HANCOCK JOHN CAPITAL SERIES, 485B24E, 1995-04-26

HANCOCK JOHN CAPITAL SERIES
485B24E, 1995-04-26

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As filed with the Securities and Exchange Commission on April 25, 1995.
File No. 2-29502
File No. 811-1677
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A
-------
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 (X)
Pre-Effective Amendment No. ( )
Post-Effective Amendment No. 44 (X)
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 (X)
Amendment No. 23 (X)
-------
John Hancock Capital Series
(Exact Name of Registrant as Specified in Charter)
101 Huntington Avenue
Boston, Massachusetts 02199-7603
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, (617) 375-1700
-------
THOMAS H. DROHAN
Vice President and Secretary
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
(Name and Address of Agent for Service)
-------
It is proposed that this filing will become effective:
( ) Immediately upon filing pursuant to paragraph (b), of Rule 485
(X) On May 1, 1995 pursuant to paragraph (b), of Rule 485
( ) 60 days after filing pursuant to paragraph (a), of Rule 485
( ) On (date) pursuant to paragraph (a) of Rule 485.
-------
<TABLE>
Calculation of Registration Fees Under the Securities Act of 1933
Proposed Maximum Proposed Aggregate
Title of Securities Amount of Shares Offering Price Maximum Amount of
Being Registered Being Registered Per Share Offering Price Registration Fee
<S> <C> <C> <C> <C>
Shares of Beneficial Interest Indefinite* N/A N/A N/A
Shares of Beneficial Interest 257,253 $17.94 $289,998 $100
<FN>
*Registrant continues its election to register an indefinite number of shares of beneficial interest
pursuant to Rule 24f-2 under the Investment Company Act of 1940, as amended.

**Registrant elects to calculate the maximum aggregate offering price pursuant to Rule 24e-2.
4,562,113 shares were redeemed during the fiscal year ended December 31, 1994. 5,356,766 shares were
used for reductions pursuant to Paragraph (c) of Rule 24f-2 during the current fiscal year.
257,253 shares is the amount of redeemed shares used for reduction in this Amendment. Pursuant to
Rule 457(c) under the Securities Act of 1933, the maximum public offering price of $17.94 per share
on April 18, 1995 is the price used as the basis for calculating the registration fee. While no fee
is required for the 241,088 shares, the Registrant has elected to register, for $100, an additional
$289,998 of shares (approximately 16,165 shares at $17.94 per share).
</FN>
</TABLE>

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant has
registered an indefinite number of securities under the Securities Act of 1933.
A Rule 24f-2 Notice for the Registrant's most recent fiscal year on February 23,
1995.

<PAGE>

JOHN HANCOCK CAPITAL SERIES
CROSS REFERENCE SHEET
Pursuant to Rule 495(a) under the Securities Act of 1933

Item Number Form N-1A, Prospectus Caption Statement of Additional
Part A Information Caption
- -------------------------------------------------------------------------------

1 Front Cover Page *

2 Expense Information; The *
Fund's Expenses; Share Price

3 The Fund's Financial *
Highlights; Performance

4 Investment Objectives and *
Policies; Organization and
Management of the Fund

5 Organization and Management *
of the Fund; The Fund's
Expenses; Back Cover Page

6 Organization and Management *
of the Fund; Dividends and
Taxes; How to Buy Shares;
How to Redeem Shares;
Additional Services and
Programs

7 How to Buy Shares; Shares *
Price; Additional Services
and Programs; Alternative
Purchase Arrangements; The
Fund's Expenses; Back Cover
Page

8 How to Redeem Shares *

9 Not Applicable *

10 * Front Cover Page

11 * Table of Contents

12 * Organization of the Fund

13 * Investment Objectives
and Policies; Certain
Investment Practices;
Investment Restrictions

14 * Those Responsible for
Management

15 * Those Responsible for
Management

16 * Investment Advisory;
Subadvisory and Other
Services; Distribution
Contract; Transfer Agent
Services; Custody of
Portfolio; Independent
Auditors

17 * Brokerage Allocation

18 * Description of Fund's
Shares

19 * Net Asset Value;
Additional Services and
Programs

20 * Tax Status

21 * Distribution Contract

22 * Calculation of
Performance

23 * Financial Statements

<PAGE>

John Hancock
Growth Fund
Class A and Class B Shares
Prospectus
May 1, 1995

TABLE OF CONTENTS

Page
Expense Information 2
The Fund's Financial Highlights 3
Investment Objective and Policies 5
Organization and Management of the Fund 7
Alternative Purchase Arrangements 8
The Fund's Expenses 9
Dividends and Taxes 10
Performance 11
How to Buy Shares 12
Share Price 13
How to Redeem Shares 18
Additional Services and Programs 20

This Prospectus sets forth information about John Hancock Growth Fund (the
"Fund"), a diversified series of John Hancock Capital Series (the "Trust "),
that you should know before investing. Please read and retain it for future
reference.

Additional information about the Fund has been filed with the Securities and
Exchange Commission (the "SEC"). You can obtain a copy of the Fund's Statement
of Additional Information, dated May 1, 1995, and incorporated by reference in
this Prospectus, free of charge by writing or telephoning: John Hancock Investor
Services Corporation, P.O. Box 9116, Boston, Massachusetts 02205-9116,
1-800-225-5291, (1-800-554-6713 TDD).

Shares of the Fund are not deposits or obligations of, or guaranteed or endorsed
by, any bank, and the shares are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<PAGE>

EXPENSE INFORMATION

The purpose of the following information is to help you understand the various
fees and expenses that you will bear, directly or indirectly, when you purchase
Fund shares. The operating expenses included in the table and hypothetical
example below are based on fees and expenses of the Fund's Class A and Class B
shares for the fiscal year ended December 31, 1994, adjusted to reflect current
fees and expenses. Actual fees and expenses in the future may be greater or less
than those indicated.

Class A Class B
Shares Shares
Shareholder Transaction Expenses
Maximum sales charge imposed on purchases (as a
percentage of offering price) 5.00% None
Maximum sales charge imposed on reinvested dividends None None
Maximum deferred sales charge None* 5.00%
Redemption fee+ None None
Exchange fee None None
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management fee 0.80% 0.80%
12b-1 fee** 0.30% 1.00%
Other expenses 0.51% 0.74%
Total Fund operating expenses 1.61% 2.54%
*No sales charge is payable at the time of purchase on investments in Class A
shares of $1 million or more, but a contingent deferred sales charge may be
imposed on these investments, as described below under the caption "Share
Price," in the event of certain redemption transactions within one year of
purchase.
**The amount of the 12b-1 fee used to cover service expenses will be up to 0.25%
of the Fund's average net assets, and the remaining portion will be used to
cover distribution expenses. See "The Fund's Expenses." +Redemption by wire
fee (currently $4.00) not included.

<TABLE>
<CAPTION>
Example: 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
You would pay the following expenses for the indicated period of years on a hypothetical
$1,000 investment, assuming a 5% annual return:
Class A shares $ 66 $ 98 $133 $231
Class B shares
--Assuming complete redemption at end of period $ 75 $109 $155 $264
--Assuming no redemption $ 26 $ 79 $135 $264
</TABLE>

(This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.)

The Fund's payment of a distribution fee may result in a long-term shareholder
indirectly paying more than the economic equivalent of the maximum front-end
sales charge permitted under the National Association of Securities Dealers
Rules of Fair Practice.

The management and 12b-1 fees referred to above are more fully explained in this
Prospectus under the caption "The Fund's Expenses" and in the Statement of
Additional Information under the captions "Investment Advisory and Other
Services" and "Distribution Contract."

2
<PAGE>

THE FUND'S FINANCIAL HIGHLIGHTS

The following table of Financial Highlights has been audited by Ernst & Young
LLP, the Fund's independent auditors, whose unqualified report is included in
the Fund's 1994 Annual Report and is included in the Statement of Additional
Information. Further information about the performance of the Fund is contained
in the Fund's Annual Report to shareholders, that may be obtained free of charge
by writing or telephoning John Hancock Investor Services Corporation ("Investor
Services") at the address or telephone number listed on the front page of this
Prospectus.

Selected data for each class of shares outstanding throughout each period
indicated is as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
1994 1993 1992 1991 1990 1989 1988 1987 1986 1985
CLASS A
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per Share Operating
Performance
Net Asset Value, Beginning
of Period $17.40 $17.32 $17.48 $12.93 $15.18 $13.33 $12.34 $14.03 $14.50 $12.13
Net Investment
Income/(Loss) (0.10) (0.11) (0.06) 0.04 0.16 0.28 0.23 0.22 0.11 0.18
Net Realized and Unrealized
Gain/(Loss) on Investments (1.21) 2.33 1.10 5.36 (1.47) 3.81 1.16 0.64 1.79 3.11
Total from Investment
Operations (1.31) 2.22 1.04 5.40 (1.31) 4.09 1.39 0.86 1.90 3.29
Less Distributions:
Dividends from Net
Investment Income -- -- -- (0.04) (0.16) (0.29) (0.23) (0.28) (0.17) (0.21)
Distributions from Net
Realized Gain on
Investments Sold (0.20) (2.14) (1.20) (0.81) (0.78) (1.95) (0.17) (2.27) (2.20) (0.71)
Total Distributions (0.20) (2.14) (1.20) (0.85) (0.94) (2.24) (0.40) (2.55) (2.37) (0.92)
Net Asset Value, End of
Period $15.89 $17.40 $17.32 $17.48 $12.93 $15.18 $13.33 $12.34 $14.03 $14.50
Total Investment Return at
Net Asset Value (7.50%) 13.03% 6.06% 41.68% (8.34)% 30.96% 11.23% 6.03% 13.83% 28.04%
Ratios and Supplemental Data
Net Assets, End of Period
(000's omitted) $146,466 $162,937 $153,057 $145.287 $102.416 $105,014 $101,497 $86,426 $87,468 $72,049
Ratio of Expenses to
Average Net Assets 1.65% 1.56% 1.60% 1.44% 1.46% 0.96% 1.06% 1.00% 1.03% 1.09%
Ratio of Net Investment
Income/(Loss) to Average
Net Assets (0.64%) (0.67%) (0.36%) 0.27% 1.12% 1.73% 1.76% 1.41% 0.77% 1.40%
Portfolio Turnover Rate 52% 68% 71% 82% 102% 61% 47% 68% 62% 67%
1994
CLASS B (a)
Per Share Operating
Performance
Net Asset Value, Beginning
of Period $17.16(b)
Net Investment Loss (0.20)(c)
Net Realized and Unrealized
Loss on Investments (0.93)
Total from Investment
Operations (1.13)
Less Distributions:
Distributions from Net
Realized Gain on
Investments Sold (0.20)
Net Asset Value, End of
Period $15.83
Total Investment Return at
Net Asset Value (6.56%)
Ratios and Supplemental Data
Net Assets, End of Period
(000's omitted) $3,807
Ratio of Expenses to
Average Net Assets 2.38%(d)
Ratio of Net Investment
Loss to Average Net Assets (1.25%)(d)
Portfolio Turnover Rate 52%
</TABLE>

3
<PAGE>

<TABLE>
<CAPTION>
Year Ended December 31,
1994 1993(e)
CLASS C
<S> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period $17.46 $17.05(b)
Net Investment Income/(Loss) (0.01) (0.02)
Net Realized and Unrealized Gain/(Loss) on
Investments (1.23) 2.57
Total from Investment Operations (1.24) 2.55
Less Distributions:
Distributions from Net Realized Gain on
Investments Sold (0.20) (2.14)
Net Asset Value, End of Period $16.02 $17.46
Total Investment Return at Net Asset Value (7.07%) 15.18%
Ratios and Supplemental Data
Net Assets, End of Period (000's omitted) $1,574 $1,285
Ratio of Expenses to Average Net Assets 1.12% 1.05%(d)
Ratio of Net Investment Income to Average Net
Assets (0.08%) 0.17%(d)
Portfolio Turnover Rate 52% 68%
</TABLE>
(a) Class B shares commenced operations on January 3, 1994.
(b) Initial price at commencement of operations.
(c) On average month end shares outstanding.
(d) On an annualized basis.
(e) Class C shares commenced operations on May 7, 1993.
(f) Class C shares were no longer offered for sale after March 31, 1995.

4
<PAGE>

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment
objective is to seek long-term
capital appreciation.

The Fund's investment objective is to achieve long-term appreciation of capital.
The Fund will diversify its investments among a number of industry groups
without concentration in any particular industry. There is no assurance that the
Fund will achieve its investment objective. The Fund believes its shares are
suitable for investment by those who are in search of above-average long-term
reward and can invest without concern for current income.

The Fund invests principally in common stocks (and in securities convertible
into or with rights to purchase common stocks) of companies which the Fund's
management believes to offer outstanding growth potential over both the
intermediate and long term. John Hancock Advisers, Inc. (the "Adviser") will
pursue a strategy of investing in common stocks of those companies whose
five-year average operating earnings and revenue growth are at least two times
that of the economy, as measured by the Gross Domestic Product. Companies
selected will generally have positive operating earnings growth for five
consecutive years, although companies without a five-year record of positive
earnings growth may also be selected if, in the opinion of the Adviser, they
have significant growth potential. The Fund may invest up to 15% of its net
assets in securities having a limited or restricted market. The Adviser expects
that the median market capitalization of the portfolio will be over three
billion dollars.

Restricted Securities. The Fund may purchase restricted securities including
those eligible for resale to "qualified institutional buyers" pursuant to Rule
144A under the Securities Act of 1933 (the "Securities Act"). The Trustees will
monitor the Fund's investments in these securities, focusing on certain factors,
including valuation, liquidity and availability of information. Purchases of
restricted securities are subject to an investment restriction limiting all the
Fund's illiquid securities to not more than 15% of its net assets.

Lending of Securities. The Fund may lend portfolio securities to brokers,
dealers, and financial institutions if the loan is collateralized by cash or
U.S. government securities according to applicable regulatory requirements. The
Fund may reinvest any cash collateral in short-term securities. When the Fund
lends portfolio securities, there is a risk that the borrower may fail to return
the securities. As a result, the Fund may incur a loss or, in the event of the
borrower's bankruptcy, the Fund may be delayed in or prevented from liquidating
the collateral. It is a fundamental policy of the Fund not to lend portfolio
securities having a total value exceeding 33-1/3% of its total assets.

Repurchase Agreements. The Fund may enter into repurchase agreements. In a
repurchase agreement, the Fund buys a security subject to the right and
obligation to sell it back at a higher price. These transactions must be fully
collateralized at all times, but involve some credit risk to the Fund if the
other party defaults on its obligation and the Fund is delayed in or prevented
from liquidating the collateral.

Foreign Issuers. The Fund may invest up to 15% of its assets in securities of
foreign issuers in the form of American Depositary Receipts (ADRs). ADRs
(sponsored or unsponsored) are receipts typically issued by an American bank or
trust company. They evidence ownership of underlying securities issued by a
foreign corporation

5
<PAGE>

and are designated for trading in United States securities markets. Issuers of
the shares underlying unsponsored ADRs are not contractually obligated to
disclose material information in the United States and, therefore, there may not
be a correlation between this information and the market value of an unsponsored
ADR.

When management believes that current market or economic conditions warrant, the
Fund temporarily may retain cash or invest in preferred stock, nonconvertible
bonds or other fixed-income securities. Fixed income securities in the Fund's
portfolio will generally be rated at least BBB by Standard & Poor's Ratings
Group ("S&P") or Baa by Moody's Investor's Service, Inc. ("Moody's"), or if
unrated, determined by the Adviser to be of comparable quality. The Fund may,
however, invest up to 5% of its net assets in lower rated securities, commonly
known as "junk bonds."

Investments in foreign
securities may involve risks
that are not present in
domestic investments.

These risks may be intensified in the case of investments in emerging markets or
countries with limited or developing capital markets. These countries are
located in the Asia-Pacific region, Eastern Europe, Latin and South America and
Africa. Security prices in these markets can be significantly more volatile than
in more developed countries, reflecting the greater uncertainties of investing
in less established markets and economies. Political, legal and economic
structures in many of these emerging market countries may be undergoing
significant evolution and rapid development, and they may lack the social,
political, legal and economic stability characteristic of more developed
countries. Emerging market countries may have failed in the past to recognize
private property rights. They may have relatively unstable governments, present
the risk of nationalization of businesses, restrictions on foreign ownership, or
prohibitions on repatriation of assets, and may have less protection of property
rights than more developed countries. Their economies may be predominantly based
on only a few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt burdens,
unstable currencies or inflation rates. Securities of issuers located in these
countries may have limited marketability and may be subject to more abrupt or
erratic price movements.

The Fund follows certain
policies, which may help to
reduce investment risk.

Investment Restrictions. The Fund has adopted certain investment restrictions
that are detailed in the Statement of Additional Information, where they are
classified as fundamental or nonfundamental. The Fund's investment objective and
those investment restrictions designated as fundamental may not be changed
without shareholder approval. All other investment policies and restrictions,
however, are nonfundamental and can be changed by a vote of the Trustees without
shareholder approval. The Fund's portfolio turnover rates for recent years are
shown in the section "The Fund's Financial Highlights."

6
<PAGE>

Brokers are chosen based on best price and execution.

When choosing brokerage firms to carry out the Fund's transactions, the Adviser
gives primary consideration to execution at the most favorable price, taking
into account the broker's professional ability and quality of service.
Consideration may also be given to the broker's sales of Fund shares. Pursuant
to procedures established by the Trustees, the Adviser may place securities
transactions with brokers affiliated with the Adviser. These brokers include
Tucker Anthony Incorporated, John Hancock Distributors, Inc. and Sutro &
Company, Inc. which are indirectly owned by John Hancock Mutual Life Insurance
Company, which in turn indirectly owns the Adviser.

ORGANIZATION AND MANAGEMENT OF THE FUND

The Trustees elect officers and retain the investment adviser who is responsible
for the day-to-day operations of the Fund, subject to the Trustees' policies and
supervision.

The Fund is a separate, diversified portfolio of the Trust, an open-end
management investment company organized as a Delaware corporation in 1968 and
reorganized as a Massachusetts business trust in 1984. The Fund has an unlimited
number of authorized shares of beneficial interest. The Trust's Declaration of
Trust permits the Trustees to create and classify shares of beneficial interest
into separate series of the Trust without shareholder approval. As of the date
of this Prospectus, the Trustees have authorized the Fund and one other series.
Although additional series may be added in the future, the Trustees have no
current intention of creating additional series of the Trust. The Trust's
Declaration of Trust also permits the Trustees to classify and reclassify any
series or portfolio of shares of the Fund into one or more classes. Accordingly,
the Trustees have authorized the issuance of two classes of the Fund, designated
Class A and Class B. The Trustees terminated Class C on May 1, 1995. The shares
of each class represent an interest in the same portfolio of investments of the
Fund. Each class has equal rights as to voting, redemption, dividends and
liquidation. However, each class bears different distribution and transfer agent
fees and other expenses. Also, Class A and Class B shareholders have exclusive
voting rights with respect to their distribution plans.

Shareholders have certain rights to remove Trustees. The Fund is not required
and does not intend to hold annual shareholder meetings, although special
meetings may be held for such purposes as electing or removing Trustees,
changing fundamental investment restrictions and policies or approving a
management contract. The Fund, under certain circumstances, will assist in
shareholder communications with other shareholders.

John Hancock Advisers, Inc.
advises investment companies
having a total asset value of
more than $13 billion.

The Adviser was organized in 1968 and is a wholly-owned indirect subsidiary of
the John Hancock Mutual Life Insurance Company, a financial services company. It
provides the Fund, and other investment companies in the John Hancock group of
funds, with investment research and portfolio management services. John Hancock
Funds, Inc. ("John Hancock Funds") distributes shares for all of the John
Hancock funds directly and through selected broker-dealers ("Selling Brokers").
Certain Fund officers are also officers of the Adviser and John Hancock Funds.
Pursuant to an order granted by the Securities and Exchange Commission, the Fund
has adopted a deferred compensation plan for its independent Trustees which
allows Trustees' fees to be invested by the Fund in other John Hancock funds.

Benjamin J. Williams, Jr. manages this Fund as well as John Hancock Global Rx
Fund and works in various analytical capabilities for other John Hancock equity
funds. Prior to joining John Hancock Funds in 1990, Mr. Williams spent four
years with Robertson Stephens & Company and Eagle Investment Associates, an
investment subsidiary of Bank of Boston.

7
<PAGE>

In order to avoid any conflict with portfolio trades for the Fund, the Adviser
and the Fund have adopted extensive restrictions on personal securities trading
by personnel of the Adviser and its affiliates. Some of these restrictions are:
pre-clearance for all personal trades and a ban on the purchase of initial
public offerings, as well as contributions to specified charities of profits on
securities held for less than 91 days. These restrictions are a continuation of
the basic principle that the interests of the Fund and its shareholders come
first.

ALTERNATIVE PURCHASE ARRANGEMENTS

An alternative purchase plan
allows you to choose the
method of purchase that is
best for you.

You can purchase shares of the Fund at a price equal to their net asset value
per share, plus a sales charge. At your election, this charge may be imposed
either at the time of the purchase (See "Initial Sales Charge Alternative--Class
A Shares") or on a contingent deferred basis (See "Contingent Deferred Sales
Charge Alternative--Class B Shares"). If you do not specify on your account
application the class of shares you are purchasing, it will be assumed that you
are investing in Class A shares.

Investments in Class A shares are subject to an initial sales charge.

Class A Shares. If you elect to purchase Class A shares, you will incur an
initial sales charge unless your purchase is $1 million or more. If you purchase
$1 million or more of Class A shares, you will not be subject to an initial
sales charge, but you will incur a sales charge if you redeem your shares within
one year of purchase. Class A shares are subject to ongoing distribution and
service fees at a combined annual rate of up to 0.30% of the Fund's average
daily net assets attributable to the Class A shares. Certain purchases of Class
A shares qualify for reduced initial sales charges. See "Share Price--Qualifying
for a Reduced Sales Charge."

Investments in Class B shares are
subject to a contingent deferred
sales charge.

Class B Shares. You will not incur a sales charge when you purchase Class B
shares, but the shares are subject to a sales charge if you redeem them within
six years of purchase (the "contingent deferred sales charge" or the "CDSC").
Class B shares are subject to ongoing distribution and service fees at a
combined annual rate of up to 1.00% of the Fund's average daily net assets
attributable to the Class B shares. Investing in Class B shares permits all of
your dollars to work from the time your investment is made, but the higher
ongoing distribution fee will cause these shares to have higher expenses than
that of Class A shares. To the extent that any dividends are paid by the Fund,
these higher expenses will result in lower dividends than those paid on Class A
shares.

Class B shares are not available to full-service defined contribution plans
administered by Investor Services or John Hancock Mutual Life Insurance Company
that had more than 100 eligible employees at the inception of the Fund account.

Factors to Consider in Choosing an Alternative

You should consider
which class of shares would be
more beneficial for you.

The alternative purchase arrangement allows you to choose the most beneficial
way to buy shares, given the amount of your purchase, the length of time that
you expect to hold the shares and other circumstances. You should consider
whether, during the anticipated life of your Fund investment the accumulated
CDSC and fees on Class B shares would be less than the initial sales charge and
accumulated fees on Class A shares purchased at the same time, and to what
extent this differential would be offset by the Class A shares' lower expenses.
To help you make this determination, the table under the caption "Expense
Information" on page 2 of this Prospectus shows

8
<PAGE>

examples of the charges applicable to each class of shares. Class A shares will
normally be more beneficial if you qualify for a reduced sales charge. See
"Share Price-- Qualifying for a Reduced Sales Charge".

Class A shares are subject to lower distribution and service fees and,
accordingly, pay correspondingly higher dividends per share, to the extent that
any dividends are paid. However, because initial sales charges are deducted at
the time of purchase, you would not have all of your funds invested initially
and, therefore, would initially own fewer shares. If you do not qualify for
reduced initial sales charges and expect to maintain your investment for an
extended period of time, you might consider purchasing Class A shares. This is
because the accumulated distribution and service charges on Class B shares may
exceed the initial sales charge and accumulated distribution and service charges
on Class A shares during the life of your investment.

Alternatively, you might determine that it is more advantageous to purchase
Class B shares to have all of your funds invested initially. However, you will
be subject to higher distribution fees and, for a six-year period, a CDSC.

In the case of Class A shares, the distribution expenses that John Hancock Funds
incurs in connection with the sale of shares will be paid from the proceeds of
the initial sales charge and the ongoing distribution and service fees. In the
case of Class B shares, the expenses will be paid from the proceeds of the
ongoing distribution and service fees, as well as from the CDSC incurred upon
redemption within six years of purchase. The purpose and function of the Class B
shares' CDSC and ongoing distribution and service fees are the same as those of
the Class A shares' initial sales charge and ongoing distribution and service
fees. Sales personnel distributing the Fund's shares may receive different
compensation for selling each class of shares.

Dividends, if any, on Class A and Class B shares will be calculated in the same
manner, at the same time, and on the same day. They will also be in the same
amount, except for differences resulting from each class bearing only its own
distribution and service fees, shareholder meeting expenses and any incremental
transfer agency costs. See "Dividends and Taxes."

THE FUND'S EXPENSES

For managing its investment and business affairs, the Fund pays a fee, effective
January 1, 1994, to the Adviser which is based on a stated percentage of the
Fund's average daily net asset value, as follows:

Net Asset Value Annual Rate
First $250,000,000 0.80%
Next $250,000,000 0.75%
Amount over $500,000,000 0.70%

The investment management fee for the 1994 fiscal year was 0.80% of the Fund's
average daily net asset value.

The investment management fee is higher than the fees paid to most mutual funds,
but comparable to fees paid by funds that invest in similar securities.

From time to time, the Adviser may reduce its fee or make other arrangements to
limit the Fund's expenses to not more than a specified percentage of average
daily

9
<PAGE>

net assets. The Adviser retains the right to re-impose a fee and recover any
other payments to the extent that, at the end of any fiscal year, the Fund's
annual expenses fall below the limit.

The Fund pays distribution
and service fees for
marketing and sales-related
shareholder servicing.

The Class A and Class B shareholders have adopted distribution plans (each a
"Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940. Under
these Plans, the Fund will pay distribution and service fees at an aggregate
annual rate of up to 0.30% of the Class A shares' average daily net assets and
an aggregate annual rate of up to 1.00% of the Class B shares' average daily net
assets. In each case, up to 0.25% is for service expenses and the remaining
amount is for distribution expenses. The distribution fees are used to reimburse
John Hancock Funds for its distribution expenses, including but not limited to:
(i) initial and ongoing sales compensation to Selling Brokers and others
(including affiliates of John Hancock Funds) engaged in the sale of Fund shares;
(ii) marketing, promotional and overhead expenses incurred in connection with
the distribution of Fund shares; and (iii) with respect to Class B shares only,
interest expenses on unreimbursed distribution expenses. The service fees will
be used to compensate Selling Brokers for providing personal and account
maintenance services to shareholders. In the event John Hancock Funds is not
fully reimbursed for payments it makes or expenses it incurs under the Class A
Plan, these expenses will not be carried beyond one year from the date they were
incurred. These unreimbursed expenses under the Class B Plan will be carried
forward together with interest on the balance of these unreimbursed expenses.
For the fiscal year ended December 31, 1994 an aggregate of $152,358 of
distribution expenses or 7.0% of the average net assets of the Class B shares of
the Fund, was not reimbursed or recovered by the John Hancock Funds through the
receipt of deferred sales charges or 12b-1 fees in prior periods.

Information on the Fund's total expenses is in the Fund's Financial Highlights
section of the prospectus.

DIVIDENDS AND TAXES

Dividends. Dividends from the Fund's net investment income and capital gains are
generally declared and paid annually. Dividends are reinvested in additional
shares of your class unless you elect the option to receive them in cash. If you
elect the cash option and the U.S. Postal Service cannot deliver your checks,
your election will be converted to the reinvestment option. Because of the
higher expenses associated with Class B shares, any dividend on Class B shares
will be lower than that on Class A shares. See "Share Price."

Taxation. Dividends from the Fund's net investment income, certain net foreign
currency gains, and net short-term capital gains are taxable to you as ordinary
income. Dividends from the Fund's net long-term capital gains are taxable as
long-term capital gain. These dividends are taxable whether received in cash or
reinvested in additional shares. Certain dividends paid in January of a given
year may be taxable as if you received them the previous December. Corporate
shareholders may be entitled to take a corporate dividends-received deduction
for dividends received by the Fund from U.S. domestic corporations, subject to
certain restrictions under the Internal Revenue Code. The Fund will send you a
statement by January 31 showing the tax status of the dividends you received for
the prior year.

10
<PAGE>

The Fund has qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Code. As a regulated investment
company, the Fund will not be subject to Federal income tax on any net
investment income and net realized capital gains that are distributed to its
shareholders within the time period prescribed by the Code. When you redeem
(sell) or exchange shares, you may realize a taxable gain or loss.

On the account application, you must certify that your social security or other
taxpayer identification number is correct, and that you are not subject to
backup withholding of Federal income tax. If you do not provide this information
or are otherwise subject to backup withholding, the Fund may be required to
withhold 31% of your dividends and the proceeds of redemptions and exchanges.

In addition to Federal taxes, you may be subject to state, local or foreign
taxes with respect to your investment in and distributions from the Fund.
Non-U.S. shareholders and tax-exempt shareholders are subject to different tax
treatment not described above. You should consult your tax adviser for specific
advice.

PERFORMANCE

The Fund may advertise its total return.

The Fund's total return shows the overall change in value of a hypothetical
investment in the Fund, assuming the reinvestment of all dividends. Cumulative
total return shows the Fund's performance over a period of time. Average annual
total return shows the cumulative return of the Fund shares divided over the
number of years included in the period. Because average annual total return
tends to smooth out variations in the Fund's performance, you should recognize
that it is not the same as actual year-to-year results.

Total return calculations for Class A shares generally include the effect of
paying the maximum sales charge (except as shown in "The Fund's Financial
Highlights"). Investments at a lower sales charge would result in higher
performance figures. Total return for the Class B shares reflect the deduction
of the applicable CDSC imposed on a redemption of shares held for the applicable
period. All calculations assume that all dividends are reinvested at net asset
value on the reinvestment dates during the periods. The total return of Class A
and Class B shares will be calculated separately and, because each class is
subject to different expenses, the total return may differ with respect to that
class for the same period. The relative performance of the Class A and Class B
shares will be affected by a variety of factors, including the higher operating
expenses attributable to the Class B shares, whether the Fund's investment
performance is better in the earlier or later portions of the period measured
and the level of net assets of the classes during the period. The Fund will
include the total return of Class A and Class B shares in any advertisement or
promotional materials including Fund performance data. The value of Fund shares,
when redeemed, may be more or less than their original cost. Total return is a
historical calculation and is not an indication of future performance. See
"Factors to Consider in Choosing an Alternative."

11
<PAGE>

HOW TO BUY SHARES

Opening an account

The minimum initial investment in Class A and Class B shares is $1,000 ($250 for
group investments and retirement plans).

Complete the Account Application attached to this Prospectus. Indicate whether
you are purchasing Class A or Class B shares. If you do not specify which class
of shares you are purchasing, Investor Services will assume you are investing in
Class A shares.

By Check

1. Make your check payable to John Hancock Investor Services Corporation
("Investor") Services").
2. Deliver the completed application and check to your registered representative
or Selling Broker, or mail it directly to Investor Services.

By Wire

1. Obtain an account number by contacting your registered representative or
Selling Broker, or by calling 1-800-225-5291.
2. Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock Growth Fund
(Class A or Class B shares)
Your Account Number
Name(s) under which account is registered
3. Deliver the completed application to your registered representative or
Selling Broker, or mail it directly to Investor Services.

Buying additional Class A
and Class B shares

Monthly Automatic
Accumulation
Program (MAAP)

1. Complete the "Automatic Investing" and "Bank Information" sections on the
Account Privileges Application, designating a bank account from which your funds
may be drawn.
2. The amount you elect to invest will be automatically withdrawn from your bank
or credit union account.

By Telephone

1. Complete the "Invest-By-Phone" and "Bank Information" sections on the Account
Privileges Application, designating a bank account from which your funds may be
drawn. Note that in order to invest by phone, your account must be in a bank or
credit union that is a member of the Automated Clearing House system (ACH). 2.
After your authorization form has been processed, you may purchase additional
Class A or Class B shares by calling Investor Services toll-free at 1-800-
225-5291. 3. Give the Investor Services representative the name(s) in which your
account is registered, the Fund name, the class of shares you own, your account
number and the amount you wish to invest. 4. Your investment normally will be
credited to your account the business day following your phone request.

By Check

1. Either fill out the detachable stub included on your account statement or
include a note with your investment listing the name of the Fund, the class of
shares you own, your account number and the name(s) in which the account is
registered.
2. Make your check payable to John Hancock Investor Services Corporation
3. Mail the account information and check to:
John Hancock Investor Services Corporation
P.O. Box 9115
Boston, MA 02205-9115
or deliver it to your registered representative or Selling Broker.

12
<PAGE>

By Wire

Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock Growth Fund
(Class A or Class B shares)
Your Account Number
Name(s) under which account is registered

Other Requirements: All purchases must be made in U.S. dollars. Checks written
on foreign banks will delay purchases until U.S. funds are received, and a
collection charge may be imposed. Shares of the Fund are priced at the offering
price based on the net asset value computed after John Hancock Funds receives
notification of the dollar equivalent from the Fund's custodian bank. Wire
purchases normally take two or more hours to complete and, to be accepted the
same day, must be received by 4:00 p.m., New York time. Your bank may charge a
fee to wire funds. Telephone transactions are recorded to verify information.
Share certificates are not issued unless a request is made to Investor Services.

You will receive account statements,
which you should keep to help with
your personal recordkeeping.

You will receive a statement of your account after any transaction that affects
your share balance or registration (statements related to reinvestment of
dividends and automatic investment/withdrawal plans will be sent to you
quarterly). A tax information statement will be mailed to you by January 31 of
each year.

SHARE PRICE

The offering price of your shares is their net asset value plus a sales charge,
if applicable, which will vary with the purchase alternative you choose.

The net asset value per share ("NAV") is the value of one share. The NAV is
calculated by dividing the net asset value of each class by the number of
outstanding shares of that class. The NAV of each class can differ. 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 according to procedures approved by the Trustees. Short-term debt
investments maturing within 60 days are valued at amortized cost which
approximates market value. Foreign securities are valued on the basis of
quotations from the primary market in which they are traded, and are translated
from the local currency into U.S. dollars using current exchange rates. If
quotations are not readily available, or the value has been materially affected
by events occurring after the closing of a foreign market, assets are valued by
a method that the Trustees believe accurately reflects fair value. The NAV is
calculated once daily as of the close of regular trading on the New York Stock
Exchange (generally at 4:00 p.m., New York time) on each day that the Exchange
is open.

Shares of the Fund are sold at the offering price based on the NAV computed
after your investment request is received in good order by John Hancock Funds.
If you buy shares of the Fund through a Selling Broker, the Selling Broker must
receive your investment before the close of regular trading on the New York
Stock Exchange, and transmit it to John Hancock Funds before its close of
business, to receive that day's offering price.

Initial Sales Charge Alternative--Class A Shares. The offering price you pay for
Class A shares of the Fund equals the NAV plus a sales charge as follows:

13
<PAGE>

<TABLE>
<CAPTION>
Sales Sales Combined Reallowance
Charge Charge Reallowance to Selling
as a as a and Service Brokers as a
Percentage Percentage Fee as a Percentage
of the of the Percentage of the
Amount Invested Offering Amount of Offering Offering
(Including Sales Charge) Price Invested Price(+) Price(*)
<S> <C> <C> <C> <C>
Less than $50,000 5.00% 5.26% 4.25% 4.01%
$50,000 to $99,999 4.50% 4.71% 3.75% 3.51%
$100,000 to $249,999 3.50% 3.63% 2.85% 2.61%
$250,000 to $499,999 2.50% 2.56% 2.10% 1.86%
$500,000 to $999,999 2.00% 2.04% 1.60% 1.36%
$1,000,000 and over 0.00%(**) 0.00%(**) (***) 0.00%(***)
</TABLE>

(*)Upon notice to Selling Brokers with whom it has sales agreements, John
Hancock Funds may reallow an amount up to the full applicable sales charge. In
addition to the reallowance allowed to all Selling Brokers, John Hancock Funds
will pay the following: round trip airfare to a resort will be given to each
registered representative of a Selling Broker (if the Selling Broker has agreed
to participate) who sells certain amounts of shares of John Hancock funds. John
Hancock Funds will make these incentive payments out of its own resources. Other
than distribution fees, the Fund does not bear distribution expenses. A Selling
Broker to whom substantially the entire sales charge is reallowed or who
receives these incentives may be deemed to be an underwriter under the
Securities Act of 1933.

(**)No sales charge is payable at the time of purchase of Class A shares of $1
million or more, but a contingent deferred sales charge may be imposed in the
event of certain redemption transactions within one year of purchase.

(***)John Hancock Funds may pay a commission and first year's service fee (as
described in (+) below) to Selling Brokers who initiate and are responsible for
purchases of $1 million or more in aggregate as follows: 1% on sales to
$4,999,999, 0.50% on the next $5 million and 0.25% on $10 million and over.

(+) At the time of sale, John Hancock Funds pays to Selling Brokers the first
year's service fee in advance, in an amount equal to 0.25% of the net assets
invested in the Fund. Thereafter it pays the service fee periodically in arrears
in an amount up to 0.25% of the Fund's average annual net assets. Selling
Brokers receive the fee as compensation for providing personal and account
maintenance services to shareholders.

Sales charges ARE NOT APPLIED to any dividends that are reinvested in additional
shares of the Fund.

John Hancock Funds will pay certain affiliated Selling Brokers at an annual rate
of up to 0.05% of the daily net assets of the accounts attributable to these
brokers.

Under certain circumstances described below, investors in Class A shares may be
entitled to pay reduced sales charges. See "Qualifying For a Reduced Sales
Charge" below.

Contingent Deferred Sales Charge--Investments of $1 Million or More in Class A
Shares. Purchases of $1 million or more in Class A shares will be made at net
asset value with no initial sales charge, but if the shares are redeemed within
12 months after the end of the calendar month in which the purchase was made
(the contingent deferred sales charge period), a contingent deferred sales
charge ("CDSC") will be imposed. The rate of the CDSC will depend on the amount
invested as follows:

Amount Invested CDSC Rate
$1 million to $4,999,999 1.00%
Next $5 million to $9,999,999 0.50%
Amounts of $10 million and over 0.25%

14
<PAGE>

Existing full service clients of John Hancock Mutual Life Insurance Company who
were group annuity contract holders as of September 1, 1994, and participant
directed defined contribution plans with at least 100 eligible employees at the
inception of the Fund account, may purchase Class A shares with no initial sales
charge. However, if the shares are redeemed within 12 months after the end of
the calendar year in which the purchase was made, a contingent deferred sales
charge will be imposed at the above rate.

The charge will be assessed on an amount equal to the lesser of the current
market value or the original purchase cost of the redeemed Class A shares.
Accordingly, no CDSC will be imposed on increases in account value above the
initial purchase price, including any dividends which have been reinvested in
additional Class A shares.

In determining whether a CDSC applies to a redemption, the calculation will be
determined in a manner that results in the lowest possible rate being charged.
Therefore, it will be assumed that the redemption is first made from any shares
in your account that are not subject to the CDSC. The CDSC is waived on
redemption in certain circumstances. See the discussion under "Waiver of
Contingent Deferred Sales Charges."

You may qualify for a reduced sales charge on your investments in Class A
shares.

Qualifying for a Reduced Sales Charge.

If you invest more than $50,000 in Class A shares of the Fund or a combination
of funds in the John Hancock funds (except money market funds), you may qualify
for a reduced sales charge on your investments in Class A shares through a
LETTER OF INTENTION. You may also be able to use the ACCUMULATION PRIVILEGE and
COMBINATION PRIVILEGE to take advantage of the value of your previous
investments in Class A shares of John Hancock funds when meeting the breakpoints
for a reduced sales charge. For the ACCUMULATION PRIVILEGE and COMBINATION
PRIVILEGE, the applicable sales charge will be based on the total of:
1. Your current purchase of Class A shares of the Fund;
2. The net asset value (at the close of business on the previous day) of (a) all
Class A shares of the Fund you hold, and (b) all Class A shares of any other
John Hancock funds you hold; and 3. The net asset value of all shares held by
another shareholder eligible to combine his or her holdings with you into a
single "purchase."

Example:

If you hold Class A shares of a John Hancock fund with a net asset value of
$20,000, and subsequently invest $30,000 in Class A shares of the Fund, the
sales charge on this subsequent investment would be 4.50% and not 5.00%. This
rate is the rate that would otherwise be applicable to investments of less than
$50,000. See "Initial Sales Charge Alternative--Class A Shares."

Class A shares may be available without a sales charge to certain individuals
and organizations.

If you are in one of the following categories, you may purchase Class A shares
of the Fund without paying a sales charge:

(bullet) A Trustee or officer of the Trust; a Director or officer of the Adviser
and its affiliates or Selling Brokers; employees or sales representatives of any
of the foregoing; retired officers, employees and Directors of any of the
foregoing; a member of the immediate family of any of the foregoing; or any
fund, pension, profit sharing or other benefit plan for the individuals
described above.
15
<PAGE>

(bullet) Any state, county, city or any instrumentality, department, authority
or agency of these entities that is prohibited by applicable investment laws
from paying a sales charge or commission when it purchases shares of any
registered investment management company.*

(bullet) A bank, trust company, credit union, savings institution or other type
of depository institution, its trust departments or common trust funds (an
"eligible depository institution") if it is purchasing $1 million or more for
non-discretionary customers or accounts.*

(bullet) A broker, dealer or registered investment adviser that has entered into
an agreement with John Hancock Funds providing specifically for the use of Fund
shares in fee- based investment products make available to their clients.

(bullet) A former participant in an employee benefit plan with John Hancock
funds, when he/she withdraws from his/her plan and transfers any or all of
his/her plan distributions directly to the Fund.

* For investments made under these provisions, John Hancock Funds may make a
payment out of its own resources to the Selling Broker in an amount not to
exceed 0.25% of the amount invested.

Class A shares of the Fund may also be purchased without an initial sales charge
in connection with certain liquidation, merger or acquisition transactions
involving other investment companies or personal holding companies.

Contingent Deferred Sales Charge Alternative--Class B Shares. Class B shares are
offered at net asset value per share without a sales charge, so that your entire
investment will go to work at the time of purchase. However, Class B shares
redeemed within six years of purchase will be subject to a CDSC at the rates set
forth below. This charge will be assessed on an amount equal to the lesser of
the current market value or the original purchase cost of the shares being
redeemed. Accordingly, you will not be assessed a CDSC on increases in account
value above the initial purchase price, including shares derived from dividend
reinvestment or capital gains distributions.

In determining whether a CDSC applies to a redemption, the calculation will be
determined in a manner that results in the lowest possible rate being charged.
It will be assumed that your redemption comes first from shares you have held
beyond the six-year CDSC redemption period or those you acquired through
reinvestment of dividends or distributions, and next from the shares you have
held the longest during the six-year period. The CDSC is waived on redemptions
in certain circumstances. See the discussion "Waiver of Contingent Deferred
Sales Charges" below.

Example:

You have purchased 100 shares at $10 per share. The second year after your
purchase, your investment's net asset value per share has increased by $2 to
$12, and you have gained 10 additional shares through dividend reinvestment. If
you redeem 50 shares at this time, your CDSC will be calculated as follows:

16
<PAGE>

(bullet) Proceeds of 50 shares redeemed at $12 per share $ 600
(bullet) Minus proceeds of 10 shares not subject to CDSC because
they were acquired through dividend reinvestment (10 X $12) -120
(bullet) Minus appreciation on remaining shares, also not subject to
CDSC (40 X $2) -80
(bullet) Amount subject to CDSC $ 400

Proceeds from the CDSC are paid to John Hancock Funds. John Hancock Funds uses
all or in part of them to defray its expenses related to providing the Fund with
distribution services connected to the sale of Class B shares, such as
compensating selected Selling Brokers for selling these shares. The combination
of the CDSC and the distribution and service fees makes it possible for the Fund
to sell Class B shares without deducting a sales charge at the time of the
purchase.

The amount of the CDSC, if any, will vary depending on the number of years from
the time you purchase your Class B shares until the time you redeem them. Solely
for purposes of determining this holding period, any payments you make during
the month will be aggregated and deemed to have been made on the last day of the
month.

Contingent Deferred Sales
Year in Which Class B Shares Charge As a Percentage of
Redeemed Following Purchase Dollar Amount Subject to CDSC
First 5.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter None

A commission equal to 3.75% of the amount invested and a first year's service
fee equal to 0.25% of the amount invested are paid to Selling Brokers. The
initial service fee is paid in advance at the time of sale for personal and
account maintenance services provided to shareholders during the twelve months
following the sale. Thereafter the service fee is paid in arrears.

Under certain
circumstances, the CDSC on
Class B and certain Class A
share redemptions will be
waived.

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

(bullet) Redemptions of Class B shares made under Systematic Withdrawal Plan
(see "How to Redeem Shares"), as long as your annual redemptions do not exceed
10% of your account value at the time you established your Systematic Withdrawal
Plan and 10% of the value of your subsequent investments (less redemptions) in
that account at the time you notify Investor Services. This waiver does not
apply to Systematic Withdrawal Plan redemptions of Class A shares that are
subject to a CDSC.

(bullet) Redemptions made to effect distributions from an Individual Retirement
Account either before or after age 59-1/2, as long as the distributions are
based on the life expectancy or the joint-and-last survivor life expectancy of
you and your beneficiary. These distributions must be free from penalty under
the Code.

(bullet) Redemptions made to effect mandatory distributions under the Code after
age 70-1/2 from a tax-deferred retirement plan.

17
<PAGE>

(bullet) Redemptions made to effect distributions to participants or
beneficiaries from certain employer-sponsored retirement plans including those
qualified under Section 401(a) of the Code, custodial accounts under Section
403(b)(7) of the Code and deferred compensation plans under Section 457 of the
Code. The waiver also applies to certain returns of excess contributions made to
these plans. In all cases, the distributions must be free from penalty under the
Code.

(bullet) Redemptions due to death or disability.

(bullet) Redemptions made under the Reinvestment Privilege, as described in
"Additional Services and Programs" of this Prospectus.

(bullet) Redemptions made pursuant to the Fund's right to liquidate your account
if you own fewer than 50 shares.

(bullet) Redemptions made in connection with certain liquidation, merger or
acquisition transactions involving other investment companies or personal
holding companies.

(bullet) Redemptions from certain IRA and retirement plans that purchased shares
prior to October 1, 1992.

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

Conversion of Class B Shares. Your Class B shares, and an appropriate portion of
reinvested dividends on those shares, will be converted into Class A shares
automatically. This will occur at the end of the month eight years after the
shares were purchased, and will result in lower annual distribution fees. If you
exchanged Class B shares into this Fund from another John Hancock fund, the
calculation will be based on the time you purchased the shares in the original
fund. The Fund has been advised that the conversion of Class B shares to Class A
shares should not be taxable for Federal income tax purposes, nor should it not
change your tax basis or tax holding period for the converted shares.

HOW TO REDEEM SHARES

You may redeem all or a portion of your shares on any business day. Your shares
will be redeemed at the next NAV calculated after your redemption request is
received in good order by Investor Services, less any applicable CDSC. The Fund
may hold payment until it is reasonably satisfied that investments recently made
by check or Invest-by-Phone have been collected (which may take up to 10
calendar days).

Once your shares are redeemed, the Fund generally sends you payment on the next
business day. When you redeem your shares, you may realize a taxable gain or
loss depending usually on the difference between what you paid for them and what
you receive for them, subject to certain tax rules. Under unusual circumstances,
the Fund may suspend redemptions or postpone payment for up to seven days or
longer, as permitted by Federal securities laws.

18
<PAGE>

To assure acceptance of your redemption request, please follow these procedures.

By Telephone

All Fund shareholders are automatically eligible for the telephone redemption
privilege. Call 1-800-225-5291, from 8:00 A.M. to 4:00 P.M. (New York time),
Monday through Friday, excluding days on which the New York Stock Exchange is
closed. Investor Services employs the following procedures to confirm that
instructions received by telephone are genuine. Your name, the account number,
taxpayer identification number applicable to the account and other relevant
information may be requested. In addition, telephone instructions are recorded.

You may redeem up to $100,000 by telephone, but the address on the account must
not have changed for the last 30 days. A check will be mailed to the exact
name(s) and address shown on the account.

If reasonable procedures, such as those described above, are not followed, the
Fund may be liable for any loss due to unauthorized or fraudulent telephone
instructions. In all other cases, neither the Fund nor Investor Services will be
liable for any loss or expense for acting upon telephone instructions made in
accordance with the telephone transaction procedures mentioned above.

Telephone redemption is not available for IRAs or other tax-qualified retirement
plans or shares of the Fund that are in certificate form.

During periods of extreme economic conditions or market changes, telephone
requests may be difficult to implement due to a large volume of calls. During
these times you should consider placing redemption requests in writing or using
EASI-Line. EASI-Line's telephone number is 1-800-538-8080.

By Wire

If you have a telephone redemption form on file with the Fund, redemption
proceeds of $1,000 or more can be wired on the next business day to your
designated bank account, and a fee (currently $4.00) will be deducted. You may
also use electronic funds transfer to your assigned bank account, and the funds
are usually collectable after two business days. Your bank may or may not charge
for this service. Redemptions of less than $1,000 will be sent by check or
electronic funds transfer.

This feature may be elected by completing the "Telephone Redemption" section on
the Account Privileges Application that is included with this Prospectus.

In Writing

Send a stock power or letter of instruction specifying the name of the Fund, the
dollar amount or the number of shares to be redeemed, your name, class of
shares, your account number and the additional requirements listed below that
apply to your particular account.

Who may guarantee your signature

Additional information about redemptions

Type of Registration Requirements
Individual, Joint Tenants, Sole A letter of instruction signed (with
Proprietorship, Custodial (Uniform titles where applicable) by all persons
Gifts or Transfer to Minors Act), authorized to sign for the account,
General Partners. exactly as it is registered with the
signature(s) guaranteed.

Corporation, Association A letter of instruction and
a corporate resolution, signed by
person(s) authorized to act on the
account, with the signature(s)
guaranteed.

Trusts A letter of instruction signed by the
Trustee(s) with the signature(s)
guaranteed. (If the Trustee's name is
not registered on your account, also
provide a copy of the trust document,
certified within the last 60 days.)

If you do not fall into any of these registration categories, please call
1-800-225-5291 for further instructions.

19
<PAGE>

A signature guarantee is a widely accepted way to protect you and the Fund by
verifying the signature on your request. It may not be provided by a notary
public. If the net asset value of the shares redeemed is $100,000 or less, John
Hancock Funds may guarantee the signature. The following institutions may
provide you with a signature guarantee, provided that the institution meets
credit standards established by Investors Services: (i) a bank; (ii) a
securities broker or dealer, including a government or municipal securities
broker or dealer, that is a member of a clearing corporation or meets certain
net capital requirements; (iii) a credit union having authority to issue
signature guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, a federal savings bank or association; or (v) a
national securities exchange, a registered securities exchange or a clearing
agency.

Through Your Broker

Your broker may be able to initiate the redemption. Contact him or her for
instructions.

If you have certificates for your shares, you must submit them with your stock
power or a letter of instruction. Unless you specify to the contrary, any
outstanding Class A shares will be redeemed before Class B shares. You may not
redeem certificated shares by telephone.

Due to the proportionately high cost of maintaining smaller accounts, the Fund
reserves the right to redeem at net asset value all shares in an account which
holds fewer than 50 shares (except accounts under retirement plans) and to mail
the proceeds to the shareholder, or the transfer agent may impose an annual fee
of $10. No account will be involuntarily redeemed or additional fee imposed, if
the value of the account is in excess of the Fund's minimum initial investment.
No CDSC will be imposed on involuntary redemptions of shares.

Shareholders will be notified before these redemptions are to be made or this
fee is imposed, and will have 30 days to purchase additional shares to bring
their account balance up to the required minimum. Unless the number of shares
acquired by further purchases and dividend reinvestments, if any, exceeds the
number of shares redeemed, repeated redemptions from a smaller account may
eventually trigger this policy.

ADDITIONAL SERVICES AND PROGRAMS

Exchange Privilege

You may exchange shares of the Fund
only for shares of the same class of
another John Hancock fund.

If your investment objective changes, or if you wish to achieve further
diversification, John Hancock offers other funds with a wide range of investment
goals. Contact your registered representative or Selling Broker and request a
prospectus for the John Hancock funds that interest you. Read the prospectus
carefully before exchanging your shares. You can exchange shares of each class
of the Fund only for shares of the same class of another John Hancock fund. For
this purpose, John Hancock funds with only one class of shares will be treated
as Class A whether or not they have been so designated.

Exchanges between funds that are not subject to a CDSC are based on their
respective net asset values. No sales charge or transaction charge is imposed.
Class B shares of the Fund that are subject to a CDSC may be exchanged for Class
B shares of another John Hancock fund without incurring the CDSC; however these
shares will be subject to the CDSC schedule of the shares acquired (except that
exchanges into John Hancock Short-Term Strategic Income Fund, John Hancock
Adjustable U.S. Government Trust and John Hancock Limited-Term Government Fund
will be subject to the initial fund's CDSC). For purposes of computing the CDSC
payable upon redemption of shares acquired in an exchange, the holding period of
the original shares is added to the holding period of the shares acquired in an
exchange. However, if you exchange Class B shares purchased prior to January 1,
1994 for Class B shares of any other John Hancock fund, you will continue to be
subject to the CDSC schedule that was in effect at your initial purchase date.

20
<PAGE>

You may exchange Class B shares of the Fund into a John Hancock money market
fund at net asset value. However, you will continue to be subject to a CDSC upon
redemption.

The Fund reserves the right to require that you keep previously exchanged shares
(and reinvested dividends) in the Fund for 90 days before you are permitted a
new exchange. The Fund may also terminate or alter the terms of the exchange
privilege, upon 60 days' notice to shareholders.

An exchange of shares is treated as a redemption of shares of one fund and the
purchase of shares in another fund for Federal income tax purposes. An exchange
may result in a taxable gain or loss.

When you make an exchange, your account registration in both the existing and
new account must be identical. The exchange privilege is available only in
states where the exchange can be made legally.

Under exchange agreements with John Hancock Funds, certain dealers, brokers and
investment advisers may exchange their clients' Fund shares, subject to the
terms of those agreements and John Hancock Funds' right to reject or suspend
those exchanges at any time. Because of the restrictions and procedures under
those agreements, the exchanges may be subject to timing limitations and other
restrictions that do not apply to exchanges requested by shareholders directly,
as described above.

Because Fund performance and shareholders can be hurt by excessive trading, the
Fund reserves the right to terminate the exchange privilege for any person or
group that, in John Hancock Funds' judgment, is involved in a pattern of
exchanges that coincide with a "market timing" strategy that may disrupt the
Fund's ability to invest effectively according to its investment objective and
policies, or might otherwise affect the Fund and its shareholders adversely. The
Fund may also temporarily or permanently terminate the exchange privilege for
any person who makes seven or more exchanges out of the Fund per calendar year.
Accounts under common control or ownership will be aggregated for this purpose.
Although the Fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time.

By Telephone

1. When you fill out the application for your purchase of Fund shares, you
automatically authorize exchanges by telephone unless you check the box
indicating that you do not wish to authorize telephone exchanges.

2. Call 1-800-225-5291. Have the account number of your current fund and the
exact name in which it is registered available to give to the telephone service
representative.

3. Your name, the account number, taxpayer identification number applicable to
the account and other relevant information may be requested. In addition,
telephone instructions are recorded.

21
<PAGE>

In Writing

1. In a letter request an exchange and list the following: -- the name and class
of the fund whose shares you currently own -- your account number -- the name(s)
in which the account is registered -- the name of the fund in which you wish
your exchange to be invested -- the number of shares, all shares or the dollar
amount you wish to exchange Sign your request exactly as the account is
registered.

2. Mail the request and information to:

John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

Reinvestment Privilege

If you redeem shares of the Fund, you may be able to reinvest the proceeds in
shares of the Fund or another John Hancock fund without paying an additional
sales charge.

1. You will not be subject to a sales charge on Class A shares that you reinvest
in any John Hancock fund that is otherwise subject to a sales charge, as long as
you reinvest within 120 days from the redemption date. If you paid a CDSC upon a
redemption, you may reinvest at net asset value in the same class of shares from
which you redeemed within 120 days. Your account will be credited with the
amount of the CDSC previously charged, and the reinvested shares will continue
to be subject to a CDSC. The holding period of the shares acquired through
reinvestment, for purposes of computing the CDSC payable upon a subsequent
redemption, will include the holding period of the redeemed shares.

2. Any portion of your redemption may be reinvested in Fund shares or in shares
of any of the other John Hancock funds, subject to the minimum investment limit
of that fund.

3. To reinvest, you must notify Investor Services in writing. Include the
Fund(s) name, account number and class from which your shares were originally
redeemed.

Systematic Withdrawal Plan

You can pay routine bills from your account, or make periodic disbursements from
your retirement account to comply with IRS regulations.

1. You can elect the Systematic Withdrawal Plan at any time by completing the
Account Privileges Application which is attached to this Prospectus. You can
also obtain the application by calling your registered representative or by
calling 1-800-225-5291.

2. To be eligible, you must have at least $5,000 in your account.

3. Payments from your account can be made monthly, quarterly, semi-annually or
annually or on a selected monthly basis to yourself or any other designated
payee.

4. There is no limit on the number of payees you may authorize, but all payments
must be made at the same time or intervals.

5. It is not advantageous to maintain a Systematic Withdrawal Plan concurrently
with purchases of additional Class A or Class B shares because you may be
subject to an initial sales charge on your purchases of Class A shares or a CDSC
on your redemptions of Class B shares. In addition, your redemptions are taxable
events.

22
<PAGE>

6. Redemptions will be discontinued if the U.S. Postal Service cannot deliver
your checks, or if deposits to a bank account are returned for any reason.

Monthly Automatic Accumulation Program (MAAP)

You can make automatic investments and simplify your investing.

1. You can authorize an investment to be drawn automatically each month from
your bank for investment in Fund shares, under the "Automatic Investing" and
"Bank Information" sections of the Account Privileges Application.

2. You can also authorize automatic investing through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.

3. You can terminate your Monthly Automatic Accumulation Program at any time.

4. There is no charge to you for this program, and there is no cost to the Fund.

5. If you have payments being withdrawn from a bank account and we are notified
that the account has been closed, your withdrawals will be discontinued.

Group Investment Program

Organized groups of at least four persons may establish accounts.

1. An individual account will be established for each participant, but the
initial sales charge for Class A shares will be based on the aggregate dollar
amount of all participants' investments. To determine how to qualify for this
program, contact your registered representative or call 1-800-225-5291.

2. The initial aggregate investment of all participants in the group must be at
least $250.

3. There is no additional charge for this program. There is no obligation to
make investments beyond the minimum, and you may terminate the program at any
time.

Retirement Plans

1. You may use the Fund to fund various types of qualified retirement plans,
including Individual Retirement Accounts, Keogh Plans (H.R. 10), Pension and
Profit Sharing Plans (including 401(k) plans), Tax-Sheltered Annuity Retirement
Plans (403(b) or TSA Plans) and 457 Plans.

2. The initial investment minimum or aggregate minimum for any of these plans is
$250. However, accounts being established as group IRA, SEP, SARSEP, TSA, 401(k)
and 457 Plans will be accepted without an initial minimum investment.

John Hancock Growth Fund

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

Custodian
Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110

Transfer Agent
John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

Independent Auditors
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

HOW TO OBTAIN INFORMATION
ABOUT THE FUND

For: Service Information
Telephone Exchange call 1-800-225-5291
Investment-by-Phone
Telephone Redemption
For: TDD call 1-800-554-6713

JH2000P 5/95

<PAGE>

JOHN HANCOCK
GROWTH FUND

Class A and Class B Shares
Prospectus
May 1, 1995

A mutual fund seeking to achieve long-term capital appreciation.

101 Huntington Avenue
Boston, Massachusetts 02199-7603
Telephone 1-800-225-5291

(Recycle Logo) Printed on Recycled Paper

John Hancock
Special Value Fund
Class A and Class B Shares
Prospectus
May 1, 1995

TABLE OF CONTENTS

Page
Expense Information 2
The Fund's Financial Highlights 3
Investment Objective and Policies 4
Organization and Management of the Fund 8
Alternative Purchase Arrangements 9
The Fund's Expenses 11
Dividends and Taxes 12
Performance 13
How to Buy Shares 13
Share Price 15
How to Redeem Shares 20
Additional Services and Programs 22

This Prospectus sets forth information about John Hancock Special Value Fund
(the "Fund"), a diversified series of John Hancock Capital Series (the "Trust")
that you should know before investing. Please read and retain it for future
reference.

Additional information about the Fund has been filed with the Securities and
Exchange Commission (the "SEC"). You can obtain a copy of the Fund's Statement
of Additional Information, dated May 1, 1995, and incorporated by reference in
this Prospectus, free of charge by writing to or by telephoning: John Hancock
Investor Services Corporation, Post Office Box 9116, Boston, Massachusetts
02205-9116, 1-800-225-5291 (1-800-554-6713 TDD).

Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, and the shares are not federally insured by the Federal
Deposit Insurance Corporation, the Federal Reserve Board, or any other agency.

1
<PAGE>

EXPENSE INFORMATION

The purpose of the following information is to help you understand the various
fees and expenses you will bear, directly or indirectly, when you purchase Fund
shares. The operating expenses included in the table and hypothetical example
below are based on fees and expenses of the Fund's Class A and Class B shares
for the Fund's fiscal year ended December 31, 1994. Actual fees and expenses in
the future may be greater or less than those indicated.

<TABLE>
<CAPTION>
Class A Class B
Shares Shares
<S> <C> <C>
Shareholder Transaction Expenses
Maximum sales charge imposed on purchases (As a percentage of offering price) 5.00% None
Maximum sales charge imposed on reinvested dividends None None
Maximum deferred sales charge None* 5.00%
Redemption fee+ None None
Exchange fee None None
Annual Fund Operating Expenses (As a percentage of average net assets)
Management fee 0.70% 0.70%
12b-1 fee** 0.30% 1.00%
Other expenses 3.83% 3.96%
Total gross expenses 4.83% 5.66%
Management fee waiver and expense reimbursement (3.98)% (3.98)%
Total net Fund operating expenses 0.85% 1.68%
<FN>
*No sales charge is payable at the time of purchase on investments of $1 million or more, but a contingent deferred
sales charge of up to 1.00% may be imposed on these investments, as described under the caption "Share Price," in the
event of certain redemption transactions within one year of purchase.
**The amount of the 12b-1 fee used to cover service expenses will be up to 0.25% of the Fund's average net assets, and
the remaining portion will be used to cover distribution expenses. Distribution expenses under the Class A Plan are
not carried beyond one year from the date these expenses were incurred. Unreimbursed expenses under the Class B Plan
will be carried forward with interest. See "The Fund's Expenses."
+Redemption by wire fee (currently $4.00) not included.
(a)Total net Fund operating expenses in the table reflect estimated expenses, net of the Advisers reimbursement or
waiver of the management fee and other expenses (but not including the transfer agent fee and the 12b-1 fee) in excess
of 0.40% of the Fund's average net assets.
</FN>
</TABLE>

<TABLE>
<CAPTION>
Example 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
You would pay the following expenses for the indicated period of years
on a hypothetical $1,000 investment, assuming a 5% annual return:
Class A Shares $58 $76 $ 95 $150
Class B Shares
--Assuming complete redemption at end of period $67 $83 $111 $170
--Assuming no redemption $17 $53 $ 91 $177
</TABLE>

(This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.)

The management and 12b-1 fees referenced above are more fully explained in this
Prospectus under the caption "The Fund's Expenses" and in the Statement of
Additional Information under the captions "Investment Advisory and Other
Services" and "Distribution Contract."

2
<PAGE>

THE FUND'S FINANCIAL HIGHLIGHTS

The following table of Financial Highlights has been audited by Ernst & Young
LLP, the Fund's independent auditors whose unqualified report is included in
the Fund's 1994 Annual Report and is included in the Statement of Additional
Information. Further information about the performance of the Fund is contained
in the Fund's Annual Report to Shareholders, that may be obtained free of
charge by writing or telephoning John Hancock Investor Services Corporation
("Investor Services") at the address or telephone number listed on the front
page of this Prospectus.

Selected data for each class of shares outstanding throughout each period
indicated is as follows:

<TABLE>
<CAPTION>
For the Period from
January 3, 1994
(Commencement of Operations)
to December 31, 1994
<S> <C>
CLASS A
Per Share Operating Performance
Net Asset Value, Beginning of Period $ 8.50(e)
Net Investment Income 0.18(b)
Net Unrealized Gain on Investments 0.48
Total from Investment Operations 0.66
Less Distributions:
Dividends from Net Investment Income (0.17)
Net Asset Value, End of Period $ 8.99
Total Investment Return at Net Asset Value (d) 7.81%(c)
Ratios and Supplemental Data
Net Assets, End of Period (000's omitted) $4,420
Ratio of Net Expenses to Average Net Assets** 0.99%*
Ratio of Adjusted Expenses to Average Net Assets (a) 4.98%*
Ratio of Net Investment Income to Average Net Assets 2.10%*
Ratio of Adjusted Net Investment Income to Average Net Assets (a) (1.89%)*
Portfolio Turnover Rate 0.3%
**Expense Reimbursement Per Share $ 0.34(b)
CLASS B
Per Share Operating Performance
Net Asset Value, Beginning of Period $ 8.50
Net Investment Income 0.13(b)
Net Unrealized Gain on Investments 0.48
Total from Investment Operations 0.61
Less Distributions:
Dividends from Net Investment Income (0.11)
Net Asset Value, End of Period $ 9.00
Total Investment Return at Net Asset Value (d) 7.15%(c)
Ratios and Supplemental Data
Net Assets, End of Period (000's omitted) $3,296
Ratio of Net Expenses to Average Net Assets** 1.72%*
Ratio of Adjusted Expenses to Average Net Assets(a) 5.71%*
Ratio of Net Investment Income to Average Net Assets 1.53%*
Ratio of Adjusted Net Investment Income to Average Net Assets (a) (2.46%)*
Portfolio Turnover Rate 0.3%
**Expense Reimbursement Per Share $ 0.34(b)
</TABLE>
* On an annualized basis.
(a) On an unreimbursed basis.
(b) On average month end shares outstanding.
(c) Not annualized.
(d) Without the reimbursement, total investment return would have been lower.
(e) Initial price to commence operations.

3
<PAGE>

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is to
seek capital appreciation with income
as a secondary objective.

The Fund's investment objective is to seek capital appreciation with income as
a secondary consideration. The Fund will seek to achieve its objective by
investing primarily in equity securities that are undervalued when compared to
alternative equity investments. There is no assurance that the Fund will
achieve its investment objective.

The Fund will emphasize equity
securities that are undervalued
compared to alternative equity
investments.

The equity securities in which the Fund will invest consist of common stocks,
preferred stocks, convertible debt securities and warrants of U.S. and foreign
issuers. In selecting equity securities for the Fund, John Hancock Advisers,
Inc. (the "Adviser") and NM Capital Management Inc. (the "Sub-Adviser" and
together with the Adviser, the "Advisers") emphasize issuers whose equity
securities trade at market to book value ratios lower than comparable issuers
or the Standard & Poor's Composite Index. The Fund's portfolio securities will
also include those considered by the Advisers to have the potential for capital
appreciation due to potential recognition of earnings power or asset value
which is not fully reflected in such securities' current market value. The
Advisers attempt to identify investments that have characteristics, such as
high relative value, intrinsic value, going concern value, net asset value and
replacement book value, that are believed to limit sustained downside price
risk. This is generally referred to as the "margin of safety" concept. The
Advisers also consider an issuer's financial strength, competitive position,
projected future earnings and dividends and other investment criteria. These
securities are collectively referred to as "Special Value" securities.

The Fund's investment policy reflects the Advisers' belief that, while the
securities markets tend to be efficient, sufficiently persistent price
anomalies exist which the strategically disciplined active equity manager can
exploit in seeking to achieve an above-average rate of return. Based on this
premise, the Advisers have adopted a strategy of investing in low market to
book value, out of favor, stocks.

The Fund may invest in the securities
of smaller, less well-known issuers,
which may involve certain risks.

The Fund's investments may include securities of both large, widely traded
companies and smaller, less well known issuers. Higher risks are often
associated with investments in companies with smaller market capitalizations.
These companies may have limited product lines, markets and financial
resources, or they may be dependent upon smaller or inexperienced management
groups. In addition, trading volume of these securities may be limited, and
historically the market price for these securities has been more volatile than
securities of companies with greater capitalization. However, securities of
companies with smaller capitalization may offer greater potential for capital
appreciation, since they may be overlooked and thus undervalued by investors.

The Fund may also invest in fixed
income securities.

The Fund may also invest in fixed income securities, consisting of U.S.
Government securities and convertible and non-convertible corporate preferred
stocks and debt securities. The market value of fixed income securities varies
inversely with changes in the prevailing levels of interest rates. The market
value of convertible securities, while influenced by the prevailing level of
interest rates, is also affected by the changing value of the equity securities
into which they are convertible. The Fund may purchase fixed income debt
securities with stated maturities of up to thirty years. The corporate fixed
income securities in which the Fund may invest, including convertible

4
<PAGE>

debt securities and preferred stock, will be rated at least BBB by Standard &
Poors' Ratings Group ("S&P") or Moody's Investors Service, Inc. ("Moody's") or,
if unrated, determined to be of comparable quality by the Advisers. Under
normal market conditions, the Fund's investments in fixed income securities are
not expected to exceed 10% of the Fund's net assets. Debt securities rated Baa
or BBB are considered medium grade obligations with speculative
characteristics, and adverse economic conditions or changing circumstances may
weaken capacity to pay interest and repay principal. If the rating of a debt
security is reduced below Baa or BBB, the Advisers will sell it when it is
appropriate consistent with the Fund's investment objective and policies.

When the Advisers believe unfavorable investment conditions exist requiring the
Fund to assume a temporary defensive investment posture, the Fund may hold cash
or invest all or a portion of its assets in short-term instruments which are
rated A-1 by S&P or P-1 by Moody's.

The Fund may employ certain
investment strategies to help achieve
its investment objective.

Foreign Securities. The Fund may invest up to 50% of its assets in securities
of foreign issuers, including American Depositary Receipts ("ADRs"). ADRs
(sponsored or unsponsored) are receipts typically issued by an American bank or
trust company. They evidence ownership of underlying securities issued by a
foreign corporation, and are designed for trading in United States securities
markets. Issuers of the shares underlying unsponsored ADRs are not
contractually obligated to disclose material information in the United States
and, therefore, there may not be a correlation between that information and the
market value of the unsponsored ADR.

Foreign Currencies. The Fund will not speculate in foreign currencies or in
forward foreign currency exchange contracts, but will enter into these
transactions only in connection with its hedging strategy, to protect against
changes in foreign currency exchange rates. A forward foreign currency exchange
contract involves an obligation to purchase or sell a specific currency at a
future date at a price set at the time of the contract. Although certain
strategies could minimize the risk of loss due to a decline in the value of the
hedged foreign currency, they could also limit any potential gain that might
result from an increase in the value of the currency in which the hedged
security is quoted or denominated.

Futures Contracts and Options on Futures. The Fund may buy and sell stock index
and other financial futures contracts and options on futures contracts to hedge
against changes in securities prices, interest rates and currency exchange
rates and other market conditions or for speculative purposes. The potential
loss incurred by the Fund in writing options on futures is unlimited and may
exceed the amount of the premium received. The Fund's futures contracts and
options on futures will be traded on a U.S. or foreign commodity exchange or
board of trade. The Fund will not engage in a futures or options transaction
for speculative purposes, if immediately thereafter, the sum of initial margin
deposits on the existing positions and premiums required to establish its
speculative positions exceeds 5% of the Fund's net assets. The Fund intends to
comply with the CFTC regulations with respect to its speculative transactions.
These regulations are discussed further in the Statement of Additional
Information.

5
<PAGE>

Options Transactions Within Prescribed Limitations. The Fund may write (sell)
listed and over-the-counter covered call and put options on securities in which
it may invest, and on indices composed of securities in which it may invest, on
up to 100% of its net assets. The Fund may also purchase put and call options
on these securities and indices. All call options written by the Fund are
covered, this means that the Fund will own the securities subject to the option
so long as the option is outstanding. All put options written by the Fund are
also covered, which means that the Fund will have deposited with its custodian
cash liquid high grade debt securities with a value at least equal to the
exercise price of the put option. Call and put options written by the Fund will
also be considered to be covered to the extent that the Fund's liabilities
under these options are wholly or partially offset by its rights under call and
put options that it purchases. The Fund will treat purchased over-the-counter
options and assets used to cover written over-the-counter options as illiquid
securities. However, with respect to options written with primary dealers in
U.S. Government securities pursuant to an agreement requiring a closing
purchase transaction at a formula price, the amount of illiquid securities may
be calculated with reference to the formula price.

While transactions in options and futures contracts may reduce certain risks,
these transactions entail other risks. Certain risks arise due to the imperfect
correlations between movements in the price of options and futures contracts
and the movements in the prices of the underlying securities or currency. In
addition, the Fund could be prevented from opening, or realizing the benefits
of closing out, a futures or options position because of position limits or
limits on daily price fluctuations imposed by an exchange. There can be no
assurance that a liquid secondary market will exist for any option or futures
contract. The Fund's ability to hedge successfully will depend on the Advisers'
ability to predict accurately the future direction of securities and currency
markets and interest rates. Transactions in futures contracts involve brokerage
costs, require margin deposits and require the Fund to segregate liquid high
grade debt securities in an amount equal to the value of the contracts.

Lending of Securities. The Fund may lend portfolio securities to brokers,
dealers and financial institutions if the loan is collateralized according to
applicable regulatory requirements. The Fund may reinvest any cash collateral
in short-term securities. When the Fund lends portfolio securities, there is a
risk that the borrower may fail to return the securities. As a result, the Fund
may incur a loss or, in the event of the borrower's bankruptcy, the Fund may be
delayed in or prevented from liquidating the collateral. It is a fundamental
policy of the Fund not to lend portfolio securities having a total value in
excess of 33-1/3% of its total assets.

Restricted Securities. The Fund may purchase restricted securities, including
those eligible for resale to "qualified institutional buyers" pursuant to Rule
144A under the Securities Act of 1933 (the "Securities Act"). The Trustees will
monitor the Fund's investments in these securities, focusing on certain
factors, including valuation, liquidity and availability of information.
Purchases of restricted securities are subject to an investment restriction
limiting all the Fund's illiquid securities to not more than 15% of its net
assets.

Repurchase Agreements, Forward Commitments and When-Issued Securities. The Fund
may enter into repurchase agreements and may purchase securities on a for-

6
<PAGE>

ward commitment or when-issued basis. In a repurchase agreement, the Fund buys
a security subject to the right and obligation to sell it back at a higher
price. These transactions must be fully collateralized at all times, but
involve some credit risk to the Fund if the other party defaults on its
obligation and the Fund is delayed in or prevented from liquidating the
collateral. The Fund will segregate in a separate account cash or liquid, high
grade debt securities equal in value to its forward commitments and when-issued
securities. Purchasing securities for future delivery or on a when-issued basis
may increase the Fund's overall investment exposure, and involves a risk of
loss if the value of the securities declines before the settlement date.

Although the Fund does not intend to invest for the purpose of seeking
short-term profits, the Fund's particular portfolio securities may be changed
without regard to their holding period (subject to certain tax restrictions)
when the Advisers deem that this action is appropriate in view of a change in
the issuer's financial or business operations or changes in general market
conditions. It is anticipated that, under normal market conditions, the Fund's
annual portfolio turnover rate will be less than 100%.

Investments in foreign
securities may involve risks
that are not present in
domestic investments.

Global Risks. Investments in foreign securities may involve risks not present
in domestic investments due to exchange controls, less publicly available
information, more volatile or less liquid securities markets, and the
possibility of expropriation, confiscatory taxation or political, economic or
social instability. There may be difficulty in enforcing legal rights outside
the United States. Some foreign companies are not subject to the same uniform
financial reporting requirements, accounting standards and government
supervision as domestic companies, and foreign exchange markets are regulated
differently from the American stock market. Security trading practices abroad
may offer less protection to investors such as the Fund. In addition, foreign
securities may be denominated in the currency of the country in which the
issuer is located. Consequently, changes in foreign exchange rates will affect
the value of the Fund's shares and dividends. Finally, the expense ratios of
international funds generally are higher than those of domestic funds. This is
because there are greater costs associated with maintaining custody of foreign
securities, and the increased research necessary for international investing.

These risks may be intensified in the case of investments in emerging markets
or countries with limited or developing capital markets. These countries are
located in the Asia-Pacific region, Eastern Europe, Latin and South America and
Africa. Security prices in these markets can be significantly more volatile
than in more developed countries, reflecting the greater uncertainties of
investing in less established markets and economies. Political, legal and
economic structures in many of these emerging market countries may be
undergoing significant evolution and rapid development, and they may lack the
social, political, legal and economic stability characteristic of more
developed countries. Emerging market countries may have failed in the past to
recognize private property rights. They may have relatively unstable
governments, present the risk of nationalization of businesses, restrictions on
foreign ownership, or prohibitions on repatriation of assets, and may have less
protection of property rights than more developed countries. Their economies
may be predominatly based on only a few industries, may be highly vulnerable to
changes in local or global trade conditions, and may suffer from extreme and
volatile debt burdens, unstable curren-

7
<PAGE>

cies or inflation rates. Local securities markets may trade a small number of
securities and may be unable to respond effectively to increases in trading
volume, potentially making prompt liquidation of substantial holdings difficult
or impossible at times. The Fund may be required to establish special custodial
or other arrangements before making certain investments in those countries.
Securities of issuers located in these countries may have limited marketability
and may be subject to more abrupt or erratic price movements.

The Fund follows certain policies
which may help to reduce investment
risk.

Investment Restrictions. The Fund has adopted certain investment restrictions
that are detailed in the Statement of Additional Information, where they are
classified as fundamental or nonfundamental. Those restrictions designated as
fundamental may not be changed without shareholder approval. The Fund's
investment objective and all other investment policies and restrictions,
however, are nonfundamental and can be changed by a vote of the Trustees
without shareholder approval. These changes may result in the Fund having an
investment objective different from the objective which you considered
appropriate at the time of your investment. The Fund's portfolio turnover rate
is shown in the section "The Fund's Financial Highlights."

Brokers are chosen based on best
price and execution.

When choosing brokerage firms to carry out the Fund's transactions, the Adviser
gives primary consideration to execution at the most favorable prices, taking
into account the broker's professional ability and quality of service.
Consideration may also be given to the broker's sales of Fund shares. Pursuant
to procedures established by the Trustees, the Adviser may place securities
transactions with brokers affiliated with the Adviser. These brokers include
Tucker, Anthony Incorporated, John Hancock Distributors, Inc. and Sutro &
Company, Inc. which are indirectly owned by John Hancock Mutual Life Insurance
Company, which in turn indirectly owns the Adviser.

ORGANIZATION AND MANAGEMENT OF THE FUND

The Trustees elect officers and
retain the investment adviser who is
responsible for the day-to-day
operations of the Fund, subject to
the Trustees' policies and
supervision.

The Fund is a separate, diversified portfolio of the Trust, an open-end
management investment company organized as a Delaware corporation, then
reorganized as a Massachusetts business trust in 1984. The Trust has an
unlimited number of authorized shares of beneficial interest. The Trust's
Declaration of Trust permits the Trustees, without shareholder approval, to
create and classify shares of beneficial interest into separate series of the
Trust. As of the date of this Prospectus, the Trustees have authorized the Fund
and one other series. Additional series may be added in the future. The Trust's
Declaration of Trust also permits the Trustees to classify and reclassify any
series or portfolio of shares into one or more classes. Accordingly, the
Trustees have authorized the issuance of two classes 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 as to
voting, redemption, dividends and liquidation. However, each class bears
different distribution and transfer agent fees, and Class A and Class B
shareholders have exclusive voting rights with respect to their distribution
plans.

8
<PAGE>

Shareholders have certain voting rights to remove Trustees. The Fund is not
required and does not intend to hold annual meetings of shareholders, although
special meetings may be held for such purposes as electing or removing
Trustees, changing fundamental investment restrictions and policies or
approving a management contract. The Fund, under certain circumstances, will
assist in shareholder communications with other shareholders.

John Hancock Advisers, Inc. advises
investment companies having a total
asset value of more than
$13 billion.

The Adviser was organized in 1968 and is a wholly-owned indirect subsidiary of
the John Hancock Mutual Life Insurance Company, a financial services company.
It manages the investment operations of the Fund and provides the Fund, and
other investment companies in the John Hancock group of funds, with investment
research and portfolio management services. Pursuant to a Subadvisory Agreement
between the Adviser and NM Capital Management, Inc. (the "Sub-Adviser"), the
Sub-Adviser, subject to the overall responsibility of the Adviser, manages the
composition of the Fund's portfolio.

Organized in 1977, the Sub-Adviser is also an indirect subsidiary of John
Hancock Mutual Life Insurance Company and provides investment advice and
advisory services to private accounts totalling approximately $950 million.

The Sub-Adviser's investment decisions are made by a portfolio management team
consisting of three people. Thomas S. Christopher has over twenty-five years of
experience in investment management, including trust and investment counseling,
and has been with the Sub-Adviser since 1985. Charles H. Womack also has over
twenty years of investment management experience and a background in investment
counseling, portfolio analysis and institutional sales. He has been with the
Sub-Adviser since 1986. Angela J. Bristow serves as Senior Equity Analyst and
Equity Strategist. She has been with the Sub-Adviser since 1991 and has over
thirteen years of investment experience.

John Hancock Funds, Inc. ("John Hancock Funds") distributes shares for all of
the John Hancock funds through selected broker-dealers ("Selling Brokers").
Certain Fund officers are also officers of the Adviser and John Hancock Funds.
Pursuant to an order granted by the Securities and Exchange Commission, the
Fund has adopted a deferred compensation plan for its independent Trustees
which allows Trustees' fees to be invested by the Fund in other John Hancock
funds.

ALTERNATIVE PURCHASE ARRANGEMENTS

9
<PAGE>

you do not specify on your account application the class of shares you are
purchasing, it will be assumed that you are investing in Class A shares.

Investments in Class A
shares are subject to an initial
sales charge.

Class A Shares. If you elect to purchase Class A shares, you will incur an
initial sales charge unless the amount you purchase is $1 million or more. If
you purchase $1 million or more of Class A shares, you will not be subject to
an initial sales charge, but you will incur a sales charge if you redeem your
shares within one year of purchase. Class A shares are subject to ongoing
distribution and service fees at a combined annual rate of up to 0.30% of the
Fund's average daily net assets attributable to the Class A shares. Certain
purchases of Class A shares qualify for reduced initial sales charges. See
"Share Price-- Qualifying for a Reduced Sales Charge."

Investments in Class B
shares are subject to a con-
tingent deferred sales charge.

Class B Shares. You will not incur a sales charge when you purchase Class B
shares, but the shares are subject to a sales charge if you redeem them within
six years of purchase (the "contingent deferred sales charge" or the "CDSC").
Class B shares are subject to ongoing distribution and service fees at a
combined annual rate of up to 1.00% of the Fund's average daily net assets
attributable to the Class B shares. Investing in Class B shares permits all of
your dollars to work from the time you make your investment, but the higher
ongoing distribution fee will cause these shares to have higher expenses than
that of Class A shares. To the extent that any dividends are paid by the Fund,
these higher expenses will also result in lower dividends than those paid on
Class A shares.

Factors to Consider in Choosing an Alternative

You should consider which
class of shares would be more
beneficial for you.

The alternative purchase arrangement allows you to choose the most beneficial
way to buy shares given the amount of your purchase, the length of time you
expect to hold the shares and other circumstances. You should consider whether,
during the anticipated life of your Fund investment, the CDSC and accumulated
fees on Class B shares would be less than the initial sales charge and
accumulated fees on Class A shares purchased at the same time, and to what
extent this differential would be offset by the Class A shares' lower expenses.
To help you make this determination, the table under the caption "Expense
Information" on page 2 of this Prospectus shows examples of the charges
applicable to each class of shares. Class A shares will normally be more
beneficial if you qualify for a reduced sales charge. See "Share
Price--Qualifying for a Reduced Sales Charge."

Class A shares are subject to lower distribution and service fees and,
accordingly, pay correspondingly higher dividends per share, to the extent that
any dividends are paid. However, because initial sales charges are deducted at
the time of purchase, you would not have all of your funds invested initially
and, therefore, would initially own fewer shares. If you do not qualify for
reduced initial sales charges and expect to maintain your investment for an
extended period of time, you might consider purchasing Class A shares. This is
because the accumulated distribution and service charges on Class B shares may
exceed the initial sales charge and accumulated distribution and service
charges on Class A shares during the life of your investment.

10
<PAGE>

In the case of Class A shares, distribution expenses incurred by John Hancock
Funds in connection with the sale of the shares will be paid from the proceeds
of the initial sales charge and the ongoing distribution and service fees. In
the case of Class B shares, expenses will be paid from the proceeds of the
ongoing distribution and service fees, as well as from the CDSC incurred upon
redemption within six years of purchase. The purpose and function of the CDSC
and ongoing distribution and service fees with respect to the Class B shares
are the same as those of the initial sales charge and ongoing distribution and
service fees with respect to the Class A shares. Sales personnel distributing
the Fund's shares may receive different compensation for selling each class of
shares.

Dividends if any, on Class A and Class B shares will be calculated in the same
manner, at the same time and on the same day. They will also be in the same
amount, except for differences resulting from each class bearing only its own
distribution and service fees, shareholder meeting expenses and any incremental
transfer agency costs relating to a class of shares will be borne exclusively
by such class. See "Dividends and Taxes."

