<PAGE> 1
JOHN HANCOCK FUNDS
- -------------------------------------------------------------------------------
CASH
MANAGEMENT
FUND
SEMI - ANNUAL REPORT
March 31, 1995
<PAGE> 2
TRUSTEES
Edward J. Boudreau, Jr.
Chairman
Dennis S. Aronowitz*
Richard P. Chapman, Jr.*
William J. Cosgrove*
Gail D. Fosler*
Bayard Henry*
Richard S. Scipione
Edward J. Spellman*
*Members of the Audit Committee
OFFICERS
Edward J. Boudreau, Jr.
Chairman and Chief Executive Officer
Robert G. Freedman
Vice Chairman and
Chief Investment Officer
Anne C. Hodsdon
President
Thomas H. Drohan
Senior Vice President and Secretary
James B. Little
Senior Vice President and
Chief Financial Officer
Frederick L. Cavanaugh
Senior Vice President
Michael P. DiCarlo
Senior Vice President
James K. Ho
Senior Vice President
Barry H. Evans
Vice President
John A. Morin
Vice President
Susan S. Newton
Vice President, Assistant Secretary and Compliance Officer
James J. Stokowski
Vice President and Treasurer
CUSTODIAN
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
TRANSFER AGENT
John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
LEGAL COUNSEL
Hale and Dorr
60 State Street
Boston, Massachusetts 02109
CHAIRMAN'S MESSAGE
DEAR FELLOW SHAREHOLDERS:
[A 1 1/4" x 1" photo of Edward J. Boudreau Jr., Chairman and Chief Executive
Officer, flush right, next to second paragraph.]
Now that we are into 1995, returns on New Year's resolutions are coming in.
Dieting and saving money -- Americans' long-time favorites -- are often the
most difficult resolutions to keep. This year, however, Congress may give
savers an additional incentive to stick to their guns.
Both the Republicans and Democrats want to revive Individual Retirement
Accounts (IRAs). In an effort to encourage savings, IRAs were made available to
all working Americans in 1981. Anyone with earned income could contribute up to
$2,000 annually. The contributions were fully tax-deductible, and the earnings
weren't taxed until withdrawal. IRAs became the most successful savings program
in the U.S., drawing in more than $250 billion and 13 million new participants
by 1985.
Sweeping tax reforms in 1986, however, changed all that. As it stands
now, the full deduction only applies to individuals who earn less than $25,000,
married couples who earn less than $40,000 and people without employer-sponsored
retirement plans. The result of this congressional tinkering: the number of IRA
contributors declined dramatically, from 16.2 million in 1985 to 4.2 million in
1992.
Legislators are now taking a closer look at expanding the accessibility
of IRAs once again. Several proposals are on the table: (1) the Republicans'
"Contract with America" includes the American Dream Savings Account, a type of
IRA; (2) President Clinton has proposed expanding eligibility by raising income
limits; and (3) several congressional representatives have introduced
legislation to restore the universal availability of a fully tax-deductible IRA.
We enthusiastically support restoring IRAs to their original luster. Not
only will it provide a tax break to middle-income Americans, but it will go a
long way toward raising the nation's dangerously low personal savings rate,
which is the lowest of any major industrialized country. There's an increasing
awareness that Social Security and pension plans will no longer provide for the
retirement needs of middle-income Americans. Increasing IRA accessibility for
more working individuals and families is one of the most sensible ways to help
Americans take responsibility for their future financial needs. We urge you to
support the expanded IRA by contacting your congressional representative or
senator.
Sincerely,
/s/ Edward J. Boudreau, Jr.
- ---------------------------
EDWARD J. BOUDREAU, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER
2
<PAGE> 3
BY BARRY H. EVANS,
VICE PRESIDENT AND PORTFOLIO MANAGER
JOHN HANCOCK
CASH MANAGEMENT FUND
Money market yields approach highest
level in four years
After the Federal Reserve's seven interest-rate increases, money market yields
have approached their highest levels in almost four years. In fact, they have
nearly doubled since February 1994 when the Fed first began raising interest
rates to rein in the economy. With yields now close to 6%, money market
investors are earning a real rate of return -- that is, the return after
inflation -- of nearly 3.5%. At that level, money market funds have become more
attractive investments than they've been in recent memory, especially relative
to more risky stock and bond funds.
