Distribution policy: The Fund has implemented a managed distribution policy (the Policy) that provides for quarterly distributions at a rate set by the Board of Trustees. Under the current Policy, the Fund intends to make quarterly distributions at a rate of 2% of the Fund's net assets to shareholders of record. The Policy would result in a return of capital to shareholders, if the amount of the distribution exceeds the Fund's net investment income and realized capital gains. 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 Fund's investment performance and should not be confused with "yield" or "income."

The amounts and sources of distributions reported in the Fund's notices pursuant to Section 19(a) of the Investment Company Act of 1940 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 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 tells you how to report distributions for federal income tax purposes.

You should not draw any conclusions about the Fund's investment performance from the amount of distributions pursuant to the Policy or from the terms of the Policy. The Policy has been established by the Trustees and may be changed or terminated by them without shareholder approval. The Trustees regularly review the Policy and the frequency and rate of distributions considering the purpose and effect of the Policy, the financial market environment, and the Fund's income, capital gains and capital available to pay distributions. The suspension or termination of the Policy could have the effect of creating a trading discount or widening an existing trading discount. At this time there are no reasonably foreseeable circumstances that might cause the Trustees to terminate the Policy.

Consider these risks before investing: As with any investment company that invests in equity securities, the Fund is subject to market risk—the possibility that the prices of equity securities will decline over short or extended periods of time. As a result, the value of an investment in the Fund's shares will fluctuate with the market generally and market sectors in particular. You could lose money over short or long periods of time. Political and economic news can influence marketwide trends and can cause disruptions in the U.S. or world financial markets. Other factors may be ignored by the market as a whole but may cause movements in the price of one company's stock or the stock of companies in one or more industries. All of these factors may have a greater impact on initial public offerings and emerging company shares. Different types of equity securities tend to shift into and out of favor with investors, depending on market and economic conditions. The performance of funds that invest in equity securities of healthcare companies may at times be better or worse than the performance of funds that focus on other types of securities or that have a broader investment style.

The first quarter of 2021 has been quite a different story. Things have been a bit more complicated. The broad SPX and S15HLTH advanced 6% and 3%, respectively with only moderate volatility in the first quarter of calendar year 2021. By contrast, the NBI and XBI have been much more volatile. The NBI was up almost 14% by early February but retraced this entire gain ending the quarter down fractionally. The small- and mid-cap focused XBI was up almost 24% by early February and retreated even more dramatically, declining by 22% in less than two months to end the quarter down by a few percent.

The question of course is what happened to cause this situation and, more importantly, where are we going. From a personal point of view, we have all had a horrific year. More than thirty-two million Americans have contracted COVID-19 and well more than 500,000 individuals have died. Millions of children have had access to education reduced or eliminated. Millions of people have lost their jobs and we expect that hundreds of thousands of businesses have closed forever. Much of this loss cannot be recovered.

Having said this, we also need to evaluate where we are and where we expect to be as shareholders of the Fund. From a healthcare fund point of view, the view is a little more nuanced. From our perspective, COVID-19 arrived out of the blue. As described above, markets declined precipitously. Almost immediately, 200 companies started working on covid vaccines and therapeutics. Miraculously, biopharma partnered with the U.S. and other governments to approve multiple vaccines in a year (compared to a typical ten year development cycle).

In parallel, we witnessed a vitriolic election cycle that changed a good deal of how government governs. We saw civil unrest that rivaled what we observed in the 1960's. A work from home world was created largely out of whole cloth. Simplistically, the economy unwound and then apparently rewound.

A year later we find ourselves with still high unemployment, Covid case rates still dramatically higher than when we all went home, approaching 50% of the adult population vaccinated with herd immunity anticipated by some experts within the next few months, a push to get back to school

Largest Holdings By Issuer

(Excludes Short-Term Investments)

As of March 31, 2021
(Unaudited)

Issuer – Sector	% of Net Assets
Gilead Sciences, Inc. – Biotechnology		5.4	%
Illumina, Inc. – Life Sciences Tools & Services		4.7	%
Amgen, Inc. – Biotechnology		4.5	%
Vertex Pharmaceuticals, Inc. – Biotechnology		4.0	%
Moderna, Inc. – Biotechnology		3.5	%
Horizon Therapeutics plc – Pharmaceuticals		3.3	%
Biogen, Inc. – Biotechnology		3.2	%
Regeneron Pharmaceuticals, Inc. – Biotechnology		3.2	%
Abbott Laboratories – Health Care Equipment & Supplies		1.8	%
Seagen, Inc. – Biotechnology		1.6	%
Guardant Health, Inc. – Health Care Equipment & Supplies		1.3	%
Bristol-Myers Squibb Co. – Pharmaceuticals		1.3	%
Syneos Health, Inc. – Healthcare Services		1.2	%
Neurocrine Biosciences, Inc. – Biotechnology		1.2	%
Alnylam Pharmaceuticals, Inc. – Biotechnology		1.2	%
Allakos, Inc. – Biotechnology		1.1	%
Exelixis, Inc. – Biotechnology		1.1	%
Novavax, Inc. – Biotechnology		1.1	%
CRISPR Therapeutics AG – Biotechnology		1.1	%
Exact Sciences Corp. – Biotechnology		1.1	%

Portfolio Highlights as of March 31, 2021

Among other investments, Tekla Healthcare Investors' performance benefitted in the past six months by the following:

Sutro Biopharma, Inc. (STRO) is an oncology-focused company with a novel antibody conjugate platform. In Q4 of 2020, the stock rose after the Company announced promising data in ovarian cancer for its lead drug candidate. We were overweight the stock during this period.

Waters Corp. (WAT) is a leading global supplier of analytical instruments, consumables and services to life science, industrial and academic organizations conducting research. The Company's stock rose in the period with renewed growth in its liquid chromatography business due to a successful replacement initiative as well as strong early customer adoption of its new e-commerce platform. The Fund held an overweight position.

Morphic Holding, Inc. (MORF) is a small-cap biotechnology company with a novel approach to developing and delivering oral drugs for the treatment of immune/inflammatory conditions. The stock appreciated significantly after the Company released highly positive Phase 1 data. We held an overweight position during this period.

Among other examples, Tekla Healthcare Investors' performance was negatively impacted by the following investments:

Moderna, Inc. (MRNA) is a vaccine company based on a new therapeutic modality, messenger RNA. The Company has multiple development programs in the clinic but is most well-known for its commercially successful vaccine candidate targeting the COVID-19 virus. The Fund owned MRNA but was underweight during its recent runup.

Denali Therapeutics, Inc. (DNLI) is a biotechnology company that discovers and develops novel drugs for neurodegenerative diseases. Last year, the Company presented positive preliminary data which caused the stock to more than double while we were net underweight.

Bridgebio Pharma, Inc. (BBIO) operates as a biotechnology holding company within which subsidiaries have a pipeline of over 20 programs in genetic disease and cancer. Its stock rose due to continued investor enthusiasm for Eidos Therapeutics, a partially-owned subsidiary developing a treatment for cardio-myopathies related to heart failure. We were underweight BBIO during this period which saw the Company purchase all remaining outstanding shares of Eidos.

Fund Performance

HQH is a closed-end fund which invests predominantly in healthcare companies. Subject to regular consideration, the Trustees of HQH have instituted a policy of making quarterly distributions to shareholders. The Fund seeks to make such distributions in the form of long-term capital gains.

The Fund considers investments in companies of all sizes and in all healthcare subsectors, including but not limited to, biotechnology, pharmaceuticals, healthcare equipment, healthcare supplies, life science tools and services, healthcare distributors, managed healthcare, healthcare technology, and healthcare facilities. The Fund emphasizes innovation, investing both in public and pre-public venture companies. The Fund considers its venture investments to be a differentiating characteristic. Among the various healthcare subsectors, HQH has considered the biotechnology subsector, including both pre-public and public companies, to be a key contributor to the healthcare sector. The Fund holds biotech

Fund Performance for the Period Ending March 31, 2021

Period	HQH NAV		HQH MKT		NBI		S15HLTH		SPX
6 month		8.55		23.61		11.34		12.58		19.06
1 year		32.70		49.35		40.12		35.94		56.33
5 year		9.74		9.54		12.21		14.12		16.28
10 year		14.14		15.10		16.84		15.82		13.90

All performance over one-year has been annualized.

Performance data quoted represents past performance, which is no guarantee of future results, and current performance may be lower or higher than the figures shown. The NAV total return takes into account the Fund's total annual expenses and does not reflect transaction charges. If transaction charges were reflected, NAV total return would be reduced. All distributions are assumed to be reinvested either in accordance with the dividend reinvestment plan (DRIP) for market price returns or NAV for NAV returns. Until the DRIP price is available from the Plan Agent, the market price returns reflect the reinvestment at the closing market price on the last business day of the month. Once the DRIP is available around mid-month, the market price returns are updated to reflect reinvestment at the DRIP price.