THE FUND'S EXPENSES

For managing its investment and business affairs, the Fund pays a fee equal to
0.70% of its average daily net asset value. The Adviser pays the Subadviser 40%
of the fee received by the Adviser for managing the Fund. The Fund is not
responsible for payment of the Sub-Adviser's fee.

The Fund pays distribution and
service fees for marketing and
sales-related shareholder servicing.

The Class A and Class B shareholders have adopted distribution plans (each a
"Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the
"1940 Act"). Under the Plans the Fund will pay distribution and service fees at
an aggregate annual rate of up to 0.30% of the average daily net assets
attributable to the Class A shares and an aggregate annual rate of up to 1.00%
of the average daily net assets attributable to the Class B shares. In each
case, up to 0.25% is for service expenses and the remaining amount is for
distribution expenses. The distribution fees will be used to reimburse John
Hancock Funds for its distribution expenses, including but not limited to: (i)
initial and ongoing sales compensation to Selling Brokers and others (including
affiliates of John Hancock Funds) engaged in the sale of Fund shares, (ii)
marketing, promotional and overhead expenses incurred in connection with the
distribution of Fund shares and (iii) with respect to Class B shares only,
interest expenses on unreimbursed distribution expenses. The service fees will
be used to compensate Selling Brokers for providing personal and account
maintenance services to shareholders. In the event John Hancock Funds is not
fully reimbursed for payments it

11
<PAGE>

makes or expenses it incurs by it under the Class A Plan, these expenses will
not be carried beyond one year from the date these expenses were incurred.
However, unreimbursed expenses under the Class B Plan will be carried forward
together with interest at a discount from the market interest rates on the
balance of these unreimbursed expenses. For the period ended December 31, 1994
an aggregate of $181,121 of distribution expenses or 23.61% of the average net
assets of the Class B shares of the Fund, was not reimbursed or recovered by
John Hancock Funds through the receipt of deferred sales charges or 12b-1 fees
in prior periods.

Information on the Fund's total expenses is in the Fund's Financial Highlights
section of this Prospectus.

DIVIDENDS AND TAXES

Dividends. Dividends from the Fund's net investment income are generally
declared quarterly. Capital gains, if any, are generally declared annually.
Dividends are reinvested in additional shares of your class unless you elect the
option to receive them in cash. If you elect the cash option and the U.S. Postal
Service cannot deliver your checks, your election will be converted to the
reinvestment option. Because of the higher expenses associated with Class B
shares, any dividend on these shares will be lower than on the Class A shares.
See "Share Price."

Taxation. Dividends from the Fund's net investment income, certain net foreign
currency gains, and net short-term capital gains are taxable to you as ordinary
income. Dividends from the Fund's net long-term capital gains are taxable as
long-term capital gain. These dividends are taxable whether you take them in
cash or reinvest in additional shares. Certain dividends paid in January of a
given year may be taxable as if you received them the previous December.
Corporate shareholders may be entitled to take the corporate dividends received
deduction for dividends received by the Fund from U.S. domestic corporations,
subject to certain restrictions under the Internal Revenue Code of 1986, as
amended (the "Code"). The Fund will send you a statement by January 31 showing
the tax status of the dividends you received for the prior year.

On the account application, you must certify that your social security or other
taxpayer identification number is correct and that you are not subject to
backup withholding of Federal income tax. If you do not provide this
information or are otherwise subject to backup withholding, the Fund may be
required to withhold 31% of your dividends and the proceeds of redemptions and
exchanges.

The Fund may be subject to foreign withholding taxes or other foreign taxes on
income (possibly including capital gains) on certain of its foreign
investments. This will reduce the yield on those investments. The Fund will not
qualify to pass such taxes through to its shareholders, who consequently will
not include them in income or be entitled to associated foreign tax credits or
deductions.

12
<PAGE>

In addition to Federal taxes, you may be subject to state, local or foreign
taxes, with respect to your investment in and distributions from the Fund.
Non-U.S. shareholders and tax-exempt shareholders are subject to different tax
treatment not described above. You should consult your tax adviser for specific
advice.

PERFORMANCE

The Fund may advertise its total
return.

Total return calculations for Class A shares generally include the effect of
paying the maximum sales charge (except as shown in "The Fund's Financial
Highlights"). Investments at lower sales charges would result in higher
performance figures. Total return for the Class B shares reflect the deduction
of the applicable CDSC imposed on a redemption of shares held for the
applicable period. All calculations assume that all dividends are reinvested at
net asset value on the reinvestment dates during the periods. The total return
of Class A and Class B shares will be calculated separately and, because each
class is subject to different expenses, the total return may differ with
respect to that class for the same period. The relative performance of the
Class A and Class B shares will be affected by a variety of factors, including
the higher operating expenses attributable to the Class B shares, whether the
Fund's investment performance is better in the earlier or later portions of the
period measured and the level of net assets of the classes during the period.
The Fund will include the total return of Class A and Class B shares in any
advertisement or promotional materials including Fund performance data. The
value of Fund shares, when redeemed, may be more or less than their original
cost. Total return is a historical calculation and is not an indication of
future performance. See "Factors to Consider in Choosing an Alternative."

HOW TO BUY SHARES

Opening an account.

The minimum initial investment in Class A and B shares is $1,000 ($250 for
group investments and retirement plans). Complete the Account Application
attached to this Prospectus. Indicate whether you are purchasing Class A or
Class B shares. If you do not specify which class of shares you are purchasing,
it will be assumed that you are investing in Class A shares.

By Check

1. Make your check payable to John Hancock Investor Services Corporation
("Investor Services").

2. Deliver the completed application and check to your registered
representative or Selling Broker or mail it directly to Investor Services.

13
<PAGE>
By Wire

1. Obtain an account number by contacting your registered representative or
Selling Broker or by calling 1-800-225-5291.

2. Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock Special Value Fund
(Class A or Class B shares)
Your Account Number
Name(s) under which account is registered.

3. Deliver the completed application to your registered representative or
Selling Broker or mail it directly to Investor Services.

Buying additional shares

Monthly Automatic
Accumulation
Program (MAAP)

1. Complete the "Automatic Investing" and "Bank Information" sections on the
Account Privileges Application, designating a bank account from which funds may
be drawn.

2. The amount you elect to invest will be automatically withdrawn from your
bank or credit union account.

By Telephone

1. Complete the "Invest-By-Phone" and "Bank Information" sections on the
Account Privileges Application, designating a bank account from which funds may
be drawn. Note that in order to invest by phone, your account must be in a bank
or credit union that is a member of the Automated Clearing House system (ACH).

2. After your authorization form has been processed, you may purchase
additional Class A or Class B shares by calling Investor Services toll-free at
1-800-225-5291.

3. Give the Investor Services representative the name(s) in which your account
is registered, the Fund name, the class of shares you own, your account number,
and the amount you wish to invest.

4. Your investment normally will be credited to your account the business day
following your phone request.

By Check

2. Make your check payable to John Hancock Investor Services Corporation.

3. Mail the account information and check to:
John Hancock Investor Services Corporation
P.O. Box 9115
Boston, MA 02205-9115
or deliver it to your registered representative or Selling Broker.

By Wire

Instruct your bank to wire funds to:

First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock Special Value Fund
(Class A or Class B shares)
Your Account Number
Name(s) under which account is registered.

14
<PAGE>

Other Requirements. All purchases must be made in U.S. dollars. Checks written
on foreign banks will delay purchases until U.S. funds are received and a
collection charge may be imposed. Shares of the Fund are priced at the offering
price based on the net asset value computed after John Hancock Funds receives
notification of the dollar equivalent from the Fund's custodian bank. Wire
purchases normally take two or more hours to complete and, to be accepted the
same day, must be received by 4:00 P.M., New York time. Your bank may charge a
fee to wire funds. Telephone transactions are recorded to verify information.
Certificates are not issued unless a request is made in writing to Investor
Services.

Who may guarantee your signature.

Organized groups of at least four persons may establish accounts.

You will receive account statements which you should keep to help with
your personal recordkeeping.

SHARE PRICE

The offering price of your shares is
their net asset value plus a sales
charge, if applicable, which will
vary with the purchase alternative
you choose.

The net asset value per share ("NAV") is the value of one share. The NAV is
calculated by dividing the net assets of each class by the number of
outstanding shares of that class. The NAV of each class can differ. 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 according to procedures approved by the Trustees.
Short-term debt investments maturing within 60 days are valued at amortized
cost, which approximates market value. Foreign securities are valued on the
basis of quotations from the primary market in which they are traded and are
translated from the local currency into U.S. dollars using current exchange
rates. If accurate quotations are not readily available, or the value has been
materially affected by events occurring after the closing of a foreign market,
assets are valued by a method that the Trustees believe accurately reflects
fair value. The NAV is calculated once daily as of the close of regular trading
on the New York Stock Exchange (generally at 4:00 P.M., New York time) on each
day that the Exchange is open.

Initial Sales Charge Alternative--Class A Shares. The offering price you pay
for Class A shares of the Fund equals the NAV plus a sales charge as follows:

<TABLE>
<CAPTION>
Combined
Sales Charge Sales Charge Reallowance Reallowance
as a as a and Service to Selling
Percentage Percentage Fee as a Broker as a
of of the Percentage of Percentage
Amount Invested Offering Amount Offering of Offering
(Including Sales Charge) Price Invested Price(+) Price(*)
<S> <C> <C> <C> <C>
Less than $50,000 5.00% 5.26% 4.25% 4.01%
$50,000 to $99,999 4.50% 4.71% 3.75% 3.51%
$100,000 to $249,999 3.50% 3.63% 2.85% 2.61%
$250,000 to $499,999 2.50% 2.56% 2.10% 1.86%
$500,000 to $999,999 2.00% 2.04% 1.60% 1.36%
$1,000,000 and over 0.00%(**) 0.00%(**) (***) 0.00%(***)
</TABLE>

15
<PAGE>

(*) Upon notice to Selling Brokers with whom it has sales agreements, John
Hancock Funds may reallow an amount up to the full applicable sales charge. In
addition to the reallowance allowed to all Selling Brokers, John Hancock Funds
will pay the following: round trip airfare to a resort will be offered to each
registered representative of a Selling Broker (if the Selling Broker has agreed
to participate) who sells certain amounts of shares of John Hancock funds. John
Hancock Funds will make these incentive payments out of its own resources.
Other than distribution fees, the Fund does not bear distribution expenses. A
Selling Broker to whom substantially the entire sales charge is reallowed may
be deemed to be an underwriter under the Securities Act of 1933.

(**) No sales charge is payable at the time of purchase of Class A shares of $1
million or more, but a contingent deferred sales charge may be imposed in the
event of certain redemption transactions made within one year of purchase.

(***) John Hancock Funds may pay a commission and the first year's service fee
(as described in (+) below) to Selling Brokers who initiate and are responsible
for purchases of $1 million or more in the aggregate as follows: 1% on sales to
$4,999,999, 0.50% on the next $5 million and 0.25% on $10 million and over.

(+)At the time of sale, John Hancock Funds pays to Selling Brokers the first
year's service fee in advance, in an amount equal to 0.25% of the net assets
invested in the Fund. Thereafter, it pays the service fee periodically in
arrears in an amount up to 0.25% of the Fund's average annual net assets.
Selling Brokers receive the fee as compensation for providing personal and
account maintenance services to shareholders.

Sales charges ARE NOT APPLIED to any dividends that are reinvested in
additional Class A shares of the Fund.

John Hancock Funds will pay certain affiliated Selling Brokers at an annual
rate of up to 0.05% of the daily net assets of accounts attributable to these
brokers.

Under certain circumstances described below, investors in Class A shares may be
entitled to pay reduced sales charges. See "Qualifying For a Reduced Sales
Charge".

Contingent Deferred Sales Charge--Investments of $1 million or more in Class A
Shares. Purchases of $1 million or more of Class A shares will be made at net
asset value with no initial sales charge, but if the shares are redeemed within
12 months after the end of the calendar month in which the purchase was made
(the contingent deferred sales charge period), a contingent deferred sales
charge will be imposed. The rate of the CDSC will depend on the amount invested
as follows:

Amount Invested CDSC Rate
$1 million to $4,999,999 1.00%
Next $5 million to $9,999,999 0.50%
Amounts of $10 million and over 0.25%

16
<PAGE>

Fund account, may purchase Class A shares with no initial sales charge. However
if the shares are redeemed within 12 months after the end of the calendar year
in which the purchase was made, a contingent deferred sales charge will be
imposed at the above rate.

The charge will be assessed on an amount equal to the lesser of the current
market value or the original purchase cost of the redeemed Class A shares
redeemed. Accordingly, no CDSC will be imposed on increases in account value
above the initial purchase price, including any dividends which have been
reinvested in additional Class A shares.

You may qualify for a reduced sales
charge on your investment in Class A
shares.

Qualifying For a Reduced Sales Charge. If you invest more than $50,000 in Class
A shares of the Fund or a combination of funds in the John Hancock funds
(except money market funds), you may qualify for a reduced sales charge on your
investments in Class A shares through a LETTER OF INTENTION. You may also be
able to use the ACCUMULATION PRIVILEGE and COMBINATION PRIVILEGE to take
advantage of the value of your previous investments in Class A shares of the
John Hancock funds when meeting the breakpoints for a reduced sales charge. For
the COMBINATION PRIVILEGE and ACCUMULATION PRIVILEGE, the applicable sales
charge will be based on the total of:

1. Your current purchase of Class A shares of the Fund;
2. The net asset value (at the close of business on the previous day) of (a)
all Class A shares of the Fund you hold, and (b) all Class A shares of any
other John Hancock fund you hold; and
3. The net asset value of all shares held by another shareholder eligible to
combine his or her holdings with you into a single "purchase."

Example:
If you hold Class A shares of a John Hancock fund with a net asset value of
$20,000 and, subsequently, invested $30,000 in Class A shares of the Fund, the
sales charge on this subsequent investment would be 4.50% and not 5.00% (the
rate that would otherwise be applicable to investments of less than $50,000.
See "Initial Sales Charge Alternative--Class A Shares.")

Class A shares may be available
without a sales charge to certain
individuals and organizations.

If you fall under one of the following categories, you may purchase Class A
shares of the Fund without paying a sales charge:

(bullet) A Trustee or officer of the Trust; a Director or officer of the
Advisers and their affiliates or Selling Brokers; employees or sales
representatives of any of the foregoing; retired officers, employees or
Directors of any of the foregoing; a member of the immediate family of any of
the foregoing; or any Fund, pension, profit sharing or other benefit plan for
the individuals described above.

17
<PAGE>
(bullet) Any state, county, city or any instrumentality, department, authority,
or agency of these entities which is prohibited by applicable investment laws
from paying a sales charge or commission when it purchases shares of any
registered investment management company.*

(bullet) A bank, trust company, credit union, savings institution or other type
of depository institution, its trust departments or common trust funds if it is
purchasing $1 million or more for non-discretionary customers or accounts.*

(bullet) A broker, dealer or registered investment adviser that has entered
into an agreement with John Hancock Funds providing specifically for the use of
Fund shares in fee- based investment products made available to their clients.

(bullet) A former participant in an employee benefit plan with John Hancock
funds, when he or she withdraws from his or her plan and transfers any or all
of his or her plan distributions directly to the Fund.

______________

*For investments made under these provisions, John Hancock Funds may make a
payment out of its own resources to the Selling Broker in an amount not to
exceed 0.25% of the amount invested.

Class A shares may be purchased without a sales charge by clients of the
Sub-Adviser if funds are transferred directly to the Fund from accounts managed
by the Sub-Adviser.

Class A shares of the Fund may also be purchased without an initial sales
charge in connection with certain liquidation, merger or acquisition
transactions involving other investment companies or personal holding
companies.

Contingent Deferred Sales Charge Alternative--Class B Shares. Class B shares
are offered at net asset value per share without a sales charge, so that your
entire initial investment will go to work at the time of purchase. However,
Class B shares redeemed within six years of purchase will be subject to a CDSC
at the rates set forth below. This charge will be assessed on an amount equal
to the lesser of the current market value or the original purchase cost of the
shares being redeemed. Accordingly, you will not be assessed a CDSC on
increases in account value above the initial purchase price, including shares
derived from dividend reinvestments.

In determining whether a CDSC applies to a redemption, the calculation will be
determined in a manner that results in the lowest possible rate being charged.
It will be assumed that your redemption comes first from shares you have held
beyond the six-year CDSC redemption period or those you acquired through
dividend reinvestment, and next from the shares you have held the longest
during the six-year period. The CDSC is waived on redemptions in certain
circumstances. See the discussion "Waiver of Contingent Deferred Sales Charge"
below.

Example:

You have purchased 100 shares at $10 per share. The second year after your
purchase, your investment's net asset value per share has increased by $2 to
$12, and

18
<PAGE>

you have gained 10 additional shares through dividend reinvestment. If you
redeem 50 shares at this time, your CDSC will be calculated as follows:

<TABLE>
<S> <C>
(bullet) Proceeds of 50 shares redeemed at $12 per share $ 600
(bullet) Minus proceeds of 10 shares not subject to CDSC because they were acquired
through dividend reinvestment (10 x $12) -120
(bullet) Minus appreciation on remaining shares, also not subject to CDSC (40 x $2) -80
(bullet) Amount subject to CDSC $ 400
</TABLE>

Proceeds from the CDSC are paid to John Hancock Funds. John Hancock Funds uses
all or part of them to defray its expenses related to providing the Fund with
distribution services connected to the sale of the Class B shares, such as
compensating selected Selling Brokers for selling these shares. The combination
of the CDSC and the distribution and service fees makes it possible for the
Fund to sell Class B shares without an initial sales charge.

The amount of the CDSC, if any, will vary depending on the number of years from
the time you purchase your Class B shares until the time you redeem them.
Solely for purposes of determining this holding period, any payments you make
during the month will be aggregated and deemed to have been made on the last
day of the month.

Year In Which Contingent Deferred Sales
Class B Shares Redeemed Charge As a Percentage of
Following Purchase Dollar Amount Subject to CDSC
First 5.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter None

A commission equal to 3.75% of the amount invested and a first year's service
fee equal to 0.25% of the amount invested are paid to Selling Brokers. The
initial service fee is paid in advance at the time of sale for the provision of
personal and account maintenance services to shareholders during the twelve
months following the sale, and thereafter the service fee is paid in arrears.

Under certain circumstances, the CDSC
on Class B share redemptions will be
waived.

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

(bullet) Redemptions of Class B shares made under a Systematic Withdrawal Plan
(see "How To Redeem Shares"), as long as your annual redemptions do not exceed
10% of your account value at the time you established your Systematic
Withdrawal Plan and 10% of the value of your subsequent investments (less
redemptions) in that account at the time you notify Investor Services. This
waiver does not apply to Systematic Withdrawal Plan redemptions of Class A
shares that are subject to a CDSC.

19
<PAGE>

(bullet) Redemptions made to effect distributions from an Individual Retirement
Account either before or after age 59-1/2, as long as the distributions are
based on your life expectancy or the joint-and-last survivor life expectancy of
you and your beneficiary. These distributions must be free from penalty under
the Code.

(bullet) Redemptions made to effect mandatory distributions under the Code
after age 70-1/2 from a tax-deferred retirement plan.

(bullet) Redemptions made to effect distributions to participants or
beneficiaries from certain employer-sponsored retirement plans, including those
qualified under Section 401(a) of the Code, custodial accounts under Section
403(b)(7) of the Code and deferred compensation plans under Section 457 of the
Code. The waiver also applies to certain returns of excess contributions made
to these plans. In all cases, the distributions must be free from penalty under
the Code.

(bullet) Redemptions due to death or disability.

(bullet) Redemptions made under the Reinvestment Privilege, as described in
"Additional Services and Programs" of this Prospectus.

(bullet) Redemptions made pursuant to the Fund's right to liquidate your
account if you own fewer than 50 shares.

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

(bullet) Redemptions from certain IRA and retirement plans that purchased
shares prior to October 1, 1992.

(bullet) If you qualify for a CDSC waiver under one of these situations, you
must notify Fund Services either directly or through your Selling Broker at the
time you make your redemption. The waiver will be granted once Investor
Services has confirmed that you are entitled to the waiver.

Conversion of Class B Shares. Your Class B shares, and an appropriate portion
of reinvested dividends on those shares, will be converted into Class A shares
automatically. This will occur at the end of the month eight years after the
shares were purchased, and will result in lower annual distribution fees. If
you exchanged Class B shares into this Fund from another John Hancock fund, the
calculation will be based on the time you purchased the shares in the original
fund. The Fund has been advised that the conversion of Class B shares to Class
A shares should not be taxable for Federal income tax purposes, nor should it
change your tax basis or tax holding period for the converted shares.

HOW TO REDEEM SHARES

To assure acceptance of your
redemption request, please follow
these procedures.

You may redeem all or a portion of your shares on any business day. Your shares
will be redeemed at the next NAV calculated after your redemption request is
received in good order by Investor Services less any applicable CDSC. The Fund
may hold payment until it is reasonably satisfied that investments recently
made by check or Invest- by-Phone have been collected (which may take up to 10
calendar days).

Once your shares are redeemed, the Fund generally sends you payment on the next
business day. When you redeem your shares, you may realize a taxable gain or
loss depending on the difference between what you paid for your shares and what
you

20
<PAGE>
receive for them, subject to certain tax rules. Under unusual circumstances,
the Fund may suspend redemptions or postpone payment for up to seven days or
longer, as permitted by Federal securities laws.

By Telephone All Fund shareholders are automatically eligible for the
telephone redemption privilege. Call 1-800-225-5291, from 8:00
A.M. to 4:00 P.M. (New York time), Monday through Friday,
excluding days on which the New York Stock Exchange is closed.
Investor Services employs the following procedures to confirm
that instructions received by telephone are genuine. Your name,
the account number, taxpayer identification number applicable
to the account and other relevant information may be requested.
In addition, telephone instructions are recorded.

You may redeem up to $100,000 by telephone, but the address on
the account must not have changed for the last 30 days. A check
will be mailed to the exact name(s) and address shown on the
account.

If reasonable procedures, such as those described above, are
not followed, the Fund may be liable for any loss due to
unauthorized or fraudulent telephone instructions. In all other
cases, neither the Fund nor Investor Services will be liable
for any loss or expense for acting upon telephone instructions
made in accordance with the telephone transaction procedures
mentioned above.

Telephone redemption is not available for IRAs or other
tax-qualified retirement plans or shares of the Fund that are
in certificate form.

During periods of extreme economic conditions or market
changes, telephone requests may be difficult to implement due
to a large volume of calls. During these times, you should
consider placing redemption requests in writing or using EASI-
Line. EASI-Line's telephone number is 1-800-338-8080.

By Wire If you have a telephone redemption form on file with the Fund,
redemption proceeds of $1,000 or more can be wired on the next
business day to your designated bank account and a fee
(currently $4.00) will be deducted. You may also use electronic
funds transfer to your assigned bank account and the funds are
usually collectible after two business days. Your bank may or
may not charge for this service. Redemptions of less than
$1,000 will be sent by check or electronic funds transfer.

This feature may be elected by completing the "Telephone
Redemption" section on the Account Privileges Application that
is included with Prospectus.

In Writing Send a stock power or "letter of instruction" specifying the
name of the Fund, the dollar amount or the number of shares to
be redeemed, your name, class of shares, your account number
and the additional requirements listed below that apply to your
particular account.

21
<PAGE>
<TABLE>
<CAPTION>
Type of Registration Requirements
<S> <C>
Individual, Joint Tenants, Sole A letter of instruction signed (with titles where applicable) by
Proprietorship, Custodial all persons authorized to sign for the account, exactly as it is
(Uniform Gifts or Transfer to registered with the signature(s) guaranteed.
Minors Act), General Partners.
Corporation, Association A letter of instruction and a corporate resolution, signed by
person(s) authorized to act on the account with the signature(s)
guaranteed.
Trusts A letter of instruction signed by the Trustee(s) with a
signature guarantee. (If the Trustee's name is not registered on
your account, also provide a copy of the trust document,
certified within the last 60 days.)
</TABLE>
If you do not fall into any of these registration categories, please call
1-800-225-5291 for further instructions.

Who may guarantee your signature

A signature guarantee is a widely accepted way to protect you and the Fund by
verifying the signature on your request. It may not be provided by a notary
public. If the net asset value of the shares redeemed is $100,000 or less, John
Hancock Funds may guarantee the signature. The following institutions may
provide you with a signature guarantee, provided that the institution meets
credit standards established by Investor Services: (i) a bank; (ii) a
securities broker or dealer, including a government or municipal securities
broker or dealer, that is a member of a clearing corporation or meets certain
net capital requirements; (iii) a credit union having authority to issue
signature guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, a federal savings bank or association; or (v)
a national securities exchange, a registered securities exchange or a clearing
agency.

Additional information about redemptions.

Through Your Broker

Your broker may be able to initiate the redemption. Contact your broker for
instructions.

Due to the proportionately high cost of maintaining smaller accounts, the Fund
reserves the right to redeem at net asset value all shares in an account which
holds fewer than 50 shares (except accounts under retirement plans) and to mail
the proceeds to the shareholder, or the transfer agent may impose an annual fee
of $10.00. No account will be involuntarily redeemed or any additional fee
imposed, if the value of the account is in excess of the Fund's minimum initial
investment. No CDSC will be imposed on involuntary redemptions of shares.

Shareholders will be notified before these redemptions are to be made or this
fee is imposed, and will have 30 days to purchase additional shares to bring
their account balance up to the required minimum. Unless the number of shares
acquired by additional purchase and any dividend reinvestments, if any, exceeds
the number of shares redeemed, repeated redemptions from a smaller account may
eventually trigger this policy.

ADDITIONAL SERVICES AND PROGRAMS

Exchange Privilege

You may exchange shares of the Fund
for shares of the same class of
another John Hancock fund.

If your investment objective changes, or if you wish to achieve further
diversification, John Hancock offers other funds with a wide range of
investment goals. Contact your registered representative or Selling Broker and
request a prospectus for the John Hancock funds that interest you. Read the
prospectus carefully before exchanging your shares. You can exchange shares of
each class of the Fund only for shares of the same class of another John
Hancock fund. For this purpose, John Hancock funds with only one class of
shares will be treated as Class A whether or not they have been so designated.

22
<PAGE>

Exchanges between funds that are not subject to a CDSC are based on their
respective net asset values. No sales charge or transaction charge is imposed.
Class B shares of the Fund that are subject to a CDSC may be exchanged into
Class B shares of another John Hancock fund without incurring the CDSC;
however, these shares will be subject to the CDSC schedule of the shares
acquired (except exchanges into John Hancock Short-Term Strategic Income Fund,
John Hancock Adjustable U.S. Government Trust and John Hancock Limited-Term
Government Fund which will be subject to the initial Fund's CDSC). For purposes
of computing the CDSC payable upon redemption of shares acquired in an
exchange, the holding period of the original shares is added to the holding
period of the shares acquired in an exchange. However, if you exchange Class B
shares purchased prior to January 1, 1994 for Class B shares of any other John
Hancock fund, you will be subject to the CDSC schedule that was in effect at
your initial purchase date.

You may exchange Class B shares of the Fund into shares of a John Hancock money
market fund at net asset value. However, you will continue to be subject to a
CDSC upon redemption.

The Fund reserves the right to require you to keep previously exchanged shares
(and reinvested dividends) in the Fund for 90 days before you are permitted to
execute a new exchange. The Fund may also terminate or alter the terms of the
exchange privilege upon 60 days' notice to shareholders.

An exchange of shares is treated as a redemption of shares of one fund and the
purchase of shares in another for Federal income tax purposes. An exchange may
result in a taxable gain or loss.

When you make an exchange, your account registration in both the existing and
new account must be identical. The exchange privilege is available only in
states where the exchange can be made legally.

Because Fund performance and shareholders can be hurt by excessive trading, the
Fund reserves the right to terminate the exchange privilege for any person or
group that, in John Hancock Funds' judgment, is involved in a pattern of
exchanges that coincide with a "market timing" strategy that may disrupt the
Fund's ability to invest effectively according to its investment objective and
policies, or might otherwise affect the Fund and its shareholders adversely.
The Fund may also temporarily or permanently terminate the exchange privilege
for any person who makes seven or more exchanges out of the Fund per calendar
year. Accounts under common control or ownership will be aggregated for this
purpose. Although the Fund will attempt to give prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time.

23
<PAGE>
By Telephone

1. When you fill out the application for your initial purchase of Fund shares,
you automatically authorize exchanges by telephone unless you check the box
indicating that you do not wish to authorize telephone exchanges.

2. Call 1-800-225-5291. Have the account number of your current fund and the
exact name in which it is registered available to give to the telephone
representative.

3. Your name, the account number, taxpayer identification number applicable to
the account and other relevant information may be requested. In addition,
telephone instructions are recorded.

In Writing

1. In a letter request an exchange and list the following:

--the name and class of the fund whose shares you currently own
- --your account number
- --the name(s) in which the account is registered
- --the name of the fund in which you wish your exchange to be invested
- --the number of shares, all shares or the dollar amount you wish to exchange

Sign your request exactly as the account is registered.

2. Mail the request and information to:
John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

Reinvestment Privilege

If you redeem shares of the Fund, you
may be able to reinvest the proceeds
in shares of this Fund or another
John Hancock fund without paying an
additional sales charge.

1. You will not be subject to a sales charge on Class A shares that you
reinvest in any John Hancock fund that is otherwise subject to a sales charge,
as long as you reinvest within 120 days from the redemption date. If you paid a
CDSC upon a redemption, you may reinvest at net asset value in the same class
of shares from which you redeemed within 120 days. Your account will be
credited with the amount of the CDSC that was charged previously, and the
reinvested shares will continue to be subject to a CDSC. For purposes of
computing the CDSC payable upon a subsequent redemption, the holding period of
the shares you acquired through reinvestment will include the holding period of
the redeemed shares.

2. Any portion of your redemption may be reinvested in Fund shares or in shares
of any of the other John Hancock funds, subject to the minimum investment limit
of that fund.

3. To reinvest, you must notify Investor Services in writing. Include the
Fund(s) name, account number and class from which your shares were originally
redeemed.

24
<PAGE>
Systematic Withdrawal Plan

You can pay routine bills from your account or make periodic disbursements from
your retirement account to comply with IRS regulations.

2. To be eligible, you must have at least $5,000 in your account.

3. Payments from your account can be made monthly, quarterly, semi-annually or
annually or on a selected monthly basis, to yourself or any other designated
payee.

4. There is no limit on the number of payees you may authorize, but all
payments must be made at the same time or intervals.

5. It is not advantageous to maintain a Systematic Withdrawal Plan concurrently
with purchases of additional Class A or Class B shares because you may be
subject to an initial sales charge on your purchases of Class A shares or to a
CDSC on your redemptions of Class B shares. In addition, your redemptions are
taxable events.

6. Redemptions will be discontinued if the U.S. Postal service cannot deliver
your checks, or if deposits to a bank account are returned for any reason.

Monthly Automatic Accumulation Program (MAAP)

You can make automatic investments
and simplify your investing.

Organized groups of at least four persons may establish accounts.

1. You can authorize an investment to be automatically drawn each month from
your bank for investment in Fund shares under the "Automatic Investing" and
"Bank Information" sections of the Account Privileges Application.

2. You can also authorize automatic investing through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.

3. You can terminate your Monthly Automatic Accumulation Program at any time.

4. There is no charge to you for this program, and there is no cost to the
Fund.

5. If you have payments withdrawn from a bank account and we are notified that
the account has been closed, your withdrawals will be discontinued.

Group Investment Program

2. The initial aggregate investment of all participants in the group must be at
least $250.

3. There is no additional charge for this program. There is no obligation to
make investments beyond the minimum, and you may terminate the program at any
time.

Retirement Plans

1. You may use the Fund to fund various types of qualified retirement plans,
including Individual Retirement Accounts, Keogh Plans (H.R. 10), Pension and
Profit- Sharing Plans (including 401(k) plans), Tax Sheltered Annuity
Retirement Plans (403(b) or TSA plans) and 457 Plans.

25
<PAGE>

2. The initial investment minimum or aggregate minimum for any of these plans
is $250. However, accounts being established as group IRA, SEP, SARSEP, TSA,
401(k) and 457 Plans will be accepted without an initial minimum investment.

<PAGE>

(Notes)

<PAGE>

JOHN HANCOCK SPECIAL VALUE FUND

Investment Adviser
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603

Sub-Adviser
NM Capital Management Inc.
6501 Americas Parkway, Suite 950
Albuquerque, N.M. 87110-5372

Principal Distributor
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603

Custodian
Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110

Transfer Agent
John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116

Independent Auditors
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116

HOW TO OBTAIN INFORMATION
ABOUT THE FUND
For: Service Information
Telephone Exchange call 1-800-225-5291
Telephone Redemption
Investment-by-Phone
TDD call 1-800-554-6713

JHD-3700P 5/95

JOHN HANCOCK
SPECIAL VALUE
FUND

Class A and Class B Shares
Prospectus
May 1, 1995

A mutual fund seeking capital appreciation with income as a secondary
consideration.

101 Huntington Avenue
Boston, Massachusetts 02199-7603
Telephone 1-800-225-5291

(Recycle graphic) Printed on recycled paper using soybean ink

<PAGE>

JOHN HANCOCK SPECIAL VALUE FUND
CLASS A AND B SHARES
Statement of Additional Information

May 1, 1995

This Statement of Additional Information provides information about
John Hancock Special Value Fund (the "Fund") in addition to the information
that is contained in the Fund's Class A and Class B Prospectus, (the
"Prospectus"), each dated May 1, 1995.

This Statement of Additional Information is not a prospectus. It
should be read in conjunction with the Prospectus, a copy of which can be
obtained free of charge by writing or telephoning:

John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
1-800-225-5291

TABLE OF CONTENTS

Statement of
Additional
Information
Page

ORGANIZATION OF THE FUND 2
INVESTMENT OBJECTIVE AND POLICIES 2
CERTAIN INVESTMENT PRACTICES 3
INVESTMENT RESTRICTIONS 11
THOSE RESPONSIBLE FOR MANAGEMENT 15
INVESTMENT ADVISORY AND OTHER SERVICES 21
DISTRIBUTION CONTRACT 24
NET ASSET VALUE 25
INITIAL SALES CHARGE ON CLASS A SHARES 26
DEFERRED SALES CHARGE ON CLASS B SHARES 27
SPECIAL REDEMPTIONS 28
ADDITIONAL SERVICES AND PROGRAMS 28
DESCRIPTION OF THE FUND'S SHARES 30
TAX STATUS 31
CALCULATION OF PERFORMANCE 34
BROKERAGE ALLOCATION 36
TRANSFER AGENT SERVICES 38
CUSTODY OF PORTFOLIO 38
INDEPENDENT AUDITORS 38

<PAGE>

ORGANIZATION OF THE FUND

John Hancock Special Value Fund (the "Fund") is organized as a
separate, diversified series of John Hancock Capital Series (the "Trust"), an
open-end management investment company which is organized as a Massachusetts
business trust under the laws of The Commonwealth of Massachusetts. The
Trust was organized in 1984 by John Hancock Advisers, Inc. (the "Adviser") as
the successor to John Hancock Growth Fund, Inc., a Delaware corporation
organized in 1968 by the John Hancock Mutual Life Insurance Company (the
"Life Insurance Company"), a Massachusetts life insurance company chartered
in 1862 with national headquarters at John Hancock Place, Boston,
Massachusetts. Prior to October 1, 1993 the Trust was known as "John Hancock
Growth Fund."

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Fund is to seek capital appreciation
with income a secondary consideration. The Fund will seek to achieve its
objective by investing in securities, primarily equity securities, that are
undervalued compared to alternative equity investments. There can be no
assurance that the objective of the Fund will be realized. See "Investment
Objective and Policies" in the Fund's Prospectus.

The equity securities in which the Fund will invest include common
stocks, preferred stocks, convertible debt securities and warrants of U.S.
and foreign issuers. In selecting equity securities for the Fund, the
Adviser and NM Capital Management, Inc. (the "Sub-Adviser" and together with
the Adviser, the "Advisers") emphasize issuers whose equity securities trade
at market to book value ratios lower than comparable issuers or the Standard
& Poor's Composite Index. The Fund's portfolio securities will also include
equity securities considered by the Advisers to have the potential for
capital appreciation due to potential recognition of earnings power or asset
value which is not fully reflected in such securities current market value.
The Advisers attempt to identify investments which possess characteristics
which will tend to limit sustained downside price risk, generally referred to
as the "margin of safety" concept. The Advisers also consider an issuer's
financial strength, competitive position, projected future earnings and
dividends and other investment criteria.

The Fund's investment policy reflects the Advisers' belief that while
the securities markets tend to be efficient, sufficiently persistent price
anomalies exist which the strategically disciplined active equity manager can
attempt to exploit in seeking to achieve an above average rate of return.
Based on this premise, the Advisers have adopted a strategy of investing in
low market to book value, out of favor, stocks.

<PAGE>

price for such securities has been more volatile than securities of companies
with greater capitalization. However, securities of companies with smaller
capitalization may offer greater potential for capital appreciation since they
may be overlooked and thus undervalued by investors.

CERTAIN INVESTMENT PRACTICES

When-Issued Securities. "When-issued" refers to securities whose terms are
available and for which a market exists, but which have not yet been issued.
No payment is made with respect to a when-issued transaction, until delivery
is due, often a month or more after the purchase.

The Fund may engage in when-issued transactions with respect to
securities purchased for its portfolio in order to obtain an advantageous
price and yield at the time of the transactions. When the Fund engages in a
when-issued transaction, it relies on the seller to consummate the
transaction. The failure of the issuer or seller to consummate the
transaction may result in the Fund's losing the opportunity to obtain a price
and yield considered to be advantageous. On the date the Fund enters into an
agreement to purchase securities on a when-issued basis, the Fund will
segregate in a separate account cash or liquid, high grade debt securities
(i.e., securities rated in one of the top three ratings categories by Moody's
Investors Service, Inc. or Standard & Poor's Ratings Group) equal in value to
the when-issued commitment. These assets will be valued daily at market, and
additional cash or liquid, high grade debt securities will be segregated in a
separate account to the extent that the total value of the assets in the
account declines below the amount of the when-issued commitment.

Repurchase Agreements. A repurchase agreement is a contract under which the
Fund would acquire a security for a relatively short period (usually not more
than 7 days) subject to the obligation of the seller to repurchase and the
Fund to resell such security at a fixed time and price (representing the
Fund's cost plus interest). The Fund will enter into repurchase agreements
only with member banks of the Federal Reserve System and with "primary
dealers" in U.S. Government securities. The Advisers will continuously
monitor the creditworthiness of the parties with whom the Fund enters into
repurchase agreements. The Fund has established a procedure providing that
the securities serving as collateral for each repurchase agreement must be
delivered to the Fund's custodian either physically or in book-entry form and
that the collateral must be marked to market daily to ensure that each
repurchase agreement is fully collateralized at all times. In the event of
bankruptcy or other default by a seller of a repurchase agreement, the Fund
could experience delays in liquidating the underlying securities and could
experience losses, including the possible decline in the value of the
underlying securities during the period while the Fund seeks to enforce its
rights thereto, possible subnormal levels of income and lack of access to
income during this period, and the expense of enforcing its rights.

Restricted Securities. The Fund may invest in restricted securities eligible
for resale to certain institutional investors pursuant to Rule 144A under the
Securities Act of 1933 and foreign securities acquired in accordance with
Regulation S under the Securities Act of 1933. The Fund will not invest more
than 15% of its net assets in illiquid investments, which include repurchase
agreements maturing in more than seven days, OTC options, securities that are
not readily marketable and restricted securities. However, if the Trustees
determines, based upon a
<PAGE>
continuing review of the trading markets for specific Rule 144A securities,
that they are liquid then such securities may be purchased without regard to
the 15% limit. The Trustees may adopt guidelines and delegate to the Advisers
the daily function of determining and monitoring the liquidity of restricted
securities. The Trustees, however, will retain sufficient oversight and be
ultimately responsible for the determinations. The Trustees will carefully
monitor the Fund's investments in these securities, focusing on such important
factors, among others, as valuation, liquidity and availability of
information. This investment practice could have the effect of increasing the
level of illiquidity in the Fund if that qualified institutional buyers become
for a time uninterested in purchasing these restricted securities.

Lending of Portfolio Securities. In order to generate additional income, the
Fund may from time to time lend securities from its portfolio to brokers,
dealers and financial institutions such as banks and trust companies. Such
loans will be secured by collateral consisting of cash or U.S. Government
securities which will be maintained in an amount equal to at least 100% of
the current market value of the loaned securities. During the period of the
loan, the Fund receives the income on both the loaned securities and the
collateral and thereby increases its return. Cash collateral may be invested
in short-term securities, which will increase the current income of the
Fund. Such loans will not be for more than 60 days and will be terminable by
the Fund at any time. The Fund will have the right to regain record
ownership of loaned securities in order to exercise rights of a holder
thereof including receiving interest or other distributions or exercising
voting rights. The Fund may pay reasonable fees to persons unaffiliated with
the Fund for services in arranging such loans. Lending of portfolio
securities involves a risk of failure by the borrower to return the loaned
securities, in which event the Fund may incur a loss.

Financial Futures Contracts. The Fund may hedge its portfolio by selling or
purchasing financial futures contracts as an offset against the effect of
expected changes in interest rates or in security or foreign currency
values. Although other techniques could be used to reduce the Fund's
exposure to interest rate, securities market and currency fluctuations, the
Fund may be able to hedge its exposure more effectively and at a lower cost
by using financial futures contracts. The Fund will enter into financial
futures contracts for hedging purposes and for speculative purposes to the
extent permitted by regulations of the Commodity Futures Trading Commission
("CFTC").

Financial futures contracts have been designed by boards of trade which
have been designated "contract markets" by the CFTC. Futures contracts are
traded on these markets in a manner that is similar to the way a stock is
traded on a stock exchange. The boards of trade, through their clearing
corporations, guarantee that the contracts will be performed. It is expected
that if new types of financial futures contracts are developed and traded the
Fund may engage in transactions in such contracts.

Although some financial futures contracts by their terms call for
actual delivery or acceptance of financial instruments, in most cases the
contracts are closed out prior to delivery by offsetting purchases or sales
of matching financial futures contracts (same exchange, underlying security
or currency and delivery month). Other financial futures contracts, such as
futures contracts on securities indices, by their terms call for cash
settlements. If the offsetting purchase price is less than the Fund's
original sale price, the Fund
<PAGE>
realizes a gain, or if it is more, the Fund realizes a loss. Conversely, if
the offsetting sale price is more than the Fund's original purchase price, the
Fund realizes a gain, or if it is less, the Fund realizes a loss. The Fund's
transaction costs must also be included in these calculations. The Fund will
pay a commission in connection with each purchase or sale of financial futures
contracts, including a closing transaction. For a discussion of the Federal
income tax considerations of trading in financial futures contracts, see the
information under the caption "Tax Status" below.

At the time the Fund enters into a financial futures contract, it is
required to deposit with its custodian a specified amount of cash or U.S.
Government securities, known as "initial margin," ranging upward from 1.1% of
the value of the financial futures contract being traded. The margin
required for a financial futures contract is set by the board of trade or
exchange on which the contract is traded and may be modified during the term
of the contract. The initial margin is in the nature of a performance bond
or good faith deposit on the financial futures contract which is returned to
the Fund upon termination of the contract, assuming all contractual
obligations have been satisfied. The Fund expects to earn interest income on
its initial margin deposits. Each day, the futures contract is valued at the
official settlement price of the board of trade or exchange on which it is
traded. Subsequent payments, known as "variation margin," to and from the
broker are made on a daily basis as the market price of the financial futures
contract fluctuates. This process is known as "mark to market." Variation
margin does not represent a borrowing or lending by the Fund but is instead a
settlement between the Fund and the broker of the amount one would owe the
other if the financial futures contract expired. In computing net asset
value, the Fund will mark to the market its open financial futures positions.

Successful hedging depends on the extent of correlation between the
market for the underlying securities and the futures contract market for
those securities. There are several factors that will probably prevent this
correlation from being perfect, and even a correct forecast of general
interest rate, securities market or currency rates may not result in a
successful hedging transaction. There are significant differences between
the securities or currency markets and the futures markets which could create
an imperfect correlation between the markets and which could affect the
success of a given hedge. The degree of imperfection of correlation depends
on circumstances such as: variations in speculative market demand for
financial futures and debt and equity securities, including technical
influences in futures trading and differences between the financial
instruments being hedged and the instruments underlying the standard
financial futures contracts available for trading in such respects as
interest rate levels, maturities and creditworthiness of issuers. The degree
of imperfection may be increased where the underlying debt securities are
lower-rated, and, thus, subject to greater fluctuation in price than
higher-rated securities.

A decision as to whether, when and how to hedge involves the exercise
of skill and judgment, and even a well-conceived hedge may be unsuccessful to
some degree because of market behavior or unexpected interest rate,
securities market or currency trends. The Fund will bear the risk that the
price of the securities being hedged will not move in complete correlation
with the price of the futures contracts used as a hedging instrument.
Although the Advisers believe that the use of financial futures contracts
will benefit the Fund, an incorrect prediction could result in a loss on both
the hedged securities or currency in the Fund's portfolio and the
<PAGE>
futures position so that the Fund's return might have been better had hedging
not been attempted. However, in the absence of the ability to hedge, the
Advisers might have taken portfolio actions in anticipation of the same market
movements with similar investment results but, presumably, at greater
transaction costs. The low margin deposits required for futures transactions
permit an extremely high degree of leverage. A relatively small movement in
the price of instruments underlying a futures contract may result in losses or
gains in excess of the amount invested.

Futures exchanges may limit the amount of fluctuation permitted in
certain futures contract prices during a single trading day. The daily limit
establishes the maximum amount the price of a futures contract may vary
either up or down from the previous day's settlement price, at the end of the
current trading session. Once the daily limit has been reached in a futures
contract subject to the limit, no more trades may be made on that day at a
price beyond that limit. The daily limit governs only price movements during
a particular trading day and, therefore, does not limit potential losses
because the limit may work to prevent the liquidation of unfavorable
positions. For example, futures prices have occasionally moved to the daily
limit for several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of positions and subjecting some holders of
futures contracts to substantial losses.

Finally, although the Fund engages in financial futures transactions
only on boards of trade or exchanges where there appears to be an adequate
secondary market, there is no assurance that a liquid market will exist for a
particular futures contract at any given time. The liquidity of the market
depends on participants closing out contracts rather than making or taking
delivery. In the event participants decide to make or take delivery,
liquidity in the market could be reduced. In addition, the Fund could be
prevented from executing a buy or sell order at a specified price or closing
out a position due to limits on open positions or daily price fluctuation
limits imposed by the exchanges or boards of trade. If the Fund cannot close
out a position, it will be required to continue to meet margin requirements
until the position is closed.

Options on Financial Futures Contracts. The Fund may purchase and write call
and put options on futures contracts. An option on a futures contract gives
the purchaser the right, in return for the premium paid, to assume a position
in a futures contract at a specified exercise price at any time during the
period of the option. Upon exercise, the writer of the option delivers the
futures contract to the holder at the exercise price. The Fund would be
required to deposit with its custodian initial and variation margin with
respect to put and call options on futures contracts written by it. Options
on futures contracts involve risks similar to the risks relating to
transactions in financial futures contracts. Also, an option purchased by
the Fund may expire worthless, in which case the Fund would lose the premium
it paid for the option.

Other Considerations. The Fund will engage in futures transactions for bona
fide hedging or speculative purposes to the extent permitted by CFTC
regulations. The Fund will determine that the price fluctuations in the
futures contracts and options on futures used for hedging purposes are
substantially related to price fluctuations in securities held by the Fund or
which it expects to purchase. Except as stated below, the Fund's futures
transactions will be entered into for traditional hedging purposes -- i.e.,
futures contracts will be sold to protect against a decline in the price of
securities that the Fund owns, or futures contracts will be purchased to
protect the
<PAGE>
Fund against an increase in the price of securities or the currency in which
they are denominated it intends to purchase. As evidence of this hedging
intent, the Fund expects that on 75% or more of the occasions on which it
takes a long futures or option position (involving the purchase of futures
contracts), the Fund will have purchased, or will be in the process of
purchasing, equivalent amounts of related securities or assets denominated in
the related currency in the cash market at the time when the futures or,
option position is closed out. However, in particular cases, when it is
economically advantageous for a Fund to do so, a long futures position may be
terminated or an option may expire without the corresponding purchase of
securities or other assets.

As an alternative to literal compliance with the bona fide hedging
definition, a CFTC regulation permits the Fund to elect to comply with a
different test, under which the aggregate initial margin and premiums
required to establish speculative positions in futures contracts and options
on futures will not exceed 5% of the net asset value of the Fund's portfolio,
after taking into account unrealized profits and losses on any such positions
and excluding the amount by which such options were in-the-money at the time
of purchase. The Fund will engage in transactions in futures contracts only
to the extent such transactions are consistent with the requirements of the
Internal Revenue Code for maintaining its qualification as a regulated
investment company for federal income tax purposes.

When the Fund purchases a financial futures contract, writes a put
option thereon or purchases a call option thereon, an amount of cash or high
grade, liquid debt securities will be deposited in a segregated account with
the Fund's custodian that, together with the amount of initial and variation
margin held in the account of its broker, equals the market value of the
futures contract.

Options Transactions. The Fund may write listed and over-the-counter covered
call options and covered put options on securities in order to earn
additional income from the premiums received. In addition, the Fund may
purchase listed and over-the-counter call and put options. The extent to
which covered options will be used by the Fund will depend upon market
conditions and the availability of alternative strategies. The Fund may
write listed covered and over-the-counter call and put options on up to 100%
of its net assets.

The Fund will write listed and over-the-counter call options only if
they are "covered", which means that the Fund owns or has the immediate right
to acquire the securities underlying the options without additional cash
consideration upon conversion or exchange of other securities held in its
portfolio. A call option written by the Fund will also be "covered" if the
Fund holds on a share-for-share basis a covering call on the same securities
where (i) the exercise price of the covering call held is equal to or less
than the exercise price of the call written or the difference is maintained
by the Fund in cash or high grade, liquid debt securities in a segregated
account with the Fund's custodian, and (ii) the covering call expires at the
same time as the call written. If a covered call option is not exercised,
the Fund would keep both the option premium and the

<PAGE>

underlying security. If the covered call option written by the Fund is
exercised and the exercise price, less the transaction costs, exceeds the
cost of the underlying security, the Fund would realize a gain in addition to
the amount of the option premium it received. If the exercise price, less
transaction costs, is less than the cost of the underlying security, the
Fund's loss would be reduced by the amount of the option premium.

The Fund will write a covered put option only with respect to
securities it intends to acquire for the Fund's portfolio and will maintain
in a segregated account with the Fund's custodian cash or high grade, liquid
debt securities with a value equal to the price at which the underlying
security may be sold to the Fund in the event the put option is exercised by
the purchaser. The Fund can also write a "covered" put option by purchasing
on a share-for-share basis a put on the same security as the put written by
the Fund if the exercise price of the covering put held is equal to or
greater than the exercise price of the put written and the covering put
expires at the same time or later than the put written.

In writing listed and over-the-counter covered put options on
securities, the Fund would earn income from the premiums received. If a
covered put option is not exercised, the Fund would keep the option premium
and the assets maintained to cover the option. If the option is exercised
and the exercise price, including transaction costs, exceed the market price
of the underlying security, the Fund would have an unrealized loss, but the
amount of the loss would be reduced by the amount of the option premium.

If the writer of an exchange-traded option wishes to terminate his
obligation prior to its exercise, it may effect a "closing purchase
transaction". This is accomplished by buying an option of the same series as
the option previously written. The effect of the purchase is that the Fund's
position will be offset by the Options Clearing Corporation. The Fund may
not effect a closing purchase transaction after it has been notified of the
exercise of an option. There is no guarantee that a closing purchase
transaction can be effected. Although the Fund will generally write only
those options for which there appears to be an active secondary market, there
is no assurance that a liquid secondary market on an exchange or board of
trade will exist for any particular option or at any particular time, and for
some options no secondary market on an exchange may exist.

In the case of a written call option, effecting a closing transaction
will permit the Fund to write another call option on the underlying security
with either a different exercise price, expiration date or both. In the case
of a written put option, it will permit the Fund to write another put option
to the extent that the exercise price thereof is secured by deposited cash or
short-term securities. Also, effecting a closing transaction will permit the
cash or proceeds from the concurrent sale of any securities subject to the
option to be used for other investments. If the Fund desires to sell a
particular security from its portfolio on which it has written a call option,
it will effect a closing transaction prior to or concurrent with the sale of
the security.

The Fund will realize a gain from a closing transaction if the cost of
the closing transaction is less than the premium received from writing the
option. The Fund will realize a loss from a closing transaction if the cost
of the closing transaction is more than the premium received for writing the
option. However, because increases in the market price of a call option will
generally
<PAGE>
reflect increases in the market price of the underlying security, any loss
resulting from the repurchase of a call option is likely to be offset in whole
or in part by appreciation of the underlying security owned by the Fund.

Over-the-Counter Options. The Fund may engage in options transactions on
exchanges and in the over-the-counter markets. In general, exchange-traded
options are third-party contracts (i.e. performance of the parties'
obligations is guaranteed by an exchange or clearing corporation) with
standardized strike prices and expiration dates. Over-the-counter ("OTC")
transactions are two-party contracts with price and terms negotiated by the
buyer and seller. The Fund will acquire only those OTC options for which the
Advisers believe the Fund can receive on each business day at least two
separate bids or offers (one of which will be from an entity other than a
party to the option) or those OTC options valued by an independent pricing
service. The Fund will write and purchase OTC options only with member banks
of the Federal Reserve System and primary dealers in U.S. Government
securities or their affiliates. The Securities and Exchange Commission (the
"SEC") takes the position that OTC options are illiquid securities subject to
the Fund's 15% limitation on illiquid securities. The SEC allows the Fund to
exclude from the 15% limitation on illiquid securities a portion of the value
of the OTC options written by the Fund, provided that certain conditions are
met. First, the other party to the OTC options has to be a primary U.S.
Government securities dealer designated as such by the Federal Reserve Bank.
Second, the Fund would have an absolute contractual right to repurchase the
OTC options at a formula price. If the above conditions are met, a Fund must
treat as illiquid only that portion of the OTC option's value (and the value
of its underlying securities) which is equal to the formula price for
repurchasing the OTC option, less the OTC option's intrinsic value.

Government Securities. Certain U.S. Government securities, including U.S.
Treasury bills, notes and bonds, and Government National Mortgage Association
certificates ("Ginnie Maes"), are supported by the full faith and credit of
the United States. Certain other U.S. Government securities, issued or
guaranteed by Federal agencies or government sponsored enterprises, are not
supported by the full faith and credit of the United States, but may be
supported by the right of the issuer to borrow from the U.S. Treasury. These
securities include obligations of the Federal Home Loan Mortgage Corporation
("Freddie Macs"), and obligations supported by the credit of the
instrumentality, such as Federal National Mortgage Association Bonds ("Fannie
Maes"). No assurance can be given that the U.S. Government will provide
financial support to such Federal agencies, authorities, instrumentalities
and government sponsored enterprises in the future.

Ginnie Maes, Freddie Macs and Fannie Maes are mortgage-backed
securities which provide monthly payments which are, in effect, a
"pass-through" of the monthly interest and principal payments (including any
prepayments) made the by individual borrowers on the pooled mortgage loans.
Collateralized mortgage obligations ("CMOs") in which the Fund may invest are
securities issued by a U.S. Government instrumentality that are
collateralized by a portfolio of mortgages or mortgage-backed securities.
Mortgage-backed securities may be less effective than traditional debt
obligations of similar maturity at maintaining yields during periods of
declining interest rates.
<PAGE>
Forward Foreign Currency Transactions. The Fund's foreign currency exchange
transactions may be conducted on a spot (i.e., cash) basis at the spot rate
for purchasing or selling currency prevailing in the foreign exchange
market. The Fund may also deal in forward foreign currency exchange
contracts involving currencies of the different countries in which it will
invest as a hedge against possible variations in the foreign exchange rate
between these currencies. This is accomplished through contractual
agreements to purchase or sell a specified currency at a specified future
date and price set at the time of the contract. The Fund's dealings in
forward foreign currency exchange contracts will be limited to hedging either
specified transactions or portfolio positions. Transaction hedging is the
purchase or sale of forward foreign currency contracts with respect to
specific receivables or payables of the Fund accruing in connection with the
purchase and sale of its portfolio securities denominated in foreign
currencies. Portfolio hedging is the use of forward foreign currency
contracts to offset portfolio security positions denominated or quoted in
such foreign currencies. The Fund will not attempt to hedge all of its
foreign portfolio positions and will enter into such transactions only to the
extent, if any, deemed appropriate by the Advisers. The Fund will not engage
in speculative forward foreign currency exchange transactions.

If the Fund purchases a forward contract, its custodian bank will
segregate cash or high grade, liquid debt securities in a separate account of
the Fund in an amount equal to the value of the Fund's total assets committed
to the consummation of such forward contract. Those assets will be valued at
market daily and if the value of the securities in the separate account
declines, additional cash or securities will be placed in the account so that
the value of the account will be equal to the amount of the Fund's commitment
with respect to such contracts.

Hedging against a decline in the value of currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also preclude the
opportunity for gain if the value of the hedged currency rises. Moreover, it
may not be possible for the Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to sell the
currency at a price above the devaluation level it anticipates.

The cost to the Fund of engaging in foreign currency exchange
transactions varies with such factors as the currency involved, the length of
the contract period and the market conditions then prevailing. Since
transactions in foreign currency are usually conducted on a principal basis,
no fees or commissions are involved.

Investment in Foreign Securities. Investments in foreign securities may
involve risks and considerations not present in domestic investments. Since
foreign securities generally may be quoted and pay interest or dividends in
foreign currencies, the value of the assets of the Fund as measured in U.S.
dollars will be affected favorably or unfavorably by changes in the
relationship of the U.S. dollar and other currency rates. The Fund may incur
costs in connection with the conversion of foreign currencies into U.S.
dollars and may be adversely affected by restrictions on

<PAGE>

the conversion or transfer of foreign currencies. In addition, there may be
less publicly available information about foreign companies than U.S.
companies. Foreign companies may not be subject to accounting, auditing, and
financial reporting standards, practices and requirements comparable to those
applicable to U.S. companies.

Foreign securities markets, while growing in volume, have for the most
part substantially less volume than U.S. securities markets and securities of
foreign companies are generally less liquid and at times their prices may be
more volatile than securities of comparable U.S. companies. Foreign stock
exchanges, brokers and listed companies are generally subject to less
government supervision and regulation than those in the U.S. The customary
settlement time for U.S. securities, is less frequent than in the U.S., which
could affect the liquidity of the Fund's investments.

In some countries, there is the possibility of expropriation or
confiscatory taxation, seizure or nationalization of foreign bank deposits or
other assets, establishment of exchange controls, the adoption of foreign
government restrictions or other adverse political, social or diplomatic
developments that could affect investments in these nations.

INVESTMENT RESTRICTIONS

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

The Fund observes the following fundamental investment restrictions.

The Fund may not:

(1) Purchase or sell real estate or any interest therein, except that the
Fund may invest in securities of corporate entities secured by real
estate or marketable interests therein or issued by companies that
invest in real estate or interests therein and may hold and sell real
estate acquired by the Fund as the result of ownership of securities.

(2) Make loans, except that the Fund may lend portfolio securities in
accordance with the Fund's investment policies. The Fund does not, for
this purpose, consider repurchase agreements, the purchase of all or a
portion of an issue of publicly distributed bonds, bank loan
participation agreements, bank certificates of deposit, bankers'
acceptances, debentures or other securities, whether or not the
purchase is made upon the original issuance of the securities, to be
the making of a loan.

(3) Invest in commodities or in commodity contracts or in puts, calls, or
combinations of both except options on securities, securities indices,
currency and other financial instruments, futures contracts on
securities, securities indices, currency and other financial
instruments,
<PAGE>
options on such futures contracts, forward commitments, forward
foreign currency exchange contracts, interest rate or currency swaps,
securities index put or call warrants and repurchase agreements
entered into in accordance with the Fund's investment policies.

(4) Purchase securities of an issuer (other than the U.S. Government, its
agencies or instrumentalities), if (i) such purchase would cause more
than 5% of the Fund's total assets taken at market value to be invested
in the securities of such issuer, or (ii) such purchase would at the
time result in more than 10% of the outstanding voting securities of
such issuer being held by the Fund.

(5) Act as an underwriter, except to the extent that, in connection with
the disposition of portfolio securities, the Fund may be deemed to be
an underwriter for purposes of the Securities Act of 1933.

(6) Borrow money, except from banks as a temporary measure for
extraordinary emergency purposes in amounts not to exceed 33 1/3% of
the Fund's total assets (including the amount borrowed) taken at market
value. The Fund will not use leverage to attempt to increase income.
The Fund will not purchase securities while outstanding borrowings
exceed 5% of the Fund's total assets.

(7) Pledge, mortgage or hypothecate its assets, except to secure
indebtedness permitted by paragraph (6) above and then only if such
pledging, mortgaging or hypothecating does not exceed 33 1/3% of the
Fund's total assets taken at market value.

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

(9) Issue senior securities, except as permitted by paragraphs (2), (3) and
(6) above. For purposes of this restriction, the issuance of shares of
beneficial interest in multiple classes or series, the purchase or sale
of options, futures contracts and options on futures contracts, forward
commitments, forward foreign currency exchange contracts and repurchase
agreements entered into in accordance with the Fund's investment
policy, and the pledge, mortgage or hypothecation of the Fund's assets
within the meaning of paragraph (7) above are not deemed to be senior
securities.

In connection with the lending of portfolio securities under item (2)
above, such loans must at all times be fully collateralized and the Fund's
custodian must take possession of the collateral either physically or in book
entry form. Securities used as collateral must be marked to market daily.

<PAGE>

Nonfundamental Investment Restrictions

The following restrictions are designated as nonfundamental and may be
changed by the Trustees without shareholder approval.

The Fund may not:

(a) purchase securities on margin or make short sales, except margin
deposits in connection with transactions in options, futures contracts,
options on futures contracts and other arbitrage transactions, or
unless by virtue of its ownership of other securities, the Fund has the
right to obtain without payment of additional consideration, securities
equivalent in kind and amount to the securities sold and, if the right
is conditional, the sale is made upon the same conditions, except that
a Fund may obtain such short-term credits as may be necessary for the
clearance of purchases and sales of securities.

(b) purchase securities of any issuer which, together with any predecessor,
has a record of less than three years' continuous operation prior to
the purchase if such purchase would cause the Fund's investment in all
such issuers to exceed 5% of the value of the Fund's total assets.

(d) purchase a security if, as a result, (i) more than 10% of the Fund's
assets would be invested in securities of closed-end investment
companies, (ii) such purchase would result in more than 3% of the total
outstanding voting securities of any one such closed-end investment
company being held by the Fund, or (iii) more than 5% of the Fund's
assets would be invested in any securities of any closed-end investment
company; provided, however, the Fund can exceed such limitations in
connection with a plan of merger or consolidation with or acquisition
of substantially all the assets of such other closed-end investment
company. The Fund may not invest in the securities of any other
open-end investment company, except in connection with a plan of merger
or consolidation with or acquisition of substantially all the assets of
such other open-end investment company.

(e) knowingly purchase or retain securities of an issuer if one or more of
the Trustees or officers of the Fund or directors or officers of the
Adviser or any investment management subsidiary of the Adviser
individually owns beneficially more than 0.5%, and together own
beneficially more than 5%, of the securities of such issuer.

(f) invest in interests in oil, gas or other mineral exploration or
development programs; provided, however, that this restriction shall
not prohibit the acquisition of securities of companies engaged in the
production or transmission of oil, gas or other minerals.

<PAGE>
(g) purchase warrants if as a result (i) more than 5% of the Fund's net
assets, valued at the lower of cost or market value, would be invested
in warrants or (ii) more than 2% of its net assets would be invested in
warrants, valued as aforesaid, which are not traded on the New York
Stock Exchange or American Stock Exchange; provided that for these
purposes, warrants are to be valued at the lesser of cost or market,
but warrants acquired in units or attached to securities will be deemed
to be without value.

(h) Purchase any security, including any repurchase agreement maturing in
more than seven days, which is not readily marketable, if more than 15%
of the net assets of the Fund, taken at market value, would be invested
in such securities.

(i) Participate on a joint or joint-and-several basis in any securities
trading account. The "bunching" of orders for the sale or purchase of
marketable portfolio securities with other accounts under the
management of the Adviser to save commissions or to average prices
among them is not deemed to result in a joint securities trading
account.

(j) Invest more than 10% of its total assets in restricted securities,
excluding restricted securities eligible for resale pursuant to Rule
144A under the Securities Act of 1933; provided, however, that no more
than 15% of the Fund's total assets may be invested in restricted
securities including restricted securities eligible for resale under
Rule 144A.

(k) Purchase interests in real estate limited partnerships.

(l) Purchase puts, calls, straddles, spreads or any combination thereof if
by reason of a purchase the Fund's aggregate investment in these
instruments would exceed 5% of its total assets.

(m) Notwithstanding any investment restriction to the contrary, the Fund
may, in connection with the John Hancock group of Funds Deferred
Compensation Plan for Independent Trustees/Directors, purchase
securities of other investment companies within the John Hancock Group
of Funds provided that, as a result, (i) no more than 10% of the Fund's
assets would be invested in securities of all other investment
companies, (ii) such purchase would not result in more than 3% of the
total outstanding voting securities of any one such investment company
being held by the Fund and (iii) no more than 5% of the Fund's assets
would be invested in any one such investment company.

In order to permit the sale of shares of the Fund in certain states,
the Trustees may, in their sole discretion, adopt restrictions or investment
policies more restrictive than those described above. Should the Trustees
determine that any such more restrictive policy is no longer in the best
interests of the Fund and its shareholders, the Fund may cease offering
shares in the state involved and the Trustees may revoke such restrictive
policy. Moreover, if the states involved shall no longer require any such
restrictive policy, the Trustees may, at their sole discretion, revoke such
policy.

<PAGE>

If a percentage restriction on investment or utilization of assets as
set forth above is adhered to at the time an investment is made, a later
change in percentage resulting from changes in the values of the Fund's
assets will not be considered a violation of the restriction.

THOSE RESPONSIBLE FOR MANAGEMENT

The business of the Fund is managed by its Trustees who elect officers
who are responsible for the day-to-day operations of the Fund and who execute
policies formulated by the Trustees. Several of the officers and Trustees of
the Fund are also officers and directors of the Adviser or officers and
directors of the Fund's principal distributor, John Hancock Funds, Inc.
("John Hancock Funds").

<PAGE>

The following table sets forth the principal occupation of employment
of the Trustees and principal officers of the Fund during the past five years:

Positions Held Principal Occupation(s)
Name and Address With The Fund During the Past Five Years

*Edward J. Boudreau, Jr. Chairman (1,2) Chairman and Chief Executive
101 Huntington Avenue Officer, the Adviser and The
Boston, Massachusetts Berkeley Financial Group ("The
Berkeley Group"); Chairman, NM
Capital Management, Inc. ("NM
Capital"); John Hancock
Advisers International Limited;
("Advisers International");
John Hancock Funds, Inc.,
("John Hancock Funds"); John
Hancock Investor Services
Corporation ("Investor
Services") and Sovereign Asset
Management Corporation
("SAMCorp"); (herein after the
Adviser, the Berkeley Group, NM
Capital, Advisers
International, John Hancock
Funds, Investor Services and
SAMCorp are collectively
referred to as the "Affiliated
Companies"); Chairman, First
Signature Bank & Trust;
Director, John Hancock Freedom
Securities Corp., John Hancock
Capital Corp., New
England/Canada Business
Council; Member, Investment
Company Institute Board of
Governors; Director, Asia
Strategic Growth Fund, Inc.;
Trustee, Museum of Science;
President, the Adviser (until
July 1992). Chairman John
Hancock Distributors, Inc.
(until April, 1994).

- --------------
*An "interested person" of the Fund, as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act:).
(1) A Member of the Executive Committee.
(2) A Member of Investment Committee of the Adviser.
(3) An Alternate Member of the Executive Committee.
(4) A Member of the Audit and Administration Committees.

<PAGE>

Positions Held Principal Occupation(s)
Name and Address With The Fund During the Past Five Years

Dennis S. Aronowitz Trustee (4) Professor of Law, Boston
Boston University University School of Law;
Boston, Massachusetts Trustee, Brookline Savings
Bank; Director, Boston
University Center for Banking
Law Studies (until 1990).

Richard P. Chapman, Jr. Trustee (4) President, Brookline Savings
160 Washington Street Bank.
Brookline, Massachusetts

William J. Cosgrove Trustee (4) Vice President, Senior Banker
20 Buttonwood Place and Senior Credit Officer,
Saddle River, New Jersey Citibank, N.A. (retired
September 1991); Executive Vice
President, Citadel Group
Representative, Inc.

Gail D. Fosler Trustee (4) Vice President and Chief
4104 Woodbine Street Economist, The Conference Board
Chevy Chase, MD (non-profit economic and
business research).

Bayard Henry Trustee (4) Corporate Advisor; Director,
121 High Street Fiduciary Trust Company (a
Boston, Massachusetts trust company); Director,
Groundwater Technology, Inc.
(remediation); Samuel Cabot,
Inc.; Advisor, Corning Capital
Corp.

- --------------
* An "interested person" of the Fund, as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(1) A Member of the Executive Committee.
(2) A Member of Investment Committee of the Adviser.
(3) An Alternate Member of the Executive Committee.
(4) A Member of the Audit and Administration Committees.

<PAGE>

Positions Held Principal Occupation(s)
Name and Address With The Fund During the Past Five Years

*Richard S. Scipione Trustee (3) General Counsel, the Life
John Hancock Place Insurance Company; Director,
P.O. Box 111 the Adviser, the Affiliated
Boston, Massachusetts Companies, John Hancock
Distributors, Inc., JH
Networking Insurance Agency,
Inc., John Hancock
Subsidiaries, Inc., SAMCorp,
NM Capital and John Hancock
Property and Casualty
Insurance and its affiliates
(until November, 1993);
Trustee; The Berkeley Group;
Director, John Hancock Home
Mortgages Corp. and John
Hancock Financial Access, Inc.
(until July 1990).

Edward J. Spellman Trustee (4) Partner, KPMG Peat Marwick
259C Commercial Bld. (retired June 1990).
Suite 200
Lauderdale by the Sea, FL

*Robert G. Freedman Vice Chairman and Vice Chairman and Chief
101 Huntington Avenue Chief Investment Investment Officer, the
Boston, Massachusetts Officer (2) Adviser; President, the
Adviser (until December 1994).

*Anne C. Hodsdon President (2) President and Chief Operations
101 Huntington Avenue Officer, the Adviser;
Boston, Massachusetts Executive Vice President, the
Adviser (until December 1994).

*Thomas H. Drohan Senior Vice Senior Vice President and
101 Huntington Avenue President and Secretary, the Adviser.
Boston, Massachusetts Secretary

*James K. Ho Senior Vice Senior Vice President, the
101 Huntington Avenue President (2) Adviser.
Boston, Massachusetts

- --------------
* An "interested person" of the Fund, as such term is defined in the
Investment Company Act.
(1) A Member of the Executive Committee.
(2) A Member of Investment Committee of the Adviser.
(3) An Alternate Member of the Executive Committee.
(4) A Member of the Audit and Administration Committees.

Positions Held Principal Occupation(s)
Name and Address With The Fund During the Past Five Years

*James B. Little Senior Vice Senior Vice President the
101 Huntington Avenue President and Chief Adviser.
Boston, Massachusetts Financial Officer (2)

*Michael P. DiCarlo Senior Vice Senior Vice President, the
101 Huntington Avenue President (2) Adviser.
Boston, Massachusetts

*John A. Morin Vice President Vice President, the Adviser.
101 Huntington Avenue
Boston, Massachusetts

*Susan S. Newton Vice President, Vice President and Assistant
101 Huntington Avenue Assistant Secretary Secretary, the Adviser.
Boston, Massachusetts and Compliance
Officer

*James J. Stokowski Vice President and Vice President, the Adviser.
101 Huntington Avenue Treasurer
Boston, Massachusetts

All of the officers listed are officers or employees of the Adviser or
affiliated companies. Some of the Trustees and officers may also be officers
and/or directors and/or trustees of one or more of the other funds for which
the Adviser serves as investment adviser.

<PAGE>

The following table provides information regarding the compensation
paid by the Fund and the other investment companies in the John Hancock Fund
Complex to the Independent Trustees for their services for each Fund's 1994
fiscal year. The two non-Independent Trustees, Messrs. Boudreau and
Scipione, and each of the officers of the Funds are interested persons of the
Adviser, are compensated by the Adviser and receive no compensation from the
Fund for their services.

<TABLE>
<CAPTION>
Total
Compensation
Pension or From the Fund
Aggregate Retirement Estimated and John
Compensation Benefits Annual Hancock Fund
From the Fund Accrued as Part Benefits Upon Complex to
Independent Trustees of the Fund's Retirement Trustees(1)
Expenses (Total of 18
Funds)
<S> <C> <C> <C> <C>
Dennis S. Aronowitz $ - $ - $ - $ 60,950
Richard P. Chapman, $ - $ - $ - $ 62,950
Jr.
William J. Cosgrove $ - $ - $ - $ 60,950
Gail D. Fosler $ - $ - $ - $ 62,950
Bayard Henry $ - $ - $ - $ 60,950
Edward J. Spellman $ - $ - $ - $ 60,950
------
$369,700
<FN>
(1)The total compensation paid by the John Hancock Fund Complex to the
Independent Trustees is as of the calendar year ended December 31, 1994.
</FN>
</TABLE>

The nominees of the Funds may at times be the record holders of in
excess of 5% of shares of any one or more Funds by virtue of holding shares
in "street name." As of April 11, 1995 the officers and trustees of the
Trusts as a group owned less than 1% of the outstanding shares of each class
of each of the Funds.

As of April 11, 1995 the following shareholders beneficially owned 5%
of or more of the outstanding shares of the Funds listed below:

Percentage of
Number of total
Fund and shares of outstanding
Name and Address of Class of beneficial shares of the
Shareholder Shares interest owned class of the
Fund
Merrill Lynch Pierce Fenner Class B shares 43.538 5.81%
& Smith Inc.
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
Tucker Anthony & R L Day Class B shares 55.006 7.34%

<PAGE>

One World Financial Center
Tower A
200 Liberty Street
New York, NY 10281-1003

INVESTMENT ADVISORY,
SUB-ADVISORY AND OTHER SERVICES

As described in the Prospectuses, the Fund receives its investment
advice from the Advisers. Investors should refer to the applicable
Prospectus for a description of certain information concerning the investment
management and investment sub-advisory contracts. Each of the Trustees and
principal officers of the Fund who is also an affiliated person of the
Advisers is named above, together with the capacity in which such person is
affiliated with the Fund and the Advisers.

As described in the Prospectuses under the caption "Organization and
Management of the Fund," the Fund has entered into an investment management
contract with the Adviser and an investment sub-advisory contract with the
Sub-Adviser. Under the investment management contract, the Adviser provides
the Fund with (i) a continuous investment program, consistent with the Fund's
stated investment objective and policies, (ii) supervision of all aspects of
the Fund's operations except those that are delegated to a custodian,
transfer agent or other agent and (iii) such executive, administrative and
clerical personnel, officers and equipment as are necessary for the conduct
of its business. The Adviser is responsible for the management of the Fund's
portfolio assets.

The Adviser has entered into a sub-investment management contract with
the Sub-Adviser under which the Sub-Adviser, subject to the review of the
Trustees and the over-all supervision of the Adviser, is responsible for
managing the investment operations of the Fund and the composition of the
Fund's portfolio and furnishing the Fund with advice and recommendations with
respect to investments, investment policies and the purchase and sale of
securities.

Securities held by the Fund may also be held by other funds or
investment advisory clients for which the Advisers or their affiliates
provide investment advice. Because of different investment objectives or
other factors, a particular security may be bought for one or more funds or
clients when one or more other funds or clients are selling the same
security. If opportunities for purchase or sale of securities by the
Advisers for the Fund or for other funds or clients for which one of the
Advisers renders investment advice arise for consideration at or about the
same time, transactions in such securities will be made, insofar as feasible,
for the respective funds or clients in a manner deemed equitable to all of
them. To the extent that transactions on behalf of more than one client of
one of the Advisers or their affiliates may increase the demand for
securities being purchased or the supply of securities being sold, there may
be an adverse effect on price.

<PAGE>
No person other than the Advisers and their directors and employees
regularly furnishes advice to the Fund with respect to the desirability of
the Fund's investing in, purchasing or selling securities. The Advisers may
from time to time receive statistical or other similar factual information,
and information regarding general economic factors and trends, from the Life
Insurance Company and its affiliates.

Under the terms of the investment management contract with the Fund,
the Adviser provides the Fund with office space, supplies and other
facilities required for the business of the Fund. The Adviser pays the
compensation of all other officers and employees of the Trust, and pays the
expenses of clerical services relating to the administration of the Fund.

All expenses which are not specifically paid by the Adviser and which
are incurred in the operation of the Fund (including fees of Trustees of the
Trust who are not "interested persons," as such term is defined in the
Investment Company Act, but excluding certain distribution related activities
required to be paid by the Adviser or John Hancock Funds) and the continuous
public offering of the shares of the Fund are borne by the Fund. Subject to
conditions set forth in a private letter ruling that the Fund has received
for from the Internal Revenue Service relating to its multiple-class
structure, class expenses properly allocable to any of Class A and Class B
shares will be borne exclusively by such class of shares.

As discussed in the Prospectuses and as provided by the investment
management contract, the Fund pays the Adviser monthly an investment
management fee, which is accrued daily, of 0.70% of the average of the daily
net assets of the Fund. For its sub-advisory services, the Adviser pays the
Sub-Adviser monthly a sub-advisory fee of 40% of the fee received by the
Adviser for managing the Fund. The Fund is not responsible for payment of
the Sub-Adviser's fee.

If the total of all ordinary business expenses of the Fund for any
fiscal year exceeds limitations prescribed in any state in which shares of
the Fund are qualified for sale, the fee payable to the Adviser will be
reduced to the extent required by these limitations. At this time, the most
restrictive limit on expenses imposed by a state requires that expenses
charged to the Fund in any fiscal year may not exceed 2 1/2% of the first
$30,000,000 of the Fund's average net assets, 2% of the next $70,000,000 of
such net assets and 1 1/2% of the remaining average net assets. When
calculating the above limit, the Fund may exclude interest, brokerage
commissions and extraordinary expenses.

<PAGE>
Pursuant to the investment management contract and sub-advisory
contract, the Adviser and Sub-Adviser are not liable to the Fund for any
error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which their respective contract relates,
except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser or the Sub-Adviser in the performance
of their duties or from their reckless disregard of their obligations and
duties under the applicable contract.

The Adviser, located at 101 Huntington Avenue, Boston, Massachusetts
02199-7603, was organized in 1968 and presently has more than $13 billion in
assets under management in its capacity as investment adviser to the Fund and
the other mutual funds and publicly traded investment companies in the John
Hancock group of funds having a combined total of over 1,060,000
shareholders. The Adviser is an affiliate of the Life Insurance Company, one
of the most recognized and respected financial institutions in the nation.
The Sub-Adviser is also an indirect subsidiary of the Life Insurance Company
and provides investment management advisory services for institutional and
individual investors. The Sub-Adviser managed approximately $950 million in
assets. With total assets under management of approximately $80 billion, the
Life Insurance Company is one of the ten largest life insurance companies in
the United States, and carries S&P's and A.M. Best's highest ratings.
Founded in 1862, the Life Insurance Company has been serving clients for over
130 years.

Under the investment management contract, the Fund may use the name
"John Hancock" or any name derived from or similar to it only for so long as
the contract or any extension, renewal or amendment thereof remains in
effect. If the contract is no longer in effect, the Fund (to the extent that
it lawfully can) will cease to use such a name or any other name indicating
that it is advised by or otherwise connected with the Adviser. In addition,
the Adviser or the Life Insurance Company may grant the non-exclusive right
to use the name "John Hancock" or any similar name to any other corporation
or entity, including but not limited to any investment company of which the
Life Insurance Company or any subsidiary or affiliate thereof or any
successor to the business of any subsidiary or affiliate thereof shall be the
investment adviser.

The investment management contract, the investment sub-advisory
contract and the distribution contract discussed below continue in effect
from year to year if approved annually by vote of a majority of the Fund's
Trustees who are not interested persons of one of the parties to the
contract, cast in person at a meeting called for the purpose of voting on
such approval, and by either the Fund's Trustees or the holders of a majority
of the Fund's outstanding voting securities. Each of these contracts
automatically terminates upon assignment. Each contract may be terminated
without penalty on 60 days' notice at the option of either party to the
respective contract or by vote of a majority of the outstanding voting
securities of the Fund.

<PAGE>
DISTRIBUTION CONTRACT

The Fund has a distribution contract with John Hancock Funds. Under
the contract, John Hancock Funds is obligated to use its best efforts to sell
shares of the Fund. Shares of the Fund are sold by selected broker-dealers
(the "Selling Brokers") which have entered into selling agency agreements
with John Hancock Funds. John Hancock Funds accepts orders for the purchase
of the shares of the Fund which are continually offered at net asset value
next determined plus any applicable sales charge. In connection with the
sale of Class A or Class B shares of the Fund, John Hancock Funds and Selling
Brokers receive compensation in the form of a sales charge imposed, in the
case of Class A shares, at the time of sale or, in the case of Class B
shares, on a deferred basis. The sales charges are discussed further in the
Fund's Class A and Class B Prospectus.

The Fund's Trustees adopted Distribution Plans with respect to Class A
and Class B shares (the "Plans"), pursuant to Rule 12b-1 under the Investment
Company Act of 1940. Under the Plans, the Fund will pay distribution and
service fees for Class A and Class B shares, at an aggregate annual rate of
up to 0.30% and 1.00%, respectively, of the Fund's average daily net assets.
However, the amount of the service fee will not exceed 0.25% of the Fund's
average daily net assets attributable to each class of shares. The
distribution fees reimburse John Hancock Funds for its distribution costs
incurred in the promotion of sales of Fund shares, and the service fees
compensate Selling Brokers for providing personal and account maintenance
services to shareholders. The Plans have also been approved by a majority of
the Trustees, including a majority of the Trustees who are not interested
persons of the Fund and who have no direct or indirect financial interest in
the operation of the Plan (the "Independent Trustees"), by votes cast in
person at meetings called for the purpose of voting on such Plans.

<PAGE>

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

During the fiscal year ended December 31, 1994, the Fund paid
Investor Services the following amounts of expenses with respect to the Class
A shares and Class B shares of the Fund:

Expense Items

Printing Interest
and Mailing Expenses Carrying or
of Compensation of John Other
Prospectus to Selling Hancock Finance
Advertising to New Brokers Funds Charges
Shareholders Other

Special Value
Class A shares $ 2,407 $ 536 $ 331 $ 2,367 $ 0
Class B shares $ 1,422 $ 236 $ 4,391 $ 1,506 $ 52

<PAGE>

Each of the Plans provides that it will continue in effect only so long
as its continuance is approved at least annually by a majority of both the
Trustees and the Independent Trustees. Each of the Plans provides that it
may be terminated without penalty (a) by vote of a majority of the
Independent Trustees, (b) by a vote of a majority of the Fund's outstanding
shares of the applicable class in each case upon 60 days' written notice to
John Hancock Funds and (c) automatically in the event of assignment. Each of
the Plans further provides that it may not be amended to increase the maximum
amount of the fees for the services described therein without the approval of
a majority of the outstanding shares of the class of the Fund which has
voting rights with respect to the Plan. And finally, each of the Plans
provides that no material amendment to the Plan will, in any event, be
effective unless it is approved by a majority vote of both the Trustees and
the Independent Trustees of the Fund. The holders of Class A shares and
Class B shares have exclusive voting rights with respect to the Plan
applicable to their respective class of shares. In adopting the Plans, the
Trustees concluded that, in their judgment, there is a reasonable likelihood
that each Plan will benefit the holders of the applicable class of shares of
the Fund.

When the Fund seeks an Independent Trustee to fill a vacancy or as a
nominee for election by shareholders, the selection or nomination of the
Independent Trustee is, under resolutions adopted by the Trustees
contemporaneously with their adoption of the Plans, committed to the
discretion of the Committee on Administration of the Trustees. The members
of the Committee on Administration are all Independent Trustees and are
identified in this Statement of Additional Information under the heading
"Those Responsible for Management."

NET ASSET VALUE

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

Debt investment securities are valued on the basis of valuations
furnished by a principal market maker or a pricing service, both of which
generally utilize electronic data processing techniques to determine
valuations for normal institutional size trading units of debt securities
without exclusive reliance upon quoted prices.

Equity securities traded on a principal exchange or NASDAQ National Market
Issues are generally valued at last sale price on the day of valuation.
Securities in the aforementioned category for which no sales are reported and
other securities traded over-the-counter are generally valued at the last
available bid price.

Short-term debt investments which have a remaining maturity of 60 days or
less are generally valued at amortized cost which approximates market value.
If market quotations are not readily available or if in the opinion of the
Adviser any quotation or price is not representative of true market value,
the fair value of the security may be determined in good faith in accordance
with procedures approved by the Trustees.

<PAGE>

Any assets or liabilities expressed in terms of foreign currencies are
translated into U.S. dollars by the custodian bank based on London currency
exchange quotations as of 5:00 p.m., London time (12:00 noon, New York time)
on the date of any determination of a Fund's NAV.

