Form N-CSRS John Hancock Hedged Equi For: Jun 30
Managed distribution plan
The fund has adopted a managed
distribution plan (Plan). Under the Plan, the fund currently makes quarterly distributions of an amount equal to $0.2900 per share. The fund may make additional distributions: (i) for purposes of not incurring federal
income tax at the fund level of 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 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 fund’s 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 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 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
Hedged Equity & Income Fund
Table of contents
1 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT |
Your fund at a glance
INVESTMENT OBJECTIVE
The fund seeks to provide total
return with a focus on current income and gains and also consisting of long-term capital appreciation.
AVERAGE ANNUAL TOTAL RETURNS AS
OF 6/30/2022 (%)
The MSCI All Country World Index
(ACWI) tracks the performance of publicly traded large- and mid-cap stocks of companies in both developed and emerging markets.
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 HEDGED EQUITY & INCOME FUND | 2 |
Portfolio summary
SECTOR COMPOSITION AS OF
6/30/2022 (% of net assets)
TOP 10 HOLDINGS AS OF 6/30/2022 (% of net assets) | |
Johnson & Johnson | 2.6 |
Pfizer, Inc. | 2.3 |
Merck & Company, Inc. | 2.0 |
Philip Morris International, Inc. | 1.8 |
Verizon Communications, Inc. | 1.3 |
Texas Instruments, Inc. | 1.3 |
AbbVie, Inc. | 1.3 |
The Progressive Corp. | 1.3 |
National Grid PLC | 1.2 |
Novartis AG | 1.2 |
TOTAL | 16.3 |
Cash and cash equivalents are not included. |
3 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT |
COUNTRY COMPOSITION AS OF 6/30/2022 (% of net assets) | |
United States | 46.4 |
United Kingdom | 8.6 |
Japan | 7.8 |
France | 5.2 |
Switzerland | 4.3 |
Canada | 3.6 |
Taiwan | 3.0 |
Spain | 2.8 |
Australia | 1.9 |
Hong Kong | 1.6 |
Other countries | 14.8 |
TOTAL | 100.0 |
SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 4 |
Fund’s investments
AS OF 6-30-22
(unaudited)
Shares | Value | ||||
Common stocks 96.3% | $140,112,249 | ||||
(Cost $150,311,577) | |||||
Communication services 6.8% | 9,835,387 | ||||
Diversified telecommunication services 4.4% | |||||
AT&T, Inc. | 25,167 | 527,500 | |||
BT Group PLC | 311,420 | 707,782 | |||
Hellenic Telecommunications Organization SA | 76,926 | 1,343,502 | |||
Koninklijke KPN NV | 171,609 | 610,607 | |||
KT Corp. | 3,904 | 109,774 | |||
Magyar Telekom Telecommunications PLC | 23,212 | 19,647 | |||
Orange SA | 9,371 | 110,424 | |||
Telefonica Brasil SA | 6,941 | 62,415 | |||
Telenor ASA | 27,532 | 367,916 | |||
Telkom Indonesia Persero Tbk PT | 2,029,140 | 545,869 | |||
Turk Telekomunikasyon AS | 70,215 | 37,040 | |||
Verizon Communications, Inc. | 38,701 | 1,964,076 | |||
Entertainment 0.2% | |||||
DeNA Company, Ltd. | 4,250 | 59,356 | |||
Nintendo Company, Ltd. | 432 | 185,784 | |||
Media 1.6% | |||||
Comcast Corp., Class A | 25,145 | 986,690 | |||
Criteo SA, ADR (A) | 754 | 18,398 | |||
Fuji Media Holdings, Inc. | 2,855 | 24,181 | |||
Metropole Television SA | 3,434 | 50,920 | |||
Nippon Television Holdings, Inc. | 5,360 | 47,695 | |||
Omnicom Group, Inc. | 5,774 | 367,284 | |||
Paramount Global, Class B | 1,287 | 31,763 | |||
Publicis Groupe SA | 11,066 | 544,232 | |||
RTL Group SA | 1,672 | 70,034 | |||
Television Francaise 1 | 7,903 | 56,065 | |||
TV Asahi Holdings Corp. | 3,570 | 38,908 | |||
WPP PLC | 12,493 | 126,195 | |||
Zee Entertainment Enterprises, Ltd. | 4,466 | 12,157 | |||
Wireless telecommunication services 0.6% | |||||
America Movil SAB de CV, Series L, ADR | 1,050 | 21,452 | |||
KDDI Corp. | 23,500 | 741,057 | |||
MTN Group, Ltd. | 1,907 | 15,518 | |||
SK Telecom Company, Ltd. | 113 | 4,535 | |||
Turkcell Iletisim Hizmetleri AS | 27,277 | 26,611 | |||
Consumer discretionary 7.0% | 10,210,318 | ||||
Auto components 0.4% | |||||
Continental AG | 964 | 67,662 |
5 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Consumer discretionary (continued) | |||||
Auto components (continued) | |||||
Fuyao Glass Industry Group Company, Ltd., H Shares (B) | 2,635 | $13,330 | |||
Hankook Tire & Technology Company, Ltd. | 2,064 | 52,618 | |||
Hyundai Mobis Company, Ltd. | 447 | 68,899 | |||
NOK Corp. | 5,825 | 47,344 | |||
Stanley Electric Company, Ltd. | 4,338 | 71,216 | |||
Sumitomo Electric Industries, Ltd. | 8,020 | 88,625 | |||
Sumitomo Rubber Industries, Ltd. | 4,980 | 42,587 | |||
Tachi-S Company, Ltd. | 2,880 | 23,246 | |||
Tokai Rika Company, Ltd. | 4,310 | 47,014 | |||
Toyoda Gosei Company, Ltd. | 2,670 | 42,130 | |||
TS Tech Company, Ltd. | 4,630 | 47,935 | |||
Unipres Corp. | 4,540 | 26,821 | |||
Automobiles 2.0% | |||||
Bajaj Auto, Ltd. | 13,283 | 624,697 | |||
Bayerische Motoren Werke AG | 3,020 | 234,112 | |||
Dongfeng Motor Group Company, Ltd., H Shares | 102,896 | 78,334 | |||
Ford Motor Company | 1,025 | 11,408 | |||
Great Wall Motor Company, Ltd., H Shares | 69,731 | 144,427 | |||
Hero MotoCorp, Ltd. | 660 | 22,919 | |||
Honda Motor Company, Ltd. | 7,870 | 189,754 | |||
Isuzu Motors, Ltd. | 68,722 | 760,160 | |||
Mercedes-Benz Group AG | 1,473 | 85,549 | |||
Nissan Motor Company, Ltd. (A) | 17,690 | 69,285 | |||
Renault SA (A) | 2,487 | 62,787 | |||
Stellantis NV | 7,652 | 94,998 | |||
Subaru Corp. | 4,844 | 85,683 | |||
Toyota Motor Corp. | 30,760 | 474,605 | |||
Yadea Group Holdings, Ltd. (B) | 7,835 | 15,366 | |||
Diversified consumer services 0.0% | |||||
Benesse Holdings, Inc. | 380 | 6,149 | |||
Hotels, restaurants and leisure 1.1% | |||||
Darden Restaurants, Inc. | 3,434 | 388,454 | |||
McDonald’s Corp. | 1,310 | 323,413 | |||
OPAP SA | 20,499 | 294,846 | |||
Sands China, Ltd. (A) | 187,200 | 450,347 | |||
Starbucks Corp. | 1,065 | 81,355 | |||
Household durables 1.0% | |||||
Coway Company, Ltd. | 1,215 | 60,115 | |||
Electrolux AB, Series B | 6,470 | 87,389 | |||
Garmin, Ltd. | 4,054 | 398,306 | |||
Nikon Corp. | 4,555 | 52,527 | |||
Persimmon PLC | 8,559 | 194,733 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 6 |
Shares | Value | ||||
Consumer discretionary (continued) | |||||
Household durables (continued) | |||||
Sekisui House, Ltd. | 36,224 | $635,925 | |||
Tamron Company, Ltd. | 710 | 13,158 | |||
Internet and direct marketing retail 0.0% | |||||
ASKUL Corp. | 4,400 | 52,587 | |||
Leisure products 0.2% | |||||
Bandai Namco Holdings, Inc. | 1,951 | 137,727 | |||
Hasbro, Inc. | 1,167 | 95,554 | |||
Specialty retail 2.1% | |||||
Adastria Company, Ltd. | 1,910 | 31,612 | |||
CECONOMY AG | 9,121 | 25,571 | |||
Industria de Diseno Textil SA | 36,346 | 825,980 | |||
Kingfisher PLC | 14,177 | 42,368 | |||
Mr. Price Group, Ltd. | 48,901 | 536,229 | |||
Shimamura Company, Ltd. | 800 | 70,292 | |||
The Home Depot, Inc. | 4,144 | 1,136,575 | |||
The TJX Companies, Inc. | 3,193 | 178,329 | |||
USS Company, Ltd. | 8,151 | 141,274 | |||
Xebio Holdings Company, Ltd. | 4,605 | 31,462 | |||
Textiles, apparel and luxury goods 0.2% | |||||
ANTA Sports Products, Ltd. | 1,011 | 12,442 | |||
Li Ning Company, Ltd. | 8,335 | 77,608 | |||
Sanyo Shokai, Ltd. (A) | 1,690 | 12,123 | |||
The Swatch Group AG, Bearer Shares | 326 | 77,438 | |||
VF Corp. | 2,584 | 114,135 | |||
Yue Yuen Industrial Holdings, Ltd. | 23,639 | 30,784 | |||
Consumer staples 8.1% | 11,839,509 | ||||
Beverages 0.7% | |||||
Anadolu Efes Biracilik Ve Malt Sanayii AS | 19,861 | 32,470 | |||
Coca-Cola Icecek AS | 6,046 | 46,927 | |||
Embotelladora Andina SA, Series B, ADR | 5,524 | 61,427 | |||
Kirin Holdings Company, Ltd. | 4,920 | 77,721 | |||
PepsiCo, Inc. | 2,061 | 343,486 | |||
The Coca-Cola Company | 7,971 | 501,456 | |||
Food and staples retailing 0.3% | |||||
Atacadao SA | 6,878 | 21,908 | |||
Carrefour SA | 4,387 | 77,875 | |||
J Sainsbury PLC | 23,957 | 59,621 | |||
Marks & Spencer Group PLC (A) | 8,330 | 13,820 | |||
Sundrug Company, Ltd. | 1,761 | 39,382 | |||
Sysco Corp. | 1,204 | 101,991 | |||
Tsuruha Holdings, Inc. | 1,165 | 63,393 |
7 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Consumer staples (continued) | |||||
Food products 2.0% | |||||
Archer-Daniels-Midland Company | 1,660 | $128,816 | |||
Astral Foods, Ltd. | 3,149 | 36,636 | |||
General Mills, Inc. | 4,078 | 307,685 | |||
Kellogg Company | 16,227 | 1,157,634 | |||
Mondelez International, Inc., Class A | 5,980 | 371,298 | |||
Nestle SA | 7,269 | 849,548 | |||
Perusahaan Perkebunan London Sumatra Indonesia Tbk PT | 95,056 | 7,407 | |||
The J.M. Smucker Company | 592 | 75,782 | |||
Ulker Biskuvi Sanayi AS (A) | 20,496 | 17,732 | |||
WH Group, Ltd. (B) | 47,583 | 36,829 | |||
Household products 1.8% | |||||
Colgate-Palmolive Company | 3,747 | 300,285 | |||
Kimberly-Clark Corp. | 3,556 | 480,593 | |||
The Clorox Company | 813 | 114,617 | |||
The Procter & Gamble Company | 11,724 | 1,685,794 | |||
Personal products 0.2% | |||||
Unilever PLC | 2,538 | 115,682 | |||
Unilever PLC, ADR | 4,490 | 205,777 | |||
Tobacco 3.1% | |||||
Altria Group, Inc. | 15,544 | 649,273 | |||
British American Tobacco PLC | 9,062 | 388,436 | |||
ITC, Ltd. | 188,192 | 650,579 | |||
KT&G Corp. | 3,120 | 197,761 | |||
Philip Morris International, Inc. | 26,533 | 2,619,868 | |||
Energy 5.1% | 7,446,183 | ||||
Energy equipment and services 0.0% | |||||
Fugro NV (A) | 3,537 | 44,521 | |||
Trican Well Service, Ltd. (A) | 8,979 | 25,740 | |||
Oil, gas and consumable fuels 5.1% | |||||
ARC Resources, Ltd. | 3,379 | 42,605 | |||
BP PLC | 57,340 | 269,240 | |||
Cameco Corp. | 3,292 | 69,206 | |||
Chevron Corp. | 2,447 | 354,277 | |||
ConocoPhillips | 4,344 | 390,135 | |||
Coterra Energy, Inc. | 5,673 | 146,307 | |||
Enbridge, Inc. | 27,895 | 1,178,039 | |||
Eni SpA | 13,632 | 161,685 | |||
EOG Resources, Inc. | 655 | 72,338 | |||
Exxon Mobil Corp. | 5,304 | 454,235 | |||
Foresight Energy LLC (A) | 191 | 3,239 | |||
Inpex Corp. | 7,271 | 77,947 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 8 |
Shares | Value | ||||
Energy (continued) | |||||
