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.

Dear Shareholders,

It's been a remarkable year in the U.S. and the world in general. The COVID-19 pandemic has changed the world in innumerable ways. It has changed the way we think about life and work and interact with other people. It has affected the way many people think about work/life balance, where and how they live and ultimately what is fundamentally important to them. We may now be starting to come out of this nearly two year-long epidemic. It will be interesting to see how much these changes stay with us and how much we retreat to what we were and what we were doing pre-pandemic.

With respect to investment in the healthcare and biotech industries and probably the general market, things have also been volatile but not as volatile as one might have imagined. From our focused perspective, some things have changed but many other things don't look all that different to us. Our sector continues to create new companies, develop novel products and attract risk capital. We think these are the things that drive success in the healthcare and biotech sectors.

There have certainly been notable achievements and some disappointments. From our perspective, the most notable has been the creation of multiple safe and effective vaccines that have substantially contributed to the world's efforts to stem the morbidity and mortality resulting from the COVID-19 epidemic. It is telling that from among the scores of companies that sought to create COVID-19 vaccines, two (one, a large pharmaceutical company (Pfizer, Inc.) in collaboration with a small biotech company (BioNTech SE) and the other a recent startup (Moderna, Inc.)) have each created remarkably effective vaccines that have saved untold numbers of lives. At some level, these two companies, and healthcare in general, may well have saved the world as we know it. Having personally worked in the pharmaceutical and biotech sectors for a long time, I can tell you that most of the people who work in these sectors do so in large part for the opportunity to make such a contribution to the world. From a humanitarian point of view, this has been great to watch.

It's also been good to watch from an investment perspective. Moderna is an epic case. In a little over a year, this 2016 startup has gone from being a solid and successful public mid-cap company to commercializing a product that has been given to hundreds of millions of patients, immunizing them but also creating approximately $20B in sales worldwide. In the process, Moderna has become among the biggest

biotech companies in the world with a market cap in the range of $90B. Furthermore, Pfizer, already a leading pharmaceutical company, was in the same timeframe able to capitalize on its partnership with BioNTech, a smaller European biotech company, to create a comparable COVID-19 vaccine. In our view, the accomplishments of Moderna as an independent company and the Pfizer/BioNTech partnership validate the investment approach we have been utilizing since the Fund's inception.

We think this validation of our investing approach bodes well for the intermediate and long-term. However, such validation of a fundamental approach doesn't always work in the short-term. As can be seen in the below chart, biotech (as viewed by the SPDR^® S&P^® Biotech ETF* ("XBI") and NASDAQ Biotechnology Index^®* ("NBI") significantly outperformed the broad healthcare market (as viewed by the S&P Composite 1500^® Health Care Index* ("S15HLTH") and the market (as viewed by the S&P 500^® Index* ("SPX") through early February 2021. As you will recall, the Moderna and Pfizer vaccines became available in January and February 2021. One might have thought that the incredible success of the COVID-19 vaccines would continue to drive healthcare/biotech outperformance. Alas, in a surprise to us, the broad SPX Index has significantly outperformed the healthcare and biotech markets since, to the point that the entire biotech outperformance of 2020 was reversed by September 2021.

We have been asked by some shareholders whether broad market outperformance as the vaccines became available makes us question our investment premise. We think not. Rather, we note that in anticipation of the emergence, and ultimate success, of the vaccines, healthcare and biotech significantly outperformed for nearly a year as the pandemic worsened. Once the vaccines became available, it seems that the market assumed the vaccines would be effective and moved on to embrace a future in which the world would return to a growing more upbeat situation. We think that the market is benefitting from the contribution our sector has made. Even more importantly, we think the investors who are benefitting from the reflation trade will be back soon. We are confident that the contribution of the healthcare and biotech sectors will

Largest Holdings by Issuer

(Excludes Short-Term Investments)

As of September 30, 2021

Issuer – Sector	% of Net Assets
Moderna, Inc. – Biotechnology		8.8	%
Amgen, Inc. – Biotechnology		5.9	%
Gilead Sciences, Inc. – Biotechnology		5.1	%
Horizon Therapeutics plc – Pharmaceuticals		4.1	%
Regeneron Pharmaceuticals, Inc. – Biotechnology		3.9	%
Illumina, Inc. – Life Sciences Tools & Services		3.8	%
Biogen, Inc. – Biotechnology		3.0	%
Vertex Pharmaceuticals, Inc. – Biotechnology		2.8	%
Alnylam Pharmaceuticals, Inc. – Biotechnology		2.0	%
Guardant Health, Inc. – Health Care Equipment & Supplies		1.9	%
Novavax, Inc. – Biotechnology		1.7	%
Seagen, Inc. – Biotechnology		1.7	%
Rallybio Corp. – Biotechnology		1.5	%
Sarepta Therapeutics, Inc. – Biotechnology		1.5	%
Thermo Fisher Scientific, Inc. – Life Sciences Tools & Services		1.5	%
United Therapeutics Corp. – Biotechnology		1.3	%
Syneos Health, Inc. – Healthcare Services		1.2	%
BioNTech SE – Biotechnology		1.2	%
BeiGene Ltd. – Biotechnology		1.2	%
IDEXX Laboratories, Inc. – Health Care Equipment & Supplies		1.2	%

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 assets, including both public and pre-public, often representing 50-65% of net assets.

There is no commonly published index which matches the investment strategy of HQH. The S15HLTH consists of approximately 180 companies representing most or all of the healthcare subsectors in which HQH typically invests; biotechnology often represents 15-20% of this index. By contrast, the NBI, which contains over 260 constituents, is much more narrowly constructed. The vast majority of this index is comprised of biotechnology, pharmaceutical and life science tools companies. In recent years, biotechnology has often represented 72-82% of the NBI. Neither the S15HLTH nor NBI indices contain any material amount of pre-public company assets.

Given the circumstances, we present both NAV and stock returns for the Fund in comparison to several commonly published indices. One index, the SPX, is a commonly considered broad based index; this index is comprised of companies in many areas of the economy, including, but not limited to healthcare. As described above, the NBI is a healthcare index mostly focused in three healthcare sectors with a high level of biotechnology by comparison. The S15HLTH contains a wider representation of healthcare subsectors, but typically contains a much lower biotechnology composition.

HQH generally invests in a combination of large-cap growth-oriented and earlier stage innovative healthcare companies with a focus on the biotechnology sector. Generally, HQH targets biotechnology exposure below that of the NBI and a higher biotechnology exposure than that of the S15HLTH. We note that, in recent periods, biotechnology has been a significant contributor to returns (both positive and negative) associated with those indices. We believe this sector continues to have significant potential for growth in the future.

Fund Performance for the Period Ending September 30, 2021

Period	HQH NAV		HQH MKT		NBI		S15HLTH		SPX
6 month		5.98		8.92		7.98		9.42		9.18
1 year		15.03		34.64		20.22		23.18		29.98
5 year		9.58		10.73		11.55		14.51		16.88
10 year		15.41		16.56		18.57		17.38		16.62

Change in the value of a $10,000 investment

Cumulative total return from 9/30/2011 to 9/30/2021

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. The graph and table do not reflect the deduction of taxes a shareholder would pay on fund distributions or the sale of fund shares. The Risk Adjusted NASDAQ Biotechnology Index^® is computed using Bloomberg data for the NBI and applying the Fund's computed 0.90 beta to NBI performance to reflect the Fund's lower historical risk.

Portfolio Management Commentary

Fund and Benchmark Performance and Other Influencing Factors

For the 12-month period ending September 30, 2021, the Fund net asset value was up 15.0% and market value up 34.6%. Over the same period the NBI was up 20.2% and the S15HLTH was up 23.2% percent.

The largest positive contribution to Fund relative performance was company stock selection and an overweight allocation to health care equipment. Two overweight positions in the period that contributed positively to performance were Horizon Therapeutics, plc (HZNP), up 41%, and Sutro Biopharma, Inc. (STRO), up 88%. Two of the Fund's early-stage venture holdings, Decipher Biosciences, Inc. and Rallybio Corp. (RLYB), had a strong positive impact on performance. Decipher Biosciences, a genomic testing company, was purchased by Veracyte, Inc. (VCYT) at a premium to the Fund's cost basis in a deal completed March 15, 2021. RLYB completed a successful IPO in July 2021 and its stock price stood at $17.58 as of September 30, 2021, above both its initial public offering price of $13.00 per share and the Fund's cost basis. The Fund benefitted from an overweight allocation to health care equipment

names, in particular a position in DexCom, Inc. (DXCM), a market leader in continuous glucose monitors that treat diabetes patients.

The largest negative contribution to Fund relative performance was company stock selection. Two overweight positions in the period that contributed negatively to performance were G1 Therapeutics Inc (GTHX), down 44% in the past six months, and Theravance Biopharma, Inc. (TBPH), down 50%. An underweight position in the period that contributed most negatively to relative performance was Moderna, Inc. (MRNA), up 444%. MRNA's outsized positive performance coincided with the Company's transformation to a global leader in supplying COVID-19 vaccines and generating tens of billions in revenue. To be clear, the Fund did benefit very much from its investment in the period in Moderna, but underperformed the NBI and S15HLTH on a relative performance basis. The Fund held an average of 4.9% of its portfolio in MRNA over the period versus an average 6.4% weight in the NBI and average 0.4% weight in the S15HLTH. While we highlight two successful venture investments above, overall the Fund's venture portfolio contributed negatively to relative performance as the Fund's early stage investment returns in aggregate lagged the performance of public market biotechnology companies.

Portfolio Highlights as of September 30, 2021

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

Horizon Therapeutics plc (HZNP) is a specialty pharmaceuticals company transitioning to a focused orphan disease business model centered around two key products, one for gout and the other for thyroid disease. As the Company has executed well from pipeline development to commercial sales, its stock has performed strongly, and we have held an overweight position in the stock.

Incyte Corp. (INCY) is an oncology and dermatology focused large-cap biotechnology company. While Jakafi, the Company's legacy product for the treatment of myelofibrosis continues to be a key revenue driver, investor focus has shifted towards future sources of potential growth. The Company suffered a setback on this front as Opzelura, its topical treatment for atopic dermatitis (eczema) recently approved by the FDA, was saddled with a restrictive label raising concerns about its ability to penetrate the eczema market. As a result the stock underperformed the index while we held an underweight position in this time period.

Amgen, Inc. (AMGN) is a large-cap biotechnology company with several older products facing biosimilar competition and price erosion. We believe its late-stage pipeline is not as deep as it might be though it does own Lumakras (a recently approved targeted cancer drug that will face competition from a similar therapy from Mirati Therapeutics, Inc.) and an upcoming asthma agent, Tezepelumab (whose sales are split with AstraZeneca plc). The stock has been weak as investors search for sources of mid to long-term growth beyond these assets. The Fund has maintained an underweight position in the stock.

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 as Moderna reached a greater than 10% position within the NBI Index.

Theravance Biopharma, Inc. (TBPH) is a commercial stage biotechnology Company with approved treatments for chronic obstructive pulmonary disease (COPD), which blocks airflow and leads to difficulty in breathing. The Company's stock price fell during the year as clinical trials in pipeline therapeutics proved unsuccessful in treating autoimmune disorders such as ulcerative colitis. The Fund held an overweight position.

Deciphera Pharmaceuticals, Inc. (DCPH) is a mid-cap oncology focused company with a recently approved product, Qinlock, to treat patients with gastrointestinal stromal tumors or GIST. Early sales for Qinlock came in far below Company estimates, leading analysts to lower the estimated size of the patient population requiring treatment. The Fund held an overweight position as the Company's stock underperformed.

