As Filed with the Securities and Exchange Commission on June 28, 2000.
Registration No. 33- Investment Company Act File No. 811-10005
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-2
(Check appropriate box or boxes)
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. __
Post-Effective Amendment No. __
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. __
JOHN HANCOCK VENTURE TECHNOLOGY FUND
(Exact name of registrant as specified in charter)
101 Huntington Avenue, Boston, Massachusetts 02199
(Address of Principal Executive Offices) (Number, Street, City State Zip Code)
(617) 375-1500
(Registrant's Telephone Number, including Area Code)
Susan S. Newton, Esq.
Vice President and Secretary
John Hancock Venture Technology Fund
101 Huntington Avenue, Boston, Massachusetts 02199
(Name and Address of Agent for Service)
Copies to:
Pamela J. Wilson, Esq.
Hale and Dorr LLP
60 State Street
Boston, MA 02109
Approximate date of Proposed Public Offering:
As soon as practicable after the effective date of this Registration Statement.
If any securities being registered on this Form will be offered on a delayed or
continuous basis in reliance on Rule 415 under the Securities Act of 1933, other
than securities offered in connection with a dividend reinvestment plan, check
the following box: /X/
It is proposed that this filing will become effective when declared effective
pursuant to Section 8(c).
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
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Title of Proposed Maximum Aggregate Amount of
Securities Being Registered Offering Price Registration Fee
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Common Shares of Beneficial Interest, without par value $100,000,000 $26,400.00
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The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933, or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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DRAFT 6/14/00
The information in this prospectus is not complete and may be changed. The
fund's shares may not be sold until the registration statement filed with the
Securities And Exchange Commission is effective. This prospectus is not an offer
to sell, and is not soliciting an offer to buy, the fund's shares in any state
where the offer or sale is not permitted.
Subject To Completion, Dated _________, 2000
Up to a Maximum of __________ Shares of Beneficial Interest
JOHN HANCOCK VENTURE TECHNOLOGY FUND
101 Huntington Avenue, Boston, Massachusetts 02199
John Hancock Venture Technology Fund is a newly organized,
non-diversified, closed-end management investment company. The fund's investment
objective is long-term growth of capital. The fund invests primarily in equity
securities of U.S. and foreign companies that rely extensively on technology in
their product development or operations.
The fund seeks to identify and invest in companies that will provide
tomorrow's technology. These companies may operate in any of the following or
similar fields: telecommunications, electronics, data management and storage,
computer software, computer services, computer hardware, semiconductors,
communications, the Internet, biotechnology, biomedics and pharmaceuticals. The
fund may invest in companies of any size.
The fund may invest up to 35% of its total assets in equity securities
of privately owned companies (referred to as "venture capital" companies),
non-rated private debt securities that are not publicly offered or traded and
other mezzanine financing opportunities. There will be no public market for the
shares of a venture capital company at the time of the fund's investment, and
there can be no assurance that a public offering of shares will ever be planned
or completed. The fund may also invest in securities of private investment funds
that invest primarily in venture capital companies, as well as private
securities of public companies.
Investments in technology companies, and in particular venture capital
companies, are speculative and pose special risks. These risks are more fully
explained below under the heading "Risk Factors."
John Hancock Advisers, Inc. (the "adviser") is the fund's investment
adviser. American Fund Advisors, Inc. is the fund's subadviser.
Basic Terms of the Offering
---------------------------
Purchase price: $24.25 per share.
Sales charge: Up to $0.75 per share.
Minimum investment: $10,000
Expiration date: 5:00 p.m., New York City time on ___________, 2000.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS APPROVED OR DISAPPROVED THE FUND'S SHARES OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY STATEMENT TO THE CONTRARY IS A CRIME.
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Subscription Price Sales Load1 Proceeds to fund2
----------------------------- ------------------------------- ---------------------- -------------------------------
Per Share $25.00 $0.75 $24.25
----------------------------- ------------------------------- ---------------------- -------------------------------
Total $_________ $__________ $_________
----------------------------- ------------------------------- ---------------------- -------------------------------
(footnotes on following page)
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(Footnotes from previous page)
(1) PaineWebber Incorporated and other broker-dealers may receive from
the adviser or the distributor additional sales commissions, as
described below. The adviser has also agreed to pay PaineWebber
Incorporated a fee for advice in connection with the structuring of the
initial offering.
(2) Funds received by check prior to the final due date of this offer will be
deposited into a segregated interest bearing account (which interest will
be paid to the fund regardless of whether shares are issued or not by the
fund) pending proration and distribution of shares.
No market exists for the fund's shares. The fund's shares will not be
listed on any securities exchange, and the fund does not expect a secondary
market to develop for its shares. You may not be able to sell your shares.
Because the fund is a closed-end investment company, shares of the fund may not
be redeemed on a daily basis, and they may not be exchanged for shares of any
other fund. The shares are appropriate only as a long-term investment.
To provide a limited degree of liquidity to shareholders, the fund will
make quarterly offers to repurchase 5% of its outstanding shares at their net
asset value. The number of shares tendered for repurchase may exceed the number
that the fund offers to repurchase. If that happens, the fund will repurchase
shares on a pro-rata basis, and tendering shareholders will not have all of
their tendered shares repurchased by the fund. The fund intends to complete its
first quarterly repurchase offer in _______ 2000. See "Repurchase Offers."
The fund intends to raise $____ million of net proceeds in its initial
offering. The minimum investment in this offering is $10,000. Selected brokers
and dealers are offering the fund's shares initially at a price of $24.25 per
share, plus a sales charge of up to $0.75 per share, for a maximum offering
price of $25.00 per share. The sales charge is payable to the selected broker or
dealer who arranges for a sale. Reductions in the sales charge are available for
large purchases and in certain other circumstances. See "How to Purchase Fund
Shares."
John Hancock Funds, Inc. (the "distributor"), the fund's principal
underwriter and an affiliate of the investment manager, will pay to the selected
brokers and dealers from its own resources an additional sales commission equal
to an additional $0.25 per share. The fund will pay organizational and offering
expenses estimated at $_______ from the proceeds of the offering. The initial
offering will terminate on October __________, unless extended by the adviser.
If the fund raises less than $____ million in this offering, then, not
less than 30 days after the closing of the initial offering, the fund may
commence a continuous offering of its shares through selected brokers and
dealers at a price equal to their net asset value plus a maximum sales charge of
3%. The adviser and/or the distributor will pay to the selected brokers and
dealers from its own resources an additional sales commission equal to an
additional 1% for each share sold in any continuous offering. Any continuous
offering, if commenced, will be discontinued when the fund's net assets reach
$____ million, and may be discontinued at any time. The fund may commence other
continuous offerings from time to time in the future.
The fund will pay each selected broker or dealer that is not affiliated
with the fund or the adviser a shareholder servicing fee at an annual rate of
0.50% of the net asset value of the outstanding shares owned by customers of
that broker or dealer.
The fund may buy or sell exchange-traded or over-the-counter put or
call options on transferable securities to hedge against adverse movements in
the prices of securities held in the fund's portfolio. The fund will enter into
options transactions only with broker-dealers that are reputable financial
institutions and that specialize in these types of transactions, make markets in
these options, or are participants in over-the-counter markets.
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This prospectus concisely provides the information that a prospective
investor should know about the fund before investing. You are advised to read
this prospectus carefully and to retain it for future reference. Additional
information about the fund, including a statement of additional information
("SAI") dated _______, 2000, has been filed with the Securities and Exchange
Commission (the "SEC"). The SAI is available upon request and without charge by
writing the fund at the address above or by calling _________. The SAI is
incorporated by reference into this prospectus in its entirety. The table of
contents of the SAI appears on page __ of this prospectus. The SAI, and other
information about the fund, is also available on the SEC's website
(http://www.sec.gov).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK OR OTHER INSURED DEPOSITORY INSTITUTION, AND ARE NOT
FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY.
----------
The date of this prospectus is __________, 2000.
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TABLE OF CONTENTS
PROSPECTUS SUMMARY..........................................................1
SUMMARY OF FUND EXPENSES....................................................5
RISK FACTORS................................................................7
USE OF PROCEEDS............................................................12
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES..............................12
MANAGEMENT OF THE FUND.....................................................17
REPURCHASE OFFERS..........................................................19
CALCULATION OF NET ASSET VALUE.............................................22
SHARES OF BENEFICIAL INTEREST..............................................23
DISTRIBUTION POLICY........................................................24
TAXES......................................................................24
HOW TO PURCHASE FUND SHARES................................................25
GENERAL INFORMATION........................................................27
TABLE OF CONTENTS OF SAI...................................................28
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NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST
NOT RELY ON ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS IS
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES IT
DESCRIBES, BUT ONLY UNDER CIRCUMSTANCES AND IN JURISDICTIONS WHERE IT IS LAWFUL
TO DO SO. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CURRENT ONLY AS OF ITS
DATE.
-iv-
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PROSPECTUS SUMMARY
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The Fund John Hancock Venture Technology Fund (the "fund") is a newly
organized non-diversified, closed-end management investment
company registered under the Investment Company Act of 1940.
The fund's investment adviser is John Hancock Advisers, Inc.
(the "adviser"). See "General Information."
------------------------------------------- -----------------------------------------------------------------
Investment Objective and Principal The fund's investment objective is long-term growth of
Strategies capital. The fund invests primarily in equity securities of
U.S. and foreign companies that rely extensively on technology
in their product development or operations. The fund seeks
to identify and invest in companies that will provide tomorrow's
technology. These companies may operate in any of the following
or similar fields: telecommunications, electronics, data
management and storage, computer software, computer services,
computer hardware, semiconductors, communications, the
Internet, biotechnology, biomedics and pharmaceuticals.
The fund may invest in companies of any size. The fund may
invest up to 35% of its total assets in equity securities of
privately owned companies (referred to as "venture capital"
companies), non-rated private debt securities that are not
publicly offered or traded and other mezzanine financing
opportunities. There will be no public market for the shares
of a venture capital company at the time of the fund's
investment, and there is no guarantee that a public sale of
shares will ever be planned or completed. The fund may also
invest in securities of private investment funds that invest
primarily in venture capital companies, as well as private
securities of public companies. See "Investment Objective and
Principal Strategies."
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Investment Rationale Since the invention and initial commercialization of the
computer in the mid-twentieth century, the pace of
technological advancement has continued at a rate greater than
originally anticipated. Moore's Law, postulated more than 30
years ago by Gordon Moore - one of the co-founders of Intel -
called for advances in technology to double the price and
performance of technology every 18 months. This theory, which
has held up throughout the last part of the twentieth century,
is expected to continue well into the twenty-first century.
This suggests that various sectors of technology will grow in
relative importance to the general economy for at least the
foreseeable future.
The best illustration of Moore's Law is the history of
computing. Once computers became commercially viable in the
1960s, mainframe computers reigned as the dominant form of
computing technology for nearly two decades, a trend that
lasted well into the 1970s. Minicomputers surpassed mainframes
from the mid-1970s into the 1980s, only to be themselves
antiquated by the personal computer, which appeared in the
mid-1980s and continues to dominate computing technology into
the new millennium. Our investment team believes the tech
world is on the verge of the next generation of computer
technology, which we term "Net-centric computing."
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These historical shifts in computing technology have often
coincided with significant changes in industry leadership.
Some of the companies that have emerged as today's technology
leaders didn't even exist as recently as ten years ago
(industry leaders such as Microsoft, Cisco Systems, and EMC
are products of the 1980s). Now, with our belief that the pace
of technology will continue to accelerate, we believe that
many of tomorrow's leaders are just beginning to emerge.
The fund seeks to identify and invest in those leading
companies that will develop, market, and/or implement the next
generation of computing technology. Areas that the adviser and
sub-adviser believe offer the greatest growth potential
include:
>> Internet and new media
>> Broadband and fiber optics
>> Digital consumer electronics
>> Biometric software
>> Wireless communications and computing
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The Investment Adviser The fund's investment adviser is John Hancock Advisers, Inc.,
(the "adviser"). The adviser is responsible for the
supervision of the investment advisory services performed by
the subadviser, and the overall management of the fund.
See "Management of the Fund."
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The Investment Subadviser and Portfolio The fund's investment subadviser is American Fund Advisors,
Managers Inc. (the "subadviser"). The subadviser was founded in 1978.
Subject to the review of the fund's board of trustees and the
overall supervision of the adviser, the subadviser is responsible
for providing day-to-day investment management of the fund's
portfolio of securities.
The fund's portfolio managers are:
Barry J. Gordon, president of the subadviser. Mr. Gordon has
29 years of investment management experience, including 24
years of experience in technology investments.
Marc H. Klee, CFA, executive vice president of the subadviser.
Mr. Klee has 23 years of investment management experience, and
has followed technology-related companies throughout his entire
career.
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Alan J. Loewenstein, CFA, senior vice president of the
subadviser. Mr. Loewenstein as 22 years of investment
management experience, and has followed technology-related
companies throughout his entire career.
See "Management of the Fund."
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Management Fee The fund will pay a fee to the adviser for its management
services at an annual rate of 2.00% of the fund's average daily
net assets. This management fee is higher than the advisory
fees paid by most U.S. investment companies. See "Management
of the Fund."
------------------------------------------- -----------------------------------------------------------------
Borrowing The fund is authorized to borrow money in an amount up to 5% of
its total assets (giving effect to the amount borrowed) in
order to meet repurchase requests, for other cash management
purposes and to fund the purchase of portfolio securities for a
period of not longer than 30 days. The fund may not purchase
additional portfolio securities at any time that borrowings
exceed 5% of its total assets. The fund is not authorized to
use borrowings for long-term financial leverage purposes.
------------------------------------------- -----------------------------------------------------------------
Hedging The fund may use derivative instruments to hedge portfolio
risks and for cash management purposes. Hedging activity may
relate to a specific security or to the fund's portfolio as a
whole. The fund may not use derivative instruments for
speculative purposes. The fund may buy or sell exchange-traded
or over-the-counter put or call options on transferable
securities to hedge against adverse movements in the prices of
securities held in the fund's portfolio. The fund will enter
into options transactions only with broker-dealers that are
reputable financial institutions and that specialize in these
types of transactions, make markets in these options, or are
participants in over-the-counter markets.
------------------------------------------- -----------------------------------------------------------------
The Offering The initial offering will terminate on ________, 2000, unless
extended by the distributor. In the initial offering the fund
intends to raise $____ million of net proceeds. The fund is
initially offering its shares through a group of brokers and
dealers selected by the distributor.
