| UNITED STATES | ||
| SECURITIES AND EXCHANGE COMMISSION | ||
| Washington, D.C. 20549 | ||
| FORM N-Q | ||
| QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS 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: | July 31, 2009 | |
ITEM 1. SCHEDULE OF INVESTMENTS
JH Tax-Advantaged Global Shareholder Yield Fund
Securities owned by the Fund on
July 31, 2009 (Unaudited)
| Shares | Value | |
| Common stocks 96.35% | $113,352,849 | |
| (Cost $126,401,788) | ||
| Australia 1.14% | 1,344,588 | |
| Billabong International Ltd. | 175,000 | 1,344,588 |
| Austria 0.38% | 450,160 | |
| Telekom Austria AG | 29,500 | 450,160 |
| Belgium 1.53% | 1,793,161 | |
| Anheuser-Busch InBev NV | 102,400 | 438 |
| Belgacom SA | 50,000 | 1,792,723 |
| Brazil 0.63% | 743,669 | |
| Redecard SA | 50,000 | 743,669 |
| Canada 4.57% | 5,372,578 | |
| Manitoba Telecom Services, Inc. | 140,000 | 4,496,635 |
| Shaw Communications, Inc. (Class B) | 49,900 | 875,943 |
| Finland 0.56% | 659,977 | |
| Fortum Oyj | 28,400 | 659,977 |
| France 5.45% | 6,411,462 | |
| France Telecom SA | 130,000 | 3,244,954 |
| SCOR SE | 39,500 | 948,270 |
| Total SA | 21,450 | 1,194,164 |
| Vivendi | 40,000 | 1,024,074 |
| Germany 1.17% | 1,377,574 | |
| RWE AG | 16,300 | 1,377,574 |
| Italy 2.58% | 3,039,038 | |
| Enel SpA | 449,000 | 2,438,156 |
| Eni SpA SADR | 12,900 | 600,882 |
| Korea, Republic Of 1.12% | 1,315,314 | |
| KT Corp. ADR | 81,900 | 1,315,314 |
| New Zealand 1.01% | 1,192,499 | |
| Telecom Corp of New Zealand Ltd. SADR | 128,088 | 1,192,499 |
| Norway 1.68% | 1,973,400 | |
| StatoilHydro ASA ADR | 92,000 | 1,973,400 |
| Philippines 0.61% | 721,579 | |
| Philippine Long Distance Telephone Co. SADR | 13,700 | 721,579 |
| Spain 0.87% | 1,017,762 | |
| Gas Natural SDG SA | 21,000 | 394,398 |
| Telefonica SA | 25,000 | 623,364 |
| Switzerland 2.62% | 3,086,037 | |
| Nestle SA | 75,000 | 3,086,037 |
| Taiwan 1.10% | 1,296,479 | |
| Far Eastone Telecommunications Co., Ltd. | 1,102,047 | 1,296,479 |
| Page 1 |
JH Tax-Advantaged Global Shareholder Yield Fund
Securities owned by the Fund on
July 31, 2009 (Unaudited)
| United Kingdom 20.11% | 23,657,322 | |
| AstraZeneca PLC SADR | 88,500 | 4,109,940 |
| BP PLC, SADR | 30,000 | 1,501,200 |
| British American Tobacco PLC | 21,700 | 673,865 |
| British American Tobacco PLC SADR | 21,700 | 1,349,523 |
| Diageo PLC SADR | 47,500 | 2,963,050 |
| Imperial Tobacco Group PLC | 65,000 | 1,856,903 |
| National Grid PLC | 275,100 | 2,573,894 |
| Pearson PLC | 215,000 | 2,490,927 |
| Royal Dutch Shell PLC, A Shares | 50,000 | 1,312,008 |
| United Utilities Group PLC | 260,009 | 1,956,859 |
