UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21416
John Hancock Tax-Advantaged Dividend Income Fund
(Exact name of registrant as specified in charter)
200 Berkeley Street, Boston, Massachusetts 02116
(Address of principal executive offices) (Zip code)
Salvatore Schiavone
Treasurer
200 Berkeley Street
Boston, Massachusetts 02116
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-663-4497
Date of fiscal year end: | October 31 | |
Date of reporting period: | October 31, 2019 |
ITEM 1. REPORTS TO STOCKHOLDERS.
John Hancock
Tax-Advantaged Dividend Income Fund
Ticker: HTD
Annual report
10/31/19
Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of the fund's shareholder reports such as this one will no longer be sent by mail, unless you specifically request paper copies of the reports from the transfer agent or from your financial intermediary. Instead, the reports will be made available on our website, and you will be notified by mail each time a report is posted and be provided with a website link to access the report.
If you have already elected to receive shareholder reports electronically, you will not be affected by this change and you do not need to take any action. You may elect to receive shareholder reports and other communications electronically by calling the transfer agent, Computershare, at 800-852-0218, by going to "Communication Preferences" at computershare.com/investor, or by contacting your financial intermediary.
You may elect to receive all reports in paper, free of charge, at any time. You can inform the transfer agent or your financial intermediary that you wish to continue receiving paper copies of your shareholder reports by following the instructions listed above. Your election to receive reports in paper will apply to all funds held with John Hancock Investment Management or your financial intermediary.
Managed distribution plan
On September 19, 2016, the fund adopted a managed distribution plan (Plan). Under the Plan, the fund makes monthly distributions of an amount equal to $0.1380 per share, which will be paid monthly until further notice. The fund may make additional distributions (i) for purposes of not incurring federal income tax on investment company taxable income and net capital gain, if any, not included in such regular distributions and (ii) for purposes of not incurring federal excise tax on ordinary income and capital gain net income, if any, not included in such regular monthly distributions.
The Plan provides that the Board of Trustees of the fund may amend the terms of the Plan or terminate the Plan at any time without prior notice to the fund's shareholders. The Plan is subject to periodic review by the fund's Board of Trustees.
You should not draw any conclusions about the fund's investment performance from the amount of the fund's distributions or from the terms of the Plan. The fund's total return at NAV is presented in the Financial highlights.
With each distribution that does not consist solely of net investment income, the fund will issue a notice to shareholders and an accompanying press release that will provide detailed information regarding the amount and composition of the distribution and other related information. The amounts and sources of distributions reported in the notice to shareholders are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the fund's investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes. The fund may at times distribute more than its net investment income and net realized capital gains; therefore, a portion of your distribution may result in a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the fund is paid back to you. A return of capital does not necessarily reflect the fund's investment performance and should not be confused with "yield" or "income."
A message to shareholders
Dear shareholder,
It was a volatile time for stock investors in the United States during the 12 months ended October 31, 2019, although many segments of the market delivered attractive absolute returns for the period. Uncertainty surrounding trade with China, the impeachment inquiry against President Trump, and the broader health of the global economy led to some dramatic swings in performance. Investors, who had generally shunned riskier assets in the final months of 2018, regained their risk appetites in the first half of 2019. Despite setbacks in May and August, the markets closed the period on record highs. Against this backdrop, the U.S. Federal Reserve pivoted from raising short-term interest rates to an easing stance, cutting interest rates three times in the latter half of the period.
While the economic fundamentals in the United States appear fairly solid, with a strong labor market and a confident consumer base, there are sure to be patches of market turbulence as the year goes on, particularly if the likelihood of a recession is perceived to increase. As always, your best resource in unpredictable markets is your financial advisor, who can help position your portfolio so that it's sufficiently diversified to meet your long-term objectives and to withstand the inevitable bouts of market volatility along the way.
On behalf of everyone at John Hancock Investment Management, I'd like to take this opportunity to welcome new shareholders and thank existing shareholders for the continued trust you've placed in us.
Sincerely,
Andrew G. Arnott
President and CEO,
John Hancock Investment Management
Head of Wealth and Asset Management,
United States and Europe
This commentary reflects the CEO's views as of this report's period end and are subject to change at any time. Diversification does not guarantee investment returns and does not eliminate risk of loss. All investments entail risks, including the possible loss of principal. For more up-to-date information, you can visit our website at jhinvestments.com.
John Hancock
Tax-Advantaged Dividend Income Fund
Table of contents
2 | Your fund at a glance | |
5 | Manager's Discussion of fund performance | |
7 | Fund's investments | |
15 | Financial statements | |
19 | Financial highlights | |
20 | Notes to financial statements | |
31 | Report of independent registered public accounting firm | |
32 | Tax information | |
33 | Additional information | |
36 | Continuation of investment advisory and subadvisory agreements | |
43 | Trustees and Officers | |
47 | More information |
INVESTMENT OBJECTIVE
The fund seeks to provide a high level of after-tax total return from dividend income and capital appreciation.
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/19 (%)
The blended index is 55% ICE Bank of America Merrill Lynch Preferred Stock DRD Eligible Index and 45% S&P 500 Utilities Index.
The ICE Bank of America Merrill Lynch Preferred Stock DRD Eligible Index consists of investment-grade fixed-rate U.S. dollar-denominated preferred securities and fixed-to-floating-rate securities. The index includes securities having a minimum remaining term of at least one year, dividend received deduction (DRD) eligible preferred stock and senior debt.
The S&P 500 Utilities Index is a capitalization-weighted index that consists of companies in the S&P 500 Index that are primarily involved in water, electrical power, and natural gas distribution industries.
It is not possible to invest directly in an index. Index figures do not reflect expenses or sales charges, which would result in lower returns.
The performance data contained within this material represents past performance, which does not guarantee future results.
Investment returns and principal value will fluctuate and a shareholder may sustain losses. Further, the fund's performance at net asset value (NAV) is different from the fund's performance at closing market price because the closing market price is subject to the dynamics of secondary market trading. Market risk may be augmented when shares are purchased at a premium to NAV or sold at a discount to NAV. Current month-end performance may be higher or lower than the performance cited. The fund's most recent performance can be found at jhinvestments.com or by calling 800-852-0218.
PERFORMANCE HIGHLIGHTS OVER THE LAST TWELVE MONTHS
Income-producing securities delivered strong returns for the period
Thanks largely to a drop in interest rates, preferred securities and utility common stocks rallied strongly.
Security selection helped boost the fund's performance
Many of the fund's largest holdings across a number of industry sectorsparticularly utilitieshelped drive returns.
An interest-rate hedge was the key detractor
The fund's holdings in U.S. Treasury futures contracts detracted from performance as interest rates declined.
PORTFOLIO COMPOSITION AS OF 10/31/19 (%)
SECTOR COMPOSITION AS OF
10/31/19 (%)
A note about risks
As is the case with all exchange-listed closed-end funds, shares of this fund may trade at a discount or a premium to the fund's net asset value (NAV). An investment in the fund is subject to investment and market risks, including the possible loss of the entire principal invested. There is no guarantee prior distribution levels will be maintained, and distributions may include a substantial return of capital. The value of a company's equity securities is subject to changes in its financial condition and overall market and economic conditions. Fixed-income investments are subject to interest-rate and credit risk; their value will normally decline as interest rates rise or if an issuer, grantor, or counterparty is unable or unwilling to make principal, interest, or settlement payments. Investments in higher-yielding, lower-rated securities are subject to a higher risk of default. An issuer of securities held by the fund may default, have its credit rating downgraded, or otherwise perform poorly, which may affect fund performance. Liquiditythe extent to which a security may be sold or a derivative position closed without negatively affecting its market valuemay be impaired by reduced trading volume, heightened volatility, rising interest rates, and other market conditions. The fund's use of leverage creates additional risks, including greater volatility of the fund's NAV, market price, and returns. There is no assurance that the fund's leverage strategy will be successful. Focusing on a particular industry or sector may increase the fund's volatility and make it more susceptible to market, economic, and regulatory risks as well as other factors affecting those industries or sectors. Derivatives transactions, such as hedging and other strategic transactions, may increase a fund's volatility and could produce disproportionate losses, potentially more than the fund's principal investment. Cybersecurity incidents may allow an unauthorized party to gain access to fund assets, customer data, or proprietary information, or cause a fund or its service providers to suffer data corruption or lose operational functionality. Similar incidents affecting issuers of fund securities may negatively affect performance.
Income-producing securities generally posted very strong gains during the past 12 months, helped largely by an increasingly favorable interest-rate backdrop. In early 2019, there was a dovish shift in tone from global monetary policy makers that many investors hoped would lead the U.S. Federal Reserve (Fed) to make cuts in interest rates during the second half of this year. That's exactly what happened as the Fed cut interest rates by a quarter point each three times amid some signs of a slowdown in global economic growth and muted inflation pressures.
Against this backdrop, preferred securities and utility common stockstwo of the fund's biggest areas of emphasis among income-producing securitiesrallied strongly. Demand for both preferreds and utilitieswhose yields still outshone most other income-oriented securitiesincreased, further bolstering their prices.
Which elements of the fund's positioning helped and hurt results?
The fund's sizable weighting in the utilities sector was a key driver of performance, with some of the largest holdings in the group performing particularly well. On top of falling interest rates, utility securities were boosted by better investor enthusiasm for the group given their attractive yields and valuations. Individual contributors in this space included Entergy Corp., American Electric Power Company, Inc., and Eversource Energy, among the fund's best-performing holdings during the period.
TOP 10 ISSUERS AS OF 10/31/19 (%) |
COUNTRY COMPOSITION AS OF 10/31/19 (%) |
|||
CenterPoint Energy, Inc. | 4.6 | United States | 89.0 | |
Dominion Energy, Inc. | 4.5 | United Kingdom | 4.9 | |
The Southern Company | 3.6 | Canada | 2.7 | |
DTE Energy Company | 3.5 | Netherlands | 1.1 | |
American Electric Power Company, Inc. | 3.4 | France | 1.1 | |
PPL Corp. | 3.3 | Other countries | 1.2 | |
Morgan Stanley | 3.2 | TOTAL | 100.0 | |
Ameren Corp. | 3.0 | |||
Duke Energy Corp. | 3.0 | |||
Entergy Corp. | 2.8 | |||
TOTAL | 34.9 | |||
As a percentage of total investments. | As a percentage of total investments. | |||
Cash and cash equivalents are not included. |
In contrast, a position in U.S. Treasury futureswhich were used to offset higher interest rateswas the biggest detractor from performance as interest rates declined significantly during the period. The fund's exposure to the energy sector also detracted as oil prices trended lower amid news of slowing global economic growth.
What were some key aspects of your portfolio activity?
Some of the more notable transactions were our sales of utility common stocks, the proceeds of which we most often redeployed into more attractively valued mandatory convertible preferred securities. For example, we sold some common stock holdings in Centerpoint Energy, Inc. and Dominion Energy, Inc., and added the convertible preferred securities of those companies.
MANAGED BY
Joseph H. Bozoyan, CFA, Manulife IM (US) On the fund since 2015 Investing since 1993 |
|
Brad Lutz, CFA, Manulife IM (US) On the fund since 2017 Investing since 1992 |
|
Gregory M. McMurran, Wells Fargo Asset Management On the fund since 2009 Investing since 1976 |
|
Dennis M. Bein, CFA, Wells Fargo Asset Management On the fund since 2009 Investing since 1992 |
|
Harindra de Silva, Ph.D., CFA, Wells Fargo Asset Management On the fund since 2009 Investing since 1988 |
|
Megan N. Miller, CFA, Wells Fargo Asset Management On the fund since 2018 Investing since 2008 |
Fund’s investments |
Shares | Value | ||||
Common stocks 74.6% (51.0% of Total investments) | $708,564,744 | ||||
(Cost $441,637,259) | |||||
Communication services 3.8% | 36,236,205 | ||||
Diversified telecommunication services 3.8% | |||||
AT&T, Inc. (A) | 550,000 | 21,169,500 | |||
Verizon Communications, Inc. (A)(B) | 249,160 | 15,066,705 | |||
Consumer staples 0.9% | 8,795,520 | ||||
Tobacco 0.9% | |||||
Philip Morris International, Inc. (A) | 108,000 | 8,795,520 | |||
Energy 13.8% | 131,161,499 | ||||
Oil, gas and consumable fuels 13.8% | |||||
BP PLC, ADR (C) | 810,450 | 30,724,160 | |||
Enbridge, Inc. (A)(B) | 347,106 | 12,638,129 | |||
Equitrans Midstream Corp. (A)(B) | 720,000 | 10,022,400 | |||
Kinder Morgan, Inc. | 550,000 | 10,989,000 | |||
ONEOK, Inc. | 525,000 | 36,660,750 | |||
Royal Dutch Shell PLC, ADR, Class A | 258,000 | 14,956,260 | |||
The Williams Companies, Inc. | 680,000 | 15,170,800 | |||
Financials 1.8% | 16,854,900 | ||||
Capital markets 1.8% | |||||
Ares Management Corp., Class A | 570,000 | 16,854,900 | |||
Utilities 54.3% | 515,516,620 | ||||
Electric utilities 31.8% | |||||
Alliant Energy Corp. | 390,000 | 20,802,600 | |||
American Electric Power Company, Inc. (C) | 500,000 | 47,195,000 | |||
Avangrid, Inc. (A)(B) | 465,000 | 23,273,250 | |||
Duke Energy Corp. (A)(B) | 320,000 | 30,163,200 | |||
Entergy Corp. | 318,000 | 38,630,639 | |||
Eversource Energy | 400,000 | 33,496,000 | |||
FirstEnergy Corp. (A)(B) | 290,000 | 14,012,800 | |||
NextEra Energy, Inc. (A) | 33,718 | 8,036,348 | |||
OGE Energy Corp. (C) | 540,000 | 23,252,400 | |||
Pinnacle West Capital Corp. | 50,000 | 4,706,000 | |||
PPL Corp. (A)(B) | 590,000 | 19,759,100 | |||
The Southern Company (A)(B) | 405,000 | 25,377,300 | |||
Xcel Energy, Inc. | 207,000 | 13,146,570 | |||
Independent power and renewable electricity producers 1.4% | |||||
AES Corp. | 800,000 | 13,640,000 | |||
Multi-utilities 21.1% | |||||
Ameren Corp. (A)(B)(C) | 540,000 | 41,958,000 |
7 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Utilities (continued) | |||||
Multi-utilities (continued) | |||||
Black Hills Corp. (A)(B) | 394,775 | $31,120,113 | |||
CenterPoint Energy, Inc. (A)(B) | 880,000 | 25,581,600 | |||
Dominion Energy, Inc. (A)(B) | 400,000 | 33,020,000 | |||
DTE Energy Company (C) | 240,000 | 30,556,800 | |||
National Grid PLC, ADR | 201,583 | 11,766,400 | |||
NiSource, Inc. | 770,000 | 21,590,800 | |||
Public Service Enterprise Group, Inc. (A) | 70,000 | 4,431,700 | |||
Preferred securities 57.5% (39.3% of Total investments) | $545,937,898 | ||||
(Cost $520,587,079) | |||||
Communication services 3.7% | 35,057,288 | ||||
Diversified telecommunication services 1.9% | |||||
Qwest Corp., 6.125% (C) | 730,000 | 18,031,000 | |||
Wireless telecommunication services 1.8% | |||||
Telephone & Data Systems, Inc., 5.875% | 340,000 | 8,510,200 | |||
Telephone & Data Systems, Inc., 6.625% | 39,768 | 1,120,662 | |||
Telephone & Data Systems, Inc., 6.875% | 261,064 | 6,631,026 | |||
United States Cellular Corp., 6.950% | 30,000 | 764,400 | |||
Energy 0.6% | 5,766,600 | ||||
Oil, gas and consumable fuels 0.6% | |||||
Enbridge, Inc., Series B (6.375% to 4-15-23, then 3 month LIBOR + 3.593%) | 210,000 | 5,766,600 | |||
Financials 21.7% | 205,893,995 | ||||
Banks 11.0% | |||||
Bank of America Corp., 6.500% | 177,178 | 4,528,670 | |||
BB&T Corp. (Callable 12-3-19), 5.200% | 480,000 | 12,254,400 | |||
BB&T Corp. (Callable 3-1-20), 5.200% | 150,000 | 3,832,500 | |||
Citigroup, Inc. (7.125% to 9-30-23, then 3 month LIBOR + 4.040%) | 210,854 | 6,083,138 | |||
Fifth Third Bancorp, 6.000% (A)(B) | 400,000 | 10,984,000 | |||
JPMorgan Chase & Co., 5.450% | 245,000 | 6,134,800 | |||
JPMorgan Chase & Co., 6.100% | 510,000 | 13,086,600 | |||
JPMorgan Chase & Co., 6.125% | 98,888 | 2,502,855 | |||
Synovus Financial Corp. (6.300% to 6-21-23, then 3 month LIBOR + 3.352%) | 188,000 | 4,985,760 | |||
The PNC Financial Services Group, Inc., 5.375% (C) | 280,000 | 7,243,600 | |||
The PNC Financial Services Group, Inc. (6.125% to 5-1-22, then 3 month LIBOR + 4.067%) | 40,000 | 1,087,600 | |||
U.S. Bancorp, 5.150% (C) | 720,000 | 18,316,800 | |||
U.S. Bancorp (6.500% to 1-15-22, then 3 month LIBOR + 4.468%) | 296,000 | 8,098,560 | |||
Wells Fargo & Company, 6.000% | 215,000 | 5,471,750 | |||
Capital markets 8.8% | |||||
Morgan Stanley (6.375% to 10-15-24, then 3 month LIBOR + 3.708%) | 220,000 | 6,193,000 | |||
Morgan Stanley, 6.625% | 1,057,915 | 26,945,095 |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 8 |
Shares | Value | ||||
Financials (continued) | |||||
Capital markets (continued) | |||||
Morgan Stanley (7.125% to 10-15-23, then 3 month LIBOR + 4.320%) | 395,862 | $11,507,708 | |||
State Street Corp., 5.250% | 900,000 | 22,887,000 | |||
State Street Corp., 6.000% | 192,065 | 4,878,451 | |||
State Street Corp. (5.900% to 3-15-24, then 3 month LIBOR + 3.108%) | 25,000 | 690,000 | |||
The Bank of New York Mellon Corp., 5.200% | 425,000 | 10,867,250 | |||
Consumer finance 0.7% | |||||
Capital One Financial Corp., 6.200% | 100,183 | 2,618,784 | |||
Capital One Financial Corp., 6.700% | 136,569 | 3,463,390 | |||
Insurance 1.2% | |||||
Athene Holding, Ltd., Series A (6.350% to 6-30-29, then 3 month LIBOR + 4.253%) | 355,787 | 10,001,172 | |||
Prudential Financial, Inc., 5.750% | 47,460 | 1,231,112 | |||
Industrials 0.4% | 3,500,884 | ||||
Machinery 0.4% | |||||
Stanley Black & Decker, Inc., 5.750% | 135,326 | 3,500,884 | |||
Information technology 2.2% | 20,577,380 | ||||
Semiconductors and semiconductor equipment 2.2% | |||||
Broadcom, Inc., 8.000% (A) | 19,000 | 20,577,380 | |||
Real estate 0.7% | 7,029,950 | ||||
Equity real estate investment trusts 0.7% | |||||
American Homes 4 Rent, Series D, 6.500% | 30,000 | 803,700 | |||
Crown Castle International Corp., 6.875% (A) | 5,000 | 6,226,250 | |||
Utilities 28.2% | 268,111,801 | ||||
Electric utilities 13.2% | |||||
Duke Energy Corp., 5.125% | 221,008 | 5,602,553 | |||
Duke Energy Corp., 5.750% | 200,000 | 5,580,000 | |||
Interstate Power & Light Company, 5.100% (C) | 1,302,023 | 33,930,719 | |||
NextEra Energy Capital Holdings, Inc., 5.000% | 110,000 | 2,758,800 | |||
PPL Capital Funding, Inc., 5.900% | 1,013,052 | 25,761,912 | |||
SCE Trust II, 5.100% | 1,157,500 | 26,321,550 | |||
The Southern Company, 6.250% | 80,000 | 2,111,200 | |||
The Southern Company, 6.750% (A) | 435,000 | 23,124,600 | |||
Gas utilities 1.8% | |||||
South Jersey Industries, Inc., 7.250% (A) | 220,200 | 11,230,200 | |||
Spire, Inc., 5.900% | 219,650 | 5,943,729 | |||
Multi-utilities 13.2% | |||||
Algonquin Power & Utilities Corp. (6.200% to 7-1-24, then 3 month LIBOR + 4.010%) (A)(B) | 200,000 | 5,554,000 | |||
Algonquin Power & Utilities Corp. (6.875% to 10-17-23, then 3 month LIBOR + 3.677%) | 479,050 | 13,389,448 |
9 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Utilities (continued) | |||||
Multi-utilities (continued) | |||||
CenterPoint Energy, Inc., 7.000% (A) | 528,000 | $26,928,000 | |||
Dominion Energy, Inc., 7.250% (A) | 281,000 | 30,126,010 | |||
DTE Energy Company (Callable 12-3-19), 5.250% (C) | 166,933 | 4,246,776 | |||
DTE Energy Company, 6.250% | 284,000 | 14,421,520 | |||
Integrys Holding, Inc. (6.000% to 8-1-23, then 3 month LIBOR + 3.220%) | 210,000 | 5,775,000 | |||
NiSource, Inc. (6.500% to 3-15-24, then 5 Year CMT + 3.632%) | 250,000 | 6,927,500 | |||
Sempra Energy, 5.750% | 45,000 | 1,192,500 | |||
Sempra Energy, 6.000% (A) | 64,600 | 7,495,538 | |||
Sempra Energy, 6.750% (A) | 83,400 | 9,690,246 | |||
Rate (%) | Maturity date | Par value^ | Value | ||
Corporate bonds 12.4% (8.5% of Total investments) | $117,754,298 | ||||
(Cost $111,606,857) | |||||
Consumer discretionary 1.1% | 10,639,750 | ||||
Automobiles 1.1% | |||||
General Motors Financial Company, Inc. (6.500% to 9-30-28, then 3 month LIBOR + 3.436%) (A)(B)(D) | 6.500 | 09-30-28 | 10,600,000 | 10,639,750 | |
Financials 9.2% | 86,989,548 | ||||
Banks 8.4% | |||||
Bank of America Corp. (5.875% to 3-15-28, then 3 month LIBOR + 2.931%) (A)(B)(D) | 5.875 | 03-15-28 | 8,500,000 | 9,345,325 | |
BNP Paribas SA (7.375% to 8-19-25, then 5 Year U.S. Swap Rate + 5.150%) (A)(D) | 7.375 | 08-19-25 | 13,000,000 | 14,690,000 | |
Citizens Financial Group, Inc. (6.000% to 7-6-23, then 3 month LIBOR + 3.003%) (A)(D) | 6.000 | 07-06-23 | 13,000,000 | 13,650,000 | |
Citizens Financial Group, Inc. (6.375% to 4-6-24, then 3 month LIBOR + 3.157%) (A)(D) | 6.375 | 04-06-24 | 10,500,000 | 11,156,250 | |
HSBC Holdings PLC (6.500% to 3-23-28, then 5 Year U.S. ISDAFIX + 3.606%) (A)(D) | 6.500 | 03-23-28 | 2,500,000 | 2,646,875 | |
Huntington Bancshares, Inc. (5.700% to 4-15-23, then 3 month LIBOR + 2.880%) (A)(B)(D) | 5.700 | 04-15-23 | 3,000,000 | 3,093,210 | |
Lloyds Banking Group PLC (7.500% to 6-27-24, then 5 Year U.S. Swap Rate + 4.760%) (A)(D) | 7.500 | 06-27-24 | 11,500,000 | 12,592,500 | |
The Royal Bank of Scotland Group PLC (8.000% to 8-10-25, then 5 Year U.S. Swap Rate + 5.720%) (A)(B)(C)(D) | 8.000 | 08-10-25 | 8,624,000 | 9,863,700 | |
Wells Fargo & Company (5.900% to 6-15-24, then 3 month LIBOR + 3.110%) (A)(B)(D) | 5.900 | 06-15-24 | 2,000,000 | 2,160,000 |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 10 |
Rate (%) | Maturity date | Par value^ | Value | ||
Financials (continued) | |||||
Capital markets 0.7% | |||||
Credit Suisse Group AG (7.500% to 7-17-23, then 5 Year U.S. Swap Rate + 4.600%) (A)(B)(D)(E) | 7.500 | 07-17-23 | 6,214,000 | $6,701,178 | |
Insurance 0.1% | |||||
MetLife, Inc. (5.875% to 3-15-28, then 3 month LIBOR + 2.959%) (A)(D) | 5.875 | 03-15-28 | 1,000,000 | 1,090,510 | |
Utilities 2.1% | 20,125,000 | ||||
Electric utilities 0.5% | |||||
Southern California Edison Company (6.250% to 2-1-22, then 3 month LIBOR + 4.199%) (A)(D) | 6.250 | 02-01-22 | 4,750,000 | 4,643,125 | |
Multi-utilities 1.6% | |||||
CenterPoint Energy, Inc. (6.125% to 9-1-23, then 3 month LIBOR + 3.270%) (A)(D) | 6.125 | 09-01-23 | 10,750,000 | 11,421,875 | |
NiSource, Inc. (5.650% to 6-15-23, then 5 Year CMT + 2.843%) (A)(D) | 5.650 | 06-15-23 | 4,000,000 | 4,060,000 | |
Yield* (%) | Maturity date | Par value^ | Value | ||
Short-term investments 1.8% (1.2% of Total investments) | $17,371,000 | ||||
(Cost $17,371,000) | |||||
U.S. Government Agency 1.1% | 10,501,000 | ||||
Federal Agricultural Mortgage Corp. Discount Note | 1.500 | 11-01-19 | 1,866,000 | 1,866,000 | |
Federal Home Loan Bank Discount Note | 1.500 | 11-01-19 | 8,635,000 | 8,635,000 |
Par value^ | Value | ||||
Repurchase agreement 0.7% | 6,870,000 | ||||
Repurchase Agreement with State Street Corp. dated 10-31-19 at 0.550% to be repurchased at $6,870,105 on 11-1-19, collateralized by $6,945,000 U.S. Treasury Notes, 1.875% due 1-31-22 (valued at $7,011,283, including interest) | 6,870,000 | 6,870,000 |
Total investments (Cost $1,091,202,195) 146.3% | $1,389,627,940 | ||||
Other assets and liabilities, net (46.3%) | (439,636,554) | ||||
Total net assets 100.0% | $949,991,386 |
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund unless otherwise indicated. | |
^All par values are denominated in U.S. dollars unless otherwise indicated. | |
Security Abbreviations and Legend | |
ADR | American Depositary Receipt |
CMT | Constant Maturity Treasury |
ISDAFIX | International Swaps and Derivatives Association Fixed Interest Rate Swap Rate |
LIBOR | London Interbank Offered Rate |
11 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
(A) | All or a portion of this security is pledged as collateral pursuant to the Liquidity Agreement. Total collateral value at 10-31-19 was $506,414,381. A portion of the securities pledged as collateral were loaned pursuant to the Liquidity Agreement. The value of securities on loan amounted to $259,006,787. |
(B) | All or a portion of this security is on loan as of 10-31-19, and is a component of the fund's leverage under the Liquidity Agreement. |
