<PAGE> 1
John Hancock Funds
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
INVESTORS
TRUST
THIRD QUARTER REPORT
September 30, 1995
<PAGE> 2
TRUSTEES
Edward J. Boudreau, Jr.
Chairman
Dennis S. Aronowitz*
Richard P. Chapman, Jr.*
William J. Cosgrove*
Gail D. Fosler*
Bayard Henry*
Richard S. Scipione
Edward J. Spellman*
*Members of the Audit Committee
OFFICERS
Edward J. Boudreau, Jr.
Chairman and Chief Executive Officer
Robert G. Freedman
Vice Chairman and
Chief Investment Officer
Andrew St. Pierre
President
Thomas H. Drohan
Senior Vice President and Secretary
James B. Little
Senior Vice President and
Chief Financial Officer
Susan S. Newton
Vice President, Assistant Secretary and
Compliance Officer
James J. Stokowski
Vice President and Treasurer
CUSTODIAN
Investors Bank & Trust Company
89 South Street
Boston, Massachusetts 02111
TRANSFER AGENT AND REGISTRAR
State Street Bank and Trust Company
225 Franklin Street
Boston, Massachusetts 02110
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
LEGAL COUNSEL
Hale and Dorr
60 State Street
Boston, Massachusetts 02109
CHAIRMAN'S MESSAGE
DEAR FELLOW SHAREHOLDERS:
A 1 1/4" x 1" photo of Edward J. Boudreau, Jr., Chairman and Chief Executive
Officer, flush right, next to second paragraph.
Investors around the world have been watching Wall Street in awe for the better
part of 1995. Through September, the Dow Jones Industrial Average had reached
record highs and had grown, along with the Standard & Poor's 500-Stock Index, by
more than 20%. Investors who stayed in the market after a disappointing 1994
have been rewarded.
On another street, Pennsylvania Avenue, one of the hot topics many
people are watching is Medicare reform. While the Congressional rhetoric is just
beginning to heat up, today's Medicare debate should serve as another wake-up
call to all Americans about the need to have a financial plan and to save for
retirement. Whether or not the government changes the way health-care benefits
are allotted to senior citizens, the message is clear: your future security and
well-being lies in your own hands -- not Uncle Sam's.
We know you've heard it a hundred times. Pick up almost any financial
periodical today, and you'll see cover stories on retirement. Many of them will
perhaps scare you or make you think that the task of saving for retirement is
just too daunting. But take heart. We don't believe that and neither do many
financial experts.
Yet retirement planning is not to be taken lightly. To live the way you
want to -- the way you deserve to after all those years of hard work -- you need
to plan and save now, on a regular basis, no matter what your other costs, no
matter how small the amount, no matter what your current age. It may be easier
if you start earlier, but it's never too late.
Building a secure nest egg is indeed doable. Talk to your financial
adviser about establishing your retirement planning roadmap, if you haven't
already. And educate yourself by reading some of the many articles about how
to save for retirement. Take control of your future by saving today. That way,
when it comes time for retirement, you shouldn't have to think about any
street but Easy Street.
Sincerely,
/s/ Edward J. Boudreau, Jr.
- ---------------------------
EDWARD J. BOUDREAU, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER
2
<PAGE> 3
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
THE STATEMENT OF ASSETS AND LIABILITIES IS THE FUND'S BALANCE SHEET AND SHOWS
THE VALUE OF WHAT THE FUND OWNS, IS DUE AND OWES ON SEPTEMBER 30, 1995. YOU'LL
ALSO FIND THE NET ASSET VALUE PER SHARE AS OF THAT DATE.
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Publicly traded bonds and direct placement
security (cost - $146,735,406) ..................... $ 151,840,425
Joint repurchase agreement (cost - $7,346,000) ....... 7,346,000
Corporate savings account ............................ 670
-------------
159,187,095
Receivable for investments sold ....................... 1,424,759
Interest receivable ................................... 3,537,214
-------------
Total Assets ........................ 164,149,068
------------------------------------------------------------
LIABILITIES:
Payable for variation margin - Note A ................. 41,250
Payable for investments purchased ..................... 2,383,846
Payable to John Hancock Advisers, Inc. and
affiliates - Note B .................................. 284,099
Accounts payable and accrued expenses ................. 80,773
-------------
Total Liabilities ................... 2,789,968
------------------------------------------------------------
NET ASSETS:
Capital paid-in ....................................... 157,569,273
Accumulated net realized loss on investments and
financial futures contracts .......................... (1,264,310)
Net unrealized appreciation of investments and
financial futures contracts .......................... 5,044,550
Undistributed net investment income ................... 9,587
-------------
Net Assets .......................... $ 161,359,100
============================================================
NET ASSET VALUE PER SHARE:
(based on 7,539,539 shares of beneficial interest
outstanding - 20 million shares authorized with
no par value) ......................................... $ 21.40
==============================================================================
</TABLE>
THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED AND
EXPENSES INCURRED IN OPERATING THE FUND. IT ALSO SHOWS NET GAINS (LOSSES) FOR
THE PERIOD STATED.
