, Cambridge, Massachusetts (since 2011); Board of Directors, National Association of Corporate Directors/New England (since 2015); Board of Directors, Association of Independent Colleges and Universities of Massachusetts (since 2014); Chief Executive Officer, American Red Cross of Massachusetts Bay (2002-2011); Board of Directors of Eastern Bank Corporation (since 2001); Board of Directors of Eastern Bank Charitable Foundation (since 2001); Board of Directors of American Student Assistance Corporation (1996-2009); Board of Directors of Boston Stock Exchange (2002-2008); Board of Directors of Harvard Pilgrim Healthcare (health benefits company) (2007-2011). Trustee, John Hancock retail funds3 (since 2008); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust (since 2014); and Trustee, John Hancock Exchange-Traded Fund Trust (since 2015). |
James M. Oates, Born: 1946 | 2012 | 223 |
Trustee
|
Steven R. Pruchansky, Born: 1944 | 2004 | 223 |
Trustee and Vice Chairperson of the Board Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2000); Director and President, Greenscapes of Southwest Florida, Inc. (until 2000); Member, Board of Advisors, First American Bank (until 2010); Managing Director, Jon James, LLC (real estate) (since 2000); Partner, Right Funding, LLC (since 2014); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty Trust (until 1994); President, Maxwell Building Corp. (until 1991). Trustee (since 1992) and Chairperson of the Board (2011-2012), John Hancock retail funds3; Trustee and Vice Chairperson of the Board, John Hancock retail funds3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2012); Trustee and Vice Chairperson of the Board, John Hancock Collateral Trust (since 2014); Trustee and Vice Chairperson of the Board, John Hancock Exchange-Traded Fund Trust (since 2015). |
Independent Trustees (continued)
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years |
Trustee of the Trust since1 |
Number of John Hancock funds overseen by Trustee |
Gregory A. Russo, Born: 1949 | 2008 | 223 |
Trustee Director and Audit Committee Chairman (since 2012), and Member, Audit Committee and Finance Committee (since 2011), NCH Healthcare System, Inc. (holding company for multi-entity healthcare system); Director and Member (since 2012) and Finance Committee Chairman (since 2014), The Moorings, Inc. (nonprofit continuing care community); Vice Chairman, Risk & Regulatory Matters, KPMG LLP (KPMG) (2002-2006); Vice Chairman, Industrial Markets, KPMG (1998-2002); Chairman and Treasurer, Westchester County, New York, Chamber of Commerce (1986-1992); Director, Treasurer, and Chairman of Audit and Finance Committees, Putnam Hospital Center (1989-1995); Director and Chairman of Fundraising Campaign, United Way of Westchester and Putnam Counties, New York (1990-1995). Trustee, John Hancock retail funds3 (since 2008); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust (since 2014); Trustee, John Hancock Exchange-Traded Fund Trust (since 2015). |
Non-Independent Trustees4
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years |
Trustee of the Trust since1 |
Number of John Hancock funds overseen by Trustee |
Andrew G. Arnott, Born: 1971 | 2017 | 223 |
President and Trustee
|
James R. Boyle, Born: 1959 | 2015 | 223 |
Non-Independent Trustee Chairman and Chief Executive Officer, Zillion Group, Inc. (formerly HealthFleet, Inc.) (healthcare) (since 2014); Executive Vice President and Chief Executive Officer, U.S. Life Insurance Division of Genworth Financial, Inc. (insurance) (January 2014-July 2014); Senior Executive Vice President, Manulife Financial Corporation, President and Chief Executive Officer, John Hancock (1999-2012); Chairman and Director, John Hancock Advisers, LLC, John Hancock Funds, LLC, and John Hancock Investment Management Services, LLC (2005-2010). Trustee, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2015); Trustee, John Hancock retail funds3 (2005-2010; 2012-2014 and since 2015); Trustee, John Hancock Variable Insurance Trust and John Hancock Funds II (2005-2014 and since 2015). |
Warren A. Thomson, Born: 1955 | 2012 | 223 |
Non-Independent Trustee Senior Executive Vice President and Chief Investment Officer, Manulife Financial Corporation and The Manufacturers Life Insurance Company (since 2009); Chairman, Manulife Asset Management (since 2001, including prior positions); Director and Chairman, Manulife Asset Management Limited (since 2006); Director and Chairman, Hancock Natural Resources Group, Inc. (since 2013). Trustee, John Hancock retail funds,3 John Hancock Variable Insurance Trust, and John Hancock Funds II (since 2012); Trustee, John Hancock Collateral Trust (since 2014); Trustee, John Hancock Exchange-Traded Fund Trust (since 2015). |
Principal officers who are not Trustees
Name, year of birth Position(s) held with fund Principal occupation(s) during past 5 years |
Officer of the Trust since |
John J. Danello, Born: 1955 | 2014 |
Senior Vice President, Secretary, and Chief Legal Officer Vice President and Chief Counsel, John Hancock Wealth Management (since 2005); Senior Vice President (since 2007) and Chief Legal Counsel (2007-2010), John Hancock Funds, LLC and The Berkeley Financial Group, LLC; Senior Vice President (since 2006, including prior positions) and Chief Legal Officer and Secretary (since 2014), John Hancock retail funds,3 John Hancock Funds II and John Hancock Variable Insurance Trust; Senior Vice President, Secretary and Chief Legal Officer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2014); Vice President, John Hancock Life & Health Insurance Company (since 2009); Vice President, John Hancock Life Insurance Company (USA) and John Hancock Life Insurance Company of New York (since 2010); and Senior Vice President, Secretary and Chief Legal Counsel (2007-2014, including prior positions) of John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC. |
Francis V. Knox, Jr., Born: 1947 | 2005 |
Chief Compliance Officer Vice President, John Hancock Financial Services (since 2005); Chief Compliance Officer, John Hancock retail funds,3 John Hancock Variable Insurance Trust, John Hancock Funds II, John Hancock Advisers, LLC, and John Hancock Investment Management Services, LLC (since 2005); Chief Compliance Officer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2014). |
Charles A. Rizzo, Born: 1957 | 2007 |
Chief Financial Officer Vice President, John Hancock Financial Services (since 2008); Senior Vice President, John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC (since 2008); Chief Financial Officer, John Hancock retail funds,3 John Hancock Variable Insurance Trust and John Hancock Funds II (since 2007); Chief Financial Officer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2014). |
Salvatore Schiavone, Born: 1965 | 2010 |
Treasurer Assistant Vice President, John Hancock Financial Services (since 2007); Vice President, John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC (since 2007); Treasurer, John Hancock retail funds3 (since 2007, including prior positions); Treasurer, John Hancock Variable Insurance Trust and John Hancock Funds II (2007-2009 and since 2010, including prior positions); Treasurer, John Hancock Collateral Trust and John Hancock Exchange-Traded Fund Trust (since 2014). |
The business address for all Trustees and Officers is 601 Congress Street, Boston, Massachusetts 02210-2805.
1 | Mr. Boyle, Mr. Cunningham, Ms. Fey, Mr. McClellan, and Mr. Russo serve as Trustees for a term expiring in 2020; Mr. Bardelis, Mr. Burgess, Mr. Hoffman, and Mr. Thomson serve as Trustees for a term expiring in 2018. Mr. Arnott, Ms. Jackson, Mr. Oates, and Mr. Pruchansky serve as Trustees for a term expiring in 2019. Mr. Boyle has served as Trustee at various times prior to date listed in the table. |
2 | Member of the Audit Committee. |
3 | "John Hancock retail funds" comprises John Hancock Funds III and 39 other John Hancock funds consisting of 29 series of other John Hancock trusts and 10 closed-end funds. |
4 | The Trustee is a Non-Independent Trustee due to current or former positions with the Advisor and certain of its affiliates. |
Trustees Hassell H. McClellan, Chairperson Officers Andrew G. Arnott John J. Danello Francis V. Knox, Jr. Charles A. Rizzo Salvatore Schiavone |
Investment advisor John Hancock Advisers, LLC Subadvisors John Hancock Asset Management a division of Manulife Asset Management (US) LLC Custodian State Street Bank and Trust Company Transfer agent Computershare Shareowner Services, LLC Legal counsel K&L Gates LLP Independent registered public accounting firm PricewaterhouseCoopers LLP Stock symbol Listed New York Stock Exchange: HTD |
*Member of the Audit Committee
Non-Independent Trustee
#Effective
6-20-17
For shareholder assistance refer to page 32
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800-852-0218 jhinvestments.com |
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Express mail: Computershare |
The fund's proxy voting policies and procedures, as well as the fund's proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.
The fund's complete list of portfolio holdings, for the first and third fiscal quarters, is filed with the SEC on Form N-Q. The fund's Form N-Q is available on our website and the SEC's website, sec.gov, and can be reviewed and copied (for a fee) at the SEC's Public Reference Room in Washington, DC. Call 800-SEC-0330 to receive information on the operation of the SEC's Public Reference Room.
We make this information on your fund, as well as monthly portfolio holdings, and other fund details available on our website at jhinvestments.com or by calling 800-852-0218.
John Hancock family of funds
DOMESTIC EQUITY FUNDS Balanced Blue Chip Growth Classic Value Disciplined Value Disciplined Value Mid Cap Equity Income Fundamental All Cap Core Fundamental Large Cap Core Fundamental Large Cap Value New Opportunities Small Cap Core Small Cap Value Small Company Strategic Growth U.S. Global Leaders Growth U.S. Growth Value Equity GLOBAL AND INTERNATIONAL EQUITY FUNDS Disciplined Value International Emerging Markets Emerging Markets Equity Fundamental Global Franchise Global Equity Global Shareholder Yield Greater China Opportunities International Growth International Small Company International Value Equity |
INCOME FUNDS Bond California Tax-Free Income Emerging Markets Debt Floating Rate Income Global Income Government Income High Yield High Yield Municipal Bond Income Investment Grade Bond Money Market Short Duration Credit Opportunities Spectrum Income Strategic Income Opportunities Tax-Free Bond ALTERNATIVE AND SPECIALTY FUNDS Absolute Return Currency Alternative Asset Allocation Enduring Assets Financial Industries Global Absolute Return Strategies Global Conservative Absolute Return Global Focused Strategies Natural Resources Redwood Regional Bank Seaport Technical Opportunities |
The fund's investment objectives, risks, charges, and expenses are included in the prospectus and should be considered carefully before investing. For a prospectus, contact your financial professional, call John Hancock Investments at 800-852-0218, or visit the fund's website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
ASSET ALLOCATION Income Allocation Fund Multi-Index Lifetime Portfolios Multi-Index Preservation Portfolios Multimanager Lifestyle Portfolios Multimanager Lifetime Portfolios EXCHANGE-TRADED FUNDS John Hancock Multifactor Consumer Discretionary ETF John Hancock Multifactor Consumer Staples ETF John Hancock Multifactor Developed International ETF John Hancock Multifactor Energy ETF John Hancock Multifactor Financials ETF John Hancock Multifactor Healthcare ETF John Hancock Multifactor Industrials ETF John Hancock Multifactor Large Cap ETF John Hancock Multifactor Materials ETF John Hancock Multifactor Mid Cap ETF John Hancock Multifactor Small Cap ETF John Hancock Multifactor Technology ETF John Hancock Multifactor Utilities ETF |
ENVIRONMENTAL, SOCIAL, AND GOVERNANCE FUNDS ESG All Cap Core ESG Core Bond ESG International Equity ESG Large Cap Core CLOSED-END FUNDS Financial Opportunities Hedged Equity & Income Income Securities Trust Investors Trust Preferred Income Preferred Income II Preferred Income III Premium Dividend Tax-Advantaged Dividend Income Tax-Advantaged Global Shareholder Yield |
John Hancock Multifactor ETF shares are bought and sold at market
price (not NAV), and are not individually redeemed
from the fund. Brokerage commissions will reduce returns.
