John Hancock Funds
Emerging
Growth
Fund
SEMI-ANNUAL REPORT
April 30, 1997
TRUSTEES
Edward J. Boudreau, Jr.
James F. Carlin*
William H. Cunningham*
Charles F. Fretz*
Harold R. Hiser, Jr.*
Anne C. Hodsdon
Charles L. Ladner*
Leo E. Linbeck, Jr.*
Patricia P. McCarter*
Steven R. Pruchansky*
Richard S. Scipione
Lt. Gen. Norman H. Smith, USMC (Ret.)*
John P. Toolan*
*Members of the Audit Committee
OFFICERS
Edward J. Boudreau, Jr.
Chairman and Chief Executive Officer
Robert G. Freedman
Vice Chairman and
Chief Investment Officer
Anne C. Hodsdon
President
James B. Little
Senior Vice President and
Chief Financial Officer
Susan S. Newton
Vice President and Secretary
James J. Stokowski
Vice President and Treasurer
Thomas H. Connors
Second Vice President and Compliance Officer
CUSTODIAN
Investors Bank and Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
TRANSFER AGENT
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, Massachusetts 02217-1000
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
CHAIRMAN'S MESSAGE
DEAR FELLOW SHAREHOLDERS:
After two years of spectacular performance, the stock market in 1997
has given investors its starkest reminder in a while of one of
investing's basic tenets: markets move down as well as up. It's
understandable if investors had lost sight of that fact. The bull
market that began six years ago has given investors annual double-
digit returns and more modest price declines than usual. And in the
two years encompassing 1995 and 1996, the S&P 500 Index gained more
than 50%. This Pollyanna environment has tracked along with a
sustained economic recovery, now in its seventh year, that has been
marked by moderate growth, low interest rates and tame inflation.
But recently, many have begun to wonder about this bull market. Since
reaching new highs in early March, the Dow Jones Industrial Average
tumbled by more than 7% at the end of March and wiped out nearly all
it had gained since the start of the year. It was the worst decline
that the market had seen since 1990. In early April, the Dow was down
by 9.8%, within shouting distance of a 10% correction. By the end of
the month, it had bounced back into record territory again.
As the market continues to fret over interest rates and inflation,
investors should be prepared for more volatility. It also makes sense
about 10%, not the 20%-plus annual average of the last two years or
even the 16% annual average over the last 10 years. Remember that the
kind of market volatility we've seen lately is more like the way the
market really works. Fluctuations go with the territory. And market
corrections can be healthy, serving to bring inflated stock prices
down to more reasonable levels, thereby reducing some of the market's
risk.
Use this time of heightened volatility as an opportunity to review
your portfolio's asset allocations with your investment professional.
Make sure that your investment strategies reflect your individual time
horizons, objectives and risk tolerance, and that they are based upon
your needs. Despite turbulence, one thing remains constant. A well-
constructed plan and a cool head can be the best tools for reaching
your financial goals.
Sincerely,
/S/ EDWARD J. BOUDREAU, JR.
EDWARD J. BOUDREAU, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER
A 1 1/4" x 1" photo of Edward J. Boudreau Jr., Chairman and Chief
Executive Officer, flush right, next to second paragraph.
BY BERNICE S. BEHAR, CFA, PORTFOLIO MANAGER
John Hancock
Emerging Growth Fund
Small-company stocks remain out of favor, but
evidence suggests the tide may be turning
Small-company growth stocks, which are a primary focus for John
Hancock Emerging Growth Fund, suffered a tough spell during the last
six months when they fell out of investors' favor. The primary
culprits for investors' lack of enthusiasm were uncertainties over the
direction of economy and interest rates. While investors' seemingly
insatiable appetite for large-company stocks sent the big-
capitalization Dow Jones Industrial Average to consecutive new
records, their distaste for small-company stocks sent small company
indexes into a tailspin. With the prospect for a slowing economy
looming in light of rising interest rates, investors were less willing
to pay the high prices that high-growth small-company stocks
commanded. For the six-month period ended April 30, 1997, the Dow
Jones Industrials rose 17.42% while the Russell 2000, a broad measure
of small-company stock performance, posted a slight gain of 1.61%.
Even the performance of the Russell 2000 Index doesn't accurately
reflect the extent of small caps' decline.
The past six months have served as a useful reminder that investing in
aggressive-growth companies requires a healthy tolerance for a higher
level of volatility and a long-term investment perspective. Although
we recently weren't rewarded for sticking to our guns, we believe in
staying with a disciplined investment strategy despite temporary
periods of adversity. In our view, it's the best way to realize
results over the long term.
Investors
continued to
migrate
toward larger-
company
stocks.
A 2 1/4" x 3 3/4" photo of the portfolio management team. Caption reads:
"Bernice S. Behar (center) and Fund Management Team members Ben Hock (l) and
Andrew Slabin (r)."
Chart with heading "Top Five Common Stock Holdings" at top of left hand
column. The chart lists five holdings: 1) Revco D.S. 1.5% 2) Tencor
Instruments 1.2% 3) Teradyne 1.1% 4) Philip Environmental 1.0% 5) WorldCom
Inc. 1.0%. A footnote below reads: "As a percentage of net assets on April 30,
1997."
The Fund
reduced its
technology
holdings.
Performance review
For the six months ended April 30, 1997, the Fund's Class A and Class
B shares had total returns of -6.39% and -6.73%, respectively, at net
asset value. Those returns lagged that of the average small-company
growth fund's average return of -3.50% for the same period, according
to Lipper Analytical Services, Inc.1 Please see pages six and seven
for longer-term performance information. Our relatively light
weighting in financial stocks curtailed our performance in the wake of
their strong showing during the period. And while we pared back our
data networking company holdings and sidestepped their decline, we
were hurt by our relatively heavy exposure to software companies,
which experienced a sizable sell-off during the period. In addition to
concerns about the economy's strength and rising interest rates,
investors worried about an apparent slowdown of demand for networking
products and services and the strengthening U.S. dollar. Many
technology companies derive more than half of their sales from
overseas markets. A strong dollar not only makes U.S. products more
expensive to buy overseas, but also causes a decline in U.S. company
profits when foreign currency purchases are converted back into
dollars.
Table entitled "Scorecard" at bottom of left hand column. The header for the
left column is "Investments"; the header for the right column is "Recent
performance ... and what's behind the numbers. The first listing is Dell
Computer followed by an up arrow and the phrase "Captures bigger share of
individual/corporate PC market." The second listing is Converse Technology
followed by a down arrow and the phrase "Caught in technology sector
downdraft." The third listing is 3-Com followed by a down arrow and the phrase
"Suffered from increased competition in data networking market." Footnote
below reads: "See "Schedule of Investments." Investment holdings are subject
to change."
Comverse Technology, which produces special-purpose computer and
telecommunication systems, was a stock we think was unfairly punished
by the capricious stock market during the period. Shortly after the
period ended, our patience was rewarded when Comverse rebounded to new
highs. Even as some parts of the technology universe were hard hit,
many of our semiconductor and hardware holdings including Teradyne,
Tencor and Dell Computer enjoyed strong gains during the period.
Looking ahead, our view is that while the hi-tech sector will likely
remain volatile, we believe that many tech companies can continue to
maintain their high levels of growth. But stock selection will be more
important than ever. It's now clear that there has been some
divergence within the technology universe, and only companies that can
justify their stock prices with high rates of earnings growth will
continue to do well. That's why we've pared back our technology
holdings to roughly 25% of the Fund's assets, remaining selectively
invested in software and semiconductor related companies that we
believe continue to offer strong growth prospects. Baan Company, the
dominant leader in company-wide planning of resources, is a good
example of the type of tech stock we prefer.
Winners: financial, real estate
Although many stocks in the financial and real estate areas didn't fit
our aggressive-growth criteria, some do, and they tended to post
strong gains during the period. In the financial sector, one of our
biggest winners was E* TRADE Group, which provides online discount-
broker services including order placement, portfolio tracking and
related market information and news. The growing popularity of
Internet trading sent E* TRADE's stock up more than 30% during the
period. And many of our brokerage-related companies, including
investment-banking/securities broker Alex Brown Inc., posted strong
gains. General Re, which provides reinsurance and insurance in the
United States and overseas, rose nearly 60%. In the real estate
sector, Redwood Trust was one of our biggest winners. This company,
which acquires and manages real-estate mortgage assets, rose
handsomely since we bought it.
Bar chart with heading "Fund Performance" at top of left hand column. Under
the heading is the footnote: "For the six months ended April 30, 1997." The
chart is scaled in increments of 2% from top to bottom, with 0% at the top and
- -8% at the bottom. Within the chart, there are three solid bars. The first
represents the -6.39% total return for John Hancock Emerging Growth Fund:
Class A. The second represents the -6.73% total return for John Hancock
Emerging Growth Fund: Class B. The third represents the -3.50% total return
for the average small-company growth fund. Footnote below reads: "Total
returns for John Hancock Emerging Growth Fund are at net asset value with all
distributions reinvested. The average small-company growth fund is tracked by
Lipper Analytical Services, Inc.(1) See the following two pages for historical
performance information."
New opportunities
We deployed the proceeds from the sale of some of our technology
holdings into a diversified grouping of companies that fit our
earnings and revenue growth criteria and that have dominant market
share and superior, capable management teams. Recent additions
include: Philip Environmental, which recycles wire and cable, fuels,
paints, inorganic waste and other industrial by-products for resale to
industry; Samsonite, a brand-name maker and distributor of luggage;
and Quality Food Centers, a fast-growing Seattle-based supermarket
chain.
Outlook and strategy
In our view, many small-company growth stocks are now available at
compelling prices given their prospects for fast growth and price
appreciation. Late in the period we saw evidence that the situation
could be taking a turn for the better, as small-stock prices moved
north for the first time in several months. Although it may be
premature to call it a rally, we believe that investors are finally
beginning to recognize that after such a fall, small-company stocks
are now down to price levels we haven't seen for years. We may be
seeing the start of the change in the market's direction. We believe
that it's not a question of if, but when, the market rewards these
stocks. But until small-company stocks start moving back into
investors' favor, they could continue to travel a bumpy road.
"... small-
company
stocks are
now down
to price
levels we
haven't seen
for years."
- -----------------------------------------------------------------
This commentary reflects the views of the portfolio manager through
the end of the Fund's period discussed in this report. Of course, the
manager's views are subject to change as market and other conditions
warrant.
1Figures from Lipper Analytical Services, Inc. include reinvested
dividends and do not take into account sales charges. Actual load-
adjusted performance is lower.
A LOOK AT PERFORMANCE
The tables on the right show the cumulative total returns and the
average annual total returns for the John Hancock Emerging Growth
Fund. Total return is a performance measure that equals the sum of all
dividends and capital gains, assuming reinvestment of these
distributions and the change in the price of the Fund's shares,
expressed as a percentage of the Fund's net asset value per share.
Performance figures include the maximum applicable sales charge of 5%
for Class A shares. (Prior to May 15, 1995, the maximum applicable
sales charge for Class A shares was 5.75%.) The effect of the maximum
contingent-deferred sales charge for Class B shares (maximum 5% and
declining to 0% over six years) is included in Class B performance.
Remember that all figures represent past performance and are no
guarantee of how the Fund will perform in the future. Also, keep in
mind that the total return and share price of the Fund's investments
will fluctuate. As a result, your Fund's shares may be worth more or
less than their original cost, depending on when you sell them.
CUMULATIVE TOTAL RETURNS
For the period ended March 31, 1997
ONE FIVE LIFE OF
YEAR YEARS FUND
--------- --------- ----------
John Hancock Emerging
Growth Fund: Class A(1) (6.15%) 74.13% 100.93%
John Hancock Emerging
Growth Fund: Class B(2) (6.85%) 74.06% 396.21%
AVERAGE ANNUAL TOTAL RETURNS
For the period ended March 31, 1997
ONE FIVE LIFE OF
YEAR YEARS FUND
--------- --------- ----------
John Hancock Emerging
Growth Fund: Class A(1) (6.15%) 11.73% 13.25%
John Hancock Emerging
Growth Fund: Class B(2) (6.85%) 11.72% 18.51%
Notes to Performance
(1) Class A shares commenced on August 22, 1991.
(2) Class B shares commenced on October 26, 1987.