By March 31, 1995, John Hancock Cash Management Fund's 7-day average
yield stood at 5.35%, up from 3.94% six months ago. By comparison, the average
taxable money fund had a 7-day average yield of 5.48% versus 4.37% six months
ago, according to IBC/Donoghue's Money Fund Report.
[A 2 1/2" x 2 1/2" photo of Barry H. Evans at bottom center. Caption reads:
"Barry H. Evans, Portfolio Manager."]
SHIFTING GEARS
Since the last annual report, our strategy has shifted gears. In the last
quarter of 1994 and early this year, we kept the Fund's average maturity
relatively short, in the 25- to 30-day range. Staying short allowed us to buy
higher-yielding securities as interest rates were rising, especially at year-end
when short-term financing pressures caused yields to spike temporarily.
With the last rate hike in early February of this year, however, the
market began to anticipate that the Fed may soon be done raising rates. That
expectation, coupled with signs of a slowing economy and positive technical
factors in the market,
[CAPTION]
"...money market funds have become more attractive investments..."
3
<PAGE> 4
John Hancock Funds - Cash Management Fund
[Bar chart with heading "7-Day Yield" at top of left hand column. Under the
heading is the footnote: "As of March 31, 1995". The chart is scaled in
increments of 2% from bottom to top, with 6% at the top and 0% at the bottom.
Within the chart, there are two solid bars. The first represents the 5.35%
7-day average yield for John Hancock Cash Management Fund. The second
represents the 5.48% 7-day average yield for the average taxable money market
fund. The footnote below states: "The average taxable money market fund is
tracked by IBC/Donoghue's Money Fund Report."]
caused short-term rates to drop off slightly. In response, money fund managers
began to lengthen their average maturities.
At John Hancock Cash Management Fund, we gradually lengthened our
average maturity, extending out to 47 days by the end of March. That was
slightly longer than the 42 day maturity for the average taxable money market
fund, mostly because we locked in some higher-yielding securities at the start
of the year.
ONE MORE RATE HIKE POSSIBLE
Ambiguous inflation readings -- such as weaker-than-expected March retail sales
and a pickup in the Johnson Red Book indicator -- will probably keep the Fed
from raising rates in the next couple of months. By the end of the second
quarter, however, there could be enough broad evidence that inflation is picking
up. Having said that, though, we don't think inflation is likely to spiral out
of control. But we do think the increase could be meaningful enough to prompt
the Fed to boost short-term rates one last time.
One thing that isn't clear yet is how the decline in the U.S. dollar
relative to the Japanese yen will impact inflation later this year. Investors
fear a falling dollar because it's considered inflationary. (A lower dollar
tends to make imports more expensive, which, in turn, can force domestic prices
up.) Given that, the Fed is likely to keep a close eye on the dollar's impact in
the months ahead.
LOOKING AHEAD
Our near-term view is neutral. In other words, we don't expect short-term
interest rates to move significantly in either direction from their current
levels. True, there may be one more rate boost to come. But in our view, it
probably won't be much more than half a percentage point. If that's the case,
then short-term interest rates are likely to remain relatively stable for the
rest of the year.
Given that, we will keep the Fund's average maturity in a neutral range
of 40 to 50 days. We will also continue to employ a barbell strategy -- that is,
concentrating on money market securities with short maturities (30 days) and
long maturities (nine to 13 months). We will, however, stay more heavily
weighted in shorter maturities. That will give us the flexibility to take
advantage of higher yields if the Fed should hike rates again.
- -------------------------------------------------------------------------------
The Fund is neither insured nor guaranteed by the U.S. government. There can be
no assurance that the Fund will be able to maintain a net asset value of $1.00
per share.
[CAPTION]
"...short-term interest rates are likely
to remain relatively stable..."
4
<PAGE> 5
FINANCIAL STATEMENTS
John Hancock Funds - Cash Management Fund
THE STATEMENT OF ASSETS AND LIABILITIES IS THE FUND'S BALANCE SHEET AND SHOWS
THE VALUE OF WHAT THE FUND OWNS, IS DUE AND OWES ON MARCH 31, 1995. YOU'LL ALSO
FIND THE NET ASSET VALUE PER SHARE AS OF THAT DATE.
