John Hancock Limited Term Government Fund, May 1, 1994
Supplement to Class A and Class B Prospectus
Effective January 1, 1995, the prospectus is amended as follows: (a) John
Hancock Broker Distribution Services, Inc. will be known as John Hancock Funds,
Inc. and (b) John Hancock Fund Services, Inc. will be known as John Hancock
Investor Services Corporation.
The "Contingent Deferred Sales Charge-Investments of $1 million or more in Class
A shares" section under SHARE PRICE is supplemented as follows:
Existing full service clients of John Hancock Mutual Life Insurance
Company group annuity contract holders as of September 1, 1994, may
purchase Class A shares with no initial sales charge, but if the shares
are redeemed within 12 months after the end of the calendar year in
which the purchase was made, a contingent deferred sales charge will be
imposed at the rate for Class A shares described in the prospectus.
The "Qualifying for a Reduced Sales Charge" section under SHARE PRICE is
supplemented as follows:
Shares of the Fund may be sold without sales charge to investors
reinvesting redemption proceeds which were subject to a sales charge
from non-John Hancock mutual funds. Investors reinvesting redemption
proceeds from non-John Hancock mutual funds must submit proof of the
redemption at the time of purchase of the Fund. This may be a copy of
the redemption check or the confirmation statement. These reinvestments
must remain in the Fund for 15 days before redemption or exchange. John
Hancock Funds may make a payment for these reinvestments, out of its
own resources, to a Selling Broker in an amount not to exceed 0.25% of
the amount invested.
The INSTITUTIONAL INVESTORS section is amended as follows:
Plans that qualify to purchase Class C shares will also be permitted to
purchase shares of any other class of the Fund.
March 1, 1995
2200S-3/95
<PAGE>
As filed with the Securities and Exchange Commission on February 28, 1994.
Registration Nos. 2-29503
811-1678
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Pre-Effective Amendment No.
Post-Effective Amendment No. 43 [x]
and/or
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 22
(Check appropriate box or boxes)
John Hancock Limited Term Government Fund
(Exact Name of Registrant as Specified in Charter)
101 Huntington Avenue
Boston, Massachusetts 02199-7603
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code
(617) 375-1700
EDWARD J. BOUDREAU, JR.
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
(Name and Address of Agent for Service)
Copies to:
JEFFERY N. CARP Esq.
Hale and Dorr
60 State Street
Boston, MA 02109
It is proposed that this filing will become effective (check appropriate box)
Box immediately upon filing pursuant to paragraph (b)
Box on (date) pursuant to paragraph (b)
Box 60 days after filing pursuant to paragraph (a)
Checked Box on May 1, 1994 pursuant to paragraph (a) of Rule 485
Calculation of Registration Fees Under the Securities Act of 1933
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Aggregate
Title of Securities Amount of Shares Offering Price Maximum Amount of
Being Registered Being Registered Per Share Offering Price Registration Fee
<S> <C> <C> <C> <C>
Shares of Beneficial Interest Indefinite* N/A N/A N/A
Shares of Beneficial Interest 953,016 $ 9.01 $289,998 $100
</TABLE>
*Registrant continues its election to register an indefinite number of
shares of beneficial interest pursuant to Rule 24f-2 under the Investment
Company Act of 1940, as amended.
**Registrant elects to calculate the maximum aggregate offering price
pursuant to Rule 24e-2. 8,580,600 shares were redeemed during the fiscal year
ended December 31, 1993. 7,659,770 shares were used for reductions pursuant
to Paragraph (c) of Rule 24f-2 during the current fiscal year. 920,830 shares
is the amount of redeemed shares used for reduction in this Amendment.
Pursuant to Rule 457(c) under the Securities Act of 1933, the maximum public
offering price of $9.01 per share on February 17, 1994 is the price used as
the basis for calculating the registration fee. While no fee is required for
the 920,830 shares, the Registrant has elected to register, for $100, an
additional $289,998 of shares (approximately 32,186 shares at $9.01 per
share).
Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant
has registered an indefinite number of securities under the Securities Act of
1933. The Registrant filed the notice required by Rule 24f-2 for its most
recent fiscal year on or about February 23, 1994.
1
<PAGE>
JOHN HANCOCK
LIMITED TERM
GOVERNMENT FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
MAY 1, 1994
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Expense Information 2
The Fund's Financial Highlights 3
Investment Objective and Policies 5
Organization and Management of the Fund 7
Alternative Purchase Arrangements 8
The Fund's Expenses 9
Dividends and Taxes 9
Performance 10
How to Buy Shares 11
Share Price 13
How to Redeem Shares 17
Additional Services and Programs 19
Institutional Investors 23
</TABLE>
This Prospectus sets forth information about John Hancock Limited Term
Government Fund (the "Fund") that you should know before investing. Please
read and retain it for future reference.
Additional information about the Fund has been filed with the Securities and
Exchange Commission (the "SEC"). You can obtain a copy of the Fund's
Statement of Additional Information, dated May 1, 1994, and incorporated by
reference in this Prospectus, free of charge by writing or telephoning: John
Hancock Fund Services, Inc., P.O. Box 9116, Boston, Massachusetts 02205-9116,
1-800-225-5291, (1-800-554-6713 TDD).
Shares of the Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank, and the shares are not federally insured by the
Federal Deposit Insurance Corporation, the Federal Reserve Board, or any
other agency.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
2
<PAGE>
EXPENSE INFORMATION
The purpose of the following information is to help you to understand the
various fees and expenses that you will bear, directly or indirectly, when
you purchase shares of the Fund. The operating expenses included in the table
and hypothetical example below are based on expenses for the Class A shares
of the Fund for the fiscal year ended December 31, 1993, adjusted to reflect
current fees and expenses. No Class B shares were actually outstanding during
that period, since Class B commenced operations on January 3, 1994. Actual
fees and expenses of Class A shares and Class B shares may be greater or less
than those indicated.
<TABLE>
<CAPTION>
Shareholder Transaction Class A Class B
Expenses Shares** Shares**
<S> <C> <C>
Maximum sales charge imposed
on purchases (as a
percentage of offering
price) 3.00% None
Maximum sales charge imposed
on reinvested dividends None None
Maximum deferred sales charge None* 3.00%
Redemption fee+ None None
Exchange fee None None
Annual Fund Operating Expenses
(as a percentage of average
net assets)
Management fee 0.60% 0.60%
12b-1 fee*** 0.30% 1.00%
Other expenses 0.51% 0.53%
Total Fund operating expenses 1.41% 2.13%
</TABLE>
* No sales charge is payable at the time of purchase on investments in
Class A shares of $1 million or more, but for these investments a contingent
deferred sales charge may be imposed, as described below under the caption
"Share Price," in the event of certain redemption transactions made within
one year of purchase.
** The information set forth in the foregoing table relates only to the
Class A shares and Class B shares. The Fund has been operating since its
organization primarily with only one class of shares (now designated as Class
A shares). As of the date of this Prospectus, the Board of Trustees has
authorized the issuance of three classes of shares of the Fund, designated
Class A, Class B and Class C. See "Organization and Management of the Fund."
Class C shares are only offered to certain institutional investors and are
described in a separate prospectus. Some individual investors who are
currently eligible to purchase Class A and Class B shares may also be
participants in plans that are eligible to purchase Class C shares. See
"Institutional Investors." Class C shares are not subject to a sales charge
on purchases, redemptions, or reinvested dividends, nor are they subject to
deferred sales charges or an exchange fee. Class C expenses are identical to
those of Class A shares except that the transfer agent fee may differ and
there is no 12b-1 Fee on Class C shares.
*** The amount of the 12b-1 fee used to cover service expenses will be up to
0.25% of the Fund's average net assets, and the remaining portion will be
used to cover distribution expenses. See "The Fund's Expenses."
+Redemption by wire fee (currently $4.00) not included.
