JOHN HANCOCK CLOSED-END FUND PREFERRED INCOME FUND DECLARES EARLY MONTHLY DISTRIBUTION
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Insights
The declaration of a monthly distribution by the John Hancock Preferred Income Fund is a pertinent event for investors and market participants, as it directly affects the income received from holding the fund's shares. The distribution rate of 9.58% at the current market price is a critical figure for yield-focused investors. It is essential to assess the sustainability of this yield in comparison to industry averages and the fund's historical performance.
Furthermore, the acceleration of the distribution schedule for tax purposes is a common practice and indicates compliance with federal excise tax requirements. This adjustment is unlikely to have significant long-term implications but provides a short-term cash flow benefit to investors.
It is also crucial to note that a portion of the distribution may come from a return of capital rather than net investment income. This can affect the fund's capital base and may not be sustainable in the long run. Investors should monitor the fund's ability to generate income and the potential impact on the fund's net asset value.
Investors should be aware that the distribution's tax characterization is crucial for their tax planning. The notice indicating that the distribution may not consist solely of net investment income but could include a return of capital suggests that investors will need to wait for the final tax characterization to be disclosed on Form 1099-DIV for accurate tax reporting.
This information is important for investors to understand the tax efficiency of their investment and the potential tax obligations that arise from these distributions. The distinction between return of capital and net investment income can have different tax implications and may influence an investor's strategy regarding the holding or selling of fund shares.
Declaration Date: December 19, 2023
Ex Date: December 28, 2023
Record Date: December 29, 2023
Payment Date: January 31, 2024
Ticker | Fund Name | Distribution Per Share | Change From Previous Distribution | Market Price as of 12/18/2023 | Annualized Current Distribution Rate at Market |
HPI | Preferred Income Fund | - | 9.58 % |
The Fund listed above has accelerated the declaration, ex-date, and record date of the regularly scheduled January 2024 distribution in order for the Fund to meet its 2023 distribution requirement for federal excise tax purposes. In February 2024, the above Fund expects to resume its regular monthly declaration, distribution and payment schedule.
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A portion of a Fund's current distribution may include sources other than net investment income, including a return of capital. Investors should understand that a return of capital is not a distribution from income or gains of a Fund. As required under the Investment Company Act of 1940, a notice with the estimated components of the distribution will be sent to shareholders at the time of payment if it does not consist solely of net investment income. Such notice will also be posted to the Funds' website at www.jhinvestments.com. The notice should not be used to prepare tax returns as the estimates indicated in the notice may differ from the ultimate federal income tax characterization of distributions. After the end of each calendar year, investors will be sent a Form 1099-DIV informing them how to report distributions received during that year for federal income tax purposes.
Statements in this press release that are not historical facts are forward-looking statements as defined by
An investor should consider a Fund's investment objectives, risks, charges and expenses carefully before investing.
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SOURCE John Hancock Investment Management
FAQ
When was the monthly distribution declared for John Hancock Preferred Income Fund (HPI)?
What is the distribution per share for John Hancock Preferred Income Fund (HPI)?
What is the market price of John Hancock Preferred Income Fund (HPI) as of December 18, 2023?
What is the annualized current distribution rate at market for John Hancock Preferred Income Fund (HPI)?
Why did the Fund accelerate its distribution schedule?
When does the Fund expect to resume its regular monthly distribution schedule?
What may be included in a portion of the Fund's current distribution?
What notice will be sent to shareholders regarding the estimated components of the distribution?
Where can investors find the notice with the estimated components of the distribution?
What will investors be sent after the end of each calendar year?
