John Hancock
Equity Funds
Prospectus
March 1, 2000
- --------------------------------------------------------------------------------
Balanced Fund
Core Equity Fund
Core Growth Fund
Core Value Fund
Large Cap Growth Fund
Large Cap Value Fund
Mid Cap Growth Fund
Small Cap Growth Fund
Small Cap Value Fund
Sovereign Investors Fund
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these funds or determined whether the information in
this prospectus is adequate and accurate. Anyone who indicates otherwise is
committing a federal crime.
[LOGO] John Hancock Funds
A Global Investment Management Firm
<PAGE>
Contents
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A fund-by-fund summary Balanced Fund 4
of goals, strategies, risks,
performance and expenses. Core Equity Fund 6
Core Growth Fund 8
Core Value Fund 10
Large Cap Growth Fund 12
Large Cap Value Fund 14
Mid Cap Growth Fund 16
Small Cap Growth Fund 18
Small Cap Value Fund 20
Sovereign Investors Fund 22
Policies and instructions for Your account
opening, maintaining and Choosing a share class 24
closing an account in any How sales charges are calculated 24
equity fund. Sales charge reductions and waivers 25
Opening an account 26
Buying shares 27
Selling shares 28
Transaction policies 30
Dividends and account policies 30
Additional investor services 31
Further information on the Fund details
equity funds. Business structure 32
Financial highlights 33
For more information back cover
<PAGE>
Overview
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FUND INFORMATION KEY
Concise fund-by-fund descriptions begin on the next page. Each description
provides the following information:
[Clip Art] Goal and strategy The fund's particular investment goals and the
strategies it intends to use in pursuing those goals.
[Clip Art] Main risks The major risk factors associated with the fund.
[Clip Art] Past performance The fund's total return, measured year-by-year and
over time.
[Clip Art] Your expenses The overall costs borne by an investor in the fund,
including sales charges and annual expenses.
JOHN HANCOCK EQUITY FUNDS
These funds seek long-term growth by investing primarily in common stocks.
However, the Balanced Fund also makes significant investments in fixed-income
securities. Each fund has its own strategy and its own risk profile.
WHO MAY WANT TO INVEST
These funds may be appropriate for investors who:
o have longer time horizons
o want to diversify their portfolios
o are seeking funds for the equity portion of an asset allocation portfolio
o are investing for retirement or other goals that are many years in the future
Equity funds may NOT be appropriate if you:
o are investing with a shorter time horizon in mind
o are uncomfortable with an investment that may go up and down in value
RISKS OF MUTUAL FUNDS
Mutual funds are not bank deposits and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Because
you could lose money by investing in these funds, be sure to read all risk
disclosure carefully before investing.
THE MANAGEMENT TEAM
All John Hancock equity funds are managed by John Hancock Advisers, Inc. Founded
in 1968, John Hancock Advisers is a wholly owned subsidiary of John Hancock
Financial Services, Inc. and manages more than $30 billion in assets.
3
<PAGE>
Balanced Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks current income, long-term growth of capital and income
and preservation of capital. To pursue these goals, the fund allocates its
investments among a diversified mix of debt and equity securities. At least 25%
of assets will be invested in senior debt securities.
All of the fund's stock investments are "dividend performers" -- companies whose
dividend payments have increased steadily for ten years. In managing the fund's
stock portfolio, the managers use fundamental financial analysis to identify
individual companies with high-quality income statements, substantial cash
reserves and identifiable catalysts for growth, which may be new products or
benefits from industrywide growth. The managers generally visit companies to
evaluate the strength and consistency of their management strategy. Finally, the
managers look for stocks that are reasonably priced relative to their earnings
and industry. Historically, companies that meet these criteria have tended to
have large or medium market capitalizations.
The fund's debt securities are used to enhance current income and provide some
added stability. The fund's investments in bonds of any maturity are primarily
investment-grade (rated BBB or above and their unrated equivalents). However, up
to 25% of its bond investments may be in junk bonds rated as low as C and their
unrated equivalents.
Although the fund invests primarily in U.S. securities, it may invest up to 35%
of assets in foreign securities. The fund may also make limited use of certain
derivatives (investments whose value is based on indices, securities or
currencies).
In abnormal market conditions, the fund may temporarily invest extensively in
investment-grade short- term securities. In these and other cases, the fund
might not achieve its goal.
================================================================================
PORTFOLIO MANAGERS
John F. Snyder, III
- ---------------------------------------
Executive vice president of adviser
Joined team in 1994
Joined adviser in 1991
Began career in 1971
Barry H. Evans, CFA
- ---------------------------------------
Senior vice president of adviser
Joined team in 1996
Joined adviser in 1986
Began career in 1986
Peter M. Schofield, CFA
- ---------------------------------------
Vice president of adviser
Joined team in 1996
Joined adviser in 1996
Began career in 1984
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks. The average annual figures reflect sales charges; the
year-by-year and index figures do not, and would be lower if they did. All
figures assume dividend reinvestment. Past performance does not indicate future
results.
- --------------------------------------------------------------------------------
Class A year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------
1993 1994 1995 1996 1997 1998 1999
11.38% -3.51% 24.23% 12.13% 20.79% 14.01% 3.89%
Best quarter: Q4 '98, 11.38% Worst quarter: Q3 '99, -4.89%
- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/99
- --------------------------------------------------------------------------------
Life of Life of
1 year 5 year Class A Class B
Class A - began 10/5/92 -1.30% 13.61% 10.67% --
Class B - began 10/5/92 -1.83% 13.77% -- 10.70%
Class C - began 5/1/99 -- -- -- --
Index 21.03% 28.54% 21.83% 21.83%
Index: Standard & Poor's 500 Stock Index, an unmanaged index of 500 stocks.
4
<PAGE>
MAIN RISKS
[Clip Art] The value of your investment will go up and down in response to stock
and bond market movements.
The fund's management strategy has a significant influence on fund performance.
Large- or medium- capitalization stocks as a group could fall out of favor with
the market, causing the fund to underperform investments that focus on
small-capitalization stocks. In addition, if the managers' security selection
strategies do not perform as expected, the fund could underperform its peers or
lose money.
To the extent that the fund makes investments with additional risks, these risks
could increase volatility or reduce performance:
o Certain derivatives could produce disproportionate losses.
o In a down market, higher risk securities and derivatives could become harder
to value or to sell at a fair price.
o Any bonds held by the fund could be downgraded in credit quality or go into
default. In addition, bond prices generally fall when interest rates rise;
this risk is greater for longer maturity bonds. Junk bond prices can fall on
bad news about the issuer, an industry or the economy in general.
o Foreign investments carry additional risks, including potentially unfavorable
currency exchange rates, inadequate or inaccurate financial information and
social or political instability.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
================================================================================
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly.
- --------------------------------------------------------------------------------
Shareholder transaction expenses(1) Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price,
whichever is less none(2) 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee 0.60% 0.60% 0.60%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.30% 0.30% 0.30%
Total fund operating expenses 1.20% 1.90% 1.90%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- --------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A $616 $862 $1,127 $1,882
Class B - with redemption $693 $897 $1,226 $2,040
- without redemption $193 $597 $1,026 $2,040
Class C - with redemption $293 $597 $1,026 $2,222
- without redemption $193 $597 $1,026 $2,222
(1) A $4.00 fee may be charged for wire redemptions.
(2) Except for investments of $1 million or more; see "How sales charges are
calculated."
FUND CODES
Class A
- ---------------------------------------
Ticker SVBAX
CUSIP 47803P104
Newspaper BalA
SEC number 811-0560
JH fund number 36
Class B
- ---------------------------------------
Ticker SVBBX
CUSIP 47803P203
Newspaper BalB
SEC number 811-0560
JH fund number 136
Class C
- ---------------------------------------
Ticker --
CUSIP 47803P708
Newspaper --
SEC number 811-0560
JH fund number 536
5
<PAGE>
Core Equity Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks above-average total return (capital appreciation plus
income). To pursue this goal, the fund normally invests at least 65% of assets
in a diversified portfolio of equities which are primarily large-capitalization
stocks. The portfolio's risk profile is similar to that of the S&P 500 Index.
The managers select from a menu of stocks of approximately 550 companies that
evolves over time. Approximately 70% to 80% of these companies also are included
in the S&P 500 Index. The subadviser's investment research team is organized by
industry and tracks these companies to develop earnings estimates and five-year
projections for growth. A series of proprietary computer models use this
in-house research to rank the stocks according to their combination of:
o value, meaning they appear to be underpriced
o momentum, meaning they show potential for strong growth
This process, together with a risk/ return analysis against the S&P 500 Index,
results in a portfolio of approximately 100 to 130 of the stocks from the top
60% of the menu. The fund generally sells stocks that fall into the bottom 20%
of the menu.
In normal market conditions, the fund is almost entirely invested in stocks. The
fund may invest in dollar-denominated foreign securities and make limited use of
certain derivatives (investments whose value is based on indices or securities).
In abnormal market conditions, the fund may temporarily invest more than 35% of
assets in investment-grade short-term securities. In these and other cases, the
fund might not achieve its goal.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
================================================================================
SUBADVISER
Independence Investment
Associates, Inc.
- ---------------------------------------
Team responsible for day-to-day
investment management
A subsidiary of John Hancock Financial
Services, Inc.
Founded in 1982
Supervised by the adviser
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks. The average annual figures reflect sales charges; the
year-by-year and index figures do not, and would be lower if they did. All
figures assume dividend reinvestment. Past performance does not indicate future
results.
- --------------------------------------------------------------------------------
Class A year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998 1999
9.01% 16.12% -2.14% 37.20% 21.24% 29.19% 28.84% 12.37%
Best quarter: Q4 '98, 24.17% Worst quarter: Q3 '98, -12.75%
- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/99
- --------------------------------------------------------------------------------
Life of Life of Life of
1 year 5 year Class A Class B Class C
Class A - began 6/10/91 6.74% 24.21% 17.50% -- --
Class B - began 9/7/95 6.59% -- -- 22.07% --
Class C - began 5/1/98 10.59% -- -- -- 12.74%
Index 21.03% 28.54% 19.80% 26.58% 19.84%
Index: Standard & Poor's 500 Stock Index, an unmanaged index of 500 stocks.
6
<PAGE>
MAIN RISKS
[Clip Art] The value of your investment will go up and down in response to stock
market movements.
Large-capitalization stocks as a group could fall out of favor with the market,
causing the fund to underperform funds that focus on small- or
medium-capitalization stocks.
The fund's management strategy has a significant influence on fund performance.
If the investment research team's earnings estimates or projections turn out to
be inaccurate, or if the proprietary computer models do not perform as expected,
the fund could underperform its peers or lose money.
To the extent that the fund makes investments with additional risks, those risks
could increase volatility or reduce performance:
o Certain derivatives could produce disproportionate losses.
o In a down market, higher-risk securities and derivatives could become harder
to value or to sell at a fair price.
o Foreign investments carry additional risks, including potentially inadequate
or inaccurate financial information and social or political instability.
================================================================================
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly.
- --------------------------------------------------------------------------------
Shareholder transaction expenses(1) Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price,
whichever is less none(2) 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.34% 0.34% 0.34%
Total fund operating expenses 1.39% 2.09% 2.09%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- --------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A $634 $918 $1,222 $2,085
Class B - with redemption $712 $955 $1,324 $2,242
- without redemption $212 $655 $1,124 $2,242
Class C - with redemption $312 $655 $1,124 $2,421
- without redemption $212 $655 $1,124 $2,421
(1) A $4.00 fee may be charged for wire redemptions.
(2) Except for investments of $1 million or more; see "How sales charges are
calculated."
FUND CODES
Class A
- ---------------------------------------
Ticker JHDCX
CUSIP 409902707
Newspaper CoreEqA
SEC number 811-1677
JH fund number 25
Class B
- ---------------------------------------
Ticker JHIDX
CUSIP 409902806
Newspaper CoreEqB
SEC number 811-1677
JH fund number 125
Class C
- ---------------------------------------
Ticker JHCEX
CUSIP 409902863
Newspaper CoreEqC
SEC number 811-1677
JH fund number 525
7
<PAGE>
Core Growth Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks above-average total return. To pursue this goal, the
fund invests in a diversified portfolio of primarily large-capitalization stocks
and emphasizes stocks of companies with relatively high potential long-term
earnings growth. The portfolio's risk profile is substantially similar to that
of the Russell 1000 Growth Index.
The managers select from a menu of stocks of approximately 550 companies that
evolves over time. Approximately 40% to 50% of these companies also are included
in the Russell 1000 Growth Index. The subadviser's investment research team is
organized by industry and tracks these companies to develop earnings estimates
and five-year projections for growth. A series of proprietary computer models
use this in-house research to rank the stocks according to their combination of:
o value, meaning they appear to be underpriced
o momentum, meaning they show potential for strong growth
This process, together with a risk/return analysis against the Russell 1000
Growth Index, results in a portfolio of approximately 100 to 130 of the stocks
from the top 60% of the menu. The fund generally sells stocks that fall into the
bottom 20% of the menu.
