JOHN HANCOCK
International/
Global Funds
[shape logo]
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Prospectus
August 30, 1996*
This prospectus gives vital information about these funds. For your own benefit
and protection, please read it before you invest, and keep it on hand for future
reference.
Please note that these funds:
[bullet] are not bank deposits
[bullet] are not federally insured
[bullet] are not endorsed by any bank or government agency
[bullet] are not guaranteed to achieve their goal(s)
Short-Term Strategic Income Fund may invest up to 67% in junk bonds; read risk
information carefully.
Like all mutual fund shares, these securities have not been approved or
disapproved by the Securities and Exchange Commission or any state securities
commission, nor has the Securities and Exchange Commission or any state
securities commission passed upon the accuracy or adequacy of this prospectus.
Any representation to the contrary is a criminal offense.
*December 2, 1996 for Global Technology Fund. January 1, 1997 for Global
Marketplace Fund, Global Rx Fund and Pacific Basin Equities Fund.
Growth
Global Fund
Global Marketplace Fund
Global Rx Fund
Global Technology Fund
International Fund
Pacific Basin Equities Fund
Income
Short-Term Strategic Income Fund
World Bond Fund
[shape logo] JOHN HANCOCK FUNDS
A Global Investment Management Firm
101 Huntington Avenue, Boston, Massachusetts 02199-7603
<PAGE>
Contents
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[circle] Growth
Global Fund 4
Global Marketplace Fund 6
Global Rx Fund 8
Global Technology Fund 10
International Fund 12
Pacific Basin Equities Fund 14
[square] Income
Short-Term Strategic Income Fund 16
World Bond Fund 18
Your account
Choosing a share class 20
How sales charges are calculated 20
Sales charge reductions and waivers 21
Opening an account 22
Buying shares 23
Selling shares 24
Transaction policies 26
Dividends and account policies 26
Additional investor services 27
Fund details
Business structure 28
Sales compensation 29
More about risk 31
For more information back cover
[left-hand margin]
A fund-by-fund look at goals,
strategies, risks, expenses and
financial history.
Policies and instructions for opening,
maintaining and closing an account
in any international/global fund.
Details that apply to the
international/global funds as
a group.
<PAGE>
Overview
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GOAL OF THE INTERNATIONAL/GLOBAL FUNDS
John Hancock international/global funds invest in foreign and U.S. securities.
Most of the funds invest primarily in stocks and seek long-term growth of
capital. Two funds invest primarily in bonds and seek current income or maximum
total return. Each fund has its own strategy and own risk/reward profile.
Because you could lose money by investing in these funds, be sure to read all
risk disclosure carefully before investing.
WHO MAY WANT TO INVEST
These funds may be appropriate for investors who:
[bullet] are seeking to diversify a portfolio of domestic investments
[bullet] are seeking access to markets that can be less accessible to
individual investors
[bullet] are seeking funds for the growth or income portion of an asset
allocation portfolio
[bullet] are investing for goals that are many years in the future
International/global funds may NOT be appropriate if you:
[bullet] are investing with a shorter time horizon in mind
[bullet] are uncomfortable with an investment whose value may vary substantially
[bullet] want to limit your exposure to foreign securities
THE MANAGEMENT FIRM
All John Hancock international/global 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
$19 billion in assets.
FUND INFORMATION KEY
Concise fund-by-fund descriptions begin on the next page. Each description
provides the following information:
[items in square brackets are icons]
[target] Goal and strategy The fund's particular investment goals and the
strategies it intends to use in pursuing those goals.
[folder] Portfolio securities The primary types of securities in which the fund
invests. Secondary investments are described in "More about risk" at the end of
the prospectus.
[graph] Risk factors The major risk factors associated with the fund.
[person] Portfolio management The individual or group (including subadvisers,
if any) designated by the investment adviser to handle the fund's day-to-day
management.
[%] Expenses The overall costs borne by an investor in the fund, including sales
charges and annual expenses.
[$] Financial highlights A table showing the fund's financial performance for up
to ten years, by share class. A bar chart showing total return allows you to
compare the fund's historical risk level to those of other funds.
<PAGE>
Global Fund
REGISTRANT NAME: FREEDOM INVESTMENT TRUST II
TICKER SYMBOL CLASS A: JHGAX CLASS B: FGLOX
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GOAL AND STRATEGY
[target] The fund seeks long-term growth of capital. To pursue this goal, the
fund invests primarily in common stocks of foreign and U.S. companies. The fund
maintains a diversified portfolio of company and government securities from
around the world. Under normal circumstances, the fund expects to invest in the
securities markets of at least three countries at any one time, potentially
including the U.S.
The fund does not maintain a fixed allocation of assets, either with respect to
securities type or to geography.
PORTFOLIO SECURITIES
[folder] Under normal circumstances, the fund invests at least 65% of assets in
common stocks and convertible securities, but may invest in virtually any type
of security, foreign or domestic, including preferred and convertible
securities, warrants and investment-grade debt securities. Not counting
short-term securities, the fund generally expects that no more than 5% of assets
will be invested in debt securities.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, and may engage in other investment
practices.
RISK FACTORS
[graph] As with any growth fund, the value of your investment will fluctuate in
response to stock market movements.
Because it invests internationally, the fund carries additional risks, including
currency, information, natural event and political risks. These risks, which may
make the fund more volatile than a comparable domestic growth fund, are defined
in "More about risk" starting on page 31. The risks of international investing
are higher in emerging markets such as those of Latin America, Southeast Asia
and Eastern Europe.
To the extent that the fund utilizes higher-risk securities and practices, it
takes on further risks that could adversely affect its performance. Please read
"More about risk" carefully before investing.
MANAGEMENT/SUBADVISER
[person] Miren Etcheverry, John L.F. Wills, and Gerardo J. Espinoza lead the
portfolio management team. Ms. Etcheverry and Mr. Espinoza are senior vice
presidents and joined John Hancock Funds in December 1996, having been in the
investment business since 1978 and 1979, respectively. Mr. Wills is a senior
vice president of the adviser and managing director of the subadviser, John
Hancock Advisers International. He joined John Hancock Funds in 1987 and has
been in the investment business since 1969.
Investor expenses
[%] Fund investors pay various expenses, either directly or indirectly. The
figures below show the expenses for the past year, adjusted to reflect any
changes. Future expenses may be greater or less.
Shareholder transaction expenses Class A Class B
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
Maximum sales charge imposed on
reinvested dividends none none
Maximum deferred sales charge none(1) 5.00%
Redemption fee(2) none none
Exchange fee none none
Annual fund operating expenses (as a % of average net assets)
Management fee(3) 0.96% 0.96%
12b-1 fee(4) 0.30% 1.00%
Other expenses 0.61% 0.61%
Total fund operating expenses 1.87% 2.57%
Example The table below shows what you would pay
if you invested $1,000 over the various time frames indicated. The example
assumes you reinvested all dividends and that the average annual return was 5%.
Share class Year 1 Year 3 Year 5 Year 10
Class A shares $68 $106 $146 $258
Class B shares
Assuming redemption
at end of period $76 $110 $157 $273
Assuming no redemption $26 $80 $137 $273
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Includes a subadviser fee equal to 0.70% of the fund's net assets.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
4 GROWTH - GLOBAL FUND
<PAGE>
FINANCIAL HIGHLIGHTS
[$] The figures below have been audited by the fund's independent auditors,
Price Waterhouse LLP.
Volatility, as indicated by Class B
year-by-year total investment return (%)
(scale varies from fund to fund)
[typeset representation of bar chart]
35.42%(5) (16.97)(5) 7.05 30.22 (10.42) 14.04 (3.85) 34.95
7.97 (1.01) 11.71(5)
[end bar chart]
<TABLE>
<CAPTION>
Class A - period ended: 10/92(1) 10/93 10/94 10/95 4/96(2)
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $11.31 $10.55 $14.30 $14.16 $12.67
Net investment income (loss) (0.04)(3) (0.10)(3) (0.07)(3) (0.03)(3) (0.04)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (0.72) 3.85 1.24 (0.13) 1.48
Total from investment operations (0.76) 3.75 1.17 (0.16) 1.44
Less distributions:
Distributions from net realized gain
on investments sold and foreign
currency transactions -- -- (1.31) (1.33) (0.88)
Net asset value, end of period $10.55 $14.30 $14.16 $12.67 $13.23
Total investment return at net
asset value(4) (%) (6.72)(5) 35.55 8.64 (0.37) 12.07(5)
Ratios and supplemental data
Net assets, end of period (000s
omitted) ($) 76,980 90,787 100,973 93,597 99,606
Ratio of expenses to average net
assets (%) 2.47(6) 2.12 1.98 1.87 1.89(6)
Ratio of net investment income (loss)
to average net assets (%) (0.60)(6) (0.86) (0.54) (0.23) (0.69)(6)
Portfolio turnover rate (%) 69 108 61 60 40
Average brokerage commission rate(7) ($) N/A N/A N/A N/A 0.02
</TABLE>
<TABLE>
<CAPTION>
Class B - period ended: 5/87(8) 10/87(9) 10/88 10/89 10/90 10/91
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $9.60 $13.00 $10.42 $10.67 $13.58 $9.94
Net investment income (loss) 0.08 (0.05) 0.01 (0.10) (0.02) (0.01)(3)
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions 3.32 (2.08) 0.69 3.25 (1.12) 1.35
Total from investment operations 3.40 (2.13) 0.70 3.15 (1.14) 1.34
Less distributions:
Distributions from net investment
income -- (0.12) -- (0.01) -- --
Distributions from net realized gain
on investments sold and foreign
currency transactions -- (0.33) (0.45) (0.23) (2.50) (0.36)
Total distributions -- (0.45) (0.45) (0.24) (2.50) (0.36)
Net asset value, end of period $13.00 $10.42 $10.67 $13.58 $9.94 $10.92
Total investment return at net
asset value(4) (%) 35.42(5) (16.97)(5) 7.05 30.22 (10.42) 14.04
Ratios and supplemental data
Net assets, end of period (000s
omitted) ($) 62,264 50,883 34,380 35,596 33,281 28,686
Ratio of expenses to average
net assets (%) 2.38(6) 2.56(6) 2.55 2.30 2.46 2.60
Ratio of net investment income (loss)
to average net assets (%) 0.99(6) (0.78)(6) 0.09 (0.47) (0.59) (0.12)
Portfolio turnover rate (%) 91 81 142 138 58 106
Average brokerage commission rate(7) ($) N/A N/A N/A N/A N/A NA
</TABLE>
<TABLE>
<CAPTION>
Class B - period ended: 10/92 10/93 10/94 10/95 4/96(2)
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $10.92 $10.50 $14.17 $13.93 $12.36
Net investment income (loss) (0.12)(3) (0.15)(3) (0.15)(3) (0.11)(3) (0.08)
Net realized and unrealized gain
(loss) on investments and foreign
currency transactions (0.30) 3.82 1.22 (0.13) 1.44
Total from investment operations (0.42) 3.67 1.07 (0.24) 1.36
Less distributions:
Distributions from net investment
income -- -- -- -- --
Distributions from net realized gain
on investments sold and foreign
currency transactions -- -- (1.31) (1.33) (0.88)
Total distributions -- -- (1.31) (1.33) (0.88)
Net asset value, end of period $10.50 $14.17 $13.93 $12.36 $12.84
Total investment return at net
asset value(4) (%) (3.85) 34.95 7.97 (1.01) 11.71(5)
Ratios and supplemental data
Net assets, end of period (000s
omitted) ($) 11,475 19,340 31,822 24,570 27,201
Ratio of expenses to average
net assets (%) 2.68 2.49 2.59 2.57 2.55(6)
Ratio of net investment income (loss)
to average net assets (%) (1.03) (1.25) (1.12) (0.89) (1.35)(6)
Portfolio turnover rate (%) 69 108 61 60 40
Average brokerage commission rate(7) ($) N/A N/A N/A N/A 0.02
</TABLE>
(1) Class A shares commenced operations on January 3, 1992.
