John Hancock Funds
Investors
Trust
Annual Report
December 31, 1995
TRUSTEES
Edward J. Boudreau, Jr.
Chairman
Dennis S. Aronowitz*
Richard P. Chapman, Jr.*
William J. Cosgrove*
Gail D. Fosler*
Bayard Henery*
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
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, Massachusetts 02116
Listed: New York Stock Exchange Symbol: JHI
John Hancock Closed-End Funds: 1-800-843-0090
Chairman's Message
DEAR FELLOW SHAREHOLDERS:
The stock market's record-breaking, whirlwind performance in 1995 will
be a tough act to follow in 1996. In fact, we've already seen greater
market volatility this year, particularly among last year's leaders --
technology stocks. That's to be expected after a year that saw market
indexes soar, including the Standard & Poor's 500-Stock Index's 37%
advance. While many of the same economic conditions that fostered the
stellar 1995 market are still in place - slow economic growth, muted
inflation and decent corporate earnings - it would be unrealistic to
expect the market to stage a repeat in 1996. The old saying "trees don't
grow to the sky" comes to mind. Shareholders would do well to temper
expectations of investment returns and perhaps revisit your investment
allocations with your financial advisor to determine if rebalancing your
portfolio makes sense.
[A 1 1/4" x 1" photo of Edward J. Boudreau Jr., Chairman and Chief
Executive Officer, flush right, next to second paragraph.OMMITTED]
No matter how you scale back your market expectations, you should always
be able to count on consistent customer service performance. At John
Hancock Funds, we never stop working to find ways to sustain and improve
the quality of information and the level of assistance we provide you.
Our commitment to this task is no less than John Hancock's loyalty was
to his fledgling country when he is said to have uttered, "if it does
the public good, burn Boston." We won't go that far, of course, but we
share our namesake's dedication to putting the public before all else.
In our case, that public is you, our shareholders. We take very
seriously the role you have entrusted to us, that of helping you achieve
your financial goals. Part of that will always involve good customer
service. So please do not hesitate to call your Customer Service
Representative at 1-800-225-5291 if you have any questions or need
information. We take pride in helping you with the same spirit that John
Hancock displayed at the dawning of America.
Sincerely,
/s/Edward J. Boudreau, Jr.
EDWARD J. BOUDREAU, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER
By James K. Ho, Portfolio Manager
John Hancock
Investors Trust
Fixed-income securities thrive in a climate of modest growth,
benign inflation and steadily falling interest rates
"This
climate of
moderate
growth,
falling rates
and low
inflation was
ideal for
bond
investors."
After the bond-market debacle of 1994, the new year brought dramatic
proof of just how swiftly the investment climate can change for the
better. At the beginning of 1995, the Federal Reserve was still in a
restrictive mode, raising interest rates in hopes of putting the brakes
on the economy and preventing an outbreak of inflation. During the
fourth quarter of 1994, growth had surged above an annual rate of 5%,
lending credence to the consensus among market participants that rates
were likely to keep rising. Less than two months into the new year, the
Fed did as most expected, raising the interest rate banks charge each
other for overnight loans -- known as the federal funds rate -- one-half
percentage point to 6.00%. It was the seventh rate increase in 12
months, and there's nothing the bond market likes less than rising
interest rates.
Already, however, the economy was exhibiting signs of weakness in key
areas such as employment, housing and consumer spending. Economic growth
slowed to a modest annual rate of 2.7% during the first quarter of 1995.
As growth slowed and inflation remained tame, interest rates began
falling and the bond market took off. When the growth rate dipped to
1.3% during the second quarter, it looked as if we might be headed for
another recession. In July, the Fed shaved one-quarter percentage point
off the federal funds rate. A second quarter-point reduction followed in
December, two weeks before the period ended. Ironically, that brought
the federal funds rate back to 5.50%, exactly where it was when the
period began.
[A 2 1/4" x 3 1/2" photo of James K. Ho at bottom right. Caption reads:
"James K. Ho, Portfolio Manager." OMMITTED]
"Our focus
all year has
been on
corporate
bonds."
Top Five Sectors
1. U.S. Government &
Agency Bonds 29%
2. Financials 25%
3. Utilities 13%
4. Broadcasting/
Communications 11%
5. Transportation 7%
As a percentage of net assets on December 31, 1995
This climate of moderate growth, falling rates and low inflation was
ideal for bond investors. While the second half of 1995 was not quite as
strong as the first half, the Fund's overall performance was impressive,
both in absolute terms and compared to competing funds with similar
objectives. For the year ended December 31, 1995, John Hancock Investors
Trust had a total return of 20.31% at net asset value. That result
compared favorably with the average total return of 18.45% for all
open-end corporate debt A-rated funds, according to Lipper Analytical
Services.
Strategy review
The Fund's duration -- a measure of how much its net asset value will
vary in response to changing interest rates -- was just above five years
for most of the period, or close to the average for our peers. In light
of the way interest rates fell during the period, a longer duration
undoubtedly would have improved the Fund's performance. However,
interest-rate movements are notoriously hard to predict. Maintaining a
neutral average duration freed us to concentrate on variables over which
we feel we have some control, such as sector and security selection.