<TABLE>
<CAPTION>
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1995 (Unaudited)
- -------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments, in money market instruments,
at value - Note C:
Commercial paper (cost - $159,457,517) . . . . . . . . . . . . $159,457,517
Negotiable bank certificates of deposit
(cost - $50,522,738) . . . . . . . . . . . . . . . . . . . . 50,522,738
Bankers' acceptances (cost - $3,665,787) . . . . . . . . . . . 3,665,787
Corporate interest-bearing obligations
(cost - $40,516,736) . . . . . . . . . . . . . . . . . . . . 40,516,736
U.S. government obligations (cost - $5,000,532) . . . . . . . 5,000,532
------------
259,163,310
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 448,000
Interest receivable . . . . . . . . . . . . . . . . . . . . . . 1,262,216
------------
Total Assets . . . . . . . . . . . . 260,873,526
--------------------------------------------------
LIABILITIES:
Payable for investments purchased . . . . . . . . . . . . . . . 4,697,591
Dividend payable . . . . . . . . . . . . . . . . . . . . . . . . 733,815
Payable to John Hancock Advisers, Inc. and affiliates -
Note B . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199,849
Accounts payable and accrued expenses . . . . . . . . . . . . . 4,913
------------
Total Liabilities . . . . . . . . . 5,636,168
--------------------------------------------------
NET ASSETS:
Capital paid-in . . . . . . . . . . . . . . . . . . . . . . . . 255,237,358
------------
Net Assets . . . . . . . . . . . . . $255,237,358
==================================================
NET ASSET VALUE, OFFERING PRICE AND REDEMPTION PRICE PER SHARE:
(based on 255,237,358 shares of beneficial interest
outstanding - unlimited number of shares authorized
with no par value) . . . . . . . . . . . . . . . . . . . . . . . $ 1.00
===============================================================================
</TABLE>
THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED AND
EXPENSES INCURRED IN OPERATING THE FUND FOR THE PERIOD.
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
Six months ended March 31, 1995 (Unaudited)
- -------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,861,617
------------
Expenses:
Transfer agent fee - Note B . . . . . . . . . . . . . . . . . 514,658
Investment management fee - Note B . . . . . . . . . . . . . 479,337
Custodian fee . . . . . . . . . . . . . . . . . . . . . . . . 33,484
Registration and filing fees . . . . . . . . . . . . . . . . 17,223
Auditing fee . . . . . . . . . . . . . . . . . . . . . . . . 14,357
Printing . . . . . . . . . . . . . . . . . . . . . . . . . . 14,073
Trustees' fees . . . . . . . . . . . . . . . . . . . . . . . 10,304
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . 3,729
Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . 3,197
------------
Total Expenses . . . . . . . . . . . 1,090,362
--------------------------------------------------
Net Investment Income . . . . . . . 5,771,255
--------------------------------------------------
Net Increase in Net Assets
Resulting from Operations . . . . . $ 5,771,255
==================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 6
FINANCIAL STATEMENTS
John Hancock Funds - Cash Management Fund
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 1995 SEPTEMBER 30,
(UNAUDITED) 1994
---------------- --------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,771,255 $ 6,001,558
------------- -------------
Net Increase in Net Assets Resulting from Operations . . . . . . . . . . . . . . . . 5,771,255 6,001,558
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($0.0238 and $0.0291 per share, respectively) . . (5,771,255) (6,001,558)
------------- -------------
FROM FUND SHARE TRANSACTIONS -- NET* . . . . . . . . . . . . . . . . . . . . . . . . . . 31,337,984 40,190,579
------------- -------------
NET ASSETS:
Beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223,899,374 183,708,795
------------- -------------
End of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 255,237,358 $ 223,899,374
============= =============
*ANALYSIS OF FUND SHARE TRANSACTIONS AT $1 PER SHARE:
Shares sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322,768,773 674,344,812
Shares issued to shareholders in reinvestment of distributions . . . . . . . . . . . . 4,509,963 5,410,901
------------- -------------
327,278,736 679,755,713
Less shares repurchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (295,940,752) (639,565,134)
------------- -------------
Net increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,337,984 40,190,579
============= =============
</TABLE>
THE STATEMENT OF CHANGES IN NET ASSETS SHOWS HOW THE VALUE OF THE FUND'S NET
ASSETS HAS CHANGED SINCE THE END OF THE PREVIOUS PERIOD. THE DIFFERENCE REFLECTS
EARNINGS LESS EXPENSES, DISTRIBUTIONS PAID TO SHAREHOLDERS, AND ANY INCREASE OR
DECREASE IN MONEY SHAREHOLDERS INVESTED IN THE FUND. THE FOOTNOTE ILLUSTRATES
THE NUMBER OF FUND SHARES SOLD, REINVESTED AND REDEEMED DURING THE LAST TWO
PERIODS.
