[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm September 22, 1997
Dear Fellow Shareholder:
I am writing to ask for your vote on an important matter that will affect your
investment in the John Hancock Global Marketplace Fund.
Although your Fund has offered an intriguing opportunity to capitalize on global
consumer spending trends, your Fund's Board of Trustees believes the retail
sector does not offer the diversity found in other industries, and that
considerable volatility could result from your Fund's highly specialized
investment focus. Accordingly, your Fund's Trustees are recommending the merger
of your Fund into the John Hancock Global Fund, a fund with a broader investment
approach. The Global Fund offers you the opportunity to participate in a wide
range of foreign and domestic investment opportunities, including the global
retail sector. The Global Fund also offers you a more consistent performance
record, as well as a larger asset base, that can help protect your investment
through greater diversification.
This proposed merger has been unanimously approved by your Fund's Board of
Trustees, who believe it will benefit you and your fellow shareholders. The
proposed merger is detailed in the enclosed proxy statement and summarized in
the questions and answers on the following page. I suggest you read both
thoroughly before voting.
Your Vote Makes a Difference!
No matter what the size of your investment may be, your vote is critical. I urge
you to review the enclosed materials and to complete, sign and return the
enclosed proxy ballot to us immediately. Your prompt response will help avoid
the need for additional mailings at your Fund's expense. For your convenience,
we have provided a postage-paid envelope.
If you have any questions or need additional information, please contact your
investment professional or call your Customer Service Representative at
1-800-225-5291, Monday through Friday between 8:00 A.M. and 8:00 P.M. Eastern
Time. I thank you for your prompt vote on this matter.
Sincerely,
/s/ Edward J. Boudreau, Jr.
Edward J. Boudreau, Jr.
Chairman and CEO
<PAGE>
Q: What are the benefits of merging the Global Marketplace Fund into the Global
Fund?
A: Although both funds seek long-term capital appreciation, the Global Fund has
a much wider investment scope. As you know, the Global Marketplace Fund is
primarily limited to investments in retail companies or related consumer
businesses. The Global Fund, on the other hand, invests in stocks of companies
from a wide range of industries including retail and consumer businesses. As a
Global Fund shareholder, you can continue to participate in the global retail
sector while opening your portfolio to a broad range of opportunities in other
industries. This diversification will also make your investment less dependent
upon the success of the retail sector.
Q: What is the Global Fund's strategy?
A: The Global Fund seeks long-term capital appreciation by investing in stocks
of large, medium and small companies in the U.S. and abroad that the management
team believes have above-average earnings growth potential. The Fund will
continue to invest a portion of its assets in retail stocks, seeking to
capitalize on a global trend of rising consumption.
Q: Who manages the Global Fund?
A: The Global Fund is managed by our international investment team, led by
portfolio managers Miren Etcheverry, Gerardo J. Espinoza and John L. F. Wills,
who average 22 years of international investment experience. Our international
team includes analytical staff from eight different countries speaking 12
foreign languages fluently. With offices in the U.S., Europe and Asia, our team
studies companies and economies first-hand, seeking the best opportunities in
countries with the greatest potential for growth and stability.
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Q: How has the Global Fund performed?
A: Although past performance does not necessarily guarantee future results, the
Global Fund has been a steady performer over the years. Its Class B shares have
posted average annual total returns of 12.94% over the past year, 11.74% over
the past five years and 7.72% over the past ten years at public offering price
as of June 30, 1997. The Fund's Class A shares have posted an average annual
return of 12.86% over the past year, 11.53% over the past five years and 10.34%
since inception on January 3, 1992.* To review the Global Fund in more detail,
please refer to the John Hancock International/Global Funds prospectus and the
Global Fund's most recent annual and semiannual reports, all of which are
enclosed.
Q: How do I vote?
A: Most shareholders typically vote by completing, signing and returning the
enclosed proxy card using the postage-paid envelope provided. If you prefer to
vote in person, you are cordially invited to attend a meeting of shareholders of
your Fund, which will be held at 9:00 A.M. on November 12, 1997 at our 101
Huntington Avenue headquarters in Boston, Massachusetts. If you vote now, you
will help avoid further solicitations at your Fund's expense.
Q: How will the merger happen?
