Certified Annual Shareholder Report for Management Investment Companies (n-csr)
December 23 2019 - 10:44AM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-05908
John Hancock Premium Dividend Fund
(Exact name of registrant as specified in charter)
200 Berkeley Street, Boston, Massachusetts 02116
(Address of principal executive offices) (Zip code)
Salvatore Schiavone
Treasurer
200 Berkeley Street
Boston, Massachusetts 02116
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-663-4497
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Date of fiscal year end:
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October 31
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Date of reporting period:
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October 31, 2019
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ITEM 1. REPORTS TO STOCKHOLDERS.
John Hancock
Premium Dividend Fund
Ticker: PDT
Annual report
10/31/19
Beginning on
January 1, 2021, as permitted by regulations adopted by the Securities and Exchange
Commission, paper copies of the fund's shareholder reports such as
this one will no longer be sent by mail, unless you specifically
request paper copies of the reports from the transfer agent or from
your financial intermediary. Instead, the reports will be made
available on our website, and you will be notified by mail each time
a report is posted and be provided with a website link to access
the report.
If you have already elected to receive shareholder reports
electronically, you will not be affected by this change and you do
not need to take any action. You may elect to receive shareholder
reports and other communications electronically by calling the
transfer agent, Computershare, at 800-852-0218, by going to
"Communication Preferences" at computershare.com/investor, or by
contacting your financial intermediary.
You may elect to receive all reports in paper, free of charge, at any
time. You can inform the transfer agent or your financial
intermediary that you wish to continue receiving paper copies of your
shareholder reports by following the instructions listed above. Your
election to receive reports in paper will apply to all funds held
with John Hancock Investment Management or your financial
intermediary.
Managed distribution plan
The fund has adopted a managed distribution plan (Plan). Under the
Plan, the fund makes monthly distributions of an amount equal to
$0.0975 per share, which will be paid monthly until further notice.
The fund may make additional distributions (i) for purposes of not
incurring federal income tax on investment company taxable income and
net capital gain, if any, not included in such regular distributions
and (ii) for purposes of not incurring federal excise tax on ordinary
income and capital gain net income, if any, not included in such
regular monthly distributions.
The Plan provides that the Board of Trustees of the fund may amend
the terms of the Plan or terminate the Plan at any time without prior
notice to the fund's shareholders. The Plan is subject to periodic
review by the fund's Board of Trustees.
You should not draw any conclusions about the fund's investment
performance from the amount of the fund's distributions or from the
terms of the Plan. The fund's total return at NAV is presented in the
Financial highlights.
With each distribution that does not consist solely of net investment
income, the fund will issue a notice to shareholders and an
accompanying press release that will provide detailed information
regarding the amount and composition of the distribution and other
related information. The amounts and sources of distributions
reported in the notice to shareholders are only estimates and are not
being provided for tax reporting purposes. The actual amounts and
sources of the amounts for tax reporting purposes will depend upon
the fund's investment experience during the remainder of its fiscal
year and may be subject to changes based on tax regulations. The fund
will send you a Form 1099-DIV for the calendar year that will tell
you how to report these distributions for federal income tax
purposes. The fund may at times distribute more than its net
investment income and net realized capital gains; therefore, a
portion of your distribution may result in a return of capital. A
return of capital may occur, for example, when some or all of the
money that you invested in the fund is paid back to you. A return of
capital does not necessarily reflect the fund's investment
performance and should not be confused with "yield" or "income."
A message to shareholders
Dear shareholder,
It was a volatile time for stock investors in the United States
during the 12 months ended
October 31, 2019, although many segments of the market delivered attractive absolute
returns for the period. Uncertainty surrounding trade with China, the
impeachment inquiry against President Trump, and the broader health
of the global economy led to some dramatic swings in performance.
Investors, who had generally shunned riskier assets in the final
months of 2018, regained their risk appetites in the first half of
2019. Despite setbacks in May and August, the markets closed the
period on record highs. Against this backdrop, the U.S. Federal
Reserve pivoted from raising short-term interest rates to an easing
stance, cutting interest rates three times in the latter half of
the period.
While the economic fundamentals in the United States appear fairly
solid, with a strong labor market and a confident consumer base,
there are sure to be patches of market turbulence as the year goes
on, particularly if the likelihood of a recession is perceived to
increase. As always, your best resource in unpredictable markets is
your financial advisor, who can help position your portfolio so that
it's sufficiently diversified to meet your long-term objectives and
to withstand the inevitable bouts of market volatility along the
way.
On behalf of everyone at John Hancock Investment Management, I'd like
to take this opportunity to welcome new shareholders and thank
existing shareholders for the continued trust you've placed in us.
Sincerely,
Andrew G. Arnott
President and CEO,
John Hancock Investment Management
Head of Wealth and Asset Management,
United States and Europe
This commentary reflects the CEO's views as of this report's period
end and are subject to change at any time. Diversification does not
guarantee investment returns and does not eliminate risk of loss. All
investments entail risks, including the possible loss of principal.
For more up-to-date information, you can visit our website at
jhinvestments.com.
John Hancock
Premium Dividend Fund
Table of contents
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2
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Your fund at a glance
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5
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Manager's discussion of fund performance
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7
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Fund's investments
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14
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Financial statements
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18
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Financial highlights
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19
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Notes to financial statements
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30
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Report of independent registered public accounting firm
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31
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Tax information
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32
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Additional information
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35
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Continuation of investment advisory and subadvisory agreements
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42
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Trustees and Officers
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46
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More information
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ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND 1
INVESTMENT OBJECTIVE
The fund seeks to provide high current income, consistent with modest
growth of capital.
AVERAGE ANNUAL TOTAL RETURNS AS OF 10/31/19 (%)
The blended index is 70% ICE Bank of America Merrill Lynch Preferred
Stock DRD Eligible Index and 30% S&P 500 Utilities Index.
The ICE Bank of America Merrill Lynch Preferred Stock DRD Eligible
Index consists of investment-grade fixed-rate U.S. dollar-denominated
preferred securities and fixed-to-floating-rate securities. The index
includes securities having a minimum remaining term of at least one
year, Dividend Received Deduction (DRD) eligible preferred stock and
senior debt.
The S&P 500 Utilities Index is a capitalization-weighted index that
consists of companies in the S&P 500 Index that are primarily
involved in water, electrical power, and natural gas distribution
industries.
It is not possible to invest directly in an index. Index figures do
not reflect expenses or sales charges, which would result in lower
returns.
The performance data contained within this material represents past
performance, which does not guarantee future results.
Investment returns and principal value will fluctuate and a
shareholder may sustain losses. Further, the fund's performance at
net asset value (NAV) is different from the fund's performance at
closing market price because the closing market price is subject to
the dynamics of secondary market trading. Market risk may be
augmented when shares are purchased at a premium to NAV or sold at a
discount to NAV. Current month-end performance may be higher or lower
than the performance cited. The fund's most recent performance can be
found at jhinvestments.com or by calling 800-852-0218.
ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND 2
PERFORMANCE HIGHLIGHTS OVER THE LAST TWELVE MONTHS
Income-producing securities delivered strong returns for the period
Thanks largely to a drop in interest rates, preferred securities and
utility common stocks rallied strongly.
Security selection helped boost the fund's performance.
Many of the fund's largest holdings across a number of industry
sectors—particularly utilities—helped drive returns.
An interest-rate hedge was the key detractor
The fund's holdings in U.S. Treasury futures contracts detracted from
performance as interest rates declined.
PORTFOLIO COMPOSITION AS OF 10/31/19 (%)
ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND 3
SECTOR COMPOSITION AS OF
10/31/19 (%)
A note about risks
As is the case with all exchange-listed closed-end funds, shares of
this fund may trade at a discount or a premium to the fund's net
asset value (NAV). An investment in the fund is subject to investment
and market risks, including the possible loss of the entire principal
invested. There is no guarantee prior distribution levels will be
maintained, and distributions may include a substantial return of
capital. The value of a company's equity securities is subject to
changes in its financial condition and overall market and economic
conditions. Fixed-income investments are subject to interest-rate and
credit risk; their value will normally decline as interest rates rise
or if an issuer, grantor, or counterparty is unable or unwilling to
make principal, interest, or settlement payments. Investments in
higher-yielding, lower-rated securities are subject to a higher risk
of default. An issuer of securities held by the fund may default,
have its credit rating downgraded, or otherwise perform poorly, which
may affect fund performance. Liquidity—the extent to which a security
may be sold or a derivative position closed without negatively
affecting its market value—may be impaired by reduced trading volume,
heightened volatility, rising interest rates, and other market
conditions. The fund's use of leverage creates additional risks,
including greater volatility of the fund's NAV, market price, and
returns. There is no assurance that the fund's leverage strategy will
be successful. The fund will normally invest at least 25% of its
managed assets in securities of companies in the utilities industry.
Such an investment focus makes the fund more susceptible to factors
adversely affecting the utilities industry than a more broadly
diversified fund. Sector investing is subject to greater risks than
the market as a whole. Derivatives transactions, such as hedging and
other strategic transactions, may increase a fund's volatility and
could produce disproportionate losses, potentially more than the
fund's principal investment. Cybersecurity incidents may allow an
unauthorized party to gain access to fund assets, customer data, or
proprietary information, or cause a fund or its service providers to
suffer data corruption or lose operational functionality. Similar
incidents affecting issuers of fund securities may negatively affect
performance.
ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND 4
Manager's discussion of fund performance
How would you describe the investment backdrop during the 12 months ended
October 31, 2019?
Income-producing securities generally posted very strong gains during
the past year, helped largely by an increasingly favorable
interest-rate backdrop. In early 2019, there was a dovish shift in
tone from global monetary policy makers that many investors hoped
would lead the U.S. Federal Reserve (Fed) to make cuts in interest
rates during the second half of this year. That's exactly what
happened as the Fed cut rates by a quarter point each in July,
September, and October amid some signs of a slowdown in global
economic growth and muted inflation pressures.
Against this backdrop, preferred securities and utility common
stocks—two of the fund's biggest areas of emphasis among
income-producing securities—rallied strongly. At the same time,
demand for both preferreds and utilities—whose yields still outshone
most other income-oriented securities—increased, further bolstering
their prices.
Which elements of the fund's positioning helped and hurt results?
The fund's sizable weighting in the utilities sector was a key driver
of performance, with some of the portfolio's largest holdings in the
group performing particularly well. On top of falling interest rates,
utility securities were boosted by better investor enthusiasm for the
group given their attractive yields and valuations. Furthermore,
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TOP 10 ISSUERS
AS OF
10/31/19 (%)
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COUNTRY COMPOSITION
AS OF
10/31/19 (%)
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CenterPoint Energy, Inc.
