JOHN HANCOCK DIVERSIFIED INCOME FUND ANNOUNCES LEVERAGE FINANCING AND PORTFOLIO MANAGEMENT UPDATE

Rhea-AI Summary

John Hancock Diversified Income Fund (NYSE: HEQ) entered a liquidity agreement with State Street providing up to $48.0 million via a line of credit, securities lending and reverse repurchase agreements to add selective leverage and enhance income potential. The Fund also named Brendan Fludder, CFA as portfolio manager, effective March 31, 2026.

The Fund said leverage use will be selective and further details on the liquidity agreement and borrowings are disclosed in the Fund's shareholder report.

Positive

• Established a liquidity agreement providing $48.0 million maximum facility
• Adds Brendan Fludder, CFA as portfolio manager with 15+ years experience

Negative

• Introduces up to $48.0 million of borrowings, increasing the Fund's leverage exposure

News Market Reaction – HEQ

+1.20%

+1.20% News Effect

On the day this news was published, HEQ gained 1.20%, reflecting a mild positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

Market Context

This announcement detailed a new $48.0 million liquidity agreement, giving HEQ added flexibility to ...

Analysis

This announcement detailed a new $48.0 million liquidity agreement, giving HEQ added flexibility to use leverage via credit lines, securities lending, and reverse repos, and introduced an additional experienced portfolio manager. It follows recent disclosures on income strength and managed distributions, as well as updated net asset and return figures in regulatory filings. Investors may watch how leverage is actually utilized, its impact on income and volatility, and how NAV performance tracks against the fund’s stated diversified income objectives.

Key Figures

Leverage facility size: $48.0 million Industry experience: More than 15 years Year joined Wellington: 2011 +5 more

8 metrics

Leverage facility size $48.0 million Maximum amount under new liquidity agreement

Industry experience More than 15 years Experience of new portfolio manager Brendan Fludder

Year joined Wellington 2011 Brendan Fludder tenure at Wellington

Current price $10.86 Pre-news trading level

Daily price change 0.57% Pre-news 24h price change

52-week high $11.58 Upper end of 1-year range

52-week low $9.23 Lower end of 1-year range

Price vs 52-week high -6.22% Discount to 52-week high before news

Historical Context

2 past events · Latest: Jan 13 (Positive)

Pattern 2 events

Date	Event	Sentiment	24h Move	Catalyst
Jan 13	Income results update	Positive	-0.5%	Reported higher net investment income and per-share income for HEQ.
Dec 31	Distribution notice	Neutral	+0.2%	Detailed quarterly managed distribution and its income/gains composition.

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Pattern Detected

Limited history shows mixed reactions: income strength saw a slight negative move, while distribution details drew a small positive response.

Recent Company History

Recent disclosures for HEQ have centered on income generation and managed distributions. On Dec 31, 2025, the fund detailed a $0.2500 quarterly distribution and the mix of income, gains, and return of capital. On Jan 13, 2026, HEQ reported higher net investment income per share of $0.123 versus $0.080 prior. Despite the stronger income metrics, the stock moved slightly lower after that update. Today’s leverage and portfolio-management changes build on this income-focused narrative.

Key Terms

liquidity agreement, line of credit, securities lending, reverse repurchase agreements, +2 more

6 terms

liquidity agreement financial

"entered into a liquidity agreement (LA) with State Street Bank and Trust Company"

A liquidity agreement is a contract where a company arranges for a financial firm to buy and sell its shares or provide cash on short notice to keep trading smooth and prevent wild price swings. Think of it as hiring a backup shopper to keep a store’s shelves stocked so customers always find what they need. For investors, it matters because such agreements can reduce short-term volatility and improve the ability to buy or sell shares, though they can also signal reliance on outside support.

line of credit financial

"through a line of credit, securities lending and reverse repurchase agreements"

A line of credit is a flexible borrowing arrangement that lets a company draw money up to a preset limit, repay it, and borrow again as needed—similar to a business credit card or an emergency tap on a savings account. It matters to investors because it shows how a firm manages short-term cash needs and growth funding without taking a single large loan; access, cost, and attached conditions can affect liquidity, interest expenses and financial risk.

securities lending financial

"through a line of credit, securities lending and reverse repurchase agreements"

Securities lending is when an owner of stocks or bonds temporarily loans them to another party, usually so the borrower can sell them short or meet settlement needs; the lender receives a fee and typically some form of security in return. Investors should care because lending can generate extra income on holdings and affects market liquidity and short-selling activity, much like renting out a spare room brings income while someone else uses the space.

View in glossary

reverse repurchase agreements financial

"through a line of credit, securities lending and reverse repurchase agreements"

A reverse repurchase agreement is a short-term, collateralized loan in which one party buys a security from another with a promise to sell it back at a set price on a specific later date; for the buyer this functions like lending cash and holding the security as collateral. Think of it as parking money in a very short-term, secured savings account. Investors care because these transactions influence short-term interest rates, market liquidity and where large cash balances earn safe, predictable returns, and they can signal stress or stability in funding markets.