A Fund will not price its securities on the following national holidays: New
Year's Day; Presidents' Day; Good Friday; Memorial Day; Independence Day;
Labor Day; Thanksgiving Day; and Christmas Day. On any day an international
market is closed and the New York Stock Exchange is open, any foreign
securities will be valued at the prior day's close with the current day's
exchange rate. Trading of foreign securities may take place on Saturdays and
U.S. business holidays on which a Fund's NAV is not calculated.
Consequently, a Fund's portfolio securities may trade and the NAV of the
Fund's redeemable securities may be significantly affected on days when a
shareholder has no access to the Fund.

INITIAL SALES CHARGE ON CLASS A SHARES

The sales charges applicable to purchases of Class A shares of the Fund
are described in the Class A and Class B Prospectus. Methods of obtaining
reduced sales charges referred to generally in the Class A and Class B
Prospectus are described in detail below. In calculating the sales charge
applicable to current purchases of Class A shares of the Fund, the investor
is entitled to cumulate current purchases with the greater of the current
value (at offering price) of the Class A shares of the Fund, or if Investor
Services is notified by the investor's dealer or the investor at the time of
the purchase, the cost of the Class A shares owned.

Combined Purchases. In calculating the sales charge applicable to purchases
of Class A shares made at one time, the purchases will be combined if made by
(a) an individual, his spouse and their children under the age of 21,
purchasing securities for his or their own account, (b) a trustee or other
fiduciary purchasing for a single trust, estate or fiduciary account and (c)
certain groups of four or more individuals making use of salary deductions or
similar group methods of payment whose funds are combined for the purchase of
mutual fund shares. Further information about combined purchases, including
certain restrictions on combined group purchases, is available from Investor
Services or a Selling Broker's representative.

Without Sales Charges. As described in the Class A and Class B Prospectus,
Class A shares of the Fund may be sold without a sales charge to certain
persons described in the Prospectus.

Accumulation Privilege. Investors (including investors combining purchases)
who are already Class A shareholders may also obtain the benefit of the
reduced sales charge by taking into account not only the amount then being
invested but also the purchase price or current value of the Class A shares
already held by such person.

Combination Privilege. Reduced sales charges (according to the schedule set
forth in the Class A and Class B Prospectus) also are available to an
investor based on the aggregate amount of his concurrent and prior
investments in Class A shares of the Fund and shares of all other John
Hancock funds which carry a sales charge.
<PAGE>
Letter of Intention. The reduced sales charges are also applicable to
investments made over a thirteen-month period pursuant to a Letter of
Intention (the "LOI"), which should be read carefully prior to its execution
by an investor. The Fund offers two options regarding the specified period
for making investments under the LOI. All investors have the option of
making their investments over a specified period of thirteen (13) months.
Investors who are using the Fund as a funding medium for a qualified
retirement plan, however, may opt to make the necessary investments called
for by the LOI over a forty-eight (48) month period. These qualified
retirement plans include group IRA, SEP, SARSEP, TSA and 401(k), 403(b) and
457 plans. Such an investment (including accumulations and combinations)
must aggregate $50,000 or more invested during the specified period from the
date of the LOI or from a date within ninety (90) days prior thereto, upon
written request to Investor Services. The sales charge applicable to all
amounts invested under the LOI is computed as if the aggregate amount
intended to be invested had been invested immediately. If such aggregate
amount is not actually invested, the difference in the sales charge actually
paid and the sales charge payable had the LOI not been in effect is due from
the investor. However, for the purchases actually made within the specified
period (either 13 or 48 months) the sales charge applicable will not be
higher than that which would have applied (including accumulations and
combinations) had the LOI been for the amount actually invested.

The LOI authorizes Investor Services to hold in escrow sufficient Class
A shares (approximately 5% of the aggregate) to make up any difference in
sales charges on the amount intended to be invested and the amount actually
invested, until such investment is completed within the specified period, at
which time the escrow shares will be released. If the total investment
specified in the LOI is not completed, the Class A shares held in escrow may
be redeemed and the proceeds used as required to pay such sales charge as may
be due. By signing the LOI, the investor authorizes Investor Services to act
as his attorney-in-fact to redeem any escrowed shares and adjust the sales
charge, if necessary. A LOI does not constitute a binding commitment by an
investor to purchase, or by the Fund to sell, any additional shares and may
be terminated at any time.

DEFERRED SALES CHARGE ON CLASS B SHARES

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

Contingent Deferred Sales Charge. Class B shares which are redeemed within
six years of purchase will be subject to a contingent deferred sales charge
("CDSC") at the rates set forth in the Prospectus as a percentage of the
dollar amount subject to the CDSC. The charge will be assessed on an amount
equal to the lesser of the current market value or the original purchase cost
of the Class B shares being redeemed. Accordingly, no CDSC will be imposed
on increases in account value above the initial purchase prices, including
Class B shares derived from reinvestment of dividends or capital gains
distributions.
<PAGE>
The amount of the CDSC, if any, will vary depending on the number of
years from the time of payment for the purchase of Class B shares until the
time of redemption of such shares. Solely for purposes of determining the
number of years from the time of any payment for the purchases of shares, all
payments during a month will be aggregated and deemed to have been made on
the last day of the month.

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

SPECIAL REDEMPTIONS

Although it would not normally do so, the Fund has the right to pay the
redemption price of shares of the Fund in whole or in part in portfolio
securities as prescribed by the Trustees. If the shareholder were to sell
portfolio securities received in this fashion he would incur a brokerage
charge. Any such securities would be valued for the purposes of making such
payment at the same value as used in determining net asset value. The Fund
has, however, elected to be governed by Rule 18f-1 under the Investment
Company Act. Under that rule, the Fund must redeem its shares for cash
except to the extent that the redemption payments to any shareholder during
any 90-day period would exceed the lesser of $250,000 or 1% of the Fund's net
asset value at the beginning of such period.

ADDITIONAL SERVICES AND PROGRAMS

Exchange Privilege. As described more fully in the Prospectuses, the Fund
permits exchanges of shares of any class of the Fund for shares of the same
class in any other John Hancock fund offering that class.

<PAGE>

purchase Class A or Class B shares at the same time that a Systematic
Withdrawal Plan is in effect. The Fund reserves the right to modify or
discontinue the Systematic Withdrawal Plan of any shareholder on 30 days'
prior written notice to such shareholder, or to discontinue the availability
of such plan in the future. The shareholder may terminate the plan at any
time by giving proper notice to Investor Services.

Monthly Automatic Accumulation Program ("MAAP"). This program applies solely
to Class A shares of the Fund and is explained more fully in the Class A and
Class B Prospectus and the Account Privilege Application. The program, as it
relates to automatic investment checks, is subject to the following
conditions:

The investments will be drawn on or about the day of the month
indicated.

The privilege of making investments through the Monthly Automatic
Accumulation Program may be revoked by Investor Services without prior notice
if any investment is not honored by the shareholder's bank. The bank shall
be under no obligation to notify the shareholder as to the non-payment of any
check.

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

Reinvestment Privilege. A shareholder who has redeemed Fund shares may,
within 120 days after the date of redemption, reinvest without payment of a
sales charge any part of the redemption proceeds in shares of the same class
of the Fund or another John Hancock mutual fund, subject to the minimum
investment limit of that fund. The proceeds from the redemption of Class A
shares may be reinvested at net asset value without paying a sales charge in
Class A shares of the Fund or in Class A shares of another John Hancock
mutual fund. If a CDSC was paid upon a redemption, a shareholder may
reinvest the proceeds from this redemption at net asset value in additional
shares of the class from which the redemption was made. The shareholder's
account will be credited with the amount of any CDSC charge upon the prior
redemption and the new shares will continue to be subject to the CDSC. The
holding period of the shares acquired through reinvestment will, for purposes
of computing the CDSC payable upon a subsequent redemption, include the
holding period of the redeemed shares. The Fund may modify or terminate the
reinvestment privilege at any time.

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

<PAGE>

DESCRIPTION OF THE FUND'S SHARES

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

The shares of each class of the Fund represent an equal proportionate
interest in the aggregate net assets attributable to that class of the Fund.
Class A shares and Class B shares of the Fund will be sold exclusively to
members of the public (other than the institutional investors described in
the Class A and Class B Prospectus) at net asset value and a sales charge
will be imposed either at the time of the purchase, for Class A shares, or on
a contingent deferred basis, for Class B shares. For Class A shares, no
sales charge is payable at the time of purchase on investments of $1 million
or more, but for such investments a contingent deferred sales charge may be
imposed in the event of certain redemption transactions within one year of
purchase.

Holders of Class A shares and Class B shares have certain exclusive
voting rights on matters relating to their respective distribution plans.
The different classes of the Fund may bear different expenses relating to the
cost of holding shareholder meetings necessitated by the exclusive voting
rights of any class of shares.

Dividends paid by the Fund, if any, with respect to each class of
shares will be calculated in the same manner, at the same time and on the
same day and will be in the same amount, except that (i) the distribution and
service fees relating to Class A and Class B shares will be borne exclusively
by that class (ii) Class B shares will pay higher distribution and service
fees than Class A shares and (iii) each of Class A shares and Class B shares
will bear any other class expenses properly allocable to such class of
shares, subject to the conditions set forth in a private letter ruling that
the Fund has received from the Internal Revenue Service relating to its
multiple-class structure. Similarly, the net asset value per share may vary
depending on whether Class A shares or Class B shares are purchased.

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

<PAGE>

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

Under Massachusetts law, shareholders of a Massachusetts business trust
could, under certain circumstances, he held personally liable for acts or
obligations of the trust. However, the Fund's Declaration of Trust contains
an express disclaimer of shareholder liability for acts, obligations or
affairs of the Fund. The Declaration of Trust also provides for
indemnification out of the Fund's assets for all losses and expenses of any
shareholder held personally liable by reason of being or having been a
shareholder. Liability is therefore limited to circumstances in which the
Fund itself would be unable to meet its obligations, and the possibility of
this occurrence is remote.

TAX STATUS

Each series of the Trust, including the Fund, is treated as a separate
entity for accounting and tax purposes. The Fund has qualified and intends
to continue to qualify as a "regulated investment company" under Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code"). As such and
by complying with the applicable provisions of the Code regarding the sources
of its income, the timing of its distributions and the diversification of its
assets, the Fund will not be subject to Federal income tax on taxable income
(including net realized capital gains) which is distributed to shareholders
at least annually in accordance with the timing requirements of the Code.

The Fund will be subject to a four percent nondeductible Federal excise
tax on certain amounts not distributed (and not treated as having been
distributed) on a timely basis in accordance with annual minimum distribution
requirements. The Fund intends under normal circumstances to avoid liability
for this tax by satisfying such distribution requirements.

Distributions from the Fund's current or accumulated earnings and
profits ("E&P"), as computed for Federal income tax purposes, will be taxable
as described in the Fund's Prospectus, whether taken in shares or in cash.
Distributions, if any, in excess of E&P will constitute a return of capital,
which will first reduce an investor's tax basis in Fund shares and thereafter
(after such basis is reduced to zero) will generally give rise to capital
gains. Shareholders electing to receive distributions in the form of
additional shares will have a cost basis for Federal income tax purposes in
each share so received equal to the amount of cash that they would have
received had they elected to receive cash, divided by the number of shares
received.

<PAGE>

Foreign exchange gains and losses realized by the Fund in connection
with certain transactions involving foreign currency-denominated debt
securities, certain foreign currency options and futures contracts, forward
foreign currency contracts, foreign currencies, or payables or receivables
denominated in a foreign currency are subject to Section 988 of the Code,
which generally causes such gains and losses to be treated as ordinary income
and losses and may affect the amount, timing and character of distributions
to shareholders. Any such transactions that are not directly-related to the
Fund's investment in stock or securities, possibly including certain currency
positions or derivatives not used for hedging purposes, may increase the
amount of gain it is deemed to recognize from the sale of certain investments
held for less than three months, which gain is limited under the Code to less
than 30% of its annual gross income, and may under future Treasury
regulations produce income not among the types of "qualifying income" from
which the Fund must derive at least 90% of its annual gross income. If the
net foreign exchange loss for a year treated as ordinary loss under Section
988 were to exceed the Fund's investment company taxable income, i.e. all of
the Fund's net income other that any excess of net long-term capital gain
over net short-term capital loss, (computed without regard to such a loss but
after considering the post-October loss regulations) the resulting overall
ordinary loss for such a year would not be deductible by the Fund or its
shareholders in future years.

The Fund may be subject to foreign taxes on its income from certain
foreign securities. Tax conventions between certain countries and the U.S.
may reduce or eliminate such taxes. Because more than 50% of the Fund's
assets at the close of any taxable year will not consist of stocks or
securities of foreign corporations, the Fund will be unable to pass such
taxes through to shareholders (as additional income) along with a
corresponding entitlement to a foreign tax credit or deduction. If the Fund
acquires stock in certain non-U.S. corporations that receive at least 75% of
their annual gross income from passive sources (such as interest, dividends,
rents, royalties or capital gain) or hold at least 50% of their assets in
investments producing such passive income ("passive foreign investment
companies"), the Fund could be subject to Federal income tax and additional
interest charges on "excess distributions" received from such companies or
gain from the sales of stock in such companies, even if all income or gain
actually received by the Fund is timely distributed to its shareholders any
credit or deduction for such a tax. Certain elections may, of available,
ameliorate these adverse tax consequences, but any such election would
required the Fund to recognize taxable income or gain without the concurrent
receipt of cash. The Fund may limit and/or manage its holdings in passive
foreign investment companies to minimize its tax liability or maximize its
return from these investments.

The amount of net realized capital gains, if any, in any given year
will vary depending upon the Advisers' current investment strategy and
whether the Advisers believe it to be in the best interest of the Fund to
dispose of portfolio securities that will generate capital gains or enter
into transactions in certain options or futures. At the time of an
investor's purchase of shares of the Fund, a portion of the purchase price is
often attributable to realized or unrealized appreciation in the Fund's
portfolio or undistributed taxable income of the Fund. Consequently,
subsequent distributions on such shares may be taxable to such investor even
if the net asset value of the investor's shares is, as a result of the
distributions, reduced below the investor's cost for those shares and the
distributions in reality represent a return of a portion of the purchase
price.

<PAGE>

Upon a redemption of shares (including by exercise of the exchange
privilege) a shareholder will ordinarily realize a taxable gain or loss
depending upon his basis in his shares. This gain or loss will be treated as
capital gain or loss if the shares are capital assets in the shareholder's
hands and will be long-term or short-term, depending upon the shareholder's
tax holding period for the shares. A sales charge paid in purchasing Class A
shares of the Fund cannot be taken into account for purposes of determining
gain or loss on the redemption or exchange of such shares within 90 days
after their purchase to the extent Class A shares of the Fund or another John
Hancock fund are subsequently acquired without payment of a sales charge
pursuant to the reinvestment or exchange privilege. This disregarded charge
will result in an increase in the shareholder's tax basis in the Class A
shares subsequently acquired. Also, any loss realized on a redemption or
exchange may be disallowed for tax purposes to the extent the shares disposed
of are replaced with other shares of the Fund within a period of 61 days
beginning 30 days before and ending 30 days after the shares are disposed of,
such as pursuant to the Dividend Reinvestment Plan. In such a case, the
basis of the shares acquired will be adjusted to reflect the disallowed
loss. Any loss realized upon the redemption of shares with a tax holding
period of six months or less will be treated as a long-term capital loss to
the extent of any amounts treated as distributions of long-term capital gain
with respect to such shares.

Although its present intention is to distribute all net capital gains
annually, if any, the Fund reserves the right to retain and reinvest all or
any portion of the excess, as computed for Federal income tax purposes, of
net long-term capital gain over net short-term capital loss in any year. The
Fund will not in any event distribute net long-term capital gains realized in
any year to the extent that a capital loss is carried forward from prior
years against such gain. To the extent such excess was retained and not
exhausted by the carry forward of prior years' capital losses, it would be
subject to Federal income tax in the hands of the Fund. Each shareholder
would be treated for Federal income tax purposes as if the Fund had
distributed to him on the last day of its taxable year his pro rata share of
such excess, and he had paid his pro rata share of the taxes paid by the Fund
and reinvested the remainder in the Fund. Accordingly, each shareholder
would (a) include his pro rata share of such excess as long-term capital gain
in his tax return for his taxable year in which the last day of the Fund's
taxable year falls, (b) be entitled either to a tax credit on his return for,
or to a refund of, his pro rata share of the taxes paid by the Fund, and (c)
be entitled to increase the adjusted tax basis for his shares in the Fund by
the difference between his pro rata share of such excess and the pro rata
share of such taxes.

For Federal income tax purposes, the Fund is permitted to carry forward
a net capital loss in any year to offset net realized capital gains, if any,
during the eight years following the year of the loss. To the extent
subsequent net capital gains are offset by such losses, they would not result
in Federal income tax liability to the Fund and, as noted above, would not be
distributed to shareholders. Presently, there are no capital loss carry
forwards to offset future net realized capital gains.

Limitations imposed by the Code on regulated investment companies like
the Fund may restrict the Fund's ability to enter into futures and options
transactions and currency forward contracts. The options and futures
transactions and certain forward, currency transactions undertaken by the
Fund may cause the Fund to recognize gains or losses from marking to market

<PAGE>

even though its positions have not been sold or terminated and affect the
character as long-term or short-term (or, in the case of certain currency
forwards options and futures, as ordinary income or loss) and timing of some
gains and losses realized by the Fund. Also, certain of the Fund's losses on
its transactions involving options, futures or forward contracts and/or
offsetting portfolio positions may be deferred rather than being taken into
account currently in calculating the Fund's taxable income. These
transactions may therefore affect the amount, timing and character of the
Fund's distributions to shareholders. Some of the applicable tax rules may
be modified if the Fund is eligible and chooses to make one or more of
certain tax elections that may be available. The Fund will take into account
the special tax rules applicable to options, futures or forward contracts
(including consideration of any available elections) in order to minimize any
potential adverse tax consequences.

For purposes of the dividends-received deduction available to
corporations, dividends received by the Fund, if any, from U.S. domestic
corporations in respect of the stock of such corporations held by the Fund,
for U.S. Federal income tax purposes, for at least 46 days (91 days in the
case of certain preferred stock) and distributed and designated by the Fund
may be treated as qualifying dividends. Corporate shareholders must meet the
minimum holding period requirement stated above (46 or 91 days) with respect
to their shares of the Fund in order to qualify for the deduction and, if
they borrow to acquire such shares, may be denied a portion of the dividends
received deduction. The entire qualifying dividend, including the
otherwise-deductible amount, will be included in determining the excess (if
any) of a corporate shareholder's adjusted current earnings over its
alternative minimum taxable income, which may increase its alternative
minimum tax liability, if any. Additionally, any corporate shareholder should
consult its tax adviser regarding the possibility that its tax basis in its
Fund shares may also be reduced, for Federal income tax purposes, by reason
of "extraordinary dividends" received with respect to the shares, for the
purpose of computing its gain or loss on redemption or other disposition of
the shares.

Different tax treatment, including penalties on certain excess
contributions and deferrals, certain pre-retirement and post-retirement
distributions and certain prohibited transactions, is accorded to accounts
maintained as qualified retirement plans. Shareholders should consult their
tax advisers for more information.

The foregoing discussion relates solely to U.S. Federal income tax laws
as applicable to U.S. persons (i.e., U.S. citizens or residents and U.S.
domestic corporations, partnerships, trusts or estates) subject to tax under
the laws. The discussion does not address special tax rules applicable to
certain classes of investors, such as tax-exempt entities, insurance
companies and financial institutions. Dividends, capital gain distributions
and ownership of or gains realized on the redemption (including an exchange)
of shares of the Fund may also be subject to state and local taxes.
Shareholders should consult their own tax advisers as to the Federal, state
or local tax consequences of ownership of shares of and receipt of
distributions from the Fund in their particular circumstances.

Non-U.S. investors not engaged in a U.S. trade or business with which
their Fund investment is effectively connected will be subject to U.S.
Federal income tax treatment that is

<PAGE>

different from that described above. These investors may be subject to
non-resident alien withholding tax at the rate of 30% (or a lower rate under
an applicable tax treaty) on amounts treated as ordinary dividends from the
Fund and, unless an effective IRS Form W-8 or authorized substitute is on
file, to 31% backup withholding on certain other payments from the Fund.
Non-U.S. investors should consult their tax advisers regarding such treatment
and the application of foreign taxes to an investment in the Fund.

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

CALCULATION OF PERFORMANCE

The average annual total return of the Class A and Class B shares of
the Fund, for the period from commencement of operations, January 3, 1994 to
December 31, 1994, was 2.39% and 2.15%, respectively.

The Fund's total return is computed by finding the average annual
compounded rate of return over the 1 year, 5 year and 10 year periods that
would equate the initial amount invested to the ending redeemable value
according to the following formula:

[EQUATION]

Where:

P = a hypothetical initial investment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000 investment made
at the beginning of the 1 year, 5 year and 10 year periods.

In the case of Class A shares or Class B shares, this calculation
assumes the maximum sales charge is included in the initial investment or the
CDSC is applied at the end of the period. This calculation also assumes that
all dividends and distributions are reinvested at net asset value on the
reinvestment dates during the period.

The "distribution rate" is determined by annualizing the result of
dividing the declared dividends of the Fund during the period stated by the
maximum offering price or net asset value at the end of the period.

<PAGE>

A shares or the CDSC on Class B shares into account. Excluding the Fund's sales
charge on Class A shares and the CDSC on Class B shares from a total return
calculation produces a higher total return figure.

From time to time, in reports and promotional literature, the Fund's
total return will be compared to indices of mutual funds such as Lipper
Analytical Services, Inc.'s "Lipper - Mutual Performance Analysis," a monthly
publication which tracks net assets, total return and yield on more than
1,000 equity mutual funds in the United States. Ibottson and Associates, CDA
Weisenberger and F.C. Towers are also used for comparison purposes, as well
as the Russell and Wilshire Indices.

Performance rankings and ratings reported periodically in national
financial publications such as MONEY Magazine, FORBES, BUSINESS WEEK, THE
WALL STREET JOURNAL, MICROPAL, INC., MORNINGSTAR, STANGER'S and BARRON'S may
also be utilized.

<PAGE>

The performance of the Fund is not fixed or guaranteed. Performance
quotations should not be considered to be representations of performance of
the Fund for any period in the future. The performance of the Fund is a
function of many factors including its earnings, expenses and number of
outstanding shares. Fluctuating market conditions; purchases, sales and
maturities of portfolio securities; sales and redemptions of shares of
beneficial interest; and changes in operating expenses are all examples of
items that can increase or decrease the Fund's performance.

BROKERAGE ALLOCATION

Decisions concerning the purchase and sale of portfolio securities and
the allocation of brokerage commissions are made by the Adviser pursuant to
recommendations made by its investment committee, which consists of officers
and directors of the Advisers and affiliates and officers and Trustees who
are interested persons of the Fund. Orders for purchases and sales of
securities are placed in a manner which, in the opinion of the Adviser, will
offer the best price and market for the execution of each such transaction.
Purchases from underwriters of portfolio securities may include a commission
or commission paid by the issuer and transactions with dealers serving as
market makers reflect a "spread." Investments in debt securities are
generally traded on a net basis through dealers acting for their own account
as principals and not as brokers; no brokerage commissions are payable on
such transactions.

The Fund's primary policy is to execute all purchases and sales of
portfolio instruments at the most favorable prices consistent with best
execution, considering all of the costs of the transaction including
brokerage commissions. This policy governs the selection of brokers and
dealers and the market in which a transaction is executed. Consistent with
the foregoing primary policy, the Rules of Fair Practice of the National
Association of Securities Dealers, Inc. and other policies that the Trustees
may determine, the Advisers may consider sales of shares of the Fund as a
factor in the selection of broker-dealers to execute the Fund's portfolio
transactions.

<PAGE>

beneficial to the Fund. The Fund will not make commitments to allocate
portfolio transactions upon any prescribed basis. While the Fund's officers
will be primarily responsible for the allocation of the Fund's brokerage
business, their policies and practices in this regard must be consistent with
the foregoing and will at all times be subject to review by the Trustees.
For the year ended on December 31, 1994, the Fund paid negotiated brokerage
commissions of $24,810.

As permitted by Section 28(e) of the Securities Exchange Act of 1934,
the Fund may pay a broker which provides brokerage and research services to
the Fund an amount of disclosed commission in excess of the commission which
another broker would have charged for effecting that transaction. This
practice is subject to a good faith determination by the Trustees that the
price is reasonable in light of the services provided and to policies the
Trustees may adopt from time to time. During the period ended December 31,
1994, the paid no commissions to compensate brokers for research services
such as industry and company reviews and evaluations of the securities.

The Adviser's indirect parent, the Life Insurance Company, is the
indirect sole shareholder of John Hancock Freedom Securities Corporation and
its subsidiaries, two of which, Tucker Anthony Incorporated, John Hancock
Distributors, and Sutro & Company, Inc., are broker-dealers ("Affiliated
Brokers"). Pursuant to procedures determined by the Trustees and consistent
with the above policy of obtaining best net results, the Fund may execute
portfolio transactions with or through affiliated Brokers. During the period
ended December 31, 1994, the Fund did not execute any portfolio transactions
with affiliated Brokers.

Any of the Affiliated Brokers may act as broker for the Fund on
exchange transactions, subject, however, to the general policy of the Fund
set forth above and the procedures adopted by the Trustees pursuant to the
Investment Company Act. Commissions paid to an Affiliated Broker must be at
least as favorable as those which the Trustees believe to be
contemporaneously charged by other brokers in connection with comparable
transactions involving similar securities being purchased or sold. A
transaction would not be placed with an Affiliated Broker if the Fund would
have to pay a commission rate less favorable than the Affiliated Broker's
contemporaneous charges for comparable transactions for its other most
favored, but unaffiliated, customers except for accounts for which the
Affiliated Broker acts as clearing broker for another brokerage firm, and any
customers of the Affiliated Broker not comparable to the Fund as determined
by a majority of the Trustees who are not "interested persons" (as defined in
the Investment Company Act) of the Fund, the Adviser or the Affiliated
Broker. Because the Adviser, which is affiliated with the Affiliated
Brokers, has, as an investment adviser to the Fund, the obligation to provide
investment management services, which include elements of research and
related investment skills, such research and related skills will not be used
by the Affiliated Broker as a basis for negotiating commissions at a rate
higher than that determined in accordance with the above criteria. The Fund
will not effect principal transactions with Affiliated Brokers.

<PAGE>

TRANSFER AGENT SERVICES

John Hancock Fund Services, Inc., P.O. Box 9116, Boston, MA 02205-9116,
a wholly owned indirect subsidiary of the Life Insurance Company, is the
transfer and dividend paying agent for the Fund. The Fund pays Investor
Services an annual fee for Class A of $16.00 per shareholder account and for
Class B shares of $18.50 plus certain out-of-pocket expenses.

CUSTODY OF PORTFOLIO

Portfolio securities of the Fund are held pursuant to a custodian
agreement between the Fund and Investors Bank & Trust Company, 24 Federal
Street, Boston, Massachusetts 02110. Under the custodian agreement,
Investors Bank & Trust Company performs custody, portfolio and fund
accounting services.

INDEPENDENT AUDITORS

The independent auditors of the Fund are Ernst & Young LLP, 200
Clarendon Street, Boston, Massachusetts 02116. Ernst & Young audits and
renders an opinion of the Fund's annual financial statements and prepares the
Fund's annual Federal income tax return.

y:\corpsec\n1a\sai\specval\4_01-sv.doc

<PAGE>

FINANCIAL STATEMENTS

John Hancock Funds - Special Value 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 DECEMBER 31, 1994. YOU'LL
ALSO FIND THE NET ASSET VALUE AND THE MAXIMUM OFFERING PRICE PER SHARE AS OF
THAT DATE.

STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>

<S> <C>
ASSETS:
Investments at value - Note C:
Common stocks (cost - $6,944,216)................................................ $7,001,322
Joint repurchase agreement (cost - $940,000)..................................... 940,000
Corporate savings account........................................................ 7,382
----------
7,948,704
Receivable for shares sold ........................................................ 27,186
Interest receivable ............................................................... 324
Dividends receivable .............................................................. 11,881
Receivable from John Hancock Advisers, Inc. - Note B .............................. 106,624
Deferred organization expenses - Note A ........................................... 90,495
----------
Total Assets ................................................ 8,185,214
----------------------------------------------------------------------------
LIABILITIES:
Payable for investments purchased ................................................. 237,564
Payable to John Hancock Advisers, Inc. and affiliates - Note B .................... 152,686
Accounts payable and accrued expenses ............................................. 78,897
----------
Total Liabilities ........................................... 469,147
----------------------------------------------------------------------------
NET ASSETS:
Capital paid-in ................................................................... 7,658,961
Net unrealized appreciation of investments......................................... 57,106
----------
Net Assets .................................................. $7,716,067
============================================================================
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 - $4,419,897/491,452 ...................................................... $ 8.99
==================================================================================================
Class B - $3,296,170/366,436 ...................................................... $ 9.00
==================================================================================================
MAXIMUM OFFERING PRICE PER SHARE *
Class A - ($8.99 x 105.26%)........................................................ $ 9.46
==================================================================================================
</TABLE>

* 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.

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
For the period January 3, 1994 (commencement of operations) to December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $1,084) ............................ $ 65,944
Interest .......................................................................... 17,111
--------
83,055
--------
Expenses:
Investment management fee - Note B ................................................ 18,489
Distribution/service fee - Note B
Class A ......................................................................... 5,641
Class B ......................................................................... 7,607
Transfer agent fee - Note B
Class A ......................................................................... 5,641
Class B ......................................................................... 2,434
Custodian fee ..................................................................... 28,600
Registration and filing fees ...................................................... 27,706
Organization expense - Note A ..................................................... 22,376
Printing .......................................................................... 11,375
Auditing fee....................................................................... 7,500
Legal fees......................................................................... 935
Miscellaneous ..................................................................... 205
--------
Total Expenses .............................................. 138,509
Less Expenses Reimbursable by John Hancock Advisers, Inc. -
Note B ...................................................... ( 106,624)
--------------------------------------------------------------------------
Net Expenses................................................. 31,885
--------------------------------------------------------------------------
Net Investment Income ....................................... 51,170
--------------------------------------------------------------------------

UNREALIZED GAIN ON INVESTMENTS:
Change in net unrealized appreciation/depreciation of investments.................. 57,106
--------------------------------------------------------------------------
Net Increase in Net Assets Resulting from Operations......... $108,276
==========================================================================
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE>

FINANCIAL STATEMENTS

John Hancock Funds - Special Value Fund

STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 3, 1994
(COMMENCEMENT OF
OPERATIONS) TO
DECEMBER 31, 1994
-----------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income ................................................................... $ 51,170
Change in net unrealized appreciation/depreciation of investments ........................ 57,106
----------
Net Increase in Net Assets Resulting from Operations ................................. 108,276
----------

DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income
Class A - ($0.1687 per share) .......................................................... ( 49,463)
Class B - ($0.1050 per share) .......................................................... ( 18,717)
----------
Total Distributions to Shareholders .................................................. ( 68,180)
----------

FROM FUND SHARE TRANSACTIONS -- NET* ....................................................... 7,175,971
----------

NET ASSETS:
Initial Investment by John Hancock Advisers, Inc. - Note A ............................... 400,000
Initial Investment by NM Capital Management, Inc. - Note A ............................... 100,000
----------
End of year .............................................................................. $7,716,067
==========
</TABLE>

* ANALYSIS OF FUND SHARE TRANSACTIONS:

FOR THE PERIOD JANUARY 3, 1994
(COMMENCEMENT OF OPERATIONS) TO
DECEMBER 31, 1994
-------------------------------
SHARES AMOUNT
--------- -----------

<S> <C> <C>
CLASS A
Shares sold .................................................................. 478,011 $4,269,587
Shares issued to shareholders in reinvestment of distributions ............... 4,403 39,080
------- ----------
482,414 4,308,667
Less shares repurchased ...................................................... ( 49,786) ( 445,803)
------- ----------
Net increase ................................................................. 432,628 3,862,864
Initial Investment by John Hancock Advisers, Inc. - Note A ................... 47,059 400,000
Initial Investment by NM Capital Management, Inc. - Note A ................... 11,765 100,000
------- ----------
Net increase and shares outstanding end of period ........................... 491,452 $4,362,864
======= ==========

CLASS B
Shares sold .................................................................. 390,508 $3,529,419
Shares issued to shareholders in reinvestment of distributions ............... 1,918 17,065
------- ----------
392,426 3,546,484
Less shares repurchased ...................................................... ( 25,990) ( 233,377)
------- ----------
Net increase and shares outstanding end of period ............................ 366,436 $3,313,107
======= ==========
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE>

FINANCIAL STATEMENTS

John Hancock Funds - Special Value Fund

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:
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD JANUARY 3, 1994
(COMMENCEMENT OF OPERATIONS)
TO DECEMBER 31, 1994
------------------------------
<S> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ........................................ $ 8.50(e)
------
Net Investment Income ....................................................... 0.18(b)
Net Unrealized Gain on Investments .......................................... 0.48
------
Total from Investment Operations .......................................... 0.66
------
Less Distributions:
Dividends from Net Investment Income ........................................ ( 0.17)
------
Net Asset Value, End of Period .............................................. $ 8.99
======
Total Investment Return at Net Asset Value(d) ............................. 7.81%(c)

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ................................... $4,420
Ratio of Net Expenses to Average Net Assets** ............................... 0.99%*
Ratio of Adjusted Expenses to Average Net Assets(a) ......................... 4.98%*
Ratio of Net Investment Income to Average Net Assets......................... 2.10%*
Ratio of Adjusted Net Investment Income to Average Net Assets(a) ............ ( 1.89%)*
Portfolio Turnover Rate ..................................................... 0.3%
** Expense Reimbursement Per Share .......................................... $ 0.34(b)

CLASS B
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ........................................ $ 8.50
-------
Net Investment Income ....................................................... 0.13(b)
Net Unrealized Gain on Investments .......................................... 0.48
-------
Total from Investment Operations .......................................... 0.61
-------
Less Distributions:
Dividends from Net Investment Income ........................................ ( 0.11)
-------
Net Asset Value, End of Period .............................................. $ 9.00
=======
Total Investment Return at Net Asset Value(d) ............................. 7.15%(c)

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ................................... $3,296
Ratio of Net Expenses to Average Net Assets** ............................... 1.72%*
Ratio of Adjusted Expenses to Average Net Assets(a) ......................... 5.71%*
Ratio of Net Investment Income to Average Net Assets ........................ 1.53%*
Ratio of Adjusted Net Investment Income to Average Net Assets(a)............. ( 2.46%)*
Portfolio Turnover Rate...................................................... 0.3%
** Expense Reimbursement Per Share .......................................... $ 0.34(b)
</TABLE>

* On an annualized basis.
(a) On an unreimbursed basis.
(b) On average month end shares outstanding.
(c) Not annualized.
(d) Without the reimbursement, total investment return would have been lower.
(e) Initial price to commence operations.

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE>

FINANCIAL STATEMENTS

John Hancock Funds - Special Value Fund

THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY
SPECIAL VALUE FUND ON DECEMBER 31, 1994. IT'S DIVIDED INTO TWO MAIN CATEGORIES:
COMMON STOCKS AND SHORT-TERM INVESTMENTS. THE COMMON STOCKS ARE FURTHER BROKEN
DOWN BY INDUSTRY GROUPS. SHORT-TERM INVESTMENTS, WHICH REPRESENT THE FUND'S
"CASH" POSITION, ARE LISTED LAST.

SCHEDULE OF INVESTMENTS
December 31, 1994
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- ------
<S> <C> <C>
COMMON STOCKS
AIRCRAFT (12.99%)
AAR Corp. ................................................................. 25,400 $ 339,725
Boeing Co. (The) .......................................................... 6,800 317,900
Precision Castparts Corp. ................................................. 1,200 24,300
Thiokol Corp. ............................................................. 11,500 320,562
---------
1,002,487
---------
BEVERAGES (4.72%)
Coors (Adolph) Co. ........................................................ 21,600 364,500
---------
CHEMICALS (2.86%)
LeaRonal, Inc. ............................................................ 12,000 220,500
---------
DIVERSIFIED OPERATIONS (4.78%)
Hanson PLC, American Depositary Receipts .................................. 20,500 369,000
---------
ELECTRONIC INSTRUMENTS (2.08%)
Dynatech Corp.* .......................................................... 4,900 160,475
---------
FOODS (9.59%)
Archer-Daniels-Midland Co. ................................................ 6,615 136,434
Dole Food Co. ............................................................. 15,600 358,800
Rykoff-Sexton, Inc.* ..................................................... 12,000 244,500
---------
739,734
---------
INSURANCE (1.39%)
Alexander & Alexander Services Inc. ....................................... 5,800 107,300
---------
LEISURE & RECREATION (8.37%)
Outboard Marine Corp. ..................................................... 15,400 302,225
Russ Berrie & Co. Inc. .................................................... 25,000 343,750
---------
645,975
---------
MACHINERY (5.65%)
Harnischfeger Industries, Inc. ............................................ 5,700 160,313
Twin Disc, Inc. ........................................................... 15,200 275,500
---------
435,813
---------
OFFICE EQUIPMENT & SUPPLIES (4.31%)
Cross (A.T.) Co. .......................................................... 24,400 332,450
---------
OIL & GAS (6.74%)
Daniel Industries ......................................................... 24,900 329,925
Parker Drilling Co.* ...................................................... 40,000 190,000
---------
519,925
---------
PAPER (13.36%)
Gibson Greetings, Inc. .................................................... 24,600 362,850
Glatfelter (P.H.) Co. ..................................................... 19,200 297,600
James River Corp. of Virginia ............................................. 18,300 370,575
---------
1,031,025
---------
POLLUTION CONTROL (3.72%)
Calgon Carbon Corp. ....................................................... 27,700 287,388
---------
RETAIL (1.64%)
Mercantile Stores Co., Inc. ............................................... 3,200 126,400
---------
SHOES (2.20%)
Brown Group, Inc. ......................................................... 5,300 169,600
---------
TEXTILE (4.54%)
Delta Woodside Industries, Inc. ........................................... 30,500 350,750
---------
TRANSPORTATION - SHIP (1.79%)
Overseas Shipholding Group, Inc. .......................................... 6,000 138,000
---------
TOTAL COMMON STOCKS
(Cost $6,944,216) ( 90.73%) 7,001,322
------- ---------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE>

FINANCIAL STATEMENTS

John Hancock Funds - Special Value Fund
<TABLE>
<CAPTION>

INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000'S OMITTED) VALUE
- ------------------- -------- --------------- ------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
JOINT REPURCHASE AGREEMENT (12.18%)
Investment in a joint repurchas agreement
transaction with Lehman Brothers -
Dated 12-30-94, Due 01-03-95 (secured by
U.S. Treasury Bonds, 9.25% Due 02-15-16 and
8.125% Due 08-15-21, and by U.S. Treasury Notes,
5.500% Due 02-15-95 and 4.625% Due 08-15-95) Note A ........................ 5.85% 940 $ 940,000
----------
CORPORATE SAVINGS ACCOUNT (0.10%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 3.00% ......................................................... 7,382
----------
TOTAL SHORT-TERM INVESTMENTS ( 12.28%) 947,382
------- ----------
TOTAL INVESTMENTS (103.01%) $7,948,704
======= ==========
</TABLE>
* Non-income producing security

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.

<PAGE>

NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Special Value Fund

NOTE A --
ACCOUNTING POLICIES

John Hancock Capital Series (the "Trust") is an open-end management investment
company, registered under the Investment Company Act of 1940. The Trust consists
of two series portfolios: John Hancock Special Value Fund (the "Fund") and John
Hancock Growth Fund.

The Trustees have authorized the issuance of multiple classes of the Fund,
designated as Class A, Class B and Class C. The shares of each class represent
an interest in the same portfolio of investments of the Fund and have equal
rights to voting, redemption, 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/service expenses under the terms of a
distribution plan, have exclusive voting rights regarding such distribution
plan. No Class C shares of the Fund were issued and outstanding during the
period ended December 31, 1994. 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.

JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other registered
investment companies having a management contract with John Hancock Advisers,
Inc. (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial Group,
may participate in a joint repurchase agreement transaction. Aggregate cash
balances are invested in one or more repurchase agreements, whose underlying
securities are obligations of the U.S. government and/or its agencies. The
Fund's custodian bank receives delivery of the underlying securities for the
joint account on the Fund's behalf. The Adviser is responsible for ensuring that
the agreement is fully collateralized at all times.

INVESTMENT TRANSACTIONS Investment transactions are recorded as of the date of
purchase, sale or maturity. Net realized gains and losses on sales of
investments are determined on the identified cost basis.

FEDERAL INCOME TAXES The Fund's policy is to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies. It
will not be subject to Federal income tax on taxable earnings which are
distributed to shareholders.

DIVIDENDS, 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 as explained previously.

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.

CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains
(losses) are determined at the Fund level and allocated daily to each class of
shares based on the appropriate net assets of the respective classes. Transfer
agent expenses and distribution/service fees, if any, are calculated daily at
the class level based on the appropriate

<PAGE>

NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Special Value Fund

net assets of each class and the specific expense rate(s) applicable to each
class.

FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS The Fund may enter into forward
foreign currency exchange contracts as a hedge against the effect of
fluctuations in currency exchange rates. A forward foreign currency exchange
contract involves an obligation to purchase or sell a specific currency at a
future date at a set price. The aggregate principal amounts of the contracts are
marked-to-market daily at the applicable foreign currency exchange rates. Any
resulting unrealized gains and losses are included in the determination of the
Fund's daily net assets. The Fund records realized gains and losses at the time
the forward foreign currency contract is closed out or offset by a matching
contract. Risks may arise upon entering these contracts from potential inability
of counterparties to meet the terms of the contract and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.

There were no open foreign currency forward contracts at December 31, 1994.

FOREIGN CURRENCY TRANSLATION All assets or 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 and losses arise from changes in the
value of assets and liabilities other than investments in securities, resulting
from changes in the exchange rate.

OPTIONS Listed options are valued at the last quoted sales price on the exchange
on which they are primarily traded. Over-the-counter options are valued at the
mean between the last bid and asked prices. Upon the writing of a call or put
option, an amount equal to the premium received by the Fund is included in the
Statement of Assets and Liabilities as an asset and corresponding liability. The
amount of the liability is subsequently marked-to-market to reflect the current
market value of the written option.

There were no written option transactions for the period ended December 31,
1994.

FINANCIAL FUTURES CONTRACTS The Fund may buy and sell financial futures
contracts for speculative purposes and/or to hedge against the effects of
fluctuations in interest rates, currency exchange rates and other market
conditions. At the time the Fund enters into a financial futures contract, it is
required to deposit with its custodian a specified amount of cash or U.S.
government securities, known as "initial margin", equal to a certain percentage
of the value of the financial futures contract being traded. Each day, the
futures contract is valued at the official settlement price of the board of
trade or U.S. commodities exchange. Subsequent payments, known as "variation
margin", to and from the broker are made on a daily basis as the market price of
the financial futures contract fluctuates. Daily variation margin adjustments,
arising from this "mark to market", are recorded by the Fund as unrealized gains
or losses.

When the contracts are closed, the Fund recognizes a gain or loss. Risks of
entering into futures contracts include the possibility that there may be an
illiquid market and/or that a change in the value of the contracts may not
correlate with changes in the value of the underlying securities.

<PAGE>

NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Special Value Fund

For Federal income tax purposes, the amount, character and timing of the
Fund's gains and/or losses can be affected as a result of futures contracts.

At December 31, 1994, there were no open positions in financial futures
contracts.

ORGANIZATION EXPENSE Expenses incurred in connection with the organization of
the Fund have been capitalized and are being charged to the Fund's operations
ratably over a five-year period that began with the commencement of investment
operations of the Fund.

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 0.70% of the Fund's average daily net asset
value. Pursuant to a subadvisory agreement between the Adviser and an affiliated
company of the Adviser, NM Capital Management, Inc. (the "Sub-Adviser"), the
Adviser pays the Sub-Adviser 40% of the fee received by the Adviser for managing
the Fund. The Fund is not responsible for the sub-advisory fee.

In the event normal operating expenses of the Fund, exclusive of certain
expenses prescribed by state law, are in excess of the most restrictive state
limit where the Fund is registered to sell shares of beneficial interest, the
fee payable to the Adviser will be reduced to the extent of such excess, and the
Adviser will make additional arrangements necessary to eliminate any remaining
excess expenses. The current limits are 2.5% of the first $30,000,000 of the
Fund's average daily net asset value, 2.0% of the next $70,000,000 and 1.5% of
the remaining average daily net asset value.

The Adviser has voluntarily agreed to limit Fund expenses, including the
management fee (but not including the transfer agent fee and the 12b-1 fee), to
0.40% of the Fund's average daily net assets. Accordingly, the entire Adviser's
fee amounting to $18,489 has been waived and the Adviser has reimbursed the Fund
for the remaining excess expenses of $88,135. The Adviser reserves the right to
terminate this voluntary limitation in the future.

The Fund has a distribution agreement with John Hancock Funds, Inc. ("JH
Funds"), a wholly-owned subsidiary of the Adviser. Prior to January 1, 1995, JH
Funds was known as John Hancock Broker Distribution Services, Inc. For the
period ended December 31, 1994, JH Funds received net sales charges of $68,494
with regard to sales of Class A shares. Out of this amount, $10,855 was retained
and used for printing prospectuses, advertising, sales literature and other
purposes, $27,444 was paid as sales commissions to unrelated broker-dealers and
$30,195 was paid as sales commissions to sales personnel of John Hancock
Distributors, Inc. ("Distributors"), Tucker Anthony, Incorporated ("Tucker
Anthony") and Sutro & Co., Inc. ("Sutro"). The Adviser's indirect parent, John
Hancock Mutual Life Insurance Company, is the indirect sole shareholder of
Distributors and John Hancock Freedom Securities Corporation and its
subsidiaries, which include Tucker Anthony and Sutro, all of which are
broker-dealers.

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 December 31,
1994, contingent deferred sales charges received by JH Funds amounted to
$17,021.

<PAGE>

NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Special Value Fund

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 Investor Services
Corporation, ("Investor Services"), a wholly-owned subsidiary of The Berkeley
Financial Group. Prior to January 1, 1995, Investor Services was known as John
Hancock Fund Services, Inc. The Fund pays Investor Services a monthly transfer
agent fee equivalent, on an annual basis, to 0.30% and 0.32% of the average
daily net asset value of Class A and Class B shares of the Fund, respectively,
plus out of pocket expenses incurred by Investor Services on behalf of the Fund
for proxy mailings. Effective January 1, 1995, Class A and Class B shares will
pay transfer agent fees based on transaction volume and the number of
shareholder accounts.

Messrs. Edward J. Boudreau, Jr., Francis C. Cleary, Jr. (until December 14,
1994), and Richard S. Scipione are directors and/or officers of the Adviser,
and/or its affiliates as well as Trustees of the Fund. The compensation of
unaffiliated Trustees is borne by the Fund. The Adviser and NM Capital
Management, Inc. own 47,062 and 11,765 Class A shares of beneficial interest of
the Fund, respectively.

NOTE C --
INVESTMENT TRANSACTIONS

Purchases and proceeds from sales of securities, other than obligation of the
U.S. government and its agencies and short-term securities, during the period
ended December 31, 1994 aggregated $6,952,091 and $7,875, respectively. There
were no purchases or sales of obligations of the U.S. government and its
agencies during the period ended December 31, 1994.

The cost of investments owned at December 31, 1994 for Federal income tax
purposes was $7,884,216. Gross unrealized appreciation and depreciation of
investments aggregated $305,969, and $248,863, respectively, resulting in net
unrealized appreciation of $57,106.

NOTE D --
RECLASSIFICATION OF CAPITAL ACCOUNTS

During the year ended December 31, 1994, the Fund has reclassified $17,010 from
capital paid-in to net investment income. This represents the cumulative amount
necessary to report these balances on a tax basis as of December 31, 1994.
Additional adjustments may be needed in subsequent reporting periods. These
reclassifications, which have no impact on the net asset value of the Fund, are
primarily attributable to certain differences in the computation of
distributable income and capital gains under federal tax rules versus generally
accepted accounting principles.

<PAGE>

REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

To the Trustees and Shareholders of
John Hancock Special Value Fund

We have audited the accompanying statement of assets and liabilities of John
Hancock Special Value Fund (the "Fund"), one of the portfolios constituting John
Hancock Capital Series, including the schedule of investments, as of December
31, 1994, and the related statements of operations, changes in net assets and
financial highlights for the period from January 3, 1994 (commencement of
investment operations) to December 31, 1994. These financial statements and the
financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1994, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for our
opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
John Hancock Special Value Fund portfolio of John Hancock Capital Series at
December 31, 1994, the results of its operations, the changes in its net assets,
and financial highlights for the period from January 3, 1994 to December 31,
1994, in conformity with generally accepted accounting principles.

[SIGNATURE]
/s/ Ernst & Young LLP

Boston, Massachusetts
February 13, 1995

TAX INFORMATION NOTICE (UNAUDITED)

For Federal Income Tax purposes, the following information is furnished with
respect to the distributions of the Fund for its fiscal year ended December 31,
1994.

United States Government Obligations: None of the 1994 income earned by the
Fund was derived from obligations of the U.S. government or its agencies. The
Fund did not have any assets invested in U.S. Treasury bond, bills, notes or
other U.S. Government agencies at year end.

With respect to the Fund's ordinary taxable income for the fiscal year
ended December 31, 1994, 85.28% of the dividends qualify for the corporate
dividends received deduction.

For specific information on exemption provisions in your state, consult
your local state tax office or your tax adviser.

16
<PAGE>

JOHN HANCOCK GROWTH FUND
Class A and Class B Shares
Statement of Additional Information

May 1, 1995

This Statement of Additional Information provides information about John
Hancock Growth Fund (the "Fund") in addition to the information that is
contained in the Fund's Class A and Class B Shares Prospectus, dated May 1,
1995 (the "Prospectus").

This Statement of Additional Information is not a prospectus. It should be
read in conjunction with the Prospectuses, copies of which can be obtained
free of charge by writing or telephoning:

John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
1-800-225-5291

TABLE OF CONTENTS

Statement of
Additional
Information Page
Organization of the Fund 2
Investment Objective and Policies 2
Investment Restrictions 4
Those Responsible for Management 7
Investment Advisory and
Other Services 13
Distribution Contract 15
Net Asset Value 17
Initial Sales Charge On Class A
Shares 18
Deferred Sales Charge On Class B
Shares 19
Special Redemptions 20
Additional Services and Programs 20
Description of the Fund's Shares 21
Tax Status 23
Calculation of Performance 25
Brokerage Allocation 27
Transfer Agent Services 28
Custody of Portfolio 29
Independent Auditors 29
Appendix 30
Financial Statements 32
<PAGE>
ORGANIZATION OF THE FUND

John Hancock Growth Fund (the "Fund") is organized as a separate, diversified
series of John Hancock Capital Series (the "Trust"), an open-end management
investment company organized as a Massachusetts business trust under the laws
of The Commonwealth of Massachusetts. The Trust was organized in 1984 by
John Hancock Advisers, Inc. (the "Adviser") as the successor to John Hancock
Growth Fund, Inc., a Delaware corporation organized in 1968 by the John
Hancock Mutual Life Insurance Company (the "Life Insurance Company"), a
Massachusetts life insurance company chartered in 1862 with national
headquarters at John Hancock Place, Boston, Massachusetts. The Adviser is an
indirect wholly-owned subsidiary of the Life Insurance Company. Prior to
October 1, 1993, the Trust was known as "John Hancock Growth Fund."

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Fund is to achieve long-term appreciation of
capital. The types of securities the Fund invests in are more fully
described in the Prospectuses.

Purchases and sales of securities will be made whenever necessary in
management's view to achieve the objectives of the Fund. Management believes
that unsettled market and economic conditions during certain periods require
greater portfolio turnover in pursuing the Fund's objective than would
otherwise be the case.

Repurchase Agreements. A repurchase agreement is a contract under which the
Fund would acquire a security for a relatively short period (usually not more
than seven days) subject to the obligation of the seller to repurchase and
the Fund to resell such security at a fixed time and price (representing the
Fund's cost plus interest). The Fund will enter into repurchase agreements
only with member banks of the Federal Reserve System and with "primary
dealers" in U.S. Government securities. The Adviser will continuously
monitor the creditworthiness of the parties with whom the Fund enters into
repurchase agreements.

The Fund has established a procedure providing that the securities serving as
collateral for each repurchase agreement must be delivered to the Fund's
custodian either physically or in book-entry form and that the collateral
must be marked to market daily to ensure that each repurchase agreement is
fully collateralized at all times. In the event of bankruptcy or other
default by a seller of a repurchase agreement, the Fund could experience
delays in liquidating the underlying securities and could experience losses,
including the possible decline in the value of the underlying securities
during the period while the Fund seeks to enforce its rights thereto,
possible subnormal levels of income and lack of access to income during this
period, and the expense of enforcing its rights.

<PAGE>
Restricted Securities. The Fund may invest in restricted securities,
including those eligible for resale to certain institutional investors
pursuant to Rule 144A under the Securities Act of 1933 and foreign securities
acquired in accordance with Regulation S under the Securities Act of 1933.
The Fund will not invest more than 15% of its net assets in illiquid
investments, which includes repurchase agreements maturing in more than seven
days, OTC options, securities that are not readily marketable and restricted
securities. However, if the Board of Trustees determines, based upon a
continuing review of the trading markets for specific Rule 144A securities,
that they are liquid then such securities may be purchased without regard to
the 15% limit. The Board of Trustees may adopt guidelines and delegate to
the Adviser the daily function of determining and monitoring the liquidity of
restricted securities. The Board, however, will retain sufficient oversight
and be ultimately responsible for the determinations. The Board will
carefully monitor the Fund's investments in these securities, focusing on
such important factors, among others, as valuation, liquidity and
availability of information. This investment practice could have the effect
of increasing the level of illiquidity in the Fund to the extent that
qualified institutional buyers become for a time uninterested in purchasing
these restricted securities.

Lower Rated Bonds. The Fund may invest in debt securities rated as low as C
by Moody's Investors Service, Inc. ("Moody's") or Standard & Poor's Ratings
Group ("S&P") and unrated securities deemed of equivalent quality by the
Adviser. These securities are speculative to a high degree and often have
very poor prospects of attaining real investment standing. Lower rated
securities are generally referred to as junk bonds. No more than 5% of the
Fund's net assets, however, will be invested in securities rated lower than
BBB by S&P or Baa by Moody's. In addition, no more than 5% of the Fund's net
assets may be invested in securities rated BBB or Baa and unrated securities
deemed of equivalent quality. See the Appendix attached to this Statement of
Additional Information which describes the characteristics of the securities
in the various ratings categories. The Fund may invest in comparable quality
unrated securities which, in the opinion of the Adviser, offer comparable
yields and risks to those securities which are rated.

Debt obligations rated in the lower ratings categories, or which are unrated,
involve greater volatility of price and risk of loss of principal and
income. In addition, lower ratings reflect a greater possibility of an
adverse change in financial condition affecting the ability of the issuer to
make payments of interest and principal. The high yield fixed income market
is relatively new and its growth occurred during a period of economic
expansion. The market has not yet been fully tested by an economic recession.

The market price and liquidity of lower rated fixed income securities
generally respond to short term corporate and market developments to a
greater extent than do the price and liquidity of higher rated securities
because such developments are perceived to have a more direct relationship to
the ability of an issuer of such lower rated securities to meet its ongoing
debt obligations. The market prices of zero coupon bonds are affected to a
greater extent by interest rate changes, and thereby tend to be more volatile
than securities which pay interest periodically. Increasing rate note
securities are typically refinanced by the issuers within a short period of
time.

<PAGE>
Reduced volume and liquidity in the high yield bond market or the reduced
availability of market quotations will make it more difficult to dispose of
the bonds and to value accurately the Fund's assets. The reduced
availability of reliable, objective data may increase the Fund's reliance on
management's judgment in valuing high yield bonds. In addition, the Fund's
investments in high yield securities may be susceptible to adverse publicity
and investor perceptions, whether or not justified by fundamental factors.
The Fund's investments, and consequently its net asset value, will be subject
to the market fluctuations and risks inherent in all securities.

INVESTMENT RESTRICTIONS

Fundamental Investment Restrictions

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

The Fund observes the following fundamental investment restrictions.

The Fund may not:

(1) Purchase or sell real estate or any interest therein, except that the
Fund may invest in securities of corporate entities secured by real estate or
marketable interests therein or issued by companies that invest in real
estate or interests therein.

(2) Make loans, except that the Fund (1) may lend portfolio securities in
accordance with the Fund's investment policies up to 33 1/3% of the Funds
total assets taken at market value, (2) enter into repurchase agreements, and
(3) purchase all or a portion of securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities, bank loan participation
interests, bank certificates of deposit, bankers' acceptances, debentures or
other securities, whether or not the purchase is made upon the original
issuance of the securities.

(3) Invest in commodities or in commodity contracts or in puts, calls, or
combinations of both except options on securities, securities indices,
currency and other financial instruments, futures contracts on securities,
securities indices, currency and other financial instruments, options on such
futures contracts, forward commitments, forward foreign currency exchange
contracts, interest rate or currency swaps, securities index put or call
warrants and repurchase agreements entered into in accordance with the Fund's
investment policies.

(4) Purchase securities of an issuer (other than the U.S. Government, its
agencies or instrumentalities), if (i) such purchase would cause more than 5%
of the Fund's total assets taken at market value to be invested in the
securities of such issuer, or (ii) such purchase would at the time result in
more than 10% of the outstanding voting securities of such issuer being held
by the Fund.

<PAGE>
(5) Act as an underwriter, except to the extent that, in connection with
the disposition of portfolio securities, the Fund may be deemed to be an
underwriter for purposes of the Securities Act of 1933.

(6) Borrow money, except from banks as a temporary measure for
extraordinary emergency purposes in amounts not to exceed 33-1/3% of the
Fund's total assets (including the amount borrowed) taken at market value.
The Fund will not use leverage to attempt to increase income. The Fund will
not purchase securities while outstanding borrowings exceed 5% of the Fund's
total assets.

(7) Pledge, mortgage or hypothecate its assets, except to secure
indebtedness permitted by paragraph (6) above and then only if such pledging,
mortgaging or hypothecating does not exceed 33 1/3% of the Fund's total
assets taken at market value.

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

(9) Issue senior securities, except as permitted by paragraphs (2), (3) and
(6) above. For purposes of this restriction, the issuance of shares of
beneficial interest in multiple classes or series, the purchase or sale of
options, futures contracts and options on futures contracts, forward
commitments, forward foreign currency exchange contracts and repurchase
agreements entered into in accordance with the Fund's investment policy, and
the pledge, mortgage or hypothecation of the Fund's assets within the meaning
of paragraph (7) above are not deemed to be senior securities.

In connection with the lending of portfolio securities under item (2) above,
such loans must at all times be fully collateralized by cash or securities of
the U.S. Government or its agencies or instrumentalities, and the Fund's
custodian must take possession of the collateral either physically or in book
entry form. Any cash collateral will consist of short-term high quality debt
instruments. Securities used as collateral must be marked to market daily.

Nonfundamental Investment Restrictions

The following restrictions are designated as nonfundamental and may be
changed by the Trustees without shareholder approval.

The Fund may not:

(a) purchase securities on margin or make short sales, except in connection
with arbitrage transactions, or unless by virtue of its ownership of other
securities, the Fund has the right to obtain securities equivalent in kind
and amount to the securities sold and, if the right is conditional, the sale
is made upon the same conditions, except that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases and
sales of securities.
<PAGE>
(b) purchase securities of any company with a record of less than three
years' continuous operation, if such purchase would cause the Fund's
investment in such company taken at cost to exceed 5% of the Fund's total
assets taken at market value.

(d) purchase a security if, as a result, (i) more than 10% of the Fund's
total assets would be invested in securities of other investment companies,
(ii) such purchase would result in more than 3% of the total outstanding
voting securities of any one such investment company being held by the Fund,
or (iii) more than 5% of the Fund's total assets would be invested in any
securities of any one such investment company. The Fund may not invest in
the securities of any other open-end investment company.

(e) knowingly purchase or retain securities of an issuer if one or more of
the Trustees or officers of the Trust or directors or officers of the Adviser
or any investment management subsidiary of the Adviser individually owns
beneficially more than 0.5%, and together own beneficially more than 5%, of
the securities of such issuer.

(f) invest in interests in oil, gas or other mineral leases or exploration
or development programs, provided that this restriction shall not prohibit
the acquisition of securities of companies engaged in the production or
transmission of oil, gas or other minerals.

(g) purchase warrants if as a result (i) more than 5% of the Fund's net
assets, valued at the lower of cost or market value, would be invested in
warrants or (ii) more than 2% of its net assets would be invested in
warrants, valued as aforesaid, which are not traded on the New York Stock
Exchange or American Stock Exchange, provided that for these purposes,
warrants acquired in units or attached to securities will be deemed to be
without value.

(h) purchase any security, including any repurchase agreement maturing in
more than seven days, which is not readily marketable, if more than 15% of
the net assets of the Fund, taken at market value, would be invested in such
securities. (The staff of the Securities and Exchange Commission may
consider over-the-counter options to be illiquid securities subject to the
15% limit).

(i) purchase interests in real estate limited partnerships.

(j) Notwithstanding any investment restriction to the contrary, the Fund
may, in connection with the John Hancock Group of Funds Deferred Compensation
Plan for Independent Trustees/Directors, purchase securities of other
investment companies within the John Hancock Group of Funds provided that, as
a result, (i) no more than 10% of the Fund's assets would be invested in
securities of all other investment companies, (ii) such purchase would not
result in more than 3% of the total outstanding voting securities of any one
such investment company being held by the Fund and (iii) no more than 5% of
the Fund's assets would be invested in any one such investment company.

<PAGE>

In order to permit the sale of shares of the Fund in certain states, the
Trustees may, in their sole discretion, adopt restrictions or investment
policies more restrictive than those described above. Should the Trustees
determine that any such more restrictive policy is no longer in the best
interests of the Fund and its shareholders, the Fund may cease offering
shares in the state involved and the Trustees may revoke such restrictive
policy. Moreover, if the states involved shall no longer require any such
restrictive policy, the Trustees may, at their sole discretion, revoke such
policy.

If a percentage restriction on investment or utilization of assets as set
forth above is adhered to at the time an investment is made, a later change
in percentage resulting from changes in the values of the Fund's assets will
not be considered a violation of the restriction.

THOSE RESPONSIBLE FOR MANAGEMENT

The business of the Fund is managed by the Trustees of the Trust, who elect
officers who are responsible for the day-to-day operations of the Fund and
who execute policies formulated by the Trustees. Several of the officers and
Trustees of the Trust are also officers and directors of the Adviser or
officers and directors of the Fund's principal distributor, John Hancock
Funds, Inc. ("John Hancock Funds").

<PAGE>

The following table sets forth the principal occupation or employment of the
Trustees and principal officers of the Fund during the past five years:

<PAGE>

Positions Held Principal Occupation(s)
Name and Address With The Fund During the Past Five Years

- --------------
*An "interested person" of the Fund, as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act:).

(1) A Member of the Executive Committee.
(2) A Member of Investment Committee of the Adviser.
(3) An Alternate Member of the Executive Committee.
(4) A Member of the Audit and Administration Committees.

<PAGE>
Positions Held Principal Occupation(s)
Name and Address With The Fund During the Past Five Years

Richard P. Chapman, Jr. Trustee (4) President, Brookline Savings
160 Washington Street Bank.
Brookline, Massachusetts

Gail D. Fosler Trustee (4) Vice President and Chief
4104 Woodbine Street Economist, The Conference Board
Chevy Chase, MD (non-profit economic and
business research).

- -------------------
An "interested person" of the Fund, as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
(1) A Member of the Executive Committee.
(2) A Member of Investment Committee of the Adviser.
(3) An Alternate Member of the Executive Committee.
(4) A Member of the Audit and Administration Committees.

<PAGE>
Positions Held Principal Occupation(s)
Name and Address With The Fund During the Past Five Years

Edward J. Spellman Trustee (4) Partner, KPMG Peat Marwick
259C Commercial Bld. (retired June 1990).
Suite 200
Lauderdale by the Sea, FL

*Anne C. Hodsdon President (2) President and Chief Operations
101 Huntington Avenue Officer, the Adviser;
Boston, Massachusetts Executive Vice President, the
Adviser (until December 1994).

*Thomas H. Drohan Senior Vice Senior Vice President and
101 Huntington Avenue President and Secretary, the Adviser.
Boston, Massachusetts Secretary

*James K. Ho Senior Vice Senior Vice President, the
101 Huntington Avenue President (2) Adviser.
Boston, Massachusetts

- ------------------
An "interested person" of the Fund, as such term is defined in the
Investment Company Act.
(1) A Member of the Executive Committee.
(2) A Member of Investment Committee of the Adviser.
(3) An Alternate Member of the Executive Committee.
(4) A Member of the Audit and Administration Committees.

<PAGE>
Positions Held Principal Occupation(s)
Name and Address With The Fund During the Past Five Years

*James B. Little Senior Vice Senior Vice President the
101 Huntington Avenue President and Chief Adviser.
Boston, Massachusetts Financial Officer (2)

*Michael P. DiCarlo Senior Vice Senior Vice President, the
101 Huntington Avenue President (2) Adviser.
Boston, Massachusetts

*John A. Morin Vice President Vice President, the Adviser.
101 Huntington Avenue
Boston, Massachusetts

*Susan S. Newton Vice President, Vice President and Assistant
101 Huntington Avenue Assistant Secretary Secretary, the Adviser.
Boston, Massachusetts and Compliance
Officer

*James J. Stokowski Vice President and Vice President, the Adviser.
101 Huntington Avenue Treasurer
Boston, Massachusetts

All of the officers listed are officers or employees of the Adviser or the
Affiliated Companies. Some of the directors and officers may also be
officers and/or directors or trustees of one or more of the other funds for
which the Adviser serves as investment adviser.

<PAGE>

The following table provides information regarding the compensation paid by
the Fund and the other investment companies in the John Hancock Fund Complex
to the Independent Trustees for their services for each Fund's fiscal year.
The two non-Independent Trustees, Messrs. Boudreau and Scipione, and each of
the officers of the Funds are interested persons of the Adviser, are
compensated by the Adviser and receive no compensation from the Fund for
their services.

Total
Pensions or Compensation
Retirement From the Fund
Benefits and John
Aggregate Accrued as Estimated Hancock Fund
Compensation Part of the Annual Complex to
Independent Trustees From the Fund Fund's Benefits Upon Trustees (1)
Expenses Retirement (Total of 18
Funds)

Dennis S. Aronowitz $ 2,430 - - $ 60,950
Richard P. Chapman, $ 2,511 - - $ 62,950
Jr.
William J. Cosgrove $ 2,430 - - $ 60,950
Gail D. Fosler $ 2,430 - - $ 62,950
Bayard Henry $ 2,511 - - $ 60,950
Edward J. Spellman $ 2,430 - - $ 60,950
-------- ------
$14,742 $369,700

(1)The total compensation paid by the John Hancock Fund Complex to the
Independent Trustees is as of the calendar year ended December 31, 1994.

The nominees of the Funds may at times be the record holders of in excess of
5% of shares of any one or more Funds by virtue of holding shares in "street
name." As of April 11, 1995 the officers and trustees of the Trusts as a
group owned less than 1% of the outstanding shares of each class of each of
the Funds.

As of April 11, 1995 the following shareholders beneficially owned 5% of or
more of the outstanding shares of the Funds listed below:

Number of Percentage of
Fund and Class shares of total
Name and Address of of Shares beneficial outstanding
Shareholder interest owned shares of the
class of the
Fund

Donaldson Lufkin Jernette Class B Shares 14,799 5.63%
Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303-2052

<PAGE>
INVESTMENT ADVISORY AND OTHER SERVICES

As described in the Prospectuses, the Fund receives its investment advice
from the Adviser. Investors should refer to the Prospectuses for a
description of certain information concerning the investment management
contract. Each of the Trustees and principal officers of the Trust who is
also an affiliated person of the Adviser is named above, together with the
capacity in which such person is affiliated with the Trust and the Adviser.

As described in the Prospectuses under the caption "Organization and
Management of the Fund," the Fund has entered into an investment management
contract with the Adviser. Under the investment management contract, the
Adviser provides the Fund with (i) a continuous investment program,
consistent with the Fund's stated investment objective and policies, (ii)
supervision of all aspects of the Fund's operations except those that are
delegated to a custodian, transfer agent or other agent and (iii) such
executive, administrative and clerical personnel, officers and equipment as
are necessary for the conduct of its business. The Adviser is responsible
for the management of the Fund's portfolio assets.

Securities held by the Fund may also be held by other funds or investment
advisory clients for which the Adviser or its affiliates provide investment
advice. Because of different investment objectives or other factors, a
particular security may be bought for one or more funds or clients when one
or more other funds or clients are selling the same security. If
opportunities for purchase or sale of securities by the Adviser for the Fund
or for other funds or clients for which the Adviser renders investment advice
arise for consideration at or about the same time, transactions in such
securities will be made, insofar as feasible, for the respective funds or
clients in a manner deemed equitable to all of them. To the extent that
transactions on behalf of more than one client of the Adviser or its
affiliates may increase the demand for securities being purchased or the
supply of securities being sold, there may be an adverse effect on price.

No person other than the Adviser and its directors and employees regularly
furnishes advice to the Fund with respect to the desirability of the Fund's
investing in, purchasing or selling securities. The Adviser may from time to
time receive statistical or other similar factual information, and
information regarding general economic factors and trends, from the Life
Insurance Company and its affiliates.

Under the terms of the investment management contract with the Fund, the
Adviser provides the Fund with office space, supplies and other facilities
required for the business of the Fund. The Adviser pays the compensation of
all other officers and employees of the Trust, and pays the expenses of
clerical services relating to the administration of the Fund.

<PAGE>
All expenses which are not specifically paid by the Adviser and which are
incurred in the operation of the Fund (including fees of Trustees of the
Trust who are not "interested persons," as such term is defined in the
Investment Company Act, but excluding certain distribution related activities
required to be paid by the Adviser or John Hancock Funds) and the continuous
public offering of the shares of the Fund are borne by the Fund. Class
expenses properly allocable to Class A and Class B shares will be borne
exclusively by such class of shares, subject to conditions set forth in a
private letter ruling that the Fund has received from the Internal Revenue
Service relating to its multiple-class structure.

As discussed in the Prospectuses and as provided by the investment management
contract, the Fund pays the Adviser monthly an investment management fee,
which is accrued daily, based on a stated percentage of the average of the
daily net assets of the Fund as follows:

Net Asset Value Annual Rate

First $250, 000, 0000 0.80%
Next $250,000,000 0.75%
Amount over $500,000,000 0.70%

On December 31, 1994, the net assets of the Fund were $151,847,464 For the
years ended December 31, 1992, 1993 and 1994, the Adviser received fees of
$704,071, $784,618, and $1,231,294 respectively. These advisory fee figures
reflect the different advisory fee schedule that was in effect before
January 1, 1994.

From time to time, the Adviser may reduce its fee or make other arrangements
to limit the Fund's expenses to a specified percentage of average daily net
assets. The Adviser retains the right to re-impose a fee and recover any
other payments to the extent that, at the end of any fiscal year, the Fund's
annual expenses fall below this limit.

If the total of all ordinary business expenses of the Fund for any fiscal
year exceeds limitations prescribed in any state in which shares of the Fund
are qualified for sale, the fee payable to the Adviser will be reduced to the
extent required by these limitations. At this time, the most restrictive
limit on expenses imposed by a state requires that expenses charged to the
Fund in any fiscal year may not exceed 2 1/2% of the first $30,000,000 of the
Fund's average net assets, 2% of the next $70,000,000 of such net assets and
1 1/2% of the remaining average net assets. When calculating the above limit,
the Fund may exclude interest, brokerage commissions and extraordinary
expenses.

Pursuant to its investment management contract, the Adviser is not liable for
any error of judgment or mistake of law or for any loss suffered by the Fund
in connection with the matters to which the investment management contract
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser in the performance of its duties or
from reckless disregard by the Adviser of its obligations and duties under
the investment management contract.

<PAGE>

The Adviser, located at 101 Huntington Avenue, Boston, Massachusetts
02199-7603, was organized in 1968 and presently has more than $13 billion in
assets under management in its capacity as investment adviser to the Fund and
the other mutual funds and publicly traded investment companies in the John
Hancock group of funds having a combined total of over 1,060,000
shareholders. The Adviser is an affiliate of the Life Insurance Company, one
of the most recognized and respected financial institutions in the nation.
With total assets under management of $80 billion, the Life Insurance Company
is one of the ten largest life insurance companies in the United States, and
carries S&P's and A. M. Best's highest ratings. Founded in 1862, the Life
Insurance Company has been serving clients for over 130 years.

Under the investment management contract, the Fund may use the name "John
Hancock" or any name derived from or similar to it only for so long as the
contract or any extension, renewal or amendment thereof remains in effect.
If the contract is no longer in effect, the Fund (to the extent that it
lawfully can) will cease to use such a name or any other name indicating that
it is advised by or otherwise connected with the Adviser. In addition, the
Adviser or the Life Insurance Company may grant the non-exclusive right to
use the name "John Hancock" or any similar name to any other corporation or
entity, including but not limited to any investment company of which the Life
Insurance Company or any subsidiary or affiliate thereof or any successor to
the business of any subsidiary or affiliate thereof shall be the investment
adviser.

The investment management contract and the distribution contract discussed
below continue in effect from year to year if approved annually by vote of a
majority of the Independent Trustees (as defined below), cast in person at a
meeting called for the purpose of voting on such approval, and by either the
Trustees or the holders of a majority of the Fund's outstanding voting
securities. Each contract automatically terminates upon assignment. Each
contract may be terminated without penalty on 60 days' notice at the option
of either party to the respective contract or by vote of a majority of the
outstanding voting securities of the Fund.

DISTRIBUTION CONTRACT

The Fund has a distribution contract with John Hancock Funds pertaining to
each class of shares. Under the contract, John Hancock Funds is obligated to
use its best efforts to sell shares on behalf of the Fund. Shares of the
Fund are also sold by selected broker-dealers (the "Selling Brokers") which
have entered into selling agency agreements with John Hancock Funds. John
Hancock Funds accepts orders for the purchase of the shares of the Fund which
are continually offered at net asset value next determined, plus any
applicable sales charge. In connection with the sale of Class A or Class B
shares of the Fund, John Hancock Funds and Selling Brokers receive
compensation in the form of a sales charge imposed, in the case of Class A
shares, at the time of sale or, in the case of Class B shares, on a deferred
basis. The sales charges are listed in the Fund's Class A and Class B Shares
Prospectus (the "Class A and Class B Prospectus").

The Fund's Trustees have adopted Distribution Plans with respect to Class A
and Class B shares (together, the "Plans") pursuant to Rule 12b-1 under the
Investment Company Act. Under the Class A Plan and the Class B Plan, the
Fund will pay distribution and service fees at an aggregate annual rate of up
to 0.30% and 1.00%, respectively, of the Fund's average daily net assets.
However, the service fee will not exceed 0.25% of the Fund's average daily
net assets attributable to each class of shares. The distribution fees
reimburse John Hancock Funds for its distribution costs incurred in the
promotion of sales of Fund shares, and the service fees compensate Selling
Brokers for providing personal and account maintenance services to
shareholders. The Plans were approved by a majority of the voting securities
of the applicable class of the Fund. Both Plans and all amendments were
approved by a majority of the Trustees, including a majority of the Trustees
who are not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Plans (the "Independent
Trustees"), by votes cast in person at meetings called for the purpose of
voting on these Plans.

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

During the fiscal year ended December 31, 1994 the Fund paid Investor
Services the following amounts of expenses with respect to the Class A and
Class B shares of the Fund:

Expense Items

Printing Interest
and Mailing Expenses Carrying or
of Compensation of John Other
Prospectus to Selling Hancock Finance
Advertising to New Brokers Funds Charges
Shareholders Other

Growth Fund
Class A shares $ 43,864 $ 8,697 $ 301,129 $ 97,687 $ 0
Class B shares $ 801 $ 135 $ 18,534 $ 1,887 $ 348
shares

Each of the Plans provides that it will continue in effect only so long as
its continuance is approved at least annually by a majority of both the
Trustees and the Independent Trustees. Each of the Plans may be terminated
without penalty (a) by vote of a majority of the Independent Trustees, by a
majority of the Fund's outstanding shares of the applicable class upon 60
days' written notice to John Hancock Funds and (C) automatically in the event
of assignment. Each of the Plans further provides that it may not be amended
to increase the maximum amount of the fees for the services described therein
without the approval of a majority of the outstanding shares of the class of
the Fund which has voting rights with respect to the Plan. Each of the Plans
provides that no material amendment to the Plan will, in any event, be
effective unless it is approved by a vote of a majority of both the Trustees
and the Independent Trustees of the Fund. The holders of Class A and Class B
shares have exclusive voting rights with respect to the Plan applicable to
their respective class of shares. In adopting the Plans, the Trustees
concluded that, in their judgment, there is a reasonable likelihood that each
of the Plans will benefit the holders of the applicable class of shares of
the Fund.

<PAGE>
When the Fund seeks an Independent Trustee to fill a vacancy or as a nominee
for election by shareholders, the selection or nomination of the Independent
Trustee is, under resolutions adopted by the Trustees contemporaneously with
their adoption of the Plans, committed to the discretion of the Committee on
Administration of the Trustees. The members of the Committee on
Administration are all Independent Trustees and are identified in this
Statement of Additional Information under the heading "Those Responsible for
Management."

NET ASSET VALUE

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

Debt investment securities are valued on the basis of valuations furnished by
a principal market maker or a pricing service, both of which generally
utilize electronic data processing techniques to determine valuations for
normal institutional size trading units of debt securities without exclusive
reliance upon quoted prices.

Equity securities traded on a principal exchange or NASDAQ National Market
Issues are generally valued at last sale price on the day of valuation.
Securities in the aforementioned category for which no sales are reported
and other securities traded over-the-counter are generally valued at the last
available bid price.

<PAGE>

INITIAL SALES CHARGE ON CLASS A SHARES

The sales charges applicable to purchases of Class A shares of the Fund are
described in the Fund's Class A and Class B Prospectus. Methods of obtaining
reduced sales charges referred to generally in the Class A and Class B
Prospectus are described in detail below. In calculating the sales charge
applicable to current purchases of Class A shares of the Fund, the investor
is entitled to cumulate current purchases with the greater of the current
value (at offering price) of the Class A shares of the Fund, or if Investor
Services is notified by the investor's dealer or the investor at the time of
the purchase, the cost of the Class A shares owned.

Combined Purchases. In calculating the sales charge applicable to purchases
of Class A shares made at one time, the purchases will be combined if made by
(a) an individual, his spouse and their children under the age of 21,
purchasing securities for his or their own account, (b) a trustee or other
fiduciary purchasing for a single trust, estate or fiduciary account and (C)
certain groups of four or more individuals making use of salary deductions or
similar group methods of payment whose funds are combined for the purchase of
mutual fund shares. Further information about combined purchases, including
certain restrictions on combined group purchases, is available from Investor
Services or a Selling Broker's representative.

Without Sales Charges. As described in the Class A and Class B Prospectus,
Class A shares of the Fund may be sold without a sales charge to certain
persons described in the prospectus.

Accumulation Privilege. Investors (including investors combining purchases)
who are already Class A shareholders may also obtain the benefit of the
reduced sales charge by taking into account not only the amount then being
invested but also the purchase price or value of the Class A shares already
held by such person.

Letter of Intention. The reduced sales charges are also applicable to
investments made over a specified period pursuant to a Letter of Intention
(the "LOI"), which should be read carefully prior to its execution by an
investor. The Fund offers two options regarding the specified period for
making investments under the LOI. All investors have the option of making
their investments over a specified period of thirteen (13) months. Investors
who are using the Fund as a funding medium for a qualified retirement plan,
however, may opt to make the necessary investments called for by the LOI over
a forty-eight (48) month period. These qualified retirement plans include
group IRA, SEP, SARSEP, TSA, 401(k), 403(b) and 457 plans. Such an
investment (including accumulations and combinations) must aggregate $50,000
or more invested during the specified period from the date of the LOI or from
a date within ninety (90) days prior thereto, upon written request to
Investor Services. The sales charge applicable to all amounts invested under
the LOI is computed as if the aggregate amount intended to be invested had
been invested immediately. If such aggregate amount is not actually
invested, the difference in the sales charge actually paid and the sales
charge payable had the LOI not been in effect is due from the investor.
However, for the purchases actually made within the specified period (either
13 or 48 months) the sales charge applicable will not
<PAGE>
be higher than that which would have applied (including accumulations and
combinations) had the LOI been for the amount actually invested.

The LOI authorizes Investor Services to hold in escrow sufficient Class A
shares (approximately 5% of the aggregate) to make up any difference in sales
charges on the amount intended to be invested and the amount actually
invested, until such investment is completed within the specified period, at
which time the escrow shares will be released. If the total investment
specified in the LOI is not completed, the Class A shares held in escrow may
be redeemed and the proceeds used as required to pay such sales charge as may
be due. By signing the LOI, the investor authorizes Investor Services to act
as his attorney-in-fact to redeem any escrowed Class A shares and adjust the
sales charge, if necessary. An LOI does not constitute a binding commitment
by an investor to purchase, or by the Fund to sell, any additional Class A
shares and may be terminated at any time.

DEFERRED SALES CHARGE ON CLASS B SHARES

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

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

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

<PAGE>
SPECIAL REDEMPTIONS

Although it would not normally do so, the Fund has the right to pay the
redemption price of shares of the Fund in whole or in part in portfolio
securities as prescribed by the Trustees. If the shareholder were to sell
portfolio securities received in this fashion, he would incur a brokerage
charge. Any such securities would be valued for the purposes of making such
payment at the same value as used in determining net asset value. The Fund
has, however, elected to be governed by Rule 18f-1 under the Investment
Company Act. Under that rule, the Fund must redeem its shares for cash
except to the extent that the redemption payments to any shareholder during
any 90-day period would exceed the lesser of $250,000 or 1% of the Fund's net
asset value at the beginning of such period.

ADDITIONAL SERVICES AND PROGRAMS

Exchange Privilege. As describe d more fully in the Prospectuses, the Fund
permits exchanges of shares of any class of the Fund for shares of the same
class in any other John Hancock fund offering that class.

Systematic Withdrawal Plan. As described briefly in the Class A and Class B
Prospectus, the Fund permits the establishment of a Systematic Withdrawal
Plan. Payments under this plan represent proceeds from the redemption of
shares of the Fund. Since the redemption price of the shares of the Fund may
be more or less than the shareholder's cost, depending upon the market value
of the securities owned by the Fund at the time of redemption, the
distribution of cash pursuant to this plan may result in realization of gain
or loss for purposes of Federal, state and local income taxes. The
maintenance of a Systematic Withdrawal Plan concurrently with purchases of
additional Class A or Class B shares of the Fund could be disadvantageous to
a shareholder because of the initial sales charge payable on such purchases
of Class A shares and the CDSC imposed on redemptions of Class B shares and
because redemptions are taxable events. Therefore, a shareholder should not
purchase Class A or Class B shares at the same time that a Systematic
Withdrawal Plan is in effect. The Fund reserves the right to modify or
discontinue the Systematic Withdrawal Plan of any shareholder on 30 days'
prior written notice to such shareholder, or to discontinue the availability
of such plan in the future. The shareholder may terminate the plan at any
time by giving proper notice to Investor Services.

Monthly Automatic Accumulation Program ("MAAP"). This program is explained
fully in the Class A and Class B Prospectus. The program, as it relates to
automatic investment checks, is subject to the following conditions:

The investments will be drawn on or about the day of the month indicated.

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

Reinvestment Privilege. A shareholder who has redeemed Fund shares may,
within 120 days after the date of redemption, reinvest without payment of a
sales charge any part of the
<PAGE>
redemption proceeds in shares of the same class of the Fund or any of the
other John Hancock funds, subject to the minimum investment limit of that
fund. The proceeds from the redemption of Class A shares may be reinvested at
net asset value without paying a sales charge in Class A shares of the Fund or
in Class A shares of any of the other John Hancock funds. If a CDSC was paid
upon a redemption, a shareholder may reinvest the proceeds from this
redemption at net asset value in additional shares of the class from which the
redemption was made. The shareholder's account will be credited with the
amount of any CDSC charged upon the prior redemption and the new shares will
continue to be subject to the CDSC. The holding period of the shares acquired
through reinvestment will, for purposes of computing the CDSC payable upon a
subsequent redemption, include the holding period of the redeemed shares. The
Fund may modify or terminate the reinvestment privilege at any time.

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

DESCRIPTION OF THE FUND'S SHARES

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

The shares of each class of the Fund represent an equal proportionate
interest in the aggregate net assets attributable to that class of the Fund.
Class A shares and Class B shares of the Fund will be sold exclusively to
members of the public (other than the institutional investors described in
the Prospectuses) at net asset value. A sales charge will be imposed either
at the time of the purchase, for Class A shares, or on a contingent deferred
basis, for Class B shares. For Class A shares, no sales charge is payable at
the time of purchase on investments of $1 million or more, but for such
investments a contingent deferred sales charge may be imposed in the event of
certain redemption transactions within one year of purchase.

<PAGE>
The holders of Class A and Class B shares have certain exclusive voting
rights on matters relating to their respective Rule 12b-1 distribution
plans. The different classes of the Fund may bear different expenses
relating to the cost of holding shareholder meetings necessitated by the
exclusive voting rights of any class of shares.

Dividends paid by the Fund, if any, with respect to each class of shares will
be calculated in the same manner, at the same time and will be in the same
amount, except that (i) the distribution and service fees relating to Class A
and Class B shares will be borne exclusively by that class, (ii) Class B
shares will pay higher distribution and service fees than Class A shares and
(iii) each of Class A and Class B shares will bear any class expenses
properly allocable to that class of shares, subject to the conditions set
forth in a private letter ruling that the Fund has received from the Internal
Revenue Service relating to its multiple-class structure. Similarly, the net
asset value per share may vary depending on whether Class A shares or Class B
shares are purchased.