<TABLE>
STATEMENT OF OPERATIONS
Nine months ended September 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest ............................................... $ 10,441,717
------------
Expenses:
Investment management fee - Note B .................... 742,848
Transfer agent fee .................................... 94,005
Printing .............................................. 70,924
Custodian fee ......................................... 31,561
Auditing fee .......................................... 27,999
New York Stock Exchange fee ........................... 11,300
Trustees' fees ........................................ 11,057
Miscellaneous ......................................... 7,027
Legal fees ............................................ 4,306
------------
Total Expenses ....................... 1,001,027
------------------------------------------------------------
Net Investment Income ................ 9,440,690
------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FINANCIAL FUTURES CONTRACTS
Net realized gain on investments sold .................. 1,084,831
Net realized loss on financial futures contracts ....... (405,846)
Change in net unrealized appreciation/depreciation
of investments ........................................ 11,459,669
Change in net unrealized appreciation/depreciation
of financial futures contracts ........................ 37,344
------------
Net Realized and Unrealized
Gain on Investments and
Financial Futures Contracts .......... 12,175,998
------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations ............ $ 21,616,688
============================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
3
<PAGE> 4
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
NINE MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 1995 DECEMBER 31,
(UNAUDITED) 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment income .................................................................. $ 9,476,690 $ 12,529,603
Net realized gain (loss) on investments sold and financial futures contracts ........... 642,985 (1,552,506)
Change in net unrealized appreciation/depreciation of investments and
financial futures contracts .......................................................... 11,497,013 (15,741,319)
------------- -------------
Net Increase (Decrease) in Net Assets Resulting from Operations ....................... 21,616,688 (4,764,222)
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income ($1.2600 and $1.6825 per share, respectively) ..... (9,448,252) (12,512,454)
Distributions from net realized gain on investments sold and financial futures contracts
(none and $0.0326 per share, respectively) ............................................ -- (239,420)
------------- -------------
Total Distributions to Shareholders ................................................... (9,448,252) (12,751,874)
------------- -------------
FROM FUND SHARE TRANSACTIONS -- NET:*
(Market value of shares issued to shareholders in reinvestment of distributions) ....... 1,274,508 1,723,660
------------- -------------
NET ASSETS:
Beginning of period .................................................................... 147,916,156 163,708,592
------------- -------------
End of period (including undistributed net investment income of $9,587
and $17,149, respectively) ........................................................... $ 161,359,100 $ 147,916,156
============= =============
* ANALYSIS OF FUND SHARE TRANSACTIONS:
Shares outstanding, beginning of period ................................................ 7,477,780 7,391,349
Shares issued to shareholders in reinvestment of distributions ......................... 61,759 86,431
------------- -------------
Shares outstanding, end of period ...................................................... 7,539,539 7,477,780
============= =============
</TABLE>
THE STATEMENT OF CHANGES IN NET ASSETS SHOWS HOW THE VALUE OF THE FUND'S NET
ASSETS HAS CHANGED SINCE THE END OF THE PREVIOUS PERIOD. THE DIFFERENCE REFLECTS
EARNINGS LESS EXPENSES, ANY INVESTMENT GAINS AND LOSSES, DISTRIBUTIONS PAID TO
SHAREHOLDERS, AND ANY INCREASE DUE TO REINVESTMENT OF DISTRIBUTIONS IN THE FUND.
THE FOOTNOTE ILLUSTRATES THE NUMBER OF FUND SHARES OUTSTANDING AT THE BEGINNING
OF THE PERIOD, REINVESTED AND OUTSTANDING AT THE END OF THE PERIOD, FOR THE LAST
TWO PERIODS.
SEE NOTES TO FINANCIAL STATEMENTS.
4
<PAGE> 5
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for each share of beneficial interest outstanding throughout the period indicated, investment returns, key
ratios, and supplemental data are as follows:
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
(UNAUDITED) YEAR ENDED DECEMBER 31,
--------------------- ----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period....... $ 19.78 $ 22.15 $ 22.15 $ 21.62 $ 21.61 $ 20.08 $ 20.87
-------- -------- -------- -------- -------- -------- --------
Net Investment Income...................... 1.26 1.27 1.68 1.76 1.85 1.92 1.96
Net Realized and Unrealized Gain (Loss)
on Investments and Financial Futures
Contracts................................ 1.62 (2.06) (2.34) 1.07 0.03 1.54 (0.77)
-------- -------- -------- -------- -------- -------- --------
Total from Investment Operations........ 2.88 (0.79) (0.66) 2.83 1.88 3.46 1.19
-------- -------- -------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment Income....... (1.26) (1.26) (1.68) (1.76) (1.87) (1.93) (1.98)
Distributions from Net Realized Gain on
Investments Sold and Financial Futures
Contracts................................ --- (0.03) (0.03) (0.49) --- --- ---
Temporary Overdistribution................. --- --- --- (0.05) --- --- ---
-------- -------- -------- -------- -------- -------- --------
Total Distributions..................... (1.26) (1.29) (1.71) (2.30) (1.87) (1.93) (1.98)
-------- -------- -------- -------- -------- -------- --------
Net Asset Value, End of Period............. $ 21.40 $ 20.07 $ 19.78 $ 22.15 $ 21.62 $ 21.61 $ 20.08
======== ======== ======== ======== ======== ======== ========
Per Share Market Value, End of Period...... $ 21.125 $ 19.875 $ 17.630 $ 22.375 $ 23.500 $ 24.000 $ 19.500
Total Investment Return at Market Value.... 27.30%(a) (5.45%)(a) (14.14%) 5.35% 6.54% 33.06% 0.43%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted).. $161,359 $149,628 $147,916 $163,709 $157,757 $156,026 $143,334
Ratio of Expenses to Average Net Assets.... 0.85%* 0.87%* 0.88% 0.85% 0.82% 0.74% 0.71%
Ratio of Net Investment Income to Average
Net Assets............................... 8.01%* 8.02%* 8.11% 7.78% 8.58% 9.33% 9.70%
Portfolio Turnover Rate.................... 71% 66% 82% 99% 104% 81% 95%
</TABLE>
* On an annualized basis.
(a) Not annualized.