<TABLE>
<CAPTION>
Example: 1 Year 3 Years 5 Years 10 Years
<S> <C> <C> <C> <C>
You would pay the following expenses for the indicated period of years on a
hypothetical $1,000 investment, assuming a 5% annual return:
Class A Shares $44 $73 $105 $194
Class B Shares
--Assuming complete redemption at end of period $51 $85 $112 $224
--Assuming no redemption $21 $65 $112 $224
</TABLE>
You would pay the following expenses for the indicated period of years on a
hypothetical $1,000 investment in Class C shares, assuming a 5% annual
return: 1 year, $8; 3 years, $26; 5 years, $45, and 10 years, $100.
(This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.)
The Fund's payment of a distribution fee may result in a long-term
shareholder indirectly paying more than the economic equivalent of the
maximum front-end sales charge permitted under the National Association of
Securities Dealers Rules of Fair Practice.
The management and 12b-1 fees referred to above are more fully explained in
this Prospectus under the caption "The Fund's Expenses" and in the Statement
of Additional Information under the captions "Investment Advisory and Other
Services" and "Distribution Contract."
2
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
The following table of Financial Highlights has been audited by Ernst &
Young, the Fund's independent auditors for the fiscal year ended December 31,
1993, whose unqualified report is included in the Fund's 1993 Annual Report
and is included in the Statement of Additional Information.
Selected data for each class of shares outstanding throughout each period
indicated are as follows:
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
CLASS A
Per Share Operating Performance
Net Asset Value, Beginning of Period $ 8.77 $ 8.97 $ 8.61 $ 8.73 $ 8.56
Net Investment Income 0.48 0.54 0.67 0.74 0.79
Net Realized & Unrealized Gain on
Investments 0.14 (0.18) 0.36 (0.11) 0.18
Total from Investment Operations 0.62 0.36 1.03 0.63 0.97
Dividends from Net Investment Income (0.48) (0.54) (0.67) (0.75) (0.80)
Distributions from Net Realized Gain on
Investments Sold (0.11) (0.02) -- -- --
Total Distributions (0.59) (0.56) (0.67) (0.75) (0.80)
Net Asset Value, End of Period $ 8.80 $ 8.77 $ 8.97 $ 8.61 $ 8.73
Total Investment Return at Net Asset
Value (f) 7.13% 4.19% 12.54% 7.75% 11.59%
Ratios and Supplemental Data
Net Assets, End of period (000's
omitted) $262,903 $259,170 $211,322 $176,329 $179,065
Ratio of Expenses to Average Net Assets 1.51% 1.55% 1.44% 1.53% 1.01%
Ratio of Net Investment Income to
Average Net Assets 5.34% 6.13% 7.72% 8.56% 8.98%
Portfolio Turnover Rate(c) 175% 185% 134% 75% 26%
</TABLE>
3
<PAGE>
Selected data for each class of shares outstanding throughout each period
indicated are as follows:
<TABLE>
<CAPTION>
1988 1987 1986 1985 1984
<S> <C> <C> <C> <C> <C>
CLASS A
Per Share Operating Performance
Net Asset Value, Beginning of Period $ 8.83 $ 9.71 $ 9.24 $ 8.61 $ 8.40
Net Investment Income 0.77 0.78 0.83 0.91 0.89
Net Realized & Unrealized Gain on
Investments (0.28) (0.83) 0.47 0.70 0.16
Total from Investment Operations 0.49 (0.05) 1.30 1.61 1.05
Dividends from Net Investment Income (0.76) (0.83) (0.83) (0.98) (0.84)
Distributions from Net Realized Gain on
Investments Sold -- -- -- -- --
Total Distributions (0.76) (0.83) (0.83) (0.98) (0.84)
Net Asset Value, End of Period $ 8.56 $ 8.83 $ 9.71 $ 9.24 $ 8.61
Total Investment Return at Net Asset
Value (f) 5.67% (0.49%) 14.59% 20.04% 13.41%
Ratios and Supplemental Data
Net Assets, End of period (000's
omitted) $192,315 $202,924 $201,293 $139,080 $117,622
Ratio of Expenses to Average Net Assets 1.02% 0.97% 0.90% 0.98% 0.97%
Ratio of Net Investment Income to
Average Net Assets 8.71% 8.52% 8.82% 10.38% 10.89%
Portfolio Turnover Rate(c) --
12% 7% 6% 9%
</TABLE>
3
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
1993
<S> <C>
CLASS C(d)
Per Share Operating Performance
Net Asset Value, Beginning of Period $ 8.82(e)
Net Investment Income 0.01
Net Realized & Unrealized Gain on Investments (0.03)
Total from Investment Operations (0.02)
Dividends from Net Investment Income --
Distributions from Net Realized Gain on Investments Sold --
Total Distributions --
Net Asset Value, End of Period $ 8.80
Total Investment Return at Net Asset Value (f) (0.23%)(a)
Ratios and Supplemental Data
Net Assets, End of Period (000's omitted) $3,491
Ratio of Expenses to Average Net Assets 1.08%(b)
Ratio of Net Investment Income to Average Net Assets 5.42%(b)
Portfolio Turnover Rate N/A
</TABLE>
(a) Not annualized.
(b) On an annualized basis.
(c) Prior to 1985, long-term U.S. Government securities transactions were
excluded for purposes of determining portfolio turnover rates. The portfolio
turnover rates for years ended after December 31, 1984 have been calculated
to include long-term U.S. government securities transactions.
(d) Class C shares commenced investment operations on December 27, 1993.
(e) Initial price to commence operations.
(f) Does not reflect sales charges.
4
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
The Fund seeks current income and security of principal through investment
primarily in securities of the United States government and its agencies.
The Fund's investment objective is to provide current income and security of
principal through investment primarily in securities of the United States
government and its agencies. These are direct obligations of, or are
guaranteed as to payment of principal and interest by, the United States
government or its agencies ("Government Obligations"). There is no assurance
that the Fund will achieve its investment objective.
The Fund intends to invest at least 80% of its total assets in Government
Obligations, including repurchase agreements secured by those obligations.
Investments will be made in an attempt to minimize excessive fluctuations in
net asset value per share, so at times the highest yielding Government
Obligations may not be selected for investment if, in management's view,
future interest rate movements could result in a depreciation in value. While
the Fund makes no commitment concerning the portfolio maturities of
particular securities, it expects that under normal conditions a substantial
portion of the portfolio will be invested in Government Obligations with
maturities of up to ten years and expects to maintain an average
dollar-weighted maturity of five to seven years.
The Government Obligations in which the Fund will invest include but are not
limited to:
Treasury Notes and Bonds--These are direct obligations of the United States
government backed by the full faith and credit of the United States. New
issues of notes mature in one to seven years, while bonds generally have a
maturity of five years or more.
Treasury Bills--These are direct obligations of the United States
government backed by the full faith and credit of the United States and
mature in one year or less.
Agency Securities--These securities may be guaranteed by the United States
Treasury or supported by the issuer's right to borrow from the Treasury and
may be backed by the credit of the Federal agency itself.
Mortgage Backed Securities
The Fund may invest in GNMA mortgage-backed certificates ("GNMA's or Ginnie
Maes") and other U.S. Government securities such as those issued by the
Federal National Mortgage Association and the Federal Home Loan Mortgage
Corporation, representing ownership interest in mortgage pools.
The mortgage-backed securities in which the Fund invests represent
participation interests in pools of adjustable and fixed rate mortgage loans
which are guaranteed by agencies or instrumentalities of the U.S. Government.
Such securities differ from conventional debt securities which provide for
periodic payment of interest in fixed amounts (usually semi-annually) with
principal payments at maturity or specified call dates. Mortgage- backed
securities provide monthly payments which are, in effect, a "pass-through" of
the monthly interest and principal payments (including any prepayments) made
by the individual borrowers on the pooled mortgage loans. The yield on
mortgage-backed securities is based on the average scheduled life of the
underlying pool of mortgage loans, which is computed on the basis of the
maturities of the underlying instruments. The actual life of any particular
pool may be shortened by unscheduled or early payments of principal and
interest. The occurrence of prepayments is affected by a wide range of
economic, demographic and social factors and, accordingly, it is not possible
to accurately predict the average life of a particular pool.
