<PAGE> 1
Registration No. 2-89338
ICA No. 811-03961
AS FILED ON NOVEMBER 20, 1995
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. / /
Post-Effective Amendment No. 16 / /
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 21
JOHN HANCOCK CAPITAL GROWTH FUND
(Formerly Transamerica Capital Growth Fund)
(Exact Name of Registrant as Specified in Articles of Incorporation)
101 Huntington Avenue, Boston, Massachusetts 02199-7603
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (617) 375-1700
Thomas H. Drohan, Esq.
John Hancock Advisers, Inc.
101 Huntington Avenue, Boston, Massachusetts 02199-7603
(Name and Address of Agent for Service)
----------
Copies to:
It is proposed that this filing will become effective:
/X/ immediately upon filing pursuant to paragraph (b)
/ / on (date) pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)
/ / on (date) pursuant to paragraph (a) of rule 485
Pursuant to Rule 24f-2(b)(3) under the Investment Company Act of 1940,
registrant hereby terminates its Declaration previously filed under said Rule
24f-2.
<PAGE> 2
Registrant has filed a Declaration pursuant to Rule 24f-2 under the
Investment Company Act of 1940. Concurrently with the filing of this
Post-Effective Amendment, registrant is filing its final Rule 24f-2 Notice. The
sole purpose of this Post-Effective Amendment is to terminate, pursuant to Rule
24f-2(b)(3), registrant's prior Rule 24f-2 Declaration, in as much as
registrant has ceased its operations.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereto duly
authorized, in the City of Boston and The Commonwealth of Massachusetts on the
15th day of November, 1995.
JOHN HANCOCK CAPITAL GROWTH FUND
By: *
-----------------------------
Edward J. Boudreau, Jr.
Chairman and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
*
- ------------------------------ Chairman and Chief Executive
Edward J. Boudreau, Jr. Officer (Principal Executive
Officer)
/s/James B. Little
- ------------------------------ Senior Vice President and Chief November 15, 1995
James B. Little Financial Officer (Principal
Financial and Accounting Officer)
* Trustee
- ------------------------------
James F. Carlin
* Trustee
- ------------------------------
William H. Cunningham
* Trustee
- ------------------------------
Charles F. Fretz
</TABLE>
C-1
<PAGE> 4
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
* Trustee
- ------------------------------
Harold R. Hiser, Jr.
* Trustee
- ------------------------------
Charles L. Ladner
* Trustee
- ------------------------------
Leo E. Linbeck, Jr.
* Trustee
- ------------------------------
Patricia P. McCarter
* Trustee
- ------------------------------
Steven R. Pruchansky
* Trustee
- ------------------------------
Norman H. Smith
* Trustee
- ------------------------------
John P. Toolan
*By: /s/Thomas H. Drohan November 15, 1995
-------------------
Thomas H. Drohan,
Attorney-in-Fact
</TABLE>
C-2
<PAGE> 1
JOHN HANCOCK FUNDS
JOHN HANCOCK
CAPITAL GROWTH
FUND
FINAL REPORT
SEPTEMBER 15, 1995
<PAGE> 2
John Hancock Funds - John Hancock Capital Growth Fund
TRUSTEES
Edward J. Boudreau, Jr.
James F. Carlin*
William H. Cunningham*
Charles L. Ladner*
Leo E. Linbeck*
Patricia P. McCarter *
Steven R. Pruchansky*
Lt. Gen. Norman H. Smith, USMC (Ret.) *
John P. Toolan *
* Members of the Audit Committee
OFFICERS
Edward J. Boudreau, Jr.
Chairman and Chief Executive Officer
Robert G. Freedman
Vice Chairman and
Chief Investment Officer
Anne C. Hodsdon
President
Thomas H. Drohan
Senior Vice President and Secretary
James B. Little
Senior Vice President and
Chief Financial Officer
John A. Morin
Vice President
Susan S. Newton
Vice President, Assistant Secretary and
Compliance Officer
James J. Stokowski
Vice President and Treasurer
CUSTODIAN
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
TRANSFER AGENT
John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
INVESTMENT ADVISER
John Hancock Advisers, Inc
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc
101 Huntington Avenue
Boston, Massachusetts 02199-7603
LEGAL COUNSEL
Hale and Dorr
60 State Street
Boston, Massachusetts 02109
<PAGE> 3
<TABLE>
John Hancock Capital Growth Fund
STATEMENT OF ASSETS AND LIABILITIES
Final Report September 15, 1995* (Unaudited)
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Common stocks (cost - $66,100,161) $86,725,213
Preferred stocks (cost - $10,500) 10,150
Joint repurchase agreement (cost - $519,000) 519,000
Corporate savings account 197
----------------------------------------------
87,254,560
Dividends receivable 49,984
Other assets 19,185
----------------------------------------------
Total Assets 87,323,729
------------------------------------------------------------------------------------
LIABILITIES:
Payable to John Hancock Advisers, Inc.