The minimum investment is $10,000. The maximum purchase price
per share of $25.00 includes a sales charge of up to $0.75 per
share. Reductions in the sales charge are available for large
purchases and in certain other circumstances. See "How to
Purchase Fund Shares." In the initial offering, the adviser
and/or the distributor will pay an additional commission to
the selected brokers and dealers from its own resources equal
to $0.25 per share.
If the fund raises less than $____ million in the initial
offering, then, not less than 30 days after the closing of the
initial offering, the fund may commence a continuous offering
of its shares through selected brokers and dealers at a price
equal to their net asset value plus a maximum sales charge of
3%. Any such continuous offering, if commenced, will be
discontinued when the fund's total assets reach $____ million,
and may be discontinued at any time. The fund may commence
other continuous offerings from time to time in the future.
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3
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The adviser and/or the distributor will pay an additional
commission to the selected brokers and dealers from its own
resources equal to 1% of the net asset value of shares
purchased during any continuous offering. See "How to Purchase
Fund Shares." The fund will pay each selected broker or dealer
a shareholder servicing fee at an annual rate of 0.50% of the
net asset value of the outstanding shares owned by customers
of that broker or dealer.
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Distribution Policy The fund will pay dividends on the shares annually in amounts
representing substantially all of the net investment income, if
any, earned each year. It is likely that many of the companies
in which the fund invests will not pay any dividends. This,
together with the fund's relatively high expenses, means that
the fund is unlikely to have income or pay dividends.
The fund will pay substantially all of any taxable net capital
gain realized on investments to shareholders at least
annually. An automatic reinvestment plan is available for any
holder of the fund's common shares who wants to purchase
additional shares using dividends and/or capital gain
distributions paid by the fund. Shares will be issued under
the plan at their net asset value on the ex-dividend date.
There is no sales charge or other charge for reinvestment.
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Unlisted Closed-End Structure; Limited The fund is a closed-end management investment company.
Liquidity Closed-end funds differ from open-end management investment
companies (commonly known as mutual funds) in that
shareholders of a closed-end fund do not have the right to
redeem their shares on a daily basis. In order to be able to
meet daily redemption requests, mutual funds are subject to
more stringent regulatory limitations than closed-end funds.
In particular, a mutual fund generally may not invest more
than 15% of its net assets in illiquid securities.
The fund believes that unique investment opportunities exist
in the market for venture capital technology companies and in
private funds that invest in venture capital technology
companies. However, these venture capital investments often
are illiquid, and an open-end fund's ability to make such
investments is limited. For this reason, the fund has been
organized as a closed-end fund.
The fund's shares will not be listed on any securities
exchange and the fund does not expect any secondary market to
develop for its shares. You will not be able to redeem your
shares on a daily basis because the fund is a closed-end fund.
In addition, shares of the fund may not be exchanged for
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4
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shares of any other fund. As described below, however, in
order to provide a limited degree of liquidity, the fund will
conduct quarterly repurchase offers for 5% of its outstanding
shares. An investment in the fund is suitable only for
investors who can bear the risks associated with the limited
liquidity of the shares.
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Quarterly Repurchase Offers In order to provide a limited degree of liquidity to
shareholders, the fund will conduct quarterly repurchase
offers. The fund intends to commence the first repurchase
offer in ________, 2000 and to complete it in ________, 2000.
In each repurchase offer, the fund will offer to repurchase 5%
of its outstanding shares at their net asset value. The fund
may offer to repurchase more than 5% of its shares in any
quarter with the approval of the board of trustees. If the
number of shares tendered for repurchase exceeds the number the
fund intends to repurchase, the fund will repurchase shares on
a pro-rata basis. As a result, tendering shareholders will not
have all of their tendered shares repurchased by the fund. See
"Repurchase Offers."
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Risk Factors An investment in the fund involves a high degree of risk.
These include the risks of:
o investing in shares of an unlisted closed-end fund with
limited liquidity investing in the historically volatile
technology and technology-related industries;
o concentration in a small number of industry sectors and
maintaining a "non-diversified" portfolio;
o investing in small companies, often with limited
operating histories and limited or no earnings histories;
o investing in venture capital companies and venture
capital funds;
o investing a significant portion of the fund's assets in
securities that are illiquid and volatile;
o investing in securities of foreign issuers;
See "Risk Factors."
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SUMMARY OF FUND EXPENSES
The following table illustrates the expenses and fees that the fund
expects to incur and that shareholders can expect to bear.
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Shareholder Transaction Expenses
Sales load (as a percentage of offering price)................................. 3.00%
Automatic reinvestment plan fees............................................... None
Maximum redemption fee......................................................... None
Annual Expenses
(as a percentage of net assets attributable to common shares)
Management fees................................................................ 2.00%
Shareholder servicing fees..................................................... 0.50%
Other expenses*................................................................ 0.50%
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Total Annual Expenses............................................................... 3.00%
=========
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* "Other expenses" shown above are estimated, based on net assets of the fund of
$____ million at the closing of the fund's initial public offering, and
estimated organizational and offering costs payable by the fund of
$____________.
The adviser has undertaken to reimburse a portion of the fund's
expenses or to waive a portion of its management fee to the extent that the
fund's total expenses would otherwise exceed 3% of its average daily net assets
during the first year of the fund's operations.
The purpose of the table above is to assist you in understanding the
various costs and expenses you would bear directly or indirectly as a
shareholder of the fund. For a more complete description of the various costs
and expenses of the fund, see "Management of the fund."
Example 1 Year 3 Years 5 Years 10 Years
----------- ------------ ------------- --------------
You would pay the following expenses on a $ $ $ $
$10,000 investment, assuming a 5% annual
return:
The example does not present actual expenses and should not be
considered a representation of future expenses. Actual expenses may be greater
or less than those shown. Moreover, the fund's actual rate of return may be
greater or less than the hypothetical 5% return shown in the example.
6
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RISK FACTORS
Stock prices fluctuate. Apart from the specific risks identified below,
the fund's investments may be adversely affected by the broad investment
environment in the U.S. and international securities markets. This investment
environment is influenced by, among other things, interest rates, inflation,
politics, fiscal policy, and current events. Therefore, as with any fund that
invests in stocks, the fund's net asset value will fluctuate, especially in the
short term. You may experience a decline in the value of your investment and
could lose money.
Newly Organized Fund
The fund is a newly organized investment company with no previous
operating history. Although the adviser, the subadviser and the fund's portfolio
managers have experience managing other funds with investment objectives similar
to the fund's, the fund may not succeed in meeting its objective, and the fund's
net asset value may decrease. In addition, the adviser, the subadviser and the
fund's portfolio managers have less experience in venture capital investing than
they have in investing in public companies.
Unlisted Shares; No Secondary Market; Limited Liquidity
The fund is a closed-end investment company designed primarily for
long-term investors and is not intended to be a trading vehicle. The fund does
not intend to list its shares for trading on any national securities exchange.
There is no secondary trading market for the fund's shares, and none is expected
to develop. The fund's shares are therefore not readily marketable. Because the
fund is a closed-end investment company, shares of the fund are not redeemed on
a daily basis, and they may not be exchanged for shares of any other fund.
Although the fund, as a fundamental policy, will make quarterly repurchase
offers for 5% (or more, at the discretion of the fund's board of trustees) of
its outstanding shares of common shares at net asset value, the fund's shares
are considerably less liquid than shares of funds that trade on a stock
exchange. Also, because the common shares will not be listed on any securities
exchange, the fund is not required, and does not intend, to hold annual meetings
of shareholders.
Repurchase Offers
The fund will offer to purchase only a small portion of its shares each
quarter, and there is no guarantee that you will be able to sell all of your
fund shares that you desire to sell. If a repurchase offer is oversubscribed by
shareholders, the fund will repurchase only a pro-rata portion of the shares
tendered by each shareholder. The potential for pro-ration may cause some
investors to tender more shares for repurchase than they wish to have
repurchased. Moreover, the fund's repurchase policy may have the effect of
decreasing the size of the fund. This may force the fund to sell assets it would
not otherwise sell. It may also reduce the investment opportunities available to
the fund and cause its expense ratio to increase.
Investment in the Technology Industry
The fund plans to invest primarily in the stock of technology
companies. The value of the fund's shares may be susceptible to factors
affecting technology and technology-related industries. An investment in the
fund may be subject to greater risk and market volatility than an investment in
a fund that invests in a broader range of portfolio securities or in another,
less volatile industry. The specific risks faced by technology companies
include:
>> rapidly changing technologies and unusually high risk of product
obsolescence
>> heightening government regulation, making these companies
susceptible to changes in government policy and failures to secure
regulatory approvals
7
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>> cyclical patterns in information technology spending which may
result in inventory write-offs
>> intense competition among technology companies for management,
engineering and marketing personnel with appropriate technological
training
>> the possibility of lawsuits related to technological patents
>> changing investor sentiments and preferences with regard to
technology sector investments (which are generally perceived as risky)
Many technology companies have not yet achieved profitability and may
not achieve profitability in the future.
Investments in Small Companies
Although investments in small companies may present opportunity for
growth, there are specific risks associated with investments in small companies,
which include:
>> poor corporate performance due to less experienced management,
limited product lines, undeveloped markets and/or limited financial
resources
>> poor share price performance, due to limited availability of public
information and little or no research by the investment community
>> little or no liquidity due to small market capitalization and
absence of exchange listing or dealers willing to make a market
>> increased share price volatility, in part because, in periods of
investor uncertainty, investor sentiment may favor large, well-known
companies over small, lesser-known companies
>> reliance, in many cases, on one or two key individuals for
management
Investments in Venture Capital Companies
The fund may invest a substantial portion of its assets in securities
of unseasoned venture capital companies, which present all the risks of
investment in small companies described above plus certain additional risks.
Venture capital companies represent highly speculative investments by the fund.
The fund's ability to realize value from an investment in a venture capital
company is to a large degree dependent upon successful completion of the
company's initial public offering or the sale of the venture capital company to
another company, which may not occur for a period of several years after the
date of the fund's investment, if ever. There is no assurance that any of the
venture capital companies in which the fund invests will complete public
offerings or be sold, or, if these events occur, as to the timing and values of
such offerings or sales.
The fund may also lose all or part of its entire investment if these
companies fail or their product lines fail to achieve an adequate level of
market recognition or acceptance. Some companies may depend upon managerial
assistance or financing provided by their investors. The fund does not intend to
provide any such managerial assistance and will not generally provide additional
financing to the companies in which it invests. Therefore, the value of its
investments may depend upon the quality of managerial assistance provided by
other investors and their ability and willingness to provide financial support.
8
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Venture capital investing is a highly specialized field, and the
adviser, the subadviser and the fund's portfolio managers have less experience
in venture capital investing than they have in investing in public companies. In
addition, there is no assurance that the fund will be able to identify a
sufficient number of desirable venture capital investments.
Depending on the specific facts and circumstances of a venture capital
investment, there may not be a reasonable basis to revalue it for a substantial
period of time after the fund's investment. If a venture capital company does
not complete an initial public offering within the anticipated time frame of up
to three years from the date of the fund's investment, or enter into a
transaction whereby its shares are exchanged for shares of a public company,
there may never be a public market benchmark for valuing the investment.
The fund's net asset value per share may change substantially in a
short time as a result of developments at the companies in which the fund
invests. Changes in the fund's net asset value may be more pronounced and more
rapid than with other funds because of the fund's emphasis on venture capital
companies that are not publicly traded. The fund's net asset value per share may
change materially from day to day, including during the time between the date a
repurchase offer is mailed and the due date for tendering shares, and during the
period immediately after a repurchase is completed.
Investments in Venture Capital Funds
Venture capital funds involve all the risks of investing in small
companies described in this prospectus, plus certain additional risks. The fund
must, in making an investment in a venture capital fund, rely upon the judgment
of the general partner or other manager of the venture capital fund in deciding
whether and when to purchase and sell investments for the venture capital fund.
A venture capital fund may:
>> employ a high degree of leverage, which can magnify any losses
incurred by its investors, including the fund;
>> be required to pay management fees and/or a performance fee or
"carry" to its general partner and/or manager, which can reduce the
return to investors, including the fund; and
>> pay certain costs of evaluating each venture capital investment,
including fees of outside legal counsel, which may reduce the fund's
return.
Investments in venture capital funds may be highly illiquid. The fund
may not be able to dispose of an interest in a venture capital fund when it
wishes to, or may be able to do so only at a disadvantageous price.
Concentration; Non-Diversified Status
The fund will invest almost entirely in companies within or related to
various sectors of the technology industry. The subadviser will seek to reduce
the company-specific risk, as opposed to sector-specific risk, of the fund's
portfolio by investing in more than one company in a particular sector, but this
may not always be practicable. Nevertheless, because the fund's portfolio may be
concentrated in securities of companies in a single industry, the risk of each
investment decision is magnified.
The fund is classified as a "non-diversified" management investment
company under the Investment Company Act of 1940 (the "1940 Act"). This means
that the fund may invest a greater portion of its assets in a limited number of
issuers than if the fund were classified as a "diversified" management
investment company. Accordingly, the fund may be subject to greater risk as to
the issuer of any individual portfolio security than a "diversified" fund
because changes in the financial condition or market assessment of the issuer
may cause greater fluctuation in the net asset value of the fund's shares.
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Restricted and Illiquid Securities
The fund intends to invest a substantial portion of its assets in
restricted securities and other illiquid investments. Restricted securities are
securities that may not be resold to the public without an effective
registration statement under the Securities Act of 1933 or, if they are
unregistered, may be sold only in a privately negotiated transaction or in
reliance on an exemption from registration.
Restricted and other illiquid investments involve the risk that the
fund will not be able to sell the investments at the time desired by the fund
and/or at prices approximating the value at which the fund is carrying the
securities on its books.
Investments in Foreign Securities
The fund intends to invest in securities of foreign technology
companies. Investments in foreign securities involve specific risks, which
include:
>> unfavorable changes in currency rates and exchange control
regulations
>> restrictions on, and costs associated with, the exchange of
currencies and the repatriation of capital invested abroad
>> reduced availability of information regarding foreign companies
>> the different accounting, auditing and financial standards and less
stringent reporting standards and requirements that may apply to
foreign companies
>> reduced liquidity as a result of inadequate trading volume and
government-imposed trading restrictions
>> the difficulty in obtaining or enforcing a judgment abroad
>> increased market risk due to regional economic and political
instability
>> increased brokerage commissions and custody fees
>> securities markets which are subject to a lesser degree of
supervision and regulation by competent authorities
>> foreign withholding taxes
>> the threat of nationalization and expropriation
The fund may invest, both directly and through depositary receipts, in
the securities of companies in "developing" or "emerging markets" countries. A
developing or emerging markets country generally is considered to be a country
that is in the initial stages of its industrialization cycle. Investing in the
equity markets of developing countries involves exposure to economic structures
that are generally less diverse and mature, and to political systems that can be
expected to have less stability than those of developed countries. Historical
experience indicates that the markets of developing countries have been more
volatile than the markets of the more mature economies of developed countries.