(C) | All or a portion of this security is segregated as collateral for options. Total collateral value at 10-31-19 was $107,646,954. |
(D) | Perpetual bonds have no stated maturity date. Date shown as maturity date is next call date. |
(E) | These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration. |
* | Yield represents either the annualized yield at the date of purchase, the stated coupon rate or, for floating rate securities, the rate at period end. |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 12 |
Open contracts | Number
of contracts |
Position | Expiration
date |
Notional
basis^ |
Notional
value^ |
Unrealized
appreciation (depreciation) |
10-Year U.S. Treasury Note Futures | 980 | Short | Dec 2019 | $(128,806,673) | $(127,690,938) | $1,115,735 |
$1,115,735 |
Options on index | ||||||||
Counterparty
(OTC)/ Exchange- traded |
Name
of issuer |
Exercise
price |
Expiration
date |
Number
of contracts |
Notional
amount |
Premium | Value | |
Calls | ||||||||
Exchange-traded | Dow Jones Industrial Average Index | USD | 285.00 | Nov 2019 | 499 | 49,900 | $30,330 | $(749) |
Exchange-traded | Russell 2000 Index | USD | 1,535.00 | Nov 2019 | 66 | 6,600 | 217,487 | (276,540) |
Exchange-traded | S&P 500 Index | USD | 3,005.00 | Nov 2019 | 38 | 3,800 | 81,670 | (133,950) |
Exchange-traded | S&P 500 Index | USD | 3,050.00 | Nov 2019 | 38 | 3,800 | 40,700 | (41,800) |
Exchange-traded | S&P 500 Index | USD | 3,225.00 | Nov 2019 | 181 | 18,100 | 44,344 | (2,715) |
Exchange-traded | S&P 500 Index | USD | 1,275.00 | Nov 2019 | 276 | 27,600 | 1,248,061 | (2,133,479) |
Exchange-traded | S&P 500 Index | USD | 3,040.00 | Nov 2019 | 37 | 3,700 | 58,801 | (86,580) |
Exchange-traded | S&P 500 Index | USD | 3,085.00 | Nov 2019 | 38 | 3,800 | 34,550 | (39,900) |
Exchange-traded | S&P 500 Index | USD | 1,430.00 | Dec 2019 | 148 | 14,800 | 40,233 | (14,800) |
$1,796,176 | $(2,730,513) |
Interest rate swaps | ||||||||||
Counterparty
(OTC)/ Centrally cleared |
Notional
amount |
Currency | Payments
made |
Payments
received |
Fixed
payment frequency |
Floating
payment frequency |
Maturity
date |
Unamortized
upfront payment paid (received) |
Unrealized
appreciation (depreciation) |
Value |
Centrally cleared | 107,000,000 | USD | Fixed 2.136% | USD 3 Month LIBOR BBA(a) | Semi Annual | Quarterly | Oct 2022 | — | $(1,970,925) | $(1,970,925) |
— | $(1,970,925) | $(1,970,925) |
(a) | At 10-31-19, the 3 month LIBOR was 1.902%. |
Derivatives Currency Abbreviations | |
USD | U.S. Dollar |
Derivatives Abbreviations | |
BBA | The British Banker's Association |
LIBOR | London Interbank Offered Rate |
OTC | Over-the-counter |
13 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 14 |
Financial statements |
Assets | |
Unaffiliated investments, at value (Cost $1,091,202,195) | $1,389,627,940 |
Receivable for centrally cleared swaps | 959,267 |
Cash | 107,216 |
Collateral held at broker for futures contracts | 1,278,975 |
Dividends and interest receivable | 3,010,076 |
Receivable for investments sold | 2,905,125 |
Other assets | 28,963 |
Total assets | 1,397,917,562 |
Liabilities | |
Written options, at value (Premiums received $1,796,176) | 2,730,513 |
Payable for futures variation margin | 796,250 |
Liquidity agreement | 427,900,000 |
Payable for investments purchased | 15,322,980 |
Interest payable | 923,164 |
Payable to affiliates | |
Accounting and legal services fees | 82,787 |
Trustees' fees | 683 |
Other liabilities and accrued expenses | 169,799 |
Total liabilities | 447,926,176 |
Net assets | $949,991,386 |
Net assets consist of | |
Paid-in capital | $658,867,875 |
Total distributable earnings (loss) | 291,123,511 |
Net assets | $949,991,386 |
Net asset value per share | |
Based on 35,392,935 shares of beneficial interest outstanding - unlimited number of shares authorized with no par value | $26.84 |
15 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Investment income | |
Dividends | $57,308,407 |
Interest | 7,967,157 |
Less foreign taxes withheld | (262,108) |
Total investment income | 65,013,456 |
Expenses | |
Investment management fees | 9,945,823 |
Interest expense | 12,827,659 |
Accounting and legal services fees | 150,510 |
Transfer agent fees | 24,486 |
Trustees' fees | 45,134 |
Custodian fees | 113,215 |
Printing and postage | 294,042 |
Professional fees | 65,477 |
Stock exchange listing fees | 34,439 |
Other | 32,814 |
Total expenses | 23,533,599 |
Less expense reductions | (97,519) |
Net expenses | 23,436,080 |
Net investment income | 41,577,376 |
Realized and unrealized gain (loss) | |
Net realized gain (loss) on | |
Unaffiliated investments and foreign currency transactions | 33,306,705 |
Futures contracts | (9,873,069) |
Written options | (4,320,332) |
Swap contracts | 462,917 |
19,576,221 | |
Change in net unrealized appreciation (depreciation) of | |
Unaffiliated investments | 108,932,262 |
Futures contracts | (635,505) |
Written options | (1,891,374) |
Swap contracts | (5,958,816) |
100,446,567 | |
Net realized and unrealized gain | 120,022,788 |
Increase in net assets from operations | $161,600,164 |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 16 |
Year
ended 10-31-19 |
Year
ended 10-31-18 | |
Increase (decrease) in net assets | ||
From operations | ||
Net investment income | $41,577,376 | $47,048,170 |
Net realized gain | 19,576,221 | 20,124,740 |
Change in net unrealized appreciation (depreciation) | 100,446,567 | (63,732,339) |
Increase in net assets resulting from operations | 161,600,164 | 3,440,571 |
Distributions to shareholders | ||
From earnings | (72,932,499) | (77,227,677) |
Total distributions | (72,932,499) | (77,227,677) |
Fund share transactions | ||
Issued pursuant to Dividend Reinvestment Plan | 214,746 | — |
Total increase (decrease) | 88,882,411 | (73,787,106) |
Net assets | ||
Beginning of year | 861,108,975 | 934,896,081 |
End of year | $949,991,386 | $861,108,975 |
Share activity | ||
Shares outstanding | ||
Beginning of year | 35,384,961 | 35,384,961 |
Issued pursuant to Dividend Reinvestment Plan | 7,974 | — |
End of year | 35,392,935 | 35,384,961 |
17 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Cash flows from operating activities | |
Net increase in net assets from operations | $161,600,164 |
Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities: | |
Long-term investments purchased | (173,274,467) |
Long-term investments sold | 220,456,437 |
Net purchases and sales in short-term investments | (10,592,575) |
Net amortization of premium (discount) | (62,423) |
(Increase) Decrease in assets: | |
Receivable for futures variation margin | 336,865 |
Receivable for centrally cleared swaps | 356,265 |
Collateral held at broker for futures contracts | (249,975) |
Dividends and interest receivable | 37,991 |
Receivable for investments sold | 5,555,008 |
Other assets | 11,492 |
Increase (Decrease) in liabilities: | |
Payable for futures variation margin | 796,250 |
Written options, at value | 1,654,783 |
Payable for investments purchased | 15,322,980 |
Interest payable | (149,157) |
Payable to affiliates | (57,109) |
Other liabilities and accrued expenses | (1,583) |
Net change in unrealized (appreciation) depreciation on: | |
Investments | (108,932,262) |
Net realized (gain) loss on: | |
Investments | (33,306,663) |
Proceeds received as return of capital | 1,782,607 |
Net cash provided by operating activities | $81,284,628 |
Cash flows provided by (used in) financing activities | |
Distributions to shareholders | $(72,717,753) |
Decrease in due to custodian | (8,459,659) |
Net cash used in financing activities | $(81,177,412) |
Net increase in cash | $107,216 |
Cash at beginning of year | — |
Cash at end of year | $107,216 |
Supplemental disclosure of cash flow information: | |
Cash paid for interest | $(12,976,816) |
Noncash financing activities not included herein consists of reinvestment distributions: | $(214,746) |
SEE NOTES TO FINANCIAL STATEMENTS | ANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 18 |
Financial highlights |
Period ended | 10-31-19 | 10-31-18 | 10-31-17 | 10-31-16 | 10-31-15 |
Per share operating performance | |||||
Net asset value, beginning of period | $24.34 | $26.42 | $25.68 | $23.40 | $23.82 |
Net investment income1 | 1.17 | 1.33 | 1.65 | 1.44 | 1.38 |
Net realized and unrealized gain (loss) on investments | 3.39 | (1.22) | 0.91 | 2.29 | (0.44) |
Total from investment operations | 4.56 | 0.11 | 2.56 | 3.73 | 0.94 |
Less distributions | |||||
From net investment income | (1.65) | (1.66) | (1.66) | (1.47) | (1.45) |
From net realized gain | (0.41) | (0.53) | (0.16) | — | — |
Total distributions | (2.06) | (2.19) | (1.82) | (1.47) | (1.45) |
Anti-dilutive impact of repurchase plan | — | — | — | 0.02 2 | 0.09 2 |
Net asset value, end of period | $26.84 | $24.34 | $26.42 | $25.68 | $23.40 |
Per share market value, end of period | $27.44 | $22.37 | $25.60 | $23.83 | $20.98 |
Total return at net asset value (%)3,4 | 20.34 | 0.97 | 10.73 | 16.97 | 5.24 |
Total return at market value (%)3 | 33.87 | (4.23) | 15.62 | 21.06 | 2.91 |
Ratios and supplemental data | |||||
Net assets, end of period (in millions) | $950 | $861 | $935 | $909 | $836 |
Ratios (as a percentage of average net assets): | |||||
Expenses before reductions | 2.62 | 2.45 | 1.97 | 1.72 | 1.64 |
Expenses including reductions5 | 2.61 | 2.44 | 1.96 | 1.71 | 1.63 |
Net investment income | 4.63 | 5.40 | 6.41 | 5.78 | 5.88 |
Portfolio turnover (%) | 13 | 24 | 11 | 18 | 11 |
Senior securities | |||||
Total debt outstanding end of period (in millions) | $428 | $428 | $428 | $428 | $428 |
Asset coverage per $1,000 of debt6 | $3,220 | $3,012 | $3,185 | $3,123 | $2,953 |
1 | Based on average daily shares outstanding. |
2 | The repurchase plan was completed at an average repurchase price of $20.47 and $20.33 for 326,200 shares and 1,341,340 shares for the periods ended 10-31-16 and 10-31-15, respectively. |
3 | Total return based on net asset value reflects changes in the fund’s net asset value during each period. Total return based on market value reflects changes in market value. Each figure assumes that distributions from income, capital gains and tax return of capital, if any, were reinvested. |
4 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
5 | Expenses including reductions excluding interest expense were 1.18%, 1.20%, 1.19%, 1.19% and 1.20% for the periods ended 10-31-19, 10-31-18, 10-31-17, 10-31-16 and 10-31-15, respectively. |
6 | Asset coverage equals the total net assets plus borrowings divided by the borrowings of the fund outstanding at period end (Note 8). As debt outstanding changes, the level of invested assets may change accordingly. Asset coverage ratio provides a measure of leverage. |
19 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | ANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Notes to financial statements |
ANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 20 |
Total
value at 10-31-19 |
Level
1 quoted price |
Level
2 significant observable inputs |
Level
3 significant unobservable inputs | |
Investments in securities: | ||||
Assets | ||||
Common stocks | $708,564,744 | $708,564,744 | — | — |
Preferred securities | ||||
Communication services | 35,057,288 | 35,057,288 | — | — |
Energy | 5,766,600 | 5,766,600 | — | — |
Financials | 205,893,995 | 205,893,995 | — | — |
Industrials | 3,500,884 | 3,500,884 | — | — |
Information technology | 20,577,380 | 20,577,380 | — | — |
Real estate | 7,029,950 | 803,700 | $6,226,250 | — |
Utilities | 268,111,801 | 262,336,801 | 5,775,000 | — |
Corporate bonds | 117,754,298 | — | 117,754,298 | — |
Short-term investments | 17,371,000 | — | 17,371,000 | — |
Total investments in securities | $1,389,627,940 | $1,242,501,392 | $147,126,548 | — |
Derivatives: | ||||
Assets | ||||
Futures | $1,115,735 | $1,115,735 | — | — |
Liabilities | ||||
Written options | (2,730,513) | (2,730,513) | — | — |
Swap contracts | (1,970,925) | — | $(1,970,925) | — |
21 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | ANNUAL REPORT |
ANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 22 |
October 31, 2019 | October 31, 2018 | |
Ordinary income | $43,299,735 | $51,245,756 |
Long-term capital gains | 29,632,764 | 25,981,921 |
Total | $72,932,499 | $77,227,677 |
23 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | ANNUAL REPORT |
ANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 24 |
25 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | ANNUAL REPORT |
Risk | Statement
of assets and liabilities location |
Financial
instruments location |
Assets
derivatives fair value |
Liabilities
derivatives fair value |
Interest rate | Receivable/payable for futures variation margin | Futures 1 | $1,115,735 | — |
Equity | Written options, at value | Written options | — | $(2,730,513) |
Interest rate | Swap contracts, at value | Interest rate swaps2 | — | (1,970,925) |
$1,115,735 | $(4,701,438) |
1 | Reflects cumulative appreciation/depreciation on futures as disclosed in Fund's investments. Only the year end variation margin is separately disclosed on the Statement of assets and liabilities. |
2 | Reflects cumulative value of swap contracts. Receivable/payable for centrally cleared swaps, which includes value and margin, and swap contracts at value, which represents OTC swaps, are shown separately on the Statement of assets and liabilities. |
Statement of operations location - Net realized gain (loss) on: | ||||
Risk | Futures contracts | Written options | Swap contracts | Total |
Interest rate | $(9,873,069) | — | $462,917 | $(9,410,152) |
Equity | — | $(4,320,332) | — | (4,320,332) |
Total | $(9,873,069) | $(4,320,332) | $462,917 | $(13,730,484) |
Statement of operations location - Change in net unrealized appreciation (depreciation) of: | ||||
Risk | Futures contracts | Written options | Swap contracts | Total |
Interest rate | $(635,505) | — | $(5,958,816) | $(6,594,321) |
ANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 26 |
Statement of operations location - Change in net unrealized appreciation (depreciation) of: | ||||
Risk | Futures contracts | Written options | Swap contracts | Total |
Equity | — | $(1,891,374) | — | $(1,891,374) |
Total | $(635,505) | $(1,891,374) | $(5,958,816) | $(8,485,695) |
27 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | ANNUAL REPORT |
• | the likelihood of greater volatility of NAV and market price of shares; |
• | fluctuations in the interest rate paid for the use of the LA; |
• | increased operating costs, which may reduce the fund’s total return; |
• | the potential for a decline in the value of an investment acquired through leverage, while the fund’s obligations under such leverage remains fixed; and |
• | the fund is more likely to have to sell securities in a volatile market in order to meet asset coverage or other debt compliance requirements. |
ANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 28 |
29 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | ANNUAL REPORT |
ANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 30 |
31 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | ANNUAL REPORT |
Tax information (Unaudited) |
ANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 32 |
Unaudited
Investment objective and policy
The fund is a closed-end, diversified management investment company, common shares of which were initially offered to the public on February 25, 2004, and are publicly traded on the New York Stock Exchange (the NYSE). The fund's investment objective is to provide a high level of after-tax total return from dividend income and gains and capital appreciation. The fund utilizes a liquidity agreement to increase its assets available for investments.
Under normal market conditions, the fund will invest at least 80% of its assets (net assets plus borrowings for investment purposes) in dividend-paying common and preferred securities that the subadvisors believe at the time of acquisition are eligible to pay dividends which, for individual shareholders, qualify for U.S. federal income taxation at rates applicable to long-term capital gains, which are currently taxed to noncorporate taxpayers at a maximum rate of 20% (15% or 0% for individuals in certain tax brackets) (tax-advantaged dividends). The fund will notify shareholders at least 60 days prior to any change in this 80% investment policy. Tax-advantaged dividends generally include dividends from domestic corporations and dividends from foreign corporations that meet certain specified criteria. The fund generally can pass the tax treatment of tax-advantaged dividends it receives through to its common shareholders. The fund may write (sell) covered call index options on up to 30% of the value of the fund's total assets.
Dividends and distributions
During the year ended October 31, 2019, distributions from net investment income totaling $1.6560 per share and distributions from capital gains totaling $0.4051 per share were paid to shareholders. The dates of payments and the amounts per share were as follows:
Payment Date | Income Distributions |
November 30, 2018 | $0.1380 |
December 20, 2018 | 0.1380 |
January 31, 2019 | 0.1380 |
February 28, 2019 | 0.1380 |
March 29, 2019 | 0.1380 |
April 30, 2019 | 0.1380 |
May 31, 2019 | 0.1380 |
June 28, 2019 | 0.1380 |
July 31, 2019 | 0.1380 |
August 30, 2019 | 0.1380 |
September 30, 2019 | 0.1380 |
October 31, 2019 | 0.1380 |
Total | $1.6560 |
Payment Date | Additional Distributions |
December 20, 2018 | $0.4051 |
Total | $2.0611 |
Dividend reinvestment plan
The fund's Dividend Reinvestment Plan (the Plan) provides that distributions of dividends and capital gains are automatically reinvested in common shares of the fund by Computershare Trust Company, N.A. (the Plan Agent). Every shareholder holding at least one full share of the fund is entitled to participate in the Plan. In addition, every
shareholder who became a shareholder of the fund after June 30, 2011, and holds at least one full share of the fund will be automatically enrolled in the Plan. Shareholders may withdraw from the Plan at any time and shareholders who do not participate in the Plan will receive all distributions in cash.
If the fund declares a dividend or distribution payable either in cash or in common shares of the fund and the market price of shares on the payment date for the distribution or dividend equals or exceeds the fund's net asset value per share (NAV), the fund will issue common shares to participants at a value equal to the higher of NAV or 95% of the market price. The number of additional shares to be credited to each participant's account will be determined by dividing the dollar amount of the distribution or dividend by the higher of NAV or 95% of the market price. If the market price is lower than NAV, or if dividends or distributions are payable only in cash, then participants will receive shares purchased by the Plan Agent on participants' behalf on the NYSE or otherwise on the open market. If the market price exceeds NAV before the Plan Agent has completed its purchases, the average per share purchase price may exceed NAV, resulting in fewer shares being acquired than if the fund had issued new shares.
There are no brokerage charges with respect to common shares issued directly by the fund. However, whenever shares are purchased or sold on the NYSE or otherwise on the open market, each participant will pay a pro rata portion of brokerage trading fees, currently $0.05 per share purchased or sold. Brokerage trading fees will be deducted from amounts to be invested.
The reinvestment of dividends and net capital gains distributions does not relieve participants of any income tax that may be payable on such dividends or distributions.
Shareholders participating in the Plan may buy additional shares of the fund through the Plan at any time in amounts of at least $50 per investment, up to a maximum of $10,000, with a total calendar year limit of $100,000. Shareholders will be charged a $5 transaction fee plus $0.05 per share brokerage trading fee for each order. Purchases of additional shares of the fund will be made on the open market. Shareholders who elect to utilize monthly electronic fund transfers to buy additional shares of the fund will be charged a $2 transaction fee plus $0.05 per share brokerage trading fee for each automatic purchase. Shareholders can also sell fund shares held in the Plan account at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agent's website at www.computershare.com/investor. The Plan Agent will mail a check (less applicable brokerage trading fees) on settlement date. Pursuant to regulatory changes, effective September 5, 2017, the settlement date is changed from three business days after the shares have been sold to two business days after the shares have been sold. If shareholders choose to sell shares through their stockbroker, they will need to request that the Plan Agent electronically transfer those shares to their stockbroker through the Direct Registration System.
Shareholders participating in the Plan may withdraw from the Plan at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agent's website at www.computershare.com/investor. Such termination will be effective immediately if the notice is received by the Plan Agent prior to any dividend or distribution record date; otherwise, such termination will be effective on the first trading day after the payment date for such dividend or distribution, with respect to any subsequent dividend or distribution. If shareholders withdraw from the Plan, their shares will be credited to their account; or, if they wish, the Plan Agent will sell their full and fractional shares and send the shareholders the proceeds, less a transaction fee of $5 and less brokerage trading fees of $0.05 per share. If a shareholder does not maintain at least one whole share of common stock in the Plan account, the Plan Agent may terminate such shareholder's participation in the Plan after written notice. Upon termination, shareholders will be sent a check for the cash value of any fractional share in the Plan account, less any applicable broker commissions and taxes.
Shareholders who hold at least one full share of the fund may join the Plan by notifying the Plan Agent by telephone, in writing or by visiting the Plan Agent's website at www.computershare.com/investor. If received in proper form by the Plan Agent before the record date of a dividend, the election will be effective with respect to all dividends paid after
such record date. If shareholders wish to participate in the Plan and their shares are held in the name of a brokerage firm, bank or other nominee, shareholders should contact their nominee to see if it will participate in the Plan. If shareholders wish to participate in the Plan, but their brokerage firm, bank or other nominee is unable to participate on their behalf, they will need to request that their shares be re-registered in their own name, or they will not be able to participate. The Plan Agent will administer the Plan on the basis of the number of shares certified from time to time by shareholders as representing the total amount registered in their name and held for their account by their nominee.
Experience under the Plan may indicate that changes are desirable. Accordingly, the fund and the Plan Agent reserve the right to amend or terminate the Plan. Participants generally will receive written notice at least 90 days before the effective date of any amendment. In the case of termination, participants will receive written notice at least 90 days before the record date for the payment of any dividend or distribution by the fund.
Effective November 1, 2013, the Plan was revised to provide that Computershare Trust Company, N.A. no longer provides mail loss insurance coverage when shareholders mail their certificates to the fund's administrator.
All correspondence or requests for additional information about the Plan should be directed to Computershare Trust Company, N.A., at the address stated below, or by calling 800-852-0218, 201-680-6578 (For International Telephone Inquiries) and 800-952-9245 (For the Hearing Impaired (TDD)).
Shareholder communication and assistance
If you have any questions concerning the fund, we will be pleased to assist you. If you hold shares in your own name and not with a brokerage firm, please address all notices, correspondence, questions or other communications regarding the fund to the transfer agent at:
Regular Mail:
Computershare
P.O. Box 505000
Louisville, KY 40233
Registered or Overnight Mail:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
If your shares are held with a brokerage firm, you should contact that firm, bank or other nominee for assistance.
Continuation of Investment Advisory and Subadvisory Agreements
Evaluation of Advisory and Subadvisory Agreements by the Board of Trustees
This section describes the evaluation by the Board of Trustees (the Board) of John Hancock Tax-Advantaged Dividend Income Fund (the fund) of the Advisory Agreement (the Advisory Agreement) with John Hancock Investment Management, LLC (the Advisor, formerly John Hancock Advisers, LLC) and the Subadvisory Agreements (the Subadvisory Agreements) with Manulife Investment Management (US) LLC (Manulife IM (US), formerly John Hancock Asset Management a division of Manulife Asset Management (US) LLC or JHAM) and Wells Capital Management Incorporated (formerly known as Analytic Investors, LLC) (Wells Capital and collectively, the Subadvisors). The Advisory Agreement and Subadvisory Agreements are collectively referred to as the Agreements. Prior to the June 23-26, 2019 in-person meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the Agreements at an in-person meeting held on May 28-30, 2019.
Approval of Advisory and Subadvisory Agreements
At in-person meetings held on June 23-26, 2019, the Board, including the Trustees who are not parties to any Agreement or considered to be interested persons of the fund under the Investment Company Act of 1940, as amended (the 1940 Act) (the Independent Trustees), reapproved for an annual period the continuation of the Advisory Agreement between the fund and the Advisor and the Subadvisory Agreements between the Advisor and the Subadvisors with respect to the fund.
