<PAGE>
[ARTWORK APPEARS HERE]
December 31, 1997
Changing Needs. Personal Choices.
ANNUAL REPORT
[LOGO OF JOHN HANCOCK APPEARS HERE]
[LOGO OF JOHN HANCOCK FUNDS APPEARS HERE]
[LOGO OF INDEPENDENCE INVESTMENT ASSOCIATES, INC. APPEARS HERE]
[LOGO OF BRINSON PARTNERS, INC. APPEARS HERE]
[LOGO OF INVESCO APPEARS HERE]
[LOGO OF JP MORGAN APPEARS HERE]
[LOGO OF JANUS APPEARS HERE]
[LOGO OF NEUBERGER & BERMAN APPEARS HERE]
[LOGO OF STATE STREET GLOBAL ADVISORS APPEARS HERE]
[LOGO OF T. ROWE PRICE APPEARS HERE]
VARIABLE SERIES TRUST
[JOHN HANCOCK LOGO APPEARS HERE]
INSURANCE FOR THE UNEXPECTED.
INVESTMENTS FOR THE OPPORTUNITIES.(R)
<PAGE>
[PHOTO OF THOMAS J. LEE, PRESIDENT AND VICE CHAIRMAN APPEARS HERE]
Dear Variable Contract Owner:
The past year has been one of challenges and rewards for investors. The domestic
economy was marked by low interest rates, low unemployment, and continued
expansion. Domestic equity markets have displayed strong resiliency during
periods of market turbulence -- particularly during the near historic market
correction of late October. The end result was a positive outcome for equity
markets as measured by broad-market indices. International markets have also
been generally positive -- with the exception of the Asian markets -- again as
measured by broad international market indices.
For today's investor, enduring the challenges of the markets requires a sound
investment and asset allocation strategy that reflects an individual's risk
tolerance, investment time horizon, and ultimately, his or her goals and
objectives. As a part of our commitment to variable life and annuity customers,
we have put in place superior programs and services that allow our contract
owners to get the most benefit from the tremendous investment opportunities
available with the John Hancock Variable Series Trust -- and in a way that
reflects their own investment profile.
During the past year, we have introduced a wide array of programs designed to
assist you in obtaining the information and guidance necessary to make informed
investment decisions as you accumulate and distribute your assets. At the
forefront was the inaugural John Hancock Variable Series Trust client satellite
broadcast. This program featured presentations from our investment management
partners and a demonstration of the importance of asset allocation by leading
industry experts. We believe this was an excellent forum.
In our role as the primary investment manager for the 18 portfolio choices in
the Variable Series Trust, John Hancock continues the process of monitoring the
performance and compliance of each investment portfolio. Our oversight committee
has an ongoing process of screening and analyzing portfolios to ensure that all
managers maintain the quality and consistent performance we have committed to
within the Variable Series Trust.
Going into the future, we hope to strengthen our relationship with you by
delivering the best responsive programs and services in order to provide you
with insurance for the unexpected and investments for the opportunities. As
always, your John Hancock Registered Representative is available to assist you
in creating insurance and investment solutions to meet your specific goals and
objectives.
[PHOTO OF HENRY D. SHAW, CHAIRMAN APPEARS HERE]
Sincerely,
/s/ Henry D. Shaw /s/ Thomas J. Lee
- ------------------ ------------------
Henry D. Shaw Thomas J. Lee
Chairman President and Vice Chairman
<PAGE>
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ECONOMIC OVERVIEW: ANNUAL REVIEW 1997
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JOHN HANCOCK ECONOMIC RESEARCH
The U.S. economy outperformed expectations during 1997. Growth continued
throughout the year at a rapid pace, defying predictions by surpassing 1996.
The strong growth generated over 3 million new jobs, pushing the unemployment
rate down to 4.7%, the lowest rate since 1973. This would normally have been
associated with rising inflation, but instead inflation actually declined from
2.9% in 1996 to 2.3% in 1997. Excluding food and energy, inflation reached its
lowest rate since 1965.
With declining unemployment, consumer and business confidence rose to record
highs. Sectors which were expected to weaken in 1997, such as housing and
autos, were sustained by rising employment, incomes and confidence. Consumer
spending ended the year on a healthy note with the best holiday retail sales in
3 years.
The strength of the economy has driven a continuing debate about what growth
rate is sustainable and what Federal Reserve policies are desirable. Those who
believe that the good times can roll on advocate financial ease, pointing to
low inflation and signs of rising productivity. A more cautious view focuses on
the risk that a streak of good luck may be coming to an end, and advises
monetary tightening.
The financial problems in Asia that began with Thailand's devaluation in July
expanded into a region-wide crisis during the past six months, and proved
contagious for other emerging markets around the world from Russia to Brazil.
Some U.S. industries will clearly be hurt by cheaper Asian goods, both in
domestic and foreign markets.
Overall, however, the impact on the U.S. economy should be limited. American
consumers will benefit from lower prices and as the economy heads into 1998
with high levels of confidence and spending, the worsening U.S. trade balance
should cause roughly the same slowdown that would otherwise have been
deliberately engineered by the Fed.
In financial markets, the troubles in Asia have led to a flight to quality.
U.S. 30-year Treasury bonds reached their lowest yield since they were first
issued in the 1970s, and mortgage rates followed them down. The housing market
is thus receiving another shot in the arm, and homeowners who refinance will
have more money to spend.
With inflation down and the price of imports from Asia set to drop, there is
now widespread talk of deflation. This is probably a mistake, since declining
prices of goods cannot make up for steady increases in the prices of services,
most of which are not subject to foreign competition: housing, transportation,
medical, personal and other services account for about 60% of consumer spending
and of the Consumer Price Index. The current low rate of inflation is therefore
probably as good as it gets, and the Fed is still more concerned that it will
rise than fall.
The likelihood of an economic slowdown in 1998 has raised doubts about the
outlook for U.S. corporate earnings, and this has been reflected in greater
volatility of U.S. stock prices during the second half of 1997. While
predictions of an end to the bull market have been proved wrong each year in
the recent past, the risks are clearly substantial.
<PAGE>
INCEPTION: MARCH 29, 1986
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MONEY MARKET PORTFOLIO
JOHN HANCOCK MUTUAL LIFE INSURANCE CO. PETER MITSOPOULOS
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1997 was quite a difficult year for short-term investment managers to stand
out among the crowd as short-term interest rates moved in a very narrow band
while long-term rates came down precipitously. Money market investment rates
often move about as each economic variable is disseminated into the marketplace
and this year was no exception, but the economic data often cast an ambiguous
and sometimes contradictory statement about the direction of the economy,
mainly inflationary tendencies. As a result, the closely watched Fed Funds
rate, an interest rate that establishes a benchmark for other money market
instruments, was left relatively unchanged by the Fed. Although a persistently
low unemployment rate and tight labor markets put pressure on the Fed to stand
ready to increase rates to slow the economy, in the end, only a single change
in the Fed Funds rate, an increase of one-quarter of 1 percentage point to
5.50% in March, marked the year. The increase, deemed a "preemptive strike" by
the Fed against inflation, was widely considered to be the first of other
increases to follow. Fortunately, as indicated in the economic commentary at
the beginning of this report, the U.S. economy performed extremely well
mitigating the need by the Fed to raise rates.
Our investment strategy, as well as other money market investors, was affected
by the uncertainty in the direction of Fed policy to the strong, but sometimes
contradictory economic signals. While we did not wholeheartedly agree with the
pessimistic outlook for higher rates during the first quarter, we did not
extend the portfolio's maturity for two reasons; first the market was not
paying the correct premium to take longer-term positions and second, what if
the Fed did decide to raise rates. As we entered the second quarter, market
sentiment did push rates higher and our shorter maturity strategy going into
the quarter allowed us to extend maturities out more quickly. As the second
half of the year progressed market sentiment expected a more neutral monetary
policy and as a result it was advantageous to acquire longer maturity
instruments for the portfolio. On the credit side, we, as well as many other
money fund investors, reduced exposure and finally moved away from the Japanese
banking sector as market turmoil and uncertainty in their financial well being
got worse. The premium on these investments were lucrative, but not worth the
risk.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 12/31/87 $17,591 Money Market Portfolio
(10-Year-Period)
[GRAPH APPEARS HERE]
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Date Money Market Portfolio
12/31/87 10,055.9
1989 10,839.23
1990 11,838.25
1991 12,807.33
1992 13,532.43
1993 14,011.08
1994 14,439.82
1994 14,439.82
1995 15,053.99
1996 15,922
1/1/97 16,765.59
12/31/97 17,590.6
Top Ten Holdings (as of December 31, 1997)
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% of six months ago
investments % of investments
AC Acquisition Holdings Co. 5.0% N/A
Sears, Roebuck Acceptance Corp 5.0% N/A
Twin Towers, Inc. 4.9% 4.3%
General Motors Acceptance Corp 4.9% 4.4%
Sheffield Receivables Corp 4.8% 1.3%
Lehman Brothers, Inc 4.6% 4.7%
MBNA America Bank, N.A. 4.5% 5.0%
Merrill Lynch & Co., Inc 4.4% 1.3%
National Bank of Canada 4.4% 4.5%
Sigma Finance, Inc 4.1% 0.6%
Average Annual Total Returns*
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Money Market MorningStar
Portfolio Peer Group+
------------ -----------
1 Year 5.38% 5.31%
5 Years 4.71 4.54
10 Years 5.81 5.61
Top Five Industries (as of December 31, 1997)
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% of six months ago
investments % of investments
Financial Services 62.4% 45.2%
Automative and Rubber 8.1% 7.8%
Banks and Finance 10.3% 7.8%
Retail 5.0% N/A
Foreign 3.6% 18.1%
The Money Market Portfolio is neither insured nor guaranteed by the U.S.
Government and there is no guarantee the fund will be able to maintain a stable
net asset value of $10.00/share.
*Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
+Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
2
<PAGE>
INCEPTION: MAY 1, 1994
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SHORT-TERM U.S. GOVERNMENT PORTFOLIO
INDEPENDENCE INVESTMENT ASSOCIATES, INC. TOM SPICER
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Looking back at the Treasury market in 1997, a sharp contrast can be seen
between the first and second halves of the year. The first quarter showed
strong growth and benign inflation which led Fed Chairman Alan Greenspan to
initiate a preemptive rate hike of 25 basis points. When inflation pressures
failed to surface, the Fed moved from a tightening stance to more of a holding
pattern. In late summer, the UPS strike re-focused investors in the area of
higher labor costs and a tight labor market. With this came re-newed fears of
inflation and forecasts of near term tightening. These beliefs faded quickly in
October when a weak stock market and trouble abroad took the Fed right out of
the picture.
The Short-Term U.S. Government portfolio experienced positive absolute returns
for each quarter in 1997. This led to a respectable net return of 6.41% in the
fund for the year. This performance was slightly below that of its benchmark,
the Merrill Lynch 1-5 Year U.S. Government Bond Index. With the portfolio both
duration and yield curve neutral, the only major difference from the benchmark
is the weighting in the Agency sector versus Treasuries. The fund has
historically been over-weighted in this area and this was increased further
during the recent quarter. At year end Agencies comprised nearly 80% of the
portfolio compared to 18% for the benchmark. These securities are an excellent
source of additional yield and also provide exposure to a sector which has
historically outperformed the Treasury market on a total return basis. This
strategy relates directly to our philosophy of seeking cheap, predictable
cashflows.
The market outlook for 1998 heavily depends on how and how quickly the Asian
countries can be stabilized. Both of those areas are filled with uncertainties
and, as it stands, its anyone's guess as to how it will all come together. The
Short-Term U.S. Government portfolio, however, will continue to be managed as
it was meant to--conservative and risk adverse. This means keeping interest
rate risk to a minimum and emphasizing incremental yield with minimal risk.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/1/94 $12,334 Short-Term U.S. Govt.
(Portfolio Inception Date) Portfolio
$12,755 Merrill Lynch 1-5
[LINE GRAPH APPEARS HERE] U.S. Govt. Bond Index
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Short-Term U.S. Merrill Lynch 1-5
Date Govt. Portfolio U.S. Govt. Bond Index
May 1, 1994 9,999.1 10,013
Dec 1995 11,186.64 11,398
Dec 1996 11,590.5 11,907
Jan 1, 1997 11,642.19 11,961
Dec 31, 1997 12,333.56 12,755
Top Ten Holdings (as of December 31, 1997)
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% of six months ago
investments % of investments
Federal National Mortgage Assoc. 18.9% 16.8%
U.S. Treasury 18.0% 34.7%
Federal Home Loan Banks 14.3% 12.2%
Federal Farm Credit Banks 14.0% 11.1%
Private Export Funding Co. 11.9% 9.5%
Tenessee Valley Authority 11.5% 6.5%
State of Israel Agency for
International Development 7.4% 6.0%
Federal Home Loan Mortgage Corp 4.0% 3.3%
Average Annual Total Returns*
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Short-Term U.S. Merrill Lynch 1-5 MorningStar
Govt. Portfolio U.S. Govt. Bond Index Peer Group+
--------------- --------------------- -----------
1 Year 6.41% 7.12% 6.63%
Since Inception 5.88% 6.86 N/A
Top Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Government Agencies 70.5% 65.4%
U.S. Governmental 16.0% 34.7%
Municipals 11.5% N/A
*Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
+Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
3
<PAGE>
INCEPTION: MARCH 29, 1986
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SOVEREIGN BOND PORTFOLIO
JOHN HANCOCK ADVISERS, INC. JAMES HO
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For the six months ended December 31, 1997, the Sovereign Bond Portfolio
returned 6.26% versus 6.83% for the Lehman Brothers Government/Corporate Bond
Index. Returns reflect vastly different market environments from one quarter to
the next. Third quarter activity witnessed a continuation in spread tightening
as interest rates trended lower. In the fourth quarter, the market changed
abruptly and dramatically, as a financial crisis in Southeast Asia unfolded
with the dramatic currency devaluations in several key countries. As investment
uncertainties and currency volatility reached a crescendo, most market segments
were negatively and indiscriminately impacted, including the investment grade
quality sectors.
Having taken handsome profits in the majority of our emerging market holdings
in the first half of the year, we significantly reduced our exposure to Asian
credits by the third quarter. The issues retained reflected strong credit
fundamentals and were believed to be shielded somewhat from currency exposure
because of dollar based revenue streams. Nonetheless, being an emotionally
charged market, investors herded to U.S. Treasuries in a flight to quality
providing a clear advantage to the Index with its heavy weighting (64%) in
Treasuries.
Looking ahead, we expect U.S. Treasury rates to remain in a trading range near
term, with the lower end at levels below those set during the fall of 1993. We
will likely maintain a duration neutral strategy relative to the Index and
focus on higher quality corporate bonds, asset backed securities and select
high yield issues, while underweighting our exposure to the emerging markets.
We will continue to employ a slight bullet structure in an extremely flat yield
curve to capture incremental returns as the term structure shifts.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 12/31/87 $23,996 Sovereign Bond
(10-Year-Period) Portfolio
$24,312 Lehman Brothers
Govt./Corp. Bond Index
[LINE GRAPH APPEARS HERE]
- ---------------------------------------------
Sovereign Bond Lehman Brothers
Date Portfolio Govt./Corp. Bond Index
12/31/87 10,000 10,000
12/31/89 12,186.28 12,291
12/31/91 15,269.78 15,456
12/31/93 18,209.05 18,466
12/31/95 21,209.64 21,246
1/1/97 22,162.03 21,890
12/31/97 24,311.57 23,996
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
U.S. Treasury 23.5% 19.8%
Government National Mortgage Assoc. 4.7% 2.5%
Federal Home Loan Mortgage Corp 2.0% 2.2%
UCFC Home Equity Loan 1.9% 2.2%
Federal National Mortgage Assoc. 1.8% 1.2%
American Express Credit Corp. 1.7% 1.9%
Hydro-Quebec 1.6% 1.9%
Commercial Credit Group, Inc. 1.6% 1.8%
Texaco Capital, Inc. 1.6% 1.7%
Michigan Consolidated Gas Co. 1.3% 1.4%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Sovereign Bond Lehman Brothers MorningStar
Portfolio Govt./Corp. Bond Index Peer Group+
-------------- ---------------------- -----------
1 Year 10.11% 9.75% 9.18%
5 Years 8.14 7.61 7.56
10 Years 9.29 9.15 8.99
Portfolio Composition (as of December 31, 1997)
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Credit Quality Duration
Treasury Agency 30.5% less than 1 Year 7.5%
AAA 13.9% 1-3 Years 24.0%
AA 9.0% 3-5 Years 26.5%
A 18.0% 5-10 Years 24.3%
Baa 11.5% greater than 10 Years 17.7%
Other 17.1%
*Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions, and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
+Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
4
<PAGE>
INCEPTION: MAY 1, 1996
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STRATEGIC BOND PORTFOLIO
J.P. MORGAN INVESTMENT MANAGEMENT, INC. CHRIS DURBIN & LILI DUNG
- --------------------------------------------------------------------------------
The Portfolio provided a total return of 9.05% (net of fees) for the year
ending December 31, 1997. In addition, the Portfolio has returned 9.50% since
its May 1, 1996 inception.
Throughout 1997, the U.S. economy continued to grow at above trend levels and
unemployment moved to cyclical lows. Income, consumption and confidence
measures, generally, remained robust as well. In spite of an ongoing drift
upward in wage rates, inflation at both the wholesale and retail levels
remained remarkably benign. This resulted in strong U.S. fixed income returns,
with the Lehman Brothers Aggregate Bond index returning 9.68% for the year.
However, the U.S. fixed income market was outpaced by the foreign fixed income
market during the year. In particular, the U.K. and Canada were among the top
performing foreign markets. Our decision to overweight foreign versus U.S.
fixed income markets, and the U.K. and Canada in particular, positively
impacted the Portfolio's performance.
Within the U.S. portion of the Portfolio, performance was enhanced by our
decision to overweight mortgage backed securities and investment grade
corporates, as these sectors outperformed U.S. Treasuries. However, the
economic crisis in Asia caused a widening in spread sectors across all markets
during the last part of the year. Our underweighted position in U.S. Treasuries
negatively impacted performance during the fourth quarter.
Within the foreign markets, Continental European economies continued to show a
strong growth trend. By mid-year we had increased the allocation to U.S. high
yield and U.S. dollar denominated emerging markets to our maximum allocation of
10% to take advantage of substantial spread widenings resulting from economic
weakness in the Asian markets. However, weakness throughout Asia continued
through year end, spilling into financial markets worldwide and negatively
impacting performance of U.S. high yield and U.S. dollar denominated emerging
markets. Currently we hold 6.5% allocation to these markets. Looking forward,
we expect to maintain a similar allocation as economic conditions throughout
Asia remain uncertain.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
Investment made 5/1/96 $11,637 Strategic Bond Portfolio
(Portfolio Inception Date) $11,779 Strategic Bond Composite
Index (A)
[GRAPH APPEARS HERE]
- ---------------------------------------------
Date Strategic Bond Composite Strategic Bond Portfolio
Index (A)
5/1/96 10,002 9,983.2
1/31/97 10,762 10,722.54
12/31/97 11,779 11,637.3
Top Ten Holdings (as of December 31, 1997)
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% of six months ago
Investments % of investments
United States Treasury Notes 20.8% 0.4%
Federal National Mortgages Assoc. 12.9% 10.8%
Government of Japan Bonds 5.4% 3.7%
Federal Home Loan Mortgages 4.9% 1.8%
Conversion 4.8% N/A
Green Tree Financial Corp. 3.8% N/A
First Union Lehman Brothers Mortgage Trust 3.8% N/A
Morgan Stanley Capital Inc. 3.8% N/A
CS First Boston Mortgage 2.8% 4.2%
Countrywide Home Loans 2.3% 3.7%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Strategic Bond Strategic Bond MorningStar
Portfolio Composite Index (A) Peer Group+
-------------- ------------------- -----------
1 Year 9.05% 10.05% 7.46%
Since Inception 9.50% 10.32 N/A
Portfolio Composition (as of December 31, 1997)
- --------------------------------------------------------------------------------
Credit quality Duration
--------
Treasury/Agency 36.7% less than 1 Year 5.0%
AAA 37.3% 1-3 Years 23.1%
AA 4.5% 3-5 Years 22.2%
A 6.9% 5-10 Years 42.3%
BBB 3.63 greater than 10 Years 7.4%
Other 11.3
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. There are special risks associated with
international investing including currency fluctuations, political and
economic instability, foreign taxation and different accounting standards,
as outlined in the current prospectus.
The performance of the portfolio on this page is reported net of Trust level
changes (i.e. investment management fees and operating expenses). It does
not reflect expense and charges of the applicable separate accounts and
variable products, all of which vary to a considerable extent and are
described in your product prospectus.
(A) Strategic Bond composite Index: 75% Lehman Brothers Aggregate Bond and 25%
J.P. Morgan Non-US Government Bond Index, Hedged.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from
reliable sources, data completeness and accuracy cannot be guaranteed.
5
<PAGE>
INCEPTION: MARCH 29, 1986
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MANAGED PORTFOLIO
INDEPENDENCE INVESTMENT ASSOCIATES, INC. JOHN FORELLI & TOM SPICER
- --------------------------------------------------------------------------------
The "Goldilocks" economy (inflation and economic growth not too hot nor too
cold) in the United States led to another remarkable year of performance for
both the U.S. equity and fixed income markets. The equity portion of the
portfolio generated a gross return of about 31.32% in 1997 while the fixed
income portion increased about 9.20% (gross) for the year. While the overall
return of the portfolio lagged the benchmark, the Managed Portfolio turned in
another outstanding absolute performance with a net return of about 18.72% in
1997.
In 1997, the stock market continued to rally as investors took comfort in the
continued steady growth, low inflation environment. The market became extremely
volatile in the fourth quarter, due to continued uncertainties associated with
the Asian economic crisis. This uncertainty drove investors back into a few
high quality, safe and trusted stocks. The Managed Portfolio took advantage of
this uncertainty and reallocated a bigger portion of assets into U.S. equities
in the fourth quarter. Sectors that outperformed in the fourth quarter of 1997
included domestically focused industries such as utilities, consumer services
and financial services firms. Strong performers in the portfolio included Home
Depot, Lowes, Bell Atlantic, Bristol Myers and Household International. The
fixed income market faced a year of abnormalities in 1997. Fixed income
investors were faced with an increasing array of new market forces such as
global currency volatility, weakening credit conditions in overseas markets,
low domestic interest rates, and a low interest rate spread between short and
long term interest rates. In this tricky environment, your portfolio remained
overweighted in U.S. corporate bonds and mortgages. The quality of the fixed
income portfolio is very high with an overweighting in ten and thirty year
maturities.
We continue to see a favorable, although volatile, investment environment
ahead. Long-term interest rates are at their lowest level since the 1960s.
Inflation has been held in check despite the steady economic growth over the
past seven years. While the disruptions in Asia will undoubtedly slow corporate
profit growth and produce its share of earnings disappointments in 1998, we
still expect steady overall corporate profit growth. During these volatile
times, we believe that portfolio risk control and spreading risk between
equities and fixed income will be a prudent investment strategy in 1998.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 12/31/87 $33,299 Managed Portfolio
(10-Year-Period) $35,993 Managed Composite
Index/./
[LINE GRAPH APPEARS HERE]
- ---------------------------------------------
Managed Composite
Date Index/./ Managed Portfolio
12/31/87 10,000 10,000
12/31/89 13,733 13,350.49
12/31/91 17,453 16,960.43
12/31/93 20,781 20,388.27
12/31/95 26,336 25,333.96
12/31/97 35,993 33,298.59
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
US Treasury 16.4% 17.7%
General Electric Co. 1.8% 1.8%
Phillip Morris Cos., Inc. 1.7% 2.1%
Hilton Hotel Corp. 1.6% 1.1%
General Re Corp. 1.5% 0.9%
Xerox Corp. 1.3% 0.3%
Bell Atlantic Corp. 1.3% N/A
Microsoft Corp. 1.3% 0.9%
Merck & Co., Inc. 1.3% 1.2%
Citicorp 1.2% 0.4%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Managed Managed Composite MorningStar
Portfolio Index/./ Peer Group+
------------ ----------------- -----------
1 Year 18.72% 21.28% 22.10%
5 Years 12.76 13.88 14.05
10 Years 12.78 13.66 14.35
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
U.S. Governmental 16.4% 17.7%
Financial Services 10.6% 10.7%
Banks and Finance 6.0% 10.1%
Health Products and Services 7.9% 7.4%
Oils and Natural Gas Equipment and Services 4.9% 3.9%
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
funds shares will fluctuate so that shares, when redeemed, may be worth less
than their original cost.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
. Managed Composite Index: 50% S&P 500 and 50% Lehman Brothers Govt./Corp. Bond
Index.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
6
<PAGE>
INCEPTION: MARCH 29, 1986
- --------------------------------------------------------------------------------
GROWTH AND INCOME PORTFOLIO
INDEPENDENCE INVESTMENT ASSOCIATES, INC. PAUL F. MCMANUS
- --------------------------------------------------------------------------------
The stock market, after having posted strong returns in the third quarter,
became extremely volatile in the fourth quarter of 1997. This was a result of
the developing uncertainties in the Asian markets. During the quarter, larger
capitalization stocks outperformed smaller capitalization stocks as technology
issues under-performed. This was due to a lowering of expectations for
technology orders and fall out from the Asian environment. Also, value stocks
did better than growth stocks in the quarter. Some examples of "value"
industries would be the banking and utilities. These industries also have the
benefit of being primarily domestic companies, which excelled in comparison to
internationally exposed companies. Industries that lagged were the energy,
metals, and paper and forest product groups.
At the end of December, the portfolio owned approximately 125 stocks and was
fully invested with a cash position of 3.5%. The portfolio maintains market-
like risk characteristics and conforms to the universe guidelines specific to
your account needs. The best performers in the account were Norwest
Corporation, Houston Industries, and Bell South. Laggards included Oracle,
Vencor Inc., and Tommy Hilfiger. The stock portfolio's P/E is 18.3 well below
the S&P 500's 20.6 multiple, another indicator that there are many attractively
valued stocks outside of the current market favorites.
As we look out to 1998, we will see further growth in the U.S. economy
although events in Asia may dampen original growth estimates by about 0.5%. We
have made the appropriate adjustments in our estimates in those multinational
companies affected by Asia. Near-term market volatility has increased, but
remains low compared to previous years' levels. This is because the economy is
not as volatile in that we have not experienced such wide variations in the
business cycle. The environment for the financial markets looks constructive.
Slow, steady economic growth with less volatile swings will result from slower
population growth and better information technology.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 12/31/87 $50,264 Growth & Income Portfolio
(10-Year-Period) $52,543 S&P 500 Index*
[GRAPH APPEARS HERE]
- ---------------------------------------------
Growth & Income
Date S&P 500 Index Portfolio
12/31/87 10,000 10,000
12/29/89 15,359 14,914,89
12/31/91 19,415 19,576.58
12/31/93 22,993 24,160.42
12/29/95 32,012 32,246.42
12/31/97 52,543 50,263.55
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
General Electric Co. 3.7% 3.8%
Merck & Co., Inc. 3.0% 2.6%
PepsiCo., Inc. 2.9% 0.4%
Cendant Corp. 2.7% N/A
Microsoft Corp. 2.5% 2.8%
Home Depot, Inc. 2.5% 2.2%
Citicorp 2.3% 0.5%
General Re Corp. 2.2% 1.9%
BankAmerica Corp. 2.1% 3.1%
Johnson & Johnson 2.0% 2.2%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Growth & Income S&R 500 MorningStar
Portfolio Index Peer Group+
--------------- ------------ -----------
1 Year 29.79% 33.56% 29.30%
5 Years 18.71 20.24 18.82
10 Years 17.52 18.05 18.86
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Health Products and Services 12.1% 13.1%
Banks and Finance 8.3% 9.7%
Oils and Natural Gas Exploration and
Production 8.2% 8.1%
Insurance 7.2% 6.8%
Food, Beverage and Tobacco 6.3% 3.5%
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
7
<PAGE>
INCEPTION: MAY 1, 1996
- --------------------------------------------------------------------------------
LARGE CAP VALUE PORTFOLIO
T. ROWE PRICE ASSOCIATES, INC. BRIAN ROGERS
- --------------------------------------------------------------------------------
The equity market performed well in 1997 as good corporate earnings results,
continued low inflation, and a supportive interest rate environment provided
ample ammunition to fuel the advance. The performance of stocks in the second
half was particularly impressive in light of the market's October jitters and
concern over the volatility of the Asian markets.
Equity returns were notably impressive coming on the heals of considerable
market strength in 1995 and 1996. The 1995-1997 period, in fact, is the first
time in modern history that stock market returns have exceeded 20% in three
consecutive years.
In 1997, the total return for the Large Cap Value Portfolio was 28.56%, which
was behind the 35.18% return for the portfolio's benchmark, the Russell 1000
Value Index.
Electric utility and telephone company stocks performed well in the last six
months after a lengthy period of under-performance. Strong price appreciation
in stocks such as Bell Atlantic, BellSouth, BGE, and Unicom helped the
portfolio's return in the latter part of the year.
The equity market has provided investors with three unprecedented years of
prosperity, and the investment environment has been exceptionally conducive to
good returns. As prices have advanced, the market's valuation appeal and likely
near-term upside potential have diminished.
The volatility we experienced in the opening weeks of 1998, due in part to the
turmoil in Asia, is a reminder that investing entails risks that sometimes get
in the way of positive returns. While our emphasis is solely on uncovering
interesting investment values, we believe it is prudent to have more modest
expectations for equity market performance in the year ahead.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/1/96 $14,643 Large Cap Value Portfolio
(Portfolio Inception Date) $15,503 Russell 1000 Value Index
[GRAPH APPEARS HERE]
- -----------------------------------------------------------------------------
Date Russell 1000 Value Index Large Cap Value Portfolio
4/30/96 10000 10000
1/1/97 12024 11698.63
12/31/97 15503 14643.15
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
AT&T Corp 2.0% 1.0%
Mellon Bank Corp 2.0% 1.8%
Dow Chemical Co. 1.6% 1.8%
Atlantic Richfield Co. 1.5% 1.7%
Altel Corp 1.5% 1.1%
American Home Products Corp 1.4% 1.0%
Union Pacific Corp 1.4% 1.0%
Philip Morris Cos., Inc 1.2% 0.7%
Exxon Corp. 1.2% 1.5%
Anheuser-Busch Cos. Inc 1.2% 0.9%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Large Cap Russell 1000 MorningStar
Value Portfolio Value Portfolio Peer Group+
--------------- ------------ -----------
1 Year 28.56% 35.18% 26.50%
Since Inception 25.63 30.09 N/A
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Oils and natural Gas Exploration
and Production 11.6% 9.1%
Banks and Finance 9.7% 10.7%
Utilities - Telecommunications 9.6% 7.6%
Utilities - Electric 8.4% 7.7%
Food, Beverage and Tobacco 7.6% 7.0%
*Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will flucuate so that shares, when redeemed, may be worth more or
less than their original cost.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
+Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
8
<PAGE>
INCEPTION: MARCH 29, 1986
- --------------------------------------------------------------------------------
LARGE CAP GROWTH PORTFOLIO
INDEPENDENCE INVESTMENT ASSOCIATES, INC. MICHAEL G. TROTSKY
- --------------------------------------------------------------------------------
The Large Cap Growth Portfolio is designed to outperform the Russell 1000
Growth Index while maintaining index-like characteristics in terms of industry
exposure, risk, and volatility of returns. For the year ended December 31,
1997, the Large Cap Growth portfolio returned 30.89% versus 30.48% for the
Russell 1000 Growth Index. Over the last three years the portfolio has returned
107% and has clearly benefited from the unusual bull market in large
capitalization stocks.
The fourth quarter was a difficult environment, but in spite of the volatility
and large drop in the market in October, the large cap growth market was up
1.5%. Asian uncertainty drove investors' back into a few high-quality, safe,
and trusted names. Value stocks outperformed growth stocks by nearly 3% in the
quarter. Sectors doing well in the quarter included utilities, consumer
services, and consumer non-cyclicals. Underperforming sectors included
technology, basic materials, and energy. The Large Cap Growth Portfolio
returned 0.8% in the difficult fourth quarter compared to the index return of
1.5%. The best performing stocks in the quarter included Home Depot, Bristol
Myers, and Johnson and Johnson. Major holdings going forward include General
Electric, Merck, Cendant, Home Depot, Microsoft, and Lucent.
Amidst the worldwide economic turmoil so apparent in the fourth quarter, the
U.S. is the perceived economic safe haven. GDP growth continues to be strong,
labor markets remain tight as unemployment reached a 25-year low in November,
and there are no clear signs of inflation. There is virtually no pressure on
the Fed to raise interest rates as the overseas economic turmoil is expected to
dampen U.S. economic growth and inflation in 1998. We project that the U.S.
economy will grow modestly in 1998 and 1999. With a forecast for 4% corporate
profit growth in 1998 and 1% in 1999, we continue to believe that growth stocks
will outperform the broader markets in a prolonged slowing economy as investors
flock to earnings power.
- -------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 12/31/87 $50,528 Large Cap Growth Portfolio
(10-Year-Period) $50,917 Large Cap Growth Benchmark(1)
[GRAPH APPEARS HERE]
- -------------------------------------------
Date Large Cap Growth Portfolio Large Cap Growth Benchmark(1)
Dec 1987 8,259 8,626.04
Dec 1989 12,682 12,871
Dec 1991 16,032 17,264.03
Dec 1993 18,992 21,600.25
Dec 1995 26,474 28,155.55
Dec 1997 50,917 50,528
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
General Electric Co. 5.1% 5.3%
Merck & Co., Inc. 4.5% 4.7%
Cendant Corp. 3.9% N/A
Lucent Technologies, Inc 3.4% 0.8%
Home Depot, Inc 3.4% 2.6%
Microsoft Corp 3.2% 3.7%
PepsiCo, Inc 3.0% N/A
Bristol-Myers Squibb Co. 3.0% 1.4%
Johnson & Johnson 3.0% 3.4%
United Technologies Corp. 2.8% 2.2%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Large Cap Large Cap Growth MorningStar
Growth Portfolio Benchmark(1) Peer Group+
---------------- ---------------- -----------
1 Year 30.89% 30.48% 25.25%
5 Years 18.09 19.50 14.88
10 Years 17.59 17.68 15.39
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Health Care Products and Serivces 22.3% 22.3%
Diversified Operations 12.6% 7.9%
Food, Beverages and Tobacco 7.3% 5.2%
Retail 7.1% 7.3%
Computer Software and Services 6.8% 7.1%
(1) The index is represented by the S&P 500 for the period April 1986 to April
1996 and the Russell Large Cap Growth Index for the period May 1996 to
December 31, 1997.
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does
not reflect expense and charges of the applicable separate accounts and
variable products, all of which vary to a considerable extent and are
described in your product prospectus.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from
reliable sources, data completeness and accuracy cannot be guaranteed.
9
<PAGE>
INCEPTION: MAY 1, 1996
- --------------------------------------------------------------------------------
EQUITY INDEX PORTFOLIO
STATE STREET GLOBAL ADVISORS MANAGEMENT TEAM
- --------------------------------------------------------------------------------
The Equity Index Portfolio returned 10.50% from July 1, 1997 through December
31, 1997. In comparison, the S&P 500 Index returned 10.57%. The S&P 500
continued its wild ride by returning 33.36% in the year ended December 31,
1997. This marks the third consecutive year the index had very strong returns
of well over 20% annually. The index return in 1996 was 22.96% and 37.58% in
1995.
The Equity Index Portfolio grew steadily in the second half of 1997. The fund
nearly doubled its net assets during this time, growing from $52.3m to $101m.
The top ten holdings of the fund on December 31, 1997 were the same as those on
June 30, 1997 with small changes in relative weights. Interesting to note, over
11% of the capitalization of the index was accounted for by the top five
holdings: General Electric, Coca Cola, Microsoft, Exxon and Merck.
The Equity Index Portfolio attempts to track the performance of the S&P 500 by
fully replicating the index. The fund attempts to match the security names and
percentage weights for each security in the S&P 500 index in order to provide
returns close to the index return.
The net assets of the Portfolio have quadrupled since December 31, 1996,
increasing to approximately $101 million. As was the case in 1996, the
Portfolio's year-to-date total return in 1997 has been negatively impacted by
the size of cash flows relative to the size of the Portfolio and the equity
market's volatility. Acknowledging such activity, John Hancock has continued to
waive all fees charged to the Portfolio for 1997 and will continue to do so for
an as yet undetermined period in 1998. John Hancock also made capital
contributions totaling $250,000 into the Portfolio during 1997. Including the
capital contributions, the Portfolio had a net return of 32.79%(1) versus
33.36% for the S&P 500 Index for the year ended December 31, 1997. As the
Portfolio's net assets continue to get larger, we expect the investment returns
will more closely match those of the S&P 500 Index.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/1/96 $15,169 Equity Index Portfolio
(Portfolio Inception Date) $16,342 S&P 500 Index
[GRAPH APPEARS HERE]
- ---------------------------------------------
Equity Index
Date S&P 500 Index Portfolio
5/1/96 10,258 10,210.21
1/1/97 12,218 12,132.53
12/31/97 15,342 15,168.85
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
General Electric Co. 3.1% 3.2%
Coca-Cola Co. 2.1% 2.5%
Microsoft Corp. 2.0% 2.2%
Exxon Corp. 1.9% 2.3%
Merck & Co., Inc. 1.6% 1.8%
Royal Dutch Petroleum Co. 1.5% 1.7%
Intel Corp. 1.6% 1.7%
Phillip Morris Cos., Inc. 1.4% 1.6%
Proctor & Gamble Co. 1.4% 1.4%
International Business Machines Corp. 1.3% 1.3%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Equity Index S&R 500 MorningStar
Portfolio Index Peer Group+
------------- ------------ -----------
1 Year 32.79% 33.36% 29.30%
Since Inception(1) 28.31 29.28 N/A
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Health Products and Services 11.0% 8.4%
Banks and Finance 8.3% 7.2%
Oils and Natural Gas Exploration and
Production 7.8% 6.5%
Food, Beverage and Tobacco 7.2% 7.6%
Utilities - Telecommunications 6.4% 5.5%
(1)The net return without the capital contribution would have been 32.47% for
the period ending December 31, 1997 and 28.14% since inception.
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product prospectus.
. "Standard & Poor's 500" is a trademark of The MaGraw-Hill Companies, Inc. and
has been licensed for use by John Hancock Mutual Life Insurance Company. The
product is not sponsored, endorsed, sold or promoted by Standard & Poor's and
Standard & Poor's makes no representation regarding the advisability of
investing in the product.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from
reliable sources, data completeness and accuracy cannot be guaranteed.
10
<PAGE>
INCEPTION: MAY 16, 1988
- --------------------------------------------------------------------------------
REAL ESTATE EQUITY PORTFOLIO
INDEPENDENCE INVESTMENT ASSOCIATES, INC. DALTON AVERY
- --------------------------------------------------------------------------------
The strong performance that REITs showed in 1996 had two negative effects on
their performance in 1997. First, valuation of REITs were high relative to
their historical averages which caused some correction in the stocks early in
1997 and kept earnings multiples stable over the second half of the year.
Second, higher prices for REIT stocks encouraged heavy equity issuance. In the
first half of 1997 REITs raised $12 billion in new equity capital. Over the
remainder of the year an additional $9 billion was raised. This more than
offset the money flow into REIT mutual funds and reduced demand for seasoned
REIT stocks.
REITs enjoyed a strong second half of 1997. These issues participated in the
strong rally in small to mid-sized equities, especially in the third quarter.
This rally developed as investors moved away from the very large
capitalization, multi-national firms that have led the general equity market
over the past few years.
The portfolio is diversified across all the real estate property types with
increasing emphasis on office, industrial, and hotel REITs. The best performing
stocks in the fourth quarter were in the office and industrial sectors. The
portfolio's top performers were all in this sector; Vornado Realty, Security
Capital Industrial Trust and Duke Realty Investments. The anchors for the
quarter were the two hotel REITs that performed so well in prior quarters,
Patriot American Hospitality and Host Marriott. Both stocks were weak in
December as the overall market had some second thoughts on the hotel business.
This sentiment affected both hotel REITs and hotel C corps.
The Real Estate Equity Portfolio outperformed its benchmark in the fourth
quarter although the Portfolio did trail the benchmark for the full year. In
our opinion, real estate markets around the country are at or near equilibrium.
We believe that our investment strategy, focused on selecting REIT issues
priced cheaply relative to their worth and having improving fundamentals, will
provide superior performance over time.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/16/88 $28,978 Real Estate Equity Portfolio
(Portfolio Inception Date) $20,988 Willshire Real Estate Index
[GRAPH APPEARS HERE]
- ---------------------------------------------
Willshire Real Real Estate
Date Estate Index Equity Portfolio
May 1988 10,000 10,000
Dec 1990 7,462 8,851.39
Dec 1992 9,615 13,709.49
Dec 1994 11,263 16,540.69
Dec 1996 17,520 24,720.17
Dec 1997 20,988 28,977.57
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Equity Residential Properties Trust 4.4% 3.6%
Starwood Lodging Trust 4.1% 2.4%
Patriot American Hospitality, Inc. 3.6% 3.8%
Cresent Real Estate Equities, Inc. 3.3% N/A
Host Marriott, Inc. 3.1% 3.3%
BRE Properties, Inc. 3.0% 3.1%
Cetellus Development Corp 2.9% 2.4%
Liberty Property Trust 2.9% 2.9%
Duke Realty Investments, Inc. 2.9% 2.4%
United Dominion Realty Trust, Inc. 2.9% 3.4%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Real Estate Wilshire Real
Equity Portfolio Estate Index
---------------- -------------
1 Year 17.22% 19.80%
5 Years 16.15 16.90
Since Inception 11.68 7.97
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Real Estate Investment Trust 91.7% 91.9%
Real Estate Development 5.3% 4.8%
Lodging 3.0% 3.3%
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost. Sector investing entails special risks as
discussed in the prospectus.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
11
<PAGE>
INCEPTION: MAY 1, 1996
- --------------------------------------------------------------------------------
MID CAP VALUE PORTFOLIO
NEUBERGER & BERMAN, LLC M. KASSEN & R. GENDELMAN
- --------------------------------------------------------------------------------
The six month period ending December 31, 1997 consisted of two very different
quarters. In the third quarter, selective stock picking emerged as the
investment style of choice versus simply investing in the top S&P 500 Index
stocks. The fourth quarter, led by turbulent events in Asia, saw a resumption
of money flows into the larger capitalization growth issues. Despite this
challenging environment for mid cap value investing in the second half of 1997,
the Mid Cap Value Portfolio returned 32.17%, net of fees, versus 34.37% for the
Russell Mid Cap Value Index for the full year of 1997.
We continue to believe that mid-cap stocks provide the best investment
opportunities. We are using the volatility in the overall market to improve
both the quality and potential returns of the Portfolio. Where possible, we
have purchased industry leaders such as KLA Instruments, Nucor, and Union Camp
at multiples no higher than their respective industry groups. Moreover, we were
able to purchase certain world class companies, Amgen to name one, at discount
valuations to both the market and its industry group.
We took profits in many stocks that met or exceeded our price targets. For
example, Equitable, Kansas City Southern, and Tidewater were sold to make room
for better investment ideas.
In summary, we believe that many large capitalization issues are fairly or
fully valued and that many mid-cap stocks have been overlooked and are trading
at attractive valuations. We are pleased with the performance of the Mid Cap
Value Portfolio, and expect it to continue to provide competitive rates of
return over time.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/1/96 $15,355 Mid Cap Value Portfolio
(Portfolio Inception Date) $15,175 Russell Mid Cap Value Index
[GRAPH APPEARS HERE]
- ---------------------------------------------
Russell Mid Cap Mid Cap Value
Date Value Index Portfolio
5/1/96 10,000 10,000
12/31/96 11,294 11,617.97
12/31/97 15,175 15,355.19
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Owens-Illinois, Inc. 2.6% 1.1%
Praxair 2.6% N/A
Crown Cork & Seal Co., Inc. 2.5% N/A
Orion Capital Corp. 2.4% N/A
Harcourt General, Inc. 2.4% 2.5%
UST, Inc. 2.2% 1.5%
E.W. Scripps Co. 2.2% 0.6%
Partere, Ltd. 2.1% N/A
Biogen, Inc. 2.1% 1.1%
Host Marriott Corp 2.0% 3.0%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Mid Cap Russell Mid Cap MorningStar
Value Portfolio Value Index Peer Group+
--------------- --------------- -----------
1 Year 32.17% 34.37% 27.57%
Since Inception 29.26 28.43 N/A
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Health Products and Services 9.4% 4.3%
Oils and Natural Gas Exploration and
Production 8.9% 7.4%
Media 7.7% 9.0%
Insurance 6.5% 3.6%
Miscellaneous 6.3% 2.6%
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so the shares, when redeemed, may be worth more or
less than their original cost.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
12
<PAGE>
INCEPTION: MAY 1, 1996
- --------------------------------------------------------------------------------
MID CAP GROWTH PORTFOLIO
JANUS CAPITAL CORPORATION JIM GOFF
- --------------------------------------------------------------------------------
As the year began, small and mid-size stocks came under tremendous pricing
pressure, especially smaller stocks with high growth rates. Investors became
infatuated with liquidity issues, which created a major performance gap between
large stocks and their smaller counterparts. In this environment, we lost
ground and finished the early part of the year lower. But the market's
fascination with the mega-caps eventually slowed, and investors once again
began to focus on small and midsize stocks. The Russell Mid Cap Growth Index
posted particularly impressive numbers mid-year; however, these returns were
driven mostly by technology and energy stocks, areas in which the Portfolio was
underweighted. Meanwhile, our investments in wireless communication and
restaurant stocks underperformed, and several consumer discretionary holdings
failed to post substantial gains. This combination, coupled with our
underweighting in key performing sectors, proved to be a drag on performance
for much of the year.
During the fourth quarter, however, we had a number of standouts, including
Farmer Mac, Outdoor Systems, Paychex, and Chancellor Media--each gaining in
excess of 40%. We also had several other strong performers that gained over
15%, including Star Banc, Clear Channel, Protective Life, UICI, and
Pricellular. What's interesting for each company is that the individual
fundamentals remain unchanged, but investors began to take notice of their
underlying growth.
Going into the New Year, the key will be owning stocks that can deliver
excellent growth when earnings begin to dissipate. I believe that plays to our
strength, because many of our companies have either met or exceeded earnings
estimates for many quarters. Owning companies with superior earnings growth has
always been my focus, and it will remain so going forward.
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/1/96 $11,980 Mid Cap Growth Portfolio
(Portfolio Inception Date) $12,959 Russell Mid Cap Growth
Index*
[GRAPH APPEARS HERE]
- --------------------------------------------------------------------------------
Russell Mid Cap Mid Cap Growth
Date Growth Portfolio
5/1/96 10,000 10,000
1/1/97 10,993 9,993.7
12/31/97 12,959 11,979.95
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Omnicare, Inc. 5.9% 3.5%
Paychex, Inc. 5.9% 2.1%
J.D. Wetherspoon pic 5.1% 5.3%
PizzaExpress pic 4.2% 5.1%
Clear Channel Communication Inc. 4.1% 3.1%
Appollo Group, Inc. 4.0% 2.4%
Fastenal Co. 3.9% 8.3%
Aes Corp. 3.2% N/A
Petco Animal Supplies 2.6% 5.1%
Cadence Design Systems, Inc. 2.6% N/A
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Mid Cap Russell Mid Cap MorningStar
Growth Portfolio Growth Index Peer Group+
---------------- ------------ -----------
1 Year 16.66% 23.10% 16.04%
Since Inception 11.42 16.83 N/A
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Lodging and Restaurants 11.6% 8.7%
Retail 10.5% 19.2%
Business Services 10.4% 5.6%
Media 10.1% 6.8%
Health Products and Services 8.6% 9.2%
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so the shares, when redeemed, may be worth more or
less than their original cost.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in you
product prospectus.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
13
<PAGE>
INCEPTION: MAY 1, 1994
- --------------------------------------------------------------------------------
SPECIAL OPPORTUNITIES PORTFOLIO
JOHN HANCOCK ADVISERS, INC. MANAGEMENT TEAM
- --------------------------------------------------------------------------------
The macroeconomic factors driving our investment strategy, stable economic
growth with low inflation and low interest rates, were present throughout the
last half of 1997. The portfolio underperformed its benchmark, returning 10.29%
versus 10.86% for the Russell Mid Cap Growth Index.
