SEC Form N-CSRS filed by John Hancock Tax Advantaged Dividend Income Fund
$HTD
Finance Companies
Finance
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: 617-543-9634
Date of fiscal year end: |
October 31 |
Date of reporting period: |
April 30, 2024 |
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 net asset value (NAV) is presented in the "Financial
highlights" section.
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
John Hancock
Tax-Advantaged Dividend Income Fund
Table of contents
| 1 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT |
Your fund at a glance
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
4/30/2024 (%)
The Primary Blended Index is 55%
ICE BofA U.S. All Capital Securities Index and 45% S&P 500 Utilities Index.
The Intercontinental Exchange
(ICE) Bank of America (BofA) U.S. All Capital Securities Index tracks all fixed-to floating-rate, perpetual callable and capital securities of the ICE BofA U.S. Corporate Index.
The S&P 500 Utilities Index
tracks the performance 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, 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 increase 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.
| SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 2 |
Portfolio summary
PORTFOLIO COMPOSITION AS OF
4/30/2024 (% of total investments)
SECTOR COMPOSITION AS OF
4/30/2024 (% of total investments)
| TOP 10 ISSUERS AS OF 4/30/2024 (% of total investments) | |
| Edison International | 3.4 |
| Duke Energy Corp. | 2.8 |
| Bank of America Corp. | 2.8 |
| BP PLC | 2.8 |
| Huntington Bancshares, Inc. | 2.6 |
| NextEra Energy, Inc. | 2.6 |
| American Electric Power Company, Inc. | 2.4 |
| Verizon Communications, Inc. | 2.4 |
| Dominion Energy, Inc. | 2.3 |
| Kinder Morgan, Inc. | 2.2 |
| TOTAL | 26.3 |
| Cash and cash equivalents are not included. | |
| 3 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT |
Fund’s investments
AS OF 4-30-24
(unaudited)
| Shares | Value | ||||
| Common stocks 89.0% (58.1% of Total investments) | $684,952,244 | ||||
| (Cost $565,728,014) | |||||
| Communication services 6.7% | 51,331,195 | ||||
| Diversified telecommunication services 6.5% | |||||
| AT&T, Inc. (A)(B) | 1,301,849 | 21,988,230 | |||
| Verizon Communications, Inc. (A)(B) | 704,432 | 27,818,015 | |||
| Media 0.2% | |||||
| Paramount Global, Class B (B) | 133,885 | 1,524,950 | |||
| Consumer staples 1.3% | 10,253,520 | ||||
| Tobacco 1.3% | |||||
| Philip Morris International, Inc. (A)(B) | 108,000 | 10,253,520 | |||
| Energy 12.5% | 96,402,744 | ||||
| Oil, gas and consumable fuels 12.5% | |||||
| BP PLC, ADR | 845,450 | 32,778,097 | |||
| Enbridge, Inc. (A)(B) | 347,106 | 12,336,147 | |||
| Kinder Morgan, Inc. | 1,445,000 | 26,414,600 | |||
| Kinetik Holdings, Inc. | 35,000 | 1,341,900 | |||
| ONEOK, Inc. (B) | 215,000 | 17,010,800 | |||
| The Williams Companies, Inc. | 170,000 | 6,521,200 | |||
| Financials 2.7% | 20,586,444 | ||||
| Banks 2.7% | |||||
| Columbia Banking System, Inc. | 378,333 | 7,116,444 | |||
| Huntington Bancshares, Inc. (B) | 1,000,000 | 13,470,000 | |||
| Materials 1.0% | 7,302,000 | ||||
| Metals and mining 1.0% | |||||
| Vale SA, ADR | 600,000 | 7,302,000 | |||
| Real estate 1.5% | 11,839,069 | ||||
| Specialized REITs 1.5% | |||||
| Crown Castle, Inc. | 126,243 | 11,839,069 | |||
| Utilities 63.3% | 487,237,272 | ||||
| Electric utilities 32.7% | |||||
| Alliant Energy Corp. | 360,000 | 17,928,000 | |||
| American Electric Power Company, Inc. (A)(B) | 335,000 | 28,820,050 | |||
| Duke Energy Corp. (A)(B) | 290,000 | 28,495,400 | |||
| Entergy Corp. (B) | 218,000 | 23,254,060 | |||
| Evergy, Inc. | 295,000 | 15,472,750 | |||
| Eversource Energy (A)(B) | 318,227 | 19,290,921 | |||
| Exelon Corp. (B) | 280,000 | 10,522,400 | |||
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 4 |
| Shares | Value | ||||
| Utilities (continued) | |||||
| Electric utilities (continued) | |||||
| FirstEnergy Corp. (A)(B) | 510,000 | $19,553,400 | |||
| NextEra Energy, Inc. | 145,373 | 9,735,630 | |||
| OGE Energy Corp. (B) | 610,000 | 21,136,500 | |||
| Pinnacle West Capital Corp. (B) | 50,000 | 3,682,500 | |||
| PPL Corp. (A)(B) | 775,000 | 21,281,500 | |||
| The Southern Company | 289,925 | 21,309,488 | |||
| Xcel Energy, Inc. (A)(B) | 207,000 | 11,122,110 | |||
| Gas utilities 3.1% | |||||
| Spire, Inc. | 235,000 | 14,520,650 | |||
| UGI Corp. | 365,000 | 9,329,400 | |||
| Independent power and renewable electricity producers 4.4% | |||||
| Clearway Energy, Inc., Class C (A)(B) | 414,010 | 9,679,554 | |||
| NextEra Energy Partners LP | 125,000 | 3,545,000 | |||
| The AES Corp. | 1,174,600 | 21,025,340 | |||
| Multi-utilities 23.1% | |||||
| Algonquin Power & Utilities Corp. | 492,150 | 10,512,324 | |||
| Ameren Corp. (A)(B) | 310,000 | 22,899,700 | |||
| Black Hills Corp. | 394,775 | 21,673,148 | |||
| CenterPoint Energy, Inc. | 505,923 | 14,742,596 | |||
| Dominion Energy, Inc. (A)(B) | 389,814 | 19,872,718 | |||
| DTE Energy Company (A)(B) | 180,000 | 19,857,600 | |||
| National Grid PLC, ADR (A)(B) | 201,583 | 13,435,507 | |||
| NiSource, Inc. (B) | 790,000 | 22,009,400 | |||
| Public Service Enterprise Group, Inc. (B) | 275,000 | 18,997,000 | |||
| Sempra | 188,924 | 13,532,626 | |||
| Preferred securities 26.6% (17.3% of Total investments) | $204,503,617 | ||||
| (Cost $214,789,309) | |||||
| Communication services 0.9% | 7,116,336 | ||||
| Wireless telecommunication services 0.9% | |||||
| Telephone & Data Systems, Inc., 6.625% (B) | 410,400 | 7,116,336 | |||
| Financials 18.2% | 140,052,192 | ||||
| Banks 7.6% | |||||
| Bank of America Corp., 7.250% | 7,000 | 8,050,000 | |||
| Fifth Third Bancorp, 6.000% (B) | 400,000 | 9,192,000 | |||
| First Citizens BancShares, Inc., 5.375% (B) | 199,800 | 4,191,804 | |||
| Huntington Bancshares, Inc., 6.875% (6.875% to 4-15-28, then 5 Year CMT + 2.704%) (B) | 320,150 | 7,952,526 | |||
| KeyCorp, 5.650% (B) | 116,975 | 2,406,176 | |||
| KeyCorp, 6.200% (6.200% to 12-15-27, then 5 Year CMT + 3.132%) (B) | 164,050 | 3,674,720 | |||
| Regions Financial Corp., 4.450% (B) | 332,500 | 5,689,075 | |||
| Synovus Financial Corp., 8.940% (3 month CME Term SOFR + 3.614%) (B)(C) | 188,000 | 4,698,120 | |||
| 5 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
| Shares | Value | ||||
| Financials (continued) | |||||
| Banks (continued) | |||||
| Wells Fargo & Company, 7.500% | 11,000 | $12,599,840 | |||
| Capital markets 3.1% | |||||
| Carlyle Finance LLC, 4.625% (B) | 65,274 | 1,182,112 | |||
| Morgan Stanley, 6.375% (B) | 335,000 | 8,348,200 | |||
| Morgan Stanley, 7.125% (B) | 144,887 | 3,655,499 | |||
| TPG Operating Group II LP, 6.950% (B) | 400,000 | 10,316,000 | |||
| Consumer finance 1.0% | |||||
| Synchrony Financial, 8.250% (8.250% to 5-15-29, then 5 Year CMT + 4.044%) (B) | 313,900 | 7,888,307 | |||
| Financial services 2.0% | |||||
| Apollo Global Management, Inc., 7.625% (7.625% to 12-15-28, then 5 Year CMT + 3.226%) | 534,150 | 14,112,243 | |||
| Jackson Financial, Inc., 8.000% (8.000% to 3-30-28, then 5 Year CMT + 3.728%) | 40,000 | 1,047,200 | |||
| KKR Group Finance Company IX LLC, 4.625% (B) | 4,150 | 78,477 | |||
| Insurance 4.5% | |||||
| American Equity Investment Life Holding Company, 6.625% (6.625% to 9-1-25, then 5 Year CMT + 6.297%) (B) | 164,125 | 4,032,551 | |||
| Athene Holding, Ltd., 6.350% (6.350% to 6-30-29, then 3 month LIBOR + 4.253%) | 355,787 | 8,364,552 | |||
| Brighthouse Financial, Inc., 6.600% (B) | 100,000 | 2,222,000 | |||
| Enstar Group, Ltd., 7.000% (7.000% to 9-1-28, then 3 month LIBOR + 4.015%) (B) | 149,425 | 3,810,338 | |||
| Lincoln National Corp., 9.000% (B) | 408,300 | 11,003,685 | |||
| The Allstate Corp., 7.375% (B) | 207,525 | 5,536,767 | |||
| Utilities 7.5% | 57,335,089 | ||||
| Electric utilities 6.0% | |||||
| Duke Energy Corp., 5.750% (B) | 200,000 | 4,950,000 | |||
| NextEra Energy, Inc., 6.926% | 337,550 | 13,755,163 | |||
| SCE Trust II, 5.100% (B) | 591,973 | 11,726,985 | |||
| SCE Trust VI, 5.000% (B) | 308,101 | 6,106,562 | |||
| SCE Trust VII, 7.500% (B) | 361,525 | 9,435,803 | |||
| Gas utilities 0.7% | |||||
| Spire, Inc., 5.900% (B) | 219,650 | 5,286,976 | |||
| Multi-utilities 0.8% | |||||
| Algonquin Power & Utilities Corp., 6.200% (6.200% to 7-1-24, then 3 month LIBOR + 4.010% to 7-1-29, then 3 month LIBOR + 4.260% to 7-1-49, then 3 month LIBOR + 5.010%) | 200,000 | 4,990,000 | |||