That doesn't mean we ignored opportunities to capitalize on broad trends
affecting interest rates. Rising interest rates in 1994 narrowed the
spread between long-term rates and short-term rates, creating what's
known as a flat yield curve. We believed that the yield curve was likely
to steepen in 1995. To prepare, we emphasized mid-term securities --
those in the three- to 10-year maturity range -- while de-emphasizing
short-term and long-term securities. This is known as a "bullet"
portfolio structure. Since then, as rates have fallen and the yield
curve has steepened, the bullet has proven to be a wise choice.
[Table entitled "Scorecard" at bottom of left hand column. The header
for the left hand column is "Investment"; the header for the right
column is "Recent performance .. and what's behind the numbers." The
first listing is "Time Warner" followed by an up arrow and the phrase
"Improving credit outlook." The second listing is "United Air Lines"
followed by an up arrow and the phrase "Chose not to merge with USAir."
The third listing is "K-mart" followed by a down arrow and the phrase
"Hurt by retailing slump." Footnote below reads: "See "Schedule of
Investments". Investment holdings are subject to change."]
Sector and security selection
Our focus all year has been on corporate bonds, both investment-grade
and high-yield bonds, which are sometimes called junk bonds. High-yield
bonds have credit ratings below BBB or Baa from one of the bond-rating
agencies and offer a higher yield to compensate for the added credit
risk. Slow but steady growth, low inflation and declining interest rates
during 1995 encouraged investors to reach for the higher yield available
from corporate bonds. As the year went on, the yield advantage over
Treasury securities narrowed, and corporate bonds realized corresponding
price gains. As spreads have narrowed and the economy has slowed, we've
begun looking for opportunities to shift assets out of corporate bonds
and back into Treasuries. Mortgage -backed securities never totaled more
than 15% of the Fund's assets all year, and were under 10% for most of
the past six months. Declining rates have increased prepayment risk on
mortgages in recent months and caused them to lag the broader market.
Prepayment risk is the risk that mortgage holders will pay off their
debt early and refinance at the lower prevailing rates.
[Bar chart with heading "Fund Performance" at top of the left hand
column. Under the heading is the footnote "For the year ended December
31, 1995." The chart is scaled in increments of 5% from top to bottom,
with 20% at the top and 0% at the bottom. Within the chart there are two
solid bars. The first represents the 20.31% total return for John
Hancock Investors Trust. The second represents the 18.45% total return
for the average open-end corporate debt A-rated fund. A footnote below
reads: "The total return for John Hancock Investors Trust is at net
asset value with all distributions reinvested. The average open-end
corporate debt A-rated fund is tracked by Lipper Analytical Services."]
Early in the year, when the economy was expanding more rapidly, we did
well with so-called cyclical sectors of the economy, such as paper and
steel, whose fortunes tend to rise and fall with the overall health of
the economy. As growth has slowed, we've gradually moved assets into
non-cyclical sectors, including media and cable companies. Top
performers included Viacom, a programmer, and Continental Cable-vision.
Time Warner also posted impressive gains during 1995 as its credit
outlook improved and investors applauded the proposed merger with Turner
Broadcasting System. Some other top performers were airlines, including
Delta Air Lines; AMR Corp., the parent of American Airlines which we
sold during the period, and United Air Lines, which rallied following
the decision not to merge with USAir. Our biggest disappointment of the
year, which we sold duing the period, was K-mart, which was hurt by the
slump in retailing and rumors of a possible bankruptcy.
Outlook
We think the current favorable climate for bond investors may well last
through the spring. One indicator we'll be watching closely is the
progress of the budget debate in Washington. The Fed is a strong
advocate of fiscal restraint. If and when Congress and the White House
can agree on a balanced budget, the Fed could signal its approval with
another rate cut. Farther out, though, the outlook begins to change.
Ultimately lower interest rates can't help but stimulate growth. If so,
then we begin to worry about inflation again, and perhaps a return to
market conditions more like those that prevailed a year ago. Since 1995
was an outstanding year, it is unlikely to be repeated in 1996 and
shareholders would do well to lower their expectations going forward.
"...we'll be
watching
closely ...
the progress
of the
budget debate
in Washington."
This commentary reflects the views of the portfolio manager through the
end of the Fund's period discussed in this report. Of course, the
manager's views are subject to change as market and other conditions
warrant.