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

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

Under Massachusetts law, shareholders of a Massachusetts business trust
could, under certain circumstances, be held personally liable for acts or
obligations of the trust. However, the Fund's Declaration of Trust contains
an express disclaimer of shareholder liability for acts, obligations or
affairs of the Fund. The Declaration of Trust also provides for
indemnification out of the Fund's assets for all losses and expenses of any
shareholder held personally liable for reason of being or having been a
shareholder. Liability is therefore limited to circumstances in which the
Fund itself would be unable to meet its obligations, and the possibility of
this occurrence is remote.

<PAGE>

TAX STATUS

Each series of the Trust, including the Fund, is treated as a separate
entity for accounting and tax purposes. The Fund has qualified and has
elected to be treated as a "regulated investment company" under Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code") and intends to
continue to so qualify in the future. As such and by complying with the
applicable provisions of the Code regarding the sources of its income, the
timing of its distributions and the diversification of its assets, the Fund
will not be subject to Federal income tax on taxable income (including net
realized capital gains) which is distributed to shareholders at least
annually in accordance with the timing requirements of the Code.

The Fund will be subject to a four percent nondeductible Federal excise tax
on certain amounts not distributed (and not treated as having been
distributed) on a timely basis in accordance with annual minimum distribution
requirements. The Fund intends under normal circumstances to avoid liability
for such tax by satisfying such distribution requirements.

Distributions from the Fund's current or accumulated earnings and profits
("E&P"), as computed for Federal income tax purposes, will be taxable as
described in the Fund's Prospectus, whether taken in shares or in cash.
Distributions, if any, in excess of E&P will constitute a return of capital,
which will first reduce an investor's tax basis in Fund shares and thereafter
(after such basis is reduced to zero) will generally give rise to capital
gains. Shareholders electing to receive distributions in the form of
additional shares will have a cost basis for Federal income tax purposes in
each share so received equal to the amount of cash that they would have
received had they elected to receive the distribution in cash, divided by the
number of shares received.

The Fund may be subject to foreign taxes on its income from investments in
certain ADRs representing foreign securities. Tax conventions between
certain countries and the U.S. may reduce or eliminate such taxes. Because
more than 50% of the Fund's assets at the close of any taxable year will not
consist of stocks or securities of foreign corporation, the Fund will be
unable to pass such taxes through to shareholders (as additional income)
along with a corresponding entitlement to a foreign tax credit or deduction.

If the fund acquires ADRs representing stock in certain non-U.S. corporations
that receive at least 75% of their annual gross income from passive sources
(such as interest, dividends, rents royalties or capital gain) or hold at
least 50% of their asset in investments producing such passive income
("passive foreign investment companies'), the Fund could be subject to
Federal income tax and additional interest charges on "excess distributions"
received from such companies or gain from the sale of stock in such
companies, even if all income or gain actually received by the Fund is timely
distributed to its shareholders. The Fund would not be able to pass through
to it shareholders any credit or deduction for such a tax. Certain elections
may, if available, ameliorate these adverse tax consequences, but any such
election would require the Fund to recognize taxable income or gain without
the concurrent receipt of cash. The Fund may limit and/or manage its
holdings in passive foreign investment companies to minimize its tax
liability or maximize its return for these investments.

<PAGE>

The amount of net realized capital gains, if any, in any given year will
result from sales of securities made with a view to the maintenance of a
portfolio believed by the Fund's management to be most likely to attain the
Fund's objective. Such sales, and any resulting gains or losses, may
therefore vary considerably from year to year. At the time of an investor's
purchase of shares of the Fund, a portion of the purchase price is often
attributable to realized or unrealized appreciation in the Fund's portfolio
or undistributed taxable income of the Fund. Consequently, subsequent
distributions on such shares may be taxable to such investor even if the net
asset value of the investor's shares is, as a result of the distributions,
reduced below the investor's cost for such shares, and the distributions in
reality represent a return of a portion of the purchase price.

Upon a redemption of shares (including by exercise of the exchange privilege)
a shareholder will ordinarily realize a taxable gain or loss depending upon
his basis in his shares. Such gain or loss will be treated as capital gain
or loss if the shares are capital assets in the shareholder's hands and will
be long-term or short-term, depending upon the shareholder's holding period
for the shares. A sales charge paid in purchasing Class A shares of the Fund
cannot be taken into account for purposes of determining gain or loss on the
redemption or exchange of such shares within 90 days after their purchase to
the extent Class A shares of the Fund or another John Hancock fund are
subsequently acquired without payment of a sales charge pursuant to the
reinvestment or exchange privilege. Such disregarded charge will result in
an increase in the shareholder's tax basis in the Class A shares subsequently
acquired. Also, any loss realized on a redemption or exchange may be
disallowed to the extent the shares disposed of are replaced with other
shares of the Fund within a period of 61 days beginning 30 days before and
ending 30 days after the shares are disposed of, such as pursuant to the
Dividend Reinvestment Plan. In such a case, the basis of the shares acquired
will be adjusted to reflect the disallowed loss. Any loss realized upon the
redemption of shares with a tax holding period of six months or less will be
treated as a long-term capital loss to the extent of any amounts treated as
distributions of long-term capital gain with respect to such shares.

Although its present intention is to distribute all net capital gains, if
any, the Fund reserves the right to retain and reinvest all or any portion of
the excess, as computed for Federal income tax purposes, of net long-term
capital gain over net short-term capital loss in any year. The Fund will not
in any event distribute net long-term capital gains realized in any year to
the extent that a capital loss is carried forward from prior years against
such gain. To the extent such excess was retained and not exhausted by the
carry forward of prior years' capital losses, it would be subject to Federal
income tax in the hands of the Fund. Each shareholder would be treated for
Federal income tax purposes as if the Fund had distributed to him on the last
day of its taxable year his pro rata share of such excess, and he had paid
his pro rata share of the taxes paid by the Fund and reinvested the remainder
in the Fund. Accordingly, each shareholder would (a) include his pro rata
share of such excess as long-term capital gain in his return for his taxable
year in which the last day of the Fund's taxable year falls, (b) be entitled
either to a tax credit on his return for, or to a refund of, his pro rata
share of the taxes paid by the Fund, and (c) be entitled to increase the
adjusted tax basis for his shares in the Fund by the difference between his
pro rata share of such excess and his pro rata share of such taxes.

For Federal income tax purposes, the Fund is permitted to carry forward a net
capital loss in any year to offset net capital gains, if any, during the
eight years following the year of the

<PAGE>

loss. To the extent subsequent net capital gains are offset by such losses,
they would not result in Federal income tax liability to the Fund and, as
noted above, would not be distributed as such to shareholders. Presently,
there are no realized capital loss carry forwards available to offset future
net realized capital gains.

If the Fund invests in certain PIKs, zero coupon securities or certain
increasing rate securities (and, in general, any other securities with
original issue discount or with market discount if the Fund elects to include
market discount in income currently), the Fund will be required to accrue
income on such investments prior to the receipt of the corresponding cash
payments. However, the Fund must distribute, at least annually, all or
substantially all of its net income, including such accrued income, to
shareholders to qualify as a regulated investment company under the Code and
avoid Federal income and excise taxes. Therefore, the Fund may have to
dispose of its portfolio securities under disadvantageous circumstances to
generate cash, or may have to leverage itself by borrowing the cash, to
satisfy distribution requirements.

Investment in debt obligations that are at risk of or in default present
special tax issues for the Fund. Tax rules are not entirely clear about
issues such as when the Fund may cease to accrue interest, original issue
discount, or market discount, when and to what extent deductions may be taken
for bad debts or worthless securities, how payments received on obligations
in default should be allocated between principal and income, and whether
exchanges of debt obligations in a workout context are taxable. These and
other issues will be addressed by the Fund, in the event it acquires or holds
any such obligations, in order to reduce the risk of distributing
insufficient income to reserve its status as a regulated investment company
and seeks to avoid becoming subject to Federal income or excise tax.

For purposes of the dividends-received deduction available to corporations,
dividends received by the Fund, if any, from U.S. domestic corporations in
respect of the stock of such corporations held by the Fund, for U.S. Federal
income tax purposes, for at least 46 days (91 days in the case of certain
preferred stock) and distributed and designated by the Fund may be treated as
qualifying dividends. Corporate shareholders must meet the minimum holding
period requirement stated above (46 or 91 days) with respect to their shares
of the Fund in order to qualify for the deduction and, if they borrow to
acquire such shares, may be denied a portion of the dividends received
deduction. The entire qualifying dividend, including the
otherwise-deductible amount, will be included in determining the excess (if
any) of a corporate shareholder's adjusted current earnings over its
alternative minimum taxable income, which may increase its alternative
minimum tax liability. Additionally, any corporate shareholder should
consult its tax adviser regarding the possibility that its basis in its
shares may be reduced, for Federal income tax purposes, by reason of
"extraordinary dividends" received with respect to the shares, for the
purpose of computing its gain or loss on redemption or other disposition of
the shares.

Different tax treatment, including penalties on certain excess contributions
and deferrals, certain pre-retirement and post-retirement distributions and
certain prohibited transactions, is accorded to accounts maintained as
qualified retirement plans. Shareholders should consult their tax advisers
for more information.

The foregoing discussion relates solely to Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens and residents and U.S.
domestic corporations, partnerships, trusts or
<PAGE>
estates) subject to tax under such law. The discussion does not address
special tax rules applicable to certain classes of investors, such as
tax-exempt entities, insurance companies and financial institutions.
Dividends, capital gain distributions and ownership of or gains realized on
the redemption (including an exchanges) of shares of the Fund may also be
subject to state and local taxes. Shareholders should consult their own tax
advisers as to the Federal, state or local tax consequences of ownership of
shares of, and receipt of distributions from, the Fund in their particular
circumstances.

Non-U.S. investors not engaged in a U.S. trade or business with which their
Fund investment is effectively connected will be subject to U.S. Federal
income tax treatment that is different from that described above. These
investors may be subject to non-resident alien withholding tax at the rate of
30% (or a lower rate under an applicable tax treaty) on amounts treated as
ordinary dividends from the Fund and, unless an effective IRS Form W-8 or
authorized substitute is on file, to 31% backup withholding on certain other
payments from the Fund. Non-U.S. investors should consult their tax advisers
regarding such treatment and the application of foreign taxes to an
investment in the Fund.

CALCULATION OF PERFORMANCE

The average annual total return on Class A shares of the Fund for the 1 year,
5 year and 10 year periods ended December 31, 1994 was (12.14%), 6.47%, and
11.90%, respectively and reflect payment of the maximum sales charge of
5.0%. Total return (not annualized) since inception on January 3, 1994 for
Class B shares was (11.23%) and reflects the applicable contingent deferred
sales charge.

<PAGE>
Total return is computed by finding the average annual compounded rate of
return over the 1 year, 5 year and 10 year periods that would equate the
initial amount invested to the ending redeemable value according to the
following formula:

[EQUATION]

Where:

P = a hypothetical initial investment of $1,000.

T = average annual total return.

n = number of years.

ERV = ending redeemable value of a hypothetical $1,000 investment made
at
the beginning of the 1 year, 5 year, and 10 year periods.

In the case of Class A shares or Class B shares, this calculation assumes the
maximum sales charge of 5.00% is included in the initial investment or the
CDSC is applied at the end of the period, respectively. This calculation
also assumes that all dividends and distributions are reinvested at net asset
value on the reinvestment dates during the period.

In addition to average annual total returns, the Fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an
investment over a stated period. Cumulative total returns may be quoted as a
percentage or as a dollar amount, and may be calculated for a single
investment, a series of investments and/or a series of redemptions over any
time period. Total returns may be quoted with or without taking the Fund's
5.00% sales charge on Class A shares or the CDSC on Class B shares into
account. The "distribution rate" is determined by annualizing the result of
dividing the declared dividends of the Fund during the period stated by the
maximum offering price or net asset value at the end of the period.
Excluding the Fund's sales charge on Class A shares and the CDSC on Class B
shares from a total return calculation produces a higher total return figure.

From time to time, in reports and promotional literature, the Fund's total
return will be compared to indices of mutual funds such as Lipper Analytical
Services, Inc.'s "Lipper - Mutual Performance Analysis," a monthly
publication which tracks net assets, total return and yield on more than
1,000 equity mutual funds in the United States. Ibottson and Associates, CDA
Weisenberger and F.C. Towers are also used for comparison purposes, as well
as the Russell and Wilshire Indices.

Performance rankings and ratings reported periodically in national financial
publications such as MONEY Magazine, FORBES, BUSINESS WEEK, THE WALL STREET
JOURNAL, MICROPAL, INC., MORNINGSTAR, STANGER'S and BARRON'S may also be
utilized.

<PAGE>
The performance of the Fund is not fixed or guaranteed. Performance
quotations should not be considered to be representations of performance of
the Fund for any period in the future. The performance of the Fund is a
function of many factors including its earnings, expenses and number of
outstanding shares. Fluctuating market conditions; purchases, sales and
maturities of portfolio securities; sales and redemptions of shares of
beneficial interest; and changes in operating expenses are all examples of
items that can increase or decrease the Fund's performance.

BROKERAGE ALLOCATION

Decisions concerning the purchase and sale of portfolio securities and the
allocation of brokerage commissions are made by the Adviser pursuant to
recommendations made by its investment committee, which consists of officers
and directors of the Adviser and affiliates and officers and Trustees who are
interested persons of the Fund. Orders for purchases and sales of securities
are placed in a manner which, in the opinion of the Adviser, will offer the
best price and market for the execution of each such transaction. Purchases
from underwriters of portfolio securities may include a commission or
commissions paid by the issuer, and transactions with dealers serving as
market makers reflect a "spread." Investments in debt securities are
generally traded on a net basis through dealers acting for their own account
as principals and not as brokers; no brokerage commissions are payable on
such transactions.

The Fund's primary policy is to execute all purchases and sales of portfolio
instruments at the most favorable prices consistent with best execution,
considering all of the costs of the transaction including brokerage
commissions. This policy governs the selection of brokers and dealers and
the market in which a transaction is executed. Consistent with the foregoing
primary policy, the Rules of Fair Practice of the National Association of
Securities Dealers, Inc. and such other policies as the Trustees may
determine, the Adviser may consider sales of shares of the Fund as a factor
in the selection of broker-dealers to execute the Fund's portfolio
transactions.

To the extent consistent with the foregoing, the Fund will be governed in the
selection of brokers and dealers, and the negotiation of brokerage commission
rates and dealer spreads, by the reliability and quality of the services,
including primarily the availability and value of research information and,
to a lesser extent, statistical assistance furnished to the Adviser of the
Fund and their value and expected contribution to the performance of the
Fund. It is not possible to place a dollar value on information and services
to be received from brokers and dealers, since it is only supplementary to
the research efforts of the Adviser. The receipt of research information is
not expected to reduce significantly the expenses of the Adviser. The
research information and statistical assistance furnished by brokers and
dealers may benefit the Life Insurance Company or other advisory clients of
the Adviser, and, conversely, brokerage commissions and spreads paid by other
advisory clients of the Adviser may result in research information and
statistical assistance beneficial to the Fund. The Fund will not make
commitments to allocate portfolio transactions upon any prescribed basis.
While the Fund's officers will be primarily responsible for the allocation of
the Fund's brokerage business, their policies and practices in this regard
must be consistent with the foregoing and will at all times be subject to
review by the Trustees. For the years ended on December 31, 1994, 1993 and
1992, the Fund paid negotiated brokerage commissions in the amount of
$236,226,$244,879 and $251,062, respectively.

<PAGE>

As permitted by Section 28(e) of the Securities Exchange Act of 1934, the
Fund may pay a broker which provides brokerage and research services to the
Fund an amount of disclosed commission in excess of the commission which
another broker would have charged for effecting that transaction. This
practice is subject to a good faith determination by the Trustees that such
commission is reasonable in light of the services provided and to such
policies as the Trustees may adopt from time to time. During the fiscal year
ended December 31, 1994, the Fund directed commissions in the amount of
$43,3694 to compensate brokers for research services such as industry,
economic and company reviews and evaluations of securities.

The Adviser's indirect parent, the Life Insurance Company, is the indirect
sole shareholder of John Hancock Freedom Securities Corporation and its
subsidiaries, two of which, Tucker Anthony Incorporated ("Tucker Anthony")
and Sutro & Company, Inc. ("Sutro"), are broker-dealers ("Affiliated
Brokers"). Pursuant to procedures determined by the Trustees and consistent
with the above policy of obtaining best net results, the Fund may execute
portfolio transactions with or through Tucker Anthony or Sutro. During the
year ended December 31, 1994, the Fund did not execute any portfolio
transactions with Affiliated Brokers.

Any of the Affiliated Brokers may act as broker for the Fund on exchange
transactions, subject, however, to the general policy of the Fund set forth
above and the procedures adopted by the Trustees pursuant to the Investment
Company Act. Commissions paid to an Affiliated Broker must be at least as
favorable as those which the Trustees believe to be contemporaneously charged
by other brokers in connection with comparable transactions involving similar
securities being purchased or sold. A transaction would not be placed with
an Affiliated Broker if the Fund would have to pay a commission rate less
favorable than the Affiliated Broker's contemporaneous charges for comparable
transactions for its other most favored, but unaffiliated, customers, except
for accounts for which the Affiliated Broker acts as clearing broker for
another brokerage firm, and any customers of the Affiliated Broker not
comparable to the Fund as determined by a majority of the Trustees who are
not "interested persons" (as defined in the Investment Company Act) of the
Fund, the Adviser or the Affiliated Broker. Because the Adviser, which is
affiliated with the Affiliated Brokers, has, as an investment adviser to the
Fund, the obligation to provide investment management services, which include
elements of research and related investment skills, such research and related
skills will not be used by the Affiliated Broker as a basis for negotiating
commissions at a rate higher than that determined in accordance with the
above criteria. The Fund will not effect principal transactions with
Affiliated Brokers.

TRANSFER AGENT SERVICES

John Hancock Investor Services Corporation, P.O. Box 9116, Boston, MA
02205-9116, a wholly owned indirect subsidiary of the Life Insurance Company,
is the transfer and dividend paying agent for the Fund. The Fund pays
Investor Services an annual fee for Class A of $16.00 per shareholder account
and for Class B shares of $18.50 plus certain out-of-pocket expenses.

<PAGE>

CUSTODY OF PORTFOLIO

Portfolio securities of the Fund are held pursuant to a custodian agreement
between the Fund and Investors Bank & Trust Company, 24 Federal Street,
Boston, Massachusetts 02110. Under the custodian agreement, Investors Bank &
Trust Company performs custody, portfolio and fund accounting services.

INDEPENDENT AUDITORS

The independent auditors of the Fund are Ernst & Young LLP, 200 Clarendon
Street, Boston, Massachusetts 02116. Ernst & Young audits and renders an
opinion of the Fund's annual financial statements and prepares the Fund's
annual Federal income tax return.

<PAGE>

APPENDIX

Moody's describes its lower ratings for corporate bonds as follows:

Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any
great length of time. Such bonds lack outstanding investment characteristics
and in fact have speculative characteristics as well.

Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.

Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.

Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.

Bonds which are rated Ca represented obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.

Bonds which are rated C are the lowest rated class of bonds and issues so
rated can be regarded as having extremely poor prospects of ever attaining
any real investment standing.

S&P describes its lower ratings for corporate bonds as follows:

Debt rated BBB is regarded as having an adequate capacity to pay interest and
repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories.

Debt rated BB, B, CCC, or CC is regarded, on balance, as predominantly
speculative with respect to the issuer's capacity to pay interest and repay
principal in accordance with the terms of the obligations. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

Moody's describes its three highest ratings for commercial paper as follows:

<PAGE>

Issuers rated P-1 (or related supporting institutions) have a superior
capacity for repayment of short-term promissory obligations. P-1 repayment
capacity will normally be evidenced by the following characteristics:
(1) leading market positions in well-established industries; (2) high rates
of return on funds employed; (3) conservative capitalization structures with
moderate reliance on debt and ample asset protections; (4) broad margins in
earnings coverage of fixed financial charges and high internal cash
generation; and (5) well established access to a range of financial markets
and assured sources of alternate liquidity.

Issuers rated P- (or related supporting institutions) have a strong capacity
for repayment of short-term promissory obligations. This will normally be
evidenced by many of the characteristics cited above but to a lesser degree.
Earnings trends and coverage ratios, while sound, will be more subject to
variation. Capitalization characteristics, while still appropriate, may be
more affected by external conditions. Ample alternate liquidity is
maintained.

Issuers rated P-3 (or supporting institutions) have an acceptable ability for
repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability
in earnings and profitability may result in changes in the level of debt
protection measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.

S&P describes its three highest ratings for commercial paper as follows:

A-1. This designation indicated that the degree of safety regarding timely
payment is very strong.

A-2. Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as overwhelming as for issues
designated A-1.

A-3. Issues carrying this designation have a satisfactory capacity for
timely payment. They are, however, somewhat more vulnerable to the adverse
effects of changes in circumstances than obligations carrying the higher
designations.

y:\corpsec\n1a\sai\growth\94growth.doc

<PAGE>

FINANCIAL STATEMENTS

John Hancock Funds - Growth Fund

STATEMENT OF ASSETS AND LIABILITIES
December 31, 1994
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at value - Note C:
Common and preferred stocks and other
investments (cost - $99,222,702) ................................... $133,044,530
Publicly traded convertible bonds (cost - $650,000)................... 680,063
Joint repurchase agreement (cost - $18,236,000) ...................... 18,236,000
Corporate savings account ............................................ 217
------------
151,960,810
Receivable for shares sold ............................................. 2,016
Interest receivable .................................................... 11,045
Dividends receivable ................................................... 86,456
------------
Total Assets ................................... 152,060,327
---------------------------------------------------------------
LIABILITIES:
Payable to John Hancock Advisers, Inc. and
affiliates - Note B ................................................ 152,434
Accounts payable and accrued expenses ................................ 60,429
------------
Total Liabilities .............................. 212,863
---------------------------------------------------------------
NET ASSETS:
Capital paid-in ...................................................... 118,146,978
Accumulated net realized loss on investments ......................... ( 151,405)
Net unrealized appreciation of investments ........................... 33,851,891
------------
Net Assets ..................................... $151,847,464
===============================================================

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 - $146,466,468/9,218,162 ..................................... $ 15.89
=====================================================================================
Class B - $3,807,391/240,447 ......................................... $ 15.83
=====================================================================================
Class C - $1,573,605/98,220 .......................................... $ 16.02
=====================================================================================
MAXIMUM OFFERING PRICE PER SHARE*
Class A - ($15.89 x 105.26%) ......................................... $ 16.73
=====================================================================================
</TABLE>

* 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.
** Class B shares commenced operations on January 3, 1994

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
Year ended December 31, 1994
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $30,851) ............... $ 932,417
Interest .............................................................. 627,462
----------
1,559,879
----------

Expenses:
Investment management fee - Note B .................................... 1,231,294
Transfer agent fee - Note B
Class A ............................................................. 601,585
Class B ** .......................................................... 9,113
Class C ............................................................. 2,156
Distribution/service fee - Note B
Class A ............................................................. 451,377
Class B ** .......................................................... 21,705
Registration and filing fees .......................................... 59,064
Custodian fee ......................................................... 55,716
Printing .............................................................. 44,806
Auditing fee .......................................................... 34,700
Trustees' fees ........................................................ 16,215
Miscellaneous ......................................................... 10,798
Legal fees ............................................................ 8,130
----------
Total Expenses .................................. 2,546,659
---------------------------------------------------------------
Net Investment Loss ............................. ( 986,780)
---------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments sold ................................. 1,529,276
Change in net unrealized appreciation/depreciation
of investments ...................................................... ( 13,091,731)
----------
Net Realized and Unrealized
Loss on Investments ............................. ( 11,562,455)
---------------------------------------------------------------
Net Decrease in Net Assets
Resulting from Operations ....................... ($12,549,235)
===============================================================
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE>

FINANCIAL STATEMENTS

John Hancock Funds - Growth Fund

STATEMENT OF CHANGES IN NET ASSETS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-----------------------------
1994 1993
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss........................................................................... ($ 986,780) ($ 1,051,228)
Net realized gain on investments sold ........................................................ 1,529,276 19,949,589
Change in net unrealized appreciation/depreciation of investments ............................ ( 13,091,731) 707,708
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations ........................... ( 12,549,235) 19,606,069
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gain on investments sold
Class A - ($0.2020 and $2.1376 per share, respectively) ............................. ( 1,850,208) ( 18,554,024)
Class B** - ($0.2020 and none per share, respectively) ................................... ( 43,984) --
Class C*** - ($0.2020 and $2.1376 per share, respectively) .............................. ( 18,255) ( 139,862)
------------ ------------
Total Distributions to Shareholders ...................................................... ( 1,912,447) ( 18,693,886)
------------ ------------
FROM FUND SHARE TRANSACTIONS -- NET* 2,086,820 10,252,971
NET ASSETS:
Beginning of period .......................................................................... 164,222,326 153,057,172
------------ ------------
End of period ................................................................................ $151,847,464 $164,222,326
============ ============

* ANALYSIS OF FUND SHARE TRANSACTIONS:

YEAR ENDED DECEMBER 31,
-----------------------------------------------------------
1994 1993
------------------------- -----------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ------------ ------------ ------------
CLASS A
Shares sold .................................................... 4,198,071 $71,177,794 7,812,551 $142,828,715
Shares issued to shareholders in reinvestment of distributions . 110,953 1,738,305 1,019,169 17,417,659
--------- ------------ ------------ ------------
4,309,024 72,916,099 8,831,720 160,246,374
Less shares repurchased ........................................ (4,457,375) ( 75,094,698) ( 8,300,651) ( 151,269,460)
--------- ------------ ------------ ------------
Net increase (decrease) ........................................ ( 148,351) ($ 2,178,599) 531,069 $ 8,976,914
========= =========== ============ ============

CLASS B **
Shares sold .................................................... 259,658 $ 4,192,534
Shares issued to shareholders in reinvestment of distributions . 2,737 42,721
--------- -----------
262,395 4,235,255
Less shares repurchased ........................................ ( 21,948) ( 347,495)
--------- -----------
Net increase ................................................... 240,447 $ 3,887,760
========= ===========

CLASS C ***
Shares sold .................................................... 30,518 $ 480,690 65,430 $ 1,136,195
Shares issued to shareholders in reinvestment of distributions . 1,121 17,646 8,165 139,862
--------- ----------- ----------- ------------
31,639 498,336 73,595 1,276,057
Less shares repurchased ........................................ ( 7,014) ( 120,677)
--------- ----------- ----------- ------------
Net increase ................................................... 24,625 $ 377,659 73,595 $ 1,276,057
========= =========== =========== ============
</TABLE>

** Class B shares commenced operations on January 3, 1994.
*** Class C shares commenced operations on May 7, 1993.

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE>
FINANCIAL STATEMENTS

John Hancock Funds - Growth Fund

FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period indicated: investment returns, key ratios and supplemental data are as
follows:
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .............................. $ 17.40 $ 17.32 $ 17.48 $ 12.93 $ 15.18
-------- -------- -------- -------- --------
Net Investment Income (Loss) ...................................... ( 0.10) ( 0.11) ( 0.06) 0.04 0.16
Net Realized and Unrealized Gain (Loss) on Investments ............ ( 1.21) 2.33 1.10 5.36 ( 1.47)
-------- -------- -------- -------- --------
Total from Investment Operations .................................. ( 1.31) 2.22 1.04 5.40 ( 1.31)
-------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income .............................. -- -- -- ( 0.04) ( 0.16)
Distributions from Net Realized Gain on Investments Sold .......... ( 0.20) ( 2.14) ( 1.20) ( 0.81) ( 0.78)
-------- -------- -------- -------- --------
Total Distributions ............................................... ( 0.20) ( 2.14) ( 1.20) ( 0.85) ( 0.94)
-------- -------- -------- -------- --------
Net Asset Value, End of Period .................................... $ 15.89 $ 17.40 $ 17.32 $ 17.48 $ 12.93
======== ======== ======= ======== ========
Total Investment Return at Net Asset Value ........................ ( 7.50%) 13.03% 6.06% 41.68% ( 8.34%)

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ......................... $146,466 $162,937 $153,057 $145,287 $102,416
Ratio of Expenses to Average Net Assets ........................... 1.65% 1.56% 1.60% 1.44% 1.46%
Ratio of Net Investment Income (Loss) to Average Net Assets ....... ( 0.64%) ( 0.67%) ( 0.36%) 0.27% 1.12%
Portfolio Turnover Rate ........................................... 52% 68% 71% 82% 102%

CLASS B (a)
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period .............................. $ 17.16 (b)
--------
Net Investment Loss ............................................... ( 0.20)(c)
Net Realized and Unrealized Loss on Investments ................... ( 0.93)
--------
Total from Investment Operations .................................. ( 1.13)
--------
Less Distributions:
Distributions from Net Realized Gain on Investments Sold .......... ( 0.20)
--------
Net Asset Value, End of Period .................................... $ 15.83
========
Total Investment Return at Net Asset Value ........................ ( 6.56%)

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (OOO's omitted) ......................... $ 3,807
Ratio of Expenses to Average Net Assets ........................... 2.38% (d)
Ratio of Net Investment Loss to Average Net Assets ................ ( 1.25%)(d)
Portfolio Turnover Rate ........................................... 52%
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE>

FINANCIAL STATEMENTS

John Hancock Funds - Growth Fund

FINANCIAL HIGHLIGHTS (continued)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31, PERIOD ENDED
1994 DECEMBER 31, 1993(e)
------------ -----------------
<S> <C> <C>
CLASS C
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ........................... $ 17.46 $ 17.05 (b)
-------- --------
Net Investment Loss ............................................ ( 0.01) ( 0.02)
Net Realized and Unrealized Gain (Loss) on Investments ......... ( 1.23) 2.57
-------- --------
Total from Investment Operations ............................... ( 1.24) 2.55
-------- --------
Less Distributions:
Distributions from Net Realized Gain on Investments Sold ....... ( 0.20) ( 2.14)
-------- --------
Net Asset Value, End of Period ................................. $ 16.02 $ 17.46
======== ========
Total Investment Return at Net Asset Value ..................... ( 7.07%) ( 15.18%)

RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (OOO's omitted) ...................... $ 1,574 $ 1,285
Ratio of Expenses to Average Net Assets ........................ 1.12% 1.05% (d)
Ratio of Net Investment Loss to Average Net Assets ............. ( 0.08%) ( 0.17%)(d)
Portfolio Turnover Rate ........................................ 52% 68%
</TABLE>

(a) Class B shares commenced operations on January 3, 1994.
(b) Initial price at commencement of operations.
(c) On average month end shares outstanding.
(d) On an annualized basis.
(e) Class C shares commenced operations on May 7, 1993.

THE FINANCIAL HIGHLIGHTS SUMMARIZES THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIOD INDICATED: THE NET INVESTMENT INCOME, GAINS
(LOSSES), DISTRIBUTIONS 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.

10
<PAGE>

FINANCIAL STATEMENTS

John Hancock Funds - Growth Fund

THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY THE
GROWTH FUND ON DECEMBER 31, 1994. IT'S DIVIDED INTO FIVE MAIN CATEGORIES: COMMON
STOCKS, PREFERRED STOCKS, OTHER INVESTMENTS, PUBLICLY TRADED CONVERTIBLE BONDS
AND SHORT-TERM INVESTMENTS. THE INVESTMENTS ARE FURTHER BROKEN DOWN BY INDUSTRY
GROUPS. SHORT-TERM INVESTMENTS, WHICH REPRESENT THE FUND'S "CASH" POSITION, ARE
LISTED LAST.

SCHEDULE OF INVESTMENTS
December 31, 1994
- -------------------------------------------------------------------------------

<TABLE>
<CAPTION>
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
COMMON STOCKS
APPLIANCES - HOUSEHOLD (0.42%)
Fedders Corp.** .......................... 70,000* $ 498,750
Fedders Corp. (Class A)** ................ 25,000* 131,250
------------
630,000
------------
BANKS (0.87%)
West One Bancorp .......................... 50,000 1,325,000
------------
BEVERAGES (1.87%)
Coca-Cola Co. (The) ...................... 55,000 2,832,500
------------
BROADCASTING (5.52%)
Gaylord Entertainment Co. (Class A) ...... 100,000 2,275,000
Grupo Televisa S.A., Global
Depository Receipt (GDR) ............... 20,000 635,000
Infinity Broadcasting Corp. (Class A)** .. 90,000 2,835,000
Tele-Communications, Inc. (Class A)** .... 60,000 1,305,000
Telewest Communications PLC, American
Depositary Receipt, (ADR)** ............ 50,000* 1,325,000
------------
8,375,000
------------
BUILDING PRODUCTS (1.97%)
Home Depot, Inc. (The) ................... 65,000 2,990,000
------------
COMPUTERS (10.91%)
Adaptec, Inc.** .......................... 170,000 3,995,000
America Online, Inc.** ................... 40,000* 2,230,000
cisco Systems, Inc.** .................... 60,000 2,100,000
Computer Associates International, Inc. .. 50,000 2,425,000
EMC Corp.** .............................. 110,400 2,387,400
HBO & Co. ................................ 100,000* 3,425,000
------------
16,562,400
------------
COSMETICS & TOILETRIES (2.22%)
Gillette Co. (The) ....................... 45,000 3,363,750
------------
DRUGS (1.02%)
Pfizer, Inc. ............................. 20,000* 1,545,000
------------
ELECTRONICS (8.01%)
Molex Inc. (Class A) ..................... 75,000* 2,325,000
Motorola, Inc. ........................... 80,400 4,653,150
Scientific-Atlanta, Inc. ................. 100,000* 2,100,000
Vishay Intertechnology, Inc.** ........... 63,000 3,087,000
------------
12,165,150
------------
FINANCE (3.82%)
MBNA Corp. ............................... 120,000 2,805,000
Paychex, Inc. ............................ 75,000 3,000,000
------------
5,805,000
------------
FINANCIAL/BUSINESS SERVICES (0.47%)
Robert Half International, Inc.** ........ 30,000* 720,000
------------
FURNITURE (1.07%)
Heilig Meyers Co. ........................ 64,300* 1,623,575
------------
HEALTHCARE (8.44%)
Health Management Associates,
Inc. (Class A)** ....................... 90,000* 2,250,000
Humana, Inc.** ........................... 110,000* 2,488,750
Johnson & Johnson ........................ 35,000* 1,916,250
Physician Corp. of America** ............. 75,000* 1,518,750
United Healthcare Corp. .................. 70,000* 3,158,750
Value Health, Inc.** ..................... 40,000* 1,490,000
------------
12,822,500
------------
HOTELS & MOTELS (1.33%)
Doubletree Corp.** ....................... 40,000* 730,000
La Quinta Motor Inns, Inc. ............... 60,000* 1,282,500
------------
2,012,500
------------
LEISURE & RECREATION (6.34%)
Disney (Walt) Co., (The) ................. 70,000 3,228,750
International Game Technology ............ 90,000 1,395,000
PolyGram N.V. (ADR) ...................... 75,000 3,459,375
Promus Companies, Inc. (The)** ........... 50,000 1,550,000
------------
9,633,125
------------
LINEN SUPPLY (1.38%)
Cintas Corp. ............................. 60,000 2,100,000
------------
MEDICAL/DENTAL (1.60%)
Cardinal Health, Inc. .................... 52,500* 2,434,687
------------
MOTION PICTURES (1.48%)
King World Productions, Inc.** ........... 65,000 2,242,500
------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE>
FINANCIAL STATEMENTS

John Hancock Funds - Growth Fund

<TABLE>
<CAPTION>
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
NURSING HOMES (3.34%)
Health Care & Retirement** ............... 100,000 $ 3,012,500
Manor Care, Inc. ......................... 75,000* 2,053,125
------------
5,065,625
------------
OFFICE EQUIPMENT & SUPPLIES (1.26%)
Office Depot, Inc.** ..................... 80,000* 1,920,000
------------
PUBLISHING (1.90%)
News Corp. Ltd. (The) (ADR) .............. 50,000* 781,250
Time Warner, Inc. ........................ 60,000 2,107,500
------------
2,888,750
------------
RESTAURANTS (3.67%)
Brinker International, Inc.** ............ 65,000 1,178,125
McDonald's Corp. ......................... 150,000 4,387,500
------------
5,565,625
------------
RETAIL (12.84%)
Albertson's, Inc. ........................ 70,000 2,030,000
AnnTaylor Stores, Corp.** ................ 70,000 2,406,250
Barnes & Noble, Inc.** ................... 25,000* 781,250
CUC International, Inc.** ................ 70,000 2,345,000
Dollar General Corp. ..................... 100,000 2,950,000
Gap, Inc. (The) .......................... 60,000* 1,830,000
Nordstrom, Inc. .......................... 40,000* 1,680,000
Sports & Recreation, Inc. ................ 80,000* 2,060,000
Sports Authority, Inc. (The)** ........... 21,000* 441,000
Wal-Mart Stores, Inc. .................... 140,000 2,975,000
------------
19,498,500
------------
TELECOMMUNICATIONS (5.05%)
Airtouch Communications, Inc.** .......... 70,000* 2,038,750
LDDS Communications, Inc.** .............. 50,000* 968,750
Telefonos de Mexico, S.A., (ADR) ......... 40,000* 1,640,000
Vodafone Group PLC (ADR) ................. 90,000 3,026,250
------------
7,673,750
------------
TEXTILES (0.59%)
Tommy Hilfiger Corp.** ................... 20,000* 902,500
------------
TOTAL COMMON STOCKS
(Cost $98,751,932) ( 87.39%) 132,697,437
------- ------------

PREFERRED STOCK
PUBLISHING (0.23%)
News Corp. Ltd. (The) ADR ................ 25,000* 346,875
------------
TOTAL PREFERRED STOCK
(Cost $399,895) ( 0.23%) 346,875
------- ------------
OTHER INVESTMENTS
DRUGS (0.00%)
Lilly (Eli) & Co., Contingent
Payment Units** ........................ 14,000 218
------------
TOTAL OTHER INVESTMENT
(COST $ 70,875) ( 0.00%) 218
------- ------------
TOTAL COMMON STOCKS,
PREFERRED STOCKS AND
OTHER INVESTMENTS
(COST $ 99,222,702) ( 87.62%) 133,044,530
------- ------------
</TABLE>

<TABLE>
<CAPTION>
INTEREST S&P PAR VALUE
RATE RATING*** (000'S OMITTED)
-------- ------ ---------------
<S> <C> <C> <C>
PUBLICLY TRADED
CONVERTIBLE BONDS
TOYS/GAMES/
HOBBY PRODUCTS (0.44%)
Hasbro, Inc.
Conv. Sub.
Note 11-15-98 ....... 6.00% A- $ 650 680,063
------------
TOTAL PUBLICLY TRADED
CONVERTIBLE BONDS
(Cost $ 650,000) ( 0.44%) 680,063
------- ------------
</TABLE>

SEE NOTES TO FINANCIAL STATEMENTS.

<PAGE>
FINANCIAL STATEMENTS

John Hancock Funds - Growth Fund

<TABLE>
<CAPTION>
INTEREST PAR VALUE
ISSUER, DESCRIPTION RATE (000'S OMITTED) MARKET VALUE
- ------------------- -------- --------------- ------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
JOINT REPURCHASE AGREEMENT (12.01%)
Investment in a joint
repurchase agreement transaction with Lehman Bros., Inc. - Dated 12-30-94,
Due 01-03-95 (Secured by US Treasury Bonds, 9.25% due 02-15-16; and 8.125%
due 08-15-21; and US Treasury Notes, 5.50% due 02-15-95 and 4.625%
due 08-15-95) ..................... 5.85% $18,236 $ 18,236,000
------------
CORPORATE SAVINGS ACCOUNT (0.00%)
Investors Bank & Trust
Company Daily Interest
Savings Account
Current Rate 3.00% ................ 217
------------
TOTAL SHORT-TERM INVESTMENTS ( 12.01%) 18,236,217
-------- ------------
TOTAL INVESTMENTS (100.07%) $151,960,810
======= ============
</TABLE>

* Securities, other than short-term investments, newly added to the portfolio
during the year ended December 31, 1994.
** Non-income producing securities.
*** Credit ratings are unaudited.
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.

<PAGE>
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Growth Fund

NOTE A --
ACCOUNTING POLICIES

John Hancock Capital Series (the "Trust"), is an open-end management investment
company, registered under the Investment Company Act of 1940. The Trust consists
of two series portfolios: John Hancock Growth Fund (the "Fund") and John Hancock
Special Value Fund. The Trustees have authorized the issuance of multiple
classes of the Fund, designated as Class A, Class B and Class C. 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/service expenses
under terms of a distribution plan, have exclusive voting rights regarding such
distribution plan. Significant accounting policies of the Fund are as follows:

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.

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 its taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision is
required. Net capital losses of $151,430 attributable to security transactions
occurring after October 31, 1994 and are treated as arising on the first day
(January 1, 1995) of the Fund's next taxable year.

DIVIDENDS, DISTRIBUTIONS AND INTEREST Dividend income on investment securities
is recorded on the ex-dividend date. 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, and 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 as explained previously.

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 manner as deemed equitable, taking into
consideration, among other things, the nature and type of expense and the
relative sizes of the Funds.

CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains
(losses) are determined at the Fund level and allocated daily to each class of
shares based on the appropriate net assets of the respective classes. Transfer
agent expenses and distribution/service fees if any, are calculated daily at the
class level based on the appropriate

<PAGE>

NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Growth Fund

net assets of each class and the specific expense rate(s) applicable to each
class.

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 (a) 0.80% of the first $250,000,000 of the Fund's
average daily net asset value, (b) 0.75% of the next $250,000,000 and (c) 0.70%
of the Fund's average daily net asset value in excess of $500,000,000.

In the event normal operating expenses of the Fund, exclusive of certain
expenses prescribed by state law, are in excess of the most restrictive state
limit where the Fund is registered to sell shares of beneficial interest, the
fee payable to the Adviser will be reduced to the extent of such excess and the
Adviser will make additional arrangements necessary to eliminate any remaining
excess expenses. The current limits are 2.5% of the first $30,000,000 of the
Fund's average daily net asset value, 2.0% of the next $70,000,000, and 1.5% of
the remaining average daily net asset value.

The Fund has a distribution agreement with John Hancock Funds, Inc. ("JH
Funds"), a wholly-owned subsidiary of the Adviser. Prior to January 1, 1995, JH
Funds was known as John Hancock Broker Distribution Services, Inc. For the
period ended December 31, 1994, JH Funds received net sales charges of $393,400.
Out of this amount, $59,810 was retained and used for printing prospectuses,
advertising, sales literature, and other purposes, $44,496 was paid as sales
commissions and first year service fees to unrelated broker-dealers, and
$289,094 was paid as sales commissions and first year service fees to sales
personnel of John Hancock Distributors, Inc. ("Distributors"), Tucker Anthony,
Incorporated ("Tucker Anthony") and Sutro & Co., Inc. ("Sutro"). The Adviser's
indirect parent, John Hancock Mutual Life Insurance Company, is the indirect
sole shareholder of Distributors and John Hancock Freedom Securities Corporation
and its subsidiaries, which include Tucker Anthony and Sutro, all of which are
broker-dealers.

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 December 31,
1994 contingent deferred sales charges received by JH Funds amounted to $29,565.

In addition, to compensate JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted Distribution Plans 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 Investor Services
Corporation, ("Investor Services"), a wholly-owned subsidiary of The Berkeley
Financial Group. Prior to January 1, 1995, Investor Services was known as John
Hancock Fund Services, Inc. For the period ended December 31, 1994, the Fund
paid Investor Services a monthly transfer agent fee equivalent, on an annual
basis, to 0.40%, 0.42% and 0.10% (0.40% prior to April 1, 1994) of the average
daily net asset value, attributable to Class A, Class B and Class C shares of
the Fund, respectively, plus out of pocket expenses incurred by Investor
Services on behalf of the Fund for proxy mailings. Effective January 1, 1995,
Class A and Class B shares will pay transfer agent fees based on transaction
volume and the number of shareholder accounts.

<PAGE>
NOTES TO FINANCIAL STATEMENTS

John Hancock Funds - Growth Fund

Messrs. Edward J. Boudreau, Jr., Francis C. Cleary, Jr., (until December
14, 1994) and Richard S. Scipione are directors and/or officers of the Adviser,
and/or its affiliates as well as Trustees of the Fund. John Hancock Mutual Life
Insurance Company owns 400,000 Class A shares of beneficial interest of the
Fund. The compensation of unaffiliated Trustees is borne by the Fund.

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 December 31, 1994, aggregated $74,445,236 and $95,019,524, respectively.
There were no purchases or sales of long-term obligations of the U.S. government
and its agencies during the period ended December 31, 1994.

The cost of investments owned at December 31, 1994 (excluding the corporate
savings account) for federal income tax purposes was $118,108,702. Gross
unrealized appreciation and depreciation of investments aggregated $38,739,795
and $4,887,904, respectively, resulting in net unrealized appreciation of
$33,851,891.

NOTE D --
RECLASSIFICATION OF CAPITAL ACCOUNTS
During the year ended December 31, 1994, the Fund has reclassified the
accumulated net investment loss $986,780 to capital paid-in. This represents the
cumulative amount necessary to report these balances on a tax basis, excluding
certain temporary differences, as of December 31, 1994. Additional adjustments
may be needed in subsequent reporting periods. These reclassifications, which
have no impact on the net asset value of the Fund, are primarily attributable to
certain differences in the computation of distributable income and capital gains
under federal tax rules versus generally accepted accounting principles.

<PAGE>

John Hancock Funds - Growth Fund

REPORT OF ERNST & YOUNG LLP,
INDEPENDENT AUDITORS

To the Trustees and Shareholders of
John Hancock Growth Fund

We have audited the accompanying statement of assets and liabilities of John
Hancock Growth Fund (the "Fund"), one of the portfolios constituting John
Hancock Capital Series, including the schedule of investments, as of December
31, 1994, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period then
ended, and financial highlights for each of the five years in the period then
ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1994, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
John Hancock Growth Fund portfolio of John Hancock Capital Series at December
31, 1994, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and financial
highlights for each of the five years in the period then ended, in conformity
with generally accepted accounting principles.

[SIGNATURE]
/s/ Ernst & Young LLP

Boston, Massachusetts
February 13, 1995

TAX INFORMATION NOTICE (UNAUDITED)

For Federal Income Tax purposes, the following information is furnished with
respect to the distributions of the Fund for its fiscal year ended December 31,
1994.

The Fund designated distributions to shareholders of $1,863,000 as
long-term capital gain dividends. Shareholders were mailed a 1994 U.S. Treasury
Department Form 1099-DIV in January 1995 representing their proportionate share.

With respect to the Fund's ordinary taxable income for the fiscal year
ended December 31, 1994 none of the dividends qualify for the corporate
dividends received deduction.

For specific information on exemption provisions in your state, consult
your local state tax office or your tax adviser.

<PAGE>

PART C.

OTHER INFORMATION

Item 24. Financial Statements and Exhibits

(a) Financial Statements included in the Registration Statement:

John Hancock Growth Fund

Statement of Assets and Liabilities as of December 31, 1994. Statement of
Operations of the year ended December 31, 1994. Statement of changes in Net
Asset for each of the two years ended December 31. Notes to Financial
Statements. Financial Highlights for each of the 10 years ended December
31, 1994. Schedule of Investments as of December 31, 1994.

John Hancock Special Value Fund

Statement of Assets and Liabilities as of December 31, 1994. Statement of
Operations of the period ended December 31, 1994. Statement of changes in
Net Asset for each of the period ended December 31.
Notes to Financial Statements.
Financial Highlights for each of the period ended December 31, 1994.
Schedule of Investments as of December 31, 1994.

(b) Exhibits:

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

Item 25. Persons Controlled by or under Common Control with Registrant

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

Item 26. Number of Holders of Securities

As of April 7, 1995, the number of record holders of shares of Registrant
was as follows:

Title of Class Number of Record Holders
GROWTH FUND

Class A Shares - 20,462
Class B Shares - 912

SPECIAL VALUE FUND

Class A Shares - 841
Class B Shares - 823

Item 27. Indemnification

Section 4.3 of Registrant's Declaration of Trust provides that (i) every
person who is, or has been, a Trustee, officer, employee or agent of the
Trust (including any individual who serves at its request as director,
officer, partner, trustee or the like of another organization in which it
has any interest as a shareholder, creditor or otherwise) shall be
indemnified by the Trust, or by one or more Series thereof if the claim
arises from his or her conduct with respect to only such Series, to the
fullest extent permitted by law against all liability and against all
expenses reasonably incurred or paid by him in connection with any claim,
action, suit or proceeding in which he becomes involved as a party or
otherwise by virtue of his being or having been a Trustee or officer and
against amounts paid or incurred by him in the settlement thereof; and
that (ii) the words "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal, or other,
including appeals), actual or threatened; and the words "liability" and
"expenses" shall include, without limitation, attorneys' fees, costs,
judgments, amounts paid in settlement, fines, penalties and other
liabilities.

However, no indemnification shall be provided to a Trustee or officer (i)
against any liability to the Trust, a Series thereof or the Shareholders
by reason of willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of his office; (ii) with
respect to any matter as to which he shall have been finally adjudicated
not to have acted in good faith in the reasonable belief that his action
was in the best interest of the Trust or a Series thereof; (iii) in the
event of a settlement or other disposition not involving a final
adjudication resulting in a payment by a Trustee or officer, unless there
has been a determination that such Trustee or officer did not engage in
willful misfeasance, bad faith, gross negligence or reckless disregard of
the duties involved in the conduct of his office by (A) a court by (B) a
majority of the Noninterested trustees or independent legal counsel, or
(C) a vote of the majority of the Fund's outstanding shares.

The rights of indemnification may be insured against by policies
maintained by the Trust, shall be severable, shall not affect any other
rights to which any Trustee or officer may now or hereafter be entitled,
shall continue as to a person who has ceased to be such Trustee or officer
and shall inure to the benefit of the heirs, executors, administrators and
assigns of such a person. Nothing contained herein shall affect any rights
to indemnification to which personnel of the Trust or any Series thereof
other than Trustees and officers may be entitled by contract or otherwise
under law.

Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding may be advanced by the Trust or a Series
thereof before final disposition, if the recipient undertakes to repay the
amount if it is ultimately determined that he is not entitled to
indemnification, provided that either:

(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust or
Series thereof shall be insured against losses arising out of any
such advances; or (ii) a majority of the Non-interested Trustees
acting on the matter (provided that a majority of the Non-interested
Trustees act on the matter) or an independent legal counsel in a
written opinion shall determine, based upon a review of readily
available facts (as opposed to a full trial-type inquiry), that
there is reason to believe that the recipient ultimately will be
found entitled to indemnification.

For purposes of indemnification Non-interested Trustee" is one who
(i) is not an "Interested Person" of the Trust (including anyone who
has been exempted from being an "Interested Person" by any rule,
regulation or order of the Commission), and (ii) is not involved in
the claim, action, suit or proceeding.

(b) Under the Distribution Agreement. Under Section 12 of the
Distribution Agreement, John Hancock Funds, Inc. ("John Hancock Funds" ) has
agreed to indemnify the Registrant and its Trustees, officers and controlling
persons against claims arising out of certain acts and statements of John
Hancock Funds.

Section 9(a) of the By-Laws of the Insurance Company provides, in effect,
that the Insurance Company will, subject to limitations of law, indemnify each
present and former director, officer and employee of the of the Insurance
Company who serves as a Trustee or officer of the Registrant at the direction or
request of the Insurance Company against litigation expenses and liabilities
incurred while acting as such, except that such indemnification does not cover
any expense or liability incurred or imposed in connection with any matter as to
which such person shall be finally adjudicated not to have acted in good faith
in the reasonable belief that his action was in the best interests of the
Insurance Company. In addition, no such person will be indemnified by the
Insurance Company in respect of any liability or expense incurred in connection
with any matter settled without final adjudication unless such settlement shall
have been approved as in the best interests of the Insurance Company either by
vote of the Board of Directors at a meeting composed of directors who have no
interest in the outcome of such vote, or by vote of the policyholders. The
Insurance Company may pay expenses incurred in defending an action or claim in
advance of its final disposition, but only upon receipt of an undertaking by the
person indemnified to repay such payment if he should be determined to be
entitled to indemnification.

Article IX of the respective By-Laws of John Hancock Funds and the Adviser
provide as follows:

"Section 9.01. Indemnity: Any person made or threatened to be made a party to
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was at any time since the
inception of the Corporation a serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall be indemnified by the Corporation
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and the liability was not
incurred by reason of gross negligence or reckless disregard of the duties
involved in the conduct of his office, and expenses in connection therewith may
be advanced by the Corporation, all to the full extent authorized by the law."

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

Insofar as indemnification for liabilities under the Securities Act of 1933 (the
"Act") may be permitted to Trustees, officers and controlling persons of
Registrant pursuant to the Registrant's Amended and Restated Articles of
Incorporation, Article 10.1 of the Registrant's By-Laws, The Underwriting
Agreement, the By-Laws of John Hancock Funds, the Adviser, or the Insurance
Company or otherwise, Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such Trustee, officer or controlling person in connection with the
securities being registered, Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

Item 28. Business and Other Connections of Investment Advisers

For information as to the business, profession, vocation or employment of
a substantial nature of each of the officers and Directors of the Investment
Adviser, reference is made to Forms ADV (801-8124) filed under the Investment
Advisers Act of 1940, herein incorporated by reference.

Item 29. Principal Underwriters

(a) John Hancock Funds acts as principal underwriter for the Registrant and also
serves as principal underwriter or distributor of shares for John Hancock Cash
Reserve, Inc., John Hancock Bond Fund, John Hancock Capital Growth Fund, John
Hancock Current Interest, John Hancock Special Series, Inc., John Hancock
Tax-Free Bond Fund, John Hancock California Tax-Free Income Fund, John Hancock
Capital Series, John Hancock Limited-Term Government Fund, John Hancock
Tax-Exempt Income Fund, John Hancock Sovereign Investors Fund, Inc., John
Hancock Cash Management Fund, John Hancock Special Equities Fund, John Hancock
Sovereign Bond Fund, John Hancock Tax-Exempt Series, John Hancock Strategic
Series, John Hancock Technology Series, Inc. and John Hancock World Fund, John
Hancock Investment Trust, John Hancock Institutional Series Trust, Freedom
Investment Trust, Freedom Investment Trust II and Freedom Investment Trust III.

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

<PAGE>

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

Edward J. Boudreau, Jr. Chairman Chairman
101 Huntington Avenue
Boston, Massachusetts

Robert H. Watts Director and Senior None
John Hancock Place Vice President
P.O. Box 111
Boston, Massachusetts

C. Troy Shaver, Jr. President, Chief None
101 Huntington Avenue Executive Officer and
Boston, Massachusetts Director

Robert G. Freedman Director Vice President, Chief
101 Huntington Avenue Investment Officer
Boston, Massachusetts

Stephen M. Blair Executive Vice None
101 Huntington Avenue President-
Boston, Massachusetts Sales

Thomas H. Drohan Senior Vice President Senior Vice President
101 Huntington Avenue and
Boston, Massachusetts Secretary

James W. McLaughlin Senior Vice President None
101 Huntington Avenue and
Boston, Massachusetts Chief Financial Officer

David A. King Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts

James B. Little Senior Vice President Senior Vice President
101 Huntington Avenue and
Boston, Massachusetts Chief Financial Officer

<PAGE>

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

William S. Nichols Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts

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

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

Christopher M. Meyer Treasurer None
101 Huntington Avenue
Boston, Massachusetts

Stephen L. Brown Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

Thomas E. Moloney Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

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

Richard S. Scipione Director Trustee
John Hancock Place
P.O. Box 111
Boston, Massachusetts

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

Richard O. Hansen Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts

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

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

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

Hugh A. Dunlap, Jr. Director
101 Huntington Avenue
Boston, Massachusetts

James V. Bowhers Executive Vice
101 Huntington Avenue President
Boston, Massachusetts

Item 30. Location of Accounts and Records

Registrant maintains the records required to be maintained by it under
Rules 31a-1 (a), 31a-a(b), and 31a-2(a) under the Investment Company Act
of 1940 as its principal executive offices at 101 Huntington Avenue,
Boston Massachusetts 02199-7603. Certain records, including records
relating to Registrant's shareholders and the physical possession of its
securities, may be maintained pursuant to Rule 31a-3 at the main office of
Registrant's Transfer Agent and Custodian.

Item 31. Management Services

Not applicable.

<PAGE>

Item 32. Undertakings

(a) Registrant undertakes to comply with Section 16(c) of the Investment
Company Act of 1940, as amended which relates to the assistance to be rendered
to shareholders by the Trustees of the Trust in calling a meeting of
shareholders for the purpose of voting upon the question of the removal of a
trustee.

(b) Not applicable.

(c) Registrant hereby undertakes to furnish each person to whom a
prospectus with respect to a series of the Registrant is delivered with a
copy of the latest annual report to shareholders with respect to that
series upon request and without charge.

<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) unless the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Boston, and the Commonwealth of Massachusetts on the
24th day of April, 1995.

JOHN HANCOCK CAPITAL SERIES

By:
Edward J. Boudreau, Jr.
Chairman

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

Signature Title Date

* Chairman April 24, 1995
- -----------------------
Edward J. Boudreau, Jr. (Principal Executive Officer)

/s/James B. Little
- -----------------------
James B. Little Senior Vice President and Chief April 24, 1995
Financial Officer (Principal
Financial and Accounting Officer)

* Trustee April 24, 1995
- ----------------------
Dennis S. Aronowitz

* Trustee April 24, 1995
- ----------------------
Richard P. Chapman

* Trustee April 24, 1995
- ----------------------
William J. Cosgrove.

<PAGE>

Signature Title Date

* Trustee April 24, 1995
- --------------------
Gail D. Fosler

* Trustee April 24, 1995
- -------------------
Bayard Henry

* Trustee April 24, 1995
- --------------------
Richard S. Scipione

* Trustee April 24, 1995
- --------------------
Edward J. Spellman

*By: /s/Thomas H. Drohan April 24, 1995
--------------------
Thomas H. Drohan,
Attorney-in-Fact

<PAGE>
EXHIBIT INDEX

Exhibit No. Exhibit Description Page Number

99.B1 Amended and Restated Declaration of Trust of Registrant
dated February 28, 1992

99.B1.1 Amendment to Declaration of Trust dated September 14, 1993.

99.B2 Amended and Restated By-Laws of Registrant as adopted on
December 8, 1993.

99.B2.1 Amendment to By -Laws dated December 13, 1994.

99.B4 Specimen share certificate for the Registrant

99.B5 Investment Management Contract between Registrant and John Hancock
Advisers, Inc. dated January 1, 1994.

99.B5.1 Sub-Investment Management Contract between Registrant and NM Capital
Management Inc.

99.B6 Distribution Agreement with Registrant and John Hancock Broker
Distribution Services, Inc. dated August 1, 1991

99.B6.1 Amendment No. 1 to Distribution Agreement with Registrant and John
Hancock Broker Distribution Services, Inc.

99.B6.2 Form of Soliciting Dealer Agreement between John Hancock Broker
Distribution Services, Inc. and Selected Dealers.

99.B6.3 Form of Financial Institution Sales and Service Agreement.

99.B7 None

99.B8 Master Custodian Agreement between John Hancock Mutual Funds and
Investors Bank and Trust Company dated December 15, 1992.

99.B9 Transfer Agency Agreement between Registrant and John Hancock Fund
Services, Inc. dated January 1, 1991.

99.B9.1 Amendment No.1 to Transfer Agency and Service Agreement between
Registrant and John Hancock Fund Services, Inc. dated October
1, 1993.

99.B10 Rule 24(e) opinion.

99.B11 Auditor's Consent.

99.B12 Financial Statement of the John Hancock Growth Fund for the fiscal
year ended December 31, 1994 included in Parts A and B.

99.B12.1 Financial Statement of the John Hancock Special Value Fund for the
fiscal year ended December 31, 1994 included in Parts A and B.

99.B13 None

99.B14 None

99.B15 Class A Distribution Plan between John Hancock Growth Fund and John
Hancock Broker Services, Inc.

99.B15.1 Class B Distribution Plan between John Hancock Growth Fund and John
Hancock Broker Services, Inc.

99.B15.2 Class A Distribution Plan between John Hancock Special Value Fund
and John Hancock Broker Services, Inc.

99.B15.3 Class B Distribution Plan between John Hancock Special Value Fund
and John Hancock Broker Services, Inc.

99.B.16 Schedule for Computation of Yield and Total Return.

99.B.17 Powers of Attorney dated December 13, 1984, April 23, 1988, April
23, 1987, November 15, 1988, May 17, 1988, October 23, 1990,
October 15, 1991, January 1 1994.

99.27.1A Growth Fund
99.27.2B Growth Fund
99.27.3C Growth Fund
99.27.4A Special Value
99.27.5B Special Value

Amended and Restated
Declaration of Trust

John Hancock Growth Fund

101 Huntington Avenue
Massachusetts
02199-7603

Dated February 28, 1992

<PAGE>

Table of Contents

Page

ARTICLE I - NAME AND DEFINITIONS.....................................1
Section 1.1. Name...................................................1
Section 1.2. Definitions............................................1

ARTICLE II - TRUSTEES................................................3
Section 2.1. General Powers.........................................3
Section 2.2. Investments............................................3
Section 2.3. Legal Title............................................4
Section 2.4. Issuance and Repurchase of Shares......................4
Section 2.5. Delegation; Committees.................................4
Section 2.6. Collection and Payment.................................4
Section 2.7. Expenses...............................................5
Section 2.8. Manner of Acting; By-laws..............................5
Section 2.9. Miscellaneous Powers...................................5
Section 2.10. Principal Transactions................................5
Section 2.11. Litigation............................................5
Section 2.12. Number of Trustees....................................6
Section 2.13. Election and Term.....................................6
Section 2.14. Resignation and Removal...............................6
Section 2.15. Vacancies.............................................6
Section 2.16. Delegation of Power to Other Trustees.................6

ARTICLE III - CONTRACTS..............................................7
Section 3.1. Distribution Contract..................................7
Section 3.2. Advisory or Management Contract........................7
Section 3.3. Administration Agreement...............................7
Section 3.4. Service Agreement......................................7
Section 3.5. Transfer Agent.........................................7
Section 3.6. Custodian..............................................7
Section 3.7. Affiliations of Trustees or Officers, Etc..............8
Section 3.8. Compliance with 1940 Act...............................8

ARTICLE IV - LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS..................................................8
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc...8
Section 4.2. Non-Liability of Trustees, Etc.........................9
Section 4.3. Mandatory Indemnification..............................9
Section 4.4. No Bond Required of Trustees...........................10
Section 4.5. No Duty of Investigation; Notice in Trust
Instruments, Etc......................................10
Section 4.6. Reliance on Experts, Etc...............................10

ARTICLE V - SHARES OF BENEFICIAL INTEREST............................11
Section 5.1. Beneficial Interest....................................11
Section 5.2. Rights of Shareholders.................................11
Section 5.3. Trust Only.............................................11
Section 5.4. Issuance of Shares.....................................11
Section 5.6. Transfer of Shares.....................................12
Section 5.7. Notices................................................12
Section 5.8. Treasury Shares........................................12
Section 5.9. Voting Powers..........................................12
Section 5.10. Meetings of Shareholders..............................12
Section 5.11. Series or Class Designation...........................13
Section 5.12. Assent to Declaration of Trust........................15

ARTICLE VI - REDEMPTION AND REPURCHASE OF SHARES.....................15
Section 6.1. Redemption of Shares...................................15
Section 6.2. Price..................................................15
Section 6.3. Payment................................................15
Section 6.4. Effect of Suspension of Determination of
Net Asset Value.......................................16
Section 6.5. Repurchase by Agreement................................16
Section 6.6. Redemption of Shareholder's Interest...................16
Section 6.7. Redemption of Shares in Order to Qualify
as Regulated Investment Company;Disclosure of Holding.16
Section 6.8. Reductions in Number of Outstanding Shares
Pursuant to Net Asset Value Formula...................16
Section 6.9. Suspension of Right of Redemption......................16

ARTICLE VII - DETERMINATION OF NET ASSET VALUE, NET INCOME AND
DISTRIBUTIONS........................................................17
Section 7.1. Net Asset Value........................................17
Section 7.2. Distributions to Shareholders..........................17
Section 7.3. Determination of Net Income; Constant Net Asset
Value; Reduction of Outstanding Shares................18
Section 7.4. Power to Modify Foregoing Procedures...................18

ARTICLE VIII - DURATION; TERMINATION OF TRUST OR A SERIES OR CLASS;
AMENDMENT; MERGERS, ETC..............................................18
Section 8.1. Duration...............................................18
Section 8.2. Termination of the Trust or a Series or a Class........18
Section 8.3. Amendment Procedure....................................19
Section 8.4. Merger, Consolidation and Sale of Assets...............20
Section 8.5. Incorporation..........................................20

ARTICLE IX - REPORTS TO SHAREHOLDERS.................................20

ARTICLE X - MISCELLANEOUS............................................20
Section 10.1. Execution and Filing..................................20
Section 10.2. Governing Law.........................................21
Section 10.3. Counterparts..........................................21
Section 10.4. Reliance by Third Parties.............................21

<PAGE>

Amended and Restated
Declaration of Trust

John Hancock Growth Fund
Dated February 28, 1992

DECLARATION OF TRUST made this 28th day of February, 1992 by
____________________ (together with all other persons from time to time
duly elected, qualified and serving
as Trustees
in accordance with the provisions of Article II hereof, the "Trustees");
WHEREAS, pursuant to a Declaration of Trust dated October 5, 1984 the Trustees
established a trust for the investment and reinvestment of funds
contributed thereto;
WHEREAS, said Declaration of Trust provides that the beneficial interest in the
trust assets be divided into transferable shares of beneficial interest;
WHEREAS, said Declaration of Trust provides that all money and property
contributed to the trust established thereunder shall be held and managed
in trust for the benefit of the holders, from time to time, of the shares
of beneficial interest issued thereunder and subject to the provisions
thereof; and
WHEREAS, the Trustees desire to amend and restate said Declaration of Trust in
its entirety, as hereinafter provided;
NOW, THEREFORE, the undersigned, being a majority of the Trustees of the Trust,
hereby amend and restate the Declaration of Trust in its entirety, as
follows:

ARTICLE I
NAME AND DEFINITIONS

Section 1.1. Name. The name of the trust created hereby is "John Hancock
Growth Fund" (the "Trust").

Section 1.2. Definitions. Wherever they are used herein, the following terms
have the following respective meanings:

(a) "Administrator" means the party, other than the Trust, to the contract
described in Section 3.3 hereof.

(b) "By-laws" means the By-laws referred to in Section 2.8 hereof, as from
time to time amended.

(c) "Class" means any division of shares within a Series, which Class is
or has been established within such Series in accordance with the
provisions of Article V. The three initial Classes of Shares established
and designated in Section 5.11 hereof are: "Class A"; "Class B"; and
"Class C."

(d) The terms "Commission" and "Interested Person" have the meanings given
them in the 1940 Act. Except as such term may be otherwise defined by the
Trustees in conjunction with the establishment of any Series of Shares,
the term "vote of a majority of the Shares outstanding and entitled to
vote" shall have the same meaning as is assigned to the term "vote of a
majority of the outstanding voting securities" in the 1940 Act.

(e) "Custodian" means any Person other than the Trust who has custody of
any Trust Property as required by Section 17(f) of the 1940 Act, but does
not include a system for the central
handling of securities described in said Section 17(f).

(f) "Declaration" means this Declaration of Trust as amended from time to
time. Reference in this Declaration of Trust to "Declaration," "hereof,"
"herein," and "hereunder" shall be deemed to refer to this Declaration
rather than exclusively to the article or section in which such words
appear.

(g) "Distributor" means the party, other than the Trust, to the contract
described in Section 3.1 hereof.

(h) "Fund" or "Funds," individually or collectively, means the separate
Series of Shares of the Trust, together with the assets and liabilities
assigned thereto.

(i) "Fundamental Restrictions" means the investment restrictions set forth
in the Prospectus and Statement of Additional Information and designated
as fundamental restrictions therein.

(j) "His" shall include the feminine and neuter, as well as the
masculine, genders.

(k) "Investment Adviser" means the party, other than the Trust, to the
contract described in Section 3.2 hereof.

(l) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.

(m) "Person" means and includes individuals, corporations, partnerships,
trusts, associations, joint ventures and other entities, whether or not
legal entities, and governments and agencies and political subdivisions
thereof.

(n) "Prospectus" means the Prospectus and Statement of Additional
Information included in the Registration Statement of the Trust under the
Securities Act of 1933 as such Prospectus and Statement of Additional
Information may be amended or supplemented and filed with the
Commission from time to time.

(o) "Series" individually or collectively means the separately managed
component(s) of the Trust (or, if the Trust shall have only one such
component, then that one) as may be established and designated from time
to time by the Trustees pursuant to Section 5.11 hereof.

(p) "Shareholder" means a record owner of Outstanding Shares.

(q) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series or of any Class within any
Series (as the context may require) which may be established by the
Trustees, and includes fractions of Shares as well as whole Shares.
"Outstanding" Shares means those Shares shown from time to time on the
books of the Trust or its Transfer Agent as then issued and outstanding,
but shall not include Shares which have been redeemed or repurchased by
the Trust and which are at the time held in the treasury of the Trust.

(r) "Transfer Agent" means any Person other than the Trust who maintains
the Shareholder records of the Trust, such as the list of Shareholders,
the number of Shares credited to each account, and the like.

(s) "Trust" means John Hancock Growth Fund.

(t) The "Trustees" means the persons who have signed this Declaration, so
long as they shall continue in office in accordance with the terms hereof,
and all other persons who now serve or may from time to time be duly
elected, qualified and serving as Trustees in accordance with the
provisions of Article II hereof, and reference herein to a Trustee or the
Trustees shall refer to such person or persons in this capacity or their
capacities as trustees hereunder.

(u) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of
the Trust or the Trustees, including any and all assets of or allocated to
any Series or Class, as the context may require.

ARTICLE II
TRUSTEES

Section 2.1. General Powers. The Trustees shall have exclusive and absolute
control over the Trust Property and over the business of the Trust to the
same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may
be permitted by this Declaration. The Trustees shall have power to conduct
the business of the Trust and carry on its operations in any and all of
its branches and maintain offices both within and without the Commonwealth
of Massachusetts, in any and all states of the United States of America,
in the District of Columbia, and in any and all commonwealths,
territories, dependencies, colonies, possessions, agencies or
instrumentalities of the United States of America and of foreign
governments, and to do all such other things and execute all such
instruments as they deem necessary, proper or desirable in order to
promote the interests of the Trust although such things are not herein
specifically mentioned. Any determination as to what is in the interests
of the Trust made by the Trustees in good faith shall be conclusive. In
construing the provisions of this Declaration, the presumption shall be in
favor of a grant of power to the Trustees. The enumeration of any specific
power herein shall not be construed as limiting the aforesaid powers. Such
powers of the Trustees may be exercised without order of or resort to any
court.

Section 2.2. Investments. The Trustees shall have the power:

(a) To operate as and carry on the business of an investment company, and
exercise all the powers necessary and appropriate to the conduct of such
operations.

(b) To invest in, hold for investment, or reinvest in, cash; securities,
including common, preferred and preference stocks; warrants; subscription
rights; profit-sharing interests or participations and all other contracts
for or evidence of equity interests; bonds, debentures, bills, time notes
and all other evidences of indebtedness; negotiable or non-negotiable
instruments; government securities, including securities of any state,
municipality or other political subdivision thereof, or any governmental
or quasi-governmental agency or instrumentality; and money market
instruments including bank certificates of deposit, finance paper,
commercial paper, bankers' acceptances and all kinds of repurchase
agreements, of any corporation, company, trust, association, firm or other
business organization however established, and of any country, state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality; and the Trustees shall be
deemed to have the foregoing powers with respect to any additional
securities in which the Trust may invest should the Fundamental
Restrictions be amended.

(c) To acquire (by purchase, subscription or otherwise), to hold, to trade
in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any such securities,
to enter into repurchase agreements, reverse repurchase agreements, firm
commitment agreements, and forward foreign currency exchange contracts, to
purchase and sell options on securities, indices, currency or other
financial assets, futures contracts and options on futures contracts of
all descriptions and to engage in all types of hedging and risk management
transactions.

(d) To exercise all rights, powers and privileges of ownership or interest
in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with
respect thereto and to do all acts for the preservation, protection,
improvement and enhancement in value of all such securities and repurchase
agreements.

(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real
or personal, including cash or foreign currency, and any interest therein.

(f) To borrow money and in this connection issue notes or other evidence
of indebtedness; to secure borrowings by mortgaging, pledging or otherwise
subjecting as security the Trust Property; and to endorse, guarantee, or
undertake the performance of any obligation or engagement of any other
Person and to lend Trust Property.

(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in
the Trust Property or in the affairs of which the Trustees have any direct
or indirect interest; to do all acts and things designed to protect,
preserve, improve or enhance the value of such obligation or interest; and
to guarantee or become surety on any or all of the contracts, stocks,
bonds, notes, debentures and other obligations of any such corporation,
company, trust, association or firm.

(h) To enter into a plan of distribution and any related agreements
whereby the Trust may finance directly or indirectly any activity which is
primarily intended to result in sale of Shares.

(i) To adopt on behalf of the Trust or any Series thereof an alternative
purchase plan providing for the issuance of multiple Classes of Shares (as
authorized herein at Section 5.11), such Shares being differentiated on
the basis of purchase method and allocation of distribution expenses.

(j) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary,
suitable or proper for the accomplishment of any purpose or the attainment
of any object or the furtherance of any power hereinbefore set forth,
either alone or in association with others, and to do every other act or
thing incidental or appurtenant to or arising out of or connected with the
aforesaid business or purposes, objects or powers. The foregoing clauses
shall be construed both as objects and powers, and the foregoing
enumeration of specific powers shall not be held to limit or restrict in
any manner the general powers of the Trustees. The Trustees shall not be
limited to investing in obligations maturing before the possible
termination of the Trust, nor shall the Trustees be limited by any law
limiting the investments which may be made by fiduciaries.

Section 2.3. Legal Title. Legal title to all the Trust Property shall be vested
in the Trustees as joint tenants except that the Trustees shall have power
to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust or any Series of
the Trust, or in the name of any other Person as nominee, on such terms as
the Trustees may determine, provided that the interest of the Trust
therein is deemed appropriately protected. The right, title and interest
of the Trustees in the Trust Property and the Property of each Series of
the Trust shall vest automatically in each Person who may hereafter become
a Trustee. Upon the termination of the term of office, resignation,
removal or death of a Trustee he shall automatically cease to have any
right, title or interest in any of the Trust Property, and the right,
title and interest of such Trustee in the Trust Property shall vest
automatically in the remaining Trustees. Such vesting and cessation of
title shall be effective whether or not conveyancing documents have been
executed and delivered.

Section 2.4. Issuance and Repurchase of Shares. The Trustees shall have the
power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares and,
subject to the provisions set forth in Articles VI and VII and Section
5.11 hereof, to apply to any such repurchase, redemption, retirement,
cancellation or acquisition of Shares any funds or property of the Trust,
whether capital or surplus or otherwise, to the full extent now or
hereafter permitted by the laws of the Commonwealth of Massachusetts
governing business corporations.

Section 2.5. Delegation; Committees. The Trustees shall have power, consistent
with their continuing exclusive authority over the management of the Trust
and the Trust Property, to delegate from time to time to such of their
number or to officers, employees or agents of the Trust the doing of such
things and the execution of such instruments either in the name of the
Trust or any Series of the Trust or the names of the Trustees or otherwise
as the Trustees may deem expedient, to the same extent as such delegation
is permitted by the 1940 Act.

Section 2.6. Collection and Payment. Subject to Section 5.11 hereof, the
Trustees shall have power to collect all property due to the Trust; to pay
all claims, including taxes, against the Trust Property; to prosecute,
defend, compromise or abandon any claims relating to the Trust Property;
to foreclose any security interest securing any obligations, by virtue of
which any property is owed to the Trust; and to enter into releases,
agreements and other instruments.

Section 2.7. Expenses. Subject to Section 5.11 hereof, the Trustees shall have
the power to incur and pay any expenses which in the opinion of the
Trustees are necessary or incidental to carry out any of the purposes of
this Declaration, and to pay reasonable compensation from the funds of the
Trust to themselves as Trustees. The Trustees shall fix the compensation
of all officers, employees and Trustees.

Section 2.8. Manner of Acting; By-Laws. Except as otherwise provided herein or
in the By-laws, any action to be taken by the Trustees may be taken by a
majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone
circuit or similar communications equipment by means of which all persons
participating in the meeting can hear each other, or by written consents
of the entire number of Trustees then in office. The Trustees may adopt
By-laws not inconsistent with this Declaration to provide for the conduct
of the business of the Trust and may amend or repeal such By-laws to the
extent such power is not reserved to the Shareholders. Notwithstanding the
foregoing provisions of this Section 2.8 and in addition to such
provisions or any other provision of this Declaration or of the By-laws,
the Trustees may by resolution appoint a committee consisting of less than
the whole number of Trustees then in office, which committee may be
empowered to act for and bind the Trustees and the Trust, as if the acts
of such committee were the acts of all the Trustees then in office, with
respect to the institution, prosecution, dismissal, settlement, review or
investigation of any action, suit or proceeding which shall be pending or
threatened to be brought before any court, administrative agency or other
adjudicatory body.

Section 2.9. Miscellaneous Powers. Subject to Section 5.11 hereof, the Trustees
shall have the power to: (a) employ or contract with such Persons as the
Trustees may deem desirable for the transaction of the business of the
Trust or any Series thereof; (b) enter into joint ventures, partnerships
and any other combinations or associations; (c) remove Trustees or fill
vacancies in or add to their number, elect and remove such officers and
appoint and terminate such agents or employees as they consider
appropriate, and appoint from their own number, and terminate, any one or
more committees which may exercise some or all of the power and authority
of the Trustees as the Trustees may determine; (d) purchase, and pay for
out of Trust Property or the Property of the appropriate Series of the
Trust, insurance policies insuring the Shareholders, Trustees, officers,
employees, agents, investment advisers, administrators, distributors,
selected dealers or independent contractors of the Trust against all
claims arising by reason of holding any such position or by reason of any
action taken or omitted by any such Person in such capacity, whether or
not constituting negligence, or whether or not the Trust would have the
power to indemnify such Person against such liability; (e) establish
pension, profit-sharing, share purchase, and other retirement, incentive
and benefit plans for any Trustees, officers, employees and agents of the
Trust; (f) to the extent permitted by law, indemnify any person with whom
the Trust or any Series thereof has dealings, including the Investment
Adviser, Administrator, Distributor, Transfer Agent and selected dealers,
to such extent as the Trustees shall determine; (g) guarantee indebtedness
or contractual obligations of others; (h) determine and change the fiscal
year of the Trust or any Series thereof and the method by which its
accounts shall be kept; and (i) adopt a seal for the Trust, but the
absence of such seal shall not impair the validity of any instrument
executed on behalf of the Trust.

Section 2.10. Principal Transactions. Except in transactions not permitted by
the 1940 Act or rules and regulations adopted by the Commission, the
Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust or any Series thereof to
any Trustee or officer of the Trust or any firm of which any such Trustee
or officer is a member acting as principal, or have any such dealings with
the Investment Adviser, Distributor or Transfer Agent or with any
Interested Person of such Person; and the Trust or a Series thereof may
employ any such Person, or firm or company in which such Person is an
Interested Person, as broker, legal counsel, registrar, transfer agent,
dividend disbursing agent or custodian upon customary terms.

Section 2.11. Litigation. The Trustees shall have the power to engage in and to
prosecute, defend, compromise, abandon, or adjust by arbitration, or
otherwise, any actions, suits, proceedings, disputes, claims, and demands
relating to the Trust, and out of the assets of the Trust or any Series
thereof to pay or to satisfy any debts, claims or expenses incurred in
connection therewith, including those of litigation, and such power shall
include without limitation the power of the Trustees or any appropriate
committee thereof, in the exercise of their or its good faith business
judgment, to dismiss any action, suit, proceeding, dispute, claim, or
demand, derivative or otherwise, brought by any person, including a
Shareholder in its own name or the name of the Trust, whether or not the
Trust or any of the Trustees may be named individually therein or the
subject matter arises by reason of business for or on behalf of the Trust.

Section 2.12. Number of Trustees. The number of Trustees shall be such number as
shall be fixed from time to time by a written instrument signed by a
majority of the Trustees, provided, however, that the number of Trustees
shall in no event be less than two (2) nor more than fifteen (15).

Section 2.13. Election and Term. Except for the Trustees named herein or
appointed to fill vacancies pursuant to Section 2.15 hereof, the Trustees
may succeed themselves and shall be elected by the Shareholders owning of
record a plurality of the Shares voting at a meeting of Shareholders on a
date fixed by the Trustees. Except in the event of resignations or
removals pursuant to Section 2.14 hereof, each Trustee shall hold office
until such time as less than a majority of the Trustees holding office
have been elected by Shareholders. In such event the Trustees then in
office will call a Shareholders' meeting for the election of Trustees.
Except for the foregoing circumstances, the Trustees shall continue to
hold office and may appoint successor Trustees.

Section 2.14. Resignation and Removal. Any Trustee may resign his trust (without
the need for any prior or subsequent accounting) by an instrument in
writing signed by him and delivered to the other Trustees and such
resignation shall be effective upon such delivery, or at a later date
according to the terms of the instrument. Any of the Trustees may be
removed (provided the aggregate number of Trustees after such removal
shall not be less than two) with cause, by the action of two-thirds of the
remaining Trustees or by action of two-thirds of the outstanding Shares of
the Trust (for purposes of determining the circumstances and procedures
under which any such removal by the Shareholders may take place, the
provisions of Section 16(c) of the 1940 Act shall be applicable to the
same extent as if the Trust were subject to the provisions of that
Section). Upon the resignation or removal of a Trustee, or his otherwise
ceasing to be a Trustee, he shall execute and deliver such documents as
the remaining Trustees shall require for the purpose of conveying to the
Trust or the remaining Trustees any Trust Property held in the name of the
resigning or removed Trustee. Upon the incapacity or death of any Trustee,
his legal representative shall execute and deliver on his behalf such
documents as the remaining Trustees shall require as provided in the
preceding sentence.

Section 2.15. Vacancies. The term of office of a Trustee shall terminate and a
vacancy shall occur in the event of his death, retirement, resignation,
removal, bankruptcy, adjudicated incompetence or other incapacity to
perform the duties of the office of a Trustee. No such vacancy shall
operate to annul the Declaration or to revoke any existing agency created
pursuant to the terms of the Declaration. In the case of an existing
vacancy, including a vacancy existing by reason of an increase in the
number of Trustees, subject to the provisions of Section 16(a) of the 1940
Act, the remaining Trustees shall fill such vacancy by the appointment of
such other person as they in their discretion shall see fit, made by a
written instrument signed by a majority of the Trustees then in office.
Any such appointment shall not become effective, however, until the person
named in the written instrument of appointment shall have accepted in
writing such appointment and agreed in writing to be bound by the terms of
the Declaration. An appointment of a Trustee may be made in anticipation
of a vacancy to occur at a later date by reason of retirement, resignation
or increase in the number of Trustees, provided that such appointment
shall not become effective prior to such retirement, resignation or
increase in the number of Trustees. Whenever a vacancy in the number of
Trustees shall occur, until such vacancy is filled as provided in this
Section 2.15, the Trustees in office, regardless of their number, shall
have all the powers granted to the Trustees and shall discharge all the
duties imposed upon the Trustees by the Declaration. A written instrument
certifying the existence of such vacancy signed by a majority of the
Trustees in office shall be conclusive evidence of the existence of such
vacancy.

Section 2.16. Delegation of Power to Other Trustees. Any Trustee may, by power
of attorney, delegate his power for a period not exceeding six (6) months
at any one time to any other Trustee or Trustees; provided that in no case
shall fewer than two (2) Trustees personally exercise the powers granted
to the Trustees under this Declaration except as herein otherwise
expressly provided.

ARTICLE III
CONTRACTS

Section 3.1. Distribution Contract. The Trustees may in their discretion from
time to time enter into an exclusive or non-exclusive distribution
contract or contracts providing for the sale of the Shares to net the
Trust or the applicable Series of the Trust not less than the amount
provided for in Section 7.1 of Article VII hereof, whereby the Trustees
may either agree to sell the Shares to the other party to the contract or
appoint such other party as their sales agent for the Shares, and in
either case on such terms and conditions, if any, as may be prescribed in
the By-laws, and such further terms and conditions as the Trustees may in
their discretion determine not inconsistent with the provisions of this
Article III or of the By-laws; and such contract may also provide for the
repurchase of the Shares by such other party as agent of the Trustees.

Section 3.2. Advisory or Management Contract. Subject to approval by a vote of a
majority of Shares outstanding and entitled to vote, the Trustees may in
their discretion from time to time enter into one or more investment
advisory or management contracts or, if the Trustees establish multiple
Series, separate investment advisory or management contracts with respect
to one or more Series whereby the other party or parties to any such
contracts shall undertake to furnish the Trust or such Series management,
investment advisory, administration, accounting, legal, statistical and
research facilities and services, promotional or marketing activities, and
such other facilities and services, if any, as the Trustees shall from
time to time consider desirable and all upon such terms and conditions as
the Trustees may in their discretion determine. Notwithstanding any
provisions of the Declaration, the Trustees may authorize the Investment
Advisers, or any of them, under any such contracts (subject to such
general or specific instructions as the Trustees may from time to time
adopt) to effect purchases, sales, loans or exchanges of portfolio
securities and other investments of the Trust on behalf of the Trustees or
may authorize any officer, employee or Trustee to effect such purchases,
sales, loans or exchanges pursuant to recommendations of such Investment
Advisers, or any of them (and all without further action by the Trustees).
Any such purchases, sales, loans and exchanges shall be deemed to have
been authorized by all of the Trustees. The Trustees may, in their sole
discretion, call a meeting of Shareholders in order to submit to a vote of
Shareholders at such meeting the approval or continuance of any such
investment advisory or management contract. If the Shareholders of any one
or more of the Series of the Trust should fail to approve any such
investment advisory or management contract, the Investment Adviser may
nonetheless serve as Investment Adviser with respect to any Series whose
Shareholders approve such contract.