and affiliates - Note B 58,648
Accounts payable and accrued expenses 113,369
----------------------------------------------
Total Liabilities 172,017
------------------------------------------------------------------------------------
NET ASSETS:
Capital paid-in 66,540,378
Net unrealized appreciation of investments 20,624,702
Distributions in excess of net realized gain on investments (13,368)
----------------------------------------------
Net Assets $87,151,712
====================================================================================
NET ASSET VALUE PER SHARE:
(Based on net assets and shares of beneficial
interest outstanding - unlimited number of shares
authorized with $0.01 per share par value, respectively)
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
Class A - 77,588,384 / 5,776,941 $ 13.43
====================================================================================================================
Class B - 9,563,328 / 725,166 $ 13.19
====================================================================================================================
MAXIMUM OFFERING PRICE PER SHARE**
Class A - ($13.43 x 105.26%) $ 14.14
====================================================================================================================
</TABLE>
* The net assets of the John Hancock Capital Growth Fund (the "Fund) were
merged into the John Hancock Growth Fund as of the close of business on
September 15, 1995 and the Fund was subsequently terminated. The Statement
of Assets and Liabilities reflects the Fund's position prior to the
transfer of the net assets and the termination of the Fund. (See Note A to
the Notes to Financial Statements).
** On single retail sales of less than $50,000. On sales of $50,000 or more
and on group sales the offering price is reduced.
See notes to financial statements.
<PAGE> 4
<TABLE>
John Hancock Capital Growth Fund
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1995 TO YEAR ENDED
INCREASE (DECREASE) IN NET ASSETS: SEPTEMBER 15, 1995 DECEMBER 31,
FROM OPERATIONS: (UNAUDITED)** 1994
------------------ -----------
<S> <C> <C>
Net investment loss ($424,073) ($190,333)
Net realized gain on investments sold 1,880,671 2,453,497
Change in net unrealized appreciation/depreciation of investments 17,361,735 (12,203,891)
-----------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations 18,818,333 (9,940,727)
-----------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gain on investments sold
Class A - ($0.2352 and $0.2930 per share, respectively) (1,340,164) (1,798,987)
Class B - ($0.2352 and $0.2930 per share, respectively) (166,981) (429,429)
Distributions in excess of net realized gain on investments
Class A - ($0.0021 and none per share, respectively) (11,887) *****
Class B - ($0.0021 and none per share, respectively) (1,481) *****
-----------------------------------------
Total Distributions to Shareholders (1,520,513) (2,228,416)
-----------------------------------------
FROM FUND SHARE TRANSACTIONS - NET* (16,887,719) 12,917,743
-----------------------------------------
NET ASSETS:
Beginning of period 86,741,611 85,993,011
End of period (including distributions in excess of net realized gain
on investments of $13,368 and none, respectively) $87,151,712 $86,741,611
=========================================
</TABLE>
* ANALYSIS OF FUND SHARE TRANSACTIONS:
<TABLE>
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1995 TO
SEPTEMBER 15, 1995 YEAR ENDED
(UNAUDITED)** DECEMBER 31, 1994
------------------ -----------------
SHARES AMOUNT SHARES AMOUNT
------ ------ ------ ------
<S> <C> <C> <C> <C>
CLASS A
Shares sold 2,651,949 $31,602,823 3,163,337 $37,415,876
Shares issued to shareholders in reinvestment
of distributions 91,846 1,247,267 150,788 1,640,574
----------------------------------------------------------------------
2,743,795 32,850,090 3,314,125 39,056,450
Less shares repurchased (3,378,083) (38,370,535) (3,660,949) (43,573,191)
----------------------------------------------------------------------
Net decrease (634,288) ($5,520,445) (346,824) ($4,516,741)
======================================================================
CLASS B
Shares sold 248,975 $2,998,919 2,312,014 $27,133,045
Shares issued to shareholders in reinvestment
of distributions 12,281 163,954 33,057 355,028
----------------------------------------------------------------------
261,256 3,162,873 2,345,071 27,488,073
Less shares repurchased (1,078,482) (14,530,147) (837,605) (10,053,589)
----------------------------------------------------------------------
Net increase (decrease) (817,226) ($11,367,274) 1,507,466 $17,434,484
======================================================================
</TABLE>
** The net assets of the Fund merged with John Hancock Growth Fund as of the
close of business on September 15, 1995, and the Fund was subsequently
terminated. The Statement of Changes in Net Assets does not reflect the
merger of the net assets or termination of the Fund. (See Note A to the
Notes to Financial Statements).