In considering the Advisory Agreement and the Subadvisory Agreements, the Board received in advance of the meetings a variety of materials relating to the fund, the Advisor and the Subadvisors, including comparative performance, fee and expense information for a peer group of similar funds prepared by an independent third-party provider of fund data, performance information for an applicable benchmark index; and other pertinent information, such as the market premium and discount information, and, with respect to the Subadvisors, comparative performance information for comparably managed accounts, as applicable, and other information provided by the Advisor and the Subadvisors regarding the nature, extent and quality of services provided by the Advisor and the Subadvisors under their respective Agreements, as well as information regarding the Advisor's revenues and costs of providing services to the fund and any compensation paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreements are considered, particular focus is given to information concerning fund performance, comparability of fees and total expenses, and profitability. However, the Board noted that the evaluation process with respect to the Advisor and the Subadvisors is an ongoing one. In this regard, the Board also took into account discussions with management and information provided to the Board (including its various committees) at prior meetings with respect to the services provided by the Advisor and the Subadvisors to the fund, including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisors with respect to the fund. The information received and considered by the Board in connection with the May and June meetings and throughout the year was both written and oral. The Board noted the affiliation of Manulife IM (US) with the Advisor, noting any potential conflicts of interest. The Board also considered the nature, quality, and extent of non-advisory services, if any, to be provided to the fund by the Advisor's affiliates. The Board considered the Advisory Agreement and Subadvisory Agreements separately in the course of its review. In doing so, the Board noted the respective roles of the Advisor and Subadvisors in providing services to the fund.
Throughout the process, the Board asked questions of and requested additional information from management. The Board is assisted by counsel for the fund and the Independent Trustees are also separately assisted by independent legal counsel throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements and discussed the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement with respect to the fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends prevailing generally in the economy, the securities markets, and the industry) and did not treat any single factor as determinative, and each Trustee may have attributed different weights to different factors. The Board's conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board's ongoing regular review of fund performance and operations throughout the year.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the fund, the Board reviewed information provided by the Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor's compliance and regulatory history, including its Form ADV. The Board also noted that on a regular basis it receives and reviews information from the fund's Chief Compliance Officer (CCO) regarding the fund's compliance policies and procedures established pursuant to Rule 38a-1 under the 1940 Act. The Board observed that the scope of services provided by the Advisor, and of the undertakings required of the Advisor in connection with those services, including maintaining and monitoring its own and the fund's compliance programs, risk management programs, liquidity management programs and cybersecurity programs, had expanded over time as a result of regulatory, market and other developments. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the fund, including, but not limited to, general supervision of and coordination of the services provided by the Subadvisors, and is also responsible for monitoring and reviewing the activities of the Subadvisors and other third-party service providers. The Board also considered the significant risks assumed by the Advisor in connection with the services provided to the fund including entrepreneurial risk in sponsoring new funds and ongoing risks including investment, operational, enterprise, litigation, regulatory and compliance risk with respect to all funds.
The Board also considered the differences between the Advisor's services to the fund and the services it provides to other clients that are not closed-end funds, including, for example, the differences in services related to the regulatory and legal obligations of closed-end funds.
In considering the nature, extent, and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor's management and the quality of the performance of the Advisor's duties, through Board meetings, discussions and reports during the preceding year and through each Trustee's experience as a Trustee of the fund and of the other funds in the John Hancock group of funds complex (the John Hancock Fund Complex).
In the course of their deliberations regarding the Advisory Agreement, the Board considered, among other things:
(a) | the skills and competency with which the Advisor has in the past managed the fund's affairs and its subadvisory relationships, the Advisor's oversight and monitoring of the Subadvisors' investment performance and compliance programs, such as the Subadvisors' compliance with fund policies and |
The Board concluded that the Advisor may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the fund.
Investment performance. In considering the fund's performance, the Board noted that it reviews at its regularly scheduled meetings information about the fund's performance results. In connection with the consideration of the Advisory Agreement, the Board:
(a) | reviewed information prepared by management regarding the fund's performance; |
(b) | considered the comparative performance of an applicable benchmark index; |
(c) | considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; |
(d) | took into account the Advisor's analysis of the fund's performance; and |
(e) | considered the fund's share performance and premium/discount information. |
The Board noted that while it found the data provided by the independent third-party generally useful it recognized its limitations, including in particular that the data may vary depending on the end date selected and the results of the performance comparisons may vary depending on the selection of the peer group. The Board noted that, based on its net asset value, the fund underperformed its benchmark index for the one-year period and outperformed its benchmark index for the three-, five- and ten-year periods ended December 31, 2018. The Board also noted that, based on its net asset value, the fund outperformed its peer group average for the one-, three-, five- and ten-year periods ended December 31, 2018.The Board took into account management's discussion of the fund's performance, including the favorable performance relative to the benchmark index for the three-, five- and ten-year periods and to the peer group for the one-, three-,five- and ten-year periods. The Board concluded that the fund's performance has generally been in line with or outperformed the historical performance of comparable funds and the fund's benchmark index.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of fund data, including, among other data, the fund's contractual and net management fees (and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the fund in light of the nature, extent and quality of the management and advisory and subadvisory services provided by the Advisor and the Subadvisor. The Board considered the fund's ranking within a smaller group of peer funds chosen by the independent third-party provider, as well as the fund's ranking within a broader group of funds. In comparing the fund's contractual and net management fees to those of comparable funds, the Board noted that such fees include both advisory and administrative costs.
The Board also took into account the impact of leverage on fund expenses. The Board took into account the management fee structure, including that management fees for the fund were based on the fund's total managed assets, which are attributable to common stock and borrowings. The Board noted that net management fees for the fund are lower than the peer group median and that net total expenses for the fund are higher than the peer group median.
The Board took into account management's discussion of the fund's expenses. The Board took into account management's discussion with respect to the overall management fee and the fees of the Subadvisors, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee, in each case in light of the services rendered for those amounts and the risks undertaken by the Advisor. The Board also noted that the Advisor pays the subadvisory fees. In addition, the Board took into account that management had agreed to implement an overall fee waiver across the complex, including the fund, which is discussed further below. The Board reviewed information provided by the Advisor concerning the investment advisory fee charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the John Hancock Fund Complex) having similar investment mandates, if any. The Board considered any differences between the Advisor's and Subadvisors' services to the fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee paid with respect to the fund is reasonable in light of the nature, extent and quality of the services provided to the fund under the Advisory Agreement.
Profitability/Fall out benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates (including Manulife IM (US)) from the Advisor's relationship with the fund, the Board:
(a) | reviewed financial information of the Advisor; |
(b) | reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to the fund; |
(c) | received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole and with respect to the fund; |
(d) | received information with respect to the Advisor's allocation methodologies used in preparing the profitability data and considered that the advisor hired an independent third-party consultant to provide an analysis of the Advisor's allocation methodologies; |
(e) | considered that the Advisor also provides administrative services to the fund on a cost basis pursuant to an administrative services agreement; |
(f) | noted that Manulife IM (US) is an affiliate of the Advisor; |
(g) | noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the fund; |
(h) | noted that the subadvisory fees for the fund are paid by the Advisor, and are negotiated at arm's length for Wells Capital; |
(i) | considered the Advisor's ongoing costs and expenditures necessary to improve services, meet new regulatory and compliance requirements, and adapt to the other challenges impacting the fund industry; and |
(j) | considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the fund and the risks that it assumes as Advisor, including entrepreneurial, operational, reputational, litigation and regulatory risk. |
Based upon its review, the Board concluded that the level of profitability, if any, of the Advisor and its affiliates (including Manulife IM (US)) from their relationship with the fund was reasonable and not excessive.
Economies of scale. In considering the extent to which the fund may realize any economies of scale and whether fee levels reflect these economies of scale for the benefit of the fund shareholders, the Board noted that the fund has a limited ability to increase its assets as a closed-end fund. The Board took into account management's discussions of the current advisory fee structure, and, as noted above, the services the Advisor provides in performing its functions under the Advisory Agreement and in supervising the Subadvisors.
The Board also considered potential economies of scale that may be realized by the fund as part of the John Hancock Fund Complex. Among them, the Board noted that the Advisor has contractually agreed to waive a portion of its management fee and/or reimburse expenses for certain funds of the John Hancock Fund Complex, including the fund (the participating portfolios). This waiver is based upon aggregate net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund. The Board also considered the Advisor's overall operations and its ongoing investment in its business in order to expand the scale of, and improve the quality of, its operations that benefit the fund. The Board determined that the management fee structure for the fund was reasonable.
Approval of Subadvisory Agreements
In making its determination with respect to approval of the Subadvisory Agreements, the Board reviewed:
(1) | information relating to the Subadvisors' business, including current subadvisory services to the fund (and other funds in the John Hancock Fund Complex); |
(2) | the historical and current performance of the fund and comparative performance information relating to an applicable benchmark index and comparable funds; |
(3) | the subadvisory fees for the fund and to the extent available, comparable fee information prepared by an independent third party provider of fund data; and |
(4) | information relating to the nature and scope of any material relationships and their significance to the fund's Advisor and the Subadvisors. |
Nature, extent, and quality of services. With respect to the services provided by the Subadvisors, the Board received information provided to the Board by the Subadvisors, including the Subadvisors' respective Form ADV, as well as took into account information presented throughout the past year. The Board considered each Subadvisor's current level of staffing and its overall resources, as well as received information relating to each Subadvisor's compensation program. The Board reviewed each Subadvisor's history and investment experience, as well as information regarding the qualifications, background, and responsibilities of each Subadvisor's investment and compliance personnel who
provide services to the fund. The Board also considered, among other things, each Subadvisor's compliance program and any disciplinary history. The Board also considered each Subadvisor's risk assessment and monitoring process. The Board reviewed each Subadvisor's regulatory history, including whether it was involved in any regulatory actions or investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular, periodic reviews of each Subadvisor and its operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the fund's CCO and his staff conduct regular, periodic compliance reviews with each Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of each Subadvisor and procedures reasonably designed to assure compliance with the federal securities laws. The Board also took into account the financial condition of each Subadvisor.
The Board considered each Subadvisor's investment process and philosophy. The Board took into account that each Subadvisor's responsibilities include the development and maintenance of an investment program for the fund that is consistent with the fund's investment objective, the selection of investment securities and the placement of orders for the purchase and sale of such securities, as well as the implementation of compliance controls related to performance of these services. The Board also received information with respect to each Subadvisor's brokerage policies and practices, including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by each Subadvisor and the profitability to each Subadvisor of its relationship with the fund, the Board noted that the fees under each Subadvisory Agreement are paid by the Advisor and not the fund. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Subadvisory Agreements.
The Board also relied on the ability of the Advisor to negotiate the Wells Capital Subadvisory Agreement and the fees thereunder at arm's length. As a result, the costs of the services to be provided and the profits to be realized by Wells Capital from its relationship with the fund were not a material factor in the Board's consideration of the Wells Capital Subadvisory Agreement.
The Board also received information regarding the nature and scope (including their significance to the Advisor and its affiliates and Wells Capital) of any material relationships with respect to the Wells Capital, which include arrangements in which the Wells Capital or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of interest the Advisor might have in connection with the Wells Capital Subadvisory Agreement.
In addition, the Board considered other potential indirect benefits that the Subadvisors and its affiliates may receive from the Subadvisors' relationship with the fund, such as the opportunity to provide advisory services to additional funds in the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays subadvisory fees to the Subadvisors. As noted above, the Board also considered the fund's subadvisory fees as compared to similarly situated investment companies deemed to be comparable to the fund as included in the report prepared by the independent third party provider of fund data, to the extent available. The Board noted that the limited size of the Lipper peer group was not sufficient for comparative purposes. The Board also took into account the subadvisory fees paid by the Advisor to the Subadvisors with respect to the fund and compared them to fees charged by the Subadvisors to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered the fund's performance as compared to the fund's peer group and the benchmark index and noted that the Board reviews information about the fund's performance results at its regularly scheduled meetings. The Board noted the Advisor's expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the Subadvisors. The Board was mindful of the Advisor's focus on the Subadvisors' performance. The Board also noted the Subadvisors' long-term performance record for similar accounts, as applicable.
The Board's decision to approve the Subadvisory Agreements was based on a number of determinations, including the following:
(1) | the Subadvisor has extensive experience and demonstrated skills as a manager; |
(2) | the fund's performance, based on net asset value, has generally been in line with or outperformed the historical performance of comparable funds and the fund's benchmark index; and |
(3) | the subadvisory fees are reasonable in relation to the level and quality of services being provided under the Subadvisory Agreement. |
* * *
Based on the Board's evaluation of all factors that the Board deemed to be material, including those factors described above, the Board, including the Independent Trustees, concluded that renewal of the Advisory Agreement and the Subadvisory Agreements would be in the best interest of the fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreements for an additional one-year period.
This chart provides information about the Trustees and Officers who oversee your John Hancock fund. Officers elected by the Trustees manage the day-to-day operations of the fund and execute policies formulated by the Trustees.
Independent Trustees
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years |
Trustee of the Trust since1 |
Number of John Hancock funds overseen by Trustee |
Hassell H. McClellan, Born: 1945 | 2012 | 207 |
Trustee and Chairperson of the Board Director/Trustee, Virtus Funds (since 2008); Director, The Barnes Group (since 2010); Associate Professor, The Wallace E. Carroll School of Management, Boston College (retired 2013). Trustee (since 2005) and Chairperson of the Board (since 2017) of various trusts within the John Hancock Fund Complex. |
Charles L. Bardelis,2 Born: 1941 | 2012 | 207 |
Trustee Director, Island Commuter Corp. (marine transport). Trustee of various trusts within the John Hancock Fund Complex (since 1988). |
James R. Boyle, Born: 1959 | 2015 | 207 |
Trustee Chief Executive Officer, Foresters Financial (since 2018); Chairman and Chief Executive Officer, Zillion Group, Inc. (formerly HealthFleet, Inc.) (healthcare) (2014-2018); Executive Vice President and Chief Executive Officer, U.S. Life Insurance Division of Genworth Financial, Inc. (insurance) (January 2014-July 2014); Senior Executive Vice President, Manulife Financial, President and Chief Executive Officer, John Hancock (1999-2012); Chairman and Director, John Hancock Investment Management LLC, John Hancock Investment Management Distributors LLC, and John Hancock Variable Trust Advisers LLC (2005-2010). Trustee of various trusts within the John Hancock Fund Complex (2005-2014 and since 2015). |
Peter S. Burgess,2 Born: 1942 | 2012 | 207 |
Trustee Consultant (financial, accounting, and auditing matters) (since 1999); Certified Public Accountant; Partner, Arthur Andersen (independent public accounting firm) (prior to 1999); Director, Lincoln Educational Services Corporation (since 2004); Director, Symetra Financial Corporation (2010-2016); Director, PMA Capital Corporation (2004-2010). Trustee of various trusts within the John Hancock Fund Complex (since 2005). |
William H. Cunningham, Born: 1944 | 2004 | 207 |
Trustee Professor, University of Texas, Austin, Texas (since 1971); former Chancellor, University of Texas System and former President of the University of Texas, Austin, Texas; Chairman (since 2009) and Director (since 2006), Lincoln National Corporation (insurance); Director, Southwest Airlines (since 2000); former Director, LIN Television (2009-2014). Trustee of various trusts within the John Hancock Fund Complex (since 1986). |
Grace K. Fey, Born: 1946 | 2012 | 207 |
Trustee Chief Executive Officer, Grace Fey Advisors (since 2007); Director and Executive Vice President, Frontier Capital Management Company (1988-2007); Director, Fiduciary Trust (since 2009). Trustee of various trusts within the John Hancock Fund Complex (since 2008). |
Independent Trustees (continued)
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years |
Trustee of the Trust since1 |
Number of John Hancock funds overseen by Trustee |
Deborah C. Jackson, Born: 1952 | 2008 | 207 |
Trustee President, Cambridge College, Cambridge, Massachusetts (since 2011); Board of Directors, Massachusetts Women's Forum (since 2018); Board of Directors, National Association of Corporate Directors/New England (since 2015); Board of Directors, Association of Independent Colleges and Universities of Massachusetts (2014-2017); Chief Executive Officer, American Red Cross of Massachusetts Bay (2002-2011); Board of Directors of Eastern Bank Corporation (since 2001); Board of Directors of Eastern Bank Charitable Foundation (since 2001); Board of Directors of American Student Assistance Corporation (1996-2009); Board of Directors of Boston Stock Exchange (2002-2008); Board of Directors of Harvard Pilgrim Healthcare (health benefits company) (2007-2011). Trustee of various trusts within the John Hancock Fund Complex (since 2008). |
James M. Oates,2 Born: 1946 | 2012 | 207 |
Trustee Managing Director, Wydown Group (financial consulting firm) (since 1994); Chairman and Director, Emerson Investment Management, Inc. (2000-2015); Independent Chairman, Hudson Castle Group, Inc. (formerly IBEX Capital Markets, Inc.) (financial services company) (1997-2011); Director, Stifel Financial (since 1996); Director, Investor Financial Services Corporation (1995-2007); Director, Connecticut River Bancorp (1998-2014); Director/Trustee, Virtus Funds (since 1988). Trustee (since 2004) and Chairperson of the Board (2005-2016) of various trusts within the John Hancock Fund Complex. |
Steven R. Pruchansky, Born: 1944 | 2004 | 207 |
Trustee and Vice Chairperson of the Board Managing Director, Pru Realty (since 2017); Chairman and Chief Executive Officer, Greenscapes of Southwest Florida, Inc. (since 2014); Director and President, Greenscapes of Southwest Florida, Inc. (until 2000); Member, Board of Advisors, First American Bank (until 2010); Managing Director, Jon James, LLC (real estate) (since 2000); Partner, Right Funding, LLC (2014-2017); Director, First Signature Bank & Trust Company (until 1991); Director, Mast Realty Trust (until 1994); President, Maxwell Building Corp. (until 1991). Trustee (since 1992), Chairperson of the Board (2011-2012), and Vice Chairperson of the Board (since 2012) of various trusts within the John Hancock Fund Complex. |
Gregory A. Russo, Born: 1949 | 2008 | 207 |
Trustee Director and Audit Committee Chairman (since 2012), and Member, Audit Committee and Finance Committee (since 2011), NCH Healthcare System, Inc. (holding company for multi-entity healthcare system); Director and Member (2012-2018) and Finance Committee Chairman (2014-2018), The Moorings, Inc. (nonprofit continuing care community); Vice Chairman, Risk & Regulatory Matters, KPMG LLP (KPMG) (2002-2006); Vice Chairman, Industrial Markets, KPMG (1998-2002); Chairman and Treasurer, Westchester County, New York, Chamber of Commerce (1986-1992); Director, Treasurer, and Chairman of Audit and Finance Committees, Putnam Hospital Center (1989-1995); Director and Chairman of Fundraising Campaign, United Way of Westchester and Putnam Counties, New York (1990-1995). Trustee of various trusts within the John Hancock Fund Complex (since 2008). |
Non-Independent Trustees3
Name, year of birth Position(s) held with fund Principal occupation(s) and other directorships during past 5 years |
Trustee of the Trust since1 |
Number of John Hancock funds overseen by Trustee |
Andrew G. Arnott, Born: 1971 | 2017 | 207 |
President and Non-Independent Trustee Head of Wealth and Asset Management, United States and Europe, for John Hancock and Manulife (since 2018); Executive Vice President, John Hancock Financial Services (since 2009, including prior positions); Director and Executive Vice President, John Hancock Investment Management LLC (since 2005, including prior positions); Director and Executive Vice President, John Hancock Variable Trust Advisers LLC (since 2006, including prior positions); President, John Hancock Investment Management Distributors LLC (since 2004, including prior positions); President of various trusts within the John Hancock Fund Complex (since 2007, including prior positions). Trustee of various trusts within the John Hancock Fund Complex (since 2017). |
Marianne Harrison, Born: 1963 | 2018 | 207 |
Non-Independent Trustee President and CEO, John Hancock (since 2017); President and CEO, Manulife Canadian Division (2013-2017); Member, Board of Directors, CAE Inc. (since 2019); Member, Board of Directors, MA Competitive Partnership Board (since 2018); Member, Board of Directors, American Council of Life Insurers (ACLI) (since 2018); Member, Board of Directors, Communitech, an industry-led innovation center that fosters technology companies in Canada (2017-2019); Member, Board of Directors, Manulife Assurance Canada (2015-2017); Board Member, St. Mary's General Hospital Foundation (2014-2017); Member, Board of Directors, Manulife Bank of Canada (2013-2017); Member, Standing Committee of the Canadian Life & Health Assurance Association (2013-2017); Member, Board of Directors, John Hancock USA, John Hancock Life & Health, John Hancock New York (2012-2013). Trustee of various trusts within the John Hancock Fund Complex (since 2018). |
Principal officers who are not Trustees
Name, year of birth Position(s) held with fund Principal occupation(s) during past 5 years |
Officer of the Trust since |
Francis V. Knox, Jr., Born: 1947 | 2005 |
Chief Compliance Officer Vice President, John Hancock Financial Services (since 2005); Chief Compliance Officer, various trusts within the John Hancock Fund Complex, John Hancock Investment Management LLC, and John Hancock Variable Trust Advisers LLC (since 2005). |
Charles A. Rizzo, Born: 1957 | 2007 |
Chief Financial Officer Vice President, John Hancock Financial Services (since 2008); Senior Vice President, John Hancock Investment Management LLC and John Hancock Variable Trust Advisers LLC (since 2008); Chief Financial Officer of various trusts within the John Hancock Fund Complex (since 2007). |
Salvatore Schiavone, Born: 1965 | 2010 |
Treasurer Assistant Vice President, John Hancock Financial Services (since 2007); Vice President, John Hancock Investment Management LLC and John Hancock Variable Trust Advisers LLC (since 2007); Treasurer of various trusts within the John Hancock Fund Complex (since 2007, including prior positions). |
Principal officers who are not Trustees (continued)
Name, year of birth Position(s) held with fund Principal occupation(s) during past 5 years |
Officer of the Trust since |
Christopher (Kit) Sechler, Born: 1973 | 2018 |
Chief Legal Officer and Secretary Vice President and Deputy Chief Counsel, John Hancock Investments (since 2015); Assistant Vice President and Senior Counsel (2009-2015), John Hancock Investment Management; Chief Legal Officer and Secretary of various trusts within the John Hancock Fund Complex (since 2018); Assistant Secretary of John Hancock Investment Management LLC and John Hancock Variable Trust Advisers LLC (since 2009). |
The business address for all Trustees and Officers is 200 Berkeley Street, Boston, Massachusetts 02116-5023.
1 | Mr. Boyle, Mr. Cunningham, Ms. Fey, Mr. McClellan and Mr. Russo serve as Trustees for a term expiring in 2020; Mr. Bardelis, Mr. Burgess and Ms. Harrison serve as Trustees for a term expiring in 2021; Mr. Arnott, Ms. Jackson, Mr. Oates and Mr. Pruchansky serve as Trustees for a term expiring in 2022; Mr. Boyle has served as Trustee at various times prior to date listed in the table. |
2 | Member of the Audit Committee. |
3 | The Trustee is a Non-Independent Trustee due to current or former positions with the Advisor and certain of its affiliates. |
Trustees Hassell H. McClellan, Chairperson Officers Andrew G. Arnott Francis V. Knox, Jr. Charles A. Rizzo Salvatore Schiavone Christopher (Kit) Sechler |
Investment advisor John Hancock Investment Management LLC Subadvisors Manulife Investment Management (US) LLC (Manulife IM (US)) Portfolio Managers The Investment Team at Manulife IM (US) and WellsCap Custodian State Street Bank and Trust Company Transfer agent Computershare Shareowner Services, LLC Legal counsel K&L Gates LLP Independent registered public accounting firm PricewaterhouseCoopers LLP Stock symbol Listed New York Stock Exchange: HTD |
* Member of the Audit Committee
Non-Independent Trustee
For shareholder assistance refer to page 6
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800-852-0218 jhinvestments.com |
Regular mail: Computershare |
Express mail: Computershare |
The fund's proxy voting policies and procedures, as well as the fund's proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.
All of the fund's holdings as of the end of the third month of every fiscal quarter are filed with the SEC on Form N-PORT within 60 days of the end of the fiscal quarter. The fund's Form N-PORT filings are available on our website and the SEC's website, sec.gov.
We make this information on your fund, as well as monthly portfolio holdings, and other fund details available on our website at jhinvestments.com or by calling 800-852-0218.
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The fund's investment objectives, risks, charges, and expenses are included in the prospectus and should be considered carefully before investing. For a prospectus, contact your financial professional, call John Hancock Investment Management at 800-852-0218, or visit the fund's website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
ASSET ALLOCATION Balanced Income Allocation Multi-Index Lifetime Portfolios Multi-Index Preservation Portfolios Multimanager Lifestyle Portfolios Multimanager Lifetime Portfolios Retirement Income 2040 EXCHANGE-TRADED FUNDS John Hancock Multifactor Consumer Discretionary ETF John Hancock Multifactor Consumer Staples ETF John Hancock Multifactor Developed International ETF John Hancock Multifactor Emerging Markets ETF John Hancock Multifactor Energy ETF John Hancock Multifactor Financials ETF John Hancock Multifactor Healthcare ETF John Hancock Multifactor Industrials ETF John Hancock Multifactor Large Cap ETF John Hancock Multifactor Materials ETF John Hancock Multifactor Media and John Hancock Multifactor Mid Cap ETF John Hancock Multifactor Small Cap ETF John Hancock Multifactor Technology ETF John Hancock Multifactor Utilities ETF |
ENVIRONMENTAL, SOCIAL, AND ESG All Cap Core ESG Core Bond ESG International Equity ESG Large Cap Core CLOSED-END FUNDS Financial Opportunities Hedged Equity & Income Income Securities Trust Investors Trust Preferred Income Preferred Income II Preferred Income III Premium Dividend Tax-Advantaged Dividend Income Tax-Advantaged Global Shareholder Yield |
John Hancock Multifactor ETF shares are bought and sold at market
price (not NAV), and are not individually redeemed
from the fund. Brokerage commissions will reduce returns.
John Hancock ETFs are distributed by Foreside Fund Services, LLC, and
are subadvised by Dimensional Fund Advisors LP.
Foreside is not affiliated with John Hancock Investment Management
Distributors LLC or Dimensional Fund Advisors LP.
Dimensional Fund Advisors LP receives compensation from John Hancock
in connection with licensing rights to the
John Hancock Dimensional indexes. Dimensional Fund Advisors LP does
not sponsor, endorse, or sell, and makes no
representation as to the advisability of investing in, John Hancock
Multifactor ETFs.