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5.0
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United States
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86.4
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Dominion Energy, Inc.
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4.6
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United Kingdom
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5.5
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PPL Corp.
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4.0
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Canada
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3.9
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Morgan Stanley
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3.5
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France
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2.9
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DTE Energy Company
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3.2
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Other countries
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1.3
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Duke Energy Corp.
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3.0
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TOTAL
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100.0
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BNP Paribas SA
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2.9
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Interstate Power & Light Company
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2.7
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The Southern Company
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2.6
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JPMorgan Chase & Co.
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2.5
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TOTAL
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34.0
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As a percentage of total investments.
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As a percentage of total investments.
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Cash and cash equivalents are not included.
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ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND 5
investors reacted favorably to utilities' reassurance of solid
earnings growth going forward. Individual contributors in this space
included Entergy Corp., American Electric Power Company, Inc., and
Eversource Energy, among the fund's best-performing holdings during
the period. Among financial holdings, Ares Management Corp. posted
notable gains as the company's late-2018 conversion to a corporation
structure led to more ownership of its common stock among
institutional and individual investors.
In contrast, the fund's position in U.S. Treasury futures—which were
used to offset higher interest rates—was the biggest detractor from
performance as interest rates declined significantly during the
period. The fund's exposure to the energy sector also detracted as
oil prices trended lower amid news of slowing global economic growth.
Individual energy detractors included oil and gas producer BP PLC.
What were some key aspects of your portfolio activity?
Some of the more notable transactions were our sales of utility
common stocks, the proceeds of which we most often redeployed into
more attractively valued mandatory convertible preferred securities.
For example, we sold some common stock holdings in CenterPoint
Energy, Inc. and added to the convertible preferred securities of the
company. We also bought preferred shares of Dominion Energy, Inc. We
added selectively in the energy space, emphasizing buying more shares
of pipeline companies such as The Williams Companies, Inc.
MANAGED BY
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Joseph H. Bozoyan, CFA
On the fund since 2015
Investing since 1993
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Brad Lutz, CFA
On the fund since 2017
Investing since 1992
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The views expressed in this report are exclusively those of Joseph H.
Bozoyan, CFA, Manulife Investment Management (US) LLC, and are
subject to change. They are not meant as investment advice. Please
note that the holdings discussed in this report may not have been
held by the fund for the entire period. Portfolio composition is
subject to review in accordance with the fund's investment strategy
and may vary in the future. Current and future portfolio holdings are
subject to risk.
ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND 6
AS OF 10-31-19
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Shares
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Value
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Preferred
securities 80.3% (53.1% of Total investments)
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$613,886,043
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(Cost
$584,883,753)
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Communication
services 2.9%
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22,221,350
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Diversified
telecommunication services 0.3%
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Qwest
Corp., 6.125%
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107,500
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2,655,250
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Wireless
telecommunication services 2.6%
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Telephone
& Data Systems, Inc., 5.875%
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100,000
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2,503,000
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Telephone
& Data Systems, Inc., 6.625%
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285,000
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8,031,300
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Telephone
& Data Systems, Inc., 6.875%
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170,000
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4,318,000
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United
States Cellular Corp., 6.950%
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185,000
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4,713,800
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Consumer
staples 2.5%
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19,285,500
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Food
and staples retailing 2.5%
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Ocean
Spray Cranberries, Inc., 6.250% (A)
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224,250
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19,285,500
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Energy
0.8%
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5,766,600
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Oil,
gas and consumable fuels 0.8%
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Enbridge,
Inc., Series B (6.375% to 4-15-23, then 3 month LIBOR + 3.593%) (B)(C)
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210,000
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5,766,600
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Financials
25.6%
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196,117,217
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Banks
11.5%
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BB&T
Corp. (Callable 12-3-19), 5.200%
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110,000
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2,808,300
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BB&T
Corp. (Callable 3-1-20), 5.200%
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130,000
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3,321,500
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Citigroup,
Inc. (7.125% to 9-30-23, then 3 month LIBOR + 4.040%) (B)(C)
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240,650
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6,942,753
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JPMorgan
Chase & Co., 5.450%
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490,000
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12,269,600
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JPMorgan
Chase & Co., 6.100%
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650,000
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16,679,000
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Synovus
Financial Corp. (6.300% to 6-21-23, then 3 month LIBOR + 3.352%) (B)(C)
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188,000
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4,985,760
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The
PNC Financial Services Group, Inc., 5.375%
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180,000
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4,656,600
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The
PNC Financial Services Group, Inc. (6.125% to 5-1-22, then 3 month LIBOR + 4.067%)
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311,600
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8,472,404
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U.S.
Bancorp, 5.150%
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500,000
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12,720,000
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U.S.
Bancorp (6.500% to 1-15-22, then 3 month LIBOR + 4.468%)
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351,000
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9,603,360
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Wells
Fargo & Company, 6.000%
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205,000
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5,217,250
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Capital
markets 10.5%
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Morgan
Stanley (6.375% to 10-15-24, then 3 month LIBOR + 3.708%)
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249,227
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7,015,740
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Morgan
Stanley, 6.625%
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842,557
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21,459,927
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Morgan
Stanley (7.125% to 10-15-23, then 3 month LIBOR + 4.320%) (B)(C)
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430,025
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12,500,827
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7
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JOHN HANCOCK PREMIUM
DIVIDEND FUND | ANNUAL REPORT
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SEE NOTES TO FINANCIAL
STATEMENTS
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Shares
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Value
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Financials
(continued)
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Capital
markets (continued)
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State
Street Corp., 5.250%
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1,005,000
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$25,557,150
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State
Street Corp., 6.000%
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80,000
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2,032,000
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State
Street Corp. (5.900% to 3-15-24, then 3 month LIBOR + 3.108%)
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25,000
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690,000
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The
Bank of New York Mellon Corp., 5.200%
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442,000
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11,301,940
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Consumer
finance 1.1%
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Capital
One Financial Corp., 6.000%
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136,000
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3,482,960
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Capital
One Financial Corp., 6.250%
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87,047
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2,204,901
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Capital
One Financial Corp., 6.700%
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112,650
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2,856,804
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Insurance
2.5%
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Athene
Holding, Ltd., Series A (6.350% to 6-30-29, then 3 month LIBOR + 4.253%) (B)(C)
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284,213
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7,989,227
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Prudential
Financial, Inc., 5.750%
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50,000
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1,297,000
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Prudential
PLC, 6.750%
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150,000
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4,017,000
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W.R.
Berkley Corp., 5.625%
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240,351
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6,035,214
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Industrials
0.5%
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3,492,450
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Machinery
0.5%
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Stanley
Black & Decker, Inc., 5.750%
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135,000
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3,492,450
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Information
technology 2.3%
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17,328,320
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Semiconductors
and semiconductor equipment 2.3%
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Broadcom,
Inc., 8.000% (C)
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16,000
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17,328,320
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Real
estate 3.2%
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24,794,224
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Equity
real estate investment trusts 3.2%
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American
Homes 4 Rent, Series D, 6.500%
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100,000
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2,679,000
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Crown
Castle International Corp., 6.875% (C)
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6,500
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8,094,125
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Digital
Realty Trust, Inc., 6.625% (B)(C)
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18,275
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486,663
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Senior
Housing Properties Trust, 5.625%
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554,690
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13,534,436
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Utilities
42.5%
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324,880,382
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Electric
utilities 18.6%
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Duke
Energy Corp., 5.125%
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192,458
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4,878,810
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Duke
Energy Corp., 5.750%
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160,000
|
4,464,000
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Interstate
Power & Light Company, 5.100%
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1,204,700
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31,394,482
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NextEra
Energy Capital Holdings, Inc., 5.125%
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185,000
|
4,654,600
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NSTAR
Electric Company, 4.250%
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13,347
|
1,322,554
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NSTAR
Electric Company, 4.780%
|
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100,000
|
10,500,000
|
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PPL
Capital Funding, Inc., 5.900%
|
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1,150,320
|
29,252,638
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SCE
Trust II, 5.100% (B)(C)
|
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1,097,000
|
24,945,780
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The
Southern Company, 6.250% (B)(C)
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155,000
|
4,090,450
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SEE NOTES TO FINANCIAL
STATEMENTS
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ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND
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8
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Shares
|
Value
|
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Utilities
(continued)
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Electric
utilities (continued)
|
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The
Southern Company, 6.750% (C)
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485,000
|
$25,782,600
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Union
Electric Company, 3.700%
|
|
|
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12,262
|
1,122,465
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Gas
utilities 2.4%
|
|
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South
Jersey Industries, Inc., 7.250% (C)
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259,200
|
13,219,200
|
|
Spire,
Inc., 5.900% (B)(C)
|
|
|
|
183,775
|
4,972,952
|
|
Multi-utilities
21.5%
|
|
|
|
|
|
Algonquin
Power & Utilities Corp. (6.200% to 7-1-24, then 3 month LIBOR + 4.010%)
|
|
|
|
300,000
|
8,331,000
|
|
Algonquin
Power & Utilities Corp. (6.875% to 10-17-23, then 3 month LIBOR + 3.677%)
|
|
|
|
571,150
|
15,963,643
|
|
CenterPoint
Energy, Inc., 7.000% (C)
|
|
|
|
950,000
|
48,450,000
|
|
Dominion
Energy, Inc., 7.250% (C)
|
|
|
|
314,850
|
33,755,069
|
|
DTE
Energy Company (Callable 12-3-19), 5.250%
|
|
|
|
184,987
|
4,706,069
|
|
DTE
Energy Company, 6.250%
|
|
|
|
237,000
|
12,034,860
|
|
Integrys
Holding, Inc. (6.000% to 8-1-23, then 3 month LIBOR + 3.220%)
|
|
|
|
352,044
|
9,681,210
|
|
NiSource,
Inc. (6.500% to 3-15-24, then 5 Year CMT + 3.632%)
|
|
|
|
250,000
|
6,927,500
|
|
Sempra
Energy, 5.750%
|
|
|
|
45,000
|
1,192,500
|
|
|
|
Sempra
Energy, 6.750% (C)
|
|
|
|
200,000
|
23,238,000
|
|
Common
stocks 53.5% (35.4% of Total investments)
|
|
|
$408,996,311
|
|
(Cost
$278,615,549)
|
|
|
|
|
|
|
Communication
services 4.0%
|
|
|
|
30,761,650
|
|
Diversified
telecommunication services 4.0%
|
|
|
|
|
|
AT&T,
Inc. (B)(C)
|
|
|
|
485,000
|
18,667,650
|
|
Verizon
Communications, Inc. (B)(C)
|
|
|
|
200,000
|
12,094,000
|
|
Consumer
staples 1.0%
|
|
|
|
7,492,480
|
|
Tobacco
1.0%
|
|
|
|
|
|
Philip
Morris International, Inc. (B)(C)
|
|
|
|
92,000
|
7,492,480
|
|
Energy
13.7%
|
|
|
|
104,749,300
|
|
Oil,
gas and consumable fuels 13.7%
|
|
|
|
|
|
BP
PLC, ADR
|
|
|
|
675,950
|
25,625,265
|
|
Enbridge,
Inc. (B)(C)
|
|
|
|
281,200
|
10,238,492
|
|
Kinder
Morgan, Inc.