WHAT HAPPENED TO A $10,000 INVESTMENT
The charts on the right show how much a $10,000 investment in the
John hancock Emerging Growth Fund would be worth on April 30, 1997,
assuming you had invested on the day each class of shares started and
reinvested all distributions. For comparison, we've shown the same
$10,000 investment in the standard & Poor's 500 Stock Index - an
unmanaged index that includeds 500 widely traded common stocks and is
a commonly used measure of stock market performance.
Emerging Growth Fund
Class A shares
Line chart with the heading Emerging Growth Fund: Class A, representing the
growth of a hypothetical $10,000 investment over the life of the fund. Within
the chart are three lines. The first line represents the Standard & Poor's 500
Stock Index and is equal to $24,080 as of April 30, 1997. The second line
represents the value of the Emerging Growth Fund, before sales charge, and is
equal to $21,192 as of April 30, 1997. The third line represents the value of
the hypothetical $10,000 investment made in the Emerging Growth Fund on August
22, 1991, before sales charge, and is equal to $20,132 as of April 30, 1997.
Emerging Growth Fund
Class B shares
Line chart with the heading Emerging Growth Fund: Class B, representing the
growth of a hypothetical $10,000 investment over the life of the fund. Within
the chart are two lines. The first line represents the value of the Emerging
Growth Fund, before sales charge, and is equal to $46,490 as of April 30,
1997. The second line represents the value of the hypothetical $10,000
investment made in the Standard & Poor's 500 Stock Index on October 26, 1987,
and is equal to $33,156 as of April 30, 1997.
*No contingent-deferred sales charge applicable.
<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
The Statement of Assets and Liabilities is the Fund's balance sheet
and shows the value of what the Fund owns, is due and owes on April
30, 1997. You'll also find the net asset value and the maximum
offering price per share as of that date.
Statement of Assets and Liabilities
April 30, 1997 (Unaudited)
- ----------------------------------------------------------------------------
<S> <C>
Assets:
Investments at value - Note C:
Common and preferred stocks
(cost - $299,523,889) $469,762,496
Joint repurchase agreement (cost - $127,710,000) 127,710,000
Corporate savings account 95,938
------------
597,568,434
Receivable for investments sold 723,026
Receivable for shares sold 154,797
Dividends receivable 241,278
Interest receivable 19,353
Other assets 76,865
------------
Total Assets 598,783,753
- ----------------------------------------------------------------------------
Liabilities:
Payable for investments purchased 1,109,227
Payable for shares repurchased 371,059
Payable to John Hancock Advisers, Inc.
and affiliates - Note B 558,467
Accounts payable and accrued expenses 64,198
------------
Total Liabilities 2,102,951
- ----------------------------------------------------------------------------
Net Assets:
Capital paid-in 325,283,337
Accumulated realized gain on investments and
foreign currency transactions 104,609,041
Net unrealized appreciation of investments 170,240,653
Accumulated net investment loss ( 3,452,229)
------------
Net Assets $596,680,802
============================================================================
Net Asset Value Per Share:
(Based on net asset values and shares of beneficial
interest outstanding - unlimited number of shares
authorized with no par value, respectively)
Class A - $205,084,120/5,469,847 $ 37.49
============================================================================
Class B - $391,596,682/10,962,131 $ 35.72
============================================================================
Maximum Offering Price Per Share*
Class A - ($37.49 x 105.26%) $ 39.46
============================================================================
* On single retail sales of less than $50,000. On sales of $50,000 or
more and on group sales the offering price is reduced.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
The Statement of Operations summarizes the Fund's investment income
earned and expenses incurred in operating the Fund. It also shows net
gains (losses) for the period stated.
Statement of Operations
Six months ended April 30, 1997 (Unaudited)
- -----------------------------------------------------------------------------
<S> <C>
Investment Income:
Dividends $ 1,419,688
Interest 1,032,930
-----------
2,452,618
-----------
Expenses:
Investment management fee - Note B 2,444,608
Distribution and service fee - Note B
Class A 270,918
Class B 2,136,702
Transfer agent fee - Note B 724,876
Custodian fee 98,030
Financial services fee - Note B 61,115
Registration and filing fees 50,077
Trustees' fees 32,280
Auditing fee 20,667
Miscellaneous 12,387
Legal fees 9,850
Printing 6,933
-----------
Net Expenses 5,868,443
- -----------------------------------------------------------------------------
Net Investment Loss ( 3,415,825)
- -----------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments:
Net realized gain on investments sold 104,724,588
Change in net unrealized appreciation/depreciation
of investments (141,780,584)
-----------
Net Realized and Unrealized Loss
on Investments ( 37,055,996)
- -----------------------------------------------------------------------------
Net Decrease in Net Assets
Resulting from Operations ($40,471,821)
=============================================================================
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- ------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED
YEAR ENDED APRIL 30, 1997
OCTOBER 31, 1996 (UNAUDITED)
---------------- ----------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment loss ($ 8,693,751) ($ 3,415,825)
Net realized gain on investments sold 20,303,665 104,724,588
Change in net unrealized appreciation/depreciation of investments 66,455,826 ( 141,780,584)
------------- ------------
Net Increase (Decrease) in Net Assets Resulting from Operations 78,065,740 ( 40,471,821)
------------- ------------
Distributions to Shareholders:
Distributions from net realized gain on investments sold
Class A - (none and $0.8455 per share, respectively) -- ( 4,419,042)
Class B - (none and $0.8455 per share, respectively) -- ( 9,530,032)
------------- ------------
Total Distributions to Shareholders -- ( 13,949,074)
------------- ------------
From Fund Share Transactions - Net* 18,740,400 ( 18,663,200)
------------- ------------
Net Assets:
Beginning of period 572,958,757 669,764,897
------------- ------------
End of period (including accumulated net investment loss
of $36,404 and $3,452,229, respectively) $ 669,764,897 $596,680,802
============= ============
</TABLE>
<TABLE>
<CAPTION>
* Analysis of Fund Share Transactions:
SIX MONTHS ENDED
YEAR ENDED APRIL 30, 1997
OCTOBER 31, 1996 (UNAUDITED)
--------------------------- ----------------------------
SHARES AMOUNT SHARES AMOUNT
----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 10,344,259 $405,197,459 8,018,282 $325,817,866
Shares issued to shareholders in reinvestment
of distributions -- -- 91,548 3,727,839
----------- ------------ ---------- ------------
10,344,259 405,197,459 8,109,830 329,545,705
Less shares repurchased ( 9,972,552) ( 391,886,133) ( 7,985,370) ( 325,747,320)
----------- ------------ ---------- ------------
Net increase 371,707 $ 13,311,326 124,460 $ 3,798,385
=========== ============ ========== ============
CLASS B
Shares sold 8,954,690 $337,367,675 4,754,278 $186,447,075
Shares issued to shareholders in reinvestment
of distributions -- -- 171,310 6,663,815
----------- ------------ ---------- ------------
8,954,690 337,367,675 4,925,588 193,110,890
Less shares repurchased ( 8,730,155) ( 331,938,601) ( 5,497,405) ( 215,572,475)
----------- ------------ ---------- ------------
Net increase (decrease) 224,535 $ 5,429,074 ( 571,817) ($ 22,461,585)
=========== ============ ========== ============
The Statement of Changes in Net Assets shows how the value of the Fund's net assets has changed since the end of the
previous year. The difference reflects earnings less expenses, any investment gains and losses, and any increase or
decrease in money shareholders invested in the Fund. The footnote illustrates the number of Fund shares sold and
repurchased during the last two periods, along with the corresponding dollar value.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout each period indicated, investment returns, key
ratios and supplemental data are listed as follows:
- ----------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, SIX MONTHS ENDED
--------------------------------------------------------- APRIL 30, 1997
1992 1993 1994 1995(1) 1996 (UNAUDITED)
------- ------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Per Share Operating Performance
Net Asset Value, Beginning of Period $ 19.26 $ 20.60 $ 25.89 $ 26.82 $ 36.09 $ 40.88
------- ------- -------- -------- -------- --------
Net Investment Loss(2) ( 0.20) ( 0.16) ( 0.18) ( 0.25) ( 0.34) ( 0.11)
Net Realized and Unrealized Gain
on Investments 1.60 5.45 1.11 9.52 5.13 ( 2.43)
------- ------- -------- -------- -------- --------
Total from Investment Operations 1.40 5.29 0.93 9.27 4.79 ( 2.54)
------- ------- -------- -------- -------- --------
Less Distributions
Distributions from Net Realized
Gain on Investments Sold ( 0.06) -- -- -- -- ( 0.85)
------- ------- -------- -------- -------- --------
Net Asset Value, End of Period $ 20.60 $ 25.89 $ 26.82 $ 36.09 $ 40.88 $ 37.49
======= ======= ======== ======== ======== ========
Total Investment Return
at Net Asset Value(3) 7.32% 25.68% 3.59% 34.56% 13.27% ( 6.39%)(6)
Ratios and Supplemental Data
Net Assets, End of Period
(000s Omitted) $46,137 $81,263 $131,053 $179,481 $218,497 $205,084
Ratio of Expenses to Average
Net Assets 1.67% 1.40% 1.44% 1.38% 1.32% 1.31%(5)
Ratio of Net Investment Loss
to Average Net Assets ( 1.03%) ( 0.70%) ( 0.71%) ( 0.83%) ( 0.86%) ( 0.55%)(5)
Portfolio Turnover Rate 48% 29% 25% 23% 44% 41%
Average Broker Commission Rate(4) N/A N/A N/A N/A $ 0.0669 $ 0.0698
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights (continued)
- ----------------------------------------------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31, SIX MONTHS ENDED
--------------------------------------------------------- APRIL 30, 1997
1992 1993 1994 1995(1) 1996 (UNAUDITED)
------- ------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
CLASS B
Per Share Operating Performance
Net Asset Value, Beginning of Period $ 19.22 $ 20.34 $ 25.33 $ 26.04 $ 34.79 $ 39.13
------- -------- -------- -------- -------- --------
Net Investment Loss(2) ( 0.38) ( 0.36) ( 0.36) ( 0.45) ( 0.60) ( 0.25)
Net Realized and Unrealized
Gain on Investments 1.56 5.35 1.07 9.20 4.94 ( 2.31)
------- ------- -------- -------- -------- --------
Total from Investment Operations 1.18 4.99 0.71 8.75 4.34 ( 2.56)
------- ------- -------- -------- -------- --------
Less Distributions
Distributions from Net Realized
Gain on Investments Sold ( 0.06) -- -- -- -- ( 0.85)
------- -------- -------- -------- -------- --------
Net Asset Value, End of Period $ 20.34 $ 25.33 $ 26.04 $ 34.79 $ 39.13 $ 35.72
======= ======== ======== ======== ======== ========
Total Investment Return
at Net Asset Value(3) 6.19% 24.53% 2.80% 33.60% 12.48% ( 6.73%)(6)
Ratios and Supplemental Data
Net Assets, End of Period
(000s Omitted) $86,923 $219,484 $283,485 $393,478 $451,268 $391,597
Ratio of Expenses
to Average Net Assets 2.64% 2.28% 2.19% 2.11% 2.05% 2.04%(5)
Ratio of Net Investment Loss
to Average Net Assets ( 1.99%) ( 1.58%) ( 1.46%) ( 1.55%) ( 1.59%) ( 1.29%)(5)
Portfolio Turnover Rate 48% 29% 25% 23% 44% 41%
Average Broker Commission Rate(4) N/A N/A N/A N/A $ 0.0669 $ 0.0698
(1) On December 22, 1994, John Hancock Advisers, Inc. became the investment adviser of the Fund.
(2) On average month end shares outstanding.
(3) Total investment return assumes dividend reinvestment and does not reflect the effect of sales charge.
(4) Per portfolio share traded. Required for fiscal years that began September 1, 1995 or later.
(5) Annualized.
(6) Not annualized.
The Financial Highlights summarizes the impact of the following factors on a single share for each period indicated:
income, expenses, distributions and gains (losses) of the Fund. It shows how the Fund's net asset value for a share
has changed since the end of the previous period. Additionally, important relationships between some items presented
in the financial statements are expressed in ratio form.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Schedule of Investments
April 30, 1997 (Unaudited)
- -------------------------------------------------------------------------------
The Schedule of Investments is a complete list of all securities owned by the
Emerging Growth Fund on April 30, 1997. It's divided into three main
categories: common stocks, preferred stocks and short-term investments. Common
stocks and preferred stocks are further broken down by industry group.
