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JOHN HANCOCK FINANCIAL OPPORTUNITIES FUND - NOTICE TO SHAREHOLDERS - SOURCES OF DISTRIBUTION UNDER SECTION 19(a)

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John Hancock Financial Opportunities Fund (NYSE: BTO) announced its quarterly distribution of $0.6500 per share to shareholders of record as of December 11, 2023. The distribution sources include net investment income, net realized short-term capital gains, net realized long-term capital gains, and return of capital or other capital source. The annual total return for the 5 years ended on November 30, 2023, is 2.24%, while the cumulative total return for the fiscal year through November 30, 2023, is -12.55%.
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The distribution announcement by John Hancock Financial Opportunities Fund is a critical piece of information for both current and potential investors, as it directly relates to the fund's performance and the return on investment. The substantial portion of the distribution coming from net realized long-term capital gains (76% of the current distribution) suggests the fund has successfully realized gains from its investments over the long term, which is generally seen as a positive indicator of fund management and strategy.

However, the annualized current distribution rate of 9.75% compared to the average annual total return of 2.24% over the past five years raises questions about sustainability. This discrepancy could indicate that the high distribution rate may not be fully supported by the fund's long-term performance and might include a significant return of capital, which can erode the fund's asset base over time if it becomes a consistent pattern.

Furthermore, the -12.55% cumulative total return relative to NAV for the fiscal year signals a downturn in the fund's performance, which could be a concern for investors focused on capital appreciation. The fund's strategy and market conditions should be analyzed to understand the implications of this performance gap.

Examining the fund's distribution components provides insight into the broader economic environment. A high proportion of distribution from long-term capital gains could reflect favorable market conditions that allowed for profitable exits from long-standing investments. However, it's essential to consider the broader market trends and how they might affect the fund's future performance, especially in light of the negative cumulative total return for the fiscal year.

Investors should also be cognizant of the fund's distribution policy in the context of the overall market. A managed distribution plan may aim to provide shareholders with a predictable income stream, but it's crucial to assess whether the distributions are in line with the actual earnings and realized gains of the fund to ensure that they are not depleting the fund's capital over the long term.

The distribution data can serve as an economic indicator, reflecting the performance of the financial sector in which the fund invests. The net investment income and capital gains portions of the distribution are reflective of the underlying assets' yields and appreciation, respectively. The absence of a return of capital in the current distribution is a positive sign, indicating that the payouts are not eroding the principal value of the investments.

However, the fund's performance relative to its NAV suggests a disconnect between the distribution yield and the fund's net asset value performance. This could imply that the fund's assets are not appreciating at a rate that supports the high distribution yield, which may not be sustainable in the long run without corresponding asset growth.

BOSTON, Dec. 29, 2023 /PRNewswire/ - John Hancock Financial Opportunities Fund (NYSE: BTO) (the "Fund"), a closed-end fund managed by John Hancock Investment Management LLC and subadvised by Manulife Investment Management (US) LLC, announced today sources of its quarterly distribution of $0.6500 per share paid to all shareholders of record as of December 11, 2023, pursuant to the Fund's managed distribution plan. This press release is issued as required by an exemptive order granted to the Fund by the U.S. Securities and Exchange Commission.   

Notification of Sources of Distribution

This notice provides shareholders of the John Hancock Financial Opportunities Fund (NYSE: BTO) with important information concerning the distribution declared on December 1, 2023, and payable on December 29, 2023. No action is required on your part.

Distribution Period:                                                                       December 2023

Distribution Amount Per Common Share:                                     $0.6500

The following table sets forth the estimated sources of the current distribution, payable December 29, 2023, and the cumulative distributions paid this fiscal year to date from the following sources:  net investment income; net realized short term capital gains; net realized long term capital gains; and return of capital or other capital source. All amounts are expressed on a per common share basis and as a percentage of the distribution amount.