John Hancock ETFs are distributed by Foreside Fund Services, LLC, and
are subadvised by Dimensional Fund Advisors LP.
Foreside is not affiliated with John Hancock Funds, LLC or
Dimensional Fund Advisors LP.
Dimensional Fund Advisors LP receives compensation from John Hancock
in connection with licensing rights to the
John Hancock Dimensional indexes. Dimensional Fund Advisors LP does
not sponsor, endorse, or sell, and makes no
representation as to the advisability of investing in, John Hancock
Multifactor ETFs.
John Hancock Investments
A trusted brand
John Hancock Investments is a premier asset manager representing one of
America's most trusted brands, with a heritage of financial stewardship dating
back to 1862. Helping our shareholders pursue their financial goals is at the
core of everything we do. It's why we support the role of
professional financial
advice and operate with the highest standards of conduct and integrity.
A better way to invest
We serve investors globally through a unique multimanager approach:
We search the world to find proven portfolio teams with specialized
expertise for every strategy we offer, then we apply robust investment
oversight to ensure they continue to meet our uncompromising standards
and serve the best interests of our shareholders.
Results for investors
Our unique approach to asset management enables us to provide a diverse set
of investments backed by some of the world's best managers, along with strong
risk-adjusted returns across asset classes.
|
John Hancock Advisers, LLC 601 Congress Street n Boston, MA 02210-2805 800-852-0218 n jhinvestments.com |
|
MF410678 | P13A 10/17 12/17 |
ITEM 2. CODE OF ETHICS.
As of the end of the period, October 31, 2017, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief Executive Officer and Chief Financial Officer (respectively, the principal executive officer, the principal financial officer, the Covered Officers). A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Peter S. Burgess is the audit committee financial expert and is independent, pursuant to general instructions on Form N-CSR Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The aggregate fees billed for professional services rendered by the
principal accountant(s) for the audit of the registrants annual financial
statements or services that are normally provided by the accountant(s) in
connection with statutory and regulatory filings or engagements amounted to
$37,841 for the fiscal year ended October 31, 2017 and $36,868 for the fiscal
period ended October 31, 2016. These fees were billed to the registrant and were
approved by the registrants audit committee.
(b) Audit-Related Services
The audit-related fees amounted to $0 for the
fiscal year ended October 31, 2017 and $0 for the fiscal period ended October
31, 2016 billed to the registrant or to the registrant's investment adviser (not
including any sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any entity
controlling, controlled by, or under common control with the adviser that
provides ongoing services to the registrant ("control affiliates"). In addition,
amounts billed to control affiliates for service provider internal controls
reviews were $106,517 and $103,474 for the fiscal years ended October 31, 2017
and 2016, respectively.
(c) Tax Fees
The aggregate fees billed for professional services rendered by the
principal accountant(s) for the tax compliance, tax advice and tax planning
(tax fees) amounted to $3,725 for the fiscal year ended October 31, 2017 and
$3,647 for the fiscal period ended October 31, 2016. The nature of the services
comprising the tax fees was the review of the registrants tax returns and tax
distribution requirements. These fees were billed to the registrant and were
approved by the registrants audit committee.
(d) All Other Fees
The all other fees billed to the registrant for products and
services provided by the principal accountant were $832 for the fiscal year
ended October 31, 2017 and $109 for the fiscal year ended October 31, 2016
billed to control affiliates for products and services provided by the principal
accountant. These fees were approved by the registrants audit committee.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The trusts Audit Committee must pre-approve all audit and non-audit services provided by the independent registered public accounting firm (the Auditor) relating to the operations or financial reporting of the funds. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The trusts Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committees consideration of audit-related and non-audit services by the Auditor. The policies and procedures require that any audit-related and non-audit service provided by the Auditor and any non-audit service provided by the Auditor to a fund service provider that relates directly to the operations and financial reporting of a fund are subject to approval by the Audit Committee before such service is provided. Audit-related services provided by the Auditor that are expected to exceed $25,000 per instance/per fund are subject to specific pre-approval by the Audit Committee. Tax services provided by the Auditor that are expected to exceed $30,000 per instance/per fund are subject to specific pre-approval by the Audit Committee.
All audit services, as well as the audit-related and non-audit services that are expected to exceed the amounts stated above, must be approved in advance of provision of the service by formal resolution of the Audit Committee. At the regularly scheduled Audit Committee meetings, the Committee reviews a report summarizing the services, including fees, provided by the Auditor.
(e)(2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
Audit-Related Fees, Tax Fees and All Other
Fees:
There were no amounts that were
approved by the Audit Committee pursuant to the de minimis exception under Rule
2-01 of Regulation S-X.
(f) According to the registrants principal accountant, for the fiscal period ended October 31, 2017, the percentage of hours spent on the audit of the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons who were not full-time, permanent employees of principal accountant was less than 50%.
(g) The aggregate non-audit fees billed by the registrant's accountant(s) for services rendered to the registrant and rendered to the registrant's control affiliates for each of the last two fiscal years of the registrant were $8,884,223 for the fiscal year ended October 31, 2017 and $4,590,233 for the fiscal period ended October 31, 2016.
(h) The audit committee of the registrant has considered the non-audit services provided by the registrants principal accountant(s) to the control affiliates and has determined that the services that were not pre-approved are compatible with maintaining the principal accountant(s)' independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately-designated standing audit committee comprised of independent trustees. The members of the audit committee are as follows:
Peter S. Burgess - Chairman
Charles L.
Bardelis
Theron S. Hoffman
ITEM 6. SCHEDULE OF INVESTMENTS.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
See attached exhibit - Proxy Voting Policies and Procedures.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Information about the John Hancock
Asset Management a division of Manulife Asset
Management (US) LLC (John
Hancock Asset Management) portfolio managers
Management Biographies
Below is a list of the John Hancock Asset Management portfolio managers who share joint responsibility for the day-to-day investment management of the Fund. It provides a brief summary of their business careers over the past five years. Information is provided as of December 1, 2017.
Joseph Bozoyan, CFA
Managing Director and Portfolio
Manager
John Hancock Asset Management since 2015
Began business career in
1993
Managed the Fund since 2015
Bradley Lutz, CFA
Managing Director and Portfolio Manager
John Hancock Asset
Management since 2002
Began business career in 1992
Managed the Fund since
2017
Other Accounts the Portfolio Managers are Managing
The table below indicates for each portfolio manager information about the accounts over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of October 31, 2017. For purposes of the table, Other Pooled Investment Vehicles may include investment partnerships and group trusts, and Other Accounts may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts.
Registered Investment |
Other Pooled | |||||||||||
Companies | Investment Vehicles | Other Accounts | ||||||||||
Number | Total | Number | Total | Number | Total | |||||||
of | Assets | of | Assets | of | Assets | |||||||
Accounts | $Million | Accounts | $Million | Accounts | $Million | |||||||
Joseph | 4 | $3.62 | 0 | $0 | 0 | $0 | ||||||
Bozoyan, CFA | ||||||||||||
Bradley Lutz, | 4 | $3.62 | 0 | $0 | 0 | $0 | ||||||
CFA |
Number and value of accounts within the total accounts that are subject to a performance-based advisory fee: None.
Conflicts of Interest. When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. The principal types of potential conflicts of interest that may arise are discussed below. For the reasons outlined below, the Fund does not believe that any material conflicts are likely to arise out of a portfolio managers responsibility for the management of the Fund as well as one or more other accounts. The Advisor and Subadvisor have adopted procedures that are intended to monitor compliance with the policies referred to in the following paragraphs. Generally, the risks of such conflicts of interests are increased to the extent that a portfolio manager has a financial incentive to favor one account over another. The Advisor and Subadvisor have structured their compensation arrangements in a manner that is intended to limit such potential for conflicts of interests. See Compensation of Portfolio Managers below.
