---------------------------
The latest report from your
Fund's management team
---------------------------
SEMIANNUAL REPORT
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[GRAPHIC OMITTED]
Investors
Trust
JUNE 30, 2000
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
<PAGE>
-------------------------------------------
TRUSTEES
Dennis S. Aronowitz*
Stephen L. Brown
Richard P. Chapman, Jr.
William J. Cosgrove*
Leland O. Erdahl
Richard A. Farrell
Maureen R. Ford
Gail D. Fosler
William F. Glavin
Dr. John A. Moore
Patti McGill Peterson
John W. Pratt*
Richard S. Scipione
*Members of the Audit Committee
OFFICERS
Stephen L. Brown
Chairman
Maureen R. Ford
Vice Chairman, President and
Chief Executive Officer
Osbert M. Hood
Executive Vice President and
Chief Financial Officer
William L. Braman
Executive Vice President and
Chief Investment Officer
Susan S. Newton
Vice President and Secretary
James J. Stokowski
Vice President and Treasurer
Thomas H. Connors
Vice President and Compliance Officer
CUSTODIAN
Investors Bank & Trust Company
200 Clarendon Street
Boston, Massachusetts 02116
TRANSFER AGENT and REGISTRAR
State Street Bank & 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 LLP
60 State Street
Boston, Massachusetts 02109-1803
Listed New York Stock Exchange Symbol: JHI
For Shareholder Assistance
Refer to Page 24
---------------------------------------------
===================================CEO CORNER===================================
DEAR FELLOW SHAREHOLDERS:
After four years of spectacular returns, the stock market succumbed in the first
six months of 2000 largely to the pressures of rising interest rates, as the
Federal Reserve kept up its campaign to fight inflation. The red-hot economy has
begun to show signs of slowing, and investors are no longer blind to the real
possibility that rising rates could slow corporate profits. The result was
flat-to-negative results for the three main stock-market indexes through June.
Bonds also suffered during this period, since their prices generally move in the
opposite direction of rates.
But there was good news, too. The Treasury market, where shrinking supply
bolstered prices thanks to the government's efforts to retire some of its debt,
performed well. And the Fed appears closer to the end of its tightening cycle,
which will be a strong positive if it can slow the economy to a level that
supports corporate earnings growth but keeps inflation at bay. The picture on
the global economy is brighter and technology continues to dominate as the
driver of ever-improving corporate productivity.
--------------------------------------------------------------------------------
[A 1" x 1" photo of Maureen R. Ford, Vice Chairman, President and Chief
Executive Officer, flush right next to second paragraph.]
--------------------------------------------------------------------------------
No matter what happens next in the financial markets, these past several months
only served to reinforce some of the important lessons for investors: Diversify,
invest in line with your tolerance for risk and maintain a long-term
perspective.
Since not all parts of your portfolio will perform equally well all the time, it
is important to allocate your assets among different types of investments and
funds that target a variety of stock-and bond-market segments. This strategy,
executed under the guidance of a seasoned investment professional, could provide
you with a better chance of both realizing longer-term results and weathering
the market's changing conditions.
Sincerely,
/s/Maureen R. Ford
------------------
MAUREEN R. FORD, VICE CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
2
<PAGE>
================================================================================
By James K. Ho, CFA, Portfolio Manager
John Hancock
Investors Trust
Rising rates and an uncertain six-month environment for bonds
-------------------------------------------------------------
Bonds kicked off the millennium on somewhat shaky ground. Investment-grade
corporate and high-yield debt securities came into the year with relative
strength, as investors felt confident about the economy's health and corporate
earnings growth. But that sentiment changed to concern as it became apparent
that the Federal Reserve Board was committed to further monetary tightening to
slow down the economy. Investors quickly began to do the math. If the economy
slowed, corporate earnings could decelerate and the creditworthiness of some
corporate issuers might come into question. Credit spreads (the difference in
yield between bonds of different credit quality) widened as a result. When this
happens, the prices of more credit-sensitive issues decline while their yields
rise.
Coinciding with the Fed's three interest-rate increases was the U.S.
Treasury's intent to buy back roughly $30 million in securities, mainly
longer-term debt. This put further pressure on credit spreads through mid-May,
as the bellwether 30-year bond rallied
--------------------------------------------------------------------------------
[A 1 1/2" x 2 1/2" photo at bottom middle of page of John Hancock Investors
Trust. Caption below reads "Fund management team members (l-r): Ben Matthews and
Jim Ho."]
--------------------------------------------------------------------------------
and the Treasury yield curve inverted - a scenario not experienced in the U.S.
bond market since 1990. Yields on corporate debt reached levels last seen in the
1990 recession. Mortgage-backed and asset-backed securities also suffered
downturns in the wake of the Clinton Administration's support for eliminating
government financial backing to Fannie Mae and Freddie Mac.
Signs of improvement
By late May, however, the investment climate showed signs of improvement. Recent
leading economic indicators, such as housing sales and employment growth,
suggested that economic growth was moderating. Should this be the case,
investors surmised, the Fed might be near the end of raising interest rates for
awhile. Indeed, the Fed was satisfied enough with the effects of its tightening
thus far on the economy that it took no action at its June meeting. By period's
end, investors had begun returning to the corporate arena and other spread
securities, such as mortgage-
"Bonds kicked off the millennium on somewhat shaky ground."
3
<PAGE>
================================================================================
John Hancock Funds - Investors Trust
"...duration management...was critical in weathering the market's challenges."
--------------------------------------------------------------------------------
[Table at top left hand column entitled "Top Five Bond Sectors." The first
listing is U.S. Government & Agencies 35%, the second is Financials 20%, the
third Utilities 12%, the fourth Transportation 5% and the fifth Media 4%. A note
below the table reads "As a percentage of net assets on June 30, 2000."]
--------------------------------------------------------------------------------
backed issues. Bond prices started to rise and the environment grew more
conducive to new corporate issues coming to market.
Fund performance
For the six months ending June 30, 2000, John Hancock Investors Trust produced a
gain of 3.94% at net asset value. This compares with the 3.00% return at net
asset value of the average open-end corporate debt A-rated fund, according to
Lipper, Inc.
Duration strategy
Throughout the six months, duration management - manipulating the Fund's
sensitivity to interest rate changes - was critical in weathering the market's
challenges. We began 2000 on a defensive note, keeping the Fund's average
duration slightly shorter than its benchmark. When interest rates are rising, a
shorter duration tends to help buoy a portfolio's share price. Conversely, a
longer duration can help bolster price
--------------------------------------------------------------------------------
[Table at bottom of left hand column entitled "Scorecard". The header for the
left column is "Investment" and the header for the right column is "Recent
Performance...and What's Behind the Numbers". The first listing is Household
Finance followed by a sideways arrow with the phrase "Rising interest rates."
The second listing is Verio followed by an up arrow with the phrase "Merger with
NTT Japan and a credit upgrade." The third listing is SFX Entertainment followed
by an up arrow with the phrase "Proposed acquisition by Clear Channel; potential
upgrade." A note below the table reads "See `Schedule of Investments.'
Investment holdings are subject to change."]
--------------------------------------------------------------------------------
appreciation possibilities when rates are trending downward. Not long into the
year, however, we began extending duration so that it now stands at neutral.