SHARES		CONVERTIBLE PREFERRED (Restricted) ^{(a) (b)} - 4.7% of Net Assets	VALUE
		Biotechnology - 3.9%
	326,667	Amphivena Therapeutics, Inc. Series B, 6.00%	$	4,900,001
	525,972	Amphivena Therapeutics, Inc. Series C, 6.00%		1,887,315
	1,979,443	Arkuda Therapeutics, Inc. Series A, 6.00% ^(c)		4,709,095
	168,084	Caribou Biosciences, Inc. Series C, 8.00%		2,900,625
	235,627	Dynacure Series C ^(d)		5,863,506
	1,437,500	Hotspot Therapeutics, Inc. Series B, 6.00%		3,450,000
	7,187,500	Invetx, Inc. Series A ^(c)		3,450,000
	277,444	Oculis SA, Series B2, 6.00% ^(d)		2,444,055
	93,333	Priothera Ltd. Series A, 6.00% ^(c)		1,094,516
	2,479,037	Pyxis Oncology, Inc. Series B		4,079,999
	2,692,309	Rainier Therapeutics, Inc. Series A, 6.00%		269
	1,559,715	Rainier Therapeutics, Inc. Series B, 6.00%		290,107
	4,963,028	Rallybio Holdings, LLC Series B		6,900,098
	694,564	Vectivbio Holding AG Series A1, 6.00%		679,284
	767,932	Vectivbio Holding AG Series A2, 6.00%		883,890
				43,532,760
		Health Care Equipment & Supplies - 0.1%
	362,887	IO Light Holdings, Inc. Series A2		1,397,369
		Pharmaceuticals - 0.7%
	6,346,328	Curasen Therapeutics, Inc. Series A		7,000,000
		TOTAL CONVERTIBLE PREFERRED (Cost $54,222,009)		51,930,129
		COMMON STOCKS AND WARRANTS - 93.8% of Net Assets
		Biotechnology - 56.9%
	66,802	AbbVie, Inc.		7,229,312
	220,013	ACADIA Pharmaceuticals, Inc. ^(a)		5,676,335
	183,707	Affimed N.V. ^{(a) (d)}		1,453,122
	109,838	Alkermes plc ^(a)		2,051,774
	110,218	Allakos, Inc. ^(a)		12,650,822
	92,766	Alnylam Pharmaceuticals, Inc. ^(a)		13,097,630
	200,046	Amgen, Inc.		49,773,445
	404,393	Amicus Therapeutics, Inc. ^(a)		3,995,403
	70,417	Apellis Pharmaceuticals, Inc. ^(a)		3,021,593
	86,869	Arcutis Biotherapeutics, Inc. ^(a)		2,513,120
	128,912	Arena Pharmaceuticals, Inc. ^(a)		8,945,204
	36,883	Argenx SE ^{(a) (e)}		10,157,209
	80,720	Arrowhead Pharmaceuticals, Inc. ^(a)		5,352,543

SHARES		Biotechnology - continued	VALUE
	76,877	Ascendis Pharma A/S ^{(a) (e)}	$	9,907,908
	117,638	Atreca, Inc. ^(a)		1,803,391
	28,280	BeiGene Ltd. ^{(a) (e)}		9,843,702
	129,093	Biogen, Inc. ^(a)		36,113,767
	71,154	BioMarin Pharmaceutical, Inc. ^(a)		5,372,839
	47,142	BioNTech SE ^{(a) (e)}		5,147,435
	90,404	Black Diamond Therapeutics, Inc. ^(a)		2,193,201
	77,169	Blueprint Medicines Corp. ^(a)		7,503,142
	51,377	Bridgebio Pharma, Inc. ^(a)		3,164,823
	90,668	ChemoCentryx, Inc. ^(a)		4,645,828
	368,960	Cogent Biosciences, Inc. ^(a)		3,239,469
	259,171	Corbus Pharmaceuticals Holdings, Inc. ^(a)		510,567
	99,422	CRISPR Therapeutics AG ^{(a) (d)}		12,114,571
	55,466	CymaBay Therapeutics, Inc. ^(a)		251,816
	223,631	Deciphera Pharmaceuticals, Inc. ^(a)		10,027,614
	93,689	Denali Therapeutics, Inc. ^(a)		5,349,642
	46,619	Dicerna Pharmaceuticals, Inc. ^(a)		1,192,048
	90,695	Exact Sciences Corp. ^(a)		11,951,787
	556,413	Exelixis, Inc. ^(a)		12,569,370
	83,553	Fate Therapeutics, Inc. ^(a)		6,888,945
	96,639	Forma Therapeutics Holdings, Inc. ^(a)		2,707,825
	268,764	G1 Therapeutics, Inc. ^(a)		6,466,462
	343,809	Galera Therapeutics, Inc. ^(a)		3,032,395
	43,052	Genmab A/S ^{(a) (e)}		1,413,397
	939,446	Gilead Sciences, Inc.		60,716,395
	53,885	I-Mab ^{(a) (e)}		2,611,806
	39,444	Incyte Corp. ^(a)		3,205,614
	61,149	Insmed, Inc. ^(a)		2,082,735
	33,357	Intellia Therapeutics, Inc. ^(a)		2,677,066
	33,437	Intercept Pharmaceuticals, Inc. ^(a)		771,726
	118,058	Ionis Pharmaceuticals, Inc. ^(a)		5,307,888
	253,418	Iovance Biotherapeutics, Inc. ^(a)		8,023,214
	261,913	Jounce Therapeutics, Inc. ^(a)		2,689,846
	34,203	KalVista Pharmaceuticals, Inc. ^(a)		878,675
	56,773	Karuna Therapeutics, Inc. ^(a)		6,825,818
	178,314	Kura Oncology, Inc. ^(a)		5,040,937
	682,705	Mereo Biopharma Group plc ^{(a) (e) (f)}		2,300,716
	300,020	Moderna, Inc. ^(a)		39,287,619
	103,609	Molecular Templates, Inc. ^(a)		1,307,546
	61,346	Morphic Holding, Inc. ^(a)		3,881,975
	108,120	Nektar Therapeutics ^(a)		2,162,400
	141,563	Neurocrine Biosciences, Inc. ^(a)		13,767,002
	103,950	NexGel, Inc. ^{(a) (b)}		322

SHARES		Biotechnology - continued	VALUE
	68,178	Novavax, Inc. ^(a)	$	12,361,353
	260,913	Ovid Therapeutics, Inc. ^(a)		1,048,870
	598,925	Pieris Pharmaceuticals, Inc. ^(a)		1,539,237
	54,790	Pieris Pharmaceuticals, Inc., Series A Warrants (expiration 06/08/21, exercise price $3.00) ^{(a) (b)}		6,575
	27,394	Pieris Pharmaceuticals, Inc., Series B Warrants (expiration 06/08/21, exercise price $2.00) ^{(a) (b)}		13,149
	51,406	Praxis Precision Medicines, Inc. ^(a)		1,684,061
	43,169	Precision BioSciences, Inc. ^(a)		446,799
	74,459	Regeneron Pharmaceuticals, Inc. ^(a)		35,229,531
	142,560	Replimune Group, Inc. ^(a)		4,349,506
	74,697	Sage Therapeutics, Inc. ^(a)		5,591,070
	61,653	Sarepta Therapeutics, Inc. ^(a)		4,594,998
	30,676	Scholar Rock Holding Corp. ^(a)		1,554,046
	129,729	Seagen, Inc. ^(a)		18,014,169
	401,332	Sutro Biopharma, Inc. ^(a)		9,134,316
	159,412	TCR2 Therapeutics, Inc. ^(a)		3,519,817
	142,714	Travere Therapeutics, Inc. ^(a)		3,563,569
	371,507	Trillium Therapeutics, Inc. ^{(a) (d)}		3,989,985
	67,710	Ultragenyx Pharmaceutical, Inc. ^(a)		7,709,461
	82,238	uniQure N.V. ^{(a) (d)}		2,770,598
	43,002	United Therapeutics Corp. ^(a)		7,192,945
	875,000	Vectivbio Holding AG (Restricted) ^{(a) (b)}		691,250
	208,084	Vertex Pharmaceuticals, Inc. ^(a)		44,715,171
	55,800	Vir Biotechnology, Inc. ^(a)		2,860,866
	111,866	Xenon Pharmaceuticals, Inc. ^{(a) (d)}		2,002,401
	135,765	Y-mAbs Therapeutics, Inc. ^(a)		4,105,534
	26,021	Zai Lab Ltd. ^{(a) (e)}		3,471,982
				635,030,015
		Health Care Equipment & Supplies - 8.5%
	166,121	Abbott Laboratories		19,907,941
	160,000	Cercacor Laboratories, Inc. (Restricted) ^{(a) (b)}		1,759,618
	65,628	DENTSPLY Sirona, Inc.		4,187,723
	23,210	DexCom, Inc. ^(a)		8,341,442
	24,669	Edwards Lifesciences Corp. ^(a)		2,063,315
	97,327	Guardant Health, Inc. ^(a)		14,856,966
	10,945	Hologic, Inc. ^(a)		814,089
	6,736	IDEXX Laboratories, Inc. ^(a)		3,295,992
	95,213	Medtronic plc		11,247,512
	44,687	STERIS plc		8,511,980
	34,067	Stryker Corp.		8,298,040
	69,687	Zimmer Biomet Holdings, Inc.		11,155,495
				94,440,113