● | A portfolio manager could favor one account over another in allocating new investment opportunities that have limited supply, such as initial public offerings and private placements. If, for example, an initial public offering that was expected to appreciate in value significantly shortly after the offering was allocated to a single account, that account may be expected to have better investment performance than other accounts that did not receive an allocation on the initial public offering. The Subadvisor has policies that require a portfolio manager to allocate such investment opportunities in an equitable manner and generally to allocate such investments proportionately among all accounts with similar investment objectives. |
● | A portfolio manager could favor one account over another in the order in which trades for the accounts are placed. If a portfolio manager determines to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more favorable price than accounts that made subsequent transactions. The less liquid the market for the security or the greater the percentage that the proposed aggregate purchases or sales represent of average daily trading volume, the greater the potential for accounts that make subsequent purchases or sales to receive a less favorable price. When a portfolio manager intends to trade the same security for more than one account, the policies of the Subadvisor generally require that such trades be bunched, which means that the trades for the individual accounts are aggregated and each account receives the same price. There are some types of accounts as to which bunching may not be possible for contractual reasons (such as directed brokerage arrangements). Circumstances may also arise where the trader believes that bunching the orders may not result in the best possible price. Where those accounts or circumstances are involved, the Subadvisor will place the order in a manner intended to result in as favorable a price as possible for such client. |
● | A portfolio manager could favor an account if the portfolio managers compensation is tied to the performance of that account rather than all accounts managed by the portfolio manager. If, for example, the portfolio manager receives a bonus based upon the performance of certain accounts relative to a benchmark while other accounts are disregarded for this purpose, the portfolio manager will have a financial incentive to seek to have the accounts that determine the portfolio managers bonus achieve the best possible performance to the possible detriment of other accounts. Similarly, if the Subadvisor receives a performance-based advisory fee, the portfolio manager may favor that account, whether or not the performance of that account directly determines the portfolio managers compensation. The investment performance on specific accounts is not a factor in determining the portfolio managers compensation. See Compensation of Portfolio Managers below. Neither the Advisor nor the Subadvisor receives a performance-based fee with respect to any of the accounts managed by the portfolio managers. |
● | A portfolio manager could favor an account if the portfolio manager has a beneficial interest in the account, in order to benefit a large client or to compensate a client that had poor returns. For example, if the portfolio manager held an interest in an investment partnership that was one of the accounts managed by the portfolio manager, the portfolio manager would have an economic incentive to favor the account in which the portfolio manager held an interest. The Subadvisor imposes certain trading restrictions and reporting requirements for accounts in which a portfolio manager or certain family members have a personal interest in order to confirm that such accounts are not favored over other accounts. |
● |
If the different accounts have materially and potentially conflicting investment objectives or strategies, a conflict of interest may arise. For example, if a portfolio manager purchases a security for one account and sells the same security short for another account, such trading pattern could disadvantage either the account that is long or short. In making portfolio manager assignments, the Subadvisor seeks to avoid such potentially conflicting situations. However, where a portfolio manager is responsible for accounts with differing investment objectives and policies, it is possible that the portfolio manager will conclude that it is in the best interest of one account to sell a portfolio security while another account continues to hold or increase the holding in such security. |
Compensation of Portfolio Managers. The Subadvisor has adopted a system of compensation for portfolio managers and others involved in the investment process that is applied systematically among investment professionals. At the Subadvisor, the structure of compensation of investment professionals is currently composed of the following basic components: base salary and an annual investment bonus plan as well as customary benefits that are offered generally to all full-time employees of the Subadvisor. A limited number of senior investment professionals, who serve as officers of both the Subadvisor and its parent company, may also receive options or restricted stock grants of common shares of Manulife Financial. The following describes each component of the compensation package for the individuals identified as a portfolio manager for the Funds.
● | Base salary. Base compensation is fixed and normally reevaluated on an annual basis. The Subadvisor seeks to set compensation at market rates, taking into account the experience and responsibilities of the investment professional. |
● | Investment Bonus Plan. Only investment professionals are eligible to participate in the Investment Bonus Plan. Under the plan, investment professionals are eligible for an annual bonus. The plan is intended to provide a competitive level of annual bonus compensation that is tied to the investment professional achieving superior investment performance and aligns the financial incentives of the Subadvisor and the investment professional. Any bonus under the plan is completely discretionary, with a maximum annual bonus that may be well in excess of base salary. Payout of a portion of this bonus may be deferred for up to five years. While the amount of any bonus is discretionary, the following factors are generally used in determining bonuses under the plan: |
● |
Investment Performance: The investment performance of all accounts managed by the investment professional over one- and three-year periods are considered and no specific benchmark is used to measure performance. With respect to fixed income accounts, relative yields are also used to measure performance. |
● |
The Profitability of the Subadvisor: The profitability of the Subadvisor and its parent company are also considered in determining bonus awards. |
● | Non-Investment Performance: To a lesser extent, intangible contributions, including the investment professionals support of client service and sales activities, new fund/strategy idea generation, professional growth and development, and management, where applicable, are also evaluated when determining bonus awards. |
● | Options and Stock Grants. A limited number of senior investment professionals may receive options to purchase shares of Manulife Financial stock. Generally, such option would permit the investment professional to purchase a set amount of stock at the market price on the date of grant. The option can be exercised for a set period (normally a number of years or until termination of employment) and the investment professional would exercise the option if the market value of Manulife Financial stock increases. Some investment professionals may receive restricted stock grants, where the investment professional is entitled to receive the stock at no or nominal cost, provided that the stock is forgone if the investment professionals employment is terminated prior to a vesting date. |
The Subadvisor also permits investment professionals to participate on a voluntary basis in a deferred compensation plan, under which the investment professional may elect on an annual basis to defer receipt of a portion of their compensation until retirement. Participation in the plan is voluntary.
Share Ownership by Portfolio Managers. The following table indicates as of October 31, 2017 the value of shares beneficially owned by the portfolio managers in the Fund.
Range of Beneficial | ||
Portfolio Manager | Ownership in the Fund | |
Joseph Bozoyan, CFA | None | |
Bradley Lutz, CFA | None |
Information about the Analytic
portfolio managers
Management Biographies
Below is an alphabetical list of the Analytic Investors, LLC portfolio managers who share joint responsibility for the implementation and execution of the Funds options strategy. It provides a brief summary of their business careers. Information is provided as of December 1, 2017.
Dennis Bein, CFA
Chief Investment Officer and Portfolio Manager, Analytic
Investors, LLC since 1995
Began business career in 1990
Managed the Fund
since 2007
Harindra de Silva, Ph. D., CFA
President and Portfolio Manager, Analytic
Investors, LLC since 1995
Began business career in 1984
Managed the Fund
since 2007
Gregory M. McMurran
Chief Investment Officer and Portfolio
Manager, Analytic Investors, LLC since 1976
Began business career in
1976
Managed the Fund since 2007
Other Accounts the Portfolio Managers are Managing
The table below indicates for each portfolio manager information about the accounts over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of October 31, 2017. For purposes of the table, Other Pooled Investment Vehicles may include investment partnerships and group trusts, and Other Accounts may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts.
Registered | ||||||
Investment | Other Pooled | |||||
Companies | Investment Vehicles | Other Accounts | ||||
Number | Total | Number | Total | Number | Total | |
of | Assets | of | Assets | of | Assets | |
Accounts | $Million | Accounts | $Million | Accounts | $Million | |
Dennis Bein, | 18 | $8,474.7 | 18 | $2,500.9 | 28 | $7,264.3 |
CFA | (0)* | ($0)* | (4)* | ($385.5)* | (2)* | ($311.9)* |
Harindra de | 19 | $9,250.1 | 19 | $ 2,509.9 | 28 | $7,556.2 |
Silva, Ph.D., | (0)* | ($0)* | (4)* | ($385.5)* | (2)* | ($ 311.9) |
CFA | ||||||
Gregory | 3 | $ 893.9 | 1 | $9.0 | 2 | $291.9 |
McMurran | (0)* | ($0)* | (0)* | ($0)* | (0)* | ($0)* |
Note: (*) represents the number and value of accounts, within the total accounts that are subject to a performance-based advisory fee.
Conflicts of Interest. Conflicts of interest may arise because the Funds portfolio managers have day-to-day management responsibilities with respect to both the Fund and various other accounts. These potential conflicts include:
Limited Resources. The portfolio managers cannot devote their full time and attention to the management of each of the accounts that they manage. Accordingly, the portfolio managers may be limited in their ability to identify investment opportunities for each of the accounts that are as attractive as might be the case if the portfolio managers were to devote substantially more attention to the management of a single account. The effects of this potential conflict may be more pronounced where the accounts have different investment strategies.
Limited Investment Opportunities. Other clients of either Subadviser may have investment objectives and policies similar to those of the Fund. Either Subadviser may, from time to time, make recommendations which result in the purchase or sale of a particular security by its other clients simultaneously with the Fund. If transactions on behalf of more than one client during the same period increase the demand for securities being purchased or the supply of securities being sold, there may be an adverse effect on price or quantity. It is the policy of each Subadviser to allocate advisory recommendations and the placing of orders in a manner that it believes is equitable to the accounts involved, including the Fund. When two or more clients of a Subadviser are purchasing or selling the same security on a given day from the same broker-dealer, such transactions may be averaged as to price.
Different Investment Strategies. The accounts managed by the portfolio managers have differing investment strategies. If the portfolio managers determine that an investment opportunity may be appropriate for only some of the accounts or decide that certain of the accounts should take different positions with respect to a particular security, the portfolio managers may effect transactions for one or more accounts which may affect the market price of the security or the execution of the transaction, or both, to the detriment or benefit of one or more other accounts.
Variation in Compensation. A conflict of interest may arise where a Subadviser is compensated differently by the accounts that are managed by the portfolio managers. If certain accounts pay higher management fees or performance-based incentive fees, the portfolio managers might be motivated to prefer certain accounts over others. The portfolio managers might also be motivated to favor accounts in which they have a greater ownership interest or accounts that are more likely to enhance the portfolio managers performance record or to otherwise benefit the portfolio managers.
Selection of Brokers. The portfolio managers select the brokers that execute securities transactions for the accounts that they supervise. In addition to executing trades, some brokers provide the portfolio managers with research and other services which may require the payment of higher brokerage fees than might otherwise be available. The portfolio managers decision as to the selection of brokers could yield disproportionate costs and benefits among the accounts that they manage, since the research and other services provided by brokers may be more beneficial to some accounts than to others.
Where conflicts of interest arise between the Fund and other accounts managed by the portfolio managers, the portfolio managers will use good faith efforts so that the Fund will not be treated materially less favorably than other accounts. There may be instances where similar portfolio transactions may be executed for the same security for numerous accounts managed by the portfolio managers. In such instances, securities will be allocated in accordance with the Advisers trade allocation policy.
Compensation of Portfolio
Managers.
Analytic uses two primary
compensation tools to reward and incentivize its portfolio managers and research
analysts; (i) a competitive base salary and benefits package and (ii) annual
variable compensation payments based on Analytics investment performance and
individual merit. A portion of the annual variable compensation is deferred over
three years in conjunction with current Wells Fargo Asset Management
compensation philosophy. Incentive bonuses are typically tied to relative,
pre-tax investment performance of all accounts under his or her management
within acceptable risk parameters. Relative investment performance is generally
evaluated for 1, 3, and 5 year performance results, with a predominant weighting
on the 3- and 5-year time periods, versus the relevant benchmarks and/or peer
groups consistent with the investment style. This evaluation takes into account
relative performance of the accounts to each accounts individual benchmark
and/or the relative composite performance of all accounts to one or more
relevant benchmarks consistent with the overall investment style. Research
analysts are evaluated on the overall team's relative investment performance as
well as the performance and quality of their individual research.
Fund | Benchmark Index for Incentive Period |
Tax-Advantaged Dividend Income Fund | CBOE S&P 500 BuyWrite Index |
Share Ownership by Portfolio Managers. The following table indicates as of October 31, 2017 the value of shares beneficially owned by the portfolio managers in the Fund.
