<PAGE> PAGE 1
000 B000000 09/30/97
000 C000000 0000805267
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 N
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 H&Q HEALTHCARE INVESTORS
001 B000000 811-4889
001 C000000 6175740567
002 A000000 50 ROWES WHARF
002 B000000 BOSTON
002 C000000 MA
002 D010000 02110
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
020 A000001 MIDLAND WALWYN
020 C000001 13
020 A000002 DILLON READ
020 C000002 8
020 A000003 CONEN & CO.
020 C000003 4
020 A000004 ALEX BROWN
020 C000004 1
020 C000005 0
020 C000006 0
020 C000007 0
020 C000008 0
020 C000009 0
020 C000010 0
021 000000 26
022 A000001 FORD CP
022 B000001 381612444
022 C000001 173050
022 D000001 0
022 A000002 GMAC CP
022 B000002 38-0572572
022 C000002 143150
022 D000002 0
022 A000003 PAINE WEBBER
022 C000003 70962
022 D000003 0
022 A000004 UBS
022 C000004 4975
022 D000004 2423
<PAGE> PAGE 2
022 A000005 CONEN
022 C000005 5465
022 D000005 1731
022 A000006 ALEX BROWN
022 C000006 4005
022 D000006 800
022 A000007 GE CAPITAL
022 C000007 4388
022 D000007 0
022 A000008 STATE STREET BANK
022 C000008 3798
022 D000008 0
022 A000009 DILLON READ
022 C000009 933
022 D000009 2008
022 A000010 PACIFIC GROWTH
022 C000010 4
022 D000010 399
023 C000000 425400
023 D000000 47065
062 A000000 N
062 B000000 0.0
062 C000000 0.0
062 D000000 0.0
062 E000000 0.0
062 F000000 0.0
062 G000000 0.0
062 H000000 0.0
062 I000000 0.0
062 J000000 0.0
062 K000000 0.0
062 L000000 0.0
062 M000000 0.0
062 N000000 0.0
062 O000000 0.0
062 P000000 0.0
062 Q000000 0.0
062 R000000 0.0
066 A000000 Y
066 B000000 N
066 C000000 Y
066 D000000 N
066 E000000 N
066 F000000 N
066 G000000 N
067 000000 N
068 A000000 N
068 B000000 N
069 000000 N
070 A010000 Y
070 A020000 Y
<PAGE> PAGE 3
070 B010000 N
070 B020000 N
070 C010000 N
070 C020000 N
070 D010000 N
070 D020000 N
070 E010000 N
070 E020000 N
070 F010000 N
070 F020000 N
070 G010000 N
070 G020000 N
070 H010000 N
070 H020000 N
070 I010000 N
070 I020000 N
070 J010000 Y
070 J020000 Y
070 K010000 Y
070 K020000 N
070 L010000 Y
070 L020000 N
070 M010000 Y
070 M020000 N
070 N010000 Y
070 N020000 N
070 O010000 Y
070 O020000 N
070 P010000 N
070 P020000 N
070 Q010000 N
070 Q020000 N
070 R010000 N
070 R020000 N
071 A000000 47467
071 B000000 25500
071 C000000 165943
071 D000000 17
072 A000000 12
072 B000000 674
072 C000000 0
072 D000000 0
072 E000000 0
072 F000000 2061
072 G000000 0
072 H000000 0
072 I000000 19
072 J000000 61
072 K000000 0
072 L000000 80
072 M000000 46
<PAGE> PAGE 4
072 N000000 0
072 O000000 0
072 P000000 0
072 Q000000 0
072 R000000 47
072 S000000 25
072 T000000 0
072 U000000 0
072 V000000 0
072 W000000 67
072 X000000 2406
072 Y000000 0
072 Z000000 -1731
072AA000000 11600
072BB000000 2366
072CC010000 25663
072CC020000 0
072DD010000 0
072DD020000 0
072EE000000 25724
073 A010000 0.0000
073 A020000 0.0000
073 B000000 4.4900
073 C000000 0.0000
074 A000000 47
074 B000000 0
074 C000000 13494
074 D000000 0
074 E000000 22075
074 F000000 172381
074 G000000 0
074 H000000 0
074 I000000 0
074 J000000 0
074 K000000 0
074 L000000 0
074 M000000 26
074 N000000 208023
074 O000000 0
074 P000000 0
074 Q000000 0
074 R010000 0
074 R020000 0
074 R030000 0
074 R040000 294
074 S000000 0
074 T000000 207729
074 U010000 8990
074 U020000 0
074 V010000 23.11
074 V020000 0.00
<PAGE> PAGE 5
074 W000000 0.0000
074 X000000 0
074 Y000000 0
075 A000000 0
075 B000000 153608
076 000000 19.00
077 A000000 Y
077 B000000 Y
077 C000000 N
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 N
077 P000000 N
077 Q010000 Y
077 Q020000 N
077 Q030000 N
078 000000 N
080 A000000 FIDELITY & DEPOSIT COMPANY OF MARYLAND
080 B000000 0
080 C000000 1000
081 A000000 Y
081 B000000 1
082 A000000 Y
082 B000000 25
083 A000000 N
083 B000000 0
084 A000000 N
084 B000000 0
085 A000000 Y
085 B000000 N
086 A010000 0
086 A020000 0
086 B010000 0
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
<PAGE> PAGE 6
