HANCOCK JOHN DECLARATION TRUST
497, 1999-02-16
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                                February 12, 1999

   
Dear Declaration Contract or Certificate Owner:

I am writing to ask you to consider an important matter that will affect your
annuity contract or certificate. Some or all of the value of your variable
insurance contract or certificate issued by either John Hancock Mutual Life
Insurance Company or John Hancock Variable Life Insurance Company (the
"insurance companies") is invested in the John Hancock V.A. World Bond Fund (the
"fund"). The insurance companies hold shares of the V.A. World Bond Fund in
separate accounts for the purpose of funding your annuity payments. For this
reason, you have the right to instruct your insurance company how to vote the
fund shares attributable to your variable insurance contract or certificate.
    

Since its inception in August 1996, the fund has invested heavily in foreign
bonds as well as bonds issued by multinational organizations and the U.S.
government. In recent years it has become difficult to post strong returns with
this strategy because of increasing instability in the foreign markets coupled
with the growing strength of the U.S. dollar.

For this reason, the fund's trustees are recommending the merger of the fund
into the John Hancock V.A. Strategic Income Fund, which invests in U.S.
government bonds and high-yield U.S. corporate bonds as well as foreign bonds.
Through its broader investment approach, the V.A. Strategic Income Fund allows
investors to participate in foreign investments without being as vulnerable to
potential downturns overseas.

This proposed merger has been unanimously approved by the fund's Board of
Trustees, who believe it will benefit the fund's shareholders and, indirectly,
holders of variable contracts or certificates based on the fund. The merger is
detailed in the enclosed proxy statement and summarized in the questions and
answers on the following pages. I suggest you read both thoroughly before
voting.

No matter what size your investment may be, your instructions are important. I
urge you to review the enclosed materials and to complete, sign and return the
enclosed voting instruction card to the insurance company, which will vote its
shares in the fund in accordance with your instructions. Your prompt response
will help avoid the need for additional mailings at the fund's expense. For your
convenience, we have provided a postage-paid envelope.

If you have any questions or need additional information, please contact your
investment professional or call a Declaration customer service representative at
1-800-824-0335, Monday through Friday between 8:00 a.m. and 6:00 p.m. Eastern
Time. I thank you for your prompt attention to this matter.

                                               Sincerely,



                                               /s/Edward J. Boudreau, Jr.
                                               --------------------------
                                               Edward J. Boudreau, Jr.
                                               Chairman and CEO
                                               John Hancock V.A. World Bond Fund




   
The Declaration Variable Annuity is issued by John Hancock Mutual Life
Insurance Company, or its subsidary John Hancock Variable Life
Insurance Company+, Boston, MA 02117. +Not Licensed in New York  
    

                                                                    VA09PXL 2/99
                                                                    FORM JHFI 95

<PAGE>


Q:       What are the benefits of merging the V.A. World Bond Fund into the V.A.
         Strategic Income Fund?

A:       The V.A. Strategic Income Fund has a much wider investment scope
         than the V.A. World Bond Fund. As owner of a variable contract or
         certificate based on the V.A. Strategic Income Fund, you can continue
         to participate in the international sector while opening your portfolio
         to a broad range of opportunities in the U.S. government and corporate
         high-yield sectors. This diversification will also help to make your
         investment less dependent upon the success of international markets.

         In addition, the V.A. Strategic Income Fund's larger asset base after
         the merger may allow for lower operating expenses than the V.A. World
         Bond Fund has now. Following the merger, annual fees are projected to
         be 0.85%, down from 1.00%. These projected lower expenses should help
         bolster an investment's total return over time.

Q:       How does the V.A. Strategic Income Fund's strategy compare with that of
         the V.A. World Bond Fund?

A:       The V.A. Strategic Income Fund seeks a high level of current income,
         while the V.A. World Bond Fund seeks a high total investment return
         from current income and capital appreciation. Although both funds
         invest in foreign bonds as well as U.S. government and agency
         securities, the V.A. World Bond Fund has traditionally focused on
         international sectors and multinational organizations. The V.A.
         Strategic Income Fund invests in domestic corporate bonds as well as
         foreign and U.S. government bonds, providing greater diversification so
         investors are less vulnerable to weakness in any single sector.

         The U.S. corporate portion of the V.A. Strategic Income Fund's
         portfolio typically focuses on corporate high-yield bonds. These bonds
         entail some credit risk, which the fund's management team minimizes by
         applying a relatively conservative investment approach. This strategy
         also allows the V.A. Strategic Income Fund to seek higher current
         income than the V.A. World Bond Fund.

Q:       Who manages the V.A. Strategic Income Fund?

   
A:       The V.A. Strategic Income Fund is managed by a team of portfolio
         managers led by Frederick L. Cavanaugh, Jr., a senior vice president
         with more than 25 years of investment experience. His expertise
         includes the high yield bond market and international economies, and he
         has led the fund's management team since its inception on August 29,
         1996.

         With the merger of the V.A. World Bond Fund into the V.A. Strategic
         Income Fund, Mr. Cavanaugh and his team will allocate the fund's assets
         among domestic and foreign bonds, emphasizing bond sectors where they
         see the strongest opportunities at any given time.
    

Q:       How has the V.A. Strategic Income Fund performed?

A:       Although past performance does not guarantee future results, the
         V.A. Strategic Income Fund has been a steady performer. The fund's
         shares have posted average annual total returns of 10.50% for the
         12-month period ending June 30, 1998 and 12.65% since inception on
         August 29, 1996.* To review the V.A. Strategic Income Fund in more
         detail, please refer to the John Hancock Declaration Trust prospectus
         and the V.A. Strategic Income Fund's most recent annual and semiannual
         reports, all of which are enclosed.

         * Performance figures assume all distributions are reinvested. The
         return and principal value of any mutual fund investment will
         fluctuate, so that shares, when redeemed, may be worth more or less
         than their original cost.

<PAGE>


Q:       How do I provide my voting instructions?

A:       Complete, sign and return the enclosed voting instruction card using
         the postage-paid envelope provided.

Q:       How will the merger happen?

A:       If the merger is approved, the insurance companies' V.A. World Bond
         Fund shares will be exchanged for V.A. Strategic Income Fund shares,
         using the funds' net asset value share prices as of the close of
         trading on March 26, 1999. This exchange will not affect the total
         dollar value of the insurance companies' investment or your rights
         under your variable contract or certificate.

   
Q:       Will the merger affect my contract or certificate rights?

A:       The insurance companies have advised the V.A. World Bond Fund that
         as contract or certificate owners in an annuity, you will continue to
         receive income payments according to the payout option you have chosen
         under the contract or certificate prospectus. The merger will not
         affect your contract or certificate rights, except that your variable
         payments will depend on the performance of the V.A. Strategic Income
         Fund instead of the V.A. World Bond Fund.
    

Q:       Will the merger have tax consequences?

A:       The merger is intended to qualify as a tax-free reorganization for
         federal income tax purposes and therefore will not result in the
         recognition of gain or loss by the funds or the insurance companies,
         nor will it affect your taxes as owner of a variable contract or
         certificate.

Q:       Will the transfer of my units from the V.A. World Bond Fund to the
         V.A. Strategic Income Fund be a taxable event?

A:       No! One of the many advantages of investing in a variable annuity is
         the ability to transfer your assets to any of the investment options
         available tax-free (no Form 1099R will be generated).

   
Q:       Will the transfer due to the merger count towards the 12 free
         transfers allowed per contract or certificate year?

A:       No, the merger transfer will be free and it will not count toward
         your allowable 12 free transfers per contract or certificate year on
         your Declaration Variable Annuity.
    

Q:       What if I don't want to have my units of the V.A. World Bond Fund
         transferred to the V.A. Strategic Income Fund?