(2) Six months ended April 30, 1996. (Unaudited.)
(3) Based on the average of the shares outstanding at the end of each month.
(4) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(5) Not annualized.
(6) Annualized.
(7) Per portfolio share traded. Required for fiscal years that began September
1, 1995 or later.
(8) For the period September 2, 1986 (commencement of operations) to May 31,
1987.
(9) For the period June 1, 1987 to October 31, 1987.
GROWTH - GLOBAL FUND 5
<PAGE>
Global Marketplace Fund
REGISTRANT NAME: JOHN HANCOCK WORLD FUND
TICKER SYMBOL CLASS A: JHGMX CLASS B: JHMBX
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GOAL AND STRATEGY
[target] The fund seeks long-term capital appreciation. To pursue this goal, the
fund invests primarily in foreign and U.S. stocks of companies that merchandise
goods and services to consumers or to consumer companies. The fund seeks
companies of any size that appear to possess a competitive advantage, such as a
unique product or distribution method, new technologies or innovative marketing
or sales methods. Under normal circumstances, the fund invests at least 65% of
assets in these companies, and expects to invest in the securities markets of at
least three countries at any one time, potentially including the U.S.
PORTFOLIO SECURITIES
[folder] The fund invests primarily in the common stocks of U.S. and foreign
companies. It also may invest in warrants, preferred stocks and convertible
securities.
For liquidity and flexibility, the fund may invest up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, and may engage in other investment
practices.
RISK FACTORS
[graph] As with any growth fund, the value of your investment will fluctuate in
response to stock market movements. Because the fund concentrates on a single
sector (consumer businesses), its performance may be disproportionately affected
by a few key factors, such as economic conditions and consumer confidence
levels.
Also, because the fund invests internationally, it carries additional risks,
including currency, information, natural event and political risks. These risks,
which may make the fund more volatile than a comparable domestic growth fund,
are defined in "More about risk" starting on page 31.
To the extent that the fund invests in smaller capitalization companies or
emerging markets, or utilizes higher-risk securities and practices, it takes on
further risks that could adversely affect its performance. Please read "More
about risk" carefully before investing.
PORTFOLIO MANAGEMENT
[person] Bernice S. Behar, CFA, leader of the fund's portfolio management team
since the fund's inception in September 1994, is a senior vice president of the
adviser. She joined the adviser in 1991 and has been in the investment business
since 1986.
- -------------------------------------------------------------------------------
INVESTOR EXPENSES
Fund investors pay various expenses, either directly or indirectly. The figures
below are based on Class A expenses for the past year, adjusted to reflect any
changes. Future expenses may be greater or less.
Shareholder transaction expenses Class A Class B
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
Maximum sales charge imposed on
reinvested dividends none none
Maximum deferred sales charge none(1) 5.00%
Redemption fee(2) none none
Exchange fee none none
Annual fund operating expenses (as a % of average net assets)
Management fee (after expense limitation)(3) 0.00% 0.00%
12b-1 fee(4) 0.30% 1.00%
Other expenses (after limitation)(3) 1.15% 1.15%
Total fund operating expenses (after
limitation)(3) 1.45% 2.15%
Example The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
Share class Year 1 Year 3 Year 5 Year 10
Class A shares $64 $94 $125 $215
Class B shares
Assuming redemption
at end of period $72 $97 $135 $231
Assuming no redemption $22 $67 $115 $231
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Reflects the adviser's temporary agreement to limit expenses (except for
12b-1 and transfer agent expenses). Without this limitation, management fees
would be 0.80% for each class, other expenses would be 2.12% for each class
and total fund operating expenses would be 3.22% for Class A and 3.92% for
Class B.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
6 GROWTH - GLOBAL MARKETPLACE FUND
<PAGE>
FINANCIAL HIGHLIGHTS
[$] The figures below have been audited
by the fund's independent auditors,
Price Waterhouse LLP.
Volatility, as indicated by Class A
year-by-year total investment return (%)
(scale varies from fund to fund)
[typeset representation of bar chart]
35.61(4) 31.94
[end bar chart]
Class A - period ended: 8/95(1) 8/96
Per share operating performance
Net asset value, beginning of period $8.50 $11.49
Net investment income (loss) 0.01(2) (0.08)(2)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 3.01 3.75
Total from investment operations 3.02 3.67
Less distributions:
Dividends from net investment income (0.01) --
Distributions in excess of net
investment income (0.02) --
Total distributions (0.03) --
Net asset value, end of period $11.49 $15.16
Total investment return at net asset
value(3) (%) 35.61(4) 31.94
Total adjusted investment return at net
asset value(3,5) (%) 28.69(4) 29.69
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 712 16,966
Ratio of expenses to average net assets (%) 1.50(6) 1.45
Ratio of adjusted expenses to average net
assets(7) (%) 9.00(6) 3.70
Ratio of net investment income (loss) to
average net assets (%) 0.06(6) (0.57)
Ratio of adjusted net investment income
(loss) to average net assets(7) (%) (7.44)(6) (2.82)
Portfolio turnover rate (%) 63 52
Fee reduction per share ($) 0.65(2) 0.31
Average brokerage commission rate(8) ($) N/A 0.0140
Class B - period ended: 8/96(1)
Per share operating performance
Net asset value, beginning of period $11.95
Net investment income (loss) (0.11)(2)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 3.25
Total from investment operations 3.14
Net asset value, end of period $15.09
Total investment return at net asset value(3) (%) 26.28(4)
Total adjusted investment return at net asset
value(3,5) (%) 25.50(4)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 22,246
Ratio of expenses to average net assets (%) 2.15(6)
Ratio of adjusted expenses to average net
assets(7) (%) 3.49(6)
Ratio of net investment income (loss) to
average net assets (%) (1.28)(6)
Ratio of adjusted net investment income
(loss) to average net assets(7) (%) (2.62)(6)
Portfolio turnover rate (%) 52
Fee reduction per share ($) 0.11
Average brokerage commission rate(8) ($) 0.0140
(1) Class A and Class B shares commenced operations September 29, 1994 and
January 22, 1996, respectively.
(2) Based on the average of the shares outstanding at the end of each month.
(3) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(4) Not annualized.
(5) An estimated total return calculation that does not take into consideration
fee reductions by the adviser during the periods shown.
(6) Annualized.
(7) Unreimbursed, without fee reduction.
(8) Per portfolio share traded. Required for fiscal years that began September
1, 1995 or later.
GROWTH - GLOBAL MARKETPLACE FUND 7
<PAGE>
Global Rx Fund
REGISTRANT NAME: JOHN HANCOCK WORLD FUND
TICKER SYMBOL CLASS A: JHGRX CLASS B: JHRBX
- -------------------------------------------------------------------------------
GOAL AND STRATEGY
[target] The fund seeks long-term growth of capital. To pursue this goal, the
fund invests primarily in stocks of foreign and U.S. health care companies. The
fund defines health care companies as those deriving at least half of their
gross revenues, or committing at least half of their gross assets, to health
care-related activities. Under normal circumstances, the fund invests at least
65% of assets in these companies, including small- and medium-sized companies.
The fund expects to invest in the securities markets of at least three countries
at any one time, potentially including the U.S. Because the fund is
non-diversified, it may invest more than 5% of assets in securities of a single
issuer.
The fund has an independent advisory board composed of scientific and medical
experts to provide advice and consultation on health care developments.
PORTFOLIO SECURITIES
[folder] The fund invests primarily in foreign and domestic common stocks, and
may invest in warrants, preferred stocks and convertible debt securities.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, and may engage in other investment
practices.
RISK FACTORS
[graph] As with any growth fund, the value of your investment will fluctuate in
response to stock market movements. Because the fund concentrates on a single
sector (health care), and because this sector has historically been volatile,
investors should expect above-average volatility.
Also, because the fund invests internationally, it carries additional risks,
including currency, information, natural event and political risks. These risks,
which may make the fund more volatile than a comparable domestic growth fund,
are defined in "More about risk" starting on page 31.
To the extent that the fund invests in smaller capitalization companies or
utilizes higher-risk securities and practices, it takes on further risks that
could adversely affect its performance. Please read "More about risk" carefully
before investing.
PORTFOLIO MANAGEMENT
[person] Linda I. Miller, CFA, leader of the fund's portfolio management team
since January 1996, is a vice president of the adviser. She joined John Hancock
Funds in November 1995 and has been in the investment business with a focus on
the health care industry since 1980.
- -------------------------------------------------------------------------------
INVESTOR EXPENSES
[%] Fund investors pay various expenses, either directly or indirectly. The
figures below show the expenses for the past year, adjusted to reflect any
changes. Future expenses may be greater or less.
Shareholder transaction expenses Class A Class B
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
Maximum sales charge imposed on
reinvested dividends none none
Maximum deferred sales charge none(1) 5.00%
Redemption fee(2) none none
Exchange fee none none
Annual fund operating expenses (as a % of average net assets)
Management fee 0.80% 0.80%
12b-1 fee(3) 0.30% 1.00%
Other expenses 0.66% 0.66%
Total fund operating expenses 1.76% 2.46%
Example The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
Share class Year 1 Year 3 Year 5 Year 10
Class A shares $67 $103 $141 $247
Class B shares
Assuming redemption
at end of period $75 $107 $151 $262
Assuming no redemption $25 $77 $131 $262
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
8 GROWTH - GLOBAL RX FUND
<PAGE>
FINANCIAL HIGHLIGHTS
[$] The figures below have been audited
by the fund's independent auditors,
Price Waterhouse LLP.
Volatility, as indicated by Class
A year-by-year total investment return (%)
(scale varies from fund to fund)
[typeset representation of bar chart]
33.40(4) 0.30 23.39 30.89 18.39
[end bar chart]
<TABLE>
<CAPTION>
Class A - period ended: 8/92(1) 8/93 8/94 8/95 8/96
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $10.00 $13.34 $13.38 $16.51 $21.61
Net investment income (loss) (0.03) (0.23) (0.32) (0.36)(2) (0.19)(2)
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 3.37 0.27 3.45 5.46 4.15
Total from investment operations 3.34 0.04 3.13 5.10 3.96
Less distributions:
Distributions from net realized gain on investments
sold and foreign currency transactions -- -- -- -- (0.14)
Net asset value, end of period $13.34 $13.38 $16.51 $21.61 $25.43
Total investment return at net asset value(3) (%) 33.40(4) 0.30 23.39 30.89 18.39
Total adjusted investment return at net asset
value(3,5) (%) 32.11(4) 0.04 -- -- --
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 14,702 15,647 18,643 24,394 42,405
Ratio of expenses to average net assets (%) 1.98(6) 2.50 2.55 2.56 1.80
Ratio of adjusted expenses to average net assets(7) (%) 3.39(6) 2.76 -- -- --
Ratio of net investment income (loss) to average net
assets (%) (0.51)(6) (1.67) (2.01) (1.99) (0.75)
Ratio of adjusted net investment income (loss) to
average net assets(7) (%) (1.92)(6) (1.93) -- -- --
Portfolio turnover rate (%) 48 93 52 38 68
Fee reduction per share ($) 0.085 0.035 -- -- --
Average brokerage commission rate(8) ($) N/A N/A N/A N/A 0.0181
</TABLE>
<TABLE>
<CAPTION>
Class B - period ended: 8/94(1) 8/95 8/96
<S> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $17.29 $16.46 $21.35
Net investment income (loss) (0.17)(2) (0.55)(2) (0.34)(2)
Net realized and unrealized gain (loss)
on investments and foreign currency transactions (0.66) 5.44 4.07
Total from investment operations (0.83) 4.89 3.73
Less distributions:
Distributions from net realized gain on
investments sold and foreign currency
transactions -- -- (0.14)
Net asset value, end of period $16.46 $21.35 $24.94
Total investment return at net asset value(3) (%) (4.80)(4) 29.71 17.53
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 1,071 6,333 36,591
Ratio of expenses to average net assets (%) 3.34(6) 3.45 2.42
Ratio of net investment income (loss) to
average net assets (%) (2.65)(6) (2.91) (1.33)
Portfolio turnover rate (%) 52 38 68
Average brokerage commission rate(8) ($) N/A N/A 0.0181
</TABLE>
(1) Class A and Class B shares commenced operations on October 1, 1991 and March
7, 1994, respectively.