A: If the merger is approved, your Global Marketplace Fund shares will be
converted to Global Fund shares, using the Funds' net asset value share prices,
excluding sales charges, as of the close of trading on December 5, 1997. This
conversion will not affect the total dollar value of your investment.
Q: Will the merger have tax consequences?
A: Although taxable dividends and capital gains will be paid prior to the
merger, the merger itself is a non-taxable event and does not need to be
reported on your 1997 tax return.
*Performance figures assume all distributions are reinvested and reflect a
maximum sales charge on Class A shares of 5% and the applicable contingent
deferred sales charge on Class B shares. The CDSC declines annually between
years 1-6 according to the following schedule: 5, 4, 3, 3, 2, 1% . No sales
charge will be assessed after the sixth year. The return and principal value of
any mutual fund investment will fluctuate, so that shares, when redeemed, may be
worth more or less than their original cost.
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JOHN HANCOCK GLOBAL MARKETPLACE FUND
(a series of John Hancock World Fund)
101 Huntington Avenue
Boston, MA 02199
NOTICE OF MEETING OF SHAREHOLDERS
SCHEDULED FOR NOVEMBER 12, 1997
This is the formal agenda for your fund's shareholder meeting. It tells you what
matters will be voted on and the time and place of the meeting, in case you want
to attend in person.
To the shareholders of John Hancock Global Marketplace Fund:
A meeting of shareholders of your fund will be held at 101 Huntington Avenue,
Boston, Massachusetts on Wednesday, November 12, 1997 at 9:00 a.m., Eastern
Time, to consider the following:
1. A proposal to approve an Agreement and Plan of Reorganization between
your fund and John Hancock Global Fund. Under this Agreement your fund
would transfer all of its assets to Global Fund in exchange for shares
of Global Fund. These shares would be distributed proportionately to
you and the other shareholders of your fund. Global Fund would also
assume your fund's liabilities. Your board of trustees recommends that
you vote FOR this proposal.
2. Any other business that may properly come before the meeting.
Shareholders of record as of the close of business on September 17, 1997 are
entitled to vote at the meeting and any related follow-up meetings.
Whether or not you expect to attend the meeting, please complete and return the
enclosed proxy card. Please take a few minutes to vote now and help save the
cost of additional solicitations.
By order of the board of trustees,
Susan S. Newton
Secretary
September 22, 1997
300PX 9/97
<PAGE>
PROXY STATEMENT OF
JOHN HANCOCK GLOBAL MARKETPLACE FUND
(a series of John Hancock World Fund)
PROSPECTUS FOR
CLASS A AND CLASS B SHARES OF
JOHN HANCOCK GLOBAL FUND
(a series of John Hancock Investment Trust III)
This proxy statement and prospectus contains the information you should know
before voting on the proposed reorganization of your fund into John Hancock
Global Fund. Please read it carefully and retain it for future reference.
How the Reorganization Will Work
o Your fund will transfer all of its assets to Global Fund.
Global Fund will assume your fund's liabilities.
o Global Fund will issue to your fund Class A shares in an
amount equal to the value of your fund's Class A shares. These
shares will be distributed to your fund's Class A shareholders
in proportion to their holdings on the reorganization date.
o Global Fund will issue to your fund Class B shares in an
amount equal to the value of your fund's Class B shares. These
shares will be distributed to your fund's Class B shareholders
in proportion to their holdings on the reorganization date.
o The reorganization will be tax-free.
o Your fund will be liquidated and you will end up as a
shareholder of Global Fund.
Shares of Global Fund are not deposits or obligations of, or guaranteed or
endorsed by, any bank or other depository institution. These shares are not
federally insured by the Federal Deposit Insurance Corporation, the Federal
Reserve Board or any other government agency.
Shares of Global Fund have not been approved or disapproved by the Securities
and Exchange Commission. The Securities and Exchange Commission has not passed
upon the accuracy or adequacy of this prospectus. Any representation to the
contrary is a criminal offense.
2
<PAGE>
Why Your Fund's Trustees are Recommending the Reorganization
The trustees of your fund believe that reorganizing your fund into a larger fund
with similar investment policies would enable the shareholders of your fund to
benefit from increased diversification, the ability to achieve better net prices
on securities trades and economies of scale that could contribute to a lower
expense ratio. Therefore, the trustees recommend that your fund's shareholders
vote FOR the reorganization.
