HANCOCK JOHN CURRENT INTEREST, 485BPOS, 1999-07-28

HANCOCK JOHN CURRENT INTEREST
485BPOS, 1999-07-28

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REGISTRATION NOS. 2-50931
811-02485

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 59
and/or
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 37
(Check appropriate box or boxes)

JOHN HANCOCK CURRENT INTEREST
(Exact Name of Registrant as Specified in Charter)
101 Huntington Avenue
Boston, Massachusetts 02199-7603
(Address of Principal Executive Offices)
Registrant's Telephone Number including Area Code
(617) 375-1700

SUSAN S. NEWTON
Vice President and Secretary
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
(Name and Address of Agent for Service)

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:

It is proposed that this filing will become effective (check appropriate box)
[ ] immediately upon filing pursuant to paragraph (b)
[X] on August 1, 1999 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)
[ ] on (date) pursuant to paragraph (a) of Rule 485

if appropriate, check the following box:

[ ] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

<PAGE>

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

JOHN HANCOCK

Money
Market Funds

[LOGO] Prospectus
August 1, 1999

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

As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these funds or determined whether the information in
this prospectus is adequate and accurate. Anyone who indicates otherwise is
committing a federal crime.

Money Market Fund

U.S. Government Cash Reserve

[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm

101 Huntington Avenue, Boston, Massachusetts 02199-7603

<PAGE>

Contents

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

A fund-by-fund summary Money Market Fund 4
of goals, strategies, risks,
performance and expenses. U.S. Government Cash Reserve 6

Policies and instructions for Your account
opening, maintaining and
closing an account in Choosing a share class 8
either money market fund. How sales charges are calculated 8
Opening an account 9
Buying shares 10
Selling shares 11
Transaction policies 13
Dividends and account policies 13
Additional investor services 14

Further information on both Fund details
money market funds.
Business structure 15
Financial highlights 16

For more information back cover
<PAGE>

Overview

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

JOHN HANCOCK MONEY MARKET FUNDS

These funds seek current income and preservation of capital. Each fund invests
primarily in money market instruments, strives to maintain a stable $1 share
price and offers checkwriting for easy liquidity.

WHO MAY WANT TO INVEST

These funds may be appropriate for people who:

o require stability of principal

o are seeking a mutual fund for the money market portion of an asset allocation
portfolio

o need to "park" their money temporarily

o are investing emergency reserves

Money market funds may NOT be appropriate if you:

o want federal deposit insurance

o are seeking an investment that is likely to outpace inflation

o are investing for growth or maximum current income

RISKS OF MUTUAL FUNDS

Mutual funds are not bank deposits and are not insured or guaranteed by any
bank, government agency or the Federal Deposit Insurance Corporation. Because
you could lose money by investing in these funds, be sure to read all risk
disclosure carefully before investing.

THE MANAGEMENT FIRM

All John Hancock money market funds are managed by John Hancock Advisers, Inc.
Founded in 1968, John Hancock Advisers is a wholly owned subsidiary of John
Hancock Mutual Life Insurance Company and manages more than $30 billion in
assets.

FUND INFORMATION KEY

Concise fund-by-fund descriptions begin on the next page. Each description
provides the following information:

[Clip Art] Goal and strategy The fund's particular investment goals and the
strategies it intends to use in pursuing those goals.

[Clip Art] Main risks The major risk factors associated with the fund.

[Clip Art] Past performance The fund's total return, measured year-by-year and
over time.

[Clip Art] Your expenses The overall costs borne by an investor in the fund,
including sales charges and annual expenses.

3
<PAGE>

Money Market Fund

GOAL AND STRATEGY

[Clip Art] The fund seeks the maximum current income that is consistent with
maintaining liquidity and preserving capital. The fund intends to maintain a
stable $1 share price.

The fund invests only in dollar-denominated securities rated within the two
highest short-term credit categories and their unrated equivalents. These
securities may be issued by:

o U.S. and foreign companies

o U.S. and foreign banks

o U.S. and foreign governments

o U.S. agencies, states and municipalities

o International organizations such as the World Bank and the International
Monetary Fund

The fund may also invest in repurchase agreements based on these securities.

The fund maintains an average dollar-weighted maturity of 90 days or less, and
does not invest in securities with remaining maturities of more than 13 months.

In managing the portfolio, the management team searches aggressively for the
best values on securities that meet the fund's credit and maturity requirements.
The team tends to favor corporate securities and looks for relative yield
advantages between, for example, a company's secured and unsecured short-term
debt obligations.

================================================================================

PORTFOLIO MANAGERS

Team of money market research analysts and portfolio managers

YIELD INFORMATION

For the fund's 7-day effective yield, call 1-800-225-5291

PAST PERFORMANCE

[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time This information may help
provide an indication of the fund's risks. On December 22, 1994, John Hancock
Advisers, Inc. became the investment adviser of the fund. The fund's total
returns for the previous periods during which the fund was advised by another
adviser are not shown. The average annual figures reflect sales charges; the
year-by-year figures do not, and would be lower if they did. All figures assume
dividend reinvestment. Past performance does not indicate future results.

- --------------------------------------------------------------------------------
Class B year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------

1995 1996 1997 1998

3.77% 3.27% 3.97% 3.83%

1999 total return as of June 30: 1.61%
Best quarter: 4Q, '97, 1.02% Worst quarter: 3Q, '96, 0.78%

- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/98
- --------------------------------------------------------------------------------
Life of Life of
1 year Class A Class B
Class A - began 9/12/95 4.71% 4.54% --
Class B - since 12/22/94 -1.17% -- 3.49%
Class C - began 5/1/98 -- -- --

<PAGE>

MAIN RISKS

[Clip Art] The value of your investment will be most affected by short-term
interest rates. If interest rates rise sharply, the fund could underperform its
peers or lose money.

An issuer of securities held by the fund could default or have its credit rating
downgraded.

Foreign investments carry additional risks, including inadequate or inaccurate
financial information and social or political upheavals.

An investment in the fund is not insured or guaranteed by the Federal Deposit
Insurance Corporation or any other government agency. Although the fund seeks to
preserve the value of your investment at $1 per share, it is possible to lose
money by investing in the fund.

================================================================================

YOUR EXPENSES

[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by
shareholders indirectly.

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Shareholder transaction expenses+ Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price none none none
Maximum deferred s ales charge (load)
as a % of purchase or sale price,
whichever is less none 5.00% 1.00%

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Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee 0.50% 0.50% 0.50%
Distribution and service (12b-1) fees 0.25% 1.00% 1.00%
Other expenses 0.36% 0.36% 0.36%
Total fund operating expenses 1.11% 1.86% 1.86%
Expense reduction (at least until 8/1/00)* 0.20% 0.10% 0.10%
Annual operating expenses 0.91% 1.76% 1.76%

The hypothetical example below shows what your expenses would be if you
invested $10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.

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Expenses Year 1 Year 3 Year 5 Year 10
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Class A $ 93 $333 $ 592 $1,334
Class B - with redemption $679 $875 $1,197 $1,975
- without redemption $179 $575 $ 997 $1,975
Class C - with redemption $279 $575 $ 997 $2,172
- without redemption $179 $575 $ 997 $2,172

* Reflects advisers agreement to limit maximum rate of management fee to 0.40%
and distributors agreement to limit 12b-1 fee on Class A shares to 0.15%
until at least 8/1/00.
+ A $4.00 fee may be charged for wire redemptions.

FUND CODES

Class A
- ---------------------------
Ticker JHMXX
CUSIP 478031107
Newspaper --
SEC number 811-2485
JH fund number 44

Class B
- ---------------------------
Ticker TSMXX
CUSIP 478031206
Newspaper --
SEC number 811-2485
JH fund number 144

Class C
- ---------------------------
Ticker --
CUSIP 478031305
Newspaper --
SEC number 811-2485
JH fund number 544

5
<PAGE>

U.S. Government Cash Reserve

GOAL AND STRATEGY

[Clip Art] The fund seeks the maximum current income that is consistent with
maintaining liquidity and preserving capital. It invests substantially in
short-term U.S. government securities and seeks to maintain a stable $1 share
price.

The fund invests in securities that are issued or guaranteed as to principal and
interest by the U.S. government, its agencies or instrumentalities.

The fund may also invest in repurchase agreements based on these securities.

The fund maintains an average dollar-weighted maturity of 90 days or less, and
does not invest in securities with remaining maturity of more than 13 months.

In managing the portfolio, the management team searches aggressively for the
best values on securities that meet the fund's credit and maturity requirements.

================================================================================

PORTFOLIO MANAGERS

Team of U.S. government securities research analysts and portfolio managers

YIELD INFORMATION

For the fund's 7-day effective yield, call 1-800-225-5291

MINIMUM INITIAL INVESTMENT: $20,000

PAST PERFORMANCE

[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time. This information may help
provide an indication of the fund's risks. On December 22, 1994, John Hancock
Advisers, Inc. became the investment adviser of the fund. The fund's total
returns for the previous periods during which the fund was advised by another
adviser are not shown. All figures assume dividend reinvestment. Past
performance does not indicate future results.

- --------------------------------------------------------------------------------
Year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------
1995 1996 1997 1998

5.23% 4.82% 5.42% 5.20%

1999 total return as of June 30: 2.32%
Best quarter: 4Q, '97, 1.35% Worst quarter: 2Q, '96, 1.13%

- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/98
- --------------------------------------------------------------------------------
Life of
1 year Class A
Class A - since 12/24/94 5.20% 5.18%

6
<PAGE>

MAIN RISKS

[Clip Art] The value of your investment will be most affected by short-term
interest rates. If interest rates rise sharply, the fund could underperform its
peers or lose money.

The U.S. government does not guarantee the market value or the current yield of
government securities.

Not all of the U.S. government securities are backed by the full faith and
credit of the U.S. government.

================================================================================

YOUR EXPENSES

[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by
shareholders indirectly.

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Shareholder transaction expenses+ Class A
- --------------------------------------------------------------------------------

Maximum sales charge (load) on purchases
as a % of purchase price none
Maximum deferred sales charge (load)
as a % of purchase or sale price,
whichever is less none

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Annual operating expenses Class A
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Management fee 0.50%
Distribution and service (12b-1) fees 0.15%
Other expenses 0.23%
Total fund operating expenses 0.88%
Expense reimbursement (at least until 8/1/00)* 0.53%

Net annual operating expenses 0.35%

* Reflects distributors agreement to suspend 12b-1 fee and advisers agreement
to limit expenses to 0.35% until at least 8/1/00.
+ A $4.00 fee may be charged for wire redemptions.

FUND CODES

Class A
- ---------------------------
Ticker TGVXX
CUSIP 41014N107
Newspaper --
SEC number 811-2485
JH fund number 43

7
<PAGE>

Your account

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CHOOSING A SHARE CLASS

Each share class has its own cost structure including a Rule 12b-1 plan that
allows it to pay fees for the sale, distribution and service of its shares. Your
financial represenative can help you decide which share class is best for you.

- --------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------

o No sales charges.

o Distribution and service (12b-1) fees of 0.15% for Money Market Fund and
0.00% for U.S. Government Cash Reserve (fees are net of reductions by the
distributor).

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Class B - for Money Market Fund only
- --------------------------------------------------------------------------------

o No front-end sales charge.

o Distribution and service (12b-1) fees of 1.00%.

o A deferred sales charge, as described at right.

o Automatic conversion to Class A shares after eight years thus reducing future
annual expenses.

- --------------------------------------------------------------------------------
Class C - for Money Market Fund only
- --------------------------------------------------------------------------------

o No front-end sales charge.

o Distribution and service (12b-1) fees of 1.00%.

o A 1.00% contingent deferred sales charge on shares sold within one year of
purchase.

o No automatic conversion to Class A shares, so annual expenses continue at the
Class C level throughout the life of your investment.

For actual past expenses of each share class, see the fund-by-fund information
earlier in this prospectus.

Because 12b-1 fees are paid on an ongoing basis, Class B and Class C
shareholders will end up paying more expenses over the long term than Class A
shareholders.

Investors purchasing $1 million or more of Class B or Class C shares may want to
consider the lower operating expenses of Class A shares.

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HOW SALES CHARGES ARE CALCULATED

Class B and Class C Money Market Fund shares are offered at their net asset
value per share, without any initial sales charge. However, you may be charged a
contingent deferred sales charge (CDSC) on shares you sell within a certain time
after you bought them, as described in the tables below. There is no CDSC on
shares acquired through reinvestment of dividends. The CDSC is based on the
original purchase cost or the current market value of the shares being sold,
which-ever is less. The CDSCs are as follows:

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Money Market Fund Class B deferred charges
- --------------------------------------------------------------------------------

Years after purchase CDSC on shares being sold

1st year 5.00%
2nd year 4.00%
3rd or 4th year 3.00%
5th year 2.00%
6th year 1.00%
After 6th year None

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Money Market Fund Class C deferred charges
- --------------------------------------------------------------------------------
Years after purchase CDSC on shares being sold
1st year 1.00%
After 1st year none

All purchases made during a calendar month are counted as having been made on
the first day of that month.

CDSC calculations are based on the number of shares involved, not on the value
of your account. To keep your CDSC as low as possible, each time you place a
request to sell shares we will first sell any shares in your account that carry
no CDSC. If there are not enough of these to meet your request, we will sell
those shares that have the lowest CDSC.

For purposes of this CDSC, all purchases made during a calendar month are
counted as having been made on the first day of that month.

8 YOUR ACCOUNT
<PAGE>

CDSC waivers As long as Signature Services is notified at the time you sell, the
CDSC for Money Market Fund Class B and Class C shares will generally be waived
in the following cases:

o to make payments through certain systematic withdrawal plans

o to make distributions from a retirement plan

o because of shareholder death or disability

To utilize: if you think you may be eligible for a CDSC waiver, contact your
financial representative or Signature Services, or consult the SAI (see the back
cover of this prospectus).

Reinstatement privilege If you sell shares of a John Hancock fund, you may
reinvest some or all of the proceeds in the same share class of any John Hancock
fund within 120 days without a sales charge as long as Signature Services is
notified before you reinvest. If you paid a CDSC when you sold your shares, you
will be credited with the amount of the CDSC. All accounts involved must have
the same registration.

To utilize: contact your financial representative or Signature Services.

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OPENING AN ACCOUNT

1 Read this prospectus carefully.

2 Determine how much you want to invest. The minimum initial investments are as
follows:

o Money Market Fund: $1,000

o non-retirement account: $1,000

o retirement account: $250

o Monthly Automatic Accumulation Plan (MAAP): $25 to open; you must
invest at least $25 a month

o U.S. Government Cash Reserve: $20,000

3 Complete the appropriate parts of the account application, carefully
following the instructions. You must submit additional documentation when
opening trust, corporate or power of attorney accounts. You must notify your
financial representative or Signature Services if this information changes.
For more details, please contact your financial representative or call
Signature Services at 1-800-225-5291.

4 Complete the appropriate parts of the account privileges application. By
applying for privileges now, you can avoid the delay and inconvenience of
having to file an additional application if you want to add privileges later.

5 Make your initial investment using the table on the next page. You and your
financial representative can initiate any purchase, exchange or sale of
shares.

YOUR ACCOUNT 9
<PAGE>

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Buying shares
- --------------------------------------------------------------------------------
Opening an account Adding to an account
By check

[Clip Art] o Make out a check for the o Make out a check for the
investment amount, payable to investment amount payable to
"John Hancock Signature "John Hancock Signature
Services, Inc." Services, Inc."

o Deliver the check and your o Fill out the detachable
completed application to your investment slip from an
financial representative, or account statement. If no slip
mail them to Signature is available, include a note
Services (address below). specifying the fund name,
your share class, your
account number and the
name(s) in which the account
is registered.

o Deliver the check and your
investment slip or note to
your financial
representative, or mail them
to Signature Services
(address below).

By exchange

[Clip Art] o Call your financial o Call your financial
representative or Signature representative or Signature
Services to request an Services to request an
exchange. exchange.

By wire

[Clip Art] o Deliver your completed o Instruct your bank to wire
application to your financial the amount of your investment
representative, or mail it to to:
Signature Services.
First Signature Bank & Trust
o Obtain your account number by Account # 900000260
calling your financial Routing # 211475000
representative or Signature
Services. Specify the fund name, your
share class, your account
o Instruct your bank to wire number and the name(s) in
the amount of your investment which the account is
to: registered. Your bank may
First Signature Bank & Trust charge a fee to wire funds.
Account # 900000260
Routing # 211475000

Specify the fund name, your
choice of share class, the
new account number and the
name(s) in which the account
is registered. Your bank may
charge a fee to wire funds.

o To receive the dividend for
the same day you invest, you
must place your order with
Signature Services by 12 noon
Eastern Time that day.

By phone

[Clip Art] See "By wire" and "By exchange." o Verify that your bank or
credit union is a member of
the Automated Clearing House
(ACH) system.

o Complete the "Invest By
Phone" and "Bank Information"
sections on your account
application.

o Call Signature Services to
verify that these features
are in place on your account.

o Tell the Signature Services
representative the fund name,
your share class, your
account number, the name(s)
in which the account is
registered and the amount of
your investment.

-----------------------------------------
Address:
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA02217-1000

Phone Number: 1-800-225-5291

Or contact your financial representative
for instructions and assistance.
-----------------------------------------

To open or add to an account using the Monthly Automatic
Accumulation Program, see "Additional investor services."

10 YOUR ACCOUNT
<PAGE>

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Selling shares
- --------------------------------------------------------------------------------
Designed for To sell some or all of
your shares
By letter

[Clip Art] o Accounts of any type. o Write a letter of
instruction or complete a
o Sales of any amount. stock power indicating the
fund name, your share
class, your account number,
the name(s) in which the
account is registered and
the dollar value or number
of shares you wish to sell.

o Include all signatures and
any additional documents
that may be required (see
next page).

o Mail the materials to
Signature Services.

o A check will be mailed to
the name(s) and address in
which the account is
registered, or otherwise
according to your letter of
instruction.

By phone

[Clip Art] o Most accounts. o For automated service 24
hours a day using your
o Sales of up to $100,000. touch-tone phone, call the
EASI-Line at
1-800-338-8080.

o To place your order, call
your financial
representative or call
Signature Services between
8 A.M. and 4 P.M. Eastern
Time on most business days.

By wire or electronic funds transfer (EFT)

[Clip Art] o Requests by letter to sell o To verify that the
any amount (accounts of any telephone redemption"
type). privilege is in place on an
account, or to request the
o Requests by phone to sell form to add it to an
up to $100,000 (accounts existing account, call
with telephone redemption Signature Services.
privileges).
o Amounts of $1,000 or more
will be wired on the next
business day. A $4 fee will
be deducted from your
account.

o Amounts of less than $1,000
may be sent by EFT or by
check. Funds from EFT
transactions are generally
available by the second
business day. Your bank may
charge a fee for this
service.

o To receive the dividend for
the same day you sell, your
order must be accepted
after 12 noon Eastern Time
that day.