<TABLE>
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<CAPTION>
Statement of Assets and Liabilities
- ----------------------------------------------------------------------------------------------------
DECEMBER 31,
--------------------------
1995 1994
----------- -----------
<S> <C> <C>
Assets:
Investments at value - Note C:
Publicly traded bonds and direct placement security
(cost - 1995 - $150,632,863;
1994 - $148,775,722) $160,005,748 $142,451,739
Common stocks (cost - 1995 - none; 1994 - $106,667) -- 76,000
Joint repurchase agreement
(cost - 1995 - $7,562,000; 1994 - $2,369,000) 7,562,000 2,369,000
Corporate savings account 303 4,661
----------- -----------
167,568,051 144,901,400
Receivable for investments sold 71,493 --
Interest receivable 2,791,758 3,161,299
Receivable for variation margin - Note A -- 9,688
Other Assets 3,263 --
----------- -----------
Total Assets 170,434,565 148,072,387
--------------------------------------------------------------------------------------------
Liabilities:
Payable for investments purchased 4,079,982 --
Payable to John Hancock Advisers, Inc. and affiliates - Note B 280,717 101,543
Accounts payable and accrued expenses 99,635 54,688
----------- -----------
Total Liabilities 4,460,334 156,231
--------------------------------------------------------------------------------------------
Net Assets:
Capital paid-in 157,992,094 156,294,765
Accumulated net realized loss on investments
and financial futures contracts (1,418,940) (1,943,295)
Net unrealized appreciation (depreciation) of investments
and financial futures contracts 9,372,885 (6,452,463)
Undistributed net investment income 28,192 17,149
----------- -----------
Net Assets $165,974,231 $147,916,156
====================================================================================================
Net Asset Value Per Share:
(based on 7,560,164 and 7,477,780 shares of beneficial interest
outstanding - 20 million shares authorized
with no par value) $21.95 $19.78
====================================================================================================
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 December 31, 1995 and December 31, 1994. You'll also find the net asset
value per share as of those dates.
See notes to financial statements.
</TABLE>
<TABLE>
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<CAPTION>
Statement of Operations
- ----------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------
1995 1994
----------- -----------
<S> <C> <C>
Investment Income:
Interest $13,975,347 $ 13,892,721
----------- -----------
Expenses:
Investment management fee - Note B 1,009,856 992,104
Transfer agent fee 118,736 154,239
Printing 88,282 84,406
Custodian fee 49,809 49,320
Auditing fee 37,100 34,000
New York Stock Exchange fee 16,991 16,424
Miscellaneous 13,403 12,503
Trustees' fees 12,967 16,129
Legal fees 3,898 3,993
----------- -----------
Total Expenses 1,351,042 1,363,118
--------------------------------------------------------------------------------------------
Net Investment Income 12,624,305 12,529,603
--------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments and Financial Futures
Contracts
Net realized gain (loss) on investments sold 1,088,238 ( 2,415,699)
Net realized gain (loss) on financial futures contracts (562,314) 863,193
Change in net unrealized appreciation/depreciation of investments 15,727,535 ( 15,642,568)
Change in net unrealized appreciation/depreciation
of financial futures contracts 97,813 (98,751)
----------- -----------
Net Realized and Unrealized Gain (Loss)
on Investments and Financial Futures Contracts 16,351,272 ( 17,293,825)
--------------------------------------------------------------------------------------------
Net Increase (Decrease) in Net Assets Resulting from Operations $28,975,577 ($ 4,764,222)
====================================================================================================
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 periods stated.
See notes to financial statements.
</TABLE>
<TABLE>
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<CAPTION>
Statement of Changes in Net Assets
- ----------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------
1995 1994
----------- -----------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment income $ 12,624,305 $ 12,529,603
Net realized gain (loss) on investments sold
and financial futures contracts 525,924 (1,552,506)
Change in net unrealized appreciation/depreciation of investments
and financial futures contracts 15,825,348 (15,741,319)
----------- -----------
Net Increase (Decrease) in Net Assets Resulting from Operations 28,975,577 (4,764,222)
----------- -----------
Distributions to Shareholders:
Dividends from net investment income ($1.6800 and $1.6825 per share,
respectively) (12,614,831) (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 (12,614,831) (12,751,874)
----------- -----------
From Fund Share Transactions
(Market value of shares issued to shareholders
in reinvestment of distributions) 1,697,329 1,723,660
----------- -----------
Net Assets:
Beginning of period 147,916,156 163,708,592
----------- -----------
End of period (including undistributed net investment income
of $28,192 and $17,149, respectively) $165,974,231 $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 82,384 86,431
----------- -----------
Shares outstanding, end of period 7,560,164 7,477,780
=========== ===========
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 fiscal 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.
</TABLE>
<TABLE>
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<CAPTION>
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout the period indicated,
investment returns, key ratios and supplemental data are listed as follows:
- -------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value,
Beginning of Period $ 19.78 $ 22.15 $ 21.62 $ 21.61 $ 20.08
-------- -------- -------- -------- --------
Net Investment Income 1.68 1.68 1.76 1.85 1.92
Net Realized and Unrealized Gain
(Loss) on Investments
and Financial Futures Contracts 2.17 ( 2.34) 1.07 0.03 1.54
-------- -------- -------- -------- --------
Total from Investment Operations 3.85 ( 0.66) 2.83 1.88 3.46
-------- -------- -------- -------- --------
Less Distributions:
Dividends from Net Investment
Income ( 1.68) ( 1.68) ( 1.76) ( 1.87) ( 1.93)
Distributions from
Net Realized Gain
on Investments Sold
and Financial Futures Contracts -- ( 0.03) ( 0.49) -- --
Temporary Overdistribution -- -- ( 0.05) -- --
-------- -------- -------- -------- --------
Total Distributions ( 1.68) ( 1.71) ( 2.30) ( 1.87) ( 1.93)
-------- -------- -------- -------- --------
Net Asset Value, End of Period $ 21.95 $ 19.78 $ 22.15 $ 21.62 $ 21.61
-------- -------- -------- -------- --------
Per Share Market Value,
End of Period $ 20.50 $ 17.88 $ 22.375 $ 23.50 $ 24.00
Total Investment Return
at Market Value 24.33% (12.92%) 5.35% 6.54% 33.06%
Ratios and Supplemental Data
Net Assets, End of Period
(000's omitted) $165,974 $147,916 $163,709 $157,757 $156,026
Ratio of Expenses
to Average Net Assets 0.85% 0.88% 0.85% 0.82% 0.74%
Ratio of Net Investment Income
to Average Net Assets 7.93% 8.11% 7.78% 8.58% 9.33%
Portfolio Turnover Rate 102% 82% 99% 104% 81%
The Financial Highlights summarize the impact of the following factors on a single share for the period
indicated: the 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. It
also shows the total investment return for each period based on the market value of Fund shares.