- --------------------------------------------------------------------------------
Investment Objectives
- ------------------- ------------------------------ -----------------------------
Global Marketplace Global
- ------------------- ------------------------------ -----------------------------
Investment Long-term capital Long-term growth of capital.
objective. appreciation.
- ------------------- ------------------------------ -----------------------------
- --------------------------------------------------------------------------------
Where to Get More Information
- ----------------------------------------- --------------------------------------
Prospectus of your fund and Global Fund In the same envelope as this proxy
dated 3/1/97. statement and prospectus.
Incorporated by reference into this
proxy statement and
prospectus.
- -----------------------------------------
Global Fund's annual and semi-
annual reports to shareholders.
- ----------------------------------------- --------------------------------------
Your fund's annual and semi-annual On file with the Securities and
reports to shareholders. Exchange Commission ("SEC") and
available at no charge by calling
1-800-225-5291. Incorporated by
reference into this proxy statement
and prospectus.
- -----------------------------------------
A statement of additional information
dated 9/22/97. It contains additional
information about your fund and Global
Fund.
- ----------------------------------------- --------------------------------------
To ask questions about this proxy Call our toll-free telephone
statement and prospectus. number: 1-800-225-5291
- ----------------------------------------- --------------------------------------
The date of this proxy statement and prospectus is September 22, 1997.
3
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TABLE OF CONTENTS
Page
INTRODUCTION 5
SUMMARY 5
INVESTMENT RISKS 17
PROPOSAL TO APPROVE AGREEMENT
AND PLAN OF REORGANIZATION 18
CAPITALIZATION 25
ADDITIONAL INFORMATION ABOUT
THE FUNDS' BUSINESSES 26
BOARDS' EVALUATION AND RECOMMENDATION 26
VOTING RIGHTS AND REQUIRED VOTE 27
INFORMATION CONCERNING THE MEETING 28
OWNERSHIP OF SHARES OF THE FUNDS 30
EXPERTS 31
AVAILABLE INFORMATION 31
EXHIBITS
A - Agreement and Plan of Reorganization between John Hancock Global
Marketplace Fund and John Hancock Global Fund (attached to this
document).
4
<PAGE>
INTRODUCTION
This proxy statement and prospectus is being used by the board of trustees of
your fund to solicit proxies to be voted at a special meeting of shareholders of
your fund. This meeting will be held at 101 Huntington Avenue, Boston,
Massachusetts on Wednesday, November 12, 1997 at 9:00 a.m., Eastern Time. The
purpose of the meeting is to consider a proposal to approve an Agreement and
Plan of Reorganization providing for the reorganization of your fund into John
Hancock Global Fund. This proxy statement and prospectus is being mailed to your
fund's shareholders on or about September 22, 1997.
Who is Eligible to Vote?
Shareholders of record on September 17, 1997 are entitled to attend and vote at
the meeting or any adjourned meeting. Each share is entitled to one vote. Shares
represented by properly executed proxies, unless revoked before or at the
meeting, will be voted according to shareholders' instructions. If you sign a
proxy, but do not fill in a vote, your shares will be voted to approve the
Agreement and Plan of Reorganization. If any other business comes before the
meeting, your shares will be voted at the discretion of the persons named as
proxies.
SUMMARY
The following is a summary of more complete information appearing later in this
proxy statement. You should read the entire proxy statement, Exhibit A and the
enclosed documents carefully because they contain details that are not in the
summary.
5
<PAGE>
Comparison of Global Marketplace Fund to Global Fund
- ------------------- ------------------------------ -----------------------------
Global Marketplace Global
- ------------------- ------------------------------ -----------------------------
Business: Your fund is a diversified Global Fund is a diversified
series of John Hancock World series of John Hancock
Fund. The trust is an Investment Trust III. The
open-end investment company trust is an open-end
organized as a Massachusetts investment company organized
business trust. as a Massachusetts business
trust.
- ------------------- ------------------------------ -----------------------------
Net assets as of $51.5 million. $123.8 million.
April 30, 1997:
- ------------------- ------------------------------ -----------------------------
Investment The Fund's investment The Fund's investment
adviser and adviser is John Hancock adviser is John Hancock
portfolio Advisers, Inc. Bernice S. Advisers, Inc. Miren
managers: Behar, CFA, has led your Etcheverry, John L.F. Wills
fund's portfolio management and Gerardo J. Espinoza lead
team since the Fund's Global Fund's portfolio
inception in September management team.