SHARES		Health Care Providers & Services - 4.3%	VALUE
	17,832	Addus HomeCare Corp. ^(a)	$	1,865,049
	4,406	Amedisys, Inc. ^(a)		1,166,665
	25,889	Anthem, Inc.		9,292,857
	13,551	Charles River Laboratories International, Inc. ^(a)		3,927,486
	35,700	Cigna Corp.		8,630,118
	34,995	HCA Healthcare, Inc.		6,590,958
	6,740	Humana, Inc.		2,825,745
	222,222	InnovaCare, Inc. Escrow Shares (Restricted) ^{(a) (b)}		105,622
	13,049	Medpace Holdings, Inc. ^(a)		2,140,688
	3,167	Molina Healthcare, Inc. ^(a)		740,318
	107,595	Owens & Minor, Inc.		4,044,496
	16,807	UnitedHealth Group, Inc.		6,253,381
				47,583,383
		Health Care Technology ^(a) - 0.2%
	11,519	Teladoc Health, Inc.		2,093,578
		Healthcare Services ^(a) - 2.0%
	32,449	Laboratory Corporation of America Holdings		8,275,469
	181,577	Syneos Health, Inc.		13,772,615
				22,048,084
		Life Sciences Tools & Services - 8.2%
	216,209	Adaptive Biotechnologies Corp. ^(a)		8,704,575
	137,115	Illumina, Inc. ^(a)		52,660,387
	10,514	PerkinElmer, Inc.		1,348,841
	120,915	Personalis, Inc. ^(a)		2,975,718
	51,382	PRA Health Sciences, Inc. ^(a)		7,878,402
	16,927	Thermo Fisher Scientific, Inc.		7,725,144
	37,005	Waters Corp. ^(a)		10,515,711
				91,808,778
		Medical Devices and Diagnostics - 1.2%
	24,181	Danaher Corp.		5,442,659
	1,134	Intuitive Surgical, Inc. ^(a)		837,958
	34,946	ResMed, Inc.		6,780,223
				13,060,840
		Pharmaceuticals - 12.4%
	51,378	Arvinas, Inc. ^(a)		3,396,086
	270,811	Aurinia Pharmaceuticals, Inc. ^{(a) (d) (f)}		3,516,481
	232,968	Bristol-Myers Squibb Co.		14,707,270
	54,282	Eli Lilly & Co.		10,140,963
	465,507	Endo International plc ^{(a) (d)}		3,449,407
	90,598	Heron Therapeutics, Inc. ^(a)		1,468,594
	395,839	Horizon Therapeutics plc ^(a)		36,433,021

SHARES		Pharmaceuticals - continued	VALUE
	154,896	Intra-Cellular Therapies, Inc. ^(a)	$	5,255,621
	18,800	IQVIA Holdings, Inc. ^(a)		3,631,032
	42,253	Jazz Pharmaceuticals plc ^{(a) (d)}		6,945,126
	36,231	Johnson & Johnson		5,954,565
	9,280	Madrigal Pharmaceuticals, Inc. ^(a)		1,085,482
	32,830	McKesson Corp.		6,403,163
	37,175	Merck & Co., Inc.		2,865,821
	55,093	Mirati Therapeutics, Inc. ^(a)		9,437,431
	7,050	Perrigo Co. plc		285,313
	25,779	Reata Pharmaceuticals, Inc. ^(a)		2,570,166
	79,790	Spectrum Pharmaceuticals, Inc. ^(a)		260,115
	28,747	Tetraphase Pharmaceuticals, Inc. CVR ^{(a) (g)}		5,749
	291,666	Teva Pharmaceutical Industries Ltd. ^{(a) (e)}		3,365,826
	314,655	Theravance Biopharma, Inc. ^{(a) (d)}		6,422,108
	78,303	Turning Point Therapeutics, Inc. ^(a)		7,406,681
	94,775	VYNE Therapeutics, Inc. ^(a)		648,735
	12,377	Zoetis, Inc.		1,949,130
	51,696	Zogenix, Inc. ^(a)		1,009,106
				138,612,992
		Special Purpose Acquisition Company ^(a) - 0.1%
	171,597	Helix Acquisition Corp.		1,756,295
		TOTAL COMMON STOCKS AND WARRANTS (Cost $796,650,788)		1,046,434,078
PRINCIPAL AMOUNT		SHORT-TERM INVESTMENTS - 0.8% of Net Assets
$	6,912,000	Repurchase Agreement, Fixed Income Clearing Corp., repurchase value $6,912,000, 0.00%, dated 03/31/21, due 04/01/21 (collateralized by U.S. Treasury Bond 4.75%, due 02/15/37, market value $7,050,314)		6,912,000
SHARES
	2,465,000	State Street Institutional U.S. Government Money Market Fund, Institutional Class, 0.04% ^{(h) (i)}		2,465,000
		TOTAL SHORT-TERM INVESTMENTS (Cost $9,377,000)		9,377,000
		TOTAL INVESTMENTS BEFORE MILESTONE INTERESTS - 99.3% (Cost $860,249,797)		1,107,741,207

INTERESTS		MILESTONE INTERESTS (Restricted) ^{(a) (b)} - 1.0% of Net Assets	VALUE
		Biotechnology - 0.1%
	1	Therachon Milestone Interest	$	1,361,243
		Health Care Equipment & Supplies - 0.0%
	1	Therox Milestone Interest		2,590
		Pharmaceuticals - 0.9%
	1	Afferent Milestone Interest		681,147
	1	Ethismos Research Milestone Interest		0
	1	Impact Biomedicines Milestone Interest		3,296,764
	1	Neurovance Milestone Interest		6,163,990
				10,141,901
		TOTAL MILESTONE INTERESTS (Cost $7,665,957)		11,505,734
		TOTAL INVESTMENTS - 100.3% (Cost $867,915,754)		1,119,246,941
		OTHER LIABILITIES IN EXCESS OF ASSETS - (0.3)%		(3,176,916	)
		NET ASSETS - 100%	$	1,116,070,025

(a) Non-income producing security.

(b) Security fair valued using significant unobservable inputs. See Investment Valuation and Fair Value Measurements.

(d) Foreign security.

(e) American Depository Receipt

(f) All or a portion of this security is on loan as of March 31, 2021. See Note 1.

(g) Contingent Value Right

(h) This security represents the investment of cash collateral received for securities lending.

(i) Registered investment company advised by State Street Global Advisors. The rate shown is the annualized seven-day yield as of March 31, 2021.

ASSETS:
Investments in unaffiliated issuers, at value (cost $850,992,499), including $2,439,350 of securities loaned	$	1,098,487,596
Investments in affiliated issuers, at value (cost $9,257,298)		9,253,611
Milestone interests, at value (cost $7,665,957)		11,505,734
Total investments		1,119,246,941
Cash		807
Foreign currency, at value (cost $58)		58
Dividends and interest receivable		273,696
Receivable for investments sold		12,239
Prepaid expenses		70,183
Other assets (see Note 1)		194,849
Total assets		1,119,798,773
LIABILITIES:
Payable for investments purchased		91,246
Payable upon return of securities loaned		2,465,000
Accrued advisory fee		930,934
Accrued investor support service fees		47,806
Accrued shareholder reporting fees		76,781
Accrued other		116,981
Total liabilities		3,728,748
Commitments and Contingencies (see Notes 1 and 4)
NET ASSETS	$	1,116,070,025
SOURCES OF NET ASSETS:
Shares of beneficial interest, par value $.01 per share, unlimited number of shares authorized, amount paid in on 44,654,026 shares issued and outstanding	$	446,540
Additional paid-in-capital		833,383,136
Total distributable earnings (loss)		282,240,349
Total net assets (equivalent to $24.99 per share based on 44,654,026 shares outstanding)	$	1,116,070,025