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 7
FINANCIAL STATEMENTS
John Hancock Funds - Cash Management Fund
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest outstanding throughout the
period indicated, investment returns, key ratios and supplemental data are
listed as follows:
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
SIX MONTHS ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, 1995 -----------------------------------------------------
(UNAUDITED) 1994 1993 1992 1991 1990
---------------- -------- -------- -------- -------- ---------
<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 . . . . . . . . . . . . . . . . . 0.02 0.03 0.02 0.04 0.06 0.08
-------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income . . . . . . . . . (0.02) (0.03) (0.02) (0.04) (0.06) (0.08)
-------- -------- -------- -------- -------- --------
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 . . . . . . 2.40%(a) 2.95% 2.47% 3.77% 6.23% 7.87%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) . . . . . . . $255,237 $223,899 $183,709 $201,900 $250,847 $281,213
Ratio of Expenses to Average Net Assets . . . . . . . . 0.91%* 0.95% 0.98% 0.95% 0.90% 0.88%
Ratio of Net Investment Income to Average Net Assets . 4.82%* 2.94% 2.45% 3.75% 6.08% 7.51%
</TABLE>
* On an annualized basis.
(a) Not annualized.
THE FINANCIAL HIGHLIGHTS SUMMARIZE THE IMPACT OF NET INVESTMENT INCOME AND
DIVIDENDS ON A SINGLE SHARE FOR THE PERIOD INDICATED. ADDITIONALLY, IMPORTANT
RELATIONSHIPS BETWEEN SOME ITEMS PRESENTED IN THE FINANCIAL STATEMENTS ARE
EXPRESSED IN RATIO FORM.
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 8
FINANCIAL STATEMENTS
John Hancock Funds - Cash Management Fund
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY THE
FUND ON MARCH 31, 1995. IT'S DIVIDED INTO FIVE TYPES OF SHORT-TERM INVESTMENTS.
MOST CATEGORIES OF SHORT-TERM INVESTMENTS ARE FURTHER BROKEN DOWN BY INDUSTRY
GROUP.
SCHEDULE OF INVESTMENTS
March 31, 1995 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PAR VALUE
INTEREST QUALITY (000'S
ISSUER, DESCRIPTION RATE RATINGS* OMITTED) VALUE
- ------------------- -------- -------- --------- -----
<S> <C> <C> <C> <C>
COMMERCIAL PAPER
BANKING (1.57%)
Corestates Financial Corp.,
04-07-95 . . . . . . . . . . . 6.060% Tier 1 $4,000 $ 3,995,960
------------
BANKING - FOREIGN (4.67%)
BNP U.S Finance Corp.,
07-03-95 . . . . . . . . . . . 6.200 Tier 1 2,000 1,967,967
Mitsubishi Bank Ltd.,
06-05-95 . . . . . . . . . . . 6.050 Tier 1 3,000 2,967,229
Societe Generale
Acceptance N.V
06-19-95 . . . . . . . . . . . 6.230 Tier 1 2,000 1,972,657
Swedish Export Credit
Corp., 04-03-95 . . . . . . . 6.020 Tier 1 5,000 4,998,328
------------
11,906,181
------------
BROKER SERVICES (10.81%)
Bear Stearns Cos., Inc.,
04-13-95 . . . . . . . . . . . 6.000 Tier 1 5,000 4,990,000
Bear Stearns Cos., Inc.,
04-19-95 . . . . . . . . . . . 6.000 Tier 1 5,000 4,985,000
Goldman Sachs Group.,
L.P. 04-20-95 . . . . . . . . 5.970 Tier 1 5,000 4,984,246
Goldman Sachs Group.,
L.P. 06-01-95 . . . . . . . . 6.100 Tier 1 5,000 4,948,319
Merrill Lynch & Co., Inc.,
04-03-95 . . . . . . . . . . . 6.400 Tier 1 1,000 999,644
