a_taxadvdivincome.htm
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- 21416
 
John Hancock Tax-Advantaged Dividend Income Fund
(Exact name of registrant as specified in charter)
 
601 Congress Street, Boston, Massachusetts 02210
(Address of principal executive offices) (Zip code)
 
Alfred P. Ouellette, Senior Counsel and Assistant Secretary
 
601 Congress Street
Boston, Massachusetts 02210
 
(Name and address of agent for service)
 
Registrant's telephone number, including area code: 617-663-4324
 
Date of fiscal year end: December 31
 
 
Date of reporting period: March 31, 2008
 
ITEM 1. SCHEDULE OF INVESTMENTS


John Hancock
Tax-Advantaged Dividend Income Fund
Securities owned by the Fund on
March 31, 2008 (unaudited)

Issuer   Shares Value
Common stocks 112.46%     $801,924,218
(Cost $837,643,620)      
 
Diversified Banks 8.75%     62,384,504
Comerica, Inc.   296,000 10,383,680
U.S. Bancorp.   720,900 23,328,324
Wachovia Corp.   550,000 14,850,000
Wells Fargo & Co.   475,000 13,822,500
 
Electric Utilities 13.64%     97,297,368
American Electric Power Co., Inc.   508,500 21,168,855
Duke Energy Corp.   1,000,000 17,850,000
Great Plains Energy, Inc.   67,000 1,651,550
Hawaiian Electric Industries, Inc.   114,700 2,737,889
Pinnacle West Capital Corp.   230,000 8,068,400
Progress Energy, Inc.   575,000 23,977,500
Southern Co.   613,400 21,843,174
 
Gas Utilities 11.11%     79,258,075
Atmos Energy Corp.   766,500 19,545,750
National Fuel Gas Co.   232,500 10,976,325
Northwest Natural Gas Co.   300,000 13,032,000
ONEOK, Inc.   800,000 35,704,000
 
Independent Power Producers & Energy Traders 2.31%   16,458,800
Black Hills Corp.   460,000 16,458,800
 
Industrial Conglomerates 0.73%     5,181,400
General Electric Co.   140,000 5,181,400
 
Integrated Oil and Gas 6.92%     49,317,270
BP Plc, ADR (United Kingdom) (F)   410,000 24,866,500
Chevron Corp.   185,000 15,791,600
Total SA, ADR (France) (F)   117,000 8,659,170
 
Integrated Telecommunication Services 3.94%     28,128,185
AT&T, Inc.   520,000 19,916,000
Verizon Communications, Inc.   225,300 8,212,185
 
Multi-Utilities 40.59%     289,398,835
Ameren Corp.   561,100 24,710,844
CH Energy Group, Inc.   386,000 15,015,400
Consolidated Edison, Inc.   350,100 13,898,970
Dominion Resources, Inc.   608,000 24,830,720
DTE Energy Co.   609,914 23,719,555
Energy East Corp.   755,000 18,210,600
Integrys Energy Group, Inc.   656,300 30,609,832

Page 1

John Hancock
Tax-Advantaged Dividend Income Fund
Securities owned by the Fund on
March 31, 2008 (unaudited)

NiSource, Inc.   790,500 13,628,220
NSTAR   1,041,868 31,704,043
OGE Energy Corp.   895,000 27,897,150
PNM Resources, Inc.   116,000 1,446,520
Public Service Enterprise Group, Inc.   380,000 15,272,200
SCANA Corp.   60,000 2,194,800
TECO Energy, Inc.   415,000 6,619,250
Vectren Corp.   815,700 21,885,231
Xcel Energy, Inc.   890,000 17,755,500
 
Oil & Gas Storage & Transportation 4.58%   32,651,500
Enbridge Inc. (Canada) (F)   25,000 1,029,000
Spectra Energy Corp.   1,390,000 31,622,500
 
Other Diversified Financial Services 6.75%   48,106,910
Bank of America Corp.   730,000 27,674,300
Citigroup, Inc.   445,000 9,531,900
JPMorgan Chase & Co.   253,800 10,900,710
 
Publishing 0.01%     97,661
Idearc, Inc.   26,830 97,661
 
Regional Banks 11.27%     80,374,204
BB&T Corp.   495,000 15,869,700
First Horizon National Corp.   215,000 3,012,150
KeyCorp   619,000 13,587,050
PNC Financial Services Group, Inc. (The) 305,000 19,998,850
Regions Financial Corp.   1,412,985 27,906,454
 
Thrifts & Mortgage Finance 0.39%     2,811,900
Washington Mutual, Inc.   273,000 2,811,900
 
Wireless Telecommunication Services 1.47%   10,457,606
Vodafone Group Plc, ADR      
(United Kingdom) (F)   354,375 10,457,606