Oil, gas and consumable fuels (continued) | |||||
Japan Petroleum Exploration Company, Ltd. | 1,425 | $33,428 | |||
Oil & Natural Gas Corp., Ltd. | 18,325 | 34,937 | |||
Phillips 66 | 972 | 79,694 | |||
Pioneer Natural Resources Company | 325 | 72,501 | |||
Repsol SA | 42,731 | 629,940 | |||
Shell PLC | 15,738 | 409,861 | |||
TC Energy Corp. | 25,296 | 1,310,393 | |||
TotalEnergies SE | 25,943 | 1,365,561 | |||
Ultrapar Participacoes SA | 22,716 | 53,432 | |||
Woodside Energy Group, Ltd. | 3,742 | 82,244 | |||
Yankuang Energy Group Company, Ltd., H Shares | 23,175 | 72,499 | |||
YPF SA, ADR (A) | 3,736 | 12,179 | |||
Financials 18.9% | 27,481,215 | ||||
Banks 6.9% | |||||
ABN AMRO Bank NV (B) | 6,875 | 77,251 | |||
AIB Group PLC | 29,301 | 66,874 | |||
Bank Mandiri Persero Tbk PT | 194,867 | 104,062 | |||
Bank of America Corp. | 37,616 | 1,170,986 | |||
Bank of Ireland Group PLC | 14,098 | 89,108 | |||
BNP Paribas SA | 2,642 | 126,372 | |||
BPER Banca | 35,830 | 59,060 | |||
CaixaBank SA | 31,547 | 110,479 | |||
Canara Bank | 15,612 | 35,959 | |||
CIMB Group Holdings BHD | 61,751 | 69,490 | |||
CTBC Financial Holding Company, Ltd. | 727,287 | 615,176 | |||
Dah Sing Financial Holdings, Ltd. | 10,722 | 30,646 | |||
DGB Financial Group, Inc. | 7,656 | 44,948 | |||
DNB Bank ASA | 41,436 | 750,139 | |||
Erste Group Bank AG | 2,289 | 58,166 | |||
Huntington Bancshares, Inc. | 10,940 | 131,608 | |||
Industrial Bank of Korea | 4,792 | 35,589 | |||
ING Groep NV | 8,955 | 88,221 | |||
JPMorgan Chase & Co. | 2,792 | 314,407 | |||
Kasikornbank PCL | 17,152 | 73,193 | |||
Kasikornbank PCL, NVDR | 11,619 | 49,582 | |||
KB Financial Group, Inc. | 2,790 | 104,188 | |||
M&T Bank Corp. | 921 | 146,798 | |||
Mitsubishi UFJ Financial Group, Inc. | 166,979 | 893,346 | |||
Powszechna Kasa Oszczednosci Bank Polski SA (A) | 1,923 | 12,062 | |||
Resona Holdings, Inc. | 31,620 | 118,275 | |||
Royal Bank of Canada | 11,171 | 1,081,692 | |||
Sberbank of Russia PJSC, ADR (A)(C) | 3,353 | 741 |
9 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Financials (continued) | |||||
Banks (continued) | |||||
Shinhan Financial Group Company, Ltd. | 4,032 | $115,615 | |||
Societe Generale SA | 4,537 | 100,312 | |||
Standard Chartered PLC | 114,803 | 866,693 | |||
Sumitomo Mitsui Financial Group, Inc. | 3,000 | 89,175 | |||
Sumitomo Mitsui Trust Holdings, Inc. | 3,490 | 107,862 | |||
The Bank of Nova Scotia | 19,745 | 1,168,563 | |||
The PNC Financial Services Group, Inc. | 1,120 | 176,702 | |||
The Tochigi Bank, Ltd. | 8,900 | 16,843 | |||
Truist Financial Corp. | 12,775 | 605,918 | |||
Unicaja Banco SA (B) | 58,048 | 56,967 | |||
UniCredit SpA | 12,659 | 120,974 | |||
VTB Bank PJSC, GDR (C) | 55,420 | 942 | |||
Woori Financial Group, Inc. | 14,991 | 140,327 | |||
Capital markets 3.9% | |||||
Ares Management Corp., Class A | 15,387 | 874,905 | |||
BlackRock, Inc. | 1,162 | 707,704 | |||
CME Group, Inc. | 3,863 | 790,756 | |||
GAM Holding AG (A) | 3,515 | 2,912 | |||
Hargreaves Lansdown PLC | 1,307 | 12,611 | |||
Ichiyoshi Securities Company, Ltd. | 3,860 | 18,521 | |||
Invesco, Ltd. | 6,139 | 99,022 | |||
Julius Baer Group, Ltd. | 465 | 21,571 | |||
MarketAxess Holdings, Inc. | 78 | 19,969 | |||
Morgan Stanley | 4,742 | 360,677 | |||
Nomura Holdings, Inc. | 9,143 | 33,217 | |||
Partners Group Holding AG | 163 | 147,205 | |||
State Street Corp. | 714 | 44,018 | |||
T. Rowe Price Group, Inc. | 4,913 | 558,166 | |||
The Blackstone Group, Inc. | 6,925 | 631,768 | |||
The Carlyle Group, Inc. | 3,329 | 105,396 | |||
UBS Group AG | 75,236 | 1,216,320 | |||
Consumer finance 0.1% | |||||
360 DigiTech, Inc., ADR | 3,165 | 54,755 | |||
Lufax Holding, Ltd., ADR | 21,052 | 126,312 | |||
Provident Financial PLC | 11,741 | 28,596 | |||
Diversified financial services 0.6% | |||||
Apollo Global Management, Inc. | 865 | 41,935 | |||
FirstRand, Ltd. | 55,524 | 213,680 | |||
G-Resources Group, Ltd. | 18,261 | 5,595 | |||
Yuanta Financial Holding Company, Ltd. | 840,096 | 556,407 | |||
Insurance 7.1% | |||||
Admiral Group PLC | 13,900 | 380,584 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 10 |
Shares | Value | ||||
Financials (continued) | |||||
Insurance (continued) | |||||
Aegon NV | 122,620 | $528,079 | |||
Ageas SA/NV | 1,867 | 82,321 | |||
Allianz SE | 1,615 | 309,612 | |||
Arthur J. Gallagher & Company | 557 | 90,813 | |||
Assicurazioni Generali SpA | 21,890 | 349,644 | |||
Aviva PLC | 25,830 | 126,522 | |||
AXA SA | 71,028 | 1,622,388 | |||
Caixa Seguridade Participacoes S/A | 38,931 | 51,551 | |||
China Reinsurance Group Corp., H Shares | 627,534 | 52,030 | |||
Chubb, Ltd. | 1,717 | 337,528 | |||
Dai-ichi Life Holdings, Inc. | 5,775 | 106,811 | |||
Fidelity National Financial, Inc. | 1,054 | 38,956 | |||
Legal & General Group PLC | 140,810 | 411,668 | |||
MetLife, Inc. | 6,741 | 423,267 | |||
MS&AD Insurance Group Holdings, Inc. | 3,670 | 112,535 | |||
Muenchener Rueckversicherungs-Gesellschaft AG | 48 | 11,354 | |||
Old Mutual, Ltd. | 84,507 | 57,276 | |||
Phoenix Group Holdings PLC | 56,398 | 406,322 | |||
Powszechny Zaklad Ubezpieczen SA | 30,835 | 206,727 | |||
Principal Financial Group, Inc. | 1,488 | 99,384 | |||
Sanlam, Ltd. | 42,503 | 138,144 | |||
SCOR SE | 2,593 | 55,851 | |||
Suncorp Group, Ltd. | 80,766 | 615,901 | |||
Swiss Re AG | 2,510 | 194,821 | |||
T&D Holdings, Inc. | 11,445 | 137,003 | |||
The Progressive Corp. | 15,658 | 1,820,556 | |||
Tokio Marine Holdings, Inc. | 19,100 | 1,113,758 | |||
Tongyang Life Insurance Company, Ltd. | 5,110 | 22,515 | |||
Zurich Insurance Group AG | 1,007 | 439,126 | |||
Mortgage real estate investment trusts 0.3% | |||||
Annaly Capital Management, Inc. | 74,592 | 440,839 | |||
Health care 13.6% | 19,810,644 | ||||
Biotechnology 1.5% | |||||
AbbVie, Inc. | 12,134 | 1,858,443 | |||
Amgen, Inc. | 1,180 | 287,094 | |||
Health care equipment and supplies 0.8% | |||||
Abbott Laboratories | 763 | 82,900 | |||
Koninklijke Philips NV | 3,614 | 77,515 | |||
Koninklijke Philips NV, NYRS | 3,573 | 76,927 | |||
Medtronic PLC | 9,635 | 864,741 | |||
Paramount Bed Holdings Company, Ltd. | 2,330 | 37,865 |
11 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Health care (continued) | |||||
Health care providers and services 0.5% | |||||
Alfresa Holdings Corp. | 4,250 | $57,141 | |||
Cardinal Health, Inc. | 2,180 | 113,949 | |||
CVS Health Corp. | 4,375 | 405,388 | |||
Fresenius SE & Company KGaA | 4,050 | 123,167 | |||
Netcare, Ltd. | 50,905 | 44,943 | |||
UnitedHealth Group, Inc. | 59 | 30,304 | |||
Life sciences tools and services 0.0% | |||||
CMIC Holdings Company, Ltd. | 1,290 | 13,651 | |||
Pharmaceuticals 10.8% | |||||
AstraZeneca PLC | 9,363 | 1,235,183 | |||
AstraZeneca PLC, ADR | 3,110 | 205,478 | |||
Bristol-Myers Squibb Company | 16,987 | 1,307,999 | |||
Eisai Company, Ltd. | 700 | 29,596 | |||
Eli Lilly & Company | 564 | 182,866 | |||
Johnson & Johnson | 21,137 | 3,752,029 | |||
Kissei Pharmaceutical Company, Ltd. | 1,670 | 32,686 | |||
Merck & Company, Inc. | 31,415 | 2,864,106 | |||
Novartis AG | 20,027 | 1,697,901 | |||
Ono Pharmaceutical Company, Ltd. | 5,650 | 145,144 | |||
Pfizer, Inc. | 62,998 | 3,302,981 | |||
Roche Holding AG | 1,931 | 645,533 | |||
Sanofi | 1,353 | 136,445 | |||
Takeda Pharmaceutical Company, Ltd. | 7,073 | 198,669 | |||
Industrials 9.2% | 13,392,005 | ||||
Aerospace and defense 2.5% | |||||
Austal, Ltd. | 25,798 | 32,052 | |||
Babcock International Group PLC (A) | 15,728 | 59,374 | |||
BAE Systems PLC | 122,864 | 1,243,874 | |||
Dassault Aviation SA | 511 | 79,799 | |||
General Dynamics Corp. | 1,223 | 270,589 | |||
L3Harris Technologies, Inc. | 899 | 217,288 | |||
Lockheed Martin Corp. | 3,511 | 1,509,590 | |||
Raytheon Technologies Corp. | 1,616 | 155,314 | |||
Air freight and logistics 0.3% | |||||
bpost SA | 4,152 | 24,603 | |||
CH Robinson Worldwide, Inc. | 933 | 94,578 | |||
PostNL NV | 11,384 | 34,488 | |||
United Parcel Service, Inc., Class B | 1,213 | 221,421 | |||
Yamato Holdings Company, Ltd. | 5,080 | 81,296 | |||
Airlines 0.1% | |||||
easyJet PLC (A) | 12,715 | 57,111 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 12 |
Shares | Value | ||||
Industrials (continued) | |||||
Airlines (continued) | |||||
Japan Airlines Company, Ltd. (A) | 4,420 | $75,943 | |||
Building products 0.5% | |||||
Cie de Saint-Gobain | 3,132 | 135,331 | |||
Johnson Controls International PLC | 11,444 | 547,939 | |||
Commercial services and supplies 0.1% | |||||
Aeon Delight Company, Ltd. | 1,979 | 43,340 | |||
Prosegur Cia de Seguridad SA | 18,289 | 32,427 | |||
Waste Management, Inc. | 156 | 23,865 | |||
Construction and engineering 1.1% | |||||
China Railway Group, Ltd., H Shares | 992,576 | 614,442 | |||
Chiyoda Corp. (A) | 5,915 | 18,627 | |||
Implenia AG (A) | 1,605 | 36,807 | |||
JGC Holdings Corp. | 7,765 | 99,737 | |||
Vinci SA | 8,965 | 804,711 | |||
Electrical equipment 0.4% | |||||
Cosel Company, Ltd. | 4,060 | 24,507 | |||
Eaton Corp. PLC | 1,783 | 224,640 | |||
Emerson Electric Company | 371 | 29,509 | |||
Hubbell, Inc. | 1,059 | 189,116 | |||
Ushio, Inc. | 2,510 | 31,086 | |||
Zumtobel Group AG | 2,338 | 17,287 | |||
Industrial conglomerates 0.7% | |||||
3M Company | 2,393 | 309,678 | |||
Honeywell International, Inc. | 1,082 | 188,062 | |||
Toshiba Corp. | 14,342 | 582,720 | |||
Machinery 1.1% | |||||
Caterpillar, Inc. | 126 | 22,524 | |||
Daimler Truck Holding AG (A) | 3,805 | 100,208 | |||
Hino Motors, Ltd. | 10,810 | 55,645 | |||
Hisaka Works, Ltd. | 2,660 | 16,444 | |||
Kone OYJ, B Shares | 6,959 | 332,607 | |||
Makino Milling Machine Company, Ltd. | 1,720 | 53,712 | |||
Makita Corp. | 2,437 | 60,405 | |||
Mitsubishi Heavy Industries, Ltd. | 1,505 | 52,602 | |||
OKUMA Corp. | 1,260 | 47,322 | |||
PACCAR, Inc. | 5,843 | 481,113 | |||
SKF AB, B Shares | 6,883 | 102,118 | |||
Stanley Black & Decker, Inc. | 413 | 43,307 | |||
Sumitomo Heavy Industries, Ltd. | 3,280 | 72,608 | |||
THK Company, Ltd. | 4,330 | 81,559 | |||
Wartsila OYJ ABP | 7,456 | 58,446 |
