<PAGE> 1
JOHN HANCOCK FUNDS
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
GROWTH
AND INCOME
FUND
ANNUAL REPORT
August 31, 1995
<PAGE> 2
TRUSTEES
Edward J. Boudreau, Jr.
James F. Carlin*
William H. Cunningham*
Charles L. Ladner*
Leo E. Linbeck*
Patricia P. McCarter*
Steven R. Pruchansky*
Lt. Gen. Norman H. Smith, USMC (Ret.)*
John P. Toolan*
*Members of the Audit Committee
OFFICERS
Edward J. Boudreau, Jr.
Chairman and Chief Executive Officer
Robert G. Freedman
Vice Chairman and
Chief Investment Officer
Anne C. Hodsdon
President
Thomas H. Drohan
Senior Vice President and Secretary
James B. Little
Senior Vice President and
Chief Financial Officer
Michael P. DiCarlo
Senior Vice President
Edgar Larson
Senior Vice President
B. J. Willingham
Senior Vice President
John A. Morin
Vice President
Susan S. Newton
Vice President and Compliance Officer
James J. Stokowski
Vice President and Treasurer
CUSTODIAN
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
TRANSFER AGENT
John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
LEGAL COUNSEL
Hale and Dorr
60 State Street
Boston, Massachusetts 02109
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116
CHAIRMAN'S MESSAGE
[A 1 1/4" x 1" photo of Edward J. Boudreau Jr., Chairman and Chief Executive
Officer, flush right, next to second paragraph.]
DEAR FELLOW SHAREHOLDERS:
Investors around the world have been watching Wall Street in awe for the better
part of 1995. Through August, the Dow Jones Industrial Average has reached
record highs and has grown, along with the Standard & Poor's 500-Stock Index, by
more than 20%. Investors who stayed in the market after a disappointing 1994
have been rewarded.
On another street, Pennsylvania Avenue, one of the hot topics many people are
watching is Medicare reform. While the Congressional rhetoric is just beginning
to heat up, today's Medicare debate should serve as another wake-up call to all
Americans about the need to have a financial plan and to save for retirement.
Whether or not the government changes the way health-care benefits are allotted
to senior citizens, the message is clear: your future security and well-being
lies in your own hands -- not Uncle Sam's.
We know you've heard it a hundred times. Pick up almost any financial
periodical today, and you'll see cover stories on retirement. Many of them will
perhaps scare you or make you think that the task of saving for retirement is
just too daunting. But take heart. We don't believe that and neither do many
financial experts.
Yet retirement planning is not to be taken lightly. To live the way you want
to -- the way you deserve to after all those years of hard work -- you need to
plan and save now, on a regular basis, no matter what your other costs, no
matter how small the amount, no matter what your current age. It may be easier
if you start earlier, but it's never too late.
Building a secure nest egg is indeed doable. Talk to your financial adviser
about establishing your retirement planning roadmap, if you haven't already. And
educate yourself by reading some of the many articles about how to save for
retirement. Take control of your future by saving today. That way, when it comes
time for retirement, you shouldn't have to think about any street but Easy
Street.
Sincerely,
/s/ EDWARD J. BOUDREAU, JR.
- ---------------------------
EDWARD J. BOUDREAU, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER
2
<PAGE> 3
BY BRIAN GROVE FOR THE PORTFOLIO MANAGEMENT TEAM
JOHN HANCOCK
GROWTH AND INCOME FUND
STOCKS SCORE BIG GAINS; STABLE RATES AND MODERATE GROWTH
BODE WELL FOR REST OF 1995 AND BEYOND
After striking out in 1994, stocks have been on a winning streak this year. A
potent combination of falling interest rates, moderate economic growth, tame
inflation and surprisingly strong corporate earnings has sent stock prices out
of the ballpark. From the start of the year through the end of August, the
Standard & Poor's 500-Stock Index banged out a 22% return and the Dow Jones
Industrial Average, a 20% return.
This stock market surge in the second half of the Fund's fiscal year provided
just about all of the Fund's solid, double-digit performance. For the year ended
August 31, 1995, the Fund's Class A and Class B shares had total returns of
19.22% and 18.41%, respectively, at net asset value. Those returns outpaced the
average growth and income fund's return of 16.86% for the same period, according
to Lipper Analytical Services.(1)
[A 2 3/4" x 2 1/4" photo of Brian Grove at bottom center. Caption reads: "Brian
Grove, Portfolio Manager."]
NEW STRATEGY FINISHES FIRST SEASON
With the Fund's new investment strategy now in place for just over one year,
it's a good idea to review our approach. To us, one of the most important
indicators of a company's potential is its free cash flow, that is the amount of
money left over after all operating and capital expenses have been paid.
Companies can use free cash flow to invest in the business, buy back stock and
raise dividends, among other things. We target companies with a
price-to-free-cash-flow ratio of 10 or less. If the ratio is 10, for example, it
means the company is generating enough free cash to buy
[CAPTION]
"...STOCKS HAVE BEEN ON A WINNING STREAK THIS YEAR."
3
<PAGE> 4
John Hancock Funds - Growth and Income Fund
[Chart with heading "Top Five Common Stock Holdings" at top of left hand column.
The chart lists five holdings: 1) Northrop Grumman 6.2% 2) McDonnell Douglas
5.5% 3) Eastman Kodak 4.7% 4) J.P. Morgan & Co. 4.3% 5) Hibernia 4.3%. A
footnote below reads "As a percentage of net assets on August 31, 1995."]
back all of their outstanding stock in 10 years. Equally important, we seek
companies that put their cash to work the right way, enhancing shareholder
value.
HOME RUNS FOR BANKS AND AEROSPACE
In general, we strive to keep the Fund's sector weightings roughly the same as
those of the Standard & Poor's 500-Stock Index. There are times, however, when
we find an abundance of companies with strong free cash flow within a particular
industry. Aerospace companies and banks, which were among the Fund's top gainers
during the period, are perfect examples.
At 21% of net assets, aerospace companies make up the Fund's largest sector
concentration. Northrop Grumman and McDonnell Douglas have been our biggest and
best performing holdings -- not only in the aerospace sector, but in the Fund.