| Sempra, 5.750% (B) | 45,000 | 1,083,600 | |||
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 6 |
| Rate (%) | Maturity date | Par value^ | Value | ||
| Corporate bonds 37.1% (24.2% of Total investments) | $285,207,227 | ||||
| (Cost $288,884,890) | |||||
| Consumer discretionary 2.0% | 15,351,390 | ||||
| Automobiles 2.0% | |||||
| General Motors Financial Company, Inc. (5.700% to 9-30-30, then 5 Year CMT + 4.997%) (A)(B)(D) | 5.700 | 09-30-30 | 9,675,000 | 9,054,480 | |
| General Motors Financial Company, Inc. (6.500% to 9-30-28, then 3 month LIBOR + 3.436%) (D) | 6.500 | 09-30-28 | 6,600,000 | 6,296,910 | |
| Energy 0.2% | 1,905,126 | ||||
| Oil, gas and consumable fuels 0.2% | |||||
| Energy Transfer LP (8.000% to 5-15-29, then 5 Year CMT + 4.020%) | 8.000 | 05-15-54 | 1,850,000 | 1,905,126 | |
| Financials 27.4% | 210,415,521 | ||||
| Banks 20.9% | |||||
| Banco Santander SA (9.625% to 11-21-33, then 5 Year CMT + 5.298%) (D) | 9.625 | 05-21-33 | 5,600,000 | 5,978,504 | |
| Bank of America Corp. (5.875% to 3-15-28, then 3 month CME Term SOFR + 3.193%) (D) | 5.875 | 03-15-28 | 10,025,000 | 9,615,131 | |
| Bank of America Corp. (6.125% to 4-27-27, then 5 Year CMT + 3.231%) (A)(B)(D) | 6.125 | 04-27-27 | 15,690,000 | 15,504,430 | |
| Barclays PLC (9.625% to 6-15-30, then 5 Year SOFR ICE Swap Rate + 5.775%) (D) | 9.625 | 12-15-29 | 6,760,000 | 7,065,072 | |
| BNP Paribas SA (8.000% to 8-22-31, then 5 Year CMT + 3.727%) (D)(E) | 8.000 | 08-22-31 | 5,900,000 | 5,862,986 | |
| Citigroup, Inc. (7.375% to 5-15-28, then 5 Year CMT + 3.209%) (D) | 7.375 | 05-15-28 | 9,800,000 | 10,048,851 | |
| Citigroup, Inc. (7.625% to 11-15-28, then 5 Year CMT + 3.211%) (A)(B)(D) | 7.625 | 11-15-28 | 11,955,000 | 12,337,488 | |
| Citizens Financial Group, Inc. (3 month CME Term SOFR + 3.265%) (C)(D) | 8.566 | 07-06-24 | 13,000,000 | 12,383,779 | |
| Citizens Financial Group, Inc. (3 month CME Term SOFR + 3.419%) (C)(D) | 8.720 | 07-06-24 | 13,500,000 | 12,993,561 | |
| CoBank ACB (6.450% to 10-1-27, then 5 Year CMT + 3.487%) (D) | 6.450 | 10-01-27 | 5,000,000 | 4,936,988 | |
| CoBank ACB (7.250% to 7-1-29, then 5 Year CMT + 2.880%) (D) | 7.250 | 07-01-29 | 5,250,000 | 5,229,445 | |
| Comerica, Inc. (5.625% to 10-1-25, then 5 Year CMT + 5.291%) (D) | 5.625 | 07-01-25 | 8,370,000 | 8,061,674 | |
| Huntington Bancshares, Inc. (5.625% to 7-15-30, then 10 Year CMT + 4.945%) (A)(B)(D) | 5.625 | 07-15-30 | 7,570,000 | 6,760,896 | |
| Huntington Bancshares, Inc. (3 month CME Term SOFR + 3.142%) (A)(B)(C)(D) | 8.470 | 07-15-24 | 3,000,000 | 2,872,276 | |
| JPMorgan Chase & Co. (6.875% to 6-1-29, then 5 Year CMT + 2.737%) (A)(B)(D) | 6.875 | 06-01-29 | 7,820,000 | 8,013,250 | |
| 7 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
| Rate (%) | Maturity date | Par value^ | Value | ||
| Financials (continued) | |||||
| Banks (continued) | |||||
| KeyCorp (5.000% to 9-15-26, then 3 month CME Term SOFR + 3.868%) (D) | 5.000 | 09-15-26 | 5,234,000 | $4,414,448 | |
| Societe Generale SA (10.000% to 5-14-29, then 5 Year CMT + 5.448%) (D)(E) | 10.000 | 11-14-28 | 5,900,000 | 6,181,536 | |
| The PNC Financial Services Group, Inc. (6.000% to 5-15-27, then 5 Year CMT + 3.000%) (A)(B)(D) | 6.000 | 05-15-27 | 14,000,000 | 13,466,545 | |
| Wells Fargo & Company (7.625% to 9-15-28, then 5 Year CMT + 3.606%) (A)(B)(D) | 7.625 | 09-15-28 | 8,624,000 | 9,017,530 | |
| Capital markets 3.3% | |||||
| State Street Corp. (6.700% to 3-15-29, then 5 Year CMT + 2.613%) (D) | 6.700 | 03-15-29 | 5,244,000 | 5,248,412 | |
| The Charles Schwab Corp. (5.375% to 6-1-25, then 5 Year CMT + 4.971%) (A)(B)(D) | 5.375 | 06-01-25 | 3,400,000 | 3,362,180 | |
| The Goldman Sachs Group, Inc. (7.500% to 2-10-29, then 5 Year CMT + 3.156%) (A)(B)(D) | 7.500 | 02-10-29 | 7,493,000 | 7,754,311 | |
| The Goldman Sachs Group, Inc. (7.500% to 5-10-29, then 5 Year CMT + 2.809%) (D) | 7.500 | 05-10-29 | 8,861,000 | 8,957,431 | |
| Consumer finance 0.7% | |||||
| Discover Financial Services (6.125% to 9-23-25, then 5 Year CMT + 5.783%) (D) | 6.125 | 06-23-25 | 5,200,000 | 5,199,726 | |
| Insurance 2.5% | |||||
| Markel Group, Inc. (6.000% to 6-1-25, then 5 Year CMT + 5.662%) (A)(B)(D) | 6.000 | 06-01-25 | 6,500,000 | 6,449,544 | |
| MetLife, Inc. (5.875% to 3-15-28, then 3 month CME Term SOFR + 3.221%) (D) | 5.875 | 03-15-28 | 1,000,000 | 971,801 | |
| SBL Holdings, Inc. (7.000% to 5-13-25, then 5 Year CMT + 5.580%) (D)(E) | 7.000 | 05-13-25 | 13,975,000 | 11,727,726 | |
| Utilities 7.5% | 57,535,190 | ||||
| Electric utilities 3.8% | |||||
| Edison International (5.000% to 3-15-27, then 5 Year CMT + 3.901% to 3-15-32, then 5 Year CMT + 4.151% to 3-15-47, then 5 Year CMT + 4.901%) (D) | 5.000 | 12-15-26 | 3,952,000 | 3,713,712 | |
| Edison International (5.375% to 3-15-26, then 5 Year CMT + 4.698%) (D) | 5.375 | 03-15-26 | 9,500,000 | 9,100,952 | |
| NextEra Energy Capital Holdings, Inc. (6.700% to 9-1-29, then 5 Year CMT + 2.364%) | 6.700 | 09-01-54 | 3,850,000 | 3,813,073 | |
| NRG Energy, Inc. (10.250% to 3-15-28, then 5 Year CMT + 5.920%) (D)(E) | 10.250 | 03-15-28 | 11,825,000 | 12,748,745 | |
| Independent power and renewable electricity producers 2.7% | |||||
| Vistra Corp. (8.000% to 10-15-26, then 5 Year CMT + 6.930%) (D)(E) | 8.000 | 10-15-26 | 8,210,000 | 8,294,998 | |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 8 |
| Rate (%) | Maturity date | Par value^ | Value | ||
| Utilities (continued) | |||||
| Independent power and renewable electricity producers (continued) | |||||
| Vistra Corp. (8.875% to 1-15-29, then 5 Year CMT + 5.045%) (D)(E) | 8.875 | 01-15-29 | 11,722,000 | $12,080,764 | |
| Multi-utilities 1.0% | |||||
| Dominion Energy, Inc. (4.350% to 4-15-27, then 5 Year CMT + 3.195%) (D) | 4.350 | 01-15-27 | 8,500,000 | 7,782,946 | |
| Yield (%) | Shares | Value | |||
| Short-term investments 0.5% (0.4% of Total investments) | $4,262,144 | ||||
| (Cost $4,263,130) | |||||
| Short-term funds 0.5% | 4,262,144 | ||||
| John Hancock Collateral Trust (F) | 5.4256(G) | 426,351 | 4,262,144 | ||
| Total investments (Cost $1,073,665,343) 153.2% | $1,178,925,232 | ||||
| Other assets and liabilities, net (53.2%) | (409,612,100) | ||||
| Total net assets 100.0% | $769,313,132 | ||||
| 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 |
| CME | CME Group Published Rates |
| CMT | Constant Maturity Treasury |
| ICE | Intercontinental Exchange |
| LIBOR | London Interbank Offered Rate |
| SOFR | Secured Overnight Financing Rate |
| (A) | All or a portion of this security is on loan as of 4-30-24, and is a component of the fund’s leverage under the Liquidity Agreement. |
| (B) | All or a portion of this security is pledged as collateral pursuant to the Liquidity Agreement. Total collateral value at 4-30-24 was $557,395,414. A portion of the securities pledged as collateral were loaned pursuant to the Liquidity Agreement. The value of securities on loan amounted to $264,940,255. |
| (C) | Variable rate obligation. The coupon rate shown represents the rate at period end. |
| (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. |
| (F) | Investment is an affiliate of the fund, the advisor and/or subadvisor. |
| (G) | The rate shown is the annualized seven-day yield as of 4-30-24. |
| 9 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
DERIVATIVES
SWAPS
| 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 | 210,000,000 | USD | Fixed 3.662% | USD SOFR Compounded OIS(a) | Semi Annual | Quarterly | May 2026 | — | $4,030,243 | $4,030,243 |
| Centrally cleared | 104,500,000 | USD | Fixed 3.473% | USD SOFR Compounded OIS(a) | Semi-Annual | Quarterly | May 2026 | — | 2,476,208 | 2,476,208 |
| Centrally cleared | 52,200,000 | USD | Fixed 3.817% | USD SOFR Compounded OIS(a) | Semi-Annual | Quarterly | Dec 2026 | — | 861,208 | 861,208 |
| — | $7,367,659 | $7,367,659 | ||||||||
| (a) | At 4-30-24, the overnight SOFR was 5.340%. |
| Derivatives Currency Abbreviations | |
| USD | U.S. Dollar |
| Derivatives Abbreviations | |
| OIS | Overnight Index Swap |
| OTC | Over-the-counter |
| SOFR | Secured Overnight Financing Rate |
At 4-30-24, the aggregate cost of
investments for federal income tax purposes was $1,076,560,224. Net unrealized appreciation aggregated to $109,732,667, of which $174,618,606 related to gross unrealized appreciation and $64,885,939 related to gross
unrealized depreciation.
