JOHN HANCOCK HEDGED EQUITY & INCOME FUND - REQUIRED NOTICE TO SHAREHOLDERS - SOURCES OF DISTRIBUTION UNDER SECTION 19(a)

Rhea-AI Summary

John Hancock Hedged Equity & Income Fund (HEQ) has announced its quarterly distribution of $0.2500 per share for December 2024. The distribution sources include: 33% from net investment income, 28% from net realized long-term capital gains, and 39% from return of capital. The fund's performance metrics show an average annual total return of 6.72% over the past 5 years and a cumulative total return of 14.65% for the fiscal year through November 30, 2024. The current annualized distribution rate is 8.06% of NAV.

Positive

• Strong fiscal year performance with 14.65% cumulative total return
• Solid 5-year average annual return of 6.72%
• High distribution rate of 8.06% relative to NAV
• 52% of year-to-date distributions came from net investment income

Negative

• 39% of current distribution represents return of capital, not actual earnings
• No short-term capital gains in current distribution period

Insights

Financial Distribution Analyst

This quarterly distribution announcement reveals critical financial metrics for HEQ. The fund distributed $0.25 per share with a complex composition: 33% from net investment income, 28% from long-term capital gains and 39% from return of capital. The fund's 8.06% annualized distribution rate relative to NAV and 14.65% cumulative total return through November 2024 indicate strong performance. Notably, the fund's distribution includes a substantial return of capital component this quarter, which differs from the year-to-date pattern where no return of capital was required. This shift suggests potential challenges in generating sufficient income and gains to fully cover the fixed distribution. The 6.72% five-year average annual return demonstrates consistent but moderate long-term performance. The high proportion of return of capital in the current distribution warrants attention as it effectively returns investors' principal rather than distributing earned income or gains.

Tax Specialist

The distribution's tax implications are significant for investors. The varied composition - $0.0814 from net investment income, $0.0704 from long-term capital gains and $0.0982 from return of capital - creates different tax treatments. The return of capital portion reduces the investor's cost basis rather than being immediately taxable, while the investment income and capital gains components are taxable in the current year. Year-to-date, the fund has distributed $1.0017 per share, with 52% from investment income and 48% from capital gains, showing a more tax-efficient distribution mix over the full year compared to this quarter. The Form 1099-DIV will be important for investors' tax reporting, especially given the complex distribution composition and the presence of return of capital.

BOSTON, Dec. 31, 2024 /PRNewswire/ - John Hancock Hedged Equity & Income Fund (NYSE: HEQ) (the "Fund"), a closed-end fund managed by John Hancock Investment Management LLC (the "Adviser") and subadvised by Wellington Management Company LLP (the "Subadviser"), announced today sources of its quarterly distribution of $0.2500 per share paid to all shareholders of record as of December 12, 2024, 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 Hedged Equity & Income Fund (NYSE: HEQ) with important information concerning the distribution declared on December 2, 2024, and payable on December 31, 2024. No action is required on your part.

Distribution Period:                                                                        December 2024

Distribution Amount Per Common Share:                                     $0.2500

The following table sets forth the estimated sources of the current distribution, payable December 31, 2024, 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 10/1/2024-12/31/2024				For the fiscal year-to-date period 01/1/2024-12/31/20241
Source		Current Distribution ($)		% Breakdown of the Current Distribution		Total Cumulative Distributions ($)		% Breakdown of the Total Cumulative Distributions
Net Investment Income		0.0814		33 %		0.5218		52 %
Net Realized Short- Term Capital Gains		0.0000		0 %		0.3128		31 %
Net Realized Long- Term Capital Gains		0.0704		28 %		0.1671		17 %
Return of Capital or Other Capital Source		0.0982		39 %		0.0000		0 %
Total per common share		0.2500		100 %		1.0017		100 %
Average annual total return (in relation to NAV) for the 5 years ended on November 30, 2024								6.72 %
Annualized current distribution rate expressed as a percentage of NAV as of November 30, 2024								8.06 %
Cumulative total return (in relation to NAV) for the fiscal year through November 30, 2024								14.65 %
Cumulative fiscal year-to-date distribution rate expressed as a percentage of NAV as of November 30, 2024								8.07 %

________________________

1  The Fund's current fiscal year began on January 1, 2024 and will end on December 31, 2024.

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 2024 distribution pursuant to the Fund's managed distribution plan (the "Plan").  Under the Plan, the Fund makes fixed quarterly distributions in the amount of $0.2500 per share, which will continue to be paid quarterly until further notice.

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.

Wellington Management Company LLP is an independent and unaffiliated investment subadviser to John Hancock Hedged Equity & Income Fund.

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.

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SOURCE John Hancock Investment Management

FAQ

What is HEQ's current quarterly distribution amount for December 2024?

HEQ's quarterly distribution for December 2024 is $0.2500 per share.

What is HEQ's 5-year average annual total return as of November 2024?

The fund's 5-year average annual total return is 6.72% as of November 30, 2024.

How much of HEQ's December 2024 distribution comes from return of capital?

39% of the December 2024 distribution ($0.0982 per share) comes from return of capital.

What is HEQ's current annualized distribution rate as of November 2024?

The fund's annualized distribution rate is 8.06% of NAV as of November 30, 2024.

What was HEQ's cumulative total return for the fiscal year through November 2024?

The fund's cumulative total return for the fiscal year through November 30, 2024, was 14.65%.