We maintained our overweight in the financial sector, and were rewarded by
handsome returns. Several of our financial companies produced excellent returns
as they continued to produce strong earnings growth. The mid-sized financials
we focus on attracted positive attention as they were insulated from the tumult
in Asia. With worries about the health of the domestic economy, we sought out
the inherently stable earnings growth of the consumer staples companies, which
will be able to produce above-average earnings growth through any economic
cycle.
Several factors emerged during the period which caused us to decrease our
exposure to the energy sector. Lower projected Asian demand for energy products
led to falling energy prices. As a result, major international energy
corporations decreased their future capital expenditure budgets. The earnings
outlook for the energy companies in our portfolio became uncertain as they
provide services to these major energy producers. We also moved quickly to sell
many technology firms whose sales rely heavily on Asian demand. As those
country's currencies are devalued, the U.S. dollar value of those sales are
reduced, negatively impacting earnings.
We believe we are well positioned to take full advantage of the favorable
economic conditions which will persist for the foreseeable future. The
portfolio will consist mostly of companies whose ability to generate above-
average earnings growth is resistant to economic shocks.
- ----------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/1/94 $18,432 Special Opportunities Portfolio
(Portfolio Inception Date) $19,610 Russell Mid Cap Growth Index
[GRAPH APPEARS HERE]
- ----------------------------------------
Russell Mid Cap Special Opportunities
Date Growth Index Portfolio
May 1994 10,000 10,000
Dec 1995 13,560 13,672.48
Dec 1996 15,930 17,819.82
Dec 1997 19,610 18,432.25
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Sulza Food Corp. 3.6% N/A
Quaker Oates Co. 3.3% 0.9%
C.B.S. Corp 3.3% N/A
Teleport Communications Group Inc. 3.2% N/A
CVS Corp. 3.0% 2.4%
CMAC Investment Corp. 3.0% N/A
Dole Food Co. 3.0% N/A
EMC Corp 3.0% N/A
T. Rowe Price Associates 2.8% N/A
U.S. Bancorp 2.8% N/A
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Special Opportunities Russell Mid Cap MorningStar
Portfolio Growth Index Peer Group+
--------------------- --------------- -----------
1 Year 3.44% 23.10% 16.04%
Since Inception 18.20 20.16 N/A
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Retail 14.6% 7.6%
Food, Beverage and Tobacco 14.0% 8.8%
Banks and Finance 10.1% 12.4%
Insurance 9.1% 10.8%
Media 8.0% N/A
* Total returns are for the period ended December 31, 1997, returns represent
past performance, assume reinvestment of all distributions, and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate that shares, when redeemed, may be worth more or
less than their original cost. Sector investing entail special risks as
discussed in the prospectus.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
14
<PAGE>
INCEPTION: MAY 1, 1996
- --------------------------------------------------------------------------------
SMALL CAP VALUE PORTFOLIO
INVESCO MANAGEMENT & RESEARCH BOB SLOTPOLE
- --------------------------------------------------------------------------------
The U.S. economic recovery is completing its seventh year of sustained growth,
an elderly run by historic standards, and is showing few signs of ending. In
fact, the current environment is very favorable. Employment growth is strong,
with unemployment at a 24 year low, interest rates and inflation are low and
declining, and inventories are well controlled.
Even major economic turbulence in Asia in the fourth quarter could not derail
the bull market in equities. Large cap stocks struggled in October, but
recovered toward year end, with the Standard & Poor's 500 returning 33.4% for
the year. The near perfect investment environment of low interest rates,
declining inflation, strong profitability, and a strong U.S. competitive
position all fueled the third year of exceptional gains. Small stocks and real
estate also had strong returns, but lagged well behind those of large cap
stocks. The Asian crisis seemed to promote a flight to the perceived higher
quality of the largest U.S. companies. International stocks were a "tale of two
regions," with European stocks doing quite well while Asian stocks were
plummeting, leaving the EAFE Index with a 2.1% return for the year. The John
Hancock Small Cap Value Portfolio advanced 25.57% for the year. This compares
favorably with the 22.36% rise of the Russell 2000 Index. We are content to own
companies in which management owns a significant stake, the use of debt reflects
the riskiness of the business, and where management has a clearly articulated
business strategy. In this way, we hope to deliver consistency as well as the
above average returns that smaller companies have historically generated.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/1/96 $13,855 Small Cap Value Portfolio
(Portfolio Inception Date) $12,874 Russell 2000 Index
[GRAPH APPEARS HERE]
- ---------------------------------------------
Small Cap Value
Date Russell 2000 Portfolio
5/1/96 10,000 10,000
1/1/97 10,732 11,114.52
12/31/97 12,874 13,855.26
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Magna Group, Inc. 1.6% 1.1%
Spring Industries, Inc. 1.5% 0.5%
ONBAN Corp, Inc. 1.5% 0.4%
Trigon Healthcare, Inc 1.4% 0.3%
Aptar Group, Inc. 1.4% 0.3%
Bristol Hotel Co. 1.2% 0.5%
Arvin Industries Inc. 1.2% 0.8%
Carbiner International, Inc. 1.1% N/A
Orion Capital Corp. 1.1% 0.9%
DIMON, Inc. 1.1% 0.2%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Small Cap Russell 2000 MorningStar
Value Portfolio Index Peer Group+
--------------- --------------- -----------
1 Year 25.57% 22.36% 26.19%
Since Inception 21.54 16.37 N/A
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Banks and Finance 10.1% 8.6%
Health Products and Services 9.9% 10.9%
Insurance 6.4% 5.6%
Retail 6.3% 5.4%
Real Estates Investment Trust 5.7% 3.7%
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost. Small-company investing entails special risks
as outlined in the prospectus.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
15
<PAGE>
INCEPTION: MAY 1, 1996
- --------------------------------------------------------------------------------
SMALL CAP GROWTH PORTFOLIO
JOHN HANCOCK ADVISERS, INC. BERNICE BEHAR
- --------------------------------------------------------------------------------
For the six months ended December 31, 1997, the Small Cap Growth Portfolio
returned 8.14% versus 7.34% for the Russell 2000 Growth Index. Returns reflect
vastly different market environments from one quarter to the next. Small cap
stocks fueled by a reduction in the capital gains tax rate, a stronger dollar,
and cheap valuations outperformed large cap stocks during the third quarter. In
the fourth quarter, the market dramatically changed as the turmoil in Southeast
Asia unfolded sending investors back to large cap stocks.
Consumer staples was the best performing sector. Our focus was in the media
and supermarket areas. Domestic media companies experienced a good pricing
environment and there has been a renewed focus in the market on domestic media
plays. In particular, Heftel Broadcasting Corporation, a Spanish language radio
broadcasting company, returned 69% as revenues significantly increased. Quality
Food Centers, a northwest based retail supermarket chain, returned 79% as it
was acquired by Fred Meyer.
Technology detracted from our performance. The collapse of Asian stock markets
and the Asian currency crisis severely impacted semiconductor stocks. We
selectively eliminated our exposure to semiconductor companies, like Zoran
Corporation, whose earnings suffered from increased R&D expenditures. While the
Asian crisis adversely impacted the majority of technology stocks, we held
several positive performers like Aspect Development, a maker of client server-
based enterprise software, which gained 104%.
Historically, small company stock prices peak when they sell for roughly twice
that of large companies. Currently, small company stocks are selling at roughly
1.2 times. In our view, this suggests small cap growth companies have
compelling valuations which investors will soon recognize.
- ----------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/1/96 $11,370 Small Cap Growth Portfolio
(Portfolio Inception Date) $11,037 Russell 2000 Growth Index
[GRAPH APPEARS HERE]
- ----------------------------------------
Russell 2000 Small Cap Growth
Date Growth Index Portfolio
May 1, 1996 10,000 10,000
Jan 1, 1997 10,016 10,302.13
Dec 1997 11,037 11,369.73
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Network Appliance, Inc. 1.4% 0.8
Heftel Broadcasting Corp 1.1% 0.9%
Quality Food Centers, Inc 1.0% 1.0%
Lamar Advertising Co. 1.0% N/A
Linens 'N Things, Inc. 0.9% 0.9%
Abacus Direct Corp. 0.9% N/A
Newpark Resources, Inc. 0.9% 1.2%
On Assignment, Inc. 0.9% 0.8%
Suiza Foods Corp. 0.9% N/A
Medallion Financial Corp. 0.8% 0.8%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Small Cap Russell 2000 MorningStar
Growth Portfolio Growth Index Peer Group+
---------------- ------------ -----------
1 Year 14.26% 12.95% 13.97%
Since Inception 7.98 6.10 N/A
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Health Products and Services 12.3% 8.4%
Retail 9.2% 9.8%
Computer Software and Services 8.7% 13.5%
Miscellaneous 6.5% 4.8%
Business Services 5.4% 3.9%
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost. Small-company investing entails special risks
as outlined in the prospectus.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
16
<PAGE>
INCEPTION: MAY 1, 1996
- --------------------------------------------------------------------------------
INTERNATIONAL BALANCED PORTFOLIO
BRINSON PARTNERS, INC. MANAGEMENT TEAM
- --------------------------------------------------------------------------------
Over 1997, international equity markets returned 16.12% on a dollar-hedged
basis. The performance varied widely as European markets gained 39.70%, while
the Pacific region declined 12.90% in dollar-hedged terms. Over this same time
frame, international bonds rose 11.07% in dollar-hedged terms. Most major
currencies declined relative to the U.S. dollar. The exception was the Hong
Kong dollar that registered a roughly flat return for the year.
Europe's strength reflected an environment of benign inflation, low interest
rates, improving growth and ongoing company restructuring. With respect to
Southeast Asia, many excesses are now coming to light in the respective
countries as the devaluation of the Thai baht on July 2 catalyzed a keener
investigation of monetary policies and weaknesses in the corporate sector.
These economies will be helped by acceptance of badly needed reforms required
by the International Monetary Fund (IMF), but the austerity required to
reestablish balance will be long and fairly painful. The level of bad loans in
these countries is severe, as the cost of repaying foreign borrowings has
become substantially more onerous after the devaluations.
In the International Balanced Portfolio, we continue to emphasize the more
reasonably priced international bond markets relative to the expensive
international equity markets. The Portfolio continues to hold no strategic
cash. Within equities, we have established modest overweight positions in
Malaysia and Singapore where there are opportunities for substantial returns.
Conversely, in recognition of a number of vulnerabilities in the Japanese
economy, we maintain a significant underweight position. We continue to
emphasize New Zealand and Australia, and within Europe, Belgium, Italy and the
U.K. Among international bonds, the portfolio continues to have no exposure to
the unattractive Japanese bond market. We continue to emphasize bond
investments within Denmark, Germany, Australia, the Netherlands, Spain, and the
U.K.
The Portfolio's currency strategies include a small underweight position in
the Japanese yen and Hong Kong dollar. The Portfolio maintains a small
underweight in the British pound sterling, while the core European currencies
remain at a neutral weight. These underweights are offset by a small U.S.
dollar overweight.
- ---------------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/1/96 $10,955 International Balanced
(Portfolio Inception Date) Portfolio
$10,287 International Balanced
Composite Index (A)
[GRAPH APPEARS HERE]
- ---------------------------------------------
International Balanced International
Date Composite Index (A) Balanced Portfolio
5/1/96 10,000 10,000
1/1/97 9,927 10,508.77
12/31/97 10,287 10,955.08
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Federal Republic of Germany 10.8% 10.2%
United Kingdom 7.5% 4.8%
Kingdom of Denmark 5.1% 5.0%
Government of Canada 5.1% 6.3%
Government of Netherlands 4.1% 6.1%
Government of Spain 3.1% 3.5%
Republic of Italy 2.5% 3.5%
Government of France 1.7% 2.7%
Queensland Treasury 1.7% 2.7%
Commonwealth of Australia 1.6% N/A
Average Annual Total Returns*
- --------------------------------------------------------------------------------
International
International Balanced MorningStar
Balanced Portfolio Composite Index (A) Peer Group+
------------------ ------------------- -----------
1 Year 2.65% 0.09% 4.64%
Since Inception 5.61 1.71 N/A
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Foreign Governments 44.4% 43.4%
Banks and Finance 7.7% 7.3%
Diversified Operations 4.1% 3.4%
Health Products and Services 4.1% 3.7%
Food, Beverage and Tobacco 3.8% 3.9%
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more
or less than their original cost. There are special risks associated with
international investing including currency fluctuations, political and
economic instability, foreign taxation and different accounting standards,
as outlined in the current prospectus.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does
not reflect expense and charges of the applicable separate accounts and
variable products, all of which vary to a considerable extent and are
described in your product prospectus.
(A) International Balanced Composite Index: 65% Morgan Stanley Capital
International World Index Excluding US, and 35% Salomon Brothers Non-US
Govt. Bond Index excluding US Taxes.
There are special risks associated with international investing, including
currency fluctuations, political and economic instability, foreign taxation
and different accounting standards, as outlined in the current prospectus.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from
reliable sources, data completeness and accuracy cannot be guaranteed.
17
<PAGE>
INCEPTION: MAY 2, 1988
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITIES PORTFOLIO
JOHN HANCOCK ADVISERS, INC. MIREN ETCHEVERRY
- --------------------------------------------------------------------------------
For the six months ended December 31, 1997, the International Equities
Portfolio returned (14.58)% versus (8.48)% for the MSCI EAFE Index. The period
was characterized by increased volatility and greater disparity of returns
between developed and emerging markets mainly due to the turbulence in
Southeast Asia. A contagion effect rippled through other emerging markets,
particularly in Latin America.
We increased our exposure to Europe. While the turmoil in Southeast Asia had
an effect on European companies doing business there, the overall fundamentals
in European markets remain strong: moderate growth combined with low inflation.
European companies are just beginning to restructure. Merger and acquisition
activity increased as the effects of deregulation took hold.
We reduced our exposure to Southeast Asia as the regions woes were deeper than
anticipated. Driven by excessive investment, high domestic savings rates and
leverage from foreign capital, Southeast Asia's capital stock was overbuilt
resulting in a severely weakened financial sector, an external imbalance, and a
currency crisis. We expect relatively high interest rates and an economic
slowdown.
We remain overweight in Latin America. While the Asian crisis is rooted in
fundamentals, the situation in Latin America, particularly Brazil, is a direct
result of emotions and in many cases panic. While there is some uncertainty
about Brazil, it is at the beginning of a liberalization process creating a
market worth tens of billions of dollars over the next few years. The World
Bank identifies it as one of the fastest growing emerging markets. In Brazil,
as is the case for the rest of Latin America, economic growth and outlook is
more closely related to the United States and Europe.
- ----------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/2/88 $18,674 International Equities Portfolio
(Portfolio Inception Date) $16,131 MSCI EAFE Index
[GRAPH APPEARS HERE]
- ----------------------------------------
MSCI EAFE International Equities
Date Index Portfolio
May 2, 1988 10,000 10,000
1990 9,199 11,021.53
1992 9,223 13,263.83
1994 13,236 16,830.42
1996 16,008 19,612.01
Dec 31, 1997 16,131 18,673.52
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Allied Irish Banks PLC 6.3% N/A
Novartis AG 5.3% 2.1%
Panamerican Beverages 4.0% 4.0
Normandy Mining Ltd. 3.9% N/A
Bayensche Motoren Weke AG 3.8% N/A
Centrals Electricas Brasileiras SA 3.7% 3.6%
Toronto Dominium Bank Ontario 3.3% N/A
Carrefour 3.2% N/A
EMAP 3.2% 1.6%
Sony Corp 3.1% 2.9%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
International MSCI EAFE MorningStar
Equities Portolio Index Peer Group+
----------------- --------- -----------
1 Year -5.03% 2.06% 13.80%
5 Years 6.79 11.71 5.90
Since Inception 6.67 5.07 N/A
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Banks and Finance 21.3% 4.6%
Telecommunications 7.9% 10.5%
Retail 7.0% 4.0%
Insurance 6.6% N/A
Media 6.2% 4.8%
* Total returns are for the period ended December 31, 1997, returns represent
past performance, assume reinvestment of all distributions, and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
There are special risks associated with international investing, including
currency fluctuations, political and economic instability, foreign taxation
and different accounting standards, as outlined in the current prospectus.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
18
<PAGE>
INCEPTION: MAY 1, 1996
- --------------------------------------------------------------------------------
INTERNATIONAL OPPORTUNITIES PORTFOLIO
ROWE PRICE-FLEMING INTERNATIONAL, INC. MARTIN WADE
- --------------------------------------------------------------------------------
In 1997, the total return for the International Opportunities Portfolio was
1.95%, which was roughly even with the 2.06% return for the portfolio's
benchmark, the Morgan Stanley Capital International Europe, Australia, Far East
Index.
Performance in Asian markets was very poor, with even the Japan's Nikkei
falling back to its bear-market lows. In Latin America, markets rose sharply
despite their Asia-induced stumble towards year end. The dollar had a strong
year--gaining some ground against the yen and even more against European
currencies, which hampered returns for the Portfolio.
Country allocation relative to the benchmark index was positive over the year.
Under-weighting Japan and over-weighting Latin America added value, although
this value-added was eroded by an underweight position in the U.K. and an
overweight position in the first half of the year in some smaller Asian
markets.
International markets behaved in divergent fashion in 1997 with Europe and
Latin America areas of strength while Asia has been very poor indeed. Looking
forward, the outlook remains reasonable for European markets with corporate
profits growth likely to be strong supported by good economic growth and
further restructuring.
We expect that 1998 performance is likely to be driven by the European and
Latin American equity markets, with Asia remaining fragile. While there may be
some bounces in markets, which have fallen a long way already, we believe it is
a time to be particularly selective when looking at stocks traded in Asia.
- ----------------------------------------
Historical Portfolio Return
Value on 12/31/97:
$10,000 ------------------
investment made 5/1/96 $10,880 Internal Opportunities
(Portfolio Inception Date) Portfolio
$10,242 MSCI EAFE Index
[GRAPH APPEARS HERE]
- ----------------------------------------
MSCI EAFE International Opportunities
Date Index Portfolio
May 1, 1996 10,000 10,000
Jan 1, 1997 9,687 10,544.32
Dec 1997 10,242 10,880.04
Top Ten Holdings (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
National Westminster Bank 2.7% 1.8%
Royal Dutch Petroleum Co. 2.6% 2.5%
Novartis AG 2.4% 1.9%
SmithKline Beecham plc 1.9% 2.1%
Wolters Kluwer NV 1.8% 1.7%
Guinness plc 1.7% 0.7%
Telecomunicacoes Brasiteiras S/A-
Telebras-A 1.6% 2.5%
Reed International plc 1.5% 1.3%
Nestle SA 1.5% 1.0%
Compagaine Generale des Eaux 1.5% 1.3%
Average Annual Total Returns*
- --------------------------------------------------------------------------------
Intl. Opportunities MSCI EAFE MorningStar
Portfolio Index Peer Group+
------------------- --------- -----------
1 Year 1.95% 2.06% 5.90%
Since Inception 5.18 1.45 N/A
Top Five Industries (as of December 31, 1997)
- --------------------------------------------------------------------------------
% of six months ago
investments % of investments
Banks and Finance 14.0% 9.7%
Health Products and Services 10.6% 10.6%
Oils and Natural Gas Exploration
and Production 7.8% 6.6%
Diversified Operations 7.2% 8.0%
Retail 6.8% 7.3%
* Total returns are for the period ended December 31, 1997. Returns represent
past performance, assume reinvestment of all distributions and are not
indicative of future performance. Investment returns and principal value of
fund shares will fluctuate so that shares, when redeemed, may be worth more or
less than their original cost. There are special risks associated with
interntional investing including currency fluctuations, political and
economic instability, foreign taxation and different accounting standards, as
outlined in the current prospectus.
The performance of the portfolio on this page is reported net of Trust level
charges (i.e. investment management fees and operating expenses). It does not
reflect expense and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in your
product prospectus.
+ Source: MorningStar, Inc. Data as of 12/31/97. Although gathered from reliable
sources, data completeness and accuracy cannot be guaranteed.
19
<PAGE>
- --------------------------------------------------------------------------------
PORTFOLIO BENCHMARKS
- --------------------------------------------------------------------------------
STANDARD & POOR'S 500 INDEX: Covers 500 industrial, utility, transportation and
financial companies of the U.S. markets (mostly NYSE issues). The index
represents about 75% of NYSE market capitalization and 30% of NYSE issues.
RUSSELL 1000 GROWTH INDEX: Contains those Russell 1000 securities with a
greater-than-average growth orientation. Securities in this index tend to
exhibit higher price-to-book and price-earnings ratios, lower dividend yields
and higher forecasted growth values than the Russell 1000 Value Index.
RUSSELL 1000 VALUE INDEX: Contains those Russell 1000 securities with a less-
than-average growth orientation. Securities in this index tend to exhibit low
price-to-book and price-earnings ratios, higher dividend yields and lower
forecasted growth values than the Russell 1000 Growth Index.
RUSSELL MIDCAP GROWTH INDEX: Consists of the smallest 800 securities in the
Russell 1000 Growth Index, as ranked by total market capitalization. This index
captures the medium-sized universe of securities and represents approximately
34% of the Russell 1000 total market capitalization. The Russell Midcap Growth
Index contains securities with a greater-than-average growth orientation.
RUSSELL MIDCAP VALUE INDEX: Consists of the smallest 800 securities in the
Russell Value 1000 Index, as ranked by total market capitalization. This index
captures the medium-sized universe of securities and represents approximately
34% of the Russell 1000 total market capitalization. The Russell Midcap Value
Index contains securities with a less-than-average growth orientation.
RUSSELL 2000 GROWTH INDEX: Contains those Russell 2000 securities with a
greater-than-average growth orientation. Securities in this index tend to
exhibit higher price-to-book and price-earnings ratios, lower dividend yields
and higher forecasted growth values than the Russell 2000 Value Index.
RUSSELL 2000 INDEX: Consists of the smallest 2,000 in the Russell 3000 Index,
representing approximately 11% of the Russell 3000 total market capitalization
WILSHIRE REAL ESTATE SECURITIES INDEX: A market-capitalization weighted index
which measures the performance of more than 85 real estate securities. The
index contains performance data on five major categories of property: office,
retail, industrial, apartment and miscellaneous.
LEHMAN BROTHERS GOVERNMENT/CORPORATE BOND INDEX: Composed of all bonds that are
investment grade (rated Baa or higher by Moody's or BBB or higher by S&P, if
unrated by Moody's.) Issues must have at least one year to maturity.
LEHMAN BROTHERS AGGREGATE BOND INDEX: Composed of securities from the Lehman
Brothers Government/ Corporate Bond Index, the Mortgage-Backed Securities Index
and the Asset-Backed Securities Index.
MERRILL LYNCH 1-5 YEAR U.S. GOVERNMENT BOND INDEX: A capitalization-weighted
index calculated on a total return basis with dividends reinvested.
MORGAN STANLEY CAPITAL INTERNATIONAL EUROPE, AUSTRALIA, FAR EAST INDEX: An
arithmetic, market value-weighted average of the performance of over 900
securities listed on the stock exchanges of the following countries in Europe,
Australia, and the Far East: Australia, Austria, Belgium, Denmark, Finland,
France, Germany, Hong Kong, Ireland, Italy, Japan, Malaysia, Netherlands, New
Zealand, Norway, Singapore, Spain, Sweden, Switzerland and United Kingdom.
JP MORGAN NON-US GOVERNMENT BOND INDEX: A total return, market capitalization
weighted index, consisting of the following countries: Australia, Belgium,
Canada, Denmark, France, Germany, Italy, Japan, Netherlands, Spain, Sweden and
United Kingdom.
MORGAN STANLEY CAPITAL INTERNATIONAL WORLD INDEX EXCLUDING THE UNITED
STATES: An arithmetic, market value-weighted average of the performance of more
than 1000 securities listed on the stock exchanges of the following: Australia,
Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong,
Ireland, Italy, Japan, Malaysia, Netherlands, New Zealand, Norway, Singapore,
Spain, Sweden, Switzerland and United Kingdom.
SALOMON BROTHERS NON-US GOVERNMENT BOND INDEX: A market capitalization weighted
index consisting of the government bond markets of the following countries:
Australia, Austria, Belgium, Canada, Denmark, France, Germany, Italy, Japan,
Netherlands, Spain, Sweden, United Kingdom. Country eligibility is determined
based on market capitalization and investability criteria. All issues have a
remaining maturity of at least one year.
20
<PAGE>
- --------------------------------------------------------------------------------
MORNINGSTAR UNIVERSE -- PEER GROUPS (AS OF 12/31/97)
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO: Consistent with the Portfolio's objective, this peer
group represents an average annual total return for all variable annuity and
life products within the Morningstar variable universe that have a Money Market
objective.
SHORT TERM U.S. GOVERNMENT BOND PORTFOLIO: Consistent with the Portfolio's
investment style, this peer group represents an average annual total return for
all variable annuity and life products within the Morningstar variable universe
that have a Government Bond investment objective, combined with a High
Quality / Short maturity fixed income investment style.
SOVEREIGN BOND PORTFOLIO: Consistent with the Portfolio's investment style,
this peer group represents an average annual total return for all variable
annuity and life products with the Morningstar variable universe that have a
Corporate Bond investment objective.
STRATEGIC BOND PORTFOLIO: Consistent with the Portfolio's investment style,
this peer group represents an average annual total return for all variable
annuity and life products within the Morningstar variable universe that a
Corporate Bond investment objective and an average total return universe that
has an International Bond investment objective. The peer group average annual
total return is constructed using a 75% weighting of the average annual return
of the Corporate Bond universe and a 25% weighting of the average annual return
of the International Bond universe.
MANAGED PORTFOLIO: Consistent with the Portfolio's investment style, this peer
group represents an average annual total return for all variable annuity and
life products within the Morningstar variable universe that have a Balanced
investment objective, combined with a Large Blend equity investment style and a
High Quality / Intermediate maturity fixed income investment style.
GROWTH & INCOME PORTFOLIO AND EQUITY INDEX PORTFOLIO: Consistent with the
Portfolios' equity investment style, this peer group represents an average
annual total return for all variable annuity and life products within the
Morningstar variable universe that have a Large Blend equity investment style.
LARGE CAP VALUE PORTFOLIO: Consistent with the Portfolio's equity investment
style, this peer group represents an average annual total return for all
variable annuity and life products within the Morningstar variable universe
that have a Large Value equity investment style.
LARGE CAP GROWTH PORTFOLIO: Consistent with the Large Cap Growth Portfolio's
equity investment style, this peer group represents an average annual total
return for all variable annuity and life products within the Morningstar
variable universe that have a Large Growth equity investment style as of
6/30/97. This Large Growth peer group annual average is used for the period
May, 1996 to June, 1997 and is linked to a Large Blend peer group annual
average for longer periods to reflect a change in strategy/style from Large Cap
Blend to a Large Cap Growth in May, 1996.
MID CAP VALUE PORTFOLIO: Consistent with the Mid Cap Value Portfolio's equity
investment style, this peer group represents an average annual total return for
all variable annuity and life products within the Morningstar variable universe
that have a Mid Value equity investment style.
MID CAP GROWTH PORTFOLIO AND SPECIAL OPPORTUNITIES PORTFOLIO: Consistent with
the Mid Cap Growth Portfolios' equity investment style, this peer group
represents an average annual total return for all variable annuity and life
products within the Morningstar variable universe that have a Mid Growth equity
investment style.
SMALL CAP VALUE PORTFOLIO: Consistent with the Portfolio's investment style,
this peer group represents an average annual total return for all variable
annuity and life products within the Morningstar variable universe that have a
Small Value equity investment style.
SMALL CAP GROWTH PORTFOLIO: Consistent with the Small Cap Growth Portfolio's
investment style, this peer group represents an average annual total return for
all variable annuity and life products within the Morningstar variable universe
that have a Small Growth equity investment style.
INTERNATIONAL BALANCED PORTFOLIO: Consistent with the International Balanced
Portfolio's investment style, this peer group represents an average annual
total return for all variable annuity and life products within the Morningstar
variable universe that have a Foreign Stock investment objective and an average
total return universe that has an International Bond investment objective as of
6/30/97. The peer group average annual total return is constructed using a 65%
weighting of the average annual return of the Foreign Stock universe and a 35%
weighting of the average annual return of the International Bond universe.
INTERNATIONAL EQUITIES PORTFOLIO AND INTERNATIONAL OPPORTUNITIES
PORTFOLIO: Consistent with the International Equities Portfolio's investment
style, this peer group represents an average annual total return for all
variable annuity and life products within the Morningstar variable universe
that have a Foreign Stock investment objective, combined with a Large Blend
equity investment style.
21
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
(000's Omitted)
<TABLE>
<CAPTION>
Large Cap Sovereign International Small Cap International Mid Cap Large Cap Money Mid Cap
Growth Bond Equities Growth Balanced Growth Value Market Value
--------- --------- ------------- --------- ------------- ------- --------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Long Term Investments at
cost...................... $597,368 $738,165 $140,720 $40,147 $24,296 $32,059 $58,211 $54,486
Net unrealized
appreciation of
investments............... 151,894 24,143 3,207 6,667 381 6,254 9,073 3,240
Short-Term Investments at
market.................... 3,797 48,479 4,449 1,969 299 2,000 5,842 $228,185 6,843
-------- -------- -------- ------- ------- ------- ------- -------- -------
Total Investments........ 753,059 810,787 148,376 48,783 24,976 40,313 73,126 228,185 64,569
Cash...................... 1,568 3,276 1 251 1
Receivable for:
Investments sold......... 4,095 141 23 932
Fund shares sold......... 463 459 1,372 141 2 95 292 1,320 388
Interest................. 13,088 305 11
Dividends................ 974 156 19 23 9 161 28
Other Assets............. 97 20 1 1
-------- -------- -------- ------- ------- ------- ------- -------- -------
TOTAL ASSETS............. 754,496 $825,902 $157,372 $49,085 $25,600 $41,350 $73,591 $229,506 $64,985
LIABILITIES
Payables for:
Investments purchased.... 21,967 4,861 310 41 1,041 305
Net unrealized
depreciation in forward
foreign currency
contracts................ 117 42
Other liabilities........ 98 165 152 14 22 32 17 63 12
-------- -------- -------- ------- ------- ------- ------- -------- -------
TOTAL LIABILITIES........ 98 22,132 5,013 324 180 1,115 322 63 12
-------- -------- -------- ------- ------- ------- ------- -------- -------
NET ASSETS................ $754,398 803,770 152,359 48,761 25,420 40,235 73,269 229,443 64,973
======== ======== ======== ======= ======= ======= ======= ======== =======
Shares of beneficial
interest outstanding...... 36,236 80,789 10,024 4,298 2,514 3,374 5,399 22,944 4,686
-------- -------- -------- ------- ------- ------- ------- -------- -------
Net asset value per share. $ 20.82 $ 9.95 $ 15.20 $ 11.34 $ 10.11 $ 11.93 $ 13.57 $ 10.00 $ 13.87
======== ======== ======== ======= ======= ======= ======= ======== =======
Composition of net assets:
Capital Paid in.......... 603,554 775,414 148,887 44,869 25,289 34,538 64,194 229,443 62,213
Accumulated net realized
gain/(loss) on
investments.............. (1,050) 3,937 262 (2,774) 119 (503) (10) (480)
Undistributed/(distributions
in excess of) net
investment income........ 276 (1) (124) (12) 12
Net unrealized
appreciation/(depreciation)
of:
Investments.............. 151,894 24,143 3,207 6,667 381 6,254 9,073 3,240
Foreign currency
translation.............. 3 (245) (42)
-------- -------- -------- ------- ------- ------- ------- -------- -------
Net Assets................ $754,398 $803,770 $152,359 $48,761 $25,420 $40,235 $73,269 $229,443 $64,973
======== ======== ======== ======= ======= ======= ======= ======== =======
</TABLE>
See notes to financial statements.
22
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
(000's Omitted)
<TABLE>
<CAPTION>
Short-Term
Special Real Estate Growth & U.S. Small Cap International Equity
Opportunities Equity Income Managed Government Value Opportunities Index
------------- ----------- ---------- ---------- ---------- --------- ------------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Long Term
Investments at
cost............. $179,567 $152,813 $2,057,385 $2,422,183 $48,349 $36,721 $29,097 $ 89,445
Net unrealized
appreciation of
investments...... 14,278 46,244 632,694 345,296 17 2,024 274 11,672
Short-Term
Investments at
market........... 15,120 4,387 91,446 12,986 2,133 4,248 39 198
-------- -------- ---------- ---------- ------- ------- ------- --------
Total
Investments..... 208,965 203,444 2,781,525 2,780,465 50,499 42,993 29,410 101,315
Cash............. 682 83
Receivable for:
Investments
sold............ 7,714 237,434 393 29
Fund shares
sold............ 1,248 137 2,132 704 2 230 146 434
Interest........ 16,630 673
Dividends....... 131 973 3,704 2,372 46 19 147
Net unrealized
appreciation in
forward foreign
currency
contracts.......
Other Assets.... 5 1 25
-------- -------- ---------- ---------- ------- ------- ------- --------
TOTAL ASSETS.... $218,063 $204,554 $2,787,361 $3,037,606 $51,174 $43,269 $30,675 $102,008
LIABILITIES
Payable for:
Investments
purchased....... 4,381 372 1,032 237,170 3 617
Future contracts
daily variation. 1
Other
liabilities..... 70 51 365 309 54 8 41
-------- -------- ---------- ---------- ------- ------- ------- --------
TOTAL
LIABILITIES..... 4,451 423 1,397 237,479 54 8 44 618
-------- -------- ---------- ---------- ------- ------- ------- --------
NET ASSETS 213,612 204,131 2,785,964 2,800,127 51,120 43,261 30,631 101,390
======== ======== ========== ========== ======= ======= ======= ========
Shares of
beneficial
interest
outstanding...... 13,884 12,830 167,773 195,139 5,070 3,488 2,882 7,134
-------- -------- ---------- ---------- ------- ------- ------- --------
Net asset value
per share........ $ 15.39 $ 15.91 $ 16.61 $ 14.35 $ 10.08 $ 12.40 $ 10.63 $ 14.21
======== ======== ========== ========== ======= ======= ======= ========
Composition of
net assets:
Capital Paid in. 197,847 156,732 2,152,150 2,455,752 51,161 41,236 30,423 89,871
Accumulated net
realized
gain/(loss) on
investments..... 1,487 (15) (362) (921) (66) (6) (8) (153)
Undistributed/(distributions
in excess of)
net investment
income.......... 1,170 1,482 8 7 (48) 1
Net unrealized
appreciation/(depreciation)
of:
Investments..... 14,278 46,244 632,694 345,296 17 2,024 274 11,672
Foreign
currency
translation..... (10)
Futures
contracts....... (1)
-------- -------- ---------- ---------- ------- ------- ------- --------
Net Assets....... $213,612 $204,131 $2,785,964 $2,800,127 $51,120 $43,261 $30,631 $101,390
======== ======== ========== ========== ======= ======= ======= ========
<CAPTION>
Strategic
Bond
---------
<S> <C>
ASSETS
Long Term
Investments at
cost............. $25,953
Net unrealized
appreciation of
investments...... 435
Short-Term
Investments at
market........... 864
---------
Total
Investments..... 27,252
Cash............. 776
Receivable for:
Investments
sold............
Fund shares
sold............ 202
Interest........ 305
Dividends.......
Net unrealized
appreciation in
forward foreign
currency
contracts....... 146
Other Assets.... 1
---------
TOTAL ASSETS.... $28,682
LIABILITIES
Payable for:
Investments
purchased.......
Future contracts
daily variation.
Other
liabilities..... 35
---------
TOTAL
LIABILITIES..... 35
---------
NET ASSETS 28,647
=========
Shares of
beneficial
interest
outstanding...... 2,797
---------
Net asset value
per share........ $ 10.24
=========
Composition of
net assets:
Capital Paid in. 28,217
Accumulated net
realized
gain/(loss) on
investments.....
Undistributed/(distributions
in excess of)
net investment
income.......... (124)
Net unrealized
appreciation/(depreciation)
of:
Investments..... 435
Foreign
currency
translation..... 119
Futures
contracts.......
---------
Net Assets....... $28,647
=========
</TABLE>
See notes to financial statements.
23
<PAGE>
STATEMENT OF OPERATIONS
JOHN HANCOCK VARIABLE SERIES TRUST I
Year Ended December 31, 1997
- --------------------------------------------------------------------------------
(000's Omitted)
<TABLE>
<CAPTION>
Large Cap Sovereign International Small Cap International Mid Cap Large Cap Money Mid Cap
Growth Bond Equities Growth Balanced Growth Value Market Value
--------- --------- ------------- --------- ------------- ------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income
Interest................... $ 525 $56,352 $ 230 $ 130 $ 765 $ 136 $ 309 $12,734 $ 203
Dividends (Note B)......... 7,924 2,302 112 316 91 1,187 292
-------- ------- -------- ------- ------ ------ ------- ------- ------
8,449 56,352 2,532 242 1,081 227 1,496 12,734 495
Expenses
Investment advisory fee
(Note C)................... 2,520 1,881 968 251 215 230 329 564 252
Auditors fees.............. 25 29 14 11 11 10 11 16 11
Custodian fees............. 112 180 199 54 111 86 65 53 41
Fidelity bond fees......... 1 1 1 1 1
Legal fees................. 4 4 4 4 4 4 4 4 4
Printing & mailing fees.... 176 211 78 47 47 46 48 92 46
Trustees fees.............. 5 5 5 5 5 5 5 5 5
Other fees................. 1 1 1 1 1
-------- ------- -------- ------- ------ ------ ------- ------- ------
2,843 2,310 1,269 373 394 383 464 735 360
Less expenses
reimbursed/waived (Note
C)......................... 38 116 85 25 30
-------- ------- -------- ------- ------ ------ ------- ------- ------
2,843 2,310 1,269 335 278 298 439 735 330
-------- ------- -------- ------- ------ ------ ------- ------- ------
Net Investment
Income/(Loss)............... 5,606 54,042 1,263 (93) 803 (71) 1,057 11,999 165
REALIZED AND UNREALIZED
GAIN/(LOSS) ON INVESTMENTS
Net realized gain/(loss) on
sales of investments....... 62,455 5,170 6,237 (1,285) 533 (165) 1,866 4,133
Increase in unrealized
appreciation/(depreciation)
of:
Investments................ 101,020 13,744 (15,763) 5,855 (530) 5,635 7,862 2,209
Foreign currency
translation................ 3 (188) (42)
-------- ------- -------- ------- ------ ------ ------- ------- ------
Net realized and unrealized
gain/(loss) on investments. 163,475 18,914 (9,523) 4,570 (185) 5,428 9,728 6,342
-------- ------- -------- ------- ------ ------ ------- ------- ------
Net increase/(decrease) in
net assets resulting from
operations................. $169,081 $72,956 $ (8,260) $ 4,477 $ 618 $5,357 $10,785 $11,999 $6,507
======== ======= ======== ======= ====== ====== ======= ======= ======
</TABLE>
See notes to financial statements.
24
<PAGE>
STATEMENT OF OPERATIONS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST
Year Ended December 31, 1997
- --------------------------------------------------------------------------------
(000's Omitted)
<TABLE>
<CAPTION>
Short-Term
Special Real Estate Growth & U.S. Small Cap International Equity Strategic
Opportunities Equity Income Managed Government Value Opportunities Index Bond
------------- ----------- -------- -------- ---------- --------- ------------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT INCOME
Income
Interest.............. $ 650 $ 298 $ 3,271 $ 94,915 $3,773 $ 138 $ 81 $ 35 $1,290
Dividends (Note B).... 1,303 9,895 43,249 22,739 266 370 1,020
-------- ------- -------- -------- ------ ------ ----- ------- ------
1,953 10,193 46,520 117,654 3,773 404 451 1,055 1,290
Expenses
Investment advisory
fee (Note C).......... 1,565 1,053 6,126 8,515 220 187 235 132 142
Auditors fees......... 15 14 68 73 12 10 11 11 11
Custodian fees........ 95 55 180 339 48 50 79 147 43
Fidelity bond fees.... 1 1 1 1 1 1 1 1
Legal fees............ 4 3 4 3 3 3 3 3 3
Printing & mailing
fees.................. 86 80 559 614 55 45 46 49 45
Trustees fees......... 5 5 5 5 5 6 6 6 6
Other fees............ 1 1 1 1 1
-------- ------- -------- -------- ------ ------ ----- ------- ------
1,771 1,212 6,944 9,551 345 303 381 349 250
Less expenses
reimbursed/waived
(Note C).............. 58 86 349 60
-------- ------- -------- -------- ------ ------ ----- ------- ------
1,771 1,212 6,944 9,551 345 245 295 190
-------- ------- -------- -------- ------ ------ ----- ------- ------
Net Investment Income.. 182 8,981 39,576 108,103 3,428 159 156 1,055 1,100
REALIZED AND UNREALIZED
GAIN/(LOSS) ON
INVESTMENTS
Net realized
gain/(loss) on sales
of investments........ 23,003 5,143 313,348 157,179 (31) 3,158 268 1,622 373
Increase in unrealized
appreciation/(depreciation)
of:
Investments........... (14,445) 14,800 272,766 179,096 374 1,324 (761) 10,449 169
Foreign currency
translation........... (10) (1) 119
-------- ------- -------- -------- ------ ------ ----- ------- ------
Net realized and
unrealized gain/(loss)
on investments........ 8,558 19,943 586,114 336,275 343 4,482 (503) 12,070 661
-------- ------- -------- -------- ------ ------ ----- ------- ------
Net
increase/(decrease) in
net assets resulting
from operations....... $ 8,740 $28,924 $625,690 $444,378 $3,771 $4,641 $(347) $13,125 $1,761
======== ======= ======== ======== ====== ====== ===== ======= ======
</TABLE>
See notes to financial statements.
25
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
JOHN HANCOCK VARIABLE SERIES TRUST I
- --------------------------------------------------------------------------------
(000's Omitted)
<TABLE>
<CAPTION>
Small Cap
Large Cap Growth Sovereign Bond International Equities Growth
------------------------- ------------------------- ------------------------- ----------------------------
Period from
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended May 1, 1996(*)
December 31, December 31, December 31, December 31, December 31, December 31, December 31, to December 31,
1997 1996 1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------ ------------ ------------ ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INCREASE
(DECREASE) IN NET
ASSETS
From Operations
Net investment
income/(loss)... $ 5,606 $ 6,033 $ 54,042 $ 49,304 $ 1,263 $ 1,854 $ (93) $ 11
Net realized
gain/(loss) on
sales of
investments..... 62,455 70,842 5,170 3,975 6,237 1,098 (1,285) (1,491)
Change in net
unrealized
appreciation/
(depreciation)
of investments.. 101,020 (979) 13,744 (24,593) (15,763) 9,402 5,855 811
Foreign currency
translation..... 3 70
-------- -------- -------- -------- -------- -------- -------- -------
Net
increase/(decrease)
in net assets
resulting from
operations...... 169,081 75,896 72,956 28,686 (8,260) 12,424 4,477 (669)
Distributions to
Shareholders
From:
Net investment
income.......... (5,606) (6,033) (54,042) (49,304) (1,251) (1,831) (18)
Realized gain on
investments..... (62,455) (71,587) (5,170) (3,975) (6,315)
Return of
capital......... (19)
-------- -------- -------- -------- -------- -------- -------- -------
Decrease in net
assets resulting
from
distributions... (68,061) (77,620) (59,212) (53,279) (7,566) (1,831) (19) (18)
Capital
Contribution....
Trust Share
Transactions
Proceeds from
shares sold..... 120,441 104,231 84,388 64,307 37,058 37,327 33,960 27,331
Distributions
reinvested...... 68,061 77,620 59,212 53,279 7,566 1,831 19 18
Payment for
shares redeemed. (59,269) (36,258) (79,685) (67,191) (32,192) (20,801) (10,309) (6,029)
-------- -------- -------- -------- -------- -------- -------- -------
Increase from
trust share
transactions.... 129,233 145,593 63,915 50,395 12,432 18,357 23,670 21,320
-------- -------- -------- -------- -------- -------- -------- -------
NET
INCREASE/(DECREASE)
IN NET ASSETS.... 230,253 143,869 77,659 25,802 (3,394) 28,950 28,128 20,633
NET ASSETS
Beginning of
Year............ 524,145 380,276 726,111 700,309 155,753 126,803 20,633
-------- -------- -------- -------- -------- -------- -------- -------
End of Year..... $754,398 $524,145 $803,770 $726,111 $152,359 $155,753 $ 48,761 $20,633
======== ======== ======== ======== ======== ======== ======== =======
Analysis of Trust
Share
Transactions:
Sold............ 5,923 5,608 8,549 6,571 2,174 2,305 3,175 2,681
Reinvested...... 3,289 4,422 6,020 5,466 489 112 2 2
Redeemed........ (2,941) (1,960) (8,095) (6,870) (1,893) (1,286) (956) (606)
-------- -------- -------- -------- -------- -------- -------- -------
Net increase in
shares
outstanding...... 6,271 8,070 6,474 5,167 770 1,131 2,221 2,077
======== ======== ======== ======== ======== ======== ======== =======
<CAPTION>
International
Balanced
----------------------------
Period from
Year Ended May 1, 1996(*)
December 31, to December 31,
1997 1996
------------ ---------------
<S> <C> <C>
INCREASE
(DECREASE) IN NET
ASSETS
From Operations
Net investment
income/(loss)... $ 803 $ 527
Net realized
gain/(loss) on
sales of
investments..... 533 2
Change in net
unrealized
appreciation/
(depreciation)
of investments.. (530) 911
Foreign currency
translation..... (188) 64
------------ ---------------
Net
increase/(decrease)
in net assets
resulting from
operations...... 618 1,504
Distributions to
Shareholders
From:
Net investment
income.......... (793) (537)
Realized gain on
investments..... (530) (55)
Return of
capital......... (29)
------------ ---------------
Decrease in net
assets resulting
from
distributions... (1,352) (592)
Capital
Contribution....
Trust Share
Transactions
Proceeds from
shares sold..... 9,111 25,192
Distributions
reinvested...... 1,352 592
Payment for
shares redeemed. (8,407) (2,598)
------------ ---------------
Increase from
trust share
transactions.... 2,056 23,186
------------ ---------------
NET
INCREASE/(DECREASE)
IN NET ASSETS.... 1,322 24,098
NET ASSETS
Beginning of
Year............ 24,098
------------ ---------------
End of Year..... $25,420 $24,098
============ ===============
Analysis of Trust
Share
Transactions:
Sold............ 863 2,515
Reinvested...... 130 59
Redeemed........ (798) (255)
------------ ---------------
Net increase in
shares
outstanding...... 195 2,319
============ ===============
</TABLE>
(*) Commencement of Investment Operations.
See notes to financial statements.
