a_taxadvantagedglobalshyield.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 811-22056 
 
John Hancock Tax-Advantaged Global Shareholder Yield 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 (21.3% of Net Assets on 4-30-14)1,2     

Yara International ASA  2.7%  GlaxoSmithKline PLC  1.9% 


Muenchener Rueckversicherungs AG  2.6%  Centrica PLC  1.9% 


BASF SE  2.3%  Imperial Tobacco Group PLC  1.9% 


Vinci SA  2.2%  National Grid PLC  1.9% 


Total SA  2.1%  Swisscom AG  1.8% 


 
 
Sector Composition1,3       

Utilities  18.0%  Health Care  7.1% 


Consumer Staples  15.5%  Energy  7.0% 


Telecommunication Services  14.3%  Consumer Discretionary  6.5% 


Financials  9.8%  Information Technology  3.1% 


Industrials  8.0%  Short-Term Investments & Other  2.8% 


Materials  7.9%     

 
 
Top 10 Countries (94.5% of Net Assets on 4-30-14)1,2,3     

United States  38.4%  Canada  4.1% 


United Kingdom  18.1%  Switzerland  4.1% 


Germany  9.3%  Australia  3.2% 


France  8.7%  Netherlands  2.2% 


Norway  4.7%  Italy  1.7% 



1
As a percentage of net assets on 4-30-14.
2 Cash and cash equivalents not included.
3 International investing involves special risks such as political, economic and currency risks and differences in accounting standards and financial reporting. These risks are more significant in emerging markets. Sector investing is subject to greater risks than the market as a whole. Because the fund may focus on particular sectors of the economy, its performance may depend on the performance of those sectors.

 

 

6     Tax-Advantaged Global Shareholder Yield Fund | Semiannual report 

 



Fund’s investments

As of 4-30-14 (unaudited)

  Shares  Value 
Common Stocks 96.4%    $120,580,620 

(Cost $114,378,527)     
 
Australia 3.2%    3,965,363 
 
BHP Billiton, Ltd.  19,850  699,049 

Commonwealth Bank of Australia  9,162  673,965 

Telstra Corp., Ltd.  317,600  1,544,205 

Westpac Banking Corp.  32,000  1,048,144 
 
Belgium 1.1%    1,406,046 
 
Anheuser-Busch InBev NV  12,900  1,406,046 
 
Canada 4.1%    5,177,106 
 
BCE, Inc.  50,000  2,226,176 

Potash Corp. of Saskatchewan, Inc.  26,800  969,088 

Rogers Communications, Inc., Class B  19,100  758,563 

Shaw Communications, Inc., Class B  50,500  1,223,279 
 
France 8.7%    10,848,179 
 
Electricite de France SA  46,200  1,774,122 

Sanofi  8,950  965,883 

SCOR SE  41,400  1,514,940 

Total SA  36,100  2,582,744 

Vinci SA  35,900  2,710,677 

Vivendi SA  48,380  1,299,813 
 
Germany 9.3%    11,643,346 
 
Allianz SE  5,400  939,761 

BASF SE  24,830  2,880,422 

Daimler AG  18,700  1,740,954 

Deutsche Post AG  18,000  679,193 

Deutsche Telekom AG  124,840  2,097,444 

Muenchener Rueckversicherungs AG  14,300  3,305,572 
 
Italy 1.7%    2,115,606 
 
Terna Rete Elettrica Nazionale SpA  390,500  2,115,606 
 
Netherlands 2.2%    2,703,055 
 
Royal Dutch Shell PLC, ADR (C)  25,280  1,990,547 

Wolters Kluwer NV  25,560  712,508 
 
Norway 4.7%    5,945,477 
 
Orkla ASA  160,200  1,324,948 

Statoil ASA  39,300  1,198,076 

Yara International ASA  72,400  3,422,453 

 

See notes to financial statements  Semiannual report | Tax-Advantaged Global Shareholder Yield Fund  7 

 



  Shares  Value 
Philippines 0.6%    $715,950 
Philippine Long Distance Telephone Company, ADR (C)  11,100  715,950 
 
