HANCOCK JOHN CURRENT INTEREST, 485BPOS, 1995-05-09

HANCOCK JOHN CURRENT INTEREST
485BPOS, 1995-05-09

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<PAGE> 1
Registration No. 2-50931
ICA No. 811-02485

AS FILED ON MAY 9, 1995

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /x/

Pre-Effective Amendment No. / /

Post-Effective Amendment No. 48 /x/
and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /x/

Amendment No. 27 /x/
JOHN HANCOCK CURRENT INTEREST
(Exact Name of Registrant as Specified in Articles of Incorporation)

101 Huntington Avenue, Boston, Massachusetts 02199-7603
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: (617) 375-1700

Thomas H. Drohan, Esq.
John Hancock Advisers, Inc.
101 Huntington Avenue, Boston, Massachusetts 02199-7603
(Name and Address of Agent for Service)
__________________________

It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b)
- ---
X on May 15, 1995 pursuant to paragraph (b)
- ---
60 days after filing pursuant to paragraph (a)
- ---
on [date] pursuant to paragraph (a) of rule 485
- ---

Registrant has previously elected, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, to register an indefinite number of its shares
of beneficial interest for sale under the Securities Act of 1933 and filed its
Rule 24f-2 Notice on or about July 28, 1994.

<PAGE> 2

JOHN HANCOCK CURRENT INTEREST

CROSS REFERENCE SHEET

<TABLE>
Cross Reference Sheet
---------------------

Pursuant to Rule 495(a) under the Securities Act of 1933

<CAPTION>
ITEM NUMBER FORM N-1A, PROSPECTUS CAPTION STATEMENT OF ADDITIONAL
PART A INFORMATION CAPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
1 Front Cover Page *

2 Expense Information; The *
Fund's Expenses; Share Price

3 The Fund's Financial *
Highlights; Performance

4 Investment Objectives and *
Policies; Organization and
Management of the Fund

5 Organization and Management *
of the Fund; The Fund's
Expenses; Back Cover Page

6 Organization and Management *
of the Fund; Dividends and
Taxes; How to Buy Shares; How
to Redeem Shares; Additional
Services and Programs

7 How to Buy Shares; Shares *
Price; Additional Services
and Programs; Alternative
Purchase Arrangements; The
Fund's Expenses; Back Cover
Page

8 How to Redeem Shares *

9 Not Applicable *

10 * Front Cover Page

11 * Table of Contents

12 * Organization of the Fund
</TABLE>
<PAGE> 3

<TABLE>
<S> <C> <C>
13 * Investment Objectives
and Policies; Certain
Investment Practices;
Investment Restrictions

14 * Those Responsible for
Management

15 * Those Responsible for
Management

16 * Investment Advisory and
Other Services;
Distribution Contract;
Transfer Agent Services;
Custody of Portfolio;
Independent Auditors

17 * Brokerage Allocation

18 * Description of Fund's
Shares

19 * Net Asset Value;
Additional Services and
Programs

20 * Tax Status

21 * Distribution Contract

22 * Calculation of
Performance

23 * Financial Statements
</TABLE>
<PAGE> 4

JOHN HANCOCK

U.S. GOVERNMENT

CASH RESERVE

PROSPECTUS

MAY 15, 1995

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
The Fund's Financial Highlights....................................................... 3
Investment Objective and Policies..................................................... 4
Organization and Management of the Fund............................................... 5
The Fund's Expenses................................................................... 6
Dividends and Taxes................................................................... 6
How to Buy Shares..................................................................... 7
Share Price........................................................................... 8
How to Redeem Shares.................................................................. 9
Additional Services and Programs...................................................... 11
Investments, Techniques and Risk Factors.............................................. 13
</TABLE>

This Prospectus sets forth the information about John Hancock U.S. Government
Cash Reserve (the "Fund"), a diversified series of John Hancock Current Interest
(the "Trust"), that you should know before investing. Please read and retain it
for future reference.

SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT
AGENCY. AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT. THERE IS NO ASSURANCE THAT THE FUND WILL BE ABLE TO MAINTAIN A
STABLE NET ASSET VALUE OF $1.00 PER SHARE.

Additional information about the Fund and the Trust has been filed with the
Securities and Exchange Commission (the "SEC"). You can obtain a copy of the
Fund's Statement of Additional Information, dated May 15, 1995 and incorporated
by reference into this Prospectus, free of charge by writing or telephoning:
John Hancock Investor Services Corporation, P.O. Box 9116, Boston, Massachusetts
02205-9116, 1-800-225-5291 (1-800-554-6713 TDD).

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<PAGE> 5

EXPENSE INFORMATION

The purpose of the following information is to help you to understand the
various fees and expenses you will bear, directly or indirectly, when you
purchase Fund shares. The operating expenses included in the table and
hypothetical example below are based on fees and expenses for the Fund's fiscal
year ended May 31, 1994 adjusted to reflect certain current expenses. Actual
fees and expenses of Fund shares in the future may be greater or less than those
indicated.

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales charge imposed on purchases (as a percentage of offering price)................................... None
Maximum sales charge imposed on reinvested dividends............................................................ None
Maximum deferred sales charge................................................................................... None
Redemption fee+................................................................................................. None
Exchange fee.................................................................................................... None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management fee.................................................................................................. 0.50 %
12b-1 fee (net of limitation)................................................................................... 0.00 %
Other expenses*................................................................................................. 0.15 %
Less expense reimbursement...................................................................................... (0.30)%
Total Fund operating expenses**................................................................................. 0.35 %
</TABLE>

* Other Expenses include transfer agent, legal, audit, custody and other
expenses.

** Total Fund operating expenses in the table reflect voluntary and temporary
limitations by the Fund's investment adviser and distributor. Without such
limitations the 12b-1 Fee and Total Fund Operating Expenses of the Fund would
have been estimated as 0.15% and 0.65%, respectively.

+ Redemption by wire fee (currently $4.00) not included.

<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- -------- -------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses for the indicated period of years on
a hypothetical $1,000 investment, assuming 5% annual return............ $ 4 $ 11 $ 20 $44
</TABLE>

(This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.)

The management and 12b-1 fees referred to above are more fully explained in
this Prospectus under the caption "The Fund's Expenses" and in the Statement of
Additional Information under the captions "Investment Advisory and Other
Services" and "Distribution Contract."

2
<PAGE> 6

THE FUND'S FINANCIAL HIGHLIGHTS

The information in the following table of financial highlights for each of the
ten years in the period ended May 31, 1994 has been audited by Ernst & Young
LLP, the Fund's independent auditors, whose unqualified report is included in
the Statement of Additional Information. The financial highlights for the
six-month period ended November 30, 1994 are unaudited. Further information
about the performance of the Fund is contained in the Fund's Annual and
Semi-Annual Reports to shareholders which may be obtained free of charge by
writing or telephoning John Hancock Investor Services Corporation ("Investor
Services"), at the address or telephone number listed on the front page of this
Prospectus.

<TABLE>
Selected data for each share outstanding throughout each period is as follows:

<CAPTION>
SIX MONTHS
ENDED
NOVEMBER FISCAL YEAR ENDED MAY 31,
1994 -----------------------------------------------------------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
---------- ------- -------- -------- -------- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset
value,
beginning
of
year..... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Net
investment
income... 0.021 0.03 0.03 0.05 0.07 0.08 0.08 0.05 0.05 0.07 0.09
Dividends
from net
investment
income... (0.021) (0.03) (0.03) (0.05) (0.07) (0.08) (0.08) (0.05) (0.05) (0.07) (0.09)
--------- ------- -------- -------- -------- -------- ------- ------- ------- ------- -------
Net asset
value,
end of
year..... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
========= ======= ======== ======== ======== ======== ======= ======= ======= ======= =======
Total
Return... 2.15% 3.04% 3.25% 4.95% 7.42% 8.66% 8.02% 5.50% 5.25% 7.03% 9.28%
========= ======= ======== ======== ======== ======== ======= ======= ======= ======= =======
RATIOS AND
SUPPLEMENTAL
DATA:
Ratio of
expenses
to
average
net
assets... 0.35% 0.65% 0.67% 0.68% 0.66% 0.66% 0.79% 1.05% 0.91% 0.89% 0.87%
Ratio of
expense
reimbursement
to
average
net
assets... (0.17)% (0.30)% (0.32)% (0.33)% (0.31)% (0.31)% (0.24)% -- -- -- --
--------- ------- -------- -------- -------- -------- ------- ------- ------- ------- -------
Ratio of
net
expenses
to
average
net
assets.... 0.18% 0.35% 0.35% 0.35% 0.35% 0.35% 0.55% 1.05% 0.91% 0.89% 0.87%
========= ======= ======== ======== ======== ======== ======= ======= ======= ======= =======
Ratio of
net
investment
income to
average
net
assets.... 2.14% 2.96% 3.19% 4.86% 7.21% 8.27% 8.29% 5.42% 5.13% 6.66% 8.87%
Net Assets,
end of
year (in
thousands)... $104,291 $94,408 $123,106 $109,358 $200,092 $164,509 $69,346 $48,774 $73,048 $85,790 $66,195
</TABLE>

YIELD INFORMATION

For the seven days ended November 30, 1994, the Fund's annualized yield and
effective yield were 5.06% and 2.15% respectively (with expense limitations),
and 4.71% and 1.98% (without expense limitations). On May 31, 1994, the Fund's
average portfolio maturity was 30 days. Yields quoted for the Fund will reflect
the assumption of certain expenses in excess of 0.35%.

Current information on the Fund's annualized yield during a recent seven-day
period may be obtained by calling the Easi-Line at 1-800-338-8080 or a customer
service representative, 1-800-225-5291.

For information on how the Fund calculates its annualized yield see the

Statement of Additional Information.

3
<PAGE> 7

INVESTMENT OBJECTIVE AND POLICIES

The Fund invests only in U.S. Government securities maturing within 13 months
from the date of purchase and repurchase agreements with respect to such
securities with an average portfolio maturity of 90 days or less. The Fund seeks
to obtain maximum current income from these short-term investments to the extent
consistent with maintaining liquidity and preserving capital. For a description
of the types of U.S. Government securities and other money market instruments in
which the Fund may invest see "Investments, Techniques and Risk Factors."

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

THE FUND SEEKS TO OBTAIN MAXIMUM CURRENT
INCOME CONSISTENT WITH MAINTAINING
LIQUIDITY AND PRESERVING CAPITAL.

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

Securities in which the Fund invests may not earn as high a level of current
income as longer term or lower quality securities which generally have less
liquidity, greater market risk and more fluctuation in market value.

The return on an investment in the Fund will depend on the interest earned by
the Fund's investments after expenses of the Fund are deducted. The return is
paid to shareholders in the form of dividends.

The Fund seeks to maintain a net asset value of $1.00 per share at all times.
There can be no assurance that the Fund will be able to maintain a constant
$1.00 share price. However, because the Fund purchases high quality U.S.
Government securities with short maturities, this policy helps to minimize any
price decreases or increases that could result from changes in interest rates or
an issuer's creditworthiness.

- -------------------------------------------------------------------------------
THE FUND SEEKS TO MAINTAIN A CONSTANT
$1.00 SHARE PRICE.
- -------------------------------------------------------------------------------

The Fund has adopted certain investment restrictions which are enumerated in
detail in the Statement of Additional Information where they are classified as
fundamental or nonfundamental. Those restrictions designated as fundamental may
not be changed without shareholder approval. The Fund's investment objective,
policies and restrictions (including a restriction on borrowing money and
pledging assets), except as noted, are fundamental and may not be changed
without the approval of the Fund's shareholders. Notwithstanding the Fund's
fundamental investment restriction prohibiting investments in other investment
companies, the Fund may, pursuant to an order granted by the SEC, invest in
other investment companies in connection with a deferred compensation plan for
the noninterested trustees of the John Hancock funds. There can be no assurance
that the Fund will achieve its investment objective.

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

THE FUND FOLLOWS CERTAIN POLICIES WHICH
MAY HELP TO REDUCE INVESTMENT RISK.

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

RISK FACTORS. The Fund is intended for investors, both individual and
institutional, who seek income at current money market rates at a relatively low
cost while participating in the convenience, liquidity and higher yields offered
by large denomination instruments available to investors such as the Fund.
However, you should be aware that a Fund investment is not without risk. By
itself, the Fund does not constitute a complete or balanced investment plan. It
is important to note that unlike the U.S. Government securities in which the
Fund may invest, shares of the Fund are neither insured nor guaranteed. For
additional information about risks associated with an investment in the Fund,
see "Investments, Techniques and Risk Factors."

4
<PAGE> 8

The primary consideration in choosing brokerage firms to carry out the Fund's
transactions is execution at the most favorable prices, taking into account the
broker's professional ability and quality of service. Consideration may also be
given to the broker's sales of Fund shares. Pursuant to procedures determined by
the Trustees, John Hancock Advisers, Inc. (the "Adviser") may place securities
transactions with brokers affiliated with the Adviser. The brokers include
Tucker Anthony Incorporated, Sutro and Company, Inc. and John Hancock
Distributors, Inc., which are indirectly owned by the John Hancock Mutual Life
Insurance Company (the "Life Company"), which in turn indirectly owns the
Adviser.

- -------------------------------------------------------------------------------
BROKERS ARE CHOSEN ON BEST PRICE AND
EXECUTION.
- -------------------------------------------------------------------------------

ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is organized as a separate, diversified portfolio of the Trust, which
is an open-end management investment company incorporated as a Texas corporation
in 1974 and reorganized as a Massachusetts business trust in 1991. The Trust
reserves the right to create and issue a number of series of shares, or funds or
classes thereof, which are separately managed and have different investment
objectives. The Trust is not required to and does not intend to hold annual
meetings of shareholders, although special meetings may be held for such
purposes as electing or removing Trustees, changing fundamental policies or
approving a management contract. The Fund, under certain circumstances, will
assist in shareholder communications with other shareholders.

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

THE TRUSTEES ELECT OFFICERS AND RETAIN THE
INVESTMENT ADVISER WHO IS RESPONSIBLE FOR
THE DAY-TO-DAY OPERATIONS OF THE FUND,
SUBJECT TO THE TRUSTEES' POLICIES AND
SUPERVISION.

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

The Adviser was organized in 1968 and is a wholly owned indirect subsidiary of
the Life Company, a financial services company. The Adviser provides the Fund,
and other investment companies in the John Hancock group of funds, with
investment research and portfolio management services. John Hancock Funds, Inc.
("John Hancock Funds") distributes shares for all of the John Hancock mutual
funds through brokers with agreements with John Hancock Funds ("Selling
Brokers"). Certain Fund officers are also officers of the Adviser and John
Hancock Funds.

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

JOHN HANCOCK ADVISERS, INC. ADVISES
INVESTMENT COMPANIES HAVING A TOTAL ASSET
VALUE OF MORE THAN $13 BILLION.

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

In order to avoid any conflict with portfolio trades for the Fund, the Adviser
and the Fund have adopted extensive restrictions on personal securities trading
by personnel of the Adviser and its affiliates. Some of these restrictions are:
preclearance for all personal trades and a ban on the purchase of initial public
offerings, as well as contributions to specified charities of profits on
securities held for less than 91 days. These restrictions are a continuation of
the basic principle that the interests of the Fund and its shareholders come
first.

5
<PAGE> 9
<TABLE>

THE FUND'S EXPENSES

For managing its investment and business affairs, the Fund pays a monthly fee to
the Adviser which is based on a stated percentage of the Fund's average daily
net assets as follows:

<CAPTION>
ANNUAL
NET ASSET VALUE RATE
- ------------------------------------------------------------------------- ------
<S> <C>
First $500 million....................................................... 0.500%
Next $250 million........................................................ 0.425%
Next $250 million........................................................ 0.375%
Next $500 million........................................................ 0.350%
Next $500 million........................................................ 0.325%
Next $500 million........................................................ 0.300%
Amount Over $2.5 billion................................................. 0.275%
</TABLE>

For the fiscal year ended May 31, 1994, the Fund paid an advisory fee of 0.20%
of the Fund's average daily net assets to the Fund's former investment adviser.
The Adviser has voluntarily and temporarily agreed to continue to limit the
Fund's operating expenses and not to impose its management fee to the extent
necessary to limit the total of the Fund's management fees and operating
expenses to 0.35% of the average net assets attributable to Fund shares.