Distributions

The Fund intends to make quarterly distributions at a rate of 2% of the Fund's net assets. The Fund intends to use net realized capital gains when making quarterly distributions, if available, but would make return of capital distributions if the amount of the distribution exceeds the Fund's net investment income and realized capital gains. During the last fiscal year, the Fund made quarterly distributions totaling $2.06 per share, which were characterized as $0.6115 per share of ordinary income, and $1.4485 per share of net realized long-term capital gains. Final determination of the tax character of the distributions paid by the Fund in 2021 will be reported to shareholders in January 2022.

SHARES		CONVERTIBLE PREFERRED (Restricted) ^{(a) (b)} - 4.6% of Net Assets	VALUE
		Biotechnology - 2.7%
	326,667	Amphivena Therapeutics, Inc. Series B, 6.00%^(c)	$	33
	525,972	Amphivena Therapeutics, Inc. Series C, 6.00%^(c)		53
	2,353,932	Arkuda Therapeutics, Inc. Series A, 6.00%^(c)		2,800,002
	602,572	Dynacure Series C^(d)		5,791,775
	2,875,000	Hotspot Therapeutics, Inc. Series B, 6.00%^(c)		6,900,000
	1,020,000	ImmuneID, Inc. Series A, 8.00%		2,040,000
	7,187,500	Invetx, Inc. Series A^(c)		3,450,000
	277,444	Oculis SA, Series B2, 6.00%^(d)		2,952,004
	75,367	Oculis SA, Series C, 6.00%^(d)		801,905
	528,339	Parthenon Therapeutics, Inc. Series A		2,092,307
	93,333	Priothera Ltd. Series A, 6.00%		1,081,123
	2,479,037	Pyxis Oncology, Inc. Series B		4,079,999
				31,989,201
		Health Care Equipment & Supplies - 0.1%
	421,634	IO Light Holdings, Inc. Series A2		1,423,015
		Pharmaceuticals - 1.8%
	616,645	Aristea Therapeutics, Inc. Series B, 8.00%		3,399,996
	1,295,238	Biotheryx, Inc. Series E, 8.00%		6,800,000
	14,598,540	Curasen Therapeutics, Inc. Series A^(c)		7,000,000
	2,773,472	HiberCell, Inc. Series B		3,399,999
				20,599,995
		TOTAL CONVERTIBLE PREFERRED (Cost $62,820,952)		54,012,211
PRINCIPAL AMOUNT		CONVERTIBLE NOTES (Restricted) ^{(a) (b) (c)} - 0.0% of Net Assets
		Biotechnology - 0.0%
$	303,323	Amphivena Therapeutics, Inc., 8.00%		0
		TOTAL CONVERTIBLE NOTES (Cost $ 303,323)		0

SHARES		COMMON STOCKS - 93.1% of Net Assets	VALUE
		Biotechnology - 57.9%
	66,802	AbbVie, Inc.	$	7,205,932
	367,414	Affimed N.V.^{(a) (d)}		2,270,619
	123,013	Alnylam Pharmaceuticals, Inc.^(a)		23,226,084
	323,595	Amgen, Inc.		68,812,477
	382,028	Amicus Therapeutics, Inc.^(a)		3,648,367
	129,695	Apellis Pharmaceuticals, Inc.^(a)		4,274,747
	86,869	Arcutis Biotherapeutics, Inc.^(a)		2,075,300
	57,557	Arena Pharmaceuticals, Inc.^(a)		3,427,519
	21,958	Argenx SE ADR^(a)		6,631,316
	129,830	Arrowhead Pharmaceuticals, Inc.^(a)		8,105,287
	43,409	Ascendis Pharma A/S ADR^(a)		6,918,961
	117,638	Atreca, Inc.^{(a) (e)}		732,885
	37,582	BeiGene Ltd. ADR^(a)		13,642,266
	122,399	Biogen, Inc.^(a)		34,637,693
	49,056	Biohaven Pharmaceutical Holding Co., Ltd.^(a)		6,814,369
	71,154	BioMarin Pharmaceutical, Inc.^(a)		5,499,493
	51,021	BioNTech SE ADR^(a)		13,928,223
	90,404	Black Diamond Therapeutics, Inc.^{(a) (e)}		764,818
	305,576	Caribou Biosciences, Inc. (Restricted)^{(a) (b)}		6,564,689
	170,000	Caribou Biosciences, Inc.^(a)		4,057,900
	51,708	ChemoCentryx, Inc.^(a)		884,207
	259,171	Corbus Pharmaceuticals Holdings, Inc.^(a)		264,354
	107,257	CRISPR Therapeutics AG^{(a) (d)}		12,005,276
	143,592	Denali Therapeutics, Inc.^(a)		7,244,216
	116,323	Exact Sciences Corp.^(a)		11,103,030
	43,739	Fate Therapeutics, Inc.^(a)		2,592,411
	96,639	Forma Therapeutics Holdings, Inc.^(a)		2,241,058
	15,186	Fusion Pharmaceuticals, Inc.^{(a) (d)}		120,273
	400,992	G1 Therapeutics, Inc.^{(a) (e)}		5,381,313
	296,462	Galera Therapeutics, Inc.^(a)		2,401,342
	854,746	Gilead Sciences, Inc.		59,704,008
	53,885	I-Mab ADR^(a)		3,906,124
	36,800	Intellia Therapeutics, Inc.^(a)		4,936,720
	33,437	Intercept Pharmaceuticals, Inc.^(a)		496,539
	191,195	Ionis Pharmaceuticals, Inc.^(a)		6,412,680
	68,406	KalVista Pharmaceuticals, Inc.^(a)		1,193,685
	67,254	Karuna Therapeutics, Inc.^(a)		8,227,182
	178,314	Kura Oncology, Inc.^(a)		3,339,821
	1,063,799	Mereo Biopharma Group plc ADR^(a)		2,574,394
	256,103	Moderna, Inc.^{(a) (f)}		98,563,801
	81,617	Neurocrine Biosciences, Inc.^(a)		7,827,886

SHARES		Biotechnology - continued	VALUE
	103,950	NexGel, Inc.^{(a) (b)}	$	322
	95,535	Novavax, Inc.^(a)		19,805,361
	51,406	Praxis Precision Medicines, Inc.^(a)		950,497
	43,169	Precision BioSciences, Inc.^(a)		498,170
	779,419	Rallybio Corp. (Restricted)^{(a) (b)}		12,331,966
	282,694	Rallybio Corp.^(a)		4,969,761
	74,062	Regeneron Pharmaceuticals, Inc.^(a)		44,820,841
	186,463	Sarepta Therapeutics, Inc.^(a)		17,244,098
	68,117	Scholar Rock Holding Corp.^(a)		2,249,223
	114,998	Seagen, Inc.^(a)		19,526,660
	68,508	Stoke Therapeutics, Inc.^(a)		1,742,844
	281,214	Sutro Biopharma, Inc.^(a)		5,312,132
	159,412	TCR2 Therapeutics, Inc.^(a)		1,356,596
	142,714	Travere Therapeutics, Inc.^(a)		3,460,815
	138,057	TScan Therapeutics, Inc.^(a)		1,151,395
	80,403	Ultragenyx Pharmaceutical, Inc.^(a)		7,251,547
	160,064	uniQure N.V.^{(a) (d)}		5,123,649
	78,566	United Therapeutics Corp.^(a)		14,501,712
	467,500	Vectivbio Holding AG (Restricted)^{(a) (b)}		3,250,294
	100,050	Vectivbio Holding AG^(a)		772,886
	177,475	Vertex Pharmaceuticals, Inc.^(a)		32,192,190
	55,800	Vir Biotechnology, Inc.^(a)		2,428,416
	113,978	Xenon Pharmaceuticals, Inc.^{(a) (d)}		1,741,584
	26,021	Zai Lab Ltd. ADR^(a)		2,742,353
				670,084,577
		Health Care Equipment & Supplies - 8.1%
	78,927	Abbott Laboratories		9,323,647
	160,000	Cercacor Laboratories, Inc. (Restricted)^{(a) (b)}		1,768,200
	65,628	DENTSPLY Sirona, Inc.		3,809,705
	17,013	DexCom, Inc.^(a)		9,303,729
	24,669	Edwards Lifesciences Corp.^(a)		2,792,777
	173,673	Guardant Health, Inc.^(a)		21,710,862
	10,945	Hologic, Inc.^(a)		807,850
	21,513	IDEXX Laboratories, Inc.^(a)		13,378,935
	95,213	Medtronic plc		11,934,950
	34,067	Stryker Corp.		8,984,149
	69,687	Zimmer Biomet Holdings, Inc.		10,199,389
				94,014,193
		Health Care Providers & Services - 4.6%
	17,832	Addus HomeCare Corp.^(a)		1,422,102
	2,644	Anthem, Inc.		985,683
	28,389	Charles River Laboratories International, Inc.^(a)		11,715,289

SHARES		Health Care Providers & Services - continued	VALUE
	41,860	Cigna Corp.	$	8,378,698
	34,995	HCA Healthcare, Inc.		8,493,986
	6,740	Humana, Inc.		2,622,871
	222,222	InnovaCare, Inc. Escrow Shares (Restricted)^{(a) (b)}		139,911
	13,049	Medpace Holdings, Inc.^(a)		2,469,915
	3,167	Molina Healthcare, Inc.^(a)		859,239
	107,595	Owens & Minor, Inc.		3,366,647
	33,507	UnitedHealth Group, Inc.		13,092,525
				53,546,866
		Healthcare Services ^(a) - 1.6%
	15,929	Laboratory Corporation of America Holdings		4,483,058
	161,563	Syneos Health, Inc.		14,133,531
				18,616,589
		Life Sciences Tools & Services - 7.1%
	216,209	Adaptive Biotechnologies Corp.^(a)		7,348,944
	35,350	ICON plc^{(a) (d)}		9,262,407
	108,050	Illumina, Inc.^(a)		43,826,161
	10,514	PerkinElmer, Inc.		1,821,971
	29,865	Thermo Fisher Scientific, Inc.		17,062,770
	8,360	Waters Corp.^(a)		2,987,028
				82,309,281
		Medical Devices and Diagnostics - 0.7%
	24,181	Danaher Corp.		7,361,664
	1,134	Intuitive Surgical, Inc.^(a)		1,127,366
				8,489,030
		Pharmaceuticals - 12.8%
	51,378	Arvinas, Inc.^(a)		4,222,244
	105,063	AstraZeneca plc ADR		6,310,084
	170,948	Aurinia Pharmaceuticals, Inc.^{(a) (d) (e)}		3,783,079
	95,088	Bristol-Myers Squibb Co.		5,626,357
	48,896	Catalent, Inc.^(a)		6,506,591
	37,913	Eli Lilly & Co.		8,759,799
	465,507	Endo International plc^{(a) (d)}		1,508,243
	432,599	Horizon Therapeutics plc^(a)		47,386,894
	134,848	Intra-Cellular Therapies, Inc.^(a)		5,027,133
	42,839	IQVIA Holdings, Inc.^(a)		10,261,654
	42,253	Jazz Pharmaceuticals plc^{(a) (d)}		5,501,763
	36,231	Johnson & Johnson		5,851,306
	48,115	McKesson Corp.		9,593,169