By exchange

[Clip Art] o Accounts of any type. o Obtain a current prospectus
for the fund into which you
o Sales of any amount. are exchanging by calling
your financial
representative or Signature
Services.

o Call your financial
representative or Signature
Services to request an
exchange.

By check

[Clip Art] o Any account with o Request checkwriting on
checkwriting privileges. your account application.

o Sales of over $100. o Verify that the shares to
be sold were purchased more
than 10 days earlier or
were purchased by wire.

o Write a check for any
amount over $100.

To sell shares through the systematic withdrawal
plan, see "Additional investor services."

YOUR ACCOUNT 11
<PAGE>

Selling shares in writing In certain circumstances, you will need to make your
request to sell shares in writing. You may need to include additional items with
your request, unless they were previously provided to Signature Services and are
still accurate. These items are shown in the table below. You may also need to
include a signature guarantee, which protects you against fraudulent orders. You
will need a signature guarantee if:

o your address of record has changed within the past 30 days

o you are selling more than $100,000 worth of shares

o you are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s)

You will need to obtain your signature guarantee from a member of the Signature
Guarantee Medallion Program. Most brokers and securities dealers are members of
this program. A notary public CANNOT provide a signature guarantee.

- --------------------------------------------------------------------------------
Seller Requirements for written requests
- --------------------------------------------------------------------------------
[Clip Art]

Owners of individual, joint, sole o Letter of instruction.
proprietorship, UGMA/UTMA (custodial
accounts for minors) or general partner o On the letter, the signatures and
accounts. titles of all persons authorized to
sign for the account, exactly as the
account is registered.

o Signature guarantee if applicable
(see above).

Owners of corporate or association o Letter of instruction.
accounts.

o Corporate resolution, certified
within the past 12 months, or a
business/organization certification
form.

o On the letter and the resolution,
the signature of the person(s)
authorized to sign for the account.

o Signature guarantee if applicable
(see above).

Owners or trustees of trust accounts. o Letter of instruction.

o On the letter, the signature(s) of
the trustee(s).

o Copy of the trust document certified
within the past 12 months or a trust
certification form.

o Signature guarantee if applicable
(see above).

Joint tenancy shareholders with rights o Letter of instruction signed by
of survivorship whose co-tenants are surviving tenant.
deceased.
o Copy of death certificate.

o Signature guarantee if applicable
(see above).

Executors of shareholder estates. o Letter of instruction signed by
executor.

o Copy of order appointing executor,
certified within the past 12 months.

o Signature guarantee if applicable
(see above).

Administrators, conservators, guardians o Call 1-800-225-5291 for
and other sellers or account types not instructions.
listed above.

12 YOUR ACCOUNT
<PAGE>

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TRANSACTION POLICIES

Valuation of shares The net asset value per share (NAV) for each fund and class
is determined twice each business day at 12 noon and at the close of regular
trading on the New York Stock Exchange (typically 4 P.M. Eastern Time), by
dividing a class's net assets by the number of its shares outstanding. To help
the fund maintain its $1 constant share price, portfolio investments are valued
at cost, and any discount or premium created by market movements is amortized to
maturity.

Buy and sell prices Investors buy and sell all shares at NAV. When you sell
Class B or Class C shares, the deferred sales charge may be subtracted, as
described earlier.

Execution of requests Each fund is open on those days when the New York Stock
Exchange is open, typically Monday through Friday. Buy and sell requests are
executed at the next NAV to be calculated (normally $1) after Signature Services
receives your request in good order.

At times of peak activity, it may be difficult to place requests by phone.
During these times, consider using EASI-Line or sending your request in writing.

In unusual circumstances, any fund may temporarily suspend the processing of
sell requests, or may postpone payment of proceeds for up to three business days
or longer, as allowed by federal securities laws.

Telephone transactions For your protection, telephone requests may be recorded
in order to verify their accuracy. Also for your protection, telephone
transactions are not permitted on accounts whose names or addresses have changed
within the past 30 days. Proceeds from telephone transactions can only be mailed
to the address of record.

Exchanges You may exchange shares of one John Hancock fund for shares of the
same class of any other. The registration for both accounts involved must be
identical. If no sales charge was paid on Class A shares, you will pay the sales
charge imposed by the new fund. Otherwise, your Class A shares will be exchanged
without a sales charge. Class B and Class C shares will continue to age from the
original date and will retain the same CDSC rate as they had before the
exchange, except that the rate will change to the new fund's rate if that rate
is higher. A CDSC rate that has increased will drop again with a future exchange
into a fund with a lower rate.

To protect the interests of other investors in the fund, a fund may cancel the
exchange privileges of any parties that, in the opinion of the fund, are using
market timing strategies or making more than seven exchanges per owner or
controlling party per calendar year. A fund may also refuse any exchange order.
A fund may change or cancel its exchange policies at any time, upon 60 days'
notice to its shareholders.

Certificated shares All money market funds shares are electronically recorded.
Certificated shares are not available.

Sales in advance of purchase payments When you place a request to sell shares
for which the purchase money has not yet been collected, the request will be
executed in a timely fashion, but the fund will not release the proceeds to you
until your purchase payment clears. This may take up to ten business days after
the purchase.

- --------------------------------------------------------------------------------
DIVIDENDS AND ACCOUNT POLICIES

Account statements In general, you will receive account statements as follows:

o after every transaction (except a dividend reinvestment) that affects your
account balance

o after any changes of name or address of the registered owner(s)

o in all other circumstances, every quarter

Every year you should also receive, if applicable, a Form 1099 tax information
statement, mailed by January 31.

Dividends The funds generally declare dividends daily and pay them monthly. Most
of these funds' dividends are income dividends. Purchases by wire or other
federal funds that are accepted before 12 noon Eastern Time will receive the
dividend declared that day. Other orders, including those that are not
accompanied by federal funds, will begin receiving dividends the following day.
Redemption orders accepted before 12 noon Eastern Time will not receive that
day's dividends.

Dividend reinvestments Most investors have their dividends reinvested in
additional shares of the same fund and class. If you choose this option, or if
you do not indicate any choice, your dividends will be reinvested on the
dividend record date. Alternatively, you can choose to have a check for your
dividends mailed to you. However, if the check is not deliverable, your
dividends will be reinvested.

YOUR ACCOUNT 13
<PAGE>

Taxability of dividends As long as a fund meets the requirements for being a
tax-qualified regulated investment company, which each fund has in the past and
intends to in the future, it pays no federal income tax on the earnings it
distributes to shareholders.

Consequently, dividends you receive from a money market fund, whether reinvested
or taken as cash, are generally considered taxable as ordinary income. Some
dividends paid in January may be taxable as if they had been paid the previous
December.

The Form 1099 that is mailed to you every January details your dividends and
their federal tax category, although you should verify your tax liability with
your tax professional.

Taxability of transactions Any time you sell or exchange shares, it is
considered a taxable event for you. However, as long as a fund maintains a
stable share price, you will not have a gain or loss on shares you sell or
exchange.

Small accounts (non-retirement only) If you draw down a non-retirement account
so that its total value is less than $1,000, you may be asked to purchase more
shares within 30 days. If you do not take action, your fund may close out your
account and mail you the proceeds. Alternatively, Signature Services may charge
you $10 a year to maintain your account. You will not be charged a CDSC if your
account is closed for this reason, and your account will not be closed if its
drop in value is due to fund performance or the effects of sales charges.

Year 2000 compliance The adviser and the funds' service providers are taking
steps to address any year 2000-related computer problems. However, there is some
risk that these problems could disrupt the issuers in which the funds invest,
the funds' operations or financial markets generally.

- --------------------------------------------------------------------------------
ADDITIONAL INVESTOR SERVICES

Monthly Automatic Accumulation Program (MAAP) MAAP lets you set up regular
investments from your paycheck or bank account to the John
Hancock fund(s) of your choice. You determine the frequency and amount of your
investments, and you can terminate your program at any time. To establish:

o Complete the appropriate parts of your account application.

o If you are using MAAP to open an account, make out a check ($25 minimum
except U.S. Government Cash Reserve) for your first investment amount payable
to "John Hancock Signature Services, Inc." Deliver your check and application
to your financial representative or Signature Services.

Systematic withdrawal plan This plan may be used for routine bill payments or
periodic withdrawals from your account. To establish:

o Make sure you have at least $5,000 worth of shares in your account.

o Make sure you are not planning to invest more money in this account (buying
shares during a period when you are also selling shares of the same fund is
not advantageous to you).

o Specify the payee(s). The payee may be yourself or any other party, and there
is no limit to the number of payees you may have, as long as they are all on
the same payment schedule.

o Determine the schedule: monthly, quarterly, semi-annually, annually or in
certain selected months.

o Fill out the relevant part of the account application. To add a systematic
withdrawal plan to an existing account, contact your financial representative
or Signature Services.

Retirement plans John Hancock Funds offers a range of retirement plans,
including traditional, Roth and Education IRAs, SIMPLE plans, SEPs, 401(k) plans
and other pension and profit-sharing plans. Using these plans, you can invest in
any John Hancock fund (except tax-free income funds) with a low minimum
investment of $250 or, for some group plans, no minimum investment at all. To
find out more, call Signature Services at 1-800-225-5291.

14 YOUR ACCOUNT
<PAGE>

Fund details

- --------------------------------------------------------------------------------
BUSINESS STRUCTURE

The diagram below shows the basic business structure used by the John Hancock
money market funds. The funds' board of trustees oversees the funds' business
activities and retains the services of the various firms that carry out the
funds' operations.

The trustees of the Money Market Fund have the power to change this fund's
investment goal without shareholder approval.

Management fees The management fees paid to the investment adviser by the John
Hancock money market funds last year are as follows:

- --------------------------------------------------------------------------------
Fund % of net assets
- --------------------------------------------------------------------------------
Money Market 0.40%
U.S. Government Cash Reserve 0.12%

[The following information was represented as a flow chart in the printed
material.]

-----------------
Shareholders
-----------------

Distribution and
shareholder services

-------------------------------------------------
Financial services firms and
their representatives

Advise current and prospective share-
holders on their fund investments, often
in the context of an overall financial plan.
-------------------------------------------------

-------------------------------------------------
Principal distributor

John Hancock Funds, Inc.

Markets the funds and distributes shares
through selling brokers, financial planners
and other financial representatives.
-------------------------------------------------

------------------------------------------------------
Transfer agent

John Hancock Signature Services, Inc.

Handles shareholder services, including record-
keeping and statements, distribution of dividends,
and processing of buy and sell requests.
------------------------------------------------------

Asset
management

------------------------------------
Investment adviser

John Hancock Advisers, Inc.

Manages the funds' business and
investment activities.
------------------------------------

------------------------------------
Custodian

State Street Bank and Trust Co.

Holds the funds' assets, settles all
portfolio trades and collects most of
the valuation data required for
calculating each fund's NAV.
------------------------------------

------------------------------------
Trustees

Oversee the funds' activities.
------------------------------------

FUND DETAILS 15

<PAGE>

FINANCIAL HIGHLIGHTS

These tables detail the performance of each fund's share classes, including
total return information showing how much an investment in the fund has
increased or decreased each year.

Money Market Fund

Figures audited by Ernst & Young LLP.

<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Class A - year ended: 10/95(1) 10/96 3/97(2) 3/98 3/99
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>

Per share operating performance
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income (loss) 0.01 0.05 0.02 0.05 0.04
Less distributions:
Dividends from net investment income (0.01) (0.05) (0.02) (0.05) (0.04)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00
Total investment return at net asset value(3) (%) 0.64(4) 4.56 1.80(4) 4.92 4.54
Total adjusted investment return at net asset value(3,7) (%) 0.54(4) 4.36 1.60(4) 4.72 4.34
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 20,942 262,475 359,453 312,762 373,634
Ratio of expenses to average net assets (%) 1.07(5) 1.17 1.10(5) 0.89 0.91
Ratio of adjusted expenses to average net assets (8) (%) 1.17(5) 1.37 1.30(5) 1.09 1.11
Ratio of net investment income (loss) to average net assets (%) 4.94(5) 4.41 4.44(5) 4.82 4.44
Ratio of adjusted net investment income to average net assets (8) (%) 4.84(5) 4.21 4.24(5) 4.62 4.24

<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Class B - year ended: 10/94 10/95(6) 10/96 3/97(2) 3/98 3/99
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income (loss) 0.02 0.04 0.04 0.01 0.04 0.04
Less distributions:
Dividends from net investment income (0.02) (0.04) (0.04) (0.01) (0.04) (0.04)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total investment return at net asset value(3) (%) 1.87 4.07 3.71 1.45(4) 4.04 3.66
Total adjusted investment return at net asset value(3,7) (%) -- -- 3.61 1.35(4) 3.94 3.56
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 58,366 54,313 108,162 130,056 81,027 182,062
Ratio of expenses to average net assets (%) 2.06 1.92 2.00 1.96(5) 1.74 1.76
Ratio of adjusted expenses to average net assets(8) (%) -- -- 2.10 2.06(5) 1.84 1.86
Ratio of net investment income (loss) to average net assets (%) 1.97 3.96 3.58 3.60(5) 3.97 3.54
Ratio of adjusted net investment income (loss) to
average net assets(8) (%) -- -- 3.48 3.50(5) 3.87 3.44
</TABLE>

16 FUND DETAILS
<PAGE>

- ------------------------------------------------------------------------------
Class C - year ended: 3/99(1)
- ------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $1.00
Net investment income (loss) 0.03
Less distributions:
Dividends from net investment income (0.03)
Net asset value, end of period $1.00
Total investment return at net asset value(3) (%) 3.29(4)
Total adjusted investment return at net asset value (3,7)(%) 3.19(4)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 1,347
Ratio of expenses to average net assets (%) 1.75(5)
Ratio of adjusted expenses to average net assets (8) (%) 1.85(5)
Ratio of net investment income (loss) to average net assets (%) 3.46(5)
Ratio of adjusted net investment income to average net assets (8) (%) 3.36(5)

(1) Class A shares began operations on September 12, 1995. Class C shares began
operations on May 1, 1998.
(2) Effective March 31, 1997, the fiscal year end changed from October 31 to
March 31.
(3) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
(4) Not annualized.
(5) Annualized.
(6) On December 22, 1994, John Hancock Advisers, Inc. became the investment
adviser of the fund.
(7) An estimated total return calculation that does not take into consideration
fee reductions by the adviser during the periods shown.
(8) Unreimbursed, without fee reductions.

FUND DETAILS 17
<PAGE>

U.S. Government Cash Reserve

Figures audited by Ernst & Young LLP.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Year ended: 5/94 5/95(1) 5/96 3/97(2) 3/98 3/99
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

Per share operating performance
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Net investment income (loss) 0.03 0.05 0.05 0.04 0.05 0.05
Less distributions:
Dividends from net investment income (0.03) (0.05) (0.05) (0.04) (0.05) (0.05)
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total investment return at net asset value(3) (%) 3.04 5.07 5.59 4.37(4) 5.43 5.08
Total adjusted investment return at net asset value(3,5) (%) 2.59 4.54 4.69 3.78(4) 4.87 4.55
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 94,408 29,131 28,907 55,321 74,447 108,216
Ratio of expenses to average net assets (%) 0.35 0.35 0.35 0.35(7) 0.35 0.35
Ratio of adjusted expenses to average net assets(6) (%) 0.80 0.88 1.25 1.03(7) 0.91 0.88
Ratio of net investment income (loss) to average net assets (%) 2.96 4.79 5.41 5.15(7) 5.30 4.94
Ratio of adjusted net investment income (loss) to average
net assets(6) (%) 2.51 4.26 4.51 4.47(7) 4.74 4.41
</TABLE>

(1) On December 22, 1994, John Hancock Advisers, Inc. became the investment
adviser of the fund.
(2) Effective March 31, 1997, the fiscal year end changed from May 31 to March
31.

(3) Total investment return assumes dividend reinvestment.

(4) Not annualized.
(5) An estimated total return calculation that does not take into consideration
fee reductions by the adviser during the period shown.
(6) Unreimbursed, without fee reduction.
(7) Annualized.

18 FUND DETAILS
<PAGE>

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

For more information

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

Two documents are available that offer further information on John Hancock money
market funds:

ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS

Includes financial statements, a discussion of the market conditions and
investment strategies that significantly affected performance, as well as the
auditors' report (in annual report only).

STATEMENT OF ADDITIONAL INFORMATION (SAI)

The SAI contains more detailed information on all aspects of the funds. The
current annual report is included in the SAI.

A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference into (is legally a part of) this prospectus.

To request a free copy of the current annual/semiannual report or the SAI,
please contact John Hancock:

By mail:
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA02217-1000

By phone: 1-800-225-5291

By EASI-Line: 1-800-338-8080

By TDD: 1-800-544-6713

On the Internet: www.jhancock.com/funds

Or you may view or obtain these documents from the SEC:

In person: at the SEC's Public Reference Room in Washington, DC

By phone: 1-800-SEC-0330

By mail: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)

On the Internet: www.sec.gov

[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm

101 Huntington Avenue
Boston, Massachusetts
02199-7603
(C) 1999 John Hancock Funds, Inc.
MNYPN 8/99
John Hancock(R)

<PAGE>

JOHN HANCOCK MONEY MARKET FUND

Class A, Class B and Class C Shares
Statement Of Additional Information

August 1, 1999

This Statement of Additional Information provides information about John Hancock
Money Market Fund (the "Fund"), in addition to the information that is contained
in the combined Money Market Funds' Prospectus dated August 1, 1999 (the
"Prospectus"). The Fund is a diversified series of John Hancock Current Interest
(the "Trust").

This Statement of Additional Information 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 Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, Massachusetts 02217-1000
1-800-225-5291

Table of Contents
Page

Organization of the Fund.................................................. 2
Investment Objective and Policies......................................... 2
Investment Restrictions................................................... 8
Those Responsible for Management.......................................... 10
Investment Advisory and Other Services.................................... 20
Distribution Contracts.................................................... 22
Sales Compensation........................................................ 24
Net Asset Value........................................................... 25
Purchase of Class A Shares................................................ 26
Deferred Sales Charge on Class B and Class C Shares....................... 26
Special Redemptions....................................................... 30
Additional Services and Programs.......................................... 30
Description of the Fund's Shares.......................................... 31
Tax Status................................................................ 33
Calculation of Performance................................................ 35
Brokerage Allocation...................................................... 36
Transfer Agent Services................................................... 38
Custody of Portfolio...................................................... 38
Independent Auditors...................................................... 38
Appendix A................................................................ A-1
Appendix B................................................................ B-1
Financial Statements...................................................... F-1

1
<PAGE>

ORGANIZATION OF THE FUND

The Fund is a series of the Trust, an open-end investment management company
organized as a Massachusetts business trust under the laws of The Commonwealth
of Massachusetts. Prior to December 2, 1996, the Fund was a series portfolio of
John Hancock Series, Inc.("John Hancock Series, Inc."), an open-end management
investment company organized as a Maryland corporation. Prior to September 12,
1995, the Fund was called John Hancock Money Market Fund B. Prior to December
22, 1994, the Fund was called Transamerica Money Market Fund B.

