<PAGE>
JOHN HANCOCK SPECIAL EQUITIES FUND, MARCH 1, 1994
SUPPLEMENT TO CLASS A AND CLASS B PROSPECTUS
Effective January 1, 1995, the prospectus is amended as follows: (a) John
Hancock Broker Distribution Services, Inc. will be known as John Hancock Funds,
Inc. ("John Hancock Funds") and (b) John Hancock Fund Services, Inc. will be
known as John Hancock Investor Services Corporation ("Investor Services").
The "Initial Sales Charge Alternative - Class A Shares" section under SHARE
PRICE is supplemented as follows:
In addition to the reallowance allowed to all Selling Brokers, John
Hancock Funds will pay the following: round trip airfare to a resort
will be offered to each registered representative of a Selling Broker
(if the Selling Broker has agreed to participate) who sells certain
amounts of shares of John Hancock mutual funds. John Hancock Funds will
make these incentive payments out of its own resources. Other than
distribution fees, the Fund does not bear distribution expenses.
The "Contingent Deferred Sales Charge-Investments of $1 million or more in Class
A shares" section under SHARE PRICE is supplemented as follows:
Existing full service clients of John Hancock Mutual Life Insurance
Company group annuity contract holders as of September 1, 1994, may purchase
Class A shares with no initial sales charge, but if the shares are redeemed
within 12 months after the end of the calendar year in which the purchase was
made, a contingent deferred sales charge will be imposed at the rate for Class A
shares described in the prospectus.
The "Waiver of Contingent Deferred Sales Charge" section under SHARE PRICE is
supplemented as follows:
The CDSC is waived upon the request of the shareholder on redemptions
in the following additional circumstances: (1) distributions from an
Individual Retirement Account either before or after age 59 1/2 if
based on the participant's life expectancy or the participant's and the
beneficiary's joint and last survivor life expectancies if permitted to
be made without penalty under the Code; and (2) redemptions of Class B
shares under the Systematic Withdrawal Plan (See HOW TO REDEEM SHARES)
which are limited to no more than 10% of the account value at the time
of the establishment of the Systematic Withdrawal Plan and to 10% of
the value of subsequent investments (less redemptions) in that account
upon notification by the shareholder to Investor Services. The CDSC
will not be waived in the case of Systematic Withdrawal Plan
redemptions of Class A shares which are subject to a CDSC.
<PAGE>
The "Exchange Privilege" section under ADDITIONAL SERVICES AND PROGRAMS is
supplemented as follows:
Pursuant to exchange agreements with John Hancock Funds, certain
dealers, brokers and investment advisers may exchange their clients'
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, the 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 the Fund's ability to invest
effectively according to its investment objective and policies, or
might otherwise affect the Fund and its shareholders adversely. The
Fund may also temporarily or permanently terminate the exchange
privilege for any person who makes seven or more exchanges out of the
Fund per calendar year. Accounts under common control or ownership will
be aggregated for this purpose. Although the Fund will attempt to give
you prior notice whenever it is reasonably able to do so, it may impose
these restrictions at any time.
The "Alternative Purchase Arrangements" section is supplemented as follows:
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.
The "INSTITUTIONAL INVESTORS" section is supplemented as follows:
Class C shares are also available to existing full-service clients of
John Hancock Mutual Life Insurance Company group annuity contract holders as of
September 1, 1994. John Hancock Funds, out of its own resources may pay to a
Selling Broker an annual service fee up to 0.20% of the amount invested in Class
C shares by these clients.
Plans that qualify to purchase Class C shares will also be permitted to
purchase shares of any other class of the Fund.
February 15, 1995
1800S-2/95
<PAGE>
JOHN HANCOCK
SPECIAL
EQUITIES
FUND
CLASS A AND CLASS B
PROSPECTUS
MARCH 1, 1994
TABLE OF CONTENTS
Page
Expense Information 2
The Fund's Financial Highlights 3
Investment Objective and Policies 4
Organization and Management of the Fund 7
Alternative Purchase Arrangements 7
The Fund's Expenses 9
Dividends and Taxes 9
Performance 10
How to Buy Shares 11
Share Price 13
How to Redeem Shares 18
Additional Services and Programs 20
Institutional Investors 23
This Prospectus sets forth information about John Hancock Special Equities
Fund (the "Fund") that you should know before investing. Please read and retain
it for future reference.
Additional information about the Fund has been filed with the Securities
and Exchange Commission (the "SEC"). You can obtain a copy of the Fund's
Statement of Additional Information, dated March 1, 1994 and incorporated by
reference into this Prospectus, free of charge by writing or telephoning: John
Hancock Fund Services, Inc., P.O. Box 9116, Boston, Massachusetts
02205-9116.1-800-225-5291,(1-800-554-6713 TDD).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
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 the Fund. The operating expenses included in the table and
hypothetical example below are based on fees and expenses for the Class A and
Class B shares of the Fund for the fiscal year ended October 31, 1993, adjusted
to reflect current fees and expenses. Actual fees and expenses of Class A shares
and Class B shares may be greater or less than those indicated.
Class A Class B
Shares* Shares*
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+ None None
Exchange fee None None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets)
Management fee++ 0.83% 0.83%
12b-1 fee*** 0.30% 1.00%
Other expenses 0.62% 0.64%
Total Fund operating expenses 1.75% 2.47%
* The information set forth in the foregoing table relates only to the Class A
shares and Class B shares. On December 15, 1992 the Board of Trustees
authorized the issuance of three classes of the Fund, designated as Class A,
Class B and Class C. Class B shares commenced operations on March 1, 1993.
See "Organization and Management of the Fund." Class C shares are only
offered to certain institutional investors and are described in a separate
prospectus. Some individual investors who are currently eligible to purchase
Class A and Class B shares may also be participants in plans that are
eligible to purchase Class C shares. See "How to Buy Shares--Institutional
Investors." Class C shares are not subject to a sales charge on purchases,
redemptions, or reinvested dividends, nor are they subject to deferred sales
charges or an exchange fee. Class C expenses are identical to those of Class
A shares except that the transfer agent fee may differ and there is no 12b-1
Fee on Class C shares.
** No sales charge is payable at the time of purchase on investments of $1
million or more, but for these investments a contingent deterred sales
charge may be imposed, as described below 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 the Fund's average net assets, and the remaining portion will be
used to cover distribution expenses. See "The Fund's Expenses."
+ Redemption by wire fee (currently $4.00) not included.
++ The calculation of the management fee is based on average net assets at
October 31, 1993. See "The Fund's Expenses."
<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 Years
<S> <C> <C> <C> <C>
You would pay the following expenses
for the indicated period of years
on a hypothetical $1,000 investment,
assuming 5% annual return:
Class A Shares $67 $102 $140 $246
Class B Shares
--Assuming complete redemption at end of period $75 $107 $152 $263
--Assuming no redemption $25 $ 77 $132 $263
</TABLE>
You would pay the following expenses for the indicated period of years on a
hypothetical $1,000 investment in Class C shares, assuming a 5% annual return; 1
Year $17; 3 years $53; 5 years $92; and 10 years $200.
(This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.)
The Fund's payment of a distribution fee may result in a long-term
shareholder indirectly paying more than the economic equivalent of the maximum
front-end sales charge permitted under the National Association of Securities
Dealers Rules of Fair Practice.
The management and 12b-1 fees referred to above are more fully explained in
this Prospectus under the caption "The Fund's Expenses" and in the Statement of
Additional Information under the captions "Investment Advisory and Other
Services" and "Distribution Contract."
THE FUND'S FINANCIAL HIGHLIGHTS
The following table of Financial Highlights has been audited by Ernst &
Young, the Fund's independent auditors for the fiscal year ended October 31,
1993, whose unqualified report is included in the Fund's 1993 Annual Report and
is included in the Statement of Additional Information.