26
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
- --------------------------------------------------------------------------------
(000's Omitted)
<TABLE>
<CAPTION>
Mid Cap Large Cap
Growth Value Money Market
---------------------------- ---------------------------- -------------------------
Period from Period from
Year Ended May 1, 1996 (*) Year Ended May 1, 1996 (*) Year Ended Year Ended
December 31, to December 31, December 31, to December 31, December 31, December 31,
1997 1996 1997 1996 1997 1996
------------ --------------- ------------ --------------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE
(DECREASE) IN NET
ASSETS
From Operations
Net investment
income/(loss)... $ (71) $ 47 $ 1,057 $ 199 $ 11,999 $ 10,365
Net realized
gain/(loss) on
sales of
investments..... (165) (338) 1,866 209
Change in net
unrealized
appreciation/(depreciation)
of investments.. 5,635 619 7,862 1,211
Foreign cur-
rency transla-
tion............ (42) (2)
------- ------- ------- ------- --------- ---------
Net increase in
net assets
resulting from
operations...... 5,357 326 10,785 1,619 11,999 10,365
Distributions to
Shareholders
From:
Net investment
income.......... (47) (1,057) (199) (11,999) (10,365)
Realized gain on
investments..... (1,847) (225)
Return of
capital......... (14)
------- ------- ------- ------- --------- ---------
Decrease in net
assets
resulting from
distributions... (47) (2,918) (424) (11,999) (10,365)
Capital
Contribution....
Trust Share
Transactions.....
Proceeds from
shares sold..... 23,097 17,779 47,942 22,296 183,336 166,173
Distributions
reinvested...... 47 2,918 424 11,999 10,365
Payment for
shares redeemed. (4,711) (1,613) (5,239) (4,134) (179,127) (149,212)
------- ------- ------- ------- --------- ---------
Increase from
trust share
transactions.... 18,386 16,213 45,621 18,586 16,208 27,326
------- ------- ------- ------- --------- ---------
NET INCREASE IN
NET ASSETS....... 23,743 16,492 53,488 19,781 16,208 27,326
NET ASSETS
Beginning of
year............ 16,492 19,781 213,235 185,909
------- ------- ------- ------- --------- ---------
End of year..... $40,235 $16,492 $73,269 $19,781 $ 229,443 $ 213,235
======= ======= ======= ======= ========= =========
Analysis of Trust
Share
Transactions:
Sold............ 2,214 1,763 3,809 2,130 18,333 16,617
Reinvested...... 5 220 39 1,200 1,037
Redeemed........ (454) (155) (414) (385) (17,913) (14,921)
------- ------- ------- ------- --------- ---------
Net increase in
shares
outstanding...... 1,760 1,613 3,615 1,784 1,620 2,733
======= ======= ======= ======= ========= =========
<CAPTION>
Mid Cap Special
Value Opportunities
---------------------------- -------------------------
Period from
Year Ended May 1, 1996 (*) Year Ended Year Ended
December 31, to December 31, December 31, December 31,
1997 1996 1997 1996
------------ --------------- ------------ ------------
<S> <C> <C> <C> <C>
INCREASE
(DECREASE) IN NET
ASSETS
From Operations
Net investment
income/(loss)... $ 165 $ 34 $ 182 $ 212
Net realized
gain/(loss) on
sales of
investments..... 4,133 197 23,003 6,812
Change in net
unrealized
appreciation/(depreciation)
of investments.. 2,209 1,031 (14,445) 22,836
Foreign cur-
rency transla-
tion............
------------ --------------- ------------ ------------
Net increase in
net assets
resulting from
operations...... 6,507 1,262 8,740 29,860
Distributions to
Shareholders
From:
Net investment
income.......... (165) (34) (182) (177)
Realized gain on
investments..... (4,605) (205) (21,000) (7,290)
Return of
capital......... (4)
------------ --------------- ------------ ------------
Decrease in net
assets
resulting from
distributions... (4,774) (239) (21,182) (7,467)
Capital
Contribution....
Trust Share
Transactions.....
Proceeds from
shares sold..... 54,265 12,553 59,814 121,171
Distributions
reinvested...... 4,774 239 21,182 7,467
Payment for
shares redeemed. (6,725) (2,889) (49,050) (11,409)
------------ --------------- ------------ ------------
Increase from
trust share
transactions.... 52,314 9,903 31,946 117,229
------------ --------------- ------------ ------------
NET INCREASE IN
NET ASSETS....... 54,047 10,926 19,504 139,622
NET ASSETS
Beginning of
year............ 10,926 194,108 54,486
------------ --------------- ------------ ------------
End of year..... $64,973 $10,926 $213,612 $194,108
============ =============== ============ ============
Analysis of Trust
Share
Transactions:
Sold............ 3,902 1,215 3,754 7,921
Reinvested...... 347 21 1,387 452
Redeemed........ (526) (273) (3,006) (757)
------------ --------------- ------------ ------------
Net increase in
shares
outstanding...... 3,723 963 2,135 7,616
============ =============== ============ ============
</TABLE>
(*) Commencement of Investment Operations.
See notes to financial statements.
27
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
- --------------------------------------------------------------------------------
(000's Omitted)
<TABLE>
<CAPTION>
Real Estate Equity Growth & Income Managed
------------------------- ------------------------- -------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
December 31, December 31, December 31, December 31, December 31, December 31,
1997 1996 1997 1996 1997 1996
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE IN NET
ASSETS
From Operations
Net investment
income.......... $ 8,981 $ 7,277 $ 39,576 $ 40,433 $ 108,103 $ 97,874
Net realized
gain/(loss) on
sales of
investments..... 5,143 663 313,348 214,384 157,179 190,969
Change in net
unrealized
appreciation/(depreciation)
of investments.. 14,800 28,588 272,766 79,058 179,096 (58,766)
Foreign
currency
translation.....
-------- -------- ---------- ---------- ---------- ----------
Net increase in
net assets
resulting from
operations...... 28,924 36,528 625,690 333,875 444,378 230,077
Distributions to
Shareholders
From:
Net investment
income.......... (8,255) (7,277) (39,576) (40,433) (108,103) (97,874)
Realized gain on
investments..... (5,072) (274) (313,348) (214,837) (142,668) (195,066)
Return of
capital......... (726) (14,546)
-------- -------- ---------- ---------- ---------- ----------
Decrease in net
assets
resulting from
distributions... (14,053) (7,551) (352,924) (255,270) (265,317) (292,940)
Trust Share
Transactions
Proceeds from
shares sold..... 46,042 21,037 259,249 221,113 188,049 211,434
Distributions
reinvested...... 14,053 7,551 352,924 255,270 265,317 292,940
Payment for
shares redeemed. (21,940) (15,242) (146,902) (105,646) (218,960) (148,815)
-------- -------- ---------- ---------- ---------- ----------
Increase/(decrease)
from trust
share
transations..... 38,155 13,346 465,271 370,737 234,406 355,559
-------- -------- ---------- ---------- ---------- ----------
NET
INCREASE/(DECREASE)
IN NET ASSETS.... 53,026 42,323 738,037 449,342 413,467 292,696
NET ASSETS
Beginning of
Year............ 151,105 108,782 2,047,927 1,598,585 2,386,660 2,093,964
-------- -------- ---------- ---------- ---------- ----------
End of Year..... $204,131 $151,105 $2,785,964 $2,047,927 $2,800,127 $2,386,660
======== ======== ========== ========== ========== ==========
Analysis of Trust
Share
Transactions:
Sold............ 3,046 1,675 15,437 14,713 13,184 15,162
Reinvested...... 905 594 21,287 17,357 18,557 21,665
Redeemed........ (1,446) (1,245) (8,699) (6,988) (15,347) (10,626)
-------- -------- ---------- ---------- ---------- ----------
Net
increase/(decrease)
in shares
outstanding...... 2,505 1,024 28,025 25,082 16,394 26,201
======== ======== ========== ========== ========== ==========
<CAPTION>
Short-Term
U.S.
Government
-------------------------
Year Ended Year Ended
December 31, December 31,
1997 1996
------------ ------------
<S> <C> <C>
INCREASE IN NET
ASSETS
From Operations
Net investment
income.......... $ 3,428 $ 1,653
Net realized
gain/(loss) on
sales of
investments..... (31) 6
Change in net
unrealized
appreciation/(depreciation)
of investments.. 374 (606)
Foreign
currency
translation.....
------------ ------------
Net increase in
net assets
resulting from
operations...... 3,771 1,053
Distributions to
Shareholders
From:
Net investment
income.......... (3,446) (1,653)
Realized gain on
investments..... (11)
Return of
capital.........
------------ ------------
Decrease in net
assets
resulting from
distributions... (3,446) (1,664)
Trust Share
Transactions
Proceeds from
shares sold..... 26,167 50,935
Distributions
reinvested...... 3,446 1,664
Payment for
shares redeemed. (37,494) (11,223)
------------ ------------
Increase/(decrease)
from trust
share
transations..... (7,881) 41,376
------------ ------------
NET
INCREASE/(DECREASE)
IN NET ASSETS.... (7,556) 40,765
NET ASSETS
Beginning of
Year............ 58,676 17,911
------------ ------------
End of Year..... $ 51,120 $ 58,676
============ ============
Analysis of Trust
Share
Transactions:
Sold............ 2,595 5,041
Reinvested...... 343 166
Redeemed........ (3,708) (1,117)
------------ ------------
Net
increase/(decrease)
in shares
outstanding...... (770) 4,090
============ ============
</TABLE>
See notes to financial statements.
28
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
- --------------------------------------------------------------------------------
(000's Omitted)
<TABLE>
<CAPTION>
Small Cap International
Value Opportunities Equity Index
---------------------------- ---------------------------- ----------------------------
Period from Period from Period from
Year Ended May 1, 1996 (*) Year Ended May 1, 1996 (*) Year Ended May 1, 1996 (*)
December 31, to December 31, December 31, to December 31, December 31, to December 31,
1997 1996 1997 1996 1997 1996
------------ --------------- ------------ --------------- ------------ ---------------
<S> <C> <C> <C> <C> <C> <C>
INCREASE
(DECREASE) IN NET
ASSETS
From Operations
Net investment
income.......... $ 159 $ 63 $ 156 $ 84 $ 1,055 $ 159
Net realized
gain/(loss) on
sales of
investments..... 3,158 217 268 (40) 1,622 89
Change in net
unrealized
appreciation/(depreciation)
of investments.. 1,324 700 (761) 1,035 10,449 1,223
Foreign
currency
translation..... (10) (1)
------- ------- -------- ------- -------- -------
Net
increase/(decrease)
in net assets
resulting from
operations...... 4,641 980 (347) 1,079 13,125 1,471
Distributions to
Shareholders
From:
Net investment
income.......... (159) (63) (188) (103) (1,055) (159)
Realized gain on
investments..... (3,158) (217) (235) (1,534) (127)
Return of
capital......... (202) (84)
------- ------- -------- ------- -------- -------
Decrease in net
assets
resulting from
distributions... (3,317) (280) (423) (103) (2,791) (370)
Capital
Contribution.... 250 84
Trust Share
Transactions
Proceeds from
shares sold..... 33,708 13,755 29,765 22,695 86,808 17,391
Distributions
reinvested...... 3,317 280 423 103 2,791 370
Payment for
shares redeemed. (5,629) (4,194) (16,685) (5,876) (13,443) (4,296)
------- ------- -------- ------- -------- -------
Increase from
trust share
transactions.... 31,396 9,841 13,503 16,922 76,156 13,549
------- ------- -------- ------- -------- -------
NET INCREASE IN
NET ASSETS....... 32,720 10,541 12,733 17,898 86,740 14,650
NET ASSETS
Beginning of
Year............ 10,541 17,898 14,650
------- ------- -------- ------- -------- -------
End of Year..... $43,261 $10,541 $ 30,631 $17,898 $101,390 $14,650
======= ======= ======== ======= ======== =======
Analysis of Trust
Share
Transactions:
Sold............ 2,708 1,357 2,704 2,253 6,622 1,681
Reinvested...... 269 26 39 10 201 34
Redeemed........ (471) (401) (1,550) (574) (1,009) (395)
------- ------- -------- ------- -------- -------
Net increase in
shares
outstanding...... 2,506 982 1,193 1,689 5,814 1,320
======= ======= ======== ======= ======== =======
<CAPTION>
Strategic
Bond
----------------------------
Period from
Year Ended May 1, 1996 (*)
December 31, to December 31,
1997 1996
------------ ---------------
<S> <C> <C>
INCREASE
(DECREASE) IN NET
ASSETS
From Operations
Net investment
income.......... $ 1,100 $ 529
Net realized
gain/(loss) on
sales of
investments..... 373 148
Change in net
unrealized
appreciation/(depreciation)
of investments.. 169 268
Foreign
currency
translation..... 119 (2)
------------ ---------------
Net
increase/(decrease)
in net assets
resulting from
operations...... 1,761 941
Distributions to
Shareholders
From:
Net investment
income.......... (1,222) (529)
Realized gain on
investments..... (373) (150)
Return of
capital......... (94)
------------ ---------------
Decrease in net
assets
resulting from
distributions... (1,689) (679)
Capital
Contribution....
Trust Share
Transactions
Proceeds from
shares sold..... 21,531 19,757
Distributions
reinvested...... 1,689 679
Payment for
shares redeemed. (7,552) (7,791)
------------ ---------------
Increase from
trust share
transactions.... 15,668 12,645
------------ ---------------
NET INCREASE IN
NET ASSETS....... 15,740 12,907
NET ASSETS
Beginning of
Year............ 12,907
------------ ---------------
End of Year..... $28,647 $12,907
============ ===============
Analysis of Trust
Share
Transactions:
Sold............ 2,099 1,963
Reinvested...... 165 67
Redeemed........ (738) (759)
------------ ---------------
Net increase in
shares
outstanding...... 1,526 1,271
============ ===============
</TABLE>
(*) Commencement of Investment Operations.
See notes to financial statements.
29
<PAGE>
FINANCIAL HIGHLIGHTS
JOHN HANCOCK VARIABLE SERIES TRUST I
- --------------------------------------------------------------------------------
Selected data for each share of beneficial interest outstanding throughout the
period indicated:
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
------------------------------------------ -----------------------------------------------------
Net Realized
Net Asset and Total Distribution Distribution Distributions
Value at Net Unrealized From From Net From Net From
Beginning Investment Gain(Loss) Investment Investment Gains on Return of Total
of Period Income/(Loss) on Investments(a) Operations Income Investments Capital Distributions
--------- ------------- ----------------- ---------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Large Cap Growth
Year Ended
December 31,
1997............ $17.49 $0.17 $5.21 $ 5.38 $(0.17) $(1.88) $ -- $(2.05)
1996............ 17.37 0.25 2.89 3.14 $(0.25) (2.77) -- (3.02)
1995............ 14.41 0.44 4.06 4.50 (0.44) (0.84) (0.26) (1.54)
1994............ 15.38 0.39 (0.54) (0.15) (0.39) (0.43) -- (0.82)
1993............ 14.43 0.33 1.64 1.97 (0.33) (0.69) -- (1.02)
- ----------------------------------------------------------------------------------------------------------------------------------
Sovereign Bond
Year Ended
December 31,
1997............ 9.77 0.71 0.24 0.95 (0.71) (0.06) -- (0.77)
1996............ 10.13 0.69 (0.31) 0.38 (0.69) (0.05) -- (0.74)
1995............ 9.19 0.71 1.03 1.74 (0.71) (0.09) -- (0.80)
1994............ 10.14 0.70 (0.95) (0.25) (0.70) -- -- (0.70)
1993............ 9.84 0.73 0.30 1.03 (0.73) -- -- (0.73)
- ----------------------------------------------------------------------------------------------------------------------------------
International
Equities
Year Ended
December 31,
1997............ 16.83 0.13 (0.97) (0.84) (0.13) (0.66) -- (0.79)
1996............ 15.61 0.21 1.22 1.43 (0.21) -- -- (0.21)
1995............ 14.62 0.17 0.99 1.16 (0.16) -- (0.01) (0.17)
1994............ 15.85 0.12 (1.10) (0.98) (0.12) (0.13) -- (0.25)
1993............ 12.25 0.03 3.91 3.94 (0.03) (0.31) -- (0.34)
- ----------------------------------------------------------------------------------------------------------------------------------
Small Cap Growth
Year Ended
December 31,
1997............ 9.93 (0.02) 1.44 1.42 -- -- (0.01) (0.01)
Period from May
1, to December
31, 1996(c)..... 10.00 0.01 (0.06) (0.05) (0.02) -- -- (0.02)
- ----------------------------------------------------------------------------------------------------------------------------------
International Balanced
Year Ended
December 31,
1997............ 10.39 0.33 (0.05) 0.28 (0.33) (0.22) (0.01) (0.56)
Period from May
1, to December
31, 1996(c)..... 10.00 0.24 0.41 0.65 (0.24) (0.02) -- (0.26)
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------
Number of Net
Net Asset Shares Net Assets Operating Investment
Value at Outstanding Total End of Period Expenses to Income to Portfolio Average
End (000's Investment (000's Average Average Turnover Commission
of Period Omitted) Return(b) Omitted) Net Assets Net Assets Rate Rate(t)
--------- ----------- ------------- ------------- --------------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Large Cap Growth
Year Ended
December 31,
1997............ $20.82 36,236 30.89 % $754,398 0.44% 0.86% 83.82% $0.05
1996............ 17.49 29,965 18.27 % 524,145 0.44% 1.35% 135.98% 0.04
1995............ 17.37 21,895 31.64 % 380,276 0.47% 2.70% 90.18% --
1994............ 14.41 15,546 (0.98)% 223,957 0.47% 2.69% 80.51% --
1993............ 15.38 9,833 13.80 % 151,207 0.50% 2.21% 61.53% --
- ----------------------------------------------------------------------------------------------------------------------------------
Sovereign Bond
Year Ended
December 31,
1997............ 9.95 80,789 10.11 % 803,770 0.31% 7.18% 138.29% --
1996............ 9.77 74,315 4.10 % 726,111 0.29% 7.07% 119.12% --
1995............ 10.13 69,148 19.55 % 700,309 0.30% 7.20% 63.31% --
1994............ 9.19 63,907 (2.57)% 587,077 0.29% 7.27% 21.80% --
1993............ 10.14 61,046 10.77 % 619,200 0.28% 7.22% 21.05% --
- ----------------------------------------------------------------------------------------------------------------------------------
International
Equities
Year Ended
December 31,
1997............ 15.20 10,024 (5.03)% 152,359 0.79% 0.78% 88.13% 0.02
1996............ 16.83 9,254 9.19 % 155,753 0.76% 1.30% 92.03% 0.02
1995............ 15.61 8,123 8.01 % 126,803 0.84%(g) 1.34% 65.82% --
1994............ 14.62 8,162 (6.26)% 119,331 0.85%(g) 0.85% 78.21% --
1993............ 15.85 3,574 32.08 % 56,652 0.85%(g) 0.26% 65.57% --
- ----------------------------------------------------------------------------------------------------------------------------------
Small Cap Growth
Year Ended
December 31,
1997............ 11.34 4,298 14.26% 48,761 1.00%(k) (0.28)% 86.23% 0.07
Period from May
1, to December
31, 1996(c)..... 9.93 2,077 (0.50)%(e) 20,633 1.00%(d)(k) 0.12%(d) 50.93%(e) 0.07
- ----------------------------------------------------------------------------------------------------------------------------------
International Balanced
Year Ended
December 31,
1997............ 10.11 2,514 2.65 % 25,420 1.10%(l) 3.18% 81.04% 0.03
Period from May
1, to December
31, 1996(c)..... 10.39 2,319 6.73 %(e) 24,098 1.10%(d)(l) 3.59%(d) 22.21%(e) 0.02
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
30
<PAGE>
FINANCIAL HIGHLIGHTS
JOHN HANCOCK VARIABLE SERIES TRUST I
- --------------------------------------------------------------------------------
Selected data for each share of beneficial interest outstanding throughout the
period indicated:
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
------------------------------------------ -----------------------------------------------------
Net Realized
Net Asset and Total Distribution Distribution Distributions
Value at Net Unrealized From From Net From Net From
Beginning Investment Gain(Loss) Investment Investment Gains on Return of Total
of Period Income/(Loss) on Investments(a) Operations Income Investments Capital Distributions
--------- ------------- ----------------- ---------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mid Cap Growth
Year Ended
December 31,
1997............ $10.22 $(0.02) $ 1.73 $1.71 $ -- $ -- $ -- $ --
Period from May
1, to December
31, 1996(c)..... 10.00 0.05 0.22 0.27 (0.05) -- -- (0.05)
- ---------------------------------------------------------------------------------------------------------------------------------
Large Cap Value
Year Ended
December 31,
1997............ 11.09 0.29 2.84 3.13 (0.29) (0.36) -- (0.65)
Period from May
1, to December
31, 1996(c)..... 10.00 0.16 1.22 1.38 (0.16) (0.13) -- (0.29)
- ---------------------------------------------------------------------------------------------------------------------------------
Money Market
Year Ended
December 31,
1997............ 10.00 0.53 -- 0.53 (0.53) -- -- (0.53)
1996............ 10.00 0.52 -- 0.52 (0.52) -- -- (0.52)
1995............ 10.00 0.57 -- 0.57 (0.57) -- -- (0.57)
1994............ 10.00 0.40 -- 0.40 (0.40) -- -- (0.40)
1993............ 10.00 0.30 -- 0.30 (0.30) -- -- (0.30)
- ---------------------------------------------------------------------------------------------------------------------------------
Mid Cap Value
Year Ended
December 31,
1997............ 11.35 0.05 3.59 3.64 (0.05) (1.07) -- (1.12)
Period from May
1, to December
31, 1996(c)..... 10.00 0.04 1.57 1.61 (0.04) (0.22) -- (0.26)
- ---------------------------------------------------------------------------------------------------------------------------------
Special Opportunities
Year Ended
December 31,
1997............ 16.52 0.01 0.56 0.57 (0.01) (1.69) -- (1.70)
1996............ 13.18 0.02 3.99 4.01 (0.02) (0.65) -- (0.67)
1995............ 9.94 (0.01) 3.58 3.57 -- (0.32) (0.01) (0.33)
Period from May
1, to December
31, 1994(c)..... 10.00 0.11 (0.06) 0.05 -- (0.11) -- (0.11)
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------
Number of Net
Net Asset Shares Net Assets Operating Investment
Value at Outstanding Total End of Period Expenses to Income to Portfolio Average
End (000's Investment (000's Average Average Turnover Commission
of Period Omitted) Return(b) Omitted) Net Assets Net Assets Rate Rate(t)
--------- ----------- ------------ ------------- --------------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Mid Cap Growth
Year Ended
December 31,
1997............ $11.93 3,374 16.66% $40,235 1.10%(m) (0.26)% 124.04% $0.03
Period from May
1, to December
31, 1996(c)..... 10.22 1,613 2.69%(e) 16,492 1.10%(d)(m) 0.92%(d) 71.25%(e) 0.03
- ---------------------------------------------------------------------------------------------------------------------------------
Large Cap Value
Year Ended
December 31,
1997............ 13.57 5,399 28.56% 73,269 1.00%(n) 2.42% 19.21% 0.03
Period from May
1, to December
31, 1996(c)..... 11.09 1,784 13.90%(e) 19,781 1.00%(d)(n) 2.74%(d) 19.95%(e) 0.03
- ---------------------------------------------------------------------------------------------------------------------------------
Money Market
Year Ended
December 31,
1997............ 10.00 22,944 5.38% 229,443 0.33% 5.32% -- --
1996............ 10.00 21,324 5.32% 213,235 0.30% 5.20% -- --
1995............ 10.00 18,591 5.78% 185,909 0.35% 5.62% -- --
1994............ 10.00 14,867 4.03% 148,668 0.32% 4.05% -- --
1993............ 10.00 11,618 3.06% 116,190 0.35% 3.01% -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Mid Cap Value
Year Ended
December 31,
1997............ 13.87 4,686 32.17% 64,973 1.05%(o) 0.53% 93.78% 0.06
Period from May
1, to December
31, 1996(c)..... 11.35 963 16.18%(e) 10,926 1.05%(d)(o) 0.69%(d) 62.99%(e) 0.06
- ---------------------------------------------------------------------------------------------------------------------------------
Special Opportunities
Year Ended
December 31,
1997............ 15.39 13,884 3.44% 213,612 0.85% 0.09% 331.19% 0.07
1996............ 16.52 11,749 30.33% 194,108 0.84% 0.18% 217.84% 0.06
1995............ 13.18 4,133 35.96% 54,486 1.00%(h) (0.11)% 139.31% --
Period from May
1, to December
31, 1994(c)..... 9.94 722 0.56%(e) 7,181 1.00%(d)(h) 1.51%(d) 26.54%(e) --
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
31
<PAGE>
FINANCIAL HIGHLIGHTS
JOHN HANCOCK VARIABLE SERIES TRUST I
- --------------------------------------------------------------------------------
Selected data for each share of beneficial interest outstanding throughout the
period indicated:
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
--------------------------------------- -----------------------------------------------------
Net Realized
Net Asset and Total Distribution Distribution Distributions
Value at Net Unrealized From From Net From Net From
Beginning Investment Gain(Loss) Investment Investment Gains on Return of Total
of Period Income on Investments(a) Operations Income Investments Capital Distributions
--------- ---------- ----------------- ---------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Real Estate
Equity
Year Ended
December 31,
1997............ $14.64 $0.77 $1.68 $2.45 $(0.71) $(0.41) $(0.06) $(1.18)
1996............ 11.70 0.76 2.97 3.73 (0.76) (0.03) -- (0.79)
1995............ 11.16 0.77 0.54 1.31 (0.77) -- -- (0.77)
1994............ 11.52 0.66 (0.34) 0.32 (0.66) (0.02) -- (0.68)
1993............ 10.27 0.52 1.26 1.78 (0.52) (0.01) -- (0.53)
- --------------------------------------------------------------------------------------------------------------------------
Growth & Income
Year Ended
December 31,
1997............ 14.65 0.27 4.07 4.34 (0.27) (2.11) -- (2.38)
1996............ 13.94 0.34 2.43 2.77 (0.34) (1.72) -- (2.06)
1995............ 11.50 0.36 3.53 3.89 (0.36) (1.09) -- (1.45)
1994............ 12.39 0.34 (0.41) (0.07) (0.34) (0.48) -- (0.82)
1993............ 11.99 0.32 1.27 1.59 (0.32) (0.87) -- (1.19)
- --------------------------------------------------------------------------------------------------------------------------
Managed
Year Ended
December 31,
1997............ 13.35 0.59 1.86 2.45 (0.59) (0.78) (0.08) (1.45)
1996............ 13.73 0.61 0.81 1.42 (0.61) (1.19) -- (1.80)
1995............ 11.96 0.62 2.56 3.18 (0.62) (0.79) -- (1.41)
1994............ 12.81 0.55 (0.83) (0.28) (0.55) (0.02) -- (0.57)
1993............ 12.41 0.52 0.90 1.42 (0.52) (0.50) -- (1.02)
- --------------------------------------------------------------------------------------------------------------------------
Short-Term U.S. Government
Year Ended
December 31,
1997............ 10.05 0.59 0.03 0.62 (0.59) -- -- (0.59)
1996............ 10.23 0.54 (0.18) 0.36 (0.54) -- -- (0.54)
1995............ 9.66 0.50 0.59 1.09 (0.50) (0.02) -- (f) (0.52)
Period from May
1, to December
31, 1994(c)..... 10.00 0.37 (0.34) 0.03 (0.37) -- -- (0.37)
- --------------------------------------------------------------------------------------------------------------------------
Small Cap Value
Year Ended
December 31,
1997............ 10.73 0.08 2.66 2.74 (0.08) (0.99) -- (1.07)
Period from May
1, to December
31, 1996(c)..... 10.00 0.07 0.96 1.03 (0.07) (0.23) -- (0.30)
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------
Number of Net
Net Asset Shares Net Assets Operating Investment
Value at Outstanding Total End of Period Expenses to Income to Portfolio Average
End (000's Investment (000's Average Average Turnover Commission
of Period Omitted) Return(b) Omitted) Net Assets Net Assets Rate Rate(t)
--------- ----------- ------------- ------------- --------------- ------------ ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Real Estate
Equity
Year Ended
December 31,
1997............ $15.91 12,830 17.22% $ 204,131 0.69% 5.12% 20.04% $0.05
1996............ 14.64 10,325 33.07% 151,105 0.69% 6.14% 18.37% 0.04
1995............ 11.70 9,301 12.31% 108,782 0.73% 6.85% 19.81% --
1994............ 11.16 10,178 2.86% 113,545 0.71% 5.94% 22.36% --
1993............ 11.52 7,061 17.29% 81,306 0.83% 4.80% 9.79% --
- --------------------------------------------------------------------------------------------------------------------------
Growth & Income
Year Ended
December 31,
1997............ 16.61 167,773 29.79% 2,785,964 0.28% 1.61% 74.56% 0.05
1996............ 14.65 139,748 20.10% 2,047,927 0.27% 2.24% 81.02% 0.04
1995............ 13.94 114,666 34.21% 1,598,585 0.28% 2.70% 73.54% --
1994............ 11.50 97,361 (0.56%) 1,119,864 0.27% 2.80% 64.12% --
1993............ 12.39 84,788 13.33% 1,050,349 0.28% 2.56% 70.27% --
- --------------------------------------------------------------------------------------------------------------------------
Managed
Year Ended
December 31,
1997............ 14.35 195,139 18.72% 2,800,127 0.37% 4.18% 200.41% 0.05
1996............ 13.35 178,745 10.72% 2,386,660 0.36% 4.41% 113.61% 0.06
1995............ 13.73 152,544 27.09% 2,093,964 0.38% 4.66% 187.67% --
1994............ 11.96 134,588 (2.23%) 1,609,939 0.37% 4.50% 90.41% --
1993............ 12.81 116,985 11.60% 1,498,876 0.38% 4.07% 63.74% --
- --------------------------------------------------------------------------------------------------------------------------
Short-Term U.S. Government
Year Ended
December 31,
1997............ 10.08 5,070 6.41% 51,120 0.57% 5.67% 108.29% --
1996............ 10.05 5,840 3.61% 58,676 0.75%(j) 5.66% 20.68% --
1995............ 10.23 1,750 11.49% 17,911 0.75%(j) 5.52% 109.77% --
Period from May
1, to December
31, 1994(c)..... 9.66 178 0.33%(e) 1,718 0.75%(d)(j) 5.82%(d) 11.22%(e) --
- --------------------------------------------------------------------------------------------------------------------------
Small Cap Value
Year Ended
December 31,
1997............ 12.40 3,488 25.57% 43,261 1.05%(p) 0.68% 126.10% 0.06
Period from May
1, to December
31, 1996(c)..... 10.73 982 10.33% (e) 10,541 1.05%(d)(p) 1.15% (d) 66.31%(e) 0.06
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
32
<PAGE>
FINANCIAL HIGHLIGHTS
JOHN HANCOCK VARIABLE SERIES TRUST I
- -------------------------------------------------------------------------------
Selected data for each share of beneficial interest outstanding throughout the
period indicated:
<TABLE>
<CAPTION>
Income from Investment Operations Less Distributions
--------------------------------------- -----------------------------------------------------
Net Realized
Net Asset and Total Distribution Distribution Distributions
Value at Net Unrealized From From Net From Net From
Beginning Investment Gain(Loss) Investment Investment Gains on Return of Total
of Period Income on Investments(a) Operations Income Investments Capital Distributions
--------- ---------- ----------------- ---------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
International Opportunities
Year Ended
December 31,
1997............ $10.60 $0.10 $0.11 $0.21 $(0.10) $(0.08) $ -- $(0.18)
Period from May
1, to December
31, 1996(c)..... 10.00 0.07 0.60 0.67 (0.07) -- -- (0.07)
- -------------------------------------------------------------------------------------------------------------------------
Equity Index
Year Ended
December 31,
1997............ 11.10 0.24 3.41 3.65 (0.24) (0.25) (0.05) (0.54)
Period from May
1, to December
31, 1996(c)..... 10.00 0.15 1.26 1.41 (0.15) (0.10) (0.06) (0.31)
- -------------------------------------------------------------------------------------------------------------------------
Strategic Bond
Year Ended
December 31,
1997............ 10.16 0.59 0.30 0.89 (0.61) (0.15) (0.05) (0.81)
Period from May
1, to December
31, 1996(c)..... 10.00 0.38 0.28 0.66 (0.38) (0.12) -- (0.50)
- -------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Ratios/Supplemental Data
------------------------------------------------------
Number of Net
Net Asset Shares Net Assets Operating Investment
Value at Outstanding Total End of Period Expenses to Income to Portfolio Average
End (000's Investment (000's Average Average Turnover Commission
of Period Omitted) Return(b) Omitted) Net Assets Net Assets Rate Rate(t)
--------- ----------- -------------- ------------- --------------- ----------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
International Opportunities
Year Ended
December 31,
1997............ $10.63 2,882 1.95% $30,631 1.22%(q) 0.65% 21.09% $0.03
Period from May
1, to December
31, 1996(c)..... 10.60 1,689 6.72%(e) 17,898 1.25%(d)(q) 0.87%(d) 5.46%(e) 0.03
- -------------------------------------------------------------------------------------------------------------------------
Equity Index
Year Ended
December 31,
1997............ 14.21 7,134 32.79%(v) 101,390 0.00%(r) 1.97% 64.56% 0.02
Period from May
1, to December
31, 1996(c)..... 11.10 1,320 14.23%(e)(u) 14,650 0.00%(d)(r) 2.47%(d) 15.72%(e) 0.02
- -------------------------------------------------------------------------------------------------------------------------
Strategic Bond
Year Ended
December 31,
1997............ 10.24 2,797 9.05% 28,647 1.00%(s) 5.80% 69.38% --
Period from May
1, to December
31, 1996(c)..... 10.16 1,271 6.71%(e) 12,907 1.00%(d)(s) 6.05%(d) 171.39%(e) --
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The amount shown at this caption for each share outstanding throughout the
year may not accord with the change in the aggregate gains and losses in
the portfolio securities for the year because of the timing of the
purchases and withdrawals of the shares in relation to the fluctuation
market values of the portfolio.
(b) The performance of the portfolios shown on this page does not reflect
expenses and charges of the applicable separate accounts and variable
products, all of which vary to a considerable extent and are described in
your product's prospectus.
(c) Commencement of investment operations.
(d) Annualized.
(e) Not annualized.
(f) Amount is less than a penny per share.
(g) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been .87%, .87%, and 1.13% for the
years ended December 31, 1995, 1994, and 1993, respectively.
(h) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been 1.91%, and 6.05%, for the
years ended December 31, 1995, and 1994, respectively.
(j) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been .79%, 1.83%, and 13.60%, for
the years ended December 31, 1996, 1995, and 1994, respectively.
(k) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been 1.12%, and 1.55%, for the
years ended December 31, 1997, and 1996, respectively.
33
<PAGE>
(l) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been 1.56%, and 1.44% for the years
ended December 31, 1997, and 1996, respectively.
(m) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been 1.42%, and 2.34%, for the
years ended December 31, 1997, and 1996, respectively.
(n) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been 1.06%, and 1.89%, for the
years ended December 31, 1997, and 1996, respectively.
(o) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been 1.14%, and 2.15%, for the
years ended December 31, 1997, and 1996, respectively.
(p) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been 1.30%, and 2.06%, for the
years ended December 31, 1997, and 1996, respectively.
(q) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been 1.57%, and 2.76%, for the
years ended December 31, 1997, and 1996, respectively.
(r) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been .65%, and 1.61%, for the years
ended December 31, 1997, and 1996, respectively.
(s) Expense ratio is net of expense reimbursement. Had such reimbursement not
been made the expense ratio would have been 1.32%, and 1.57%, for the
years ended December 31, 1997, and 1996, respectively.
(t) Average Commission rate is calculated for funds with fiscal year beginning
on or after September 1, 1995.
(u) The Total Return includes the effect of the capital contribution of $.06
per share. The total Investment Return without the capital contribution
would have been 13.59%.
(v) The Total Return includes the effect of the capital contribution of $.04
per share. The total Investment Return without the capital contribution
would have been 32.47%.
34
<PAGE>
SCHEDULE OF INVESTMENTS
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
LARGE CAP GROWTH PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Aerospace-3.4%
Northrop Grumman Corp. ...................................... 35,400 $ 4,071
United Technologies Corp. ................................... 293,000 21,334
--------
25,405
Automotive and Rubber-0.9%
Ford Motor Co. .............................................. 134,100 6,529
Banks and Finance-2.4%
BankAmerica Corp. ........................................... 81,500 5,950
Citicorp..................................................... 27,100 3,426
MBNA Corp. .................................................. 263,150 7,187
State Street Corp. .......................................... 22,900 1,332
--------
17,895
Chemicals-1.0%
Air Products & Chemicals, Inc. .............................. 93,400 7,682
Computer Software and Services-6.8%
Cadence Design Systems, Inc.*................................ 233,800 5,728
Computer Associates International, Inc. ..................... 185,550 9,811
Microsoft Corp.*............................................. 183,900 23,769
Oracle Corp.*................................................ 110,500 2,466
Parametric Technology Co.*................................... 76,000 3,601
Peoplesoft, Inc.*............................................ 107,800 4,204
Policy Management Systems Corp.*............................. 21,300 1,482
--------
51,061
Computers and Office Equipment-6.0%
Compaq Computer Corp. ....................................... 184,200 10,396
Danka Business Systems....................................... 78,700 1,254
Hewlett-Packard Co. ......................................... 189,100 11,819
Komag, Inc.*................................................. 44,600 663
Pitney Bowes, Inc. .......................................... 32,000 2,878
Xerox Corp. ................................................. 251,000 18,527
--------
45,537
Diversified Operations-12.5%
Cendant Corporation*......................................... 847,633 29,136
Cognizant Corp. ............................................. 63,100 2,812
Corning, Inc. ............................................... 249,800 9,274
General Electric Co. ........................................ 519,000 38,081
Raychem Corp................................................. 204,800 8,819
Textron, Inc................................................. 96,400 6,025
--------
94,147
Electronic and Processing Equipment-0.1%
Maxim Integrated Products, Inc.*............................. 33,600 1,159
Electronic Products-4.1%
Analog Devices, Inc.*........................................ 1 0
Honeywell, Inc............................................... 142,000 9,727
Intel Corp. ................................................. 178,600 12,547
Linear Technology Corporation................................ 114,300 6,587
Texas Instruments, Inc. ..................................... 48,000 2,160
--------
31,021
Financial Services-1.4%
American Express Co. ........................................ 14,100 1,258
Household International, Inc. ............................... 25,300 3,227
Morgan Stanley, Dean Witter,
Discover & Co. ............................................. 108,100 6,391
--------
10,876
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Food, Beverage and Tobacco-7.2%
ConAgra, Inc. ............................................... 122,200 $ 4,010
PepsiCo, Inc. ............................................... 625,700 22,799
Philip Morris Cos., Inc. .................................... 227,400 10,304
Quaker Oats Co. ............................................. 208,000 10,972
UST, Inc. ................................................... 169,600 6,265
--------
54,350
Government Agencies-0.4%
Federal National Mortgage Assoc. ............................ 49,300 2,813
Health Products and Services-22.2%
Abbott Laboratories.......................................... 220,900 14,483
Allegiance Corp. ............................................ 125,400 4,444
Alza Corp.*.................................................. 131,700 4,190
Becton, Dickinson & Co. ..................................... 41,400 2,070
Boston Scientific Corp.*..................................... 49,500 2,271
Bristol-Myers Squibb Co. .................................... 235,400 22,275
Cardinal Health, Inc. ....................................... 150,100 11,276
Glaxo Wellcome plc - ADR..................................... 174,000 8,330
Guidant Corp................................................. 128,500 7,999
Health Management Associates, Inc. - Cl. A*.................. 159,300 4,022
Healthsouth Corp.*........................................... 457,700 12,701
Johnson & Johnson............................................ 336,200 22,147
Merck & Co., Inc. ........................................... 315,600 33,532
Schering-Plough Corp. ....................................... 182,200 11,319
Warner-Lambert Co. .......................................... 51,400 6,374
--------
167,433
Household and Personal-1.5%
Procter & Gamble Co. ........................................ 139,800 11,158
Insurance-4.8%
Equitable Cos., Inc. ........................................ 57,400 2,856
General Re Corp. ............................................ 57,700 12,232
Hartford Financial Services Group, Inc. ..................... 72,300 6,765
Marsh & McLennan Cos., Inc. ................................. 86,400 6,442
Travelers Group, Inc. ....................................... 147,100 7,925
--------
36,220
Lodging and Restaurants-0.6%
Promus Hotel Corporation*.................................... 110,908 4,658
Machinery and Equipment-1.0%
Cooper Industries, Inc. ..................................... 45,400 2,225
Perkin-Elmer Corp. .......................................... 72,600 5,159
--------
7,384
Metals and Mining-0.3%
Precision Castparts Corp. ................................... 38,600 2,328
Miscellaneous-0.7%
Avery Dennison Corp.......................................... 126,200 5,647
Oils and Natural Gas Equipment and
Services-2.8%
Baker Hughes, Inc. .......................................... 152,800 6,666
Cooper Cameron Corp.*........................................ 41,400 2,525
</TABLE>
35
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
LARGE CAP GROWTH PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Oils and Natural Gas Equipment and
Services-Continued
Dresser Industries, Inc. .................................... 190,800 $ 8,002
Rowan Cos., Inc.*............................................ 79,200 2,416
Schlumberger, Ltd. .......................................... 23,900 1,924
--------
21,533
Oils and Natural Gas Exploration and Production-2.5%
Anadarko Petroleum Corp. .................................... 46,000 2,792
British Petroleum Co. plc - ADR.............................. 32,800 2,614
El Paso Natural Gas Co. ..................................... 44,500 2,959
Phillips Petroleum Co. ...................................... 189,600 9,219
USX-Marathon Group........................................... 29,900 1,009
--------
18,593
Paper and Forest Products-0.6%
International Paper Co. ..................................... 109,100 4,705
Pollution Control Equipment and Services-1.5%
USA Waste Services, Inc.*.................................... 281,800 11,061
Real Estate Development-0.4%
Clayton Homes, Inc. ......................................... 99,500 1,791
Del E. Webb Corp. ........................................... 35,600 926
--------
2,717
Retail-7.1%
Costco Cos., Inc.*........................................... 44,200 1,972
Home Depot, Inc. ............................................ 429,700 25,298
Liz Claiborne, Inc. ......................................... 61,800 2,584
Lowe's Cos., Inc. ........................................... 166,400 7,935
Staples, Inc.*............................................... 285,600 7,925
TJX Cos., Inc. .............................................. 160,200 5,507
Warnaco Group, Inc. - Cl. A.................................. 64,700 2,030
--------
53,251
Soap, Cosmetics and Personal Care-0.5%
Dial Corporation............................................. 105,700 2,200
Revlon, Inc.*................................................ 38,700 1,367
--------
3,567
Telecommunications-3.4%
Lucent Technologies, Inc. ................................... 322,701 25,776
Textiles-2.2%
Jones Apparel Group, Inc.*................................... 109,200 4,696
Tommy Hilfiger Corp.*........................................ 172,600 6,063
WestPoint Stevens, Inc.*..................................... 125,500 5,930
--------
16,689
Transportation-0.9%
Burlington Northern Santa Fe................................. 34,000 3,160
Southwest Airlines Co. ...................................... 152,550 3,757
--------
6,917
Utilities - Telecommunications-0.1%
GTE Corp. ................................................... 22,000 1,150
--------
TOTAL COMMON STOCK- 99.3% 749,262
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
SHORT-TERM INVESTMENTS-0.5%
Investment in joint trading account (Note B) 6.243% due
1/01/98..................................................... $ 3,796 $ 3,797
------- --------
TOTAL INVESTMENTS- 99.8% 753,059
Cash and receivables, less payables- 0.2% 1,339
------- --------
NET ASSETS- 100.0% $754,398
======= ========
</TABLE>
* Non-income producing security.
ADR-American Depository Receipt
See notes to financial statements.
36
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SOVEREIGN BOND PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS
Aerospace-0.8%
Continental Airlines Pass thru Trust
7.206% due 6/30/04............................................ $ 3,495 $ 3,561
Jet Equipment Trust - Cert. 1995-B 144A(a)
10.91% due 8/15/14............................................ 2,100 2,621
-------
6,182
Automotive and Rubber-0.8%
Ford Motor Co. - Notes
9.00% due 9/15/01............................................. 2,000 2,186
General Motors Corp. - Notes
9.625% due 12/01/00........................................... 4,000 4,388
-------
6,574
Banks and Finance-4.4%
ABN Amro Bank NV (Chicago) -
Global Bond
7.25% due 5/31/05............................................. 2,400 2,521
Bank of New York - Bonds 144A(a)
7.78% due 12/01/26............................................ 2,515 2,612
Banque National de Paris - NY - Sub. Notes
7.20% due 1/15/07............................................. 2,315 2,393
Interamerican Development Bank - Debs.
8.50% due 3/15/11............................................. 6,000 7,184
International Bank of Reconstruction & Development - Debs.
8.25% due 9/01/16............................................. 2,150 2,620
Landeskreditbank Baden Wuerttemberg -
Sub. Notes
7.625% due 2/01/23............................................ 3,150 3,572
National Westminister Bank, NY - Sub. Notes
9.45% due 5/01/01............................................. 5,000 5,497
NB Capital Trust IV - Cap. Secs.
8.25% due 4/15/27............................................. 2,520 2,781
RBSG Capital Corp. - Gtd. Cap. Notes
10.125% due 3/01/04........................................... 5,000 5,904
-------
35,084
Diversified Operations-0.3%
Tenneco, Inc. - Debs.
10.075% due 2/01/01........................................... 2,000 2,211
Financial Services-19.8%
Abbey National First Capital BV -
Gtd. Sub. Notes
8.20% due 10/15/04............................................ 4,000 4,384
American Express Credit Corp. - Debs.
8.625% due 5/15/22............................................ 6,000 6,519
American Express Credit Corp. - Sr. Notes
8.50% due 6/15/99............................................. 6,000 6,190
Barclays North America Capital Corp. -
Gtd. Bonds
9.75% due 5/15/21............................................. 4,650 5,263
Beneficial Corp. - Med. Term Notes
9.60% due 7/19/00............................................. 4,000 4,308
Commercial Credit Group, Inc. - Notes
6.00% due 4/15/00............................................. 7,000 6,975
10.00% due 5/01/99............................................ 5,000 5,241
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Financial Services-Continued
Conseco, Inc. - Sr. Notes
10.50% due 12/15/04.......................................... $ 3,140 $ 3,751
Constitution Capital Trust I -
Cap. Secs. 144A(a)
9.15% due 4/15/27............................................ 1,815 2,043
Contifinancial Corp. - Sr. Notes
8.375% due 8/15/03........................................... 1,755 1,819
CS First Boston - Sub. Notes 144A(a)
7.75% due 5/15/06............................................ 2,125 2,233
EQCC Home Equity Loan Trust -
Ser. 1997-1 Cl. A7
7.12% due 5/15/28............................................ 8,000 8,146
Fairfax Financial Holdings - Bonds
8.30% due 4/15/26............................................ 2,960 3,314
Fideicomiso Petacalco Trust - Notes 144A(a)
10.16% due 12/23/09.......................................... 2,020 2,060
First Plus Home Loan Trust -
Ser. 1997-1 Cl. A6
6.95% due 12/10/15........................................... 2,925 2,971
Fletcher Challenge Finance USA, Inc. -
Gtd. Notes
9.80% due 6/15/98............................................ 5,000 5,083
Ford Motor Credit Co.
6.25% due 12/08/05........................................... 1,075 1,061
Green Tree Home Improvement Loan Trust -
1995-D
6.95% due 9/15/25............................................ 2,570 2,611
Harvard University - Gen'l Oblig.
8.125% due 4/15/07........................................... 5,000 5,700
Indah Kiat International Finance - Bonds
12.50% due 6/15/06........................................... 1,209 1,127
Industrial Credit Investment Corp. India 144A(a)
7.55% due 8/15/07............................................ 2,430 2,015
Iridium Capital Corp.