John Hancock Advisers, Inc. (the "Adviser") is the Fund's investment adviser, an
indirect wholly-owned subsidiary of John Hancock Mutual Life Insurance Company
(the "Life Company"), a Massachusetts life insurance company chartered in 1862
with national headquarters at John Hancock Place, Boston, Massachusetts.

INVESTMENT OBJECTIVE AND POLICIES

The following information supplements the discussion of the Fund's investment
objective and policies discussed in the Prospectus. Appendix A contains further
information describing investment risk. The investment objective of the Fund is
non-fundamental and may be changed by vote of the Trustees without shareholder
approval. However, the 25% investment limitation on foreign bank obligations is
fundamental and may only be changed with shareholder approval. There is no
assurance that the Fund will achieve its investment objective.

The Fund seeks to provide maximum current income that is consistent with
maintaining liquidity and preserving capital. The Fund invests in high quality
money market instruments. The Fund's investments will be subject to the market
fluctuation and risks inherent in all securities.

The Fund seeks to achieve its objective by investing in money market instruments
including, but not limited to, U.S. Government, municipal and foreign
governmental securities; obligations of international organizations (e.g., the
World Bank and the International Monetary Fund); obligations of U.S. and foreign
banks and other lending institutions; corporate obligations; repurchase
agreements and reverse repurchase agreements. As a fundamental policy, the Fund
may not invest more than 25% of its total assets in obligations issued by (i)
foreign banks and (ii) foreign branches of U.S. banks where the Adviser has
determined that the U.S. bank is not unconditionally responsible for the payment
obligations of the foreign branch. All of the Fund's investments will be
denominated in U.S. dollars.

At the time the Fund acquires its investments, they will be rated (or issued by
an issuer that is rated with respect to a comparable class of short-term debt
obligations) in one of the two highest rating categories for short-term debt
obligations assigned by at least two nationally recognized rating organizations
(or one rating organization if the obligation was rated by only one such
organization). These high quality securities are divided into "first tier" and
"second tier" securities. First tier securities have received the highest rating
from at least two rating organizations (or one, if only one has rated the
security). Second tier securities have received ratings within the two highest
categories from at least two rating agencies (or one, if only one has rated the
security), but do not qualify as first tier securities. The Fund may also
purchase obligations that are not rated, but are determined by the Adviser,
based on procedures adopted by the Trustees, to be of comparable quality to
rated first or second tier securities. The Fund may not purchase any second tier
security if, as a result of its purchase (a) more than 5% of its total assets
would be invested in second tier securities or (b) more than 1% of its total
assets or $1 million (whichever is greater) would be invested in the second tier
securities of a single issuer.

2
<PAGE>

Ratings as Investment Criteria. In general, the ratings of Moody's Investors
Service, Inc. (" Moody's") and Standard & Poor's Ratings Group ("S&P") represent
the opinions of these agencies as to the quality of the securities which they
rate. It should be emphasized, however, that such ratings are relative and
subjective and are not absolute standards of quality. These ratings will be used
by the Fund as initial criteria for the selection of portfolio securities. Among
the factors which will be considered are the long-term ability of the issuer to
pay principal and interest and general economic trends. Appendix B contains
further information concerning the ratings of Moody's and S&P and their
significance.

Subsequent to its purchase by either Fund, an issue of securities may cease to
be rated or its rating may be reduced below the minimum required for purchase by
the Fund. Neither of these events will require the sale of the securities by the
Fund, but the Adviser will consider the event in its determination of whether
the Fund should continue to hold the securities.

All of the Fund's investments will mature in 397 days or less. The Fund will
maintain an average dollar-weighted portfolio maturity of 90 days or less.

Government Securities. The Fund may invest in U.S. Government securities, which
are obligations issued or guaranteed by the U.S. Government and its agencies,
authorities or instrumentalities. 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"). 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.

Custodial Receipts. The Fund may acquire custodial receipts in respect of U.S.
government securities. Such custodial receipts evidence ownership of future
interest payments, principal payments or both on certain notes or bonds. These
custodial receipts are known by various names, including Treasury Receipts,
Treasury Investors Growth Receipts ("TIGRs"), and Certificates of Accrual on
Treasury Securities ("CATS"). For certain securities law purposes, custodial
receipts are not considered U.S. government securities.

Bank and Corporate Obligations. The Fund may invest in commercial paper.
Commercial paper represents short-term unsecured promissory notes issued in
bearer form by banks or bank holding companies, corporations and finance
companies. The commercial paper purchased by the Fund consists of direct U.S.
dollar denominated obligations of domestic or foreign issuers. Bank obligations
in which the Fund may invest include certificates of deposit, bankers'
acceptances and fixed time deposits. Certificates of deposit are negotiable
certificates issued against funds deposited in a commercial bank for a definite
period of time and earning a specified return.

Bankers' acceptances are negotiable drafts or bills of exchange, normally drawn
by an importer or exporter to pay for specific merchandise, which are "accepted"
by a bank, meaning, in effect, that the bank unconditionally agrees to pay the
face value of the instrument on maturity. Fixed time deposits are bank
obligations payable at a stated maturity date and bearing interest at a fixed
rate. Fixed time deposits may be withdrawn on demand by the investor, but may be
subject to early withdrawal

3
<PAGE>

penalties which vary depending upon market conditions and the remaining maturity
of the obligation. There are no contractual restrictions on the right to
transfer a beneficial interest in a fixed time deposit to a third party,
although there is no market for such deposits. Bank notes and bankers'
acceptances rank junior to domestic deposit liabilities of the bank and pari
passu with other senior, unsecured obligations of the bank. Bank notes are not
insured by the Federal Deposit Insurance Corporation or any other insurer.
Deposit notes are insured by the Federal Deposit Insurance Corporation only to
the extent of $100,000 per depositor per bank.

Municipal Obligations. The Fund may invest in a variety of municipal obligations
which consist of municipal bonds, municipal notes and municipal commercial
paper.

Municipal Bonds. Municipal bonds are issued to obtain funds for various public
purposes including the construction of a wide range of public facilities such as
airports, highways, bridges, schools, hospitals, housing, mass transportation,
streets and water and sewer works. Other public purposes for which municipal
bonds may be issued include refunding outstanding obligations, obtaining funds
for general operating expenses and obtaining funds to lend to other public
institutions and facilities. In addition, certain types of industrial
development bonds are issued by or on behalf of public authorities to obtain
funds for many types of local, privately operated facilities. Such debt
instruments are considered municipal obligations if the interest paid on them is
exempt from federal income tax. The payment of principal and interest by issuers
of certain obligations purchased by the Fund may be guaranteed by a letter of
credit, note repurchase agreement, insurance or other credit facility agreement
offered by a bank or other financial institution. Such guarantees and the
creditworthiness of guarantors will be considered by the Adviser in determining
whether a municipal obligation meets the Fund's investment quality requirements.
No assurance can be given that a municipality or guarantor will be able to
satisfy the payment of principal or interest on a municipal obligation.

Municipal Notes. Municipal notes are short-term obligations of municipalities,
generally with a maturity ranging from six months to three years. The principal
types of such notes include tax, bond and revenue anticipation notes and project
notes.

Municipal Commercial Paper. Municipal commercial paper is a short-term
obligation of a municipality, generally issued at a discount with a maturity of
less than one year. Such paper is likely to be issued to meet seasonal working
capital needs of a municipality or interim construction financing. Municipal
commercial paper is backed in many cases by letters of credit, lending
agreements, note repurchase agreements or other credit facility agreements
offered by banks and other institutions.

Federal tax legislation enacted in the 1980s placed substantial new restrictions
on the issuance of the bonds described above and in some cases eliminated the
ability of state or local governments to issue municipal obligations for some of
the above purposes. Such restrictions do not affect the Federal income tax
treatment of municipal obligations in which the Fund may invest which were
issued prior to the effective dates of the provisions imposing such
restrictions. The effect of these restrictions may be to reduce the volume of
newly issued municipal obligations.

Issuers of municipal obligations are subject to the provisions of bankruptcy,
insolvency and other laws affecting the rights and remedies of creditors, such
as the Federal Bankruptcy Act, and laws, if any, which may be enacted by
Congress or state legislatures extending the time for payment of principal or
interest, or both, or imposing other constraints upon enforcement of such
obligations. There is also the possibility that as a result of litigation or
other conditions the power or ability of any one or more issuers to pay when due
the principal of and interest on their municipal obligations may be affected.

4
<PAGE>

The yields of municipal bonds depend upon, among other things, general money
market conditions, general conditions of the municipal bond market, size of a
particular offering, the maturity of the obligation and rating of the issue. The
ratings of S&P, Moody's and Fitch Investors Service ("Fitch") represent their
respective opinions on the quality of the municipal bonds they undertake to
rate. It should be emphasized, however, that ratings are general and not
absolute standards of quality. Consequently, municipal bonds with the same
maturity, coupon and rating may have different yields and municipal bonds of the
same maturity and coupon with different ratings may have the same yield. Many
issuers of securities choose not to have their obligations rated. Although
unrated securities eligible for purchase by the Fund must be determined to be
comparable in quality to securities having certain specified ratings, the market
for unrated securities may not be as broad as for rated securities since many
investors rely on rating organizations for credit appraisal.

Investments in Foreign Securities. The Fund may invest in U.S. dollar
denominated foreign securities and certificates of deposit, bankers' acceptances
and fixed time deposits and other obligations issued by foreign banks and their
U.S. and foreign branches and foreign branches of U.S. banks. The Fund may also
invest in municipal instruments backed by letters of credit issued by certain
foreign banks. Under current Securities and Exchange Commission ("SEC") rules
relating to the use of the amortized cost method of portfolio securities
valuation, the Fund is restricted to purchasing U.S. dollar denominated
securities.

Investing in obligations of non-U.S. issuers and foreign banks, particularly
securities of issuers located in emerging countries, may entail greater risks
than investing in similar securities of U.S. issuers. These risks include (i)
social, political and economic instability; (ii) the small current size of the
markets for many such securities and the currently low or nonexistent volume of
trading, which may result in a lack of liquidity and in greater price
volatility; (iii) certain national policies which may restrict the Fund's
investment opportunities, including restrictions on investment in issuers or
industries deemed sensitive to national interests; (iv) foreign taxation; and
(v) the absence of developed structures governing private or foreign investment
or allowing for judicial redress for injury to private property.

Investments in foreign securities may involve a greater degree of risk than
those in domestic securities. There is generally less publicly available
information about foreign companies in the form of reports and ratings similar
to those that are published about issuers in the United States. Also, foreign
issuers are generally not subject to uniform accounting, auditing and financial
reporting requirements comparable to those applicable to United States issuers.

Foreign securities will be purchased in the best available market, whether
through over-the-counter markets or exchanges located in the countries where
principal offices of the issuers are located. Foreign securities markets are
generally not as developed or efficient as those in the United States. While
growing in volume, they usually have substantially less volume than the New York
Stock Exchange, and securities of some foreign issuers are less liquid and more
volatile than securities of comparable United States issuers. Fixed commissions
on foreign exchanges are generally higher than negotiated commissions on United
States exchanges, although the Fund will endeavor to achieve the most favorable
net results on its portfolio transactions. There is generally less government
supervision and regulation of securities exchanges, brokers and listed issuers
than in the United States.

5
<PAGE>

With respect to certain foreign countries, there is the possibility of adverse
changes in investment or exchange control regulations, expropriation,
nationalization or confiscatory taxation, limitations on the removal of funds or
other assets of the Fund, political or social instability, or diplomatic
developments which could affect United States investments in those countries.
Moreover, individual foreign economies may differ favorably or unfavorably from
the United States' economy in terms of growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position.

The dividends, in some cases, capital gains, and interest payable on certain of
the Fund's foreign portfolio securities, may be subject to foreign withholding
or other foreign taxes, thus reducing the net amount of income or gains
available for distribution to the Fund's shareholders.

Repurchase Agreements. In a repurchase agreement the Fund buys a security for a
relatively short period (generally not more than 7 days) subject to the
obligation to sell it back to the issuer at a fixed time and price plus accrued
interest. The Fund will enter into repurchase agreements only with member banks
of the Federal Reserve System and with "primary dealers" in U.S. Government
securities. 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 during the period which the Fund seeks to
enforce its rights thereto, possible subnormal levels of income decline in value
of the underlying securities or lack of access to income during this period as
well as the expense of enforcing its rights. The Fund will not invest in a
repurchase agreement maturing in more than seven days, if such investment,
together with other illiquid securities held by the Fund (including restricted
securities) would exceed 10% of the Fund's net assets.

Reverse Repurchase Agreements. The Fund may also enter into reverse repurchase
agreements which involve the sale of U.S. Government securities held in its
portfolio to a bank with an agreement that the Fund will buy back the securities
at a fixed future date at a fixed price plus an agreed amount of "interest"
which may be reflected in the repurchase price. Reverse repurchase agreements
are considered to be borrowings by the Fund. Reverse repurchase agreements
involve the risk that the market value of securities purchased by the Fund with
proceeds of the transaction may decline below the repurchase price of the
securities sold by the Fund which it is obligated to repurchase. The Fund will
also continue to be subject to the risk of a decline in the market value of the
securities sold under the agreements because it will reacquire those securities
upon effecting their repurchase. To minimize various risks associated with
reverse repurchase agreements, the Fund will establish a separate account
consisting of liquid securities, of any type or maturity, in an amount at least
equal to the repurchase prices of the securities (plus any accrued interest
thereon) under such agreements. In addition, the Fund will not enter into
reverse repurchase agreements or borrow money in excess of 33 1/3% of its total
assets, and then only as a temporary measure for extraordinary or emergency
purposes, or pledge, mortgage or hypothecate an amount of its assets (taken at
market value) in excess of 15% of its total assets, in each case taken at the
lower of cost or market value. For this purpose, collateral arrangements with
respect to options, futures contracts, options on futures contracts and
collateral arrangements with respect to initial and variation margins are not
considered a pledge of assets. The Fund will enter into reverse repurchase
agreements only with federally insured banks or savings and loan associations
which are approved in advance as being creditworthy by the Trustees. Under
procedures established by the Trustees, the Adviser will monitor the
creditworthiness of the banks involved.

6
<PAGE>

Restricted Securities. The Fund may purchase securities that are not registered
("restricted securities") under the Securities Act of 1933 ("1933 Act"),
including commercial paper issued in reliance on Section 4(2) of the 1933 Act
and securities offered and sold to "qualified institutional buyers" under Rule
144A under the 1933 Act. The Fund will not invest more than 10% of its net
assets in illiquid investments. If the Trustees determine, based upon a
continuing review of the trading markets for Section 4(2) paper or specific Rule
144A securities, that they are liquid, they will not be subject to the 10%
limit. The Trustees may adopt guidelines and delegate to the Adviser the daily
function of determining and monitoring the liquidity of restricted securities.
The Trustees, however, will retain sufficient oversight and be ultimately
responsible for the determinations. The Trustees will carefully monitor the
Fund's investments in these securities, focusing on such important factors,
among others, as valuation, liquidity and availability of information. This
investment practice could have the effect of increasing the level of illiquidity
in the Fund if qualified institutional buyers become for a time uninterested in
purchasing these restricted securities.

Forward Commitment and When-Issued Securities. The Fund may purchase securities
on a when-issued or forward commitment basis. "When-issued" refers to securities
whose terms are available and for which a market exists, but which have not been
issued. The Fund will engage in when-issued transactions with respect to
securities purchased for its portfolio in order to obtain what is considered to
be an advantageous price and yield at the time of the transaction. For
when-issued transactions, no payment is made until delivery is due, often a
month or more after the purchase. In a forward commitment transaction, the Fund
contracts to purchase securities for a fixed price at a future date beyond
customary settlement time.

When the Fund engages in forward commitment and when-issued transactions, it
relies on the seller to consummate the transaction. The failure of the issuer or
seller to consummate the transaction may result in the Fund losing the
opportunity to obtain a price and yield considered to be advantageous. The
purchase of securities on a when-issued and forward commitment basis also
involves a risk of loss if the value of the security to be purchased declines
prior to the settlement date.

On the date the Fund enters into an agreement to purchase securities on a
when-issued or forward commitment basis, the Fund will segregate in a separate
account cash or liquid securities, of any type or maturity, equal in value to
the Fund's commitment. These assets will be valued daily at market, and
additional cash or securities will be segregated in a separate account to the
extent that the total value of the assets in the account declines below the
amount of the when-issued commitments. Alternatively, the Fund may enter into
offsetting contracts for the forward sale of other securities that it owns.

Lending of Securities. The Fund may lend portfolio securities to brokers,
dealers, and financial institutions if the loan is collateralized by cash or
U.S. Government securities according to applicable regulatory requirements. The
Fund may reinvest any cash collateral in short-term securities and money market
funds. When the Fund lends portfolio securities, there is a risk that the
borrower may fail to return the securities involved in the transaction. As a
result, the Fund may incur a loss or, in the event of the borrower's bankruptcy,
the Fund may be delayed in or prevented from liquidating the collateral. It is a
fundamental policy of the Fund not to lend portfolio securities having a total
value exceeding 30% of its total assets.

7
<PAGE>

Short-Term Trading and Portfolio Turnover. Short-term trading means the purchase
and subsequent sale of a security after it has been held a relatively brief
period of time. The Fund may engage in short-term trading in response to market
conditions, changes in interest rates or other income trends and developments or
to take advantage of yield disparities in different segments of the market for
Government Obligations. Short-term trading may have the effect of increasing
portfolio turnover rate. A high rate of portfolio turnover (100% or greater)
involves correspondingly greater brokerage expenses. The Fund's portfolio
turnover rate is set forth in the table under the caption "Financial Highlights"
in the Prospectus.

INVESTMENT RESTRICTIONS

Fundamental Investment Restrictions. The following investment restrictions will
not be changed without the approval of a majority of the Fund's outstanding
voting securities which, as used in the Prospectus and this Statement of
Additional Information, means the approval by the lesser of (1) the holders of
67% or more of the Fund's shares represented at a meeting if more than 50% of
the Fund's outstanding shares are present in person or by proxy at the meeting
or (2) more than 50% of the Fund's outstanding shares.

