JOHN HANCOCK
Growth and
Income Funds
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Prospectus
November 1, 1998
This prospectus gives vital information about these funds. For your own benefit
and protection, please read it before you invest, and keep it on hand for future
reference.
Please note that these funds:
o are not bank deposits
o are not federally insured
o are not endorsed by any bank or government agency
o are not guaranteed to achieve their goal(s)
Like all mutual fund shares, these securities have not been approved or
disapproved by the Securities and Exchange Commission or any state securities
commission, nor has the Securities and Exchange Commission or any state
securities commission passed upon the accuracy or adequacy of this prospectus.
Any representation to the contrary is a criminal offense.
Growth and Income Fund
Independence Equity Fund
Sovereign Balanced Fund
Sovereign Investors Fund
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
101 Huntington Avenue, Boston, Massachusetts 02199-7603
<PAGE>
Contents
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A fund-by-fund look at goals, Growth and Income Fund 4
strategies, risks, expenses and
financial history. Independence Equity Fund 6
Sovereign Balanced Fund 8
Sovereign Investors Fund 10
Policies and instructions for opening, Your account
maintaining and closing an account
in any growth and income fund. Choosing a share class 12
How sales charges are calculated 12
Sales charge reductions and waivers 13
Opening an account 14
Buying shares 15
Selling shares 16
Transaction policies 18
Dividends and account policies 18
Additional investor services 19
Details that apply to the growth Fund details
and income funds as a group.
Business structure 20
Sales compensation 21
More about risk 23
For more information back cover
<PAGE>
Overview
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GOAL OF THE GROWTH AND INCOME FUNDS
John Hancock growth and income funds invest for varying combinations of income
and capital appreciation. Each fund has its own emphasis with regard to income,
growth and total return, and has its own strategy and risk/reward profile.
Because you could lose money by investing in these funds, be sure to read all
risk disclosure carefully before investing.
WHO MAY WANT TO INVEST
These funds may be appropriate for investors who:
o are looking for a more conservative alternative to exclusively
growth-oriented funds
o need an investment to form the core of a portfolio
o seek above-average total return over the long term
o are retired or nearing retirement
Growth and income funds may NOT be appropriate if you:
o are investing for maximum return over a long time horizon
o require a high degree of stability of your principal
THE MANAGEMENT FIRM
All John Hancock growth and income funds are managed by John Hancock Advisers,
Inc. Founded in 1968, John Hancock Advisers is a wholly owned subsidiary of John
Hancock Mutual Life Insurance Company and manages more than $30 billion in
assets.
FUND INFORMATION KEY
Concise fund-by-fund descriptions begin on the next page. Each description
provides the following information:
[Clipart] Goal and strategy The fund's particular investment goals and the
strategies it intends to use in pursuing those goals.
[Clipart] Portfolio securities The primary types of securities in which the fund
invests. Secondary investments are described in "More about risk" at the end of
the prospectus.
[Clipart] Risk factors The major risk factors associated with the fund.
[Clipart] Portfolio management The individual or group (including subadvisers,
if any) designated by the investment adviser to handle the fund's day-to-day
management.
[Clipart] Expenses The overall costs borne by an investor in the fund, including
sales charges and annual expenses.
[Clipart] Financial highlights A table showing the fund's financial performance
for up to ten years, by share class. A bar chart showing total return allows you
to compare the fund's historical risk level to those of other funds.
<PAGE>
Growth and Income Fund
REGISTRANT NAME: JOHN HANCOCK INVESTMENT TRUST
TICKER SYMBOL CLASS A: TAGRX CLASS B: TSGWX CLASS C: N/A
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GOAL AND STRATEGY
[Clipart] The fund seeks the highest total return (capital appreciation plus
current income) that is consistent with reasonable safety of capital. To pursue
this goal, the fund invests in a diversified portfolio of stocks, bonds and
money market instruments. Although the fund may concentrate in any of these
securities, under normal circumstances it invests primarily in stocks. The fund
may not invest more than 25% of assets in any one industry.
PORTFOLIO SECURITIES
[Clipart] The fund may invest in most types of securities, including:
o common and preferred stocks, warrants and convertible securities
o U.S. Government and agency debt securities, including mortgage-backed
securities
o corporate bonds, notes and other debt securities of any maturity
The fund may invest up to 15% of net assets in junk bonds, including convertible
securities, that may be rated as low as CC/Ca and their unrated equivalents.
The fund may invest up to 25% of assets in foreign securities (35% during
adverse U.S. market conditions). To a limited extent, the fund also may invest
in certain higher-risk securities, and may engage in other investment practices.
For temporary defensive purposes, the fund may invest some or all of its assets
in investment-grade short-term securities.
RISK FACTORS
[Clipart] As with any growth and income fund, the value of your investment will
fluctuate in response to stock and bond market movements.
To the extent that it invests in certain securities, the fund may be affected by
additional risks:
o foreign securities: currency, information, natural event and political risks
o mortgage-backed securities: extension and prepayment risks
These risks are defined in "More about risk" starting on page 25. This section
also details other higher-risk securities and practices that the fund may
utilize. Before you invest, please read "More about risk" carefully.
PORTFOLIO MANAGEMENT
[Clipart] Timothy E. Keefe, CFA, has been the leader of the fund's portfolio
management team since joining John Hancock Funds in July 1996. He is a senior
vice president of the adviser and has been in the investment business since
1987.
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INVESTOR EXPENSES
[Clipart] Fund investors pay various expenses, either directly or indirectly.
The figures below show the expenses for the past year, adjusted to reflect any
changes. Because no Class C shares were issued or outstanding during the past
year, Class C expenses are based on Class B expenses. Future expenses may be
greater or less.
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Shareholder transaction expenses Class A Class B Class C
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Maximum sales charge imposed
on purchases (as a percentage of
offering price) 5.00% none none
Maximum sales charge imposed
on reinvested dividends none none none
Maximum deferred sales charge none(1) 5.00% 1.00%
Redemption fee(2) none none none
Exchange fee none none none
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Annual fund operating expenses (as a % of average net assets)
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Management fee(3) 0.625% 0.625% 0.625%
12b-1 fee(4) 0.250% 1.00% 1.00%
Other expenses 0.245% 0.245% 0.245%
Total fund operating expenses 1.120% 1.870% 1.870%
Example The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
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Share class Year 1 Year 3 Year 5 Year 10
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Class A shares $61 $84 $109 $180
Class B shares
Assuming redemption
at end of period $69 $89 $121 $199
Assuming no redemption $20 $62 $101 $199
Class C shares
Assuming redemption
at end of period $29 $59 $101 $219
Assuming no redemption $19 $59 $101 $219
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) There will be a one-time reduction of $150,000 in the management fee in
fiscal year 1998. With this reduction, the management fee would be 0.591%
for each class and total fund operating expenses would be 1.086% for Class A
and 1.836% for Class Band Class C.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
4 GROWTH AND INCOME FUND
<PAGE>
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FINANCIAL HIGHLIGHTS
[Clipart] The figures below have been audited by the fund's independent
auditors, Ernst & Young LLP.