The shareholders have adopted a distribution plan (a "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940. Under the Plan, the Fund may pay
distribution and service fees at an aggregate annual rate of up to 0.15% of the
Fund's average daily net assets. Payment of these fees has been indefinitely
suspended.

Information on the Fund's total expenses is in the Financial Highlights section
of this Prospectus.

DIVIDENDS AND TAXES

DIVIDENDS. The Fund generally declares dividends daily and distributes
dividends monthly, representing all or substantially all of its net investment
income. The Fund will distribute net realized capital gains, if any, annually.

Dividends are reinvested in additional shares of the Fund unless you elect the
option to receive them in cash. If you elect the cash option and the U.S. Postal
Service cannot deliver your checks, your election will be converted to the
reinvestment option.

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

YOU SHOULD KEEP YOUR ACCOUNT STATEMENTS
RECEIVED FROM THE FUND FOR YOUR PERSONAL
TAX RECORDS.

- -------------------------------------------------------------------------------
TAXATION. Dividends from the Fund's net investment income and net short-term
capital gains are taxable to you as ordinary income. Dividends from the Fund's
net long-term capital gains, if any, are taxable as long-term capital gain. The
Fund does not anticipate that it will generally realize any long-term capital
gains. Dividends are taxable, whether received in cash or reinvested in
additional shares. Certain dividends may be paid by the Fund in January of a
given year but may be treated as if you received them the previous December.
The Fund will send you a statement by January 31 showing the federal tax status
of the dividends you received for the prior year.

The Fund has qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended

6
<PAGE> 10

(the "Code"). As a regulated investment company, the Fund will not be subject to
Federal income tax on any net investment income or net realized capital gains
distributed to its shareholders within the time period prescribed by the Code.

On the account application, you must certify that the social security or other
taxpayer identification number you provide is your correct number and that you
are not subject to backup withholding of Federal income tax. If you do not
provide this information or are otherwise subject to this withholding, the Fund
may be required to withhold 31% of your dividends.

In addition to Federal taxes, you may be subject to state and local or foreign
taxes with respect to your investment in and distributions from the Fund. A
state income (and possibly local income and/or intangible property) tax
exemption is generally available to the extent the Fund's distributions are
derived from interest on (or, in the case of intangibles taxes, the value of its
assets is attributable to) certain U.S. Government obligations, provided in some
states that certain thresholds for holdings of such obligations and/or reporting
requirements are satisfied. Non-U.S. shareholders and tax-exempt shareholders
are subject to different tax rules not described herein. You should consult your
tax adviser for specific advice.

<TABLE>
HOW TO BUY SHARES

- -------------------------------------------------------------------------------------
<S> <C> <C>
The minimum initial investment is $20,000 ($250 for group investments and
retirement plans). Complete the Account Application attached to this Prospectus.
- -------------------------------------------------------------------------------------
OPENING AN ACCOUNT
- -------------------------------------------------------------------------------------
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation, P.O. Box 9115, Boston, MA, 02205-9115.
2. Deliver the completed application and check to your registered
representative or Selling Broker or mail it directly to
Investor Services.
- -------------------------------------------------------------------------------------
BY WIRE 1. Obtain an account number by contacting your registered
representative or Selling Broker, or by calling 1-800-225-5291.
2. Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock U.S. Government Cash Reserve
Your Account Number
Name(s) under which account is registered
3. Deliver the completed application to your registered
representative, Selling Broker or mail it directly to Investor
Services.

- -------------------------------------------------------------------------------------
BUYING ADDITIONAL SHARES
- -------------------------------------------------------------------------------------
MONTHLY 1. Complete the "Automatic Investing" and "Bank Information"
AUTOMATIC sections on the Account Privileges Application designating a
ACCUMULATION bank account from which funds may be drawn.
PROGRAM 2. The amount you elect to invest will be automatically withdrawn
(MAAP) from your bank or credit union account.
- -------------------------------------------------------------------------------------
</TABLE>

7
<PAGE> 11

<TABLE>
- -------------------------------------------------------------------------------
BUYING ADDITIONAL SHARES (CONTINUED)
- -------------------------------------------------------------------------------
<S> <C> <C>
- ---------------------------------------------------------------------------------
BY TELEPHONE 1. Complete the "Invest-By-Phone" and "Bank Information" sections
on the Account Privileges Application designating a bank
account from which your funds may be drawn. Note that in order
to invest by phone, your account must be in a bank or credit
union that is a member of the Automated Clearing House system
(ACH).
2. After your authorization form has been processed, you may
purchase additional shares by calling Investor Services
toll-free 1-800-225-5291.
3. Give the Investor Services representative the name(s) in which
your account is registered, the Fund name, your account number,
and the amount you wish to invest.
4. Your investment normally will be credited to your account the
business day following your phone request.
- ---------------------------------------------------------------------------------
BY CHECK 1. Either complete the detachable stub included on your account
statement or include a note with your investment listing the
name of the Fund, your account number and the name(s) in which
the account is registered.
2. Make your check payable to John Hancock Investor Services
Corporation.
3. Mail the account information and check to:
John Hancock Investor Services Corporation
P.O. Box 9115
Boston, MA 02205-9115
or deliver it to your registered representative or Selling
Broker.
- ---------------------------------------------------------------------------------
BY WIRE Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock U.S. Government Cash Reserve
Your Account Number
Name(s) under which account is registered
- ---------------------------------------------------------------------------------
Other Requirements: All purchases must be made in U.S. dollars. Checks written on
foreign banks will delay purchases until U.S. funds are received, and a collection
charge may be imposed. Shares of the Fund are priced at the offering price based
on the net asset value computed after Investor Services receives notification of
the dollar equivalent from the Fund's custodian bank. Wire purchases normally take
two or more hours to complete and, to be accepted the same day, must be received
by 4:00 P.M., New York time. Your bank may charge a fee to wire funds. Telephone
transactions are recorded to verify information. Certificates are not issued.
- ---------------------------------------------------------------------------------
</TABLE>

You will receive a statement of your account after any transaction that affects
your share balance or registration (statements related to reinvestment of
dividends and automatic investment/withdrawal plans will be sent to you
quarterly). A tax information statement will be mailed to you by January 31 of
each year.

- -------------------------------------------------------------------------------
YOU WILL RECEIVE ACCOUNT STATEMENTS THAT
YOU SHOULD KEEP TO HELP WITH YOUR PERSONAL
RECORDKEEPING.
- -------------------------------------------------------------------------------

SHARE PRICE
The net asset value per share ("NAV") is the value of one share. The NAV is
calculated by dividing the Fund's net assets by the number of outstanding shares
of the Fund. Securities in the Fund's portfolio are valued at amortized cost
which the Board has determined approximates market value. Under the amortized
cost pricing method, a portfolio investment is valued at its cost and thereafter
any discount or premium is amortized to maturity, regardless of the impact of
fluctuating interest rates on the market value of the investment. Amortized cost
pricing facilitates the maintenance of a $1.00 constant net asset value per
share, but, or course, this cannot be guaranteed.

- -------------------------------------------------------------------------------
THE PRICE OF YOUR SHARES IS THEIR NET
ASSET VALUE WHICH WILL NORMALLY BE
BUYING ADDITIONAL SHARES (CONTINUED)
- -------------------------------------------------------------------------------

8
<PAGE> 12

The NAV is calculated twice each day on which the New York Stock Exchange is
open (the "Exchange") (i.e., at 12:00 noon and as of the close of regular
trading on the Exchange, generally at 4:00 P.M., New York time) on each day that
the Exchange is open.

Shares of the Fund are sold at the NAV computed after your investment request is
received in good order by John Hancock Funds, which will normally be constant at
$1.00 per share. There is no sales charge. If you buy shares of the Fund through
a Selling Broker, the Selling Broker must receive your investment before the
close of regular trading on the Exchange and transmit it to John Hancock Funds
before its close of business to receive that day's price.

HOW TO REDEEM SHARES

You may redeem all or a portion of your shares on any business day. Your shares
will be redeemed at the next NAV calculated after your redemption request is
received in good order by Investor Services. The Fund may hold payment until it
is reasonably satisfied that investments recently made by check or
Invest-by-Phone have been collected (which may take up to 10 calendar days).

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

TO ASSURE ACCEPTANCE OF YOUR REDEMPTION
REQUEST, PLEASE FOLLOW THESE PROCEDURES.

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

Once your shares are redeemed, the Fund generally sends you payment on the next
business day. Under unusual circumstances, the Fund may suspend redemptions or
postpone payment for up to seven days or longer, as permitted by Federal
securities laws.

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

<TABLE>
<S> <C> <C>
BY CHECK You may elect the checkwriting privilege which allows you
to write checks in amounts from a minimum of $100. Checks
may not be written against shares in your account which
have been purchased within the last 10 days, except for
shares purchased by wire transfer (which are immediately
available).
- ---------------------------------------------------------------------------------
BY TELEPHONE All Fund shareholders are automatically eligible for the
telephone redemption privilege. Call 1-800-225-5291, from
8:00 A.M. to 4:00 P.M. (New York time), Monday through
Friday, excluding days on which the Exchange is closed.
Investor Services employs the following procedures to
confirm that instructions received by telephone are
genuine. Your name, the account number, taxpayer
identification number applicable to the account and other
relevant information may be requested. In addition,
telephone instructions are recorded.
You may redeem up to $100,000 by telephone, but the address
on the account must not have changed for the last thirty
days. A check will be mailed to the exact name(s) shown on
the account.
If reasonable procedures, such as those described above,
are not followed, the Fund may be liable for any loss due
to unauthorized or fraudulent telephone instructions. In
all other cases, neither the Fund nor Investor Services
will be liable for any loss or expense for acting upon
telephone instructions made in accordance with the
telephone transaction procedures mentioned above.
Telephone redemption is not available for IRAs or other
tax-qualified retirement plans or shares of the Fund that
are in certificated form.
During periods of extreme economic conditions or market
changes, telephone requests may be difficult to implement
due to a large volume of calls. During these times, you
should consider placing redemption requests in writing or
use EASI-Line. EASI-Line's telephone number is
1-800-338-8080.
- ---------------------------------------------------------------------------------
</TABLE>

9
<PAGE> 13

<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------
BY WIRE If you have a telephone redemption form on file with the
Fund, redemption proceeds of $1,000 or more can be wired on
the next business day to your designated bank account, and
a fee (currently $4.00) will be deducted. You may also use
electronic funds transfer to your assigned bank account,
and the funds are usually collectible after two business
days. Your bank may or may not charge a fee for this
service. Redemptions of less than $1,000 will be sent by
check or electronic funds transfer.
This feature may be elected by completing the "Telephone
Redemption" section on the Account Privileges Application
included with this Prospectus.
- ---------------------------------------------------------------------------------
IN WRITING Send a stock power or "letter of instruction" specifying
the name of the Fund, the dollar amount or the number of
shares to be redeemed, your name, your account number and
the additional requirements listed below that apply to your
particular account.
- ---------------------------------------------------------------------------------

- ---------------------------------------------------------------------------------
<CAPTION>
TYPE OF REGISTRATION REQUIREMENTS
--------------------------------- --------------------------------------------
<S> <C> <C>
Individual, Joint Tenants, Sole A letter of instruction signed (with titles
Proprietorship, Custodial where applicable) by all persons authorized
(Uniform Gifts or Transfer to to sign for the account, exactly as it is
Minors Act), General Partners registered with the signature(s) guaran-
teed.
Corporation, Association A letter of instruction and a corporate
resolution, signed by person(s) authorized
to act on the account with the signature(s)
guaranteed.
Trusts A letter of instruction signed by the
trustee(s) with the signature(s) guaranteed.
(If the trustee's name is not registered on
your account, also provide a copy of the
trust document, certified within the last 60
days.)
If you do not fall into any of these registration categories, please call
1-800-225-5291 for further instructions.

- -------------------------------------------------------------------------------
WHO MAY GUARANTEE YOUR SIGNATURE.
- -------------------------------------------------------------------------------

A signature guarantee is a widely accepted way to protect you and the Fund by
verifying the signature on your request. It may not be provided by a notary
public. If the net asset value of the shares redeemed is $100,000 or less, John
Hancock Funds may guarantee the signature. The following institutions may
provide you with a signature guarantee, provided that the institution meets
credit standards established by Investor Services: (i) a bank; (ii) a securities
broker or dealer, including a government or municipal securities broker or
dealer, that is a member of a clearing corporation or meets certain net capital
requirements; (iii) a credit union having authority to issue signature
guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, a federal savings bank or association; or (v) a
national securities exchange, a registered securities exchange or a clearing
agency.
</TABLE>

10
<PAGE> 14

<TABLE>
- ---------------------------------------------------------------------------------
<S> <C> <C>
ADDITIONAL INFORMATION ABOUT REDEMPTIONS.
- -------------------------------------------------------------------------------

THROUGH YOUR BROKER. Your broker may be able to initiate the redemption.
Contact your broker for instructions.
- ---------------------------------------------------------------------------------
If you have certificates for your shares, you must submit them with your stock
power or a letter of instructions. You may not redeem certificated shares by
telephone.
Due to the proportionately high cost of maintaining small accounts, the Fund
reserves the right to redeem at net asset value all shares in an account which
holds less than $500 (except accounts under retirement plans) and to mail the
proceeds to the shareholder, or the transfer agent may impose an annual fee of
$10.00. No account will be involuntarily redeemed or additional fee imposed, if
the value of the account is in excess of the Fund's minimum initial investment
or if the value of the account falls below the required minimum as a result of
market action.
Shareholders will be notified before these redemptions are to be made or this
fee is imposed, and will have 30 days to purchase additional shares to bring
their account balance up to the required minimum. Unless the number of shares
acquired by further purchases and dividend reinvestments, if any, exceeds the
number of shares redeemed, repeated redemptions from a smaller account may
eventually trigger this policy.
- ---------------------------------------------------------------------------------
</TABLE>

ADDITIONAL SERVICES AND PROGRAMS

EXCHANGE PRIVILEGE

If your investment objective changes, or if you wish to achieve further
diversification, John Hancock offers other funds with a wide range of investment
goals. Contact your registered representative or Selling Broker and request a
prospectus for the John Hancock funds that interest you. Read the prospectus
carefully before exchanging your shares. You can exchange shares of the Fund for
shares of another John Hancock fund. For this purpose, John Hancock funds with
only one class of shares (except John Hancock Money Market Fund B) will be
treated as Class A, whether or not they have been so designated.

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

YOU MAY EXCHANGE SHARES OF THE FUND FOR
SHARES OF ANOTHER JOHN HANCOCK FUND.

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

Exchanges between funds which carry a front end sales charge will be subject to
the sales charge described in the other fund's Prospectus (generally, 4.5% or
5.0%). Shares of the Fund acquired by exchange of shares of another fund on
which a front end sales charge was previously paid are exchanged at net asset
value.

The Fund reserves the right to require you to keep previously exchanged shares
(and reinvested dividends) in the Fund for 90 days before you are permitted to
execute a new exchange. The Fund may also terminate or alter the terms of the
exchange privilege, upon 60 days' notice to shareholders.

When you make an exchange, your account registration in both the existing and
new account must be identical. The exchange privilege is available only in
states where the exchange can be made legally.

Under exchange agreements with John Hancock Funds, certain dealers, brokers and
investment advisers may exchange their clients' Fund shares, subject to the

11
<PAGE> 15

terms of those agreements and John Hancock Funds' right to reject or suspend
those exchanges at any time. Because of the restrictions and procedures under
those agreements, the exchanges may be subject to timing limitations and other
restrictions that do not apply to exchanges requested by shareholders directly,
as described above.

Because Fund performance and shareholders can be hurt by excessive trading, the
Fund reserves the right to terminate the exchange privilege for any person or
group that, in John Hancock Funds' judgment, is involved in a pattern of
exchanges that coincide with a "market timing" strategy that may disrupt the
Fund's ability to invest effectively according to its investment objective and
policies, or might otherwise affect the Fund and its shareholders adversely. The
Fund may also temporarily or permanently terminate the exchange privilege for
any person who makes seven or more exchanges out of the Fund per calendar year.
Accounts under common control or ownership will be aggregated for this purpose.
Although the Fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time.

BY TELEPHONE

1. When you complete the application for your initial purchase of Fund shares,
you automatically authorize exchanges by telephone unless you check the box
indicating that you do not wish to authorize telephone exchanges.

2. Call 1-800-225-5291. Have the account number of your current fund and the
exact name in which it is registered available to give to the telephone
representative.

