<PAGE> 1
JOHN HANCOCK
REGIONAL BANK FUND
JOHN HANCOCK
GOLD & GOVERNMENT FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
MARCH 1, 1995 AS REVISED AUGUST 1, 1995
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TABLE OF CONTENTS
<TABLE>
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Page
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Expense Information................................................................... 2
The Funds' Financial Highlights....................................................... 4
Investment Objectives and Policies.................................................... 6
Regional Bank Fund............................................................... 6
Gold & Government Fund........................................................... 7
Certain Investment Strategies......................................................... 10
Organization and Management of the Funds.............................................. 11
Alternative Purchase Arrangements..................................................... 13
The Funds' Expenses................................................................... 14
Dividends and Taxes................................................................... 15
Performance........................................................................... 16
How to Buy Shares..................................................................... 18
Share Price........................................................................... 19
How to Redeem Shares.................................................................. 25
Additional Services and Programs...................................................... 27
</TABLE>
This Prospectus sets forth information about the John Hancock Regional Bank
Fund ("Regional Bank Fund" or the "Fund"), and John Hancock Gold & Government
Fund ("Gold & Government Fund" or the "Fund") each a diversified series of
Freedom Investment Trust (the "Trust"), that you should know before investing.
Please read and retain it for future reference.
Additional information about the Funds has been filed with the Securities and
Exchange Commission (the "SEC"). You can obtain a copy of the Funds' Statement
of Additional Information, dated March 1, 1995, and incorporated by reference
into this Prospectus, free of charge by writing or telephoning: John Hancock
Investor Services Corporation, P.O. Box 9116, Boston, Massachusetts 02205-9116,
1-800-225-5291 (1-800-554-6713 TDD).
SHARES OF THE FUNDS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE> 2
EXPENSE INFORMATION
The purpose of the following information is to help you understand the various
fees and expenses that you will bear, directly or indirectly, when you purchase
shares of either Fund. The operating expenses included in the table and the
hypothetical example below are based on fees and expenses for the Funds' fiscal
year ended October 31, 1994 adjusted to reflect certain current expenses. Actual
fees and expenses in the future may be greater or less than those shown.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
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<S> <C> <C>
GOLD & GOVERNMENT FUND
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales charge imposed on purchases (as a percentage of offering price).............................. 5.00% None
Maximum sales charge imposed on reinvested dividends....................................................... None None
Maximum deferred sales charge.............................................................................. None* 5.00%
Redemption fee(a).......................................................................................... None None
Exchange fee............................................................................................... None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fee............................................................................................. 0.80% 0.80%
12b-1 fee**................................................................................................ 0.30% 1.00%
Other expenses............................................................................................. 0.49% 0.48%
Total Fund operating expenses.............................................................................. 1.59% 2.28%
</TABLE>
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
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<S> <C> <C>
REGIONAL BANK FUND
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales charge imposed on purchases (as a percentage of offering price).............................. 5.00% None
Maximum sales charge imposed on reinvested dividends....................................................... None None
Maximum deferred sales charge.............................................................................. None* 5.00%
Redemption fee(a).......................................................................................... None None
Exchange fee............................................................................................... None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fee............................................................................................. 0.80% 0.80%
12b-1 fee**................................................................................................ 0.30% 1.00%
Other expenses............................................................................................. 0.38% 0.35%
Total Fund operating expenses.............................................................................. 1.48% 2.15%
<FN>
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* No sales charge is payable at the time of purchase on investments of $1 million or more, but for such investments a
contingent deferred sales charge may be imposed, as described under the caption "Share Price," in the event of certain
redemption transactions within one year of purchase.
** The amount of the 12b-1 fee used to cover service expenses will be up to 0.25% of average daily net assets, and the
remaining portion will be used to cover distribution expenses.
(a) Redemption by wire fee (currently $4.00) not included.
</TABLE>
2
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<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
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<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:
GOLD & GOVERNMENT FUND
Class A shares.............................................................. $65 $ 98 $132 $229
Class B shares
--Assuming complete redemption at end of period............................. $73 $101 $142 $244
--Assuming no redemption.................................................... $23 $ 71 $122 $244
REGIONAL BANK FUND
Class A shares.............................................................. $64 $ 94 $127 $218
Class B shares
--Assuming complete redemption at end of period............................. $71 $ 97 $135 $231
--Assuming no redemption.................................................... $21 $ 67 $115 $231
</TABLE>
(The example should not be considered as a representation of past or future
expenses. Actual expenses may be greater or less than shown.)
Each 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 referenced above are more fully explained in
this Prospectus under the caption "The Funds' Expenses" and in the Statement of
Additional Information under the captions "Investment Advisory and Other
Services" and "Distribution Contract."
3
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<TABLE>
THE FUNDS' FINANCIAL HIGHLIGHTS
The following table of Financial Highlights has been examined by Price
Waterhouse LLP, the Funds' independent accountants, whose unqualified reports
are included in the Funds' 1994 Annual Reports and are included in the Funds'
Statement of Additional Information. Further information about the performance
of the Funds is contained in each Fund's Annual Report to shareholders which may
be obtained free of charge by writing or telephoning John Hancock Investor
Services Corporation ("Investor Services"), at the address or telephone number
listed on the front page of this Prospectus.
Selected data for each class of shares outstanding throughout each period
indicated is as follows:
REGIONAL BANK FUND
<CAPTION>
YEAR ENDED OCTOBER 31,
-----------------------------------------------------------------------
1994 1993 1992 1991 1990 1989 1988
-------- -------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
CLASS A**
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period................ $ 21.62 $ 17.47 $ 13.47
-------- -------- -------
Net investment income............................... 0.39*** 0.26*** 0.21
Net realized and unrealized gain (loss) on
investments........................................ 0.91 5.84 3.98
-------- -------- -------
Total from investment operations............... 1.30 6.10 4.19
-------- -------- -------
Less distributions:
Dividends from net investment income............... (0.34) (0.26) (0.19)
Distributions from net realized gain on investments
sold............................................. (1.06) (1.69) --
-------- -------- -------
Total distributions............................ (1.40) (1.95) (0.19)
-------- -------- -------
Net asset value, end of period...................... $ 21.52 $ 21.62 $ 17.47
======== ======== =======
Total investment return at net asset value.......... 6.44% 37.45% 31.26%(a)
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of year (000's omitted)............. $216,978 $ 94,158 $31,306
Ratio of expenses to average net assets............. 1.34% 1.35% 1.41%*
Ratio of net investment income to average net
assets............................................. 1.78% 1.29% 1.64%*
Portfolio turnover rate............................. 13% 35% 53%
CLASS B
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period................ $ 21.56 $ 17.44 $ 13.76 $ 8.13 $ 13.00 $ 11.89 $ 10.02
-------- -------- ------- ------- ------- ------- -------
Net investment income............................... 0.23*** 0.15*** 0.18 0.29 0.30 0.20 0.16
Net realized and unrealized gain (loss) on
investment......................................... 0.91 5.83 4.56 5.68 (4.19) 2.02 3.12
-------- -------- ------- ------- ------- ------- -------
Total from investment operations............... 1.14 5.98 4.74 5.97 (3.89) 2.22 3.28
-------- -------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income............... (0.21) (0.17) (0.28) (0.34) (0.19) (0.16) (0.15)
Distributions from net realized gain on
investments sold................................. (1.06) (1.69) (0.78) -- (0.76) (0.95) (1.26)
Distributions from capital paid-in................. -- -- -- -- (0.03) -- --
-------- -------- ------- ------- ------- ------- -------
Total distributions............................ (1.27) (1.86) (1.06) (0.34) (0.98) (1.11) (1.41)
-------- -------- ------- ------- ------- ------- -------
Net asset value, end of period...................... $ (21.43) $ 21.56 $ 17.44 $ 13.76 $ 8.13 $ 13.00 $ 11.89
-------- -------- ------- ------- ------- ------- -------
Total investment return at net asset value.......... 5.69% 36.71% 37.20% 75.35% (32.29%) 20.46% 36.89%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000's omitted)........... $522,207 $171,808 $56,016 $52,098 $38,992 $81,167 $50,965
Ratio of expenses to average net assets............. 2.06% 1.88% 1.96% 2.04% 1.99% 1.99% 2.17%
Ratio of net investment income to average net
assets............................................. 1.07% 0.76% 1.21% 2.65% 2.51% 1.67% 1.50%
Portfolio turnover rate............................. 13% 35% 53% 75% 56% 85% 87%
<CAPTION>
1987(b) 1987 1986(c)
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<S> <C> <C> <C>
CLASS B
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period................ $12.68 $ 12.51 $ 9.40
------- ------- -------
Net investment income............................... 0.05 0.20 0.17
Net realized and unrealized gain (loss) on
investment......................................... (2.17) 1.74 3.02
------- ------- -------
Total from investment operations............... (2.12) 1.94 3.19
------- ------- -------
Less distributions:
Dividends from net investment income............... (0.04) (0.26) (0.08)
Distributions from net realized gain on
investments sold................................. (0.50) (1.51) --
Distributions from capital paid-in................. -- -- --
------- ------- -------
Total distributions............................ (0.54) (1.77) (0.08)
------- ------- -------
Net asset value, end of period...................... $10.02 $ 12.68 $12.51
------- ------- -------
Total investment return at net asset value.......... (17.36%)(a) 17.44% 34.08%(a)
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000's omitted)........... $38,721 $54,626 $48,602
Ratio of expenses to average net assets............. 2.47%* 1.48% 1.33%*
Ratio of net investment income to average net
assets............................................. 0.73%* 1.62% 3.13%*
Portfolio turnover rate............................. 58%* 89% 86%*
<FN>
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* On an annualized basis.