John Hancock Investment Management
A trusted brand
John Hancock Investment Management is a premier asset manager
representing one of America's most trusted brands, with a heritage of
financial stewardship dating back to 1862. Helping our shareholders
pursue their financial goals is at the core of everything we do. It's why
we support the role of professional financial advice and operate with
the highest standards of conduct and integrity.
A better way to invest
We serve investors globally through a unique multimanager approach:
We search the world to find proven portfolio teams with specialized
expertise for every strategy we offer, then we apply robust investment
oversight to ensure they continue to meet our uncompromising
standards and serve the best interests of our shareholders.
Results for investors
Our unique approach to asset management enables us to provide
a diverse set of investments backed by some of the world's best
managers, along with strong risk-adjusted returns across asset classes.
John Hancock Investment Management Distributors LLC
n Member FINRA, SIPC
200 Berkeley Street
n Boston, MA 02116-5010
n 800-225-5291
n jhinvestments.com
MF1003891 | P13A 10/19 12/19 |
ITEM 2. CODE OF ETHICS.
As of the end of the period, October 31, 2019, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief Executive Officer and Chief Financial Officer (respectively, the principal executive officer, the principal financial officer, the “Covered Officers”). A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Peter S. Burgess is the audit committee financial expert and is “independent”, pursuant to general instructions on Form N-CSR Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The aggregate fees for John Hancock Tax-Advantaged Dividend Income Fund billed for professional services rendered by the principal accountant(s) for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant(s) in connection with statutory and regulatory filings or engagements amounted to $39,508 for the fiscal year ended October 31, 2019 and $42,441 for the fiscal period ended October 31, 2018. These fees were billed to the registrant and were approved by the registrant’s audit committee.
(b) Audit-Related Services
The audit-related fees for John Hancock Tax-Advantaged Dividend Income Fund amounted to $5 for the fiscal year ended October 31, 2019 and $0 for the fiscal period ended October 31, 2018 billed to the registrant or to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant ("control affiliates"). In addition, amounts billed to control affiliates for service provider internal controls reviews were $116,467 and $110,200 for the fiscal years ended October 31, 2019 and 2018, respectively.
(c) Tax Fees
The aggregate fees for John Hancock Tax-Advantaged Dividend Income Fund billed for professional services rendered by the principal accountant(s) for the tax compliance, tax advice and tax planning (“tax fees”) amounted to $3,837 for the fiscal year ended October 31, 2019 and $3,725 for the fiscal period ended October 31, 2018. The nature of the services comprising the tax fees was the review of the registrant’s tax returns and tax distribution requirements. These fees were billed to the registrant and were approved by the registrant’s audit committee.
(d) All Other Fees
The all other fees for John Hancock Tax-Advantaged Dividend Income Fund billed to the registrant for products and services provided by the principal accountant were $84 for the fiscal year ended October 31, 2019 and $$239 for the fiscal year ended October 31, 2018 billed to control affiliates for products and services provided by the principal accountant. These fees were approved by the registrant’s audit committee.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The trust’s Audit Committee must pre-approve all audit and non-audit services provided by the independent registered public accounting firm (the “Auditor”) relating to the operations or financial reporting of the funds. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The trust’s Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee’s consideration of audit-related and non-audit services by the Auditor. The policies and procedures require that any audit-related and non-audit service provided by the Auditor and any non-audit service provided by the Auditor to a fund service provider that relates directly to the operations and financial reporting of a fund are subject to approval by the Audit Committee before such service is provided. Audit-related services provided by the Auditor that are expected to exceed $25,000 per instance/per fund are subject to specific pre-approval by the Audit Committee. Tax services provided by the Auditor that are expected to exceed $30,000 per instance/per fund are subject to specific pre-approval by the Audit Committee.
All audit services, as well as the audit-related and non-audit services that are expected to exceed the amounts stated above, must be approved in advance of provision of the service by formal resolution of the Audit Committee. At the regularly scheduled Audit Committee meetings, the Committee reviews a report summarizing the services, including fees, provided by the Auditor.
(e)(2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
Audit-Related Fees, Tax Fees and All Other Fees:
There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.
(f) According to the registrant’s principal accountant, for the fiscal period ended October 31, 2019, the percentage of hours spent on the audit of the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons who were not full-time, permanent employees of principal accountant was less than 50%.
(g) The aggregate non-audit fees billed by the registrant's accountant(s) for services rendered to the registrant and rendered to the registrant's control affiliates for each of the last two fiscal years of the registrant were $$962,139 for the fiscal year ended October 31, 2019 and $2,064,999 for the fiscal period ended October 31, 2018.
(h) The audit committee of the registrant has considered the non-audit services provided by the registrant’s principal accountant(s) to the control affiliates and has determined that the services that were not pre-approved are compatible with maintaining the principal accountant(s)' independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately-designated standing audit committee comprised of independent trustees. The members of the audit committee are as follows:
Peter S. Burgess - Chairman
Charles L. Bardelis
Theron S. Hoffman
ITEM 6. SCHEDULE OF INVESTMENTS.
(a) Not applicable.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
See attached exhibit - Proxy Voting Policies and Procedures.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Information about the portfolio managers
Management Biographies
Management Biographies
Below is a list of the Manulife Investment Management (US) LLC (“Manulife IM (US)”) portfolio managers who share joint responsibility for the day-to-day investment management of the Fund. It provides a brief summary of their business careers over the past five years. Information is provided as of October 31, 2019.
Joseph H. Bozoyan, CFA
Managing Director and Portfolio Manager
Manulife Investment Management (US) LLC since 2015
Began business career in 1993
Managed the Fund since 2015
Bradley Lutz, CFA
Managing Director and Portfolio Manager
Manulife Investment Management (US) LLC since 2002
Began business career in 1992
Managed the Fund since 2018
Other Accounts the Portfolio Managers are Managing
The table below indicates for each portfolio manager information about the accounts over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of October 31, 2019. For purposes of the table, “Other Pooled Investment Vehicles” may include investment partnerships and group trusts, and “Other Accounts” may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts.
Registered Investment | Other Pooled Investment | |||||
Companies | Vehicles | Other Accounts | ||||
Total | Total | Total | ||||
Number of | Assets | Number of | Assets | Number of | Assets | |
Accounts | $Million | Accounts | $Million | Accounts | $Million | |
Joseph H. | 4 | 3,620 | 3 | 464 | None | None |
Bozoyan, | ||||||
CFA | ||||||
Bradley | 4 | 3,620 | 2 | 413 | 4 | 263 |
Lutz, CFA |
Number and value of accounts within the total accounts that are subject to a performance-based advisory fee: None.
Conflicts of Interest. When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. The principal types of potential conflicts of interest that may arise are discussed below. For the reasons outlined below, the Fund does not believe that any material conflicts are likely to arise out of a portfolio manager’s responsibility for the management of the Fund as well as one or more other accounts. The Advisor and Subadvisor have adopted procedures that are intended to monitor compliance with the policies referred to in the following paragraphs. Generally, the risks of such conflicts of interests are increased to the extent that a portfolio manager has a financial incentive to favor one account over another. The Advisor and Subadvisor have structured their compensation arrangements in a manner that is intended to limit such potential for conflicts of interests. See “Compensation of Portfolio Managers” below.
● | A portfolio manager could favor one account over another in allocating new investment opportunities that have limited supply, such as initial public offerings and private placements. If, for example, an initial public offering that was expected to appreciate in value significantly shortly after the offering was allocated to a single account, that account may be expected to have better investment performance than other accounts that did not receive an allocation on the initial public offering. The Subadvisor has policies that require a portfolio manager to allocate such investment opportunities in an equitable manner and generally to allocate such investments proportionately among all accounts with similar investment objectives. |
● | A portfolio manager could favor one account over another in the order in which trades for the accounts are placed. If a portfolio manager determines to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more favorable price than accounts that made subsequent transactions. The less liquid the market for the security or the greater the percentage that the proposed aggregate purchases or sales represent of average daily trading volume, the greater the potential for accounts that make subsequent purchases or sales to receive a less favorable price. When a portfolio manager intends to trade the same security for more than one account, the policies of the Subadvisor generally require that such trades be “bunched,” which means that the trades for the individual accounts are aggregated and each account receives the same price. There are some types of accounts as to which bunching may not be possible for contractual reasons (such as directed brokerage arrangements). Circumstances may also arise where the trader believes that bunching the orders may not result in the best possible price. Where those accounts or circumstances are involved, the Subadvisor will place the order in a manner intended to result in as favorable a price as possible for such client. |
● | A portfolio manager could favor an account if the portfolio manager’s compensation is tied to the performance of that account rather than all accounts managed by the portfolio manager. If, for example, the portfolio manager receives a bonus based upon the performance of certain accounts relative to a benchmark while other accounts are disregarded for this purpose, the portfolio manager will have a financial incentive to seek to have the accounts that determine the portfolio manager’s bonus achieve the best possible performance to the possible detriment of other accounts. Similarly, if the Subadvisor receives a performance-based advisory fee, the portfolio manager may favor that account, whether or not the performance of that account directly determines the portfolio manager’s compensation. The investment performance on specific accounts is not a factor in determining the portfolio manager’s compensation. See “Compensation of Portfolio Managers” below. Neither the Advisor nor the Subadvisor receives a performance-based fee with respect to any of the accounts managed by the portfolio managers. |
● | A portfolio manager could favor an account if the portfolio manager has a beneficial interest in the account, in order to benefit a large client or to compensate a client that had poor returns. For example, if the portfolio manager held an interest in an investment partnership that was one of the accounts managed by the portfolio manager, the portfolio manager would have an economic incentive to favor the account in which the portfolio manager held an interest. The Subadvisor imposes certain trading restrictions and reporting requirements for accounts in which a portfolio manager or certain family members have a personal interest in order to confirm that such accounts are not favored over other accounts. |
● | If the different accounts have materially and potentially conflicting investment objectives or strategies, a conflict of interest may arise. For example, if a portfolio manager purchases a security for one account and sells the same security short for another account, such trading pattern could disadvantage either the account that is long or short. In making portfolio manager assignments, the Subadvisor seeks to avoid such potentially conflicting situations. However, where a portfolio manager is responsible for accounts with differing investment objectives and policies, it is possible that the portfolio manager will conclude that it is in the best interest of one account to sell a portfolio security while another account continues to hold or increase the holding in such security. |
Compensation of Portfolio Managers. The Subadvisor has adopted a system of compensation for portfolio managers and others involved in the investment process that is applied systematically among investment professionals. At the Subadvisor, the structure of compensation of investment professionals is currently composed of the following basic components: base salary and short-and long-term incentives. The following describes each component of the compensation package for the individuals identified as a portfolio manager for the Funds.
● | Base salary. Base compensation is fixed and normally reevaluated on an annual basis. The Subadvisor seeks to set compensation at market rates, taking into account the experience and responsibilities of the investment professional. |
● | Incentives. Only investment professionals are eligible to participate in the short-and long-term incentive plan. Under the plan, investment professionals are eligible for an annual cash award. The plan is intended to provide a competitive level of annual bonus compensation that is tied to the investment professional achieving superior investment performance and aligns the financial incentives of the Subadvisor and the investment professional. Any bonus under the plan is completely discretionary, with a maximum annual bonus that may be well in excess of base salary. Payout of a portion of this bonus may be deferred for up to five years. While the amount of any bonus is discretionary, the following factors are generally used in determining bonuses under the plan: |
● | Investment Performance: The investment performance of all accounts managed by the investment professional over one, three and five-year periods are considered and no specific benchmark is used to measure performance. With respect to fixed income accounts, relative yields are also used to measure performance. |
● | Financial Performance: The profitability of the Subadvisor and its parent company are also considered in determining bonus awards. |
● | Non-Investment Performance: To a lesser extent, intangible contributions, including the investment professional’s support of client service and sales activities, new fund/strategy idea generation, professional growth and development, and management, where applicable, are also evaluated when determining bonus awards. |
● | In addition to the above, compensation may also include a revenue component for an investment team derived from a number of factors including, but not limited to, client assets under management, investment performance, and firm metrics. |
● | Manulife Equity Awards. A limited number of senior investment professionals may receive options to purchase shares of Manulife Financial stock. Generally, such option would permit the investment professional to purchase a set amount of stock at the market price on the date of grant. The option can be exercised for a set period (normally a number of years or until termination of employment) and the investment professional would exercise the option if the market value of Manulife Financial stock increases. Some investment professionals may receive restricted stock grants, where the investment professional is entitled to receive the stock at no or nominal cost, provided that the stock is forgone if the investment professional’s employment is terminated prior to a vesting date. |
● | Deferred Incentives. Investment professionals may receive deferred incentives which are fully invested in strategies managed by the team/individual as well as other Manulife Asset Management strategies. |
The Subadvisor also permits investment professionals to participate on a voluntary basis in a deferred compensation plan, under which the investment professional may elect on an annual basis to defer receipt of a portion of their compensation until retirement. Participation in the plan is voluntary.
Share Ownership by Portfolio Managers. For purposes of these tables, “similarly managed accounts” include all accounts that are managed (i) by the same portfolio managers that are jointly and primarily responsible for the day-to-day management of the Fund; and (ii) with an investment style, objective, policies and strategies substantially similar to those that are used to manage the Fund.
Range of Beneficial | ||
Range of Beneficial Ownership | Ownership in similarly | |
Portfolio Manager | in the Fund | managed accounts |
Joseph H. Bozoyan, CFA |
$10,001-$50,000 | $10,001-$50,000 |
Bradley Lutz, CFA |
$10,001-$50,000 | $10,001-$50,000 |
Information about the Wells Capital Management Incorporated portfolio managers
Management Biographies
Below is an alphabetical list of the Wells Capital Management Incorporated (“WellsCap”) portfolio managers who share joint responsibility for the implementation and execution of the Fund’s options strategy. It provides a brief summary of their business careers. Information is provided as of October 31, 2019.
Dennis M. Bein, CFA
Chief Investment Officer and Portfolio Manager, Wells Capital Management Incorporated since 1995
Began business career in 1990
Managed the Fund since 2007
Harindra de Silva, Ph.D., CFA
President and Portfolio Manager, Wells Capital Management Incorporated since 1995
Began business career in 1984
Managed the Fund since 2007
Gregory M. McMurran
Chief Investment Officer and Portfolio Manager, Wells Capital Management Incorporated since 1976
Began business career in 1976
Managed the Fund since 2007
Megan N. Miller, CFA
Portfolio Manager, Wells Capital Management Incorporated since 2014
Began business career in 2008
Managed Fund since 2018
Other Accounts the Portfolio Managers are Managing
The table below indicates for each portfolio manager information about the accounts over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of October 31, 2019. For purposes of the table, “Other Pooled Investment Vehicles” may include investment partnerships and group trusts, and “Other Accounts” may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts.
Registered Investment | Other Pooled Investment | |||||
Companies | Vehicles | Other Accounts | ||||
Total | Total | Total | ||||
Number of | Assets | Number of | Assets | Number of | Assets | |
Accounts | $Million | Accounts | $Million | Accounts | $Million | |
Dennis M. | 18 | 5,858.42 | 20 | 7,768.72 | 27 | 6,340.94 |
Bein, CFA | *(0) | *(0) | *(2) | *(169.89) | *(3) | *(427.28) |
Harindra de | 18 | 5,858.42 | 21 | 7,793.09 | 31 | 6,431.06 |
Silva, Ph.D., | ||||||
CFA | *(0) | *(0) | *(2) | *(169.89) | *(3) | *(427.28) |
Gregory M. | 2 | 80.94 | 1 | 24.37 | 0 | 0 |
McMurran | *(0) | *(0) | *(0) | *(0) | *(0) | *(0) |
Megan N. | 2 | 80.94 | 1 | 24.37 | 0 | 0 |
Miller, CFA | *(0) | *(0) | *(0) | *(0) | *(0) | *(0) |
Note: (*) represents the number and value of accounts, within the total accounts that are subject to a performance-based advisory fee.
POTENTIAL CONFLICTS OF INTEREST
Wells Capital Management’s Portfolio Managers often provide investment management for separate accounts advised in the same or similar investment style as that provided to mutual funds. While management of multiple accounts could potentially lead to conflicts of interest over various issues such as trade allocation, fee disparities and research acquisition, Wells Capital Management has implemented policies and procedures for the express purpose of ensuring that clients are treated fairly and that potential conflicts of interest are minimized.
Wells Capital Management investment professionals have responsibilities for managing investments of multiple accounts with a common investment strategy, including other registered investment companies, unregistered investment vehicles, pension plans, separate accounts, collective trusts and charitable foundations. Potential conflicts of interest may arise when an investment professional has responsibilities for the investments of more than one account because, inter alia, the investment professional may be unable to devote equal time and attention to each account; other accounts may have higher fee arrangements and may also have a performance-based fee; the side-by-side management of these funds may raise potential conflicts of interest relating to cross trading, the allocation of investment opportunities and the aggregation and allocation of trades.
As an investment adviser, Wells Capital Management has fiduciary responsibilities to act in the best interests of its clients. Such duties include: reasonable and independent basis for its investment advice, seeking best price execution for clients' securities transactions, ensuring that the investment advice is suitable to the client's objectives, and refraining from engaging in personal securities transactions inconsistent with client interests. To minimize any potential client investment conflicts, Wells Capital Management manages its advisory services, fee structure, and investment selection process in accordance with pre-established client investment guidelines, the advisory contract with the client, and all applicable policies and procedures pursuant to Rule 206(4)-7 of the Advisers Act. Wells Capital Management has a fiduciary responsibility to manage all client accounts in a fair and equitable manner. It seeks to provide best execution of all securities transactions and aggregate and allocate securities to client accounts in a fair and timely manner. To this end, Wells Capital Management has developed policies and procedures designed to mitigate and manage the potential conflicts of interest that may arise from side-by-side management. In addition, Wells Capital Management has adopted policies limiting the circumstances under which cross-trades may be affected between the Portfolio and another client account. Wells Capital Management conducts periodic reviews of trades for consistency with these policies.
COMPENSATION
The compensation structure for Wells Capital Management's Portfolio Managers includes a competitive fixed base salary plus variable incentives, payable annually and over a longer term period. Wells Capital Management participates in third party investment management compensation surveys for market-based compensation information to help support individual pay decisions. In addition to surveys, Wells Capital Management also considers prior professional experience, tenure, seniority and a Portfolio Manager's team size, scope and assets under management when determining his/her fixed base salary.
In addition, Portfolio Managers, who meet the eligibility requirements, may participate in Wells Fargo's 401(k) plan that features a limited matching contribution. Eligibility for and participation in this plan is on the same basis for all employees. Wells Capital Management also contributes to other employee benefits such as health and disability plans and paid time off, and encourages and supports personal professional development. The compensation structure and incentive programs will continually evolve in order to provide career growth, pay increase opportunities, incentive payment plan rewards and to balance the overall needs of the organization and its employees. In addition, senior management at Wells Capital maintains an ongoing assessment of resources within each team to support portfolio management and research needs.
Wells Capital Management's investment incentive program plays an important role in aligning the interests of our portfolio managers, investment team members, clients and shareholders. Incentive awards for portfolio managers are determined based on a review of relative investment and business/team performance. Investment performance is generally evaluated for 1, 3, and 5 year performance results, with a predominant weighting on the 3- and 5- year time periods, versus the relevant benchmarks and/or peer groups consistent with the investment style. In the case of each Fund, the benchmark(s) against which the performance of the Fund's portfolio may be compared for these purposes generally are indicated in the "Average Annual Total Returns" table in the Prospectus. Once determined, incentives are awarded to portfolio managers annually, with a portion awarded as annual cash and a portion awarded as long term incentive. The long term portion of incentives generally carry a pro-rated vesting schedule over a three year period. For many of our portfolio managers, Wells Capital Management further requires a portion of their annual long-term award be allocated directly into each strategy they manage through a deferred compensation vehicle. In addition, our investment team members who are eligible for long term awards also have the opportunity to invest up to 100% of their awards into investment strategies they support (through a deferred compensation vehicle).
Share Ownership by Portfolio Managers. The following table indicates as of October 31, 2019 the value of shares beneficially owned by the portfolio managers in the Fund.
Range of Beneficial Ownership in the | |
Portfolio Manager | Fund |
Dennis M. Bein, CFA | None |
Harindra de Silva, Ph.D., CFA | None |
Gregory M. McMurran | None |
Megan N. Miller, CFA | None |
(a) Not applicable
(b)
REGISTRANT PURCHASES OF EQUITY SECURITIES
Maximum | ||||
Total number | number of | |||
of shares | shares that | |||
purchased as | may yet be | |||
Total number | part of publicly | purchased | ||
of shares | Average price | announced | under the | |
Period | purchased | per share | plans* | plans* |
Nov-18 | - | - | - | 3,539,294 |
Dec-18 | - | - | - | 3,539,294 |
Jan-19 | - | - | - | 3,539,294 |
Feb-19 | - | - | - | 3,539,294 |
Mar-19 | - | - | - | 3,539,294 |
Apr-19 | - | - | - | 3,539,294 |
May-19 | - | - | - | 3,539,294 |
Jun-19 | - | - | - | 3,539,294 |
Jul-19 | - | - | - | 3,539,294 |
Aug-19 | - | - | - | 3,539,294 |
Sep-19 | - | - | - | 3,539,294 |
Oct-19 | - | - | - | 3,539,294 |
Total | - | - | - |
*In December 2007, the Board of Trustees approved a share repurchase plan, which is subsequently reviewed and approved by the Board of Trustees each year in December. Under the current share repurchase plan, the Fund may purchase in the open market up to 10% of its outstanding common shares as of December 31, 2018. The current share repurchase plan will remain in effect between January 1, 2019 and December 31, 2019.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The registrant has adopted procedures by which shareholders may recommend nominees to the registrant's Board of Trustees. A copy of the procedures is filed as an exhibit to this Form N-CSR. See attached "John Hancock Funds – Nominating and Governance Committee Charter".
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The Fund did not participate directly in securities lending activities. See Note 8 to financial statements in Item 1.
ITEM 13. EXHIBITS.
(a)(1) Code of Ethics for Senior Financial Officers is attached.
(a)(2) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.
(b) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.
(c)(1) Proxy Voting Policies and Procedures are attached.
(c)(2) Submission of Matters to a Vote of Security Holders is attached. See attached John Hancock Funds Nominating and Governance Committee Charter.
(c)(3) Registrants notice to shareholders pursuant to Registrants exemptive order granting an exemption from Section 19(b) of the Investment Company Act of 1940, as amended and Rule 19b-1 thereunder regarding distributions made pursuant to the Registrants Managed Distribution Plan.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
John Hancock Tax-Advantaged Dividend Income Fund
By: | /s/ Andrew Arnott |
Andrew Arnott | |
President | |
Date: | December 13, 2019 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Andrew Arnott |
Andrew Arnott | |
President | |
Date: | December 13, 2019 |
By: | /s/ Charles A. Rizzo |
Charles A. Rizzo | |
Chief Financial Officer | |
Date: | December 13, 2019 |
John Hancock Code of Ethics
January 1, 2008
(Revised January 1, 2019)
This is the Code of Ethics for the following:
John Hancock Advisers, LLC and
John Hancock Investment Management Services,
LLC
(each, a “John Hancock Adviser”)
John Hancock Funds, LLC
John Hancock Distributors, LLC,
each open-end fund, closed-end fund, and exchange traded
fund advised by a John Hancock Adviser
(the “John Hancock Affiliated Funds”),
and
John Hancock Worldwide Investors, PLC
(together, called “John Hancock”)
Table of Contents | |
Introduction | 4 |
Standards of Business Conduct | 5 |
Applicability and Scope | 5 |
Access Levels | 6 |
Access Level 1 | 6 |
Access Level 2 | 6 |
Access Level 3 | 7 |
Overview of Rules for All Access Persons | 7 |
Brokerage Account Disclosure | 7 |
Brokerage Account Examples (non-exclusive list) | 7 |
Employee Compensation Instruments (non-exclusive list) | 8 |
College Savings Plans - 529s | 8 |
401(k) and John Hancock Variable Products: John Hancock Affiliated Funds Reporting | 9 |
Managed Accounts | 9 |
Preferred Brokerage Account Requirements | 9 |
Opening/Closing Accounts | 9 |
Statements and Duplicate Confirmations of Trades | 10 |
Personal Trading | 10 |
Personal Trading Restrictions for all Access Persons | 10 |
Reporting and Pre-clearance | 11 |
Level 1 Access Persons: Additional Personal Trading Restrictions and Disclosures | 11 |
Level 2 Access Persons: Additional Personal Trading Restrictions and Disclosures | 14 |
Level 3 Access Persons: Additional Personal Trading Restrictions and Disclosures | 16 |
Pre-clearance Process | 16 |
Reporting and Certification Requirements | 17 |
Reporting | 17 |
Reporting Upon Designation | 17 |
Quarterly Reporting | 17 |
Annual Reporting | 18 |
Ad Hoc Reporting | 18 |
Administration and Enforcement | 18 |
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Administration of the Code | 18 |
Subadviser Compliance | 18 |
Adoption and Approval | 19 |
Subadviser Reporting & Recordkeeping Requirements | 19 |
Reporting to the Board | 19 |
Reporting Violations | 20 |
Exemptions & Appeals | 20 |
Exemptions | 20 |
Appeals | 21 |
Interpretation and Enforcement | 21 |
Education of Employees | 22 |
Recordkeeping | 22 |
Other Important Policies | 23 |
MFC Code of Business Conduct & Ethics (All Covered Employees) | 23 |
John Hancock Conflicts of Interest Policy (All Covered Employees) | 23 |
John Hancock Gift & Entertainment Policy (All Covered Employees) | 24 |
John Hancock Insider Trading Policy (All Covered Employees) | 24 |
John Hancock Pay to Play Rule on Political Contributions (All Covered Associates) | 24 |
John Hancock Whistleblower Policy (All Covered Employees) |
25 |
Policy and Procedures Regarding Disclosure of Portfolio Holdings (All Covered Employees) | 25 |
Additional Policies Outside the Code (All Covered Employees) | 26 |
Appendix | 27 |
Definitions | 27 |
Preferred Brokers List | 31 |
Access Persons | 32 |
Compliance Contacts | 33 |
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Introduction
John Hancock is required by law to adopt a Code of Ethics. The purpose of a Code of Ethics is to ensure that companies and their Covered Persons comply with all applicable laws and to prevent abuses in the investment advisory business that can arise when conflicts of interest exist between the employees of an investment advisor and its clients. By adopting and enforcing a Code of Ethics, we strengthen the trust and confidence entrusted in us by demonstrating that at John Hancock, client interests come first.