Though demand from airlines and the Pentagon has fallen sharply, these companies
have managed to shrink costs faster than revenues are shrinking. Northrop has
been using its free cash to pay down debt from its acquisition of Grumman two
years ago. McDonnell Douglas, on the other hand, has been aggressively buying
back shares. The net result for both companies has been growing earnings and
rising stock prices. In the past year, McDonnell Douglas is up more than 100%
and Northrop, more than 50%.
Bank stocks, which stand at 14% of net assets, are the Fund's second largest
sector weighting. The group has rallied strongly this year on expectations of
falling interest rates and continued industry consolidation. Our biggest winner
was Midlantic Corp. It had a price-to-free-cash-flow ratio of 9, explosive
earnings and one of the strongest franchises in New Jersey. In July,
Pittsburgh-based PNC Corp. made an offer to buy Midlantic at a 35% premium to
its market value. That, coupled with the strong price gains before the
acquisition, gave us nearly a 100% return on the stock. By the end of July, we
had sold our entire position to lock in profits. Another favorite holding is
Hibernia Corp. in New Orleans. The bank has top-notch management, impressive
earnings and lots of free cash. What's more, it's a likely acquisition target.
Of course, we haven't hit home runs with all of our holdings. There have been
some disappointments such as Unisys. Like the aerospace companies, this
main-frame computer maker is facing declining demand, primarily due to the shift
toward smaller computers. Management had been successful in keeping costs
falling faster
[Table entitled "Scorecard" at bottom of left hand column. The header for the
left column is "Investments"; the header for the right column is "Recent
performance ... and what's behind the numbers. The first listing is McDonnell
Douglas followed by an up arrow and the phrase "Stock buybacks boost prices."
The second listing is Midlantic Bank followed by an up arrow and the phrase
"Takeover offer by PNC." The third listing is Unisys followed by a down arrow
and the phrase "Weakening demand in Europe." Footnote below reads: "See
"Schedule of Investments." Investment holdings are subject to change."]
[CAPTION]
"...AEROSPACE COMPANIES MAKE UP THE FUND'S LARGEST SECTOR CONCENTRATION."
4
<PAGE> 5
John Hancock Funds - Growth and Income Fund
[Bar chart with heading "Fund Performance" at top of left hand column. Under the
heading is the footnote: "For the year ended August 31, 1995." The chart is
scaled in increments of 5% from bottom to top, with 20% at the top and 0% at the
bottom. Within the chart there are three solid bars. The first represents the
19.22% total return for the John Hancock Growth and Income Fund: Class A. The
second represents the 18.41% total return for the John Hancock Growth and Income
Fund: Class B. The third represents the 16.86% total return for the average
growth and income fund. A footnote below reads: "The total returns for John
Hancock Growth and Income Fund are at net asset value with all distributions
reinvested. The average growth and income fund is tracked by Lipper Analytical
Services. (1) See following page for historical performance information."]
than revenues. But recent weakness in Europe has caused revenues to drop off
significantly. Believing the situation is temporary, management hasn't responded
with cost-cutting measures. It's too early to tell whether that's the right
approach. Until it becomes more clear, though, we're taking a more conservative
stance. We've shifted our Unisys holdings from common stock to convertible
preferred stock -- where there's less downside risk and we're getting paid a 9%
yield.
A LOOK AHEAD
No matter where the market is headed, we'll keep our focus on companies with
strong free cash flow. In particular, we'll continue to build on a couple of
themes. As we mentioned in the last report, we're looking for companies like
Coca-Cola that derive a significant portion of their revenues from overseas.
With many foreign economies growing faster than ours, these companies are
profiting handsomely. Of course, the weak dollar has helped, making U.S.
products more attractive to foreign buyers. But even if the dollar does
strengthen, productivity and quality gains should keep American goods
competitive abroad.
We're also excited about consumer staple companies. After posting
double-digit earnings in the past decade, many of these companies are having a
difficult time maintaining that growth rate. We believe that's serving as a
catalyst for change, forcing them to cut costs and restructure their business
lines. Those with ample free cash are in the best position to do just that. A
good example is Eastman Kodak, where new CEO George Fisher has used cash to
refocus the company on its core photography and imaging businesses and has
aggressively slashed costs.
With the Dow Jones Industrial Average quickly approaching the 5000 mark, many
are wondering whether the market's winning streak is nearing an end. Certainly,
the stock market may experience a pullback, but we're optimistic about the rest
of 1995. In our view, the powerful mix of flat to declining interest rates,
moderate growth and strong earnings isn't changing any time soon. What's more,
the supply/demand situation in the market is very favorable. Investors,
particularly foreign investors, are underweighted in U.S. stocks right now. That
pent-up demand should keep the market moving higher.
- --------------------------------------------------------------------------------
(1) Figures from Lipper Analytical Services include reinvested dividends and do
not take into account sales charges. Actual load-adjusted performance is
lower.
[CAPTION]
"...WE'LL KEEP OUR FOCUS ON COMPANIES WITH STRONG FREE CASH FLOW."
5
<PAGE> 6
A LOOK AT PERFORMANCE
The tables on the right show the cumulative total returns and the average annual
total returns for John Hancock Growth and Income Fund. Total return is a
performance measure that equals the sum of all income and capital gains
dividends, assuming reinvestment of these distributions, and the change in the
price of the Fund's shares, expressed as a percentage of the Fund's shares.
Performance figures include the maximum applicable sales charge of 5% for Class
A shares. The effect of the maximum contingent deferred sales charge for Class B
shares (maximum 5% and declining to 0% over six years) is included in Class B
performance. Performance is affected by a 12b-1 plan, which commenced on January
1, 1990 and August 22, 1994 for Class A and Class B shares, respectively.
Remember that all figures represent past performance and are no guarantee of how
the Fund will perform in the future. Also, keep in mind that the total return
and share price of the Fund's investments will fluctuate. As a result, your
Fund's shares may be worth more or less than their original cost depending on
when you sell them.