SHARES		Pharmaceuticals - continued	VALUE
	37,175	Merck & Co., Inc.	$	2,792,214
	55,093	Mirati Therapeutics, Inc.^(a)		9,746,503
	3,717	Organon & Co.		121,880
	7,050	Perrigo Co. plc		333,677
	79,790	Spectrum Pharmaceuticals, Inc.^(a)		173,942
	28,747	Tetraphase Pharmaceuticals, Inc. CVR (Restricted)^{(a) (b)}		1,725
	291,666	Teva Pharmaceutical Industries Ltd. ADR^(a)		2,840,827
	452,402	Theravance Biopharma, Inc.^{(a) (d)}		3,347,775
	78,303	Turning Point Therapeutics, Inc.^(a)		5,201,668
	94,775	VYNE Therapeutics, Inc.^{(a) (e)}		131,737
	12,377	Zoetis, Inc.		2,402,871
	51,696	Zogenix, Inc.^(a)		785,262
				148,218,397
		Special Purpose Acquisition Company ^(a) - 0.2%
	171,597	Helix Acquisition Corp.		1,693,662
		TOTAL COMMON STOCKS (Cost $767,893,817)		1,076,972,595
PRINCIPAL AMOUNT		SHORT-TERM INVESTMENTS - 1.7% of Net Assets
$	8,304,000	Repurchase Agreement, Fixed Income Clearing Corp., repurchase value $8,304,000, 0.00%, dated 09/30/21, due 10/01/21 (collateralized by U.S. Treasury Note 1.25%, due 09/30/28, market value $8,470,102)		8,304,000
SHARES
	11,333,055	State Street Institutional U.S. Government Money Market Fund, Institutional Class, 0.03% ^(g)		11,333,055
		TOTAL SHORT-TERM INVESTMENTS (Cost $19,637,055)		19,637,055
		TOTAL INVESTMENTS BEFORE MILESTONE INTERESTS - 99.4% (Cost $850,655,148)		1,150,621,861

INTERESTS		MILESTONE INTERESTS (Restricted) ^{(a) (b)} - 1.0% of Net Assets	VALUE
		Biotechnology - 0.2%
	1	Rainier Therapeutics Milestone Interest	$	395,493
	1	Therachon Milestone Interest		1,362,882
				1,758,375
		Health Care Equipment & Supplies - 0.0%
	1	Therox Milestone Interest		1,982
		Pharmaceuticals - 0.8%
	1	Afferent Milestone Interest		739,591
	1	Ethismos Research Milestone Interest		0
	1	Impact Biomedicines Milestone Interest		2,379,737
	1	Neurovance Milestone Interest		6,169,870
				9,289,198
		TOTAL MILESTONE INTERESTS (Cost $8,061,450)		11,049,555
NUMBER OF CONTRACTS (100 SHARES EACH)/ NOTIONAL AMOUNT ($)		PUT OPTION CONTRACTS PURCHASED - 0.6% of Net Assets
	610/24,400,000	Moderna, Inc. Jan22 400 Put		3,432,470
	736/27,968,000	Moderna, Inc. Jan22 380 Put		3,334,816
		TOTAL PUT OPTION CONTRACTS PURCHASED (Premiums paid $8,233,134)		6,767,286

NUMBER OF CONTRACTS (100 SHARES EACH)/ NOTIONAL AMOUNT ($)			CALL OPTION CONTRACTS WRITTEN - (0.3)% of Net Assets	VALUE
	736/	(33,856,000)	Moderna, Inc. Jan22 460 Call	$	(1,766,400	)
	610/	(29,280,000)	Moderna, Inc. Jan22 480 Call		(1,244,400	)
			TOTAL CALL OPTION CONTRACTS WRITTEN (Premiums received $(7,359,959))		(3,010,800	)
			TOTAL INVESTMENTS - 100.7% (Cost $859,589,773)		1,165,427,902
			OTHER LIABILITIES IN EXCESS OF ASSETS - (0.7)%		(8,525,818	)
			NET ASSETS - 100%	$	1,156,902,084

(a) Non-income producing security.

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

(d) Foreign security.

(e) All or a portion of this security is on loan as of September 30, 2021. See Note 1.

(f) A portion of security is pledged as collateral for call options written.

(g) This security represents the investment of cash collateral received for securities lending and is a registered investment company advised by State Street Global Advisors. The rate shown is the annualized seven-day yield as of September 30, 2021.

ADR American Depository Receipt

CVR Contingent Value Right

ASSETS:
Investments in unaffiliated issuers, at value (cost $828,844,617), including $10,366,884 of securities loaned	$	1,137,239,059
Investments in affiliated issuers, at value (cost $30,043,665)		20,150,088
Milestone interests, at value (cost $8,061,450)		11,049,555
Total investments		1,168,438,702
Cash		877
Foreign currency, at value (cost $58)		58
Dividends and interest receivable		218,749
Securities lending income receivable		4,703
Receivable for investments sold		3,806,413
Prepaid expenses		50,095
Other assets (see Note 1)		15,966
Total assets		1,172,535,563
LIABILITIES:
Payable upon return of securities loaned		11,333,055
Accrued advisory fee		943,578
Accrued investor support service fees		50,637
Accrued shareholder reporting fees		40,530
Options written, at value (premium received $7,359,959)		3,010,800
Accrued other		254,879
Total liabilities		15,633,479
Commitments and Contingencies (see Notes 1 and 4)
NET ASSETS	$	1,156,902,084
SOURCES OF NET ASSETS:
Shares of beneficial interest, par value $.01 per share, unlimited number of shares authorized, amount paid in on 45,425,468 shares issued and outstanding	$	454,254
Additional paid-in-capital		853,345,097
Total distributable earnings (loss)		303,102,733
Total net assets (equivalent to $25.47 per share based on 45,425,468 shares outstanding)	$	1,156,902,084

INVESTMENT INCOME:
Dividend income (net of foreign tax of $266)	$	6,420,922
Securities lending, net		59,400
Total investment income		6,480,322
EXPENSES:
Advisory fees		10,783,984
Investor support service fees		570,758
Administration fees		241,771
Custodian fees		192,768
Shareholder reporting		168,324
Legal fees		161,259
Trustees' fees and expenses		154,900
Auditing fees		114,372
Transfer agent fees		56,596
Other (see Note 2)		265,974
Total expenses		12,710,706
Net investment loss		(6,230,384	)
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments in unaffiliated issuers		82,398,827
Closed or expired option contracts written		148,326
Foreign currency transactions		(17,795	)
Net realized gain		82,529,358
Net change in unrealized appreciation (depreciation) on:
Investments in unaffiliated issuers		87,848,372
Investments in affiliated issuers		(9,890,725	)
Milestone interests		(3,307,917	)
Option contracts written		4,227,149
Net change in unrealized appreciation (depreciation)		78,876,879
Net realized and unrealized gain (loss)		161,406,237
Net increase in net assets resulting from operations	$	155,175,853

	Year ended September 30, 2021			Year ended September 30, 2020
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS:
Net investment loss	($	6,230,384	)	($	1,971,715	)
Net realized gain		82,529,358			83,063,244
Change in net unrealized appreciation		78,876,879			160,112,975
Net increase in net assets resulting from operations		155,175,853			241,204,504
DISTRIBUTIONS TO SHAREHOLDERS (See Note 1):		(91,590,428	)		(76,399,193	)
CAPITAL SHARE TRANSACTIONS:
Reinvestment of distributions (1,553,813 and 1,713,261 shares, respectively)		38,621,063			32,433,297
Fund shares repurchased (0 and 667,832 shares, respectively) (see Note 1)		—			(13,390,092	)
Total capital share transactions		38,621,063			19,043,205
Net increase in net assets		102,206,488			183,848,516
NET ASSETS:
Beginning of year		1,054,695,596			870,847,080
End of year	$	1,156,902,084		$	1,054,695,596

	For the years ended September 30,
	2021			2020			2019			2018			2017
OPERATING PERFORMANCE FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR
Net asset value per share, beginning of year	$	24.04		$	20.33		$	25.62		$	26.02		$	24.99
Net investment loss ⁽¹⁾		(0.14	)		(0.05	)		(0.07	)		(0.10	)		(0.13	)
Net realized and unrealized gain (loss)		3.63			5.50			(3.46	)		1.63			3.12
Total increase (decrease) from investment operations		3.49			5.45			(3.53	)		1.53			2.99
Distributions to shareholders from:
Net investment income		(0.61	)		(0.01	)		(0.17	)		(0.15	)⁽²⁾		—
Net realized capital gains		(1.45	)		(1.77	)		(1.65	)		(1.79	)⁽²⁾		(1.96	)
Total distributions		(2.06	)		(1.78	)		(1.82	)		(1.94	)		(1.96	)
Increase resulting from shares repurchased ⁽¹⁾		—			0.04			0.06			0.01			—	⁽³⁾
Net asset value per share, end of year	$	25.47		$	24.04		$	20.33		$	25.62		$	26.02
Per share market value, end of year	$	25.57		$	20.62		$	18.34		$	23.15		$	25.23
Total investment return at market value		34.64	%		23.38	%		(12.88	%)		0.05	%		14.95	%
Total investment return at net asset value		15.03	%		29.77	%		(12.74	%)		7.37	%		12.95	%
RATIOS
Net investment loss to average net assets		(0.54	%)		(0.20	%)		(0.31	%)		(0.41	%)		(0.53	%)
Expenses to average net assets		1.11	%		1.10	%		1.12	%		1.08	%		1.10	%
SUPPLEMENTAL DATA
Net assets at end of year (in millions)	$	1,157		$	1,055		$	871		$	1,082		$	1,058
Portfolio turnover rate		69.19	%		52.44	%		47.65	%		45.75	%		29.21	%

(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 September 30, 2021, through the date that the financial statements were issued, have been evaluated in the preparation of these financial statements.

Beginning in January 2020, global financial markets have experienced, and may continue to experience, significant volatility resulting from the spread of a virus known as COVID-19. The outbreak of COVID-19 has resulted in travel and border restrictions, quarantines, supply chain disruptions, lower consumer demand, and general market uncertainty. The effects of COVID-19 have adversely affected, and may continue to adversely affect, the global economy, the economies of certain nations, and individual issuers, all of which may negatively impact the Fund's performance.

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 seven 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, Rainier Therapeutics, Inc., 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 year ended September 30, 2021:

Statement of Assets and Liabilities, Milestone interests, at value	$	11,049,555
Statement of Assets and Liabilities, Total distributable earnings	$	2,988,105
Statement of Operations, Change in unrealized appreciation (depreciation) on Milestone interests	($	3,307,917	)

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'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.

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

$6,767,286

Net realized gain(loss)
on investments

($378,488)

Change in unrealized
appreciation (depreciation)
on investments

($1,429,360)

Liabilities, Options
written, at value

($3,010,800)

Net realized gain (loss)
on closed or expired
option contracts written

$148,326

Change in unrealized
appreciation (depreciation)
on option contracts written

$4,227,149

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 year ended September 30, 2021 totaled $779,852,704 and $843,439,934, 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 September 30, 2021, the Fund loaned securities valued at $10,366,884 and received $11,333,055 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 year ended September 30, 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 September 30, 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, distribution re-designations, foreign currency gains and losses, book to tax difference due to merger and ordinary loss netting to reduce short term capital gains. Reclassifications are made to the Fund's capital accounts to reflect income and gains available for distribution under income tax regulations. At September 30, 2021, the Fund reclassified $7,087,260 from accumulated net realized gain on investment and $7,087,260 to undistributed net investment income for current period book/tax differences.