The Code of Ethics (the Code) that follows represents a balancing of important interests. On the one hand, as registered investment advisers, the John Hancock Advisers owe a duty of undivided loyalty to their clients and must avoid even the appearance of a conflict that might be perceived as abusing the trust they have placed in John Hancock. On the other hand, the John Hancock Advisers do not want to prevent conscientious professionals from investing for their own accounts where conflicts do not exist or that are immaterial to investment decisions affecting the John Hancock Advisers’ clients.
When conflicting interests cannot be reconciled, the Code makes clear that, first and foremost, Covered Persons owe a fiduciary duty to John Hancock clients. In most cases, this means that the affected employee will be required to forego conflicting personal securities transactions. In some cases, personal investments will be permitted, but only in a manner, which, because of the circumstances and applicable controls, cannot reasonably be perceived as adversely affecting John Hancock client portfolios or taking unfair advantage of the relationship John Hancock employees have to John Hancock clients.
The Code contains specific rules prohibiting defined types of conflicts. Since every potential conflict cannot be anticipated by the Code, it also contains general provisions prohibiting conflict situations. In view of these general provisions, it is critical that any Covered Person who is in doubt about the applicability of the Code in a given situation seek a determination from Chief Compliance Officer (CCO), designee, or the Code of Ethics Administration Group about the propriety of the conduct in advance.
It is critical that the Code be strictly observed. Not only will adherence to the Code ensure that John Hancock renders the best possible service to its clients, it will help to ensure that no individual is liable for violations of law.
It should be emphasized that adherence to this policy is a fundamental condition of employment at John Hancock. Every Covered Person is expected to adhere to the requirements of the Code despite any inconvenience that may be involved. Any Covered Person failing to do so may be subject to disciplinary action, including financial penalties and termination of employment as determined by the Chief Compliance Officer, designee, or Ethics Oversight Committee.
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Standards of Business Conduct
Each Covered Person within the John Hancock organization is responsible for maintaining the very highest ethical standards when conducting our business.
This means that you must at all times:
● | Place the interests of clients first. You have a fiduciary duty at all times to place the interests of our clients and fund investors first. |
● | Conduct all personal trading in full compliance with this Code. All of your personal securities transactions must be conducted consistent with the provisions of the Code that apply to you and in such a manner as to avoid any actual or potential conflict of interest or other abuse of your position of trust and responsibility. |
● | Avoid taking inappropriate advantage of your position at John Hancock. You should not take inappropriate advantage of your position or engage in any fraudulent or manipulative practice (such as front-running or manipulative market timing) with respect to our clients’ accounts or fund investors. |
● | Maintain confidentiality of our clients and John Hancock. You must treat as confidential any information concerning the identity of security holdings and financial circumstances of clients or fund investors. |
● | Comply with applicable Federal Securities Laws. You must comply with all applicable federal Securities Laws. |
● | Report any violation of the Code. You must promptly report any violation of the Code that comes to your attention to the Chief Compliance Officer (or designee) of your company. |
It is essential that you understand and comply with the general principles, noted above, in letter and in spirit as no set of rules can anticipate every possible problem or conflict situation. Failure to comply with the general principles and the provisions of the Code may result in disciplinary action, including termination of employment.
Applicability and Scope
Individuals subject to this policy will be notified by the CCO, designee, or the Code of Ethics Administration Group. Generally, if you meet the requirements listed below, you are deemed an Access Person1 and this Code applies to you2:
● | a director, officer or other Supervised Person of a John Hancock Adviser; |
● | an interested director, officer or Access Person of John Hancock Funds, LLC, John Hancock Distributors, LLC, or a John Hancock open-end or closed-end fund registered under the 1940 Act and are advised by a John Hancock Adviser; 3 |
● | an employee of Manulife Financial Corporation (MFC) or its subsidiaries who participates in making recommendations for, or receives information about, portfolio |
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trades or holdings of the John Hancock Affiliated Funds. 4 |
Access Levels
The requirements of this policy will differ depending on your Access Level category. There are three categories for persons covered by the Code, taking into account position, duties and access to information regarding fund portfolio trades.5 You will receive notification as to your particular category, based on the Code of Ethics Administration Group’s understanding of your current role. If you have a level of investment access beyond your assigned category, or if you are promoted or change duties and as a result should more appropriately be included in a different category, it is your responsibility to notify the CCO, designee, or the Code of Ethics Administration Group.
Please note: If a specific Code provision (examples: personal investing restriction or limitations, pre-clearance obligation, or reporting obligation, etc.) applies to the Access Person, it also applies to all Securities and Brokerage Accounts over which the Access Person has Beneficial Ownership.
Access Level 1
A person who, in connection with his/her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by the Fund or account.
Examples (may include but are not limited to):
● | Portfolio Managers |
● | Analysts |
● | Traders |
Access Level 2
A person who, in connection with his/her regular functions or duties, has regular access to nonpublic information regarding any clients' purchase or sale of securities, nonpublic information regarding the portfolio holdings of any John Hancock Affiliated Fund, is involved in making securities recommendations to clients, or has regular access to such recommendations that are nonpublic.
Examples (may include but are not limited to):
● | Office of the Chief Compliance Officer |
● | Fund Administration |
● | Investment Management Services |
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● | Administrative Personnel for Access Level I Persons |
● | Technology Resources Personnel (as designated) |
● | Legal Staff |
● | Marketing (as designated) |
Access Level 3
A person who, in connection with his/her regular functions or duties, has periodic access to nonpublic information regarding any clients' purchase or sale of securities or nonpublic information regarding the portfolio holdings of any John Hancock Affiliated Fund.
Examples (may include but are not limited to):
● | Marketing (as designated) |
● | Product Development |
● | E-Commerce |
● | Corporate Publishing |
● | Administrative Personnel for Access Level II Persons |
● | Technology Resources Personnel (as designated) |
Overview of Rules for All Access Persons
This policy contains rules regarding your obligations to comply with federal Securities Laws and John Hancock’s standards of conduct. Access Persons are responsible for complying with the personal trading restrictions and obligations of their access designation level including: Brokerage Account disclosure, personal trading restrictions, pre-clearance requirements, disclosure requirements, and various reporting and certification requirements.
Brokerage Account Disclosure
You must use the Personal Trading Control Center (PTCC), the automated compliance system, to disclose all Brokerage Accounts that have the capability to hold Reportable Securities including all Brokerage Accounts:
● | of your own; regardless of what is currently held in the account, |
● | of your spouse, Significant Other, minor children or family members sharing the same household (Household Family Member), |
● | over which you have discretion or give advice or information, and/or |
● | in which your Household Family Member have Beneficial Ownership, or the opportunity to directly or indirectly profit or share in any profit derived from a Reportable Securities transaction. |
Brokerage Account Examples (non-exclusive list)
You need to report:
● | Brokerage Accounts |
● | John Hancock 401(k) accounts |
● | MFC Global Share Ownership Plan (GSOP) |
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● | Solium accounts (some if they hold reportable securities including options on MFC securities) |
● | Self-directed IRA accounts |
● | Custodial accounts |
● | Mutual fund accounts* |
● | College investment plans 529s* |
● | 401(k)/403(b) accounts* |
● | Dividend reinvestment program or dividend reinvestment plan (DRIP) |
● | Registered Retirement Savings Plan (RRSP/RESP/TFSA) |
● | Stock Purchase accounts |
*if they have the capability to hold John Hancock Affiliated Funds
Employee Compensation Instruments (non-exclusive list)
You need to report:
● | John Hancock 401(k) |
● | MFC Global Share Ownership Plan (GSOP) |
● | Options acquired from MFC (only MFC Solium account options that are granted) |
● | Public company employer as part of employee compensation |
● | Sole discretion accounts |
● | Accounts holding John Hancock Affiliated Funds |
● | Certain Manulife Pension Plans (RPS, RRSP) |
You are not responsible for reporting:
● | MFC Restricted Share Units (RSU) |
● | Deferred Share Units (DSU) |
● | Performance Share Units (PSU) |
● | US John Hancock Pension Plans |
● | Employer phantom stock/phantom option interest (granted as compensation to employee, only employer can redeem interest and interest is non-transferrable) |
To prevent any potential violations of the Code, you are strongly encouraged to request clarification for accounts that are in question from the Code of Ethics Administration Group INVDIVCodeofEthics@manulife.com.
College Savings Plans - 529s
You must report John Hancock affiliated 529 plans including both the Freedom 529 plan and any other 529 plans that can hold John Hancock Affiliated Funds. You are not required to report transactions or holdings in 529 Plans for which the Adviser or a control affiliate does not manage, distribute, market or underwrite the 529 Plan or the investments and strategies underlying the 529 Plan. If you have any questions about this requirement, please contact the Code of Ethics Administration Group or a member of the Office of the CCO.
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401(k) and John Hancock Variable Products: John Hancock Affiliated Funds Reporting
You must report your holdings and trades in a John Hancock Affiliated Funds. This includes voluntary trades in your John Hancock affiliated accounts such as your 401(k) and any external Brokerage Account.
To comply with this requirement, if you purchase a John Hancock variable product you must provide your contract or policy number to the Code of Ethics Administration Group and if you have a John Hancock 401(k), you must you must enter the Brokerage Account on PTCC.
Managed Accounts
Managed Accounts are considered fully managed if neither Access Person nor Household Family Member has no direct influence or control. Prior to the execution of Reportable Securities transactions in the Managed Account, you must obtain approval from the Chief Compliance Officer (or designee). Once the Brokerage Account is approved as a Managed Account, in writing from the CCO (or designee) of the Adviser/Trust, the transactions do not need to be pre-cleared. Exemption requests which pose a conflict of interest for the Chief Compliance Officer (or designee) will be escalated to the Ethics Oversight Committee for review and consideration.
You may request approval by disclosing the Brokerage Account in the automated compliance system, marking it as a Managed Account and by providing the appropriate evidence as described below. You are required to provide evidence that you or your Household Family Member has no direct or indirect influence or control including not being able to:
1) |
Suggest that the trustee or third-party discretionary manager make any particular purchases or sales of Reportable Securities; |
2) |
Direct the trustee or third-party discretionary manager to make any particular purchases or sales of Reportable Securities; and |
3) |
Consult with the trustee or third-party discretionary manager as to the particular allocation of investments to be made in your account. |
You may also be asked to periodically attest to the status of the Managed Account and provide electronic feeds or duplicate statements.
Preferred Brokerage Account Requirements
You must maintain your Brokerage Accounts at one of the preferred brokers approved by John Hancock. Upon designation as an Access Person, you have 45 calendar days to (i) qualify any non-compliant Brokerage Account as an exempt account or (ii) transfer all assets to a preferred broker and close the non-compliant account. Please note that you are not required to move 401(k) accounts. Exceptions may be granted with the approval from the CCO, CCO’s designee, or the Code of Ethics Administration Group. Requests for exceptions to this policy must be submitted in writing to the Code of Ethics Administration Group. A list of the Preferred Brokers can be found in the Appendix.
Opening/Closing Accounts
You are required to report each transaction in any Reportable Security to the Code of Ethics Administration Group. To comply with this requirement, you:
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● |
Are required to notify the Code of Ethics Administration team within 10 days of opening or closing a Brokerage Account. In the case of a new Brokerage Account in which you have a beneficial interest, you must notify the Code of Ethics Administration Group before any trades are placed. |
● |
Are required by this Code and by the Insider Trading Policy to inform your broker-dealer that you are employed by a financial institution. Your broker-dealer is subject to certain rules designed to prevent favoritism toward your Brokerage Accounts. You may not accept negotiated commission rates that you believe may be more favorable than the broker grants to accounts with similar characteristics. |
● |
Must notify the broker-dealer if you are registered with the Financial Industry Regulatory Authority or are employed by John Hancock Funds, LLC or John Hancock Distributors, LLC. |
Statements and Duplicate Confirmations of Trades
The Code of Ethics Administration Group may rely on information submitted by your broker as part of your reporting requirements under the Code. Upon notification of your Brokerage Account, the Code of Ethics Administration Group will notify the broker-dealer to have duplicate confirmations of any trade, as well as statements or other information concerning the Brokerage Account, sent to:
John Hancock Financial Services
Attention: General Funds Compliance
197 Clarendon Street, C-03-13
Boston, MA 02116
Personal Trading
Personal Trading is a privilege and must always come second to the fiduciary duty you owe to our clients. Below is a list of personal trading restrictions for all Access Persons.
All Access Persons must:
● | Disclose holdings in Reportable Securities (including John Hancock Affiliated Funds and John Hancock Variable Products) |
● | Disclose Brokerage Accounts |
● | Pre-clear applicable Reportable Securities transactions |
Personal Trading Restrictions for all Access Persons
All Access Persons are prohibited from:
● | Profiting from the purchase and sale of a John Hancock Affiliated Fund within 30 calendar days. |
● | Engaging in speculative transactions involving MFC securities including: options, hedging or short sales involving securities issues by Manulife. |
● | Transacting in securities that appear on the confidential John Hancock Restricted list (pre-clearance requests will be denied). |
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● | Transacting in Initial Public Offerings (IPOs), Private Placements, and Limited Offerings without obtaining proper pre-clearance approval.6 |
● | Transacting in securities while in possession of material nonpublic information including but not limited to: fund events, due diligence visits etc. |
An Access Person who either directs 45 or more trades in a quarter or redeems shares of a John Hancock Affiliated Fund within 30 days of purchase, should expect additional scrutiny of his or her trades and he or she may be subject to limitations on the number of trades allowed during a given period.
Reporting and Pre-clearance
As an Access Person, you are required to report to the Code of Ethics Administration Group each transaction in any Reportable Security. You must ensure that all transactions (unless it is an Involuntary Issuer Transaction) and holdings in Reportable Securities are properly reflected in the requisite initial, quarterly and annual reporting certifications. To facilitate the reporting process, please ensure that you have properly disclosed your correct Brokerage Account information to the Code of Ethics Administration Group in the automated compliance system, including the disclosure of participation in the John Hancock 401(k) and Manulife GSOP.
The transaction and holding reporting requirement does not include John Hancock money market funds or any dividend reinvestment, payroll deduction, systematic investment/withdrawal and/or other program trades. Please note that different requirements apply to shares of John Hancock Affiliated Funds, including a 30-day holding period requirement.
As an Access Person, in addition to your reporting obligations, you have pre-clearance obligations for certain securities, depending on your Access Level group. Please see the appropriate access level below, for more detailed information.
Level 1 Access Persons: Additional Personal Trading Restrictions and Disclosures
Please note, there are additional restrictions that apply to all Access Persons listed in the section entitled, “Personal Trading Restrictions for All Access Persons”.
Level 1 Access Persons
● | Pre-clear MFC Securities: You must pre-clear all transactions in MFC securities including stock, company issued options, securities such as debt, and sell transactions in the MFC Global Share Ownership Plan. |
● | Pre-clear all of the following securities: You must pre-clear and receive approval prior to transactions in the following securities: |
● | Stocks; including sell transactions of MFC Shares held in your Global Share Ownership Plan |
6 Please note, Level 1 Access Persons and Registered Representatives are prohibited from purchasing IPOs.
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● | Bonds; |
● | Government securities that are not direct obligations of the U.S. government, such as Fannie Mae, or municipal securities, in each case that mature in more than one year; |
● | John Hancock Affiliated Funds;7 |
● | Closed-end funds (including John Hancock affiliated closed-end funds) |
● | Options on securities, on indexes, and on currencies; |
● | Swaps on securities, on indexes, and on currencies; |
● | Limited partnerships; |
● | Exchange traded funds and notes; |
● | Domestic unit investment trusts; |
● | Non-US unit investment trusts and Non-US mutual funds; |
● | Private investment funds and hedge funds; and |
● | Futures, investment contracts or any other instrument that is considered a “security” under the Securities Act of 1933; |
● | Private Placements, limited offerings8. |
● | Ban on IPOs: You may not acquire securities in an IPO. You may not purchase any newly-issued Reportable Security until it is listed on a public exchange. |
● | Seven Day Blackout: You are prohibited from buying or selling a Reportable Security within 7 calendar days before or after that Reportable Security is traded for a fund that the Person manages or for a John Hancock Affiliated Fund unless no conflict of interest exists in relation to that Reportable Security as determined by the Code of Ethics Administration Group. |
● | Gifting Reportable Securities: If you gift or donate shares of a Reportable Security it is considered a sale and you must receive pre-clearance approval. |
● | Inheriting Reportable Securities: If you inherit shares of a Reportable Security you must notify the Code of Ethics Administration Group within 10 days. |
● | 30 Day Hold John Hancock Affiliated Funds: You cannot profit from the purchase and sale of a John Hancock Affiliated Funds within 30 calendar days. |
● | 60 Day Hold: You may not profit from the purchase and sale (or sale and purchase) of the same (or equivalent) Reportable Security (see note on John Hancock Affiliated Funds) within 60 calendar days, also known as a “Ban on Short Term Profits”. |
○ | Exclusion: pre-clearance requests in a Reportable Security with a market capitalization of $5 billion or more would, in most cases, not be subject to the 60 day hold and would be approved if they are appropriately pre-cleared. |
● |
Ownership Ban: Securities of Subadvisers: you are prohibited from owning securities of any subadviser of a John Hancock Affiliated Fund.9 |
● | Must promptly disclose: |
7 John Hancock Affiliated open ended mutual funds do not require pre-clearance, only reporting. However, there are certain holding period requirements. A list of John Hancock Affiliated Funds can be found on PTCC.
8 Level 1 Access Persons are banned from participation in IPOs.
9 MFC securities are excluded from Level 1 &Level 2 subadviser ownership prohibition. The list of securities of subadvisers can be found on the automated compliance system or upon request from the CCO.
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○ | Ownership of Securities Under Consideration for John Hancock Affiliated Fund: Any direct or indirect beneficial interest in a Reportable Security that is under consideration for purchase or sale in a John Hancock Affiliated Fund. |
○ | Private Placement Conflicts: You must disclose holdings of any Reportable Securities purchased in a private placement when you participate in a decision to purchase or sell that same issuer’s securities for a John Hancock Affiliated Fund. |
● | Restriction on Securities Under Active Consideration: You are prohibited from buying or selling a Reportable Security if the Reportable Security is being actively traded by a John Hancock Affiliated Fund. |
○ | Exceptions: |
■ | De Minimis Trading: pre-clearance requests for 500 shares or less of a particular Reportable Security within a market value of $25M or less, aggregated daily, would, in most cases, not be subject to the 7-day blackout period restrictions and the restriction on actively traded securities. |
■ | Market Cap Securities: pre-clearance requests in a Reportable Security with a market capitalization of $5B or more would not be subject to the blackout period restrictions and the restriction on actively traded securities. |
● |
Pre-clearance of Exchange Traded Funds/Exchange Traded Notes (ETF/ETN) and Options on Reportable Securities: you are required to pre-clear ETFs, ETNs and Options on Reportable Securities. |
○ |
Exceptions to the pre-clearance requirement for ETF/ETN or options on Reportable Securities (provided it is not a John Hancock Affiliated Fund): |
○ |
has an average market capitalization of $5 billion or more; |
○ |
is based on a non-covered security; |
○ |
or is based on a Broad-Based Index. |
● |
Prohibition on Investment Clubs, Good Until Canceled Orders, or Limit Orders: You may not participate in: |
○ | investment clubs, |
○ | “good until cancelled orders”, or |
○ | “limit orders” unless the limit orders are day orders that automatically expire at the end of the trading day and cancel any orders that have not been executed. |
Investment Professionals Only
Level 1 Access Persons who are “Investment Professionals” (Analysts and Portfolio Managers) must disclose the following:
○ | Ownership of 5% or Greater: 5% or greater interest in a company, John Hancock Affiliated Funds and its affiliates may not make any investment in that company; |
○ | Ownership of 1% or greater 1% or greater interest in a company, you cannot participate in any decision by John Hancock Funds and its affiliates to buy or sell that company’s securities; |
● | ANY other interest in a company, you cannot recommend or participate in a |
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decision by John Hancock Affiliated Funds, and its affiliates to buy or sell that company’s securities unless your personal interest is fully disclosed at all stages of the investment decision.
In such instances, you must initially disclose that beneficial interest orally to the primary portfolio manager (or other appropriate analyst) of the Affiliated Fund or account or the appropriate Chief Investment Officer. Following the oral disclosure, you must send a written acknowledgement to the primary portfolio manager with a copy to the Code of Ethics Administration Group.
Level 2 Access Persons: Additional Personal Trading Restrictions and Disclosures
Please note, there are additional restrictions that apply to all Access Persons listed in the section entitled, “Personal Trading Restrictions for All Access Persons”.
Level 2 Access Persons:
● | Pre-clear MFC Securities: You must pre-clear all transactions in MFC securities including stock, company issued options, sell transactions in the MFC Global Share Ownership Plan, and any other securities such as debt. |
● | Pre-clear the following securities: You must pre-clear and receive approval prior to transactions in the following securities: |
● | Stocks; including sell transactions of MFC Shares held in your Global Share Ownership Plan |
● | Bonds; |
● | Government securities that are not direct obligations of the U.S. government, such as Fannie Mae, or municipal securities, in each case that mature in more than one year; |
● | John Hancock Affiliated Funds;10 |
● | Closed-end funds (including John Hancock affiliated closed-end funds) |
● | Options on securities, on indexes, and on currencies; |
● | Swaps on securities, on indexes, and on currencies; |
● | Limited partnerships; |
● | Exchange traded funds and notes; |
● | Domestic unit investment trusts; |
● | Non-US unit investment trusts and Non-US mutual funds; |
● | Private investment funds and hedge funds; and |
● | Futures, investment contracts or any other instrument that is considered a “security” under the Securities Act of 1933; |
● | IPOs11, Private Placements, limited offerings. |
● | Three Day Blackout Period: You are prohibited from knowingly buying or selling a Reportable Security within three calendar days before and after that Reportable Security is traded for a John Hancock Affiliated Fund unless no conflict of interest |
10 John Hancock Affiliated open ended mutual funds do not require pre-clearance, only reporting.
However, there are certain holding period requirements.
11 Level 1 Access Persons are banned from participation in IPOs.
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exists in relation to that Reportable Security as determined by the Code of Ethics Administration Group. | |
● | Gifting Reportable Securities: If you gift or donate shares of a Reportable Security the transaction is considered a sale and you must receive pre-clearance approval. |
● | Inheriting Reportable Securities: If you inherit shares of a Reportable Security you must notify the Code of Ethics Administration Group within 10 days. |
● | 30 Day Hold John Hancock Affiliated Funds: You cannot profit from the purchase and sale of a John Hancock Affiliated Funds within 30 calendar days. |
● | 60 Day Hold: You may not profit from the purchase and sale (or sale and purchase) of the same (or equivalent) Reportable Security within 60 calendar days, also known as a “Ban on Short Term Profits”. |
○ | Exclusion: pre-clearance requests in a Reportable Security with a market capitalization of $5 billion or more would, in most cases, not be subject to the Ban on Short Term Profits, and would be approved if they are appropriately pre-cleared. |
● | Ownership Ban: Securities of Subadvisers: you are prohibited from owning securities of any subadviser of a John Hancock Affiliated Fund.12 |
● |
Restriction on Securities Under Active Consideration: You are prohibited from buying or selling a Reportable Security if the security is being actively traded by a John Hancock Affiliated Fund. |
○ | Exceptions: |
■ | De Minimis Trading: pre-clearance requests for 500 shares or less of a particular Reportable Security within a market value of $25M or less, aggregated daily, would, in most cases, not be subject to the 7-day blackout period restrictions and the restriction on actively traded securities. |
■ | Market Cap Securities: pre-clearance requests in a Reportable Security with a market capitalization of $5B or more would not be subject to the blackout period restrictions and the restriction on actively traded securities. |
● | Pre-clearance of Exchange Traded Funds/Exchange Traded Notes (ETF/ETN) and Options on Reportable Securities: you are required to pre-clear ETFs, ETNs and Options on Reportable Securities. |
○ | Exceptions to the pre-clearance requirement for ETF/ETN or options on Reportable Securities (provided it is not a John Hancock Affiliated Fund): |
■ | has an average market capitalization of $5 billion or more; |
■ | is based on a non-covered security; |
■ | or is based on a Broad-Based Index. |
● | Prohibition on Investment Clubs, Good Until Canceled Orders, or Limit Orders: You may not participate in: |
○ | investment clubs, |
○ | “good until cancelled orders”, or |
○ | “limit orders” unless the limit orders are day orders that automatically expire |
12 MFC securities are excluded from Level 1 & Level 2 subadviser ownership prohibition. The list of securities of subadvisers can be found on the automated compliance system or upon request from the CCO.
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at the end of the trading day and cancel any orders that have not been executed.
Level 3 Access Persons: Additional Personal Trading Restrictions and Disclosures
Please note, there are additional restrictions that apply to all Access Persons listed in the section entitled, “Personal Trading Restrictions for All Access Persons”.
Level 3 Access Persons:
● | Pre-clear transactions in: |
○ | closed-end funds and exchange traded funds advised by a John Hancock Adviser |
○ | transactions in IPOs |
○ | private placements and limited offerings. |
● | Gift or Donation of Reportable Securities: You must obtain pre-clearance approval prior to gifting or donating any Reportable Securities transactions that would require pre-clearance. |
● | Inheritance of Reportable Securities: If you inherit shares of a Reportable Security you must notify the Code of Ethics Administration Group within 10 days. |
● | 30 Day Hold John Hancock Affiliated Funds: You cannot profit from the purchase and sale of a John Hancock Affiliated Funds within 30 calendar days. |
An Access level III Person is not required to pre-clear other trades. However, please keep in mind that an Access level III Person is required to report Reportable Securities transactions after every trade (even those that are not required to be pre-cleared) by requiring your broker to submit duplicate confirmation statements or electronic feeds to the Code of Ethics Administration Group. You must also ensure that all transactions in Reportable Securities are properly reported on your quarterly transaction/annual holdings certification.