** Class A shares commenced operations on January 3, 1992.
*** Net investment income per share has been calculated on average monthly shares outstanding.
(a) Not annualized.
(b) From April 1, 1987.
(c) From commencement of operations, October 4, 1985.
</TABLE>
4
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<TABLE>
<CAPTION>
GOLD & GOVERNMENT FUND YEAR ENDED OCTOBER 31,
------------------------------------------------------------------------------------
1994 1993 1992(a) 1991 1990 1989 1988 1987(c)
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<S> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A
Per share operating performance
Net asset value, beginning of
period................................... $ 16.91 $ 15.19 $ 15.31
------- ------- -------
Net investment income...................... 0.63 0.76** 0.72
Net realized and unrealized gain
(loss) on investments, financial
futures contracts and written
options.................................. (2.28) 1.76 (0.21)
------- ------- -------
Total from investment operations....... (1.65) 2.52 0.51
------- ------- -------
Less distributions:
Dividends from net investment income....... (0.67) (0.80) (0.63)
------- ------- -------
Distributions in excess of net
realized gains on investments sold,
written options and financial
futures contracts........................ (0.24)
-------
Total distributions........................ (0.91) (0.80) (0.63)
=======
Net asset value, end of period............. $ 14.35 $ 16.91 $ 15.19
======= ======= =======
Total investment return at net asset value.. (10.10%) 17.10% 3.44%(b)
Ratios and supplemental data
Net assets, end of period (000's omitted).. $16,469 $20,385 $17,593
Ratio of expenses to average net assets.... 1.53% 1.59% 1.68%*
Ratio of net investment income to
average net assets....................... 4.02% 4.84% 5.49%*
Portfolio turnover rate.................... 147% 118% 209%
CLASS B
Per share operating performance
Net asset value, beginning of
period................................... $ 16.89 $ 15.17 $ 15.13 $ 14.51 $ 15.45 $ 14.96 $ 14.98 $ 16.56
------- ------- ------- ------- ------- ------- ------- -------
Net investment income...................... 0.53 0.69** 0.83 0.87+ 0.91+ 1.00 0.86 0.39
Net realized and unrealized gain
(loss) on investments, financial
futures contracts and written
options.................................. (2.28) 1.76 0.11 0.76 (0.81) 0.65 0.26 (1.02)
------- ------- ------- ------- ------- ------- ------- -------
Total from investment operations....... (1.75) 2.45 0.94 1.63 0.10 1.65 1.12 (0.63)
------- ------- ------- ------- ------- ------- ------- -------
Less distributions:
Dividends from net investment income....... (0.57) (0.73) (0.90) (1.01) (1.04) (0.92) (0.74) (0.40)
Distributions in excess of net
realized gain on investments
sold, written options and
financial futures contracts.......... (0.24) -- -- -- -- (0.24) (0.40) (0.55)
------- ------- ------- ------- ------- ------- ------- -------
Total distributions.................. (0.81) (0.73) (0.90) (1.01) (1.04) (1.16) (1.14) (0.95)
------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of period............. $ 14.33 $ 16.89 $ 15.17 $ 15.13 $ 14.51 $ 15.45 $ 14.96 $ 14.98
======= ======= ======= ======= ======= ======= ======= =======
Total investment return at net asset
value.................................. (10.70%) 16.56% 6.42% 11.78%+ 0.55%+ 11.73% 7.82% (6.00%*)
Ratio and supplemental data
Net assets, end of period (000's omitted).. $38,992 $51,872 $36,103 $56,928 $65,498 $63,569 $77,925 $80,459
Ratio of expenses to average net assets.... 2.18% 2.11% 1.63% 1.82%+ 1.90%+ 1.59% 1.92% 2.13%*
Ratio of net investment income to
average net assets....................... 3.41% 4.29% 5.56% 5.96%+ 6.03%+ 6.70% 5.69% 4.22%*
Portfolio turnover rate.................... 147% 118% 209% 134% 171% 124% 108% 161%
<CAPTION>
PERIOD ENDED
GOLD & GOVERNMENT FUND ------------------------------
MARCH MARCH MARCH
31, 31, 31,
1987 1986 1985(d)
-------- -------- --------
<S> <C> <C> <C>
CLASS B
Per share operating performance
Net asset value, beginning of
period................................... $ 16.20 $ 14.71 $ 14.25
------- ------- -------
Net investment income...................... 1.01 1.12 0.64
Net realized and unrealized gain
(loss) on investments, financial
futures contracts and written
options.................................. 1.07 1.61 0.14
------- ------- -------
Total from investment operations....... 2.08 2.73 0.78
------- ------- -------
Less distributions:
Dividends from net investment income....... (1.06) (1.20) (0.32)
Distributions in excess of net
realized gain on investments
sold, written options and
financial futures contracts.......... (0.66) (0.04) --
------- ------- -------
Total distributions.................. (1.72) (1.24) (0.32)
------- ------- -------
Net asset value, end of period............. $ 16.56 $ 16.20 $ 14.71
======= ======= =======
Total investment return at net asset
value................................ 13.93% 19.69% 10.70%*
Ratio and supplemental data
Net assets, end of period (000's omitted).. $70,833 $39,469 $26,401
Ratio of expenses to average net assets.... 1.68% 1.45% 1.49%*
Ratio of net investment income to
average net assets....................... 6.06% 7.46% 8.57%*
Portfolio turnover rate................... 159% 336% 279%*
<FN>
- ---------------
* On an annualized basis.
** Net investment income per share has been calculated on average shares outstanding during the year.
(a) Class A shares commenced operations on January 3, 1992.
(b) Total return is not on an annualized basis.
(c) From April 1, 1987.
(d) From commencement of operations, September 26, 1984.
+ Reflects expense limitations in effect during the years indicated. As a result of such limitations expenses of Class B
shares for the years ended, October 31, 1991 and 1990, reflect reductions of $0.01 and less than $0.01, per share,
respectively. Absent such reductions, for the years ended October 31, 1991 and 1990, the ratio of expenses to average net
assets would have been 1.91% and 1.93%, respectively, and the ratio of net investment income to average net assets would
have been 5.87% and 6.00%, respectively.
</TABLE>
5
<PAGE> 6
INVESTMENT OBJECTIVES AND POLICIES
Each Fund has a fundamental investment objective with policies and restrictions
to guide its portfolio management. There are market fluctuations and risks in
any investment and therefore there is no assurance that either Fund will achieve
its investment objectives.
REGIONAL BANK FUND
The Fund's investment objective is to achieve capital appreciation from a
portfolio of equity securities of regional banks and lending institutions.
Moderate income is a secondary objective. Under ordinary circumstances, the Fund
will invest at least 65% of its total assets in equity securities, including
common stock and securities convertible into common stock (such as convertible
bonds, convertible preferred stock, and warrants), of regional commercial banks,
industrial banks, consumer banks, savings and loans and bank holding companies
that receive a substantial portion of their income from banks.
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THE FUND INVESTS IN EQUITY
SECURITIES OF REGIONAL BANKS
AND LENDING INSTITUTIONS.
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A regional bank is one that provides full service banking (i.e., savings
accounts, checking accounts, commercial lending and real estate lending), whose
assets are primarily of domestic origin, and which typically has a principal
office outside of New York City and Chicago. Regional Bank Fund may invest in
banks that are not members of the Federal Reserve System or whose deposits are
not insured by the Federal Deposit Insurance Corporation (including any state or
federally chartered savings and loan association). Although the Adviser will
primarily seek opportunities for capital appreciation, many of the regional
banks in which the Fund may invest pay regular dividends. Accordingly, the Fund
also expects to receive moderate income.
Regional Bank Fund may invest some or all of its assets that are not invested in
equity securities of regional banks in the equity securities of financial
services companies, companies with significant lending operations or "money
center" banks. A "money center" bank is one with a strong international banking
business and a significant percentage of international assets, which is
typically located in New York or Chicago. The Fund may invest up to 5% of its
net assets in a combination of below-investment grade debt securities of banks
and non-financial services equities.
To avoid the need to sell equity securities in the portfolio to provide funds
for redemption, and to provide flexibility to Regional Bank Fund to take
advantage of investment opportunities, the Fund may invest up to 15% of its net
assets in short-term (less than one year) investment grade (i.e., rated at the
time of purchase AAA, AA, A or BBB by Standard & Poor's Rating Group or Aaa, Aa,
A or Baa by Moody's Investors Service, Inc.) debt securities of corporations
(such as commercial paper, notes, bonds or debentures), certificates of deposit,
deposit accounts, obligations of the U.S. Government, its agencies and
instrumentalities, or repurchase agreements which are fully-collateralized by
U.S. Government obligations, including repurchase agreements that mature in more
than seven days. When the Adviser believes that financial conditions warrant, it
may invest up to 80% of the Fund's assets in these securities rated in the three
highest categories,
6
<PAGE> 7
for temporary defensive purposes. Medium grade obligations (i.e., those rated
BBB or Baa) lack outstanding investment characteristics and in fact have
speculative characteristics as well and changes in economic conditions or other
circumstances are more likely to lead to a weakened capacity to make principal
and interest payments. In the event a debt security is subsequently downgraded
below medium grade, the Adviser will consider this event in its determination of
whether the Fund should continue to hold the security. See Appendix A to the
Statement of Additional Information for a description of the various ratings of
investment grade debt securities.
