a_financialopportunities.htm
UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION 
Washington, D.C. 20549 
 
FORM N-CSR 
 
CERTIFIED SHAREHOLDER REPORT OF REGISTERED 
MANAGEMENT INVESTMENT COMPANIES 
 
Investment Company Act file number 811-8568 
 
John Hancock Financial Opportunities Fund 
(Exact name of registrant as specified in charter) 
 
601 Congress Street, Boston, Massachusetts 02210 
(Address of principal executive offices) (Zip code) 
 
Salvatore Schiavone
Treasurer
 
601 Congress Street 
 
Boston, Massachusetts 02210 
(Name and address of agent for service) 
 
Registrant's telephone number, including area code: 617-663-4497 
 
Date of fiscal year end:  October 31 
 
Date of reporting period:  April 30, 2014 

 

ITEM 1. REPORTS TO STOCKHOLDERS.





Portfolio summary

Top 10 Holdings (25.2% of Total Investments on 4-30-14)1,2   

 
The PNC Financial Services Group, Inc.  3.2%  Wells Fargo & Company  2.4% 


Cullen/Frost Bankers, Inc.  2.9%  M&T Bank Corp.  2.3% 


U.S. Bancorp  2.9%  Talmer Bancorp, Inc.  2.1% 


JPMorgan Chase & Company  2.8%  The Carlyle Group LP  2.0% 


BB&T Corp.  2.6%  SunTrust Banks, Inc.  2.0% 


 
 
Industry Composition1,3       

Banks  80.2%  Insurance  0.7% 


Thrifts & Mortgage Finance  9.6%  Diversified Financial Services  0.6% 


Capital Markets  6.2%  Short-Term Investments  0.5% 


Real Estate Investment Trusts  2.2%     

 
 

 


 

1 As a percentage of total investments on 4-30-14.
2 Cash and cash equivalents not included.
3 Investments focused on one industry may fluctuate more widely than investments across multiple industries.

6     Financial Opportunities Fund | Semiannual report 

 



Fund’s investments

As of 4-30-14 (unaudited)

  Shares  Value 
Common Stocks 104.8% (85.9% of Total Investments)    $463,804,615 

(Cost $353,241,930)     
 
Financials 104.8%    463,804,615 
 
Banks 89.5%     

1st Source Corp. (Z)  88,689  2,615,439 

1st United Bancorp, Inc. (Z)  450,221  3,295,611 

Access National Corp.  51,655  761,912 

Ameris Bancorp (I)(Z)  243,266  5,174,268 

Anchor Bancorp Wisconsin, Inc. (I)(R)  169,300  2,937,355 

Anchor Bancorp, Inc. (I)  88,416  1,616,244 

Avenue Bank (I)  300,000  2,381,099 

Avidbank Holdings (I)  200,000  2,221,300 

Bank of America Corp. (Z)  384,352  5,819,089 

Bank of Marin Bancorp, Class A  15,929  723,336 

Bar Harbor Bankshares (Z)  53,347  2,004,780 

BB&T Corp. (Z)  377,599  14,095,771 

Bond Street Holdings LLC, Class A (I)(S)(Z)  284,903  4,841,268 

Bond Street Holdings LLC, Class B (I)(S)  6,901  117,267 

Bridge Capital Holdings (I)(Z)  150,564  3,372,634 

Bryn Mawr Bank Corp. (Z)  80,000  2,182,400 

BSB Bancorp, Inc. (I)(Z)  177,195  3,092,053 

Camden National Corp.  36,776  1,403,740 

Centerstate Banks, Inc.  176,994  1,941,624 

Chemical Financial Corp.  101,073  2,837,119 

City Holding Company (Z)  39,363  1,692,215 

Comerica, Inc. (Z)  193,525  9,335,646 

Commerce Bancshares, Inc. (Z)  95,424  4,149,036 

Community National Bank (I)  111,100  1,694,275 

ConnectOne Bancorp, Inc. (I)  21,761  1,044,528 

CU Bancorp (I)  91,813  1,666,406 

Cullen/Frost Bankers, Inc. (Z)  208,025  15,895,190 

DNB Financial Corp.  78,515  1,545,175 

Eastern Virginia Bankshares, Inc. (I)  268,537  1,812,625 

Evans Bancorp, Inc.  69,760  1,562,624 

Fifth Third Bancorp (Z)  452,067  9,317,101 

First Bancorp, Inc. (Z)  266,499  4,245,329 

First Community Corp.  136,228  1,521,667 

First Connecticut Bancorp, Inc.  50,212  795,860 

First Financial Bancorp (Z)  139,115  2,252,272 

 

See notes to financial statements  Semiannual report | Financial Opportunities Fund  7 

 



  Shares  Value 
Banks (continued)     

First Financial Holdings, Inc. (Z)  82,457  $4,738,804 

First Horizon National Corp. (Z)  180,033  2,068,579 

First Merchants Corp.  118,683  2,518,453 

First Security Group, Inc. (I)  83,942  1,668,949 

First Security Group, Inc. (I)  1,192,189  2,265,159 

First Southern Bancorp, Inc., Class B (I)  78,390  471,124 

Firstbank Corp.  45,424  800,825 

FirstMerit Corp. (Z)  196,902  3,817,930 

Flushing Financial Corp. (Z)  192,160  3,693,315 

FNB Corp. (Z)  767,513  9,547,862 

Glacier Bancorp, Inc. (Z)  223,556  5,736,447 

Guaranty Bancorp  22,818  287,279 

Hamilton State Bancshares (I)  500,000  3,320,788 

Hancock Holding Company (Z)  245,752  8,289,215 

Heritage Commerce Corp. (Z)  387,733  3,148,392 

Heritage Financial Corp.  134,466  2,172,971 

Heritage Oaks Bancorp (I)(Z)  650,719  4,821,828 

Home Federal Bancorp, Inc.  125,986  1,896,089 

Independent Bank Corp. (Z)  195,961  7,274,072 

Independent Bank Corp.  125,407  1,632,799 

Intermountain Community Bancorp (I)  115,108  1,841,728 

John Marshall Bank (I)  31,938  580,952 

JPMorgan Chase & Company (Z)  274,274  15,353,859 

M&T Bank Corp. (Z)  102,651  12,524,449 

MB Financial, Inc. (Z)  183,150  4,915,746 

Monarch Financial Holdings, Inc.  162,521  1,847,864 

MutualFirst Financial, Inc.  100,539  1,890,133 

NewBridge Bancorp (I)  207,422  1,595,075 

Northrim BanCorp, Inc.  99,739  2,392,739 

Old Second Bancorp, Inc. (I)  202,363  963,248 

Pacific Continental Corp.  183,645  2,420,441 

PacWest Bancorp (Z)  41,762  1,644,170 

Park National Corp. (Z)  42,113  3,054,035 

Park Sterling Corp. (Z)  585,931  3,826,129 

Peoples Bancorp, Inc.  74,645  1,945,995 

Prosperity Bancshares, Inc. (Z)  127,654  7,531,586 

Sandy Spring Bancorp, Inc.  54,695  1,315,415 

Sierra Bancorp  140,000  2,185,400 

Simmons First National Corp., Class A  28,116  1,016,675 

Southern First Bancshares, Inc. (I)  57,450  784,767 

Southwest Bancorp, Inc.  110,118  1,838,971 

Square 1 Financial, Inc., Class A (I)  48,942  922,557 

State Bank Financial Corp.  103,998  1,724,287 

Suffolk Bancorp (I)(Z)  135,334  2,967,875 

Sun Bancorp, Inc. (I)  630,331  2,395,258 

SunTrust Banks, Inc. (Z)  278,451  10,653,535 

Swedbank AB, Class A  216,597  5,796,550 

Talmer Bancorp, Inc. (I)  896,300  11,325,985 

 