Yield curve positioning
We use the Fund's allocation to U.S. Treasury securities not only to take
advantage of market events in this sector, but also to position holdings for
possible changes in the yield curve. (The yield curve is a plotting of yields
across the maturity spectrum.) At the period's outset, we barbelled the Fund's
Treasury holdings, clustering assets in both long-term bonds and short-term
issues in anticipation of a continued flattening in the yield curve due to Fed
rate hikes. The Fund's exposure to long-term Treasury securities contributed
significantly to performance when the yield curve not only flattened but also
inverted because of the buyback program. The long bond's price appreciated
significantly, benefiting the Fund's long-term Treasury holdings.
In May we began to unwind the barbell and refocus our attention on the
middle part of the yield curve, bolstering the Fund's stake in intermediate-term
issues. We did so believing that the yield curve was about as inverted as it was
going to get and that the next phase would be one of steepening as the Fed winds
down on raising rates. Our emphasis recently has been securities with four- to
eight-year maturities.
Spread tactics
The bulk of the Fund's net assets remain in what we term "spread securities."
These are mainly corporate bonds, both investment-grade and high-yield - though
we have pared the portfolio's weighting in the latter. They also include
mortgage-backed and agency issues in the government arena. Emerging-market bonds
fall into
4
<PAGE>
================================================================================
John Hancock Funds - Investors Trust
--------------------------------------------------------------------------------
[Bar chart at top of left hand column with heading "Fund Performance". Under the
heading is a note that reads "For the six months ended June 30, 2000." The chart
is scaled in increments of 1% with 0% at the bottom and 4% at the top. The first
bar represents the 3.94% total return for John Hancock Investors Trust. The
second bar represents the 3.00% total return for Average open-end corporate debt
A-rated fund. A note below the chart 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, Inc."]
--------------------------------------------------------------------------------
this category, too, but we maintained extremely limited exposure due to these
markets' illiquid and volatile nature.
Portfolio assets are diversified across industries, with in-depth
credit analysis driving individual security selection. The turbulent investment
environment notwithstanding, many telecom, media/cable and wireless holdings
performed well for the Fund. Continental Cablevision, Metromedia Fiber Network,
EchoStar, Verio, Nextel Communications, Clearnet Communications, SFX
Entertainment and VoiceStream Wireless were some standouts. The Fund's utility
holdings have performed in line with expectations as well. With the possibility
of an economic slowdown on the horizon, investors tend to gravitate to the
relative stability of such recession-resistant players as Niagara Mohawk Power
and Midland Funding. Energy-related holdings also enjoyed a good run, including
Apache Finance Canada, Occidental Petroleum and Tosco Corp. In general, finance,
retail and health-care issues performed under pressure.
During the period, we upgraded the Fund's credit-sensitive exposure.
That is, wherever possible we moved out of longer-term corporate bonds and into
shorter-term issues of the same name, such as Lockheed Martin, CalEnergy and
General Motors. As credit spreads widened and yields rose more in longer-term
securities, this shift in emphasis allowed the Fund to participate in the
prospects of companies we liked without having excessive sensitivity to rising
yields. We also boosted the Fund's stake in AAA-rated mortgage-backed issues and
reduced exposure to 30-year bank securities, selling such names as First Union,
Liberty Mutual and Fairfax Financial prior to the worst of their downturns.
Further uncertainty a possibility
In the months ahead, the market could move in either direction. We are
simultaneously optimistic and cautious, recognizing there exists the potential
for stronger economic growth, which could lead to further interest-rate hikes
later this year. For the time being, we believe the worst of the interest-rate
volatility has been priced into the market, and we shall therefore look to
extend duration a bit further should the opportunity arise. With corporate bond
prices at such attractive levels, we are now looking to selectively move back
into longer-term corporate debt in anticipation of credit spread narrowing.
--------------------------------------------------------------------------------
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.
"...we believe the worst of the interest-rate volatility has been priced into
the market..."
5
<PAGE>
==============================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 June 30, 2000. You'll also
find the net asset value per share as of that date.
Statement of Assets and Liabilities
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
Assets:
Investments at value - Note C:
Publicly traded bonds and direct placement security
(cost - $146,466,566) .................................... $145,815,021
Preferred stocks and warrants (cost - $1,610,014) ......... 1,536,757
Commercial paper (cost - $6,992,308) ...................... 6,992,308
Joint repurchase agreement (cost - $3,926,000) ............ 3,926,000
Corporate savings account ................................. 768
--------------
158,270,854
Receivable for investments sold ............................ 5,757,089
Interest receivable ........................................ 2,643,459
Dividend receivable ........................................ 20,332
Other assets ............................................... 12,995
--------------
Total Assets .................. 166,704,729
------------------------------------------------
Liabilities:
Payable for investments purchased .......................... 8,130,936
Dividend payable ........................................... 299,961
Payable to John Hancock Advisers, Inc.
and affiliates - Note B ................................... 262,901
Accounts payable and accrued expenses ...................... 26,597
--------------
Total Liabilities ............. 8,720,395
------------------------------------------------
Net Assets:
Capital paid-in ............................................ 164,201,971
Accumulated net realized loss on investments and
financial futures contracts ............................... (5,545,824)
Net unrealized depreciation of investments ................. (724,802)
Undistributed net investment income ........................ 52,989
--------------
Net Assets .................... $157,984,334
================================================
Net Asset Value Per Share:
(Based on 7,873,938 shares of beneficial
interest outstanding - 20 million shares
authorized with no par value) ............................. $20.06
=============================================================================
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.
Statement of Operations
Six months ended June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
Investment Income:
Interest ................................................... $6,152,669
Dividends .................................................. 86,493
--------------
6,239,162
--------------
Expenses:
Investment management fee - Note B ........................ 502,693
Transfer agent fee - Note B ............................... 51,308
Custodian fee ............................................. 29,514
Printing .................................................. 18,129
Auditing fee .............................................. 15,367
Accounting and legal services fee - Note B ................ 14,245
New York Stock Exchange fee ............................... 7,100
Miscellaneous ............................................. 4,179
Trustees' fees ............................................ 3,929
Legal fees ................................................ 836
--------------
Total Expenses ................ 647,300
------------------------------------------------
Net Investment Income ......... 5,591,862
------------------------------------------------
Realized and Unrealized Gain (Loss) on Investments
and Financial Futures Contracts:
Net realized loss on investments sold ...................... (2,456,781)
Net realized loss on financial futures contracts ........... (40,283)
Change in net unrealized appreciation/depreciation
of investments ............................................ 2,189,001
Change in net unrealized appreciation/depreciation
of financial futures contracts ............................ (32,888)
--------------
Net Realized and Unrealized
Loss on Investments and
Financial Futures Contracts ... (340,951)
------------------------------------------------
Net Increase in Net Assets
Resulting from Operations ..... $5,250,911
================================================
SEE NOTES TO FINANCIAL STATEMENTS.
