JOHN HANCOCK
SPECIAL
EQUITIES
FUND
CLASS C SHARES
PROSPECTUS
MARCH 1, 1996 AS REVISED SEPTEMBER 16, 1996
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TABLE OF CONTENTS
Page
----
Expense Information .................................................... 2
The Fund's Financial Highlights ........................................ 3
Investment Objective and Policies ...................................... 5
Organization and Management of the Fund ................................ 8
The Fund's Expenses .................................................... 8
Dividends and Taxes .................................................... 9
Performance ............................................................ 10
Who Can Buy Class C Shares ............................................. 10
How to Buy Class C Shares .............................................. 11
Class C Share Price .................................................... 12
How to Redeem Class C Shares ........................................... 13
Additional Services and Programs ....................................... 15
This Prospectus sets forth the information about John Hancock Special
Equities Fund (the "Fund") a diversified 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 July 1, 1996 and incorporated by
reference into this Prospectus, free of charge by writing or telephoning: John
Hancock Investor Services Corporation, P.O. Box 9296, Boston, Massachusetts
02205-9296, 1-800-755-4371.
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 to understand the
various fees and expenses you will bear, directly or indirectly, when you
purchase Class C Fund shares. The operating expenses included in the table and
hypothetical example below are based on actual fees and expenses for the Class
C shares of the Fund for the fiscal year ended October 31, 1995, adjusted to
reflect current fees and expenses. Actual fees and expenses of Class C shares
may be greater or less than those indicated.
<TABLE>
<CAPTION>
CLASS C
SHARES*
-------
SHAREHOLDER TRANSACTION EXPENSES
<S> <C>
Maximum sales charge imposed on purchases (as a percentage of offering price) ....... None
Maximum sales charge imposed on reinvested dividends ................................ None
Maximum deferred sales charge ....................................................... None
Redemption fee+ .................................................................... None
Exchange fee ........................................................................ None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management fee** .................................................................... 0.82%
Other expenses ...................................................................... 0.21%
-----
Total Fund operating expenses ....................................................... 1.03%
=====
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</TABLE>
*The information set forth in the foregoing table relates only to Class C
shares. Class C shares commenced operations on September 1, 1993.
+Redemption by wire fee (currently $4.00) not included.
**The calculation of the management fee is based on average net assets for the
fiscal year ended October 31, 1995. See "The Fund's Expenses."
<TABLE>
<CAPTION>
EXAMPLE: CLASS C SHARES 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ----------------------- ------ ------- ------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses for the indicated period of years on a
hypothetical $1,000 investment, assuming a 5% annual return: ................. $11 $33 $57 $126
</TABLE>
(This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown.)
The management fee referred to above is more fully explained in this
Prospectus under the caption "The Fund's Expenses" and in the Statement of
Additional Information under the caption "Investment Advisory and Other
Services."
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS
The following table of Financial Highlights has been audited by Ernst &
Young LLP, the Fund's independent accountants whose unqualified report is
included in the Fund's 1995 Annual Report and is included in the Statement of
Additional Information. 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 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 are as follows:
<TABLE>
<CAPTION>
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------------------------------------
1995 1994 1993 1992 1991 1990 1989 1988 1987 1986
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
CLASS A
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period ..................... $ 16.11 $ 16.13 $ 10.99 $ 9.71 $ 4.97 $ 6.38 $ 4.89 $ 4.30 $ 6.08 $ 5.21