THE FINANCIAL HIGHLIGHTS SUMMARIZES THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIOD INDICATED: NET INVESTMENT INCOME, GAINS (LOSSES),
DIVIDENDS AND TOTAL INVESTMENT RETURN OF THE FUND. IT SHOWS HOW THE FUND'S NET
ASSET VALUE FOR A SHARE HAS CHANGED SINCE THE END OF THE PREVIOUS PERIOD.
ADDITIONALLY, IMPORTANT RELATIONSHIPS BETWEEN SOME ITEMS PRESENTED IN THE
FINANCIAL STATEMENTS ARE EXPRESSED IN RATIO FORM.
SEE NOTES TO FINANCIAL STATEMENTS.
5
<PAGE> 6
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<TABLE>
SCHEDULE OF INVESTMENTS
September 30, 1995 (Unaudited)
- ------------------------------------------------------------------------------------------------------------
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY INVESTORS TRUST ON SEPTEMBER 30,
1995. IT'S DIVIDED INTO TWO MAIN CATEGORIES: PUBLICLY TRADED BONDS AND DIRECT PLACEMENT SECURITY, AND
SHORT-TERM INVESTMENTS. THE SECURITIES ARE FURTHER BROKEN DOWN BY INDUSTRY GROUPS. SHORT-TERM INVESTMENTS,
WHICH REPRESENT THE FUND'S "CASH" POSITION, ARE LISTED LAST.
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- -------- -----
<S> <C> <C> <C> <C>
PUBLICLY TRADED BONDS AND DIRECT PLACEMENT SECURITY
AEROSPACE (0.35%)
Jet Equipment Trust Ser 1995-B,
*Cert 08-15-14 (R)........................................ 10.91% BB+ $ 550 $ 570,845
------------
BANKS (14.72%)
Abbey National First Capital B.V.,
Sub Note 10-15-04........................................ 8.200 AA- 750 816,698
African Development Bank,
Sub Note 12-15-03........................................ 9.750 AA 1,000 1,182,100
Bank of Montreal - Chicago Branch,
Sub Note 11-01-00........................................ 9.800 A+ 1,000 1,000,910
Barclays North American Capital Corp.,
Gtd Cap Note 05-15-21.................................... 9.750 AA- 900 1,034,937
Den Danske Bank Aktieselskab,
*Sub Note 06-15-05 (R).................................... 7.250 BBB+ 800 803,576
International Bank for Reconstruction and Development,
30 Yr Bond 10-15-16...................................... 8.625 AAA 3,800 4,456,260
30 Yr Bond 07-15-17...................................... 9.250 AAA 1,000 1,242,260
Landeskreditbank Baden - Wurttemberg
Sub Note 02-01-23........................................ 7.625 AAA 1,300 1,370,356
Midland American Capital Corp.,
Gtd Note 11-15-03........................................ 12.750 A 1,650 1,931,936
National Westminster Bank PLC - New York Branch,
Sub Note 05-01-01........................................ 9.450 AA- 1,200 1,358,484
Scotland International Finance No. 2 B.V.,
Sub Gtd Note 01-27-04 (R)................................ 8.800 A+ 2,000 2,221,920
Sub Gtd Note 11-01-06 (R)................................ 8.850 A+ 750 852,941
Security Pacific Corp.,
Medium Term Sub Note 05-09-01............................ 10.360 A- 1,750 2,061,028
Sub Note 11-15-00........................................ 11.500 A- 1,000 1,205,150
Toronto Dominion Bank - New York Branch,
Sub Note 01-15-09........................................ 6.450 AA- 1,000 951,700
Westdeutsche Landesbank Girozentrale - New York Branch,
Sub Note 06-15-05........................................ 6.750 AA+ 1,250 1,255,562
------------
23,745,818
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE> 7
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- -------- -----
<S> <C> <C> <C> <C>
BROADCASTING (5.36%)
Cablevision Systems Corp.,
Sr Sub Deb 04-01-04...................................... 10.750% B $1,000 $ 1,052,500
Century Communications Corp.,
Sr Sub Deb 10-15-03...................................... 11.875 B+ 1,250 1,328,125
Continental Cablevision, Inc.,
Sr Sub Deb 06-01-07...................................... 11.000 BB- 1,000 1,105,000
Jones Intercable, Inc.,
*Sr Sub Deb 07-15-04...................................... 11.500 BB 500 546,250
Le Groupe Videotron Ltee,
*Sr Note 02-15-05......................................... 10.625 BB+ 250 262,500
Rogers Cablesystems Ltd.,
*Sr Sec Second Priority Note 03-15-05..................... 10.000 BBB 500 525,000
TKR Cable I, Inc.,
Sr Deb 10-30-07.......................................... 10.500 BBB- 2,000 2,301,800
Turner Broadcasting System, Inc.,
*Sr Note 07-01-13......................................... 8.375 BB+ 550 551,275
Viacom International,
Sub Deb 07-07-06......................................... 8.000 BB- 1,000 980,000
------------
8,652,450
------------
COMPUTERS (1.34%)
Unisys Corp.,
Credit Sensitive Note 07-01-97........................... 13.500 BB- 2,000 2,165,000
------------
CONTAINERS (0.33%)
Stone Container Corp.,
Sr Sub Note 10-01-04..................................... 11.500 B 500 525,000
------------
COSMETICS & TOILETRIES (0.45%)
Johnson & Johnson,
Deb 11-15-23............................................. 6.730 AAA 750 721,440
------------
FINANCE (5.65%)
APP International Finance Co. B.V.,
*Gtd Sec Note 10-01-05.................................... 11.750 BB 250 251,875
Banc One Credit Card Master Trust,
Class A Asset Backed Ctf, Ser 1994-B 12-15-99............ 7.550 AAA 1,000 1,027,180
CIT Group Holdings, Inc. (The),
Medium Term Sr Sub Cap Note 03-15-01..................... 9.250 A 1,000 1,120,050