To the extent the fund invests in securities of emerging markets companies, the
risks of investing in foreign securities (described above) may be heightened.
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In many emerging markets countries, there is less government
supervision and regulation of business and industry practices, stock exchanges,
brokers and listed companies than in developed countries. The foreign securities
markets of emerging markets countries may also be smaller, less liquid, and
subject to greater price volatility than those in the developed countries. In
the event of a default on any such foreign debt obligations, it may be more
difficult for the fund to obtain or enforce a judgment against the securities'
issuers. Finally, the fund's foreign investments may be expropriated,
nationalized or otherwise confiscated in the future. In such an event, the fund
could lose its entire investment in that market.
Borrowing
The fund is authorized to borrow money in an amount up to 5% of its
total assets (giving effect to the amount borrowed) in order to meet repurchase
requests, for other cash management purposes and to fund the purchase of
portfolio securities for a period of not longer than 30 days. The fund may not
purchase additional portfolio securities at any time that borrowings exceed 5%
of its total assets. The fund is not authorized to use borrowings for long-term
financial leverage purposes.
The rights of any lenders to the fund to receive payments of interest
or repayments of principal will be senior to those of the holders of the fund's
shares, and the terms of any borrowings may contain provisions that limit
certain activities of the fund, including the payment of dividends (if any) to
holders of shares. Interest payments and fees incurred in connection with
borrowings will increase the fund's expense ratio and will reduce any income the
fund otherwise has available for the payment of dividends.
Use of Derivatives for Hedging Purposes
The fund may use derivative instruments to hedge portfolio risk and for
cash management purposes. Investing in derivative investments involves numerous
risks. For example:
>> the underlying investment or security might not perform in the
manner that the subadviser expects it to perform. This could make the
effort to hedge unsuccessful.
>> the company issuing the instrument may be unable to pay the amount
due on the maturity of the instrument.
>> certain derivative investments held by the fund may trade only in
the over-the-counter markets or not at all, and can be illiquid.
>> derivatives may disproportionately affect the value of the fund's
portfolio because of their inherent leverage.
All of this can mean that the fund's net asset value may change more
often and to a greater degree than it otherwise would if the fund did not use
derivative instruments. The fund has no obligation to enter into any hedging
transactions.
Lending of Securities
Although the fund will receive collateral in connection with all loans
of portfolio securities, and this collateral will be marked to market, the fund
will be exposed to a risk of loss if a borrower defaults on its obligation to
return the borrowed securities. For example, loaned securities may have
appreciated beyond the value of the collateral held by the fund at the time of a
default. In addition, the fund will bear the risk of loss on any collateral that
it chooses to invest.
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USE OF PROCEEDS
The net proceeds of this offering will be invested in accordance with
the fund's investment objective and principal strategies as soon as practicable
after the closing of this offering. Based on current market conditions, the
subadviser expects the fund will be fully invested within one year. This lengthy
investment period reflects the fact that:
>> the fund plans to spend considerable time researching prospective
investments; and
>> the companies in which the fund plans to invest will be primarily
small to medium-sized technology companies which may have limited
amounts of outstanding securities available for purchase.
The fund plans to minimize the positive impact its purchases of
securities will have on the price of these securities by purchasing the
securities over a period of time. Pending the full investment of the proceeds of
the offering in equity securities of technology companies, the proceeds of the
offering will be invested in short-term, high quality debt securities. In
addition, up to 10% of the fund's assets may be invested temporarily in shares
of exchange-traded funds that seek to track the performance of technology or
other stock market indices.
The fund will pay organizational and offering expenses estimated to be
$______ from the proceeds of the initial offering. These expenses will therefore
be borne by investors in the initial offering. Investors in any subsequent
continuous offering may not bear any organizational or offering expenses.
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES
Long-Term Growth of Capital
The fund's investment objective is long-term growth of capital. Income
is not an objective. There is no guarantee that the fund will achieve its
investment objective.
Investment in Securities of Technology Companies
The fund proposes to achieve its objective by investing at least 65% of
its total assets in equity securities of U.S. and foreign companies that rely
extensively on technology in their product development or operations. These
companies may operate in any of the following or similar fields:
telecommunications, electronics, data management and storage, computer software,
computer services, computer hardware, semiconductors, communications, the
Internet, biotechnology, biomedics and pharmaceuticals.
The fund may invest in companies of any size, but (at the time of
investment) may invest primarily in small and medium-sized companies. In current
market conditions, the fund considers small and medium-sized companies to be
those with market capitalizations, at the time of investment by the fund, of as
little as $10 million and as much as $10 billion. The fund's definition of small
and medium-sized companies may change in light of market developments.
The fund expects to invest primarily in common stocks. The fund may
also invest in securities convertible into or exchangeable for common stocks,
rights and warrants to purchase common stocks and depository receipts
representing an ownership interest in equity securities. The fund considers all
of these securities equity securities for purposes of its investment strategies.
The fund may also invest in non-convertible debt securities or preferred stocks
believed to provide opportunities for capital gain.
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The fund may invest up to 35% of its total assets in equity securities
of privately owned technology companies commonly referred to as "venture
capital" companies, non-rated private debt securities that are not publicly
offered or traded and other mezzanine financing opportunities, as well as
private securities of public companies. There will be no public market for the
shares of a venture capital company at the time of the fund's investment, and
there is no assurance that a public offering of shares will be planned or
completed.
The fund expects its venture capital investments to fall largely within
one of three categories--"late-stage," "pre-IPO," or private financings of
already public companies. The fund considers a company to be late-stage if it
has already developed infrastructure and has commenced generating revenues.
These companies are unlikely to be profitable at this stage. It is anticipated
that late-stage companies will require one to three years to either have an
initial public offering, enter into a merger, or be acquired.
A pre-IPO company is somewhat more developed than a late-stage company.
Also known as "bridge financings," the fund believes these are situations in
which a public offering or acquisition is possible within a one-year period.
Both late-stage and pre-IPO companies will typically have small market
capitalizations and limited or no liquidity. Even after an initial public
offering, liquidity may be limited and the fund may be subject to contractual
limitations on its ability to sell shares.
For a variety of reasons, a company that is already public may choose
to raise additional capital through a private placement. These might include
lower costs of distribution or greater time-to-market. In most cases, these
securities have provisions to become freely tradable within a relatively short
period of time after the offering. However, liquidity may be limited and,
similar to a pre-IPO, the fund may be subject to contractual limitations on its
ability to sell shares.
The fund may invest up to 5% of its total assets in securities of
investment funds that invest primarily in venture capital companies. These
investments may involve relatively high fees, including a performance fee or
"carry" (and the fund will be indirectly paying fees to the manager of these
investment funds and to the subadviser on the same assets) and a high degree of
risk. See "Risk Factors - Venture Capital funds."
During the initial investment period, the fund may invest up to 10% of
its total assets in shares of exchange-traded funds that seek to track
technology or other stock indices. These funds pay certain fees and expenses,
which will be indirectly borne by the fund and its shareholders.
The fund may invest in securities of foreign issuers, either directly
or through investments in depositary receipts. The fund may not invest more than
25% of its total assets in foreign securities, but this limit does not apply to
investments in depositary receipts. Depositary receipts are certificates issued
by a bank or other financial institution that evidence the right to receive the
underlying foreign security. Investments in foreign securities involve certain
risks in addition to those of technology companies generally. These risks are
discussed under "Risk Factors."
The limitations on the percentage of the fund's assets that may be
invested in securities of venture capital companies, venture capital funds and
securities of foreign issuers apply only at the time of investment by the fund.
The fund will not be required to reduce its investments in these securities if a
percentage limit is exceeded as a result of changes in the value of these
investments or the fund's other portfolio securities.
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Investment Rationale
Since the invention and initial commercialization of the computer in
the mid-twentieth century, the pace of technological advancement has continued
at a rate greater than originally anticipated. Moore's Law, postulated more than
30 years ago by Gordon Moore - one of the co-founders of Intel - called for
advances in technology to double the price and performance of technology every
18 months. This theory, which has held up throughout the last part of the
twentieth century, is expected to continue well into the twenty-first century.
This suggests that various sectors of technology will grow in relative
importance to the general economy for at least the foreseeable future.
The best illustration of Moore's Law is the history of computing. Once
computers became commercially viable in the 1960s, mainframe computers reigned
as the dominant form of computing technology for nearly two decades, a trend
that lasted well into the 1970s. Minicomputers surpassed mainframes from the
mid-1970s into the 1980s, only to be themselves antiquated by the personal
computer, which appeared in the mid-1980s and continues to dominate computing
technology into the new millennium. Our investment team believes the tech world
is on the verge of the next generation of computer technology, which we term
"Net-centric computing."
These historical shifts in computing technology have often coincided
with significant changes in industry leadership. Some of the companies that have
emerged as today's technology leaders didn't even exist as recently as ten years
ago (industry leaders such as Microsoft, Cisco Systems, and EMC are products of
the 1980s). Now, with our belief that the pace of technology will continue to
accelerate, we believe that many of tomorrow's leaders are just beginning to
emerge.
The fund seeks to identify and invest in those leading companies that
will develop, market, and/or implement the next generation of computing
technology. Areas that the adviser and sub-adviser believe offer the greatest
growth potential include:
>> Internet and new media
>> Broadband and fiber optics
>> Digital consumer electronics
>> Biometric software
Hedging
The fund may seek to hedge portfolio risk through the use of financial
instruments known as derivatives. A derivative is generally defined as an
instrument whose value is derived from, or based upon, some underlying index,
reference rate (such as interest rates or currency exchange rates), security,
commodity or other asset. The fund will use a specific type of derivative only
after consideration of, among other things, how the derivative instrument serves
the fund's investment objective and the risk associated with the instrument. The
fund may use derivatives only for the purposes of hedging portfolio risk and
cash management.
The fund may buy or sell put or call options on transferable securities
to hedge against adverse movements in the prices of securities held in the
fund's portfolio. The fund may buy or sell these options if they are traded on
options exchanges or over-the-counter markets and will enter into transactions
only with broker-dealers that are reputable financial institutions and that
specialize in these types of transactions, make markets in these options, or are
participants in over-the-counter markets. A put option gives the purchaser of
the option the right to sell, and obligates the writer of the put option to buy,
the underlying security at a stated exercise price at any time prior to the
expiration of the option. Similarly, a call option gives the purchaser of the
option the right to buy, and obligates the writer of the call option to sell,
the underlying security at a stated exercise price at any time prior to the
expiration of the option.
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The subadviser will consider changes in foreign currency exchange rates
in making investment decisions about foreign securities. As one way of managing
exchange rate risk, the fund may, but is not required to, enter into forward
currency exchange contracts (agreements to purchase or to sell U.S. dollars or
foreign currencies at a future date). A forward contract may help reduce the
fund's losses on securities denominated in a currency other than U.S. dollars,
but it may also reduce the potential gain on the securities depending on changes
in the currency's value relative to the U.S. dollar. See "Additional Investment
Policies -- Other Operating Policies -- Foreign Currency Transactions" in the
SAI.
Non-Diversification As a non-diversified investment company, the fund
faces few regulatory restrictions on the proportion of its total assets it may
invest in the securities of any one company, or on the proportion of its total
assets it allocates to control interests in companies. However, the fund does
not intend to invest more than 25% of its total assets in the securities of any
one company. Similarly, the fund does not intend to invest more than 25% of its
total assets in controlling interests in companies. Market fluctuations could
cause these limits to be exceeded.
Borrowing; Use of Leverage
The fund is authorized to borrow money in an amount up to 5% of its
total assets (giving effect to the amount borrowed) in order to meet repurchase
requests, for other cash management purposes and to fund the purchase of
portfolio securities for a period of not longer than 30 days. The fund may not
purchase additional portfolio securities while borrowings exceed 5% of its total
assets. The fund is not authorized to borrow for long-term financial leverage
purposes. Borrowing by the fund involves certain risks for shareholders.
The board of trustees of the fund may modify the fund's policies with
respect to borrowing, including the percentage limitations, the purposes of
borrowings and the length of time that portfolio securities purchased with
borrowed money may be held by the fund. Management of the fund has no current
intention of requesting any such modifications. See "Risk Factors -- Borrowing"
and "Additional Investment Policies -- Fundamental Policies" in the SAI.
Fixed Income Securities
The portion of the fund's portfolio invested in venture capital
companies may include, without limitation, investments in private fixed income
securities of private or public companies. These securities may be of any credit
quality. In addition, the fund may invest up to 10% (measured at the time of
investment) of its total publicly-traded assets in all types of fixed income
securities of any maturity. These securities may be rated as low as "CC" or "Ca"
by a nationally recognized rating agency, or deemed by the adviser or subadviser
to be of equivalent credit quality. Credit quality is determined at the time of
investment only.
Investment Decisions Based Upon Extensive Firm-Level Research
The investment team employs a "bottom-up" research approach to select
the fund's portfolio holdings - one security at a time - rather than using a
"top-down" or sector selection investment strategy. This process involves
focusing on the potential growth of a company's products, the quality and depth
of its management team, its balance sheet, and its potential profitability. The
team, which has been analyzing technology companies since the mid-1970s, adheres
to a long-term investment philosophy.
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The investment team believes that different businesses have different
inherent profitability levels, even within the same general technology area.
Through discussions with management, competitors, vendors, and customers -both
public and private - members of the investment team construct individual
long-term business models. In many cases, current profitability levels do not
reflect the longer-term prospects, providing investment opportunities. Among the
considerations that impact the characteristics of a given company are:
>> Quality of management
>> Growth prospects
>> Competitive advantages and potential future technologies
>> Attractive valuations, particularly relative to competitors,
history, anticipated earnings and cash flow
>> Worldwide served and available market sizes
>> Financial strength
>> Product transitions that are frequently difficult to accomplish
>> Sales and marketing channels
>> Commodity versus proprietary products and services offered
Circumstances under which the Fund will sell a security
When the investment team purchases a new security, it immediately
establishes a "fair value" for the security. That price, established as the
initial sell target, is constantly reevaluated as new, incremental information
is incorporated into the fair value calculation. While the most obvious
information comes from management pronouncements, quarterly earnings reports,
and competitor's comments, much of the information comes from industry sources.