Note: Participant-directed defined-contribution plans with at least 100 eligible
employees at inception of the Fund account may purchase Class A shares without
an initial sales charge as of March 15, 1995. If those shares are redeemed,
however, during the year following the calendar year end during which they were
purchased, a contingent deferred sales charge will be assessed.
CUMULATIVE TAOTAL RETURNS
FOR THE PERIOD ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
ONE FIVE MOST RECENT
YEAR YEARS TEN YEARS
---- ----- -----------
<S> <C> <C> <C>
Growth and Income Fund: Class A 14.44% 51.23% 163.74%
Growth and Income Fund: Class B 14.66% 34.89%(1) N/A
</TABLE>
AVEGARE ANNUAL TOTAL RETURNS
FOR THE PERIOD ENDED JUNE 30, 1995
<TABLE>
<CAPTION>
ONE FIVE MOST RECENT
YEAR YEARS TEN YEARS
---- ----- -----------
<S> <C> <C> <C>
Growth and Income Fund: Class A 14.44% 8.62% 10.18%
Growth and Income Fund: Class B 14.66% 8.06%(1) N/A
</TABLE>
YIELDS
AS OF AUGUST 31, 1995
<TABLE>
<CAPTION>
SEC 30-DAY
YIELD
----------
<S> <C>
Growth and Income Fund: Class A 1.62%
Growth and Income Fund: Class B 1.06%
</TABLE>
NOTES TO PERFORMANCE
(1) Class B shares started on August 22, 1991.
6
<PAGE> 7
WHAT HAPPENED TO A $10,000 INVESTMENT...
The charts on the right show how much a $10,000 investment in the John Hancock
Growth and Income Fund would be worth on August 31, 1995, assuming you had been
invested for the past ten years or since the day each class of shares started
and had reinvested all distributions. For comparison, we've shown the same
$10,000 investment in the Standard & Poor's 500 Stock Index -- an unmanaged
index that includes 500 widely traded common stocks and is often used as a
measure of stock market performance.
[John Hancock Growth and Income Fund
Class A shares
Line chart with the heading John Hancock Growth and Income Fund: Class A,
representing the growth of a hypothetical $10,000 investment over the most
recent ten years. Within the chart are three lines.
The first line represents the value of the Standard & Poor's 500 Stock Index and
is equal to $42,383 as of August 31, 1995. The second line represents the value
of the hypothetical $10,000 investment made in the John Hancock Growth and
Income Fund on August 31, 1985, before sales charge, and is equal to $29,636 as
of August 31, 1995. The third line represents the John Hancock Growth and Income
Fund after sales charge and is equal to $28,150 as of August 31, 1995.
John Hancock Growth and Income Fund
Class B shares
Line chart with the heading John Hancock Growth and Income Fund: Class B,
representing the growth of a hypothetical $10,000 investment over the life of
the fund. Within the chart are three lines.
The first line represents the value of the Standard & Poor's 500 Stock Index and
is equal to $15,916 as of August 31, 1995. The second line represents the value
of the hypothetical $10,000 investment made in the John Hancock Growth and
Income Fund on August 22, 1991, before sales charge, and is equal to $14,480 as
of August 31, 1995. The third line represents the John Hancock Growth and Income
Fund after sales charge and is equal to $14,280 as of August 31, 1995.]
7
<PAGE> 8
FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
THE STATEMENT OF ASSETS AND LIABILITIES IS THE FUND'S BALANCE SHEET AND SHOWS
THE VALUE OF WHAT THE FUND OWNS, IS DUE AND OWES ON AUGUST 31, 1995. YOU'LL ALSO
FIND THE NET ASSET VALUE PER SHARE AS OF THAT DATE.
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Common stocks (cost - $182,642,006)........................... $230,021,750
Convertible preferred stocks (cost - $12,034,749)............. 11,582,875
Short term investments (cost - $1,150,000).................... 1,150,000
Corporate savings account..................................... 55,000
------------
242,809,625
Dividends receivable........................................... 733,975
Receivable for investments sold................................ 2,421,252
Receivable for shares sold..................................... 51,770
Miscellaneous assets........................................... 23,709
------------
Total Assets................................. 246,040,331
------------------------------------------------------------
LIABILITIES:
Payable for investments purchased.............................. 818,580
Payable for shares repurchased................................. 35,228
Payable to John Hancock Advisers, Inc. and
affiliates - Note B........................................... 196,211
Accounts payable and accrued expenses.......................... 84,844
------------
Total Liabilities............................ 1,134,863
------------------------------------------------------------
NET ASSETS:
Capital paid-in................................................ 196,913,679
Accumulated net realized gain on investments................... 560,287
Net unrealized appreciation of investments..................... 46,927,870
Undistributed net investment income............................ 503,632
------------
Net Assets................................... $244,905,468
============================================================
NET ASSET VALUE PER SHARE:
(Based on net asset values and shares of beneficial
interest outstanding - unlimited number of shares
authorized with $0.01 per share par value, respectively)
Class A - $130,182,682/9,726,172............................... $ 13.38
==============================================================================
Class B - $114,722,786/8,554,156............................... $ 13.41
==============================================================================
MAXIMUM OFFERING PRICE PER SHARE*
Class A - ($13.38 x 105.26%)................................... $ 14.08
==============================================================================
<FN>
* On single retail sales of less than $50,000. On sales of $50,000 or more and
on group sales the offering price is reduced.
</TABLE>
THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED AND
EXPENSES INCURRED IN OPERATING THE FUND. IT ALSO SHOWS NET GAINS (LOSSES) FOR
THE PERIOD STATED.