DR Structured Finance Corp.,
Sec Pass thru Ctf Ser 1993K-1 08-15-18................... 7.430 BBB 1,000 860,000
Great Western Financial Corp.,
Note 02-01-02............................................ 8.600 BBB+ 1,250 1,343,575
Green Tree Financial Corp.,
*Ctf Home Improv Ln Ser 1995-D Cl M-2 09-15-25............ 6.950 AAA 650 643,703
Merrill Lynch Mortgage Investors, Inc.,
Sr/Sub Pass thru Ctf Ser 1992, Class B (Sub) 04-15-12.... 8.500 AA 482 493,835
Santander Financial Issuances Ltd.,
*Sub Gtd Note 04-15-05.................................... 7.875 A+ 1,000 1,054,170
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
7
<PAGE> 8
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- -------- -----
<S> <C> <C> <C> <C>
FINANCE (CONTINUED)
Standard Credit Card Master Trust I,
*Class A Credit Card Part Ctf Ser 1995-2 01-07-00......... 8.625% AAA $1,250 $ 1,287,500
Class A Credit Card Part Ctf Ser 1994-2 04-07-08......... 7.250 AAA 1,000 1,033,750
------------
9,115,638
------------
GLASS PRODUCTS (0.51%)
Owens-Illinois, Inc.,
Sr Deb 12-01-03.......................................... 11.000 BB 750 824,063
------------
GOLD MINING & PROCESSING (1.19%)
Magma Copper Co.,
Sr Sub Note 12-15-01..................................... 12.000 BB+ 1,755 1,926,113
------------
GOVERNMENTAL - FOREIGN (2.05%)
Brazil, Republic of,
*Par Bond YL4 04-15-24.................................... 4.250 NR 250 120,625
Nova Scotia, Province of,
Deb 04-01-22............................................. 8.750 A- 850 957,653
Ontario, Province of,
Bond 06-04-02............................................ 7.750 AA- 500 532,550
Deb 05-01-11............................................. 15.125 AA- 325 358,940
Deb 08-31-12............................................. 15.250 AA- 350 423,241
Quebec, Province of,
Deb 10-01-13............................................. 13.000 A+ 500 605,965
United Mexican States
*Coll Par Bond Ser B 12-31-19............................. 6.250 BB 500 302,500
------------
3,301,474
------------
GOVERNMENTAL - U.S. (16.32%)
United States Treasury,
Bond 08-15-05............................................ 10.750 AAA 2,215 2,935,229
Bond 08-15-17............................................ 8.875 AAA 3,085 3,868,312
Bond 05-15-18............................................ 9.125 AAA 3,250 4,182,328
Bond 02-15-23............................................ 7.125 AAA 1,720 1,825,625
Note 04-15-98............................................ 7.875 AAA 1,000 1,045,940
Note 05-15-98............................................ 9.000 AAA 2,100 2,255,211
Note 11-30-99............................................ 7.750 AAA 5,810 6,174,926
Note 05-15-01............................................ 8.000 AAA 3,710 4,047,944
------------
26,335,515
------------
GOVERNMENTAL - U.S. AGENCIES (14.10%)
Federal National Mortgage Association,
15 Yr SF Pass thru Ctf 01-25-05.......................... 8.000 AAA 1,000 1,028,120
15 Yr SF Pass thru Ctf 02-01-08.......................... 7.500 AAA 728 740,735
*30 Yr SF Pass thru Ctf 10-01-23.......................... 7.000 AAA 904 891,196
Financing Corp.,
Bond Ser B 04-06-18...................................... 9.800 AAA 1,900 2,490,178
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 9
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- -------- -----
<S> <C> <C> <C> <C>
GOVERNMENTAL - U.S. AGENCIES (CONTINUED)
Government National Mortgage Association,
30 Yr SF Pass thru Ctf 10-15-23.......................... 7.000% AAA $ 871 $ 861,093
*30 Yr SF Pass thru Ctf 02-15-24 to 09-01-25.............. 7.500 AAA 822 830,523
*30 Yr SF Pass thru Ctf 11-15-22 to 01-01-25+............. 8.000 AAA 3,776 3,881,681
*30 Yr SF Pass thru Ctf 01-15-23 to 09-15-24.............. 8.500 AAA 5,452 5,680,763
30 Yr SF Pass thru Ctf 04-15-21.......................... 9.000 AAA 844 891,316
*30 Yr SF Pass thru Ctf 11-15-19 to 02-15-25.............. 9.500 AAA 1,985 2,122,031
30 Yr SF Pass thru Ctf 11-15-20.......................... 10.000 AAA 575 627,001
TennesseeValley Authority,
Power Bonds 1989 Ser G 11-15-29.......................... 8.625 AAA 2,500 2,707,750
------------
22,752,387
------------
INSURANCE (2.16%)
Liberty Mutual Insurance Co.,
*Surplus Note 05-04-07 (R)................................ 8.200 A2 375 393,761
Massachusetts Mutual Life Insurance Co.,
Surplus Note 11-15-23 (R)................................ 7.625 AA- 750 725,715
Metropolitan Life Insurance Co.,
Surplus Note 11-01-03 (R)................................ 6.300 AA 1,000 941,760
New York Life Insurance Co.,
Surplus Note 12-15-23 (R)................................ 7.500 AA 1,500 1,431,180
------------
3,492,416
------------
LEISURE & RECREATION (0.10%)
Mohegan Tribal Gaming Authority
*Sr Sec Note 11-15-02 (R)................................. 13.500 NR 150 155,625
------------
OIL & GAS (3.16%)
Ashland Oil, Inc.,
SF Deb 10-15-17.......................................... 11.125 BBB 1,000 1,127,540
Coastal Corp. (The),
Sr Deb 06-15-06.......................................... 11.750 BB+ 1,000 1,076,250
Maxus Energy Corp.,
Deb 05-01-13............................................. 11.250 BB- 125 128,125