13 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Industrials (continued) | |||||
Marine 0.2% | |||||
A.P. Moller - Maersk A/S, Series B | 103 | $241,803 | |||
Evergreen Marine Corp. Taiwan, Ltd. | 33,774 | 95,995 | |||
Pacific Basin Shipping, Ltd. | 48,062 | 18,478 | |||
Professional services 0.7% | |||||
Adecco Group AG | 3,099 | 105,629 | |||
Bureau Veritas SA | 30,315 | 779,946 | |||
Hays PLC | 38,366 | 52,469 | |||
Pagegroup PLC | 7,263 | 35,574 | |||
SThree PLC | 5,119 | 22,160 | |||
Road and rail 0.5% | |||||
Canadian National Railway Company | 1,654 | 186,049 | |||
Nippon Express Holdings, Inc. | 10,926 | 595,174 | |||
Trading companies and distributors 0.6% | |||||
Mitsui & Company, Ltd. | 12,325 | 270,836 | |||
Rexel SA (A) | 2,449 | 37,842 | |||
SIG PLC (A) | 19,684 | 7,149 | |||
Triton International, Ltd. | 11,744 | 618,322 | |||
Transportation infrastructure 0.4% | |||||
Grupo Aeroportuario del Sureste SAB de CV, B Shares | 29,552 | 582,546 | |||
Kamigumi Company, Ltd. | 2,600 | 50,262 | |||
Information technology 10.0% | 14,609,616 | ||||
Communications equipment 1.2% | |||||
Cisco Systems, Inc. | 39,621 | 1,689,439 | |||
Nokia OYJ | 24,359 | 112,905 | |||
Electronic equipment, instruments and components 0.8% | |||||
Alps Alpine Company, Ltd. | 5,310 | 53,957 | |||
Citizen Watch Company, Ltd. | 7,785 | 31,670 | |||
Corning, Inc. | 6,192 | 195,110 | |||
E Ink Holdings, Inc. | 7,727 | 49,339 | |||
Enplas Corp. | 700 | 16,416 | |||
Foxconn Technology Company, Ltd. | 24,434 | 40,524 | |||
Hon Hai Precision Industry Company, Ltd. | 22,998 | 84,429 | |||
Nan Ya Printed Circuit Board Corp. | 2,564 | 22,554 | |||
Nichicon Corp. | 2,210 | 20,516 | |||
Nippon Chemi-Con Corp. (A) | 3,130 | 39,230 | |||
PAX Global Technology, Ltd. | 29,186 | 22,752 | |||
Zhen Ding Technology Holding, Ltd. | 164,437 | 569,654 | |||
IT services 1.6% | |||||
Accenture PLC, Class A | 471 | 130,773 | |||
Automatic Data Processing, Inc. | 839 | 176,224 | |||
Broadridge Financial Solutions, Inc. | 972 | 138,559 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 14 |
Shares | Value | ||||
Information technology (continued) | |||||
IT services (continued) | |||||
Edenred | 13,120 | $621,502 | |||
Fidelity National Information Services, Inc. | 1,105 | 101,295 | |||
IBM Corp. | 5,042 | 711,880 | |||
Itochu Techno-Solutions Corp. | 2,575 | 63,312 | |||
Mastercard, Inc., Class A | 58 | 18,298 | |||
Paychex, Inc. | 2,246 | 255,752 | |||
Sopra Steria Group SACA | 126 | 18,948 | |||
The Western Union Company | 6,658 | 109,657 | |||
Visa, Inc., Class A | 288 | 56,704 | |||
Semiconductors and semiconductor equipment 4.8% | |||||
ams AG (A) | 4,626 | 41,851 | |||
Analog Devices, Inc. | 4,555 | 665,440 | |||
Broadcom, Inc. | 1,161 | 564,025 | |||
Disco Corp. | 231 | 54,969 | |||
Intel Corp. | 19,387 | 725,268 | |||
KLA Corp. | 887 | 283,024 | |||
MediaTek, Inc. | 4,096 | 89,912 | |||
Microchip Technology, Inc. | 5,258 | 305,385 | |||
Miraial Company, Ltd. | 1,900 | 24,768 | |||
Novatek Microelectronics Corp. | 6,684 | 68,004 | |||
NVIDIA Corp. | 921 | 139,614 | |||
NXP Semiconductors NV | 914 | 135,299 | |||
Qualcomm, Inc. | 2,863 | 365,720 | |||
Taiwan Semiconductor Manufacturing Company, Ltd. | 96,298 | 1,543,305 | |||
Texas Instruments, Inc. | 12,369 | 1,900,497 | |||
Tokyo Seimitsu Company, Ltd. | 745 | 24,557 | |||
Software 0.2% | |||||
Intuit, Inc. | 410 | 158,030 | |||
Trend Micro, Inc. | 3,023 | 147,889 | |||
Technology hardware, storage and peripherals 1.4% | |||||
Canon, Inc. | 10,755 | 243,723 | |||
Catcher Technology Company, Ltd. | 12,344 | 68,861 | |||
HP, Inc. | 13,893 | 455,413 | |||
Inventec Corp. | 712,575 | 602,491 | |||
Maxell, Ltd. | 4,180 | 40,817 | |||
Quadient SA | 2,652 | 45,170 | |||
Samsung Electronics Company, Ltd. | 11,016 | 485,887 | |||
Seagate Technology Holdings PLC | 1,096 | 78,298 | |||
Materials 3.9% | 5,667,833 | ||||
Chemicals 0.9% | |||||
BASF SE | 3,987 | 174,440 | |||
China BlueChemical, Ltd., H Shares | 77,426 | 22,277 |
15 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Materials (continued) | |||||
Chemicals (continued) | |||||
Dongyue Group, Ltd. | 41,234 | $51,727 | |||
International Flavors & Fragrances, Inc. | 1,060 | 126,267 | |||
Kumho Petrochemical Company, Ltd. | 153 | 16,456 | |||
LyondellBasell Industries NV, Class A | 3,284 | 287,219 | |||
PPG Industries, Inc. | 1,957 | 223,763 | |||
Shin-Etsu Chemical Company, Ltd. | 185 | 20,796 | |||
Yara International ASA | 8,885 | 372,290 | |||
Construction materials 0.2% | |||||
HeidelbergCement AG | 2,295 | 110,806 | |||
Holcim, Ltd. (A) | 2,933 | 125,795 | |||
Imerys SA | 1,251 | 38,294 | |||
Taiheiyo Cement Corp. | 3,250 | 48,425 | |||
Vicat SA | 1,116 | 30,887 | |||
Containers and packaging 0.1% | |||||
International Paper Company | 3,294 | 137,788 | |||
Nampak, Ltd. (A) | 44,955 | 6,128 | |||
Metals and mining 2.7% | |||||
African Rainbow Minerals, Ltd. | 7,694 | 101,496 | |||
Anglo American Platinum, Ltd. | 684 | 59,681 | |||
Anglo American PLC | 3,093 | 110,570 | |||
Barrick Gold Corp. | 5,457 | 96,490 | |||
BHP Group, Ltd. | 20,716 | 593,174 | |||
Boliden AB | 6,175 | 197,479 | |||
Centamin PLC | 38,343 | 36,658 | |||
Centerra Gold, Inc. | 5,656 | 38,360 | |||
Chubu Steel Plate Company, Ltd. | 1,257 | 8,167 | |||
Eldorado Gold Corp. (A) | 3,385 | 21,630 | |||
Endeavour Mining PLC | 2,848 | 58,920 | |||
Eregli Demir ve Celik Fabrikalari TAS | 52,973 | 86,160 | |||
Fortescue Metals Group, Ltd. | 11,387 | 136,926 | |||
Harmony Gold Mining Company, Ltd., ADR | 9,409 | 29,450 | |||
Impala Platinum Holdings, Ltd. | 16,184 | 179,552 | |||
Kinross Gold Corp. | 11,299 | 40,450 | |||
Kyoei Steel, Ltd. | 3,770 | 38,392 | |||
Maruichi Steel Tube, Ltd. | 2,860 | 60,584 | |||
Nakayama Steel Works, Ltd. | 5,340 | 16,819 | |||
Neturen Company, Ltd. | 3,740 | 18,026 | |||
Norsk Hydro ASA | 6,719 | 37,971 | |||
Nucor Corp. | 407 | 42,495 | |||
OceanaGold Corp. (A) | 19,634 | 37,676 | |||
Resolute Mining, Ltd. (A) | 32,168 | 4,999 | |||
Rio Tinto PLC | 23,515 | 1,405,882 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 16 |
Shares | Value | ||||
Materials (continued) | |||||
Metals and mining (continued) | |||||
Rio Tinto PLC, ADR | 1,011 | $61,671 | |||
Rio Tinto, Ltd. | 4,265 | 304,260 | |||
Yamato Kogyo Company, Ltd. | 911 | 30,107 | |||
Yodogawa Steel Works, Ltd. | 1,230 | 20,430 | |||
Real estate 4.1% | 5,895,376 | ||||
Equity real estate investment trusts 2.4% | |||||
Crown Castle International Corp. | 1,426 | 240,110 | |||
Digital Realty Trust, Inc. | 2,049 | 266,022 | |||
Extra Space Storage, Inc. | 210 | 35,725 | |||
Gaming and Leisure Properties, Inc. | 4,864 | 223,063 | |||
Iron Mountain, Inc. | 3,146 | 153,179 | |||
Land Securities Group PLC | 6,361 | 51,619 | |||
Medical Properties Trust, Inc. | 57,987 | 885,461 | |||
Public Storage | 887 | 277,338 | |||
Simon Property Group, Inc. | 1,406 | 133,458 | |||
Stockland | 139,748 | 348,921 | |||
The British Land Company PLC | 9,283 | 50,781 | |||
Vicinity Centres | 472,937 | 600,801 | |||
Vornado Realty Trust | 251 | 7,176 | |||
Welltower, Inc. | 1,035 | 85,232 | |||
WP Carey, Inc. | 1,284 | 106,392 | |||
Real estate management and development 1.7% | |||||
China Overseas Land & Investment, Ltd. | 225,397 | 716,980 | |||
China Resources Land, Ltd. | 143,784 | 674,244 | |||
CK Asset Holdings, Ltd. | 15,928 | 113,173 | |||
Country Garden Services Holdings Company, Ltd. | 2,492 | 11,184 | |||
Greentown China Holdings, Ltd. | 367,987 | 765,135 | |||
Mitsubishi Estate Company, Ltd. | 7,100 | 102,903 | |||
Powerlong Real Estate Holdings, Ltd. | 277,770 | 46,479 | |||
Utilities 9.6% | 13,924,163 | ||||
Electric utilities 5.7% | |||||
Alliant Energy Corp. | 98 | 5,744 | |||
American Electric Power Company, Inc. | 4,112 | 394,505 | |||
CEZ AS | 16,631 | 750,424 | |||
Duke Energy Corp. | 14,797 | 1,586,386 | |||
Edison International | 12,256 | 775,069 | |||
Endesa SA | 30,242 | 572,100 | |||
Entergy Corp. | 596 | 67,133 | |||
Exelon Corp. | 26,404 | 1,196,629 | |||
Fortum OYJ | 13,982 | 211,336 | |||
Iberdrola SA | 118,365 | 1,232,346 |
17 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Shares | Value | ||||
Utilities (continued) | |||||
Electric utilities (continued) | |||||
NextEra Energy, Inc. | 1,001 | $77,537 | |||
Red Electrica Corp. SA | 30,520 | 577,730 | |||
SSE PLC | 30,877 | 609,368 | |||
The Southern Company | 2,060 | 146,899 | |||
Gas utilities 0.9% | |||||
APA Group | 3,752 | 29,220 | |||
Enagas SA | 3,610 | 79,841 | |||
Kunlun Energy Company, Ltd. | 768,294 | 630,038 | |||
Snam SpA | 111,799 | 586,538 | |||
Multi-utilities 2.5% | |||||
Centrica PLC (A) | 40,527 | 39,576 | |||
Consolidated Edison, Inc. | 5,005 | 475,976 | |||
Dominion Energy, Inc. | 4,321 | 344,859 | |||
DTE Energy Company | 608 | 77,064 | |||
Engie SA | 12,527 | 145,050 | |||
National Grid PLC | 139,674 | 1,794,941 | |||
Sempra Energy | 1,538 | 231,115 | |||
Veolia Environnement SA | 22,982 | 563,364 | |||
Water utilities 0.5% | |||||
Cia de Saneamento Basico do Estado de Sao Paulo | 11,025 | 88,837 | |||
United Utilities Group PLC | 50,974 | 634,538 | |||
Preferred securities 0.4% | $537,331 | ||||
(Cost $647,000) | |||||
Consumer discretionary 0.0% | 40,546 | ||||
Automobiles 0.0% | |||||
Hyundai Motor Company, 2nd Preferred | 600 | 40,546 | |||
Consumer staples 0.1% | 78,341 | ||||
Household products 0.1% | |||||
Henkel AG & Company KGaA | 1,266 | 78,341 | |||
Energy 0.3% | 386,920 | ||||
Oil, gas and consumable fuels 0.3% | |||||
Petroleo Brasileiro SA | 72,500 | 386,920 | |||
Materials 0.0% | 31,524 | ||||
Chemicals 0.0% | |||||
Fuchs Petrolub SE | 531 | 14,672 | |||
LG Chem, Ltd. | 91 | 16,852 | |||
Exchange-traded funds 0.1% | $72,327 | ||||
(Cost $81,625) | |||||
iShares Core MSCI EAFE ETF | 1,229 | 72,327 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 18 |
Shares | Value | ||||
Closed-end funds 0.0% | $44,071 | ||||
(Cost $38,640) | |||||
Sprott Physical Uranium Trust (A) | 4,090 | 44,071 | |||
Other equity investments 0.0% | $0 | ||||