A:       Prior to the merger, you may contact a Declaration Customer Service
         Representative at 1-800-824-0335, Monday through Friday between 8:00
         a.m. and 6:00 p.m. Eastern Time and request a transfer of your V.A.
         World Bond Fund units to any of the 13 other Declaration investment
         portfolios or Fixed Account options (if available in your state).
         Please consult with your investment professional prior to reallocating
         your assets.





<PAGE>



                        JOHN HANCOCK V.A. WORLD BOND FUND
                  (a series of John Hancock Declaration Trust)
                              101 Huntington Avenue
                                Boston, MA 02199

                        NOTICE OF MEETING OF SHAREHOLDERS
                          SCHEDULED FOR MARCH 18, 1999

This is the formal agenda for the fund's shareholder  meeting. It tells contract
owners and the  insurance  companies  what matters will be voted on and the time
and place of the  meeting.  The  insurance  companies  are  owners of the fund's
shares.  The insurance  companies will vote their V.A. World Bond Fund shares as
instructed by their contract or certificate  owners, who are also referred to in
the proxy materials as "shareholders" for this limited purpose.

To the shareholders of John Hancock V.A. World Bond Fund:

A shareholder  meeting for V.A.  World Bond Fund will be held at 101  Huntington
Avenue, Boston,  Massachusetts on Thursday, March 18, 1999 at 9:00 a.m., Eastern
time, to consider the following:

1.       A proposal to approve an Agreement and Plan of  Reorganization  between
         John  Hancock  V.A.  World Bond Fund and John  Hancock  V.A.  Strategic
         Income Fund. Under this Agreement,  V.A. World Bond Fund would transfer
         all of its assets to V.A.  Strategic Income Fund in exchange for shares
         of V.A.  Strategic  Income  Fund.  These  shares  would be  distributed
         proportionately  to the  shareholders  of V.A.  World Bond  Fund.  V.A.
         Strategic  Income  Fund  would  also  assume  V.A.  World  Bond  Fund's
         liabilities.  V.A. World Bond Fund's Board of Trustees  recommends that
         shareholders vote FOR this proposal.

2.       Any other business that may properly come before the meeting.

Shareholders  of record as of the close of  business  on  January  22,  1999 are
entitled to vote at the meeting and any related follow-up meetings.

Whether or not you expect to attend the meeting,  please complete and return the
enclosed proxy card (voting  instruction  card).  If  shareholders do not return
their  proxies  in  sufficient  numbers,  the fund will  incur the cost of extra
solicitations, which is indirectly borne by shareholders.

                                 By order of the Board of Trustees,


                                 /s/Susan S. Newton
                                 ------------------
                                 Susan S. Newton
                                 Secretary

February 12, 1999

VA09PX 2/99


<PAGE>



                               PROXY STATEMENT OF
                        JOHN HANCOCK V.A. WORLD BOND FUND
                  (a series of John Hancock Declaration Trust)

                                 PROSPECTUS FOR
                     JOHN HANCOCK V.A. STRATEGIC INCOME FUND
                  (a series of John Hancock Declaration Trust)

This proxy statement and prospectus contains the information shareholders should
know before voting on the proposed reorganization of John Hancock V.A. World
Bond Fund into John Hancock V.A. Strategic Income Fund. Please read it carefully
and retain it for future reference.

How the Reorganization Will Work

                  o        V.A. World Bond Fund will transfer all of its assets 
                           to V.A. Strategic Income Fund.
                           V.A. Strategic Income Fund will assume V.A. World
                           Bond Fund's liabilities.

                  o        V.A.  Strategic Income Fund will issue shares to V.A.
                           World Bond Fund in an amount equal to the value of 
                           V.A.  World Bond Fund's  shares.  These  shares will 
                           be  distributed  to V.A.  World Bond Fund's
                           shareholders in proportion to their holdings on the
                           reorganization date.

                  o        The reorganization will be tax-free.

                  o        V.A. World Bond Fund will be liquidated and fund 
                           shareholders  will become  shareholders of V.A.
                           Strategic Income Fund.

Shares of V.A.  Strategic  Income Fund are not  deposits or  obligations  of, or
guaranteed  or  endorsed  by, any bank or other  depository  institution.  These
shares are not federally insured by the Federal Deposit  Insurance  Corporation,
the Federal Reserve Board or any other government agency.

Shares of V.A.  Strategic  Income Fund have not been approved or  disapproved by
the Securities and Exchange  Commission.  The Securities and Exchange Commission
has  not  passed  upon  the  accuracy  or  adequacy  of  this  prospectus.   Any
representation to the contrary is a criminal offense.


<PAGE>



Why V.A. World Bond Fund's Trustees are Recommending the Reorganization

V.A. World Bond Fund's Trustees believe that reorganizing the fund into a larger
fund with similar  investment  policies will enable the shareholders of the fund
to benefit from  increased  diversification,  the ability to achieve  better net
prices on  securities  trades and  economies of scale that may  contribute  to a
lower expense  ratio.  Therefore,  the Trustees  recommend  that V.A. World Bond
Fund's shareholders vote FOR the reorganization.

<TABLE>
<CAPTION>

                              <S>                                            <C> 
         ---------------------------------------------------------------------------------------------
         Where to Get More Information
         ------------------------------------------------ --------------------------------------------
         Prospectus of V.A. World Bond Fund and V.A.      In the same envelope as this proxy
         Strategic Income Fund dated May 1, 1998.         statement and prospectus. Incorporated by
                                                          reference into this proxy statement and
                                                          prospectus.
         ------------------------------------------------
         V.A. Strategic Income Fund's annual and
         semiannual reports to shareholders.
         ------------------------------------------------
         V.A. World Bond Fund's annual and semiannual
         reports to shareholders.
                                                          --------------------------------------------
         ------------------------------------------------
         A statement of additional information dated      On file with the Securities and Exchange
         February 12, 1999.  It contains additional       Commission ("SEC") and available at no
         information about V.A. World Bond Fund and       charge by calling    1-800-824-0335.
         V.A. Strategic Income Fund.                      Incorporated by reference into this proxy
                                                          statement and prospectus.
                                                          --------------------------------------------
         ------------------------------------------------
         To ask questions about this proxy statement      Call our toll-free telephone
         and prospectus.                                  number: 1-800-824-0335.
         ------------------------------------------------ --------------------------------------------
</TABLE>



           The date of this proxy statement and prospectus is February 12, 1999.



<PAGE>



                                TABLE OF CONTENTS

                                                                    Page
                                                                    ----
INTRODUCTION                                                           4
SUMMARY                                                                4
INVESTMENT RISKS                                                      11
PROPOSAL TO APPROVE THE AGREEMENT
    AND PLAN OF REORGANIZATION                                        12
CAPITALIZATION                                                        15
ADDITIONAL INFORMATION ABOUT
    THE FUNDS' BUSINESSES                                             16
BOARDS' EVALUATION AND RECOMMENDATION                                 16
VOTING RIGHTS AND REQUIRED VOTE                                       17
INFORMATION CONCERNING THE MEETING                                    17
OWNERSHIP OF SHARES OF THE FUNDS                                      19
EXPERTS                                                               19
AVAILABLE INFORMATION                                                 20

                                    EXHIBITS

A.       Agreement and Plan of Reorganization between John Hancock V.A. World 
         Bond Fund and John Hancock V.A. Strategic Income Fund (attached to this
         document).


<PAGE>



                                  INTRODUCTION

This proxy  statement  and  prospectus  is being used by V.A.  World Bond Fund's
Board of  Trustees to solicit  proxies to be voted at a special  meeting of V.A.
World Bond Fund's  shareholders.  This  meeting  will be held at 101  Huntington
Avenue, Boston,  Massachusetts on Thursday, March 18, 1999 at 9:00 a.m., Eastern
time.  The  purpose  of the  meeting is to  consider  a  proposal  to approve an
Agreement and Plan of  Reorganization  providing for the  reorganization of V.A.
World Bond Fund into V.A. Strategic Income Fund.

Who is Eligible to Vote?