The Fund may not:

(1) Borrow money in an amount in excess of 33 1/3% of its total assets, and
then only as a temporary measure for extraordinary or emergency
purposes (except that it may enter into a reverse repurchase agreement
within the limits described in the Prospectus or this Statement of
Additional Information), or pledge, mortgage or hypothecate an amount
of its assets (taken at market value) in excess of 15% of its total
assets, in each case taken at the lower of cost or market value. For
the purpose of this restriction, collateral arrangements with respect
to options, futures contracts, options on futures contracts and
collateral arrangements with respect to initial and variation margins
are not considered a pledge of assets.

(2) Underwrite securities issued by other persons except insofar as the
Fund may technically be deemed an underwriter under the Securities Act
of 1933 in selling a portfolio security.

(3) Purchase or retain real estate (including limited partnership interests
but excluding securities of companies, such as real estate investment
trusts, which deal in real estate or interests therein and securities
secured by real estate), or mineral leases, commodities or commodity
contracts (except contracts for the future delivery of fixed income
securities, stock index and currency futures and options on such
futures) in the ordinary course of its business. The Fund reserves the
freedom of action to hold and to sell real estate or mineral leases,
commodities or commodity contracts acquired as a result of the
ownership of securities.

(4) Invest in direct participation interests in oil, gas or other
mineral exploration or development programs.

(5) Make loans to other persons except by the purchase of obligations in
which the Fund is authorized to invest and by entering into repurchase
agreements; provided that the Fund may lend its portfolio securities
not in excess of 30% of its total assets (taken at market value). Not
more than 10% of the Fund's total assets (taken at market value) will
be subject to repurchase agreements maturing in more than seven days.
For these purposes the purchase of all or a portion of an issue of debt
securities shall not be considered the making of a loan.

8
<PAGE>

(6) Purchase the securities of any issuer if such purchase, at the time
thereof, would cause more than 5% of its total assets (taken at market
value) to be invested in the securities of such issuer, other than
securities issued or guaranteed by the United States or any state or
political subdivision thereof, or any political subdivision of any such
state, or any agency or instrumentality of the United States, any state
or political subdivision thereof, or any political subdivision of any
such state. In applying these limitations, a guarantee of a security
will not be considered a security of the guarantor, provided that the
value of all securities issued or guaranteed by that guarantor, and
owned by the Fund, does not exceed 10% of the Fund's total assets. In
determining the issuer of a security, each state and each political
subdivision agency, and instrumentality of each state and each
multi-state agency of which such state is a member is a separate
issuer. Where securities are backed only by assets and revenues of a
particular instrumentality, facility or subdivision, such entity is
considered the issuer.

(7) Invest in companies for the purpose of exercising control or
management.

(8) Purchase or retain in its portfolio any securities issued by an issuer
any of whose officers, directors, trustees or security holders is an
officer or Trustee of the Fund, or is a member, partner, officer or
Director of the Adviser, if after the purchase of the securities of
such issuer by the Fund one or more of such persons owns beneficially
more than 1/2 of 1% of the shares or securities, or both, all taken at
market value, of such issuer, and such persons owning more than 1/2 of
1% of such shares or securities together own beneficially more than 5%
of such shares or securities, or both, all taken at market value.

(9) Purchase any securities or evidences of interest therein on margin,
except that the Fund may obtain such short-term credit as may be
necessary for the clearance of purchases and sales of securities.

(10) Sell any security which the Fund does not own unless by virtue of its
ownership of other securities it has at the time of sale a right to
obtain securities without payment of further consideration equivalent
in kind and amount to the securities sold and provided that if such
right is conditional the sale is made upon equivalent conditions.

(11) Knowingly invest in securities which are subject to legal or
contractual restrictions on resale or for which there is no readily
available market (e.g., trading in the security is suspended or market
makers do not exist or will not entertain bids or offers), except for
repurchase agreements, if, as a result thereof more than 10% of the
Fund's total assets (taken at market value) would be so invested. (The
Staff of the Securities and Exchange Commission has taken the position
that a money market fund may not invest more than 10% of its net assets
in illiquid securities. The Fund has undertaken with the Staff to
require, that as a matter of operating policy, it will not invest in
illiquid securities in an amount exceeding 10% of its net assets.)

(12) Issue any senior security (as that term is defined in the Investment
Company Act of 1940 (the "Investment Company Act")) if such issuance is
specifically prohibited by the Investment Company Act or the rules and
regulations promulgated thereunder. For the purpose of this
restriction, collateral arrangements with respect to options, Futures
Contracts and Options on futures contracts and collateral arrangements
with respect to initial and variation margins are not deemed to be the
issuance of a senior security.

9
<PAGE>

(13) Purchase the securities of issuers conducting their principal activity
in the same industry if, immediately after such purchase, the value of
its investments in such industry would equal or exceed 25% of its total
assets taken at market value at the time of such investment. This
limitation does not apply to investments in obligations of the U.S.
Government or any of its agencies, instrumentalities or authorities.

In addition, the Fund may not invest more than 25% of its total assets in
obligations issued by (i) foreign banks or (ii) foreign branches of U.S. banks
where the Adviser has determined that the U.S. bank is not unconditionally
responsible for the payment obligations of the foreign branch. Also, the Fund
may not purchase securities of any issuer (other than securities issued or
guaranteed by the U.S. Government or its agencies or instrumentalities) if such
purchase, at the time thereof, would cause the Fund to hold more than 10% of any
class of securities of such issuer. For this purpose, all indebtedness of an
issuer maturing in less than one year shall be deemed a single class and all
preferred stock of an issuer shall be deemed a single class.

Non-fundamental Investment Restrictions. The following investment restrictions
are designated as non-fundamental and may be changed by the Trustees without
shareholder approval.

The Fund may not purchase a security if, as a result, (i) more than 10% of the
Fund's total assets would be invested in the securities of other investment
companies, (ii) the Fund would hold more than 3% of the total outstanding voting
securities of any one investment company, or (iii) more than 5% of the Fund's
total assets would be invested in the securities of any one investment company.
These limitations do not apply to (a) the investment of cash collateral,
received by the Fund in connection with lending the Fund's portfolio securities,
in the securities of open-end investment companies or (b) the purchase of shares
of any investment company in connection with a merger, consolidation,
reorganization or purchase of substantially all of the assets of another
investment company. Subject to the above percentage limitations, 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.

If a percentage restriction or rating restriction on investment or utilization
of assets as set forth above is adhered to at the time an investment is made or
assets are so utilized, a later change in percentage resulting from changes in
the value of the Fund's portfolio securities or a later change in the rating of
a portfolio security will not be considered a violation of the policy.

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 the
Fund's principal distributor, John Hancock Funds, Inc. ("John Hancock Funds").

10
<PAGE>

Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

Edward J. Boudreau, Jr. * Trustee, Chairman and Chief Chairman, Director and Chief
101 Huntington Avenue Executive Officer (1, 2) Executive Officer, the Adviser;
Boston, MA 02199 Chairman, Director and Chief
October 1944 Executive Officer, The Berkeley
Financial Group, Inc. ("The
Berkeley Group"); Chairman and
Director, NM Capital Management,
Inc. ("NM Capital"), John Hancock
Advisers International Limited
("Advisers International") and
Sovereign Asset Management
Corporation ("SAMCorp"); Chairman
and Chief Executive Officer, John
Hancock Funds, Inc. ("John Hancock
Funds"); Chairman, First Signature
Bank and Trust Company; Director,
John Hancock Insurance Agency, Inc.
("Insurance Agency, Inc."), John
Hancock Advisers International
(Ireland) Limited ("International
Ireland"), John Hancock Capital
Corporation and New England/Canada
Business Council; Member,
Investment Company Institute Board
of Governors; Director, Asia
Strategic Growth Fund, Inc.;
Trustee, Museum of Science;
Director, John Hancock Freedom
Securities Corporation (until
September 1996); Director, John
Hancock Signature Services, Inc.
("Signature Services") (until
January 1997).

- -------------------
* Trustee may be deemed to be an "interested person" of the Fund as defined
in the Investment Company Act of 1940.
(1) Member of the Executive Committee. The Executive Committee may generally
exercise most of the powers of the Board of Trustees.
(2) A member of the Investment Committee of the Adviser.

11
<PAGE>

Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

Stephen L. Brown* Trustee Chairman and Chief Executive
John Hancock Place Officer, John Hancock Mutual Life
P.O. Box 111 Insurance Company; Director, the
Boston, MA 02117 Adviser, John Hancock Funds,
July 1937 Insurance Agency, John Hancock
Subsidiaries, Inc., The Berkeley
Group, Federal Reserve Bank of
Boston, Signature Services (until
January 1997;) Trustee, John
Hancock Asset Management (until
March 1997).

James F. Carlin Trustee Chairman and CEO, Carlin
233 West Central Street Consolidated, Inc.
Natick, MA 01760 (management/investments); Director,
April 1940 Arbella Mutual (insurance), Health
Plan Services, Inc., Massachusetts
Health and Education Tax Exempt
Trust, Flagship Healthcare, Inc.,
Carlin Insurance Agency, Inc., West
Insurance Agency, Inc. (until May
1995), Uno Restaurant Corp.;
Chairman, Massachusetts Board of
Higher Education (until July 1999).

12
<PAGE>

Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

William H. Cunningham Trustee Chancellor, University of Texas
601 Colorado Street System and former President of the
O'Henry Hall University of Texas, Austin, Texas;
Austin, TX 78701 Lee Hage and Joseph D. Jamail
January 1944 Regents Chair of Free Enterprise;
Director, LaQuinta Motor Inns, Inc.
(hotel management company)
(1985-1998); Jefferson-Pilot
Corporation (diversified life
insurance company) and LBJ
Foundation Board (education
foundation); Advisory Director,
Chase Bank (formerly Texas Commerce
Bank - Austin).

Ronald R. Dion Trustee President and Chief Executive
250 Boylston Street Officer, R.M. Bradley & Co., Inc.;
Boston, MA 02116 Director, The New England Council
March 1946 and Massachusetts Roundtable;
Trustee, North Shore Medical Center
and a corporator of the Eastern
Bank; Trustee, Emmanuel College.

Harold R. Hiser, Jr. Trustee Executive Vice President,
123 Highland Avenue Schering-Plough Corporation
Short Hill, NJ 07078 (pharmaceuticals) (retired 1996);
October 1931 Director, ReCapital Corporation
(reinsurance) (until 1995).

13
<PAGE>

Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

Anne C. Hodsdon * Trustee and President (1,2) President, Chief Operating Officer,
101 Huntington Avenue Chief Investment Officer and
Boston, MA 02199 Director, the Adviser, The Berkeley
August 1953 Group; Executive Vice President and
Director, John Hancock Funds;
Director, Advisers International,
Insurance Agency, Inc. and
International Ireland; President and
Director, SAMCorp. and NM Capital;
Executive Vice President, the
Adviser (until December 1994);
Director, Signature Services (until
January 1997).

Charles L. Ladner Trustee Senior Vice President and Chief
UGI Corporation Financial Officer, UGI Corporation
P.O. Box 858 (Public Utility Holding Company)
Valley Forge, PA 19482 (retired 1998); Vice President and
February 1938 Director for AmeriGas, Inc. (retired
1998); Vice President of AmeriGas
Partners, L.P. (until 1997);
Director, EnergyNorth, Inc. (until
1995).

14
<PAGE>

Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

Leo E. Linbeck, Jr. Trustee Chairman, President, Chief Executive
3810 W. Alabama Officer and Director, Linbeck
Houston, TX 77027 Corporation (a holding company
August 1934 engaged in various phases of the
construction industry and
warehousing interests); Former
Chairman, Federal Reserve Bank of
Dallas (1992, 1993); Chairman of
the Board, Linbeck Construction
Corporation; Director, Duke Energy
Corporation (a diversified energy
company), Daniel Industries, Inc.
(manufacturer of gas measuring
products and energy related
equipment), GeoQuest International
Holdings, Inc. (a geophysical
consulting firm); Director, Greater
Houston Partnership.

Steven R. Pruchansky Trustee (1) Director and President, Mast
4327 Enterprise Avenue Holdings, Inc. (since 1991);
Naples, FL 34104 Director, First Signature Bank &
August 1944 Trust Company (until August 1991);
Director, Mast Realty Trust (until
1994); President, Maxwell Building
Corp. (until 1991).

15
<PAGE>

Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

Richard S. Scipione * Trustee (1) General Counsel, John Hancock Mutual
John Hancock Place Life Insurance Company; Director,
P.O. Box 111 the Adviser, John Hancock Funds,
Boston, MA 02117 Signator Investors, Inc., Insurance
August 1937 Agency, Inc., John Hancock
Subsidiaries, Inc., SAMCorp. and NM
Capital; The Berkeley Group; JH
Networking Insurance Agency, Inc.;
Signature Services (until January
1997).

Norman H. Smith Trustee Lieutenant General, United States
243 Mt. Oriole Lane Marine Corps; Deputy Chief of Staff
Linden, VA 22642 for Manpower and Reserve Affairs,
March 1933 Headquarters Marine Corps;
Commanding General III Marine
Expeditionary Force/3rd Marine
Division (retired 1991).

16
<PAGE>

Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

John P. Toolan Trustee Director, The Smith Barney Muni Bond
13 Chadwell Place Funds, The Smith Barney Tax-Free
Morristown, NJ 07960 Money Funds, Inc., Vantage Money
September 1930 Market Funds (mutual funds), The
Inefficient-Market Fund, Inc.
(closed-end investment company) and
Smith Barney Trust Company of
Florida; Chairman, Smith Barney
Trust Company (retired December,
1991); Director, Smith Barney,
Inc., Mutual Management Company and
Smith Barney Advisers, Inc.
(investment advisers) (retired
1991); Senior Executive Vice
President, Director and member of
the Executive Committee, Smith
Barney, Harris Upham & Co.,
Incorporated (investment bankers)
(until 1991).

Osbert M. Hood Senior Vice President and Chief Senior Vice President, Chief
101 Huntington Avenue Financial Officer Financial Officer and Treasurer, the
Boston, MA 02199 Adviser, the Berkeley Group and John
August 1952 Hancock Funds, Inc.; Vice President
and Chief Financial Officer, John
Hancock Mutual Life Insurance
Company Retail Sector (until 1997).

17
<PAGE>

Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

John A. Morin Vice President Vice President and Secretary, the
101 Huntington Avenue Adviser, The Berkeley Group,
Boston, MA 02199 Signature Services, John Hancock
July 1950 Funds, NM Capital and SAMCorp.;
Clerk, Insurance Agency, Inc.;
Counsel, John Hancock Mutual Life
Insurance Company (until February
1996).

Susan S. Newton Vice President and Secretary Vice President, the Adviser; John
101 Huntington Avenue Hancock Funds, Signature Services
Boston, MA 02199 and The Berkeley Group.
March 1950

James J. Stokowski Vice President, Treasurer and Chief Vice President, the Adviser.
101 Huntington Avenue Accounting Officer
Boston, MA 02199
November 1946

18
<PAGE>

The following tables provide information regarding the compensation paid by the
Fund and the other investment companies in the John Hancock Fund Complex to the
Independent Trustees for their services. Messrs. Boudreau, Brown, Scipione and
Ms. Hodsdon, each a non-Independent Trustee, and each of the officers of the
Fund who are interested persons of the Adviser, are compensated by the Adviser
and/or its affiliates and receive no compensation from the Fund for their
services.

Total Compensation
from all Funds in
Aggregate John Hancock
Compensation Fund Complex to
Trustees from the Fund* the Trustees**
- -------- -------------- --------------

James F. Carlin $ 3,137 $ 74,000
William H. Cunningham + 3,137 74,000
Ronald R. Dion 3,469 18,500
Charles F. Fretz 318 57,121
Harold R. Hiser. Jr. + 2,827 70,000
Charles L. Ladner 3,267 77,100
Leo E. Linbeck, Jr. 3,137 74,000
Patricia P. McCarter + 137 43,696
Steven R. Pruchansky + 3,267 77,100
Norman H. Smith + 3,393 79,350
John P. Toolan + 3,267 77,100
------------- ----------
Total $29,356 $721,967

* Compensation is for the fiscal year ended March 31, 1999.

** The total compensation paid by the John Hancock Fund Complex to the
Independent Trustees as of the calendar year ended December 31, 1998.
As of this date, there were sixty-seven funds in the John Hancock Fund
Complex, with each of these Independent Trustees serving on
thirty-three funds. Effective October 1, 1998, Mr. Fretz and Ms.
McCarter resigned as Trustees of the Complex.

+ As of December 31, 1998, the value of the aggregate accrued deferred
compensation amount from all funds in the John Hancock Fund Complex for
Mr. Cunningham was $320,943, for Mr. Hiser was $115,084, for Ms.
McCarter was $183,645, for Mr. Pruchansky was $75,016, for Mr. Smith
was $109,807 and for Mr. Toolan was $403,714 under the John Hancock
Deferred Compensation Plan for Independent Trustees.

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 July 8, 1999, the officers and Trustees of the Trust as a group
beneficially owned less than 1% of the outstanding shares of either class of the
Fund. As of that date, the following shareholders beneficially owned 5% or more
of the outstanding shares of the Fund:

19
<PAGE>

- --------------------------------------------------------------------------------
Percentage of total
Outstanding Shares of the
Name and Address of Shareholder Class of Shares Class of the Fund
- --------------------------------------------------------------------------------

Lyon Electric Co., Inc. 401K Plan C 28.52%
Att: Sandra Cruz
1690 A Brandywine Avenue
Chula Vista CA 91911-60201-000

- --------------------------------------------------------------------------------
G. David Miller C 27.62%
4004 S Spring Loop
Roswell NM 88201-9625

- --------------------------------------------------------------------------------
Prudential Securities Inc. FBO C 8.04%
Jeff Filmore
87 Lothrop St
Beverly MA 0915-5226

- --------------------------------------------------------------------------------
Janet M. Fillion C 5.64%
PO Box 384
Franklin NH 03235-0384

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

INVESTMENT ADVISORY AND OTHER SERVICES

The Adviser, located at 101 Huntington Avenue, Boston, Massachusetts 02199-7603,
was organized in 1968 and has more than $30 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 1,400,000 shareholders. The Adviser is an affiliate of
the Life Company, one of the most recognized and respected financial
institutions in the nation. With total assets under management of more than $100
billion, the Life Company is one of the ten largest life insurance companies in
the United States, and carries a high rating from Standard & Poor's and A.M.
Best. Founded in 1862, the Life Company has been serving clients for over 130
years.