Short-term investments, which represent the Fund's "cash" position, are listed
last.
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----------
<S> <C> <C> <C>
COMMON STOCKS
Advertising (0.45%)
Universal Outdoor Holdings, Inc.* 97,500 $ 2,656,875
------------
Aerospace (0.50%)
AAR Corp. 100,000 2,975,000
------------
Automobile / Trucks (0.27%)
Team Rental Group, Inc.* 70,400 1,584,000
------------
Banks - United States (0.03%)
Hibernia Corp. (Class A) 15,000 193,125
------------
Beverages (0.60%)
Mondavi (Robert) Corp. (Class A)* 96,000 3,600,000
------------
Broker Services (1.34%)
Alex Brown, Inc. 42,000 2,703,750
Donaldson, Lufkin & Jenrette, Inc. 20,000 862,500
Interra Financial, Inc. 40,000 1,465,000
Raymond James Financial, Inc. 127,125 2,971,547
------------
8,002,797
------------
Building (0.64%)
Watsco, Inc. 153,100 3,808,362
------------
Business Services - Misc (1.25%)
Billing Information Concepts* 60,000 1,432,500
Equifax, Inc. 143,000 4,111,250
Registry, Inc. (The)* 33,000 1,398,375
Sitel Corp.* 52,000 513,500
------------
7,455,625
------------
Computers (12.30%)
Adaptec, Inc.* 120,000 4,440,000
Aspect Development, Inc.* 123,000 2,629,125
Baan Co., N.V. * (Netherlands) (Y) 65,000 3,493,750
BISYS Group, Inc. (The)* 61,835 1,978,720
BMC Software, Inc.* 70,000 3,027,500
Cabletron Systems, Inc.* 45,000 1,552,500
Computer Management Sciences, Inc.* 62,500 820,312
Dell Computer Corp.* 55,000 4,602,813
DST Systems, Inc.* 170,000 4,823,750
E* TRADE Group, Inc.* 206,500 3,097,500
Hyperion Software Corp.* 80,000 1,300,000
IONA Technologies PLC*, American
Depositary Receipt (ADR), (Ireland) 8,100 117,450
National Instruments Corp.* 96,000 2,904,000
National TechTeam, Inc.* 185,000 2,867,500
Network Appliance, Inc.* 117,500 3,422,188
Network General Corp.* 140,000 1,925,000
Parametric Technology Corp.* 60,000 2,715,000
Pegasystems, Inc.* 98,300 1,929,138
Peoplesoft, Inc.* 56,600 2,348,900
Procom Technology, Inc.* 175,700 1,910,738
Scopus Technology, Inc.* 20,250 541,687
Seagate Technology, Inc.* 122,100 5,601,338
SEI Investments Company 18,000 378,000
SPSS, Inc.* 70,000 1,855,000
Sterling Commerce, Inc.* 127,223 3,291,895
Sterling Software, Inc.* 105,000 3,202,500
Vantive Corp.* 30,000 596,250
VeriFone, Inc.* 25,000 1,268,750
Western Digital Corp.* 35,000 2,156,875
Whittman-Hart, Inc.* 137,000 2,603,000
------------
73,401,179
------------
Consumer Products Misc. (0.60%)
Samsonite Corp.* 86,100 3,573,150
------------
Cosmetics & Personal Care (0.26%)
Revlon, Inc. (Class A) * 42,700 1,569,225
------------
Electronics (7.08%)
Advanced Technology Materials, Inc.* 80,000 1,440,000
Atmel Corp.* 80,000 1,990,000
Berg Electronics Corp.* 25,000 750,000
Credence Systems Corp.* 50,000 793,750
Electroglas, Inc.* 212,000 3,365,500
Integrated Circuit Systems, Inc.* 72,500 996,875
KLA Instruments Corp.* 30,000 1,335,000
Lam Research Corp.* 100,000 2,900,000
Maxim Intergrated Products, Inc.* 108,000 5,710,500
Micrel, Inc.* 17,500 765,625
Novellus Systems, Inc.* 30,000 1,732,500
Semtech Corp.* 88,000 2,079,000
Tencor Instruments* 165,000 7,321,875
Teradyne, Inc.* 200,456 6,564,934
Ultratech Stepper, Inc.* 30,000 538,125
Unitrode Corp.* 100,000 3,950,000
------------
42,233,684
------------
Finance (3.59%)
Alliance Capital Management, L.P. 110,000 2,983,750
Capital One Financial Corp. 60,000 2,167,500
FIRSTPLUS Financial Group, Inc.* 97,300 2,152,762
Franklin Resources, Inc. 48,000 2,838,000
Investors Financial Services Corp.
(Class A) 1,345 47,075
Medallion Financial Corp. 260,000 4,615,000
Price (T. Rowe) Associates, Inc. 122,000 5,642,500
SunAmerica, Inc. 21,000 966,000
------------
21,412,587
------------
Food (0.13%)
Fine Host Corp.* 31,600 797,900
------------
Funeral Services & Related (0.84%)
Service Corp. International 100,000 3,425,000
Stewart Enterprises, Inc. (Class A) 48,375 1,596,375
------------
5,021,375
------------
Insurance (6.55%)
Ace, Ltd. (Bermuda) (Y) 60,000 3,600,000
Capital Re Corp. 80,000 3,170,000
CMAC Investment Corp. 90,000 3,420,000
Everest Reinsurance Holdings, Inc. 32,500 934,375
Exel, Ltd. (Bermuda) (Y) 51,000 1,989,000
General Re Corp. 29,064 4,860,954
HCC Insurance Holdings, Inc. 117,500 2,952,188
Horace Mann Educators Corp. 75,000 3,515,625
MBIA, Inc. 28,000 2,726,500
Mid Ocean, Ltd. (Bermuda) (Y) 4,000 183,500
PartnerRe, Ltd. (Bermuda) (Y) 10,000 336,250
Philadelphia Consolidated Holding Corp.* 95,000 2,826,250
RenaissanceRe Holdings, Ltd.
(Bermuda) (Y) 3,789 140,193
Transatlantic Holdings, Inc. 17,000 1,406,750
UNUM Corp. 27,500 2,117,500
Vesta Insurance Group, Inc. 25,000 1,043,750
Western National Corp. 150,000 3,862,500
------------
39,085,335
------------
Leasing Companies (0.30%)
Rollins Truck Leasing Corp. 137,500 1,804,687
------------
Leisure (1.41%)
Callaway Golf Co. 52,000 1,553,500
Cinar Films, Inc. (Class B)* (Canada) (Y) 100,000 2,275,000
Marriott International, Inc. 10,000 552,500
Premier Parks, Inc.* 81,000 2,399,625
Silicon Gaming, Inc.* 120,000 1,635,000
------------
8,415,625
------------
Machinery (1.01%)
Gardner Denver Machinery, Inc.* 145,000 3,298,750
ITEQ, Inc.* 450,000 2,700,000
------------
5,998,750
------------
Media (3.25%)
American Radio Systems Corp.* 52,020 1,521,585
Clear Channel Communications, Inc.* 90,300 4,379,550
Cox Radio, Inc. (Class A)* 60,000 1,215,000
Harte-Hanks Communications, Inc. 75,000 2,043,750
Heftel Broadcasting Corp. (Class A)* 120,000 6,000,000
Mecklermedia Corp.* 130,000 3,315,000
Univision Communications, Inc.
(Class A)* 27,600 938,400
------------
19,413,285
------------
Medical (5.21%)
Boston Scientific Corp.* 18,190 877,667
Centocor, Inc.* 35,500 998,437
ESC Medical Systems, Ltd.* (Israel) (Y) 70,000 1,881,250
Health Care & Retirement Corp. * 85,650 2,708,681
Health Management Associates, Inc.
(Class A) * 37,968 1,015,644
HEALTHSOUTH Corp.* 82,084 1,621,159
Incyte Pharmaceuticals, Inc.* 10,000 425,000
Kos Pharmaceuticals, Inc.* 7,400 166,500
Maxicare Health Plans, Inc.* 125,000 2,906,250
MiniMed, Inc.* 60,000 1,485,000
Multicare Cos., Inc.* 75,000 1,396,875
National Surgery Centers, Inc.* 100,500 3,015,000
North American Vaccine, Inc.* 40,000 835,000
Oxford Health Plans, Inc.* 20,000 1,317,500
Protein Design Labs, Inc.* 100,300 2,520,038
RoTech Medical Corp.* 72,000 1,134,000
Scherer (R.P.) Corp.* 22,000 1,012,000
Sonus Pharmaceuticals, Inc.* 105,000 2,493,750
Stryker Corp. 12,200 401,075
Tenet Healthcare Corp.* 27,000 702,000
Universal Health Services, Inc. (Class B)* 35,000 1,325,625
Vencor, Inc.* 8,437 351,190
Vital Signs, Inc. 25,000 475,000
------------
31,064,641
------------
Metal (0.65%)
Maverick Tube Corp.* 155,000 3,390,625
NCI Building Systems, Inc.* 15,000 465,000
------------
3,855,625
------------
Office (0.56%)
Shelby Williams Industries, Inc. 288,200 3,314,300
------------
Oil & Gas (5.82%)
Baker Hughes, Inc. 10,000 345,000
Barrett Resources Corp.* 12,500 409,375
BJ Services Co.* 6,000 282,750
Brown (Tom), Inc.* 115,000 2,098,750
Camco International, Inc. 20,000 887,500
Cross Timbers Oil Co. 45,000 697,500
Energy Ventures, Inc.* 80,000 5,350,000
ENSCO International, Inc.* 22,000 1,045,000
Falcon Drilling Co., Inc.* 100,000 3,825,000
Forcenergy, Inc.* 117,000 3,627,000
J. Ray McDermott, S.A. * 60,000 1,027,500
National-Oilwell, Inc.* 105,000 4,081,875
Oceaneering International, Inc.* 23,000 333,500
Offshore Logistics, Inc.* 71,500 1,287,000
Precision Drilling Corp.* (Canada) (Y) 65,000 2,258,750
Smith International, Inc.* 50,000 2,368,750
Snyder Oil Corp. 19,000 301,625
Stone Energy Corp.* 115,000 3,076,250
Tuboscope Vetco International Corp.* 100,000 1,400,000
------------
34,703,125
------------
Pollution Control (2.52%)
Newpark Resources, Inc.* 95,000 4,263,125
Philip Environmental Inc.* (Canada) (Y) 390,300 6,147,225
Superior Services, Inc.* 160,000 3,520,000
US Filter Corp.* 26,250 797,344
USA Waste Services, Inc.* 10,000 327,500
------------
15,055,194
------------
Printing - Commercial (0.57%)
Mail-Well, Inc.* 125,000 3,421,875
------------
Protection - Safety Equip&Svc (0.07%)
Rural/Metro Corp.* 15,000 431,250
------------
Real Estate Investment Trusts (3.86%)
Arden Realty Group, Inc. 127,400 3,169,075
Beacon Properties Corp. 75,000 2,315,625
Cali Realty Corp. 90,000 2,655,000
Crescent Real Estate Equities Co. 120,600 3,165,750
Equity Residential Properties Trust 40,000 1,750,000
Glenborough Realty Trust, Inc. 136,500 2,695,875
Kilroy Realty Corp.* 43,500 1,022,250
Redwood Trust, Inc. 80,400 3,778,800
Starwood Lodging Trust 65,000 2,502,500
------------
23,054,875
------------
Real Estate Operations (0.15%)
Insignia Financial Group, Inc. (Class A)* 50,000 875,000
------------
Retail (8.80%)
99 Cents Only Stores* 9,000 194,625
Arbor Drugs, Inc. 188,500 3,463,688
Borders Group, Inc. * 130,000 2,762,500
Consolidated Stores Corp.* 30,000 1,200,000
CUC International, Inc. * 67,500 1,425,937
Ethan Allen Interiors, Inc. 41,000 1,814,250
Furniture Brands International, Inc.* 205,000 3,023,750
Gucci Group, N.V. (Netherlands) (Y) 44,500 3,087,187
Hibbett Sporting Goods, Inc.* 66,000 1,056,000
Hollywood Entertainment Corp.* 10,000 213,750
Hot Topic, Inc.* 25,000 643,750
Linens 'N Things, Inc.* 85,000 1,806,250
Proffitt's, Inc.* 80,000 2,990,000
Quality Food Centers, Inc.* 122,800 4,927,350
Revco D.S., Inc.* 205,454 8,937,249
Rite Aid Corp. 40,000 1,840,000
Stage Stores, Inc.* 170,000 3,527,500
Staples, Inc.* 81,000 1,458,000
Starbucks Corp.* 105,000 3,136,875
Talbots, Inc. 50,000 1,350,000
Tiffany & Co. 72,000 2,853,000
Williams-Sonoma, Inc.* 25,000 775,000
------------
52,486,661
------------
Schools / Education (0.34%)
Learning Tree International, Inc.* 63,500 2,000,250
------------
Service (0.05%)
Four Media Corp.* 51,800 284,900
------------
Shoes & Related Apparel (0.97%)
Nine West Group, Inc.* 55,000 2,179,375
Wolverine World Wide, Inc. 90,000 3,622,500
------------
5,801,875
------------
Steel (0.59%)
Lone Star Technologies, Inc.* 190,000 3,538,750
------------
Telecommunications (3.76%)
Comverse Technology, Inc.* 89,800 3,524,650
PairGain Technologies, Inc.* 72,600 1,887,600
REMEC, Inc.* 115,000 2,645,000
Tel-Save Holdings, Inc.* 200,000 2,800,000
Tellabs, Inc.* 120,000 4,785,000
U.S. Long Distance Corp.* 60,000 727,500
WorldCom, Inc.* 253,032 6,072,768
------------
22,442,518
------------
Textile (1.46%)
Culp, Inc. 210,000 3,727,500
Cutter & Buck, Inc.* 166,000 1,992,000
Nautica Enterprises, Inc.* 120,000 2,655,000
St. John Knits, Inc. 10,000 383,750
------------
8,758,250
------------
Transport (0.78%)
ASA Holdings, Inc. 65,000 1,381,250
Comair Holdings, Inc. 38,925 822,291
Eagle USA Airfreight, Inc.* 60,000 1,215,000
Southwest Airlines Co. 45,000 1,237,500
------------
4,656,041
------------
TOTAL COMMON STOCKS
(Cost $298,918,149) ( 78.56%) 468,747,696
------- ------------
PREFERRED STOCK
Oil & Gas (0.17%)
Cross Timbers Oil Co., Ser A 34,400 1,014,800
------------
TOTAL PREFERRED STOCK
(Cost $605,740) ( 0.17%) 1,014,800
------- ------------
TOTAL EQUITY
(Cost $299,523,889) ( 78.73%) 469,762,496
------- ------------
<CAPTION>
INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000S OMITTED) VALUE
- ------------------- ---------- ---------------- -----------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
Other (21.40%)
Investment in joint repurchase
agreement transaction with
Aubrey G. Lanston & Co. -
Dated 4-30-97, Due 5-01-97
(Secured by U.S. Treasury Bills,
5.37% thru 5.78% Due 8-21-97
thru 3-05-98, U.S. Treasury
Bonds, 7.125% thru 11.25%