As more information becomes available, it is used to recalculate that
company's fair value against its current valuation. If the information has been
anticipated, no changes are made to the company's fair value. Sometimes,
however, new incremental information may lead to significant changes in the
calculated fair value of a company. Events such as acquisitions, strategic
alliances, product introductions, new competition, management defections, and
slowing revenue growth may lead to significant changes in a company's valuation
calculation.
The fund may also be forced to sell securities to meet its quarterly
share repurchase obligation. As a result, the annual portfolio turnover of the
fund may exceed 100%. A high portfolio turnover rate will increase the fund's
expenses. On the other hand, the fund may invest a significant portion of its
assets in venture capital securities having very little liquidity. The fund may
be forced to retain these assets even if the fund's investment strategies
indicate that the assets should be sold. See "Risk Factors - Restricted and
Illiquid Securities."
Defensive Measures
The fund may, from time to time, take temporary defensive positions
that are inconsistent with its principal strategies in seeking to minimize
extreme volatility caused by adverse market, economic, or other conditions. This
could prevent the fund from achieving its investment objective.
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The Fund May Change Its Investment Strategies
The fund may change any of the investment strategies outlined above,
and may change the definition of small and medium-sized companies, if the fund's
board of trustees believes doing so is consistent with the fund's investment
objective of long-term growth of capital. The fund's investment objective is
non-fundamental policy and may be changed without the approval of shareholders.
MANAGEMENT OF THE FUND
The board of trustees provides broad supervision over the affairs of
the fund.
The fund's investment adviser is John Hancock Advisers, Inc. (the
"adviser"), located at 101 Huntington Avenue, Boston, Massachusetts 02199. The
adviser, together with its affiliates, specializes in asset management for
individuals and corporations and has extensive experience in evaluating and
investing in common stock portfolios. The adviser was organized in 1968 and has,
as of June 30, 2000, approximately $30 billion of assets under management. The
adviser is a wholly owned subsidiary of John Hancock Financial Services, Inc.,
which is a wholly owned subsidiary of John Hancock Life Insurance Company. John
Hancock Life Insurance Company is one of the largest life insurance companies in
the United States and carries Standard & Poor's and AM Best's highest ratings.
Founded in 1862, John Hancock Life Insurance Company has been serving clients
for over 125 years.
The fund has entered into an investment advisory agreement with the
adviser, pursuant to which the adviser, in conjunction with the subadviser,
will: (a) furnish continuously an investment program for the fund and determine,
subject to the overall supervision and review of the trustees, which investments
should be purchased, held, sold or exchanged, and (b) provide supervision over
all aspects of the fund's operations except those which are delegated to a
custodian, transfer agent or other agent. The adviser will not be liable to the
fund except for willful malfeasance, bad faith, gross negligence, or reckless
disregard of its duties and obligations.
The adviser will also perform certain legal and accounting functions
for the fund under an agreement between the fund and the Investment adviser (the
"legal and accounting services agreement"). Under the terms of the legal and
accounting services agreement, the adviser provides services to the fund (to the
extent such services are not provided to the fund pursuant to other agreements)
including (a) providing supervision of the fund's non-investment operations, (b)
providing the fund with personnel as are reasonably necessary to provide the
fund with legal, accounting and clerical services, (c) arranging for the
preparation, at the fund's expense, of the fund's tax returns, reports to
shareholders and reports filed with the SEC and other regulatory authorities,
(d) providing the fund with adequate office space and certain related office
equipment and services, and (e) maintaining all of the fund's records other than
those maintained pursuant to such other agreements.
The subadviser is American Fund Advisors, Inc. (the "subadviser"). The
principal business address of the subadviser is 1415 Kellum Place, Suite 205,
Garden City, New York 11530. The subadviser was incorporated as an investment
advisor in 1978 and began its relationship with John Hancock Advisers in 1991.
The subadviser has been managing mutual funds, private accounts, and
partnerships since 1979. Current assets under management of nearly $3 billion
are concentrated in the technology sector, with investments in both public and
private companies. The three principals of the subadviser, Barry J. Gordon,
chairman and president, Marc H. Klee, CFA, executive vice president, and Alan J.
Loewenstein, CFA, senior vice president, have a combined 74 years of experience
as analysts and portfolio managers. The subadviser's "bottom-up" investment
philosophy stresses construction of business models for companies, believing
that valuation is a function of the inherent long-term profitability of a
company.
The Adviser has entered into a sub-advisory agreement with the
subadviser, under which the subadviser, subject to the review of the fund's
board of trustees and the overall supervision of the adviser, is responsible for
providing the fund with investment advice. Pursuant to the sub-advisory
agreement, the subadviser provides day-to-day portfolio management of the Fund.
The subadviser furnishes the adviser and the fund with investment advice and
recommendations consistent with the investment policies, objectives and
restrictions of the Fund. The subadviser pays its own costs of maintaining staff
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and personnel necessary for it to perform its obligations under the sub-advisory
agreement, expenses of its office rent, telephone, telecommunications and other
facilities required by it to perform services and any other expenses, including
legal, audit and professional fees and expenses, incurred by it in connection
with the performance of its duties under the sub-advisory agreement. The
subadviser will not be liable to the fund except for willful malfeasance, bad
faith, gross negligence, or reckless disregard of its duties and obligations.
Compensation and Expenses
Under the advisory agreement, the fund will pay to the adviser monthly,
as compensation for the services rendered and expenses paid by it, a fee equal
on an annual basis to 2.00% of the fund's average daily net assets. The
management fee payable by the fund to the adviser is higher than the fees paid
by most U.S. investment companies. The adviser has agreed to limit fund expenses
to 3.00% of the fund's average daily net assets at least until ________________.
The adviser, not the fund, pays the subadviser a monthly management fee on an
annual basis equal to 0.10% of the fund's average daily net assets during the
first year and 0.40% of the fund's average daily net assets for each year
thereafter.
Pursuant to the legal and accounting services agreement, the fund will
reimburse the adviser for: (1) a portion of the compensation of officers and
employees of the adviser based upon the amount of time that these persons spend
in providing accounting and legal services to the fund; (2) other direct and
indirect expenses incurred on behalf of the fund; and (3) 10% of the
reimbursement amount. The monthly fee under the legal and accounting services
agreement is estimated to be less than 0.02% annually of the fund's average
daily net assets.
Duration and Termination; Non-Exclusive Services
Unless earlier terminated as described below, the advisory agreement
and the sub-advisory agreement each will remain in effect for one year from the
date of its execution and from year to year thereafter if approved annually (1)
by a majority of the non-interested trustees of the fund and (2) by the board of
trustees or by a majority of the outstanding voting securities of the fund. Each
advisory agreement may be terminated without penalty on 60 days' written notice
by either party thereto or by vote of a majority of the outstanding voting
securities of the fund and will terminate in the event it is assigned (as
defined in the 1940 Act). The services of the adviser and subadviser are not
exclusive. Nothing in the relevant advisory agreements will prevent any of them
or their affiliates from providing similar services to other investment
companies and other clients (whether or not their investment objectives and
policies are similar to those of the fund) or from engaging in other activities.
Portfolio Managers
Barry J. Gordon is Chairman and President of American Fund Advisors. He has been
working as an analyst and portfolio manager since 1971, and been involved in
technology investments since 1976. He co-founded American Fund Advisors in 1978,
and was portfolio manager of National Aviation & Technology Fund (1973) and
co-portfolio manager of National Telecommunications & Technology Fund (1983)
prior to their merging together as John Hancock Technology Fund. He is also
co-portfolio manager of the various private accounts managed by American Fund
Advisors and has been involved in financing private technology companies since
1975.
Education: University of Miami, B.B.A. in Marketing, 1967; Hofstra University,
MBA in Finance, 1970
Years Experience: 29
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Marc H. Klee, CFA is Executive Vice President of American Fund Advisors. After
working at U.S. Trust Company and Fidelity Management & Research, he joined
American Fund Advisors in 1981 as Vice President. He has been following
technology-related companies since 1978. In addition to acting as co-portfolio
manager of the John Hancock Technology Fund and its predecessor since its
inception in early 1983, he is co-portfolio manager of the various private
accounts managed by American Fund Advisors and has been investing in private
technology companies since 1981.
Education: State University of New York at Stony Brook, BA in Economics, 1975;
Wharton School, University of Pennsylvania, MBA in Finance, 1977
Years Experience: 23
Alan J. Loewenstein, CFA is Senior Vice President of American Fund Advisors.
Formerly a technology analyst at Fidelity Union Bank in New Jersey, Mr.
Loewenstein joined American Fund Advisors in 1983. In addition to being a member
of the portfolio team on the John Hancock Technology Fund, he is co-portfolio
manager for the Company's private accounts. He has had experience investing in
private companies since 1983.
Education: Rutgers University, BA in Mathematics, 1976; Rutgers University, MBA
in Finance, 1978
Years Experience: 22
Expenses of the Fund
The fund pays a management fee to the adviser plus all its expenses
other than those assumed by the adviser. In addition to the payments to the
adviser under the advisory agreement, the fund pays certain other costs,
including, but not limited to, any and all expenses, taxes and governmental fees
incurred by the fund; the expenses of organizing the fund, of initially
registering the shares of the fund under the Securities Act of 1933 and of
qualifying the shares for sale under state securities laws for the initial
offering and sale of shares; the compensation and expenses of trustees who are
not interested persons of the adviser, and of independent advisers, independent
contractors, consultants, managers and other unaffiliated agents employed by the
fund other than through the adviser; legal, accounting and auditing fees and
expenses of the fund (including the allocable portion of the costs of its
employees rendering such services to the fund); the fees or disbursements of
custodians and depositories of the fund's assets, transfer agents, disbursing
agents, plan agents and registrars; the cost of preparing and mailing dividends,
distributions, reports, notices and proxy materials to shareholders of the fund;
brokers' commissions and underwriting fees; insurance premiums on fidelity,
errors and omissions and other coverages; and the expense of periodic
calculations of the net asset value of the shares of the fund. The fund also
pays a shareholder servicing fee to certain broker-dealers providing shareholder
account services to the fund. The fund's average daily net asset value is
determined for the purpose of calculating the management fee by taking the
average of all the daily determinations of net asset value (total assets less
all liabilities) during a given calendar month. The fees are payable for each
calendar month as soon as practicable after the end of that month.
REPURCHASE OFFERS
The fund expects a substantial portion of its investments to be
illiquid and does not intend to maintain a significant cash position. For this
reason, the fund is structured as a closed-end fund, which means that you will
not have the right to redeem your shares on a daily basis. In addition, the fund
does not expect any trading market to develop for its shares. As a result, if
you invest in the fund you will have limited opportunity to sell your shares.
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To provide you with a degree of liquidity, and the ability to receive
net asset value on a disposition of your shares, the fund will make quarterly
offers to repurchase its shares. The repurchase offers will be limited to a
specified percentage of the fund's outstanding shares. Shares will be
repurchased at their net asset value. The fund intends to commence the first
quarterly repurchase offer in ________, 2000 and to complete it in __________,
2000. The quarterly offers will be made in accordance with a fundamental policy
of the fund that may be changed only with the approval of the fund's
shareholders.
The Fund Will Offer to Repurchase 5% of Its Outstanding Shares Each Quarter
Each quarter, the fund will offer to repurchase 5% of the number of
shares outstanding on the date repurchase requests are due. The fund's board of
trustees may establish a larger percentage for any quarterly repurchase offer.
However, the percentage will not be less than 5% or more than 25% of the shares
outstanding on the date repurchase requests are due.
The fund intends to commence the first quarterly repurchase offer in
_______ 2000 and to complete it in ________ 2000. Thereafter, quarterly
repurchase offers will commence each March, June, September and December and
will be completed in the following month.
When a repurchase offer commences, the fund will send a notification of
the offer to shareholders via their financial intermediaries. The notification
will specify, among other things:
>> the percentage of shares that the fund is offering to repurchase.
This will ordinarily be 5%.
>> the date on which a shareholder's repurchase request is due. This
will ordinarily be the second Friday of the following month.
>> the date that will be used to determine the fund's net asset value
applicable to the share repurchase. This is generally expected to be
the day on which requests are due.
>> the date by which shareholders will receive the proceeds from their
share sales.
>> the net asset value of the common shares of the fund as of a date no
more than seven days before the date of the notification.
The fund intends to send this notification approximately 30 days before
the due date for the repurchase request. The notification will never be sent
less than 21 or more than 42 days in advance. Your shares of the fund must be
held through a selected broker or dealer. Certificated shares will not be
available, and you will not be able to receive repurchase offers directly from
the fund. Your selected broker or dealer may require additional time to mail the
repurchase offer to you, to process your request, and to credit your account
with the proceeds of any repurchased shares.
The due date for repurchase requests is a deadline that will be
strictly observed. If your intermediary fails to submit your repurchase request
in good order by the due date, you will be unable to liquidate your shares until
a subsequent quarter, and you will have to resubmit your request in that
quarter. You should be sure to advise your intermediary of your intentions in a
timely manner. You may withdraw or change your repurchase request at any point
before the due date.
The Fund's Fundamental Policies About Share Repurchases
The fund has adopted the following fundamental policies in relation to
its share repurchases which may only be changed by a majority vote of the
outstanding voting securities of the fund:
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>> as stated above, the fund will make share repurchase offers every
three months, in accordance with Rule 23c-3 under the 1940 Act, as
amended from time to time, commencing _________ 2000;
>> 5% of the fund's outstanding common shares will be subject to the
repurchase offer, unless the board of trustees establishes a different
percentage, which must be between 5% and 25%;
>> the repurchase request due dates will be the second Friday of each
January, April, July and October (or the preceding business day if that
day is a New York Stock Exchange holiday); and
>> there will be a maximum 14 day period between the due date for each
repurchase request and the date on which the fund's net asset value for
that repurchase is determined.
Pro-Rata Purchases of Shares if a Repurchase Offer is Oversubscribed
There is no minimum number of shares that must be tendered before the
fund will honor repurchase requests. However, the percentage determined by the
board of trustees for each repurchase offer will set a maximum number of shares
that may be purchased by the fund. If a repurchase offer by the fund is
oversubscribed, the fund may, but is not required to, repurchase additional
shares, but only up to a maximum amount of 2% of the outstanding shares of the
fund. If the fund determines not to repurchase additional shares beyond the
repurchase offer amount, or if shareholders tender an amount of shares greater
than that which the fund is entitled to purchase, the fund will repurchase the
shares tendered on a pro-rata basis.