Merrill Lynch & Co., Inc.,
04-07-95 . . . . . . . . . . . 6.100 Tier 1 5,000 4,994,917
Merrill Lynch & Co., Inc.,
04-10-95 . . . . . . . . . . . 6.000 Tier 1 1,700 1,697,450
------------
27,599,576
------------
DRUGS (2.31%)
Warner Lambert Co.,
04-04-95 . . . . . . . . . . . 5.970 Tier 1 5,900 5,897,065
------------
FINANCE (12.53%)
American Express Credit
Corp., 04-06-95 . . . . . . . 6.050 Tier 1 8,000 7,993,278
American Honda Finance
Corp., 04-03-95 . . . . . . . 6.050 Tier 1 2,600 2,599,126
American Honda Finance
Corp., 04-12-95 . . . . . . . 6.050 Tier 1 5,000 4,990,757
American Honda Finance
Corp., 04-14-95 . . . . . . . 6.030 Tier 1 5,100 5,088,895
Beneficial Corp.,
04-10-95 . . . . . . . . . . . 6.000 Tier 1 2,000 1,997,000
General Electric Capital
Corp., 04-10-95 . . . . . . . 5.930 Tier 1 4,390 4,383,492
General Electric Capital
Corp., 07-25-95 . . . . . . . 6.420 Tier 1 3,000 2,938,475
General Electric Capital
Corp., 10-26-95 . . . . . . . 6.460 Tier 1 2,055 1,978,298
------------
31,969,321
------------
FOOD (0.16%)
Heinz [H.J.] Co.,
04-03-95 . . . . . . . . . . . 6.400 Tier 1 420 419,851
------------
INSURANCE (3.13%)
American General Finance
Corp., 04-03-95 . . . . . . . 6.200 Tier 1 8,000 7,997,244
------------
MORTGAGE BANKING (3.13%)
Countrywide Funding Corp.,
04-04-95 . . . . . . . . . . . 6.000 Tier 1 5,000 4,997,500
Countrywide Funding Corp.,
04-11-95 . . . . . . . . . . . 6.150 Tier 1 3,000 2,994,875
------------
7,992,375
------------
RETAIL STORES (10.71%)
Dayton Hudson Corp.,
04-27-95 . . . . . . . . . . . 6.030 Tier 1 8,000 7,965,160
Dayton Hudson Corp.,
04-28-95 . . . . . . . . . . . 6.030 Tier 1 3,000 2,986,432
Penney [J.C.] Funding Corp.,
04-06-95 . . . . . . . . . . . 6.150 Tier 1 4,700 4,697,591
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 9
FINANCIAL STATEMENTS
John Hancock Funds - Cash Management Fund
<TABLE>
<CAPTION>
PAR VALUE
INTEREST QUALITY (000'S
ISSUER, DESCRIPTION RATE RATINGS* OMITTED) VALUE
- ------------------- -------- -------- --------- -----
<S> <C> <C> <C> <C>
RETAIL STORES (CONTINUED)
Sears Roebuck Acceptance
Corp., 04-13-95 . . . . . . . 6.000% Tier 1 $4,000 $ 3,992,000
Sears Roebuck Acceptance
Corp., 04-17-95 . . . . . . . 6.000 Tier 1 7,700 7,679,467
------------
27,320,650
------------
UTILITIES (13.46%)
Bell Atlantic Financial
Services., 04-11-95 . . . . . 6.000 Tier 1 1,847 1,843,922
BellSouth Telecommunications,
Inc., 04-25-95 . . . . . . . . 5.950 Tier 1 8,000 7,968,267
NYNEX Corp.,
04-17-95 . . . . . . . . . . . 6.050 Tier 1 3,000 2,991,933
NYNEX Corp.,
04-20-95 . . . . . . . . . . . 6.000 Tier 1 5,000 4,984,167
NYNEX Corp.,
04-28-95 . . . . . . . . . . . 6.050 Tier 1 3,600 3,583,665
Oklahoma Gas & Electric
Co., 04-10-95 . . . . . . . . 6.050 Tier 1 5,000 4,992,437
Pennsylvania Power &
Light Co., 04-04-95 . . . . . 6.300 Tier 1 2,000 1,998,950
Pennsylvania Power &
Light Co., 04-05-95 . . . . . 6.070 Tier 1 6,000 5,995,953
------------
34,359,294
------------
TOTAL COMMERCIAL PAPER
(Cost $159,457,517) (62.48%) 159,457,517
------ ------------
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