In normal market conditions, the fund is almost entirely invested in stocks. The
fund may, however, invest in certain other types of equity securities, including
dollar-denominated foreign securities.
In abnormal market conditions, the fund may temporarily invest more than 35% of
assets in investment-grade short-term securities. In these and other cases, the
fund might not achieve its goal.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
================================================================================
SUBADVISER
Independence Investment
Associates, Inc.
- ---------------------------------------
Team responsible for day-to-day
investment management
A subsidiary of John Hancock Financial
Services, Inc.
Founded in 1982
Supervised by the adviser
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks. The year-by-year and average annual figures are for Class I
shares, which are offered in a separate prospectus. Annual returns should be
substantially similar since all classes invest in the same portfolio. However,
Class I shares' average annual figures do not reflect sales charges or 12b-1
fees which were imposed beginning July 1, 1999 for Class A, B and C shares.
Year-by-year, average annual and index figures do not reflect these charges and
would be lower if they did. All figures assume dividend reinvestment. Past
performance does not indicate future results.
- --------------------------------------------------------------------------------
Class I year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------
1996 1997 1998 1999
20.52% 36.22% 37.94% 20.00%
Best quarter: Q4 '98, 27.44% Worst quarter: Q3 '98, -12.00%
- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/99
- --------------------------------------------------------------------------------
Life of
1 year Class I
Class I - began 10/2/95 20.00% 27.96%
Class A - began 7/1/99 -- --
Class B - began 7/1/99 -- --
Class C - began 7/1/99 -- --
Index 33.16% 30.53%
Index: Russell 1000 Growth Index, an unmanaged index of growth stocks in the
Russell 1000 Index of the 1,000 largest-capitalization U.S. stocks.
8
<PAGE>
MAIN RISKS
[Clip Art] The value of your investment will go up and down in response to stock
market movements.
Large-capitalization stocks as a group could fall out of favor with the market,
causing the fund to underperform funds that focus on small- or
medium-capitalization stocks. Similarly, growth stocks could underperform value
stocks.
The fund's management strategy has a significant influence on fund performance.
If the investment research team's earnings estimates or projections turn out to
be inaccurate, or if the proprietary computer models do not perform as expected,
the fund could underperform its peers or lose money.
To the extent that the fund makes investments with additional risks, those risks
could increase volatility or reduce performance:
o Foreign investments carry additional risks, including potentially inadequate
or inaccurate financial information and social or political instability.
================================================================================
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly. Class A expense figures below show the expenses for the past year
adjusted to reflect any changes.
- --------------------------------------------------------------------------------
Shareholder transaction expenses(1) Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
(as a % of purchase or sales price,
whichever is less) none(2) 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 1.18% 1.18% 1.18%
Total fund operating expenses 2.28% 2.98% 2.98%
Expense reimbursement (at least until 7/1/00) 1.03% 1.03% 1.03%
Net annual operating expenses 1.25% 1.95% 1.95%
The hypothetical example below shows what your expenses would be after the
expense reimbursement (first year only) if you invested $10,000 over the time
frames indicated, assuming you reinvested all distributions and that the average
annual return was 5%. The example is for comparison only, and does not represent
the fund's actual expenses and returns, either past or future.
- --------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A $621 $1,152 $1,708 $3,218
Class B - with redemption $698 $1,196 $1,817 $3,368
- without redemption $198 $ 896 $1,617 $3,368
Class C - with redemption $298 $ 896 $1,617 $3,529
- without redemption $198 $ 896 $1,617 $3,529
(1) A $4.00 fee may be charged for wire redemptions.
(2) Except for investments of $1 million or more; see "How sales charges are
calculated."
FUND CODES
Class A
- ---------------------------------------
Ticker JACGX
CUSIP 410132849
Newspaper CoreGrA
SEC number 811-8852
JH fund number 79
Class B
- ---------------------------------------
Ticker JBCGX
CUSIP 410132831
Newspaper CoreGrB
SEC number 811-8852
JH fund number 179
Class C
- ---------------------------------------
Ticker --
CUSIP 410132823
Newspaper --
SEC number 811-8852
JH fund number 579
9
<PAGE>
Core Value Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks above-average total return. To pursue this goal, the
fund invests in a diversified portfolio of primarily large-capitalization stocks
and emphasizes relatively undervalued stocks and high dividend yields. The
portfolio's risk profile is substantially similar to that of the Russell 1000
Value Index.
The managers select from a menu of stocks of approximately 550 companies that
evolves over time. Approximately 50% to 60% of these companies also are included
in the Russell 1000 Value Index. The subadviser's investment research team is
organized by industry and tracks these companies to develop earnings estimates
and five-year projections for growth. A series of proprietary computer models
use this in-house research to rank the stocks according to their combination of:
o value, meaning they appear to be underpriced
o momentum, meaning they show potential for strong growth
This process, together with a risk/return analysis against the Russell 1000
Value Index, results in a portfolio of approximately 100 to 130 of the stocks
from the top 60% of the menu. The fund generally sells stocks that fall into the
bottom 20% of the menu.
In normal market conditions, the fund is almost entirely invested in stocks. The
fund may, however, invest in certain other types of equity securities, including
dollar-denominated foreign securities.
In abnormal market conditions, the fund may temporarily invest more than 35% of
assets in investment-grade short-term securities. In these and other cases, the
fund might not achieve its goal.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
================================================================================
SUBADVISER
Independence Investment
Associates, Inc.
- ---------------------------------------
Team responsible for day-to-day
investment management
A subsidiary of John Hancock Financial
Services, Inc.
Founded in 1982
Supervised by the adviser
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks. Class A average annual figures reflect sales charges.
Year-by-year and index figures do not reflect these charges and would be lower
if they did. In addition, 12b-1 fees will be imposed beginning July 1, 2000 for
Class A shares and would result in lower returns if reflected in these figures.
All figures assume dividend reinvestment. Past performance does not indicate
future results.
- --------------------------------------------------------------------------------
Class A year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------
1996 1997 1998 1999
20.66% 30.63% 18.79% 4.65%
Best quarter: Q4 '98, 18.79% Worst quarter: Q3 '98, -13.99%
- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/99
- --------------------------------------------------------------------------------
Life of
1 year Class A
Class A - began 10/2/95 -0.60% 17.80%
Class B - began 7/1/99 -- --
Class C - began 7/1/99 -- --
Index 7.35% 20.09%
Index: Russell 1000 Value Index, an unmanaged index of value stocks in the
Russell 1000 Index of the 1,000 largest-capitalization U.S. stocks.
10
<PAGE>
MAIN RISKS
[Clip Art] The value of your investment will go up and down in response to stock
market movements.
Large-capitalization stocks as a group could fall out of favor with the market,
causing the fund to underperform funds that focus on small- or
medium-capitalization stocks. Similarly, value stocks could underperform growth
stocks.
The fund's management strategy has a significant influence on fund performance.
If the investment research team's earnings estimates or projections turn out to
be inaccurate, or if the proprietary computer models do not perform as expected,
the fund could underperform its peers or lose money.
To the extent that the fund makes investments with additional risks, those risks
could increase volatility or reduce performance:
o Foreign investments carry additional risks, including potentially inadequate
or inaccurate financial information and social or political instability.
================================================================================
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly. Class A expense figures below show the expenses for the past year,
adjusted to reflect any changes.
- --------------------------------------------------------------------------------
Shareholder transaction expenses(1) Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
(as a % of purchase or sales price,
whichever is less) none(2) 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 1.08% 1.08% 1.08%
Total fund operating expenses 2.18% 2.88% 2.88%
Distribution and service (12b-1) fee
reduction (until 7/1/00) 0.30% -- --
Expense reimbursement (at least until 7/1/00) 0.93% 0.93% 0.93%
Net annual operating expenses 0.95% 1.95% 1.95%
The hypothetical example below shows what your expenses would be after the fee
reduction and expense reimbursement (first year only) if you invested $10,000
over the time frames indicated, assuming you reinvested all distributions and
that the average annual return was 5%. The example is for comparison only, and
does not represent the fund's actual expenses and returns, either past or
future.
- --------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A $592 $1,105 $1,643 $3,109
Class B - with redemption $698 $1,176 $1,777 $3,281
- without redemption $198 $ 876 $1,577 $3,281
Class C - with redemption $298 $ 876 $1,577 $3,443
- without redemption $198 $ 876 $1,577 $3,443
(1) A $4.00 fee may be charged for wire redemptions.
(2) Except for investments of $1 million or more; see "How sales charges are
calculated."
FUND CODES
Class A
- ---------------------------------------
Ticker JHIVX
CUSIP 410132807
Newspaper --
SEC number 811-8852
JH fund number 88
Class B
- ---------------------------------------
Ticker --
CUSIP 410132815
Newspaper --
SEC number 811-8852
JH fund number 188
Class C
- ---------------------------------------
Ticker --
CUSIP 410132799
Newspaper --
SEC number 811-8852
JH fund number 588
11
<PAGE>
Large Cap Growth Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks long-term capital appreciation. To pursue this goal,
the fund normally invests at least 65% of assets in stocks of
large-capitalization companies (companies in the capitalization range of the S&P
500 Index, which was $369 million to $503.86 billion as of January 31, 2000).
In choosing individual stocks, the managers use fundamental financial analysis
to identify companies with:
o strong cash flows
o secure market franchises
o sales growth that outpaces their industries
The fund generally invests in 30 to 60 U.S. companies that are diversified
across sectors. The fund has tended to emphasize, or overweight, certain sectors
such as health care, technology or consumer goods. These weightings may change
in the future.
The management team uses various means to assess the depth and stability of
companies' senior management, including interviews and company visits. The fund
favors companies for which the managers project an above average growth rate.
The fund may invest in preferred stocks and other types of equities, and may
invest up to 15% of assets in foreign securities. The fund may also make limited
use of certain derivatives (investments whose value is based on indices,
securities or currencies).
In abnormal market conditions, the fund may temporarily invest extensively in
investment-grade short-term securities. In these and other cases, the fund might
not achieve its goal.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
================================================================================
PORTFOLIO MANAGER
Team responsible for day-to-day
investment management
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks. The average annual figures reflect sales charges; the
year-by-year and index figures do not, and would be lower if they did. All
figures assume dividend reinvestment. Past performance does not indicate future
results.
- --------------------------------------------------------------------------------
Class A year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- -8.34% 41.68% 6.06% 13.03% -7.50% 27.17% 20.40% 16.70% 26.42% 20.52%
Best quarter: Q4 '98, 22.38% Worst quarter: Q3 '90, -18.75%
- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/99
- --------------------------------------------------------------------------------
Life of Life of
1 year 5 year 10 year Class B Class C
Class A 14.48% 20.93% 14.02% -- --
Class B - began 1/3/94 14.73% 21.11% -- 16.08% --
Class C - began 6/1/98 18.69% -- -- -- 23.26%
Index 21.03% 28.54% 18.19% 23.55% 22.32%
Index: Standard & Poor's 500 Stock Index, an unmanaged index of 500 stocks.
12
<PAGE>
MAIN RISKS
[Clip Art] The value of your investment will go up and down in response to stock
market movements.
The fund's management strategy has a significant influence on fund performance.
Large-capitalization stocks as a group could fall out of favor with the market,
causing the fund to underperform investments that focus on small- or
medium-capitalization stocks. Similarly, growth stocks could underperform value
stocks. To the extent the fund invests in a given industry, its performance will
be hurt if that industry performs poorly. In addition, if the managers' security
selection strategies do not perform as expected, the fund could underperform its
peers or lose money.
To the extent that the fund makes investments with additional risks, these risks
could increase volatility or reduce performance:
o Certain derivatives could produce disproportionate losses.
o In a down market, higher risk securities and derivatives could become harder
to value or to sell at a fair price.
o Foreign investments carry additional risks, including potentially unfavorable
currency exchange rates, inadequate or inaccurate financial information and
social or political instability.
================================================================================
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly.
- --------------------------------------------------------------------------------
Shareholder transaction expenses(1) Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price,
whichever is less none(2) 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.30% 0.30% 0.30%
Total fund operating expenses 1.35% 2.05% 2.05%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- --------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A $631 $906 $1,202 $2,043
Class B - with redemption $708 $943 $1,303 $2,200
- without redemption $208 $643 $1,103 $2,200
Class C - with redemption $308 $643 $1,103 $2,379
- without redemption $208 $643 $1,103 $2,379
(1) A $4.00 fee may be charged for wire redemptions.