[The following table was originally a bar chart in the printed materials.]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Volatility, as indicated by Class A
year-by-year total investment return (%) (9.86) 23.47 0.18 23.80 10.47 13.64 (2.39) 19.22 15.33 14.53(4) 36.71
(scale varies from fund to fund) four
months
</TABLE>
<TABLE>
<CAPTION>
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Class A - period ended: 8/88 8/89 8/90 8/91 8/92 8/93 8/94
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<S> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $12.04 $8.83 $10.19 $9.87 $11.77 $12.43 $12.08
Net investment income (loss) 0.50 0.55 0.20 0.20 0.32(2) 0.40(2) 0.32(2)
Net realized and unrealized gain
(loss) on investments (1.73) 1.42 (0.18) 2.07 0.89 1.12 (0.61)
Total from investment operations (1.23) 1.97 0.02 2.27 1.21 1.52 (0.29)
Less distributions:
Dividends from net investment income (0.49) (0.61) (0.27) (0.19) (0.25) (0.42) (0.37)
Distributions from net realized
gain on investments sold (1.49) -- (0.07) (0.18) (0.30) (1.45) --
Total distributions (1.98) (0.61) (0.34) (0.37) (0.55) (1.87) (0.37)
Net asset value, end of period $8.83 $10.19 $9.87 $11.77 $12.43 $12.08 $11.42
Total investment return at net
asset value(3) (%) (9.86) 23.47 0.18 23.80 10.47 13.64 (2.39)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 69,555 70,513 63,150 77,461 89,682 115,780 121,160
Ratio of expenses to average net assets (%) 1.29 1.12 1.29 1.38 1.34 1.29 1.31
Ratio of net investment income (loss)
to average net assets (%) 5.45 6.07 1.96 1.90 2.75 3.43 2.82
Portfolio turnover rate (%) 120 214 69 70 119 107 195
Average brokerage commission rate(6) ($) N/A N/A N/A N/A N/A N/A N/A
<CAPTION>
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Class A - period ended: 8/95 8/96 12/96(1) 12/97
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<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $11.42 $13.38 $15.07 $15.62
Net investment income (loss) 0.21(2) 0.19(2) 0.05(2) 0.12(2)
Net realized and unrealized gain
(loss) on investments 1.95 1.84 2.15 5.57
Total from investment operations 2.16 2.03 2.20 5.69
Less distributions:
Dividends from net investment income (0.20) (0.19) (0.08) (0.07)
Distributions from net realized
gain on investments sold -- (0.15) (1.57) (1.92)
Total distributions (0.20) (0.34) (1.65) (1.99)
Net asset value, end of period $13.38 $15.07 $15.62 $19.32
Total investment return at net
asset value(3) (%) 19.22 15.33 14.53(4) 36.71
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 130,183 139,548 163,154 303,313
Ratio of expenses to average net assets (%) 1.30 1.17 1.22(5) 1.12
Ratio of net investment income (loss)
to average net assets (%) 1.82 1.28 0.85(5) 0.65
Portfolio turnover rate (%) 99 74 26 102
Average brokerage commission rate(6) ($) N/A 0.0665 0.0692 0.0686
<CAPTION>
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Class B - period ended: 8/91(7) 8/92 8/93 8/94 8/95 8/96 12/96(1) 12/97
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $11.52 $11.77 $12.44 $12.10 $11.44 $13.41 $15.10 $15.66
Net investment income (loss)(2) -- 0.23 0.30 0.24 0.13 0.08 0.01 (0.02)
Net realized and unrealized gain (loss)
on investments 0.25 0.89 1.12 (0.61) 1.96 1.85 2.14 5.60
Total from investment operations 0.25 1.12 1.42 (0.37) 2.09 1.93 2.15 5.58
Less distributions:
Dividends from net investment income -- (0.15) (0.31) (0.29) (0.12) (0.09) (0.02) (0.01)
Distributions from net realized gain on
investments sold -- (0.30) (1.45) -- -- (0.15) (1.57) (1.92)
Total distributions -- (0.45) (1.76) (0.29) (0.12) (0.24) (1.59) (1.93)
Net asset value, end of period $11.77 $12.44 $12.10 $11.44 $13.41 $15.10 $15.66 $19.31
Total investment return at net asset value(3) (%) 2.17(4) 9.67 12.64 (3.11) 18.41 14.49 14.15(4) 35.80
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 7,690 29,826 65,010 114,025 114,723 125,781 146,399 340,334
Ratio of expenses to average net assets (%) 2.19(5) 2.07 2.19 2.06 2.03 1.90 1.98(5) 1.87
Ratio of net investment income (loss) to average
net assets (%) 1.46(5) 2.02 2.53 2.07 1.09 0.55 0.10(5) (0.10)
Portfolio turnover rate (%) 70 119 107 195 99 74 26 102
Average brokerage commission rate(6) ($) N/A N/A N/A N/A N/A 0.0665 0.0692 0.0686
</TABLE>
(1) Effective December 31, 1996, the fiscal year end changed from August 31 to
December 31.
(2) Based on the average of the shares outstanding at the end of each month.
(3) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(4) Not annualized.
(5) Annualized.
(6) Per portfolio share traded. Required for fiscal years that began September
1, 1995 or later.
(7) Class B shares commenced operations on August 22, 1991.
GROWTH AND INCOME FUND 5
<PAGE>
Independence Equity Fund
REGISTRANT NAME: JOHN HANCOCK CAPITAL SERIES
TICKER SYMBOL CLASS A: JHDCX CLASS B: JHIDX CLASS C: N/A
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GOAL AND STRATEGY
[Clipart] The fund seeks above-average total return (capital appreciation plus
income). To pursue this goal, the fund invests primarily in a diversified stock
portfolio whose risk profile is similar to that of the S&P 500 index. The fund
does not invest exclusively in S&P 500 stocks.
In choosing stocks, the fund uses a proprietary computer model (NIXDEX) to
identify stocks that appear to be undervalued. The fund favors those undervalued
stocks that are selected by its model and that are believed to have improving
fundamentals. The fund may not invest more than 25% of assets in any one
industry.
PORTFOLIO SECURITIES
[Clipart] Under normal circumstances, the fund invests at least 65% of assets in
common stocks. It may also invest in warrants, preferred stocks and
investment-grade convertible debt securities.
The fund may invest in foreign securities in the form of American Depository
Receipts (ADRs) and U.S. dollar-denominated securities of foreign issuers traded
on U.S. exchanges. To a limited extent the fund also may invest in certain
higher-risk securities, and may engage in other investment practices.
For temporary defensive purposes, the fund may invest some or all of its assets
in investment-grade short-term securities.
RISK FACTORS
[Clipart] As with any growth and income fund, the value of your investment will
fluctuate in response to stock and bond market movements. Because the fund
follows an index-tracking strategy, it is likely to remain fully invested even
if the fund's managers anticipate a market downturn.
To the extent that it invests in foreign securities, the fund may be affected by
additional risks, such as information, natural event and political risks. These
risks are defined in "More about risk" starting on page 25. This section also
details other higher-risk securities and practices that the fund may utilize.
Please read "More about risk" carefully before you invest.
MANAGEMENT/SUBADVISER
[Clipart] The fund's investment decisions are made by a portfolio management
team, and no individual is primarily responsible for making them. Team members
are employees of Indepen-dence Investment Associates, Inc., the fund's
subadviser and a subsidiary of John Hancock Mutual Life Insurance Company.
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INVESTOR EXPENSES
[Clipart] Fund investors pay various expenses, either directly or indirectly.
The figures below show the expenses for the past year, adjusted to reflect any
changes. Because no Class C shares were issued or outstanding during the past
year, Class C expenses are based on Class B expenses. Future expenses may be
greater or less.
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Shareholder transaction expenses Class A Class B Class C
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Maximum sales charge imposed
on purchases (as a percentage of
offering price) 5.00% none none
Maximum sales charge imposed
on reinvested dividends none none none
Maximum deferred sales charge none(1) 5.00% 1.00%
Redemption fee(2) none none none
Exchange fee none none none
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Annual fund operating expenses (as a % of average net assets)
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Management fee(3) 0.75% 0.75% 0.75%
12b-1 fee(4) 0.30% 1.00% 1.00%
Other expenses 0.39% 0.39% 0.39%
Total fund operating expenses 1.44% 2.14% 2.14%
Example The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
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Share class Year 1 Year 3 Year 5 Year 10
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Class A shares $64 $93 $125 $214
Class B shares
Assuming redemption
at end of period $72 $97 $135 $229
Assuming no redemption $22 $67 $115 $229
Class C shares
Assuming redemption
at end of period $32 $67 $115 $247
Assuming no redemption $22 $67 $115 $247
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Management fee includes a subadviser fee equal to 55% of the management fee.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
6 INDEPENDENCE EQUITY FUND
<PAGE>
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FINANCIAL HIGHLIGHTS
[Clipart] The figures below have been audited by the fund's independent
auditors, Price Waterhouse LLP.