The Fund may write (sell) covered call options and may purchase put and call
options. These investment techniques are discussed in more detail below under
"Certain Investment Strategies" and in the Statement of Additional Information.
RISK FACTORS AND SPECIAL CONSIDERATIONS. Since the Fund's investments will be
concentrated in the banking industry, it will be subject to risks in addition to
those that apply to the general equity market. Events may occur which
significantly affect the entire banking industry. Thus, the Fund's share value
may at times increase or decrease at a faster rate than the share value of a
mutual fund with investments in many industries. In addition, despite some
measure of deregulation, banks and other lending institutions are still subject
to extensive governmental regulation which limits their activities. The
availability and cost of funds to these entities is crucial to their
profitability. Consequently, volatile interest rates and general economic
conditions can adversely affect their financial performance and condition. The
market value of the debt securities in the Fund's portfolio will also tend to
vary in an inverse relationship with changes in interest rates. For example, as
interest rates rise, the market value of debt securities tends to decline.
Regional Bank Fund is not a complete investment program. Because the Fund's
investments are concentrated in the banking industry, an investment in the Fund
may be subject to greater market fluctuations than a fund that does not
concentrate in a particular industry. Thus, it is recommended that an investment
in this Fund be considered only one portion of your overall investment
portfolio.
GOLD & GOVERNMENT FUND
The Fund's investment objective is to achieve capital appreciation and
preservation of the purchasing power of your capital. Moderate income is a
secondary objective.
The Fund will at all times invest at least 65% of its total assets in some
combination of gold and gold mining securities and U.S. Government securities.
John Hancock Advisers, Inc. (the "Adviser") will seek to anticipate oncoming
inflationary and disinflationary economic cycles, and will attempt to achieve
Gold & Government Fund's investment objective of capital appreciation and
preservation of purchasing power, as follows:
- -------------------------------------------------------------------------------
THE FUND'S INVESTMENT
OBJECTIVE IS TO ACHIEVE
CAPITAL APPRECIATION AND
PRESERVATION OF THE
PURCHASING POWER OF
YOUR CAPITAL.
- -------------------------------------------------------------------------------
- During periods of actual or anticipated inflation, concentrate its
investments principally in gold or other precious metal mining shares as
described below.
7
<PAGE> 8
- During periods of actual or anticipated disinflation, move from investments
in gold or other precious metals mining shares to a concentration of
investments in U.S. Government and government agency fixed-income
securities.
The Adviser believes that this investment strategy enhances Gold & Government
Fund's potential to achieve its investment objective of capital appreciation
over that which could be achieved by remaining fully invested in gold (and other
precious metals) mining shares. The Adviser does so by seeking to avoid the
decline in the price of gold and other precious metal mining shares that
typically occurs during periods of disinflation, while at the same time,
obtaining the benefit of the increase in value of debt instruments that
typically occurs when interest rates decline during periods of disinflation. The
Adviser's determination as to whether the economy is in an inflationary or
disinflationary environment will be made based upon its evaluation of numerous
economic and monetary factors.
When, by reason of a rising rate of change in the CPI, rising interest rates,
and/or a decline in the value of the U.S. dollar, an inflationary cycle is
expected by the Adviser, Gold & Government Fund will invest at least 25% and up
to 80% of the value of its total assets in the equity securities (common stock,
preferred stock and securities convertible into common and preferred stock) of
companies engaged in the exploration for, mining and processing of, or dealing
in gold and other precious metals such as silver. The Fund may purchase
securities of mining companies located throughout the free world, including in
particular the United States, Canada, South Africa and Australia. The Fund may
purchase sponsored or unsponsored American depositary receipts ("ADRs") rather
than the actual security of a foreign company. An ADR is a certificate issued by
a United States bank representing the right to receive securities of a foreign
issuer deposited in that bank or a correspondent bank. Although the Fund
anticipates purchasing most of its gold mining securities on United States
markets, it may from time to time purchase them on foreign markets. In addition,
the Fund may invest up to 10% of the value of its total assets directly in gold,
particularly gold bullion and gold coins.
- -------------------------------------------------------------------------------
HOW THE FUND INVESTS
DURING AN INFLATIONARY CYCLE.
- -------------------------------------------------------------------------------
When, by reason of a declining rate of change in the CPI, declining interest
rates, and/or an increase in the value of the U.S. dollar, a disinflationary
cycle is anticipated, the Fund may invest up to 90% of its assets in debt
instruments of the U.S. Government and its agencies having varied maturities
("U.S. Government securities"). These U.S. Government securities will be
obligations issued or guaranteed as to both principal and interest by the U.S.
Government or backed by the full faith and credit of the United States. In
addition to direct obligations of the U.S. Treasury such as Treasury bonds and
bills, U.S. Government securities include securities issued or guaranteed by
different agencies such as: Federal Housing Administration, Farmers Home
Administration, Export-Import Bank of the United States, Small Business
Administration, Government National Mortgage Association, Fannie Mae and Freddie
Mae mortgage-backed securities, General Services Administration and Federal
Maritime Administration. The Fund may also invest in securities issued by the
U.S. Government in the form of separately traded principal and interest
components of securities guaranteed by the U.S. Treasury. Because these
obligations do not pay current income, their value may experience more
volatility when interest rates change than that of other U.S. Government
8
<PAGE> 9
securities that have similar yields and maturities. As of the date of this
Prospectus, the Adviser believes that the economy is in an extended period of
slow growth and that inflation will likely remain stable. Therefore, under these
circumstances, the Fund would invest principally in U.S. Government securities.
- -------------------------------------------------------------------------------
HOW THE FUND
INVESTS DURING A
DISINFLATIONARY CYCLE.
- -------------------------------------------------------------------------------
The Fund may invest up to 10% of its net assets in repurchase agreements, which
are fully collateralized by U.S. Government securities, including repurchase
agreements that mature in more than seven days.
The Fund may write covered call options and may purchase put and call options on
gold bullion, U.S. Government securities and equity securities. The Fund may
also invest in futures contracts in gold bullion, financial futures contracts
with respect to U.S. Treasury obligations and related options on such futures
contracts. These investment techniques are discussed in more detail below under
"Certain Investment Strategies" and in the Statement of Additional Information.
RISK FACTORS AND SPECIAL CONSIDERATIONS. The Fund's investment success will
depend to a high degree on the Adviser's ability to anticipate the onset and
termination of inflationary and disinflationary cycles. A failure to anticipate
a disinflationary cycle could result in the Fund's assets being
disproportionately invested in securities of gold or other mining companies.
Conversely, a failure to predict an inflationary cycle could result in the
Fund's assets being disproportionately invested in U.S. Government securities.
The securities of companies engaged in the exploration for, mining and
processing of gold and precious metals have been volatile historically. Mining
and other related securities tend to fluctuate as much as or more than gold
during periods of market instability because operating results will usually be
positively or negatively leveraged by considerable movements in the price of
gold. These securities are further affected by changes in the currency of the
country of domicile. Since the Fund may from time to time, as set forth above,
invest up to 80% of its total assets in gold and precious metals mining stocks,
the Fund may be subject to greater risks and market fluctuations than other
mutual funds with portfolios having a broader range of investment alternatives.
The Fund's holdings of gold bullion, if any, will not generate any current
income, and appreciation in the market price of gold is the sole manner in which
the Fund will be able to realize gains on such investment.
Investments in foreign securities may involve certain risks. See "Certain
Investment Strategies."
If Gold & Government Fund writes (sells) a substantial number of call options
and the market prices of the underlying securities appreciate, or if the Fund
writes a substantial number of put options and the market prices of the
underlying securities depreciate, there may be a very substantial turnover of
the portfolio. A high rate of portfolio turnover involves correspondingly
greater brokerage expense which will be borne by the Fund and may, under certain
circumstances, make it more difficult for the Fund to qualify as a regulated
investment company under the Internal Revenue Code. See the Statement of
Additional Information for a further discussion of these special considerations.
9
<PAGE> 10
CERTAIN INVESTMENT STRATEGIES
OPTIONS TRANSACTIONS. Gold & Government Fund may purchase call and put options
and write (sell) covered call options on gold bullion, U.S. Government
securities and equity securities in which it may invest. The Fund may not invest
more than 5% of its assets in purchased put and call options. The Fund may write
(sell) covered call options on all or part of its portfolio assets, without
limit. Regional Bank Fund may invest up to 5% of its assets may be invested in
purchased put and call options and may write (sell) covered call options on up
to 30% of its portfolio securities.
The Funds may deal in options listed for trading on a national securities
exchange or traded over-the-counter. The Funds will engage in over-the-counter
options only with member banks of the Federal Reserve System and primary dealers
in U.S. Government securities. The staff of the Securities and Exchange
Commission considers over-the-counter options to be illiquid except under
prescribed conditions, which are discussed in the Statement of Additional
Information.
FUTURES CONTRACTS AND OPTIONS ON FUTURES. Gold & Government Fund may buy and
sell gold bullion and financial futures contracts and options on futures to
hedge against the effects of fluctuations in securities prices, interest rates,
currency exchange rates and other market conditions and for speculative
purposes. The potential loss incurred by the Fund in writing options on futures
is unlimited and may exceed the amount of the premium received. All of the
Fund's futures contracts and options on futures will be traded on a U.S.
commodity exchange or board of trade. The Gold & Government Fund will not engage
in a futures or options transaction for speculative purposes, if immediately
thereafter, the sum of initial margin deposits on existing positions and
premiums required to establish speculative positions in futures contracts and
options on futures would exceed 5% of the Fund's net assets. The Fund intends to
comply with the CFTC regulations with respect to its speculative transactions.