See Notes to financial statements
regarding investment transactions and other derivatives information.
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 10 |
Financial statements
STATEMENT OF ASSETS AND
LIABILITIES 4-30-24 (unaudited)
| Assets | |
| Unaffiliated investments, at value (Cost $1,069,402,213) | $1,174,663,088 |
| Affiliated investments, at value (Cost $4,263,130) | 4,262,144 |
| Total investments, at value (Cost $1,073,665,343) | 1,178,925,232 |
| Receivable for centrally cleared swaps | 5,849,623 |
| Dividends and interest receivable | 5,616,862 |
| Other assets | 38,324 |
| Total assets | 1,190,430,041 |
| Liabilities | |
| Liquidity agreement | 418,900,000 |
| Interest payable | 2,101,482 |
| Payable to affiliates | |
| Accounting and legal services fees | 28,165 |
| Trustees’ fees | 602 |
| Other liabilities and accrued expenses | 86,660 |
| Total liabilities | 421,116,909 |
| Net assets | $769,313,132 |
| Net assets consist of | |
| Paid-in capital | $650,204,265 |
| Total distributable earnings (loss) | 119,108,867 |
| Net assets | $769,313,132 |
| Net asset value per share | |
| Based on 35,431,824 shares of beneficial interest outstanding - unlimited number of shares authorized with no par value | $21.71 |
| 11 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
STATEMENT OF OPERATIONS For the six months ended 4-30-24 (unaudited)
| Investment income | |
| Dividends | $24,707,326 |
| Interest | 9,507,011 |
| Dividends from affiliated investments | 225,130 |
| Less foreign taxes withheld | (202,871) |
| Total investment income | 34,236,596 |
| Expenses | |
| Investment management fees | 4,273,514 |
| Interest expense | 12,745,265 |
| Accounting and legal services fees | 75,348 |
| Transfer agent fees | 10,352 |
| Trustees’ fees | 22,576 |
| Custodian fees | 47,082 |
| Printing and postage | 44,385 |
| Professional fees | 65,247 |
| Stock exchange listing fees | 17,182 |
| Other | 12,513 |
| Total expenses | 17,313,464 |
| Less expense reductions | (46,307) |
| Net expenses | 17,267,157 |
| Net investment income | 16,969,439 |
| Realized and unrealized gain (loss) | |
| Net realized gain (loss) on | |
| Unaffiliated investments and foreign currency transactions | 18,155,867 |
| Affiliated investments | (2,670) |
| Swap contracts | 3,733,077 |
| 21,886,274 | |
| Change in net unrealized appreciation (depreciation) of | |
| Unaffiliated investments | 85,620,619 |
| Affiliated investments | (932) |
| Swap contracts | 223,529 |
| 85,843,216 | |
| Net realized and unrealized gain | 107,729,490 |
| Increase in net assets from operations | $124,698,929 |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 12 |
STATEMENTS OF CHANGES IN NET
ASSETS
| Six months ended 4-30-24 (unaudited) | Year ended 10-31-23 | |
| Increase (decrease) in net assets | ||
| From operations | ||
| Net investment income | $16,969,439 | $27,597,136 |
| Net realized gain | 21,886,274 | 25,595,477 |
| Change in net unrealized appreciation (depreciation) | 85,843,216 | (123,878,607) |
| Increase (decrease) in net assets resulting from operations | 124,698,929 | (70,685,994) |
| Distributions to shareholders | ||
| From earnings | (29,337,550) | (49,262,018) |
| From tax return of capital | — | (10,372,251) |
| Total distributions | (29,337,550) | (59,634,269) |
| Fund share transactions | ||
| Issued pursuant to Dividend Reinvestment Plan | — | 209,933 |
| Total increase (decrease) | 95,361,379 | (130,110,330) |
| Net assets | ||
| Beginning of period | 673,951,753 | 804,062,083 |
| End of period | $769,313,132 | $673,951,753 |
| Share activity | ||
| Shares outstanding | ||
| Beginning of period | 35,431,824 | 35,422,882 |
| Issued pursuant to Dividend Reinvestment Plan | — | 8,942 |
| End of period | 35,431,824 | 35,431,824 |
| 13 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
STATEMENT OF CASH
FLOWS For the six months ended 4-30-24 (unaudited)
| Cash flows from operating activities | |
| Net increase in net assets from operations | $124,698,929 |
| Adjustments to reconcile net increase in net assets from operations to net cash provided by operating activities: | |
| Long-term investments purchased | (117,848,171) |
| Long-term investments sold | 130,315,236 |
| Net purchases and sales of short-term investments | (3,192,688) |
| Net amortization of premium (discount) | 163,103 |
| (Increase) Decrease in assets: | |
| Receivable for centrally cleared swaps | 3,474 |
| Dividends and interest receivable | (886,546) |
| Other assets | (15,654) |
| Increase (Decrease) in liabilities: | |
| Payable for investments purchased | (336,739) |
| Interest payable | (70,049) |
| Payable to affiliates | (22,414) |
| Other liabilities and accrued expenses | (35,741) |
| Net change in unrealized (appreciation) depreciation on: | |
| Investments | (85,619,687) |
| Net realized (gain) loss on: | |
| Investments | (17,815,503) |
| Net cash provided by operating activities | $29,337,550 |
| Cash flows provided by (used in) financing activities | |
| Distributions to shareholders | $(29,337,550) |
| Net cash used in financing activities | $(29,337,550) |
| Cash at beginning of period | — |
| Cash at end of period | — |
| Supplemental disclosure of cash flow information: | |
| Cash paid for interest | $(12,815,314) |
| SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 14 |
Financial highlights
| Period ended | 4-30-241 | 10-31-23 | 10-31-22 | 10-31-21 | 10-31-20 | 10-31-19 |
| Per share operating performance | ||||||
| Net asset value, beginning of period | $19.02 | $22.70 | $25.11 | $21.65 | $26.84 | $24.34 |
| Net investment income2 | 0.48 | 0.78 | 1.10 | 1.24 | 1.27 | 1.17 |
| Net realized and unrealized gain (loss) on investments | 3.04 | (2.78) | (1.85) | 3.90 | (4.80) | 3.39 |
| Total from investment operations | 3.52 | (2.00) | (0.75) | 5.14 | (3.53) | 4.56 |
| Less distributions | ||||||
| From net investment income | (0.83) | (1.36) | (1.66) | (1.66) | (1.66) | (1.65) |
| From net realized gain | — | (0.03) | — | (0.02) | — | (0.41) |
| From tax return of capital | — | (0.29) | — | — | — | — |
| Total distributions | (0.83) | (1.68) | (1.66) | (1.68) | (1.66) | (2.06) |
| Net asset value, end of period | $21.71 | $19.02 | $22.70 | $25.11 | $21.65 | $26.84 |
| Per share market value, end of period | $19.52 | $16.48 | $22.76 | $24.53 | $18.99 | $27.44 |
| Total return at net asset value (%)3,4 | 19.145 | (9.16) | (3.21) | 24.68 | (12.71) | 20.34 |
| Total return at market value (%)3 | 23.635 | (21.50) | (0.66) | 38.86 | (25.11) | 33.87 |
| Ratios and supplemental data | ||||||
| Net assets, end of period (in millions) | $769 | $674 | $804 | $889 | $767 | $950 |
| Ratios (as a percentage of average net assets): | ||||||
| Expenses before reductions | 4.696 | 4.25 | 2.05 | 1.56 | 1.97 | 2.62 |
| Expenses including reductions7 | 4.686 | 4.24 | 2.04 | 1.55 | 1.96 | 2.61 |
| Net investment income | 4.606 | 3.57 | 4.41 | 5.13 | 5.53 | 4.63 |
| Portfolio turnover (%) | 10 | 20 | 11 | 15 | 20 | 13 |
| Senior securities | ||||||
| Total debt outstanding end of period (in millions) | $419 | $419 | $419 | $419 | $419 | $428 |
| Asset coverage per $1,000 of debt8 | $2,837 | $2,609 | $2,919 | $3,122 | $2,830 | $3,220 |
| 1 | Six months ended 4-30-24. Unaudited. |
| 2 | Based on average daily shares outstanding. |
| 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 | Not annualized. |
| 6 | Annualized. |
| 7 | Expenses including reductions excluding interest expense were 1.22% (annualized), 1.21%, 1.14%, 1.19%, 1.22% and 1.18% for the periods ended 4-30-24, 10-31-23, 10-31-22, 10-31-21, 10-31-20 and 10-31-19, respectively. |
| 8 | 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. |
| 15 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Notes to financial statements (unaudited)
Note 1—Organization
John Hancock Tax-Advantaged Dividend
Income Fund (the fund) is a closed-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the 1940 Act).