<PAGE>
Selected data for each class of shares outstanding throughout each period
indicated are as follows:
<TABLE>
<CAPTION>
Period
From
February 4,
1985 to
Year Ended October 31, October 31,
CLASS A 1993 1992 1991 1990 1989 1988 1987 1986 1985<F7>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value,
Beginning of Period $10.99 $ 9.71 $ 4.97 $6.38 $4.89 $4.30 $6.08 $5.21 $5.00
Net Investment Income
(Loss)<F1> (0.20)<F2> (0.19)<F2> (0.10) (0.12) 0.01 0.04 (0.03) (0.03) 0.03
Net Realized and
Unrealized Gain (Loss)
on Investments 5.43035 2.1379 4.84 (1.2725) 1.5325 .55 (1.262) 0.9347 0.18
Total from Investment
Operations 5.23035 1.9479 4.74 (1.3925) 1.5425 .59 (1.292) 0.9047 0.21
Less Distributions:
Dividends from Net
Investment Income -- -- -- (0.0175) (0.0525) -- -- (0.0275) --
Distributions from
Net Realized Gain on
Investments Sold (0.09035) (0.6679) -- -- -- -- (0.453) (0.0072) --
Distributions from
Capital Paid-In -- -- -- -- -- -- (0.035) -- --
Total Distributions (0.09035) (0.6679) -- (0.0175) (0.0525) -- (0.488) (0.0347) --
Net Asset Value, End
of Period $16.13 $10.99 $ 9.71 $4.97 $6.38 $4.89 $4.30 $6.08 $5.21
Total Investment Return
at Net Asset Value 47.83% 20.25% 95.37% (21.89%) 31.82% 13.72% (28.68%) 17.38% 4.20%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of
Period (000's omitted) $296,793 $44,665 $19,713 $8,166 $12,285 $11,714 $10,637 $13,780 $2,467
Ratio of Expenses to
Average Net Assets 1.84% 2.24% 2.75% 2.63% 1.50% 1.50% 1.50% 1.50% 1.50%<F6>
Ratio of Net Investment
Income (Loss) to
Average Net Assets (1.49%) (1.91%) (2.12%) (1.58%) 0.47% 0.82% (0.57%) (0.57%) 1.42%<F6>
Portfolio Turnover Rate 33% 114% 163% 113% 115% 91% 93% 64% 15%
CLASS B <F3>
PER SHARE OPERATING PERFORMANCE
Net Asset Value,
Beginning of Period $12.30
Net Investment Income
(Loss) (0.18)<F2>
Net Realized and
Unrealized Gain (Loss)
on Investments 3.96
Total from Investment
0perations 3.78
Net Asset Value,
End of Period , $16.08
Total Investment Return
at Net Asset Value 30.73%<F4>
RATIOS AND SUPPLEMENTAL DATA
Net Assets End of Period
(000 s omitted) $158,281
Ratio of Expenses to
Average Net Assets 2.34%<F6>
Ratio of Net Investment
Income (Loss) to Average
Net Assets (2.03%)<F6>
Portfolio Turnover Rate 33%
CLASS C <F5>
PER SHARE OPERATING PERFORMANCE
Net Asset Value,
Beginning of Period $14.90
Net Investment Income
(Loss) (0.03)<F2>
Net Realized and Unrealized
Gain (Loss) on Investments 1.00
Total from Investment
Operations 0.97
Net Asset Value,
End of Period $15.87
Total Investment Return
at Net Asset Value 6.51%<F4>
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period
(000's omitted) $ 2,838
Ratio of Expenses to
Average Net Assets 1.45%<F6>
Ratio of Net Investment
Income (Loss) to Average
Net Assets (1.35%)<F6>
Portfolio Turnover Rate 33%
<FN>
<F1>Reflects expense limitation in effect during the years ended October 31,
1985 through 1991 (see Note B to the financial statements in the Statement
of Additional Information). As a result of such limitations, expenses of the
Fund for the years ended October 31, 1991, 1990, 1989, 1987, 1986 and 1985
reflect reductions of $.002, $.02, $.03, $.07, $.04, $.O9 and $.18,
respectively. Absent of such limitation, for the years ended October 31
1991, 1990, 1989, 1987, 1986 and 1985 the ratio of net expenses would have
been 2.79%, 2.95%. 2.57%, 2.94%, 2.23%, 3.47% and 9.84%, respectively and
the ratio of net investment income (loss) to average net assets would have
been (2.16%), (1.90%), (O.60%), (0.62%), (1.30%), (2.55%) and (6.91%),
respectively.
<F2>Net investment Loss per share has been calculated based on average monthly
shares outstanding.
<F3>Class B shares commenced on March 1, 1993.
<F4>Not annualized.
<F5>Class C shares commenced operations on September 1, 1993.
<F6>On an annualized basis.
<F7>For the period from December 17, 1984 (date of John Hancock Advisers, Inc.'s
initial investment) to February 4, 1985 the Fund had not commenced
investment operations.
</TABLE>
INVESTMENT OBJECTIVE AND POLICIES
THE FUND SEEKS GROWTH OF CAPITAL BY INVESTING PRIMARILY IN EQUITY SECURITIES OF
EMERGING GROWTH AND SPECIAL SITUATION COMPANIES.
The investment objective of the Fund is to seek growth of capital by investing
in a diversified portfolio of equity securities consisting primarily of emerging
growth companies and of companies in "special situations," collectively referred
to as "Special Equities." In seeking to achieve this objective, the Fund will
invest at least 65% of its total assets in Special Equities. The potential for
growth of capital will be the basis for selection of portfolio securities.
Current income will not be a factor in their selection. The Fund's investments
will be subject to the market fluctuation and risks inherent in all securities.
There is no assurance that the Fund will achieve its investment objective.
THE FUND'S INVESTMENTS IN SPECIAL EQUITIES WILL BE PRIMARILY IN COMMON STOCK BUT
MAY ALSO INCLUDE PREFERRED STOCK, SECURITIES CONVERTIBLE INTO COMMON STOCK,
RIGHTS, WARRANTS, FOREIGN SECURITIES WITH THE SAME CHARACTERISTICS AS SPECIAL
EQUITIES AND AMERICAN DEPOSITARY RECEIPTS (ADRS).
The Fund may also invest in:
--equity securities of established companies believed by John Hancock
Advisers, Inc. (the "Adviser") to offer growth potential.
--cash or investment grade corporate debt securities (debt securities which
have, at the time of purchase, a rating within the four highest grades as
determined by Moody's Investors Services, Inc.--Aaa, Aa, A or Baa or
Standard & Poor's Corporation--AAA, AA, A or BBB), money market instruments
or securities of the United States Government or its agencies or
instrumentalities ("government securities"), for temporary defensive
purposes or to provide for anticipated redemptions of the Fund's shares.
Debt securities rated Baa or BBB are considered medium grade obligations
with speculative characteristics, and adverse economic conditions or
changing circumstances may weaken capacity to pay interest and repay
principal. If the rating of a debt security is reduced below Baa or BBB,
the Adviser will consider whatever action is appropriate consistent with
the Fund's investment objectives and policies.
THE FUND SEEKS TO IDENTIFY EMERGING GROWTH COMPANIES WHICH CAN SHOW SUSTAINED
INCREASES IN EARNINGS.
The emerging growth companies whose securities are selected for the Fund's
portfolio will generally have annual gross sales of greater than $100 million,
although companies with smaller sales which, in the opinion of the Adviser, have
significant growth potential may also be selected. Thus, there is no requirement
that a company have annual sales of a pre-selected minimum amount before the
Fund will invest in its securities. In many cases, a company may not yet be
profitable when the Fund invests in its securities.