U.S. BANKS (2.15%)
PNC Bank NA.,
04-26-95 . . . . . . . . . . . 5.900 Tier 1 5,500 5,499,079
------------
U.S BRANCHES OF FOREIGN BANKS (13.72%)
Bank of Tokyo Ltd.,
04-03-95 . . . . . . . . . . . 6.060 Tier 1 4,000 4,000,004
Banque Nationale de Paris.,
04-03-95 . . . . . . . . . . . 6.100 Tier 1 5,000 5,000,002
Banque Nationale de Paris.,
04-03-95 . . . . . . . . . . . 6.020 Tier 1 2,000 1,999,999
Banque Nationale de Paris.,
04-12-95 . . . . . . . . . . . 6.250 Tier 1 3,000 3,000,111
Industrial Bank of Japan Ltd.,
06-21-95 . . . . . . . . . . . 6.250 Tier 1 3,000 3,000,168
National Westminster Bank.,
04-17-95 . . . . . . . . . . . 6.560 Tier 1 3,000 3,000,529
Sanwa Bank Ltd.,
04-17-95 . . . . . . . . . . . 6.080 Tier 1 2,000 2,000,009
Sanwa Bank Ltd.,
04-24-95 . . . . . . . . . . . 6.080 Tier 1 5,000 5,000,064
Sanwa Bank Ltd.,
04-28-95 . . . . . . . . . . . 6.270 Tier 1 4,000 4,000,353
Sanwa Bank Ltd.,
05-12-95 . . . . . . . . . . . 5.680 Tier 1 1,000 998,985
Societe Generale N.A., Inc.,
01-08-96 . . . . . . . . . . . 7.650 Tier 1 3,000 3,013,364
------------
35,013,588
------------
U.S BRANCHES OF FOREIGN BANKS TIME DEPOSIT (0.78%)
Societe Generale N.A., Inc.,
04-03-95 . . . . . . . . . . . 6.400 Tier 1 2,000 2,000,000
------------
U.S. DOLLAR EURO CERTIFICATES (3.14%)
ABN AmRo Bank N.V
04-26-95 . . . . . . . . . . . 5.880 Tier 1 1,000 999,533
Mitsubishi Bank Ltd.,
05-01-95 . . . . . . . . . . . 6.260 Tier 1 5,000 5,000,551
Union Bank of Switzerland.,
12-29-95 . . . . . . . . . . . 7.510 Tier 1 2,000 2,009,987
------------
8,010,071
------------
TOTAL NEGOTIABLE BANK
CERTIFICATES OF DEPOSIT
(Cost $50,522,738) (19.79%) 50,522,738
------ ------------
BANKERS' ACCEPTANCES
U.S BRANCHES OF FOREIGN BANKS (1.44%)
Bank of Tokyo Ltd.,
07-20-95 . . . . . . . . . . . 6.450 Tier 1 1,700 1,666,496
Industrial Bank of Japan
Ltd., 04-03-95 . . . . . . . . 6.380 Tier 1 2,000 1,999,291
------------
3,665,787
------------
TOTAL BANKERS' ACCEPTANCES
(Cost $3,665,787) (1.44%) 3,665,787
------ ------------
CORPORATE INTEREST BEARING OBLIGATIONS
AUTOMOTIVE (6.07%)
Ford Motor Credit Co.,
12-01-95 . . . . . . . . . . . 6.125 Tier 1 3,000 2,988,095
Ford Motor Credit Co.,
12-15-95 . . . . . . . . . . . 9.125 Tier 1 1,850 1,878,654
General Motors Acceptance
Corp., 06-08-95 . . . . . . . 9.250 Tier 1 1,000 1,004,794
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
FINANCIAL STATEMENTS
John Hancock Funds - Cash Management Fund
<TABLE>
<CAPTION>
PAR VALUE
INTEREST QUALITY (000'S
ISSUER, DESCRIPTION RATE RATINGS* OMITTED) VALUE
- ------------------- -------- -------- --------- -----
<S> <C> <C> <C> <C>
AUTOMOTIVE (CONTINUED)
General Motors Acceptance
Corp., 08-01-95 . . . . . . . 8.750% Tier 1 $2,000 $ 2,012,217
General Motors Acceptance
Corp., 02-01-96 . . . . . . . 8.750 Tier 1 3,000 3,039,861
General Motors Acceptance
Corp., 03-13-96 . . . . . . . 9.125 Tier 1 3,000 3,054,682
General Motors Acceptance
Corp., 03-20-96 . . . . . . . 8.800 Tier 1 1,500 1,521,902
------------
15,500,205
------------
BANKING (6.26%)
Bankers Trust Co.,
09-01-95** . . . . . . . . . . 6.360 Tier 1 4,000 4,000,000
First Chicago Corp.