Net Investment Loss (a) ......... (0.18)(b) (0.21)(b) (0.20)(b) (0.19)(b) (0.10) (0.12) 0.01 0.04 (0.03) (0.03)
Net Realized and Unrealized Gain
(Loss) on Investments ......... 6.22 0.19 5.43 2.14 4.84 (1.27) 1.53 0.55 (1.26) 0.93
Total from Investment
Operations .................. (6.04) (0.02) 5.23 1.95 4.74 (1.39) 1.54 0.59 (1.29) 0.90
-------- -------- -------- ------- -------- ------ ------- ------- ------- --------
Less Distributions:
Dividends from Net Investment
Income ........................ -- -- -- -- -- (0.02) (0.05) -- -- (0.02)
Distributions from Net Realized
Gain on Investments Sold ...... -- -- (0.09) (0.67) -- -- -- -- (0.45) (0.01)
Distributions from Capital
Paid-In ....................... -- -- -- -- -- -- -- -- (0.04) --
-------- -------- -------- ------- -------- ------ ------- ------- ------- ------
Total Distributions -- -- (0.09) (0.67) -- (0.02) (0.05) -- (0.49) (0.03)
-------- -------- -------- ------- -------- ------ ------- ------- ------- ------
Net Asset Value, End of Period ...$ 22.15 $ 16.11 $ 16.13 $ 10.99 $ 9.71 $ 4.97 $ 6.38 $ 4.89 $ 4.30 $ 6.08
======== ======== ======== ======= ======== ====== ======= ======= ======= ======
Total Investment Return at
Net Asset Value (a) (f) .... 37.49% (0.12%) 47.83% 20.25% 95.37% (21.89%) 31.82% 13.72% (28.68%) 17.38%
-------- -------- -------- ------- -------- ------- ----- ------ ------- ------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period
(000's omitted) .................$555,655 $310,625 $296,793 $44,665 $19,713 $8,166 $12,285 $11,714 $10,637 $13,780
Ratio of Expenses to Average Net
Assets (a) ..................... 1.48% 1.62% 1.84% 2.24% 2.75% 2.63% 1.50% 1.50% 1.50% 1.50%
Ratio of Net Investment
Income (Loss) to Average
Net Assets (a) ................. (0.97%) (1.40%) (1.49%) (1.91%) (2.12%) (1.58%) 0.47% 0.82% (0.57%) (0.57%)
Portfolio Turnover Rate .......... 82% 66% 33% 114% 163% 113% 115% 91% 93% 64%
CLASS B (c)
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of
Period ........................ $ 15.97 $ 16.08 $ 12.30
-------- -------- --------
Net Investment Loss ............. (0.31)(b) (0.30)(b) (0.18)(b)
Net Realized and Unrealized Gain
on Investments ................ 6.15 0.19 3.96
-------- -------- --------
Total from Investment
Operations .................. 5.84 (0.11) 3.78
-------- -------- --------
Net Asset Value, End of Period .. $ 21.81 $ 15.97 $ 16.08
======== ======== ========
Total Investment Return at
Net Asset Value (f) ......... 36.57% (0.68%) 30.73%(d)
-------- -------- --------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's
omitted) ...................... $454,934 $191,979 $158,281
Ratio of Expenses to Average Net
Assets ........................ 2.20% 2.25% 2.34%*
Ratio of Net Investment Loss
to Average Net Assets ......... (1.69%) (2.02%) (2.03%)*
Portfolio Turnover Rate ........ 82% 66% 33%
</TABLE>
(Continued on next page)
<PAGE>
THE FUND'S FINANCIAL HIGHLIGHTS -- CONTINUED
YEAR ENDED OCTOBER 31,
------------------------------
1995 1994 1993
---- ---- ----
CLASS C (e)
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of
Period ........................ $ 16.20 $ 16.14 $ 14.90
-------- -------- --------
Net Investment Loss ............. (0.09)(b) (0.13)(b) (0.03)(b)
Net Realized and Unrealized Gain
on Investments ................ 6.29 0.19 1.27
-------- -------- --------
Total from Investment
Operations .................. 6.20 0.06 1.24
-------- -------- --------
Net Asset Value, End of Period .. $ 22.40 $ 16.20 $ 16.14
======== ======== ========
Total Investment Return at
Net Asset Value (f) ......... 38.27% 0.37 8.23%(d)
--------- -------- --------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's
omitted) ...................... $ 13,701 $ 7,123 $ 2,838
Ratio of Expenses to Average Net
Assets ........................ 1.01% 1.11% 1.45%*
Ratio of Net Investment Loss
to Average Net Assets ......... (0.50%) (0.89%) (1.35%)*
Portfolio Turnover Rate ........ 82% 66% 33%
* On an annualized basis.
(a) Reflects expense limitation in effect during the years ended October 31,
1986 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, 1988, 1987 and 1986
reflect reductions of $.002, $.02, $.03, $.07, $.04 and $.09, respectively.
Absent of such limitation, for the years ended October 31, 1991, 1990, 1989,
1988, 1987 and 1986, the ratio of net expenses would have been 2.79%, 2.95%,
2.57%, 2.94%, 2.23% and 3.47%, respectively, and the ratio of net investment
income (loss) to average net assets would have been (2.16%), (1.90%),
(0.60%), (0.62%), (1.30%) and (2.55%), respectively. Without the limitation,
total investment return would be lower.