Note 2—Significant accounting policies
The financial statements have been
prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP), which require management to make certain estimates and assumptions as of the date of the financial
statements. Actual results could differ from those estimates and those differences could be significant. The fund qualifies as an investment company under Topic 946 of Accounting Standards Codification of US GAAP.
Events or transactions occurring
after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting
policies of the fund:
Security valuation. Investments are stated at value as of the scheduled close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. In case of emergency or other
disruption resulting in the NYSE not opening for trading or the NYSE closing at a time other than the regularly scheduled close, the net asset value (NAV) may be determined as of the regularly scheduled close of the
NYSE pursuant to the Valuation Policies and Procedures of the Advisor, John Hancock Investment Management LLC.
In order to value the securities,
the fund uses the following valuation techniques: Equity securities, including exchange-traded or closed-end funds, are typically valued at the last sale price or official closing price on the exchange or principal
market where the security trades. In the event there were no sales during the day or closing prices are not available, the securities are valued using the last available bid price. Investments by the fund in
open-end mutual funds, including John Hancock Collateral Trust (JHCT), are valued at their respective NAVs each business day. Debt obligations are typically valued based on evaluated prices provided by an
independent pricing vendor. Independent pricing vendors utilize matrix pricing, which takes into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate,
maturity, type of issue, trading characteristics and other market data, as well as broker supplied prices. Swaps are generally valued using evaluated prices obtained from an independent pricing vendor. Foreign
securities and currencies are valued in U.S. dollars based on foreign currency exchange rates supplied by an independent pricing vendor.
In certain instances, the Pricing
Committee of the Advisor may determine to value equity securities using prices obtained from another exchange or market if trading on the exchange or market on which prices are typically obtained did not open for
trading as scheduled, or if trading closed earlier than scheduled, and trading occurred as normal on another exchange or market.
Other portfolio securities and
assets, for which reliable market quotations are not readily available, are valued at fair value as determined in good faith by the Pricing Committee following procedures established by the Advisor and adopted by the
Board of Trustees. The frequency with which these fair valuation procedures are used cannot be predicted and fair value of securities may differ significantly from the value that would have been used had a ready
market for such securities existed.
The fund uses a three tier hierarchy
to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities,
including registered investment companies. Level 2 includes securities valued using other significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment
speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities
valued using significant unobservable inputs when market prices are not readily available or reliable, including the Advisor’s assumptions in determining the fair value of investments. Factors used in
determining value may include
| SEMIANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 16 |
market or issuer specific events or trends, changes
in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques
and related inputs may result in transfers into or out of an assigned level within the disclosure hierarchy.
The following is a summary of the
values by input classification of the fund’s investments as of April 30, 2024, by major security category or type:
| Total value at 4-30-24 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
| Investments in securities: | ||||
| Assets | ||||
| Common stocks | $684,952,244 | $684,952,244 | — | — |
| Preferred securities | 204,503,617 | 204,503,617 | — | — |
| Corporate bonds | 285,207,227 | — | $285,207,227 | — |
| Short-term investments | 4,262,144 | 4,262,144 | — | — |
| Total investments in securities | $1,178,925,232 | $893,718,005 | $285,207,227 | — |
| Derivatives: | ||||
| Assets | ||||
| Swap contracts | $7,367,659 | — | $7,367,659 | — |
The fund holds liabilities for which
the fair value approximates the carrying amount for financial statement purposes. As of April 30, 2024, the liability for the fund’s Liquidity agreement on the Statement of assets and liabilities is categorized
as Level 2 within the disclosure hierarchy.
Real estate investment trusts. The fund may invest in real estate investment trusts (REITs). Distributions from REITs may be recorded as income and subsequently characterized by the REIT at the end of their fiscal year
as a reduction of cost of investments and/or as a realized gain. As a result, the fund will estimate the components of distributions from these securities. Such estimates are revised when the actual components of the
distributions are known.
Security transactions and related
investment income. Investment security transactions are accounted for on a trade date plus one basis for daily NAV calculations. However, for financial reporting purposes, investment transactions are
reported on trade date. Interest income is accrued as earned. Interest income includes coupon interest and amortization/accretion of premiums/discounts on debt securities. Debt obligations may be placed in a
non-accrual status and related interest income may be reduced by stopping current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful. Dividend income
is recorded on ex-date, except for dividends of certain foreign securities where the dividend may not be known until after the ex-date. In those cases, dividend income, net of withholding taxes, is recorded when the
fund becomes aware of the dividends. Non-cash dividends, if any, are recorded at the fair market value of the securities received. Distributions received on securities that represent a tax return of capital and/or
capital gain, if any, are recorded as a reduction of cost of investments and/or as a realized gain, if amounts are estimable. Gains and losses on securities sold are determined on the basis of identified cost and may
include proceeds from litigation.
Foreign investing. Assets, including investments, and liabilities denominated in foreign currencies are translated into U.S. dollar values each day at the prevailing exchange rate. Purchases and sales of
securities, income and expenses are translated into U.S. dollars at the prevailing exchange rate on the date of the transaction. The effect of changes in foreign currency exchange rates on the value of securities is
reflected as a component of the realized and unrealized gains (losses) on investments. Foreign investments are subject to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar
value of securities denominated in that currency.
| 17 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | SEMIANNUAL REPORT |
Funds that invest internationally
generally carry more risk than funds that invest strictly in U.S. securities. Risks can result from differences in economic and political conditions, regulations, market practices (including higher transaction costs),
accounting standards and other factors.
Foreign taxes. The fund may be subject to withholding tax on income, capital gains or repatriations imposed by certain countries, a portion of which may be recoverable. Foreign taxes are accrued based
upon the fund’s understanding of the tax rules and rates that exist in the foreign markets in which it invests. Taxes are accrued based on gains realized by the fund as a result of certain foreign security
sales. In certain circumstances, estimated taxes are accrued based on unrealized appreciation of such securities. Investment income is recorded net of foreign withholding taxes.
Overdrafts. Pursuant to the custodian agreement, the fund’s custodian may, in its discretion, advance funds to the fund to make properly authorized payments. When such payments result in an
overdraft, the fund is obligated to repay the custodian for any overdraft, including any costs or expenses associated with the overdraft. The custodian may have a lien, security interest or security entitlement in any
fund property that is not otherwise segregated or pledged, to the maximum extent permitted by law, to the extent of any overdraft.
Expenses. Within the John Hancock group of funds complex, expenses that are directly attributable to an individual fund are allocated to such fund. Expenses that are not readily attributable to
a specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund’s relative net assets. Expense estimates are
accrued in the period to which they relate and adjustments are made when actual amounts are known.
Statement of cash flows. A Statement of cash flows is presented when a fund has a significant amount of borrowing during the period, based on the average total borrowing in relation to total assets, or when a
certain percentage of the fund’s investments is classified as Level 3 in the fair value hierarchy. Information on financial transactions that have been settled through the receipt and disbursement of cash is
presented in the Statement of cash flows. The cash amount shown in the Statement of cash flows is the amount included in the fund’s Statement of assets and liabilities and represents the cash on hand at the
fund’s custodian and does not include any short-term investments or collateral on derivative contracts, if any.
Federal income taxes. The fund intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income
tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.
As of October 31, 2023, the
fund had no uncertain tax positions that would require financial statement recognition, derecognition or disclosure. The fund’s federal tax returns are subject to examination by the Internal Revenue Service for
a period of three years.
Managed distribution plan. The fund has adopted a managed distribution plan on September 19, 2016. Under the current Plan, the fund makes monthly distributions of an amount equal to $0.1380 per share, which
will be paid monthly until further notice.
Distributions under the Plan may
consist of net investment income, net realized capital gains and, to the extent necessary, return of capital. Return of capital distributions may be necessary when the fund’s net investment income and net
capital gains are insufficient to meet the minimum distribution. In addition, the fund may also make additional distributions for the purpose of not incurring federal income and excise taxes.
The Board of Trustees may terminate
or reduce the amount paid under the Plan at any time. The termination or reduction may have an adverse effect on the market price of the fund’s shares.
Distribution of income and
gains. Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The fund generally declares and pays dividends monthly under the
managed distribution plan described above. Capital gain distributions, if any, are typically distributed annually.
| SEMIANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 18 |
Such distributions, on a tax basis,
are determined in conformity with income tax regulations, which may differ from US GAAP. Distributions in excess of tax basis earnings and profits, if any, are reported in the fund’s financial statements as a
return of capital. The final determination of tax characteristics of the fund’s distribution will occur at the end of the year and will subsequently be reported to shareholders.
Capital accounts within the
financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any, will reverse in a subsequent
period. Book-tax differences are primarily attributable to wash sale loss deferrals, derivative transactions, amortization and accretion on debt securities, contingent payment debt instruments and dividend
redesignation.
Note 3—Derivative instruments
The fund may invest in derivatives
in order to meet its investment objective. Derivatives include a variety of different instruments that may be traded in the over-the-counter (OTC) market, on a regulated exchange or through a clearing facility. The
risks in using derivatives vary depending upon the structure of the instruments, including the use of leverage, optionality, the liquidity or lack of liquidity of the contract, the creditworthiness of the counterparty
or clearing organization and the volatility of the position. Some derivatives involve risks that are potentially greater than the risks associated with investing directly in the referenced securities or other
referenced underlying instrument. Specifically, the fund is exposed to the risk that the counterparty to an OTC derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor
its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction.
Certain derivatives are traded or
cleared on an exchange or central clearinghouse. Exchange-traded or centrally-cleared transactions generally present less counterparty risk to a fund than OTC transactions. The exchange or clearinghouse stands between
the fund and the broker to the contract and therefore, credit risk is generally limited to the failure of the exchange or clearinghouse and the clearing member.