|
|
|
|
819,001
|
16,363,640
|
|
ONEOK,
Inc.
|
|
|
|
410,000
|
28,630,298
|
|
Royal
Dutch Shell PLC, ADR, Class A
|
|
|
|
125,421
|
7,270,655
|
|
The
Williams Companies, Inc. (B)(C)
|
|
|
|
745,000
|
16,620,950
|
|
9
|
JOHN HANCOCK PREMIUM
DIVIDEND FUND | ANNUAL REPORT
|
SEE NOTES TO FINANCIAL
STATEMENTS
|
|
|
|
|
|
Shares
|
Value
|
|
Financials
1.9%
|
|
|
|
$14,193,600
|
|
Capital
markets 1.9%
|
|
|
|
|
|
Ares
Management Corp., Class A
|
|
|
|
480,000
|
14,193,600
|
|
Utilities
32.9%
|
|
|
|
251,799,281
|
|
Electric
utilities 22.7%
|
|
|
|
|
|
Alliant
Energy Corp.
|
|
|
|
329,000
|
17,548,860
|
|
American
Electric Power Company, Inc. (B)(C)
|
|
|
|
200,000
|
18,878,000
|
|
Avangrid,
Inc. (B)(C)
|
|
|
|
381,500
|
19,094,075
|
|
Duke
Energy Corp.
|
|
|
|
270,000
|
25,450,200
|
|
Entergy
Corp. (B)(C)
|
|
|
|
60,000
|
7,288,800
|
|
Eversource
Energy
|
|
|
|
263,264
|
22,045,727
|
|
FirstEnergy
Corp. (B)(C)
|
|
|
|
250,000
|
12,080,000
|
|
OGE
Energy Corp. (B)(C)
|
|
|
|
400,000
|
17,224,000
|
|
Pinnacle
West Capital Corp.
|
|
|
|
50,000
|
4,706,000
|
|
PPL
Corp. (B)(C)
|
|
|
|
505,000
|
16,912,450
|
|
Xcel
Energy, Inc. (B)(C)
|
|
|
|
200,000
|
12,702,000
|
|
Multi-utilities
10.2%
|
|
|
|
|
|
Black
Hills Corp. (B)(C)
|
|
|
|
200,000
|
15,766,000
|
|
Dominion
Energy, Inc. (B)(C)
|
|
|
|
240,000
|
19,812,000
|
|
DTE
Energy Company
|
|
|
|
160,000
|
20,371,200
|
|
National
Grid PLC, ADR
|
|
|
|
164,166
|
9,582,369
|
|
NiSource,
Inc.
|
|
|
|
440,000
|
12,337,600
|
|
|
|
|
Rate
(%)
|
Maturity
date
|
|
Par
value^
|
Value
|
|
Corporate
bonds 15.4% (10.2% of Total investments)
|
|
|
$117,899,382
|
|
(Cost
$110,435,540)
|
|
|
|
|
|
|
Communication
services 0.4%
|
|
|
|
2,871,679
|
|
Wireless
telecommunication services 0.4%
|
|
|
|
|
|
Vodafone
Group PLC (7.000% to 1-4-29, then 5 Year U.S. Swap Rate + 4.873%) (B)(C)
|
7.000
|
04-04-79
|
|
2,480,000
|
2,871,679
|
|
Consumer
discretionary 1.3%
|
|
|
|
10,083,673
|
|
Automobiles
1.3%
|
|
|
|
|
|
General
Motors Financial Company, Inc. (6.500% to 9-30-28, then 3 month LIBOR + 3.436%) (B)(C)(D)
|
6.500
|
09-30-28
|
|
10,046,000
|
10,083,673
|
|
Energy
0.6%
|
|
|
|
4,301,920
|
|
Oil,
gas and consumable fuels 0.6%
|
|
|
|
|
|
Enbridge,
Inc. (6.250% to 3-1-28, then 3 month LIBOR + 3.641%) (B)(C)
|
6.250
|
03-01-78
|
|
4,000,000
|
4,301,920
|
|
SEE NOTES TO FINANCIAL
STATEMENTS
|
ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND
|
10
|
|
|
Rate
(%)
|
Maturity
date
|
|
Par
value^
|
Value
|
|
Financials
11.3%
|
|
|
|
$86,831,485
|
|
Banks
11.3%
|
|
|
|
|
|
Bank
of America Corp. (5.875% to 3-15-28, then 3 month LIBOR + 2.931%) (B)(C)(D)
|
5.875
|
03-15-28
|
|
4,500,000
|
4,947,525
|
|
BNP
Paribas SA (7.000% to 8-16-28, then 5 Year U.S. Swap Rate + 3.980%) (A)(B)(C)(D)
|
7.000
|
08-16-28
|
|
15,590,000
|
17,538,750
|
|
BNP
Paribas SA (7.375% to 8-19-25, then 5 Year U.S. Swap Rate + 5.150%) (C)(D)
|
7.375
|
08-19-25
|
|
14,400,000
|
16,272,000
|
|
Citizens
Financial Group, Inc. (6.000% to 7-6-23, then 3 month LIBOR + 3.003%) (B)(C)(D)
|
6.000
|
07-06-23
|
|
18,000,000
|
18,900,000
|
|
Citizens
Financial Group, Inc. (6.375% to 4-6-24, then 3 month LIBOR + 3.157%) (C)(D)
|
6.375
|
04-06-24
|
|
2,500,000
|
2,656,250
|
|
HSBC
Holdings PLC (6.500% to 3-23-28, then 5 Year U.S. ISDAFIX + 3.606%) (B)(C)(D)
|
6.500
|
03-23-28
|
|
10,000,000
|
10,587,500
|
|
Huntington
Bancshares, Inc. (5.700% to 4-15-23, then 3 month LIBOR + 2.880%) (B)(C)(D)
|
5.700
|
04-15-23
|
|
3,000,000
|
3,093,210
|
|
Lloyds
Banking Group PLC (7.500% to 6-27-24, then 5 Year U.S. Swap Rate + 4.760%) (B)(C)(D)
|
7.500
|
06-27-24
|
|
9,750,000
|
10,676,250
|
|
Wells
Fargo & Company (5.900% to 6-15-24, then 3 month LIBOR + 3.110%) (B)(C)(D)
|
5.900
|
06-15-24
|
|
2,000,000
|
2,160,000
|
|
Utilities
1.8%
|
|
|
|
13,810,625
|
|
Electric
utilities 0.2%
|
|
|
|
|
|
Southern
California Edison Company (6.250% to 2-1-22, then 3 month LIBOR + 4.199%) (B)(C)(D)
|
6.250
|
02-01-22
|
|
1,750,000
|
1,710,625
|
|
Multi-utilities
1.6%
|
|
|
|
|
|
CenterPoint
Energy, Inc. (6.125% to 9-1-23, then 3 month LIBOR + 3.270%) (C)(D)
|
6.125
|
09-01-23
|
|
9,000,000
|
9,562,500
|
|
NiSource,
Inc. (5.650% to 6-15-23, then 5 Year CMT + 2.843%) (B)(C)(D)
|
5.650
|
06-15-23
|
|
2,500,000
|
2,537,500
|
|
|
|
|
Yield*
(%)
|
Maturity
date
|
|
Par
value^
|
Value
|
|
Short-term
investments 2.0% (1.3% of Total investments)
|
|
|
$15,395,000
|
|
(Cost
$15,395,000)
|
|
|
|
|
|
|
U.S.
Government Agency 1.7%
|
|
|
|
12,723,000
|
|
Federal
Agricultural Mortgage Corp. Discount Note
|
1.500
|
11-01-19
|
|
2,261,000
|
2,261,000
|
|
Federal
Home Loan Bank Discount Note
|
1.500
|
11-01-19
|
|
10,462,000
|
10,462,000
|
|
11
|
JOHN HANCOCK PREMIUM
DIVIDEND FUND | ANNUAL REPORT
|
SEE NOTES TO FINANCIAL
STATEMENTS
|
|
|
|
|
|
Par
value^
|
Value
|
|
Repurchase
agreement 0.3%
|
|
|
|
|
2,672,000
|
|
|
|
Repurchase
Agreement with State Street Corp. dated 10-31-19 at 0.550% to be repurchased at $2,672,041 on 11-1-19, collateralized by $2,700,000 U.S. Treasury Notes, 1.875% due 1-31-22 (valued at $2,725,769, including interest)
|
|
|
|
2,672,000
|
2,672,000
|
|
|
|
Total
investments (Cost $989,329,842) 151.2%
|
|
|
|
$1,156,176,736
|
|
Other
assets and liabilities, net (51.2%)
|
|
|
|
(391,700,483)
|
|
Total
net assets 100.0%
|
|
|
|
|
$764,476,253
|
|
The percentage shown
for each investment category is the total value of the category as a percentage of the net assets of the fund unless otherwise indicated.
|
|
^All
par values are denominated in U.S. dollars unless otherwise indicated.
|
|
Security
Abbreviations and Legend
|
|
ADR
|
American
Depositary Receipt
|
|
CMT
|
Constant
Maturity Treasury
|
|
ISDAFIX
|
International
Swaps and Derivatives Association Fixed Interest Rate Swap Rate
|
|
LIBOR
|
London
Interbank Offered Rate
|
|
(A)
|
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.
|
|
(B)
|
All or a
portion of this security is on loan as of 10-31-19, and is a component of the fund's leverage under the Liquidity Agreement.
|
|
(C)
|
All or a
portion of this security is pledged as collateral pursuant to the Liquidity Agreement. Total collateral value at 10-31-19 was $438,181,471. A portion of the securities pledged as collateral were loaned pursuant to the Liquidity Agreement. The value
of securities on loan amounted to $240,877,698.
|
|
(D)
|
Perpetual
bonds have no stated maturity date. Date shown as maturity date is next call date.
|
|
*
|
Yield
represents either the annualized yield at the date of purchase, the stated coupon rate or, for floating rate securities, the rate at period end.
|
|
SEE NOTES TO FINANCIAL
STATEMENTS
|
ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND
|
12
|
DERIVATIVES
FUTURES
|
Open
contracts
|
Number
of
contracts
|
Position
|
Expiration
date
|
Notional
basis^
|
Notional
value^
|
Unrealized
appreciation
(depreciation)
|
|
10-Year
U.S. Treasury Note Futures
|
860
|
Short
|
Dec
2019
|
$(113,034,426)
|
$(112,055,312)
|
$979,114
|
|
|
|
|
|
|
|
$979,114
|
^ Notional basis refers to the
contractual amount agreed upon at inception of open contracts; notional value represents the current value of the open contract.