Sweden 1.0%    1,277,618 
 
Svenska Handelsbanken AB, Class A  25,400  1,277,618 
 
Switzerland 4.1%    5,091,940 
 
Nestle SA  9,400  726,472 

Novartis AG  13,500  1,173,589 

Roche Holding AG  3,000  880,038 

Swisscom AG  3,800  2,311,841 
 
United Kingdom 18.1%    22,604,107 
 
AstraZeneca PLC, ADR (C)  10,253  810,500 

BAE Systems PLC  297,300  2,011,374 

British American Tobacco PLC  24,200  1,397,427 

Centrica PLC  428,900  2,391,991 

Compass Group PLC  43,400  691,316 

Diageo PLC, ADR  4,500  552,510 

GlaxoSmithKline PLC  86,600  2,392,804 

Imperial Tobacco Group PLC  54,600  2,359,505 

National Grid PLC  164,300  2,335,236 

Pearson PLC  54,600  1,023,857 

Severn Trent PLC  24,300  757,467 

SSE PLC  53,500  1,379,578 

Unilever PLC  20,870  933,579 

United Utilities Group PLC  130,000  1,748,632 

Vodafone Group PLC  316,472  1,201,520 

WM Morrison Supermarkets PLC  181,700  616,811 
 
United States 37.6%    47,086,827 
 
AbbVie, Inc. (C)  17,200  895,776 

Altria Group, Inc.  56,100  2,250,171 

Ameren Corp. (C)  33,300  1,375,623 

Apple, Inc.  1,500  885,135 

Arthur J. Gallagher & Company (C)  14,900  670,798 

AT&T, Inc. (C)  55,600  1,984,920 

Automatic Data Processing, Inc. (C)  9,300  725,028 

CenturyLink, Inc.  48,700  1,700,117 

CME Group, Inc. (C)  12,160  855,942 

ConocoPhillips (C)  15,800  1,174,098 

Deere & Company  7,200  672,048 

Diamond Offshore Drilling, Inc. (C)  32,800  1,791,208 

Dominion Resources, Inc. (C)  9,800  710,892 

Duke Energy Corp. (C)  26,850  2,000,057 

E.I. du Pont de Nemours & Company  10,950  737,154 

Emerson Electric Company  10,600  722,708 

Integrys Energy Group, Inc. (C)  12,600  772,128 

Johnson & Johnson  7,300  739,417 

Kimberly-Clark Corp. (C)  8,900  999,025 

KLA–Tencor Corp. (C)  10,300  659,097 

Lockheed Martin Corp. (C)  9,400  1,542,916 

 

8  Tax-Advantaged Global Shareholder Yield Fund | Semiannual report  See notes to financial statements 

 



    Shares  Value 
United States (continued)       
 
Lorillard, Inc. (C)    38,050  $2,260,931 

Mattel, Inc. (C)    28,840  1,130,961 

McDonald’s Corp.    7,800  790,764 

Merck & Company, Inc. (C)    16,500  966,240 

Microchip Technology, Inc. (C)    17,900  850,966 

Microsoft Corp. (C)    19,500  787,800 

PepsiCo, Inc. (C)    7,400  635,586 

Philip Morris International, Inc.    14,500  1,238,735 

PPL Corp. (C)    57,400  1,913,716 

R.R. Donnelley & Sons Company (C)    53,200  936,320 

Regal Entertainment Group, Class A (C)    45,800  861,040 

Reynolds American, Inc. (C)    34,790  1,963,200 

TECO Energy, Inc. (C)    81,000  1,454,760 

The Coca-Cola Company    17,400  709,746 

The Dow Chemical Company (C)    23,200  1,157,680 

The Southern Company (C)    39,980  1,832,283 

Verizon Communications, Inc.    15,259  716,725 

Verizon Communications, Inc. (C)    28,980  1,354,235 

Waste Management, Inc. (C)    15,700  697,865 

Wells Fargo & Company    19,400  963,016 
 
Preferred Securities 0.8%      $981,212 

(Cost $854,267)       
 
United States 0.8%      981,212 
 
MetLife, Inc., Series B, 6.500% (C)    38,600  981,212 
 
  Yield (%)  Shares  Value 
Short-Term Investments 3.1%      $3,920,511 

(Cost $3,920,511)       
 
Money Market Funds 1.5%      1,919,511 
 
State Street Institutional Treasury Money       
Market Fund  0.0000 (Y)  1,919,511  1,919,511 
 
    Par value  Value 
Repurchase Agreement 1.6%      2,001,000 
 
Repurchase Agreement with State Street Corp. dated 4-30-14 at     
0.000% to be repurchased at $2,001,000 on 5-1-14, collateralized     
by $2,060,000 U.S. Treasury Notes, 1.375% due 12-31-18 (valued     
at $2,044,550, including interest)    $2,001,000  2,001,000 
 
 
Total investments (Cost $119,153,305)100.3%    $125,482,343 

 
Other assets and liabilities, net (0.3%)      ($387,281) 

 
Total net assets 100.0%      $125,095,062 

 

The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the fund.