Centrally-cleared swap contracts are
subject to clearinghouse rules, including initial and variation margin requirements, daily settlement of obligations and the clearinghouse guarantee of payments to the broker. There is, however, still counterparty
risk due to the potential insolvency of the broker with respect to any margin held in the brokers’ customer accounts. While clearing members are required to segregate customer assets from their own assets, in
the event of insolvency, there may be a shortfall in the amount of margin held by the broker for its clients. Collateral or margin requirements for centrally-cleared derivatives are set by the broker or applicable
clearinghouse. Margin for centrally-cleared transactions is detailed in the Statement of assets and liabilities as Receivable/Payable for centrally-cleared swaps. Securities pledged by the fund for centrally-cleared
transactions, if any, are identified in the Fund’s investments.
Swaps. Swap agreements are agreements between the fund and a counterparty to exchange cash flows, assets, foreign currencies or market-linked returns at specified intervals. Swap agreements are
privately negotiated in the OTC market (OTC swaps) or may be executed on a registered commodities exchange (centrally cleared swaps). Swaps are marked-to-market daily and the change in value is recorded as a component
of unrealized appreciation/depreciation of swap contracts. The value of the swap will typically impose collateral posting obligations on the party that is considered out-of-the-money on the swap.
Upfront payments made/received by
the fund, if any, are amortized/accreted for financial reporting purposes, with the unamortized/unaccreted portion included in the Statement of assets and liabilities. A termination payment by the counterparty or the
fund is recorded as realized gain or loss, as well as the net periodic payments received or paid by the fund.
Entering into swap agreements
involves, to varying degrees, elements of credit, market and documentation risk that may provide outcomes that produce losses in excess of the amounts recognized on the Statement of assets and liabilities. Such risks
involve the possibility that there will be no liquid market for the swap, or that a counterparty may default on its obligation or delay payment under the swap terms. The counterparty may disagree
| 19 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | SEMIANNUAL REPORT |
or contest the terms of the swap. In addition to
interest rate risk, market risks may also impact the swap. The fund may also suffer losses if it is unable to terminate or assign outstanding swaps or reduce its exposure through offsetting transactions.
Interest rate swaps. Interest rate swaps represent an agreement between the fund and a counterparty to exchange cash flows based on the difference between two interest rates applied to a notional amount. The
payment flows are usually netted against each other, with the difference being paid by one party to the other. The fund settles accrued net interest receivable or payable under the swap contracts at specified, future
intervals.
During the six months ended April
30, 2024, the fund used interest rate swap contracts to manage against changes in the liquidity agreement interest rates. The fund held interest rate swaps with total USD notional amounts ranging from $314.5 million
to $366.7 million, as measured at each quarter end.
Fair value of derivative instruments
by risk category
The table below summarizes the fair
value of derivatives held by the fund at April 30, 2024 by risk category:
| Risk | Statement of assets and liabilities location | Financial instruments location | Assets derivatives fair value | Liabilities derivatives fair value |
| Interest rate | Swap contracts, at value1 | Interest rate swaps | $7,367,659 | — |
| 1 | Reflects cumulative value of swap contracts. Receivable/payable for centrally cleared swaps, which includes value and margin, are shown separately on the Statement of assets and liabilities. |
Effect of derivative instruments on
the Statement of operations
The table below summarizes the net
realized gain (loss) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the six months ended April 30, 2024:
| Statement of operations location - Net realized gain (loss) on: | |
| Risk | Swap contracts |
| Interest rate | $3,733,077 |
The table below summarizes the net
change in unrealized appreciation (depreciation) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the six months ended April 30,
2024:
| Statement of operations location - Change in net unrealized appreciation (depreciation) of: | |
| Risk | Swap contracts |
| Interest rate | $223,529 |
Note 4—Guarantees and indemnifications
Under the fund’s
organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund
enters into contracts with service providers that contain general indemnification clauses. The fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made
against the fund that have not yet occurred. The risk of material loss from such claims is considered remote.
| SEMIANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 20 |
Note 5—Fees and transactions with affiliates
John Hancock Investment Management
LLC (the Advisor) serves as investment advisor for the fund. The Advisor is an indirect, principally owned subsidiary of John Hancock Life Insurance Company (U.S.A.), which in turn is a subsidiary of Manulife
Financial Corporation (MFC).
Management fee. The fund has an investment management agreement with the Advisor under which the fund pays a daily management fee to the Advisor equivalent on an annual basis to 0.74% of the
fund’s average daily managed assets (net assets plus borrowings under the Liquidity Agreement (LA)) (see Note 8). The Advisor has a subadvisory agreement with Manulife Investment Management (US) LLC, an
indirectly owned subsidiary of MFC and an affiliate of the Advisor. The fund is not responsible for payment of the subadvisory fees.
The Advisor has contractually agreed
to waive a portion of its management fee and/or reimburse expenses for certain funds of the John Hancock group of funds complex, including the fund (the participating portfolios). This waiver is based upon aggregate
managed assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund. During
the six months ended April 30, 2024, this waiver amounted to 0.01% of the fund’s average daily net assets, on an annualized basis. This agreement expires on July 31, 2025, unless renewed by mutual agreement of
the fund and the Advisor based upon a determination that this is appropriate under the circumstances at that time.
The expense reductions described
above amounted to $46,307 for the six months ended April 30, 2024.
Expenses waived or reimbursed in the
current fiscal period are not subject to recapture in future fiscal periods.
The investment management fees,
including the impact of the waivers and reimbursements as described above, incurred for the six months ended April 30, 2024, were equivalent to a net annual effective rate of 0.73% of the fund’s average daily
managed assets.
Accounting and legal services. Pursuant to a service agreement, the fund reimburses the Advisor for all expenses associated with providing the administrative, financial, legal, compliance, accounting and recordkeeping
services to the fund, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. These accounting and legal services fees incurred, for the six months
ended April 30, 2024, amounted to an annual rate of 0.01% of the fund’s average daily managed net assets.
Trustee expenses. The fund compensates each Trustee who is not an employee of the Advisor or its affiliates. These Trustees receive from the fund and the other John Hancock closed-end funds an annual
retainer. In addition, Trustee out-of-pocket expenses are allocated to each fund based on its net assets relative to other funds within the John Hancock group of funds complex.
Note 6—Fund share transactions
On December 2007, the Board of
Trustees approved a share repurchase plan, which is subsequently reviewed by the Board of Trustees each year in December. Under the current share repurchase plan, the fund may purchase in the open market, between
January 1, 2024 and December 31, 2024, up to 10% of its outstanding common shares as of December 31, 2023. The share repurchase plan will remain in effect between January 1, 2024 and December 31, 2024.
During the six months ended April
30, 2024 and the year ended October 31, 2023, the fund had no activities under the repurchase program. Shares repurchased and corresponding dollar amounts, if any, are included on the Statements of changes in net
assets. The anti-dilutive impacts of these share repurchases, if any, are included on the Financial highlights.
| 21 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | SEMIANNUAL REPORT |
Note 7—Leverage risk
The fund utilizes the LA to increase
its assets available for investment. When the fund leverages its assets, shareholders bear the expenses associated with the LA and have potential to benefit or be disadvantaged from the use of leverage. The
Advisor’s fee is also increased in dollar terms from the use of leverage. Consequently, the fund and the Advisor may have differing interests in determining whether to leverage the fund’s assets. Leverage
creates risks that may adversely affect the return for the holders of shares, including:
| • | 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. |
To the extent the income or capital
appreciation derived from securities purchased with funds received from leverage exceeds the cost of leverage, the fund’s return will be greater than if leverage had not been used; conversely, returns would be
lower if the cost of the leverage exceeds the income or capital appreciation derived. The use of securities lending to obtain leverage in the fund’s investments may subject the fund to greater risk of loss than
would reinvestment of collateral in short term highly rated investments.
In addition to the risks created by
the fund’s use of leverage, the fund is subject to the risk that it would be unable to timely, or at all, obtain replacement financing if the LA is terminated. Were this to happen, the fund would be required to
de-leverage, selling securities at a potentially inopportune time and incurring tax consequences. Further, the fund’s ability to generate income from the use of leverage would be adversely affected.
Note 8—Liquidity Agreement
The fund has entered into a LA with
State Street Bank and Trust Company (SSB) that allows it to borrow or otherwise access up to $427.9 million (maximum facility amount) through a line of credit, securities lending and reverse repurchase agreements. The
amounts outstanding at April 30, 2024 are shown in the Statement of assets and liabilities as the Liquidity agreement.
The fund pledges its assets as
collateral to secure obligations under the LA. The fund retains the risks and rewards of the ownership of assets pledged to secure obligations under the LA and makes these assets available for securities lending and
reverse repurchase transactions with SSB acting as the fund’s authorized agent for these transactions. All transactions initiated through SSB are required to be secured with cash collateral received from the
securities borrower (the Borrower) or cash is received from the reverse repurchase agreement (Reverse Repo) counterparties. Securities lending transactions will be secured with cash collateral in amounts at least
equal to 100% of the market value of the securities utilized in these transactions. Cash received by SSB from securities lending or Reverse Repo transactions is credited against the amounts borrowed under the line of
credit. As of April 30, 2024, the LA balance of $418,900,000 was comprised of $146,096,944 from the line of credit and $272,803,056 cash received by SSB from securities lending or Reverse Repo transactions.
Upon return of securities by the
Borrower or Reverse Repo counterparty, SSB will return the cash collateral to the Borrower or proceeds from the Reverse Repo, as applicable, which will eliminate the credit against the line of credit and will cause
the drawdowns under the line of credit to increase by the amounts returned. Income earned on the loaned securities is retained by SSB, and any interest due on the reverse repurchase agreements is paid by SSB.
SSB has indemnified the fund for
certain losses that may arise if the Borrower or a Reverse Repo Counterparty fails to return securities when due. With respect to securities lending transactions, upon a default of the securities borrower, SSB uses
the collateral received from the Borrower to purchase replacement securities of the same issue, type, class and series. If the value of the collateral is less than the purchase cost of replacement securities, SSB
is
| SEMIANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 22 |
responsible for satisfying the shortfall but only
to the extent that the shortfall is not due to any of the fund’s losses on the reinvested cash collateral. Although the risk of the loss of the securities is mitigated by receiving collateral from the Borrower
or proceeds from the Reverse Repo counterparty and through SSB indemnification, the fund could experience a delay in recovering securities or could experience a lower than expected return if the Borrower or Reverse
Repo counterparty fails to return the securities on a timely basis.