  Credit    
Issuer, description rating (A) Shares Value
Preferred stocks 39.09%     $278,706,191
(Cost $318,099,856)      
 
Broadcasting & Cable TV 0.43%     3,083,535
Comcast Corp., 7.00% BBB+ 125,500 3,083,535
 
Consumer Finance 0.69%     4,932,350
HSBC Finance Corp., 6.36%, Depositary      
Shares, Ser B A 150,000 3,240,000
SLM Corp., 6.97%, Ser A BBB- 42,500 1,692,350

Page 2

John Hancock
Tax-Advantaged Dividend Income Fund
Securities owned by the Fund on
March 31, 2008 (unaudited)

Diversified Banks 2.37%     16,912,450
Royal Bank of Scotland Group Plc, 5.75%,      
Ser L (United Kingdom) (F) A 858,500 16,912,450
 
Diversified Metals & Mining 0.34%     2,457,875
Freeport McMoRan Copper & Gold, Inc.,      
6.75% B+ 17,500 2,457,875
 
Electric Utilities 12.33%     87,911,726
Alabama Power Co., 5.30% (Class A) BBB+ 200,000 4,431,260
Carolina Power & Light Co., $5.44 BBB- 111,493 9,504,778
Connecticut Light & Power Co., $3.24,      
Ser 68G BB+ 20,686 1,065,329
Duquesne Light Co., 6.50% BB 427,000 18,574,500
Entergy Arkansas, Inc., $6.08 BA1 11,372 1,194,416
Entergy Arkansas, Inc., 4.56% BB+ 9,388 801,501
Entergy Arkansas, Inc., 4.56%, Ser 1965 BB+ 9,818 838,212
Entergy Arkansas, Inc., 6.45% BB+ 110,000 2,784,375
Entergy Mississippi, Inc., 4.92% BA2 8,190 776,003
Entergy Mississippi, Inc., 6.25% BB+ 197,500 5,190,557
FPC Capital I, 7.10%, Ser A BBB- 67,500 1,665,225
FPL Group Capital Trust I, 5.875% BBB+ 275,000 6,531,250
Interstate Power & Light Co., 7.10%, Ser C BBB- 20,700 539,494
Interstate Power & Light Co., 8.375%,      
Ser B Baa2 233,000 6,440,120
PPL Electric Utilities Corp., 6.25%,      
Depositary Shares BBB 300,000 7,293,750
PPL Energy Supply, LLC, 7.00% BBB 297,512 7,494,327
Southern California Edison Co., 6.00%,      
Ser C BBB- 30,000 2,993,439
Southern California Edison Co., 6.125% BBB- 50,000 4,942,190
Xcel Energy, Inc., $4.56, Ser G BB+ 53,900 4,851,000
 
Gas Utilities 2.18%     15,530,790
Southern Union Co., 7.55%, Ser A BB 627,000 15,530,790
 
Investment Banking & Brokerage 4.46%     31,792,084
Bear Stearns Cos., Inc. (The), 5.49%,      
Depositary Shares, Ser G BBB+ 256,100 9,667,775
Bear Stearns Cos., Inc. (The), 5.72%,      
Depositary Shares, Ser F BBB+ 15,100 588,900
Bear Stearns Cos., Inc. (The), 6.15%,      
Depositary Shares, Ser E BBB+ 95,700 3,756,225
Lehman Brothers Holdings, Inc., 5.67%,      
Depositary Shares, Ser D A- 61,000 2,050,210
Lehman Brothers Holdings, Inc., 5.94%,      
Depositary Shares, Ser C A- 271,760 9,851,300
Lehman Brothers Holdings, Inc., 6.50%,      
Depositary Shares, Ser F A- 164,300 3,019,834
Merrill Lynch & Co., Inc., 6.375%,      
Depositary Shares, Ser 3 A 139,000 2,857,840

Page 3

John Hancock
Tax-Advantaged Dividend Income Fund
Securities owned by the Fund on
March 31, 2008 (unaudited)

Life & Health Insurance 2.46%     17,549,100
MetLife, Inc., 6.50%, Ser B BBB 765,000 17,549,100
 
Multi-Line Insurance 0.80%     5,683,200
ING Groep NV, 6.20% (Netherlands) (F) A 109,100 2,400,200
ING Groep NV, 7.05% (Netherlands) (F) A 140,000 3,283,000
 
Multi-Utilities 1.50%     10,670,212
BGE Capital Trust II, 6.20% BBB- 147,100 3,337,699
Public Service Electric & Gas Co., 5.05%,      
Ser D BB+ 23,442 2,059,145
Public Service Electric & Gas Co., 5.28%,      
Ser E BB+ 22,930 2,172,618
South Carolina Electric & Gas Co., 6.52% Baa1 31,400 3,100,750
 