<TABLE>
STATEMENT OF OPERATIONS
Year ended August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends...................................................... $ 7,063,204
Interest....................................................... 129,942
-----------
7,193,146
-----------
Expenses:
Investment management fee - Note B............................ 1,441,081
Distribution/service fee - Note B
Class A..................................................... 301,206
Class B..................................................... 1,081,229
Transfer agent fee............................................ 528,510
Custodian fee................................................. 118,058
Registration and filing fees.................................. 85,895
Auditing fee.................................................. 75,520
Legal fees.................................................... 38,603
Printing...................................................... 37,563
Trustees' fees................................................ 35,634
Administration fee............................................ 30,818
Advisory Board Fee............................................ 19,569
Miscellaneous................................................. 11,144
-----------
Total Expenses............................... 3,804,830
------------------------------------------------------------
Net Investment Income........................ 3,388,316
------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments sold.......................... 6,147,562
Change in net unrealized appreciation/depreciation
of investments................................................ 30,850,499
-----------
Net Realized and Unrealized
Gain on Investments.......................... 36,998,061
------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations.................... $40,386,377
============================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 9
FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED AUGUST 31,
---------------------------
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income.............................................................................. $ 3,388,316 $ 5,248,852
Net realized gain (loss) on investments sold....................................................... 6,147,562 (4,108,702)
Change in net unrealized appreciation/depreciation of investments.................................. 30,850,499 (6,227,126)
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations................................... 40,386,377 (5,086,976)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income:
Class A - ($0.2026 and $0.3723 per share, respectively)........................................... (2,080,993) (3,841,209)
Class B - ($0.1178 and $0.2857 per share, respectively)........................................... (1,113,907) (2,125,768)
------------ ------------
Total Distributions to Shareholders............................................................. (3,194,900) (5,966,977)
------------ ------------
FROM FUND SHARE TRANSACTIONS -- NET*................................................................. (27,471,362) 65,449,506
------------ ------------
NET ASSETS:
Beginning of period................................................................................ 235,185,353 180,789,800
------------ ------------
End of period (including undistributed net investment income of $503,632 and $310,216,
respectively).................................................................................... $244,905,468 $235,185,353
============ ============
<FN>
* ANALYSIS OF FUND SHARE TRANSACTIONS:
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------------------------------
1995 1994
-----------------------------------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold..................................................... 1,688,091 $19,652,565 2,589,934 $30,320,622
Shares issued to shareholders in reinvestment of distributions.. 149,026 1,724,908 268,525 3,107,249
--------- ----------- ---------- -----------
1,837,117 21,377,473 2,858,459 33,427,871
Less shares repurchased......................................... (2,719,043) (31,913,858) (1,838,450) (21,316,096)
--------- ----------- ---------- -----------
Net increase (decrease)......................................... (881,926) ($10,536,385) 1,020,009 $12,111,775
========= =========== ========== ===========
CLASS B
Shares sold..................................................... 1,972,798 $23,053,675 4,698,506 $55,098,942
Shares issued to shareholders in reinvestment of distributions.. 80,431 936,397 152,463 1,763,746
Fund shares issued for the net assets of Transamerica
Special Blue Chip Fund - Note D................................. -- -- 2,382,863 26,592,756
--------- ----------- ---------- -----------
2,053,229 23,990,072 7,233,832 83,455,444
Less shares repurchased......................................... (3,464,943) (40,925,049) (2,642,211) (30,117,713)
--------- ----------- ---------- -----------
Net increase (decrease)......................................... (1,411,714) ($16,934,977) 4,591,621 $53,337,731
========= =========== ========== ===========
</TABLE>
THE STATEMENT OF CHANGES IN NET ASSETS SHOWS HOW THE VALUE OF THE FUND'S NET
ASSETS HAS CHANGED SINCE THE END OF THE PREVIOUS PERIOD. THE DIFFERENCE REFLECTS
EARNINGS LESS EXPENSES, ANY INVESTMENT GAINS AND LOSSES, DISTRIBUTIONS PAID TO
SHAREHOLDERS, AND ANY INCREASE OR DECREASE IN MONEY SHAREHOLDERS INVESTED IN THE
FUND. THE FOOTNOTE ILLUSTRATES THE NUMBER OF FUND SHARES SOLD, REINVESTED AND
REDEEMED DURING THE LAST TWO PERIODS, ALONG WITH THE CORRESPONDING DOLLAR
VALUES.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period indicated: investment returns, key ratios and supplemental data are as
follows:
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED AUGUST 31,
----------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- ------- -------
<S> <C> <C> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period............................ $ 11.42 $ 12.08 $ 12.43 $ 11.77 $ 9.87
-------- -------- -------- ------- -------
Net Investment Income........................................... 0.21(a) 0.32(a) 0.40(a) 0.32(a) 0.20
Net Realized and Unrealized Gain (Loss) on Investments.......... 1.95 (0.61) 1.12 0.89 2.07
-------- -------- -------- ------- -------
Total from Investment Operations............................... 2.16 (0.29) 1.52 1.21 2.27
-------- -------- -------- ------- -------
Less Distributions:
Dividends from Net Investment Income........................... (0.20) (0.37) (0.42) (0.25) (0.19)
Distributions from Net Realized Gain on Investments Sold....... -- -- (1.45) (0.30) (0.18)
-------- -------- -------- ------- -------
Total Distributions.......................................... (0.20) (0.37) (1.87) (0.55) (0.37)
-------- -------- -------- ------- -------
Net Asset Value, End of Period.................................. $ 13.38 $ 11.42 $ 12.08 $ 12.43 $ 11.77
======== ======== ======== ======= =======
Total Investment Return at Net Asset Value..................... . 19.22% (2.39)% 13.64% 10.47% 23.80%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)....................... $130,183 $121,160 $115,780 $89,682 $77,461
Ratio of Expenses to Average Net Assets......................... 1.30% 1.31% 1.29% 1.34% 1.38%
Ratio of Net Investment Income to Average Net Assets ........... 1.82% 2.82% 3.43% 2.75% 1.90%
Portfolio Turnover Rate ........................................ 99% 195% 107% 119% 70%
</TABLE>
THE FINANCIAL HIGHLIGHTS SUMMARIZES THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIOD INDICATED: NET INVESTMENT INCOME, GAINS (LOSSES),
DIVIDENDS AND TOTAL INVESTMENT RETURN OF THE FUND. IT SHOWS HOW THE FUND'S NET
ASSET VALUE FOR A SHARE HAS CHANGED SINCE THE END OF THE PREVIOUS PERIOD.