8  Financial Opportunities Fund | Semiannual report  See notes to financial statements 

 



  Shares  Value 
Banks (continued)     

The Community Financial Corp.  56,672  $1,210,514 

The PNC Financial Services Group, Inc. (Z)  206,732  17,373,757 

Trico Bancshares (Z)  202,536  4,911,498 

Trustmark Corp. (Z)  123,537  2,825,291 

U.S. Bancorp (Z)  385,314  15,713,105 

Union Bankshares Corp. (Z)  214,144  5,479,945 

United Bancorp, Inc. (I)  208,880  2,590,112 

United Bankshares, Inc.  74,856  2,189,538 

VantageSouth Bancshares, Inc. (I)  247,500  1,443,668 

VantageSouth Bancshares, Inc. (I)  98,008  601,769 

Virginia Heritage Bank (I)  43,877  971,876 

Washington Banking Company  67,556  1,161,963 

Washington Trust Bancorp, Inc. (Z)  123,905  4,237,551 

Wells Fargo & Company  265,725  13,190,589 

WesBanco, Inc. (Z)  137,003  4,142,971 

WestAmerica Bancorp. (Z)  25,066  1,273,854 

Westbury Bancorp, Inc. (I)  88,349  1,256,323 

Wilshire Bancorp, Inc. (Z)  478,823  4,788,230 

Yadkin Financial Corp. (I)(Z)  188,570  3,611,116 

Zions Bancorporation (Z)  265,769  7,686,039 
 
Capital Markets 5.1%     

Apollo Global Management LLC, Class A  41,658  1,130,182 

Apollo Investment Corp.  350,000  2,796,500 

KKR & Company LP  128,055  2,908,129 

The Blackstone Group LP  98,870  2,919,631 

The Carlyle Group LP (Z)  339,190  10,881,215 

Triplepoint Venture Growth BDC Corp. (I)  125,000  1,900,000 
 
Insurance 0.9%     

Gjensidige Forsikring ASA  210,539  3,885,423 
 
Real Estate Investment Trusts 0.2%     

Digital Realty Trust, Inc. (Z)  14,500  774,300 
 
Thrifts & Mortgage Finance 9.1%     

Berkshire Hills Bancorp, Inc. (Z)  358,903  8,409,097 

Cheviot Financial Corp.  114,092  1,237,898 

First Defiance Financial Corp. (Z)  125,381  3,387,795 

Georgetown Bancorp, Inc.  65,000  975,000 

Heritage Financial Group, Inc. (Z)  123,914  2,385,345 

Hingham Institution for Savings (Z)  80,000  5,560,800 

HomeStreet, Inc. (Z)  134,465  2,441,884 

Hudson City Bancorp, Inc. (Z)  267,248  2,661,790 

Provident Financial Holdings, Inc.  79,131  1,113,373 

Simplicity Bancorp, Inc.  109,586  1,900,221 

Southern Missouri Bancorp, Inc.  56,094  1,980,118 

United Community Financial Corp. (I)  634,588  2,113,178 

United Financial Bancorp, Inc.  106,610  1,402,988 

WSFS Financial Corp. (Z)  73,787  4,989,477 

 

See notes to financial statements  Semiannual report | Financial Opportunities Fund  9 

 



  Shares  Value 
Preferred Securities 9.7% (8.0% of Total Investments)    $42,936,359 

(Cost $39,479,469)     
 
Financials 9.7%    42,936,359 
 
Banks 3.4%     

First Bancshare, 9.000%  210,000  3,042,900 

First Citizens Bancshares, Inc., Series A,     
9.000%  15,038  3,381,896 

First Southern Bancorp, Inc., 5.000%  134  326,261 

Fresno First Bank, Series C, 5.000%  11,660  1,177,660 

HomeTown Bankshares Corp., 6.000%  1,050  1,050,000 

Synovus Financial Corp., Series C, 7.875%  200,000  5,590,000 

Zions Bancorporation, 6.300%  14,440  364,321 
 
Capital Markets 1.3%     

Hercules Technology Growth Capital, Inc.,     
7.000% (Z)  78,825  2,040,779 

JMP Group, Inc., 7.250%  80,000  2,020,000 

JMP Group, Inc., 8.000% (Z)  61,877  1,567,963 
 
Real Estate Investment Trusts 2.5%     

American Homes 4 Rent, 5.500%  100,000  2,500,000 

FelCor Lodging Trust, Inc., Series A, 1.950%  86,950  2,172,011 

Sotherly Hotels, Inc., 8.000%  60,000  1,583,400 

Strategic Hotels & Resorts, Inc., Series B,     
8.250% (Z)  112,600  2,855,536 

Strategic Hotels & Resorts, Inc., Series C,     
8.250% (Z)  86,500  2,199,695 
 
Thrifts & Mortgage Finance 2.5%     

Banc of California, Inc., 7.500%  143,088  3,695,963 

Flagstar Bancorp, Inc., 9.000%  5,000  5,263,974 

WSFS Financial Corp., 6.250% (Z)  80,000  2,104,000 

 

    Maturity     
  Rate (%)  date  Par value  Value 
Corporate Bonds 4.8% (3.9% of Total Investments)    $21,260,179 

(Cost $20,635,308)         
 
Financials 4.8%        21,260,179 
 
Banks 3.7%         

Synovus Financial Corp.  7.875  02-15-19  $3,000,000  3,427,500 

United Community Banks, Inc.  9.000  10-15-17  3,500,000  3,815,000 

VantageSouth Bancshares, Inc.  7.625  08-12-23  5,000,000  5,178,679 

Zions Bancorporation (5.800% to 6-15-23,         
then 3 month LIBOR + 3.800%) (Q)  5.800  06-15-23  4,150,000  3,880,250 
 
Capital Markets 0.5%         

E*TRADE Financial Corp. (Z)  6.000  11-15-17  2,000,000  2,097,500 
 
Diversified Financial Services 0.6%         

Nationstar Mortgage LLC  6.500  07-01-21  3,000,000  2,861,250 

 

10  Financial Opportunities Fund | Semiannual report  See notes to financial statements 

 