For the period 10/1/2023-12/31/2023

 


 

For the fiscal year-to-date period 1/1/2023-12/30/2023 1

 

Source


Current Distribution ($)


% Breakdown of the Current Distribution


Total Cumulative Distributions ($)


% Breakdown of the Total Cumulative Distributions

Net Investment Income


0.1041


16 %


0.4370


17 %

Net Realized Short- Term Capital Gains


0.0509


8 %


0.1009


4 %

Net Realized Long- Term Capital Gains


0.4950


76 %


1.5934


62 %

Return of Capital or Other Capital Source


0.0000


0 %


0.4495


 

17 %

Total per common share


0.6500


100 %


2.5808


100 %










 

Average annual total return (in relation to NAV) for the 5 years ended on November 30, 2023


2.24 %

Annualized current distribution rate expressed as a percentage of NAV as of November 30, 2023


9.75 %

 

Cumulative total return (in relation to NAV) for the fiscal year through November 30, 2023


-12.55 %

Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of November 30, 2023


9.68 %

_________________________________________________
1 The Fund's current fiscal year began on January 1, 2023 and will end on December 31, 2023.

You should not draw any conclusions about the Fund's investment performance from the amount of this distribution or from the terms of the Fund's managed distribution plan.

The Fund estimates that it has distributed more than its income and net realized capital gains; therefore, a portion of your distribution may be 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 distribution does not necessarily reflect the Fund's investment performance and should not be confused with "yield" or "income."

The amounts and sources of distributions reported in this Notice 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 has declared the December 2023 distribution pursuant to the Fund's managed distribution plan (the "Plan"). Under the Plan, the Fund makes fixed quarterly distributions in the amount of $0.6500 per share.

If you have questions or need additional information, please contact your financial professional or call the John Hancock Investment Management Closed-End Fund Information Line at 1-800-843-0090, Monday through Friday between 8:00 a.m. and 7:00 p.m., Eastern Time.

Statements in this press release that are not historical facts are forward-looking statements as defined by the United States securities laws. You should exercise caution in interpreting and relying on forward-looking statements because they are subject to uncertainties and other factors which are, in some cases, beyond the Fund's control and could cause actual results to differ materially from those set forth in the forward-looking statements.

An investor should consider a Fund's investment objectives, risks, charges and expenses carefully before investing.

About John Hancock Investment Management

A company of Manulife Investment Management, we serve investors through a unique multimanager approach, complementing our extensive in-house capabilities with an unrivaled network of specialized asset managers, backed by some of the most rigorous investment oversight in the industry. The result is a diverse lineup of time-tested investments from a premier asset manager with a heritage of financial stewardship.

About Manulife Investment Management

Manulife Investment Management is the global brand for the global wealth and asset management segment of Manulife Financial Corporation. We draw on more than a century of financial stewardship and the full resources of our parent company to serve individuals, institutions, and retirement plan members worldwide. Headquartered in Toronto, our leading capabilities in public and private markets are strengthened by an investment footprint that spans 18 geographies. We complement these capabilities by providing access to a network of unaffiliated asset managers from around the world. We're committed to investing responsibly across our businesses. We develop innovative global frameworks for sustainable investing, collaboratively engage with companies in our securities portfolios, and maintain a high standard of stewardship where we own and operate assets, and we believe in supporting financial well-being through our workplace retirement plans. Today, plan sponsors around the world rely on our retirement plan administration and investment expertise to help their employees plan for, save for, and live a better retirement. Not all offerings are available in all jurisdictions. For additional information, please visit manulife.com.

Cision View original content:https://www.prnewswire.com/news-releases/john-hancock-financial-opportunities-fund---notice-to-shareholders--sources-of-distribution-under-section-19a-302023969.html

SOURCE John Hancock Investment Management

FAQ

What is the quarterly distribution announced by John Hancock Financial Opportunities Fund (NYSE: BTO)?

The quarterly distribution announced by John Hancock Financial Opportunities Fund (NYSE: BTO) is $0.6500 per share.

When is the distribution payable to shareholders of record?

The distribution is payable on December 29, 2023.

What are the sources of the distribution declared on December 1, 2023?

The sources of the distribution include net investment income, net realized short-term capital gains, net realized long-term capital gains, and return of capital or other capital source.

What is the average annual total return for the 5 years ended on November 30, 2023?

The average annual total return for the 5 years ended on November 30, 2023, is 2.24%.

What is the cumulative total return for the fiscal year through November 30, 2023?

The cumulative total return for the fiscal year through November 30, 2023, is -12.55%.

John Hancock Financial Opportunities Fund

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