(2) Based on the average of the shares outstanding at the end of each month.
(3) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(4) Not annualized.
(5) An estimated total return calculation that does not take into consideration
fee reductions by the adviser during the periods shown.
(6) Annualized.
(7) Unreimbursed, without fee reduction.
(8) Per portfolio share traded. Required for fiscal years that began September
1, 1995 or later.
GROWTH - GLOBAL RX FUND 9
<PAGE>
Global Technology Fund
REGISTRANT NAME: JOHN HANCOCK SERIES TRUST
TICKER SYMBOL CLASS A: NTTFX CLASS B: FGTBX
- -------------------------------------------------------------------------------
GOAL AND STRATEGY
[target] The fund seeks long-term growth of capital. To pursue this goal, the
fund invests primarily in stocks of foreign and U.S. companies that rely
extensively on technology in their product development or operations. Under
normal circumstances, the fund invests at least 65% of assets in these
companies, and expects to invest in the securities markets of at least three
countries at any one time, potentially including the U.S. Income is a secondary
goal.
PORTFOLIO SECURITIES
[folder] The fund invests primarily in foreign and domestic common stocks, and
may invest in warrants, preferred stocks and convertible debt securities. The
fund may invest up to 10% of assets in debt securities of any maturity. These
may include securities rated as low as CC/Ca and their unrated equivalents.
Bonds rated lower than BBB/Baa are considered junk bonds.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, including restricted securities, and
may engage in other investment practices.
RISK FACTORS
[graph] As with any growth fund, the value of your investment will fluctuate in
response to stock market movements. Because the fund concentrates on a single
sector (technology), and because this sector has historically been volatile,
investors should expect above-average volatility.
Also, because the fund invests internationally, it carries additional risks,
including currency, information, natural event and political risks. These risks,
which may make the fund more volatile than a comparable domestic growth fund,
are defined in "More about risk" starting on page 31. The risks of international
investing are higher in emerging markets such as those of Latin America, Asia
and Eastern Europe. To the extent that the fund invests in smaller
capitalization companies or junk bonds, it further increases the chances for
fluctuations in share price and total return. Please read "More about risk"
carefully before investing.
MANAGEMENT/SUBADVISER
[person] Barry J. Gordon and Marc H. Klee lead the fund's management team, as
they have since the fund's inception in 1983. They are principals of American
Fund Advisors, Inc. (AFA), which was the fund's adviser until 1991. Since 1991,
AFA has been the fund's subadviser.
- -------------------------------------------------------------------------------
INVESTOR EXPENSES
[%] Fund investors pay various expenses, either directly or indirectly. The
figures below show the expenses for the past year, adjusted to reflect any
changes. Future expenses may be greater or less.
Shareholder transaction expenses Class A Class B
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
Maximum sales charge imposed on
reinvested dividends none none
Maximum deferred sales charge none(1) 5.00%
Redemption fee(2) none none
Exchange fee none none
Annual fund operating expenses (as a % of average net assets)
Management fee(3) 0.82% 0.82%
12b-1 fee(4) 0.30% 1.00%
Other expenses 0.55% 0.55%
Total fund operating expenses 1.67% 2.37%
Example The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
Share class Year 1 Year 3 Year 5 Year 10
Class A shares $66 $100 $136 $238
Class B shares
Assuming redemption
at end of period $74 $104 $147 $253
Assuming no redemption $24 $74 $127 $253
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Includes a subadviser fee that will not exceed 0.40% of the fund's net
assets.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
10 GROWTH - GLOBAL TECHNOLOGY FUND
<PAGE>
FINANCIAL HIGHLIGHTS
[$]The figures below have been audited
by the fund's independent auditors,
Price Waterhouse LLP.
Volatility, as indicated by Class A
year-by-year total investment return (%)
(scale varies from fund to fund)
[typeset representation of bar chart]
2.89 2.84 10.48 16.61 (18.46) 33.05 5.70 32.06 9.62 46.53
2.78(4)
[end bar chart]
<TABLE>
<CAPTION>
Class A - period ended: 12/86 12/87 12/88 12/89 12/90 12/91 12/92 12/93
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $13.57 $13.80 $13.98 $15.31 $16.93 $12.44 $15.60 $14.94
Net investment income (loss) 0.14 0.15 0.15 0.10 (0.04) 0.05 (0.15) (0.21)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 0.25 0.26 1.32 2.43 (3.09) 4.11 1.00 4.92
Total from investment operations 0.39 0.41 1.47 2.53 (3.13) 4.16 0.85 4.71
Less distributions:
Dividends from net investment income (0.16) (0.23) (0.14) (0.13) -- (0.04) -- --
Distributions from net realized gain on
investments and foreign currency
transactions -- -- -- (0.78) (1.36) (0.96) (1.51) (2.20)
Total distributions (0.16) (0.23) (0.14) (0.91) (1.36) (1.00) (1.51) (2.20)
Net asset value, end of period $13.80 $13.98 $15.31 $16.93 $12.44 $15.60 $14.94 $17.45
Total investment return at net
asset value(3) (%) 2.89 2.84 10.48 16.61 (18.46) 33.05 5.70 32.06
Total adjusted investment return at net
asset value(3,5) -- -- -- -- -- -- 5.53 --
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 56,927 44,224 38,594 40,341 28,864 31,580 32,094 41,749
Ratio of expenses to average net assets (%) 1.75 1.63 1.75 1.90 2.36 2.32 2.05 2.10
Ratio of adjusted expenses to average
net assets(7) (%) -- -- -- -- -- -- 2.22 --
Ratio of net investment income (loss) to
average net assets (%) 0.77 0.75 0.89 0.60 (0.28) 0.34 (0.88) (1.49)
Ratio of adjusted net investment income
(loss) to average net assets(7) (%) -- -- -- -- -- -- (1.05) --
Portfolio turnover rate (%) 6 9 12 30 38 67 76 86
Fee reduction per share ($) -- -- -- -- -- -- 0.03 --
Average brokerage commission rate(8) ($) N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
Class A - period ended: 12/94 12/95 6/96(1)
<S> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $17.45 $17.84 $24.51
Net investment income (loss) (0.22)(2) (0.22)(2) (0.09)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions 1.87 8.53 0.77
Total from investment operations 1.65 8.31 0.68
Less distributions:
Dividends from net investment income -- -- --
Distributions from net realized gain on
investments and foreign currency
transactions (1.26) (1.64) --
Total distributions (1.26) (1.64) --
Net asset value, end of period $17.84 $24.51 $25.19
Total investment return at net
asset value(3) (%) 9.62 46.53 2.78(4)
Total adjusted investment return at net
asset value(3,5) -- 46.41 2.74(4)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 52,193 155,001 161,681
Ratio of expenses to average net assets (%) 2.16 1.67 1.55(6)
Ratio of adjusted expenses to average
net assets(7) (%) -- 1.79 1.62(6)
Ratio of net investment income (loss) to
average net assets (%) (1.25) (0.89) (0.74)(6)
Ratio of adjusted net investment income
(loss) to average net assets(7) (%) -- (1.01) (0.81)(6)
Portfolio turnover rate (%) 67 70 34
Fee reduction per share ($) -- 0.02(2) 0.01
Average brokerage commission rate(8) ($) N/A N/A 0.07
</TABLE>
<TABLE>
<CAPTION>
Class B - period ended: 12/94(9) 12/95 6/96
<S> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $17.24 $17.68 $24.08
Net investment income (loss) (0.35)(2) (0.39)(2) (0.16)
Net realized and unrealized gain (loss) on investments 2.05 8.43 0.75
Total from investment operations 1.70 8.04 0.59
Less distributions:
Distributions from net realized gain on investments sold (1.26) (1.64) --
Net asset value, end of period $17.68 $24.08 $24.67
Total investment return at net asset value(3) (%) 10.02 45.42 2.45(4)
Total adjusted investment return at net asset value(3,5) -- 45.30 2.41(4)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 9,324 35,754 47,564
Ratio of expenses to average net assets (%) 2.90(6) 2.41 2.25(6)
Ratio of adjusted expenses to average net assets(7) (%) -- 2.53 2.32(6)
Ratio of net investment income (loss) to average net
assets (%) (1.98)(6) (1.62) (1.43)(6)
Ratio of adjusted net investment income (loss) to
average net assets(7) (%) -- (1.74) (1.50)(6)
Portfolio turnover rate (%) 67 70 34
Fee reduction per share ($) -- 0.03(2) 0.01
Average brokerage commission rate(8) ($) N/A N/A 0.07
</TABLE>
(1) Six months ended June 30, 1996. (Unaudited.)
(2) Based on the average of the shares outstanding at the end of each month.
(3) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(4) Not annualized.
(5) An estimated total return calculation that does not take into consideration
fee reductions by the adviser during the periods shown.
(6) Annualized.
(7) Unreimbursed, without fee reduction.
(8) Per portfolio share traded. Required for fiscal years that began September
1, 1995 or later.
(9) Class B shares commenced operations on January 3, 1994.
GROWTH - GLOBAL TECHNOLOGY FUND 11
<PAGE>
International Fund
REGISTRANT NAME: FREEDOM INVESTMENT TRUST II
TICKER SYMBOL CLASS A: FINAX CLASS B: FINBX
- -------------------------------------------------------------------------------
GOAL AND STRATEGY
[target] The fund seeks long-term growth of capital. To pursue this goal, the
fund invests primarily in stocks of foreign companies. Under normal
circumstances, the fund invests at least 65% of assets in these companies. The
fund maintains a diversified portfolio of company and government securities from
around the world, and generally expects that at any one time it will invest in
the securities markets of at least three non-U.S. countries.
The fund does not maintain a fixed allocation of assets, either with respect to
securities type or to geography. The fund looks for companies of any size whose
earnings show strong growth or that appear to be undervalued.
PORTFOLIO SECURITIES
[folder] Under normal circumstances, the fund invests primarily in common stocks
and other equity securities, but may invest in almost any type of security,
foreign or domestic, including preferred and convertible securities, warrants
and investment-grade debt securities.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, and may engage in other investment
practices.
RISK FACTORS
[graph] As with any growth fund, the value of your investment will fluctuate in
response to stock market movements.
Because it invests internationally, the fund carries additional risks, including
currency, information, natural event and political risks. These risks, which may
make the fund more volatile than a comparable domestic growth fund, are defined
in "More about risk" starting on page 31. The risks of international investing
are higher in emerging markets such as those of Latin America, Asia and Eastern
Europe.
To the extent that the fund invests in smaller capitalization companies or
utilizes higher-risk securities and practices, it takes on further risks that
could adversely affect its performance. Please read "More about risk" carefully
before investing.
MANAGEMENT/SUBADVISER
[person] Miren Etcheverry, John L.F. Wills, and Gerardo J. Espinoza lead the
portfolio management team. Ms. Etcheverry and Mr. Espinoza are senior vice
presidents and joined John Hancock Funds in December 1996, having been in the
investment business since 1978 and 1979, respectively. Mr. Wills is a senior
vice president of the adviser and managing director of the subadviser, John
Hancock Advisers International. He joined John Hancock Funds in 1987 and has
been in the investment business since 1969.