    Maturity     
  Rate (%)  date  Par value  Value 
Convertible Bonds 0.7% (0.6% of Total Investments)    $3,176,250 

(Cost $3,000,000)         
 
Financials 0.7%        3,176,250 
BlackRock Kelso Capital Corp. (Z)  5.500  02-15-18  $3,000,000  3,176,250 
 
      Shares  Value 
 
Warrants 1.4% (1.1% of Total Investments)      $6,058,268 

(Cost $3,656,631)         
 
Financials 1.4%        6,058,268 
 
Banks 1.2%         

Bank of Marin Bancorp (Expiration Date: 12-5-18, Strike Price: $27.23) (I)  58,374  1,095,442 

Comerica, Inc. (Expiration Date: 11-14-18; Strike Price: $29.40) (I)    93,762  1,774,915 

Horizon Bancorp (Expiration Date: 12-19-18, Strike Price: $17.68) (I)  178,943  2,176,859 

TCF Financial Corp. (Expiration Date: 11-14-18, Strike Price: $16.93) (I)  71,471  205,836 

Valley National Bancorp (Expiration Date: 11-14-18, Strike Price: $16.11) (I)  33,222  13,621 
 
Diversified Financial Services 0.2%         

Citigroup, Inc. (Expiration Date: 1-4-19; Strike Price: $106.10) (I)    1,045,183  648,013 
 
Thrifts & Mortgage Finance 0.0%         

Washington Federal, Inc. (Expiration Date: 11-14-18, Strike Price: $17.57) (I)  27,297  143,582 
 
  Yield*  Maturity     
  (%)  date  Par value  Value 
Certificate of Deposit 0.0% (0.0% of Total Investments)    $77,660 

(Cost $77,660)         
 
Country Bank for Savings  1.000  08-28-14  $1,936  1,936 

First Bank Richmond  0.990  12-05-16  20,395  20,395 

First Bank System, Inc.  0.549  04-02-15  4,906  4,906 

First Federal Savings Bank of Louisiana  0.100  01-06-15  3,032  3,032 

Framingham Cooperative Bank  0.750  09-08-15  3,951  3,951 

Home Bank  1.739  11-04-21  18,927  18,927 

Hudson Savings  0.700  04-20-15  2,128  2,128 

Machias Savings Bank  0.500  05-24-15  1,946  1,946 

Midstate Federal Savings and Loan  0.500  05-27-14  1,979  1,979 

Milford Bank  0.300  06-04-15  1,891  1,891 

Milford Federal Savings and Loan Association  0.200  10-21-14  2,024  2,024 

Mount McKinley Savings Bank  0.180  12-03-14  1,697  1,697 

Mt. Washington Bank  0.700  10-30-15  1,873  1,873 

Newburyport Five Cent Savings Bank  0.750  10-20-14  2,062  2,062 

Newton Savings Bank  0.450  05-30-15  1,929  1,929 

OBA Federal Savings and Loan  0.400  12-15-14  1,322  1,322 

Plymouth Savings Bank  0.200  04-21-15  1,931  1,931 

Salem Five Cents Savings Bank  0.250  12-17-14  1,726  1,726 

Sunshine Federal Savings and Loan Association  0.500  05-10-15  2,005  2,005 

 

See notes to financial statements  Semiannual report | Financial Opportunities Fund  11 

 



  Par value  Value 
Short-Term Investments 0.7% (0.5% of Total Investments)    $2,950,000 

(Cost $2,950,000)     
 
Repurchase Agreement 0.7%    2,950,000 
 
Repurchase Agreement with State Street Corp. dated 4-30-14 at 0.000%     
to be repurchased at $2,950,000 on 5-1-14, collateralized by $3,035,000     
U.S. Treasury Notes, 1.375% due 12-31-18 (valued at $3,012,238,     
including interest)  $2,950,000  2,950,000 
 
Total investments (Cost $423,040,998)122.1%    $540,263,331 

 
Other assets and liabilities, net (22.1%)    ($97,947,795) 

 
Total net assets 100.0%    $442,315,536 

 

The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund.
   
LIBOR  London Interbank Offered Rate 
(I)  Non-income producing security. 
(Q)  Perpetual bonds have no stated maturity date. Date shown as maturity date is next call date. 
(R)  Direct placement securities are restricted to resale and the fund has limited rights to registration under the Securities Act of 1933.

 

          Value as a   
  Original    Beginning  Ending  percentage   
  acquisition  Acquisition  share  share  of fund’s  Value as of 
Issuer, Description  date  cost  amount  amount  net assets  4-30-14 

Anchor Bancorp  9-20-13  $3,385,993  169,300  169,300  0.66%  $2,937,355 
Wisconsin, Inc.             


(S) These securities are exempt from registration under Rule 144A of the Securities Act of 1933. Such securities may be resold, normally to qualified institutional buyers, in transactions exempt from registration.

(Z) All or a portion of this security is pledged as collateral pursuant to the Credit Facility Agreement. Total collateral value at 4-30-14 was $213,129,028.

* Yield represents either the annualized yield at the date of purchase, the stated coupon rate or, for floating rate securities, the rate at period end.

† At 4-30-14, the aggregate cost of investment securities for federal income tax purposes was $423,056,630. Net unrealized appreciation aggregated $117,206,701, of which $129,707,052 related to appreciated investment securities and $12,500,351 related to depreciated investment securities.

12  Financial Opportunities Fund | Semiannual report  See notes to financial statements 

 



F I N A N C I A L  S T A T E M E N T S

 

Financial statements

Statement of assets and liabilities 4-30-14 (unaudited)

This Statement of assets and liabilities is the fund’s balance sheet. It shows the value of what the fund owns, is due and owes. You’ll also find the net asset value for each common share.

Assets   

Investments, at value (Cost $423,040,998)  $540,263,331 
Cash  3,706,127 
Receivable for investments sold  894,282 
Dividends and interest receivable  1,082,406 
Receivable due from advisor  68,550 
Other receivables and prepaid expenses  27,848 
 
Total assets  546,042,544 
 
Liabilities   

Credit facility agreement payable  101,000,000 
Payable for investments purchased  2,541,950 
Interest payable  2,330 
Payable to affiliates   
Administrative services fees  114,250 
Other liabilities and accrued expenses  68,478 
 
Total liabilities  103,727,008 
 
Net assets  $442,315,536 
 
Net assets consist of   

Paid-in capital  $328,038,450 
Accumulated distributions in excess of net investment income  (5,781,032) 
Accumulated net realized gain (loss) on investments and foreign   
currency transactions  2,832,637 
Net unrealized appreciation (depreciation) on investments and translation   
of assets and liabilities in foreign currencies  117,225,481 
 
Net assets  $442,315,536 
 
Net asset value per share   

Based on 18,528,511 shares of beneficial interest outstanding — unlimited   
number of shares authorized with no par value  $23.87 

 

See notes to financial statements  Semiannual report | Financial Opportunities Fund  13 

 



F I N A N C I A L  S T A T E M E N T S

 

Statement of operations For the six-month period ended 4-30-14
(unaudited)

This Statement of operations summarizes the fund’s investment income earned and expenses incurred in operating the fund. It also shows net gains (losses) for the period stated.