Oil and Gas Exploration & Production 4.15%     29,584,138
Anadarko Petroleum Corp., 5.46%,      
Depositary Shares, Ser B BB 40,000 3,996,252
Devon Energy Corp., 6.49%, Ser A BB+ 150,000 15,140,625
Nexen, Inc., 7.35% (Canada) (F) BB+ 435,484 10,447,261
 
Other Diversified Financial Services 5.24%     37,380,800
ABN AMRO Capital Funding Trust VII, 6.08% A 980,000 19,874,400
Bank of America Corp., 6.204%, Depositary      
Shares, Ser D A+ 240,000 5,217,600
Bank of America Corp., 6.625% A+ 245,000 5,537,000
DB Capital Trust II, 6.55% A+ 310,000 6,751,800
 
Regional Banks 0.09%     617,500
Wachovia Corp., 8% A 25,000 617,500
 
Reinsurance 0.25%     1,781,300
RenaissanceRe Holdings Ltd., 6.08%, Ser C      
(Bermuda) (F) BBB+ 94,000 1,781,300
 
Specialized Finance 0.59%     4,188,100
CIT Group, Inc., 6.35%, Ser A BBB+ 310,000 4,188,100
 
Wireless Telecommunication Services 1.21%     8,631,031
United States Cellular Corp., 7.50% BB+ 398,294 8,631,031

    Interest Maturity Credit Par value  
Issuer, description   rate date rating (A) (000)                        Value
Short-term investments 1.63%         $11,600,000
(Cost $11,600,000)            
 
Government U.S. Agency 1.63%                    11,600,000
Federal Home Loan Bank,            
     Disc Note   1.53% (Y) 04-01-08 AAA $11,600          11,600,000

Page 4

John Hancock
Tax-Advantaged Dividend Income Fund
Securities owned by the Fund on
March 31, 2008 (unaudited)

Total investments (Cost $1,167,343,476)† 153.17%   $1,092,230,409
Other assets and liabilities, net 0.13%   $930,807
Fund preferred shares, at liquidation value (53.30%)   ($380,098,202)
Total net assets applicable to common shareholders 100.00% $713,063,014

The percentage shown for each investment category is the total value of that category, as a percentage of the net assets applicable to common shareholders.

Page 5

John Hancock
Tax-Advantaged Dividend Income Fund
Notes to Schedule of Investments
March 31, 2008 (unaudited)

ADR American Depositary Receipt

(A) Credit ratngs are unaudited and are rated by Moodys Investor Service where Standard & Poor's ratings are not available unless indicated otherwise.

(F) Parenthetical disclosure of a foreign country in the security description represents country of a foreign issuer.

(Y) Represents current yield as of March 31, 2008.

† The cost of investments owned on March 31, 2008, including short-term investments, for Federal income tax purposes was $1,167,343,476. Gross unrealized appreciation and depreciation of investments aggregated $72,977,129 and $148,090,196 respectively, resulting in net unrealized depreciation of $75,113,067.

Notes to Schedule of Investments - Page 6

John Hancock
Tax-Advantaged Dividend Income Fund
Interest rate swap contracts
March 31, 2008 (unaudited)

                              Rate type        
 
 
Notional Payments made   Payments received Termination   Unrealized
amount                by Fund   by Fund date Counterparty depreciation
 
$ 95,000,000.00                  3.60% (a)   3-month LIBOR Jan 2011      Bank of America ($2,269,989)

(a) Fixed rate

Interest rate swap contracts - Page 7

John Hancock
Tax-Advantaged Dividend Income Fund
Financial futures contracts
March 31, 2008 (unaudited)

  Number of     Unrealized
Open contracts contracts Position Expiration depreciation
 
U.S.10-Year Treasury Note            375   Short Jun 2008 ($1,751,651)

Financial futures contracts - Page 8

Notes to portfolio of investments

Security valuation

The net asset value of common shares of the Fund is determined daily as of the close of the New York Stock Exchange (NYSE), normally at 4:00 P.M., Eastern Time. Short-term debt investments that have a remaining maturity of 60 days or less are valued at amortized cost, and thereafter assume a constant amortization to maturity of any discount or premium, which approximates market value. All other securities held by the Fund are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) as of the close of business on the principal securities exchange (domestic or foreign) on which they trade or, lacking any sales, at the closing bid price. 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.

Other assets and securities for which no such quotations are readily available are 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. 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.