Shareholders  of record on January 22, 1999 (record date) are entitled to attend
and vote at the meeting or any adjourned meeting.  Each share is entitled to one
vote. As of the record date, the insurance companies,  on behalf of the separate
accounts,  were  shareholders  of record of V.A.  World Bond Fund. The insurance
companies  will vote shares of V.A.  World Bond Fund held by them in  accordance
with voting  instructions  received from contract  owners for whose accounts the
shares  are  held.  The  enclosed  voting  instruction  card will be used by the
insurance  companies to receive voting  instructions  from contract owners.  The
notice of meeting, the proxy card (voting instruction card), the proxy statement
and prospectus are being mailed to the insurance  companies and contract  owners
on or about February 12, 1999.

                                     SUMMARY

The following is a summary of more complete information  appearing later in this
proxy statement.  Shareholders should read the entire proxy statement, Exhibit A
and the enclosed documents carefully,  because they contain details that are not
in the summary.  Information about rights of a holder of a variable contract can
be obtained from the John Hancock Declaration Annuity Prospectus.


<PAGE>

<TABLE>
<CAPTION>


Comparison of V.A. World Bond Fund to V.A. Strategic Income Fund
           <S>                                  <C>                                       <C>   
- ----------------------------- -------------------------------------- ----------------------------------------------
                                         V.A. World Bond                         V.A. Strategic Income
- ----------------------------- -------------------------------------- ----------------------------------------------
Business:                     A non-diversified series of John       A diversified series of John Hancock
                              Hancock Declaration Trust. The trust   Declaration Trust.  The trust is an open-end
                              is an open-end investment company      investment company organized as a
                              organized as a Massachusetts           Massachusetts business trust.
                              business trust.
- ----------------------------- -------------------------------------- ----------------------------------------------
Net assets as of June 30,     $2.4 million.                          $10.8 million.
1998:
- ----------------------------- -------------------------------------- ----------------------------------------------
Investment adviser and        John Hancock Advisers, Inc.            John Hancock Advisers, Inc.
portfolio managers:
                              In September, 1998, Mr. Cavanaugh      Fredrick L. Cavanaugh, Jr.
                              and Mr. Ho joined your fund's          -Senior V.P. of adviser
                              portfolio management team:             -Joined team in 1996
                                                                     -Joined adviser in 1986
                              Fredrick L. Cavanaugh, Jr.             -Began career in 1975
                              -Senior V.P. of adviser
                              -Joined team in 1998                   Arthur N. Calavritinos, CFA
                              -Joined adviser in 1986                -V.P. of adviser
                              -Began career in 1975                  -Joined team in 1996
                                                                     -Joined adviser in 1988
                              James K. Ho, CFA                       -Began career in 1986
                              -Exec. V.P. of adviser
                              -Joined team in 1998
                              -Joined adviser in 1985
                              -Began career in 1977

                              Anthony A. Goodchild
                              -Senior V.P. of adviser
                              -Joined team in 1994
                              -Joined adviser in 1994
                              -Began career in 1968
- ----------------------------- -------------------------------------- ----------------------------------------------


<PAGE>




- ----------------------- ------------------------------------------------- --------------------------------------
                                      V.A. World Bond Fund                     V.A. Strategic Income Fund
- ----------------------- ------------------------------------------------- --------------------------------------
Investment objective/   The fund seeks a high total investment return,    The fund seeks a high level of
Primary investments:    a combination of current income and capital       current income. This objective can
                        appreciation.  This objective can be changed      be changed without shareholder
                        without shareholder approval.                     approval.

                        The fund invests primarily (at least 65% of       The fund invests primarily in:
                        assets) in:
                                                                          o   Foreign government and
                        o  Debt securities issued or guaranteed by        corporate debt securities from
                        foreign governments and companies,  including     developed and emerging     markets;
                        those in emerging markets;                        o   U.S. Government and agency
                        o  U.S. Government and agency securities    and   securities; and
                        municipal securities; and                         o   U.S. junk bonds rated as low
                        o  Multinational organizations such as the        as CC/Ca and their unrated
                        World Bank.                                       equivalents.

                        The fund normally invests in securities
                        denominated in at least three currencies,
                        including the U.S. dollar.
- ----------------------- ----------------------------------------------------------------------------------------
Foreign debt            Each fund may invest in foreign debt securities without any percentage limit.  Each
securities:             fund limits its investment in government securities of any one country to 25% of total
                        assets.
- ----------------------- ------------------------------------------------- --------------------------------------
Junk bonds:             The fund may invest up to 35% of total assets The
                        fund may invest  without limit in in junk bonds rated as
                        low as  CCC/Caa  and their  junk  bonds  rated as low as
                        CC/Ca   and   unrated    equivalents.    their   unrated
                        equivalents.
- ----------------------- ------------------------------------------------- --------------------------------------
Equity securities:      The fund does not invest in equity securities.    The fund may invest up to 10% of net
                        However, the fund may invest in preferred         assets in U.S. or foreign equity
                        stock, convertible securities and other debt      securities.
                        securities that have rights (warrants) to
                        acquire equity securities.
- ----------------------- ------------------------------------------------- --------------------------------------
Diversification:        The fund is non-diversified and can invest more   The fund is diversified and, with
                        than 5% of total assets in securities of a        respect to 75% of total assets,
                        single issuer.                                    cannot invest more than 5% of total
                                                                          assets in securities of a single
                                                                          issuer.
- ----------------------- ------------------------------------------------- --------------------------------------
Pay-in-kind, delayed    The fund may not invest in pay-in-kind, delayed   The fund may invest in pay-in-kind,
and zero coupon debt    and zero coupon debt securities.                  delayed and zero coupon debt
securities:                                                               securities.
- ----------------------- ------------------------------------------------- --------------------------------------


<PAGE>




- ---------------------- --------------------------------------------------- ------------------------------------
                                      V.A. World Bond Fund                     V.A. Strategic Income Fund
- ---------------------- ----------------------------------------------------------------------------------------
Illiquid  securities:  Each fund may invest up to 15% of net assets in  illiquid securities.

- ---------------------- ----------------------------------------------------------------------------------------
Financial futures      Each fund may invest without limit in financial futures, options on futures and
and related options;   options on securities and indices.
options on
securities and
indices:
- ---------------------- ----------------------------------------------------------------------------------------
Currency  contracts:   Each fund may enter into currency contracts for hedging or speculative purposes.
- ---------------------- ----------------------------------------------------------------------------------------
Structured             Each fund may invest without limit in structured securities, which include indexed
securities:            and/or leveraged mortgage-backed and other debt securities.
- ---------------------- ----------------------------------------------------------------------------------------
When-issued and        Both funds may purchase  when-issued  securities and purchase or
forward commitment     sell securities in forward commitment transactions.
transactions:
- ---------------------- ----------------------------------------------------------------------------------------
Short-term  trading:   Neither fund is subject to any  limitations  on short-term trading.
- ---------------------- ----------------------------------------------------------------------------------------
Repurchase             Both funds may invest without limitation in repurchase agreements.
agreements:
- ---------------------- ----------------------------------------------------------------------------------------
Securities  lending:   Each fund may lend  portfolio  securities up to 33 1/3% of total assets.
- ---------------------- ----------------------------------------------------------------------------------------
Short-term             Each fund may invest without limit in cash and cash equivalents for temporary
securities:            defensive purposes.
- ---------------------- ----------------------------------------------------------------------------------------
Borrowing and          The funds are not permitted to borrow except from banks for temporary or short-term
reverse repurchase     purposes and only if after the borrowing there is asset coverage of at least 300%.
agreements:            Each fund is permitted to enter into reverse repurchase agreements in amounts not to
                       exceed 33 1/3% of the value of the  fund's  total  assets
                       (including the amount borrowed).
- ---------------------- ----------------------------------------------------------------------------------------
Mortgage-backed and    Each fund may invest without limitation in mortgage-backed securities.  V.A. Strategic
asset-backed           Income Fund may also invest without limit in asset-backed securities.
securities:
- ---------------------- ----------------------------------------------------------------------------------------
</TABLE>

The Funds' Expenses

Both funds pay various  expenses.  The first two expense tables  appearing below
show the expenses for the twelve-month  period ended June 30, 1998,  adjusted to
reflect  any  changes.  Future  expenses  may be greater or less.  The  examples
contained in each expense table show what you would pay if you invested  $10,000
over  the  various  time  periods  indicated.  Each  example  assumes  that  you
reinvested all dividends and that the average annual return was 5%. The examples
are for comparison  purposes only and are not a representation  of either fund's
actual expenses or returns, either past or future.