3. Investor Services employs the following procedures to confirm that
instructions received by telephone are genuine. Your name, the account
number, taxpayer identification number applicable to the account and other
relevant information may be requested. In addition, telephone instructions
are recorded.

IN WRITING

1. In a letter, request an exchange and list the following:

-- the name of the Fund whose shares you currently own
-- your account number
-- the name(s) in which the account is registered
-- the name of the fund in which you wish your exchange to be invested
-- the number of shares, all shares or dollar amount you wish to exchange

Sign your request exactly as the account is registered.

2. Mail the request and information to:

John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

12
<PAGE> 16
SYSTEMATIC WITHDRAWAL PLAN

1. You can elect the Systematic Withdrawal Plan at any time by completing the
Account Privileges Application which is attached to this Prospectus. You can
also obtain this application by calling your registered representative or by
calling 1-800-225-5291.

2. To be eligible, you must have at least $5,000 in your account.

3. Payments from your account can be made monthly, quarterly, semi-annually or
annually or on a selected monthly basis to yourself or any other designated
payee.

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

YOU CAN PAY ROUTINE BILLS FROM YOUR
ACCOUNT, OR MAKE PERIODIC DISBURSEMENTS OF
FUNDS FROM YOUR RETIREMENT ACCOUNT TO
COMPLY WITH IRS REGULATIONS.

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

4. There is no limit on the number of payees you may authorize, but all payments
must be made at the same time or intervals.

5. Redemptions will be discontinued if the U.S. Postal Service cannot deliver
your checks or if deposits to a bank account are returned for any reason.

MONTHLY AUTOMATIC ACCUMULATION PROGRAM (MAAP)

1. You can authorize an investment to be automatically withdrawn each month from
your bank for investment in Fund shares under the "Automatic Investing" and
"Bank Information" sections of the Account Privileges Application.

- -------------------------------------------------------------------------------
YOU CAN MAKE AUTOMATIC INVESTMENTS AND
SIMPLIFY YOUR INVESTING.
- -------------------------------------------------------------------------------

2. You can also authorize automatic investment through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.

3. You can terminate your Monthly Automatic Accumulation Program plan at any
time.

RETIREMENT PLANS

1. You may use the Fund as a funding medium for various types of qualified
retirement plans, including Individual Retirement Accounts, Keough Plans
(H.R. 10), Pension and Profit Sharing Plans (including 401(k) Plans), Tax
Sheltered Annuity Retirement Plans (403(b) Plans) and 457 Plans.

2. The initial investment minimum or aggregate minimum for any of the above
plans is $250. However, accounts being established as Group IRA, SEP, SARSEP,
TSA, 401(k) and 457 Plans will be accepted without an initial minimum
investment.

INVESTMENTS, TECHNIQUES AND RISK FACTORS
GOVERNMENT SECURITIES. U.S. Government securities are issued or guaranteed as
to principal and interest by the U.S. Government or one of its agencies or
instrumentalities. Treasury bills, bonds and notes and certain obligations of
government agencies and instrumentalities, such as Government National Mortgage
Association pass-through certificates, are supported by the full faith and
credit of the U.S. Treasury (the "Treasury"). Other obligations such as
securities

13
<PAGE> 17

of the Federal Home Loan Bank are supported by the right of the issuer to
borrow from the Treasury; while others, such as bonds issued by the Federal
National Mortgage Association, which is a private corporation, are supported
only by the credit of the issuing instrumentality. Obligations not backed by
the full faith and credit of the U.S. Government may be secured, in whole or
in part, by a line of credit with the Treasury or collateral consisting of cash
or other securities which are backed by the full faith and credit of the U.S.
Government. In the case of other obligations, the agency issuing or
guaranteeing the obligation must be looked to for ultimate repayment. Variable
Amount Demand Master Notes are obligations that permit the investment by the
Fund of fluctuating amounts as determined by the Fund at varying rates of
interest pursuant to direct arrangements between the Fund and the issuing
government agency. Although callable on demand by the Fund, these obligations
are not marketable to third parties.

REPURCHASE AGREEMENTS. Repurchase agreements collateralized by U.S. Government
securities may be entered into with selected member banks of the Federal Reserve
System or U.S. securities dealers. In a repurchase agreement, the Fund buys a
security subject to the right and obligation to sell it back to the issuer at
the same price plus accrued interest. These transactions must be fully
collateralized at all times. The Fund may reinvest any cash collateral in
short-term highly liquid debt securities. However, these transactions may
involve some credit risk to the Fund if the other party should default on its
obligation and the Fund is delayed in or prevented from recovering the
collateral. The Fund will not enter into repurchase agreements of more than one
week's duration if more than 10% of its net assets would then be so
invested -- considering only the remaining days to maturity of existing
repurchase agreements. In addition, the securities underlying repurchase
agreements are not subject to the restrictions applicable to maturity of the
portfolio or its securities.

MONEY MARKET INSTRUMENTS. Because interest rates on money market instruments
fluctuate in response to economic factors, the rates on short-term investments
made by the Fund and the daily dividend paid to investors will vary, rising or
falling with short-term rates generally. All of these obligations in which the
Fund invests are guaranteed by the U.S. government or one of its agencies or
instrumentalities.

SHORT-TERM TRADING AND PORTFOLIO TURNOVER. Short-term trading means the
purchase and subsequent sale of a security after it has been held for a
relatively brief period of time. Short-term trading may have the effect of
increasing portfolio turnover and may increase net short-term capital gains,
distributions from which would be taxable to shareholders as ordinary income.
The Fund does not intend to invest for the purpose of seeking short-term
profits. The Fund's portfolio securities may be changed, however, without regard
to the holding period of these securities (subject to certain tax restrictions),
when the Adviser deems that this action will help achieve the Fund's objective
given a change in an issuer's operations or changes in general market
conditions. The Fund's portfolio turnover rate is set forth in the table under
the caption "Financial Highlights."

14
<PAGE> 18

(NOTES)

<PAGE> 19

JOHN HANCOCK U.S. GOVERNMENT CASH RESERVE

STATEMENT OF ADDITIONAL INFORMATION
MAY 15, 1995

This Statement of Additional Information ("SAI") provides
information about John Hancock U.S. Government Cash Reserve (the
"Fund"), a diversified series of John Hancock Current Interest
(the "Trust"), in addition to the information that is contained in
the Fund's Prospectus, dated May 15, 1995.

This SAI is not a prospectus. It should be read in
conjunction with the Prospectus, a copy of which can be obtained
free of charge by writing or telephoning:

John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-5291
1-800-225-5291

Statement of Cross
Additional Referenced
Information to Prospectus

Table of Contents Page Page
----------------- ---- ----
Organization of the Trust................. 2............ 5
Investment Objective and Policies......... 2............ 4
Certain Investment Practices.............. 2............ 4
Investment Restrictions................... 3............ 4
Those Responsible for Management.......... 6............ 5
Investment Advisory and Other Services.... 14............ 5
Distribution Contract..................... 18............ 6
Amortized Cost Method of Portfolio
Valuation............................ 20............ 8
Purchase of Shares........................ 21............ 7
Special Redemptions....................... 21............ 9
Additional Services and Programs.......... 21............ 11
Description of the Fund's Shares.......... 22............ 5
Tax Status................................ 24............ 6
Calculation of Performance................ 25............ 2
Brokerage Allocation...................... 27............ 4
Transfer Agent Services................... 29 Back Cover
Custody of Portfolio...................... 29 Back Cover
Independent Auditors...................... 30 Back Cover
Financial Statements...................... 30............ 3

<PAGE> 20

ORGANIZATION OF THE TRUST

John Hancock Current Interest (the "Trust") is an open-end
management investment company organized as a Massachusetts
business trust under a Declaration of Trust dated October 3, 1991.
The Trust currently has only one series designated as: John
Hancock U.S. Government Cash Reserves (the "Fund"). Prior to
December 22, 1994, the Fund was called Transamerica U.S.
Government Cash Reserves.

The Fund is managed by John Hancock Advisers, Inc. (the
"Adviser"), a wholly-owned indirect subsidiary of John Hancock
Mutual Life Insurance Company (the "Life Company") chartered in
1862 with national headquarters at John Hancock Place, Boston,
Massachusetts. John Hancock Funds, Inc. ("John Hancock Funds")
acts as principal distributor of the shares of the Fund.

INVESTMENT OBJECTIVE AND POLICIES

See "Investment Objective and Policies" in the Prospectus.
There can be no assurance that the Fund's investment objective
will be realized.

As discussed under "Investment Objective and Policies" and
"Investments, Techniques and Risk Factors" in the Prospectus, the
Fund may invest only in securities issued or guaranteed by the
U.S. Government. Such securities differ only in their interest
rates, maturities and dates of issuance. Treasury bills have a
maturity of one year or less. Treasury notes have maturities of
1-10 years and Treasury bonds have maturities of greater than 10
years at the date of issuance. Investments in Treasury bonds or
treasury notes will be limited to those having remaining
maturities of less than 13 months.

CERTAIN INVESTMENT PRACTICES

GOVERNMENT SECURITIES. Certain U.S. Government securities,
including U.S. Treasury bills, notes and bonds, and Government
National Mortgage Association certificates ("Ginnie Maes"), are
supported by the full faith and credit of the United States.
Certain other U.S. Government securities, issued or guaranteed by
Federal agencies or government sponsored enterprises, are not
supported by the full faith and credit of the United States, but
may be supported by the right of the issuer to borrow from the
U.S. Treasury. These securities include obligations of the
Federal Home Loan Mortgage Corporation ("Freddie Macs"), and
obligations supported by the credit of the instrumentality, such
as Federal National Mortgage Association Bonds ("Fannie Maes").

-2-
<PAGE> 21

No assurance can be given that the U.S. Government will provide
financial support to such Federal agencies, authorities,
instrumentalities and government sponsored enterprises in the
future.

REPURCHASE AGREEMENTS. The Fund may enter into repurchase
agreements collateralized by U.S. Government securities. A
repurchase agreement is a contract under which the Fund would
acquire a security for a relatively short period (generally not
more than 7 days) subject to the obligation of the seller to
repurchase and the Fund to resell such security at a fixed time
and price (representing the Fund's cost plus interest). The Fund
will enter into repurchase agreements only with member banks of
the Federal Reserve System and with securities dealers. The
Adviser will continuously monitor the creditworthiness of the
parties with whom the Fund enters into repurchase agreements. The
Fund has established a procedure providing that the securities
serving as collateral for each repurchase agreement must be
delivered to the Fund's custodian either physically or in book-
entry form and that the collateral must be marked to market daily
to ensure that each repurchase agreement is fully collateralized
at all times. In the event of bankruptcy or other default by a
seller of a repurchase agreement, the Fund could experience delays
in liquidating the underlying securities and could experience
losses, including the possible decline in the value of the
underlying securities during the period in which the Fund seeks to
enforce its rights thereto, possible subnormal levels of income
and lack of access to income during this period, and the expense
of enforcing its rights.

INVESTMENT RESTRICTIONS

The Fund has adopted certain fundamental investment
restrictions upon its investments as set forth below which may not
be changed without the approval of the holders of a majority of
the outstanding shares of the Fund. A majority for this purpose
means: (a) more than 50% of the outstanding shares of the Fund or
(b) 67% or more of the shares represented at a meeting where more
than 50% of the outstanding shares of the Fund are represented,
whichever is less. Under these restrictions, the Fund may not:

1. Purchase common stocks, preferred stocks, warrants,
other equity securities, private placements, corporate
bonds or debentures maturing beyond one year from the
date of purchase, state bonds, or industrial revenue
bonds, except through the purchase of debt obligations
referred to under "Investment Objective and Policies" in
the Prospectus.

-3-
<PAGE> 22

2. Sell securities short;

3. Write or purchase put or call options;

4. Underwrite the securities of another issuer, purchase
securities subject to restrictions on disposition under
the Securities Act of 1933 (so-called "restricted
securities") or purchase securities which are not
readily marketable;

5. Purchase or sell real estate, real estate investment
trust securities, commodities, or oil and gas interests;

6. Make loans to other persons, except the Fund may enter
into repurchase agreements as provided in the investment
practices. The purchase of an issue of publicly
distributed bonds, debentures or other securities,
whether or not the purchase was made upon the original
issuance of securities, is not considered to be the
making of a loan;

7. Purchase any securities which would cause more than 25%
of the value of the Fund's total assets at the time of
such purchase to be invested in the securities of one or
more issuers conducting their principal business
activities in the same industry, provided that this
limitation does not apply to investments in bank
obligations of domestic branches of U.S. banks including
deposits with and obligation of savings institutions,
obligations of foreign branches of domestic banks when
the Adviser believes that the domestic parent will be
ultimately responsible for payment if the issuing bank
should fail to do so, U.S. Treasury Bills or other
obligations issued or guaranteed by the U.S. Government,
or one of its agencies or instrumentalities;

8. Invest in companies for the purpose of exercising
control;

9. Invest in securities of other investment companies,
except pursuant to a merger, consolidation or
acquisition of assets;

10. Invest more than 5% of the value of the Fund's assets in
the securities of any one issuer (other than securities
issued or guaranteed as to principal and interest by the
U.S. Government, or one of its agencies or
instrumentalities).

-4-
<PAGE> 23

11. Borrow money except from banks for temporary or
emergency purposes (but not to purchase investment
securities) in an amount up to 1/3 of the value of the
Fund's total assets. The borrowing restriction set
forth above does not prohibit the use of reverse
repurchase agreements, in an amount (including any
borrowings) not to exceed 33 1/3% of net assets; or

12. Pledge its assets except in amounts not in excess of the
lesser of the dollar amount borrowed or 15% of the value
of the Fund's total assets at the time of borrowing and
only to secure borrowings for temporary or emergency
purposes.

In order to comply with certain state regulatory policies,
the Fund will not, as a matter of non-fundamental policy, pledge,
mortgage or hypothecate its assets in amounts that would exceed
10% of its net assets at market value. The Fund's Board of
Trustees has approved the following non-fundamental investment
policy pursuant to an order of the SEC: Notwithstanding any
investment restriction to the contrary, the Fund may, in
connection with the John Hancock Group of Funds Deferred
Compensation Plan for Independent Trustees/Directors, purchase
securities of other investment companies within the John Hancock
Group of Funds provided that, as a result, (i) no more than 10% of
the Fund's assets would be invested in securities of all other
investment companies, (ii) such purchase would not result in more
than 3% of the total outstanding voting securities of any one such
investment company being held by the Fund and (iii) no more than
5% of the Fund's assets would be invested in any one such
investment company.

-5-
<PAGE> 24

THOSE RESPONSIBLE FOR MANAGEMENT

The business of the Fund is managed by its Trustees who elect
officers who are responsible for the day-to-day operations of the
Fund and who execute policies formulated by the Trustees. Several
of the officers and Trustees of the Fund are also officers and
directors of the Adviser or officers and directors of John Hancock
Funds.

<TABLE>
Set forth below is the principal occupation or employment of
the Trustees and principal officers of the Fund during the past
five years.

<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ---------------------
<S> <C> <C>
EDWARD J. BOUDREAU, JR.* Trustee, Chairman and Chairman and Chief Executive
101 Huntington Ave. Chief Executive Officer, the Adviser and The
Boston, MA 02199 Officer (1)(2) Berkeley Financial Group ("The
Berkeley Group"); Chairman, NM
Capital Management, Inc. ("NM
Capital"); John Hancock Advisers
International Limited ("Advisers
International"); John Hancock
Funds, Inc.; John Hancock
Investor Services Corporation
("Investor Services"); and
Sovereign Asset Management
Corporation ("SAMCorp");
(hereinafter the Adviser, the
Berkeley Group, NM Capital,
Advisers International, John
Hancock Funds, Inc., Investor
Services and SAMCorp are
collectively referred to as the
"Affiliated Companies");
Chairman, First Signature Bank &
Trust; Director, John Hancock
Freedom Securities Corporation,
<FN>
__________________________

* An "interested person" of the Trust as such term is defined in the 1940
Act.
(1) Member of the Executive Committee. Under the Trust's Declaration of
Trust, the Executive Committee may generally exercise most of the powers
of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.

</TABLE>

-6-
<PAGE> 25
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ---------------------
<S> <C> <C>
John Hancock Capital Corporation,
New England/Canada Business
Council; Member, Investment
Company Institute Board of
Governors; Trustee, Museum of
Science; President, the Adviser
(until July 1992); Trustee or
Director of other investment
companies managed by the Adviser;
and Chairman, John Hancock
Distributors, Inc. (until April,
1994).