See notes to financial statements  Semiannual report | Tax-Advantaged Global Shareholder Yield Fund  9 

 



Notes to Schedule of Investments

ADR  American Depositary Receipts 
(C)  A portion of this security is segregated as collateral for options. Total collateral value of 4-30-14 was $30,142,086.
(Y)  The rate shown is the annualized seven-day yield as of 4-30-14. 
  At 4-30-14, the aggregate cost of investment securities for federal income tax purposes was $119,842,270. Net unrealized appreciation aggregated $5,640,073, of which $7,537,717 related to appreciated investment securities and $1,897,644 related to depreciated investment securities.

 

The fund had the following sector composition as a percentage of net assets on 4-30-14: 
 
Utilities  18.0% 
Consumer Staples  15.5% 
Telecommunication Services  14.3% 
Financials  9.8% 
Industrials  8.0% 
Materials  7.9% 
Health Care  7.1% 
Energy  7.0% 
Consumer Discretionary  6.5% 
Information Technology  3.1% 
Short-Term Investments & Other  2.8% 

Total  100.0% 

 

10  Tax-Advantaged Global Shareholder Yield 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 $119,153,305)  $125,482,343 
Cash  35,482 
Foreign currency, at value (Cost $117,428)  117,496 
Receivable for investments sold  6,266,732 
Receivable for fund shares sold  48,859 
Dividends receivable  821,219 
Other receivables and prepaid expenses  124,628 
 
Total assets  132,896,759 
 
Liabilities   

Payable for investments purchased  7,117,597 
Written options, at value (Premium received $712,626)  622,500 
Payable to affiliates   
Accounting and legal services fees  3,549 
Other liabilities and accrued expenses  58,051 
 
Total liabilities  7,801,697 
 
Net assets  $125,095,062 
 
Net assets consist of   

Paid-in capital  $144,189,645 
Accumulated distributions in excess of net investment income  (1,958,812) 
Accumulated net realized gain (loss) on investments, written options and   
foreign currency transactions  (23,583,550) 
Net unrealized appreciation (depreciation) on investments, written options   
and translation of assets and liabilities in foreign currencies  6,447,779 
 
Net assets  $125,095,062 
 
Net asset value per share   

Based on 9,941,752 shares of beneficial interest outstanding — unlimited   
number of shares authorized with $0.01 par value  $12.58 

 

See notes to financial statements  Semiannual report | Tax-Advantaged Global Shareholder Yield Fund  11 

 



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  $5,284,431 
Interest  3,957 
Less foreign taxes withheld  (186,607) 
 
Total investment income  5,101,781 
 
Expenses   

Investment management fees  588,886 
Accounting and legal services fees  11,189 
Transfer agent fees  13,345 
Trustees’ fees  20,328 
Printing and postage  20,759 
Professional fees  74,223 
Custodian fees  31,268 
Stock exchange listing fees  7,837 
Other  17,847 
 
Total expenses  785,682 
 
Net investment income  4,316,099 
 
Realized and unrealized gain (loss)   

 
Net realized gain (loss) on   
Investments  12,218,751 
Written options  (388,100) 
Foreign currency transactions  (12,192) 
  11,818,459 
Change in net unrealized appreciation (depreciation) of   
Investments  (6,709,610) 
Written options  125,360 
Translation of assets and liabilities in foreign currencies  8,225 
  (6,576,025) 
Net realized and unrealized gain  5,242,434 
 
Increase in net assets from operations  $9,558,533 

 

12  Tax-Advantaged Global Shareholder Yield 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  $4,316,099  $5,173,508 
Net realized gain  11,818,459  2,853,357 
Change in net unrealized appreciation (depreciation)  (6,576,025)  7,985,109 
 
Increase in net assets resulting from operations  9,558,533  16,011,974 
 
Distributions to shareholders     
From net investment income  (6,287,578)1  (7,579,874) 
From tax return of capital    (4,761,490) 
 
Total distributions  (6,287,578)  (12,341,364) 
 
From fund share transactions     
Issued in shelf offering  2,011,639  3,209,720 
Issued pursuant to Dividend Reinvestment Plan  86,666  220,893 
 