13.00% due 7/15/05........................................... 2,645 2,764
MBNA Master Credit Card Trust -
Asset Bkd. Ser. 1995-D
6.05% due 11/15/02........................................... 7,000 7,011
Merrill Lynch & Co., Inc. -
Med. Term Notes
7.75% due 3/01/99............................................ 3,000 3,057
Money Store Home Equity Trust
6.485% due 12/15/28.......................................... 4,060 4,076
Money Store Residential Trust
6.68% due 8/15/12............................................ 2,940 2,926
Morgan Stanley Group, Inc. - Notes
8.875% due 10/15/01.......................................... 3,000 3,258
Residential Accredit Loans, Inc. -
Ser. 1997-QS4 Cl. A3
7.25% due 5/25/27............................................ 3,335 3,367
Salomon Brothers Mortgage Securities VII
6.75% due 7/25/24............................................ 1,890 1,906
State Street Institutional Capital -
Bonds Ser. B 144A(a)
8.035% due 3/15/27........................................... 2,490 2,664
</TABLE>
37
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SOVEREIGN BOND PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Financial Services-Continued
Structured Assets Securities Corp. -
Ser. 1993-C
6.60% due 12/25/24............................................ $ 6,000 $ 5942
Structured Assets Securities Corp. -
Ser. 1993-C1
6.60% due 10/25/24............................................ 190 190
Sun Canada Financial Co. - Bonds 144A(a)
6.625% due 12/15/07........................................... 3,345 3,407
Susa Partnership LP
7.00% due 12/01/07............................................ 1,580 1,588
Texaco Capital, Inc. - Debs.
8.625% due 6/30/10............................................ 10,000 11,911
UCFC Home Equity Loan - Ser. 1996-A1
6.50% due 4/15/16............................................. 7,652 7,499
UCFC Home Equity Loan -
Ser. 1997-A1 Cl. A8
7.22% due 6/15/28............................................. 6,910 7,148
United Companies Financial Corp. - Notes
7.70% due 1/15/04............................................. 2,535 2,661
URC Holdings Corp. - Sr. Notes 144A(a)
7.875% due 6/30/06............................................ 2,780 2,999
Viacap SA - Bonds 144A(a)
11.375% due 5/15/07........................................... 2,035 2,172
-------
159,360
Food, Beverage and Tobacco-0.9%
RJR Nabisco, Inc. - Notes
7.625% due 9/15/03............................................ 2,120 2,163
8.625% due 12/01/02........................................... 1,660 1,766
Southern Foods Group -
Sr. Sub. Notes 144A(a)
9.875% due 9/01/07............................................ 2,141 2,232
-------
6,161
Foreign Governmental-2.2%
Croatia - Bonds 144A(a)
7.00% due 2/27/02............................................. 2,245 2,249
Manitoba Province of Canada -
Debs. Ser. CD
9.25% due 4/01/20............................................. 2,000 2,645
Manitoba Province of Canada - US Debs. Ser. CK
9.00% due 12/15/00............................................ 3,000 3,232
Province of Nova Scotia - Debs.
8.75% due 4/01/22............................................. 3,000 3,771
Province of Saskatchewan -
Govt. Gtd. Bonds
9.375% due 12/15/20........................................... 1,500 1,991
Quebec Province Canada
7.50% due 7/15/23............................................. 1,265 1,364
Republic of Panama - Notes 144A(a)
7.875% due 2/13/02............................................ 2,365 2,276
-------
17,528
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Government Agencies-10.6%
Federal Home Loan Mortgage Corp.
6.00% due 10/15/08 - 6/15/11................................ $ 12,515 $12,275
Federal Home Loan Mortgage Corp.
6.50% due 12/15/23.......................................... 2,725 2,730
Federal Home Loan Mortgage Corp.
8.00% due 4/15/19........................................... 12 12
Federal National Mortgage Assoc.
6.94% due 1/25/22........................................... 1,630 1,688
Federal National Mortgage Assoc.
6.50% due 12/01/99.......................................... 4,445 4,389
Federal National Mortgage Assoc.
7.00% due 1/01/99........................................... 7,820 7,877
GMAC Commercial Mortgage Securities Inc - 1997-C1 A2
6.853% due 9/15/06.......................................... 3,265 3,326
GMAC Commercial Secured, Inc.
6.566% due 11/15/07......................................... 3,385 3,423
Government National Mortgage Assoc. 6.50% due 2/15/99........ 7,870 8,004
Government National Mortgage Assoc. 8.00% due 2/15/25 -
8/15/27.................................................... 21,085 21,875
Government National Mortgage Assoc. 8.50% due 9/15/21........ 1,630 1,738
Government National Mortgage Assoc. 9.00% due 5/15/21 -
8/15/21.................................................... 2,616 2,847
Government National Mortgage Assoc. 9.50% due 6/15/16........ 823 905
Hydro-Quebec - Debs.
7.375% due 2/01/03.......................................... 1,000 1,045
Hydro-Quebec - Debs. Ser. HS
9.40% due 2/01/21........................................... 3,950 5,097
Hydro-Quebec - Debs. Ser. FV
11.75% due 2/01/12.......................................... 5,000 7,308
Resolution Trust Corp. - Ser. 1993-3
7.25% due 10/25/23.......................................... 402 401
-------
84,940
Health Products and Services-0.9%
Integrated Health Services, Inc. -
Sr. Sub. Notes 144A(a)
9.25% due 1/15/08............................................ 2,835 2,892
Quest Diagnostic, Inc. - Bonds
10.75% due 12/15/06.......................................... 1,537 1,677
Tenet Healthcare Corp. - Sr. Sub. Notes
8.625% due 1/15/07........................................... 2,635 2,714
-------
7,283
Insurance-2.7%
Equitable Life Assurance Society USA -
Surplus Notes 144A(a)
6.95% due 12/01/05........................................... 2,750 2,808
Liberty Mutual Insurance Co. - Notes 144A(a)
7.875% due 10/15/26.......................................... 1,835 1,989
8.20% due 5/04/07............................................ 4,630 5,119
</TABLE>
38
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SOVEREIGN BOND PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Insurance-Continued
Massachusetts Mutual Life Insurance Co. -
Surplus Notes 144A(a)
7.625% due 11/15/23........................................... $ 4,090 $ 4,469
NAC Re Corp. - Notes
8.00% due 6/15/99............................................. 1,560 1,599
New York Life Insurance Co. -
Surplus Notes 144A(a)
7.50% due 12/15/23............................................ 5,970 6,035
-------
22,019
Leisure and Recreation Products and Services-0.8%
Trump Holdings & Funding - Sr. Notes
15.50% due 6/15/05............................................ 2,325 2,651
Lodging and Restaurants-1.0%
McDonald's Corp. - Debs.
7.375% due 7/15/33............................................ 5,000 5,258
Sun International Hotels, Ltd.
8.625% due 12/15/07........................................... 1,178 1,196
-------
6,454
Media-3.2%
Comcast Corp. - Sr. Sub. Debs.
10.625% due 7/15/12........................................... 2,625 3,281
News America Holdings, Inc. - Notes
8.25% due 8/10/18............................................. 3,126 3,393
Physician Sales & Svc
8.50% due 10/01/07............................................ 1,063 1,084
Rogers Cablesystems - Sr. Notes
10.00% due 3/15/05............................................ 3,030 3,333
SFX Broadcasting, Inc. - Sr. Sub. Notes
10.75% due 5/15/06............................................ 2,080 2,278
TCI Communications, Inc. - Debs.
8.75% due 8/01/15............................................. 2,371 2,738
TeleWest plc - Sr. Notes
9.625% due 10/01/06........................................... 1,603 1,663
Time Warner, Inc. - Debs.
9.125% due 1/15/13............................................ 2,538 3,031
TKR Cable, Inc. - Debs.
10.50% due 10/30/07........................................... 4,132 4,591
-------
25,392
Metals and Mining-0.2%
Yanacocha Receivables -
Pass thru Certs. 144A(a)
8.40% due 6/15/05............................................. 1,842 1,842
Miscellaneous-0.4%
Loewen Group International, Inc. -
Bonds 144A(a)
8.25% due 10/15/03............................................ 3,135 3,209
Municipals-0.4%
New Hampshire State -
Taxable Pease Dev. Auth.
7.70% due 7/01/12............................................. 3,000 3,247
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Oils and Natural Gas Equipment and Services-0.7%
Humpuss Funding Corp. - Bonds 144A(a)
7.72% due 12/15/09............................................ $ 2,249 $ 1,818
Transgas de Occidente SA -
Sr. Notes 144A(a)
9.79% due 11/01/10............................................ 2,767 2,849
-------
4,667
Oils and Natural Gas Exploration and Production-2.6%
Coastal Corp. - Notes
8.75% due 5/15/99............................................. 7,250 7,494
Enersis SA - Notes
7.40% due 12/01/16............................................ 3,490 3,609
Norsk Hydro A/S - Debs.
7.50% due 10/01/16............................................ 2,375 2,558
Occidental Petroleum Corp. - Sr. Debs.
10.125% due 9/15/09........................................... 3,000 3,869
Williams Cos., Inc. - Notes
7.50% due 9/15/99............................................. 3,000 3,062
-------
20,592
Paper and Forest Products-1.5%
Celulosa Arauco y Constitucion SA - Notes 144A(a)
7.20% due 9/15/09............................................. 2,535 2,482
Fort James Corp. - Sr. Notes
6.50% due 9/15/02............................................. 2,120 2,126
Georgia-Pacific Corp. - Debs.
9.75% due 1/15/18............................................. 2,895 3,006
PT Indah Kiat Pulp & Paper - Notes 144A(a)
8.875% due 11/01/00........................................... 1,050 945
Riverwood International Corp. -
Sr. Sub. Notes
10.875% due 4/01/08........................................... 1,529 1,472
S.D. Warren Co. - Sr. Sub. Notes
12.00% due 12/15/04........................................... 1,825 2,026
-------
12,057
Publications-0.3%
Garden State Newspapers, Inc. -
Sr. Sub. Notes 144A(a)
8.75% due 10/01/09............................................ 2,032 2,040
Real Estate Investment Trust-0.3%
Trinet Corp. Realty Trust, Inc. - Notes
7.30% due 5/15/01............................................. 2,070 2,115
Telecommunications-2.0%
Adelphia Communications Corp.
9.25% due 10/01/02............................................ 2,460 2,509
Clear Channel
7.25% due 10/15/27............................................ 2,440 2,481
Hearst-Argyle TV
7.00% due 11/15/07............................................ 2,265 2,282
Ivaco, Inc. - Sr. Notes
11.50% due 9/15/05............................................ 1,392 1,503
Metronet Communications - Sr. Notes 144A(a)
12.00% due 8/15/07............................................ 2,320 2,680
</TABLE>
39
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SOVEREIGN BOND PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Telecommunications-Continued
Nextel Communications
1.00% due 8/15/04............................................ $ 3,485 $ 3,093
Qwest Communications International, Inc. -
Sr. Notes 144A(a)
10.875% due 4/01/07.......................................... 1,560 1,775
--------
16,323
Transportation-2.10%
America West Airlines, Inc. - Pass thru Certs.
6.93% due 1/02/08............................................ 2,252 2,277
MRS Logistica SA - Bonds - 144A(a)
10.625% due 8/15/05.......................................... 1,930 1,742
Northwest Airlines Corp. - Notes
8.375% due 3/15/04........................................... 1,178 1,215
Northwest Airlines Corp. - Sec. Pass thru Certs.
8.97% due 1/02/15............................................ 226 251
NWA Trust - Sr. Notes
9.25% due 6/21/14............................................ 2,478 2,927
U.S. Air, Inc. - Pass thru Certs.
9.82% due 1/01/13............................................ 1,582 1,750
U.S. Air, Inc. - Pass thru Certs. Ser. 1990-A1
11.20% due 3/19/05........................................... 1,419 1,362
Union Pacific Corp. - Med. Term Notes
9.65% due 6/01/00............................................ 5,000 5,379
--------
16,903
U.S. Governmental-22.1%
U.S. Treasury - Bonds
7.125% due 2/15/23........................................... 51,932 59,283
8.875% due 8/15/17........................................... 8,084 10,730
U.S. Treasury - Notes
4.75% due 8/31/98............................................ 15,500 15,413
7.50% due 5/15/02............................................ 43,722 46,660
7.50% due 2/15/05............................................ 16,632 18,279
7.75% due 11/30/99........................................... 16,872 17,497
8.00% due 5/15/01............................................ 434 464
8.875% due 2/15/99........................................... 5,025 5,199
9.25% due 8/15/98............................................ 4,000 4,087
--------
177,612
Utilities - Electric-9.8%
AES Corp. - Sr. Sub. Notes
10.25% due 7/15/06........................................... 3,113 3,370
BVPS II Funding Corp. - Coll. Lease Bonds
8.89% due 6/01/17............................................ 2,464 2,757
Calenergy Co. Inc.
9.50% due 9/15/06............................................ 2,320 2,529
Calpine Corp. - Sr. Notes
10.50% due 5/15/06........................................... 1,920 2,064
Calpine Corp. - Sr. Notes 144A(a)
8.75% due 7/15/07............................................ 885 903
CE Electric UK Funding 144A(a)
6.995% due 12/30/07.......................................... 2,271 2,293
Chugach Electric Assoc., Inc. -
1st Mtge. Bonds 1991 Ser. A
8.08% due 3/15/02............................................ 2,772 2,927
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Utilities - Electric - Continued
Cleveland Electric Illuminating Co. -
1st Mtge. Bonds
7.67% due 7/01/04............................................. $ 2,880 $ 3,031
9.50% due 5/15/05............................................. 4,725 5,198
CMS Energy Corp. - Senior Notes 144A(a)
8.125% due 5/15/02............................................ 2,650 2,677
DR Investments - Sr. Notes 144A(a)
7.45% due 5/15/07............................................. 1,800 1,915
First PV Funding Corp. - Lease Oblig. Bonds
10.15% due 1/15/16............................................ 2,935 3,104
First PV Funding Corp. - Ser. 1986A
10.30% due 1/15/14............................................ 637 677
Long Island Lighting Co. - Debs.
8.90% due 7/15/19............................................. 1,740 1,853
Long Island Lighting Co. -
Gen. Ref. Mtge. Bonds
9.625% due 7/01/24............................................ 2,415 2,485
9.75% due 5/01/21............................................. 3,300 3,383
Midland Funding Corp. I - Debs.
10.33% due 7/23/02............................................ 819 881
10.33% due 7/23/02............................................ 3,381 3,636
Midland Funding Corp. II - Debs.
11.75% due 7/23/05............................................ 1,150 1,374
North Atlantic Energy Corp.
9.05% due 6/01/02............................................. 2,688 2,751
Public Service Co. of Colorado -
1st Mtge. Bonds
9.875% due 7/01/20............................................ 4,500 4,962
Puget Sound Energy Capital Trust I -
Bonds 144A(a)
8.231% due 6/01/27............................................ 1,440 1,502
Southwestern Public Service Co. -
1st Mtge. Bonds
6.875% due 12/01/99........................................... 3,500 3,551
System Energy Resources, Inc. -
1st Mtge. Bonds
7.71% due 8/01/01............................................. 2,590 2,675
Texas New Mexico Power Co. -
1st Mtge. Bonds Ser. V
9.25% due 9/15/00............................................. 8,000 8,458
Utilicorp United, Inc. - Sr. Notes
8.20% due 1/15/07............................................. 5,000 5,488
Waterford 3 Funding - Entergy - Bonds
8.09% due 1/02/17............................................. 2,493 2,577
-------
79,021
Utilities - Gas-1.4%
Camuzzi Gas - Bonds 144A(a)
9.25% due 12/15/01............................................ 1,386 1,386
Michigan Consolidated Gas Co. -
1st Mtge. Bonds
5.75% due 5/01/01............................................. 10,000 9,886
-------
11,272
</TABLE>
40
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SOVEREIGN BOND PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Utilities - Telecommunications-3.7%
Avon Energy Partners Hldgs 144A(a)
7.05% due 12/11/07.......................................... $ 1,591 $ 1,618
Chesapeake & Potomac Telephone Co. - Notes
6.05% due 5/15/03........................................... 6,460 6,419
Comcast Cable Communication
8.875% due 5/01/17.......................................... 897 1,064
GTE California, Inc. - 1t Mtge. Bonds Ser. TT
6.25% due 1/15/98........................................... 3,200 3,200
GTE Corp. - Debs.
8.75% due 11/01/21.......................................... 3,000 3,637
Michigan Bell Telephone Co. - Debs.
7.85% due 1/15/22........................................... 5,000 5,764
New Jersey Bell Telephone Co. - Debs.
8.00% due 6/01/22........................................... 4,000 4,681
Philippine Long Distance Telephone Co. -
Notes
7.85% due 3/06/07........................................... 2,448 2,133
Sprint Corp. - Notes
8.125% due 7/15/02.......................................... 1,000 1,073
--------
29,589
--------
TOTAL PUBLICLY-TRADED BONDS- 94.9% 762,308
SHORT-TERM INVESTMENTS-6.0%
Investment in joint trading account (Note B)
6.243% due 1/01/98.......................................... 48,479 48,479
------- --------
TOTAL INVESTMENTS- 100.9 % 810,787
Payables, less cash and receivables- (0.9)% (7,017)
------- --------
NET ASSETS- 100.0 % $803,770
======= ========
</TABLE>
(a) Pursuant to Rule 144A under the Securities Act of 1933, these securities
may be resold in transactions exempt from registration, normally to
qualified institutional buyers. At December 31, 1997, securities aggregated
$86,796 or 10.8% of the net assets of the Portfolio.
See notes to financial statements.
41
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITIES PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Australia-4.2%
Normandy Mining, Ltd. (META)............................... 5,756,900 $ 5,591
RGC, Ltd. (META)........................................... 544,300 830
--------
6,421
Brazil-6.1%
Centrais Electricas Brasileiras SA -Eletrobras - ADR
(UTIE).................................................... 214,500 5,334
Cia Riograndrandese Telecom - Pro Rata Receipts* (TELE).... 90,113 111
Companhia Paranaense de Energia-Copel (UTIE)............... 84,500 1,157
Telecomunicacoes Brasileiras S/A -Telebras - ADR (TELE).... 22,610 2,633
--------
9,235
Canada-6.4%
Royal Bank of Canada (BANK)................................ 43,000 2,279
Royal Bank of Canada (BANK)................................ 51,970 2,749
Toronto Dominion Bank Ontario (BANK)....................... 124,639 4,697
--------
9,725
Chile-0.5%
Maderas y Sinteticos SA - ADR (CONS)....................... 84,000 798
France-4.9%
AXA SA (INSU).............................................. 35,710 2,763
Carrefour (RETL)........................................... 8,890 4,638
--------
7,401
Germany-5.7%
Bayerische Motoren Werke AG (AUTO)......................... 7,270 5,435
Volkswagen AG (AUTO)....................................... 5,800 3,263
--------
8,698
Hong Kong-5.4%
Cheung Kong (Holdings), Ltd. (REAL)........................ 380,000 2,489
China Resources Enterprise, Ltd. (REAL).................... 1,100,000 2,456
Hutchison Whampoa, Ltd. (DIVO)............................. 530,000 3,324
--------
8,269
India-1.5%
State Bank of India - GDR (BANK)........................... 126,800 2,308
Japan-9.6%
Ito-Yokado Co., Ltd. (RETL)................................ 45,000 2,292
Shin-Etsu Chemical Co. (CHEM).............................. 150,000 2,861
Sony Corp. (AUDI).......................................... 50,000 4,442
Sumitomo Sitix Corp. (MISC)................................ 150,000 1,597
TDK Corp. (ETRN)........................................... 46,000 3,467
--------
14,659
Mexico-1.5%
Grupo Industrial Maseca SA de CV -ADR (FOOD)............... 150,100 2,327
Netherlands-4.3%
Abn Amro Holding Nv Sp Ard (BANK).......................... 223,845 4,365
ING Groep NV (BANK)........................................ 52,740 2,232
--------
6,597
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Norway-0.3%
Saga Petroleum ASA (OILS)..................................... 21,500 $ 370
Panama-3.8%
Panamerican Beverages, Inc. - Cl. A (FOOD).................... 176,699 5,765
Singapore-1.8%
Natsteel, Ltd. (META)......................................... 625,000 845
Oversea-Chinese Bank Corp., Ltd. (BANK)....................... 216,000 1,256
Wing Tai Holdings, Ltd. (DIVO)................................ 600,000 701
-------
2,802
Sweden-2.8%
Investor AB (FUND)............................................ 84,000 4,094
Nordbanken Holding (BANK)..................................... 36,200 205
-------
4,299
Switzerland-7.5%
Novartis AG* (HEAL)........................................... 4,685 7,599
Zurich Versicherungsgesellschaft (INSU)....................... 7,900 3,761
-------
11,360
United Kingdom-13.3%
Baltic Republic Fund, Ltd.* (FUND)............................ 11,000 968
EMAP plc (MEDI)............................................... 308,000 4,583
Marks & Spencer plc (RETL).................................... 320,000 3,165
Northern Rock plc* (FINL)..................................... 143,000 1,402
Pearson plc (MEDI)............................................ 331,000 4,300
Regal Hotel Group plc (LODG).................................. 850,000 628
Royal & Sun Alliance Insurance Group plc (INSU)............... 297,750 2,998
Royal Bank Scot Grp (BANK).................................... 117,700 1,501
Societe Generale Romania Fund* (FUND)......................... 8,000 704
-------
20,249
United States-12.0%
Allied Irish Banks PLC ADR (BANK)............................. 157,088 9,111
Carnival Corporation - Cl. A (LEIS)........................... 59,000 3,267
China Telecom Hong Kong, Ltd.* (TELE)......................... 6,500 218
France Telecom (TELE)......................................... 113,400 4,082
Ispat International NV - NY Shares* (META).................... 37,200 804
Societe Generale Central and Eastern-European Opportunities
Fund* (FUND)................................................. 7,860 786
-------
18,268
-------
TOTAL COMMON STOCK- 91.6% 139,551
PREFERRED STOCK
Brazil-2.9%
Cia Riograndrandese Telecom* (TELE)........................... 3,552 4,376
-------
TOTAL PREFERRED STOCK- 2.9% 4,376
</TABLE>
42
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL EQUITIES PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
JOINT REPURCHASE AGREEMENT-2.9%
Investment in joint repurchase agreement with Swiss
BankCorp. dated 12/31/97
6.60% due 1/02/98(a)........................................ $ 4,449 $ 4,449
------- --------
TOTAL INVESTMENTS- 97.4% 148,376
Cash and receivables, less payables- 2.6% 3,983
------- --------
NET ASSETS- 100.0% $152,359
======= ========
</TABLE>
(a) The repurchase agreement, dated 12/31/97, is fully collateralized by U.S.
government obligations. The investment in repurchase agreement is through
participation in a joint account with other portfolios advised by John
Hancock. (see Note B)
* Non-income producing security.
ADR-American Depository Receipt
See notes to financial statements.
SUMMARY OF LONG-TERM SECURITIES BY INDUSTRY
<TABLE>
<CAPTION>
Market %
Industry Industry Value Long-Term
Abbreviation (000's) Investments
<S> <C> <C> <C>
Banks and Finance............................ BANK $ 30,703 21.3%
Telecommunications........................... TELE 11,420 7.9%
Retail....................................... RETL 10,095 7.0%
Insurance.................................... INSU 9,522 6.6%
Media........................................ MEDI 8,883 6.2%
Automotive and Rubber........................ AUTO 8,698 6.0%
Food Beverage and Tobacco.................... FOOD 8,092 5.6%
Metals and Mining............................ META 8,070 5.6%
Health Products and Services................. HEAL 7,599 5.3%
Investment Companies......................... FUND 6,552 4.6%
Utilities - Electric......................... UTIE 6,491 4.5%
Real Estate Operations....................... REAL 4,945 3.4%
Audio/Video Home Products.................... AUDI 4,442 3.1%
Diversified Operations....................... DIVO 4,025 2.8%
Electronic Products.......................... ETRN 3,467 2.4%
Services..................................... LEIS 3,267 2.3%
Chemicals.................................... CHEM 2,861 2.0%
Miscellaneous................................ MISC 1,597 1.1%
Financial Services........................... FINL 1,402 1.0%
Construction................................. CONS 798 0.6%
Lodging and Restaurants...................... LODG 628 0.4%
Oils and Natural Gas Exploration and
Production.................................. OILS 370 0.3%
-------- -----
$143,927 100.0%
======== =====
</TABLE>
43
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SMALL CAP GROWTH PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Aerospace-1.3%
AAR Corp. ...................................................... 8,300 $ 322
Remec, Inc.*.................................................... 13,500 304
-------
626
Automotive and Rubber-1.4%
Avis Rental A Car, Inc.*........................................ 9,000 287
Keystone Automotive Industries, Inc.*........................... 13,300 316
United Rentals, Inc.*........................................... 3,100 60
-------
663
Business Services-5.2%
Caribiner International, Inc.*.................................. 6,600 294
COREStaff, Inc.*................................................ 9,400 249
Hagler Bailly, Inc.*............................................ 15,300 344
Lamar Advertising Co.*.......................................... 12,100 480
On Assignment, Inc.*............................................ 15,500 411
Outdoor Systems, Inc.*.......................................... 6,637 255
ProBusiness Services, Inc.*..................................... 12,000 275
Universal Outdoor Holdings, Inc.*............................... 4,400 229
-------
2,537
Computer Software and Services-8.3%
Advent Software, Inc.*.......................................... 9,000 258
Aris Corp.*..................................................... 10,500 221
Aspect Development, Inc.*....................................... 6,300 328
Concord Communications, Inc.*................................... 1,600 33
Discreet Logic, Inc.*........................................... 13,000 285
E*TRADE Group, Inc.*............................................ 11,500 265
Flexiinternational Software*.................................... 1,400 22
Information Management Resources, Inc.*......................... 7,950 298
JDA Software Group, Inc.*....................................... 7,200 252
National Computer Systems, Inc.*................................ 5,300 187
National Instruments Corp.*..................................... 8,400 244
PRT Group, Inc.*................................................ 12,300 140
SCM Microsystems, Inc.*......................................... 10,800 259
Securacom, Inc.*................................................ 27,900 272
SPR, Inc.*...................................................... 14,800 252
Symantec Corp.*................................................. 16,400 360
Visio Corp.*.................................................... 9,000 345
Xionics Document Technologies, Inc.*............................ 8,200 31
-------
4,052
Computers and Office Equipment-2.3%
Box Hill Systems Corp.*......................................... 16,200 169
Comverse Technology, Inc.*...................................... 7,100 277
Network Appliance, Inc.*........................................ 19,000 674
-------
1,120
Construction-0.1%
Petersen Cos, Inc.*............................................. 600 14
UNIFAB International, Inc.*..................................... 1,000 19
-------
33
Diversified Operations-1.2%
Aztec Manufacturing Co. ........................................ 11,500 161
Ballantyne of Omaha, Inc.*...................................... 20,800 374
USA Floral Products, Inc.*...................................... 2,000 32
-------
567
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Electronic and Processing Equipment-0.8%
Faro Technologies, Inc.*........................................ 15,500 $ 180
General Scanning, Inc.*......................................... 10,800 186
-------
366
Electronic Products-3.9%
Aavid Thermal Technologies, Inc.*............................... 11,300 271
Aeroflex, Inc.*................................................. 26,900 235
Aseco Corp.*.................................................... 4,700 40
Atmi, Inc.*..................................................... 9,400 228
Integrated Circuit Systems, Inc.*............................... 11,300 322
Level One Communications, Inc.*................................. 8,000 226
Sawtek, Inc.*................................................... 8,900 235
Semtech Corp.*.................................................. 4,900 192
Special Devices, Inc.*.......................................... 5,000 146
-------
1,895
Engineering-0.6%
Innovative Valve Technologies*.................................. 13,600 275
Financial Services-4.0%
Brown Tom, Inc.*................................................ 9,300 179
FIRSTPLUS Financial Group, Inc.*................................ 7,000 269
Interra Financial, Inc. ........................................ 2,800 193
Linc Capital, Inc.*............................................. 19,100 375
Medallion Financial Corp. ...................................... 18,000 396
Mentor Corp. Minnesota.......................................... 6,600 241
Pre-Paid Legal Services, Inc.*.................................. 8,000 274
-------
1,927
Food, Beverage and Tobacco-3.4%
American Italian Pasta Co.*..................................... 12,500 313
Beringer Wine Estates Hldgs*.................................... 4,600 175
Fine Host Corp.*................................................ 2,600 26
Fresh America Corp.*............................................ 9,600 185
Robert Mondavi Corp. - Cl. A*................................... 6,900 336
Scheid Vineyards, Inc. - Cl. A*................................. 25,700 235
Suiza Foods Corporation*........................................ 6,800 405
-------
1,675
Health Products and Services-11.8%
Affymetrix, Inc.*............................................... 8,100 252
American Healthcorp, Inc.*...................................... 23,700 166
Amsurg Corp. Class A*........................................... 2,184 16
Amsurg Corp. Class B*........................................... 14,073 109
Andrx Corp.*.................................................... 8,000 274
ESC Medical Systems, Ltd.*...................................... 8,000 310
Health Care & Retirement Corp................................... 5,200 209
Healthcare Recoveries, Inc...................................... 14,200 316
Incyte Pharmaceuticals, Inc.*................................... 8,000 360
MiniMed, Inc.*.................................................. 6,400 249
Monarch Dental Corp.*........................................... 15,800 209
Myriad Genetics, Inc.*.......................................... 8,600 209
Ocular Sciences, Inc.*.......................................... 10,800 284
Parexel International Corp.*.................................... 10,000 370
Pathogensis Corp.*.............................................. 5,500 204
Perclose, Inc.*................................................. 10,800 208
Protein Design Labs, Inc.*...................................... 5,200 208
Sano Corp.*..................................................... 8,300 275
SeaMed Corp.*................................................... 17,400 322
</TABLE>
44
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SMALL CAP GROWTH PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Health Products and Services-Continued
Sonus Pharmaceuticals, Inc.*.................................... 7,800 $ 258
Sunrise Assisted Living, Inc.*.................................. 6,200 267
Universal Health Services, Inc.*................................ 6,000 302
Wesley Jessen VisionCare, Inc.*................................. 9,700 378
-------
5,755
Household and Personal-2.0%
Furniture Brands International, Inc.*........................... 15,000 308
Mac Gray Corp.*................................................. 19,300 302
Meadowcraft, Inc.*.............................................. 10,900 128
Wolverine World Wide, Inc. ..................................... 10,900 247
-------
985
Insurance-3.1%
Capital Re Corp. ............................................... 3,300 205
CMAC Investment Corp. .......................................... 5,000 302
Esg Re, Ltd.*................................................... 3,200 75
Hartford Life, Inc.............................................. 6,400 290
Life Re Corp. .................................................. 5,800 378
Western National Corp. ......................................... 9,000 267
-------
1,517
Leisure and Recreation Products and Services-2.8%
Cinar Films, Inc.*.............................................. 9,500 369
Gametech International, Inc.*................................... 13,100 141
Premier Parks, Inc.*............................................ 7,000 284
Silverleaf Resorts, Inc.*....................................... 11,600 284
Travel Services International, Inc.*............................ 11,100 264
-------
1,342
Lodging and Restaurants-1.6%
CKE Restaurants, Inc............................................ 6,400 270
Il Fornaio America Corp.*....................................... 16,100 239
Rainforest Cafe, Inc.*.......................................... 7,800 257
-------
766
Machinery and Equipment-1.8%
Applied Power, Inc. ............................................ 2,000 138
Gardner Denver Machinery, Inc.*................................. 14,250 361
ITEQ, Inc.*..................................................... 22,000 253
Ivex Packaging Corp. Delaware*.................................. 5,000 120
-------
872
Media-5.0%
Abacus Direct Corp.*............................................ 10,500 430
Heftel Broadcasting Corp.*...................................... 11,000 513
Jacor Communications, Inc.*..................................... 7,000 372
Market Facts, Inc. ............................................. 11,600 194
Network Event Theater, Inc.*.................................... 45,000 214
Princeton Video Image, Inc.*.................................... 8,000 75
Univision Communications, Inc.*................................. 5,400 377
Vari Lite International, Inc.*.................................. 23,700 283
-------
2,458
Metals and Mining-0.5%
Dril Quip, Inc.*................................................ 200 7
Lone Star Technologies, Inc.*................................... 700 20
Maverick Tube Corp.*............................................ 9,500 240
-------
267
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Miscellaneous-6.2%
Coinstar, Inc.*................................................. 17,300 $ 158
Eastern Environmental Services, Inc.*........................... 14,400 317
EduTrek International, Inc. - Cl. A*............................ 10,200 265
ITI Education Corp.*............................................ 35,400 216
MAXIMUS, Inc.*.................................................. 2,600 63
Peapod, Inc.*................................................... 25,100 163
Philip Services Corp.*.......................................... 27,000 388
PRI Automation, Inc.*........................................... 6,300 182
Rock of Ages Corp. Delaware*.................................... 15,700 243
Samsonite Corp.*................................................ 5,200 164
Shelby Williams Industries, Inc. ............................... 16,700 276
Strayer Education, Inc. ........................................ 6,750 223
Superior Services, Inc.*........................................ 13,300 384
-------
3,042
Oils and Natural Gas Equipment and Services-2.8%
Dawson Production Services, Inc.*............................... 11,300 196
Eagle Geophysical, Inc.*........................................ 8,100 105
Iri International Corp.*........................................ 3,100 43
National-Oilwell, Inc.*......................................... 8,000 274
Newpark Resources, Inc.*........................................ 24,100 422
Precision Drilling Corp. - Cl. A*............................... 12,000 293
Prudential Steel, Ltd........................................... 900 9
-------
1,342
Oils and Natural Gas Exploration and Production-3.0%
Core Laboratories NV*........................................... 9,000 163
Key Energy Group, Inc.*......................................... 9,900 215
Ocean Energy, Inc.*............................................. 4,000 197
Pride International, Inc.*...................................... 10,400 263
Santa Fe Energy Resources, Inc.*................................ 16,900 190
Stone Energy Corp.*............................................. 7,600 255
Vintage Petroleum, Inc. ........................................ 10,400 198
-------
1,481
Pollution Control Equipment and Services-0.6%
American Disposal Svcs, Inc.*................................... 8,400 307
Printing-0.6%
Mail-Well Holdings, Inc.*....................................... 7,500 304
Publications-0.9%
Central Newspapers, Inc. ....................................... 4,000 296
CMP Media, Inc. - Cl. A*........................................ 9,300 160
-------
456
Real Estate Investment Trust-3.5%
Arden Realty Group, Inc. ....................................... 9,400 289
Crescent Real Estate Equities, Inc. ............................ 6,000 236
Equity Office Properties Trust.................................. 8,438 266
Glenborough Realty Trust, Inc. ................................. 10,700 317
Hanover Capital Mortgage Holdings, Inc.......................... 15,200 251
Mack-Cali Realty Corporation.................................... 4,300 176
Starwood Lodging Trust.......................................... 3,000 174
-------
1,709
</TABLE>
45
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- -------------------------------------------------------------------------------
SMALL CAP GROWTH PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Retail-8.8%
99 Cents Only Stores*........................................... 10,500 $ 310
Abercrombie and Fitch Co.*...................................... 9,300 291
Arbor Drugs, Inc. .............................................. 16,500 305
Big Dog Holdings, Inc.*......................................... 12,900 73
Brylane, Inc.*.................................................. 4,800 236
Concepts Direct, Inc.*.......................................... 7,900 166
Cost Plus, Inc.*................................................ 13,000 377
Dominick's Supermarkets, Inc.*.................................. 9,500 347
Genovese Drug Stores, Inc. ..................................... 8,360 143
Hibbett Sporting Goods, Inc.*................................... 14,000 308
Linens 'N Things, Inc.*......................................... 10,000 435
Proffitt's, Inc.*............................................... 12,000 341
Quality Food Centers, Inc....................................... 7,200 481
Stage Stores, Inc.*............................................. 9,000 336
Track Trail, Inc.*.............................................. 17,700 157
White Capital Industries Corp.*................................. 500 9
------
4,315
Telecommunications-1.4%
Innova Corp.*................................................... 12,000 183
MRV Communications, Inc.*....................................... 9,900 236
Tel-Save Holdings, Inc.*........................................ 13,000 258
------
677
Textiles-1.7%
Culp, Inc. ..................................................... 14,400 288
Cutter & Buck, Inc.*............................................ 14,700 274
Tefron, Ltd.*................................................... 11,800 271
------
833
Transportation-4.3%
CH Robinson Worldwide........................................... 14,600 327
Budget Group, Inc. - Cl. A*..................................... 8,300 287
Carey International, Inc.*...................................... 3,600 54
Eagle USA Airfreight, Inc.*..................................... 9,000 257
Jevic Transportation, Inc.*..................................... 15,500 250
Motivepower Industries, Inc.*................................... 12,900 300
Rollins Truck Leasing Corp. .................................... 20,700 370
Simon Transportation Svcs, Inc.*................................ 10,600 254
------
2,099
Utilities - Telecommunications-1.1%
Metromedia Fiber Network, Inc.*................................. 18,900 314
Transcoastal Marine Svcs, Inc.*................................. 900 13
Winstar Communications, Inc.*................................... 9,000 224
------
551
------
TOTAL COMMON STOCK- 96.0% 46,814
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
JOINT REPURCHASE AGREEMENT-4.0%
Investment in joint repurchase agreement with Swiss Bank
Corp. dated 12/31/97
6.60% due 1/02/98(a)........................................ $1,969 $ 1,969
-------
TOTAL JOINT REPURCHASE AGREEMENT- 4.0% 1,969
------ -------
TOTAL INVESTMENTS- 100.0% 48,783
Payables, less cash and receivables- 0.0% (22)
------ -------
NET ASSETS- 100.0% $48,761
====== =======
</TABLE>
(a) The repurchase agreement, dated 12/31/97, is fully collateralized by U.S.
government obligations. The investment in repurchase agreement is through
participation in a joint account with other portfolios advised by John
Hancock. (see Note B)
* Non-income producing security.
ADR-American Depositary Receipt
See notes to financial statements.
46
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL BALANCED PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Australia-2.6%
Amcor, Ltd. (PAPR).............................................. 3,000 $ 13
Boral, Ltd. (BUIL).............................................. 5,000 13
Brambles Industries, Ltd. (DIVO)................................ 2,000 40
Broken Hill Proprietary Co., Ltd. (DIVO)........................ 11,500 107
Coca-Cola Amatil, Ltd. (FOOD)................................... 2,000 15
CRA, Ltd. (META)................................................ 3,000 35
CSR, Ltd. (BUIL)................................................ 4,000 14
David Jones, Ltd. (RETL)........................................ 13,500 15
Lend Lease Corp. (FINL)......................................... 1,400 27
M.I.M. Holdings, Ltd. (META).................................... 11,686 7
Mayne Nickless, Ltd. (DIVO)..................................... 3,000 16
National Australia Bank, Ltd. (BANK)............................ 8,000 112
News Corp., Ltd. (MEDI)......................................... 16,900 93
Pacific Dunlop, Ltd. (DIVO)..................................... 6,700 14
Qantas Airways, Ltd. (TRAN)..................................... 9,336 17
Santos, Ltd. (OILS)............................................. 2,000 8
Telstra Corporation Limited* (TELE)............................. 4,000 8
Westpac Banking Corp., Ltd. (BANK).............................. 12,000 77
WMC, Ltd. (META)................................................ 7,800 27
Woolworth's, Ltd. (RETL)........................................ 4,000 13
-------
671
Belgium-2.0%
Delhaize-Le Lion SA (RETL)...................................... 1,050 53
Electrabel SA (UTIE)............................................ 480 111
Fortis AG (INSU)................................................ 332 69
Fortis AG* (INSU)............................................... 32 0
Generale de Banque SA (BANK).................................... 100 44
Groupe Bruxelles Lambert SA (FUND).............................. 160 23
Kredietbank NV (BANK)........................................... 3 1
Kredietbank NV (BANK)........................................... 60 25
N.V. Union Miniere SA* (META)................................... 282 20
Petrofina SA (OILS)............................................. 150 55
Societe Generale de Belgique (DIVO)............................. 300 27
Solvay SA (CHEM)................................................ 600 38
Tractebel (UTIE)................................................ 350 31
-------
497
Canada-1.9%
Agrium, Inc. (CHEM)............................................. 1,200 14
Alcan Aluminum, Ltd. (META)..................................... 900 25
Bank of Montreal (BANK)......................................... 700 31
Barrick Gold Corp. (META)....................................... 600 11
Canadian National Railway Co. (TRAN)............................ 600 28
Canadian Pacific, Ltd. (TRAN)................................... 2,100 57
Hudson's Bay Co. (RETL)......................................... 800 18
Imasco, Ltd. (FOOD)............................................. 200 7
Imperial Oil, Ltd. (OILS)....................................... 800 52
Magna International, Inc. (AUTO)................................ 200 13
Moore Corp., Ltd.* (EDPE)....................................... 900 14
Newbridge Networks Corp. (TELE)................................. 300 11
Noranda, Inc. (META)............................................ 900 15
Northern Telecom, Ltd. (TELE)................................... 200 18
NOVA Corp. (CHEM)............................................... 2,500 24
Price REIT, Inc. (REIT)......................................... 300 25
Royal Bank of Canada (BANK)..................................... 800 42
Seagram Co., Ltd. (DIVO)........................................ 500 16
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Canada-Continued
TELUS Corp. (TELE).............................................. 1,300 $ 29
Transcanada Pipelines, Ltd. (OILS).............................. 1,300 29
Westcoast Energy, Inc. (UTIG)................................... 600 14
-------
493
Finland-0.5%
Cultor Oyj (FOOD)............................................... 200 12
Merita, Ltd.* (BANK)............................................ 2,500 15
Metsa-Serla Oy - B Shares* (PAPR)............................... 700 6
Outokumpu OY (META)............................................. 600 8
Oy Nokia AB (TELE).............................................. 800 57
Pohjola Insurance Group (INSU).................................. 200 8
Rauma Oy (MACH)................................................. 27 0
Sampo (DIVO).................................................... 400 13
UPM-Kymmene Corp.* (PAPR)....................................... 1,000 20
-------
139
France-3.1%
Accor SA (LODG)................................................. 155 30
Alcatel Alsthom (TELE).......................................... 200 26
AXA SA (INSU)................................................... 480 38
Banque Nationale de Paris (BANK)................................ 600 33
Cie Finance Paribas (BANK)...................................... 321 29
Compagnie de St. Gobain (BUIL).................................. 256 36
Compagnie Generale des Eaux (DIVO).............................. 312 45
Credit Local de France (FINL)................................... 200 23
Elf Aquitaine (OILS)............................................ 400 47
France Telecom* (TELE).......................................... 1,100 40
Group Danone* (FOOD)............................................ 100 18
Lafarge SA (BUIL)............................................... 200 13
Lagardere S.C.A. (DIVO)......................................... 800 26
Lyonnaise des Eaux SA (DIVO).................................... 395 44
Michelin (AUTO)................................................. 558 28
Pechiney SA (DIVO).............................................. 661 26
Pinault-Printemps-Redoute SA (RETL)............................. 100 53
PSA Peugeot (AUTO).............................................. 320 40
Rhone-Poulenc (CHEM)............................................ 926 41
SEITA (FOOD).................................................... 900 32
Societe Generale de Paris (BANK)................................ 285 39
Thomson CFS (ETRN).............................................. 900 28
Total SA - Cl. B (OILS)......................................... 421 46
Usinor Sacilor (META)........................................... 500 7
-------
788
Germany-6.0%
Allianz AG (INSU)............................................... 600 155
BASF AG (CHEM).................................................. 900 32
Bayer AG (CHEM)................................................. 2,000 75
Bayerische Motoren Werke AG (AUTO).............................. 80 59
Commerzbank AG (BANK)........................................... 1,950 77
Continental AG (AUTO)........................................... 1,750 39
Daimler-Benz AG (AUTO).......................................... 800 56
Deutsche Bank AG (BANK)......................................... 1,920 135
Deutsche Telekom* (UTIT)........................................ 6,300 118
Henkel KGaA (CHEM).............................................. 600 38
Hochtief AG (CONS).............................................. 500 20
Hoechst AG (CHEM)............................................... 700 25
</TABLE>
47
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL BALANCED PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Germany-Continued
M.A.N. AG (AUTO)................................................ 130 $ 38
Mannesmann AG (DIVO)............................................ 150 76
Metro AG* (RETL)................................................ 1,310 47
Muenchener Rueckversicherungs-
Gesellschaft (INSU)............................................ 300 113
Preussag AG (META).............................................. 170 52
RWE AG (UTIE)................................................... 1,340 71
Schering AG (HEAL).............................................. 640 62
Siemens AG (DIVO)............................................... 1,300 77
VEBA AG (UTIE).................................................. 1,420 97
Volkswagen AG (AUTO)............................................ 100 56
-------
1,518
Hong Kong-0.6%
Cheung Kong (Holdings), Ltd. (REAL)............................. 5,000 33
China Light & Power Co., Ltd. (UTIE)............................ 2,000 11
Citic Pacific, Ltd. (DIVO)...................................... 2,000 8
Hang Seng Bank, Ltd. (BANK)..................................... 1,500 14
Hong Kong & China Gas Co., Ltd. (UTIG).......................... 9,000 17
Hong Kong Telecommunications, Ltd.