(2) Except for investments of $1 million or more; see "How sales charges are
calculated."
FUND CODES
Class A
- ---------------------------------------
Ticker JHNGX
CUSIP 409906302
Newspaper LpCpGrA
SEC number 811-4630
JH fund number 20
Class B
- ---------------------------------------
Ticker JHGBX
CUSIP 409906401
Newspaper LpCpGrB
SEC number 811-4630
JH fund number 120
Class C
- ---------------------------------------
Ticker --
CUSIP 409906849
Newspaper --
SEC number 811-4630
JH fund number 520
13
<PAGE>
Large Cap Value Fund
GOAL AND STRATEGY
[Clip Art] 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 securities. Although the fund may concentrate in any of these asset
classes, under normal circumstances it invests primarily in stocks.
In managing the portfolio, the manager emphasizes a value-oriented approach to
individual stock selection. With the aid of proprietary financial models, the
management team looks for companies that are selling at what appear to be
substantial discounts to their long-term intrinsic and "franchise" values. These
companies often have identifiable catalysts for growth, such as new products,
business reorganizations or mergers.
The fund manages risk by typically holding between 50 and 150 large companies
that are diversified across industry sectors. The management team also uses
fundamental financial analysis to identify individual companies with substantial
cash flows, reliable revenue streams, superior competitive positions and strong
management.
The fund may attempt to take advantage of short-term market volatility by
investing in corporate restructurings or pending acquisitions.
In selecting bonds of any maturity, the manager looks for the most favorable
risk/return ratios. The fund may invest up to 15% of net assets in junk bonds
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). The fund may also make limited use of certain
derivatives (investments whose value is based on indices, securities or
currencies).
In abnormal market conditions, the fund may temporarily invest extensively in
investment-grade short-term securities. In these and other cases, the fund might
not achieve its goal.
================================================================================
PORTFOLIO MANAGER
Timothy E. Keefe, CFA
- ---------------------------------------
Senior vice president of adviser
Joined team in 1996
Joined adviser in 1996
Began career in 1987
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks. The average annual figures reflect sales charges; the
year-by-year and index figures do not, and would be lower if they did. All
figures assume dividend reinvestment. Past performance does not indicate future
results.
- --------------------------------------------------------------------------------
Class A year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- -0.44% 32.29% 6.02% 9.74% -8.49% 36.74% 22.21% 36.71% 15.94% 37.89%
Best quarter: Q4 '99, 31.65% Worst quarter: Q3 '98, -12.94%
- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/99
- --------------------------------------------------------------------------------
Life of Life of
1 year 5 year 10 year Class B Class C
Class A 30.99% 28.25% 17.15% -- --
Class B - began 8/22/91 31.95% 28.49% -- 18.21% --
Class C - began 5/1/98 35.94% -- -- -- 21.33%
Index 21.03% 28.54% 18.19% 19.73% 19.84%
Index: Standard & Poor's 500 Stock Index, an unmanaged index of 500 stocks.
14
<PAGE>
MAIN RISKS
[Clip Art] The value of your investment will go up and down in response to stock
and bond market movements.
The fund's management strategy has a significant influence on fund performance.
Large-capitalization stocks as a group could fall out of favor with the market,
causing the fund to underperform investments that focus on small- or
medium-capitalization stocks. Similarly, value stocks could underperform growth
stocks. In addition, if the manager's securities selection strategies do not
perform as expected, the fund could underperform its peers or lose money.
To the extent that the fund makes investments with additional risks, those risks
could increase volatility or reduce performance:
o Certain derivatives could produce disproportionate losses.
o In a down market, higher-risk securities and derivatives could become harder
to value or to sell at a fair price.
o Foreign investments carry additional risks, including potentially unfavorable
currency exchange rates, inadequate or inaccurate financial information and
social or political instability.
o Any bonds held by the fund could be downgraded in credit rating or go into
default. Bond prices generally fall when interest rates rise and longer
maturity will increase volatility. Junk bond prices can fall on bad news
about the economy, an industry or a company.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
================================================================================
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly.
- --------------------------------------------------------------------------------
Shareholder transaction expenses(1) Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred s ales charge (load)
as a % of purchase or sale price,
whichever is less none(2) 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee 0.625% 0.625% 0.625%
Distribution and service (12b-1) fees 0.25% 1.00% 1.00%
Other expenses 0.305% 0.305% 0.305%
Total fund operating expenses 1.180% 1.930% 1.930%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- --------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A $614 $855 $1,117 $1,860
Class B - with redemption $696 $906 $1,242 $2,059
- without redemption $196 $606 $1,042 $2,059
Class C - with redemption $296 $606 $1,042 $2,254
- without redemption $196 $606 $1,042 $2,254
(1) A $4.00 fee may be charged for wire redemptions.
(2) Except for investments of $1 million or more; see "How sales charges are
calculated."
FUND CODES
Class A
- ---------------------------------------
Ticker TAGRX
CUSIP 41013P103
Newspaper LgCpVIA
SEC number 811-0560
JH fund number 50
Class B
- ---------------------------------------
Ticker TSGWX
CUSIP 41013P202
Newspaper LgCpVIB
SEC number 811-0560
JH fund number 150
Class C
- ---------------------------------------
Ticker JHLVX
CUSIP 41013P301
Newspaper LgCpVIC
SEC number 811-0560
JH fund number 550
15
<PAGE>
Mid Cap Growth Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks long-term capital appreciation. To pursue this goal,
the fund normally invests at least 80% of assets in stocks of
medium-capitalization companies (companies in the capitalization range of the
Russell Midcap Growth Index, which was $230 million to $46.13 billion as of
January 31, 2000).
The manager conducts fundamental financial analysis to identify companies with
above average earnings growth.
In choosing individual securities, the manager looks for companies with growth
stemming from a combination of gains in market share and increasing operating
efficiency. Before investing, the manager identifies a specific catalyst for
growth, such as a new product, business reorganization or merger.
The management team generally maintains personal contact with the senior
management of the companies the fund invests in.
The manager considers broad economic trends, demographic factors, technological
changes, consolidation trends and legislative initiatives.
The fund generally invests in more than 100 companies. The fund may not invest
more than 5% of assets in any one security.
The fund may invest up to 10% of assets in foreign securities. The fund may also
make limited use of certain derivatives (investments whose value is based on
indices or currencies).
In abnormal conditions, the fund may temporarily invest in U.S. government
securities with maturities of up to three years and more than 10% of assets in
cash or cash equivalents. In these and other cases, the fund might not achieve
its goal.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
================================================================================
PORTFOLIO MANAGER
Barbara C. Friedman, CFA
- ---------------------------------------
Senior vice president of adviser
Joined team in 1998
Joined adviser in 1998
Began career in 1973
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with broad-based market
indices for reference). This information may help provide an indication of the
fund's risks. The average annual figures reflect sales charges; the year-by-year
and index figures do not, and would be lower if they did. All figures assume
dividend reinvestment. Past performance does not indicate future results.
- --------------------------------------------------------------------------------
Class A year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
-8.76% 34.24% 29.05% 2.37% 6.53% 58.17%
Best quarter: Q4 '98, 22.66% Worst quarter: Q3 '98, -21.36%
- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/99
- --------------------------------------------------------------------------------
Life of Life of Life of
1 year 5 year Class A Class B Class C
Class A - began 11/1/93 50.24% 23.19% 16.58% -- --
Class B - began 11/1/93 52.21% 23.44% -- 16.75% --
Class C - began 6/1/98 56.11% -- -- -- 34.27%
Index 1 21.03% 28.54% 23.07% 23.07% 22.32%
Index 2 18.23% 21.86% 17.21% 17.21% 36.63%
Index 1: Standard & Poor's 500 Stock Index, an unmanaged index of 500 stocks.
Index 2: Russell Midcap Growth Index, an unmanaged index containing those stocks
from the Russell Midcap Index with a greater-than-average growth orientation.
16
<PAGE>
MAIN RISKS
[Clip Art] The value of your investment will go up and down in response to stock
market movements.
The fund's management strategy has a significant influence on fund performance.
Medium-capitalization stocks tend to be more volatile than stocks of larger
companies, and as a group could fall out of favor with the market, causing the
fund to underperform investments that focus either on small- or on
large-capitalization stocks. Similarly, growth stocks could underperform value
stocks. To the extent the fund invests in a given industry, its performance will
be hurt if that industry performs poorly. In addition, if the manager's security
selection strategies do not perform as expected, the fund could underperform its
peers or lose money.
To the extent that the fund makes investments with additional risks, these risks
could increase volatility or reduce performance:
o Certain derivatives could produce disproportionate losses.
o In a down market, higher risk securities and derivatives could become harder
to value or to sell at a fair price.
o Foreign investments carry additional risks, including potentially unfavorable
currency exchange rates, inadequate or inaccurate financial information and
social or political instability.
================================================================================
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly.
- --------------------------------------------------------------------------------
Shareholder transaction expenses(1) Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price,
whichever is less none(2) 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.50% 0.50% 0.50%
Total fund operating expenses 1.60% 2.30% 2.30%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- --------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A $655 $ 980 $1,327 $2,305
Class B - with redemption $733 $1,018 $1,430 $2,461
- without redemption $233 $ 718 $1,230 $2,461
Class C - with redemption $333 $ 718 $1,230 $2,636
- without redemption $233 $ 718 $1,230 $2,636
(1) A $4.00 fee may be charged for wire redemptions.
(2) Except for investments of $1 million or more; see "How sales charges are
calculated."
FUND CODES
Class A
- ---------------------------------------
Ticker SPOAX
CUSIP 409906807
Newspaper MdCpGrA
SEC number 811-4630
JH fund number 39
Class B
- ---------------------------------------
Ticker SPOBX
CUSIP 409906880
Newspaper MdCpGrB
SEC number 811-4630
JH fund number 139
Class C
- ---------------------------------------
Ticker --
CUSIP 409906823
Newspaper --
SEC number 811-4630
JH fund number 539
17
<PAGE>
Small Cap Growth Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks long-term capital appreciation. To pursue this goal,
the fund normally invests at least 80% of assets in stocks of
small-capitalization companies (companies in the capitalization range of the
Russell 2000 Growth Index, which was $34 million to $10.71 billion as of January
31, 2000).
The managers look for companies in the emerging growth phase of development that
are not yet widely recognized. The fund also may invest in established companies
that, because of new management, products or opportunities, offer the
possibility of accelerating earnings.
To manage risk, the fund typically invests in 150 to 220 companies across many
industries, and does not invest more than 5% of assets in any one company.
In choosing individual securities, the managers use fundamental financial
analysis to identify rapidly growing companies. The managers favor companies
that dominate their market niches or are poised to become market leaders. They
look for strong senior management teams and coherent business strategies. They
generally maintain personal contact with the senior management of the companies
the fund invests in.
The fund may invest in preferred stocks and other types of equities, and may
invest up to 10% of assets in foreign securities. The fund may also make limited
use of certain derivatives (investments whose value is based on indices or
currencies).
In abnormal conditions, the fund may temporarily invest in U.S. government
securities with maturities of up to three years and more than 10% of assets in
cash and cash equivalents. In these and other cases, the fund might not achieve
its goal.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
================================================================================
PORTFOLIO MANAGERS
Bernice S. Behar, CFA
- ---------------------------------------
Senior vice president of adviser
Joined team in 1996
Joined adviser in 1991
Began career in 1986
Laura J. Allen, CFA
- ---------------------------------------
Senior vice president of adviser
Joined team in 1998
Joined adviser in 1998
Began career in 1981
Anurag Pandit, CFA
- ---------------------------------------
Vice president of adviser
Joined team in 1996
Joined adviser in 1996
Began career in 1984
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with broad-based market
indices for reference). This information may help provide an indication of the
fund's risks. The average annual figures reflect sales charges; the year-by-year
and index figures do not, and would be lower if they did. All figures assume
dividend reinvestment. Past performance does not indicate future results.
- --------------------------------------------------------------------------------
Class B year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
- -1.15% 58.82% 12.13% 11.82% -1.49% 42.13% 12.95% 14.45% 11.65% 63.62%
Best quarter: Q4 '99, 43.58% Worst quarter: Q3 '90, -23.09%
- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/99
- --------------------------------------------------------------------------------
Life of Life of
1 year 5 year 10 year Class A Class C
Class A - began 8/22/91 56.65% 27.03% -- 20.50% --
Class B 58.62% 27.25% 20.60% -- --
Class C - began 6/1/98 62.59% -- -- -- 45.00%
Index 1 21.26% 16.69% 13.40% 15.19% 7.92%
Index 2 43.09% 18.99% 13.51% 14.65% 22.94%
Index 1: Russell 2000 Index, an unmanaged index of 2,000 U.S.
small-capitalization stocks.