Interest charged is at the rate of
overnight bank funding rate (OBFR) plus 0.700% and is payable monthly on the aggregate balance of the drawdowns outstanding under the LA. As of April 30, 2024, the fund had an aggregate balance of $418,900,000 at an
interest rate of 6.02%, which is reflected in the Liquidity agreement on the Statement of assets and liabilities. During the six months ended April 30, 2024, the average balance of the LA and the effective average
annual interest rate were $418,900,000 and 6.12%, respectively.
The fund may terminate the LA with
60 days’ notice. If certain asset coverage and collateral requirements, or other covenants are not met, the LA could be deemed in default and result in termination. Absent a default or facility termination
event, SSB is required to provide the fund with 360 days’ notice prior to terminating the LA.
Note 9—LIBOR Discontinuation Risk
Certain debt securities, derivatives
and other financial instruments have traditionally utilized LIBOR as the reference or benchmark rate for interest rate calculations. However, following allegations of manipulation and concerns regarding liquidity, the
U.K. Financial Conduct Authority (UK FCA) announced that LIBOR would be discontinued as of June 30, 2023. The UK FCA elected to require the ICE Benchmark Administration Limited, the administrator of LIBOR, to continue
publishing a subset of LIBOR settings on a “synthetic” basis. The synthetic publication of the one-, three and six-month U.S. dollar LIBOR will continue until September 30, 2024.
Although the transition process away
from LIBOR has become increasingly well-defined in advance of the discontinuation dates, the impact on certain debt securities, derivatives and other financial instruments remains uncertain. Market participants have
adopted alternative rates such as Secured Overnight Financing Rate (SOFR) or otherwise amended financial instruments referencing LIBOR to include fallback provisions and other measures that contemplated the
discontinuation of LIBOR or other similar market disruption events, but neither the effect of the transition process nor the viability of such measures is known. To facilitate the transition of legacy derivatives
contracts referencing LIBOR, the International Swaps and Derivatives Association, Inc. launched a protocol to incorporate fallback provisions. However, there are obstacles to converting certain longer term securities
and transactions to a new benchmark or benchmarks and the effectiveness of one alternative reference rate versus multiple alternative reference rates in new or existing financial instruments and products has not been
determined. Certain proposed replacement rates to LIBOR, such as SOFR, which is a broad measure of secured overnight U.S. Treasury repo rates, are materially different from LIBOR, and changes in the applicable spread
for financial instruments transitioning away from LIBOR will need to be made to accommodate the differences.
The utilization of an alternative
reference rate, or the transition process to an alternative reference rate, may adversely affect the fund’s performance.
Note 10—Purchase and sale of securities
Purchases and sales of securities,
other than short-term investments, amounted to $117,848,171 and $130,315,236, respectively, for the six months ended April 30, 2024.
Note 11—Industry or sector risk
The fund may invest a large
percentage of its assets in one or more particular industries or sectors of the economy. If a large percentage of the fund’s assets are economically tied to a single or small number of industries or sectors of
the economy, the fund will be less diversified than a more broadly diversified fund, and it may cause the fund to underperform if that industry or sector underperforms. In addition, focusing on a particular industry
or sector may make the fund’s NAV more volatile. Further, a fund that invests in particular industries or sectors is particularly susceptible to the impact of market, economic, regulatory and other factors
affecting those industries or sectors.
| 23 | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | SEMIANNUAL REPORT |
Note 12—Investment in affiliated underlying funds
The fund may invest in affiliated
underlying funds that are managed by the Advisor and its affiliates. Information regarding the fund’s fiscal year to date purchases and sales of the affiliated underlying funds as well as income and capital
gains earned by the fund, if any, is as follows:
| Dividends and distributions | |||||||||
| Affiliate | Ending share amount | Beginning value | Cost of purchases | Proceeds from shares sold | Realized gain (loss) | Change in unrealized appreciation (depreciation) | Income distributions received | Capital gain distributions received | Ending value |
| John Hancock Collateral Trust | 426,351 | $1,073,058 | $129,063,675 | $(125,870,987) | $(2,670) | $(932) | $225,130 | — | $4,262,144 |
Note 13—New accounting pronouncement
In March 2020, the Financial
Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU), ASU 2020-04, Reference Rate Reform (Topic 848), which provides optional, temporary relief with respect to the financial reporting of
contracts subject to certain types of modifications due to the discontinuation of the LIBOR and other IBOR-based reference rates as of the end of 2021. In January 2021 and December 2022, the FASB issued ASU No.
2021-01 and ASU No. 2022-06, with further amendments to Topic 848. The temporary relief provided by ASU 2020-04 is effective for certain reference rate-related contract modifications that occur during the period March
12, 2020 through December 31, 2024. Management expects that the adoption of the guidance will not have a material impact to the financial statements.
| SEMIANNUAL REPORT | JOHN HANCOCK Tax-Advantaged Dividend Income Fund | 24 |
Investment objective, principal
investment strategies, and principal risks
Unaudited
Investment Objective
The fund’s investment
objective is to provide a high level of after-tax total return from dividend income and capital appreciation.
Principal Investment Strategies
Under normal circumstances, the fund
will invest at least 80% of its assets (net assets plus borrowing for investment purposes) in dividend-paying common and preferred securities that the Advisor believes at the time of acquisition are eligible to pay
tax-advantaged dividends. This is a non-fundamental policy and may be changed by the Board of Trustees of the fund provided that shareholders are provided with at least 60 days prior written notice of any change as
required by the rules under the 1940 Act. 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, provided certain holding period and other requirements are satisfied by the shareholders. There
can be no assurance as to the portion of the fund’s dividends that will be tax-advantaged.
The fund may invest the remainder of
its assets in equity securities and in investment grade and below investment grade fixed income securities, including debt instruments and real estate investment trusts, that
generate income taxed at ordinary income rather than long-term capital gain rates. For any year, so long as the fund’s ordinary income,
tax-exempt income (if any), and net realized short-term capital gains in excess of net long-term capital losses are fully offset by expenses of the fund, all of the fund’s
income distributions would be characterized as tax-advantaged dividends. Although the fund intends to invest at least 80% of its assets in equity
securities that pay tax-advantaged dividends and to satisfy the holding period and other requirements, a portion of the
fund’s income distributions may be taxable at higher federal income tax rates applicable to ordinary income.
The fund may invest its portfolio of
equity securities in companies of any market capitalization. In selecting securities for the fund’s portfolio, the Advisor focuses on dividend-paying common and preferred securities that produce an attractive
level of tax-advantaged income. The Advisor also considers a security’s potential for capital appreciation. The Advisor generally uses a value approach in selecting the fund’s equity investments. Using
this investment style, the Advisor seeks securities selling at what the Advisor believes are substantial discounts to their underlying values and then holds these securities until the market values reflect their
intrinsic values. The Advisor evaluates a security’s potential value, including the attractiveness of its market valuation, based on the company’s assets and prospects for earnings growth. The fund may
seek to enhance the level of dividend income it receives by engaging in dividend capture trading.
Debt securities in which the fund
may invest include: securities issued or guaranteed by the U.S. government, its agencies or instrumentalities and custodial receipts therefor; securities issued or guaranteed by a foreign government or any of its
political subdivisions, authorities, agencies or instrumentalities or by international or supranational entities; corporate debt securities including notes, bonds and debentures; certificates of deposit and
bankers’ acceptances issued or guaranteed by, or time deposits maintained at, banks (including U.S. or foreign branches of U.S. banks or U.S. or foreign branches of foreign banks) having total assets of more
than $1 billion; commercial paper; and mortgage related securities. The fund may, from time to time, invest up to 20% of its total assets in preferred stocks and other fixed income securities
rated below investment grade at the time of acquisition (that, is rated BB, Ba or lower as determined by S&P, Fitch or Moody’s) or, if unrated, determined to be of comparable credit quality by the Advisor.
The below investment grade securities in which the fund invests may be rated as low as Cc or Ca, provided that no more than 5%
of the fund’s total assets will be invested in securities rated below B at the time of investment.
| 25 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT |
The fund concentrates its
investments in securities issued by corporations in the utilities sector. The fund may invest up to 40% of its net assets in securities of corporate and government issuers located outside the United States that are
traded or denominated in U.S. dollars. The fund may also invest up to 20% of its total assets in illiquid securities.
The fund may also invest in
derivatives such as futures contracts, options, options on futures contracts, equity swaps, and reverse repurchase agreements. In addition, the fund may invest in repurchase agreements. The fund may sell a security
short if it owns at least an equal amount of the security sold short or another security convertible or exchangeable for an equal amount of the security sold short without payment of further compensation (a short sale
against-the-box). The fund may invest in the securities of other investment companies to the extent that such investments are consistent with the
fund’s investment objective and principal investment strategies and permissible under the 1940 Act.
The fund may engage in portfolio
trading, may issue preferred shares, borrow or issue short-term debt securities, and enter into reverse repurchase agreements to obtain investment leverage either alone and/or in combination with other forms of
investment leverage or for temporary purposes. The fund utilizes a liquidity agreement to increase its assets available for investments, and may also seek to obtain additional income or portfolio leverage by making
secured loans of its portfolio securities with a value of up to 33 1/3% of its total assets.
The Advisor may also take into
consideration environmental, social, and/or governance (ESG) factors, alongside other relevant factors, as part of its investment selection process. The ESG characteristics utilized in the fund’s investment
process may change over time and one or more characteristics may not be relevant with respect to all issuers that are eligible fund investments.
Principal 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.
The fund’s main risks are
listed below in alphabetical order, not in order of importance.
Changing distribution level &
return of capital risk. There is no guarantee prior distribution levels will be maintained, and distributions may include a substantial tax return of capital. A return of capital is the return of all or a portion
of a shareholder’s investment in the fund. For the fiscal year ended October 31, 2023, the fund’s aggregate distributions included a tax return of capital of $0.29 per share, or 17.39% of aggregate
distributions, which may increase the potential tax gain or decrease the potential tax loss of a subsequent sale of shares of the fund.