ADDITIONALLY, IMPORTANT RELATIONSHIPS BETWEEN SOME ITEMS PRESENTED IN THE
FINANCIAL STATEMENTS ARE EXPRESSED IN RATIO FORM.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 11
FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PERIOD FROM
YEAR ENDED AUGUST 31, AUGUST 22, 1991
--------------------------------------------- TO AUGUST 31,
1995 1994 1993 1992 1991
-------- -------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
CLASS B
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period........................ $ 11.44 $ 12.10 $ 12.44 $ 11.77 $ 11.52
-------- -------- ------- ------- -------
Net Investment Income....................................... 0.13(a) 0.24(a) 0.30(a) 0.23(a) --
Net Realized and Unrealized Gain (Loss) on Investments...... 1.96 (0.61) 1.12 0.89 0.25
-------- -------- ------- ------- -------
Total from Investment Operations........................... 2.09 (0.37) 1.42 1.12 0.25
-------- -------- ------- ------- -------
Less Distributions
Dividends from Net Investment Income....................... (0.12) (0.29) (0.31) (0.15) --
Distributions from Net Realized Gain on Investments Sold... -- -- (1.45) (0.30) --
-------- -------- ------- ------- -------
Total Distributions...................................... (0.12) (0.29) (1.76) (0.45) --
-------- -------- ------- ------- -------
Net Asset Value, End of Period.............................. $ 13.41 $ 11.44 $ 12.10 $ 12.44 $ 11.77
======== ======== ======= ======= =======
Total Investment Return at Net Asset Value.................. 18.41% (3.11)% 12.64% 9.67% 2.17%(b)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)................... $114,723 $114,025 $65,010 $29,826 $ 7,690
Ratio of Expenses to Average Net Assets..................... 2.03% 2.06% 2.19% 2.07% 2.19%*
Ratio of Net Investment Income to Average Net Assets ....... 1.09% 2.07% 2.53% 2.02% 1.46%*
Portfolio Turnover Rate..................................... 99% 195% 107% 119% 70%
<FN>
* On an annualized basis.
(a) On average month end shares outstanding.
(b) Not annualized.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 12
FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY THE
GROWTH AND INCOME FUND ON AUGUST 31, 1995. IT'S DIVIDED INTO TWO MAIN
CATEGORIES: COMMON STOCKS AND CONVERTIBLE PREFERRED STOCKS. THE INVESTMENTS ARE
FURTHER BROKEN DOWN BY INDUSTRY GROUPS. SHORT-TERM INVESTMENTS, WHICH REPRESENT
THE FUND'S "CASH" POSITION, ARE LISTED LAST.
<TABLE>
SCHEDULE OF INVESTMENTS
August 31, 1995
- --------------------------------------------------------------------------------
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----------
<S> <C> <C>
COMMON STOCKS
AEROSPACE (20.75%)
Gencorp, Inc. ............................. 325,000* $ 3,859,375
General Dynamics Corp. .................... 100,000* 5,262,500
McDonnell Douglas Corp. ................... 168,000* 13,482,000
Northrop Grumman Corp. .................... 250,000 15,218,750
Rohr Industries, Inc.** ................... 175,000 2,712,500
Thiokol Corp. ............................. 80,000* 2,790,000
United Technologies Corp. ................. 90,000 7,503,750
-----------
50,828,875
-----------
BANKS (14.33%)
AmSouth Bancorporation .................... 100,000* 3,737,500
Bankers Trust New York Corp. .............. 100,000* 6,887,500
Hibernia Corp. (Class A) .................. 1,050,000 10,500,000
J.P. Morgan & Co., Inc. ................... 145,000 10,566,875
Signet Banking Corp. ...................... 130,000* 3,396,250
-----------
35,088,125
-----------
BEVERAGES (2.10%)
Coca-Cola Co. ............................. 80,000 5,140,000
-----------
CHEMICALS (1.66%)
Monsanto Co. .............................. 43,000* 4,079,625
-----------
DIVERSIFIED OPERATIONS (5.92%)
AlliedSignal, Inc. ........................ 100,000 4,437,500
TRW, Inc. ................................. 77,000 5,996,375
Warner-Lambert Co. ........................ 45,000* 4,066,875
-----------
14,500,750
-----------
DRUGS (4.95%)
Pfizer, Inc. .............................. 132,000 6,517,500
Schering-Plough Corp. ..................... 120,000 5,595,000
-----------
12,112,500
-----------
ELECTRONICS (1.71%)
Aerovox, Inc.** ........................... 75,000* 571,875
Westinghouse Electric Corp. ............... 265,000* 3,610,625
-----------
4,182,500
-----------
FINANCE (3.59%)
Great Western Financial Corp. ............. 145,000* 3,389,375
Student Loan Marketing Association ........ 100,000 5,412,500
-----------
8,801,875
-----------
FOODS (6.74%)
CPC International, Inc. ................... 70,000 $ 4,401,250
Fleming Cos., Inc. ........................ 115,000* 3,349,375
Heinz (H.J.) Co. .......................... 100,000 4,237,500
Quaker Oats Co. ........................... 130,000* 4,517,500
-----------
16,505,625
-----------
INSURANCE (1.81%)
Aetna Life & Casualty Co. ................. 65,000* 4,436,250
-----------
LEISURE & RECREATION (2.29%)
Walt Disney Co. ........................... 100,000 5,612,500
-----------
MACHINERY (1.41%)
NACCO Industries, Inc. (Class A) .......... 60,000* 3,450,000
-----------
MEDICAL/DENTAL (3.53%)
Bausch & Lomb, Inc. ....................... 100,000* 3,975,000
Baxter International, Inc. ................ 120,000* 4,680,000
-----------
8,655,000
-----------
OIL & GAS (5.53%)
Gulf Canada Resources, Ltd.** ............. 1,000,000* 4,687,500
Occidental Petroleum Corp. ................ 185,000* 4,023,750
Seagull Energy Corp.** .................... 240,000* 4,830,000
-----------
13,541,250
-----------
PAPER (2.09%)
Kimberly-Clark Corp. ...................... 80,000* 5,110,000
-----------
PHOTO EQUIPMENT (4.71%)
Eastman Kodak Co. ......................... 200,000 11,525,000
-----------
PUBLISHING (5.07%)
Readers Digest Association, Inc. ..........