If pro-ration is necessary, the fund will send a notice of pro-ration
to selected brokers and dealers on the business day following the due date. The
number of shares each investor asked to have repurchased will be reduced by the
same percentage. If any shares that you request to have repurchased by the fund
are not repurchased because of pro-ration, you will have to wait until the next
repurchase offer, and your repurchase request will not be given any priority
over other shareholders' requests. Thus, there is a risk that the fund may not
purchase all of the shares you want to sell in a given quarter or in any
subsequent quarter. In anticipation of the possibility of pro-ration, some
shareholders may tender more shares than they want to have repurchased in a
particular quarter, thereby increasing the likelihood of pro-ration. There is no
assurance that you will be able to sell as many of your shares as you want to
sell.
The fund may suspend or postpone a repurchase offer in limited
circumstances, but only with the approval of a majority of the board of
trustees, including a majority of independent trustees. See "Additional
Investment Policies - Other Operating Policies - Share Repurchases" in the SAI.
Determination of Repurchase Price
The repurchase price payable for a repurchased share will be equal to
the share's net asset value on the date specified in the notice. The fund's net
asset value per share may change substantially in a short time as a result of
developments at the companies in which the fund invests. Changes in the fund's
net asset value per share may be more pronounced and more rapid than with other
funds because of the fund's emphasis on small companies and venture capital
companies that are not publicly traded. The fund's net asset value per share may
change materially between the date a repurchase offer is mailed and the due
date, and it may also change materially shortly after a repurchase is completed.
The method by which the fund calculates net asset value is discussed under the
caption "Calculation of Net Asset Value."
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<PAGE>
Payment
The fund expects to repurchase shares on the next business day after
the net asset value determination date. Proceeds will be distributed to
intermediaries as specified in the repurchase offer notification, usually on the
third business day after repurchase. In any event, the fund will pay repurchase
proceeds no later than seven days after the net asset value determination date.
Impact of Repurchase Policies on the Liquidity of the Fund
From the time the fund distributes each repurchase offer notification
until the net asset value determination date, the fund must maintain liquid
assets at least equal to the percentage of its shares subject to the repurchase
offer. For this purpose, liquid assets means assets that may be disposed of in
the ordinary course of business at approximately the price at which they are
valued or that mature by the repurchase payment date. The fund is also permitted
to borrow money to meet repurchase requests. Borrowing by the fund involves
certain risks. See "Risk Factors - Borrowing."
In-Kind Repurchases
Under normal conditions, the fund intends to repurchase its shares for
cash. However, the fund reserves the right to pay for all or a portion of its
repurchased shares with an in-kind distribution of a portion of its portfolio
securities.
Consequences of Repurchase Offers
The fund believes that repurchase offers generally will benefit the
fund's shareholders, and generally will be funded from available cash or sales
of portfolio securities. However, if the fund borrows to finance repurchases,
interest on that borrowing will increase the fund's expenses and will reduce any
net investment income. To the extent the fund finances repurchase proceeds by
selling fund investments, the fund will hold a larger proportion of its total
assets in highly liquid securities. From time to time, commencing at least 30
days after the closing of this offering, the fund may offer new shares
continuously, which may alleviate these potential consequences, but there is no
assurance that the fund will be able to attract new investments or raise new
cash.
Repurchase offers provide shareholders with the opportunity to dispose
of shares at net asset value. The fund does not anticipate that a secondary
market will develop, but if a secondary market were to develop, it is possible
that shares would trade in that market at a discount to net asset value. The
existence of periodic repurchase offers at net asset value may not alleviate
this discount.
Repurchases of the fund's shares will tend to reduce the number of
outstanding shares and, depending upon the fund's investment performance and its
ability to sell additional shares in a continuous offering, its net assets. A
reduction in the fund's net assets will tend to increase the fund's expense
ratio.
In addition, the repurchase of shares by the fund will be a taxable
event to shareholders. For a discussion of these tax consequences, see "Taxes."
CALCULATION OF NET ASSET VALUE
The fund will compute its net asset value on each business day as of
the close of regular trading on the New York Stock Exchange, which is generally
4:00 p.m. New York time. Securities owned by the fund will be valued at current
market prices. If reliable market prices are unavailable (e.g., in the case of
the fund's venture capital investments), securities will be valued at fair value
as determined in good faith in accordance with procedures approved by the fund's
board of trustees. The fund may also value securities at fair value if the value
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of the securities has been materially affected by events occurring after the
close of a foreign market. Foreign stocks or other securities held by the fund
may trade on U.S. holidays and weekends, even though the fund's shares will not
be priced on those days. Therefore, the fund's net asset value may change on
days when the fund is not priced.
Venture capital investments will be valued at fair value, which will be
cost unless the adviser determines, pursuant to the fund's valuation procedures,
that such a valuation is no longer fair or appropriate. For example, valuation
at cost may no longer be appropriate following (1) the issuance by venture
capital companies of similar securities, (2) transactions among third parties at
different prices, or (3) an initial public offering by a venture capital company
in which the fund has invested. In these situations, the fund's investment will
be revalued in a manner that the adviser, following procedures approved by the
board of trustees, determines best reflects its fair value.
When the fund holds securities of a class that has been sold to the
public, fair valuation would often be market value less a discount to reflect
contractual or legal restrictions limiting resale. Fair value represents a good
faith approximation of the value of an asset and will be used where there is no
public market or possibly no market at all for a company's securities. The fair
values assigned one or more of the fund's investments may not, in retrospect, be
the prices at which those investments could have been sold while those fair
values were used in determining the fund's net asset value. As a result, the
fund's issuance or repurchase of its shares at net asset value at a time when it
owns securities that are valued at fair value may have the effect of diluting or
increasing the economic interest of existing shareholders. All fair value
determinations by the adviser are subject to ratification by the board of
trustees.
Expenses of the fund, including the adviser's investment management fee
and the costs of any borrowings, are accrued daily and taken into account for
the purpose of determining net asset value.
The net asset value per share is computed by dividing (1) the net asset
value of the fund by (2) the number of shares then outstanding. The net asset
value per share will be rounded up or down to the nearest cent. You may obtain
the fund's daily net asset value per share by calling (800) _______ or by
visiting the adviser's Internet website (http://www.jhfunds.com). The fund also
intends to publish its net asset value once weekly in various financial
periodicals.
SHARES OF BENEFICIAL INTEREST
The fund is authorized to issue 100 million shares of beneficial
interest, all of one class of shares, without par value. The board of trustees
is authorized to classify and reclassify any unissued shares of beneficial
interest from time to time by setting or changing the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications or terms or conditions of redemptions of these shares. The board
of trustees is also authorized to increase or decrease the number of shares the
fund is authorized to issue.
Each share is entitled to one vote at all meetings of shareholders. The
fund does not intend to hold annual meetings of shareholders. Shareholders do
not have preemptive, subscription or conversion rights, and are not liable for
further calls or assessments. Shareholders are entitled to receive dividends
only if and to the extent declared by the board of trustees and only after the
board has provided for working capital and reserves as the board, in its sole
discretion, deems advisable. Shares are not available in certificated form, and
shares must be held through a selected broker or dealer.
In general, any action requiring a vote of the holders of the Shares of
the fund will be effective if taken or authorized by the affirmative vote of a
majority of the aggregate number of the Shares entitled to vote thereon, except
that conversion of the fund to an open-end investment company requires the
affirmative vote of two-thirds of the aggregate number of Shares entitled to
vote thereon.
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In the event of any voluntary or involuntary liquidation, dissolution
or winding up of the fund, after payment of all of the liabilities of the fund,
the shareholders are entitled to share ratably in all the remaining assets of
the fund.
DISTRIBUTION POLICY
Dividends will be paid annually on the common shares in amounts
representing substantially all of the fund's net investment income, if any,
earned each year. Payments on the common shares will vary in amount, depending
on the fund's investment income received and expenses of operation. It is likely
that many of the companies in which the fund invests will not pay any dividends,
and this, together with the fund's relatively high expenses, means that the fund
is unlikely to have income or pay dividends. The fund is not a suitable
investment if you require regular dividend income.
Substantially all of any taxable net capital gain realized on
investments will be paid to common shareholders at least annually. The net asset
value of each share that you own will be reduced by the amount of the
distributions or dividends that you receive from that share.
Automatic Reinvestment Plan
The automatic reinvestment plan is available to any holder of the
fund's common shares who wants to purchase additional shares using dividends
and/or capital gain distributions paid by the fund. You may elect to:
>> reinvest both dividends and capital gain distributions;
>> receive dividends in cash and reinvest capital gain distributions;
or
>> receive both dividends and capital gain distributions in cash.
Your dividends and capital gain distributions will be reinvested if you
do not instruct your broker or dealer otherwise.
Shares will be issued to you at their net asset value on the
ex-dividend date. There is no sales charge or other charge for reinvestment. You
are free to change your election at any time by contacting your broker or
dealer, who will inform the fund. Your request must be received by the fund
before the record date to be effective for that dividend or capital gain
distribution.
TAXES
The fund intends to qualify and elect to be treated as a regulated
investment company under the Internal Revenue Code. As a regulated investment
company, the fund will generally be exempt from federal income taxes on net
investment income and capital gains distributed to shareholders, as long as at
least 90% of the fund's investment income and net short-term capital gains are
distributed to shareholders each year.
Dividends from net investment income and distributions from net
short-term capital gain are taxable as ordinary income. These dividends may, to
the extent attributable to dividends received by the fund from U.S.
corporations, be eligible for a 70% dividends-received deduction for
shareholders that are corporations. Distributions from net capital gain are
taxable as long-term capital gain, regardless of how long the shares have been
held by the shareholder, and are not eligible for the dividends-received
deduction. The tax treatment of dividends and capital gain distributions is the
same whether you take them in cash or reinvest them to buy additional fund
shares.
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When you sell fund shares or have shares repurchased by the fund, any
gain or loss you realize will generally be treated as a long-term capital gain
or loss if you have held your shares for more than one year, or as a short-term
capital gain or loss if you have held your shares for one year or less. However,
if you sell fund shares on which a long-term capital gain distribution has been
received and you have held the shares for six months or less, any loss you
realize will be treated as a long-term capital loss to the extent that it
offsets the long-term capital gain distribution.
The fund does not intend to operate in a manner that would permit the
fund to "pass-through" to its shareholders a credit for foreign taxes, if any,
payable by the fund.
Each January, you will be sent information on the tax status of any
distribution made during the previous calendar year. Because each shareholder's
situation is unique, you should always consult your tax advisor concerning the
effect income taxes may have on your individual investment.
HOW TO PURCHASE FUND SHARES
Initial Offering
The fund has entered into a distributing agreement with the
distributor, John Hancock Funds, Inc., the fund's principal underwriter. The
distributor, which is an affiliate of, and shares the same address as, the
fund's adviser, is offering the fund's shares on a best efforts basis. This
offering will be made through a group of brokers and dealers selected by the
distributor. In the initial offering the fund intends to raise approximately
$____ million of net proceeds. Common shares are offered at $24.25 per share
plus a sales charge of up to $0.75 per share payable to the selected broker or
dealer who arranges the sale. The maximum offering price is $25.00 per share.
Reductions in the sales charge are available depending upon the amount of your
purchase:
Total Offering
Amount Of Purchase Sales Charges Per Share Price Per Share
------------------ ----------------------- ---------------
Under $500,000 $0.75 $25.00
$500,000 but less than $1 million 0.50 24.75
$1 million or more 0.25 24.50
The fund must receive your payment for shares purchased in the initial
public offering by __________, 2000, unless the offering is extended by the
distributor. You should consult with your broker or dealer to make sure that
this deadline is met.
The fund will have the sole right to accept orders to purchase shares
and reserves the right to reject any order in whole or in part.
The adviser and/or the distributor will pay an additional sales
commission from its own resources to each selected broker or dealer equal to
$0.25 for each share sold in the initial offering by that selected broker or
dealer. In addition, the fund will pay each selected broker or dealer that is
not affiliated with the fund or the adviser a shareholder servicing fee at an
annual rate of 0.50% of the net asset value of the outstanding shares owned by
customers of that broker or dealer, as described below.
John Hancock has retained PaineWebber Incorporated to provide it with
advice in connection with the structuring of the initial offering. John Hancock
will pay PaineWebber Incorporated a structuring fee of approximately $________.
PaineWebber Incorporated is also participating in the initial offering as a
selected broker-dealer and will be paid the sales commissions described above on
shares sold by it in the initial offering.
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No market exists for the fund's shares. The fund's shares will not be
listed on any securities exchange, and the fund does not expect a secondary
market to develop for its shares. Neither the distributor, nor any broker or
dealer selected by the distributor to participate in the initial offering of the
fund's shares, intends to make a market in the fund's shares.
The fund has agreed to indemnify the distributor, and the distributor
has agreed to indemnify each selected broker and dealer, against certain
liabilities, including liabilities under the Securities Act of 1933.
Continuous Offering
If the fund raises net proceeds of less than $____ million in the
initial offering, then, not less than 30 days after the closing of the initial
offering, the fund may commence a continuous offering of its shares through
selected brokers and dealers at a price equal to their net asset value plus a
maximum sales charge of 3%. Any such continuous offering, if commenced, may be
discontinued when the fund's total assets reach $____ million or at any other
time. The fund may commence other continuous offerings from time to time in the
future. Any such continuous offering, if commenced, may be discontinued at any
time without notice. During any continuous offering of the fund's shares, shares
of the fund may be purchased only from selected brokers and dealers.
During any continuous offering, the fund's shares will be offered at a
price equal to the net asset value per share plus a maximum sales charge of 3%.
This sales charge will be applied as follows:
Sales Charges Dealer Reallowance
Amount Of Purchase (percentage of offering price) (percentage of offering price)*
------------------ ------------------------------ -------------------------------
Under $500,000 3.00% 4.00%
$500,000 but less than $1 million 2.00% 3.00%
$1 million or more 1.00% 2.00%
*As described above under "Initial Offering," the adviser and/or the
distributor will pay an additional sales commission to selected brokers and
dealers equal to 1% of the net asset value of each share sold.
The purchase price for fund shares will be based upon the net asset
value next calculated after the distributor accepts your request. Purchase
orders received by a selected broker or dealer by the close of regular trading
on the New York Stock Exchange (normally 4:00 p.m., New York time) and accepted
by the distributor before 5:00 p.m., New York time, on the same day will be
executed at the net asset value per share calculated as of the close of that
day's regular trading on the NYSE. If your purchase order is received after the
times indicated above, your order will be executed at the net asset value per
share calculated as of the close of regular trading on the NYSE the next
business day.