Unscheduled or early payments of principal and interest on the underlying
mortgages may make the securities' effective maturity shorter than this and
the prevailing interest rates may be higher or lower than the current yield
of the Fund's portfolio at the time such payments are received by the Fund
for reinvestment. Mortgage-backed secu
5
<PAGE>
rities may have less potential for capital appreciation than comparable
fixed-income securities due to the existence of rate adjustment features in
the underlying mortgages and the likelihood of increased prepayments of
mortgages as interest rates decline. If the Fund buys mortgage-backed
securities at a premium, mortgage foreclosures and prepayments of principal
by mortgagors (which may be made at any time without penalty) may result in
some loss of the Fund's principal investment to the extent of the premium
paid.
In addition to Government Obligations, the Fund may invest up to 20% of its
total assets in certificates of deposit maturing in one year or less. These
will be issued by United States banks or thrift institutions which are
insured by the Federal Deposit Insurance Corporation and which have assets of
$1 billion or more.
The Fund may employ certain investment strategies to help achieve its
investment objective.
Restricted Securities. The Fund may purchase restricted securities, including
those eligible for resale to "qualified institutional buyers" pursuant to
Rule 144A under the Securities Act of 1933 (the "Securities Act"), subject to
an investment restriction limiting the Fund's illiquid securities to not more
than 15% of its net assets. The Trustees will monitor the Fund's investments
in these securities, focusing on certain factors including valuation,
liquidity and availability of information. This investment practice could
have the effect of reducing the level of liquidity in the Fund to the extent
that qualified institutional buyers may lose interest in purchasing these
securities for a time.
Repurchase Agreements, Forward Commitments and When-Issued Securities. The
Fund may enter into repurchase agreements and may purchase securities on a
forward or when-issued basis. In a repurchase agreement, the Fund buys a
security subject to the right and obligation to sell it back at a higher
price. These transactions must be fully collateralized at all times, but
involve some credit risk if the other party defaults on its obligation and
the Fund is delayed or prevented from liquidating the collateral. The Fund
will segregate in a separate account cash or liquid, high grade debt
securities equal in value to its forward commitments and when-issued
securities. Purchasing Government Obligations for future delivery or on a
forward or when- issued basis may increase the Fund's overall investment
exposure and involves a risk of loss if the value of the securities declines
before the settlement date.
Short-Term Trading. The Fund will attempt to maximize current income through
short- term portfolio trading. This may involve selling portfolio instruments
and purchasing different instruments to take advantage of disparities of
yield in different segments of the market for Government Obligations.
Portfolio turnover rates of the Fund for recent years are shown in the
section "The Fund's Financial Highlights." A high rate of portfolio turnover
(greater than 100%) involves correspondingly greater brokerage expenses which
must be borne by the Fund and the shareholders and may, under certain
circumstances, make it more difficult for the Fund to qualify as a regulated
investment company under the Internal Revenue Code of 1986. See "Tax Status"
and "Brokerage Allocation" in the Statement of Additional Information.
The Fund follows certain
policies, which may help reduce investment risk.
The Fund has adopted certain investment restrictions which are detailed in
the Statement of Additional Information, where they are classified as
fundamental or nonfundamental. The Fund's investment objective and those
investment restrictions desig
6
<PAGE>
nated as fundamental may not be changed without shareholder approval. All
other investment policies and restrictions are nonfundamental and can be
changed by a vote of the Trustees without shareholder approval.
Brokers are chosen based on best price and execution.
When choosing brokerage firms to carry out the Fund's transactions, the
primary consideration is execution at the most favorable prices, taking into
account the broker's professional ability and quality of service.
Consideration may also be given to the broker's sales of Fund shares.
Pursuant to procedures determined by the Trustees, John Hancock Advisers,
Inc. (the "Adviser") may place securities transactions with brokers
affiliated with the Adviser. These brokers include Tucker Anthony
Incorporated and Sutro & Company Inc. They are indirectly owned by John
Hancock Mutual Life Insurance Company, which in turn indirectly owns the
Adviser.
ORGANIZATION AND MANAGEMENT OF THE FUND
The Trustees elect officers and retain the investment adviser who is
responsible for the day- to-day operations of the Fund, subject to the
Trustees' policies and supervision.
The Fund is a diversified open-end management investment company organized as
a Delaware corporation in 1968 and reorganized as a Massachusetts business
trust in 1984. The Fund has an unlimited number of shares of beneficial
interest. The Fund's Declaration of Trust permits the Trustees, without
shareholder approval, to create and classify shares of beneficial interest
into separate series of the Fund. As of the date of this Prospectus, the
Trustees have not authorized the creation of any new series of the Fund.
Although additional series may be added in the future, the Trustees have no
current intention of creating additional series of the Fund. The Fund's
Declaration of Trust permits the Trustees to classify and reclassify any
series or portfolio of shares into one or more classes. Accordingly, the
Trustees have authorized the issuance of three classes of the Fund,
designated Class A, Class B and Class C. The shares of each class represent
an interest in the same portfolio of investments of the Fund and have equal
rights as to voting, redemption, dividends and liquidation. However, each
bears different distribution and transfer agent fees and expenses, and Class
A and Class B shareholders have exclusive voting rights with respect to their
distribution plans.
Shareholders have certain rights to remove Trustees. The Fund is not required
and does not intend to hold annual shareholder meetings, although special
meetings may be held for such purposes as electing or removing Trustees,
changing fundamental investment restrictions and policies or approving a
management contract. The Fund under certain circumstances, will assist in
shareholder communications with other shareholders.
John Hancock Advisers, Inc. advises investment companies having total assets
of approximately $10 billion.
The Adviser was organized in 1968 and is a wholly-owned indirect subsidiary
of the John Hancock Mutual Life Insurance Company, a financial services
company. The Adviser provides the Fund, and other investment companies in the
John Hancock group of funds, with investment research and portfolio
management services. John Hancock Broker Distribution Services, Inc. ("Broker
Services") distributes shares for all of the John Hancock mutual funds
through selected broker-dealers ("Selling Brokers"). Certain Fund officers
are also officers of the Adviser and Broker Services.
Anne M. McDonley, Vice President, is portfolio manager of the Fund as well as
the John Hancock Freedom Gold & Government Fund. Ms. McDonley joined John
Hancock Advisers in August 1992 as Fixed-Income Derivatives Specialist. Prior
to 1992, she was Vice President and Treasurer of First Signature Bank & Trust
Company, an indirect subsidiary of John Hancock Mutual Life Insurance
Company.
7
<PAGE>
ALTERNATIVE PURCHASE ARRANGEMENTS
You can purchase shares of the Fund at a price equal to their net asset value
per share plus a sales charge. At your election, this charge may be imposed
either at the time of the purchase (See "Initial Sales Charge
Alternative--Class A Shares") or on a contingent deferred basis (See
"Contingent Deferred Sales Charge Alternative--Class B Shares"). If you do
not specify on your account application which class of shares you are
purchasing, it will be assumed that you are investing in Class A shares.
Investments in Class A shares of the Fund are subject to an initial sales
charge.
Class A Shares. If you elect Class A shares, you will incur an initial sales
charge unless you purchase $1 million or more. If you purchase $1 million or
more of Class A shares, you will not be subject to an initial sales charge,
but you will incur a sales charge if you redeem your shares within one year
of purchase. Class A shares are subject to ongoing distribution and service
fees at a combined annual rate of up to 0.30% of the Fund's average daily net
assets attributable to the Class A shares. Certain purchases of Class A
shares qualify for reduced initial sales charges. See "Share
Price--Qualifying for a Reduced Sales Charge."
Investments in Class B shares are subject to a contingent deferred sales
charge.
Class B Shares. You will not incur a sales charge when you purchase Class B
shares, but the shares are subject to a sales charge if you redeem them
within five years of purchase (the "contingent deferred sales charge" or the
"CDSC"). Class B shares are subject to ongoing distribution and service fees
at a combined annual rate of up to 1.00% of the Fund's average daily net
assets attributable to the Class B shares. Investing in Class B shares
permits all of your dollars to work from the time you make your investment,
but the higher ongoing distribution fee will cause these shares to have a
higher expense ratio than that of Class A shares. To the extent that any
dividends are paid by the Fund, these higher expenses will result in lower
dividends than those paid on Class A shares.