The Fund has entered into an investment management contract (the "Advisory
Agreement") with the Adviser which was approved by the Fund's shareholders.
Pursuant to the Advisory Agreement, the Adviser will (a) furnish continuously an
investment program for the Fund and determine, subject to the overall
supervision and review of the Trustees, which investments should be purchased,
held, sold or exchanged, and (b) provide supervision over all aspects of the
Fund's operations except those which are delegated to a custodian, transfer
agent or other agent.

The Fund bears all costs of its organization and operation, including but not
limited to expenses of preparing, printing and mailing all shareholders'
reports, notices, prospectuses, proxy statements and reports to regulatory
agencies; expenses relating to the issuance, registration and qualification of
shares; government fees; interest charges; expenses of furnishing to
shareholders their account statements; taxes; expenses of redeeming shares;
brokerage and other expenses connected with the execution of portfolio
securities transactions; expenses pursuant to the Fund's plan of distribution;
fees and expenses of custodians including those for keeping books and accounts ,
maintaining a committed line of credit and calculating the net asset value of
shares; fees and expenses of transfer agents and dividend disbursing agents;
legal, accounting, financial, management, tax and auditing fees and expenses of
the Fund (including an allocable portion of the cost of the Adviser's employees
rendering such services to the Fund); the compensation and expenses of Trustees
who are not otherwise affiliated with the Trust, the Adviser or any of their
affiliates; expenses of Trustees' and shareholders' meetings; trade association
memberships; insurance premiums; and any extraordinary expenses.

20
<PAGE>

As compensation for its services under the Advisory Agreement, the Fund pays the
Adviser monthly a fee based on a stated percentage of the average daily net
assets of the Fund as follows:

Average Daily Net Assets Fee (Annual Rate)
- ------------------------ -----------------

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%

*The Adviser has reduced the fee to 0.40% of the Fund's average daily net assets
and cannot reinstate the fee without the Trustees' consent.

From time to time, the Adviser may reduce its fees 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 reimpose 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.

For the fiscal year ended October 31, 1996 and for the period from November 1,
1996 to March 31, 1997 and for the fiscal years ended March 31, 1998 and 1999,
advisory fees payable by the Fund to the Adviser, were $1,327,385, $694,373,
$1,592,755 and $2,466,099, respectively.

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 for the Fund 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 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 affiliates may increase the demand for securities being purchased or the
supply of securities being sold, there may be an adverse effect on price.

Pursuant to the Advisory Agreement, the Adviser is not liable 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 Advisory Agreement 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 Advisory Agreement.

21
<PAGE>

Under the Advisory Agreement, the Fund may use the name "John Hancock" or any
name derived from or similar to it only for as long as the Advisory Agreement or
any extension, renewal or amendment thereof remains in effect. If the Advisory
Agreement 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.

The continuation of the Advisory Agreement and Distribution Agreement (discussed
below) was approved by all of the Trustees. The Advisory Agreement and the
Distribution Agreement will continue in effect from year to year, provided that
its continuance is approved annually both (i) by the holders of a majority of
the outstanding voting securities of the Trust or by the Trustees, and (ii) by a
majority of the Trustees who are not parties to the Agreement or "interested
persons" of any such parties. Both agreements may be terminated on 60 days
written notice by either party or by vote of a majority of the outstanding
voting securities of the Funds and will terminate automatically if assigned.

Accounting and Legal Services Agreement. The Trust, on behalf of the Fund, is a
party to an Accounting and Legal Services Agreement with the Adviser. Pursuant
to this agreement, the Adviser provides the Fund with certain tax, accounting
and legal services. For the fiscal year ended October 31, 1996, the Fund paid
the Adviser $54,014 for services under this agreement. For the period from
November 1, 1996 to March 31, 1997, the Fund paid the Adviser $32,549 for
services under this Agreement. For the fiscal years ended March 31, 1998 and
1999, the Fund paid the Adviser $71,537 and $74,478, respectively.

In order to avoid conflicts 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:
pre-clearance 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.

DISTRIBUTION CONTRACTS

The Fund has a Distribution Agreement with John Hancock Funds. Under the
agreement, John Hancock Funds is obligated to use its best efforts to sell
shares of each class of the Fund. Shares of the Fund are also sold by selected
broker-dealers (the "Selling Brokers") which have entered into selling agency
agreements with John Hancock Funds. John Hancock Funds accepts orders for the
purchase of the shares of the Fund which are continually offered at net asset
value next determined, plus an applicable sales charge, if any. In connection
with the sale of Fund shares, John Hancock Funds and Selling Brokers receive
compensation from a sales charge imposed, in the case of Class A shares, at the
time of sale. In the case of Class B and Class C shares, the broker receives
compensation immediately but John Hancock Funds is compensated on a deferred
basis.

The Fund's Trustees adopted Distribution Plans with respect to each class of
shares (the "Plans") pursuant to Rule 12b-1 under the Investment Company Act.
Under the Plans, the Fund will pay distribution and service fees at an aggregate
annual rate of up to 0.25% for Class A shares and 1.00%, for Class B and Class C
shares, respectively, of the Fund's average daily net assets attributable to
shares of that class. Currently however, the Fund has agreed to limit fees
attributable to Class A shares to 0.15% of the Fund's average daily net assets.
The service fee will not exceed 0.15% or 0.25% of the Fund's average daily net
assets attributable to each of shares and the remaining amount is for
distribution expenses. The distribution fees will be used to reimburse John
Hancock Funds for their distribution expenses, including but not limited to: (i)
initial and ongoing sales compensation to Selling Brokers and others (including
affiliates of John Hancock Funds) engaged in the sale of Fund shares; (ii)
marketing, promotional and overhead

22
<PAGE>

expenses incurred in connection with the distribution of Fund shares; and (iii)
with respect to Class B and Class C shares only, interest expenses on
unreimbursed distribution expenses. The service fees will be used to compensate
Selling Brokers and others for providing personal and account maintenance
services to shareholders. In the event the John Hancock Funds is not fully
reimbursed for payments they make under the Class A Plan, these expenses will
not be carried beyond twelve months from the date they were incurred.
Unreimbursed expenses under the Class B and Class C Plans will be carried
forward together with interest on the balance of these unreimbursed expenses.
The Fund does not treat unreimbursed expenses under the Class B and Class C
Plans as a liability of the Fund because the Trustees may terminate Class B
and/or Class C Plans at any time with no additional liability for these expenses
to the shareholders and the Fund. For the fiscal year ended March 31, 1999, an
aggregate of $433,174 of distribution expenses or of 0.29% of the average net
assets of the Class B shares of the Fund, was not reimbursed or recovered by
John Hancock Funds through the receipt of deferred sales charges or Rule 12b-1
fees in prior periods. From the period from May 1, 1998 to March 31, 1999,
there were no aggregate distribution expenses of the Class C shares of the Fund
that was not reembursed or recovered by John Hancock Funds through the receipt
of deferred sales charges or 12b-fees.

The Plans were approved by a majority of the voting securities of the Fund. The
Plans and all amendments were approved by the Trustees, including a majority of
the Trustees who are not interested persons of the Fund and who have no direct
or indirect financial interest in the operation of the Plans (the "Independent
Trustees"), by votes cast in person at meetings called for the purpose of voting
on such Plans.

Pursuant to the Plans, at least quarterly, John Hancock Funds provide the Fund
with a written report of the amounts expended under the Plans and the purpose
for which these expenditures were made. The Trustees review these reports on a
quarterly basis to determine their continued appropriateness.

The Plans provide that they will continue in effect only so long as their
continuance is approved at least annually by a majority of both the Trustees and
Independent Trustees. The Plans provide that they may be terminated without
penalty, (a) by vote of a majority of the Independent Trustees, (b) by a vote of
a majority of the Fund's outstanding shares of the applicable class upon 60
days' written notice to John Hancock Funds, and (c) automatically in the event
of assignment. The Plans further provide that they 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 class of the
Fund which has voting rights with respect to that Plan. Each plan provides, that
no material amendment to the Plans will be effective unless it is approved by a
vote of a majority of the Trustees and the Independent Trustees of the Fund. The
holders of Class A, Class B and Class C shares have exclusive voting rights with
respect to the Plan applicable to their respective class of shares. In adopting
the Plans, the Trustees concluded that, in their judgment, there is a reasonable
likelihood that the Plans will benefit the holders of the applicable class of
shares of the Fund.

Amounts paid to John Hancock Funds by any class of shares of the Fund will not
be used to pay the expenses incurred with respect to any other class of shares
of the Fund; provided, however, that expenses attributable to the Fund as a
whole will be allocated, to the extent permitted by law, according to a formula
based upon gross sales dollars and/or average daily net assets of each such
class, as may be approved from time to time by vote of a majority of Trustees.
From time to time, the Fund may participate in joint distribution activities
with other Funds and the costs of those activities will be borne by each Fund in
proportion to the relative net asset value of the participating Funds.

23
<PAGE>

During the fiscal year ended March 31, 1999, the Fund paid John Hancock Funds
the following amounts of expenses in connection with their services of the Fund.

Expense Items
-------------

Printing and Interest,
Mailing of Carrying or
Prospectuses Compensation Expenses of Other
to New To Selling John Hancock Finance
Shares Advertising Shareholders Brokers Funds Charges
- ------ ----------- ------------ ------- ----- -------
<S> <C> <C> <C> <C> <C>

Class A $52,909 $14,263 $314,846 $132,353 $ 0
Class B $31,536 $ 6,353 $368,503 $ 67,836 $23,734
Class C* $ 1,251 $ 475 $ 0 $ 3,366 $ 0
</TABLE>

*Commenced operations May 1, 1998.

SALES COMPENSATION

As part of their business strategies, the Fund, along with John Hancock Funds,
pay compensation to financial services firms that sell the Fund's shares. These
firms typically pass along a portion of this compensation to your financial
representative.

Compensation payments originate from two sources: from sales charges and from
12b-1 fees that are paid out of the Fund's assets ("12b-1" refers to the federal
securities regulation that authorizes annual fees of this type). The 12b-1 fee
rates vary by fund and by share class, according to Rule 12b-1 plans adopted by
the funds. The sales charges and 12b-1 fees paid by investors are detailed in
the fund-by-fund information.

24
<PAGE>

Initial compensation Whenever you make an investment in Class B shares of Money
Market Fund, the financial services firm receives a commission equal to 3.75% of
the offering price. The firm also receives the first year's service fee equal to
0.25% of the net amount invested.

Whenever you make an investment in Class C shares of Money Market Fund, the
financial services firm receives a commission equal to 0.75% of the offering
price. The firm also receives the first year's service fee equal to 0.25% of the
net amount invested.

Annual compensation Beginning with the second year after an investment is made,
the financial services firm receives an annual service fee of 0.15% of its total
eligible net assets in Money Market Fund Class A shares and 0.25% of its total
eligible net assets in Class B and Class C shares. This fee is paid quarterly in
arrears by the Fund.

Financial services firms selling large amounts of fund shares may receive extra
compensation. This compensation, which John Hancock Funds pays out of its own
resources, may include asset retention fees as well as reimbursement for
marketing expenses.

NET ASSET VALUE

For purposes of calculating the net asset value ("NAV") of the Fund's shares,
the following procedures are utilized wherever applicable.

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 each class 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 in either class from dividends is reflected as an
increase in the number of shares of such class in the shareholder's account or
is distributed as cash if a shareholder has so elected.

25
<PAGE>

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 any
class of shares of the Fund, shareholders are deemed to have agreed to make such
a contribution. This procedure permits 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.

The NAV for the fund and class is determined twice each business day at 12 noon
and at the close of regular trading on the New York Stock Exchange (typically 4
p.m. Eastern Time), by dividing a class's net assets by the number of its shares
outstanding. To help the Fund maintain its $1 constant share price, portfolio
investments are valued at cost, and any discount or premium created by market
movements is amortized to maturity.

PURCHASE OF CLASS A SHARES

Class A shares of the Fund will be sold at their net asset value without a sales
charge. Share certificates will not be issued unless requested by the
shareholder in writing, and then only will be issued for full shares. The
Trustees reserve the right to change or waive the Fund's minimum investment
requirements and to reject any order to purchase shares (including purchase by
exchange) when in the judgment of the Adviser such rejection is in the Fund's
best interest.

DEFERRED SALES CHARGE ON CLASS B AND CLASS C SHARES

Investments in Class B and Class C shares are purchased at net asset value per
share without the imposition of a sales charge so the Fund will receive the full
amount of the purchase payment.

Contingent Deferred Sales Charge. Class B and Class C shares which are redeemed
within six years or one year of purchase, respectively, will be subject to a
contingent deferred sales charge ("CDSC") at the rates set forth in the
Prospectus as a percentage of the dollar amount subject to the CDSC. The charge
will be assessed on an amount equal to the lesser of the current market value or
the original purchase cost of the Class B or Class C shares being redeemed. No
CDSC will be imposed on increases in account value above the initial purchase
prices, including all shares derived from reinvestment of dividends or capital
gains distributions.

Class B shares are not available to full-service retirement plans administered
by John Hancock Signature Services Inc. ("Signature Services") or the Life
Company that had more than 100 eligible employees at the inception of the Fund
account.

26
<PAGE>

The amount of the CDSC, if any, will vary depending on the number of years from
the time of payment for the purchase of Class B shares until the time of
redemption of such shares. Solely for purposes of determining the number of
years from the time of any payment for the purchases of both Class B and Class C
shares, all payments during a month will be aggregated and deemed to have been
made on the first day of the month.

In determining whether a CDSC applies to a redemption, the calculation will be
determined in a manner that results in the lowest possible rate being charged.
It will be assumed that your redemption comes first from shares you have held
beyond the six-year CDSC redemption period for Class B or one year CDSC
redemption period for Class C or those you acquired through dividend and capital
gain reinvestment, and next from the shares you have held the longest during the
six-year period for Class B shares. For this purpose, the amount of any increase
in a share's value above its initial purchase price is regarded as a share
exempt from CDSC. Thus, when a share that has appreciated in value is redeemed
during the CDSC period, a CDSC is assessed only on its initial purchase price.

When requesting a redemption for a specific dollar amount please indicate if you
require the proceeds to equal the dollar amount requested. If not indicated,
only the specified dollar amount will be redeemed from your account and the
proceeds will be less any applicable CDSC.

Example:

You have purchased 100 shares at $1 per share. The second year after your
purchase, you have gained 10 additional shares through dividend reinvestment. If
you redeem 50 shares at this time your CDSC will be calculated as follows:

* Proceeds of 50 shares redeemed at $1 per share $50
* Minus proceeds of 10 shares not subject to CDSC (dividend -10
reinvestment) ---
* Amount subject to CDSC $40

Proceeds from the CDSC are paid to John Hancock Funds and are used in whole or
in part by John Hancock Funds to defray its expenses related to providing
distribution-related services to the Fund in connection with the sale of the
Class B and Class C shares, such as the payment of compensation to select
Selling Brokers for selling Class B and Class C shares. The combination of the
CDSC and the distribution and service fees facilitates the ability of the Fund
to sell the Class B and Class C shares without a sales charge being deducted at
the time of the purchase.

Waiver of Contingent Deferred Sales Charge. The CDSC will be waived on
redemptions of Class B and Class C shares and Class A shares that are subject to
a CDSC, unless indicated otherwise, in the circumstances defined below:

For all account types:

* Redemptions made pursuant to the Fund's right to liquidate your account
if you own shares worth less than $1,000.

* Redemptions made under certain liquidation, merger or acquisition
transactions involving other investment companies or personal holding
companies.

27
<PAGE>

* Redemptions due to death or disability. (Does not apply to Trust
accounts unless trust is being dissolved.)

* Redemptions made under the Reinstatement Privilege, as described in
"Sales Charge Reductions and Waivers" in the Prospectus.

* Redemptions of Class B (but not Class C) shares made under a periodic
withdrawal plan, or redemptions for fees charged by planners or
advisors for advisory services, as long as your annual redemptions do
not exceed 12% of your account value, including reinvested dividends,
at the time you established your periodic withdrawal plan and 12% of
the value of subsequent investments (less redemptions) in that account
at the time you notify Signature Services. (Please note, this waiver
does not apply to periodic withdrawal plan redemptions of Class A or
Class C shares that are subject to a CDSC.)

For Retirement Accounts (such as traditional, Roth and Education IRAs, SIMPLE
IRAs, SIMPLE 401(k), Rollover IRA, TSA, 457, 403(b), 401(k), Money Purchase
Pension Plan, Profit-Sharing Plan and other plans as described in the Internal
Revenue Code) unless otherwise noted.

* Redemptions made to effect mandatory or life expectancy distributions
under the Internal Revenue Code.

* Returns of excess contributions made to these plans.

* Redemptions made to effect distributions to participants or
beneficiaries from employer sponsored retirement plans under Section
401(a) (such as Money Purchase Pension Plans, and Profit Sharing Plan
401(k) Plans), 457 and 408 (SEPs and SIMPLE IRAs) of the Internal
Revenue Code.

* Redemptions from certain IRA and retirement plans that purchased shares
prior to October 1, 1992 and certain IRA plans that purchased shares
prior to May 15, 1995.

Please see matrix for some examples.

28
<PAGE>

<S> <C> <C> <C> <C> <C>
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Type of 401 (a) Plan 403 (b) 457 IRA, IRA Non-
Distribution (401 (k), Rollover retirement
MPP, PSP)
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Death or Waived Waived Waived Waived Waived
Disability
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Over 70 1/2 Waived Waived Waived Waived for 12% of account
mandatory value annually
distributions in periodic
or 12% of payments
account value
annually in
periodic
payments.
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Between 59 1/2 Waived Waived Waived Waived for Life 12% of account
and 70 1/2 Expectancy or value annually
12% of account in periodic
value annually payments
in periodic
payments.
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Under 59 1/2 Waived for Waived for Waived for Waived for 12% of account
(Class B only) annuity annuity annuity annuity value annually
payments (72t) payments (72t) payments (72t) payments (72t) in periodic
or 12% of or 12% of or 12% of or 12% of payments
account value account value account value account value
annually in annually in annually in annually in
periodic periodic periodic periodic
payments payments. payments. payments.
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Loans Waived Waived N/A N/A N/A
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Termination of Not Waived Not Waived Not Waived Not Waived N/A
Plan
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Hardships Waived Waived Waived N/A N/A
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Qualified Domestic Waived Waived Waived N/A N/A
Relations Orders
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Termination of Waived Waived Waived N/A N/A
Employment Before
Normal Retirement Age
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
Return of Waived Waived Waived Waived N/A
Excess
- ----------------------- ----------------- ----------------- ---------------- ----------------- ----------------
</TABLE>

If you qualify for a CDSC waiver under one of these situations, you must notify
Signature Services at the time you make your redemption. The waiver will be
granted once Signature Services has confirmed that you are entitled to the
waiver.