(Class B) ................................ 60,000* 2,520,000
Time Warner, Inc. ......................... 235,000 9,899,375
-----------
12,419,375
-----------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 13
FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
RETAIL (0.88%)
Federated Department Stores, Inc.** ...... 80,000 $ 2,160,000
------------
TEXTILES (1.07%)
Shaw Industries, Inc. .................... 175,000* 2,625,000
------------
TOBACCO (3.78%)
Philip Morris Cos., Inc. ................. 80,000 5,970,000
RJR Nabisco Holdings Corp. ............... 115,000* 3,277,500
------------
9,247,500
------------
TOTAL COMMON STOCKS
(Cost $182,642,006) ............ (93.92)% 230,021,750
---------- ------------
CONVERTIBLE PREFERRED STOCKS
COMPUTERS (0.95%)
Unisys Corp., $3.75, Ser A ............... 59,000* 2,337,875
------------
INSURANCE (1.19%)
American General Corp., $3.00, Ser A ..... 55,000* 2,915,000
------------
TOBACCO (2.59%)
RJR Nabisco Holdings, $0.6012,
Depositary Shares, Ser C ................ 1,055,000 6,330,000
------------
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $12,034,749) (4.73)% 11,582,875
---------- ------------
</TABLE>
<TABLE>
<CAPTION>
INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000'S OMITTED) VALUE
- ------------------- -------- --------------- ------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
Joint Repurchase Agreement (0.47%)
Investment in a joint repurchase
agreement transaction with UBS
Securities, Inc. - Dated 08-31-95,
Due 09-01-95 (secured by U.S.
Treasury Bonds 14.00% due 11-15-11,
12.75% due 11-15-10, 12.50%
due 08-15-14, U.S. Treasury Notes
7.25% due 11-30-96, 6.25%
due 08-31-96, 5.125%
due 12-31-98, 4.375%
due 08-15-96, and U.S. Treasury
Bill due 05-30-96) - Note A ........ 5.800% $1,150 $ 1,150,000
------------
Corporate Savings Account (0.02%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 3.00%.................. 55,000
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $1,205,000) (0.49)% 1,205,000
------ ------------
TOTAL INVESTMENTS (99.14)% $242,809,625
====== ============
</TABLE>
* Securities, other than short-term investments, newly added to the
portfolio during the year ended August 31, 1995.
** Non-income producing security.
The percentage shown for each investment category is the total value of that
category as a percentage of net assets of the fund.
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
NOTE A --
ACCOUNTING POLICIES
John Hancock Investment Trust, (the "Trust") is a diversified,open-end
management investment company, registered under the Investment Company Act of
1940. John Hancock Growth and Income Fund (the "Fund") is the only series of the
Trust presently issuing shares. The Trustees may authorize the creation of
additional Funds from time to time to satisfy various investment objectives.
Effective December 22, 1994 (see Note B), the Trust and Fund changed names by
replacing the word Transamerica with John Hancock.
The Trustees have authorized the issuance of two classes of the Fund,
designated as Class A and Class B shares. The shares of each class represent an
interest in the same portfolio of investments of the Fund and have equal rights
to voting, redemptions, dividends and liquidation, except that certain expenses,
subject to the approval of the Trustees, may be applied differently to each
class of shares in accordance with current regulations of the Securities and
Exchange Commission and the Internal Revenue Service. Shareholders of a class
which bears distribution/service expenses under terms of a distribution plan,
have exclusive voting rights regarding such distribution plan. Class A shares
are subject to an initial sales charge of up to 5.00% and a 12b-1 distribution
plan. Prior to May 15, 1995, the maximum sales charge was 5.75%. Class B shares
are subject to a contingent deferred sales charge and a separate 12b-1
distribution plan. Significant accounting policies of the Fund are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio are valued on the
basis of market quotations, valuations provided by independent pricing services
or, at fair value as determined in good faith in accordance with procedures
approved by the Trustees. Short-term debt investments maturing within 60 days
are valued at amortized cost which approximates market value.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other registered
investment companies having a management contract with John Hancock Advisers,
Inc. (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial Group
may participate in a joint repurchase agreement. Aggregate cash balances are
invested in one or more repurchase agreements, whose underlying securities are
obligations of the U.S. government and/or its agencies. The Fund's custodian
bank receives delivery of the underlying securities for the joint account on the
Fund's behalf. The Adviser is responsible for ensuring that the agreement is
fully collateralized at all times.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of the date of
purchase, sale or maturity. Net realized gains and losses on sales of
investments are determined on the identified cost basis.
FEDERAL INCOME TAXES The Fund's policy is to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies and
to distribute all of its taxable income, including any net realized gain on
investment, to its shareholders. Therefore, no federal income tax provision is
required. For federal income tax purposes,the Fund has $203,000 of capital loss
carryforwards available, to the extent provided by regulations, to offset future
net realized capital gains. If such carryforwards are used by the Fund, no
capital gain distribution will be made. The carryforwards expire as follows:
August 31, 1996 -- $152,000, and August 31, 1998 -- $51,000.
DIVIDENDS, DISTRIBUTIONS AND INTEREST Dividend income on investment securities
is recorded on the ex-dividend date. Interest income on investment securities is
recorded on the accrual basis. Foreign income may be subject to foreign
withholding taxes which are accrued as applicable.
The Fund records all distributions to shareholders from net investment income
and realized gains on the ex-dividend date. Such distributions are determined in
conformity with income tax regulations, which may differ from generally accepted
accounting principles. Dividends paid by the Fund with respect to each class of
shares will be calculated in the same manner, and at the same time and will be
in the same amount, except for the effect of expenses that may be applied
differently to each class as explained previously.