Norsk Hydro, a.s.,
Deb 06-15-23............................................. 7.750 A- 1,000 1,030,640
Oryx Energy Co.,
Note 09-15-98............................................ 9.750 BB 1,000 1,005,000
TransTexas Gas Corp.,
*Sr Note 06-15-02......................................... 11.500 BB- 700 733,250
------------
5,100,805
------------
PAPER (0.46%)
Georgia-Pacific Corp.,
Deb 02-15-18............................................. 9.500 BBB- 450 472,558
S.D. Warren Co.,
Sr Sub Note 12-15-04..................................... 12.000 B+ 250 276,250
------------
748,808
------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 10
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- -------- -----
<S> <C> <C> <C> <C>
PUBLISHING (2.41%)
News America Holdings Inc.,
*Deb 08-10-18............................................. 8.250% BBB- $ 115 $ 119,866
Sr Note 10-15-99......................................... 9.125 BBB- 1,000 1,085,230
Sr Note 12-15-01......................................... 12.000 BBB- 750 838,650
Sr Note 02-15-05......................................... 8.500 BBB- 700 760,459
Time Warner Inc.,
Deb 01-15-13............................................. 9.125 BBB- 1,000 1,085,370
------------
3,889,575
------------
RETAIL (2.34%)
Grand Union Co.,
*Sr Note 09-01-04......................................... 12.000 B- 475 456,000
Kroger Co. (The),
Lease Ctf 02-01-09....................................... 12.950 BB+ 1,910 2,120,100
May Department Stores Co.(The),
Deb 06-15-18............................................. 10.750 A 126 136,719
Safeway Stores, Inc.,
Lease Ctf 01-15-09....................................... 13.500 BBB- 474 540,147
Thrifty Payless Inc.,
*Sr Note 04-15-03......................................... 11.750 B+ 500 526,250
------------
3,779,216
------------
STEEL (0.98%)
UCAR Global Enterprises Inc.,
*Sr Sub Note 01-15-05..................................... 12.000 B 405 451,575
Weirton Steel Corp.,
*Sr Note 03-01-98......................................... 11.500 B 300 309,000
*Sr Note 10-15-99......................................... 10.875 B 260 262,600
*Sr Note 06-01-05 (R)..................................... 10.750 B 600 555,000
------------
1,578,175
------------
TOBACCO (0.78%)
RJR Nabisco Capital Corp.,
Sr Note 04-15-04......................................... 8.750 BBB- 1,000 1,012,170
RJR Nabisco Inc.,
*Note 9-15-03............................................. 7.625 BBB- 250 239,810
------------
1,251,980
------------
TRANSPORTATION (6.95%)
American Airlines, Inc.,
1991-A Pass thru Trust 01-02-07.......................... 9.710 BBB- 614 680,306
Delta Air Lines, Inc.,
Equip Tr Ctf Ser A 06-01-08.............................. 10.000 BB+ 2,000 2,348,360
NWA Inc.,
Note 08-01-96............................................ 8.625 B 2,285 2,307,850
Rail Car Trust, No. 1992-1
Trust Note 06-01-04...................................... 7.750 AAA 1,717 1,809,752
Scandinavian Airlines System,
Bond 07-20-99............................................ 9.125 A3 1,000 1,069,690
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 11
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<TABLE>
<CAPTION>
PAR VALUE
INTEREST S+P (000'S MARKET
ISSUER, DESCRIPTION RATE RATING** OMITTED) VALUE
- ------------------- -------- -------- -------- -----
<S> <C> <C> <C> <C>
TRANSPORTATION (CONTINUED)
United Air Lines, Inc.,
Deb Ser B 05-01-14....................................... 11.210% BB $1,000 $ 1,238,750
USAir 1990-A Pass Through Trusts,
Pass thru Ctf Ser 1990-A1 03-19-05....................... 11.200 B+ 1,845 1,762,195
------------
11,216,903
------------
UTILITIES (12.39%)
ALLTEL Corp.,
Deb 04-01-09............................................. 10.375 A+ 500 529,870
BVPS II Funding Corp.,
*Collateralized Lease Bond 06-01-17....................... 8.890 BB+ 200 184,724
*Collateralized Lease Bond 12-01-07....................... 8.330 BB+ 600 589,446
Cleveland Electric Illuminating Co.,
*1st Mtg Ser 2005-B 05-15-05.............................. 9.500 BB 750 751,050
CTC Mansfield Funding Corp.,
Sec Lease Oblig 09-30-16................................. 11.125 B+ 2,575 2,643,856
E.I.P. Refunding Corp.,
Sec Fac Bond 10-01-12.................................... 10.250 B+ 744 770,791
First PV Funding Corp.,
*Lease Oblig Ser 1986 B 01-15-16.......................... 10.150 B+ 1,500 1,500,000
Fitchburg Holding Corp.,
Sec Note 01-31-03 (r).................................... 15.750 BBB 2,311 2,506,571
GG1B Funding Corp.,
*Sec Lease Oblig 01-15-11................................. 7.430 BBB- 591 576,971
Sec Lease Oblig 01-15-14................................. 8.200 BBB- 500 482,325
GTE Corp.,
Deb 11-15-17............................................. 10.300 BBB+ 500 573,595
Deb 11-01-20............................................. 10.250 BBB+ 1,500 1,753,950
Hydro-Quebec (Gtd by Province of Quebec),
Deb Ser HS 02-01-21...................................... 9.400 A+ 1,000 1,194,740
Iberdrola International B.V.,
Gtd Note 10-01-02........................................ 7.500 AA- 1,000 1,033,940
Long Island Lighting Co.,