1994. Ms. Behar is a senior Ms. Etcheverry and
vice president of the Mr. Espinoza are senior vice
adviser. Ms. Behar joined presidents, joined John
the adviser in 1991 and has Hancock Funds in December
been in the investment 1996, and have been in the
business since 1986. investment business since
1978 and 1979,
respectively. Mr. Wills is
a senior vice president of
the adviser and managing
director of the subadviser,
John Hancock Advisers
International. Mr. Wills
joined John Hancock Funds in
1987 and has been in the
investment business since
1969.
- ------------------- ------------------------------ -----------------------------
6
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- --------------------------------------------------------------------------------
Global Marketplace Global
- --------------------------------------------------------------------------------
Investment Long-term capital Long-term growth of capital
objective: appreciation. This objective primarily through investment
cannot be changed without in common stocks of companies
shareholder approval. domiciled in foreign
countries and in the U.S.
Global Fund's objective
cannot be changed without
shareholder approval.
- --------------------------------------------------------------------------------
Primary At least 65% of assets in At least 65% of assets in
investments: common stocks, warrants, common stocks and convertible
preferred stocks and securities of U.S. and
convertible debt securities foreign companies, but Global
of U.S. and foreign companies Fund may invest in virtually
that merchandise goods and any type of security, foreign
services to consumers or to or domestic, including
consumer companies. Your fund preferred and convertible
looks for companies of any securities, warrants and
size that appear to possess a investment-grade debt
competitive advantage, such securities. Global Fund
as a unique product or expects to invest in the
distribution method, new securities markets of at
technologies or innovative least three countries at any
marketing or sales methods. one time, potentially
Your fund expects to invest including the U.S.
in the securities markets of
at least three countries at
any one time, potentially
including the U.S.
- --------------------------------------------------------------------------------
Investments in For liquidity and flexibility, both funds may place up to
debt 35% of assets in cash or investment grade short-term
securities: securities. In abnormal market conditions, both funds may
invest up to 100% in these securities as a defensive tactic.
- -------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Foreign Your fund may invest up to Global Fund may invest up to
debt securities: 35% of assets in debt 5% of assets in debt
securities issued by foreign securities issued by foreign
governments or foreign governments or foreign
companies. No more than 25% companies.
of your fund's assets will be
invested in the securities of
any one foreign government.
- --------------------------------------------------------------------------------
7
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- ------------------- ------------------------------ -----------------------------
Global Marketplace Global
- ------------------- ------------------------------ -----------------------------
Illiquid Both funds may invest up to 15% of net assets in illiquid
securities: securities. This limitation does not apply to liquid Rule
144A securities, but does apply to other restricted
securities.
- ------------------- ------------------------------------------------------------
Financial futures Both funds may use financial futures and options on and
related futures. Both funds may also, but typically do not, use options; options
options on securities and indices. There are no percentage on securities and
limits on the amount of fund assets that may be invested in indices: these
instruments.
- ------------------- ------------------------------------------------------------
Structured Both funds may invest without limitation in structured
securities: securities.
- ------------------- ------------------------------------------------------------
Currency Both funds may enter into currency contracts for hedging
contracts: purposes. Both funds may, but typically do not, enter into
currency contracts for speculative purposes.
- ------------------- ------------------------------------------------------------
Currency trading: Both funds may trade foreign currencies directly or
hold foreign currencies as assets.
- ------------------- ------------------------------------------------------------
Asset-backed and Both funds may, but typically do not, invest in asset-
mortgage-backed backed or mortgage-backed securities.
securities:
- ------------------- ------------------------------ -----------------------------
Short sales: Your fund may, but typically Global Fund may not engage
does not, engage in short in short sales.
sales.
- ------------------- ------------------------------------------------------------
When-issued and Both funds may purchase when-issued securities and purchase
forward or sell securities in forward commitment transactions.
commitment
transactions:
- ------------------- ------------------------------------------------------------
Short-term Neither fund is subject to any limitations on short- term
trading: trading.
- ------------------- ------------------------------------------------------------
Repurchase Both funds may invest without limitation in repurchase
agreements: agreements.