Section 3.3. Administration Agreement. The Trustees may in their discretion from
time to time enter into an administration agreement or, if the Trustees
establish multiple Series or Classes separate administration agreements
with respect to each Series or Class, whereby the other party to such
agreement shall undertake to manage the business affairs of the Trust or
of a Series or Class thereof of the Trust and furnish the Trust or a
Series or a Class thereof with office facilities, and shall be responsible
for the ordinary clerical, bookkeeping and recordkeeping services at such
office facilities, and other facilities and services, if any, and all upon
such terms and conditions as the Trustees may in their discretion
determine.

Section 3.4. Service Agreement. The Trustees may in their discretion from time
to time enter into Service Agreements with respect to one or more Series
or Classes of Shares whereby the other parties to such Service Agreements
will provide administration and/or support services pursuant to
Administration Plans and Service Plans, and all upon such terms and
conditions as the Trustees in their discretion may determine.

Section 3.5. Transfer Agent. The Trustees may in their discretion from time to
time enter into a transfer agency and shareholder service contract whereby
the other party to such contract shall undertake to furnish transfer
agency and shareholder services to the Trust. The contract shall have such
terms and conditions as the Trustees may in their discretion determine not
inconsistent with the Declaration. Such services may be provided by one or
more Persons.

Section 3.6. Custodian. The Trustees may appoint or otherwise engage one or more
banks or trust companies, each having an aggregate capital, surplus and
undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000) to serve as Custodian with authority as its
agent, but subject to such restrictions, limitations and other
requirements, if any, as may be contained in the By-Laws of the Trust. The
Trustees may also authorize the Custodian to employ one or more
sub-custodians, including such foreign banks and securities depositories
as meet the requirements of applicable provisions of the 1940 Act, and
upon such terms and conditions as may be agreed upon between the Custodian
and such sub-custodian, to hold securities and other assets of the Trust
and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.

Section 3.7. Affiliations of Trustees or Officers, Etc. The fact that: (i) any
of the Shareholders, Trustees or officers of the Trust or any Series
thereof is a shareholder, director, officer, partner, trustee, employee,
manager, adviser or distributor of or for any partnership, corporation,
trust, association or other organization or of or for any parent or
affiliate of any organization, with which a contract of the character
described in Sections 3.1, 3.2, 3.3 or 3.4 above or for services as
Custodian, Transfer Agent or disbursing agent or for related services may
have been or may hereafter be made, or that any such organization, or any
parent or affiliate thereof, is a Shareholder of or has an interest in the
Trust, or that (ii) any partnership, corporation, trust, association or
other organization with which a contract of the character described in
Sections 3.1, 3.2, 3.3 or 3.4 above or for services as Custodian, Transfer
Agent or disbursing agent or for related services may have been or may
hereafter be made also has any one or more of such contracts with one or
more other partnerships, corporations, trusts, associations or other
organizations, or has other business or interests, shall not affect the
validity of any such contract or disqualify any Shareholder, Trustee or
officer of the Trust from voting upon or executing the same or create any
liability or accountability to the Trust or its Shareholders.

Section 3.8. Compliance with 1940 Act. Any contract entered into pursuant to
Sections 3.1 or 3.2 shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act (including any amendment
thereof or other applicable Act of Congress hereafter enacted), as
modified by any applicable order or orders of the Commission, with respect
to its continuance in effect, its termination and the method of
authorization and approval of such contract or renewal thereof.

ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OTHERS

Section 4.1. No Personal Liability of Shareholders, Trustees, Etc. No
Shareholder shall be subject to any personal liability whatsoever to any
Person in connection with Trust Property or the acts, obligations or
affairs of the Trust or any Series thereof. No Trustee, officer, employee
or agent of the Trust or any Series thereof shall be subject to any
personal liability whatsoever to any Person, other than to the Trust or
its Shareholders, in connection with Trust Property or the affairs of the
Trust, save only that arising from bad faith, willful misfeasance, gross
negligence or reckless disregard of his duties with respect to such
Person; and all such Persons shall look solely to the Trust Property, or
to the Property of one or more specific Series of the Trust if the claim
arises from the conduct of such Trustee, officer, employee or agent with
respect to only such Series, for satisfaction of claims of any nature
arising in connection with the affairs of the Trust. If any Shareholder,
Trustee, officer, employee, or agent, as such, of the Trust or any Series
thereof, is made a party to any suit or proceeding to enforce any such
liability of the Trust or any Series thereof, he shall not, on account
thereof, be held to any personal liability. The Trust shall indemnify and
hold each Shareholder harmless from and against all claims and
liabilities, to which such Shareholder may become subject by reason of his
being or having been a Shareholder, and shall reimburse such Shareholder
or former Shareholder (or his or her heirs, executors, administrators or
other legal representatives or in the case of a corporation or other
entity, its corporate or other general successor) out of the Trust
Property for all legal and other expenses reasonably incurred by him in
connection with any such claim or liability. The indemnification and
reimbursement required by the preceding sentence shall be made only out of
assets of the one or more Series whose Shares were held by said
Shareholder at the time the act or event occurred which gave rise to the
claim against or liability of said Shareholder. The rights accruing to a
Shareholder under this Section 4.1 shall not impair any other right to
which such Shareholder may be lawfully entitled, nor shall anything herein
contained restrict the right of the Trust or any Series thereof to
indemnify or reimburse a Shareholder in any appropriate situation even
though not specifically provided herein.

Section 4.2. Non-Liability of Trustees, Etc. No Trustee, officer, employee or
agent of the Trust or any Series thereof shall be liable to the Trust, its
Shareholders, or to any Shareholder, Trustee, officer, employee, or agent
thereof for any action or failure to act (including without limitation the
failure to compel in any way any former or acting Trustee to redress any
breach of trust) except for his own bad faith, willful misfeasance, gross
negligence or reckless disregard of the duties involved in the conduct of
his office.

Section 4.3. Mandatory Indemnification.
(a)Subject to the exceptions and limitations contained in paragraph (b)
below: (i) every person who is, or has been, a Trustee, officer,
employee or agent of the Trust (including any individual who serves at
its request as director, officer, partner, trustee or the like of
another organization in which it has any interest as a shareholder,
creditor or otherwise) shall be indemnified by the Trust, or by one or
more Series thereof if the claim arises from his or her conduct with
respect to only such Series, to the fullest extent permitted by law
against all liability and against all expenses reasonably incurred or
paid by him in connection with any claim, action, suit or proceeding in
which he becomes involved as a party or otherwise by virtue of his
being or having been a Trustee or officer and against amounts paid or
incurred by him in the settlement thereof;

(ii) the words "claim," "action," "suit," or "proceeding" shall apply
to all claims, actions, suits or proceedings (civil, criminal, or
other, including appeals), actual or threatened; and the words
"liability" and "expenses" shall include, without limitation,
attorneys' fees, costs, judgments, amounts paid in settlement, fines,
penalties and other liabilities.

(b)No indemnification shall be provided hereunder to a Trustee or
officer: (i) against any liability to the Trust, a Series thereof or
the Shareholders by reason of willful misfeasance, bad faith, gross
negligence or reckless disregard of the duties involved in the conduct
of his office; (ii) with respect to any matter as to which he shall
have been finally adjudicated not to have acted in good faith in the
reasonable belief that his action was in the best interest of the Trust
or a Series thereof; (iii) in the event of a settlement or other
disposition not involving a final adjudication as provided in paragraph
(b)(ii) resulting in a payment by a Trustee or officer, unless there
has been a determination that such Trustee or officer did not engage in
willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his office:
(A) by the court or other body approving the settlement or other
disposition; (B) based upon a review of readily available facts (as
opposed to a full trial-type inquiry) by (x) vote of a majority of
the Non-interested Trustees acting on the matter (provided that a
majority of the Non-interested Trustees then in office act on the
matter) or (y) written opinion of independent legal counsel; or (C) a
vote of a majority of the Shares outstanding and entitled to vote
(excluding Shares owned of record or beneficially by such
individual).

(c) The rights of indemnification herein provided may be insured against
by policies maintained by the Trust, shall be severable, shall not affect
any other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee
or officer and shall inure to the benefit of the heirs, executors,
administrators and assigns of such a person. Nothing contained herein
shall affect any rights to indemnification to which personnel of the Trust
or any Series thereof other than Trustees and officers may be entitled by
contract or otherwise under law.

(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of
this Section 4.3 may be advanced by the Trust or a Series thereof prior to
final disposition thereof upon receipt of an undertaking by or on behalf
of the recipient to repay such amount if it is ultimately determined that
he is not entitled to indemnification under this Section 4.3, provided
that either:
(i) such undertaking is secured by a surety bond or some other
appropriate security provided by the recipient, or the Trust or Series
thereof shall be insured against losses arising out of any such
advances; or (ii) a majority of the Non-interested Trustees acting on
the matter (provided that a majority of the Non-interested Trustees act
on the matter) or an independent legal counsel in a written opinion
shall determine, based upon a review of readily available facts (as
opposed to a full trial-type inquiry), that there is reason to believe
that the recipient ultimately will be found entitled to
indemnification. As used in this Section 4.3, a "Non-interested
Trustee" is one who (i) is not an "Interested Person" of the Trust
(including anyone who has been exempted from being an "Interested
Person" by any rule, regulation or order of the Commission), and (ii)
is not involved in the claim, action, suit or proceeding.

Section 4.4. No Bond Required of Trustees. No Trustee shall be obligated to give
any bond or other security for the performance of any of his duties
hereunder.

Section 4.5. No Duty of Investigation; Notice in Trust Instruments, Etc. No
purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust or a Series
thereof shall be bound to make any inquiry concerning the validity of any
transaction purporting to be made by the Trustees or by said officer,
employee or agent or be liable for the application of money or property
paid, loaned, or delivered to or on the order of the Trustees or of said
officer, employee or agent. Every obligation, contract, instrument,
certificate, Share, other security of the Trust or a Series thereof or
undertaking, and every other act or thing whatsoever executed in
connection with the Trust shall be conclusively presumed to have been
executed or done by the executors thereof only in their capacity as
Trustees under this Declaration or in their capacity as officers,
employees or agents of the Trust or a Series thereof. Every written
obligation, contract, instrument, certificate, Share, other security of
the Trust or a Series thereof or undertaking made or issued by the
Trustees may recite that the same is executed or made by them not
individually, but as Trustees under the Declaration, and that the
obligations of the Trust or a Series thereof under any such instrument are
not binding upon any of the Trustees or Shareholders individually, but
bind only the Trust Property or the Trust Property of the applicable
Series, and may contain any further recital which they may deem
appropriate, but the omission of such recital shall not operate to bind
the Trustees individually. The Trustees shall at all times maintain
insurance for the protection of the Trust Property or the Trust Property
of the applicable Series, its Shareholders, Trustees, officers, employees
and agents in such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the Trustees in their
sole judgment shall deem advisable.

Section 4.6. Reliance on Experts, Etc. Each Trustee, officer or employee of the
Trust or a Series thereof shall, in the performance of his duties, be
fully and completely justified and protected with regard to any act or any
failure to act resulting from reliance in good faith upon the books of
account or other records of the Trust or a Series thereof, upon an opinion
of counsel, or upon reports made to the Trust or a Series thereof by any
of its officers or employees or by the Investment Adviser, the
Administrator, the Distributor, Transfer Agent, selected dealers,
accountants, appraisers or other experts or consultants selected with
reasonable care by the Trustees, officers or employees of the Trust,
regardless of whether such counsel or expert may also be a Trustee.

ARTICLE V
SHARES OF BENEFICIAL INTEREST

Section 5.1. Beneficial Interest. The interest of the beneficiaries hereunder
shall be divided into transferable Shares of beneficial interest without
par value. The number of such Shares of beneficial interest authorized
hereunder is unlimited. The Trustees shall have the exclusive authority
without the requirement of Shareholder approval to establish and designate
one or more Series of shares and one or more Classes thereof as the
Trustees deem necessary or desirable. Each Share of any Series shall
represent an equal proportionate Share in the assets of that Series with
each other Share in that Series. Subject to the provisions of Section 5.11
hereof, the Trustees may also authorize the creation of additional Series
of Shares (the proceeds of which may be invested in separate,
independently managed portfolios) and additional Classes of Shares within
any Series. All Shares issued hereunder including, without limitation,
Shares issued in connection with a dividend in Shares or a split in
Shares, shall be fully paid and nonassessable.

Section 5.2. Rights of Shareholders. The ownership of the Trust Property of
every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders
shall have no interest therein other than the beneficial interest
conferred by their Shares, and they shall have no right to call for any
partition or division of any property, profits, rights or interests of the
Trust nor can they be called upon to share or assume any losses of the
Trust or suffer an assessment of any kind by virtue of their ownership of
Shares. The Shares shall be personal property giving only the rights
specifically set forth in this Declaration. The Shares shall not entitle
the holder to preference, preemptive, appraisal, conversion or exchange
rights, except as the Trustees may determine with respect to any Series or
Class of Shares.

Section 5.3. Trust Only. It is the intention of the Trustees to create only the
relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to
create a general partnership, limited partnership, joint stock
association, corporation, bailment or any form of legal relationship other
than a trust. Nothing in this Declaration of Trust shall be construed to
make the Shareholders, either by themselves or with the Trustees, partners
or members of a joint stock association.

Section 5.4. Issuance of Shares. The Trustees in their discretion may, from time
to time without vote of the Shareholders, issue Shares, in addition to the
then issued and outstanding Shares and Shares held in the treasury, to
such party or parties and for such amount and type of consideration,
including cash or property, at such time or times and on such terms as the
Trustees may deem best, except that only Shares previously contracted to
be sold may be issued during any period when the right of redemption is
suspended pursuant to Section 6.9 hereof, and may in such manner acquire
other assets (including the acquisition of assets subject to, and in
connection with the assumption of, liabilities) and businesses. In
connection with any issuance of Shares, the Trustees may issue fractional
Shares and Shares held in the treasury. The Trustees may from time to time
divide or combine the Shares of the Trust or, if the Shares be divided
into Series or Classes, of any Series or any Class thereof of the Trust,
into a greater or lesser number without thereby changing the proportionate
beneficial interests in the Trust or in the Trust Property allocated or
belonging to such Series or Class. Contributions to the Trust or Series
thereof may be accepted for, and Shares shall be redeemed as, whole Shares
and/or 1/1,000ths of a Share or integral multiples thereof.

Section 5.5. Register of Shares. A register shall be kept at the principal
office of the Trust or an office of the Transfer Agent which shall contain
the names and addresses of the Shareholders and the number of Shares held
by them respectively and a record of all transfers thereof. Such register
shall be conclusive as to who are the holders of the Shares and who shall
be entitled to receive dividends or distributions or otherwise to exercise
or enjoy the rights of Shareholders. No Shareholder shall be entitled to
receive payment of any dividend or distribution, nor to have notice given
to him as provided herein or in the By-laws, until he has given his
address to the Transfer Agent or such other officer or agent of the
Trustees as shall keep the said register for entry thereon. It is not
contemplated that certificates will be issued for the Shares; however, the
Trustees, in their discretion, may authorize the issuance of share
certificates and promulgate appropriate rules and regulations as to their
use.

Section 5.6. Transfer of Shares. Shares shall be transferable on the records of
the Trust only by the record holder thereof or by his agent thereunto duly
authorized in writing, upon delivery to the Trustees or the Transfer Agent
of a duly executed instrument of transfer, together with such evidence of
the genuineness of each such execution and authorization and of other
matters as may reasonably be required. Upon such delivery the transfer
shall be recorded on the register of the Trust. Until such record is made,
the Shareholder of record shall be deemed to be the holder of such Shares
for all purposes hereunder and neither the Trustees nor any transfer agent
or registrar nor any officer, employee or agent of the Trust shall be
affected by any notice of the proposed transfer. Any person becoming
entitled to any Shares in consequence of the death, bankruptcy, or
incompetence of any Shareholder, or otherwise by operation of law, shall
be recorded on the register of Shares as the holder of such Shares upon
production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be
deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor any Transfer Agent or registrar nor any officer
or agent of the Trust shall be affected by any notice of such death,
bankruptcy or incompetence, or other operation of law.

Section 5.7. Notices. Any and all notices to which any Shareholder may be
entitled and any and all communications shall be deemed duly served or
given if mailed, postage prepaid, addressed to any Shareholder of record
at his last known address as recorded on the register of the Trust.

Section 5.8. Treasury Shares. Shares held in the treasury shall, until resold
pursuant to Section 5.4, not confer any voting rights on the Trustees, nor
shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.

Section 5.9. Voting Powers. The Shareholders shall have power to vote only (i)
for the election of Trustees as provided in Section 2.13; (ii) with
respect to any investment advisory contract entered into pursuant to
Section 3.2; (iii) with respect to termination of the Trust or a Series or
Class thereof as provided in Section 8.2; (iv) with respect to any
amendment of this Declaration to the extent and as provided in Section
8.3; (v) with respect to any merger, consolidation or sale of assets as
provided in Section 8.4; (vi) with respect to incorporation of the Trust
to the extent and as provided in Section 8.5; (vii) to the same extent as
the stockholders of a Massachusetts business corporation as to whether or
not a court action, proceeding or claim should or should not be brought or
maintained derivatively or as a class action on behalf of the Trust or a
Series thereof or the Shareholders of either; (viii) with respect to any
plan adopted pursuant to Rule 12b-1 (or any successor rule) under the 1940
Act, and related matters; and (ix) with respect to such additional matters
relating to the Trust as may be required by this Declaration, the By-laws
or any registration of the Trust as an investment company under the 1940
Act with the Commission (or any successor agency) or as the Trustees may
consider necessary or desirable. Each whole Share shall be entitled to one
vote as to any matter on which it is entitled to vote and each fractional
Share shall be entitled to a proportionate fractional vote. On any matter
submitted to a vote of Shareholders, all Shares shall be voted by
individual Series except (1) when permitted by the 1940 Act, Shares shall
be voted in the aggregate and not by individual Series; and (2) when the
Trustees have determined that the matter affects only the interests of one
or more Series or Class thereof, then only the Shareholders of such Series
or Class thereof shall be entitled to vote thereon. The Trustees may, in
conjunction with the establishment of any further Series or any Classes of
Shares, establish conditions under which the several Series or Classes of
Shares shall have separate voting rights or no voting rights. There shall
be no cumulative voting in the election of Trustees. Until Shares are
issued, the Trustees may exercise all rights of Shareholders and may take
any action required by law, this Declaration or the By-laws to be taken by
Shareholders. The By-laws may include further provisions for Shareholders'
votes and meetings and related matters.

Section 5.10. Meetings of Shareholders. No annual or regular meetings of
Shareholders are required. Special meetings of the Shareholders, including
meetings involving only the holders of Shares of one or more but less than
all Series or Classes thereof, may be called at any time by the Chairman
of the Board, President, or any Vice-President of the Trust, and shall be
called by the President or the Secretary at the request, in writing or by
resolution, of a majority of the Trustees, or at the written request of
the holder or holders of ten percent (10%) or more of the total number of
Shares then issued and outstanding of the Trust entitled to vote at such
meeting. Meetings of the Shareholders of any Series of the Trust shall be
called by the President or the Secretary at the written request of the
holder or holders of ten percent (10%) or more of the total number of
Shares then issued and outstanding of such Series of the Trust entitled to
vote at such meeting. Any such request shall state the purpose of the
proposed meeting.

Section 5.11. Series or Class Designation. (a) Without limiting the authority of
the Trustees set forth in Section 5.1 to establish and designate any
further Series, it is hereby confirmed that the Trust consists of the
presently Outstanding Shares of a single Series: John Hancock Growth Fund
(the "Existing Series"). (b) Without limiting the authority of the
Trustees set forth in Section 5.1 to establish and designate any further
Classes, there are hereby established and designated three distinct
Classes of Shares of the Existing Series: "Class A"--Shares of which are
subject to a sales charge at time of purchase and a Class A Rule 12b-1
distribution plan (the "Front-End Option"); "Class B"-- Shares of which
are subject to a contingent deferred sales charge ("CDSC"), a Class B Rule
12b- 1 distribution plan, and automatic conversion to Class A Shares seven
years after purchase, provided that there is an ongoing opinion of counsel
or an Internal Revenue Service Ruling that such conversion is a
non-taxable event (the "CDSC Option"); and "Class C"--Shares of which are
offered for purchase to certain institutional investors with no sales
charge and no Class C Rule 12b-1 distribution plan (the "No-Load Option").
Each outstanding Share of any Series shall be of Class A unless the
Trustees, with the consent of the holder of the Share (which consent shall
be evidenced by the holder's subscription of Shares of a specified Class
or by any other action prescribed by the Trustees), determines that such
Share is or shall be of some other Class. (c) The Shares of the existing
Series and such Classes thereof herein established and designated and any
Shares of any further Series and Classes thereof that may from time to
time be established and designated by the Trustees shall be established
and designated, and the variations in the relative rights and preferences
as between the different Series shall be fixed and determined, by the
Trustees (unless the Trustees otherwise determine with respect to further
Series or Classes at the time of establishing and designating the same);
provided, that all Shares shall be identical except that there may be
variations so fixed and determined between different Series or Classes
thereof as to investment objective, policies and restrictions, purchase
price, payment obligations, distribution expenses, right of redemption,
special and relative rights as to dividends and on liquidation, conversion
rights, exchange rights, and conditions under which the several Series
shall have separate voting rights, all of which are subject to the
limitations set forth below. All references to Shares in this Declaration
shall be deemed to be Shares of any or all Series or Classes as the
context may require. (d) As to any existing Series and Classes, both
heretofore and herein established and designated, and any further division
of Shares of the Trust into additional Series or Classes, the following
provisions shall be applicable:
(i) The number of authorized Shares and the number of Shares of each
Series or Class thereof that may be issued shall be unlimited. The
Trustees may classify or reclassify any unissued Shares or any Shares
previously issued and reacquired of any Series or Class into one or
more Series or one or more Classes that may be established and
designated from time to time. The Trustees may hold as treasury shares
(of the same or some other Series or Class), reissue for such
consideration and on such terms as they may determine, or cancel any
Shares of any Series or Class reacquired by the Trust at their
discretion from time to time.

(ii) All consideration received by the Trust for the issue or sale of
Shares of a particular Series or Class, together with all assets in
which such consideration is invested or reinvested, all income,
earnings, profits, and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any funds or
payments derived from any reinvestment of such proceeds in whatever
form the same may be, shall irrevocably belong to that Series for all
purposes, subject only to the rights of creditors of such Series and
except as may otherwise be required by applicable tax laws, and shall
be so recorded upon the books of account of the Trust. In the event
that there are any assets, income, earnings, profits, and proceeds
thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series, the Trustees shall allocate them
among any one or more of the Series established and designated from
time to time in such manner and on such basis as they, in their sole
discretion, deem fair and equitable. Each such allocation by the
Trustees shall be conclusive and binding upon the Shareholders of all
Series for all purposes. No holder of Shares of any Series shall have
any claim on or right to any assets allocated or belonging to any other
Series.

(iii) The assets belonging to each particular Series shall be charged
with the liabilities of the Trust in respect of that Series or the
appropriate Class or Classes thereof and all expenses, costs, charges
and reserves attributable to that Series or Class or Classes thereof,
and any general liabilities, expenses, costs, charges or reserves of
the Trust which are not readily identifiable as belonging to any
particular Series shall be allocated and charged by the Trustees to and
among any one or more of the Series established and designated from
time to time in such manner and on such basis as the Trustees in their
sole discretion deem fair and equitable. Each allocation of
liabilities, expenses, costs, charges and reserves by the Trustees
shall be conclusive and binding upon the Shareholders of all Series and
Classes for all purposes. The Trustees shall have full discretion, to
the extent not inconsistent with the 1940 Act, to determine which items
are capital; and each such determination and allocation shall be
conclusive and binding upon the Shareholders. The assets of a
particular Series of the Trust shall, under no circumstances, be
charged with liabilities attributable to any other Series or Class
thereof of the Trust. All persons extending credit to, or contracting
with or having any claim against a particular Series or Class of the
Trust shall look only to the assets of that particular Series for
payment of such credit, contract or claim.

(iv) The power of the Trustees to pay dividends and make distributions
shall be governed by Section 7.2 of this Declaration with respect to
any Series or Classes which represent the interests in the assets of
the Trust immediately prior to the establishment of two or more Series
or Classes. With respect to any other Series or Class, dividends and
distributions on Shares of a particular Series or Class may be paid
with such frequency as the Trustees may determine, which may be daily
or otherwise, pursuant to a standing resolution or resolutions adopted
only once or with such frequency as the Trustees may determine, to the
holders of Shares of that Series or Class, from such of the income and
capital gains, accrued or realized, from the assets belonging to that
Series, as the Trustees may determine, after providing for actual and
accrued liabilities belonging to that Series or Class. All dividends
and distributions on Shares of a particular Series or Class shall be
distributed pro rata to the Shareholders of that Series or Class in
proportion to the number of Shares of that Series or Class held by such
Shareholders at the time of record established for the payment of such
dividends or distribution.

(v) Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a
Series or Class thereof shall be entitled to receive his pro rata share
of distributions of income and capital gains made with respect to such
Series or Class net of expenses. Upon redemption of his Shares or
indemnification for liabilities incurred by reason of his being or
having been a Shareholder of a Series or Class, such Shareholder shall
be paid solely out of the funds and property of such Series of the
Trust. Upon liquidation or termination of a Series or Class thereof of
the Trust, Shareholders of such Series or Class thereof shall be
entitled to receive a pro rata share of the net assets of such Series.
A Shareholder of a particular Series of the Trust shall not be entitled
to participate in a derivative or class action on behalf of any other
Series or the Shareholders of any other Series of the Trust.

(vi) On each matter submitted to a vote of Shareholders, all Shares of
all Series and Classes shall vote as a single class; provided, however,
that (1) as to any matter with respect to which a separate vote of any
Series or Class is required by the 1940 Act or is required by
attributes applicable to any Class or is required by any Rule 12b-1
plan, such requirements as to a separate vote by that Series or Class
shall apply, (2) to the extent that a matter referred to in (1) above,
affects more than one Class or Series and the interests of each such
Class or Series in the matter are identical, then, subject to (3)
below, the Shares of all such affected Classes or Series shall vote as
a single Class; (3) as to any matter which does not affect the
interests of a particular Series or Class, only the holders of Shares
of the one or more affected Series or Classes shall be entitled to
vote; and (4) the provisions of the following sentence shall apply. On
any matter that pertains to any particular Class of a particular Series
or to any class expenses with respect to any Series which matter may be
submitted to a vote of Shareholders, only Shares of the affected Class,
as the case may be, or that Series shall be entitled to vote except
that: (i) to the extent said matter affects Shares of another Class or
Series, such other Shares shall also be entitled to vote, and in such
cases Shares of the affected Class, as the case may be, of such Series
shall be voted in the aggregate together with such other Shares; and
(ii) to the extent that said matter does not affect Shares of a
particular Class of such Series, said Shares shall not be entitled to
vote (except where otherwise required by law or permitted by the
Trustees acting in their sole discretion) even though the matter is
submitted to a vote of the Shareholders of any other Class or Series.

(vii) Except as otherwise provided in this Article V, the Trustees
shall have the power to determine the designations, preferences,
privileges, payment obligations, limitations and rights, including
voting and dividend rights, of each Class and Series of Shares. Subject
to compliance with the requirement of the 1940 Act, the Trustees shall
have the authority to provide that the holders of Shares of any Series
or Class shall have the right to convert or exchange said Shares into
Shares of one or more Series or Classes of Shares in accordance with
such requirements, conditions and procedures as may be established by
the Trustees.

(viii) The establishment and designation of any Series or Classes of
Shares shall be effective upon the execution by a majority of the then
Trustees of an instrument setting forth such establishment and
designation and the relative rights and preferences of such Series or
Classes, or as otherwise provided in such instrument. At any time that
there are no Shares outstanding of any particular Series or Class
previously established and designated, the Trustees may by an
instrument executed by a majority of their number abolish that Series
or Class and the establishment and designation thereof. Each instrument
referred to in this section shall have the status of an amendment to
this Declaration.

Section 5.12. Assent to Declaration of Trust. Every Shareholder, by virtue of
having become a Shareholder, shall be held to have expressly assented and
agreed to the terms hereof and to have become a party hereto.

ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES

Section 6.1. Redemption of Shares.
(a) All Shares of the Trust shall be redeemable, at the redemption price
determined in the manner set out in this Declaration. Redeemed or
repurchased Shares may be resold by the Trust. The Trust may require any
Shareholder to pay a sales charge to the Trust, the underwriter, or any
other person designated by the Trustees upon redemption or repurchase of
Shares in such amount and upon such conditions as shall be determined from
time to time by the Trustees. (b) The Trust shall redeem the Shares of the
Trust or any Series or Class thereof at the price determined as
hereinafter set forth, upon the appropriately verified written application
of the record holder thereof (or upon such other form of request as the
Trustees may determine) at such office or agency as may be designated from
time to time for that purpose by the Trustees. The Trustees may from time
to time specify additional conditions, not inconsistent with the 1940 Act,
regarding the redemption of Shares in the Trust's then effective
Prospectus.

Section 6.2. Price. Shares shall be redeemed at a price based on their net asset
value determined as set forth in Section 7.1 hereof as of such time as the
Trustees shall have theretofore prescribed by resolution. In the absence
of such resolution, the redemption price of Shares deposited shall be
based on the net asset value of such Shares next determined as set forth
in Section 7.1 hereof after receipt of such application. The amount of any
contingent deferred sales charge or redemption fee payable upon redemption
of Shares may be deducted from the proceeds of such redemption.

Section 6.3. Payment. Payment of the redemption price of Shares of the Trust or
any Series or Class thereof shall be made in cash or in property to the
Shareholder at such time and in the manner, not inconsistent with the 1940
Act or other applicable laws, as may be specified from time to time in the
Trust's then effective Prospectus, subject to the provisions of Section
6.4 hereof. Notwithstanding the foregoing, the Trustees may withhold from
such redemption proceeds any amount arising (i) from a liability of the
redeeming Shareholder to the Trust or (ii) in connection with any Federal
or state tax withholding requirements.

Section 6.4. Effect of Suspension of Determination of Net Asset Value. If,
pursuant to Section 6.9 hereof, the Trustees shall declare a suspension of
the determination of net asset value with respect to Shares of the Trust
or of any Series or Class thereof, the rights of Shareholders (including
those who shall have applied for redemption pursuant to Section 6.1 hereof
but who shall not yet have received payment) to have Shares redeemed and
paid for by the Trust or a Series or Class thereof shall be suspended
until the termination of such suspension is declared. Any record holder
who shall have his redemption right so suspended may, during the period of
such suspension, by appropriate written notice of revocation at the office
or agency where application was made, revoke any application for
redemption not honored and withdraw any Share certificates on deposit. The
redemption price of Shares for which redemption applications have not been
revoked shall be based on the net asset value of such Shares next
determined as set forth in Section 7.1 after the termination of such
suspension, and payment shall be made within seven (7) days after the date
upon which the application was made plus the period after such application
during which the determination of net asset value was suspended.

Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares directly,
or through the Distributor or another agent designated for the purpose, by
agreement with the owner thereof at a price not exceeding the net asset
value per share determined as of the time when the purchase or contract of
purchase is made or the net asset value as of any time which may be later
determined pursuant to Section 7.1 hereof, provided payment is not made
for the Shares prior to the time as of which such net asset value is
determined.

Section 6.6. Redemption of Shareholder's Interest. The Trustees, in their sole
discretion, may cause the Trust to redeem all of the Shares of one or more
Series or Class thereof held by any Shareholder if the value of such
Shares held by such Shareholder is less than the minimum amount
established from time to time by the Trustees.

Section 6.7. Redemption of Shares in Order to Qualify as Regulated Investment
Company; Disclosure of Holding.

(a) If the Trustees shall, at any time and in good faith, be of the
opinion that direct or indirect ownership of Shares or other securities of
the Trust has or may become concentrated in any Person to an extent which
would disqualify the Trust or any Series of the Trust as a regulated
investment company under the Internal Revenue Code of 1986, then the
Trustees shall have the power by lot or other means deemed equitable by
them (i) to call for redemption by any such Person a number, or principal
amount, of Shares or other securities of the Trust or any Series of the
Trust sufficient to maintain or bring the direct or indirect ownership of
Shares or other securities of the Trust or any Series of the Trust into
conformity with the requirements for such qualification and (ii) to refuse
to transfer or issue Shares or other securities of the Trust or any Series
of the Trust to any Person whose acquisition of the Shares or other
securities of the Trust or any Series of the Trust in question would
result in such disqualification. The redemption shall be effected at the
redemption price and in the manner provided in Section 6.1.

(b) The holders of Shares or other securities of the Trust shall upon
demand disclose to the Trustees in writing such information with respect
to direct and indirect ownership of Shares or other securities of the
Trust as the Trustees deem necessary to comply with the provisions of the
Internal Revenue Code of 1986, or to comply with the requirements of any
other taxing authority.

Section 6.8. Reductions in Number of Outstanding Shares Pursuant to Net Asset
Value Formula. The Trust may also reduce the number of outstanding Shares
of the Trust or of any Series of the Trust pursuant to the provisions of
Section 7.3.

Section 6.9. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the
New York Stock Exchange is closed other than customary weekend and holiday
closings, (ii) during which trading on the New York Stock Exchange is
restricted, (iii) during which an emergency exists as a result of which
disposal by the Trust or a Series thereof of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Trust
or a Series thereof fairly to determine the value of its net assets, or
(iv) during any other period when the Commission may for the protection of
Shareholders of the Trust by order permit suspension of the right of
redemption or postponement of the date of payment or redemption; provided
that applicable rules and regulations of the Commission shall govern as to
whether the conditions prescribed in (ii), (iii), or (iv) exist. Such
suspension shall take effect at such time as the Trust shall specify but
not later than the close of business on the business day next following
the declaration of suspension, and thereafter there shall be no right of
redemption or payment on redemption until the Trust shall declare the
suspension at an end, except that the suspension shall terminate in any
event on the first day on which said stock exchange shall have reopened or
the period specified in (ii) or (iii) shall have expired (as to which in
the absence of an official ruling by the Commission, the determination of
the Trust shall be conclusive). In the case of a suspension of the right
of redemption, a Shareholder may either withdraw his request for
redemption or receive payment based on the net asset value existing after
the termination of the suspension.

ARTICLE VII
DETERMINATION OF NET ASSET VALUE, NET INCOME AND DISTRIBUTIONS

Section 7.1. Net Asset Value. The net asset value of each outstanding Share of
the Trust or of each Series or Class thereof shall be determined on such
days and at such time or times as the Trustees may determine. The value of
the assets of the Trust or any Series thereof may be determined (i) by a
pricing service which utilizes electronic pricing techniques based on
general institutional trading, (ii) by appraisal of the securities owned
by the Trust or any Series of the Trust, (iii) in certain cases, at
amortized cost, or (iv) by such other method as shall be deemed to reflect
the fair value thereof, determined in good faith by or under the direction
of the Trustees. From the total value of said assets, there shall be
deducted all indebtedness, interest, taxes, payable or accrued, including
estimated taxes on unrealized book profits, expenses and management
charges accrued to the appraisal date, net income determined and declared
as a distribution and all other items in the nature of liabilities which
shall be deemed appropriate, as incurred by or allocated to the Trust or
any Series or Class of the Trust. The resulting amount which shall
represent the total net assets of the Trust or Series or Class thereof
shall be divided by the number of Shares of the Trust or Series or Class
thereof outstanding at the time and the quotient so obtained shall be
deemed to be the net asset value of the Shares of the Trust or Series or
Class thereof. The net asset value of the Shares shall be determined at
least once on each business day, as of the close of regular trading on the
New York Stock Exchange or as of such other time or times as the Trustees
shall determine. The power and duty to make the daily calculations may be
delegated by the Trustees to the Investment Adviser, the Administrator,
the Custodian, the Transfer Agent or such other Person as the Trustees by
resolution may determine. The Trustees may suspend the daily determination
of net asset value to the extent permitted by the 1940 Act. It shall not
be a violation of any provision of this Declaration of Trust if Shares are
sold, redeemed or repurchased by the Trust at a price other than one based
on net asset value if the net asset value is affected by one or more
errors inadvertently made in the pricing of portfolio securities or in
accruing income, expenses or liabilities.

Section 7.2. Distributions to Shareholders.

(a) The Trustees shall from time to time distribute ratably among the
Shareholders of the Trust or of a Series or Class thereof such proportion
of the net profits, surplus (including paid-in surplus), capital, or
assets of the Trust or such Series held by the Trustees as they may deem
proper. Such distributions may be made in cash or property (including
without limitation any type of obligations of the Trust or Series or Class
or any assets thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Series or Class thereof additional Shares of
the Trust or Series or Class thereof issuable hereunder in such manner, at
such times, and on such terms as the Trustees may deem proper. Such
distributions may be among the Shareholders of the Trust or Series or
Class thereof at the time of declaring a distribution or among the
Shareholders of the Trust or Series or Class thereof at such other date or
time or dates or times as the Trustees shall determine. The Trustees may
in their discretion determine that, solely for the purposes of such
distributions, Outstanding Shares shall exclude Shares for which orders
have been placed subsequent to a specified time on the date the
distribution is declared or on the next preceding day if the distribution
is declared as of a day on which Boston banks are not open for business,
all as described in the then effective prospectus under the Securities Act
of 1933. The Trustees may always retain from the net profits such amount
as they may deem necessary to pay the debts or expenses of the Trust or a
Series or Class thereof or to meet obligations of the Trust or a Series or
Class thereof, or as they may deem desirable to use in the conduct of its
affairs or to retain for future requirements or extensions of the
business. The Trustees may adopt and offer to Shareholders such dividend
reinvestment plans, cash dividend payout plans or related plans as the
Trustees shall deem appropriate. The Trustees may in their discretion
determine that an account administration fee or other similar charge may
be deducted directly from the income and other distributions paid on
Shares to a Shareholder's account in each Series or Class.

(b) Inasmuch as the computation of net income and gains for Federal income
tax purposes may vary from the computation thereof on the books, the above
provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gains distributions, respectively, additional amounts sufficient
to enable the Trust or a Series or Class thereof to avoid or reduce
liability for taxes.

Section 7.3. Determination of Net Income; Constant Net Asset Value; Reduction of
Outstanding Shares. Subject to Section 5.11 hereof, the net income of the
Series and Classes thereof of the Trust shall be determined in such manner
as the Trustees shall provide by resolution. Expenses of the Trust or of a
Series or Class thereof, including the advisory or management fee, shall
be accrued each day. Each Class shall bear only expenses relating to its
Shares and an allocable share of Series expenses in accordance with such
policies as may be established by the Trustees from time to time and as
are not inconsistent with the provisions of this Declaration of Trust or
of any applicable document filed by the Trust with the Commission or of
the Internal Revenue Code of 1986, as amended. Such net income may be
determined by or under the direction of the Trustees as of the close of
trading on the New York Stock Exchange on each day on which such market is
open or as of such other time or times as the Trustees shall determine,
and, except as provided herein, all the net income of any Series or Class
of the Trust, as so determined, may be declared as a dividend on the
Outstanding Shares of such Series or Class. If, for any reason, the net
income of any Series or Class of the Trust determined at any time is a
negative amount, the Trustees shall have the power with respect to such
Series or Class (i) to offset each Shareholder's pro rata share of such
negative amount from the accrued dividend account of such Shareholder, or
(ii) to reduce the number of Outstanding Shares of such Series or Class by
reducing the number of Shares in the account of such Shareholder by that
number of full and fractional Shares which represents the amount of such
excess negative net income, or (iii) to cause to be recorded on the books
of the Trust an asset account in the amount of such negative net income,
which account may be reduced by the amount, provided that the same shall
thereupon become the property of the Trust with respect to such Series or
Class and shall not be paid to any Shareholder, of dividends declared
thereafter upon the Outstanding Shares of such Series or Class on the day
such negative net income is experienced, until such asset account is
reduced to zero. The Trustees shall have full discretion to determine
whether any cash or property received shall be treated as income or as
principal and whether any item of expense shall be charged to the income
or the principal account, and their determination made in good faith shall
be conclusive upon the Shareholders. In the case of stock dividends
received, the Trustees shall have full discretion to determine, in the
light of the particular circumstances, how much if any of the value
thereof shall be treated as income, the balance, if any, to be treated as
principal.

Section 7.4. Power to Modify Foregoing Procedures. Notwithstanding any of the
foregoing provisions of this Article VII, but subject to Section 5.11
hereof, the Trustees may prescribe, in their absolute discretion, such
other bases and times for determining the per Share net asset value of the
Shares of the Trust or a Series or Class thereof or net income of the
Trust or a Series or Class thereof, or the declaration and payment of
dividends and distributions as they may deem necessary or desirable.
Without limiting the generality of the foregoing, the Trustees may
establish several Series or Classes of Shares in accordance with Section
5.11, and declare dividends thereon in accordance with Section
5.11(d)(iv).

ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A SERIES OR CLASS; AMENDMENT;
MERGERS, ETC.

Section 8.1. Duration. The Trust shall continue without limitation of time but
subject to the provisions of this Article VIII.

Section 8.2. Termination of the Trust or a Series or a Class.

(a) The Trust or any Series or Class thereof may be terminated by (i) the
affirmative vote of the holders of not less than two-thirds of the Shares
outstanding and entitled to vote at any meeting of Shareholders of the
Trust or the appropriate Series or Class thereof, (ii) by an instrument or
instruments in writing without a meeting, consented to by the holders of
two-thirds of the Shares of the Trust or a Series or Class thereof;
provided, however, that, if such termination is recommended by the
Trustees, the vote or written consent of the holders of a majority of the
Shares of the Trust or a Series or Class thereof outstanding and entitled
to vote shall be sufficient authorization, or (iii) notice to Shareholders
by means of an instrument in writing signed by a majority of the Trustees,
stating that a majority of the Trustees has determined that the
continuation of the Trust or a Series or a Class thereof is not in the
best interest of such Series or a Class, the Trust or their respective
shareholders as a result of such factors or events adversely affecting the
ability of such Series or a Class or the Trust to conduct its business and
operations in an economically viable manner. Such factors and events may
include (but are not limited to) the inability of a Series or Class or the
Trust to maintain its assets at an appropriate size, changes in laws or
regulations governing the Series or Class or the Trust or affecting assets
of the type in which such Series or Class or the Trust invests or economic
developments or trends having a significant adverse impact on the business
or operations of such Series or Class or the Trust.
Upon the termination of the Trust or the Series or Class,

(i) The Trust, Series or Class shall carry on no business except for
the purpose of winding up its affairs.

(ii) The Trustees shall proceed to wind up the affairs of the Trust,
Series or Class and all of the powers of the Trustees under this
Declaration shall continue until the affairs of the Trust, Series or
Class shall have been wound up, including the power to fulfill or
discharge the contracts of the Trust, Series or Class, collect its
assets, sell, convey, assign, exchange, transfer or otherwise dispose
of all or any part of the remaining Trust Property or Trust Property
allocated or belonging to such Series or Class to one or more persons
at public or private sale for consideration which may consist in whole
or in part of cash, securities or other property of any kind, discharge
or pay its liabilities, and do all other acts appropriate to liquidate
its business; provided that any sale, conveyance, assignment, exchange,
transfer or other disposition of all or substantially all the Trust
Property or Trust Property allocated or belonging to such Series or
Class that requires Shareholder approval in accordance with Section 8.4
hereof shall receive the approval so required.(iii) After paying or
adequately providing for the payment of all liabilities, and upon
receipt of such releases, indemnities and refunding agreements as they
deem necessary for their protection, the Trustees may distribute the
remaining Trust Property or the remaining property of the terminated
Series or Class, in cash or in kind or partly each, among the
Shareholders of the Trust or the Series or Class according to their
respective rights.

(b) After termination of the Trust, Series or Class and distribution to
the Shareholders as herein provided, a majority of the Trustees shall
execute and lodge among the records of the Trust and file with the Office
of the Secretary of the Commonwealth of Massachusetts an instrument in
writing setting forth the fact of such termination, and the Trustees shall
thereupon be discharged from all further liabilities and duties with
respect to the Trust or the terminated Series or Class, and the rights and
interests of all Shareholders of the Trust or the terminated Series or
Class shall thereupon cease.

Section 8.3. Amendment Procedure.

(a) This Declaration may be amended by a vote of the holders of a majority
of the Shares outstanding and entitled to vote or by any instrument in
writing, without a meeting, signed by a majority of the Trustees and
consented to by the holders of a majority of the Shares outstanding and
entitled to vote. The Trustees may amend this Declaration without the vote
or consent of Shareholders if they deem it necessary to conform this
Declaration to the requirements of applicable federal or state laws or
regulations or the requirements of the regulated investment company
provisions of the Internal Revenue Code, but the Trustees shall not be
liable for failing so to do. The Trustees may also amend this Declaration
without the vote or consent of Shareholders if they deem it necessary or
desirable to change the name of the Trust or to make any other changes in
the Declaration which do not adversely affect the rights of Shareholders
hereunder.

(b) No amendment may be made under this Section 8.3 which would change any
rights with respect to any Shares of the Trust or Series or Class thereof
by reducing the amount payable thereon upon liquidation of the Trust or
Series or Class thereof or by diminishing or eliminating any voting rights
pertaining thereto, except with the vote or consent of the holders of
two-thirds of the Shares of the Trust or such Series or Class outstanding
and entitled to vote. Nothing contained in this Declaration shall permit
the amendment of this Declaration to impair the exemption from personal
liability of the Shareholders, Trustees, officers, employees and agents of
the Trust or to permit assessments upon Shareholders.

(c) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Shareholders or by
the Trustees as aforesaid or a copy of the Declaration, as amended, and
executed by a majority of the Trustees, shall be conclusive evidence of
such amendment when lodged among the records of the Trust.

Section 8.4. Merger, Consolidation and Sale of Assets. The Trust or any Series
thereof may merge or consolidate with any other corporation, association,
trust or other organization or may sell, lease or exchange all or
substantially all of the Trust Property or Trust Property allocated or
belonging to such Series, including its good will, upon such terms and
conditions and for such consideration when and as authorized at any
meeting of Shareholders called for the purpose by the affirmative vote of
the holders of two-thirds of the Shares of the Trust or such Series
outstanding and entitled to vote, or by an instrument or instruments in
writing without a meeting, consented to by the holders of two-thirds of
the Shares of the Trust or such Series; provided, however, that, if such
merger, consolidation, sale, lease or exchange is recommended by the
Trustees, the vote or written consent of the holders of a majority of the
Shares of the Trust or such Series outstanding and entitled to vote shall
be sufficient authorization; and any such merger, consolidation, sale,
lease or exchange shall be deemed for all purposes to have been
accomplished under and pursuant to Massachusetts law.

Section 8.5. Incorporation. With the approval of the holders of a majority of
the Shares of the Trust or a Series thereof outstanding and entitled to
vote, the Trustees may cause to be organized or assist in organizing a
corporation or corporations under the laws of any jurisdiction or any
other trust, partnership, association or other organization to take over
all of the Trust Property or the Trust Property allocated or belonging to
such Series or to carry on any business in which the Trust shall directly
or indirectly have any interest, and to sell, convey and transfer the
Trust Property or the Trust Property allocated or belonging to such Series
to any such corporation, trust, association or organization in exchange
for the shares or securities thereof or otherwise, and to lend money to,
subscribe for the shares or securities of, and enter into any contracts
with any such corporation, trust, partnership, association or
organization, or any corporation, partnership, trust, association or
organization in which the Trust or such Series holds or is about to
acquire shares or any other interest. The Trustees may also cause a merger
or consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and
to the extent permitted by law, as provided under the law then in effect.
Nothing contained herein shall be construed as requiring approval of
Shareholders for the Trustees to organize or assist in organizing one or
more corporations, trusts, partnerships, associations or other
organizations and selling, conveying or transferring a portion of the
Trust Property to such organization or entities.

ARTICLE IX
REPORTS TO SHAREHOLDERS

The Trustees shall at least semi-annually submit to the Shareholders of each
Series a written financial report of the transactions of the Trust, including
financial statements which shall at least annually be certified by independent
public accountants.

ARTICLE X
MISCELLANEOUS

Section 10.1. Execution and Filing. This Declaration and any amendment hereto
shall be filed in the office of the Secretary of The Commonwealth of
Massachusetts and in such other places as may be required under the laws
of Massachusetts and may also be filed or recorded in such other places as
the Trustees deem appropriate. Each amendment so filed shall be
accompanied by a certificate signed and acknowledged by a Trustee stating
that such action was duly taken in a manner provided herein, and unless
such amendment or such certificate sets forth some later time for the
effectiveness of such amendment, such amendment shall be effective upon
its execution. A restated Declaration, integrating into a single
instrument all of the provisions of the Declaration which are then in
effect and operative, may be executed from time to time by a majority of
the Trustees and filed with the Secretary of The Commonwealth of
Massachusetts. A restated Declaration shall, upon execution, be conclusive
evidence of all amendments contained therein and may hereafter be referred
to in lieu of the original Declaration and the various amendments thereto.

Section 10.2. Governing Law. This Declaration is executed by the Trustees and
delivered in The Commonwealth of Massachusetts and with reference to the
laws thereof, and the rights of all parties and the validity and
construction of every provision hereof shall be subject to and construed
according to the laws of said Commonwealth.

Section 10.3. Counterparts. This Declaration may be simultaneously executed in
several counterparts, each of which shall be deemed to be an original, and
such counterparts, together, shall constitute one and the same instrument,
which shall be sufficiently evidenced by any such original counterpart.

Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appears to be a
Trustee hereunder, certifying (a) the number or identity of Trustees or
Shareholders, (b) the due authorization of the execution of any instrument
or writing, (c) the form of any vote passed at a meeting of Trustees or
Shareholders, (d) the fact that the number of Trustees or Shareholders
present at any meeting or executing any written instrument satisfies the
requirements of this Declaration, (e) the form of any By-laws adopted by
or the identity of any officers elected by the Trustees, or (f) the
existence of any fact or facts which in any manner relate to the affairs
of the Trust, shall be conclusive evidence as to the matters so certified
in favor of any Person dealing with the Trustees and their successors.

Section 10.5. Provisions in Conflict with Law or Regulations.
(a) The provisions of this Declaration are severable, and if the Trustees
shall determine, with the advice of counsel, that any of such provisions
is in conflict with the 1940 Act, the regulated investment company
provisions of the Internal Revenue Code of 1986 or with other applicable
laws and regulations, the conflicting provision shall be deemed never to
have constituted a part of this Declaration; provided, however, that such
determination shall not affect any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted
prior to such determination.

(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability
shall attach only to such provision in such jurisdiction and shall not in
any manner affect such provisions in any other jurisdiction or any other
provision of this Declaration in any jurisdiction.

<PAGE>

IN WITNESS WHEREOF, the undersigned have executed this instrument this 28th day
of February, 1992.

/s/ Edward J. Boudreau, Jr.
- ---------------------------------
Edward J. Boudreau, Jr., Chairman
as Trustee and not individually
101 Huntington Avenue
Boston, Massachusetts 02199-7603

/s/Dennis S. Aronowitz
- --------------------------------
Dennis S. Aronowitz
as Trustee and not individually
101 Huntington Avenue
Boston, Massachusetts 02199-7603

/s/Richard P. Chapman, Jr.
- --------------------------------
Richard P. Chapman
as Trustee and not individually
101 Huntington Avenue
Boston, Massachusetts 02199-7603

- -------------------------------
Francis C. Cleary, Jr.
as Trustee and not individually
101 Huntington Avenue
Boston, Massachusetts 02199-7603

/s/ William J. Cosgrove
- --------------------------------
William J. Cosgrove
as Trustee and not individually
101 Huntington Avenue
Boston, Massachusetts 02199-7603

/s/ James V. Fetchero
- -------------------------------
James V. Fetchero
as Trustee and not individually
101 Huntington Avenue
Boston, Massachusetts 02199-7603

/s/ Bayard Henry
- --------------------------------
Bayard Henry
as Trustee and not individually
101 Huntington Avenue
Boston, Massachusetts 02199-7603

/s/ Richard S. Scipione
- --------------------------------
Richard S. Scipione
as Trustee and not individually
101 Huntington Avenue
Boston, Massachusetts 02199-7603

/s/ Edward J. Spellman
- --------------------------------
Edward J. Spellman
as Trustee and not individually
101 Huntington Avenue
Boston, Massachusetts 02199-7603

<PAGE>

THE COMMONWEALTH OF MASSACHUSETTS

SUFFOLK COUNTY, MASSACHUSETTS

February 28, 1992

Then personally appeared the above-named persons, Edward J, Boudreau, Jr.,
Dennis S. Aronowitz, Richard P. Chapman, Francis C. Cleary, Jr., William J.
Cosgrove, James V. Fetchero, Bayard Henry, Richard S. Scipione, Edward J.
Spellman, who acknowledged the foregoing instrument to be their free act and
deed.

Before me,

/s/Carmen M. Pelissier
Notary Public

My commission expires: July 30, 1993

JOHN HANCOCK GROWTH FUND

John Hancock Special Value Fund

Establishment and Designation
of
Class A Shares, Class B Shares and Class C Shares
of Beneficial Interest of
John Hancock Special Value Fund, a Series of
John Hancock Growth Fund

The undersigned, being a majority of the Trustees of John Hancock Growth
Fund, a Massachusetts business trust (the "Trust"), acting pursuant to the
Amended and Restated Declaration of Trust dated February 28, 1992 of the Trust,
as amended from time to time (the "Declaration"), do hereby establish an
additional Series of shares of the Trust (the "Shares"), having rights and
preferences set forth in the Declaration of Trust and in the Trust's
Registration Statement on Form N-1A, which Shares shall represent undivided
beneficial interests in a separate portfolio of assets of the Trust (the "Fund")
designated the "John Hancock Special Value Fund." The Shares are divided to
create three classes of Shares of the Fund as follows:

1. The three classes of Shares of the Fund established and designated
hereby are "Class A Shares," "Class B Shares" and "Class C Shares,"
respectively.

2. Class A Shares, Class B Shares and Class C Shares shall each be
entitled to all of the rights and preferences accorded to Shares
under the Declaration.

3. The purchase price of Class A Shares, of Class B Shares and of
Class C Shares, the method of determining the net asset value of
Class A Shares, of Class B Shares and of Class C Shares, and the
relative dividend rights of holders of Class A Shares, of holders
of Class B Shares and of holders of Class C Shares shall be
established by the Trustees of the Trust in accordance with the
provisions of the Declaration and shall be set forth in the
Prospectus and Statement of Additional Information of the Fund,
as amended from time to time, under the Securities Act of 1933,
as amended and/or the Investment Company Act of 1940, as amended.

The Declaration of Trust is hereby amended to the extent necessary to
reflect the establishment of such additional Series of shares.

The Declaration of Trust is also hereby amended pursuant to Section 8.3
thereof to change the name of the Trust to "John Hancock Capital Series"
effective as of October 1, 1993. The Trust's existing Series shall continue to
be a separate Series of the Trust for all purposes of the Declaration of Trust
and shall continue to be designated "John Hancock Growth Fund."

Capitalized terms not otherwise defined herein shall have the meanings set
forth in the Declaration of Trust.

IN WITNESS WHEREOF, the undersigned have executed this instrument this
14th day of September, 1993.

/s/ Edward J. Boudreau, Jr. /s/William J. Cosgrove
- --------------------------- ------------------------
Edward J. Boudreau, Jr. William J. Cosgrove
34 Swan Road 20 Buttonwood Place
Winchester, MA 01890 Saddle River, NJ 07458

/s/ Dennis S. Aronowitz /s/ Bayard Henry
- ----------------------- ---------------------
Dennis S. Aronowitz Bayard Henry
29 Lee Road 65 Goddard Avenue
Chestnut Hill, MA 02167 Brookline, MA 02146

/s/ Richard P. Chapman, Jr. /s/ Richard S. Scipione
- --------------------------- -----------------------
Richard P. Chapman, Jr. Richard S. Scipione
107 Upland Road 4 Sentinel Road
Brookline, MA 02146 Hingham, MA 02043

/s/ Francis C. Cleary, Jr. /s/ Edward J. Spellman
- ------------------------- ----------------------
Francis C. Cleary, Jr. Edward J. Spellman
58 Avalon Road 175 East Centre Street, #501
Needham, MA 02192 Quincy, MA 02169

The Declaration, a copy of which, together with all amendments thereto, is
on file in the office of the Secretary of State of The Commonwealth of
Massachusetts, provides that no Trustee, officer, employee or agent of the Trust
or any Series thereof shall be subject to any personal liability whatsoever to
any Person, other than to the Trust or its shareholders, in connection with
Trust Property or the affairs of the Trust, save only that arising from bad
faith, willful misfeasance, gross negligence or reckless disregard of his duties
with respect to such Person; and all such Persons shall look solely to the Trust
Property, or to the Trust Property of one or more specific Series of the Trust
if the claim arises from the conduct of such Trustee, officer, employee or agent
with respect to only such Series, for satisfaction of claims of any nature
arising in connection with the affairs of the Trust.

BY-LAWS

JOHN HANCOCK CAPITAL SERIES

As Adopted on December 8, 1993

<PAGE>

Table of Contents

Page

ARTICLE I -- Definitions................................................1

ARTICLE II -- Offices and Seal...........................................1

Section 2.1 Principal Office..................................1
Section 2.2 Other Offices.....................................1
Section 2.3 Seal..............................................1

ARTICLE III -- Shareholders..............................................2

Section 3.1 Meetings..........................................2
Section 3.2 Place of Meeting..................................2
Section 3.3 Notice of Meetings................................2
Section 3.4 Shareholders Entitled to Vote.....................2
Section 3.5 Quorum............................................3
Section 3.6 Treatment of Abstentions..........................3
Section 3.7 Voting of Shares Held in Street Name..............3
Section 3.8 Adjournment.......................................3
Section 3.9 Proxies...........................................3
Section 3.10 Inspection of Records.............................4
Section 3.11 Record Dates......................................4

ARTICLE IV -- Meetings of Trustees.......................................4

Section 4.1 Regular Meetings..................................4
Section 4.2 Special Meetings..................................4
Section 4.3 Notice............................................4
Section 4.4 Waiver of Notice..................................5
Section 4.5 Quorum, Adjournment and Voting....................5
Section 4.6 Compensation......................................5

ARTICLE V -- Executive Committee and Other
Committees..............................................5

Section 5.1 How Constituted...................................5
Section 5.2 Powers of the Executive
Committee.......................................6
Section 5.3 Other Committees of Trustees......................6
Section 5.4 Proceedings, Quorum and Manner of
Acting..........................................6
Section 5.5 Other Committees..................................6

ARTICLE VI -- Officers ..................................................6

Section 6.1 General...........................................6
Section 6.2 Election, Term of Office and
Qualifications..................................7
Section 6.3 Resignations and Removals.........................7
Section 6.4 Vacancies and Newly Created
Offices.........................................7
Section 6.5 Chairman of the Board.............................7
Section 6.6 President.........................................8
Section 6.7 Vice President....................................8
Section 6.8 Chief Financial Officer, Treasurer
and Assistant Treasurers........................8
Section 6.9 Secretary and Assistant
Secretaries.....................................9
Section 6.10 Subordinate Officers..............................9
Section 6.11 Remuneration......................................9
Section 6.12 Surety Bonds......................................9

ARTICLE VII -- Execution of Instruments; Voting of
Securities.......................................10

Section 7.1 Execution of Instruments.........................10
Section 7.2 Voting of Securities.............................10

ARTICLE VIII -- Fiscal Year, Accountants................................10

Section 8.1 Fiscal Year......................................10
Section 8.2 Accountants......................................10

ARTICLE IX -- Amendments................................................11

Section 9.1 General..........................................11

<PAGE>

BY-LAWS

JOHN HANCOCK CAPITAL SERIES

ARTICLE I

Definitions

The terms "Class," "Commission," "Declaration," "Interested Person," "1940
Act," "Series," "Shareholder," "Shares," "Trust," "Trust Property" and
"Trustees" have the meanings given them in the Amended and Restated Declaration
of Trust of John Hancock Capital Series dated February 28, 1992, as amended from
time to time.

ARTICLE II

Offices and Seal

Section 2.1. Principal Office. The principal office of the Trust
shall be located in the City of Boston, The Commonwealth of Massachusetts.

Section 2.2. Other Offices. The Trust may establish and maintain such
other offices and places of business within or without The Commonwealth of
Massachusetts as the Trustees may from time to time determine.

Section 2.3. Seal. The seal of the Trust shall be circular in form and
shall bear the name of the Trust, the year of its organization, and the words
"Common Seal" and "A Massachusetts Voluntary Association." The form of the seal
shall be subject to alteration by the Trustees and the seal may be used by
causing it or a facsimile to be impressed or affixed or printed or otherwise
reproduced. Any officer or Trustee of the Trust shall have authority to affix
the seal of the Trust to any document requiring the same but, unless otherwise
required by the Trustees, the seal shall not be necessary to be placed on, and
its absence shall not impair the validity of, any document, instrument or other
paper executed and delivered by or on behalf of the Trust.

ARTICLE III

Shareholders

Section 3.1. Meetings. A Shareholders' meeting for the election of
Trustees and the transaction of other proper business shall be held when
authorized or required by the Declaration.

Section 3.2. Place of Meeting. All Shareholders' meetings shall be held at
such place within or without The Commonwealth of Massachusetts as the Trustees
shall designate.

Section 3.3. Notice of Meetings. Notice of all Shareholders' meetings,
stating the time, place and purpose of the meeting, shall be given by the
Secretary or an Assistant Secretary of the Trust by mail to each Shareholder
entitled to notice of and to vote at such meeting at his address as recorded on
the register of the Trust. Such notice shall be mailed at least 10 days and not
more than 60 days before the meeting. Such notice shall be deemed to be given
when deposited in the United States mail, with postage thereon prepaid. Any
adjourned meeting may be held as adjourned without further notice. No notice
need be given (A) to any Shareholder if a written waiver of notice, executed
before or after the meeting by such Shareholder or his attorney thereunto duly
authorized, is filed with the records of the meeting, or (B) to any Shareholder
who attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him. A waiver of notice need not specify the purposes of
the meeting.

Section 3.4. Shareholders Entitled to Vote. If, pursuant to Section 3.11
hereof, a record date has been fixed for the determination of Shareholders
entitled to notice of and to vote at any Shareholders' meeting, each Shareholder
of the Trust shall be entitled to vote, in accordance with the applicable
provisions of the Declaration, in person or by proxy, each Share or fraction
thereof standing in his name on the register of the Trust at the time of
determining net asset value on such record date. If the Declaration or the 1940
Act requires that Shares be voted by Series or Class, each Shareholder shall
only be entitled to vote, in person or by proxy, each Share or fraction thereof
of such Series or Class standing in his name on the register of the Trust at the
time of determining net asset value on such record date. If no record date has
been fixed for the determination of Shareholders so entitled, the record date
for the determination of Shareholders entitled to notice of and to vote at a
Shareholders' meeting shall be at the close of business on the day on which
notice of the meeting is mailed or, if notice is waived by all Shareholders, at
the close of business on the tenth day next preceding the day on which the
meeting is held.

Section 3.5. Quorum. The presence at any Shareholders' meeting in
person or by proxy, of Shareholders entitled to cast a majority of the votes
thereat shall be a quorum for the transaction of business.

Section 3.6. Treatment of Abstentions. Shares represented in person or by
proxy, including Shares which abstain or do not vote with respect to one or more
proposals presented for shareholder approval, will be counted for purposes of
determining whether a quorum is present. Abstentions will be treated as Shares
that are present and entitled to vote with respect to any particular proposal,
but will not be counted as a vote in favor of such proposal. An abstention from
voting on a proposal will have the same effect as a vote against such proposal.

Section 3.7. Voting of Shares Held in Street Name. If a broker or nominee
holding Shares in "street name" indicates on a proxy that it does not have
discretionary authority to vote those Shares as to a particular proposal
presented for shareholder approval, those Shares will be considered to be
outstanding, but will not be considered as present and entitled to vote with
respect to such proposal.

Section 3.8. Adjournment. The holders of a majority of the Shares entitled
to vote at the meeting and present thereat, in person or by proxy, whether or
not constituting a quorum, or, if no Shareholder entitled to vote is present
thereat, in person or by proxy, any Trustee or officer present thereat entitled
to preside or act as Secretary of such meeting, may adjourn the meeting sine die
or from time to time. Any business that might have been transacted at the
meeting originally called may be transacted at any such adjourned meeting at
which a quorum is present.

Section 3.9. Proxies. Shares may be voted in person or by proxy. When any
Share is held jointly by several persons, any one of them may vote at any
meeting, in person or by proxy in respect of such Share unless at or prior to
exercise of the vote the Trustees receive a specific written notice to the
contrary from any one of them. If more than one such joint owner shall be
present at such meeting, in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote cast, such vote shall not be received
in respect of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise
and the burden of proving invalidity shall rest on the challenger.

Section 3.10. Inspection of Records. The records of the Trust shall
be open to inspection by Shareholders to the same extent as is permitted
shareholders of a Massachusetts business corporation.

Section 3.11. Record Dates. The Trustees may fix in advance a date as a
record date for the purpose of determining the Shareholders who are entitled to
notice of and to vote at any meeting or any adjournment thereof, or to express
consent in writing without a meeting to any action of the Trustees, or who shall
receive payment of any dividend or of any other distribution, or for the purpose
of any other lawful action, provided that such record date shall be not more
than 60 days before the date on which the particular action requiring such
determination of Shareholders is to be taken. In such case, subject to the
provisions of Section 3.4, each eligible Shareholder of record on such record
date shall be entitled to notice of, and to vote at, such meeting or
adjournment, or to express such consent, or to receive payment of such dividend
or distribution or to take such other action, as the case may be,
notwithstanding any transfer of Shares on the register of the Trust after the
record date.

ARTICLE IV

Meetings of Trustees

Section 4.1. Regular Meetings. The Trustees from time to time shall
provide by resolution for the holding of regular meetings for the election of
officers and the transaction of other proper business and shall fix the place
and time for such meetings to be held within or without The Commonwealth of
Massachusetts.

Section 4.2. Special Meetings. Special meetings of the Trustees shall be
held whenever called by the Chairman of the Board, the President (or, in the
absence or disability of the President, by any Vice President), the Treasurer,
the Secretary or two or more Trustees, at the time and place within or without
The Commonwealth of Massachusetts specified in the respective notices or waivers
of notice of such meetings.

Section 4.3. Notice. Notice of regular and special meetings, stating the
time and place, shall be (a) mailed to each Trustee at his residence or regular
place of business at least five days before the day on which the meeting is to
be held or (b) caused to be delivered to him personally or to be transmitted to
him by telegraph, cable or wireless at least two days before the day on which
the meeting is to be held. Unless otherwise required by law, such notice need
not include a statement of the business to be transacted at, or the purpose of,
the meeting. No notice of adjournment of a meeting of the Trustees to another
time or place need be given if such time and place are announced at such
meeting.

Section 4.4. Waiver of Notice. Notice of a meeting need not be given to
any Trustee if a written waiver of notice, executed by him before or after the
meeting, is filed with the records of the meeting, or to any Trustee who attends
the meeting without protesting prior thereto or at its commencement the lack of
notice to him. A waiver of notice need not specify the purposes of the meeting.

Section 4.5. Quorum, Adjournment and Voting. At all meetings of the
Trustees, the presence of a majority of the total number of Trustees authorized,
but not less than two, shall constitute a quorum for the transaction of
business. A majority of the Trustees present, whether or not constituting a
quorum, may adjourn the meeting, from time to time. The action of a majority of
the Trustees present at a meeting at which a quorum is present shall be the
action of the Trustees unless the concurrence of a greater proportion is
required for such action by law, by the Declaration or by these By-Laws.

Section 4.6. Compensation. Each Trustee may receive such remuneration
for his services as such as shall be fixed from time to time by resolution of
the Trustees.

ARTICLE V

Executive Committee and Other Committees

Section 5.1. How Constituted. The Trustees may, by resolution, designate
one or more committees, including an Executive Committee, an Audit Committee and
a Committee on Administration, each consisting of at least two Trustees. The
Trustees may, by resolution, designate one or more alternate members of any
committee to serve in the absence of any member or other alternate member of
such committee. Each member and alternate member of a committee shall be a
Trustee and shall hold office at the pleasure of the Trustees. The Chairman of
the Board and the President shall be members of the Executive Committee.

Section 5.2. Powers of the Executive Committee. Unless otherwise provided
by resolution of the Trustees, the Executive Committee shall have and may
exercise all of the power and authority of the Trustees, provided that the power
and authority of the Executive Committee shall be subject to the limitations
contained in the Declaration.

Section 5.3. Other Committees of Trustees. To the extent provided by
resolution of the Trustees, other committees shall have and may exercise any of
the power and authority that may lawfully be granted to the Executive Committee.

Section 5.4. Proceedings, Quorum and Manner of Acting. In the absence of
appropriate resolution of the Trustees, each committee may adopt such rules and
regulations governing its proceedings, quorum and manner of acting as it shall
deem proper and desirable, provided that the quorum shall not be less than two
Trustees. In the absence of any member or alternate member of any such
committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint a Trustee to act in the place of such absent
member or alternate member. Members and alternate members of a committee may
participate in a meeting of such committee by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation in a meeting by these means
shall constitute presence in person at the meeting.

Section 5.5. Other Committees. The Trustees may appoint other committees,
each consisting of one or more persons who need not be Trustees. Each such
committee shall have such powers and perform such duties as may be assigned to
it from time to time by the Trustees, but shall not exercise any power which may
lawfully be exercised only by the Trustees or a committee thereof.

ARTICLE VI

Officers

Section 6.1. General. The officers of the Trust shall be a Chairman of the
Board, a President, a Secretary, and a Treasurer, and may include one or more
Vice Presidents, one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 6.10 of this Article VI.

Section 6.2. Election, Term of Office and Qualifications. The officers of
the Trust and any Series thereof (except those appointed pursuant to Section
6.10) shall be elected by the Trustees at their first meeting. If any officer or
officers are not elected at any such meeting, such officer or officers may be
elected at any subsequent regular or special meeting of the Trustees. Except as
provided in Sections 6.3 and 6.4 of this Article VI, each officer elected by the
Trustees shall hold office until his successor shall have been chosen and
qualified. No person shall hold more than one office of the Trust or any Series
thereof, except that the President may hold the office of Chairman of the Board
and any Treasurer, Assistant Treasurer, Secretary or Assistant Secretary of the
Trust may also hold the office of Vice President. The Chairman of the Board and
the President shall be selected from among the Trustees and may hold such
offices only so long as they continue to be Trustees. Any Trustee or officer may
be but need not be a Shareholder of the Trust.

Section 6.3. Resignations and Removals. Any officer may resign his office
at any time by delivering a written resignation to the Trustees, the President,
the Secretary or any Assistant Secretary. Unless otherwise specified therein,
such resignation shall take effect upon delivery. Any officer may be removed
from office with or without cause by the vote of a majority of the Trustees at
any regular meeting or any special meeting. Except to the extent expressly
provided in a written agreement with the Trust, no officer resigning and no
officer removed shall have any right to any compensation for any period
following his resignation or removal or any right to damages on account of such
removal.

Section 6.4. Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal, disqualification
or other cause, or if any new office shall be created, such vacancies or newly
created offices may be filled by the Trustees at any regular or special meeting
or, in the case of any office created pursuant to Section 6.10 of this Article
VI, by any officer upon whom such power shall have been conferred by the
Trustees.

Section 6.5. Chairman of the Board. The Chairman of the Board shall be the
chief executive officer of the Trust and each Series thereof, shall preside at
all Shareholders' meetings and at all meetings of the Trustees and shall be ex
officio a member of all committees of the Trustees and each Series thereof,
except the Audit Committee. Subject to the supervision of the Trustees, he shall
have general charge of the business of the Trust and each Series thereof, the
Trust Property and the officers, employees and agents of the Trust and each
Series thereof. He shall have such other powers and perform such other duties as
may be assigned to him from time to time by the Trustees.

Section 6.6. President. The President shall be the chief operating officer
of the Trust and each Series thereof and, at the request of or in the absence or
disability of the Chairman of the Board, he shall preside at all Shareholders'
meetings and at all meetings of the Trustees and shall in general exercise the
powers and perform the duties of the Chairman of the Board. Subject to the
supervision of the Trustees and such direction and control as the Chairman of
the Board may exercise, he shall have general charge of the operations of the
Trust and each Series and Class thereof and its officers, employees and agents.
He shall exercise such other powers and perform such other duties as from time
to time may be assigned to him by the Trustees.

Section 6.7. Vice President. The Trustees may, from time to time,
designate and elect one or more Vice Presidents who shall have such powers and
perform such duties as from time to time may be assigned to them by the Trustees
or the President. At the request or in the absence or disability of the
President, the Vice President (or, if there are two or more Vice Presidents,
then the senior in length of time in office of the Vice Presidents present and
able to act) may perform all the duties of the President and, when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President.

Section 6.8 Chief Financial Officer, Treasurer and Assistant
Treasurers. The Chief Financial Officer shall be the principal financial and
accounting officer of the Trust and each Series thereof and shall have general
charge of the finances and books of account of the Trust and each Series and
Class thereof. Except as otherwise provided by the Trustees, he shall have
general supervision of the funds and property of the Trust and each Series
thereof and of the performance by the Custodian, appointed pursuant to Section
3.6 of the Declaration of its duties with respect thereto. The Chief Financial
Officer shall render a statement of condition of the finances of the Trust and
each Series and Class thereof to the Trustees as often as they shall require the
same and he shall in general perform all the duties incident to the office of
the Chief Financial Officer and such other duties as from time to time may be
assigned to him by the Trustees.

The Treasurer or any Assistant Treasurer may perform such duties of the
Chief Financial Officer as the Chief Financial Officer or the Trustees may
assign. In the absence of the Chief Financial Officer, the Treasurer may perform
all duties of the Chief Financial Officer. In the absence of the Chief Financial
Officer and the Treasurer, any Assistant Treasurer may perform all duties of the
Chief Financial Officer.

Section 6.9. Secretary and Assistant Secretaries. The Secretary shall
attend to the giving and serving of all notices of the Trust and each Series and
Class thereof and shall record all proceedings of the meetings of the
Shareholders and Trustees in one or more books to be kept for that purpose. He
shall keep in safe custody the seal of the Trust, and shall have charge of the
records of the Trust and each Series and Class thereof, including the register
of shares and such other books and papers as the Trustees may direct and such
books, reports, certificates and other documents required by law to be kept, all
of which shall at all reasonable times be open to inspection by any Trustee. He
shall perform such other duties as appertain to his office or as may be required
by the Trustees.

Any Assistant Secretary may perform such duties of the Secretary as the
Secretary or the Trustees may assign, and, in the absence of the Secretary, he
may perform all the duties of the Secretary.

Section 6.10. Subordinate Officers. The Trustees from time to time may
appoint such other subordinate officers or agents as they may deem advisable,
each of whom shall have such title, hold office for such period, have such
authority and perform such duties as the Trustees may determine. The Trustees
from time to time may delegate to one or more officers or agents the power to
appoint any such subordinate officers or agents and to prescribe their
respective rights, terms of office, authorities and duties.

Section 6.11. Remuneration. The salaries or other compensation of the
officers of the Trust and any Series thereof shall be fixed from time to time by
resolution of the Trustees, except that the Trustees may by resolution delegate
to any person or group of persons the power to fix the salaries or other
compensation of any subordinate officers or agents appointed in accordance with
the provisions of Section 6.10 hereof.

Section 6.12. Surety Bonds. The Trustees may require any officer or agent
of the Trust or any Series thereof to execute a bond (including, without
limitation, any bond required by the 1940 Act and the rules and regulations of
the Commission) to the Trustees in such sum and with such surety or sureties as
the Trustees may determine, conditioned upon the faithful performance of his
duties to the Trust, including responsibility for negligence and for the
accounting of any of the Trust Property that may come into his hands. In any
such case, a new bond of like character shall be given at least every six years,
so that the date of the new bond shall not be more than six years subsequent to
the date of the bond immediately preceding.

ARTICLE VII

Execution of Instruments, Voting of Securities

Section 7.1. Execution of Instruments. All deeds, documents, transfers,
contracts, agreements, requisitions or orders, promissory notes, assignments,
endorsements, checks and drafts for the payment of money by the Trust or any
Series thereof, and other instruments requiring execution either in the name of
the Trust or the names of the Trustees or otherwise may be signed by the
Chairman, the President, a Vice President or the Secretary and by the Chief
Financial Officer, Treasurer or an Assistant Treasurer, or as the Trustees may
otherwise, from time to time, authorize, provided that instructions in
connection with the execution of portfolio securities actions may be signed by
one such officer. Any such authorization may be general or confined to specific
instances.

Section 7.2. Voting of Securities. Unless otherwise ordered by the
Trustees, the Chairman, the President or any Vice President shall have full
power and authority on behalf of the Trustees to attend and to act and to vote,
or in the name of the Trustees to execute proxies to vote, at any meeting of
stockholders of any company in which the Trust or any Series thereof may hold
stock. At any such meeting such officer shall possess and may exercise (in
person or by proxy) any and all rights, powers, and privileges incident to the
ownership of such stock. The Trustees may by resolution from time to time confer
like powers upon any other person or persons.

ARTICLE VIII

Fiscal Year; Accountants

Section 8.1. Fiscal Year. The fiscal year of the Trust and any Series
thereof shall be established by resolution of the Trustees.

Section 8.2. Accountants.

(a) The Trustees shall employ a public accountant or firm of independent
public accountants as their accountant to examine the accounts of the Trust and
to sign and certify at least annually financial statements filed by the Trust.
The accountant's certificates and reports shall be addressed both to the
Trustees and to the Shareholders.

(b) A majority of the Trustees who are not Interested Persons of the Trust
shall select the accountant at any meeting held before the initial registration
statement of the Trust becomes effective, and thereafter shall select the
accountant annually by votes, cast in person, at a meeting held within 30 days
before or after the beginning of the fiscal year of the Trust.

(c) Any vacancy occurring due to the death or resignation of the
accountant, may be filled at a meeting called for the purpose by the vote, cast
in person, of a majority of those Trustees who are not Interested Persons of the
Trust.

ARTICLE IX

Amendments

Section 9.1. General. These By-Laws may be amended or repealed, in
whole or in part, by a majority of the Trustees then in office at any meeting
of the Trustees, or by one or more writings signed by such a majority.

John Hancock Capital Series
John Hancock Cash Management Fund
John Hancock Income Securities Trust
John Hancock Investors Trust
John Hancock Limited Term Government Fund
John Hancock Sovereign Bond Fund
John Hancock Special Equities Fund
John Hancock Strategic Series
John Hancock Tax-Exempt Income Fund
John Hancock Tax-Exempt Series Fund
John Hancock World Fund

AMENDMENT TO BY-LAWS

RESOLVED, that the By-Laws of the Trust be and hereby are amended to
create the office of Vice Chairman of the Trust by adding the following as
Article VI, Sub-Section 6.5A of the By-Laws:

Section 6.5A. Powers and Duties of the Vice Chairman. The Trustees may, but
need not, appoint one or more Vice Chairmen of the Trust. A Vice Chairman
shall be an executive officer of the Trust and shall have the powers and
duties of a Vice President of the Trust, as provided in Section 6.7 of this
Article VI. The Vice Chairman shall perform such duties as may be assigned
to him or her from time to time by the Trustees of the Chairman.

bylaws\94amends.doc

JOHN HANCOCK CAPITAL SERIES -
JOHN HANCOCK GROWTH FUND
A MASSACHUSETTS VOLUNTARY ASSOCIATION
CLASS A

fully paid and non-assessable shares of beneficial interest, without par value,
in John Hancock Capital Series - John Hancock Growth Fund (the "Fund"), a
Massachusetts voluntary association established by the Amended and Restated
Declaration of Trust dated February 28, 1992, as amended from time to time, a
copy of which, together with any amendments thereto (the "Declaration"), is on
file with the Secretary of the Commonwealth of Massachusetts. The provisions of
the Declaration are hereby incorporated in and made a part of this certificate
as fully as if set forth herein in their entirety, to all of which provisions
the holder and every transferee or assignee hereof by accepting or holding the
same agrees to be bound. This certificate, and the shares represented hereby are
negotiable and transferable on the books of the Fund by the registered holder
hereof in person or by attorney upon surrender of this certificate properly
endorsed. This certificate is issued by the Trustees of John Hancock Capital
Series - John Hancock Growth Fund, acting not individually but as such Trustees,
and is not valid until countersigned by the Transfer Agent.

The name John Hancock Capital Series - John Hancock Growth Fund is the
designation of the Trustees under the Amended and Restated Declaration of Trust
dated February 28, 1992, as amended from time to time. The obligations hereunder
are not personally binding upon, nor shall resort be had to the private property
of, any of the Trustees, shareholders, officers, employees or agents of the
Fund, but the Fund property or a specific portion thereof only shall be bound.

Change date 10/1/93...jjm

Mass Fund

signed by Boudreau, President

Fund 20

JOHN HANCOCK CAPITAL SERIES -

JOHN HANCOCK GROWTH FUND
A MASSACHUSETTS VOLUNTARY ASSOCIATION
CLASS B

Update date 1/3/94 jjm

Mass Fund

Signed by Boudreau, Chairman

Fund 120
<PAGE>

JOHN HANCOCK CAPITAL SERIES -

JOHN HANCOCK SPECIAL VALUE FUND
A MASSACHUSETTS VOLUNTARY ASSOCIATION
CLASS A

fully paid and non-assessable shares of beneficial interest, without par value,
in John Hancock Capital Series - John Hancock Special Value Fund (the "Fund"), a
Massachusetts voluntary association established by the amended and restated
Declaration of Trust dated February 28, 1992, as amended from time to time, a
copy of which, together with any amendments thereto (the "Declaration"), is on
file with the Secretary of the Commonwealth of Massachusetts. The provisions of
the Declaration are hereby incorporated in and made a part of this certificate
as fully as if set forth herein in their entirety, to all of which provisions
the holder and every transferee or assignee hereof by accepting or holding the
same agrees to be bound. This certificate, and the shares represented hereby are
negotiable and transferable on the books of the Fund by the registered holder
hereof in person or by attorney upon surrender of this certificate properly
endorsed. This certificate is issued by the Trustees of John Hancock Capital
Series - John Hancock Special Value Fund, acting not individually but as such
Trustees, and is not valid until countersigned by the Transfer Agent.

The name John Hancock Capital Series - John Hancock Special Value Fund is the
designation of the Trustees under the amended and restated Declaration of Trust
dated February 28, 1992, as amended from time to time. The obligations hereunder
are not personally binding upon, nor shall resort be had to the private property
of, any of the Trustees, shareholders, officers, employees or agents of the
Fund, but the Fund property or a specific portion thereof only shall be bound.

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

Change date 9/10/93...fpb

Mass Fund

Signed by Boudreau, Chairman

Fund 37

<PAGE>

JOHN HANCOCK CAPITAL SERIES -

JOHN HANCOCK SPECIAL VALUE FUND
A MASSACHUSETTS VOLUNTARY ASSOCIATION
CLASS B

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

Change date 9/10/93...fpb

Mass Fund

signed by Boudreau, Chairman

Fund 137

JOHN HANCOCK CAPITAL SERIES

Investment Management Contract

Dated January 1, 1994

<PAGE>

JOHN HANCOCK CAPITAL SERIES

Boston, Massachusetts

John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199

Investment Management Contract

Ladies and Gentlemen:

John Hancock Capital Series (the "Trust"), of which John Hancock Growth
Fund (the "Fund") is a series, has been organized as a business trust under the
laws of The Commonwealth of Massachusetts to engage in the business of an
investment company. The Trust's shares of beneficial interest may be classified
into series, each series representing the entire undivided interest in a
separate portfolio of assets. Series may be established or terminated from time
to time by action of the Board of Trustees of the Trust.

The Board of Trustees of the Trust (the "Trustees") has selected John
Hancock Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Fund, and to provide certain other services, as more fully
set forth below, and the Adviser is willing to provide such advice, management
and services under the terms and conditions hereinafter set forth.

Accordingly, the Adviser and the Trust, on behalf of the Fund, agree as
follows:

1. Delivery of Documents. The Trust has furnished the Adviser with
copies, properly certified or otherwise authenticated, of each of the
following:

(a) Amended and Restated Declaration of Trust of the Trust, dated
February 28, 1992 (the "Declaration of Trust");

(b) By-Laws of the Trust as in effect on the date hereof;

(c) Resolutions of the Trustees selecting the Adviser as investment
adviser for the Fund and approving the form of this Agreement; and

(d) commitments, limitations and undertakings made by the Fund to state
securities or "blue sky" authorities for the purpose of qualifying
shares of the Fund for sale in such states.

The Trust will furnish to the Adviser from time to time copies, properly
certified or otherwise authenticated, of all amendments of or supplements to the
foregoing, if any.