Investment income   

Dividends  $7,290,728 
Interest  860,997 
Less foreign taxes withheld  (163,847) 
 
Total investment income  7,987,878 
 
Expenses   

Investment management fees  3,088,225 
Administrative services fees  678,919 
Transfer agent fees  27,273 
Trustees’ fees  21,183 
Printing and postage  71,061 
Professional fees  40,978 
Custodian fees  31,226 
Interest expense  413,635 
Stock exchange listing fees  12,935 
Other  26,666 
 
Total expenses  4,412,101 
Less expense reductions  (407,351) 
 
Net expenses  4,004,750 
 
Net investment income  3,983,128 
 
Realized and unrealized gain (loss)   

 
Net realized gain (loss) on   
Investments  2,903,762 
Foreign currency transactions  (3,959) 
  2,899,803 
Change in net unrealized appreciation (depreciation) of   
Investments  20,132,641 
Translation of assets and liabilities in foreign currencies  3,174 
  20,135,815 
Net realized and unrealized gain  23,035,618 
 
Increase in net assets from operations  $27,018,746 

 

14  Financial Opportunities Fund | Semiannual report  See notes to financial statements 

 



F I N A N C I A L  S T A T E M E N T S

 

Statements of changes in net assets

These Statements of changes in net assets show how the value of the fund’s net assets has changed during the last two periods. The difference reflects earnings less expenses, any investment gains and losses, distributions, if any, paid to shareholders and the net of fund share transactions.

  Six months   
  ended  Year 
  4-30-14  ended 
  (Unaudited)  10-31-13 
Increase (decrease) in net assets     

 
From operations     
Net investment income  $3,983,128  $5,287,444 
Net realized gain  2,899,803  17,855,746 
Change in net unrealized appreciation (depreciation)  20,135,815  74,620,234 
 
Increase in net assets resulting from operations  27,018,746  97,763,424 
Distributions to shareholders     
From net investment income  (10,972,584)1  (4,093,643) 
From net realized gain    (17,851,525) 
 
Total distributions  (10,972,584)  (21,945,168) 
 
Total increase  16,046,162  75,818,256 
 
Net assets     

Beginning of period  426,269,374  350,451,118 
 
End of period  $442,315,536  $426,269,374 
 
Undistributed (accumulated distributions in excess of) net     
investment income  ($5,781,032)  $1,208,424 
 
Share activity     

Shares outstanding     
 
At beginning and end of period  18,528,511  18,528,511 


1
A portion of the distributions may be deemed a tax return of capital at year-end.

 

 

 

See notes to financial statements  Semiannual report | Financial Opportunities Fund  15 

 



F I N A N C I A L  S T A T E M E N T S

 

Statement of cash flows

This Statement of cash flows shows cash flow from operating and financing activities for the period stated.

  For the 
  six-month 
  period ended 
  4-30-14 
  (unaudited) 
Cash flows from operating activities   

Net increase in net assets from operations  $27,018,746 
Adjustments to reconcile net increase in net assets from operations to net   
cash provided by operating activities:   
Long-term investments purchased  (39,008,348) 
Long-term investments sold  36,151,036 
Decrease in short-term investments  865,184 
Net amortization of premium (discount)  17,990 
Decrease in foreign currency  894 
Increase in receivable for investments sold  (892,400) 
Increase in dividends and interest receivable  (222,370) 
Decrease in other receivables and prepaid expenses  27,038 
Increase in receivable due from advior  (3,067) 
Increase in payable for investments purchased  1,931,743 
Decrease in payable to affiliates  (38,388) 
Decrease in other liabilities and accrued expenses  (23,538) 
Increase in interest payable  92 
Net change in unrealized (appreciation) depreciation on investments  (20,132,641) 
Net realized gain on investments  (2,903,762) 
 
Net cash provided by operating activities  $2,788,209 

 
Cash flows from financing activities   
Borrowings from credit facility agreement payable  $6,000,000 
Cash distributions to common shareholders  ($10,972,584) 
 
Net cash used in financing activities  ($4,972,584) 
 
Net decrease in cash  ($2,184,375) 
 
Cash at beginning of period  $5,890,502 
 
Cash at end of period  $3,706,127 
 
Supplemental disclosure of cash flow information:   

Cash paid for interest  $413,543 

 

16  Financial Opportunities Fund | Semiannual report  See notes to financial statements 

 



Financial highlights

The Financial highlights show how the fund’s net asset value for a share has changed during the period.

COMMON SHARES Period ended  4-30-141  10-31-13  10-31-12  10-31-11  10-31-10  10-31-09 

Per share operating performance             
Net asset value, beginning of period  $23.01  $18.91  $15.67  $16.90  $16.28  $20.81 
Net investment income2  0.21  0.29  0.17  0.08  0.07  0.29 
Net realized and unrealized gain (loss)             
on investments  1.24  4.99  3.97  (0.49)  1.19  (3.63) 
Total from investment operations  1.45  5.28  4.14  (0.41)  1.26  (3.34) 
Less distributions to             
common shareholders             
From net investment income  (0.59)3  (0.22)  (0.17)  (0.09)  (0.06)  (0.29) 
From net realized gain    (0.96)  (0.75)  (0.82)  (0.67)   
From tax return of capital      (0.02)      (0.94) 
Total distributions  (0.59)  (1.18)  (0.94)  (0.91)  (0.73)  (1.23) 
Anti-dilutive impact of repurchase plan      0.044  0.094  0.094  0.044 
Net asset value, end of period  $23.87  $23.01  $18.91  $15.67  $16.90  $16.28 
Per share market value, end of period  $22.66  $22.20  $18.03  $14.29  $15.02  $13.30 
Total return at net asset value (%)5,6  6.347  29.03  27.70  (1.81)  8.82  (13.78) 
Total return at market value (%)6  4.637  30.56  33.51  0.76  18.38  (17.65) 
 
Ratios and supplemental data             

Net assets applicable to common shares,             
end of period (in millions)  $442  $426  $350  $298  $338  $339 
Ratios (as a percentage of average             
net assets):             
Expenses before reductions  1.988  1.88  1.53  1.52  1.51  1.55 
Expenses net of fee waivers             
and credits9  1.808  1.71  1.38  1.37  1.36  1.40 
Net investment income  1.798  1.37  0.94  0.48  0.39  1.88 
Portfolio turnover (%)  7  20  19  23  34  37 
 
Senior securities             

Total debt outstanding end of period             
(in millions)  $101  $95         
Asset coverage per $1,000 of debt10  $5,379  $5,487         