| Vodafone Group PLC | 1,400,000 | 2,869,153 |
| United States 49.22% | 57,900,250 | |
| Altria Group, Inc. | 105,800 | 1,854,674 |
| American Electric Power Co., Inc. | 30,000 | 928,800 |
| Arthur J. Gallagher & Co. | 31,000 | 709,900 |
| AT&T, Inc. | 103,000 | 2,701,690 |
| Bristol-Myers Squibb Co. | 103,800 | 2,256,612 |
| CenturyTel, Inc. | 116,600 | 3,660,074 |
| ConocoPhillips | 24,291 | 1,061,760 |
| DaVita, Inc. (I) | 13,700 | 680,890 |
| Diamond Offshore Drilling, Inc. | 6,900 | 620,103 |
| Duke Energy Corp. | 154,900 | 2,397,852 |
| E.I. Du Pont de Nemours & Co. | 40,000 | 1,237,200 |
| Frontier Communications Corp. | 128,471 | 899,297 |
| H.J. Heinz Co. | 23,700 | 911,502 |
| Kraft Foods, Inc. (Class A) | 50,000 | 1,417,000 |
| Lorillard, Inc. | 30,700 | 2,263,204 |
| Merck & Co., Inc. | 64,000 | 1,920,640 |
| Nicor, Inc. | 70,000 | 2,550,800 |
| NiSource, Inc. | 100,000 | 1,289,000 |
| NSTAR | 16,900 | 542,490 |
| OGE Energy Corp. | 93,600 | 2,817,360 |
| ONEOK, Inc. | 40,000 | 1,324,000 |
| Philip Morris International, Inc. | 100,000 | 4,660,000 |
| Progress Energy, Inc. | 149,900 | 5,912,056 |
| Reynolds American, Inc. | 62,502 | 2,719,462 |
| Southern Co. | 71,000 | 2,229,400 |
| Teco Energy, Inc. | 55,000 | 741,950 |
| Verizon Communications, Inc. | 75,000 | 2,405,250 |
| Waste Management, Inc. | 30,100 | 846,111 |
| Westar Energy, Inc. | 62,500 | 1,229,375 |
| WGL Holdings, Inc. | 16,900 | 559,728 |
| Windstream Corp. | 291,000 | 2,552,070 |
| Shares | Value | |
| Preferred Stocks 1.69% | $1,980,630 | |
| (Cost $2,111,278) | ||
| United States 1.69% | 1,980,630 | |
| Bank of America Corp., 6.50% | 33,800 | 742,248 |
| Comcast Corp., 7.00% Ser B | 51,300 | 1,238,382 |
| Page 2 |
JH Tax-Advantaged Global Shareholder Yield Fund
Securities owned by the Fund on
July 31, 2009 (Unaudited)
| Par Value | Value | |
| Short-term investments 1.10% | $1,298,000 | |
| (Cost $1,298,000) | ||
| United States 1.10% | 1,298,000 | |
| Repurchase Agreement with State Street Corp. dated 7-31-09 at 0.05% to be | ||
| repurchased at $1,298,005 on 8-3-09, collateralized by $1,310,000 Federal | ||
| National Mortage Association, 2.00% due 4-1-11 (valued at $1,326,375, including | ||
| interest) | 1,298,000 | 1,298,000 |
| Total investments (Cost $129,811,066)† 99.14% | $116,631,479 | |
| Other assets and liabilities, net 0.86% | $1,012,055 | |
| Total net assets 100.00% | $117,643,534 |
The percentage shown for each investment category is the total value of the category as a percentage of the net assets of the Fund.
ADR American Depositary Receipts
SADR Sponsored American Depositary Receipts
(I) Non-income producing security.