Total from fund share transactions  2,098,305  3,430,613 
 
Total increase  5,369,260  7,101,223 
 
Net assets     

Beginning of period  119,725,802  112,624,579 
 
End of period  $125,095,062  $119,725,802 
 
Undistributed (accumulated distributions in excess of) net     
investment income  ($1,958,812)  $12,667 
 
Share activity     

 
Shares outstanding     
Beginning of period  9,774,773  9,496,556 
Issued in shelf offering  159,873  259,460 
Issued pursuant to Dividend Reinvestment Plan  7,106  18,757 
 
End of period  9,941,752  9,774,773 


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

 

 

 

See notes to financial statements  Semiannual report | Tax-Advantaged Global Shareholder Yield Fund  13 

 



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  $12.25  $11.86  $12.12  $12.98  $12.53  $12.92 
Net investment income2  0.443  0.54  0.57  0.64  0.64  0.72 
Net realized and unrealized gain (loss)             
on investments  0.52  1.12  0.45  (0.06)  1.25  0.42 
Total from investment operations  0.96  1.66  1.02  0.58  1.89  1.14 
Less distributions to             
common shareholders             
From net investment income  (0.64)4  (0.79)  (0.75)  (0.72)  (0.62)  (0.70) 
From tax return of capital    (0.49)  (0.53)  (0.72)  (0.82)  (0.83) 
Total distributions  (0.64)  (1.28)  (1.28)  (1.44)  (1.44)  (1.53) 
Anti-dilutive impact of shelf offering  0.01  0.01         
Anti-dilutive impact of repurchase plan            5,6 
Offering costs related to common shares            5 
Net asset value, end of period  $12.58  $12.25  $11.86  $12.12  $12.98  $12.53 
Per share market value, end of period  $13.21  $12.64  $12.37  $12.39  $13.66  $11.33 
Total return at net asset value (%)7  8.158  15.01  8.49  4.62  16.33  11.05 
Total return at market value (%)7  10.068  13.78  10.69  1.63  35.39  17.94 
 
Ratios and supplemental data             

Net assets applicable to common shares,             
end of period (in millions)  $125  $120  $113  $115  $122  $117 
Ratios (as a percentage of average             
net assets):             
Expenses  1.339  1.37  1.27  1.28  1.25  1.29 
Net investment income  6.463,9  4.52  4.76  5.12  5.15  6.01 
Portfolio turnover (%)  116  126  98  95  96  126 


1
Six months ended 4-30-14. Unaudited.
2 Based on the average daily shares outstanding.
3 Net investment income (loss) per share and ratio of net investment income (loss) to average net assets reflect a
special dividend received by the fund which amounted to $0.10 and 0.85% (unannualized), respectively.
4 A portion of the distributions may be deemed a tax return of capital at year end.
5 Less than $0.005 per shares.
6 The repurchase plan was completed at a average repurchase price of $11.09 for 17,400 shares. The redemption for
the year ended 10-31-09 was $192,000 and had a less than $0.005 NAV impact.
7 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 and capital gain
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.
8 Annualized.
9 Not annualized.

14  Tax-Advantaged Global Shareholder Yield Fund | Semiannual report  See notes to financial statements 

 



Notes to financial statements
(unaudited)

Note 1 — Organization

John Hancock Tax-Advantaged Global Shareholder Yield 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).

In 2012, the fund filed a registration statement with the Securities and Exchange Commission, registering an additional 1,200,000 common shares through an equity shelf offering program. Under this program, the fund, subject to market conditions, may raise additional equity capital from time to time by offering new common shares at a price equal to or above the fund’s net asset value per common share.

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. Investments by the fund in open-end mutual funds are valued at their respective net asset values each business day. Options listed on an exchange are valued at the mean of the most recent bid and ask prices from the exchange where the option was acquired or most likely will be sold. Unlisted options are valued using evaluated prices obtained from an independent pricing vendor. 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 (OTC) 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. Trading in foreign securities may be completed before the daily close of trading on the NYSE. Significant events at the issuer or market level may affect the values of securities between the time when the valuation of the securities is generally determined and the close of the NYSE. If a significant event occurs, these securities may be fair valued, as determined in good faith by the fund’s Pricing Committee, following procedures established by the Board of Trustees. The fund uses fair value adjustment factors provided by an independent pricing vendor to value certain foreign securities in order to adjust for events that may occur between the close of foreign exchanges or markets and the close of the NYSE.