Due 2-15-15 thru 2-15-23,
U.S. Treasury Notes, 5.125%
thru 7.75%, Due 8-31-98
thru 5-15-05) - Note A 5.375% $127,710 $127,710,000
------------
Corporate Savings Account (0.02%)
Investors Bank and Trust Company
Daily Interest Savings Account
Current Rate 4.95% 95,938
------------
TOTAL SHORT-TERM INVESTMENTS ( 21.42%) 127,805,938
------- ------------
TOTAL INVESTMENTS (100.15%) $597,568,434
======= ============
* Non-income producing security
(Y) Parenthetical disclosure of a foreign country in the security description
represents country of a foreign issuer; however, security is U.S. dollar
denominated.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
See notes to financial statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A --
ACCOUNTING POLICIES
John Hancock Series Trust (the "Trust") is a diversified, open-end
management investment company, registered under the Investment Company
Act of 1940. The Trust consists of two series portfolios: John Hancock
Emerging Growth Fund (the "Fund") and John Hancock Global Technology
Fund. The other series of the Trust is reported in separate financial
statements. The investment objective of the Fund is to seek long-term
growth of capital through investing in emerging companies (market
capitalization of less than $1 billion).
The Trustees have authorized the issuance of multiple classes of shares
of the Fund, designated as Class A and Class B shares. The shares of
each class represent an interest in the same portfolio of investments of
the Fund and have equal rights to voting, redemptions, dividends and
liquidation, except that certain expenses, subject to the approval of
the Trustees, may be applied differently to each class of shares in
accordance with current regulations of the Securities and Exchange
Commission and the Internal Revenue Service. Shareholders of a class
which bears distribution and service expenses under terms of a
distribution plan have exclusive voting rights to that distribution
plan.
Significant accounting policies of the Fund are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio are valued
on the basis of market quotations, valuations provided by independent
pricing services or at fair value as determined in good faith in
accordance with procedures approved by the Trustees. Short-term debt
investments maturing within 60 days are valued at amortized cost which
approximates market value. All portfolio transactions initially
expressed in terms of foreign currencies have been translated into U.S.
dollars as described in "Foreign Currency Translation" below.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other
registered investment companies having a management contract with John
Hancock Advisers, Inc. (the "Adviser"), a wholly owned subsidiary of The
Berkeley Financial Group, may participate in a joint repurchase
agreement. Aggregate cash balances are invested in one or more
repurchase agreements, whose underlying securities are obligations of
the U.S. government and/or its agencies. The Fund's custodian bank
receives delivery of the underlying securities for the joint account on
the Fund's behalf. The Adviser is responsible for ensuring that the
agreement is fully collateralized at all times.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of the
date of purchase, sale or maturity. Net realized gains and losses on
sales of investments are determined on the identified cost basis.
FEDERAL INCOME TAXES The Fund's policy is to comply with the
requirements of the Internal Revenue Code that are applicable to
regulated investment companies and to distribute all of its taxable
income, including any net realized gain on investment, to its
shareholders. Therefore, no federal income tax provision is required.
For federal income tax purposes, net currency exchange gains and losses
from sales of foreign debt securities may be treated as ordinary income
even though such items are gains and losses for accounting purposes.
DIVIDENDS, DISTRIBUTIONS AND INTEREST Dividend income on investment
securities is recorded on the ex-dividend date or, in the case of some
foreign securities, on the date thereafter when the Fund is made aware
of the dividend. Interest income on investment securities is recorded on
the accrual basis. Foreign income may be subject to foreign withholding
taxes which are accrued as applicable.
The Fund records all distributions to shareholders from net investment
income and realized gains on the ex-dividend date. Such distributions
are determined in conformity with income tax regulations, which may
differ from generally accepted accounting principles. Dividends paid by
the Fund with respect to each class of shares will be calculated in the
same manner, at the same time and will be in the same amount, except for
the effect of expenses that may be applied differently to each class.
CLASS ALLOCATIONS Income, common expenses and realized and unrealized
gains (losses) are calculated at the Fund level and allocated daily to
each class of shares based on the appropriate net assets of the
respective classes. Distribution and service fees if any, are calculated
daily at the class level based on the appropriate net assets of each
class and the specific expense rate(s) applicable to each class.
EXPENSES The majority of the expenses of the Trust are directly
identifiable to an individual fund. Expenses which are not readily
identifiable to a specific fund are allocated in such a manner as deemed
equitable, taking into consideration, among other things, the nature and
type of expense and the relative sizes of the funds.
USE OF ESTIMATES The preparation of these financial statements in
accordance with generally accepted accounting principles incorporates
estimates made by management in determining the reported amounts of
assets, liabilities, revenues and expenses of the Fund. Actual results
could differ from these estimates.
BANK BORROWINGS The Fund is permitted to have bank borrowings for
temporary or emergency purposes, including the meeting of redemption
requests that otherwise might require the untimely disposition of
securities. The Fund had no borrowing activity for the period ended
April 30, 1997.
FOREIGN CURRENCY TRANSLATION All assets and liabilities initially
expressed in terms of foreign currencies are translated into U.S.
dollars based on London currency exchange quotations as of 5:00 p.m.,
London time, on the date of any determination of the net asset value of
the Fund. Transactions affecting statement of operations accounts and
net realized gain/(loss) on investments are translated at the rates
prevailing at the dates of the transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held.
Such fluctuations are included with the net realized and unrealized gain
or loss from investments.
Reported net realized foreign exchange gains or losses arise from sales
of foreign currency, currency gains or losses realized between the trade
and settlement dates on securities transactions and the difference
between the amounts of dividends, interest and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent of the
amounts actually received or paid. Net unrealized foreign exchange gains
or losses arise from changes in the value of assets and liabilities
other than investments in securities at fiscal year end, resulting from
changes in the exchange rate.
NOTE B -
MANAGEMENT FEE AND
TRANSACTIONS WITH AFFILIATES AND OTHERS
Under the present investment management contract, the Fund pays a
monthly management fee to the Adviser for a continuous investment
program equivalent, on an annual basis, to the sum of 0.75% of Fund's
average daily net asset value.
The Fund has a distribution agreement with John Hancock Funds, Inc. ("JH
Funds"), a wholly owned subsidiary of the Adviser. For the period ended
April 30, 1997, net sales charges received with regard to sales of Class
A shares amounted to $226,521. Out of this amount, $34,796 was retained
and used for printing prospectuses, advertising, sales literature and
other purposes, $153,846 was paid as sales commissions to unrelated
broker-dealers and $37,879 was paid as sales commissions to sales
personnel of John Hancock Distributors, Inc. ("Distributors"), Tucker
Anthony, Incorporated ("Tucker Anthony") and Sutro & Co., Inc.
("Sutro"), all of which are broker-dealers. The Adviser's indirect
parent, John Hancock Mutual Life Insurance Company ("JHMLICo"), is the
indirect sole shareholder of Distributors and was the indirect sole
shareholder until November 29, 1996 of John Hancock Freedom Securities
Corporation and its subsidiaries, which include Tucker Anthony and
Sutro.
Class B shares which are redeemed within six years of purchase will be
subject to a contingent-deferred sales charge ("CDSC") at declining
rates beginning at 5.0% of the lesser of the current market value at the
time of redemption or the original purchase cost of the shares being
redeemed. Proceeds from the CDSC are paid to JH Funds and are used in
whole or in part to defray its expenses related to providing
distribution related services to the Fund in connection with the sale of
Class B shares. For the period ended April 30, 1997, contingent-deferred
sales charges paid to JH Funds amounted to $519,570.
In addition, to reimburse JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted a Distribution
Plan with respect to Class A and Class B pursuant to Rule 12b-1 under
the Investment Company Act of 1940. Accordingly, the Fund will make
payments to JH Funds for distribution and service expenses, at an annual
rate not to exceed 0.25% of Class A average daily net assets and 1.00%
of Class B average daily net assets to reimburse JH Funds for its
distribution and service costs. Up to a maximum of 0.25% of such
payments may be service fees as defined by the amended Rules of Fair
Practice of the National Association of Securities Dealers. Under the
amended Rules of Fair Practice, curtailment of a portion of the Fund's
12b-1 payments could occur under certain circumstances.
The Fund has a transfer agent agreement with John Hancock Signature
Services, Inc. ("Signature Services"), an indirect subsidiary of
JHMLICo. The Fund pays transfer agent fees based on the number of
shareholder accounts and certain out-of-pocket expenses.
The Fund has an agreement with the Adviser to perform necessary tax and
financial management services for the Funds. The compensation for the
period was at an annual rate of 0.01875% of the average net assets of
each Fund.
Mr. Edward J. Boudreau, Jr., Ms. Anne C. Hodsdon and Mr. Richard S.
Scipione are trustees and/or officers of the Adviser and/or its
affiliates, as well as Trustees of the Fund. The compensation of
unaffiliated Trustees is borne by the Fund. The unaffiliated Trustees
may elect to defer for tax purposes their receipt of this compensation
under the John Hancock Group of Funds Deferred Compensation Plan. The
Fund makes investments into other John Hancock funds, as applicable, to
cover its liability for the deferred compensation. Investments to cover
the Fund's deferred compensation liability are recorded on the Fund's
books as an other asset. The deferred compensation liability and the
related other asset are always equal and are marked to market on a
periodic basis to reflect any income earned by the investment as well as
any unrealized gains or losses. At April 30, 1997, the Fund's deferred
compensation had an unrealized appreciation of $2,046.