[The following table was originally a bar chart in the printed materials.]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
Volatility, as indicated by Class A
year-by-year total investment return (%) 10.95(5) 13.58 6.60 16.98 29.12 10.33(5) 29.19
(scale varies from fund to fund) seven
months
</TABLE>
<TABLE>
<CAPTION>
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Class A - period ended: 5/92(1) 5/93 5/94 5/95 5/96 12/96(2) 12/97
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<S> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $10.00 $10.98 $12.16 $12.68 $14.41 $17.98 $19.42
Net investment income (loss) 0.15 0.22 0.28(3) 0.32(3) 0.20(3) 0.13(3) 0.10(3)
Net realized and unrealized gain (loss) on
investments 0.94 1.25 0.52 1.77 3.88 1.72 5.55
Total from investment operations 1.09 1.47 0.80 2.09 4.08 1.85 5.65
Less distributions:
Dividends from net investment income (0.11) (0.23) (0.23) (0.28) (0.22) (0.14) (0.04)
Distributions from net realized gain on
investments sold -- (0.06) (0.05) (0.08) (0.29) (0.27) (1.10)
Total distributions (0.11) (0.29) (0.28) (0.36) (0.51) (0.41) (1.14)
Net asset value, end of period $10.98 $12.16 $12.68 $14.41 $17.98 $19.42 $23.93
Total investment return at net asset value(4) (%) 10.95(5) 13.58 6.60 16.98 29.12 10.33(5) 29.19
Total adjusted investment return at net asset
value(4,6) (%) 9.23(5) 11.40 6.15 16.94 28.47 10.08(5) 29.17
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 2,622 12,488 66,612 101,418 14,878 31,013 92,204
Ratio of expenses to average net assets (%) 1.66(7) 0.76 0.70 0.70 0.94 1.30(7) 1.42
Ratio of adjusted expenses to average net
assets(8) (%) 3.38(7) 2.94 1.15 0.74 1.59 1.73(7) 1.44
Ratio of net investment income (loss) to average
net assets (%) 1.77(7) 2.36 2.20 2.43 1.55 1.16(7) 0.45
Ratio of adjusted net investment income (loss)
to average net assets(8) (%) 0.05(7) 0.18 1.75 2.39 0.90 0.73(7) 0.43
Portfolio turnover rate (%) 53 53 43 71 157 35 62
Fee reduction per share ($) 0.15 0.20 0.06(3) 0.005(3) 0.08(3) 0.05(3) 0.00(3,9)
Average brokerage commission rate(10) ($) N/A N/A N/A N/A N/A 0.0326 0.0440
<CAPTION>
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Class B - period ended: 5/96(1) 12/96(2) 12/97
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $15.25 $17.96 $19.41
Net investment income (loss)(3) 0.09 0.05 (0.06)
Net realized and unrealized gain (loss) on investments 2.71 1.72 5.56
Total from investment operations 2.80 1.77 5.50
Less distributions:
Dividends from net investment income (0.09) (0.05) (0.01)
Distributions from net realized gain on investments sold -- (0.27) (1.10)
Total distributions (0.09) (0.32) (1.11)
Net asset value, end of period $17.96 $19.41 $23.80
Total investment return at net asset value(4) (%) 18.46(5) 9.83(5) 28.39
Total adjusted investment return at net asset value(4,6) (%) 17.59(5) 9.58(5) 28.37
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 15,125 42,461 134,939
Ratio of expenses to average net assets (%) 2.00(7) 2.00(7) 2.12
Ratio of adjusted expenses to average net assets(8) (%) 3.21(7) 2.43(7) 2.14
Ratio of net investment income (loss) to average net assets (%) 0.78(7) 0.45(7) (0.25)
Ratio of adjusted net investment income (loss) to average
net assets(8) (%) (0.43)(7) 0.02(7) (0.27)
Portfolio turnover rate (%) 157 35 62
Fee reduction per share(3) ($) 0.13 0.05 0.00(9)
Average brokerage commission rate(10) ($) N/A 0.0326 0.0440
</TABLE>
(1) Class A and Class B shares commenced operations on June 10, 1991 and
September 7, 1995, respectively.
(2) Effective December 31, 1996, the fiscal year end changed from May 31 to
December 31.
(3) Based on the average of the shares outstanding at the end of each month.
(4) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(5) Not annualized.
(6) An estimated total return calculation that does not take into consideration
fee reductions by the adviser during the periods shown.
(7) Annualized.
(8) Unreimbursed, without fee reduction.
(9) Less than $0.01 per share.
(10) Per portfolio share traded. Required for fiscal years that began September
1, 1995 or later.
INDEPENDENCE EQUITY FUND 7
<PAGE>
Sovereign Balanced Fund
REGISTRANT NAME: JOHN HANCOCK INVESTMENT TRUST
TICKER SYMBOL CLASS A: SVBAX CLASS B: SVBBX
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GOAL AND STRATEGY
[Clipart] The fund seeks current income, long-term growth of capital and income,
and preservation of capital. To pursue these goals, the fund allocates its
assets among a diversified mix of debt and equity securities. While the relative
weightings of debt and equity securities will shift over time, at least 25% of
assets will be invested in senior debt securities. The fund may not invest more
than 25% of assets in any one industry.
PORTFOLIO SECURITIES
[Clipart] The fund may invest in any type or class of security, including (but
not limited to) stocks, warrants, U.S. Government and agency securities,
corporate debt securities, investment-grade short-term securities, foreign
currencies and options and futures contracts.
The fund's stock investments are exclusively in companies that have increased
their dividend payout in each of the last ten years. Up to 25% of the fund's
bond investments may be rated from BB/Ba to C (junk bonds).
The fund may invest up to 35% of assets in foreign securities; however, these
typically have not exceeded 5% of assets. To a limited extent, the fund also may
invest in certain higher-risk securities, and may engage in other investment
practices.
For temporary defensive purposes, the fund may invest some or all of its assets
in investment-grade short-term securities.
RISK FACTORS
[Clipart] As with any growth and income fund, the value of your investment will
fluctuate in response to stock and bond market movements. To the extent that it
invests in certain securities, the fund may be affected by additional risks:
o junk bonds: above-average credit, market and other risks
o foreign securities: currency, information, natural event and political risks
o mortgage-backed securities: extension and prepayment risks
These risks are listed and defined in "More about risk" starting on page 25.
This section also details other higher-risk securities and practices that the
fund may utilize. Please read "More about risk" carefully before you invest.
MANAGEMENT/SUBADVISER
[Clipart] John F. Snyder III and Barry H. Evans, CFA, lead the fund's portfolio
management team. Mr. Snyder, an investment manager since 1971, is an executive
vice president of Sovereign Asset Management Corporation, the fund's subadviser
and a subsidiary of John Hancock Funds. Mr. Evans, a senior vice president of
the adviser, has been in the investment business since joining John Hancock
Funds in 1986.
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INVESTOR EXPENSES
[Clipart] Fund investors pay various expenses, either directly or indirectly.
The figures below show the expenses for the past year, adjusted to reflect any
changes. Future expenses may be greater or less.
- --------------------------------------------------------------------------------
Shareholder transaction expenses Class A Class B
- --------------------------------------------------------------------------------
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
Maximum sales charge imposed on
reinvested dividends none none
Maximum deferred sales charge none(1) 5.00%
Redemption fee(2) none none
Exchange fee none none
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Annual fund operating expenses (as a % of average net assets)
- --------------------------------------------------------------------------------
Management fee(3) 0.60% 0.60%
12b-1 fee(4) 0.30% 1.00%
Other expenses 0.32% 0.32%
Total fund operating expenses 1.22% 1.92%
Example The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
- --------------------------------------------------------------------------------
Share class Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A shares $62 $87 $114 $190
Class B shares
Assuming redemption
at end of period $70 $90 $124 $206
Assuming no redemption $20 $60 $104 $206
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Management fee includes a subadviser fee equal to 40% of the stock portion
of the management fee.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
8 SOVEREIGN BALANCED FUND
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
[Clipart] The figures below have been audited by the fund's independent
auditors, Ernst & Young LLP.
[The following table was originally a bar chart in the printed materials.]
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Volatility, as indicated by Class A
year-by-year total investment return (%) 2.37(4) 11.38 (3.51) 24.23 12.13 20.79
(scale varies from fund to fund)
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 12/92(1) 12/93 12/94 12/95 12/96 12/97
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $10.00 $10.19 $10.74 $9.84 $11.75 $12.27
Net investment income (loss) 0.04(2) 0.46 0.50 0.44(2) 0.41(2) 0.37(2)
Net realized and unrealized gain (loss) on investments 0.20 0.68 (0.88) 1.91 0.99 2.14
Total from investment operations 0.24 1.14 (0.38) 2.35 1.40 2.51
Less distributions:
Dividends from net investment income (0.05) (0.45) (0.50) (0.44) (0.41) (0.37)
Distributions from net realized gain on investments sold -- (0.14) (0.02) -- (0.47) (1.08)
Total distributions (0.05) (0.59) (0.52) (0.44) (0.88) (1.45)
Net asset value, end of period $10.19 $10.74 $9.84 $11.75 $12.27 $13.33
Total investment return at net asset value(3) (%) 2.37(4) 11.38 (3.51) 24.23 12.13 20.79
Total adjusted investment return at net asset value(3,5) (%) 2.34(4) -- -- -- -- --
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 5,796 62,218 61,952 69,811 71,242 84,264
Ratio of expenses to average net assets (%) 2.79(6) 1.45 1.23 1.27 1.29 1.22
Ratio of adjusted expenses to average net assets(7) (%) 2.94(6) -- -- -- -- --
Ratio of net investment income (loss) to average net assets (%) 3.93(6) 4.44 4.89 3.99 3.33 2.77
Ratio of adjusted net investment income (loss) to average
net assets(7) (%) 3.78(6) -- -- -- -- --
Portfolio turnover rate (%) -- 85 78 45 80 115
Fee reduction per share ($) 0.0016(2) -- -- -- -- --
Average brokerage commission rate(8) ($) N/A N/A N/A N/A 0.0700 0.0700
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 12/92(1) 12/93 12/94 12/95 12/96 12/97
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $10.00 $10.20 $10.75 $9.84 $11.74 $12.27
Net investment income (loss) 0.03(2) 0.37 0.43 0.36(2) 0.32(2) 0.28(2)
Net realized and unrealized gain (loss) on investments 0.20 0.70 (0.89) 1.90 1.01 2.14
Total from investment operations 0.23 1.07 (0.46) 2.26 1.33 2.42
Less distributions:
Dividends from net investment income (0.03) (0.38) (0.43) (0.36) (0.33) (0.28)
Distributions from net realized gain on investments sold -- (0.14) (0.02) -- (0.47) (1.08)
Total distributions (0.03) (0.52) (0.45) (0.36) (0.80) (1.36)
Net asset value, end of period $10.20 $10.75 $9.84 $11.74 $12.27 $13.33
Total investment return at net asset value(3) (%) 2.29(4) 10.63 (4.22) 23.30 11.46 19.96
Total adjusted investment return at net asset value(3,5) (%) 2.26(4) -- -- -- -- --
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 14,311 78,775 79,176 87,827 90,855 101,249
Ratio of expenses to average net assets (%) 3.51(6) 2.10 1.87 1.96 1.99 1.91
Ratio of adjusted expenses to average net assets(7) (%) 3.66(6) -- -- -- -- --
Ratio of net investment income (loss) to average net assets (%) 3.21(6) 4.01 4.25 3.31 2.63 2.08
Ratio of adjusted net investment income (loss) to average
net assets(7) (%) 3.06(6) -- -- -- -- --
Portfolio turnover rate (%) -- 85 78 45 80 115
Fee reduction per share ($) 0.0012(2) -- -- -- -- --
Average brokerage commission rate(8) ($) N/A N/A N/A N/A 0.0700 0.0700
</TABLE>
(1) Class A and Class B shares commenced operations on October 5, 1992.