JAMES F. CARLIN Trustee Chairman and CEO, Carlin
233 West Central Street Consolidated, Inc. (insurance);
Natick, MA 01760 Director, Arbella Mutual
Insurance Company (insurance),
Consolidated Group Trust (group
health plan), Carlin Insurance
Agency, Inc. and West Insurance
Agency, Inc.; Receiver, the City
of Chelsea (until August 1992);
and Trustee or Director of other
investment companies managed by
the Adviser.

WILLIAM H. CUNNINGHAM Trustee Chancellor, University of Texas
601 Colorado Street System and former President of
O'Henry Hall the University of Texas, Austin,
Austin, TX 78701 Texas; Regents Chair in Higher
Education Leadership; James L.
Bayless Chair for Free
Enterprise; Professor of
Marketing and Dean College of
Business Administration/Graduate
School of Business (1983-1985);
Centennial Chair in Business
Education Leadership, 1983-1985;
Director, LaQuinta Motor Inns,

<FN>
__________________________

-7-
<PAGE> 26
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ---------------------
<S> <C> <C>
Inc. (hotel management company);
Director, Jefferson-Pilot
Corporation (diversified life
insurance company); Director,
Freeport-McMoran Inc. (oil and
gas company); Director, Barton
Creek Properties, Inc.
(1988-1990) (real estate
development) and LBJ Foundation
Board (education foundation); and
Advisory Director, Texas Commerce
Bank - Austin.

CHARLES L. LADNER Trustee (3) Director, Energy North, Inc.
UGI Corporation (public utility holding company);
460 North Gulph Road Senior Vice President, Finance
King of Prussia, PA UGI Corp (public utility holding
19406 company) (until 1992); and
Trustee or Director of other
investment companies managed by
the Adviser.

LEO E. LINBECK, JR. Trustee Chairman, President, Chief
3810 W. Alabama Executive Officer and Director,
Houston, TX 77027 Linbeck Corporation (a holding
company engaged in various phases
of the construction industry and
warehousing interests); Director
and Chairman, Federal Reserve
Bank of Dallas; Chairman of the
Board and Chief Executive
Officer, Linbeck Construction
Corporation; Director, Panhandle
Eastern Corporation (a
diversified energy company);
Director, Daniel Industries, Inc.
(manufacturer of gas measuring
products and energy related
equipment); Director, GeoQuest
<FN>
__________________________

-8-
<PAGE> 27
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ---------------------
<S> <C> <C>
International, Inc. (a
geophysical consulting firm); and
Director, Greater Houston
Partnership.

PATRICIA P. MCCARTER Trustee (3) Director and Secretary, the
Swedesford Road McCarter Corp. (machine
RD #2, Box 121 manufacturer); and Trustee or
Malvern, PA 19355 Director of other investment
companies managed by the Adviser.

STEVEN R. PRUCHANSKY Trustee (1,3) Director and Treasurer, Mast
360 Horse Creek Dr. Holdings, Inc.; Director, First
#208 Signature Bank & Trust Company
Naples, FL 33942 (until August 1991); General
Partner, Mast Realty Trust;
President, Maxwell Building Corp.
(until 1991); and Trustee or
Director of other investment
companies managed by the Adviser.

NORMAN H. SMITH Trustee (3) Lieutenant General, USMC, Deputy
Rt. 1, Box 249E Chief of Staff for Manpower and
Linden, VA 22642 Reserve Affairs, Headquarters
Marine Corps; Commanding General
III Marine Expeditionary Force/
3rd Marine Division (retired
1991); and Trustee or Director of
other investment companies
managed by the Adviser.

JOHN P. TOOLAN Trustee (3) Director, The Smith Barney Muni
13 Chadwell Place Bond Funds, The Smith Barney Tax-
Morristown, NJ 07960 Free Money Fund, Inc., Vantage
Money Market Funds (mutual
funds), The Inefficient-Market
Fund, Inc. (closed-end investment
company) and Smith Barney Trust
[/R] Company of Florida; Chairman,
<FN>
__________________________

-9-
<PAGE> 28
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ---------------------
<S> <C> <C>
Smith Barney Trust Company
(retired December, 1991);
Director, Smith Barney, Inc.,
Mutual Management Company and
Smith, Barney Advisers, Inc.
(investment advisers) (retired
1991); and Senior Executive Vice
President, Director and member of
the Executive Committee, Smith
Barney, Harris Upham & Co.,
Incorporated (investment bankers)
(until 1991); and Trustee or
Director of other investment
companies managed by the Adviser.

ROBERT G. FREEDMAN* Vice Chairman and President and Chief Investment
101 Huntington Ave. Chief Investment Officer, the Adviser.
Boston, MA 02199 Officer (2)

ANNE C. HODSDON* President (2) Executive Vice President, the
101 Huntington Ave. Adviser.
Boston, MA 02199

JAMES B. LITTLE* Senior Vice President Senior Vice President, the
101 Huntington Ave. and Chief Financial Adviser
Boston, MA 02199 Officer

THOMAS H. DROHAN* Senior Vice President Senior Vice President and
101 Huntington Ave. and Secretary Secretary, the Adviser.
Boston, MA 02199

MICHAEL P. DICARLO* Senior Vice President Senior Vice President, the
101 Huntington Ave. (2) Adviser
Boston, MA 02199

EDGAR LARSEN* Senior Vice President Senior Vice President, the
Adviser

<FN>
__________________________

</TABLE>

-10-
<PAGE> 29
<TABLE>
<CAPTION>
Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Years
---------------- ---------------- ---------------------
<S> <C> <C>

B.J. WILLINGHAM* Senior Vice President Senior Vice President, the
Adviser. Formerly, Director and
Chief Investment Officer of
Transamerica Fund Management
Company.

JAMES J. STOKOWSKI* Vice President and Vice President, the Adviser.
101 Huntington Ave. Treasurer.
Boston, MA 02199

SUSAN S. NEWTON* Vice President and Vice President and Assistant
101 Huntington Ave. Compliance Officer Secretary, the Adviser.
Boston, MA 02199

JOHN A. MORIN* Vice President Vice President, the Adviser.
101 Huntington Ave.
Boston, MA 02199

All of the officers listed are officers or employees of the
Adviser or affiliated companies. Some of the Trustees and officers may
also be officers and/or Directors and/or Trustees of one or more of the
other funds for which the Adviser serves as investment adviser.

As of May 8, 1995, there were 29,562,000 shares of the Fund
outstanding and officers and Trustees of the Fund as a group beneficially
owned less than 1% of these outstanding shares. At such date, Thomas R.
Powers and Pat G. Powers JTWROS, Houston, Texas held of record 3,104,460
shares representing approximately 11% of the shares outstanding and Texas
Commerce Bank, Houston, Texas held of record 12,304,689 shares representing
approximately 42% of the outstanding shares. Such ownership

<FN> __________________________

* An "interested person" of the Trust as such term is defined in
the 1940 Act.
(1) Member of the Executive Committee. Under the Trust's Declaration
of Trust, the Executive Committee may generally exercise most of
the powers of the Board of Directors.
(2) A member of the Investment Committee of the Adviser.
(3) Member of the Audit Committee and the Committee on Administration.
(4) A Member of the Audit, Administration and Compensation Committees.

</TABLE>

-11-
<PAGE> 30

represents an interest of more than 25% of the outstanding shares
of the Fund resulting in the presumption of "control" as defined
under the 1940 Act and has the likely result that such shareholder
can materially affect a positive or negative vote on any matters
which require the vote of all shareholders of the Fund. At such
date, no other person owned of record or beneficially as much as
5% of the outstanding shares of the Fund.

As of December 22, 1994, the Trustees have established an
Advisory Board which acts to facilitate a smooth transition of
management over a two-year period (between Transamerica Fund
Management Company ("TFMC"), the prior investment adviser, and the
Adviser). The members of the Advisory Board are distinct from the
Board of Trustees, do not serve the Fund in any other capacity and
are persons who have no power to determine what securities are
purchased or sold on behalf of the Fund. Each member of the
Advisory Board may be contacted at 101 Huntington Avenue, Boston,
Massachusetts 02199.

Members of the Advisory Board and their respective principal
occupations during the past five years are as follows:

R. Trent Campbell, President, FMS, Inc. (financial and management
services); former Chairman of the Board, Mosher Steel
Company.

Mrs. Lloyd Bentsen, Formerly National Democratic Committeewoman
from Texas; co-founder, Houston Parents' League; former board
member of various civic and cultural organizations in
Houston, including the Houston Symphony, Museum of Fine Arts
and YWCA. Mrs. Bentsen is presently active in various civic
and cultural activities in the Washington, D.C. area,
including membership on the Area Board for The March of Dimes
and is a National Trustee for the Botanic Gardens of
Washington, D.C.

Thomas R. Powers, Formerly Chairman of the Board, President and
Chief Executive Officer, TFMC; Director, West Central
Advisory Board, Texas Commerce Bank; Trustee, Memorial
Hospital System; Chairman of the Board of Regents of Baylor
University; Member, Board of Governors, National Association
of Securities Dealers, Inc.; Formerly, Chairman, Investment
Company Institute; formerly, President, Houston Chapter of
Financial Executive Institute.

Thomas B. McDade, Chairman and Director, TransTexas Gas Company;
Director, Houston Industries and Houston Lighting and Power
Company; Director, TransAmerican Companies (natural gas
producer and transportation); Member, Board of Managers,
Harris County Hospital District; Advisory Director,

-12-
<PAGE> 31

Commercial State Bank, El Campo; Advisory Director, First
National Bank of Bryan; Advisory Director, Sterling
Bancshares; Former Director and Vice Chairman, Texas Commerce
Bancshares; and Vice Chairman, Texas Commerce Bank.

<TABLE>
COMPENSATION OF THE BOARD OF TRUSTEES AND ADVISORY BOARD.
The following table provides information regarding the
compensation paid by the Fund and the other investment companies
in the John Hancock Fund Complex to the Independent Trustees and
the Advisory Board members for their services. Mr. Boudreau, a
non-Independent Trustee, and each of the officers of the Funds who
are interested persons of the Adviser, are compensated by the
Adviser and received no compensation from the Funds for their
services.

<CAPTION>
Pension or Total Compensation
Retirement from all Funds in
Aggregate Benefits Accrued John Hancock
Compensation as Part of the Fund Complex to
Trustees from the Fund Fund's Expenses Trustees**
-------- ------------- ---------------- ------------------
<S> <C> <C> <C>
James F. Carlin $ 0 $0 $60,450
William H. Cunningham 3,800* 0 0
Charles L. Ladner 0 0 60,450
Leo E. Linbeck, Jr. 5,200* 0 0
Patricia P. McCarter 0 0 60,200
Steven R. Pruchansky 0 0 62,450
Norman H. Smith 0 0 62,450
John P. Toolan 0 0 60,450
<FN>

* Compensation made pursuant to different compensation
arrangements then in effectfor the fiscal year ended May 31,
1994..

** The total compensation paid by the John Hancock Fund Complex to
the Independent Trustees is $366,450 as of the calendar year
ended December 31, 1994. All Trustees/Directors, except
Messrs. Cunningham and Linbeck, are Trustees/Directors of 39
funds in The John Hancock Fund Complex. Messrs. Cunningham and
Linbeck are Trustee/Directors of 21 funds.(The Fund was not
part of the John Hancock Fund Complex until December 22, 1994
and Messrs. Cunningham and Linbeck were not trustees or
directors of any funds in the John Hancock Fund Complex prior
to December 22, 1994.)

</TABLE>

-13-
<PAGE> 32
<TABLE>
<CAPTION>

Pension or Total Compensation
Retirement from all Funds in
Aggregate Benefits Accrued John Hancock
Compensation as Part of the Fund Complex to
Advisory Board*** from the Fund Fund's Expenses Advisory Board***
-------- ------------- ---------------- ------------------
<S> <C> <C> <C>
R. Trent Campbell $ 2,765 $0 $47,000
Mrs. Lloyd Bentsen 2,765 0 47,000
Thomas R. Powers 2,765 0 47,000
Thomas B. McDade 2,765 0 47,000

TOTAL $11,060 $0 $188,000

<FN>

*** Estimated for the Fund's current fiscal year ending May 31, 1995.

</TABLE>

INVESTMENT ADVISORY AND OTHER SERVICES

As described in the Prospectus, the Fund receives its
investment advice from the Adviser. Investors should refer to the
Prospectus for a description of certain information concerning the
investment management contract. Each of the Trustees and
principal officers affiliated with the Fund who is also an
affiliated person of the Adviser is named above, together with the
capacity in which such person is affiliated with the Fund, the
Adviser or TFMC (the Fund's prior investment adviser).

The Adviser, located at 101 Huntington Avenue, Boston,
Massachusetts 02199-7603, was organized in 1968 and currently has
more than $13 billion in assets under management in its capacity
as investment adviser to the Fund and the other mutual funds and
publicly traded investment companies in the John Hancock group of
funds having a combined total of over 1,060,000 shareholders. The
Adviser is a wholly-owned subsidiary of The Berkeley Financial
Group, which is in turn a wholly-owned subsidiary of John Hancock
Subsidiaries, Inc., which is in turn a wholly-owned subsidiary of
the Life Company, one of the most recognized and respected
financial institutions in the nation. With total assets under
management of $80 billion, the Life Company is one of the ten
largest life insurance companies in the United States and carries
Standard & Poor's and A.M. Best's highest ratings. Founded in
1862, the Life Company has been serving clients for over 130
years.

As described in the Prospectus under the caption
"Organization and Management of the Fund," the Fund has entered
into an investment management contract with the Adviser. Under

-14-
<PAGE> 33

the investment management contract, the Adviser provides the Fund
with (i) a continuous investment program, consistent with the
Fund's stated investment objective and policies, (ii) supervision
of all aspects of the Fund's operations except those that are
delegated to a custodian, transfer agent or other agent and
(iii) such executive, administrative and clerical personnel,
officers and equipment as are necessary for the conduct of its
business. The Adviser is responsible for the day-to-day
management of the Fund's portfolio assets.

No person other than the Adviser and its directors and
employees regularly furnishes advice to the Fund with respect to
the desirability of the Fund investing in, purchasing or selling
securities. The Adviser may from time to time receive statistical
or other similar factual information, and information regarding
general economic factors and trends, from the Life Company and its
affiliates.

Under the terms of the investment management contract with
the Fund, the Adviser provides the Fund with office space,
equipment and supplies and other facilities and personnel required
for the business of the Fund. The Adviser pays the compensation
of all officers and employees of the Fund and pays the expenses of
clerical services relating to the administration of the Fund. All
expenses which are not specifically paid by the Adviser and which
are incurred in the operation of the Fund including, but not
limited to, (i) the fees of the Trustees of the Fund who are not
"interested persons," as such term is defined in the 1940 Act (the
"Independent Trustees"), (ii) the fees of the members of the
Fund's Advisory Board (described above) and (iii) the continuous
public offering of the shares of the Fund are borne by the Fund.
Subject to the conditions set forth in a private letter ruling
that the Fund has received from the Internal Revenue Service
relating to its multiple-class structure, class expenses properly
allocable to any Class A or Class B shares will be borne
exclusively by such class of shares.

<TABLE>
As provided by the investment management contract, the Fund
pays the Adviser an investment management fee, which is accrued
daily and paid monthly in arrears, equal on an annual basis to a
percentage of the Fund's average daily net asset value as follows:

<CAPTION>
Fee
Average Daily Net Assets of the Fund (annual rate)
------------------------------------ -------------
<S> <C>
First $500 million.............................. 0.500%
Next $250 million............................... 0.425%
Next $250 million............................... 0.375%
Next $500 million............................... 0.350%
Next $500 million............................... 0.325%
Next $500 million............................... 0.300%
Amount Over $2.5 billion........................ 0.275%
</TABLE>

-15-
<PAGE> 34

The Adviser may voluntarily and temporarily reduce its
advisory fee or make other arrangements to limit the Fund's
expenses to a specified percentage of average daily net assets.
The Adviser retains the right to re-impose the advisory fee and
recover any other payments to the extent that, at the end of any
fiscal year, the Fund's annual expenses fall below this limit.