Semiannual report | Tax-Advantaged Global Shareholder Yield Fund     15 

 



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.

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         
Australia  $3,965,363    $3,965,363   
Belgium  1,406,046    1,406,046   
Canada  5,177,106  $5,177,106     
France  10,848,179    10,848,179   
Germany  11,643,346    11,643,346   
Italy  2,115,606    2,115,606   
Netherlands  2,703,055  1,990,547  712,508   
Norway  5,945,477    5,945,477   
Philippines  715,950  715,950     
Sweden  1,277,618    1,277,618   
Switzerland  5,091,940    5,091,940   
United Kingdom  22,604,107  1,363,010  21,241,097   
United States  47,086,827  46,370,102  716,725   
 
Preferred Securities         
 
United States  981,212  981,212     
Short-Term Investments  3,920,511  1,919,511  2,001,000   
 
Total Investments in         
Securities  $125,482,343  $58,517,438  $66,964,905   
Other Financial         
Instruments:         
 
Written Options  ($622,500)  ($622,500)     

 

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

16     Tax-Advantaged Global Shareholder Yield Fund | Semiannual report 

 



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. Collateral received by the fund for repurchase agreements is disclosed in the Fund’s investments as part of the caption related to the repurchase agreement.

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. 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 currency translation. Assets, including investments and liabilities denominated in foreign currencies, are translated into U.S. dollar values each day at the prevailing exchange rate. Purchases and sales of securities, income and expenses are translated into U.S. dollars at the prevailing exchange rate on the date of the transaction. The effect of changes in foreign currency exchange rates on the value of securities is reflected as a component of the realized and unrealized gains (losses) on investments.

Funds that invest internationally generally carry more risk than funds that invest strictly in U.S. securities. These risks are heightened for investments in emerging markets. Risks can result from differences in economic and political conditions, regulations, market practices (including higher transaction costs), accounting standards and other factors. Foreign investments are also subject to a decline in the value of a foreign currency versus the U.S. dollar, which reduces the dollar value of securities denominated in that currency.

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.

Semiannual report | Tax-Advantaged Global Shareholder Yield Fund     17 

 



Under the Regulated Investment Company Modernization Act of 2010, the fund is permitted to carry forward capital losses incurred in taxable years beginning after December 22, 2010 for an unlimited period. Any losses incurred during those taxable years will be required to be utilized prior to the losses incurred in pre-enactment taxable years. As a result of this ordering rule, pre-enactment capital loss carryforwards may be more likely to expire unused. Additionally, post-enactment capital losses that are carried forward will retain their character as either short-term or long-term capital losses rather than being considered all short-term as under previous law.

For federal income tax purposes, as of October 31, 2013, the fund has a capital loss carryforward of $34,785,386 available to offset future net realized capital gains. The loss carryforward expires as follows: October 31, 2017 — $32,045,535 and October 31, 2018 — $2,739,851.

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.

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 dividends quarterly and capital gain distributions, if any, annually.

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 determination 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. Book-tax differences are primarily attributable to wash sale loss deferrals and characterization of distributions.

Note 3 — Derivative instruments

The fund may invest in derivatives in order to meet its investment objective. Derivatives include a variety of different instruments that may be traded in the OTC market, on a regulated exchange or through a clearing facility. The risks in using derivatives vary depending upon the structure of the instruments, including the use of leverage, optionality, the liquidity or lack of liquidity of the contract, the creditworthiness of the counterparty or clearing organization and the volatility of the position. Some derivatives involve risks that are potentially greater than the risks associated with investing directly in the referenced securities or other referenced underlying instrument. Specifically, the fund is exposed to the risk that the counterparty to an OTC derivatives contract will be unable or unwilling to make timely settlement payments or otherwise honor its obligations. OTC derivatives transactions typically can only be closed out with the other party to the transaction.

Certain options are traded or cleared on an exchange or central clearinghouse. Exchange-traded or cleared transactions generally present less counterparty risk to a fund than OTC transactions. The exchange or clearinghouse stands between the fund and the broker to the contract and therefore, credit risk is generally limited to the failure of the exchange or clearinghouse and the clearing member.