National Bank,
11-08-95** . . . . . . . . . . 6.020 Tier 1 5,000 4,996,857
PNC Bank NA.,
08-07-95** . . . . . . . . . . 6.010 Tier 1 5,000 4,998,891
National Bank of Oregon
10-30-95 . . . . . . . . . . . 5.400 Tier 1 2,000 1,983,007
------------
15,978,755
------------
BROKER SERVICES (1.96%)
Merrill Lynch & Co., Inc.,
04-26-95** . . . . . . . . . . 5.970 Tier 1 5,000 5,000,000
------------
CHEMICAL (1.19%)
Monsanto Corp.,
12-21-95 . . . . . . . . . . . 8.750 Tier 1 3,000 3,040,209
------------
RETAIL STORES (0.39%)
Sears Roebuck Acceptance
Corp., 12-15-95 . . . . . . . 6.590 Tier 1 1,000 997,567
------------
TOTAL CORPORATE INTEREST
BEARING OBLIGATIONS
(Cost $40,516,736) (15.87%) 40,516,736
------- ------------
U. S. GOVERNMENT OBLIGATIONS
GOVERNMENTAL - U. S. AGENCIES (1.96%)
Federal Farm
Credit Bank.,
08-01-95 . . . . . . . . . . . 6.650 Tier 1 5,000 5,000,532
------------
TOTAL U.S GOVERNMENT OBLIGATIONS
(Cost $5,000,532) (1.96%) 5,000,532
------- ------------
TOTAL INVESTMENTS (101.54%) $259,163,310
======= ============
</TABLE>
*Quality ratings indicate the categories of eligible securities, as defined by
Rule 2a-7 of the U.S. Securities and Exchange Commission, owned by the Fund.
**Floating rate note, interest rate effective March 31, 1995.
The percentage shown for each investment category is the total value of that
category expressed as a percentage of total net assets of the Fund.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Cash Management Fund
(UNAUDITED)
NOTE A --
ACCOUNTING POLICIES
John Hancock Cash Management Fund (the "Fund") is an open-end investment
management company, registered under the Investment Company Act of 1940.
Significant accounting policies of the Fund are as follows:
VALUATION OF INVESTMENTS The Trustees have determined appropriate methods for
valuing portfolio securities. Accordingly, portfolio securities are valued at
amortized cost, in accordance with Rule 2a-7 of the Investment Company Act of
1940, which approximates market value. The amortized cost method involves
valuing a security at its cost on the date of purchase and thereafter assuming a
constant amortization to maturity of the difference between the principal amount
due at maturity and the cost of the security to the Fund. Interest income on
certain portfolio securities such as negotiable bank certificates of deposit and
interest bearing notes is accrued daily and included in interest receivable.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other registered
investment companies having a management contract with John Hancock Advisers,
Inc. (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial Group,
may participate in a joint repurchase agreement transaction. Aggregate cash
balances are invested in one or more repurchase agreements, whose underlying
securities are obligations of the U.S. government and/or its agencies. The
Fund's custodian bank receives delivery of the underlying securities for the
joint account on the Fund's behalf. The Adviser is responsible for ensuring that
the agreement is fully collateralized at all times.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of the date of
purchase, sale or maturity. Net realized gains and losses on sales of
investments are determined on the identified cost basis.
FEDERAL INCOME TAX The Fund's policy is to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies. It
will not be subject to Federal income tax on taxable earnings which are
distributed to shareholders.
DIVIDENDS The Fund's net investment income is declared daily as dividends to
shareholders of record as of the close of business on the preceding day and
distributed monthly.