SWAPS
|
Interest
rate swaps
|
Counterparty
(OTC)/
Centrally cleared
|
Notional
amount
|
Currency
|
Payments
made
|
Payments
received
|
Fixed
payment
frequency
|
Floating
payment
frequency
|
Maturity
date
|
Unamortized
upfront
payment paid
(received)
|
Unrealized
appreciation
(depreciation)
|
Value
|
|
Centrally
cleared
|
96,000,000
|
USD
|
Fixed
2.136%
|
USD
3 Month LIBOR BBA(a)
|
Semi
Annual
|
Quarterly
|
Oct
2022
|
—
|
$(1,768,306)
|
$(1,768,306)
|
|
|
|
|
|
|
|
|
|
—
|
$(1,768,306)
|
$(1,768,306)
|
|
(a)
|
At 10-31-19, the 3 month LIBOR
was 1.902%.
|
|
Derivatives
Currency Abbreviations
|
|
USD
|
U.S.
Dollar
|
|
Derivatives
Abbreviations
|
|
BBA
|
The
British Banker's Association
|
|
LIBOR
|
London
Interbank Offered Rate
|
|
OTC
|
Over-the-counter
|
At 10-31-19, the aggregate cost of
investments for federal income tax purposes was $990,930,511. Net unrealized appreciation aggregated to $164,457,033, of which $179,923,451 related to gross unrealized appreciation and $15,466,418 related to gross unrealized depreciation.
See Notes to financial statements regarding investment
transactions and other derivatives information.
|
13
|
JOHN HANCOCK PREMIUM
DIVIDEND FUND | ANNUAL REPORT
|
SEE NOTES TO FINANCIAL
STATEMENTS
|
STATEMENT OF ASSETS AND LIABILITIES 10-31-19
|
Assets
|
|
|
Unaffiliated
investments, at value (Cost $989,329,842)
|
$1,156,176,736
|
|
Receivable
for centrally cleared swaps
|
860,652
|
|
Cash
|
140,777
|
|
Collateral
held at broker for futures contracts
|
1,152,982
|
|
Dividends
and interest receivable
|
3,477,424
|
|
Other
assets
|
28,555
|
|
Total
assets
|
1,161,837,126
|
|
Liabilities
|
|
|
Payable
for futures variation margin
|
698,750
|
|
Liquidity
agreement
|
383,700,000
|
|
Payable
for investments purchased
|
11,850,000
|
|
Interest
payable
|
827,805
|
|
Payable
to affiliates
|
|
|
Administrative
services fees
|
97,295
|
|
Trustees'
fees
|
567
|
|
Other
liabilities and accrued expenses
|
186,456
|
|
Total
liabilities
|
397,360,873
|
|
Net
assets
|
$764,476,253
|
|
Net
assets consist of
|
|
|
Paid-in
capital
|
$598,386,672
|
|
Total
distributable earnings (loss)
|
166,089,581
|
|
Net
assets
|
$764,476,253
|
|
|
|
Net
asset value per share
|
|
|
Based
on 48,583,189 shares of beneficial interest outstanding - unlimited number of shares authorized with no par value
|
$15.74
|
|
SEE NOTES TO FINANCIAL
STATEMENTS
|
ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND
|
14
|
STATEMENT OF OPERATIONS For
the year ended 10-31-19
|
Investment
income
|
|
|
Dividends
|
$49,588,467
|
|
Interest
|
7,287,661
|
|
Less
foreign taxes withheld
|
(237,751)
|
|
Total
investment income
|
56,638,377
|
|
Expenses
|
|
|
Investment
management fees
|
8,535,837
|
|
Interest
expense
|
11,502,824
|
|
Administrative
services fees
|
1,110,926
|
|
Transfer
agent fees
|
117,914
|
|
Trustees'
fees
|
44,901
|
|
Custodian
fees
|
79,217
|
|
Printing
and postage
|
311,302
|
|
Professional
fees
|
87,831
|
|
Stock
exchange listing fees
|
47,174
|
|
Other
|
24,695
|
|
Total
expenses
|
21,862,621
|
|
Less
expense reductions
|
(81,687)
|
|
Net
expenses
|
21,780,934
|
|
Net
investment income
|
34,857,443
|
|
Realized
and unrealized gain (loss)
|
|
|
Net
realized gain (loss) on
|
|
|
Unaffiliated
investments and foreign currency transactions
|
32,597,585
|
|
Futures
contracts
|
(8,664,119)
|
|
Swap
contracts
|
415,329
|
|
|
24,348,795
|
|
Change
in net unrealized appreciation (depreciation) of
|
|
|
Unaffiliated
investments
|
73,101,241
|
|
Futures
contracts
|
(557,689)
|
|
Swap
contracts
|
(5,346,228)
|
|
|
67,197,324
|
|
Net
realized and unrealized gain
|
91,546,119
|
|
Increase
in net assets from operations
|
$126,403,562
|
|
15
|
JOHN HANCOCK PREMIUM
DIVIDEND FUND | ANNUAL REPORT
|
SEE NOTES TO FINANCIAL
STATEMENTS
|
STATEMENTS OF CHANGES IN NET ASSETS
|
|
Year
ended
10-31-19
|
Year
ended
10-31-18
|
|
Increase
(decrease) in net assets
|
|
|
|
From
operations
|
|
|
|
Net
investment income
|
$34,857,443
|
$41,357,803
|
|
Net
realized gain
|
24,348,795
|
14,465,705
|
|
Change
in net unrealized appreciation (depreciation)
|
67,197,324
|
(51,639,098)
|
|
Increase
in net assets resulting from operations
|
126,403,562
|
4,184,410
|
|
Distributions
to shareholders
|
|
|
|
From
earnings
|
(58,438,580)
|
(82,443,242)
|
|
Total
distributions
|
(58,438,580)
|
(82,443,242)
|
|
Fund
share transactions
|
|
|
|
Issued
pursuant to Dividend Reinvestment Plan
|
1,505,561
|
2,245,456
|
|
Total
increase (decrease)
|
69,470,543
|
(76,013,376)
|
|
Net
assets
|
|
|
|
Beginning
of year
|
695,005,710
|
771,019,086
|
|
End
of year
|
$764,476,253
|
$695,005,710
|
|
Share
activity
|
|
|
|
Shares
outstanding
|
|
|
|
Beginning
of year
|
48,489,036
|
48,343,935
|
|
Issued
pursuant to Dividend Reinvestment Plan
|
94,153
|
145,101
|
|
End
of year
|
48,583,189
|
48,489,036
|
|
SEE NOTES TO FINANCIAL
STATEMENTS
|
ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND
|
16
|
STATEMENT OF CASH FLOWS For
the year ended 10-31-19
|
|
|
|
Cash
flows from operating activities
|
|
|
Net
increase in net assets from operations
|
$126,403,562
|
|
Adjustments
to reconcile net increase in net assets from operations to net cash provided by operating activities:
|
|
|
Long-term
investments purchased
|
(203,181,086)
|
|
Long-term
investments sold
|
236,982,288
|
|
Net
purchases and sales in short-term investments
|
(13,149,561)
|
|
Net
amortization of premium (discount)
|
85,717
|
|
(Increase)
Decrease in assets:
|
|
|
Receivable
for futures variation margin
|
295,616
|
|
Receivable
for centrally cleared swaps
|
319,639
|
|
Collateral
held at broker for futures contracts
|
(249,982)
|
|
Dividends
and interest receivable
|
59,891
|
|
Receivable
for investments sold
|
40,927
|
|
Other
assets
|
9,842
|
|
Increase
(Decrease) in liabilities:
|
|
|
Payable
for futures variation margin
|
698,750
|
|
Payable
for investments purchased
|
11,850,000
|
|
Interest
payable
|
(133,750)
|
|
Payable
to affiliates
|
4,986
|
|
Other
liabilities and accrued expenses
|
31,786
|
|
Net
change in unrealized (appreciation) depreciation on:
|
|
|
Investments
|
(73,101,241)
|
|
Net
realized (gain) loss on:
|
|
|
Investments
|
(32,597,524)
|
|
Proceeds
received as return of capital
|
2,567,839
|
|
Net
cash provided by operating activities
|
$56,937,699
|
|
Cash
flows provided by (used in) financing activities
|
|
|
Distributions
to shareholders
|
$(56,933,019)
|
|
Net
cash used in financing activities
|
$(56,933,019)
|
|
Net
increase in cash
|
$4,680
|
|
Cash
at beginning of year
|
$136,097
|
|
Cash
at end of year
|
$140,777
|
|
Supplemental
disclosure of cash flow information:
|
|
|
Cash
paid for interest
|
$(11,636,574)
|
|
Noncash
financing activities not included herein consists of reinvestment distributions:
|
$(1,505,561)
|
|
17
|
JOHN HANCOCK PREMIUM
DIVIDEND FUND | ANNUAL REPORT
|
SEE NOTES TO FINANCIAL
STATEMENTS
|
|
Period
ended
|
10-31-19
|
10-31-18
|
10-31-17
|
10-31-16
|
10-31-15
|
|
Per
share operating performance
|
|
|
|
|
|
|
Net
asset value, beginning of period
|
$14.33
|
$15.95
|
$16.17
|
$15.14
|
$15.43
|
|
Net
investment income1
|
0.72
|
0.85
|
1.11
|
0.98
|
0.97
|
|
Net
realized and unrealized gain (loss) on investments
|
1.89
|
(0.77)
|
0.14
|
1.16
|
(0.21)
|
|
Total
from investment operations
|
2.61
|
0.08
|
1.25
|
2.14
|
0.76
|
|
Less
distributions
|
|
|
|
|
|
|
From
net investment income
|
(1.17)
|
(1.17)
|
(1.17)
|
(0.97)
|
(0.89)
|
|
From
net realized gain
|
(0.03)
|
(0.53)
|
(0.30)
|
(0.14)
|
(0.20)
|
|
Total
distributions
|
(1.20)
|
(1.70)
|
(1.47)
|
(1.11)
|
(1.09)
|
|
Anti-dilutive
impact of repurchase plan
|
—
|
—
|
—
|
—
2,3
|
0.04
3
|
|
Net
asset value, end of period
|
$15.74
|
$14.33
|
$15.95
|
$16.17
|
$15.14
|
|
Per
share market value, end of period
|
$17.69
|
$15.65
|
$16.97
|
$14.96
|
$13.68
|
|
Total
return at net asset value (%)4,5
|
18.52
|
0.19
|
8.26
|
14.83
|
6.18
|
|
Total
return at market value (%)4
|
22.04
|
2.84
|
24.50
|
17.58
|
8.29
|
|
Ratios
and supplemental data
|
|
|
|
|
|
|
Net
assets, end of period (in millions)
|
$764
|
$695
|
$771
|
$781
|
$733
|
|
Ratios
(as a percentage of average net assets):
|
|
|
|
|
|
|
Expenses
before reductions
|
3.01
|
2.80
|
2.28
|
1.95
|
1.86
|
|
Expenses
including reductions6
|
3.00
|
2.79
|
2.27
|
1.94
|
1.85
|
|
Net
investment income
|
4.79
|
5.75
|
7.00
|
6.14
|
6.38
|
|
Portfolio
turnover (%)
|
18
|
24
|
14
|
19
|
15
|
|
Senior
securities
|
|
|
|
|
|
|
Total
debt outstanding end of period (in millions)
|
$384
|
$384
|
$384
|
$384
|
$384
|
|
Asset
coverage per $1,000 of debt7
|
$2,992
|
$2,811
|
$3,009
|
$3,035
|
$2,909
|
|
1
|
Based
on average daily shares outstanding.