(TELE)......................................................... 10,000 21
Hutchison Whampoa, Ltd. (DIVO).................................. 4,000 25
Sun Hung Kai Properties, Ltd. (REAL)............................ 2,000 14
Swire Pacific, Ltd. - Cl. A (DIVO).............................. 1,000 6
-------
149
Italy-2.5%
Assicurazioni Generali (INSU)................................... 2,500 61
Banca Commerciale Italiana (BANK)............................... 7,000 25
Credito Italiano SpA (BANK)..................................... 11,500 36
Danieli & Co. (ENGI)............................................ 5,000 19
Edison SpA (UTIE)............................................... 2,400 15
Ente Nazionale Idrocarburi SpA (OILS)........................... 18,000 101
Fiat SpA* (AUTO)................................................ 23,000 35
Istituto Mobiliare Italiano SpA (FINL).......................... 3,000 36
Istituto Nazionale delle Assicurazioni
(INSU)......................................................... 13,000 26
Italgas SpA (UTIG).............................................. 4,700 19
La Rinascente SpA (RETL)........................................ 2,760 21
La Rinascente (RETL)............................................ 4,000 15
Mediobanca SpA (FINL)........................................... 1,000 8
Montedison SpA* (DIVO).......................................... 41,620 37
Societa Assicuratrice Industriale
(INSU)......................................................... 2,300 10
Telecom Italia Mobile SpA (UTIT)................................ 19,000 54
Telecom Italia Mobile SpA (UTIT)................................ 8,000 37
Telecom Italia SpA (UTIT)....................................... 14,627 63
Telecom Italia SpA* (TELE)...................................... 4,000 26
-------
644
Japan-9.3%
Amada Co., Ltd (MACH)........................................... 5,000 19
Bank of Tokyo-Mitsubishi (BANK)................................. 5,000 69
Canon Sales Co., Inc. (EDPE).................................... 1,100 13
Canon, Inc. (EDPE).............................................. 3,000 70
Citizen Watch Co., Ltd. (HOUS).................................. 5,000 34
Dai Nippon Printing Co., Ltd. (PRIN)............................ 5,000 93
Daiichi Pharm Co., Ltd. (HEAL).................................. 4,000 45
Daikin Industries, Ltd. (MACH).................................. 5,000 19
Daiwa House Industry Co., Ltd. (CONS)........................... 3,000 16
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Japan-Continued
Fanuc (MACH).................................................... 2,200 $ 83
Fujitsu, Ltd. (EDPE)............................................ 3,000 32
Hitachi, Ltd. (ETRN)............................................ 10,000 71
Honda Motor Co. (AUTO).......................................... 2,000 73
Hoya Corp. (ETRN)............................................... 1,000 31
Inax Corp. (BUIL)............................................... 3,000 9
Ito-Yokado Co., Ltd. (RETL)..................................... 2,000 101
Kanegafuchi Chemical Industry (CHEM)............................ 5,000 23
Keio Teito Electric Railway (TRAN).............................. 6,000 23
Kinki Nippon Railway (TRAN)..................................... 6,000 32
Kirin Brewery Co. (FOOD)........................................ 6,000 44
Kokuyo Co. (EDPE)............................................... 2,000 34
Kuraray Co., Ltd. (TEXT)........................................ 6,000 50
Kyocera Corp. (ETRN)............................................ 1,000 45
Marui Co., Ltd. (RETL).......................................... 3,000 47
Matsushita Electric Industrial Co.* (AUDI)...................... 8,000 117
NGK Insulators (AUTO)........................................... 8,000 71
Nintendo Corp., Ltd. (LEIS)..................................... 500 49
Nippon Meat Packers, Inc. (FOOD)................................ 3,000 41
Nippon Steel Co. (META)......................................... 4,000 6
Nippondenso Co., Ltd. (ETRN).................................... 2,000 36
Okumura Corp. (CONS)............................................ 6,000 14
Osaka Gas Co. (UTIG)............................................ 10,000 23
Sankyo Co., Ltd. (HEAL)......................................... 4,000 90
Secom Co. (ETRN)................................................ 1,000 64
Seino Transportion (TRAN)....................................... 3,000 15
Sekisui House, Ltd. (READ)...................................... 8,000 51
Sony Corp. (AUDI)............................................... 800 71
Sumitomo Bank (BANK)............................................ 5,000 57
Sumitomo Chemical Co. (CHEM).................................... 4,000 9
Sumitomo Electric Industries (ETRN)............................. 4,000 55
Takeda Chemical Industries (HEAL)............................... 3,000 85
TDK Corp. (ETRN)................................................ 1,000 75
Tokio Marine & Fire Insurance Co. (INSU)........................ 5,000 57
Tokyo Electric Power (UTIE)..................................... 1,500 27
Tonen Corp. (OILS).............................................. 3,000 16
Toray Industries, Inc. (CHEM)................................... 18,000 81
Toshiba Corp. (ETRN)............................................ 12,000 50
Toyo Suisan Kaisha (FOOD)....................................... 3,000 21
Toyota Motor Corp. (AUTO)....................................... 3,000 86
Yamazaki Baking Co., Ltd. (FOOD)................................ 2,000 20
-------
2,363
Malaysia-0.7%
Hume Industries (Malaysia) Berhad (BUIL)........................ 5,000 6
Kuala Lumpur Kepong Berhad (DIVO)............................... 9,000 20
Land & General Berhad (DIVO).................................... 6,000 1
Malayan Banking Berhad (BANK)................................... 5,400 16
Malaysia International Shipping Berhad (TRAN)................... 4,000 6
Nestle (Malaysia) Berhad (FOOD)................................. 3,000 14
New Straits Times Press Berhad (PUBL)........................... 4,000 5
Perusahaan Otomobil Nasional Berhad (AUTO)...................... 3,000 3
Petronas Gas Berhad (UTIG)...................................... 4,000 9
Public Bank Berhad Myr 0.5 (BANK)............................... 8,000 3
</TABLE>
48
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL BALANCED PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Malaysia-Continued
Public Bank Berhad A Shares (BANK).............................. 1,600 $ 1
Public Bank Berhad Myr 0.5 (BANK)............................... 1,600 0
Resorts World Berhad (LEIS)..................................... 2,000 3
Rothmans of Pall Mall (Malaysia) Berhad (FOOD).................. 3,000 23
Sime Darby Berhad (DIVO)........................................ 14,000 13
Telekom Malaysia Berhad (TELE).................................. 8,500 25
Tenaga Nasional Berhad (UTIE)................................... 11,000 23
UMW Holdings Berhad (DIVO)...................................... 3,000 2
United Engineers (Malaysia), Ltd. (DIVO)........................ 3,000 2
YTL Corp. Berhad (DIVO)......................................... 6,000 8
YTL Power International Berhad* (MIS) 200 0
-------
183
Netherlands-2.6%
ABN Amro Holding NV (BANK)...................................... 2,809 55
Akzo Nobel NV (CHEM)............................................ 130 22
Elsevier NV (PUBL).............................................. 3,400 55
Heineken NV (FOOD).............................................. 200 35
ING Groep NV (BANK)............................................. 1,663 69
KLM Royal Dutch Air Lines NV (TRAN)............................. 407 15
Koninklijke Nederlandsche Hoogovens NV (META)................... 313 13
Koninklijke PTT Nederland NV (TELE)............................. 1,613 66
Philips Electronics NV (ETRN)................................... 900 54
Royal Dutch Petroleum Co. - NY Shares (OILS).................... 3,800 205
Unilever Nv (DIVO).............................................. 1,200 73
-------
662
New Zealand-1.8%
Brierley Investments, Ltd. (FUND)............................... 71,400 51
Carter Holt Harvey, Ltd. (PAPR)................................. 34,000 53
Fletcher Challenge Building (BUIL).............................. 11,000 22
Fletcher Challenge Energy (OILS)................................ 12,000 42
Fletcher Challenge Forests (PAPR)............................... 24,520 20
Fletcher Challenge Paper (PAPR)................................. 22,500 29
Lion Nathan, Ltd. (FOOD)........................................ 8,000 18
Telecom Corp. of New Zealand (UTIT)............................. 48,000 232
-------
467
Singapore-0.9%
City Developments, Ltd. (READ).................................. 3,000 14
DBS Land, Ltd. (READ)........................................... 5,000 8
Development Bank of Singapore, Ltd. (BANK)...................... 3,000 26
Elec & Eltek International Co., Ltd. (ETRN)..................... 1,100 5
Fraser & Neave, Ltd. (FOOD)..................................... 1,000 4
Hotel Properties, Ltd. (LODG)................................... 9,000 6
Keppel Corp., Ltd. - Cl. A* (DIVO).............................. 3,250 9
Keppel Land, Ltd. (DIVO)........................................ 3,000 4
Oversea-Chinese Bank Corp., Ltd. (BANK)......................... 4,600 27
Singapore Airlines, Ltd. (TRAN)................................. 5,000 33
Singapore Press Holdings, Ltd. (PUBL)........................... 1,000 13
Singapore Telecommunications, Ltd. (UTIT)....................... 21,000 39
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Singapore-Continued
United Overseas Bank, Ltd. (BANK)............................... 5,000 $ 28
Wing Tai Holdings, Ltd. (DIVO).................................. 3,000 4
-------
220
Spain-1.6%
Banco Bilbao Vizcaya SA (BANK).................................. 1,500 49
Banco Popular Espanol SA (BANK)................................. 520 36
Banco Santander SA (BANK)....................................... 1,050 35
Banco Central Hispanoamericano (BANK)........................... 1,200 29
Corporation, Mapfre Sa (INSU)................................... 400 11
Empresa Nacional de Electricidad SA (UTIE)...................... 2,800 50
Fomento de Construcciones y Contratas SA (CONS)................. 400 15
Gas Natural SDG SA (UTIG)....................................... 500 26
Iberdrola SA (UTIE)............................................. 2,800 37
Repsol SA (OILS)................................................ 700 30
Tabacalera SA* (FOOD)........................................... 100 8
Telefonica de Espana (UTIT)..................................... 1,700 49
Vallehermoso SA (READ).......................................... 400 12
Viscofan Industria Navarra de Envolturas Celulosicas
SA (FOOD)...................................................... 500 13
-------
400
Sweden-1.0%
ABB AB - Cl. A (MACH)........................................... 1,100 13
Astra Ab (HEAL)................................................. 2,600 45
Electrolux AB - Ser. B (HOUS)................................... 200 14
Ericsson(Lm) Telephone (TELE)................................... 900 34
Hennes & Mauritz AB - B Shares (RETL)........................... 600 26
Nordbanken Holding* (BANK)...................................... 6,100 34
Securitas Ab (DIVO)............................................. 500 15
Skanska Ab (DIVO)............................................... 300 12
Svenska Handelsbanken, Inc. (BANK).............................. 500 17
Swedish Match (DIVO)............................................ 8,500 28
Volvo(Ab) (AUTO)................................................ 1,000 27
-------
265
Switzerland-2.8%
ABB AG* (ENGI).................................................. 13 17
CS Holding AG (BANK)............................................ 453 70
Holderbk Fn Glarus (BANK)....................................... 25 21
Nestle SA (FOOD)................................................ 53 79
Novartis AG* (HEAL)............................................. 113 183
Roche Holdings AG (HEAL)........................................ 13 129
Sairgroup* (AERO)............................................... 14 20
Schweizerische Bankgesellschaft (BANK).......................... 33 49
Schweizerische Rueckversicherungs-
Gesellschaft (INSU)............................................ 32 60
Sulzer AG (DIVO)................................................ 25 17
Swiss Life (INSU)............................................... 31 25
Zurich Versicherungsgesellschaft (INSU)......................... 90 44
-------
714
</TABLE>
49
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL BALANCED PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
United Kingdom - 14.0%
Abbey National First Capital BV (BANK).......................... 4,000 $ 72
B.A.T. Industries plc (FOOD).................................... 18,400 168
Barclays Bank (BANK)............................................ 2,000 53
Bass plc - ADR (LODG)........................................... 2,300 36
BG plc (UTIG)................................................... 19,970 90
Billiton plc (META)............................................. 15,000 38
Booker plc (FOOD)............................................... 8,300 44
British Energy plc (UTIE)....................................... 10,000 69
British Petroleum Co. plc - ADR* (OILS)......................... 10,931 144
British Sky Broadcast (TELE).................................... 5,000 37
British Steel plc (META)........................................ 18,800 40
British Telecommunications plc (TELE)........................... 17,500 137
BTR plc (DIVO).................................................. 7,000 21
Cable & Wireless plc (TELE)..................................... 4,000 35
Cadbury Schweppes plc (FOOD).................................... 7,000 71
Centrica plc* (UTIG)............................................ 15,500 23
Charter plc (DIVO).............................................. 4,372 54
Coats Viyella plc (TEXT)........................................ 16,500 25
FKI plc (MACH).................................................. 19,500 61
General Electric Co. plc (ETRN)................................. 17,900 116
Glaxo Wellcome plc - ADR (HEAL)................................. 10,300 245
Great Universital Stores plc (RETL)............................. 6,000 76
Greenalls Group (FOOD).......................................... 5,000 36
Guinness plc (FOOD)............................................. 7,800 70
Hanson plc (BUIL)............................................... 6,875 31
Hillsdown Holdings plc (FOOD)................................... 20,000 49
House of Fraser plc (RETL)...................................... 21,000 68
HSBC Holdings plc (BANK)........................................ 4,000 104
Inchcape plc (DIVO)............................................. 10,000 27
Jefferson Smurfit Group plc (MISC).............................. 16,000 44
Legal & General Group plc (INSU)................................ 10,500 92
Lloyds TSB Group plc (BANK)..................................... 14,000 182
Marks & Spencer plc (RETL)...................................... 12,000 119
Mirror Group plc (PUBL)......................................... 20,000 64
National Westminster Bank plc (BANK)............................ 3,500 58
Northern Foods plc (FOOD)....................................... 11,000 48
Peninsular & Oriental Steam Navigation Co. (TRAN)............... 7,500 85
Reckitt & Colman plc (HOUS)..................................... 2,425 38
Reuters Holdings plc (MEDI)..................................... 4,000 44
RJB Mining plc (META)........................................... 10,500 22
Royal & Sun Alliance Insurance Group plc (INSU)................. 4,944 50
RTZ Corp. plc (META)............................................ 4,900 59
Scottish Hydro-Electric plc (UTIE).............................. 4,900 40
Sears plc (RETL)................................................ 27,000 24
Sedgwick Group plc (INSU)....................................... 17,500 41
SmithKline Beecham plc (HEAL)................................... 12,000 123
Tate & Lyle (FOOD).............................................. 5,000 41
Tesco plc (RETL)................................................ 8,500 70
Thames Water plc (WATR)......................................... 5,000 74
Unilever plc (DIVO)............................................. 5,000 43
Vodafone Group plc (TELE)....................................... 10,500 76
Williams plc (DIVO)............................................. 12,000 67
-------
3,544
-------
TOTAL COMMON STOCK- 53.9% 13,717
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
PREFERRED STOCK
Australia-0.1%
News Corp., Ltd. - Pref. (MEDI)............................ 3,000 $ 15
<CAPTION>
Par
Value
(000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-43.1%
Australia-3.1%
Commonwealth of Australia - Bonds (GOVF)
10.00% due 10/15/02........................................ $ 500 383
Queensland Treasury - Global Notes (GOVF)
8.00% due 5/14/03.......................................... 580 414
-------
797
Canada-5.0%
Government of Canada - Debs. (GOVF)
7.50% due 12/01/03......................................... 1,000 770
4.50% due 12/01/21......................................... 635 489
-------
1,259
Denmark-5.0%
Kingdom of Denmark - Bonds (GOVF)
8.00% due 5/15/03.......................................... 7,700 1,269
France-1.7%
Government of France - Bonds (GOVF)
8.25% due 2/27/04.......................................... 2,200 428
Germany-10.5%
Federal Republic of Germany - Bonds (GOVF)
8.25% due 9/20/01.......................................... 2,400 1,496
8.00% due 7/22/02.......................................... 550 345
6.00% due 9/15/03.......................................... 1,400 820
-------
2,661
Italy-2.4%
Republic of Italy - Bonds (GOVF)
6.25% due 3/01/02.......................................... 1,035,000 610
Netherlands-4.0%
Government of Netherlands - Bonds (GOVF)
7.00% due 2/15/03.......................................... 970 522
6.50% due 4/15/03.......................................... 930 491
-------
1,013
Spain-3.0%
Government of Spain - Bonds (GOVF)
7.90% due 2/28/02.......................................... 105,000 763
Sweden-1.2%
Government of Sweden - Bonds (GOVF)
10.25% due 5/05/03......................................... 2,000 303
United Kingdom-7.2%
Conversion - Bonds (GOVF)
9.50% due 10/25/04......................................... 470 900
</TABLE>
50
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL BALANCED PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
United Kingdom-Continued
U.K. Treasury - Bonds (GOVF)
6.75% due 11/26/04............................................ $ 339 $ 568
9.00% due 10/13/08............................................ 188 374
-------
1,842
-------
TOTAL PUBLICLY-TRADED BONDS- 43.1% 10,945
WARRANTS-0.0%
AXA-UAP
expires 1/07/99 (Cost $2)..................................... 0 0
Compagnie General de Eaux
expires 5/02/01............................................... 1 0
La Rinascente SpA
expires 11/30/99.............................................. 0 0
Societe Generale de Belgique
expires 11/15/99............................................. 0 0
-------
TOTAL WARRANTS- 0
RIGHTS-0.0%
La Renascente SpA
Expires 1/16/98 (Cost $2)..................................... 2 0
COMMERCIAL PAPER-1.2%
Ford Motor Credit Co.
5.55% due 1/14/98............................................. 300 299
------ -------
TOTAL INVESTMENTS- 98.3% 24,976
Cash and receivables, less payables- 1.7% 444
------ -------
NET ASSETS- 100.0% $25,420
====== =======
</TABLE>
ADR-American Depository Receipt
* Non-income producing security.
See notes to financial statements.
51
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL BALANCED PORTFOLIO
SUMMARY OF LONG-TERM SECURITIES BY INDUSTRY
<TABLE>
<CAPTION>
Industry Market % of
Industry Abbreviation Value Long-Term
(000's) Investments
<S> <C> <C> <C>
Foreign Government............................ GOVF $10,945 44.4%
Banks and Finance............................. BANK 1,895 7.7%
Diversified Operations........................ DIVO 1,023 4.2%
Health Products and Services.................. HEAL 1,007 4.1%
Food, Beverage and Tobacco.................... FOOD 931 3.8%
Insurance..................................... INSU 860 3.5%
Oils and Natural Gas Exploration and
Production................................... OILS 775 3.1%
Retail........................................ RETL 766 3.1%
Telecommunications............................ TELE 646 2.6%
Electronic Products........................... ETRN 630 2.6%
Automotive and Rubber......................... AUTO 624 2.5%
Utilities -Telecommunications................. UTIT 592 2.4%
Utilities - Electric.......................... UTIE 582 2.4%
Chemicals..................................... CHEM 422 1.7%
Metals and Mining............................. META 385 1.6%
Transportation................................ TRAN 311 1.3%
Utilities - Gas............................... UTIG 221 0.9%
Machinery and Equipment....................... MACH 195 0.8%
Audio/Video Home Products..................... AUDI 188 0.8%
Computers and Office Equipment................ EDPE 163 0.7%
Media......................................... MEDI 152 0.6%
Building Products............................. BUIL 144 0.6%
Paper and Forest Products..................... PAPR 141 0.6%
Publications.................................. PUBL 137 0.6%
Financial Services............................ FINL 94 0.4%
Printing...................................... PRIN 93 0.4%
Household and Personal........................ HOUS 86 0.4%
Real Estate Development....................... READ 85 0.3%
Investment Companies.......................... FUND 74 0.3%
Textiles...................................... TEXT 75 0.3%
Water and Water Treatment Services............ WATR 74 0.3%
Lodging and Restaurants....................... LODG 72 0.3%
Construction.................................. CONS 65 0.3%
Leisure and Recreation Products and Services.. LEIS 52 0.2%
Real Estate Operations........................ REAL 47 0.2%
Miscellaneous................................. MISC 44 0.2%
Engineering................................... ENGI 36 0.2%
Real Estate Investment Trust.................. REIT 25 0.1%
Aerospace..................................... AERO 20 0.1%
------- -----
$24,677 100.0%
======= =====
</TABLE>
52
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
MID CAP GROWTH PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Value
Shares (000's)
<S> <C> <C>
COMMON STOCK
Automotive and Rubber-0.7%
OEA, Inc.*..................................................... 9,650 $ 279
Banks and Finance-2.3%
First Empire State Corp........................................ 600 279
Northern Trust Corp............................................ 3,375 235
Regions Financial Corp......................................... 5,025 212
Star Banc Corporation.......................................... 3,700 212
-------
938
Business Services-9.9%
Capita Group plc............................................... 96,838 590
Coinmach Laundry Corp.*........................................ 7,425 182
Outdoor Systems, Inc.*......................................... 12,275 471
Paychex, Inc................................................... 44,325 2,244
Profit Recovery Group International, Inc.*..................... 12,150 216
Robert Half International, Inc.*............................... 3,150 126
Snyder Communications, Inc.*................................... 3,800 139
-------
3,968
Computer Software and Services-3.4%
America Online, Inc.*.......................................... 4,450 397
Cadence Design Systems, Inc.*.................................. 40,175 984
-------
1,381
Computers and Office Equipment-2.0%
SIPEX Corporation*............................................. 20,125 609
Vitesse Semiconductor Corporation*............................. 5,450 206
-------
815
Electronic and Processing Equipment-1.9%
Maxim Integrated Products, Inc.*............................... 22,100 762
Electronic Products-3.4%
Berg Electronics Corp.*........................................ 22,125 503
Littelfuse, Inc.*.............................................. 28,150 700
Sanmina Corporation*........................................... 2,325 158
-------
1,361
Financial Services-5.8%
American Capital Strategies, Ltd............................... 9,600 174
Ameripath, Inc.*............................................... 11,650 198
Capital Trust - Cl. A*......................................... 14,000 158
Charles Schwab Corp............................................ 21,662 908
HealthCare Financial Partners, Inc.*........................... 15,450 548
Medallion Financial Corp. ..................................... 15,875 349
-------
2,335
Food, Beverage and Tobacco-1.2%
JP Foodservice, Inc.*.......................................... 12,550 464
Government Agencies-0.4%
Federal Agricultural Mortgage Corp.*........................... 2,775 169
Health Products and Services-8.1%
Omnicare, Inc. ................................................ 73,025 2,265
Pediatrix Medium Group, Inc.*.................................. 12,350 528
Sofamor Danek Group, Inc.*..................................... 7,450 485
-------
3,278
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Value
Shares (000's)
<S> <C> <C>
COMMON STOCK-Continued
Insurance-2.8%
Progressive Corp. ............................................. 5,300 $ 635
Protective Life Corp. ......................................... 4,075 243
UICI*.......................................................... 6,550 228
-------
1,106
Investment Companies-1.2%
Amvescap plc................................................... 56,324 482
Leisure and Recreation Products and
Services-4.0%
Family Golf Centers, Inc.*..................................... 8,275 260
Premier Parks, Inc.*........................................... 7,825 317
Regal Cinemas,Inc.*............................................ 8,025 224
Royal Caribbean Cruises, Ltd................................... 15,175 809
-------
1,610
Lodging and Restaurants-11.1%
J.D. Wetherspoon plc........................................... 354,710 1,940
Papa John's International, Inc.*............................... 25,362 884
PizzaExpress plc............................................... 132,379 1,622
-------
4,446
Machinery and Equipment-0.5%
Rental Service Corp.*.......................................... 8,475 208
Media-9.6%
Chancellor Media Corp.*........................................ 11,250 840
Clear Channel Communications, Inc.*............................ 19,600 1,557
Heftel Broadcasting Corp.*..................................... 19,550 914
Univision Communications, Inc.*................................ 7,750 541
-------
3,852
Miscellaneous-6.1%
Apollo Group, Inc. - Cl. A*.................................... 32,750 1,547
DeVry, Inc.*................................................... 2,150 69
Sealed Air Corp.*.............................................. 10,850 670
Trigen Energy Corp. ........................................... 8,925 178
-------
2,464
Oils and Natural Gas Equipment and Services-1.4%
Hanover Compressor Co.*........................................ 27,950 571
Pollution Control Equipment and
Services-0.3%
Culligan Water Technologies, Inc.*............................. 2,425 122
Real Estate Development-0.9%
Security Capital Group, Inc.*.................................. 11,525 375
Real Estate Investment Trust-0.6%
Vornado Realty Trust........................................... 5,050 237
Real Estate Operations-2.1%
Insignia Financial Group, Inc.* - Cl. A........................ 37,500 863
Retail-10.0%
Barnett, Inc.*................................................. 26,700 587
CompUSA, Inc.*................................................. 9,800 304
Fastenal Co. .................................................. 38,900 1,488
Fred Meyer, Inc.*.............................................. 4,700 171
MSC Industrial Direct Co., Inc.*............................... 4,500 191
</TABLE>
53
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
MID CAP GROWTH PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Value
Shares (000's)
<S> <C> <C>
COMMON STOCK-Continued
Retail-Continued
O'Reilly Automotive, Inc.*.................................... 6,550 $ 172
Petco Animal Supplies, Inc.*.................................. 41,309 991
Quality Food Centers, Inc.*................................... 1,550 104
-------
4,008
Telecommunications-1.6%
PriCellular Corp. - Cl. A*.................................... 60,462 631
Transportation-0.8%
Ryanair Holdings plc - ADR*................................... 13,275 334
Utilities - Electric-3.1%
AES Corp.*.................................................... 26,600 1,240
-------
TOTAL COMMON STOCK- 95.2% 38,299
<CAPTION>
Par
Value
(000's)
<S> <C> <C>
SHORT-TERM INVESTMENTS-5.0%
Federal Home Loan Mortgage Discount Nts
6.00% due 1/02/98............................................ $ 2,000 1,999
WARRANTS-0.0%
Littelfuse, Inc.
expires 12/27/01............................................. 1 15
------- -------
TOTAL INVESTMENTS- 100.2 % 40,313
Payables, less cash and receivables- (0.2)% (78)
------- -------
NET ASSETS- 100.0 % $40,235
======= =======
</TABLE>
* Non-income producing security.
ADR-American Depository Receipt
See notes to financial statements.
54
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
LARGE CAP VALUE PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Aerospace-0.0%
Raytheon Co. ................................................... 517 $ 25
Automotive and Rubber-1.8%
Echlin, Inc. ................................................... 8,700 315
General Motors Corp. ........................................... 8,100 491
Genuine Parts Co. .............................................. 14,200 482
-------
1,288
Banks and Finance-9.0%
Banc One Corp. ................................................. 11,000 597
BankBoston Corp. ............................................... 4,400 413
Bankers Trust New York Corp. ................................... 5,700 642
Chase Manhattan Corp. .......................................... 6,000 658
First Union Corp. .............................................. 8,170 419
Fleet Financial Group, Inc. .................................... 7,000 525
J.P. Morgan & Co., Inc. ........................................ 5,300 598
Mellon Bank Corp. .............................................. 22,100 1,341
Mercantile Bankshares Corp. .................................... 7,200 282
National City Corp. ............................................ 5,900 388
PNC Bank Corp. ................................................. 5,700 325
Wells Fargo & Co. .............................................. 1,200 407
-------
6,595
Building Products-0.5%
Armstrong World Industries, Inc. ............................... 4,700 351
Business Services-0.5%
ACNielson Corp.*................................................ 1 0
Dun & Bradstreet Corp........................................... 12,500 387
-------
387
Chemicals-6.3%
Dow Chemical Co. ............................................... 10,900 1,107
E.I. du Pont de Nemours & Co. .................................. 11,500 692
Eastman Chemical Co. ........................................... 4,400 262
Great Lakes Chemical Corp. ..................................... 12,400 556
Imperial Chemical Industries plc - ADR.......................... 6,300 409
Lubrizol Corp. ................................................. 6,600 243
Nalco Chemical Co. ............................................. 8,600 340
PPG Industries, Inc. ........................................... 6,300 360
Witco Corp. .................................................... 15,100 616
-------
4,585
Diversified Operations-4.9%
Fortune Brands, Inc. ........................................... 10,300 382
Frontier Corp. ................................................. 11,400 274
General Electric Co. ........................................... 9,800 720
Lonrho plc...................................................... 59,200 91
Minnesota Mining & Manufacturing Co. ........................... 3,000 246
Olin Corp. ..................................................... 10,400 488
Sara Lee Corp. ................................................. 4,800 270
Tomkins plc..................................................... 94,600 447
Unilever NV..................................................... 5,300 331
Western Resources, Inc. ........................................ 7,300 314
-------
3,563
Electronic Products-1.1%
AMP, Inc. ...................................................... 11,300 475
Hubbell, Inc. - Cl. B........................................... 7,100 350
-------
825
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Financial Services-1.2%
American Express Co. ........................................... 4,000 $ 357
H & R Block, Inc. .............................................. 11,700 524
-------
881
Food, Beverage and Tobacco-7.1%
Anheuser-Busch Cos., Inc. ...................................... 18,600 819
Cadbury Schweppes plc........................................... 19,100 193
General Mills, Inc. ............................................ 8,400 602
H.J. Heinz Co. ................................................. 9,600 488
McCormick & Co., Inc. .......................................... 18,300 512
Philip Morris Cos., Inc. ....................................... 18,300 830
Quaker Oats Co. ................................................ 11,600 612
RJR Nabisco Holdings Corp. ..................................... 9,900 371
UST, Inc. ...................................................... 21,000 777
-------
5,204
Government Agencies-1.0%
Federal National Mortgage Assoc. ............................... 12,600 720
Health Products and Services-5.5%
Abbott Laboratories............................................. 6,700 439
American Home Products Corp..................................... 12,400 950
Amgen, Inc...................................................... 4,200 227
Bausch & Lomb, Inc. ............................................ 7,900 313
Baxter International, Inc. ..................................... 4,600 232
C.R. Bard, Inc. ................................................ 8,200 257
Pharmacia & Upjohn, Inc. ....................................... 21,000 770
Smith & Nephew plc.............................................. 85,700 253
U.S. Surgical Corp. ............................................ 19,200 563
-------
4,004
Household and Personal-1.2%
Colgate-Palmolive Co. .......................................... 1,300 96
Rubbermaid, Inc. ............................................... 1,700 43
Tupperware Corp. ............................................... 9,600 268
Whirlpool Corp. ................................................ 8,200 451
-------
858
Insurance-5.3%
American General Corp. ......................................... 10,700 578
EXEL, Ltd. ..................................................... 7,400 469
Hilb, Rogal & Hamilton Co. ..................................... 1,600 31
Lincoln National Corp. ......................................... 4,900 383
Safeco Corp. ................................................... 8,200 400
St. Paul Cos., Inc. ............................................ 7,700 633
Transamerica Corp. ............................................. 3,600 383
Travelers Group, Inc. .......................................... 8,550 461
USF & G Corp. .................................................. 12,300 271
Willis Corroon Group plc........................................ 19,400 239
-------
3,848
Lodging and Restaurants-0.6%
Hilton Hotels Corp. ............................................ 8,100 241
ITT Corp.*...................................................... 2,700 224
-------
465
Machinery and Equipment-0.7%
Allied Signal, Inc. ............................................ 4,800 187
Cooper Industries, Inc. ........................................ 6,900 338
-------
525
</TABLE>
55
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
LARGE CAP VALUE PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Media-2.0%
Dow Jones & Co., Inc. .......................................... 9,000 $ 483
Knight-Ridder, Inc. ............................................ 12,500 651
McGraw-Hill Cos., Inc. ......................................... 4,800 355
-------
1,489
Metals and Mining-1.5%
Inco, Ltd. ..................................................... 7,300 124
Newmont Mining Corp. ........................................... 12,100 355
Reynolds Metals Co. ............................................ 5,600 336
USX-US Steel Group, Inc. ....................................... 8,600 269
-------
1,084
Miscellaneous-1.6%
Brown-Forman Corp. - Cl. B...................................... 7,300 403
Pall Corp. ..................................................... 18,700 387
Unifi Inc. ..................................................... 1,300 53
Waste Management, Inc. ......................................... 12,100 333
-------
1,176
Oils and Natural Gas Exploration and Production-10.8%
Amerada Hess Corp. ............................................. 9,000 494
Amoco Corp. .................................................... 7,500 639
Atlantic Richfield Co. ......................................... 12,800 1,027
British Petroleum Co. plc - ADR................................. 5,700 454
Chevron Corp. .................................................. 8,300 640
Enron Corp. .................................................... 8,500 353
Exxon Corp. .................................................... 13,500 827
Mobil Corp. .................................................... 10,600 766
Occidental Petroleum Corp. ..................................... 15,300 448
Phillips Petroleum Co. ......................................... 7,100 345
Repsol SA - ADR................................................. 6,200 264
Royal Dutch Petroleum Co. - NY Shares........................... 9,600 520
Texaco, Inc. ................................................... 13,000 708
USX-Marathon Group.............................................. 12,200 412
-------
7,897
Paper and Forest Products-2.5%
Consolidated Papers, Inc. ...................................... 7,600 406
Georgia Pacific Corp. .......................................... 3,100 188
Georgia Pacific Corp............................................ 3,100 70
International Paper Co. ........................................ 9,000 388
Kimberly-Clark Corp. ........................................... 3,500 173
Union Camp Corp. ............................................... 11,400 612
-------
1,837
Photography and Related Services-0.9%
Eastman Kodak Co. .............................................. 10,900 664
Printing-0.9%
Deluxe Corp. ................................................... 5,200 179
R.R. Donnelley & Sons Co. ...................................... 13,500 503
-------
682
Publications-0.4%
Readers Digest Association, Inc. - Cl. A........................ 10,100 239
Readers Digest Association, Inc. - Cl. B........................ 1,100 27
-------
266
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Real Estate Development-0.1%
Rouse Co. ...................................................... 3,200 $ 105
Real Estate Investment Trust-1.2%
Security Capital Pacific Trust.................................. 5,500 133
Simon DeBartolo Group, Inc. .................................... 17,496 572
Weingarten Realty Investors..................................... 3,200 143
-------
848
Retail-1.4%
J.C. Penney, Inc. .............................................. 12,500 755
May Department Stores Co. ...................................... 5,800 306
-------
1,061
Soap, Cosmetics and Personal Care-0.9%
International Flavors & Fragrances, Inc. ....................... 13,400 691
Transportation-3.2%
Alexander & Baldwin, Inc. ...................................... 5,400 147
Burlington Northern Santa Fe.................................... 4,600 428
GATX Corp. ..................................................... 3,400 247
Norfolk Southern Corp. ......................................... 20,100 620
Union Pacific Corp. ............................................ 14,800 925
-------
2,367
Utilities - Electric-7.9%
Baltimore Gas & Electric Co. ................................... 7,000 238
Central & South West Corp. ..................................... 9,200 249
Dominion Resources, Inc. ....................................... 8,700 370
DQE, Inc. ...................................................... 9,600 337
Duke Energy Co. ................................................ 11,800 654
Entergy Corp. .................................................. 11,000 329
Firstenergy Corp.*.............................................. 18,095 525
GPU, Inc. ...................................................... 3,700 156
Houston Industries, Inc. ....................................... 17,600 470
PacifiCorp...................................................... 12,800 350
Peco Energy Co. ................................................ 12,200 296
PG & E Corp. ................................................... 7,700 234
Public Services Enterprise Group, Inc. ......................... 6,400 203
Southern Co. ................................................... 21,600 559
Teco Energy, Inc. .............................................. 11,200 315
Unicom Corp. ................................................... 15,600 480
-------
5,765
Utilities - Telecommunications-8.9%
Alltel Corp. ................................................... 24,000 987
AT&T Corp. ..................................................... 22,200 1,361
BCE, Inc. ...................................................... 12,700 423
Bell Atlantic Corp. ............................................ 6,800 620
BellSouth Corp. ................................................ 9,500 535
GTE Corp. ...................................................... 15,300 800
SBC Communications, Inc. ....................................... 11,133 816
Southern New England Telecommunications Corp. .................. 7,000 352
Sprint Corp..................................................... 6,300 369
U.S. West Communications Group.................................. 6,100 275
-------
6,538
-------
TOTAL COMMON STOCK- 90.9% 66,594
</TABLE>
56
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
LARGE CAP VALUE PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-1.0%
U.S. Governmental-1.0%
U.S. Treasury - Notes
5.875% due 11/15/99........................................... 200 $ 201
6.50% due 5/31/01............................................. 200 205
5.75% due 8/15/03............................................. 150 150
7.00% due 7/15/06............................................. 150 162
------
718
</TABLE>
<TABLE>
<S> <C> <C>
COMMERCIAL PAPER-7.9%
Bank of New York Ba
5.83% due 1/16/98.............................................. 960 953
Coca Cola Co.
5.56% due 2/09/98.............................................. 2,500 2,468
Dover Corp.
5.85% due 1/08/98.............................................. 1,425 1,419
Federal National Mortgage Association
5.70% due 1/21/98.............................................. 979 974
-------
TOTAL COMMERCIAL PAPER- 5,814
------ -------
TOTAL INVESTMENTS- 99.8% 73,126
Cash and receivables, less payables- 0.2% 143
------ -------
NET ASSETS- 100.0% $73,269
====== =======
</TABLE>
* Non-income producing security.
ADR-American Depository Receipt
See notes to financial statements.
57
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
CERTIFICATES OF DEPOSIT
Banks and Finance-5.4%
MBNA America Bank N.A.
5.75% due 2/02/98......................................... $ 10,000 $ 10,232
Westpac Banking Corp.
5.97% due 3/23/98......................................... 2,000 2,095
---------
TOTAL CERTIFICATES OF DEPOSIT- 5.4% 12,327
COMMERCIAL PAPER
Automotive and Rubber-6.1%
Daimler Benz of North America
5.54% due 2/02/98......................................... 830 826
5.60% due 3/02/98......................................... 2,000 1,981
General Motors Acceptance Corp.
5.74% due 2/13/98......................................... 2,500 2,483
5.71% due 2/27/98......................................... 4,000 3,964
5.75% due 3/13/98......................................... 3,000 2,966
5.76% due 3/19/98......................................... 1,700 1,679
---------
13,899
Banks and Finance-4.9%
Bank Boston
5.85% due 5/12/98......................................... 3,000 3,010
First National Bank of Boston
5.71% due 1/07/98......................................... 8,000 8,221
---------
11,231
Diversified Operations-1.7%
Monsanto Company
5.55% due 1/07/98......................................... 4,000 3,996
Financial Services-62.0%
AC Acquisition Holdings Co.
5.59% due 1/14/98......................................... 5,000 4,990
5.70% due 2/18/98......................................... 4,027 3,996
5.67% due 2/24/98......................................... 2,500 2,479
Abbey National of North America
5.51% due 1/23/98......................................... 2,615 2,606
Alpine Securitization Corp.
5.87% due 1/05/98......................................... 2,500 2,498
5.82% due 2/02/98......................................... 2,975 2,960
Assets Securitization Corp.
5.74% due 3/17/98......................................... 5,000 4,940
Corporate Asset Funding Corp.
5.77% due 2/19/98......................................... 4,560 4,524
Enterprise Funding Corp.
5.66% due 1/05/98......................................... 3,000 2,998
5.59% due 1/12/98......................................... 500 499
5.67% due 1/15/98......................................... 1,100 1,098
5.77% due 1/26/98......................................... 1,518 1,512
5.87% due 2/20/98......................................... 2,000 1,984
Falcon Asset Securitization Corp.
5.85% due 2/25/98......................................... 6,000 5,946
5.75% due 3/23/98......................................... 3,000 2,961
General Electric Capital Corp.
5.71% due 1/21/98......................................... 6,429 6,409
General Electric Credit Capital Services
5.72% due 1/22/98......................................... 3,500 3,488
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
COMMERCIAL PAPER-Continued
Financial Services-Continued
Goldman Sachs Group LP
5.74% due 3/27/98......................................... $ 2,401 $ 2,368
Greenwich Funding Corp.
5.85% due 2/18/98......................................... 3,000 2,977
IBM Credit Corp.
5.70% due 1/16/98......................................... 1,357 1,354
Lehman Brothers, Inc.
7.63% due 8/01/98......................................... 1,000 1,040
Lehman Brothers Holdings, Inc.
5.68% due 1/30/98......................................... 4,500 4,479
5.80% due 3/05/98......................................... 6,000 5,939
Merrill Lynch & Co., Inc.
5.54% due 1/06/98......................................... 1,200 1,199
5.58% due 1/12/98......................................... 3,000 2,995
5.57% due 1/30/98......................................... 282 281
5.65% due 1/30/98......................................... 3,000 2,986
5.75% due 3/13/98......................................... 655 648
5.72% due 4/01/98......................................... 1,920 1,893
Monte Rosa Capital Corp.
5.79% due 2/12/98......................................... 3,175 3,154
5.80% due 2/13/98......................................... 3,773 3,747
PHH Corp.
5.62% due 1/09/98......................................... 1,103 1,102
5.55% due 1/12/98......................................... 1,185 1,183
5.73% due 2/27/98......................................... 3,500 3,468
5.75% due 3/13/98......................................... 3,377 3,339
Preferred Receivables Funding Corp.
5.76% due 2/11/98......................................... 5,000 4,967
Receivables Capital Corp.
5.74% due 1/15/98......................................... 1,975 1,971
6.01% due 2/05/98......................................... 1,264 1,256
5.76% due 2/23/98......................................... 2,443 2,422
Sheffield Receivables Corp.
5.74% due 1/15/98......................................... 6,000 5,987
5.76% due 1/23/98......................................... 4,995 4,977
Sigma Finance, Inc.
5.54% due 1/07/98......................................... 2,500 2,498
5.63% due 1/07/98......................................... 2,000 1,998
5.55% due 3/19/98......................................... 5,000 4,941
Twin Towers, Inc.
5.56% due 1/16/98......................................... 1,654 1,650
5.57% due 1/16/98......................................... 5,000 4,988
5.59% due 1/16/98......................................... 3,440 3,432
5.74% due 1/21/98......................................... 1,174 1,170
--------
142,297
Food, Beverage and Tobacco-2.7%
Coca Cola Enterprises, Inc.
5.75% due 3/27/98......................................... 2,048 2,020
Joseph E. Seagrams & Sons, Inc.
6.00% due 2/27/98......................................... 4,237 4,197
--------
Foreign-10.1% 6,217
National Australia Funding Corp.
5.55% due 1/09/98......................................... 5,000 4,994
National Bank of Canada
5.64% due 2/05/98......................................... 10,000 9,945
</TABLE>
58
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
MONEY MARKET PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
COMMERCIAL PAPER-Continued
Foreign-Continued
Svenska Handelbanken, Inc.
5.74% due 2/17/98........................................... $ 1,475 $ 1,464
Westpac Banking Corp.
5.97% due 3/24/98........................................... 5,000 5,231
Westpac Capital Corp.
5.58% due 1/12/98........................................... 1,450 1,447
--------
23,081
Retail-5.0%
Sears, Roebuck Acceptance Corp.
5.63% due 2/09/98........................................... 5,000 4,969
5.62% due 2/23/98........................................... 4,000 3,967
5.60% due 2/25/98........................................... 2,500 2,479
--------
11,415
Utilities - Electric - 0.7%
National Rural Utilities
5.73% due 1/20/98........................................... 1,600 1,595
Utilities - Telecommunications-0.9%
SBC Communications, Inc.
6.60% due 1/02/98........................................... 2,127 2,127
--------
TOTAL COMMERCIAL PAPER- 94.1% 215,858
-------- --------
TOTAL INVESTMENTS- 99.5% 228,185
Cash and receivables, less payable- 0.5% 1,258
-------- --------
NET ASSETS- 100.0% $229,443
======== ========
</TABLE>
See notes to financial statements.
59
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
MID CAP VALUE PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Automotive and Rubber-3.8%
Chrysler Corp. ................................................. 27,100 $ 954
Goodyear Tire & Rubber Co. ..................................... 10,600 674
Lear Corp.*..................................................... 18,100 860
------
2,488
Building Products-0.4%
USG Corp.*...................................................... 5,800 284
Business Services-0.7%
ACNielson Corp.*................................................ 17,800 434
Chemicals-4.9%
Cabot Corp. .................................................... 42,200 1,166
Morton International, Inc. ..................................... 15,800 543
Praxair, Inc. .................................................. 33,300 1,498
------
3,207
Computer Software and Services-0.0%
Siebel Systems, Inc.*........................................... 36 2
Computers and Office Equipment-3.3%
3Com Corp.*..................................................... 13,700 479
Komag, Inc.*.................................................... 22,900 341
Lexmark International Group, Inc.*.............................. 25,600 973
Western Digital Corp.*.......................................... 20,000 321
------
2,114
Diversified Operations-4.4%
Corning, Inc. .................................................. 22,100 820
Raychem Corp. .................................................. 22,000 947
Varian Associates, Inc. ........................................ 22,000 1,112
------
2,879
Electronic and Processing Equipment-0.8%
Xilinx, Inc.*................................................... 15,000 526
Electronic Products-5.0%
KLA Instruments Corp.* ......................................... 22,500 869
National Semiconductor Corp.*................................... 25,000 648
Sunstrand Corp. ................................................ 20,000 1,008
Texas Instruments, Inc. ........................................ 16,000 720
------
3,245
Engineering-1.6%
Cummins Engine Company, Inc. ................................... 17,800 1,051
Financial Services-0.8%
Capital One Financial Corp. .................................... 9,200 499
Food, Beverage and Tobacco-3.6%
Anheuser-Busch Cos., Inc. ...................................... 24,000 1,056
UST, Inc. ...................................................... 34,900 1,289
------
2,345
Health Products and Services-8.4%
Alza Corp.*..................................................... 30,700 977
Amgen, Inc.*.................................................... 16,200 877
Biogen, Inc.*................................................... 32,700 1,189
Columbia/HCA Healthcare Corp. .................................. 38,700 1,146
Crescendo Pharmaceuticals Cp*................................... 1,535 18
Partnerre, Ltd. ................................................ 26,400 1,224
------
5,431
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Insurance-5.8%
Allstate Corp. ................................................ 11,000 $ 1,000
EXEL, Ltd. .................................................... 13,300 843
Orion Capital Corp. ........................................... 30,000 1,393
Progressive Corp. ............................................. 4,300 515
-------
3,751
Lodging and Restaurants-4.7%
Host Marriott Corp.*........................................... 60,000 1,178
La Quinta Inns, Inc. .......................................... 42,500 821
Mirage Resorts, Inc. .......................................... 45,400 1,033
-------
3,032
Media-6.9%
Comcast Corp. - Cl. A.......................................... 35,027 1,106
E.W. Scripps Co. - Cl. A....................................... 25,700 1,245
Knight-Ridder, Inc. ........................................... 17,100 889
Valassis Communications, Inc.*................................. 17,500 648
Young Broadcasting Corp.*...................................... 14,900 577
-------
4,465
Metals and Mining-2.4%
AK Steel Holding Corp. ........................................ 40,800 722
Nucor Corp. ................................................... 16,700 807
-------
1,529
Miscellaneous-5.6%
Crown Cork & Seal Co., Inc. ................................... 28,500 1,429
Millipore Corp. ............................................... 21,300 723
Owens-Illinois, Inc.*.......................................... 39,600 1,501
-------
3,653
Oils and Natural Gas Exploration and Production-7.9%
Gulf Canada Resources, Ltd.* .................................. 65,500 459
Noble Affiliates, Inc. ........................................ 31,900 1,124
Oryx Energy Co.* .............................................. 43,500 1,109
Sonat, Inc. ................................................... 17,900 819
Tosco Corp. ................................................... 16,400 620
Union Pacific Resources Group, Inc. ........................... 42,193 1,023
-------
5,154
Paper and Forest Products-4.8%
Mead Corp. .................................................... 23,200 650
Temple-Inland, Inc. ........................................... 13,900 727
Union Camp Corp. .............................................. 18,800 1,009
Weyerhaeuser Co. .............................................. 15,200 746
-------
3,132
Printing-1.3%
R.R. Donnelley & Sons Co. ..................................... 23,400 872
Real Estate Development-1.4%
Catellus Development Corp.*.................................... 45,000 900
Retail-5.1%
AutoZone, Inc.*................................................ 30,000 870
Costco Cos., Inc.* ............................................ 23,700 1,058
Footstar, Inc.*................................................ 1 0
Harcourt General, Inc. ........................................ 25,000 1,369
-------
3,297
</TABLE>
60
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
MID CAP VALUE PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Textiles-1.3%
Gucci Group NV................................................ 19,700 $ 825
Transportation-4.0%
Continental Airlines, Inc.*................................... 14,200 683
Delta Air Lines, Inc. ........................................ 8,200 976
Southwest Airlines Co. ....................................... 38,700 952
-------
2,611
-------
TOTAL COMMON STOCK- 88.9% 57,726
<CAPTION>
Par
Value
(000's)
<S> <C> <C>
SHORT-TERM INVESTMENTS-10.5%
Investment in joint trading account (Note B)
6.243% due 1/01/98............................................ 6,842 6,843
-------
TOTAL SHORT-TERM INVESTMENTS- 6,843
------ -------
TOTAL INVESTMENTS- 99.4% 64,569
Cash and receivables, less payables- 0.6% 404
------ -------
NET ASSETS- 100.0% $64,973
====== =======
</TABLE>
* Non-income producing security.
ADR-American Depository Receipt
See notes to financial statement.