29
<PAGE>

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 by the Trustees. When the shareholder sells portfolio
securities received in this fashion, the shareholder will incur a brokerage
charge. Any such security would be valued for the purpose of making such payment
at the same value as used in determining the Fund's net asset value. The Fund
has elected to be governed by Rule 18f-1 under the Investment Company 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. The Fund permits exchanges of shares of any class of a fund
for shares of the same class in any other John Hancock fund offering that class.

Exchanges between funds with shares that are not subject to a CDSC are based on
their respective net asset values. No sales charge or transaction charge is
imposed. Shares of the Fund which are subject to a CDSC may be exchanged into
shares of any of the other John Hancock funds that are subject to a CDSC without
incurring the CDSC; however, the shares acquired in an exchange will be subject
to the CDSC schedule of the shares acquired if and when such shares are redeemed
(except that shares exchanged into John Hancock Intermediate Government Fund
will retain the exchanged fund's CDSC schedule). For purposes of computing the
CDSC payable upon redemption of shares acquired in an exchange, the holding
period of the original shares is added to the holding period of the shares
acquired in an exchange.

If a shareholder exchanges Class B shares purchased prior to January 1, 1994 for
Class B shares of any other John Hancock fund, the acquired shares will continue
to be subject to the CDSC schedule that was in effect when the exchanged shares
were purchased.

The Fund reserves the right to require that previously exchanged shares (and
reinvested dividends) be in the Fund for 90 days before a shareholder is
permitted a new exchange.

The Fund may refuse any exchange order. The Fund may change or cancel its
exchange policies at any time, upon 60 days' notice to its shareholders.

An exchange of shares is treated as a redemption of shares of one fund and the
purchase of shares of another for Federal Income Tax purposes. An exchange may
result in a taxable gain or loss. See "TAX STATUS".

Systematic Withdrawal Plan. The Fund permits the establishment of a Systematic
Withdrawal Plan. Payments under this plan represent proceeds from the redemption
of Fund shares which may result in realization of gain or loss for purposes of
Federal, state and local income taxes. The maintenance of a Systematic
Withdrawal Plan concurrently with purchases of additional shares of the Fund
could be disadvantageous to a shareholder because of the CDSC imposed on
redemptions of Class B and Class C shares. Therefore, a shareholder should not
purchase shares of the Fund at the same time as a Systematic Withdrawal Plan is
in effect. 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
Signature Services.

30
<PAGE>

Monthly Automatic Accumulation Program ("MAAP"). The program is explained in the
Prospectus. 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 MAAP may be revoked by Signature
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 checks.

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

Reinstatement and Reinvestment Privilege. If Signature Services is notified
prior to reinvestment, a shareholder who has redeemed Fund shares and paid a
CDSC thereon, may, within 120 days after the date of redemption, reinvest any
part of the redemption proceeds in shares of the same class of the same Fund or
another John Hancock fund, subject to the minimum investment limit in that fund
and, upon such reinvestment, the shareholder's account will be credited with the
amount of any CDSC charged upon the redemption and the new shares will continue
to be subject to the CDSC. The holding period of the shares acquired through
reinvestment will, for purposes of computing the CDSC payable upon a subsequent
redemption, include the holding period of the redeemed shares.

To protect the interests of other investors in the Fund, the Fund may cancel the
reinvestment privilege of any parties that, in the opinion of the Fund, are
using market timing strategies or making more than seven exchanges per owner or
controlling party per calendar year. Also, the Fund may refuse any reinvestment
request.

The Fund may change or cancel its reinvestment policies at any time.

A redemption or exchange of Fund shares is a taxable transaction for Federal
income tax purposes even if the reinvestment privilege is exercised, and any
gain or loss realized by a shareholder on the redemption or other disposition of
Fund shares will be treated for tax purposes as described under the caption "TAX
STATUS".

DESCRIPTION OF THE FUND'S SHARES

The Trustees of the Trust are responsible for the management and supervision of
the Fund. The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest of the Fund, without
par value. Under the Declaration of Trust, the Trustees have the authority to
create and classify shares of beneficial interest in separate series, without
further action by shareholders. As of the date of this Statement of Additional
Information, the Trustees have authorized shares of the Fund and one other
series. Additional series may be added in the future. The Declaration of Trust
also authorizes the Trustees to classify and reclassify the shares of the Fund
or any new series of the Trust, into one or more classes. The Trustees have also
authorized the issuance of three classes of shares of the fund, designated as
Class A, Class B and Class C.

31
<PAGE>

The shares of each class of the Fund represent an equal proportionate interest
in the aggregate net assets attributable to that class of the Fund. Holders of
each class of shares have certain exclusive voting rights on matters relating to
their respective distribution plans. The different classes of the Fund may bear
different expenses relating to the cost of holding shareholder meetings
necessitated by the exclusive voting rights of any class of shares.

Dividends paid by the Fund, if any, with respect to each class of shares will be
calculated in the same manner, at the same time and on the same day and will be
in the same amount, except for differences resulting from the facts that (i) the
distribution and service fees relating to each class will be borne exclusively
by that class (ii) Class B and Class C shares will pay higher distribution and
service fees than Class A shares and (iii) each class of shares will bear any
class expenses properly allocable to that class of shares, subject to the
conditions the Internal Revenue Service imposes with respect to the
multiple-class structures. Similarly, the net asset value per share may vary
depending on which class of shares are purchased. No interest will be paid on
uncashed dividend or redemption checks.

In the event of liquidation, shareholders of each class are entitled to share
pro rata in the net assets of the Fund available for distribution to these
shareholders. Shares entitle their holders to one vote per share, are freely
transferable and have no preemptive, subscription or conversion rights. When
issued, shares are fully paid and non-assessable, except as set forth below.

Unless otherwise required by the Investment Company Act or the Declaration of
Trust, the Fund has no intention of holding annual meetings of shareholders.
Fund shareholders may remove a Trustee by the affirmative vote of at least
two-thirds of the Trust's outstanding shares and the Trustees shall promptly
call a meeting for such purpose when requested to do so in writing by the record
holders of not less than 10% of the outstanding shares of the Trust.
Shareholders may, under certain circumstances, communicate with other
shareholders in connection with requesting a special meeting of shareholders.
However, at any time that less than a majority of the Trustees holding office
were elected by the shareholders, the Trustees will call a special meeting of
shareholders for the purpose of electing Trustees.

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 Declaration of Trust contains an express disclaimer
of shareholder liability for acts, obligations or 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. The Declaration of Trust also provides
that no series of the Trust shall be liable for the liabilities of any other
series. Furthermore, no Fund included in this Fund's prospectus shall be liable
for the liabilities of any other John Hancock Fund. Liability is therefore
limited to circumstances in which the Fund itself would be unable to meet its
obligations, and the possibility of this occurrence is remote.

The Fund reserves the right to reject any application which conflicts with the
Fund's internal policies or policies of any regulatory authority. John Hancock
Funds does not accept starter, credit card or third party checks. All checks
returned by the post office as undeliverable will be reinvested at net asset
value in the fund or funds from which a redemption was made or dividend paid.
Information provided on the account application may be used by the Fund to
verify the accuracy of the information or for background or financial history
purposes. A joint account will be administered as a joint tenancy with right of
survivorship, unless the joint owners notify Signature Services of a different
intent. A shareholder's account is governed by the laws of The Commonwealth of
Massachusetts. For telephone transactions, the transfer agent will take measures
to verify the identity of the caller, such as asking for name, account number,
Social Security or other taxpayer ID number and other relevant information. If
appropriate measures are taken, the transfer agent is not responsible for any
losses that may occur to any account due to an unauthorized telephone call. Also
for your protection telephone transactions are not permitted on accounts whose
names or addresses have changed within the past 30 days. Proceeds from telephone
transactions can only be mailed to the address of record.

32
<PAGE>

Selling activities for the Fund may not take place outside the U.S. except with
U.S. military bases, APO addresses and U.S. diplomats. Brokers of record on
Non-U.S. investors' accounts with foreign mailing addresses are required to
certify that all sales activities have occurred, and in the future will occur,
only in the U.S. A foreign corporation may purchase shares of the Fund only if
it has a U.S. mailing address.

TAX STATUS

The Fund is treated as a separate entity for accounting and tax purposes, has
qualified and 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 for each taxable year. 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 in accordance with the timing requirements of the Code.

The Fund will be subject to a 4% non-deductible 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 seek to avoid or minimize liability for
such tax by satisfying such distribution requirements.

Distributions from the Fund's current or accumulated earnings and profits
("E&P") will be taxable under the Code for investors who are subject to tax. If
these distributions are paid from the Fund's "investment company taxable
income," they will be taxable as ordinary income; and if they are paid from the
Fund's "net capital gain," they will be taxable as long-term capital gain. (Net
capital gain is the excess (if any) of net long-term capital gain over net
short-term capital loss and investment company taxable income is all taxable
income and capital gains or losses, other than those gains or losses taken into
account in computing net capital gain, after reduction by deductible expenses.
It is not likely that the Fund will earn or distribute any net capital gain.)
Some distributions may be paid in January but may be taxable to shareholders as
if they had been received on December 31 of the previous year. Distributions
from the Fund will not qualify for the dividends-received deduction for any
corporate shareholder. The tax treatment described above will apply without
regard to whether distributions are received in cash or reinvested in additional
shares of the Fund.

Distributions, if any, in excess of E&P will constitute a return of capital
under the Code, which will first reduce an investor's federal tax basis in Fund
shares and then, to the extent such basis is exceeded, will generally give rise
to capital gains. Shareholders who have chosen automatic reinvestment of their
distributions will have a federal tax basis in each share received pursuant to
such a reinvestment equal to the amount of cash they would have received had
they elected to receive the distribution in cash, divided by the number of
shares received in the reinvestment.

33
<PAGE>

Upon a redemption or other disposition of shares of the Fund (including by
exercise of the exchange privilege) a shareholder ordinarily will not realize a
taxable gain or loss if the Fund always successfully maintains a constant net
asset value per share, although a loss may still arise if a CDSC is paid. If the
Fund is not successful in maintaining a constant net asset value per share, a
redemption may produce a taxable gain or loss. Any gain or loss will be treated
as capital gain or loss if the shares are capital assets in the shareholder's
hands and will be long-term or short-term, depending upon the shareholder's tax
holding period for the shares and subject to the special rules described below.
Also, any loss realized on a redemption or exchange may be disallowed to the
extent the shares disposed of are replaced with other shares of the same Fund
within a period of 61 days beginning 30 days before and ending 30 days after the
shares are disposed of, such as pursuant to automatic dividend reinvestments. In
such a case, the basis of the shares acquired will be adjusted to reflect the
disallowed loss.

Any loss realized upon the redemption of shares with a tax holding period of six
months or less will be treated as a long-term capital loss to the extent of any
amounts treated as distributions of long-term capital gain with respect to such
shares. Shareholders should consult their own tax advisers regarding their
particular circumstances to determine whether a disposition of Fund shares is
properly treated as a sale for tax purposes, as is assumed in the foregoing
discussion. Also, future Treasury Department guidance issued to implement the
Act may contain additional rules for determining the tax treatment of sales of
Fund shares held for various periods including the treatment of losses on the
sales of shares held for six months or less that are recharacterized as
long-term capital losses, as described above.

For Federal income tax purposes, the Fund is permitted to carry forward a net
capital loss in any year to offset its own 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. The
Fund does not have any capital loss carryforwards.

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 may be subject to withholding and other taxes imposed by foreign
countries with respect to its investments, if any, in foreign securities. Some
tax conventions between certain countries and the U.S. may reduce or eliminate
such taxes. It is not likely that the Fund will generally qualify to pass
through such foreign taxes and any associated foreign tax credits or deduction
to its shareholders, who therefore will generally not take such taxes into
account directly on their tax returns.

The foregoing discussion relates solely to U.S. Federal income tax law as
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 types 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 Fund
shares 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, a Fund in their
particular circumstances.

34
<PAGE>

A state income ( and possibly local income and/or intangible property) tax
exemption is generally available to the extent (if any) 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. The Fund will not seek to satisfy any
threshold or reporting requirements that may apply in particular taxing
jurisdictions, although the Fund may in its sole discretion provide relevant
information to shareholders.

The Fund will be required to report to the Internal Revenue Service (the "IRS")
all taxable distributions to shareholders, except in the case of certain exempt
recipients, i.e., corporations and certain other investors distributions to
which are exempt from the information reporting provisions of the Code. Under
the backup withholding provisions of Code Section 3406 and applicable Treasury
regulations, all such reportable distributions may be subject to backup
withholding of federal income tax at the rate of 31% in the case of non-exempt
shareholders who fail to furnish the Fund with their correct taxpayer
identification number and certain certifications required by the IRS or if the
IRS or a broker notifies the Fund that the number furnished by the shareholders
is incorrect or that the shareholder is subject to backup withholding as a
result of failure to report interest or dividend income. The Fund may refuse to
accept an application that does not contain any required taxpayer identification
number or certification that the number provided is correct. If the backup
withholding provisions are applicable, any such distributions, whether taken in
cash or reinvested in shares, will be reduced by the amounts required to be
withheld. Any amounts withheld may be credited against a shareholder's U.S.
federal income tax liability. Investors should consult their tax advisers about
the applicability of the backup withholding provisions.

Non-U.S. investors not engaged in a U.S. trade or business with which their
investment in the Fund 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 and, unless an effective IRS Form W-8 or authorized
substitute for Form W-8 is on file, to 31% backup withholding on certain other
payments 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.

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

CALCULATION OF PERFORMANCE

For the purposes of calculating yield for the classes of the Fund, 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.

35
<PAGE>

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
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 compared to indices of mutual funds and bank deposit
vehicles such as Lipper Analytical Services, Inc.'s "Lipper--Fixed Income Fund
Performance Analysis," a monthly publication which tracks net assets, total
return, and yield on 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 BARRON'S, etc. will also be
utilized. A Fund's promotional and sales literature may make reference to the
Fund's "beta." Beta reflects 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 and the
allocation of brokerage commissions are made by the Adviser pursuant to
recommendations made by its investment committee of the Adviser, which consists
of officers and directors of the Adviser and affiliates 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 Adviser, 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." 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 these transactions.

36
<PAGE>

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 which
a transaction is executed. Consistent with the foregoing primary policy, the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.,
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 Adviser's officers will be primarily responsible for
the allocation of the Fund's brokerage business, their policies and practices of
the Adviser 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 October
31,1996 and 1995, the Fund did not pay negotiated brokerage commissions on
portfolio transactions. Also for the period from November 1, 1996 to March 31,
1997 and fiscal years ended March 31, 1999 and 1998, the Fund did not pay
negotiated brokerage commissions 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 years ended March 31, 1999 and
1998, 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 Signator Services, Inc., a broker-dealer (until January 1, 1999,
John Hancock Distributors, Inc.) ("Signator" or "Affiliated Broker"). 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 the Affiliated Broker. For the fiscal years ended March 31, 1999 and
1998, the Fund paid did not pay brokerage commissions to any Affiliated Broker.

37
<PAGE>

Signator 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 Investment Company 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 Investment Company
Act) of the Fund, the Adviser or the Affiliated Broker. Because the Adviser,
which is affiliated with the Affiliated Broker, 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 Broker as a basis for
negotiating commissions at a rate higher than that determined in accordance with
the above criteria.

Other investment advisory clients advised by the Adviser may also invest in the
same securities as the Fund. When these clients buy or sell the same securities
at substantially the same time, the Adviser may average the transactions as to
price and allocate the amount of available investments in a manner which the
Adviser believes to be equitable to each client, including the Fund. In some
instances, this investment procedure may adversely affect the price paid or
received by the Fund or the size of the position obtainable for it. On the other
hand, to the extent permitted by law, the Adviser may aggregate the securities
to be sold or purchased for the Fund with those to be sold or purchased for
other clients managed by it in order to obtain best execution.

TRANSFER AGENT SERVICES

John Hancock Signature Services, Inc., 1 John Hancock Way, Suite 1000, Boston,
MA 02217-1000, a wholly owned indirect subsidiary of the Life Company, is the
transfer and dividend paying agent of the Fund. The Fund pays Signature Services
an annual fee of $20.00 for each Class A shareholder account, $22.50 for each
Class B shareholder account and $21.50 for each Class C shareholder account. The
Fund also pays certain out-of-pocket expenses and these expenses are aggregated
and charged to the Fund and allocated to each class on the basis of their
relative net asset values.

CUSTODY OF PORTFOLIO

Portfolio securities of the Fund are held pursuant to a custodian agreement
between the Fund and State Street Bank and Trust Company, 225 Franklin Street,
Boston Massachusetts 02110. Under the custodian agreement, the custodian
performs custody, portfolio and fund accounting services.

INDEPENDENT AUDITORS

The independent auditors of the Fund are Ernst & Young LLP, 200 Clarendon
Street, Boston, Massachusetts 02116. The financial statements of the Fund
included in the Prospectus and this Statement of Additional Information are as
of the Fund's fiscal year ended March 31, 1999 and 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.

38
<PAGE>

APPENDIX A

TYPES OF INVESTMENT RISK

Credit risk The risk that the issuer of a security, or the counterparty to a
contract, will default or other-wise become unable to honor a financial
obligation. Common to all debt securities.

Interest rate risk The risk of market losses attributable to changes in interest
rates. With fixed-rate securities, a rise in interest rates typically causes a
fall in values, while a fall in rates typically causes a rise in values.

Leverage risk Associated with securities or practices (such as when-issued and
forward commitment transactions) that multiply small market movements into large
changes in value.

Liquidity risk The risk that certain securities may be difficult or impossible
to sell at the time and the price that the seller would like.

Management risk The risk that a strategy used by a fund's management may fail to
produce the intended result. Common to all mutual funds.

Market risk The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. Common to all debt securities and the
mutual funds that invest in them.

Opportunity risk The risk of missing out on an investment opportunity because
the assets necessary to take advantage of it are tied up in less advantageous
investments.

Valuation risk The risk that a fund has valued certain of its securities at a
higher price than it can sell them for.

Year 2000 risk The risk that the funds' operations could be disrupted by year
2000-related computer system problems. Although the adviser and the funds'
service providers are taking steps to address this issue, there may still be
some risk of adverse effects. Common to all mutual funds.