Index 2: Russell 2000 Growth Index, an unmanaged index containing those stocks
from the Russell 2000 Index with a greater-than-average growth orientation.
18
<PAGE>
MAIN RISKS
[Clip Art] The value of your investment will go up and down in response to stock
market movements.
The fund's management strategy has a significant influence on fund performance.
Small-capitalization stocks as a group could fall out of favor with the market,
causing the fund to underperform investments that focus on medium- or large-
capitalization stocks. Similarly, growth stocks could underperform value stocks.
To the extent the fund invests in a given industry, its performance will be hurt
if that industry performs poorly. In addition, if the managers' security
selection strategies do not perform as expected, the fund could underperform its
peers or lose money.
Stocks of smaller companies are more volatile than stocks of larger companies.
Many smaller companies have short track records, narrow product lines or niche
markets, making them highly vulnerable to isolated business setbacks.
To the extent that the fund makes investments with additional risks, these risks
could increase volatility or reduce performance:
o Certain derivatives could produce disproportionate losses.
o In a down market, higher risk securities and derivatives could become harder
to value or to sell at a fair price; this risk could also affect
small-capitalization stocks, especially those with low trading volumes.
o Foreign investments carry additional risks, including potentially unfavorable
currency exchange rates, inadequate or inaccurate financial information and
social or political instability.
================================================================================
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly.
- --------------------------------------------------------------------------------
Shareholder transaction expenses(1) Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred s ales charge (load)
as a % of purchase or sale price,
whichever is less none(2) 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees 0.25% 1.00% 1.00%
Other expenses 0.34% 0.34% 0.34%
Total fund operating expenses 1.34% 2.09% 2.09%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- --------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A $630 $903 $1,197 $2,032
Class B - with redemption $712 $955 $1,324 $2,229
- without redemption $212 $655 $1,124 $2,229
Class C - with redemption $312 $655 $1,124 $2,421
- without redemption $212 $655 $1,124 $2,421
(1) A $4.00 fee may be charged for wire redemptions.
(2) Except for investments of $1 million or more; see "How sales charges are
calculated."
FUND CODES
Class A
- ---------------------------------------
Ticker TAEMX
CUSIP 478032105
Newspaper SmCpGrA
SEC number 811-3392
JH fund number 60
Class B
- ---------------------------------------
Ticker TSEGX
CUSIP 478032204
Newspaper SmCpGrB
SEC number 811-3392
JH fund number 160
Class C
- ---------------------------------------
Ticker --
CUSIP 478032501
Newspaper --
SEC number 811-3392
JH fund number 560
19
<PAGE>
Small Cap Value Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks capital appreciation. To pursue this goal, the fund
normally invests at least 80% of assets in stocks of small-capitalization
companies (companies in the capitalization range of the Russell 2000 Index,
which was $34 million to $10.71 billion as of January 31, 2000).
In managing the portfolio, the manager emphasizes a value-oriented approach to
individual stock selection. With the aid of proprietary financial models, the
management team looks for U.S. and foreign companies that are selling at what
appear to be substantial discounts to their long-term value. These companies
often have identifiable catalysts for growth, such as new products, business
reorganizations or mergers.
The management team uses fundamental financial analysis of individual companies
to identify those with substantial cash flows, reliable revenue streams and
strong competitive positions. The strength of companies' management teams is
also a key selection factor. The fund diversifies across industry sectors. The
fund may not invest more than 5% of assets in any one security.
The fund may invest up to 15% of assets in a basket of foreign securities or in
bonds of any maturity rated as low as CC/Ca and their unrated equivalents (bonds
below BBB/Baa are considered junk bonds). The fund may make limited use of
certain derivatives (investments whose value is based on indices or currencies).
Under normal conditions, the fund may not invest more than 10% of assets in cash
or cash equivalents.
In abnormal market conditions, the fund may temporarily invest extensively in
investment-grade short-term securities. In these and other cases, the fund might
not achieve its goal.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
================================================================================
PORTFOLIO MANAGER
Timothy E. Keefe, CFA
- ---------------------------------------
Senior vice president of adviser
Joined team in 1996
Joined adviser in 1996
Began career in 1987
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks. The average annual figures reflect sales charges; the
year-by-year and index figures do not, and would be lower if they did. All
figures assume dividend reinvestment. Past performance does not indicate future
results.
- --------------------------------------------------------------------------------
Class A year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------
1994 1995 1996 1997 1998 1999
7.81% 20.26% 12.91% 25.25% -2.10% 98.25%
Best quarter: Q4 '99, 47.75% Worst quarter: Q3 '98, -21.43%
- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/99
- --------------------------------------------------------------------------------
Life to Life to Life to
1 year 5 year Class A Class B Class C
Class A - began 1/3/94 88.27% 25.69% 22.54% -- --
Class B - began 1/3/94 92.03% 25.90% -- 22.67% --
Class C - began 5/1/98 95.94% -- -- -- 39.67%
Index 21.26% 16.69% 13.39% 13.39% 4.00%
Index: Russell 2000 Index, an unmanaged index of 2,000 U.S. small-capitalization
stocks.
20
<PAGE>
MAIN RISKS
[Clip Art] The value of your investment will go up and down in response to stock
market movements.
The fund's management strategy has a significant influence on fund performance.
Small-capitalization stocks as a group could fall out of favor with the market,
causing the fund to underperform investments that focus on medium- or
large-capitalization stocks. Similarly, value stocks could underperform growth
stocks. To the extent the fund invests in a given industry, its performance will
be hurt if that industry performs poorly. In addition, if the manager's security
selection strategies do not perform as expected, the fund could underperform its
peers or lose money.
Stocks of smaller companies are more volatile than stocks of larger companies.
Many smaller companies have short track records, narrow product lines or niche
markets, making them highly vulnerable to isolated business setbacks.
To the extent that the fund makes investments with additional risks, these risks
could increase volatility or reduce performance:
o Certain derivatives could produce disproportionate losses.
o In a down market, higher risk securities and derivatives could become harder
to value or to sell at a fair price; this risk could also affect
small-capitalization stocks, especially those with low trading volumes.
o Foreign investments carry additional risks, including potentially unfavorable
currency exchange rates, inadequate or inaccurate financial information and
social or political instability.
o Any bonds held by the fund could be downgraded in credit quality or go into
default. In addition, bond prices generally fall when interest rates rise;
this risk is greater for longer maturity bonds. Junk bond prices can fall on
bad news about the issuer, an industry or the economy in general.
================================================================================
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly.
- --------------------------------------------------------------------------------
Shareholder transaction expenses(1) Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price,
whichever is less none(2) 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee 0.70% 0.70% 0.70%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.54% 0.54% 0.54%
Total fund operating expenses 1.54% 2.24% 2.24%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- --------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A $649 $ 962 $1,297 $2,243
Class B - with redemption $727 $1,000 $1,400 $2,399
- without redemption $227 $ 700 $1,200 $2,399
Class C - with redemption $327 $ 700 $1,200 $2,575
- without redemption $227 $ 700 $1,200 $2,575
(1) A $4.00 fee may be charged for wire redemptions.
(2) Except for investments of $1 million or more; see "How sales charges are
calculated."
FUND CODES
Class A
- ---------------------------------------
Ticker SPVAX
CUSIP 409905700
Newspaper SmCpVlA
SEC number 811-3999
JH fund number 37
Class B
- ---------------------------------------
Ticker SPVBX
CUSIP 409905809
Newspaper SmCpVlB
SEC number 811-3999
JH fund number 137
Class C
- ---------------------------------------
Ticker --
CUSIP 409905882
Newspaper --
SEC number 811-3999
JH fund number 537
21
<PAGE>
Sovereign Investors Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks long-term growth of capital and income without
assuming undue market risks. To pursue these goals, the fund normally invests
most of its assets in a diversified portfolio of stocks, although it may respond
to market conditions by investing in other types of securities, such as bonds or
short-term securities.
All of the fund's stock investments are "dividend performers" -- companies whose
dividend payments have increased steadily for ten years. The managers use
fundamental financial analysis to identify individual companies with
high-quality income statements, substantial cash reserves and identifiable
catalysts for growth, which may be new products or benefits from industrywide
growth. The managers generally visit companies to evaluate the strength and
consistency of their management strategy. Finally, the managers look for stocks
that are reasonably priced relative to their earnings and industry.
Historically, companies that meet these criteria have tended to have large or
medium market capitalizations.
The fund may invest in bonds of any maturity, with up to 5% of assets in junk
bonds rated as low as C and their unrated equivalents.
The fund typically invests in U.S. companies but may invest in
dollar-denominated foreign securities. It may also make limited use of certain
derivatives (investments whose value is based on indices or securities).
In abnormal market conditions, the fund may temporarily invest extensively in
investment-grade short-term securities. In these and other cases, the fund might
not achieve its goal.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable distributions.
================================================================================
PORTFOLIO MANAGERS
John F. Snyder, III
- ---------------------------------------
Executive vice president of adviser
Joined team in 1983
Joined adviser in 1991
Began career in 1971
Barry H. Evans, CFA
- ---------------------------------------
Senior vice president of adviser
Joined team in 1996
Joined adviser in 1986
Began career in 1986
Peter M. Schofield, CFA
- ---------------------------------------
Vice president of adviser
Joined team in 1996
Joined adviser in 1996
Began career in 1984
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks. The average annual figures reflect sales charges; the
year-by-year and index figures do not, and would be lower if they did. All
figures assume dividend reinvestment. Past performance does not indicate future
results.
- --------------------------------------------------------------------------------
Class A year-by-year total returns -- calendar years
- --------------------------------------------------------------------------------
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
4.38% 30.48% 7.23% 5.71% -1.85% 29.15% 17.57% 29.14% 15.62% 5.91%
Best quarter: Q4 '98, 15.55% Worst quarter: Q3 '90, -9.03%
- --------------------------------------------------------------------------------
Average annual total returns -- for periods ending 12/31/99
- --------------------------------------------------------------------------------
Life of Life of
1 year 5 year 10 year Class B Class C
Class A 0.60% 17.93% 13.23% -- --
Class B - began 1/3/94 0.20% 18.06% -- 14.55% --
Class C - began 5/1/98 4.17% -- -- -- 6.24%
Index 21.03% 28.54% 18.19% 23.55% 19.84%
Index: Standard & Poor's 500 Stock Index, an unmanaged index of 500 stocks.
22
<PAGE>
MAIN RISKS
[Clip Art] The value of your investment will go up and down in response to stock
and bond market movements.
The fund's management strategy has a significant influence on fund performance.
Large- or medium-capitalization stocks as a group could fall out of favor with
the market, causing the fund to underperform funds that focus on
small-capitalization stocks. In addition, if the managers' securities selection
strategies do not perform as expected, the fund could underperform its peers or
lose money.
To the extent that the fund makes investments with additional risks, those risks
could increase volatility or reduce performance:
o Certain derivatives could produce disproportionate losses.
o In a down market, higher-risk securities and derivatives could become harder
to value or to sell at a fair price.
o Foreign investments carry additional risks, including inadequate or
inaccurate financial information and social or political instability.
o Any bonds held by the fund could be downgraded in credit rating or go into
default. Bond prices generally fall when interest rates rise and longer
maturity will increase volatility. Junk bond prices can fall on bad news
about the economy, an industry or a company.
================================================================================
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly.
- --------------------------------------------------------------------------------
Shareholder transaction expenses(1) Class A Class B Class C
- --------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price,
whichever is less none(2) 5.00% 1.00%
- --------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------
Management fee 0.54% 0.54% 0.54%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.21% 0.21% 0.21%
Total fund operating expenses 1.05% 1.75% 1.75%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- --------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A $602 $817 $1,050 $1,718
Class B - with redemption $678 $851 $1,149 $1,878
- without redemption $178 $551 $ 949 $1,878
Class C - with redemption $278 $551 $ 949 $2,062
- without redemption $178 $551 $ 949 $2,062
(1) A $4.00 fee may be charged for wire redemptions.
(2) Except for investments of $1 million or more; see "How sales charges are
calculated."
FUND CODES
Class A
- ---------------------------------------
Ticker SOVIX
CUSIP 47803P302
Newspaper SvInvA
SEC number 811-0560
JH fund number 29
Class B
- ---------------------------------------
Ticker SOVBX
CUSIP 47803P401
Newspaper SvInvB
SEC number 811-0560
JH fund number 129
Class C
- ---------------------------------------
Ticker SOVCX
CUSIP 47803P609
Newspaper --
SEC number 811-0560
JH fund number 529
23
<PAGE>
Your account
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Each share class has its own cost structure, including a Rule 12b-1 plan that
allows it to pay fees for the sale, distribution and service of its shares. Your
financial representative can help you decide which share class is best for you.