<PAGE>



V.A. World Bond Fund

Shareholder transaction expenses
Maximum sales charge imposed on purchases
(as a percentage of offering price)                                 0.00%
Maximum sales charge imposed on
reinvested dividends                                                 none
Maximum deferred sales charge                                        none
Redemption fee                                                       none
Exchange fee                                                         none

Annual fund operating expenses
(as a % of average net assets)
Management fee                                                      0.75%
Other expenses                                                      1.56%
Total fund operating expenses                                       2.31%
Expense reimbursement (at least until 12/31/99) (1)                 1.31%
Actual operating expenses                                           1.00%

Example
                                      Year 1    Year 3     Year 5       Year 10
At end of period                       $102      $595     $1,116        $2,544

(1)      The fund's adviser has agreed to limit other expenses to 0.25% for at 
         least one year.

V.A. Strategic Income Fund

Shareholder transaction expenses
Maximum sales charge imposed on purchases
(as a percentage of offering price)                               0.00%
Maximum sales charge imposed on
reinvested dividends                                               none
Maximum deferred sales charge                                      none
Redemption fee                                                     none
Exchange fee                                                       none

Annual fund operating expenses
(as a % of average net assets)
Management fee                                                     0.60%
Other expenses                                                     0.53%
Total fund operating expenses                                      1.13%
Expense reimbursement (at least until 12/31/99) (1)                0.28%
Actual operating expenses                                          0.85%

Example
                                     Year 1     Year 3     Year 5       Year 10
At end of period                      $87       $331       $595        $1,350

(1)      The fund's adviser has agreed to limit other expenses to 0.25% for at
         least one year.


<PAGE>



Pro Forma Expense Table

The  following  expense  table shows the pro forma  expenses  of V.A.  Strategic
Income Fund assuming that a reorganization with V.A. World Bond Fund occurred on
June 30, 1997.  The  expenses  shown in the table are based on fees and expenses
incurred  during the twelve months ended June 30, 1998,  adjusted to reflect any
changes.  V.A.  Strategic Income Fund's actual expenses after the reorganization
may be greater or less than those shown. The example  contained in the pro forma
expense  table  shows  what  you  would  pay  on a  $10,000  investment  if  the
reorganization  had  occurred on June 30,  1997.  The example  assumes  that you
reinvested  all  dividends  and that the average  annual  return was 5%. The pro
forma example is for  comparison  purposes only and is not a  representation  of
V.A. Strategic Income Fund's actual expenses or returns, either past or future.

V.A. Strategic Income Fund (PRO FORMA)
(Assuming reorganization with V.A. World Bond Fund)

Shareholder transaction expenses
Maximum sales charge imposed on purchases
(as a percentage of offering price)                                0.00%
Maximum sales charge imposed on
reinvested dividends                                                none
Maximum deferred sales charge                                       none
Redemption fee                                                      none
Exchange fee                                                        none

Annual fund operating expenses
(as a % of average net assets)
Management fee                                                     0.60%
Other expenses                                                     0.57%
Total fund operating expenses                                      1.17%
Expense reimbursement (at least until 12/31/99) (1)                0.32%
Actual operating expenses                                          0.85%

Pro Forma Example

                                     Year 1     Year 3     Year 5       Year 10
At end of period                       $87       $366       $665        $1,518

(1)      The fund's adviser has agreed to limit other expenses to 0.25% for at 
         least one year.


<PAGE>



The Reorganization

          o       The reorganization is scheduled to occur at 5:00 p.m.,
                  Eastern time, on March 26, 1999, but may occur on any later
                  date before October 31, 1999. V.A. World Bond Fund will
                  transfer all of its assets to V.A. Strategic Income Fund. V.A.
                  Strategic Income Fund will assume V.A. World Bond Fund's
                  liabilities. The net asset value of both funds will be
                  computed as of 5:00 p.m., Eastern time, on the reorganization
                  date.

          o       V.A. Strategic Income Fund will issue to V.A. World Bond
                  Fund shares in an amount equal to the aggregate net asset
                  value of V.A. World Bond Fund's shares. These shares will be
                  distributed immediately to V.A. World Bond Fund's shareholders
                  in proportion to their holdings on the reorganization date. As
                  a result, shareholders of V.A. World Bond Fund will end up as
                  shareholders of V.A. Strategic Income Fund.

          o       After the reorganization is over, V.A. World Bond Fund will 
                  be terminated.

          o       The reorganization  will be tax-free and will not take place
                  unless both funds receive a  satisfactory  opinion  concerning
                  the tax consequences of the reorganization  from Hale and Dorr
                  LLP, counsel to the funds.

The following diagram shows how the reorganization would be carried out.



V. A. World Bond           V. A. World Bond Fund           V.A. Strategic Income
Fund transfers assets      assets and liabilities          Fund receives assets
& liabilities to V.A.   --------------->---------------    & assumes liabilities
Strategic Income                                           of V.A. World Bond
Fund                                                       Fund



Shareholders            ---------------<---------------    Issues Shares

                 V.A. World Bond Fund receives V.A. Strategic Income Fund shares
                 and distributes them to its shareholders.



Other Consequences of the  Reorganization.  Each fund pays monthly advisory fees
equal to the following annual  percentage of its average daily net assets:  V.A.
World Bond Fund--0.75% and V.A.  Strategic Income  Fund--0.60%.  V.A.  Strategic
Income Fund's management fee rate of 0.60% and its pro forma management fee rate
of 0.60% are lower than V.A.  World Bond  Fund's  management  fee rate of 0.75%.
V.A.  World Bond  Fund's  gross  total  annual  operating  expenses of 2.31% are
substantially  higher that those of V.A.  Strategic Income Fund which are 1.13%.
Even  after the  reduction  of each  fund's  other  expenses  as a result of the
adviser's  voluntary  agreement to limit the funds' other  expenses,  V.A. World
Bond Fund's total  annual  operating  expenses  (1.00%) are higher than those of
V.A.  Strategic Income Fund (0.85%).  After the  reorganization,  V.A. Strategic
Income Fund's pro forma total annual  operating  expenses  (0.85%) are less than
those of V.A. World Bond Fund's gross total annual  operating  expenses  (2.31%)
and net total annual operating expenses (1.00%).