If the fund commences a continuous offering, reductions in the sales
charge may also be available depending upon the total cost of the shares you
purchase. A right of accumulation may allow you to combine the total cost of the
shares you purchase in the initial offering and in any future continuous
offerings to permit you to have the benefit, if you qualify, of a reduced sales
charge for your then current share purchase. However, the total cost of the
shares owned by you will only be taken into account in orders placed through a
broker or dealer if you (1) notify your broker or dealer that you want to take
advantage of the right of accumulation and (2) provide sufficient information to
permit confirmation of the total cost of the fund shares you own when the
subsequent purchase is made.
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Shareholder Servicing Fee
The fund may pay selected brokers and dealers including affiliates of
the fund or the adviser a shareholder servicing fee to compensate them for
providing shareholder services and for the maintenance of accounts. These
services include providing information and responding to shareholder questions
about the structure of the fund, the availability of shares in any continuous
offering, and repurchase offers. The shareholder servicing fee is payable
quarterly at an annual rate of 0.50% of the value of the outstanding shares
owned by customers of the broker or dealer. This fee is accrued daily as an
expense of the fund.
Opening an Account With the Fund
To make an investment in the fund, contact your financial advisor.
Accounts may be opened only through selected brokers and dealers. Shares are not
available in certificated form. Shares may be transferred to an account at
another broker or dealer only if the broker or dealer has entered into an
agreement with the distributor relating to shares of the fund.
The required minimum initial investment in the fund is $10,000.
Additional investments during a continuous offering, if any, must be at least
$1,000.
Sales at Net Asset Value
Certain persons are eligible to purchase shares of the fund at net
asset value, without payment of the front-end sales charge, and may hold shares
directly with the fund. These persons are: (1) trustees and officers of the
trust, directors and officers of its affiliates or selling broker-dealers;
employees or sales representatives of any of the foregoing; retired officers,
directors or employees of any of the foregoing; a member of the immediate family
(spouse, children, grandchildren, mother, father, sister, brother,
mother-in-law, father-in-law, daughter, son-in-law, niece, nephew, grandparents
and same sex domestic partner) of any of the foregoing; or any fund, pension,
profit sharing or other benefit plan for the individuals described above; and
(2) a broker, dealer, financial planner, consultant or registered investment
advisor that has entered into a signed agreement with John Hancock Funds
providing specifically for the use of fund shares in fee-based investment
products or services made available to their clients.
GENERAL INFORMATION
The fund is registered under the 1940 Act as a closed-end,
non-diversified management investment company. The fund was organized as a
business trust under the laws of the Commonwealth of Massachusetts on June 6,
2000 and has no operating history. The fund's office is located at 101
Huntington Avenue, Boston, Massachusetts 02199 and its telephone number is (617)
___-_____. The fund's transfer agent, dividend disbursing agent and registrar is
John Hancock Signature Services, Inc., 1 John Hancock Way, Suite 1000, Boston MA
02217-1000.
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TABLE OF CONTENTS OF SAI
Additional Investment Policies......................................... B-2
Trustees and Officers.................................................. B-7
Investment Advisory and Other Services................................. B-
Experts................................................................ B-
Custodian, Shareholder Service Agent and Dividend Paying Agent ........ B-
Principal Underwriter Following Initial Public Offering ............... B-
Brokerage Commissions ................................................. B-
Code of Ethics ........................................................ B-
Financial Statements .................................................. B-
Appendix A............................................................. B-
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JOHN HANCOCK VENTURE TECHNOLOGY FUND
101 Huntington Avenue, Boston, Massachusetts 02199-7603
A Management Type
Non-Diversified, Closed-End
Investment Company
----------------------------------------
Common Shares
($0.01 Par Value)
----------------------------------------
PROSPECTUS
_________, 2000
Until ___________, 2000 (90 calendar days after the commencement of the
offering), all dealers effecting transactions in these securities, whether or
not participating in this offering, may be required to deliver a prospectus.
This delivery requirement is in addition to the obligation of the selected
brokers and dealers to deliver a prospectus in connection with each sale made
pursuant to this offering.
Investment Manager Shareholder Service Agent
John Hancock Advisers, Inc. [________]
101 Huntington Avenue
Boston, Massachusetts 02199-7603
Portfolio Securities Custodian General Counsel
[________] Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
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<PAGE>
JOHN HANCOCK VENTURE TECHNOLOGY FUND
__________, 2000
Statement Of Additional Information
101 Huntington Avenue
Boston, Massachusetts 02199-7603
(___) ___-____
Toll-Free (___) ___-____
This statement of additional information ("sai") is not a prospectus.
This sai relates to and should be read in conjunction with the prospectus of
John Hancock Venture Technology Fund (the "fund"), dated _________, 2000. A copy
of the prospectus may be obtained by contacting the fund at the telephone
numbers or address set forth above.
The information in this sai is not complete and may be changed. The
fund may not sell these securities until the registration statement filed with
the Securities and Exchange Commission ("SEC") is effective. This sai is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
TABLE OF CONTENTS
Additional Investment Policies........................................ B-2
Trustees and Officers................................................. B-7
Investment Advisory and Other Services................................ B-12
Experts............................................................... B-12
Custodian, Shareholder Service Agent and Dividend Paying Agent ....... B-12
Principal Underwriter Following Initial Public Offering .............. B-13
Brokerage Commissions ................................................ B-13
Code of Ethics ....................................................... B-10
Financial Statements ................................................. B-13
[Appendix A]..........................................................
<PAGE>
ADDITIONAL INVESTMENT POLICIES
The investment objective and principal investment strategies of the
fund, as well as the principal risks associated with the fund's investment
strategies, are set forth in the prospectus. Certain additional investment
information is set forth below.
Fundamental Policies
The fund's stated fundamental policies, which may not be changed
without a vote of shareholders, are listed below. Within the limits of these
fundamental policies, the fund's management has reserved freedom of action. The
fund:
(1) May not issue senior securities such as bonds, notes or other
evidences of indebtedness, or otherwise borrow money, or issue
preferred stock unless, immediately after issuance, the net
assets of the fund provide asset coverage (as defined in the
Investment Company Act of 1940 (the "1940 Act") of at least
300% with respect to indebtedness and at least 200% with
respect to preferred stock.
(2) May not engage in the business of underwriting securities,
except to the extent it may be deemed to be engaged in such
business by disposing of portfolio securities.
(3) May not, with limited exceptions, purchase and sell real
estate directly, but may do so through majority-owned
subsidiaries, so long as its real estate investments do not
exceed 10% of the value of the fund's total assets.
(4) May not lend portfolio securities to broker-dealers or other
institutions, unless the fund's investment adviser, John
Hancock Advisers, Inc. (the "adviser") believes that these
loans will benefit the fund. The borrower must maintain with
the fund cash or equivalent collateral equal to at least 100%
of the market value of the securities loaned. Moreover, all
such loans taken together cannot exceed 10% of the value of
the total assets of the fund. The fund may make loans
represented by repurchase agreements, so long as these loans
do not exceed 10% of the value of the total assets of the
fund.
(5) With respect to its share repurchases:
o the fund will make share repurchase offers
approximately every three months (except under the
circumstances described below beginning at page B-6),
commencing ________, 2000, pursuant to Rule 23c-3
under the 1940 Act, as amended from time to time;
o 5% of the fund's outstanding common shares will be
subject to each repurchase offer, unless the board of
trustees establishes a different percentage, which
must be between 5% and 25%;
o the repurchase request due dates will be the
[second Friday of] each January, April, July and
October (or the preceding business day if that day is
a New York Stock Exchange holiday); and
o there will be a maximum 14 day period between the
due date for each repurchase request and the date on
which the fund's net asset value for that repurchase
is determined.
B-2
<PAGE>
(6) May not invest more than 25% of its total assets in any one
industry, except that the fund will invest at least 25% of the
value of its total assets in securities of companies that rely
extensively on technology in their product development or
operations, except when investing for temporary defensive
purposes.
(7) May purchase or sell commodities and commodity contracts
(including stock index, currency and other financial futures
contracts and options on these futures contracts).
Other Operating Policies
Lending of Portfolio Securities. During the time portfolio securities
are on loan, the borrower pays the fund any dividends or interest paid on the
securities. The fund may invest the collateral and earn additional income or
receive an agreed upon amount of interest income from the borrower. Loans made
by the fund will generally be short-term. Loans are subject to termination at
the option of the fund or the borrower. The fund may pay reasonable
administrative and custodial fees in connection with a loan and may pay a
negotiated portion of the interest earned on the collateral to the borrower or
placing broker. The fund does not have the right to vote securities on loan, but
would terminate a loan and regain the right to vote if it were considered
important to preserve or enhance the value of the securities. The fund may lose
money if a borrower defaults on its obligation to return securities and the
value of the collateral held by the fund is insufficient to replace the loaned
securities. In addition, the fund is responsible for any loss that might result
from its investment of the borrower's collateral.
Foreign Securities. The fund may invest in commercial paper and
certificates of deposit issued by foreign banks and may invest either directly
or through American Depositary Receipts ("ADRs"), European Depositary Receipts
("EDRs"), or Global Depositary Receipts ("GDRs") (collectively, "depositary
receipts") in other securities of foreign issuers. For a discussion of the risks
associated with investments in foreign securities, see "Risk Factors - Foreign
Securities" in the Prospectus.
Depositary receipts are instruments generally issued by domestic banks
or trust companies that represent interests in a security of a foreign issuer.
ADRs, which are traded in dollars on U.S. exchanges or over-the-counter, are
issued by domestic banks and evidence ownership of securities issued by foreign
corporations. EDRs are typically traded in Europe. GDRs are typically traded in
both Europe and the United States.
Depositary receipts may be issued under sponsored or unsponsored
programs. In a sponsored program, the issuer has made arrangements to have its
securities traded in the form of a depositary receipt. In unsponsored programs,
the issuers may not be directly involved in the creation of the program.
Although regulatory requirements with respect to sponsored and unsponsored
depositary receipt programs are generally similar, the issuers of securities
represented by unsponsored depositary receipts are not obligated to disclose
material information in the United States. Therefore, the import of this
information may not be reflected in the market value of these receipts.
The fund may invest up to 25% of its total assets in foreign securities
that it holds directly, but this 25% limit does not apply to foreign securities
held through depositary receipts that are traded in the United States or to
commercial paper and certificates of deposit issued by foreign banks. The
limitation in the preceding sentence may be changed without a shareholder vote.
Investment income received by the fund from sources within foreign
countries may be subject to foreign income taxes withheld at the source. The
United States has entered into tax treaties with many foreign countries that
entitle the fund to a reduced rate of these taxes or exemption from taxes on
this income. It is impossible to determine the effective rate of foreign tax in
advance since the amounts of the fund's assets to be invested within various
countries is not known.
B-3
<PAGE>
Foreign Currency Transactions. A forward foreign currency exchange
contract is an agreement to purchase or sell a specific currency at a future
date and at a price set at the time the contract is entered into. The fund will
generally enter into forward foreign currency exchange contracts to fix the U.S.
dollar value of a security it has agreed to buy or sell for the period between
the date the trade was entered into and the date the security is delivered and
paid for, or to hedge the U.S. dollar value of securities it owns.
The fund may enter into a forward contract to sell or buy the amount of
a foreign currency it believes may experience a substantial movement against the
U.S. dollar. In this case the contract would approximate the value of some or
all of the fund's portfolio securities denominated in that foreign currency.
Under normal circumstances, the fund will limit its position in forward
contracts for a particular currency to not more than 75% of the fund's portfolio
position in that currency as of the date the contract is entered into. Under
extraordinary circumstances, the fund may enter into forward contracts for a
particular currency that exceed this 75% limitation.
The precise matching of forward contract amounts and the value of
securities involved will not generally be possible since the future market value
of these securities in foreign currencies will change between the date the
forward contract is entered into and the date it matures. The projection of
short-term currency market movements is extremely difficult, and the successful
execution of a short-term hedging strategy is highly uncertain. Under certain
circumstances, the fund may commit up to the entire value of its assets which
are denominated in foreign currencies to the consummation of these contracts.
The adviser will consider the effect a substantial commitment of the fund's
assets to forward contracts would have on the investment program of the fund and
its ability to purchase additional securities.
Except as set forth above, the fund will not enter into these forward
contracts or maintain a net exposure to these contracts if the consummation of
the contracts would obligate the fund to deliver an amount of foreign currency
that exceeds (1) the value of the fund's portfolio securities or other assets
denominated in that currency plus (2) the amount of cash and other liquid assets
held by the fund.
At the maturity of a forward contract to sell foreign currency, the
fund may either (1) sell the portfolio security and make delivery of the foreign
currency, or (2) retain the security and terminate its contractual obligation to
deliver the foreign currency. The fund would terminate a forward contract to
sell foreign currency by purchasing an "offsetting" contract obligating it to
purchase, on the same maturity date, the same amount of the foreign currency.
As indicated above, it is impossible to forecast with absolute
precision the market value of portfolio securities at the expiration of the
forward contract. Accordingly, it may be necessary for the fund to purchase
additional foreign currency on the spot market (and bear the expense of this
purchase) if the market value of the security is less than the amount of foreign
currency the fund is obligated to deliver and if the fund decides to sell the
security and make delivery of the foreign currency. Conversely, it may be
necessary to sell on the spot market some of the foreign currency received upon
the sale of a portfolio security if its market value exceeds the amount of
foreign currency the fund is obligated to deliver. However, the fund may use
liquid securities, denominated in any currency, to cover the amount by which the
value of a forward contract exceeds the value of the securities to which it
relates.
If the fund retains the portfolio security and engages in offsetting
transactions, the fund will incur a gain or a loss (as described below) to the
extent that there has been movement in forward contract prices. If forward
prices decline during the period between the fund's entering into a forward
contract for the sale of a foreign currency and the date it enters into an
offsetting contract for the purchase of the foreign currency, the fund will
realize a gain to the extent the price of the currency it has agreed to sell
exceeds the price of the currency it has agreed to purchase. If forward prices
increase, the fund will suffer a loss to the extent the price of the currency it
has agreed to purchase exceeds the price of the currency it has agreed to sell.
B-4
<PAGE>
The fund's transactions in forward foreign currency exchange contracts
will be limited to those described above. Of course, the fund is not required to
enter into forward contracts with regard to its foreign currency-denominated
securities and will not do so unless deemed appropriate by the adviser. Using
forward contracts to hedge against a decline in the value of a currency does not
eliminate fluctuations in the underlying prices of the securities. It simply
establishes a rate of exchange at a future date. Additionally, although
contracts to sell foreign currency minimize the risk of loss due to a decline in
the value of that currency, at the same time, they limit any potential gain that
might result from an increase in the value of that currency.