Portfolio Manager | Range of Beneficial Ownership in the Fund |
Gregory M McMurran | None |
Dennis Bein, CFA | None |
Harindra de Silva, Ph. D., CFA | None |
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
REGISTRANT PURCHASES OF EQUITY SECURITIES
Maximum | ||||
Total number | number of | |||
of shares | shares that | |||
purchased as | may yet be | |||
Total number | part of publicly | purchased | ||
of shares | Average price | announced | under the | |
Period | purchased | per share | plans* | plans* |
Nov-16 | - | - | - | 3,244,916 |
Dec-16 | - | - | - | 3,244,916 |
Jan-17 | - | - | - | 3,538,496 |
Feb-17 | - | - | - | 3,538,496 |
Mar-17 | - | - | - | 3,538,496 |
Apr-17 | - | - | - | 3,538,496 |
May-17 | - | - | - | 3,538,496 |
Jun-17 | - | - | - | 3,538,496 |
Jul-17 | - | - | - | 3,538,496 |
Aug-17 | - | - | - | 3,538,496 |
Sep-17 | - | - | - | 3,538,496 |
Oct-17 | - | - | - | 3,538,496 |
Total | - | - | - |
*In December 2007, the Board of Trustees approved a share repurchase plan, which is subsequently reviewed and approved by the Board of Trustees each year in December. Under the current share repurchase plan, the Fund may purchase in the open market up to 10% of its outstanding common shares as of December 31, 2016. The current share repurchase plan will remain in effect between January 1, 2017 and December 31, 2017. Previously, under the share repurchase plan, the Fund could purchase in the open market up to 10% of its outstanding common shares as of December 31, 2015 between January 1, 2016 and December 31, 2016.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The registrant has adopted procedures by which shareholders may recommend nominees to the registrant's Board of Trustees. A copy of the procedures is filed as an exhibit to this Form N-CSR. See attached "John Hancock Funds Nominating and Governance Committee Charter".
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The Fund did not participate directly in securities lending activities. See Note 8 to financial statements in Item 1.
ITEM 13. EXHIBITS.
(a)(1) Code of Ethics for Senior Financial Officers is attached.
(a)(2) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.
(b) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.
(c)(1) Proxy Voting Policies and Procedures are attached.
(c)(2) Submission of Matters to a Vote of Security Holders is attached. See attached John Hancock Funds Nominating and Governance Committee Charter.
(c)(3) Registrants notice to shareholders pursuant to Registrants exemptive order granting an exemption from Section 19(b) of the Investment Company Act of 1940, as amended and Rule 19b-1 thereunder regarding distributions made pursuant to the Registrants Managed Distribution Plan.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
John Hancock Tax-Advantaged Dividend Income Fund
By: | /s/ Andrew Arnott |
Andrew Arnott | |
President | |
Date: | December 19, 2017 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Andrew Arnott |
Andrew Arnott | |
President | |
Date: | December 19, 2017 |
By: | /s/ Charles A. Rizzo |
Charles A. Rizzo | |
Chief Financial Officer | |
Date: | December 19, 2017 |
John Hancock Variable Insurance Trust
John Hancock Funds
John Hancock Funds II
John Hancock Exchange-Traded Fund Trust
Sarbanes-Oxley Code of Ethics
for
Principal Executive, Principal Financial Officer & Treasurer
I. Covered Officers/Purpose of the Code
This code of ethics (this “Code”) for John Hancock Variable Insurance Trust, John Hancock Funds1, and John Hancock Funds II, John Hancock Exchange-Traded Fund Trust and, each a registered management investment company under the Investment Company Act of 1940, as amended (“1940 Act”), which may issue shares in separate and distinct series (each investment company and series thereunder to be hereinafter referred to as a “Fund”), applies to each Fund’s Principal Executive Officer (“President”), Principal Financial Officer (“Chief Financial Officer”) and Treasurer (“Treasurer”) (the “Covered Officers” as set forth in Exhibit A) for the purpose of promoting:
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honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; |
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full, fair, accurate, timely and understandable disclosure in reports and documents that the Fund files with, or submits to, the Securities and Exchange Commission (“SEC”) and in other public communications made by the Fund; |
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compliance with applicable laws and governmental rules and regulations; |
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the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and |
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accountability for adherence to the Code. |
1 John Hancock Funds includes the following trusts: John Hancock Financial Opportunities Fund; John Hancock Bond Trust; John Hancock California Tax-Free Income Fund; John Hancock Capital Series; John Hancock Funds III; John Hancock Income Securities Trust; John Hancock Investment Trust; John Hancock Investment Trust II; John Hancock Investment Trust III; John Hancock Investors Trust; John Hancock Municipal Securities Trust; John Hancock Premium Dividend Fund ; John Hancock Preferred Income Fund; John Hancock Preferred Income Fund II; John Hancock Preferred Income Fund III; John Hancock Sovereign Bond Fund; John Hancock Strategic Series; John Hancock Tax-Advantaged Dividend Income Fund; John Hancock Tax-Advantaged Global Shareholder Yield Fund; John Hancock Hedged Equity and Income Fund; and John Hancock Collateral Trust.
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Each of the Covered Officers should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest.
II. | Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest |
Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Fund and the investment adviser and the Service Provider of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Fund, for the investment adviser or for the Service Provider), be involved in establishing policies and implementing decisions which will have different effects on the investment adviser, the Service Provider and the Fund. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Fund and the investment adviser and the Service Provider and is consistent with the performance by the Covered Officers of their duties as officers of the Fund. Thus, if such participation is performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, it will be deemed to have been handled ethically. In addition, it is recognized by the Fund’s Board of Trustees/Directors (the “Board”) that the Covered Officers may also be officers or employees of one or more other investment companies covered by other Codes.
Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but the Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of the Fund.
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Each Covered Officer must:
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not use his/her personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally to the detriment of the Fund; |
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not cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than for the benefit of the Fund; and |
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not use material non-public knowledge of portfolio transactions made or contemplated for the Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions. |
Additionally, conflicts of interest may arise in other situations, the propriety of which may be discussed, if material, with the Fund’s Chief Compliance Officer (“CCO”). Examples of these include:
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serve as a director/trustee on the board of any public or private company; |
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the receipt of any non-nominal gifts; |
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the receipt of any entertainment from any company with which the Fund has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety (or other formulation as the Fund already uses in another code of conduct); |
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any ownership interest in, or any consulting or employment relationship with, any of the Fund’s service providers, other than its investment adviser, any sub-adviser, principal underwriter, administrator or any affiliated person thereof; and |
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a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Fund for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer’s employment, such as compensation or equity ownership. |
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Each Covered Officer should familiarize himself or herself with the disclosure requirements generally applicable to the Fund; |
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Each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Fund to others, whether within or outside the Fund, including to the Fund’s directors and auditors, and to governmental regulators and self-regulatory organizations; |
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Each Covered Officer should, to the extent appropriate within his/her area of responsibility, consult with other officers and employees of the Fund and the Fund’s adviser or any sub-adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Fund files with, or submits to, the SEC and in other public communications made by the Fund; and |
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It is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. |
IV. Reporting & Accountability
Each Covered Officer must:
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upon adoption of the Code (or thereafter as applicable, upon becoming an Covered Officer), affirm in writing to the Fund’s CCO that he/she has received, read, and understands the Code; |
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annually thereafter affirm to the Fund’s CCO that he/she has complied with the requirements of the Code; |
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not retaliate against any employee or Covered Officer or their affiliated persons for reports of potential violations that are made in good faith; |
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notify the Fund’s CCO promptly if he/she knows of any violation of this Code (Note: failure to do so is itself a violation of this Code); and |
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report at least annually any change in his/her affiliations from the prior year. |
The Fund’s CCO is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. However, any approvals or waivers sought by the Principal Executive Officer will be considered by the Fund’s Board or the Compliance Committee thereof (the “Committee”).
The Fund will follow these procedures in investigating and enforcing this Code:
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the Fund’s CCO will take all appropriate action to investigate any potential violations reported to him/her; |
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if, after such investigation, the CCO believes that no violation has occurred, the CCO is not required to take any further action; |
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any matter that the CCO believes is a violation will be reported to the Board or, if applicable, Compliance Committee; |
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if the Board or, if applicable, Compliance Committee concurs that a violation has occurred, the Board, either upon its determination of a violation or upon recommendation of the Compliance Committee, if applicable, will consider appropriate action, which may include review of, and appropriate modifications to, applicable policies and procedures; notification to appropriate personnel of the Service Provider or the investment adviser or its board; or a recommendation to dismiss the Registrant’s Executive Officer; |
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the Board, or if applicable the Compliance Committee, will be responsible for granting waivers, as appropriate; and |
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any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. |
V. Other Policies & Procedures
This Code shall be the sole code of ethics adopted by the Fund for purposes of Section 406 of the Sarbanes-Oxley Act of 2002 and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Fund, the Fund’s adviser, any sub-adviser, principal underwriter or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Fund’s and its investment adviser’s codes of ethics under Rule 204A-1 under the Investment Advisers Act and Rule 17j-1 under the Investment Company Act, respectively, are separate requirements applying to the Covered Officers and others, and are not part of this Code.
VI. Amendments
Any amendments to this Code, other than amendments to Exhibit A, must be approved or ratified by a majority vote of the Fund’s Board, including a majority of independent directors.
VII. Confidentiality
All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than the Fund’s Board and its counsel, the investment adviser and the relevant Service Providers.
VIII. Internal Use
The Code is intended solely for the internal use by the Fund and does not constitute an admission, by or on behalf of the Fund, as to any fact, circumstance, or legal conclusion.
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Exhibit A
Persons Covered by this Code of Ethics
(As of December 31, 2016)
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Principal Executive Officer and President – Andrew Arnott |
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Principal Financial Officer and Chief Financial Officer – Charles Rizzo |
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Treasurer – Salvatore Schiavone |
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Principal Executive Officer and President – Andrew Arnott |
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Principal Financial Officer and Chief Financial Officer – Charles Rizzo |
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Treasurer – Salvatore Schiavone |
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Principal Executive Officer and President – Andrew Arnott |
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Principal Financial Officer and Chief Financial Officer – Charles Rizzo |
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Treasurer – Salvatore Schiavone |
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Principal Executive Officer and President – Andrew Arnott |
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Principal Financial Officer and Chief Financial Officer – Charles Rizzo |
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Treasurer – Salvatore Schiavone |
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CERTIFICATION
I, Andrew Arnott, certify that:
1. I have reviewed this report on Form N-CSR of the John Hancock Tax-Advantaged Dividend Income Fund (the registrant);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: | December 19, 2017 | /s/ Andrew Arnott | ||
Andrew Arnott | ||||
President |
CERTIFICATION
I, Charles A. Rizzo, certify that:
1. I have reviewed this report on Form N-CSR of the John Hancock Tax-Advantaged Dividend Income Fund (the registrant);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: | December 19, 2017 | /s/ Charles A. Rizzo | ||
Charles A. Rizzo | ||||
Chief Financial Officer |
Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of
2002
In connection with the attached Report of John Hancock Tax-Advantaged Dividend Income Fund (the registrant) on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the registrant does hereby certify that, to the best of such officer's knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant as of, and for, the periods presented in the Report.