(b) On average month end shares outstanding.
(c) Class B shares commenced operations on March 1, 1993.
(d) Not annualized.
(e) Class C shares commenced operations on September 1, 1993.
(f) Total investment return assumes dividend reinvestment and does not reflect
the effect of sales charges.
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
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 this
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 SEEKS GROWTH OF CAPITAL BY INVESTING PRIMARILY IN THE EQUITY
SECURITIES OF EMERGING GROWTH AND SPECIAL SITUATION COMPANIES.
The Fund may also invest in:
-- equity securities of established companies that by John Hancock
Advisers, Inc. (the "Adviser") believes 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 Rating Group -- 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'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 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 TO IDENTIFY EMERGING GROWTH COMPANIES WHICH CAN SHOW
SUSTAINED INCREASES IN EARNINGS.
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.
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 the Adviser judges these transactions to be 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 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.
THE FUND IS DESIGNED FOR INVESTORS WHO ARE WILLING TO ASSUME GREATER THAN
USUAL RISKS IN THE HOPE OF REALIZING GREATER THAN USUAL RETURNS.
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 that
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 a long-term
investment and not a vehicle for seeking short-term profits and income.
The securities in which the Fund invests will often be traded only 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 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.
FOREIGN SECURITIES. The Fund may invest in securities of foreign issuers,
including securities in the form of American Depository Receipts (ADRs) and
European Depository Receipts (EDRs). ADRs and EDRs (sponsored and unsponsored)
are receipts typically issued by American or European bank or trust companies
which evidence ownership of underlying securities issued by a foreign
corporation, and are designed for trading in United States or European
securities markets. Issuers of unsponsored ADRs and EDRs 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 and EDR. 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 MAY EMPLOY CERTAIN INVESTMENT STRATEGIES TO HELP ACHIEVE ITS
INVESTMENT OBJECTIVES.
RESTRICTED SECURITIES. The Fund may purchase restricted securities including
those eligible for resale. The registration of these securities under the
Securities Act of 1933, as amended (the "Securities Act"). The Fund's investment
restricted securities, may include those eligible for resale to "qualified
institutional buyers" pursuant to Rule 144A under the Securities Act of 1933
(the "Securities Act"). The Trustees will monitor the Fund's investments in
these securities, focusing on certain factors, including valuation, liquidity
and availability of information. Purchases of other restricted securities are
subject to an investment restriction limiting all illiquid securities held by
the Fund to not more than 15% of the Fund's net assets.
LENDING OF SECURITIES. The Fund may lend portfolio securities to brokers,
dealers, and financial institutions if the loan is collateralized by cash or
U.S. Government securities according to applicable regulatory requirements.
The Fund may reinvest any cash collateral in short-term securities. When the
Fund lends portfolio securities, there is a risk that the borrower may fail to
return the loaned securities. As a result, the Fund may incur a loss or in the
event of the borrower's bankruptcy may be delayed in or prevented from
liquidating the collateral. It is a fundamental policy of the Fund not to lend
portfolio securities having a total value in excess of 33 1/3% of its total
assets.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund buys a security
subject to the right and obligation to sell it back to the issuer 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 or prevented from liquidating the
collateral.
INVESTMENT RESTRICTIONS. The Fund has adopted certain investment restrictions
which are detailed in the Statement of Additional Information, where they are
designated as fundamental or non-fundamental. The investment objective and
those fundamental restrictions 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."
When choosing brokerage firms to carry out the Fund's transactions, the
Adviser gives primary consideration to 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 established 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. They are indirectly owned by John Hancock Mutual Life Insurance
Company (the "Life Company"), which in turn indirectly owns the Adviser.
BROKERS ARE CHOSEN BASED ON BEST PRICE AND EXECUTION.
ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is a diversified open-end investment management 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, to create and classify shares of beneficial interest in
separate 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.
THE TRUSTEES ELECT OFFICERS AND RETAIN THE INVESTMENT ADVISER WHO IS
RESPONSIBLE FOR THE DAY-TO-DAY OPERATIONS OF THE FUND, SUBJECT TO THE
TRUSTEES' POLICIES AND SUPERVISION.
Accordingly, the Trustees have authorized the issuance of three classes of the
Fund, designated as Class A, Class B and Class C shares. 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 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
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.