See notes to financial statements.
<PAGE> 5
<TABLE>
John Hancock Capital Growth Fund
STATEMENT OF OPERATIONS
For the period January 1, 1995 to
September 15, 1995* (Unaudited)
- -------------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Dividends $536,388
Interest 47,486
------------------------
583,874
------------------------
Expenses:
Investment management fee - Note B 371,157
Transfer agent fee 261,420
Distribution/service fee - Note B
Class A 126,272
Class B 85,410
Custodian fee 40,000
Printing 32,571
Registration and filing fees 27,191
Auditing fee 24,485
Legal fees 13,466
Miscellaneous 11,732
Trustees' fees 8,336
Advisory board fee 5,907
------------------------
Total Expenses 1,007,947
---------------------------------------------------------------
Net Investment Loss (424,073)
---------------------------------------------------------------
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments sold 1,880,671
Change in net unrealized appreciation/depreciation
of investments 17,361,735
------------------------
Net Realized and Unrealized Gain on
Investments 19,242,406
---------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations $18,818,333
===============================================================
</TABLE>
* The net assets of the Fund were merged into the John Hancock Growth
Fund as of the close of business on September 15, 1995 and the Fund was
subsequently terminated The Statement of Operations reflects the Fund's
position prior to the transfer of assets and the termination of the Fund.
(See Note A to the Notes to Financial Statements).
See notes to financial statements.
<PAGE> 6
<TABLE>
John Hancock Funds - Capital Growth Fund
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout the period indicated, investment returns, key
ratios and supplemental data are as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
FOR THE PERIOD
JANUARY 1, 1995 TO
SEPTEMBER 15, 1995 YEAR ENDED DECEMBER 31,
-------------------------------------------------------
(UNAUDITED) 1994 (c) 1993 1992 1991 1990
----------- -------- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
CLASS A
Per Share Operating Performance
Net Asset Value, Beginning of Period $10.93 $12.66 $11.90 $11.47 $9.82 $10.65
------- ------- ------- ------- ------- -------
Net Investment Loss (a) (0.05) (0.02) (0.11) (0.14) (0.13) (0.09)
Net Realized and Unrealized Gain (Loss) on
Investments 2.79 (1.42) 0.87 0.76 3.73 (0.60)
------- ------- ------- ------- ------- -------
Total from Investment Operations 2.74 (1.44) 0.76 0.62 3.60 (0.69)
------- ------- ------- ------- ------- -------
Less Distributions:
Dividends from Net Investment Income ****** ****** ****** ****** ****** (0.01)
Distributions from Net Realized Gain on
Investments Sold (0.24) (0.29) ****** (0.19) (1.95) (0.13)
------- ------- ------- ------- ------- -------
Total Distributions (0.24) (0.29) ****** (0.19) (1.95) (0.14)
------- ------- ------- ------- ------- -------
Net Asset Value, End of Period $13.43 (d) 10.93 $12.66 $11.90 $11.47 $9.82
======= ======= ======= ======= ======= =======
Total Investment Return at Net Asset Value 25.02% (b) (11.34%) 6.39% 5.48% 38.00% (6.37%)