(Cost $240,553) | |||||
Allstar Co-Invest LLC (LLC Interest) (A)(C)(D) | 236,300 | 0 | |||
Rate (%) | Maturity date | Par value^ | Value | ||
Term loans (E) 0.0% | $306 | ||||
(Cost $323) | |||||
Financials 0.0% | 306 | ||||
Insurance 0.0% | |||||
HUB International, Ltd., 2018 Term Loan B (3 month LIBOR + 3.000%) | 4.214 | 04-25-25 | 323 | 306 | |
Par value^ | Value | ||||
Escrow certificates 0.0% | $0 | ||||
(Cost $194) | |||||
Texas Competitive Electric Holdings Company LLC (A)(C) | 500,000 | 0 | |||
Short-term investments 1.3% | $1,800,000 | ||||
(Cost $1,800,000) | |||||
Repurchase agreement 1.3% | 1,800,000 | ||||
Goldman Sachs Tri-Party Repurchase Agreement dated 6-30-22 at 1.500% to be repurchased at $1,800,075 on 7-1-22, collateralized by $1,833,737 Government National Mortgage Association, 4.000% due 4-20-52 (valued at $1,836,000) | 1,800,000 | 1,800,000 |
Total investments (Cost $153,119,912) 98.1% | $142,566,284 | ||||
Other assets and liabilities, net 1.9% | 2,829,973 | ||||
Total net assets 100.0% | $145,396,257 |
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 |
GDR | Global Depositary Receipt |
LIBOR | London Interbank Offered Rate |
NVDR | Non-Voting Depositary Receipt |
NYRS | New York Registry Shares |
(A) | Non-income producing security. |
(B) | 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. |
19 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
(C) | Security is valued using significant unobservable inputs and is classified as Level 3 in the fair value hierarchy. Refer to Note 2 to the financial statements. |
(D) | Restricted security as to resale, excluding 144A securities. For more information on this security refer to the Notes to financial statements. |
(E) | Term loans are variable rate obligations. The coupon rate shown represents the rate at period end. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 20 |
DERIVATIVES
FUTURES
Open contracts | Number of contracts | Position | Expiration date | Notional basis^ | Notional value^ | Unrealized appreciation (depreciation) |
S&P 500 E-Mini Index Futures | 15 | Long | Sep 2022 | $2,869,856 | $2,842,125 | $(27,731) |
Euro STOXX 50 Index Futures | 175 | Short | Sep 2022 | (6,448,814) | (6,310,494) | 138,320 |
FTSE 100 Index Futures | 53 | Short | Sep 2022 | (4,662,557) | (4,594,249) | 68,308 |
MSCI EAFE Index Futures | 94 | Short | Sep 2022 | (8,809,711) | (8,726,020) | 83,691 |
MSCI Emerging Markets Index Futures | 29 | Short | Sep 2022 | (1,492,567) | (1,453,915) | 38,652 |
TOPIX Index Futures | 10 | Short | Sep 2022 | (1,417,052) | (1,378,611) | 38,441 |
$339,681 |
^ Notional basis refers to the
contractual amount agreed upon at inception of open contracts; notional value represents the current value of the open contract.
FORWARD FOREIGN CURRENCY CONTRACTS
Contract to buy | Contract to sell | Counterparty (OTC) | Contractual settlement date | Unrealized appreciation | Unrealized depreciation | ||
USD | 3,210,069 | CAD | 4,030,000 | BNP | 9/21/2022 | $78,787 | — |
USD | 9,579,485 | EUR | 8,908,000 | BNP | 9/21/2022 | 192,394 | — |
USD | 7,227,924 | GBP | 5,774,000 | NWM | 9/21/2022 | 188,716 | — |
USD | 4,310,761 | JPY | 554,500,000 | SCB | 9/21/2022 | 201,599 | — |
$661,496 | $— |
Derivatives Currency Abbreviations | |
CAD | Canadian Dollar |
EUR | Euro |
GBP | Pound Sterling |
JPY | Japanese Yen |
USD | U.S. Dollar |
Derivatives Abbreviations | |
BNP | BNP Paribas |
NWM | NatWest Markets PLC |
OTC | Over-the-counter |
SCB | Standard Chartered Bank |
At 6-30-22, the aggregate cost of
investments for federal income tax purposes was $153,844,995. Net unrealized depreciation aggregated to $10,277,534, of which $6,350,535 related to gross unrealized appreciation and $16,628,069 related to gross
unrealized depreciation.
See Notes to financial statements
regarding investment transactions and other derivatives information.
21 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Financial statements
STATEMENT OF ASSETS AND
LIABILITIES 6-30-22 (unaudited)
Assets | |
Unaffiliated investments, at value (Cost $153,119,912) | $142,566,284 |
Unrealized appreciation on forward foreign currency contracts | 661,496 |
Receivable for futures variation margin | 250,708 |
Cash | 150,715 |
Foreign currency, at value (Cost $81,410) | 81,282 |
Collateral held at broker for futures contracts | 1,508,608 |
Dividends and interest receivable | 996,716 |
Receivable for investments sold | 105,034 |
Other assets | 18,196 |
Total assets | 146,339,039 |
Liabilities | |
Payable for collateral on OTC derivatives | 680,000 |
Payable for investments purchased | 163,547 |
Payable to affiliates | |
Accounting and legal services fees | 7,844 |
Trustees’ fees | 37 |
Other liabilities and accrued expenses | 91,354 |
Total liabilities | 942,782 |
Net assets | $145,396,257 |
Net assets consist of | |
Paid-in capital | $172,687,940 |
Total distributable earnings (loss) | (27,291,683) |
Net assets | $145,396,257 |
Net asset value per share | |
Based on 12,223,813 shares of beneficial interest outstanding - unlimited number of shares authorized with $0.01 par value | $11.89 |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK Hedged Equity & Income Fund | 22 |
STATEMENT OF OPERATIONS For the six months ended 6-30-22 (unaudited)
Investment income | |
Dividends | $5,223,150 |
Interest | 57,787 |
Non-cash dividends | 406,371 |
Other income | 251 |
Less foreign taxes withheld | (491,039) |
Total investment income | 5,196,520 |
Expenses | |
Investment management fees | 742,582 |
Accounting and legal services fees | 11,017 |
Transfer agent fees | 8,402 |
Trustees’ fees | 18,253 |
Custodian fees | 33,779 |
Printing and postage | 32,892 |
Professional fees | 37,346 |
Stock exchange listing fees | 11,781 |
Other | 9,836 |
Total expenses | 905,888 |
Less expense reductions | (6,540) |
Net expenses | 899,348 |
Net investment income | 4,297,172 |
Realized and unrealized gain (loss) | |
Net realized gain (loss) on | |
Unaffiliated investments and foreign currency transactions | 1,819,872 |
Futures contracts | 2,959,479 |
Forward foreign currency contracts | 1,245,824 |
6,025,175 | |
Change in net unrealized appreciation (depreciation) of | |
Unaffiliated investments and translation of assets and liabilities in foreign currencies | (18,743,617) |
Futures contracts | 796,494 |
Forward foreign currency contracts | 761,579 |
(17,185,544) | |
Net realized and unrealized loss | (11,160,369) |
Decrease in net assets from operations | $(6,863,197) |
23 | JOHN HANCOCK Hedged Equity & Income Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
STATEMENTS OF CHANGES IN NET
ASSETS
Six months ended 6-30-22 (unaudited) | Year ended 12-31-21 | |
Increase (decrease) in net assets | ||
From operations | ||
Net investment income | $4,297,172 | $6,430,890 |
Net realized gain | 6,025,175 | 7,901,981 |
Change in net unrealized appreciation (depreciation) | (17,185,544) | 3,203,344 |
Increase (decrease) in net assets resulting from operations | (6,863,197) | 17,536,215 |
Distributions to shareholders | ||
From earnings | (7,089,812)1 | (7,598,557) |
From tax return of capital | — | (6,581,066) |
Total distributions | (7,089,812) | (14,179,623) |
Total increase (decrease) | (13,953,009) | 3,356,592 |
Net assets | ||
Beginning of period | 159,349,266 | 155,992,674 |
End of period | $145,396,257 | $159,349,266 |
Share activity | ||
Shares outstanding | ||
Beginning of period | 12,223,813 | 12,223,813 |
End of period | 12,223,813 | 12,223,813 |
1 | A portion of the distributions may be deemed a tax return of capital at the fiscal year end. |
SEE NOTES TO FINANCIAL STATEMENTS | SEMIANNUAL REPORT | JOHN HANCOCK Hedged Equity & Income Fund | 24 |
Financial highlights
Period ended | 6-30-221 | 12-31-21 | 12-31-20 | 12-31-19 | 12-31-18 | 12-31-17 |
Per share operating performance | ||||||
Net asset value, beginning of period | $13.04 | $12.76 | $14.85 | $14.46 | $17.64 | $16.84 |
Net investment income2 | 0.35 | 0.53 | 0.39 | 0.59 | 0.63 | 0.52 |
Net realized and unrealized gain (loss) on investments | (0.92) | 0.91 | (1.15) | 1.30 | (2.31) | 1.94 |
Total from investment operations | (0.57) | 1.44 | (0.76) | 1.89 | (1.68) | 2.46 |
Less distributions | ||||||
From net investment income | (0.58)3 | (0.62) | (0.42) | (0.67) | (0.86) | (0.49) |
From net realized gain | — | — | — | — | (0.39) | (1.17) |
From tax return of capital | — | (0.54) | (0.91) | (0.83) | (0.25) | — |
Total distributions | (0.58) | (1.16) | (1.33) | (1.50) | (1.50) | (1.66) |
Net asset value, end of period | $11.89 | $13.04 | $12.76 | $14.85 | $14.46 | $17.64 |
Per share market value, end of period | $11.77 | $13.00 | $11.44 | $14.91 | $13.08 | $17.41 |
Total return at net asset value (%)4,5 | (4.58)6 | 11.69 | (2.99) | 13.89 | (9.61) | 15.15 |
Total return at market value (%)4 | (5.25)6 | 24.20 | (13.37) | 26.41 | (17.16) | 21.74 |
Ratios and supplemental data | ||||||
Net assets, end of period (in millions) | $145 | $159 | $156 | $182 | $177 | $215 |
Ratios (as a percentage of average net assets): | ||||||
Expenses before reductions | 1.167 | 1.17 | 1.18 | 1.15 | 1.14 | 1.13 |
Expenses including reductions | 1.157 | 1.16 | 1.18 | 1.14 | 1.13 | 1.13 |
Net investment income | 5.507 | 3.98 | 3.14 | 3.97 | 3.83 | 2.99 |
Portfolio turnover (%) | 79 | 120 | 117 | 125 | 96 | 93 |
1 | Six months ended 6-30-22. Unaudited. |
2 | Based on average daily shares outstanding. |
3 | A portion of the distributions may be deemed a tax return of capital at the fiscal year end. |
4 | 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. |
5 | Total returns would have been lower had certain expenses not been reduced during the applicable periods. |
6 | Not annualized. |
7 | Annualized. |
25 | JOHN HANCOCK Hedged Equity & Income Fund | SEMIANNUAL REPORT | SEE NOTES TO FINANCIAL STATEMENTS |
Notes to financial statements (unaudited)
Note 1—Organization
John Hancock Hedged Equity &
Income Fund (the fund) is a closed-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the 1940 Act).