In the event normal operating expenses of the Fund, exclusive
of certain expenses prescribed by state law, are in excess of any
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 any
additional arrangements necessary to eliminate any remaining
excess expenses. Currently, the most restrictive limit applicable
to the Fund is 2.5% of the first $30,000,000 of the Fund's average
daily net asset value, 2% of the next $70,000,000 and 1.5% of the
remaining average daily net asset value.

Pursuant to the investment management contract, the Adviser
is not liable to the Fund or its shareholders for any error of
judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which the contract relates, except
a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its
duties or from its reckless disregard of the obligations and
duties under the applicable contract.

The investment management contract initially expires on
December 22, 1996 and will continue in effect from year to year
thereafter if approved annually by a vote of a majority of the
Independent Trustees of the Fund, cast in person at a meeting
called for the purpose of voting on such approval, and by either a
majority of the Trustees or the holders of a majority of the
Fund's outstanding voting securities. The management contract
may, on 60 days' written notice, be terminated at any time without
the payment of any penalty to the Fund by vote of a majority of
the outstanding voting securities of the Fund, by the Trustees or
by the Adviser. The management contract terminates automatically
in the event of its assignment.

Securities held by the Fund may also be held by other funds
or investment advisory clients for which the Adviser or its
affiliates provide investment advice. Because of different
investment objectives or other factors, a particular security may
be bought for one or more funds or clients when one or more are
selling the same security. If opportunities for purchase or sale
of securities by the Adviser or for other funds or clients for
which the Adviser renders investment advice arise for
consideration at or about the same time, transactions in such

-16-
<PAGE> 35

securities will be made, insofar as feasible, for the respective
funds or clients in a manner deemed equitable to all of them. To
the extent that transactions on behalf of more than one client of
the Adviser or its respective affiliates may increase the demand
for securities being purchased or the supply of securities being
sold, there may be an adverse effect on price.

Under the investment management contract, the Fund may use
the name "John Hancock" or any name derived from or similar to it
only for so long as the investment management contract or any
extension, renewal or amendment thereof remains in effect. If the
Fund's investment management contract is no longer in effect, the
Fund (to the extent that it lawfully can) will cease to use such
name or any other name indicating that it is advised by or
otherwise connected with the Adviser. In addition, the Adviser or
the Life Company may grant the non-exclusive right to use the name
"John Hancock" or any similar name to any other corporation or
entity, including but not limited to any investment company of
which the Life Company or any subsidiary or affiliate thereof or
any successor to the business of any subsidiary or affiliate
thereof shall be the investment adviser.

For the fiscal years ended May 31, 1992, 1993 and 1994
advisory fees payable by the Fund to TFMC, the Fund's former
investment adviser, amounted to $736,304, $626,241 and $690,268,
respectively; however, a portion of such fees were not imposed
pursuant to the voluntary fee and expense limitation arrangements
then in effect (see "The Fund's Expenses" in the Prospectus).

ADMINISTRATIVE SERVICES AGREEMENT. The Fund was a party to
an administrative services agreement with TFMC (the "Services
Agreement"), pursuant to which TFMC performed bookkeeping and
accounting services and functions, including preparing and
maintaining various accounting books, records and other documents
and keeping such general ledgers and portfolio accounts as are
reasonably necessary for the operation of the Fund. Other
administrative services included communications in response to
shareholder inquiries and certain printing expenses of various
financial reports. In addition, such staff and office space,
facilities and equipment was provided as necessary to provide
administrative services to the Fund. The Services Agreement was
amended in connection with the appointment of the Adviser as
adviser to the Fund to permit services under the Agreement to be
provided to the Fund by the Adviser and its affiliates. The
Services Agreement was terminated during the current fiscal year.

For the fiscal years ended May 31, 1992, 1993 and 1994, the
Fund paid to TFMC (pursuant to the Services Agreement) $58,810,
$53,577 and $48,703, respectively, of which $45,549, $39,721 and

-17-
<PAGE> 36

$35,000, respectively, was paid to TFMC and $13,261, $13,856 and
$13,703, respectively, were paid for certain data processing and
pricing information services.

DISTRIBUTION CONTRACT

DISTRIBUTION CONTRACT. As discussed in the Prospectus, the
Fund's shares are sold on a continuous basis at the public
offering price. John Hancock Funds, a wholly-owned subsidiary of
the Adviser, has the exclusive right, pursuant to the Distribution
Contract dated December 22, 1994 (the "Distribution Contract"), to
purchase shares from the Fund at net asset value for resale to the
public or to broker-dealers at the public offering price. Upon
notice to all broker-dealers ("Selling Brokers") with whom it has
sales agreements, John Hancock Funds may allow such Selling
Brokers up to the full applicable sales charge during periods
specified in such notice. During these periods, such Selling
Brokers may be deemed to be underwriters as that term is defined
in the Securities Act of 1933.

The Distribution Contract was initially adopted by the
affirmative vote of the Fund's Board of Trustees including the
vote a majority of Independent Trustees, cast in person at a
meeting called for such purpose. The Distribution Contract shall
continue in effect until December 22, 1996 and from year to year
thereafter if approved by either the vote of the Fund's
shareholders or the Board of Trustees including the vote of a
majority of Independent Trustees, cast in person at a meeting
called for such purpose. The Distribution Contract may be
terminated at any time, without penalty, by either party upon
sixty (60) days' written notice or by a vote of a majority of the
outstanding voting securities of the Fund and terminates
automatically in the case of an assignment by John Hancock Funds.

DISTRIBUTION PLAN. The Board of Trustees, including the
Independent Trustees of the Fund, approved a new distribution plan
pursuant to Rule 12b-1 under the 1940 Act for shares of the Fund
(the "Plan"). The Plan was approved by a majority of the
outstanding shares of the Fund on December 16, 1994 and became
effective on December 22, 1994.

Under the Plan, the distribution or service fee will not
exceed an annual rate of 0.15% of the average daily net asset
value of the Fund (determined in accordance with the Fund's
Prospectus as from time to time in effect). Any expenses under
the Plan not reimbursed within 12 months of being presented to the
Fund for repayment are forfeited and not carried over to future

-18-
<PAGE> 37

years. The Fund incurred no expenses under the Plan for the
fiscal year ended May 31, 1994. Since December 22, 1994, payment
under the Plan has been made to John Hancock Funds.

Under the Plan, expenditures shall be calculated and accrued
daily and paid monthly or at such other intervals as the Trustees
shall determine. The fee may be spent by John Hancock Funds on
Distribution Expenses or Service Expenses. "Distribution
Expenses" include any activities or expenses primarily intended to
result in the sale of shares of the Fund, including, but not
limited to: (i) initial and ongoing sales compensation payable
out of such fee as such compensation is received by John Hancock
Funds or by Selling Brokers, (ii) direct out-of-pocket expenses
incurred in connection with the distribution of shares, including
expenses related to printing of prospectuses and reports;
(iii) preparation, printing and distribution of sales literature
and advertising material; (iv) an allocation of overhead and other
branch office expenses of John Hancock Funds related to the
distribution of Fund Shares (v) distribution expenses that were
incurred by the Fund's former distributor and not recovered
through payments under the former plan; and (vi) in the event that
any other investment company (the "Acquired Fund") sells all or
substantially all of its assets to, merges with or otherwise
engages in a combination with the Fund, distribution expenses
originally incurred in connection with the distribution of the
Acquired Fund's shares. Service Expenses under the Plan include
payments made to, or on account of, account executives of selected
broker-dealers (including affiliates of John Hancock Funds) and
others who furnish personal and shareholder account maintenance
services to shareholders of the Fund.

The Plan provides that it will continue in effect only as
long as its continuance is approved at least annually by a
majority of both the Trustees and the Independent Trustees. The
Plan provides that it may be terminated (a) at any time by vote of
a majority of the Trustees, a majority of the Independent
Trustees, or a majority of the Fund's outstanding voting
securities or (b) by John Hancock Funds on 60 days' notice in
writing to the Fund. The Plan further provides that it may not be
amended to increase the maximum amount of the fees for the
services described therein without the approval of a majority of
the outstanding shares of the Fund. The Plan provides that no
material amendment to the Plan will, in any event, be effective
unless it is approved by a majority vote of the Trustees and the
Independent Trustees of the Fund. In adopting the Plans, the
Board of Trustees has determined that, in their judgment, there is
a reasonable likelihood that the Plan will benefit the holders of
the shares of the Fund.

-19-

<PAGE> 38

Information regarding the services rendered under the Plan
and the Distribution Contract and the amounts paid therefor by the
Fund is provided to, and reviewed by, the Board of Trustees on a
quarterly basis. In its quarterly review, the Board of Trustees
considers the continued appropriateness of the Plan and the
Distribution Contract and the level of compensation provided
therein.

When the Fund seeks an Independent Trustee to fill a vacancy
or as a nominee for election by shareholders, the selection or
nomination of the Independent Trustee is, under resolutions
adopted by the Trustees contemporaneously with their adoption of
the Plans, committed to the discretion of the Committee on
Administration of the Trustees. The members of the Committee on
Administration are all Independent Trustees and identified in this
Statement of Additional Information under the heading "Those
Responsible for Management."

AMORTIZED COST METHOD OF PORTFOLIO VALUATION

The Fund utilizes the amortized cost valuation method of
valuing portfolio instruments in the absence of extraordinary or
unusual circumstances. Under the amortized cost method, assets
are valued by constantly amortizing over the remaining life of an
instrument the difference between the principal amount due at
maturity and the cost of the instrument to the Fund. The Trustees
will from time to time review the extent of any deviation of the
net asset value, as determined on the basis of the amortized cost
method, from net asset value as it would be determined on the
basis of available market quotations. If any deviation occurs
which may result in unfairness either to new investors or existing
shareholders, the Trustees will take such actions as they deem
appropriate to eliminate or reduce such unfairness to the extent
reasonably practicable. These actions may include selling
portfolio instruments prior to maturity to realize gains or losses
or to shorten the Fund's average portfolio maturity, withholding
dividends, splitting, combining or otherwise recapitalizing
outstanding shares or utilizing available market quotations to
determine net asset value per share.

Since a dividend is declared to shareholders each time net
asset value is determined, the net asset value per share of the
Fund will normally remain constant at $1.00 per share. There is
no assurance that the Fund can maintain the $1.00 per share value.
Monthly, any increase in the value of a shareholder's investment
from dividends is reflected as an increase in the number of shares
in the shareholder's account or is distributed as cash if a
shareholder has so elected.

-20-
<PAGE> 39

It is expected that the Fund's net income will be positive
each time it is determined. However, if because of a sudden rise
in interest rates or for any other reason the net income of the
Fund determined at any time is a negative amount, the Fund will
offset the negative amount against income accrued during the month
for each shareholder account. If at the time of payment of a
distribution such negative amount exceeds a shareholder's portion
of accrued income, the Fund may reduce the number of its
outstanding shares by treating the shareholder as having
contributed to the capital of the Fund that number of full or
fractional shares which represents the amount of excess. By
investing in the Fund, shareholders are deemed to have agreed to
make such a contribution. This procedure is intended to permit
the Fund to maintain its net asset value at $1.00 per share.

If in the view of the Trustees it is inadvisable to continue
the practice of maintaining net asset value at $1.00 per share,
the Trustees reserve the right to alter the procedures for
determining net asset value. The Fund will notify shareholders of
any such alteration.

PURCHASE OF SHARES

Shares of the Fund are offered at a price equal to their net
asset value per share which will normally be constant at $1.00.
Share certificates will not be issued unless requested by the
shareholder in writing, and then only will be issued for full
shares.

SPECIAL REDEMPTIONS

Although it would not normally do so, the Fund has the right
to pay the redemption price of shares of the Fund in whole or in
part in portfolio securities as prescribed the Trustees. When the
shareholder sells portfolio securities received in this fashion,
he would incur a brokerage charge. Any such securities would be
valued for the purposes of making such payment at the same value
as used in determining net asset value. The Fund has elected to
be governed by Rule 18f-1 under the 1940 Act, pursuant to which
the Fund is obligated to redeem shares solely in cash up to the
lesser of $250,000 or 1% of the net asset value of the Fund during
any 90 day period for any one account.

ADDITIONAL SERVICES AND PROGRAMS

EXCHANGE PRIVILEGE. As described more fully in the
Prospectus, the Fund permits exchanges of Fund shares for shares
of other funds and portfolios managed by the Adviser.

-21-

<PAGE> 40

SYSTEMATIC WITHDRAWAL PLAN. As described briefly in the
Prospectus, the Fund permits the establishment of a Systematic
Withdrawal Plan. Payments under this plan represent proceeds
arising from the redemption of Fund shares. The Fund reserves the
right to modify or discontinue the Systematic Withdrawal Plan of
any shareholder on 30 days' prior written notice to such
shareholder, or to discontinue the availability of such plan in
the future. The shareholder may terminate the plan at any time by
giving proper notice to Fund Services.

MONTHLY AUTOMATIC ACCUMULATION PROGRAM ("MAAP"). This
program is explained fully in the Fund's Prospectus and the
Account Privileges Application. The program, as it relates to
automatic investment checks, is subject to the following
conditions:

The investments will be drawn on or about the day of the
month indicated.

The privilege of making investments through the Monthly
Automatic Accumulation Program may be revoked by Investor Services
without prior notice if any investment is not honored by the
shareholder's bank. The bank shall be under no obligation to
notify the shareholder as to the non-payment of any check.

The program may be discontinued by the shareholder either by
calling Investor Services or upon written notice to Investor
Services which is received at least five (5) business days prior
to the due date of any investment.

DESCRIPTION OF THE FUND'S SHARES

Ownership of the Fund is represented by transferable shares
of beneficial interest. The Declaration of Trust permits the
Trustees to create an unlimited number of series and classes of
shares of the Fund and, with respect to each series and class, to
issue an unlimited number of full or fractional shares and to
divide or combine the shares into a greater or lesser number of
shares without thereby changing the proportionate beneficial
interests of the Fund. As of the date of this Statement of
Additional Information, the Trustees have only authorized the
shares of the Fund. Each share of the Fund represents an equal
proportionate interest with each other share. Shares of the Fund
have a par value of $0.01 per share.

Pursuant to the Declaration of Trust, the Trustees may
authorize the creation of additional series of shares (the
proceeds of which would be invested in separate, independently
managed portfolios) and additional classes within any series

-22-
<PAGE> 41

(which would be used to distinguish among the rights of different
categories of shareholders, as might be required by future
regulations or other unforeseen circumstances). As of the date of
this Statement of Additional Information, the Trustees have
authorized the issuance of only one class of shares of the Fund.

VOTING RIGHTS. Shareholders are entitled to a full vote for
each full share held. The Trustees themselves have the power to
alter the number and the terms of office of Trustees, and they may
at any time lengthen their own terms or make their terms of
unlimited duration (subject to certain removal procedures) and
appoint their own successors, provided that at all times at least
a majority of the Trustees have been elected by shareholders. The
voting rights of shareholders are not cumulative, so that holders
of more than 50 percent of the shares voting can, if they choose,
elect all Trustees being selected, while the holders of the
remaining shares would be unable to elect any Trustees. Although
the Fund need not hold annual meetings of shareholders, the
Trustees may call special meetings of shareholders for action by
shareholder vote as may be required by the 1940 Act or the
Declaration of Trust. Also, a shareholders' meeting must be
called if so requested in writing by the holders of record of 10%
or more of the outstanding shares of the Fund. In addition, the
Trustees may be removed by the action of the holders of record of
two-thirds or more of the outstanding shares.

SHAREHOLDER LIABILITY. The Declaration of Trust provides
that no Trustee, officer, employee or agent of the Fund is liable
to the Fund or to a shareholder, nor is any Trustee, officer,
employee or agent liable to any third persons in connection with
the affairs of the Fund, except as such liability may arise from
his or its own bad faith, willful misfeasance, gross negligence or
reckless disregard of his duties. It also provides that all third
persons shall look solely to the Fund's property for satisfaction
of claims arising in connection with the affairs of the Fund.
With the exceptions stated, the Declaration of Trust provides that
a Trustee, officer, employee or agent is entitled to be
indemnified against all liability in connection with the affairs
of the Fund.

Under Massachusetts law, shareholders of a Massachusetts
business trust could, under certain circumstances, be held
personally liable for acts or obligations of the trust. However,
the Fund's Declaration of Trust contains an express disclaimer of
shareholder liability for acts, obligations and affairs of the
Fund. The Declaration of Trust also provides for indemnification
out of the Fund's assets for all losses and expenses of any
shareholder held personally liable by reason of being or having
been a shareholder. Liability is therefore limited to

-23-
<PAGE> 42

circumstances in which the Fund itself would be unable to meet its
obligations, and the possibility of this occurrence is remote.