|
|
2
|
Less
than $0.005 per share.
|
|
3
|
The
repurchase plan was completed at an average repurchase price of $13.27 and $13.41 for 105,700 and 1,218,436 shares for the periods ended 10-31-16 and 10-31-15, respectively.
|
|
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
|
Expenses
including reductions excluding interest expense were 1.41%, 1.44%, 1.45, 1.40% and 1.41% for the periods ended 10-31-19, 10-31-18, 10-31-17, 10-31-16 and 10-31-15, respectively.
|
|
7
|
Asset
coverage equals the total net assets plus borrowings divided by the borrowings of the fund outstanding at period end (Note 8). As debt outstanding changes, the level of invested assets may change accordingly. Asset coverage ratio provides a measure
of leverage.
|
|
SEE NOTES TO FINANCIAL
STATEMENTS
|
ANNUAL REPORT | JOHN HANCOCK Premium Dividend Fund
|
18
|
|
Notes
to financial statements
|
|
Note 1—Organization
John
Hancock Premium Dividend 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 the 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 are typically valued at last traded price on the exchange on which they trade. Swaps are generally valued using evaluated prices obtained from 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.
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
|
19
|
JOHN HANCOCK Premium
Dividend Fund | ANNUAL REPORT
|
|
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 October 31, 2019, by major security category or type:
|
|
Total
value at
10-31-19
|
Level
1
quoted
price
|
Level
2
significant
observable
inputs
|
Level
3
significant
unobservable
inputs
|
|
Investments
in securities:
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Preferred
securities
|
|
|
|
|
|
Communication
services
|
$22,221,350
|
$22,221,350
|
—
|
—
|
|
Consumer
staples
|
19,285,500
|
—
|
$19,285,500
|
—
|
|
Energy
|
5,766,600
|
5,766,600
|
—
|
—
|
|
Financials
|
196,117,217
|
196,117,217
|
—
|
—
|
|
Industrials
|
3,492,450
|
3,492,450
|
—
|
—
|
|
Information
technology
|
17,328,320
|
17,328,320
|
—
|
—
|
|
Real
estate
|
24,794,224
|
16,700,099
|
8,094,125
|
—
|
|
Utilities
|
324,880,382
|
303,576,707
|
21,303,675
|
—
|
|
Common
stocks
|
408,996,311
|
408,996,311
|
—
|
—
|
|
Corporate
bonds
|
117,899,382
|
—
|
117,899,382
|
—
|
|
Short-term
investments
|
15,395,000
|
—
|
15,395,000
|
—
|
|
Total
investments in securities
|
$1,156,176,736
|
$974,199,054
|
$181,977,682
|
—
|
|
Derivatives:
|
|
|
|
|
|
Assets
|
|
|
|
|
|
Futures
|
$979,114
|
$979,114
|
—
|
—
|
|
Liabilities
|
|
|
|
|
|
Swap
contracts
|
(1,768,306)
|
—
|
$(1,768,306)
|
—
|
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.
|
|
ANNUAL REPORT | JOHN HANCOCK Premium Dividend Fund
|
20
|
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.
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 the 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.
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 the 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.
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.
Funds that invest internationally generally carry more risk
than funds that invest strictly in U.S. securities. Risks can result from differences in economic and political conditions, regulations, market practices (including higher transaction costs), accounting standards and other factors.
Foreign taxes. The fund may be
subject to withholding tax on income, capital gains or repatriation taxes 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.
|
21
|
JOHN HANCOCK Premium
Dividend Fund | ANNUAL REPORT
|
|
Expenses. Within the John
Hancock group of funds complex, expenses that are directly attributable to an individual fund are allocated to such fund. Expenses that are not readily attributable to a specific fund are allocated among all funds in an equitable manner, taking into
consideration, among other things, the nature and type of expense and the fund’s relative net assets. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.
Statement of cash flows. A
Statement of cash flows is presented when a fund has a significant amount of borrowing during the period, based on the average total borrowing in relation to total assets, or when a certain percentage of the fund’s investments is classified as
Level 3 in the fair value hierarchy. Information on financial transactions that have been settled through the receipt and disbursement of cash is presented in the Statement of cash flows. The cash amount shown in the Statement of cash flows is the
amount included in the fund’s Statement of assets and liabilities and represents the cash on hand at the fund’s custodian and does not include any short-term investments or collateral on derivative contracts, if any.
Federal income taxes. The fund
intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore,
no federal income tax provision is required.
As of
October 31, 2019, 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) on September 29, 2014. Under the current Plan, the fund makes monthly distributions of an amount equal to $0.0975 per share, which will be paid monthly until
further notice.
Distributions under the Plan may consist of net investment
income, net realized capital gains and, to the extent necessary, return of capital. Return of capital distributions may be necessary when the fund’s net investment income and net capital gains are insufficient to meet the minimum distribution.
In addition, the fund may also make additional distributions for the purpose of not incurring federal income and excise taxes.
The Board of Trustees may terminate or reduce the amount paid
under the Plan at any time. The termination or reduction may have an adverse effect on the market price of the fund’s shares.
Distribution of income and gains. Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The fund generally declares and pays dividends monthly under the managed distribution plan described
above. Capital gain distributions, if any, are typically distributed annually.
The tax character of distributions for the years ended October
31, 2019 and 2018 was as follows:
|
|
October
31, 2019
|
October
31, 2018
|
|
Ordinary
income
|
$36,251,213
|
$44,845,980
|
|
Long-term
capital gains
|
22,187,367
|
37,597,262
|
|
Total
|
$58,438,580
|
$82,443,242
|
As of October 31, 2019, the
components of distributable earnings on a tax basis consisted of $1,628,892 of undistributed long-term capital gains.
|
|
ANNUAL REPORT | JOHN HANCOCK Premium Dividend Fund
|
22
|
Such distributions and distributable earnings, 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.
Capital accounts within the financial statements are adjusted
for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any, will reverse in a subsequent period. Book-tax differences are primarily attributable to wash
sale loss deferrals, characterization of distributions, contingent payment debt instruments and derivative transactions.
Note 3—Derivative instruments
The fund may invest in derivatives in order to meet its
investment objective. Derivatives include a variety of different instruments that may be traded in the over-the-counter (OTC) market, on a regulated exchange or through a clearing facility. The risks in using derivatives vary depending upon the
structure of the instruments, including the use of leverage, optionality, the liquidity or lack of liquidity of the contract, the creditworthiness of the counterparty or clearing organization and the volatility of the position. Some derivatives
involve risks that are potentially greater than the risks associated with investing directly in the referenced securities or other referenced underlying instrument. Specifically, the fund is exposed to the risk that the counterparty to an OTC
derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction.
Certain derivatives are traded or cleared on an exchange or
central clearinghouse. Exchange-traded or centrally-cleared transactions generally present less counterparty risk to a fund than OTC transactions. The exchange or clearinghouse stands between the fund and the broker to the contract and therefore,
credit risk is generally limited to the failure of the exchange or clearinghouse and the clearing member.
Centrally-cleared swap contracts are subject to clearinghouse
rules, including initial and variation margin requirements, daily settlement of obligations and the clearinghouse guarantee of payments to the broker. There is, however, still counterparty risk due to the potential insolvency of the broker with
respect to any margin held in the brokers’ customer accounts. While clearing members are required to segregate customer assets from their own assets, in the event of insolvency, there may be a shortfall in the amount of margin held by the
broker for its clients. Collateral or margin requirements for centrally-cleared derivatives are set by the broker or applicable clearinghouse. Margin for centrally-cleared transactions is detailed in the Statement of assets and liabilities as
Receivable/Payable for centrally-cleared swaps. Securities pledged by the fund for centrally-cleared transactions, if any, are identified in the Fund's investments.
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. 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 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 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
|
23
|
JOHN HANCOCK Premium
Dividend Fund | ANNUAL REPORT
|
|
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. Payable 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 year ended October 31, 2019, the fund used futures
contracts to manage against anticipated interest rate changes. The fund held futures contracts with USD notional values ranging from $101.9 million to $112.1 million, as measured at each quarter end.
Swaps. Swap agreements are
agreements between the fund and counterparty to exchange cash flows, assets, foreign currencies or market-linked returns at specified intervals. Swap agreements are privately negotiated in the OTC market (OTC swaps) or may be executed on a
registered commodities exchange (centrally cleared swaps). Swaps are marked-to-market daily and the change in value is recorded as a component of unrealized appreciation/depreciation of swap contracts. The value of the swap will typically impose
collateral posting obligations on the party that is considered out-of-the-money on the swap.
Upfront payments made/received by the fund, if any, are
amortized/accreted for financial reporting purposes, with the unamortized/unaccreted portion included in the Statement of assets and liabilities. A termination payment by the counterparty or the fund is recorded as realized gain or loss, as well as
the net periodic payments received or paid by the fund.
Entering into swap agreements involves, to varying degrees,
elements of credit, market and documentation risk that may provide outcomes that are in excess of the amounts recognized on the Statement of assets and liabilities. Such risks involve the possibility that there will be no liquid market for the swap,
or that a counterparty may default on its obligation or delay payment under the swap terms. The counterparty may disagree or contest the terms of the swap. In addition to interest rate risk, market risks may also impact the swap. The fund may also
suffer losses if it is unable to terminate or assign outstanding swaps or reduce its exposure through offsetting transactions.