NOTE B --
MANAGEMENT FEE, ADMINISTRATIVE
SERVICES AND TRANSACTIONS WITH AFFILIATES
AND OTHERS
Under the present investment management contract, the Fund pays a monthly
management fee to the Adviser for a continuous investment program equivalent, on
an annual basis, to the sum of (a) 0.40% of the first $250,000,000 of the Fund's
average daily net asset value, (b) 0.35% of the next $250,000,000, (c) 0.30% of
the next $250,000,000 and (d) 0.25% of the Fund's average daily net asset value
in excess of $750,000,000.
Prior to January 1, 1994, the Fund reimbursed the Adviser for the
compensation of the Fund's president, Compliance Officer, and Secretary for
administrative services provided by them to the Fund (administration fee).
Effective January 1, 1994, this fee was eliminated.
In the event normal operating expenses of the Fund, exclusive of certain
expenses prescribed by state law, are in excess of the most restrictive state
limit where the Fund is registered to sell shares of beneficial interest, the
fee payable to the Adviser will be reduced to the extent of such excess and the
Adviser will make additional arrangements necessary to eliminate any remaining
excess expenses. The current limits are 2.5% of the first $30,000,000 of the
Fund's average daily net asset value, 2.0% of the next $70,000,000 and 1.5% of
the remaining average daily net asset value.
The Fund has a distribution agreement with John Hancock Funds, Inc. ("JH
Funds"), a wholly-owned subsidiary of the Adviser. Prior to January 1, 1995, JH
Funds was known as John Hancock Broker Distribution Services, Inc. In addition,
to compensate JH Funds for the services it provides as distributor of the Fund,
the Fund
11
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Cash Management Fund
has adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment
Company Act of 1940. Accordingly, the Fund will make payments to JH Funds for
distribution and service expenses at an annual rate not to exceed 0.10% of the
Fund's daily net assets to reimburse JH Funds for its distribution/service
costs. Up to a maximum of 0.05% may be service fees as defined by the amended
Rules of Fair Practice of the National Association of Securities Dealers. Under
the amended Rules of Fair Practice, curtailment of a portion of the Fund's 12b-1
payments could occur under certain circumstances. The Trustees have voted to
suspend both the service fee and the sales fee of the Plan indefinitely.
The Fund has a transfer agent agreement with John Hancock Investor
Services Corporation ("Investor Services"), a wholly-owned subsidiary of The
Berkeley Financial Group. Prior to January 1, 1995, Investor Services was known
as John Hancock Fund Services, Inc. Effective January 1, 1995, the Fund pays
transfer agent fees based on transaction volume and the number of shareholder
accounts. Prior to January 1, 1995, the Fund paid Investor Services a monthly
transfer agent fee equivalent, on an annual basis, to 0.45% of the Fund's
average daily net asset value, plus out of pocket expenses incurred by Investor
Services on behalf of the Fund for proxy mailings.
Messrs. Edward J. Boudreau, Jr. and Richard S. Scipione are directors
and/or officers of the Adviser, and/or its affiliates, as well as Trustees of
the Fund. The compensation of unaffiliated Trustees is borne by the Fund.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities, including discount earned on
investment securities during the period ended March 31, 1995, aggregated
$2,119,515,947 and $2,087,438,056, respectively.
The cost of investments owned at March 31, 1995, for Federal income tax
purposes was $259,163,310.
12
<PAGE> 13
NOTES
John Hancock Funds - Cash Management Fund
13
<PAGE> 14
NOTES
John Hancock Funds - Cash Management Fund
14
<PAGE> 15
NOTES
John Hancock Funds - Cash Management Fund
15
<PAGE> 16
[LOGO] JOHN HANCOCK FUNDS Bulk Rate
A GLOBAL INVESTMENT MANAGEMENT FIRM U.S. Postage
101 HUNTINGTON AVENUE BOSTON, MA 02199-7603 PAID
Brockton, MA
Permit No. 582
[A 1/2" by 1/2" John Hancock Funds logo in upper left hand corner of the page. A
box sectioned in quadrants with a triangle in upper left, a circle in upper
right, a cube in lower left and a diamond in lower right. A tag line below
reads: "A Global Investment Management Firm."]
- -------------------------------------------------------------------------------
This report is for the information of shareholders of the John Hancock
Cash Management Fund. It may be used as sales literature when preceded or
accompanied by the current prospectus, which details charges, investment
objectives and operating policies.
[A recycled logo in lower left hand corner with the caption "Printed on
Recycled Paper."]
JHF 240SA 03/95