- -------------------------------------------------------------------------------
INVESTOR EXPENSES
[%] Fund investors pay various expenses, either directly or indirectly. The
figures below show the expenses for the past year, adjusted to reflect any
changes. Future expenses may be greater or less.
Shareholder transaction expenses Class A Class B
Maximum sales charge imposed on
purchases (as a percentage of offering price) 5.00% none
Maximum sales charge imposed on reinvested
dividends none none
Maximum deferred sales charge none(1) 5.00%
Redemption fee(2) none none
Exchange fee none none
Annual fund operating expenses (as a % of average net assets)
Management fee (after expense limitation)(3,4) 0.00% 0.00%
12b-1 fee(5) 0.30% 1.00%
Other expenses (after limitation)(3) 1.42% 1.42%
Total fund operating expenses (after limitation)(3) 1.72% 2.42%
Example The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
Share class Year 1 Year 3 Year 5 Year 10
Class A shares $67 $101 $139 $243
Class B shares
Assuming redemption
at end of period $75 $105 $149 $258
Assuming no redemption $25 $75 $129 $258
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Reflects the adviser`s temporary agreement to limit expenses (except for
12b-1 and transfer agent expenses). Without this limitation, management fees
would be 1.00% for each class, other expenses would be 3.58% for each class
and total fund operating expenses would be 4.88% for Class A and 5.58% for
Class B.
(4) Includes a subadviser fee equal to 0.70% of the fund's net assets.
(5) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
12 GROWTH - INTERNATIONAL FUND
<PAGE>
FINANCIAL HIGHLIGHTS
[$]The figures below have been audited
by the fund's independent auditors,
Price Waterhouse LLP.
Volatility, as indicated by Class A
year-by-year total investment return (%)
(scale varies from fund to fund)
[typeset representation of bar chart]
1.77(5) (4.96) 9.09(5)
[end bar chart]
<TABLE>
<CAPTION>
Class A - period ended: 10/94(1) 10/95 4/96(2)
<S> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $8.50 $8.65 $8.14
Net investment income (loss) 0.07(3) 0.04 0.02(3)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 0.08 (0.47) 0.72
Total from investment operations 0.15 (0.43) 0.74
Less distributions:
Dividends from net investment income -- (0.03) --
Distributions from net realized gain on investments
sold and foreign currency transactions -- (0.05) --
Total distributions -- (0.08) --
Net asset value, end of period $8.65 $8.14 $8.88
Total investment return at net asset value(4) (%) 1.77(5) (4.96) 9.09(5)
Total adjusted investment return at net asset value(4,6) (%) (0.52)(5) (8.12) 8.37(5)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 4,426 4,215 6,078
Ratio of expenses to average net assets (%) 1.50(7) 1.64 1.69(7)
Ratio of adjusted expenses to average net assets(8) (%) 3.79(7) 4.80 3.12(7)
Ratio of net investment income (loss) to average net assets (%) 1.02(7) 0.56 0.40(7)
Ratio of adjusted net investment income (loss) to average
net assets(8) (%) (1.27)(7) (2.60) (1.03)(7)
Portfolio turnover rate (%) 50 69 34
Fee reduction per share ($) 0.16(3) 0.25 0.07(3)
Average brokerage commission rate(9) ($) N/A N/A 0.00(10)
</TABLE>
<TABLE>
<CAPTION>
Class B - period ended: 10/94(1) 10/95 4/96(2)
<S> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $8.50 $8.61 $8.05
Net investment income (loss) 0.02(3) (0.03) (0.01)(3)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 0.09 (0.48) 0.72
Total from investment operations 0.11 (0.51) 0.71
Less distributions:
Distributions from net realized gain on investments
sold and foreign currency transactions -- (0.05) --
Net asset value, end of period $8.61 $8.05 $8.76
Total investment return at net asset value(4) (%) 1.29(5) (5.89) 8.82(5)
Total adjusted investment return at net asset value(4,6) (%) (1.00)(5) (9.05) 8.10(5)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 3,948 3,990 8,192
Ratio of expenses to average net assets (%) 2.22(7) 2.52 2.39(7)
Ratio of adjusted expenses to average net assets(8) (%) 4.51(7) 5.68 3.82(7)
Ratio of net investment income (loss) to average net assets (%) 0.31(7) (0.37) (0.25)(7)
Ratio of adjusted net investment income (loss) to average
net assets(8) (%) (1.98)(7) (3.53) (1.68)(7)
Portfolio turnover rate (%) 50 69 34
Fee reduction per share ($) 0.16(3) 0.25 0.07(3)
Average brokerage commission rate(9) ($) N/A N/A 0.00(10)
</TABLE>
(1) Class A and Class B shares commenced operations on January 3, 1994.
(2) Six months ended April 30, 1996. (Unaudited.)
(3) Based on the average of the shares outstanding at the end of each month.
(4) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(5) Not annualized.
(6) An estimated total return calculation that does not take into consideration
fee reductions by the adviser during the periods shown.
(7) Annualized.
(8) Unreimbursed, without fee reduction.
(9) Per portfolio share traded. Required for fiscal years that began September
1, 1995 or later.
(10) Less than one cent per share.
GROWTH - INTERNATIONAL FUND 13
<PAGE>
Pacific Basin Equities Fund
REGISTRANT NAME: JOHN HANCOCK WORLD FUND
TICKER SYMBOL CLASS A: JHWPX CLASS B: FPBBX
- -------------------------------------------------------------------------------
GOAL AND STRATEGY
[target] The fund seeks long-term growth of capital. To pursue this goal, the
fund invests primarily in a diversified portfolio of stocks of Pacific Basin
companies. The Pacific Basin includes countries bordering the Pacific Ocean.
Under normal circumstances, the fund invests at least 65% of assets in these
companies, with the balance invested in equities of companies not in the Pacific
Basin countries and in investment-grade debt securities of U.S., Japanese,
Australian and New Zealand issuers.
The fund does not maintain a fixed allocation of assets. The fund may at times
invest less than 65% of assets in Pacific Basin equities.
PORTFOLIO SECURITIES
[folder] Under normal circumstances, the fund invests primarily in common stocks
and other equity securities, but may invest in virtually any type of security,
foreign or domestic, including preferred and convertible securities, warrants
and investment-grade debt securities.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, and may engage in other investment
practices.
RISK FACTORS
[graph] As with any growth fund, the value of your investment will fluctuate in
response to stock market movements. Because the fund concentrates on one region,
investors should expect above-average volatility.
Also, because the fund invests internationally, it carries additional risks,
including currency, information, natural event and political risks.
These risks, which may make the fund more volatile than a comparable domestic
growth fund, are defined in "More about risk" starting on page 31. The risks of
international investing are higher in emerging markets, a category that includes
many Pacific Basin countries.
To the extent that the fund utilizes higher-risk securities practices, it takes
on further risks that could adversely affect its performance. Please read "More
about risk" carefully before investing.
MANAGEMENT/SUBADVISERS
[person] The fund's management is carried out jointly by the adviser's
international equities portfolio management team and two subadvisers, Indosuez
Asia Advisers Limited and John Hancock Advisers International. Indosuez is
majority owned by Caisse Nationale de Credit Agricole, a French banking
institution.
- -------------------------------------------------------------------------------
INVESTOR EXPENSES
[%] Fund investors pay various expenses, either directly or indirectly. The
figures below show the expenses for the past year, adjusted to reflect any
changes. Future expenses may be greater or less.
Shareholder transaction expenses Class A Class B
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
Maximum sales charge imposed on reinvested dividends none none
Maximum deferred sales charge none(1) 5.00%
Redemption fee(2) none none
Exchange fee none none
Annual fund operating expenses (as a % of average net assets)
Management fee(3) 0.80% 0.80%
12b-1 fee(4) 0.30% 1.00%
Other expenses 0.86% 0.86%
Total fund operating expenses 1.96% 2.66%
Example The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
Share class Year 1 Year 3 Year 5 Year 10
Class A shares $69 $108 $150 $267
Class B shares
Assuming redemption
at end of period $77 $113 $161 $282
Assuming no redemption $27 $83 $141 $282
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Includes a subadviser fee equal to 0.35% of the fund's net assets.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
14 GROWTH - PACIFIC BASIN EQUITIES FUND
<PAGE>
FINANCIAL HIGHLIGHTS
[$] The figures below have been audited
by the fund's independent auditors,
Price Waterhouse LLP.
Volatility, as indicated by Class A
year-by-year total investment return (%)
(scale varies from fund to fund)
[typeset representation of bar chart]
(3.61)(5) 18.06 (0.44) (2.15) (1.99) 49.61 22.82 (7.65) 4.47
[end bar chart]
<TABLE>
<CAPTION>
Class A - period ended: 8/88(1) 8/89 8/90 8/91 8/92 8/93 8/94 8/95 8/96
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $10.00 $9.61 $11.10 $10.34 $9.05 $8.87 $13.27 $15.88 $14.11
Net investment income (loss) 0.01 (0.02) (0.04) (0.01) (0.07)(2) (0.11)(2) (0.10)(2) 0.02(2,3) (0.02)(2)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions (0.37) 1.75 0.11 (0.33) (0.11) 4.51 3.12 (1.24) 0.65
Total from investment operations (0.36) 1.73 0.07 (0.34) (0.18) 4.40 3.02 (1.22) 0.63
Less distributions:
Dividends from net investment income (0.03) (0.01) -- -- -- -- -- -- --
Distributions from net realized gain on
investments sold and foreign currency
transactions -- (0.23) (0.83) (0.95) -- -- (0.41) (0.55) --
Total distributions (0.03) (0.24) (0.83) (0.95) -- -- (0.41) (0.55) --
Net asset value, end of period $9.61 $11.10 $10.34 $9.05 $8.87 $13.27 $15.88 $14.11 $14.74
Total investment return at net asset
value(4) (%) (3.61)(5)18.06 (0.44) (2.15) (1.99) 49.61 22.82 (7.65) 4.47
Total adjusted investment return at net
asset value(4,6) (%) (8.05)(5)15.12 (2.86) (5.19) (5.57) 48.31 -- -- --
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 4,771 5,116 4,578 4,065 3,222 14,568 50,261 37,417 41,951
Ratio of expenses to average net assets (%) 1.75(7) 1.75 2.45 2.75 2.73 2.94 2.43 2.05 1.97
Ratio of adjusted expenses to average net
assets(8) (%) 6.19(7) 4.69 4.89 5.79 6.31 4.24 -- -- --
Ratio of net investment income (loss) to
average net assets (%) 0.04(7) (0.15) (0.28) (0.06) (0.82) (0.98) (0.66) 0.13(3) (0.15)
Ratio of adjusted net investment income
(loss) to average net assets(8) (%) (4.40)(7)(3.09) (2.70) (3.10) (4.40) (2.28) -- -- --
Portfolio turnover rate (%) 148 227 154 151 179 171 68 48 73
Fee reduction per share ($) 1.15 0.39 0.31 0.24 0.31(2) 0.14(2) -- -- --
Average brokerage commission rate(9) ($) N/A N/A N/A N/A N/A N/A N/A N/A 0.0183
</TABLE>
<TABLE>
<CAPTION>
Class B - period ended: 8/94(1) 8/95 8/96
<S> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $15.11 $15.84 $13.96
Net investment income (loss) (0.09)(2) (0.09)(2) (0.13)(2)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 0.82 (1.24) 0.66
Total from investment operations 0.73 (1.33) 0.53
Less distributions:
Distributions from net realized gain on investments sold
and foreign currency transactions -- (0.55) --
Net asset value, end of period $15.84 $13.96 $14.49
Total investment return at net asset value(4) (%) (4.83)(5) (8.38) 3.80
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 9,480 14,368 32,342
Ratio of expenses to average net assets (%) 3.00(7) 2.77 2.64
Ratio of net investment income (loss) to average net assets (%) (1.40)(7) (0.66) (0.86)
Portfolio turnover rate (%) 68 48 73
Average brokerage commission rate(9) ($) N/A N/A 0.0183
</TABLE>
(1) Class A and Class B shares commenced operations on September 8, 1987 and
March 7, 1994, respectively.