A-1
<PAGE>

APPENDIX B

CORPORATE AND TAX-EXEMPT BOND RATINGS

Moody's Investors Service, Inc. ("Moody's)

Aaa, Aa, A and Baa - Bonds rated Aaa are judged to be of the "best quality." The
rating of Aa is assigned to bonds that are of "high quality by all standards,"
but long-term risks appear somewhat larger than Aaa rated bonds. The Aaa and Aa
rated bonds are generally known as "high grade bonds." The foregoing ratings for
tax-exempt bonds are rated conditionally. Bonds for which the security depends
upon the completion of some act or upon the fulfillment of some condition are
rated conditionally. These are bonds secured by (a) earnings of projects under
construction, (b) earnings of projects unseasoned in operation experience, (c)
rentals that begin when facilities are completed, or (d) payments to which some
other limiting condition attaches. Such conditional ratings denote the probable
credit stature upon completion of construction or elimination of the basis of
the condition. Bonds rated A are considered as upper medium grade obligations.
Principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future. Bonds rated
Baa are considered a medium grade obligations; i.e., they are neither highly
protected or poorly secured. Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time. Such bonds lack
outstanding investment characteristics and in fact, have speculative
characteristics as well.

Standard & Poor's Ratings Group ("S&P")

AAA, AA, A and BBB - Bonds rated AAA bear the highest rating assigned to debt
obligations, which indicates an extremely strong capacity to pay principal and
interest. Bonds rated AA are considered "high grade," are only slightly less
marked than those of AAA ratings and have the second strongest capacity for
payment of debt service. Bonds rated A have a strong capacity to pay principal
and interest, although they are somewhat susceptible to the adverse effects of
changes in circumstances and economic conditions. The foregoing ratings are
sometimes followed by a "p" indicating that the rating is provisional. A
provisional rating assumes the successful completion of the project financed by
the bonds being rated and indicates that payment of debt service requirements is
largely or entirely dependent upon the successful and timely completion of the
project. Although a provisional rating addresses credit quality subsequent to
completion of the project, it makes no comment on the likelihood of, or the risk
of default upon failure of, such completion. Bonds rated BBB are regarded as
having an adequate capacity to repay principal and pay interest. Whereas they
normally exhibit protection parameters, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity to repay principal
and pay interest for bonds in this category than for bonds in the A category.

Fitch Investors Service ("Fitch")

AAA, AA, A, BBB - Bonds rated AAA are considered to be investment grade and of
the highest quality. The obligor has an extraordinary ability to pay interest
and repay principal, which is unlikely to be affected by reasonably foreseeable
events. Bonds rated AA are considered to be investment grade and of high
quality. The obligor's ability to pay interest and repay principal, while very
strong, is somewhat less than for AAA rated securities or more subject to
possible change over the term of the issue. Bonds rated A are considered to be
investment grade and of good quality. The obligor's ability to pay interest and
repay principal is considered to be strong, but may be more vulnerable to
adverse changes in economic conditions and circumstances than bonds with higher
ratings. Bonds rated BBB are considered to be investment grade and of
satisfactory quality. The obligor's ability to pay interest and repay principal
is considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to weaken this ability than bonds with
higher ratings.

A-2
<PAGE>

TAX-EXEMPT NOTE RATINGS

Moody's - MIG-1 and MIG-2. Notes rated MIG-1 are judged to be of the best
quality, enjoying strong protection from established cash flow or funds for
their services or from established and broad-based access to the market for
refinancing or both. Notes rated MIG-2 are judged to be of high quality with
ample margins of protection, though not as large as MIG-1.

S&P - SP-1 and SP-2. SP-1 denotes a very strong or strong capacity to pay
principal and interest. Issues determined to possess overwhelming safety
characteristics are given a plus (+) designation (SP-1+). SP-2 denotes a
satisfactory capacity to pay principal and interest.

Fitch - FIN-1 and FIN-2. Notes assigned FIN-1 are regarded as having the
strongest degree of assurance for timely payment. A plus symbol may be used to
indicate relative standing. Notes assigned FIN-2 reflect a degree of assurance
for timely payment only slightly less in degree than the highest category.

CORPORATE AND TAX-EXEMPT COMMERCIAL PAPER RATINGS

Moody's - Commercial Paper ratings are opinions of the ability of issuers to
repay punctually promissory obligations not having an original maturity in
excess of nine months. Prime-1, indicates highest quality repayment capacity of
rated issue and Prime-2 indicates higher quality.

S&P - Commercial Paper ratings are a current assessment of the likelihood of
timely payment of debts having an original maturity of no more than 365 days.
Issues rated A have the greatest capacity for a timely payment and the
designation 1, 2 and 3 indicates the relative degree of safety. Issues rated
"A-1+" are those with an "overwhelming degree of credit protection."

Fitch - Commercial Paper ratings reflect current appraisal of the degree of
assurance of timely payment. F-1 issues are regarded as having the strongest
degree of assurance for timely payment. (+) is used to designate the relative
position of an issuer within the rating category. F-2 issues reflect an
assurance of timely payment only slightly less in degree than the strongest
issues. The symbol (LOC) may follow either category and indicates that a letter
of credit issued by a commercial bank is attached to the commercial paper note.

Other Considerations - The ratings of S&P, Moody's, and Fitch represent their
respective opinions of the quality of the municipal securities they undertake to
rate. It should be emphasized, however, that ratings are general and are not
absolute standards of quality. Consequently, municipal securities with the same
maturity, coupon and ratings may have different yields and municipal securities
of the same maturity and coupon with different ratings may have the same yield.

A-3
<PAGE>

FINANCIAL STATEMENTS

The financial statements listed below are included in the Fund's 1999 Annual
Report to Shareholders for the year ended March 31, 1999; (filed electronically
on May 24, 1999, accession number 0001010521-99-000219) and are included in and
incorporated by reference into Part B of the Registration Statement for John
Hancock Money Market Fund (file nos.
811-02485 and 2-50931.)

John Hancock Current Interest
John Hancock Money Market Fund

Statement of Assets and Liabilities as of March 31, 1999
Statement of Operations for the year ended March 31, 1999.
Statement of Changes in Net Assets for each of the periods indicated therein.
Financial Highlights for each of the periods indicated therein.
Schedule of Investments as of March 31, 1999.
Notes to Financial Statements.
Report of Independent Auditors.

F-1

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JOHN HANCOCK U.S. GOVERNMENT CASH RESERVE

Statement Of Additional Information

August 1, 1999

This Statement of Additional Information provides information about John Hancock
U.S. Government Cash Reserve (the "Fund"), in addition to the information that
is contained in the combined Money Market Funds' Prospectus dated August 1, 1999
(the "Prospectus"). The Fund is a diversified series of John Hancock Current
Interest (the "Trust").

This Statement of Additional Information 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 Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, Massachusetts 02217-1000
1-800-225-5291

Table of Contents
Page
Organization of the Fund............................................. 2
Investment Objective and Policies.................................... 2
Investment Restrictions.............................................. 4
Those Responsible for Management..................................... 6
Investment Advisory and Other Services............................... 16
Distribution Contracts............................................... 18
Net Asset Value...................................................... 19
Purchase of Shares................................................... 20
Special Redemptions.................................................. 20
Additional Services and Programs..................................... 20
Description of the Fund's Shares..................................... 21
Tax Status........................................................... 22
Calculation of Performance........................................... 24
Brokerage Allocation................................................. 25
Transfer Agent Services.............................................. 27
Custody of Portfolio................................................. 27
Independent Auditors................................................. 27
Financial Statements................................................. F-1

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ORGANIZATION OF THE FUND

John Hancock Advisers, Inc. (the "Adviser"), is the Fund's investment adviser,
an indirect wholly-owned subsidiary of John Hancock Mutual Life Insurance
Company (the "Life Company") a Massachusetts life insurance company chartered in
1862 with national headquarters at John Hancock Place, Boston, Massachusetts.

INVESTMENT OBJECTIVE AND POLICIES

The following information supplements the discussion of the Fund's investment
objective and policies discussed in the Prospectus. The investment objective of
the Fund is fundamental and may only be changed with shareholder approval. There
is no assurance that the Fund will achieve its investment objective.

The Fund invests only in securities issued or guaranteed by the U.S. Government
which mature within 13 months from the date of purchase and repurchase
agreements with respect to these 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.

Securities issued or guaranteed by the U.S. Government 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.

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'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.

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. U.S. Treasury bills, notes and bonds, and certain obligations
of government agencies and instrumentalities, such as Government National
Mortgage Association pass-through certificates ("Ginnie Maes") are supported by
the full faith and credit of the U.S. Treasury (the "Treasury"). Other
obligations such as securities of the Federal Home Loan Bank and the Federal
Home Loan Mortgage Corporation ("Freddie Macs") 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 ("Fannie Maes"), which is a private
corporation, are supported only by the credit of the issuing instrumentality. 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.

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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.

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 during the period in which the Fund seeks
to enforce its rights thereto, possible subnormal levels of income decline in
value of the underlying securities or lack of access to income during this
period as well as the expense of enforcing its rights.

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.

Reverse Repurchase Agreements. The Fund may also enter into reverse repurchase
agreements which involve the sale of U.S. Government securities held in its
portfolio to a bank with an agreement that the Fund will buy back the securities
at a fixed future date at a fixed price plus an agreed amount of "interest"
which may be reflected in the repurchase price. Reverse repurchase agreements
are considered to be borrowings by the Fund. Reverse repurchase agreements
involve the risk that the market value of securities purchased by the Fund with
proceeds of the transaction may decline below the repurchase price of the
securities sold by the Fund which it is obligated to repurchase. The Fund will
also continue to be subject to the risk of a decline in the market value of the
securities sold under the agreements because it will reacquire those securities
upon effecting their repurchase. To minimize various risks associated with
reverse repurchase agreements, the Fund will establish a separate account
consisting of liquid securities (plus any accrued interest thereon) under such
agreements. In addition, the Fund will not enter into reverse repurchase
agreements or 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. The Fund will enter into
reverse repurchase agreements only with federally insured banks or savings and
loan associations which are approved in advance as being creditworthy by the
Trustees. Under procedures established by the Trustees, the Adviser will monitor
the creditworthiness of the banks involved.

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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 a relatively brief
period of time. The Fund may engage in short-term trading in response to stock
market conditions, changes in interest rates or other income trends and
developments or to take advantage of yield disparities in different segments of
the market for Government Obligations. Short-term trading may have the effect of
increasing portfolio turnover rate. A high rate of portfolio turnover (100% or
greater) involves correspondingly greater brokerage expenses. The Fund's
portfolio turnover rate is set forth under the caption "Financial Highlights" in
the Prospectus.

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.

INVESTMENT RESTRICTIONS

Fundamental Investment Restrictions. The following investment restrictions will
not be changed without the approval of a majority of the Fund's outstanding
voting securities which, as used in the Prospectus and this Statement of
Additional Information, means approval by the lesser of (1) the holders of 67%
or more of the Fund's shares represented at a meeting if more than 50% of the
Fund's outstanding shares are present in person or by proxy at that meeting or
(2) more than 50% of the Fund's outstanding shares.

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 this Statement of Additional
Information.

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;

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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 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).

10. 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

11. 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.

Non-fundamental Investment Restriction. The following investment restriction is
designated as non-fundamental and may be changed by the Trustees without
shareholder approval:

The Fund may not:

1. Purchase a security if, as a result, (i) more than 10% of
the Fund's total assets would be invested in the securities of
other investment companies, (ii) the Fund would hold more than
3% of the total outstanding voting securities of any one
investment company, or (iii) more than 5% of the Fund's total
assets would be invested in the securities of any one
investment company. These limitations do not apply to (a) the
investment of cash collateral, received by the Fund in
connection with lending of the Fund's portfolio securities, in
the securities of open-end investment companies or (b) the
purchase of shares of any investment company in connection
with a merger, consolidation, reorganization or purchase of
substantially all of the assets of another investment company.
Subject to the above percentage limitations, 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.

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THOSE RESPONSIBLE FOR MANAGEMENT

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Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

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Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

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Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

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Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

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Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

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Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

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Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

Osbert M. Hood Senior Vice President and Chief Senior Vice President , Chief
101 Huntington Avenue Financial Officer Financial Officer and Treasurer, the
Boston, MA 02199 Adviser, the Berkeley Group and John
August 1952 Hancock Funds, Inc.; Vice President
and Chief Financial Officer, John
Hancock Mutual Life Insurance
Company Retail Sector (until 1997).

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Positions Held Principal Occupation(s)
Name and Address With the Company During the Past Five Years
- ---------------- ---------------- --------------------------
<S> <C> <C>

Susan S. Newton Vice President and Secretary Vice President, the Adviser; John
101 Huntington Avenue Hancock Funds, Signature Services
Boston, MA 02199 and The Berkeley Group.
March 1950

James J. Stokowski Vice President, Treasurer and Chief Vice President, the Adviser.
101 Huntington Avenue Accounting Officer
Boston, MA 02199
November 1946

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The following tables provide information regarding the compensation paid by the
Fund and the other investment companies in the John Hancock Fund Complex to the
Independent Trustees for their services. Messrs. Boudreau, Brown, and Scipione
and Ms. Hodsdon, each a non-Independent Trustee, and each of the officers of the
Fund who are interested persons of the Adviser, are compensated by the Adviser
and/or its affiliates and receive no compensation from the Fund for their
services.

Total Compensation
from all Funds in
John Hancock Fund
Aggregate Compensation Complex to
Trustees from the Fund* Trustees**
- -------- -------------- ----------

James F. Carlin $ 618 $ 74,000
William H. Cunningham+ 618 74,000
Ronald R. Dion 690 18,500
Charles F. Fretz 57 57,121
Harold R. Hiser, Jr. + 554 70,000
Charles L. Ladner 643 77,100
Leo E. Linbeck, Jr. 618 74,000
Patricia P. McCarter + 26 43,696
Steven R. Pruchansky + 643 77,100
Norman H. Smith + 667 79.350
John P. Toolan + 643 77,100
-------- ------------
Total $5,777 $721,967

* Compensation is for the fiscal year ended March 31, 1999.

**The total compensation paid by the John Hancock Fund Complex to the
Independent Trustees is as of the calendar year ended December 31, 1998. As of
this date, there were sixty-seven funds in the John Hancock Fund Complex, with
each of these Independent Trustees serving on thirty-two funds. Effective
October 1, 1998, Mr. Fretz and Ms McCarter resigned as Trustees of the Complex.

+ As of December 31, 1998, the value of the aggregate accrued deferred
compensation from all Funds in the John Hancock Fund Complex for Mr. Cunningham
was $320,943, for Mr. Hiser was $115,084, for Ms. McCarter was $183,645 for Mr.
Pruchansky was $75,016, for Mr. Smith was $109,807 and for Mr. Toolan was
$403,714 under the John Hancock Deferred Compensation Plan for Independent
Trustees.

All of the officers listed are officers or employees of the Adviser of
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 July 8, 1999, the officers and Trustees of the Trust as a group
beneficially owned less than 1% of the outstanding shares of the Fund. As of
that date, no person or entity owned beneficially or of record 5% or more of the
outstanding shares of the Fund.

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INVESTMENT ADVISORY AND OTHER SERVICES

The Adviser, located at 101 Huntington Avenue, Boston, Massachusetts 02199-7603,
was organized in 1968 and has more than $30 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 1,400,000 shareholders. The Adviser is an affiliate of
the Life Company, one of the most recognized and respected financial
institutions in the nation. With total assets under management of more than $100
billion, the Life Company is one of the ten largest life insurance companies in
the United States and carries a high rating from Standard & Poor's and A.M.
Best. Founded in 1862, the Life Company has been serving clients for over 130
years.

The Fund bears all costs of its organization and operation, including but not
limited to expenses of preparing, printing and mailing all shareholders'
reports, notices, prospectuses, proxy statements and reports to regulatory
agencies; expenses relating to the issuance, registration and qualification of
shares; government fees; interest charges; expenses of furnishing to
shareholders their account statements; taxes; expenses of redeeming shares;
brokerage and other expenses connected with the execution of portfolio
securities transactions; expenses pursuant to the Fund's plan of distribution;
fees and expenses of custodians including those for keeping books and accounts,
maintaining a committed line of credit and calculating the net asset value of
shares; fees and expenses of transfer agents and dividend disbursing agents;
legal, accounting, financial, management, tax and auditing fees and expenses of
the Fund (including an allocable portion of the cost of the Adviser's employees
rendering such services to the Fund); the compensation and expenses of Trustees
who are not otherwise affiliated with the Trust, the Adviser or any of their
affiliates; expenses of Trustees' and shareholders' meetings; trade association
memberships; insurance premiums; and any extraordinary expenses.

As compensation for its services under the Advisory Agreement, the Fund pays the
Adviser monthly a fee based on a stated percentage of the average daily net
assets of the Fund as follows:

Fee
Average Daily Net Assets (Annual Rate)
- ------------------------ -------------

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%

From time to time, the Adviser may reduce its fees or make other arrangements to
limit the Fund's expenses to a specified percentage of average daily net assets.
The Adviser has agreed to limit Fund expenses to 0.35% of the Fund's average
daily net asset value. The Adviser retains the right to reimpose 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.

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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 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 Advisory Agreement, the Fund may use the name "John Hancock" or any
name derived from or similar to it only for so long as the Advisory Agreement or
any extension, renewal or amendment thereof remains in effect. If the Advisory
Agreement 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.

The continuation of the Advisory Agreement and Distribution Agreement (discussed
below) was approved by all of the Trustees. The Advisory Agreement and the
Distribution Agreement will continue in effect from year to year, provided that
its continuance is approved annually both (I) by holders of a majority of the
outstanding voting securities of the Trust or by the Trustees, and (ii) by a
majority of the Trustees who are not parties to the Agreement or "interested
persons" of any such parties. Both agreements may be terminated on 60 days
written notice by either party or by vote of a majority of the outstanding
securities of the Fund and will terminate automatically if assigned.

For the fiscal year ended May 31, 1996, and for the period from June 1, 1996 to
March 31, 1997 and for the fiscal years ended March 31, 1998 and 1999, the
advisory fees paid by the Fund to the Adviser amounted to $143,299, $194,696,
$329,385 and $481,496 respectively. However, all or a portion of such fees were
not imposed pursuant to the voluntary fee and expense limitation arrangements
then in effect.

Accounting and Legal Services Agreement. The Trust, on behalf of the Fund, is a
party to an Accounting and Legal Services Agreement with the Adviser. Pursuant
to this agreement, the Adviser provides the Fund with certain tax, accounting
and legal services. For the period from June 1, 1996 to March 31, 1997, the Fund
paid the Adviser $6,664 for services under this Agreement. For the fiscal years
ended March 31, 1999 and 1998, the Fund paid the Adviser $14,560 and $11,791,
respectively.