EXPENSES The majority of the expenses of the Trust are directly identifiable to
an individual Fund. Expenses which are not readily identifiable to a specific
Fund are allocated in such manner as deemed
14
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
equitable, taking into consideration, among other things, the nature and type of
expense and the relative sizes of the Funds.
CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains
(losses) are determined at the Fund level and allocated daily to each class of
shares based on the appropriate net assets of the respective classes.
Distribution/service fees if any, are calculated daily at the class level based
on the appropriate net assets of each class and the specific expense rate(s)
applicable to each class.
NOTE B --
MANAGEMENT FEE AND TRANSACTIONS WITH
AFFILIATES AND OTHERS
On December 22, 1994, John Hancock Advisers, Inc. (the "Adviser"), a wholly
owned subsidiary of The Berkeley Financial Group, became the investment adviser
for the Fund with approval of the Trustees and shareholders of the Fund. The
Fund's former investment manager was Transamerica Fund Management Company
("TFMC").
Under the present investment management contract, the Fund pays a monthly
management fee to the Adviser for a continuous investment program equivalent, to
0.625% of the Fund's average daily net assets. This fee structure is consistent
with the former agreement with TFMC. For the period ended August 31, 1995, the
advisory fee earned by the Adviser and TFMC amounted to $972,142 and $468,939,
respectively, resulting in a total fee of $1,441,081.
The Adviser and TFMC, for their respective periods, provided administrative
services to the Fund pursuant to an administrative service agreement through
January 16, 1995 on which day the agreement was terminated.
In the event normal operating expenses of the Fund, exclusive of certain
expenses prescribed by state law, are in excess of the most restrictive state
limit where the Fund is registered to sell shares of beneficial interest, the
fee payable to the Adviser will be reduced to the extent of such excess and the
Adviser will make additional arrangements necessary to eliminate any remaining
excess expenses. The current limits are 2.5% of the first $30,000,000 of the
Fund's average daily net asset value, 2.0% of the next $70,000,000, and 1.5% of
the remaining average daily net asset value.
On December 22, 1994 John Hancock Funds, Inc. ("JH Funds"), a wholly-owned
subsidiary of the Adviser, became the principal underwriter of the Fund. Prior
to this date, Transamerica Fund Distributors, Inc. ("TFD") served as the former
principal distributor of the Fund, and acted as sales agent pursuant to an
underwriting agreement. For the period ended August 31, 1995, JH Funds and TFD
received net sales charges of $899,731 with regard to sales of Class A shares.
Out of this amount, $69,597 was retained and used for printing prospectuses,
advertising, sales literature and other purposes, $828,359 was paid as sales
commissions to unrelated broker-dealers and $1,775 was paid as sales commissions
to sales personnel of John Hancock Distributors, Inc. ("Distributors"), Tucker
Anthony, Incorporated ("Tucker Anthony") and Sutro & Co., Inc. ("Sutro"). The
Adviser's indirect parent, John Hancock Mutual Life Insurance Company, is the
indirect sole shareholder of Distributors and John Hancock Freedom Securities
Corporation and its subsidiaries, which include Tucker Anthony and Sutro, all of
which are broker-dealers.
Class B shares which are redeemed within six years of purchase will be
subject to a contingent deferred sales charge ("CDSC") at declining rates
beginning at 5.0% of the lesser of the current market value at the time of
redemption or the original purchase cost of the shares being redeemed. Proceeds
from the CDSC are paid to JH Funds, formerly TFD, and are used in whole or in
part to defray its expenses related to providing distribution related services
to the Fund in connection with the sale of Class B shares. For the period ended
August 31, 1995, contingent deferred sales charges amounted to $444,031.
In addition, to compensate JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted Distribution Plans with
respect to Class A and Class B pursuant to Rule 12b-1 under the Investment
Company Act of 1940. Accordingly, the Fund will make payments to JH Funds for
distribution and service expenses at an annual rate not to exceed 0.25% of Class
A average daily net assets and 1.00% of Class B average daily net assets to
reimburse JH Funds for its distribution and service costs. Up to a maximum of
0.25% of these
15
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Growth and Income Fund
payments may be service fees as defined by the amended Rules of Fair Practice of
the National Association of Securities Dealers. Under the amended Rules of Fair
Practice, curtailment of a portion of the Fund's 12b-1 payments could occur
under certain circumstances. This fee structure and plan is similar to the
former arrangement with TFD.
The Board of Trustees approved a shareholder servicing agreement between the
Fund and John Hancock Investor Services Corporation ("Investor Services"), a
wholly owned subsidiary of The Berkeley Financial Group, for the period between
December 22, 1994 and May 12, 1995, inclusive under which Investor Services
processed telephone transactions on behalf of the Fund. As of May 15, 1995, the
Fund entered into a full service transfer agent agreement with Investor
Services. Prior to this date The Shareholder Services Group was the transfer
agent. The Fund will pay Investor Services a fee based on transaction volume and
number of shareholder accounts.
A partner with Baker & Botts was an officer of the Trust until December 22,
1994. During the period ended August 31, 1995, legal fees paid to Baker & Botts
amounted to $5,000.
Mr. Edward J. Boudreau is a director and officer of the Adviser and its
affiliates as well as a Trustee of the Fund. The compensation of unaffiliated
Trustees is borne by the Fund. Effective with the fees paid for 1995, the
unaffiliated Trustees may elect to defer for tax purposes their receipt of this
compensation under the John Hancock Group of Funds Deferred Compensation Plan.
The Fund will make investments into other John Hancock funds, as applicable, to
cover its liability with regard to the deferred compensation. Investments to
cover the Fund's deferred compensation liability will be recorded on the Fund's
books as an other asset. The deferred compensation liability will be marked to
market on a periodic basis and income earned by the investment will be recorded
on the Fund's books.
The Fund has an independent advisory board composed of certain members of the
former Transamerica Board of Trustees who provide advice to the current Trustees
in order to facilitate a smooth management transition for which the Fund pays
the advisory board and its counsel a fee.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than obligations of the
U.S. government and its agencies and short-term securities, during the period
ended August 31, 1995, aggregated $228,131,644 and $258,817,017, respectively.