Note 2—Significant accounting policies
The financial statements have been
prepared in conformity with accounting principles generally accepted in the United States of America (US GAAP), which require management to make certain estimates and assumptions as of the date of the financial
statements. Actual results could differ from those estimates and those differences could be significant. The fund qualifies as an investment company under Topic 946 of Accounting Standards Codification of US GAAP.
Events or transactions occurring
after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting
policies of the fund:
Security valuation. Investments are stated at value as of the scheduled close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. In case of emergency or other
disruption resulting in the NYSE not opening for trading or the NYSE closing at a time other than the regularly scheduled close, the net asset value (NAV) may be determined as of the regularly scheduled close of the
NYSE pursuant to the fund’s Valuation Policies and Procedures.
In order to value the securities,
the fund uses the following valuation techniques: Equity securities, 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. 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. Futures contracts whose settlement prices are determined as of the
close of the NYSE are typically valued based on the settlement price while other futures contracts are typically valued at the last traded price on the exchange on which they trade. Foreign equity index futures that
trade in the electronic trading market subsequent to the close of regular trading may be valued at the last traded price in the electronic trading market as of 4:00 P.M. ET, or may be fair valued based on fair value
adjustment factors provided by an independent pricing vendor in order to adjust for events that may occur between the close of foreign exchanges or markets and the close of the NYSE. Forward foreign currency contracts
are valued at the prevailing forward rates which are based on foreign currency exchange spot rates and forward points supplied by 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 may determine to value equity securities using prices obtained from another exchange or market if trading on the exchange or market on which prices are typically obtained did not open for trading as
scheduled, or if trading closed earlier than scheduled, and trading occurred as normal on another exchange or market.
Other portfolio securities and
assets, for which reliable market quotations are not readily available, are valued at fair value as determined in good faith by the fund’s Pricing Committee following procedures established by the Board of
Trustees. The frequency with which these fair valuation procedures are used cannot be predicted and fair value of securities may differ significantly from the value that would have been used had a ready market for
such securities existed. Trading in foreign securities may be completed before the scheduled daily close of trading on the NYSE. Significant events at the issuer or market level may affect the values of securities
between the time when the valuation of the securities is generally determined and the close of the NYSE. If a significant event occurs,
SEMIANNUAL REPORT | JOHN HANCOCK Hedged Equity & Income Fund | 26 |
these securities may be fair valued, as determined
in good faith by the fund’s Pricing Committee, following procedures established by the Board of Trustees. The fund uses fair value adjustment factors provided by an independent pricing vendor to value certain
foreign securities in order to adjust for events that may occur between the close of foreign exchanges or markets and the close of the NYSE.
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 fund’s own assumptions in determining the fair value of investments. Factors used in
determining value may include market or issuer specific events or trends, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the
risks associated with investing in those securities. Changes in valuation techniques and related inputs may result in transfers into or out of an assigned level within the disclosure hierarchy.
The following is a summary of the
values by input classification of the fund’s investments as of June 30, 2022, by major security category or type:
Total value at 6-30-22 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
Investments in securities: | ||||
Assets | ||||
Common stocks | ||||
Communication services | $9,835,387 | $3,979,578 | $5,855,809 | — |
Consumer discretionary | 10,210,318 | 2,727,529 | 7,482,789 | — |
Consumer staples | 11,839,509 | 9,127,690 | 2,711,819 | — |
Energy | 7,446,183 | 4,261,081 | 3,185,102 | — |
Financials | 27,481,215 | 12,514,951 | 14,964,581 | $1,683 |
Health care | 19,810,644 | 15,335,205 | 4,475,439 | — |
Industrials | 13,392,005 | 5,915,450 | 7,476,555 | — |
Information technology | 14,609,616 | 9,359,704 | 5,249,912 | — |
Materials | 5,667,833 | 1,202,179 | 4,465,654 | — |
Real estate | 5,895,376 | 2,413,156 | 3,482,220 | — |
Utilities | 13,924,163 | 5,467,753 | 8,456,410 | — |
Preferred securities | ||||
Consumer discretionary | 40,546 | — | 40,546 | — |
Consumer staples | 78,341 | — | 78,341 | — |
Energy | 386,920 | 386,920 | — | — |
Materials | 31,524 | — | 31,524 | — |
Exchange-traded funds | 72,327 | 72,327 | — | — |
Closed-end funds | 44,071 | 44,071 | — | — |
Term loans | 306 | — | 306 | — |
Short-term investments | 1,800,000 | — | 1,800,000 | — |
Total investments in securities | $142,566,284 | $72,807,594 | $69,757,007 | $1,683 |
27 | JOHN HANCOCK Hedged Equity & Income Fund | SEMIANNUAL REPORT |
Total value at 6-30-22 | Level 1 quoted price | Level 2 significant observable inputs | Level 3 significant unobservable inputs | |
Derivatives: | ||||
Assets | ||||
Futures | $367,412 | $367,412 | — | — |
Forward foreign currency contracts | 661,496 | — | $661,496 | — |
Liabilities | ||||
Futures | (27,731) | (27,731) | — | — |
Level 3 includes securities valued at $0. Refer to Fund’s investments. |
Repurchase agreements. The fund may enter into repurchase agreements. When the fund enters into a repurchase agreement, it receives collateral that is held in a segregated account by the fund’s custodian,
or for tri-party repurchase agreements, collateral is held at a third-party custodian bank in a segregated account for the benefit of the fund. The collateral amount is marked-to-market and monitored on a daily basis
to ensure that the collateral held is in an amount not less than the principal amount of the repurchase agreement plus any accrued interest. Collateral received by the fund for repurchase agreements is disclosed in
the Fund’s investments as part of the caption related to the repurchase agreement.
Repurchase agreements are typically
governed by the terms and conditions of the Master Repurchase Agreement and/or Global Master Repurchase Agreement (collectively, MRA). Upon an event of default, the non-defaulting party may close out all transactions
traded under the MRA and net amounts owed. Absent an event of default, assets and liabilities resulting from repurchase agreements are not offset in the Statement of assets and liabilities. In the event of a default
by the counterparty, realization of the collateral proceeds could be delayed, during which time the collateral value may decline or the counterparty may have insufficient assets to pay claims resulting from close-out
of the transactions.
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.
SEMIANNUAL REPORT | JOHN HANCOCK Hedged Equity & Income Fund | 28 |
Funds that invest internationally
generally carry more risk than funds that invest strictly in U.S. securities. These risks are heightened for investments in emerging markets. 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.
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.
For federal income tax purposes, as
of December 31, 2021, the fund has a short-term capital loss carryforward of $8,088,419 and a long-term capital loss carryforward of $12,580,512 available to offset future net realized capital gains. These
carryforwards do not expire.
As of December 31, 2021, 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 (Plan). Under the current Plan, the fund makes quarterly distributions of an amount equal to $0.2900 per share, which will be paid
quarterly 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 quarterly pursuant to
the Managed Distribution Plan described above. Capital gain distributions, if any, are typically distributed annually.
29 | JOHN HANCOCK Hedged Equity & Income Fund | SEMIANNUAL REPORT |
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 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 foreign currency transactions, investments in passive foreign investment companies, derivative transactions, partnerships and wash sale loss deferrals.
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.
Derivatives which are typically
traded through the OTC market are regulated by the Commodity Futures Trading Commission (the CFTC). Derivative counterparty risk is managed through an ongoing evaluation of the creditworthiness of all potential
counterparties and, if applicable, designated clearing organizations. The fund attempts to reduce its exposure to counterparty risk for derivatives traded in the OTC market, whenever possible, by entering into an
International Swaps and Derivatives Association (ISDA) Master Agreement with each of its OTC counterparties. The ISDA gives each party to the agreement the right to terminate all transactions traded under the
agreement if there is certain deterioration in the credit quality or contractual default of the other party, as defined in the ISDA. Upon an event of default or a termination of the ISDA, the non-defaulting party has
the right to close out all transactions and to net amounts owed.
As defined by the ISDA, the fund may
have collateral agreements with certain counterparties to mitigate counterparty risk on OTC derivatives. Subject to established minimum levels, collateral for OTC transactions is generally determined based on the net
aggregate unrealized gain or loss on contracts with a particular counterparty. Collateral pledged to the fund, if any, is held in a segregated account by a third-party agent or held by the custodian bank for the
benefit of the fund and can be in the form of cash or debt securities issued by the U.S. government or related agencies; collateral posted by the fund, if any, for OTC transactions is held in a segregated account at
the fund’s custodian and is noted in the accompanying Fund’s investments, or if cash is posted, on the Statement of assets and liabilities. The fund’s risk of loss due to counterparty risk is equal
to the asset value of outstanding contracts offset by collateral received.
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.
Futures. A futures contract is a contractual agreement to buy or sell a particular currency or financial instrument at a pre-determined price in the future. Futures are traded on an exchange and
cleared through a central clearinghouse. Risks related to the use of futures contracts include possible illiquidity of the futures markets and contract prices that can be highly volatile and imperfectly correlated to
movements in the underlying financial instrument and potential losses in excess of the amounts recognized on the Statement of assets and liabilities. Use
SEMIANNUAL REPORT | JOHN HANCOCK Hedged Equity & Income Fund | 30 |
of long futures contracts subjects the fund to the
risk of loss up to the notional value of the futures contracts. Use of short futures contracts subjects the fund to unlimited risk of loss.
Upon entering into a futures
contract, the fund is required to deposit initial margin with the broker in the form of cash or securities. The amount of required margin is set by the broker and is generally based on a percentage of the contract
value. The margin deposit must then be maintained at the established level over the life of the contract. Cash that has been pledged by the fund, if any, is detailed in the Statement of assets and liabilities as
Collateral held at broker for futures contracts. Securities pledged by the fund, if any, are identified in the Fund’s investments. Subsequent payments, referred to as variation margin, are made or received by
the fund periodically and are based on changes in the market value of open futures contracts. Futures contracts are marked-to-market daily and unrealized gain or loss is recorded by the fund. Receivable for futures
variation margin is included on the Statement of assets and liabilities. When the contract is closed, the fund records a realized gain or loss equal to the difference between the value of the contract at the time it
was opened and the value at the time it was closed.
During the six months ended June 30,
2022, the fund used futures contracts to manage against changes in certain securities markets. The fund held futures contracts with USD notional values ranging from $19.6 million to $25.4 million as measured at each
quarter end.
Forward foreign currency
contracts. A forward foreign currency contract is an agreement between two parties to buy and sell specific currencies at a price that is set on the date of the contract. The forward contract calls
for delivery of the currencies on a future date that is specified in the contract. Forwards are typically traded OTC. Risks related to the use of forwards include the possible failure of counterparties to meet the
terms of the forward agreement, the failure of the counterparties to timely post collateral if applicable, and the risk that currency movements will not favor the fund thereby reducing the fund’s total return,
and the potential for losses in excess of the amounts recognized on the Statement of assets and liabilities.
The market value of a forward
foreign currency contract fluctuates with changes in foreign currency exchange rates. Forward foreign currency contracts are marked-to-market daily and the change in value is recorded by the fund as an unrealized gain
or loss. Realized gains or losses, equal to the difference between the value of the contract at the time it was opened and the value at the time it was closed, are recorded upon delivery or receipt of the currency or
settlement with the counterparty.
During the six months ended June 30,
2022, the fund used forward foreign currency contracts to manage against changes in foreign currency exchange rates and to gain exposure to foreign currencies. The fund held forward foreign currency contracts with USD
notional values ranging from $14.9 million to $24.3 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 June 30, 2022 by risk category:
Risk | Statement of assets and liabilities location | Financial instruments location | Assets derivatives fair value | Liabilities derivatives fair value |
Equity | Receivable/payable for futures variation margin1 | Futures | $367,412 | $(27,731) |
Currency | Unrealized appreciation (depreciation) on forward foreign currency contracts | Forward foreign currency contracts | 661,496 | — |
$1,028,908 | $(27,731) |
1 | Reflects cumulative appreciation/depreciation on open futures as disclosed in the Derivatives section of Fund’s investments. Only the period end variation margin receivable/payable is separately reported on the Statement of assets and liabilities. |
31 | JOHN HANCOCK Hedged Equity & Income Fund | SEMIANNUAL REPORT |
For financial reporting purposes,
the fund does not offset OTC derivative assets or liabilities that are subject to master netting arrangements, as defined by the ISDAs, in the Statement of assets and liabilities. In the event of default by the
counterparty or a termination of the agreement, the ISDA allows an offset of amounts across the various transactions between the fund and the applicable counterparty.