These regulations are discussed further in the Statement of Additional
Information.
REPURCHASE AGREEMENTS. In a repurchase agreement, a 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 they involve some
credit risk to the Fund if the other party defaults on its obligations and the
Fund is delayed in or prevented from liquidating the collateral.
RESTRICTED SECURITIES. Each Fund may purchase restricted securities, including
those eligible for resale to "qualified institutional buyers" pursuant to Rule
144A under the Securities Act of 1933 (the "Securities Act"). The Trustees will
carefully monitor the Funds' investments in these securities, focusing on
certain factors, including valuation, liquidity and availability of information.
Purchases are subject to a nonfundamental investment restriction limiting all
illiquid securities held by either Fund to not more than 10% of the Fund's net
assets.
FOREIGN ISSUERS. Gold & Government Fund may purchase securities of foreign
issuers. Investments in foreign securities may involve a greater degree of risk
than investments in domestic securities due to exchange controls, less publicly
10
<PAGE> 11
available information, more volatile or less liquid securities markets, and the
possibility of expropriation, confiscatory taxation or political, economic or
social instability. Some foreign companies are not generally subject to the same
uniform accounting, auditing and financial reporting requirements as domestic
companies, and foreign regulation of stock exchanges, brokers and securities may
differ considerably from domestic regulation thereof. Additionally, because
foreign securities may be denominated in currencies other than the U.S. dollar,
changes in foreign currency exchange rates will affect the Fund's net asset
value, the value of dividends and interest earned, gains and losses realized on
the sale of securities, and net investment income and gains, if any, to be
distributed to shareholders by the Fund. Securities transactions effected in
some foreign markets may not be settled promptly. Therefore, the Fund's
investments in these markets may be less liquid and subject to the risk of
fluctuating currency exchange rates pending settlement.
Each Fund has adopted certain investment restrictions which are enumerated in
detail in the Statement of Additional Information, where they are classified as
fundamental or non-fundamental. The Funds' investment objectives and those
investment restrictions designated as fundamental may not be changed without
shareholder approval. The Funds' non-fundamental investment policies and
restrictions, however, may be changed by a vote of the Trustees without
shareholder approval. The Funds' portfolio turnover rates for recent periods are
shown in the section "The Funds' Financial Highlights."
- -------------------------------------------------------------------------------
EACH FUND FOLLOWS CERTAIN
POLICIES, SOME OF WHICH MAY
HELP TO REDUCE INVESTMENT
RISK.
- -------------------------------------------------------------------------------
When choosing brokerage firms to carry out the Funds' transactions, the Advisers
gives 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 shares of the Funds.
Pursuant to procedures determined by the Trustees, the Adviser may place
securities transactions with brokers affiliated with the Adviser. These brokers
include Tucker Anthony Incorporated, John Hancock Distributors, Inc. and Sutro &
Company Inc., which are indirectly owned by John Hancock Mutual Life Insurance
Company, which in turn indirectly owns the Adviser.
- -------------------------------------------------------------------------------
BROKERS ARE CHOSEN BASED ON
BEST PRICE AND EXECUTION.
- -------------------------------------------------------------------------------
ORGANIZATION AND MANAGEMENT OF THE FUNDS
Each Fund is a diversified series of Freedom Investment Trust (the "Trust") an
open-end management investment company organized as a Massachusetts business
trust in 1984. The Trust reserves the right to create and issue a number of
series of shares, or funds or classes thereof, which are separately managed and
have different investment objectives. The Trust 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
policies or approving a management contract. The Trust, under certain
circumstances, will assist in shareholder communications with other
shareholders.
- -------------------------------------------------------------------------------
THE TRUSTEES ELECT OFFICERS
AND RETAIN THE INVESTMENT
ADVISER WHO IS RESPONSIBLE
FOR THE DAY-TO-DAY
OPERATIONS OF THE FUNDS,
SUBJECT TO THE TRUSTEES'
POLICIES AND SUPERVISION.
- -------------------------------------------------------------------------------
11
<PAGE> 12
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 "Life Company"). It provides the Funds, and other investment companies in
the John Hancock group of funds, with investment research and portfolio
management services. John Hancock Funds, Inc. ("John Hancock Funds") distributes
shares for all of the John Hancock funds directly and through selected
broker-dealers ("Selling Brokers"). Freedom Distributors Corporation, a co-
distributor of the Funds, is, along with John Hancock Funds, (together with John
Hancock Funds, the "Distributors") an indirect subsidiary of the Life Company.
Certain Fund officers are also officers of the Adviser and John Hancock Funds.
Pursuant to an order granted by the Securities and Exchange Commission, each
Fund has adopted a deferred compensation plan for its independent Trustees which
allows Trustees' fees to be invested by the Fund in other John Hancock funds.
- -------------------------------------------------------------------------------
JOHN HANCOCK ADVISERS,
INC. ADVISES INVESTMENT
COMPANIES HAVING A
TOTAL ASSET VALUE OF
MORE THAN $13 BILLION.
- -------------------------------------------------------------------------------
Ann M. McDonley is Vice President and portfolio manager of Gold & Government
Fund. She joined the Adviser in 1992 as a fixed income derivatives specialist.
Prior to 1992, she was Vice President and Treasurer of First Signature Bank &
Trust Company, an indirect subsidiary of the Life Company.
James K. Schmidt is Senior Vice President and portfolio manager of Regional Bank
Fund as well as The Southeastern Thrift and Bank Fund, Inc., a closed-end fund.
He has been portfolio manager of Regional Bank Fund since its inception. He
joined John Hancock in 1985.
In order to avoid any conflict with portfolio trades for the Funds, the Adviser
and each Fund have adopted extensive restrictions on personal securities trading
by personnel of the Adviser and its affiliates. Some of these restrictions are:
pre-clearance for all personal trades and a ban on the purchase of initial
public offerings, as well as contributions to specified charities of profits on
securities held for less than 91 days. These restrictions are a continuation of
the basic principle that the interests of the Fund and its shareholders come
first.
12
<PAGE> 13
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.
- -------------------------------------------------------------------------------
AN ALTERNATIVE PURCHASE PLAN ALLOWS YOU TO
CHOOSE THE METHOD OF PAYMENT THAT IS BEST
FOR YOU.
- -------------------------------------------------------------------------------
CLASS A SHARES. If you elect to purchase Class A shares, you will incur an
initial sales charge unless the amount of your purchase is $1 million or more.
If you purchase $1 million or more of Class A shares, you will not be subject to
an initial sales charge, but you will incur a sales charge if you redeem your
shares within one year of purchase. Class A shares are subject to ongoing
distribution and service fees at a combined annual rate of up to 0.30% of a
Fund's average daily net assets attributable to the Class A shares. Certain
purchases of Class A shares qualify for a reduced initial sales charge. See
"Share Price -- Qualifying for a Reduced Sales Charge."
- -------------------------------------------------------------------------------
INVESTMENTS IN CLASS A
SHARES ARE SUBJECT TO AN
INITIAL SALES CHARGE.
- -------------------------------------------------------------------------------
CLASS B SHARES. You will not incur a sales charge when you purchase Class B
shares, but the shares are subject to a sales charge if you redeem them within
six years of purchase (the "contingent deferred sales charge" or the "CDSC").
Class B shares are subject to ongoing distribution and service fees at a
combined annual rate of up to 1.00% of a Fund's average daily net assets
attributable to the Class B shares. Investing in Class B shares permits all 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 Funds,
these higher expenses will also result in lower dividends than those paid on
Class A shares.
- -------------------------------------------------------------------------------
INVESTMENTS IN CLASS B
SHARES ARE SUBJECT TO A
CONTINGENT DEFERRED SALES
CHARGE.
- -------------------------------------------------------------------------------
Class B shares are not available to full service defined contribution plans
administered by Investor Services or John Hancock Mutual Life Insurance Company
that had more than 100 eligible employees at the inception of the Fund account.
FACTORS TO CONSIDER IN CHOOSING AN ALTERNATIVE
The alternative purchase arrangement allows you to choose the most beneficial
way to buy shares given the amount of your purchase, the length of time you
expect to hold your shares and other circumstances. You should consider whether,
during the anticipated life of your Fund investment, the CDSC and accumulated
fees on Class B shares would be less than the initial sales charge and
accumulated fees on Class A shares purchased at the same time; and to what
extent this differential would be offset by the Class A shares' lower expenses.
To help you make this determination, the table under the caption "Expense
Information" on the inside cover page of this Prospectus shows examples of the
charges applicable to each class of shares. Class A shares will normally be more
beneficial if you qualify for reduced sales charges. See "Share
Price -- Qualifying for a Reduced Sales Charge."
- -------------------------------------------------------------------------------
YOU SHOULD CONSIDER WHICH
CLASS OF SHARES WILL BE MORE
BENEFICIAL FOR YOU.
- -------------------------------------------------------------------------------
13
<PAGE> 14
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 of your funds invested initially and,
therefore, would initially own fewer shares. If you do not qualify for reduced
initial sales charges and expect to maintain your investment for an extended
period of time, you might consider purchasing Class A shares because the
accumulated distribution and service charges on Class B shares may exceed the
initial sales charge and accumulated distribution and service charges on Class A
shares during the life of your investment.