- --------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------
o Front-end sales charges, as described at right.
o Distribution and service (12b-1) fees of 0.30% (0.25% for Large Cap Value and
Small Cap Growth).
- --------------------------------------------------------------------------------
Class B
- --------------------------------------------------------------------------------
o No front-end sales charge; all your money goes to work for you right away.
o Distribution and service (12b-1) fees of 1.00%.
o A deferred sales charge, as described on following page.
o Automatic conversion to Class A shares after eight years, thus reducing
future annual expenses.
- --------------------------------------------------------------------------------
Class C
- --------------------------------------------------------------------------------
o No front-end sales charge; all your money goes to work for you right away.
o Distribution and service (12b-1) fees of 1.00%.
o A 1.00% contingent deferred sales charge on shares sold within one year of
purchase.
o No automatic conversion to Class A shares, so annual expenses continue at the
Class C level throughout the life of your investment.
For actual past expenses of each share class, see the fund-by-fund information
earlier in this prospectus.
Because 12b-1 fees are paid on an ongoing basis, they may cost share-holders
more than other types of sales charges.
Investors purchasing $1 million or more of Class B or Class C shares may want to
consider the lower operating expenses of Class A shares.
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).
Your broker or agent may charge you a fee to effect transactions in fund 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:
- --------------------------------------------------------------------------------
CDSC on $1 million+ investments
- --------------------------------------------------------------------------------
CDSC on shares
Your investment 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 first 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.
24 YOUR ACCOUNT
<PAGE>
Class B and Class C Shares are offered at their net asset value per share,
without any initial sales charge. However, you may be charged a CDSC on shares
you sell within a certain time after you bought them, as described in the tables
below. There is no CDSC on shares acquired through reinvestment of dividends.
The CDSC is based on the original purchase cost or the current market value of
the shares being sold, whichever is less. The CDSCs are as follows:
- --------------------------------------------------------------------------------
Class B deferred charges
- --------------------------------------------------------------------------------
CDSC on shares
Years after purchase 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 6th year none
- --------------------------------------------------------------------------------
Class C deferred charges
- --------------------------------------------------------------------------------
Years after purchase CDSC
1st year 1.00%
After 1st year none
For purposes of these CDSCs, all purchases made during a calendar month are
counted as having been made on the first day of that month.
CDSC calculations are based on the number of shares involved, not on the value
of your account. To keep your CDSC as low as possible, each time you place a
request to sell shares we will first sell any shares in your account that carry
no CDSC. If there are not enough of these to meet your request, we will sell
those shares that have the lowest CDSC.
- --------------------------------------------------------------------------------
SALES CHARGE REDUCTIONS AND WAIVERS
Reducing your Class A sales charges There are several ways you can combine
multiple purchases of Class A shares of John Hancock funds to take advantage of
the breakpoints in the sales charge schedule. The first three ways can be
combined in any manner.
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 calculate 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, 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 or 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 this 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
To utilize: if you think you may be eligible for a CDSC waiver, contact your
financial representative or Signature Services, or consult the SAI (see the back
cover of this prospectus).
YOUR ACCOUNT 25
<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 John Hancock insurance 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 (see the back cover of this prospectus).
- --------------------------------------------------------------------------------
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 have placed at least $2 billion
in John Hancock funds: $250
3 Complete the appropriate parts of the account application, carefully
following the instructions. You must submit additional documentation when
opening trust, corporate or power of attorney accounts. You must notify your
financial representative or Signature Services if this information changes.
For more details, please contact your financial representative or call
Signature Services at 1-800-225-5291.
4 Complete the appropriate parts of the account privileges 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.
26 YOUR ACCOUNT
<PAGE>
- --------------------------------------------------------------------------------
Buying shares
- --------------------------------------------------------------------------------
Opening an account Adding to an account
By check
[Clip Art] o Make out a check for the o Make out a check for the investment
investment amount, amount payable to "John Hancock
payable to "John Hancock Signature Services, Inc."
Signature Services,
Inc." o Fill out the detachable investment
slip from an account statement. If no
o Deliver the check and slip is available, include a note
your completed specifying the fund name, your share
application to your class, your account number and the
financial name(s) in which the account is
representative, or mail registered.
them to Signature
Services (address o Deliver the check and your investment
below). slip or note to your financial
representative, or mail them to
Signature Services (address below).
By exchange
[Clip Art] o Call your financial o Log on to www.jhfunds.com to process
representative or exchanges between funds.
Signature Services to
request an exchange. o Call EASI-Line for automated service
24 hours a day using your touch tone
phone at 1-800-338-8080.
o Call your financial representative or
Signature Services to request an
exchange.
By wire
[Clip Art] o Deliver your completed o Instruct your bank to wire the amount
application to your of your investment to:
financial First Signature Bank & Trust
representative, or mail Account # 900000260
it to Signature Routing # 211475000
Services.
Specify the fund name, your share
o Obtain your account class, your account number and the
number by calling your name(s) in which the account is
financial representative registered. Your bank may charge a fee
or Signature Services. to wire funds.
o Instruct your bank to
wire the amount of your
investment to:
First Signature Bank &
Trust
Account # 900000260
Routing # 211475000
Specify the fund name,
your choice of share
class, the new account
number and the name(s) in
which the account is
registered. Your bank may
charge a fee to wire
funds.
By Internet
[Clip Art] See "By exchange" and "By o Verify that your bank or credit union
wire." is a member of the Automated Clearing
House (ACH) system.
o Complete the "Bank Information"
section on your account application.
o Log on to www.jhfunds.com to initiate
purchases using your authorized bank
account.
By phone
[Clip Art] See "By exchange" and "By o Verify that your bank or credit union
wire." is a member of the Automated Clearing
House (ACH) system.
o Complete the "Bank Information"
section on your account application.
o Call EASI-Line for automated service
24 hours a day using your touch tone
phone at 1-800-338-8080.
o Call your financial representative or
Signature Services between 8 A.M. and
4 P.M. Eastern Time on most business
days.
- ----------------------------------------
Address:
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
Phone Number: 1-800-225-5291
Or contact your financial representative
for instructions and assistance.
- ----------------------------------------
To open or add to an account using the Monthly Automatic Accumulation Program,
see "Additional investor services."
YOUR ACCOUNT 27
<PAGE>
- --------------------------------------------------------------------------------
Selling shares
- --------------------------------------------------------------------------------
Designed for To sell some or all of your shares
By letter
[Clip Art] o Accounts of any type. o Write a letter of instruction or
complete a stock power indicating the
o Sales of any amount. 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 Internet
[Clip Art] o Most accounts. o Log on to www.jhfunds.com to initiate
redemptions from your funds.
o Sales of up to $100,000.
By phone
[Clip Art] o Most accounts. o Call EASI-Line for automated service
24 hours a day using your touch tone
o Sales of up to $100,000. phone at 1-800-338-8080.
o Call your financial representative or
Signature Services between 8 A.M. and
4 P.M. Eastern Time on most business
days.
By wire or electronic funds transfer (EFT)
[Clip Art] o Requests by letter to o To verify that the Internet or
sell any amount. telephone redemption privilege is in
place on an account, or to request
o Requests by internet or the form to add it to an existing
phone to sell up to account, call Signature Services.
$100,000.
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
[Clip Art] o Accounts of any type. o Obtain a current prospectus for the
fund into which you are exchanging by
o Sales of any amount. Internet or by calling your financial
representative or Signature Services.
o Log on to www.jhfunds.com to process
exchanges between your funds.
o Call EASI-Line for automated service
24 hours a day using your touch tone
phone at 1-800-338-8080.
o Call your financial representative or
Signature Services to request an
exchange.
To sell shares through a systematic withdrawal plan, see "Additional investor
services."
28 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 unless they were previously provided to Signature Services and are
still accurate. These items are 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)
You will need to obtain your signature guarantee from
a member of the Signature Guarantee Medallion Program. Most brokers and
securities dealers are members of this program. A notary public CANNOT provide a
signature guarantee.
- --------------------------------------------------------------------------------
Seller Requirements for written requests
- --------------------------------------------------------------------------------
[Clip Art]
Owners of individual, joint or o Letter of instruction.
UGMA/UTMA accounts (custodial accounts
for minors). o On the letter, the signatures 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, sole o Letter of instruction.
proprietorship, general partner or
association accounts. o Corporate business/organization
resolution, certified within the
past 12 months, or a John Hancock
Funds business/ organization
certification form.
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 Copy of the trust document certified
within the past 12 months or a John
Hancock Funds trust certification
form.
o Signature guarantee if applicable
(see above).
Joint tenancy shareholders with rights o Letter of instruction signed by
of survivorship whose co-tenants are surviving tenant.
deceased.
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,
certified within the past 12 months.
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.
- ----------------------------------------
Address:
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
Phone Number: 1-800-225-5291
Or contact your financial representative
for instructions and assistance.
- ----------------------------------------
YOUR ACCOUNT 29
<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). The funds use market prices in
valuing portfolio securities, but may use fair-value estimates if reliable
market prices are unavailable. The funds may also value securities at fair value
if the value of these securities has been materially affected by events
occurring after the close of a foreign market. Foreign stock or other portfolio
securities held by the funds may trade on U.S. holidays and weekends, even
though the funds' shares will not be priced on those days. This may change a
fund's NAV on days when you cannot buy or sell shares.
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 Signature Services receives your
request in good order.
At times of peak activity, it may be difficult to place requests by phone.
During these times, consider using EASI-Line, accessing www.jhfunds.com, 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. Also for your protection, telephone
redemption 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. However, if the new fund's CDSC rate is higher, then the rate will
increase. 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. Any capital gains are distributed annually. Balanced and
Sovereign Investors funds typically pay income dividends quarterly. Core Value
typically pays income dividends annually. The other funds do not usually pay
income dividends. Most of these dividends are from capital gains.
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
30 YOUR ACCOUNT
<PAGE>
you. However, if the check is not deliverable, your dividends will be
reinvested.
Taxability of dividends Dividends you receive from a fund, whether reinvested or
taken as cash, are generally considered taxable. Dividends from a fund's
short-term capital gains are taxable as ordinary income. Dividends from a fund's
long-term capital gains are taxable at a lower rate. Whether gains are
short-term or long-term depends on the fund's holding period. Some dividends
paid in January may be taxable as if they had been paid the previous December.
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.
Year 2000 compliance The adviser and the funds' service providers are taking
steps to address any year 2000-related computer problems. However, there is some
risk that these problems could disrupt the issuers in which the funds invest,
the funds' operations or financial markets generally.
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, Roth and Education IRAs, SIMPLE plans, SEPs, 401(k) plans
and other pension and profit-sharing plans. Using these plans, you can invest in
any John Hancock fund (except tax-free income funds) with a low minimum
investment of $250 or, for some group plans, no minimum investment at all. To
find out more, call Signature Services at 1-800-225-5291.
YOUR ACCOUNT 31
<PAGE>
Fund details
- --------------------------------------------------------------------------------
BUSINESS STRUCTURE
The diagram below shows the basic business structure used by the John Hancock
equity funds. Each fund's board of trustees oversees the fund's business
activities and retains the services of the various firms that carry out the
fund's operations.
The trustees of the Balanced, Core Growth, Core Value, Large Cap Value, Mid Cap
Growth and Small Cap Growth funds have the power to change these funds'
respective investment goals without shareholder approval.
Management fees The management fees paid to the investment adviser by the John
Hancock equity funds last fiscal year are as follows:
- --------------------------------------------------------------------------------
Fund % of net assets
- --------------------------------------------------------------------------------
Balanced 0.60%
Core Equity 0.75%
Core Growth 0.00%
Core Value 0.00%
Large Cap Growth 0.75%
Large Cap Value 0.625%
Mid Cap Growth 0.80%
Small Cap Growth 0.75%
Small Cap Value 0.70%
Sovereign Investors 0.54%
---------------------------------------------------
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.
Markets the funds and distributes shares
through selling brokers, financial planners
and other financial representatives
---------------------------------------------------
---------------------------------------------------
Transfer agent
John Hancock Signature Services, Inc.
Handles shareholder services, including record-
keeping and statements, distribution of dividends
and processing of buy and sell requests.
---------------------------------------------------
---------------------------------------------------
Subadviser
Independence Investment
Associates, Inc.
53 State Street
Boston, MA 02109
Provides portfolio
management to certain
funds.
---------------------------------------------------
---------------------------------------------------
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.
Holds the funds' assets, settles all
portfolio trades and collects most of
the valuation data required for
calculating each fund's NAV.
---------------------------------------------------
Asset
management
---------------------------------------------------
Trustees
Oversee the funds' activities.
---------------------------------------------------
32 FUND DETAILS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
These tables detail the performance of each fund's share classes, including
total return information showing how much an investment in the fund has
increased or decreased each year.
