John Hancock Tax-Advantaged Dividend Fund: A Conservative Investor's Choice for Utilities Exposure and 7.7% Yield

The John Hancock Tax-Advantaged Dividend Fund (HTD) is a closed-end fund launched in 2004 with a primary objective of providing high after-tax income and secondary objective of capital appreciation. It invests in a diversified portfolio of common stocks, including utilities, and offers a 7.7% yield, making it a reliable income payer for conservative investors.

The John Hancock Tax-Advantaged Dividend Income Fund (HTD), launched on February 27, 2004, is a closed-end fund (CEF) that aims to provide high after-tax income and secondary capital appreciation. Managed by Manulife Investment Management, HTD offers a diversified investment strategy that includes common stocks, preferred shares, debt securities, and derivatives.

Investment Strategy and Portfolio Composition

HTD employs a multi-asset strategy, investing in a broad range of securities. As of June 30, 2025, approximately 44% of the fund's holdings were allocated to utilities, 34% to financials, 9% to energy, and 6% to communications services. The fund's top ten holdings include American Electric Power (AEP), Duke Energy Corp. (DUK), and Entergy Corp. (ETR) HTD: Multi-Asset Exposure With A Utilities Lean^[1].

Distribution and Yield

HTD pays an appealing monthly distribution rate of $1.90 per share, with a forward yield of 7.66% HTD: Multi-Asset Exposure With A Utilities Lean^[1]. This makes it a reliable income payer for conservative investors. The fund's distribution has historically exhibited durability, providing investors with regular, current income.

Performance and Risk Factors

Since its inception, HTD has returned 11.7% at net asset value (NAV) and 9.3% at market price HTD: Offering A High Level Of After-Tax Total Return, Yet Still Discounted^[2]. However, the fund has moderately underperformed peer strategies in certain periods, such as the Eaton Vance Enhanced Equity Income Fund II (EOS) and the Tax-Advantaged Dividend Income Fund (EVT) HTD: Multi-Asset Exposure With A Utilities Lean^[1].

Investors should be aware of the risks associated with HTD, including exposure to fixed income securities, interest rate policy, inflation, and sector concentration in utilities and financials HTD: Multi-Asset Exposure With A Utilities Lean^[1]. The fund's high net expense ratio of 443 basis points (bps) through July 31, 2026, should also be considered HTD: Multi-Asset Exposure With A Utilities Lean^[1].

Conclusion

The John Hancock Tax-Advantaged Dividend Income Fund (HTD) offers a diversified investment strategy with a focus on utilities and financials. It provides a high after-tax income yield and has a proven track record of performance. However, investors should carefully weigh the fund's risks, including high net expense ratios and potential sector concentration, before making an investment decision.

References

HTD: Multi-Asset Exposure With A Utilities Lean^[1] https://seekingalpha.com/article/4828559-htd-multi-asset-exposure-with-a-utilities-lean
HTD: Offering A High Level Of After-Tax Total Return, Yet Still Discounted^[2] https://seekingalpha.com/article/4828974-htd-offering-a-high-level-of-after-tax-total-return-yet-still-discounted