The Fund seeks emerging growth companies that either occupy a dominant position
in an emerging industry or have a significant and growing market share in a
large, fragmented industry. The Fund seeks to invest in those companies with
potential for high growth, stable earnings, ability to self-finance, a position
of industry leadership, and strong, visionary management. The Adviser believes
that, while these companies present above-average risks, properly selected
emerging growth companies have the potential to increase their earnings at rates
substantially in excess of the growth of earnings of other companies. This
increase in earnings is likely to enhance the value of an emerging growth
company's equity securities
<PAGE>
The Fund may Invest in equity securities of companies in special situations that
the Adviser believes present opportunities for capital growth. A company is in a
"special situation" when an unusual and possibly non-repetitive development is
anticipated or is taking place. Since every special situation involves, to some
extent, a break with past experience, the uncertainties in the appraisal of the
future value of the company's equity securities and risk of possible decline in
value of the Fund's investment are significant.
The Fund may effect portfolio transactions without regard to holding periods, if
in the Adviser's judgment such transactions are advisable in light of a change
in circumstances of a particular company or within a particular industry or in
general market, economic or financial conditions. The Fund does not generally
consider the length of time it has held a particular security in making its
investment decisions. Portfolio turnover rates of the Fund for recent years are
shown in the section "The Fund's Financial Highlights."
THE FUND MAY EMPLOY CERTAIN INVESTMENT STRATEGIES TO HELP ACHEIVE ITS INVESTMENT
OBJECTIVES.
FOREIGN SECURITIES. The Fund may invest in U.S. dollar-denominated securities of
foreign issuers which are traded in the United States. ADRs (sponsored and
unsponsored) are receipts typically issued by an American bank or trust company
which evidence ownership of underlying securities issued by a foreign
corporation, and are designed for trading in United States securities markets.
Issuers of unsponsored ADRs are not contractually obligated to disclose material
information in the United States and, therefore, there may not be a correlation
between that information and the market value of an unsponsored ADR. Investment
in foreign securities may involve risks not present in domestic investments.
Foreign companies may not be subject to accounting standards or government
supervision comparable to U.S. companies, and there is often less publicly
available information about their operations. They can also be affected by
political or financial instability abroad.
THE FUND IS DESIGNED FOR INVESTORS WHO ARE WILLING TO ASSUME GREATER THAN USUAL
RISKS IN THE HOPE OF REALIZING GREATER THAN USUAL RETURNS.
The Fund is not intended as a complete investment program. The Fund's shares are
suitable for investment by persons who can invest without concern for current
income, who are in a financial position to assume above-average investment risk
and who are prepared to experience above-average fluctuations in net asset value
over the intermediate and long-term. Emerging growth companies and companies in
special situations will usually not pay dividends.
Generally, emerging growth companies will have high price/earnings ratios in
relation to the market. A high price/earnings ratio generally indicates that the
market value of a security is especially sensitive to developments which could
affect the company's potential for future earnings. These companies may have
limited product lines, market or financial resources, or they may be dependent
upon a limited management group. Emerging growth companies may have operating
histories of fewer than three years.
Full development of the potential of emerging growth companies frequently takes
time. For this reason, the Fund should be considered as a long-term investment
and not as a vehicle for seeking short-term profits and income.
The securities in which the Fund invests will often be traded in the
over-the-counter market or on a regional securities exchange and may not be
traded every day or in the volume typical of trading on a national securities
exchange. They may be subject to wide fluctuations in market value. The trading
market for any given security may be sufficiently thin as to make it difficult
for the Fund to dispose of a substantial block of such securities. The
disposition by the Fund of portfolio securities to meet redemptions or otherwise
may require the Fund to sell these securities at a discount from market prices
or during periods when, in the Adviser's judgment, such disposition is not
desirable or to make many small sales over a lengthy period of time.
ILLIQUID SECURITIES. The Fund may purchase restricted securities, including
those eligible for resale to "qualified institutional buyers" pursuant to Rule
144A under the Securities Act of 1933 (the "Securities Act"), subject to an
investment restriction limiting all illiquid securities held by the Fund to not
more than 15% of the Fund's net assets. The Trustees will monitor the Fund's
investments in these securities, focusing on certain factors, including
valuation, liquidity and availability of information. This investment practice
could have the effect of increasing the level of illiquidity in the Fund to the
extent that qualified institutional buyers become for a time uninterested in
purchasing these restricted securities.
The Fund may invest in securities which are subject to legal or contractual
delays in or restrictions on resale ("restricted securities"). The registration
of such securities under the Securities Act of 1933, as amended, may be required
prior to sale, and the Fund may have to bear all or a part of the expense of
such registration.
REPURCHASE AGREEMENTS. The Fund may enter into repurchase agreements. In a
repurchase agreement, the Fund buys a security subject to the right and
obligation to sell it back at a higher price. These transactions must be fully
collateralized at all times, but involve some credit risk to the Fund if the
other party defaults on its obligation and the Fund is delayed or prevented from
liquidating the collateral.
THE FUND FOLLOWS CERTAIN POLICIES WHICH MAY HELP REDUCE INVESTMENT RISK.
The Fund has adopted certain investment restrictions which are detailed in the
Statement of Additional Information, where they are classified as fundamental or
nonfundamental. The Fund's investment objective and those investment
restrictions designated as fundamental may not be changed without shareholder
approval. All other investment policies and restrictions are non-fundamental and
can be changed by a vote of the Trustees without shareholder approval. Portfolio
turnover rates of the Fund for recent years are shown in the section "The Fund's
Financial Highlights." A high rate of portfolio turnover (100% or more) involves
correspondingly greater brokerage transaction costs which must be borne by the
Fund, and its shareholders and may, under certain circumstances, make it more
difficult for the Fund to qualify as a regulated investment company under the
Internal Revenue Code of 1986. See "Tax Status" and "Brokerage Allocation" in
the Statement of Additional Information.
BROKERS ARE CHOSEN BASED ON BEST PRICE AND EXECUTION.
When choosing brokerage firms to carry out the Fund's transactions, the primary
consideration is execution at the most favorable prices, taking into account the
broker's professional ability and quality of service. Consideration may also be
given to the broker's sales of Fund shares. Pursuant to procedures determined by
the Trustees, the Adviser may place securities transactions with brokers
affiliated with the Adviser. These brokers include Tucker Anthony Incorporated
and Sutro & Company, Inc. They are indirectly owned by John Hancock Mutual Life
Insurance Company, which in turn indirectly owns the Adviser.
ORGANIZATION AND MANAGEMENT OF THE FUND
THE TRUSTEES ELECT OFFICERS AND RETAIN THE INVESTMENT ADVISER WHO IS REPONSIBLE
FOR THE DAY-TO-DAY OPERATIONS OF THE FUND, SUBJECT TO THE TRUSTEES' POLICIES AND
SUPERVISION.
The Fund is a diversified open-end management investment company organized as a
Massachusetts business trust in 1984. The Fund has an unlimited number of
authorized shares of beneficial interest. The Fund's Declaration of Trust
permits the Trustees, without shareholder approval, to create and classify
shares of beneficial interest into separate series of the Fund. As of the date
of this Prospectus, the Trustees have not authorized the creation of any new
series of the Fund. Although additional series may be added in the future, the
Trustees have no current intention of creating additional series of the Fund.
The Fund's Declaration of Trust also permits the Trustees, to classify and
reclassify any series or portfolio of shares into one or more classes.
Accordingly, the Trustees have authorized the issuance of three classes of the
Fund, designated as Class A, Class B, and Class C. The shares of each class
represent an interest in the same portfolio of investments of the Fund and have
equal rights as to voting, redemption, dividends and liquidation. However, each
class of shares bears different distribution and transfer agent fees, and Class
A and Class B shareholders have exclusive voting rights with respect to their
distribution plans.