<PAGE>

<TABLE>
<CAPTION>


                                INVESTMENT RISKS

The funds are  exposed to various  risks that could cause  shareholders  to lose
money on their  investments  in the funds.  The  following  table shows that the
risks  affecting  each fund are similar and  compares the risks  affecting  each
fund.
             <S>                                    <C>                                     <C> 
- ------------------------------- ---------------------------------------------- -------------------------------------
                                V.A. World Bond Fund                            V.A. Strategic Income Fund
- ------------------------------- ------------------------------------------------------------------------------------
Risks of debt securities        The  value  of the  funds'   portfolios  will change in response to movements
                                of the  bond  market.  As  with  any  fund  that invests primarily in debt
                                securities,  a rise in  interest  rates  typically  causes  the value of
                                debt  securities and hence the value of the fund to  fall.  A fall in 
                                interest  rates  typically  causes  the  value of debt  securities  to rise.
                                Debt  securities  held  by the  funds  are  also subject  to  the  risk 
                                that  the  issuer  of  a  security will have its credit rating downgraded,
                                will default or will  otherwise fail to meet its obligations.
- ------------------------------- ------------------------------------------------------------------------------------
Risks of lower-rated  below     The value of below investment grade debt securities, also called junk bonds, 
investment grade debt           fluctuates more than higher rated  debt  securities and there is a greater 
securities                      risk of loss of principal and income. Lower ratings reflect a greater 
                                possibility of an adverse change in the financial condition of the issuer.
                                The market price and liquidity of below investment grade securities generally 
                                respond more to short-term developments affecting the issuer of below 
                                investment grade debt securities than of higher rated securities because
                                these developments are perceived to have a closer relationship to the ability
                                of an issuer to meet its obligations.
                                ---------------------------------------------- -------------------------------------
                                V.A. World Bond Fund may invest up to 35% of   V.A. Strategic Income Fund may
                                its assets in these securities, has invested   invest without limit in these
                                in these securities in the past, and has       securities.   To the extent that
                                been subject to these risks.                   the fund invests in these
                                                                               securities, it is exposed to these
                                                                               risks.
- ------------------------------- ------------------------------------------------------------------------------------
Risks of equity securities      The market value of equity securities  may  move  up  and  down,  sometimes
                                rapidly and  unpredictably.  These  fluctuations may cause  the  stock to be
                                worth  less than the price  originally  paid for it,  or less than it was
                                worth at an earlier time.
                                ---------------------------------------------- -------------------------------------
                                V.A. World Bond Fund does not invest              V.A. Strategic Income Fund may
                                directly in equity securities.  However, the      invest up to 10% of its assets in
                                fund may acquire equity securities as a           equity securities. To the extent
                                result of investing in convertible                that the fund invests in these
                                securities, preferred stock and other debt        securities, it is exposed to these
                                instruments with rights to acquire equity         risks.
                                securities attached.  If the fund acquired
                                equity securities, it would be exposed to
                                these risks.
- ------------------------------- ---------------------------------------------- -------------------------------------
Diversification risks           The fund is  non-diversified,  which means        The  fund is  diversified  and  not
                                that it can invest  more of its  assets           subject  to the risk  of      
                                in a single  issuer  than  a fund  that  is       non-diversification.
                                diversified. To the extent the fund invests more 
                                of its  assets in a single  issuer,  the  fund's 
                                share price may be adversely  affected by events 
                                affecting that issuer.                       
- ------------------------------- ---------------------------------------------- -------------------------------------



<PAGE>




- ------------------------------- ---------------------------------------------- -------------------------------------
                                V.A. World Bond Fund                           V.A. Strategic Income Fund
- ------------------------------- ------------------------------------------------------------------------------------
Foreign securities and          Each fund's investments in foreign securities are subject to the risks of adverse 
currency risks                  foreign  government  actions,  political instability or a lack of adequate and
                                accurate information.  Also,  currency exchange rate  movements  could  reduce
                                gains or  create losses. The risks of international investing are higher  in 
                                emerging  markets  such as  those of Latin America and Southeast Asia.
- ------------------------------- ------------------------------------------------------------------------------------
Risks of restricted and         Each fund's investments in restricted and illiquid securities may be difficult or
illiquid securities             impossible to sell at a desirable time or a fair price.  Restricted and illiquid
                                securities also present a greater risk of inaccurate valuation.
- ------------------------------- ------------------------------------------------------------------------------------
Risks of unleveraged            Unleveraged derivative instruments involve the risk that a rise in  interest rates 
derivative  instruments         will  cause  the value of the instrument to fall. A fall in interest  rates will
including asset-backed and      typically cause the value of these  instruments to rise.  These  instruments are
mortgage-backed securities      also subject to the risk that the issuer will default or otherwise fail to meet
                                its  obligations.  In addition,  mortgage-backed securities are subject to the 
                                risk that the life of the  security  will be  extended  beyond  its expected 
                                repayment time. This typically  occurs during  periods  of  rising  interest 
                                rates and often  reduces  the  security's  value.   During periods of falling 
                                interest rates, unanticipated prepayments  may occur  which also  reduces  the
                                security's value.
- ------------------------------- ------------------------------------------------------------------------------------
Risks of derivative             Many  derivative  instruments  involve  leverage,   which  increases  market risks. 
instruments,  including         Leverage  magnifies gains and losses on  derivatives  relative to changes in the 
financial  futures,             value of underlying assets. If a derivative is used for hedging purposes, changes 
options on  futures,            in the value of the  derivative  may not match those of the hedged asset.  Over the 
securities  and  index          options,  counter  derivatives  may be illiquid or hard to value  accurately.  
the swaps,  caps,  floors,      In addition, other party may default on its  obligations.  If markets for  
collars and structured          underlying assets do  not move in the right  direction,  a fund's performance may         
securities                      be worse than if it had not used derivatives.        
- ------------------------------- ------------------------------------------------------------------------------------
</TABLE>

                        PROPOSAL TO APPROVE THE AGREEMENT
                           AND PLAN OF REORGANIZATION

                          Description of Reorganization

Shareholders are being asked to approve an Agreement and Plan of Reorganization,
a copy of  which  is  attached  as  Exhibit  A.  The  Agreement  provides  for a
reorganization on the following terms:

       o          The reorganization is scheduled to occur at 5:00 p.m.,
                  Eastern time, on March 26, 1999, but may occur on any later
                  date before October 31, 1999. V.A. World Bond Fund will
                  transfer all of its assets to V.A. Strategic Income Fund and
                  V.A. Strategic Income Fund will assume all of V.A. World Bond
                  Fund's liabilities. This will result in the addition of V.A.
                  World Bond Fund's assets to V.A. Strategic Income Fund's
                  portfolio. The net asset value of both funds will be computed
                  as of 5:00 p.m., Eastern time, on the reorganization date.

        o         V.A. Strategic Income Fund will issue to V.A. World Bond
                  Fund shares in an amount equal to the aggregate net asset
                  value of V.A. World Bond Fund's shares. As part of the
                  liquidation of V.A. World Bond Fund, these shares will be
                  distributed immediately to shareholders of record of V.A.
                  World Bond Fund in proportion to their holdings on the
                  reorganization date. As a result, shareholders of V.A. World
                  Bond Fund will end up as shareholders of V.A. Strategic Income
                  Fund.


<PAGE>



        o         After the reorganization is over, the existence of V.A. World
                  Bond Fund will be terminated.

Reasons for the Proposed Reorganization

The Board of  Trustees  of V.A.  World  Bond  Fund  believes  that the  proposed
reorganization  will be advantageous to the shareholders of V.A. World Bond Fund
for several  reasons.  The Board of Trustees  considered the following  matters,
among others, in approving the proposal.

First,   shareholders   may  be   better   served  by  a  fund   offering   more
diversification.  V.A.  Strategic  Income Fund has a larger asset size than V.A.
World  Bond  Fund and may  invest  in a broader  range of  securities  including
domestic  high yield  bonds and  government  bonds as well as foreign  bonds and
government bonds. Combining the funds' assets into a single investment portfolio
may broaden diversification, making investors less vulnerable to weakness in any
single sector of the bond market.

Second,  V.A. Strategic Income Fund shares have performed better than V.A. World
Bond Fund over the past year and since inception on August 29, 1996.  While past
performance  cannot  predict  future  results,  the  Trustees  believe that V.A.
Strategic Income Fund is better positioned than V.A. World Bond Fund to continue
to generate  strong  returns  because of its greater  flexibility to choose from
among a broader range of investment opportunities.

Third,  a  combined  fund may offer  economies  of scale that can lead to better
control  over  expenses  than is possible for V.A.  World Bond Fund alone.  Both
funds incur substantial costs for accounting,  legal,  transfer agency services,
insurance, and custodial and administrative services.