Effect of derivative instruments on
the Statement of operations
The table below summarizes the net
realized gain (loss) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the six months ended June 30, 2022:
Statement of operations location - Net realized gain (loss) on: | |||
Risk | Futures contracts | Forward foreign currency contracts | Total |
Currency | — | $1,245,824 | $1,245,824 |
Equity | $2,959,479 | — | 2,959,479 |
Total | $2,959,479 | $1,245,824 | $4,205,303 |
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 June 30, 2022:
Statement of operations location - Change in net unrealized appreciation (depreciation) of: | |||
Risk | Futures contracts | Forward foreign currency contracts | Total |
Currency | — | $761,579 | $761,579 |
Equity | $796,494 | — | 796,494 |
Total | $796,494 | $761,579 | $1,558,073 |
Note 4—Guarantees and indemnifications
Under the fund’s
organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund
enters into contracts with service providers that contain general indemnification clauses. The fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made
against the fund that have not yet occurred. The risk of material loss from such claims is considered remote.
Note 5—Fees and transactions with affiliates
John Hancock 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 0.95% of the
fund’s average daily gross assets. The Advisor has a subadvisory agreement with Wellington Management Company LLP. The fund is not responsible for payment of the subadvisory fees.
The Advisor has contractually agreed
to waive a portion of its management fee and/or reimburse expenses for certain funds of the John Hancock group of funds complex, including the fund (the participating portfolios). This waiver is based upon aggregate
net assets of all the participating portfolios. The amount of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each
SEMIANNUAL REPORT | JOHN HANCOCK Hedged Equity & Income Fund | 32 |
fund. During the six months ended June 30, 2022,
this waiver amounted to 0.01% of the fund’s average daily net assets, on an annualized basis. This arrangement expires on July 31, 2024, 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 $6,540 for the six months ended June 30, 2022.
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 June 30, 2022, were equivalent to a net annual effective rate of 0.94% of the fund’s average daily
managed net 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 June 30, 2022, 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 6, 2011, 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, 2022 and December 31, 2022 up to 10% of its outstanding common shares as of December 31, 2021. The share repurchase plan will remain in effect between January 1, 2022 and December 31, 2022.
During the six months ended June 30,
2022 and the year ended December 31, 2021, 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.
Note 7—Purchase and sale of securities
Purchases and sales of securities,
other than short-term investments, amounted to $122,241,383 and $119,829,519, respectively, for the six months ended June 30, 2022.
Note 8—Restricted securities
The fund may hold restricted
securities which are restricted as to resale and the fund has limited rights to registration under the Securities Act of 1933. Disposal may involve time-consuming negotiations and expenses, and prompt sale at an
acceptable price may be difficult to achieve. The following table summarizes the restricted securities held at June 30, 2022:
Issuer, Description | Original acquisition date | Acquisition cost | Beginning share amount | Shares purchased | Shares sold | Ending share amount | Value as a percentage of net assets | Ending value |
Allstar Co-Invest LLC (LLC Interest) | 8-1-11 | $240,553 | 236,300 | — | — | 236,300 | 0.0% | $0 |
33 | JOHN HANCOCK Hedged Equity & Income Fund | SEMIANNUAL REPORT |
Note 9—Coronavirus (COVID-19) pandemic
The COVID-19 disease has resulted in
significant disruptions to global business activity. 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.
Note 10—New accounting pronouncement
In March 2020, the Financial
Accounting Standards Board (FASB) issued an Accounting Standards Update (ASU), ASU 2020-04, which provides optional, temporary relief with respect to the financial reporting of contracts subject to certain types of
modifications due to the planned discontinuation of the LIBOR and other IBOR-based reference rates as of the end of 2021. 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, 2022. Management expects that the adoption of the guidance will not have a material impact to the financial statements.
SEMIANNUAL REPORT | JOHN HANCOCK Hedged Equity & Income Fund | 34 |
Investment objective, principal
investment strategies, and principal risks
Unaudited
Investment Objectives
The Fund’s investment
objective is to provide total return with a focus on current income and gains and also consisting of long-term capital appreciation.
Principal Investment Strategies
Under normal circumstances, the Fund
will invest at least 80% of its net assets (assets plus borrowings for investment purposes) in equity and equity-related securities, including common stock, preferred stock, depositary receipts (including American
Depositary Receipts and Global Depositary Receipts), index-related securities (including exchange traded funds (“ETFs”), options on equity securities and equity indexes, real estate investment structures
(including real estate investment trusts (“REITs”)), convertible securities, private placements, convertible preferred stock, rights, warrants, derivatives linked to equity securities or indexes and other
similar equity equivalents. The Fund may invest in listed and unlisted domestic and foreign equity and equity-related securities or instruments. These equity and equity-related instruments may include equity
securities of, or derivatives linked to, foreign issuers and indexes (including emerging market issuers or indexes). The Fund may invest in foreign issuers and foreign-currency securities without any limitation. The
Fund will notify shareholders at least 60 days prior to any change in this 80% policy.
The Fund uses an equity strategy
(the “Equity Strategy”) and an actively managed option overlay strategy (the “Option Strategy”) to pursue its investment objective. By combining these two strategies, the Fund seeks to provide
investors with a portfolio that will generate attractive long-term total returns with significant downside equity market protection.
The Equity Strategy will seek to
provide broad-based exposure to equity markets, while emphasizing downside equity market protection. The goal of the Equity Strategy is a broadly diversified equity portfolio that is generally fully invested and seeks
value across all market capitalization ranges, industries and sectors that seeks to participate in and capture the broader equity market returns in rising market conditions, while limiting losses relative to the
broader equity markets in declining market circumstances through an effective combination of equity investment strategies.
The Option Strategy will pursue two
goals: (i) to generate earnings for current distribution from option premiums; and (ii) downside equity market protection (through the use of U.S. equity index put options). The Option Strategy will seek to enhance
risk-adjusted returns, generate earnings from option premiums and reduce overall portfolio volatility. The Fund expects to write index call options on a substantial portion of the Fund’s common stock portfolio,
although this amount is expected to vary over time based upon U.S. equity market conditions and other factors, including the Advisor’s and Subadvisor’s assessment of market conditions and the liquidity
needs of the Fund to meet quarterly distributions.
The Fund anticipates writing index
call options on the S&P 500 Index (the “S&P 500”) with a typical expiration of approximately one month and with call strikes typically set slightly “out-of-the-money” (ranging from
approximately 0%-7% above the then-current value of the index). The Fund typically will limit notional exposure of the index call options from 0%-50% of the value of the Fund’s portfolio securities. In certain
circumstances or market conditions (including to meet distribution payments), the Subadvisor may write index call options on a lower percentage of the Fund’s portfolio.
The Option Strategy typically will
maintain an overall short position on the S&P 500 through its use of index call options. In certain circumstances, the Fund may trade out of its index option positions during an intra-month period to lock in a
gain, to limit risk, or to meet distribution payments. The Subadvisor retains the discretion to write call options on indices other than the S&P 500 if it deems this appropriate in particular market circumstances
or based upon the Fund’s stock holdings. A meaningful portion of the Fund’s stock holdings will normally consist
35 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT |
of stocks not included in the indices on which it
writes call options. The Fund expects to primarily use listed/exchange-traded options contracts but may also use over-the-counter (“OTC”) options. OTC options may be utilized to obtain exposure to specific
strike prices, expiration dates and/or exposure to underlying indices not available in the exchange-traded options market. The Fund may also invest in derivatives such as futures contracts and foreign currency forward
contracts.
The Fund may also invest up to 20%
of its net assets (plus borrowings for investment purposes) in fixed-income securities and fixed-income related instruments. These fixed-income securities may include non-investment grade (“high yield” or
“junk bond”) instruments.”
The manager 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 December 31, 2021, the fund’s aggregate distributions included a return of capital of $0.54 per share, or 46.41% of aggregate
distributions, which could impact the tax treatment of a subsequent sale of fund shares.
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. A downgrade or default affecting any of the fund’s securities could affect the fund’s performance.
Economic and market events risk. Events in the U.S. and global financial markets, including actions taken by the U.S. Federal Reserve or foreign central banks to stimulate or stabilize economic growth, may at times result
in unusually high market volatility, which could negatively impact performance. Reduced liquidity in credit and fixed-income markets could adversely affect issuers worldwide. Banks and financial services companies
could suffer losses if interest rates rise or economic conditions deteriorate.
A widespread health crisis such as a
global pandemic could cause substantial market volatility, exchange trading suspensions and closures, and 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. 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 preexisting political, social, and economic risks. Any such impact could adversely affect the fund’s performance, resulting in losses to your investment.
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.
SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 36 |
ESG integration risk. The manager may consider ESG factors that it deems relevant or additive, along with other material factors and analysis, when managing the fund. The portion of the Fund’s investments
for which the manager considers these ESG factors may vary, and could increase or decrease over time. ESG factors may include, but are not limited to, matters regarding board diversity, climate change policies, and
supply chain and human rights policies. The ESG characteristics utilized in the fund’s investment process may change over time, and different ESG characteristics may be relevant to different investments.
Incorporating ESG criteria and making investment decisions based on certain ESG characteristics, as determined by the Advisor, carries the risk that the fund may perform differently, including underperforming funds
that do not utilize ESG criteria or an ESG investment strategy.
Exchange-traded funds (ETFs)
risk. The risks of owning shares of an ETF include the risks of owning the underlying securities the ETF holds. Lack of liquidity in an ETF could result in the ETF being more volatile than its
underlying securities. An ETF’s shares could trade at a significant premium or discount to its NAV. A fund bears ETF fees and expenses indirectly.
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. Increases in
real interest rates generally cause the price of inflation-protected debt securities to decrease 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. The risks of investing in foreign securities are magnified in emerging markets. 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:
foreign currency forward contracts, futures contracts and options. Foreign currency forward contracts, futures contracts and options generally are subject to counterparty risk. Derivatives associated with foreign
currency transactions are subject to currency risk.
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.
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.
LIBOR discontinuation risk. The publication of the London Interbank Offered Rate (LIBOR), which many debt securities, derivatives and other financial instruments use as the reference or benchmark rate for interest
rate calculations, was discontinued for certain maturities as of December 31, 2021, and is expected to be discontinued on June 30, 2023 for the remaining maturities. The transition process away from LIBOR may lead to
increased volatility and illiquidity in markets that currently rely on LIBOR to determine interest rates, and the eventual use of
37 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT |
an alternative reference rate may adversely affect
the fund’s performance. In addition, the usefulness of LIBOR may deteriorate in the period leading up to its discontinuation, which could adversely affect the liquidity or market value of securities that use
LIBOR.
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.
Operational and cybersecurity
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.
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.
Real estate securities risk. Securities of companies in the real estate industry 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.
SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 38 |
ADDITIONAL INFORMATION
Unaudited
The fund is a closed-end,
diversified management investment company, common shares of which were initially offered to the public on May 26, 2011 and are publicly traded on the New York Stock Exchange (the NYSE).
Dividends and distributions
During the six months ended June 30,
2022, distributions from net investment income totaling $0.5800 per share were paid to shareholders. The dates of payments and the amounts per share were as follows:
Payment Date | Income Distributions1 |
March 31, 2022 | $0.2900 |
June 30, 2022 | 0.2900 |
Total | $0.5800 |
1A portion of the distributions may be deemed a tax return of capital at the fiscal year end. |
Dividend reinvestment plan
The fund’s Dividend
Reinvestment Plan (the Plan) provides that distributions of dividends and capital gains are automatically reinvested in common shares of the fund by Computershare Trust Company, N.A. (the Plan Agent). Every
shareholder holding at least one full share of the fund is entitled to participate in the Plan. In addition, every shareholder who became a shareholder of the fund after June 30, 2011, and holds at least one full
share of the fund will be automatically enrolled in the Plan. Shareholders may withdraw from the Plan at any time and shareholders who do not participate in the Plan will receive all distributions in cash.
If the fund declares a dividend or
distribution payable either in cash or in common shares of the fund and the market price of shares on the payment date for the distribution or dividend equals or exceeds the fund’s net asset value per share
(NAV), the fund will issue common shares to participants at a value equal to the higher of NAV or 95% of the market price. The number of additional shares to be credited to each participant’s account will be
determined by dividing the dollar amount of the distribution or dividend by the higher of NAV or 95% of the market price. If the market price is lower than NAV, or if dividends or distributions are payable only in
cash, then participants will receive shares purchased by the Plan Agent on participants’ behalf on the NYSE or otherwise on the open market. If the market price exceeds NAV before the Plan Agent has completed
its purchases, the average per share purchase price may exceed NAV, resulting in fewer shares being acquired than if the fund had issued new shares.