Interest rate swaps. Interest
rate swaps represent an agreement between the fund and a counterparty to exchange cash flows based on the difference between two interest rates applied to a notional amount. The payment flows are usually netted against each other, with the
difference being paid by one party to the other. The fund settles accrued net interest receivable or payable under the swap contracts at specified, future intervals.
During the year ended October 31, 2019, the fund used interest
rate swap contracts to manage against anticipated interest rate changes. The notional values at the period end are representative of the fund's exposure throughout the period. No new interest rate swap positions were entered into or closed during
the year ended October 31, 2019.
Fair value of derivative
instruments by risk category
The table below summarizes
the fair value of derivatives held by the fund at October 31, 2019 by risk category:
|
Risk
|
Statement
of
assets and
liabilities location
|
Financial
instruments
location
|
Assets
derivatives
fair value
|
Liabilities
derivatives
fair value
|
|
Interest
rate
|
Receivable/payable
for futures variation margin
|
Futures
1
|
$979,114
|
—
|
|
Interest
rate
|
Swap
contracts, at value
|
Interest
rate swaps2
|
—
|
$(1,768,306)
|
|
|
|
|
$979,114
|
$(1,768,306)
|
|
|
ANNUAL REPORT | JOHN HANCOCK Premium Dividend Fund
|
24
|
|
1
|
Reflects cumulative
appreciation/depreciation on futures as disclosed in Fund's investments. Only the year end variation margin is separately disclosed on the Statement of assets and liabilities.
|
|
2
|
Reflects
cumulative value of swap contracts. Receivable/payable for centrally cleared swaps, which includes value and margin, and swap contracts at value, which represents OTC swaps, are shown separately on the Statement of assets and liabilities.
|
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 year ended October 31, 2019:
|
|
Statement
of operations location - Net realized gain (loss) on:
|
|
Risk
|
Futures
contracts
|
Swap
contracts
|
Total
|
|
Interest
rate
|
$(8,664,119)
|
$415,329
|
$(8,248,790)
|
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 year ended October 31, 2019:
|
|
Statement
of operations location - Change in net unrealized appreciation (depreciation) of:
|
|
Risk
|
Futures
contracts
|
Swap
contracts
|
Total
|
|
Interest
rate
|
$(557,689)
|
$(5,346,228)
|
$(5,903,917)
|
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, wholly owned subsidiary of Manulife Financial Corporation (MFC). Prior to June 28, 2019, the Advisor was known as John Hancock Advisers, LLC.
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 0.50% of the fund’s average daily managed assets (net assets plus borrowing under the
Liquidity Agreement) (see Note 8). In addition, the fund pays to the Advisor 5.00% of the fund’s daily gross income, which amounted to $2,981,469 for the year ended October 30, 2019. The Advisor has a subadvisory agreement with Manulife
Investment Management (US) LLC, an indirectly owned subsidiary of MFC and an affiliate of the Advisor. Prior to May 7, 2019, Manulife Investment Management (US) LLC was known as John Hancock Asset Management, a division of Manulife Asset Management
(US) LLC. 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
|
25
|
JOHN HANCOCK Premium
Dividend Fund | ANNUAL REPORT
|
|
fund. During the year ended October 31, 2019, this waiver
amounted to 0.01% of the fund’s average daily net assets. This arrangement expires on July 31, 2021, 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 $81,687 for the year ended October 31, 2019.
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 year ended October 31, 2019, were equivalent to a net annual effective rate of 0.76% of the fund's average daily managed net
assets.
Administrative services. The fund has an administrative agreement with the Advisor under which the Advisor oversees the custodial, auditing, valuation, accounting, legal, compliance, stock transfer and dividend disbursing services and other
operational activities and maintains fund communications with shareholders. The fund pays the Advisor a monthly administration fee at an annual rate of 0.10% of the fund’s average weekly managed 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 17, 2014, the Board of Trustees approved a share
repurchase plan, which is subsequently reviewed and approved by the Board of Trustees each year in December. Under the current share repurchase plan, the fund may purchase in the open market, up to 10% of its outstanding common shares as of December
31, 2018. The current share repurchase plan will remain in effect between January 1, 2019 and December 31, 2019.
During the years ended October 31, 2019 and 2018, 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 are included on the Financial
highlights.
Note
7—Leverage risk
The fund utilizes a Liquidity Agreement (LA) to increase its
assets available for investment. When the fund leverages its assets, shareholders bear the expenses associated with the LA and have potential to benefit or be disadvantaged from the use of leverage. The Advisor’s fee is also increased in
dollar terms from the use of leverage. Consequently, the fund and the Advisor may have differing interests in determining whether to leverage the fund’s assets. Leverage creates risks that may adversely affect the return for the holders of
shares, including:
|
•
|
the likelihood of greater
volatility of NAV and market price of shares;
|
|
•
|
fluctuations in the interest
rate paid for the use of the LA;
|
|
•
|
increased operating costs,
which may reduce the fund’s total return;
|
|
•
|
the potential for a decline
in the value of an investment acquired through leverage, while the fund’s obligations under such leverage remains fixed; and
|
|
•
|
the fund is more likely to
have to sell securities in a volatile market in order to meet asset coverage or other debt compliance requirements.
|
To the extent the income or capital appreciation derived from
securities purchased with funds received from leverage exceeds the cost of leverage, the fund’s return will be greater than if leverage had not been used; conversely, returns would be lower if the cost of the leverage exceeds the income or
capital appreciation derived.
|
|
ANNUAL REPORT | JOHN HANCOCK Premium Dividend Fund
|
26
|
The use of securities lending to obtain leverage in the
fund’s investments may subject the fund to greater risk of loss than would reinvestment of collateral in short term highly rated investments.
In addition to the risks related to the fund’s use of
leverage, the fund is subject to the risk that it would be unable to timely, or at all, obtain replacement financing if the LA is terminated. Were this to happen, the fund would be required to de-leverage, selling securities at a potentially
inopportune time and incurring tax consequences. Further, the fund’s ability to generate income from the use of leverage would be adversely affected.
Note 8—Liquidity Agreement
The
fund has entered into a Liquidity Agreement with State Street Bank and Trust Company (SSB) that allows it to borrow or otherwise access up to $383,700,000 (maximum facility amount) through a line of credit, securities lending and reverse repurchase
agreements. The amounts outstanding at October 31, 2019 are shown in the Statement of assets and liabilities as the Liquidity agreement.
The fund pledges its assets as collateral to secure obligations
under the LA. The fund retains the risks and rewards of the ownership of assets pledged to secure obligations under the LA and makes these assets available for securities lending and reverse repurchase transactions with SSB acting as the
fund’s authorized agent for these transactions. All transactions initiated through SSB are required to be secured with cash collateral received from the securities borrower (the Borrower) or cash is received from the reverse repurchase
agreement (Reverse Repo) counterparties. Securities lending transactions will be secured with cash collateral in amounts at least equal to 100% of the market value of the securities utilized in these transactions. Cash received by SSB from
securities lending or Reverse Repo transactions is credited against the amounts borrowed under the line of credit.
Upon return of securities by the Borrower or Reverse Repo
counterparty, SSB will return the cash collateral to the Borrower or proceeds from the Reverse Repo, as applicable, which will eliminate the credit against the line of credit and will cause the drawdowns under the line of credit to increase by the
amounts returned. Income earned on the loaned securities is retained by SSB, and any interest due on the reverse repurchase agreements is paid by SSB.
SSB has indemnified the fund for certain losses that may arise
if the Borrower or a Reverse Repo Counterparty fails to return securities when due. With respect to securities lending transactions, upon a default of the securities borrower, SSB uses the collateral received from the Borrower to purchase
replacement securities of the same issue, type, class and series. If the value of the collateral is less than the purchase cost of replacement securities, SSB is responsible for satisfying the shortfall but only to the extent that the shortfall is
not due to any of the fund’s losses on the reinvested cash collateral. Although the risk of the loss of the securities is mitigated by receiving collateral from the Borrower or proceeds from the Reverse Repo counterparty and through SSB
indemnification, the fund could experience a delay in recovering securities or could experience a lower than expected return if the Borrower or Reverse Repo counterparty fails to return the securities on a timely basis.
Under normal circumstances, interest charged is at the rate of
one month LIBOR (London Interbank Offered Rate) plus 0.625% and is payable monthly on the aggregate balance of the drawdowns outstanding under the LA. As of October 31, 2019, the fund had an aggregate balance of $383,700,000 at an interest rate of
2.41%, which is reflected in the Liquidity agreement on the Statement of assets and liabilities. During the year ended October 31, 2019, the average balance of the LA and the effective average interest rate were $383,700,000 and 3.00%, respectively.
The fund may terminate the LA with 60 days’
notice. If certain asset coverage and collateral requirements, or other covenants are not met, the LA could be deemed in default and result in termination. Absent a default or facility termination event, SSB is required to provide the fund with 360
days’ notice prior to terminating the LA.
|
27
|
JOHN HANCOCK Premium
Dividend Fund | ANNUAL REPORT
|
|
Due to the anticipated discontinuation of LIBOR, as discussed
in Note 9, the LA may be amended to remove LIBOR as the reference rate for interest and to replace LIBOR with an alternative reference rate for interest mutually agreed upon by the fund and SSB. However, there remains uncertainty regarding the
future utilization of LIBOR and the nature of any replacement rate and the potential effect of a transition away from LIBOR on the fund and/or the LA cannot yet be fully determined.
Note 9—LIBOR Discontinuation Risk
The LA utilizes LIBOR as the reference or benchmark rate for
interest rate calculations. LIBOR is a measure of the average interest rate at which major global banks can borrow from one another. Following allegations of rate manipulation and concerns regarding its thin liquidity, in July 2017, the U.K.
Financial Conduct Authority, which regulates LIBOR, announced that it will stop encouraging banks to provide the quotations needed to sustain LIBOR after 2021. This event will likely cause LIBOR to cease to be published. Before then, it is expected
that market participants such as the fund and SSB will transition to the use of different reference or benchmark rates. However, although regulators have suggested alternative rates, there is currently no definitive information regarding the future
utilization of LIBOR or of any replacement rate.