This period is covered by the report of other independent auditors (not
included herein).
(2) Based on the average of the shares outstanding at the end of each month.
(3) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(4) Not annualized.
(5) An estimated total return calculation that does not take into consideration
fee reductions by the adviser during the periods shown.
(6) Annualized.
(7) Unreimbursed, without fee reduction.
(8) Per portfolio share traded. Required for fiscal years that began September
1, 1995 or later.
SOVEREIGN BALANCED FUND 9
<PAGE>
Sovereign Investors Fund
REGISTRANT NAME: JOHN HANCOCK INVESTMENT TRUST
TICKER SYMBOL CLASS A: SOVIX CLASS B: SOVBX CLASS C: N/A
- --------------------------------------------------------------------------------
GOAL AND STRATEGY
[Clipart] The fund seeks long-term growth of capital and of income without
assuming undue market risks. Under normal circumstances, the fund invests most
of its assets in a diversified selection of stocks, although it may respond to
market conditions by investing in other types of securities such as bonds or
short-term securities. The fund may not invest more than 25% of assets in any
one industry.
Currently, the fund utilizes a "dividend performers" strategy in selecting
common stocks, investing exclusively in companies that have increased their
dividend payout in each of the last ten years.
PORTFOLIO SECURITIES
[Clipart] The fund may invest in most types of securities, including:
o common and preferred stocks, warrants and convertible securities
o U.S. Government and agency debt securities, including mortgage-backed
securities
o corporate bonds, notes and other debt securities of any maturity
The fund's bond investments are primarily investment-grade, although up to 5% of
assets may be invested in junk bonds rated as low as C and their unrated
equivalents. To a limited extent, the fund may invest in certain higher-risk
securities, and may engage in other investment practices.
For temporary defensive purposes, the fund may invest some or all of its assets
in investment-grade short-term securities.
RISK FACTORS
[Clipart] As with any growth and income fund, the value of your investment will
fluctuate in response to stock and bond market movements.
To the extent that the fund invests in higher-risk securities, it takes on
additional risks that could adversely affect its performance. Before you invest,
please read "More about risk" starting on page 25.
MANAGEMENT/SUBADVISER
[Clipart] John F. Snyder III and Barry H. Evans, CFA, lead the fund's portfolio
management team. Mr. Snyder, an investment manager since 1971, is an executive
vice president of Sovereign Asset Management Corporation, the fund's subadviser
and a subsidiary of John Hancock Funds. Mr. Evans, a senior vice president of
the adviser, has been in the investment business since joining John Hancock
Funds in 1986.
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
[Clipart] Fund investors pay various expenses, either directly or indirectly.
The figures below show the expenses for the past year, adjusted to reflect any
changes. Because no Class C shares were issued or outstanding during the past
year, Class C expenses are based on Class B expenses. Future expenses may be
greater or less.
- --------------------------------------------------------------------------------
Shareholder transaction expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge imposed
on purchases (as a percentage
of offering price) 5.00% none none
Maximum sales charge imposed
on reinvested dividends none none none
Maximum deferred sales charge none(1) 5.00% 1.00%
Redemption fee(2) none none none
Exchange fee none none none
- --------------------------------------------------------------------------------
Annual fund operating expenses (as a % of average net assets)
- --------------------------------------------------------------------------------
Management fee(3) 0.55% 0.55% 0.55%
12b-1 fee(4) 0.30% 1.00% 1.00%
Other expenses 0.21% 0.28% 0.28%
Total fund operating expenses 1.06% 1.83% 1.83%
Example The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
- --------------------------------------------------------------------------------
Share class Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A shares $60 $82 $106 $173
Class B shares
Assuming redemption
at end of period $69 $88 $119 $195
Assuming no redemption $19 $58 $99 $195
Class C shares
Assuming redemption
at end of period $29 $58 $99 $215
Assuming no redemption $19 $58 $99 $215
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Management fee includes a subadviser fee equal to 40% of the management fee.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
10 SOVEREIGN INVESTORS FUND
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
[Clipart] The figures below have been audited by the fund's independent
auditors, Ernst & Young LLP.
[The following table was originally a bar chart in the printed materials.]
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Volatility, as indicated by Class A
year-by-year total investment return (%) 11.23 23.76 4.38 30.48 7.23 5.71 (1.85) 29.15 17.57 29.14
(scale varies from fund to fund)
</TABLE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Class A - period ended: 12/88(1) 12/89(1) 12/90(1) 12/91(1,2)12/92(1) 12/93 12/94
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $10.96 $11.19 $12.60 $11.94 $14.31 $14.78 $15.10
Net investment income (loss) 0.57 0.59 0.58 0.54 0.47 0.44 0.46
Net realized and unrealized gain (loss)
on investments 0.65 2.01 (0.05) 3.03 0.54 0.39 (0.75)
Total from investment operations 1.22 2.60 0.53 3.57 1.01 0.83 (0.29)
Less distributions:
Dividends from net investment income (0.61) (0.61) (0.59) (0.53) (0.45) (0.42) (0.46)
Distributions from net realized gain
on investments sold (0.38) (0.58) (0.60) (0.67) (0.09) (0.09) (0.11)
Total distributions (0.99) (1.19) (1.19) (1.20) (0.54) (0.51) (0.57)
Net asset value, end of period $11.19 $12.60 $11.94 $14.31 $14.78 $15.10 $14.24
Total investment return at net asset value(4) (%) 11.23 23.76 4.38 30.48 7.23 5.71 (1.85)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 45,861 66,466 83,470 194,055 872,932 1,258,575 1,090,231
Ratio of expenses to average net assets (%) 0.86 1.07 1.14 1.18 1.13 1.10 1.16
Ratio of net investment income (loss) to
average net assets (%) 4.97 4.80 4.77 4.01 3.32 2.94 3.13
Portfolio turnover rate (%) 35 40 55 67 30 46 45
Average brokerage commission rate(5) ($) N/A N/A N/A N/A N/A N/A N/A
<CAPTION>
- ---------------------------------------------------------------------------------------
Class A - period ended: 12/95 12/96 12/97
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $14.24 $17.87 $19.48
Net investment income (loss) 0.40 0.36(3) 0.32(3)
Net realized and unrealized gain (loss)
on investments 3.71 2.77 5.31
Total from investment operations 4.11 3.13 5.63
Less distributions:
Dividends from net investment income (0.40) (0.36) (0.32)
Distributions from net realized gain
on investments sold (0.08) (1.16) (2.38)
Total distributions (0.48) (1.52) (2.70)
Net asset value, end of period $17.87 $19.48 $22.41
Total investment return at net asset value(4) (%) 29.15 17.57 29.14
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 1,280,321 1,429,523 1,748,490
Ratio of expenses to average net assets (%) 1.14 1.13 1.06
Ratio of net investment income (loss) to
average net assets (%) 2.45 1.86 1.44
Portfolio turnover rate (%) 46 59 62
Average brokerage commission rate(5) ($) N/A 0.0696 0.0659
<CAPTION>
- -------------------------------------------------------------------------------------------
Class B - period ended: 12/94(6) 12/95 12/96 12/97
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $15.02 $14.24 $17.86 $19.46
Net investment income (loss)(3) 0.38 0.27 0.21 0.16
Net realized and unrealized gain (loss)
on investments (0.69) 3.71 2.77 5.29
Total from investment operations (0.31) 3.98 2.98 5.45
Less distributions:
Dividends from net investment income (0.36) (0.28) (0.22) (0.15)
Distributions from net realized gain on
investments sold (0.11) (0.08) (1.16) (2.38)
Total distributions (0.47) (0.36) (1.38) (2.53)
Net asset value, end of period $14.24 $17.86 $19.46 $22.38
Total investment return at net asset value(4) (%) (2.04)(7) 28.16 16.67 28.14
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 128,069 257,781 406,523 610,976
Ratio of expenses to average net assets (%) 1.86(8) 1.90 1.91 1.83
Ratio of net investment income (loss) to
average net assets (%) 2.57(8) 1.65 1.10 0.67
Portfolio turnover rate (%) 45 46 59 62
Average brokerage commission rate(5) ($) N/A N/A 0.0696 0.0659
</TABLE>
(1) These periods are covered by the report of other independent auditors (not
included herein).