1
Six months ended 4-30-14. Unaudited.
2 Based on the average daily shares outstanding.
3 A portion of the distributions may be deemed a tax return of capital at year-end.
4 The repurchase plan was completed at an average repurchase price of $15.15, $14.82, $15.04 and $12.99 for
461,253, 1,016,051, 803,485 and 290,700 shares, and $6,987,727, $15,062,318, $12,088,382 and $3,776,593
for the years ended 10-31-12, 10-31-11, 10-31-10 and 10-31-09, respectively.
5 Total returns would have been lower had certain expenses not been reduced during the applicable periods.
6 Total return based on net asset value reflects changes in the fund’s net asset value during each period. Total return
based on market value reflects changes in market value. Each figure assumes that dividend, capital gain and tax
return of capital distributions, if any, were reinvested. These figures will differ depending upon the level of any
discount from or premium to net asset value at which the fund’s shares traded during the period.
7 Not annualized.
8 Annualized.
9 Expenses net of fee waivers and credits excluding interest expense are 1.61% and 1.58% for the six months ended
4-30-14 and the year ended 10-31-13.
10 Asset coverage equals the total net assets plus borrowings divided by the borrowings of the fund outstanding at
period end (Note 7). As debt outstanding changes, level of invested assets may change accordingly. Asset coverage
ratio provides a measure of leverage.

 

 

See notes to financial statements  Semiannual report | Financial Opportunities Fund  17 

 



Notes to financial statements
(unaudited)

Note 1 — Organization

John Hancock Financial Opportunities Fund (the fund) is a closed-end management investment company organized as a Massachusetts business trust and registered under the Investment Company Act of 1940, as amended (the 1940 Act).

Note 2 — Significant accounting policies

The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions as of the date of the financial statements. Actual results could differ from those estimates and those differences could be significant. Events or transactions occurring after the end of the fiscal period through the date that the financial statements were issued have been evaluated in the preparation of the financial statements. The following summarizes the significant accounting policies of the fund:

Security valuation. Investments are stated at value as of the close of regular trading on the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. In order to value the securities, the fund uses the following valuation techniques: Equity securities held by the fund are valued at the last sale price or official closing price on the exchange where the security was acquired or most likely will be sold. In the event there were no sales during the day or closing prices are not available, the securities are valued using the last available bid price. Debt obligations are valued based on the evaluated prices provided by an independent pricing vendor or from broker-dealers. Independent pricing vendors utilize matrix pricing which takes into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics and other market data, as well as broker supplied prices. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rates supplied by an independent pricing vendor. Securities that trade only in the over-the-counter market are valued using bid prices. Certain short-term securities with maturities of 60 days or less at the time of purchase are valued at amortized cost. Other portfolio securities and assets, for which reliable market quotations are not readily available, are valued at fair value as determined in good faith by the fund’s Pricing Committee following procedures established by the Board of Trustees. The frequency with which these fair valuation procedures are used cannot be predicted and fair value of securities may differ significantly from the value that would have been used had a ready market for such securities existed.

The fund uses a three-tier hierarchy to prioritize the pricing assumptions, referred to as inputs, used in valuation techniques to measure fair value. Level 1 includes securities valued using quoted prices in active markets for identical securities. Level 2 includes securities valued using other significant observable inputs. Observable inputs may include quoted prices for similar securities, interest rates, prepayment speeds and credit risk. Prices for securities valued using these inputs are received from independent pricing vendors and brokers and are based on an evaluation of the inputs described. Level 3 includes securities valued using significant unobservable inputs when market prices are not readily available or reliable, including the fund’s own assumptions in determining the fair value of investments. Factors used in determining value may include market or issuer specific events or trends, changes in interest rates and credit quality. The inputs or methodology used for valuing securities are not necessarily an indication of the risks associated with investing in those securities. Changes in valuation techniques may result in transfers into or out of an assigned level within the disclosure hierarchy.

18     Financial Opportunities Fund | Semiannual report 

 



Securities with market value of approximately $12,759,191 at the beginning of the year were transferred from Level 2 to Level 1 during the period since quoted prices in active markets for identical securities became available.

The following is a summary of the values by input classification of the fund’s investments as of April 30, 2014, by major security category or type:

        LEVEL 3 
      LEVEL 2  SIGNIFICANT 
  TOTAL MARKET  LEVEL 1  SIGNIFICANT  UNOBSERVABLE 
  VALUE AT 4-30-14  QUOTED PRICE  OBSERVABLE INPUTS  INPUTS 

Common Stocks         
Banks  $396,050,271  $359,996,042  $20,787,503  $15,266,726 
Capital Markets  22,535,657  22,535,657     
Insurance  3,885,423    3,885,423   
Real Estate Investment         
Trusts  774,300  774,300     
Thrifts & Mortgage         
Finance  40,558,964  40,558,964     
 
Preferred Securities         
Banks  14,933,038  13,429,117  1,503,921   
Capital Markets  5,628,742  5,628,742     
Real Estate Investment         
Trusts  11,310,642  11,310,642     
Thrifts & Mortgage         
Finance  11,063,937  5,799,963  5,263,974   
 
Corporate Bonds         
Banks  16,301,429    7,307,750  8,993,679 
Capital Markets  2,097,500    2,097,500   
Diversified Financial         
Services  2,861,250    2,861,250   
 
Convertible Bonds  3,176,250    3,176,250   
Warrants  6,058,268  2,785,967  3,272,301   
 
Certificate of Deposit  77,660    77,660   
Short-Term Investments  2,950,000    2,950,000   
 
Total Investments in         
Securities  $540,263,331  $462,819,394  $53,183,532  $24,260,405 

 

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value. Transfers into or out of Level 3 represent the beginning value of any security or instrument where a change in the level has occurred from the beginning to the end of the period and in all cases were transferred into or out of Level 2. Securities were transferred from Level 3 since observable market data became available due to the increased market activity of these securities.

Semiannual report | Financial Opportunities Fund     19 

 



  COMMON  PREFERRED  CORPORATE   
INVESTMENTS IN SECURITIES  STOCKS  STOCKS  BONDS  TOTAL 

Balance as of 10-31-13  $23,979,744  $8,988,653  $8,762,500  $41,730,897 
Realized gain (loss)    252,699    252,699 
Change in unrealized         
appreciation (depreciation)  127,890  (93,585)  231,179  265,484 
Purchases  2,718,326      2,718,326 
Cancelled Purchases    (1,050,000)    (1,050,000) 
Sales    (7,827,690)    (7,827,690) 
Transfers into Level 3         
Transfers out of Level 3  (11,559,234)  (270,077)    (11,829,311) 
Balance as of 4-30-14  $15,266,726    $8,993,679  $24,260,405 
Change in unrealized at         
period end*  $127,890    $231,179  $359,069 


*Change in unrealized appreciation (depreciation) attributable to Level 3 securities held at the period end. This balance is included in the change in unrealized appreciation (depreciation) on the Statement of operations.

