ETF Report: John Hancock Preferred Income Fund III (HPS)

What this ETF is trying to do

The John Hancock Preferred Income Fund III (ticker: HPS) is an ETF listed on the NYSE. This type of fund focuses on providing income to its investors. It aims to pay out regular money to people who own shares in it.

What the numbers show

As of July 16, 2026, the current price of one share is $14.32. Looking back at the last year, the price has stayed relatively steady. One year ago, the estimated price was about $14.22.

While the price itself only grew by about 0.70% over the last year, the "total return" tells a bigger story. The total return for the last year was 10.164%. This is because the total return includes both the price changes and the extra money paid out to investors.

To see how this works, imagine you invested $10,000 into this ETF one year ago at the estimated price of $14.22. Before any distributions were paid, your $10,000 would have grown slightly in value due to the price increase, but most of your profit would come from the cash payments you received during the year.

Income and distribution explanation

This ETF is known for paying out money frequently. It usually pays out monthly, and it has made 12 distributions over the last 12 months. The trailing distributions (the total amount paid per share over the last year) were $1.32.

The distribution yield is 9.2179%. This number tells you how much cash the fund pays out compared to its price. It is important to remember that a high yield alone can be misleading. A very high yield might look good, but it doesn't tell you if the value of your investment is staying healthy.

NAV erosion explanation

"NAV erosion" happens when the value of the underlying assets in an ETF drops over time. If an ETF's price falls significantly from a high price to a much lower price, it can destroy your principal. Principal is the original money you put in. If you invest $100 and the price drops to $50, you have lost half your money, even if the fund pays you some cash.

However, HPS has an erosion score of 94, which is labeled as "Stable / sideways." This means it does not show signs of severe erosion. The severity is rated as "good," and there is no flag for severe erosion.

Pros

• It provides a high distribution yield of 9.2179%.

• The fund has a history of regular monthly payments.

• The price has remained stable rather than collapsing.

Cons

• The price growth (price return) is very low, meaning most of the profit comes from distributions rather than the share price going up.

Beginder takeaway

Income investors usually prefer ETFs that go "sideways" (stay at a steady price) or move slightly up. They prefer this because they want to collect the cash payments without losing their original investment. Because HPS is labeled as stable and does not show severe NAV erosion, it fits that pattern of staying steady while paying out income.