6
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
Statement of Changes in Net Assets
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, JUNE 30, 2000
1999 (UNAUDITED)
------------------- --------------------
<S> <C> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment income ............................................................. $11,453,432 $5,591,862
Net realized loss on investments sold and financial futures contracts ............. (2,031,488) (2,497,064)
Change in net unrealized appreciation/depreciation of investments and
financial futures contracts ...................................................... (10,762,239) 2,156,113
--------------- ---------------
Net Increase (Decrease) in Net Assets Resulting from Operations ................. (1,340,295) 5,250,911
--------------- ---------------
Distributions to Shareholders:
Dividends from net investment income ($1.4675 and $0.7100 per share, respectively) (11,458,690) (5,583,652)
--------------- ---------------
From Fund Share Transactions - Net : *
(Market value of shares issued in reinvestment of distributions) .................. 1,306,175 314,410
--------------- ---------------
Net Assets:
Beginning of period ............................................................... 169,495,475 158,002,665
---------------- ---------------
End of period (including undistributed net investment income
of $44,779 and $52,989, respectively) ............................................ $158,002,665 $157,984,334
================ ===============
* Analysis of Fund Share Transactions:
Shares outstanding, beginning of period ........................................... 7,782,963 7,855,417
Shares issued to shareholders in reinvestment of distributions .................... 72,454 18,521
---------------- ---------------
Shares outstanding, end of period ................................................. 7,855,417 7,873,938
================ ===============
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 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.
7
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout each
period indicated, investment returns, key ratios and supplemental data are
listed as follows:
--------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED
------------------------------------------------------------------ JUNE 30, 2000
1995 1996 1997 1998 1999 (UNAUDITED)
------------ ------------ ------------ ------------ ---------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Per Share Operating Performance
Net Asset Value, Beginning of Period ......... $19.78 $21.95 $21.23 $21.70 $21.78 $20.11
---------- --------- --------- --------- --------- ---------
Net Investment Income ........................ 1.68 1.63 1.59 1.52 1.47 0.71
Net Realized and Unrealized Gain (Loss)
on Investments and Financial Futures Contracts 2.17 (0.72) 0.47 0.08 (1.67) (0.05)
---------- --------- --------- --------- --------- ---------
Total from Investment Operations ............ 3.85 0.91 2.06 1.60 (0.20) 0.66
---------- --------- --------- --------- --------- ---------
Less Distributions:
Dividends from Net Investment Income ......... (1.68) (1.63) (1.59) (1.52) (1.47) (0.71)
---------- --------- --------- --------- --------- ---------
Net Asset Value, End of Period ............... $21.95 $21.23 $21.70 $21.78 $20.11 $20.06
========== ========= ========= ========= ========= =========
Per Share Market Value, End of Period ........ $20.500 $19.500 $22.063 $21.938 $16.563 $17.375
Total Investment Return at Market Value(1) ... 24.33% 3.13% 22.12% 6.66% (18.16%) 9.31%(2)
Ratios and Supplemental Data
Net Assets, End of Period (000s omitted) ..... $165,974 $162,223 $167,058 $169,495 $158,003 $157,984
Ratio of Expenses to Average Net Assets ...... 0.85% 0.85% 0.84% 0.82% 0.81% 0.82%(3)
Ratio of Net Investment Income to
Average Net Assets .......................... 7.93% 7.65% 7.44% 6.92% 6.98% 7.11%(3)
Portfolio Turnover Rate ...................... 102% 118% 141% 239% 183% 120%
(1) Assumes dividend reinvestment.
(2) Not annualized.
(3) Annualized.
The Financial Highlights summarizes the impact of the following factors on a
single share for each period indicated: net investment income, gains (losses),
distributions 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.
8
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
Schedule of Investments
June 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
The Schedule of Investments is a complete list of all securities owned by
Investors Trust on June 30, 2000. It's divided into three main categories:
publicly traded bonds and direct placement security, preferred stocks and
warrants, 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 CREDIT (000s MARKET
ISSUER, DESCRIPTION RATE RATING* OMITTED) VALUE
------------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
PUBLICLY TRADED BONDS AND DIRECT PLACEMENT SECURITY
Aerospace (1.12%)
Jet Equipment Trust,
Equipment Trust Cert Ser 95B2 08-15-14 (R).............. 10.910% BBB $550 $557,480
Lockheed Martin Corp.,
Bond 12-01-29 .......................................... 8.500 BBB- 350 353,423
Note 12-01-05 .......................................... 7.950 BBB- 355 357,023
Raytheon Co.,
Note 03-01-03 (R) ...................................... 7.900 BBB- 500 502,985
----------
1,770,911
----------
Automobile/Trucks (0.93%)
Chrysler Corp.,
Deb 03-01-27 ........................................... 7.450 A+ 355 340,633
DaimlerChrysler North America Holding Corp.,
Note 01-20-05 .......................................... 7.400 A+ 480 476,203
ERAC USA Finance Co.,
Note 02-15-05 (R) ...................................... 6.625 BBB+ 690 647,020
----------
1,463,856
----------
Banks (10.08%)
Abbey National First Capital, B.V.,
Sub Note (United Kingdom) 10-15-04 (Y) ................. 8.200 AA- 1,000 1,024,390
African Development Bank,
Sub Note (Supranational) 12-15-03 (Y) .................. 9.750 AA- 1,000 1,082,950
Bank of Boston,
Sub Note 12-01-05 ...................................... 6.625 A- 485 458,970
Bank of New York,
Cap Security 12-01-26 (R) .............................. 7.780 A- 620 571,113
Barclays North American Capital Corp.,
Gtd Cap Note 05-15-21 .................................. 9.750 AA- 900 948,681
International Bank for Reconstruction and Development,
30 Yr Bond (Supranational) 10-15-16 (Y) ................ 8.625 AAA 3,800 4,267,400
National Westminster Bank Plc - New York Branch,
Sub Note 05-01-01 ...................................... 9.450 A+ 1,200 1,221,684
NB Capital Trust IV,
Gtd Cap Security 04-15-27 .............................. 8.250 A- 320 297,302
Royal Bank of Scotland Group Plc,
Bond (United Kingdom) 03-31-05 (Y) ..................... 8.817 A- 360 370,876
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
PAR VALUE
INTEREST CREDIT (000s MARKET
ISSUER, DESCRIPTION RATE RATING* OMITTED) VALUE