INVESTMENT INCOME:
Dividend income, net	$	3,257,292
Securities lending		7,419
Total investment income		3,264,711
EXPENSES:
Advisory fees		5,234,487
Investor support service fees		278,434
Administration fees		117,314
Custodian fees		92,413
Shareholder reporting		81,692
Legal fees		71,454
Trustees' fees and expenses		71,196
Auditing fees		55,317
Transfer agent fees		28,002
Other (see Note 2)		129,350
Total expenses		6,159,659
Net investment loss		(2,894,948	)
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments in unaffiliated issuers		66,963,363
Closed or expired option contracts written		148,326
Foreign currency transactions		(17,795	)
Net realized gain		67,093,894
Change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		26,951,879
Investments in affiliated issuers		(3,687	)
Milestone interests		(2,456,245	)
Option contracts written		(122,010	)
Change in unrealized appreciation (depreciation)		24,369,937
Net realized and unrealized gain (loss)		91,463,831
Net increase in net assets resulting from operations	$	88,568,883

	Six months ended March 31, 2021 (Unaudited)			Year ended September 30, 2020
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment loss	($	2,894,948	)	($	1,971,715	)
Net realized gain		67,093,894			83,063,244
Change in net unrealized appreciation		24,369,937			160,112,975
Net increase in net assets resulting from operations		88,568,883			241,204,504
DISTRIBUTIONS TO SHAREHOLDERS (See Note 1):		(45,845,842	)		(76,399,193	)
CAPITAL SHARE TRANSACTIONS:
Reinvestment of distributions (782,371 and 1,713,261 shares, respectively)		18,651,388			32,433,297
Fund shares repurchased (0 and 667,832 shares, respectively) (see Note 1)		—			(13,390,092	)
Total capital share transactions		18,651,388			19,043,205
Net increase in net assets		61,374,429			183,848,516
NET ASSETS:
Beginning of period		1,054,695,596			870,847,080
End of period	$	1,116,070,025		$	1,054,695,596

	Six months ended March 31, 2021			Years ended September 30,
	(Unaudited)			2020			2019			2018			2017			2016
OPERATING PERFORMANCE FOR A SHARE OUTSTANDING THROUGHOUT EACH PERIOD
Net asset value per share, beginning of period	$	24.04		$	20.33		$	25.62		$	26.02		$	24.99		$	29.61
Net investment loss ⁽¹⁾		(0.07	)		(0.05	)		(0.07	)		(0.10	)		(0.13	)		(0.17	)
Net realized and unrealized gain (loss)		2.06			5.50			(3.46	)		1.63			3.12			(1.35	)
Total increase (decrease) from investment operations		1.99			5.45			(3.53	)		1.53			2.99			(1.52	)
Distributions to shareholders from:
Net investment income		—			(0.01	)		(0.17	)		(0.15	)⁽²⁾		—			—
Net realized capital gains		(1.04	)		(1.77	)		(1.65	)		(1.79	)⁽²⁾		(1.96	)		(3.10	)
Total distributions		(1.04	)		(1.78	)		(1.82	)		(1.94	)		(1.96	)		(3.10	)
Increase resulting from shares repurchased ⁽¹⁾		—			0.04			0.06			0.01			—	⁽³⁾		—
Net asset value per share, end of period	$	24.99		$	24.04		$	20.33		$	25.62		$	26.02		$	24.99
Per share market value, end of period	$	24.41		$	20.62		$	18.34		$	23.15		$	25.23		$	23.81
Total investment return at market value		23.61	%*		23.38	%		(12.88	%)		0.05	%		14.95	%		(3.19	%)
Total investment return at net asset value		8.55	%*		29.77	%		(12.74	%)		7.37	%		12.95	%		(5.29	%)
RATIOS
Net investment loss to average net assets		(0.52	%)**		(0.20	%)		(0.31	%)		(0.41	%)		(0.53	%)		(0.62	%)
Expenses to average net assets		1.10	%**		1.10	%		1.12	%		1.08	%		1.10	%		1.10	%
SUPPLEMENTAL DATA
Net assets at end of period (in millions)	$	1,116		$	1,055		$	871		$	1,082		$	1,058		$	975
Portfolio turnover rate		45.60	%*		52.44	%		47.65	%		45.75	%		29.21	%		29.44	%

* Not annualized.

** Annualized.

(1) Computed using average shares outstanding.

(2) Amount previously presented incorrectly as solely distributions from net realized capital gains has been revised to reflect the proper classification.

(3) Amount represents less than $0.005 per share.

(1) Organization and Significant Accounting Policies

Tekla Healthcare Investors (the Fund) is a Massachusetts business trust formed on October 31, 1986 and registered under the Investment Company Act of 1940 as a non-diversified closed-end management investment company. The Fund commenced operations on April 22, 1987. The Fund's investment objective is long-term capital appreciation through investment in U.S. and foreign companies in the healthcare industry. The Fund invests primarily in securities of public and private companies that are believed by the Fund's Investment Adviser, Tekla Capital Management LLC (the Adviser), to have significant potential for above-average growth. The Fund may invest up to 20% of its net assets in securities of foreign issuers, expected to be located primarily in Western Europe, Canada and Japan, and securities of U.S. issuers that are traded primarily in foreign markets.

The preparation of these financial statements requires the use of certain estimates by management in determining the Fund's assets, liabilities, revenues and expenses. Actual results could differ from these estimates and such differences could be material. The following is a summary of significant accounting policies followed by the Fund, which are in conformity with accounting principles generally accepted in the United States of America (GAAP). The Fund is an investment company and follows accounting and reporting guidance in the Financial Accounting Standards Board Accounting Standards Codification 946. Events or transactions occurring after March 31, 2021, through the date that the financial statements were issued, have been evaluated in the preparation of these financial statements.

The impact of the COVID-19 outbreak on the financial performance of the Fund's investments will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of COVID-19 on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Fund's future investment results may be materially adversely affected.

Investment Valuation

Shares of publicly traded companies listed on national securities exchanges or trading in the over-the-counter market are typically valued at the last sale price, as of the close of trading, generally 4 p.m., Eastern Time. The Board of Trustees of the Fund (the Trustees) has established and approved fair valuation policies

and procedures with respect to securities for which quoted prices may not be available or which do not reflect fair value. Convertible, corporate and government bonds are valued using a third-party pricing service. Convertible bonds are valued using this pricing service only on days when there is no sale reported. Restricted securities of companies that are publicly traded are typically valued based on the closing market quote on the valuation date adjusted for the impact of the restriction as determined in good faith by the Adviser also using fair valuation policies and procedures approved by the Trustees described below. Non-exchange traded warrants of publicly traded companies are generally valued using the Black-Scholes model, which incorporates both observable and unobservable inputs. Short-term investments with a maturity of 60 days or less are generally valued at amortized cost, which approximates fair value.

Convertible preferred shares, warrants or convertible note interests in private companies, milestone interests and other restricted securities, as well as shares of publicly traded companies for which market quotations are not readily available, such as stocks for which trading has been halted or for which there are no current day sales, or which do not reflect fair value, are typically valued in good faith, based upon the recommendations made by the Adviser pursuant to fair valuation policies and procedures approved by the Trustees.

The Adviser has a Valuation Sub-Committee comprised of senior management which reports to the Valuation Committee of the Board at least quarterly. Each fair value determination is based on a consideration of relevant factors, including both observable and unobservable inputs. Observable and unobservable inputs the Adviser considers may include (i) the existence of any contractual restrictions on the disposition of securities; (ii) information obtained from the company, which may include an analysis of the company's financial statements, products, intended markets or technologies; (iii) the price of the same or similar security negotiated at arm's length in an issuer's completed subsequent round of financing; (iv) the price and extent of public trading in similar securities of the issuer or of comparable companies; or (v) a probability and time value adjusted analysis of contractual terms. Where available and appropriate, multiple valuation methodologies are applied to confirm fair value. Significant unobservable inputs identified by the Adviser are often used in the fair value determination. A significant change in any of these inputs may result in a significant change in the fair value measurement. Due to the uncertainty inherent in the valuation process, such estimates of fair value may differ significantly from the values that would have been used had a ready market for the investments

existed, and differences could be material. Additionally, changes in the market environment and other events that may occur over the life of the investments may cause the gains or losses ultimately realized on these investments to be different from the valuations used at the date of these financial statements.

Milestone Interests

The Fund holds financial instruments which reflect the current value of future milestone payments the Fund may receive as a result of contractual obligations from other parties. The value of such payments are adjusted to reflect the estimated risk based on the relative uncertainty of both the timing and the achievement of individual milestones. A risk to the Fund is that the milestones will not be achieved and no payment will be received by the Fund. The milestone interests were received as part of the proceeds from the sale of six private companies. Any payments received are treated as a reduction of the cost basis of the milestone interests with payments received in excess of the cost basis treated as a realized gain. The contractual obligations with respect to the milestone interests provide for payments at various stages of the development of Afferent, Ethismos Research, Neurovance, Impact Biomedicines, Therachon and Therox's principal product candidate as of the date of the sale.