Alternatively, you might determine that it would be more advantageous to
purchase Class B shares in order to have all of your funds invested initially.
However, you would be subject to higher distribution charges and, for a six-year
period, a CDSC.
In the case of Class A shares, the distribution expenses that John Hancock Funds
incurs in connection with the sale of 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 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 Funds' shares may receive different compensation for
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
except for differences resulting from the fact that 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 FUNDS' EXPENSES
For managing its investment and business affairs, each Fund pays a monthly fee
to the Adviser based upon the average daily net asset value of such Fund at the
annual rate of 0.80% of each respective Fund's first $500 million of average
daily net assets and 0.75% of average daily net assets in excess of $500
million. For the 1994 fiscal year the fee was 0.79% of Gold and Government
Fund's average daily net assets and 0.79% of Regional Bank's average net assets.
The Class A and Class B shareholders of each Fund have adopted distribution
plans (each a "Plan") pursuant to Rule 12b-1 under the Investment Company Act of
1940. Under these Plans, each Fund pays distribution and service fees at an
aggregate annual rate of up to 0.30% of the Class A shares' average daily net
assets of the respective Fund and an aggregate annual rate of up to 1.00% of the
Class B shares' average daily net assets of the respective Fund. In each case,
up to 0.25% is for service expenses and the remaining amount is for distribution
expenses. Distribution fees are used to reimburse the Distributors for their
distribution expenses, including but not limited to: (i) initial and ongoing
sales
14
<PAGE> 15
Compensation to Selling Brokers and other (including affiliates of the
Distributions) engaged in the sale of shares of the Funds' (ii) marketing,
promotional and overhead expenses incurred in connection with the distribution
of shares of the Funds; and (iii) with respect to Class B shares only, interest
expenses on unreimbursed distirbution expenses. Service fees are paid to the
Distributions to compensate Selling Brokers for providing personal and account
maintenance service to sharehhoders.
- -------------------------------------------------------------------------------
THE FUND PAYS
DISTRIBUTION AND SERVICE
FEES FOR MARKETING AND
SALES RELATED SHAREHOLDER
SERVICING.
- --------------------------------------------------------------------------------
In the event the Distributors are not fully reimbursed for payments made or
expenses incurred by them under the Class A Plan, these expenses will not be
carried beyond one year from the date they were incurred. These unreimbursed
expenses under the Class B Plan will be carried forward together with interest
on the balance of these unreimbursed expenses. For the fiscal year ended October
31, 1994, for Gold & Government Fund and Regional Bank Fund, respectively, an
aggregate of $169,364 and $22,030,887 of distribution expenses or 0.3% and 7.0%
of the average net assets of the Class B shares was not reimbursed or recovered
by the Distributors through the receipt of deferred sales charges or 12b-1 fees
in prior periods.
Information on each Fund's total expenses is in the Financial Highlights section
of this prospectus.
DIVIDENDS AND TAXES
DIVIDENDS. The Funds generally declare and distribute dividends representing
all or substantially all net investment income quarterly. Each Fund may
distribute net short-term capital gains, if any, quarterly, and will distribute
net long-term capital gains, if any, annually after the close of its fiscal year
(October 31).
Dividends are reinvested in additional shares of your class unless you elect the
option to receive them in cash. If you elect the cash option and the U.S. Postal
Service cannot deliver your checks, your election will be converted to the
reinvestment option. Because of the higher expenses associated with Class B
shares, any dividends on these shares will be lower than those on the Class A
shares. See "Share Price."
TAXATION. Dividends from the Funds' net investment income, certain net foreign
exchange gains and net short-term capital gains are taxable to you as ordinary
income and dividends from the Funds' net long-term capital gains are taxable as
long-term capital gain. These dividends are taxable whether received in cash or
reinvested in additional shares. Corporate shareholders may be entitled to take
a corporate dividends received deduction for dividends paid by the Funds
attributable to the dividends they receive from U.S. domestic corporations,
subject to certain restrictions in the Internal Revenue Code of 1986, as amended
(the "Code"). Certain dividends may be paid in January of a given year but may
be taxable as if you received them the previous December. The Funds will send
you a statement by January 31 showing the tax status of the dividends you
received for the prior year.
Each Fund has qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Code. As a regulated investment
15
<PAGE> 16
company, neither Fund will be subject to Federal income taxes on any net
investment income or net realized capital gains distributed to its shareholders
within the time period prescribed by the Code.
When you redeem (sell) or exchange shares, you may realize a taxable gain or
loss.
Gold & Government Fund anticipates that it will be subject to foreign
withholding taxes or other foreign taxes on income (possibly including capital
gains) on certain foreign investments which will reduce the yield on those
investments. However, if more than 50% of the Fund's total assets at the close
of its taxable year consists of securities of foreign corporations and if the
Fund so elects, shareholders will include in their gross incomes their pro-rata
shares of qualified foreign taxes paid by the Fund and may be entitled subject
to certain conditions and limitations under the Code, to claim a Federal income
tax credit or deduction for their share of these taxes.
On the account application you must certify that your social security or other
taxpayer identification number you provide is correct and that you are not
subject to backup withholding of Federal income tax. If you do not provide this
information or are otherwise subject to this withholding, a Fund may be required
to withhold 31% of your dividends and the proceeds of redemptions or exchanges.
In addition to Federal taxes, you may be subject to state, local or foreign
taxes with respect to your investment in and distributions from a Fund. Non-U.S.
shareholders and tax-exempt shareholders are subject to different tax treatment
not described above.
A state income (and possibly local income and/or intangible property) tax
exemption is generally available to the extent a Fund's distributions are
derived from interest on (or, in the case of intangibles taxes, the value of its
assets is attributable to) certain U.S. Government obligations, provided in some
states that certain thresholds for holdings of such obligations and/or reporting
requirements are satisfied. You should consult your tax adviser for specific
advice.
PERFORMANCE
Yield reflects a Fund's rate of income on portfolio investments as a percentage
of its 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. Yield is also 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, a Fund's yield may not equal the income paid on your shares
or the income reported in the Fund's financial statements.
- -------------------------------------------------------------------------------
THE FUNDS MAY ADVERTISE
THEIR YIELD AND TOTAL RETURN.
- -------------------------------------------------------------------------------
A Fund's total return shows the overall dollar or percentage change in value, of
a hypothetical investment in a Fund assuming the reinvestment of all dividends.
Cumulative total return shows a Fund's performance over a period of time.
Average annual total return shows the cumulative return of the respective class
of shares of
16
<PAGE> 17
a Fund divided by the number of years included in the period. Because average
annual total return tends to smooth out variations in a Fund's 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 5.00% (except as shown in the
"The Funds' Financial Highlights"). Investments at lower sales charges would
result in higher performance figures. Yield and total return for the Class B
shares reflect deduction of the applicable contingent deferred sales charge
imposed on a redemption of shares held for the applicable period. All
calculations assume that all dividends are reinvested at net asset value on the
reinvestment dates during the periods. Yield and total return of Class A and
Class B shares will be calculated separately and, because each class is subject
to certain different expenses, the yield and total return may differ with
respect to that class for the same period. The relative performance of the Class
A and Class B shares will be affected by a variety of factors, including the
higher operating expenses attributable to the Class B shares, whether the Fund's
investment performance is better in the earlier or later portions of the period
measured and the level of net assets of the classes during the period. Each Fund
will include the total return and yield of both Class A and Class B shares in
any advertisement or promotional materials including Fund performance data. The
value of a Fund's shares, when redeemed, may be more or less than their original
cost. Both yield and total return are historical calculations and not an
indication of future performance. See "Factors to Consider in Choosing an
Alternative."
17
<PAGE> 18
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------
OPENING AN ACCOUNT.
- --------------------------------------------------------------------------------
The minimum initial investment in Class A or Class B shares is $1,000 ($250 for
group investments or $500 for retirement plans).
Complete the Account Application attached to the Prospectus. Indicate whether you
are purchasing 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 Investor Services
Corporation. ("Investor Services").
2. Deliver the completed application and check to your registered
representative, Selling Broker or mail it directly to Investor
Services.
- ---------------------------------------------------------------------------------
BY WIRE 1. Obtain an account number by contacting your registered
representative, Selling Broker, or by calling 1-800-225-5291.
2. Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: [NAME OF 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, Selling Broker or mail it directly to Investor
Services.
- ---------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A
AND CLASS B SHARES.
- ---------------------------------------------------------------------------------
MONTHLY
AUTOMATIC 1. Complete the "Automatic Investing" and "Bank Information"
ACCUMULATION sections on the Account Privileges Application designating
PROGRAM a bank account from which your funds may be drawn.
(MAAP)
MONTHLY
AUTOMATIC 2. The amount you elect to invest will be automatically withdrawn
from your bank or credit union account.
- ---------------------------------------------------------------------------------
BY TELEPHONE 1. Complete the "Invest-by-Phone" and "Bank Information" sections
on the Account Privileges Application designating a bank
account from which funds may be drawn. Note that in order to
invest by phone, your account must be in a bank or credit union
that is a member of the Automated Clearing House system (ACH).
2. After your authorization form has been processed, you may
purchase additional Class A or Class B shares by calling
Investor Services toll-free at 1-800-225-5291.
3. Give the Investor Services representative the name(s) in which
your account is registered, the Fund name, the class of shares
you own, your account number, and the amount you wish to
invest.
4. Your investment normally will be credited to your account the
business day following your phone request.