As a Massachusetts business trust, the Fund is not required
to issue share certificates. The Fund shall continue without
limitation of time subject to the provisions in the Declaration of
Trust concerning termination by action of the shareholders.

TAX STATUS

The Fund has qualified and has elected to be treated as a
"regulated investment company" under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"), and intends to
continue to so qualify in the future. As such and by complying
with the applicable provisions of the Code regarding the sources
of its income, the timing of its distributions, and the
diversification of its assets, the Fund will not be subject to
Federal income tax on taxable income (including net realized
capital gains, if any) which is distributed to shareholders at
least annually in accordance with the timing requirements of the
Code.

The Fund will be subject to a four percent nondeductible
federal excise tax on certain amounts not distributed (and not
treated as having been distributed) on a timely basis in
accordance with annual minimum distribution requirements. The
Fund intends under normal circumstances to avoid liability for
such tax by satisfying such distribution requirements.

Distributions of net investment income (which include
original issue discount and accrued, recognized market discount)
and any net realized short-term capital gains, as computed for
Federal income tax purposes, will be taxable as described in the
Prospectus whether taken in shares or in cash. Although the Fund
does not expect to realize any net long-term capital gains,
distributions from such gains, if any, would be taxable as long-
term capital gains. Shareholders electing to receive
distributions in the form of additional shares will have a cost
basis for Federal income tax purposes in each share so received
equal to the amount of cash they would have received had they
taken the distribution in cash, divided by the number of shares
received.

Upon a redemption of shares (including by exercise of the
exchange privilege) a shareholder ordinarily will not realize a
taxable gain or loss if, as anticipated, the Fund maintains a
constant net asset value per share. If the Fund is not successful
in maintaining a constant net asset value per share, a redemption
may produce a taxable gain or loss.

-24-
<PAGE> 43

Distributions from the Fund will not qualify for the
dividends-received deduction for corporate shareholders.

For Federal income tax purposes, the Fund is permitted to
carry forward a net capital loss in any year to offset net capital
gains, if any, during the eight years following the year of the
loss. To the extent subsequent net capital gains are offset by
such losses, they would not result in Federal income tax liability
to the Fund and would not be distributed as such to shareholders.

Different tax treatment, including penalties on certain
excess contributions and deferrals, certain pre-retirement and
post-retirement distributions and certain prohibited transactions,
is accorded to accounts maintained as qualified retirement plans.
Shareholders should consult their tax advisers for more
information.

The Fund is not subject to Massachusetts corporate excise or
franchise taxes. Provided that the Fund qualifies as a regulated
investment company under the Code, the Fund will also not be
required to pay any Massachusetts income tax.

The foregoing discussion relates solely to U.S. Federal
income tax laws applicable to U.S. persons (i.e., U.S. citizens or
residents and U.S. domestic corporations, partnerships, trusts or
estates) subject to tax under such law. The discussion does not
address special tax rules applicable to certain classes of
investors, such as tax-exempt entities, insurance companies and
financial institutions. Dividends, capital gain distributions (if
any), and ownership of or gains realized (if any) on the
redemption (including an exchange) of shares of the Fund may also
be subject to state and local taxes. Shareholders should consult
their own tax advisers as to the federal, state or local tax
consequences of ownership of shares of, and receipt of
distributions from, the Fund in their particular circumstances.

Non-U.S. investors not engaged in U.S. trade or business with
which their Fund investment is effectively connected will be
subject to U.S. Federal income tax treatment that is different
from that described above. These investors may be subject to
nonresident alien withholding tax at the rate of 30% (or a lower
rate under an applicable tax treaty) on amounts treated as
ordinary dividends from the Fund. Non-U.S. investors should
consult their tax advisers regarding such treatment and the
application of foreign taxes to an investment in the Fund.

-25-
<PAGE> 44

CALCULATION OF PERFORMANCE

For the purposes of calculating yield, daily income per share
consists of interest and discount earned on the Fund's investments
less provision for amortization of premiums and applicable
expenses, divided by the number of shares outstanding, but does
not include realized or unrealized appreciation or depreciation.

In any case in which the Fund reports its annualized yield,
it will also furnish information as to the average portfolio
maturities of the Fund. It will also report any material effect
of realized gains or losses or unrealized appreciation on
dividends which have been excluded from the computation of yield.

Yield calculations are based on the value of a hypothetical
preexisting account with exactly one share at the beginning of the
seven day period. Yield is computed by determining the net change
in the value of the account during the base period and dividing
the net change by the value of the account at the beginning of the
base period to obtain the base period return. Base period is
multiplied by 365/7 and the resulting figure is carried to the
nearest 100th of a percent. Net change in account value during
the base period includes dividends declared on the original share,
dividends declared on any shares purchased with dividends of that
share and any account or sales charges that would affect an
account of average size, but excludes any capital changes.

Effective yield is computed by determining the net change,
exclusive of capital changes, in the value of a hypothetical
preexisting account having a balance of one share at the beginning
of the period, subtracting a hypothetical charge reflecting
deductions from shareholder accounts, and dividing the difference
by the value of the account at the beginning of the base period to
obtain the base period return, and then compounding the base
period return by adding 1, raising the sum to a power equal to 365
divided by 7, and subtracting 1 from the result, according to the
following formula:

EFFECTIVE YIELD = [(BASE PERIOD RETURN + 1)365/7]-1

The yield of the Fund is not fixed or guaranteed. Yield
quotations should not be considered to be representations of yield
of the Fund for any period in the future. The yield of the Fund
is a function of available interest rates on money market
instruments, which can be expected to fluctuate, as well as of
the quality, maturity and types of portfolio instruments held by
the Fund and of changes in operating expenses. The Fund's yield
may be affected if, through net sales of its shares, there is a
net investment of new money in the Fund which the Fund invests at
interest rates different from that being earned on current

-26-
<PAGE> 45

portfolio instruments. Yield could also vary if the Fund
experiences net redemptions, which may require the disposition of
some of the Fund's current portfolio instruments.

From time to time, in reports and promotional literature, the
Fund's yield and total return will be ranked or compared to
indices of mutual funds and bank deposit vehicles such as Lipper
Analytical Services, Inc. "Lipper-Fixed Income Fund Performance
Analysis," a monthly publication which tracks net assets, total
return, and yield on approximately 1,000 fixed income mutual funds
in the United States or "IBC/Donahue's Money Fund Report," a
similar publication. Comparisons may also be made to bank
Certificates of Deposit, which differ from mutual funds, like the
Fund, in several ways. The interest rate established by the
sponsoring bank is fixed for the term of a CD, there are penalties
for early withdrawal from CD's and the principal on a CD is
insured. Unlike CD's, which are insured as to principal, an
investment in the Fund is not insured or guaranteed.

Performance rankings and ratings, reported periodically in
national financial publications such as MONEY MAGAZINE, FORBES,
BUSINESS WEEK, THE WALL STREET JOURNAL, MICROPAL, INC.,
MORNINGSTAR, STANGER'S and BARRONS, will also be utilized. The
Fund's promotional and sales literature may make reference to the
Fund's "beta." Beta is a reflection of the market-related risk of
the Fund by showing how responsive the Fund is to the market.

BROKERAGE ALLOCATION

Decisions concerning the purchase and sale of portfolio
securities are made by the Adviser pursuant to recommendations
made by its investment committee, which consists of officers and
directors of the Adviser and affiliates and officers and Trustees
who are interested persons of the Fund. Orders for purchases and
sales of securities are placed in a manner which, in the opinion
of the Investment Advisor will offer the best price and market for
the execution of each such transaction. Purchases from
underwriters of portfolio securities may include a commission or
commissions paid by the issuer and transactions with dealers
serving as market makers reflect a "spread." Investments in debt
securities are generally traded on a net basis through dealers
acting for their own account as principals and not as brokers; no
brokerage commissions are payable on such transactions.

The Fund's primary policy is to execute all purchases and
sales of portfolio instruments at the most favorable prices
consistent with best execution, considering all of the costs of
the transaction including brokerage commissions. This policy
governs the selection of brokers and dealers and the market in

-27-
<PAGE> 46

which a transaction is executed. Consistent with the foregoing
primary policy, the Rules of Fair Practice of the NASD and other
policies that the Trustees may determine, the Adviser may consider
sales of shares of the Fund as a factor in the selection of
broker-dealers to execute the Fund's portfolio transactions.

To the extent consistent with the foregoing, the Fund will be
governed in the selection of brokers and dealers, and the
negotiation of brokerage commission rates and dealer spreads, by
the reliability and quality of the services, including primarily
the availability and value of research information and to a lesser
extent statistical assistance furnished to the Adviser of the
Fund, and their value and expected contribution to the performance
of the Fund. It is not possible to place a dollar value on
information and services to be received from brokers and dealers,
since it is only supplementary to the research efforts of the
Adviser. The receipt of research information is not expected to
reduce significantly the expenses of the Adviser. The research
information and statistical assistance furnished by brokers and
dealers may benefit the Life Company or other advisory clients of
the Adviser, and conversely, brokerage commissions and spreads
paid by other advisory clients of the Adviser may result in
research information and statistical assistance beneficial to the
Fund. The Fund will make no commitments to allocate portfolio
transactions upon any prescribed basis. While the Fund's officers
will be primarily responsible for the allocation of the Fund's
brokerage business, their policies and practices in this regard
must be consistent with the foregoing and will at all times be
subject to review by the Trustees. For the fiscal years ended
May 31, 1994, 1993 and 1992, no negotiated brokerage commissions
were paid on portfolio transactions.

As permitted by Section 28(e) of the Securities Exchange Act
of 1934, the Fund may pay to a broker which provides brokerage and
research services to the Fund an amount of disclosed commission in
excess of the commission which another broker would have charged
for effecting that transaction. This practice is subject to a
good faith determination by the Trustees that the price is
reasonable in light of the services provided and to policies that
the Trustees may adopt from time to time. During the fiscal year
ended May 31, 1994, the Fund did not pay commissions as
compensation to any brokers for research services such as
industry, economic and company reviews and evaluations of
securities.

The Adviser's indirect parent, the Life Company, is the
indirect sole shareholder of John Hancock Freedom Securities
Corporation and its subsidiaries, three of which, Tucker Anthony
Incorporated ("Tucker Anthony") John Hancock Distributors, Inc.
("John Hancock Distributors") and Sutro & Company, Inc. ("Sutro"),

-28-
<PAGE> 47

are broker-dealers ("Affiliated Brokers"). Pursuant to procedures
determined by the Trustees and consistent with the above policy of
obtaining best net results, the Fund may execute portfolio
transactions with or through Tucker Anthony, Sutro or John Hancock
Distributors. During the year ended May 31, 1994, the Fund did
not execute any portfolio transactions with then affiliated
brokers.

Any of the Affiliated Brokers may act as broker for the Fund
on exchange transactions, subject, however, to the general policy
of the Fund set forth above and the procedures adopted by the
Trustees pursuant to the 1940 Act. Commissions paid to an
Affiliated Broker must be at least as favorable as those which the
Trustees believe to be contemporaneously charged by other brokers
in connection with comparable transactions involving similar
securities being purchased or sold. A transaction would not be
placed with an Affiliated Broker if the Fund would have to pay a
commission rate less favorable than the Affiliated Broker's
contemporaneous charges for comparable transactions for its other
most favored, but unaffiliated, customers, except for accounts for
which the Affiliated Broker acts as a clearing broker for another
brokerage firm, and any customers of the Affiliated Broker not
comparable to the Fund as determined by a majority of the Trustees
who are not interested persons (as defined in the 1940 Act) of the
Fund, the Adviser or the Affiliated Brokers. Because the Adviser,
which is affiliated with the Affiliated Brokers, has, as an
investment adviser to the Fund, the obligation to provide
investment management services, which includes elements of
research and related investment skills, such research and related
skills will not be used by the Affiliated Brokers as a basis for
negotiating commissions at a rate higher than that determined in
accordance with the above criteria. The Fund will not effect
principal transactions with Affiliated Brokers. The Fund may,
however, purchase securities from other members of underwriting
syndicates of which Tucker Anthony, Sutro and John Hancock
Distributors are members, but only in accordance with the policy
set forth above and procedures adopted and reviewed periodically
by the Trustees.

TRANSFER AGENT SERVICES

John Hancock Investor Services Corporation, P.O. Box 9116,
Boston, MA 02205-9116, a wholly owned indirect subsidiary of the
Life Company, is the transfer and dividend paying agent for the
Fund. The Fund pays Investor Services an annual fee of $25,000
per account plus out-of-pocket expenses.

-29-
<PAGE> 48

CUSTODY OF PORTFOLIO

Portfolio securities of the Fund are held pursuant to a
custodian agreement between the Fund and Investors Bank and Trust
Company ("IBT") 24 Federal Street, Boston, Massachusetts. Under
the custodian agreement, IBT performs custody, portfolio and fund
accounting services.

INDEPENDENT AUDITORS

Ernst & Young LLP, 200 Clarendon Street, Boston,
Massachusetts 02116, has been selected as the independent auditors
of the Fund. The financial statements of the Fund included in the
Prospectus and this Statement of Additional Information have been
audited by Ernst & Young LLP for the periods indicated in their
report thereon appearing elsewhere herein, and are included in
reliance upon such report given upon the authority of such firm as
experts in accounting and auditing.

FINANCIAL STATEMENTS

-30-
<PAGE> 49
<TABLE>
STATEMENT OF NET ASSETS

<CAPTION>
May 31, 1994

FACE
ISSUER AMOUNT VALUE
- ---------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT
- ---------------
AGENCY SHORT-TERM
- -----------------
OBLIGATIONS - 67.65%
- ----------------------
FEDERAL FARM CREDIT
BANK - 11.63%
3.220% to 4.200% due
06/01/94 to 12/05/94 ............. $11,040,000 $10,980,735

FEDERAL HOME LOAN
BANK - 9.73%
3.530% to 4.200% due
06/02/94 to 12/21/94 ............. 9,215,000 9,183,939

FEDERAL HOME
LOAN MORTGAGE
CORPORATION - 25.93%
3.320% to 4.350% due
06/01/94 to 11/28/94 ............. 24,599,000 24,484,086

FEDERAL NATIONAL
MORTGAGE ASSOCIATION - 20.36%
3.300% to 4.250% due
06/13/94 to 12/20/94 ............. 19,365,000 19,221,045
-----------
TOTAL U.S.
GOVERNMENT AGENCY SHORT-TERM
OBLIGATIONS
(Cost $63,869,805) ................. 63,869,805

REPURCHASE
- ----------
AGREEMENTS - 32.34%
- -------------------
First Boston 4.100% due
06/02/94 (dated 05/26/94).
Collateralized by
$4,076,043 value, FNMA
7.500% due 10/01/07.
(Repurchase proceeds
$4,003,189) ...................... 4,000,000 4,002,733

Kidder Peabody 4.125% due
06/02/94 (dated 05/26/94).
Collateralized by
$4,083,281 value, USTN
7.875% due 04/15/98.
(Repurchase proceeds
$4,003,208) ...................... 4,000,000 4,002,750
Kidder Peabody 4.250% due
06/07/94 (dated 05/31/94).
Collateralized by
$15,300,566 value,
FHLMC ARM
4.502% due 03/01/24.
(Repurchase proceeds
$15,012,396)...................... 15,000,000 15,001,771
Merrill Lynch 4.100% due
06/01/94 (dated 05/31/94).
Collateralized by
$7,670,300 value, USTN
7.500% due 02/29/96.
(Repurchase proceeds
$7,516,856) ...................... 7,516,000 7,516,856
-----------
TOTAL REPURCHASE
AGREEMENTS
(Cost $30,524,110) ................. 30,524,110
-----------
TOTAL INVESTMENTS - 99.99%
(Cost $94,393,915) ................. 94,393,915

CASH AND OTHER ASSETS,
LESS LIABILITIES - 0.01% ........... 13,632
-----------
NET ASSETS, at value,
equivalent to $1.00 per
share for 94,407,547 shares
($.01 par value)
outstanding - 100.00% ............ $94,407,547
===========
<FN>
Abbreviations used above:
ARM = Adjustable Rate Mortgage
FHLMC = Federal Home Loan Mortgage Corporation
FNMA = Federal National Mortgage Association
USTN = United States Treasury Note
</TABLE>