Balanced Fund
Figures audited by Ernst & Young LLP.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 12/94 12/95 12/96 12/97 12/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $10.74 $9.84 $11.75 $12.27 $13.33
Net investment income (loss) 0.50 0.44(1) 0.41(1) 0.37(1) 0.36(1)
Net realized and unrealized gain (loss) on investments (0.88) 1.91 0.99 2.14 1.47
Total from investment operations (0.38) 2.35 1.40 2.51 1.83
Less distributions:
Dividends from net investment income (0.50) (0.44) (0.41) (0.37) (0.36)
Distributions from net realized gain on investments sold (0.02) -- (0.47) (1.08) (0.74)
Total distributions (0.52) (0.44) (0.88) (1.45) (1.10)
Net asset value, end of period $9.84 $11.75 $12.27 $13.33 $14.06
Total investment return at net asset value(2) (%) (3.51) 24.23 12.13 20.79 14.01
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 61,952 69,811 71,242 84,264 97,072
Ratio of expenses to average net assets (%) 1.23 1.27 1.29 1.22 1.21
Ratio of net investment income (loss) to average net assets (%) 4.89 3.99 3.33 2.77 2.61
Portfolio turnover rate (%) 78 45 80 115 83
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 12/94 12/95 12/96 12/97 12/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $10.75 $9.84 $11.74 $12.27 $13.33
Net investment income (loss) 0.43 0.36(1) 0.32(1) 0.28(1) 0.27(1)
Net realized and unrealized gain (loss) on investments (0.89) 1.90 1.01 2.14 1.46
Total from investment operations (0.46) 2.26 1.33 2.42 1.73
Less distributions:
Dividends from net investment income (0.43) (0.36) (0.33) (0.28) (0.26)
Distributions from net realized gain on investments sold (0.02) -- (0.47) (1.08) (0.74)
Total distributions (0.45) (0.36) (0.80) (1.36) (1.00)
Net asset value, end of period $9.84 $11.74 $12.27 $13.33 $14.06
Total investment return at net asset value(2) (%) (4.22) 23.30 11.46 19.96 13.23
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 79,176 87,827 90,855 101,249 115,682
Ratio of expenses to average net assets (%) 1.87 1.96 1.99 1.91 1.88
Ratio of net investment income (loss) to average net assets (%) 4.25 3.31 2.63 2.08 1.93
Portfolio turnover rate (%) 78 45 80 115 83
</TABLE>
(1) Based on the average of the shares outstanding at the end of each month.
(2) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
FUND DETAILS 33
<PAGE>
Core Equity Fund
Figures audited by PricewaterhouseCoopers LLP.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 5/94 5/95 5/96 12/96(1) 12/97 12/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $12.16 $12.68 $14.41 $17.98 $19.42 $23.93
Net investment income (loss)(2) 0.28 0.32 0.20 0.13 0.10 0.05
Net realized and unrealized gain (loss) on investments 0.52 1.77 3.88 1.72 5.55 6.81
Total from investment operations 0.80 2.09 4.08 1.85 5.65 6.86
Less distributions:
Dividends from net investment income (0.23) (0.28) (0.22) (0.14) (0.04) --
Distributions from net realized gain on investments sold (0.05) (0.08) (0.29) (0.27) (1.10) (0.65)
Total distributions (0.28) (0.36) (0.51) (0.41) (1.14) (0.65)
Net asset value, end of period $12.68 $14.41 $17.98 $19.42 $23.93 $30.14
Total investment return at net asset value(3) (%) 6.60 16.98 29.12 10.33(4) 29.19 28.84
Total adjusted investment return at net asset value(3,5) (%) 6.15 16.94 28.47 10.08(4) 29.17 --
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 66,612 101,418 14,878 31,013 92,204 200,962
Ratio of expenses to average net assets (%) 0.70 0.70 0.94 1.30(6) 1.42 1.39
Ratio of adjusted expenses to average net assets(7) (%) 1.15 0.74 1.59 1.73(6) 1.44 --
Ratio of net investment income (loss) to average net assets (%) 2.20 2.43 1.55 1.16(6) 0.45 0.17
Ratio of adjusted net investment income (loss) to average
net assets(7) (%) 1.75 2.39 0.90 0.73(6) 0.43 --
Portfolio turnover rate (%) 43 71 157 35 62 50
Fee reduction per share(2) ($) 0.06 0.005 0.08 0.05 0.00(8) --
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 5/96(9) 12/96(1) 12/97 12/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $15.25 $17.96 $19.41 $23.80
Net investment income (loss)(2) 0.09 0.05 (0.06) (0.14)
Net realized and unrealized gain (loss) on investments 2.71 1.72 5.56 6.74
Total from investment operations 2.80 1.77 5.50 6.60
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) (0.65)
Total distributions (0.09) (0.32) (1.11) (0.65)
Net asset value, end of period $17.96 $19.41 $23.80 $29.75
Total investment return at net asset value(3) (%) 18.46(4) 9.83(4) 28.39 27.90
Total adjusted investment return at net asset value(3,5) (%) 17.59(4) 9.58(4) 28.37 --
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 15,125 42,461 134,939 347,045
Ratio of expenses to average net assets (%) 2.00(6) 2.00(6) 2.12 2.09
Ratio of adjusted expenses to average net assets(7) (%) 3.21(6) 2.43(6) 2.14 --
Ratio of net investment income (loss) to average net assets (%) 0.78(6) 0.45(6) (0.25) (0.53)
Ratio of adjusted net investment income (loss) to average net assets(7) (%) (0.43)(6) 0.02(6) (0.27) --
Portfolio turnover rate (%) 157 35 62 50
Fee reduction per share(2) ($) 0.13 0.05 0.00(8) --
</TABLE>
34 FUND DETAILS
<PAGE>
- --------------------------------------------------------------------------------
Class C - period ended: 12/98(9)
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $27.81
Net investment income (loss)(2) (0.09)
Net realized and unrealized gain (loss) on investments 2.68
Total from investment operations 2.59
Less distributions:
Distributions from net realized gain on investments sold (0.65)
Net asset value, end of period $29.75
Total investment return at net asset value(3) (%) 9.46(4)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 6,901
Ratio of expenses to average net assets (%) 2.12(6)
Ratio of net investment income (loss) to average net assets (%) (0.53)(6)
Portfolio turnover rate (%) 50
(1) Effective December 31, 1996, the fiscal year end changed from May 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) 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) Less than $0.01 per share.
(9) Class B shares began operations on September 7, 1995. Class C shares began
operations on May 1, 1998.
FUND DETAILS 35
<PAGE>
Core Growth Fund
Figures audited by Deloitte & Touche LLP.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class I - period ended: 2/96(1) 2/97 2/98 2/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $8.50 $9.29 $11.01 $14.88
Net investment income (loss)(2) 0.03 0.05 0.04 0.01
Net realized and unrealized gain (loss) on investments 0.81 2.16 4.34 3.40
Total from investment operations 0.84 2.21 4.38 3.41
Less distributions:
Dividends from net investment income (0.03) (0.04) (0.03) (0.02)
Distributions in excess of net investment income -- -- -- (0.00)(3)
Distributions from net realized gain on investments sold (0.02) (0.45) (0.48) (0.62)
Total distributions (0.05) (0.49) (0.51) (0.64)
Net asset value, end of period $9.29 $11.01 $14.88 $17.65
Total investment return at net asset value(4) (%) 9.94(5) 24.19 40.52 22.92
Total adjusted investment return at net asset value(4,6) (%) (5.63)(5) 17.40 37.95 21.89
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 549 883 4,605 7,855
Ratio of expenses to average net assets (%) 0.95(7) 0.95 0.95 0.95
Ratio of adjusted expenses to average net assets(8,9) (%) 38.57(7) 7.74 3.52 1.98
Ratio of net investment income (loss) to average net assets (%) 0.91(7) 0.49 0.34 0.06
Ratio of adjusted net investment income (loss) to average net assets(8,9) (%) (36.71)(7) (6.30) (2.23) (0.97)
Portfolio turnover rate (%) 21 142 91 54
Fee reduction per share(2) ($) 1.36 0.68 0.33 0.17
</TABLE>
(1) Began operations on October 2, 1995.
(2) Based on the average of the shares outstanding at the end of each month.
(3) Less than $0.01 per share.
(4) Total investment return assumes dividend reinvestment.
(5) Not annualized.
(6) An estimated total return calculation, which does not take into
consideration fee reductions by the adviser during the periods shown.
(7) Annualized.
(8) Unreimbursed, without fee reduction.
(9) Adjusted expenses as a percentage of average net assets are expected to
decrease and adjusted net income as a percentage of average net assets is
expected to increase as the net assets of the fund grow.
36 FUND DETAILS
<PAGE>
Core Value Fund
The financial information presented is for periods prior to reclassification as
Class A shares on July 1, 1999.
Figures audited by Deloitte & Touche LLP.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 2/96(1) 2/97 2/98 2/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $8.50 $9.47 $10.88 $13.93
Net investment income (loss)(2) 0.10 0.23 0.21 0.15
Net realized and unrealized gain (loss) on investments 0.96 1.77 3.33 1.23
Total from investment operations 1.06 2.00 3.54 1.38
Less distributions:
Dividends from net investment income (0.09) (0.19) (0.13) (0.18)
Distributions from net realized gain on investments sold -- (0.40) (0.36) (2.77)
Total distributions (0.09) (0.59) (0.49) (2.95)
Net asset value, end of period $9.47 $10.88 $13.93 $12.36
Total investment return at net asset value(3) (%) 12.52(4) 21.36 32.97 9.87
Total adjusted investment return at net asset value(3,5) (%) (1.18)(4) 15.92 32.02 8.94
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 682 1,323 7,747 6,685
Ratio of expenses to average net assets (%) 0.95(6) 0.95 0.95 0.95
Ratio of adjusted expenses to average net assets(7,8) (%) 34.06(6) 6.39 1.90 1.88
Ratio of net investment income (loss) to average net assets (%) 2.81(6) 2.26 1.60 1.03
Ratio of adjusted net investment income (loss) to average net assets(7,8) (%) (30.30)(6) (3.18) 0.65 0.10
Portfolio turnover rate (%) 12 66 119 61
Fee reduction per share(2) ($) 1.22 0.55 0.12 0.13
</TABLE>
(1) Began operations on October 2, 1995.
(2) Based on the average of the shares outstanding at the end of each month.
(3) Total investment return assumes dividend reinvestment.
(4) Not annualized.
(5) An estimated total return calculation, which does not take into
consideration fee reductions by the adviser during the periods shown.
(6) Annualized.
(7) Unreimbursed, without fee reduction.
(8) Adjusted expenses as a percentage of average net assets are expected to
decrease and adjusted net income as a percentage of average net assets is
expected to increase as the net assets of the fund grow.