Ratios and Supplemental Data
Net Assets, End of Period (000's omitted) $77,588 $70,090 $85,553 $94,861 $89,008 $56,794
Ratio of Expenses to Average Net Assets 1.59%* 1.59% 1.46% 1.41% 1.68% 1.54%
Ratio of Net Investment Loss to Average Net Assets (0.61%)* (0.14%) (0.92%) (1.20%) (1.04%) (0.82%)
Portfolio Turnover Rate 131% 290% 159% 70% 138% 152%
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIOD
JUNE 30, 1993
FOR THE PERIOD (COMMEMCEMENT
JANUARY 1, 1995 TO YEAR ENDED OF OPERATIONS)
SEPTEMBER 15, 1995 DECEMBER 31, TO DECEMBER 31,
(UNAUDITED) 1994(c) 1993
----------- ------- ----
<S> <C> <C> <C>
CLASS B
Per Share Operating Performance
Net Asset Value, Beginning of Period $10.80 $12.59 $11.28
------ ------ ------
Net Investment Loss (a) (0.11) (0.09) (0.07)
Net Realized and Unrealized Gain (loss) on
Investments 2.74 (1.41) 1.38
------ ------ ------
Total from Investment Operations 2.63 (1.50) 1.31
------ ------ ------
Less Distributions:
Distributions from Net Realized Gain on
Investment Sold (0.24) (0.29) ******
------ ------ ------
Net Asset Value, End of Period $13.19 (d) $10.80 $12.59
====== ====== ======
Total Investment Return at Net Asset Value 24.30%(b) (11.88%) 11.61%(b)
Ratios and Supplemental Data
Net Assets, End of Period (000's omitted) $9,563 $16,652 $440
Ratio of Expenses to Average Net Assets 2.30%* 2.34% 2.09%*
Ratio of Net Investment Loss to Average Net Assets (1.32%)* (0.89%) (1.07%)*
Portfolio Turnover Rate 131% 290% 159%
</TABLE>
* On an annualized basis.
(a) On average month end shares outstanding.
(b) Not annualized.
(c) On December 22, 1994, John Hancock Advisers, Inc. became the investment
adviser of the Fund.
(d) Net asset value per share, before the merger of assets to the John
Hancock Growth Fund, and the termination of the Fund. (See Note A to
the Notes to Financial Statements).
See notes to financial statements.
<PAGE> 7
JOHN HANCOCK FUNDS - CAPITAL GROWTH FUND
<TABLE>
<CAPTION>
Schedule of Investments
September 15, 1995 (Unaudited)
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>
COMMON STOCKS
AEROSPACE (1.69%)
Thiokol Corp. 40,000 * $1,470,000
----------
BANKS (4.14%)
Chase Manhattan Corp. 60,000 * 3,607,500
----------
BROADCASTING (2.23%)
Lin Television Corp. ** 55,000 * 1,945,625
----------
CHEMICALS (5.82%)
Eastman Chemical Co. 20,000 1,375,000
Millipore Corp. 100,000 3,700,000
----------
5,075,000
----------
COMPUTERS (23.41%)
Bay Networks, Inc.** 75,000 * 3,871,875
Cognex Corp. ** 60,000 2,970,000
Compaq Computer Corp.** 60,000 * 2,947,500
Gateway 2000, Inc. ** 70,000 * 2,030,000
Seagate Technology, Inc.** 70,000 * 3,150,000
Silicon Graphics, Inc.** 70,000 2,651,250
Sun Microsystems, Inc.** 50,000 2,781,250
----------
20,401,875
----------
DIVERSIFIED OPERATIONS (2.95%)
ITT Corp. 20,000 * 2,570,000
----------
DRUGS (9.22%)
Merck & Co., Inc. 80,000 4,250,000
Schering-Plough Corp. 80,000 3,790,000
----------
8,040,000
----------
ELECTRONICS (11.63%)
Altera Corp. ** 25,000 * 1,662,500
Applied Materials, Inc.** 40,000 * 4,020,000
Intel Corp. 30,000 * 1,863,750
Teradyne, Inc. ** 70,000 * 2,590,000
----------
10,136,250
----------
</TABLE>
See notes to financial statements.