The tax basis components of distributable earnings and the tax cost as of September 30, 2021 were as follows:

Cost of Investments for tax purposes	$	874,952,023
Gross tax unrealized appreciation	$	536,509,740
Gross tax unrealized depreciation	$	(238,673,903	)
Net tax unrealized appreciation on investments	$	297,835,837
Undistributed ordinary income	$	5,266,896
Undistributed long-term capital gains	$	—

The Fund has designated the distributions for its taxable years ended September 30, 2021 and 2020 as follows:

Distributions paid from:	2021		2020
Ordinary income (includes short-term capital gain)	$	27,187,763	$	454,997
Long-term capital gain	$	64,402,665	$	75,944,196

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 year ended September 30, 2021, these payments amounted to $124,355 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 year ended September 30, 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 September 30, 2021
Amphivena Therapeutics, Inc.	$	6,787,316	*	$	303,493	$	—	$	—	($	7,090,723	)	$	86
Arkuda Therapeutics, Inc.		4,709,095			890,909		—		—		(2,800,002	)		2,800,002
Curasen Therapeutics, Inc.		7,000,000	*		—		—		—		—			7,000,000
Hotspot Therapeutics, Inc.		3,450,000	*		3,450,000		—		—		—			6,900,000
Invetx, Inc.		3,450,000			—		—		—		—			3,450,000
	$	25,396,411		$	4,644,402	$	—	$	—	($	9,890,725	)	$	20,150,088

Affiliated Companies	Shares as of September 30, 2021		Principal Amount as of September 30, 2021		Dividend/ Interest Income from Affiliated Companies		Capital Gain Distributions from Affiliated Companies
Amphivena Therapeutics, Inc.		1,155,962	$	—	$	—	$	—
Arkuda Therapeutics, Inc.		2,353,932		—		—		—
Curasen Therapeutics, Inc.		14,598,540		—		—		—
Hotspot Therapeutics, Inc.		2,875,000		—		—		—
Invetx, Inc.		7,187,500		—		—		—
		28,170,934	$	—	$	—	$	—

* Not an affiliate as of September 30, 2020.

(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 year ended September 30, 2021, the total amount of transfers between Level 3 and Level 2 was $7,591,348.The two investments were transferred due to an initial public offering lockup period and the values are being supported by significant observable inputs. There were no other transfers between levels.

The following is a summary of the levels used as of September 30, 2021 to value the Fund's investments.

Assets and Liabilities at Value	Level 1			Level 2		Level 3			Total
Convertible Preferred
Biotechnology	$	—		$	—	$	31,989,201		$	31,989,201
Health Care Equipment & Supplies		—			—		1,423,015			1,423,015
Pharmaceuticals		—			—		20,599,995			20,599,995
Convertible Notes
Biotechnology		—			—		0	*		0
Common Stocks
Biotechnology		647,937,306			22,146,949		322			670,084,577
Health Care Equipment & Supplies		92,245,993			—		1,768,200			94,014,193
Health Care Providers & Services		53,406,955			—		139,911			53,546,866
Healthcare Services		18,616,589			—		—			18,616,589
Life Sciences Tools & Services		82,309,281			—		—			82,309,281
Medical Devices and Diagnostics		8,489,030			—		—			8,489,030
Pharmaceuticals		148,216,672			1,725		—			148,218,397
Special Purpose Acquisition Company		1,693,662			—		—			1,693,662
Short-term Investments		11,333,055			8,304,000		—			19,637,055
Milestone Interests
Biotechnology		—			—		1,758,375			1,758,375
Health Care Equipment & Supplies		—			—		1,982			1,982
Pharmaceuticals		—			—		9,289,198			9,289,198
Other Assets		—			—		15,966			15,966
Total	$	1,064,248,543		$	30,452,674	$	66,986,165		$	1,161,687,382
Other Financial Instruments
Assets
Put Options Contracts Purchased	$	6,767,286		$	—	$	—		$	6,767,286
Liabilities
Call Options Contracts Written		(3,010,800	)		—		—			(3,010,800	)
Total	$	3,756,486		$	—	$	—		$	3,756,486

* Represents security valued at zero.

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 September 30, 2021
Convertible Preferred
Biotechnology	$	37,238,134	$	9,740,464		$	19,155,829	($	27,245,128	)	($	6,900,098	)	$	31,989,201
Health Care Equipment & Supplies		1,397,369		25,646			—		—			—			1,423,015
Pharmaceuticals		7,000,000		(16,404	)		13,616,399		—			—			20,599,995
Convertible Notes
Biotechnology		688,948		(759,709	)		303,323		(232,562	)		—			0
Common Stock
Biotechnology		716,501		(13,850	)		—		(11,079	)		(691,250	)		322
Health Care Equipment & Supplies		1,639,061		129,139			—		—			—			1,768,200
Health Care Providers & Services		158,200		29,111			—		(47,400	)		—			139,911
Milestone Interests
Biotechnology		3,524,221		(1,246,369	)		395,493		(914,970	)		—			1,758,375
Health Care Equipment & Supplies		5,110		(3,128	)		—		—			—			1,982
Pharmaceuticals		11,347,619		(2,058,421	)		—		—			—			9,289,198
Other Assets		213,710		—			208,414		(406,158	)		—			15,966
	$	63,928,873	$	5,826,479		$	33,679,458	($	28,857,297	)	($	7,591,348	)	$	66,986,165
Net change in unrealized appreciation (depreciation) from investments still held as of September 30, 2021														($	12,520,090	)

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
September 30,
2021

Valuation Technique

Unobservable Input

Range
(Weighted Average)

Common Stock

1,768,200

Income approach

(a)

N/A

139,911

Probability adjusted
value

Probability of events
Timing of events

20.00% (20.00%)
0.5-2.5 (1.5%) years

322

Market approach

(a)

N/A

Convertible Preferred

31,118,787

Market approach

(a)

N/A

22,893,424

Recent transactions

(b)

N/A

Milestones Interests

11,049,555

Probability adjusted
value

Probability of events
Timing of events

11.00%-100.00 (73.52%)
0.50-15.50 (4.26) years

Other Assets

15,966

Probability adjusted
value

Probability of events
Timing of events

50.00%-95.00% (53.19%)
0.25-6.25 (0.65) years

66,986,165

(a) There is no quantitative information to provide as this method of measure is 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 8% of the Fund's net assets at September 30, 2021.

At September 30, 2021, the Fund had a commitment of $6,953,674 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 September 30, 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	$	739,591.00		$	739,591
Amphivena Therapeutics, Inc.
Series B Cvt. Pfd	07/17/17		4,902,917		0.00	††		33
Series C Cvt. Pfd	12/10/18		1,887,420		0.00	††		53
Cvt. Note	08/25/21		303,324		0.00			0
Aristea Therapeutics, Inc. Series B Cvt. Pfd	07/27/21		3,399,996		5.51			3,399,996
Arkuda Therapeutics, Inc. Series A Cvt. Pfd	05/16/19, 04/02/20, 07/15/21		5,600,004		1.19			2,800,002
Biotheryx, Inc. Series E Cvt. Pfd	05/19/21		6,809,457		5.25			6,800,000
Caribou Biosciences, Inc. Common	03/01/21		2,906,735		21.48			6,564,689
Cercacor Laboratories, Inc. Common	03/31/98†		0		11.05			1,768,200
Curasen Therapeutics, Inc. Series A Cvt. Pfd	09/18/18, 01/07/20		7,000,000		0.48			7,000,000
Dynacure Series C Cvt. Pfd	04/21/20, 10/28/20		5,611,822		9.61			5,791,775
Ethismos Research Milestone Interest	10/31/17		0		0.00			0
HiberCell, Inc. Series B Cvt. Pfd	05/05/21		3,406,945		1.23			3,399,999
Hotspot Therapeutics, Inc. Series B Cvt. Pfd	04/22/20, 06/17/21		6,900,000		2.40			6,900,000
ImmuneID, Inc. Series A Cvt. Pfd	04/28/21		2,044,520		2.00			2,040,000
Impact Biomedicines Milestone Interest	07/20/10		0		2,379,737.00			2,379,737
InnovaCare, Inc. Escrow Shares Common	12/21/12†		96,109		0.63			139,911
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		3.38			1,423,015
Neurovance Milestone Interest	03/20/17		4,917,880		6,169,870.00			6,169,870
Oculis SA
Series B2 Cvt. Pfd	01/16/19		2,335,688		10.64			2,952,004
Series C Cvt. Pfd	04/07/21		801,905		10.64			801,905
Parthenon Therapeutics, Inc Series A Cvt. Pfd	08/12/21		2,092,307		3.96			2,092,307
Priothera Ltd. Series A Cvt. Pfd	10/07/20		1,098,203		11.58			1,081,123
Pyxis Oncology, Inc. Series B Cvt. Pfd	03/05/21		4,085,009		1.65			4,079,999
Rainier Therapeutics Milestone Interest	09/28/21		395,493		395,493.00			395,493
Rallybio Corp. Common	03/27/20		6,912,522		15.82			12,331,966
Therachon Milestone Interest	07/01/19		2,362,765		1,362,882.00			1,362,882
Therox Milestone Interest	06/18/19		7,611		1,982.00			1,982
Vectivbio Holding AG Common	07/01/19, 04/09/21†		2,252,143		6.95			3,250,294
		$	83,353,235				$	89,116,826

(#) 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

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Trustees of Tekla Healthcare Investors:

Opinion on the Financial Statements and Financial Highlights

We have audited the accompanying statement of assets and liabilities of Tekla Healthcare Investors (the "Fund"), including the schedule of investments, as of September 30, 2021, the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, the financial highlights for each of the five years in the period then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of September 30, 2021, and the results of its operations 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.

Basis for Opinion

These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on the Fund's financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of September 30, 2021 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.

DELOITTE & TOUCHE LLP
Boston, Massachusetts
November 19, 2021

We have served as the auditor of one or more Tekla investment companies since 2004.

Name, Address¹, Date of Birth, Length of Time Served, Principal Occupation(s) During Past 5 Years and Other Directorship Held	Position(s) Held with Fund, Term of Office²	Number of Portfolios in Fund Complex Overseen by Trustee
Jeffrey A. Bailey, Born: 4/1962	Trustee since 2020	4
CEO, IlluminOss Inc. (2018-2020); Board Chairman, Aileron Therapeutics Inc. (since 2018); Director, Madison Vaccines, Inc. (since 2018); Director, BioDelivery Systems, Inc. (since 2020).
Rakesh K. Jain, Ph.D., Born: 12/1950	Trustee since 2007	4
Director, Steele Lab of Tumor Biology at Massachusetts General Hospital (since 1991); A.W. Cook Professor of Tumor Biology (Radiation Oncology) at Harvard Medical School (since 1991); Ad hoc Consultant/Scientific Advisory Board Member for pharmaceutical/biotech companies (various times since 2002); Ad hoc Consultant, Gershon Lehman Group (since 2004); Director, Co-Founder, XTuit Pharmaceuticals, Inc. (2012-2018).
Thomas M. Kent, CPA, Born: 6/1953	Trustee since 2017	4
Director, Principal Global Investors Trust Co. (since 2014); Trustee, Thayer Academy (2009-2018); Director, New England Canada Business Council (since 2017).
Oleg M. Pohotsky, M.B.A., J.D., Born: 3/1947	Trustee since 2000 Chairman since 2012	4
Consultant and Managing Partner, Right Bank Partners (since 2002); Adviser, Board Advisers, Kaufman & Co. LLC (since 2008); Director, AvangardCo Investments Holdings (since 2011); Director, The New America High Income Fund, Inc. (since 2013).
William S. Reardon, M.B.A., Born: 6/1946	Trustee since 2010	4
Independent Consultant (since 2002); Director, Idera Pharmaceuticals, Inc (2002-2019); Director, Synta Pharmaceuticals, Inc. (2004-2016).