FUND DETAILS 37
<PAGE>
Large Cap Growth Fund
Figures audited by Ernst & Young LLP.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 12/94 12/95 10/96(1) 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $17.40 $15.89 $19.51 $23.28 $24.37
Net investment income (loss) (0.10) (0.09)(2) (0.13)(2) (0.12)(2) (0.11)(2)
Net realized and unrealized gain (loss) on investments (1.21) 4.40 3.90 3.49 2.17
Total from investment operations (1.31) 4.31 3.77 3.37 2.06
Less distributions:
Distributions from net realized gain on investments sold (0.20) (0.69) -- (2.28) (4.16)
Net asset value, end of period $15.89 $19.51 $23.28 $24.37 $22.27
Total investment return at net asset value(3) (%) (7.50) 27.17 19.32(4) 16.05 9.80
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 146,466 241,700 279,425 303,067 381,591
Ratio of expenses to average net assets (%) 1.65 1.48 1.48(5) 1.44 1.40
Ratio of net investment income (loss) to average net assets (%) (0.64) (0.46) (0.73)(5) (0.51) (0.50)
Portfolio turnover rate (%) 52 68(7) 59 133 153(7)
</TABLE>
- -------------------------------------------------------------------------------
Class A - period ended: 10/99
- -------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $22.27
Net investment income (loss) (0.17)(2)
Net realized and unrealized gain (loss) on investments 5.65
Total from investment operations 5.48
Less distributions:
Distributions from net realized gain on investments sold (2.71)
Net asset value, end of period $25.04
Total investment return at net asset value(3) (%) 27.58
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 484,196
Ratio of expenses to average net assets (%) 1.35(6)
Ratio of net investment income (loss) to average net assets (%) (0.70)
Portfolio turnover rate (%) 183
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 12/94(8) 12/95 10/96(1) 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $17.16 $15.83 $19.25 $22.83 $23.70
Net investment income (loss)(2) (0.20) (0.26) (0.26) (0.27) (0.25)
Net realized and unrealized gain (loss) on investments (0.93) 4.37 3.84 3.42 2.09
Total from investment operations (1.13) 4.11 3.58 3.15 1.84
Less distributions:
Distributions from net realized gain on investments sold (0.20) (0.69) -- (2.28) (4.16)
Net asset value, end of period $15.83 $19.25 $22.83 $23.70 $21.38
Total investment return at net asset value(3) (%) (6.56)(4) 26.01 18.60(4) 15.33 9.04
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 3,807 15,913 25,474 36,430 217,448
Ratio of expenses to average net assets (%) 2.38(5) 2.31 2.18(5) 2.13 2.08
Ratio of net investment income (loss) to average net assets (%) (1.25)(5) (1.39) (1.42)(5) (1.20) (1.16)
Portfolio turnover rate (%) 52 68(7) 59 133 153(7)
</TABLE>
- -------------------------------------------------------------------------------
Class B - period ended: 10/99
- -------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $21.38
Net investment income (loss)(2) (0.31)
Net realized and unrealized gain (loss) on investments 5.38
Total from investment operations 5.07
Less distributions:
Distributions from net realized gain on investments sold (2.71)
Net asset value, end of period $23.74
Total investment return at net asset value(3) (%) 26.70
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 312,046
Ratio of expenses to average net assets (%) 2.02(6)
Ratio of net investment income (loss) to average net assets (%) (1.37)
Portfolio turnover rate (%) 183
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Class C - period ended: 10/98(8) 10/99
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
Per share operating performance
Net asset value, beginning of period $21.43 $21.37
Net investment income (loss)(2) (0.10) (0.31)
Net realized and unrealized gain (loss) on investments 0.04 5.38
Total from investment operations (0.06) 5.07
Less distributions:
Distributions from net realized gain on investments sold -- (2.71)
Net asset value, end of period $21.37 $23.73
Total investment return at net asset value(3) (%) (0.28)(4) 26.72
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 152 1,457
Ratio of expenses to average net assets (%) 2.10(5) 2.05(6)
Ratio of net investment income (loss) to average net assets (%) (1.14)(5) (1.36)
Portfolio turnover rate (%) 153(7) 183
</TABLE>
(1) Effective October 31, 1996, the fiscal year end changed from December 31
to October 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) Expense ratios do not include interest expense due to bank loans, which
amounted to less than 0.01%.
(7) Excludes merger activity.
(8) Class B and Class C shares began operations on January 3, 1994 and June 1,
1998, respectively.
38 FUND DETAILS
<PAGE>
Large Cap Value Fund
Figures audited by Ernst & Young LLP.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 8/94 8/95(1) 8/96 12/96(2)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $12.08 $11.42 $13.38 $15.07
Net investment income (loss)(3) 0.32 0.21 0.19 0.05
Net realized and unrealized gain (loss) on investments,
financial futures contracts and foreign currency transactions (0.61) 1.95 1.84 2.15
Total from investment operations (0.29) 2.16 2.03 2.20
Less distributions:
Distributions from net investment income (0.37) (0.20) (0.19) (0.08)
Distributions from net realized gain on investments sold -- -- (0.15) (1.57)
Total distributions (0.37) (0.20) (0.34) (1.65)
Net asset value, end of period $11.42 $13.38 $15.07 $15.62
Total investment return at net asset value(4) (%) (2.39) 19.22 15.33 14.53(5)
Total adjusted investment return at net asset value(4) (%) -- -- -- --
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 121,160 130,183 139,548 163,154
Ratio of expenses to average net assets (%) 1.31 1.30 1.17 1.22(6)
Ratio of net investment income (loss) to average net assets (%) 2.82 1.82 1.28 0.85(6)
Portfolio turnover rate (%) 195 99 74 26
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Class A - period ended: 12/97 12/98
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Per share operating performance
Net asset value, beginning of period $15.62 $19.32
Net investment income (loss)(3) 0.12 0.16
Net realized and unrealized gain (loss) on investments,
financial futures contracts and foreign currency transactions 5.57 2.85
Total from investment operations 5.69 3.01
Less distributions:
Distributions from net investment income (0.07) (0.14)
Distributions from net realized gain on investments sold (1.92) (0.93)
Total distributions (1.99) (1.07)
Net asset value, end of period $19.32 $21.26
Total investment return at net asset value(4) (%) 36.71 15.94
Total adjusted investment return at net asset value(4) (%) -- 15.92
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 303,313 421,218
Ratio of expenses to average net assets (%) 1.12 1.16(7)
Ratio of net investment income (loss) to average net assets (%) 0.65 0.79(7)
Portfolio turnover rate (%) 102(8) 64
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 8/94 8/95(1) 8/96 12/96(2)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $12.10 $11.44 $13.41 $15.10
Net investment income (loss)(3) 0.24 0.13 0.08 0.01
Net realized and unrealized gain (loss) on investments,
financial futures contracts and foreign currency transactions (0.61) 1.96 1.85 2.14
Total from investment operations (0.37) 2.09 1.93 2.15
Less distributions:
Distributions from net investment income (0.29) (0.12) (0.09) (0.02)
Distributions from net realized gain on investments sold -- -- (0.15) (1.57)
Total distributions (0.29) (0.12) (0.24) (1.59)
Net asset value, end of period $11.44 $13.41 $15.10 $15.66
Total investment return at net asset value(4) (%) (3.11) 18.41 14.49 14.15(5)
Total adjusted investment return at net asset value(4) (%) -- -- -- --
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 114,025 114,723 125,781 146,399
Ratio of expenses to average net assets (%) 2.06 2.03 1.90 1.98(6)
Ratio of net investment income (loss) to average net assets (%) 2.07 1.09 0.55 0.10(6)
Portfolio turnover rate (%) 195 99 74 26
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Class B - period ended: 12/97 12/98
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Per share operating performance
Net asset value, beginning of period $15.66 $19.31
Net investment income (loss)(3) (0.02) 0.01
Net realized and unrealized gain (loss) on investments,
financial futures contracts and foreign currency transactions 5.60 2.84
Total from investment operations 5.58 2.85
Less distributions:
Distributions from net investment income (0.01) (0.03)
Distributions from net realized gain on investments sold (1.92) (0.93)
Total distributions (1.93) (0.96)
Net asset value, end of period $19.31 $21.20
Total investment return at net asset value(4) (%) 35.80 15.05
Total adjusted investment return at net asset value(4) (%) -- 15.03
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 340,334 547,945
Ratio of expenses to average net assets (%) 1.87 1.91(7)
Ratio of net investment income (loss) to average net assets (%) (0.10) 0.05(7)
Portfolio turnover rate (%) 102(8) 64
</TABLE>
FUND DETAILS 39
<PAGE>
Large Cap Value Fund continued
- --------------------------------------------------------------------------------
Class C - period ended: 12/98(9)
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $22.03
Net investment income (loss)(3) 0.03
Net realized and unrealized gain (loss) on investments,
financial futures contracts and foreign currency transactions 0.09
Total from investment operations 0.12
Less distributions:
Distributions from net investment income (0.02)
Distributions from net realized gain on investments sold (0.93)
Total distributions (0.95)
Net asset value, end of period $21.20
Total investment return at net asset value(4) (%) 0.83(5)
Total adjusted investment return at net asset value(4) (%) 0.82(5)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 4,711
Ratio of expenses to average net assets (%) 1.92(6,7)
Ratio of net investment income (loss) to average net assets (%) 0.28(6,7)
Portfolio turnover rate (%) 64
(1) On December 22, 1994, John Hancock Advisers, Inc. became the investment
adviser of the fund.
(2) Effective December 31, 1996, the fiscal year end changed from August 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) Annualized.
(7) Reflects voluntary management fee reduction in effect during the year
ended December 31, 1998. As a result of such fee reductions, expenses of
Class A, Class B and Class C shares of the fund reflect reductions of less
than $0.01 per share. Absent such reductions the ratio of expenses to
average net assets would have been 1.18%, 1.93% and 1.94% for Class A,
Class B and Class C shares, respectively, and the ratio of net investment
income to average net assets would have been 0.77%, 0.03% and 0.26% for
Class A, Class B and Class C shares, respectively.
(8) Portfolio turnover rate excludes merger activity.
(9) Class C shares began operations on May 1, 1998.
40 FUND DETAILS
<PAGE>
Mid Cap Growth Fund
Figures audited by PricewaterhouseCoopers LLP.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 10/95 10/96 10/97 10/98 10/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $7.93 $9.32 $10.92 $11.40 $9.11
Net investment income (loss)(1) (0.07) (0.11) (0.06) (0.09) (0.12)
Net realized and unrealized gain (loss) on investments 1.46 3.34 1.00 (0.89) 3.86
Total from investment operations 1.39 3.23 0.94 (0.98) 3.74
Less distributions:
Distributions from net realized gain on investments sold -- (1.63) (0.46) (1.31) --
Net asset value, end of period $9.32 $10.92 $11.40 $9.11 $12.85
Total investment return at net asset value(2) (%) 17.53 36.15 8.79 (9.40) 41.05
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 101,562 156,578 141,997 101,138 112,082
Ratio of expenses to average net assets (%) 1.59 1.59 1.59 1.59 1.60
Ratio of net investment income (loss) to average net assets (%) (0.87) (1.00) (0.57) (0.86) (1.14)
Portfolio turnover rate (%) 155 240 317 168 153
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 10/95 10/96 10/97 10/98 10/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $7.87 $9.19 $10.67 $11.03 $8.72
Net investment income (loss)(1) (0.13) (0.18) (0.13) (0.15) (0.18)
Net realized and unrealized gain (loss) on investments 1.45 3.29 0.95 (0.85) 3.68
Total from investment operations 1.32 3.11 0.82 (1.00) 3.50
Less distributions:
Distributions from net realized gain on investments sold -- (1.63) (0.46) (1.31) --
Net asset value, end of period $9.19 $10.67 $11.03 $8.72 $12.22
Total investment return at net asset value(2) (%) 16.77 35.34 7.84 (9.97) 40.14
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 137,363 238,901 204,812 134,188 145,816
Ratio of expenses to average net assets (%) 2.30 2.29 2.28 2.27 2.23
Ratio of net investment income (loss) to average net assets (%) (1.55) (1.70) (1.25) (1.54) (1.77)
Portfolio turnover rate (%) 155 240 317 168 153
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class C - period ended: 10/98(3) 10/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Per share operating performance
Net asset value, beginning of period $9.99 $8.72
Net investment income (loss)(1) (0.06) (0.19)
Net realized and unrealized gain (loss) on investments (1.21) 3.68
Total from investment operations (1.27) 3.49
Net asset value, end of period $8.72 $12.21
Total investment return at net asset value(2) (%) (12.71)(4) 40.02
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 100 276
Ratio of expenses to average net assets (%) 2.29(5) 2.30
Ratio of net investment income (loss) to average net assets (%) (1.66)(5) (1.82)
Portfolio turnover rate (%) 168 153
</TABLE>
(1) Based on the average of the shares outstanding at the end of each month.
(2) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(3) Class C shares began operations on June 1, 1998.
(4) Not annualized.
(5) Annualized.
FUND DETAILS 41
<PAGE>
Small Cap Growth Fund
Figures audited by Ernst & Young LLP.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A(1) - period ended: 10/95(2) 10/96 10/97 10/98 10/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $6.71 $9.02 $10.22 $12.35 $8.41
Net investment income (loss)(3) (0.07) (0.09) (0.07) (0.08) (0.12)
Net realized and unrealized gain (loss) on investments 2.38 1.29 2.41 (1.34) 4.59
Total from investment operations 2.31 1.20 2.34 (1.42) 4.47
Less distributions:
Distributions from net realized gain on investments sold -- -- (0.21) (2.52) (0.23)
Net asset value, end of period $9.02 $10.22 $12.35 $8.41 $12.65
Total investment return at net asset value(4) (%) 34.56 13.27 23.35 (14.14) 54.41
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 179,481 218,497 209,384 179,700 266,886
Ratio of expenses to average net assets (%) 1.38 1.32 1.29(5) 1.36(5) 1.34(5)
Ratio of net investment income (loss) to average net assets (%) (0.83) (0.86) (0.57) (1.02) (1.17)
Portfolio turnover rate (%) 23 44 96 103 1.04
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class B(1) - period ended: 10/95(2) 10/96 10/97 10/98 10/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $6.51 $8.70 $9.78 $11.72 $7.81
Net investment income (loss)(3) (0.11) (0.15) (0.14) (0.15) (0.18)
Net realized and unrealized gain (loss) on investments 2.30 1.23 2.29 (1.24) 4.24
Total from investment operations 2.19 1.08 2.15 (1.39) 4.06
Less distributions:
Distributions from net realized gain on investments sold -- -- (0.21) (2.52) (0.23)
Net asset value, end of period $8.70 $9.78 $11.72 $7.81 $11.64
Total investment return at net asset value(4) (%) 33.60 12.48 22.44 (14.80) 53.31
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 393,478 451,268 472,594 361,992 478,468
Ratio of expenses to average net assets (%) 2.11 2.05 2.02(5) 2.07(5) 2.03(5)
Ratio of net investment income (loss) to average net assets (%) (1.55) (1.59) (1.30) (1.73) (1.87)
Portfolio turnover rate (%) 23 44 96 103 104
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class C - period ended: 10/98(6) 10/99
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Per share operating performance
Net asset value, beginning of period $8.96 $7.81
Net investment income (loss)(3) (0.03) (0.19)
Net realized and unrealized gain (loss) on investments (1.12) 4.23
Total from investment operations (1.15) 4.04
Less distributions:
Distributions from net realized gain on investments sold -- (0.23)
Net asset value, end of period $7.81 $11.62
Total investment return at net asset value(4) (%) (12.83)(7) 53.05
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 468 3,866
Ratio of expenses to average net assets (%) 2.11(5,8) 2.09(5)
Ratio of net investment income (loss) to average net assets (%) (1.86)(8) (1.94)
Portfolio turnover rate (%) 103 104
</TABLE>
(1) All per share amounts and net asset values have been restated to reflect
the four-for-one stock split effective May 1, 1998.