61
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SPECIAL OPPORTUNITIES PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Capital Equipment-1.7%
Automotive and Rubber-1.7%
Halter Marine Group, Inc.*................................... 42,000 $ 1,213
Tower Automotive, Inc.*...................................... 56,000 2,356
--------
3,569
Consumer Staple-12.7%
Food, Beverage and Tobacco-12.7%
CIT Group, Inc. - A*......................................... 33,400 1,077
ConAgra, Inc. ............................................... 151,000 4,955
Dole Food Company............................................ 127,000 5,810
International Home Foods, Inc.*.............................. 65,500 1,834
Quaker Oats Co. ............................................. 123,000 6,489
Suiza Foods Corporation*..................................... 116,065 6,914
--------
27,079
Diversified and Miscellaneous-8.4%
Diversified Operations-2.4%
Kansas City Southern Industries, Inc. ....................... 163,500 5,191
Miscellaneous-6.0%
Loewen Group, Inc. .......................................... 110,000 2,839
Owens-Illinois, Inc.*........................................ 70,000 2,656
Philip Services Corp.*....................................... 124,900 1,795
Questar Corporation.......................................... 26,000 1,160
Samsonite Corp.*............................................. 77,000 2,435
Sealed Air Corp.* ........................................... 33,000 2,038
--------
12,923
Energy-6.9%
Oils and Natural Gas Equipment and Services-5.9%
BJ Services Co.*............................................. 18,000 1,295
Cooper Cameron Corp.*........................................ 26,000 1,586
EVI, Inc.*................................................... 31,600 1,635
Falcon Drilling Co., Inc.*................................... 41,000 1,438
Global Industries, Ltd.*..................................... 80,000 1,360
Grey Wolf, Inc. ............................................. 203,200 1,092
Mitchell Energy & Development Corp. ......................... 73,000 2,144
Newpark Resources, Inc.* .................................... 116,000 2,030
--------
12,580
Oils and Natural Gas Exploration and Production-1.0%
Columbia Gas System, Inc. ................................... 15,000 1,178
El Paso Natural Gas Co. ..................................... 6,200 412
KN Energy, Inc. ............................................. 11,300 610
--------
2,200
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Financial-21.7%
Banks and Finance-10.3%
Allied Irish Banks PLC ADR................................... 13,000 $ 754
Banc One Corp. .............................................. 60,000 3,259
Charter One Financial, Inc. ................................. 57,015 3,599
Comerica, Inc. .............................................. 23,000 2,076
Silicon Valley Bancshares*................................... 42,000 2,363
TCF Financial Corp. ......................................... 132,500 4,497
U.S. Bancorp................................................. 49,000 5,485
--------
22,033
Foreign-0.5%
Elan Corp. plc - ADR*........................................ 23,000 1,177
Insurance-8.3%
Allmerica Financial Corp. ................................... 107,000 5,343
CMAC Investment Corp. ....................................... 96,500 5,826
Executive Risk, Inc. ........................................ 36,000 2,513
General Re Corp. ............................................ 8,000 1,696
Life Re Corp. ............................................... 35,000 2,282
--------
17,660
Investment Companies-2.6%
T. Rowe Price Associates, Inc. .............................. 87,600 5,508
Health Care-3.9%
Health Products and Services-3.9%
AmeriSource Health Corp. - Cl. A*............................ 41,000 2,388
CVS Corp. ................................................... 92,000 5,894
--------
8,282
Media-7.2%
CBS Corporation.............................................. 219,000 6,448
Clear Channel Communications, Inc.*.......................... 62,000 4,925
Gannett Co., Inc. ........................................... 66,000 4,080
--------
15,453
Publications-2.3%
Central Newspapers, Inc. .................................... 66,000 4,880
Retail-13.4%
Costco Cos., Inc.*........................................... 67,000 2,990
Ethan Allen Interiors, Inc. ................................. 67,200 2,591
Fred Meyer, Inc. ............................................ 136,000 4,947
Kroger Co.*.................................................. 124,000 4,580
Lowe's Cos., Inc. ........................................... 92,000 4,387
Rite Aid Corp. .............................................. 89,000 5,223
Safeway, Inc.*............................................... 57,000 3,605
--------
28,323
Telecommunications-4.6%
Tel-Save Holdings, Inc.* .................................... 179,000 3,558
Teleport Communications
Group Inc. - A*............................................. 113,000 6,202
--------
9,760
</TABLE>
62
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SPECIAL OPPORTUNITIES PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Technology-6.7%
Computer Software and Services-2.8%
Compuware Corp.*............................................ 96,500 $ 3,088
Keane, Inc.*................................................ 72,500 2,945
--------
6,033
Computers and Office Equipment-3.2%
EMC Corp.*.................................................. 210,000 5,762
Network Appliance, Inc.*.................................... 28,000 994
--------
6,756
Telecommunications-0.7%
Nextlinx Communications, Inc.*.............................. 73,100 1,555
Transportation-1.2%
Transportation-1.2%
CH Robinson Worldwide....................................... 18,400 412
CNF Transportation, Inc. ................................... 64,400 2,471
--------
2,883
--------
TOTAL COMMON STOCK- 90.7% 193,845
<CAPTION>
Par
Value
(000's)
<S> <C> <C>
JOINT REPURCHASE AGREEMENT-7.1%
Investment in joint repurchase agreement with Swiss Bank
Corp. dated 12/31/97
6.60% due 1/02/98(a)........................................ $15,120 15,120
------- --------
TOTAL INVESTMENTS- 97.8% 208,965
Cash and receivables, less payables- 2.2% 4,647
------- --------
NET ASSETS- 100.0% $213,612
======= ========
</TABLE>
(a) The repurchase agreement, dated 12/31/97, is fully collateralized by U.S.
government obligations. The investment in repurchase agreement is through
participation in a joint account with other portfolios advised by John
Hancock.
* Non-income producing security.
See notes to financial statements.
63
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
REAL ESTATE EQUITY PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Lodging and Restaurants-3.0%
Host Marriott Corp.*.......................................... 310,000 $ 6,084
Real Estate Development-5.2%
Catellus Development Corp.*................................... 293,000 5,860
Highwoods Properties, Inc. ................................... 125,000 4,648
--------
10,508
Real Estate Investment Trust-89.3%
AMLI Residential Properties Trust............................. 55,000 1,224
Avalon Properties, Inc. ...................................... 150,000 4,641
Bay Apartment Communities, Inc. .............................. 74,000 2,886
Bradley Real Estate, Inc. .................................... 150,000 3,150
Brandywine Realty Trust....................................... 200,000 5,025
BRE Properties, Inc. ......................................... 209,000 5,878
Burnham Pacific Properties, Inc. ............................. 185,000 2,833
Camden Property Trust......................................... 100,000 3,100
CarrAmerica Realty Corp. ..................................... 150,000 4,753
Centerpoint Properties Corp. ................................. 70,000 2,459
Chateau Communities, Inc. .................................... 158,180 4,983
Crescent Real Estate Equities, Inc. .......................... 165,000 6,496
Developers Diversified Realty Corp. .......................... 110,000 4,208
Duke Realty Investments, Inc. ................................ 235,000 5,699
Equity Office Properties Trust................................ 154,693 4,882
Equity Residential Properties Trust........................... 175,000 8,847
Glimcher Realty Trust......................................... 195,100 4,402
JDN Realty Corp. ............................................. 130,000 4,209
JP Realty, Inc. .............................................. 150,000 3,891
Kilroy Realty Corp. .......................................... 165,000 4,744
Kimco Realty Corp. ........................................... 100,000 3,525
Liberty Property Trust........................................ 200,000 5,713
Mack-Cali Realty Corporation.................................. 105,000 4,305
Meditrust Companies........................................... 60,000 2,198
MGI Properties, Inc. ......................................... 165,000 3,960
Oasis Residential, Inc. ...................................... 100,000 2,231
Pacific Gulf Properties, Inc. ................................ 185,000 4,394
Patriot American Hospitality, Inc. ........................... 246,004 7,087
Post Properties, Inc. ........................................ 110,000 4,469
Prentiss Properties Trust..................................... 144,900 4,048
Regency Realty Corp. ......................................... 67,500 1,869
RFS Hotel Investors, Inc. .................................... 75,000 1,495
Security Capital Industrial Trust............................. 173,059 4,305
Security Capital Pacific Trust................................ 28,632 694
Simon DeBartolo Group, Inc. .................................. 165,000 5,393
Sovran Self Storage, Inc. .................................... 100,000 3,244
Spieker Properties, Inc. ..................................... 60,000 2,573
Starwood Lodging Trust........................................ 140,000 8,102
Storage USA, Inc. ............................................ 125,000 4,992
Sun Communities, Inc. ........................................ 80,000 2,875
Sunstone Hotel Investors, Inc. ............................... 140,000 2,415
United Dominion Realty Trust, Inc. ........................... 408,326 5,691
Vornado Realty Trust.......................................... 74,100 3,478
Weeks Corp. .................................................. 115,000 3,680
Winston Hotels, Inc. ......................................... 100,000 1,313
--------
182,359
--------
TOTAL COMMON STOCK- 97.5% 198,951
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
SHORT-TERM INVESTMENTS-2.1%
Investment in joint trading account (Note B)
6.243% due 1/01/98........................................... $4,387 $ 4,387
WARRANTS-0.1%
Security Capital Group
expires 9/18/98.............................................. 20 106
------ --------
TOTAL INVESTMENTS- 99.7% 203,444
Cash and receivables, less payables- 0.3% 687
------ --------
NET ASSETS- 100.0% $204,131
====== ========
</TABLE>
* Non-income producing security.
See notes to financial statements.
64
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
GROWTH & INCOME PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Aerospace-2.7%
Northrop Grumman Corp. ..................................... 214,700 $ 24,691
Raytheon Co. ............................................... 28,001 1,381
United Technologies Corp. .................................. 687,100 50,029
--------
76,101
Automotive and Rubber-3.6%
Borg-Warner Automotive, Inc. ............................... 71,900 3,739
Dana Corp. ................................................. 440,800 20,938
Ford Motor Co. ............................................. 920,300 44,807
General Motors Corp. ....................................... 439,100 26,620
Lear Corp.*................................................. 76,400 3,629
Meritor Automotive, Inc. ................................... 29,800 628
--------
100,361
Banks and Finance-8.0%
Bank of New York Co., Inc. ................................. 241,700 13,973
BankAmerica Corp. .......................................... 768,200 56,079
Bankers Trust New York Corp. ............................... 101,000 11,356
Citicorp.................................................... 482,900 61,058
Comerica, Inc. ............................................. 262,400 23,682
First Union Corp. .......................................... 126,700 6,493
MBNA Corp. ................................................. 482,400 13,176
Norwest Corp. .............................................. 970,000 37,466
--------
223,283
Building Products-0.4%
Masco Corp. ................................................ 230,300 11,717
Business Services-2.6%
Cendant Corporation*........................................ 2,126,228 73,090
Chemicals-2.7%
Air Products & Chemicals, Inc. ............................. 386,000 31,749
E.I. du Pont de Nemours & Co. .............................. 520,000 31,233
Praxair, Inc. .............................................. 192,400 8,658
Rohm & Haas Co. ............................................ 33,800 3,236
--------
74,876
Computer Software and Services-4.6%
Autodesk, Inc. ............................................. 156,200 5,779
Cadence Design Systems, Inc.*............................... 224,200 5,493
Computer Associates International, Inc. .................... 501,150 26,498
Microsoft Corp. ............................................ 523,400 67,650
Oracle Corp.*............................................... 435,000 9,706
Parametric Technology Co.*.................................. 267,200 12,659
--------
127,785
Computers and Office Equipment-5.5%
Compaq Computer Corp.*...................................... 361,000 20,374
Harris Corp. ............................................... 163,300 7,491
Hewlett-Packard Co. ........................................ 278,000 17,375
IBM Corp. .................................................. 306,800 32,080
Komag, Inc.*................................................ 135,100 2,010
Pitney Bowes, Inc. ......................................... 244,300 21,972
Xerox Corp. ................................................ 695,200 51,314
--------
152,616
Diversified Operations-6.0%
B.F. Goodrich Co. .......................................... 44,600 1,848
Corning, Inc. .............................................. 429,700 15,953
General Electric Co. ....................................... 1,364,400 100,114
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Diversified Operations-Continued
Ogden Corp. ................................................ 122,568 $ 3,455
Raychem Corp. .............................................. 191,400 8,242
Textron, Inc. .............................................. 589,600 36,850
--------
166,462
Electronic Products-2.0%
Honeywell, Inc. ............................................ 478,000 32,743
Intel Corp. ................................................ 325,500 22,866
--------
55,609
Financial Services-2.2%
American Express Co. ....................................... 222,000 19,814
Household International, Inc. .............................. 85,000 10,843
Morgan Stanley, Dean Witter,
Discover & Co. ............................................ 537,400 31,774
--------
62,431
Food, Beverage and Tobacco-6.0%
ConAgra, Inc. .............................................. 530,800 17,417
PepsiCo, Inc. .............................................. 2,106,400 76,753
Philip Morris Cos., Inc. ................................... 897,100 40,650
Quaker Oats Co. ............................................ 445,800 23,516
Universal Foods Corp. ...................................... 233,900 9,882
--------
168,218
Government Agencies-1.0%
Federal National Mortgage Assoc. ........................... 481,300 27,464
Health Products and Services-11.7%
Abbott Laboratories......................................... 529,000 34,683
Allegiance Corp. ........................................... 232,000 8,221
Becton, Dickinson & Co. .................................... 169,900 8,495
Bristol-Myers Squibb Co. ................................... 387,200 36,639
Cardinal Health, Inc. ...................................... 380,200 28,562
Glaxo Wellcome plc - ADR.................................... 258,100 12,356
Guidant Corp. .............................................. 110,400 6,872
HEALTHSOUTH Corp.*.......................................... 785,500 21,798
Hillenbrand Industries, Inc. ............................... 134,900 6,905
Johnson & Johnson........................................... 802,600 52,871
Merck & Co., Inc. .......................................... 770,200 81,834
Schering-Plough Corp. ...................................... 319,000 19,818
Warner-Lambert Co. ......................................... 52,300 6,485
--------
325,539
Household and Personal-2.0%
Procter & Gamble Co. ....................................... 710,000 56,667
Insurance-6.9%
American International Group, Inc. ......................... 273,750 29,770
Cigna Corp. ................................................ 28,400 4,915
General Re Corp. ........................................... 277,500 58,830
Hartford Financial Services Group, Inc. .................... 308,400 28,855
Marsh & McLennan Cos., Inc. ................................ 433,800 32,345
Travelers Group, Inc. ...................................... 713,150 38,421
--------
193,136
Machinery and Equipment-2.1%
Allied Signal, Inc. ........................................ 302,100 11,763
Caterpillar, Inc. .......................................... 59,400 2,885
Cooper Industries, Inc. .................................... 348,700 17,086
Dover Corp. ................................................ 105,200 3,800
</TABLE>
65
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
GROWTH & INCOME PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Machinery and Equipment-Continued
Ingersoll-Rand Co. ........................................ 256,650 $ 10,394
Perkin-Elmer Corp. ........................................ 175,000 12,436
---------
58,364
Metals and Mining-0.5%
British Steel plc - ADR.................................... 360,400 7,726
Precision Castparts Corp. ................................. 88,100 5,314
---------
13,040
Miscellaneous-0.5%
Avery Dennison Corp. ...................................... 336,200 15,045
Oils and Natural Gas Equipment and Services-1.6%
Baker Hughes, Inc. ........................................ 401,500 17,515
Rowan Cos., Inc.*.......................................... 182,400 5,563
Schlumberger, Ltd. ........................................ 266,500 21,453
---------
44,531
Oils and Natural Gas Exploration and Production-8.0%
Anadarko Petroleum Corp. .................................. 151,000 9,164
Ashland, Inc. ............................................. 90,000 4,832
Atlantic Richfield Co. .................................... 176,700 14,158
British Petroleum Co. plc - ADR............................ 185,400 14,774
Chevron Corp. ............................................. 465,900 35,874
Consolidated Natural Gas Co. .............................. 297,100 17,974
El Paso Natural Gas Co. ................................... 85,000 5,652
Exxon Corp. ............................................... 281,600 17,230
Imperial Oil, Ltd. ........................................ 172,100 11,004
Phillips Petroleum Co. .................................... 834,400 40,573
Texaco, Inc. .............................................. 537,200 29,210
USX-Marathon Group......................................... 623,100 21,030
---------
221,475
Paper and Forest Products-0.5%
International Paper Co. ................................... 331,700 14,304
Pollution Control Equipment and
Services-0.2%
Wheelabrator Technologies, Inc. ........................... 305,000 4,892
Retail-5.5%
Costco Cos., Inc.*......................................... 162,800 7,265
Dayton-Hudson Corp. ....................................... 147,800 9,977
Home Depot, Inc. .......................................... 1,121,250 66,015
Liz Claiborne, Inc. ....................................... 192,000 8,028
Lowe's Cos., Inc. ......................................... 431,200 20,563
Staples, Inc.*............................................. 458,200 12,715
TJX Cos., Inc. ............................................ 382,800 13,159
Wal-Mart Stores, Inc. ..................................... 186,000 7,335
Warnaco Group, Inc. - Cl. A................................ 271,600 8,521
---------
153,578
Soap, Cosmetics and Personal Care-0.7%
Dial Corporation........................................... 764,400 15,909
Revlon, Inc.*.............................................. 142,200 5,021
---------
20,930
Telecommunications-1.5%
Lucent Technologies, Inc. ................................. 509,984 40,735
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Textiles-0.3%
Tommy Hilfiger Corp.*...................................... 220,000 $ 7,728
Transportation-1.8%
Burlington Northern Santa Fe............................... 195,500 18,169
Norfolk Southern Corp. .................................... 352,200 10,852
Southwest Airlines Co. .................................... 889,200 21,897
----------
50,918
Utilities - Electric-2.4%
Dominion Resources, Inc. .................................. 343,800 14,633
DQE, Inc. ................................................. 165,200 5,803
Entergy Corp. ............................................. 425,000 12,723
FPL Group, Inc. ........................................... 241,700 14,306
Houston Industries, Inc. .................................. 489,500 13,064
Texas Utilities Co. ....................................... 129,100 5,366
----------
65,895
Utilities - Telecommunications-3.0%
Bell Atlantic Corp. ....................................... 678,800 61,772
BellSouth Corp. ........................................... 382,100 21,517
----------
83,289
----------
TOTAL COMMON STOCK- 96.5% 2,690,079
<CAPTION>
Par
Value
(000's)
<S> <C> <C>
SHORT-TERM INVESTMENTS-3.3%
Investment in joint trading account (Note B)
6.243% due 1/01/98........................................ 91,446 91,446
------- ----------
TOTAL INVESTMENTS- 99.8% 2,781,525
Cash and receivables, less payables- 0.2% 4,439
------- ----------
NET ASSETS- 100.0% $2,785,964
======= ==========
</TABLE>
* Non-income producing security.
ADR-American Depository Receipt
See notes to financial statements.
66
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
MANAGED PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Aerospace-1.8%
Lockheed Martin Corp. ..................................... 34,000 $ 3,349
Northrop Grumman Corp. .................................... 121,600 13,984
Raytheon Co. .............................................. 16,229 800
United Technologies Corp. ................................. 443,900 32,321
----------
50,454
Automotive and Rubber-1.8%
Borg-Warner Automotive, Inc. .............................. 17,400 905
Dana Corp. ................................................ 109,300 5,192
Ford Motor Co. ............................................ 592,100 28,828
General Motors Corp. ...................................... 254,500 15,429
----------
50,354
Banks and Finance-4.2%
Bank of New York Co., Inc. ................................ 76,300 4,411
BankAmerica Corp. ......................................... 371,900 27,149
Bankers Trust New York Corp. .............................. 104,200 11,716
Citicorp................................................... 265,100 33,519
Comerica, Inc. ............................................ 228,600 20,631
First Union Corp. ......................................... 111,300 5,704
MBNA Corp. ................................................ 271,400 7,413
Norwest Corp. ............................................. 202,000 7,802
----------
118,345
Building Products-0.2%
Masco Corp. ............................................... 84,500 4,299
Chemicals-1.7%
Air Products & Chemicals, Inc. ............................ 117,900 9,697
E.I. du Pont de Nemours & Co. ............................. 301,300 18,097
Imperial Chemical Industries plc - ADR..................... 55,000 3,572
Millenium Chemicals, Inc. ................................. 110,000 2,592
Morton International, Inc. ................................ 159,100 5,469
Praxair, Inc. ............................................. 178,100 8,015
----------
47,442
Computer Software and Services-2.1%
Cadence Design Systems, Inc.*.............................. 63,000 1,544
Computer Associates International, Inc. ................... 227,550 12,032
Microsoft Corp. ........................................... 252,100 32,584
Oracle Corp.*.............................................. 127,650 2,848
Parametric Technology Co.* ................................ 46,600 2,208
Peoplesoft, Inc. .......................................... 150,000 5,850
Policy Management Systems Corp.*........................... 19,500 1,356
----------
58,422
Computers and Office Equipment-3.6%
Compaq Computer Corp.* .................................... 155,450 8,773
Hewlett-Packard Co. ....................................... 306,800 19,175
IBM Corp. ................................................. 121,900 12,746
Komag, Inc.* .............................................. 67,200 1,000
Linear Technology Corporation.............................. 94,500 5,446
Pitney Bowes, Inc. ........................................ 183,500 16,504
Stratus Computer, Inc.* ................................... 36,100 1,365
Xerox Corp. ............................................... 491,200 36,257
----------
101,266
Diversified Operations-3.9%
Canadian Pacific, Ltd. .................................... 177,900 4,848
Cendant Corporation*....................................... 612,165 21,043
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Diversified Operations-Continued
Corning, Inc. ............................................. 302,600 $ 11,234
General Electric Co. ...................................... 693,000 50,848
Illinois Tool Works, Inc. ................................. 34,000 2,044
National Service Industries, Inc. ......................... 84,100 4,168
Raychem Corp. ............................................. 153,000 6,589
Textron, Inc. ............................................. 117,000 7,313
----------
108,087
Electronic Products-1.2%
Analog Devices, Inc.*...................................... 1 0
Honeywell, Inc. ........................................... 210,600 14,426
Intel Corp. ............................................... 160,000 11,240
Texas Instruments, Inc. ................................... 125,000 5,625
Thomas & Betts Corp. ...................................... 42,400 2,003
----------
33,294
Financial Services-1.4%
American Express Co. ...................................... 122,300 10,915
Household International, Inc. ............................. 107,500 13,713
Morgan Stanley, Dean Witter,
Discover & Co. ........................................... 242,100 14,314
----------
38,942
Food, Beverage and Tobacco-3.1%
ConAgra, Inc. ............................................. 236,800 7,770
PepsiCo, Inc. ............................................. 878,100 31,996
Philip Morris Cos., Inc. .................................. 413,800 18,750
Quaker Oats Co. ........................................... 343,500 18,120
Universal Foods Corp. ..................................... 221,200 9,346
----------
85,982
Government Agencies-0.6%
Federal National Mortgage Assoc. .......................... 294,800 16,822
Health Products and Services-7.1%
Abbott Laboratories........................................ 506,100 33,181
Allegiance Corp. .......................................... 50,000 1,772
Alza Corp.* ............................................... 79,800 2,539
Becton, Dickinson & Co. ................................... 185,400 9,270
Boston Scientific Corp.*................................... 72,000 3,303
Bristol-Myers Squibb Co. .................................. 350,000 33,119
Cardinal Health, Inc. ..................................... 134,900 10,134
Glaxo Wellcome plc - ADR................................... 35,000 1,676
Health Management Associates,
Inc. - Cl. A*............................................. 165,000 4,166
HEALTHSOUTH Corp.*......................................... 447,400 12,415
Hillenbrand Industries, Inc. .............................. 70,900 3,629
Johnson & Johnson.......................................... 413,000 27,206
Merck & Co., Inc. ......................................... 334,800 35,573
Schering-Plough Corp. ..................................... 180,600 11,220
United Healthcare Corp. ................................... 52,000 2,584
Warner-Lambert Co. ........................................ 45,100 5,592
----------
197,379
Household and Personal-0.2%
Procter & Gamble Co. ...................................... 84,400 6,736
Insurance-4.4%
Allstate Corp. ............................................ 48,300 4,389
American International Group, Inc. ........................ 168,150 18,286
</TABLE>
67
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
MANAGED PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Insurance-Continued
General Re Corp. ........................................... 199,600 $ 42,315
Hartford Financial Services Group, Inc. .................... 145,400 13,604
Marsh & McLennan Cos., Inc. ................................ 237,300 17,694
Travelers Group, Inc. ...................................... 520,100 28,020
----------
124,308
Lodging and Restaurants-0.1%
Promus Hotel Corporation* .................................. 31,543 1,325
Tricon Global Restaurants, Inc.*............................ 83,160 2,417
----------
3,742
Machinery and Equipment-1.2%
Allied Signal, Inc. ........................................ 146,800 5,716
Caterpillar, Inc. .......................................... 45,500 2,210
Cooper Industries, Inc. .................................... 71,500 3,504
Deere & Co. ................................................ 70,700 4,123
Flowserve Corp. ............................................ 58,400 1,632
Ingersoll-Rand Co. ......................................... 151,600 6,140
Parker-Hannifin Corp. ...................................... 55,500 2,546
Perkin-Elmer Corp. ......................................... 110,000 7,817
----------
33,688
Metals and Mining-0.2%
Aluminum Co. of America..................................... 37,000 2,604
Precision Castparts Corp. .................................. 35,300 2,129
----------
4,733
Miscellaneous-0.9%
Avery Dennison Corp. ....................................... 290,000 12,978
Owens-Illinois, Inc.*....................................... 38,300 1,453
Service Corp. International................................. 312,800 11,554
Unisource Worldwide, Inc. .................................. 36,100 514
----------
26,499
Oils and Natural Gas Equipment and
Services-0.9%
Baker Hughes, Inc. ......................................... 235,500 10,274
Halliburton Co. ............................................ 60,600 3,147
Schlumberger, Ltd. ......................................... 157,400 12,671
----------
26,092
Oils and Natural Gas Exploration and
Production-4.8%
Anadarko Petroleum Corp. ................................... 29,000 1,760
Ashland, Inc. .............................................. 108,300 5,814
Atlantic Richfield Co. ..................................... 145,100 11,626
British Petroleum Co. plc - ADR............................. 138,200 11,013
Chevron Corp. .............................................. 298,400 22,977
Consolidated Natural Gas Co. ............................... 171,600 10,382
El Paso Natural Gas Co. .................................... 30,700 2,042
Imperial Oil, Ltd. ......................................... 157,900 10,096
Mobil Corp. ................................................ 156,000 11,261
Phillips Petroleum Co. ..................................... 504,600 24,536
Texaco, Inc. ............................................... 291,000 15,823
USX-Marathon Group.......................................... 250,300 8,448
----------
135,778
Paper and Forest Products-0.8%
Champion International Corp. ............................... 50,000 2,266
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Paper and Forest Products-Continued
Fort James Corp. ........................................... 87,000 $ 3,328
International Paper Co. .................................... 363,300 15,667
----------
21,261
Pollution Control Equipment and
Services-0.1%
Browning-Ferris Industries, Inc. ........................... 75,900 2,808
Real Estate Development-0.0%
Clayton Homes, Inc. ........................................ 63,000 1,134
Retail-2.9%
Costco Cos., Inc.*.......................................... 92,600 4,132
Dayton-Hudson Corp. ........................................ 86,700 5,852
Home Depot, Inc. ........................................... 545,500 32,116
Liz Claiborne, Inc. ........................................ 149,500 6,251
Lowe's Cos., Inc. .......................................... 257,700 12,289
Staples, Inc.*.............................................. 32,525 903
TJX Cos., Inc. ............................................. 188,700 6,487
Wal-Mart Stores, Inc. ...................................... 300,100 11,835
Warnaco Group, Inc. - Cl. A................................. 18,700 587
------- ----------
80,452
Soap, Cosmetics and Personal Care-0.4%
Dial Corporation............................................ 340,100 7,078
Revlon, Inc.*............................................... 81,800 2,889
----------
9,967
Telecommunications-1.1%
Lucent Technologies, Inc. .................................. 372,737 29,772
Textiles-0.5%
Jones Apparel Group, Inc.* ................................. 145,900 6,274
Tommy Hilfiger Corp.* ...................................... 109,300 3,839
Unifi Inc. ................................................. 72,000 2,930
----------
13,043
Transportation-0.9%
Burlington Northern Santa Fe................................ 138,500 12,872
Delta Air Lines, Inc. ...................................... 15,600 1,856
Norfolk Southern Corp. ..................................... 92,400 2,847
Southwest Airlines Co. ..................................... 343,600 8,461
----------
26,036
Utilities - Electric-1.8%
Dominion Resources, Inc. ................................... 252,000 10,726
DQE, Inc. .................................................. 113,300 3,980
Entergy Corp. .............................................. 217,900 6,523
Florida Progress Corp. ..................................... 133,600 5,244
FPL Group, Inc. ............................................ 230,900 13,666
Houston Industries, Inc. ................................... 109,300 2,917
Montana Power Co. .......................................... 92,000 2,927
Texas Utilities Co. ........................................ 113,800 4,730
----------
50,713
Utilities - Telecommunications-3.6%
Ameritech Corp. ............................................ 78,000 6,279
AT & T Corp. ............................................... 182,000 11,148
Bell Atlantic Corp. ........................................ 398,100 36,227
BellSouth Corp. ............................................ 311,800 17,558
</TABLE>
68
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
MANAGED PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Utilities - Telecommunications-Continued
GTE Corp. ............................................... 575,900 $ 30,091
----------
101,303
----------
TOTAL COMMON STOCK- 57.5% 1,609,153
<CAPTION>
Par
Value
(000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS
Banks and Finance-3.7%
Bankers Trust NY - Sub. Notes
8.25% due 5/01/05........................................ $ 12,759 13,936
Banponce Financial Corp. Mountain Bank Ent - Ser. C
6.58% due 11/25/03....................................... 11,040 11,117
BCH Cayman Islands, Ltd. - Unsec.
Sub. Notes
7.70% due 7/15/06........................................ 27,144 28,704
Midland Bank plc - Sub. Notes
7.625% due 6/15/06....................................... 12,890 13,827
Societe Generale NY - Sub. Notes
7.40% due 6/01/06........................................ 11,610 12,114
Wells Fargo Capital I - Bonds
7.96% due 12/15/26....................................... 22,580 23,827
----------
103,525
Computers and Office Equipment-0.7%
Avalon Properties, Inc.
6.875% due 12/15/07...................................... 7,110 7,125
IBM Corp. - Debs.
7.125% due 12/01/96...................................... 11,677 12,159
----------
19,284
Financial Services-9.0%
ADVANTA Corp. - Notes Ser. C
7.075% due 9/15/99....................................... 11,300 11,087
Amresco Commercial Mortgage
Funding I - Ser. 1997-C1 Cl. A3
7.19% due 6/17/29........................................ 18,980 19,604
Banponce Trust I - Cap. Secs.
8.327% due 2/01/27....................................... 17,780 19,396
Camden Property Trust - Med.
Term Notes
7.142% due 6/21/04....................................... 6,330 6,581
Capital One Financial Corp. - Sr. Notes
7.25% due 12/01/03....................................... 19,000 19,178
Carco Auto Loan Master Trust - Ser. 1997-1 Cl. A
6.689% due 8/15/04....................................... 14,210 14,356
Chase Commercial Mortgage Securities Corp. - Ser. 1997-1
Cl. A2
7.37% due 2/19/07........................................ 13,300 13,806
CS First Boston Mortgage Securities Corp. - Ser. 1997-C1
Cl. A1C
7.24% due 6/20/29........................................ 25,810 26,586
First Union Capital II - Bonds
7.85% due 1/01/27........................................ 20,320 21,405
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Financial Services-Continued
Fleet Capital Trust II - Unsec. Cap. Secs.
7.92% due 12/11/26........................................ $ 22,700 $ 24,014
Fletcher Challenge Industries,
Ltd. - Notes
9.00% due 9/15/99......................................... 1,270 1,335
Lehman Brothers, Inc. - Sr. Sub. Notes
7.25% due 4/15/03......................................... 26,770 27,637
Merrill Lynch Mortgage Investors,
Inc. - Ser. 1997-C1 Cl. A3
7.12% due 6/18/29......................................... 7,970 8,081
Mortgage Capital Funding, Inc. - Ser.
1996-MC2 Cl. A1
6.758% due 2/20/04........................................ 8,725 8,937
Phillips 66 Capital Trust II - Cap. Secs.
8.00% due 1/15/37......................................... 10,000 10,655
Susa Partnership LP - Notes
8.20% due 6/01/17......................................... 3,480 3,807
United Dominion Realty Trust, Inc. - Notes
7.25% due 1/15/07......................................... 16,330 16,964
----------
253,429
Food, Beverage and Tobacco-1.6%
Coca-Cola Enterprises, Inc. - Bonds
6.70% due 10/15/36........................................ 14,250 14,771
Philip Morris Cos., Inc. - Notes
8.25% due 10/15/03........................................ 27,180 29,460
----------
44,231
Foreign Governmental-0.5%
Province of Quebec - Notes
5.735% due 3/02/26........................................ 12,970 12,926
Government Agencies-1.0%
Government National Mortgage Assoc.
8.00% due 1/15/23-10/15/23................................ 459 478
Hydro-Quebec-Med. Term. Notes Ser. B
7.91% due 11/18/24........................................ 11,145 13,722
9.40% due 2/01/21......................................... 10,250 13,226
----------
27,426
Health Products and Services-0.8%
Tenet Healthcare Corp. - Sr. Notes
8.00% due 1/15/05......................................... 20,970 21,389
Lodging and Restaurants-1.6%
Hilton Hotels Corp. - Notes
7.00% due 7/15/04......................................... 25,280 25,535
Hilton Hotels Corp. - Sr. Notes
7.95% due 4/15/07......................................... 18,680 20,079
----------
45,614
Media-0.8%
Viacom, Inc. - Sr. Notes
7.75% due 6/01/05......................................... 22,500 22,954
Miscellaneous-1.1%
Millipore Corp. - Notes
7.50% due 4/01/07......................................... 9,380 9,973
</TABLE>
69
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
MANAGED PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Miscellaneous-Continued
Service Corp. International - Notes
7.70% due 4/15/09......................................... $ 18,770 $ 20,352
----------
30,325
Oils and Natural Gas Equipment and
Services-0.6%
Petroleum Geo-Services ASA - Notes
7.50% due 3/31/07......................................... 14,590 15,537
Real Estate Investment Trust-1.3%
Security Capital Industrial Trust - Debs.
7.625% due 7/01/17........................................ 4,680 4,907
Simon Debartolo
6.875% due 10/27/05....................................... 5,077 5,145
Simon DeBartolo Group LP - Notes
6.75% due 7/15/04......................................... 9,190 9,195
Spieker Properties, Inc.
7.50% due 10/01/27........................................ 11,000 11,135
Spieker Properties, Inc. - Med.
Term Notes
8.00% due 7/19/05......................................... 3,740 4,067
Spieker Properties, L.P. - Notes
7.125% due 12/01/06....................................... 3,370 3,470
----------
37,919
Retail-0.6%
Sears Roebuck Acceptance Corp. - Notes
6.72% due 11/05/03........................................ 15,325 15,583
Transportation-0.4%
Delta Air Lines - Debs.
9.75% due 5/15/21......................................... 8,205 10,661
Southwest Airlines Co. - Debs.
8.75% due 10/15/03........................................ 1,245 1,391
----------
12,052
U.S. Governmental-16.2%
U.S. Treasury - Notes
5.125% due 11/30/98....................................... 64,780 64,495
5.875% due 2/28/99........................................ 64,845 65,016
6.375% due 5/15/99........................................ 165,350 166,874
6.75% due 5/31/99......................................... 67,000 67,962
5.625% due 10/31/99....................................... 10,400 10,390
United States Treasury Bonds
6.375% due 8/15/27........................................ 74,010 78,057
----------
452,794
Utilities - Electric-0.7%
Enersis SA
6.90% due 12/01/06........................................ 19,490 19,983
Utilities - Telecommunications-0.8%
GTE Southwest, Inc. - 1st Mtge. Bonds
8.50% due 11/15/31........................................ 1,950 2,402
WorldCom, Inc. - Notes
7.75% due 4/01/07......................................... 19,560 20,953
----------
23,355
----------
TOTAL PUBLICLY-TRADED BONDS- 41.4% 1,158,326
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
SHORT-TERM INVESTMENTS-0.4%
Investment in joint trading account (Note B)
6.243% due 1/01/98........................................ $ 12,984 $ 12,986
-------- ----------
TOTAL INVESTMENTS- 99.3% 2,780,465
Cash and receivables, less payables- 0.7% 19,662
-------- ----------
NET ASSETS- 100.0% $2,800,127
======== ==========
</TABLE>
* Non-income producing security.
ADR-American Depository Receipt
See notes to financial statements.
70
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SHORT-TERM U.S. GOVERNMENT PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS
Government Agencies-66.7%
Federal Farm Credit Bank - Bonds
8.65% due 10/01/99............................................ $1,020 $ 1,067
Federal Farm Credit Bank - Med.
Term Notes
5.31% due 5/26/98............................................. 100 100
7.55% due 10/30/98............................................ 100 101
5.70% due 11/16/98............................................ 400 400
6.57% due 4/13/99............................................. 1,500 1,514
6.30% due 1/24/01............................................. 200 203
6.375% due 11/01/01........................................... 3,000 3,048
6.80% due 4/04/02............................................. 350 362
Federal Home Loan Bank - Bonds
5.82% due 12/02/99............................................ 1,000 1,001
Federal Home Loan Bank - Debs.
5.94% due 6/13/00............................................. 550 552
Federal Home Loan Bank - Notes
5.90% due 9/21/98............................................. 880 881
Federal Home Loan Bank - Bonds
5.905% due 12/23/02........................................... 1,000 1,000
5.88% due 9/30/99............................................. 3,500 3,503
Federal Home Loan Mortgage Corp. - Debs.
5.02% due 2/15/99............................................. 420 417
6.515% due 8/25/00............................................ 500 508
Federal Home Loan Mortgage Corp. - Notes
6.24% due 9/07/00............................................. 1,000 1,010
Federal National Mortgage Assoc.
6.36% due 8/16/00............................................. 2,110 2,138
Federal National Mortgage Assoc. - Euro. Med. Term Notes
6.40% due 5/02/01............................................. 4,000 4,044
Federal National Mortgage Assoc. - Med. Term Notes
5.72% due 3/13/01............................................. 1,000 995
Federal National Mortgage Assoc. - Notes
8.45% due 7/12/99............................................. 1,220 1,262
6.35% due 8/10/99............................................. 50 50
8.25% due 12/18/00............................................ 615 652
Private Export Funding Co. - Debs.
9.10% due 10/30/98............................................ 1,025 1,052
9.50% due 3/31/99............................................. 750 783
9.45% due 12/31/99............................................ 500 534
7.90% due 3/31/00............................................. 1,000 1,043
Private Export Funding Co. - Notes
5.75% due 4/30/98............................................. 1,650 1,650
5.50% due 3/15/01............................................. 700 692
State of Israel Agency for International Development - Bonds
6.00% due 2/15/99............................................. 750 751
6.05% due 8/15/00............................................. 1,200 1,206
State of Israel Agency for International Development - Global
Notes
5.75% due 3/15/00............................................. 1,600 1,598
-------
34,117
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Municipals-10.9%
Tennessee Valley Authority - Global Bonds
6.00% due 11/01/00............................................ $5,515 $ 5,545
U.S. Governmental-17.0%
U.S. Treasury - Notes
5.125% due 12/31/98........................................... 4,130 4,111
U.S. Treasury Notes
6.25% due 8/31/02............................................. 4,500 4,593
-------
8,704
-------
TOTAL PUBLICLY-TRADED BONDS- 94.6% 48,366
SHORT-TERM INVESTMENTS-4.2%
Investment in joint trading account (Note B)
6.243% due 1/01/98............................................ 2,132 2,133
------ -------
TOTAL INVESTMENTS- 98.8% 50,499
Cash and receivables, less payables- 1.2% 621
------ -------
NET ASSETS- 100.0% $51,120
====== =======
</TABLE>
ADR-American Depositary Receipt
See notes to financial statement.
71
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SMALL CAP VALUE PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Aerospace-1.0%
BE Aerospace, Inc.*............................................ 6,700 $ 179
Esterline Technologies Corp.*.................................. 1,900 68
GenCorp, Inc. ................................................. 6,600 165
-------
412
Automotive and Rubber-1.8%
Arvin Industries, Inc. ........................................ 14,000 466
Detroit Diesel Corp.*.......................................... 12,400 295
-------
761
Banks and Finance-9.0%
ALBANK Financial Corp. ........................................ 7,800 401
Commercial Federal Corp. ...................................... 5,400 192
Cullen/Frost Bankers, Inc. .................................... 5,200 316
Deposit Guaranty Corp. ........................................ 2,400 137
FirstFed Financial Corp.*...................................... 4,000 155
Imperial Bancorp*.............................................. 4,900 242
Independent Bank Corp. ........................................ 7,600 140
Keystone Financial, Inc. ...................................... 6,000 242
Magna Group, Inc. ............................................. 13,200 603
ONBANCorp, Inc. ............................................... 8,000 563
Peoples Heritage Financial Group, Inc. ........................ 8,700 400
Provident Bankshares Corp.*.................................... 3,900 249
Sovereign Bancorp, Inc. ....................................... 5,800 120
St. Paul Bancorp, Inc. ........................................ 5,550 146
-------
3,906
Building Products-1.9%
Cameron Ashley Building Products*.............................. 2,200 37
Carlisle Cos., Inc. ........................................... 3,700 158
Lone Star Industries, Inc. .................................... 4,700 250
Southdown, Inc. ............................................... 3,600 212
TJ International, Inc. ........................................ 6,700 166
-------
823
Business Services-2.7%
ABM Industries, Inc. .......................................... 8,700 266
Caribiner International, Inc.*................................. 10,000 445
Norrell Corp. ................................................. 4,900 97
Technology Solutions Co.*...................................... 4,800 127
True North Communications, Inc. ............................... 9,200 228
-------
1,163
Chemicals-1.2%
Ferro Corp. ................................................... 5,400 131
H.B. Fuller Co. ............................................... 5,200 257
Terra Industries, Inc. ........................................ 11,300 148
-------
536
Computer Software and Services-3.4%
Aspen Technologies, Inc.*...................................... 4,500 154
BancTec, Inc.*................................................. 7,900 212
Computer Horizons Corporation*................................. 3,900 177
Computer Task Group, Inc. ..................................... 1,100 39
Harbinger Corp.*............................................... 6,100 172
Platinum Technology, Inc.*..................................... 4,000 113
Remedy Corp.*.................................................. 2,600 55
Symantec Corp.*................................................ 6,400 140
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Computer Software and Services-Continued
Systems & Computer Technology Corporation*..................... 6,100 $ 303
Veritas Software Corp.*........................................ 2,300 117
-------
1,482
Computers and Office Equipment-0.3%
C&D Technologies, Inc. ........................................ 1,800 87
Kulicke and Soffa Industries*.................................. 3,000 56
-------
143
Diversified Operations-0.8%
Eastern Enterprises............................................ 3,300 149
Gerber Scientific, Inc. ....................................... 9,000 179
-------
328
Electronic Products-4.6%
Asyst Technologies, Inc.*...................................... 11,600 252
Berg Electronics Corp.*........................................ 13,600 309
Cognex Corp.*.................................................. 3,700 101
Dallas Semiconductor Corp. .................................... 3,200 130
Electro Scientific Industries, Inc.*........................... 2,500 95
Kent Electronics Corp.*........................................ 1,900 48
Plexus Corp.*.................................................. 6,700 100
PMC - Sierra, Inc.*............................................ 6,900 214
SIGCORP, Inc. ................................................. 6,000 176
Technitrol, Inc. .............................................. 7,000 210
Uniphase Corporation*.......................................... 2,400 99
Unitrode Corp.*................................................ 5,400 116
Veeco Instruments Inc.*........................................ 6,400 141
-------
1,991
Engineering-0.8%
Cliffs Drilling Company*....................................... 2,500 125
Jacobs Engineering Group, Inc.*................................ 4,300 109
Stone & Webster, Inc. ......................................... 2,300 108
-------
342
Financial Services-0.8%
FIRSTPLUS Financial Group, Inc.*............................... 3,400 130
T R Financial Corp. ........................................... 4,400 146
WSFS Financial Corporation*.................................... 4,600 92
-------
368
Food, Beverage and Tobacco-3.3%
Adolph Coors Co. - Cl. B....................................... 5,900 196
Canandaigua Brands Inc. - Cl A*................................ 800 44
Dean Foods Co. ................................................ 3,400 202
DIMON, Inc. ................................................... 15,500 407
Earthgrains Co. ............................................... 4,200 197
Richfood Holdings, Inc. ....................................... 8,000 226
Smithfield Foods, Inc.*........................................ 4,800 158
-------
1,430
Health Products and Services-8.9%
Acuson Corp.*.................................................. 7,200 119
Affymetrix, Inc.*.............................................. 8,700 271
Alpharma, Inc. - Cl A.......................................... 11,600 252
AmeriSource Health Corp. - Cl. A*.............................. 2,400 140
Arterial Vascular Engineering, Inc.*........................... 4,200 273
ATL Ultrasound, Inc.*.......................................... 6,500 299
</TABLE>
72
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SMALL CAP VALUE PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Health Products and Services-Continued
Bindley Western Industries, Inc. ............................... 6,400 $ 198
Bio-Rad Laboratories, Inc. - Cl. A*............................. 3,900 102
Hooper Holmes, Inc. ............................................ 7,600 111
ICN Pharmaceuticals, Inc. ...................................... 3,900 190
Integrated Health Services, Inc. ............................... 6,200 193
OEC Medical Systems, Inc.*...................................... 4,800 96
Osteotech, Inc.*................................................ 4,400 120
Parexel International Corp.*.................................... 3,500 130
Perrigo Co.*.................................................... 16,300 218
Protein Design Labs, Inc.*...................................... 3,500 140
Safeskin Corp.*................................................. 3,300 187
Sierra Health Services, Inc.*................................... 6,900 232
Trigon Healthcare, Inc.*........................................ 21,500 561
-------
3,832
Household and Personal-1.5%
Furniture Brands International, Inc.*........................... 16,100 330
Kellwood Co. ................................................... 10,900 327
-------
657
Insurance-5.7%
Allied Group, Inc. ............................................. 5,400 155
CMAC Investment Corp. .......................................... 3,100 187
Delphi Financial Group, Inc. - Cl. A*........................... 5,130 231
Executive Risk, Inc. ........................................... 5,700 398
FBL Financial Group, Inc. - Cl. A............................... 5,800 233
Frontier Insurance Group, Inc. ................................. 10,600 242
Graham Field Health Prods, Inc. ................................ 4,200 70
Horace Mann Educators Corp. .................................... 5,600 159
Lawyers Title Corp. ............................................ 4,600 145
Orion Capital Corp. ............................................ 8,800 409
W.R. Berkley Corp. ............................................. 5,650 248
-------
2,477
Leisure and Recreation Products and Services-0.4%
Carmike Cinemas, Inc. - Cl. A*.................................. 5,400 155
Lodging and Restaurants-2.9%
Brinker International, Inc.*.................................... 7,200 115
Bristol Hotel Co.*.............................................. 16,550 480
Consolidated Products, Inc.*.................................... 17,375 285
Prime Hospitality Corp.*........................................ 18,200 371
-------
1,251
Machinery and Equipment-3.9%
Applied Power, Inc. ............................................ 4,500 311
Blount International, Inc. - Cl. A.............................. 4,400 117
Brown & Sharpe Manufacturing Co. - Cl. A*....................... 8,400 86
Cincinnati Milacron, Inc. ...................................... 4,800 125
Fisher Scientific International, Inc. .......................... 3,200 153
Fluke Corp. .................................................... 6,800 177
Global Industrial Technologies, Inc.*........................... 17,100 290
Graco, Inc. .................................................... 8,100 302
SPX Corp. ...................................................... 1,600 110
-------
1,671
Media-0.9%
Anchor Gaming*.................................................. 3,000 167
Cablevision Systems Corp. - Cl. A*.............................. 1,300 124
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Media-Continued
McClatchy Newspapers, Inc. - Cl. A.............................. 4,200 $ 114
-------
405
Metals and Mining-0.2%
Commercial Metals Company....................................... 2,700 85
Miscellaneous-3.5%
ACX Technologies, Inc.*......................................... 5,100 125
AptarGroup, Inc. ............................................... 9,600 532
DeVry, Inc.*.................................................... 8,400 268
Russ Berrie & Co., Inc. ........................................ 13,500 354
Sotheby's Holdings, Inc. ....................................... 7,500 139
Tredegar Industries, Inc. ...................................... 1,300 86
-------
1,504
Oils and Natural Gas Equipment and
Services-0.3%
Newpark Resources, Inc.*........................................ 6,200 109
Oils and Natural Gas Exploration and
Production-2.9%
Cabot Oil & Gas Corp. - Cl. A................................... 17,800 346
Energen Corporation............................................. 3,000 119
HS Resources, Inc.*............................................. 12,000 166
KN Energy, Inc. ................................................ 2,700 146
ONEOK, Inc. .................................................... 4,500 182
St. Mary Land & Exploration Company............................. 4,900 172
Tesoro Petroleum Corp.*......................................... 7,900 122
-------
1,253
Oils and Natural Gas Service and Drilling-1.4%
Marine Drilling Companies, Inc.*................................ 4,600 95
Trico Marine Services, Inc. .................................... 11,600 341
Veritas DGC, Inc.*.............................................. 4,600 182
-------
618
Paper and Forest Products-0.8%
Chesapeake Corp. ............................................... 6,500 223
Kimberly-Clark Corp. ........................................... 2,898 143
-------
366
Pollution Control Equipment and Services-0.4%
Culligan Water Technologies, Inc.*.............................. 3,300 166
Printing-0.2%
Consolidated Graphics, Inc.*.................................... 2,100 98
Printing-Publications-0.5%
Houghton Mifflin Co. ........................................... 5,900 226
Real Estate Development-1.7%
Lennar Corp. ................................................... 13,100 282
NVR, Inc.*...................................................... 13,400 293
U.S. Home Corp.*................................................ 3,800 149
-------
724
Real Estate Investment Trust-5.1%
CBL & Associates Properties, Inc. .............................. 13,000 321
Essex Property Trust, Inc. ..................................... 6,300 221
Felcor Suite Hotels, Inc. ...................................... 5,800 206
First Industrial LP*............................................ 6,800 246
Gables Residential Trust........................................ 8,400 232
</TABLE>
73
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
SMALL CAP VALUE PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Real Estate Investment Trust-Continued
Liberty Property Trust......................................... 8,500 $ 243
Price REIT, Inc. .............................................. 2,300 94
RFS Hotel Investors, Inc. ..................................... 12,800 255
Shurgard Storage Centers, Inc. ................................ 7,800 226
Sunstone Hotel Investors, Inc. ................................ 9,000 155
-------
2,199
Real Estate Operations-1.6%
American General Hospitality................................... 7,400 198
Mack-Cali Realty Corporation................................... 6,200 254
Pulte Corp. ................................................... 5,400 226
-------
678
Retail-5.6%
Arbor Drugs, Inc. ............................................. 11,100 205
Carson Pirie Scott & Co.*...................................... 4,000 201
Cash America International, Inc. .............................. 8,800 114
Cellstar Corporation*.......................................... 3,700 74
Encore Wire Corporation*....................................... 8,600 264
Ethan Allen Interiors, Inc. ................................... 10,500 405
Footstar, Inc.*................................................ 6,600 177
Oxford Industries, Inc. ....................................... 3,100 101
Pacific Sunwear of California*................................. 5,600 166
Proffitt's, Inc.*.............................................. 5,800 165
Shopko Stores, Inc. ........................................... 15,800 344
United Stationers, Inc.*....................................... 4,600 221
-------
2,437
Telecommunications-1.9%
Brightpoint, Inc.*............................................. 4,800 67
Centennial Cellular Corp. - Cl. A*............................. 5,100 105
CommNet Cellular, Inc.*........................................ 2,300 82
Dynatech Corp.*................................................ 3,700 173
Premiere Technologies, Inc.*................................... 8,400 232
RCN Corporation*............................................... 1,800 62
World Access, Inc.*............................................ 3,500 84
-------
805
Textiles-2.2%
Burlington Industries, Inc.*................................... 26,800 370
Springs Industries, Inc. ...................................... 10,900 566
-------
936
Transportation-2.6%
Airbourne Freight Corp. ....................................... 3,300 205
Expeditors International of Washington, Inc. .................. 3,900 150
Roadway Express, Inc. ......................................... 18,100 400
Yellow Corp.*.................................................. 15,200 382
-------
1,137
Utilities - Electric-2.4%
Black Hills Corp. ............................................. 2,100 74
Central Louisiana Electric..................................... 4,500 146
Central Maine Power Co. ....................................... 3,800 58
Cilcorp, Inc. ................................................. 2,900 142
Commonwealth Energy System Cos. ............................... 2,200 73
Hawaiian Electric Industries, Inc. ............................ 3,200 131
IES Industries, Inc. .......................................... 6,100 225
Minnesota Power & Light Company................................ 4,700 205
-------
1,054
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Utilities - Gas-0.4%
NUI Corp. .................................................... 5,900 $ 169
Water and Water Treatment Services-0.1%
E'Town Corp................................................... 1,200 48
-------
TOTAL COMMON STOCK- 89.6% 38,745
<CAPTION>
Par
Value
(000's)
<S> <C> <C>
SHORT-TERM INVESTMENTS-9.8%
Investment in joint trading account (Note B)
6.243% due 1/01/98............................................ $4,248 4,248
-------
TOTAL SHORT-TERM INVESTMENTS- 9.8% 4,248
------ -------
TOTAL INVESTMENTS- 99.4% 42,993
Cash and receivables, less payables- 0.6% 268
------ -------
NET ASSETS- 100.0% $43,261
====== =======
</TABLE>
* Non-income producing security.