INTERESTED TRUSTEE

Daniel R. Omstead, Ph.D.³, Born: 7/1953				President since 2001 Trustee since 2003					4
President of the Fund (since 2001), Tekla Life Sciences Investors (HQL) (since 2001), Tekla Healthcare Opportunities Fund (THQ) (since 2014), Tekla World Healthcare Fund (THW) (since 2015); President, Chief Executive Officer and Managing Member of Tekla Capital Management LLC (since 2002); Director: Hotspot Therapeutics, Inc. (since 2021); IlluminOss Medical, Inc. (2011-2020); Magellan Diagnostics, Inc. (2006-2016); Dynex Corporation (2011-2017); Insightra Medical, Inc. (2015-2016); Neurovance, Inc. (2015-2017); EBI Life Sciences, Inc. (2015-2017); Euthymics Biosciences, Inc. (2015-2017); Veniti, Inc. (2015-2018); Joslin Diabetes Center (2016-2019); Decipher BioSciences, Inc. (2016-2018).

¹The Address for each Trustee is: c/o Tekla Healthcare Investors, 100 Federal Street, 19th Floor, Boston, Massachusetts, 02110, 617-772-8500.

²Each Trustee currently is serving a three year term.

³Trustee considered to be an "interested person" within the meaning of the Investment Company Act of 1940, as amended (the "1940 Act"), through position or affiliation with the Adviser.

ANNUAL MEETING REPORT: An Annual Meeting of Shareholders was held on June 10, 2021. Shareholders voted to elect Trustees of the Fund to hold office for a term of three years or until their respective successors shall have been duly elected and qualified. The following votes were cast with respect to each of the nominees:

	For		Withheld
Thomas M. Kent, CPA		35,979,945		1,057,576
Daniel R. Omstead, Ph.D.		35,963,500		1,074,021

Thomas M. Kent and Daniel R. Omstead, Ph.D. were elected to serve until the 2024 Annual Meeting.

Trustees serving until the 2022 Annual Meeting are Oleg M. Pohotsky and William S. Reardon.

Trustees serving until the 2023 Annual Meeting are Rakesh K. Jain, Ph.D. and Jeffrey A. Bailey.

Shareholders ratified the appointment of Deloitte & Touche LLP as the independent registered public accountants of the Fund for the fiscal year ending September 30, 2021 by the following votes:

For				Against/ Withhold				Abstain
	36,382,316				250,513				404,691

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.

FEDERAL TAX INFORMATION (unaudited): Certain information for the Fund is required to be provided to shareholders based on the Fund's income and distributions for the taxable year ended December 31, 2021. In February 2022, shareholders will receive Form 1099-DIV, which will include their share of qualified dividends and capital gains and return of capital distributed during the calendar year 2021. Shareholders are advised to check with their tax advisors for information on the treatment of these amounts on their individual tax returns.

For corporate shareholders, 35.89% of ordinary income dividends paid by the Fund qualified for the dividends received deduction for the year ended September 30, 2021.

Under Section 854(b)(2) of the Code, the Fund designated $6,365,914 as qualified dividends for the year ended September 30, 2021.

DISTRIBUTION POLICY: The Fund has a managed distribution policy as described in the Notes to Financial Statements. For more information contact your financial adviser.

SHARE REPURCHASE PROGRAM: In March 2021, the Trustees reauthorized 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, 2022.

PORTFOLIO MANAGEMENT: Daniel R. Omstead, Ph.D., Jason C. Akus, M.D./M.B.A., Timothy Gasperoni, M.B.A., Ph.D., Ashton L. Wilson, Christopher Abbott, Robert Benson, Richard Goss, Jack Liu, M.B.A., Ph.D., Christopher Seitz, M.B.A., Kelly Girskis, Ph.D., and Loretta Tse, Ph.D. are members of a team that analyzes investments on behalf of the Fund. Dr. Omstead exercises ultimate decision making authority with respect to investments.

INVESTMENT OBJECTIVE, POLICIES AND
RISK FACTORS

The following information in this annual report is a summary of certain information about the Fund and changes since September 30, 2020. This information may not reflect all of the changes that have occurred since you purchased the Fund.

Changes to the Fund's Investment Policies During the Prior Fiscal Year

The following information is a summary of certain changes to the Fund's Investment Policies since September 30, 2020 and may not reflect all of the changes that have occurred since you purchased this Fund:

The Fund's Investment Policies were updated to remove the statement from the Fund's "Put or Call Option Strategy" that "Under normal market conditions, the Trust does not intend to engage in the practices described in this section to any significant extent."

Investment Objective and Policies

The Fund's investment objective is to seek long-term capital appreciation by investing primarily in equity and related securities (including securities subject to legal or contractual restrictions on resale) of U.S. and foreign companies principally engaged in the healthcare industries ("Healthcare Companies").

In an effort to achieve its investment objective, the Fund will invest primarily in securities of U.S. and foreign companies that are generally believed by the Investment Adviser to have significant potential for above-average long-term growth in revenues and earnings. The Investment Adviser expects that such companies generally will possess some or all of the following characteristics, in the Investment Adviser's judgment: current or anticipated strong market position for their services or products, experienced business management, recognized technological expertise, and the ability either to generate funds internally to finance growth or to secure outside sources of capital. For companies with earnings, the Investment Adviser generally will attempt to invest in securities that sell at price-earnings ratios or at multiples of underlying asset or potential values which, have upside potential.

The Fund may invest in securities of emerging growth Healthcare Companies, which may offer limited products or services or which are at the research and development stage with no marketable or approved products or technologies. The Fund also may invest in securities of large, well-known companies with existing products in the healthcare industries that are believed by the Investment Adviser to be undervalued in relation to their long-term growth potential or asset value.

The Fund also may invest up to 40% of its net assets in venture capital or other securities that are subject to legal or contractual restrictions on resale ("Restricted Securities").

The Fund also 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 traded in foreign markets ("Foreign Securities"). The Fund may buy and sell currencies for the purpose of settlement of transactions in Foreign Securities.

Under normal market conditions, the Fund expects to invest at least 80% of its net assets in securities of Healthcare Companies. This policy may not be changed without 60 days' prior notice to the Fund's shareholders (the "shareholders"). The Fund is required, except for temporary defensive purposes, to invest at least 25% of its net assets in such companies. For purposes of satisfying the foregoing requirements, a company will be deemed to be a Healthcare Company if, at the time the Fund makes an investment therein, 50% or more of such company's sales, earnings or assets arise from or are dedicated to, or are expected to arise from or be dedicated to, healthcare products or services or medical technology activities. Determinations as to whether a company is a Healthcare Company will be made by the Investment Adviser in its discretion.

The equity and related securities in which the Fund may invest consist of common stock of Healthcare Companies and, to a lesser extent, of preferred stock, convertible debt, limited partnership interests and warrants or other rights to acquire common or preferred stocks of such companies. The Fund's investments in venture capital opportunities, which are considered Restricted Securities, will be made primarily in convertible preferred stock. The Fund may also purchase non-convertible debt securities in connection with its venture capital investments, and otherwise when the Investment Adviser believes that such investments would be consistent with the Fund's investment objective. While these debt investments typically will not be rated, the Investment Adviser believes that, in light of the risk characteristics associated with investments in emerging growth companies (see "Risk Factors"), if such investments were to be compared with investments rated by S&P or Moody's, they may be rated as low as "C" in the rating categories established by S&P and Moody's. Such securities are commonly referred to as "junk bonds" and are considered, on balance, as predominantly speculative.

Put or Call Options

The Fund may purchase and sell (or write) put or call options on any security in which it is permitted to invest or on any index of securities or other index the change in value of which has a high degree of correlation with the changes in value of the Fund's portfolio securities, and may purchase and sell (or write) on a covered basis financial futures contracts and options on such futures.

Changes to Risk Factors During the Prior Fiscal Year

There have been no material changes to the Fund's Risk Factors since September 30, 2020.

Risk Factors

Investing in any investment company security involves risk, including the risk that you may receive little or no return on your investment or even that you may lose part or all of your investment. Investors should consider the following Risk Factors and special considerations associated with investing in the Fund's shares.

Portfolio Market Risk. 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. The price of an equity security of an issuer may be particularly sensitive to general movements in the stock market, or a drop in the stock market may depress the price of most or all of the equity securities held by the Fund. In addition, equity securities held by the Fund may decline in price if the issuer fails to make anticipated distributions or dividend payments because, among other reasons, the issuer experiences a decline in its financial condition. As a result, the value of an investment in the Fund's shares will fluctuate with the market. You could lose some or all of your investment over short or long periods of time.

Political and economic news can influence market-wide 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.

Instability in the financial markets has led the U.S. government and certain foreign governments to take a number of unprecedented actions designed to support certain financial institutions and segments of the financial markets that have experienced extreme volatility, and in some cases a lack of liquidity, including through direct purchases of equity and debt securities. Federal, state, and foreign governments, their regulatory agencies or self-regulatory organizations may take actions that affect the regulation of the issuers in which the Fund invests in ways that are unforeseeable. Legislation or regulation may also change the way in which the Fund is regulated. Such legislation or regulation could limit or preclude the Fund's ability to achieve its investment objective

The value of your investment in the Fund is based on the market prices of the securities the Fund holds. The increasing interconnectivity between global economies and financial markets increases the likelihood that events or conditions in one region or financial market may adversely impact issuers in a different country, region or financial market. Securities in the Fund's portfolio may underperform due to inflation (or expectations for inflation), interest rates, global demand for particular products or resources, natural/environmental disasters, pandemics, epidemics, cyber-attacks, terrorism, regulatory events and governmental or quasi-governmental actions. The occurrence of global events, such as terrorist attacks around the world, natural disasters, social and political discord or debt crises and downgrades, among others, may result in market volatility and may have long term effects on both the U.S. and global financial markets. A disruption of financial markets or other terrorist attacks could adversely affect Fund service providers and/or the Fund's operations as well as interest rates, secondary trading, credit risk, inflation and other factors relating to the shares. The Fund cannot predict the effects or likelihood of similar events in the future on the U.S. and world economies, the value of the shares or the NAV of the Fund.

Social, political, economic and other conditions and events, such as natural/environmental disasters, health emergencies (e.g., epidemics and pandemics), cyber-attacks, terrorism, conflicts and social unrest, may occur and could significantly impact issuers, industries, governments and other systems, reduce consumer demand or economic output, result in market closures, travel restrictions or quarantines, and generally have a significant impact on the economies and financial markets and the Investment Adviser's investment advisory activities and services of other service providers, which in turn could adversely affect the Fund's investments and other operations. These types of events

quickly and significantly impact markets in the U.S. and across the globe leading to extreme market volatility and disruption. The extent and nature of the impact on supply chains or economies and markets from these events is unknown, particularly if a health emergency or other similar event, such as the COVID-19 outbreak, persists for an extended period of time. The value of the Fund's investment may decrease as a result of such events, particularly if these events adversely impact the operations and effectiveness of the Investment Adviser or key service providers or if these events disrupt systems and processes necessary or beneficial to the investment advisory or other activities on behalf the Fund.