- ------------------- ------------------------------ -----------------------------
Securities Your fund may lend portfolio Global Fund may lend
lending: securities representing up portfolio securities
to 33.3% of assets. representing up to 10% of
assets.
- ------------------- ------------------------------ -----------------------------
8
<PAGE>
- --------------------------------------------------------------------------------
INVESTMENT OBJECTIVES AND POLICIES
- ------------------- ------------------------------ -----------------------------
Global Marketplace Global
- ------------------- ------------------------------ -----------------------------
Borrowing and Your fund may temporarily Global Fund may temp-
reverse borrow from banks or through orarily borrow from banks or
repurchase reverse repurchase through reverse repurchase
agreements: agreements for extraordinary agreements for extraordinary
or emergency purposes. These or emergency purposes. These
borrowings may not exceed borrowings may not exceed
33.3% of assets. 10% of assets.
- ------------------- ------------------------------ -----------------------------
- --------------------------------------------------------------------------------
CLASSES OF SHARES
- ------------------- ------------------------------------------------------------
Both Global Marketplace and Global Funds
- ------------------- ------------------------------------------------------------
Class A shares: The Class A shares of both funds have the same
characteristics and fee structure. Class A shares are
offered with front-end sales charges ranging from 2% to 5%
of each fund's offering price, depending on the amount
invested. There is no front-end sales charge for investments
of $1 million or more, but there is a contingent deferred
sales charge ranging from 0.25% to 1.00% on shares sold
within one year of purchase. Investors can combine multiple
purchases of Class A shares to take advantage of breakpoints
in the sales charge schedule. Sales charges are waived for
the categories of investors listed in the funds' prospectus.
Class A shares are subject to a 12b-1 distribution fee equal
to 0.30% annually of average net assets.
- ------------------- ------------------------------------------------------------
9
<PAGE>
- ------------------- ------------------------------------------------------------
Class B shares: The Class B shares of both funds have the same
characteristics and fee structure. Class B shares are
offered without a front-end sales charge, but are subject to
a contingent deferred sales charge (CDSC) if sold within six
years after purchase. The CDSC ranges from 1.00% to 5.00%
depending on how long they are held. No CDSC is imposed on
shares held more than six years. CDSCs are waived for the
categories of investors listed in the funds' prospectus.
Class B shares are subject to 12b-1 distribution and service
fees equal to 1.00% annually of average net assets. Class B
shares automatically convert to Class A shares after eight
years.
- --------------------------------------------------------------------------------
BUYING, SELLING AND EXCHANGING SHARES
- ------------------- ------------------------------------------------------------
Both Global Marketplace and Global Funds
- ------------------- ------------------------------------------------------------
Buying shares: The procedures for buying shares of both funds are
identical. Investors may buy shares at their public
offering price through a financial representative or the
funds' transfer agent, John Hancock Signature Services,
Inc. After September 17, 1997, investors will not be
allowed to open new accounts in your fund but can add to
existing accounts.
- ------------------- ------------------------------------------------------------
Minimum initial The funds have the same initial investment minimums, which
investments: are $1,000 for non-retirement accounts and $250 for
retirement accounts and group investments.
- ------------------- ------------------------------------------------------------
Exchanging shares: Shareholders of both funds may exchange their shares at net
asset value with no sales charge for shares of the same
class of any other John Hancock fund.
- ------------------- ------------------------------------------------------------
Selling shares: Shareholders of both funds may sell their shares by
submitting a proper written or telephone request to John
Hancock Signature Services, Inc.
- ------------------- ------------------------------------------------------------
Net asset value: All purchases, exchanges and sales of each fund's shares are
made at a price based on the next determined net asset value
per share (NAV) of the fund. Both funds' NAVs are determined
at the close of regular trading on the New York Stock
Exchange, which is normally 4:00 p.m. Eastern Time.
- ------------------- ------------------------------------------------------------
10
<PAGE>
The Funds' Expenses
Shareholders of both funds pay various expenses, either directly or indirectly.
The first two expense tables appearing below show the expenses for the twelve
months ended April 30, 1997, adjusted to reflect any changes. Future expenses
may be greater or less. The examples contained in each expense table show what
you would pay if you invested $1,000 over the various time periods indicated.