- -------------------------------------------------------------------------------
</TABLE>
18
<PAGE> 19
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
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, your account number and the
name(s) in which the account is registered.
</TABLE>
- -------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A
AND CLASS B SHARES.
(CONTINUED)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
2. Make your check payable to John Hancock Investor Services
Corporation.
3. Mail the account information and check to
John Hancock Investor Services Corporation
P.O. Box 9115
Boston, MA 02205-9115
or deliver it to your registered representative or Selling
Broker.
- ---------------------------------------------------------------------------------
BY WIRE Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: [NAME OF FUND]
Class A or Class B shares
Your Account Number
Name(s) under which account is registered
- ---------------------------------------------------------------------------------
Other Requirements. All purchases must be made in U.S. dollars. Checks written on
foreign banks will delay purchases until U.S. funds are received, and a collection
charge may be imposed. Shares of the Fund are priced at the offering price based
on the net asset value computed after John Hancock Funds receives notification of
the dollar equivalent from the Fund's custodian bank. Wire purchases normally take
two or more hours to complete and, to be accepted the same day, must be received
by 4:00 p.m., New York time. Your bank may charge a fee to wire funds. Telephone
transactions are recorded to verify information. Certificates are not issued
unless a request is made in writing to Investor Services.
- ---------------------------------------------------------------------------------
</TABLE>
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.
- -------------------------------------------------------------------------------
YOU WILL RECEIVE ACCOUNT
STATEMENTS WHICH YOU
SHOULD KEEP TO HELP WITH
YOUR PERSONAL RECORDKEEPING.
- -------------------------------------------------------------------------------
SHARE PRICE
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 of each class can differ in value. Securities in
the Funds' portfolios are valued on the basis of market quotations, valuations
provided by independent pricing services or, at fair value as determined in good
faith in accordance with procedures approved by the Trustees. Short-term debt
investments maturing within 60 days are valued at amortized cost which
approximates market value. Foreign securities are valued on the basis of
quotations from the primary market in which they are traded, and are translated
from the local currency into U.S. dollars using current exchange rates. If
quotations are not readily available or, the value have been materially affected
by events occurring after the closing of a foreign market, assets are valued by
a method that the Trustees believes accurately reflects fair value. The NAV is
calculated once daily as of the close of regular trading on the New York Stock
Exchange (generally at 4:00 p.m., New York time) on each day that the Exchange
is open.
- -------------------------------------------------------------------------------
THE OFFERING PRICE OF YOUR
SHARES IS THEIR NET ASSET
VALUE PLUS A SALES CHARGE,
IF APPLICABLE, WHICH WILL
VARY WITH THE PURCHASE
ALTERNATIVE YOU CHOOSE.
- -------------------------------------------------------------------------------
19
<PAGE> 20
Shares of the Funds are sold at the offering price based on the NAV computed
after your investment request is received in good order by John Hancock Funds.
If you buy shares of the Funds through a Selling Broker, the Selling Broker must
receive your investment before the close of regular trading on the New York
Stock Exchange and transmit it to John Hancock Funds before its close of
business to receive that day's offering price.
INITIAL SALES CHARGE ALTERNATIVE -- CLASS A SHARES. The offering price you pay
for Class A shares of each Fund equals the NAV plus a sales charge as follows.
<TABLE>
<CAPTION>
SALES CHARGE SALES CHARGE REALLOWANCE TO
AS AS COMBINED SELLING BROKER
A PERCENTAGE A PERCENTAGE REALLOWANCE AS A PERCENTAGE
AMOUNT INVESTED OF OF AND SERVICE FEE AS OF
(INCLUDING SALES OFFERING THE AMOUNT A PERCENTAGE OF OFFERING
CHARGE) PRICE INVESTED OFFERING PRICE(+) PRICE(*)
- ------------------- ------------- ------------- ------------------ ----------------
<S> <C> <C> <C> <C>
Less than $50,000 5.00% 5.26% 4.25% 4.01%
$50,000 to $99,999 4.50% 4.71% 3.75% 3.51%
$100,000 to
$249,999 3.50% 3.63% 2.85% 2.61%
$250,000 to
$499,999 2.50% 2.56% 2.10% 1.86%
$500,000 to
$999,999 2.00% 2.04% 1.60% 1.36%
$1,000,000 and over 0.00%(**) 0.00%(**) (***) 0.00%(***)
</TABLE>
- ---------------
(*) Upon notice to Selling Brokers with whom it has sales agreements, John
Hancock Funds may reallow an amount up to the full applicable sales
charge. 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.
(***) John Hancock Funds may pay a commission and first year's service fee (as
described in (+) below) to Selling Brokers who initiate and are
responsible for purchases of Class A shares of $1 million or more in the
aggregate as follows: 1% on sales to $4,999,999, 0.50% on the next $5
million and 0.25% on $10 million and over.
(+) At the time of sale, John Hancock Funds pays to Selling Brokers the first
year's service fee in advance, in an amount equal to 0.25% of the net
assets invested in the Fund. Thereafter, it pays the service fee
periodically in arrears in an amount up to 0.25% of the average annual net
assets of the Fund. Selling Brokers receive the fee as compensation for
providing personal and account maintenance services to shareholders.
Sales charges ARE NOT APPLIED to any dividends which are reinvested in
additional Class A shares of either Fund.
John Hancock Funds will pay certain affiliated Selling Brokers at an annual rate
of up to 0.05% of the daily net assets of accounts attributable to such brokers.
Under certain circumstances as described below, investors in Class A shares may
be entitled to pay reduced sales charges. See "Qualifying for a Reduced Sales
Charge."
CONTINGENT DEFERRED SALES CHARGE ON CLASS A SHARES -- INVESTMENTS OF $1 MILLION
OR MORE IN CLASS A SHARES. Purchases of $1 million or more of Class A shares
will be made at net asset value with no initial sales charge, but if the shares
are redeemed within 12 months after the end of the calendar month in which the
purchase was made (the contingent deferred sales charge period), a
20
<PAGE> 21
contingent deferred sales charge 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 contingent deferred sales charge will be assessed on an amount equal to the
lesser of the current market value or the original purchase cost of the Class A
shares redeemed. Accordingly, no CDSC will be imposed on increases in account
value above the initial purchase price, including any dividends which have been
reinvested in additional shares.
Existing full service clients of John Hancock Mutual Life Insurance Company who
were group annuity contract holders as of September 1, 1994 and participant
directed defined contribution plans with at least 100 eligible employees at the
inception of the Fund account, may purchase Class A shares with no initial sales
charge. However, if the shares are redeemed within 12 months after the end of
the calendar year in which the purchase was made, a contingent deferred sales
charge will be imposed at the above rate.
In determining whether a CDSC applies to a redemption the calculation will be
determined in a manner that results in the lowest possible rate being charged.
Therefore, it will be assumed that the redemption is first made from any shares
in your account that are not subject to the CDSC. The CDSC is waived on
redemption in certain circumstances. See "Waiver of Contingent Deferred Sales
Charge" below.
QUALIFYING FOR A REDUCED SALES CHARGE. If you invest more than $50,000 in Class
A shares of the Funds or combination of John Hancock funds (except money market
funds), you may qualify for a reduced sales charge on your investments through a
LETTER OF INTENTION. You may also be able to use the ACCUMULATION PRIVILEGE and
COMBINATION PRIVILEGE to take advantage of the value of your previous
investments in Class A shares of the John Hancock funds when meeting the
breakpoints for a reduced sales charge. For the ACCUMULATION PRIVILEGE and
COMBINATION PRIVILEGE, the applicable sales charge will be based on the total
of:
- -------------------------------------------------------------------------------
YOU MAY QUALIFY FOR A
REDUCED SALES CHARGE ON
YOUR INVESTMENT IN
CLASS A SHARES.
- -------------------------------------------------------------------------------
1. Your current purchase of Class A shares of the applicable Fund.
2. The net asset value (at the close of business on the previous day) of (a) all
Class A shares of that Fund you hold, and (b) all Class A shares of any other
John Hancock funds you hold; and
3. The net asset value of all shares held by another shareholder eligible to
combine his or her holdings with you into a single "purchase."
EXAMPLE:
If you hold Class A shares of a John Hancock fund with a net asset value of
$20,000 and, subsequently, invest $30,000 in Class A shares of either Fund, the
sales charge on this subsequent investment would be 4.50% and not 5.00% (the
21
<PAGE> 22
rate that would otherwise be applicable to investments of less than $50,000. See
"Initial Sales Charge Alternative -- Class A Shares.")
If you are in one of the following categories, you may purchase Class A shares
of the Funds without paying a sales charge:
- - A Trustee or officer of the Trust; a Director or officer of the Adviser and
its affiliates or Selling Brokers; employees or sales representatives of any
of the foregoing; retired officers, employees 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.
- -------------------------------------------------------------------------------
CLASS A SHARES MAY BE
AVAILABLE WITHOUT A
SALES CHARGE TO
CERTAIN INDIVIDUALS
AND ORGANIZATIONS.
- -------------------------------------------------------------------------------
- - Any state, county, city or any instrumentality, department, authority, or
agency of these entities which is prohibited by applicable investment laws
from paying a sales charge or commission when it purchases shares of any
registered investment management company.*
- - A bank, trust company, credit union, savings institution or other depository
institution, its trust departments or common trust funds 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 John Hancock Funds 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 funds, when
he/she withdraws from his/her plan and transfers any or all of his/her plan
distributions directly to the Fund.