The valuation techniques and significant amounts of unobservable inputs used in the fair value measurement of the fund’s Level 3 securities are outlined in the table below:

  FAIR VALUE  VALUATION  UNOBSERVABLE   
  AT 4-30-14  TECHNIQUE  INPUTS  INPUT/RANGE 

 
Corporate Bonds  $3,815,000  Market  Offered Quotes  $109.00 
    Approach     
 
  5,178,679  Market  Yield spread  208bps 
    Approach     

  $8,993,679       
 
Common Stocks  13,597,777  Market  Book Value  1.10x – 1.36x 
    Approach  multiple/  (weighted average 1.18x) 
      Discount for lack 10% 
      of marketability   
 
  1,668,949  Market  Book Value  1.03x20% 
    Approach  multiple/   
      Discount for lack   
      of marketability   

  $15,266,726       
 
Total  $24,260,405       

 

Increases/decreases in offered quotes, yield spread, or book value multiple may result in increases/ decreases in security valuation. Increases/decreases in discounts for lack of marketability may result in decreases/increases in security valuation.

Repurchase agreements. The fund may enter into repurchase agreements. When the fund enters into a repurchase agreement, it receives collateral that is held in a segregated account by the fund’s custodian. The collateral amount is marked-to-market and monitored on a daily basis to ensure that the collateral held is in an amount not less than the principal amount of the repurchase agreement plus any accrued interest.

Repurchase agreements are typically governed by the terms and conditions of the Master Repurchase Agreement and/or Global Master Repurchase Agreement (collectively, MRA). Upon an event of default, the non-defaulting party may close out all transactions traded under the MRA and net amounts owed. Absent an event of default, the MRA does not result in an offset of the reported amounts of assets and liabilities in the Statement of assets and liabilities. In the event of a default by the counterparty, realization of the collateral proceeds could be delayed, during which time the collateral value may decline or the counterparty may have insufficient assets to pay back claims resulting from close-out of the transactions.

20     Financial Opportunities Fund | Semiannual report 

 



Security transactions and related investment income. Investment security transactions are accounted for on a trade date plus one basis for daily net asset value calculations. However, for financial reporting purposes, investment transactions are reported on trade date. Interest income is accrued as earned. Interest income includes coupon interest and amortization/accretion of premiums/discounts on debt securities. Debt obligations may be placed in a non-accrual status and related interest income may be reduced by stopping current accruals and writing off interest receivable when the collection of all or a portion of interest has become doubtful. Dividend income is recorded on the ex-date, except for dividends of foreign securities where the dividend may not be known until after the ex-date. In those cases, dividend income, net of withholding taxes, is recorded when the fund becomes aware of the dividends. Foreign taxes are provided for based on the fund’s understanding of the tax rules and rates that exist in the foreign markets in which it invests. Gains and losses on securities sold are determined on the basis of identified cost and may include proceeds from litigation.

Foreign taxes. The fund may be subject to withholding tax on income and/or capital gains or repatriation taxes imposed by certain countries in which the fund invests. Taxes are accrued based upon investment income, realized gains or unrealized appreciation.

Overdrafts. Pursuant to the custodian agreement, the fund’s custodian may, in its discretion, advance funds to the fund to make properly authorized payments. When such payments result in an overdraft, the fund is obligated to repay the custodian for any overdraft, including any costs or expenses associated with the overdraft. The custodian may have a lien, security interest or security entitlement in any fund property that is not otherwise segregated or pledged, to the maximum extent permitted by law, to the extent of any overdraft.

Expenses. Within the John Hancock group of funds complex, expenses that are directly attributable to an individual fund are allocated to such fund. Expenses that are not readily attributable to a specific fund are allocated among all funds in an equitable manner, taking into consideration, among other things, the nature and type of expense and the fund’s relative net assets. Expense estimates are accrued in the period to which they relate and adjustments are made when actual amounts are known.

Federal income taxes. The fund intends to continue to qualify as a regulated investment company by complying with the applicable provisions of the Internal Revenue Code and will not be subject to federal income tax on taxable income that is distributed to shareholders. Therefore, no federal income tax provision is required.

As of October 31, 2013, the fund had no uncertain tax positions that would require financial statement recognition, derecognition or disclosure. The fund’s federal tax returns are subject to examination by the Internal Revenue Service for a period of three years.

Managed distribution plan. In March 2010, the Board of Trustees approved a managed distribution plan. In August 2012, the Board of Trustees approved an amendment to the managed distribution plan (the Managed Distribution Plan). Under the current Managed Distribution Plan, the fund makes quarterly distribution in a fixed amount of $0.2961 per share, which will be paid quarterly until further notice. This fixed amount was based upon an annual distribution rate of 6.50% of the fund’s net asset value of $18.22 on July 31, 2012, at the time the plan was last amended.

Distributions under the Managed Distribution Plan may consist of net investment income, net realized capital gains and, to the extent necessary, return of capital. Return of capital distributions may be necessary when the fund’s net investment income and net capital gains are insufficient to meet the minimum distribution. In addition, the fund also may make additional distributions to avoid federal income and excise taxes.

Semiannual report | Financial Opportunities Fund     21 

 



The Board of Trustees may terminate or reduce the amount distributed under the Managed Distribution Plan at any time. The termination or reduction may have an adverse effect on the market price of the fund’s shares.

Distribution of income and gains. Distributions to shareholders from net investment income and net realized gains, if any, are recorded on the ex-date. The fund generally declares and pays distributions quarterly under the Managed Distribution Plan described above.

Such distributions, on a tax basis, are determined in conformity with income tax regulations, which may differ from accounting principles generally accepted in the United States of America. Material distributions in excess of tax basis earnings and profits, if any, are reported in the fund’s financial statements as a return of capital. The final determinations of tax characteristics of the fund’s distribution will occur at the end of the year and will subsequently be reported to shareholders. A portion of the distributions paid may be deemed a tax return of capital for the year ended October 31, 2014.

Capital accounts within the financial statements are adjusted for permanent book-tax differences. These adjustments have no impact on net assets or the results of operations. Temporary book-tax differences, if any, will reverse in a subsequent period. The fund had no material book-tax differences at October 31, 2013.

Statement of cash flows. Information on financial transactions that have been settled through the receipt and disbursement of cash is presented in the Statement of cash flows. The cash amount shown in the Statement of cash flows is the amount included in the fund’s Statement of assets and liabilities and represents the cash on hand at the fund’s custodian and does not include any short-term investments.

Note 3 — Guarantees and indemnifications

Under the fund’s organizational documents, its Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. Additionally, in the normal course of business, the fund enters into contracts with service providers that contain general indemnification clauses. The fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the fund that have not yet occurred. The risk of material loss from such claims is considered remote.

Note 4 — Fees and transactions with affiliates

John Hancock Advisers, LLC (the Advisor) serves as investment advisor for the fund. The Advisor is an indirect, wholly owned subsidiary of Manulife Financial Corporation (MFC).