ADR-American Depository Receipt
See notes to financial statements.
74
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL OPPORTUNITIES PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Argentina-1.0%
Banco de Galicia y Buenos Aires SA de CV (BANK)................ 1,151 $ 30
Banco Frances del Rio de la Plata SA (BANK).................... 737 20
Perez Companc SA (OILS)........................................ 7,934 57
Telefonica de Argentina SA - ADR (UTIT)........................ 1,610 60
YPF Sociedad Anonima - ADR - ADR (OILS)........................ 3,792 130
-------
297
Australia-2.0%
Australia & New Zealand Banking Group, Ltd. (BANK)............. 2,000 13
Australian Gas & Light Co., Ltd. (OILS)........................ 10,000 70
Brambles Industries, Ltd. (DIVO)............................... 1,000 20
Broken Hill Proprietary Co., Ltd. (DIVO)....................... 6,631 62
Commonwealth Bank (BANK)....................................... 4,884 56
Foster's Brewing Group, Ltd. (FOOD)............................ 10,000 19
John Fairfax Holdings Ltd. (PUBL).............................. 11,000 23
Lend Lease Corp. (FINL)........................................ 2,016 39
National Australia Bank, Ltd. (BANK)........................... 2,088 29
News Corp., Ltd. (MEDI)........................................ 10,022 55
Publishing & Broadcasting, Ltd. (MEDI)......................... 9,000 41
Sydney Harbour Casino Holdings, Ltd.* (LEIS)................... 19,000 18
TABCORP Holdings, Ltd. (LEIS).................................. 8,000 38
Telstra Corporation Limited* (TELE)............................ 21,000 44
Westpac Banking Corp., Ltd. (BANK)............................. 6,000 38
WMC, Ltd. (META)............................................... 3,000 10
Woodside Petroleum, Ltd. (OILS)................................ 5,000 35
-------
610
Belgium-1.4%
Credit Communal Holding/Dexia (BANK)........................... 189 25
Generale de Banque SA (BANK)................................... 230 100
Generale de Banque SA (BANK)................................... 10 0
Kredietbank NV (BANK).......................................... 550 231
UCB SA (HEAL).................................................. 19 63
-------
419
Brazil-2.3%
Centrais Electricas Brasileiras SA - Eletrobras -ADR (UTIE).... 252 6
Companhia Siderurgica National - ADR (META).................... 1,000 28
Compania Brasileira de Distribuicao Grupo Pao de Acucar (RETL). 1,057 20
Compania Energetica de Minas (UTIE)............................ 2,551 111
Telecomunicacoes Brasileiras S/A - Telebras -ADR (TELE)........ 4,144 483
Usinas Siderurgicas de Minas Gerais S/A -ADR* (META)........... 8,449 50
-------
698
Canada-0.3%
Alcan Aluminum, Ltd. (META).................................... 1,540 42
Royal Bank of Canada (BANK).................................... 650 34
-------
76
Chile-0.2%
Chilectra SA - ADR (UTIE)...................................... 645 16
Chilgener SA - ADR (UTIE)...................................... 319 8
Compania Cervecerias Unidas SA (FOOD).......................... 200 6
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Chile-Continued
Empresa Nacional de Electricidad SA - ADR (UTIE)............... 878 $ 16
Enersis SA - ADR (UTIE)........................................ 503 15
Santa Isabel SA - ADR (RETL)................................... 333 6
-------
67
China-0.2%
Huaneng Power International, Inc. - ADR* (UTIE)................ 2,000 46
Denmark-0.3%
Den Danske Bank (BANK)......................................... 400 53
Tele Danmark A/S (TELE)........................................ 80 5
Unidanmark A/S - Cl. A (FINL).................................. 490 36
-------
94
Finland-0.3%
Oy Nokia AB (TELE)............................................. 1,150 82
France-8.4%
Accor SA (LODG)................................................ 120 22
Alcatel Alsthom (TELE)......................................... 894 114
Assurances Generales de France (INSU).......................... 800 42
AXA SA (INSU).................................................. 1,184 92
Canal Plus (MEDI).............................................. 260 48
Carrefour (RETL)............................................... 111 58
Compagnie de St. Gobain (BUIL)................................. 460 65
Compagnie Generale des Eaux (DIVO)............................. 3,090 431
Credit Commercial de France (BANK)............................. 573 39
Credit Local de France (FINL).................................. 126 15
Dexia France (BANK)............................................ 380 44
Elf Aquitaine (OILS)........................................... 980 114
Group Danone* (FOOD)........................................... 580 104
GTM Entrepose SA (ENGI)........................................ 200 13
Guilbert SA (EDPE)............................................. 300 43
Havas SA (MEDI)................................................ 160 12
L 'Oreal (SOAP)................................................ 125 49
Lapeyre SA (BUIL).............................................. 640 35
Legrand SA (ETRN).............................................. 244 49
Moet Hennessy-Louis Vuitton (MISC)............................. 133 22
Pathe SA* (MEDI)............................................... 110 21
Pinault-Printemps-Redoute SA (RETL)............................ 484 258
Primagaz Cie (OILE)............................................ 240 20
Sanofi SA (HEAL)............................................... 1,452 162
Schneider SA (ETRN)............................................ 2,631 143
Societe Generale de Paris (BANK)............................... 608 83
Societe Television Francaise 1 (MEDI).......................... 690 71
Sodexho Alliance (DIVO)........................................ 15 8
Sodexho Alliance (DIVO)........................................ 150 80
Total SA - Cl. B (OILS)........................................ 2,911 317
-------
2,574
Germany-5.3%
Allianz AG (INSU).............................................. 660 171
Bayer AG (CHEM)................................................ 2,659 99
Bayerische Hypotheken-und Wechsel-Bank AG (BANK)............... 2,253 110
Bayerische Vereinsbank AG (BANK)............................... 1,690 111
Bilfinger & Berger Bau AG (CONS)............................... 500 16
</TABLE>
75
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL OPPORTUNITIES PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Germany-Continued
Buderus AG (MACH).............................................. 30 $ 13
Commerzbank AG (BANK).......................................... 1,080 43
Deutsche Bank AG (BANK)........................................ 2,849 201
Deutsche Telekom* (UTIT)....................................... 2,616 49
Dresdner Bank AG (BANK)........................................ 860 40
Gehe AG (HEAL)................................................. 3,308 165
Hoechst AG (CHEM).............................................. 930 33
Hornback Baumarkt Aktiengesellschaft (RETL).................... 80 2
Mannesmann AG (DIVO)........................................... 94 47
Rhoen-Klinikum AG (HEAL)....................................... 480 47
SAP AG (SOFT).................................................. 470 143
Siemens AG (DIVO).............................................. 1,087 64
VEBA AG (UTIE)................................................. 3,545 241
Volkswagen AG (AUTO)........................................... 40 23
-------
1,618
Hong Kong-2.1%
Cheung Kong (Holdings), Ltd. (REAL)............................ 4,000 26
China Light & Power Co., Ltd. (UTIE)........................... 4,000 22
Dao Heng Bank Group, Ltd. (BANK)............................... 16,000 40
First Pacific Co., Ltd. (DIVO)................................. 55,000 27
HSBC Holdings plc (BANK)....................................... 1,200 30
Hutchison Whampoa, Ltd. (DIVO)................................. 30,000 188
New World Development Co., Ltd. (REAL)......................... 37,297 129
Sun Hung Kai Properties, Ltd. (REAL)........................... 4,000 28
Swire Pacific, Ltd. - Cl. A (DIVO)............................. 18,000 99
Wharf (Holdings), Ltd. (REAL).................................. 30,000 66
-------
655
Italy-4.1%
Assicurazioni Generali (INSU).................................. 4,000 98
Banca Commerciale Italiana (BANK).............................. 4,000 14
Bco Di Roma (BANK)............................................. 74,000 75
Credito Italiano SpA (BANK).................................... 52,393 162
Ente Nazionale Idrocarburi SpA (OILS).......................... 29,784 169
Industrie Natuzzi SpA - ADR (RETL)............................. 1,000 21
Istituto Mobiliare Italiano SpA (FINL)......................... 6,960 83
Italgas SpA (UTIG)............................................. 4,000 17
La Rinascente SpA (RETL)....................................... 1,000 7
Mediolanum SpA* (INSU)......................................... 4,331 82
Telecom Italia Mobile SpA (UTIT)............................... 5,000 14
Telecom Italia Mobile SpA (UTIT)............................... 58,000 268
Telecom Italia SpA* (TELE)..................................... 38,444 246
-------
1,256
Japan-18.9%
Advantest (ETRN)............................................... 400 23
Alps Electric Co. (ETRN)....................................... 4,000 38
Amada Co., Ltd (MACH).......................................... 8,000 30
Canon, Inc. (EDPE)............................................. 14,000 326
Citizen Watch Co., Ltd. (HOUS)................................. 3,000 20
Daifuku Co., Ltd. (MACH)....................................... 1,000 5
Daiichi Pharm Co., Ltd. (HEAL)................................. 9,000 101
Dainippon Screen Manufacturing Co., Ltd. (ETRN)................ 7,000 32
Daiwa House Industry Co., Ltd. (CONS).......................... 12,000 63
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Japan-Continued
DDI Corp. (UTIT)............................................... 13 $ 34
East Japan Railway Co. (TRAN).................................. 26 117
Fanuc (MACH)................................................... 2,300 87
Hitachi Zosen Corp. (META)..................................... 7,000 11
Hitachi, Ltd. (ETRN)........................................... 14,000 100
Honda Motor Co. (AUTO)......................................... 1,000 37
Inax Corp. (BUIL).............................................. 2,000 6
Ishihara Sangyo Kaisha* (CHEM)................................. 2,000 2
Ito-Yokado Co., Ltd. (RETL).................................... 3,000 153
KAO Corp. (SOAP)............................................... 7,000 101
Kokuyo Co. (EDPE).............................................. 4,000 69
Komatsu, Ltd. (MACH)........................................... 9,000 45
Komori Corp. (MACH)............................................ 3,000 45
Kumagai Gumi Co., Ltd. (CONS).................................. 4,000 2
Kuraray Co., Ltd. (TEXT)....................................... 8,000 66
Kyocera Corp. (ETRN)........................................... 5,000 227
Makita Corp. (MACH)............................................ 6,000 57
Marui Co., Ltd. (RETL)......................................... 9,000 140
Matsushita Electric Industrial Co.* (AUDI)..................... 15,000 219
Mitsubishi Corp. (DIVO)........................................ 11,000 87
Mitsubishi Heavy Industries, Ltd. (AERO)....................... 46,000 192
Mitsubishi Paper Mills (PAPR).................................. 3,000 4
Mitsui Fudosan (REAL).......................................... 23,000 222
Mitsui Petrochemical Co. (CHEM)................................ 2,000 4
Murata Manufacturing Co., Ltd. (ETRN).......................... 5,000 126
National House Industrial (BUIL)............................... 1,000 7
NEC Corp. (SOFT)............................................... 28,000 298
Nippon Hodo (CONS)............................................. 1,000 3
Nippon Steel Co. (META)........................................ 61,000 90
Nippon Telegraph & Telephone Corp. (UTIT)...................... 12 103
Nippondenso Co., Ltd. (ETRN)................................... 14,000 252
Nomura Securities Co., Ltd. (FINL)............................. 15,000 200
Pioneer Electronic Corp. (AUDI)................................ 5,000 77
Sangetsu Co., Ltd. (HOUS)...................................... 1,000 10
Sankyo Co., Ltd. (HEAL)........................................ 10,000 226
Sega Enterprises (LEIS)........................................ 1,200 22
Sekisui Chemical Co. (CHEM).................................... 14,000 71
Sekisui House, Ltd. (READ)..................................... 7,000 45
Seven-Eleven Japan (RETL)...................................... 1,000 71
Sharp Corp. (ETRN)............................................. 14,000 96
Shin-Etsu Chemical Co. (CHEM).................................. 7,000 133
Shiseido Co., Ltd. (SOAP)...................................... 4,000 55
Sony Corp. (AUDI).............................................. 3,500 311
Sumitomo Corp. (DIVO).......................................... 17,000 95
Sumitomo Electric Industries (ETRN)............................ 21,000 286
Sumitomo Forestry Co. (PAPR)................................... 3,000 15
TDK Corp. (ETRN)............................................... 3,000 226
Teijin, Ltd. (TEXT)............................................ 20,000 42
Tokio Marine & Fire Insurance Co. (INSU)....................... 3,000 34
Tokyo Electron, Ltd. (ETRN).................................... 2,100 67
Tokyo Steel Manufacturing (META)............................... 2,500 8
Toppan Printing Co. (PUBL)..................................... 8,000 104
UNY Co., Ltd. (RETL)........................................... 4,000 55
Yurtec Corp. (ENGI)............................................ 1,050 6
-------
5,799
</TABLE>
76
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL OPPORTUNITIES PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Malaysia-0.2%
Berjaya Sports Toto Berhad (DIVO).............................. 14,000 $ 36
Tanjong plc (LEIS)............................................. 20,000 33
Time Engineering Berhad (DIVO)................................. 9,000 2
------
71
Mexico-1.6%
Cemex SA de CV - ADR* (BUIL)................................... 8,030 73
Cemex SA de CV (BUIL).......................................... 2,000 11
Cifra SA de CV - ADR* (RETL)................................... 3,825 9
Fomento Economico Mexicano SA de CV (FOOD)..................... 6,000 48
Gruma SA* (FOOD)............................................... 8,965 36
Gruma SA - ADR 144A* (FOOD).................................... 973 15
Grupo Financiero Banamex Accival SA de CV*
(BANK)........................................................ 6,300 19
Grupo Industrial Maseca SA de CV (FOOD)........................ 12,630 13
Grupo Modelo SA de CV (FOOD)................................... 4,000 34
Grupo Televisa SA - GDR* (MEDI)................................ 1,207 47
Kimberly-Clark de Mexico SA de CV (PAPR)....................... 11,170 55
Telefonos de Mexico SA - ADR (UTIT)............................ 2,560 144
------
504
Netherlands-10.3%
ABN Amro Holding NV (BANK)..................................... 8,566 167
Akzo Nobel NV (CHEM)........................................... 260 45
Baan Co., NV (SOFT)............................................ 1,808 59
Baan Co., NV* (SOFT)........................................... 720 24
CSM NV (FOOD).................................................. 2,618 116
Elsevier NV (PUBL)............................................. 21,880 354
Fortis Amev NV (FINL).......................................... 3,080 134
Gucci Group NV (TEXT).......................................... 815 34
ING Groep NV (BANK)............................................ 8,250 347
Koninklijke Ahold NV (RETL).................................... 1,623 42
Koninklijke Nutricia Verenigde Bedrijven
N.V. (FOOD)................................................... 1,905 58
Koninklijke PTT Nederland NV (TELE)............................ 550 23
Otra NV (DIVO)................................................. 240 3
PolyGram NV (LEIS)............................................. 3,270 156
Royal Dutch Petroleum Co. (OILS)............................... 13,970 767
Unilever Nv (DIVO)............................................. 5,060 312
Wolters Kluwer NV (PUBL)....................................... 4,083 527
------
3,168
New Zealand-0.3%
Air New Zealand, Ltd. - Cl. B (TRAN)........................... 4,721 9
Fletcher Challenge Building (BUIL)............................. 10,688 22
Fletcher Challenge Energy (OILS)............................... 7,056 25
Telecom Corp. of New Zealand (UTIT)............................ 10,000 48
------
104
Norway-1.8%
Bergesen dy AS (TRAN).......................................... 250 6
Norsk Hydro AS (CHEM).......................................... 4,810 234
Orkla AS (DIVO)................................................ 3,610 310
Saga Petroleum AS - Cl. B (OILS)............................... 400 6
------
556
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Panama-0.3%
Banco Latinoamericano de Exportaciones SA -Cl. E (BANK)........ 176 $ 7
Panamerican Beverages, Inc. - Cl. A (FOOD)..................... 2,160 70
------
77
Peru-0.0%
Telefonica del Peru SA - ADR (TELE)............................ 535 11
Portugal-0.4%
Estabelecimentos Jeronimo Martins & Filho, Sociedale Gestoea de
Participacoes Sociais SA (RETL)............................... 1,680 53
Jeronimo Martins, SGPS, SA* (MISC)............................. 2,520 80
------
133
Singapore-0.8%
City Developments, Ltd. (READ)................................. 3,000 14
Hong Kong Land Holdings, Ltd. (READ)........................... 48,000 92
Oversea-Chinese Bank Corp., Ltd. (BANK)........................ 1,200 7
Overseas Union Bank, Ltd. (BANK)............................... 6,400 24
Singapore Land, Ltd. (REAL).................................... 10,000 22
Singapore Press Holdings, Ltd. (PUBL).......................... 5,000 63
United Overseas Bank, Ltd. (BANK).............................. 6,000 33
------
255
Soviet Union-0.1%
Oil Co. Lukoil (OILS).......................................... 180 17
Spain-2.4%
Banco Bilbao Vizcaya SA (BANK)................................. 1,580 51
Banco Popular Espanol SA (BANK)................................ 1,430 100
Banco Santander SA (BANK)...................................... 4,318 144
Centros Comerciales Pryca SA (RETL)............................ 610 9
Corporacion Bancaria de Espana SA (BANK)....................... 830 51
Empresa Nacional de Electricidad SA (UTIE)..................... 5,338 95
Gas Natural SDG SA (UTIG)...................................... 880 46
Iberdrola SA (UTIE)............................................ 5,060 67
Repsol SA (OILS)............................................... 1,297 55
Telefonica de Espana (UTIT).................................... 4,193 120
------
738
Sweden-3.5%
ABB AB - Cl. A (MACH).......................................... 5,870 69
Astra AB - Cl. B (HEAL)........................................ 16,096 271
Atlas Corp. (META)............................................. 3,750 112
Electrolux AB - Ser. B (HOUS).................................. 2,000 139
Esselte AB - Cl. B (EDPE)...................................... 910 18
Granges AB* (MISC)............................................. 495 8
Hennes & Mauritz AB - B Shares (RETL).......................... 4,390 194
Nordbanken Holding (BANK)...................................... 27,574 156
Sandvik AB - Cl. A (MACH)...................................... 530 15
Sandvik AB - Cl. B (MACH)...................................... 2,700 77
Scribona AB (EDPE)............................................. 290 3
------
1,062
Switzerland-7.0%
ABB AG (ENGI).................................................. 110 138
Adecco SA (BUSI)............................................... 435 126
CS Holding AG (BANK)........................................... 450 70
Nestle SA (FOOD)............................................... 290 434
</TABLE>
77
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL OPPORTUNITIES PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Switzerland-Continued
Novartis AG* (HEAL)............................................ 436 $ 707
Roche Holdings AG (HEAL)....................................... 41 407
Schweizerische Bankgesellschaft (BANK)......................... 70 101
Schweizerischer Bankverein (BANK).............................. 480 149
--------
2,132
United Kingdom-19.3%
Abbey National First Capital BV (BANK)......................... 13,000 234
Argos plc (RETL)............................................... 13,733 124
Asda Group plc (RETL).......................................... 42,000 124
BG plc (UTIG).................................................. 10,588 48
British Petroleum Co. plc - ADR* (OILS)........................ 10,000 132
Cable & Wireless plc (TELE).................................... 25,000 220
Cadbury Schweppes plc (FOOD)................................... 16,000 161
Caradon plc (BUIL)............................................. 26,500 77
Centrica plc* (UTIG)........................................... 7,000 10
Compass Group plc (LODG)....................................... 7,000 86
David S. Smith Holdings plc (PAPR)............................. 15,000 49
Electrocomponents plc (ETRN)................................... 7,000 52
GKN plc (AUTO)................................................. 2,000 41
Glaxo Wellcome plc - ADR (HEAL)................................ 16,000 381
Guinness plc (FOOD)............................................ 54,000 494
Heywood Williams Group plc (BUIL).............................. 2,000 7
Hillsdown Holdings plc (FOOD).................................. 4,000 10
John Laing plc (CONS).......................................... 3,000 16
Kingfisher plc (RETL).......................................... 26,000 363
Ladbroke Group plc (LEIS)...................................... 13,000 56
National Westminster Bank plc (BANK)........................... 48,000 798
Rank Group plc (LEIS).......................................... 17,000 95
Reed International plc (PUBL).................................. 47,000 448
Rolls-Royce plc (AERO)......................................... 4,000 15
RTZ Corp. plc (META)........................................... 10,000 123
Safeway plc (RETL)............................................. 21,000 118
Shell Transport & Trading Co. plc (OILS)....................... 57,000 400
SmithKline Beecham plc (HEAL).................................. 54,800 565
T & N plc (AUTO)............................................... 10,000 42
Tesco plc (RETL)............................................... 17,000 140
Tomkins plc (DIVO)............................................. 54,000 255
United News & Media plc (PUBL)................................. 21,000 239
--------
5,923
United States-0.6%
Brazil Fund, Inc. (FUND)....................................... 860 18
Credicorp, Ltd. (FINL)......................................... 360 6
Korea Fund, Inc.* (FUND)....................................... 5,213 35
Lojas Americanas SA - ADR (RETL)............................... 925 4
Mahanagar Telephone Nigam Ltd. (TELE).......................... 3,000 46
TV Azteca SA de CV* (MEDI)..................................... 2,700 61
--------
170
Venezuela-0.1%
Compania Anonima Nacional Telefonos de Venezuela* (UTIT)....... 928 39
--------
TOTAL COMMON STOCK- 95.5% 29,251
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
PREFERRED STOCK
Australia-0.0%
FXF Trust (John Fairfax) (PUBL)............................... 9,000 $ 2
News Corp., Ltd. - Pref. (MEDI)............................... 3,000 15
-------
17
Germany-0.3%
Fresenius AG (HEAL)........................................... 150 28
Fielmann AG - Pref. (RETL).................................... 130 3
Hornbach Holding AG - Pref. (RETL)............................ 200 14
SAP AG (SOFT)................................................. 120 39
-------
84
-------
TOTAL PREFERRED STOCK- 0.3% 101
WARRANTS-0.1%
Netherlands-0.1%
ING Groep NV expires 3/15/01 (Cost $10)....................... 2 19
<CAPTION>
Par
Value
(000's)
<S> <C> <C>
SHORT-TERM INVESTMENTS-0.1%
Investment in joint trading account (Note B)
6.243% due 1/01/98............................................ 39 39
------ -------
TOTAL INVESTMENTS- 96.0% 29,410
Cash and receivables, less payable- 4.0% 1,221
------ -------
NET ASSETS- 100.0% $30,631
====== =======
</TABLE>
* Non-income producing security.
ADR-American Depository Receipt
See notes to financial statements.
78
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
INTERNATIONAL OPPORTUNITIES PORTFOLIO
SUMMARY OF LONG-TERM SECURITIES BY INDUSTRY
<TABLE>
<CAPTION>
Industry Market %
Industry Abbreviation Value Long-Term
(000's) Investments
<S> <C> <C> <C>
Banks and Finance............................. BANK 4,098 13.9%
Health Products and Services.................. HEAL 3,123 10.9%
Oils and Natural Gas Exploration and
Production................................... OILS 2,294 7.6%
Diversified Operation......................... DIVO 2,126 7.2%
Retail........................................ RETL 1,988 6.8%
Publication................................... PUBL 1,760 6.0%
Electronic Products........................... ETRN 1,717 5.9%
Food, Beverage and Tobacco.................... FOOD 1,618 5.5%
Telecommunications............................ TELE 1,274 4.3%
Utilities--Telecommunications................. UTIT 879 3.0%
Utilities--Electric........................... UTIE 643 2.2%
Chemicals..................................... CHEM 621 2.1%
Audio/Video Home Products..................... AUDI 607 2.1%
Computer Software and Services................ SOFT 563 2.0%
Insurance..................................... INSU 519 1.8%
Financial Services............................ FINL 513 1.6%
Real Estate Operations........................ REAL 493 1.7%
Metals and Mining............................. META 474 1.6%
Computer and Office Equipment................. EDPE 459 1.6%
Machinery and Equipment....................... MACH 443 1.5%
Leisure and Recreation Products and Services.. LEIS 418 1.4%
Media......................................... MEDI 371 1.3%
Building Products............................. BUIL 303 1.0%
Aerospace..................................... AERO 207 0.7%
Soap, Cosmetics and Personal Care............. SOAP 205 0.7%
Household and Personal........................ HOUS 169 0.6%
Engineering................................... ENGI 157 0.5%
Real Estate Development....................... READ 151 0.5%
Automotive and Rubber......................... AUTO 143 0.5%
Textiles...................................... TEXT 142 0.5%
Transportation................................ TRAN 132 0.4%
Business Services............................. BUSI 126 0.4%
Paper and Forest Products..................... PAPR 123 0.4%
Utilities--Gas................................ UTIG 121 0.4%
Miscellaneous................................. MISC 110 0.4%
Lodging and Restaurants....................... LODG 108 0.4%
Construction.................................. CONS 100 0.3%
Investment Companies.......................... FUND 53 0.2%
Oils and Natural Gas Exploration and Services. OILE 20 0.1%
------ ------
29,371 100.0%
====== ======
</TABLE>
79
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
EQUITY INDEX PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK
Aerospace-1.5%
Boeing Co. ................................................... 13,068 $ 640
General Dynamics Corp. ....................................... 800 69
Lockheed Martin Corp. ........................................ 2,500 246
Northrop Grumman Corp. ....................................... 900 104
Raytheon Company - Class B.................................... 4,500 227
United Technologies Corp. .................................... 3,000 218
--------
1,504
Automotive and Rubber-2.1%
Chrysler Corp. ............................................... 8,600 303
Cooper Tire & Rubber Co. ..................................... 1,100 27
Dana Corp. ................................................... 1,300 62
Eaton Corp. .................................................. 1,000 89
Echlin, Inc. ................................................. 800 29
Ford Motor Co. ............................................... 15,600 760
General Motors Corp. ......................................... 9,300 564
Genuine Parts Co. ............................................ 2,350 80
Goodyear Tire & Rubber Co. ................................... 2,000 127
Navistar International Corp. - Cl. B*......................... 900 22
TRW, Inc. .................................................... 1,600 85
--------
2,148
Banks and Finance-8.3%
Banc One Corp. ............................................... 7,600 413
Bank of New York Co., Inc. ................................... 4,900 283
BankAmerica Corp. ............................................ 9,100 664
BankBoston Corp. ............................................. 1,900 178
Bankers Trust New York Corp. ................................. 1,300 146
Barnett Banks, Inc. .......................................... 2,600 187
BB&T Corporation.............................................. 1,800 115
Chase Manhattan Corp. ........................................ 5,500 602
Citicorp...................................................... 6,000 759
Comerica, Inc. ............................................... 1,400 126
Corestates Financial Corp. ................................... 2,600 208
Fifth Third Bancorp........................................... 2,000 164
First Union Corp. ............................................ 8,200 420
Fleet Financial Group, Inc. .................................. 3,300 247
Huntington Bancshares, Inc. .................................. 2,500 90
J.P. Morgan & Co., Inc. ...................................... 2,300 260
KeyCorp....................................................... 2,900 205
MBNA Corp. ................................................... 6,450 176
Mellon Bank Corp. ............................................ 3,300 200
National City Corp. .......................................... 2,800 184
NationsBank Corp. ............................................ 9,300 566
Norwest Corp. ................................................ 9,900 382
PNC Bank Corp. ............................................... 4,000 228
Republic New York Corp. ...................................... 700 80
State Street Corp. ........................................... 2,100 122
Suntrust Banks, Inc. ......................................... 2,800 200
U.S. Bancorp.................................................. 3,206 359
Wachovia Corp. ............................................... 2,700 219
Washington Mutual, Inc. ...................................... 3,400 217
Wells Fargo & Co. ............................................ 1,100 373
--------
8,373
Building Products-0.3%
Armstrong World Industries, Inc. ............................. 500 37
Fleetwood Enterprises, Inc. .................................. 500 21
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Building Products-Continued
Louisiana-Pacific Corp. ...................................... 1,300 $ 25
Masco Corp. .................................................. 2,100 107
Owens Corning Fiberglass Corp. ............................... 600 20
Sherwin-Williams Co. ......................................... 2,200 61
--------
271
Business Services-0.5%
Cendant Corporation*.......................................... 10,306 354
Ceridian Corp.*............................................... 1,000 46
Dun & Bradstreet Corp......................................... 2,200 68
Moore Corp., Ltd. ............................................ 1,200 18
--------
486
Chemicals-2.4%
Air Products & Chemicals, Inc. ............................... 1,400 115
Dow Chemical Co. ............................................. 3,000 305
E.I. du Pont de Nemours & Co. ................................ 14,800 889
Eastman Chemical Co. ......................................... 1,000 60
Engelhard Corp. .............................................. 1,800 31
FMC Corp.*.................................................... 500 34
Great Lakes Chemical Corp. ................................... 800 36
Hercules, Inc. ............................................... 1,200 60
Monsanto Co. ................................................. 7,800 328
Morton International, Inc. ................................... 1,700 58
Nalco Chemical Co. ........................................... 800 32
PPG Industries, Inc. ......................................... 2,300 131
Praxair, Inc. ................................................ 2,000 90
Rohm & Haas Co. .............................................. 800 77
Sigma-Aldrich Corp. .......................................... 1,300 52
Union Carbide Corp. .......................................... 1,600 69
W.R. Grace & Co. ............................................. 1,000 80
--------
2,447
Computer Software and Services-3.4%
Adobe Systems, Inc. .......................................... 1,000 41
Autodesk, Inc. ............................................... 700 26
Automatic Data Processing, Inc. .............................. 3,800 233
Cabletron Systems, Inc.*...................................... 2,000 30
Computer Associates International, Inc. ...................... 7,125 377
Computer Sciences Corp.*...................................... 1,000 84
First Data Corp. ............................................. 5,600 164
Microsoft Corp.*.............................................. 15,800 2,042
NextLevel Systems, Inc.*...................................... 1,900 34
Novell, Inc.*................................................. 4,400 33
Oracle Corp.*................................................. 12,850 287
Parametric Technology Co.*.................................... 1,600 76
--------
3,427
Computers and Office Equipment-5.1%
3Com Corp.*................................................... 4,500 157
Apple Computer, Inc.*......................................... 1,600 21
Bay Networks, Inc.*........................................... 2,700 69
Cisco Systems, Inc.*.......................................... 13,150 733
Compaq Computer Corp.......................................... 9,830 555
Data General Corp.*........................................... 700 12
Dell Computer Corp.*.......................................... 4,300 361
Digital Equipment Corp.*...................................... 1,900 70
EMC Corp.*.................................................... 6,500 178
</TABLE>
80
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
EQUITY INDEX PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Computers and Office Equipment-Continued
Harris Corp. ................................................. 1,000 $ 46
Hewlett-Packard Co. .......................................... 13,600 850
IBM Corp. .................................................... 12,700 1,328
John H. Harland Co. .......................................... 400 8
Pitney Bowes, Inc. ........................................... 1,900 171
Seagate Technology, Inc.*..................................... 3,100 60
Silicon Graphics, Inc.*....................................... 2,200 27
Sun Microsystems, Inc.*....................................... 4,900 195
Unisys Corp.*................................................. 2,300 32
Xerox Corp. .................................................. 4,300 317
--------
5,190
Construction-0.0%
Foster Wheeler Corp. ......................................... 600 16
Kaufman & Broad Home Corp. ................................... 500 11
--------
27
Diversified Operations-5.9%
Aeroquip-Vickers, Inc. ....................................... 300 15
B.F. Goodrich Co. ............................................ 1,000 41
Ball Corp. ................................................... 300 11
Cognizant Corp. .............................................. 2,100 94
Corning, Inc. ................................................ 3,100 115
Eastern Enterprises........................................... 300 14
Fortune Brands, Inc. ......................................... 2,200 82
Frontier Corp. ............................................... 2,000 48
General Electric Co. ......................................... 42,700 3,133
Illinois Tool Works, Inc. .................................... 3,200 192
ITT Industries, Inc. ......................................... 1,500 47
Jefferson-Pilot Corp. ........................................ 900 70
Loews Corp. .................................................. 1,500 159
Minnesota Mining & Manufacturing Co. ......................... 5,300 435
NACCO Industries, Inc. - Cl. A................................ 100 11
National Service Industries, Inc. ............................ 600 30
Raychem Corp. ................................................ 1,100 47
Sara Lee Corp. ............................................... 6,300 355
Tenneco, Inc. ................................................ 2,300 91
Textron, Inc. ................................................ 2,100 131
Tyco International, Ltd. ..................................... 7,000 315
Unilever NV................................................... 8,400 524
Whitman Corp.................................................. 1,300 34
--------
5,994
Electronic Products-3.3%
Advanced Micro Devices, Inc.*................................. 1,800 32
AMP, Inc. .................................................... 2,800 118
Applied Materials, Inc.*...................................... 4,800 145
Emerson Electric Co. ......................................... 5,800 327
General Signal Corp. ......................................... 700 30
Honeywell, Inc. .............................................. 1,700 116
Intel Corp. .................................................. 21,400 1,503
KLA Instruments Corp.*........................................ 1,100 42
LSI Logic Corp.*.............................................. 1,800 36
Micron Technology, Inc.*...................................... 2,800 73
Motorola, Inc. ............................................... 7,800 445
National Semiconductor Corp.*................................. 2,000 52
Rockwell International Corp................................... 2,700 141
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Electronic Products-Continued
Tektronix, Inc. .............................................. 900 $ 36
Texas Instruments, Inc. ...................................... 5,100 230
Thomas & Betts Corp. ......................................... 700 33
--------
3,359
Engineering-0.1%
Cummins Engine Company, Inc. ................................. 500 30
Fluor Corp. .................................................. 1,000 37
--------
67
Financial Services-2.8%
American Express Co. ......................................... 6,100 544
Beneficial Corp. ............................................. 700 58
Charles Schwab Corp. ......................................... 3,550 149
Cincinnati Financial Corporation.............................. 700 99
Countrywide Credit Industries, Inc. .......................... 1,500 64
Equifax, Inc. ................................................ 2,000 71
First Chicago NBD Corp. ...................................... 3,800 317
Golden West Financial Corp. .................................. 800 78
Green Tree Financial Corp. ................................... 1,800 47
H & R Block, Inc. ............................................ 1,300 58
H.F. Ahmanson & Co. .......................................... 1,200 80
Household International, Inc. ................................ 1,400 179
Merrill Lynch & Co., Inc. .................................... 4,400 321
MGIC Investment Corp. ........................................ 1,500 100
Morgan Stanley, Dean Witter,
Discover & Co. .............................................. 7,750 458
Providian Financial Corp...................................... 1,200 54
RyderSystem, Inc. ............................................ 1,000 33
Synovus Financial Corp. ...................................... 2,200 72
--------
2,782
Food, Beverage and Tobacco-7.2%
Adolph Coors Co. - Cl. B...................................... 400 13
Albertsons, Inc. ............................................. 3,300 156
Anheuser-Busch Cos., Inc. .................................... 6,400 282
Archer-Daniels-Midland Co. ................................... 7,356 160
Campbell Soup Co. ............................................ 6,000 349
Coca-Cola Co. ................................................ 32,300 2,152
ConAgra, Inc. ................................................ 6,100 200
CPC International, Inc. ...................................... 1,900 205
General Mills, Inc. .......................................... 2,100 150
Giant Food, Inc. ............................................. 800 27
H.J. Heinz Co. ............................................... 4,800 244
Hershey Foods Corp. .......................................... 1,900 118
Kellogg Co. .................................................. 5,300 263
PepsiCo, Inc. ................................................ 19,800 721
Philip Morris Cos., Inc. ..................................... 31,600 1,432
Pioneer Hi-Bred International, Inc. .......................... 900 97
Quaker Oats Co. .............................................. 1,800 95
Ralston Purina Group.......................................... 1,400 130
Seagram Co., Ltd. ............................................ 4,800 155
SUPERVALU, Inc. .............................................. 800 34
Sysco Corp. .................................................. 2,200 100
The Great Atlantic & Pacific Tea Company, Inc. ............... 400 12
UST, Inc. .................................................... 2,400 89
</TABLE>
81
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
EQUITY INDEX PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Food, Beverage and Tobacco-Continued
Wm. Wrigley Jr. Co. .......................................... 1,500 $ 119
--------
7,303
Government Agencies-1.2%
Federal Home Loan Mortgage Corp. ............................. 9,100 382
Federal National Mortgage Assoc. ............................. 13,900 793
--------
1,175
Health Products and Services-11.0%
Abbott Laboratories........................................... 10,000 656
Allergan, Inc. ............................................... 800 27
Alza Corp.*................................................... 1,100 35
American Home Products Corp................................... 8,500 650
Amgen, Inc.................................................... 3,400 184
Bausch & Lomb, Inc. .......................................... 700 28
Baxter International, Inc. ................................... 3,600 182
Becton, Dickinson & Co. ...................................... 1,600 80
Biomet, Inc. ................................................. 1,400 36
Boston Scientific Corp.*...................................... 2,500 115
Bristol-Myers Squibb Co. ..................................... 13,000 1,230
C.R. Bard, Inc. .............................................. 800 25
Cardinal Health, Inc. ........................................ 1,400 105
Columbia/HCA Healthcare Corp. ................................ 8,350 247
Crescendo Pharmaceuticals Cp.................................. 45 1
CVS Corp. .................................................... 2,200 141
Eli Lilly & Co. .............................................. 14,500 1,010
Fresenius Medical Care AG - Pref.*............................ 300 0
Guidant Corp. ................................................ 1,900 118
HEALTHSOUTH Corp.*............................................ 5,200 144
Humana, Inc.*................................................. 2,000 42
Johnson & Johnson............................................. 17,600 1,159
Mallinckrodt, Inc. ........................................... 1,000 38
Manor Care, Inc. ............................................. 800 28
Medtronic, Inc. .............................................. 6,200 324
Merck & Co., Inc. ............................................ 15,600 1,658
Pfizer, Inc. ................................................. 16,900 1,260
Pharmacia & Upjohn, Inc. ..................................... 6,600 242
Schering-Plough Corp. ........................................ 9,600 596
Shared Medical Systems Corp. ................................. 300 20
St. Jude Medical, Inc.*....................................... 1,100 34
Tenet Healthcare Corp.*....................................... 4,000 133
U.S. Surgical Corp. .......................................... 900 26
United Healthcare Corp. ...................................... 2,400 119
Warner-Lambert Co. ........................................... 3,600 446
--------
11,139
Household and Personal-2.8%
Avon Products, Inc. .......................................... 1,700 104
Clorox Co. ................................................... 1,300 103
Colgate-Palmolive Co. ........................................ 3,900 287
Gillette Co. ................................................. 7,300 733
Newell Co. ................................................... 2,000 85
Procter & Gamble Co. ......................................... 17,500 1,397
Reebok International, Ltd.*................................... 800 23
Rubbermaid, Inc. ............................................. 1,900 48
Tupperware Corp. ............................................. 800 22
Whirlpool Corp. .............................................. 1,100 61
--------
2,863
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Insurance-4.5%
Aetna, Inc. .................................................. 1,900 $ 134
Allstate Corp. ............................................... 5,600 509
American General Corp. ....................................... 3,221 174
American International Group, Inc. ........................... 9,200 1,001
Aon Corp. .................................................... 2,300 135
Chubb Corp. .................................................. 2,200 166
Cigna Corp. .................................................. 1,000 173
Conseco, Inc. ................................................ 2,400 109
General Re Corp. ............................................. 1,000 212
Hartford Financial Services Group, Inc. ...................... 1,500 140
Lincoln National Corp. ....................................... 1,300 102
Marsh & McLennan Cos., Inc. .................................. 2,200 164
MBIA, Inc. ................................................... 1,200 80
Progressive Corp. ............................................ 1,000 120
Safeco Corp. ................................................. 1,800 88
St. Paul Cos., Inc. .......................................... 1,100 90
SunAmerica, Inc. ............................................. 2,500 107
Torchmark, Inc. .............................................. 1,800 76
Transamerica Corp. ........................................... 800 85
Travelers Group, Inc. ........................................ 14,952 806
UNUM Corp. ................................................... 1,800 98
USF & G Corp. ................................................ 1,500 33
--------
4,602
Investment Companies-2.4%
Aim Stic Prime Fund........................................... 1,178,752 1,179
Money Market Obligs Trust..................................... 1,270,484 1,270
--------
2,449
Leisure and Recreation Products and
Services-1.1%
Brunswick Corp. .............................................. 1,200 36
Harrah's Entertainment, Inc.*................................. 1,400 26
Mattel, Inc. ................................................. 3,800 142
The Walt Disney Co. .......................................... 8,800 872
--------
1,076
Lodging and Restaurants-0.9%
Darden Restaurants, Inc. ..................................... 2,000 25
Hilton Hotels Corp. .......................................... 3,400 101
ITT Corp.*.................................................... 1,500 124
Marriot International, Inc. .................................. 1,700 118
McDonald's Corp. ............................................. 9,000 430
Mirage Resorts, Inc.*......................................... 2,200 50
Tricon Global Restaurants, Inc.*.............................. 1,950 57
Wendy's International, Inc. .................................. 1,600 39
--------
944
Machinery and Equipment-1.6%
Allied Signal, Inc. .......................................... 7,500 292
Black & Decker Corp. ......................................... 1,200 47
Briggs & Stratton Corp. ...................................... 300 15
Case Corp. ................................................... 1,000 60
Caterpillar, Inc. ............................................ 4,800 233
Cincinnati Milacron, Inc. .................................... 400 10
Cooper Industries, Inc. ...................................... 1,600 78
Crane Co. .................................................... 600 26
Deere & Co. .................................................. 3,400 198
Dover Corp. .................................................. 2,900 105
</TABLE>
82
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
EQUITY INDEX PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Machinery and Equipment-Continued
Harnischfeger Industries, Inc. ................................. 600 $ 21
Ingersoll-Rand Co. ............................................. 2,200 89
Maytag Corp. ................................................... 1,200 45
McDermott International, Inc. .................................. 800 29
PACCAR, Inc. ................................................... 1,000 53
Parker-Hannifin Corp. .......................................... 1,450 67
Perkin-Elmer Corp. ............................................. 600 43
Snap-On, Inc. .................................................. 800 35
Stanley Works................................................... 1,100 52
Thermo Electron Corp.*.......................................... 2,000 89
W.W. Grainger, Inc. ............................................ 700 68
------
1,655
Media-2.5%
CBS Corporation................................................. 9,300 274
Clear Channel Communications, Inc.*............................. 1,300 103
Comcast Corp. - Cl. A........................................... 4,500 142
Dow Jones & Co., Inc. .......................................... 1,200 64
Gannett Co., Inc. .............................................. 3,800 235
HBO & Company................................................... 2,700 130
Interpublic Group Cos., Inc. ................................... 1,750 87
King World Productions, Inc..................................... 500 29
Knight-Ridder, Inc. ............................................ 1,100 57
McGraw-Hill Cos., Inc. ......................................... 1,300 96
Meredith Corp. ................................................. 700 25
New York Times Co. - Cl. A...................................... 1,300 86
Omnicom Group Inc. ............................................. 2,200 93
Tele-Communications, Inc.*...................................... 6,500 182
Time Warner, Inc. .............................................. 7,300 453
Tribune Co. .................................................... 1,600 100
U.S. West, Inc.*................................................ 7,900 228
Viacom, Inc. - Cl. B*........................................... 4,700 195
------
2,579
Metals and Mining-0.9%
Alcan Aluminium, Ltd. .......................................... 3,100 86
Allegheny Teldyne, Inc. ........................................ 2,200 57
Aluminum Co. of America......................................... 2,300 162
Armco, Inc.*.................................................... 1,100 5
Asarco, Inc. ................................................... 400 9
Barrick Gold Corp. ............................................. 4,900 91
Battle Mountain Gold Co. ....................................... 3,400 20
Bethleham Steel Corp.*.......................................... 1,400 12
Cyprus Amax Minerals Co. ....................................... 1,000 15
Echo Bay Mines, Ltd.*........................................... 1,700 4
Freeport-McMoRan Copper & Gold.................................. 2,400 38
Homestake Mining Co. ........................................... 2,100 19
Inco, Ltd. ..................................................... 2,100 36
Inland Steel Industries, Inc. .................................. 600 10
Newmont Mining Corp. ........................................... 2,101 62
Nucor Corp. .................................................... 1,100 53
Phelps Dodge Corp. ............................................. 800 50
Placer Dome, Inc. .............................................. 3,300 42
Reynolds Metals Co. ............................................ 1,000 60
Timken Co. ..................................................... 800 28
USX-US Steel Group, Inc. ....................................... 1,100 34
Worthington Industries, Inc. ................................... 1,300 21
------
914
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Miscellaneous-0.9%
American Greetings Corp. - Cl. A................................ 900 $ 35
Avery Dennison Corp. ........................................... 1,300 58
Brown-Forman Corp. - Cl. B...................................... 900 50
Crown Cork & Seal Co., Inc. .................................... 1,700 85
Ecolab, Inc. ................................................... 800 44
EG & G, Inc. ................................................... 700 15
Ikon Office Solutions, Inc. .................................... 1,700 48
Johnson Controls, Inc. ......................................... 1,200 57
Jostens, Inc. .................................................. 600 14
Millipore Corp. ................................................ 600 20
Owens-Illinois, Inc.*........................................... 1,800 68
Pall Corp. ..................................................... 1,600 33
Service Corp. International..................................... 3,300 122
Stone Container Corp.*.......................................... 1,100 11
Waste Management, Inc. ......................................... 6,000 165
Western Atlas, Inc.*............................................ 700 52
------
877
Oils and Natural Gas Equipment and
Services-0.9%
Baker Hughes, Inc. ............................................. 2,300 100
Dresser Industries, Inc. ....................................... 2,300 96
Halliburton Co. ................................................ 3,400 177
Rowan Cos., Inc.*............................................... 1,100 34
Schlumberger, Ltd. ............................................. 6,500 523
------
930
Oils and Natural Gas Exploration and Production-7.7%
Amerada Hess Corp. ............................................. 1,200 66
Amoco Corp. .................................................... 6,400 545
Anadarko Petroleum Corp. ....................................... 800 49
Apache Corp. ................................................... 1,100 39
Ashland, Inc. .................................................. 1,000 54
Atlantic Richfield Co. ......................................... 4,200 337
Burlington Resources, Inc. ..................................... 2,310 104
Chevron Corp. .................................................. 8,600 662
Coastal Corp. .................................................. 1,400 87
Columbia Gas System, Inc. ...................................... 700 55
Consolidated Natural Gas Co. ................................... 1,200 73
Enron Corp. .................................................... 4,200 175
Exxon Corp. .................................................... 32,200 1,970
Helmerich & Payne, Inc. ........................................ 300 20
Kerr-McGee Corp. ............................................... 600 38
Mobil Corp. .................................................... 10,300 744
Occidental Petroleum Corp. ..................................... 4,500 132
ONEOK, Inc. .................................................... 400 16
Oryx Energy Co.*................................................ 1,300 33
Pennzoil Co. ................................................... 600 40
Phillips Petroleum Co. ......................................... 3,400 165
Royal Dutch Petroleum Co. - NY Shares........................... 28,000 1,517
Sonat, Inc. .................................................... 1,100 50
Sun Co., Inc. .................................................. 1,000 42
Texaco, Inc. ................................................... 7,100 386
Union Pacific Resources Group, Inc. ............................ 3,208 78
</TABLE>
83
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
EQUITY INDEX PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Oils and Natural Gas Exploration and Production-Continued
Unocal Corp. ................................................. 3,300 $ 128
USX-Marathon Group............................................ 3,700 125
Williams Cos., Inc. .......................................... 4,100 116
--------
7,846
Paper and Forest Products-1.1%
Boise Cascade Corp. .......................................... 800 24
Champion International Corp. ................................. 1,200 54
Fort James Corp. ............................................. 2,800 107
Georgia Pacific Corp. ........................................ 1,200 73
International Paper Co. ...................................... 4,000 173
Kimberly-Clark Corp. ......................................... 7,200 355
Mead Corp. ................................................... 1,400 39
Potlatch Corp. ............................................... 300 13
Temple-Inland, Inc. .......................................... 700 37
Union Camp Corp. ............................................. 900 48
Westvaco Corp. ............................................... 1,500 47
Weyerhaeuser Co. ............................................. 2,700 132
Willamette Industries, Inc. .................................. 1,500 48
--------
1,150
Photography and Related Services-0.3%
Bemis Company, Inc. .......................................... 700 31
Eastman Kodak Co. ............................................ 4,200 255
Polaroid Corp. ............................................... 600 29
--------
315
Pollution Control Equipment and Services-0.1%
Browning-Ferris Industries, Inc. ............................. 2,500 93
Safety Kleen Corp. ........................................... 800 22
--------
115
Printing-0.1%
Deluxe Corp. ................................................. 1,000 35
R.R. Donnelley & Sons Co. .................................... 1,900 71
--------
106
Publications-0.1%
Times Mirror Co. - Cl. A...................................... 1,200 74
Real Estate Development-0.0%
Centex Corp. ................................................. 400 25
Real Estate Operations-0.0%
Pulte Corp. .................................................. 200 8
Retail-4.6%
American Stores Co. .......................................... 3,400 70
AutoZone, Inc.*............................................... 2,000 58
Charming Shoppes, Inc.*....................................... 1,000 5
Circuit City Stores, Inc. .................................... 1,200 43
Costco Cos., Inc.*............................................ 2,800 125
Dayton-Hudson Corp. .......................................... 2,800 189
Dillard's, Inc. .............................................. 1,400 49
Federated Department Stores, Inc.*............................ 2,700 116
Gap, Inc. .................................................... 5,400 191
Harcourt General, Inc. ....................................... 900 49
Hasbro, Inc. ................................................. 1,550 49
Home Depot, Inc. ............................................. 9,500 559
J.C. Penney, Inc. ............................................ 3,300 199
</TABLE>
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Retail-Continued
Kmart Corp.*................................................... 6,400 $ 74
Kroger Co.*.................................................... 3,300 122
Limited, Inc. ................................................. 3,500 89
Liz Claiborne, Inc. ........................................... 900 38
Longs Drug Stores, Inc. ....................................... 400 13
Lowe's Cos., Inc. ............................................. 2,300 110
May Department Stores Co. ..................................... 3,000 158
Mercantile Stores Co., Inc. ................................... 500 30
Nike, Inc. - Cl. B............................................. 3,800 149
Nordstrom, Inc. ............................................... 1,000 60
Pep Boys - Manny, Moe & Jack................................... 700 17
Rite Aid Corp. ................................................ 1,600 94
Sears Roebuck & Co. ........................................... 5,200 235
Tandy Corp. ................................................... 1,400 54
TJX Cos., Inc. ................................................ 2,200 76
Toys "R" Us, Inc.*............................................. 3,800 119
Wal-Mart Stores, Inc. ......................................... 29,400 1,159
Walgreen Co. .................................................. 6,400 201
Winn-Dixie Stores, Inc. ....................................... 1,900 83
Woolworth Corp.*............................................... 1,600 33
-------
4,616
Soap, Cosmetics and Personal Care-0.1%
Alberto-Culver Co. ............................................ 700 22
International Flavors & Fragrances, Inc. ...................... 1,400 72
-------
94
Telecommunications-1.4%
Airtouch Communications, Inc.*................................. 6,600 274
Andrew Corp.*.................................................. 1,050 25
DSC Communications Corp.*...................................... 1,500 36
Lucent Technologies, Inc. ..................................... 8,400 671
Northern Telecom, Ltd. ........................................ 3,400 303
Scientific-Atlanta, Inc. ...................................... 1,100 18
Tellabs, Inc.*................................................. 2,400 127
-------
1,454
Textiles-0.1%
Fruit of the Loom, Inc. - Cl. A*............................... 1,000 26
Russell Corp. ................................................. 500 13
Springs Industries, Inc. ...................................... 200 10
VF Corp. ...................................................... 1,600 74
-------
123
Transportation-1.3%
AMR Corp.*..................................................... 1,200 154
Burlington Northern Santa Fe................................... 2,000 186
Caliber System, Inc. .......................................... 500 24
CSX Corp. ..................................................... 2,800 151
Delta Air Lines, Inc. ......................................... 1,000 119
Federal Express Corp. ......................................... 1,500 92
Laidlaw, Inc. ................................................. 4,400 60
Norfolk Southern Corp. ........................................ 4,900 151
Southwest Airlines Co. ........................................ 2,900 71
U.S. Airways Group, Inc.*...................................... 1,200 75
Union Pacific Corp. ........................................... 3,200 200
-------
1,283
</TABLE>
84
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
EQUITY INDEX PORTFOLIO
<TABLE>
<CAPTION>
Market
Name of Issuer Shares Value
(000's)
<S> <C> <C>
COMMON STOCK-Continued
Utilities - Electric-2.7%
American Electric Power Co. .................................. 2,500 $ 129
Baltimore Gas & Electric Co. ................................. 2,000 68
Carolina Power & Light Co. ................................... 2,000 85
Central & South West Corp. ................................... 2,900 78
CINergy Corp. ................................................ 2,000 77
Consolidated Edison Co. of New York, Inc. .................... 3,100 127
Dominion Resources, Inc. ..................................... 2,500 106
DTE Energy Co. ............................................... 1,900 66
Duke Energy Co. .............................................. 4,644 257
Edison International.......................................... 5,000 136
Entergy Corp. ................................................ 3,200 96
Firstenergy Corp.*............................................ 2,900 84
FPL Group, Inc. .............................................. 2,400 142
GPU, Inc. .................................................... 1,500 63
Houston Industries, Inc. ..................................... 3,824 102
Niagara Mohawk Power Corp.*................................... 1,700 18
Northern States Power Co. .................................... 1,000 58
PacifiCorp.................................................... 3,800 104
Peco Energy Co. .............................................. 2,900 70
PG & E Corp. ................................................. 5,700 173
PP & L Resources, Inc. ....................................... 2,300 55
Public Services Enterprise Group, Inc. ....................... 3,100 98
Southern Co. ................................................. 8,900 230
Texas Utilities Co. .......................................... 3,312 138
Unicom Corp. ................................................. 2,800 86
Union Electric Co. ........................................... 1,700 74
--------
2,720
Utilities - Gas-0.1%
NICOR, Inc. .................................................. 600 25
Pacific Enterprises........................................... 1,100 41
Peoples Energy Corp. ......................................... 500 20
--------
86
Utilities - Telecommunications-6.4%
Alltel Corp. ................................................. 2,500 103
Ameritech Corp. .............................................. 7,100 572
AT & T Corp. ................................................. 21,200 1,299
Bell Atlantic Corp. .......................................... 10,118 921
BellSouth Corp. .............................................. 13,000 732
GTE Corp. .................................................... 12,500 653
MCI Communications Corp. ..................................... 9,100 390
SBC Communications, Inc. ..................................... 11,924 873
Sprint Corp. ................................................. 5,700 334
U.S. West Communications Group................................ 6,300 284
Worldcom, Inc.*............................................... 11,900 360
--------
6,521
--------
TOTAL COMMON STOCK- 99.7% 101,117
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
SHORT-TERM INVESTMENTS-0.2%
US Treasury Bill
5.14% due 3/5/98............................................ 200 $ 198
------ --------
TOTAL INVESTMENTS- 99.9% 101,315
Cash and receivables, less payables- 0.1% 75
------ --------
NET ASSETS- 100.0% $101,390
====== ========
</TABLE>
* Non-income producing security.