Security Market Risk—Discount to NAV. Market price risk is a risk separate and distinct from the risk that the Fund's NAV will decrease. The Fund's shares have traded in the market below NAV per share (a discount), at NAV per share and above NAV per share (premium) since the commencement of the Fund's operations. There can be no assurance that the Fund's shares will trade at a premium in the future, or that any such premium will be sustainable. The Fund cannot predict whether the shares will trade in the future at, above or below their NAV.

Non-Diversification Risk. The Fund is non-diversified, meaning that the Fund is permitted to invest more of its assets in fewer issuers than "diversified" funds. Thus, the Fund may be more susceptible to adverse developments affecting any single issuer held in its portfolio, and may be more susceptible to greater losses because of these developments.

Selection Risk. 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.

Concentration in the Healthcare Industries. Under normal market conditions, the Fund expects to invest primarily in securities of Healthcare Companies representing a small number of industries and to invest at least 25% of its net assets in securities of Healthcare Companies. As a result, the Fund's portfolio may be more sensitive to, and possibly more adversely affected by, regulatory, economic or political factors or trends relating to the healthcare industries than a portfolio of companies representing a larger number of industries. This risk is in addition to the risks normally associated with any strategy seeking capital

appreciation by investing in a portfolio of equity securities. As a result of its concentration policy, the Fund's investments may be subject to greater risk and market fluctuation than a fund that has securities representing a broader range of investments. The healthcare industries can be volatile. The Fund may occasionally make investments in a company with the objective of controlling or influencing the management and policies of that company, which could potentially make the Fund more susceptible to declines in the value of the company's stock. The Investment Adviser may seek control in public companies only occasionally and most often in companies with a small capitalization.

Healthcare Companies have in the past been characterized by limited product focus, rapidly changing technology and extensive government regulation. In particular, technological advances can render an existing product, which may account for a disproportionate share of a company's revenue, obsolete. Obtaining governmental approval from U.S. governmental agencies such as the Food and Drug Administration (the "FDA"), and from non-U.S. governmental agencies for new products can be lengthy, expensive and uncertain as to outcome. Such delays in product development may result in the need to seek additional capital, potentially diluting the interests of existing investors such as the Fund. In addition, governmental agencies may, for a variety of reasons, restrict the release of certain innovative technologies of commercial significance, such as genetically altered material. These various factors may result in abrupt advances and declines in the securities prices of particular companies and, in some cases, may have a broad effect on the prices of securities of companies in particular healthcare industries.

A concentration of investments in any healthcare industry or in Healthcare Companies generally may increase the risk and volatility of an investment company's portfolio. Such volatility is not limited to the biotechnology industry, and companies in other industries may be subject to similar abrupt movements in the market prices of their securities. No assurance can be given that future declines in the market prices of securities of companies in the industries in which the Fund may invest will not occur, or that such declines will not adversely affect the NAV or the price of the shares.

Intense competition exists within and among certain healthcare industries, including competition to obtain and sustain proprietary technology protection. Healthcare Companies can be highly dependent on the strength of patents, trademarks and other intellectual property rights for maintenance of profit

margins and market share. The complex nature of the technologies involved can lead to patent disputes, including litigation that could result in a company losing an exclusive right to a patent. Competitors of Healthcare Companies, particularly of the emerging growth Healthcare Companies in which the Fund may invest, may have substantially greater financial resources, more extensive development, manufacturing, marketing and service capabilities, and a larger number of qualified managerial and technical personnel. Such competitors may succeed in developing technologies and products that are more effective or less costly than any that may be developed by Healthcare Companies in which the Fund invests and may also prove to be more successful in production and marketing. Competition may increase further as a result of potential advances in health services and medical technology and greater availability of capital for investment in these fields.

With respect to healthcare industries, cost containment measures already implemented by national governments, state or provincial governments and the private sector have adversely affected certain sectors of these industries. The implementation of the Affordable Care Act ("ACA") has created increased demand for healthcare products and services, but potential changes to the ACA and future healthcare laws and regulations may impact demand for healthcare products and services and has had or may have an adverse effect on some companies in the healthcare industries. Increased emphasis on managed care in the United States and a shift toward value based payment models may put pressure on the price and usage of products sold by Healthcare Companies in which the Fund may invest and may adversely affect the sales and revenues of Healthcare Companies.

Product development efforts by Healthcare Companies may not result in commercial products for many reasons, including, but not limited to, failure to achieve acceptable clinical trial results, limited effectiveness in treating the specified condition or illness, harmful side effects, failure to obtain regulatory approval, and high manufacturing costs. Even after a product is commercially released, governmental agencies may require additional clinical trials or change the labeling requirements for products if additional product side effects are identified, which could have a material adverse effect on the market price of the securities of those Healthcare Companies.

Certain Healthcare Companies in which the Fund may invest may be exposed to potential product liability risks that are inherent in the testing, manufacturing,

marketing and sale of pharmaceuticals, medical devices or other products. A product liability claim may have a material adverse effect on the business, financial condition or securities prices of a company in which the Fund has invested.

All of these factors as well as others may cause the value of the Fund's shares to fluctuate significantly over relatively short periods of time.

Risks Associated with Regulatory and Policy Changes. At any time after the date hereof, U.S. and non-U.S. governmental agencies and other regulators may implement additional regulations and legislators may pass new laws that affect the investments held by the Fund, the strategies used by the Fund or the level of regulation or taxation applying to the Fund. These regulations and laws impact the investment strategies, performance, costs and operations of the Fund, as well as the way investments in, and shareholders of, the Fund are taxed. In particular, changes to U.S. healthcare policy could affect the Fund and its investments. The affordability of healthcare in the U.S. will remain a topic of debate, and proposals, laws and regulations to reduce the costs of healthcare products and services could adversely impact healthcare companies that the Fund invests in.

Investment in Emerging Growth Companies. The Fund may invest in equity securities of emerging growth Healthcare Companies. While these securities offer the opportunity for significant capital gains, such investments also involve a degree of risk that can result in substantial losses. There can be no assurance that securities of start-up or emerging growth companies will, in the future, yield returns commensurate with their associated risks.

Liquidity of Portfolio Investments. The Fund may invest in securities that are traded in the over-the-counter markets or on regional stock exchanges where the low trading volume of a particular security may result in abrupt and erratic price movements or that are not traded in any market. An investment in such securities may have limited liquidity, and the Fund may find it necessary to sell at a discount from recent prices or to sell over extended periods of time when disposing of such securities. In addition, the Fund may invest up to 40% of its net assets in Restricted Securities, which by their terms are illiquid. In many cases, Restricted Securities in which the Fund may invest cannot be sold except in a public offering registered under the Securities Act of 1933, as amended, pursuant to an exemption from the Securities Act or in compliance with applicable Securities and Exchange Commission regulations.

Venture Capital Investments Risk. The Fund may occasionally invest in venture capital opportunities. While these securities offer the opportunity for significant capital gains, such investments also involve a degree of risk that can result in substantial losses. Some of the venture capital opportunities in which the Fund may invest are expected to be companies that are in a "start-up" stage of development, have little or no operating history, operate at a loss or with substantial variations in operating results from period to period, have limited products, markets, financial resources or management depth, or have the need for substantial additional "follow-on" capital to support expansion or to achieve or maintain a competitive position. Such additional investments may dilute the interests of prior investors, such as the Fund. Some of these companies may be emerging companies at the research and development stage with no marketable or approved products or technology. There can be no assurance that securities of start-up or emerging growth companies will, in the future, yield returns commensurate with their associated risks.

These investments, which are considered Restricted Securities, will be made primarily in convertible preferred stock. The Fund may also purchase non-convertible debt securities in connection with its venture capital investments, and otherwise when the Investment Adviser believes that such investments would be consistent with the Fund's investment objective. While these debt investments typically will not be rated, the Investment Adviser believes that, in light of the risk characteristics associated with investments in emerging growth companies, if such investments were to be compared with investments rated by S&P or Moody's, they may be rated as low as "C" in the rating categories established by S&P and Moody's. Such securities are commonly referred to as "junk bonds" and are considered, on balance, as predominantly speculative.

Restricted Securities and Valuation Risk. Some of the Fund's investments are subject to restrictions on resale and generally have no established trading market or are otherwise illiquid with little or no trading activity. The valuation process requires an analysis of various factors. The Fund's fair value methodology includes the examination of, among other things, (i) the existence of any contractual restrictions on the disposition of the securities; (ii) information obtained from the issuer which may include an analysis of the company's financial statements, the company's products or intended markets, or the company's technologies; and (iii) the price of a security sold at arm's length in an issuer's subsequent completed round of financing. As there is typically no readily available market value for some of the Restricted Securities in the Fund's

portfolio, such Restricted Securities in the Fund's portfolio are valued at fair value as determined in good faith by or under the direction of the Board pursuant to the Fund's valuation policy and a consistently applied valuation process. Because of the inherent uncertainty of determining the fair value of investments that do not have a readily available market value, the fair value of the Fund's investments determined in good faith by the Board may differ significantly from the values that would have been used had a ready market existed for the investments, and the differences could be material. There is no single standard for determining fair value in good faith. As a result, determining fair value requires that judgment be applied to the specific facts and circumstances of each portfolio investment, while employing a consistently applied valuation process for the types of investments the Fund makes.

Foreign Securities Risk. The Fund may invest up to 20% of its net assets in Foreign Securities. Foreign Securities involve special risks that are not typically associated with U.S. dollar denominated or quoted securities of U.S. issuers. Foreign Securities may be affected by changes in currency rates, changes in foreign or U.S. laws or restrictions applicable to such investments and changes in exchange control regulations (e.g., currency blockage). A decline in the exchange rate of the currency (i.e., weakening of the currency against the U.S. dollar) in which a portfolio security is quoted or denominated relative to the U.S. dollar would reduce the value of the portfolio security. In addition, if the currency in which the Fund receives dividends, interest or other payments declines in value against the U.S. dollar before such income is distributed as dividends to Shareholders or converted to U.S. dollars, the Fund may have to sell portfolio securities to obtain sufficient cash to pay such dividends.

Brokerage commissions, custodial services and other costs relating to investment in international securities markets generally are more expensive than in the United States. In addition, clearance and settlement procedures may be different in foreign countries and, in certain markets, such procedures have been unable to keep pace with the volume of securities transactions, thus making it difficult to conduct such transactions.

Foreign issuers are not generally subject to uniform accounting, auditing and financial reporting standards comparable to those applicable to U.S. issuers. There may be less publicly available information about a foreign issuer than about a U.S. issuer. In addition, there is generally less government regulation of foreign markets, companies and securities dealers than in the United States,

and the legal remedies for investors may be more limited than the remedies available in the United States. Foreign securities markets may have substantially less volume than U.S. securities markets and securities of many foreign issuers are less liquid and more volatile than securities of comparable domestic issuers. Furthermore, with respect to certain foreign countries, there is a possibility of nationalization, expropriation or confiscatory taxation, imposition of withholding or other taxes on dividend or interest payments (or, in some cases, capital gains distributions), limitations on the removal of funds or other assets from such countries, and risks of political or social instability or diplomatic developments which could adversely affect investments in those countries. Adverse diplomatic developments may include the imposition of economic or trade sanctions or other measures by the U.S. or other governments and supranational organizations or changes in trade policies. These developments may, among other things, limit the ability of the Fund to invest in certain securities or require the disposition of an investment.

Key Personnel Risk. There may be only a limited number of securities professionals who have comparable experience to that of the Fund's existing portfolio management team in the area of Healthcare Companies. If one or more of the team members dies, resigns, retires or is otherwise unable to act on behalf of the Investment Adviser, there can be no assurance that a suitable replacement could be found immediately.