NOTE C -
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than obligations
of the U.S. government and its agencies and short-term securities,
during the period ended April 30, 1997, aggregated $247,460,904 and
$409,206,232, respectively. There were no purchases or sales of obli-
gations of the U.S. government and its agencies during the period ended
April 30, 1997.
The cost of investments owned at April 30, 1997 for federal income tax
purposes was $427,233,889. Gross unrealized appreciation and
depreciation of investments aggregated $183,046,012 and $12,807,405,
respectively, resulting in net unrealized appreciation of $170,238,607.
NOTES
[THIS PAGE INTENTIONALLY LEFT BLANK]
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right. A tag line below reads: "A Global Investment Management Firm."
101 Huntington Avenue, Boston, MA 02199-7603
1-800-225-5291 1-800-554-6713 (TDD)
Internet: www.jhancock.com/funds
Bulk Rate
U.S. Postage
PAID
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Permit No. 75
This report is for the information of shareholders of the John Hancock
Emerging Growth Fund. It may be used as sales literature when preceded
or accompanied by the current prospectus, which details charges,
investment objectives and operating policies.
A recycled logo in lower left hand corner with the 600SA 4/97
caption "Printed on Recycled Paper." 6/97
John Hancock Funds
Global
Technology
Fund
SEMI-ANNUAL REPORT
April 30, 1997
TRUSTEES
Edward J. Boudreau, Jr.
James F. Carlin*
William H. Cunningham*
Charles F. Fretz*
Harold R. Hiser, Jr.*
Anne C. Hodsdon
Charles L. Ladner*
Leo E. Linbeck, Jr.*
Patricia P. McCarter*
Steven R. Pruchansky*
Richard S. Scipione
Lt. Gen. Norman H. Smith, USMC (Ret.)*
John P. Toolan*
*Members of the Audit Committee
OFFICERS
Edward J. Boudreau, Jr.
Chairman and Chief Executive Officer
Robert G. Freedman
Vice Chairman and
Chief Investment Officer
Anne C. Hodsdon
Executive President
Barry J. Gordon
President
James B. Little
Senior Vice President and
Chief Financial Officer
Susan S. Newton
Vice President and Secretary
James J. Stokowski
Vice President and Treasurer
Thomas H. Connors
Second Vice President and Compliance Officer
CUSTODIAN
Investors Bank and Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
TRANSFER AGENT
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, Massachusetts 02217-1000
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
LEGAL COUNSEL
Hale and Dorr LLP
60 State Street
Boston, Massachusetts 02109
CHAIRMAN'S MESSAGE
DEAR FELLOW SHAREHOLDERS:
After two years of spectacular performance, the stock market in 1997
has given investors its starkest reminder in a while of one of
investing's basic tenets: markets move down as well as up. It's
understandable if investors had lost sight of that fact. The bull
market that began six years ago has given investors annual double-
digit returns and more modest price declines than usual. And in the
two years encompassing 1995 and 1996, the S&P 500 Index gained more
than 50%. This Pollyanna environment has tracked along with a
sustained economic recovery, now in its seventh year, that has been
marked by moderate growth, low interest rates and tame inflation.
But recently, many have begun to wonder about this bull market.
Since reaching new highs in early March, the Dow Jones Industrial
Average tumbled by more than 7% at the end of March and wiped out
nearly all it had gained since the start of the year. It was the
worst decline that the market had seen since 1990. In early April,
the Dow was down by 9.8%, within shouting distance of a 10%
correction. By the end of the month, it had bounced back into record
territory again.
As the market continues to fret over interest rates and inflation,
investors should be prepared for more volatility. It also makes
sense to do something we've always advocated: set realistic
expectations. Keep in mind that the stock market's historic yearly
average has been about 10%, not the 20%-plus annual average of the
last two years or even the 16% annual average over the last 10
years. Remember that the kind of market volatility we've seen lately
is more like the way the market really works. Fluctuations go with
the territory. And market corrections can be healthy, serving to
bring inflated stock prices down to more reasonable levels, thereby
reducing some of the market's risk.
Use this time of heightened volatility as an opportunity to review
your portfolio's asset allocations with your investment
professional. Make sure that your investment strategies reflect your
individual time horizons, objectives and risk tolerance, and that
they are based upon your needs. Despite turbulence, one thing
remains constant. A well-constructed plan and a cool head can be the
best tools for reaching your financial goals.
Sincerely,
/S/ EDWARD J. BOUDREAU, JR.
EDWARD J. BOUDREAU, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER
A 1 1/4" x 1" photo of Edward J. Boudreau Jr., Chairman and Chief
Executive Officer, flush right, next to second paragraph.
BY BARRY GORDON AND MARC KLEE, CO-PORTFOLIO MANAGERS
John Hancock
Global Technology Fund
Technology stocks post slight gains as investors
worry about future growth
Technology stocks posted only modest gains over the past six months
and once again lived up to their volatile reputation. Economic
uncertainty and higher interest rates were the main culprits as
investors worried about what effect these factors would have on
technology companies' earnings. The strengthening U.S. dollar also
acted as a drag, since many technology companies derive more than
half of their sales from overseas markets. A strong dollar not only
makes U.S. products more expensive for overseas buyers, but also
causes a decline in U.S. company profits when foreign- denominated
earnings are converted back into dollars.
The difficult six-month stretch was complicated by an about-face in
investor preferences. Once the darlings of investors seeking hyper-
fast and accelerating earnings growth, tech stocks were shunned by
investors who turned instead to companies offering more stable,
predictable earnings growth. Despite changing perceptions, the
reality was that technology companies remained among the fastest-
growing, and still continue to exceed most earnings estimates. But
with economic and interest-rate uncertainty lingering over the stock
market, investors began to balk at paying the high valuations tech
stocks commanded. As a result, many technology stocks that once
traded at high price to earnings multiples (a measure of how much
you're paying for earnings), experienced a sharp decline from
January through mid-April. The period ended with a rebound prompted
by signs of continued strong tech company earnings, a strong economy
and waning fears of higher interest rates.
"...tech
stocks were
shunned by
investors..."
A 2 1/4"a x 3 3/4" photo of the Global Technology team.
Caption below reads: "Global Technology Fund Management
team (l-r) Barry Gordon, Marc Klee and Alan Lowenstein."
"...our
stake in
networking
stocks cost
us during
the period."
Chart with heading "Top Five Common Stock Holdings" at top
left hand column. The chart lists five holdings:
1) Intel 5.1% 2) Computer Associates International 4.9%
3) Microsoft 4.6%; 4) UAL Corp. 4.3% 5) United Technologies 3.6%.
A footnote below reads "As a percentage of net assets on
April 30, 1997."
Performance review
For the six months ended April 30, 1997, the Fund's Class A and
Class B shares posted total returns of 1.78% and 1.42%,
respectively, at net asset value. That was slightly better than the
1.19% return for the average science and technology fund, according
to Lipper Analytical Services, Inc.1 Please see pages six and seven
for longer-term performance information.
Our increasing focus on high-quality, larger-company stocks with
brand name products and services worked well during this period.
From personal computers for home use to sophisticated business
systems for corporate use, the array and complexity of technology
products has become quite overwhelming. It's no wonder that buyers -
- - be they consumers or corporate management information systems
experts -- are confused. In our view, this confusion bodes well for
brand-name technology providers that offer quality, one-stop-
shopping solutions and logical upgrade paths. That's why we
continued to build the Fund's stake in companies such as software
developer and marketer Microsoft, whose operating systems are now
found in 90% of personal computers today. Its stock soared to about
$121 at the end of the period, from roughly $68 six months earlier.
Another large-company favorite was Intel, the leading maker of
microprocessors, the silicon chips that are the brains of personal
computers. Intel's stock rose more than 39% during the period.
Over the last six months we increased our holdings in other
companies involved with the manufacture and testing of semiconductor
chips to about 20% of assets. That move was based on our view that
the semiconductor sector was showing signs of improvement, which is
in fact what occurred. Semiconductor-related holdings including
Analog Devices, Applied Materials, KLA Instruments, LSI Logic,
Micron Technology and VLSI Technology all posted sizable gains.
We also profited from our holdings in aviation stocks AMR Corp., the
parent company of American Airlines, and UAL, the parent of United
Airlines. We had retained both from our merger with John Hancock
National Aviation & Technology Fund. These stocks rebounded on the
strength of the economy, lower costs and better profits.
Our stake in networking stocks cost us during the period. Demand for
networking products and services showed some signs of leveling off
along with increased competition, and that prompted a sell-off in
networking stocks. With questions about future demand still looming
over networking companies, we sold some of our holdings in this
area. One exception was Cisco Systems, the world's number one
supplier of internetworking products that link local area and wide
area networks (LANs and WANs).
Table entitled "Scorecard" at bottom of left hand column. The header
for the left column is "Investment"; the header for the right hand
column is "Recent performance...and what's behind the numbers." The
first listing is Microsoft followed by an up arrow and the phrase
"Strong demand for Office 97." The second listing is "Intel"
followed by an up arrow and the phrase "Dominant player in
semiconductor chips." The third listing is "Computer Associates"
followed by a down arrow and the phrase "Stumbles on marketing
problems in Europe." Footnote below reads: 'See "Schedule of
Investments." Investment holdings are subject to change."
Bar chart with heading "Fund Performance" at top of left hand
column. Under the heading is the footnote "For the six months ended
June 30, 1997." The chart is scaled in increments of 1% from top to
bottom, with 2% at the top and 0% at the bottom. Within the chart,
there are three solid bars. The first represents the 1.78% total
return for John Hancock Global Technology Fund: Class A. The
second represents the 1.42% total return for the John Hancock
Global Technology Fund: Class B. The third represents the 1.19%
total return for the average science and technology fund. A footnote
below reads: "Total returns for John Hancock Global Technology Fund
are at net asset value all distributions reinvested. The average
science and technology fund is tracked by Lipper Analytical
Services, Inc.(1) See following two pages for historical performance
information."
Focus on software
Software remained a dominant focus throughout the period at about
24% of assets. We believe it is becoming increasingly important as
corporations need more information and control of their various
hardware systems. In addition to Microsoft, we continued to favor
companies such as Oracle, the world's largest maker of database
management systems which let users create, retrieve and sort
information in computer files. However, as Oracle hit our targeted
value levels, it was essentially eliminated by the end of the
period. While Oracle showed impressive gains during the period,
other software companies proved less successful. Computer
Associates, which designs software that allows users to manage their
data processing more effectively, stumbled on marketing difficulties
in Europe. We viewed those problems as temporary and saw the stock
rebound sharply in April. The stocks of companies that make software
to help engineers design products including industry leaders
Parametric Technology, Synopsys and Cadance Design Systems also
experienced difficulties. However, we are strong believers in this
area of software with demand for products showing no signs of
leveling off.
Outlook
Our view is that technology companies' growth may continue to slow
from an extraordinarily fast pace to a "merely" fast pace over the
next six to 12 months. Nonetheless, we believe that the tech sector
should continue to post growth rates much faster than the economy as
a whole. What's more, the recent correction means that many fast-
growing tech company stocks can be had for cheaper prices than they
were six months ago. That makes us optimistic about tech stocks'
long-term prospects, although we do foresee continued volatility
over the near term. As we've often said in the past, tech stocks may
be too volatile for some investors with a short-term horizon. In our
view, the best way to participate in their long-term growth
prospects is to keep a long-term investment perspective.
"...we do
foresee
continued
volatility over
the near
term."
- --------------------------------------------------------------------
This commentary reflects the views of the portfolio managers through
the end of the Fund's period discussed in this report. Of course,
the managers' views are subject to change as market and other
conditions warrant.
International investing involves special risks such as political and
currency risks and differences in accounting standards and financial
reporting. Sector investing is subject to greater risks than the
market as a whole.
1Figures from Lipper Analytical Services, Inc. include reinvested
dividends and do not take into account sales charges. Actual load-
adjusted performance is lower.
A LOOK AT PERFORMANCE
The tables on the right show the cumulative total returns and the
average annual total returns for the John Hancock Global Technology
Fund. Total return is a performance measure that equals the sum of
all income and capital gains distributions, assuming reinvestment of
these distributions and the change in the price of the Fund's net
asset value per share. Performance figures include the maximum
applicable sales charge of 5% for Class A shares. The effect of the
maximum contingent-deferred sales charge for Class B shares (maximum
5% and declining to 0% over six years) is included in Class B
performance. Performance is affected by a 12b-1 plan, which
commenced on January 1, 1994 for both Class A and Class B shares.