/s/ Andrew Arnott | |
Andrew Arnott | |
President |
Dated: December 19, 2017
/s/ Charles A. Rizzo | |
Charles A. Rizzo | |
Chief Financial Officer |
Dated: December 19, 2017
A signed original of this written statement, required by Section 906, has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.
General Compliance Policies for Trust & Adviser |
Section 5: Fiduciary Standards & Affiliated Persons Issues
5Ea. Proxy Voting Policies and Procedures for the Adviser |
Version | Effective Date |
1 | 01-01-2012 |
2 | 02-01-2015 |
3 | Sept. 2015 |
4 | 05-01-2017 |
Versions prior to 01-01-2012 available from the CCO’s Office upon request.
Last updated May 2017
5Ea. Proxy Voting Policies and Procedures for the Adviser
General |
The Advisers are registered investment advisers under Advisers Act and serve as the investment advisers to the Funds. The Advisers generally retain one or more sub-advisers to manage the assets of the Funds, including voting proxies with respect to a Fund’s portfolio securities. From time to time, however, the Advisers may elect to manage directly the assets of a Fund, including voting proxies with respect to such Fund’s portfolio securities, or a Fund’s Board may otherwise delegate to the Advisers authority to vote such proxies. Rule 206(4)-6 under the Advisers Act requires that a registered investment adviser adopt and implement written policies and procedures reasonably designed to ensure that it votes proxies with respect to a client’s securities in the best interest of the client. Pursuant thereto, the Advisers have adopted and implemented these proxy voting policies and procedures (the “Proxy Procedures”).
Procedure |
Fiduciary Duty
The Advisers have a fiduciary duty to vote proxies on behalf of a Fund in the best interest of the Fund and its shareholders.
Voting of Proxies
The Advisers will vote proxies with respect to a Fund’s portfolio securities when authorized to do so by the Fund and subject to the Fund’s proxy voting policies and procedures and any further direction or delegation of authority by the Fund’s Board. The decision on how to vote a proxy will be made by the person(s) to whom the Advisers have from time to time delegated such responsibility (the “Designated Person”). The Designated Person may include the Fund’s portfolio manager(s) and a Proxy Voting Committee, as described below.
When voting proxies with respect to a Fund’s portfolio securities, the following standards will apply:
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The Designated Person will vote based on what it believes is in the best interest of the Fund and its shareholders and in accordance with the Fund’s investment guidelines. |
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Each voting decision will be made independently. To assist with the analysis of voting issues and/or to carry out the actual voting process the Designated Person may enlist the services of (1)reputable professionals (who may include persons employed by or otherwise associated with the Advisers or any of its affiliated persons) or (2) independent proxy evaluation services such as Institutional Shareholder Services. However, the ultimate decision as to how to vote a proxy will remain the responsibility of the Designated Person. |
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The Advisers believe that a good management team of a company will generally act in the best interests of the company. Therefore, the Designated Person will take into consideration as a key factor in voting proxies with respect to securities of a company that are held by the Fund the quality of the company’s management. In general, the Designated Person will vote as recommended by company management except in situations where the Designated Person believes such recommended vote is not in the best interests of the Fund and its shareholders. |
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As a general principle, voting with respect to the same portfolio securities held by more than one Fund should be consistent among those Funds having substantially the same investment mandates. |
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The Advisers will provide the Fund, from time to time in accordance with the Fund’s proxy voting policies and procedures and any applicable laws and regulations, a record of the Advisers’ voting of proxies with respect to the Fund’s portfolio securities. |
Material Conflicts of Interest
In carrying out its proxy voting responsibilities, the Advisers will monitor and resolve potential material conflicts (“Material Conflicts”) between the interests of (a) a Fund and (b) the Advisers or any of its affiliated persons. Affiliates of the Advisers include Manulife Financial Corporation and its subsidiaries. Material Conflicts may arise, for example, if a proxy vote relates to matters involving any of these companies or other issuers in which the Advisers or any of their affiliates has a substantial equity or other interest.
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Last updated May 2017
5Ea. Proxy Voting Policies and Procedures for the Adviser
If the Advisers or a Designated Person become aware that a proxy voting issue may present a potential Material Conflict, the issue will be referred to the Advisers’ Legal Department and/or the Office of the CCO. If the Legal Department and/or the Office of the CCO, as applicable determines that a potential Material Conflict does exist, a Proxy Voting Committee will be appointed to consider and resolve the issue. The Proxy Voting Committee may make any determination that it considers reasonable and may, if it chooses, request the advice of an independent, third-party proxy service on how to vote the proxy.
Voting Proxies of Underlying Funds of a Fund of
Funds
The Advisers or the Designated Person will vote proxies with respect
to the shares of a Fund that are held by another Fund that operates as a Fund of Funds”) in the manner provided in the
proxy voting policies and procedures of the Fund of Funds (including such policies and procedures relating to material
conflicts of interest) or as otherwise directed by the board of trustees or directors of the Fund of Funds.
Proxy Voting Committee(s)
The Advisers will from time to time, and on such temporary or longer term basis as they deem appropriate, establish one or more Proxy Voting Committees. A Proxy Voting Committee shall include the Advisers’ CCO and may include legal counsel. The terms of reference and the procedures under which a Proxy Voting Committee will operate will be reviewed from time to time by the Legal and Compliance Department. Records of the deliberations and proxy voting recommendations of a Proxy Voting Committee will be maintained in accordance with applicable law, if any, and these Proxy Procedures.
Records Retention
The Advisers will retain (or arrange for the retention by a third party of) such records relating to proxy voting pursuant to these Proxy Procedures as may be required from time to time by applicable law and regulations, including the following:
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These Proxy Procedures and all amendments hereto; |
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2. |
All proxy statements received regarding Fund portfolio securities; |
3. |
Records of all votes cast on behalf of a Fund; |
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4. |
Records of all Fund requests for proxy voting information; |
5. |
Any documents prepared by the Designated Person or a Proxy Voting Committee that were material to or memorialized the basis for a voting decision; |
6. |
All records relating to communications with the Funds regarding Conflicts; and |
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7. |
All minutes of meetings of Proxy Voting Committees. |
The Fund Administration Department Investment Compliance group, the Office of the CCO, and/or the Legal Department are responsible for maintaining the documents set forth above as needed and deemed appropriate. Such documents will be maintained in the Fund Administration Department Investment Compliance group, Office of the CCO, and/or the Legal Department for the period set forth in the Records Retention Schedule.
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Last updated May 2017
5Ea. Proxy Voting Policies and Procedures for the Adviser
Reporting to Fund Boards
The CCO of the Advisers will provide the Board with a copy of these Proxy Procedures, accompanied by a certification that represents that the Proxy Procedures have been adopted by the Advisers in conformance with Rule 206(4)-6 under the Advisers Act. Thereafter, the Advisers will provide the Board with notice and a copy of any amendments or revisions to the Procedures and will report quarterly to the Board all material changes to these Proxy Procedures.
The CCO’s annual written compliance report to the Board will contain a summary of material changes to the Proxy Procedures during the period covered by the report.
If the Advisers vote any proxies in a manner inconsistent with either these Proxy Procedures or a Fund’s proxy voting policies and procedures, the CCO will provide the Board with a report detailing such exceptions.
In the case of proxies voted by a sub-adviser to a Fund pursuant to the Fund’s proxy voting procedures, the Advisers will request the sub-adviser to certify to the Advisers that the sub-adviser has voted the Fund’s proxies as required by the Fund’s proxy voting policies and procedures and that such proxy votes were executed in a manner consistent with these Proxy Procedures and to provide the Advisers with a report detailing any instances where the sub-adviser voted any proxies in a manner inconsistent with the Fund’s proxy voting policies and procedures. The COO of the Advisers will then report to the Board on a quarterly basis regarding the sub-adviser certification and report to the Board any instance where the sub-adviser voted any proxies in a manner inconsistent with the Fund’s proxy voting policies and procedures.
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Last updated May 2017
General Compliance Policies for Trust & Adviser |
Section 7: Disclosures, Filings, and Reporting
7Ha. John Hancock Funds Proxy Voting Procedures |
Version | Effective Date |
1 | 01-01-2012 |
2 | 02-01-2015 |
3 | Sept. 2015 |
Versions prior to 01-01-2012 available from the CCO’s Office upon request.
Last updated: September 2015
General |
The Majority of the Independent Board of Trustees (the “Board”) of each registered investment company of the Trusts, has adopted these proxy voting policies and procedures (the “Trust Proxy Policy”).
Each fund of the Trust or any other registered investment company (or series thereof) (each, a “fund”) is required to disclose its proxy voting policies and procedures in its registration statement and, pursuant to Rule 30b1-4 under the 1940 Act, file annually with the Securities and Exchange Commission and make available to shareholders its actual proxy voting record. In this regard, the Trust Policy is set forth below.
Delegation of Proxy Voting Responsibilities
It is the policy of the Trust to delegate the responsibility for voting proxies relating to portfolio securities held by a fund to the fund’s investment adviser
(“adviser”) or, if the fund’s adviser has delegated portfolio management responsibilities to one or more investment sub-adviser(s), to the fund’s sub-adviser(s), subject to the Board’s continued oversight. The sub-adviser
for each fund shall vote all proxies relating to securities held by each fund and in that connection, and subject to any further policies and procedures contained herein, shall use proxy voting policies and procedures adopted by each sub-adviser in
conformance with Rule 206(4)-6 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Except as noted below under Material Conflicts of Interest, the Trust Proxy Policy with respect to a Fund shall incorporate that adopted by the Fund’s sub-adviser with respect to voting proxies held by its clients (the “Sub-adviser Proxy Policy”). Each Sub-adviser Policy, as it may be amended from time to time, is hereby incorporated by reference into the Trust Proxy Policy. Each sub-adviser to a Fund is directed to comply with these policies and procedures in voting proxies relating to portfolio securities held by a fund, subject to oversight by the Fund’s adviser and by the Board. Each Adviser to a Fund retains the responsibility, and is directed, to oversee each sub-adviser’s compliance with these policies and procedures, and to adopt and implement such additional policies and procedures as it deems necessary or appropriate to discharge its oversight responsibility. Additionally, the Trust’s Chief Compliance Officer (“CCO”) shall conduct such monitoring and supervisory activities as the CCO or the Board deems necessary or appropriate in order to appropriately discharge the CCO’s role in overseeing the sub-advisers’ compliance with these policies and procedures.