Pre-clearance Process
You may request a trade pre-clearance through the automated compliance system, PTCC.
Please note that:
● | You may not trade until clearance approval is received. |
● | Clearance approval is valid only for the date granted (i.e. the pre-clearance requested date and the trade date should be the same). |
● | A separate procedure should be followed for requesting pre-clearance of an IPO, a private placement, or a limited offering in PTCC. |
Certain transactions in securities that would normally require pre-clearance are exempt from the pre-clearance requirement in the following situations: (1) shares are being purchased as part of an Automatic Investment Plan; (2) shares are being purchased as part of a dividend reinvestment plan; or (3) transactions are being made in a
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Managed/discretionary account, an account over which you have designated a third party as having sole discretion to trade (you must have approval from the Chief Compliance Officer (or designee) to establish a discretionary account).
Reporting and Certification Requirements
Reporting
All Access Persons, regardless of their level, must complete and submit reports and certifications to compliance using PTCC, the automated compliance system, in an accurate and timely manner as described below.
Reporting Upon Designation
Within 10 calendar days after designation as an Access Person, you must complete and submit to compliance using PTCC:
● | Initial Holdings Report: A report of all Brokerage Accounts (please see the definition section) that hold or have the ability to hold any Reportable Securities and all Reportable Securities holdings current as of the date you became an Access Person. |
● | Initial Certification of Compliance: Certify to your understanding of the Code of Ethics. |
● | Initial Training: Certify that you have attended a training on the Code of Ethics Policy. |
Quarterly Reporting
Within 30 calendar days after the end of each calendar quarter, you must complete and submit to compliance using PTCC:
● | Quarterly Certification: a report of all Brokerage Accounts and all transactions in Reportable Securities (including transactions in John Hancock Affiliated Funds, including sell transactions in your Global Share Ownership Plan (GSOP) and voluntary transactions, such as fund exchanges, in your John Hancock 401(k)). |
● | Managed Account Certification: A certification of related to your Managed Accounts (only if applicable). |
Additional transaction notes:
● | All transactions in John Hancock Affiliated Funds and Variable Products must be reported. |
● | Only sell transactions of MFC stock in your Global Share Ownership Plan (GSOP) need to be reported. |
● | Only voluntary transactions, such as fund exchanges, need to be reported for transactions in your John Hancock 401(k) Savings account. |
For each Brokerage Account you must certify that the following information is captured accurately:
● | Account number |
● | Brokerage Firm |
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For each transaction required to be reported you must certify the following information was captured accurately:
● | the date of the transaction, the title, and as applicable the exchange ticker symbol or CUSIP number, interest rate and maturity date, number of shares, and principal amount of each Reportable Security involved; |
● | the nature of the transaction (i.e. purchase, sale or any other type of acquisition or disposition); |
● | the price at which the transaction was effected; |
● | the name of the broker, dealer or bank with or through which the transaction was effected. |
Annual Reporting
At a date designated by the Code of Ethics Administration Group, at least annually (or additionally when the Code has been materially changed), you must complete and submit to compliance:
● | Annual Holdings Report: disclosing all of your Brokerage Accounts that hold or can hold any Reportable Securities and all holdings in Reportable Securities, current as of a date not more than 45 days before the report is submitted. |
○ | John Hancock Affiliated Funds & Variable Products holdings must be reported, regardless of where they are held. |
○ | Global Share Ownership holdings of Manulife Financial Corporation, Inc. (MFC) stock must be reported. |
● | Annual (or additionally when the Code has been materially changed) Certification of Code of Ethics: acknowledging that you have received, read, and complied with the requirements of the Code of Ethics. |
Ad Hoc Reporting
Throughout the year you must complete and submit to compliance:
● | Brokerage Account Changes: You are required to promptly notify (within 10 days) Compliance of any applicable account changes. |
● | Changes to the Code of Ethics: You are required to complete an additional certification of compliance stating that you read, received and understood material changes to the Code of Ethics. |
Administration and Enforcement
Administration of the Code
Subadviser Compliance
A subadviser to a John Hancock Affiliated Fund has a number of Code of Ethics responsibilities:
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● | The subadviser must have adopted their own code of ethics in accordance with Rule 204A-1(b) under the Advisers Act which has been approved by the Board of Trustees; |
● | On a quarterly basis, each subadviser certifies compliance with their Code of Ethics or reports material violations if such have occurred; and |
● | Each sub-advisor must report quarterly to the Chief Compliance Officer (or designee), any material changes to its Code of Ethics. |
Adoption and Approval
The Board of a John Hancock Affiliated Fund, including a majority of the Fund’s Independent Board Members, must approve the Code of Ethics of the Fund’s adviser, subadviser or principal underwriter (if an affiliate of the underwriter serves as a Board member or officer of the Fund or the adviser) before initially retaining its services.
Each material change to a Code of Ethics of a subadviser to a fund must be approved by the Board of the John Hancock Affiliated Fund, including a majority of the Fund’s Independent Board Members, no later than six months after adoption of the material change.
The Board may only approve the Code if they determine that the Code:
● | Contains provisions reasonably necessary to prevent the subadviser’s Access Persons (as defined in Rule 17j-1 under the 1940 Act and Rule 204A-1 under the Advisers Act) from engaging in any conduct prohibited by Rule 17j-1 and 204A-1; |
● | Requires the subadviser’s Access Persons to make reports to at least the extent required in Rule 17j-1(d) and Rule 204A-1(b); |
● | Requires the subadviser to institute appropriate procedures for review of these reports by management or compliance personnel (as contemplated by Rule 17j-1(d)(3) and Rule 204 A-1(a)(3)); |
● | Provides for notification of the subadviser’s Access Persons in accordance with Rule 17j-1(d)(4) and Rule 204A-1(a)(5); |
● | Requires the subadviser’s Access Persons who are Investment Personnel to obtain the pre-clearances required by Rule 17j-1(e); and |
● | Requires the subadviser’s Access Persons to obtain the pre-clearances required by Rule 204A-1(c). |
The Chief Compliance Officer of the John Hancock Affiliated Funds oversees each of the fund’s subadviser’s to ensure compliance with each of the provisions included in this section.
Subadviser Reporting & Recordkeeping Requirements
Each subadviser completes an annual Code of Ethics questionnaire and certification as to their compliance under Rule 17j-1 and summary of any violation to the relevant John Hancock Adviser, whom present summaries to the Board of Trustees during their June meeting.
Reporting to the Board
No less frequently than annually, the Office of the CCO will furnish to the Board of Trustees a
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written report that:
● | describes issues that arose during the previous year under the Code of Ethics or the related procedures, including, but not limited to, information about material Code or procedure violations, as well as any sanctions imposed in response to the material violations, and |
● | certifies that each entity, including the subadvisers have adopted procedures reasonably necessary to prevent its Access Persons from violating its Code of Ethics, |
● | Any material changes to the Code are presented to the Trustees within six months for their approval. |
The Chief Compliance Officer of the John Hancock Affiliated Funds oversees each of the fund’s subadviser’s to ensure compliance with each of the provisions included in this section.
Reporting Violations
If you know of any violation of the Code, you have a responsibility to promptly report it to the Chief Compliance Officer of your company. You should also report any deviations from the controls and procedures that safeguard John Hancock and the assets of our clients.
Since we cannot anticipate every situation that will arise, it is important that we have a way to approach questions and concerns. Always ask first, act later. If you are unsure of what to do in any situation, seek guidance before you act.
Speak to your manager, a member of the Human Resources Department or Law Department or your divisional compliance officer if you have:
● | a doubt about a particular situation; |
● | a question or concern about a business practice; or |
● | a question about potential conflicts of interest |
You may report suspected or potential illegal or unethical behavior without fear of retaliation. John Hancock does not permit retaliation of any kind for good faith reports of illegal or unethical behavior. Concerns about potential or suspected illegal or unethical behavior should be referred to a member of the Human Resources or Law Department. John Hancock relies on the Manulife Code of Business Conduct which advises that unethical, unprofessional, illegal, fraudulent or other questionable behavior may also be reported by calling a confidential toll-free Ethics Hotline at 1-866-294-9534 or at www.ManulifeEthics.com.
Exemptions & Appeals
Exemptions: to the Code may be granted by the Chief Compliance Officer (or designee) where supported by applicable facts and circumstances. If you believe that you have a situation that warrants an exemption to any of the rules and restrictions of this Code you need to complete a “Code of Ethics Exemption Request Form” to request approval from the Chief Compliance
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Officer (or designee).
Exemption requests which pose a conflict of interest for the Chief Compliance Officer will be escalated to the Ethics Oversight Committee for review and consideration.
Appeals: If you believe that your request has been incorrectly denied or that an action is not warranted, you may appeal the decision. To make an appeal, you need to give the CCO (or designee) of the Adviser/Trust a written explanation of your reasons for appeal within 30 days of the date that you were informed of the decision. Be sure to include any extenuating circumstances or other factors not previously considered. During the review process, you may, at your own expense, engage an attorney to represent you. The Code of Ethics Administration Group may arrange for Ethics Oversight Committee or other parties to be part of the review process.
Interpretation and Enforcement
The Code cannot anticipate every situation in which personal interests may be in conflict with the interests of our clients and fund investors. You should be responsive to the spirit and intent of the Code as well as its specific provisions.
When any doubt exists regarding any Code provision or whether a conflict of interest with clients or fund investors might exist, you should discuss the situation in advance with the Chief Compliance Officer (or designee) of your company. The Code is designed to detect and prevent fraud against clients and fund investors, and to avoid the appearance of impropriety.
The Chief Compliance Officer has general administrative responsibility for the Code as it applies to the covered employees; an appropriate member of the Code of Ethics Administration Group will administer procedures to review personal trading activity. The Code of Ethics Administration Group also regularly reviews the forms and reports it receives. If these reviews uncover information that is incomplete, questionable, or potentially in violation of the rules in this document, the Code of Ethics Administration Group will investigate the matter and may contact you.
The Board of the John Hancock Affiliated Funds approve material amendments to the Code and authorize sanctions imposed on Access Persons of the Funds. Accordingly, the Code of Ethics Administration Group will refer violations to the CCO of the Trust/Adviser (or designee) for further review and action, including determination if the matter should be presented to the Ethics Oversight Committee and/or the Board of Trustees for recommended action.
The following factors will be considered when determining a fine or other disciplinary action:
● | the person's position and function (senior personnel may be held to a higher standard); |
● | the amount of the trade; |
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● | whether the John Hancock Affiliated Funds hold the security and were trading the same day; |
● | whether the violation was by a family member; |
● | whether the person has had a prior violation and which policy was involved; and |
● | whether the employee self-reported the violation. |
John Hancock takes all rule violations seriously and, at least once a year, provides the Board of the John Hancock Affiliated Funds with a summary of all material violations and sanctions, significant conflicts of interest and other related issues for their review. Sanctions for violations could include (but are not limited to) fines, disgorgement, limitations on personal trading activity, suspension or termination of the Covered Person's position with John Hancock and/or a report to the appropriate regulatory authority.
You should be aware that other Securities Laws and regulations not addressed by the Code may also apply to you, depending on your role at John Hancock.
The CCO of the Adviser/Trust (or designee) and the Ethics Oversight Committee retain the discretion to interpret the Code’s provisions and to decide how they apply to any given situation.
Education of Employees
This Code constitutes the Code of Ethics required by Rule 17j-1 under the Investment Company Act of 1940 and by Rule 204A-1 under the Investment Advisers Act of 1940. The Code of Ethics Administration Group will provide a paper copy or electronic version of the Code (and any amendments) to each person subject to the Code. T h e Code of Ethics Administration Group will also administer training to employees on the principles and procedures of the Code and other related policies.
Recordkeeping
The Code of Ethics Administration Group will maintain a:
● | Copy of the current Code for John Hancock and a copy of each Code of Ethics in effect at any time within the past five years. |
● | Record of any violation of the Code, and of any action taken as a result of the violation, for six years. |
● | Copy of each report made by an Access Person under the Code, for six years (the first two years in a readily accessible place). |
● | Record of all persons, currently or within the past five years, who are or were, required to make reports under the Code. This record will also indicate who was responsible for reviewing these reports. |
● | Record of any decision, and the reasons supporting the decision, to approve the acquisition by an Access Level I Persons of IPOs or private placement securities, for six years. |
● | Record of any decision, and the reasons supporting the decision, to approve the acquisition by an Access Person of the John Hancock Advisers IPOs or private |
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placement securities, for six years. |
Other Important Policies
The John Hancock Affiliated Funds have additional policies or may rely on certain MFC policies. Summary excerpts of such policies are listed below please review each full policy for additional details.
MFC Code of Business Conduct & Ethics (All Covered Employees)
The MFC Code of Business Conduct and Ethics (the MFC Code) provides standards for ethical behavior when representing the Company and when dealing with employees, field representatives, customers, investors, external suppliers, competitors, government authorities and the public.
The MFC Code applies to directors, officers and employees of MFC, its subsidiaries and controlled affiliates. Sales representatives and third-party business associates are also expected to abide by all applicable provisions of the MFC Code and adhere to the principles and values set out in the MFC Code when representing Manulife to the public or performing services for, or on behalf of, Manulife.
Other important issues in the MFC Code include:
● | MFC values; |
● | Ethics in workplace; |
● | Ethics in business relationships; |
● | Conflicts of Interest; |
● | Handling information; |
● | Receiving or giving of gifts, entertainment or favors; |
● | Misuse or misrepresentation of your corporate position; |
● | Disclosure of confidential or proprietary information; |
● | Disclosure of outside business activities; |
● | Antitrust activities; and |
● | Political campaign contributions and expenditures relating to public officials. |
John Hancock Conflicts of Interest Policy (All Covered Employees)
Conflicts of Interest are both inherent to the investment advisory business and also exist as a result of our unique organizational structure. The Conflicts of Interest Policy governs organizational/Adviser conflicts, rather than personal conflicts (such as outside business activities or gifts and entertainment). Our fiduciary obligation as an adviser to the Funds requires us to effectively disclose and/or manage these conflicts, which we do today through various documents and controls, and ultimately to act in the best interest of our clients and the Fund shareholders.
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John Hancock Gift & Entertainment Policy (All Covered Employees)
You are subject to the Gift and Entertainment Policy for the John Hancock Advisers which is designed to prevent the appearance of an impropriety, potential conflict of interest or improper payment.
The Gift & Entertainment Policy covers many issues relating to giving and accepting of gifts and entertainment when dealing with business partners, such as:
● | Gift & Business Entertainment Limits |
● | Restrictions on Gifts & Entertainment |
● | Reporting of Gifts & Entertainment |
John Hancock Insider Trading Policy (All Covered Employees)
The antifraud provisions of the federal Securities Laws generally prohibit persons with material nonpublic information from trading on or communicating the information to others. Sanctions for violations can include civil injunctions, permanent bars from the securities industry, civil penalties up to three times the profits made or losses avoided, criminal fines and jail sentences. While Access Level I Persons are most likely to come in contact with material nonpublic information, the rules (and sanctions) in this area apply to all persons covered under this code and extend to activities both related and unrelated to your job duties.
The John Hancock Insider Trading Policy (the Insider Trading Policy) covers a number of important issues, such as:
● | Possession, misuse and access to material nonpublic information |
John Hancock Pay to Play Rule on Political Contributions (All Covered Associates)
The Pay to Play rule restricts Investment Advisers and certain employees who fall within the definition of Covered Associates from making contributions to elected officials (including incumbents, candidates, or successful candidates for an elective office of a government entity) who may be able to influence the selection of the investment adviser to manage the assets of government entities (any state or political subdivision of a state). The rule has three primary elements:
● |
A two-year prohibition on an adviser’s providing compensated investment advisory services to a government entity after a contribution has been made by the adviser or one of its covered associates; |
● |
A prohibition on the use of third-party solicitors who are not themselves regulated persons subject to pay-to-play restrictions on political contributions; and |
● |
A prohibition on bundling and other efforts by advisers to solicit political contributions to certain officials of a government entity to which the adviser is seeking to provide services. |
Sanctions for violating the rule include a prohibition from receiving compensation for providing advisory services to a fund in which such government entity’s participant-directed plan or program invests for two years thereafter, otherwise known as a “time-out” period.
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John Hancock Whistleblower Policy (All Covered Employees)
The Committees of the mutual funds’ Board of Trustees investigate improprieties or suspected improprieties in the operations of the Funds and has established procedures for the confidential, anonymous submission by employees of John Hancock Advisers, LLC and John Hancock Investment Management Services, LLC. (collectively the “Advisers”) or any other provider of services to the Funds or Advisers of complaints regarding accounting, internal accounting controls, auditing matters or violations of the Securities Laws. The objective of this policy is to provide a mechanism by which complaints and concerns regarding accounting, internal accounting controls, auditing matters or violations of Securities Laws may be raised and addressed without the fear or threat of retaliation. The funds desire and expect that the employees and officers of the Advisers, or any other service provider to the funds will report any complaints or concerns they may have regarding accounting, internal accounting controls or auditing matters.
Persons may submit complaints or concerns to the attention of funds’ Chief Compliance Officer (or designee) by sending a letter or other writing to the funds’ principal executive offices, by telephone call to or an email to the Ethics Hotline, Ethics Hotline can be reached at 1-866-294-9534, or through the Ethicspoint website at www.manulifeethics.com. The Ethics Hotline and Ethicspoint website are operated by an independent third party, which maintains the anonymity of all complaints.
Complaints and concerns may be made anonymously to the funds’ Chief Compliance Officer (or designee) or the respective Committee’s Chairperson. Furthermore, nothing in this policy prohibits reporting possible violations of applicable law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress, and any agency Inspector General, or making other disclosures that are protected under the whistleblower provisions of applicable law or regulation.
Policy and Procedures Regarding Disclosure of Portfolio Holdings (All Covered Employees)
It is our policy not to disclose nonpublic information regarding Fund portfolio holdings except in the limited circumstances noted in this Policy. You can only provide nonpublic information regarding portfolio holdings to any person, including affiliated persons, on a “need to know” basis (i.e., the person receiving the information must have a legitimate business purpose for obtaining the information prior to it being publicly available and you must have a legitimate business purpose for disclosing the information in this manner). We consider nonpublic information regarding Fund portfolio holdings to be confidential and the intent of the policy and procedures is to guard against selective disclosure of such information in a manner that would not be in the best interest of Fund shareholders.
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● | Policy Regarding Dissemination of Mutual Fund Portfolio Information |
● | Manulife Financial Corporation Anti-Fraud Policy |
● | John Hancock Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF) Program |
● | Conflict of Interest Rules for Directors and Officers |
● | John Hancock Non-Cash Compensation Policy |
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Appendix
Definitions
Access Person:
You are an “Access Person” if you are a “Supervised Person” who has access to nonpublic information regarding any client’s purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any John Hancock Affiliated Fund, or who is involved in making securities recommendations to clients, or who has access to such recommendations that are nonpublic.
Automatic Investment Plan:
Means a program in which regular periodic purchases (or withdrawals) are made automatically in (or from) investment accounts in accordance with a predetermined schedule and allocation. An Automatic Investment Plan includes a dividend reinvestment plan.
Beneficial Ownership:
Means the opportunity, directly or indirectly, to profit or share in any profit (for loss) derived from a Reportable Securities transaction. This includes Reportable Securities held by an Access Person’s Household Family Member and Covered Securities held through certain family trusts, family custodial accounts, entities controlled by the Access Person, portfolios from which the Supervised Person may receive a performance fee, and other circumstances in which the Access Person may profit, directly or indirectly through any contract, arrangement, understanding, relationship, or otherwise, from transactions in the respective Reportable Securities, as defined further in Rule 16a-1 (a) (2) of the Securities Exchange Act of 1934.
Broad-Based Index:
For the purposed of this Code a Broad-Based Index will include the following:
● | the S&P 100, S&P Midcap 400, S&P 500, FTSE 100, and Nikkei 225; |
● | Direct obligations of the U.S. Government (e.g., treasury securities) |
● | Indirect obligations of the U.S. Government with a maturity of less than 1 year (GNMA) |
● | Commodities; |
● | Foreign currency |
Brokerage Account:
Any of your accounts:
● | Which have the capability to hold Reportable Securities; |
● | Accounts of your spouse, Significant Other, minor children or family members sharing your household (together, “Household Members”); |
● | Accounts in which you or your Household Members have a Beneficial Ownership; |
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● | Accounts over which you have discretion, give advice or information or have Power of Attorney (POA). |
Covered Person:
Includes all “Access Persons” as defined under Securities and Exchange Commission (SEC) Rule 17j-1 under the Investment Company Act of 1940, as amended (the “1940 Act”), and “Supervised Persons” as defined under SEC Rule 204A-1 under the Investment Advisers Act of 1940, as amended (the “Advisers Act”).
Household Family Member:
An Access Person’s spouse, Significant Other, minor children, or other family member who also shares the same household as the Access Person.
Investment Professionals:
Means a Supervised Person who are either Portfolio Managers, Analysts, and Traders.
Involuntary Issuer Transaction:
Transaction where the account owner has not determined the timing as to when the purchase or sale transaction will occur or the amount of shares purchased or sold, i.e. making changes to existing positions or asset allocations within the John Hancock retirement plans, buying or selling shares of a Reportable Security, etc.
Involuntary Issuer Transactions include:
● | transactions which result from a corporate action applicable to all similar security holders (such as splits, tender offers, mergers, stock dividends, etc.); or |
● | automatic dividend reinvestment and stock purchase plan acquisitions. |
Please note: any transaction that overrides the pre-set schedule or allocations must be included in a quarterly transaction report.
John Hancock Affiliated Fund:
For the purposes of this Code, a John Hancock Affiliated Fund shall include both:
● | a “John Hancock Mutual Fund” (i.e., a 1940 Act mutual fund that is advised or sub-advised by a John Hancock Adviser or by another Manulife entity); or |
● | “John Hancock Variable Product” (i.e., contracts funded by insurance company separate accounts that use one or more portfolios of John Hancock Variable Insurance Trust). |
● | Any other financial product or security advised or sub-advised by a John Hancock Adviser or John Hancock Insurance or another Manulife entity. |
The definition for John Hancock Affiliated Fund does not include John Hancock money market funds. A list of John Hancock Affiliated Funds can be found on PTCC.
John Hancock Variable Products:
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Contracts funded by insurance company separate accounts that use one or more portfolios of John Hancock Variable Insurance Trust.
Managed Account:
Any account over which neither you nor a Household Family Member has direct or indirect influence or control and cannot a) suggest purchases or sales of investments to the trustee or third-party discretionary manager; b) direct purchases or sales of investments; or c) consult with the trustee or third-party discretionary manager as to the particular allocation of investments to be made in the account.
Private Placements:
Securities exempt from SEC registration under section 4(2), section 4(6) and/or rules 504–506 under the Securities Act.
Reportable Securities:
Means any note, stock, treasury stock, security future, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit-sharing agreement, collateral-trust certificate, preorganization certificate or subscription, transferable share, investment contract, voting-trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, any put, call, straddle, option, or privilege on any security (including a certificate of deposit) or on any group or index of securities (including any interest therein or based on the value thereof), or any put, call, straddle, option, or privilege entered into on a national securities exchange relating to foreign currency, or, in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary or interim certificate for, receipt for, guaranty of, or warrant or right to subscribe to or purchase any of the foregoing, except it should not include:
(i) Direct obligations of the Government of the United States;
(ii) Bankers' acceptances, bank certificates of deposit, commercial paper and high quality short-term debt instruments, including repurchase agreements;
(iii) Shares issued by money market funds;
(iv) Shares issued by open-end funds other than reportable funds; and
(v) Shares issued by unit investment trusts that are invested exclusively in one or more open-end funds, none of which are reportable funds.
Please note: Reportable Securities includes both John Hancock Affiliated Funds and John Hancock Variable Products.
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Securities Laws:
Means the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, the Sarbanes-Oxley Act of 2002, the Investment Company Act of 1940, the Investment Advisers Act of 1940, Title V of the Gramm-Leach-Bliley Act, any rules adopted by the SEC under any of these statutes, the Bank Secrecy Act as it applies to funds and investment advisers, and any rules adopted there under by the SEC or the Department of the Treasury.
Significant Others:
Two people who (1) share the same primary residence; (2) share living expenses; and (3) are in a committed relationship and intend to remain in the relationship indefinitely.
Supervised Person:
Is defined by the Advisers Act to mean a partner, officer, director (or other person occupying a similar status or performing similar functions) or employee, as well as any other person who provides advice on behalf of the adviser and is subject to the adviser’s supervision and control. However, in reliance on the Prudential no-action letter, John Hancock does not treat as a “Supervised Employee” any of its “non-advisory personnel”, as defined below.
In reliance on the Prudential no-action letter, John Hancock treats as an “Advisory Person” any “Supervised Employee” who is involved, directly, or indirectly, in John Hancock Financial Services investment advisory activities, as well as any “Supervised Employee” who is an Access Person. John Hancock treats as “non-advisory personnel”, and does not treat as a Supervised Person, those individuals who have no involvement, directly or indirectly, in John Hancock investment advisory activities, and who are not Access Persons.