The Adviser was organized in 1968 and is a wholly-owned indirect subsidiary of
the Life 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 Funds,
Inc. ("John Hancock Funds") distributes shares for all of the John Hancock
funds through selected broker-dealers ("Selling Brokers"). Certain Fund
officers are also officers or the Adviser and John Hancock Funds. Pursuant to
an order granted by the Securities and Exchange Commission, the 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 $19 BILLION.
Michael P. DiCarlo is responsible for the fund's day-to-day investment
management. He has served as the fund's portfolio manager since January 1988,
and has been in the investment business since 1984. He is currently one of
three principals in DFS Advisors, LLC, which was founded in 1996 and serves as
subadviser to the fund.
In order to avoid conflicts with portfolio trades for the Fund, the Adviser
and the Fund have adopted extensive restrictions on personal securities
trading by personnel of the Adviser and its affiliates. Some of these
restictions 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.
THE FUND'S EXPENSES
For managing its investment and business affairs, the Fund pays a fee to the
Adviser which for the 1995 fiscal year was 0.82% of the Fund's average daily
net asset value. The investment management fee is higher than the fees paid to
most mutual funds but is believed to be comparable to fees paid by those funds
with investment objectives similar to that of the Fund.
The Fund compensates the Adviser for performing necessary tax and financial
management services. The compensation for 1996 is estimated to be at an annual
rate of 0.01875% of the average net assets of the Fund.
Information on the Fund's total expenses is in the Fund's Financial Highlights
section of this Prospectus.
DIVIDENDS AND TAXES
Dividends from the Fund's net investment income and capital gains are
generally declared at least annually. Dividends are reinvested in additional
Class C shares unless you elect the option to receive 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.
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 received in cash or reinvested in additional
Class C 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 a corporate dividends received deduction
for dividends received by the Fund from U.S. domestic corporations, subject to
certain restrictions in the Internal Revenue Code of 1986, as amended (the
"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 tax on any net investment income and net realized
capital gains that are distributed to its shareholders within the time period
prescribed by the Code. When you redeem (sell) or exchange Class C shares, you
may realize a taxable gain or loss.
The Fund anticipates that it will be subject to foreign withholding taxes or
other foreign taxes on certain foreign investments which will reduce the yield
or return from these investments. However, if more than 50% of the Fund's
total assets at the close of its taxable year consists of stock or 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, the Fund may
be required to withhold 31% of your dividends and the proceeds of redemptions
and exchanges.
In addition to Federal taxes, you may be subject to state, local or foreign
taxes with respect to your investments in and distributions from the Fund. In
many states, a portion of the Fund's dividends that represents interest
received by the Fund on direct U.S. Government Obligations may be exempt from
tax. Non-U.S. shareholders are also subject to a different tax treatment not
described above. Under the Code, a tax-exempt investor in the Fund will not
generally recognize unrelated business taxable income from its investment in
the Fund unless the tax-exempt investor incurred indebtedness to acquire or
continue to hold Fund shares and such indebtedness remains unpaid. You should
consult your tax adviser for specific advice.
PERFORMANCE
Total return shows the overall dollar or percentage change in value of a
hypothetical investment in Class C shares of the Fund, assuming the
reinvestment of all dividends and distributions in Class C shares. Cumulative
total return shows the performance on Class C shares over a period of time.
Average annual total return shows the cumulative return of the Class C shares
divided over the number of years included in the period. Because average
annual total return tends to smooth out variations in the performance, you
should recognize that it is not the same as actual year-to-year results.
THE FUND MAY ADVERTISE ITS TOTAL RETURN ON CLASS C SHARES.
Total return calculations for Class C shares do not reflect the imposition of
a sales charge. The value of Class C shares, when redeemed, may be more or
less than their original cost. Total return is an historical calculation and
is not an indication of future performance.
WHO CAN BUY CLASS C SHARES
In order to qualify to buy Class C shares, you must qualify as one of the
following types of institutional investors: (i) Benefit 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; (v) Unit investment trusts sponsored by John Hancock Funds and
certain other sponsors; and (vi) existing full-service clients of the Life
Company who were 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 .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. Participant-directed plans
include but are not limited to 401(k), TSA and Section 457 Plans.
CLASS C SHARES ARE AVAILABLE TO CERTAIN INSTITUTIONAL INVESTORS.
HOW TO BUY CLASS C SHARES
- --------------------------------------------------------------------------------
The minimum initial investment is $1,000,000, except that discretion of the
Fund's officers. You may qualify for the minimum investment if you invest more
than $1,000,000 in Class C shares in the John Hancock family. This is discussed
in greater detail in the Statement of Additional Information.