You should consider which class of shares will be a more beneficial
investment for you.
Factors to Consider in Choosing an Alternative. The alternative purchase
arrangement allows you to choose the most beneficial way to buy shares, given
the amount of the purchase, the length of time you expect to hold the shares
and other circumstances. You should consider whether during the anticipated
life of your Fund investment the accumulated CDSC and fees on Class B shares
would be less than the initial sales charge and accumulated fees on Class A
shares purchased at the same time, and to what extent this differential would
be offset by the Class A shares' lower expenses. To help you make this
determination, the table under the caption "Expense Information" gives
examples of the charges applicable to each class of shares. Class A shares
will normally be more beneficial if you qualify for a reduced sales charge.
See "Share Price-Qualifying for a Reduced Sales Charge."
Class A shares are subject to lower distribution and service fees and,
accordingly, pay correspondingly higher dividends per share, to the extent
any dividends are paid. However, because initial sales charges are deducted
at the time of purchase, you would not have all your funds invested initially
and, therefore, would initially own fewer shares. If you do not qualify for
reduced initial sales charges and expect to maintain your investment for an
extended period of time, you might consider purchasing Class A shares because
the accumulated distribution and service charges on Class B shares may exceed
the initial sales charge and accumulated distribution and service charges on
Class A shares during the life of your investment.
8
<PAGE>
Alternatively, you might determine that it would be more advantageous to
purchase Class B shares in order to have all your funds invested initially,
although remaining subject to higher distribution fees and, for a five-year
period, a CDSC.
In the case of Class A shares, the distribution expenses that Broker Services
incurs in connection with the sale of the shares will be paid from the
proceeds of the initial sales charge and the ongoing distribution and service
fees. In the case of Class B shares, the expenses will be paid from the
proceeds of the ongoing distribution and service fees, as well as the CDSC
incurred upon redemption within six years of purchase. The purpose and
function of the Class B shares' CDSC and ongoing distribution and service
fees are the same as those of the Class A shares' initial sales charge and
ongoing distribution and service fees. Sales personnel distributing the
Fund's shares may receive different compensation for selling each class of
shares.
Dividends, if any, on Class A and Class B shares will be calculated in the
same manner, at the same time and on the same day and will be in the same
amount. However, each class will bear only its own distribution and service
fees, shareholder meeting expenses and any incremental transfer agency costs.
See "Dividends and Taxes."
THE FUND'S EXPENSES
For managing its investment and business affairs, the Fund pays a fee to the
Adviser which for the 1993 fiscal year, was 0.48% of the Fund's average daily
net asset value.
The Class A and Class B shareholders have adopted distribution plans (each a
"Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the
"1940 Act"). Under these Plans, the Fund will pay distribution and service
fees at an aggregate annual rate of 0.30% of the Class A shares' average
daily net assets and an aggregate annual rate of 1.00% of the Class B shares'
average daily net assets. In each case, up to 0.25% is for service expenses
and the remaining amount is for distribution expenses. The distribution fees
will be used to reimburse Broker Services for its distribution expenses
including but not limited to: (i) initial and ongoing sales compensation to
Selling Brokers and others (including affiliates of Broker Services) engaged
in the sale of Fund shares; (ii) marketing, promotional and overhead expenses
incurred in connection with the distribution of Fund shares; and (iii) with
respect to Class B shares only, interest expenses on unreimbursed
distribution expenses. The service fees will be used to compensate Selling
Brokers for providing personal and account maintenance services to
shareholders. In the event Broker Services is not fully reimbursed for
payments made or expenses incurred by it under the Class A Plan, these
expenses will not be carried beyond twelve months from the date they were
incurred. These unreimbursed expenses under the Class B Plan will be carried
forward together with interest on the balance of these unreimbursed expenses.
The total expenses of the Fund's Class A shares for the year ended December
31, 1993, were 1.51% of average daily net asset value. Class B shares of the
Fund did not commence activity until 1994.
DIVIDENDS AND TAXES
Dividends. Dividends from the Fund's net investment income are generally
declared daily and distributed monthly. Capital gains, if any, are generally
declared annually. Dividends are reinvested in additional shares unless you
elect the option to receive them in cash. If you elect the cash option and
the U.S. Postal Service cannot deliver
9
<PAGE>
your checks, your election will be converted to the reinvestment option.
Because of the higher expenses associated with Class B shares, any dividends
on Class B shares will be lower than those for the Class A shares. See "Share
Price."
Taxation. Dividends from the Fund's net investment income and net short-term
capital gains are generally taxable to you as ordinary income. Dividends from
the Fund's net long- term capital gains are taxable as long-term capital
gains. These dividends are taxable whether you take them in cash or reinvest
in additional shares. Certain dividends may be paid in January of a given
year, but they may be taxable as if you received them the previous December.
The Fund will send you a statement by January 31 showing the tax status of
the dividends you received for the prior year.
The Fund has qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Code. As a regulated investment
company, the Fund will not be subject to Federal income taxes on any net
investment income and net realized capital gains that are distributed to its
shareholders at least annually. When you redeem (sell) or exchange shares,
you may realize a gain or loss.
On the account application, you must certify that your social security or
other taxpayer identification number is correct and that you are not subject
to backup Federal tax withholding. If you do not provide this information or
are otherwise subject to withholding, the Fund may be required to withhold
31% of your dividends, redemptions and exchanges.
In addition to Federal taxes, you may be subject to state, foreign or local
taxes, depending on your residence. In some states, a portion of the Fund's
dividends that represents interest received by the Fund on direct U.S.
government obligations may be exempt from tax. You should consult your tax
adviser for specific advice.
PERFORMANCE
The Fund may advertise its yield and total return.
Yield reflects the Fund's rate of income on portfolio investments as a
percentage of the Fund's share price. Yield is computed by annualizing the
result of dividing the net investment income per share over a 30 day period
by the maximum offering price per share on the last day of that period.
Yields are calculated according to accounting methods that are standardized
for all stock and bond funds. Because yield accounting methods differ from
the methods used for other accounting purposes, the Fund's yield may not
equal the income paid on shares or the income reported in the Fund's
financial statements.
Total return is based on the overall change in value of a hypothetical
investment in the Fund.
The Fund's total return shows the overall dollar or percentage change in
value, assuming the reinvestment of all dividends. Cumulative total return
shows the Fund's performance over a period of time. Average annual total
return shows the cumulative return of shares divided over the number of years
included in the period. Because average annual total return tends to smooth
out variations in performance, you should recognize that it is not the same
as actual year-to-year results.
Both total return and yield calculations for Class A shares generally include
the effect of paying the maximum sales charge of 3% (except as shown in "The
Fund's Financial Highlights"). Investments at a lower sales charge would
result in higher performance figures. Yield and total return for the Class B
shares reflect deduction of the applicable CDSC imposed on a redemption of
shares held for the applicable period. All calculations assume that all
dividends are reinvested at net asset value on the reinvestment dates during
the
10
<PAGE>
periods. Yield and total return of Class A, Class B and Class C shares will
be calculated separately, and, because each class is subject to different
expenses, the yield or total return with respect to that class for the same
period may differ. The relative performance of the Class A and Class B shares
will be affected by a variety of factors, including the higher operating
expenses attributable to the Class B shares, whether the Fund's investment
performance is better in the earlier or later portions of the period measured
and the level of net assets of the Classes during the period. The Fund will
include the total return of Class A, Class B and Class C shares in any
advertisement or promotional materials including Fund performance data. The
value of Fund shares, when redeemed, may be more or less than their original
cost. Both yield and total return are historical calculations and are not an
indication of future performance. See "Factors to Consider in Choosing an
Alternative." Further information about the performance of the Fund is
contained in the Fund's Annual Report to Shareholders which may be obtained
free of charge by writing or telephoning John Hancock Fund Services, Inc. at
the address or telephone number listed on the front page of this Prospectus.