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Preferred Brokers List
Preferred Brokers List While employed by John Hancock, you must maintain your Brokerage Accounts at one of the preferred brokers approved by John Hancock. The following are the preferred brokers:
Ameriprise | Sanders Morris Harris | |
Bank of Oklahoma | Scottrade | |
Bank of Texas | Stifel | |
Barclays Wealth Management | TD Ameritrade | |
Brave Warrior Advisors | T. Rowe Price | |
Charles Schwab | Thompson Davis & Co. | |
Chase Investment Services | UBS | |
Citigroup | US Trust | |
Constellation Wealth Management | Vanguard | |
Credit Suisse | ||
DB Alex Brown | ||
Edward Jones | ||
E*Trade | ||
Fidelity | ||
First Republic | ||
Goldman Sachs Wealth Management | ||
HSBC Private Bank | ||
Interactive Brokers | ||
JB Were | ||
JP Morgan Private Bank | ||
JP Morgan Securities | ||
Lincoln Financial | ||
Merrill Lynch & Bank of America | ||
Morgan Stanley Private Wealth | ||
Morgan Stanley Smith Barney | ||
Northern Trust | ||
Northern Trust Institutional | ||
Oppenheimer & Co. | ||
OptionsXpress | ||
Pershing Advisor Solutions | ||
Piper Jaffray | ||
Raymond James | ||
Revolution Capital | ||
Robert W. Baird & Co. |
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Access Persons
A person who, in connection with his/her regular functions or duties, makes or participates in making recommendations regarding the purchase or sale of securities by the Fund or account. Examples may include:
●Portfolio Managers
●Analysts
●Traders |
A person who, in connection with his/her regular functions or duties, has regular access to nonpublic information regarding any clients' purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any John Hancock Affiliated Fund or who is involved in making securities recommendations to clients, or who has regular access to such recommendations that are nonpublic. Examples may include:
●Office of the Chief Compliance Officer
●Fund Administration
●Investment Management Services
●Administrative Personnel for Access Level I Persons
●Technology Resources Personnel (certain)
●Legal Staff
●Marketing (certain) |
A person who, in connection with his/her regular functions or duties, has periodic access to nonpublic information regarding any clients' purchase or sale of securities, or nonpublic information regarding the portfolio holdings of any John Hancock Affiliated Fund. Examples may include:
●Marketing (certain)
●Product Development
●E-Commerce
●Corporate Publishing
●Administrative Personnel for Access Level II Persons
●Technology Resources Personnel (certain) |
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Compliance Contacts
Entity | Chief Compliance Officer |
John Hancock Advisers, LLC | Frank Knox – 617-663-2430 |
John Hancock Investment Management Services, LLC | Frank Knox |
Each open-end and closed-end fund advised by a John Hancock Adviser | Frank Knox |
John Hancock Funds, LLC | Michael Mahoney - 617-663-3021 |
John Hancock Distributors, LLC | Michael Mahoney |
Code of Ethics Contacts | Phone number |
Code of Ethics Administration Group | INVDIVCodeofEthics@manulife.com |
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CERTIFICATION
I, Andrew Arnott, certify that:
1. I have reviewed this report on Form N-CSR of the John Hancock Tax-Advantaged Dividend Income Fund (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: December 13, 2019 | /s/ Andrew Arnott | |
Andrew Arnott | ||
President |
CERTIFICATION
I, Charles A. Rizzo, certify that:
1. I have reviewed this report on Form N-CSR of the John Hancock Tax-Advantaged Dividend Income Fund (the “registrant”);
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: December 13, 2019 | /s/ Charles A. Rizzo | |
Charles A. Rizzo | ||
Chief Financial Officer |
Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002
In connection with the attached Report of John Hancock Tax-Advantaged Dividend Income Fund (the “registrant”) on Form N-CSR to be filed with the Securities and Exchange Commission (the "Report"), each of the undersigned officers of the registrant does hereby certify that, to the best of such officer's knowledge:
1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant as of, and for, the periods presented in the Report.
/s/ Andrew Arnott | |
Andrew Arnott | |
President | |
Dated: December 13, 2019 | |
/s/ Charles A. Rizzo | |
Charles A. Rizzo | |
Chief Financial Officer | |
Dated: December 13, 2019 |
A signed original of this written statement, required by Section 906, has been provided to the registrant and will be retained by the registrant and furnished to the Securities and Exchange Commission or its staff upon request.
Proxy Voting Policy
Background
Manulife Asset Management (“MAM” or the “Firm”)* represents investment advisors registered in certain countries as appropriate to support the broader Manulife Asset Management discretionary advisory business.
Applicable rules may require an investment advisor to (i) adopt proxy policies reasonably designed to seek to ensure the advisor votes proxies in the best interests of its clients, including addressing material conflicts of interest; (ii) disclose to clients information about its proxy policies; and (iii) maintain certain records relating to proxy voting. These requirements are designed to minimize conflicts of interest and to seek to ensure greater transparency in the voting of proxies.
MAM has adopted a proxy voting policy and procedures to seek to ensure proxies are voted in the best interests of its clients and its proxy voting activities adhere to the requirements of all applicable rules and general fiduciary principles. Where MAM is granted and accepts responsibility for voting proxies for client accounts, it will take reasonable steps to seek to ensure proxies are received and voted in the best interest of the client with a view to enhance the value of the shares of equity securities held in client accounts.
MAM has contracted with Institutional Shareholder Services Inc. (“ISS”) an independent third party service provider, to vote clients’ proxies. The Firm has adopted ISS proxy voting recommendations and established corresponding Firm Proxy Voting guidelines. Proxies will be voted in accordance with the voting recommendations contained in the applicable domestic or global ISS Proxy Voting Manual, as in effect from time to time. Except in instances where a MAM’s client retains voting authority, MAM will instruct custodians of client accounts to forward all proxy statements and materials received in respect of client accounts to ISS.
MAM has engaged ISS as its proxy voting agent to:
1. | research and make voting recommendations or, for matters for which Manulife Asset Management has so delegated, to make the voting determinations; | |
2. | ensure proxies are voted and submitted in a timely manner; | |
3. | handle other administrative functions of proxy voting; | |
4. | maintain records of proxy statements received in connection with proxy votes and provide copies of such proxy statements promptly upon request; | |
5. | maintain records of votes cast; and | |
6. | provide recommendations with respect to proxy voting matters in general. |
* Refer to Appendix of Affiliated MAM entities that have adopted this policy
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Policy Administration, Oversight and Governance
MAM’s Proxy Voting Team is responsible for administering and implementing the Proxy Voting Policy, including the proper oversight of ISS and any other service providers hired by the Firm to assist it in the proxy voting process.
Proxy Voting Team is responsible for administering the proxy voting process, including:
1. | Implementing and updating the applicable domestic and global ISS proxy voting guidelines; | |
2. | Coordinating and overseeing the proxy voting process performed by ISS; and | |
3. | Providing periodic reports to the Brokerage Practices Committee (BPC), Operating Committee, the Chief Compliance Officer, Advisory Clients or any other persons/committee as deemed appropriate. |
Proper oversight of the vendor will include periodic due diligence of the vendor including its’ industry reputation, risk, compliance and technology infrastructure and the vendor’s ability to meet the Firm’s requirements relative to reporting and other service requirements including; assessing the adequacy and quality of the proxy advisory firm’s staffing and personnel; and assessing whether the proxy advisory firm has robust policies and procedures that enable it to make proxy voting recommendations based on current and accurate information and to identify and address conflicts of interest relating to its voting recommendations.
All proxies received on behalf of Clients are forwarded to ISS. Any MAM employee that receives a client’s proxy statement should therefore notify Proxy Voting Team and arrange for immediate delivery to ISS.
In addition to voting proxies, MAM:
1. | describes its proxy voting procedures to its clients in the relevant or required disclosure document; | |
2. | provides clients with a copy of the Proxy Voting Policy, upon request; | |
3. | discloses to its clients how they may obtain information on how MAM voted the client’s proxies; | |
4. | generally applies its Proxy Voting Policy consistently; | |
5. | documents the reason(s) for voting for all non-routine items; and | |
6. | keep records of such proxy voting through ISS available for inspection by the Client or government agencies. |
Oversight and Governance
Oversight of the proxy voting process is the responsibility of the Firm’s Brokerage Practices Committee (“BPC”) which reports up to the Firm’s Operating Committee). However the Operating Committee is responsible for reviewing and approving amendments to the Proxy Voting Policy. The BPC or its’ designee should be provided a periodic evaluation of vendor due diligence and service activity including a summary of vendor proxy voting activity on behalf the Firm’s clients. Reporting should include trends relative to non-routine items, conflict of interest situations, voting outside of Proxy guidelines and the rationale and other material matters.
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On a quarterly basis, Proxy Voting Team should provide the BPC with summary of instances where MAM has (i) voted proxies in a manner inconsistent with the recommendation of ISS, and (ii) voted proxies in circumstances in which a material conflict of interest may exist as set forth in the Conflicts section.
Material proxy voting issues identified by the Proxy Voting Team are to be escalated to the Firm’s Chief Compliance Officer. As appropriate, the BPC (or their designee) will be informed of material matters and related actions taken by the responsible parties.
The Chief Compliance Officer makes an annual risk-based assessment of the Firm’s compliance program, which may include proxy voting activities, and may conduct a review of the Procedures to determine such Procedures are reasonably designed to achieve their purpose. The Chief Compliance Officer makes periodic reports to MAM SIPC that includes a summary of issues identified in the review of activities as part of the compliance program.
General Principles
Scope
This Policy permits Clients to:
1. | delegate to MAM the responsibility and authority to vote proxies on their behalf according to MAM’s Proxy Voting Policy and guidelines; or | |
2. | delegate to MAM the responsibility and authority to vote proxies on their behalf according to the particular Client’s own proxy voting policies and guidelines, subject to acceptance by the Firm, as mutually agreed upon between the Firm and the Client. |
MAM seeks to vote proxies in the best economic interests of all of its Clients for whom the Firm has proxy voting authority and responsibilities. In the ordinary course, this entails voting proxies in a manner which the Firm believes will maximize the economic value of client security holdings.
The Firm believes its Proxy Voting Policy is reasonably designed to ensure proxy matters are conducted in the best interest of Clients, and in accordance with MAM’s fiduciary duties and applicable rules.
General Standards on Voting
The following are examples of general standards the Firm has established relative to its’ proxy voting obligations:
MAM does not engage in the practice of “empty voting” (a term embracing a variety of factual circumstances that result in a partial or total separation of the right to vote at a shareholders meeting from beneficial ownership of the shares on the meeting date). MAM prohibits investment managers from creating large hedge positions solely to gain the vote while avoiding economic exposure to the market. MAM will not knowingly vote borrowed shares (for example, shares borrowed for short sales and hedging transactions) that the lender of the shares is also voting.
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● |
MAM reviews various criteria to determine whether the costs associated with voting the proxy exceed the expected benefit to Clients and may conduct a cost-benefit analysis in determining whether it is in the best economic interest to vote client proxies. Given the outcome of the cost-benefit analysis, the Firm may refrain from voting a proxy on behalf of the Clients’ accounts. |
● |
Except as otherwise required bylaw, MAM has a general policy of not disclosing to any issuer or third-party how MAM or its voting delegate voted a Client’s proxy. |
● |
MAM endeavors to show sensitivity to local market practices when voting proxies of non-domestic issuers. MAM votes in all markets where it is feasible to do so. |
● |
MAM may refrain from voting a proxy due to logistical considerations that may have a detrimental effect on the Firm’s ability to vote such a proxy. These issues may include, but are not limited to: |
1. | proxy statements and ballots being written in a foreign language; | |
2. | underlying securities have been lent out pursuant to a Client’s securities lending program; | |
3. | untimely notice of a shareholder meeting; | |
4. | requirements to vote proxies in person; | |
5. | restrictions on foreigner’s ability to exercise votes; | |
6. | restrictions on the sale of securities for a period of time in proximity to the shareholder meeting (“share blocking and re-registration”); | |
7. | requirements to provide local agents with power of attorney to facilitate the voting instructions (such proxies are voted on a best-efforts basis); or | |
8. | inability of a Client’s custodian to forward and process proxies electronically. |
● |
From time to time, proxy votes will be solicited which involve special circumstances and require additional research and discussion or (ii) are not directly addressed by ISS. These proxies are identified through a number of methods, including, but not limited to, notification from ISS, concerns of clients, concerns raised by the Firm’s investment professionals and questions from consultants. |
● |
In such instances of special circumstances or issues not directly addressed by ISS, a sub-committee of the BPC (“Proxy Committee”) will be consulted for a determination of the proxy vote. The Proxy Committee comprises of no fewer than three members of the BPC. Although the Firm anticipates such instances will be rare, The Proxy Committee’s first determination is whether there is a material conflict of interest between the interests of a Client and those of MAM. If the Proxy Committee determines there is a material conflict, the process detailed under “Conflicts of Interest” below is followed. If there is no material conflict, the Proxy Committee examines each of the issuer’s proposals in detail in seeking to determine what vote would be in the best interests of Clients. At this point, the Proxy Committee will make a voting decision based on maximizing the economic value of all portfolios’ holdings for the issuer in question. |
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● |
There may be circumstances under which a portfolio manager or other MAM investment professional (“Manulife Asset Management Investment Professional”) believes it is in the best interest of a Client or Clients to vote proxies in a manner inconsistent with the recommendation of ISS. In such an event, as feasible, the Manulife Asset Management Investment Professional shall inform the Proxy Operations group of his or her decision to vote such proxy in a manner inconsistent with the recommendation of ISS and the rationale for such decision. Proxy Operations will report to the BPC no less than quarterly any instance where a Manulife Asset Management Investment Professional has decided to vote a proxy on behalf of a Client in such a manner. |
Conflicts of Interest
From time to time, proxy voting proposals may raise conflicts between the interests of the Firm’s clients and the interests of the Firm and its affiliates or employees. For example, MAM or its affiliates may provide services to a company whose management is soliciting proxies, or to another entity which is a proponent of a particular proxy proposal. Another example could arise when MAM or its affiliates has business or other relationships with participants involved in proxy contests, such as a candidate for a corporate directorship. More specifically, if MAM is aware that one of the following conditions exists with respect to a proxy, MAM shall consider such event a potential material conflict of interest:
1. | MAM has a business relationship or potential relationship with the issuer; | |
2. | MAM has a business relationship with the proponent of the proxy proposal; or | |
3. | MAM members, employees or consultants have a personal or other business relationship with the participants in the proxy contest, such as corporate directors or director candidates. |
MAM’s goal in addressing any such potential conflict is to ensure proxy votes are cast in the advisory clients’ best interests and are not affected by MAM’s potential conflict. In those instances, there are a number of courses MAM may take. The final decision as to which course to follow shall be made by the BPC or its designee.
In the event of a potential material conflict of interest, the BPC or its designee will either (i) vote such proxy according to the specific recommendation of ISS; (ii) abstain; or (iii) request the Client vote such proxy. All such instances shall be reported to the BPC and the Chief Compliance Officer at least quarterly.
In other cases, where the matter presents a potential material conflict and is not clearly within one of the ISS’ enumerated recommendations, or is of such a nature the BPC believes more active involvement is necessary, the BPC shall make a decision as to the voting of the proxy. The basis for the voting decision, including the basis for the determination the decision is in the best interests of the Client, shall be formalized in writing as a part of the minutes of the BPC.
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Recordkeeping
In accordance with applicable law, MAM shall retain the following documents for not less than five years from the end of the year in which the proxies were voted, the first two years in MAM’s office:
● |
the MAM Proxy Voting Policy and any additional procedures created pursuant to that policy; |
● |
a copy of each proxy statement MAM receives regarding securities held by Clients (this requirement will be satisfied by ISS who has agreed in writing to do so or by obtaining a copy of the proxy statement from the EDGAR database); |
● |
a record of each vote cast by MAM (this requirement will be satisfied by ISS who has agreed in writing to do so) on behalf of Clients; |
● |
a copy of any document created by MAM that was material in making its voting decision or that memorializes the basis for such decision; and |
● |
a copy of each written request from a client, and response to the client, for information on how MAM clients’ proxies were voted. |
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Appendix of Affiliated MAM Entities |
Manulife Asset Management (US) LLC |
Manulife Asset Management (North America) Limited |
Manulife Asset Management Limited+ |
Manulife Asset Management (Europe) Limited |
Manulife Asset Management Trust Company LLC |
+Investment management business only.
Policy Edition: December 2017; prior versions September 2015, January 2015 and August 2014
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WELLS FARGO ASSET MANAGEMENT1
PROXY VOTING POLICIES AND PROCEDURES
EFFECTIVE AS OF JANUARY 1, 2019
Wells Fargo Asset Management (“WFAM”) Stewardship
As fiduciaries, we are committed to effective stewardship of the assets we manage on behalf of our clients. To us, good stewardship reflects responsible, active ownership and includes both engaging with investee companies and voting proxies in a manner that we believe will maximize the long-term value of our investments.
Scope of Policies and Procedures. These Proxy Voting Policies and Procedures (“Policies and Procedures”) are used to determine how to vote proxies relating to portfolio securities held in client accounts managed by WFAM. With respect to client accounts of Funds Management, this includes, among others, Wells Fargo Funds Trust, Wells Fargo Master Trust, Wells Fargo Variable Trust, Wells Fargo Global Dividend Opportunity Fund, Wells Fargo Income Opportunities Fund, Wells Fargo Multi-Sector Income Fund, Wells Fargo Utilities and High Income Fund (the “Trusts”). It also includes Wells Fargo (Lux) Worldwide Fund and Worldwide Alternative Fund SICAV-SIF, both domiciled in Luxembourg (the “Luxembourg Funds”). Aside from the investment funds managed by Funds Management, WFAM also offers medium term note programs, managed for issuers of such notes domiciled in Luxembourg. Hereafter, all series of the Trusts, and all such Trusts not having separate series, and all sub-funds of the Luxembourg Fund, as well as the MTN issuers, are referred to as the “Investment Products”). In addition, these Policies and Procedures are used to determine how to vote proxies for the assets managed on behalf of WFAM’s other clients. Not all clients delegate proxy-voting authority to WFAM, however, and WFAM will not vote proxies, or provide advice to clients on how to vote proxies in the absence of specific delegation of authority, a pre-existing contractual agreement, or an obligation under the applicable law (e.g., securities that are held in an investment advisory account for which WFAM exercises no investment discretion are not voted by WFAM).
Luxembourg Products. These Policies and Procedures have been established, implemented and maintained, as they apply to WFAML, in accordance with Article 23 of CSSF Regulation No. 10-4 and the CSSF Circular 18/698. WFAML has delegated the portfolio management of the Luxembourg Fund it manages to WFAM and delegated the responsibility for exercising voting rights in conjunction with such delegation; as such, these Policies and Procedures shall apply to the portfolio management of the Fund. The respective portfolio management may also delegate the responsibility for exercising voting rights to another company with the prior consent of WFAML. Responsibility for exercising voting rights has also been delegated to WFAM with respect to the Worldwide Alternative Fund SICAV-SIF and to ECM with respect to the MTN issuers.
1 Includes Wells Capital Management Incorporated (“WellsCap”) and Wells Fargo Funds Management, LLC (“Funds Management”), Wells Fargo Asset Management Luxembourg (“WFAML“) and ECM Asset Management Limited (“ECM”). WFAML is a Luxembourg management company authorized to manage undertakings for collective investment in transferable securities (“UCITS”) by the Luxembourg Commission de Surveillance du Secteur Financier (“CSSF”) pursuant to chapter 15 of the Law of 17 December 2010 relating to undertakings for collective investment, as may be amended from time to time transposing the Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014 on the coordination of laws, regulations and administrative provisions relating to UCITS, as may be amended from time to time. Additionally, WFAML is authorized to provide discretionary portfolio management services and investment advice services.
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Voting Philosophy. WFAM, comprised of investment advisers registered with the Securities and Exchange Commission and WFAML, has adopted these Policies and Procedures to ensure that proxies are voted in the best interests of clients and Investment Product investors, without regard to any relationship that any affiliated person of WFAM or the Investment Product (or an affiliated person of such affiliated person) may have with the issuer. WFAM exercises its voting responsibility as a fiduciary with the goal of maximizing value to clients consistent with governing laws and the investment policies of each client. While securities are not purchased to exercise control or to seek to effect corporate change through share ownership activism, WFAM supports sound corporate governance practices at companies in which client assets are invested. WFAM has established an appropriate strategy determining when and how the voting rights related to the instruments held in portfolios managed are exercised, so that these rights are exclusively reserved to the relevant Investment Product and its investors.
Proxy Administrator
The proxy voting process is administered by WellsCap’s Operations Department (“Proxy Administrator”), who reports to WFAM’s Chief Operations Officer. The Proxy Administrator is responsible for administering and overseeing the proxy voting process to ensure the implementation of the Policies and Procedures, including regular operational reviews, typically conducted on a weekly basis. The Proxy Administrator monitors third party voting of proxies to ensure it is being done in a timely and responsible manner, including review of scheduled vendor reports. The Proxy Administrator in conjunction with the Proxy Committee reviews the continuing appropriateness of the Policies and Procedures set forth herein, and recommends revisions as necessary.
Third Party Proxy Voting Vendor. WFAM has retained a third-party proxy voting service, Institutional Shareholder Services Inc. (“ISS”), to assist in the implementation of certain proxy voting-related functions including: 1.) Providing research on proxy matters 2.) Providing technology to facilitate the sharing of research and discussions related to proxy votes 3.) Vote proxies in accordance with WFAM’s guidelines 4.) Handle administrative and reporting items 5.) Maintain records of proxy statements received in connection with proxy votes and provide copies/analyses upon request. Except in instances where clients have retained voting authority, WFAM retains the responsibility for proxy voting decisions.
Proxy Committee and Sub-Committees. The WFAM Proxy Committee shall be responsible for overseeing the proxy voting process to ensure its implementation in conformance with these Policies and Procedures. The WFAM Proxy Committee shall coordinate with Wells Fargo Asset Management Risk and Compliance to monitor ISS, the proxy voting agent currently retained by WFAM, to determine that ISS is accurately applying the Policies and Procedures as set forth herein and operates as an independent proxy voting agent. WFAM’s ISS Vendor Oversight process includes an assessment of ISS’ Policy and Procedures (“P&P”), including conflict controls and monitoring, receipt and review of routine performance-related reporting by ISS to WFAM and periodic onsite due diligence meetings. Due diligence meetings typically include: meetings with key staff, P&P related presentations and discussions, technology-related demonstrations and assessments, and some sample testing, if appropriate. The WFAM Proxy Committee shall review the continuing appropriateness of the Policies and Procedures set forth herein. The WFAM Proxy Committee may delegate certain powers and responsibilities to subcommittees consisting of a “Proxy Voting Sub-Committee” and a “Proxy Governance Sub-Committee.”
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Proxy Voting Sub-Committee. Among other delegated matters, the Proxy Voting Sub-Committee, in accordance with these Policies and Procedures, reviews and votes on routine proxy proposals that it considers under these Policies and Procedures in a timely manner. If necessary, the Proxy Voting Sub-Committee escalates issues to the Proxy Governance Sub-Committee that are determined to be material by the Proxy Voting Sub-Committee or otherwise in accordance with these Policies and Procedures. The Proxy Voting Sub-Committee coordinates with Wells Fargo Asset Management Risk and Compliance to review the performance and independence of ISS in exercising its proxy voting responsibilities.
Proxy Governance Sub-Committee. The Proxy Governance Sub-Committee reviews and, in accordance with these Policies and Procedures, votes on issues that have been escalated from the Proxy Voting Sub-Committee. Members of the Proxy Governance Sub-Committee also oversee the implementation of WFAM Proxy Committee recommendations for the respective functional areas in WFAM that they represent.
Meetings; Committee Actions. The WFAM Proxy Committee shall convene or act through written consent, including through the use of electronic systems of record, of a majority of WFAM Proxy Committee members as needed and when discretionary voting determinations need to be considered. Any sub-committee of the WFAM Proxy Committee shall have the authority on matters delegated to it to act by vote or written consent, including through the use of electronic systems of record, of a majority of the sub-committee members available at that time. The WFAM Proxy Committee shall also meet at least annually (each calendar year and within 15 months of the last meeting) to review the Policies and Procedures.
Membership. Members are selected based on subject matter expertise for the specific deliverables the committee is required to complete. The voting members of the Proxy Committee are identified in the WFAM Proxy Charter. Changes to the membership of the Proxy Committee will be made only with approval of the WFAM Proxy Committee. Upon departure from Wells Fargo Asset Management, a member’s position on the WFAM Proxy Committee will automatically terminate.
Voting Procedures. Unless otherwise required by applicable law,2 proxies will be voted in accordance with the following steps and in the following order of consideration:
2 Where provisions of the Investment Company Act of 1940 (the “1940 Act”) specify the manner in which items for any third party registered investment companies (e.g., mutual funds, exchange-traded funds and closed-end funds) and business development companies (as defined in Section 2(a)(48) of the 1940 Act) (“Third Party Fund Holding Voting Matters”) held by the Trusts or series thereof, WFAM shall vote the Third Party Fund Holding Voting Matter on behalf of the Trusts or series thereof accordingly.
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1. |
First, any voting items related to WFAM “Top-of-House” voting principles (as described below under the heading “WFAM Proxy Voting Principles/Guidelines”) will generally be voted in accordance with a custom voting policy with ISS (“Custom Policy”) designed to implement the WFAM’s Top-of-House voting principles.3 | |
2. |
Second, any voting items for meetings deemed of “high importance”4 (e.g., proxy contests, mergers and acquisitions, capitalization proposals and anti-takeover proposals) where ISS opposes management recommendations will be referred to the Portfolio Management teams for recommendation or the Proxy Voting Sub-Committee (or escalated to the Proxy Governance Sub-Committee) for case-by-case review and vote determination. | |
3. |
Third, with respect to any voting items where ISS Sustainability Voting Guidelines5 provide a different recommendation than ISS Standard Voting Guidelines, the following steps are taken: | |
a. |
The WFAM Portfolio Risk Management and Analytics team (the “PRMA team”) evaluates the matter for materiality and any other relevant considerations. | |
b. |
If the PRMA team recommends further review, the voting item is then referred to the Portfolio Management teams for recommendation or the Proxy Voting Sub-Committee (or escalated to the Proxy Governance Sub-Committee) for case-by-case review and vote determination. | |
c. |
If the PRMA team does not recommend further review, the matter is voted in accordance with ISS Standard Voting Guidelines. | |
4. | Fourth, any remaining proposals are voted in accordance with ISS Standard Voting Guidelines.6 |
Commitment to the Principles of Responsible Investment. As a signatory to the Principles for Responsible Investment, WFAM has integrated certain environmental, social, and governance factors into its investment processes, which includes the proxy process. As described under Voting Procedures above, WFAM considers ISS’s Sustainability Voting Guidelines as a point of reference in certain cases deemed to be material to a company’s long-term shareholder value.