† At July 31, 2009, the aggregate cost of investment securities for federal income tax purposes was $137,475,008. Net unrealized depreciation aggregated $20,843,529, of which $4,595,102 related to appreciated investment securities and $25,438,631 related to depreciated investment securities.
| Page 3 |
Notes to the Schedule of Investments (Unaudited)
Security valuation
Investments are stated at value as of the close of the regular trading on the New York Stock Exchange (NYSE), normally at 4:00 p.m., Eastern Time. Equity securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated price if no sale has occurred) as of the close of business on the principal securities exchange (domestic or foreign) on which they trade. Debt obligations are valued based on the evaluated prices provided by an independent pricing service, which utilizes both dealer-supplied and electronic data processing techniques, which take 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. Foreign securities and currencies are valued in U.S. dollars, based on foreign currency exchange rates supplied by an independent pricing service. Securities traded only in the over-the-counter market are valued at the last bid price quoted by brokers making markets in the securities at the close of trading. Equity and debt obligations, for which there are no prices available from an independent pricing service, are valued based on broker quotes or fair valued as described below. Certain short-term debt instruments are valued at amortized cost.
Other portfolio securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith by the Fund’s Pricing Committee in accordance with procedures adopted by the Board of Trustees. Generally, trading in non-U.S. securities is substantially completed each day at various times prior to the close of trading on the NYSE. The values of such securities used in computing the net asset value of the Fund’s shares are generally determined as of such times. Occasionally, significant events that affect the values of such securities may occur between the times at which such values are generally determined and the close of the NYSE. Upon such an occurrence, these securities will be valued at fair value as determined in good faith under consistently applied procedures established by and under the General supervision of the Board of Trustees.
Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic and market conditions, interest rates, investor perceptions and market liquidity.
Fair Value Measurements
The Fund uses a three-tier hierarchy to prioritize the assumptions, referred to as inputs, used in valuation techniques to measure fair value. The three-tier hierarchy of inputs and the valuation techniques used are summarized below:
• Level 1 — Exchange traded prices in active markets for identical securities. This technique is used for exchange-traded domestic common and preferred equities, certain foreign equities, warrants, rights, options and futures. In addition, investment companies, including mutual funds, are valued using this technique.
• Level 2 — Prices determined using 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 techniques are received from independent pricing vendors and are based on an evaluation of the inputs described. These techniques are used for certain domestic preferred equities, certain foreign equities, unlisted rights and warrants, and fixed income securities. Also, over-the-counter derivative contracts, including swaps, foreign forward currency contracts, and certain options use these techniques.
| 4 |
• Level 3 — Prices determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable, such as when there is little or no market activity for an investment, unobservable inputs may be used. Unobservable inputs reflect the Fund’s Pricing Committee’s own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available. Securities using this technique are generally thinly traded or privately placed, and may be valued using broker quotes, which may not only use observable or unobservable inputs but may also include the use of the brokers’ own judgments about the assumptions that market participants would use.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The following is a summary of the inputs used to value the Funds’ investments as of July 31, 2009, by major security category or security type.
| Investments in Securities | Level 1 | Level 2 | Level 3 | Total | |
| Australia | - | $1,344,588 | - | $1,344,588 | |
| Austria | - | 450,160 | - | 450,160 | |
| Belgium | - | 1,793,161 | - | 1,793,161 | |
| Brazil | $743,669 | - | - | 743,669 | |
| Canada | 5,372,578 | - | - | 5,372,578 | |
| Finland | - | 659,977 | - | 659,977 | |
| France | - | 6,411,462 | - | 6,411,462 | |
| Germany | - | 1,377,574 | - | 1,377,574 | |
| Italy | 600,882 | 2,438,156 | - | 3,039,038 | |
| Korea, Republic of | 1,315,314 | - | - | 1,315,314 | |
| New Zealand | 1,192,499 | - | - | 1,192,499 | |
| Norway | 1,973,400 | - | - | 1,973,400 | |
| Philippines | 721,579 | - | - | 721,579 | |
| Spain | - | 1,017,762 | - | 1,017,762 | |
| Switzerland | - | 3,086,037 | - | 3,086,037 | |
| Taiwan | - | 1,296,479 | - | 1,296,479 | |
| United Kingdom | 9,923,713 | 13,733,609 | - | 23,657,322 | |
| United States | 59,880,880 | - | - | 59,880,880 | |
| Short-term Investments | - | 1,298,000 | - | 1,298,000 | |
| Total Investments in Securities | $81,724,514 | $34,906,965 | - | $116,631,479 | |
| Financial Instruments | ($2,549,050) | - | - | ($2,549,050) | |
| Totals | $79,175,464 | $34,906,965 | - | $114,082,429 | |
Repurchase agreements
The Fund may enter into repurchase agreements. When the Fund enters into a repurchase agreement through its custodian, it receives delivery of securities, the amount of which at the time of purchase and each subsequent business day is required to be maintained at such a level that the market value is generally at least 102% of the repurchase amount. The Fund will take constructive receipt of all securities underlying the repurchase agreements it has entered into until such agreements expire. If the seller defaults, the Fund would suffer a loss to the extent that proceeds from the sale of underlying securities were less than the repurchase amount. The Fund may enter into repurchase agreements maturing within seven days with domestic dealers, banks or other financial institutions deemed to be creditworthy by the Adviser.