(2) Based on the average of the shares outstanding at the end of each month.
(3) May not accord to amounts shown elsewhere in the financial statements due to
the timing of sales and repurchases of fund shares in relation to
fluctuating market values of the investments of the fund.
(4) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(5) Not annualized.
(6) An estimated total return calculation that does not take into consideration
fee reductions by the adviser during the periods shown.
(7) Annualized.
(8) Unreimbursed, without fee reduction.
(9) Per portfolio share traded. Required for fiscal years that began September
1, 1995 or later.
GROWTH - PACIFIC BASIN EQUITIES FUND 15
<PAGE>
Short-Term Strategic Income Fund
REGISTRANT NAME: FREEDOM INVESTMENT TRUST II
TICKER SYMBOL CLASS A: JHSAX CLASS B: FRSWX
- -------------------------------------------------------------------------------
GOAL AND STRATEGY
[target] The fund seeks a high level of current income. To pursue this goal, the
fund invests primarily in debt securities issued or guaranteed by:
[bullet] foreign governments and companies including those in emerging markets
[bullet] the U.S. Government, its agencies or instrumentalities
[bullet] U.S. companies
Under normal circumstances, the fund invests assets in all three of these
sectors, but may invest up to 100% in any one sector. The fund maintains an
average portfolio maturity of three years or less.
PORTFOLIO SECURITIES
[folder] The fund may invest in all types of debt securities. The fund's U.S.
Government securities may include mortgage-backed securities. The fund may
invest up to 67% of assets in securities rated as low as B and their unrated
equivalents. Bonds rated lower than BBB/Baa are considered junk bonds. However,
the fund maintains an average portfolio quality rating of A, which is an
investment-grade rating.
Because the fund is non-diversified, it may invest more than 5% of assets in
securities of a single issuer, but no more than 25% of assets in the securities
of any one foreign government. The fund also may invest in certain other
investments, including derivatives, and may engage in other investment
practices.
RISK FACTORS
[graph] The value of your investment in the fund will fluctuate with changes in
currency exchange rates as well as interest rates. Typically, a rise in interest
rates causes a decline in the market value of fixed income securities.
International investing, particularly in emerging markets, carries additional
risks, including currency information, natural event and political risks. Junk
bonds may carry above-average credit and market risks and mortgage-backed
securities may carry extension and prepayment risks. These risks are defined in
"More about risk" starting on page 31.
To the extent that the fund utilizes higher-risk securities practices, it takes
on further risks that could adversely affect its performance. Please read "More
about risk" carefully before investing.
PORTFOLIO MANAGEMENT
[person] Anthony A. Goodchild, Lawrence J. Daly and Janet L. Clay lead the
portfolio management team. Messrs. Goodchild and Daly are senior vice presidents
and joined John Hancock Funds in July 1994, having been in the investment
business since 1968 and 1972, respectively. Ms. Clay, a second vice president,
joined John Hancock Funds in August 1995 and has been in the investment business
since 1990.
- -------------------------------------------------------------------------------
INVESTOR EXPENSES
[%] Fund investors pay various expenses, either directly or indirectly. The
figures below show the expenses for the past year, adjusted to reflect any
changes. Future expenses may be greater or less.
Shareholder transaction expenses Class A Class B
Maximum sales charge imposed on purchases
(as a percentage of offering price) 3.00% none
Maximum sales charge imposed on
reinvested dividends none none
Maximum deferred sales charge none(1) 3.00%
Redemption fee(2) none none
Exchange fee none none
Annual fund operating expenses (as a % of average net assets)
Management fee 0.65% 0.65%
12b-1 fee(3) 0.30% 1.00%
Other expenses 0.42% 0.42%
Total fund operating expenses 1.37% 2.07%
Example The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
Share class Year 1 Year 3 Year 5 Year 10
Class A shares $44 $72 $103 $190
Class B shares
Assuming redemption
at end of period $51 $85 $111 $198
Assuming no redemption $21 $65 $111 $198
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
16 INCOME - SHORT-TERM STRATEGIC INCOME FUND
<PAGE>
FINANCIAL HIGHLIGHTS
[$]The figures below have been audited
by the fund's independent auditors,
Price Waterhouse LLP.
Volatility, as indicated by Class B
year-by-year total investment return (%)
(scale varies from fund to fund)
[typeset representation of bar chart]
8.85(5) 0.64 5.98 1.93 7.97 3.77(6)
[end bar chart]
<TABLE>
<CAPTION>
Class A - period ended: 10/92(1) 10/93 10/94 10/95 4/96(2)
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $9.86 $9.32 $9.12 $8.47 $8.41
Net investment income (loss) 0.65 0.83(3) 0.76(3) 0.77(3) 0.33(3)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions (0.55) (0.20) (0.53) (0.06) 0.01
Total from investment operations 0.10 0.63 0.23 0.71 0.34
Less distributions:
Dividends from net investment income (0.64) (0.83) (0.62) (0.61) (0.34)
Distributions in excess of net investment income -- -- (0.04) -- --
Distributions in excess of net realized gain on investments sold -- -- (0.12) -- --
Distributions from capital paid-in -- -- (0.10) (0.16) --
Total distributions (0.64) (0.83) (0.88) (0.77) (0.34)
Net asset value, end of period $9.32 $9.12 $8.47 $8.41 $8.41
Total investment return at net asset value(4) (%) 1.16(5) 6.78 2.64 8.75 4.10(6)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 20,468 11,130 13,091 16,997 34,290
Ratio of expenses to average net assets (%) 1.37(5) 1.21 1.26 1.33 1.40(5)
Ratio of net investment income (loss) to average net assets (%) 8.09(5) 8.59 8.71 9.13 8.05(5)
Portfolio turnover rate (%) 86 306 150 147 39
</TABLE>
<TABLE>
<CAPTION>
Class B - period ended: 10/91(1) 10/92 10/93 10/94 10/95 4/96(2)
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $10.00 $10.01 $9.31 $9.11 $8.46 $8.40
Net investment income (loss) 0.76 0.87 0.75(3) 0.70(3) 0.70(3) 0.31(3)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 0.01 (0.80) (0.20) (0.53) (0.06) 0.00
Total from investment operations 0.77 0.07 0.55 0.17 0.64 0.31
Less distributions:
Dividends from net investment income (0.76) (0.77) (0.75) (0.56) (0.56) (0.31)
Distributions in excess of net investment income -- -- -- (0.04) -- --
Distributions in excess of net realized gain on investments sold -- -- -- (0.12) -- --
Distributions from capital paid-in -- -- -- (0.10) (0.14) --
Total distributions (0.76) (0.77) (0.75) (0.82) (0.70) (0.31)
Net asset value, end of period $10.01 $9.31 $9.11 $8.46 $8.40 $8.40
Total investment return at net asset value(4) (%) 8.85(5) 0.64 5.98 1.93 7.97 3.77(6)
Total adjusted investment return at net asset value(4,7) (%) 8.81(5) -- -- -- -- --
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 218,562 236,059 142,873 98,390 84,601 64,684
Ratio of expenses to average net assets (%) 1.89(5) 2.07 2.01 1.99 2.07 2.06(5)
Ratio of adjusted expenses to average net assets(8) (%) 1.93(5) -- -- -- -- --
Ratio of net investment income (loss) to average net assets (%) 8.72(5) 8.69 7.81 8.00 8.40 7.44(5)
Ratio of adjusted net investment income (loss) to average net
assets(8) (%) 8.68(5) -- -- -- -- --
Portfolio turnover rate (%) 22 86 306 150 147 39
Fee reduction per share ($) 0.0039 -- -- -- -- --
</TABLE>
(1) Class A and Class B shares commenced operations on January 3, 1992 and
December 28, 1990, respectively.
(2) Six months ended April 30, 1996. (Unaudited.)
(3) Based on the average of the shares outstanding at the end of each month.
(4) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(5) Annualized.
(6) Not annualized.
(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 reduction.
INCOME - SHORT-TERM STRATEGIC INCOME FUND 17
<PAGE>
World Bond Fund
REGISTRANT NAME: FREEDOM INVESTMENT TRUST II
TICKER SYMBOL CLASS A: FGLAX CLASS B: FGLIX
- -------------------------------------------------------------------------------
GOAL AND STRATEGY
[target] The fund seeks a high total investment return -- a combination of
current income and capital appreciation. To pursue this goal, the fund invests
at least 65% of assets in debt securities issued or guaranteed by:
[bullet] foreign governments and companies including those in emerging markets
[bullet] multinational organizations such as the World Bank
[bullet] the U.S. Government, its agencies or instrumentalities
Under normal circumstances, the fund expects to invest in the securities markets
of at least three countries at any one time, potentially including the U.S. The
fund does not maintain a fixed allocation of assets.
PORTFOLIO SECURITIES
[folder] The fund may invest in all types of debt securities of any maturity,
including preferred and convertible securities. Less than 35% of assets may be
invested in junk bonds rated as low as CCC/Caa, or equivalent. Because the fund
is non-diversified, it may invest more than 5% of assets in securities of a
single issuer, but no more than 25% of assets in the securities of any one
foreign government.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest more assets in these securities as a defensive tactic. The fund also may
invest in certain other investments, including derivatives, and may engage in
other investment practices.
RISK FACTORS
[graph] As with most bond funds, the value of your investment in the fund will
fluctuate with changes in interest rates. Typically, a rise in interest rates
causes a decline in the market value of fixed income securities.
International investing, particularly in emerging markets, carries additional
risks, including currency, information, natural event and political risks. Junk
bonds may carry above-average credit and market risks and mortgage-backed
securities may carry extension and prepayment risks. These risks are defined in
"More about risk" starting on page 31.
To the extent that the fund utilizes higher-risk securities practices, it takes
on further risks that could adversely affect its performance. Please read "More
about risk" carefully before investing.
PORTFOLIO MANAGEMENT
[person] Anthony A. Goodchild, Lawrence J. Daly and Janet L. Clay lead the
portfolio management team. Messrs. Goodchild and Daly are senior vice presidents
and joined John Hancock Funds in July 1994, having been in the investment
business since 1968 and 1972, respectively. Ms. Clay, a second vice president,
joined John Hancock Funds in August 1995 and has been in the investment business
since 1990.
- -------------------------------------------------------------------------------
INVESTOR EXPENSES
[%] Fund investors pay various expenses, either directly or indirectly. The
figures below show the expenses for the past year, adjusted to reflect any
changes. Future expenses may be greater or less.
Shareholder transaction expenses Class A Class B
Maximum sales charge imposed on purchases
(as a percentage of offering price) 4.50% none
Maximum sales charge imposed on reinvested
dividends none none
Maximum deferred sales charge none(1) 5.00%
Redemption fee(2) none none
Exchange fee none none
Annual fund operating expenses (as a % of average net assets)
Management fee 0.75% 0.75%
12b-1 fee(3) 0.30% 1.00%
Other expenses 0.43% 0.43%
Total fund operating expenses 1.48% 2.18%
Example The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
Share class Year 1 Year 3 Year 5 Year 10
Class A shares $59 $90 $122 $214
Class B shares
Assuming redemption
at end of period $72 $98 $137 $234
Assuming no redemption $22 $68 $117 $234
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
18 INCOME - WORLD BOND FUND
<PAGE>
FINANCIAL HIGHLIGHTS
[$} The figures below have been audited
by the fund's independent auditors,
Price Waterhouse LLP.