Shareholders have certain rights to remove Trustees. The Fund is not required
and does not intend to hold annual shareholder meetings, although special
meetings may be held for such purposes as electing or removing Trustees,
changing fundamental investment restrictions and policies or approving a
management contract. The Fund, under certain circumstances, will assist in
shareholder communications with other shareholders.
JOHN HANCOCK ADVISERS, INC. ADVISES INVESTMENT COMPANIES HAVING TOTAL ASSETS OF
APPROXIMATELY $10 BILLION.
The Adviser was organized in 1968 and is a wholly-owned indirect subsidiary of
the John Hancock Mutual Life Insurance Company, a financial services company.
The Adviser provides the Fund, and other investment companies in the John
Hancock group of funds, with investment research and portfolio management
services. John Hancock Broker Distribution Services, Inc. ("Broker Services")
distributes shares for all of the John Hancock mutual funds through selected
broker-dealers ("Selling Brokers"). Certain Fund officers are also officers of
the Adviser and Broker Services.
Day to day management of the Fund is carried out by Michael P. DiCarlo,
supported by an investment team of sector and global specialists from the
Adviser's equity group. Mr. DiCarlo also manages John Hancock Special
Opportunities Fund and oversees the Adviser's equity management operation. Mr.
DiCarlo is a Senior Vice President of the Adviser and has been associated with
the Adviser since 1984.
ALTERNATIVE PURCHASE ARRANGEMENTS
You can purchase shares of the Fund at a price equal to their net asset value
per share plus a sales charge. At your election, this charge may be imposed
either at the time of the purchase (see "Initial Sales Charge Alternative--Class
A Shares") or on a contingent deferred basis (see "Contingent Deferred Sales
Charge Alternative --Class B Shares"). If you do not specify on your account
application which class of shares you are purchasing, it will be assumed that
you are investing in Class A shares.
INVESTMENTS IN CLASS A SHARES OF THE FUND ARE SUBJECT TO AN INITIAL SALES
CHARGE.
CLASS A SHARES. If you elect to purchase Class A shares, you will incur an
initial sales charge unless the amount you 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 .30% of the
Fund's average daily net assets attributable to the Class A shares. Certain
purchases of Class A shares qualify for reduced initial sales charges. See
"Share Price--Qualifying for a Reduced Sales Charge."
INVESTMENTS IN CLASS B SHARES OF THE FUND ARE SUBJECT TO A CONTINGENT DEFERRED
SALES CHARGE.
CLASS B SHARES. You will not incur a sales charge when you purchase Class B
shares, but the shares are subject to a sales charge if you redeem them within
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 the Fund's average daily net assets
attributable to the Class B shares. Investing in Class B shares permits all of
your dollars to work from the time you make your investment, but the higher
ongoing distribution fee will cause these shares to have a higher expense ratio
than that of Class A shares. To the extent that any dividends are paid by the
Fund, these higher expenses will result in lower dividends than those paid on
Class A shares.
FACTORS TO CONSIDER IN CHOOSING AN ALTERNATIVE
YOU SHOULD CONSIDER WHICH CLASS OF SHARES WILL BE A MORE BENEFICIAL INVESTMENT
FOR YOU.
The alternative purchase arrangement allows you to choose the most beneficial
way to buy shares, given the amount of 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 accumulated CDSC and fees on
Class B shares would be less than the initial sales charge and accumulated fees
on Class A shares purchased at the same time, and to what extent this
differential would be offset by the Class A shares' lower expenses. To help you
make this determination, the table under the caption "Expense Information" on
page 2 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 a
reduced sales charge. See "Share Price--Qualifying for a Reduced Sales Charge".
Class A shares are subject to lower distribution and service fees and,
accordingly, pay correspondingly higher dividends per share, to the extent any
dividends are paid. However, because initial sales charges are deducted at the
time of purchase, you would not have all 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,
although remaining subject to higher distribution fees and, for a six-year
period, a CDSC.
In the case of Class A shares, the distribution expenses that Broker Services
incurs in connection with the sale of the shares will be paid from the proceeds
of the initial sales charge and the ongoing distribution and service fees. In
the case of Class B shares, the expenses will be paid from the proceeds of the
ongoing distribution and service fees, as well as the CDSC incurred upon
redemption within six years of purchase. The purpose and function of the Class B
shares' CDSC and ongoing distribution and service fees are the same as those of
the Class A shares' initial sales charge and ongoing distribution and service
fees. Sales personnel distributing the Fund's shares may receive different
compensation for selling each class of shares.
Dividends, if any, on Class A and Class B shares will be calculated in the same
manner, at the same time and on the same day and will be in the same amount.
However, each class will bear only its own distribution and service fees,
shareholder meeting expenses and any incremental transfer agency costs. See
"Dividends and Taxes."
THE FUND'S EXPENSES
For managing its investment and business affairs, the Fund pays a fee to the
Adviser which for the 1993 year was 0.71% of the Fund's average daily net
assets.
Net Asset Value Annual Rate
First $250,000,000 0.85%
Amount over $250,000,000 0.80%
The investment management fee is higher than the fees paid to most mutual funds
but comparable to fees paid by those funds with investment objectives similar to
that of the Fund.
THE FUND PAYS DISTRIBUTION AND SERVICE FEES FOR MARKETING AND SALES-RELATED
SHAREHOLDER SERVICING.
The Class A and Class B shareholders have adopted distribution plans (each a "
Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the
"1940 Act"). Under these Plans, the Fund will pay distribution and service fees
at an aggregate annual rate of 0.30% of the Class A shares' average daily net
assets and an aggregate annual rate of 1.00% of the Class B shares' average
daily net assets. In each case, up to 0.25% is for service expenses and the
remaining amount is for distribution expenses. The distribution fees will be
used to reimburse Broker Services for its distribution expenses including but
not limited to: (i) initial and ongoing sales compensation to Selling Brokers
and others (including affiliates of Broker Services) engaged in the sale of Fund
shares; (ii) marketing, promotional and overhead expenses incurred in connection
with the distribution of Fund shares; and (iii) with respect to Class B shares
only, interest expenses on unreimbursed distribution expenses. The service fees
will be used to compensate Selling Brokers for providing personal and account
maintenance services to shareholders. In the event Broker Services is not fully
reimbursed for payments made or expenses incurred by it under the Class A Plan,
these expenses will not be carried beyond twelve months from the date they were
incurred. These unreimbursed expenses under the Class B Plan will be carried
forward together with interest on the balance of these unreimbursed expenses.
The Fund's total expenses for the year ended October 31, 1993 for Class A and
Class B shares were 1.84% and 2.34%, respectively, of average daily net asset
value of each class.
DIVIDENDS AND TAXES
Dividends from the Fund's net investment income and capital gains are generally
declared and paid annually. 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 dividend on Class B shares will be
lower than that on Class A shares. See "Share Price."
TAXATION. Dividends from the Fund's net investment income and net short-term
capital gains are taxable to you as ordinary income. Dividends from the Fund's
net long-term capital gains are taxable as long-term capital gains. These
dividends are taxable whether you take them in cash or reinvest in additional
shares. Certain dividends may be paid in January of a given year, but they may
be taxable as if you received them the previous December. Corporate shareholders
may be entitled to take the corporate dividends received deduction for dividends
received by the Fund from U.S. domestic corporations, subject to certain
restrictions under the Internal Revenue Code. The Fund will send you a statement
by January 31 showing the tax status of the dividends you received for the prior
year.