2. Investment and Management Services. The Adviser will use its best efforts to
provide to the Fund continuing and suitable investment programs with respect to
investments, consistent with the investment policies, objectives and
restrictions of the Fund. In the performance of the Adviser's duties hereunder,
subject always (x) to the provisions contained in the documents delivered to the
Adviser pursuant to Section 1, as each of the same may from time to time be
amended or supplemented, and (y) to the limitations set forth in the
registration statement of the Fund as in effect from time to time under the
Securities Act of 1933, as amended, and the Investment Company Act of 1940, as
amended (the "1940 Act"). The Adviser will, at its own expense:

(a) furnish the Fund with advice and recommendations, consistent with
the investment policies, objectives and restrictions of the Fund,
with respect to the purchase, holding and disposition of
portfolio securities, including the purchase and sale of options,
alone or in consultation with any sub-adviser or sub-advisers
appointed pursuant to this Agreement and subject to the
provisions of any sub-investment management contract respecting
the responsibilities of such sub-adviser or sub-advisers;

(b) advise the Fund in connection with policy decisions to be made by
the Trustees or any committee thereof with respect to the Fund's
investments and, as requested, furnish the Fund with research,
economic and statistical data in connection with the Fund's
investments and investment policies;

(d) submit such reports relating to the valuation of the Fund's
securities as the Trustees may reasonably request;

(e) assist the Fund in any negotiations relating to the Fund's
investments with issuers, investment banking firms, securities
brokers or dealers and other institutions or investors;

(f) consistent with the provisions of Section 7 of this Agreement,
place orders for the purchase, sale or exchange of portfolio
securities with brokers or dealers selected by the Adviser,
provided that in connection with the placing of such orders and
--------
the selection of such brokers or dealers the Adviser shall seek
to obtain execution and pricing within the policy guidelines
determined by the Trustees and set forth in the Prospectus and
Statement of Additional Information of the Fund as in effect from
time to time;

(g) provide office space and office equipment and supplies, the use of
accounting equipment when required, and necessary executive,
clerical and secretarial personnel for the administration of the
affairs of the Fund;

(h) from time to time or at any time requested by the Trustees, make
reports to the Fund of the Adviser's performance of the foregoing
services and furnish advice and recommendations with respect to
other aspects of the business and affairs of the Fund;

(i) maintain all books and records with respect to the Fund's
securities transactions required by the 1940 Act, including
sub-paragraphs (b)(5), (6), (9) and (10) and paragraph (f) of
Rule 31a-1 thereunder (other than those records being maintained
by the Fund's custodian or transfer agent) and preserve such
records for the periods prescribed therefor by Rule 31a-2 of the
1940 Act (the Adviser agrees that such records are the property
of the Fund and will be surrendered to the Fund promptly upon
request therefor);

(j) obtain and evaluate such information relating to economies,
industries, businesses, securities markets and securities as the
Adviser may deem necessary or useful in the discharge of the
Adviser's duties hereunder;

(k) oversee, and use the Adviser's best efforts to assure the
performance of the activities and services of the custodian,
transfer agent or other similar agents retained by the Fund;

(l) give instructions to the Fund's custodian as to deliveries of
securities to and from such custodian and transfer of payment of
cash for the account of the Fund; and

(m) appoint and employ one or more sub-advisers satisfactory to the Fund
under sub-investment management agreements.

3. Expenses paid by the Adviser. The Adviser will pay:

(a) the compensation and expenses of all officers and employees of
the Fund;

(b) the expenses of office rent, telephone and other utilities,
office furniture, equipment, supplies and other expenses of the
Fund;

(d) premiums for such insurance as may be agreed upon by the Adviser
and the Trustees.

4. Expenses of the Fund Not Paid by the Adviser. The Adviser will not be
required to pay any expenses which this Agreement does not expressly make
payable by it. In particular, and without limiting the generality of the
foregoing but subject to the provisions of Section 3, the Adviser will not be
required to pay under this Agreement:

(a) any and all expenses, taxes and governmental fees incurred by the
Fund prior to the effective date of the Fund's Post-Effective
Amendment No. ___;

(b) without limiting the generality of the foregoing clause (a), the
expenses of organizing the Fund (including without limitation,
legal, accounting and auditing fees and expenses incurred in
connection with the matters referred to in this clause (b)), of
initially registering shares of the Fund under the Securities Act of
1933, as amended, and of qualifying the shares for sale under state
securities laws for the initial offering and sale of shares;

(c) the compensation and expenses of Trustees who are not interested
persons (as used in this Agreement, such term shall have the meaning
specified in the 1940 Act) of the Adviser and of independent
advisers, independent contractors, consultants, managers and other
unaffiliated agents employed by the Fund other than through the
Adviser;

(d) legal, accounting and auditing fees and expenses of the Fund;

(e) the fees and disbursements of custodians and depositories of the
Fund's assets, transfer agents, disbursing agents, plan agents
and registrars;

(f) taxes and governmental fees assessed against the Fund's assets
and payable by the Fund;

(g) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders of the Fund;

(h) brokers' commissions and underwriting fees; and

(i) the expense of periodic calculations of the net asset value of
the shares of the Fund.

5. Compensation of the Adviser. For all services to be rendered, facilities
furnished and expenses paid or assumed by the Adviser as herein provided, the
Fund will pay to the Adviser monthly in arrears a fee based on a stated
percentage of the average of the daily net assets of the Fund for the preceding
month as set forth below:

Net Asset Value Annual Rate

First $250,000,000 0.80%
Next $250,000,000 0.75%
Amounts over $500,000,000 0.70%

The "average daily net assets" of the Fund shall be determined on the
basis set forth in the Fund's Prospectus or otherwise consistent with the 1940
Act and the regulations promulgated thereunder. The Adviser will receive a pro
rata portion of such monthly fee for any periods in which the Adviser serves as
investment adviser to the Fund for less than a full month.

In the event that normal operating expenses of the Fund, exclusive of
certain expenses prescribed by state law, are in excess of any limitation
imposed by the law of a state where the Fund is registered to sell shares of
beneficial interest, the fee payable to the Adviser will be reduced to the
extent required by law, and the Adviser will make any additional arrangements
that the Adviser is required by law to make.

In addition to the foregoing, the Adviser may from time to time agree not
to impose all or a portion of its fee otherwise payable hereunder (in advance of
the time such fee or portion thereof would otherwise accrue) and/or undertake to
pay or reimburse the Fund for all or a portion of its expenses not otherwise
required to be borne or reimbursed by the Adviser. Any such fee reduction or
undertaking may be discontinued or modified by the Adviser at any time.

6. Other Activities of the Adviser and Its Affiliates. Nothing herein contained
shall prevent the Adviser or any affiliate or associate of the Adviser from
engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity, whether or not having
investment policies or portfolios similar to the Fund's; and it is specifically
understood that officers, directors and employees of the Adviser and those of
its parent company, John Hancock Mutual Life Insurance Company, or other
affiliates may continue to engage in providing portfolio management services and
advice to other investment companies, whether or not registered, to other
investment advisory clients of the Adviser or of its affiliates and to said
affiliates themselves.

7. Avoidance of Inconsistent Position. In connection with purchases or sales of
portfolio securities for the account of the Fund, neither the Adviser nor any of
its investment management subsidiaries, nor any of the Adviser's or such
investment management subsidiaries' directors, officers or employees will act as
principal or agent or receive any commission, except as may be permitted by the
1940 Act and rules and regulations promulgated thereunder. If any occasions
shall arise in which the Adviser advises persons concerning the shares of the
Fund, the Adviser will act solely on its own behalf and not in any way on behalf
of the Fund.

Nothing herein contained shall limit or restrict the Adviser or any of its
officers, affiliates or employees from buying, selling or trading in any
securities for its or their own account or accounts. The Fund acknowledges that
the Adviser and its officers, affiliates, and employees, and its other clients
may at any time have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of hereunder.
The Adviser shall have no obligation to acquire with respect to the Fund, a
position in any investment which the Adviser, its officers, affiliates or
employees may acquire for its or their own accounts or for the account of
another client, if in the sole discretion of the Adviser, it is not feasible or
desirable to acquire a position in such investment on behalf of the Fund.
Nothing herein contained shall prevent the Adviser from purchasing or
recommending the purchase of a particular security for one or more funds or
clients while other funds or clients may be selling the same security.

8. No Partnership or Joint Venture. Neither the Trust, the Fund nor the Adviser
are partners of or joint venturers with each other and nothing herein shall be
construed so as to make them such partners or joint venturers or impose any
liability as such on any of them.

9. Name of the Fund. The Fund may use the name "John Hancock" or any name
derived from or similar to the name "John Hancock Advisers, Inc." or "John
Hancock Mutual Life Insurance Company" only for so long as this Agreement
remains in effect. At such time as this Agreement shall no longer be in effect,
the Fund will (to the extent that it lawfully can) cease to use such a name or
any other name indicating that the Fund is advised by or otherwise connected
with the Adviser. The Fund acknowledges that it has adopted the name "John
Hancock Growth Fund" through permission of John Hancock Mutual Life Insurance
Company, a Massachusetts insurance company, and agrees that John Hancock Mutual
Life Insurance Company reserves to itself and any successor to its business the
right to grant the non-exclusive right to use the name "John Hancock" or any
similar name to any other corporation or entity, including but not limited to
any investment company of which John Hancock Mutual Life Insurance Company or
any subsidiary or affiliate thereof shall be the investment adviser.

10. Limitation of Liability of the Adviser. The Adviser shall not be liable for
any error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on the part of
the Adviser in the performance of its duties or from reckless disregard by it of
its obligations and duties under this Agreement. Any person, even though also
employed by the Adviser, who may be or become an employee of and paid by the
Fund shall be deemed, when acting within the scope of his employment by the
Fund, to be acting in such employment solely for the Fund and not as the
Adviser's employee or agent.

11. Duration and Termination of this Agreement. This Agreement shall remain in
force until the second anniversary of the date upon which this Agreement was
executed by the parties hereto, and from year to year thereafter, but only so
long as such continuance is specifically approved at least annually by (a) a
majority of the Trustees who are not interested persons of the Adviser or (other
than as Board members) of the Fund, cast in person at a meeting called for the
purpose of voting on such approval, and (b) either (i) the Trustees or (ii) a
majority of the outstanding voting securities of the Fund. This Agreement may,
on 60 days' written notice, be terminated at any time without the payment of any
penalty by the Fund by vote of a majority of the outstanding voting securities
of the Fund, by the Trustees or by the Adviser. Termination of this Agreement
shall not be deemed to terminate or otherwise invalidate any provisions of any
contract between the Adviser and any other series of the Trust. This Agreement
shall automatically terminate in the event of its assignment. In interpreting
the provisions of this Section 11, the definitions contained in Section 2(a) of
the 1940 Act (particularly the definitions of "assignment," "interested person"
or "voting security") shall be applied.

12. Amendment of this Agreement. No provision of this Agreement may be changed,
waived, discharged or terminated orally, but only by an instrument in writing
signed by the party against which enforcement of the change, waiver, discharge
or termination is sought, and no amendment, transfer, assignment, sale,
hypothecation or pledge of this Agreement shall be effective until approved by
(a) the Trustees, including a majority of the Trustees who are not interested
persons of the Adviser or (other than as Board members) of the Fund, cast in
person at a meeting called for the purpose of voting on such approval, and (b) a
majority of the outstanding voting securities of the Fund, as defined in the
1940 Act.

13. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of The Commonwealth of Massachusetts.

14. Severability. The provisions of this Agreement are independent of and
separable from each other, and no provision shall be affected or rendered
invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be deemed invalid or unenforceable in whole or in part.

15. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions hereof or
otherwise affect their construction or effect. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. The name John Hancock Growth Fund is a series designation of the
Trustees under the Restated and Amended Declaration of Trust of the Trust dated
February 28, 1992, as amended from time to time. The Restated and Amended
Declaration of Trust has been filed with the Secretary of State of The
Commonwealth of Massachusetts. The obligations of the Fund are not personally
binding upon, nor shall resort be had to the private property of, any of the
Trustees, shareholders, officers, employees or agents of the Fund, but only the
Fund's property shall be bound. The Fund shall not be liable for the obligations
of any other series of the Trust.

Yours very truly,

JOHN HANCOCK CAPITAL SERIES
on behalf of John Hancock Growth Fund

By: /s/ Robert G. Freedman

Title: President

The foregoing contract is hereby agreed to as of the date hereof.

JOHN HANCOCK ADVISERS, INC.

By: /s/ Robert G. Freedman

Title: President

October 1, 1993

JOHN HANCOCK CAPITAL SERIES
on behalf of John Hancock Special Value Fund
101 Huntington Avenue
Boston, Massachusetts 02199

NM CAPITAL MANAGEMENT INC.
7510 Montgomery, N.W.
Albuquerque, New Mexico

Sub-Investment Management Contract

Dear Sirs:

John Hancock Capital Series (the "Trust") has been organized as a business
trust under the laws of The Commonwealth of Massachusetts to engage in the
business of an investment company. The Trust's shares of beneficial interest may
be classified into series, each series representing the entire undivided
interest in a separate portfolio of assets. As of the date hereof, the Trust has
two series of shares, representing interests in John Hancock Growth Fund and
John Hancock Special Value Fund.

The Trustees of the Trust (the "Trustees") have selected John Hancock
Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for John Hancock Special Value Fund (the "Fund") and to provide
certain other services, under the terms and conditions provided in the
investment management contract, dated as of the date hereof, between the Trust,
on behalf of the Fund, and the Adviser (the "Investment Management Contract").

The Adviser and the Trustees have selected NM Capital Management Inc. (the
"Sub-Adviser") to provide the Adviser and the Fund with the advice and services
set forth below, and the Sub-Adviser is willing to provide such advice and
services, subject to the review of the Trustees and overall supervision of the
Adviser, under the terms and conditions hereinafter set forth. The Sub-Adviser
hereby represents and warrants that it is registered as an investment adviser
under the Investment Advisers Act of 1940, as amended. Accordingly, the Trust,
on behalf of the Fund, and the Adviser agree with the Sub-Advisers as follows:

1. Delivery of Documents: The Trust has furnished the Sub-Adviser with
copies, properly certified or otherwise authenticated, of each of the following:

(a) Declaration of Trust of the Trust, dated February 28, 1982, as
amended and restated (the "Declaration of Trust").

(b) By-Laws of the Trust as in effect on the date hereof.

(d) Resolutions of the Trustees selecting the Adviser as investment
adviser to theFund and approving the form of the Investment
Management Contract.

(e) The Adviser's Investment Management Contract.

(f) Commitments, limitations and undertakings made by the Trust to state
"blue sky" authorities for the purpose of qualifying shares of the
Fund for sale in such states.

(g) The Fund's prospectus and statement of additional information.

The Trust will furnish the Sub-Adviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.

2. Investment Services. The Sub-Adviser will use it best efforts to
provide to the Fund continuing and suitable investment advice with respect to
investments, consistent with the investment policies, objectives and
restrictions of the Fund as set forth in the Fund's Prospectus and Statement of
Additional Information. In the performance of the Sub-Adviser's duties
hereunder, subject always (x) to the provisions contained in the documents
delivered to the Sub-Adviser pursuant to Section 1 above, as each of the same
may from time to time be amended or supplemented, and (y) to the limitations set
forth in the Trust's registration statement as in effect from time to time under
The Securities Act of 1933, as amended (the "1933 Act"), and the Investment
Company Act of 1940, as amended (the "1940 Act"), the Sub-Adviser will, at its
own expense:

(a) furnish the Adviser and the Fund with advice and recommendations,
consistent with the investment policies, objectives and restrictions
of such Fund as set forth above, with respect to the purchase,
holding and disposition of portfolio securities and other permitted
investments.

(b) advise the Fund in connection with policy decisions to be made by the
Board of Trustees or any committee thereof with respect to the Fund's
investments and, as requested, furnish the Fund with research,
economic and statistical data in connection with the Fund's
investments and investment policies;

(d) subject to prior consultation with the Adviser, assist the Fund in
any negotiations relating to the Fund's investments with issuers,
investment banking firms, securities brokers or dealers and other
institutions or investors;

(e) consistent with the provisions of Section 7 of this Contract, place
orders for the purchase, sale or exchange of portfolio securities for
the Fund's account with brokers or dealer selected by the Adviser or
the Sub-Adviser, provided that in connection with the placing of such
orders and the selection of such brokers or dealers the Sub-Adviser
shall seek to obtain execution and pricing within the policy
guidelines determined by the Trustees and set forth in the prospectus
and statement of additional information of the Fund;

(f) from time to time or at any time requested by the Adviser or the
Trustees, make reports to the Adviser or the Trust, as requested, of
the Sub-Adviser's performance of the foregoing services;

(g) subject to the supervision of the Adviser, maintain and preserve the
records required by the 1940 Act to be maintained by the Sub-Adviser
(the Sub-Adviser agrees that such records are the property of the
Trust and copies with be surrendered to the Trust promptly upon
request therefor);

(h) give instructions to the custodian of the Fund as to deliveries of
securities to and from such custodian and payments of cash for the
account of the Fund, and advise the Adviser on the same day such
instructions are given; and

(i) cooperate generally with the Fund and the Adviser to provide
information necessary for the preparation of registration statements
and periodic reports to be filed with the Securities and Exchange
Commission, including Form N-1A, periodic statements, shareholder
communications and proxy materials furnished to holders of shares of
the Fund, filing with state "blue sky" authorities and with United
States agencies responsible for tax matters, and other reports and
filings of like nature.

3. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its obligations
under this Contract, the expenses of office rent, telephone, telecommunications
and other facilities it is obligated to provide in order to perform the services
specified in Section 2, and any other expenses incurred by it in connection with
the performance of its duties hereunder.

4. Expenses of the Fund Not Paid by the Sub-Adviser. The Sub-Adviser will
not be required to pay any expenses which this Contract does not expressly state
shall be payable by the Sub-Adviser. In particular, and without limiting the
generality of the foregoing but subject to the provisions of Section 3, the
Sub-Adviser will not be required to pay:

(a) any and all expenses, taxes and governmental fees incurred by the
Trust prior to the date hereof;

(b) without limiting the generality of the foregoing clause (a), the
expenses of organizing the Trust (including without limitation legal,
accounting and auditing fees and expenses incurred in connection with
the matters referred to in this clause (b)), of initially registering
the shares of the Trust under the 1933 Act and of qualifying the
shares for sale under state securities laws for the initial offering
and sale of shares;

(c) the compensation and expenses of Trustees of the Trust, and of
independent advisers, independent contractors, consultants, managers
and other agents employed by the Trust or the Fund other than through
the Sub-Adviser;

(d) legal, accounting and auditing fees and expenses of the Trust or the
Fund;

(e) the fees or disbursements of custodians, and depositories of the
Trust or the Fund's assets, transfer agents, disbursing agents, plan
agents and registrars;

(f) taxes and governmental fees assessed against the Trust's assets and
payable by the Trust;

(g) the cost of preparing and mailing dividends, distributions, reports,
notices and proxy materials to shareholders of the Trust and the
Fund, except that the Sub-Adviser shall bear the costs of providing
the information referred to in Section 2 (i) to the Adviser;

(h) broker's commissions and underwriting fees;

(i) the expense of periodic calculation of the net asset value of shares
of the Fund.

5. Compensation of the Sub-Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Sub-Adviser as herein
provided the Adviser will pay the Sub-Adviser monthly, based on the average
daily net asset value of the Fund for the preceding month, in arrears a fee at
the annual rate of 40% of the fee received by the Adviser for managing the Fund.
The Fund shall not be liable to the Sub-Adviser for the Sub-Adviser's
compensation hereunder. Calculations of the Sub-Adviser's fee will be based on
average net asset values as provided by the Adviser.

6. Other Activities of the Sub-Adviser and Its Affiliates. Nothing herein
contained shall prevent the Sub-Adviser or any of its affiliates or associates
from engaging in any other business or from acting as investment adviser or
investment manager for any other person or entity, whether or not having
investment policies or a portfolio similar to the Fund. It is specifically
understood that officers, directors and employees of the Sub-Adviser and those
of it affiliates may engage in providing portfolio management services and
advice to other investment advisory clients of the Sub-Adviser or of its
affiliates.

7. Avoidance of Inconsistent Position. In connection with purchases or
sales of portfolio securities for the account of the Trust or the Fund, neither
the Sub-Adviser nor any of its directors, officers or employees will act as
principal or agent or receive any commission. The Sub-Adviser shall not
knowingly recommend that the Fund purchase, sell or retain securities of any
issuer in which the Sub-Adviser has a financial interest without obtaining prior
approval of the Adviser prior to the execution of any such transaction.

8. No Partnership or Joint Venture. The Trust, the Fund, the Adviser and
the Sub-Adviser are not partners of or joint venturers with each other and
nothing herein shall be construed so as to make them such partners or joint
venturers or impose any liability as such on any of them.

9. Limitation of Liability of the Sub-Advisers. The Sub-Adviser shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Trust or the Fund or the Adviser in connection with the matters to which
this contract relates, except a loss resulting from willful misfeasance, bad
faith or gross negligence on the Sub-Adviser's part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
contract. Any person, even though also employed by the Sub-Advisers, who may be
or become an employee of and paid by the Trust or the Fund shall be deemed, when
acting within the scope of his employment by the Trust or the Fund, to be acting
in such employment solely for the Trust or the Fund and not as the Sub-Adviser's
employee or agent.

10. Duration and Termination of this Contract. This Contract shall remain
in force until the second anniversary of the date upon which this contract was
executed by the parties hereto, any from year to year thereafter, but only so
long as such continuance is specifically approved at least annually by (a) a
majority of the Trustees who are not interested persons of the Advisers, of the
Sub-Adviser or (other than as Board members ) of the Trust, cast in person at a
meeting called for the purpose of voting on such approval, and (b) either (i)
the Trustees or (ii) a majority of the outstanding voting securities of the
Fund. The Contract may, on 60 days' written notice, be terminated at any time
without the payment of any penalty by the Trust on behalf of the Fund by vote of
a majority of the outstanding voting securities of the Fund or by the Board of
Trustees or by the Adviser or by the Sub-Adviser. Termination of this Contract
with respect to the Fund shall not by deemed to terminate or otherwise
invalidate any provisions of any contract between you and any other series of
the Trust. This Contract shall automatically terminate in the event of its
assignment or upon the termination of the Adviser's Investment Management
Contract. In interpreting the provisions of this Section 10, the definitions
contained in Section 2(a) of the 1940 Act (including the definitions of
"assignment," "interested person" or "voting security"), shall be applied.

11. Amendment of This Contact. No provision of this Contract may be
changed or waived orally, but only by an instrument in writing signed by the
party against which enforcement of the change or waiver is sought, and no
amendment, transfer, assignment, sale, hypothecation or pledge of this Contract
shall be effective until approved by (a) the Trustees, including a majority of
the Trustees who are not interested persons of the Adviser, the Sub-Adviser or
(other than as Board members) the Trust, cast in person at a meeting called for
the purpose of voting on such approval, and (b) a majority of the outstanding
voting securities of the Fund, as defined in the 1940 Act.

12. Miscellaneous.

(a) The captions in this Contract are included for convenience of
reference only and in no way define or limit any of the provisions
hereof or otherwise affect their construction or effect. This
Contract may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument. The name John Hancock
Capital Series is the designation of the Trustees under the
Declaration of Trust and The Declaration of Trust has been filed
with the Secretary of State of The Commonwealth of Massachusetts.
The obligations of the Trust and the Fund are not personally binding
upon, nor shall resort be had to the private property of, any of the
Trustees, shareholders, officers, employees or agents of the Trust
or the Fund, but only the Fund's property shall be bound. The Fund
shall not be liable for the obligations of any other series of the
Trust.

(b) Nothing here in contained shall limit or restrict the Sub-Adviser or
any of its officers, affiliates or employees from buying, selling or
trading in any securities for its or their own account or accounts.
The Trust and Fund acknowledge the Sub-Adviser and its officers,
affiliates and employees, and its other clients may at any time
have, acquire, increase, decrease or dispose of positions in
investments which are at the same time being acquired or disposed of
hereunder. The Sub-Adviser shall have no obligation to acquire with
respect to the Fund, a position in any investment which the
Sub-Adviser, its officers, affiliates or employees may acquire for
its or their own accounts or for the account of another client if,
in the sole discretion of the Sub-Adviser, it is not feasible or
desirable to acquire a position in such investment on behalf of the
Fund. Nothing herein contained shall prevent the Sub-Adviser from
purchasing or recommending the purchase of a particular security for
one or more funds or clients while other funds or clients may be
selling the same security.

(c) Any information supplied by the Sub-Adviser, which is not otherwise
in the public domain, in connection with the performance of its
duties hereunder is to be regarded as confidential and for use only
by the Fund and/or its agents, and only in connection with the Fund
and its investments.

<PAGE>

13. Governing Law. This Contract shall be construed in accordance with
the laws of The Commonwealth of Massachusetts and the applicable provisions of
the 1940 Act.

Yours very truly,
JOHN HANCOCK ADVISERS, INC.

By /s/Robert G. Freedman
Name:
Title

The foregoing Contract is hereby agreed to as of the date hereof.

JOHN HANCOCK CAPITAL SERIES
on behalf of
John Hancock Special Value Fund

By: /s/Thomas H. Drohan
Name:
Title:

NM CAPITAL MANAGEMENT INC.

By: /s/Anthony P. Petrucci, Executive Vice President
Name
Title:

corpsec/edgar/capsrs/subinvct.doc

August 1, 1991

John Hancock Broker Distribution Services, Inc.
Boston, Massachusetts

Distribution Agreement

Dear Sir:

John Hancock Growth Fund (the "Fund") has been organized as a business trust
under the laws of the Commonwealth of Massachusetts to engage in the business of
an investment company. The Fund's Board of Directors has selected you to act as
principal underwriter (as such term is defined in Section 2(a)(29) of the
Investment Company Act of 1940, as amended) of the shares of beneficial interest
("shares") of the Fund and you are willing, as agent for the Fund, to sell the
shares to the public, to broker-dealers or to both, in the manner and on the
conditions hereinafter set forth. Accordingly, the Fund hereby agrees with you
as follows:

1. Delivery of Documents. The Fund will furnish you promptly with copies,
properly certified or otherwise authenticated, of any registration
statements filed by it with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, or the Investment Company Act of
1940, as amended, together with any financial statements and exhibits
included therein, and all amendments or supplements thereto hereafter
filed.

2. Registration and Sale of Additional Shares. The Fund will from time to
time use its best efforts to register under the Securities Act of 1933, as
amended, such shares not already so registered as you may reasonably be
expected to sell as agent on behalf of the Fund. This Agreement relates to
the issue and sale of shares that are duly authorized and registered and
available for sale by the Fund if, but only if, the Fund sees fit to sell
them. You and the Fund will cooperate in taking such action as may be
necessary from time to time to qualify shares for sale in Massachusetts
and in any other states mutually agreeable to you and the Fund, and to
maintain such qualification if and so long as such shares are duly
registered under the Securities Act of 1933, as amended.

3. Solicitation of Orders. You will use your best efforts (but only in states
in which you may lawfully do so) to obtain from investors unconditional
orders for shares authorized for issue by the Fund and registered under
the Securities Act of 1933, as amended, provided that you may in your
discretion refuse to accept orders for such shares from any particular
applicant.

<PAGE>

4. Sale of Shares. Subject to the provisions of Sections 5 and 6 hereof and
to such minimum purchase requirements as may from time to time be
currently indicated in the Fund's prospectus, you are authorized to sell
as agent on behalf of the Fund authorized and issued shares registered
under the Securities Act of 1933, as amended. Such sales may be made by
you on behalf of the Fund by accepting unconditional orders to purchase
such shares placed with your investors. The sales price to the public of
such shares shall be the public offering price as defined in Section 6
hereof.

5. Sale of Shares to Investors by the Fund. Any right granted to you to
accept orders for shares or make sales on behalf of the Fund will not
apply to shares issued in connection with the merger or consolidation of
any other investment company with the Fund or its acquisition, by purchase
or otherwise, of all or substantially all the assets of any investment
company or substantially all the outstanding shares of any such company,
and such right shall not apply to shares that may be offered or otherwise
issued by the Fund to shareholders by virtue of their being shareholders
of the Fund.

6. Public Offering Price. All shares sold by you as agent for the Fund will
be sold at the public offering price, which will be determined in the
manner provided in the Fund's prospectus or statement of additional
information, as now in effect or as it may be amended .

7. No Sales Discount. The Fund shall receive the applicable net asset value
on all sales of shares by you as agent of the Fund.

8. Delivery of Payments. You will deliver to the Transfer Agent all payments
made pursuant to orders accepted by you, and accompanied by proper
applications for the purchase of shares, no later than the first business
day following the receipt by you in your home office of such payments and
applications.

9. Suspension of Sales. If and whenever a suspension of the right of
redemption or a postponement of the date of payment or redemption has been
declared pursuant to the Fund's Articles of Incorporation and has become
effective, then, until such suspension or postponement is terminated, no
further orders for shares shall be accepted by you except such
unconditional orders placed with you before you have knowledge of the
suspension. The Fund reserves the right to suspend the sale of shares and
your authority to accept orders for shares on behalf of the Fund if, in
the judgment of a majority of the Fund's Board of Directors, it is in the
best interests of the Fund to do so, such suspension to continue for such
period as may be determined by such majority; and in that event, no shares
will be sold by the Fund or by you on behalf of the Fund while such
suspension remains in effect except for shares necessary to cover
unconditional orders accepted by you before you had knowledge of the
suspension.

<PAGE>

10. Expenses. The Fund will pay (or will enter into arrangements providing
that persons other than you will pay) all fees and expenses in connection
with the preparation and filing of any registration statement and
prospectus or amendments thereto under the Securities Act of 1933, as
amended, covering the issue and sale of shares and in connection with the
qualification of shares for sale in the various states in which the fund
shall determine it advisable to qualify such shares for sale. It will also
pay the issue taxes or (in the case of shares redeemed) any initial
transfer taxes thereon. You will pay all expenses of printing prospectuses
and other sales literature, all fees and expenses in connection with your
qualification as a dealer in various states, and all other expenses in
connection with the sale and offering for sale of the shares of the Fund
which have not been herein specifically allocated to the Fund.

11. Conformity with Law. You agree that in selling the shares you will duly
conform in all respects with the laws of the United States and any state
in which such shares may be offered for sale by you pursuant to this
Agreement.

12. Indemnification. You agree to indemnify and hold harmless the Fund and
each of its Board members and officers and each person, if any, who
controls the Fund within the meaning of Section 15 of the Securities Act
of 1933, as amended, against any and all losses, claims, damages,
liabilities or litigation (including legal and other expenses) to which
the Fund or such Board members, officers or controlling person may become
subject under such Act, under any other statute, at common law or
otherwise, arising out of the acquisition of any shares by any person
which (a) may be based upon any wrongful act by you or any of your
employees or representatives or (b) may be based upon any untrue statement
or alleged untrue statement of a material fact contained in a registration
statement, prospectus or statement of additional information covering
shares of the Fund or any amendment thereof or supplement thereto or the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading if such statement or omission was made in reliance upon
information furnished or confirmed in writing to the Fund by you, or (c)
may be incurred or arise by reason of your acting as the Fund's agent
instead of purchasing and reselling shares as principal in distributing
shares to the public, provided that in no case is your indemnity in favor
of a Board member or officer of the Fund or any other person deemed to
protect such Board member or officer of the Fund or other person against
any liability to which any such person would otherwise be subject by
reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of
obligations and duties under this Agreement.

<PAGE>

You are not authorized to give any information or to make any
representations on behalf of the Fund or in connection with the sale of
shares other than the information and representations contained in a
registration statement, prospectus, or statement of additional information
covering shares, as such registration statement, prospectus and statement
of additional information may be amended or supplemented from time to
time. No person other than you is authorized to act as principal
underwriter for the Fund.

13. Duration and Termination of this Agreement. This Agreement shall remain in
force until the conclusion of the first meeting of shareholders of the
Fund following the first public offering of shares and, if approved at
that meeting, from year to year thereafter, but only so long as such
continuance is specifically approved at least annually by (a) a majority
of the Board of Directors who are not interested persons of you (other
than as Board members) or of the Fund, cast in person at a meeting called
for the purpose of voting on such approval, and (b) either (i) the Board
of Directors of the Fund, or (ii) a majority of the outstanding voting
securities of the Fund. This Agreement may, on 60 days' written notice, be
terminated at any time, without the payment of any penalty, by the Board
of Directors of the Fund, by a vote of a majority of the outstanding
voting securities of the Fund, or by you. This Agreement will
automatically terminate in the event of its assignment by you. In
interpreting the provisions of this Section 13, the definitions contained
in Section 2(a) of the Investment Company Act of 1940 (particularly the
definitions of "interested person", "assignment" and "voting security")
shall be applied.

14. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought. If the Fund should at
any time deem it necessary or advisable in the best interests of the Fund
that any amendment of this agreement be made in order to comply with the
recommendations or requirements of the Securities and Exchange Commission
or other governmental authority or to obtain any advantage under state or
federal tax laws and should notify you of the form of such amendment, and
the reasons therefor, and if you should decline to assent to such
amendment, the Fund may terminate this agreement forthwith. If you should
at any time request that a change be made in the Fund's Certificate of
Incorporation or By-Laws, or in its methods of doing business, in order to
comply with any requirements of federal law or regulations of the
Securities and Exchange Commission or of a national securities association
of which you are or may be a member, relating to the sale of shares, and
the Fund should not make such necessary change within a reasonable time,
you may terminate this Agreement forthwith.

<PAGE>

Very truly yours,

JOHN HANCOCK GROWTH FUND

By: /s/ Edward J. Boudreau, Jr.
Chairman

The foregoing Agreement is hereby accepted as of the date hereof.

JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.

By: /s/ C. Troy Sharver, Jr.
President

John Hancock Capital Series

Amendment No. 1 to
Distribution Agreement

WHEREAS, the John Hancock Capital Series, a Massachusetts business trust
previously designated John Hancock Growth Fund (the "Trust"), has entered into a
Distribution Agreement, dated as of August 1, 1991 (the "Agreement") with John
Hancock Broker Distribution Services, Inc. ("JH") with respect to its existing
series of shares ("Growth Fund");

WHEREAS, the Board of Trustees of the Trust have determined to establish a
new series of shares of the Trust designated as John Hancock Special Value Fund
("Special Value Fund");

NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:

1. Reference in the Agreement to the Trust and shares of beneficial
interest of the Trust shall be deemed to refer to both Growth Fund and Special
Value Fund.

2. In the event that the Trust establishes one or more series of shares in
addition to Growth Fund and Special Value Fund with respect to which it desires
to have JH render services as principal underwriter under the terms of the
Agreement, it shall so notify JH in writing, and if JH agrees in writing to
provide such service, references in the Agreement to the Trust shall be deemed
to include such additional series of shares.

3. The obligations of the Trust are not personally binding upon, nor shall
resort be had to the property of, any of the Trustees, shareholders, officers,
employees or agents of the Trust, but the Trust's property only shall be bound.

IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed on the day of October, 1993.

JOHN HANCOCK CAPITAL SERIES

By: /s/ Robert G. Freedman

JOHN HANCOCK BROKER DISTRIBUTION
SERVICES, INC.

By: /s/ C. Troy Shaver, Jr.

SOLICITING DEALER AGREEMENT

[LOGO]

JOHN HANCOCK FUNDS, INC.

BOSTON -- MASSACHUSETTS -- 02199-7603

<PAGE>
JOHN HANCOCK FUNDS, INC.
101 HUNTINGTON AVENUE
BOSTON, MA 02199-7603

SOLICITING DEALER AGREEMENT

Date
------------------------------

John Hancock Funds, Inc. ("the Distributor" or "Distributor") is the
principal distributor of the shares of beneficial interest (the "securities")
of each of the John Hancock Funds, ("We" or "us"), (the "Funds"). Such Funds
are those listed on Schedule A hereto which may be amended or supplemented from
time to time by the Distributor to include additional Funds for which the
Distributor is the principal distributor. You represent that you are a member
of the National Association of Securities Dealers, Inc., (the "NASD") and,
accordingly, we invite you to become a non-exclusive soliciting dealer to
distribute the securities of the Funds and you agree to solicit orders for the
purchase of the securities on the following terms. Securities are offered
pursuant to each Fund's prospectus and statement of additional information, as
such prospectus and statement of additional information may be amended from
time to time. To the extent that the prospectus or statement of additional
information contains provisions that are inconsistent with the terms of this
Agreement, the terms of the prospectus or statement of additional information
shall be controlling.

OFFERINGS

1. You agree to abide by the Rules of Fair Practice of the NASD and to all
other rules and regulations that are now or may become applicable to
transactions hereunder.

2. As principal distributor of the Funds, we shall have full authority to
take such action as we deem advisable in respect of all matters pertaining to
the distribution. This offer of shares of the Funds to you is made only in
such jurisdictions in which we may lawfully sell such shares of the Funds.

3. You shall not make any representation concerning the Funds or their
securities except those contained in the then- current prospectus or
statement of additional information for each Fund.

4. With the exception of listings of product offerings, you agree not to
furnish or cause to be furnished to any person or display, or publish any
information or materials relating to any Fund (including, without limitation,
promotional materials, sales literature, advertisements, press releases,
announcements, posters, signs and other similar materials), except such
information and materials as may be furnished to you by the Distributor or the
Fund. All other materials must receive written approval by the Distributor
before distribution or display to the public. Use of all approved advertising
and sales literature materials is restricted to appropriate distribution
channels.

5. You are not authorized to act as our agent. Nothing shall constitute you
as a syndicate, association, joint venture, partnership, unincorporated
business, or other separate entity or otherwise partners with us, but you shall
be liable for your proportionate share of any tax, liability or expense based
on any claim arising from the sale of shares of the Funds under this Agreement.
We shall not be under any liability to you, except for obligations expressly
assumed by us in this Agreement and liabilities under Section 11(f) of the
Securities Act of 1933, and no obligations on our part shall be implied or
inferred herefrom.

-2-

<PAGE>

6. DEALER COMPLIANCE/SUITABILITY STANDARDS (CLASS A AND CLASS B SHARES) -
Certain mutual funds distributed by the Distributor are being offered with two
or more classes of shares of the same investment portfolio ("Fund") - refer to
each Fund prospectus for availability and details. It is essential that the
following minimum compliance/suitability standards be adhered to in offering
and selling shares of these Funds to investors. All dealers offering shares of
the Funds and their associated persons agree to comply with these general
suitability and compliance standards.

SUITABILITY

With two classes of shares of certain funds available to individual
investors, (Class A and Class B), it is important that each investor purchases
not only the fund that best suits his or her investment objective but also the
class of shares that offers the most beneficial distribution financing method
for the investor based upon his or her particular situation and preferences.
Fund share recommendations and orders must be carefully reviewed by you and
your registered representatives in light of all the facts and circumstances, to
ascertain that the class of shares to be purchased by each investor is
appropriate and suitable. These recommendations should be based on several
factors, including but not limited to:

(A) the amount of money to be invested initially and over a period of
time;
(B) the current level of front-end sales load or back-end sales load
imposed by the Fund;
(C) the period of time over which the client expects to retain the
investment;
(D) the anticipated level of yield from fixed income funds' Class A and
Class B shares;
(E) any other relevant circumstances such as the availability of
reduced sales charges under letters of intent and/or rights of
accumulation.

There are instances when one distribution financing method may be more
appropriate than another. For example, shares subject to a front-end sales
charge may be more appropriate than shares subject to a contingent deferred
sales charge for large investors who qualify for a significant quantity
discount on the front-end sales charge. In addition, shares subject to a
contingent deferred sales charge may be more appropriate for investors whose
orders would not qualify for quantity discounts and who, therefore, may prefer
to defer sales charges and also for investors who determine it to be
advantageous to have all of their funds invested without deduction of a
front-end sales commission. However, if it is anticipated that an investor may
redeem his or her shares within a short period of time, the investor may,
depending on the amount of his or her purchase, bear higher distribution
expenses by purchasing contingent deferred sales charge shares than if he or
she had purchased shares subject to a front-end sales charge.

COMPLIANCE

Your supervisory procedures should be adequate to assure that an
appropriate person reviews and approves transactions entered into pursuant to
this Soliciting Dealer Agreement for compliance with the foregoing standards.
In certain instances, it may be appropriate to discuss the purchase with the
registered representatives involved or to review the advantages and
disadvantages of selecting one class of shares over another with the client.
The Distributor will not accept orders for Class B Shares in any Fund from you
for accounts maintained in street name. Trades for Class B Shares will only be
accepted in the name of the shareholder.

7. CLASS C SHARES - Certain mutual funds distributed by the Distributor may be
offered with Class C shares. Refer to each Fund prospectus for availability
and details. Class C shares are designed for institutional investors and
qualified benefit plans, including pension funds, and are sold without a sales
charge or 12b-1 fee. If a commission is paid to you for transactions in Class
C shares, it will be paid by the Distributor out of its own resources.

SALES

8. Orders for securities received by you from investors will be for the sale
of the securities at the public offering price, which will be the net asset
value per share as determined in the manner provided in the relevant Fund's
prospectus, as now in effect or as amended from time to time, next after
receipt by us (or the relevant Fund's transfer agent) of the purchase
application and payment for the securities, plus the relevant sales charges set
forth in the relevant Fund's then- current prospectus (the "Public Offering
Price"). The procedures relating to the handling of orders shall be subject to
our instructions which we will forward from time to time to you. All orders
are subject to acceptance by us, and we reserve the right in our sole
discretion to reject any order.

-3-
<PAGE>
In addition to the foregoing, you acknowledge and agree to the initial
and subsequent investment minimums, which may vary from year to year, as
described in the then-current prospectus for each Fund.

9. You agree to sell the securities only (a) to your customers at the public
offering price then in effect, or (b) back to the Funds at the currently quoted
net asset value.

10. The amount of sales charge to be reallowed to you (the "Reallowance") as a
percentage of the offering price is set forth in the then-current prospectus of
each Fund.

If a sales charge on the purchase is reduced in accordance with the
provisions of the relevant Fund's then-current prospectus pertaining to
"Methods of Obtaining Reduced Sales Charges," the Reallowance shall be reduced
pro rata.

11. We shall pay a Reallowance subject to the provisions of this agreement as
set forth in Schedule B hereto on all purchases made by your customers pursuant
to orders accepted by us (a) where an order for the purchase of securities is
obtained by a registered representative in your employ and remitted to us
promptly by you, (b) where a subsequent investment is made to an account
established by a registered representative in your employ or (c) where a
subsequent investment is made to an account established by a broker/dealer
other than you and is accompanied by a signed request from the account
shareholder that your registered representative receive the Reallowance for
that investment and/or for subsequent investments made in such account. If for
any reason, a purchase transaction is reversed, you shall not be entitled to
receive or retain any part of the Reallowance on such purchase and shall pay to
us on demand in full the amount of the Reallowance received by you in
connection with any such purchase. We may withhold and retain from the amount
of the Reallowance due you a sum sufficient to discharge any amount due and
payable by you to us.

12. Certain of the Funds have adopted a plan under Investment Company Act
Rule 12b-1 ("Distribution Plan" as described in the the prospectus). To the
extent you provide distribution and marketing services in the promotion of the
sale of shares of these Funds, including furnishing services and assistance to
your customers who invest in and own shares of such Funds and including, but
not limited to, answering routine inquiries regarding such Funds and assisting
in changing distribution options, account designations and addresses, you may
be entitled to receive compensation from us as set forth in Schedule C hereto.
All compensation, including 12b-1 fees, shall be payable to you only to the
extent that funds are received and in the possession of the Distributor.

13. We will advise you as to the jurisdictions in which we believe the shares
have been qualified for sale under the respective securities or "blue sky" laws
of such jurisdictions, but we assume no responsibility or obligations as to
your right to sell the shares of the Funds in any state or jurisdiction.

14. Orders may be placed through:
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, MA 02199-7603
1-800-338-4265

SETTLEMENT

15. Settlements for wire orders shall be made within five business days after
our acceptance of your order to purchase shares of the Funds. Certificates,
when requested, will be delivered to you upon payment in full of the sum due
for the sale of the shares of the Funds. If payment is not so received or
made, we reserve the right forthwith to cancel the sale, or, at our option, to
liquidate the shares of the Fund subject to such sale at the then prevailing
net asset value, in which latter case you will agree to be responsible for any
loss resulting to the Funds or to us from your failure to make payments as
aforesaid.

-4-
<PAGE>
INDEMNIFICATION

16. The parties to this agreement hereby agree to indemnify and hold harmless
each other, their officers and directors, and any person who is or may be
deemed to be a controlling person of each other, from and against any losses,
claims, damages, liabilities or expenses (including reasonable fees of
counsel), whether joint or several, to which any such person or entity may
become subject insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) arise out of or are based upon, (a) any untrue
statement or alleged untrue statement of material fact, or any omission or
alleged omission to state a material fact made or omitted by it herein, or, (b)
any willful misfeasance or gross misconduct by it in the performance of its
duties and obligations hereunder.

17. NSCC INDEMNITY - SHAREHOLDER AND HOUSE ACCOUNTS - In consideration of the
Distributor and John Hancock Investor Services Corporation ("Investor
Services") liquidating, exchanging, and/or transferring unissued shares of the
Funds for your customers without the use of original or underlying
documentation supporting such instructions (e.g., a signed stock power or
signature guarantee), you hereby agree to indemnify the Distributor, Investor
Services and each respective Fund against any losses, including reasonable
attorney's fees, that may arise from such liquidation exchange, and/or
transfer of unissued shares upon your direction. This indemnification shall
apply only to the liquidation, exchange and/or transfer of unissued shares in
shareholder and house accounts executed as wire orders transmitted via NSCC's
Fund/SERVsystem. You represent and warrant to the Funds, the Distributor and
Investor Services that all such transactions shall be properly authorized by
your customers.

The indemnification in this Section 16 shall not apply to any losses
(including attorney's fees) caused by a failure of the Distributor, Investor
Services or a Fund to comply with any of your instructions governing any of the
above transactions, or any negligent act or omission of the Distributor,
Investor Services or a Fund, or any of their directors, officers, employees or
agents. All transactions shall be settled upon your confirmation through NSCC
transmission to Investor Services.

The Distributor, Investor Services or you may revoke the indemnity
contained in this Section 16 upon prior written notice to each of the other
parties hereto, and in the case of such revocation, this indemnity agreement
shall remain effective as to trades made prior to such revocation.

MISCELLANEOUS

18. We will supply to you at our expense additional copies of the prospectus
and statement of additional information for each of the Funds and any printed
information supplemental to such material in reasonable quantities upon
request.

19. Any notice to you shall be duly given if mailed or telegraphed to you at
your address as registered from time to time with the NASD.

20. Miscellaneous provisions, if any, are attached hereto and incorporated
herein by reference.

21. This agreement, which shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, may be terminated by any party hereto at any
time upon written notice.

-5-
<PAGE>
SOLICITING DEALER

-------------------------------------------------
Name of Organization

By:-------------------------------------------------
Authorized Signature of Soliciting Dealer

-------------------------------------------------
Please Print or Type Name

-------------------------------------------------
Title

-------------------------------------------------
Print or Type Address

-------------------------------------------------
Telephone Number

Date:
-------------------------------------------------

In order to service you efficiently, please provide the following
information on your Mutual Funds Operations Department:

OPERATIONS MANAGER:
---------------------------------------------
ORDER ROOM MANAGER:
---------------------------------------------
OPERATIONS ADDRESS:
---------------------------------------------

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

TELEPHONE: FAX:
-------------------------------- ------------------------------

<TABLE>
<S> <C>
TO BE COMPLETED BY: TO BE COMPLETED BY:
JOHN HANCOCK FUNDS, INC. JOHN HANCOCK INVESTOR
SERVICES CORPORATION

BY: BY:
------------------------------------------- -------------------------------------------

- ---------------------------------------------- ----------------------------------------------
TITLE TITLE

</TABLE>

DEALER NUMBER:
------------------------------------

-6-

<PAGE>
JOHNHANCOCK
MUTUAL FUNDS

John Hancock Broker Distrubution Services, Inc.
101 Huntington Avenue Boston, MA 02199-7608 1-800-225-5291

/s/ John Hancock

<PAGE>
JOHN HANCOCK FUNDS, INC.
SCHEDULE A

DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS

<TABLE>
<S> <C>
John Hancock Sovereign Achievers Fund John Hancock National Aviation & Technology Fund
John Hancock Sovereign Investors Fund John Hancock Regional Bank Fund
John Hancock Sovereign Balanced Fund John Hancock Gold and Government Fund
John Hancock Sovereign Bond Fund John Hancock Global Rx Fund
John Hancock Sovereign U.S. Government Income Fund John Hancock Global Technology Fund
John Hancock Special Equities Fund* John Hancock Global Fund
John Hancock Special Opportunities Fund John Hancock Pacific Basin Equities Fund
John Hancock Discovery Fund John Hancock Global Income Fund
John Hancock Growth Fund John Hancock International Fund
John Hancock Strategic Income Fund John Hancock Global Resources Fund
John Hancock Limited-Term Government Fund John Hancock Emerging Growth Fund
John Hancock Cash Management Fund John Hancock Capital Growth Fund
John Hancock Managed Tax-Exempt Fund John Hancock Growth & Income Fund
John Hancock Tax-Exempt Income Fund John Hancock High Yield Bond Fund
John Hancock Tax-Exempt Series Fund John Hancock Investment Quality Bond Fund
John Hancock Special Value Fund John Hancock Government Securities Fund
John Hancock Strategic Short-Term Income Fund John Hancock U.S. Government Fund
John Hancock CA Tax-Free Fund John Hancock Government Income Fund
John Hancock High Yield Tax-Free Fund John Hancock Intermediate Government Fund
John Hancock Tax-Free Bond Fund John Hancock Adjustable U.S. Government Fund
John Hancock U.S. Government Cash Reserve Fund John Hancock Cash Reserve Money Market B Fund
</TABLE>

From time to time John Hancock Funds, Inc., as principal distributor of the
John Hancock funds, will offer additional funds for sale. These funds will
automatically become part of this Agreement and will be subject to all its
provisions unless otherwise directed by John Hancock Funds, Inc.

*Closed to new investors as of 9/30/94

<PAGE>
JOHN HANCOCK FUNDS, INC.

SCHEDULE B

DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS

I. REALLOWANCE

The Reallowance paid to the selling Brokers for sales of John Hancock
Funds is set forth in each Fund's then- current prospectus. No Commission will
be paid on sales of John Hancock Cash Management Fund or any John Hancock Fund
that is without a sales charge. Purchases of Class A shares of $1 million or
more, or purchases into an account or accounts whose aggregate value of fund
shares is $1 million or more will be made at net asset value with no initial
sales charge. On purchases of this type, John Hancock Funds, Inc. will pay a
commission as set forth in each Fund's then-current prospectus. John Hancock
Funds, Inc. will pay Brokers for sales of Class B shares of the Funds a
marketing fee as set forth in each Fund's then-current prospectus.

<PAGE>
JOHN HANCOCK FUNDS, INC.

SCHEDULE C

DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS

FIRST YEAR SERVICE FEES

Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, John Hancock Funds, Inc. will advance to you a First Year
Service Fee related to the purchase of Class A shares (only if subject to sales
charge) or Class B shares of any of the Funds, as the case may be, sold by your
firm. This Service Fee will be compensation for your personal service and/or
the maintenance of shareholder accounts ("Customer Servicing") during the
twelve-month period immediately following the purchase of such shares, in the
amount not to exceed .25 of 1% of net assets invested in Class A shares or
Class B shares of the Fund, as the case may be, purchased by your customers.

SERVICE FEE SUBSEQUENT TO THE FIRST YEAR

Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will pay you quarterly, in arrears, a
Service Fee commencing at the end of the twelve month period immediately
following the purchase of Class A shares (only if subject to sales charge) or
Class B shares, as the case may be, sold by your firm, for Customer Servicing,
in an amount not to exceed .25 of 1% of the average daily net assets
attributable to the Class A shares or Class B shares of the Fund, as the case
may be, purchased by your customers, provided your firm has under management
with the Funds combined average daily net assets for the preceding quarter of
no less than $1 million, or an individual representative of your firm has under
management with the Funds combined average daily net assets for the preceding
quarter of no less than $250,000 (an "Eligible Firm").

<PAGE>
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.

SCHEDULE D

DATED JULY 1, 1992 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK MUTUAL FUNDS

No broker/dealer shall represent the FUnds or Distribution Services in any
written communications without prior receipt of written approval from John
Hancock Broker Distribution Services, Inc. This includes but is not limited to
all advertising, public relations, marketing and sales literature, and media
contacts.

Further, subsequent to the creation of such materialsbefore written
approval from JHBDS will be given, a copy of the NASD review document
applicable to such materials must be furnished to John Hancock Broker
Distribution Services, Inc. for its review and files.

FOR PURPOSES OF THIS SCHEDULE D, THE FOLLOWING TERMS ARE DEFINED:

Advertising:

materials designed for the mass market, e.g. print ads, radio and tv
commercials, billboards, etc.

Sales literature:

materials designed for a directed market, e.g. prospecting letters,
brochures, mailers, stuffers, etc.

Coop Advertising:

advertising materials (as defined above) used by selling group members
for which John Hancock pays some or all of the costs of publication
whether the materials were developed by JHBDS Marketing or not.

John Hancock Broker Distribution Services, Inc. Approval of Advertising:

Approval has four meanings:approval of the material itself from a
marketing perspective (JHBDS product managers), proactive compliance
officer), parent company corporate advertising approval (John Hancock
Mutual Life Insurance Company Advertising Dept. personnel) and
approval for use and related cost-sharing arrangements (national sales
coordinators).

NASD Filing:

Materials created by JHBDS will be filed with the NASD by the JHBDS
Compliance Department. Materials not created by JHBDS but to be
included in the coop program will be filed with the NASD by the
broker-dealer creating the materials. However, prior to use of the
materials in our coop program, we will need a copy of the final
version of the material as well as the NASDcomment letter. When this
is received, the above approvals can be obtained.

FINANCIAL INSTITUTION
SALES AND SERVICE AGREEMENT

[LOGO]

JOHN HANCOCK FUNDS, INC.

Boston - Massachusetts - 02199-7603

<PAGE>
JOHN HANCOCK FUNDS, INC.
101 HUNTINGTON AVENUE
BOSTON, MA 02199-7603

FINANCIAL INSTITUTION
SALES AND SERVICE AGREEMENT

Date
--------------------------------

John Hancock Funds, Inc. ("The Distributor", or "Distributor"), ("We" or
"us"), is the principal distributor of the shares of beneficial interest (the
"securities") of each of the John Hancock Funds (the "Funds"). Such Funds are
those listed on Schedule A hereto which may be amended or supplemented from
time to time by the Distributor to include additional Funds for which the
Distributor is the principal distributor. You hereby represent that you are a
"bank" as defined in Section 3(a)(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and at the time of each transaction in shares of
the Funds, are not required to register as a broker/dealer under the Exchange
Act or regulations thereunder. We invite you to become a non-exclusive
soliciting financial institution ("Financial Institution") to distribute the
securities of the Funds and you agree to solicit orders for the purchase of the
securities on the following terms. Securities are offered pursuant to each
Fund's prospectus and statement of additional information, as such prospectus
and statement of additional information may be amended from time to time. To
the extent that the prospectus or statement of additional information contains
provisions that are inconsistent with the terms of this Agreement, the terms of
the prospectus or statement of additional information shall be controlling.

OFFERINGS

1. You represent and warrant that you will use your best efforts to ensure
that any purchase of shares of the Funds by your customers constitutes a
suitable investment for such customers. You acknowledge that you will base
such a decision of suitability on all the facts you have gathered about your
customer's financial situation, investment objectives, risk tolerance and
sophistication.

2. You represent and warrant that a copy of the then-current prospectus of a
Fund will be delivered to your customer before any purchase of shares of that
Fund are effected for that customer. You shall not effect any transaction in,
or induce any purchase or sale of, any shares of the Funds by means of any
manipulative, deceptive or other fraudulent device or contrivance, and shall
otherwise deal equitably and fairly with your customers with respect to
transactions in shares of a Fund.

3. You represent and warrant that you will not make shares of any Fund
available to your customers, including your fiduciary customers, except in
compliance with all Federal and state laws and rules and regulations of
regulatory agencies or authorities applicable to you, or any of your affiliates
engaging in such activity, which may affect your business practices. You
confirm that you are not in violation of any banking law or regulations as to
which you are subject. You agree that you will comply with the requirements of
Banking Circular 274 issued by the Office of the Comptroller of the Currency in
offering shares of the Funds to your customers. We agree that we will comply
with all Federal and state laws and rules and regulations of regulatory
agencies or authorities applicable to us. We and you acknowledge and agree
that the offering of shares of the Funds pursuant to this agreement is subject
to the oversight of your management and the regulatory authorities by which you
are subject to review, and that appropriate records and materials relating to
any activity by you or us undertaken pursuant to this agreement may be accessed
by bank examiners in the due course of any regulatory review to which you may
be subject.

4. As principal distributor of the Funds, we shall have full authority to take
such action as we deem advisable in respect of all matters pertaining to the
distribution. This offer of shares of the Funds to you is made only in such
jurisdictions in which we may lawfully sell such shares of the Funds.

-2-

<PAGE>

5. You shall not make any representation concerning the Funds or their
securities except those contained in the then-current prospectus or statement
of additional information for each Fund.

6. We will supply to you at our expense additional copies of the then-current
prospectus and statement of additional information for each of the Funds and
any printed information supplemental to such material in reasonable quantities
upon request. It shall be your obligation to ensure that all such information
and materials are distributed to your customers who own or seek to own shares
of the Funds in accordance with securities and/or banking law and regulations
and any other applicable regulations.

7. With the exception of listings of product offerings, you agree not to
furnish or cause to be furnished to any person or display, or publish any
information or materials relating to any Fund (including, without limitation,
promotional materials, sales literature, advertisements, press releases,
announcements, posters, signs and other similar materials), except such
information and materials as may be furnished to you by us the Distributor or
the Fund. All other materials must receive written approval by the Distributor
before distribution or display to the public. Use of all approved advertising
and sales literature materials is restricted to appropriate distribution
channels.

8. You are not authorized to act as our agent. In making available shares of
the Funds under this Financial Institution Sales and Service Agreement, nothing
herein shall be construed to constitute you or any of your agents, employees or
representatives as our agent or employee, or as an agent or employee of the
Funds, and you shall not make any representations to the contrary. Nothing
shall constitute you as a syndicate, association, unincorporated business, or
other separate entity or partners with us, but you shall be liable for your
proportionate share of any tax, liability or expense based on any claim arising
from the sale of shares of the Funds under this Agreement. We shall not be
under any liability to you, except for obligations expressly assumed by us in
this Agreement and liabilities under Section 11(f) of the Securities Act of
1933, and no obligations on our part shall be implied or inferred herefrom.

9. DEALER COMPLIANCE/SUITABILITY STANDARDS (CLASS A AND CLASS B SHARES) -
Certain mutual funds distributed by the Distributor are being offered with two
or more classes of shares of the same investment portfolio ("Fund") - refer to
each Fund prospectus for availability and details. It is essential that the
following minimum compliance/suitability standards be adhered to in offering
and selling shares of these Funds to investors. All soliciting financial
institutions offering shares of the Funds and their agents, employees and
representatives agree to comply with these general suitability and compliance
standards.

SUITABILITY

With two classes of shares of certain funds available to individual
investors, (Class A and Class B), it is important that each investor purchases
not only the fund that best suits his or her investment objective but also the
class of shares that offers the most beneficial distribution financing method
for the investor based upon his or her particular situation and preferences.
Fund share recommendations and orders must be carefully reviewed by you and
your agents, employees and representatives in light of all the facts and
circumstances, to ascertain that the class of shares to be purchased by each
investor is appropriate and suitable. These recommendations should be based on
several factors, including but not limited to:

(A) the amount of money to be invested initially and over
a period of time;
(B) the current level of front-end sales load or back-end
sales load imposed by the Fund;
(C) the period of time over which the customer expects to
retain the investment;
(D) the anticipated level of yield from fixed income
funds' Class A and Class B shares;
(E) any other relevant circumstances such as the
availability of reduced sales charges under letters
of intent and/or rights of accumulation.

-3-

<PAGE>

COMPLIANCE

Your supervisory procedures should be adequate to assure that an
appropriate person reviews and approves transactions entered into pursuant to
this Financial Institution Sales and Service Agreement for compliance with the
foregoing standards. In certain instances, it may be appropriate to discuss
the purchase with the agents, employees and representatives involved or to
review the advantages and disadvantages of selecting one class of shares over
another with the client. The Distributor will not accept orders for Class B
Shares in any Fund from you for accounts maintained in your name or in the name
of your nominee for the benefit of certain of your customers. Trades for Class
B Shares will only be accepted in the name of the shareholder.

10. CLASS C SHARES - Certain mutual funds distributed by the Distributor may
be offered with Class C shares. Refer to each Fund prospectus for availability
and details. Class C shares are designed for institutional investors and
qualified benefit plans, including pension funds, and are sold without a sales
charge or 12b-1 fee. If a commission is paid to you for transactions in Class
C shares, it will be paid by the Distributor out of its own resources.

SALES

11. With respect to any and all transactions in the shares of any Fund
pursuant to this Financial Institution Sales and Service Agreement it is
understood and agreed in each case that: (a) you shall be acting solely as
agent for the account of your customer; (b) each transaction shall be initiated
solely upon the order of your customer; (c) we shall execute transactions only
upon receiving instructions from you acting as agent for your customer or upon
receiving instructions directly from your customer; (d) as between you and your
customer, your customer will have full beneficial ownership of all shares; (c)
each transaction shall be for the account of your customer and not for your
account; and (f) unless otherwise agreed in writing we will serve as a clearing
broker for you on a fully disclosed basis, and you shall serve as the
introducing agent for your customers' accounts. Subject to the foregoing,
however, and except for Class B shares, as described in Section 8 above, you
may maintain record ownership of such customers' shares in an account
registered in your name or the name of your nominee, for the benefit of such
customers. Each transaction shall be without recourse to you provided that you
act in accordance with the terms of this Financial Institution Sales and
Service Agreement. You represent and warrant to us that you will have full
right, power and authority to effect transactions (including, without
limitation, any purchases and redemptions) in shares of the Funds on behalf of
all customer accounts provided by you.

12. Orders for securities received by you from your customers will be for the
sale of the securities at the public offering price, which will be the net
asset value per share as determined in the manner provided in the relevant
Fund's prospectus, as now in effect or as amended from time to time, next after
receipt by us (or the relevant Fund's transfer agent) of the purchase
application and payment for the securities, plus the relevant sales charges set
forth in the relevant Fund's then-current prospectus (the "Public Offering
Price"). The procedures relating to the handling of orders shall be subject to
our instructions which we will forward from time to time to you. All orders
are subject to acceptance by us, and we reserve the right in our sole
discretion to reject any order.

In addition to the foregoing, you acknowledge and agree to the initial and
subsequent investment minimums, which may vary from year to year, as described
in the then-current prospectus for each Fund.

13. You agree to sell the securities only (a) to your customers at the public
offering price then in effect, or (b) back to the Funds at the currently quoted
net asset value.

14. The amount of sales charge to be reallowed to you (the "Reallowance") as a
percentage of the offering price is set forth in the then-current prospectus of
each Fund.

If a sales charge on the purchase is reduced in accordance with the
provisions of the relevant Fund's then- current prospectus pertaining to
"Methods of Obtaining Reduced Sales Charges," the Reallowance shall be reduced
pro rata.

15. We shall pay a Reallowance subject to the provisions of this agreement as
set forth in Schedule B hereto on all purchases made by your customers pursuant
to orders accepted by us (a) where an order for the purchase of securities is
obtained by you and remitted to us promptly by you, (b) where a subsequent
investment is made to an account established by you or (c) where a subsequent
investment is made to an account established by a financial institution or

-4-

<PAGE>
registered broker/dealer other than you and is accompanied by a signed request
from the account shareholder that you receive the Reallowance for that
investment and/or for subsequent investments made in such account. If for any
reason, a purchase transaction is reversed, you shall not be entitled to
receive or retain any part of the Reallowance on such purchase and shall pay to
us on demand in full the amount of the Reallowance received by you in
connection with any such purchase. We may withhold and retain from the amount
of the Reallowance due you a sum sufficient to discharge any amount due and
payable by you to us.

16. Certain of the Funds have adopted a plan under Investment Company Act
Rule 12b-1 ("Distribution Plan" as described in the prospectus). To the extent
you provide distribution and marketing services in the promotion of the sale of
shares of these Funds, including furnishing services and assistance to your
customers who invest in and own shares of such Funds and including, but not
limited to, answering routine inquiries regarding such Funds and assisting in
changing distribution options, account designations and addresses, you may be
entitled to receive compensation from us as set forth in Schedule C hereto.
All compensation, including 12b-1 fees, shall be payable to you only to the
extent that funds are received and in the possession of the Distributor.

17. We will advise you as to the jurisdictions in which we believe the shares
have been qualified for sale under the respective securities or "blue sky" laws
of such jurisdictions, but we assume no responsibility or obligations as to
your right to sell the shares of the Funds in any state or jurisdiction.

18. Orders may be placed through:
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, MA 02199-7603
1-800-338-4265

SETTLEMENT

19. Settlements for wire orders shall be made within five business days after
our acceptance of your order to purchase shares of the Funds. Certificates,
when requested, will be delivered to you upon payment in full of the sum due
for the sale of the shares of the Funds. If payment is not so received or
made, we reserve the right forthwith to cancel the sale, or, at our option, to
liquidate the shares of the Fund subject to such sale at the then prevailing
net asset value, in which latter case you will agree to be responsible for any
loss resulting to the Funds or to us from your failure to make payments as
aforesaid.

INDEMNIFICATION

20. The parties to this agreement hereby agree to indemnify and hold harmless
each other, their officers and directors, and any person who is or may be
deemed to be a controlling person of each other, from and against any losses,
claims, damages, liabilities or expenses (including reasonable fees of
counsel), whether joint or several, to which any such person or entity may
become subject insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) arise out of or are based upon, (a) any untrue
statement or alleged untrue statement of material fact, or any omission or
alleged omission to state a material fact made or omitted by it herein, or, (b)
any willful misfeasance or gross misconduct by it in the performance of its
duties and obligations hereunder.

MISCELLANEOUS

21. Any notice to you shall be duly given if mailed or telegraphed to you at
your address as most recently furnished to us by you.

22. Miscellaneous provisions, if any, are attached hereto and incorporated
herein by reference.

23. This agreement, which shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, may be terminated by any party hereto at any
time upon written notice.

-5-

<PAGE>
FINANCIAL INSTITUTION

-------------------------------------------------
Financial Institution

By:
-------------------------------------------------
Authorized Signature of Financial Institution

-------------------------------------------------
Please Print or Type Name

-------------------------------------------------
Title

-------------------------------------------------
Print or Type Address

-------------------------------------------------
Telephone Number

Date:
-------------------------------------------------

In order to service you efficiently, please provide the
following information on your Mutual Funds Operations Department:

OPERATIONS MANAGER:
---------------------------------------------

ORDER ROOM MANAGER:
---------------------------------------------

OPERATIONS ADDRESS:
---------------------------------------------

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

TELEPHONE: FAX:
--------------------- ----------------------------

TO BE COMPLETED BY: JOHN HANCOCK INVESTOR
JOHN HANCOCK FUNDS, INC. SERVICES CORPORATION

By: By:
--------------------------------- ------------------------------------

- ------------------------------------ ------------------------------------
Title Title

TO BE COMPLETED BY:

FINANCIAL INSTITUTION NUMBER:
----------------------------------------------

-6-

<PAGE>

JOHN HANCOCK FUNDS, INC.

SCHEDULE A

DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS

<TABLE>
<S> <C>
John Hancock Sovereign Achievers Fund John Hancock National Aviation & Technology Fund
John Hancock Sovereign Investors Fund John Hancock Regional Bank Fund
John Hancock Sovereign Balanced Fund John Hancock Gold and Government Fund
John Hancock Sovereign Bond Fund John Hancock Global Rx Fund
John Hancock Sovereign U.S. Government Income Fund John Hancock Global Technology Fund
John Hancock Special Equities Fund* John Hancock Global Fund
John Hancock Special Opportunities Fund John Hancock Pacific Basin Equities Fund
John Hancock Discovery Fund John Hancock Global Income Fund
John Hancock Growth Fund John Hancock International Fund
John Hancock Strategic Income Fund John Hancock Global Rescources Fund
John Hancock Limited Term Government Fund John Hancock Emerging Growth Fund
John Hancock Cash Management Fund John Hancock Capital Growth Fund
John Hancock Managed Tax-Exempt Fund John Hancock Growth & Income Fund
John Hancock Tax-Exempt Income Fund John Hancock High Yield Bond Fund
John Hancock Tax-Exempt Series Fund John Hancock Investment Quality Bond Fund
John Hancock Special Value Fund John Hancock Government SecurritiesFund
John Hancock Strategic Short-Term Income Fund John Hancock U.S. Government Fund
John Hancock CA Tax-Free Fund John Hancock Governtment Income Fund
John Hancock High Yield Tax-Free Fund John Hancock Intermediate Government Fund
John Hancock Tax-Free Bond Fund John Hancock Adjustable U.S. Government Fund
John Hancock U.S. Government Cash Reserve Fund John Hancock Cash Reserve Money Market B Fund

</TABLE>

From time to time John Hancock Funds, as principal distributor of the
John Hancock Funds, will offer additional funds for sale. These funds will
automatically become part of this Agreement and will be subject to all its
provisions unless otherwise directed by John Hancock Funds, Inc.
* Closed to new invstors as of 9/30/94.

<PAGE>
JOHN HANCOCK FUNDS, INC.

SCHEDULE B

DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS

I. REALLOWANCE

The Reallowance paid to Financial Institutions for sales of John Hancock
Funds is the same as that paid to Selling Brokers described and set forth
in each Fund's then-current prospectus. No Commission will be paid on
sales of John Hancock Cash Management Fund or any John Hancock Fund that is
without a sales charge. Purchases of Class A shares of $1 million or more,
or purchases into an account or accounts whose aggregate value of fund
shares is $1 million or more will be made at net asset value with no
initial sales charge. On purchases of this type, the Distributor will pay a
commission as set forth in each Fund's then-current prospectus. John
Hancock Funds, Inc. will pay Financial Institutions for sales of Class B
shares of the Funds a marketing fee as set forth in each Fund's then-
current prospectus for Selling Brokers.

<PAGE>
JOHN HANCOCK FUNDS, INC.

SCHEDULE C

DISTRIBUTION PLAN SCHEDULE OF COMPENSATION

DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS

FIRST YEAR SERVICE FEE

Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will advance to you a First Year Service
Fee related to the purchase of Class A shares (only if subject to sales charge)
or Class B shares of any of the Funds, as the case maybe, sold by your firm on
or after July 1, 1993. This Service Fee will be compensation for your personal
service and/or the maintenance of shareholder accounts ("Customer Servicing")
during the twelve-month period immediately following the purchase of such
shares, in an amount not to exceed .25 of 1% of the average daily net assets
attributable to Class A shares or Class B shares of the Fund, as the case may
be, purchased by your customers.

SERVICE FEE SUBSEQUENT TO THE FIRST YEAR

Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will pay you quarterly, in arrears, a
Service Fee commencing at the end of the twelve-month period immediately
following the purchase of Class A shares (only if subject to sales charge) or
Class B shares, as the case may be, sold by your firm, for Customer Servicing,
in an amount not to exceed .25 of 1% of the average daily net assets
attributable to the Class A shares or Class B shares of the Fund, as the case
may be, purchased by your customers, provided your Financial Institution has
under management with the Funds combined average daily net assets for the
preceding quarter of no less than $1 million, or an individual representative
of your Financial Institution has under management with the Funds combined
average daily net assets for the preceding quarter of no less than $250,000 (an
"Eligible Financial Institution").

MASTER CUSTODIAN AGREEMENT

between

JOHN HANCOCK MUTUAL FUNDS

and

INVESTORS BANK & TRUST COMPANY

<PAGE>
<TABLE>
TABLE OF CONTENTS
-----------------

<S> <C> <C>
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
2. Employment of Custodian and Property to be held by it . . . . . . . . . . . . . . . 3-4
3. Duties of the Custodian with Respect toProperty of the Fund . . . . . . . . . . . . 4
A. Safekeeping and Holding of Property . . . . . . . . . . . . . . . . . . . . . 4
B. Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-8
C. Registration of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 8
D. Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9
E. Payments for Shares of the Fund . . . . . . . . . . . . . . . . . . . . . . . 9
F. Investment and Availability of Federal Funds . . . . . . . . . . . . . . . . . 9
G. Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9-10
H. Payment of Fund Moneys . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-12
I. Liability for Payment in Advance of Receipt of Securities Purchased . . . . . 12-13
J. Payments for Repurchases of Redemptions of Shares of the Fund . . . . . . . . 13
K. Appointment of Agents by the Custodian . . . . . . . . . . . . . . . . . . . . 13
L. Deposit of Fund Portfolio Securities in Securities Systems . . . . . . . . . . 13-16
M. Deposit of Fund Commercial Paper in an Approved
Book-Entry System for Commercial Paper . . . . . . . . . . . . . . . . . . 16-18
N. Segregated Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18-19
O. Ownership Certificates for Tax Purposes . . . . . . . . . . . . . . . . . . . 19
P. Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Q. Communications Relating to Fund Portfolio Securities . . . . . . . . . . . . . 19-20
</TABLE>

<PAGE>

<TABLE>
<S> <C> <C>
R. Exercise of Rights; Tender Offers . . . . . . . . . . . . . . . . . . . . . . 20

S. Depository Receipts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-21

T. Interest Bearing Call or Time Deposits . . . . . . . . . . . . . . . . . . . . 21

U. Options, Futures Contracts and Foreign Currency Transactions . . . . . . . . . 21-23

V. Actions Permitted Without Express Authority . . . . . . . . . . . . . . . . . 23-24

4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . 24

5. Records and Miscellaneous Duties . . . . . . . . . . . . . . . . . . . . . . . . . . 24-25

6. Opinion of Fund`s Independent Public Accountants . . . . . . . . . . . . . . . . . . 25

7. Compensation and Expenses of Bank . . . . . . . . . . . . . . . . . . . . . . . . . 25-26

8. Responsibility of Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26-27

9. Persons Having Access to Assets of the Fund . . . . . . . . . . . . . . . . . . . . 27

10. Effective Period, Termination and Amendment; Successor Custodian . . . . . . . . . . 27-28

11. Interpretive and Additional Provisions . . . . . . . . . . . . . . . . . . . . . . . 28-29

12. Certification as to Authorized Officers . . . . . . . . . . . . . . . . . . . . . . 29

13. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

14. Massachusetts Law to Apply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29

15. Adoption of the Agreement by the Fund . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>

<PAGE>
MASTER CUSTODIAN AGREEMENT

This Agreement is made as of December 15, 1992 between each investment
company advised by John Hancock Advisers, Inc. which has adopted this Agreement
in the manner provided herein and Investors Bank & Trust Company (hereinafter
called "Bank", "Custodian" and "Agent"), a trust company established under the
laws of Massachusetts with a principal place of business in Boston,
Massachusetts.

Whereas, each such investment company is registered under the Investment
Company Act of 1940 and has appointed the Bank to act as Custodian of its
property and to perform certain duties as its Agent, as more fully hereinafter
set forth; and

Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;

Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:

1. Definitions
-----------

Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the following meanings:

(a) "Fund" shall mean the investment company which has adopted this
Agreement and is listed on Appendix A hereto. If the Fund is a Massachusetts
business trust or Maryland corporation, it may in the future establish and
designate other separate and distinct series of shares, each of which may be
called a "portfolio"; in such case, the term "Fund" shall also refer to each
such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Authorized Officer", shall mean any of the following officers of
the Trust: The Chairman of the Board of Trustees, the President, a Vice
President, the Secretary, the Treasurer or Assistant Secretary or Assistant
Treasurer, or any other officer of the Trust duly authorized to sign by
appropriate resolution of the Board of Trustees of the Trust.

(e) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.

<PAGE>

(f) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository
but only if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.

(g) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for
United States and federal agency securities (i.e., as provided in Subpart O of
Treasury Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the
book-entry regulations of federal agencies substantially in the form of Subpart
O).

(h) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in rule 17f-4 under the
Investment Company Act of 1940 for foreign securities but only if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.

(i) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form but
only if the Custodian has received a certified copy of a vote of the Board
approving the participation by the Fund in such system.

(j) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Electronic instructions for
the purchase and sale of securities which are transmitted by John Hancock
Advisers, Inc. to the Custodian through the John Hancock equity trading system
and the John Hancock fixed income trading system shall be deemed to be proper
instructions; the Fund shall cause all such instructions to be confirmed in
writing. Different persons may be authorized to give instructions for
different purposes. A certified copy of a vote of the Board may be received
and accepted by the Custodian as conclusive evidence of the authority of any
such person to act and may be considered as in full force and effect until
receipt of written notice to the contrary. Such instructions may be general or
specific in terms and, where appropriate, may be standing instructions. Unless
the vote delegating authority to any person or persons to give a particular
class of instructions specifically requires that the approval of any person,
persons or committee shall first have been obtained before the Custodian may
act on instructions of that class, the Custodian shall be under no obligation
to question the right of the person or persons giving such instructions in so
doing. Oral instructions will be considered proper instructions if the
Custodian reasonably believes them to have been given by a person authorized to
give such instructions with respect to the transaction involved. The Fund
shall cause all oral

<PAGE>

instructions to be confirmed in writing. The Fund authorizes the Custodian to
tape record any and all telephonic or other oral instructions given to the
Custodian. Upon receipt of a certificate signed by two officers of the Fund as
to the authorization by the President and the Treasurer of the Fund accompanied
by a detailed description of the communication procedures approved by the
President and the Treasurer of the Fund, "proper instructions" may also include
communications effected directly between electromechanical or electronic
devices provided that the President and Treasurer of the Fund and the Custodian
are satisfied that such procedures afford adequate safeguards for the Fund's
assets. In performing its duties generally, and more particularly in
connection with the purchase, sale and exchange of securities made by or for
the Fund, the Custodian may take cognizance of the provisions of the governing
documents and registration statement of the Fund as the same may from time to
time be in effect (and votes, resolutions or proceedings of the shareholders or
the Board), but, nevertheless, except as otherwise expressly provided herein,
the Custodian may assume unless and until notified in writing to the
contrary that so-called proper instructions received by it are not in conflict
with or in any way contrary to any provisions of such governing documents and
registration statement, or votes, resolutions or proceedings of the
shareholders or the Board.

2. Employment of Custodian and Property to be Held by It
-----------------------------------------------------

The Fund hereby appoints and employs the Bank as its Custodian and Agent
in accordance with and subject to the provisions hereof, and the Bank hereby
accepts such appointment and employment. The Fund agrees to deliver to the
Custodian all securities, participation interests, cash and other assets owned
by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), by-laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of
its duties hereunder.

The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board. Any such subcustodian so employed by
the Custodian shall be deemed to be the agent of the Custodian, and the
Custodian shall remain primarily responsible for the securities, participation
interests, moneys and other property of the Fund held by such subcustodian.
Any foreign subcustodian shall be a bank or trust company which is an eligible
foreign custodian within the meaning of Rule 17f-5 under the Investment Company
Act of 1940, and the foreign custody arrangements shall be approved by the
Board and shall be in accordance with and subject to the provisions of said
Rule. For

<PAGE>

the purposes of this Agreement, any property of the Fund held by any such
subcustodian (domestic or foreign) shall be deemed to be held by the Custodian
under the terms of this Agreement.

3. Duties of the Custodian with Respect to Property of the Fund
------------------------------------------------------------

A. SAFEKEEPING AND HOLDING OF PROPERTY The Custodian shall keep
safely all property of the Fund and on behalf of the Fund shall
from time to time receive delivery of Fund property for
safekeeping. The Custodian shall hold, earmark and segregate on
its books and records for the account of the Fund all property of
the Fund, including all securities, participation interests and
other assets of the Fund (1) physically held by the Custodian, (2)
held by any subcustodian referred to in Section 2 hereof or by any
agent referred to in Paragraph K hereof, (3) held by or maintained
in The Depository Trust Company or in Participants Trust Company
or in an Approved Clearing Agency or in the Federal Book- Entry
System or in an Approved Foreign Securities Depository, each of
which from time to time is referred to herein as a "Securities
System", and (4) held by the Custodian or by any subcustodian
referred to in Section 2 hereof and maintained in any Approved
Book-Entry System for Commercial Paper.

B. DELIVERY OF SECURITIES The Custodian shall release and deliver
securities or participation interests owned by the Fund held (or
deemed to be held) by the Custodian or maintained in a Securities
System account or in an Approved Book-Entry System for Commercial
Paper account only upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties,
and only in the following cases:

1) Upon sale of such securities or participation interests
for the account of the Fund, BUT ONLY against receipt of
payment therefor; if delivery is made in Boston or New
York City, payment therefor shall be made in accordance
with generally accepted clearing house procedures or by
use of Federal Reserve Wire System procedures; if delivery
is made elsewhere payment therefor shall be in accordance
with the then current "street delivery" custom or in
accordance with such procedures agreed to in writing from
time to time by the parties hereto; if the sale is
effected through a Securities System, delivery and payment
therefor shall be made in accordance with the provisions
of Paragraph L hereof; if the sale of commercial paper is
to be effected through an Approved Book-Entry System for
Commercial Paper, delivery and payment therefor shall be
made in accordance with the provisions of Paragraph M
hereof; if the securities are to be sold outside the
United States, delivery may be made in accordance with
procedures agreed to in writing from time to time by the
parties hereto; for the purposes of this subparagraph, the
term "sale" shall include the disposition of a portfolio

<PAGE>

security (i) upon the exercise of an option written by the
Fund and (ii) upon the failure by the Fund to make a
successful bid with respect to a portfolio security, the
continued holding of which is contingent upon the making
of such a bid;

2) Upon the receipt of payment in connection with any
repurchase agreement or reverse repurchase agreement
relating to such securities and entered into by the Fund;

3) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;

4) To the issuer thereof or its agent when such securities or
participation interests are called, redeemed, retired or
otherwise become payable; provided that, in any such case,
the cash or other consideration is to be delivered to the
Custodian or any subcustodian employed pursuant to Section
2 hereof;

5) To the issuer thereof, or its agent, for transfer into the
name of the Fund or into the name of any nominee of the
Custodian or into the name or nominee name of any agent
appointed pursuant to Paragraph K hereof or into the name
or nominee name of any subcustodian employed pursuant to
Section 2 hereof; or for exchange for a different number
of bonds, certificates or other evidence representing the
same aggregate face amount or number of units; provided
that, in any such case, the new securities or
participation interests are to be delivered to the
Custodian or any subcustodian employed pursuant to Section
2 hereof;

6) To the broker selling the same for examination in
accordance with the "street delivery" custom; provided
that the Custodian shall adopt such procedures as the Fund
from time to time shall approve to ensure their prompt
return to the Custodian by the broker in the event the
broker elects not to accept them;

7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or
readjustment of the securities of the issuer of such
securities, or pursuant to provisions for conversion of
such securities, or pursuant to any deposit agreement;
provided that, in any such case, the new securities and
cash, if any, are to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof;

<PAGE>
8) In the case of warrants, rights or similar securities, the
surrender thereof in connection with the exercise of such
warrants, rights or similar securities, or the surrender
of interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new
securities and cash, if any, are to be delivered to the
Custodian or any subcustodian employed pursuant to Section
2 hereof;

9) For delivery in connection with any loans of securities
made by the Fund (such loans to be made pursuant to the
terms of the Fund's current registration statement), but
only against receipt of adequate collateral as agreed upon
from time to time by the Custodian and the Fund, which may
be in the form of cash or obligations issued by the United
States government, its agencies or instrumentalities.

10) For delivery as security in connection with any borrowings
by the Fund requiring a pledge or hypothecation of assets
by the Fund (if then permitted under circumstances
described in the current registration statement of the
Fund), provided, that the securities shall be released
only upon payment to the Custodian of the monies borrowed,
except that in cases where additional collateral is
required to secure a borrowing already made, further
securities may be released for that purpose; upon receipt
of proper instructions, the Custodian may pay any such
loan upon redelivery to it of the securities pledged or
hypothecated therefor and upon surrender of the note or
notes evidencing the loan;

11) When required for delivery in connection with any
redemption or repurchase of Shares of the Fund in
accordance with the provisions of Paragraph J hereof;

12) For delivery in accordance with the provisions of any
agreement between the Custodian (or a subcustodian
employed pursuant to Section 2 hereof) and a broker-dealer
registered under the Securities Exchange Act of 1934 and,
if necessary, the Fund, relating to compliance with the
rules of The Options Clearing Corporation or of any
registered national securities exchange, or of any similar
organization or organizations, regarding deposit or escrow
or other arrangements in connection with options
transactions by the Fund;

13) For delivery in accordance with the provisions of any
agreement among the Fund, the Custodian (or a subcustodian
employed pursuant to Section 2 hereof),

and a futures commission merchant, relating to compliance
with the rules of the Commodity Futures Trading Commission
and/or of any

<PAGE>

contract market or commodities exchange or similar
organization, regarding futures margin account deposits or
payments in connection with futures transactions by
the Fund;

14) For any other proper corporate purpose, but only upon
receipt of, in addition to proper instructions, a
certified copy of a vote of the Board specifying the
securities to be delivered, setting forth the purpose for
which such delivery is to be made, declaring such purpose
to be proper corporate purpose, and naming the person or
persons to whom delivery of such securities shall be made.

C. REGISTRATION OF SECURITIES Securities held by the Custodian
(other than bearer securities) for the account of the Fund shall
be registered in the name of the Fund or in the name of any
nominee of the Fund or of any nominee of the Custodian, or in the
name or nominee name of any agent appointed pursuant to Paragraph
K hereof, or in the name or nominee name of any subcustodian
employed pursuant to Section 2 hereof, or in the name or nominee
name of The Depository Trust Company or Participants Trust Company
or Approved Clearing Agency or Federal Book-Entry System or
Approved Book-Entry System for Commercial Paper; provided, that
securities are held in an account of the Custodian or of such
agent or of such subcustodian containing only assets of the Fund
or only assets held by the Custodian or such agent or such
subcustodian as a custodian or subcustodian or in a fiduciary
capacity for customers. All certificates for securities accepted
by the Custodian or any such agent or subcustodian on behalf of
the Fund shall be in "street" or other good delivery form or shall
be returned to the selling broker or dealer who shall be advised
of the reason thereof.