It is
uncertain what impact the discontinuation of LIBOR will have on the use of LIBOR as a reference rate in the LA. It is expected that market participants will amend financial instruments referencing LIBOR, such as the LA, to include fallback
provisions and other measures that contemplate the discontinuation of LIBOR or other similar market disruption events, but neither the effect of the transition process nor the viability of such measures is known. In addition, there are obstacles to
converting certain longer term securities and transactions to a new benchmark or benchmarks and the effectiveness of one alternative reference rate versus multiple alternative reference rates in new or existing financial instruments and products has
not been determined. As market participants transition away from LIBOR, LIBOR's usefulness may deteriorate, which could occur prior to the end of 2021. The transition process may lead to increased volatility and illiquidity in markets that currently
rely on LIBOR to determine interest rates. LIBOR's deterioration may adversely affect the liquidity and/or market value of securities that use LIBOR as a benchmark interest rate. The use of an alternative reference rate, or the transition process to
an alternative reference rate, may result in increases to the interest paid by the fund pursuant to the LA and, therefore, may adversely affect the fund's performance.
Note 10—Purchase and sale of securities
Purchases and sales of securities, other than short-term
investments, amounted to $203,181,086 and $236,982,288, respectively, for the year ended October 31, 2019.
Note 11—Industry or sector risk
The fund generally invests a large percentage of its assets in
one or more particular industries or sectors of the economy. If a large percentage of the fund's assets are economically tied to a single or small number of industries or sectors of the economy, the fund will be less diversified than a more broadly
diversified fund, and it may cause the fund to underperform if that industry or sector underperforms. In addition, focusing on a particular industry or sector may make the fund’s NAV more volatile. Further, a fund that invests in particular
industries or sectors is particularly susceptible to the impact of market, economic, regulatory and other factors affecting those industries or sectors. Financial services companies can be hurt by economic declines, changes in interest rates,
regulatory and market impacts.
|
|
ANNUAL REPORT | JOHN HANCOCK Premium Dividend Fund
|
28
|
Note 12—New accounting pronouncement
In March 2017, the Financial Accounting Standards Board issued
Accounting Standards Update (ASU) 2017-08, Premium Amortization on Purchased Callable Debt Securities, which shortens the premium amortization period for purchased non contingently callable debt securities. The standard is effective for annual
periods beginning after December 15, 2018 and interim periods within those fiscal years. Management has performed an analysis and has determined that the ASU will not have a material impact to the fund.
|
29
|
JOHN HANCOCK Premium
Dividend Fund | ANNUAL REPORT
|
|
Report of Independent Registered Public Accounting
Firm
To the Board of Trustees and Shareholders of John Hancock
Premium Dividend Fund
Opinion on the Financial
Statements
We have audited the accompanying statement of
assets and liabilities, including the Fund’s investments, of John Hancock Premium Dividend Fund (the "Fund") as of October 31, 2019, the related statements of operations and cash flows for the year ended October 31, 2019, the statements of
changes in net assets for each of the two years in the period ended October 31, 2019, including the related notes, and the financial highlights for each of the five years in the period ended October 31, 2019 (collectively referred to as the
“financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Fund as of October 31, 2019, the results of its operations and its cash flows for the year then
ended, the changes in its net assets for each of the two years in the period ended October 31, 2019 and the financial highlights for each of the five years in the period ended October 31, 2019 in conformity with accounting principles generally
accepted in the United States of America.
Basis for
Opinion
These financial statements are the responsibility
of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States)
(PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits of these financial statements in
accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing procedures to assess the risks
of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our procedures included confirmation
of securities owned as of October 31, 2019 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our
opinion.
/s/ PricewaterhouseCoopers LLP
Boston, Massachusetts
December 13, 2019
We have served as the auditor of one or more investment
companies in the John Hancock group of funds since 1988.
|
|
ANNUAL REPORT | JOHN HANCOCK PREMIUM DIVIDEND FUND
|
30
|
|
Tax
information (Unaudited)
|
|
For
federal income tax purposes, the following information is furnished with respect to the distributions of the fund, if any, paid during its taxable year ended October 31, 2019.
The fund reports the maximum amount allowable of its net
taxable income as eligible for the corporate dividends-received deduction.
The fund reports the maximum amount allowable of its net
taxable income as qualified dividend income as provided in the Jobs and Growth Tax Relief Reconciliation Act of 2003.
The fund paid $22,187,367 in long term capital gain
dividends.
The fund reports the maximum amount allowable
of its Section 199A dividends as defined in Proposed Treasury Regulation §1.199A-3(d).
Eligible shareholders will be mailed a 2019 Form 1099-DIV in
early 2020. This will reflect the tax character of all distributions paid in calendar year 2019.
Please consult a tax advisor regarding the tax consequences of
your investment in the fund.
|
31
|
JOHN HANCOCK PREMIUM
DIVIDEND FUND | ANNUAL REPORT
|
|
ITEM 2. CODE OF ETHICS.
As of the end of the period, October 31, 2019, the registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, that applies to its Chief Executive Officer, Chief Financial Officer and Treasurer (respectively, the principal executive officer, the principal financial officer and the principal accounting officer, the “Senior Financial Officers”). A copy of the code of ethics is filed as an exhibit to this Form N-CSR.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Peter S. Burgess is the audit committee financial expert and is “independent”, pursuant to general instructions on Form N-CSR Item 3.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) Audit Fees
The aggregate fees for John Hancock Premium Dividend Fund billed for professional services rendered by the principal accountant(s) for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant(s) in connection with statutory and regulatory filings or engagements amounted to $46,697 for the fiscal year ended October 31, 2019 and $49,299 for the fiscal year ended October 31, 2018. These fees were billed to the registrant and were approved by the registrant’s audit committee.
(b) Audit-Related Services
Audit-related fees for John Hancock Premium Dividend Fund amounted to $5 for the fiscal year ended October 31, 2019 and $0 for the fiscal year ended October 31, 2018 billed to the registrant or to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant ("control affiliates"). The nature of the services comprising the audit-related services was the review of litigation related expenses. In addition, amounts billed to control affiliates for service provider internal controls reviews were $116,467 and $110,200 for the fiscal years ended October 31, 2019 and 2018, respectively.
(c) Tax Fees
The aggregate fees for John Hancock Premium Dividend Fund billed for professional services rendered by the principal accountant(s) for the tax compliance, tax advice and tax planning (“tax fees”) amounted to $3,837 for the fiscal year ended October 31, 2019 and $3,725 for the fiscal year ended October 31, 2018. The nature of the services comprising the tax fees was the review of the registrant’s tax returns and tax distribution requirements. These fees were billed to the registrant and were approved by the registrant’s audit committee.
(d) All Other Fees
The all other fees for John Hancock Premium Dividend Fund billed to the registrant for products and services provided by the principal accountant were $84 for the fiscal year ended October 31, 2019 and $239 for the fiscal year ended October 31, 2018 billed to control affiliates for products and services provided by the principal accountant. These fees were approved by the registrant’s audit committee.
(e)(1) Audit Committee Pre-Approval Policies and Procedures:
The trust’s Audit Committee must pre-approve all audit and non-audit services provided by the independent registered public accounting firm (the “Auditor”) relating to the operations or financial reporting of the funds. Prior to the commencement of any audit or non-audit services to a fund, the Audit Committee reviews the services to determine whether they are appropriate and permissible under applicable law.
The trust’s Audit Committee has adopted policies and procedures to, among other purposes, provide a framework for the Committee’s consideration of audit-related and non-audit services by the Auditor. The policies and procedures require that any audit-related and non-audit service provided by the Auditor and any non-audit service provided by the Auditor to a fund service provider that relates directly to the operations and financial reporting of a fund are subject to approval by the Audit Committee before such service is provided. Audit-related services provided by the Auditor that are expected to exceed $25,000 per instance/per fund are subject to specific pre-approval by the Audit Committee. Tax services provided by the Auditor that are expected to exceed $30,000 per instance/per fund are subject to specific pre-approval by the Audit Committee.
All audit services, as well as the audit-related and non-audit services that are expected to exceed the amounts stated above, must be approved in advance of provision of the service by formal resolution of the Audit Committee. At the regularly scheduled Audit Committee meetings, the Committee reviews a report summarizing the services, including fees, provided by the Auditor.
(e)(2) Services approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X:
Audit-Related Fees, Tax Fees and All Other Fees:
There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01 of Regulation S-X.
(f) According to the registrant’s principal accountant, for the fiscal year ended October 31, 2019, the percentage of hours spent on the audit of the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons who were not full-time, permanent employees of principal accountant was less than 50%.
(g) The aggregate non-audit fees billed by the registrant's accountant(s) for services rendered to the registrant and rendered to the registrant's control affiliates for each of the last two fiscal years of the registrant were $$962,139 for the fiscal year ended October 31, 2019 and $2,064,999 for the fiscal year ended October 31, 2018.
(h) The audit committee of the registrant has considered the non-audit services provided by the registrant’s principal accountant(s) to the control affiliates and has determined that the services that were not pre-approved are compatible with maintaining the principal accountant(s)' independence.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant has a separately-designated standing audit committee comprised of independent trustees. The members of the audit committee are as follows:
Peter S. Burgess - Chairman
Charles L. Bardelis
Theron S. Hoffman
ITEM 6. SCHEDULE OF INVESTMENTS.
(a) Not applicable.
(b) Not applicable.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
See attached exhibit - Proxy Voting Policies and Procedures.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Information about the portfolio managers
Management Biographies
Below is a list of the Manulife Investment Management (US) LLC (“Manulife IM (US)”) portfolio managers who share joint responsibility for the day-to-day investment management of the Fund. It provides a brief summary of their business careers over the past five years. Information is provided as of October 31, 2019.