Options. There are two types of options, put options and call options. Options are traded either OTC or on an exchange. A call option gives the purchaser of the option the right to buy (and the seller the obligation to sell) the underlying instrument at the exercise price. A put option gives

18     Tax-Advantaged Global Shareholder Yield Fund | Semiannual report 

 



the purchaser of the option the right to sell (and the writer the obligation to buy) the underlying instrument at the exercise price. Writing puts and buying calls may increase the fund’s exposure to changes in the value of the underlying instrument. Buying puts and writing calls may decrease the fund’s exposure to such changes. Risks related to the use of options include the loss of premiums, possible illiquidity of the options markets, trading restrictions imposed by an exchange and movements in underlying security values, and for written options, potential losses in excess of the amounts recognized on the Statement of assets and liabilities. In addition, OTC options are subject to the risks of all OTC derivatives contracts.

When the fund purchases an option, the premium paid by the fund is included in the Fund’s investments and subsequently “marked-to-market” to reflect current market value. If the purchased option expires, the fund realizes a loss equal to the cost of the option. If the fund enters into a closing sale transaction, the fund realizes a gain or loss, depending on whether proceeds from the closing sale are greater or less than the original cost. When the fund writes an option, the premium received is included as a liability and subsequently “marked-to-market” to reflect the current market value of the option written. Premiums received from writing options that expire unexercised are recorded as realized gains. Premiums received from writing options which are exercised or are closed are added to or offset against the proceeds or amount paid on the transaction to determine the realized gain or loss. If a put option on a security is exercised, the premium received reduces the cost basis of the securities purchased by the fund.

During the six months ended April 30, 2014, the fund wrote option contracts to hedge against anticipated changes in securities markets and to generate potential income. The following tables summarize the fund’s written options activities during the six months ended April 30, 2014 and the contracts held at April 30, 2014.

  NUMBER OF  PREMIUMS 
  CONTRACTS  RECEIVED 

Outstanding, beginning of period  385  $762,841 
Options written  2,170  3,485,091 
Option closed  (1,555)  (2,945,913) 
Options expired  (630)  (589,393) 
 
Outstanding, end of period  370  $712,626 

 

  EXERCISE  EXPIRATION  NUMBER OF     
OPTIONS  PRICE  DATE  CONTRACTS  PREMIUM  VALUE 

Calls           
Russell 2000 Index  $1,130  May 2014  190  $476,765  ($304,950) 
S&P 500 Index  1,855  May 2014  85  221,783  (304,725) 
S&P 500 Index  1,930  May 2014  95  14,078  (12,825) 
 
Total      370  $712,626  ($622,500) 

 

Fair value of derivative instruments by risk category

The table below summarizes the fair value of derivatives held by the fund at April 30, 2014 by risk category:

    FINANCIAL  ASSET  LIABILITY 
  STATEMENT OF ASSETS AND  INSTRUMENTS  DERIVATIVES  DERIVATIVES 
RISK  LIABILITIES LOCATION  LOCATION  FAIR VALUE  FAIR VALUE 

Equity contracts  Payable for written options,  Written options    ($622,500) 
  at value       

 

Semiannual report | Tax-Advantaged Global Shareholder Yield Fund     19 

 



Effect of derivative instruments on the Statement of operations

The table below summarizes the net realized gain (loss) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the six months ended April 30, 2014:

  STATEMENT OF OPERATIONS   
RISK  LOCATION  WRITTEN OPTIONS 

Equity contracts  Net realized gain (loss)  ($388,100) 

 

The table below summarizes the net change in unrealized appreciation (depreciation) included in the net increase (decrease) in net assets from operations, classified by derivative instrument and risk category, for the six months ended April 30, 2014:

  STATEMENT OF OPERATIONS   
RISK  LOCATION  WRITTEN OPTIONS 

Equity contracts  Change in unrealized  $125,360 
  appreciation (depreciation)   

 

Note 4 — 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 5 — Fees and transactions with affiliates

John Hancock Advisers, LLC (the Advisor) serves as investment advisor for the fund. John Hancock Funds, LLC (the Distributor), an affiliate of the Advisor, serves as distributor for the common shares offered through the equity shelf offering. The Advisor and the Distributor are indirect, wholly owned subsidiaries 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 equal to 1.00% annually of the fund’s average daily gross assets. Under the advisory agreement, gross assets of the fund means total assets of the fund (including any form of investment leverage) minus the sum of accrued expenses incurred in the normal course of operations. The Advisor has subadvisory agreements with Epoch Investment Partners, Inc. and Analytic Investors, LLC. The fund is not responsible for payment of the subadvisory fees.