------------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Banks (continued)
Scotland International Finance No. 2, B.V.,
Gtd Sub Note (United Kingdom) 01-27-04 (R) (Y) ......... 8.800% A $2,000 $2,082,460
Gtd Sub Note (United Kingdom) 11-01-06 (R) (Y) ......... 8.850 A+ 750 793,530
Security Pacific Corp.,
Medium Term Sub Note 05-09-01 .......................... 10.360 A 1,750 1,795,587
Sub Note 11-15-00 ...................................... 11.500 A 1,000 1,015,630
----------
15,930,573
----------
Beverages (0.41%)
Canandaigua Brands, Inc.,
Sr Sub Note Ser C 12-15-03 ............................. 8.750 B+ 445 427,200
Seagram (Joseph E.) & Sons, Inc.,
Sr Deb 12-15-18 ........................................ 7.500 BBB- 225 215,231
----------
642,431
----------
Broker Services (0.20%)
Goldman Sachs Group, Inc.,
Medium Term Note Ser B 10-01-09 ........................ 7.350 A+ 325 312,250
----------
Chemicals (0.45%)
Akzo Nobel, Inc.,
Bond 11-15-03 (R) ...................................... 6.000 A 310 294,035
Equistar Chemicals L.P.,
Note 02-15-04 .......................................... 8.500 BBB- 425 416,500
----------
710,535
----------
Computers (0.86%)
Ceridian Corp.,
Sr Note 06-01-04 ....................................... 7.250 BBB 410 393,489
Exodus Communications, Inc.,
Sr Note 12-15-09 ....................................... 10.750 B- 295 284,675
PSINet, Inc.,
Sr Note 11-01-08 ....................................... 11.500 B- 185 173,900
Verio, Inc.,
Sr Note 04-01-05 ....................................... 10.375 B- 480 511,200
----------
1,363,264
----------
Electronics (0.05%)
Amkor Technologies, Inc.,
Sr Sub Note 05-01-09 .................................... 10.500 B 75 74,813
----------
Energy (0.68%)
CalEnergy Co., Inc.,
Sr Bond 09-15-28 ....................................... 8.480 BBB- 410 413,346
Sr Note 09-15-05 ....................................... 7.230 BBB- 270 262,562
P&L Coal Holdings Corp.,
Sr Sub Note Ser B 05-15-08 ............................. 9.625 B 435 402,375
----------
1,078,283
----------
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
PAR VALUE
INTEREST CREDIT (000s MARKET
ISSUER, DESCRIPTION RATE RATING* OMITTED) VALUE
------------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Finance (2.38%)
Bombardier Capital, Inc.,
Note 01-15-02 (R) ...................................... 6.000% A- $500 $487,500
Ford Motor Credit Co.,
Note 04-28-03 .......................................... 6.125 A 605 582,930
Note 10-28-09 .......................................... 7.375 A 420 406,253
General Motors Acceptance Corp.,
Note 01-19-10 .......................................... 7.750 A 410 407,601
Household Finance Corp.,
Note 11-01-02 .......................................... 5.875 A 750 720,592
Note 02-01-09 .......................................... 5.875 A 350 304,395
Marlin Water Trust & Marlin Water Capital Corp.,
Sr Sec Note 12-15-01 (R) ............................... 7.090 BBB 485 479,241
Yanacocha Receivables Master Trust,
Pass Thru Cert Ser 1997-A 06-15-04 (R) ................. 8.400 BBB- 403 366,320
----------
3,754,832
----------
Government - Foreign (1.20%)
Nova Scotia, Province of,
Deb (Canada) 04-01-22 (Y) .............................. 8.750 A- 750 830,475
Ontario, Province of,
Bond (Canada) 06-04-02 (Y) ............................. 7.750 AA- 500 506,065
Saskatchewan, Province of,
Bond (Canada) 12-15-20 (Y) ............................. 9.375 A 480 567,086
----------
1,903,626
----------
Government - U.S. (19.34%)
United States Treasury,
Bond 08-15-17 .......................................... 8.875 AAA 3,381 4,309,727
Bond 05-15-18 .......................................... 9.125 AAA 3,250 4,249,375
Bond 02-15-23 .......................................... 7.125 AAA 7,916 8,797,922
Note 05-15-02 .......................................... 7.500 AAA 1,015 1,033,717
Note 08-15-03 .......................................... 5.750 AAA 193 189,713
Note 02-15-05 .......................................... 7.500 AAA 2,379 2,493,477
Note 07-15-06 .......................................... 7.000 AAA 2,792 2,893,210
Note 05-15-08 .......................................... 5.625 AAA 6,825 6,584,009
----------
30,551,150
----------
Government - U.S. Agencies (15.33%)
Fannie Mae,
Benchmark Bond 02-15-05 ................................ 7.125 AAA 1,925 1,932,815
Benchmark Note 09-15-09 ................................ 6.625 AAA 4,795 4,632,402
Benchmark Note 01-15-30 ................................ 7.125 AAA 2,255 2,271,552
Federal Home Loan Mortgage Corp.,
20 Yr Pass Thru Ctf 01-01-16 ........................... 11.250 AAA 190 204,823
Federal National Mortgage Assn.,
15 Yr Pass Thru Ctf 07-01-15 + ......................... 7.000 AAA 410 402,185
15 Yr SF Pass Thru Ctf 02-01-08 ........................ 7.500 AAA 169 169,452
15 Yr SF Pass Thru Ctf 09-01-10 ........................ 7.000 AAA 424 418,447
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
PAR VALUE
INTEREST CREDIT (000s MARKET
ISSUER, DESCRIPTION RATE RATING* OMITTED) VALUE
------------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Government - U.S. Agencies (continued)
Federal National Mortgage Assn. (continued),
15 Yr SF Pass Thru Ctf 10-01-12 ........................ 7.000% AAA $106 $104,604
15 Yr SF Pass Thru Ctf 12-01-12 ........................ 6.500 AAA 933 901,266
30 Yr Pass Thru Ctf 11-01-28 ........................... 6.500 AAA 259 244,322
30 Yr SF Pass Thru Ctf 10-01-23 ........................ 7.000 AAA 458 444,853
Pass Thru Ctf Ser 1997-M8 Class A-1 01-25-22 ........... 6.940 AAA 333 328,983
Government National Mortgage Assn.,
30 Yr Pass Thru Ctf 01-15-29 to 07-15-29 + ............. 6.500 AAA 4,115 3,905,381
30 Yr SF Pass Thru Ctf 02-15-28 to 07-15-30 + .......... 7.000 AAA 5,480 5,326,713
30 Yr SF Pass Thru Ctf 09-15-29 to 12-15-29 ............ 7.500 AAA 2,242 2,226,267
30 Yr SF Pass Thru Ctf 08-15-27 to 07-15-29 + .......... 8.000 AAA 166 168,160
30 Yr SF Pass Thru Ctf 04-15-21 ........................ 9.000 AAA 186 192,956
30 Yr SF Pass Thru Ctf 11-15-19 to 02-15-25 ............ 9.500 AAA 280 294,111
30 Yr SF Pass Thru Ctf 11-15-20 ........................ 10.000 AAA 45 47,670
----------
24,216,962
----------
Insurance (2.10%)
Equitable Life Assurance Society USA,
Surplus Note 12-01-05 (R) .............................. 6.950 A+ 550 539,841
Massachusetts Mutual Life Insurance Co.,
Surplus Note 11-15-23 (R) .............................. 7.625 AA 470 443,069
New York Life Insurance Co.,
Surplus Note 12-15-23 (R) .............................. 7.500 AA- 1,500 1,304,550
Sun Canada Financial Co.,
Sub Note 12-15-07 (R) .................................. 6.625 AA- 725 677,150
URC Holdings Corp.,
Sr Note 06-30-06 (R) ................................... 7.875 A- 340 346,565
----------
3,311,175
----------
Leasing Companies (0.13%)
United Rentals (North America), Inc.,
Sr Sub Note Ser B 04-01-09 ............................. 9.000 BB- 230 203,550