<PAGE> 8
JOHN HANCOCK FUNDS - CAPITAL GROWTH FUND
<TABLE>
Schedule of Investments
September 15, 1995 (Unaudited)
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>
FINANCE (11.16%)
Dean Witter Discover & Co. 50,000 * 2,887,500
Edwards (A.G.), Inc. 45,000 * 1,096,875
Lehman Brothers Holdings, Inc. 40,000 * 950,000
Money Stores, Inc. (The) 15,000 * 1,001,250
Paychex, Inc. 85,000 3,793,125
----------
9,728,750
----------
HOTELS & MOTELS (1.04%)
Marriott International, Inc. 25,000 906,250
----------
LEISURE & RECREATION (0.95%)
Brassie Golf Corp. ** 315,000 826,875
----------
METALS (5.78%)
Freeport McMoran Copper & Gold (Class A) 40,000 * 985,000
Kennametal, Inc. 100,000 * 4,050,000
----------
5,035,000
----------
OIL & GAS (2.75%)
Western Atlas, Inc. ** 46,600 * 2,399,900
----------
OFFICE EQUIPMENT & SUPPLIES (1.45%)
Pitney Bowes, Inc. 30,000 * 1,260,000
----------
RETAIL (3.54%)
Landry's Seafood Restaurants, Inc. ** 120,000 2,190,000
Men's Wearhouse, Inc. (The) ** 30,000 892,500
----------
3,082,500
----------
SOFTWARE (9.67%)
Electronic Arts, Inc. ** 40,000 * 1,535,000
Informix Corp. ** 65,000 * 1,925,625
Microsoft Corp.** 25,000 * 2,335,938
Oracle Corp.** 70,000 * 2,633,750
----------
8,430,313
----------
TELECOMMUNICATIONS (2.08%)
Ericsson (L.M.) Telephone Co., (Class B),
American Depository Receipt, (ADR) 75,000 1,809,375
----------
TOTAL COMMON STOCKS
(Cost $66,100,161) (99.51%) 86,725,213
-------- ----------
</TABLE>
See notes to financial statements.
<PAGE> 9
JOHN HANCOCK FUNDS - CAPITAL GROWTH FUND
<TABLE>
SCHEDULE OF INVESTMENTS
September 15, 1995 (Unaudited)
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C> <C>
PREFERRED STOCK
ELECTRONICS (0.01%)
Teledyne, Inc., $1.20 Series E 700 10,150
------
TOTAL PREFERRED STOCK
(Cost $10,500) (0.01%) 10,150
----------------- ------
</TABLE>
<TABLE>
<CAPTION>
INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000'S OMITTED) VALUE
------------------- ---- ----------------- -----
<S> <C> <C> <C>
SHORT TERM INVESTMENTS
JOINT REPURCHASE AGREEMENT (0.60%)
Investment in a joint repurchase agreement
transaction with U.B.S. Securities, Inc. -
Dated 09-15-95, Due 09-18-95 (secured by
U.S. Treasury Note, 6.25% due 08-31-96
and 6.875% due 02-28-97) - Note A 5.85% $ 519 $ 519,000
-----------
CORPORATE SAVINGS ACCOUNT (0.00%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 3.00% 197
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $519,197) (0.60%) 519,197
--------------- -------------- -----------
TOTAL INVESTMENTS (100.12%) $87,254,560
============== ===========
</TABLE>
* Securities other than short-term investments, newly added to the portfolio
during the period ended September 15, 1995.
** Non-income producing security.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the fund.
See notes to financial statements.
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS
JOHN HANCOCK FUNDS - JOHN HANCOCK CAPITAL GROWTH FUND
(UNAUDITED)
NOTE A --
ACCOUNTING POLICIES
John Hancock Capital Growth Fund, (the "Fund") was a diversified, open-end
management investment company, registered under the Investment Company Act of
1940. The Trustees authorized the issuance of two classes of the Fund,
designated as Class A and Class B. The shares of each class represented an
interest in the same portfolio of investments of the Fund and had equal rights
to voting, redemptions, dividends, and liquidation, except that certain
expenses, subject to the approval of the Trustees, were applied differently to
each class of shares in accordance with current regulations of the Securities
and Exchange Commission and the Internal Revenue Service. Shareholders of a
class which bears distribution/service expenses under the terms of a
distribution plan had exclusive voting rights regarding such distribution plan.
Class A shares were subject to an initial sales charge of up to 5.00% and a
12b-1 distribution plan. Prior to May 15, 1995, the maximum sales charge was
5.75%. Class B shares were subject to a contingent deferred sales charge and a
separate 12b-1 distribution plan.