(2) On December 22, 1994, 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) Expense ratios do not include interest expense due to bank loans, which
amounted to less than $0.01 per share.
(6) Class C shares began operations on June 1, 1998.
(7) Not annualized.
(8) Annualized.
42 FUND DETAILS
<PAGE>
Small Cap Value Fund
Figures audited by Ernst & Young LLP.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 12/94(1) 12/95 12/96 12/97
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $8.50 $8.99 $10.39 $10.32
Net investment income (loss)(3) 0.18 0.21 0.14 0.06
Net realized and unrealized gain (loss) on investments 0.48 1.60 1.17 2.52
Total from investment operations 0.66 1.81 1.31 2.58
Less distributions:
Dividends from net investment income (0.17) (0.20) (0.14) (0.03)
Distributions from net realized gain on investments sold -- (0.21) (1.24) (0.60)
Total distributions (0.17) (0.41) (1.38) (0.63)
Net asset value, end of period $8.99 $10.39 $10.32 $12.27
Total investment return at net asset value(4) (%) 7.81(5) 20.26 12.91 25.25
Total adjusted investment return at net asset value(4,6) (%) 7.30(5) 19.39 12.20 24.65
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 4,420 12,845 15,853 20,961
Ratio of expenses to average net assets (%) 0.99(7) 0.98 0.99 0.99
Ratio of adjusted expenses to average net assets(8) (%) 4.98(7) 1.85 1.70 1.59
Ratio of net investment income (loss) to average net assets (%) 2.10(7) 2.04 1.31 0.47
Ratio of adjusted net investment income (loss) to
average net assets(8) (%) (1.89)(7) 1.17 0.60 (0.13)
Portfolio turnover rate (%) 0.3 9 72 140
Fee reduction per share(3) ($) 0.34 0.09 0.08 0.07
<CAPTION>
- ----------------------------------------------------------------------------------------------------
Class A - period ended: 10/98(2) 10/99
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Per share operating performance
Net asset value, beginning of period $12.27 $10.82
Net investment income (loss)(3) 0.02 (0.09)
Net realized and unrealized gain (loss) on investments (1.47) 6.67
Total from investment operations (1.45) 6.58
Less distributions:
Dividends from net investment income -- --
Distributions from net realized gain on investments sold -- (0.13)
Total distributions -- (0.13)
Net asset value, end of period $10.82 $17.27
Total investment return at net asset value(4) (%) (11.82)(5) 61.39
Total adjusted investment return at net asset value(4,6) (%) (12.33)(5) 61.24
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 22,528 51,746
Ratio of expenses to average net assets (%) 1.01(7) 1.39
Ratio of adjusted expenses to average net assets(8) (%) 1.62(7) 1.54
Ratio of net investment income (loss) to average net assets (%) 0.25(7) (0.67)
Ratio of adjusted net investment income (loss) to
average net assets(8) (%) (0.36)(7) (0.82)
Portfolio turnover rate (%) 69 140
Fee reduction per share(3) ($) 0.06 0.02
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 12/94(1) 12/95 12/96 12/97
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $8.50 $9.00 $10.38 $10.31
Net investment income (loss)(3) 0.13 0.12 0.07 (0.03)
Net realized and unrealized gain (loss) on investments 0.48 1.59 1.17 2.53
Total from investment operations 0.61 1.71 1.24 2.50
Less distributions:
Dividends from net investment income (0.11) (0.12) (0.07) --
Distributions from net realized gain on investments sold -- (0.21) (1.24) (0.60)
Total distributions (0.11) (0.33) (1.31) (0.60)
Net asset value, end of period $9.00 $10.38 $10.31 $12.21
Total investment return at net asset value(4) (%) 7.15(5) 19.11 12.14 24.41
Total adjusted investment return at net asset value(4,6) (%) 6.64(5) 18.24 11.43 23.81
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 3,296 16,994 22,097 35,033
Ratio of expenses to average net assets (%) 1.72(7) 1.73 1.69 1.69
Ratio of adjusted expenses to average net assets(8) (%) 5.71(7) 2.60 2.40 2.29
Ratio of net investment income (loss) to average net assets (%) 1.53(7) 1.21 0.62 (0.24)
Ratio of adjusted net investment income (loss) to
average net assets(8) (%) (2.46)(7) 0.34 (0.09) (0.84)
Portfolio turnover rate (%) 0.3 9 72 140
Fee reduction per share(3) ($) 0.34 0.09 0.08 0.07
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Class B - period ended: 10/98(2) 10/99
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
Per share operating performance
Net asset value, beginning of period $12.21 $10.71
Net investment income (loss)(3) (0.04) (0.18)
Net realized and unrealized gain (loss) on investments (1.46) 6.58
Total from investment operations (1.50) 6.40
Less distributions:
Dividends from net investment income -- --
Distributions from net realized gain on investments sold -- (0.13)
Total distributions -- (0.13)
Net asset value, end of period $10.71 $16.98
Total investment return at net asset value(4) (%) (12.29)(5) 60.33
Total adjusted investment return at net asset value(4,6) (%) (12.80)(5) 60.18
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 30,637 75,103
Ratio of expenses to average net assets (%) 1.71(7) 2.06
Ratio of adjusted expenses to average net assets(8) (%) 2.32(7) 2.21
Ratio of net investment income (loss) to average net assets (%) (0.45)(7) (1.34)
Ratio of adjusted net investment income (loss) to
average net assets(8) (%) (1.06)(7) (1.49)
Portfolio turnover rate (%) 69 140
Fee reduction per share(3) ($) 0.06 0.02
</TABLE>
FUND DETAILS 43
<PAGE>
Small Cap Value Fund continued
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Class C - period ended: 10/98(1) 10/99
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Per share operating performance
Net asset value, beginning of period $13.39 $10.71
Net investment income (loss)(3) (0.03) (0.19)
Net realized and unrealized gain (loss) on investments (2.65) 6.58
Total from investment operations (2.68) 6.39
Less distributions:
Distributions from net realized gain on investments sold -- (0.13)
Net asset value, end of period $10.71 $16.97
Total investment return at net asset value(4) (%) (20.01)(5) 60.24
Total adjusted investment return at net asset value(4,6) (%) (20.32)(5) 60.09
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) $422 $3,774
Ratio of expenses to average net assets (%) 1.71(7) 2.09
Ratio of adjusted expenses to average net assets(8) (%) 2.32(7) 2.29
Ratio of net investment income (loss) to average net assets (%) (0.54)(7) (1.43)
Ratio of adjusted net investment income (loss) to average net assets(8) (%) (1.15)(7) (1.58)
Portfolio turnover rate (%) 69 140
Fee reduction per share(3) ($) 0.04 0.02
</TABLE>
(1) Class A and Class B shares began operations on January 3, 1994. Class C
shares began operations on May 1, 1998.
(2) Effective October 31, 1998, the fiscal year end changed from December 31
to October 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.
44 FUND DETAILS
<PAGE>
Sovereign Investors Fund
Figures audited by Ernst & Young LLP.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 12/94 12/95 12/96 12/97 12/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $15.10 $14.24 $17.87 $19.48 $22.41
Net investment income (loss) 0.46 0.40 0.36(1) 0.32(1) 0.31(1)
Net realized and unrealized gain (loss) on investments (0.75) 3.71 2.77 5.31 3.11
Total from investment operations (0.29) 4.11 3.13 5.63 3.42
Less distributions:
Dividends from net investment income (0.46) (0.40) (0.36) (0.32) (0.31)
Distributions from net realized gain on investments sold (0.11) (0.08) (1.16) (2.38) (1.29)
Total distributions (0.57) (0.48) (1.52) (2.70) (1.60)
Net asset value, end of period $14.24 $17.87 $19.48 $22.41 $24.23
Total investment return at net asset value(2) (%) (1.85) 29.15 17.57 29.14 15.62
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 1,090,231 1,280,321 1,429,523 1,748,490 1,884,460
Ratio of expenses to average net assets (%) 1.16 1.14 1.13 1.06 1.03
Ratio of net investment income (loss) to average net assets (%) 3.13 2.45 1.86 1.44 1.33
Portfolio turnover rate (%) 45 46 59 62 51
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 12/94(3) 12/95 12/96 12/97 12/98
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $15.02 $14.24 $17.86 $19.46 $22.38
Net investment income (loss)(1) 0.38 0.27 0.21 0.16 0.14
Net realized and unrealized gain (loss) on investments (0.69) 3.71 2.77 5.29 3.11
Total from investment operations (0.31) 3.98 2.98 5.45 3.25
Less distributions:
Dividends from net investment income (0.36) (0.28) (0.22) (0.15) (0.14)
Distributions from net realized gain on investments sold (0.11) (0.08) (1.16) (2.38) (1.29)
Total distributions (0.47) (0.36) (1.38) (2.53) (1.43)
Net asset value, end of period $14.24 $17.86 $19.46 $22.38 $24.20
Total investment return at net asset value(2) (%) (2.04)(4) 28.16 16.67 28.14 14.79
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 128,069 257,781 406,523 610,976 790,277
Ratio of expenses to average net assets (%) 1.86(5) 1.90 1.91 1.83 1.79
Ratio of net investment income (loss) to average net assets (%) 2.57(5) 1.65 1.10 0.67 0.58
Portfolio turnover rate (%) 45 46 59 62 51
</TABLE>
- --------------------------------------------------------------------------------
Class C - period ended: 12/98(3)
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $24.43
Net investment income (loss)(1) 0.13
Net realized and unrealized gain (loss) on investments 1.07
Total from investment operations 1.20
Less distributions:
Distributions from net investment income (0.12)
Distributions from net realized gain on investments sold (1.29)
Total distributions (1.41)
Net asset value, end of period $24.22
Total investment return at net asset value(2) (%) 5.18(4)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 4,627
Ratio of expenses to average net assets (%) 1.67(5)
Ratio of net investment income to average net assets (%) 0.84(5)
Portfolio turnover rate (%) 51
(1) Based on the average of the shares outstanding at the end of each month.
(2) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(3) Class B shares began operations on January 3, 1994. Class C shares began
operations on May 1, 1998.
(4) Not annualized.
(5) Annualized.
FUND DETAILS 45
<PAGE>
<PAGE>
<PAGE>
For more information
- --------------------------------------------------------------------------------
Two documents are available that offer further information on John Hancock
equity funds:
Annual/Semiannual Report to Shareholders
Includes financial statements, a discussion of the market conditions and
investment strategies that significantly affected performance, as well as the
auditors' report (in annual report only).
Statement of Additional Information (SAI)
The SAI contains more detailed information on all aspects of the funds. The
current annual report is included in the SAI.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference into (is legally a part of) this prospectus.
To request a free copy of the current annual/semiannual report or the SAI,
please contact John Hancock:
By mail:
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
By phone: 1-800-225-5291
By EASI-Line: 1-800-338-8080
By TDD: 1-800-544-6713
On the Internet: www.jhfunds.com
Or you may view or obtain these documents from the SEC:
In person: at the SEC's Public Reference Room in Washington, DC. For access to
the Reference Room call 1-202-942-8090
By mail: Public Reference Section Securities and Exchange Commission Washington,
DC 20549-0102 (duplicating fee required)
By electronic request:
[email protected]
(duplicating fee required)
On the Internet: www.sec.gov
[LOGO] John Hancock Funds John Hancock Funds, Inc.
A Global Investment Management Firm 101 Huntington Avenue
Boston MA 02199-7603
(C)2000 John Hancock Funds, Inc.
EQTPN 3/00