See Notes to Financial Statements.
3
<PAGE> 50
STATEMENT OF OPERATIONS / STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
STATEMENT OF OPERATIONS
Year Ended May 31, 1994

<S> <C> <C>
INVESTMENT INCOME
Interest ............................. $4,570,649

EXPENSES
Management fees ...................... $ 690,268
Custodian fees ....................... 56,918
Administrative service fees .......... 48,703
Registration fees .................... 27,300
Trustees' fees and expenses .......... 22,717
Audit and legal fees ................. 20,456
Insurance expense .................... 11,721
Transfer agent fees .................. 9,357
Shareholder reports .................. 6,661
Miscellaneous ........................ 5,776
Less: Expense reimbursement .......... (416,653) 483,224
--------- ----------
NET INVESTMENT INCOME ................ $4,087,425
==========
</TABLE>
<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS

<CAPTION>
YEAR ENDED MAY 31,
---------------------------
1994 1993
------------ ------------
<S> <C> <C>
OPERATIONS
Net investment income ............ $ 4,087,425 $ 3,999,643

DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income ............ (4,087,425) (3,999,643)

SHARE TRANSACTIONS
Increase (decrease) in
shares outstanding ............. (28,698,933) 13,748,591
------------ ------------
Increase (decrease) in
net assets ..................... (28,698,933) 13,748,591

NET ASSETS
Beginning of year ................ 123,106,480 109,357,889
------------ ------------
End of year ...................... $ 94,407,547 $123,106,480
============ ============
</TABLE>

See Notes to Financial Statements.
4

<PAGE> 51
<TABLE>
FINANCIAL HIGHLIGHTS
<CAPTION>
YEAR ENDED MAY 31,
----------------------------------------------------
1994 1993 1992 1991 1990
------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Per share income and capital changes for a
share outstanding during each year:
Net asset value, beginning of year....................... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00

INCOME FROM INVESTMENT OPERATIONS
Net investment income.................................... 0.030 0.032 0.048 0.072 0.083

LESS DISTRIBUTIONS
Dividends from net investment income..................... (0.030) (0.032) (0.048) (0.072) (0.083)
------- -------- -------- -------- --------
Net asset value, end of year............................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======= ======== ======== ======== ========
TOTAL RETURN............................................. 3.04% 3.25% 4.95% 7.42% 8.66%
======= ======== ======== ======== ========

RATIOS AND SUPPLEMENTAL DATA
Ratio of expenses to average net assets.................. 0.65% 0.67% 0.68% 0.66% 0.66%
Ratio of expense reimbursement to average net assets..... (0.30)% (0.32)% (0.33)% (0.31)% (0.31)%
------- -------- -------- -------- --------
Ratio of net expenses to average net assets.............. 0.35% 0.35% 0.35% 0.35% 0.35%
======= ======== ======== ======== ========
Ratio of net investment income to average net assets..... 2.96% 3.19% 4.86% 7.21% 8.27%
Net Assets, end of year (in thousands)................... $94,408 $123,106 $109,358 $200,092 $164,509
</TABLE>

See Notes to Financial Statements.
5

<PAGE> 52
NOTES TO FINANCIAL STATEMENTS

May 31, 1994

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

Transamerica Current Interest (the "Trust") is a diversified, open-end
management investment company registered under the Investment Company Act of
1940, as amended. Transamerica U.S. Government Cash Reserve (the "Fund") is
the only series of the Trust presently issuing shares. The Trust was
reorganized from a Texas corporation to a Massachusetts business trust on
February 18, 1992. The following is a summary of significant accounting
policies consistently followed by the Fund.

(1) The Fund values its investment securities at amortized cost
(original cost plus amortized discount or accrued interest).

(2) The Fund may invest in repurchase agreements which are
collateralized by underlying debt securities. The Fund will make payment for
such securities only upon physical delivery or evidence of book entry transfer
to the account of the custodian bank. The seller is required to maintain the
value of the underlying security at not less than the repurchase proceeds due
the Fund.

(3) With respect to U.S. government and U.S. government agency
securities in which the Fund may invest, only U.S. Treasury and Government
National Mortgage Association (GNMA) issues are backed by the full faith and
credit of the U.S. government. All other government issues are backed by the
issuing agencies and their general ability to borrow from the U.S. government.

(4) Security transactions are accounted for on the trade date. Interest
income is accrued daily. The identified cost of securities at May 31, 1994 is
the same for both financial reporting and federal income tax purposes.

(5) Distributions of the Fund are declared daily and reinvested in Fund
shares or paid to shareholders monthly. Distributions payable to shareholders
at May 31, 1994 were $140,048.

(6) No provision for federal income taxes has been made since it is the
Fund's intention to distribute all of its taxable income and profits to its
shareholders and to comply with the requirements applicable to regulated
investment companies and the minimum distribution requirements of the Internal
Revenue Code.

(7) The Fund reports custodian fees net of credits and charges
resulting from cash positions in the custodial accounts greater than or less
than the amounts required to settle fund transactions. For the year ended May
31, 1994, these amounts were $9,231 and $8,201, respectively.

<TABLE>
NOTE B - MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The management fee is payable monthly to Transamerica Fund Management
Company (the "Investment Adviser") and is calculated based on the following
schedule:

<CAPTION>
AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
<S> <C>
First $500 million 0.500%
Next $250 million 0.425%
Next $250 million 0.375%
Next $500 million 0.350%
Next $500 million 0.325%
Next $500 million 0.300%
Over $2.5 billion 0.275%
</TABLE>

The Investment Adviser has voluntarily agreed to reimburse the Fund for
all normal operating expenses in excess of 0.35%, on an annual basis, of the
Fund's average daily net assets. For the year ended May 31, 1994, the Investment
Adviser voluntarily reimbursed the Fund $416,653 pursuant to this agreement. At
May 31, 1994, the management fee payable to the Investment Adviser was $19,786.

The Investment Adviser provides administrative services to the Fund
pursuant to an administrative service agreement. During the year ended May 31,
1994, the Fund paid or accrued administrative service fees of $35,000 to the
Investment Adviser, of which $2,747 was payable at May 31, 1994.

The Fund paid no compensation directly to any officer. Certain officers
and a trustee of the Trust are affiliated with the Investment Adviser.

During the year ended May 31, 1994, the Fund paid legal fees of $6,000
to Baker & Botts. A partner with Baker & Botts is an officer of the Trust.

<PAGE> 53
NOTES TO FINANCIAL STATEMENTS

Continued

NOTE C - PLAN OF DISTRIBUTION

Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund is
authorized to finance activities related to the distribution of its shares. The
distribution plan complies with the regulations covering maximum sales
charges assessed by mutual funds distributed through securites dealers that
are NASD members. The plan permits the Fund to make payments to Transamerica
Fund Distributors, Inc. (the "Distributor"), an affiliate of the Investment
Adviser and principal underwriter of the Fund, of up to 0.15% annually of
average daily net assets for certain distribution costs such as service fees
paid to dealers, production and distribution of prospectuses to prospective
investors, services provided to new and existing shareholders and other
distribution related activities. During the year ended May 31, 1994, the Fund
paid no expenditures pursuant to this plan.

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

<TABLE>
NOTE D - SHARE AND RELATED TRANSACTIONS

A summary of share transactions follows:
<CAPTION>
YEAR ENDED MAY 31,
------------------------------------------------------------
1994 1993
----------------------------- ----------------------------
SHARES DOLLARS SHARES DOLLARS
------------ ------------- ------------ -------------
<S> <C> <C> <C> <C>
Shares sold ........................................ 447,900,058 $ 447,900,058 391,565,697 $ 391,565,697
Shares issued in reinvestment of distributions ..... 1,376,895 1,376,895 1,431,930 1,431,930
Shares redeemed .................................... (477,975,886) (477,975,886) (379,249,036) (379,249,036)
------------ ------------- ------------ -------------
Net increase (decrease) in shares outstanding ...... (28,698,933) $ (28,698,933) 13,748,591 $ 13,748,591
============ ============= ============ =============
</TABLE>

At May 31, 1994, net assets were comprised of $94,407,547 in capital paid-in,
representing 94,407,547 shares outstanding (unlimited shares authorized).

7
<PAGE> 54

REPORT OF INDEPENDENT AUDITORS

Shareholders and Board of Trustees
Transamerica U.S. Government Cash Reserve,
a series of Transamerica Current Interest

We have audited the accompanying statement of net assets of Transamerica
U.S. Government Cash Reserve, a series of Transamerica Current Interest, as of
May 31, 1994, 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 periods indicated
therein. 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 May
31, 1994, by correspondence with the custodian and brokers. 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 Transamerica U.S. Government Cash Reserve, a series of Transamerica
Current Interest, at May 31, 1994, 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 indicated
periods, in conformity with generally accepted accounting principles.

/s/ ERNST & YOUNG

Houston, Texas
June 27, 1994

8
<PAGE> 55

<TABLE>
- --------------------------------------------------------------------------------
STATEMENTS OF NET ASSETS
- --------------------------------------------------------------------------------
UNAUDITED

November 30, 1994

<CAPTION>
FACE
ISSUER AMOUNT VALUE
- -----------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT
- ---------------
AGENCY SHORT-TERM
- -----------------
OBLIGATIONS - 66.52 %
- ---------------------
FEDERAL FARM CREDIT
BANK - 12.69 %
3.520% to 5.640% due
12/02/94 to 06/30/95. . . . $13,295,000 $ 13,236,580

FEDERAL HOME LOAN
BANK-29.55%
3.530% to 5.830% due
12/02/94 to 07/21/95 . . . . 31,050,000 30,821,600

FEDERAL HOME
LOAN MORTGAGE
CORPORATION- 10.95%
4.910% to 5.600% due
12/02/94 to 04/03/95 . . . . 11,510,000 11,419,532

FEDERAL NATIONAL
MORTGAGE
ASSOCIATION- 13.33%
3.700% to 5.450% due
12/01/94 to 03/20/95 . . . . 13,975,000 13,899,456
------------
TOTAL U.S. GOVERNMENT
AGENCY SHORT-TERM
OBLIGATIONS
(Cost $69,377,168) . . . . . 69,377,168

REPURCHASE
- ----------
AGREEMENTS-33.57 %
- ------------------
First Boston 5.520% due
12/06/94 (dated 11/29/94)
Collateralized by
$10,201,828 value,
FNMA ARM 4.991%
due 02/01/24
(Repurchase proceeds
$10,010,733) . . . . . . . . 10,000,000 10,003,067
Morgan Stanley 5.650% due
12/01/94 (dated
11/30/94). Collateralized
by $25,538,641 value,
USTN 5. 125% due
12/31/98. (Repurchase
proceeds $25,003,923) . . . . 25,000,000 25,003,923
------------
TOTAL REPURCHASE
AGREEMENTS
(Cost $35,006,990). . . . . . 35,006,990
------------
TOTAL
INVESTMENTS - 100.09%
(Cost $104,384,158) . . . . . 104,384,158

CASH AND OTHER
ASSETS, LESS
LIABILITIES - (0.09)% . . . . (93,145)
------------
NET ASSETS, at value,
equivalent to $1.00 per
share for 104,291,013
shares ($.01 par value)
outstanding- 100.00% . . . . $104,291,013
============
<FN>

Abbreviations used above:
ARM = Adjustable Rate Mortgage
FNMA = Federal National Mortgage
Association
USTN = United States Treasury Notes

</TABLE>

See Notes to Financial Statements.

4
<PAGE> 56
- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS / STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
UNAUDITED

<TABLE>

STATEMENT OF OPERATIONS
Six Months Ended November 30, 1994
<S> <C> <C>
INVESTMENT INCOME
Interest. . . . . . . . . . . . . . $2,452,646
. . . . . . . . . . . . . . . . . .
EXPENSES . . . . . . . . . . . . .

Management fees . . . . . . . . . . $ 264,995
Administrative service fees . . . . 23,854
Custodian fees . . . . . . . . . . 21,602
Audit and legal fees . . . . . . . 15,520
Trustees' fees and expenses . . . . 14,589
Registration fees . . . . . . . . . 14,207
Insurance expense . . . . . . . . . 6,836
Transfer agent fees . . . . . . . . 4,021
Shareholder reports . . . . . . . . 1,955
Miscellaneous . . . . . . . . . . . 507
Less: Expense reimbursement . . . . (182,590) 185,496
--------- ----------
NET INVESTMENT INCOME. . . . . . $2,267,150
==========
</TABLE>
See Notes to Financial Statements.

<TABLE>
STATEMENTS OF CHANGES IN NET ASSETS

<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
NOVEMBER 30, MAY 31,
1994 1994
------------ ------------
<S> <C> <C>
OPERATIONS
Net investment income . . . . . . $ 2,267,150 $ 4,087,425

DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income . . . . . . (2,267,150) (4,087,425)

SHARE TRANSACTIONS
Increase (decrease) in
shares outstanding . . . . . . . 9,883,466 (28,698,933)
------------ ------------
Increase (decrease) in
net assets . . . . . . . . . . . 9,883,466 (28,698,933)

NET ASSETS

Beginning of period . . . . . . . 94,407,547 123,106,480
------------ ------------
End of period . . . . . . . . . . $104,291,013 $ 94,407,547
============ ============
</TABLE>

See Notes to Financial Statements.

5
<PAGE> 57

<TABLE>
FINANCIAL HIGHLIGHTS
UNAUDITED

<CAPTION>
SIX MONTHS
ENDED YEAR ENDED MAY 31,
NOVEMBER 30, --------------------------------------------------------
1994(1) 1994 1993 1992 1991 1990
------------ -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Per share income and capital changes for a share
outstanding during each period:
Net asset value, beginning of period . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00

INCOME FROM INVESTMENT OPERATIONS
Net investment income . . . . . . . . . . . . . 0.021 0.030 0.032 0.048 0.072 0.083

LESS DISTRIBUTIONS
Dividends from net investment income . . . . . . (0.021) (0.030) (0.032) (0.048) (0.072) (0.083)
-------- -------- -------- -------- -------- --------
Net asset value, end of period . . . . . . . . . $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======== ======== ======== ======== ========
TOTAL RETURN(2) . . . . . . . . . . . . . . . . 2.15% 3.04% 3.25% 4.95% 7.42% 8.66%
======== ======== ======== ======== ======== ========

RATIOS AND SUPPLEMENTAL DATA
Ratio of expenses to average net assets . . . . . 0.35% 0.65% 0.67% 0.68% 0.66% 0.66%
Ratio of expense reimbursement to average
net assets . . . . . . . . . . . . . . . . . . (0.17)% (0.30)% (0.32)% (0.33)% (0.31)% (0.31)%
-------- -------- -------- -------- -------- --------
Ratio of net expenses to average net assets . . . 0.18% 0.35% 0.35% 0.35% 0.35% 0.35%
======== ======== ======== ======== ======== ========

Ratio of net investment income to average
net assets . . . . . . . . . . . . . . . . . . . 2.14% 2.96% 3.19% 4.86% 7.21% 8.27%
Net Assets, end of period (in thousands) . . . . $104,291 $ 94,408 $123,106 $109,358 $200,092 $164,509

<FN>

(1) Financial highlights, including total return, have not been annualized.
(2) Total return includes the benefit of a voluntary expense reimbursement by the investment adviser. Without such benefit,
the total return would be lower.

</TABLE>

See Notes to Financial Statements.