Concentration of Investments. The Fund may from time to time concentrate its investments in a few issuers and take large positions in those issuers. As a result, the Fund may be subject to a greater risk of loss than an investment company that diversifies its investments more broadly. Taking larger positions is also likely to increase the volatility of the Fund's NAV reflecting fluctuation in the value of its large holdings. The Fund may make investments in any company with the objective of controlling or influencing the management and policies of that company. Investing for the purpose of controlling or influencing the management and policies of a company could potentially make the Fund less diversified and more susceptible to declines in the value of the company's stock. The Investment Adviser may seek a control position in private venture capital investments where the Investment Adviser believes its knowledge and experience will be of significant benefit to the invested company and, therefore, to the Fund's investment. The Investment Adviser expects to seek control in public companies only occasionally and most often in companies with a small capitalization.

Anti-Takeover Provisions Risk. The Fund's Amended and Restated Declaration of Trust ("Declaration of Trust"), dated April 21, 1987, as amended, has provisions that could have the effect of limiting the ability of other entities or persons to (1) acquire control of the Fund, (2) cause it to engage in certain transactions, or (3) modify its structure. The By-Laws also contain provisions regarding qualifications for nominees for Trustee positions, advance notice of shareholder proposals, and requirements for the call of special shareholder meetings. These provisions may be considered "anti-takeover" provisions.

Related Party Transactions Risk. The majority of the Board is unaffiliated with the Investment Adviser; nevertheless, the Fund may be subject to certain potential conflicts of interest. Although the Fund has no obligation to do so, it may place brokerage orders with brokers who provide supplemental investment research and market and statistical information about Healthcare Companies and the healthcare industries. In addition, other investment companies advised by the Investment Adviser may concurrently invest with the Fund in Restricted Securities under certain conditions. The Fund also may invest, subject to applicable law, in companies in which the principals of the Investment Adviser or Trustees of the Fund have invested, or for which they serve as directors or executive officers. The Investment Company Act prohibits the Fund from engaging in certain transactions involving its "affiliates," including, among others, the Fund's Trustees, officers and employees, the Investment Adviser and any "affiliates" of such affiliates except pursuant to an exemptive order or the provisions of certain rules under the Investment Company Act. In the view of the staff of the Commission, other investment companies advised by the Investment Adviser may, in some instances, be viewed to be affiliates of the Fund. Such legal restrictions and delays and costs involved in obtaining necessary regulatory approvals may preclude or discourage the Fund from making certain investments and no assurance can be given that any exemptive order sought by the Fund will be granted.

The Investment Adviser's investment team is responsible for managing the Fund as well as three other closed-end investment companies. In the future, the investment team may manage other funds and accounts, including proprietary accounts, separate accounts and other pooled investment vehicles, such as unregistered hedge funds. In the future, a portfolio manager may manage a separate account or other pooled investment vehicle which may have materially higher fee arrangements than the Fund and may also have a performance-based fee. The side-by-side management of these funds or accounts may raise

The Registrant’s Board of Trustees has determined that the Registrant has at least one audit committee financial expert serving on its audit committee. The audit committee financial expert is William S. Reardon. He is “independent” for the purposes of Item 3.

Pursuant to the Registrant’s Audit Committee Charter (“Charter”), the Audit Committee is responsible for approving in advance the firm to be employed as the Registrant’s independent auditor. In addition, the Charter provides that the Audit Committee is responsible for approving any and all proposals by the Registrant, its investment adviser or their affiliated persons or any entity controlling, controlled by, or under common control with the adviser that provides services to the Registrant to employ the independent auditor to render permissible non-audit services related directly to the operations and financial reporting of the Registrant. In determining whether to pre-approve non-audit services, the Audit Committee considers whether such services are consistent with the independent auditor’s independence. The Charter further permits the Audit Committee to delegate to one or more of its members authority to pre-approve permissible non-audit services to the registrant, provided that any pre-approval determination of a delegate is for services with an estimated budget of less than $15,000.

(2) None of the services described in each of paragraphs (b) through (d) of this Item were approved by the Audit Committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.All services described in paragraphs (b) through (d) of the NCSR were approved in advance by the Audit Committee of each Fund.

The Registrant has a separately-designated standing Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). The members of the Audit Committee are Jeffrey A. Bailey, Thomas M. Kent and William S. Reardon.

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.

The following are the policies and procedures adopted and implemented by Tekla Capital Management LLC (“TCM”) for voting proxies with respect to portfolio securities held by Tekla Healthcare Investors, Tekla Life Sciences Investors, Tekla Healthcare Opportunities Fund and Tekla World Healthcare Fund (each a “Fund” and collectively the “Funds”). The policies and procedures are reasonably designed to ensure that proxies are voted in the best interest of the Funds and the Funds’ shareholders, in accordance with TCM’s fiduciary duties and Rule 206(4)-6 under the Investment Advisers Act of 1940 (the “Investment Advisers Act”). TCM considers the “best interests” of the Funds and their shareholders to mean their best long-term economic interests.

TCM shall vote proxies for the exclusive benefit, and in the best economic interest, of the Funds and their shareholders. Such exercise of voting rights shall be subject to the same standard of care as is generally applicable to TCM’s performance of its duties, as set forth in the advisory agreements with the Funds. The policies and procedures contained herein are designed to be guidelines, however each vote is ultimately cast on a case-by-case basis, taking into consideration the relevant facts and circumstances at the time of the vote. Any material conflicts that may arise will be resolved in the best interests of the Funds and their shareholders.

A proxy committee has been designated and is responsible for administering and overseeing the proxy voting process. The committee consists of the President of TCM, TCM’s Chief Compliance Officer (“CCO”), and the analyst responsible for oversight of the company that is the subject of the proxy. The committee considers proxy questions and determines the vote on behalf of the Funds.

TCM’s CCO shall be responsible for maintaining the proxy log, monitoring corporate actions and confirming the timely voting of proxies. The proxy log shall contain the following information, in accordance with Form N-PX:

TCM’s CCO shall also record whether any conflicts of interest have been identified and, if so, what action was taken to resolve the conflict with respect to each vote cast and each abstention.

TCM’s substantive voting decisions turn on the particular facts and circumstances of each proxy vote. The following is a list of common proxy vote issues and TCM’s standard considerations when determining how to vote such proxies.

Routine Matters/Corporate Administrative Items. After an initial review, TCM generally votes with management on routine matters related to the operation of the issuer that are not expected to have a significant economic impact on the issuer and/or its shareholders.

Potential for Major Economic Impact. TCM may review and analyze on a case-by-case basis, non-routine proposals that are more likely to affect the structure and operation of the issuer and to have a greater impact on the value of the investment.

Corporate Governance. TCM may review and consider corporate governance issues related to proxy matters and generally supports proposals that foster good corporate governance practices.

Special Interest Issues. TCM may consider: (i) the long-term benefit to shareholders of promoting corporate accountability and responsibility on social issues; (ii) management’s responsibility with respect to special interest issues; (iii) any economic costs and restrictions on management; and (iv) the responsibility of TCM to vote proxies for the greatest long-term shareholder value.

Limitations on Director Tenure and Retirement. TCM may consider: (i) a reasonable retirement age for directors, e.g. 70 or 72; (ii) the introduction of new perspectives on the board; and (iii) the arbitrary nature of such limitations and the possibility of detracting from the board’s stability and continuity.

Directors’ Minimum Stock Ownership. TCM may consider: (i) the benefits of additional vested interest; (ii) the ability of a director to serve a company well regardless of the extent of his or her share ownership; and (iii) the impact of limiting the number of persons qualified to be directors.

D&O Indemnification and Liability Protection. TCM may consider: (i) indemnifying directors for acts conducted in the normal course of business; (ii) limiting liability for monetary damages for violating the duty of care; (iii) expanding coverage beyond legal expenses to acts that represent more serious violations of fiduciary obligation than carelessness (e.g. negligence); and (iv) providing expanded coverage in cases when a director’s legal defense was unsuccessful if the director was found to have acted in good faith and in a manner that he or she reasonably believed was in the best interests of the issuer.

Director Nominations in Contested Elections. TCM may consider: (i) long-term financial performance of the issuer relative to its industry; (ii) management’s track record; (iii) background to proxy contest; (iv) qualifications of both slates of nominees; (v) evaluations of what each side is offering shareholders as well as the likelihood that the proposed objectives and goals can be met; and (vi) stock ownership positions.

Cumulative Voting. TCM may consider: (i) the ability of significant stockholders to elect a director of their choosing; (ii) the ability of minority shareholders to concentrate their support in favor of a director or directors of their choosing; and (iii) the potential to limit the ability of directors to work for all shareholders.

Classified Boards. TCM may consider: (i) providing continuity; (ii) promoting long-term planning; and (iii) guarding against unwanted takeovers.

Poison Pills. TCM may consider: (i) TCM’s position on supporting proposals to require a shareholder vote on other shareholder rights plans; (ii) ratifying or redeeming a poison pill in the interest of protecting the value of the issuer; and (iii) other alternatives to prevent a takeover at a price demonstrably below the true value of the issuer.

Fair Price Provisions. TCM may consider: (i) the vote required to approve the proposed acquisition; (ii) the vote required to repeal the fair price provision; (iii) the mechanism for determining fair price; and (iv) whether these provisions are bundled with other anti-takeover measures (e.g., supermajority voting requirements) that may entrench management and discourage attractive tender offers.

Equal Access. TCM may consider: (i) the opportunity for significant shareholders of the issuer to evaluate and propose voting recommendations on proxy proposals and director nominees, and to nominate candidates to the board; and (ii) the added complexity and burden.

Charitable Contributions. TCM may consider: (i) the potential benefits to shareholders; (ii) the potential to detract the issuer’s resources from more direct uses of increasing shareholder value; and (iii) the responsibility of shareholders to make individual contributions.

Stock Authorizations: TCM may consider: (i) the need for the increase; (ii) the percentage increase with respect to the existing authorization; (iii) voting rights of the stock; and (iv) overall capitalization structures.

Preferred Stock. TCM may consider: (i) whether the new class of preferred stock has unspecified voting, conversion, dividend distribution, and other rights; (ii) whether the issuer expressly states that the stock will not be used as a takeover defense or carry superior voting rights; (iii) whether the issuer specifies the voting, dividend, conversion, and other rights of such stock and the terms of the preferred stock appear reasonable; and (iv) whether the stated purpose is to raise capital or make acquisitions in the normal course of business.

Director Compensation. TCM may consider: (i) whether director shares are at the same market risk as those of the shareholders; and (ii) how option programs for outside directors compare with the standards of internal programs.

Golden and Tin Parachutes. TCM may consider: (i) whether they will be submitted for shareholder approval; and (ii) the employees covered by the plan and the quality of management.

Compensation. TCM may consider: (i) Whether the company has an independent compensation committee; (ii) whether the compensation committee engaged independent consultants; (iii) whether the compensation committee has lapsed or waived equity vesting restrictions; and (iv) whether the company has adopted or extended a Golden Parachute without shareholder approval. TCM will generally support annual advisory votes on executive compensation.

TCM may abstain from voting a proxy if it concludes that the effect on shareholders’ economic interests or the value of the portfolio holding is indeterminable or insignificant. TCM may abstain from voting a proxy if it concludes that the cost of voting is disproportionate to the economic impact the vote would have on the portfolio holdings. With respect to certain privately held companies, TCM may not have the opportunity to vote or may have a limitation on its ability to vote. For example, in certain cases a company may be permitted by its charter or other governing documents to take action without a shareholder meeting and with written consent of fewer than all shareholders.