The delegation by the Board of the authority to vote proxies relating to portfolio securities of the funds is entirely voluntary and may be revoked by the Board, in whole or in part, at any time.
Voting Proxies of Underlying Funds of a Fund of Funds | |
A. |
Where the Fund of Funds is not the Sole Shareholder of the Underlying Fund |
With respect to voting proxies relating to the shares of an underlying fund (an “Underlying Fund”) held by a Fund of the Trust operating as a fund of funds (a “Fund of Funds”) in reliance on Section 12(d)(1)(G) of the 1940 Act where the Underlying Fund has shareholders other than the Fund of Funds which are not other Fund of Funds, the Fund of Funds will vote proxies relating to shares of the Underlying Fund in the same proportion as the vote of all other holders of such Underlying Fund shares. | |
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B. |
Where the Fund of Funds is the Sole Shareholder of the Underlying Fund |
In the event that one or more Funds of Funds are the sole shareholders of an Underlying Fund, the Adviser to the Fund of Funds or the Trusts will vote proxies relating to the shares of the Underlying Fund as set forth below unless the Board elects to have the Fund of Funds seek voting instructions from the shareholders of the Funds of Funds in which case the Fund of Funds will vote proxies relating to shares of the Underlying Fund in the same proportion as the instructions timely received from such shareholders. |
Last updated: September 2015
1. |
Where Both the Underlying Fund and the Fund of Funds are Voting on Substantially Identical Proposals |
In the event that the Underlying Fund and the Fund of Funds are voting on substantially identical proposals (the “Substantially Identical Proposal”), then the Adviser or the Fund of Funds will vote proxies relating to shares of the Underlying Fund in the same proportion as the vote of the shareholders of the Fund of Funds on the Substantially Identical Proposal.
2. |
Where the Underlying Fund is Voting on a Proposal that is Not Being Voted on by the Fund of Funds | |
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(a) |
Where there is No Material Conflict of Interest Between the Interests of the Shareholders of the Underlying Fund and the Adviser Relating to the Proposal | |
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(b) |
Where there is a Material Conflict of Interest Between the Interests of the Shareholders of the Underlying Fund and the Adviser Relating to the Proposal |
Material Conflicts of Interest
If (1) a sub-adviser to a Fund becomes aware that a vote presents a material conflict between the
interests of (a) shareholders of the Fund; and (b) the Fund’s Adviser, sub-adviser, principal underwriter, or any of their affiliated persons, and (2) the sub-adviser does not propose to vote on the particular issue in the manner prescribed by its
Sub-adviser Proxy Policy or the material conflict of interest procedures set forth in its Sub-adviser Proxy Policy are otherwise triggered, then the sub-adviser will follow the material conflict of interest procedures set forth in its Sub-adviser Proxy
Policy when voting such proxies.
If a Sub-adviser Proxy Policy provides that in the case of a material conflict of interest between Fund shareholders and another party, the sub-adviser will ask the Board to provide voting instructions, the sub-adviser shall vote the proxies, in its discretion, as recommended by an independent third party, in the manner prescribed by its Sub-adviser Proxy Policy or abstain from voting the proxies.
Securities Lending Program
Certain of the Funds participate in a securities lending program with the Trusts through an agent lender.
When a Fund’s securities are out on loan, they are transferred into the borrower’s name and are voted by the borrower, in its discretion. Where a sub-adviser determines, however, that a proxy vote (or other shareholder action) is materially
important to the client’s account, the sub-adviser should request that the agent recall the security prior to the record date to allow the sub-adviser to vote the securities.
Disclosure of Proxy Voting Policies and Procedures in the Trust’s Statement of Additional Information (“SAI”)
The Trust shall include in its SAI a summary of the Trust Proxy Policy and of the Sub-adviser Proxy Policy included therein. (In lieu of including a summary of these policies and procedures, the Trust may include each full Trust Proxy Policy and Sub-adviser Proxy Policy in the SAI.)
Last updated: September 2015
Disclosure of Proxy Voting Policies and Procedures in Annual and Semi-Annual Shareholder Reports
The Trusts shall disclose in annual
and semi-annual shareholder reports that a description of the Trust Proxy Policy, including the Sub-adviser Proxy Policy, and the Trusts’ proxy voting record for the most recent 12 months ended June 30 are available on the Securities and Exchange
Commission’s (“SEC”) website, and without charge, upon request, by calling a specified toll-free telephone number. The Trusts will send these documents within three business days of receipt of a request, by first-class mail or other
means designed to ensure equally prompt delivery. The Fund Administration Department is responsible for preparing appropriate disclosure regarding proxy voting for inclusion in shareholder reports and distributing reports. The Legal Department supporting
the Trusts is responsible for reviewing such disclosure once it is prepared by the Fund Administration Department.
Filing of Proxy Voting Record on Form N-PX
The Trusts will annually file their complete proxy voting record with the SEC on Form N-PX.
The Form N-PX shall be filed for the twelve months ended June 30 no later than August 31 of that year. The Fund Administration department, supported by the Legal Department supporting the Trusts, is responsible for the annual filing.
Procedure |
Review of Sub-advisers’ Proxy Voting
The Trusts have delegated proxy voting authority with respect to Fund portfolio securities in accordance with the Trust Policy, as set forth above.
Consistent with this delegation, each sub-adviser is responsible for the following:
1. |
Implementing written policies and procedures, in compliance with Rule 206(4)-6 under the Advisers Act, reasonably designed to ensure that the sub-adviser votes portfolio securities in the best interest of shareholders of the Trusts. |
2. |
Providing the Advisers with a copy and description of the Sub-adviser Proxy Policy prior to being approved by the Board as a sub-adviser, accompanied by a certification that represents that the Sub-adviser Proxy Policy has been adopted in conformance with Rule 206(4)-6 under the Advisers Act. Thereafter, providing the Advisers with notice of any amendment or revision to that Sub-adviser Proxy Policy or with a description thereof. The Advisers are required to report all material changes to a Sub-adviser Proxy Policy quarterly to the Board. The CCO’s annual written compliance report to the Board will contain a summary of the material changes to each Sub-adviser Proxy Policy during the period covered by the report. |
3. |
Providing the Adviser with a quarterly certification indicating that the sub-adviser did vote proxies of the funds and that the proxy votes were executed in a manner consistent with the Sub-adviser Proxy Policy. If the sub-adviser voted any proxies in a manner inconsistent with the Sub-adviser Proxy Policy, the sub-adviser will provide the Adviser with a report detailing the exceptions. |
Adviser Responsibilities
The Trusts have retained a proxy voting service to coordinate, collect, and maintain all proxy-related
information, and to prepare and file the Trust’s reports on Form N-PX with the SEC.
The Advisers, in accordance with their general oversight responsibilities, will periodically review the voting records
maintained by the proxy voting service in accordance with the following procedures:
1. |
Receive a file with the proxy voting information directly from each sub-adviser on a quarterly basis. |
2. |
Select a sample of proxy votes from the files submitted by the sub-advisers and compare them against the proxy voting service files for accuracy of the votes. |
Last updated: September 2015
3. |
Deliver instructions to shareholders on how to access proxy voting information via the Trust’s semi-annual and annual shareholder reports. |
The Fund Administration Department, in conjunction with the Legal Department supporting the Trusts, is responsible for the foregoing procedures.
Proxy Voting Service Responsibilities
Proxy voting services retained by the Trusts are required to undertake the following
procedures:
● |
Aggregation of Votes: |
The proxy voting service’s proxy disclosure system will collect fund-specific and/or account-level voting records, including votes cast by multiple sub-advisers or third party voting services.
● |
Reporting: |
The proxy voting service’s proxy disclosure system will provide the following reporting features:
1. |
multiple report export options; |
2. |
report customization by fund-account, portfolio manager, security, etc.; and |
3. |
account details available for vote auditing. |
● |
Form N-PX Preparation and Filing: |
The Advisers will be responsible for oversight and completion of the filing of the Trusts’ reports on Form N-PX with the SEC. The proxy voting service will prepare the EDGAR version of Form N-PX and will submit it to the adviser for review and approval prior to filing with the SEC. The proxy voting service will file Form N-PX for each twelve-month period ending on June 30. The filing must be submitted to the SEC on or before August 31 of each year. The Fund Administration Department, in conjunction with the Legal Department supporting the Trusts, is responsible for the foregoing procedures.
Last updated: September 2015
Analytic Investors, LLC
Proxy Voting Policy and Procedure
Analytic Investors, LLC (“Analytic”) assumes a fiduciary responsibility to vote proxies in the best interest of its clients. In addition, with respect to benefit plans under the Employee Retirement Income Securities Act (ERISA), Analytic acknowledges its responsibility as a fiduciary to vote proxies prudently and solely in the best interest of plan participants and beneficiaries. So that it may fulfill these fiduciary responsibilities to clients, Analytic has adopted and implemented these written policies and procedures reasonably designed to ensure that it votes proxies in the best interest of clients.
Proxy Oversight
Analytic acknowledges that it has a duty of care to its clients that requires it to monitor corporate events and vote client proxies. The firm’s Chief Operating Officer and Chief Compliance Officer monitor policies and procedures governing proxy voting. Analytic has a policy not to be unduly influenced by representatives of management or any public interest or other outside groups when voting proxies. To this end, Analytic has contracted with an independent proxy voting service (the “ProxyService”).
Proxy Voting Service
The role of the Proxy Service includes researching proxy matters, executing the voting process, maintaining a record of all proxies voted on behalf of Analytic, advising Analytic of any material conflicts of interest (see below), and providing Analytic with documentation of the voting record. Analytic has opted to delegate all proxy voting to the Proxy Service except for those instances when a conflict of interest (see below) prevents the Proxy Service from voting according to its guidelines. A copy of the voting policy guidelines of the Proxy Service is attached.
Conflicts of Interest
Occasions may arise during the voting process in which the best interest of clients might conflict with the Proxy Service’s interests. A conflict of interest would generally apply when circumstances where the proxy services internal controls do not provide sufficient separation of duties, including: (i) business relationships where the Proxy Service has a substantial business relationship with, or is actively soliciting business from, a company soliciting proxies, or (ii) personal or family relationships whereby an employee of the Proxy Service has a family member or other personal relationship that is affiliated with a company soliciting proxies, such as a spouse who serves as a director of a public company, or (iii) if a substantial business relationship exists with a proponent or opponent of a particular initiative.