D. BANK ACCOUNTS The Custodian shall open and maintain a separate
bank account or accounts in the name of the Fund, subject only to
draft or order by the Custodian acting in pursuant to the terms of
this Agreement, and shall hold in such account or accounts,
subject to the provisions hereof, all cash received by it from or
for the account of the Fund other than cash maintained by the Fund
in a bank account established and used in accordance with Rule
17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for the Fund may be deposited by it to its credit as
Custodian in the Banking Department of the Custodian or in such
other banks or trust companies as the Custodian may in its
discretion deem necessary or desirable; provided, however, that
every such bank or trust company shall be qualified to act as a
custodian under the Investment Company Act of 1940 and that each
such bank or trust company and the funds to be deposited with each
such bank or trust company shall be approved in writing by two
officers of the Fund. Such funds shall be deposited by the
Custodian in its capacity as Custodian and shall be subject to
withdrawal only by the Custodian in that capacity.

<PAGE>

E. PAYMENT FOR SHARES OF THE FUND The Custodian shall make
appropriate arrangements with the Transfer Agent and the principal
underwriter of the Fund to enable the Custodian to make certain it
promptly receives the cash or other consideration due to the Fund
for such new or treasury Shares as may be issued or sold from time
to time by the Fund, in accordance with the governing documents
and offering prospectus and statement of additional information of
the Fund. The Custodian will provide prompt notification to the
Fund of any receipt by it of payments for Shares of the Fund.

F. INVESTMENT AND AVAILABILITY OF FEDERAL FUNDS Upon agreement
between the Fund and the Custodian, the Custodian shall, upon the
receipt of proper instructions, which may be continuing
instructions when deemed appropriate by the parties, invest in
such securities and instruments as may be set forth in such
instructions on the same day as received all federal funds
received after a time agreed upon between the Custodian and the
Fund.

G. COLLECTIONS The Custodian shall promptly collect all income and
other payments with respect to registered securities held
hereunder to which the Fund shall be entitled either by law or
pursuant to custom in the securities business, and shall promptly
collect all income and other payments with respect to bearer
securities if, on the date of payment by the issuer, such
securities are held by the Custodian or agent thereof and shall
credit such income, as collected, to the Fund's custodian account.

The Custodian shall do all things necessary and proper in connection with such
prompt collections and, without limiting the generality of the foregoing, the
Custodian shall

1) Present for payment all coupons and other income items
requiring presentations;

2) Present for payment all securities which may mature or be
called, redeemed, retired or otherwise become payable;

3) Endorse and deposit for collection, in the name of the
Fund, checks, drafts or other negotiable instruments;

4) Credit income from securities maintained in a Securities
System or in an Approved Book-Entry System for Commercial
Paper at the time funds become available to the Custodian;
in the case of securities maintained in The Depository
Trust Company funds shall be deemed available to the Fund
not later than the opening of business on the first
business day after receipt of such funds by the Custodian.

<PAGE>

The Custodian shall notify the Fund as soon as reasonably practicable whenever
income due on any security is not promptly collected. In any case in which the
Custodian does not receive any due and unpaid income after it has made demand
for the same, it shall immediately so notify the Fund in writing, enclosing
copies of any demand letter, any written response thereto, and memoranda of all
oral responses thereto and to telephonic demands, and await instructions from
the Fund; the Custodian shall in no case have any liability for any nonpayment
of such income provided the Custodian meets the standard of care set forth in
Section 8 hereof. The Custodian shall not be obligated to take legal action
for collection unless and until reasonably indemnified to its satisfaction.

The Custodian shall also receive and collect all stock dividends, rights and
other items of like nature, and deal with the same pursuant to proper
instructions relative thereto.

H. PAYMENT OF FUND MONEYS Upon receipt of proper instructions, which
may be continuing instructions when deemed appropriate by the
parties, the Custodian shall pay out moneys of the Fund in the
following cases only:

1) Upon the purchase of securities, participation interests,
options, futures contracts, forward contracts and options
on futures contracts purchased for the account of the Fund
but only (a) against the receipt of

(i) such securities registered as provided in
Paragraph C hereof or in proper form for
transfer or

(ii) detailed instructions signed by an officer of the
Fund regarding the participation interests to be
purchased or

(iii) written confirmation of the purchase by the Fund
of the options, futures contracts, forward
contracts or options on futures contracts

by the Custodian (or by a subcustodian employed pursuant
to Section 2 hereof or by a clearing corporation of a
national securities exchange of which the Custodian is a
member or by any bank, banking institution or trust
company doing business in the United States or abroad
which is qualified under the Investment Company Act of
1940 to act as a custodian and which has been designated
by the Custodian as its agent for this purpose or by the
agent specifically designated in such instructions as
representing the purchasers of a new issue of privately
placed securities); (b) in the case of a purchase effected
through a Securities System, upon receipt of the
securities by the Securities System in accordance with the
conditions set forth in Paragraph L hereof; (c) in the
case of a purchase of commercial paper effected through an
Approved Book-Entry System for Commercial Paper, upon

<PAGE>
receipt of the paper by the Custodian or subcustodian in
accordance with the conditions set forth in Paragraph M
hereof; (d) in the case of repurchase agreements entered
into between the Fund and another bank or a broker-
dealer, against receipt by the Custodian of the securities
underlying the repurchase agreement either in certificate
form or through an entry crediting the Custodian's
segregated, non-proprietary account at the Federal Reserve
Bank of Boston with such securities along with written
evidence of the agreement by the bank or broker-dealer to
repurchase such securities from the Fund; or (e) with
respect to securities purchased outside of the United
States, in accordance with written procedures agreed to
from time to time in writing by the parties hereto;

2) When required in connection with the conversion, exchange
or surrender of securities owned by the Fund as set forth
in Paragraph B hereof;

3) When required for the redemption or repurchase of Shares
of the Fund in accordance with the provisions of Paragraph
J hereof;

4) For the payment of any expense or liability incurred by
the Fund, including but not limited to the following
payments for the account of the Fund: advisory fees,
distribution plan payments, interest, taxes, management
compensation and expenses, accounting, transfer agent and
legal fees, and other operating expenses of the Fund
whether or not such expenses are to be in whole or part
capitalized or treated as deferred expenses;

5) For the payment of any dividends or other distributions to
holders of Shares declared or authorized by the Board; and

6) For any other proper corporate purpose, but only upon
receipt of, in addition to proper instructions, a
certified copy of a vote of the Board, specifying the
amount of such payment, setting forth the purpose for
which such payment is to be made, declaring such purpose
to be a proper corporate purpose, and naming the person or
persons to whom such payment is to be made.

I. LIABILITY FOR PAYMENT IN ADVANCE OF RECEIPT OF SECURITIES
PURCHASED In any and every case where payment for purchase of
securities for the account of the Fund is made by the Custodian in
advance of receipt of the securities purchased in the absence of
specific written instructions signed by two officers of the Fund
to so pay in advance, the Custodian shall be absolutely liable to
the Fund for such securities to the same extent as if the
securities had been received by the Custodian; EXCEPT that in the
case of a repurchase agreement

<PAGE>

entered into by the Fund with a bank which is a member of the
Federal Reserve System, the Custodian may transfer funds to the
account of such bank prior to the receipt of (i) the securities in
certificate form subject to such repurchase agreement or (ii)
written evidence that the securities subject to such repurchase
agreement have been transferred by book-entry into a segregated
non-proprietary account of the Custodian maintained with the
Federal Reserve Bank of Boston or (iii) the safekeeping receipt,
PROVIDED that such securities have in fact been so transferred by
book-entry and the written repurchase agreement is received by the
Custodian in due course; AND EXCEPT that if the securities are to
be

purchased outside the United States, payment may be made in
accordance with procedures agreed to from time to time by the
parties hereto.

J. PAYMENTS FOR REPURCHASES OR REDEMPTIONS OF SHARES OF THE FUND
From such funds as may be available for the purpose, but subject
to any applicable votes of the Board and the current redemption
and repurchase procedures of the Fund, the Custodian shall, upon
receipt of written instructions from the Fund or from the Fund's
transfer agent or from the principal underwriter, make funds
and/or portfolio securities available for payment to holders of
Shares who have caused their Shares to be redeemed or repurchased
by the Fund or for the Fund's account by its transfer agent or
principal underwriter.

The Custodian may maintain a special checking account upon which
special checks may be drawn by shareholders of the Fund holding
Shares for which certificates have not been issued. Such checking
account and such special checks shall be subject to such rules and
regulations as the Custodian and the Fund may from time to time
adopt. The Custodian or the Fund may suspend or terminate use of
such checking account or such special checks (either generally or
for one or more shareholders) at any time. The Custodian and the
Fund shall notify the other immediately of any such suspension or
termination.

K. APPOINTMENT OF AGENTS BY THE CUSTODIAN The Custodian may at any
time or times in its discretion appoint (and may at any time
remove) any other bank or trust company (provided such bank or
trust company is itself qualified under the Investment Company Act
of 1940 to act as a custodian or is itself an eligible foreign
custodian within the meaning of Rule 17f-5 under said Act) as the
agent of the Custodian to carry out such of the duties and
functions of the Custodian described in this Section 3 as the
Custodian may from time to time direct; provided, however, that
the appointment of any such agent shall not relieve the Custodian
of any of its responsibilities or liabilities hereunder, and as
between the Fund and the Custodian the Custodian shall be fully
responsible for the acts and omissions of any such agent. For the
purposes of this Agreement, any property of the Fund held by any
such agent shall be deemed to be held by the Custodian hereunder.

<PAGE>

L. DEPOSIT OF FUND PORTFOLIO SECURITIES IN SECURITIES SYSTEMS The
Custodian may deposit and/or maintain securities owned by the Fund

(1) in The Depository Trust Company;

(2) in Participants Trust Company;

(3) in any other Approved Clearing Agency;

(4) in the Federal Book-Entry System; or

(5) in an Approved Foreign Securities Depository

in each case only in accordance with applicable Federal Reserve
Board and Securities and Exchange Commission rules and
regulations, and at all times subject to the following
provisions:

(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep securities of
the Fund in a Securities System provided that such securities are
maintained in a non-proprietary account ("Account") of the
Custodian or such subcustodian in the Securities System which
shall not include any assets of the Custodian or such subcustodian
or any other person other than assets held by the Custodian or
such subcustodian as a fiduciary, custodian, or otherwise for its
customers.

(b) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify by
book-entry those securities belonging to the Fund, and the
Custodian shall be fully and completely responsible for
maintaining a recordkeeping system capable of accurately and
currently stating the Fund's holdings maintained in each such
Securities System.

(c) The Custodian shall pay for securities purchased in book-entry
form for the account of the Fund only upon (i) receipt of notice
or advice from the Securities System that such securities have
been transferred to the Account, and (ii) the making of any entry
on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund only upon (i)
receipt of notice or advice from the Securities System that
payment for such securities has been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian to
reflect such transfer and payment for the account of the Fund.
Copies of all notices or advises from the Securities System of
transfers of securities for the account of the Fund shall identify
the Fund, be maintained for the Fund by the Custodian and be
promptly provided to the Fund at its request.

<PAGE>

The Custodian shall promptly send to the Fund confirmation
of each transfer to or from the

account of the Fund in the form of a written advice or notice of
each such transaction, and shall furnish to the Fund copies of
daily transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund on the next business
day.

(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to
the Securities System's accounting system, system of internal
accounting controls or procedures for safeguarding securities
deposited in the Securities System; the Custodian shall promptly
send to the Fund any report or other communication relating to the
Custodian's internal accounting controls and procedures for
safeguarding securities deposited in any Securities System; and
the Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any Securities
System. The Custodian's books and records relating to the Fund's
participation in each Securities System will at all times during
regular business hours be open to the inspection of the Fund's
authorized officers, employees or agents.

(e) The Custodian shall not act under this Paragraph L in the absence
of receipt of a certificate of an officer of the Fund that the
Board has approved the use of a particular Securities System; the
Custodian shall also obtain appropriate assurance from the
officers of the Fund that the Board has annually reviewed and
approved the continued use by the Fund of each Securities System,
so long as such review and approval is required by Rule 17f-4
under the Investment Company Act of 1940, and the Fund shall
promptly notify the Custodian if the use of a Securities System is
to be discontinued; at the request of the Fund, the Custodian will
terminate the use of any such Securities System as promptly as
practicable.

(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason of
any negligence, misfeasance or misconduct of the Custodian or any
of its agents or subcustodians or of any of its or their employees
or from any failure of the Custodian or any such agent or
subcustodian to enforce effectively such rights as it may have
against the Securities System or any other person; at the election
of the Fund, it shall be entitled to be

<PAGE>

subrogated to the rights of the Custodian with respect to any claim
against the Securities System or any other person which the
Custodian may have as a consequence of any such loss or damage
if and to the extent that the Fund has not been made whole for any
such loss or damage.

M. DEPOSIT OF FUND COMMERCIAL PAPER IN AN APPROVED BOOK-ENTRY SYSTEM FOR
COMMERCIAL PAPER Upon receipt of proper instructions with respect to
each issue of direct issue commercial paper purchased by the Fund, the
Custodian may deposit and/or maintain direct issue commercial paper
owned by the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable Securities and
Exchange Commission rules, regulations, and no-action correspondence,
and at all times subject to the following provisions:

(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep
commercial paper of the Fund in an Approved Book-Entry
System for Commercial Paper, provided that such paper is
issued in book entry form by the Custodian or subcustodian
on behalf of an issuer with which the Custodian or
subcustodian has entered into a book-entry agreement and
provided further that such paper is maintained in a
non-proprietary account ("Account") of the Custodian or
such subcustodian in an Approved Book-Entry System for
Commercial Paper which shall not include any assets of the
Custodian or such subcustodian or any other person other
than assets held by the Custodian or such subcustodian as
a fiduciary, custodian, or otherwise for its customers.

(b) The records of the Custodian with respect to commercial
paper of the Fund which is maintained in an Approved
Book-Entry System for Commercial Paper shall identify by
book-entry each specific issue of commercial paper
purchased by the Fund which is included in the System and
shall at all times during regular business hours be open
for inspection by authorized officers, employees or agents
of the Fund. The Custodian shall be fully and completely
responsible for maintaining a recordkeeping system capable
of accurately and currently stating the Fund's holdings of
commercial paper maintained in each such System.

(c) The Custodian shall pay for commercial paper purchased in
book-entry form for the account of the Fund only upon
contemporaneous (i) receipt of notice or advice

from the issuer that such paper has been issued, sold and
transferred to the Account, and (ii) the making of an
entry on the records of the Custodian to reflect such
purchase, payment and transfer for the account of the
Fund. The Custodian shall transfer such commercial

<PAGE>

paper which is sold or cancel such commercial paper which
is redeemed for the account of the Fund only upon
contemporaneous (i) receipt of notice or advice that
payment for such paper has been transferred to the Account,
and (ii) the making of an entry on the records of the
Custodian to reflect such transfer or redemption and
payment for the account of the Fund. Copies of all notices,
advises and confirmations of transfers of commercial paper
for the account of the Fund shall identify the Fund, be
maintained for the Fund by the Custodian and be
promptly provided to the Fund at its request. The
Custodian shall promptly send to the Fund confirmation of
each transfer to or from the account of the Fund in the
form of a written advice or notice of each such
transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in
the System for the account of the Fund on the next business
day.

(d) The Custodian shall promptly send to the Fund any report
or other communication received or obtained by the
Custodian relating to each System's accounting system,
system of internal accounting controls or procedures for
safeguarding commercial paper deposited in the System; the
Custodian shall promptly send to the Fund any report or
other communication relating to the Custodian's internal
accounting controls and procedures for safeguarding
commercial paper deposited in any Approved Book-Entry
System for Commercial Paper; and the Custodian shall
ensure that any agent appointed pursuant to Paragraph K
hereof or any subcustodian employed pursuant to Section 2
hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to
such agent's or subcustodian's internal accounting
controls and procedures for safeguarding securities
deposited in any Approved Book-Entry System for Commercial
Paper.

(e) The Custodian shall not act under this Paragraph M in the
absence of receipt of a certificate of an officer of the
Fund that the Board has approved the use of a particular
Approved Book-Entry System for Commercial Paper; the
Custodian shall also obtain appropriate assurance from the
officers of the Fund that the Board

has annually reviewed and approved the continued use by
the Fund of each Approved Book-Entry System for Commercial
Paper, so long as such review and approval is required by
Rule 17f-4 under the Investment Company Act of 1940, and
the Fund shall promptly notify the Custodian if the use of
an Approved Book-Entry System for Commercial Paper is to
be discontinued; at the request of the Fund, the Custodian
will terminate the use of any such System as promptly as
practicable.

<PAGE>

(f) The Custodian (or subcustodian, if the Approved Book-Entry
System for Commercial Paper is maintained by the
subcustodian) shall issue physical commercial paper or
promissory notes whenever requested to do so by the Fund
or in the event of an electronic system failure which
impedes issuance, transfer or custody of direct issue
commercial paper by book-entry.

(g) Anything to the contrary in this Agreement
notwithstanding, the Custodian shall be liable to the Fund
for any loss or damage to the Fund resulting from use of
any Approved Book-Entry System for Commercial Paper by
reason of any negligence, misfeasance or misconduct of the
Custodian or any of its agents or subcustodians or of any
of its or their employees or from any failure of the
Custodian or any such agent or subcustodian to enforce
effectively such rights as it may have against the System,
the issuer of the commercial paper or any other person; at
the election of the Fund, it shall be entitled to be
subrogated to the rights of the Custodian with respect to
any claim against the System, the issuer of the commercial
paper or any other person which the Custodian may have as
a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such
loss or damage.

N. SEGREGATED ACCOUNT The Custodian shall upon receipt of proper
instructions establish and maintain a segregated account or
accounts for and on behalf of the Fund, into which account or
accounts may be transferred cash and/or securities, including
securities maintained in an account by the Custodian pursuant to
Paragraph L hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Custodian and any registered
broker-dealer (or any futures commission merchant), relating to
compliance with the rules of the Options Clearing Corporation and
of any registered national securities exchange (or of the
Commodity Futures Trading Commission or of any contract market or
commodities exchange), or of any similar

organization or organizations, regarding escrow or deposit or
other arrangements in connection with transactions by the Fund,
(ii) for purposes of segregating cash or U.S. Government
securities in connection with options purchased, sold or written
by the Fund or futures contracts or options thereon purchased or
sold by the Fund, (iii) for the purposes of compliance by the Fund
with the procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the Securities and
Exchange Commission relating to the maintenance of segregated
accounts by registered investment companies and (iv) for other
proper purposes, but only, in the case of clause (iv), upon
receipt of, in addition to proper instructions, a certificate
signed by two officers of the Fund, setting forth the purpose such
segregated account and declaring such purpose to be a proper
purpose.

<PAGE>

O. OWNERSHIP CERTIFICATES FOR TAX PURPOSES The Custodian shall
execute ownership and other certificates and affidavits for all
federal and state tax purposes in connection with receipt of
income or other payments with respect to securities of the Fund
held by it and in connection with transfers of securities.

P. PROXIES The Custodian shall, with respect to the securities held
by it hereunder, cause to be promptly delivered to the Fund all
forms of proxies and all notices of meetings and any other notices
or announcements or other written information affecting or
relating to the securities, and upon receipt of proper
instructions shall execute and deliver or cause its nominee to
execute and deliver such proxies or other authorizations as may be
required. Neither the Custodian nor its nominee shall vote upon
any of the securities or execute any proxy to vote thereon or give
any consent or take any other action with respect thereto (except
as otherwise herein provided) unless ordered to do so by proper
instructions.

Q. COMMUNICATIONS RELATING TO FUND PORTFOLIO SECURITIES The
Custodian shall deliver promptly to the Fund all written
information (including, without limitation, pendency of call and
maturities of securities and participation interests and
expirations of rights in connection therewith and notices of
exercise of call and put options written by the Fund and the
maturity of futures contracts purchased or sold by the Fund)
received by the Custodian from issuers and other persons relating
to the securities and participation interests being held for the
Fund. With respect to tender or exchange offers, the Custodian
shall deliver promptly to the Fund all written information

received by the Custodian from issuers and other persons relating
to the securities and participation interests whose tender or
exchange is sought and from the party (or his agents) making the
tender or exchange offer.

R. EXERCISE OF RIGHTS; TENDER OFFERS In the case of tender offers,
similar offers to purchase or exercise rights (including, without
limitation, pendency of calls and maturities of securities and
participation interests and expirations of rights in connection
therewith and notices of exercise of call and put options and the
maturity of futures contracts) affecting or relating to securities
and participation interests held by the Custodian under this
Agreement, the Custodian shall have responsibility for promptly
notifying the Fund of all such offers in accordance with the
standard of reasonable care set forth in Section 8 hereof. For
all such offers for which the Custodian is responsible as provided
in this Paragraph R, the Fund shall have responsibility for
providing the Custodian with all necessary instructions in timely
fashion. Upon receipt of proper instructions, the Custodian shall
timely deliver to the issuer or trustee thereof, or to the agent
of either, warrants, puts, calls, rights or similar

<PAGE>

securities for the purpose of being exercised or sold upon proper
receipt therefor and upon receipt of assurances satisfactory to
the Custodian that the new securities and cash, if any,
acquired by such action are to be delivered to the Custodian or
any subcustodian employed pursuant to Section 2 hereof. Upon
receipt of proper instructions, the Custodian shall timely deposit
securities upon invitations for tenders of securities upon proper
receipt therefor and upon receipt of assurances satisfactory to
the Custodian that the consideration to be paid or delivered or
the tendered securities are to be returned to the Custodian or
subcustodian employed pursuant to Section 2 hereof.
Notwithstanding any provision of this Agreement to the contrary,
the Custodian shall take all necessary action, unless otherwise
directed to the contrary by proper instructions, to comply with
the terms of all mandatory or compulsory exchanges, calls,
tenders, redemptions, or similar rights of security ownership, and
shall thereafter promptly notify the Fund in writing of such
action.

S. DEPOSITORY RECEIPTS The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign
securities to the depository used by an issuer of American
Depository Receipts, European Depository Receipts or International
Depository Receipts (hereinafter collectively referred to as
"ADRs") for such securities,

against a written receipt therefor adequately describing such
securities and written evidence satisfactory to the Custodian that
the depository has acknowledged receipt of instructions to issue
with respect to such securities ADRs in the name of a nominee of
the Custodian or in the name or nominee name of any subcustodian
employed pursuant to Section 2 hereof, for delivery to the
Custodian or such subcustodian at such place as the Custodian or
such subcustodian may from time to time designate. The Custodian
shall, upon receipt of proper instructions, surrender ADRs to the
issuer thereof against a written receipt therefor adequately
describing the ADRs surrendered and written evidence satisfactory
to the Custodian that the issuer of the ADRs has acknowledged
receipt of instructions to cause its depository to deliver the
securities underlying such ADRs to the Custodian or to a
subcustodian employed pursuant to Section 2 hereof.

T. INTEREST BEARING CALL OR TIME DEPOSITS The Custodian shall, upon
receipt of proper instructions, place interest bearing fixed term
and call deposits with the banking department of such banking
institution (other than the Custodian) and in such amounts as the
Fund may designate. Deposits may be denominated in U.S. Dollars
or other currencies. The Custodian shall include in its records
with respect to the assets of the Fund appropriate notation as to
the amount and currency of each such deposit, the accepting
banking institution and other appropriate details and shall retain
such forms of advice or receipt evidencing the deposit, if any, as
may be forwarded to the Custodian by the banking

<PAGE>

institution. Such deposits shall be deemed portfolio securities
of the applicable Fund for the purposes of this Agreement, and the
Custodian shall be responsible for the collection of income from
such accounts and the transmission of cash to and from such
accounts.

U. Options, Futures Contracts and Foreign Currency Transactions
------------------------------------------------------------

1. OPTIONS. The Custodians shall, upon receipt of proper
instructions and in accordance with the provisions of any
agreement between the Custodian, any registered
broker-dealer and, if necessary, the Fund, relating to
compliance with the rules of the Options Clearing
Corporation or of any registered national securities
exchange or similar organization or organizations, receive
and retain confirmations or other documents, if any,
evidencing the purchase or writing of an option on a
security, securities index, currency or other financial
instrument or index by the Fund;

deposit and maintain in a segregated account for each Fund
separately, either physically or by book-entry in a
Securities System, securities subject to a covered call
option written by the Fund; and release and/or transfer
such securities or other assets only in accordance with a
notice or other communication evidencing the expiration,
termination or exercise of such covered option furnished
by the Options Clearing Corporation, the securities or
options exchange on which such covered option is traded or
such other organization as may be responsible for handling
such options transactions. The Custodian and the
broker-dealer shall be responsible for the sufficiency of
assets held in each Fund's segregated account in
compliance with applicable margin maintenance
requirements.

2. FUTURES CONTRACTS The Custodian shall, upon receipt of
proper instructions, receive and retain confirmations and
other documents, if any, evidencing the purchase or sale
of a futures contract or an option on a futures contract
by the Fund; deposit and maintain in a segregated account,
for the benefit of any futures commission merchant, assets
designated by the Fund as initial, maintenance or
variation "margin" deposits (including mark- to-market
payments) intended to secure the Fund's performance of its
obligations under any futures contracts purchased or sold
or any options on futures contracts written by Fund, in
accordance with the provisions of any agreement or
agreements among the Fund, the Custodian and such futures
commission merchant, designed to comply with the rules of
the Commodity Futures Trading Commission and/or of any
contract market or commodities exchange or similar
organization regarding such margin deposits or payments;
and release and/or transfer assets in such margin accounts
only in

<PAGE>

accordance with any such agreements or rules. The
Custodian and the futures commission merchant shall be
responsible for the sufficiency of assets held in the
segregated account in compliance with the applicable
margin maintenance and mark-to-market payment requirements.

3. FOREIGN EXCHANGE TRANSACTIONS The Custodian shall,
pursuant to proper instructions, enter into or cause a
subcustodian to enter into foreign exchange contracts,
currency swaps or options to purchase and sell foreign
currencies for spot and future delivery on behalf and for
the account of the Fund. Such transactions may be
undertaken by the Custodian or subcustodian with such

banking or financial institutions or other currency
brokers, as set forth in proper instructions. Foreign
exchange contracts, swaps and options shall be deemed to
be portfolio securities of the Fund; and accordingly, the
responsibility of the Custodian therefor shall be the same
as and no greater than the Custodian's responsibility in
respect of other portfolio securities of the Fund. The
Custodian shall be responsible for the transmittal to and
receipt of cash from the currency broker or banking or
financial institution with which the contract or option is
made, the maintenance of proper records with respect to
the transaction and the maintenance of any segregated
account required in connection with the transaction. The
Custodian shall have no duty with respect to the selection
of the currency brokers or banking or financial
institutions with which the Fund deals or for their
failure to comply with the terms of any contract or
option. Without limiting the foregoing, it is agreed that
upon receipt of proper instructions and insofar as funds
are made available to the Custodian for the purpose, the
Custodian may (if determined necessary by the Custodian to
consummate a particular transaction on behalf and for the
account of the Fund) make free outgoing payments of cash
in the form of U.S. dollars or foreign currency before
receiving confirmation of a foreign exchange contract or
swap or confirmation that the countervalue currency
completing the foreign exchange contract or swap has been
delivered or received. The Custodian shall not be
responsible for any costs and interest charges which may
be incurred by the Fund or the Custodian as a result of
the failure or delay of third parties to deliver foreign
exchange; provided that the Custodian shall nevertheless
be held to the standard of care set forth in, and shall be
liable to the Fund in accordance with, the provisions of
Section 8.

V. ACTIONS PERMITTED WITHOUT EXPRESS AUTHORITY The Custodian may in its
discretion, without express authority from the Fund:

<PAGE>

1) make payments to itself or others for minor expenses of
handling securities or other similar items relating to its
duties under this Agreement, PROVIDED, that all such
payments shall be accounted for by the Custodian to the
Treasurer of the Fund;

2) surrender securities in temporary form for securities in
definitive form;

3) endorse for collection, in the name of the Fund, checks,
drafts and other negotiable instruments; and

4) in general, attend to all nondiscretionary details in
connection with the sale, exchange, substitution,
purchase, transfer and other dealings with the securities
and property of the Fund except as otherwise directed by
the Fund.

4. Duties of Bank with Respect to Books of Account and Calculations of Net
Asset Value
-----------------------------------------------------------------------

The Bank shall as Agent (or as Custodian, as the case may be) keep such books
of account and render as at the close of business on each day a detailed
statement of the amounts received or paid out and of securities received or
delivered for the account of the Fund during said day and such other
statements, including a daily trial balance and inventory of the Fund's
portfolio securities; and shall furnish such other financial information and
data as from time to time requested by the Treasurer or any authorized officer
of the Fund; and shall compute and determine, as of the close of regular
trading on the New York Stock Exchange, or at such other time or times as the
Board may determine, the net asset value of a Share in the Fund, such
computation and determination to be made in accordance with the governing
documents of the Fund and the votes and instructions of the Board at the time
in force and applicable, and promptly notify the Fund and its investment
adviser and such other persons as the Fund may request of the result of such
computation and determination. In computing the net asset value the Custodian
may rely upon security quotations received by telephone or otherwise from
sources or pricing services designated by the Fund by proper instructions, and
may further rely upon information furnished to it by any authorized officer of
the Fund relative (a) to liabilities of the Fund not appearing on its books of
account, (b) to the existence, status and proper treatment of any reserve or
reserves, (c) to any procedures established by the Board regarding the
valuation of portfolio securities, and (d) to the value to be assigned to any
bond, note, debenture, Treasury bill, repurchase agreement, subscription right,
security, participation interest or other asset or property for which market
quotations are not readily available.

5. Records and Miscellaneous Duties
--------------------------------

The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund

<PAGE>

under the Investment Company Act of 1940, with particular attention to Section
31 thereof and Rules 31a-1 and 31a-2 thereunder, applicable federal and state
tax laws and any other law or administrative rules or procedures which may be
applicable to the Fund. All books of account and records maintained by the Bank
in connection with the performance of its duties under this Agreement shall be
the property of the Fund, shall at all times during the regular business hours
of the Bank be open for inspection by authorized officers, employees or agents
of the Fund, and in the event of termination of this Agreement shall be
delivered to the Fund or to such other person or persons as shall be designated
by the Fund. Disposition of any account or record after any required period of
preservation shall be only in accordance with specific instructions received
from the Fund. The Bank shall assist generally in the preparation of
reports to shareholders, audits of accounts, and other ministerial matters of
like nature; and, upon request, shall furnish the Fund's auditors with an
attested inventory of securities held with appropriate information as to
securities in transit or in the process of purchase or sale and with such other
information as said auditors may from time to time request. The Custodian shall
also maintain records of all receipts, deliveries and locations of such
securities, together with a current inventory thereof, and shall conduct
periodic verifications (including sampling counts at the Custodian) of
certificates representing bonds and other securities for which it is responsible
under this Agreement in such manner as the Custodian shall determine from time
to time to be advisable in order to verify the accuracy of such inventory. The
Bank shall not disclose or use any books or records it has prepared or
maintained by reason of this Agreement in any manner except as expressly
authorized herein or directed by the Fund, and the Bank shall keep confidential
any information obtained by reason of this Agreement.

6. Opinion of Fund's Independent Public Accountants
------------------------------------------------

The Custodian shall take all reasonable action, as the Fund may from time to
time request, to enable the Fund to obtain from year to year favorable opinions
from the Fund's independent public accountants with respect to its activities
hereunder in connection with the preparation of the Fund's registration
statement and Form N-SAR or other periodic reports to the Securities and
Exchange Commission and with respect to any other requirements of such
Commission.

7. Compensation and Expenses of Bank
---------------------------------

The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Fund and the
Bank. The Bank shall entitled to receive from the Fund on demand reimbursement
for its cash disbursements, expenses and charges, including counsel fees, in
connection with its duties as Custodian and Agent hereunder, but excluding
salaries and usual overhead expenses.

8. Responsibility of Bank
----------------------

<PAGE>

So long as and to the extent that it is in the exercise of reasonable care, the
Bank as Custodian and Agent shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties.

The Bank as Custodian and Agent shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Fund) on all matters, and shall
be without liability for any action reasonably taken or omitted pursuant to
such advice.

The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding
the foregoing, nothing contained in this paragraph is intended to nor shall it
be construed to modify the standards of care and responsibility set forth in
Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.

The Custodian shall be liable for the acts or omissions of a foreign banking
institution to the same extent as set forth with respect to subcustodians
generally in Section 2 hereof, provided that, regardless of whether assets are
maintained in the custody of a foreign banking institution, a foreign
securities depository or a branch of a U.S. bank, the Custodian shall not be
liable for any loss, damage, cost, expense, liability or claim resulting from,
or caused by, the direction of or authorization by the Fund to maintain custody
of any securities or cash of the Fund in a foreign county including, but not
limited to, losses resulting from nationalization, expropriation, currency
restrictions, acts of war, civil war or terrorism, insurrection, revolution,
military or usurped powers, nuclear fission, fusion or radiation, earthquake,
storm or other disturbance of nature or acts of God.

If the Fund requires the Bank in any capacity to take any action with respect
to securities, which action involves the payment of money or which action may,
in the opinion of the Bank, result in the Bank or its nominee assigned to the
Fund being liable for the payment of money or incurring liability of some other
form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.

9. Persons Having Access to Assets of the Fund
-------------------------------------------

(i) No trustee, director, general partner, officer, employee
or agent of the Fund shall have physical access to the
assets of the Fund held by the Custodian or be authorized
or permitted to withdraw any investments of the Fund, nor
shall the Custodian deliver any assets of the Fund to any
such person. No officer or director, employee or agent of
the Custodian who holds any similar position with the Fund
or the

<PAGE>

investment adviser of the Fund shall have access to the
assets of the Fund.

(ii) Access to assets of the Fund held hereunder shall only be
available to duly authorized officers, employees,
representatives or agents of the Custodian or other
persons or entities for whose actions the Custodian shall
be responsible to the extent permitted hereunder, or to
the Fund's independent public accountants in connection
with their auditing duties performed on behalf of the
Fund.

(iii) Nothing in this Section 9 shall prohibit any officer,
employee or agent of the Fund or of the investment adviser
of the Fund from giving instructions to the Custodian or
executing a certificate so long as it does not result in
delivery of or access to assets of the Fund prohibited by
paragraph (i) of this Section 9.

10. Effective Period, Termination and Amendment; Successor Custodian
----------------------------------------------------------------

This Agreement shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid
to the other party, such termination to take effect not sooner than sixty (60)
days after the date of such delivery or mailing; provided, that the Fund may at
any time by action of its Board, (i) substitute another bank or trust company
for the Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Agreement in the event of the appointment of a
conservator or receiver for the Custodian by the Federal Deposit Insurance
Corporation or by the Banking Commissioner of The Commonwealth of Massachusetts
or upon the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction. Upon termination of the
Agreement, the Fund shall pay to the Custodian such compensation as may be due
as of the date of such termination and shall likewise reimburse the Custodian
for its costs, expenses and disbursements.

Unless the holders of a majority of the outstanding Shares of the Fund vote to
have the securities, funds and other properties held hereunder delivered and
paid over to some other bank or trust company, specified in the vote, having
not less than $2,000,000 of aggregate capital, surplus and undivided profits,
as shown by its last published report, and meeting such other qualifications
for custodians set forth in the Investment Company Act of 1940, the Board
shall, forthwith, upon giving or receiving notice of termination of this
Agreement, appoint as successor custodian, a bank or trust company having such
qualifications. The Bank, as Custodian, Agent or otherwise, shall, upon
termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no such vote has been

<PAGE>

adopted by the shareholders and that no written order designating a successor
custodian shall have been delivered to the Bank on or before the date when such
termination shall become effective, then the Bank shall not deliver the
securities, funds and other properties of the Fund to the Fund but shall have
the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all funds, securities and properties of the Fund held by or
deposited with the Bank, and all books of account and records kept by the Bank
pursuant to this Agreement, and all documents held by the Bank relative
thereto. Thereafter such bank or trust company shall be the successor of the
Custodian under this Agreement.

11. Interpretive and Additional Provisions
--------------------------------------

In connection with the operation of this Agreement, the Custodian and the Fund
may from time to time agree on such provisions interpretive of or in addition
to the provisions of this Agreement as may in their joint opinion be consistent
with the general tenor of this Agreement. Any such interpretive or additional
provisions shall be in a writing signed by both parties and shall be annexed
hereto, provided that no such interpretive or additional provisions shall
contravene any applicable federal or state regulations or any provision of the
governing instruments of the Fund. No interpretive or additional provisions
made as provided in the preceding sentence shall be deemed to be an amendment
of this Agreement.

12. Certification as to Authorized Officers
---------------------------------------

The Secretary of the Fund shall at all times maintain on file with the Bank his
certification to the Bank, in such form as may be acceptable to the Bank, of
the names and signatures of the authorized officers of each fund, it being
understood that upon the occurence of any change in the information set forth
in the most recent certification on file (including without limitation any
person named in the most recent certification who has ceased to hold the office
designated therein), the Secretary of the Fund shall sign a new or amended
certification setting forth the change and the new, additional or ommitted
names or signatures. The Bank shall be entitled to rely and act upon any
officers named in the most recent certification.

13. Notices
-------

Notices and other writings delivered or mailed postage prepaid to the Fund
addressed to Thomas H. Drohan, John Hancock Advisers, Inc., 101 Huntington
Avenue, Boston, Massachusetts 02199, or to such other address as the Fund may
have designated to the Bank, in writing, or to Investors Bank & Trust Company,
24 Federal Street, Boston, Massachusetts 02110, shall be deemed to have been
properly delivered or given hereunder to the respective addressees.

<PAGE>

14. Massachusetts Law to Apply; Limitations on Liability
----------------------------------------------------

This Agreement shall be construed and the provisions thereof interpreted under
and in accordance with the laws of The Commonwealth of Massachusetts.

If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian and the Fund
arising out of this Agreement, and the Custodian shall not seek satisfaction of
any such claim or obligation from the trustees or shareholders of the Fund.
Each Fund, and each series or portfolio of a Fund, shall be liable only for its
own obligations to the Custodian under this Agreement and shall not be jointly
or severally liable for the obligations of any other Fund, series or portfolio
hereunder.

<PAGE>

15. Adoption of the Agreement by the Fund
-------------------------------------

The Fund represents that its Board has approved this Agreement and has duly
authorized the Fund to adopt this Agreement. This Agreement shall be deemed to
supersede and terminate, as of the date first written above, all prior
agreements between the Fund and the Bank relating to the custody of the Fund's
assets.

* * * *

<PAGE>

In Witness Whereof, the parties hereto have caused this agreement to be
executed in duplicate as of the date first written above by their respective
officers thereunto duly authorized.

John Hancock Mutual Funds

by: /s/ Robert G. Freedman
----------------------
Attest:

/s/Avery P. Maher
- -----------------

Investors Bank & Trust Company

by: /s/ Henry M. Joyce
------------------

Attest:

/s/ JM Keenan
- -------------

<PAGE>

Page 1 of 2

INVESTORS BANK & TRUST COMPANY

APPENDIX A

[EFFECTIVE JANUARY 30, 1995]

John Hancock Limited Term Government Fund
John Hancock Capital Series
John Hancock Special Value Fund
John Hancock Growth Fund
John Hancock Income Securities Trust
John Hancock Investors Trust
John Hancock Sovereign Bond Fund
John Hancock Sovereign Investors Fund, Inc.
John Hancock Sovereign Investors Fund
John Hancock Sovereign Balanced Fund
John Hancock Special Equities Fund
John Hancock Strategic Series
John Hancock Independence Diversified Core Equity Fund
John Hancock Strategic Income Fund
John Hancock Utilities Fund
John Hancock Tax-Exempt Income Fund
John Hancock Tax-Exempt Series Fund
California Portfolio
Massachusetts Portfolio
New York Portfolio
John Hancock Technology Series, Inc.
John Hancock National Aviation & Technology Fund
John Hancock Global Technology Fund
Freedom Investment Trust
John Hancock Gold & Government Fund
John Hancock Regional Bank Fund
John Hancock Sovereign U.S. Government Income Fund
John Hancock Managed Tax-Exempt Fund
John Hancock Sovereign Achievers Fund
Freedom Investment Trust II
John Hancock Special Opportunities Fund
Freedom Investment Trust III
John Hancock Discovery Fund

<PAGE>
Page 2 of 2

INVESTORS BANK & TRUST COMPANY

APPENDIX A

[EFFECTIVE JANUARY 30, 1995]

John Hancock Series, Inc.
John Hancock Emerging Growth Fund
John Hancock Global Resources Fund
John Hancock Government Income Fund
John Hancock High Yield Bond Fund
John Hancock High Yield Tax-Free Fund
John Hancock Money Market Fund B
John Hancock Cash Reserve, Inc.
John Hancock Current Interest
John Hancock U.S. Government Cash Reserve
John Hancock Capital Growth Fund
John Hancock Investment Trust
John Hancock Growth and Income Fund
John Hancock California Tax-Free Income Fund
John Hancock Tax-Free Bond Fund
John Hancock Bond Fund
John Hancock Investment Quality Bond Fund
John Hancock Government Securities Trust
John Hancock U.S. Government Trust
John Hancock Adjustable U.S. Government Trust
John Hancock Adjustable U.S. Government Fund
John Hancock Intermediate Government Trust
John Hancock Institutional Series Trust
John Hancock Berkeley Dividend Performers Fund
John Hancock Berkeley Bond Fund
John Hancock Berkeley Fundamental Value Fund
John Hancock Berkeley Sector Opportunity Fund
John Hancock Independence Diversified Core Equity Fund II
John Hancock Independence Value Fund
John Hancock Independence Growth Fund
John Hancock Independence Medium Capitalization Fund
John Hancock Independence Balanced Fund

JOHN HANCOCK GROWTH TRUST

TRANSFER AGENCY AND SERVICE AGREEMENT

Dated January 1, 1991

<PAGE>

TRANSFER AGENCY AND SERVICE AGREEMENT

AGREEMENT made as of the 1st day of January, 1991 by and between John
Hancock Growth Trust, a Massachusetts business trust, having its principal
office and place of business at 101 Huntington Avenue, Boston, Massachusetts
(the "Fund"), and John Hancock Fund Services, Inc., a Delaware corporation
having its principal office and place of business at 101 Huntington Avenue,
Boston, Massachusetts 02117 ("JHFSI").

WITNESSETH:

WHEREAS, the Fund desires to appoint JHFSI as its transfer agent, dividend
disbursing agent and agent in connection with certain other activities, and
JHFSI desires to accept such appointment;
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:

Article 1 Terms of Appointment: Duties of JHFSI
1.01 Subject to the terms and conditions set forth in this Agreement, the
Fund hereby, employs and appoints JHFSI to act as, and JHFSI agrees to act as
transfer agent for the Fund's authorized and issued shares of capital stock
("Shares"), with any accumulation, open-account or similar plans provided to the
shareholders of the Fund ("Shareholders") and set out in the currently effective
prospectus of the Fund, including without limitation any periodic investment
plan or periodic withdrawal program.
1.02 JHFSI agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and JHFSI, JHFSI shall:
(i) Receive for acceptance, orders for the purchase of Shares, and
promptly deliver payment and appropriate documentation therefor
to the Custodian of the Fund authorized pursuant to the
Declaration of Trust of the Fund (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate number of
Shares and hold such Shares in the appropriate Shareholder
account;
(iii) Receive for acceptance, redemption requests and redemption
directions and deliver the appropriate documentation therefor
to the Custodian;
(iv) At the appropriate time as and when it receives monies paid to
it by the Custodian with respect to any redemption, pay over or
cause to be paid over in the appropriate manner such monies as
instructed by the redeeming Shareholders;
(v) Effect transfers of Shares by the registered
owners thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Fund; and
(vii) Maintain records of account for and advise the Fund and its
Shareholders as to the foregoing; and
(viii) Record the issuance of Shares of the Fund and maintain pursuant
to SEC Rule 17Ad-10(e) a record of the total number of Shares
of the Fund which are authorized, based upon data provided to
it by the Fund, and issued and outstanding. JHFSI shall also
provide the Fund on a regular basis with the total number of
Shares which are authorized and issued and outstanding and
shall have no obligation, when recording the issuance of
Shares, to monitor the issuance of such Shares or to take
cognizance of any laws relating to the issue or sale of such
Shares, which functions shall be the sole responsibility of the
Fund.
(b) In addition to and not in lieu of the services set forth in the above
paragraph (a), JHFSI shall: (i) perform all of the customary services of a
transfer agent, dividend disbursing agent and, as relevant, agent in connection
with accumulation, open-account or similar plans (including without limitation
any periodic investment plan or periodic withdrawal program); including but not
limited to: maintaining all Shareholder accounts, preparing Shareholder meeting
lists, mailing proxies, receiving and tabulating proxies, mailing Shareholder
reports and prospectuses to current Shareholders, withholding taxes on U.S.
resident and non-resident alien accounts, preparing and filing U.S. Treasury
Department Forms 1099 and other appropriate forms required with respect to
dividends and distributions by federal authorities for all Shareholders,
preparing and mailing confirmations forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other confirmable
transactions in Shareholder accounts, preparing and mailing activity statements
for Shareholders, and providing Shareholder account information and (ii) provide
a system which will enable the Fund to monitor the total number of Shares sold
in each State.
(c) In addition, the Fund shall (i) identify to JHFSI in writing those
transactions and assets to be treated as exempt from the blue sky reporting for
each State and (ii) verify the establishment of transactions for each State on
the system prior to activation and thereafter monitor the daily activity for
each State. The responsibility of JHFSI for the Fund's blue sky State
registration status is solely limited to the initial establishment of
transactions subject to blue sky compliance by the Fund and the reporting of
such transactions to the Fund as provided above.
(d) Additionally, JHFSI shall:
(i) Utilize a system to identify all share transactions which involve
purchase and redemption orders that are processed at a time other than the
time of the computation of net asset value per share next computed after
receipt of such orders, and shall compute the net effect upon the Fund of
such transactions so identified on a daily and cumulative basis.
(ii) If upon any day the cumulative net effect of such transactions
upon the Fund is negative and exceed a dollar amount equivalent to 1/2 of 1
cent per share, JHFSI shall promptly make a payment to the Fund in cash or
through the use of a credit, in the manner described in paragraph (iv)
below, in such amount as may be necessary to reduce the negative cumulative
net effect to less than 1/2 of 1 cent per share.
(iii) If on the last business day of any month the cumulative net
effect upon the Fund (adjusted by the amount of all prior payments and
credits by JHFSI and the Fund) is negative, the Fund shall be entitled to a
reduction in the fee next payable under the Agreement by an equivalent
amount, except as provided in paragraph (iv) below. If on the last business
day in any month the cumulative net effect upon the Fund (adjusted by the
amount of all prior payments and credits by JHFSI and the Fund) is
positive, JHFSI shall be entitled to recover certain past payments and
reductions in fees, and to credit against all future payments and fee
reductions that may be required under the Agreement as herein described in
paragraph (iv) below.
(iv) At the end of each month, any positive cumulative net effect
upon the Fund shall be deemed to be a credit to JHFSI which shall first be
applied to permit JHFSI to recover any prior cash payments and fee
reductions made by it to the Fund under paragraphs (ii) and (iii) above
during the calendar year, by increasing the amount of the monthly fee under
the Agreement next payable in an amount equal to prior payments and fee
reductions made by JHFSI during such calendar year, but not exceeding the
sum of that month's credit and credits arising in prior months during such
calendar year to the extent such prior credits have not previously been
utilized as contemplated by this paragraph. Any portion of a credit to
JHFSI not so used by it shall remain as a credit to be used as payment
against the amount of any future negative cumulative net effects that would
otherwise require a cash payment or fee reduction to be made to the Fund
pursuant to paragraphs (ii) or (iii) above (regardless of whether or not
the credit or any portion thereof arose in the same calendar year as that
in which the negative cumulative net effects or any portion thereof arose).
(v) JHFSI shall supply to the Fund from time to time, as mutually
agreed upon, reports summarizing the transactions identified pursuant to
paragraph (i) above, and the daily and cumulative net effects of such
transactions, and shall advise the Fund at the end of each month of the net
cumulative effect at such time. JHFSI shall promptly advise the Fund if at
any time the cumulative net effect exceeds a dollar amount equivalent to
1/2 of 1 cent per share.
(vi) In the event that this Agreement is terminated for whatever
cause, or this provision 1.02 (d) is terminated pursuant to paragraph (vii)
below, the Fund shall promptly pay to JHFSI an amount in cash equal to the
amount by which the cumulative net effect upon the Fund is positive or, if
the cumulative net effect upon the Fund is negative, JHFSI shall promptly
pay to the Fund an amount in cash equal to the amount of such cumulative
net effect.
(vii) This provision 1.02 (d) of the Agreement may be terminated by
JHFSI at any time without cause, effective as of the close of business on
the date written notice (which may be by telex) is received by the Fund.

Procedures applicable to certain of these services may be establishes from
time to time by agreement between the Fund and JHFSI.

Article 2 Fees and Expenses
2.01 For performance by JHFSI pursuant to this Agreement, the Fund agrees
to pay JHFSI an annual maintenance fee for each Shareholder account as set out
in the initial fee schedule attached hereto. Such fees and out-of-pocket
expenses and advances identified under Section 2.02 below may be changed from
time to time subject to mutual written agreement between the Fund and JHFSI.
2.02 In addition to the fee paid under Section 2.01 above. the Fund agrees
to reimburse JHFSI for out-of-pocket expenses or advances incurred by JHFSI for
the items set out in the fee schedule attached hereto. In addition, any other
expenses incurred by JHFSI at the request or with the consent of the Fund, will
be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses promptly
following the mailing of the respective billing notice. Postage for mailing of
dividends, proxies, Fund reports and other mailings to all shareholder accounts
shall be advanced to JHFSI by the Fund at least seven (7) days prior to the
mailing date of such materials.

Article 3 Representations and Warranties of JHFSI JHFSI represents and warrants
to the Fund that:
3.01 It is a Delaware corporation duly organized and existing and in good
standing under the laws of the State of Delaware, and as a Foreign Corporation
under the Laws of the Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in the Commonwealth of
Massachusetts.
3.03 It is empowered under applicable laws and by its charter and By-Laws
to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize it to
enter into and perform this Agreement.
3.05 It has and will continue to have access to the necessary facilities,
equipment and personnel to perform its duties and obligations under this
Agreement.

Article 4 Representations and Warranties of the Fund The Fund represents and
warrants to JHFSI that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
4.02 It is empowered under applicable laws and by its Declaration of Trust
and By-Laws to enter into and perform this Agreement.
4.03 All Trust proceedings required by said Declaration of Trust and
By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.04 It is an open-end and diversified investment company registered under
the Investment Company Act of 1940.
4.05 A registration statement under the Securities Act of 1933 is currently
effective and will remain effective, and appropriate state securities law
filings have been made and will continue to be made, with respect to all Shares
of the Fund being offered for sale.

Article 5 Indemnification
5.01 JHFSI shall not be responsible for, and the Fund shall indemnify and
hold JHFSI harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liabilities arising out of or
attributable to:
(a) All actions of JHFSI or its agent or subcontractors required to be
taken pursuant to this Agreement, provided that such actions are taken in good
faith and without negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by JHFSI or its agents or subcontractors of
information, records and documents which (i) are received by JHFSI or its agents
or subcontractors and furnished to it by or on behalf of the Fund, and (ii) have
been prepared and/or maintained by the Fund or any other person or firm on
behalf of the Fund.
(d) The reliance on, or the carrying out by JHFSI or its agents or
subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement under the
federal securities laws or regulations or the securities laws or regulations of
any state that such Shares be registered in such state or in violation of any
stop order or other determination or ruling by any federal agency or any state
with respect to the offer or sale of such Shares in such state.

5.02 JHFSI shall indemnify and hold the Fund harmless from and against any
and all losses, damages, costs, charges, counsel fees, payments, expenses and
liabilities arising out of or attributed to any action or failure or omission to
act by JHFSI as a result of JHFSI's lack of good faith, negligence or willful
misconduct.
5.03 At any time JHFSI may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by JHFSI under this
Agreement, and JHFSI and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. JHFSI, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Fund, reasonably believed to
be genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided JHFSI or its
agents or subcontractors by machine readable input, telex, CRT data entry or
other similar means authorized by the Fund, and shall not be held to have notice
of any change of authority of any person, until receipt of written notice
thereof from the Fund. JHFSI, its agents and subcontractors shall also be
protected and indemnified in recognizing stock certificates which are reasonably
believed to bear the proper manual or facsimile signatures of the officer of the
Fund, and the proper countersignature of any former transfer agent or registrar,
or of a co-transfer agent or co-registrar.
5.04 In the event either party is unable to perform its obligations under
the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
5.05 Neither party to this Agreement shall be liable to the other party for
consequential damages under any provision of this Agreement or for any act or
failure to act hereunder.
5.06 In order that the indemnification provisions contained in this Article
5 shall apply, upon the assertion of a claim for which either party may be
required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.

Article 6 Covenants of the Fund and JHFSI
6.01 The Fund shall promptly furnish to JHFSI the following:
(a) A certified copy of the resolution of the Trustee of the Fund
authorizing the appointment of JHFSI and the execution and delivery of this
Agreement.
(b) A copy of the Declaration of Trust and By-Laws of the Fund and all
amendments thereto.
6.02 JHFSI hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such certificates,
forms and devices.
6.03 JHFSI shall keep records relating to the services to be performed
hereunder, in the form and manner as it may deem advisable. To the extent
required by Section 31 of the Investment Company Act of 1940, as amended, and
the Rules thereunder, JHFSI agrees that all such records prepared or maintained
by JHFSI relating to the services to be performed by JHFSI hereunder are the
property of the Fund and will be preserved, maintained and made available in
accordance with such Section and Rules, and will be surrendered to the Fund on
and in accordance with its request.
6.04 JHFSI and the Fund agree that all books, records, information and data
pertaining to the business of the other party which are exchanged or received
pursuant to the negotiation or the carrying out of this Agreement shall remain
confidential, and shall not be voluntarily disclosed to any other person, except
as may be required by law.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, JHFSI will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
instruction. JHFSI reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person.

Article 7 Termination of Agreement
7.01 This Agreement may be terminated by either party upon one hundred
twenty (120) days written notice to the other.
7.02 Should the Fund exercise its right to terminate, all out-of-pocket
expenses associated with the movement of records and material will be borne by
the Fund. Additionally, JHFSI reserves the right to charge for any other
reasonable expenses associated with such termination.

Article 8 Assignment
8.01 Except as provided in Section 8.03 below, neither this Agreement nor
any rights or obligations hereunder may be assigned by either party without the
written consent of the other party.
8.02 This Agreement shall inure to the benefit of and be binding upon the
parties and their respective permitted successors and assigns.
8.03 JHFSI may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data Services,
Inc., a Massachusetts corporation ("BFDS") which is duly registered as a
transfer agent pursuant to Section 17A (c)(1) of the Securities Exchange Act of
1934 ("Section 17A (c)(1)"), (ii) 440 Financial Group, (iii) or any other entity
JHFSI deems appropriate in order to comply with the terms and conditions of this
Agreement, provided, however, that JHFSI shall be as fully responsible to the
Fund for the acts and omissions of any subcontractor as it is for its own acts
and omissions.

Article 9 Amendment
9.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the
Trustees of the Fund.

Article 10 Massachusetts Law to Apply
10.01 This Agreement shall be construed and the provisions thereof
interpreted under and In accordance with the laws of The Commonwealth of
Massachusetts.

Article 11 Merger of Agreement
11.01 This Agreement constitutes the entire agreement between the parties
hereto and supersedes any prior agreement with respect to the subject hereof
whether oral or written.

Article 12 Limitation on Liability
12.01 The name John Hancock Growth Trust is the designation of the Trustees
under the Declaration of Trust dated October 5, 1984, as amended from time to
time. The obligations of such Trust as not personally binding upon, nor shall
resort be had to the property of, any of the Trustees, shareholders, officers,
employees or agents of such Trust, but the Trust's property only shall be bound.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.

ATTEST: JOHN HANCOCK GROWTH TRUST

/s/ Thomas H. Drohan BY: /s/ Edward J. Boudreau, Jr.

ATTEST: JOHN HANCOCK FUND SERVICES, INC.

/s/ Thomas H. Drohan BY: /s/ Robert H. Watts

D:\agrcont\agreement\transact\growth.doc

John Hancock Capital Series

Amendment No. 1 to
Transfer Agency and Service Agreement

WHEREAS, the John Hancock Capital Series, a Massachusetts business trust
previously designated John Hancock Growth Fund (the "Trust"), has entered into a
Transfer Agency and Service Agreement, dated as of January 1, 1991 (the
"Agreement") with John Hancock Fund Services, Inc. ("JHFSI") with respect to its
existing series of shares ("Growth Fund");

WHEREAS, the Board of Trustees of the Trust have determined to establish a
new series of shares of the Trust designated as John Hancock Special Value Fund
("Special Value Fund");

NOW THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto agree as follows:

1. Reference in the Agreement to the Trust and shares of beneficial
interest of the Trust shall be deemed to refer to both Growth Fund and Special
Value Fund.

2. In the event that the Trust establishes one or more series of shares in
addition to Growth Fund and Special Value Fund with respect to which it desires
to have JHFSI render services as a transfer agent under the terms of the
Agreement, it shall so notify JHFSI in writing, and if JHFSI agrees in writing
to provide such service, references in the Agreement to the Trust shall be
deemed to include such additional series of shares.

IN WITNESS WHEREOF, the parties hereto have caused this amendment to be
executed on the 1st day of October, 1993.

JOHN HANCOCK CAPITAL SERIES

By: /s/ Robert G. Freedman

JOHN HANCOCK FUND SERVICES, INC.

By: /s/ David A. King

(JOHN HANCOCK FUNDS LETTERHEAD)

April 24, 1995

John Hancock Capital Series
101 Huntington Avenue
Boston, MA 02199

RE: John Hancock Capital Series (the "Fund")
(File Nos. 2-29502; 811-1677) (0000045291)

Ladies and Gentlemen:

In connection with the filing of Post-Effective Amendment No. 23
pursuant to Rule 24e-2 under the Investment Company Act of 1940, as
amended, registering by Post-Effective Amendment No. 44 under the
Securities Act of 1933, as amended, 16,165 shares of the Fund sold in
reliance upon Rule 24e-2 during the fiscal year ending December 31,
1994, it is the opinion of the undersigned that such shares will be
legally issued, fully paid and nonassessable.

In connection with this opinion it should be noted that the Fund is an entity
of the type generally known as a "Massachusetts business trust." Under
Massachusetts law, shareholders of a Massachusetts business trust may be held
personally liable for the obligations of the Fund. However, the Fund's
Declaration of Trust disclaims shareholder liability for obligations of the
Fund and indemnifies any shareholder of the Fund, with this indemnification
to be paid solely out of the assets of the Fund. Therefore, the
shareholder's risk is limited to circumstances in which the assets of the
Fund are insufficient to meet the obligations asserted against Fund assets.

Sincerely,

/S/ Avery P. Maher

Avery P. Maher
Assistant Secretary
Member of Massachusetts Bar

CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS

We consent to the references to our firm under the captions "The Fund's
Financial Highlights" in the Class A and Class B Shares Prospectus and
"Independent Auditors" in the Class A and Class B Shares Statement of Additional
Information and to the use, in this Post-Effective Amendment Number 44 to
Registration Statement (Form N-1A No. 2-29502) dated May 1, 1995, of our reports
on the financial statements and financial highlights of the John Hancock Growth
Fund and the John Hancock Special Value Fund (the two portfolios constituting
John Hancock Capital Series) dated February 13, 1995.

/s/ Ernst & Young LLP
ERNST & YOUNG LLP

Boston, Massachusetts
April 24, 1995

JOHN HANCOCK CAPITAL SERIES --
JOHN HANCOCK GROWTH FUND

Amended and Restated Distribution Plan

Class A Shares

January 3, 1994

Article I. This Plan

This amended and restated Distribution Plan (the "Plan") sets forth the
terms and conditions on which John Hancock Capital Series (the "Trust") on
behalf of John Hancock Growth Fund (the "Fund"), a series portfolio of the
Trust, on behalf of its Class A shares, will, after the effective date hereof,
pay certain amounts to John Hancock Broker Distribution Services, Inc. ("Broker
Services") in connection with the provision by Broker Services of certain
services to the Fund and its Class A shareholders, as set forth herein. Certain
of such payments by the Fund may, under Rule 12b-1 of the Securities and
Exchange Commission, as from time to time amended (the "Rule"), under the
Investment Company Act of 1940, as amended (the "Act"), be deemed to constitute
the financing of distribution by the Fund of its shares. This Plan describes all
material aspects of such financing as contemplated by the Rule and shall be
administered and interpreted, and implemented and continued, in a manner
consistent with the Rule. The Fund and Broker Services heretofore entered into a
Distribution Agreement, dated August 1, 1991, as amended, (the "Agreement"), the
terms of which, as heretofore and from time to time continued, are incorporated
herein by reference.

Article II. Distribution and Service Expenses

The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class A shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services of the Fund or other
broker-dealers ("Selling Brokers") that have entered into an agreement with
Broker Services for the sale of Class A shares of the Fund, (b) direct
out-of-pocket expenses incurred in connection with the distribution of Class A
shares of the Fund, including expenses related to printing of prospectuses and
reports to other than existing Class A shareholders of the Fund, and
preparation, printing and distribution of sales literature and advertising
materials, and (c) an allocation of overhead and other branch office expenses of
Broker Services related to the distribution of Class A shares of the Fund.

Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish personal and shareholder account maintenance services to
Class A shareholders of the Fund.

Article III. Maximum Expenditures

The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed 0.30% of the average daily
net asset value of the Class A shares of the Fund (determined in accordance with
the Fund's prospectus as from time to time in effect) on an annual basis to
cover Distribution Expenses and Service Expenses, provided that the portion of
such fee used to cover service expenses shall not exceed an annual rate of up to
0.25% of the average daily net asset value of the Class A shares of the Fund.
Such expenditures shall be calculated and accrued daily and paid monthly or at
such other intervals as the Trustees shall determine. In the event Broker
Services is not fully reimbursed for payments made or other expenses incurred by
it under this Plan, such expenses will not be carried beyond one year from the
date such expenses were incurred. Any fees paid to Broker Services under this
Plan during any fiscal year of the Fund and not expended or allocated by Broker
Services for actual or budgeted Distribution Expenses and Service Expenses
during such fiscal year will be promptly returned to the Fund.

Article IV. Expenses Borne by the Fund

Notwithstanding any other provision of this Plan, the Fund and its
investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall bear the
respective expenses to be borne by them under the Investment Management
Contract, dated January 1, 1994, as from time to time continued and amended (the
"Management Contract"), and under the Fund's current prospectus as it is from
time to time in effect. Except as otherwise contemplated by this Plan, the Fund
shall not, directly or indirectly, engage in financing any activity which is
primarily intended to or should reasonably result in the sale of shares of the
Fund.

Article V. Approval by Trustees, etc.

This Plan shall not take effect until it has been approved, together with
any related agreements, by votes, cast in person at a meeting called for the
purpose of voting on this Plan or such agreements, of a majority (or whatever
greater percentage may, from time to time, be required by Section 12(b) of the
Act or the rules and regulations thereunder) of (a) all of the Trustees of the
Fund and (b) those Trustees of the Fund who are not "interested persons" of the
Fund, as such term may be from time to time defined under the Act, and have no
direct or indirect financial interest in the operation of this Plan or any
agreements related to it (the "Independent Trustees").

Article VI. Continuance

This Plan and any related agreements shall continue in effect for so long
as such continuance is specifically approved at least annually in advance in the
manner provided for the approval of this Plan in Article V.

Article VII. Information

Broker Services shall furnish the Fund and its Trustees quarterly, or at
such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Service Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Trustees may request.

Article VIII. Termination

This Plan may be terminated (a) at any time by vote of a majority of the
Trustees, a majority of the Independent Trustees, or a majority of the Fund's
outstanding voting Class A shares, or (b) by Broker Services on 60 days' notice
in writing to the Fund.

Article IX. Agreements

Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:

(a) That, with respect to the Fund, such agreement may be terminated at
any time, without payment of any penalty, by vote of a majority of
the Independent Trustees or by vote of a majority of the Fund's then
outstanding voting Class A shares.

(b) That such agreement shall terminate automatically in the event of
its assignment.

Article X. Amendments

This Plan may not be amended to increase the maximum amount of the fees
payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class A shares of the Fund. No material amendment to the Plan
shall, in any event, be effective unless it is approved in the same manner as is
provided for approval of this Plan in Article V.

Article XI. Limitation of Liability

The names "John Hancock Capital Series" and "John Hancock Special Value
Fund" are the designations of the Trustees under the Declaration of Trust, dated
February 28, 1992, as amended and restated from time to time. The Declaration of
Trust has been filed with the Secretary of State of the Commonwealth of
Massachusetts. The obligations of the Trust and the Fund are not personally
binding upon, nor shall resort be had to the private property of, any of the
Trustees, shareholders, officers, employees or agents of the Fund, but only the
Fund's property shall be bound. No series of the Trust shall be responsible for
the obligations of any other series of the Trust.

IN WITNESS WHEREOF, the Fund has executed this amended and restated
Distribution Plan effective as of the 3rd day of January, 1994 in Boston,
Massachusetts.

JOHN HANCOCK CAPITAL SERIES--
JOHN HANCOCK GROWTH FUND

By /s/ Robert G. Freedman
President

JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.

By /s/ C. Troy Shaver
President
d:\agrcont\plans\distrib\growcaps.doc

JOHN HANCOCK CAPITAL SERIES --
JOHN HANCOCK GROWTH FUND

Amended and Restated Distribution Plan

Class B Shares

January 3, 1994

Article I. This Plan

This amended and restated Distribution Plan (the "Plan") sets forth the
terms and conditions under which John Hancock Capital Series -- John Hancock
Growth Fund (the "Fund"), will, after the effective date hereof, pay certain
amounts to John Hancock Broker Distribution Services, Inc. ("Broker Services")
in connection with the provision by Broker Services of certain services to the
Fund and its Class B shareholders, as set forth herein. Certain of such payments
by the Fund may, under Rule 12b-1 of the Securities and Exchange Commission, as
from time to time amended (the "Rule"), under the Investment Company Act of
1940, as amended (the "Act"), be deemed to constitute the financing of
distribution by the Fund of its shares. This Plan describes all material aspects
of such financing as contemplated by the Rule and shall be administered and
interpreted, and implemented and continued, in a manner consistent with the
Rule. The Fund and Broker Services heretofore entered into a Distribution
Agreement, dated August 1, 1991 (the "Agreement"), the terms of which, as
heretofore and from time to time continued, are incorporated herein by
reference.

Article II. Distribution and Service Expenses

The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class B shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services or other broker-dealers
("Selling Brokers") that have entered into an agreement with Broker Services for
the sale of Class B shares of the Fund, (b) direct out-of pocket expenses
incurred in connection with the distribution of Class B shares of the Fund,
including expenses related to printing of prospectuses and reports to other than
existing Class B shareholders of the Fund, and preparation, printing and
distribution of sales literature and advertising materials, (c) an allocation of
overhead and other branch office expenses of Broker Services related to the
distribution of Class B shares of the Fund, and (d) interest expenses on
unreimbursed distribution expenses related to Class B shares, as described in
Article IV.

Service Expenses include payments made to, or on account of account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish personal and shareholder account maintenance services to
Class B shareholders of the Fund.

Article III. Maximum Expenditures

Article IV. Unreimbursed Distribution Expenses

In the event that Broker Services is not fully reimbursed for payments
made or expenses incurred by it as contemplated hereunder, in any fiscal year,
Broker Services shall be entitled to carry forward such expenses to subsequent
fiscal years for submission to the Class B shares of the Fund for payment,
subject always to the annual maximum expenditures set forth in Article III
hereof; provided, however, that nothing herein shall prohibit or limit the
Trustees from terminating this Plan and all payments hereunder at any time
pursuant to Article IX hereof.

Article V. Expenses Borne by the Fund

Notwithstanding any other provision of this Plan, the Trust, the Fund and
its investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall bear
the respective expenses to be borne by them under the Investment Management
Contract between them, dated January 1, 1994 as from time to time continued and
amended (the "Management Contract"), and under the Fund's current prospectus as
it is from time to time in effect. Except as otherwise contemplated by this
Plan, the Trust and the Fund shall not, directly or indirectly, engage in
financing any activity which is primarily intended to or should reasonably
result in the sale of shares of the Fund.

Article VI. Approval by Trustees, etc.

Article VII. Continuance

Article VIII. Information

Broker Services shall furnish the Fund and its Trustees quarterly, or at
such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Services Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Trustees may request.

Article IX. Termination

This Plan may be terminated (a) at any time by vote of a majority of the
Trustees, a majority of the Independent Trustees, or a majority of the Fund's
outstanding voting Class B shares, or (b) by Broker Services on 60 days' notice
in writing to the Fund.

Article X. Agreements

Each Agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:

(b) That such agreement shall terminate automatically in the event of
its assignment.

Article XI. Amendments

This Plan may not be amended to increase the maximum amount of the fees
payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class B shares of the Fund. No material amendment to the Plan
shall, in any event, be effective unless it is approved in the same manner as is
provided for approval of this Plan in Article VII.

Article XII. Limitation of Liability

The name "John Hancock Sovereign Bond Fund" is the designation of the
Trustees under the Declaration of Trust, dated February 28, 1992, as restated
and amended from time to time. The Declaration of Trust has been filed with the
Secretary of State of the Commonwealth of Massachusetts. The obligations of the
Fund are not personally binding upon, nor shall resort be had to the private
property of, any of the Trustees, shareholders, officers, employees or agents of
the Fund, but only the Fund's property shall be bound. No series of the Trust
shall be responsible for the obligations of any other series of the Trust.

IN WITNESS WHEREOF, the Fund has executed this amended and restated
Distribution Plan effective as of the third day of January, 1994 in Boston,
Massachusetts.

JOHN HANCOCK CAPITAL SERIES --
JOHN HANCOCK GROWTH FUND

By /s/ Robert G. Freedman
President

JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.

By /s/ C. Troy Shaver
President
y:\corpsec\agr_cont\plans\distrib\capsrs.doc

JOHN HANCOCK CAPITAL SERIES --
JOHN HANCOCK SPECIAL VALUE FUND

Distribution Plan

Class A Shares

October 1, 1993

Article I. This Plan

This Distribution Plan (the "Plan") sets forth the terms and conditions on
which John Hancock Capital Series (the "Trust") on behalf of John Hancock
Special Value Fund (the "Fund"), a series portfolio of the Trust, on behalf of
its Class A shares, will, after the effective date hereof, pay certain amounts
to John Hancock Broker Distribution Services, Inc. ("Broker Services") in
connection with the provision by Broker Services of certain services to the Fund
and its Class A shareholders, as set forth herein. Certain of such payments by
the Fund may, under Rule 12b-1 of the Securities and Exchange Commission, as
from time to time amended (the "Rule"), under the Investment Company Act of
1940, as amended (the "Act"), be deemed to constitute the financing of
distribution by the Fund of its shares. This Plan describes all material aspects
of such financing as contemplated by the Rule and shall be administered and
interpreted, and implemented and continued, in a manner consistent with the
Rule. The Fund and Broker Services entered into a Distribution Agreement, dated
August 1, 1991, (the "Agreement"), the terms of which, as from time to time
continued, are incorporated herein by reference.

Article II. Distribution and Service Expenses

Article III. Maximum Expenditures

Article IV. Expenses Borne by the Fund

Notwithstanding any other provision of this Plan, the Fund and its
investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall bear the
respective expenses to be borne by them under the Investment Management
Contract, dated October 1, 1993, as from time to time continued and amended (the
"Management Contract"), and under the Fund's current prospectus as it is from
time to time in effect. Except as otherwise contemplated by this Plan, the Fund
shall not, directly or indirectly, engage in financing any activity which is
primarily intended to or should reasonably result in the sale of shares of the
Fund.

Article V. Approval by Trustees, etc.

Article VI. Continuance

Article VII. Information

Article VIII. Termination

Article IX. Agreements

Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:

(b) That such agreement shall terminate automatically in the event of
its assignment.

Article X. Amendments

Article XI. Limitation of Liability

IN WITNESS WHEREOF, the Fund has executed this amended and restated
Distribution Plan effective as of the 1st day of October, 1993 in Boston,
Massachusetts.

JOHN HANCOCK CAPITAL SERIES--
JOHN HANCOCK SPECIAL VALUE FUND

By /s/ Robert G. Freedman
President

JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.

By /s/ C. Troy Shaver
President
d:\agr_cont\plans\distrib\octspecv.doc

JOHN HANCOCK CAPITAL SERIES --
JOHN HANCOCK SPECIAL VALUE FUND

Distribution Plan

Class B Shares

October 1, 1993

Article I. This Plan

This Distribution Plan (the "Plan") sets forth the terms and conditions on
which John Hancock Capital Series, on behalf of John Hancock Special Value Fund
(the "Fund"), will, after the effective date hereof, pay certain amounts to John
Hancock Broker Distribution Services, Inc. ("Broker Services") in connection
with the provision by Broker Services of certain services to the Fund and its
Class B shareholders, as set forth herein. Certain of such payments by the Fund
may, under Rule 12b-1 of the Securities and Exchange Commission, as from time to
time amended (the "Rule"), under the Investment Company Act of 1940, as amended
(the "Act"), be deemed to constitute the financing of distribution by the Fund
of its shares. This Plan describes all material aspects of such financing as
contemplated by the Rule and shall be administered and interpreted, and
implemented and continued, in a manner consistent with the Rule. The Fund and
Broker Services entered into a Distribution Agreement, dated August 1, 1991,
(the "Agreement"), the terms of which, as from time to time continued, are
incorporated herein by reference.

Article II. Distribution and Service Expenses

The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class B shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services or other broker-dealers
("Selling Brokers") that have entered into an agreement with Broker Services for
the sale of shares of the Fund, (b) direct out-of-pocket expenses incurred in
connection with the distribution of Class B shares of the Fund, including
expenses related to printing of prospectuses and reports to other than existing
Class B shareholders of the Fund, and preparation, printing and distribution of
sales literature and advertising materials, and (c) an allocation of overhead
and other branch office expenses of Broker Services related to the distribution
of Class B shares of the Fund, and (d) interest expenses on unreimbursed
distribution expenses related to Class B shares, as described in Article IV.

Article III. Maximum Expenditures

Article IV. Unreimbursed Distribution Expenses

Article V. Expenses Borne by the Fund

Notwithstanding any other provision of this Plan, the Trust, the Fund and
its investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall bear
the respective expenses to be borne by them under the Investment Management
Contract between them, dated October 1, 1993, (the "Management Contract"), and
under the Fund's current prospectus as it is from time to time in effect. Except
as otherwise contemplated by this Plan, the Fund shall not, directly or
indirectly, engage in financing any activity which is primarily intended to or
should reasonably result in the sale of shares of the Fund.

Article VI. Approval by Trustees, etc.

This Plan shall not take effect until it has been approved, together with
any related agreements, by votes, cast in person at a meeting called for the
purpose of voting on this Plan or such agreements, by votes, cast in person at a
meeting called for the purpose of voting on this Plan or such agreements, of a
majority (or whatever greater percentage may, from time to time, be required by
Section 12(b) of the Act or the rules and regulations thereunder) of (a) all of
the Trustees of the Fund and (b) those Trustees of the Fund who are not
"interested persons" of the Fund, as such term may be from time to time defined
under the Act, and have no direct or indirect financial interest in the
operation of this Plan or any agreements related to it (the "Independent
Trustees").

Article VII. Continuance

Article VIII. Information

Article IX. Termination

Article X. Agreements

Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:

(b) That such agreement shall terminate automatically in the event of
its assignment.

Article XI. Amendments

Article XII. Limitation of Liability

IN WITNESS WHEREOF, the Fund has executed this amended and restated
Distribution Plan effective as of the 1st day of October, 1993 in Boston,
Massachusetts.
JOHN HANCOCK CAPITAL SERIES--
JOHN HANCOCK SPECIAL VALUE FUND

By /s/ Robert G. Freedman
President

JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.