Complete the application attached to this Prospectus.
<PAGE>
OPENING AN ACCOUNT.
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BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation.
2. Deliver the completed application and check to your
registered representative or Selling Broker, or mail it
directly to Investor Services.
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BY WIRE 1. Obtain an account number by contacting your registered
representative or Selling Broker or by calling
1-800-755-4371.
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 C 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
Investor Services.
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BY TELEPHONE 1. Complete the "Invest-By- Phone" and "Bank Information"
sections on the Account Privileges Application designating a
bank account from which your 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 C shares by calling Investor
Services toll free at 1-800-755-4371.
3. Give the Investor Services representative the name(s) in
which your account is registered, the Fund name and your
account number, and the amount you wish to invest in Class C
shares.
4. Your investment normally will be credited to your account the
business day following your phone request.
BUYING ADDITIONAL CLASS C SHARES
- --------------------------------------------------------------------------------
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 and class of shares you own, your account
number and the name(s) in which the account is registered.
2. Make your check payable to John Hancock Investor Services
Corporation.
3. Mail the account information and check to:
John Hancock Investor Services Corporation
P.O. Box 9296
Boston, MA 02205-9296
or deliver it to your registered representative or Selling
Broker.
<PAGE>
BUYING ADDITIONAL CLASS C SHARES.
(CONTINUED)
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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 C Shares)
Your Account Number
Name(s) under which account is registered
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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.
Class C share certificates are not issued unless a request is made in writing to
Investor Services.
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You will receive a statement of your account after any transaction that
affects your share balance or registration (statements related to reinvestment
of dividends 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 THAT YOU SHOULD KEEP TO HELP WITH YOUR
PERSONAL RECORDKEEPING.
CLASS C SHARE PRICE
The net asset value per share ("NAV") of a Class C share is the value of one
Class C share. The NAV 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. Securities in the Fund's portfolio are valued on the basis of market
quotations, valuations provided by independent pricing services or, at fair
value as determined in good faith according to procedures approved by the
Trustees. Short-term debt investments maturing within 60 days are valued at
amortized cost which the Board of Trustees have determined to approximate
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 has been materially affected by events
occurring after the closing of a foreign market, assets are valued by a method
that the Trustees believe accurately reflects fair value. The NAV of Class C
shares is calculated once daily as of the close of regular trading on the New
York Stock Exchange (the "Exchange") (generally at 4:00 p.m., New York time)
on each day that the Exchange is open.
THE OFFERING PRICE OF YOUR CLASS C SHARES IS THEIR NET ASSET VALUE.
Class C 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 John
Hancock Funds. 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 John Hancock Funds
prior to its close of business to receive that day's offering price. There is
no sales charge imposed on the purchase of Class C shares.
A one-time payment of up to 0.15% of the amount invested in Class C shares may
be made by John Hancock Funds to a Selling Broker for sales of Class C shares
made by that Selling Broker. A person entitled to receive compensation for
selling shares of the Fund may receive different compensation with respect to
sales of Class A shares, Class B shares and Class C shares of the Fund. 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.
HOW TO REDEEM CLASS C SHARES
You may redeem all or a portion of your Class C shares on any business day.
Your Class C shares will be redeemed at the next NAV for Class C shares
calculated after your redemption request is received in good order by Investor
Services. The 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 Class C shares are redeemed, the Fund generally sends you payment on
the next business day. When you redeem your Class C shares, if you are subject
to tax, 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, the Fund may
suspend redemptions or postpone payment for up to three business days or
longer, as permitted by Federal securities laws.
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BY TELEPHONE All Fund shareholders are eligible automatically for the
telephone privilege. Call 1-800-755-4371, 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 and redemption
proceeds may be sent by wire or by check. Checks will be
mailed to the exact name(s) and address on the account.
You may redeem between $100,000 and $5 million by telephone
but only if the redemption proceeds will be wired to your
designated corporate bank 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 Investor Services will be
liable for any loss or expense for acting upon telephone
instructions made according to the telephone transaction
procedures mentioned above.
Telephone redemption is not available for tax-qualified
retirement plans or Class C shares of the 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 such times you should
consider placing redemption requests in writing.
This feature may be elected by completing the "Telephone
Redemption" section on the Account Privileges Application
included with this Prospectus.