----------
Leisure (1.00%)
Harrah's Operating Co., Inc.,
Sr Note 01-15-09 ....................................... 7.500 BBB- 290 269,097
HMH Properties, Inc.,
Sr Note Ser A 08-01-05 ................................. 7.875 BB 400 378,000
Premier Parks, Inc.,
Sr Note 06-15-07 ....................................... 9.750 B- 240 231,000
SFX Entertainment, Inc.,
Sr Sub Note 12-01-08 ................................... 9.125 B- 490 494,900
Waterford Gaming LLC,
Sr Note 03-15-10 (R) ................................... 9.500 B+ 216 209,520
----------
1,582,517
----------
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
PAR VALUE
INTEREST CREDIT (000s MARKET
ISSUER, DESCRIPTION RATE RATING* OMITTED) VALUE
------------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Media (4.42%)
Adelphia Communications Corp.,
Sr Note 11-15-09 ....................................... 9.375% B+ $145 $134,488
Sr Note Ser B 10-01-02 ................................. 9.250 B+ 525 514,500
Sr Note Ser B 07-15-03 ................................. 8.125 B+ 252 235,620
Century Communications Corp.,
Sr Note 08-15-00 ....................................... 9.500 BB- 275 273,625
Chancellor Media Corp.,
Sr Sub Note 10-01-08 ................................... 9.000 B 315 320,513
Clear Channel Communications, Inc.,
Note 06-15-05 .......................................... 7.875 BBB- 500 500,625
Comcast Cable Communications, Inc.,
Note 11-15-08 .......................................... 6.200 BBB 310 279,846
Continental Cablevision, Inc.,
Sr Note 05-15-06 ....................................... 8.300 AA- 415 427,944
CSC Holdings, Inc.,
Sr Note Ser B 07-15-09 ................................. 8.125 BB+ 545 525,925
Sr Sub Deb 05-15-16 .................................... 10.500 BB- 310 330,925
EchoStar DBS Corp.,
Sr Note 02-01-09 ....................................... 9.375 B 360 347,400
Garden State Newspapers, Inc.,
Sr Sub Note 07-01-11 ................................... 8.625 B+ 265 233,200
Mediacom LLC/Mediacom Capital Corp.,
Sr Note Ser B 04-15-08 ................................. 8.500 B+ 310 285,200
News America Holdings, Inc.,
Gtd Sr Deb 08-10-18 .................................... 8.250 BBB- 245 236,043
Rogers Cablesystems Ltd.,
Sr Note Ser B (Canada) 03-15-05 (Y) .................... 10.000 BB+ 460 470,350
TCI Communications, Inc.,
Sr Deb 02-15-26 ........................................ 7.875 AA- 505 492,633
Telewest Communications Plc,
Sr Note (United Kingdom) 02-01-10 (R) (Y) .............. 9.875 B+ 235 218,550
Time Warner, Inc.,
Deb 01-15-13 ........................................... 9.125 BBB 745 816,445
TV Guide, Inc.,
Sr Sub Note Ser B 03-01-09 ............................. 8.125 B+ 345 340,687
----------
6,984,519
----------
Medical (1.04%)
Dynacare, Inc.,
Sr Note (Canada) 01-15-06 (Y) .......................... 10.750 B+ 515 463,500
Fresenius Medical Care Capital Trust II,
Gtd Trust Preferred Security 02-01-08 .................. 7.875 B+ 390 349,050
IASIS Healthcare Corp.,
Sr Sub Note 10-15-09 ................................... 13.000 B- 230 228,275
Quest Diagnostics, Inc.,
Sr Sub Note 12-15-06 ................................... 10.750 B+ 345 357,075
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
PAR VALUE
INTEREST CREDIT (000s MARKET
ISSUER, DESCRIPTION RATE RATING* OMITTED) VALUE
------------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Medical (continued)
Tenet Healthcare Corp.,
Sr Note 01-15-05 ....................................... 8.000% BB+ $250 $239,375
----------
1,637,275
----------
Metal (0.17%)
Golden Northwest Aluminum, Inc.,
1st Mtg Note 12-15-06 .................................. 12.000 BB- 270 270,000
----------
Mortgage Banking (4.15%)
Commercial Mortgage Acceptance Corp.,
Pass Thru Ctf Ser 1999-C1 Class A-1 08-15-08 ........... 6.790 Aaa 648 631,871
ContiMortgage Home Equity Loan Trust,
Pass Thru Ctf Ser 1995-2 Class A-5 08-15-25 ............ 8.100 AAA 480 482,325
Credit Suisse First Boston Mortgage Securities Corp.,
Commercial Mtg Pass Thru Ctf Ser 1998-C1 Class A-1A 12-17-07 6.260 AAA 547 524,612
Deutsche Mortgage & Asset Receiving Corp.,
Commercial Mtg Pass Thru Ctf Ser 1998-C1 Class C 03-15-08 6.861 A2 400 373,500
FirstPlus Home Loan Trust,
Pass Thru Ctf Ser 1998-4 Class A-5 01-10-18 ............ 6.380 AAA 700 681,184
GMAC Commercial Mortgage Securities, Inc.,
Pass Thru Ctf Ser 1997-C2 Class A-3 11-15-07 ........... 6.566 Aaa 680 639,625
LB Commercial Mortgage Trust,
Pass Thru Ctf Ser 1999-C1 Class A-1 08-15-07 ........... 6.410 Aaa 637 613,518
Morgan Stanley Capital I, Inc.,
Pass Thru Ctf Ser 1999-CAM1 Class A-3 11-15-08 .......... 6.920 AAA 1,495 1,458,092
Salomon Brothers Mortgage Securities VII, Inc.,
Mtg Pass Thru Ctf Ser 1997-HUD2 Class A-2 07-25-24 ...... 6.750 Aaa 437 436,572
UCFC Home Equity Loan Trust,
Pass Thru Ctf Ser 1996-D1 Class A6 02-15-25 ............. 7.180 AAA 730 716,312
----------
6,557,611
----------
Oil & Gas (2.66%)
Apache Finance Canada Corp.,
Note (Canada) 12-15-29 (Y) ............................. 7.750 BBB+ 355 347,652
Coastal Corp. (The),
Note 06-15-10 .......................................... 7.750 BBB 355 350,978
Occidental Petroleum Corp.,
Sr Note 02-15-29 ....................................... 8.450 BBB- 520 532,324
Ocean Energy, Inc.,
Sr Sub Note Ser B 07-15-07 ............................. 8.875 BB- 255 253,725
Panhandle East Pipe Line Co.,
Sr Note 04-01-10 (R) ................................... 8.250 BBB- 355 353,891
Petroleum Geo-Services,
Sr Note (Norway) 03-30-08 (Y) .......................... 6.625 BBB 455 412,767
Phillips Petroleum Co.,
Note 05-25-10 .......................................... 8.750 BBB 350 368,697
Snyder Oil Corp.,
Sr Sub Note 06-15-07 ................................... 8.750 BB+ 280 277,200
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
PAR VALUE
INTEREST CREDIT (000s MARKET
ISSUER, DESCRIPTION RATE RATING* OMITTED) VALUE
------------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Oil & Gas (continued)
Tosco Corp.,
Note 02-15-30 .......................................... 8.125% BBB $465 $463,554
Triton Energy Ltd.,
Sr Note 04-15-02 ....................................... 8.750 BB- 495 491,287
Valero Energy Corp.,
Sr Note 06-15-30 ....................................... 8.750 BBB- 350 347,091
----------
4,199,166
----------
Paper & Paper Products (0.70%)
Abitibi-Consolidated, Inc.,
Deb (Canada) 08-01-29 (Y) .............................. 8.500 BBB- 175 163,438
Fort James Corp.,
Sr Note 09-15-02 ....................................... 6.500 BBB 455 444,417
International Paper Co.,
Note 07-08-05 (R) ...................................... 8.125 BBB+ 500 503,650
----------
1,111,505
----------
Real Estate Investment Trusts (1.36%)
American Health Properties, Inc.,
Note 01-15-07 .......................................... 7.500 BBB- 260 231,400
Cabot Industrial Properties, L.P.,