Each example assumes that you reinvested all dividends and that the average
annual return was 5%. The examples are for comparison purposes only and are not
a representation of either fund's actual expenses or returns, either past or
future.
Global Marketplace Fund
Shareholder transaction expenses Class A Class B
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
Maximum sales charge imposed on
reinvested dividends none none
Maximum deferred sales charge none(1) 5.00%
Redemption fee(2) none none
Exchange fee none none
Annual fund operating expenses
(as a % of average net assets) Class A Class B
Management fee (after expense limitation)(3) 0.54% 0.54%
12b-1 fee(4) 0.30% 1.00%
Other expenses 0.77% 0.77%
Total fund operating expenses
(after expense limitation)(3) 1.61% 2.31%
Example
Share class Year 1 Year 3 Year 5 Year 10
Class A shares $66 $98 $133 $232
Class B shares
Assuming redemption
at end of period $73 $102 $144 $247
Assuming no redemption $23 $72 $124 $247
(1) Except for investments of $1 million or more.
(2) Does not include wire redemption fee (currently $4.00).
(3) Reflects the adviser's voluntary agreement to limit expenses (except
for 12b-1 and transfer agent expenses). Without this limitation,
management fees would be 0.80% for each class and total fund operating
expenses would be 1.87% for Class A and 2.57% for Class B. The adviser
may discontinue this limitation at any time.
(4) Because of the 12b-1 fee, long-term shareholders may pay more than the
equivalent of the maximum permitted front-end sales charge.
11
<PAGE>
Global Fund
Shareholder transaction expenses Class A Class B
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
Maximum sales charge imposed on
reinvested dividends none none
Maximum deferred sales charge none(1) 5.00%
Redemption fee(2) none none
Exchange fee none none
Annual fund operating expenses Class A Class B
(as a % of average net assets)
Management fee 0.96% 0.96%
12b-1 fee(4) 0.30% 1.00%
Other expenses 0.62% 0.62%
Total fund operating expenses 1.88% 2.58%
Example
Share class Year 1 Year 3 Year 5 Year 10
Class A shares $68 $106 $147 $259
Class B shares
Assuming redemption
at end of period $76 $110 $157 $274
Assuming no redemption $26 $80 $137 $274
(1) Except for investments of $1 million or more.
(2) Does not include wire redemption fee (currently $4.00).
(3) Reflects the adviser's voluntary agreement to limit expenses (except
for 12b-1 and transfer agent expenses). Without this limitation,
management fees would be 0.80% for each class and total fund operating
expenses would be 1.87% for Class A and 2.57% for Class B. The adviser
may discontinue this limitation at any time.
(4) Because of the 12b-1 fee, long-term shareholders may pay more than the
equivalent of the maximum permitted front-end sales charge.
Pro Forma Expense Table
The next expense table shows the hypothetical ("pro forma") expenses of Global
Fund assuming that a reorganization with your fund occurred on April 30, 1997.
The expenses shown in the table are based on fees and expenses incurred during
the twelve months ended April 30, 1997. Global Fund's actual expenses after the
reorganization may be greater or less than those shown. The example contained in
the pro forma expense table shows what you would pay on a $1,000 investment if
the reorganization had occurred on April 30, 1997. The example assumes that you
reinvested all dividends and that the average annual return was 5%. The pro
12
<PAGE>
forma example is for comparison purposes only and is not a representation of
Global Fund's actual expenses or returns, either past or future.
Global Fund (PRO FORMA)
(Assuming reorganization with Global Marketplace Fund)
Shareholder transaction expenses Class A Class B
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
Maximum sales charge imposed on
reinvested dividends none none
Maximum deferred sales charge none(1) 5.00%
Redemption fee(2) none none
Exchange fee none none
Annual fund operating expenses Class A Class B
(as a % of average net assets)
Management fee(3) 0.86% 0.86%
12b-1 fee(4) 0.30% 1.00%
Other expenses 0.61% 0.61%
Total fund operating expenses 1.77% 2.47%
Pro Forma Example
Share class Year 1 Year 3 Year 5 Year 10
Class A shares $67 $103 $141 $248
Class B shares
Assuming redemption
at end of period $75 $107 $152 $263
Assuming no redemption $25 $77 $132 $263
(1) Except for investments of $1 million or more.
(2) Does not include wire redemption fee (currently $4.00).