At times of such conflict of interest, the Proxy Service will recuse itself from voting a proxy and notify Analytic. Upon notification of the Proxy Service’s recusal from voting, Analytic’s Chief Compliance Officer or Chief Operating Officer will then vote the proxy, adhering to the original voting policy guidelines provided by the Proxy Service. Analytic will not override the voting guidelines of the Proxy Service. A record of the voting by Analytic will be retained by the Chief Compliance Officer.
Voting Guidelines
Analytic has reviewed the Proxy Service’s voting recommendations and have determined that the policy provides guidance in the best interest of our clients. A copy of these guidelines is attached. The firm’s clients may elect to institute client specific voting guidelines. Upon notification of these instructions, Analytic will supply the Proxy Service with the client directed voting guidelines.
Proxy Voting Record
The Chief Compliance Officer will ensure the Proxy Service can provide, on demand, a record containing the following information regarding the voting of proxies: (i) the name of the issuer, (ii) the CUSIP number (or similar security identification information), (iii) the shareholder meeting date, (iv) number of shares voted, (v) a brief description of the matter brought to vote; (vi) whether the proposal was submitted by management or a shareholder, (vii) how the Service voted the proxy (for, against, abstained), and (viii) whether the proxy was voted for or against management.
Obtaining a Voting Proxy Report
Clients may request a copy of the guidelines governing proxy voting and/or a report on how their individual securities were voted by calling Analytic’s Chief Compliance Officer at 1-800-618-1872 or compliance@aninvestor.com. The report will be provided free of charge.
Recordkeeping
Pursuant to Rule 204-2 of the Investment Advisers Act of 1940, Analytic will maintain the following records for five years in an easily accessible place, the first two years in its office:
● |
Analytic’s proxy voting policies and procedures, as well as the voting guidelines of the Proxy Service; |
● |
Proxy statements received regarding client securities (proxy statements filed via EDGAR will not be separately maintained by Analytic); |
● |
Records of votes cast on behalf of clients; |
● |
Records of written client requests for voting information; |
● |
Records of written responses from Analytic to both written and verbal client requests; and |
● |
Any other documents prepared that were material to Analytic’s decision to vote a proxy or that memorialized the basis for the decision. |
JOHN HANCOCK
FUNDS1
NOMINATING AND GOVERNANCE COMMITTEE
CHARTER
Overall Role and Responsibility
The Nominating and Governance Committee (the Committee) of each of the Trusts shall (1) make determinations and recommendations to the Board of Trustees (the Board) regarding issues related to (a) the composition of the Board and (b) corporate governance matters applicable to the Trustees who are not interested persons as defined in the Investment Company Act of 1940, as amended (the 1940 Act), of any of the Trusts, or of any Funds investment adviser, subadviser or principal underwriter and who are independent as defined in the rules of the New York Stock Exchange (NYSE) (the Independent Trustees) and (2) discharge such additional duties, responsibilities and functions as are delegated to it from time to time.
Membership
The Nominating and Governance Committee (the Committee) shall be composed of all of the Independent Trustees of the Board. One member of the Committee shall be appointed by the Board as Chair of the Committee. The chair shall be responsible for leadership of the Committee, including scheduling meetings or reviewing and approving the schedule for them, preparing agendas or reviewing and approving them before meetings, presiding over meetings of the Committee and making reports to the full Board, as appropriate.
Structure, Operations and Governance
Meetings and Actions by Written Consent. The Committee shall meet as often as required or as the Committee deems appropriate, with or without management present. Meetings may be called and notice given by the Committee chair or a majority of the members of the Committee. Members may attend meetings in person or by telephone. The Committee may act by written consent to the extent permitted by law and the Funds governing documents. The Committee shall report to the Board on any significant action it takes not later than the next following Board meeting.
Required Vote and Quorum. The affirmative vote of a majority of the members of the Committee participating in any meeting of the Committee at which a quorum is present is necessary for the adoption of any resolution. At least a majority of the Committee members present at the meeting in person or by telephone shall constitute a quorum for the transaction of business.
____________________
1 John Hancock Funds includes each trust and series thereof listed in Appendix A, as may be amended from time to time (each individually, a Trust, and collectively, the Trusts, and each series thereof, a Portfolio or Fund, and collectively, the Portfolios or Funds).
1
Delegation to Subcommittees. The Committee may delegate any portion of its authority to a subcommittee of one or more members.
Appropriate Resources and Authority. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain special counsel and other advisers, experts or consultants, at the Funds expense, as it determines necessary or appropriate to carry out its duties and responsibilities. In addition, the Committee shall have direct access to such officers of and service providers to the Funds as it deems desirable.
Review of Charter. The Committee Charter shall be approved by at least a majority of the Independent Trustees of the Trust. The Committee shall review and assess the adequacy of this Charter periodically and, where necessary or as it deems desirable, will recommend changes to the Board for its approval. The Board may amend this Charter at any time in response to recommendations from the Committee or on its own motion.
Executive Sessions. The Committee may meet privately and may invite non-members to attend such meetings. The Committee may meet with representatives of the Investment Management Services department of the Funds advisers, internal legal counsel of the Funds advisers, members of the John Hancock Funds Risk & Investment Operations Committee (the RIO Committee) and with representatives of the Funds service providers, including the subadvisers, to discuss matters that relate to the areas for which the Committee has responsibility.
Specific Duties and Responsibilities
The Committee shall have the following duties and powers, to be exercised at such times and in such manner as the Committee shall determine:
1. | Except where a Trust is legally required to nominate individuals recommended by another, to identify individuals qualified to serve as Independent Trustees of the Trusts, and to consider and recommend to the full Board nominations of individuals to serve as Trustees. | ||
2. | To consider, as it deems necessary or appropriate, the criteria for persons to fill existing or newly created Trustee vacancies. The Committee shall use the criteria and principles set forth in Annex A to guide its Trustee selection process. | ||
3. | To consider and recommend changes to the Board regarding the size, structure, and composition of the Board. | ||
4. | To evaluate, from time to time, and determine changes to the retirement policies for the Independent Trustees, as appropriate. | ||
5. | To periodically review the Boards committee structure and, in collaboration with the Chairs of the various Committees, the charters of the Boards committees, and recommend to the Board of Trustees changes to the committee structure and charters as it deems appropriate. |
2
6. | To retain and terminate any firm(s) to be used to identify or evaluate or assist in identifying or evaluating potential Independent Board nominees, subject to the Boards sole authority to approve the firms fees and other retention terms. | ||
7. | To consider and determine the amount of compensation to be paid by the Trusts to the Independent Trustees, including the compensation of the Chair of the Board or any Vice-Chair of the Board and of Committee Chairs, and to address compensation-related matters. The Chair of the Board has been granted the authority to approve special compensation to Independent Trustees in recognition of any significant amount of additional time and service to the Trusts provided by them, subject to ratification of any such special compensation by the Committee at the next regular meeting of the Committee. | ||
8. | To coordinate and administer an annual self-evaluation of the Board, which will include, at a minimum, a review of its effectiveness in overseeing the number of Funds in the Fund complex and the effectiveness of its committee structure. | ||
9. | To review the Board Governance Procedures and recommend to the Board of Trustees changes to the Procedures as the Committee deems appropriate. | ||
10. | To report its activities to the full Board and to make such recommendations with respect to the matters described above and other matters as the Committee may deem necessary or appropriate. |
Additional Responsibilities
The Committee will also perform other tasks assigned to it from time to time by the Chair of the Board or by the Board, and will report findings and recommendations to the Board, as appropriate.
Last revised:
3
ANNEX A
The Committee may take into account a wide variety of factors in considering Trustee candidates, including (but not limited to) the criteria set forth below. The Committee may determine that a candidate who does not satisfy these criteria in one or more respects should nevertheless be considered as a nominee if the Committee finds that the criteria satisfied by the candidate and the candidates other qualifications demonstrate the appropriate level of fitness to serve.
General Criteria
1. | Nominees should have a reputation for integrity, honesty and adherence to high ethical standards, and such other personal characteristics as a capacity for leadership and the ability to work well with others. | |
2. | Nominees should have business, professional, academic, financial, accounting or other experience and qualifications which demonstrate that they will make a valuable contribution as Trustees. | |
3. | Nominees should have a commitment to understand the Funds, and the responsibilities of a trustee/director of an investment company and to regularly attend and participate in meetings of the Board and its committees. | |
4. | Nominees should have the ability to understand the sometimes conflicting interests of the various constituencies of the Funds, including shareholders and the investment adviser, and to act in the interests of all shareholders. | |
5. | Nominees should not have, nor appear to have, a conflict of interest that would impair their ability to represent the interests of all the shareholders and to fulfill the responsibilities of a trustee. | |
6. | Nominees should have experience on corporate or other institutional bodies having oversight responsibilities. |
It is the intent of the Committee that at least one Independent Trustee be an audit committee financial expert as that term is defined in Item 3 of Form N-CSR.
Application of Criteria to Current Trustees
The re-nomination of current Trustees should not be viewed as automatic, but should be based on continuing qualification under the criteria set forth above based on, among other things, the current Trustees contribution to the Board and any committee on which he or she serves.