Note 05-01-04 .......................................... 7.125 BBB- 365 351,050
Camden Property Trust,
Note 04-15-04 .......................................... 7.000 BBB 400 382,288
Liberty Property L.P.,
Medium Term Note 06-05-02 .............................. 6.600 BBB- 340 330,437
ProLogis Trust,
Note 04-15-04 .......................................... 6.700 BBB+ 375 358,980
TriNet Corporate Realty Trust, Inc.,
Note 05-15-01 .......................................... 7.300 BB 500 488,605
----------
2,142,760
----------
Telecommunications (4.31%)
AXIA, Inc.,
Sr Sub Note 07-15-08 ................................... 10.750 B- 183 142,740
Clearnet Communications, Inc.,
Sr Disc Note, Step Coupon (10.125%, 05-01-04)
(Canada) 05-01-09 (A) (Y) ............................. Zero B3 445 264,775
Sr Disc Note, Step Coupon (14.75%, 12-15-00)
(Canada) 12-15-05 (A) (Y) ............................. Zero B3 170 174,038
Crown Castle International Corp.,
Sr Note 05-15-11 ....................................... 9.000 B 320 294,400
Dominion Resources, Inc.,
Sr Note Ser A 06-15-10 ................................. 8.125 BBB+ 280 279,720
Focal Communications Corp.,
Sr Note 01-15-10 (R) ................................... 11.875 B 145 148,625
Global Crossing Holdings Ltd.,
Sr Note (Bermuda) 11-15-09 (Y) ......................... 9.500 BB 435 421,950
LCI International, Inc.,
Sr Note 06-15-07 ....................................... 7.250 BBB+ 405 383,466
SEE NOTES TO FINANCIAL STATEMENTS.
15
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
PAR VALUE
INTEREST CREDIT (000s MARKET
ISSUER, DESCRIPTION RATE RATING* OMITTED) VALUE
------------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Telecommunications (continued)
Level 3 Communications, Inc.,
Sr Note 03-15-08 (R) ................................... 11.000% B $210 $206,850
McLeodUSA, Inc.,
Sr Note 11-01-08 ....................................... 9.500 B+ 295 286,150
Metromedia Fiber Network, Inc.,
Sr Note Ser B 11-15-08 ................................. 10.000 B+ 370 365,375
MetroNet Communications Corp.,
Sr Note (Canada) 08-15-07 (Y) .......................... 12.000 BBB 260 293,800
Nextel Communications, Inc.,
Sr Note 11-15-09 ....................................... 9.375 B 390 372,450
NEXTLINK Communications, Inc.,
Sr Note 11-15-08 ....................................... 10.750 B 215 211,775
NTL Communications Corp.,
Sr Note Ser B 10-01-08 ................................. 11.500 B- 385 386,925
Omnipoint Corp.,
Sr Note 09-15-09 ....................................... 11.500 CCC+ 285 310,650
Sprint Capital Corp.,
Note 05-01-19 .......................................... 6.900 BBB+ 505 449,026
TeleCorp PCS, Inc.,
Sr Sub Disc Note, Step Coupon (11.625%, 04-15-04)
04-15-09 (A) .......................................... Zero B3 320 209,600
Triton PCS, Inc.,
Sr Sub Disc Note, Step Coupon (11.00%, 05-01-03)
05-01-08 (A) .......................................... Zero CCC+ 125 90,000
United Pan-Europe Communications N.V.,
Sr Note Ser B (Netherlands) 11-01-09 (Y) ............... 11.250 B 205 180,400
Vodafone AirTouch Plc,
Note (United Kingdom) 02-15-10 (R) (Y) ................. 7.750 A- 355 346,288
VoiceStream Wireless Corp.,
Sr Note 11-15-09 ....................................... 10.375 B- 180 186,750
Williams Communications Group, Inc.,
Sr Note 10-01-09 ....................................... 10.875 BB- 355 347,900
WorldCom, Inc.,
Note 05-15-06 .......................................... 8.000 A- 460 464,830
----------
6,818,483
----------
Transportation (4.77%)
America West Airlines,
Pass Thru Ctf Ser 1996-1B 01-02-08 ..................... 6.930 A- 350 328,943
Continental Airlines,
Pass Thru Ctf Ser 1996-C 10-15-13 ...................... 9.500 BBB+ 444 450,242
Pass Thru Ctf Ser 1999-1A 08-02-20 ..................... 6.545 AA+ 594 534,980
Delta Air Lines, Inc.,
Equip Tr Ctf Ser A 06-01-08 ............................ 10.000 BBB 2,000 2,161,380
Fine Air Services, Inc.,
Sr Note 06-01-08 ....................................... 9.875 CC 446 200,693
Humpuss Funding Corp.,
Note 12-15-09 (R) ...................................... 7.720 B3 209 151,519
SEE NOTES TO FINANCIAL STATEMENTS.
16
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
PAR VALUE
INTEREST CREDIT (000s MARKET
ISSUER, DESCRIPTION RATE RATING* OMITTED) VALUE
------------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Transportation (continued)
Northwest Airlines 1996-1 Pass Through Trusts,
Pass Thru Ctf Ser 1996-1C 01-02-05 ..................... 10.150% BBB- $220 $213,174
Pass Thru Ctf Ser 1996-1D 01-02-15 ...................... 8.970 BBB- 368 365,100
Northwest Airlines, Inc.,
Note 03-15-04 .......................................... 8.375 BB 290 274,128
NWA Trust,
Sr Note Ser A 12-21-12 ................................. 9.250 AA 529 563,526
Railcar Trust No. 1992-1,
Pass Thru Ser 1992-1 Class A 06-01-04 .................. 7.750 AAA 983 984,518
USAir, Inc.,
Pass Thru Ctf Ser 1989-A2 01-01-13 ..................... 9.820 BB- 550 470,937
U.S. Airways, Inc.,
Pass Thru Ctf Ser 1990-A1 03-19-05 ..................... 11.200 BB- 586 584,425
Wisconsin Central Transportation Corp.,
Note 04-15-08 .......................................... 6.625 BBB- 280 248,699
----------
7,532,264
----------
Utilities (12.46%)
AES Corp.,
Sr Note 06-01-09 ....................................... 9.500 BB 175 171,500
Sr Sub Note 07-15-06 ................................... 10.250 B+ 670 666,650
AES Eastern Energy L.P.,
Pass Thru Trust Ctf Ser 1999-A 01-02-17 ................ 9.000 BBB- 395 380,820
Beaver Valley Funding Corp.,
Sec Lease Oblig Bond 06-01-17 .......................... 9.000 BB- 440 444,950
BVPS II Funding Corp.,
Collateralized Lease Bond 06-01-17 ..................... 8.890 BB- 700 708,750
Calpine Corp.,
Sr Note 05-15-06 ....................................... 10.500 BB+ 465 487,087
Cleveland Electric Illuminating Co.,
1st Mtg Ser B 05-15-05 ................................. 9.500 BB+ 1,150 1,183,062
CMS Energy Corp.,
Sr Note 01-15-09 ....................................... 7.500 BB 240 212,400
Sr Note Ser B 01-15-04 ................................. 6.750 BB 380 348,650
Connecticut Light & Power Co.,
1st Ref Mtg Ser C 06-01-02 ............................. 7.750 BBB- 210 210,668
Note 06-05-03 (R) ...................................... 8.590 B+ 265 263,709
Deutsche Telekom International Finance B.V.,
Gtd Note (Netherlands) 06-15-30 (Y) + .................. 8.250 AA- 420 424,242
East Coast Power, LLC,
Sec Note 03-31-12 ...................................... 7.066 BBB- 355 323,157
EIP Funding-PNM,
Sec Fac Bond 10-01-12 .................................. 10.250 BBB- 676 736,637
Fitchburg Holding Corp.,
Sec Note 01-31-03 (r) .................................. 15.750 AAA 1,148 1,208,069
GG1B Funding Corp.,
Deb 01-15-11 ........................................... 7.430 BBB- 378 361,431
SEE NOTES TO FINANCIAL STATEMENTS.