- ---------------
* For investments made under these provisions, John Hancock Funds may make a
payment out of its own resources to the Selling Broker in an amount not to
exceed 0.25% of the amount invested.
Class A shares of the Funds 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 the imposition of a sales
charge so that your entire initial investment will go to work at the time of
purchase. However, Class B shares redeemed within six years of purchase will be
subject to a CDSC at the rates set forth below. This charge will be assessed on
an amount equal to the lesser of the current market value or the original
purchase cost of the shares being redeemed. Accordingly, you will not be
assessed a CDSC on increases in account value above the initial purchase price,
including shares derived from dividend reinvestment.
In determining whether a CDSC applies to a redemption, the calculation will be
determined in a manner that results in the lowest possible rate being charged.
It will be assumed that your redemption comes first from shares you have held
beyond the six-year CDSC redemption period or those you acquired through
dividend reinvestment, and next from the shares you have held the longest during
the six-year period. The CDSC is waived on redemptions in certain circumstances.
See the discussion "Waiver of Contingent Deferred Sales Charges" below.
22
<PAGE> 23
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>
<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 John Hancock Funds. John Hancock Funds uses
all or part of them to defray its expenses related to providing the Funds with
distribution services in connection with the sale of 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 Funds to
sell Class B shares without deducting a sales charge at the time of 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 redeemed them.
Solely for purposes of determining this holding period, any payments you make
during the month will be aggregated and deemed to have been made on the last day
of the month.
<TABLE>
<CAPTION>
CONTINGENT
DEFERRED SALES
CHARGE AS A
YEAR IN WHICH CLASS B SHARES PERCENTAGE
REDEEMED FOLLOWING PURCHASE OF AMOUNT REDEEMED
- ------------------------------------------------------------ ------------------
<S> <C>
First 5.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter None
</TABLE>
A commission equal to 3.75% of the amount invested and a first year's service
fee equal to 0.25% of the amount invested are paid to Selling Brokers. The
initial service fee is paid in advance at the time of sale for the provision of
personal and account maintenance services to shareholders during the twelve
months following the sale, and thereafter the service fee is paid in arrears.
If you purchased Class B shares during 1992 or 1993, the applicable CDSC as a
percentage of the amount redeemed will be: 4% for redemptions during the first
year after purchase, 3.5% for redemptions during the second year, 3% for
redemptions during the third year, 2.5% for redemptions during the fourth year,
2% for redemptions during the fifth year, 1% for redemptions during the sixth
year, and no CDSC for redemptions during the seventh year and thereafter. If you
purchased Class B shares before 1992, the applicable CDSC as a percentage of the
amount
23
<PAGE> 24
redeemed will be: 1% for redemptions during the third, fourth and fifth year
after purchase and no CDSC for redemptions during the sixth year and thereafter.
WAIVER OF CONTINGENT DEFERRED SALES CHARGE. The CDSC will be waived on
redemptions of Class B shares and of Class A shares that are subject to a CDSC
unless indicated otherwise, in the circumstances defined below:
- - Redemptions of Class B shares made under a Systematic Withdrawal Plan (see
"How to Redeem Shares"), as long as your annual redemptions do not exceed 10%
of your account value at the time you established your Systematic Withdrawal
Plan and 10% of the value of subsequent investments (less redemptions) in that
account at the time you notify Investor Services. This waiver does not apply
to Systematic Withdrawal Plan redemptions of Class A shares that are subject
to a CDSC.
- -------------------------------------------------------------------------------
UNDER CERTAIN
CIRCUMSTANCES, THE CDSC ON
CLASS B AND CLASS A SHARE
REDEMPTIONS WILL BE WAIVED.
- -------------------------------------------------------------------------------
- - Redemptions made to effect distributions from an Individual Retirement Account
either before or after age 59 1/2, as long as the distributions are based on
your life expectancy or the joint-and-last survivor life expectancy of you and
your beneficiary. These distributions must be free from penalty under the
Code.
- - Redemptions made to effect mandatory distributions under the Code after age
70 1/2 from a tax-deferred retirement plan.
- - Redemptions made to effect distributions to participants or beneficiaries from
certain employer-sponsored retirement plans including those qualified under
section 401(a) of the Code, custodial accounts under Section 403(b)(7) of the
Code and deferred compensation plans under Section 457 of the Code. The waiver
also applies to certain returns of excess contributions made to these plans.
In all cases, the distributions must be free from penalty under the Code.
- - Redemptions due to death or disability.
- - Redemptions made under the Reinvestment Privilege, as described in "Additional
Services and Programs" of this Prospectus.
- - Redemptions made pursuant to a Fund's right to liquidate your account if you
own fewer than 50 shares.
- - Redemptions made in connection with certain liquidation, merger or acquisition
transactions involving other investment companies or personal holding
companies.
- - Redemptions from certain IRA and retirement plans which purchased shares prior
to October 1, 1992.
If you qualify for a CDSC waiver under one of these situations, you must notify
Investor Services either directly or through your Selling Broker at the time you
make your redemption. The waiver will be granted once Investor Services has
confirmed that you are entitled to the waiver.
CONVERSION OF CLASS B SHARES. Your Class B shares and an appropriate portion of
reinvested dividends on those shares will be converted into Class A shares
automatically no later than the month following eight years after the shares
were purchased, resulting in lower annual distribution fees. If you exchanged
Class B
24
<PAGE> 25
shares into either Fund from another John Hancock fund, the calculation will be
based on the time you purchased the shares in the original fund. The Funds have
been advised that the conversion of Class B shares to Class A shares of the Fund
should not be taxable for Federal income tax purposes and should not change a
shareholder's tax basis or holding period for the converted shares.
HOW TO REDEEM SHARES
You may redeem all or a portion of your shares on any business day. Your shares
will be redeemed at the next NAV calculated after your redemption request is
received in good order by Investor Services, less any applicable CDSC. A Fund
may hold payment until reasonably satisfied that investments that 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, a Fund generally sends you payment on the next
business day. When you redeem your shares, you may realize a taxable gain or
loss depending usually on the difference between what you paid for them and what
you receive for them, subject to certain tax rules. Under unusual circumstances,
a Fund may suspend redemptions or postpone payment for up to seven days or
longer, as permitted by Federal securities laws.
25
<PAGE> 26
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
BY TELEPHONE All Fund shareholders are automatically eligible for the
telephone redemption privilege. Call 1-800-225-5291, from
8:00 A.M. to 4:00 P.M. (New York time), Monday through
Friday, excluding days on which the New York Stock Exchange
is closed. Investor Services employs the following
procedures to confirm that instructions received by
telephone are genuine. Your name, the account number,
taxpayer identification number applicable to the account
and other relevant information may be requested. In
addition, telephone instructions are recorded.
You may redeem up to $100,000 by telephone, but the address
on the account must not have changed for the last 30 days.
A check will be mailed to the exact name(s) and address
shown on the account.
</TABLE>
- -------------------------------------------------------------------------------
TO ASSURE ACCEPTANCE OF
YOUR REDEMPTION REQUEST,
PLEASE FOLLOW THESE
PROCEDURES.
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------
If reasonable procedures, such as those described above,
are not followed, the Funds may be liable for any loss due
to unauthorized or fraudulent telephone instructions. In
all other cases, neither the Funds nor Investor Services
will be liable for any loss or expense for acting upon
telephone instructions made in accordance with the
telephone transaction procedures mentioned above.
Telephone redemption is not available for IRAs or other
tax-qualified retirement plans or shares of a Fund that are
in certificated 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
use EASI-Line. EASI-Line's telephone number is
1-800-338-8080.
---------------------------------------------------------------------------------
BY WIRE If you have a telephone redemption form on file with a
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 a fee for this service.
Redemptions of less than $1,000 will be sent by check or
electronic funds transfer.
This feature may be elected by completing the "Telephone
Redemption" section on the Account Privileges Application
that is included with this Prospectus.
- ---------------------------------------------------------------------------------
IN WRITING Send a stock power or "letter of instruction" specifying
the name of the Fund, the dollar amount or the number of
shares to be redeemed, your name, class of shares, your
account number, and the additional requirements listed
below that apply to your particular account.
- ---------------------------------------------------------------------------------
TYPE OF REGISTRATION REQUIREMENTS
---------------- -----------
Individual, Joint Tenants, Sole A letter of instruction signed (with titles
Proprietorship, Custodial where applicable) by all persons authorized
(Uniform Gifts or Transfer to to sign for the account, exactly as it is
Minors Act), 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 guaranteed.
(If the Trustee's name is not registered on
your account, also provide a copy of the
trust document, certified within the last 60
days.)
If you do not fall into any of these registration categories, please call
1-800-225-5291 for further instructions.
- ---------------------------------------------------------------------------------
</TABLE>
26
<PAGE> 27
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------
A signature guarantee is a widely accepted way to protect you and the Funds by
verifying the signature on your request. It may not be provided by a notary
public. If the net asset value of the shares redeemed is $100,000 or less, John
Hancock Funds may guarantee the signature. The following institutions may
provide you with a signature guarantee, provided that the institution meets
credit standards established by Investor Services: (i) a bank; (ii) a securities
broker or dealer, including a government or municipal securities broker or
dealer, that is a member of a clearing corporation or meets certain net capital
requirements; (iii) a credit union having authority to issue signature
guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, a federal savings bank or association; or (v) a
national securities exchange, a registered securities exchange or a clearing
agency.