Volatility, as indicated by Class B
year-by-year total investment return (%)
(scale varies from fund to fund)
[typeset representation of bar chart]
65.96(5) 1.59(5) 20.09 5.47 11.84 10.44 1.72 6.77 (1.88)
11.51 0.30(6)
[end bar chart]
<TABLE>
<CAPTION>
Class A - period ended: 10/92(1) 10/93 10/94 10/95 4/96(2)
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $10.57 $9.76 $9.62 $8.85 $9.30
Net investment income (loss) 0.64 0.76 0.64(3) 0.57(3) 0.25(3)
Net realized and unrealized gain (loss) on
investments and foreign currency transactions (0.74) (0.10) (0.78) 0.48 (0.19)
Total from investment operations (0.10) 0.66 (0.14) 1.05 0.06
Less distributions:
Dividends from net investment income (0.71) (0.38) (0.11) (0.59) (0.25)
Distributions in excess of net investment income -- (0.04) -- -- --
Distributions from capital paid-in -- (0.38) (0.52) (0.01) --
Total distributions (0.71) (0.80) (0.63) (0.60) (0.25)
Net asset value, end of period $9.76 $9.62 $8.85 $9.30 $9.11
Total investment return at net asset value(4) (%) (0.88)(5) 7.14 (1.30) 12.25 0.63(6)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 12,880 12,882 8,949 35,334 31,336
Ratio of expenses to average net assets (%) 1.41(5) 1.46 1.59 1.48 1.56(5)
Ratio of net investment income (loss) to average
net assets (%) 7.64(5) 7.89 7.00 6.43 5.38(5)
Portfolio turnover rate (%) 476 363 174 263 141
</TABLE>
<TABLE>
<CAPTION>
Class B - period ended: 5/87(7) 10/87(8) 10/88 10/89 10/90 10/91 10/92 10/93 10/94 10/95 4/96(2)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $9.60 $10.79 $10.32 $10.98 $10.21 $10.38 $10.44 $9.74 $9.62 $8.85 $9.30
Net investment income (loss) 0.31 0.25 0.67 0.83 0.85 0.90 0.78 0.72 0.59(3) 0.55(3) 0.22(3)
Net realized and unrealized gain (loss)
on investments and foreign currency
transactions 1.29 (0.18) 1.31 (0.27) 0.28 0.13 (0.59) (0.09) (0.78) 0.44 (0.19)
Total from investment operations 1.60 0.07 1.98 0.56 1.13 1.03 0.19 0.63 (0.19) 0.99 0.03
Less distributions:
Dividends from net investment income (0.26) (0.28) (0.68) (0.84) (0.85) (0.73) (0.89) (0.33) (0.06) (0.53) (0.22)
Distributions from net realized gain
on investments (0.15) (0.26) (0.64) (0.49) -- (0.24) -- -- -- -- --
Distributions in excess of net
investment income -- -- -- -- -- -- -- (0.04) -- -- --
Distributions from capital paid-in -- -- -- -- (0.11) -- -- (0.38) (0.52) (0.01) --
Total distributions (0.41) (0.54) (1.32) (1.33) (0.96) (0.97) (0.89) (0.75) (0.58) (0.54) (0.22)
Net asset value, end of period $10.79 $10.32 $10.98 $10.21 $10.38 $10.44 $9.74 $9.62 $8.85 $9.30 $9.11
Total investment return at net asset
value(4) (%) 65.96(5) 1.59(5) 20.09 5.47 11.84 10.44 1.72 6.77 (1.88) 11.51 0.30(6)
Ratios and supplemental data
Net assets, end of period (000s
omitted) ($) 18,253 58,658 174,833 255,214 186,524 192,687 199,102 197,166 114,656 65,600 53,963
Ratio of expenses to average net
assets (%) 2.41(5) 2.19(5) 1.74 1.75 1.82 1.90 1.91 1.91 2.17 2.16 2.22(5)
Ratio of net investment income (loss)
to average net assets (%) 8.69(5) 6.32(5) 6.04 8.07 8.67 8.74 7.59 7.45 6.41 6.03 4.72(5)
Portfolio turnover rate (%) 140(5) 152(5) 364 333 186 159 476 363 174 263 141
</TABLE>
(1) Class A shares commenced operations on January 3, 1992.
(2) Six months ended April 30, 1996. (Unaudited.)
(3) Based on the average of the shares outstanding at the end of each month.
(4) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(5) Annualized.
(6) Not annualized.
(7) For the period December 17, 1986 (commencement of operations) to May 31,
1987.
(8) For the period June 1, 1987 to October 31, 1987.
INCOME - WORLD BOND FUND 19
<PAGE>
Your account
- -------------------------------------------------------------------------------
Choosing A Share Class
All John Hancock international/global funds offer two classes of shares, Class A
and Class B. Each class has its own cost structure, allowing you to choose the
one that best meets your requirements. Your financial representative can help
you decide.
Class A Class B
[bullet] Front-end sales charges, as [bullet] No front-end sales charge;
described below. There are all your money goes to
several ways to reduce work for you right away.
these charges, also
described below. [bullet] Higher annual expenses
than Class A shares.
[bullet} Lower annual expenses
than Class B shares. [bullet] A deferred sales charge, as
described below.
[bullet} Automatic conversion to
Class A shares after eight
years (five years for Short-
Term Strategic Income
Fund), thus reducing future
annual expenses.
For actual past expenses of Class A and B shares, see the fund-by-fund
information earlier in this prospectus.
- ------------------------------------------------------------------------------
How Sales Charges Are Calculated
Class A Sales charges are as follows:
Class A sales charges - Short-Term Strategic Income
As a % of As a % of your
Your investment offering price investment
Up to $99,999 3.00% 3.09%
$100,000 - $499,999 2.50% 2.56%
$500,000 - $999,999 2.00% 2.04%
$1,000,000 and over See below
Class A sales charges - World Bond
As a % of As a % of your
Your investment offering price investment
Up to $99,999 4.50% 4.71%
$100,000 - $249,999 3.75% 3.90%
$250,000 - $499,999 2.75% 2.83%
$500,000 - $999,999 2.00% 2.04%
$1,000,000 and over See below
Class A sales charges - growth funds
As a % of As a % of your
Your investment offering price investment
Up to $49,999 5.00% 5.26%
$50,000 - $99,999 4.50% 4.71%
$100,000 - $249,999 3.50% 3.63%
$250,000 - $499,999 2.50% 2.56%
$500,000 - $999,999 2.00% 2.04%
$1,000,000 and over See below
Investments of $1 million or more Class A shares are available with no front-end
sales charge. However, there is a contingent deferred sales charge (CDSC) on any
shares sold within one year of purchase, as follows:
CDSC on $1 million+ investments (all funds)
Your investment CDSC on shares being sold
First $1M - $4,999,999 1.00%
Next $1 - $5M above that 0.50%
Next $1 or more above that 0.25%
For purposes of this CDSC, all purchases made during a calendar month are
counted as having been made on the LAST day of that month.
The CDSC is based on the lesser of the original purchase cost or the current
market value of the shares being sold, and is not charged on shares you acquired
by reinvesting your dividends. 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 are not subject to a CDSC.
20 YOUR ACCOUNT
<PAGE>
Class B Shares are offered at their net asset value per share, without any
initial sales charge. However, there is a contingent deferred sales charge
(CDSC) on shares you sell within a certain time after you bought them, as
described in the table 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, whichever is less. The longer
the time between the purchase and the sale of shares, the lower the rate of the
CDSC:
Class B deferred charges
Years after CDSC on Short-Term CDSC on all
purchase Strategic Income other fund shares
shares being sold being sold
1st year 3.00% 5.00%
2nd year 2.00% 4.00%
3rd year 2.00% 3.00%
4th year 1.00% 3.00%
5th year None 2.00%
6th year None 1.00%
After 6 years None None
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.
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.
- ------------------------------------------------------------------------------
SALES CHARGE REDUCTIONS AND WAIVERS
Reducing your Class A sales charges There are several ways you can combine
multiple purchases of Class A shares of John Hancock funds to take advantage of
the breakpoints in the sales charge schedule. The first three ways can be
combined in any manner.
[bullet] Accumulation Privilege -- lets you add the value of any Class A shares
you already own to the amount of your next Class A investment for purposes of
calculating the sales charge.
[bullet] Letter of Intention -- lets you purchase Class A shares of a fund over
a 13-month period and receive the same sales charge as if all shares had been
purchased at once.
[bullet] Combination Privilege -- lets you combine Class A shares of multiple
funds for purposes of calculating the sales charge.
To utilize: complete the appropriate section of your application, or contact
your financial representative or Signature Services to add these options (see
the back cover of this prospectus).
Group Investment Program Allows established groups of four or more investors to
invest as a group. Each investor has an individual account, but for sales charge
purposes the group's investments are lumped together, making the investors
potentially eligible for reduced sales charges. There is no charge, no
obligation to invest (although initial aggregate investments must be at least
$250) and you may terminate the program at any time.
To utilize: contact your financial representative or Signature Services to find
out how to qualify.
CDSC waivers As long as Signature Services is notified at the time you sell, the
CDSC for either share class will generally be waived in the following cases:
[bullet] to make payments through certain systematic withdrawal plans
[bullet] to make certain distributions from a retirement plan
[bullet] 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
invest some or all of the proceeds in the same share class of any John Hancock
fund within 120 days without a sales charge. 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.
YOUR ACCOUNT 21
<PAGE>
Waivers for certain investors Class A shares may be offered without front-end
sales charges or CDSCs to various individuals and institutions, including:
[bullet] government entities that are prohibited from paying mutual fund sales
charges
[bullet] financial institutions or common trust funds investing $1 million or
more for non-discretionary accounts
[bullet] selling brokers and their employees and sales representatives
[bullet] financial representatives utilizing fund shares in fee-based investment
products under agreement with John Hancock Funds
[bullet] fund trustees and other individuals who are affiliated with these or
other John Hancock funds
[bullet] individuals transferring assets to a John Hancock growth fund from an
employee benefit plan that has John Hancock funds
[bullet] members of an approved affinity group financial services program
[bullet] certain insurance company contract holders (one-year CDSC usually
applies)
[bullet] participants in certain retirement plans with at least 100 members
(one-year CDSC applies)
[bullet] clients of AFA, when their funds are transferred directly to Global
Technology Fund from accounts managed by AFA
[bullet] certain former shareholders of John Hancock National Aviation &
Technology Fund and Nova Fund (applies to Global Technology Fund only).
To utilize: if you think you may be eligible for a sales charge waiver, contact
your financial representative or Signature Services, or consult the SAI.
- -------------------------------------------------------------------------------
OPENING AN ACCOUNT
1 Read this prospectus carefully.
2 Determine how much you want to invest. The minimum initial investments for the
John Hancock funds are as follows:
[bullet] non-retirement account: $1,000
[bullet] retirement account: $250
[bullet] group investments: $250
[bullet] Monthly Automatic Accumulation Plan (MAAP): $25 to open; you must
invest at least $25 a month
3 Complete the appropriate parts of the account application, carefully following
the instructions. If you have questions, please contact your financial
representative or call Signature Services at 1-800-225-5291.
4 Complete the appropriate parts of the account privileges section of the
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 can
initiate any purchase, exchange or sale of shares through your financial
representative.
22 YOUR ACCOUNT
<PAGE>
Buying shares
Opening an account
By check
[check] [bullet] Make out a check for the investment amount, payable
to "John Hancock Signature Services, Inc."
[bullet] Deliver the check and your completed application to your
financial representative, or mail them to Signature Services
(address below).
Adding to an account
[bullet] Make out a check for the investment amount payable to "John
Hancock Signature Services, Inc."
[bullet] Fill out the detachable investment slip from an account
statement. If no slip is available, include a note specifying
the fund name, your share class, your account number and the
name(s) in which the account is registered.