Voting Discretion. In all cases, the Proxy Committee (and any sub-committee thereof) will exercise its voting discretion in accordance with the voting philosophy of these Policies and Procedures. In cases where a proxy item is forwarded by ISS to the Proxy Committee or a subcommittee thereof, the Proxy Committee or its sub-committee may be assisted in its voting decision through receipt of: (i) independent research and voting recommendations provided by ISS or other independent sources; (ii) input from the investment sub-adviser responsible for purchasing the security; and (iii) information provided by company management and shareholder groups.
3 The WFAM Proxy Committee may determine that additional review of a Top-of-House voting matter is warranted. For example, voting matters for declassified boards or annual election of directors of public operating and holding companies that have certain long-term business commitments (e.g., developing proprietary technology; or having an important strategic alliance in place) may warrant referral to the Proxy Voting Sub-Committee (or escalation to the Proxy Governance Sub-Committee) for case-by-case review and vote determination.
4 The term “high importance” is defined as those items designated Proxy Level 6, 5, or 4 by ISS, which include proxy contests, mergers, capitalization proposals and anti-takeover defenses.
5 ISS’s Sustainability Voting Guidelines seeks to promote support for recognized global governing bodies encouraging sustainable business practices advocating for stewardship of environment, fair labor practices, non-discrimination, and the protection of human rights.
6 The voting of proxies for Taft Hartley clients may incorporate the use of ISS’s Taft Hartley voting guidelines.
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Portfolio Manager and Sub-Adviser Input. The WFAM Proxy Committee may consult with portfolio management teams and Fund sub-advisers on specific proxy voting issues as it deems appropriate. In addition, portfolio management teams or Fund sub-advisers may proactively make recommendations to the Proxy Committee regarding any proxy voting issue. In this regard, the process takes into consideration expressed views of portfolio management teams and Fund sub-advisers given their deep knowledge of investee companies. For any proxy vote, portfolio management teams and Investment Product advisers and sub-advisers may make a case to vote against the ISS or Proxy Committee’s recommendation (which is described under Voting Procedures above). Any portfolio management team’s or Investment Product adviser’s or sub-adviser’s opinion should be documented in a brief write-up for consideration by the Proxy Voting Committee who will determine, or escalate to the Proxy Governance Committee, the final voting decision.
Consistent Voting. Proxies will be voted consistently on the same matter when securities of an issuer are held by WFAM multiple client accounts unless there are special circumstances such as, for example, proposals concerning corporate actions such as mergers, tender offers, and acquisitions or as reasonably necessary to implement specified proxy voting guidelines as established by a client (e.g. Taft Hartley ISS Guidelines or custom proxy guidelines).
WFAM Top-of-House Proxy Voting Principles/Guidelines. The following reflects WFAM’s Top-of-House Voting Principles in effect as of the date of these Policies and Procedures. WFAM has put in place a custom voting policy with ISS to implement these voting principles.
Boards of Directors. We believe that Boards of Directors should have strong, independent leadership and should adopt structures and practices that enhance their effectiveness. We believe it is the responsibility of the Board of Directors to create, enhance, and protect shareholder value. We recognize that the optimal board size and governance structure can vary by company size, industry, region of operations, and circumstances specific to the company.
● | We generally vote for the election of Directors in uncontested elections. We reserve the right to vote on a case-by-case basis when directors fail to meet their duties as a board member, such as failing to act in the best economic interest of shareholders; failing to maintain independent audit, compensation, nominating committees; and failing to attend at least 75% of meetings, etc. |
● | We generally vote for an independent board that has a majority of outside directors who are not affiliated with the top executives and have minimal or no business dealings with the company to avoid potential conflicts of interests. |
● | Generally speaking, we believe Directors should sit on no more than 4 public boards at any given time. Directors serving on an excessive number of boards could result in time constraints and an inability to fulfill their duties. |
● | We generally support adopting a declassified board structure for public operating and holding companies. We reserve the right to vote on a case-by-case basis when companies have certain long-term business commitments. |
● | We generally support annual election of directors of public operating and holding companies. We reserve the right to vote on a case-by-case basis when companies have certain long-term business commitments. |
5
Fund Voting Reporting Coordination. Voting decisions made by the WFAM Proxy Committee on behalf of the Trusts and their series will be reported to ISS to ensure that votes are registered in a timely manner and included in Form N-PX reporting.
Practical Limitations to Proxy Voting. While WFAM uses its reasonable best efforts to vote proxies, in certain circumstances, it may be impractical or impossible for WFAM to vote proxies (e.g., limited value or unjustifiable costs).
Securities on Loan. As a general matter, securities on loan will not be recalled to facilitate proxy voting (in which case the borrower of the security shall be entitled to vote the proxy). However, as it relates to portfolio holdings of the Investment Products, if the WFAM Proxy Committee is aware of an item in time to recall the security and has determined in good faith that the importance of the matter to be voted upon outweighs the loss in lending revenue that would result from recalling the security (e.g., if there is a controversial upcoming merger or acquisition, or some other significant matter), the security will be recalled for voting.
Share Blocking. Proxy voting in certain countries requires ‘share blocking’. Shareholders wishing to vote their proxies must deposit their shares with a designated depositary before the date of the meeting. Consequently, the shares may not be sold in the period preceding the proxy vote. Absent compelling reasons, WFAM believes that the benefit derived from voting these shares is outweighed by the burden of limited trading. Therefore, if share blocking is required in certain markets, WFAM will not participate and refrain from voting proxies for those clients impacted by share blocking.
Conflicts of Interest. WFAM may have a conflict of interest regarding a proxy to be voted upon if, for example, WFAM or its affiliates have other relationships with the issuer of the proxy. In most instances, conflicts of interest are avoided through a strict and objective application of the voting guidelines. However, when the Proxy Administrator is aware of a material conflict of interest regarding a matter that would otherwise require a vote by the Proxy Committee or that, in the determination of the Proxy Committee, otherwise warrants the taking of additional steps to mitigate the conflict, the Proxy Committee or the Proxy Administrator shall address the material conflict by using any of the following methods:
1. |
Instructing ISS to vote in accordance with the recommendation ISS makes to its clients; |
2. |
With respect to any matters involving a portfolio holding of any Investment Product(s), disclosing the conflict to the Board of the relevant Investment Product(s) and obtaining its consent before voting with respect to shares held by the Investment Product(s); |
3. |
With respect to any matters involving a portfolio holding of any Investment Product(s), submitting the matter to the Board of the relevant Investment Product(s) to exercise its authority to vote on such matter with respect to shares held by the relevant Investment Product(s); |
6
4. |
Engaging an independent fiduciary who will direct the Proxy Committee how to vote on such matter following consultation with the Board of the relevant Investment Product(s) if the conflict pertains to a matter involving a portfolio holding of any Investment Product(s); |
5. |
Consulting with outside legal counsel for guidance on resolution of the conflict of interest; |
6. |
Erecting information barriers around the person or persons making voting decisions following consultation with the Board of any Investment Product(s) if the conflict pertains to a matter involving a portfolio holding of the relevant Investment Product(s); |
7. |
Voting in proportion to other shareholders (“mirror voting”) following consultation with the Board of any Investment Product(s) if the conflict pertains to a matter involving a portfolio holding of the relevant Investment Product(s); or |
8. |
Voting in other ways that are consistent with WFAM’s obligation to vote in the best interests of its clients and the investors in the Investment Products. |
The Proxy Committee will not permit its votes to be influenced by any conflict of interest that exists for any other affiliated person of WFAM (such as a sub-adviser or principal underwriter) or any affiliated persons of such affiliated persons and the Proxy Committee will vote all such matters without regard to the conflict.
Vendor Oversight: The WFAM Proxy Administrator monitors the ISS proxy process against specific criteria in order to identify potential issues relating to account reconciliation, unknown and rejected ballot reviews, upcoming proxy reviews, share reconciliation oversight, etc.
III. Other Provisions
Policy Review and Ad Hoc Meetings
The Proxy Governance Committee meets at least annually to review this Policy and consider any appropriate changes. Meetings may be convened more frequently (for example, to discuss a specific proxy agenda or proposal) as requested by the Manager of Proxy Administration, any member of the Proxy Committee, or WFAM’s Chief Compliance Officer. The Proxy Committee includes representation from Portfolio Management, Operations, Portfolio Risk Management and Analytics and, in a non-voting consultative capacity, Compliance.
Records Retention
The WFAM Proxy Administrator will maintain the following records relating to the implementation of the Policies and Procedures:
■ | A copy of these proxy voting policies and procedures; |
■ | Proxy statements received for client securities (which will be satisfied by relying on ISS); |
■ | Records of votes cast on behalf of Investment Products and separate account clients (which ISS maintains on behalf of WFAM); |
■ | Records of each written client request for proxy voting records and WFAM’s written response to any client request (written or oral) for such records; and |
■ | Any documents prepared by WFAM or ISS that were material to making a proxy voting decision. |
7
Such proxy voting books and records shall be maintained at an office of WFAM in an easily accessible place for a period of six years.
Disclosure of Policies and Procedures
WFAM will disclose to its separate clients a summary description of its proxy voting policy and procedures via mail. A summary of the proxy voting policy and procedures will be disclosed in the registration statements for the open-end Trusts, and on the Wells Fargo (Lux) Worldwide Fund and Wells Fargo Funds websites.
WFAM will also provide to clients proxy statements and any records as to how WFAM voted proxies on behalf its client upon request. Clients may contact their relationship manager for assistance, or call WFAM at 1-800-259-3305 or by e-mail at wellscapclientadmin@wellsfargo.com to request a record of proxies voted on their behalf.
WFAM will publish high-level proxy voting statistics in periodic reports. However, except as otherwise required by law, WFAM has a general policy of not disclosing to any issuer specific or third party how its separate account client proxies are voted.
Approved by the Proxy Committee: December, 2018
8
JOHN HANCOCK FUNDS1
NOMINATING AND GOVERNANCE COMMITTEE CHARTER
Overall Role and Responsibility
The Nominating and Governance Committee (the “Committee”) of each of the Trusts shall (1) make determinations and recommendations to the Board of Trustees (the “Board”) regarding issues related to (a) the composition of the Board and (b) corporate governance matters applicable to the Trustees who are not “interested persons” as defined in the Investment Company Act of 1940, as amended (the “1940 Act”), of any of the Trusts, or of any Fund’s investment adviser, subadviser or principal underwriter and who are “independent” as defined in the rules of the New York Stock Exchange (“NYSE”) (the “Independent Trustees”) and (2) discharge such additional duties, responsibilities and functions as are delegated to it from time to time.
Membership
The Nominating and Governance Committee (the “Committee”) shall be composed of all of the Independent Trustees of the Board. One member of the Committee shall be appointed by the Board as Chair of the Committee. The chair shall be responsible for leadership of the Committee, including scheduling meetings or reviewing and approving the schedule for them, preparing agendas or reviewing and approving them before meetings, presiding over meetings of the Committee and making reports to the full Board, as appropriate.
Structure, Operations and Governance
Meetings and Actions by Written Consent. The Committee shall meet as often as required or as the Committee deems appropriate, with or without management present. Meetings may be called and notice given by the Committee chair or a majority of the members of the Committee. Members may attend meetings in person or by telephone. The Committee may act by written consent to the extent permitted by law and the Funds’ governing documents. The Committee shall report to the Board on any significant action it takes not later than the next following Board meeting.
Required Vote and Quorum. The affirmative vote of a majority of the members of the Committee participating in any meeting of the Committee at which a quorum is present is necessary for the adoption of any resolution. At least a majority of the Committee members present at the meeting in person or by telephone shall constitute a quorum for the transaction of business.
1 “John Hancock Funds” includes each trust and series as may be amended from time to time (each individually, a “Trust,” and collectively, the “Trusts,” and each series thereof, a “Portfolio” or “Fund,” and collectively, the “Portfolios” or “Funds”).
1
Delegation to Subcommittees. The Committee may delegate any portion of its authority to a subcommittee of one or more members.
Appropriate Resources and Authority. The Committee shall have the resources and authority appropriate to discharge its responsibilities, including the authority to retain special counsel and other advisers, experts or consultants, at the Funds’ expense, as it determines necessary or appropriate to carry out its duties and responsibilities. In addition, the Committee shall have direct access to such officers of and service providers to the Funds as it deems desirable.
Review of Charter. The Committee Charter shall be approved by at least a majority of the Independent Trustees of the Trust. The Committee shall review and assess the adequacy of this Charter periodically and, where necessary or as it deems desirable, will recommend changes to the Board for its approval. The Board may amend this Charter at any time in response to recommendations from the Committee or on its own motion.
Executive Sessions. The Committee may meet privately and may invite non-members to attend such meetings. The Committee may meet with representatives of the Investment Management Services department of the Funds’ advisers, internal legal counsel of the Funds’ advisers, members of the John Hancock Funds Risk & Investment Operations Committee (the “RIO Committee”) and with representatives of the Funds’ service providers, including the subadvisers, to discuss matters that relate to the areas for which the Committee has responsibility.
Specific Duties and Responsibilities
The Committee shall have the following duties and powers, to be exercised at such times and in such manner as the Committee shall determine:
1. |
Except where a Trust is legally required to nominate individuals recommended by another, to identify individuals qualified to serve as Independent Trustees of the Trusts, and to consider and recommend to the full Board nominations of individuals to serve as Trustees. |
2. |
To consider, as it deems necessary or appropriate, the criteria for persons to fill existing or newly created Trustee vacancies. The Committee shall use the criteria and principles set forth in Annex A to guide its Trustee selection process. |
3. |
To consider and recommend changes to the Board regarding the size, structure, and composition of the Board. |
4. |
To evaluate, from time to time, and determine changes to the retirement policies for the Independent Trustees, as appropriate. |
5. |
To periodically review the Board’s committee structure and, in collaboration with the Chairs of the various Committees, the charters of the Board’s committees, and recommend to the Board of Trustees changes to the committee structure and charters as it deems appropriate. |
2
6. |
To retain and terminate any firm(s) to be used to identify or evaluate or assist in identifying or evaluating potential Independent Board nominees, subject to the Board’s sole authority to approve the firm’s fees and other retention terms. |
7. |
To consider and determine the amount of compensation to be paid by the Trusts to the Independent Trustees, including the compensation of the Chair of the Board or any Vice-Chair of the Board and of Committee Chairs, and to address compensation-related matters. The Chair of the Board has been granted the authority to approve special compensation to Independent Trustees in recognition of any significant amount of additional time and service to the Trusts provided by them, subject to ratification of any such special compensation by the Committee at the next regular meeting of the Committee. |
8. |
To coordinate and administer an annual self-evaluation of the Board, which will include, at a minimum, a review of its effectiveness in overseeing the number of Funds in the Fund complex and the effectiveness of its committee structure. |
9. |
To review the Board Governance Procedures and recommend to the Board of Trustees changes to the Procedures as the Committee deems appropriate. |
10. |
To report its activities to the full Board and to make such recommendations with respect to the matters described above and other matters as the Committee may deem necessary or appropriate. |
Additional Responsibilities
The Committee will also perform other tasks assigned to it from time to time by the Chair of the Board or by the Board, and will report findings and recommendations to the Board, as appropriate.
Last revised:
3
ANNEX A
The Committee may take into account a wide variety of factors in considering Trustee candidates, including (but not limited to) the criteria set forth below. The Committee may determine that a candidate who does not satisfy these criteria in one or more respects should nevertheless be considered as a nominee if the Committee finds that the criteria satisfied by the candidate and the candidate’s other qualifications demonstrate the appropriate level of fitness to serve.
General Criteria
1. |
Nominees should have a reputation for integrity, honesty and adherence to high ethical standards, and such other personal characteristics as a capacity for leadership and the ability to work well with others. |
2. |
Nominees should have business, professional, academic, financial, accounting or other experience and qualifications which demonstrate that they will make a valuable contribution as Trustees. |
3. |
Nominees should have a commitment to understand the Funds, and the responsibilities of a trustee/director of an investment company and to regularly attend and participate in meetings of the Board and its committees. |
4. |
Nominees should have the ability to understand the sometimes conflicting interests of the various constituencies of the Funds, including shareholders and the investment adviser, and to act in the interests of all shareholders. |
5. |
Nominees should not have, nor appear to have, a conflict of interest that would impair their ability to represent the interests of all the shareholders and to fulfill the responsibilities of a trustee. |
6. |
Nominees should have experience on corporate or other institutional bodies having oversight responsibilities. |
It is the intent of the Committee that at least one Independent Trustee be an “audit committee financial expert” as that term is defined in Item 3 of Form N-CSR.
Application of Criteria to Current Trustees
The re-nomination of current Trustees should not be viewed as automatic, but should be based on continuing qualification under the criteria set forth above based on, among other things, the current Trustee’s contribution to the Board and any committee on which he or she serves.
Review of Nominations
1. |
The Committee believes that it is in the best interests of each Trust and its shareholders to obtain highly-qualified candidates to serve as members of the Board. |
2. | In nominating candidates who would be Independent Trustees, the Committee believes that no particular qualities or skills nor any specific minimum qualifications or disqualifications are controlling or paramount. The Committee shall take into consideration any such factors as it deems appropriate; however, the appropriate mix of skills, expertise and attributes needed to maintain an effective board are sought in the applicant pool as part of every search the Board undertakes for new trustees, including but not limited to the diversity of thought, as well as of gender, race, ethnic background and geographic origin. These factors may also include (but are not limited to) the person’s character, integrity, judgment, skill and experience with investment companies and other organizations of comparable purpose, complexity and size and subject to similar legal restrictions and oversight; the interplay of the candidate’s experience with the experience of other Board members; and the extent to which the candidate would be a desirable addition to the Board and any Committees thereof. Other factors that the Committee may take into consideration include a person’s availability and commitment to attend meetings and perform his or her responsibilities; whether or not the person has or had any relationships that might impair or appear to impair his or her independence, such as any business, financial or family relationships with Fund management, the investment adviser and/or any subadviser of the Funds, as applicable, Fund service providers, or their affiliates or with Fund shareholders. The Committee will strive to achieve a group that reflects a diversity of experiences in respect of industries, professions and other experiences, and that is diversified as to thought, gender, race, ethnic background and geographic origin. |
3. | While the Committee is solely responsible for the selection and recommendation to the Board of Independent Trustee candidates, the Committee may consider nominees recommended by any source, including shareholders, management, legal counsel and Board members, as it deems appropriate. The Committee may retain a professional search firm or a consultant to assist the Committee in a search for a qualified candidate. Any recommendations from shareholders shall be directed to the Secretary of the relevant Trust at such address as is set forth in the Trust’s disclosure documents. Recommendations from management may be submitted to the Committee Chair. All recommendations shall include all information relating to such person that is required to be disclosed in solicitations of proxies for the election of Board members and as specified in the relevant Trust’s By-Laws, and must be accompanied by a written consent of the proposed candidate to stand for election if nominated for the Board and to serve if elected by shareholders. |
4. |
Any shareholder nomination must be submitted in compliance with all of the pertinent provisions of Rule 14a-8 under the Securities Exchange Act of 1934 in order to be considered by the Committee. In evaluating a nominee recommended by a shareholder, the Committee, in addition to the criteria discussed above, may consider the objectives of the shareholder in submitting that nomination and whether such objectives are consistent with the interests of all shareholders. If the Board determines to include a shareholder’s candidate among the slate of its designated nominees, the candidate’s name will be placed on the Trust’s proxy card. If the Board determines not to include such candidate among its designated nominees, and the shareholder has satisfied the requirements of Rule 14a-8, the shareholder’s candidate will be treated as a nominee of the shareholder who originally nominated the candidate. In that case, the candidate will not be named on the proxy card distributed with the Trust’s proxy statement. |
5. |
As long as a current Independent Trustee continues, in the opinion of the Committee, to satisfy the criteria listed above, the Committee generally would favor the re-nomination of a current Trustee rather than a new candidate. Consequently, while the Committee will consider nominees recommended by shareholders to serve as trustees, the Committee may only act upon such recommendations if there is a vacancy on the Board, or the Committee determines that the selection of a new or additional Trustee is in the best interests of the relevant Trust. In the event that a vacancy arises or a change in Board membership is determined to be advisable, the Committee will, in addition to any shareholder recommendations, consider candidates identified by other means as discussed in this Annex A. |
6. |
With respect to candidates for Independent Trustee, a biography of each candidate shall be acquired and shall be reviewed by counsel to the Independent Trustees and counsel to the Trust to determine the candidate’s eligibility to serve as an Independent Trustee. |
7. |
The Committee may from time to time establish specific requirements and/or additional factors to be considered for Independent Trustee candidates as it deems necessary or appropriate. |
8. |
After its consideration of relevant factors, the Committee shall present its recommendation(s) to the full Board for its consideration. |
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on June 3, 2019, and payable on June 28, 2019. No action is required on your part.
Distribution Period: | June 2019 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable June 28, 2019, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.0848 | 61% | 0.8796 | 80% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0532 | 39% | 0.2244 | 20% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0000 | 0% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 1.10400 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on May 31, 2019 | 9.89% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of May 31, 2019 | 6.55% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through May 31, 2019 | 10.41% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of May 31, 2019 | 4.37% |
You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s managed distribution plan.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the June 2019 distribution pursuant to the Fund’s managed distribution plan (the “Plan”). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
If you have questions or need additional information, please contact your financial professional or call the John Hancock Investments Closed-End Fund Information Line at 1-800-843-0090, Monday through Friday between 8:00 a.m. and 7:00 p.m., Eastern Time.
1 The Fund’s current fiscal year began on November 1, 2018, and will end on October 31, 2019. |
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on July 1, 2019, and payable on July 31, 2019. No action is required on your part.
Distribution Period: | July 2019 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable July 31, 2019, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.0276 | 20% | 0.9064 | 73% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.3356 | 27% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.1104 | 80% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 1.2420 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on June 30, 2019 | 9.79% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of June 30, 2019 | 6.38% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through June 30, 2019 | 13.99% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of June 30, 2019 | 4.78% |
You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s managed distribution plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.”
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the July 2019 distribution pursuant to the Fund’s managed distribution plan (the “Plan”). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
If you have questions or need additional information, please contact your financial professional or call the John Hancock Investments Closed-End Fund Information Line at 1-800-843-0090, Monday through Friday between 8:00 a.m. and 7:00 p.m., Eastern Time.
1 The Fund’s current fiscal year began on November 1, 2018, and will end on October 31, 2019. |
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on September 3, 2019, and payable on September 30, 2019. No action is required on your part.
Distribution Period: | September 2019 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable September 30, 2019, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.1046 | 76% | 1.1820 | 78% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0334 | 24% | 0.3360 | 22% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0000 | 0% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 1.5180 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on August 31, 2019 | 10.19% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of August 31, 2019 | 6.35% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through August 31, 2019 | 15.79% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of August 31, 2019 | 5.82% |
You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s managed distribution plan.
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the September 2019 distribution pursuant to the Fund’s managed distribution plan (the “Plan”). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
If you have questions or need additional information, please contact your financial professional or call the John Hancock Investment Management Closed-End Fund Information Line at 1-800-843-0090, Monday through Friday between 8:00 a.m. and 7:00 p.m., Eastern Time.
1 The Fund’s current fiscal year began on November 1, 2018, and will end on October 31, 2019. |
John Hancock Tax-Advantaged Dividend Income Fund
Notification of Sources of Distribution
This notice provides shareholders of the John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) with important information concerning the distribution declared on October 1, 2019, and payable on October 31, 2019. No action is required on your part.
Distribution Period: | October 2019 |
Distribution Amount Per Common Share: | $0.1380 |
The following table sets forth the estimated sources of the current distribution, payable October 31, 2019, and the cumulative distributions paid this fiscal year to date from the following sources: net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.
% Breakdown | ||||||||
of the Total | ||||||||
Total Cumulative | Cumulative | |||||||
% Breakdown | Distributions for | Distributions | ||||||
Current | of the Current | the Fiscal Year to | for the Fiscal | |||||
Source | Distribution ($) | Distribution | Date ($)1 | Year to Date1 | ||||
Net Investment Income | 0.0404 | 29% | 1.2234 | 74% | ||||
Net Realized Short- | ||||||||
Term Capital Gains | 0.0000 | 0% | 0.0000 | 0% | ||||
Net Realized Long- | ||||||||
Term Capital Gains | 0.0408 | 30% | 0.4324 | 26% | ||||
Return of Capital or | ||||||||
Other Capital Source | 0.0568 | 41% | 0.0000 | 0% | ||||
Total per common share | 0.1380 | 100% | 1.6558 | 100% | ||||
Average annual total return (in relation to NAV) for the 5 years ended on September 30, 2019 | 11.72% | |||||||
Annualized current distribution rate expressed as a percentage of NAV as of September 30, 2019 | 6.13% | |||||||
Cumulative total return (in relation to NAV) for the fiscal year through September 30, 2019 | 20.53% | |||||||
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of September 30, 2019 | 6.13% |
You should not draw any conclusions about the Fund’s investment performance from the amount of this distribution or from the terms of the Fund’s managed distribution plan.
The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be a return of capital. A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.”
The amounts and sources of distributions reported in this Notice are only estimates and are not being provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes will depend upon the Fund’s investment experience during the remainder of its fiscal year and may be subject to changes based on tax regulations. The Fund will send you a Form 1099-DIV for the calendar year that will tell you how to report these distributions for federal income tax purposes.
The Fund has declared the October 2019 distribution pursuant to the Fund’s managed distribution plan (the “Plan”). Under the Plan, the Fund makes fixed monthly distributions in the amount of $0.1380 per share, which will continue to be paid monthly until further notice.
If you have questions or need additional information, please contact your financial professional or call the John Hancock Investment Management Closed-End Fund Information Line at 1-800-843-0090, Monday through Friday between 8:00 a.m. and 7:00 p.m., Eastern Time.
1 The Fund’s current fiscal year began on November 1, 2018, and will end on October 31, 2019. |
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