Fourth, investor interest in multi-sector income funds has been larger than that
of funds focused on foreign bonds.  Diminished investor demand could hinder V.A.
World Bond  Fund's  prospects  for asset  growth and  expense  reduction  in the
future. Conversely,  existing and anticipated demand for multi-sector bond funds
should  increase the potential  for asset growth and expense  reduction for V.A.
Strategic Income Fund.

The Trustees  believe that V.A.  Strategic  Income Fund  shareholders  will also
benefit from improved diversification as a result of the reorganization. Because
V.A.  Strategic  Income  Fund is a larger  fund than V.A.  World Bond Fund,  the
Trustees feel that the addition of V.A.  World Bond Fund's assets may add to the
diversification  of  V.A.  Strategic  Income  Fund's  overall  portfolio.   This
opportunity  provides an economic benefit to V.A.  Strategic Income Fund and its
shareholders.

The Boards of Trustees of both funds also  considered that the adviser will also
benefit from the  reorganization.  For example,  the adviser  might realize time
savings from a  consolidated  portfolio  management  effort and from the need to
prepare fewer reports and  regulatory  filings as well as prospectus  disclosure
for one fund instead of two. The Trustees believe,  however,  that these savings
will not amount to a significant economic benefit to the adviser.

Comparative Fees and Expense Ratios. As discussed above in the Summary, the
advisory fee rate paid by V.A. World Bond Fund is higher than the rate paid by
V.A. Strategic Income Fund. V.A. Strategic Income Fund's management fee rate of
0.60% and its pro forma management fee rate of 0.60% are lower than V.A. World
Bond Fund's management fee rate of 0.75%.

World  Bond  Fund's  gross  total  annual   operating   expenses  of  2.31%  are
substantially  higher that those of Strategic Income Fund which are 1.13%.  Even
after the  reduction of each fund's other  expenses as a result of the adviser's
voluntary agreement to limit the funds' other expenses,  World Bond Fund's total
annual operating expenses (1.00%) are higher than those of Strategic Income Fund
(0.85%).  After the  reorganization,  Strategic  Income  Fund's pro forma  total
annual operating expenses (0.85%) are less than those of World Bond Fund's gross
total annual operating  expenses (2.31%) and net total annual operating expenses
(1.00%).


                                       13
<PAGE>


V.A.  World Bond Fund has not  increased  its asset  size.  The  Trustees do not
believe,  given V.A. World Bond Fund's current size and historical  growth rate,
that V.A. World Bond Fund will grow to an asset size that would allow V.A. World
Bond Fund to realize  the  benefits  of  economies  of scale,  including  better
control over  expenses.  The Trustees  also do not believe that V.A.  World Bond
Fund  will  reach an asset  size  which  will  allow  V.A.  World  Bond  Fund to
significantly broaden the diversification of its investment portfolio.

Comparative Performance. The trustees also took into consideration the relative
performance of V.A. World Bond Fund and V.A. Strategic Income Fund.

<TABLE>
<CAPTION>

                          <S>                                    <C>                             <C>  
          ---------------------------------------- ----------------------------- ---------------------------------
          Average Annual Total Return                  V.A. World Bond Fund          V.A. Strategic Income Fund
          ---------------------------------------- ----------------------------- ---------------------------------
          1 year ended 6/30/98                                3.35%                           10.50%
          ---------------------------------------- ----------------------------- ---------------------------------
          Since inception on 8/29/96                          3.90%                           12.65%
          ---------------------------------------- ----------------------------- ---------------------------------

V.A. World Bond Fund's performance has lagged behind the performance of V.A. Strategic Income Fund for the periods shown
above.
</TABLE>

Tax Status of the Reorganization

The reorganization will be tax-free for federal income tax purposes and will not
take place unless both funds receive a  satisfactory  opinion from Hale and Dorr
LLP, counsel to the funds, substantially to the effect that:

            o     The  reorganization described above will be a "reorganization"
                  within the meaning of Section  368(a) of the Internal Revenue 
                  Code of 1986 (the "Code"), and each fund will  be "a party to
                  a reorganization" within the meaning of Section 368 of the
                  Code;

            o     No gain or loss will be recognized by V.A. World Bond Fund
                  upon (1) the transfer of all of its assets to V.A. Strategic
                  Income Fund as described above or (2) the distribution by V.A.
                  World Bond Fund of V.A. Strategic Income Fund shares to V.A.
                  World Bond Fund's shareholders;

            o     No gain or loss will be recognized by V.A. Strategic Income
                  Fund upon the receipt of V.A. World Bond Fund's assets solely
                  in exchange for the issuance of V.A. Strategic Income Fund
                  shares and the assumption of all of V.A. World Bond Fund's
                  liabilities by V.A. Strategic Income Fund;

            o     The basis of the assets of V.A. World Bond Fund acquired by
                  V.A. Strategic Income Fund will be the same as the basis of
                  those assets in the hands of V.A. World Bond Fund immediately
                  before the transfer;

            o     The tax holding period of the assets of V.A. World Bond Fund 
                  in the hands of V.A. Strategic Income Fund will include V.A.
                  World Bond Fund's tax holding period for those assets;

            o     The shareholders of V.A. World Bond Fund will not recognize
                  gain or loss upon the exchange of  all their shares of V.A.
                  World Bond Fund solely for V.A. Strategic Income Fund shares 
                  as part of the reorganization;


                                       14

<PAGE>


            o     The basis of V.A. Strategic Income Fund shares received by
                  V.A. World Bond Fund's shareholders in the reorganization will
                  be the same as the basis of the shares of V.A. World Bond Fund
                  surrendered in exchange; and

            o     The tax  holding  period of the V.A.  Strategic  Income Fund
                  shares that V.A.  World Bond Fund  shareholders  receive  will
                  include  the tax  holding  period of the shares of V.A.  World
                  Bond  Fund  surrendered  in the  exchange,  provided  that the
                  shares of V.A.  World Bond Fund were held as capital assets on
                  the reorganization date.

Additional Terms of Agreement and Plan of Reorganization

Conditions to Closing the Reorganization. The obligation of V.A. World Bond Fund
to  consummate  the  reorganization  is subject to the  satisfaction  of certain
conditions,  including the performance by V.A.  Strategic Income Fund of all its
obligations  under the  Agreement  and the receipt of all  consents,  orders and
permits necessary to consummate the reorganization (see Agreement, paragraph 6).

The obligation of V.A. Strategic Income Fund to consummate the reorganization is
subject to the  satisfaction  of certain  conditions,  including V.A. World Bond
Fund's performance of all of its obligations under the Agreement, the receipt of
certain  documents and financial  statements  from V.A.  World Bond Fund and the
receipt  of all  consents,  orders  and  permits  necessary  to  consummate  the
reorganization (see Agreement, paragraph 7).

The  obligations  of both funds are subject to approval of the  Agreement by the
necessary vote of the outstanding  shares of V.A. World Bond Fund, in accordance
with the provisions of V.A. World Bond Fund's  declaration of trust and by-laws.
The funds' obligations are also subject to the receipt of a favorable opinion of
Hale  and  Dorr  LLP  as  to  the  federal  income  tax   consequences   of  the
reorganization (see Agreement, paragraph 8).

Termination  of Agreement.  The Board of Trustees of either V.A. World Bond Fund
or  V.A.  Strategic  Income  Fund  may  terminate  the  Agreement  (even  if the
shareholders  of V.A.  World  Bond Fund have  already  approved  it) at any time
before the reorganization  date, if that board believes that proceeding with the
reorganization would no longer be advisable.

Expenses of the  Reorganization.  The funds' adviser will be responsible for the
expenses  incurred  in  connection  with  entering  into  and  carrying  out the
provisions of the Agreement,  whether or not the  reorganization  occurs.  These
expenses are estimated to be approximately $45,400 in total.