</TABLE>
- -------------------------------------------------------------------------------
WHO MAY GUARANTEE YOUR
SIGNATURE.
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------
THROUGH YOUR BROKER. Your broker may be able to initiate the redemption. Contact
your broker 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.
</TABLE>
- -------------------------------------------------------------------------------
ADDITIONAL INFORMATION
ABOUT REDEMPTIONS.
<TABLE>
<S> <C> <C>
- -------------------------------------------------------------------------------
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 investment. No
CDSC will be imposed on involuntary redemption of shares.
Shareholders will be notified before these redemptions are to be made or this
fee is imposed and will have 30 days to purchase additional shares to bring
their account balance up to the required minimum. Unless the number of shares
acquired by further purchases and dividend reinvestments, if any, exceeds the
number of shares redeemed, repeated redemptions from a smaller account may
eventually trigger this policy.
- -------------------------------------------------------------------------------
</TABLE>
ADDITIONAL SERVICES AND PROGRAMS
EXCHANGE PRIVILEGE
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 a Fund only for shares of the same class of another John Hancock fund. For
this purpose, John Hancock funds with only one class of shares will be treated
as Class A whether or not they have been so designated.
- -------------------------------------------------------------------------------
YOU MAY EXCHANGE SHARES OF
EITHER FUND FOR SHARES OF
THE SAME CLASS IN ANOTHER
JOHN HANCOCK FUND.
- -------------------------------------------------------------------------------
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 either Fund which are subject to a CDSC may be exchanged into
Class B shares of another John Hancock fund without incurring the CDSC; however,
these shares will be subject to the CDSC schedule of the shares acquired (except
exchanges into John Hancock Short-Term Strategic Income Fund and John Hancock
Limited Term Government Fund which will be subject to the initial fund's CDSC).
For purposes of computing the CDSC payable upon redemption of shares acquired in
an exchange, the holding period of the original shares is added to the holding
period of the shares acquired in an exchange. However, if you exchange Class B
shares purchased prior to January 1, 1994 for Class B shares of any other John
Hancock fund, you will be subject to the CDSC schedule that was in effect at
your initial purchase date.
You may exchange Class B shares of the Funds into shares of John Hancock Money
Market Fund at net asset value. However, you will continue to be subject to
27
<PAGE> 28
a CDSC upon redemption. The rate of the CDSC will be the rate in effect for the
original fund at the time of exchange.
Each Fund reserves the right to require you to keep previously exchanged shares
(and reinvested dividends) in the Fund for 90 days before you are permitted to
execute a new exchange. The Funds may also terminate or alter the terms of the
exchange privilege to shareholders upon 60 days' notice.
An exchange of shares is treated as a redemption of shares of one fund and the
purchase of shares in another for Federal income tax purposes. An exchange may
result in a taxable gain or loss.
When you make an exchange, your account registration in both the existing and
new account must be identical. The exchange privilege is available only in
states where the exchange can be made legally.
Under exchange agreements with John Hancock Funds, certain dealers, brokers and
investment advisers may exchange their client's Fund shares, subject to the
terms of those agreements and John Hancock Funds' right to reject or suspend
those exchanges at any time. Because of the restrictions and procedures under
those agreements, the exchanges may be subject to timing limitations and other
restrictions that do not apply to exchanges requested by shareholders directly,
as described above.
Because Fund performance and shareholders can be hurt by excessive trading, each
Fund reserves the right to terminate the exchange privilege for any person or
group that, in John Hancock Funds' judgment, is involved in a pattern of
exchanges that coincide with a "market timing" strategy that may disrupt each
Fund's ability to invest effectively according to its investment objective and
policies, or might otherwise affect the Fund and its shareholders adversely. The
Funds may also temporarily or permanently terminate the exchange privilege for
any person who makes seven or more exchanges out of a Fund per calendar year.
Accounts under common control or ownership will be aggregated for this purpose.
Although the Funds will attempt to give you prior notice whenever it is
reasonably able to do so, they may impose these restrictions at any time.
BY TELEPHONE
1. When you fill out the application for your purchase of Fund shares, you
automatically authorize exchanges by telephone unless you check the box
indicating that you do not wish to authorize 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.
3. Investors 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.
28
<PAGE> 29
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 dollar amount
you wish to exchange
Sign your request exactly as the account is registered.
2. Mail the request and information to:
John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
REINVESTMENT PRIVILEGE
1. You will not be subject to a sales charge on Class A shares reinvested in any
John Hancock fund that is otherwise subject to a sales charge as long as the
reinvestment is made within 120 days from the redemption date. If a CDSC was
paid upon a redemption, you may reinvest at net asset value in the same class
of shares from which the redemption was made 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 the CDSC. For purposes of
computing the CDSC payable upon a subsequent redemption, the holding period
of the shares acquired through reinvestment will include the holding period
of the redeemed shares.
- -------------------------------------------------------------------------------
IF YOU REDEEM SHARES OF EITHER FUND, YOU
MAY BE ABLE TO REINVEST THE PROCEEDS IN
SHARES OF THAT FUND OR ANOTHER JOHN
HANCOCK FUND WITHOUT PAYING AN ADDITIONAL
SALES CHARGE.
- -------------------------------------------------------------------------------
2. Any portion of the redemption may be reinvested in Fund shares or in shares
of any of the other John Hancock funds, subject to the minimum investment
limit of that fund.
3. To reinvest, you must notify Investor Services in writing. Include the
Fund(s) name, the account number and class from which your shares were
originally redeemed.
SYSTEMATIC WITHDRAWAL PLAN
1. You may elect the Systematic Withdrawal Plan at any time by completing the
Account Privileges Application which is attached to this Prospectus. You can
also obtain the Application from your registered representative or by calling
1-800-225-5291.
2. To be eligible, you must have at least $5,000 in your account.
3. Payments from your account can be made monthly, quarterly, semi-annually or
on a selected monthly basis to yourself or any other designated payee.
- -------------------------------------------------------------------------------
YOU CAN PAY ROUTINE BILLS
FROM YOUR ACCOUNT OR MAKE
PERIODIC DISBURSEMENTS FROM
YOUR RETIREMENT ACCOUNTS
TO COMPLY WITH IRS
REGULATIONS.
- -------------------------------------------------------------------------------
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.
29
<PAGE> 30
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 initial sales charges on purchases of Class A shares or to a CDSC
on your redemptions of Class B shares. In addition, your redemptions are
taxable events.
6. Redemptions will be discontinued if the U.S. Postal Service cannot deliver
your checks, or if deposits to a bank account are returned for any reason.
MONTHLY AUTOMATIC ACCUMULATION PROGRAM (MAAP)
1. You may authorize an investment to be automatically drawn each month from
your bank for investment in fund shares under the "Automatic Investing" and
"Bank Information" sections of the Account Privileges Application.
- -------------------------------------------------------------------------------
YOU CAN MAKE AUTOMATIC
INVESTMENTS AND SIMPLIFY
YOUR INVESTING.
- -------------------------------------------------------------------------------
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
Funds.
5. If you have payments being withdrawn from a bank account and we are notified
that the account has been closed, withdrawals will be discontinued.
GROUP INVESTMENT PROGRAM
1. An individual account will be established for each participant, but the 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.
- -------------------------------------------------------------------------------
ORGANIZED GROUPS OF AT
LEAST FOUR PERSONS MAY
ESTABLISH ACCOUNTS.
- -------------------------------------------------------------------------------
2. The initial aggregate investment of all participants in the group must be at
least $250.
3. There is no additional charge for this program. There is no obligation to
make investments beyond the minimum, and you may terminate the program at any
time.
RETIREMENT PLANS
1. You may use either Fund as an investment vehicle 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) Plans), and 457 Plans.
2. The initial investment minimum or aggregate minimum for any of these 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.
30
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(NOTES)
<PAGE> 32
JOHN HANCOCK
GOLD &
JOHN HANCOCK GOLD GOVERNMENT
& GOVERNMENT FUND FUND
JOHN HANCOCK
REGIONAL BANK FUND
INVESTMENT ADVISER A MUTUAL FUND SEEKING TO ACHIEVE CAPITAL
John Hancock Advisers, Inc. APPRECIATION AND PRESERVATION OF THE
101 Huntington Avenue PURCHASING POWER OF THE INVESTOR'S CAPITAL.
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
JOHN HANCOCK
CUSTODIAN REGIONAL
Investors Bank & Trust Company BANK FUND
24 Federal Street
Boston, Massachusetts 02110
TRANSFER AGENT
John Hancock Investor Services A MUTUAL FUND SEEKING TO ACHIEVE CAPITAL
Corporation APPRECIATION FROM A PORTFOLIO OF EQUITY
P.O. Box 9116 SECURITIES OF REGIONAL BANKS AND LEADING
Boston, Massachusetts 02205-9116 INSTITUTIONS.
INDEPENDENT AUDITOR
Price Waterhouse LLP CLASS A AND CLASS B SHARES
160 Federal Street PROSPECTUS
Boston, Massachusetts 02110 MARCH 1, 1995 AS REVISED AUGUST 1 1995
HOW TO OBTAIN INFORMATION
ABOUT THE FUND
For: Service Information
Telephone Exchange
Invest-by-Phone call 1-800-225-5291 101 HUNTINGTON AVENUE
Telephone Redemption BOSTON, MASSACHUSETTS 02199-7603
For: TDD call 1-800-544-6713 TELEPHONE 1-800-225-5291
JHD-0104P 8/95 (LOGO) Printed on Recycled Paper