HOW TO BUY SHARES
Opening an account
The minimum initial investment in Class A and Class B shares is $1,000 ($250
for group investments or $500 for retirement plans).
Complete the Account Application attached to this Prospectus. Indicate
whether you are buying Class A or Class B shares. If you do not specify which
class of shares you are purchasing, Fund Services will assume you are
investing in Class A shares.
By Check
1. Make your check payable to John Hancock Fund Services, Inc. ("Fund
Services").
2. Deliver the completed application and check to your registered
representative or Selling Broker, or mail it directly to Fund Services.
By Wire
1. Obtain an account number by contacting your registered representative or
Selling Broker, or by calling 1-800-225-5291.
2. Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA No. 211475000
For credit to: John Hancock Limited Term Government Fund
Class A or Class B shares
Your Account Number
Name(s) under which account is registered
3. Deliver the completed application to your registered representative or
Selling Broker, or mail it directly to Fund Services.
Monthly Automatic
Accumulation
Program (MAAP)
Buying additional Class A and Class B shares
1. Complete the "Automatic Investing" and "Bank Information" sections on the
Account Privileges Application, designating a bank account from which funds
may be drawn.
2. The amount you elect to invest will be automatically withdrawn from your
bank or credit union account.
11
<PAGE>
By Telephone
1. Complete the "Invest-By-Phone" and "Bank Information" sections on the
Account Privileges Application, designating a bank account from which funds
may be drawn. Note that in order to invest by phone, your account must be in
a bank or credit union that is a member of the Automated Clearing House
system (ACH).
2. After your authorization form has been processed, you may purchase
additional Class A and Class B shares by calling Fund Services toll-free at
1-800-225-5291.
3. Give the Fund Services representative the name in which your account is
registered, the Fund name, the class of shares you own, your account number
and the amount you wish to invest.
4. Your investment normally will be credited to your account the business day
following your phone request.
By Check
1. Either complete the detachable stub included on your account statement or
include a note with your investment listing the name of the Fund, the class
of shares you own, your account number and the name(s) in which the account
is registered.
2. Make your check payable to John Hancock Fund Services, Inc.
3. Mail the account information and check to:
John Hancock Fund Services, Inc.
P.O. Box 9115
Boston, MA 02205-9115
or deliver it to your registered representative or Selling Broker.
By Wire
Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock Limited Term Government Fund
(Class A or Class B shares)
Your Account Number
Name(s) under which account is registered
Other Requirements: All purchases must be made in U.S. dollars. Checks
written on foreign banks will delay purchases until U.S. funds are received,
and a collection charge may be imposed. Shares of the Fund are priced at the
offering price based on the net asset value computed after Broker Services
receives notification of the dollar equivalent from the Fund's custodian
bank. Wire purchases normally take two or more hours to complete and, to be
accepted the same day, must be received by 4:00 p.m., New York time. Your
bank may charge a fee to wire funds. Telephone transactions are recorded to
verify information. Share certificates are not issued unless a request is
made to Fund Services.
Institutional Investors: Certain institutional investors may purchase Class C
shares of the Fund, which have no sales charge or 12b-1 Fee. See
"Institutional Investors" for further information.
You will receive statements regarding your account which you should keep to
help with your personal recordkeeping.
You will receive a statement of your account after any transaction that
affects your share balance or registration (statements related to
reinvestment of dividends and automatic investment/withdrawal plans will be
sent to you quarterly). A tax information statement will be mailed to you by
January 31 of each year.
12
<PAGE>
SHARE PRICE
The offering price of shares is their net asset value plus a sales charge, if
applicable, which will vary with the purchase alternative you choose.
The net asset value ("NAV") is the value of one share. The NAV per share is
calculated by dividing the net assets of each class by the number of
outstanding shares of that class. The NAV will be different for each class to
the extent that different amounts of undistributed income are accrued on
shares of each class between dividend declarations.
Fixed-income securities are generally valued by a pricing service which uses
electronic pricing techniques based on general institutional trading. Some
securities are valued at fair value based on procedures approved by the
Trustees as determined in good faith by the Trustees, and for certain other
securities the amortized cost method is used if the Trustees determine in
good faith that this approximates fair value as described more fully in the
Statement of Additional Information. The NAV is calculated once daily as of
the close of regular trading on the New York Stock Exchange (generally at
4:00 p.m., New York time) on each day that the Exchange is open.
Shares of the Fund are sold at the offering price based on the NAV computed
after your investment request is received in good order by Broker Services.
If you buy shares of the Fund through a Selling Broker, the Selling Broker
must receive your investment before the close of regular trading on the New
York Stock Exchange and transmit it to Broker Services before its close of
business to receive that day's offering price.
The Fund offers two classes of shares in this Prospectus: Class A shares,
which are subject to an initial sales charge, and Class B shares, which are
subject to a contingent deferred sales charge. If you do not specify a
particular class of shares, it will be assumed that you are purchasing Class
A shares and an initial sales charge will be assessed.
Initial Sales Charge Alternative--Class A Shares.
The offering price you pay for Class A shares of the Fund equals the NAV plus
a sales charge as follows:
<TABLE>
<CAPTION>
Combined
Reallowance Reallowance to
Sales Charge as Sales Charge as and Service Selling Brokers
a Percentage a Percentage Fee as a as a Percentage
Amount Invested of the of the Percentage of of the
(Including Sales Charge) Offering Price Amount Invested Offering Price(+) Offering Price (*)
<S> <C> <C> <C> <C>
Less than $100,000 3.00% 3.09% 2.50% 2.26%
$100,000 to $499,999 2.50% 2.56% 2.25% 2.01%
$500,000 to $999,999 2.00% 2.04% 1.75% 1.51%
$1,000,000 and over 0.00%(**) 0.00%(**) (***) 0.00%(***)
</TABLE>
(*) Upon notice to Selling Brokers with whom it has sales agreements,
Broker Services may reallow an amount up to the full applicable sales charge.
A Selling Broker to whom substantially the entire sales charge is reallowed
or who receives these incentives may be deemed to be an underwriter under the
Securities Act of 1933.
(**) No sales charge is payable at the time of purchase of Class A shares of
$1 million or more, but a contingent deferred sales charge may be imposed in
the event of certain redemption transactions made within one year of
purchase.
13
<PAGE>
(***) Broker Services may pay a commission and first year's service fee (as
described in (+) below) to Selling Brokers who initiate and are responsible
for purchases of $1 million or more in aggregate as follows: 1% on sales to
$4,999,999, plus 0.50% on the next $5 million and 0.25% on $10 million and
over.
(+) At the time of sale Broker Services pays to Selling Brokers the first
year's service fee in advance, in an amount equal to 0.25% of the net assets
invested in the Fund. Thereafter it pays the service fee periodically in
arrears in an amount up to 0.25% of the Fund's average annual net assets.
Selling Brokers receive the fee as compensation for providing personal and
account maintenance services to shareholders.
Sales charges ARE NOT APPLIED to any distributions which are reinvested in
additional shares of the Fund.
In addition to the reallowance allowed to all Selling Brokers, Brokers
Services will pay the following: Round trip airfare to a luxury resort will
be given to each registered representative of a Selling Broker who sells
certain amounts of shares of John Hancock funds. Broker Services will make
these incentive payments out of its own resources. Other than distribution
fees, the Fund does not bear distribution expenses.
In addition, Broker Services will pay certain affiliated Selling Brokers at
an annual rate of up to 0.05% of the daily net assets of the accounts
attributable to such brokers.
Under certain circumstances described below, investors in Class A shares may
be entitled to pay reduced sales charges. See "Qualifying for a Reduced Sales
Charge" below.
Contingent Deferred Sales Charge--Investments of $1 million or more in Class
A Shares. Purchases of $1 million or more in Class A shares will be made at
net asset value with no initial sales charge, but if the shares are redeemed
within 12 months after the end of the calendar month in which the purchase
was made (the contingent deferred sales charge period), a contingent deferred
sales charge ("CDSC") will be imposed. The rate of the CDSC will depend on
the amount invested as follows:
<TABLE>
<CAPTION>
Amount Invested CDSC Rate
<S> <C>
$1 million to $4,999,999 1.00%
Next $5 million to $9,999,999 0.50%
Amounts of $10 million and over 0.25%
</TABLE>
The charge will be assessed on an amount equal to the lesser of the current
market value or the original purchase cost of the shares redeemed.