                                 CAPITALIZATION

The following  table sets forth the  capitalization  of each fund as of June 30,
1998,  and  the pro  forma  combined  capitalization  of  both  funds  as if the
reorganization  had occurred on that date. The table reflects pro forma exchange
ratios of  approximately  0.9176 V.A.  Strategic Income Fund shares being issued
for each share of V.A. World Bond Fund. If the  reorganization  is  consummated,
the actual exchange ratios on the reorganization date may vary from the exchange
ratios  indicated.  This is due to changes in the market value of the  portfolio
securities  of both funds  between  June 30, 1998 and the  reorganization  date,
changes in the amount of  undistributed  net investment  income and net realized
capital  gains of both  funds  during  that  period  resulting  from  income and
distributions,  and changes in the accrued  liabilities of both funds during the
same period.


<PAGE>




                                  June 30, 1998

                                  V.A.          V.A. Strategic
                               World Bond           Income           Pro Forma
                               ----------           ------           ---------

Net Assets                     $2,457,606        $10,844,333        $13,301,939
Net Asset Value Per  Share          $9.64             $10.51             $10.51
Shares Outstanding                254,904          1,032,151          1,266,051


It is impossible to predict how many shares of V.A.  Strategic  Income Fund will
actually  be  received  and   distributed   by  V.A.  World  Bond  Fund  on  the
reorganization date. The table should not be relied upon to determine the amount
of V.A.
Strategic Income Fund shares that will actually be received and distributed.

               ADDITIONAL INFORMATION ABOUT THE FUNDS' BUSINESSES

The  following  table  shows  where  in each  fund's  prospectus  you  can  find
additional information about the business of each fund.

<TABLE>
<CAPTION>

               <S>                                                       <C> 
- ------------------------------------------- -----------------------------------------------------------------------
Type of Information                         Headings in Combined Prospectus for V.A. World Bond Fund and V.A.
                                            Strategic Income Fund
- ------------------------------------------- -----------------------------------------------------------------------
Organization and operation                  Organization and Management of the Fund
- ------------------------------------------- -----------------------------------------------------------------------
Investment objective and policies           Investment Policies and Strategies
- ------------------------------------------- -----------------------------------------------------------------------
Portfolio Management                        Organization and Management of the Fund
- ------------------------------------------- -----------------------------------------------------------------------
Investment adviser and distributor          Organization and Management of the Fund
- ------------------------------------------- -----------------------------------------------------------------------
Expenses                                    The Fund's Expenses
- ------------------------------------------- -----------------------------------------------------------------------
Custodian and transfer agent                Organization and Management of the Fund
- ------------------------------------------- -----------------------------------------------------------------------
Dividends, distributions and taxes          Dividends and Taxes
- ------------------------------------------- -----------------------------------------------------------------------
</TABLE>


                      BOARDS' EVALUATION AND RECOMMENDATION

For the reasons  described above, the Board of Trustees of V.A. World Bond Fund,
including  the Trustees who are not  "interested  persons" of either fund or the
adviser ("independent  trustees"),  approved the reorganization.  In particular,
the Trustees  determined  that the  reorganization  was in the best interests of
V.A.  World  Bond  Fund  and  that  the  interests  of V.A.  World  Bond  Fund's
shareholders would not be diluted as a result of the reorganization.  Similarly,
the Board of Trustees of V.A.  Strategic Income Fund,  including the independent
trustees,   approved  the   reorganization.   They  also   determined  that  the
reorganization  was in the best interests of V.A. Strategic Income Fund and that
the interests of V.A. Strategic Income Fund's  shareholders would not be diluted
as a result of the reorganization.


- --------------------------------------------------------------------------------
             The trustees of V.A. World Bond Fund recommend that the
                      shareholders vote for the proposal to
                approve the agreement and plan of reorganization.
- --------------------------------------------------------------------------------



<PAGE>




                         VOTING RIGHTS AND REQUIRED VOTE

Each share of V.A.  World Bond Fund is  entitled  to one vote.  Approval  of the
above proposal requires the affirmative vote of a majority of the shares of V.A.
World Bond Fund  outstanding and entitled to vote. For this purpose,  a majority
of the  outstanding  shares of V.A. World Bond Fund means the vote of the lesser
of

(1)      67% or more of the shares present at the meeting, if the holders of
         more than 50% of the shares of the fund are present or represented by 
         proxy, or

(2)      more than 50% of the outstanding shares of the fund.

Shares of V.A.  World  Bond Fund  represented  in person or by proxy,  including
shares that abstain or do not vote with respect to the proposal, will be counted
for  purposes  of  determining  whether  there  is  a  quorum  at  the  meeting.
Accordingly, an abstention from voting has the same effect as a vote against the
proposal.

If the required  approval of shareholders is not obtained,  V.A. World Bond Fund
will  continue to engage in business as a separate  mutual fund and the Board of
Trustees will consider what further action may be appropriate.

                       INFORMATION CONCERNING THE MEETING

Voting at the Meeting

Contract  owners  use the  voting  instruction  card  as a  ballot  to give  the
insurance  company  voting  instructions  for those shares  attributable  to the
variable  contract as of the record date.  When the contract owner completes the
voting  instruction  card and sends it to the insurance  company,  the insurance
company votes its proxy in accordance with the contract owner's instructions. If
the contract owner completes and signs the voting  instruction  card, the shares
attributable  to the  variable  contract  will be  voted as  instructed.  If the
contract  owner merely signs and returns the card,  the life  insurance  company
will vote those shares in favor of the proposal.  If the contract owner does not
return the card, the life  insurance  company will vote those shares in the same
proportion as shares for which  instructions  were received from other  contract
owners.

Shares of V.A. World Bond Fund which are not attributable to variable  contracts
will be  represented  and voted by one of the  insurance  companies  in the same
proportion  as the voting  instructions  received from  contract  owners.  These
shares include shares purchased with  contributions  made as seed capital to the
fund by the adviser.

Solicitation of Proxies

In addition to the mailing of these proxy materials, proxies may be solicited by
telephone,  by fax or in person by the trustees,  officers and employees of V.A.
World Bond Fund and by personnel of V.A. World Bond Fund's  investment  adviser,
John  Hancock  Advisers,  Inc. and its transfer  agent,  John Hancock  Servicing
Center. The Servicing Center, together with a third party solicitation firm, has
agreed to provide proxy solicitation  services to V.A. World Bond Fund at a cost
of approximately $1,000.


<PAGE>



Revoking Proxies

Each V.A.  World Bond Fund  shareholder  signing  and  returning a proxy has the
power to revoke it at any time before it is exercised:

        o         By filing a written notice of revocation with V.A. World
                  Bond Fund's transfer agent, John Hancock Servicing Center,
                  P.O. Box 9298, Boston, Massachusetts 02210, or

        o         By returning a duly executed proxy with a later date before
                  the time of the meeting, or

        o         If a shareholder  has executed a proxy but is present at the
                  meeting  and  wishes  to  vote in  person,  by  notifying  the
                  secretary of V.A. World Bond Fund (without  complying with any
                  formalities) at any time before it is voted.

Being  present at the meeting  alone does not revoke a  previously  executed and
returned proxy.

Contract  owners may revoke  their  voting  instructions  at any time before the
proxy is voted by the life insurance company by following the procedure outlined
above for revoking proxies.

Outstanding Shares and Quorum

   
As of January 22, 1999,  271,444.479 shares of beneficial interest of V.A. World
Bond Fund were outstanding. Only shareholders of record on January 22, 1999 (the
"record date") are entitled to notice of and to vote at the meeting.  A majority
of the outstanding shares of V.A. World Bond Fund that are entitled to vote will
be considered a quorum for the transaction of business.
    

Other Business

V.A.  World Bond Fund's  Board of Trustees  knows of no business to be presented
for  consideration at the meeting other than the proposal.  If other business is
properly brought before the meeting, proxies will be voted according to the best
judgment of the persons named as proxies.