Additionally, important relationships between some items presented in the financial statements are
expressed in ratio form.
See notes to financial statements.
</TABLE>
<TABLE>
FINANCIAL STATEMENTS
John Hancock Funds - Investors Trust
<CAPTION>
Schedule of Investments
December 31, 1995
- ------------------------------------------------------------------------------------------------------
The Schedule of Investments is a complete list of all securities owned by Investors Trust on
December 31, 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.
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 (0.36%)
Jet Equipment Trust Ser 1995-B,
* Cert 08-15-14 (R) 10.910% BB+ $550 $ 603,570
------------
Banks (14.96%)
Abbey National First Capital B.V.,
Sub Note 10-15-04 8.200 AA- 1,000 1,134,120
ABN Amro Bank N.V. - Chicago Branch
* Global Bond 05-31-05 7.250 AA- 1,000 1,073,580
African Development Bank,
Sub Note 12-15-03 9.750 AA 1,000 1,234,770
Barclays North American Capital Corp.,
Gtd Cap Note 05-15-21 9.750 AA- 900 1,084,500
Den Danske Bank Aktieselskab,
* Sub Note 06-15-05 (R) 7.250 BBB+ 800 844,456
International Bank for Reconstruction and Development,
30 Yr Bond 10-15-16 8.625 AAA 3,800 4,745,136
30 Yr Bond 07-15-17 9.250 AAA 1,000 1,328,000
Landeskreditbank Baden - Wurttemberg,
Sub Note 02-01-23 7.6250 AAA 1,300 1,476,397
Midland American Capital Corp.,
Gtd Note 11-15-03 12.750 A 1,650 1,947,412
National Westminster Bank PLC - New York Branch,
Sub Note 05-01-01 9.450 AA- 1,200 1,390,776
Scotland International Finance No. 2 B.V.,
Sub Gtd Note 01-27-04 (R) 8.800 A+ 2,000 2,295,260
Sub Gtd Note 11-01-06 (R) 8.850 A+ 750 890,442
Security Pacific Corp.,
Medium Term Sub Note 05-09-01 10.360 A- 1,750 2,103,343
Sub Note 11-15-00 11.500 A- 1,000 1,229,430
Toronto Dominion Bank - New York Branch,
Sub Note 01-15-09 6.450 AA- 1,000 1,004,830
Westdeutsche Landesbank Girozentrale - New York Branch,
Sub Note 06-15-05 6.750 AA+ 1,000 1,047,980
------------
24,830,432
------------
Broadcasting (7.71%)
Cablevision Systems Corp.,
Sr Sub Deb 04-01-04 10.750% B 1,000 1,055,000
Century Communications Corp.,
Sr Sub Deb 10-15-03 11.875 B+ 1,250 1,346,875
Comcast Corp.,
* Sr Sub Deb 05-15-05 9.375 B+ 250 264,375
Continental Cablevision, Inc.,
* Sr Note 05-15-06 (R) 8.300 BB+ 625 625,000
Sr Sub Deb 06-01-07 11.000 BB- 1,210 1,352,175
Jones Intercable, Inc.,
* Sr Note 03-15-02 9.625 BB 250 268,750
* Sr Sub Deb 07-15-04 11.500 B+ 1,000 1,110,000
Le Groupe Videotron Ltee,
* Sr Note 02-15-05 10.625 BB+ 250 268,125
Lenfest Communications, Inc.,
* Sr Note 11-01-05 8.375 BB+ 500 501,875
Rogers Cablesystems Ltd.,
* Sr Sec Second Priority Note 03-15-05 10.000 BB+ 750 806,250
* Sr Sub Deb 12-01-15 11.000 BB- 250 268,750
TeleWest plc,
* Sr Deb 10-01-06 9.625 BB 450 457,875
TKR Cable I, Inc.,
Sr Deb 10-30-07 10.500 BBB- 2,000 2,381,640
Turner Broadcasting System, Inc.,
* Sr Note 07-01-13 8.375 BB+ 550 570,933
Viacom, Inc.,
* Sr Deb 01-15-16 7.625 BB+ 500 506,400
Sub Deb 07-07-06 8.000 BB- 1,000 1,017,500
------------
12,801,523
------------
Computers (0.29%)
Unisys Corp.,
Credit Sensitive Note 07-01-97 13.500 BB- 500 475,000
------------
Containers (0.07%)
Stone Container Corp.,
Sr Sub Note 10-01-04 11.500 B 115 114,425
------------
Cosmetics & Toiletries (0.47%)
Johnson & Johnson,
Deb 11-15-23 6.730 AAA 750 777,143
------------
Finance (6.83%)
Banc One Credit Card Master Trust,
Class A Asset Backed Ctf, Ser 1994-B 12-15-99 7.550 AAA 1,000 1,036,560
CIT Group Holdings, Inc. (The),
Medium Term Sr Sub Cap Note 03-15-01 9.250 A 1,000 1,145,640
Finance (continued)
Great Western Financial Corp.,
Note 02-01-02 8.600% BBB+ 1,250 1,402,163
Greentree Financial Corp.,
* Ctf Home Improv Ln Ser 1995-D CI M-2 09-15-25 6.950 AAA 650 663,604
MBNA Master Credit Card Trust,
* Ser 1995-D Asset Backed Ctf 06-15-00 6.050 AAA 1,585 1,608,775
