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John Hancock Preferred Income Fund III
John Hancock Preferred Income Fund III is a closed-end fund investing in preferred securities, managed by Gregory Phelps out of Boston since 2003.
John Hancock Preferred Income Fund III
John Hancock Preferred Income Fund III launched in 2003 as part of John Hancock Investment Management's closed-end fund complex. Managed by Gregory K. Phelps and Joseph H. Bozoyan, the fund invests principally in preferred stocks and other fixed-income securities, with a mandate weighted toward the financials, utilities, and insurance sectors. It is one of several preferred-income funds the firm operates, each differentiated by leverage ratios and portfolio composition. The vehicle is exchange-listed and trades on the New York Stock Exchange, providing daily liquidity to shareholders while maintaining a closed-end structure that allows the portfolio managers to operate without redemption-driven turnover. The fund's strategy centers on generating high current income through preferred securities, corporate bonds, and capital securities issued by U.S. companies. As of its most recent reporting periods, the portfolio is heavily allocated to the financial services sector, with banks, insurance companies, and real estate investment trusts forming the core. Positions include preferred stock issued by large-cap U.S. banks, utilities, and energy companies, alongside select hybrid instruments from telecommunications and pipeline operators. The fund employs leverage in pursuit of enhanced yield, a common feature across the John Hancock closed-end preferred fund family, and distributes income to shareholders on a monthly basis (per the firm's official communications). The fund operates under the broader John Hancock Investment Management umbrella, a division of Manulife Investment Management, which traces its parentage to Manulife Financial Corporation, the Toronto-based insurance and financial services giant. This links the Boston-based managers to a global asset management platform with offices in North America, Europe, and Asia. In July 2024, John Hancock announced the continuation of its monthly distribution policy for the fund, maintaining the shareholder payout at levels consistent with the prior year (per the firm's July 2024 announcement). The fund's board of trustees also oversees governance and adherence to the Investment Company Act of 1940. Structurally, the fund's closed-end format is its defining mechanism. Unlike open-end mutual funds that must honor daily redemptions at NAV, the closed-end wrapper lets Phelps and Bozoyan hold illiquid preferred issues through rate cycles without forced selling. The trade-off for shareholders is that the fund's market price can diverge materially from its net asset value, sometimes trading at persistent discounts or premiums that corporate actions such as rights offerings or tender offers may later address. This discount dynamic, alongside the layered use of leverage, creates a security that behaves differently from the underlying assets it holds — and that structural tension is precisely what the managers navigate in seeking to deliver the stated yield objective.
General information
Firm type
Asset Manager
Year founded
2003
AUM
Undisclosed
Location
Region
North America
Country
United States
City
Boston
Corporate office
Boston, MA, United States
Principals
Gregory K. Phelps
Senior Managing Director, Head of Income & Value
Joseph H. Bozoyan
Portfolio Manager
Sector focus
Frequently asked questions
What does John Hancock Preferred Income Fund III actually hold?
The fund holds a diversified portfolio of preferred stocks, capital securities, and investment-grade corporate bonds, primarily issued by U.S. financial institutions, utilities, and insurance companies. Preferred securities are hybrid instruments that sit above common equity but below senior debt in the capital structure. The portfolio is concentrated in rate-sensitive, U.S.-dollar-denominated paper, and the managers use leverage to amplify the yield available to common shareholders.
How is this fund different from open-end preferred-stock mutual funds or ETFs?
As a closed-end fund, it does not face daily shareholder redemptions, which means the managers can hold less-liquid preferred issues through market dislocations without being forced sellers. The trade-off is that shares can trade at a discount or premium to net asset value, introducing a layer of market-price risk that open-end funds and ETFs do not carry to the same degree. Many allocators track the discount-to-NAV metric as a factor in entry and exit timing.
Who makes the day-to-day investment decisions for the fund?
Gregory K. Phelps and Joseph H. Bozoyan serve as the fund's portfolio managers. Phelps is also the head of the broader income and value platform at John Hancock Investment Management. They operate within the income and fixed-income division, drawing on credit research and risk-management resources shared across Manulife Investment Management.
Does the fund use leverage, and how does that affect the risk profile?
Yes. The fund employs leverage, typically through bank borrowings or preferred-share issuance at the fund level, to increase the pool of investable assets and magnify the income stream distributed to common shareholders. Leverage amplifies both yield and downside risk, and the cost of that leverage moves with short-term interest rates, which can compress net income when rates rise. The fund's disclosures to the SEC detail the specific leverage ratios and instruments in use.
What is the relationship between this fund and Manulife Financial?
John Hancock Investment Management is the U.S. asset management arm of Manulife Investment Management, which itself is wholly owned by Manulife Financial Corporation, the Toronto-based global insurer and financial services firm. The fund's portfolio managers sit in Boston, but the credit platform and parent-company resources span North America, Europe, and Asia.
How does the fund's distribution policy work?
The fund has historically maintained a managed distribution policy aimed at paying a steady monthly amount to common shareholders. The distribution can include net investment income, realized capital gains, and return of capital, with the mix reported to shareholders annually on Form 1099. The board of trustees reviews the distribution rate periodically and may adjust it based on earnings, leverage costs, and market conditions.
Which sectors does the fund avoid or underweight?
The fund's mandate and sector concentration shift over time with market conditions, but financials, utilities, REITs, and energy-pipeline companies typically dominate the preferred issuance market, so the fund is structurally overweight those sectors. Pure technology and consumer discretionary names are usually underrepresented because those sectors issue relatively little preferred stock. The fund's publicly filed schedule of investments provides the current sector breakdown.
Profile maintained by Altss using OSINT (open-source intelligence), regulatory filings, licensed data partners, and verified direct submissions. Read the methodology. Last updated: . Continuous refresh with full update cycles at least every 30 days.
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