Chartered Financial Analyst financial

"Mr. Fludder received a BS from Providence College and holds the Chartered Financial Analyst designation."

A Chartered Financial Analyst (CFA) is a professional credential awarded to people who pass a series of demanding exams and meet work and ethical requirements in investments and financial analysis. For investors, a CFA serves like a certified mechanic for money — a signal that the adviser or manager has tested knowledge, a disciplined approach, and an ethical commitment, which can make investment advice and portfolio decisions more trustworthy.

forward-looking statements regulatory

"not historical facts are forward-looking statements as defined by the United States securities laws."

Forward-looking statements are predictions or plans that companies share about what they expect to happen in the future, like estimating sales or profits. They matter because they help investors understand a company's outlook, but since they are based on guesses and assumptions, they can sometimes be wrong.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

BOSTON, March 31, 2026 /PRNewswire/ - John Hancock Diversified Income Fund (NYSE: HEQ) (the "Fund"), a closed-end fund managed by John Hancock Investment Management LLC (the "Adviser") and sub-advised by Wellington Management Company LLP (the "Sub-adviser"), announced today that it has successfully entered into a liquidity agreement (LA) with State Street Bank and Trust Company that allows it to borrow or otherwise access up to $48.0 million (maximum facility amount) through a line of credit, securities lending and reverse repurchase agreements. The addition of leverage is intended to provide the Fund with increased flexibility as it seeks to deliver diversified sources of income across a broad range of asset classes. The Fund intends to use leverage selectively to help enhance income potential and seek to expand the Fund's ability to identify and pursue compelling opportunities.  Additional information regarding the LA, as well as the Fund's use of borrowings, is disclosed in the Fund's shareholder report.

Additionally, effective today, Brendan Fludder, CFA, joins Roberto Isch, CFA, as a portfolio manager on the Fund. Mr. Fludder joined Wellington in 2011 and has more than 15 years of experience in the investment management industry. As portfolio manager, Mr. Fludder manages multi-strategy approaches where he is responsible for manager selection, portfolio construction, and risk management. He is a member of the Hedge Fund Advisory Committee and serves as chair of Wellington Management Canada Board of Directors. Mr. Fludder received a BS from Providence College and holds the Chartered Financial Analyst designation.

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 Manulife John Hancock Investments

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 Wealth & Asset Management

As part of Manulife Financial Corporation, Manulife Wealth & Asset Management provides global investment, financial advice, and retirement plan services to 19 million individuals, institutions, and retirement plan members worldwide. Our mission is to make decisions easier and lives better by empowering people today to invest for a better tomorrow. As a committed partner to our clients and as a responsible steward of investor capital, we offer a heritage of risk management, deep expertise across public and private markets, and comprehensive retirement plan services. We seek to provide better investment and impact outcomes and to help people confidently save and invest for a more secure financial future. Not all offerings are available in all jurisdictions. For additional information, please visit manulifeim.com.

Media Contact:	Gordon Haight
	(617) 572-0034
Investor Contact:	(800) 843-0090

View original content:https://www.prnewswire.com/news-releases/john-hancock-diversified-income-fund-announces-leverage-financing-and-portfolio-management-update-302730617.html

SOURCE John Hancock Investment Management

FAQ

What is the size and purpose of HEQ's liquidity agreement announced March 31, 2026?

The Fund secured a $48.0 million facility to access borrowing and repo capacity. According to John Hancock Diversified Income Fund, the agreement allows use of line of credit, securities lending and reverse repos to provide flexibility and pursue income opportunities.

How will HEQ use the new leverage facility to affect shareholder income?

The Fund intends to use leverage selectively to help enhance income potential for shareholders. According to John Hancock Diversified Income Fund, leverage is targeted to expand the Fund's ability to pursue diversified income across asset classes.

Who joined HEQ's portfolio management team on March 31, 2026?

Brendan Fludder, CFA, joined as a portfolio manager alongside Roberto Isch, CFA. According to John Hancock Diversified Income Fund, Fludder has more than 15 years of investment experience and manages multi-strategy approaches and manager selection.

Which counterparty provides HEQ's liquidity agreement and what instruments are included?

State Street Bank and Trust Company is the counterparty for the liquidity agreement. According to John Hancock Diversified Income Fund, the facility covers a line of credit, securities lending and reverse repurchase agreements.

Where can HEQ investors find more details about the Fund's borrowings and liquidity agreement?

Additional information is disclosed in the Fund's shareholder report and regulatory filings. According to John Hancock Diversified Income Fund, the shareholder report contains specifics on the liquidity agreement and the Fund's use of borrowings.