Merrill Lynch Mortgage Investors, Inc.,
Sr/Sub Pass thru Ctf Ser 1992, Class B (Sub) 04-15-12 8.500 AA 461 479,477
Santander Financial Issuances Ltd.,
* Sub Gtd Note 04-15-05 7.875 A+ 1,000 1,103,760
Standard Credit Card Master Trust I,
* Class A Credit Card Part Ctf Ser 1995-2 01-07-00 8.625 AAA 1,250 1,287,100
* Class A Credit Card Part Ctf Ser 1993-2 10-07-04 5.950 AAA 505 500,894
* Class A Credit Card Part.Ctf Ser 1995-9 10-07-07 6.550 AAA 1,000 1,030,000
Class A Credit Card Part Ctf Ser 1994-2 04-07-08 7.250 AAA 1,000 1,077,810
------------
11,335,783
------------
Glass Products (0.51%)
Owens-Illinois, Inc.,
Sr Deb 12-01-03 11.000 BB 750 847,500
------------
Gold Mining & Processing (1.18%)
Magma Copper Co.,
Sr Sub Note 12-15-01 12.000 BB+ 1,755 1,954,631
------------
Governmental - Foreign (2.24%)
Brazil, Republic of,
* Par Bond ZL 04-15-24 4.250 NR 250 132,813
Nova Scotia, Province of,
Deb 04-01-22 8.750 A- 850 1,032,401
Ontario, Province of,
Bond 06-04-02 7.750 AA- 500 544,335
Deb 05-01-11 15.125 AA- 325 352,892
Deb 08-31-12 15.250 AA- 350 421,452
Quebec, Province of,
Deb 10-01-13 13.000 A+ 500 609,650
Saskatchewan, Province of,
* Deb 12-15-20 9.375 BBB+ 480 623,386
------------
3,716,929
------------
Governmental - U.S. (14.72%)
United States Treasury,
Bond 08-15-05 10.750% AAA 615 844,955
Bond 08-15-17 8.875 AAA 1,760 2,357,291
Bond 05-15-18 9.125 AAA 3,250 4,466,702
Bond 02-15-23 7.125 AAA 3,465 3,962,020
Note 04-15-98 7.875 AAA 1,000 1,055,940
Note 05-15-98 9.000 AAA 4,725 5,116,277
Note 11-30-99 7.750 AAA 3,825 4,144,732
* Note 11-15-04 7.875 AAA 2,145 2,482,837
------------
24,430,754
------------
Governmental - U.S. Agencies (14.14%)
Federal National Mortgage Association,
15 Yr SF Pass thru Ctf 01-25-05 8.000 AAA 1,000 1,074,680
15 Yr SF Pass thru Ctf 02-01-08 7.500 AAA 701 720,864
* 30 Yr SF Pass thru Ctf 10-01-23 7.000 AAA 889 896,104
Financing Corp.,
Bond Ser B 04-06-18 9.800 AAA 1,900 2,668,911
Government National Mortgage Association,
* 30 Yr SF Pass thru Ctf 12-15-99+ 7.000 AAA 1,605 1,624,051
* 30 Yr SF Pass thru Ctf 02-15-24 to 08-15-25 7.500 AAA 802 824,612
* 30 Yr SF Pass thru Ctf 11-15-22 to 01-15-25 + 8.000 AAA 3,750 3,907,711
* 30 Yr SF Pass thru Ctf 01-15-23 to 09-15-24 8.500 AAA 5,255 5,518,067
30 Yr SF Pass thru Ctf 04-15-21 9.000 AAA 779 829,621
* 30 Yr SF Pass thru Ctf 11-15-19 to 02-15-25 9.500 AAA 1,836 1,974,124
30 Yr SF Pass thru Ctf 11-15-20 10.000 AAA 540 594,181
Tennessee Valley Authority,
Power Bonds 1989 Ser G 11-15-29 8.625 AAA 2,500 2,834,950
------------
23,467,876
------------
Insurance (2.72%)
Equitable Life Assurance Society of the United States (The),
* Surplus Note 12-01-05 (R) 6.950 A 550 559,389
Liberty Mutual Insurance Co.,
* Surplus Note 05-04-07 (R) 8.200 A2 1,000 1,112,590
Massachusetts Mutual Life Insurance Co.,
Surplus Note 11-15-23 (R) 7.625 AA- 1,050 1,096,988
New York Life Insurance Co.,
Surplus Note 12-15-23 (R) 7.500 AA 1,000 1,025,050
Sun Canada Financial Co.,
* Sub Note 12-15-07 (R) 6.625 AA 725 731,808
------------
4,525,825
------------
Leisure & Recreation (0.10%)
Mohegan Tribal Gaming Authority,
* Sr Sec Note 11-15-02 (R) 13.500 NR 150 162,000
------------
Medical/Dental (0.45%)
Fisher Scientific International Inc.,
* Note 12-15-05 7.125% BBB 750 753,075
------------
Oil & Gas (2.70%)
Ashland Oil, Inc.,
SF Deb 10-15-17 11.125 BBB 1,000 1,131,900
Coastal Corp. (The),
Sr Deb 06-15-06 11.750 BB+ 1,000 1,063,750
Maxus Energy Corp.,
Deb 05-01-13 11.250 BB- 125 129,375
Norsk Hydro, a.s.,
Deb 06-15-23 7.750 A- 1,000 1,117,650
TransTexas Gas Corp.,
* Sr Sec Note 06-15-02 11.500 BB- 1,000 1,032,500
------------
4,475,175
------------
Paper (1.14%)
APP International Finance Co. B.V.,
* Gtd Sec Note 10-01-05 11.750 BB 400 394,000
Georgia-Pacific Corp.,