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The Fund has adopted the provisions of Statement of Financial Accounting Standards No. 161, Disclosures about Derivative Instruments and Hedging Activities (FAS 161). This new standard requires the Fund to disclose information to assist investors in understanding how the Fund uses derivative instruments, how derivative instruments are accounted for under Statement of Financial Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging Activities (FAS 133) and how derivative instruments affect the Fund’s financial position, results of operations and cash flows. This disclosure for the period ended July 31, 2009 is presented in accordance with FAS 161 and is included as part of the Notes to the Schedule of Investments.
Options
The Fund may purchase and sell put and call options on securities, securities indices, currencies and futures contracts. 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 the purchaser of the option the right to sell (and the writer the obligation to buy) the underlying instrument at the exercise price. The Fund may use options to manage against possible changes in the market value of the Fund’s assets, mitigate exposure to fluctuations in currency values or interest rates, or protect the Fund’s unrealized gains. In addition, the Fund may use options to facilitate Fund investment transactions by protecting the Fund against a change in the market price of the investment, enhance potential gains, or as a substitute for the purchase or sale of securities or currency. For more information on options, please refer to the Fund’s prospectus, semi-annual and annual reports.
During the period ended July 31, 2009, the Fund used written options to enhance potential gains and hedge against anticipated changes in securities markets.
Written options for the period ended July 31, 2009 were as follows:
| NUMBER OF | PREMIUMS | |
| CONTRACTS | RECEIVED | |
| (PAID) | ||
| Outstanding, beginning of period | 530 | $1,550,538 |
| Options written | 35,528 | 52,474,087 |
| Options closed | (29,743) | (46,624,103) |
| Options exercised | (437) | (483,952) |
| Options expired | (4,448) | (4,830,275) |
| Outstanding, end of period | 1,430 | $2,086,295 |
The following is a summary of open written options outstanding as of July 31, 2009:
| NAME OF | EXERCISE | EXPIRATION | NUMBER OF | NOTIONAL | PREMIUM | VALUE |
| ISSUER | PRICE | DATE | CONTRACTS | AMOUNT | ||
| CALLS | ||||||
| KBW Bank | ||||||
| Index | $40 | Aug 2009 | 690 | 69,000 | $91,770 | ($108,675) |
| Morgan | ||||||
| Stanley | 480 | Aug 2009 | 55 | 5,500 | 64,895 | (110,000) |
| Morgan | ||||||
| Stanley | ||||||
| Cyclical Index | 580 | Aug 2009 | 45 | 4,500 | 166,455 | (460,575) |
| S&P 100 | ||||||
| Index | 450 | Aug 2009 | 60 | 6,000 | 50,340 | (90,600) |
| S&P 400 | ||||||
| Midcap Index | 630 | Aug 2009 | 45 | 4,500 | 74,070 | (52,650) |
| 6 |
| NAME OF | EXERCISE | EXPIRATION | NUMBER OF | NOTIONAL | PREMIUM | VALUE |
| ISSUER | PRICE | DATE | CONTRACTS | AMOUNT | ||
| S&P 500 | ||||||
| Index | 950 | Aug 2009 | 225 | 22,500 | 944,325 | (963,450) |
| S&P 500 | ||||||
| Index | 980 | Aug 2009 | 150 | 15,000 | 449,550 | (351,000) |
| S&P 600 | ||||||
| Small Cap | ||||||
| Index | 275 | Aug 2009 | 95 | 9,500 | 104,555 | (197,600) |
| XO Holdings, | ||||||
| Inc. | 420 | Aug 2009 | 65 | 6,500 | 140,335 | (214,500) |
| Total | 1,430 | 143,000 | $2,086,295 | ($2,549,050) | ||
Notional amounts shown at July 31, 2009 are representative of the options activity during the period ended July 31, 2009.