TO ASSURE ACCEPTANCE OF YOUR REDEMPTION REQUEST, PLEASE FOLLOW THESE
PROCEDURES.
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IN WRITING Send a stock power or letter of instruction specifying the
name of the Fund, the dollar amount or the number of Class C
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
- -------------------- ------------
Corporation, Association A letter of instruction and a
corporate resolution signed by
person(s) authorized to act on the
account. The signature(s) must be
guaranteed if redemption proceeds
will be sent by check and exceed
$100,000.
Retirement Plan or A letter of instruction signed by
Pension Trusts the Trustee(s). The signature(s)
must be guaranteed if redemption
proceeds will be sent by check and
exceed $100,000. (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.)
Redemptions of $5 million or more must always be made in writing.
If you do not fall into any of these registration categories please call
1-800-755-4371 for further instructions.
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A signature guarantee is a widely accepted way to protect on your request. It
may not be provided by a notary public. 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.
WHO MAY GUARANTEE YOUR SIGNATURE.
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THROUGH YOUR BROKER Your broker may be able to initiate the
redemption. Contact instructions. If you have
certificates for your shares, you must submit
them with your stock power or a letter of
instruction. You may not redeem certificated
shares by telephone.
ADDITIONAL INFORMATION ABOUT REDEMPTIONS
DUE TO THE PROPORTIONATELY HIGH COST OF MAINTAINING SMALLER ACCOUNTS, THE FUND
RESERVES THE RIGHT TO REDEEM AT NET ASSET VALUE ALL CLASS C 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. SHAREHOLDERS WILL BE NOTIFIED BEFORE THESE REDEMPTIONS ARE TO BE
MADE OR THIS CHARGE IS IMPOSED AND WILL HAVE 30 DAYS TO PURCHASE ADDITIONAL
CLASS C SHARES TO BRING THEIR ACCOUNT UP TO THE REQUIRED MINIMUM. UNLESS THE
NUMBER OF CLASS C SHARES ACQUIRED BY ADDITIONAL PURCHASES AND ANY DIVIDEND
REINVESTMENTS EXCEEDS THE NUMBER OF CLASS C SHARES REDEEMED, REPEATED
REDEMPTIONS FROM A SMALLER ACCOUNT MAY EVENTUALLY TRIGGER THIS POLICY.
- --------------------------------------------------------------------------------
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. Not all John Hancock funds offer Class C shares. 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 Class C shares. Exchanges may be made only into Class C shares
of other John Hancock funds.
YOU MAY EXCHANGE CLASS C SHARES OF THE FUND ONLY FOR CLASS C SHARES OF
ANOTHER JOHN HANCOCK FUND.
Exchanges between funds are based on their respective net asset values. No
sales charge or transaction charge is imposed.
The Fund reserves the right to require you to keep previously exchanged Class
C 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 of 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 old 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 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 prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time.
BY TELEPHONE
1. When you complete the application for your initial purchase of Class C
shares you automatically authorize exchanges by telephone unless you check
the box indicating that you do not wish to have the authorized telephone
exchange privilege.
2. Call 1-800-755-4371. 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. 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.
IN WRITING
1. In a letter request an exchange and list the following:
-- the name of the Fund whose Class C 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 Class C shares, all Class C 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 Investor Services Corporation
Attn: Institutional Services
P.O. Box 9296
Boston, Massachusetts 02205-9296
<PAGE>
JOHN HANCOCK SPECIAL EQUITIES FUND
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
CUSTODIAN
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
TRANSFER AGENT
John Hancock Investor Services
Corporation
P.O. Box 9296
Boston, Massachusetts 02205-9296
INDEPENDENT AUDITORS
ERNST & YOUNG LLP
200 Clarendon Street
Boston, Massachusetts 02116
HOW TO OBTAIN INFORMATION
ABOUT THE FUND
For: Service Information
Telephone Exchange
call 1-800-755-4371
Telephone Redemption
Investment-by-Phone
180PC 9/96
JOHN HANCOCK
SPECIAL
EQUITIES
FUND
CLASS C SHARES
PROSPECTUS
MARCH 1, 1996
AS REVISED SEPTEMBER 16, 1996
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.
This fund will be closed to new investors at the end of the day its
total assets reach $2.5 billion. Further investments will be limited
to existing accounts.
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
TELEPHONE 1-800-755-4371
[RECYCLE SYMBOL] Printed on recycled paper using soybean ink