Different sales charge schedules for Class A shares were in effect
prior to March 1987 and are not reflected in the performance
information. Remember that all figures represent past performance
and are no guarantee of how the Fund will perform in the future.
Also, keep in mind that the total return and share price of the
Fund's investments will fluctuate. As a result, your Fund's shares
may be worth more or less than their original cost, depending on
when you sell them.
CUMULATIVE TOTAL RETURNS
For the period ended March 31, 1997
ONE FIVE MOST RECENT
YEAR YEARS TEN YEARS
--------- --------- ----------
John Hancock
Global Technology Fund:
Class A (2.95%) 117.51% 151.62%
John Hancock
Global Technology Fund:
Class B(1) (3.58%) 53.72% N/A
AVERAGE ANNUAL TOTAL RETURNS
For the period ended March 31, 1997
ONE FIVE MOST RECENT
YEAR YEARS TEN YEARS
--------- --------- ----------
John Hancock
Global Technology Fund:
Class A (2.95%) 16.81% 9.67%
John Hancock
Global Technology Fund:
Class B(1) (3.58%) 15.26% N/A
Notes to Performance
(1) Class B shares started on January 3, 1994.
WHAT HAPPENED TO A $10,000 INVESTMENT...
The charts on the right show how much a $10,000 investment in the
John Hancock Global Technology Fund would be worth on April 30,
1997, assuming you had been invested and have reinvested all
distributions for the entire time periods presented. For comparison,
we've shown the same $10,000 investment in the Standard & Poor's 500
Stock Index -- an unmanaged index that includes 500 widely traded
common stocks and is used often as a measure of stock market
performance.
Global Technology Fund
Class A shares
Line chart with the heading Global Technology Fund: Class A, representing the
growth of a hypothetical $10,000 investment over the life of the fund. Within
the chart are three lines. The first line represents the value of the Standard
& Poor's 500 Stock Index and is equal to $44,959 as of April 30, 1997. The
second line represents the value of the hypothetical $10,000 investment made
in the Global Technology Fund on October 31, 1986, before sales charge, and is
equal to $36,445 as of April 30, 1997. The third line represents the Global
Technology Fund, after sales charge, and is equal to $34,623 as of April 30,
1997.
Global Technology Fund
Class B shares
Line chart with the heading Global Technology Fund: Class B, representing the
growth of a hypothetical $10,000 investment over the life of the fund. Within
the chart are three lines. The first line represents the value of the Standard
& Poor's 500 Stock Index and is equal to $18,641 as of April 30, 1997.
The second line represents the value of the Global Technology Fund, before
sales charge, and is equal to $16,980 as of April 30, 1997. The third line
represents the value of the hypothetical $10,000 investment made in the Global
Technology Fund, after sales charge, on January 3, 1994, and is equal to
$16,680 as of April 30, 1997.
FINANCIAL STATEMENTS
John Hancock Funds - Global Technology Fund
The Statement of Assets and Liabilities is the Fund's balance sheet
and shows the value of what the Fund owns, is due and owes on
April 30, 1997. You'll also find the net asset value and the maximum
offering price per share as of that date.
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
April 30, 1997 (Unaudited)
- -----------------------------------------------------------------------------
<S> <C>
Assets:
Investments at value - Note C:
Common stocks, preferred stocks, and warrants
(cost - $126,621,871) $183,495,633
Bonds (cost - $940,033) 966,316
Short-term investments (cost - $27,075,000) 27,075,000
Corporate savings account 14,081
------------
211,551,030
Receivable for shares sold 335,060
Receivable for investments sold 1,132,186
Dividends receivable 3,500
Interest receivable 18,296
Other assets 11,949
------------
Total Assets 213,052,021
- -----------------------------------------------------------------------------
Liabilities:
Payable for shares purchased 38,492
Payable for investments purchased 1,395,168
Payable to John Hancock Advisers, Inc.
and affiliates - Note B 212,355
Accounts payable and accrued expenses 59,539
------------
Total Liabilities 1,705,554
- -----------------------------------------------------------------------------
Net Assets:
Capital paid-in 138,218,077
Accumulated net realized gain on investments
and written options 17,381,076
Net unrealized appreciation of investments 56,900,805
Accumulated net investment loss ( 1,153,491)
------------
Net Assets $211,346,467
=============================================================================
Net Asset Value Per Share:
(Based on net asset values and shares of beneficial
interest outstanding - 200 million shares authorized
with $0.20 per share par value, respectively)
Class A - $159,012,315 / 6,337,773 $ 25.09
=============================================================================
Class B - $52,334,152 / 2,144,870 $ 24.40
=============================================================================
Maximum Offering Price Per Share*
Class A - ($25.09 x 105.26%) $ 26.41
=============================================================================
* On single retail sales of less than $50,000. On sales of $50,000 or more
and on group sales the offering price is reduced.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
The Statement of Operations summarizes the Fund's investment
income earned and expenses incurred in operating the Fund. It
also shows net gains (losses) for the period stated.
Statement of Operations
Six months ended April 30, 1997 (Unaudited)
- ------------------------------------------------------------------------
<S> <C>
Investment Income:
Interest $ 657,075
Dividends (net of foreign withholding taxes of $775) 108,525
----------
765,600
----------
Expenses:
Investment management fee - Note B 887,398
Distribution and service fee - Note B
Class A 254,372
Class B 269,171
Transfer agent fee - Note B 323,100
Registration and filing fees 38,275
Custodian fee 27,349
Administration fee - Note B 49,589
Printing 16,412
Auditing fee 13,885
Miscellaneous 13,147
Trustees' fees 11,234
Legal fees 3,210
----------
Total Expenses 1,907,142
- ------------------------------------------------------------------------
Net Investment Loss ( 1,141,542)
- ------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
and Written Options:
Net realized gain on investments sold 17,368,401
Net realized gain on written options 77,847
Change in net unrealized appreciation/depreciation
of investments (11,866,372)
----------
Net Realized and Unrealized Gain
on Investments 5,579,876
- ------------------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations $4,438,334
========================================================================
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Statement of Changes in Net Assets
- -------------------------------------------------------------------------------------------------------------------
PERIOD FROM SIX MONTHS ENDED
YEAR ENDED JANUARY 1, 1996 TO APRIL 30, 1997
DECEMBER 31, 1995 OCTOBER 31, 1996(1) (UNAUDITED)
----------------- ------------------- --------------
<S> <C> <C> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment loss ($ 1,309,629) ($ 1,438,749) ($ 1,141,542)
Net realized gain on investments sold and written options 13,461,306 10,184,343 17,446,248
Change in net unrealized appreciation/depreciation
of investments 13,067,131 2,282,873 ( 11,866,372)
------------ ------------ ------------
Net Increase in Net Assets Resulting from Operations 25,218,808 11,028,467 4,438,334
------------ ------------ ------------
Distributions to Shareholders:
Distributions from net realized gain on investments sold
Class A - ($1.6414, none and $1.2268 per share,
respectively) ( 9,890,377) -- ( 7,748,777)
Class B - ($1.6414, none and $1.2268 per share,
respectively) ( 2,261,154) -- ( 2,500,738)
------------ ------------ ------------
Total Distributions to Shareholders ( 12,151,531) -- ( 10,249,515)
------------ ------------ ------------
From Fund Share Transactions - Net* 116,170,259 15,175,733 198,610
------------ ------------ ------------
Net Assets:
Beginning of period 61,517,302 190,754,838 216,959,038
------------ ------------ ------------
End of period (including accumulated net investment
loss of none, $11,949, and $1,153,491, respectively) $190,754,838 $216,959,038 $211,346,467
============ ============ ============
* Analysis of Fund Share Transactions:
</TABLE>
<TABLE>
<CAPTION>
PERIOD FROM SIX MONTHS ENDED
YEAR ENDED JANUARY 1, 1996 TO APRIL 30, 1997
DECEMBER 31, 1995 OCTOBER 31, 1996(1) (UNAUDITED)
---------------------- ---------------------- ----------------------
SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Shares sold 3,475,266 $84,847,624 5,635,772 $142,521,461 6,263,572 $165,526,004
Shares issued in reorganization - Note D 2,736,868 75,930,600 -- -- -- --
Shares issued to shareholders
in reinvestment of distributions 326,658 8,057,488 -- -- 234,838 6,232,586
--------- ---------- --------- ------------ --------- ------------
6,538,792 168,835,712 5,635,772 142,521,461 6,498,410 171,758,590
Less shares repurchased (3,139,612) ( 76,326,307) (5,524,587) ( 140,513,358) (6,596,486) ( 174,843,268)
--------- ----------- --------- ------------ ---------- ------------
Net Increase (Decrease) 3,399,180 $92,509,405 111,185 $ 2,008,103 ( 98,076) ($ 3,084,678)
========= =========== ========= ============ ========== ============
CLASS B
Shares sold 2,136,672 $52,751,817 1,386,160 $ 33,871,394 547,016 $ 13,974,118
Shares issued in reorganization - Note D 21,055 576,404 -- -- -- --
Shares issued to shareholders
in reinvestment of distributions 83,607 2,026,634 -- -- 84,277 2,180,266
--------- ---------- --------- ------------ --------- ------------
2,241,334 55,354,855 1,386,160 33,871,394 631,293 16,154,384
Less shares repurchased (1,283,970) ( 31,694,001) ( 849,036) ( 20,703,764) ( 508,174) ( 12,871,096)
--------- ---------- --------- ------------ --------- ------------
Net Increase 957,364 $23,660,854 537,124 $ 13,167,630 123,119 $ 3,283,288
========= =========== ========= ============ ========== ============
(1) Effective October 31, 1996, the fiscal period end changed from December 31 to October 31.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout the period indicated,
investment returns, key ratios and supplemental data are listed as follows:
- -----------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, PERIOD FROM SIX MONTHS ENDED
---------------------------------------------- JANUARY 1, 1996 TO APRIL 30, 1997
1992 1993 1994 1995 OCTOBER 31, 1996(7) (UNAUDITED)
------ ------ ------ ------ ------------------- --------------
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Per Share Operating Performance
Net Asset Value, Beginning of Period $ 15.60 $ 14.94 $ 17.45 $ 17.84 $ 24.51 $ 25.79
------- ------- ------- -------- -------- --------
Net Investment Loss ( 0.15)(2) ( 0.21) ( 0.22)(1) ( 0.22)(1,2) ( 0.14)(1) ( 0.11)(1)
Net Realized and Unrealized Gain
on Investments, Options and Foreign
Currency Transactions 1.00 4.92 1.87 8.53 1.42 0.64
------- ------- ------- -------- -------- --------
Total from Investment Operations 0.85 4.71 1.65 8.31 1.28 0.53
------- ------- ------- -------- -------- --------
Less Distributions:
Distributions from Net Realized Gain
on Investments Sold, Options and
Foreign Currency Transactions ( 1.51) ( 2.20) ( 1.26) ( 1.64) -- ( 1.23)
------- ------- ------- -------- -------- --------
Net Asset Value, End of Period $ 14.94 $ 17.45 $ 17.84 $ 24.51 $ 25.79 $ 25.09
======= ======= ======= ======== ======== ========
Total Investment Return at
Net Asset Value (6) 5.70% 32.06% 9.62% 46.53% 5.22%(9) 1.78%(9)
Total Adjusted Investment
Return at Net Asset Value (6) 5.53%(3) -- -- 46.41%(3) -- --
Ratios and Supplemental Data
Net Assets, End of Period
(000s omitted) $32,094 $41,749 $52,193 $155,001 $166,010 $159,012
Ratio of Expenses to
Average Net Assets 2.05%(2) 2.10% 2.16% 1.67%(2) 1.57%(8) 1.54%(8)
Ratio of Net Investment Loss
to Average Net Assets ( 0.88%)(2) ( 1.49%) ( 1.25%) ( 0.89%)(2) ( 0.68%)(8) ( 0.85%)(8)
Portfolio Turnover Rate 76% 86% 67% 70% 64% 46%
Average Brokerage
Commission Rate (10) N/A N/A N/A N/A $ 0.0685 $0.0627
The Financial Highlights summarizes the impact of the following factors on a single share for the period indicated:
net investment income, gains (losses), dividends and total investment return of the Fund. It shows how the Fund's
net asset value for a share has changed since the end of the previous period. Additionally, important relationships
between some items presented in the financial statements are expressed in ratio form.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Financial Highlights (continued)
- -------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, PERIOD FROM SIX MONTHS ENDED
-------------------- JANUARY 1, 1996 TO APRIL 30, 1997
1994 1995 OCTOBER 31, 1996(7) (UNAUDITED)
---- ---- ------------------- ----------
<S> <C> <C> <C> <C>
CLASS B(4)
Per Share Operating Performance
Net Asset Value, Beginning of Period $ 17.24(5) $ 17.68 $ 24.08 $ 25.20
------- ------- ------- -------
Net Investment Loss (1) ( 0.35) ( 0.39)(2) ( 0.28) ( 0.20)
Net Realized and Unrealized Gain on Investments and Options 2.05 8.43 1.40 0.63
------- ------- ------- -------
Total from Investment Operations 1.70 8.04 1.12 0.43
------- ------- ------- -------
Less Distributions:
Distributions from Net Realized Gain on Investments Sold and Options ( 1.26) ( 1.64) -- ( 1.23)
------- ------- ------- -------
Net Asset Value, End of Period $ 17.68 $ 24.08 $ 25.20 $ 24.40
======= ======= ======= =======
Total Investment Return at Net Asset Value (6) 10.02%(9) 45.42% 4.65%(9) 1.42%(9)
Total Adjusted Investment Return at Net Asset Value (6) -- 45.30%(3) -- --
Ratios and Supplemental Data
Net Assets, End of Period (000s omitted) $ 9,324 $35,754 $50,949 $52,334
Ratio of Expenses to Average Net Assets 2.90%(8) 2.41%(2) 2.27%(8) 2.24%(8)
Ratio of Net Investment Loss to Average Net Assets ( 1.98%)(8) ( 1.62%)(2) ( 1.38%)(8) ( 1.56%)(8)
Portfolio Turnover Rate 67% 70% 64% 46%
Average Brokerage Commission Rate (10) N/A N/A $0.0685 $0.0627
(1) Based on the average of the shares outstanding at the end of each month.