Review of Nominations
1. | The Committee believes that it is in the best interests of each Trust and its shareholders to obtain highly-qualified candidates to serve as members of the Board. | ||
2. | In nominating candidates who would be Independent Trustees, the Committee believes that no particular qualities or skills nor any specific minimum qualifications or disqualifications are controlling or paramount. The Committee shall take into consideration any such factors as it deems appropriate; however, the appropriate mix of skills, expertise and attributes needed to maintain an effective board are sought in the applicant pool as part of every search the Board undertakes for new trustees, including but not limited to the diversity of thought, as well as of gender, race, ethnic background and geographic origin. These factors may also include (but are not limited to) the persons character, integrity, judgment, skill and experience with investment companies and other organizations of comparable purpose, complexity and size and subject to similar legal restrictions and oversight; the interplay of the candidates experience with the experience of other Board members; and the extent to which the candidate would be a desirable addition to the Board and any Committees thereof. Other factors that the Committee may take into consideration include a persons availability and commitment to attend meetings and perform his or her responsibilities; whether or not the person has or had any relationships that might impair or appear to impair his or her independence, such as any business, financial or family relationships with Fund management, the investment adviser and/or any subadviser of the Funds, as applicable, Fund service providers, or their affiliates or with Fund shareholders. The Committee will strive to achieve a group that reflects a diversity of experiences in respect of industries, professions and other experiences, and that is diversified as to thought, gender, race, ethnic background and geographic origin. | ||
3. | While the Committee is solely responsible for the selection and recommendation to the Board of Independent Trustee candidates, the Committee may consider nominees recommended by any source, including shareholders, management, legal counsel and Board members, as it deems appropriate. The Committee may retain a professional search firm or a consultant to assist the Committee in a search for a qualified candidate. Any recommendations from shareholders shall be directed to the Secretary of the relevant Trust at such address as is set forth in the Trusts disclosure documents. Recommendations from management may be submitted to the Committee Chair. All recommendations shall include all information relating to such person that is required to be disclosed in solicitations of proxies for the election of Board members and as specified in the relevant Trusts By-Laws, and must be accompanied by a written consent of the proposed candidate to stand for election if nominated for the Board and to serve if elected by shareholders. |
4. | Any shareholder nomination must be submitted in compliance with all of the pertinent provisions of Rule 14a-8 under the Securities Exchange Act of 1934 in order to be considered by the Committee. In evaluating a nominee recommended by a shareholder, the Committee, in addition to the criteria discussed above, may consider the objectives of the shareholder in submitting that nomination and whether such objectives are consistent with the interests of all shareholders. If the Board determines to include a shareholders candidate among the slate of its designated nominees, the candidates name will be placed on the Trusts proxy card. If the Board determines not to include such candidate among its designated nominees, and the shareholder has satisfied the requirements of Rule 14a-8, the shareholders candidate will be treated as a nominee of the shareholder who originally nominated the candidate. In that case, the candidate will not be named on the proxy card distributed with the Trusts proxy statement. | ||
5. | As long as a current Independent Trustee continues, in the opinion of the Committee, to satisfy the criteria listed above, the Committee generally would favor the re-nomination of a current Trustee rather than a new candidate. Consequently, while the Committee will consider nominees recommended by shareholders to serve as trustees, the Committee may only act upon such recommendations if there is a vacancy on the Board, or the Committee determines that the selection of a new or additional Trustee is in the best interests of the relevant Trust. In the event that a vacancy arises or a change in Board membership is determined to be advisable, the Committee will, in addition to any shareholder recommendations, consider candidates identified by other means as discussed in this Annex A. | ||
6. | With respect to candidates for Independent Trustee, a biography of each candidate shall be acquired and shall be reviewed by counsel to the Independent Trustees and counsel to the Trust to determine the candidates eligibility to serve as an Independent Trustee. | ||
7. | The Committee may from time to time establish specific requirements and/or additional factors to be considered for Independent Trustee candidates as it deems necessary or appropriate. | ||
8. | After its consideration of relevant factors, the Committee shall present its recommendation(s) to the full Board for its consideration. |
Appendix A
List of John Hancock Fund Trusts
John Hancock Financial Opportunities Fund | John Hancock Investors Trust |
John Hancock Bond Trust | John Hancock Municipal Securities Trust |
John Hancock California Tax-Free Income Fund | John Hancock Preferred Income Fund |
John Hancock Capital Series | John Hancock Preferred Income Fund II |
John Hancock Current Interest | John Hancock Preferred Income Fund III |
John Hancock Emerging Markets Income Fund | John Hancock Premium Dividend Fund |
John Hancock Exchange-Traded Fund Trust | |
John Hancock Flexible Income Opportunities Fund | John Hancock Series Trust |
John Hancock Funds II | John Hancock Sovereign Bond Fund |
John Hancock Funds III | John Hancock Strategic Diversified Income Fund |
John Hancock Hedged Equity & Income Fund | John Hancock Strategic Series |
John Hancock Income Securities Trust | John Hancock Tax-Advantaged Dividend Income Fund |
John Hancock Investment Trust | John Hancock Tax-Advantaged Global Shareholder Yield Fund |
John Hancock Investment Trust II | John Hancock Tax-Exempt Series Fund |
John Hancock Investment Trust III | John Hancock Variable Insurance Trust |
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on November 1, 2016, and payable on November 30, 2016. No action is required on your part.
Distribution Period: | November 2016 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable November 30, 2016, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year | for the Fiscal | |||||
Source | Distribution ($) | Distribution | to Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.1380 | 100% | 0.1380 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0000 | 0% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 0.1380 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on October 31, 2016 | 14.29% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of October 31, 2016 | 6.45% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through October 31, 2016 | 16.97% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of October 31, 2016 | 5.74% |
You should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution plan.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the November 2016 distribution pursuant to the Funds managed distribution plan (the Plan). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on December 1, 2016, and payable on December 19, 2016. No action is required on your part.
Distribution Period: | December 2016 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable December 19, 2016, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.0706 | 51% | 0.2760 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0206 | 15% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0468 | 34% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 0.2760 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on November 30, 2016 | 13.09% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of November 30, 2016 | 6.80% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through November 30, 2016 | (4.54%) | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of November 30, 2016 | 1.13% |
You should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the December 2016 distribution pursuant to the Funds managed distribution plan (the Plan). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on December 20, 2016, and payable on January 31, 2017. No action is required on your part.
Distribution Period: | January 2017 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable January 31, 2017, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.0807 | 58% | 0.4140 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0010 | 1% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0563 | 41% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 0.4140 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on December 31, 2016 | 13.02% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of December 31, 2016 | 6.72% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through December 31, 2016 | (1.60 %) | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of December 31, 2016 | 1.68% |
You should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the January 2017 distribution pursuant to the Funds managed distribution plan (the Plan). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on February 01, 2017, and payable on February 28, 2017. No action is required on your part.
Distribution Period: | February 2017 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable February 28, 2017, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.1380 | 100% | 0.5520 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0000 | 0% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 0.5520 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on January 31, 2017 | 13.63% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of January 31, 2017 | 6.54% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through January 31, 2017 | 1.20 % | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of January 31, 2017 |
2.18% |
You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s managed distribution plan.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the February 2017 distribution pursuant to the Fund’s managed distribution plan (the “Plan”). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
1 |
The Fund’s current fiscal year began on November 1, 2016, and will end on October 31, 2017. |
If you have questions or need additional information, please contact your financial professional or call the John Hancock Investments Closed-End Fund Information Line at 1-800-843-0090, Monday through Friday between 8:00 a.m. and 7:00 p.m., Eastern Time.
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on February 23, 2017, and payable on March 31, 2017. No action is required on your part.
Distribution Period: | March 2017 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable March 31, 2017, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.0699 | 51% | 0.6900 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0681 | 49% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 0.6900 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on February 28, 2017 | 13.79% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of February 28, 2017 | 6.34% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through February 28, 2017 | 4.98 % | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of February 28, 2017 | 2.64% |
You should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the March 2017 distribution pursuant to the Funds managed distribution plan (the Plan). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on April 03, 2017, and payable on April 28, 2017. No action is required on your part.
Distribution Period: | April 2017 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable April 28, 2017, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.0805 | 58% | 0.8280 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0025 | 2% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0010 | 1% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0540 | 39% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 0.8280 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on March 31, 2017 | 13.75% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of March 31, 2017 | 6.33% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through March 31, 2017 | 5.60% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of March 31, 2017 | 3.17% |
You should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the April 2017 distribution pursuant to the Fund’s managed distribution plan (the “Plan”). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
If you have questions or need additional information, please contact your financial professional or call the John
Hancock Investments Closed-End Fund Information Line at 1-800-843-0090, Monday through Friday between 8:00
a.m. and 7:00 p.m., Eastern Time.
____________________
1 The Funds current fiscal year began on November 1, 2016, and will end on October 31, 2017.
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on May 01, 2017, and payable on May 31, 2017. No action is required on your part.
Distribution Period: | May 2017 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable May 31, 2017, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.1380 | 100% | 0.9660 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0000 | 0% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 0.9660 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on April 30, 2017 | 13.57% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of April 30, 2017 | 6.33% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through April 30, 2017 | 6.17% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of April 30, 2017 | 3.69% |
You should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution plan.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the May 2017 distribution pursuant to the Funds managed distribution plan (the Plan). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on June 01, 2017, and payable on June 30, 2017. No action is required on your part.
Distribution Period: | June 2017 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable June 30, 2017, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.0625 | 45% | 1.1040 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0755 | 55% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 1.1040 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on May 31, 2017 | 14.25% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of May 31, 2017 | 6.24% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through May 31, 2017 | 8.23% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of May 31, 2017 | 4.16% |
You should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the June 2017 distribution pursuant to the Funds managed distribution plan (the Plan). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on July 03, 2017, and payable on July 31, 2017. No action is required on your part.
Distribution Period: | July 2017 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable July 31, 2017, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.0687 | 50% | 1.2420 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0035 | 3% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0487 | 35% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0171 | 12% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 1.2420 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on June 30, 2017 | 13.04% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of June 30, 2017 | 6.31% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through June 30, 2017 | 7.62% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of June 30, 2017 | 4.74% |
You should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the July 2017 distribution pursuant to the Funds managed distribution plan (the Plan). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on August 01, 2017, and payable on August 31, 2017. No action is required on your part.
Distribution Period: | August 2017 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable August 31, 2017, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.1380 | 100% | 1.3800 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0000 | 0% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 1.3800 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on July 31, 2017 | 12.81% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of July 31, 2017 | 6.22% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through July 31, 2017 | 9.76% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of July 31, 2017 | 5.19% |
You should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution plan.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the August 2017 distribution pursuant to the Funds managed distribution plan (the Plan). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on September 1, 2017, and payable on September 29, 2017. No action is required on your part.
Distribution Period: | September 2017 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable September 29, 2017, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.0543 | 39% | 1.5180 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0837 | 61% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 1.5180 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on August 31, 2017 | 13.16% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of August 31, 2017 | 6.24% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through August 31, 2017 | 10.09% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of August 31, 2017 | 5.72% |
You should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the September 2017 distribution pursuant to the Funds managed distribution plan (the Plan). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on October 2, 2017, and payable on October 31, 2017. No action is required on your part.
Distribution Period: | October 2017 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable October 31, 2017, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.0948 | 69% | 1.6560 | 100% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0432 | 31% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 1.6560 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on September 30, 2017 | 12.59% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of September 30, 2017 | 6.31% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through September 30, 2017 | 9.39% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of September 30, 2017 | 6.31% |
You should not draw any conclusions about the Funds investment performance from the amount of this distribution or from the terms of the Funds managed distribution plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Funds investment performance and should not be confused with yield or income.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Funds investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the October 2017 distribution pursuant to the Funds managed distribution plan (the Plan). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
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