There were no purchases or sales of long-term obligations of the U.S. government
and its agencies during the period ended August 31, 1995.
The cost of investments owned at August 31, 1995 for federal income tax
purposes was $195,826,755. Gross unrealized appreciation and depreciation of
investments aggregated $48,319,029 and $1,391,159, respectively, resulting in
net unrealized appreciation of $46,927,870.
NOTE D --
ACQUISITION OF TRANSAMERICA
SPECIAL BLUE CHIP FUND
On May 27, 1994, John Hancock Growth and Income Fund acquired all the net assets
of Transamerica Special Blue Chip Fund pursuant to a plan of reorganization
approved by Transamerica Special Blue Chip Fund shareholders on May 20, 1994.
This tax-free reorganization was accomplished by the issuance of 2,382,863 Class
B Shares of John Hancock Growth and Income Fund (valued at $26,592,756) for the
2,645,385 shares of Transamerica Special Blue Chip Fund outstanding at May 27,
1994. Transamerica Special Blue Chip Fund's net assets at that date of
$26,592,756, including $2,005,978 of unrealized appreciation, were combined with
those of John Hancock Growth and Income Fund. The aggregate net assets of John
Hancock Growth and Income Fund and Transamerica Special Blue Chip Fund
immediately after the acquisition were $229,033,314.
16
<PAGE> 17
John Hancock Funds - Growth and Income Fund
REPORT OF ERNST & YOUNG, INDEPENDENT AUDITORS
To the Board of Trustees and Shareholders of
John Hancock Investment Trust --
John Hancock Growth and Income Fund
We have audited the accompanying statement of assets and liabilities, including
the schedule of investments, of the John Hancock Growth and Income Fund
(formerly the Transamerica Growth and Income Fund) (the "Fund"), a series of
John Hancock Investment Trust (formerly the Transamerica Investment Trust) (the
"Trust"), as of August 31, 1995, and the related statement of operations for the
year then ended, the statements of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the
five years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
August 31, 1995, by correspondence with the custodian and brokers, or other
appropriate auditing procedures where replies from brokers were not received. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
John Hancock Growth and Income Fund, a series of John Hancock Investment Trust,
at August 31, 1995, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the period then
ended, in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG L.L.P.
Boston, Massachusetts
October 16, 1995
TAX INFORMATION NOTICE (UNAUDITED)
For Federal Income Tax purposes, the following information is furnished with
respect to the distributions of the Fund during its fiscal year ended August 31,
1995.
Shareholders will receive a 1995 U.S. Treasury Department Form 1099-DIV in
January of 1996. This will reflect the total of all distributions which are
taxable for the calendar year 1995.
For the fiscal year ending August 31, 1995, 100% of the ordinary income
distributions qualify for the dividends received deduction.
17
<PAGE> 18
ADDITIONAL INFORMATION
John Hancock Funds - Growth and Income Fund
On December 16, 1994, a special meeting of John Hancock (formerly Transamerica)
Investment Trust (the "Trust") in respect of John Hancock (formerly
Transamerica) Growth and Income Fund (the "Fund") was held involving the
election of trustees and certain other matters concerning the Fund.
Specifically, shareholders first approved a new investment management
agreement between the Trust on behalf of the Fund and John Hancock Advisers,
Inc. on substantially similar terms to the prior investment management
agreement, to take effect on December 22, 1994, the date of the consummation of
the acquisition of Transamerica Fund Management Company by The Berkeley
Financial Group. The shareholder votes tallied were 9,768,389 FOR, 206,169
AGAINST and 414,288 ABSTAINING.
The shareholders next approved new Plans of Distribution for each Class A and
Class B Shares of the Fund, also effective on December 22, 1994 and also upon
substantially the same terms as the prior Plans of Distribution. The Class A
Shareholder votes tallied were 5,669,928 FOR, 185,398 AGAINST, 302,148
ABSTAINING and the Class B Shareholder votes tallied were 3,950,260 FOR, 66,048
AGAINST and 215,065 ABSTAINING.
The shareholders also voted to ratify the selection of Ernst & Young LLP as
independent auditors for the Fund for the fiscal year ending August 31, 1995,
and the votes were tallied as follows: 10,148,779 FOR, 65,216 AGAINST and 65,216
ABSTAINING.
Lastly, the following trustees of the Fund were elected to serve until their
respective successors shall become duly elected and qualified, with the votes
tabulated as indicated:
<TABLE>
<CAPTION>
NAME OF TRUSTEE FOR WITHHOLD
--------------- --------- ---------
<S> <C> <C>
Edward J. Boudreau, Jr ................ 8,806,833 1,734,030
James F. Carlin ....................... 8,811,848 1,729,014
William H. Cunningham ................. 8,815,857 1,725,005
Charles L. Ladner ..................... 8,815,544 1,725,319
Leo E. Linbeck, Jr .................... 8,818,554 1,722,309
Patricia P. McCarter .................. 8,813,806 1,727,057
Steven R. Pruchansky .................. 8,806,874 1,733,989
Norman H. Smith ....................... 8,802,016 1,738,846
John P. Toolan ........................ 8,811,073 1,729,790
</TABLE>
18
<PAGE> 19
NOTES
John Hancock Funds - Growth and Income Fund
19
<PAGE> 20
[LOGO] JOHN HANCOCK FUNDS Bulk Rate
A GLOBAL INVESTMENT MANAGEMENT FIRM U.S. Postage
101 HUNTINGTON AVENUE BOSTON, MA 02199-7603 PAID
Brockton, MA
Permit No. 582
[A 1/2" x 1/2" John Hancock Funds logo in upper left hand corner of the page. A
box sectioned in quadrants with a triangle in upper left, a circle in upper
right, a cube in lower left and a diamond in lower right. A tag line below
reads: "A Global Investment Management Firm."]
- --------------------------------------------------------------------------------
This report is for the information of shareholders of the John Hancock Growth
and Income Fund. It may be used as sales literature when preceded or accompanied
by the current prospectus, which details charges, investment objectives and
operating policies.
[A recycled logo in lower left hand corner with caption "Printed on Recycled
Paper."]