Management fee. The fund has an investment advisory agreement with the Advisor under which the fund pays a daily management fee to the Advisor equivalent, on annual basis, to the sum of (a) 1.15% of the first $500,000,000 of the fund’s average daily gross assets, including the assets attributed to the Credit Facility Agreement (see Note 7) (collectively, gross managed assets), and (b) 1.00% of the fund’s average daily gross managed assets in excess of $500,000,000. The Advisor has a subadvisory agreement with John Hancock Asset Management a division of Manulife Asset Management (US) LLC, an indirectly owned subsidiary of MFC and an affiliate of the Advisor. The fund is not responsible for payment of the subadvisory fees.

The investment management fees incurred for the six months ended April 30, 2014 were equivalent to a net annual effective rate of 1.14% of the fund’s average daily gross managed assets.

Administrative services. The fund has an administration agreement with the Advisor under which the Advisor provides certain administrative services to the fund and oversees operational activities of the fund. The compensation for the period was at an annual rate of 0.25% of the average weekly

22     Financial Opportunities Fund | Semiannual report 

 



gross managed assets of the fund. The Advisor agreed to limit the administrative services fee to 0.10% of the fund’s average weekly gross managed assets. Accordingly, the expense reductions related to administrative services fees amounted to $407,351 for the six months ended April 30, 2014. The Advisor reserves the right to terminate this limitation in the future with the Trustees’ approval. The administrative services fees incurred for the six months ended April 30, 2014 amounted to an annual rate of 0.10% of the fund’s average weekly gross managed assets.

Trustee expenses. The fund compensates each Trustee who is not an employee of the Advisor or its affiliates. Each independent Trustee receives from the fund and the other John Hancock closed-end funds an annual retainer. In addition, Trustee out-of-pocket expenses are allocated to each fund based on its net assets relative to other funds within the John Hancock group of funds complex.

Note 5 — Fund share transactions

In May 2009, the Board of Trustees approved a share repurchase plan, which was subsequently reviewed and approved by the Board of Trustees each year in December. Under the current share repurchase plan, the fund may purchase in the open market up to 10% of its outstanding common shares as of December 31, 2013. The current share repurchase plan will remain in effect between January 1, 2014 and December 31, 2014. There was no activity under the share repurchase plan during the six months ended April 30, 2014 and the year ended October 31, 2013.

Note 6 — Leverage risk

The fund utilizes a Credit Facility Agreement (CFA) to increase its assets available for investment. When the fund leverages its assets, common shareholders bear the fees associated with the CFA and have the potential to benefit or be disadvantaged from the use of leverage. The Advisor’s fee is also increased in dollar terms from the use of leverage. Consequently, the fund and the Advisor may have differing interests in determining whether to leverage the fund’s assets. Leverage creates risks that may adversely affect the return for the holders of common shares, including:

• the likelihood of greater volatility of net asset value and market price of common shares;

• fluctuations in the interest rate paid for the use of the credit facility;

• increased operating costs, which may reduce the fund’s total return;

• the potential for a decline in the value of an investment acquired through leverage, while the fund’s obligations under such leverage remains fixed; and

• the fund is more likely to have to sell securities in a volatile market in order to meet asset coverage or other debt compliance requirements.

To the extent the income or capital appreciation derived from securities purchased with funds received from leverage exceeds the cost of leverage, the fund’s return will be greater than if leverage had not been used, conversely, returns would be lower if the cost of the leverage exceeds the income or capital appreciation derived.

In addition to the risks created by the fund’s use of leverage, the fund is subject to the risk that it would be unable to timely, or at all, obtain replacement financing if the CFA is terminated. Were this to happen, the fund would be required to de-leverage, selling securities at a potentially inopportune time and incurring tax consequences. Further, the fund’s ability to generate income from the use of leverage would be adversely affected.

Semiannual report | Financial Opportunities Fund     23 

 



Note 7 — Credit Facility Agreement

The fund has entered into a CFA with Bank of America, N.A. (Bank of America) that allows it to borrow up to $110 million and to invest the borrowings in accordance with its investment practices.

The fund pledges a portion of its assets as collateral to secure borrowings under the CFA. Such pledged assets are held in a special custody account with the fund’s custodian. The amount of assets required to be pledged by the fund is determined in accordance with the CFA. The fund retains the benefits of ownership of assets pledged to secure borrowings under the CFA. Interest charged is at the rate of one month LIBOR (London Interbank Offered Rate) plus 0.68% and is payable monthly. The fund is required to pay a commitment fee of 0.25% per annum on any unused portion of the commitment, if the daily outstanding amount of the borrowings is less than $88 million. There were no payments for commitment fee for the six months ended April 30, 2014. As of April 30, 2014, the fund had borrowings of $101,000,000, at an interest rate of 0.83%, which is reflected in the Credit facility agreement payable on the Statement of assets and liabilities. During the six months ended April 30, 2014, the average borrowings under the CFA and the effective average interest rate were $98,016,575 and 0.85%, respectively.

The fund may terminate the CFA with 30 days’ prior written notice. If certain asset coverage, collateral requirements, minimum net assets or other covenants are not met, Bank of America could declare an event of default, terminate the CFA and accelerate the fund’s obligation to repay the loans. Absent a default, Bank of America is required to provide the fund with 360 days’ notice prior to terminating or amending the CFA.

Note 8 — Purchase and sale of securities

Purchases and sales of securities, other than short-term securities, amounted to $39,008,348 and $36,151,036, respectively, for the six months ended April 30, 2014.

Note 9 — Industry or sector risk

The fund generally invests a large percentage of its assets in one or more particular industries or sectors of the economy. If a large percentage of the fund’s assets are economically tied to a single or small number of industries or sectors of the economy, the fund will be less diversified than a more broadly diversified fund, and it may cause the fund to underperform if that industry or sector underperforms. In addition, focusing on a particular industry or sector may make the fund’s net asset value more volatile. Further, a fund that invests in particular industries or sectors is particularly susceptible to the impact of market, economic, regulatory and other factors affecting those industries or sectors. Financial services companies can be hurt by economic declines, changes in interest rates, regulatory and market impacts.

24     Financial Opportunities Fund | Semiannual report 

 



Additional information

Unaudited

Investment objective and policy

The fund is a closed-end, diversified management investment company, shares of which were initially offered to the public in August 1994. The fund’s investment objective is to provide a high level of total return consisting of long-term capital appreciation and current income.

Under normal circumstances, the fund will invest at least 80% of its net assets (plus borrowings for investment purposes) in equity securities of U.S. and foreign financial services companies of any size. These companies may include, but are not limited to, banks, thrifts, finance companies, brokerage and advisory firms, real estate-related firms, insurance companies and financial holding companies. The fund will notify shareholders at least 60 days prior to any change in this 80% policy.