6
<PAGE> 58
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
UNAUDITED

November 30, 1994

NOTE A-SIGNIFICANT ACCOUNTING POLICIES

John Hancock Current Interest, formerly Transamerica Current Interest, (the
"Trust") is a diversified, open-end management investment company registered
under the Investment Company Act of 1940, as amended. John Hancock U.S.
Government Cash Reserve, formerly Transamerica U.S. Government Cash Reserve,
(the "Fund") is the only series of the Trust presently issuing shares. The
Trust was reorganized from a Texas corporation to a Massachusetts business
trust on February 18, 1992.
On December 16, 1994, the shareholders of each of Transamerica's mutual
funds approved the agreement to combine Transamerica Fund Management Company
with John Hancock Mutual Funds. This agreement became effective December 22,
1994. The following is a summary of significant accounting policies
consistently followed by the Fund.
(1) The Fund values its investment securities at amortized cost (original
cost plus amortized discount or accrued interest).
(2) The Fund may invest in repurchase agreements which are collateralized
by underlying debt securities. The Fund will make payment for such securities
only upon physical delivery or evidence of book entry transfer to the account
of the custodian bank. The seller is required to maintain the value of the
underlying security at not less than the repurchase proceeds due the Fund.
(3) With respect to U.S. government and U.S. government agency securities
in which the Fund may invest, only U.S. Treasury and Government National
Mortgage Association (GNMA) issues are backed by the full faith and credit of
the U.S. government. All other government issues are backed by the issuing
agencies and their general ability to borrow from the U.S. government.
(4) Security transactions are accounted for on the trade date. Interest
income is accrued daily. The identified cost of securities at November 30, 1994
is the same for both finanacial reporting and federal income tax purposes.
(5) Distributions of the Fund are declared daily and reinvested in Fund
shares or paid to shareholders monthly. Income distributions are determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. Distributions payable to shareholders at
November 30, 1994 were $183,211.
(6) No provision for federal income taxes has been made since it is the
Fund's intention to distribute all of its taxable income and profits to its
shareholders and to compply with the requirements applicable to regulated
investment companies and the minimum distribution requirements of the Internal
Revenue Code.
(7) The Fund reports custodian fees net of credits and charges resulting
from cash positions in the custodial accounts greater than or less than the
amounts required to settle fund transactions. For the six months ended
November 30, 1994, these amounts were $4,829 and $4,751, respectively.

NOTE B-MANAGEMENT FEE AND OTHER
TRANSACTIONS WITH AFFILIATES

<TABLE>
The management fee is payable monthly to John Hancock Advisers, Inc. (the
"Investment Adviser"). During the six months ended November 30, 1994, the
management fee was payable to Transamerica Fund Management Company (the
"former Investment Adviser") and was calculated based on the following
schedule:

AVERAGE DAILY NET ASSETS ANNUAL RATE
------------------------ -----------
<S> <C>
First $500 million 0.500%
Next $250 million 0.425%
Next $250 million 0.375%
Next $500 million 0.350%
Next $500 million 0.325%
Next $500 million 0.300%
Over $2.5 billion 0.275%

</TABLE>

At November 30, 1994, the management fee payable to the former Investment
Adviser was $9,775.
The former Investment Adviser provided administrative services to the Fund
pursuant to an administrative service agreement. During the six months ended
November 30, 1994, the Fund paid or accrued administrative service fees of
$17,547 to the former Investment Adviser, of which $3,078 was payable at
November 30, 1994.

The former Investment Adviser voluntarily agreed to reimburse the Fund for
all normal operating expenses in excess of 0.35%, on an annual basis, of the
Fund's average daily net assets. For the six months ended November 30, 1994,
the former Investment Adviser voluntarily reimbursed the Fund $182,590
pursuant to this agreement.
The Fund paid no compensation directly to any officer. Certain officers
of the Trust are affiliated with the Investment Adviser.
During the six months ended November 30, 1994, the Fund paid legal fees of
$3,500 to Baker & Botts. A partner with Baker & Bolts was an officer of the
Trust.

7
<PAGE> 59
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
UNAUDITED

Continued

NOTE C-PLAN OF DISTRIBUTION

Pursuant to Rule 12b-1 under the Investment Company Act of 1940, the Fund is
authorized to finance activities related to the distribution of its shares.
The distribution plan complies with the regulations covering maximum sales
charges assessed by mutual funds distributed through securities dealers
that are NASD members. The plan permits the Fund to make payments to
John Hancock Funds, Inc. (the "Distributor"), an affiliate of the Investment
Adviser and principal underwriter of the Fund, of up to 0.15% annually of
average daily net assets for certain distribution costs such as service fees
paid to dealers, production and distribution of prospectuses to prospective
investors, services provided to new and existing shareholders and other
distribution related activities. During the six months ended November 30, 1994,
the Fund paid no expenditures pursuant to this plan.

<TABLE>
NOTE D- SHARE AND RELATED TRANSACTIONS
A summary of share transactions follows:

<CAPTION>
SIX MONTHS ENDED YEAR ENDED
NOVEMBER 30, 1994 MAY 31, 1994
--------------------------- ---------------------------
SHARES DOLLARS SHARES DOLLARS
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Shares sold . . . . . . . . . . . . . . . . . . . . . 157,625,458 $157,625,458 447,900,058 $447,900,058
Shares issued in reinvestment of distributions . . . 1,240,996 1,240,996 1,376,895 1,376,895
Shares redeemed . . . . . . . . . . . . . . . . . . . (148,982,988) (148,982,988) (477,975,886) (477,975,886)
------------ ------------ ------------ ------------
Net increase (decrease) in shares outstanding . . . . 9,883,466 $ 9,883,466 (28,698,933) $(28,698,933)
============ ============ ============ ============
</TABLE>

At November 30, 1994, net assets were comprised of $104,291,013 in capital
paid-in, representing 104,291,013 shares outstanding (unlimited shares
authorized).

8
<PAGE> 60
[LOGO] ERNST & YOUNG LLP
- One Houston Center - Phone: 713 750 1500
Suite 2400 Fax: 713 750 1501
1221 McKinney Street
Houston, Texas 77010-2007

REPORT OF INDEPENDENT AUDITORS

Shareholders and Board of Trustees
John Hancock U.S. Government Cash Reserve,
a series of John Hancock Current Interest

We have audited the accompanying statement of net assets of John
Hancock U.S. Government Cash Reserve, formerly Transamerica U.S.
Government Cash Reserve, a series of John Hancock Current Interest,
formerly Transamerica Current Interest, as of May 31, 1994, 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 periods indicated
therein. 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 May 31, 1994, by correspondence
with the custodian and brokers. 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 John Hancock U.S. Government Cash Reserve, a
series of John Hancock Current Interest at May 31, 1994, 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 indicated periods, in conformity with
generally accepted accounting principles.

ERNST & YOUNG LLP

June 27, 1994
<PAGE> 61
----------------
JOHN HANCOCK FUNDS SHAREHOLDER SERVICES BULK RATE
P.O. BOX 9656 US POSTAGE
PROVIDENCE, RI 02940-9656 PAID 0303
PERMIT NO. 6011
HOUSTON, TEXAS
----------------

[LOGO] JOHN HANCOCK FUNDS

JOHN HANCOCK
U.S. GOVERMENT
CASH RESERVE

SEMIANNUAL REPORT
November 30, 1994

For The Investor
Seeking Current Income,
Capital Preservation
And Liquidity.

JOHN HANCOCK FUNDS
<PAGE> 62

JOHN HANCOCK CURRENT INTEREST

PART C.

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(a) Financial Statements included in the Registration Statement:

John Hancock U.S. Government Cash Reserve

Statement of Assets and Liabilities as of May 31, 1994.
Statement of Operations of the year ended May 31, 1994.
Statement of changes in Net Asset for each of the two years ended May 31.
Notes to Financial Statements.
Financial Highlights for each of the 10 years ended May 31, 1994.
Auditors' Report Schedule of Investments as of May 31, 1994.

Statement of Assets and Liabilities as of November 30, 1994 (unaudited).
Statement of Operations of the year ended November 30, 1994 (unaudited).
Statement of changes in Net Asset for each of the two years ended
November 30, 1994 (unaudited).
Notes to Financial Statements.
Financial Highlights for each of the 10 years ended November 30, 1994
(unaudited).
Schedule of Investments as of November 30, 1994 (unaudited).

(b) Exhibits:

The exhibits to this Registration Statement are listed in the Exhibit
Index hereto and are incorporated herein by reference.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

No person is directly or indirectly controlled by or under common
control with the Registrant.

<TABLE>
ITEM 26. NUMBER OF HOLDERS OF SECURITIES

As of April 6, 1995, the number of record holders of shares of
Registrant was as follows:

<CAPTION>
TITLE OF CLASS NUMBER OF RECORD HOLDERS
-------------- ------------------------
<S> <C>
U.S. Government Cash Reserve 7,109
</TABLE>

C-1
<PAGE> 63

ITEM 27. INDEMNIFICATION

(a) Indemnification provisions relating to the Registrant's Trustees,
officers, employees and agents is set forth in Article VII of the Registrant's
By Laws included as Exhibit 2 herein.

(b) Under Section 12 of the Distribution Agreement, John Hancock
Funds, Inc. ("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 Mutual Life Insurance
Company ("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 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 not to be
entitled to indemnification.

Article IX of the respective By-Laws of John Hancock Funds and John
Hancock Advisers, Inc. ("the Adviser") provide 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 a director, officer,
employee or agent of the Corporation, or 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),
judgments, 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."

"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."

C-2
<PAGE> 64

Insofar as indemnification for liabilities under the Securities Act of 1933
(the "Act") may be permitted to Trustees, officers and controlling persons of
the Registrant pursuant to the Registrant's Declaration of Trust and By-Laws
of John Hancock Funds, the Adviser, or the Insurance Company or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against policy as expressed in the Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by 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 indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISERS
-----------------------------------------------------

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 Forms ADV (801- 8124) filed under the Investment Advisers
Act of 1940, which is incorporated herein by reference.

ITEM 29. PRINCIPAL UNDERWRITERS

(a) John Hancock Funds acts as principal underwriter for the Registrant and
also serves as principal underwriter or distributor of shares for John Hancock
Cash Reserve, Inc., John Hancock Bond Fund, John Hancock Capital Growth Fund,
John Hancock Current Interest, John Hancock Series, Inc., John Hancock Tax-
Free Bond Fund, John Hancock California Tax-Free Income Fund, John Hancock
Capital Series, John Hancock Limited Term Government Fund, John Hancock
Tax-Exempt Income Fund, John Hancock Sovereign Investors Fund, Inc., John
Hancock Cash Management Fund, John Hancock Special Equities Fund, John Hancock
Sovereign Bond Fund, John Hancock Tax-Exempt Series, John Hancock Strategic
Series, John Hancock Technology Series, Inc., John Hancock World Fund, John
Hancock Investment Trust, John Hancock Institutional Series Trust, Freedom
Investment Trust, Freedom Investment Trust II and Freedom Investment Trust III.

(b) The following table lists, for each director and officer of John Hancock
Funds, the information indicated.

C-3
<PAGE> 65

<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
- ------------------ --------------------- ---------------------
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
Edward J. Boudreau, Jr. Chairman Chairman
101 Huntington Avenue
Boston, Massachusetts

Robert H. Watts Director and Senior None
John Hancock Place Vice President
P.O. Box 111
Boston, Massachusetts

C. Troy Shaver, Jr. President, Chief None
101 Huntington Avenue Executive Officer and
Boston, Massachusetts Director

Robert G. Freedman Director Vice President, Chief
101 Huntington Avenue Investment Officer
Boston, Massachusetts

Stephen M. Blair Executive Vice President- None
101 Huntington Avenue Sales
Boston, Massachusetts

Thomas H. Drohan Senior Vice President Senior Vice President and
101 Huntington Avenue Secretary
Boston, Massachusetts

James W. McLaughlin Senior Vice President None
101 Huntington Avenue and
Boston, Massachusetts Chief Financial Officer

David A. King Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts

James B. Little Senior Vice President Senior Vice President and
101 Huntington Avenue Chief Financial Officer
Boston, Massachusetts
</TABLE>

C-4
<PAGE> 66

<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
- ------------------ --------------------- ---------------------
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
---------------- ---------------- ---------------
<S> <C> <C>
William S. Nichols Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts

John A. Morin Vice President Vice President
101 Huntington Avenue
Boston, Massachusetts

Susan S. Newton Vice President and Vice President,
101 Huntington Avenue Secretary Assistant Secretary
Boston, Massachusetts and Compliance Officer

Christopher M. Meyer Treasurer None
101 Huntington Avenue
Boston, Massachusetts

Stephen L. Brown Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

Thomas E. Moloney Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

Jeanne M. Livermore Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

Richard S. Scipione Director Trustee
John Hancock Place
P.O. Box 111
Boston, Massachusetts

John Goldsmith Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
</TABLE>

C-5
<PAGE> 67

<TABLE>
<S> <C> <C>
Richard O. Hansen Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

John M. DeCiccio Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

Foster Aborn Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

Hugh A. Dunlap, Jr. Director None
101 Huntington Avenue
Boston, Massachusetts

William C. Fletcher Director None
53 State Street
Boston, Massachusetts

James V. Bowhers Executive Vice President None
101 Huntington Avenue
Boston, Massachusetts
</TABLE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
--------------------------------

Registrant maintains the records required to be maintained by it under
Rules 31a-1 (a), 31a-1(b), and 31a-2(a) under the Investment Company Act of
1940 at its principal executive offices at 101 Huntington Avenue,
Boston Massachusetts 02199-7603. Certain records, including records
relating to the Registrant's shareholders and the physical possession of
its securities, may be maintained pursuant to Rule 31a-3 at the main
offices of the Registrant's Transfer Agent and Custodian.

ITEM 31. MANAGEMENT SERVICES
-------------------

Not applicable.

ITEM 32. UNDERTAKINGS
------------

(a) Not applicable

C-6
<PAGE> 68

(b) Not applicable

(c) The Registrant hereby undertakes to furnish each person to whom
a prospectus with respect to a series of the Registrant is delivered with a
copy of the latest annual report to shareholders with respect to that
series upon request and without charge.

(d) The Registrant undertakes to comply with Section 16(c) of the
Investment Company Act of 1940, as amended which relates to the assistance
to be rendered to shareholders by the Trustees of the Registrant in
calling a meeting of shareholders for the purpose of voting upon the
question of the removal of a trustee.

C-7
<PAGE> 69

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Boston and The Commonwealth of Massachusetts on the
8th day of May, 1995.

JOHN HANCOCK CURRENT INTEREST

By: *
----------------------------
Edward J. Boudreau, Jr.
Chairman and Chief Executive
Officer
<TABLE>
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Chairman and Chief Executive
- ------------------------ Officer (Principal Executive
Edward J. Boudreau, Jr. Officer)

/s/James B. Little
- ------------------------
James B. Little Senior Vice President and Chief May 8, 1995
Financial Officer (Principal
Financial and Accounting Officer)

* Trustee
- ------------------------
James F. Carlin

* Trustee
- ------------------------
William H. Cunningham

* Trustee
- ------------------------
Charles L. Ladner
</TABLE>

C-8
<PAGE> 70

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Trustee
- ------------------------
Leo E. Linbeck, Jr.

* Trustee
- ------------------------
Patricia P. McCarter

* Trustee
- ------------------------
Steven R. Pruchansky

* Trustee
- ------------------------
Norman H. Smith

* Trustee
- ------------------------
John P. Toolan

*By: /s/Thomas H. Drohan May 8, 1995
-------------------
Thomas H. Drohan,
Attorney-in-Fact
</TABLE>

C-9
<PAGE> 71

POWER OF ATTORNEY

The undersigned Trustee of John Hancock Current Interest, John Hancock
Capital Growth Fund, John Hancock Investment Trust, John Hancock California
Tax-Free Income Fund, John Hancock Tax-Free Bond Fund and John Hancock Bond
Fund, (each a "Trust"), and Director of John Hancock Series, Inc. and John
Hancock Cash Reserve, Inc. (each a "Corporation"), does hereby severally
constitute and appoint Edward J. Boudreau, Jr., Thomas H. Drohan, Robert G.
Freedman and James B. Little, and each acting singly, to be my true, sufficient
and lawful attorneys, with full power to each of them, and each acting singly,
to sign for me, in my name and in the capacity indicated below, any
Registration Statement on Form N-1A and any Registration Statement on Form N-14
to be filed by the Trust or the Corporation under the Investment Company Act of
1940, as amended (the "1940 Act"), and under the Securities Act of 1933, as
amended (the "1933 Act"), and any and all amendments to said Registration
Statements, with respect to the offering of its shares of beneficial interest
and any and all other documents and papers relating thereto, and generally to
do all such things in my name and on my behalf in the capacity indicated to
enable the Trust or the Corporation to comply with the 1940 Act and the 1933
Act, and all requirements of the Securities and Exchange Commission thereunder,
hereby ratifying and confirming my signature as it may be signed by said
attorneys or each of them to any such Registration Statements and any and all
amendments thereto.

IN WITNESS WHEREOF, I have hereunder set my hand on this Instrument
the 13th day of December, 1994.

/s/William H. Cunningham
___________________________________
William H. Cunningham

<PAGE> 72

POWER OF ATTORNEY