17
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
PAR VALUE
INTEREST CREDIT (000s MARKET
ISSUER, DESCRIPTION RATE RATING* OMITTED) VALUE
------------------- ------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Utilities (continued)
GTE North, Inc.,
Deb Ser H 11-15-08 ..................................... 5.650% A+ $490 $427,447
Hydro-Quebec,
Gtd Bond (Canada) 02-01-21 (Y) ......................... 9.400 A+ 740 862,100
Gtd Bond (Canada) 01-15-22 (Y) ......................... 8.400 A+ 330 355,380
Gtd Deb Ser 1F (Canada) 02-01-03 (Y) ................... 7.375 A+ 750 750,607
Iberdrola International B.V.,
Note (Spain) 10-01-02 (Y) .............................. 7.500 AA- 1,000 1,006,730
Long Island Lighting Co.,
Deb 03-15-23 ........................................... 8.200 A- 615 584,250
Midland Funding Corp. I,
Deb Ser C-91 07-23-02 .................................. 10.330 BBB- 646 658,492
Midland Funding Corp. II,
Deb Ser A 07-23-05 ..................................... 11.750 BB+ 550 615,681
Deb Ser B 07-23-06 ..................................... 13.250 BB+ 225 264,605
Monterrey Power S.A. de C.V.,
Sec Bond (Mexico) 11-15-09 (R) (Y) ..................... 9.625 BB+ 145 131,950
Niagara Mohawk Power Corp.,
Sec Fac Bond 01-01-18 .................................. 8.770 BBB 729 750,914
North Atlantic Energy Corp.,
1st Mtg Ser A 06-01-02 ................................. 9.050 BB+ 266 267,947
Northeast Utilities,
Note Ser A 12-01-06 .................................... 8.580 BB+ 120 121,108
PECO Energy Transition Trust,
Pass Thru Ctf Ser 1999-A Class A-6 03-01-09 ............ 6.050 AAA 480 446,880
Pass Thru Ctf Ser 2000-A Class A3 03-01-10 ............. 7.625 AAA 1,470 1,480,437
PNPP II Funding Corp.,
Deb 05-30-16 ........................................... 9.120 BB- 475 485,051
Sierra Pacific Resources,
Note 05-15-05 .......................................... 8.750 BBB 490 496,463
System Energy Resources, Inc.,
1st Mtg 08-01-01 ....................................... 7.710 BBB- 590 588,820
U S WEST Capital Funding, Inc.,
Deb 07-15-28 ........................................... 6.875 BBB+ 525 450,949
Waterford 3 Funding Corp.,
Sec Lease Obligation Bond 01-02-17 ..................... 8.090 BBB- 821 813,117
----------
19,690,710
----------
TOTAL PUBLICLY TRADED BONDS AND DIRECT PLACEMENT SECURITY
(Cost $146,466,566) (92.30%) 145,815,021
------- -----------
SEE NOTES TO FINANCIAL STATEMENTS.
18
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
NUMBER OF
SHARES OR MARKET
ISSUER, DESCRIPTION WARRANTS VALUE
------------------- ------------- ----------
<S> <C> <C>
PREFERRED STOCKS AND WARRANTS
California Federal Preferred Capital Corp., 9.125%, Ser A, Preferred Stock .............. 35,650 $755,334
CSC Holdings, Inc., 11.125%, Ser M, Preferred Stock ..................................... 5,753 605,503
CSC Holdings, Inc., 11.750%, Ser H, Preferred Stock ..................................... 1,015 109,620
MetroNet Communications Corp., Warrant (Canada) (R) (Y)** ............................... 510 66,300
----------
1,536,757
----------
TOTAL PREFERRED STOCKS AND WARRANTS
(Cost $1,610,014) (0.97%) 1,536,757
-------- ----------
INTEREST PAR VALUE
RATE (000s OMITTED)
----------- -----------------
SHORT-TERM INVESTMENTS
Commercial Paper (4.42%)
General Electric Capital Corp.,
07-07-00 ............................................................... 6.550% $5,000 4,994,542
07-07-00 ............................................................... 6.700 2,000 1,997,766
----------
6,992,308
----------
Joint Repurchase Agreement (2.49%)
Investment in a joint repurchase agreement transaction with
UBS Warburg, Inc. - Dated 06-30-00, due 07-03-00 (Secured
by U.S. Treasury Bonds 6.250% thru 7.500%, due 08-15-22
thru 08-15-27) - Note A ................................................ 6.550 3,926 3,926,000
----------
Corporate Savings Account (0.00%)
Investors Bank & Trust Company
Daily Interest Savings Account
Current Rate 5.20% ..................................................... 768
----------
TOTAL SHORT-TERM INVESTMENTS (6.91%) 10,919,076
-------- -----------
TOTAL INVESTMENTS (100.18%) 158,270,854
-------- -----------
OTHER ASSETS AND LIABILITIES, NET (0.18%) (286,520)
-------- ------------
TOTAL NET ASSETS (100.00%) $157,984,334
======== ============
SEE NOTES TO FINANCIAL STATEMENTS.
19
<PAGE>
==============================FINANCIAL STATEMENTS==============================
John Hancock Funds - Investors Trust
NOTES TO THE SCHEDULE OF INVESTMENTS
(A) Cash Interest will be paid on this obligation at the stated rate beginning
on the stated date.