Dividends and distributions

During the six months ended April 30, 2014, distributions from net investment income totaling $0.5922 per share were paid to shareholders. The dates of payments and the amounts per share were as follows:

  INCOME 
PAYMENT DATE  DISTRIBUTIONS1 

December 31, 2013  $0.2961 
March 31, 2014  0.2961 
Total  $0.5922 


1
A portion of the distributions may be deemed a tax return of capital at year-end.

Shareholder communication and assistance

If you have any questions concerning the fund, we will be pleased to assist you. If you hold shares in your own name and not with a brokerage firm, please address all notices, correspondence, questions or other communications regarding the fund to the transfer agent at:

Computershare
P.O. Box 30170
College Station, TX 77842-3170
Telephone: 800-852-0218

If your shares are held with a brokerage firm, you should contact that firm, bank or other nominee for assistance.

Semiannual report | Financial Opportunities Fund     25 

 



Shareholder meeting

The fund held its Annual Meeting of Shareholders on February 18, 2014. The following proposal was considered by the shareholders:

Proposal: Election of four (4) Trustees to serve for a three-year term ending at the 2017 Annual Meeting of Shareholders. Each Trustee was re-elected by the fund’s shareholders and the votes cast with respect to each Trustee are set forth below.

  VOTES FOR  VOTES WITHHELD 

Independent Trustees     
William H. Cunningham  14,449,230.696  418,128.994 
Grace K. Fey  14,451,731.632  415,628.058 
Hassell H. McClellan  14,451,957.036  415,402.654 
Gregory A. Russo  14,465,749.802  401.609.888 

 

Trustees whose term of office continued after the Annual Meeting of Shareholders because they were not up for election are: Charles L. Bardelis, Craig Bromley, Peter S. Burgess, Theron S. Hoffman, Deborah C. Jackson, James M. Oates, Steven R. Pruchansky and Warren A. Thomson.

26     Financial Opportunities Fund | Semiannual report 

 



More information

Trustees  Officers  Investment advisor 
James M. Oates,   Andrew G. Arnott  John Hancock Advisers, LLC 
Chairperson  President   
Steven R. Pruchansky,    Subadvisor 
Vice Chairperson John J. Danello#  John Hancock Asset Management 
Charles L. Bardelis* Senior Vice President, Secretary  a division of Manulife Asset
Craig Bromley and Chief Legal Officer  Management (US) LLC
Peter S. Burgess*    
William H. Cunningham Francis V. Knox, Jr.  Custodian
Grace K. Fey Chief Compliance Officer  State Street Bank and
Theron S. Hoffman*   Trust Company
Deborah C. Jackson Charles A. Rizzo   
Hassell H. McClellan Chief Financial Officer  Transfer agent
Gregory A. Russo   Computershare Shareowner
Warren A. Thomson Salvatore Schiavone Services, LLC
  Treasurer  
*Member of the   Legal counsel 
Audit Committee   K&L Gates LLP 
†Non-Independent Trustee    
#Effective 5-29-14   Stock symbol 
  Listed New York Stock 
    Exchange: BTO 

 

For shareholder assistance refer to page 25   
 
You can also contact us:   
800-852-0218  Regular mail: 
jhinvestments.com  Computershare 
  P.O. Box 30170 
  College Station, TX 77842-3170 

 

The fund’s proxy voting policies and procedures, as well as the fund’s proxy voting record for the most recent twelve-month period ended June 30, are available free of charge on the Securities and Exchange Commission (SEC) website at sec.gov or on our website.

The fund’s complete list of portfolio holdings, for the first and third fiscal quarters, is filed with the SEC on Form N-Q. The fund’s Form N-Q is available on our website and the SEC’s website, sec.gov, and can be reviewed and copied (for a fee) at the SEC’s Public Reference Room in Washington, DC. Call 800-SEC-0330 to receive information on the operation of the SEC’s Public Reference Room.

We make this information on your fund, as well as monthly portfolio holdings, and other fund details available on our website at jhinvestments.com or by calling 800-852-0218.

The report is certified under the Sarbanes-Oxley Act, which requires closed-end funds and other public companies to affirm that, to the best of their knowledge, the information in their financial reports is fairly and accurately stated in all material respects.

Semiannual report | Financial Opportunities Fund     27 

 




PRESORTED 
STANDARD
U.S. POSTAGE 
PAID
MIS

 

800-852-0218
800-231-5469 TDD
800-843-0090 EASI-Line
jhinvestments.com

 


 
  P9SA 4/14 
MF184403  6/14 

 


ITEM 2. CODE OF ETHICS.

Not applicable at this time.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable at this time.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable at this time.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable at this time.

ITEM 6. SCHEDULE OF INVESTMENTS.

(a) Not applicable.

(b) Not applicable.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

(a) Not applicable.

(b)

      Total number of  Maximum number of 
      shares purchased  shares that may yet 
  Total number of  Average price per  as part of publicly  be purchased under 
Period  shares purchased  share  announced plans*  the plans 

Nov-13  -  -  -  1,852,851 

Dec-13  -  -  -  1,852,851* 

Jan-14  -  -  -  1,852,851 

Feb-14  -  -  -  1,852,851 

Mar-14  -  -  -  1,852,851 

Apr-14  -  -  -  1,852,851 

Total  -  -     

 



*In May 2009, the Board of Trustees approved a share repurchase plan, which has been subsequently reviewed and approved by the Board of Trustees each year in December. Under the current share repurchase plan, the Fund may purchase in the open market up to 10% of its outstanding common shares as of December 31, 2013. The plan renewed by the Board in December 2013 will remain in effect between January 1, 2014 and December 31, 2014.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

The registrant has adopted procedures by which shareholders may recommend nominees to the registrant’s Board of Trustees. A copy of the procedures is filed as an exhibit to this Form N-CSR. See attached “John Hancock Funds – Nominating, Governance and Administration Committee Charter.”

ITEM 11. CONTROLS AND PROCEDURES.

(a) Based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this Form N-CSR, the registrant's principal executive officer and principal financial officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms.

(b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

ITEM 12. EXHIBITS.

(a) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by Section 302 of the Sarbanes-Oxley Act of 2002 and Rule 30a-2(a) under the Investment Company Act of 1940, are attached.

(b) Separate certifications for the registrant's principal executive officer and principal financial officer, as required by 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and Rule 30a-2(b) under the Investment Company Act of 1940, are attached. The certifications furnished pursuant to this paragraph are not deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that section. Such certifications are not deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent that the Registrant specifically incorporates them by reference.

(c)(1) Submission of Matters to a Vote of Security Holders is attached. See attached “John Hancock Funds – Nominating, Governance and Administration Committee Charter.”

(c)(2) Contact person at the registrant.



SIGNATURES 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

John Hancock Financial Opportunities Fund

By:  /s/ Andrew Arnott 
  Andrew Arnott 
  President 
 
 
Date:  June 5, 2014 

 

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

 

By:  /s/ Andrew Arnott 
  Andrew Arnott 
  President 
 
 
Date:  June 5, 2014 
 
 
 
By:  /s/ Charles A. Rizzo 
  Charles A. Rizzo 
  Chief Financial Officer 
 
 
Date:  June 5, 2014