Deb 02-15-18 9.500 BBB- 450 472,680
Repap New Brunswick,
* Sr Note 04-15-05 10.625 B+ 380 372,400
S.D. Warren Co.,
Sr Sub Note 12-15-04 12.000 B+ 250 275,625
Stone Consolidated,
* Sr Note 12-15-00 10.250 B+ 350 374,500
------------
1,889,205
------------
Publishing (2.74%)
News America Holdings Inc.,
* Deb 08-10-18 8.250 BBB 1,100 1,195,656
Sr Note 10-15-99 9.125 BBB 1,000 1,105,380
Sr Note 12-15-01 12.000 BBB 750 834,698
Time Warner Inc.,
Deb 01-15-13 9.125 BBB- 1,250 1,408,688
------------
4,544,422
------------
Retail (2.03%)
Kroger Co. (The),
Lease Ctf 02-01-09 12.950 BB 1,910 2,139,200
May Department Stores Co.(The),
Deb 06-15-18 10.750 A 126 144,450
Safeway Stores, Inc.,
Lease Ctf 01-15-09 13.500 BBB- 474 546,669
Thrifty Payless Inc.,
* Sr Note 04-15-03 11.750 B 500 540,000
------------
3,370,319
------------
Steel (0.85%)
UCAR Global Enterprises Inc.,
* Sr Sub Note 01-15-05 12.000% B+ 405 467,775
Weirton Steel Corp.,
* Sr Note 03-01-98 11.500 B 300 308,250
* Sr Note 10-15-99 10.875 B 260 260,000
* Sr Note 06-01-05 10.750 B 400 377,000
------------
1,413,025
------------
Telecommunications (0.25%)
Tele-Communications Inc.,
* Sr Deb 02-01-12 9.800 BBB- 350 419,710
------------
Tobacco (0.50%)
RJR Nabisco, Inc.,
* Note 12-01-02 8.625 BBB- 650 677,098
* Note 09-15-03 7.625 BBB- 150 147,002
------------
824,100
------------
Transportation (6.40%)
Delta Air Lines, Inc.,
* Deb 05-15-21 9.750 BB 375 462,649
Equip Tr Ctf Ser A 06-01-08 10.000 BB+ 2,000 2,464,360
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 1,715 1,854,754
Scandinavian Airlines System,
Bond 07-20-99 9.125 A3 700 768,250
United Air Lines, Inc.,
Deb Ser B 05-01-14 11.210 BB 1,000 1,323,650
USAir 1990-A Pass Through Trusts,
Pass thru Ctf Ser 1990-A1 03-19-05 11.200 B+ 1,476 1,444,816
------------
10,626,329
------------
Utilities (13.04%)
BVPS II Funding Corp.,
* Collateralized Lease Bond 12-01-07 8.330 BB+ 600 600,600
* Collateralized Lease Bond 06-01-17 8.890 BB 199 204,343
CE Casecnan Water & Energy Co., Inc.,
* Sr Sec Note Ser A 11-15-05 (R) 11.450 BB 500 505,000
Cleveland Electric Illuminating Co.,
* 1st Mtg Ser 2005-B 05-15-05 9.500 BB 750 776,250
CTC Mansfield Funding Corp.,
Sec Lease Oblig 09-30-16 11.125 B+ 1,900 2,022,740
E.I.P. Refunding Corp.,
Sec Fac Bond 10-01-12 10.250 B+ 744 788,804
Utilities (continued)
First PV Funding Corp.,
* Lease Oblig Ser 1986 A 01-15-14 10.300% B+ 250 261,562
* Lease Oblig Ser 1986 B 01-15-16 10.150 B+ 1,500 1,533,750
Fitchburg Holding Corp.,
Sec Note 01-31-03 (r) 15.750 BBB 2,269 2,489,748
GG1B Funding Corp.,
* Sec Lease Oblig 01-15-11 7.430 BBB- 887 882,953
* Sec Lease Oblig 01-15-14 8.200 BBB- 500 502,787
GTE Corp.,
Deb 11-15-17 10.300 BBB+ 500 607,470
Deb 11-01-20 10.250 BBB+ 1,500 1,788,150
Hydro-Quebec (Gtd By Province of Quebec),
* Deb 02-01-03 7.375 A+ 750 800,932
Deb Ser HS 02-01-21 9.400 A+ 545 691,730
Iberdrola International B.V.,
Gtd Note 10-01-02 7.500 AA- 1,000 1,076,000
Long Island Lighting Co.,
* Deb 03-15-03 7.050 BB+ 750 737,303
* Gen Ref 05-01-21 9.750 BBB- 250 257,173
* Gen Ref Mtg 07-01-24 9.625 BBB- 750 763,470
Louisiana Power & Light Co.,
* Sec Lease Oblig Bond Ser B 01-02-17 10.670 BBB- 1,350 1,452,236
Midland Funding Corp. I,
Sr Sec Lease Oblig Ser C 07-23-02 10.330 BB- 1,476 1,534,527
Philippine Long Distance Telephone Co.,
* Note 08-01-05 9.875 BB 255 270,619
Tenaga Nasional Berhad,
Note 06-15-04 (R) 7.875 A+ 1,000 1,098,850
------------
21,646,997
------------
TOTAL PUBLICLY TRADED BONDS AND DIRECT PLACEMENT SECURITY
( Cost $150,632,863) (96.40%) 160,005,748
-------- ------------
<CAPTION>
SHORT-TERM INVESTMENTS
Joint Repurchase Agreement (4.56%)
<S> <C> <C> <C>
Investment in a joint repurchase agreement
transaction with SBC Capital Markets, Inc.-
Dated 12-29-95, due 01-02-96
(secured by U.S. Treasury Bonds, 7.500% due 11-15-16