The Fund has qualified and intends to continue to qualify as a regulated
investment company under Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"). As a regulated investment company, the Fund will not be
subject to Federal income taxes on any net investment income and net realized
capital gains that are distributed to its shareholders at least annually. When
you redeem (sell) or exchange shares, you may realize a gain or loss.
On the account application, you must certify that your social security or other
taxpayer identification number is correct and that you are not subject to
back-up Federal tax withholding. If you do not provide this information, or are
otherwise subject to withholding, the Fund may be required to withhold 31% of
your dividends, redemptions and exchanges.
In addition to Federal taxes, you may be subject to state, local or foreign
taxes, depending on your residence. You should consult your tax adviser for
specific advice.
PERFORMANCE
THE FUND MAY ADVERTISE ITS TOTAL RETURN.
The Fund's total return shows the overall dollar or percentage change in value,
assuming the reinvestment of all dividends. Cumulative total return shows the
Fund's performance over a period of time. Average annual total return shows the
cumulative return divided over the number of years included in the period.
Because average annual total return tends to smooth out variations in
performance, you should recognize that it is not the same as actual year-to-year
results.
TOTAL RETURN IS BASED ON THE OVERALL CHANGE IN VALUE OF A HYPOTHETICAL
INVESTMENT IN THE FUND.
Total return calculations for Class A shares generally include the effect of
paying the maximum sales charge (except as shown in "The Fund's Financial
Highlights"). Investments at a lower sales charge would result in higher
performance figures. Total return for the Class B shares reflects the deduction
of the applicable CDSC imposed on a redemption of shares held for the applicable
period. All calculations assume that all dividends are reinvested at net asset
value on the reinvestment dates during the periods. Total return of Class A and
Class B shares will be calculated separately, and, because each class is subject
to different expenses, the total return with respect to that class for the same
period may differ. The relative performance of the Class A and Class B shares
will be affected by a variety of factors, including the higher operating
expenses attributable to the Class B shares, whether the Fund's investment
performance is better in the earlier or later portions of the period measured
and the level of net assets of the Classes during the period. The Fund will
include the total return of Class A, Class B and Class C in any advertisement or
promotional materials including Fund performance data. The value of Fund shares,
when redeemed, may be more or less than their original cost. Total return is a
historical calculation and is not an indication of future performance. See
"Factors to Consider in Choosing an Alternative." Further information about the
performance of the Fund is contained in the Fund's Annual Report to Shareholders
which may be obtained free of charge by writing or telephoning John Hancock Fund
Services, Inc. at the address or telephone number listed on the front page of
this Prospectus.
<PAGE>
HOW TO BUY SHARES
OPENING AN ACCOUNT.
The minimum initial investment in Class A and Class B shares is $1,000 ($250 for
group investments $500 for retirement plans). Complete the Account Application
attached to this Prospectus. Indicate whether you are purchasing Class A or
Class B shares. It you do not specify which class of shares you are purchasing,
Fund Services will assume you are investing in Class A shares.
BY CHECK 1. Make your check payable to John Hancock Fund Services,
Inc. ("Fund Services").
2. Deliver the completed application and check to your
registered representative, or Selling Broker, or mail it
directly to Fund Services.
BY WIRE 1. Obtain an account number by contacting your registered
representative or Selling Broker, or by calling
1-800-225-5291.
2. Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For Credit To: John Hancock Special Equities Fund
(Class A or Class B shares)
Your Account Number
Name(s) under which account is registered
3. Deliver the completed application to your registered
representative or Selling Broker or mail it directly to
Fund Services.
BUYING ADDITIONAL CLASS A AND CLASS B SHARES.
MONTHLY AUTOMATIC 1. Complete the "Automatic lnvesting" and "Bank Information"
ACCUMULATION sections on the Account Privileges Application designating
PROGRAM (MAAP) a bank account from which funds may be drawn.
2. The amount you elect to invest will be automatically
withdrawn from your bank or credit union account.
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 Class A or Class B shares by calling Fund
Services toll-free at 1-800-225-5291.
3. Give the Fund Services representative the name(s) in which
your account is registered, the Fund name, the class of
shares you own, account number, and the amount you wish to
invest.
4. Your investment normally will be credited to your account
the business day following your phone request.
BY CHECK 1. Either complete the detachable stub included on your
account statement or include a note with your investment
listing the name of the Fund, the class, your account
number and the name(s) in which the account is registered.
2. Make your check payable to John Hancock Fund Services.
Inc.
3. Mail the account information and check to:
John Hancock Fund Services, Inc.
P.O. Box 9115
Boston, MA 02205-9115
or deliver it to your registered representative or Selling
Broker.
BY WIRE Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock Special Equities Fund
(Class A or Class B shares)
Your Account Number
Name(s) under which account is registered
<PAGE>
Other Requirements: All purchases must be made in U.S. dollars. Checks written
on foreign banks will delay purchases until U.S. funds are received and a
collection charge may be imposed. Shares of the Fund are priced at the offering
price based on the net asset value computed after Broker Services receives
notification of the dollar equivalent from the Fund's custodian bank. Wire
purchases normally take two or more hours to complete and, to be accepted the
same day, must be received by 4:00 p.m. New York time. Your bank may or may not
charge a fee to wire funds. Telephone transactions are recorded to verify
information. Share certificates are not issued unless a request is made to Fund
Services.
Institutional Investors: Certain institutional investors may purchase Class C
shares of the Fund, which have no sales charge or 12b-1 fee. See "Institutional
Investors" for further information.
YOU WILL RECEIVE STATEMENTS REGARDING YOUR ACCOUNT WHICH YOU SHOULD KEEP TO HELP
WITH YOUR PERSONAL RECORDKEEPING.
You will receive a statement of your account after any transaction that affects
your share balance or registration (statements related to reinvestment of
dividends and automatic investment/withdrawal plans will be sent to you
quarterly). A tax information statement will be mailed to you by January 31 of
each year.
SHARE PRICE
THE OFFERING PRICE OF YOUR SHARES IS THE NET ASSET VALUE PLUS A SALES CHARGE, IF
APPLICABLE, WHICH WILL VARY WITH THE PURCHASE ALTERNATIVE YOU CHOOSE.
The net asset value (the "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 each class. The NAV will be different for each class to the extent
that different amounts of undistributed income are accrued on shares of each
class between dividend declarations. Securities in the Fund's portfolio are
generally valued at their last exchange sales price as provided by a pricing
service which utilizes electronic pricing techniques based on general
institutional trading. If no sale has occurred on the date assets are valued, or
if the security is traded only in the over-the-counter market, it will normally
be valued at its last available bid price. Some securities are valued at fair
value based on procedures approved by the Trustees, and for certain other
securities, the amortized cost method is used if the Trustees determine in good
faith this approximates fair value as described more fully in the Statement of
Additional Information. The NAV is calculated once daily as of the close of
regular trading on the New York Stock Exchange (generally at 4:00 p.m., New York
time) on each day that the Exchange is open.
Shares of the Fund are sold at the offering price based on the NAV computed
after your investment request is received in good order by Broker Services. If
you buy shares of the Fund through a Selling Broker, the Selling Broker must
receive your investment before the close of regular trading on the New York
Stock Exchange and transmit it to Broker Services before its close of business
to receive that day's offering price.
The Fund offers two classes of shares in this Prospectus: Class A shares, which
are subject to an initial sales charge, and Class B shares, which are subject to
a contingent deferred sales charge. If you do not specify a particular class of
shares, it will be assumed that you are purchasing Class A shares and an initial
sales charge will be assessed.