Concentration risk. Because the fund may focus on one or more industries or sectors of the economy, its performance depends in large part on the performance of those industries or sectors. As a result, the
value of an investment may fluctuate more widely since it is more susceptible to market, economic, political, regulatory, and other conditions and risks affecting those industries or sectors than a fund that invests
more broadly across industries and sectors.
Credit and counterparty risk. The issuer or guarantor of a fixed-income security, the counterparty to an over-the-counter derivatives contract, or a borrower of fund securities may not make timely payments or otherwise
honor its obligations. U.S. government securities are subject to varying degrees of credit risk depending upon the nature of their support. A downgrade or default affecting any of the fund’s securities could
affect the fund’s performance.
| SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 26 |
Cybersecurity and operational
risk. Cybersecurity breaches 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 a fund’s securities may negatively impact performance. Operational risk may arise from human error, error by third parties,
communication errors, or technology failures, among other causes.
Economic and market events risk. Events in certain sectors historically have resulted, and may in the future result, in an unusually high degree of volatility in the financial markets, both domestic and foreign. These
events have included, but are not limited to: bankruptcies, corporate restructurings, and other similar events; bank failures; governmental efforts to limit short selling and high frequency trading; measures to
address U.S. federal and state budget deficits; social, political, and economic instability in Europe; economic stimulus by the Japanese central bank; dramatic changes in energy prices and currency exchange rates; and
China’s economic slowdown. Interconnected global economies and financial markets increase the possibility that conditions in one country or region might adversely impact issuers in a different country or region.
Both domestic and foreign equity markets have experienced increased volatility and turmoil, with issuers that have exposure to the real estate, mortgage, and credit markets particularly affected. Financial
institutions could suffer losses as interest rates rise or economic conditions deteriorate.
In addition, relatively high market
volatility and reduced liquidity in credit and fixed-income markets may adversely affect many issuers worldwide. Actions taken by the U.S. Federal Reserve (Fed) or foreign central banks to stimulate or stabilize
economic growth, such as interventions in currency markets, could cause high volatility in the equity and fixed-income markets. Reduced liquidity may result in less money being available to purchase raw
materials, goods, and services from emerging markets, which may, in turn, bring down the prices of these economic staples. It may also result in emerging-market issuers having more difficulty obtaining financing,
which may, in turn, cause a decline in their securities prices.
Beginning in March 2022, the Fed
began increasing interest rates and has signaled the potential for further increases. As a result, risks associated with rising interest rates are currently heightened. It is difficult to accurately predict the pace
at which the Fed will increase interest rates any further, or the timing, frequency or magnitude of any such increases, and the evaluation of macro-economic and other conditions could cause a change in approach in the
future. Any such increases generally will cause market interest rates to rise and could cause the value of the fund’s investments, and the fund’s net asset value (NAV), to decline, potentially suddenly and
significantly.
In addition, as the Fed increases
the target Fed funds rate, any such rate increases, among other factors, could cause markets to experience continuing high volatility. A significant increase in interest rates may cause a decline in the market for
equity securities. These events and the possible resulting market volatility may have an adverse effect on the fund.
Political turmoil within the United
States and abroad may also impact the fund. Although the U.S. government has honored its credit obligations, it remains possible that the United States could default on its obligations. While it is impossible to
predict the consequences of such an unprecedented event, it is likely that a default by the United States would be highly disruptive to the U.S. and global securities markets and could significantly impair the value
of the fund’s investments. Similarly, political events within the United States at times have resulted, and may in the future result, in a shutdown of government services, which could negatively affect the U.S.
economy, decrease the value of many fund investments, and increase uncertainty in or impair the operation of the U.S. or other securities markets. In recent years, the U.S. renegotiated many of its global trade
relationships and imposed or threatened to impose significant import tariffs. These actions could lead to price volatility and overall declines in U.S. and global investment markets.
Uncertainties surrounding the
sovereign debt of a number of European Union (EU) countries and the viability of the EU have disrupted and may in the future disrupt markets in the United States and around the world. If one or more countries leave
the EU or the EU dissolves, the global securities markets likely will be significantly disrupted. On January 31, 2020, the United Kingdom (UK) left the EU, commonly referred to as “Brexit,” the UK ceased
to be
| 27 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT |
a member of the EU, and the UK and EU entered into
a Trade and Cooperation Agreement. While the full impact of Brexit is unknown, Brexit has already resulted in volatility in European and global markets. There remains significant market uncertainty regarding
Brexit’s ramifications, and the range and potential implications of possible political, regulatory, economic, and market outcomes are difficult to predict.
A widespread health crisis such as a
global pandemic could cause substantial market volatility, exchange trading suspensions and closures, which may lead to less liquidity in certain instruments, industries, sectors or the markets generally, and may
ultimately affect fund performance. For example, the coronavirus (COVID-19) pandemic has resulted and may continue to result in significant disruptions to global business activity and market volatility due to
disruptions in market access, resource availability, facilities operations, imposition of tariffs, export controls and supply chain disruption, among others. While many countries have lifted some or all restrictions
related to the coronavirus (COVID-19) and the United States ended the public health emergency and national emergency declarations relating to the coronavirus (COVID-19) pandemic on May 11, 2023, the continued impact
of coronavirus (COVID-19) and related variants is uncertain. The impact of a health crisis and other epidemics and pandemics that may arise in the future, could affect the global economy in ways that cannot
necessarily be foreseen at the present time. A health crisis may exacerbate other pre-existing political, social and economic risks. Any such impact could adversely affect the fund’s performance, resulting in
losses to your investment.
Political and military events,
including in Ukraine, North Korea, Russia, Venezuela, Iran, Syria, and other areas of the Middle East, and nationalist unrest in Europe and South America, also may cause market disruptions.
As a result of continued political
tensions and armed conflicts, including the Russian invasion of Ukraine commencing in February of 2022, the extent and ultimate result of which are unknown at this time, the United States and the EU, along with the
regulatory bodies of a number of countries, have imposed economic sanctions on certain Russian corporate entities and individuals, and certain sectors of Russia’s economy, which may result in, among other
things, the continued devaluation of Russian currency, a downgrade in the country’s credit rating, and/or a decline in the value and liquidity of Russian securities, property or interests. These sanctions could
also result in the immediate freeze of Russian securities and/or funds invested in prohibited assets, impairing the ability of the fund to buy, sell, receive or deliver those securities and/or assets. These sanctions
or the threat of additional sanctions could also result in Russia taking counter measures or retaliatory actions, which may further impair the value and liquidity of Russian securities. The United States and other
nations or international organizations may also impose additional economic sanctions or take other actions that may adversely affect Russia-exposed issuers and companies in various sectors of the Russian economy. Any
or all of these potential results could lead Russia’s economy into a recession. Economic sanctions and other actions against Russian institutions, companies, and individuals resulting from the ongoing conflict
may also have a substantial negative impact on other economies and securities markets both regionally and globally, as well as on companies with operations in the conflict region, the extent to which is unknown at
this time. The United States and the EU have also imposed similar sanctions on Belarus for its support of Russia’s invasion of Ukraine. Additional sanctions may be imposed on Belarus and other countries that
support Russia. Any such sanctions could present substantially similar risks as those resulting from the sanctions imposed on Russia, including substantial negative impacts on the regional and global economies and
securities markets.
In addition, there is a risk that
the prices of goods and services in the United States and many foreign economies may decline over time, known as deflation. Deflation may have an adverse effect on stock prices and creditworthiness and may make
defaults on debt more likely. If a country’s economy slips into a deflationary pattern, it could last for a prolonged period and may be difficult to reverse. Further, there is a risk that the present value of
assets or income from investments will be less in the future, known as inflation. Inflation rates may change frequently and drastically as a result of various factors, including unexpected shifts in the domestic or
global economy, and the fund’s investments may be affected, which may reduce the fund’s performance. Further, inflation may lead to the rise in interest rates, which may negatively affect the value of debt
instruments held by
| SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 28 |
the fund, resulting in a negative impact on the
fund’s performance. Generally, securities issued in emerging markets are subject to a greater risk of inflationary or deflationary forces, and more developed markets are better able to use monetary policy to
normalize markets.
Equity securities risk. The price of equity securities may decline due to changes in a company’s financial condition or overall market conditions. Securities the manager believes are undervalued may never
realize their full potential value, and in certain markets value stocks may underperform the market as a whole.
ESG integration risk. The manager considers ESG factors that it deems relevant or additive, along with other material factors and analysis, when managing the fund. The manager may consider these ESG factors on
all or a meaningful portion of the fund’s investments. In certain situations, the extent to which these ESG factors may be applied according to the manager’s integrated investment process may not include
U.S. Treasuries, government securities, or other asset classes. ESG factors may include, but are not limited to, matters regarding board diversity, climate change policies, and supply chain and human rights policies.
Incorporating ESG criteria and making investment decisions based on certain ESG characteristics, as determined by the manager, carries the risk that the fund may perform differently, including underperforming funds
that do not utilize ESG criteria or funds that utilize different ESG criteria. Integration of ESG factors into the fund’s investment process may result in a manager making different investments for the fund than
for a fund with a similar investment universe and/or investment style that does not incorporate such considerations in its investment strategy or processes, and the fund’s investment performance may be affected.
Because ESG factors are one of many considerations for the fund, the manager may nonetheless include companies with low ESG characteristics or exclude companies with high ESG characteristics in the fund’s
investments.
Fixed-income securities risk. A rise in interest rates typically causes bond prices to fall. The longer the average maturity or duration of the bonds held by a fund, the more sensitive it will likely be to
interest-rate fluctuations. An issuer may not make all interest payment or repay all or any of the principal borrowed. Changes in a security’s credit qualify may adversely affect fund performance. Additionally,
the value of inflation-indexed securities is subject to the effects of changes in market interest rates caused by factors other than inflation (real interest rates). Generally, when real interest rates rise, the value
of inflation-indexed securities will fall and the fund’s value may decline as a result of this exposure to these securities.
Foreign securities risk. Less information may be publicly available regarding foreign issuers, including foreign government issuers. Foreign securities may be subject to foreign taxes and may be more volatile than
U.S. securities. Currency fluctuations and political and economic developments may adversely impact the value of foreign securities. If applicable, depositary receipts are subject to most of the risks associated with
investing in foreign securities directly because the value of a depositary receipt is dependent upon the market price of the underlying foreign equity security. Depositary receipts are also subject to liquidity
risk.