On September 8, 1995, the shareholders of the Fund approved a plan of
reorganization between the Fund and John Hancock Growth Fund ("Growth Fund")
providing for the transfer of substantially all of the assets and liabilities of
the Fund to Growth Fund in exchange solely for shares of beneficial interest of
Growth Fund. After this transaction and as of the close of business on September
15, 1995, the Fund was terminated. The financial statements presented herein
reflect the position of the Fund prior to the exchange of the net assets and
termination of the Fund. Significant accounting policies of the Fund were as
follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio were valued
on the basis of market quotations, valuations provided by independent pricing
services or, at fair value as determined in good faith in accordance with
procedures approved by the Trustees. Short-term debt investments maturing within
60 days were valued at amortized cost which approximates market value.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other registered
investment companies having a management contract with John Hancock Advisers,
Inc. (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial Group,
may participate in a joint repurchase agreement transaction. Aggregate cash
balances were invested in one or more repurchase agreements, whose underlying
securities were obligations of the U.S. government and/or its agencies. The
Fund's custodian bank received delivery of the underlying securities for the
joint account on the Fund's behalf. The Adviser was responsible for ensuring
that the agreement was fully collateralized at all times.
INVESTMENT TRANSACTIONS Investment transactions were recorded as of the date of
purchase, sale or maturity. Net realized gains and losses on sales of
investments were determined on the identified cost basis.
FEDERAL INCOME TAXES The Fund's policy was to comply with the requirements of
the Internal Revenue Code that were applicable to regulated investment companies
and distributed all of its taxable income, including any net realized gain on
investments, to its shareholders. Therefore, no federal income tax provision was
required.
DIVIDENDS, DISTRIBUTIONS AND INTEREST Dividend income on investment securities
was recorded on the ex-dividend date. Interest income on investment securities
was recorded on the accrual basis.
The Fund recorded all distributions to shareholders from net investment income
and realized gains on the ex-dividend date. Such distributions were determined
in conformity with income tax regulations, which may differ from generally
accepted accounting principles. Dividends paid by the Fund, if any, with respect
to each class of shares were calculated in the same manner, at the same time and
were in the same amount, except for the effect of expenses that were applied
differently to each class as explained previously.
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
JOHN HANCOCK FUNDS - JOHN HANCOCK CAPITAL GROWTH FUND
CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains
(losses) were determined at the Fund level and allocated daily to each class of
shares based on the appropriate net assets of the respective classes.
Distribution/service fees if any, were calculated daily at the class level based
on the appropriate net assets of each class and the specific expense rate(s)
applicable to each class.
NOTE B --
MANAGEMENT FEE,
ADMINISTRATIVE SERVICES AND TRANSACTIONS WITH
AFFILIATES AND OTHERS
Under the investment management contract, the Fund paid a monthly management fee
to the Adviser for a continuous investment program equivalent, to 0.625% of the
Fund's average daily net assets.
In the event normal operating expenses of the Fund, exclusive of certain
expenses prescribed by state law, were in excess of the most restrictive state
limit where the Fund was registered to sell shares of beneficial interest, the
fee payable to the Adviser was reduced to the extent of such excess and the
Adviser made additional arrangements necessary to eliminate any remaining excess
expenses. The limits were 2.5% of the first $30,000,000 of the Fund's average
daily net asset value, 2.0% of the next $70,000,000 and 1.5% of the remaining
average daily net asset value.
The Fund has a distribution agreement with John Hancock Funds, Inc. ("JH
Funds"), a wholly-owned subsidiary of the Adviser. For the period ended
September 15, 1995, JH Funds received net sales charges of $34,828 with regard
to sales of Class A shares. Out of this amount, $3,536 was retained and used for
printing prospectuses, advertising, sales literature and other purposes, $31,034
was paid as sales commissions to unrelated broker-dealers and $258 was paid as
sales commissions to sales personnel of John Hancock Distributors, Inc.
("Distributors"), Tucker Anthony, Incorporated ("Tucker Anthony") and Sutro &
Co., Inc. ("Sutro"), all of which are broker dealers. The Adviser's indirect
parent, John Hancock Mutual Life Insurance Company, is the indirect sole
shareholder of Distributors and John Hancock Freedom Securities Corporation and
its subsidiaries which include Tucker Anthony and Sutro.