[bullet] Deliver the check and your investment slip or note to your
financial representative, or mail them to Signature Services
(address below).
By exchange
Opening an account
[arrows] [bullet] Call your financial representative or Signature Services to
request an exchange.
Adding to an account
[bullet] Call Signature Services to request an exchange.
By wire
Opening an account
[bolt] [bullet] Deliver your completed application to your financial
representative, or mail it to Signature Services.
[bullet] Obtain your account number by calling your financial
representative or Signature Services.
[bullet] Instruct your bank to wire the amount of your investment to:
First Signature Bank & Trust
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.
Adding to an account
[bullet] Instruct your bank to wire the amount of your investment to:
First Signature Bank & Trust
Account # 900000260
Routing # 211475000
Specify the fund name, your share class, your account number and
the name(s) in which the account is registered. Your bank may
charge a fee to wire funds.
By phone
Opening an account
[phone] See "By wire" and "By exchange."
Adding to an account
[bullet] Verify that your bank or credit union is a member of the
Automated Clearing House (ACH) system.
[bullet] Complete the "Invest-By-Phone" and "Bank Information"
sections on your account application.
[bullet] Call Signature Services to verify that these features are in
place on your account.
[bullet] 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.
P.O. Box 9116 Boston, MA 02205-9116
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."
YOUR ACCOUNT 23
<PAGE>
Selling shares
Designed for
By letter
[envelope] [bullet] Accounts of any type.
[bullet] Sales of any amount.
To sell some or all of your shares
[bullet] Write a letter of instruction or complete a 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.
[bullet] Include all signatures and any additional documents that may
be required (see next page).
[bullet] Mail the materials to Signature Services.
[bullet] 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
Designed for
[telephone] [bullet] Most accounts.
[bullet] Sales of up to $100,000.
To sell some or all of your shares
[bullet] For automated service 24 hours a day using your touch-tone phone, call
the EASI-Line at 1-800-338-8080.
[bullet] To place your order with a representative at John Hancock Funds, call
Signature Services between 8 a.m. and 4 p.m. Eastern Time on most
business days.
By wire or electronic funds transfer (EFT)
Designed for
[bolt] [bullet] Requests by letter to sell any amount (accounts of any type).
[bullet] Requests by phone to sell up to $100,000 (accounts with
telephone redemption privileges).
To sell some or all of your shares
[bullet] Fill out the "Telephone Redemption" section of your new account
application.
[bullet] To verify that the telephone redemption privilege is in place on an
account, or to request the forms to add it to an existing account, call
Signature Services.
[bullet] Amounts of $1,000 or more will be wired on the next business day. A
$4 fee will be deducted from your account.
[bullet] 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.
By exchange
Designed for
[arrows] [bullet] Accounts of any type.
[bullet] Sales of any amount.
To sell some or all of your shares
[bullet] Obtain a current prospectus for the fund into which you are exchanging
by calling your financial representative or Signature Services.
[bullet] Call Signature Services to request an exchange.
By check
[check] [bullet] Short-Term Strategic Income Fund only.
[bullet] Any account with checkwriting privileges.
[bullet] Sales of over $100.
To sell some or all of your shares
[bullet] Request checkwriting on your account application.
[bullet] Verify that the shares to be sold were purchased more than 10 days
earlier or were purchased by wire.
[bullet] Write a check for any amount over $100.
To sell shares through a systematic withdrawal plan, see "Additional investor
services."
Address
John Hancock Signature Services, Inc.
P.O. Box 9116 Boston, MA 02205-9116
Phone number
1-800-225-5291
Or contact your financial representative for instructions and assistance.
24 YOUR ACCOUNT
<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, as 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:
[bullet] your address of record has changed within the past 30 days
[bullet] you are selling more than $100,000 worth of shares
[bullet] you are requesting payment other than by a check mailed to the address
of record and payable to the registered owner(s)
You can generally obtain a signature guarantee from the following sources:
[bullet] a broker or securities dealer
[bullet] a federal savings, cooperative or other type of bank
[bullet] a savings and loan or other thrift institution
[bullet] a credit union
[bullet] a securities exchange or clearing agency
A notary public CANNOT provide a signature guarantee.
<TABLE>
<CAPTION>
Seller Requirements for written requests [envelope]
<S> <C>
Owners of individual, joint, sole proprietorship, [bullet] Letter of instruction.
UGMA/UTMA (custodial accounts for minors) or
general partner accounts. [bullet] On the letter, the signatures and titles of all persons authorized
to sign for the account, exactly as the account is registered.
[bullet] Signature guarantee if applicable (see above).
Owners of corporate or association accounts. [bullet] Letter of instruction.
[bullet] Corporate resolution, certified within the past 90 days.
[bullet] On the letter and the resolution, the signature of the person(s)
authorized to sign for the account.
[bullet] Signature guarantee if applicable (see above).
Owners or trustees of trust accounts. [bullet] Letter of instruction.
[bullet] On the letter, the signature(s) of the trustee(s).
[bullet] If the names of all trustees are not registered on the account,
please also provide a copy of the trust document certified
within the past 60 days.
[bullet] Signature guarantee if applicable (see above).
Joint tenancy shareholders whose co-tenants are [bullet] Letter of instruction signed by surviving tenant.
deceased.
[bullet] Copy of death certificate.
[bullet] Signature guarantee if applicable (see above).
Executors of shareholder estates. [bullet] Letter of instruction signed by executor.
[bullet] Copy of order appointing executor.
[bullet] Signature guarantee if applicable (see above).
Administrators, conservators, guardians and other [bullet] Call 1-800-225-5291 for instructions.
sellers or account types not listed above.
</TABLE>
YOUR ACCOUNT 25
<PAGE>
- ------------------------------------------------------------------
TRANSACTION POLICIES
Valuation of shares The net asset value per share (NAV) for each fund and class
is determined each business day 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.
Buy and sell prices When you buy shares, you pay the NAV plus any applicable
sales charges, as described earlier. When you sell shares, you receive the NAV
minus any applicable deferred sales charges.
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 after your request is accepted by
Signature Services.
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. In addition, Signature Services 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 not taken, Signature Services is
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.
Exchanges You may exchange shares of one John Hancock fund for shares of the
same class of any other, generally without paying any additional sales charges.
Class B 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 that of the new fund if the new fund's 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 change or cancel its exchange
privilege at any time, upon 60 days' notice to its shareholders. A fund may also
refuse any exchange order.
Certificated shares Most shares are electronically recorded. If you wish to have
certificates for your shares, please write to Signature Services. Certificated
shares can only be sold by returning the certificates to Signature Services,
along with a letter of instruction or a stock power and a signature guarantee.
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 calendar days after
the purchase.
Foreign currencies Purchases must be made in U.S. dollars. Purchases in foreign
currencies must be converted, which may result in a fee and delayed execution.
Eligibility by state You may only invest in, or exchange into, fund shares
legally available in your state.
- -----------------------------------------------------------------------------
DIVIDENDS AND ACCOUNT POLICIES
Account statements In general, you will receive account statements as follows:
[bullet] after every transaction (except a dividend reinvestment) that affects
your account balance
[bullet] after any changes of name or address of the registered owner(s)
[bullet] in all other circumstances, every quarter
Every year you should also receive, if applicable, a Form 1099 tax information
statement, mailed by January 31.
26 YOUR ACCOUNT
<PAGE>
Dividends The income funds generally declare income dividends daily and pay them
monthly. These income dividends begin accruing the day after payment is received
by the fund and continue through the day your shares are actually sold. The
growth funds pay income dividends, if any, annually. All funds distribute
capital gains, if any, annually.
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.
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 fund, whether reinvested or taken as
cash, are generally considered taxable. Dividends from a fund's long-term
capital gains are taxable as capital gains; dividends from other sources are
generally taxable as ordinary income.
Some dividends paid in January may be taxable as if they had been paid the
previous December. Corporations may be entitled to take a dividends-received
deduction for a portion of certain dividends they receive from the growth funds.
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. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions.
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.
- ------------------------------------------------------------------------------
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:
[bullet] Complete the appropriate parts of your account application.
[bullet] If you are using MAAP to open an account, make out a check ($25
minimum) 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 payment or
periodic withdrawals from your account. To establish:
[bullet] Make sure you have at least $5,000 worth of shares in your account.
[bullet] 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, because of sales charges).
[bullet] 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.
[bullet] Determine the schedule: monthly, quarterly, semi-annually, annually or
in certain selected months.
[bullet] 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 qualified retirement
plans, including IRAs, SEPs, 401(k) plans, 403(b) plans (including TSAs) 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.
YOUR ACCOUNT 27
<PAGE>
Fund details
- ------------------------------------------------------------------------------
BUSINESS STRUCTURE
How the funds are organized Each John Hancock international/global fund is an
open-end management investment company or a series of such a company.
Each fund is supervised by a board of trustees, an independent body that has
ultimate responsibility for the fund's activities. The board retains various
companies to carry out the fund's operations, including the investment adviser,
custodian, transfer agent and others (see diagram). The board has the right, and
the obligation, to terminate the fund's relationship with any of these companies
and to retain a different company if the board believes it is in the
shareholders' best interests.
At a mutual fund's inception, the initial shareholder (typically the adviser)
appoints the fund's board. Thereafter, the board and the shareholders determine
the board's membership. The boards of the John Hancock international/global
funds may include individuals who are affiliated with the investment adviser.
However, the majority of board members must be independent.
The funds do not hold annual shareholder meetings, but may hold special meetings
for such purposes as electing or removing board members, changing fundamental
policies, approving a management contract or approving a 12b-1 plan (12b-1 fees
are explained in "Sales compensation").
[graphic]
28 FUND DETAILS
<PAGE>
Accounting compensation The funds compensate the adviser for performing tax and
financial management services. Annual compensation is not expected to exceed
0.02% of each fund's average net assets.
Portfolio trades In placing portfolio trades, the adviser may use brokerage
firms that market the fund's shares or are affiliated with John Hancock Mutual
Life Insurance Company, but only when the adviser believes no other firm offers
a better combination of quality execution (i.e., timeliness and completeness)
and favorable price.
Investment goals Except for Global Rx Fund, International Fund and World Bond
Fund, each fund's investment goal is fundamental and may only be changed with
shareholder approval.
Diversification Except for Global Rx Fund, Short-Term Strategic Income Fund and
World Bond Fund, all of the international/global funds are diversified.
- ------------------------------------------------------------------------------
SALES COMPENSATION
As part of their business strategies, the funds, along with John Hancock Funds,
pay compensation to financial services firms that sell the funds' 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 funds' assets ("12b-1" refers to the federal
securities regulation authorizing 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. The portions of these expenses that are reallowed to
financial services firms are shown on the next page.
Distribution fees may be used to pay for sales compensation to financial
services firms, marketing and overhead expenses and, for Class B shares,
interest expenses.
Class B unreimbursed distribution expenses(1)
Unreimbursed As a % of
Fund expenses net assets
Global $ 750,008 2.74%
Global Marketplace $ 149,374 0.55%
Global Rx $ 126,074 5.60%
Global Technology $ 987,619 4.34%
International $ 358,785 9.76%
Pacific Basin Equities $ 938,714 3.59%
Short-Term Strategic Income $ 2,610,556 2.93%
World Bond $ 4,753,035 5.13%
(1) As of the most recent fiscal year end covered by each fund's financial
highlights. These expenses may be carried forward indefinitely.
Initial compensation Whenever you make an investment in a fund or funds, the
financial services firm receives either a reallowance from the initial sales
charge or a commission, as described below. The firm also receives the first
year's service fee at this time.
Annual compensation Beginning with the second year after an investment is made,
the financial services firm receives an annual service fee of 0.25% of its total
eligible net assets. This fee is paid quarterly in arrears.