and 10.375% due 11-15-12) - Note A 5.90% $7,562 $ 7,562,000
------------
Corporate Savings Account (0.00%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 5.00% 303
------------
TOTAL SHORT-TERM INVESTMENTS (4.56%) 7,562,303
--------- -------------
TOTAL INVESTMENTS (100.96%) $167,568,051
========= ============
NOTES TO THE SCHEDULE OF INVESTMENTS
<FN>
(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:
<CAPTION>
MARKET MARKET
VALUE AS A VALUE
PERCENTAGE AS OF
ACQUISITION ACQUISITION OF FUND'S DECEMBER 31,
DATE COST NET ASSETS 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Fitchburg Holding Corp.,
Sec. Note, 15.75%,
01-31-03 02-10-81 2,293,925 1.50% $2,489,748
<FN>
(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. Rule144A securities amounted to $11,550,403 as of December 31, 1995. See Note A of
the Notes to Financial Statements for valuation policy.
+ A portion of these securities having an aggregated value of $4,093,283 or 2.47% 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 securities are 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 $5,116,277 of U.S. Treasury Note 9.000%, 05-15-98
has been segregated to cover the when issued commitments.
* Securities, other than short-term investments, newly added to the portfolio during the year ended
December 31, 1995.
** Credit ratings are rated by Moody's Investor Services or John Hancock Advisers, Inc. where Standard
and Poors ratings are not available and are unaudited.
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.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
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 $744,673 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 $158,569
attributable to security transactions occurring after October 31, 1995
are treated as arising on the first day (January 1, 1996) 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 The Fund may buy and sell financial futures
contracts to hedge against the effects of fluctuations in interest
rates, currency exchange rates and other market conditions. 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. In addition, the Fund could be prevented from opening, or
realizing the benefits of closing out, futures positions because of
position limits or limits on daily price fluctuation imposed by an
exchange. 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.
At December 31, 1995, there were no open positions in 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.
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 for 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 of securities, other than obligations of the U.S. government
and its agencies and short-term securities, during the periods ended
December 31, 1995 and 1994 aggregated $61,794,336 and $70,675,035
respectively. Proceeds from sales of securities, other than obligations
of the U.S. government and its agencies and short-term securities,
during the periods ended December 31, 1995 and 1994 aggregated
$54,991,311 and $79,431,886, respectively. Purchases and proceeds from
sales of obligations of the U.S. government and its agencies aggregated
$95,561,787 and $99,968,552, respectively, in 1995. Purchases and
proceeds from sales of obligations of the U.S. government and its
agencies aggregated $59,823,904 and $49,825,271, respectively, in 1994.
The cost of investments owned at December 31, 1995 and 1994 (including
the short-term investments) for Federal income tax purposes was
$158,420,077 and $151,911,753, respectively. Gross unrealized
appreciation and depreciation of investment aggregated $10,109,363 and
$961,995, respectively, resulting in net unrealized appreciation of
$9,147,974 at December 31, 1995, and $1,553,928 and $8,568,942,
respectively, resulting in net unrealized depreciation of $7,015,014 at
December 31, 1994.