The Proxy Committee identifies any potential conflicts of interest. Each potential conflict must be addressed in a manner which will be in the best interest of the Funds and their shareholders. If any potential conflict is identified the Proxy Committee consults with the Funds’ counsel. Where conflicts of interest arise between clients and TCM, TCM may convene an ad-hoc committee to debate the conflict and to give a ruling on a preferred course of action. If the ad-hoc committee determines that TCM has a conflict of interest in any instance, TCM’s CCO shall disclose the conflict to the Board and seek voting instructions.

TCM may cause the proxies to be voted in accordance with the recommendations of an independent third party service provider that TCM may use to assist in voting proxies.

The following disclosure shall be provided in connection with these policies and procedures:

TCM shall maintain records of proxies voted in accordance with Section 204-2 of the Advisers Act, including proxy statements, a record of each vote cast, and a copy of any document created by the Adviser that was material to making a decision of how to vote the proxy, or that memorializes the basis for the Adviser’s decision on how to vote the proxy. TCM shall also maintain a copy of its policies and procedures and each written request from a client for proxy voting records and the Adviser’s written response to any client request, either written or oral, for such records. Proxy statements that are filed on EDGAR shall be considered maintained by TCM. All such records shall be maintained for a period of five years in an easily accessible place, the first two years in the offices of TCM.

(a) (1) As of December 3, 2021, Daniel R. Omstead, Ph.D., Jason Akus, M.D./M.B.A., Timothy Gasperoni, M.B.A., Ph.D., Ashton Wilson, Christopher Abbott, Robert Benson, Loretta Tse, Ph.D., Richard Goss, Jack Liu, M.B.A, Ph.D., Christopher Seitz, M.B.A., and Kelly Girskis, Ph.D. are members of a team that analyzes investments on behalf of the Registrant. Dr. Omstead exercises ultimate decision making authority with respect to investments. Dr. Omstead also performs other duties including management of the investment adviser and makes investments on behalf of Tekla Life Sciences Investors (“HQL”), Tekla Healthcare Opportunities Fund (“THQ”) and Tekla World Healthcare Fund (“THW”). The date each team member joined the portfolio management team and each team member’s business experience for at least the last five years is included below.

Daniel R. Omstead, Ph.D. is President and Chief Executive Officer of the investment adviser and has been employed by the investment adviser of the Registrant since 2000. He is also President of the Registrant, HQL, THQ and THW.

Jason Akus, M.D./M.B.A. is Senior Vice President, Research of the investment adviser and is responsible for investment research and due diligence in the biotechnology, medical device, and diagnostic areas. Dr. Akus joined the investment adviser of the Registrant in 2001.

Timothy Gasperoni, M.B.A., Ph.D. is Senior Vice President, Research of the investment adviser. He was previously a Senior Analyst and Founding Member of Sabby Capital. He joined TCM in 2015.

Ashton Wilson is Senior Vice President of the investment adviser. He was previously a Vice President in equity derivative trading at Goldman Sachs and Co. and was an equity derivative trader at Bank of America Merrill Lynch. He joined TCM in 2018.

Christopher Abbott is Vice President, Research of the investment adviser. Previously, Mr. Abbott was at Leerink Partners where he was a Vice President on the Equity Research Team. He joined TCM in 2016.

Robert Benson is Vice President of the investment adviser. Previously, Mr. Benson was at State Street Global Advisors (SSgA) where he performed quantitative research for asset allocation, equities, and alternatives teams. He joined TCM in 2016.

Loretta Tse, Ph.D. is Vice President of the investment adviser. She previously ran a biotech consulting business and worked at various venture funds and start-up companies and was Managing Director at Fred Hutchinson Cancer Research Center. She joined TCM in 2015.

Richard Goss is Senior Analyst of the investment advisor. Previously, Mr. Goss was at Leerink Partners where he was a Vice President on the Large Pharma and Biotech Equity Research Teams and a Healthcare Analyst at Datamonitor. He joined TCM in 2018.

Jack Liu, M.B.A., Ph.D. is Senior Analyst of the investment adviser. He was previously a Research Analyst at Weatherbie Capital. He joined TCM in 2019.

Christopher Seitz, M.B.A. is Senior Analyst of the investment adviser. Previously, Mr. Seitz was a Healthcare Analyst Intern at Nantahala Capital Management and an Associate at Excel Venture Management. He joined TCM in 2021.

Kelly Girskis, Ph.D. is Analyst of the investment adviser. Previously, Dr. Girskis was an Equity Research Associate at SVB Leerink. She joined TCM in 2021.

(a) (2) The following table lists the number and types of other accounts and assets under management in those accounts advised by the Registrant’s portfolio management team as of the end of the Registrant’s fiscal year.

None of the funds or other accounts is subject to a performance-based advisory fee.

Each member of the portfolio management team may perform investment management services for other accounts similar to those provided to the Registrant and the investment action for each account may differ. The portfolio management team may discover an investment opportunity that may be suitable for more than one account. However, the investment opportunity may be limited so that all accounts may not be able to fully participate or an investment opportunity or investment allocation may be allocated to just one account or may be allocated between accounts at different levels based on an investment decision made by the investment team. The investment team may subsequently make investment decisions that result in investment levels that make the accounts more differentiated or, conversely, more closely or completely aligned. Such investment decisions may occur within a day or two. In addition, the investment adviser may receive different compensation from each account. In that case, the portfolio management team may have an incentive to direct investments to an account that could result in higher fees for the investment adviser. The registrant has adopted procedures designed to allocate investments fairly across multiple accounts.

Additionally, a portfolio manager may be perceived to have a conflict of interest if he has other executive management responsibilities. In addition to managing the Registrant, HQL, THQ and THW, Dr. Omstead is the President of the investment adviser of the Registrant. Dr. Omstead periodically discusses the amount of time he allocates to each of his responsibilities with the Registrant’s Board of Trustees.

The portfolio management team’s management of personal accounts may also present certain conflicts of interest. The Registrant has adopted a code of ethics designed to address these potential conflicts.

(a) (3) As of September 30, 2021, portfolio manager compensation is comprised of a base salary and discretionary compensation as described below.

Base Salary Compensation. The team members receive a base salary compensation linked to individual experience and responsibilities. The amount of base salary is reviewed annually.

Discretionary Compensation. Discretionary Compensation is in the form of a cash bonus, paid annually, which may be 50% or more of the team member’s base salary. Several factors affect discretionary compensation, which can vary by team member and circumstances. The discretionary compensation component is determined based on factors including investment performance of accounts managed by the team predominantly relative to the S&P 500 Index and a blended consideration of appropriate healthcare indicies and related performance metrics during the Fund’s fiscal year, performance of specific investments proposed by the individual, financial performance of the investment adviser and a qualitative assessment of the individual overall contribution to the investment team and to the investment adviser. Discretionary compensation is evaluated annually after the completion of the Registrant’s fiscal year.

(a) (4) As of September 30, 2021, the dollar range of Registrant’s shares beneficially owned by the portfolio managers are as follows as of the end of the Registrant’s fiscal year:

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 407(c)(2)(iv) of Regulation S-K (17 CFR229.407)(as required by Item 22(b)(15) of Schedule 14A (17 CFR240.14a-101)), or this Item.

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

(a) The following table shows the dollar amounts of income, and dollar amounts of fees and/or compensation paid, relating to the Fund’s securities lending activities during the fiscal year ended September 30, 2021.

(b) Goldman Sachs Bank USA, doing business as Goldman Sachs Agency Lending (“GSAL”) serves as securities lending agent for the Fund and in that role administers the Fund’s securities lending program pursuant to the terms of a securities lending agency agreement entered into between the Fund and GSAL.

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
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UNITED STATES	Estimated average burden hours per response. . . . . . . . . . . . . . .20.6
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

Market Price¹				$25.57
NAV²				$25.47
Premium/(Discount)				-0.39%
Average 30 Day Volume				119,930
Net Assets				$1,156,902,084
Ticker				HQH
NAV Ticker				XHQHX
Commencement of Operations Date				4/22/87
Fiscal Year to Date Distributions Per Share				$2.06

Name, Address¹, Date of Birth, Principal Occupation(s) During Past 5 Years				Position(s) Held with Fund, Term of Office²and Length of Time Served
Daniel R. Omstead, Ph.D., Born: 7/1953				President since 2001
President of the Fund, HQL (since 2001), THQ (since 2014), THW (since 2015); President, Chief Executive Officer and Managing Member of Tekla Capital Management LLC (since 2002).
Laura Woodward, CPA, Born: 11/1968				Chief Compliance Officer, Secretary and Treasurer since 2009
Chief Compliance Officer, Secretary and Treasurer of the Fund, HQL (since 2009), THQ (since 2014), THW (since 2015); Chief Compliance Officer and Vice President of Fund Administration, Tekla Capital Management LLC (since 2009); Senior Manager, PricewaterhouseCoopers LLP (1990-2009).

PORTFOLIO MANAGER		DOLLAR RANGE OF SHARES BENEFICIALLY OWNED
Daniel R. Omstead		over $1,000,000
Jason Akus		none
Timothy Gasperoni		$10,001 – $50,000
Ashton Wilson		none
Christopher Abbott		none
Robert Benson		none
Loretta Tse		none
Richard Goss		none
Jack Liu		none
Christopher Seitz		none
Kelly Girskis		none

	REGISTERED
	INVESTMENT
PORTFOLIO	COMPANY		ASSETS		POOLED		ASSETS		OTHER		ASSETS
MANAGER	ACCOUNTS		MANAGED		ACCOUNTS		MANAGED		ACCOUNTS		MANAGED
Daniel R. Omstead		3	$	2,411 million		0		0		0		0
Jason Akus		3	$	2,411 million		0		0		0		0
Timothy Gasperoni		3	$	2,411 million		0		0		0		0
Ashton Wilson		3	$	2,411 million		0		0		0		0
Christopher Abbott		3	$	2,411 million		0		0		0		0
Robert Benson		3	$	2,411 million		0		0		0		0
Loretta Tse		3	$	2,411 million		0		0		0		0
Richard Goss		3	$	2,411 million		0		0		0		0
Jack Liu		3	$	2,411 million		0		0		0		0
Christopher Seitz		3	$	2,411 million		0		0		0		0
Kelly Girskis		3	$	2,411 million		0		0		0		0

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
Month #7 (Apr. 1, 2021 – Apr. 30, 2021)									5,211,731
Month #8 (May 1, 2021 – May 31, 2021)									5,211,731
Month #9 (June 1, 2021 – June 30, 2021)									5,211,731
Month #10 (Jul. 1, 2021 – Jul. 31, 2021)									5,404,055
Month #11 (Aug. 1, 2021 – Aug. 31, 2021)									5,404,055
Month #12 (Sep. 1, 2021 – Sep. 30, 2021)									5,404,055
Total		10,250		$	20.60		—

Tekla Healthcare Investors (“HQH”)
(1)	Gross income from securities lending activities		$	69,917.65
(2)	Fees and/or compensation for securities lending activities and related services
	(a)	Fee paid for services as securities lending agent	$	10,486.44
	(b)	Collateral management expenses not included in (a)	$	0
	(c)	Administrative fees not included in (a)	$	0
	(d)	Indemnification fees not included in (a)	$	0
	(e)	Rebate (paid to borrowers)	$	0
	(f)	Other fees not included in (a)	$	0
(3)	Aggregate fees/compensation for securities lending activities		$	10,486.44
(4)	Net income from securities lending activities		$	59,431.21

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

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