(2) On October 23, 1991, John Hancock Advisers, Inc. became the investment
adviser of the fund.
(3) Based on the average of the shares outstanding at the end of each month.
(4) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(5) Per portfolio share traded. Required for fiscal years that began September
1, 1995 or later.
(6) Class B shares commenced operations on January 3, 1994.
(7) Not annualized.
(8) Annualized.
SOVEREIGN INVESTORS FUND 11
<PAGE>
Your account
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
All John Hancock growth and income funds offer two classes of shares, Class A
and Class B. In addition, Class C shares are available for Growth and Income
Fund, Independence Equity Fund and Sovereign Investors Fund. Each class has its
own cost structure as outlined below, allowing you to choose the one that best
meets your requirements. For more details, see "How sales charges are
calculated." Your financial representative can help you decide which share class
is best for you.
- --------------------------------------------------------------------------------
Class A - for all funds
- --------------------------------------------------------------------------------
o Front-end sales charges. There are several ways to reduce these charges,
described under "Sales charge reductions and waivers" on the following
page.
o Lower annual expenses than Class B and Class C shares.
- --------------------------------------------------------------------------------
Class B - for all funds
- --------------------------------------------------------------------------------
o No front-end sales charge; all your money goes to work for you right away.
o Higher annual expenses than Class A shares.
o A contingent deferred sales charge that declines from 5% over 6 years.
o Automatic conversion to Class A shares after eight years, thus reducing
future annual expenses.
- --------------------------------------------------------------------------------
Class C - for selected funds
- --------------------------------------------------------------------------------
Applies to Growth and Income Fund, Independence Equity Fund and Sovereign
Investors Fund.
o No front-end sales charge; all your money goes to work for you right away.
o Higher annual expenses than Class A shares.
o A 1% contingent deferred sales charge on shares sold within one year of
purchase.
o No automatic conversion to Class A shares, so the fund's annual expenses
continue at the same level throughout the life of your investment.
For actual past expenses of Class A and Class B shares, see the fund-by-fund
information earlier in this prospectus.
Sovereign Investors Fund offers Class Y shares, which have their own expense
structure and are available to financial institutions only. Call Signature
Services for more information (see back cover of this prospectus).
Investors purchasing $1 million or more of Class B shares may want to consider
the lower operating expenses of Class A shares.
- --------------------------------------------------------------------------------
HOW SALES CHARGES ARE CALCULATED
Class A Sales charges are as follows:
- --------------------------------------------------------------------------------
Class A sales charges
- --------------------------------------------------------------------------------
As a % of As a % of your
Your investment offering price investment
Up to $49,999 5.00% 5.26%
$50,000 - $99,999 4.50% 4.71%
$100,000 - $249,999 3.50% 3.63%
$250,000 - $499,999 2.50% 2.56%
$500,000 - $999,999 2.00% 2.04%
$1,000,000 and over See below
Investments of $1 million or more Class A shares are available with no front-end
sales charge. However, there is a contingent deferred sales charge (CDSC) on any
shares sold within one year of purchase, as follows:
- --------------------------------------------------------------------------------
CDSCon $1 million+ investments
- --------------------------------------------------------------------------------
Your investment CDSC on shares being sold
First $1M - $4,999,999 1.00%
Next $1 - $5M above that 0.50%
Next $1 or more above that 0.25%
For purposes of this CDSC, all purchases made during a calendar month are
counted as having been made on the LAST day of that month.
The CDSC is based on the lesser of the original purchase cost or the current
market value of the shares being sold, and is not charged on shares you acquired
by reinvesting your dividends. To keep your CDSC as low as possible, each time
you place a request to sell shares we will first sell any shares in your account
that are not subject to a CDSC.
Class B Shares are offered at their net asset value per share, without any
initial sales charge. However, you may be charged a contingent deferred sales
charge (CDSC) on shares you sell within six years of buying them. There is no
CDSC on shares acquired through reinvestment of dividends. The CDSC is based on
the original purchase cost or the current market value of the shares being sold,
whichever is less. The longer the time between the purchase and the sale of
shares, the lower the rate of the CDSC:
12 YOUR ACCOUNT
<PAGE>
- --------------------------------------------------------------------------------
Class B deferred charges
- --------------------------------------------------------------------------------
Years after purchase CDSC on shares being sold
1st year 5.00%
2nd year 4.00%
3rd or 4th year 3.00%
5th year 2.00%
6th year 1.00%
After 6 years None
For purposes of this CDSC, all purchases made during a calendar month are
counted as having been made on the FIRST day of that month.
CDSC calculations are based on the number of shares involved, not on the value
of your account. To keep your CDSC as low as possible, each time you place a
request to sell shares we will first sell any shares in your account that carry
no CDSC. If there are not enough of these to meet your request, we will sell
those shares that have the lowest CDSC.
Class C Shares are offered at their net asset value per share, without any
initial sales charge. However, you may be charged a contingent deferred sales
charge (CDSC) of 1% on shares you sell within one year of purchase. There is no
CDSC on shares acquired through reinvestment of dividends. The CDSC is based on
the original purchase cost or the current market value of the shares being sold,
whichever is less.
CDSC calculations are based on the number of shares involved, not on the value
of your account. Each time you place a request to sell shares, we will first
sell any shares in your account that carry no CDSC.
For purposes of this CDSC, all purchases made during a calendar month are
counted as having been made on the FIRST day of that month.
SALES CHARGE REDUCTIONS AND WAIVERS
Reducing your Class A sales charges There are several ways you can combine
multiple purchases of Class A shares of John Hancock funds to take advantage of
the breakpoints in the sales charge schedule. The first three ways can be
combined in any manner.
o Accumulation Privilege -- lets you add the value of any Class A shares you
already own to the amount of your next Class A investment for purposes of
calculating the sales charge. Retirement plans investing $1 million in Class
B shares may add that value to Class A purchases to calulate charges.
o Letter of Intention -- lets you purchase Class A shares of a fund over a
13-month period and receive the same sales charge as if all shares had been
purchased at once.
o Combination Privilege -- lets you combine Class A shares of multiple funds
for purposes of calculating the sales charge.
To utilize: complete the appropriate section of your application, or contact
your financial representative or Signature Services to add these options or
consult the SAI (see the back cover of this prospectus).
Group Investment Program A group may be treated as a single purchaser under the
accumulation and combination privileges. Each investor has an individual
account, but the group's investments are lumped together for sales charge
purposes, making the investors potentially eligible for reduced sales charges.
There is no charge, no obligation to invest (although initial investments must
total at least $250) and individual investors may close their accounts at any
time.
To utilize: contact your financial representative or Signature Services to find
out how to qualify, or consult the SAI (see the back cover of the prospectus).
CDSC waivers As long as Signature Services is notified at the time you sell, the
CDSC for each share class will generally be waived in the following cases:
o to make payments through certain systematic withdrawal plans
o to make certain distributions from a retirement plan
o because of shareholder death or disability
o to purchase a John Hancock Declaration annuity
To utilize: If you think you may be eligible for a CDSC waiver, contact your
financial representative or Signature Services, or consult the SAI.
YOUR ACCOUNT 13
<PAGE>
Reinstatement privilege If you sell shares of a John Hancock fund, you may
reinvest some or all of the proceeds in the same share class of any John Hancock
fund within 120 days without a sales charge, as long as Signature Services is
notified before you reinvest. If you paid a CDSC when you sold your shares, you
will be credited with the amount of the CDSC. All accounts involved must have
the same registration.
To utilize: contact your financial representative or Signature Services.
Waivers for certain investors Class A shares may be offered without front-end
sales charges or CDSCs to various individuals and institutions, including:
o selling brokers and their employees and sales representatives
o financial representatives utilizing fund shares in fee-based investment
products under signed agreement with John Hancock Funds
o fund trustees and other individuals who are affiliated with these or other
John Hancock funds
o individuals transferring assets from an employee benefit plan into a John
Hancock fund
o certain insurance company contract holders (one-year CDSC usually applies)
o participants in certain retirement plans with at least 100 eligible employees
(one-year CDSC applies)
To utilize: if you think you may be eligible for a sales charge waiver, contact
Signature Services or consult the SAI.
- --------------------------------------------------------------------------------
OPENING AN ACCOUNT
1 Read this prospectus carefully.
2 Determine how much you want to invest. The minimum initial investments for
the John Hancock funds are as follows:
o non-retirement account: $1,000
o retirement account: $250
o group investments: $250
o Monthly Automatic Accumulation Plan (MAAP): $25 to open; you must invest
at least $25 a month
o fee-based clients of selling brokers who placed at least $2 billion in
John Hancock funds: $250
3 Complete the appropriate parts of the account application, carefully
following the instructions. If you have questions, please contact your
financial representative or call Signature Services at 1-800-225-5291.
4 Complete the appropriate parts of the account privileges section of the
application. By applying for privileges now, you can avoid the delay and
inconvenience of having to file an additional application if you want to add
privileges later.