(r) Direct placement securities are restricted to resale. They have been valued
in accordance with procedures approved by the Trustees after consideration of
restrictions as to resale, financial condition and prospects of the issuer,
general market conditions and pertinent information in accordance with the
Fund's By-Laws and the Investment Company Act of 1940, as amended. The Fund has
limited rights to registration under the Securities Act of 1933 with respect to
these restricted securities. Additional information on these securities is as
follows:
MARKET
VALUE AS A MARKET
PERCENTAGE VALUE
ACQUISITION ACQUISITION OF FUND'S AS OF
ISSUER, DESCRIPTION DATE COST NET ASSETS JUNE 30, 2000
------------------- ----------- ----------- ---------- -------------
Fitchburg Holding Corp., Sec Note, 15.75%, 01-31-03 .............. 02-10-81 $1,131,377 0.77% $1,208,069
(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 $12,693,711 or 8.03% of net assets as of June 30, 2000.
(Y) Parenthetical disclosure of a foreign country in the security description
represents country of a foreign issuer; however, security is U.S. dollar
denominated.
+ All or a portion of these securities, having an aggregate value of $5,594,895
or 3.54% of the Fund's net assets, have been purchased as forward commitments;
that is, the Fund has agreed on trade date to take delivery of and make payment
for such securities on a delayed basis subsequent to the date of this schedule.
The purchase price and 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 its Custodian Bank to segregate assets with a
current value at least equal to the amount of the forward commitments.
Accordingly, the market value of $5,780,906 of United States Treasury Bonds,
8.875%, 08-15-17 and 9.125%, 05-15-18 has been segregated to cover the forward
commitments.
* Credit ratings are unaudited and rated by Standard & Poor's where available,
or Moody's Investors Service or John Hancock Advisers, Inc. where Standard &
Poor's ratings are not available.
** Non-income producing security.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
20
<PAGE>
==========================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,
Inc., 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 qualifies as a "regulated investment company" by
complying with the applicable provisions of the Internal Revenue Code and will
not be subject to federal income tax on taxable income which is distributed to
shareholders. Therefore, no federal income tax provision is required. For
federal income tax purposes, the Fund has $1,814,032 of capital loss
carryforward available, to the extent provided by regulations, to offset future
net realized capital gains. To the extent such carryforward is used by the Fund,
no capital gain distributions will be made. The carryforwards expire as follows:
December 31, 2002 - $273,582, December 31, 2004 - $4,374 and December 31, 2007 -
$1,536,076.
DIVIDENDS, INTEREST AND DISTRIBUTIONS 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.
USE OF ESTIMATES The preparation of these financial statements in accordance
with generally accepted accounting principles incorporates estimates made by
management in determining the reported amounts of assets, liabilities, revenues
and expenses of the Fund. Actual results could differ from these estimates.
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 and
other market conditions. Buying futures tends to increase the Fund's exposure to
the underlying instrument. Selling futures tends to decrease the Fund's exposure
to the underlying instrument or hedge other Fund instruments. At the time the
Fund enters into a financial futures contract, it will be 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 future contracts being traded. Each day, the futures contract is
valued at the official settlement price of the board of trade or U.S.
commodities exchange on which it trades. 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
21
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==========================NOTES TO FINANCIAL STATEMENTS=========================
John Hancock Funds - Investors Trust
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 fluctuations 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 June 30, 2000, 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, exceed 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.
The Fund has an agreement with the Adviser to perform necessary tax,
accounting and legal services for the Fund. The compensation for the period was
at an annual rate of less than 0.02% of the average net assets of the Fund.
Mr. Stephen L. Brown, Ms. Maureen R. Ford and Mr. 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. 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 makes investments into other John Hancock funds, as
applicable, to cover its liability for the deferred compensation. Investments to
cover the Fund's deferred compensation liability are recorded on the Fund's
books as an other asset. The deferred compensation liability and the related
other asset are always equal and are marked to market on a periodic basis to
reflect any income earned by the investment as well as any unrealized gains or
losses. The investment had no impact on the operations of the Fund.
NOTE C -
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of securities, other than
obligation of the U.S. government and its agencies and short-term securities,
during the period ended June 30, 2000 aggregated $59,290,441 and $65,798,754,
respectively. Purchases and proceeds from sales of obligations of the U.S.
government and its agencies aggregated $116,593,551 and $108,479,505,
respectively.
The cost of investments owned at June 30, 2000 (excluding corporate
savings account) for federal income tax purposes was $159,265,011. Gross
unrealized appreciation and depreciation of investments at June 30, 2000
aggregated $3,255,813 and $4,250,738, respectively, resulting in net unrealized
depreciation of $994,925.
22
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==========================NOTES TO FINANCIAL STATEMENTS=========================
John Hancock Funds - Investors Trust
DIVIDENDS AND DISTRIBUTIONS
During the first six months of 2000, dividends from net investment income
totaling $0.7100 per share were paid to shareholders. The dates of payment and
the amounts per share are as follows:
INCOME
PAYMENT DATE DIVIDEND
------------ --------
March 31, 2000 $0.3600
June 30, 2000 0.3500
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 also invest in repurchase agreements. The Fund may use options
contracts to manage its exposure to the stock market. The Fund may buy and sell
financial futures contracts to hedge against the effects of fluctuations in
interest rates and other market conditions. 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. The Fund may lend
portfolio securities not to exceed 33 1/3% of total assets. 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.
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John Hancock Funds - Investors Trust
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.
All correspondence or additional information concerning the plan should
be directed to the Plan Agent, State Street Bank and Trust Company, at P.O. Box
8209, Boston, Massachusetts 02266-8209 (telephone 1-800-426-5523).
SHAREHOLDER COMMUNICATION AND ASSISTANCE
If you have any questions concerning the John Hancock Investors Trust, we will
be pleased to assist you. If you hold shares in your own name and not with a
brokerage firm, please address all notices, correspondence, questions or other
communications regarding the Fund to the transfer agent at:
State Street Bank and Trust Company
P.O. Box 8200
Boston, Massachusetts 02266-8200
Telephone: (800) 426-5523
If your shares are held with a brokerage firm, you should contact that firm,
bank or other nominee for assistance.
24
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John Hancock Funds - Investors Trust
SHAREHOLDER MEETING
On March 16, 2000, the Annual Meeting of John Hancock Investors Trust was held.
The Shareholders elected the following Trustees with the votes as
indicated:
WITHHELD
NAME OF TRUSTEE FOR AUTHORITY
--------------- --- ---------
Dennis S. Aronowitz 6,105,258 95,049
Stephen L. Brown 6,109,043 91,264
Richard P. Chapman, Jr. 6,105,462 94,846
William J. Cosgrove 6,103,850 96,457
Leland O. Erdahl 6,102,505 97,802
Richard A. Farrell 6,106,265 94,042
Maureen R. Ford 6,102,088 98,219
Gail D. Fosler 6,108,045 92,263
William F. Glavin 6,096,288 104,019
Anne C. Hodsdon* 6,107,996 92,311
Dr. John A. Moore 6,101,494 98,814
Patti McGill Peterson 6,100,952 99,355
John W. Pratt 6,103,592 96,715
Richard S. Scipione 6,111,189 89,119
*Resigned effective May 1, 2000
The Shareholders also ratified the Trustees' Selection of Ernst & Young
LLP as auditors for the fiscal year ending December 31, 2000, with the votes
tabulated as follows: 6,115,866 FOR, 29,492 AGAINST and 54,950 ABSTAINING.
25
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======================================NOTES=====================================
John Hancock Funds - Investors Trust
26
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John Hancock Funds - Investors Trust
27
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