There are no brokerage charges with
respect to common shares issued directly by the fund. However, whenever shares are purchased or sold on the NYSE or otherwise on the open market, each participant will pay a pro rata portion of brokerage trading fees,
currently $0.05 per share purchased or sold. Brokerage trading fees will be deducted from amounts to be invested.
The reinvestment of dividends and
net capital gains distributions does not relieve participants of any income tax that may be payable on such dividends or distributions.
Shareholders participating in the
Plan may buy additional shares of the fund through the Plan at any time in amounts of at least $50 per investment, up to a maximum of $10,000, with a total calendar year limit of $100,000. Shareholders will be charged
a $5 transaction fee plus $0.05 per share brokerage trading fee for each order. Purchases of additional shares of the fund will be made on the open market. Shareholders who elect to utilize monthly electronic fund
transfers to buy additional shares of the fund will be charged a $2 transaction fee plus $0.05 per share brokerage trading fee for each automatic purchase. Shareholders can also sell fund shares held in the Plan
account at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agent’s website at www.computershare.com/investor. The Plan Agent will mail a check (less applicable brokerage
39 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT |
trading fees) on settlement date. Pursuant to
regulatory changes, effective September 5, 2017, the settlement date is changed from three business days after the shares have been sold to two business days after the shares have been sold. If shareholders choose to
sell shares through their stockbroker, they will need to request that the Plan Agent electronically transfer those shares to their stockbroker through the Direct Registration System.
Shareholders participating in the
Plan may withdraw from the Plan at any time by contacting the Plan Agent by telephone, in writing or by visiting the Plan Agent’s website at www.computershare.com/investor. Such termination will be effective
immediately if the notice is received by the Plan Agent prior to any dividend or distribution record date; otherwise, such termination will be effective on the first trading day after the payment date for such
dividend or distribution, with respect to any subsequent dividend or distribution. If shareholders withdraw from the Plan, their shares will be credited to their account; or, if they wish, the Plan Agent will sell
their full and fractional shares and send the shareholders the proceeds, less a transaction fee of $5 and less brokerage trading fees of $0.05 per share. If a shareholder does not maintain at least one whole share of
common stock in the Plan account, the Plan Agent may terminate such shareholder’s participation in the Plan after written notice. Upon termination, shareholders will be sent a check for the cash value of any
fractional share in the Plan account, less any applicable broker commissions and taxes.
Shareholders who hold at least one
full share of the fund may join the Plan by notifying the Plan Agent by telephone, in writing or by visiting the Plan Agent’s website at www.computershare.com/investor. If received in proper form by the Plan
Agent before the record date of a dividend, the election will be effective with respect to all dividends paid after such record date. If shareholders wish to participate in the Plan and their shares are held in the
name of a brokerage firm, bank or other nominee, shareholders should contact their nominee to see if it will participate in the Plan. If shareholders wish to participate in the Plan, but their brokerage firm, bank or
other nominee is unable to participate on their behalf, they will need to request that their shares be re-registered in their own name, or they will not be able to participate. The Plan Agent will administer the Plan
on the basis of the number of shares certified from time to time by shareholders as representing the total amount registered in their name and held for their account by their nominee.
Experience under the Plan may
indicate that changes are desirable. Accordingly, the fund and the Plan Agent reserve the right to amend or terminate the Plan. Participants generally will receive written notice at least 90 days before the effective
date of any amendment. In the case of termination, participants will receive written notice at least 90 days before the record date for the payment of any dividend or distribution by the fund.
All correspondence or requests for
additional information about the Plan should be directed to Computershare Trust Company, N.A., at the address stated below, or by calling 800-852-0218, 201-680-6578 (For International Telephone Inquiries) and
800-952-9245 (For the Hearing Impaired (TDD)).
Shareholder communication and
assistance
If you have any questions concerning
the fund, we will be pleased to assist you. If you hold shares in your own name and not with a brokerage firm, please address all notices, correspondence, questions or other communications regarding the fund to the
transfer agent at:
Regular Mail:
Computershare
P.O. Box 505000
Louisville, KY 40233
Computershare
P.O. Box 505000
Louisville, KY 40233
Registered or Overnight Mail:
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
Computershare
462 South 4th Street, Suite 1600
Louisville, KY 40202
If your shares are held with a
brokerage firm, you should contact that firm, bank or other nominee for assistance.
SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 40 |
SHAREHOLDER MEETING
The fund held its Annual Meeting
of Shareholders on Monday, February 14, 2022. The following proposal was considered by the shareholders:
THE PROPOSAL PASSED ON FEBRUARY 14,
2022
For a term to expire in 2025:
Proposal: To elect three (3) Trustees (Andrew G. Arnott, Deborah C. Jackson, and Steven R. Pruchansky) to serve for a three-year term ending at the 2025 Annual Meeting of Shareholders.
Total votes for the nominee | Total votes withheld from the nominee | |
Independent Trustees | ||
Deborah C. Jackson | 9,651,086.000 | 217,669.000 |
Steven R. Pruchansky | 9,637,133.000 | 231,622.000 |
Non-Independent Trustee | ||
Andrew G. Arnott | 9,638,708.000 | 230,047.000 |
Trustees whose term of office
continued after the Annual Meeting of Shareholders because they were not up for election are: James R. Boyle, Peter S. Burgess. William H. Cunningham, Grace K. Fey, Marianne Harrison, Hassell H. McClellan, Frances G.
Rathke, and Gregory A. Russo.
41 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT |
EVALUATION OF ADVISORY AND
SUBADVISORY AGREEMENTS BY THE BOARD OF TRUSTEES
This section describes the
evaluation by the Board of Trustees (the Board) of John Hancock Hedged Equity & Income Fund (the fund) of the Advisory Agreement (the Advisory Agreement) with John Hancock Investment Management LLC (the Advisor)
and the Subadvisory Agreement (the Subadvisory Agreement) with Wellington Management Company LLP (the Subadvisor). The Advisory Agreement and Subadvisory Agreement are collectively referred to as the Agreements. Prior
to the June 21-23, 2022 videoconferece1 meeting at which the Agreements were approved, the Board also discussed and considered information regarding the proposed continuation of the
Agreements at the videoconference meeting held on May 24-25, 2022. The Trustees who are not "interested persons" of the Trust as defined by the Investment Company Act of 1940, as amended (the "1940 Act") (the
"Independent Trustees") also met separately to evaluate and discuss the information presented, including with counsel to the Independent Trustees and a third-party consulting firm.
Approval of Advisory and Subadvisory
Agreements
At videoconference meetings held on
June 21-23, 2022, the Board, including the Trustees who are not parties to any Agreement or considered to be interested persons of the fund under the 1940 Act, reapproved for an annual period the continuation of the
Advisory Agreement between the fund and the Advisor and the Subadvisory Agreement between the Advisor and the Subadvisor with respect to the fund.
In considering the Advisory
Agreement and the Subadvisory Agreement, the Board received in advance of the meetings a variety of materials relating to the fund, the Advisor and the Subadvisor, including comparative performance, fee and expense
information for a peer group of similar funds prepared by an independent third-party provider of fund data, performance information for an applicable benchmark index; and other pertinent information, such as the
market premium and discount information, and, with respect to the Subadvisor, comparative performance information for comparably managed accounts, as applicable, and other information provided by the Advisor and the
Subadvisor regarding the nature, extent and quality of services provided by the Advisor and the Subadvisor under their respective Agreements, as well as information regarding the Advisor’s revenues and costs of
providing services to the fund and any compensation paid to affiliates of the Advisor. At the meetings at which the renewal of the Advisory Agreement and Subadvisory Agreement are considered, particular focus is given
to information concerning fund performance, comparability of fees and total expenses, and profitability. However, the Board noted that the evaluation process with respect to the Advisor and the Subadvisor is an
ongoing one. In this regard, the Board also took into account discussions with management and information provided to the Board (including its various committees) at prior meetings with respect to the services
provided by the Advisor and the Subadvisor to the fund, including quarterly performance reports prepared by management containing reviews of investment results and prior presentations from the Subadvisor with respect
to the fund. The information received and considered by the Board in connection with the May and June meetings and throughout the year was both written and oral. The Board considered the nature, quality, and
extent of non-advisory services, if any, to be provided to the fund by the Advisor’s affiliates. The Board considered the Advisory Agreement and the Subadvisory Agreement separately in the course of its review.
In doing so, the Board noted the respective roles of the Advisor and Subadvisor in providing services to the fund.
1On June 19, 2020, as a result of health and safety measures put in place to combat the global COVID-19 pandemic, the Securities and Exchange Commission issued an exemptive order
(the “Order”) pursuant to Sections 6(c) and 38(a) of the Investment Company Act of 1940, as amended (the “1940 Act”), that temporarily exempts registered investment management companies from
the in-person voting requirements under the 1940 Act, subject to certain requirements, including that votes taken pursuant to the Order are ratified at the next in-person meeting. The Board determined that reliance on
the Order was necessary or appropriate due to the circumstances related to current or potential effects of COVID-19 and therefore, the Board’s May and June meetings were held via videoconference in reliance on
the Order. This exemptive order supersedes, in part, a similar earlier exemptive order issued by the SEC.
SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 42 |
Throughout the process, the Board
asked questions of and requested additional information from management. The Board was assisted by counsel for the fund and the Independent Trustees were also separately assisted by independent legal counsel
throughout the process. The Independent Trustees also received a memorandum from their independent legal counsel discussing the legal standards for their consideration of the proposed continuation of the Agreements
and discussed the proposed continuation of the Agreements in private sessions with their independent legal counsel at which no representatives of management were present.
Approval of Advisory Agreement
In approving the Advisory Agreement
with respect to the fund, the Board, including the Independent Trustees, considered a variety of factors, including those discussed below. The Board also considered other factors (including conditions and trends
prevailing generally in the economy, the securities markets, and the industry) and did not treat any single factor as determinative, and each Trustee may have attributed different weights to different factors. The
Board’s conclusions may be based in part on its consideration of the advisory and subadvisory arrangements in prior years and on the Board’s ongoing regular review of fund performance and operations
throughout the year.
Nature, extent, and quality of services. Among the information received by the Board from the Advisor relating to the nature, extent, and quality of services provided to the fund, the Board reviewed information provided by the
Advisor relating to its operations and personnel, descriptions of its organizational and management structure, and information regarding the Advisor’s compliance and regulatory history, including its Form ADV.
The Board also noted that on a regular basis it receives and reviews information from the fund’s Chief Compliance Officer (CCO) regarding the fund’s compliance policies and procedures established pursuant
to Rule 38a-1 under the 1940 Act. The Board observed that the scope of services provided by the Advisor, and of the undertakings required of the Advisor in connection with those services, including maintaining and
monitoring its own and the fund’s compliance programs, risk management programs, liquidity management programs and cybersecurity programs, had expanded over time as a result of regulatory, market and other
developments. The Board considered that the Advisor is responsible for the management of the day-to-day operations of the fund, including, but not limited to, general supervision of and coordination of the services
provided by the Subadvisor, and is also responsible for monitoring and reviewing the activities of the Subadvisor and other third-party service providers. The Board also considered the significant risks assumed by the
Advisor in connection with the services provided to the fund including entrepreneurial risk in sponsoring new funds and ongoing risks including investment, operational, enterprise, litigation, regulatory and
compliance risk with respect to all funds.
The Board also considered the
differences between the Advisor’s services to the fund and the services it provides to other clients that are not closed-end funds, including, for example, the differences in services related to the regulatory
and legal obligations of closed-end funds.
In considering the nature, extent,
and quality of the services provided by the Advisor, the Trustees also took into account their knowledge of the Advisor’s management and the quality of the performance of the Advisor’s duties, through
Board meetings, discussions and reports during the preceding year and through each Trustee’s experience as a Trustee of the fund and of the other funds in the John Hancock group of funds complex (the John
Hancock Fund Complex).
In the course of their deliberations
regarding the Advisory Agreement, the Board considered, among other things:
(a) | the skills and competency with which the Advisor has in the past managed the fund’s affairs and its subadvisory relationship, the Advisor’s oversight and monitoring of the Subadvisor’s investment performance and compliance programs, such as the Subadvisor’s compliance with fund policies and objectives, review of brokerage matters, including with respect to trade allocation and best execution and the Advisor’s timeliness in responding to performance issues; |
(b) | the background, qualifications and skills of the Advisor’s personnel; |
43 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT |
(c) | the Advisor’s compliance policies and procedures and its responsiveness to regulatory changes and fund industry developments; |
(d) | the Advisor’s administrative capabilities, including its ability to supervise the other service providers for the fund, as well as the Advisor’s oversight of any securities lending activity, its monitoring of class action litigation and collection of class action settlements on behalf of the fund, and bringing loss recovery actions on behalf of the fund; |
(e) | the financial condition of the Advisor and whether it has the financial wherewithal to provide a high level and quality of services to the fund; |
(f) | the Advisor’s initiatives intended to improve various aspects of the fund’s operations and investor experience with the fund; and |
(g) | the Advisor’s reputation and experience in serving as an investment advisor to the fund and the benefit to shareholders of investing in funds that are part of a family of funds offering a variety of investments. |
The Board concluded that the Advisor
may reasonably be expected to continue to provide a high quality of services under the Advisory Agreement with respect to the fund.