INITIAL SALES CHARGE ALTERNATIVE--CLASS A SHARES. The offering price you pay for
Class A shares of the Fund equals the NAV plus a sales charge as follows:
<TABLE>
<CAPTION>
COMBINED
SALES CHARGE REALLOWANCE REALLOWANCE TO
SALES CHARGE AS A PERCENTAGE AND SERVICE FEE SELLING BROKER AS
AMOUNT INVESTED AS A PERCENTAGE OF THE AS A PERCENTAGE A PERCENTAGE OF
(INCLUDING SALES CHARGE) OF OFFERING PRICE AMOUNT INVESTED OF OFFERING PRICE<F4> OFFERING PRICE<F1>
<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%<F2> 0.00%<F2> <F3> 0.00%<F3>
<FN>
<F1> Upon notice to Selling Brokers with whom it has sales agreements, Broker
Services may reallow an amount up to the full applicable sales charge. In
addition to the reallowance allowed to Selling Brokers, Broker Services
may, from time to time, assist Selling Brokers by among other things,
holding information programs for the benefit of Selling Brokers'
registered representatives. Selling Brokers may limit the participation of
registered representatives in these information programs by means of sales
incentive programs which may require the sale of minimum dollar amounts of
shares of the John Hancock Funds. Broker Services may also provide
additional promotional incentives to Selling Brokers in connection with
sales of shares of the John Hancock Funds. These incentives may include
cash payments in an amount up to 0.10% of average daily net assets of
accounts attributable to certain Selling Brokers, or payment for travel
expenses incurred in connection with trips taken by qualifying registered
representatives and members of their families. Broker Services will pay
these incentive payments out of its own resources. Other than distribution
fees, the Fund does not bear distribution expenses. In some instances,
these incentives may be made available only to certain Selling Brokers
whose representatives have sold or are expected to sell significant
amounts of shares. 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.
<F2> No sales charge is payable at the time of purchase in Class A shares of $1
million or more, but a contingent deferred sales charge may be imposed, in
the event of certain redemption transactions within one year of purchase.
<F3> Broker Services may pay a commission and first year's service fee (as
described in below) to Selling Brokers who initiate and are
responsible for purchases of $1 million or more in aggregate as follows:
1% on sales up to $4,999,999, 0.50% on the next $5 million and 0.25% on
$10 million and over.
<F4> At the time of sale, Broker Services pays to Selling Brokers the first
year's service fee in advance, in an amount equal to 0.25% of the net
assets invested in the Fund. Thereafter, it pays the service fee
periodically in arrears in an amount up to 0.25% of the Fund's average
annual net assets. Selling Brokers receive the fee as compensation for
providing personal and account maintenance services to shareholders.
</TABLE>
Sales charges ARE NOT APPLIED to any dividends which are reinvested in
additional shares of the Fund.
Broker Services will pay certain affiliated Selling Brokers at an annual rate of
up to 0.05% of the daily net assets of the accounts attributable to these
brokers.
Under certain circumstances described below, investors in Class A shares may be
entitled to pay reduced sales charges. See "Qualifying for a Reduced Sales
Charge" below.
CONTINGENT DEFERRED SALES CHARGE--INVESTMENTS OF $1 MILLION OR MORE IN CLASS A
SHARES. Purchases of $1 million or more 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 contingent deferred sales
charge ("CDSC") will be imposed. The rate of the CDSC will depend on the amount
invested as follows
AMOUNT INVESTED CDSC RATE
$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%
The 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 Class A shares.
In determining whether a CDSC applies to a redemption, the calculation will be
determined in a manner that results in the lowest possible rate being charged.
Therefore, it will be assumed that 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 the discussion below under the caption
"Waiver of Contingent Deferred Sales Charge".
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE ON YOUR INVESTMENTS IN CLASS A
SHARES.
QUALIFYING FOR A REDUCED SALES CHARGE. If you invest more than $50,000 in Class
A shares of the Fund or a combination of funds in the John Hancock family of
funds, (except money market funds) you may qualify for a reduced sales charge on
your investments through a LETTER OF INTENTION or through the COMBINATION
PRIVILEGE. You may also be able to use the ACCUMULATION PRIVILEGE to take
advantage of the value of your previous investments in Class A shares of the
John Hancock funds when meeting the breakpoints for a reduced sales charge.
FUND EMPLOYEES AND AFFILIATES
Class A shares of the Fund may be purchased without a sales charge by the
following persons and their immediate families: Trustees or officers of the
Fund; directors or officers of the Adviser and its affiliates, or Selling
Brokers; employees or sales representatives of any of the foregoing; retired
officers, employees or Trustees of any of the foregoing, or any fund, pension,
profit sharing or other benefit plan for persons described above.
Class A shares of the Fund may be purchased without a sales charge by dealers,
brokers or registered investment advisers that have entered into an agreement
with Broker Services providing specifically for the use of Fund shares in
fee-based investment products made available to the clients of the dealer,
broker or registered investment adviser.
SPECIAL TRANSACTIONS
Class A shares can also be purchased without a sales charge by 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 purchasing shares of any registered investment
management company (an "eligible governmental authority"). Class A shares can
also be purchased without a sales charge by banks, trust companies, credit
unions, savings institutions and other types of depository institutions, their
trust departments and their common trust funds {an "eligible depository
institution") if they are purchasing $1 million or more for non-discretionary
customers or accounts. If an investment by an eligible governmental authority or
an eligible depository institution is made without a sales charge Broker
Services 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 may be purchased without a sales charge by former participants in
an employee benefit plan with John Hancock mutual funds if they withdraw from
their respective plans and transfer any or all of their plan distributions
directly to the Fund.
Class A shares of the Fund may also be purchased without a sales charge in
connection with certain liquidation, merger or acquisition transactions
involving other investment companies or personal holding companies.
CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE--CLASS B SHARES. Class B shares are
offered at net asset value per share without a sales charge so that your entire
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 reinvestment of dividends or distributions, and next from
the shares you have held the longest during the six year period.
EXAMPLE:
You have purchased 100 shares at $10 per share. The second year after your
purchase, your investment's net asset value per share has increased by $2 to
$12, and you have gained 10 additional shares through dividend reinvestment. If
you redeem 50 shares at this time, your CDSC will be calculated as follows:
o Proceeds of 50 shares redeemed at $12 per share $600
o Minus proceeds of 10 shares not subject to CDSC because they were
acquired through dividend reinvestment (10 x $12) -120
o Minus appreciation on remaining shares, also not subject to
CDSC (40 x $2) - 80
o Amount subject to CDSC $400
Proceeds from the CDSC are paid to Broker Services. Broker Services uses them in
whole or in part to defray its expenses related to providing the Fund with
distribution services in connection with the sale of the Class B shares, such as
compensating Selling Brokers for selling these shares. The combination of the
CDSC and the distribution and service fees makes it possible for the Fund to
sell Class B shares without a sales charge being deducted at the time of the
purchase.
The amount of the CDSC, if any, will vary depending on the number of years from
the time you purchase your Class B shares until the time you redeem them. Solely
for purposes of determining the holding period, any payments you make during the
month will be aggregated and deemed to have been made on the last day of the
month.
CONTINGENT DEFERRED SALES
YEAR IN WHICH CLASS B SHARES CHARGE AS A PERCENTAGE OF
REDEEMED FOLLOWING PURCHASE DOLLAR AMOUNT SUBJECT TO CDSC
First 5.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter None
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.
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 shares into the Fund from another John Hancock fund, the calculation
will be based on the time the shares in the original fund were purchased.
WAIVER OF CONTINGENT DEFERRED SALES CHARGE. The CDSC is waived on redemptions of
Class B shares (and Class A shares subject to the CDSC) in the following
circumstances: (1) redemptions in connection with a tax-exempt retirement plan
distribution which are mandatory under the Code (i.e. after age 70 1/2); (2)
redemptions involving certain liquidation, merger or acquisition transactions
involving other investment companies or personal holding companies; (3)
redemptions due to death or disability; or (4) redemptions made pursuant to the
Reinvestment Privilege, as described below.
