John Hancock Tax-Advantaged Dividend Income Fund Maintains Steady Monthly Distributions Amid Market Volatility

The John Hancock Tax-Advantaged Dividend Income Fund (NYSE: HTD) has reaffirmed its commitment to predictable income streams with its May 2025 distribution of $0.1380 per share, consistent with its managed distribution plan. This monthly payout, now a hallmark of the fund’s strategy, offers investors a steady income flow even as markets grapple with shifting economic conditions.

Distribution Details and Key Dates

The May distribution, declared on May 1, 2025, adheres to the fund’s structured schedule:
- Ex-Dividend Date: May 12, 2025 (share price adjusts downward to reflect the payout).
- Record Date: May 12, 2025 (holders of record receive the distribution).
- Payment Date: May 30, 2025 (funds disbursed to shareholders).

This continuity underscores the fund’s goal of providing reliable income, a feature increasingly valued by retirees and income-focused investors.

Breaking Down the Distribution Sources

While the May distribution’s exact composition remains preliminary, April 2025’s breakdown offers insight. Of the $0.1380 per share, 33% was attributed to return of capital, a practice that returns investors’ principal rather than earnings. This contrasts with the fund’s fiscal year-to-date (November 1, 2024–April 30, 2025) performance, where 71% of distributions stemmed from net investment income (see table below).

| Source | Current Distribution ($) | % of Distribution |
|-------------------------------------|-----------------------------|-----------------------|
| Net Investment Income | $0.0481 | 35% |
| Net Realized Short-Term Capital Gains| $0.0129 | 9% |
| Net Realized Long-Term Capital Gains | $0.0320 | 23% |
| Return of Capital/Other Capital | $0.0450 | 33% |
| Total | $0.1380 | 100% |

Performance and Risks to Consider

The fund’s 5-year average annual total return of 14.54% (as of March 31, 2025) reflects strong historical performance, but investors must weigh this against the 6.50% annualized distribution rate (relative to net asset value, or NAV). A sustained return of capital component could erode principal over time, a critical consideration for long-term holders.

The managed distribution plan guarantees monthly payouts, but it is not immune to market shifts. The fund’s board retains the authority to adjust or terminate distributions—a risk underscored by forward-looking statements in its disclosures.

Tax Implications and Caution Flags

While distributions are structured to provide predictable income, their tax treatment remains uncertain until the end of the calendar year. The April 2025 estimate included 33% return of capital, which reduces investors’ cost basis and could trigger taxable gains in the future. The fund advises shareholders to await the Form 1: 1099-DIV for accurate tax reporting.

Conclusion: Balancing Income and Principal Preservation

The John Hancock Tax-Advantaged Dividend Income Fund’s unwavering monthly payouts—$0.1380 per share since November 2024—are a double-edged sword. On one hand, the 6.50% annualized distribution rate outpaces many fixed-income alternatives, making it attractive for income seekers. However, the reliance on return of capital (up to 33% in recent months) raises questions about capital sustainability.

Investors should prioritize two factors:
1. Fundamentals: The fund’s 14.54% 5-year return suggests underlying portfolio strength, but future distributions depend on market conditions.
2. Tax Strategy: Investors must monitor return-of-capital allocations, as they may increase tax liabilities or reduce future capital gains.

For those seeking steady income and willing to monitor these trade-offs, HTD remains a viable option. Yet, its structure demands vigilance—especially as the fund navigates an uncertain economic landscape.

For further details, visit
www.jhinvestments.com or contact John Hancock at 1-800-843-0090.