*Deb 03-15-03............................................. 7.050 BB+ 750 712,830
*Gen Ref 05-01-21......................................... 9.750 BBB- 250 253,275
Louisiana Power & Light Co.,
*Sec Lease Oblig Bond Ser B 01-02-17...................... 10.670 BBB- 1,350 1,451,736
Midland Funding Corp. I,
Sr Sec Lease Oblig Ser C 07-23-02........................ 10.330 BB- 1,214 1,250,603
Philippine Long Distance Telephone Co.,
*Note 08-01-05............................................ 9.875 BB 425 434,563
Tenaga Nasional Berhad,
Note 06-15-04 (R)........................................ 7.875 A+ 750 796,343
------------
19,991,179
------------
TOTAL PUBLICLY TRADED BONDS AND DIRECT PLACEMENT SECURITY
(Cost $146,735,406) (94.10%) 151,840,425
------ ------------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 12
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<TABLE>
<CAPTION>
PAR VALUE
INTEREST (000'S MARKET
ISSUER, DESCRIPTION RATE OMITTED) VALUE
- ------------------- -------- -------- -----
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
JOINT REPURCHASE AGREEMENT (4.55%)
Investment in a joint repurchase agreement transaction
with UBS Securities Inc., Dated 09-29-95, Due 10-02-95
(secured by U.S. Treasury Bonds, 7.500% and 14.000%,
due 11-15-24 and 11-15-11, and U.S. Treasury Notes, 6.625%
and 7.500% due 3-31-97 and 12-31-96) - Note A.................... 6.450% $7,346 $ 7,346,000
------------
CORPORATE SAVINGS ACCOUNT (0.00%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 3.00%............................................... 670
------------
TOTAL SHORT-TERM INVESTMENTS ( 4.55%) 7,346,670
------ ------------
TOTAL INVESTMENTS (98.65%) $159,187,095
====== ============
</TABLE>
NOTES TO THE SCHEDULE OF INVESTMENTS
(r) The security listed below is a direct placement security and is restricted
as to resale. The Fund has limited rights to registration under the
Securities Act of 1933 with respect to restricted securities (not including
Rule 144A securities). In certain circumstances the Fund may bear a portion
of the cost of such registrations; otherwise, such costs would be borne by
the issuer. See Note A of the Notes To Financial Statements for valuation
policy. Additional information on this restricted security is as follows:
<TABLE>
<CAPTION>
MARKET
VALUE AS A
PERCENTAGE
ACQUISITION ACQUISITION OF FUND'S MARKET
DATE COST NET ASSETS VALUE
---- ---- ---------- -----
<S> <C> <C> <C> <C>
Fitchburg Holdings Corp., Sec. Note, 15.75%, 01-31-03.. 02-10-81 2,336,456 1.55% $2,506,571
</TABLE>
(R) These securities are exempt from registration under Rule 144A of the
Securities Act of 1933. Such securities may be resold, normally to qualified
institutional buyers, in transactions exempt from registration. Rule 144A
securities amounted to $9,448,666 as of September 30, 1995. See Note A of
the Notes to Financial Statements for valuation policy.
+ These securities having an aggregate value of $888,759.38 or 0.55% of the
Fund's net assets, have been purchased on a when issued basis subsequent to
the date of this schedule. The purchase price and the interest rate of such
security is fixed at trade date, although the Fund does not earn any
interest on such securities until settlement date. The Fund has instructed
the Custodian Bank to Segregate assets with a current value at least equal
to the amount of its when issued commitment. Accordingly, the market value
of $989,437 of U.S. Treasury Bond 7.125%, 02-15-23 has been segregated to
cover the when issued commitments.
* Securities, other than short-term investments, newly added to the portfolio
during the nine months ended September 30, 1995.
** Credit ratings are rated by Moody's Investor Services or John Hancock
Advisers, Inc. where Standard and Poors ratings are not available.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
(UNAUDITED)
NOTE A --
ACCOUNTING POLICIES
John Hancock Investors Trust (the "Fund") is a closed-end investment management
company registered under the Investment Company Act of 1940. Significant
accounting policies of the Fund are as follows:
VALUATION OF INVESTMENTS 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 in accordance with procedures
approved by the Trustees. Short-term debt investments maturing within 60 days
are valued at amortized cost which approximates market value.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other registered
investment companies having a management contract with John Hancock Advisers,
Inc. (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial Group,
may participate in a joint repurchase agreement transaction. Aggregate cash
balances are invested in one or more repurchase agreements, whose underlying
securities are obligations of the U.S. government and/or its agencies. The
Fund's custodian bank receives delivery of the underlying securities for the
joint account on the Fund's behalf. The Adviser is responsible for ensuring that
the agreement is fully collateralized at all times.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of the date of
purchase, sale or maturity. Net realized gains and losses on sales of
investments are determined on the identified cost basis.