The fund will incur costs in converting between currencies. Although
foreign exchange dealers do not charge a fee for conversion, they do realize a
profit based on the difference (the "spread") between the prices at which they
are buying and selling various currencies. Thus, a dealer may offer to sell a
foreign currency to the fund at one rate, while offering a lesser rate of
exchange should the fund desire to resell that currency to the dealer.
Repurchase Agreements. The fund may enter into repurchase agreements
with commercial banks and broker-dealers as a short-term cash management tool. A
repurchase agreement is an agreement under which the fund acquires a security,
generally a U.S. Government obligation, subject to resale at an agreed upon
price and date. The resale price reflects an agreed upon interest rate effective
for the period of time the fund holds the security and is unrelated to the
interest rate on the security. The fund's repurchase agreements will at all
times be fully collateralized.
Repurchase agreements could involve certain risks in the event of
bankruptcy or other default by the seller, including possible delays and
expenses in liquidating the securities underlying the agreement, a decline in
value of the underlying securities and a loss of interest. Repurchase agreements
are considered loans under the Investment Company Act of 1940 (the "1940 Act").
Illiquid Securities. The fund may invest in illiquid securities,
including restricted securities (i.e., securities not readily marketable without
registration under the Securities Act of 1933, as amended (the "1933 Act")) and
other securities that are not readily marketable. These may include restricted
securities that can be offered and sold only to "qualified institutional buyers"
in reliance on Rule 144A under the 1933 Act and commercial paper offered in
reliance on Section 4(2) of the 1933 Act. There is no limit on the percentage of
the fund's net assets that may be invested in illiquid securities, but the fund
does not expect illiquid securities to ordinarily exceed 50% of the fund's net
assets.
Rights and Warrants. The fund may invest in common stock rights and
warrants believed by the adviser to provide capital appreciation opportunities.
Common stock rights and warrants may be purchased separately or may be received
as part of a unit or attached to securities purchased.
Options on Securities and Securities Indices. The fund may purchase or
write (sell) put and call options on any security in which it may invest or
options on any securities index based on securities in which it may invest in an
attempt to provide a market hedge against changes in the value of portfolio
securities. The fund will not engage in options transactions for speculative
purposes.
Purchasing Call and Put Options. The fund would normally purchase call
options in anticipation of an increase in the market value of securities of the
type in which it may invest. The purchase of a call option would entitle the
fund, in return for the premium paid, to purchase specified securities at a
specified price during the option period. The fund would ordinarily realize a
gain if, during the option period, the value of such securities exceeded the sum
of the exercise price, the premium paid and transaction costs; otherwise the
fund would realize either no gain or a loss on the purchase of the call option.
The fund would normally purchase put options in anticipation of a decline in the
market value of securities in its portfolio ("protective puts") or in securities
in which it may invest. The purchase of a put option would entitle the fund, in
exchange for the premium paid, to sell specified securities at a specified price
during the option period. The purchase of protective puts is designed to offset
B-5
<PAGE>
or hedge against a decline in the market value of the fund's securities. Put
options may also be purchased by the fund for the purpose of affirmatively
benefiting from a decline in the price of securities which it does not own. The
fund would ordinarily realize a gain if, during the option period, the value of
the underlying securities decreased below the exercise price sufficiently to
more than cover the premium and transaction costs; otherwise the fund would
realize either no gain or a loss on the purchase of the put option. Gains and
losses on the purchase of protective put options would tend to be offset by
countervailing changes in the value of the underlying portfolio securities.
Writing Call and Put Options on Securities. A call option written by
the fund obligates the fund to sell specified securities to the holder of the
option at a specified price if the option is exercised at any time before the
expiration date. A put option written by the fund would obligate the fund to
purchase specified securities from the option holder at a specified price if the
option is exercised at any time before the expiration date.
Writing Call and Put Options on Securities Indices. The fund may also
write (sell) covered call and put options on any securities index composed of
securities in which it may invest. Options on securities indices are similar to
options on securities, except that the exercise of securities index options
requires cash payments and does not involve the actual purchase or sale of
securities. In addition, securities index options are designed to reflect price
fluctuations in a group of securities or segments of the securities market
rather than price fluctuations in a single security.
Risks of Trading Options. The writing and purchase of options is a
highly specialized activity which involves investment techniques and risks
different from those associated with ordinary portfolio securities transactions.
The successful use of protective puts for hedging purposes depends in part on
the ability to predict future price fluctuations and the degree of correlation
between the options and securities markets. The hours of trading for options may
not conform to the hours during which the underlying securities are traded. To
the extent that the options markets close before the markets for the underlying
securities, significant price movements can take place in the underlying markets
that cannot be reflected in the options markets. In addition to the risks of
imperfect correlation between the fund's portfolio and the index underlying the
option, the purchase of securities index options involves the risk that the
premium and transaction costs paid by the fund in purchasing an option will be
lost. This could occur as a result of unanticipated movements in the price of
the securities comprising the securities index on which the option is based.
There is no assurance that a liquid secondary market on an options
exchange will exist for any particular exchange-traded option, or at any
particular time. Transactions by the fund in options on securities and indices
will be subject to limitations established by each of the exchanges, boards of
trade or other trading facilities governing the maximum number of options in
each class which may be written or purchased by a single investor or group of
investors acting in concert. Thus, the number of options which the fund may
write or purchase may be affected by options written or purchased by other
investment advisory clients of the adviser and subadviser. An exchange, board of
trade or other trading facility may order the liquidations of positions found to
be in excess of these limits, and it may impose certain other sanctions.
Temporary Defensive Positions. In an attempt to respond to adverse
market, economic, political, or other conditions, the fund may invest up to 100%
of its assets in cash or cash equivalents including, but not limited to,
commercial paper, bank certificates of deposit, bankers' acceptances or
repurchase agreements for these securities, and securities of the U.S.
Government and its agencies and instrumentalities, as well as cash and cash
equivalents denominated in foreign currencies. The fund's investments in foreign
cash equivalents will be limited to those that, in the opinion of the adviser,
are comparable in credit quality to U.S. cash equivalents. Investments in bank
obligations will be limited at the time of investment to the obligations of the
100 largest domestic banks in terms of assets that are subject to regulatory
supervision by the U.S. Government or state governments, and the obligations of
the 100 largest foreign banks in terms of assets with branches or agencies in
the United States.
B-6
<PAGE>
Share Repurchases. The fund may not suspend or postpone a repurchase
offer except pursuant to a vote of a majority of the trustees, including a
majority of the disinterested trustees, and only:
>> If the repurchase would cause the fund to lose its status as a
regulated investment company under Subchapter M of the Internal Revenue
Code of 1986, as amended;
>> For any period during which the New York Stock Exchange or any other
market in which the securities owned by the fund are principally traded
is closed, other than customary weekend and holiday closings, or during
which trading in such market is restricted;
>> For any period during which an emergency exists as a result of which
disposal by the fund of securities owned by it is not reasonably
practicable, or during which it is not reasonably practicable for the
fund fairly to determine the value of its net assets; or
>> For such other periods as the SEC may by order permit for the
protection of securityholders of the fund.
Trustees and Officers
A listing of the trustees and officers of the fund and their business
experience for the past five years follows. An asterisk (*) indicates trustees
who are "interested persons" of the fund (as defined by the 1940 Act). Unless
otherwise noted, the address of each trustee and officer is 101 Huntington
Avenue, Boston, Massachusetts 02199-7603
Trustees
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
---------------- ---------------- --------------------------
<S> <C> <C>
Stephen L. Brown* Trustee and Chairman Chairman, John Hancock Life Insurance
John Hancock Place Company; Chairman and Director, John
P.O. Box 111 Hancock Advisers, Inc. (The Adviser),
Boston, MA 02117 John Hancock Funds, Inc. (John
July 1937 Hancock Funds), The Berkeley
Financial Group, Inc. (The Berkeley
Group); Director, John Hancock
Subsidiaries, Inc.; John Hancock
Insurance Agency, Inc.; (Insurance
Agency), (until June 1999); Federal
Reserve Bank of Boston (until March
1999); John Hancock Signature
Services, Inc. (Signature Services)
(until January 1997); Trustee, John
Hancock Asset Management (until March
1997); Chief Executive Officer (until
June 2000).
Maureen R. Ford * Trustee, Vice Chairman, President President, Broker/Dealer Distributor,
101 Huntington Avenue and Chief Executive Officer (1,2) John Hancock Life Insurance Company;
Boston, MA 02199 Vice Chairman, Director and Chief
April 1955 Executive Officer, the Adviser, The
Berkeley Group, John Hancock Funds;
Chairman, Director, Insurance Agency,
Inc.; Chairman, Director and Chief
Executive Officer, Sovereign Asset
Management Corporation (SAMCorp.);
Senior Vice President, MassMutual
Insurance Co. (until 1999); Senior
Vice President, Connecticut Mutual
Insurance Co. (until 1996).
B-7
<PAGE>
James F. Carlin Trustee Chairman and CEO, Carlin
233 West Central Street Consolidated, Inc.
Natick, MA 01760 (management/investments); Director,
April 1940 Arbella Mutual (insurance), Health
Plan Services, Inc., Massachusetts
Health and Education Tax Exempt
Trust, Flagship Healthcare, Inc.,
Carlin Insurance Agency, Inc., West
Insurance Agency, Inc. (until May
1995), Uno Restaurant Corp.;
Chairman, Massachusetts Board of
Higher Education (until July 1999).
William H. Cunningham Trustee Chancellor, University of Texas
601 Colorado Street System and former President of the
O'Henry Hall University of Texas, Austin, Texas;
Austin, TX 78701 Lee Hage and Joseph D. Jamail
January 1944 Regents Chair of Free Enterprise;
Director, LaQuinta Motor Inns, Inc.
(hotel management company)
(1985-1998); Jefferson-Pilot
Corporation (diversified life
insurance company) and LBJ
Foundation Board (education
foundation); Advisory Director,
Chase Bank (formerly Texas Commerce
Bank - Austin).
Ronald R. Dion Trustee President and Chief Executive
R.M. Bradley & Co., Inc. Officer, R.M. Bradley & Co., Inc.;
73 Tremont Street Director, The New England Council
Boston, MA 02108 and Massachusetts Roundtable;
March 1946 Trustee, North Shore Medical Center;
Director, BJ's Wholesale Club, Inc.
and a corporator of the Eastern
Bank; Trustee, Emmanuel College.
Charles L. Ladner Trustee Senior Vice President and Chief
102 Some Other Place Financial Officer, UGI Corporation
Stevensville, MD 21666 (Public Utility Holding Company)
P.O. Box 858 (retired 1998); Vice President and
Valley Forge, PA 19482 Director for AmeriGas, Inc. (retired
February 1938 1998); Vice President of AmeriGas
Partners, L.P. (until 1997);
Director, EnergyNorth, Inc. (until
1995).
B-8
<PAGE>
Steven R. Pruchansky Trustee (1) Director and President, Mast
4327 Enterprise Avenue Holdings, Inc. (since 1991);
Naples, FL 34104 Director, First Signature Bank &
August 1944 Trust Company (until August 1991);
Director, Mast Realty Trust (until
1994); President, Maxwell Building
Corp. (until 1991).
Richard S. Scipione * Trustee (1) General Counsel, John Hancock Life
John Hancock Place Insurance Company; Director, the
P.O. Box 111 Adviser, John Hancock Funds,
Boston, MA 02117 Signator Investors, Inc., John
August 1937 Hancock Subsidiaries, Inc.,
SAMCorp., NM Capital, The Berkeley
Group, JH Networking Insurance
Agency, Inc.; Insurance Agency, Inc.
(until June 1999), Signature
Services (until January 1997).
Norman H. Smith Trustee Lieutenant General, United States
243 Mt. Oriole Lane Marine Corps; Deputy Chief of Staff
Linden, VA 22642 for Manpower and Reserve Affairs,
March 1933 Headquarters Marine Corps;
Commanding General III Marine
Expeditionary Force/3rd Marine
Division (retired 1991).
John P. Toolan Trustee Director, The Smith Barney Muni Bond
13 Chadwell Place Funds, The Smith Barney Tax-Free
Morristown, NJ 07960 Money Funds, Inc., Vantage Money
September 1930 Market Funds (mutual funds), The
Inefficient-Market Fund, Inc.
(closed-end investment company) and
Smith Barney Trust Company of
Florida; Chairman, Smith Barney
Trust Company (retired December,
1991); Director, Smith Barney, Inc.,
Mutual Management Company and Smith
Barney Advisers, Inc. (investment
advisers) (retired 1991); Senior
Executive Vice President, Director
and member of the Executive
Committee, Smith Barney, Harris
Upham & Co., Incorporated
(investment bankers) (until 1991).
B-9
<PAGE>
---------------
* Trustee may be deemed to be an "interested person" of the Fund as defined in
the Investment Company Act of 1940.
(1) Member of the Executive Committee. The Executive Committee may generally
exercise most of the powers of the Board of Trustees.
(2) A member of the Investment Committee of the Adviser.
Officers
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
---------------- ---------------- --------------------------
<S> <C> <C>
Osbert M. Hood Executive Vice President and Chief Executive Vice President and Chief
101 Huntington Avenue Financial Officer Financial Officer, each of the John
Boston, MA 02199 Hancock Funds; Executive Vice
August 1952 President, Treasurer and Chief
Financial Officer of the Adviser,
the Berkeley Group, John Hancock
Funds, and SAMCorp.; Senior Vice
President, Chief Financial Officer
and Treasurer, Signature Services,
NM Capital; Director IndoCam Japan
Limited; Vice President and Chief
Financial Officer, John Hancock
Life Insurance Company, Retail
Sector (until 1997).
Thomas H. Connors Vice President and Compliance Officer Vice President and Compliance
101 Huntington Avenue Officer, the Adviser; Vice
Boston, MA 02199 President, John Hancock Funds, Inc.
September 1959
Susan S. Newton Vice President, Secretary and Chief Vice President, Secretary and Chief
101 Huntington Avenue Legal Officer Legal Officer the Adviser; John
Boston, MA 02199 Hancock Funds, Signature Services,
March 1950 The Berkeley Group, NM Capital and
SAMCorp; Vice President, Signature
Services (until May 2000).
James J. Stokowski Vice President, Treasurer and Chief Vice President, the Adviser.
