John Hancock launches a fresh round of buybacks at five closed-end funds to try to tighten discounts

Five John Hancock funds get renewed buyback authority

John Hancock announced that the boards of five of its closed-end funds — BTO, HEQ, JHS, JHI and PDT — have renewed share repurchase plans designed to give the funds more control over their market discounts. The press release says each board refreshed its repurchase authorization and set an effective window during which the fund may buy back shares in the open market or in other permitted transactions. The moves are presented as routine renewals, aimed at helping the funds manage trading distortions and support shareholder value over the stated period.

Fund-by-fund snapshot of the repurchase renewals

The press release and accompanying filings list each fund and the board action approving the renewal. Investors should look for the filing details, but the corporate notice highlights these common points across the five funds:

• BTO: The board approved a renewal of the repurchase plan. The document specifies a limited authorization period and conditions under which repurchases may occur.
• HEQ: The HEQ filing shows a similar board vote to renew repurchases, with the fund able to repurchase shares within stated parameters and subject to exceptions the board listed.
• JHS: JHS’s board renewed its repurchase authority; the filing notes the mechanics and any caps or limits tied to outstanding shares or dollar amounts.
• JHI: The renewal for JHI follows the same template — board approval, defined effective dates and any restrictions on timing or pricing of buys.
• PDT: PDT’s board likewise renewed buyback authority, giving the fund discretion to repurchase shares in line with regulatory limits and the fund’s policy.

Across the renewals the filings emphasize that repurchases will comply with applicable federal securities rules and the funds’ charters. Some repurchases may occur in the open market; others could be in negotiated transactions if the board permits. The press release points investors toward the funds’ SEC filings for the precise language on limits, effective dates and any carve-outs.

What these buybacks mean for discounts, NAV and returns

Closed-end fund buybacks are a knee-jerk tool funds reach for when their shares trade at a wide discount to net asset value (NAV). When a fund buys its own shares, it reduces the supply of shares available in the market. If demand stays the same, that can nudge the market price higher and shrink the discount. That is the immediate goal here: narrower discounts can lift total returns for remaining shareholders without changing the underlying portfolio.

There are some second-order effects investors should weigh. Buybacks can slightly raise NAV per share because the fund retires shares at prices that may be below NAV; that boosts per-share economic ownership. But buybacks also use cash or available leverage, which can affect future distribution coverage or reduce liquidity if the fund needs to shore up its portfolio. In short, buybacks help when discounts are the main problem; they are not a fix for poor portfolio performance.

Historically, CEF buybacks often produce modest, short-term tightening of discounts. The biggest impact comes when a fund commits meaningful capacity and follows through with steady purchases. Small or token repurchases tend to have minimal market impact. Investors should also watch whether buybacks are paired with other capital actions — such as tender offers, distribution cuts or leverage changes — because the combination changes the risk/return picture.

Market signals and timing investors should watch

In the near term, watch for the following concrete signals that show the buybacks are active and potentially effective:

• Movement in the fund’s discount to NAV: steady narrowing over days or weeks suggests sustained buying or renewed investor demand.
• Spikes in trading volume when the fund’s board has signaled repurchases; unusual volume accompanied by price strength is a sign of active repurchase activity.
• Subsequent SEC filings — look for 8-K disclosures, prospectus supplements or updates that quantify purchases, outline limits used and describe any insider transactions.

Timing matters: many repurchase renewals are effective for a limited period (commonly 12 months). If a board sets a one-year window, heavy buying early in that window can have a different market effect than a slow drip over many months. Also note that regulatory rules and blackout windows (for example around distribution declarations) can limit when repurchases happen.

Why closed-end funds repurchase shares — a short primer

Boards authorize repurchases because CEF structure forces shares to trade on exchanges rather than be redeemed at NAV. That creates the familiar gap between market price and NAV. Repurchases give boards a tool to reduce that gap and manage capital structure without altering the portfolio itself. Unlike open-end funds, which must meet daily redemptions, closed-end funds can retire shares opportunistically.

Regulatory safeguards require funds to state limits and comply with trading rules, and boards must balance buybacks against preserving liquidity for the portfolio. In recent years, CEF buybacks have become more common as managers try to manage stubborn discounts and as activist investors press funds to use capital more flexibly.

Where to confirm the details and what to expect next

The press release is the initial public notice; the detailed rules and caps are in the funds’ SEC filings and any contemporaneous 8-Ks or prospectus supplements. Investors who want the exact authorization amounts, effective dates and the board resolutions should review those documents directly. For follow-up reporting, watch for fund-level disclosures showing actual repurchases, manager commentary on buyback pace, and historical repurchase tallies that show how aggressive each fund plans to be.

Overall, these renewals are a straightforward attempt to manage discounts. For investors, the key question is how large and sustained the repurchase effort will be — that’s what will determine whether the move meaningfully improves price performance or merely gives managers limited tactical flexibility.

Sources

• prnewswire.com