(2) Reflects voluntary fee reductions and expense limitations in effect during the years ended December 31, 1995,
and 1992, respectively. As a result of such fee reductions, expenses of Class A and Class B shares of the
Fund for 1995 reflect reductions of $0.02 and $0.03 per share, respectively. Absent such reductions, for
1995, the ratio of expenses to average net assets would have been 1.79% and 2.53% for Class A and Class B
shares, respectively and the ratio of net investment income to average net assets would have been (1.01%) and
(1.74%) for Class A and Class B shares, respectively. As a result of such limitations, expenses of the Fund
for 1992 reflect reductions of $0.03 per share. Absent such limitations, for 1992, the ratio of expenses to
average net assets would have been 2.22% and the ratio of net investment income to average net assets would
have been (1.05%).
(3) An estimated total return calculation which takes into consideration fees and expenses waived or borne by the
Adviser during the periods shown.
(4) Class B shares commenced operations on January 3, 1994.
(5) Initial price to commence operations.
(6) Assumes dividend reinvestment and does not reflect the effect of sales charge.
(7) Effective October 31, 1996 the fiscal period changed from December 31 to October 31.
(8) Annualized.
(9) Not annualized.
(10) Per portfolio share traded. Required for fiscal years that began September 1, 1995 or later.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
Schedule of Investments
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------------------------------
The Schedule of Investments is a complete list of all securities owned by the Global Technology Fund on
April 30, 1997. It's divided into five main categories: common stocks, preferred stocks, warrants, bonds
and short-term investments. The stocks, warrants and bonds are further broken down by industry group.
Short-term investments, which represent the Fund's "cash" position, are listed last.
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C> <C>
COMMON STOCKS
Aerospace / Aircraft (3.58%)
United Technologies Corp. 100,000 $ 7,562,500
------------
Business Services - Misc. (0.04%)
Forrester Research, Inc.* 5,000 91,250
------------
Computer - Graphics (0.68%)
S3, Inc.* 150,000 1,434,375
------------
Computer - Integrated Systems (0.05%)
Oracle Corp.* 3,000 119,250
------------
Computer - Local Networks (3.04%)
Ascend Communications, Inc.* 50,000 2,287,500
Cisco Systems, Inc.* 80,000 4,140,000
------------
6,427,500
------------
Computer - Memory Devices (7.52%)
EMC Corp.* 150,000 5,456,250
HMT Technology Corp.* 110,000 1,210,000
Network Appliance, Inc.* 48,700 1,418,387
Read-Rite Corp.* 80,000 2,070,000
Seagate Technology, Inc.* 125,000 5,734,375
------------
15,889,012
------------
Computer - Mini / Macro (6.03%)
Compaq Computer Corp.* 40,000 3,415,000
Gateway 2000, Inc.* 75,000 4,115,625
Quantum Corp.* 125,000 5,210,937
------------
12,741,562
------------
Computer - Peripheral Equipment (3.75%)
Accent Color Sciences, Inc.* 80,000 530,000
Adaptec, Inc.* 200,000 7,400,000
------------
7,930,000
------------
Computer - Services (3.41%)
America Online, Inc.* 100,000 4,512,500
Computer Sciences Corp.* 10,000 625,000
E* TRADE Group, Inc.* 100,000 1,500,000
Mastech Corp.* 50,000 575,000
------------
7,212,500
------------
Computer - Software (23.86%)
BEA Systems, Inc.* 150,000 900,000
Business Objects S.A., American
Depositary Receipts (ADR) (France)* 66,000 594,000
Cadence Design Systems, Inc.* 125,000 4,000,000
Computer Associates International, Inc. 200,000 10,400,000
Electronics for Imaging, Inc.* 120,000 4,710,000
HNC Software, Inc.* 75,000 1,987,500
Inso Corp.* 13,500 283,500
IONA Technologies PLC (ADR) (Ireland)* 3,000 43,500
Microsoft Corp.* 80,000 9,720,000
Netscape Communications Corp.* 8,000 216,500
Novadigm, Inc.* 160,000 660,000
Parametric Technology Corp.* 150,000 6,787,500
Puma Technology, Inc.* 50,000 381,250
Remedy Corp.* 50,000 1,618,750
Saville Systems Ireland PLC (ADR)
(Ireland)* 45,000 1,850,625
SEEC, Inc.* 50,000 581,250
Synopsys, Inc.* 90,000 2,868,750
Verity, Inc.* 50,000 278,125
Viasoft, Inc.* 60,000 2,550,000
------------
50,431,250
------------
Electronics (19.93%)
Advanced Micro Devices, Inc.* 125,000 5,312,500
Analog Devices, Inc.* 166,666 4,458,317
Applied Materials, Inc.* 85,000 4,664,375
Credence Systems Corp.* 100,000 1,587,500
Intel Corp. 70,000 10,718,750
KLA Instruments Corp.* 80,000 3,560,000
LSI Logic Corp.* 125,000 4,781,250
Micron Technology, Inc. 110,000 3,877,500
Ramtron International Corp.* 200,000 1,175,000
VLSI Technology, Inc.* 100,000 1,987,500
------------
42,122,692
------------
Instruments - Scientific (1.96%)
Thermo Electron Corp.* 120,000 4,140,000
------------
Protection - Safety Equipment & Services (0.12%)
Viisage Technology, Inc.* 27,000 246,375
------------
Telecommunications (5.45%)
Access Beyond, Inc.* 150,000 581,250
Cascade Communications Corp.* 70,000 2,205,000
Globecomm Systems, Inc.* (R) 37,510 1,050,280
Intelect Communications System* 247,500 394,441
Loral Space & Communications System* 100,000 1,462,500
Newbridge Networks Corp. (Canada)* 60,000 1,905,000
N2K, Inc.* (R) 671,860 436,709
PairGain Technologies, Inc.* 60,000 1,560,000
Primus Telecommunications, Inc.* (R) 236,670 1,917,027
------------
11,512,207
------------
Transportation (6.87%)
AMR Corp.* 60,000 5,587,500
UAL Corp.* 120,000 8,925,000
------------
14,512,500
------------
TOTAL COMMON STOCKS
(Cost $125,607,871) ( 86.29%) 182,372,973
-------- ------------
PREFERRED STOCKS
Telecommunication (0.47%)
Globecomm Systems, Inc. (R) 35,720 1,000,160
------------
TOTAL PREFERRED STOCKS
(Cost $1,000,000) ( 0.47%) 1,000,160
-------- ------------
WARRANTS
Electronics - Components (0.06%)
Ibis Technology Corp.* 70,000 122,500
------------
TOTAL WARRANTS
(Cost $14,000) ( 0.06%) 122,500
-------- ------------
TOTAL COMMON STOCKS,
PREFERRED STOCKS
AND WARRANTS
(Cost $126,621,871) ( 86.82%) 183,495,633
-------- ------------
<CAPTION>
PAR VALUE
INTEREST S&P (000s MARKET
RATE RATING OMITTED) VALUE
-------- ------ -------- ------
<S> <C> <C> <C> <C>
BONDS
Aerospace / Aircraft (0.09%)
Aeronca, Inc.,
Conv Sub Deb 01-31-00 (R) 12.50% NR $252 $ 189,000
------------
Transportation (0.37%)
Northwest Airlines, Inc.
Sr Note 12-31-00 12.09 BB- 256 264,186
Piedmont Aviation, Inc.,
Equip Tr Cert 1988
Ser F 03-28-09 10.35 B+ 500 513,130
------------
777,316
------------
TOTAL BONDS
(Cost $940,033) ( 0.46%) 966,316
------ ------------
SHORT-TERM INVESTMENTS
Joint Repurchase Agreement (9.03%)
Investment in a joint repurchase
agreement transaction with
Aubrey G. Lanston & Co. -
Dated 04-30-97, Due
05-01-97 (Secured by U.S.
Treasury Bills, 5.37% thru
5.78% Due 08-21-97 thru
03-05-98, U.S. Treasury
Bonds, 7.125% thru 11.25%
Due 02-15-15 thru
02-15-23, and U.S. Treasury
Notes, 5.125% thru 7.75%,
Due 08-31-98 thru
05-15-05) - Note A 5.38 19,075 19,075,000
------------
Short-Term Notes (3.79%)
Merrill Lynch & Co., Inc.,
Due 05-01-97 5.65 8,000 8,000,000
------------
Corporate Savings Account (0.00%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 4.95% 14,081
------------
TOTAL SHORT-TERM INVESTMENTS ( 12.82) 27,089,081
------ ------------
TOTAL INVESTMENTS (100.10%) $211,551,030
====== ============
NOTES TO SCHEDULE OF INVESTMENTS (UNAUDITED)
(R) Direct placement securities are restricted as to resale. They have
been valued at fair value by the Trustees after consideration of
restrictions as to resale, financial condition and prospects of
the issuer, general market conditions and pertinent information in
accordance with the Fund's By-Laws and the Investment Company Act
of 1940, as amended. The Fund has limited rights to registration
under the Securities Act of 1933 with respect to these restricted
securities. Additional information on each restricted security is
as follows:
<CAPTION>
MARKET
VALUE AS A
PERCENTAGE MARKET
ACQUISITION ACQUISITION OF FUND'S VALUE AT
SECURITY DATE COST NET ASSETS APRIL 30, 1997
- -------- -------- -------- -------------- ------------------
<S> <C> <C> <C> <C>
Aeronca, Inc. -
Bonds 02-01-96 $240,000 0.09% $189,000
Globecomm Systems, Inc. -
Common Stock 03-30-95 500,001 0.50 1,050,280
Globecomm Systems, Inc. -
Preferred Stock 12-17-96 1,000,000 0.47 1,000,160
N2K, Inc. -
Common Stock 11-14-91 940,604 0.21 436,709
Primus Telecommunications
Group, Inc. - 10-30-95 500,000
Common Stock 01-23-96 240,000 0.91 1,917,027
*Non-income producing security.
NR Not Rated by either Standard & Poor's or Moody's Investors Services.
Parenthetical disclosure of a foreign country in the security description represents
country of foreign issuer; however, security is U.S. dollar denominated.
The percentage shown for each investment category is the total value of that category
as a percentage of the net assets of the fund.
See notes to financial statements.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A --
ACCOUNTING POLICIES
John Hancock Series Trust (the "Trust") is a diversified open-end
management investment company, registered under the Investment
Company Act of 1940. The Trust consists of two series: John Hancock
Global Technology Fund (the "Fund") and John Hancock Emerging Growth
Fund. The other series of the Trust is reported in separate financial
statements. Until December 2, 1996 the Fund was a series of John
Hancock Technology Series, Inc. The investment objective of the Fund
is to achieve long-term capital growth by investing principally in
equity securities of foreign and U.S. companies that rely extensively
on technology in their product development or operations.
