Supplement to the John Hancock High Yield Bond Fund
Statement of Additional Information
Shareholders of record on September 16, 1998 will be asked to modernize the
fund's fundamental investment restrictions by approving changes to these
restrictions. If these changes are approved by shareholders, the
restrictions will be substantially as follows:
FUNDAMENTAL INVESTMENT RESTRICTIONS (AS PROPOSED)
1. The fund may not borrow money, except: (i) for temporary or short-term
purposes or for the clearance of transactions in amounts not to exceed
33 1/3% of the value of the fund's total assets (including the amount
borrowed) taken at market value; (ii) in connection with the redemption
of fund shares or to finance failed settlements of portfolio trades
without immediately liquidating portfolio securities or other assets,
(iii) in order to fulfill commitments or plans to purchase additional
securities pending the anticipated sale of other portfolio securities
or assets; (iv) in connection with entering into reverse repurchase
agreements and dollar rolls, but only if after each such borrowing
there is asset coverage of at least 300% as defined in the 1940 Act;
and (v) as otherwise permitted under the 1940 Act. For purposes of this
investment restriction, the deferral of trustees' fees and transactions
in short sales, futures contracts, options on futures contracts,
securities or indices and forward commitment transactions shall not
constitute borrowing.
2. The fund may not act as an underwriter, except to the extent that in
connection with the disposition of portfolio securities, the Fund may
be deemed to be an underwriter for purposes of the Securities Act of
1933.
3. The fund may not purchase, sell or invest in real estate, but subject
to its other investment policies and restrictions may invest in
securities of companies that deal in real estate or are engaged in the
real estate business. These companies include real estate investment
trusts and securities secured by real estate or interests in real
estate. The fund may hold and sell real estate acquired through
default, liquidation or other distributions of an interest in real
estate as a result of the fund's ownership of securities.
4. The fund may not invest in commodities or commodity futures contracts,
except for transactions in financial derivative contracts, such as
forward currency contracts; financial futures contracts and options on
financial futures contracts; options on securities, currencies and
financial indices; and swaps, caps, floors, collars and swaptions.
5. The fund may not make loans, except that the fund (1) may lend
portfolio securities in accordance with the fund's investment policies
up to 33 1/3% of the fund's total assets taken at market value, (2)
enter into repurchase agreements, and (3) purchase all or a portion of
an issue of publicly distributed debt securities, bank loan
participation interests, bank certificates of deposit, bankers'
acceptances, debentures or other securities, whether or not the
purchase is made upon the original issuance of the securities.
6. With respect to 75% of the fund's total assets, the fund may not invest
more than 5% of the fund's total assets in the securities of any single
issuer or own more than 10% of the outstanding voting securities of any
one issuer, in each case other than (i) securities issued or guaranteed
by the U.S. Government, its agencies or its instrumentalities or (ii)
securities of other investment companies.
7. The fund may not issue senior securities, except to the extent
permitted by the 1940 Act.
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8. The fund may not 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 purchase, except that (i) the fund may invest up to 40% of the
value of its total assets in the securities of issuers engaged in the
electric utility and telephone industries and (ii) this limitation does
not apply to investments in obligations of the U.S. Government or any
of its agencies or instrumentalities. The fund may not concentrate its
investments in the securities of issuers engaged in the electric
utility industry or the telephone industry unless yields available for
four consecutive weeks in the four highest rating categories on new
issue bonds in either industry (issue size of $50 million or more) have
averaged greater than the yields of new issue long-term industrial
bonds similarly rated (issue size of $50 million or more) and, in the
opinion the adviser, the relative return available from the electric
utility or telephone industry and the relative risk, marketability,
quality and availability of securities of this industry justifies such
an investment.
NON-FUNDAMENTAL RESTRICTIONS: (AS PROPOSED)
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.
2. Invest in the securities of an issuer for the purpose of exercising
control or management, but it may do so where it is deemed advisable to
protect or enhance the value of an existing investment.
3. Purchase securities on margin.
4. Invest more than 15% of its net assets in securities which are
illiquid.
September 16, 1998
5657SAIS 9/98