Accordingly, no CDSC will be imposed on increases in account value above the
initial purchase price, including any dividends which have been reinvested in
additional Class A shares.
In determining whether a CDSC applies to a redemption, the calculation will
be determined in a manner that results in the lowest possible rate being
charged. Therefore, it will be assumed that redemption is first of any shares
in the shareholder's account not subject to the CDSC. The CDSC is waived on
redemption in certain circumstances. See "Waiver of Contingent Deferred Sales
Charges" below.
14
<PAGE>
You may qualify for a reduced sales charge on your investment in Class A
shares.
Qualifying for a Reduced Sales Charge. If you invest more than $100,000 in
Class A shares of the Fund or a combination of funds in the John Hancock
family of funds (except money market funds), you may qualify for a reduced
sales charge on your investments through a LETTER OF INTENTION or through the
COMBINATION PRIVILEGE. You may also be able to use the ACCUMULATION PRIVILEGE
to take advantage of the value of your previous investments in Class A shares
of John Hancock funds when meeting the breakpoints for a reduced sales
charge.
Fund employees and affiliates
Class A shares of the Fund may be purchased without paying an initial sales
charge by the following:
* A Trustee/Director or officer of the Trust/Company; a Director or officer
of the Adviser and its affiliates or Selling Brokers; employees or sales
representatives of any of the foregoing; retired officers, employees or
Directors of any of the foregoing; a member of the immediate family of any of
the foregoing; or any Fund, pension, profit sharing or other benefit plan for
the individuals described above.
Special transactions
* Any state, county, city or any instrumentality, department, authority or
agency of these entities (an "eligible governmental authority") which is
prohibited by applicable investment laws from paying a sales charge or
commission when it purchases shares of any registered investment management
company.
* A bank, trust company, credit union, savings institution or other type of
depository institution, its trust departments or common trust funds (an
"eligible depository institution") if it is purchasing $1 million or more for
non-discretionary customers or accounts.
* A broker, dealer or registered investment adviser that has entered into an
agreement with Broker Services providing specifically for the use of Fund
shares in fee-based investment products made available to their clients.
* A former participant in an employee benefit plan with John Hancock Mutual
Funds, when s/he withdraws from his/her plan and transfers any or all of
his/her plan distributions directly to the Fund.
* Class A shares of the Fund may also be purchased without an initial sales
charge in connection with certain liquidation, merger or acquisition
transactions involving other investment companies or personal holding
companies.
Contingent Deferred Sales Charge Alternative--Class B Shares. Class B shares
are offered at net asset value per share without a sales charge so that your
entire investment will go to work at the time of purchase. Class B shares
redeemed within four years of purchase will be subject to a Contingent
Deferred Sales Charge ("CDSC") at the rates set forth below. This charge will
be assessed on an amount equal to the lesser of the current market value or
the original purchase cost of the shares being redeemed. Accordingly, you
will not be assessed a CDSC on increases in account value above the initial
purchase price, including shares derived from dividend reinvestments.
In determining whether a CDSC applies to a redemption, the calculation will
be determined in a manner that results in the lowest possible rate being
charged. It will be
15
<PAGE>
assumed that your redemption comes first from shares you have held beyond the
four-year CDSC redemption period or those you acquired through reinvestment
of dividends or distributions, and next from the shares you have held the
longest during the four-year period.
Example:
You have purchased 100 shares at $10 per share. The second year after your
purchase, your investment's net asset value per share has increased by $2 to
$12, and you have gained 10 additional shares through dividend reinvestment.
If you redeem 50 shares at this time, your CDSC will be calculated as
follows:
<TABLE>
<CAPTION>
<S> <C>
* Proceeds of 50 shares redeemed at $12 per share $ 600
* Minus proceeds of 10 shares not subject to CDSC because they were acquired
through dividend reinvestment (10 X $12) -120
* Minus appreciation on remaining shares, also not subject to CDSC (40 X $2) -80
* Amount subject to CDSC $ 400
</TABLE>
Proceeds from the CDSC are paid to Broker Services. Broker Services uses them
in whole or in part to defray its expenses related to providing the Fund with
distribution services in connection with the sale of the Class B shares, such
as compensating Selling Brokers for selling these shares. The combination of
the CDSC and the distribution and service fees makes it possible for the Fund
to sell Class B shares without deducting a sales charge at the time of the
purchase.
The amount of the CDSC, if any, will vary depending on the number of years
from the time you purchase your Class B shares until the time you redeem
them. Solely for purposes of determining the holding period, any payments you
make during the month will be aggregated and deemed to have been made on the
last day of the month.
<TABLE>
<CAPTION>
Year in Which Contingent Deferred Sales
Class B Redeemed Charge As a Percentage of
Following Purchase Dollar Amount Subject to CDSC
<S> <C>
First 3.0%
Second 2.0%
Third 2.0%
Fourth 1.0%
Fifth and thereafter None
</TABLE>
A commission equal to 2.75% of the amount invested and a first year's service
fee equal to 0.25% of the amount invested are paid to Selling Brokers. The
initial service fee is paid in advance at the time of sale for the provision
of personal and account maintenance services to shareholders during the
twelve months following the sale, and thereafter the service fee is paid in
arrears.
16
<PAGE>
Conversion of Class B Shares. Your Class B shares and an appropriate portion
of reinvested dividends on those shares will be converted into Class A shares
automatically no later than the month following five years after the shares
were purchased, resulting in lower annual distribution fees. If you exchanged
Class B shares into the Fund from another John Hancock fund, the calculation
will be based on the time the shares in the original fund were purchased.
Waiver of Contingent Deferred Sales Charge. The CDSC is waived on redemptions
of Class B shares (and Class A shares subject to the CDSC) in the following
circumstances: (1) redemptions in connection with a tax-exempt retirement
plan distribution which is mandatory under the Internal Revenue Code (i.e.,
after age 70-1/2); (2) redemptions involving certain liquidation, merger or
acquisition transactions involving other investment companies or personal
holding companies; (3) redemptions that are due to death or disability; or
(4) redemptions made pursuant to the Reinvestment Privilege, as described
below. The CDSC is waived on redemptions of shares following distributions to
participants or beneficiaries of plans qualified under Section 401(a) of the
Code or from custodial accounts under Code Section 403(b)(7), deferred
compensation plans under Code Section 457 and other employee benefit plans,
and certain returns of excess contributions made to these plans. In addition,
all of these distributions must be permitted to be made without penalty under
the Code. In addition, certain IRA and retirement plans purchasing shares
before October 1, 1992 will not be subject to a CDSC. If you are entitled to
a waiver of the CDSC, you must notify Fund Services either directly or
through your Selling Broker at the time you make your redemption. The waiver
will be granted subject to confirmation of your entitlement to the waiver.
HOW TO REDEEM SHARES
You may redeem all or a portion of your shares on any business day. Your
shares will be redeemed at the next NAV calculated after your redemption
request is received in good order by Fund Services, less any applicable CDSC.
The Fund may hold payment until reasonably satisfied that investments which
were recently made by check or Invest-by-Phone have been collected (which may
take up to 10 calendar days).
Once your shares are redeemed, the Fund generally sends you payment on the
next business day. When you redeem your shares, you will generally realize a
gain or loss depending on the difference between what you paid for them and
what you receive for them, subject to certain other tax rules. Under unusual
circumstances, the Fund may suspend redemptions or postpone payment for up to
seven days or longer, as permitted by Federal securities laws.
17
<PAGE>
By Telephone
All
To assure acceptance of your redemptions request, please follow these
procedures.