NOTE D -- RECLASSIFICATION OF CAPITAL ACCOUNTS
During the year ended December 31, 1995, the Fund has reclassified
$1,569 from accumulated net realized loss on investments to
undistributed net investment income. This represents the cumulative
amount necessary to report these balances on a tax basis, excluding
certain temporary differences, as of December 31, 1995. Additional
adjustments may be needed in subsequent reporting periods. These
reclassifications, which have no impact on the net asset value of the
Fund, are primariy attributable to certain differences in the
computation of distributable income and capital gains under federal tax
rules versus generally accepted accounting principles.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
To the Trustees and Shareholders of
John Hancock Investors Trust
We have audited the accompanying statement of assets and liabilities of
John Hancock Investors Trust (the "Trust'), as of December 31, 1995 and
1994, including the schedule of investments as of December 31, 1995, and
the related statements of operations and changes in net assets for each
of the two years in the period then ended, and the financial highlights
for each of the five years in the period then ended. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. We
conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included
confirmation of securities owned as of December 31, 1995 and 1994, by
correspondence with the custodian and brokers or other appropriate audit
procedures when replies from brokers were not received. An audit also
includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the
financial position of John Hancock Investors Trust at December 31, 1995
and 1994, the results of its operations and changes in its net assets
for each of the two years in the period then ended and financial
highlights for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.
/S/ERNST & YOUNG LLP
Boston, Massachusetts
February 9, 1996
<TABLE>
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
<CAPTION>
Unaudited quarterly results of operations for each of the two years in
the period ended December 31, 1995 are as follows:
1995
------------------
THREE MONTHS ENDED
------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
--------- ------- ------------ -----------
(000's OMITTED EXCEPT PER SHARE DATA)
-------------------------------------
<S> <C> <C> <C> <C>
Net investment income $3,141 $3,169 $3,167 $3,147
Dividends from net investment income 3,141 3,149 3,158 3,167
Net realized and unrealized gain
on investments
and financial futures contracts 5,013 7,063 64 4,211
Per share of beneficial interest:
Net investment income 0.42 0.42 0.42 0.42
Dividends 0.42 0.42 0.42 0.42
Net asset value at end of quarter $20.45 $21.39 $21.40 $21.95
<CAPTION>
1994
------------------
THREE MONTHS ENDED
------------------
MARCH 31 JUNE 30 SEPTEMBER 30 DECEMBER 31
--------- ------- ------------ -----------
(000's OMITTED EXCEPT PER SHARE DATA)
-------------------------------------
<S> <C> <C> <C> <C>
Net investment income $3,107 $3,147 $3,129 $3,147
Dividends from net investment income 3,091 3,113 3,122 3,186
Net realized and unrealized loss
on investments
and financial futures contracts ( 7,880) ( 5,266) ( 2,045) ( 2,103)
Per share of beneficial interest:
Net investment income 0.42 0.43 0.42 0.41
Dividends 0.42 0.42 0.42 0.42
Net asset value at end of quarter $21.06 $20.35 $20.07 $19.78
<CAPTION>
DIVIDENDS AND DISTRIBUTIONS During 1995, dividends from net investment
income totaling $1.6800 per share were paid to shareholders. The dates
of payment and the amounts per share were as follows:
<S> <C>
Income
Payment Date Dividend
- ---------------------- ----------------
March 31, 1995 $0.4200
June 30, 1995 0.4200
September 29, 1995 0.4200
December 28, 1995 0.4200
</TABLE>
TAX INFORMATION NOTICE (UNAUDITED)
For Federal Income Tax purposes, the following information is furnished
with respect to the distributions of the Fund during its fiscal year
ended December 31, 1995. Corporate Dividends Received Deduction: None of
the 1995 dividends qualify for the corporate dividends received
deduction.
U.S. Government Obligations: Income from these investments may be exempt
from certain state and local taxes. The percentage of assets invested in
U.S. Treasury bonds, bills and notes was 14.33% at the end of the year.
The percentage of annual income derived form U.S. Treasury bonds, bills
and notes was 15.92%. The percentage of assets invested in obligations
of other U.S. government agencies (excluding securities issued by
Federal National Mortgage Association and Government National Mortgage
Association) at year end was 3.23%. The percentage of income derived
from these investments was 2.86%. For specific information on exemption
provisions in your state, consult your local state tax office or your
tax adviser.
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 33 1/3%
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 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
Shareholder Meeting
On April 27, 1995, the Annual Meeting of John Hancock Investors Trust
(the "Trust") was held to elect Trustees and to ratify the action to the
Trustees in selecting independent auditors for the Fund.
The shareholders elected the following Trustees to serve until their
respective successors are duly elected and qualified, with the votes
tabulated as follows:
WITHHELD
NAME OF TRUSTEE FOR AUTHORITY
- --------------- --------- ---------
Edward J. Boudreau, Jr. 5,285,005 87,181
Dennis S. Aronowitz 5,282,535 89,651
Richard P. Chapman, Jr. 5,283,364 88,822
William J. Cosgrove 5,284,795 87,392
Gail D. Fosler 5,261,244 110,943
Bayard Henry 5,287,575 84,612
Richard S. Scipione 5,280,725 91,462
Edward J. Spellman 5,288,595 83,592
The shareholders also voted to ratify the Trustees' selection of Ernst &
Young LLP as independent auditors for the Trust for the fiscal year
ending December 31, 1995, with the votes as follows: 5,266,346 FOR,
30,657 AGAINST and 75,183 ABSTAINING..
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John Hancock Funds
A Global Investment Management Firm
101 Huntington Avenue, Boston MA 02119-7603
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