The following is a summary of the impact of the milestone interests on the financial statements as of and for the six months ended March 31, 2021:

Statement of Assets and Liabilities, Milestone interests, at value	$	11,505,734
Statement of Assets and Liabilities, total distributable earnings	$	3,839,777
Statement of Operations, Change in unrealized appreciation (depreciation) on Milestone interests	($	2,456,245	)

Options on Securities

An option contract is a contract in which the writer (seller) of the option grants the buyer of the option, upon payment of a premium, the right to purchase from (call option) or sell to (put option) the writer a designated instrument at a specified price within a specified period of time. Certain options, including options on indices, will require cash settlement by the Fund if the option is exercised. The Fund enters into option contracts in order to hedge against potential adverse price movements in the value of portfolio assets, as a temporary substitute for selling selected investments, to lock in the purchase price of a security or currency which it expects to purchase in the near future, as a temporary substitute for purchasing selected investments, or to enhance potential gain or to gain or hedge exposure to financial market risk.

The Fund's obligation under an exchange traded written option or investment in an exchange traded purchased option is valued at the last sale price or in the absence of a sale, the mean between the closing bid and asked prices. Gain or loss is recognized when the option contract expires, is exercised or is closed.

If the Fund writes a covered call option, the Fund foregoes, in exchange for the premium, the opportunity to profit during the option period from an increase in the market value of the underlying security above the exercise price. If the Fund writes a put option it accepts the risk of a decline in the market value of the underlying security below the exercise price. Over-the-counter options have the risk of the potential inability of counterparties to meet the terms of their contracts. The Fund's maximum exposure to purchased options is limited to the premium initially paid. In addition, certain risks may arise upon entering into option contracts including the risk that an illiquid secondary market will limit the Fund's ability to close out an option contract prior to the expiration date and that a change in the value of the option contract may not correlate exactly with changes in the value of the securities or currencies hedged.

All options on securities and securities indices written by the Fund are required to be covered. When the Fund writes a call option, this means that during the life of the option the Fund may own or have the contractual right to acquire the securities subject to the option or may maintain with the Fund's custodian in a segregated account appropriate liquid securities in an amount at least equal to the market value of the securities underlying the option. When the Fund writes a put option, this means that the Fund will maintain with the Fund's custodian in a segregated account appropriate liquid securities in an amount at least equal to the exercise price of the option.

The average number of outstanding call options written for the six months ended March 31, 2021 was 158.

Derivatives not accounted
for as hedging instruments
under ASC 815

Statement of Assets and
Liabilities Location

Statement of Operations Location

Equity Contracts

Assets: Investments,
at value

$—

Net realized gain (loss) on
investments

($378,488)

Change in unrealized
appreciation (depreciation)
on investments

$36,488

Derivatives not accounted for as hedging instruments under ASC 815	Statement of Assets and Liabilities Location		Statement of Operations Location
	Liabilities: Options written, at value	$—	Net realized gain (loss) on closed or expired option contracts written	$	148,326
			Change in unrealized appreciation (depreciation) on option contracts written		($122,010)

Other Assets

Other assets in the Statement of Assets and Liabilities consists of amounts due to the Fund at various times in the future in connection with the sale of investments in three private companies.

Investment Transactions and Income

Investment transactions are recorded on a trade date basis. Gains and losses from sales of investments are recorded using the "identified cost" method. Interest income is recorded on the accrual basis, adjusted for amortization of premiums and accretion of discounts. Dividend income is recorded on the ex-dividend date, less any foreign taxes withheld. Upon notification from issuers, some of the dividend income received may be redesignated as a reduction of cost of the related investment if it represents a return of capital.

The aggregate cost of purchases and proceeds from sales of investment securities (other than short-term investments) for the six months ended March 31, 2021 totaled $500,754,610 and $530,383,951, respectively.

Securities lending

The Fund may lend its securities to approved borrowers to earn additional income. The Fund receives cash collateral from the borrower in an amount not less than the market value of the loaned securities. The Fund will invest its cash collateral in State Street Institutional U.S. Government Money Market Fund (SAHXX), which is registered with the Securities and Exchange Commission (SEC) as an investment company. SAHXX invests substantially all of its assets in the State Street U.S. Government Money Market Portfolio. The Fund will receive the benefit of any gains and bear any losses generated by SAHXX with respect to the cash collateral.

The Fund has the right to recall loaned securities on demand. If a borrower fails to return loaned securities when due, then the lending agent is responsible and indemnifies the Fund for the lent securities. The lending agent uses the

collateral received from the borrower to purchase replacement securities of the same issue, type, class and series of the loaned securities. If the value of the collateral is less than the purchase cost of replacement securities, the lending agent is responsible for satisfying the shortfall but only to the extent that the shortfall is not due to any decrease in the value of SAHXX.

Although the risk of loss on securities lent is mitigated by receiving collateral from the borrower and through lending agent indemnification, the Fund could experience a delay in recovering securities or could experience a lower than expected return if the borrower fails to return the securities on a timely basis. The Fund receives compensation for lending its securities by retaining a portion of the return on the investment of the collateral and compensation from fees earned from borrowers of the securities. Securities lending income received by the Fund is net of fees retained by the securities lending agent. Net income received from SAHXX is a component of securities lending income as recorded on the Statement of operations.

Obligations to repay collateral received by the Fund are shown on the Statement of assets and liabilities as Payable upon return of securities loaned and are secured by the loaned securities. As of March 31, 2021, the Fund loaned securities valued at $2,439,350 and received $2,465,000 of cash collateral.

Repurchase Agreements

In managing short-term investments the Fund may from time to time enter into transactions in repurchase agreements. In a repurchase agreement, the Fund's custodian takes possession of the underlying collateral securities from the counterparty, the market value of which is at least equal to the principal, including accrued interest, of the repurchase transaction at all times. In the event of default or bankruptcy by the other party to the agreement, realization and/or retention of the collateral by the Fund may be delayed. The Fund may enter into repurchase transactions with any broker, dealer, registered clearing agency or bank. Repurchase agreement transactions are not counted for purposes of the limitations imposed on the Fund's investment in debt securities.

Distribution Policy

Pursuant to a Securities and Exchange Commission exemptive order, the Fund may make periodic distributions that include capital gains as frequently as 12 times in any one taxable year in respect of its common shares, and the Fund has implemented a managed distribution policy (the Policy) providing for quarterly distributions at a rate set by the Trustees. Under the current Policy,

the Fund intends to make quarterly distributions at a rate of 2% of the Fund's net assets to shareholders of record. The Fund intends to use net realized capital gains when making quarterly distributions, if available, but the Policy would result in a return of capital to shareholders if the amount of the distribution exceeds the Fund's net investment income and realized capital gains. If taxable income and net long-term realized gains exceed the amount required to be distributed under the Policy, the Fund will at a minimum make distributions necessary to comply with the requirements of the Internal Revenue Code. The Policy has been established by the Trustees and may be changed by them without shareholder approval. The Trustees regularly review the Policy and the frequency and rate of distribution considering the purpose and effect of the Policy, the financial market environment, and the Fund's income, capital gains and capital available to pay distributions.

The Fund's policy is to declare quarterly distributions in stock. The distributions are automatically paid in newly-issued full shares of the Fund unless otherwise instructed by the shareholder. Fractional shares will generally be settled in cash, except for registered shareholders with book entry accounts of the Fund's transfer agent who will have whole and fractional shares added to their accounts. The Fund's transfer agent delivers an election card and instructions to each registered shareholder in connection with each distribution. The number of shares issued will be determined by dividing the dollar amount of the distribution by the lower of net asset value or market price on the pricing date. If a shareholder elects to receive a distribution in cash, rather than in shares, the shareholder's relative ownership in the Fund will be reduced. The shares reinvested will be valued at the lower of the net asset value or market price on the pricing date. Distributions in stock will not relieve shareholders of any federal, state or local income taxes that may be payable on such distributions. Additional distributions, if any, made to satisfy requirements of the Internal Revenue Code may be paid in stock, as described above, or in cash.

Share Repurchase Program

In March 2021, the Trustees approved the renewal of the repurchase program to allow the Fund to repurchase up to 12% of its outstanding shares in the open market for a one-year period ending July 14, 2022. Prior to this renewal, in March 2020, the Trustees approved the renewal of the share repurchase program to allow the Fund to repurchase up to 12% of its outstanding shares for a one-year period ending July 14, 2021. The share repurchase program is

intended to enhance shareholder value and potentially reduce the discount between the market price of the Fund's shares and the Fund's net asset value.

During the six months ended March 31, 2021, the Fund did not repurchase any shares through the repurchase program.