Class B shares which were redeemed within six years of purchase were subject
to a contingent deferred sales charge ("CDSC") at declining rates beginning at
5.0% of the lesser of the current market value at the time of redemption or the
original purchase cost of the shares being redeemed. Proceeds from the CDSC were
paid to JH Funds and were used in whole or in part to defray its expenses
related to providing distribution related services to the Fund in connection
with the sale of Class B shares. For the period ended September 15, 1995
contingent deferred sales charges received by JH Funds amounted to $61,111.
In addition, to compensate JH Funds for the services it provided as
distributor of shares of the Fund, the Fund adopted a Distribution Plan with
respect to Class A and Class B pursuant to Rule 12b-1 under the Investment
Company Act of 1940. Accordingly, the Fund made payments to JH Funds for
distribution and service expenses which in total did not exceed on an annual
basis 0.25% of the Fund's average daily net assets attributable to Class A
shares and 1.00% of the Fund's average daily net assets attributable to Class B
shares, to reimburse JH Funds for its distribution and service costs. Up to a
maximum of 0.25% of such payments were service fees as defined by the amended
Rules of Fair Practice of the National Association of Securities Dealers. Under
the amended Rules of Fair Practice, curtailment of a portion of the Fund's 12b-1
payments could occur under certain circumstances. In order to comply with this
rule, the 12b-1 fee was decreased on Class B shares to 0.75% effective August 1,
1995.
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS
JOHN HANCOCK FUNDS - JOHN HANCOCK CAPITAL GROWTH FUND
The Board of Trustees approved a shareholder servicing agreement between the
Fund and John Hancock Investor Services Corporation ("Investor Services"), a
wholly owned subsidiary of The Berkeley Financial Group, for the period between
December 22, 1994 and May 12, 1995, inclusive under which Investor Services
processed telephone transactions on behalf of the Fund. As of May 15, 1995, the
Fund entered into a full service transfer agent agreement with Investor
Services. Prior to this date The Shareholder Services Group was the transfer
agent. The Fund paid transfer agent fees based on the number of shareholder
accounts and certain out of pocket expenses.
Mr. Edward J. Boudreau, Jr. was a director and officer of the Adviser and its
affiliates as well as Trustee of the Fund. The compensation of unaffiliated
Trustees was borne by the Fund. Effective with the fees paid for 1995, the
unaffiliated Trustees could elect to defer their receipt of this compensation
under the John Hancock Group of Funds Deferred Compensation Plan. The Fund made
investments into other John Hancock Funds, as applicable, to cover its liability
with regard to the deferred compensation. Investments to cover the Fund's
deferred compensation liability were recorded on the Fund's books as other
assets. The deferred compensation liability was marked to market on a periodic
basis and income earned by the investment was recorded on the Fund's books.
The Fund has an independent advisory board composed of certain members of the
former Transamerica Board of Trustees who provide advice to the current Trustees
in order to facilitate a smooth management transition for which the Fund pays
the advisory board and its counsel a fee.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than obligations of the
U.S. government and its agencies and short-term securities, during the period
ended September 15, 1995, aggregated $108,085,575 and $121,396,679,
respectively. There were no purchases or sales of long-term obligations of the
U.S. government and its agencies during the period ended September 15, 1995.
The cost of investments owned at September 15, 1995 (excluding the corporate
savings account) for federal income tax purposes was $66,629,661. Gross
unrealized appreciation and depreciation of investments aggregated $20,705,052
and $80,350, respectively, resulting in net unrealized appreciation of
$20,624,702.
NOTE D --
RECLASSIFICATION OF ACCOUNTS
During the period ended September 15, 1995, the Fund reclassified amounts to
reflect a decrease in accumulated net investment loss of $478,023, a decrease
in accumulated net realized gain on investments of $424,073 and a decrease in
capital paid-in of $53,950. This represents the cumulative amount necessary to
report these balances on a tax basis, excluding certain temporary differences,
as of September 15, 1995. Additional adjustments may be needed in subsequent
reporting periods. These reclassifications, which have no impact on the net
asset value of the Fund, are primarily attributable to the treatment of net
operating losses in the computation of distributable income and capital gains
under federal tax rules versus generally accepted accounting principle.
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