The CDSC is waived on redemptions of shares following distributions to
participants or beneficiaries of plans qualified under Section 401(a) of the
Code or from custodial accounts under Code Section 403(b)(7), deferred
compensation plans under Code Section 457 and other employee benefit plans, and
certain returns of excess contributions made to these plans; all of which
distributions must be permitted to be made without penalty under the Code. In
addition, certain IRA and retirement plans purchasing shares before October 1,
1992 will not be subject to a CDSC. You must notify Fund Services either
directly or through your Selling Broker at the time of redemption if you are
entitled to waiver of the CDSC. The waiver will be granted subject to
confirmation of your entitlement to the waiver.
HOW TO REDEEM SHARES
You may redeem all or a portion of your shares on any business day. Your shares
will be redeemed at the next NAV calculated after your redemption request is
received in good order by Fund Services less any applicable CDSC. The Fund may
hold payment until reasonably satisfied that investments which were recently
made by check or Invest-by-Phone have been collected (which may take up to 10
calendar days).
Once your shares are redeemed, the Fund generally sends you payment on the next
business day. When you redeem your shares, you will generally realize a gain or
loss depending on the difference between what you paid for them and what you
receive for them, subject to certain tax rules. Under unusual circumstances, the
Fund may suspend redemptions or postpone payment for up to seven days or longer,
as permitted by Federal securities laws.
TO ASSURE ACCEPTANCE OF YOUR REDEMPTION REQUEST, PLEASE FOLLOW THESE PROCEDURES.
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. Fund Services employs the following procedures to
confirm that instructions received by telephone are genuine.
Your name, the account number, taxpayer identification number
applicable to the account and other relevant information may
be requested. In addition, telephone instructions are
recorded.
You may redeem up to $100,000 by telephone, but the address
on the account must not have changed for the last 30 days. A
check will be mailed to the exact name(s) and address shown
on the account.
If reasonable procedures, such as those described above, are
not followed, the Fund may be liable for any loss due to
unauthorized or fraudulent telephone instructions. In all
other cases, neither the Fund nor Fund Services will be
liable for any loss or expense for acting upon telephone
instructions made in accordance with the telephone
transaction procedures mentioned above.
Telephone redemption is not available for IRAs or other
tax-qualified retirement plans or shares of the Fund that are
in certificate form.
During periods of extreme economic conditions or market
changes, telephone requests may be difficult to implement due
to a large volume of calls. During these times you should
consider placing redemption requests in writing or using
EASI-Line. EASI-Line is a telephone number which is listed on
account statements.
BY WIRE If you have a telephone redemption form on file with the
Fund, redemption proceeds of $1,000 or more can be wired on
the next business day to your designated bank account, and a
fee (currently $4.00) will be deducted. You may also use
electronic funds transfer to your assigned bank account, and
the funds are usually collectable after two business days.
Your bank may or may not charge for this service. Redemptions
of less than $1,000 will be sent by check or electronic funds
transfer.
This feature may be elected by completing the Telephone
Redemption section on the Account Privileges Application
attached to this Prospectus.
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
Proprietorship, Custodial titles, where applicable) by all persons
(Uniform Gifts or Transfer to authorized to sign for the account,
Minors Act), General Partners. exactly as it is registered, with the
signature(s) guaranteed.
Corporation, Association A letter of instruction and a corporate
resolution, signed by person(s)
authorized to act on the account, with
the signature(s) guaranteed.
Trusts A letter of instruction signed by the
Trustee(s) with the signature(s)
guaranteed. (If the Trustee's name is
not registered on your account, also
provide a copy of the trust document,
certified within the last 60 days.)
If you do not fall into any of these registration categories please call
1-800-225-5291 for further instructions.
WHO MAY GUARANTEE YOUR SIGNATURE.
A signature guarantee is a widely accepted way to protect you and the Fund by
verifying the signature on your request. It may not be provided by a notary
public. If the net asset value of the shares redeemed is $100,000 or less,
Broker Services may guarantee the signature. The following institutions may
provide you with a signature guarantee, provided that the institution meets
credit standards established by Fund Services: (i) a bank; (ii) a securities
broker or dealer, including a government or municipal securities broker or
dealer, that is a member of a clearing corporation or meets certain net capital
requirements; (iii) a credit union having authority to issue signature
guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, a federal savings bank or association; or (v) a
national securities exchange, a registered securities exchange or a clearing
agency.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS.
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 certified shares by telephone.
Due to the proportionately high cost of maintaining smaller accounts, the Fund
reserves the right to redeem at net asset value all shares in an account which
holds fewer than 50 shares (except accounts under retirement plans) and to mail
the proceeds to the shareholder or the transfer agent may impose an annual fee
of $10.00. No account will be involuntarily redeemed or additional fee imposed,
if the value of the account is in excess of the Fund's minimum initial
investment. No CDSC will be imposed on involuntary redemptions of shares.
Shareholders will be notified before these redemptions are to be made or this
fee is imposed and will have 30 days to purchase additional shares to bring
their account up to the required minimum. Unless the number of shares acquired
by further purchases and dividend reinvestments, if any, exceeds the number of
shares redeemed, repeated redemptions from a smaller account may eventually
trigger this policy.
ADDITIONAL SERVICES AND PROGRAMS
EXCHANGE PRIVILEGE
YOU MAY EXCHANGE SHARES OF THE FUND ONLY FOR SHARES OF THE SAME CLASS IN ANOTHER
JOHN HANCOCK FUND.
If your investment objective changes, or if you wish to achieve further
diversification, John Hancock offers other funds with a wide range of investment
goals. Contact your registered representative or Selling Broker and request a
prospectus for the John Hancock funds that interest you. Read the prospectus
carefully before exchanging your shares. You can exchange shares of each class
of the Fund only for shares of the same class of another John Hancock 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.
Exchanges between funds which are not subject to a CDSC are based on their
respective net asset values. No sales charge or transaction charge is imposed.
Class B shares of the Fund which are subject to a CDSC may be exchanged into
Class B shares of another John Hancock mutual fund without incurring the CDSC;
however, these shares will be subject to the CDSC schedule of the shares
acquired (except that exchanges into John Hancock Short-Term Strategic Income
Fund and John Hancock Limited Term Government Fund will be subject to the
initial fund's CDSC). For purposes of computing the CDSC payable upon redemption
of shares acquired in an exchange, the holding period of the original shares is
added to the holding period of the shares acquired in an exchange.
You may exchange Class B shares of the Fund into shares of John Hancock Cash
Management Fund at net asset value. Shares so acquired will continue to be
subject to a CDSC upon redemption. The rate of the CDSC will be the rate in
effect for the original fund at the time of the exchange.
If you exchange Class B shares purchased prior to January 1, 1994 (except John
Hancock Short-Term Strategic Income Fund) for Class B shares of any other John
Hancock fund, you will continue to be subject to the CDSC schedule that was in
effect when they were purchased. See "Contingent Deferred Sales Charge
Alternative --Class B shares."
The Fund reserves the right to require you to keep previously exchanged shares
(and reinvested dividends) in the Fund for 90 days before you are permitted a
new exchange. The Fund may also terminate or alter the terms of the exchange
privilege upon 60 days' notice to shareholders.
An exchange of shares is treated as a redemption of shares of one fund and the
purchase of shares in another for Federal income tax purposes. An exchange may
result in a gain or loss.
When you make an exchange, your account registration must be identical in both
the existing and new account. The exchange privilege is available only in states
where the exchange can be made legally.
BY TELEPHONE
1. When you fill out the application for your purchase of Fund shares, you
automatically authorize exchanges by telephone unless you check the box
indicating that you do not wish to have the telephone exchange privilege.