The Trustees have authorized the issuance of multiple classes of
shares of the Fund, designated as Class A and Class B shares. The
shares of each class represent an interest in the same portfolio of
investments of the Fund and have equal rights to voting, redemptions,
dividends and liquidation, except that certain expenses, subject to
the approval of the Trustees, may be applied differently to each
class of shares in accordance with current regulations of the
Securities and Exchange Commission and the Internal Revenue Service.
Shareholders of a class which bears distribution and service expenses
under terms of a distribution plan have exclusive voting rights to
that distribution plan.
Significant accounting policies of the Fund are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio are
valued on the basis of market quotations, valuations provided by
independent pricing services or at fair value as determined in good
faith in accordance with procedures approved by the Trustees. Short-
term debt investments maturing within 60 days are valued at amortized
cost which approximates market value. All portfolio transactions
initially expressed in terms of foreign currencies have been
translated into U.S. dollars as described in "Foreign Currency
Translation" below.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by
the Securities and Exchange Commission, the Fund, along with other
registered investment companies having a management contract with
John Hancock Advisers, Inc. (the "Adviser"), a wholly owned
subsidiary of The Berkeley Financial Group, may participate in a
joint repurchase agreement. Aggregate cash balances are invested in
one or more repurchase agreements, whose underlying securities are
obligations of the U.S. government and/or its agencies. The Fund's
custodian bank receives delivery of the underlying securities for the
joint account on the Fund's behalf. The Adviser is responsible for
ensuring that the agreement is fully collateralized at all times.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of
the date of purchase, sale or maturity. Net realized gains and losses
on sales of investments are determined on the identified cost basis.
Capital gains realized on some foreign securities are subject to
foreign taxes and are accrued, as applicable.
FEDERAL INCOME TAXES The Fund's policy is to comply with the
requirements of the Internal Revenue Code that are applicable to
regulated investment companies and to distribute all of its taxable
income, including any net realized gain on investment, to its
shareholders. Therefore, no federal income tax provision is required.
For federal income tax purposes, net currency exchange gains and
losses from sales of foreign debt securities must be treated as
ordinary income even though such items are gains and losses for
accounting purposes.
DIVIDENDS, INTEREST AND DISTRIBUTIONS Dividend income on investment
securities is recorded on the ex-dividend date. Interest income on
investment securities is recorded on the accrual basis.
The Fund records all distributions to shareholders from net
investment income and realized gains on the ex-dividend date. Such
distributions are determined in conformity with income tax
regulations, which may differ from generally accepted accounting
principles. Dividends paid by the Fund with respect to each class of
shares will be calculated in the same manner, at the same time and
will be in the same amount, except for the effect of expenses that
may be applied differently to each class.
CLASS ALLOCATIONS Income, common expenses and realized and unrealized
gains (losses) are calculated at the Fund level and allocated daily
to each class of shares based on the appropriate net assets of the
respective classes. Distribution and service fees if any, are
calculated daily at the class level based on the appropriate net
assets of each class and the specific expense rate(s) applicable to
each class.
EXPENSES The majority of the expenses of the Company are directly
identifiable to an individual fund. Expenses which are not
identifiable to a specific fund are allocated in such a manner as
deemed equitable, taking into consideration, among other things, the
nature and type of expense and the relative sizes of the funds.
DISCOUNT ON SECURITIES The Fund accretes discount from par value on
securities purchased from either the date of issue or the date of
purchase over the life of the security, as required by the Internal
Revenue Code.
USE OF ESTIMATES The preparation of these financial statements in
accordance with generally accepted accounting principles incorporates
estimates made by management in determining the reported amounts of
assets, liabilities, revenues and expenses of the Fund. Actual
results could differ from these estimates.
BANK BORROWINGS The Fund is permitted to have bank borrowings for
temporary or emergency purposes, including the meeting of redemption
requests that otherwise might require the untimely disposition of
securities. The Fund had no borrowing activity for the period ended
April 30, 1997.
OPTIONS Listed options will be valued at the last quoted sales price
on the exchange on which they are primarily traded. Purchased put or
call over-the-counter options will be valued at the average of the
"bid" prices obtained from two independent brokers. Written put or
call over-the-counter options will be valued at the average of the
"asked" prices obtained from two independent brokers. Upon the
writing of a call or put option, an amount equal to the premium
received by the Fund will be included in the Statement of Assets and
Liabilities as an asset and corresponding liability. The amount of
the liability will be subsequently marked to market to reflect the
current market value of the written option.
The Fund may use option contracts to manage its exposure to the stock
market. Writing puts and buying calls will tend to increase the
Fund's exposure to the underlying instrument and buying puts and
writing calls will tend to decrease the Fund's exposure to the
underlying instrument, or hedge other Fund investments.
The maximum exposure to loss for any purchased options will be
limited to the premium initially paid for the option. In all other
cases, the face (or "notional") amount of each contract at value will
reflect the maximum exposure of the Fund in these contracts, but the
actual exposure will be limited to the change in value of the
contract over the period the contract remains open.
Risks may also arise if counterparties do not perform under the
contract's terms, or if the Fund is unable to offset a contract with
a counterparty on a timely basis ("liquidity risk"). Exchange-traded
options have minimal credit risk as the exchanges act as
counterparties to each transaction, and only present liquidity risk
in highly unusual market conditions. To minimize credit and liquidity
risks in over-the-counter option contracts, the Fund will
continuously monitor the creditworthiness of all its counterparties.
At any particular time, except for purchased options, market or
credit risk may involve amounts in excess of those reflected in the
Fund's period-end Statement of Assets and Liabilities.
Written option transactions for the period ended April 30, 1997 were
as follows:
WRITTEN CALL OPTIONS
NUMBER OF CONTRACTS PREMIUMS
------------------- --------
Outstanding, Beginning of Period -- $ --
------- ------
Options Written 300 78,750
Options Exercised (300) (78,750)
------- ------
Outstanding, End of Period -- $ --
======= ======
NOTE B --
MANAGEMENT FEE AND
TRANSACTIONS WITH AFFILIATES AND OTHERS
The Adviser is responsible for managing the Fund's investment
business affairs and overseeing the investment activities of the sub-
adviser. The Adviser has a sub-investment management contract with
American Fund Advisors, Inc. (the "Sub-Adviser"), under which the
Sub-Adviser, subject to the review of the Directors and the overall
supervision of the Adviser, provides the Fund with investment
services and advice with respect to investment transactions. Under
the present investment management contract, the Fund pays a monthly
management fee to the Adviser, equivalent on an annual basis, to the
sum of (a) 0.85% of the first $100,000,000 of the Fund's average
daily net asset value and (b) 0.75% of the Fund's average daily net
asset value in excess of $100,000,000. The Adviser pays the Sub-
Adviser a monthly management fee, equivalent on an annual basis, to
the sum of (a) 0.35% of the first $100,000,000 of the Fund's average
daily net asset value and (b) 40% of the investment advisory fee
received by the Adviser on amounts over $100,000,000. The Fund pays a
monthly administrative fee at the rate of $100,000 per annum to the
Adviser for performance of administrative services to the Fund.
The Fund has a distribution agreement with John Hancock Funds, Inc.
("JH Funds"), a wholly owned subsidiary of the Adviser. For the
period ended April 30, 1997, net sales charges received with regard
to sales of Class A shares amounted to $117,894. Out of this amount,
$18,604 was retained and used for printing prospectuses, advertising,
sales literature and other purposes, $68,362 was paid as sales
commissions to unrelated broker-dealers and $30,928 was paid as sales
commissions to sales personnel of John Hancock Distributors, Inc.
("Distributors"), Tucker Anthony, Incorporated ("Tucker Anthony") and
Sutro & Co., Inc. ("Sutro"), all of which are broker-dealers. The
Adviser's indirect parent, John Hancock Mutual Life Insurance Company
("JHMLICo"), is the indirect sole shareholder of Distributors and was
the indirect sole shareholder until November 29, 1996 of John Hancock
Freedom Securities Corporation and its subsidiaries, which include
Tucker Anthony and Sutro.
Class B shares which are redeemed within six years of purchase will
be subject to a contingent-deferred sales charge ("CDSC") at
declining rates beginning at 5.0% of the lesser of the current market
value at the time of redemption or the original purchase cost of the
shares being redeemed. Proceeds from the CDSC are paid to JH Funds
and are used in whole or in part to defray its expenses related to
providing distribution related services to the Fund in connection
with the sale of Class B shares. For the period ended April 30, 1997,
contingent-deferred sales charges paid to JH Funds amounted to
$133,242.
In addition, to reimburse JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted a
Distribution Plan with respect to Class A and Class B pursuant to
Rule 12b-1 under the Investment Company Act of 1940. Accordingly, the
Fund will make payments to JH Funds for distribution and service
expenses, at an annual rate not to exceed 0.30% of Class A average
daily net assets and 1.00% of Class B average daily net assets to
reimburse JH Funds for its distribution and service costs. Up to a
maximum of 0.25% of such payments may be service fees as defined by
the amended Rules of Fair Practice of the National Association of
Securities Dealers. Under the amended Rules of Fair Practice,
curtailment of a portion of the Fund's 12b-1 payments could occur
under certain circumstances.
The Fund has a transfer agent agreement with John Hancock Signature
Services, Inc. ("Signature Services"), an indirect subsidiary of The
Berkeley Financial Group. The Fund pays the transfer agent fee based
on the number of shareholder accounts and certain out-of-pocket
expenses.
Mr. Edward J. Boudreau, Jr., Ms. Anne C. Hodsdon, and Mr. Richard S.
Scipione are trustees and/or officers of the Adviser, and Mr. Barry
J. Gordon is a director and officer of the Sub-Adviser. The
compensation of unaffiliated Directors is borne by the Fund. The
unaffiliated Trustees may elect to defer for tax purposes their
receipt of this compensation under the John Hancock Group of Funds
Deferred Compensation Plan. The Fund makes investments into other
John Hancock funds, as applicable, to cover its liability for the
deferred compensation. Investments to cover the Fund's deferred
compensation liability are recorded on the Fund's books as an other
asset. The deferred compensation liability and the related other
asset are always equal and are marked to market on a periodic basis
to reflect any income earned by the investment as well as any
unrealized gains or losses. At April 30, 1997, the Fund's investments
to cover the deferred compensation liability had unrealized
appreciation of $760.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than
obligations of the U.S. government and its agencies and short-term
securities, during the period ended April 30, 1997, aggregated
$92,587,903 and $111,936,423, respectively. There were no purchases
or sales of obligations of the U.S. government and its agencies
during the period ended April 30, 1997.
The cost of investments owned at April 30, 1997 (excluding the
corporate savings account), for federal income tax purposes was
$127,561,904. Gross unrealized appreciation and depreciation of
investments aggregated $70,941,632 and $14,041,587, respectively,
resulting in net unrealized appreciation of $56,900,045.
NOTE D --
REORGANIZATION
On July 19, 1995, the shareholders of the John Hancock National
Aviation and Technology Fund (JHNA&T) approved of a plan of
reorganization between JHNA&T and the Fund providing for the transfer
of substantially all of the assets and liabilities of JHNA&T to the
Fund in exchange solely for Class A and Class B shares of the Fund.
The acquisition was accounted for a tax free exchange of 2,736,868
Class A shares, and 21,055 Class B shares of John Hancock Global
Technology Fund for the net assets of JHNA&T,which amounted to
$75,930,600 and $576,404 for Class A and Class B shares,
respectively, including $41,806,567 of unrealized appreciation, after
the close of business at July 28, 1995. The aggregate net assets of
the Fund and JHNA&T immediately before the acquisition were
$117,123,530 and $75,507,004 for Class A and Class B, respectively.
The aggregate net assets of the Fund and JHNA&T immediately after the
merger were $193,630,533.
NOTES
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Firm."
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Internet: www.jhancock.com/funds
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Permit No. 75
This report is for the information of shareholders of the John
Hancock Global Technology Fund. It may be used as sales literature
when preceded or accompanied by the current prospectus, which
details charges, investment objectives and operating policies.
A recycled logo in lower left hand corner with caption "Printed on Recycled
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830SA 4/97
6/97