By /s/ C. Troy Shaver
President
d:\agr_cont\plans\distrib\specvalu.doc

JOHN HANCOCK SPECIAL VALUE FUND (CLASS A) - SEC TOTAL RETURN

Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: N/A 10 Year Value: N/A

5 Year Return: N/A 5 Year Value: N/A

3 Year Return: N/A 3 Year Value: N/A

0.99 Year Return: 7.88% 1 Year Value: $1,078.07

YTD Return: 7.81% YTD Value: $1,078.07
- --------------------------------------------------------------------------------
</TABLE>

NON ANNUALIZED RETURN SINCE INCEP - NAV N/A
NON ANNUALIZED RETURN SINCE INCEP - POP 7.81%
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1/ 2 / 94 $8.50 $8.50 0.00%

1 / 94 $8.71 $8.71 0.00%
2 / 94 $8.79 $8.79 0.00%
3 / 94 $8.49 $8.49 0.00%
4 / 94 $8.46 $8.46 0.00% 4/4 $0.0379 $8.44
5 / 94 $8.54 $8.54 0.00%
6 / 94 $8.62 $8.62 0.00%
7 / 94 $8.83 $8.83 0.00% 7/1 $0.0361 $8.63
8 / 94 $9.26 $9.26 0.00%
9 / 94 $9.29 $9.29 0.00%
10 / 94 $9.27 $9.27 0.00% 10/3 $0.0340 $9.26
11 / 94 $8.96 $8.96 0.00%
12 / 94 $8.99 $8.99 0.00% 12/23 $0.06072 $8.88

- ---------------------------------------------------------------------------------------
End of Period (update for formulas above):

8.990
- ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
10-Year 5-Year 3-Year
------- ------ ------
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1/ 2 / 94

1 / 94
2 / 94
3 / 94
4 / 94
5 / 94
6 / 94
7 / 94
8 / 94
9 / 94
10 / 94
11 / 94
12 / 94

- --------------------------------------------------------------------------------------------------------------------------------
0.000 0.000 0.000
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1-Year YTD
------ ---
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1/ 2 / 94 117.647 117.647

1 / 94 $0.0000 0.0000 117.647 $0.0000 0.000 117.647
2 / 94 $0.0000 0.0000 117.647 $0.0000 0.000 117.647
3 / 94 $0.0000 0.0000 117.647 $0.0000 0.000 117.647
4 / 94 $4.4588 0.5280 118.175 $4.4588 0.528 118.175
5 / 94 $0.0000 0.0000 118.175 $0.0000 0.000 118.175
6 / 94 $0.0000 0.0000 118.175 $0.0000 0.000 118.175
7 / 94 $4.2661 0.4940 118.669 $4.2661 0.494 118.669
8 / 94 $0.0000 0.0000 118.669 $0.0000 0.000 118.669
9 / 94 $0.0000 0.0000 118.669 $0.0000 0.000 118.669
10 / 94 $4.0347 0.4360 119.105 $4.0347 0.436 119.105
11 / 94 $0.0000 0.0000 119.105 $0.0000 0.000 119.105
12 / 94 $7.2321 0.8140 119.919 $7.2321 0.814 119.919

- -------------------------------------------------------------------------------------------
119.919 119.919
- -------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
JOHN HANCOCK SPECIAL VALUE FUND (CLASS A)-SEC TOTAL RETURN

Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- --------------------------------------------------------------- --------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: N/A 10 Year Value: N/A

5 Year Return: N/A 5 Year Value: N/A

3 Year Return: N/A 3 Year Value: N/A

0.99 Year Return: 2.41% 1 Year Value: $1,023.87

YTD Return: 2.39% YTD Value: $1,023.87
- --------------------------------------------------------------- --------------------------------------------
</TABLE>

NON ANNUALIZED RETURN SINCE INCEP - NAV N/A
NON ANNUALIZED RETURN SINCE INCEP - POP 2.39%
Constant Sales Charge: 5.00%

Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1/ 2 / 94 $8.50 $8.95 5.00%

1 / 94 $8.71 $9.17 5.00%
2 / 94 $8.79 $9.25 5.00%
3 / 94 $8.49 $8.94 5.00%
4 / 94 $8.46 $8.91 5.00% 4/4 $0.0379 $8.44
5 / 94 $8.54 $8.99 5.00%
6 / 94 $8.62 $9.07 5.00%
7 / 94 $8.83 $9.29 5.00% 7/1 $0.0361 $8.63
8 / 94 $9.26 $9.75 5.00%
9 / 94 $9.29 $9.78 5.00%
10 / 94 $9.27 $9.76 5.00% 10/3 $0.0340 $9.26
11 / 94 $8.96 $9.43 5.00%
12 / 94 $8.99 $9.46 5.00% 12/23 $0.06072 $8.88
- -------------------------------------------------------------------------------------------------------
End of Period (update for formulas above):

8.990
- -------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
10-Year 5-Year
Month ------- ------
Ended Dividend # of Shares Shares Dividend # of Shares Shares
Received Reinv. Outstanding Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

1/ 2 / 94

1 / 94
2 / 94
3 / 94
4 / 94
5 / 94
6 / 94
7 / 94
8 / 94
9 / 94
10 / 94
11 / 94
12 / 94
- --------------------------------------------------------------------------------------------------
End of Period (update for formulas above):
0.000 0.000 0.000
- --------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
3-Year
------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- --------------------------------------------------------------
<S> <C> <C> <C>
1/ 2 / 94

1 / 94
2 / 94
3 / 94
4 / 94
5 / 94
6 / 94
7 / 94
8 / 94
9 / 94
10 / 94
11 / 94
12 / 94
- --------------------------------------------------------------
End of Period (update for formulas above):

0.000 0.000 0.000
- --------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
1-Year YTD
Month ------ -----------
Ended Dividend # of Shares Shares Dividend # of Shares Shares
Received Reinv. Outstanding Received Reinv. Outstanding
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>

1/ 2 / 94 111.732 111.732

1 / 94 $0.0000 0.0000 111.732 $0.0000 0.000 111.732
2 / 94 $0.0000 0.0000 111.732 $0.0000 0.000 111.732
3 / 94 $0.0000 0.0000 111.732 $0.0000 0.000 111.732
4 / 94 $4.2346 0.5020 112.234 $4.2346 0.502 112.234
5 / 94 $0.0000 0.0000 112.234 $0.0000 0.000 112.234
6 / 94 $0.0000 0.0000 112.234 $0.0000 0.000 112.234
7 / 94 $4.0516 0.4690 112.703 $4.0516 0.469 112.703
8 / 94 $0.0000 0.0000 112.703 $0.0000 0.000 112.703
9 / 94 $0.0000 0.0000 112.703 $0.0000 0.000 112.703
10 / 94 $3.8319 0.4140 113.117 $3.8319 0.414 113.117
11 / 94 $0.0000 0.0000 113.117 $0.0000 0.000 113.117
12 / 94 $6.8685 0.7730 113.890 $6.8605 0.773 113.890
- --------------------------------------------------------------------------------------------------------
End of Period (update for formulas above):

113.890 113.890
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
JOHN HANCOCK SPECIAL VALUE FUND (CLASS B) - SEC TOTAL RETURN

Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ------------------------------------------------------ ----------------------------------------------
Average Annual Total Return Investment Value at End of Period
<S> <C>
CDSC
Excluding With Excluding % CDSC Ending
CDSC CDSC CDSC CDSC Amount Value

<S> <C> <C> <C> <C> <C> <C>
10 Year Return: N/A N/A N/A 0.00% N/A N/A

5 Year Return: N/A N/A N/A 2.00% N/A N/A

3 Year Return: N/A N/A N/A 3.00% N/A N/A

0.99 Year Return: 7.21% 2.17% $1,071.50 5.00% $50.00 $1,021.50

YTD Return: 7.15% 2.15% $1,071.50 5.00% $50.00 $1,021.50
- ------------------------------------------------------ ----------------------------------------------
</TABLE>

NON ANNUALIZED RETURN SINCE INCEP-EX CDSC 7.15%
NON ANNUALIZED RETURN SINCE INCEP-INC CDSC 2.15%

Constant Sales Charge: N/A
<TABLE>
<CAPTION>
10-Year
-----------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1 / 2 / 94 $8.50 $8.50 N/A

1 / 94 $8.71 $8.71 N/A
2 / 94 $8.78 $8.78 N/A
3 / 94 $8.48 $8.48 N/A
4 / 94 $8.46 $8.46 N/A 4/4 $0.0220 $8.44
5 / 94 $8.54 $8.54 N/A
6 / 94 $8.61 $8.61 N/A
7 / 94 $8.83 $8.83 N/A 7/1 $0.0207 $8.64
8 / 94 $9.25 $9.25 N/A
9 / 94 $9.28 $9.28 N/A
10 / 94 $9.27 $9.27 N/A 10/3 $0.0177 $9.26
11 / 94 $8.95 $8.95 N/A
12 / 94 $9.00 $9.00 N/A 12/23 $0.0444 $8.89

- -----------------------------------------------------------------------------------------------------------------------------------
End of Period (update for formulas above):

9.000 0.000
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
5-Year 3-Year 1-Year
----------- ----------- -----------
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ---------- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1 / 2 / 94 117.647
1 / 94
2 / 94 $0.0000 0.000 117.647
3 / 94 $0.0000 0.000 117.647
4 / 94 $0.0000 0.000 117.647
5 / 94 $2.5882 0.307 117.954
6 / 94 $0.0000 0.000 117.954
7 / 94 $0.0000 0.000 117.954
8 / 94 $2.4416 0.283 118.237
9 / 94 $0.0000 0.000 118.237
10 / 94 $0.0000 0.000 118.237
11 / 94 $2.0928 0.226 118.463
12 / 94 $0.0000 0.000 118.463
$5.2598 0.592 119.055
- -----------------------------------------------------------------------------------------------------------------------------------
0.000 0.000 119.055
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>

YTD

Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- --------- ---------- ---------------------------
<S> <C> <C> <C>
1 / 2 / 94 117.647

1 / 94 $0.0000 0.000 117.647
2 / 94 $0.0000 0.000 117.647
3 / 94 $0.0000 0.000 117.647
4 / 94 $2.5882 0.307 117.954
5 / 94 $0.0000 0.000 117.954
6 / 94 $0.0000 0.000 117.954
7 / 94 $2.4416 0.283 118.237
8 / 94 $0.0000 0.000 118.237
9 / 94 $0.0000 0.000 118.237
10 / 94 $2.0298 0.226 118.463
11 / 94 $0.0000 0.000 118.463
12 / 94 $5.2598 0.592 119.055
-------
119.055
-------
</TABLE>
<PAGE>
JOHN HANCOCK GROWTH FUND - CLASS A

Initial Investment: $1,000.00

<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period

<S> <C> <C> <C>
10 Year Return: 12.48% 10 Year Value: $3,241.48

5 Year Return: 7.56% 5 Year Value: $1,439.97

3 Year Return: 3.50% 3 Year Value: $1,108.85

1 Year Return: -7.50% 1 Year Value: $925.02

YTD Return: -7.50% YTD Value: $925.02
- ---------------------------------------------------------------------------------------------
</TABLE>

Constant Sales Charge: 0.00%

<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
12/24/68 $10.00 $10.00 0.00%
12 /68 $10.31 $10.31 0.00%
1 /69 $10.10 $10.10 0.00% 12/31/68 $0.1000 $9.75 $0.08 Cap Gain
2 /69 $ 9.02 $ 9.02 0.00%
3 /69 $ 9.26 $ 9.26 0.00%
4 /69 $ 9.44 $ 9.44 0.00%
5 /69 $ 9.43 $ 9.43 0.00%
6 /69 $ 8.55 $ 8.55 0.00%
7 /69 $ 7.77 $ 7.77 0.00%
8 /69 $ 8.38 $ 8.38 0.00%
9 /69 $ 8.30 $ 8.30 0.00%
10 /69 $ 8.88 $ 8.88 0.00%
11 /69 $ 8.57 $ 8.57 0.00%
12 /69 $ 8.50 $ 8.50 0.00%
1 /70 $ 7.74 $ 7.74 0.00% 01/30/70 $0.0550 $7.74
2 /70 $ 7.85 $ 7.85 0.00%
3 /70 $ 7.62 $ 7.62 0.00%
4 /70 $ 6.70 $ 6.70 0.00%
5 /70 $ 6.41 $ 6.41 0.00%
6 /70 $ 6.16 $ 6.16 0.00%
7 /70 $ 6.40 $ 6.40 0.00% 07/15/70 $0.0800 $6.32
8 /70 $ 6.68 $ 6.68 0.00%
9 /70 $ 6.96 $ 6.96 0.00%
10 /70 $ 6.89 $ 6.89 0.00%
11 /70 $ 7.21 $ 7.21 0.00%
12 /70 $ 7.54 $ 7.54 0.00%
1 /71 $ 7.60 $ 7.60 0.00% 01/15/71 $0.1100 $7.76
2 /71 $ 7.75 $ 7.75 0.00%
3 /71 $ 8.18 $ 8.18 0.00%
4 /71 $ 8.30 $ 8.30 0.00%
5 /71 $ 8.11 $ 8.11 0.00%
6 /71 $ 8.12 $ 8.12 0.00%
7 /71 $ 7.68 $ 7.68 0.00% 07/16/71 $0.0600 $7.60
8 /71 $ 8.01 $ 8.01 0.00%
9 /71 $ 7.93 $ 7.93 0.00%
10 /71 $ 7.65 $ 7.65 0.00%
11 /71 $ 7.68 $ 7.68 0.00%
12 /71 $ 8.37 $ 8.37 0.00%
1 /72 $ 8.46 $ 8.46 0.00% 01/21/72 $0.0600 $8.55
2 /72 $ 8.80 $ 8.80 0.00%
3 /72 $ 8.87 $ 8.87 0.00%
4 /72 $ 9.02 $ 9.02 0.00%
5 /72 $ 9.15 $ 9.15 0.00%
6 /72 $ 8.96 $ 8.96 0.00%
7 /72 $ 8.89 $ 8.89 0.00% 07/21/72 $0.0350 $9.16
8 /72 $ 9.10 $ 9.10 0.00%
9 /72 $ 9.04 $ 9.04 0.00%
10 /72 $ 9.04 $ 9.04 0.00%
11 /72 $ 9.46 $ 9.46 0.00%
12 /72 $ 9.52 $ 9.52 0.00%
1 /73 $ 9.01 $ 9.01 0.00% 01/26/73 $0.0350 $8.91
2 /73 $ 8.50 $ 8.50 0.00%
3 /73 $ 8.29 $ 8.29 0.00%
4 /73 $ 7.62 $ 7.62 0.00%
5 /73 $ 7.60 $ 7.60 0.00%

</TABLE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------
10-Year 5-Year 3-Year
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv.
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
12/24/68
12 /68
1 /69
2 /69
3 /69
4 /69
5 /69
6 /69
7 /69
8 /69
9 /69
10 /69
11 /69
12 /69
1 /70
2 /70
3 /70
4 /70
5 /70
6 /70
7 /70
8 /70
9 /70
10 /70
11 /70
12 /70
1 /71
2 /71
3 /71
4 /71
5 /71
6 /71
7 /71
8 /71
9 /71
10 /71
11 /71
12 /71
1 /72
2 /72
3 /72
4 /72
5 /72
6 /72
7 /72
8 /72
9 /72
10 /72
11 /72
12 /72
1 /73
2 /73
3 /73
4 /73
5 /73
</TABLE>

<TABLE>
<CAPTION>
----------------------------------------------------
1-Year
Month Shares Dividend # of Shares Shares
Ended Outstanding Received Reinv. Outstanding
- ----------------------------------------------------------------
<S> <C>
12/24/68
12 /68
1 /69
2 /69
3 /69
4 /69
5 /69
6 /69
7 /69
8 /69
9 /69
10 /69
11 /69
12 /69
1 /70
2 /70
3 /70
4 /70
5 /70
6 /70
7 /70
8 /70
9 /70
10 /70
11 /70
12 /70
1 /71
2 /71
3 /71
4 /71
5 /71
6 /71
7 /71
8 /71
9 /71
10 /71
11 /71
12 /71
1 /72
2 /72
3 /72
4 /72
5 /72
6 /72
7 /72
8 /72
9 /72
10 /72
11 /72
12 /72
1 /73
2 /73
3 /73
4 /73
5 /73
</TABLE>

<PAGE>
JOHN HANCOCK GROWTH FUND (CLASS A) - SEC TOTAL RETURN

<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
6 /73 $7.63 $7.63 0.00%
7 /73 $8.02 $8.02 0.00% 07/20/73 $0.0350 $7.94
8 /73 $7.86 $7.86 0.00%
9 /73 $8.17 $8.17 0.00%
10 /73 $8.18 $8.18 0.00%
11 /73 $7.13 $7.13 0.00%
12 /73 $7.17 $7.17 0.00%
1 /74 $6.90 $6.90 0.00% 01/25/74 $0.0600 $6.62
2 /74 $6.87 $6.87 0.00%
3 /74 $6.68 $6.68 0.00%
4 /74 $6.36 $6.36 0.00%
5 /74 $6.17 $6.17 0.00%
6 /74 $5.91 $5.91 0.00%
7 /74 $5.24 $5.24 0.00% 07/19/74 $0.0400 $5.18
8 /74 $4.75 $4.75 0.00%
9 /74 $4.14 $4.14 0.00%
10 /74 $5.00 $5.00 0.00%
11 /74 $4.77 $4.77 0.00%
12 /74 $4.60 $4.60 0.00%
1 /75 $4.88 $4.88 0.00% 01/24/75 $0.0800 $5.09
2 /75 $5.37 $5.37 0.00%
3 /75 $5.50 $5.50 0.00%
4 /75 $5.86 $5.86 0.00%
5 /75 $6.13 $6.13 0.00%
6 /75 $6.39 $6.39 0.00%
7 /75 $5.81 $5.81 0.00% 07/25/75 $0.0400 $5.61
8 /75 $5.64 $5.64 0.00%
9 /75 $5.36 $5.36 0.00%
10 /75 $5.67 $5.67 0.00%
11 /75 $5.80 $5.80 0.00%
12 /75 $5.68 $5.68 0.00%
1 /76 $6.34 $6.34 0.00% 01/23/76 $0.0300 $6.31
2 /76 $6.25 $6.25 0.00%
3 /76 $6.42 $6.42 0.00%
4 /76 $6.32 $6.32 0.00%
5 /76 $6.22 $6.22 0.00%
6 /76 $6.43 $6.43 0.00%
7 /76 $6.32 $6.32 0.00% 07/23/76 $0.0300 $6.31
8 /76 $6.21 $6.21 0.00%
9 /76 $6.36 $6.36 0.00%
10 /76 $6.13 $6.13 0.00%
11 /76 $6.08 $6.08 0.00%
12 /76 $6.33 $6.33 0.00%
1 /77 $5.78 $5.78 0.00% 01/21/77 $0.0400 $5.76
2 /77 $5.62 $5.62 0.00%
3 /77 $5.53 $5.53 0.00%
4 /77 $5.59 $5.59 0.00%
5 /77 $5.45 $5.45 0.00%
6 /77 $5.69 $5.69 0.00%
7 /77 $5.49 $5.49 0.00% 07/22/77 $0.0500 $5.49
8 /77 $5.40 $5.40 0.00%
9 /77 $5.34 $5.34 0.00%
10 /77 $5.14 $5.14 0.00%
11 /77 $5.37 $5.37 0.00%
12 /77 $5.38 $5.38 0.00%
1 /78 $4.91 $4.91 0.00% 01/20/78 $0.0750 $4.95
2 /78 $4.77 $4.77 0.00%
3 /78 $4.96 $4.96 0.00%
4 /78 $5.55 $5.55 0.00%
5 /78 $5.80 $5.80 0.00%
6 /78 $5.77 $5.77 0.00%
7 /78 $6.25 $6.25 0.00% 07/21/78 $0.0500 $6.55
8 /78 $6.45 $6.45 0.00%
9 /78 $6.33 $6.33 0.00%
10 /78 $5.57 $5.57 0.00%
11 /78 $5.88 $5.88 0.00%
12 /78 $6.09 $6.09 0.00%
1 /79 $6.23 $6.23 0.00% 01/19/79 $0.0500 $6.19
2 /79 $5.87 $5.87 0.00%
3 /79 $6.37 $6.37 0.00%
4 /79 $6.39 $6.39 0.00%
5 /79 $6.30 $6.30 0.00%
6 /79 $6.64 $6.64 0.00%
7 /79 $6.77 $6.77 0.00% 07/20/79 $0.0475 $6.88
8 /79 $7.43 $7.43 0.00%
9 /79 $7.43 $7.43 0.00%

<CAPTION>
----------------------------------------------------
1-Year
Month Shares Dividend # of Shares Shares
Ended Outstanding Received Reinv. Outstanding
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
6 /73
7 /73
8 /73
9 /73
10 /73
11 /73
12 /73
1 /74
2 /74
3 /74
4 /74
5 /74
6 /74
7 /74
8 /74
9 /74
10 /74
11 /74
12 /74
1 /75
2 /75
3 /75
4 /75
5 /75
6 /75
7 /75
8 /75
9 /75
10 /75
11 /75
12 /75
1 /76
2 /76
3 /76
4 /76
5 /76
6 /76
7 /76
8 /76
9 /76
10 /76
11 /76
12 /76
1 /77
2 /77
3 /77
4 /77
5 /77
6 /77
7 /77
8 /77
9 /77
10 /77
11 /77
12 /77
1 /78
2 /78
3 /78
4 /78
5 /78
6 /78
7 /78
8 /78
9 /78
10 /78
11 /78
12 /78
1 /79
2 /79
3 /79
4 /79
5 /79
6 /79
7 /79
8 /79
9 /79
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
10 /79 $ 6.98 $ 6.98 0.00%
11 /79 $ 7.59 $ 7.59 0.00%
12 /79 $ 8.04 $ 8.04 0.00%
1 /80 $ 8.81 $ 8.81 0.00% 01/18/80 $0.0550 $8.83
2 /80 $ 8.64 $ 8.64 0.00%
3 /80 $ 7.61 $ 7.61 0.00%
4 /80 $ 7.78 $ 7.78 0.00%
5 /80 $ 8.18 $ 8.18 0.00%
6 /80 $ 8.55 $ 8.55 0.00%
7 /80 $ 9.79 $ 9.79 0.00% 07/18/80 $0.0425 $9.73
8 /80 $10.19 $10.19 0.00%
9 /80 $10.80 $10.80 0.00%
10 /80 $11.07 $11.07 0.00%
11 /80 $13.12 $13.12 0.00%
12 /80 $12.59 $12.59 0.00%
1 /81 $11.15 $11.15 0.00% 01/23/81 $0.0475 $11.36
2 /81 $11.28 $11.28 0.00%
3 /81 $11.81 $11.81 0.00%
4 /81 $11.57 $11.57 0.00%
5 /81 $11.84 $11.84 0.00%
6 /81 $11.10 $11.10 0.00%
7 /81 $11.22 $11.22 0.00% 07/24/81 $0.0800 $11.44
8 /81 $10.32 $10.32 0.00%
9 /81 $ 9.58 $ 9.58 0.00%
10 /81 $10.55 $10.55 0.00%
11 /81 $10.73 $10.73 0.00%
12 /81 $10.32 $10.32 0.00%
1 /82 $10.09 $10.09 0.00% 01/22/82 $0.0850 $9.70
2 /82 $ 9.15 $ 9.15 0.00%
3 /82 $ 8.93 $ 8.93 0.00%
4 /82 $ 9.53 $ 9.53 0.00%
5 /82 $ 9.02 $ 9.02 0.00%
6 /82 $ 8.71 $ 8.71 0.00%
7 /82 $ 8.58 $ 8.58 0.00% 07/23/82 $0.1000 $8.22
8 /82 $ 9.76 $ 9.76 0.00%
9 /82 $ 9.89 $ 9.89 0.00%
10 /82 $11.55 $11.55 0.00%
11 /82 $12.53 $12.53 0.00%
12 /82 $12.27 $12.27 0.00%
1 /83 $12.38 $12.38 0.00% 01/21/83 $0.6115 $12.39 $0.5315 Capital Gain
2 /83 $12.92 $12.92 0.00%
3 /83 $13.29 $13.29 0.00%
4 /83 $13.68 $13.68 0.00%
5 /83 $13.72 $13.72 0.00%
6 /83 $14.31 $14.31 0.00%
7 /83 $13.59 $13.59 0.00% 07/22/83 $0.0900 $13.39
8 /83 $13.44 $13.44 0.00%
9 /83 $13.70 $13.70 0.00%
10 /83 $13.28 $13.28 0.00%
11 /83 $13.75 $13.75 0.00%
12 /83 $13.48 $13.48 0.00%
1 /84 $11.97 $11.97 0.00% 01/20/84 $0.9365 $11.72 $0.8290 Capital Gain
2 /84 $11.34 $11.34 0.00%
3 /84 $11.52 $11.52 0.00%
4 /84 $11.54 $11.54 0.00%
5 /84 $10.96 $10.96 0.00%
6 /84 $11.52 $11.52 0.00%
7 /84 $11.22 $11.22 0.00% 07/20/84 $0.1200 $12.28
8 /84 $12.48 $12.48 0.00%
9 /84 $11.97 $11.97 0.00%
10 /84 $12.14 $12.14 0.00%
11 /84 $11.76 $11.76 0.00%
12 /84 $12.13 $12.13 0.00%
1 /85 $12.66 $12.66 0.00% 01/25/85 $0.8242 $13.09 $0.7142 Capital Gain
2 /85 $12.94 $12.94 0.00%
3 /85 $12.37 $12.37 0.00%
4 /85 $12.23 $12.23 0.00%
5 /85 $12.88 $12.88 0.00%
6 /85 $13.10 $13.10 0.00%
7 /85 $13.22 $13.22 0.00% 07/03/85 $0.1000 $13.03
8 /85 $12.93 $12.93 0.00%
9 /85 $12.25 $12.25 0.00%
10 /85 $12.78 $12.78 0.00%
11 /85 $13.91 $13.91 0.00%
12 /85 $14.50 $14.50 0.00%
1 /86 $13.92 $13.92 0.00% 01/06/86 $0.8765 $13.36 $0.7715 Capital Gain

<CAPTION>
------------------------------------------------------------------------------
10-Year 5-Year
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C>
10 /79
11 /79
12 /79
1 /80
2 /80
3 /80
4 /80
5 /80
6 /80
7 /80
8 /80
9 /80
10 /80
11 /80
12 /80
1 /81
2 /81
3 /81
4 /81
5 /81
6 /81
7 /81
8 /81
9 /81
10 /81
11 /81
12 /81
1 /82
2 /82
3 /82
4 /82
5 /82
6 /82
7 /82
8 /82
9 /82
10 /82
11 /82
12 /82
1 /83
2 /83
3 /83
4 /83
5 /83
6 /83
7 /83
8 /83
9 /83
10 /83
11 /83
12 /83
1 /84
2 /84
3 /84
4 /84
5 /84
6 /84
7 /84
8 /84
9 /84
10 /84
11 /84
12 /84
1 /85
2 /85 77.280
3 /85 $ 0.0000 0.000 77.280
4 /85 $ 0.0000 0.000 77.280
5 /85 $ 0.0000 0.000 77.280
6 /85 $ 0.0000 0.000 77.280
7 /85 $ 7.7280 0.593 77.873
8 /85 $ 0.0000 0.000 77.873
9 /85 $ 0.0000 0.000 77.873
10 /85 $ 0.0000 0.000 77.873
11 /85 $ 0.0000 0.000 77.873
12 /85 $ 0.0000 0.000 77.873
1 /86 $68.2557 5.109 82.982

<CAPTION>
---------------------------------------------------------------------------------
3-Year 1-Year
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------
<S> <C>
10 /79
11 /79
12 /79
1 /80
2 /80
3 /80
4 /80
5 /80
6 /80
7 /80
8 /80
9 /80
10 /80
11 /80
12 /80
1 /81
2 /81
3 /81
4 /81
5 /81
6 /81
7 /81
8 /81
9 /81
10 /81
11 /81
12 /81
1 /82
2 /82
3 /82
4 /82
5 /82
6 /82
7 /82
8 /82
9 /82
10 /82
11 /82
12 /82
1 /83
2 /83
3 /83
4 /83
5 /83
6 /83
7 /83
8 /83
9 /83
10 /83
11 /83
12 /83
1 /84
2 /84
3 /84
4 /84
5 /84
6 /84
7 /84
8 /84
9 /84
10 /84
11 /84
12 /84
1 /85
2 /85
3 /85
4 /85
5 /85
6 /85
7 /85
8 /85
9 /85
10 /85
11 /85
12 /85
1 /86
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
2 /86 $15.07 $15.07 0.00%
3 /86 $15.99 $15.99 0.00%
4 /86 $16.27 $16.27 0.00%
5 /86 $17.23 $17.23 0.00%
6 /86 $17.91 $17.91 0.00%
7 /86 $16.23 $16.23 0.00% 07/03/86 $0.0625 $16.97
8 /86 $16.66 $16.66 0.00%
9 /86 $15.05 $15.05 0.00%
10 /86 $15.81 $15.81 0.00%
11 /86 $15.97 $15.97 0.00%
12 /86 $14.03 $14.03 0.00% 12/15/86 $1.4275 $14.28 $1.4275 Capital Gain
1 /87 $15.42 $15.42 0.00% 01/06/87 $0.2686 $15.36 $0.2229 Capital Gain
2 /87 $16.70 $16.70 0.00% 02/06/87 $0.0443 $16.44 $0.0443 Capital Gain
3 /87 $16.94 $16.94 0.00%
4 /87 $16.60 $16.60 0.00%
5 /87 $16.97 $16.97 0.00%
6 /87 $17.36 $17.36 0.00%
7 /87 $17.83 $17.83 0.00% 07/06/87 $0.0900 $17.63
8 /87 $18.70 $18.70 0.00%
9 /87 $18.27 $18.27 0.00%
10 /87 $14.26 $14.26 0.00%
11 /87 $13.24 $13.24 0.00%
12 /87 $12.34 $12.34 0.00% 12/30/87 $2.1475 $12.23 $2.0075 Capital Gain
1 /88 $12.41 $12.41 0.00%
2 /88 $13.26 $13.26 0.00%
3 /88 $13.13 $13.13 0.00%
4 /88 $13.19 $13.19 0.00%
5 /88 $12.92 $12.92 0.00%
6 /88 $13.79 $13.79 0.00%
7 /88 $13.37 $13.37 0.00% 07/01/88 $0.1000 $13.56
8 /88 $12.92 $12.92 0.00%
9 /88 $13.42 $13.42 0.00%
10 /88 $13.57 $13.57 0.00%
11 /88 $13.15 $13.15 0.00%
12 /88 $13.33 $13.33 0.00% 12/29/88 $0.2975 $13.45 $0.1675 Capital Gain
1 /89 $14.20 $14.20 0.00%
2 /89 $13.94 $13.94 0.00%
3 /89 $14.35 $14.35 0.00%
4 /89 $15.11 $15.11 0.00%
5 /89 $15.89 $15.89 0.00%
6 /89 $15.87 $15.87 0.00%
7 /89 $17.01 $17.01 0.00% 07/05/89 $0.1000 $16.13
8 /89 $17.22 $17.22 0.00%
9 /89 $17.43 $17.43 0.00%
10 /89 $17.01 $17.01 0.00%
11 /89 $17.29 $17.29 0.00%
12 /89 $15.18 $15.18 0.00% 12/29/89 $2.1425 $14.99 $1.9550 Capital Gain
1 /90 $13.87 $13.87 0.00%
2 /90 $13.94 $13.94 0.00%
3 /90 $14.35 $14.35 0.00%
4 /90 $14.17 $14.17 0.00%
5 /90 $15.87 $15.87 0.00%
6 /90 $15.95 $15.95 0.00%
7 /90 $15.45 $15.45 0.00%
8 /90 $13.84 $13.84 0.00%
9 /90 $12.96 $12.96 0.00%
10 /90 $12.54 $12.54 0.00%
11 /90 $13.54 $13.54 0.00%
12 /90 $12.93 $12.93 0.00% 12/31/90 $0.9408 $12.36 $0.7808 Capital Gain
1 /91 $13.59 $13.59 0.00%
2 /91 $14.57 $14.57 0.00%
3 /91 $15.40 $15.40 0.00%
4 /91 $15.04 $15.04 0.00%
5 /91 $15.93 $15.93 0.00%
6 /91 $14.97 $14.97 0.00%
7 /91 $15.85 $15.85 0.00%
8 /91 $16.51 $16.51 0.00%
9 /91 $16.48 $16.48 0.00%
10 /91 $16.85 $16.85 0.00%
11 /91 $16.36 $16.36 0.00%
12 /91 $17.48 $17.48 0.00% 12/31/91 $0.85004 $17.72 $0.8072 Capital Gain
1 /92 $17.19 $17.19 0.00%
2 /92 $17.02 $17.02 0.00%
3 /92 $16.21 $16.21 0.00%
4 /92 $15.77 $15.77 0.00%
5 /92 $15.95 $15.95 0.00%

<CAPTION>
--------------------------------------------------------------------------------------------------------
10-Year 5-Year 3-Year
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv.
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
2 /86 $0.0000 0.000 82.982
3 /86 $0.0000 0.000 82.982
4 /86 $0.0000 0.000 82.982
5 /86 $0.0000 0.000 82.982
6 /86 $0.0000 0.000 82.982
7 /86 $5.1864 0.306 83.288
8 /86 $0.0000 0.000 83.288
9 /86 $0.0000 0.000 83.288
10 /86 $0.0000 0.000 83.288
11 /86 $0.0000 0.000 83.288
12 /86 $118.8936 8.326 91.614
1 /87 $24.6075 1.602 93.216
2 /87 $4.1295 0.251 93.467
3 /87 $0.0000 0.000 93.467
4 /87 $0.0000 0.000 93.467
5 /87 $0.0000 0.000 93.467
6 /87 $0.0000 0.000 93.467
7 /87 $8.4120 0.477 93.944
8 /87 $0.0000 0.000 93.944
9 /87 $0.0000 0.000 93.944
10 /87 $0.0000 0.000 93.944
11 /87 $0.0000 0.000 93.944
12 /87 $201.7447 16.496 110.440
1 /88 $0.0000 0.000 110.440
2 /88 $0.0000 0.000 110.440
3 /88 $0.0000 0.000 110.440
4 /88 $0.0000 0.000 110.440
5 /88 $0.0000 0.000 110.440
6 /88 $0.0000 0.000 110.440
7 /88 $11.0440 0.814 111.254
8 /88 $0.0000 0.000 111.254
9 /88 $0.0000 0.000 111.254
10 /88 $0.0000 0.000 111.254
11 /88 $0.0000 0.000 111.254
12 /88 $33.0981 2.461 113.715
1 /89 $0.0000 0.000 113.715
2 /89 $0.0000 0.000 113.715
3 /89 $0.0000 0.000 113.715
4 /89 $0.0000 0.000 113.715
5 /89 $0.0000 0.000 113.715
6 /89 $0.0000 0.000 113.715
7 /89 $11.3715 0.705 114.420
8 /89 $0.0000 0.000 114.420
9 /89 $0.0000 0.000 114.420
10 /89 $0.0000 0.000 114.420
11 /89 $0.0000 0.000 114.420
12 /89 $245.1449 16.354 130.774
1 /90 $0.0000 0.000 130.774
2 /90 $0.0000 0.000 130.774 71.736
3 /90 $0.0000 0.000 130.774 $0.0000 0.000 71.736
4 /90 $0.0000 0.000 130.774 $0.0000 0.000 71.736
5 /90 $0.0000 0.000 130.774 $0.0000 0.000 71.736
6 /90 $0.0000 0.000 130.774 $0.0000 0.000 71.736
7 /90 $0.0000 0.000 130.774 $0.0000 0.000 71.736
8 /90 $0.0000 0.000 130.774 $0.0000 0.000 71.736
9 /90 $0.0000 0.000 130.774 $0.0000 0.000 71.736
10 /90 $0.0000 0.000 130.774 $0.0000 0.000 71.736
11 /90 $0.0000 0.000 130.774 $0.0000 0.000 71.736
12 /90 $123.0322 9.954 140.728 $67.4892 5.460 77.196
1 /91 $0.0000 0.000 140.728 $0.0000 0.000 77.196
2 /91 $0.0000 0.000 140.728 $0.0000 0.000 77.196
3 /91 $0.0000 0.000 140.728 $0.0000 0.000 77.196
4 /91 $0.0000 0.000 140.728 $0.0000 0.000 77.196
5 /91 $0.0000 0.000 140.728 $0.0000 0.000 77.196
6 /91 $0.0000 0.000 140.728 $0.0000 0.000 77.196
7 /91 $0.0000 0.000 140.728 $0.0000 0.000 77.196
8 /91 $0.0000 0.000 140.728 $0.0000 0.000 77.196
9 /91 $0.0000 0.000 140.728 $0.0000 0.000 77.196
10 /91 $0.0000 0.000 140.728 $0.0000 0.000 77.196
11 /91 $0.0000 0.000 140.728 $0.0000 0.000 77.196
12 /91 $119.6244 6.751 147.479 $65.6197 3.703 80.899
1 /92 $0.0000 0.000 147.479 $0.0000 0.000 80.899
2 /92 $0.0000 0.000 147.479 $0.0000 0.000 80.899
3 /92 $0.0000 0.000 147.479 $0.0000 0.000 80.899 $0.0000 0.000
4 /92 $0.0000 0.000 147.479 $0.0000 0.000 80.899 $0.0000 0.000
5 /92 $0.0000 0.000 147.479 $0.0000 0.000 80.899 $0.0000 0.000

<CAPTION>
----------------------------------------------------
1-Year
Month Shares Dividend # of Shares Shares
Ended Outstanding Received Reinv. Outstanding
- ----------------------------------------------------------------
<S> <C> <C> <C> <C>
2 /86
3 /86
4 /86
5 /86
6 /86
7 /86
8 /86
9 /86
10 /86
11 /86
12 /86
1 /87
2 /87
3 /87
4 /87
5 /87
6 /87
7 /87
8 /87
9 /87
10 /87
11 /87
12 /87
1 /88
2 /88
3 /88
4 /88
5 /88
6 /88
7 /88
8 /88
9 /88
10 /88
11 /88
12 /88
1 /89
2 /89
3 /89
4 /89
5 /89
6 /89
7 /89
8 /89
9 /89
10 /89
11 /89
12 /89
1 /90
2 /90
3 /90
4 /90
5 /90
6 /90
7 /90
8 /90
9 /90
10 /90
11 /90
12 /90
1 /91
2 /91
3 /91
4 /91
5 /91
6 /91
7 /91
8 /91
9 /91
10 /91
11 /91
12 /91
1 /92
2 /92 58.754
3 /92 58.754
4 /92 58.754
5 /92 58.754
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>

6 /92 $15.49 $15.49 0.00%
7 /92 $16.07 $16.07 0.00%
8 /92 $15.90 $15.90 0.00%
9 /92 $16.37 $16.37 0.00%
10 /92 $16.90 $16.90 0.00%
11 /92 $18.15 $18.15 0.00%
12 /92 $17.32 $17.32 0.00% 12/23/92 $1.20287 $17.09 $1.20287 Capital Gain
1 /93 $17.87 $17.87 0.00%
2 /93 $16.87 $16.87 0.00%
3 /93 $17.48 $17.48 0.00%
4 /93 $16.73 $16.73 0.00%
5 /93 $17.80 $17.80 0.00%
6 /93 $17.87 $17.87 0.00%
7 /93 $18.01 $18.01 0.00%
8 /93 $18.92 $18.92 0.00%
9 /93 $19.26 $19.26 0.00%
10 /93 $19.70 $19.70 0.00%
11 /93 $18.97 $18.97 0.00%
12 /93 $17.40 $17.40 0.00% 12/23/93 $2.13757 $17.09 $2.13757 Capital Gain
1 /94 $17.37 $17.37 0.00%
2 /94 $17.03 $17.03 0.00%
3 /94 $16.06 $16.06 0.00%
4 /94 $15.85 $15.85 0.00% 04/04/94 $0.02458 $15.78 $0.02458 Capital Gain
5 /94 $15.69 $15.69 0.00%
6 /94 $14.78 $14.78 0.00%
7 /94 $15.22 $15.22 0.00%
8 /94 $16.18 $16.18 0.00%
9 /94 $15.94 $15.94 0.00%
10 /94 $16.36 $16.36 0.00%
11 /94 $15.90 $15.90 0.00%
12 /94 $15.89 $15.89 0.00% 12/23/94 $0.17744 $15.65 $0.17744 Capital Gain

<CAPTION>
- -----------------------------------------------------------------------------------------
10-Year 5-Year
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6 /92 $0.0000 0.000 147.479 $0.0000 0.000 80.899
7 /92 $0.0000 0.000 147.479 $0.0000 0.000 80.899
8 /92 $0.0000 0.000 147.479 $0.0000 0.000 80.899
9 /92 $0.0000 0.000 147.479 $0.0000 0.000 80.899
10 /92 $0.0000 0.000 147.479 $0.0000 0.000 80.899
11 /92 $0.0000 0.000 147.479 $0.0000 0.000 80.899
12 /92 $177.3981 10.380 157.859 $97.3110 5.694 86.593
1 /93 $0.0000 0.000 157.859 $0.0000 0.000 86.593
2 /93 $0.0000 0.000 157.859 $0.0000 0.000 86.593
3 /93 $0.0000 0.000 157.859 $0.0000 0.000 86.593
4 /93 $0.0000 0.000 157.859 $0.0000 0.000 86.593
5 /93 $0.0000 0.000 157.859 $0.0000 0.000 86.593
6 /93 $0.0000 0.000 157.859 $0.0000 0.000 86.593
7 /93 $0.0000 0.000 157.859 $0.0000 0.000 86.593
8 /93 $0.0000 0.000 157.859 $0.0000 0.000 86.593
9 /93 $0.0000 0.000 157.859 $0.0000 0.000 86.593
10 /93 $0.0000 0.000 157.859 $0.0000 0.000 86.593
11 /93 $0.0000 0.000 157.859 $0.0000 0.000 86.593
12 /93 $337.4347 19.745 177.604 $185.0986 10.831 97.424
1 /94 $0.0000 0.000 177.604 $0.0000 0.000 97.424
2 /94 $0.0000 0.000 177.604 $0.0000 0.000 97.424
3 /94 $0.0000 0.000 177.604 $0.0000 0.000 97.424
4 /94 $4.3655 0.277 177.881 $2.3947 0.152 97.576
5 /94 $0.0000 0.000 177.881 $0.0000 0.000 97.576
6 /94 $0.0000 0.000 177.881 $0.0000 0.000 97.576
7 /94 $0.0000 0.000 177.881 $0.0000 0.000 97.576
8 /94 $0.0000 0.000 177.881 $0.0000 0.000 97.576
9 /94 $0.0000 0.000 177.881 $0.0000 0.000 97.576
10 /94 $0.0000 0.000 177.881 $0.0000 0.000 97.576
11 /94 $0.0000 0.000 177.881 $0.0000 0.000 97.576
12 /94 $31.5632 2.107 179.898 $17.3139 1.106 98.682

<CAPTION>
- ---------------------------------------------------------------------------------------------
3-Year 1-Year
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
6 /92 $0.0000 0.000 58.754
7 /92 $0.0000 0.000 58.754
8 /92 $0.0000 0.000 58.754
9 /92 $0.0000 0.000 58.754
10 /92 $0.0000 0.000 58.754
11 /92 $0.0000 0.000 58.754
12 /92 $70.6734 4.135 62.889
1 /93 $0.0000 0.000 62.889
2 /93 $0.0000 0.000 62.889
3 /93 $0.0000 0.000 62.889
4 /93 $0.0000 0.000 62.889
5 /93 $0.0000 0.000 62.889
6 /93 $0.0000 0.000 62.889
7 /93 $0.0000 0.000 62.889
8 /93 $0.0000 0.000 62.889
9 /93 $0.0000 0.000 62.889
10 /93 $0.0000 0.000 62.889
11 /93 $0.0000 0.000 62.889
12 /93 $134.4296 7.866 70.755
1 /94 $0.0000 0.000 70.755
2 /94 $0.0000 0.000 70.755 58.720
3 /94 $0.0000 0.000 70.755 $0.0000 0.000 58.720
4 /94 $1.7392 0.110 70.865 $1.4433 0.091 58.811
5 /94 $0.0000 0.000 70.865 $0.0000 0.000 58.811
6 /94 $0.0000 0.000 70.865 $0.0000 0.000 58.811
7 /94 $0.0000 0.000 70.865 $0.0000 0.000 58.811
8 /94 $0.0000 0.000 70.865 $0.0000 0.000 58.811
9 /94 $0.0000 0.000 70.865 $0.0000 0.000 58.811
10 /94 $0.0000 0.000 70.865 $0.0000 0.000 58.811
11 /94 $0.0000 0.000 70.865 $0.0000 0.000 58.811
12 /94 $12.5743 0.803 71.668 $10.4354 0.667 59.478
</TABLE>
<PAGE>
JOHN HANCOCK GROWTH FUND - CLASS A

Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
Average Annual Total Return Rate Investment Value at End of Period

<S> <C> <C> <C>
10 Year Return: 11.90% 10 Year Value: $3,079.02

5 Year Return: 6.47% 5 Year Value: $1,367.86

3 Year Return: 1.75% 3 Year Value: $1,053.41

1 Year Return: -12.14% 1 Year Value: $878.56

YTD Return: -12.14% YTD Value: $878.56
- --------------------------------------------------------------------------------------

Constant Sales Charge: 5.00%
</TABLE>

<TABLE>
<CAPTION>
------------------------------------
10-Year
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
12/24 / 68 $10.00 $10.53 5.00%
12 / 68 $10.31 $10.85 5.00%
1 / 69 $10.10 $10.63 5.00% 12/31/68 $0.1000 $9.75 $0.08 Cap Gain
2 / 69 $9.02 $9.49 5.00%
3 / 69 $9.26 $9.75 5.00%
4 / 69 $9.44 $9.94 5.00%
5 / 69 $9.43 $9.93 5.00%
6 / 69 $8.55 $9.00 5.00%
7 / 69 $7.77 $8.18 5.00%
8 / 69 $8.38 $8.82 5.00%
9 / 69 $8.30 $8.74 5.00%
10 / 69 $8.88 $9.35 5.00%
11 / 69 $8.57 $9.02 5.00%
12 / 69 $8.50 $8.95 5.00%
1 / 70 $7.74 $8.15 5.00% 01/30/70 $0.0550 $7.74
2 / 70 $7.85 $8.26 5.00%
3 / 70 $7.62 $8.02 5.00%
4 / 70 $6.70 $7.05 5.00%
5 / 70 $6.41 $6.75 5.00%
6 / 70 $6.16 $6.48 5.00%
7 / 70 $6.40 $6.74 5.00% 07/15/70 $0.0800 $6.32
8 / 70 $6.68 $7.03 5.00%
9 / 70 $6.96 $7.33 5.00%
10 / 70 $6.89 $7.25 5.00%
11 / 70 $7.21 $7.59 5.00%
12 / 70 $7.54 $7.94 5.00%
1 / 71 $7.60 $8.00 5.00% 01/15/71 $0.1100 $7.76
2 / 71 $7.75 $8.16 5.00%
3 / 71 $8.18 $8.61 5.00%
4 / 71 $8.30 $8.74 5.00%
5 / 71 $8.11 $8.54 5.00%
6 / 71 $8.12 $8.55 5.00%
7 / 71 $7.68 $8.08 5.00% 07/16/71 $0.0600 $7.60
8 / 71 $8.01 $8.43 5.00%
9 / 71 $7.93 $8.35 5.00%
10 / 71 $7.65 $8.05 5.00%
11 / 71 $7.68 $8.08 5.00%
12 / 71 $8.37 $8.81 5.00%
1 / 72 $8.46 $8.91 5.00% 01/21/72 $0.0600 $8.55
2 / 72 $8.80 $9.26 5.00%
3 / 72 $8.87 $9.34 5.00%
4 / 72 $9.02 $9.49 5.00%
5 / 72 $9.15 $9.63 5.00%
6 / 72 $8.96 $9.43 5.00%
7 / 72 $8.89 $9.36 5.00% 07/21/72 $0.0350 $9.16
8 / 72 $9.10 $9.58 5.00%
9 / 72 $9.04 $9.52 5.00%
10 / 72 $9.04 $9.52 5.00%
11 / 72 $9.46 $9.96 5.00%
12 / 72 $9.52 $10.02 5.00%
1 / 73 $9.01 $9.48 5.00% 01/26/73 $0.0350 $8.91
2 / 73 $8.50 $8.95 5.00%
3 / 73 $8.29 $8.73 5.00%
4 / 73 $7.62 $8.02 5.00%
5 / 73 $7.60 $8.00 5.00%

<CAPTION>
------------------------------------------------------------------------------------------------------------
5-Year 3-Year 1-Year
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
12/24 / 68
12 / 68
1 / 69
2 / 69
3 / 69
4 / 69
5 / 69
6 / 69
7 / 69
8 / 69
9 / 69
10 / 69
11 / 69
12 / 69
1 / 70
2 / 70
3 / 70
4 / 70
5 / 70
6 / 70
7 / 70
8 / 70
9 / 70
10 / 70
11 / 70
12 / 70
1 / 71
2 / 71
3 / 71
4 / 71
5 / 71
6 / 71
7 / 71
8 / 71
9 / 71
10 / 71
11 / 71
12 / 71
1 / 72
2 / 72
3 / 72
4 / 72
5 / 72
6 / 72
7 / 72
8 / 72
9 / 72
10 / 72
11 / 72
12 / 72
1 / 73
2 / 73
3 / 73
4 / 73
5 / 73
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
------------------------------------
10-Year
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6 / 73 $7.63 $8.03 5.00%
7 / 73 $8.02 $8.44 5.00% 07/20/73 $0.0350 $7.94
8 / 73 $7.86 $8.27 5.00%
9 / 73 $8.17 $8.60 5.00%
10 / 73 $8.18 $8.61 5.00%
11 / 73 $7.13 $7.51 5.00%
12 / 73 $7.17 $7.55 5.00%
1 / 74 $6.90 $7.26 5.00% 01/25/74 $0.0600 $6.62
2 / 74 $6.87 $7.23 5.00%
3 / 74 $6.68 $7.03 5.00%
4 / 74 $6.36 $6.69 5.00%
5 / 74 $6.17 $6.49 5.00%
6 / 74 $5.91 $6.22 5.00%
7 / 74 $5.24 $5.52 5.00% 07/19/74 $0.0400 $5.18
8 / 74 $4.75 $5.00 5.00%
9 / 74 $4.14 $4.36 5.00%
10 / 74 $5.00 $5.26 5.00%
11 / 74 $4.77 $5.02 5.00%
12 / 74 $4.60 $4.84 5.00%
1 / 75 $4.88 $5.14 5.00% 01/24/75 $0.0800 $5.09
2 / 75 $5.37 $5.65 5.00%
3 / 75 $5.50 $5.79 5.00%
4 / 75 $5.86 $6.17 5.00%
5 / 75 $6.13 $6.45 5.00%
6 / 75 $6.39 $6.73 5.00%
7 / 75 $5.81 $6.12 5.00% 07/25/75 $0.0400 $5.61
8 / 75 $5.64 $5.94 5.00%
9 / 75 $5.36 $5.64 5.00%
10 / 75 $5.67 $5.97 5.00%
11 / 75 $5.80 $6.11 5.00%
12 / 75 $5.68 $5.98 5.00%
1 / 76 $6.34 $6.67 5.00% 01/23/76 $0.0300 $6.31
2 / 76 $6.25 $6.58 5.00%
3 / 76 $6.42 $6.76 5.00%
4 / 76 $6.32 $6.65 5.00%
5 / 76 $6.22 $6.55 5.00%
6 / 76 $6.43 $6.77 5.00%
7 / 76 $6.32 $6.65 5.00% 07/23/76 $0.0300 $6.31
8 / 76 $6.21 $6.54 5.00%
9 / 76 $6.36 $6.69 5.00%
10 / 76 $6.13 $6.45 5.00%
11 / 76 $6.08 $6.40 5.00%
12 / 76 $6.33 $6.66 5.00%
1 / 77 $5.78 $6.08 5.00% 01/21/77 $0.0400 $5.76
2 / 77 $5.62 $5.92 5.00%
3 / 77 $5.53 $5.82 5.00%
4 / 77 $5.59 $5.88 5.00%
5 / 77 $5.45 $5.74 5.00%
6 / 77 $5.69 $5.99 5.00%
7 / 77 $5.49 $5.78 5.00% 07/22/77 $0.0500 $5.49
8 / 77 $5.40 $5.68 5.00%
9 / 77 $5.34 $5.62 5.00%
10 / 77 $5.14 $5.41 5.00%
11 / 77 $5.37 $5.65 5.00%
12 / 77 $5.38 $5.66 5.00%
1 / 78 $4.91 $5.17 5.00% 01/20/78 $0.0750 $4.95
2 / 78 $4.77 $5.02 5.00%
3 / 78 $4.96 $5.22 5.00%
4 / 78 $5.55 $5.84 5.00%
5 / 78 $5.80 $6.11 5.00%
6 / 78 $5.77 $6.07 5.00%
7 / 78 $6.25 $6.58 5.00% 07/21/78 $0.0500 $6.55
8 / 78 $6.45 $6.79 5.00%
9 / 78 $6.33 $6.66 5.00%
10 / 78 $5.57 $5.86 5.00%
11 / 78 $5.88 $6.19 5.00%
12 / 78 $6.09 $6.41 5.00%
1 / 79 $6.23 $6.56 5.00% 01/19/79 $0.0500 $6.19
2 / 79 $5.87 $6.18 5.00%
3 / 79 $6.37 $6.71 5.00%
4 / 79 $6.39 $6.73 5.00%
5 / 79 $6.30 $6.63 5.00%
6 / 79 $6.64 $6.99 5.00%
7 / 79 $6.77 $7.13 5.00% 07/20/79 $0.0475 $6.88
8 / 79 $7.43 $7.82 5.00%
9 / 79 $7.43 $7.82 5.00%

<CAPTION>
- ------------------------------------------------------------------------------------------------------------
5-Year 3-Year 1-Year
Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------
<S> <C>
6 / 73
7 / 73
8 / 73
9 / 73
10 / 73
11 / 73
12 / 73
1 / 74
2 / 74
3 / 74
4 / 74
5 / 74
6 / 74
7 / 74
8 / 74
9 / 74
10 / 74
11 / 74
12 / 74
1 / 75
2 / 75
3 / 75
4 / 75
5 / 75
6 / 75
7 / 75
8 / 75
9 / 75
10 / 75
11 / 75
12 / 75
1 / 76
2 / 76
3 / 76
4 / 76
5 / 76
6 / 76
7 / 76
8 / 76
9 / 76
10 / 76
11 / 76
12 / 76
1 / 77
2 / 77
3 / 77
4 / 77
5 / 77
6 / 77
7 / 77
8 / 77
9 / 77
10 / 77
11 / 77
12 / 77
1 / 78
2 / 78
3 / 78
4 / 78
5 / 78
6 / 78
7 / 78
8 / 78
9 / 78
10 / 78
11 / 78
12 / 78
1 / 79
2 / 79
3 / 79
4 / 79
5 / 79
6 / 79
7 / 79
8 / 79
9 / 79
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
------------------------------------
10-Year
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10 / 79 $6.98 $7.35 5.00%
11 / 79 $7.59 $7.99 5.00%
12 / 79 $8.04 $8.46 5.00%
1 / 80 $8.81 $9.27 5.00% 01/18/80 $0.0550 $8.83
2 / 80 $8.64 $9.09 5.00%
3 / 80 $7.61 $8.01 5.00%
4 / 80 $7.78 $8.19 5.00%
5 / 80 $8.18 $8.61 5.00%
6 / 80 $8.55 $9.00 5.00%
7 / 80 $9.79 $10.31 5.00% 07/18/80 $0.0425 $9.73
8 / 80 $10.19 $10.73 5.00%
9 / 80 $10.80 $11.37 5.00%
10 / 80 $11.07 $11.65 5.00%
11 / 80 $13.12 $13.81 5.00%
12 / 80 $12.59 $13.25 5.00%
1 / 81 $11.15 $11.74 5.00% 01/23/81 $0.0475 $11.36
2 / 81 $11.28 $11.87 5.00%
3 / 81 $11.81 $12.43 5.00%
4 / 81 $11.57 $12.18 5.00%
5 / 81 $11.84 $12.46 5.00%
6 / 81 $11.10 $11.68 5.00%
7 / 81 $11.22 $11.81 5.00% 07/24/81 $0.0800 $11.44
8 / 81 $10.32 $10.86 5.00%
9 / 81 $9.58 $10.08 5.00%
10 / 81 $10.55 $11.11 5.00%
11 / 81 $10.73 $11.29 5.00%
12 / 81 $10.32 $10.86 5.00%
1 / 82 $10.09 $10.62 5.00% 01/22/82 $0.0850 $9.70
2 / 82 $9.15 $9.63 5.00%
3 / 82 $8.93 $9.40 5.00%
4 / 82 $9.53 $10.03 5.00%
5 / 82 $9.02 $9.49 5.00%
6 / 82 $8.71 $9.17 5.00%
7 / 82 $8.58 $9.03 5.00% 07/23/82 $0.1000 $8.22
8 / 82 $9.76 $10.27 5.00%
9 / 82 $9.89 $10.41 5.00%
10 / 82 $11.55 $12.16 5.00%
11 / 82 $12.53 $13.19 5.00%
12 / 82 $12.27 $12.92 5.00%
1 / 83 $12.38 $13.03 5.00% 01/21/83 $0.6115 $12.39 $0.5315 Capital Gain
2 / 83 $12.92 $13.60 5.00%
3 / 83 $13.29 $13.99 5.00%
4 / 83 $13.68 $14.40 5.00%
5 / 83 $13.72 $14.44 5.00%
6 / 83 $14.31 $15.06 5.00%
7 / 83 $13.59 $14.31 5.00% 07/22/83 $0.0900 $13.39
8 / 83 $13.44 $14.15 5.00%
9 / 83 $13.70 $14.42 5.00%
10 / 83 $13.28 $13.98 5.00%
11 / 83 $13.75 $14.47 5.00%
12 / 83 $13.48 $14.19 5.00%
1 / 84 $11.97 $12.60 5.00% 01/20/84 $0.9365 $11.72 $0.8290 Capital Gain
2 / 84 $11.34 $11.94 5.00%
3 / 84 $11.52 $12.13 5.00%
4 / 84 $11.54 $12.15 5.00%
5 / 84 $10.96 $11.54 5.00%
6 / 84 $11.52 $12.13 5.00%
7 / 84 $11.22 $11.81 5.00% 07/20/84 $0.1200 $12.28
8 / 84 $12.48 $13.14 5.00%
9 / 84 $11.97 $12.60 5.00%
10 / 84 $12.14 $12.78 5.00%
11 / 84 $11.76 $12.38 5.00%
12 / 84 $12.13 $12.77 5.00%
1 / 85 $12.66 $13.33 5.00% 01/25/85 $0.8242 $13.09 $0.7142 Capital Gain
2 / 85 $12.94 $13.62 5.00% 73.421
3 / 85 $12.37 $13.02 5.00% $0.0000 0.000 73.421
4 / 85 $12.23 $12.87 5.00% $0.0000 0.000 73.421
5 / 85 $12.88 $13.56 5.00% $0.0000 0.000 73.421
6 / 85 $13.10 $13.79 5.00% $0.0000 0.000 73.421
7 / 85 $13.22 $13.92 5.00% 07/03/85 $0.1000 $13.03 $7.3421 0.563 73.984
8 / 85 $12.93 $13.61 5.00% $0.0000 0.000 73.984
9 / 85 $12.25 $12.89 5.00% $0.0000 0.000 73.984
10 / 85 $12.78 $13.45 5.00% $0.0000 0.000 73.984
11 / 85 $13.91 $14.64 5.00% $0.0000 0.000 73.984
12 / 85 $14.50 $15.26 5.00% $0.0000 0.000 73.984
1 / 86 $13.92 $14.65 5.00% 01/06/86 $0.8765 $13.36 $0.7715 Capital Gain $64.8470 4.854 78.838

<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
5-Year 3-Year 1-Year
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------------------
<S> <C>
10 / 79
11 / 79
12 / 79
1 / 80
2 / 80
3 / 80
4 / 80
5 / 80
6 / 80
7 / 80
8 / 80
9 / 80
10 / 80
11 / 80
12 / 80
1 / 81
2 / 81
3 / 81
4 / 81
5 / 81
6 / 81
7 / 81
8 / 81
9 / 81
10 / 81
11 / 81
12 / 81
1 / 82
2 / 82
3 / 82
4 / 82
5 / 82
6 / 82
7 / 82
8 / 82
9 / 82
10 / 82
11 / 82
12 / 82
1 / 83
2 / 83
3 / 83
4 / 83
5 / 83
6 / 83
7 / 83
8 / 83
9 / 83
10 / 83
11 / 83
12 / 83
1 / 84
2 / 84
3 / 84
4 / 84
5 / 84
6 / 84
7 / 84
8 / 84
9 / 84
10 / 84
11 / 84
12 / 84
1 / 85
2 / 85
3 / 85
4 / 85
5 / 85
6 / 85
7 / 85
8 / 85
9 / 85
10 / 85
11 / 85
12 / 85
1 / 86
</TABLE>
<PAGE>
<TABLE>
<CAPTION>

Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ---------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C>
2 / 86 $15.07 $15.86 5.00%
3 / 86 $15.99 $16.83 5.00%
4 / 86 $16.27 $17.13 5.00%
5 / 86 $17.23 $18.14 5.00%
6 / 86 $17.91 $18.85 5.00%
7 / 86 $16.23 $17.08 5.00% 07/03/86 $0.0625 $16.97
8 / 86 $16.66 $17.54 5.00%
9 / 86 $15.05 $15.84 5.00%
10 / 86 $15.81 $16.64 5.00%
11 / 86 $15.97 $16.81 5.00%
12 / 86 $14.03 $14.77 5.00% 12/15/86 $1.4275 $14.28 $1.4275 Capital Gain
1 / 87 $15.42 $16.23 5.00% 01/06/87 $0.2686 $15.36 $0.2229 Capital Gain
2 / 87 $16.70 $17.58 5.00% 02/06/87 $0.0443 $16.44 $0.0443 Capital Gain
3 / 87 $16.94 $17.83 5.00%
4 / 87 $16.60 $17.47 5.00%
5 / 87 $16.97 $17.86 5.00%
6 / 87 $17.36 $18.27 5.00%
7 / 87 $17.83 $18.77 5.00% 07/06/87 $0.0900 $17.63
8 / 87 $18.70 $19.68 5.00%
9 / 87 $18.27 $19.23 5.00%
10 / 87 $14.26 $15.01 5.00%
11 / 87 $13.24 $13.94 5.00%
12 / 87 $12.34 $12.99 5.00% 12/30/87 $2.1475 $12.23 $2.0075 Capital Gain
1 / 88 $12.41 $13.06 5.00%
2 / 88 $13.26 $13.96 5.00%
3 / 88 $13.13 $13.82 5.00%
4 / 88 $13.19 $13.88 5.00%
5 / 88 $12.92 $13.60 5.00%
6 / 88 $13.79 $14.52 5.00%
7 / 88 $13.37 $14.07 5.00% 07/01/88 $0.1000 $13.56
8 / 88 $12.92 $13.60 5.00%
9 / 88 $13.42 $14.13 5.00%
10 / 88 $13.57 $14.28 5.00%
11 / 88 $13.15 $13.84 5.00%
12 / 88 $13.33 $14.03 5.00% 12/29/88 $0.2975 $13.45 $0.1675 Capital Gain
1 / 89 $14.20 $14.95 5.00%
2 / 89 $13.94 $14.67 5.00%
3 / 89 $14.35 $15.11 5.00%
4 / 89 $15.11 $15.91 5.00%
5 / 89 $15.89 $16.73 5.00%
6 / 89 $15.87 $16.71 5.00%
7 / 89 $17.01 $17.91 5.00% 07/05/89 $0.1000 $16.13
8 / 89 $17.22 $18.13 5.00%
9 / 89 $17.43 $18.35 5.00%
10 / 89 $17.01 $17.91 5.00%
11 / 89 $17.29 $18.20 5.00%
12 / 89 $15.18 $15.98 5.00% 12/29/89 $2.1425 $14.99 $1.9550 Capital Gain
1 / 90 $13.87 $14.60 5.00%
2 / 90 $13.94 $14.67 5.00%
3 / 90 $14.35 $15.11 5.00%
4 / 90 $14.17 $14.92 5.00%
5 / 90 $15.87 $16.71 5.00%
6 / 90 $15.95 $16.79 5.00%
7 / 90 $15.45 $16.26 5.00%
8 / 90 $13.84 $14.57 5.00%
9 / 90 $12.96 $13.64 5.00%
10 / 90 $12.54 $13.20 5.00%
11 / 90 $13.54 $14.25 5.00%
12 / 90 $12.93 $13.61 5.00% 12/31/90 $0.9408 $12.36 $0.7808 Capital Gain
1 / 91 $13.59 $14.31 5.00%
2 / 91 $14.57 $15.34 5.00%
3 / 91 $15.40 $16.21 5.00%
4 / 91 $15.04 $15.83 5.00%
5 / 91 $15.93 $16.77 5.00%
6 / 91 $14.97 $15.76 5.00%
7 / 91 $15.85 $16.68 5.00%
8 / 91 $16.51 $17.38 5.00%
9 / 91 $16.48 $17.35 5.00%
10 / 91 $16.85 $17.74 5.00%
11 / 91 $16.36 $17.22 5.00%
12 / 91 $17.48 $18.40 5.00% 12/31/91 $0.85004 $17.72 $0.8072 Capital Gain
1 / 92 $17.19 $18.09 5.00%
2 / 92 $17.02 $17.92 5.00%
3 / 92 $16.21 $17.06 5.00%
4 / 92 $15.77 $16.60 5.00%
5 / 92 $15.95 $16.79 5.00%

</TABLE>

- -------------------------------------------------------------
10-Year
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- -------------------------------------------------------------

<S> <C> <C> <C>
2 / 86 $0.0000 0.000 78.838
3 / 86 $0.0000 0.000 78.838
4 / 86 $0.0000 0.000 78.838
5 / 86 $0.0000 0.000 78.838
6 / 86 $0.0000 0.000 78.838
7 / 86 $4.9274 0.290 79.128
8 / 86 $0.0000 0.000 79.128
9 / 86 $0.0000 0.000 79.128
10 / 86 $0.0000 0.000 79.128
11 / 86 $0.0000 0.000 79.128
12 / 86 $112.9552 7.910 87.038
1 / 87 $23.3784 1.522 88.560
2 / 87 $3.9232 0.239 88.799
3 / 87 $0.0000 0.000 88.799
4 / 87 $0.0000 0.000 88.799
5 / 87 $0.0000 0.000 88.799
6 / 87 $0.0000 0.000 88.799
7 / 87 $7.9919 0.453 89.252
8 / 87 $0.0000 0.000 89.252
9 / 87 $0.0000 0.000 89.252
10 / 87 $0.0000 0.000 89.252
11 / 87 $0.0000 0.000 89.252
12 / 87 $191.6687 5.672 104.924
1 / 88 $0.0000 0.000 104.924
2 / 88 $0.0000 0.000 104.924
3 / 88 $0.0000 0.000 104.924
4 / 88 $0.0000 0.000 104.924
5 / 88 $0.0000 0.000 104.924
6 / 88 $0.0000 0.000 104.924
7 / 88 $10.4924 0.774 105.698
8 / 88 $0.0000 0.000 105.698
9 / 88 $0.0000 0.000 105.698
10 / 88 $0.0000 0.000 105.698
11 / 88 $0.0000 0.000 105.698
12 / 88 $31.4452 2.338 108.036
1 / 89 $0.0000 0.000 108.036
2 / 89 $0.0000 0.000 108.036
3 / 89 $0.0000 0.000 108.036
4 / 89 $0.0000 0.000 108.036
5 / 89 $0.0000 0.000 108.036
6 / 89 $0.0000 0.000 108.036
7 / 89 $10.8036 0.670 108.706
8 / 89 $0.0000 0.000 108.706
9 / 89 $0.0000 0.000 108.706
10 / 89 $0.0000 0.000 108.706
11 / 89 $0.0000 0.000 108.706
12 / 89 $232.9026 5.537 124.243
1 / 90 $0.0000 0.000 124.243
2 / 90 $0.0000 0.000 124.243
3 / 90 $0.0000 0.000 124.243
4 / 90 $0.0000 0.000 124.243
5 / 90 $0.0000 0.000 124.243
6 / 90 $0.0000 0.000 124.243
7 / 90 $0.0000 0.000 124.243
8 / 90 $0.0000 0.000 124.243
9 / 90 $0.0000 0.000 124.243
10 / 90 $0.0000 0.000 124.243
11 / 90 $0.0000 0.000 124.243
12 / 90 $116.8878 9.457 133.700
1 / 91 $0.0000 0.000 133.700
2 / 91 $0.0000 0.000 133.700
3 / 91 $0.0000 0.000 133.700
4 / 91 $0.0000 0.000 133.700
5 / 91 $0.0000 0.000 133.700
6 / 91 $0.0000 0.000 133.700
7 / 91 $0.0000 0.000 133.700
8 / 91 $0.0000 0.000 133.700
9 / 91 $0.0000 0.000 133.700
10 / 91 $0.0000 0.000 133.700
11 / 91 $0.0000 0.000 133.700
12 / 91 $113.6503 6.414 140.114
1 / 92 $0.0000 0.000 140.114
2 / 92 $0.0000 0.000 140.114
3 / 92 $0.0000 0.000 140.114
4 / 92 $0.0000 0.000 140.114
5 / 92 $0.0000 0.000 140.114

</TABLE>

- ------------------------------------------------------------------------------------------------------------------------------
5-Year 3-Year 1-Year
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------------------

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2 / 86
3 / 86
4 / 86
5 / 86
6 / 86
7 / 86
8 / 86
9 / 86
10 / 86
11 / 86
12 / 86
1 / 87
2 / 87
3 / 87
4 / 87
5 / 87
6 / 87
7 / 87
8 / 87
9 / 87
10 / 87
11 / 87
12 / 87
1 / 88
2 / 88
3 / 88
4 / 88
5 / 88
6 / 88
7 / 88
8 / 88
9 / 88
10 / 88
11 / 88
12 / 88
1 / 89
2 / 89
3 / 89
4 / 89
5 / 89
6 / 89
7 / 89
8 / 89
9 / 89
10 / 89
11 / 89
12 / 89
1 / 90
2 / 90
3 / 90 $0.0000 0.000
4 / 90 $0.0000 0.000
5 / 90 $0.0000 0.000
6 / 90 $0.0000 0.000
7 / 90 $0.0000 0.000
8 / 90 $0.0000 0.000
9 / 90 $0.0000 0.000
10 / 90 $0.0000 0.000
11 / 90 $0.0000 0.000
12 / 90 $64.1306 5.189
1 / 91 $0.0000 0.000
2 / 91 $0.0000 0.000
3 / 91 $0.0000 0.000
4 / 91 $0.0000 0.000
5 / 91 $0.0000 0.000
6 / 91 $0.0000 0.000
7 / 91 $0.0000 0.000
8 / 91 $0.0000 0.000
9 / 91 $0.0000 0.000
10 / 91 $0.0000 0.000
11 / 91 $0.0000 0.000
12 / 91 $62.3547 3.519
1 / 92 $0.0000 0.000
2 / 92 $0.0000 0.000 76.874 55.804
3 / 92 $0.0000 0.000 76.874 $0.0000 0.000 55.804
4 / 92 $0.0000 0.000 76.874 $0.0000 0.000 55.804
5 / 92 $0.0000 0.000 76.874 $0.0000 0.000 55.804

</TABLE>

<PAGE>
JOHN HANCOCK GROWTH FUND (CLASS A) - SEC TOTAL RETURN

<TABLE>
<CAPTION>
10-Year
-------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6 / 92 $15.49 $16.31 5.00% $0.0000 0.000 140.114
7 / 92 $16.07 $16.92 5.00% $0.0000 0.000 140.114
8 / 92 $15.90 $16.74 5.00% $0.0000 0.000 140.114
9 / 92 $16.37 $17.23 5.00% $0.0000 0.000 140.114
10 / 92 $16.90 $17.79 5.00% $0.0000 0.000 140.114
11 / 92 $18.15 $19.11 5.00% $0.0000 0.000 140.114
12 / 92 $17.32 $18.23 5.00% 12/23/92 $1.20287 $17.09 $1.20287 Capital Gain $168.5389 9.862 149.976
1 / 93 $17.87 $18.81 5.00% $0.0000 0.000 149.976
2 / 93 $16.87 $17.76 5.00% $0.0000 0.000 149.976
3 / 93 $17.48 $18.40 5.00% $0.0000 0.000 149.976
4 / 93 $16.73 $17.61 5.00% $0.0000 0.000 149.976
5 / 93 $17.80 $18.74 5.00% $0.0000 0.000 149.976
6 / 93 $17.87 $18.81 5.00% $0.0000 0.000 149.976
7 / 93 $18.01 $18.96 5.00% $0.0000 0.000 149.976
8 / 93 $18.92 $19.92 5.00% $0.0000 0.000 149.976
9 / 93 $19.26 $20.27 5.00% $0.0000 0.000 149.976
10 / 93 $19.70 $20.74 5.00% $0.0000 0.000 149.976
11 / 93 $18.97 $19.97 5.00% $0.0000 0.000 149.976
12 / 93 $17.40 $18.32 5.00% 12/23/93 $2.13757 $17.09 $2.13757 Capital Gain $320.5842 18.759 168.735
1 / 94 $17.37 $18.28 5.00% $0.0000 0.000 168.735
2 / 94 $17.03 $17.93 5.00% $0.0000 0.000 168.735
3 / 94 $16.06 $16.91 5.00% $0.0000 0.000 168.735
4 / 94 $15.85 $16.68 5.00% 04/04/94 $0.02458 $15.78 $0.02458 Capital Gain $4.1475 0.263 168.998
5 / 94 $15.69 $16.52 5.00% $0.0000 0.000 168.998
6 / 94 $14.78 $15.56 5.00% $0.0000 0.000 168.998
7 / 94 $15.22 $16.02 5.00% $0.0000 0.000 168.998
8 / 94 $16.18 $17.03 5.00% $0.0000 0.000 168.998
9 / 94 $15.94 $16.78 5.00% $0.0000 0.000 168.998
10 / 94 $16.36 $17.22 5.00% $0.0000 0.000 168.998
11 / 94 $15.90 $16.74 5.00% $0.0000 0.000 168.998
12 / 94 $15.89 $16.73 5.00% 12/23/94 $0.17744 $15.65 $0.17744 Capital Gain $29.9870 1.916 170.914
</TABLE>

5-Year 3-Year 1-Year
----------------------------------------------------------------------------------------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
6 / 92 $0.0000 0.000 76.874 $0.0000 0.000 55.804
7 / 92 $0.0000 0.000 76.874 $0.0000 0.000 55.804
8 / 92 $0.0000 0.000 76.874 $0.0000 0.000 55.804
9 / 92 $0.0000 0.000 76.874 $0.0000 0.000 55.804
10 / 92 $0.0000 0.000 76.874 $0.0000 0.000 55.804
11 / 92 $0.0000 0.000 76.874 $0.0000 0.000 55.804
12 / 92 $92.4694 5.411 82.285 $67.1250 3.928 59.732
1 / 93 $0.0000 0.000 82.285 $0.0000 0.000 59.732
2 / 93 $0.0000 0.000 82.285 $0.0000 0.000 59.732
3 / 93 $0.0000 0.000 82.285 $0.0000 0.000 59.732
4 / 93 $0.0000 0.000 82.285 $0.0000 0.000 59.732
5 / 93 $0.0000 0.000 82.285 $0.0000 0.000 59.732
6 / 93 $0.0000 0.000 82.285 $0.0000 0.000 59.732
7 / 93 $0.0000 0.000 82.285 $0.0000 0.000 59.732
8 / 93 $0.0000 0.000 82.285 $0.0000 0.000 59.732
9 / 93 $0.0000 0.000 82.285 $0.0000 0.000 59.732
10 / 93 $0.0000 0.000 82.285 $0.0000 0.000 59.732
11 / 93 $0.0000 0.000 82.285 $0.0000 0.000 59.732
12 / 93 $175.8899 10.292 92.577 $127.6813 7.471 67.203
1 / 94 $0.0000 0.000 92.577 $0.0000 0.000 67.203
2 / 94 $0.0000 0.000 92.577 $0.0000 0.000 67.203 55.772
3 / 94 $0.0000 0.000 92.577 $0.0000 0.000 67.203 $0.0000 0.000 55.772
4 / 94 $2.2755 0.144 92.721 $1.6518 0.105 67.308 $1.3709 0.087 55.859
5 / 94 $0.0000 0.000 92.721 $0.0000 0.000 67.308 $0.0000 0.000 55.859
6 / 94 $0.0000 0.000 92.721 $0.0000 0.000 67.308 $0.0000 0.000 55.859
7 / 94 $0.0000 0.000 92.721 $0.0000 0.000 67.308 $0.0000 0.000 55.859
8 / 94 $0.0000 0.000 92.721 $0.0000 0.000 67.308 $0.0000 0.000 55.859
9 / 94 $0.0000 0.000 92.721 $0.0000 0.000 67.308 $0.0000 0.000 55.859
10 / 94 $0.0000 0.000 92.721 $0.0000 0.000 67.308 $0.0000 0.000 55.859
11 / 94 $0.0000 0.000 92.721 $0.0000 0.000 67.308 $0.0000 0.000 55.859
12 / 94 $16.4524 1.051 93.772 $11.9431 0.763 68.071 $9.9116 0.633 56.492
</TABLE>
<PAGE>
Initial Investment: $1,000.00

<TABLE>
<CAPTION>
- ----------------------------------------- -----------------------------------
Average Annual Total Return Rate Investment Value at End of Period

<S> <C> <C> <C>
10 Year Return: N/A 10 Year Value: N/A

5 Year Return: N/A 5 Year Value: N/A

1.65 Year Return: 4.21% 3 Year Value: $1,070.38

1 Year Return: -7.07% 1 Year Value: $929.29

YTD Return: -7.07% YTD Value: $929.29
- ----------------------------------------- -----------------------------------

Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
----------------------------------
3-Year
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1-Year YTD Monthly
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
</TABLE>

JOHN HANCOCK GROWTH FUND - CLASS C

Initial Investment: $1,000.00

<TABLE>
<CAPTION>
- ----------------------------------------- -----------------------------------
Average Annual Total Return Rate Investment Value at End of Period

<S> <C> <C> <C>
10 Year Return: N/A 10 Year Value: N/A

5 Year Return: N/A 5 Year Value: N/A

1.65 Year Return: 4.21% 3 Year Value: $1,070.38

1 Year Return: -7.07% 1 Year Value: $929.29

YTD Return: -7.07% YTD Value: $929.29
- ----------------------------------------- -----------------------------------

Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
-----------------------------------
3-Year
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
05/06 / 93 $17.05 $17.05 0.00% 58.651
5 / 93 $17.80 $17.80 0.00% $0.0000 0.000 58.651
6 / 93 $17.89 $17.89 0.00% $0.0000 0.000 58.651
7 / 93 $18.03 $18.03 0.00% $0.0000 0.000 58.651
8 / 93 $18.95 $18.95 0.00% $0.0000 0.000 58.651
9 / 93 $19.29 $19.29 0.00% $0.0000 0.000 58.651
10 / 93 $19.73 $19.73 0.00% $0.0000 0.000 58.651
11 / 93 $19.00 $19.00 0.00% $0.0000 0.000 58.651
12 / 93 $17.46 $17.46 0.00% 12/23/93 $2.13757 $17.13 $2.13757 Cap Gains $125.3706 7.319 65.970
1 / 94 $17.42 $17.42 0.00% $0.0000 0.000 65.970
2 / 94 $17.08 $17.08 0.00% $0.0000 0.000 65.970
3 / 94 $16.12 $16.12 0.00% $0.0000 0.000 65.970
4 / 94 $15.92 $15.92 0.00% 04/04/94 $0.02458 $15.84 $0.02458 Cap Gains $1.6215 0.102 66.072
5 / 94 $15.76 $15.76 0.00% $0.0000 0.000 66.072
6 / 94 $14.86 $14.86 0.00% $0.0000 0.000 66.072
7 / 94 $15.31 $15.31 0.00% $0.0000 0.000 66.072
8 / 94 $16.28 $16.28 0.00% $0.0000 0.000 66.072
9 / 94 $16.05 $16.05 0.00% $0.0000 0.000 66.072
10 / 94 $16.47 $16.47 0.00% $0.0000 0.000 66.072
11 / 94 $16.02 $16.02 0.00% $0.0000 0.000 66.072
12 / 94 $16.02 $16.02 0.00% 12/23/94 $0.17744 $15.78 $0.17744 Cap Gains $11.7238 0.743 66.815

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
1-Year YTD Monthly
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
05/06 / 93
5 / 93
6 / 93
7 / 93
8 / 93
9 / 93
10 / 93
11 / 93
12 / 93
1 / 94
2 / 94 58.548
3 / 94 $0.0000 0.000 58.548
4 / 94 $1.4391 0.091 58.639
5 / 94 $0.0000 0.000 58.639
6 / 94 $0.0000 0.000 58.639
7 / 94 $0.0000 0.000 58.639
8 / 94 $0.0000 0.000 58.639
9 / 94 $0.0000 0.000 58.639
10 / 94 $0.0000 0.000 58.639
11 / 94 $0.0000 0.000 58.639
12 / 94 $10.4049 0.659 59.298
</TABLE>
<PAGE>
Initial Investment $1,000.00

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Average Annual Total Return Investment Value at End of Period
CDSC
Excluding With Excluding % CDSC Ending
CDSC CDSC CDSC CDSC Amount Value

<S> <C> <C> <C> <C> <C> <C>
10 Year Return: N/A N/A $0.00 0.00% $0.00 $0.00

5 Year Return: N/A N/A $0.00 2.00% $0.00 $0.00

Year Return: N/A N/A $0.00 4.00% $0.00 $0.00

0.99 Year Return: -6.62% -11.33% $934.44 5.00% $46.72 $887.72

YTD Return: -6.56% -11.23% $934.44 5.00% $46.72 $887.72
- -------------------------------------------------------------------------------------------------------

Constant Sales Charge: N/A
</TABLE>

<TABLE>
<CAPTION>
----------------------------------
3-Year
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------------
<S> <C>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
1-Year YTD Monthly
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------
<S> <C>
</TABLE>

JOHN HANCOCK GROWTH FUND - CLASS B

Initial Investment $1,000.00

<S> <C> <C> <C> <C> <C> <C>
10 Year Return: N/A N/A $0.00 0.00% $0.00 $0.00

5 Year Return: N/A N/A $0.00 2.00% $0.00 $0.00

Year Return: N/A N/A $0.00 4.00% $0.00 $0.00

0.99 Year Return: -6.62% -11.33% $934.44 5.00% $46.72 $887.72

YTD Return: -6.56% -11.23% $934.44 5.00% $46.72 $887.72
- -------------------------------------------------------------------------------------------------------

Constant Sales Charge: N/A
</TABLE>

1 / 94 $17.36 $17.36 N/A
2 / 94 $17.02 $17.02 N/A
3 / 94 $16.06 $16.06 N/A
4 / 94 $15.85 $15.85 N/A 04/04/94 $0.02458 $15.78 $0.02458 Cap Gain
5 / 94 $15.68 $15.68 N/A
6 / 94 $14.77 $14.77 N/A
7 / 94 $15.20 $15.20 N/A
8 / 94 $16.14 $16.14 N/A
9 / 94 $15.90 $15.90 N/A
10 / 94 $16.30 $16.30 N/A
11 / 94 $15.84 $15.84 N/A
12 / 94 $15.83 $15.83 N/A 12/23/94 $0.17744 $15.60 $0.17744 Cap Gain

<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
1-Year YTD Monthly
Month Dividend # of Shares Shares Dividend of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1/3/94 58.275 58.275

1 / 94 $0.0000 0.000 58.275 $0.0000 0.000 58.275
2 / 94 $0.0000 0.000 58.275 $0.0000 0.000 58.275
3 / 94 $0.0000 0.000 58.275 $0.0000 0.000 58.275
4 / 94 $1.4324 0.091 58.366 $1.4324 0.091 58.366
5 / 94 $0.0000 0.000 58.366 $0.0000 0.000 58.366
6 / 94 $0.0000 0.000 58.366 $0.0000 0.000 58.366
7 / 94 $0.0000 0.000 58.366 $0.0000 0.000 58.366
8 / 94 $0.0000 0.000 58.366 $0.0000 0.000 58.366
9 / 94 $0.0000 0.000 58.366 $0.0000 0.000 58.366
10 / 94 $0.0000 0.000 58.366 $0.0000 0.000 58.366
11 / 94 $0.0000 0.000 58.366 $0.0000 0.000 58.366
12 / 94 $10.3565 0.664 59.030 $10.3565 0.664 59.030
</TABLE>

POWER OF ATTORNEY

KNOW ALL BY THESE PRESENTS, that the undersigned Trustee of John Hancock Capital
Series does hereby constitute and appoint EDWARD J. BOUDREAU, JR., THOMAS H.
DROHAN, AND JAMES B. LITTLE and each of them individually his true and lawful
attorneys and agents to take any and all action and execute any and all
instruments which said attorneys and agents may deem necessary or advisable

(i) to enable the Trust to comply with the Securities Act of 1933, as
amended, and any rules regulations, orders or other requirements of the
Securities and Exchange Commission thereunder, in connection with the
registration under such Securities Act of 1933 of shares of beneficial interest
of the Trust to be offered by the Trust, and

(ii) in connection with the registration of the Trust under the
Investment Company Act of 1940, as amended,

including specifically, but without limitation of the foregoing, power and
authority to sign his name in his behalf as Director as indicated below,
opposite his signature hereto, to any amendment or supplement (including
post-effective amendments) to the registration statement or statements filed
with the Securities and Exchange Commission under such Securities Act of 1933
and such Investment Company Act of 1940, and to execute any instruments or
documents filed or to be filed as a part of or in connection with such
registration statement or statements; and does hereby ratify and confirm all
that said attorneys and agents shall do or cause to be done by virtue hereof.

IN WITNESS WHEREOF, we have hereunto set our hands on the date indicated
below.

SIGNATURE TITLE DATE AS OF:

/s/Edward J. Boudreau, Jr. Chairman, Trustee November 15, 1988
Edward J. Boudreau, Jr. and Principal
Executive Officer

/s/Thomas H. Drohan Senior Vice President December 13, 1984
Thomas H. Drohan and Secretary

/s/Dennis S. Aronowitz Trustee May 17, 1988
Dennis S. Aronowitz

/s/Richard P. Chapman, Jr. Trustee December 13, 1984
Richard P. Chapman, Jr.

/s/William J. Cosgrove Trustee October 15, 1991
William J. Cosgrove

/s/Gail D. Fosler Trustee January 1, 1994
Gail D. Fosler

/s/Bayard Henry Trustee December 13, 1984
Bayard Henry

/s/Richard S. Scipione Trustee April 23, 1987
Richard S. Scipione

/s/Edward J. Spellman Trustee October 23, 1990
Edward J. Spellman

WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000045291
<NAME> JOHN HANCOCK CAPITAL SERIES
<SERIES>
<NUMBER> 1
<NAME> JOHN HANCOCK GROWTH FUND, CLASS A

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 118,108,702
<INVESTMENTS-AT-VALUE> 151,960,593
<RECEIVABLES> 99,517
<ASSETS-OTHER> 217
<OTHER-ITEMS-ASSETS> 33,851,891
<TOTAL-ASSETS> 152,060,327
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<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 212,863
<TOTAL-LIABILITIES> 212,863
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 118,146,978
<SHARES-COMMON-STOCK> 9,218,162
<SHARES-COMMON-PRIOR> 9,366,513
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (151,405)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,851,891
<NET-ASSETS> 151,847,464
<DIVIDEND-INCOME> 932,417
<INTEREST-INCOME> 627,462
<OTHER-INCOME> 0
<EXPENSES-NET> 2,546,659
<NET-INVESTMENT-INCOME> (986,780)
<REALIZED-GAINS-CURRENT> 1,529,276
<APPREC-INCREASE-CURRENT> (13,091,731)
<NET-CHANGE-FROM-OPS> (12,549,235)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,850,208
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,198,071
<NUMBER-OF-SHARES-REDEEMED> 4,457,375
<SHARES-REINVESTED> 110,953
<NET-CHANGE-IN-ASSETS> (12,374,862)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 231,766
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,231,294
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,546,659
<AVERAGE-NET-ASSETS> 150,458,839
<PER-SHARE-NAV-BEGIN> 17.40
<PER-SHARE-NII> (0.10)
<PER-SHARE-GAIN-APPREC> (1.21)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.20)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.89
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000045291
<NAME> JOHN HANCOCK CAPITAL SERIES
<SERIES>
<NUMBER> 1
<NAME> JOHN HANCOCK GROWTH FUND, CLASS B

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 118,108,702
<INVESTMENTS-AT-VALUE> 151,960,593
<RECEIVABLES> 99,517
<ASSETS-OTHER> 217
<OTHER-ITEMS-ASSETS> 33,851,891
<TOTAL-ASSETS> 152,060,327
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 212,863
<TOTAL-LIABILITIES> 212,863
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 118,146,978
<SHARES-COMMON-STOCK> 240,447
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (151,405)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,851,891
<NET-ASSETS> 151,847,464
<DIVIDEND-INCOME> 932,417
<INTEREST-INCOME> 627,462
<OTHER-INCOME> 0
<EXPENSES-NET> 2,546,659
<NET-INVESTMENT-INCOME> (986,780)
<REALIZED-GAINS-CURRENT> 1,529,276
<APPREC-INCREASE-CURRENT> (13,091,731)
<NET-CHANGE-FROM-OPS> (12,549,235)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (43,984)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 259,658
<NUMBER-OF-SHARES-REDEEMED> 21,948
<SHARES-REINVESTED> 2,737
<NET-CHANGE-IN-ASSETS> (12,374,862)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 231,766
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,231,294
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,546,659
<AVERAGE-NET-ASSETS> 2,182,491
<PER-SHARE-NAV-BEGIN> 17.16
<PER-SHARE-NII> (0.20)
<PER-SHARE-GAIN-APPREC> (0.93)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.20)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.83
<EXPENSE-RATIO> 2.38
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000045291
<NAME> JOHN HANCOCK CAPITAL SERIES
<SERIES>
<NUMBER> 1
<NAME> JOHN HANCOCK GROWTH FUND, CLASS C

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 118,108,702
<INVESTMENTS-AT-VALUE> 151,960,593
<RECEIVABLES> 99,517
<ASSETS-OTHER> 217
<OTHER-ITEMS-ASSETS> 33,851,891
<TOTAL-ASSETS> 152,060,327
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 212,863
<TOTAL-LIABILITIES> 212,863
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 118,146,978
<SHARES-COMMON-STOCK> 98,220
<SHARES-COMMON-PRIOR> 73,595
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (151,405)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 33,851,891
<NET-ASSETS> 151,847,464
<DIVIDEND-INCOME> 932,417
<INTEREST-INCOME> 627,462
<OTHER-INCOME> 0
<EXPENSES-NET> 2,546,659
<NET-INVESTMENT-INCOME> (986,780)
<REALIZED-GAINS-CURRENT> 1,529,276
<APPREC-INCREASE-CURRENT> (13,091,731)
<NET-CHANGE-FROM-OPS> (12,549,235)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 18,255
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 30,518
<NUMBER-OF-SHARES-REDEEMED> 7,014
<SHARES-REINVESTED> 1,121
<NET-CHANGE-IN-ASSETS> (12,374,862)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 231,766
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,231,294
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 2,546,659
<AVERAGE-NET-ASSETS> 1,282,360
<PER-SHARE-NAV-BEGIN> 17.46
<PER-SHARE-NII> (0.01)
<PER-SHARE-GAIN-APPREC> (1.23)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.20)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 16.02
<EXPENSE-RATIO> 1.12
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.

<ARTICLE> 6
<CIK> 0000045291
<NAME> JOHN HANCOCK CAPITAL SERIES
<SERIES>
<NUMBER> 2
<NAME> JOHN HANCOCK SPECIAL VALUE FUND, CLASS A

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 7,884,216
<INVESTMENTS-AT-VALUE> 7,941,322
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<PAYABLE-FOR-SECURITIES> 237,564
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 231,583
<TOTAL-LIABILITIES> 469,147
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,659,690
<SHARES-COMMON-STOCK> 491,452
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 729
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 57,106
<NET-ASSETS> 7,716,067
<DIVIDEND-INCOME> 65,944
<INTEREST-INCOME> 17,111
<OTHER-INCOME> 0
<EXPENSES-NET> 31,885
<NET-INVESTMENT-INCOME> 51,170
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 57,106
<NET-CHANGE-FROM-OPS> 108,276
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 49,463
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 536,835
<NUMBER-OF-SHARES-REDEEMED> 49,786
<SHARES-REINVESTED> 4,403
<NET-CHANGE-IN-ASSETS> 491,452
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 18,489
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 138,509
<AVERAGE-NET-ASSETS> 1,896,112
<PER-SHARE-NAV-BEGIN> 8.50
<PER-SHARE-NII> 0.18
<PER-SHARE-GAIN-APPREC> 0.48
<PER-SHARE-DIVIDEND> 0.17
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.99
<EXPENSE-RATIO> 0.99
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<ARTICLE> 6
<CIK> 0000045291
<NAME> JOHN HANCOCK CAPITAL SERIES
<SERIES>
<NUMBER> 2
<NAME> JOHN HANCOCK SPECIAL VALUE FUND, CLASS B

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<INVESTMENTS-AT-COST> 7,884,216
<INVESTMENTS-AT-VALUE> 7,941,322
<RECEIVABLES> 146,015
<ASSETS-OTHER> 97,877
<OTHER-ITEMS-ASSETS> 57,106
<TOTAL-ASSETS> 8,185,214
<PAYABLE-FOR-SECURITIES> 237,564
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 231,583
<TOTAL-LIABILITIES> 469,147
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 7,659,690
<SHARES-COMMON-STOCK> 366,436
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 729
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 57,106
<NET-ASSETS> 7,716,067
<DIVIDEND-INCOME> 65,944
<INTEREST-INCOME> 17,111
<OTHER-INCOME> 0
<EXPENSES-NET> 31,885
<NET-INVESTMENT-INCOME> 51,170
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 57,106
<NET-CHANGE-FROM-OPS> 108,276
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 18,717
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 390,508
<NUMBER-OF-SHARES-REDEEMED> 25,990
<SHARES-REINVESTED> 1,918
<NET-CHANGE-IN-ASSETS> 366,436
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 18,489
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 138,509
<AVERAGE-NET-ASSETS> 767,103
<PER-SHARE-NAV-BEGIN> 8.50
<PER-SHARE-NII> 0.13
<PER-SHARE-GAIN-APPREC> 0.48
<PER-SHARE-DIVIDEND> 0.11
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.00
<EXPENSE-RATIO> 1.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>