Fair value of derivative instruments by risk category
The table below summarizes the fair values of derivatives held by the Fund at July 31, 2009 by risk category:
| Derivatives not accounted for as hedging | Financial | Asset Derivatives | Liability Derivatives |
| instruments under FAS 133 | instruments location | Fair Value | Fair Value |
| Equity | Options | - | ($2,549,050) |
| Total | - | ($2,549,050) | |
Foreign currency translation
The books and records of the Fund are maintained in U.S. Dollars. Investment securities and other assets and liabilities denominated in a foreign currency are translated into U.S. dollars at the prevailing exchange rates at period end. Purchases and sales of investment securities, income and expenses are translated into U.S. dollars at the prevailing exchange rates on the respective dates of the transactions.
Risks and uncertanties
Risks associated with foreign investments
Investing in securities issued by companies whose principal business activities are outside the United States may involve significant risks not present in domestic investments. For example, there is generally less publicly available information about foreign companies, particularly those not subject to the disclosure and reporting requirements of the U.S. securities laws. Foreign issuers are generally not bound by uniform accounting, auditing, and financial reporting requirements and standards of practice comparable to those applicable to domestic issuers. Investments in foreign securities also involve the risk of possible adverse changes in investment or exchange control regulations, expropriation or confiscatory taxation, limitation on the removal of funds or other assets of the Fund, political or financial instability or diplomatic and other developments which could affect such investments. Foreign stock markets, while growing in volume and sophistication, are generally not as developed as those in the United States, and securities of some foreign issuers (particularly those located in developing countries) may be less liquid and more volatile than securities of comparable U.S. companies. In general, there is less overall governmental supervision and regulation of foreign securities markets, broker-dealers and issuers than in the United States.
| 7 |
Sector risk
The Fund may concentrate investments in a particular industry, sector of the economy or invest in a limited number of companies. The concentration is closely tied to a single sector of the economy which may cause the Fund to underperform other sectors. Utilities can be hurt by higher interest costs in connection with capital construction programs, costs associated with environmental and other regulations and the effects of economic declines, surplus capacity and increased competition. Telecommunications may fluctuate widely due to both federally and state regulations governing rates of return and services that may be offered, fierce competition for market share, and competitive challenges in the U.S. from foreign competitors engaged in strategic joint ventures with U.S. companies, and in foreign markets from both U.S. and foreign competitors. Accordingly, the concentration may make the Fund’s value more volatile and investment values may rise and fall more rapidly.
| 8 |
ITEM 2. 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-Q, the registrant's principal executive officer and principal accounting 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 last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.
ITEM 3. EXHIBITS.
Separate certifications for the registrant's principal executive officer and principal accounting officer, as required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached.
| 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/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer
Date: September 15, 2009
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/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer
Date: September 15, 2009
By: /s/ Charles A. Rizzo
-------------------------------------
Charles A. Rizzo
Chief Financial Officer
Date: September 15, 2009