During the year ended September 30, 2020, the Fund repurchased 667,832 shares at a total cost of 13,390,092. The weighted average discount per share between the cost of repurchase and the net asset value applicable to such shares at the date of repurchase was 11.49%.

Federal Taxes

It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute to its shareholders substantially all of its taxable income and its net realized capital gains, if any. Therefore, no Federal income or excise tax provision is required.

As of March 31, 2021, the Fund had no uncertain tax positions that would require financial statement recognition or disclosure. The Fund's federal tax returns are subject to examination by the Internal Revenue Service for a period of three years.

Distributions

The Fund records all distributions to shareholders on the ex-dividend date. Such distributions are determined in conformity with income tax regulations, which may differ from GAAP. These differences include temporary and permanent differences from losses on wash sale transactions, passive foreign investment companies transactions, installment sale adjustments, premium amortization accruals, foreign currency gains and losses, and book to tax difference due to merger. Reclassifications are made to the Fund's capital accounts to reflect income and gains available for distribution under income tax regulations.

Commitments and Contingencies

Under the Fund's organizational documents, its officers and Trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into agreements with service providers that may contain indemnification clauses. The Fund's maximum exposure under these agreements is unknown as this would involve future claims that may be made against

the Fund that have not yet occurred. However, based on experience, the Fund expects the risk of loss to be remote.

Investor Support Services

The Fund has retained Destra Capital Advisors LLC (Destra) to provide investor support services in connection with the ongoing operation of the Fund. The Fund pays Destra a fee in an annual amount equal to 0.05% of the average aggregate daily value of the Fund's Managed Assets pursuant to the investor support services agreement.

New Accounting Pronouncement

In October 2020, the SEC adopted new regulations governing the use of derivatives by registered investment companies. Rule 18f-4 will impose limits on the amount of derivatives a fund could enter into, eliminate the asset segregation framework currently used by funds to comply with Section 18 of the 1940 Act, and require funds whose use of derivatives is more than a limited specified exposure to establish and maintain a derivatives risk management program and appoint a derivatives risk manager. While the new rule became effective February 19, 2021, funds will not be required to fully comply with the new rule until August 19, 2022. It is not currently clear what impact, if any, the new rule will have on the availability, liquidity or performance of derivatives. When fully implemented, the new rule may require changes in how a fund will use derivatives, may adversely affect a fund's performance and may increase costs related to a fund's use of derivatives.

(2) Investment Advisory and Other Affiliated Fees

The Fund has entered into an Investment Advisory Agreement (the Advisory Agreement) with the Adviser. Pursuant to the terms of the Advisory Agreement, the Fund pays the Adviser a monthly fee at the rate when annualized of (i) 2.50% of the average net assets for the month of its venture capital and other restricted securities up to 25% of net assets and (ii) for all other net assets, 0.98% of the average net assets up to $250 million, 0.88% of the average net assets for the next $250 million, 0.80% of the average net assets for the next $500 million and 0.70% of the average net assets thereafter. The aggregate fee would not exceed a rate when annualized of 1.36%.

The Fund has entered into a Services Agreement (the Agreement) with the Adviser. Pursuant to the terms of the Agreement, the Fund reimburses the Adviser for certain services related to a portion of the payment of salary and provision of benefits to the Fund's Chief Compliance Officer. During the six months

ended March 31, 2021, these payments amounted to $61,008 and are included in the Other category of expenses in the Statement of Operations, together with insurance and other expenses incurred to unaffiliated entities. Expenses incurred pursuant to the Agreement as well as certain expenses paid for by the Adviser are allocated to the Fund in an equitable fashion as approved by the Trustees or officers of the Fund who are also officers of the Adviser.

The Fund pays compensation to Independent Trustees in the form of a retainer, attendance fees, and additional compensation to Board and Committee chairpersons. The Fund does not pay compensation directly to Trustees or officers of the Fund who are also officers of the Adviser.

(3) Other Transactions with Affiliates

An affiliate company is a company in which the Fund holds 5% or more of the voting securities. Transactions involving such companies during the six months ended March 31, 2021 were as follows:

Affiliated Companies	Beginning Value as of September 30, 2020		Purchases at Cost		Proceeds from Sales		Net Realized Gain/(Loss) on sale of Affiliated Companies		Change in Unrealized Appreciation/ Depreciation			Ending Value as of March 31, 2021
Arkuda Therapeutics, Inc.	$	4,709,095	$	—	$	—	$	—	$	—		$	4,709,095
Invetx, Inc.		3,450,000		—		—		—		—			3,450,000
Priothera Ltd.		0		1,098,203		—		—		(3,687	)		1,094,516
	$	8,159,095	$	1,098,203	$	—	$	—	($	3,687	)	$	9,253,611

Affiliated Companies	Shares as of March 31, 2021		Principal Amount as of March 31, 2021		Dividend/ Interest Income from Affiliated Companies		Capital Gain Distributions from Affiliated Companies
Arkuda Therapeutics, Inc.		1,979,443	$	—	$	—	$	—
Invetx, Inc.		7,187,500		—		—		—
Priothera Ltd.		93,333		—		—		—
		9,260,276	$	—	$	—	$	—

(4) Fair Value Measurements

The Fund uses a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs is summarized in the three broad levels. Level 1 includes quoted prices in active markets for identical investments. Level 2 includes prices determined using other significant observable inputs (including quoted prices for similar investments, interest rates, credit risk, etc.). The independent pricing vendor may value bank loans and debt securities at an evaluated bid price by employing methodologies that utilize actual market transactions, broker-supplied valuations, and/or other methodologies designed to identify the market value for such securities and such securities are considered Level 2 in the fair value hierarchy. Level 3 includes prices determined using significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments). These inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

For the period ended March 31, 2021, there were no transfers between levels.

The following is a summary of the levels used as of March 31, 2021 to value the Fund's net assets.

Assets at Value	Level 1		Level 2		Level 3		Total
Convertible Preferred
Biotechnology	$	—	$	—	$	43,532,760	$	43,532,760
Health Care Equipment & Supplies		—		—		1,397,369		1,397,369
Pharmaceuticals		—		—		7,000,000		7,000,000
Common Stocks and Warrants
Biotechnology		634,318,719		—		711,296		635,030,015
Health Care Equipment & Supplies		92,680,495		—		1,759,618		94,440,113
Health Care Providers & Services		47,477,761		—		105,622		47,583,383
Health Care Technology		2,093,578		—		—		2,093,578
Healthcare Services		22,048,084		—		—		22,048,084
Life Sciences Tools & Services		91,808,778		—		—		91,808,778
Medical Devices and Diagnostics		13,060,840		—		—		13,060,840
Pharmaceuticals		138,607,243		5,749		—		138,612,992
Special Purpose Acquisition Company		1,756,295		—		—		1,756,295
Short-term Investments		2,465,000		6,912,000		—		9,377,000
Milestone Interests
Biotechnology		—		—		1,361,243		1,361,243
Health Care Equipment & Supplies		—		—		2,590		2,590
Pharmaceuticals		—		—		10,141,901		10,141,901
Other Assets		—		—		194,849		194,849
Total	$	1,046,316,793	$	6,917,749	$	66,207,248	$	1,119,441,790

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value.

Investment in Securities	Balance as of September 30, 2020		Net realized gain (loss) and change in unrealized appreciation (depreciation)			Cost of purchases and conversions		Proceeds from sales and conversions			Net transfers in (out of) Level 3		Balance as of March 31, 2021
Convertible Preferred
Biotechnology	$	37,238,134	$	18,677,503		$	10,441,645	($	22,824,522	)	$	—	$	43,532,760
Health Care Equipment & Supplies		1,397,369		—			—		—			—		1,397,369
Pharmaceuticals		7,000,000		—			—		—			—		7,000,000
Convertible Notes
Biotechnology		688,948		(456,386	)		—		(232,562	)		—		—
Common Stock and Warrants
Biotechnology		716,501		(6,732	)		1,527		—			—		711,296
Health Care Equipment & Supplies		1,639,061		120,557			—		—			—		1,759,618
Health Care Providers & Services		158,200		(5,178	)		—		(47,400	)		—		105,622
Milestone Interests
Biotechnology		3,524,221		(1,248,007	)		—		(914,971	)		—		1,361,243
Health Care Equipment & Supplies		5,110		(2,520	)		—		—			—		2,590
Pharmaceuticals		11,347,619		(1,205,718	)		—		—			—		10,141,901
Other Assets		213,710		—			193,686		(212,547	)		—		194,849
	$	63,928,873	$	15,873,519		$	10,636,858	($	24,232,002	)	$	—	$	66,207,248
Net change in unrealized appreciation (depreciation) from investments still held as of March 31, 2021													($	2,140,451	)

The following is a quantitative disclosure about significant unobservable inputs used in the determination of the fair value of Level 3 assets.