FEDERAL INCOME TAXES The Fund's policy is to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies and
to distribute all of its taxable income, including any net realized gain on
investment, to its shareholders. Therefore, no federal income tax provision is
required. For federal income tax purposes, the Fund has $1,050,989 of capital
loss carryforward available, to the extent provided by regulations, to offset
future net realized capital gains. If such carryforward is used by the Fund, no
capital gain distributions will be made. The carryforward expires December 31,
2002. Additionally, net capital losses of $233,511 attributable to security
transactions occurring after October 31, 1994 are treated as arising on the
first day (January 1, 1995) of the Fund's next taxable year.
DIVIDENDS, DISTRIBUTIONS AND INTEREST Dividend income on investment securities
is recorded on the ex-dividend date. Interest income on investment securities is
recorded on the accrual basis.
The Fund records all dividends and distributions to shareholders from net
investment income and realized gains on the ex-dividend date. Such distributions
are determined in conformity with federal income tax regulations, which may
differ from generally accepted accounting principles.
DISCOUNT ON SECURITIES The Fund accretes original issue discount from par value
on securities purchased from either the date of issue or the date of purchase
over the life of the security, as required by the Internal Revenue Code.
FINANCIAL FUTURES CONTRACTS At the time the Fund enters into a financial futures
contract, it is required to deposit with its custodian a specified amount of
cash or U.S. government securities, known as "initial margin", equal to a
certain percentage of the value of the financial futures contract being traded.
Each day, the futures contract is valued at the official settlement price of the
board of trade or U.S. commodities exchange. Subsequent payments, known as
"variation margin", to and from the broker are made on a daily basis as the
market price of the financial futures contract fluctuates. Daily variation
margin adjustments, arising from this "mark to market", are recorded by the Fund
as unrealized gains or losses.
When the contracts are closed, the Fund recognizes a gain or loss. Risks of
entering into futures contracts include the possibility that there may be an
illiquid market and/or that a change in the value of the contract may not
correlate with changes in the value of the underlying securities.
For Federal income tax purposes, the amount, character and timing of the
Fund's gains and/or losses can be affected as a result of futures transactions.
13
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
September 30, 1995, open positions in financial futures contracts were as
follows:
<TABLE>
<CAPTION>
UNREALIZED
EXPIRATION OPEN CONTRACTS POSITION DEPRECIATION
- ---------- -------------- -------- ------------
<S> <C> <C> <C>
DEC, 1995 45 U.S. TREASURY NOTE SHORT ($60,469)
=======
</TABLE>
At September 30, 1995, the Fund has deposited in a segregated account $57,250
par value of U.S. Treasury Bond, 10.750%, 08-15-05, $74,500 par value of U.S.
Treasury Bond, 8.875%, 08-15-17 and $22,000 par value of U.S. Treasury Bond,
7.125%, 2/15/23 to cover margin requirements on open financial futures
contracts.
NOTE B --
MANAGEMENT FEE AND
ADMINISTRATIVE SERVICES
Under the present investment management contract, the Fund pays a quarterly
management fee to the Adviser, for a continuous investment program, equivalent
on an annual basis, to the sum of (a) 0.650% of the first $150,000,000 of the
Fund's average weekly net asset value, (b) 0.375% of the next $50,000,000, (c)
0.350% of the next $100,000,000 and (d) 0.300% of the Fund's average weekly net
asset value in excess of $300,000,000.
In the event normal operating expenses of the Fund, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, exceeds 1.5% of the
first $30,000,000 of the Fund's average weekly net asset value and 1.0% of the
Fund's average weekly net asset value in excess of $30,000,000, the fee payable
to the Adviser will be reduced to the extent of such excess and the Adviser will
make additional arrangements necessary to eliminate any remaining excess
expenses.
Messrs. Edward J. Boudreau, Jr. and Richard S. Scipione are directors and/or
officers of the Adviser and/or its affiliates, as well as Trustees of the Fund.
The compensation of unaffiliated Trustees is borne by the Fund. Effective with
the fees paid for 1995, the unaffiliated Trustees may elect to defer for tax
purposes their receipt of this compensation under the John Hancock Group of
Funds Deferred Compensation Plan. The Fund will make investments in other John
Hancock Funds, as applicable, to cover its liability with regard to the deferred
compensation. Investments to cover the Fund's deferred compensation liability
will be recorded on the Fund's books as an other asset. The deferred
compensation liability will be marked to market on a periodic basis and income
earned by the investment will be recorded on the Fund's books.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than obligations of the
U.S. government and its agencies and short-term securities, during the nine
months ended September 30, 1995, aggregated $53,719,346 and $52,382,341,
respectively. Purchases and proceeds from sales of obligations of the U.S.
government and its agencies during the nine months ended September 30, 1995,
aggregated $55,280,827 and $59,948,578, respectively.
The cost of investments owned at September 30, 1995 (excluding the corporate
savings account) for Federal income tax purposes was $154,741,770. Gross
unrealized appreciation and depreciation of investment aggregated $6,872,155 and
$2,427,500, respectively, resulting in net unrealized appreciation of
$4,444,655.
14
<PAGE> 15
John Hancock Funds - Investors Trust
INVESTMENT OBJECTIVE AND POLICY
John Hancock Investors Trust is a closed-end diversified management investment
company, shares of which were initially offered to the public on January 29,
1971 and are publicly traded on the New York Stock Exchange. Its primary
investment objective is to generate income for distribution to its shareholders,
with capital appreciation as a secondary objective. The preponderance of the
Fund's assets are invested in a diversified portfolio of debt securities, some
of which may carry equity features. Up to 50% of the value of the Fund's assets
may be invested in restricted securities acquired through direct placement. The
Fund may issue a single class of senior securities not to exceed 331/3% of the
market or fair value of its net assets and may borrow from banks as a temporary
measure for emergency purposes in amounts not to exceed 5% of its total assets
taken at cost. Substantially all of the Fund's net investment income per year
will be distributed to shareholders in quarterly payments. Net realized
short-term capital gains, if any, will be distributed annually; however, net
realized long-term capital gains may be retained and reinvested. All
distributions are paid in cash unless the shareholder elects to participate in
the Automatic Dividend Reinvestment Plan.