Accounting and legal services. Pursuant to a service agreement, the fund reimburses the Advisor for all expenses associated with providing the administrative, financial, legal, accounting and recordkeeping services to the fund, including the preparation of all tax returns, periodic reports to shareholders and regulatory reports, among other services. These accounting and legal services fees incurred for the six months ended April 30, 2014 amounted to an annual rate of 0.02% of the fund’s average daily net 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.

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Distributor. The fund will compensate the Distributor with respect to sales of the common shares offered through the equity shelf offering at a commission rate of 1% of the gross proceeds of the sale of common shares, a portion of which is allocated to the selling dealers. During the six months ended April 30, 2014, compensation to the Distributor was $20,525. The Distributor has an agreement with a sub-placement agent in the sale of common shares. The fund is not responsible for payment of commissions to the sub-placement agent.

Note 6 — Fund share transactions

Transactions in common shares for the six months ended April 30, 2014 and the year ended October 31, 2013 are presented on the Statement of changes in net assets. Proceeds received in connection with the shelf offering are net of commissions and offering costs. Total offering costs of $153,573 have been prepaid by the fund. These costs are deducted from proceeds as shares are issued. To date, $53,675 has been deducted from proceeds of shares issued and the remaining $99,898 is included in Other receivables and prepaid expenses on the Statement of assets and liabilities.

Note 7 — Purchase and sale of securities

Purchases and sales of securities, other than short-term securities, amounted to $136,209,351 and $135,750,009, respectively, for the six months ended April 30, 2014.

Semiannual report | Tax-Advantaged Global Shareholder Yield Fund     21 

 



Additional information

Unaudited

Investment objective and policy

The fund is a diversified, closed-end management investment company, common shares of which were initially offered to the public in 2007. The fund’s investment objective is to provide total return consisting of a high level of current income and gains and long term capital appreciation. In pursuing its investment objective of total return, the fund will seek to emphasize high current income. The fund will seek to achieve favorable after-tax returns for its shareholders by seeking to minimize the U.S. federal income tax consequences on income and gains generated by the fund. Under normal market conditions, the fund will invest at least 80% of its total assets in a diversified portfolio of dividend-paying securities of issuers located throughout the world. The fund writes (sells) call options on a variety of both U.S. and non-U.S. broad-based indices.

Dividends and distributions

During the six months ended April 30, 2014, distributions from net investment income totaling $0.6400 per share were paid to shareholders. The dates of payments and the amounts per share were as follows:

  INCOME 
PAYMENT DATE  DISTRIBUTIONS* 

December 31, 2013  $0.3200 
March 31, 2014  0.3200 
Total  $0.6400 


*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.

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Portfolio manager changes

The portfolio management team at Epoch Investment Partners, Inc. (“Epoch”) has changed. Effective March 1, 2014, John Tobin and Kera Van Valen were added as portfolio managers of the fund. They join the current portfolio management team at Epoch, William W. Priest, Eric Sappenfield and Michael A. Welhoelter, who have served as portfolio managers of the fund since its inception. Below is a brief summary of Mr. Tobin’s and Ms. Van Valen’s business careers during the past five years.


John Tobin, CFA

• Director, Portfolio Manager, and Senior Analyst, Epoch Investment Partners, Inc. since 2012

• Lecturer in the Economics Department, Fordham University (2009–2012)

• Senior Vice President, HSBC Global Asset Management (2005–2009)

• Began business career in 1981

• Joined fund team in 2014


Kera Van Valen, CFA

• Director, Portfolio Manager, and Senior Analyst, Epoch Investment Partners, Inc. since 2005

• Began business career in 2001

• Joined fund team in 2014


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  7,727,708.172  145,697.655 
Grace K. Fey  7,702,271.895  171,133.932 
Hassell H. McClellan  7,732,439.241  140,966.586 
Gregory A. Russo  7,722,818.419  150,587.408 

 

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.

Semiannual report | Tax-Advantaged Global Shareholder Yield Fund     23 

 



More information

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

 

For shareholder assistance refer to page 22   
   
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.

24     Tax-Advantaged Global Shareholder Yield Fund | Semiannual report 

 




 
PRESORTED 
STANDARD
U.S. POSTAGE 
PAID
MIS

 

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

 

 
  P14SA 4/14 
MF184404  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.

Not applicable.

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 Tax-Advantaged Global Shareholder Yield 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