ADR-American Depository Receipt
See notes to financial statements
85
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
STRATEGIC BOND PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS
Banks and Finance-10.5%
Banco do Brasil - Debs. 144A(a) (BR)
9.00% due 8/05/98........................................... $ 300 $ 301
BankBoston Capital Trust II - Gtd. Bonds (US)
7.75% due 12/15/26........................................... 300 306
Conversion (GB)
9.50 due 3/15/05............................................ 650 1,254
Export Import Bank Korea (US)
7.10% due 3/15/07........................................... 170 139
KeyCorp - Sub. Notes (US)
6.75% due 3/15/06........................................... 500 506
Midland Bank plc - Sub. Notes (GB)
7.625% due 6/15/06.......................................... 500 536
-------
3,042
Financial Services-20.8%
Countrywide Home Loans - Ser. 1997-4 Cl. A (US)
8.00% due 7/25/27............................................ 581 596
CS First Boston Mortgage Securities Corp. -Ser. 1997-C1 Cl.
A1B (US)
7.15% due 8/20/06............................................ 700 728
Eaglemark Credit - Asset Bkd. - Ser. 96-2A (US)
6.75% due 11/15/02........................................... 255 257
First Union Lehman Brothers Mortgage Trust
6.65% due 6/18/08............................................ 1,000 1,007
Green Tree Financial Corp. (US)
6.39% due 1/15/29............................................ 1,000 1,008
Mexico United Mexican Sts (MX)
11.50% due 5/15/26........................................... 25 30
Morgan Stanley Capital, Inc. (US)
6.59% due 6/18/29............................................ 996 1,006
Merrill Lynch Mortgage Investors, Inc. (US)
6.95% due 6/18/29............................................ 486 498
Nationwide Financial Services, Inc. - Sr. Notes (US)
8.00% due 3/01/27............................................ 500 527
Onyx Acceptance Grantor Trust - Ser. 1996-2 Cl. A (US)
6.40% due 10/15/01........................................... 190 191
Washington Mutual Capital I (US)
8.375% due 6/01/27........................................... 100 109
-------
5,957
Foreign Governmental-19.6%
Argentina Republic of (AR)
9.75% due 9/19/27............................................ 150 143
Australian Government - Bonds (AU)
6.75% due 11/15/06........................................... 200 137
12.00% due 11/15/01.......................................... 450 358
Finland Government - Bonds (FI)
7.25% due 4/18/06............................................ 1,000 206
Government of Canada - Debs. (CA)
9.00% due 6/01/25............................................ 100 99
Government of Japan - Bonds (JP)
5.50% due 3/20/02............................................ 60,000 542
3.00% due 9/20/05............................................ 105,000 878
Government of Spain - Bonds (ES)
8.80% due 4/30/06............................................ 12,000 96
</TABLE>
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
Foreign Governmental-Continued
Government of Venezuela - Bonds (VE)
9.25% due 9/15/27............................................ 70 63
6.813% due 12/18/07.......................................... 238 213
Kingdom of Belgium - Debs. (VE)
7.75% due 12/22/00........................................... $ 5,800 $ 170
Province of Quebec - Debs. (CA)
6.50% due 1/17/06............................................ 515 517
Republic of Poland - Bonds (PL)
4.00% due 10/27/14........................................... 150 130
Swedish Government - Debs. (SE)
13.00% due 6/15/01........................................... 700 108
6.50% due 10/25/06........................................... 1,100 144
Treuhandanstalt - Bonds (DE)
7.50% due 9/09/04............................................ 550 346
UK Treasury - Bonds (UK)
8.00% due 6/10/03............................................ 92 161
6.75% due 11/26/04........................................... 270 452
7.75% due 9/08/06............................................ 225 402
7.50% due 12/07/06........................................... 260 459
-------
5,624
Government Agencies-16.4%
Federal Home Loan Mortgage Corp. (US)
8.00% due 2/01/27............................................ 281 291
6.50% due 2/15/19............................................ 1,000 992
Federal National Mortgage Assoc. (US)
9.00% due 6/15/16............................................ 61 67
9.00% due 12/15/16........................................... 525 572
8.00% due 6/01/11............................................ 249 257
8.00% due 12/01/26........................................... 454 471
7.50% due 6/15/26............................................ 466 477
7.50% due 8/15/27............................................ 483 495
7.50% due 1/15/27............................................ 101 103
7.50% due 7/20/26............................................ 558 570
7.00% due 2/01/27............................................ 385 389
-------
4,684
Media-0.5%
TCI Communications, Inc. - Debs. (US)
7.875% due 2/15/26........................................... 140 150
Metals and Mining-0.6%
Oregon Steel Mills, Inc. - 1st Mtge. Notes (US)
11.00% due 6/15/03........................................... 50 54
Ryderson Tull, Inc. - Notes (US)
9.125% due 7/15/06........................................... 100 108
-------
162
Miscellaneous-0.4%
Allied Waste NA - Bonds (US)
10.25% due 12/01/06.......................................... 100 110
Telecommunications-0.3%
Comtel Brasileira, Ltd. - Notes 144A (US)(a)
10.75% due 9/26/04........................................... 100 98
</TABLE>
86
<PAGE>
SCHEDULE OF INVESTMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
STRATEGIC BOND PORTFOLIO
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
(000's) (000's)
<S> <C> <C>
PUBLICLY-TRADED BONDS-Continued
U.S. Governmental-19.2%
U.S. Treasury - Bonds (US)
6.75% due 8/15/26............................................. $ 1,390 $ 1,530
6.50% due 11/15/26............................................ 235 251
U.S. Treasury - Notes (US)
5.875% due 2/15/00............................................ 385 387
6.875% due 5/15/06............................................ 1,090 1,166
U.S. Treasury - Notes (US)
6.625% due 6/30/01............................................ 2,100 2,158
-------
5,492
Utilities-Electric-3.4%
National Rural Utilities - Bonds (US)
7.30% due 9/15/06............................................. 500 531
Niagara Mohawk Power Corp. - 1st Mtge. Bonds (US)
7.375% due 8/01/03............................................ 100 102
Southern California Edison Co. - 1st Ref. Mtge. Bonds (US)
7.125% due 7/15/25............................................ 325 333
-------
966
Utilities-Telecommunications-0.4%
Philippine Long Distance Telephone Co. -Debs. (US)
10.625% due 6/02/04........................................... 100 103
-------
TOTAL PUBLICLY-TRADED BONDS- 92.1% 26,388
SHORT-TERM INVESTMENTS-3.0%
Investment in joint trading account
(Note B) (US)
6.243% due 1/01/98............................................ 864 864
------- -------
TOTAL INVESTMENTS- 95.1% 27,252
Cash and receivables, less payables- 4.9% 1,395
------- -------
NET ASSETS- 100.0% $28,647
======= =======
</TABLE>
(a) Pursuant to Rule 144A under the Securities Act of 1933, these securities
may be resold in transactions exempt from registration, normally to
qualified institutional buyers. At December 31, 1997, these securities
aggregated $399 or 1.4% of the net assets of the Portfolio.
See notes to financial statements.
SUMMARY OF LONG-TERM SECURITIES BY COUNTRY
<TABLE>
<CAPTION>
Market % of
Country Value Long-Term
Country Abbreviation (000's) Investments
<S> <C> <C> <C>
UNITED STATES.................................. US $19,179 72.7%
GERMANY........................................ DE 1,820 6.9%
JAPAN.......................................... JP 1,420 5.4%
UNITED KINGDOM................................. GB 1,254 4.6%
CANADA......................................... CA 616 2.3%
AUSTRALIA...................................... AU 495 1.9%
BRAZIL......................................... BR 301 1.1%
VENEZUELA...................................... VE 276 1.0%
SWEDEN......................................... SE 252 1.0%
FINLAND........................................ FI 206 0.8%
BELGIUM........................................ BE 170 0.6%
ARGENTINA...................................... AR 143 0.5%
POLAND......................................... PL 130 0.5%
SPAIN.......................................... ES 96 0.4%
MEXICO......................................... MX 30 0.1%
------- -----
$26,388 100.0%
======= =====
</TABLE>
87
<PAGE>
NOTES TO FINANCIAL STATEMENTS
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- -------------------------------------------------------------------------------
(000's Omitted)
NOTE A--ORGANIZATION
The John Hancock Variable Series Trust I (the "Fund") is a diversified open-
end management investment company registered under the Investment Company Act
of 1940, as amended. The Fund is organized as a Massachusetts business trust.
The Fund consists of eighteen portfolios: Large Cap Growth, Sovereign Bond,
International Equities, Small Cap Growth, International Balanced, Mid Cap
Growth, Large Cap Value, Money Market, Mid Cap Value, Special Opportunities,
Real Estate Equity, Growth & Income, Managed, Short-Term U.S. Government,
Small Cap Value, International Opportunities, Equity Index, and Strategic
Bond. The Fund may add or delete portfolios in the future to accommodate
various investment objectives. The Fund has issued shares of beneficial
interest exclusively to John Hancock Variable Life Account U ("JHVLAU"), John
Hancock Variable Life Account V ("JHVLAV"), John Hancock Variable Life Account
S ("JHVLAS"), and John Hancock Variable Annuity Account I ("JHVAAI") to fund
policies and contracts issued by the John Hancock Variable Life Insurance
Company ("JHVLICO"), and to John Hancock Variable Annuity Account U
("JHVAAU"), John Hancock Variable Annuity Account V ("JHVAAV"), and John
Hancock Mutual Variable Life Insurance Account UV ("JHMVLAUV") to fund
contracts and policies issued by John Hancock Mutual Insurance Company ("John
Hancock").
NOTE B--ACCOUNTING POLICIES
Estimates: The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Valuation of Investments: For the Large Cap Growth, Small Cap Growth, Mid
Cap Growth, Large Cap Value, Mid Cap Value, Special Opportunities, Real Estate
Equity, Growth & Income, Managed, Small Cap Value, and Equity Index
Portfolios: Common stocks and other such securities traded on national
securities exchanges are normally valued on the basis of closing prices.
Securities traded in the over-the-counter market and securities with no sales
on the day of valuation are normally valued at their last available bid price.
For the Sovereign Bond, Managed, Short-Term U.S. Government, and Strategic
Bond Portfolios: Debt investment securities having a primary market over-the-
counter are valued on the basis of valuations furnished by a pricing service
which determines valuations for normal institutional size trading units of
debt securities, without exclusive reliance upon quoted prices.
For the Money Market Portfolio: The Board of Trustees has determined that
the appropriate method for valuing Portfolio securities is amortized cost, so
long as the average weighted maturity of money market instruments comprising
the Portfolio does not exceed 90 days. Accordingly, Portfolio securities are
valued at amortized cost which approximates market value. The amortized cost
method involves valuing a security at its cost on the date of purchase and
thereafter assuming a constant amortization to maturity of the difference
between the principal amount due at maturity and the cost of the security to
the Portfolio.
For each of the Portfolios, short-term investments, with a maturity not to
exceed 60 days, are valued at amortized cost which approximates market value.
For the International Portfolios: Investments in securities traded on
national securities exchanges in the United States or on equivalent foreign
exchanges are normally valued at the last quoted sales price on such exchanges
as of the close of business on the date of which assets are valued. Securities
traded in the over-the-counter market and securities traded with no sales on
the day of valuation are normally valued at their last available bid price.
All Portfolio securities initially expressed in terms of foreign currencies
have been translated into U.S. dollars as described in "Currency Translation."
Investment securities for which no current market quotations are readily
available, including certain foreign securities, when held by the Portfolios,
are valued at fair value as determined in good faith by the Board of Trustees.
Investment security transactions are recorded on the date of purchase or
sale. Dividend income is recorded on the ex-dividend date and interest income
is recorded on the accrual basis. Dividend income for the Large Cap Growth,
88
<PAGE>
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- -------------------------------------------------------------------------------
(000's Omitted)
NOTE B--ACCOUNTING POLICIES--Continued
International Equities, International Balanced, Mid Cap Growth, Large Cap
Value, Mid Cap Value, Special Opportunities, Growth & Income, Managed,
International Opportunities, Equity Index and Strategic Bond Portfolios are
shown net of foreign taxes withheld of $65, $293, $50, $3, $9, $1, $10, $351,
$115, $49, $5, and $9, respectively. Realized gains and losses from security
transactions are determined on the basis of identified cost.
Repurchase Agreements: The Portfolios of the Fund may enter into repurchase
agreements which are contracts under which a Portfolio would acquire a
security for a relatively short period (usually not more than 7 days) subject
to the obligation of the seller to repurchase and the Portfolio to resell such
security at a fixed time and price (representing the Portfolio's cost plus
interest). A Portfolio will enter into repurchase agreements only with member
banks of the Federal Reserve System and with "primary dealers" in United
States government securities. The underlying securities, which represent the
collateral of the agreement, must be marked to market daily to ensure that
each repurchase agreement is fully collateralized at all times. A Portfolio
will not invest more than 10% of its net assets in repurchase agreements
maturing in more than 7 days.
Joint Repurchase Agreements: The Small Cap Growth, International Equity and
Special Opportunities Portfolios of the Fund, along with other registered
investment companies having a management contract with John Hancock Advisers,
Inc. (the "Sub-Adviser"), an indirect wholly-owned subsidiary of John Hancock,
may participate in a joint repurchase agreement pursuant to an exemptive order
issued by the Securities and Exchange Commission. 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. These government
securities have an aggregate market value of $97,485 with maturity dates
ranging from 2/15/15 through 2/15/16. The Fund's custodian bank receives
delivery of the underlying securities for the joint account on the Fund's
behalf. The Sub-Adviser is responsible for ensuring that the agreement is
fully collateralized at all times.
Joint Trading Account: Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission, the order permits the existing Portfolios
of the Fund to pool daily uninvested cash balances, together with the balances
of any future portfolios of the Fund, into a joint account for the purpose of
investing the cash balances in short-term repurchase agreements, commercial
paper and other short-term investments which in no event will have a maturity
in excess of seven days. Joint Trading Account holdings as of December 31,
1997:
<TABLE>
<CAPTION>
Par Market
Name of Issuer Value Value
-------------- -------- --------
<S> <C> <C>
BMW US Capital Corp.
6.25% due 01/02/98.......................................... $ 30,000 $ 29,995
Household Finance Corp.
6.10% due 01/02/98.......................................... 6,009 6,008
SBC Communications, Inc.
6.60% due 01/02/98.......................................... 13,017 13,015
Alpine Securitization Corp.
6.40% due 01/05/98.......................................... 17,272 17,260
Deutsche Bank Financial Corp.
6.20% due 01/05/98.......................................... 40,000 39,972
General Motors Acceptance Corp.
6.19% due 01/05/98.......................................... 40,000 39,972
Chrysler Financial Corp.
6.02% due 01/06/98.......................................... 29,042 29,018
-------- --------
Joint Trading Account Totals................................ $175,340 $175,240
======== ========
</TABLE>
Financial Future Contracts: The Sovereign Bond, Special Opportunities,
Managed, Short-Term U.S. Government, Large Cap Growth, Large Cap Value, Mid
Cap Growth, Mid Cap Value, Small Cap Growth, Small Cap Value, Strategic Bond,
International Opportunities, International Balanced and Equity Index
Portfolios may buy and sell financial futures contracts to hedge against the
effects of fluctuations in interest rates and other market conditions. At the
time the Portfolio 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." Each day, the futures
contract is
89
<PAGE>
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- -------------------------------------------------------------------------------
(000's Omitted)
NOTE B--ACCOUNTING POLICIES--Continued
valued at the official settlement price of the board of trade or U.S.
commodities exchange. Daily variation margin adjustments, arising from this
"mark to market," are recorded by the Portfolios as unrealized gains or
losses.
When the contracts are closed, the portfolio recognizes a gain or a loss.
Risk 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 portfolio 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. At December 31, 1997, the
Equity Index Portfolio had a payable for futures variation margin of $1. There
were no other positions in financial futures contracts.
Forward Foreign Currency Contracts: The Fund may use foreign currency
contracts to facilitate transactions in foreign securities and to manage the
Portfolio's currency exposure. Contracts to buy generally are used to acquire
exposure to foreign currencies, while contracts to sell are used to hedge the
Portfolio's investments against currency fluctuations. Neither type of foreign
currency transaction will eliminate fluctuations in the prices of the
Portfolio's securities or prevent loss if the price of such securities should
decline. The U.S. dollar value of a forward foreign currency contract is
determined using forward exchange rates supplied by a quotation service.
Realized gain (loss) on the purchases and sales of forward foreign currency
contracts is recognized on settlement date.
Currency Translation: For Portfolios that trade in international securities:
all assets or liabilities initially expressed in terms of foreign currencies
are translated into U.S. dollars based on London currency exchange quotations
as of 5:00 p.m., London time, on the date of any determination of the net
asset value of the Fund. Unrealized exchange adjustments are included in
unrealized appreciation (depreciation) of investments. Transactions affecting
statement of operations accounts and net realized gain (loss) on investments
are translated at the rates prevailing at the dates of transactions.
Reported net realized gains and losses on foreign currency transactions
represent net gains and losses from sales and maturities of forward foreign
currency contracts, disposition of foreign currencies, currency gains and
losses realized between trade and settlement dates of security transactions,
and the difference between the amounts of net investment income accrued and
the U.S. dollar amount actually received.
Dividends: A dividend of its net investment income will be declared and
distributed daily by the Money Market Portfolio. Dividends of net investment
income will be declared and distributed monthly by all other Portfolios. Each
Portfolio will distribute all of its net realized capital gains annually, at
the end of its fiscal year.
Federal Income Taxes: Each of the Portfolios of the Fund intends to comply
with the requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its taxable income
to shareholders. Therefore, no federal income tax provision is required.
As of December 31, 1997, the Fund had approximate net tax basis capital loss
carryforwards, which may be applied against any net taxable gains, as follows:
The Small Cap Growth Portfolio had $923 which expires in 2004 and $964 which
expires in 2005, Mid Cap Growth had $315 which expires in 2004 and $85 which
expires in 2005.
Expenses: Expenses directly attributable to a Portfolio are charged to that
Portfolio. Expenses not directly attributed to a Portfolio are allocated on
the basis of relative net assets.
NOTE C--INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
On February 18, 1997, the Fund renewed its Investment Advisory Agreement
with John Hancock. Also, on May 1, 1997 the Fund again renewed its Investment
Advisory Agreement for Equity Index and Short-Term U.S. Government Portfolios
with John Hancock. For its services, John Hancock receives monthly
compensation at the following rates:
For the Growth & Income, Sovereign Bond and Money Market Portfolios,
0.25% on an annual basis of the net assets of each Portfolio;
90
<PAGE>
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- -------------------------------------------------------------------------------
(000's Omitted)
NOTE C--INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES--
Continued
For the Large Cap Growth and Managed Portfolios, 0.40% on an annual basis
of the first $500,000 of the net assets of each Portfolio; 0.35% for net
assets between $500,000 and $1,000,000; and 0.30% for that portion in
excess of $1,000,000.
For the Real Estate Equity Portfolio, 0.60% on an annual basis of the
first $300,000 of the Portfolio's net assets, 0.50% for the net assets
between $300,000 and $800,000; and 0.40% for net assets in excess of
$800,000.
For the International Equity Portfolio, 0.60% on an annual basis of the
first $250,000 of the Portfolio's net assets; 0.55% for net assets between
$250,000 and $500,000; and 0.50% for net assets in excess of $500,000.
For the Special Opportunities Portfolio, 0.75% on an annual basis of the
first $250,000 of the Portfolio's net assets; 0.70% for net assets between
$250,000 and $500,000; and 0.65% for net assets in excess of $500,000.
For the Short-Term U.S. Government Portfolio, 0.30% on an annual basis of
its net assets;.
For the Large Cap Value and Small Cap Growth Portfolios, 0.75% on an
annual basis of the average daily net assets of each Portfolio;
For the Mid Cap Growth Portfolio, 0.85% on an annual basis of the first
$100,000 of the Portfolio's net assets; and 0.80% on an annual basis of the
portion in excess of $100,000;
For the Mid Cap Value Portfolio, 0.80% on an annual basis of the first
$250,000 of the Portfolio's net assets; 0.775% for net assets between
$250,000 and $500,000; and 0.75% for net assets between $500,000 and
$750,000, and 0.725% for net assets in excess of $750,000;
For the Equity Index Portfolio, 0.20% on an annual basis of the first
$75,000 of the Portfolio's net assets; 0.19% for net assets between $75,000
and $125,000; and 0.18% for the net assets in excess of $125,000;
For the Small Cap Value Portfolio, 0.80% on an annual basis of the first
$100,000 of the Portfolio's net assets; 0.75% for net assets between
$100,000 and $200,000; and 0.65% for net assets in excess of $200,000;
For the Strategic Bond Portfolio, 0.75% on an annual basis of the first
$25,000 of the Portfolio's net assets; 0.65% for net assets between $25,000
and $75,000; 0.55% for net assets between $75,000 and 150,000; and 0.50%
for the net assets in excess of $150,000;
For the International Opportunities Portfolio, 1.00% on an annual basis
of the first $20,000 of the Portfolio's net assets; 0.85% for net assets
between $20,000 and $50,000; and 0.75% for net assets in excess of $50,000;
and
For the International Balanced Portfolio, 0.85% on an annual basis of the
first $100,000 of the Portfolio's net assets; 0.70% for the net assets in
excess of $100,000.
John Hancock voluntarily reimbursed and/or waived all investment advisory
and other fund expenses of the Equity Index Portfolio for the year ended
December 31, 1997. The Investment Adviser expects to voluntary waive all
investment advisory and other fund expenses during the Fund's fiscal 1998 year
with respect to the Equity Index Portfolio. Such expense waiver is subject to
termination at any time by the Investment Adviser without notice to
shareholders. Upon termination of the voluntary expense waiver with respect to
the Equity Index Portfolio, any future expense reimbursement by the Investment
Adviser is subject to limitations as stated in the Investment Advisory
agreement.
During the year ended December 31, 1997, the Investment Adviser voluntarily
contributed approximately $250 to the Equity Index Portfolio. John Hancock
received no shares of capital stock or other consideration in exchange for the
contribution which increased the Portfolio's net asset value.
John Hancock has entered into Sub-Advisory Agreements with Independence
Investment Associates with respect to the Large Cap Growth, Managed, Real
Estate Equity, and Short-Term U.S. Government Portfolios, Inc.; with John
91
<PAGE>
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- -------------------------------------------------------------------------------
(000's Omitted)
NOTE C--INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES--
Continued
Hancock Advisers, Inc., with respect to the Sovereign Bond, Small Cap Growth,
International Equities, and Special Opportunities Portfolios, each of whom is
an affiliate of John Hancock, and under the supervision of John Hancock, is
responsible for the day-to-day investment management of each of the
Portfolios. John Hancock maintains responsibility for the day-to-day
management of the Money Market Portfolio.
John Hancock has also entered into Sub-Advisory Agreements with T. Rowe
Price Associates, Inc., with respect to the Large Cap Value Portfolio; with
Rowe Price-Fleming International, with respect to the International
Opportunities Portfolio; with Janus Capital Corporation, with respect to the
Mid Cap Growth Portfolio; with Neuberger & Berman Management, L.P., with
respect to the Mid Cap Value Portfolio; with INVESCO Management Research, with
respect to the Small Cap Value Portfolio; with J.P. Morgan Investment
Management Inc., with respect to the Strategic Bond Portfolio; with Brinson
Partners, Inc., with respect to the International Balanced Portfolio; and with
State Street Global Advisers with respect to the Equity Index Portfolio, each
of whom under the supervision of John Hancock, is responsible for the day-to-
day investment management of each of the Portfolios.
John Hancock is the principal underwriter and transfer agent of the Fund.
Certain officers and trustees of the Fund are officers and directors of
JHVLICO, JHVLAU, JHVLAV, JHVLAS, JHVAAI, JHMVLAUV, JHVAAV, and JHVAAU, and
some are also officers of John Hancock. Fees for independent trustees are paid
by the Fund.
In the event that normal operating expenses of each Portfolio, exclusive of
investment advisory fees, taxes, interest, brokerage commissions and
extraordinary expenses, shall exceed 0.25% of each Portfolio's daily net asset
value, John Hancock and JHVLICO will reimburse each Portfolio for such excess.
Accordingly, for the year ended December 31, 1997, the reimbursement paid from
John Hancock and JHVLICO were $38 to Small Cap Growth, $116 to International
Balanced, $85 to Mid Cap Growth, $25 to Large Cap Value, $30 to Mid Cap Value,
$58 to Small Cap Value, $86 to International Opportunities, $217 to Equity
Index, and $60 to Strategic Bond Portfolios.
NOTE D--INVESTMENT TRANSACTIONS
Purchases and proceeds from sales and maturities of investments excluding
short-term securities for each Portfolio for the period ended December 31,
1997 were as follows:
<TABLE>
<CAPTION>
Sales and
Purchases Maturities
---------- ----------
<S> <C> <C>
Large Cap Growth......................................... $ 605,278 $ 531,713
Sovereign Bond........................................... 1,043,716 966,088
International Equities................................... 146,502 138,099
Small Cap Growth......................................... 52,130 26,833
International Balanced................................... 22,138 19,258
Mid Cap Growth........................................... 48,290 30,701
Large Cap Value.......................................... 47,168 7,548
Money Market............................................. None None
Mid Cap Value............................................ 68,909 26,610
Special Opportunities.................................... 655,191 647,121
Real Estate Equity....................................... 67,797 34,091
Growth & Income.......................................... 1,870,317 1,769,833
Managed.................................................. 5,184,924 5,068,366
Short-Term U.S. Government............................... 62,066 70,504
Small Cap Value.......................................... 52,004 27,057
International Opportunities.............................. 18,442 4,797
Equity Index............................................. 109,505 34,283
Strategic Bond........................................... 27,687 12,085
</TABLE>
92
<PAGE>
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- -------------------------------------------------------------------------------
(000's Omitted)
NOTE D--INVESTMENT TRANSACTIONS--Continued
The identified cost of investments owned for each portfolio (including
earned discount on corporate short-term notes, and commercial paper) and their
respective gross unrealized appreciation and depreciation at December 31, 1997
for federal income tax purposes are as follows:
<TABLE>
<CAPTION>
Identified Unrealized Unrealized Appreciation/
Portfolio Cost Appreciation Depreciation (Depreciation)
- --------- ---------- ------------ ------------ --------------
<S> <C> <C> <C> <C>
Large Cap Growth........... $ 602,255 $166,565 $(15,756) $150,809
Sovereign Bond............. 788,017 27,506 (4,744) 22,761
International Equities..... 145,168 15,371 (12,166) 3,205
Small Cap Growth........... 42,151 9,287 (2,655) 6,632
International Balanced..... 24,613 2,466 (2,094) 372
Mid Cap Growth............. 34,116 6,679 (491) 6,188
Large Cap Value............ 64,057 9,527 (464) 9,063
Money Market............... 227,364 None None None
Mid Cap Value.............. 61,323 5,537 (2,299) 3,238
Special Opportunities...... 194,464 17,986 (3,976) 14,010
Real Estate Equity......... 157,191 46,817 (588) 46,229
Growth & Income............ 2,150,778 650,915 (20,179) 630,736
Managed.................... 2,421,540 362,765 -- 362,765
Short-Term U.S. Government. 50,506 305 (323) (18)
Small Cap Value............ 41,016 3,686 (1,709) 1,977
International
Opportunities............. 29,161 3,454 (3,222) 232
Equity Index............... 89,807 13,122 (1,612) 11,510
Strategic Bond............. 26,817 698 (263) 435
</TABLE>
During the year ended December 31, 1997, reclassifications have been made in
each Portfolio's capital accounts to report these balances on a tax basis,
excluding certain temporary differences, as of December 31, 1997. These
permanent reclassifications are primarily attributable to differences in the
treatment of foreign currency gain and losses under federal tax rules versus
generally accepted accounting principles. Net assets were not affected by
these reclassifications.
93
<PAGE>
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
(000's Omitted)
NOTE E--FORWARD FOREIGN CURRENCY CONTRACTS
As of December 31, 1997 the International Balanced, Mid Cap Growth and
Strategic Bond Portfolios had open forward foreign currency contracts which
contractually obligate the Portfolio to deliver or receive currencies at a
specified date, as follows:
INTERNATIONAL BALANCED PORTFOLIO
<TABLE>
<CAPTION>
Net Unrealized
Maturity Appreciation/
Currency Sold Date Cost Value (Depreciation)
------------------------------------------------ ------ ------ --------------
<S> <C> <C> <C> <C> <C>
Australian Dollar............. $ 1,500 04/28/98 $1,027 $ 980 $ 47
Belgian Franc................. 14,900 04/28/98 425 405 20
Canadian Dollar............... 1,400 04/28/98 1,000 983 17
Deutsch Mark.................. 2,800 04/28/98 1,645 1,567 78
Danish Krone.................. 6,600 04/28/98 1,018 969 49
Spanish Peseta................ 83,000 04/28/98 569 547 22
Pound Sterling................ 1,300 04/28/98 2,171 2,123 48
Hong Kong Dollar.............. 1,000 01/27/98 129 129 0
Netherlands Guilder........... 1,100 04/28/98 573 546 27
Swedish Krona................. 2,500 04/28/98 324 316 8
Singapore Dollar.............. 200 04/28/98 125 117 8
-----
324
<CAPTION>
Currency Purchased
----------------------------------------
<S> <C> <C> <C> <C> <C>
Australian Schilling.......... 2,300 04/28/98 192 183 (9)
Belgian Franc................. 14,900 04/28/98 421 405 (16)
Canadian Dollar............... 600 04/28/98 424 421 (3)
Swiss Franc................... 700 04/28/98 508 486 (22)
Deutsch Mark.................. 160 04/28/98 93 89 (4)
Danish Krone.................. 300 04/28/98 46 44 (2)
Spanish Peseta................ 27,000 04/28/98 186 178 (8)
French Franc.................. 5,300 04/28/98 928 886 (42)
Italian Lira.................. 530,000 04/28/98 312 300 (12)
Japanese Yen.................. 421,000 04/28/98 3,582 3,281 (301)
Netherlands Guilder........... 140 04/28/98 72 69 (3)
Swedish Krona................. 2,500 04/28/98 335 316 (19)
-----
(441)
-----
(117)
=====
</TABLE>
MID CAP GROWTH
<TABLE>
<CAPTION>
Net Unrealized
Maturity Appreciation
Currency Sold Date Cost Value (Depreciation)
------------------------------------------------ ------ ------ --------------
<S> <C> <C> <C> <C> <C>
Pound Sterling..................... 225 02/19/98 355 368 (13)
Pound Sterling..................... 25 02/19/98 39 42 (3)
Pound Sterling..................... 400 02/25/98 631 675 (44)
Pound Sterling..................... 600 02/26/98 1,000 983 17
Pound Sterling..................... 500 03/04/98 799 819 (20)
Pound Sterling..................... 75 03/04/98 120 127 (7)
Pound Sterling..................... 650 05/06/98 1,089 1,061 28
----
$(42)
====
</TABLE>
94
<PAGE>
NOTES TO FINANCIAL STATEMENTS--Continued
JOHN HANCOCK VARIABLE SERIES TRUST I
December 31, 1997
- --------------------------------------------------------------------------------
(000's Omitted)
NOTE E--FORWARD FOREIGN CURRENCY CONTRACTS--Continued
STRATEGIC BOND PORTFOLIO
<TABLE>
<CAPTION>
Net Unrealized
Maturity Appreciation/
Currency Sold Date Cost Value (Depreciation)
------------------------------------------------ ------ ------ --------------
<S> <C> <C> <C> <C> <C>
Australian Dollar........... $ 755 02/24/98 $ 522 $ 493 $ 29
Belgian Franc............... 6,400 03/04/97 176 173 3
Deutsch Mark................ 625 03/18/98 352 349 3
Spanish Peseta.............. 14,600 01/09/98 98 96 2
Finnish Markka.............. 1,100 03/17/98 207 203 4
Italian Lira................ 2,000,000 01/12/98 1,156 1,149 7
Pound Sterling.............. 900 03/04/98 1,508 1,473 35
Pound Sterling.............. 776 03/16/98 1,274 1,270 4
Japanese Yen................ 165,000 02/20/98 1,327 1,273 54
Japanese Yen................ 22,600 03/18/98 175 175 0
Swedish Krone............... 2,000 03/04/98 257 252 5
----
$146
====
</TABLE>
95
<PAGE>
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
- -------------------------------------------------------------------------------
To The Contractowners, Policyholders and Trustees of
John Hancock Variable Series Trust I
We have audited the accompanying statements of assets and liabilities,
including the schedules of investments, of John Hancock Variable Series Trust
I (the Fund) (comprising, respectively, the Large Cap Growth, Sovereign Bond,
International Equities, Small Cap Growth, International Balanced, Mid Cap
Growth, Large Cap Value, Money Market, Mid Cap Value, Special Opportunities,
Real Estate Equity, Growth & Income, Managed, Short-Term U.S. Government,
Small Cap Value, International Opportunities, Equity Index and Strategic Bond
Portfolios) as of December 31, 1997, and the related statements of operations
for the year then ended, and the statements of changes in net assets and
financial highlights for each of the periods indicated therein. 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 and financial highlights. Our procedures included
confirmation of securities owned as of December 31, 1997, by correspondence
with the custodian and brokers, or other appropriate auditing procedures where
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
each of the respective portfolios constituting John Hancock Variable Series
Trust I at December 31, 1997, the results of their operations for the year
then ended, and the changes in their net assets and financial highlights for
each of the periods indicated therein, in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 6, 1998
96
<PAGE>
Officers and Trustees
Henry D. Shaw, Chairman
Thomas J. Lee, Vice Chairman and President
Laura L. Mangan, Secretary
Raymond F. Skiba, Treasurer
Sandra M. DaDalt, Assistant Secretary
Patrick F. Smith, Controller
Elizabeth Cook
William H. Dykstra
Joseph Kiebala, Jr.
Frank J. Zeo
Investment Adviser
John Hancock Mutual Life Insurance Company
John Hancock Place
P.O. Box 111
Boston, Massachusetts 02117
Sub-Investment Advisers
Independence Investment Associates, Inc.
One Liberty Square
Boston, Massachusetts 02109
T. Rowe Price Associates, Inc.
100 East Pratt Street
Baltimore, MD 21202
Rowe Price-Fleming International, Inc.
100 East Pratt Street
Baltimore, MD 21202
Neuberger & Berman, LLC
605 Third Avenue
New York, NY 10158-3698
INVESCO Management & Research, Inc.
101 Federal Street
Boston, MA 02110
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
J.P. Morgan Investment Management
522 Fifth Avenue
New York, NY 10036
Brinson Partners, Inc.
209 South La Salle Street
Chicago, IL 60604-1295
Janus Capital Corporation
100 Fillmore Street
Denver, CO 80206-4923
State Street Global Advisors
Two International Place
Boston, MA 02110
INDEPENDENT AUDITORS
Ernst & Young LLP
200 Clarendon Street
Boston, MA 02116
<PAGE>
[LOGO OF JOHN HANCOCK APPEARS HERE]
The Variable Series Trust consists of 18 portfolios used to fund various John
Hancock variable life and variable annuity contracts. This report must be
accompanied by the required prospectus and the most current quarterly
performance report for the contract offered. Investors are not able to invest
directly into the Variable Series Trust.
Not all of the portfolios described in this report are available on every
product. Please refer to the prospectus for additional information about the
investment options on your variable product.
John Hancock Mutual Life Insurance Company
John Hancock Variable Life Insurance Company (not licensed in New York)
John Hancock Distributors, Inc., Member NASD
Boston, Massachusetts 02117
www.jhancock.com