5 Make your initial investment using the table on the next page. You and your
financial representative can initiate any purchase, exchange or sale of
shares.
14 YOUR ACCOUNT
<PAGE>
- --------------------------------------------------------------------------------
Buying shares
- --------------------------------------------------------------------------------
Opening an account Adding to an account
By check
[Clipart] o Make out a check for the o Make out a check for the
investment amount, payable to investment amount payable to
"John Hancock Signature "John Hancock Signature
Services, Inc." Services, Inc."
o Deliver the check and your o Fill out the detachable
completed application to your investment slip from an
financial representative, or account statement. If no slip
mail them to Signature is available, include a note
Services (address on next specifying the fund name, your
page). share class, your account
number and the name(s) in
which the account is
registered.
o Deliver the check and your
investment slip or note to
your financial representative,
or mail them to Signature
Services (address on next
page).
By exchange
[Clipart] o Call your financial o Call your financial
representative or Signature representative or Signature
Services to request an Services to request an
exchange. exchange.
By wire
[Clipart] o Deliver your completed o Instruct your bank to wire the
application to your financial amount of your investment to:
representative, or mail it to First Signature Bank & Trust
Signature Services. Account # 900000260
Routing # 211475000
o Obtain your account number by Specify the fund name, your
calling your financial share class, your account
representative or Signature number and the name(s) in
Services. which the account is
registered. Your bank may
o Instruct your bank to wire the charge a fee to wire funds.
amount of your investment to:
First Signature Bank & Trust
Account # 900000260
Routing # 211475000
Specify the fund name, your
choice of share class, the new
account number and the name(s)
in which the account is
registered. Your bank may
charge a fee to wire funds.
By phone
[Clipart] See "By wire" and "By exchange." o Verify that your bank or
credit union is a member of
the Automated Clearing House
(ACH) system.
o Complete the "Invest-By-Phone"
and "Bank Information"
sections on your account
application.
o Call Signature Services to
verify that these features are
in place on your account.
o Tell the Signature Services
representative the fund name,
your share class, your account
number, the name(s) in which
the account is registered and
the amount of your investment.
- ----------------------------------------------
Address
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
Phone
1-800-225-5291
Or contact your financial representative for
instructions and assistance.
- ----------------------------------------------
To open or add to an account using the Monthly Automatic
Accumulation Program, see "Additional investor services."
YOUR ACCOUNT 15
<PAGE>
- --------------------------------------------------------------------------------
Selling shares
- --------------------------------------------------------------------------------
Designed for To sell some or all of your shares
By letter
[Clipart] o Accounts of any type. o Write a letter of instruction
or complete a stock power
o Sales of any amount. indicating the fund name, your
share class, your account
number, the name(s) in which
the account is registered and
the dollar value or number of
shares you wish to sell.
o Include all signatures and any
additional documents that may
be required (see next page).
o Mail the materials to
Signature Services.
o A check will be mailed to the
name(s) and address in which
the account is registered, or
otherwise according to your
letter of instruction.
By phone
[Clipart] o Most accounts. o For automated service 24 hours
a day using your touch-tone
o Sales of up to $100,000. phone, call the EASI-Line at
1-800-338-8080.
o To place your order with a
representative at John Hancock
Funds, call Signature Services
between 8 A.M. and 4 P.M.
Eastern Time on most business
days.
By wire or electronic funds transfer (EFT)
[Clipart] o Requests by letter to sell any o Fill out the "Telephone
amount (accounts of any type). Redemption" section of your
new account application.
o Requests by phone to sell up
to $100,000 (accounts with o To verify that the telephone
telephone redemption redemption privilege is in
privileges). place on an account, or to
request the forms to add it to
an existing account, call
Signature Services.
o Amounts of $1,000 or more will
be wired on the next business
day. A $4 fee will be deducted
from your account.
o Amounts of less than $1,000
may be sent by EFT or by
check. Funds from EFT
transactions are generally
available by the second
business day. Your bank may
charge a fee for this service.
By exchange
[Clipart] o Accounts of any type. o Obtain a current prospectus
for the fund into which you
o Sales of any amount. are exchanging by calling your
financial representative or
Signature Services.
o Call your financial
representative or Signature
Services to request an
exchange.
-----------------------------------------
Address
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
Phone
1-800-225-5291
Or contact your financial representative
for instructions and assistance.
-----------------------------------------
To sell shares through a systematic withdrawal plan, see "Additional investor
services."
16 YOUR ACCOUNT
<PAGE>
Selling shares in writing In certain circumstances, you will need to make your
request to sell shares in writing. You may need to include additional items with
your request, as shown in the table below. You may also need to include a
signature guarantee, which protects you against fraudulent orders. You will need
a signature guarantee if:
o your address of record has changed within the past 30 days
o you are selling more than $100,000 worth of shares
o you are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s)
The signature guarantee must be from a member of the Signature Guarantee
Medallion Program (generally, a broker or securities dealer). We may refuse any
other source. A notary public CANNOT provide a signature guarantee.
- --------------------------------------------------------------------------------
Seller Requirements for written requests
- --------------------------------------------------------------------------------
Owners of individual, joint, sole o Letter of instruction.
proprietorship, UGMA/UTMA (custodial
accounts for minors) or general o On the letter, the signatures and
partner accounts. titles of all persons authorized to
sign for the account, exactly as
the account is registered.
o Signature guarantee if applicable
(see above).
Owners of corporate or association o Letter of instruction.
accounts.
o Corporate resolution, certified
within the past 12 months.
o On the letter and the resolution,
the signature of the person(s)
authorized to sign for the account.
o Signature guarantee if applicable
(see above).
Owners or trustees of trust accounts. o Letter of instruction.
o On the letter, the signature(s) of
the trustee(s).
o If the names of all trustees are
not registered on the account,
please also provide a copy of the
trust document certified within the
past 12 months.
o Signature guarantee if applicable
(see above).
Joint tenancy shareholders whose o Letter of instruction signed by
co-tenants are deceased. surviving tenant.
o Copy of death certificate.
o Signature guarantee if applicable
(see above).
Executors of shareholder estates. o Letter of instruction signed by
executor.
o Copy of order appointing executor.
o Signature guarantee if applicable
(see above).
Administrators, conservators, o Call 1-800-225-5291 for
guardians and other sellers or account instructions.
types not listed above.
YOUR ACCOUNT 17
<PAGE>
- --------------------------------------------------------------------------------
TRANSACTION POLICIES
Valuation of shares The net asset value per share (NAV) for each fund and class
is determined each business day at the close of regular trading on the New York
Stock Exchange (typically 4 P.M. Eastern Time) by dividing a class's net assets
by the number of its shares outstanding.
Buy and sell prices When you buy shares, you pay the NAV plus any applicable
sales charges, as described earlier. When you sell shares, you receive the NAV
minus any applicable deferred sales charges.
Execution of requests Each fund is open on those days when the New York Stock
Exchange is open, typically Monday through Friday. Buy and sell requests are
executed at the next NAV to be calculated after your request is received by
Signature Services.
At times of peak activity, it may be difficult to place requests by phone.
During these times, consider using EASI-Line or sending your request in writing.
In unusual circumstances, any fund may temporarily suspend the processing of
sell requests, or may postpone payment of proceeds for up to three business days
or longer, as allowed by federal securities laws.
Telephone transactions For your protection, telephone requests may be recorded
in order to verify their accuracy. In addition, Signature Services will take
measures to verify the identity of the caller, such as asking for name, account
number, Social Security or other taxpayer ID number and other relevant
information. If appropriate measures are taken, Signature Services is not
responsible for any losses that may occur to any account due to an unauthorized
telephone call. Also for your protection, telephone transactions are not
permitted on accounts whose names or addresses have changed within the past 30
days. Proceeds from telephone transactions can only be mailed to the address of
record.
Exchanges You may exchange shares of one John Hancock fund for shares of the
same class of any other, generally without paying any additional sales charges.
The registration for both accounts involved must be identical. Class B and Class
C shares will continue to age from the original date and will retain the same
CDSC rate as they had before the exchange, except that the rate will change to
the new fund's rate if that rate is higher. A CDSC rate that has increased will
drop again with a future exchange into a fund with a lower rate.
To protect the interests of other investors in the fund, a fund may cancel the
exchange privileges of any parties that, in the opinion of the fund, are using
market timing strategies or making more than seven exchanges per owner or
controlling party per calendar year. A fund may also refuse any exchange order.
A fund may change or cancel its exchange policies at any time, upon 60 days'
notice to its shareholders.
Certificated shares Most shares are electronically recorded. If you wish to have
certificates for your shares, please write to Signature Services. Certificated
shares can only be sold by returning the certificates to Signature Services,
along with a letter of instruction or a stock power and a signature guarantee.
Sales in advance of purchase payments When you place a request to sell shares
for which the purchase money has not yet been collected, the request will be
executed in a timely fashion, but the fund will not release the proceeds to you
until your purchase payment clears. This may take up to ten business days after
the purchase.