Fund shareholders are automatically eligible for the telephone redemption
privilege. Call 1-800-225-5291, from 8:00 A.M. to 4:00 P.M. (New York time),
Monday through Friday, excluding days on which the New York Stock Exchange is
closed. Fund Services employs the following procedures to confirm that
instructions received by telephone are genuine. Your name, the account
number, taxpayer identification number applicable to the account and other
relevant information may be requested. In addition, telephone instructions
are recorded.
You may redeem up to $100,000 by telephone, but the address on the account
must not have changed for the last 30 days. A check will be mailed to the
exact name(s) and address shown on the account.
If reasonable procedures, such as those described above, are not followed,
the Fund may be liable for any loss due to unauthorized or fraudulent
telephone instructions. In all other cases, neither the Fund nor Fund
Services will be liable for any loss or expense for acting upon telephone
instructions made in accordance with the telephone transaction procedures
mentioned above.
Telephone redemption is not available for IRAs or other tax-qualified
retirement plans or shares of the Fund that are in certificate form.
During periods of extreme economic conditions or market changes, telephone
requests may be difficult to implement due to a large volume of calls. During
these times you should consider placing redemption requests in writing or
using EASI-Line. EASI-Line is a telephone number which is listed on account
statements.
By Wire
If you have a telephone redemption form on file with the Fund, redemption
proceeds of $1,000 or more can be wired on the next business day to your
designated bank account, and a fee (currently $4.00) will be deducted. You
may also use electronic funds transfer to your assigned bank account, and the
funds are usually collectable after two business days. Your bank may or may
not charge for this service. Redemptions of less than $1,000 will be sent by
check or electronic funds transfer.
This feature may be elected by completing the "Telephone Redemption" section
on the Account Privileges Application attached to this Prospectus.
By Check
(Class A
shares only)
You may elect the checkwriting option on the account application, which
allows you to write checks in amounts from a minimum of $100. Checks may not
be written against shares in your account which have been purchased within
the last 15 days, except for shares purchased by wire transfer (which are
immediately available), or for Fund shares that are in certificate form.
There is a $5.00 charge for each checkbook which will be deducted from your
account. Other expenses relating to checkwriting are borne by the Fund.
You should make sure that there are sufficient shares in the account to cover
the amount of any check drawn, since the net asset value of shares will
fluctuate. If insufficient shares are in the account, the check will be
returned marked "insufficient funds" and no shares will be redeemed.
It is not possible to determine in advance the total value of your account so
as to write a check for the value of the entire account because dividends
declared on shares held in the account or prior redemptions and possible
changes in net asset value may cause the account to change in amount.
Accordingly, you should not close your account by writing a check.
Shareholders may not maintain a Systematic Withdrawal Plan and utilize the
checkwriting service at the same time.
In Writing
Send a stock power or "letter of instruction" specifying the name of the
Fund, the dollar amount or the number of shares to be redeemed, your name,
class of shares, your account number and the additional requirements listed
below that apply to your particular account.
18
<PAGE>
<TABLE>
<CAPTION>
Type of Registration Requirements
<S> <C>
Individual, Joint Tenants, Sole
Proprietorship, Custodial (Uniform A letter of instruction signed (with titles where applicable) by
Gifts or Transfer to Minors Act), all persons authorized to sign for the account, exactly as it is
General Partners. registered with the signature(s) guaranteed.
Corporation, Association A letter of instruction and a corporate resolution, signed by
person(s) authorized to act on the account, with the
signature(s) guaranteed.
Trusts A letter of instruction signed by the Trustee(s) with the
signature(s) guaranteed. (If the Trustee's name is not
registered on your account, also provide a copy of the trust
document, certified within the last 60 days.)
</TABLE>
If you do not fall into any of these registration categories, please call
1-800-225-5291 for further instructions.
Who may guarantee your signature
A signature guarantee is a widely accepted way to protect you and the Fund by
verifying the signature on your request. It may not be provided by a notary
public. If the net asset value of the shares redeemed is $100,000 or less,
Broker Services may guarantee the signature. The following institutions may
provide you with a signature guarantee, provided that the institution meets
credit standards established by Fund Services: (i) a bank; (ii) a securities
broker or dealer, including a government or municipal securities broker or
dealer, that is a member of a clearing corporation or meets certain net
capital requirements; (iii) a credit union having authority to issue
signature guarantees; (iv) a savings and loan association, a building and
loan association, a cooperative bank, a Federal savings bank or association;
or (v) a national securities exchange, a registered securities exchange or a
clearing agency.
Through Your Broker
Additional information about redemptions.
Your broker may be able to initiate the redemption. Contact him or her for
instructions.
If you have certificates for your shares, you must submit them with your
stock power or a letter of instruction. Unless you specify to the contrary,
any outstanding Class A shares will be redeemed before Class B shares. You
may not redeem certificated shares by telephone.
Due to the proportionately high cost of maintaining smaller accounts, the
Fund reserves the right to redeem at net asset value all shares in an account
which holds fewer than 50 shares (except accounts under retirement plans) and
to mail the proceeds to the shareholder, or the transfer agent may impose an
annual fee of $10.00. No account will be involuntarily redeemed or additional
fee imposed, if the value of the account is in excess of the Fund's minimum
initial investment. No CDSC will be imposed on involuntary redemptions of
shares. Shareholders will be notified before these redemptions are to be made
or this fee is imposed and will have 30 days to purchase additional shares to
bring their account up to the required minimum. Unless the number of shares
acquired by further purchases and dividend reinvestments, if any, exceeds the
number of shares redeemed, repeated redemptions from a smaller account may
eventually trigger this policy.
ADDITIONAL SERVICES AND PROGRAMS
Exchange Privilege
You may exchange shares of the Fund only for shares of the same class in
another John Hancock mutual fund.
If your investment objective changes, or if you wish to achieve further
diversification, John Hancock offers other funds with a wide range of
investment goals. Contact your registered representative or Selling Broker
and request a prospectus for the John Hancock funds that interest you. Read
the prospectus carefully before exchanging your shares. You can exchange
shares of each class of the Fund only for shares of the same class of another
John Hancock mutual fund. For this purpose, John Hancock
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funds with only one class of shares will be treated as Class A whether or not
they have been so designated.
Exchanges between funds which are not subject to a CDSC are based on their
respective net asset values. No sales charge or transaction charge is
imposed. Class B shares of the Fund which are subject to a CDSC may be
exchanged for Class B shares of another John Hancock fund without incurring
the CDSC; however these shares will be subject to the CDSC schedule of the
shares acquired (except that exchanges into John Hancock Short-Term Strategic
Income Fund and John Hancock Limited Term Government Fund will be subject to
the initial fund's CDSC). For purposes of computing the CDSC payable upon
redemption of shares acquired in an exchange, the holding period of the
original shares is added to the holding period of the shares acquired in an
exchange.
You may exchange Class B shares of the Fund into John Hancock Cash Management
Fund at net asset value. Shares so acquired will continue to be subject to a
CDSC upon redemption. The rate of the CDSC will be the rate in effect on the
original fund at the time of the exchange.
If you exchange Class B shares purchased prior to January 1, 1994 (except
John Hancock Short-Term Strategic Income Fund) for Class B shares of any
other John Hancock fund, you will continue to be subject to the CDSC schedule
that was in effect when they were purchased. See "Contingent Deferred Sales
Charge Alternative-- Class B shares."
The Fund reserves the right to require you to keep previously exchanged
shares (and reinvested dividends) in the Fund for 90 days before you are
permitted a new exchange.
Under exchange agreements with Broker Services, certain dealers, brokers and
investment advisers may exchange their clients' Fund shares, subject to the
terms of those agreements and Broker Services' right to reject or suspend
those exchanges at any time. Because of the restrictions and procedures under
those agreements, the exchanges may be subject to timing limitations and
other restrictions that do not apply to exchanges requested by shareholders
directly, as described above.
Because Fund performance and shareholders can be hurt by excessive trading,
the Fund reserves the right to terminate the exchange privilege for any
person or group that, in Broker Services' judgment, is involved in a pattern
of exchanges that coincide with a "market timing" strategy that may disrupt
the Fund's ability to invest effectively according to its investment
objective and policies, or might otherwise affect the Fund and its
shareholders adversely. The Fund may also temporarily or permanently
terminate the exchange privilege for any person who makes seven or more
exchanges out of the Fund per calendar year. Accounts under common control or
ownership will be aggregated for this purpose.