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DISTRIBUTION CONTRACTS

The Fund has a Distribution Agreement with John Hancock Funds. Under the
agreement, John Hancock Funds is obligated to use its best efforts to sell
shares on behalf of the Fund. Shares of the Fund are also sold by selected
broker-dealers (the "Selling Brokers") which have entered into selling agency
agreements with John Hancock Funds. John Hancock Funds accepts orders for the
purchase of the Fund which are continually offered at net asset value next
determined, plus an applicable sales charge, if any. In connection with the sale
of Fund shares, John Hancock Funds and Selling Brokers receive compensation from
a sales charge imposed at the time of sale. John Hancock Funds may pay extra
compensation to financial services firms selling large amounts of fund shares.
This compensation would be calculated as a percentage of fund shares sold by the
firm.

The Fund's Trustees adopted a Distribution Plan (the "Plan") pursuant to Rule
12b-1 under the Investment Company Act of 1940 (the "Investment Company Act").
Under the Plan, the Fund will pay distribution and service fees at an aggregate
annual rate of 0.15% of the Fund's daily net assets. The service fee will not
exceed 0.15% of the Fund's average daily net assets. Therefore, up to 0.15% is
for service expenses and the remaining amount is for distribution expenses,
including but not limited to: (i) initial and ongoing sales compensation to
Selling Brokers and others (including affiliates of John Hancock Funds) engaged
in the sale of Fund shares, and (ii) marketing, promotional and overhead
expenses incurred in connection with the distribution of Fund shares. The
service fees will be used to compensate Selling Brokers and others for providing
personal and account maintenance services to shareholders. In the event that
John Hancock Funds is not fully reimbursed for payments or expenses they incur
under the Plan, these expenses will not be carried beyond twelve months from the
date they were incurred. The payment of fees by the Fund under the Plan has been
indefinitely suspended.

The Plan was approved by a majority of the voting securities of the Fund. The
Plan and all amendments were approved by the Trustees, including a majority of
the Trustees who are not interested persons of the Fund and who have no direct
or indirect financial interest in the operation of the Plan (the "Independent
Trustees"), by votes cast in person at meetings called for the purpose of voting
on such Plan.

Pursuant to the Plan, at least quarterly, John Hancock Funds provides the Fund
with a written report of the amounts expended under the Plan and the purpose for
which these expenditures were made. The Trustees review these reports on a
quarterly basis to determine their continued appropriateness.

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 without
penalty, (a) by vote of a majority of the Independent Trustees, (b) by a vote of
a majority of the Fund's outstanding shares upon 60 days written notice to John
Hancock Funds and (c) automatically in the event of assignment. 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 be effective unless it is approved by a vote of a majority of the
Trustees and the Independent Trustees of the Fund. In adopting the Plan, the
Trustees concluded that, in their judgment, there is a reasonable likelihood
that the Plan will benefit the holders of the shares of the Fund.

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From time to time, the Fund may participate in joint distribution activities
with other Funds and the costs of those activities will be borne by each Fund in
proportion to the relative net asset value of the participating Funds.

NET ASSET VALUE

For purposes of calculating the net asset value ("NAV") of the Fund's shares,
the following procedures are utilized whenever applicable.

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.

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.

The NAV for the Fund is determined twice each business day at 12 noon and at the
close of regular trading on the New York Stock Exchange (typically 4 p.m.
Eastern Time), by dividing the net assets by the number of its shares
outstanding. To help the Fund maintain its $1 constant share price, portfolio
investments are valued at cost, and any discount or premium created by market
movements is amortized to maturity.

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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 by the Trustees. When the shareholder sells portfolio
securities received in this fashion, the shareholder will 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 Investment Company 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. The Fund permits exchanges of Fund shares for shares of
other funds and portfolios managed by the Adviser.

The Fund reserves the right to require that previously exchanged shares (and
reinvested dividends) be in the Fund for 90 days before a shareholder is
permitted a new exchange.

The Fund may refuse any exchange order. The Fund may change or cancel its
exchange policies at any time, upon 60 days' notice to its shareholders.

Systematic Withdrawal Plan. The Fund permits the establishment of a Systematic
Withdrawal Plan. Payments under this plan represent proceeds 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 John Hancock Signature Services, Inc. ("Signature Services").

Monthly Automatic Accumulation Program ("MAAP"). This program is explained in
the Prospectus. 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.

20
<PAGE>

DESCRIPTION OF THE FUND'S SHARES

The Trustees of the Trust are responsible for the management and supervision of
the Fund. The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest of the Fund without
par value. Under the Declaration of Trust, the Trustees have the authority to
create and classify shares of beneficial interest in separate series, without
further action by shareholders. As of the date of this Statement of Additional
Information, the Trustees have authorized shares of the Fund and one other
series. Additional series may be added in the future. The Declaration of Trust
also authorizes the Trustees to classify and reclassify the shares of the Fund,
or any other series of the Trust, into one or more classes. As of the date of
this Statement of Additional Information, the Trustees have authorized the
issuance of one class of shares of the Fund.

The shares of the Fund represent an equal proportionate interest in the
aggregate net assets attributable to the Fund.

In the event of liquidation, shareholders are entitled to share pro rata in the
net assets of the Fund available for distribution to these shareholders. Shares
entitle their holders to one vote per share, are freely transferable and have no
preemptive, subscription or conversion rights. When issued, shares are fully
paid and non-assessable except as set forth below.

The Fund reserves the right to reject any application which conflicts with the
Fund's internal policies or policies of any regulatory authority. John Hancock
Funds does not accept starter, credit card or third party checks. All checks
returned by the post office as undeliverable will be reinvested at net asset
value in the fund or funds from which a redemption was made or dividend paid.
Information provided on the account application may be used by the Fund to
verify the accuracy of the information or background or financial history
purposes. A joint account will be administered as a joint tenancy with right of
survivorship, unless the joint owners notify Signature Services of a different
intent. A shareholder's account is governed by the laws of The Commonwealth of
Massachusetts. For telephone transactions, the transfer agent will take measures
to verify the identity of the caller, such as asking for name, account number,
Social Security or other taxpayer ID number and other relevant information. If
appropriate measures are taken, the transfer agent is not responsible for any
losses that may occur to any account due to an unauthorized telephone call. Also
for your protection telephone transactions are not permitted on accounts whose
names or addresses have changed within the past 30 days. Proceeds from telephone
transactions can only be mailed to the address of record.

21
<PAGE>

TAX STATUS

The Fund is treated as a separate entity for accounting and tax purposes, has
qualified and 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 for each taxable year. 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 in accordance with the timing requirements of the Code.

The Fund will be subject to a 4% 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 seek to avoid or minimize liability for
such tax by satisfying such distribution requirements.

22
<PAGE>

Upon a redemption or other disposition 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.

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. The Fund does
not have any capital loss carryforwards.

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 types 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.

23
<PAGE>

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 and, unless an effective IRS Form W-8 or authorized substitute for Form
W-8 is on file, to 31% backup withholding on certain other payments 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.

The Fund is not subject to Massachusetts corporate excise or franchise taxes.
The Fund anticipates that, 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.

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.

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

24
<PAGE>

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 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 BARRON'S, 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 and the
allocation of brokerage commission are made by the Adviser pursuant to
recommendations made by its investment committee of the Adviser and affiliates
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 Adviser,
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." 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 these 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 which
a transaction is executed. Consistent with the foregoing primary policy, the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
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 Adviser's officers will be primarily responsible for
the allocation of the Fund's brokerage business, their policies and practices of
the Adviser in this regard must be consistent with the foregoing and will at all
times be subject to review by the Trustees. For the fiscal year ended May 31,
1996, the Fund did not pay negotiated brokerage commissions on portfolio
transactions. Also, for the period from June 1, 1996 to March 31, 1997 and the
fiscal years ended March 31, 1999 and 1998, the Fund did not pay negotiated
brokerage commissions on portfolio transactions.

25
<PAGE>

The Adviser's indirect parent, the Life Company, is the indirect sole
shareholder of Signator Investors, Inc., a broker-dealer (until January 1, 1999,
John Hancock Distributors, Inc.) ("Signator" or "Affiliated Broker"). 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 the Affiliated Broker. For the fiscal years ended March 31, 1999 and
1998, the Fund did not execute any portfolio transactions with any Affiliated
Broker.

Other investment advisory clients advised by the Adviser may also invest in the
same securities as the Fund. When these clients buy or sell the same securities
at substantially the same time, the Adviser may average the transactions as to
price and allocate the amount of available investments in a manner which the
Adviser believes to be equitable to each client, including the fund. In some
instances, this investment procedure may adversely affect the price paid or
received by the Fund of the size of the position obtainable for it. On the other
hand, to the extent permitted by law, the Adviser may aggregate the securities
to be sold or purchased for the Fund with those to be sold or purchased for
other clients managed by it in order to obtain best execution.

26
<PAGE>

TRANSFER AGENT SERVICES

John Hancock Signature Services, Inc., 1 John Hancock Way, Suite 1000, Boston,
MA 02217- 1000, a wholly owned indirect subsidiary of the Life Company, is the
transfer and dividend paying agent for the Fund. The Fund pays Signature
Services an annual fee of $20.00 for each shareholder account, plus
out-of-pocket expenses. These expenses are aggregated and charged to the Fund
and allocated on the basis of the relative net asset values.

CUSTODY OF PORTFOLIO

Portfolio securities of the Fund are held pursuant to a custodian agreement
between the Fund and State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110. Under the custodian agreement, the custodian
performs custody, portfolio and fund accounting services.

INDEPENDENT AUDITORS

27
<PAGE>

FINANCIAL STATEMENTS

The financial statements listed below are included and incorporated by reference
into Part B of the Registration Statement for U.S. Government Cash Reserve 1999
Annual Report to Shareholders for the year ended March 31, 1999; (filed
electronically on May 24, 1999; file nos. 811-2485 and 2-50931; accession number
0001010521-99-000219).

John Hancock Current Interest
John Hancock U.S. Government Cash Reserve

Statement of Assets and Liabilities as of March 31, 1999.
Statement of Operations for the fiscal year ended March 31, 1999.
Statement of Changes in Net Asset for each of the periods indicated therein.
Financial Highlights for each of the periods indicated therein.
Schedule of Investments as of March 31, 1999.
Notes to Financial Statements.
Report of Independent Auditors.

F-1

<PAGE>

JOHN HANCOCK CURRENT INTEREST

PART C.

OTHER INFORMATION

C-1
<PAGE>

Item 23. Exhibits:

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

Item 24. Persons Controlled by or under Common Control with Registrant

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

Item 25. Indemnification

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.

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."

C-2
<PAGE>

"Section 9.02. Not Exclusive; Survival of Rights: The indemnification provided
by Section 9.01 shall not be deemed exclusive of any other right to which those
indemnified may be entitled, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person."

Insofar as indemnification for liabilities 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 26. 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 27. 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 Trust, John Hancock Current Interest, John
Hancock Series Trust, John Hancock Tax-Free Bond Trust, John Hancock California
Tax-Free Income Fund, John Hancock Capital Series, John Hancock Special Equities
Fund, John Hancock Sovereign Bond Fund, John Hancock Tax-Exempt Series Fund,
John Hancock Strategic Series, John Hancock World Fund, John Hancock Investment
Trust, John Hancock Institutional Series Trust, John Hancock Investment Trust II
and John Hancock Investment Trust III.

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

C-3
<PAGE>

Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------
<S> <C> <C>
Edward J. Boudreau, Jr. Director, Chairman and Trustee, Chairman and Chief
101 Huntington Avenue Chief Executive Officer Executive Officer
Boston, Massachusetts

Robert H. Watts Director, Executive Vice None
John Hancock Place President and Chief Compliance
P.O. Box 111 Officer
Boston, Massachusetts

Kathleen M. Graveline Executive Vice President None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

Osbert M. Hood Senior Vice President Senior Vice President and
101 Huntington Avenue and Chief Financial Officer
Boston, Massachusetts Chief Financial Officer

David A. King Director None
380 Stuart Street
Boston, Massachusetts

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

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

C-4

<PAGE>

Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------

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

Anne C. Hodsdon Director and Executive President, Chief Investment Officer
101 Huntington Avenue Vice President and Chief Operating Officer
Boston, Massachusetts

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

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

David F. D'Alessandro Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

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

Maureen R. Ford Director None
101 Huntington Avenue
Boston, Massachusetts

C-5

<PAGE>

Name and Principal Positions and Offices Positions and Offices
Business Address with Underwriter with Registrant
---------------- ---------------- ---------------

James V. Bowhers President None
101 Huntington avenue
Boston, Massachusetts

Keith F. Hartstein Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts

J. William Benintende Vice President None
101 Huntington Avenue
Boston, Massachusetts

Karen F. Walsh Vice President None
101 Huntington Avenue
Boston, Massachusetts

Kristine Pancare Vice President None
101 Huntington Avenue
Boston, Massachusetts

Gary Cronin Vice President None
101 Huntington Avenue
Boston, Massachusetts

Peter F. Mawn Senior Vice President None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

Renne M. Humphrey Vice President None
101 Huntington Avenue
Boston, Massachusetts

</TABLE>

Item 28. Location of Accounts and Records

The 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
Registrant's shareholders and the physical possession of its securities,
may be maintained pursuant to Rule 31a-3 at the main offices of
Registrant's Transfer Agent and Custodian.

C-6

<PAGE>

Item 29. Management Services

Not applicable.

Item 30. Undertakings

Not applicable

C-7
<PAGE>

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 to Rule 485(b) to
be signed on its behalf by the undersigned, thereto duly authorized, in the City
of Boston and The Commonwealth of Massachusetts on the 26th day of July 1999.

JOHN HANCOCK CURRENT INTEREST

By: *
-------------------------
Edward J. Boudreau, Jr.
Chairman and Chief Executive
Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

Signature Title Date
--------- ----- ----
<S> <C> <C>
*
- ------------------------ Chairman and Chief Executive
Edward J. Boudreau, Jr. Officer (Principal Executive Officer)

/s/ James J. Stokowski
- ------------------------ Vice President, Treasurer and July 26, 1999
James J. Stokowski Chief Accounting Officer

*
- ------------------------ Trustee
Stephen L. Brown

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

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

*
- ------------------------ Trustee
Ronald R. Dion

*
- ------------------------ Trustee
Harold R. Hiser, Jr.

*
- ------------------------ Trustee
Anne C. Hodsdon

C-8

<PAGE>

Signature Title Date
--------- ----- ----

*
- ------------------------ Trustee
Charles L. Ladner

*
- ------------------------ Trustee
Leo E. Linbeck, Jr.

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

*
- ------------------------ Trustee
Richard S. Scipione

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

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

*By: /s/ Susan S. Newton
------------------- July 26, 1999
Susan S. Newton,
Attorney-in-Fact under
Powers of Attorney dated
June 25, 1996, January 1, 1999 and
March 17, 1999.

</TABLE>

C-9
<PAGE>

John Hancock Current Interest

EXHIBIT INDEX

Exhibit No. Exhibit Description

99.(a) Amended and Restated Declaration of Trust dated July 1, 1996.**

99.(a).1 Amendment of Section 5.11 and Established and Designation of Class
C Shares dated May 1, 1998.****

99.(b) By Laws. Amended and Restated By-Laws dated November 19, 1996.***

99.(c) Instruments Defining Rights of Security Holders, see exhibit 99(a)
and 99(b).

99.(d) Investment Advisory Contracts. Investment Management Contract
between John Hancock Advisers, Inc. and the Registrant on behalf of
U.S. Government Cash Reserve Fund dated December 22, 1994.*

99.(d).1 Investment Management Contract between John Hancock Adviser,
Inc. and the Registrant of behalf of Money Market Fund dated
December 2, 1996.***

99.(e) Underwriting Contracts. Distribution Agreement between John Hancock
Broker Distribution Services, Inc. and the Registrant dated
December 22, 1994.*

99.(e).1 Amendment to Distribution Agreement dated December 2, 1996.***

99.(e).2 Form of Financial Institution Sales and Service Agreement between
John Hancock Funds, Inc. and the John Hancock funds dated
Jaunuary 1, 1995.*

99.(f) Bonus or Profit Sharing Contracts. Not Applicable

99.(g) Custodian Agreements. Master Custodian Agreement between the John
Hancock Funds and State Street Bank and Trust Company dated
March 9, 1999.*****

99.(h) Other Material Contracts. Master Transfer Agency and Service
Agreement between John Hancock Funds, Inc. and the John Hancock
Signature Services, Inc. dated June 1, 1998.****

99.(i) Legal Opinion.*****

99.(j) Other Opinions.+

C-10

<PAGE>

99.(k) Omitted Financial Statements. Not Applicable

99.(l) Initial Capital Agreements. Not Applicable

99.(m) Rule 12b-1 Plan. Class A Distribution Plan between John Hancock
Money Market Fund and John Hancock Funds, Inc. dated
December 2, 1996.***

99.(m).1 Class B Distribution Plan between John Hancock Money Market Fund
and John Hancock Funds, Inc. dated December 2, 1996.***

99.(m).2 Class C Distribution Plan between John Hancock Money Market Fund
and John Hancock Funds, Inc. dated May 1, 1998.****

99.B16 Schedule of Computation of Yield and Total Return.**

99.(n) Financial Data Schedule. Not Applicable

99.(o) John Hancock Funds Class A, Class B and Class C amended and
restated Multiple Class Plan pursuant to Rule 18f-3 for John Hancock
Current Interest.*****

* Previously filed electronically with post-effective amendment number 48
(file nos. 811-02485 and 2-50931 ) on September 27, 1995, accession number
0000950135-95-001114.

** Previously filed electronically with post-effective amendment number 51
(file numbers 811-02485 and 2-50931) on August 26, 1996, accession number
0001010521-96-000145).

*** Previously filed electronically with post-effective amendment number 54
(file numbers 811-02485 and 2-50931) on February 28, 1997, accession number
0001010521-97-000231.

**** Previously filed electronically with post-effective amendment number 57
(file numbers 811-02485 and 2-50931) on July 27, 1998, accession number
0001010521-99-000294.

***** Previously filed electronically with post-effective amendment number 58
(file numbers 811-02485 and 2-50931) on May 24, 1999, accession number
0001010521-99-000220.

+ Filed herewith.

C-11

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the references to our firm under the captions "Financial
Highlights" for the John Hancock Money Market Fund and John Hancock U.S.
Government Cash Reserve in the John Hancock Money Market Funds' Prospectus and
"Independent Auditors" in the John Hancock Money Market Fund Class A, Class B
and Class C Shares Statement of Additional Information and the John Hancock U.S.
Government Cash Reserve Statement of Additional Information and to the
incorporation by reference in Post-Effective Amendment No. 59 to the
Registration Statement (Form N-1A No. 2-50931) of our reports dated May 7, 1999
on the financial statements and financial highlights of John Hancock Money
Market Fund and John Hancock U.S. Government Cash Reserve.

/s/ERNST & YOUNG LLP
--------------------
ERNST & YOUNG LLP

Boston, Massachusetts
July 23, 1999

s:\edgar\consent