Joseph H. Bozoyan, CFA
Managing Director and Portfolio Manager
Manulife Investment Management (US) LLC since 2015
Began business career in 1993
Managed the Fund since 2015
Bradley Lutz, CFA
Managing Director and Portfolio Manager
Manulife Investment Management (US) LLC since 2002
Began business career in 1992
Managed the Fund since 2018
Other Accounts the Portfolio Managers are Managing
The table below indicates, for each portfolio manager, information about the accounts over which the portfolio manager has day-to-day investment responsibility. All information on the number of accounts and total assets in the table is as of October 31, 2019. For purposes of the table, “Other Pooled Investment Vehicles” may include investment partnerships and group trusts, and “Other Accounts” may include separate accounts for institutions or individuals, insurance company general or separate accounts, pension funds and other similar institutional accounts.
|
|
Registered Investment
Companies
|
Other Pooled
Investment Vehicles
|
Other Accounts
|
|
|
Number
of
Accounts
|
Total
Assets
$Million
|
Number
of
Accounts
|
Total
Assets
$Million
|
Number
of
Accounts
|
Total
Assets
$Million
|
|
Joseph H. Bozoyan, CFA
|
4
|
3,847
|
3
|
464
|
None
|
None
|
|
Bradley Lutz, CFA
|
4
|
3,847
|
2
|
414
|
4
|
263
|
Number and value of accounts within the total accounts that are subject to a performance-based advisory fee: None
Conflicts of Interest. When a portfolio manager is responsible for the management of more than one account, the potential arises for the portfolio manager to favor one account over another. The principal types of potential conflicts of interest that may arise are discussed below. For the reasons outlined below, the Fund does not believe that any material conflicts are likely to arise out of a portfolio manager’s responsibility for the management of the Fund as well as one or more other accounts. The Advisor and Subadvisor have adopted procedures that are intended to monitor compliance with the policies referred to in the following paragraphs. Generally, the risks of such conflicts of interests are increased to the extent that a portfolio manager has a financial incentive to favor one account over another. The Advisor and Subadvisor have structured their compensation arrangements in a manner that is intended to limit such potential for conflicts of interests. See “Compensation of Portfolio Managers” below.
|
●
|
A portfolio manager could favor one account over another in allocating new investment opportunities that have limited supply, such as initial public offerings and private placements. If, for example, an initial public offering that was expected to appreciate in value significantly shortly after the offering was allocated to a single account, that account may be expected to have better investment performance than other accounts that did not receive an allocation on the initial public offering. The Subadvisor has policies that require a portfolio manager to allocate such investment opportunities in an equitable manner and generally to allocate such investments proportionately among all accounts with similar investment objectives.
|
|
|
|
|
●
|
A portfolio manager could favor one account over another in the order in which trades for the accounts are placed. If a portfolio manager determines to purchase a security for more than one account in an aggregate amount that may influence the market price of the security, accounts that purchased or sold the security first may receive a more favorable price than accounts that made subsequent transactions. The less liquid the market for the security or the greater the percentage that the proposed aggregate purchases or sales represent of average daily trading volume, the greater the potential for accounts that make subsequent purchases or sales to receive a less favorable price. When a portfolio manager intends to trade the same security for more than one account, the policies of the Subadvisor generally require that such trades be “bunched,” which means that the trades for the individual accounts are aggregated and each account receives the same price. There are some types of accounts as to which bunching may not be possible for contractual reasons (such as directed brokerage arrangements). Circumstances may also arise where the trader believes that bunching the orders may not result in the best possible price. Where those accounts or circumstances are involved, the Subadvisor will place the order in a manner intended to result in as favorable a price as possible for such client.
|
|
|
|
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●
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A portfolio manager could favor an account if the portfolio manager’s compensation is tied to the performance of that account rather than all accounts managed by the portfolio manager. If, for example, the portfolio manager receives a bonus based upon the performance of certain accounts relative to a benchmark while other accounts are disregarded for this purpose, the portfolio manager will have a financial incentive to seek to have the accounts that determine the portfolio manager’s bonus achieve the best possible performance to the possible detriment of other accounts. Similarly, if the Subadvisor receives a performance-based advisory fee, the portfolio manager may favor that account, whether or not the performance of that account directly determines the portfolio manager’s compensation. The investment performance on specific accounts is not a factor in determining the portfolio manager’s compensation. See “Compensation of Portfolio Managers” below. Neither the Advisor nor the Subadvisor receives a performance-based fee with respect to any of the accounts managed by the portfolio managers.
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A portfolio manager could favor an account if the portfolio manager has a beneficial interest in the account, in order to benefit a large client or to compensate a client that had poor returns. For example, if the portfolio manager held an interest in an investment partnership that was one of the accounts managed by the portfolio manager, the portfolio manager would have an economic incentive to favor the account in which the portfolio manager held an interest. The Subadvisor imposes certain trading restrictions and reporting requirements for accounts in which a portfolio manager or certain family members have a personal interest in order to confirm that such accounts are not favored over other accounts.
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If the different accounts have materially and potentially conflicting investment objectives or strategies, a conflict of interest may arise. For example, if a portfolio manager purchases a security for one account and sells the same security short for another account, such trading pattern could disadvantage either the account that is long or short. In making portfolio manager assignments, the Subadvisor seeks to avoid such potentially conflicting situations. However, where a portfolio manager is responsible for accounts with differing investment objectives and policies, it is possible that the portfolio manager will conclude that it is in the best interest of one account to sell a portfolio security while another account continues to hold or increase the holding in such security.
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Compensation of Portfolio Managers. The Subadvisor has adopted a system of compensation for portfolio managers and others involved in the investment process that is applied systematically among investment professionals. At the Subadvisor, the structure of compensation of investment professionals is currently composed of the following basic components: base salary and short-and long-term incentives. The following describes each component of the compensation package for the individuals identified as a portfolio manager for the Funds.
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Base salary. Base compensation is fixed and normally reevaluated on an annual basis. The Subadvisor seeks to set compensation at market rates, taking into account the experience and responsibilities of the investment professional.
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Incentives. Only investment professionals are eligible to participate in the short-and long-term incentive plan. Under the plan, investment professionals are eligible for an annual cash award. The plan is intended to provide a competitive level of annual bonus compensation that is tied to the investment professional achieving superior investment performance and aligns the financial incentives of the Subadvisor and the investment professional. Any bonus under the plan is completely discretionary, with a maximum annual bonus that may be well in excess of base salary. Payout of a portion of this bonus may be deferred for up to five years. While the amount of any bonus is discretionary, the following factors are generally used in determining bonuses under the plan:
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Investment Performance: The investment performance of all accounts managed by the investment professional over one, three and five-year periods are considered, and no specific benchmark is used to measure performance. With respect to fixed income accounts, relative yields are also used to measure performance.
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Financial Performance: The profitability of the Subadvisor and its parent company are also considered in determining bonus awards.
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Non-Investment Performance: To a lesser extent, intangible contributions, including the investment professional’s support of client service and sales activities, new fund/strategy idea generation, professional growth and development, and management, where applicable, are also evaluated when determining bonus awards.
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In addition to the above, compensation may also include a revenue component for an investment team derived from a number of factors including, but not limited to, client assets under management, investment performance, and firm metrics.
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Manulife Equity Awards. A limited number of senior investment professionals may receive options to purchase shares of Manulife Financial stock. Generally, such option would permit the investment professional to purchase a set amount of stock at the market price on the date of grant. The option can be exercised for a set period (normally a number of years or until termination of employment) and the investment professional would exercise the option if the market value of Manulife Financial stock increases. Some investment professionals may receive restricted stock grants, where the investment professional is entitled to receive the stock at no or nominal cost, provided that the stock is forgone if the investment professional’s employment is terminated prior to a vesting date.
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Deferred Incentives. Investment professionals may receive deferred incentives which are fully invested in strategies managed by the team/individuals as well as other Manulife Asset Management strategies.
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The Subadvisor also permits investment professionals to participate on a voluntary basis in a deferred compensation plan, under which the investment professional may elect on an annual basis to defer receipt of a portion of their compensation until retirement. Participation in the plan is voluntary.
Share Ownership by Portfolio Managers. For purposes of these tables, “similarly managed accounts” include all accounts that are managed (i) by the same portfolio managers that are jointly and primarily responsible for the day-to-day management of the Fund; and (ii) with an investment style, objective, policies and strategies substantially similar to those that are used to manage the Fund.
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Portfolio Manager
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Range of Beneficial
Ownership in the Fund
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Range of Beneficial
Ownership in similarly
managed accounts
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Josepn H. Bozoyan, CFA
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$10,001-$50,000
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$10,001-$50,000
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Bradley Lutz, CFA
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$10,001-$50,000
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$10,001-$50,000
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ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
(a) Not applicable.
(b)
REGISTRANT PURCHASES OF EQUITY SECURITIES
|
Period
|
Total number of
shares
purchased
|
Average price
per share
|
Total number of
shares
purchased as
part of publicly
announced
plans*
|
Maximum
number of
shares that may
yet be
purchased
under the plans*
|
|
Nov-18
|
-
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-
|
-
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4,858,319
|
|
Dec-18
|
-
|
-
|
-
|
4,858,319
|
|
Jan-19
|
-
|
-
|
-
|
4,858,319
|
|
Feb-19
|
-
|
-
|
-
|
4,858,319
|
|
Mar-19
|
-
|
-
|
-
|
4,858,319
|
|
Apr-19
|
-
|
-
|
-
|
4,858,319
|
|
May-19
|
-
|
-
|
-
|
4,858,319
|
|
Jun-19
|
-
|
-
|
-
|
4,858,319
|
|
Jul-19
|
-
|
-
|
-
|
4,858,319
|
|
Aug-19
|
-
|
-
|
-
|
4,858,319
|
|
Sep-19
|
-
|
-
|
-
|
4,858,319
|
|
Oct-19
|
-
|
-
|
-
|
4,858,319
|
|
Total
|
-
|
-
|
-
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* On December 17, 2014, the Board of Trustees approved a share repurchase program, which is subsequently reviewed and approved by the Board of Trustees each year in December. Under the share repurchase program, the Fund may purchase in the open market, up to 10% of its outstanding common shares as of December 31, 2018. The current share purchase plan will remain in effect between January 1, 2019 to December 31, 2019.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) The registrant has adopted procedures by which shareholders may recommend nominees to the registrant's Board of Trustees. A copy of the procedures is filed as an exhibit to this Form N-CSR. See attached "John Hancock Funds – Nominating and Governance Committee Charter".
ITEM 11. CONTROLS AND PROCEDURES.
(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.
(b) There were no changes in the registrant's internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 12. DISCLOSURE OF SECURITIES LENDING ACTIVITIES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
The Fund did not participate directly in securities lending activities. See Note 8 to financial statements in Item 1.
ITEM 13. EXHIBITS.
(a)(1) Code of Ethics for Senior Financial Officers is attached.
(a)(2) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.
(b)(1) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.
(c)(1) Proxy Voting Policies and Procedures are attached.
(c)(2) Submission of Matters to a Vote of Security Holders is attached. See attached "John Hancock Funds - Nominating and Governance Committee Charter".
(c)(3) Registrant’s notice to shareholders pursuant to Registrant’s exemptive order granting an exemption from Section 19(b) of the Investment Company Act of 1940, as amended and Rule 19b-1 thereunder regarding distributions made pursuant to the Registrant’s Managed Distribution Plan.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
John Hancock Premium Dividend Fund
|
By:
|
|
/s/ Andrew Arnott
|
|
|
|
Andrew Arnott
|
|
|
|
President
|
|
|
|
Date:
|
|
December 13, 2019
|
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
|
By:
|
|
/s/ Andrew Arnott
|
|
|
|
Andrew Arnott
|
|
|
|
President
|
|
|
|
Date:
|
|
December 13, 2019
|
|
|
|
By:
|
|
/s/ Charles A. Rizzo
|
|
|
|
Charles A. Rizzo
|
|
|
|
Chief Financial Officer
|
|
|
|
Date:
|
|
December 13, 2019
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