Investment performance. In considering the fund’s performance, the Board noted that it reviews at its regularly scheduled meetings information about the fund’s performance results. In connection with
the consideration of the Advisory Agreement, the Board:
(a) | reviewed information prepared by management regarding the fund’s performance; |
(b) | considered the comparative performance of an applicable benchmark index; |
(c) | considered the performance of comparable funds, if any, as included in the report prepared by an independent third-party provider of fund data; |
(d) | took into account the Advisor’s analysis of the fund’s performance; and |
(e) | considered the fund’s share performance and premium/discount information. |
The Board noted that while it found
the data provided by the independent third-party generally useful it recognized its limitations, including in particular that the data may vary depending on the end date selected and the results of the performance
comparisons may vary depending on the selection of the peer group. The Board noted that, based on its net asset value, the fund underperformed its benchmark index for the one-, three-, five- and ten-year periods ended
December 31, 2021. The Board also noted that, based on its net asset value, the fund underperformed its peer group median for the one-, three-, five- and ten-year periods ended December 31, 2021. The Board took into
account management’s discussion of the factors that contributed to the fund’s performance for the benchmark index and peer group median for the one-, three-, five- and ten-year periods, including the
impact of past and current market conditions on the fund’s strategy and management’s outlook for the fund. The Board concluded that the fund’s performance is being monitored and reasonably addressed,
where appropriate.
Fees and expenses. The Board reviewed comparative information prepared by an independent third-party provider of fund data, including, among other data, the fund’s contractual and net management fees
(and subadvisory fees, to the extent available) and total expenses as compared to similarly situated investment companies deemed to be comparable to the fund in light of the nature, extent and quality of the
management and advisory and subadvisory services provided by the Advisor and the Subadvisor. The Board considered the fund’s ranking within a smaller group of peer funds chosen by the independent third-party
provider, as well as the fund’s ranking within a broader group of funds. In comparing the fund’s contractual and net management fees to those of comparable funds, the Board noted that such fees include
both advisory and administrative costs.
SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 44 |
The Board noted that net management
fees for the fund are lower than the peer group median and that net total expenses for the fund are lower than the peer group median. The Board took into account management’s discussion with respect to the
overall management fee and the fees of the Subadvisor, including the amount of the advisory fee retained by the Advisor after payment of the subadvisory fee, in each case in light of the services rendered for those
amounts and the risks undertaken by the Advisor. The Board also noted that the Advisor pays the subadvisory fee, and that such fees are negotiated at arm’s length with respect to the Subadvisor. In addition, the
Board took into account that management had agreed to implement an overall fee waiver across the complex, including the fund, which is discussed further below. The Board reviewed information provided by the Advisor
concerning the investment advisory fee charged by the Advisor or one of its advisory affiliates to other clients (including other funds in the John Hancock Fund Complex) having similar investment mandates, if any. The
Board considered any differences between the Advisor’s and Subadvisor’s services to the fund and the services they provide to other comparable clients or funds. The Board concluded that the advisory fee
paid with respect to the fund is reasonable in light of the nature, extent and quality of the services provided to the fund under the Advisory Agreement.
Profitability/Fall out benefits. In considering the costs of the services to be provided and the profits to be realized by the Advisor and its affiliates from the Advisor’s relationship with the fund, the
Board:
(a) | reviewed financial information of the Advisor; |
(b) | reviewed and considered information presented by the Advisor regarding the net profitability to the Advisor and its affiliates with respect to the fund; |
(c) | received and reviewed profitability information with respect to the John Hancock Fund Complex as a whole and with respect to the fund; |
(d) | received information with respect to the Advisor’s allocation methodologies used in preparing the profitability data and considered that the advisor hired an independent third-party consultant to provide an analysis of the Advisor’s allocation methodologies; |
(e) | considered that the Advisor also provides administrative services to the fund on a cost basis pursuant to an administrative services agreement; |
(f) | noted that the Advisor also derives reputational and other indirect benefits from providing advisory services to the fund; |
(g) | noted that the subadvisory fees for the fund are paid by the Advisor and is negotiated at arm’s length; |
(h) | considered the Advisor’s ongoing costs and expenditures necessary to improve services, meet new regulatory and compliance requirements, and adapt to other challenges impacting the fund industry; and |
(i) | considered that the Advisor should be entitled to earn a reasonable level of profits in exchange for the level of services it provides to the fund and the risks that it assumes as Advisor, including entrepreneurial, operational, reputational, litigation and regulatory risk. |
Based upon its review, the Board
concluded that the level of profitability, if any, of the Advisor and its affiliates from their relationship with the fund was reasonable and not excessive.
45 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT |
Economies of scale. In considering the extent to which the fund may realize any economies of scale and whether fee levels reflect these economies of scale for the benefit of the fund shareholders, the Board
noted that the fund has a limited ability to increase its assets as a closed-end fund. The Board took into account management’s discussions of the current advisory fee structure, and, as noted above, the
services the Advisor provides in performing its functions under the Advisory Agreement and in supervising the Subadvisor.
The Board also considered potential
economies of scale that may be realized by the fund as part of the John Hancock Fund Complex. Among them, the Board noted that the Advisor has contractually agreed to waive a portion of its management fee and/or
reimburse expenses for certain funds of the John Hancock Fund Complex, including the fund (the participating portfolios). This waiver is based upon aggregate net assets of all the participating portfolios. The amount
of the reimbursement is calculated daily and allocated among all the participating portfolios in proportion to the daily net assets of each fund. The Board considered the Advisor’s overall operations and its
ongoing investment in its business in order to expand the scale of, and improve the quality of, its operations that benefit the fund. The Board determined that the management fee structure for the fund was
reasonable.
Approval of Subadvisory Agreement
In making its determination with
respect to approval of the Subadvisory Agreement, the Board reviewed:
(1) | information relating to the Subadvisor’s business, including current subadvisory services to the fund (and other funds in the John Hancock Fund Complex); |
(2) | the historical and current performance of the fund and comparative performance information relating to an applicable benchmark index and comparable funds; |
(3) | the subadvisory fee for the fund, and to the extent available, comparable fee information prepared by an independent third party provider of fund data; and |
(4) | information relating to the nature and scope of any material relationships and their significance to the fund’s Advisor and Subadvisor. |
Nature, extent, and quality of services. With respect to the services provided by the Subadvisor, the Board received information provided to the Board by the Subadvisor, including the Subadvisor’s Form ADV, as well as took
into account information presented throughout the past year. The Board considered the Subadvisor’s current level of staffing and its overall resources, as well as received information relating to the
Subadvisor’s compensation program. The Board reviewed the Subadvisor’s history and investment experience, as well as information regarding the qualifications, background, and responsibilities of the
Subadvisor’s investment and compliance personnel who provide services to the fund. The Board also considered, among other things, the Subadvisor’s compliance program and any disciplinary history. The Board
also considered the Subadvisor’s risk assessment and monitoring process. The Board reviewed the Subadvisor’s regulatory history, including whether it was involved in any regulatory actions or
investigations as well as material litigation, and any settlements and amelioratory actions undertaken, as appropriate. The Board noted that the Advisor conducts regular, periodic reviews of the Subadvisor and its
operations, including regarding investment processes and organizational and staffing matters. The Board also noted that the fund’s CCO and his staff conduct regular, periodic compliance reviews with the
Subadvisor and present reports to the Independent Trustees regarding the same, which includes evaluating the regulatory compliance systems of the Subadvisor and procedures reasonably designed to assure compliance with
the federal securities laws. The Board also took into account the financial condition of the Subadvisor.
The Board considered the
Subadvisor’s investment process and philosophy. The Board took into account that the Subadvisor’s responsibilities include the development and maintenance of an investment program for the fund that is
consistent with the fund’s investment objective, the selection of investment securities and the placement of
SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 46 |
orders for the purchase and sale of such
securities, as well as the implementation of compliance controls related to performance of these services. The Board also received information with respect to the Subadvisor’s brokerage policies and practices,
including with respect to best execution and soft dollars.
Subadvisor compensation. In considering the cost of services to be provided by the Subadvisor and the profitability to the Subadvisor of its relationship with the fund, the Board noted that the fees under the
Subadvisory Agreement are paid by the Advisor and not the fund.
The Board also relied on the ability
of the Advisor to negotiate the Subadvisory Agreement with the Subadvisor, which is not affiliated with the Advisor, and the fees thereunder at arm’s length. As a result, the costs of the services to be provided
and the profits to be realized by the Subadvisor from its relationship with the Trust were not a material factor in the Board’s consideration of the Subadvisory Agreement.
The Board also received information
regarding the nature and scope (including their significance to the Advisor and its affiliates and to the Subadvisor) of any material relationships with respect to the Subadvisor, which include arrangements in which
the Subadvisor or its affiliates provide advisory, distribution, or management services in connection with financial products sponsored by the Advisor or its affiliates, and may include other registered investment
companies, a 529 education savings plan, managed separate accounts and exempt group annuity contracts sold to qualified plans. The Board also received information and took into account any other potential conflicts of
interest the Advisor might have in connection with the Subadvisory Agreement.
In addition, the Board considered
other potential indirect benefits that the Subadvisor and its affiliates may receive from the Subadvisor’s relationship with the fund, such as the opportunity to provide advisory services to additional funds in
the John Hancock Fund Complex and reputational benefits.
Subadvisory fees. The Board considered that the fund pays an advisory fee to the Advisor and that, in turn, the Advisor pays subadvisory fees to the Subadvisor. As noted above, the Board also considered the
fund’s subadvisory fee as compared to similarly situated investment companies deemed to be comparable to the fund as included in the report prepared by the independent third party provider of fund data, to the
extent available. The Board noted that the limited size of the Lipper peer group was not sufficient for comparative purposes. The Board also took into account the subadvisory fee paid by the Advisor to the Subadvisor
with respect to the fund and compared them to fees charged by the Subadvisor to manage other subadvised portfolios and portfolios not subject to regulation under the 1940 Act, as applicable.
Subadvisor performance. As noted above, the Board considered the fund’s performance as compared to the fund’s peer group and the benchmark index and noted that the Board reviews information about the
fund’s performance results at its regularly scheduled meetings. The Board noted the Advisor’s expertise and resources in monitoring the performance, investment style and risk-adjusted performance of the
Subadvisor. The Board was mindful of the Advisor’s focus on the Subadvisor’s performance. The Board also noted the Subadvisor’s long-term performance record for similar accounts, as
applicable.
The Board’s decision to
approve the Subadvisory Agreement was based on a number of determinations, including the following:
(1) | the Subadvisor has extensive experience and demonstrated skills as a manager; |
(2) | the fund’s performance, based on net asset value, is being monitored and reasonably addressed, where appropriate; and |
(3) | the subadvisory fees are reasonable in relation to the level and quality of services being provided under the Subadvisory Agreement. |
***
47 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT |
Based on the Board’s
evaluation of all factors that the Board deemed to be material, including those factors described above, the Board, including the Independent Trustees, concluded that renewal of the Advisory Agreement and the
Subadvisory Agreement would be in the best interest of the fund and its shareholders. Accordingly, the Board, and the Independent Trustees voting separately, approved the Advisory Agreement and Subadvisory Agreement
for an additional one-year period.
SEMIANNUAL REPORT | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | 48 |
More information
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 505000 Louisville, KY 40233 | Computershare 462 South 4th Street, Suite 1600 Louisville, KY 40202 |
49 | JOHN HANCOCK HEDGED EQUITY & INCOME FUND | SEMIANNUAL REPORT |
John Hancock family of funds
The fund’s
investment objectives, risks, charges, and expenses are included in the prospectus and should be considered carefully before investing. For a prospectus, contact your financial professional, call John Hancock
Investment Management at 800-852-0218, or visit the fund’s website at jhinvestments.com. Please read the prospectus carefully before investing or sending money.
The John Hancock funds are
distributed by John Hancock Investment Management Distributors LLC. Member FINRA SIPC.
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 trusted brand
John Hancock Investment Management
is a premier asset manager
with a heritage of financial stewardship dating back to 1862. Helping
our shareholders pursue their financial goals is at the core of everything
we do. It’s why we support the role of professional financial advice
and operate with the highest standards of conduct and integrity.
with a heritage of financial stewardship dating back to 1862. Helping
our shareholders pursue their financial goals is at the core of everything
we do. It’s why we support the role of professional financial advice
and operate with the highest standards of conduct and integrity.
A better way to invest
We serve investors globally through
a unique multimanager approach:
We search the world to find proven portfolio teams with specialized
expertise for every strategy we offer, then we apply robust investment
oversight to ensure they continue to meet our uncompromising
standards and serve the best interests of our shareholders.
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.
“A trusted brand” is
based on a survey of 6,651 respondents conducted by Medallia between 3/18/20 and 5/13/20.
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.
P15SA 6/22 |
8/2022
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