101 Huntington Avenue Accounting Officer
Boston, MA 02199
November 1946
Compensation
Total Compensation
Pension or Retirement Received From
Aggregate Compensation Benefits Accrued As Part Fund and Fund Complex
Name and Position With Fund From Fund (1) of Fund Expenses (1)(2)
$ N/A $
B-10
<PAGE>
---------------------------- -------------------------- -------------------------- --------------------------
$ N/A $
---------------------------- -------------------------- -------------------------- --------------------------
$ N/A $
---------------------------- -------------------------- -------------------------- --------------------------
$ N/A $
---------------------------- -------------------------- -------------------------- --------------------------
$ N/A $
---------------------------- -------------------------- -------------------------- --------------------------
$ N/A $
---------------------------- -------------------------- -------------------------- --------------------------
$ N/A $
---------------------------- -------------------------- -------------------------- --------------------------
$ N/A $
---------------------------- -------------------------- -------------------------- --------------------------
$ N/A $
---------------------------- -------------------------- -------------------------- --------------------------
$ N/A $
---------------------------- -------------------------- -------------------------- --------------------------
$ N/A $
---------------------------- -------------------------- -------------------------- --------------------------
$ N/A $
---------------------------- -------------------------- -------------------------- --------------------------
(1) Based on remuneration expected to be paid to the trustees of the fund for
the fiscal year ended December 31, 2000.
(2) The John Hancock funds consist of 67 investment companies.
Trustees and officers of the fund are also directors, trustees and
officers of some or all of the other John Hancock funds.
INVESTMENT ADVISORY AND OTHER SERVICES
[Insert Additional Information (if any) about JHA]
EXPERTS
________________ act as independent auditors for the fund and in this
capacity will audit the fund's annual and semi-annual financial statements and
financial highlights.
CUSTODIAN, TRANSFER AGENT, REGISTRAR AND
DIVIDEND PAYING AGENT
State Street Bank and Trust Company, 225 Franklin Street, Boston MA
02210, serves as custodian for the fund and performs custody, portfolio and fund
accounting services. These services include maintenance of the fund's accounting
records and is responsibility for the determining the net asset value of the
fund.
John Hancock Signature Services, Inc. 1 John Hancock Way, Suite 1000, Boston MA
02217-1000, a wholly owned subsidiary of John Hancock Life Insurance Company, is
the transfer agent, registrar and dividend disbursing agent of the fund, and
performs, certain recordkeeping functions for the fund. The fund pays John
Hancock Signature Services an annual fee of $19.00 for each shareholder account,
plus certain out-of-pocket expenses.
B-11
<PAGE>
PRINCIPAL UNDERWRITER FOLLOWING INITIAL PUBLIC OFFERING
The distributor, John Hancock Funds, Inc., an affiliate of the adviser
and the fund, located at 101 Huntington Avenue, Boston, MA 02199, will act as
general distributor of the shares of the fund during any continuous offering of
the fund's shares following the initial public offering.
BROKERAGE COMMISSIONS
The adviser will seek the most favorable price and execution in the
purchase and sale of portfolio securities of the fund. When two or more of the
John Hancock funds or other investment advisory clients of the adviser want to
buy or sell the same security at the same time, the securities purchased or sold
are allocated by the adviser in a manner believed to be equitable to each. There
may be possible advantages or disadvantages to such transactions with respect to
price or the size of positions readily obtainable or saleable.
In over-the-counter markets, the fund deals with responsible primary
market makers unless a more favorable execution or price is believed to be
obtainable. The fund may buy securities from or sell securities to dealers
acting as principal, except dealers with which its trustees and/or officers are
affiliated.
The fund does not plan to execute any portfolio transactions with, and
therefore will not pay any commissions to, any broker affiliated, directly or
indirectly, with either the fund, the adviser, or the distributor.
Consistent with seeking the most favorable price and execution when
buying or selling portfolio securities, the adviser may give consideration to
the research, statistical, and other services furnished by brokers or dealers to
the adviser for its use, as well as the general attitude toward and support of
investment companies demonstrated by such brokers or dealers. These services
include supplemental investment research, analysis, and reports concerning
issuers, industries, and securities deemed by the adviser to be beneficial to
the fund. In addition, the adviser is authorized to place orders with brokers
who provide supplemental investment and market research and security and
economic analysis, although the use of these brokers may result in a higher
brokerage charge to the fund than the use of brokers selected solely on the
basis of seeking the most favorable price and execution, and although such
research and analysis may be useful to the adviser in connection with its
services to clients other than the fund.
CODE OF ETHICS
In an attempt to avoid potential conflicts of interest relating to
portfolio transactions, the adviser and the distributor have adopted codes of
ethics under Rule 17j-1 under the 1940 Act. These codes of ethics operate to
restrict, and allow the fund to monitor, personal securities trading by
personnel of the adviser and the distributor, and in particular, those who
normally come into possession of information relating to the fund's portfolio
transactions. The codes limit the extent to which personnel may purchase or sell
securities held by the fund. You can review copies of these codes at the SEC's
Public Reference Room, or you can obtain copies without charge through the SEC's
Internet web site (http://www.sec.gov), or for a duplication fee by calling the
SEC's Public Reference Room at 1-202-942-8090, by E-mailing the SEC at
[email protected] or reviewed at the SEC's public reference room, or by writing
the SEC's Public Reference Section, Washington D.C. 20594-0102.
The adviser's direct parent, John Hancock Life Insurance Company, is
the indirect sole shareholder of Signator Investors, Inc., a broker dealer.
Pursuant to procedures determined by the fund's trustees and consistent with the
fund's policy of obtaining best net results, the fund may execute portfolio
transactions with or through Signator Investors, Inc.
B-12
<PAGE>
FINANCIAL STATEMENTS
Not applicable.
INDEPENDENT AUDITORS' REPORT
Not applicable.
B-13
<PAGE>
JOHN HANCOCK VENTURE TECHNOLOGY FUND
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(1) Financial Statements
Part A: Financial Highlights (not applicable).
Part B: Financial Statements (to be filed by amendment).
(2) Exhibits
(a) Declaration of Trust.
(b) By-Laws.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f) Not applicable.
(g)(1) Investment Management Contract between the Registrant
and John Hancock Advisers, Inc.*
(g)(2) Sub-Investment Management Contract by and among the
Registrant, American Fund Advisors, Inc. and John
Hancock Advisers, Inc.*
(h) Distribution Agreement between the Registrant and
John Hancock Funds, Inc.*
(i) Not applicable.
(j)(1) Amendment adding the Registrant to the Amended and
Restated Master Custodian Agreement*
(j)(2) Master Custodian Agreement between certain John
Hancock Funds and State Street Bank and Trust
Company.*
(k)(1) Amendment adding the Registrant to the Master
Transfer Agency and Service Agreement.*
<PAGE>
(k)(2) Master Transfer Agency and Service Agreement between
the Registrant and the John Hancock Funds.*
(k)(3) Accounting and Legal Services Agreement between the
Registrant and John Hancock Advisers, Inc.*
(l) Opinion and Consent of Counsel.*
(m) Not applicable.
(n) Consent of Independent Auditors.*
(o) Not applicable.
(p) Subscription Agreement between the Registrant and
John Hancock Advisers, Inc.*
(r)(1) Code of Ethics for John Hancock Advisers, Inc.
(r)(2) Code of Ethics for American Fund Advisors, Inc.
(s) Power of Attorney.
* To be filed by amendment.
Item 25. Marketing Arrangements: Not Applicable
Item 26. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses expected to be incurred in
connection with the offering described in this Registration Statement:
Registration fees................................................$
Printing.........................................................
Accounting fees and expenses.....................................
Legal fees and expenses..........................................
Miscellaneous....................................................
Total............................................................$
Item 27. Persons Controlled by or under Common Control with Registrant
None.
Item 28. Number of Holders of Securities
As of June 28, 2000:
2
<PAGE>
(1) (2)
Title of Class Number of Record Holders
Common Shares of Beneficial Interest 0
Item 29. Indemnification
Indemnification provisions relating to the Registrant's Trustees,
officers, employees and agents are set forth in Article IV of the Registrant's
Declaration of Trust included as Exhibit (a) herein.
Under section 12 of the Distribution Agreement between the Registrant
and John Hancock Funds, Inc. ("John Hancock Funds"), John Hancock Funds has
agreed to indemnify the Registrant and its Trustees , officers and controlling
persons against claims arising out of certain acts and statements of John
Hancock Funds.
Section 9(a) of the By-Laws of John Hancock Life Insurance Company (the
"Insurance Company") provides, in effect, that the Insurance Company will,
subject to limitations of law, indemnify each present and former director,
officer and employee of the Insurance Company who serves as a Trustee or officer
of the Registrant at the direction or request of the Insurance Company against
litigation expenses and liabilities incurred while acting as such, except that
such indemnification does not cover any expense or liability incurred or imposed
in connection with any matter as to which such person shall be finally
adjudicated not to have acted in good faith in the reasonable belief that his
action was in the best interests of the Insurance Company. In addition, no such
person will be indemnified by the Insurance Company in respect of any liability
or expense incurred in connection with any matter settled without final
adjudication unless such settlement shall have been approved as in the best
interests of the Insurance Company either by vote of the Board of Directors at a
meeting composed of directors who have no interest in the outcome of such vote
or by vote of the policyholders. The Insurance Company may pay expenses incurred
in defending an action or claim in advance of its final disposition, but only
upon receipt of an undertaking by the person indemnified to repay such payment
if he should be determined to be entitled to indemnification.
Article IX of the By-Laws of John Hancock Advisers, Inc. (the
"Adviser") provides as follows:
"Section 9.01. Indemnity. Any person made or threatened to be made a
party to any action, suit, or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or was at any
time since the inception of the Corporation serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, shall be indemnified by
the Corporation against expenses (including attorney's fees), judgment, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and
the liability was not incurred by reason of gross negligence or reckless
disregard of the duties involved in the conduct of his office, and expenses in
connection therewith may be advanced by the Corporation, all to the full extent
authorized by the law."
3
<PAGE>
"Section 9.02. Not Exclusive; Survival of Rights: The indemnification
provided by Section 9.01 shall not be deemed exclusive of any other right to
which those indemnified may be entitled, and shall continue as to a person who
has ceased to be a director, officer, employee or agent and shall inure to the
benefit of the heirs, executors and administrators of such a person."
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "1933 Act") may be permitted to trustees, officers
and controlling persons of the Registrant, pursuant to the Declaration of Trust
and By-Laws (or other organizational documents, as the case may be) of the
Registrant, the Adviser, or the Insurance Company or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
(the "Commission") such indemnification is against public policy as expressed in
the 1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a trustee, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.
Item 30. Business and Other Connections of the Adviser
For information as to the business, profession, vocation or employment
of a substantial nature of each of the officers and directors of the Adviser,
reference is made to Form ADV filed with the Commission (Commission File No.
801-8124) under the Investment Advisers Act of 1940 and incorporated herein by
reference thereto.
Item 31. Location of Accounts and Records
Certain accounts, books and other documents required to be maintained
by Section 31(a) of the 1940 Act and the Rules promulgated thereunder are
maintained by the Adviser, 101 Huntington Avenue, Boston, MA 02199. Records
relating to the duties of the Registrant's custodian are maintained by State
Street Bank and Trust Company, 225 Franklin Street, Boston, Massachusetts 02110,
and the Registrant's transfer agent by John Hancock Signature Services, Inc., 1
John Hancock Way, Suite 1000, Boston, Massachusetts 02217-1000.
Item 32. Management Services
Not applicable.
4
<PAGE>
Item 33. Undertakings
I. The Registrant undertakes to suspend the offering of shares until
the prospectus is amended if (1) subsequent to the effective date of its
registration statement, the net asset value declines more than ten percent from
its net asset value as of the effective date of the registration statement or
(2) the net asset value increases to an amount greater than its net proceeds as
stated in the prospectus.
II. The Registrant undertakes:
(a) To file, during any period in which offers or sales
are being made, a post-effective amendment to the
registration statement:
(1) to include any prospectus required by Section 10(a)(3)
of the Securities Act;
(2) to reflect in the prospectus any facts or events after the
effective date of the registration statement (or the most
recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement; and
(3) to include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
(b) That, for the purposes of determining any liability under the
Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of those securities
at that time shall be deemed to be the initial bona fide
offering thereof.
(c) To remove from registration by meansof a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
III. The Registrant undertakes that:
(a) For purposes of determining any liability under the
Securities Act, the information omitted from the form
of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant
to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this
registration statement as of the time it was declared
effective.
(b) For the purposes of determining any liability under
the Securities Act, each post-effective amendment
that contains a form of prospectus shall be deemed to
be a new registration statement relating to the
securities offered therein, and the offering of such
securities at that time shall be deemed to be the
initial bona fide offering thereof.
5
<PAGE>
IV. The Registrant undertakes to send by first class mail or other means
designed to ensure equally prompt delivery within two business days of
receipt of a written or oral request, the Registrant's Statement of
Additional Information.
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Boston and The Commonwealth of Massachusetts on the
28th day of June, 2000.
JOHN HANCOCK VENTURE TECHNOLOGY FUND
By: ________*_____________________
-
Maureen R. Ford
President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:
<S> <C> <C>
__________*____________________ Trustee and Chairman June 28, 2000
-------------------------------
Stephen L. Brown
___________*___________________ Trustee, Vice Chairman, President June 28, 2000
------------------------------- and Chief Executive Officer
Maureen R. Ford
___________*___________________ Executive Vice President and Chief June 28, 2000
------------------------------- Financial Officer
Osbert M. Hood
/s/ James J. Stokowski Vice President, Tresurer June 28, 2000
------------------------------------ (Chief Accounting Officer)
James J. Stokowski
___________*___________________ Trustee June 28, 2000
-------------------------------
James F. Carlin
___________*___________________ Trustee June 28, 2000
-------------------------------
William H. Cunningham
7
<PAGE>
_________*_____________________ Trustee June 28, 2000
-------------------------------
Ronald R. Dion
___________*___________________ Trustee June 28, 2000
-------------------------------
Charles L. Ladner
___________*___________________ Trustee June 28, 2000
-------------------------------
Steven R. Pruchansky
___________*___________________ Trustee June 28, 2000
-------------------------------
Richard S. Scipione
___________*___________________ Trustee June 28, 2000
-------------------------------
Norman H. Smith
____________*__________________ Trustee June 28, 2000
-------------------------------
John P. Toolan
* By: /s/ Susan S. Newton June 28, 2000
------------------------------------
Susan S. Newton
Attorney-in-fact
8
<PAGE>
EXHIBIT INDEX
Exhibit
(a) Declaration of Trust.
(b) By-Laws.
(r)(1) Code of Ethics for John Hancock Advisors, Inc.
(r)(2) Code of Ethics for American Fund Advisors, Inc.
(s) Power of Attorney.
</TABLE>
9