- --------------------------------------------------------------------------------
DIVIDENDS AND ACCOUNT POLICIES
Account statements In general, you will receive account statements as follows:
o after every transaction (except a dividend reinvestment) that affects your
account balance
o after any changes of name or address of the registered owner(s)
o in all other circumstances, every quarter
Every year you should also receive, if applicable, a Form 1099 tax information
statement, mailed by January 31.
Dividends The funds generally distribute most or all of their net earnings in
the form of dividends.The funds seek to pay income dividends quarterly, and
capital gains dividends, if any, are typically paid annually.
18 YOUR ACCOUNT
<PAGE>
Dividend reinvestments Most investors have their dividends reinvested in
additional shares of the same fund and class. If you choose this option, or if
you do not indicate any choice, your dividends will be reinvested on the
dividend record date. Alternatively, you can choose to have a check for your
dividends mailed to you. However, if the check is not deliverable, your
dividends will be reinvested.
Taxability of dividends As long as a fund meets the requirements for being a
tax-qualified regulated investment company, which each fund has in the past and
intends to in the future, it pays no federal income tax on the earnings it
distributes to shareholders.
Consequently, dividends you receive from a fund, whether reinvested or taken as
cash, are generally considered taxable. Dividends from a fund's long-term
capital gains are taxable as capital gains; dividends from other sources are
generally taxable as ordinary income.
Some dividends paid in January may be taxable as if they had been paid the
previous December. Corporations may be entitled to take a dividends-received
deduction for a portion of certain dividends they receive.
The Form 1099 that is mailed to you every January details your dividends and
their federal tax category, although you should verify your tax liability with
your tax professional.
Taxability of transactions Any time you sell or exchange shares, it is
considered a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions.
Small accounts (non-retirement only) If you draw down a non-retirement account
so that its total value is less than $1,000, you may be asked to purchase more
shares within 30 days. If you do not take action, your fund may close out your
account and mail you the proceeds. Alternatively, Signature Services may charge
you $10 a year to maintain your account. You will not be charged a CDSC if your
account is closed for this reason, and your account will not be closed if its
drop in value is due to fund performance or the effects of sales charges.
- --------------------------------------------------------------------------------
ADDITIONAL INVESTOR SERVICES
Monthly Automatic Accumulation Program (MAAP) MAAP lets you set up regular
investments from your paycheck or bank account to the John Hancock fund(s) of
your choice. You determine the frequency and amount of your investments, and you
can terminate your program at any time. To establish:
o Complete the appropriate parts of your account application.
o If you are using MAAP to open an account, make out a check ($25 minimum) for
your first investment amount payable to "John Hancock Signature Services,
Inc." Deliver your check and application to your financial representative or
Signature Services.
Systematic withdrawal plan This plan may be used for routine bill payments or
periodic withdrawals from your account. To establish:
o Make sure you have at least $5,000 worth of shares in your account.
o Make sure you are not planning to invest more money in this account (buying
shares during a period when you are also selling shares of the same fund is
not advantageous to you, because of sales charges).
o Specify the payee(s). The payee may be yourself or any other party, and there
is no limit to the number of payees you may have, as long as they are all on
the same payment schedule.
o Determine the schedule: monthly, quarterly, semi-annually, annually or in
certain selected months.
o Fill out the relevant part of the account application. To add a systematic
withdrawal plan to an existing account, contact your financial representative
or Signature Services.
Retirement plans John Hancock Funds offers a range of retirement plans,
including Traditional and Roth IRAs, SIMPLE IRAs, SIMPLE 401(k)s, SEPs, 401(k)s,
money purchase pension and profit-sharing plans. Using these plans, you can
invest in any John Hancock fund (except tax-free income funds) with a low
minimum investment of $250 or, for some group plans, no minimum investment at
all. To find out more, call Signature Services at 1-800-225-5291.
YOUR ACCOUNT 19
<PAGE>
Fund details
- --------------------------------------------------------------------------------
BUSINESS STRUCTURE
How the funds are organized Each John Hancock growth and income fund is an
open-end management investment company or a series of such a company.
Each fund is supervised by a board of trustees, an independent body that has
ultimate responsibility for the fund's activities. The board retains various
companies to carry out the fund's operations, including the investment adviser,
custodian, transfer agent and others (see diagram). The board has the right, and
the obligation, to terminate the fund's relationship with any of these companies
and to retain a different company if the board believes it is in the
shareholders' best interests.
At a mutual fund's inception, the initial shareholder (typically the adviser)
appoints the fund's board. Thereafter, the board and the shareholders determine
the board's membership. The boards of the John Hancock growth and income funds
may include individuals who are affiliated with the investment adviser. However,
the majority of board members must be independent.
The funds do not hold annual shareholder meetings, but may hold special meetings
for such purposes as electing or removing board members, changing fundamental
policies, approving a management contract or approving a 12b-1 plan (12b-1 fees
are explained in "Sales compensation").
-----------------
Shareholders
-----------------
Distribution and
shareholder services
-------------------------------------------------
Financial services firms and
their representatives
Advise current and prospective share-
holders on their fund investments, often
in the context of an overall financial plan.
-------------------------------------------------
-------------------------------------------------
Principal distributor
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, MA 02199-7603
Markets the funds and distributes shares
through selling brokers, financial planners
and other financial representatives.
-------------------------------------------------
------------------------------------------------------
Transfer agent
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
Handles shareholder services, including record-
keeping and statements, distribution of dividends
and processing of buy and sell requests.
------------------------------------------------------
Asset
management
------------------------------------
Subadvisers
Independence Investment
Associates, Inc.
53 State Street
Boston, MA 02109
Sovereign Asset
Management Corporation
One Westlakes
1235 Westlakes Drive
Berwyn, PA 19312
------------------------------------
------------------------------------
Investment adviser
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, MA 02199-7603
Manages the funds' business and
investment activities.
------------------------------------
------------------------------------
Custodian
Investors Bank & Trust Co.
200 Clarendon Street
Boston, MA 02116
Holds the funds' assets, settles all
portfolio trades and collects most of
the valuation data required for
calculating each fund's NAV.
------------------------------------
------------------------------------
Trustees
Oversee the funds' activities.
------------------------------------
20 FUND DETAILS
<PAGE>
Accounting compensation The funds compensate the adviser for performing tax and
financial management services. Annual compensation is not expected to exceed
0.02% of each fund's average net assets.
Portfolio trades In placing portfolio trades, the adviser may use brokerage
firms that market the fund's shares or are affiliated with John Hancock Mutual
Life Insurance Company, but only when the adviser believes no other firm offers
a better combination of quality execution (i.e., timeliness and completeness)
and favorable price.
Investment goals Except for Growth and Income Fund and Sovereign Balanced Fund,
each fund's investment goal is fundamental and may only be changed with
shareholder approval.
Diversification All of the growth and income funds are diversified.
- --------------------------------------------------------------------------------
SALES COMPENSATION
As part of their business strategies, the funds, along with John Hancock Funds,
pay compensation to financial services firms that sell the funds' shares. These
firms typically pass along a portion of this compensation to your financial
representative.
Compensation payments originate from two sources: from sales charges and from
12b-1 fees that are paid out of the funds' assets ("12b-1" refers to the federal
securities regulation authorizing annual fees of this type). The 12b-1 fee rates
vary by fund and by share class, according to Rule 12b-1 plans adopted by the
funds. The sales charges and 12b-1 fees paid by investors are detailed in the
fund-by-fund information. The portions of these expenses that are reallowed to
financial services firms are shown on the next page.
Distribution fees may be used to pay for sales compensation to financial
services firms, marketing and overhead expenses and, for Class B and Class C
shares, interest expenses.
- --------------------------------------------------------------------------------
Class B unreimbursed distribution expenses(1)
- --------------------------------------------------------------------------------
Unreimbursed As a % of
Fund expenses net assets
Growth and Income $ 6,085,174 2.78%
Independence Equity $ 438,366 0.46%
Sovereign Balanced $ 3,636,034 3.80%
Sovereign Investors $ 9,895.659 1.93%
(1) As of the most recent fiscal year end covered by each fund's financial
highlights. These expenses may be carried forward indefinitely.
Class C Class C shares began operations after the 1997 fiscal year. Therefore,
there are no unreimbursed expenses to report.
Initial compensation Whenever you make an investment in a fund or funds, the
financial services firm receives either a reallowance from the initial sales
charge or a commission, as described below. The firm also receives the first
year's service fee at this time.
Annual compensation Beginning with the second year after an investment is made,
the financial services firm receives an annual service fee of 0.25% of its total
eligible net assets. This fee is paid quarterly in arrears.
Financial services firms selling large amounts of fund shares may receive extra
compensation. This compensation, which John Hancock Funds pays out of its own
resources, may include asset retention fees as well as reimbursement for
marketing expenses.