Adjournments

If a quorum is not  present in person or by proxy at the time any session of the
meeting is called to order,  the persons named as proxies may vote those proxies
that have been  received to adjourn the meeting to a later date.  If a quorum is
present but there are not sufficient votes in favor of the proposal, the persons
named as proxies may propose one or more  adjournments  of the meeting to permit
further  solicitation of proxies  concerning the proposal.  Any adjournment will
require the  affirmative  vote of a majority of V.A. World Bond Fund's shares at
the session of the meeting to be adjourned.  If an adjournment of the meeting is
proposed  because there are not sufficient  votes in favor of the proposal,  the
persons named as proxies will vote those proxies  favoring the proposal in favor
of adjournment,  and will vote those proxies against the reorganization  against
adjournment.



<PAGE>

   

                        OWNERSHIP OF SHARES OF THE FUNDS

As of January 22, 1999,  the  following  companies  owned,  on behalf of certain
separate accounts, more than 5% of the funds' outstanding shares:

<TABLE>
<CAPTION>

             Name and Address                         Number of Shares                      Percentage of Fund
             ----------------                         ----------------                      ------------------

V.A. World Bond Fund
                  <S>                                        <C>                                     <C>                
- ------------------------------------------- -------------------------------------- --------------------------------------
    John Hancock Mutual Life Insurance                   21,514.996                                7.90%
            Company (JHMLICO)
           200 Clarendon Street
       Boston, Massachusetts 02117

- ------------------------------------------- -------------------------------------- --------------------------------------
   John Hancock Variable Life Insurance                  21,617.975                                8.00%
            Company (JHVLICO)
           197 Clarendon Street
       Boston, Massachusetts 02117

- ------------------------------------------- -------------------------------------- --------------------------------------
    John Hancock Advisers, Inc. (JHA)                    228,311.508                              84.10%
          101 Huntington Avenue
       Boston, Massachusetts 02199

- ------------------------------------------- -------------------------------------- --------------------------------------

V.A. Strategic Income Fund

- ------------------------------------------- -------------------------------------- --------------------------------------
    John Hancock Mutual Life Insurance                   532,202.394                              34.70%
            Company (JHMLICO)
           200 Clarendon Street
       Boston, Massachusetts 02117

- ------------------------------------------- -------------------------------------- --------------------------------------
   John Hancock Variable Life Insurance                  775,373.422                              49.30%
            Company (JHVLICO)
           197 Clarendon Street
       Boston, Massachusetts 02117

- ------------------------------------------- -------------------------------------- --------------------------------------
    John Hancock Advisers, Inc. (JHA)                    245,698.693                              16.00%
          101 Huntington Avenue
       Boston, Massachusetts 02199

- ------------------------------------------- -------------------------------------- --------------------------------------
</TABLE>

However,  these companies,  on behalf of the separate accounts,  will vote their
V.A. World Bond Fund shares only in accordance with voting instructions received
from the contract or certificate  owners.  For this reason, the companies do not
exercise  control  over the funds by virtue of their  record  ownership  of fund
shares.
    

                                     EXPERTS

The  financial  statements  and the  financial  highlights  of  each  fund as of
December  31, 1997 and for the periods  then ended and the  unaudited  financial
statements  and  financial  highlights  of each  fund as of June  30,  1998  are
incorporated  by  reference  into  this  proxy  statement  and  prospectus.  The
financial  statements and financial highlights as of December 31, 1997 have been
independently  audited by Ernst & Young LLP as stated in their reports appearing
in the statement of  additional  information.  These  financial  statements  and
financial  highlights  have been  included in reliance on their  report given on
their authority as experts in accounting and auditing.


<PAGE>



                              AVAILABLE INFORMATION

Each  fund  is  subject  to the  informational  requirements  of the  Securities
Exchange Act of 1934 and the  Investment  Company Act of 1940 and files reports,
proxy  statements  and other  information  with the SEC.  These  reports,  proxy
statements and other  information filed by the funds can be inspected and copied
(at prescribed rates) at the public reference facilities of the SEC at 450 Fifth
Street, N.W., Washington,  D.C., and at the following regional offices:  Chicago
(500 West Madison Street, Suite 1400, Chicago,  Illinois); and New York (7 World
Trade Center,  Suite 1300, New York, New York). Copies of this material can also
be  obtained by mail from the Public  Reference  Section of the SEC at 450 Fifth
Street, N.W., Washington,  D.C. 20549, at prescribed rates. In addition,  copies
of these documents may be viewed on-screen or downloaded from the SEC's Internet
site at (http://www.sec.gov).


<PAGE>

[LOGO] JOHN HANCOCK FUNDS
         A Global Investment Management Firm

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

                              VOTE THIS CARD TODAY!
                      A PROMPT RESPONSE WILL SAVE THE FUND
                       THE EXPENSE OF ADDITIONAL MAILINGS

                        John Hancock V.A. World Bond Fund
                  Special Meeting of Shareholders to Be Held on
                                 March 18, 1999

Indicate  your voting  instructions  below by filling in the  appropriate  boxes
using blue or black ink or dark pencil.

This voting instruction card, if properly executed,  will be voted in the manner
directed by the contract  owner.  If this voting  instruction is executed and no
direction is made, this voting  instruction  will be voted for all proposals and
in the  discretion  of the  insurance  company  upon such other  business as may
properly come before the meeting.

Proposal 1. To approve an Agreement and Plan of Reorganization between John
Hancock V.A. World Bond Fund and John Hancock V.A. Strategic Income Fund ("V.A.
Strategic Income Fund"). Under this Agreement, V.A. World Bond Fund would
transfer all of its assets to V.A. Strategic Income Fund in exchange for shares
of V.A. Strategic Income Fund. These shares would be distributed proportionately
to the shareholders of V.A. World Bond Fund. V.A. Strategic Income Fund would
also assume V.A. World Bond Fund's liabilities.

                         FOR [ ] AGAINST [ ] ABSTAIN [ ]

           PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD.



<PAGE>



[LOGO] JOHN HANCOCK FUNDS
         A Global Investment Management Firm

JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY
JOHN HANCOCK MUTUAL LIFE INSURANCE COMPANY

                              VOTE THIS CARD TODAY!
                      A PROMPT RESPONSE WILL SAVE THE FUND
                       THE EXPENSE OF ADDITIONAL MAILINGS

JOHN HANCOCK V.A. WORLD BOND FUND
A series of John Hancock Declaration Trust

         These voting instructions will be used by the insurance companies in
connection with a solicitation of proxies by the trustees of the Fund.

         The undersigned,  revoking previous instructions,  hereby instructs the
above-referenced  insurance  companies  to vote  all the  shares  of  beneficial
interest  of John  Hancock  V.A.  World  Bond  Fund  ("V.A.  World  Bond  Fund")
attributable  to the  undersigned's  variable  annuity  contract  at the Special
Meeting of  Shareholders  (the  "Meeting") of V.A. World Bond Fund to be held at
101 Huntington Avenue,  Boston,  Massachusetts,  on Thursday,  March 18, 1999 at
9:00 a.m.,  Eastern time, and at any  adjournment(s) of the Meeting.  Receipt of
the Proxy  Statement  dated  February  12, 1999 is hereby  acknowledged.  If not
revoked, this card shall be voted for the proposal.

         Thomas J. Lee and Michele G. Van Leer, and each of them,  with power of
substitution in each, are hereby  instructed to vote the shares held in the fund
portfolio attributable to the undersigned at the special meeting of shareholders
and at any adjornment thereof, as specified on the reverse side.

                                                    PLEASE SIGN, DATE AND RETURN
                                                   PROMPTLY IN ENCLOSED ENVELOPE

                                    Date        , 1999 NOTE: Signature(s) should
                                    agree with the name(s) printed herein. When
                                    signing as attorney, executor,
                                    administrator, trustee or guardian, please
                                    give your full name as such. If a
                                    corporation, please sign in full corporate
                                    name by president or other authorized
                                    officer. If a partnership, please sign in
                                    partnership name by authorized person.
                                    --------------------------------------------

                                    --------------------------------------------
                                    Signature(s)







S:/corpsec/proxy/v.a.votcard



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