Although the Fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time. The
Fund may also terminate or alter the terms of the exchange privilege upon 60
days' notice to shareholders.
An exchange of shares is treated as a redemption of shares of one fund and
the purchase of shares in another for Federal income tax purposes. An
exchange may result in a gain or loss.
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When you make an exchange, your account registration must be identical in
both the existing and new account. The exchange privilege is available only
in states where the exchange can be made legally.
By Telephone
1. When you fill out the application for your purchase of Fund shares, you
automatically authorize exchanges by telephone unless you check the box
indicating that you do not wish to have the telephone exchange privilege.
2. Call 1-800-225-5291. Have the account number of your current fund and the
exact name in which it is registered available to give to the telephone
representative.
In Writing
1. In a letter request an exchange and list the following:
- -- the name and class of the fund whose shares you currently own
- -- your account number
- -- the name(s) in which the account is registered
- -- the name of the fund in which you wish your exchange to be invested
- -- the number of shares, all shares or the dollar amount you wish to exchange
Sign your request exactly as the account is registered.
2. Mail the request and information to:
John Hancock Fund Services, Inc.
P.O. Box 9116
Boston, Massachusetts 02205-9116
Reinvestment Privilege
If you redeem shares of the Fund, you may be able to reinvest the proceeds in
shares of the Fund or another John Hancock fund without paying an additional
sales charge.
1. No sales charge will apply to Class A shares that are reinvested in any of
the other John Hancock funds which are otherwise subject to a sales charge as
long as you reinvest within 120 days of the redemption date. If you paid a
CDSC upon a redemption, you may reinvest at net asset value in the same class
of shares from which you redeemed within 120 days. Your account will be
credited with the amount of the CDSC previously charged, and the reinvested
shares will continue to be subject to a CDSC. The holding period of the
shares acquired through reinvestment, for purposes of computing the CDSC
payable upon a subsequent redemption, will include the holding period of the
redeemed shares.
2. Any portion of your redemption may be reinvested in Fund shares or in
shares of any of the other John Hancock funds, subject to the minimum
investment limit of that fund.
3. To reinvest, you must notify Fund Services in writing. Include the account
number and class from which your shares were originally redeemed.
Systematic Withdrawal Plan
You can pay routine bills from your account or make periodic disbursements
from your retirement account to comply with IRS regulations.
1. You may elect the Systematic Withdrawal Plan may be elected at any time by
completing the Account Privileges Application which is attached to this
Prospectus. You can also obtain this application from your registered
representative or by calling 1-800-225-5291.
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2. To be eligible, you must have at least $5,000 in your account.
3. Payments from your account can be made monthly, quarterly, semi-annually
or annually or on a selected monthly basis to yourself or any other
designated payee.
4. There is no limit on the number of payees you may authorize, but all
payments must be made at the same time or intervals.
5. It is not advantageous to maintain a Systematic Withdrawal Plan
concurrently with purchases of additional Class A or Class B shares because
you may be subject to an initial sales charge on your purchases of Class A
shares or a CDSC on your redemptions of Class B shares. In addition,
redemptions are taxable events.
6. If the U.S. Postal Service cannot deliver your checks, or if deposits to a
bank account are returned, your redemptions will be discontinued.
Monthly Automatic Accumulation Program (MAAP)
You can make automatic investments and simplify your investing
1. You may authorize an investment to be drawn automatically each month from
your bank for investment in Fund shares, under the "Automatic Investing" and
"Bank Information" sections of the Account Privileges Application.
2. You may also authorize automatic investing through payroll deduction by
completing the Direct Deposit Investing section of the Account Privileges
Application.
3. You may terminate your Monthly Automatic Accumulation Program at any time.
4. There is no charge to you for this program, and there is no cost to the
Fund.
5. If you have payments being withdrawn from a bank account and we are
notified that the account has been closed, your withdrawals will be
discontinued.
Group Investment Program
Organized groups of at least four persons may establish accounts.
1. An individual account will be established for each participant, but the
initial sales charge for Class A shares will be based on the aggregate dollar
amount of all participants' investments. To determine how to qualify for this
program, contact your registered representative or call 1-800-225-5291.
2. The initial aggregate investment of all participants in the group must be
at least $250.
3. No additional charge is made in connection with this program. There is no
obligation to make investments beyond the minimum, and you may terminate the
program at any time.
Retirement Plans
1. You may use the Fund as a funding medium for various types of qualified
retirement plans, including Individual Retirement Accounts, Keogh Plans (H.R.
10), Pension and Profit Sharing Plans (including 401(k) Plans), Tax-Sheltered
Annuity Retirement Plans (403(b) or TSA Plans) and 457 Plans.
2. The initial investment minimum or aggregate minimum for any of the above
plans is $500. However, accounts being established as group IRA, SEP, SARSEP,
TSA, 401(k) and 457 Plans will be accepted without an initial minimum
investment.
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INSTITUTIONAL INVESTORS
Class C shares of the Fund are available only to the following types of
institutional investors: (i) Benefits plans not affiliated with the Adviser
which have at least $25,000,000 in plan assets, and either have a separate
trustee vested with investment discretion and certain limitations on the
ability of the plan beneficiaries to access their plan investments without
incurring adverse tax consequences or allow their participants to select
among one or more investment options, including the Fund
("participant-directed plans"); (ii) Banks and insurance companies which are
not affiliated with the Adviser purchasing shares for their own account;
(iii) Investment companies not affiliated with the Adviser; (iv) Tax-exempt
retirement plans of the Adviser and its affiliates, including affiliated
brokers; and (v) Unit investment trusts sponsored by Broker Services and
certain other sponsors. Participant-directed plans include, but are not
limited to, 401(k), TSA and 457 plans.
Class C shares are available to eligible institutional investors at net asset
value without the imposition of a sales charge and are not subject to ongoing
distribution fees imposed under a plan adopted pursuant to Rule 12b-1 under
the Investment Company Act of 1940. The minimum initial investment in Class C
shares is $1,000,000, but this requirement may be waived at the discretion of
the Fund's officers. Some individuals who are currently eligible to purchase
Class A or Class B shares may also be participants in plans that are eligible
to purchase Class C shares of the Fund. Plans that qualify to purchase Class
C shares will not be permitted to purchase shares of any other class of the
Fund.
Broker Services may pay a one-time payment of up to 0.15% of the amount
invested in Class C shares to a selling broker for its sales of Class C
shares. A person entitled to receive compensation for selling shares of the
Fund may receive different compensation with respect to sales of Class A,
Class B and Class C shares or any additional future class of shares.
The Reinvestment Privilege, Systematic Withdrawal Plan, Monthly Automatic
Accumulation Program, Group Investment Program and Retirement Plans are not
available for Class C shares.
If you are considering a purchase of Class C shares of the Fund, please call
John Hancock Fund Services, Inc. at 1-800-437-9312 to obtain information
about eligibility, instructions for purchase by check or wire and an
Institutional Account Application.
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John Hancock
LIMITED TERM
Government Fund
Investment Adviser
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
Principal Distributor
John Hancock Broker Distribution Services, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
Custodian
Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110
Transfer Agent
John Hancock Fund Services, Inc.
P.O. Box 9116
Boston, Massachusetts 02205-9116
Independent Auditors
Ernst & Young
200 Clarendon Street
Boston, Massachusetts 02116
HOW TO OBTAIN INFORMATION
ABOUT THE FUND
For: Service Information
Telephone Exchange call 1-800-225-5291
Investment-by-Phone
Telephone Redemption
For:TDDcall 1-800-554-6713
JHD-2200P 5/94
JOHN HANCOCK
LIMITED TERM
GOVERNMENT FUND
Class A and Class B Shares
Prospectus
May 1, 1994
A mutual fund seeking current income and security of principal through
investment primarily in securities of the United States government and its
agencies.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
Telephone 1-800-225-5291
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