Fair Value at
March 31,
2021

Valuation Technique

Unobservable Input

Range
(Weighted Average)

Common Stock
and Warrants

1,779,342

Income approach,
Black-Scholes

Discount for lack of
marketability

20.00% (20.00%)

105,622

Probability adjusted
value

Probability of events
Timing of events

20.00% (20.00%)
1.75-2.75 (2.25) years

691,572

Market approach

(a)

N/A

Convertible Preferred

172,629

Probability adjusted
value

Probability of events
Timing of events

20.00% (20.00%)
0.25 (0.25) years

22,455,582
29,301,918

Market approach
Recent transactions

(a)
(b)

N/A
N/A

Fair Value at
March 31,
2021

Valuation Technique

Unobservable Input

Range
(Weighted Average)

Milestone Interests

11,505,734

Probability adjusted
value

Probability of events
Timing of events

20.00%-100.00% (70.62%)
0.25-16.00 (3.96) years

Other Assets

194,849

Probability adjusted
value

Probability of events
Timing of events

20.00%-95.00% (20.45%)
0.50-6.75 (0.53) years

66,207,248

(a) There is no quantitative information to provide as these methods of measure are investment specific.

(b) The valuation technique used as a basis to approximate fair value of these investments is based upon subsequent financing rounds.

(5) Private Companies and Other Restricted Securities

The Fund may invest in private companies and other restricted securities if these securities would currently comprise 40% or less of net assets. The value of these securities represented 6% of the Fund's net assets at March 31, 2021.

At March 31, 2021, the Fund had a commitment of $3,510,552 relating to additional investments in three private companies.

The following table details the acquisition date, cost, carrying value per unit, and value of the Fund's private companies and other restricted securities at March 31, 2021. The Fund on its own does not have the right to demand that such securities be registered.

Security (#)	Acquisition Date	Cost		Carrying Value per Unit		Value
Afferent Milestone Interest	07/27/16	$	377,701	$	681,147.00	$	681,147
Amphivena Therapeutics, Inc.
Series B Cvt. Pfd	07/17/17		4,902,917		15.00		4,900,001
Series C Cvt. Pfd	12/10/18		1,887,420		3.59		1,887,315
Arkuda Therapeutics, Inc. Series A Cvt. Pfd	05/16/19, 04/02/20		4,709,095		2.38		4,709,095
Caribou Biosciences, Inc. Series C Cvt. Pfd	03/01/21		2,903,233		17.26		2,900,625
Cercacor Laboratories, Inc. Common	03/31/98†		0		11.00		1,759,618
Curasen Therapeutics, Inc. Series A Cvt. Pfd	09/18/18, 01/07/20		7,000,000		1.10		7,000,000
Dynacure Series C Cvt. Pfd	04/21/20, 10/28/20		5,611,074		24.88		5,863,506
Ethismos Research Milestone Interest	10/31/17		0		0.00		0
Hotspot Therapeutics, Inc. Series B Cvt. Pfd	04/22/20		3,450,000		2.40		3,450,000
Impact Biomedicines Milestone Interest	07/20/10		0		3,296,764.00		3,296,764
InnovaCare, Inc. Escrow Shares Common	12/21/12†		96,109		0.48		105,622
Invetx, Inc. Series A Cvt. Pfd	08/06/20		3,450,000		0.48		3,450,000
IO Light Holdings, Inc. Series A2 Cvt. Pfd	04/30/20†		1,394,759		3.85		1,397,369
Neurovance Milestone Interest	03/20/17		4,917,880		6,163,990.00		6,163,990

Security (#)	Acquisition Date	Cost		Carrying Value per Unit			Value
Oculis SA, Series B2 Cvt. Pfd	01/16/19	$	2,335,688	$	8.81		$	2,444,055
Priothera Ltd. Series A, Cvt. Pfd	10/07/20		1,098,203		11.73			1,094,516
Pyxis Oncology, Inc. Series B Cvt. Pfd	03/05/21		4,083,668		1.65			4,079,999
Rainier Therapeutics, Inc.
Series A Cvt. Pfd	01/19/16, 10/24/16		1,751,520		0.00	††		269
Series B Cvt. Pfd	03/03/17		1,166,879		0.19			290,107
Rallybio Holdings, LLC Series B Cvt. Pfd	03/27/20		6,911,894		1.39			6,900,098
Therachon Milestone Interest	07/01/19		2,362,765		1,361,243.00			1,361,243
Therox Milestone Interest	06/18/19		7,611		2,590.00			2,590
Vectivbio Holding AG Common	07/01/19†		684,247		0.79			691,250
Series A1 Cvt. Pfd	09/02/20		680,496		0.98			679,284
Series A2 Cvt. Pfd	09/02/20		885,163		1.15			883,890
		$	62,668,322				$	65,992,353

(#) See Schedule of Investments and corresponding footnotes for more information on each issuer.

† Interest received as part of a corporate action for a previously owned security.

†† Carrying value per unit is greater than $0.00 but less than $0.01.

The Investment Advisory Agreement (the Advisory Agreement) between the Fund and the Adviser continues in effect so long as its continuance is approved at least annually by (i) the Trustees of the Fund and (ii) a majority of the Trustees of the Fund who are not interested persons (the Independent Trustees), by vote cast in person at a meeting called for the purpose of voting on such approval.

After considering the matter in a meeting held on March 18, 2021, the Board, and the Independent Trustees voting separately, determined that the terms of the Advisory Agreement are fair and reasonable and approved the continuance of the Advisory Agreement as being in the best interests of the Fund and its shareholders. In making its determination, the Board considered materials that were specifically prepared by the Adviser and by an independent data provider at the request of the Board and Fund counsel for purposes of the contract review process, including comparisons of (i) the Fund's performance both directly and on a risk adjusted basis to a benchmark, the NASDAQ Biotech Index^® (NBI), and to a peer universe of other investment companies, (ii) the Fund's expenses and expense ratios to those of a peer group of other investment companies, and (iii) the Adviser's profitability with respect to its services for the Fund to the profitability of other investment advisers. The Trustees took into account that substantially all of the Adviser's business consists of providing investment management services to Tekla Healthcare Investors, Tekla Life Sciences Investors, Tekla Healthcare Opportunities Fund and Tekla World Healthcare Fund and the Adviser does not derive any significant benefit from its relationship with the Fund other than receipt of advisory fees pursuant to the Advisory Agreement, market research and potential marketing exposure for the Adviser. The Board also received and reviewed information throughout the year about the portfolio performance, the investment strategy, the portfolio management team and various fees and expenses of the Fund. In their deliberations, the Independent Trustees had the opportunity to meet privately without representatives of the Adviser present and were represented throughout the process by counsel to the Independent Trustees and the Fund.

In approving the Advisory Agreement, the Board considered, among other things, the nature, extent, and quality of the services to be provided by the Adviser, the investment performance of the Fund and the Adviser, the costs of services provided and profits realized by the Adviser and its affiliates, and whether fee levels reflect any economies of scale for the benefit of Fund shareholders and the extent to which economies of scale would be realized as the Fund grows. The Board reviewed information about the foregoing factors and

considered changes, if any, in such information since its previous approval. The Board also evaluated the financial strength of the Adviser and the capability of the personnel of the Adviser, specifically the strength and background of its investment analysts. Fund counsel provided the Board with the statutory and regulatory requirements for approval and disclosure of investment advisory agreements. The Board, including the Independent Trustees, evaluated all of the foregoing and, considering all factors together, determined in the exercise of its business judgment that the continuance of the Advisory Agreement is in the best interests of the Fund and its shareholders. The following provides more detail on certain factors considered by the Trustees and the Board's conclusions with respect to each such factor.

The nature, extent and quality of the services to be provided by the Adviser. On a regular basis the Board considers the roles and responsibilities of the Adviser as a whole, along with specific portfolio management, support and trading functions the Adviser provides to the Fund. The Trustees considered the nature, extent and quality of the services provided by the Adviser to the Fund. The Trustees continue to be satisfied with the quality and value of the investment advisory services provided to the Fund by the Adviser, and, in particular, the management style and discipline followed by the Adviser and the quality of the Adviser's research, trading, portfolio management, compliance and administrative personnel. The Trustees also took into account the Adviser's significant investment in its business through the addition of portfolio management and administrative staff over the last several years and the Adviser's commitment to continue to build out its infrastructure as future circumstances require.

The investment performance of the Fund and the Adviser. On a regular basis the Board reviews performance information of the Fund and discusses the Fund's investment strategy with the Adviser. The Trustees reviewed performance information for the Fund for the past one-, three-, five- and ten-year periods ended December 31, 2020, as compared to its benchmark, the NBI, and a peer universe of other investment companies identified by an independent service provider engaged by the Independent Trustees. The Trustees noted that the performance information reviewed reflects a view of the Fund's performance only as of a certain date, and that the results might be significantly different if a different date was selected to generate the performance information. Additionally, the Trustees recognized that longer periods of performance for the Fund may be adversely and disproportionately affected by significant underperformance in one more recent period, and that such underperformance may be caused by a small number of investment decisions or positions.