Financial services firms selling large amounts of fund shares may receive extra
compensation. This compensation, which John Hancock pays out of its own
resources, may include asset retention fees as well as reimbursement for
marketing expenses.
FUND DETAILS 29
<PAGE>
Class A investments
<TABLE>
<CAPTION>
Maximum Maximum
Sales charge reallowance First year total
paid by or commission service fee compensation(1)
investors (% of (% of offering (% of net (% of offering
offering price) price) investment) price)
<S> <C> <C> <C> <C>
Short-Term Strategic Income Fund
Up to $99,999 3.00% 2.26% 0.25% 2.50%
$100,000 - $499,999 2.50% 2.01% 0.25% 2.25%
$500,000 - $999,999 2.00% 1.51% 0.25% 1.75%
World Bond Fund
Up to $99,999 4.50% 3.76% 0.25% 4.00%
$100,000 - $249,999 3.75% 3.01% 0.25% 3.25%
$250,000 - $499,999 2.75% 2.06% 0.25% 2.30%
$500,000 - $999,999 2.00% 1.51% 0.25% 1.75%
Growth funds
Up to $49,999 5.00% 4.01% 0.25% 4.25%
$50,000 - $99,999 4.50% 3.51% 0.25% 3.75%
$100,000 - $249,999 3.50% 2.61% 0.25% 2.85%
$250,000 - $499,999 2.50% 1.86% 0.25% 2.10%
$500,000 - $999,999 2.00% 1.36% 0.25% 1.60%
Regular investments of
$1 million or more (all funds)
First $1M - $4,999,999 -- 0.75% 0.25% 1.00%
Next $1 - $5M above that -- 0.25% 0.25% 0.50%
Next $1 and more above that -- 0.00% 0.25% 0.25%
Waiver investments(2) -- 0.00% 0.25% 0.25%
</TABLE>
Class B investments
<TABLE>
<CAPTION>
Maximum Maximum
reallowance First year total
or commission service fee compensation
(% of offering (% of net (% of offering
price) investment) price)
<S> <C> <C> <C>
Short-Term Strategic Income Fund
All amounts 2.25% 0.25% 2.50%
All other funds
All amounts 3.75% 0.25% 4.00%
</TABLE>
(1) Reallowance/commission percentages and service fee percentages are
calculated from different amounts, and therefore may not equal total
compensation percentages if combined using simple addition.
(2) Refers to any investments made by municipalities, financial institutions,
trusts and affinity group members that take advantage of the sales charge
waivers described earlier in this prospectus.
CDSC revenues collected by John Hancock Funds may be used to pay commissions
when there is no initial sales charge.
30 FUND DETAILS
<PAGE>
MORE ABOUT RISK
A fund's risk profile is largely defined by the fund's primary securities and
investment practices. You may find the most concise description of each fund's
risk profile in the fund-by-fund information.
The funds are permitted to utilize -- within limits established by the trustees
- -- certain other securities and investment practices that have higher risks and
opportunities associated with them. To the extent that a fund utilizes these
securities or practices, its overall performance may be affected, either
positively or negatively. On the following pages are brief descriptions of these
securities and practices, along with the risks associated with them. The funds
follow certain policies that may reduce these risks.
As with any mutual fund, there is no guarantee that the performance of a John
Hancock international/global fund will be positive over any period of time --
days, months or years. However, international markets have performed better over
the past two decades than domestic markets.
TYPES OF INVESTMENT RISK
Correlation risk The risk that changes in the value of a hedging instrument will
not match those of the asset being hedged (hedging is the use of one investment
to offset the effects of another investment).
Credit risk The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation.
Currency risk The risk that fluctuations in the exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment. Adverse
changes in exchange rates may erode or reverse any gains produced by foreign
currency denominated investments, and may widen any losses.
Extension risk The risk that an unexpected rise in interest rates will extend
the life of a mortgage-backed security beyond the expected prepayment time,
typically reducing the security's value.
Information risk The risk that key information about a security or market is
inaccurate or unavailable.
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 borrowing) that
multiply small index or market movements into large changes in value.
[bullet] Hedged When a derivative (a security whose value is based on another
security or index) is used as a hedge against an opposite position that
the fund also holds, any loss generated by the derivative should be
substantially offset by gains on the hedged investment, and vice versa.
While hedging can reduce or eliminate losses, it can also reduce or
eliminate gains.
[bullet] Speculative To the extent that a derivative is not used as a hedge, the
fund is directly exposed to the risks of that derivative. Gains or
losses from speculative positions in a derivative may be substantially
greater than the derivative's original cost.
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. The seller may
have to lower the price, sell other securities instead, or forego an investment
opportunity, any of which could have a negative effect on fund management or
performance.
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. These fluctuations may cause a security to
be worth less than it was worth at an earlier time. Market risk may affect a
single issuer, industry, sector of the economy or the market as a whole. Common
to all stocks and bonds and the mutual funds that invest in them.
Natural event risk The risk of losses attributable to natural disasters, crop
failures and similar events.
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.
Political risk The risk of losses attributable to government or political
actions, from changes in tax or trade statutes to governmental collapse and war.
Prepayment risk The risk that unanticipated prepayments may occur, reducing the
value of mortgage-backed securities.
Valuation risk The risk that a fund has valued certain of its securities at a
higher price than it can sell them for.
FUND DETAILS 31
<PAGE>
Higher-risk securities and practices
This table shows each fund's investment limitations as a percentage of portfolio
assets. In each case the principal types of risk are listed (see previous page
for definitions). Numbers in this table show allowable usage only; for actual
usage, consult the fund's annual/semi-annual reports.
10 Percent of total assets (italic type)
10 Percent of net assets (roman type)
+ No policy limitation on usage; fund may be using currently
* Permitted, but has not typically been used
- -- Not permitted
<TABLE>
<CAPTION>
Pacific Short-Term
Global Global Global Inter- Basin Strategic World
Global Marketplace Rx Technology national Equities Income Bond
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Investment practices
Borrowing; reverse repurchase
agreements The borrowing of
money from banks or through
reverse repurchase agreements.
Leverage, credit risks. 10 33.3 33.3 10 33.3 33.3 10 10
Currency trading The direct
trading or holding of foreign
currencies as an asset.
Currency risk. + + + + + + + +
Repurchase agreements The
purchase of a security that
must later be sold back to the
issuer at the same price plus
interest. Credit risk. + + + + + + + +
Securities lending The lending
of securities to financial
institutions, which provide
cash or government securities
as collateral. Credit risk. 10 33.3 33.3 33.3 33.3 33.3 30 30
Short sales The selling of
securities which have been
borrowed on the expectation
that the market price will
drop.
[bullet] Hedged. Hedged
leverage, market, correlation,
liquidity, opportunity risks. -- * * -- * * -- --
[bullet] Speculative.
Speculative leverage, market,
liquidity risks. -- * * -- * -- -- --
Short-term trading Selling a
security soon after purchase. A
portfolio engaging in
short-term trading will have
higher turnover and transaction
expenses. Market risk. + + + + + + + +
When-issued securities and
forward commitments The
purchase or sale of securities
for delivery at a future date;
market value may change before
delivery. Market, opportunity,
leverage risks. + + + + + + + +
Conventional securities
Foreign debt securities Debt
securities issued by foreign
governments or companies.
Credit, currency, interest
rate, market, political risks. 5 35(1) 35(1) 10(2) 35(1) 35(1) +(1) +(1)
Non-investment-grade debt
securities Debt securities
rated below BBB/Baa are
considered junk bonds. Credit,
market, interest rate,
liquidity, valuation,
information risks. -- -- 35 10(2) -- -- 67 35
Restricted and illiquid
securities Securities not
traded on the open market. May
include illiquid Rule 144A
securities. Liquidity,
valuation, market risks. 15 15 15 15 15 15 15 15
Unleveraged derivative securities
Asset-backed securities
Securities backed by unsecured
debt, such as credit card debt;
these securities are often
guaranteed or
over-collateralized to enhance
their credit quality. Credit,
interest rate risks. * * * * * * + +
Mortgage-backed securities
Securities backed by pools of
mortgages, including
passthrough certificates, PACs,
TACs and other senior classes
of collateralized mortgage
obligations (CMOs). Credit,
extension, prepayment, interest
rate risks. * * * * * * + +
Participation interests
Securities representing an
interest in another security or
in bank loans. Credit, interest
rate, liquidity, valuation
risks. -- -- -- 10(2) -- -- 15(3) 15(3)
</TABLE>
32 FUND DETAILS
<PAGE>
Higher-risk securities and practices (cont'd)
<TABLE>
<CAPTION>
Global Global Global Inter- Basin Strategic World
Global Marketplace Rx Technology national Equities Income Bond
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leveraged derivative securities
Currency contracts Contracts
involving the right or
obligation to buy or sell a
given amount of foreign
currency at a specified price
and future date.
[bullet] Hedged. Currency,
hedged leverage, correlation,
liquidity, opportunity risks. + + + + + + + +
[bullet] Speculative. Currency,
speculative leverage, liquidity
risks. * * * * * * * *
Financial futures and options;
securities and index options
Contracts involving the right
or obligation to deliver or
receive assets or money
depending on the performance of
one or more assets or an
economic index.
[bullet] Futures and related
options. Interest rate,
currency, market, hedged or
speculative leverage,
correlation, liquidity,
opportunity risks. + + + * + * + +
[bullet] Options on securities
and indices. Interest rate,
currency, market, hedged or
speculative leverage,
correlation, liquidity, credit,
opportunity risks. 5(4) * * 5(4) * * 5(4) 5(4)
Structured securities Indexed
and/or leveraged
mortgage-backed and other debt
securities, including
principal-only and
interest-only securities,
leveraged floating rate
securities and others. These
securities tend to be highly
sensitive to interest rate
movements and their performance
may not correlate to these
movements in a conventional
fashion. Credit, interest rate,
extension, prepayment, market,
speculative leverage,
liquidity, valuation risks. + + + 10(2) + * + +
</TABLE>
(1) No more than 25% of the fund's assets will be invested in securities of any
one foreign government.
(2) Included in the 10% limitation on debt securities.
(3) Included in the 15% limitation on illiquid securities.
(4) Applies to purchased options only.
Analysis of funds with 5% or more in junk bonds(1)
[Bar Chart:]
Quality rating Short-Term Strategic
(S&P/Moody's)(2) Income Fund
Investment Grade Bonds
AAA/Aaa 43.3%
AA/Aa 10.6%
A/A 8.4%
BBB/Baa 1.7%
Junk Bonds
BB/Ba 8.4%
B/B 13.5%
CCC/Caa 5.3%
CC/Ca 0.0%
C/C 0.0%
% of portfolio in bonds 91.2%
[Legend:]
Rated by Standard & Poor's or Moody's
Rated by the adviser
(1) Data as of fund's last fiscal year end.
(2) In cases where the S&P and Moody's ratings for a given bond issue do not
agree, the issue has been counted in the higher category.
FUND DETAILS 33
<PAGE>
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<PAGE>
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<PAGE>
For more information
Two documents are available that offer further information on John Hancock
international/global funds:
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Includes financial statements, detailed performance information, portfolio
holdings, a statement from portfolio management and the auditor's report.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains more detailed information on all aspects of the funds. The
current annual/semi-annual report is included in the SAI.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference (is legally a part of this prospectus).
To request a free copy of the current annual/semi-annual report or SAI, please
write or call:
John Hancock Signature Services, Inc.
P.O. Box 9116
Boston, MA 02205-9116
Telephone: 1-800-225-5291
EASI-Line: 1-800-338-8080
TDD: 1-800-544-6713
[logo: John Hancock Funds
A Global Investment Management Firm]
101 Huntington Avenue
Boston, Massachusetts 02199-7603
[signature logo: John Hancock
Financial Services] (C) 1996 John Hancock Funds, Inc.
GLIPN 1/97