2. Call 1-800-225-5291. Have the account number of your current fund and the
exact name in which it is registered available to give to the telephone
representative.
IN WRITING
1. In a letter request an exchange and list the following:
--the name and class of the fund whose shares you currently own
--your account number
--the name(s) in which the account is registered
--the name of the fund in which you wish your exchange to be invested
--the number of shares, all shares or the dollar amount you wish to exchange
Sign your request exactly as the account is registered.
2. Mail the request and information to:
John Hancock Fund Services, Inc.
P.0. Box 9116
Boston, Massachusetts 02205-9116
REINVESTMENT PRIVILEGE
IF YOU REDEEM SHARES OF THE FUND, YOU MAY BE ABLE TO REINVEST THE PROCEEDS IN
THIS FUND OR ANOTHER JOHN HANCOCK FUND WITHOUT PAYING AN ADDITIONAL SALES
CHARGE.
1. No sales charge will apply to Class A shares that are reinvested in any of
the other John Hancock funds which are otherwise subject to a sales charge
as long as you reinvest within 120 days of the redemption date. If you paid
a CDSC upon a redemption, you may reinvest at net asset value in the same
class of shares from which you redeemed within 120 days. Your account will
be credited with the amount of the CDSC previously charged, and the
reinvested shares will continue to be subject to a CDSC. The holding period
of the shares acquired through reinvestment, for purposes of computing the
CDSC payable upon a subsequent redemption, will include the holding period
of the redeemed shares.
2. Any portion of your redemption may be reinvested in Fund shares or in shares
of any of the other John Hancock funds, subject to the minimum investment
limit of that fund.
3. To reinvest, you must notify Fund Services in writing. Include the Fund
name, account number and class from which your shares were originally
redeemed.
SYSTEMATIC WITHDRAWAL PLAN
YOU CAN PAY ROUTINE BILLS FROM YOUR ACCOUNT OR MAKE PERIODIC DISBURSEMENTS FROM
YOUR RETIREMENT ACCOUNT TO COMPLY WITH IRS REGULATIONS.
1. You may elect the Systematic Withdrawal Plan at any time by completing the
Account Privilege Application which is attached to this Prospectus. You can
also obtain this 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
annually or on a selected monthly basis, to yourself or any other designated
payee.
4. There is no limit on the number of payees you may authorize, but all
payments must be made at the same time or intervals.
5. It is not advantageous to maintain a Systematic Withdrawal Plan concurrently
with purchases of additional Class A or Class B shares because you may be
subject to an initial sales charge on your purchases of Class A shares or a
CDSC on your redemptions of Class B shares. In addition, your redemptions
are taxable events.
6. If the U.S. Postal Service cannot deliver your checks, or if deposits to a
bank account are returned for any reason, your redemptions will be
discontinued.
MONTHLY AUTOMATIC ACCUMULATION PROGRAM (MAAP)
YOU CAN MAKE AUTOMATIC INVESTMENTS AND SIMPLIFY YOUR INVESTING.
1. You may authorize an investment to be 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.
2. You may also authorize automatic investing through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.
3. You may terminate your Monthly Automatic Accumulation Program at any time.
4. There is no charge to you for this program, and there is no cost to the
Fund.
5. If you have payments being withdrawn from a bank account and we are notified
that the account has been closed, your withdrawals will be discontinued.
GROUP INVESTMENT PROGRAM
ORGANIZED GROUPS OF AT LEAST FOUR PERSONS MAY ESTABLISH ACCOUNTS.
1. An individual account will be established for each participant, but the
initial sales charge for Class A shares will be based on the aggregate
dollar amount of all participants' investments. To determine how to qualify
for this program, contact your registered representative or call
1-800-225-5291.
2. The initial aggregate investment of all participants in the group must be at
least $250.
3. No additional charge is made in connection with this program. There is no
obligation to make investments beyond the minimum, and you may terminate the
program at any time.
RETIREMENT PLANS
1. You may use the Fund as a funding medium for various types of qualified
retirement plans, including Individual Retirement Accounts, Keogh Plans
(H.R. 10), Pension and Profit Sharing Plans (including 401(k) Plans),
Tax-Sheltered Annuity Retirement Plans (403(b) or TSA Plans), and 457 Plans.
2. The initial investment minimum or aggregate minimum for any of the above
plans is $500. However, accounts being established as group IRA, SEP,
SARSEP, TSA, 401(k) and 457 Plans will be accepted without an initial
minimum investment.
INSTITUTIONAL INVESTORS
Class C shares of the Fund are available only to the following types of
institutional investors: (i) Benefits plans not affiliated with the Adviser
which have at least $25,000,000 in plan assets, and either have a separate
trustee vested with investment discretion and certain limitations on the ability
of the plan beneficiaries to access their plan investments without incurring
adverse tax consequences or allow their participants to select among one or more
investment options, including the Fund ("participant-directed plans"); (ii)
Banks and insurance companies which are not affiliated with the Adviser
purchasing shares for their own account; (iii) Investment companies not
affiliated with the Adviser; (iv) Tax-exempt retirement plans of the Adviser and
its affiliates, including affiliated brokers; and (v) Unit investment trusts
sponsored by Broker Services and certain other sponsors. Participant-directed
plans include, but are not limited to, 401(k), TSA and 457 plans.
Class C shares are available to eligible institutional investors at net asset
value without the imposition of a sales charge and are not subject to ongoing
distribution fees imposed under a plan adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940. The minimum initial investment in Class C shares
is $1,000,000, but this requirement may be waived at the discretion of the
Fund's officers. Some individuals who are currently eligible to purchase Class A
or Class B shares may also be participants in plans that are eligible to
purchase Class C shares of the Fund. Plans that qualify to purchase Class C
shares will not be permitted to purchase shares of any other class of the Fund.
Broker Services may pay a one-time payment of up to 0.15% of the amount invested
in Class C shares to a selling broker for its sales of Class C shares. A person
entitled to receive compensation for selling shares of the Fund may receive
different compensation with respect to sales of Class A, Class B or Class C
shares or any additional future class of shares.
The Reinvestment Privilege, Systematic Withdrawal Plan, Monthly Automatic
Accumulation Program, Group Investment Program and Retirement Plans are not
available for Class C shares.
If you are considering a purchase of Class C shares of the Fund, please call
John Hancock Fund Services, Inc. at 1-800-437-9312 to obtain information about
eligibility, instructions for purchase by check or wire and an Institutional
Account Application.
<PAGE>
JOHN HANCOCK SPECIAL EQUITIES FUND
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Broker Distribution Services, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
CUSTODIAN
Investors Bank & Trust Company
24 Federal Street
Boston, Massachusetts 02110
TRANSFER AGENT
John Hancock Fund Services, Inc.
P.O. Box 9116
Boston, Massachusetts 02205-9116
INDEPENDENT AUDITORS
Ernst & Young
200 Clarendon Street
Boston, Massachusetts 02116
HOW TO OBTAIN INFORMATION ABOUT THE FUND
For: Service Information
Telephone Exchange call 1-800-225-5291
Telephone Redemption
Investment-by-Phone
For: TDD call 1-800-554-6713
JHD-1800P 3-94
JOHN HANCOCK
SPECIAL
EQUITIES
FUND
CLASS A AND B SHARES
PROSPECTUS
MARCH 1, 1994
A MUTUAL FUND SEEKING TO ACHIEVE GROWTH OF CAPITAL BY INVESTING IN A DIVERSIFIED
PORTFOLIO OF EQUITY SECURITIES PRIMARILY OF EMERGING GROWTH COMPANIES AND OF
COMPANIES IN SPECIAL SITUATIONS.
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
TELEPHONE 1-800-225-5291
Printed on Recycled Paper