Unlike many other broader-based healthcare indices, the NBI contains high levels of biotechnology-based companies. Over time, this index has demonstrated higher returns, but has also demonstrated higher price volatility than the broad S&P 500^® Index. The Adviser seeks to operate the Fund at a biotechnology exposure level that is higher than many other indices and Funds but at a level that is below that of the NBI. The Adviser also seeks to operate the Fund at lower volatility than that of the NBI. In the current reporting period, the Adviser sought to do so by limiting exposure to biotechnology relative to the NBI and also by maintaining a higher exposure to large biotechnology companies (which exhibit relatively lower volatility) than is present in the NBI and lower exposure to small and mid-capitalization biotechnology companies than is present in the NBI.

The Trustees noted the Fund's strong absolute performance. In particular, the Trustees noted that on a net asset value basis as of December 31, 2020, the Fund returned 19.38% for the one-year period and had annualized returns of 11.65% for the three-year period, 5.33% for the five-year period, and 14.87% for the ten-year period. The Trustees also noted that for the one-, three-, five- and ten-year periods ended December 31, 2020, the Fund underperformed the NBI on a net asset value basis. The Trustees also noted that as of December 31, 2020, the Fund exhibited lower volatility than the NBI for all evaluation periods, outperformed the NBI on a risk adjusted basis for the three- and ten-year periods, slightly underperformed the NBI on a risk adjusted basis for the five-year period and underperformed the NBI on a risk adjusted basis for the one-year period. The Trustees noted that the Fund underperformed the peer universe average for the four evaluation periods ended December 31, 2020.

In considering the Fund's relative performance, the Trustees recognized that the Fund's unique strategy presents challenges when comparing the Fund's performance to a benchmark or group of comparable funds. In particular, the Trustees observed that the Fund's strategy has historically included a lower biotechnology allocation compared to the NBI and a higher biotechnology allocation compared to many other healthcare indices and to many of the other funds in the peer universe. The Trustees noted that, as a result, all other things being equal, in periods when biotechnology performs relatively well, the Fund might be expected to underperform the NBI (and/or the peer universe) and vice versa. Additionally, the Trustees noted that unlike the NBI and most of the peer universe, the Fund often maintains a meaningful allocation to venture and restricted securities. In light of these differences, the Trustees recognized the more limited usefulness of these performance comparisons for the Fund.

The Trustees concluded they continue to be satisfied with the investment performance of the Fund and the Adviser.

The costs of services to be provided and profits to be realized by the Adviser from its relationship with the Fund. The Trustees considered the various services provided by the Adviser to the Fund and reviewed comparative information regarding the expenses and expense ratios of the Fund and a peer group of other investment companies identified by an independent service provider engaged by the Independent Trustees. The Trustees noted that the Adviser's fees are within the range of fees presented in the comparative information and noted that the Fund often maintains a meaningful allocation to venture and restricted securities, a portfolio management service that can warrant higher management fees than those charged by the Adviser to the Fund. The Trustees also considered financial information provided by the Adviser, including financial statements of the Adviser and a comparison of the Adviser's profitability with respect to its services for the Fund to the profitability of other investment advisers.

The Trustees noted that the fees charged by the Adviser are within a reasonable range of fees as compared to fees charged by other investment advisers for similar services, and the services provided by the Adviser and the amounts paid under the Advisory Agreement are at least comparable to the services rendered and fees charged by others for similar services to warrant a finding that fees to be paid by the Fund are fair. Based on the information provided to and evaluated by the Trustees, the Trustees concluded that the fees charged by the Adviser are fair and reasonable in light of the quality and nature of the services provided by the Adviser and that the profitability of the Adviser's relationship with the Fund has not been excessive.

Whether fee levels reflect economies of scale and the extent to which economies of scale would be realized as the Fund grows. The Trustees considered the advisory fee schedule in the Advisory Agreement and noted that it provides for breakpoints that would reduce the effective fee to the extent the Fund's net assets should increase, allowing the Fund to share in the benefits of any economies of scale that would inure to the Adviser as the Fund's assets increase. Given the closed-end structure of the Fund, its current asset size, and the fact that any economies of scale are modest at current Fund asset levels, the Trustees determined that the Fund's advisory fee schedule is satisfactory and fair.

PRIVACY NOTICE: If you are a registered shareholder of the Fund, the Fund and Tekla Capital Management LLC, the Fund's investment adviser, may receive nonpublic personal information about you from the information collected by the transfer agent from your transactions in Fund shares. Any nonpublic personal information is not disclosed to third parties, except as permitted or required by law. In connection with servicing your account and effecting transactions, the information received may be shared with the investment adviser and non-affiliates, including transfer agents, custodians or other service companies. Access to your nonpublic personal information is restricted to employees who need to know that information to provide products or services to you. To maintain the security of your nonpublic personal information, physical, electronic, and procedural safeguards are in place that comply with federal standards. The policies and practices described above apply to both current and former shareholders.

If your Fund shares are held in "street name" at a bank or brokerage, we do not have access to your personal information and you should refer to your bank's or broker's privacy policies for a statement of the treatment of your personal information.

FOR MORE INFORMATION: A description of the Fund's proxy voting policies and procedures and information on how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available (i) without charge, upon request by calling 1-800-451-2597; (ii) by writing to Tekla Capital Management LLC at 100 Federal Street, 19th Floor, Boston, MA 02110; (iii) on the Fund's website at www.teklacap.com; and (iv) on the SEC's website at www.sec.gov.

The Fund's complete Schedule of Investments for the first and third quarters of its fiscal year will be filed with the SEC on Form N-PORT. This Schedule of Investments will also be available on the Fund's website at www.teklacap.com or the SEC's website at www.sec.gov.

You can find information regarding the Fund at the Fund's website, www.teklacap.com. The Fund regularly posts information to its website, including information regarding daily share pricing, distributions, press releases and links to the Fund's SEC filings. The Fund currently publishes and distributes quarterly fact cards, which include performance, portfolio holdings and sector information for each fiscal quarter. These fact cards will be available on the Fund's website and by request from the Fund's marketing and investor support services agent, Destra Capital Advisors LLC, at 1-877-855-3434.

The Registrant’s Schedule of Investments is included as part of the Report to Shareholders filed under Item 1 of this form.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

There have been no material changes to the procedures by which the shareholders may recommend nominees to the Registrant’s Board of Trustees, where those changes were implemented after the Registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A, or this Item.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

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.

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.

	OMB APPROVAL
	OMB Number:	3235-0570
	Expires:	July 31, 2022
UNITED STATES	Estimated average burden hours per response. . . . . . . . . . . . . . .20.6
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Investment Company Act file number			811-04889

Tekla Healthcare Investors
(Exact name of registrant as specified in charter)

100 Federal Street, 19th Floor, Boston, MA					02110
(Address of principal executive offices)					(Zip code)


(Name and address of agent for service)

Registrant’s telephone number, including area code:				617-772-8500

Date of fiscal year end:	September 30

Date of reporting period:		October 1, 2020 to March 31, 2021

Market Price¹				$24.41
NAV²				$24.99
Premium/(Discount)				-2.32%
Average 30 Day Volume				169,317
Net Assets				$1,116,070,025
Ticker				HQH
NAV Ticker				XHQHX
Commencement of Operations Date				4/22/87
Fiscal Year to Date Distributions per Share				$1.04

(Registrant)	TEKLA HEALTHCARE INVESTORS

By (Signature and Title)*	/s/ Daniel R. Omstead
	Daniel R. Omstead, President

Period	(a) Total No. of Shares Purchased (1)			(b) Average Price Paid per Share		(c) Total No. of Shares Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum No. of Shares that May Yet Be Purchased Under the Plans or Programs
Month #1 (Oct. 1, 2020—Oct. 31, 2020)		10,250	(2)	$	20.60		—		5,211,731
Month #2 (Nov. 1, 2020— Nov. 30, 2020)		—			—		—		5,211,731
Month #3 (Dec. 1, 2020 — Dec. 31, 2020)		—			—		—		5,211,731
Month #4 (Jan. 1, 2021 — Jan. 31, 2021)		—			—		—		5,211,731
Month #5 (Feb. 1, 2021— Feb. 28, 2021)		—			—		—		5,211,731
Month #6 (Mar. 1, 2021 — Mar. 31, 2021)		—			—		—		5,211,731
Total		10,250		$	20.60		—

By (Signature and Title)*	/s/ Laura Woodward
	Laura Woodward, Treasurer