Hedging, derivatives, and other
strategic transactions risk. Hedging, derivatives, and other strategic transactions may increase a fund’s volatility and could produce disproportionate losses, potentially more than the fund’s principal
investment. Risks of these transactions are different from and possibly greater than risks of investing directly in securities and other traditional instruments. Under certain market conditions, derivatives could
become harder to value or sell and may become subject to liquidity risk (i.e., the inability to enter into closing transactions). Derivatives and other strategic transactions that the fund intends to utilize include:
futures contracts, options, options on futures contracts, equity swaps, and reverse repurchase agreements. Futures contracts, options, and swaps generally are subject to counterparty risk. In addition, swaps may be
subject to interest-rate and settlement risk, and the risk of default of the underlying reference obligation. An event of default or insolvency of the counterparty to a reverse repurchase agreement could result in
delays or restrictions with respect to the fund’s ability to dispose of the underlying securities. In addition, a reverse repurchase agreement may be considered a form of leverage and may, therefore, increase
fluctuations in the fund’s NAV.
| 29 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT |
Illiquid and restricted
securities risk. Illiquid and restricted securities may be difficult to value and may involve greater risks than liquid securities. Illiquidity may have an adverse impact on a particular security’s
market price and the fund’s ability to sell the security.
Investment company securities
risk. Fund shareholders indirectly bear their proportionate share of the expenses of each such investment company in which the fund invests. The total return on such investments will be reduced
by the operating expenses and fees of such other investment companies, including advisory fees.
Large company risk. Larger companies may grow more slowly than smaller companies or be slower to respond to business developments. Large-capitalization securities may underperform the market as a
whole.
Leveraging risk. Issuing preferred shares or using derivatives may result in a leveraged portfolio. Leveraging long exposures increases a fund’s losses when the value of its investments declines.
Some derivatives have the potential for unlimited loss, regardless of the size of the initial investment. The fund also utilizes a Liquidity Agreement to increase its assets available for investment. See “Note 7
—Leverage risk” above.
LIBOR discontinuation risk. The official publication of the London Interbank Offered Rate (LIBOR), which many debt securities, derivatives and other financial instruments traditionally utilized as the reference or
benchmark rate for interest rate calculations, was discontinued as of June 30, 2023. However, a subset of LIBOR settings will continue to be published on a “synthetic” basis. The synthetic publication of
the one-, three- and six-month U.S. dollar LIBOR will continue until September 30, 2024. The discontinuation of LIBOR and a transition to replacement rates may lead to volatility and illiquidity in markets and
may adversely affect the fund’s performance.
Liquidity risk. The extent (if at all) to which a security may be sold or a derivative position closed without negatively impacting its market value may be impaired by reduced market activity or
participation, legal restrictions, or other economic and market impediments. Widespread selling of fixed-income securities to satisfy redemptions during periods of reduced demand may adversely impact the price or
salability of such securities.
Lower-rated and high-yield
fixed-income securities risk. Lower-rated and high-yield fixed-income securities (junk bonds) are subject to greater credit quality risk, risk of default, and price volatility than higher-rated fixed-income securities,
may be considered speculative, and can be difficult to resell.
Mortgage-backed and asset-backed
securities risk. Mortgage-backed and asset-backed securities are subject to different combinations of prepayment, extension, interest-rate, and other market risks. Factors that impact the value of these
securities include interest rate changes, the reliability of available information, credit quality or enhancement, and market perception.
Preferred and convertible securities
risk. Preferred stock dividends are payable only if declared by the issuer’s board. Preferred stock may be subject to redemption provisions. The market values of convertible securities
tend to fall as interest rates rise and rise as interest rates fall. Convertible preferred stock’s value can depend heavily upon the underlying common stock’s value.
Real estate investment trust
risk. REITs, pooled investment vehicles that typically invest in real estate directly or in loans collateralized by real estate, carry risks associated with owning real estate, including the
potential for a decline in value due to economic or market conditions.
Small and mid-sized company
risk. Small and mid-sized companies are generally less established and may be more volatile than larger companies. Small and/or mid-capitalization securities may underperform the market as a
whole.
U.S. Government agency
obligations risk. U.S. government-sponsored entities such as Federal National Mortgage Association (Fannie Mae), Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal Home Loan Banks,
although chartered or sponsored by Congress, are not funded by congressional appropriations and the debt securities that they issue are neither guaranteed nor issued by the U.S. government. Such debt securities are
subject to the risk of default on the payment of interest and/or principal, similar to the debt
| SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 30 |
securities of private issuers. The maximum
potential liability of the issuers of some U.S. government obligations may greatly exceed their current resources, including any legal right to support from the U.S. government. Although the U.S. government has
provided financial support to Fannie Mae and Freddie Mac in the past, there can be no assurance that it will support these or other government-sponsored entities in the future.
| 31 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT |
ADDITIONAL INFORMATION
Unaudited
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).
Dividends and distributions
During the six months ended April
30, 2024, distributions from net investment income totaling $0.8280 per share were paid to shareholders. The dates of payments and the amounts per share were as follows:
| Payment Date | Income Distributions |
| November 30, 2023 | $0.1380 |
| December 29, 2023 | 0.1380 |
| January 31, 2024 | 0.1380 |
| February 29, 2024 | 0.1380 |
| March 28, 2024 | 0.1380 |
| April 30, 2024 | 0.1380 |
| Total | $0.8280 |
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 43006
Providence, RI 02940-3078
Computershare
P.O. Box 43006
Providence, RI 02940-3078
Registered or Overnight Mail:
Computershare
150 Royall Street, Suite 101
Canton, MA 02021
Computershare
150 Royall Street, Suite 101
Canton, MA 02021
If your shares are held with a
brokerage firm, you should contact that firm, bank or other nominee for assistance.
| SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 32 |
SHAREHOLDER MEETING
The fund held its Annual Meeting
of Shareholders on Tuesday, February 20, 2024. The following proposal was considered by the shareholders:
THE PROPOSAL PASSED ON FEBRUARY 20,
2024
PROPOSAL: To elect two (2) Trustees
(Noni L. Ellison and Frances G. Rathke) to serve for a three-year term ending at the 2027 Annual Meeting of Shareholders.
| Total votes for the nominee | Total votes withheld from the nominee | |
| Independent Trustees | ||
| Noni L. Ellison | 26,894,774.000 | 1,083,257.510 |
| Frances G. Rathke | 26,893,604.000 | 1,084,427.510 |
Trustees whose term of office
continued after the Annual Meeting of Shareholders because they were not up for election are: Andrew G. Arnott, James R. Boyle, William H. Cunningham, Grace K. Fey, Dean C. Garfield, Deborah C. Jackson, Paul Lorentz,
Hassell H. McClellan, Steven R. Pruchansky, and Gregory A. Russo.
| 33 | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | SEMIANNUAL REPORT |
More information
π Member of the Audit Committee as of September 26, 2023.
† Non-Independent Trustee
* Member of the Audit Committee
# Effective as of June 29,
2023.
The fund’s proxy
voting policies and procedures, as well as the fund 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.
The report is certified
under the Sarbanes-Oxley Act, which requires closed-end funds and other public companies to affirm that, to the best of their knowledge, the information in their financial reports is fairly and accurately stated in
all material respects.
| You can also contact us: | ||
| 800-852-0218 | Regular mail: | Express mail: |
| jhinvestments.com | Computershare P.O. Box 43006 Providence, RI 02940-3078 | Computershare 150 Royall St., Suite 101 Canton, MA 02021 |
| SEMIANNUAL REPORT | JOHN HANCOCK TAX-ADVANTAGED DIVIDEND INCOME FUND | 34 |
John Hancock family of funds
A fund’s investment
objectives, risks, charges, and expenses should be considered carefully before investing. The prospectus contains this and other important information about the fund. To obtain a prospectus, contact your financial
professional, call John Hancock Investment Management at 800-225-5291, or visit our website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
John Hancock 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 Manulife Investment Management (US) LLC or Dimensional Fund Advisors LP. Foreside is not affiliated with John Hancock Investment Management Distributors LLC, Manulife
Investment Management (US) 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.
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.
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.
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
LLC, 200 Berkeley Street, Boston, MA 02116-5010, 800-225-5291, jhinvestments.com
Manulife Investment Management, the
Stylized M Design, and Manulife Investment Management & Stylized M Design are trademarks of The Manufacturers Life Insurance Company and are used by its affiliates under license.
| MF3549392 | P13SA 4/24 |
6/2024
ITEM 2. CODE OF ETHICS.
Not Applicable
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not Applicable
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not Applicable
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable.
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.
Not applicable.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
(a) Not applicable
(b)
|
|
Total number of |
|
Total number of |
Maximum number of |
|
|
Average price |
shares purchased |
shares that may yet |
|
|
|
shares |
as part of publicly |
be purchased under |
|
|
Period |
purchased |
per share |
announced plans* |
the plans |
|
Nov-23 |
- |
- |
- |
3,542,288 |
|
Dec-23 |
- |
- |
- |
3,542,288 |
|
Jan-24 |
- |
- |
- |
3,543,182 |
|
Feb-24 |
- |
- |
- |
3,543,182 |
|
Mar-24 |
- |
- |
- |
3,543,182 |
|
Apr-24 |
- |
- |
- |
3,543,182 |
|
Total |
- |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*In December 2007, the Board of Trustees approved a share repurchase plan, which has been subsequently reviewed and approved by the Board of Trustees. 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, 2023. The current share plan will remain in effect between January 1, 2024 and December 31, 2024.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
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, Governance and Administration 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) Not applicable.
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/ Kristie M. Feinberg |
|
|
------------------------------ |
|
|
Kristie M. Feinberg |
|
|
President |
|
Date: |
June 26, 2024 |
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/ Kristie M. Feinberg |
|
|
------------------------------ |
|
|
Kristie M. Feinberg |
|
|
President |
|
Date: |
June 26, 2024 |
|
By: |
/s/ Charles A. Rizzo |
|
|
----------------------- |
|
|
Charles A. Rizzo |
|
|
Chief Financial Officer |
|
Date: |
June 26, 2024 |