The Fund adopted Statement of Financial Accounting Standards No. 157 (FAS 157), Fair Value Measurements, effective with the beginning of the Fund’s fiscal year. FAS 157 establishes a hierarchy that prioritizes the inputs to valuation techniques giving the highest priority to readily available unadjusted quoted prices in active markets for identical assets (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements) when the market prices are not readily available or reliable. The three levels of hierarchy are described below:

Level 1 – Quoted prices in active markets for identical securities.

Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with observable market data. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk and others.

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 own assumptions about the factors that market participants would use in pricing an investment and would be based on the best information available.

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 Fund’s net assets as of March 31, 2008:

Valuation Inputs Investments in   Other Financial
  Securities   Instruments*
Level 1 – Quoted Prices $972,551,892 ($1,751,651)
Level 2 – Other Significant Observable Inputs 91,599,239 (2,269,989)
Level 3 – Significant Unobservable Inputs 28,079,278 –
Total $1,092,230,409 ($4,021,640)

* Other financial instruments are derivative instruments not reflected in the Portfolio of Investments, such as futures, forwards and swap contracts, which are valued at the unrealized appreciation/depreciation on the instrument.

The following is a reconciliation of Level 3 assets for which significant unobservable inputs were used to determine fair value:

  Investments in   Other Financial
  Securities   Instruments
Balance as of 12/31/07 $10,034,370 –
Accrued discounts/premiums – –
Realized gain (loss) – –
Change in unrealized appreciation (depreciation) (3,772,144) –
Net purchases (sales) – –
Transfers in and/or out of Level 3 21,817,052 –
Balance as of 3/31/08 $28,079,278 –

Futures

The Fund may purchase and sell financial futures contracts and options on those contracts. The Fund invests in contracts based on financial instruments such as U.S. Treasury Bonds or Notes or on securities indices such as the Standard & Poor’s 500 Index, in order to hedge against a decline in the value of securities owned by the Fund.

Initial margin deposits required upon entering into futures contracts are satisfied by the delivery of specific securities or cash as collateral to the broker (the Fund’s agent in acquiring the futures position). If the position is closed out by an opposite position prior to the settlement date of the futures contract, a final determination of variation margin is made, cash is required to be paid to or released by the broker and the Fund realizes a gain or loss.

Notes to Schedule of Investments - Page 9

When the Fund sells a futures contract based on a financial instrument, the Fund becomes obligated to deliver that kind of instrument at an agreed upon date for a specified price. The Fund realizes a gain or loss depending on whether the price of an offsetting purchase is less or more than the price of the initial sale or on whether the price of an offsetting sale is more or less than the price of the initial purchase. The Fund could be exposed to risks if it could not close out futures positions because of an illiquid secondary market or the inability of counterparties to meet the terms of their contracts. Futures contracts are valued at the quoted daily settlement prices established by the exchange on which they trade.

Swap contracts

The Fund may enter into swap transactions in order to hedge the value of the Fund’s portfolio against interest rate fluctuations or to enhance the Fund’s income or to manage the Fund’s exposure to credit or market risk.

Interest rate swaps represent an agreement between two counterparties to exchange cash flows based on the difference in the two interest rates, applied to the notional principal amount for a specified period. The payment flows are usually netted against each other, with the difference being paid by one party to the other. The Fund settles accrued net receivable or payable under the swap contracts on a periodic basis.

Credit default swaps involve the exchange of a fixed rate premium for protection against the loss in value of an underlying debt instrument in the event of a defined credit event (such as payment default or bankruptcy). Under the terms of the swap, one party acts as a “guarantor” receiving a periodic payment that is a fixed percentage applied to a notional principal amount. In return the party agrees to purchase the notional amount of the underlying instrument, at par, if a credit event occurs during the term of the swap. The Fund may enter into credit default swaps in which either it or its counterparty act as guarantors. By acting as the guarantor of a swap, the Fund assumes the market and credit risk of the underlying instrument including liquidity and loss of value.

The Fund records changes in the value of the swap as unrealized gains or losses on swap contracts. Net periodic payments accrued but not yet received (paid) are included in change in the unrealized appreciation/depreciation. Accrued interest income and interest expense on the swap contracts are recorded as realized gain (loss).

Swap contracts are subject to risks related to the counterparty’s ability to perform under the contract, and may decline in value if the counterparty’s creditworthiness deteriorates. The risks may arise from unanticipated movement in interest rates. The Fund may also suffer losses if it is unable to terminate outstanding swap contracts or reduce its exposure through offsetting transactions.

Notes to Schedule of Investments - Page 10


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 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 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 financial 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 Dividend Income Fund

By: /s/ Keith F. Hartstein
-------------------------------------
Keith F. Hartstein
President and Chief Executive Officer

Date: May 28, 2008

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: May 28, 2008

By: /s/ Charles A. Rizzo
-------------------------------------
Charles A. Rizzo
Chief Financial Officer

Date: May 28, 2008