FINANCIAL FUTURES CONTRACTS
The Fund may buy and sell financial futures contracts and options on futures
contracts to hedge against the effects of fluctuations in interest rates and
other market conditions. The Fund's ability to hedge successfully will depend on
the Adviser's ability to predict accurately the future direction of interest
rate changes and other market factors. There is no assurance that a liquid
market for futures and options will always exist. In addition, the Fund could be
prevented from opening, or realizing the benefits of closing out, a futures or
options position because of position limits or limits on daily price
fluctuations imposed by an exchange.
The Fund will not engage in transactions in futures contracts and options on
futures for speculation, but only for hedging or other permissible risk
management purposes. All of the Fund's futures contracts and options on futures
will be traded on a U.S. commodity exchange or board of trade. The Fund will not
engage in a transaction in futures or options on futures if, immediately
thereafter, the sum of initial margin deposits on existing positions and
premiums paid for options on futures would exceed 5% of the Fund's total assets.
DIVIDEND REINVESTMENT PLAN
John Hancock Investors Trust offers shareholders the opportunity to elect to
receive shares of the Fund's Common Shares in lieu of cash dividends. The Plan
is available to all shareholders without charge.
Any shareholder of record of John Hancock Investors Trust ("Investors") may
elect to participate in the Automatic Dividend Reinvestment Plan (the "Plan")
and receive shares of Investors' Common Shares in lieu of all or a portion of
the cash dividends.
Shareholders may join the Plan by filling out and mailing an authorization
card showing an election to reinvest all or a portion of dividend payments. If
received in proper form by State Street Bank and Trust Company, P.O. Box 8209,
Boston, Massachusetts 02266-8209 (the "Agent Bank") not later than seven
business days before the record date for a dividend, the election will be
effective with respect to all dividends paid after such record date.
Shareholders whose shares are held in the name of a broker or nominee should
contact the broker, bank, or nominee to participate in the Plan.
Participation in the Plan may be terminated at any time by written notice to
the Agent Bank and such termination will be effective immediately. However,
notice of termination must be received seven days prior to the record date of
any distribution to be effective for that distribution. Upon termination,
certificates will be issued representing the number of full shares of Common
Shares held by the Agent Bank. A shareholder will receive a cash payment for any
fractional share held.
The Agent Bank will act as agent for participating shareholders. The Board of
Trustees of Investors will declare dividends from net investment income payable
in cash or, in the case of shareholders participating in the Plan, partially or
entirely in Investors' Common Shares. The number of shares to be issued for the
benefit of each shareholder
15
<PAGE> 16
John Hancock Funds - Investors Trust
will be determined by dividing the amount of the cash dividend otherwise payable
to such shareholder on shares included under the Plan by the per share net asset
value of the Common Shares on the date for payment of the dividend, unless the
net asset value per share on the payment date is less than 95% of the market
price per share on that date, in which event the number of shares to be issued
to a shareholder will be determined by dividing the amount of the cash dividend
payable to such shareholder by 95% of the market price per share of the Common
Shares on the payment date. The market price of the Common Shares on a
particular date shall be the mean between the highest and lowest sales price on
the New York Stock Exchange on that date. Net asset value will be determined in
accordance with the established procedures of Investors. However, if as of such
payment date the market price of the Common Shares is lower than such net asset
value per share, the number of shares to be issued will be determined on the
basis of such market price. Fractional shares, carried out to three decimal
places, will be credited to your account. Such fractional shares will be
entitled to future dividends.
The shares issued to participating shareholders, including fractional shares,
will be held by the Agent Bank in the name of the participant. A confirmation
will be sent to each shareholder promptly, normally within seven days, after the
payment date of the dividend. The confirmation will show the total number of
shares held by such shareholder before and after the dividend, the amount of the
most recent cash dividend which the shareholder has elected to reinvest and the
number of shares acquired with such dividend.
The reinvestment of dividends does not in any way relieve participating
shareholders of any Federal, state or local income tax which may be due with
respect to such dividend. Dividends reinvested in shares will be treated on your
Federal income tax return as though you had received a dividend in cash in an
amount equal to the fair market value of the shares received, as determined by
the prices for shares of the Fund on the New York Stock Exchange as of the
dividend payment date. Distributions from the Fund's long-term capital gains
will be processed as noted above for those electing to reinvest in shares and
will be taxable to you as long-term capital gains. The confirmation referred to
above will contain all the information you will require for determining the cost
basis of shares acquired and should be retained for that purpose. At year end,
each account will be supplied with detailed information necessary to determine
total tax liability for the calendar year.
Additional information may be obtained from the Customer Service Department,
John Hancock Investors Trust, 101 Huntington Avenue, Boston, Massachusetts
02199-7603, 1 (800) 843-0090.
16
<PAGE> 17
NOTES
John Hancock Funds - Investors Trust
17
<PAGE> 18
NOTES
John Hancock Funds - Investors Trust
18
<PAGE> 19
NOTES
John Hancock Funds - Investors Trust
19
<PAGE> 20
----------------
[LOGO] JOHN HANCOCK FUNDS Bulk Rate
A GLOBAL INVESTMENT MANAGEMENT FIRM U.S. Postage
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S. Hackensack NJ
Permit No. 750
----------------
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JHD P50Q3 9/95