SIGNATURE KIM CARROLL
TITLE TREASURER
[LETTERHEAD] Arthur Andersen LLP
EX. 23
To the Board of Directors of
H&Q Healthcare Investors:
In planning and performing our audit of the financial statements of H&Q
Healthcare Investors for the year ended September 30, 1997, we considered its
internal control structure, including procedures for safeguarding securities, in
order to determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the requirements of Form
N-SAR, not to provide assurance on the internal control structure.
The management of H&Q Healthcare Investors is responsible for establishing and
maintaining an internal control structure. In fulfilling this responsibility,
estimates and judgments by management are required to assess the expected
benefits and related costs of internal control structure policies and
procedures. Two of the objectives of an internal control structure are to
provide management with reasonable, but not absolute, assurance that assets are
safeguarded against loss from unauthorized use or disposition and transactions
are executed in accordance with management's authorization and recorded
properly to permit preparation of financial statements in conformity with
generally accepted accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and may not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it may
become inadequate because of changes in conditions or that the effectiveness of
the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of Certified
Public Accountants. A material weakness is a condition in which the design or
operation of the specific internal control structure elements does not reduce to
a relatively low level the risk that errors or irregularities in amounts that
would be material in relation to the financial statements being audited may
occur and not be detected within a timely period by employees in the normal
course of performing their assigned functions. However, we noted no matters
involving the internal control structure, including procedures for safeguarding
securities, that we consider to be material weaknesses as defined above as of
September 30, 1997.
This report is intended solely for the information and use of management and the
Securities and Exchanges Commission.
/s/ Arthur Andersen, LLP
Arthur Andersen, LLP
Boston, Massachusetts
October 31, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<NAME> H&Q Healthcare Investors
<CIK> 0000805267
<S> <C>
<PERIOD-TYPE> year
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 132,214,199
<INVESTMENTS-AT-VALUE> 207,949,788
<RECEIVABLES> 0
<ASSETS-OTHER> 73,359
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 208,023,147
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 294,481
<TOTAL-LIABILITIES> 294,481
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 122,931,698
<SHARES-COMMON-STOCK> 8,990,179
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 9,061,379
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 75,735,589
<NET-ASSETS> 207,728,666
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 674,621
<OTHER-INCOME> 0
<EXPENSES-NET> 2,405,652
<NET-INVESTMENT-INCOME> (1,731,031)
<REALIZED-GAINS-CURRENT> 9,234,460
<APPREC-INCREASE-CURRENT> 25,663,757
<NET-CHANGE-FROM-OPS> 33,167,186
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (14,774,850)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 60,176,161
<ACCUMULATED-NII-PRIOR> 26,774,551
<ACCUMULATED-GAINS-PRIOR> 31,987,259
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 2,061,573
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,405,652
<AVERAGE-NET-ASSETS> 153,608,000
<PER-SHARE-NAV-BEGIN> 25.754
<PER-SHARE-NII> (0.224)
<PER-SHARE-GAIN-APPREC> 4.524
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 4.49
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 23.106
<EXPENSE-RATIO> 1.57
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