FUND DETAILS 21
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A investments
- ------------------------------------------------------------------------------------------------------------------------------------
Maximum
Sales charge reallowance First year Maximum
paid by investors or commission service fee total compensation(1)
(% of offering price) (% of offering price) (% of net investment) (% of offering price)
<S> <C> <C> <C> <C>
Up to $49,999 5.00% 4.01% 0.25% 4.25%
$50,000 - $99,999 4.50% 3.51% 0.25% 3.75%
$100,000 - $249,999 3.50% 2.61% 0.25% 2.85%
$250,000 - $499,999 2.50% 1.86% 0.25% 2.10%
$500,000 - $999,999 2.00% 1.36% 0.25% 1.60%
Regular investments of
$1 million or more
First $1M - $4,999,999 -- 0.75% 0.25% 1.00%
Next $1 - $5M above that -- 0.25% 0.25% 0.50%
Next $1 or more above that -- 0.00% 0.25% 0.25%
Waiver investments(2) -- 0.00% 0.25% 0.25%
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Class B investments
- -----------------------------------------------------------------------------------------------------------------------------------
Maximum
reallowance First year Maximum
or commission service fee total compensation
(% of offering price) (% of net investment) (% of offering price)
<S> <C> <C> <C>
All amounts 3.75% 0.25% 4.00%
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Class C investments
- -----------------------------------------------------------------------------------------------------------------------------------
Maximum
reallowance First year Maximum
or commission service fee total compensation
(% of offering price) (% of net investment) (% of offering price)
<S> <C> <C> <C>
All amounts 0.75% 0.25% 1.00%
</TABLE>
(1) Reallowance/commission percentages and service fee percentages are
calculated from different amounts, and therefore may not equal total
compensation percentages if combined using simple addition.
(2) Refers to any investments made by municipalities, financial institutions,
trusts and affinity group members that take advantage of the sales charge
waivers described earlier in this prospectus.
CDSC revenues collected by John Hancock Funds may be used to pay commissions
when there is no initial sales charge.
22 FUND DETAILS
<PAGE>
- --------------------------------------------------------------------------------
MORE ABOUT RISK
A fund's risk profile is largely defined by the fund's primary securities and
investment practices. You may find the most concise description of each fund's
risk profile in the fund-by-fund information.
The funds are permitted to utilize -- within limits established by the trustees
- -- certain other securities and investment practices that have higher risks and
opportunities associated with them. On the following page are brief descriptions
of these securities and practices, along with the risks associated with them.
The funds follow certain policies that may reduce these risks.
As with any mutual fund, there is no guarantee that the performance of a John
Hancock growth and income fund will be positive over any period of time.
- --------------------------------------------------------------------------------
TYPES OF INVESTMENT RISK
Correlation risk The risk that changes in the value of a hedging instrument will
not match those of the asset being hedged (hedging is the use of one investment
to offset the effects of another investment).
Credit risk The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation.
Currency risk The risk that fluctuations in the exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment.
Extension risk The risk that an unexpected rise in interest rates will extend
the life of a mortgage-backed security beyond the expected prepayment time,
typically reducing the security's value.
Information risk The risk that key information about a security or market is
inaccurate or unavailable.
Interest rate risk The risk of market losses attributable to changes in interest
rates. With fixed-rate securities, a rise in interest rates typically causes a
fall in values, while a fall in rates typically causes a rise in values.
Leverage risk Associated with securities or practices (such as borrowing) that
multiply small index or market movements into large changes in value.
o Hedged When a derivative (a security whose value is based on another security
or index) is used as a hedge against an opposite position that the fund also
holds, any loss generated by the derivative should be substantially offset by
gains on the hedged investment, and vice versa. While hedging can reduce or
eliminate losses, it can also reduce or eliminate gains.
o Speculative To the extent that a derivative is not used as a hedge, the fund
is directly exposed to the risks of that derivative. Gains or losses from
speculative positions in a derivative may be substantially greater than the
derivative's original cost.
Liquidity risk The risk that certain securities may be difficult or impossible
to sell at the time and the price that the seller would like.
Management risk The risk that a strategy used by a fund's management may fail to
produce the intended result. Common to all mutual funds.
Market risk The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. Common to all stocks and bonds and the
mutual funds that invest in them.
Natural event risk The risk of losses attributable to natural disasters, crop
failures and similar events.
Opportunity risk The risk of missing out on an investment opportunity because
the assets necessary to take advantage of it are tied up in less advantageous
investments.
Political risk The risk of losses directly attributable to government or
political actions of any sort.
Prepayment risk The risk that unanticipated prepayments may occur during periods
of falling interest rates, reducing the value of mortgage-backed securities.
Valuation risk The risk that a fund has valued certain of its securities at a
higher price than it can sell them for.
Year 2000 risk The risk that the funds' operations could be disrupted by year
2000-related computer system problems. Although the adviser and the funds'
service providers are taking steps to address this issue, there may still be
some risk of adverse effects.
Common to all mutual funds.
FUND DETAILS 23
<PAGE>
- --------------------------------------------------------------------------------
Higher-risk securities and practices
- --------------------------------------------------------------------------------
This table shows each fund's investment limitations as a percentage of portfolio
assets. In each case the principal types of risk are listed (see previous page
for definitions). Numbers in this table show allowable usage only; for actual
usage, consult the fund's annual/semi-annual reports.
10 Percent of total assets (italic type)
10 Percent of net assets (roman type)
* No policy limitation on usage; fund may be using currently
o Permitted, but has not typically been used
- -- Not permitted
<TABLE>
<CAPTION>
Growth Independence Sovereign Sovereign
and Income Equity Balanced Investors
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment practices
Borrowing; reverse repurchase agreements
The borrowing of money from banks
or through reverse repurchase agreements.
Leverage, credit risks. 33.3 33.3 33 --
Repurchase agreements The purchase of a
security that must later be sold back to
the issuer at the same price plus interest.
Credit risk. * * * *
Securities lending The lending of securities
to financial institutions, which provide cash
or government securities as collateral.
Credit risk. 33 33.3 33.3 33.3
Short sales The selling of securities that
have been borrowed on the expectation
that the market price will drop.
o Hedged. Hedged leverage, market,
correlation, liquidity, opportunity risks. -- o o o
o Speculative. Speculative leverage, market,
liquidity risks. -- o -- --
Short-term trading Selling a security soon
after purchase. A portfolio engaging in
short-term trading will have higher turnover
and transaction expenses. Market risk. * * * *
When-issued securities and forward commitments
The purchase or sale of securities for
delivery at a future date; market value may
change before delivery. Market,
opportunity, leverage risks. * * * *
- -------------------------------------------------------------------------------------------------------------------
Conventional securities
Non-investment-grade debt securities Debt
securities rated below BBB/Baa are
considered junk bonds. Credit, market,
interest rate, liquidity, valuation and
information risks. 15 -- 25 5
Foreign securities Securities issued by
foreign companies, as well as American or
European depository receipts, which are
dollar-denominated securities typically
issued by American or European banks and
are based on ownership of securities
issued by foreign companies. Market, currency,
information, natural event, political risks. 35 * 35 *
Restricted and illiquid securities Securities
not traded on the open market. May
include illiquid Rule 144A securities.
Liquidity, valuation, market risks. 10 15 15 15
- -------------------------------------------------------------------------------------------------------------------
Leveraged derivative securities
Financial futures and options; securities and
index options Contracts involving the right
or obligation to deliver or receive assets or
money depending on the performance of one or
more assets or an economic index.
o Futures and related options. Interest rate,
currency, market, hedged or speculative
leverage, correlation, liquidity, opportunity risks. * o o --
o Options on securities and indices. Interest rate,
currency, market, hedged or speculative leverage,
correlation, liquidity, credit, opportunity risks. 10(1) o * *
Currency contracts Contracts involving the right or
obligation to buy or sell a given amount of foreign
currency at a specified price and future date.
o Hedged. Currency, hedged leverage, correlation,
liquidity, opportunity risks. * -- * --
o Speculative. Currency, speculative leverage,
liquidity risks. -- -- -- --
(1) Applies to purchased options only.
</TABLE>
24 FUND DETAILS
<PAGE>
For more information
- --------------------------------------------------------------------------------
Two documents are available that offer further information on John Hancock
growth and income funds:
ANNUAL/SEMIANNUAL REPORT TO SHAREHOLDERS
Includes financial statements, detailed performance information, portfolio
holdings, a statement from portfolio management and the auditor's report.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains more detailed information on all aspects of the funds. The
current annual/semiannual report is included in the SAI.
A current SAI has been filed with the Securities and Exchange
Commission and is incorporated by reference (is legally a part of this
prospectus). You may visit the Securities and Exchange Commission's Internet
website (www.sec.gov) to view the SAI, material incorporated by reference and
other information.
To request a free copy of the current annual/semiannual report or SAI, please
write or call:
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
Telephone: 1-800-225-5291
EASI-Line: 1-800-338-8080
TDD: 1-800-544-6713
Internet: www.jhancock.com/funds
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
101 Huntington Avenue
Boston, Massachusetts 02199-7603
John Hancock(R)
(C) 1996 John Hancock Funds, Inc.
GINPN 11/98