(3) On September 9, 1997, the trustees of Global Fund approved a
reduction in the advisory fee rates paid by Global Fund to take effect
on the reorganization date. The pro forma management fees in the table
have been restated to reflect the lower fee rates.
(4) Because of the 12b-1 fee, long-term shareholders may pay more than the
equivalent of the maximum permitted front-end sales charge.
13
<PAGE>
The Reorganization
o The reorganization is scheduled to occur at 5:00 p.m., Eastern
Time, on December 5, 1997, but may occur on any later date
before June 1, 1998. Your fund will transfer all of its assets
to Global Fund. Global Fund will assume your fund's
liabilities. The net asset value of both funds will be
computed as of 5:00 p.m., Eastern Time, on the reorganization
date.
o Global Fund will issue to your fund Class A shares in an
amount equal to the aggregate net asset value of your fund's
Class A shares. These shares will immediately be distributed
to your fund's Class A shareholders in proportion to their
holdings on the reorganization date. As a result, Class A
shareholders of your fund will end up as Class A shareholders
of Global Fund.
o Global Fund will issue to your fund Class B shares in an
amount equal to the aggregate net asset value of your fund's
Class B shares. These shares will immediately be distributed
to your fund's Class B shareholders in proportion to their
holdings on the reorganization date. As a result, Class B
shareholders of your fund will end up as Class B shareholders
of Global Fund.
o After the reorganization is over, your fund will be
terminated.
o The reorganization will be tax-free and will not take place
unless both funds receive a satisfactory opinion concerning
the tax consequences of the reorganization from Hale and Dorr
LLP, counsel to the funds.
14
<PAGE>
Other Consequences of the Reorganization. Your fund pays, and Global Fund will
pay after the reorganization, monthly advisory fees equal to the following
annual percentage of average daily net assets:
- ---------------------------------------------- ---------------- ----------------
Fund Asset
Breakpoints Global Global
Marketplace
- ---------------------------------------------- ---------------- ----------------
First $100 million 0.80% 0.90%
- ---------------------------------------------- ---------------- ----------------
Next $150 million 0.80% 0.80%
- ---------------------------------------------- ---------------- ----------------
Next $50 million 0.70% 0.80%
- ---------------------------------------------- ---------------- ----------------
Next $200 million 0.70% 0.75%
- ---------------------------------------------- ---------------- ----------------
Over $500 million 0.70% 0.625%
- ---------------------------------------------- ---------------- ----------------
Thus, at asset levels of up to $100 million, the advisory fee rates paid by
Global Fund would be 0.10% of assets higher than the rates that would have been
paid by your fund at the same asset levels. At asset levels between $100 million
and $250 million, the advisory fee rates paid by your fund and Global Fund would
be the same. At asset levels between $250 million and $300 million, the advisory
fee rates paid by Global Fund would be 0.10% of assets higher than the rates
that would have been paid by your fund. At asset levels between $300 million and
$500 million, that differential drops to 0.05% of assets. For assets over $500
million Global Fund would pay an advisory fee rate that would be 0.075% lower
than the rate your fund would pay.
Your fund's historical growth pattern suggests that its asset size probably
would not have increased significantly in the near future to qualify for the
0.70% fee rate. Global Fund is already of sufficient size to qualify for the
0.80% fee rate on assets over $100 million, which is the rate your fund
currently pays. Combining the assets of your fund and Global Fund will enable
Global Fund to more quickly reach the next fee reduction breakpoint, which would
qualify Global Fund for a rate that is lower than the rate currently paid by
your fund.
In addition, Global Fund's other expenses of 0.62%, as well as its pro forma
other expenses of 0.61%, are substantially lower than your fund's other expenses
of 0.77%. However, Global Fund's annual Class A and Class B expense ratios
(equal to 1.88% and 2.58%, respectively, of average net assets) are higher than
your fund's expense ratios (equal to 1.61% and 2.31%, respectively, of average
net assets). If the reorganization had occurred on April 30, 1997, the
differential between Global Fund's pro forma Class A and Class B expense ratios
(equal to 1.77% and 2.47%, respectively, of average net assets) and your fund's
current expense ratios would have been smaller.
15
<PAGE>
The reason Global Fund's annual total expenses are higher than your fund's (even
though Global Fund's other expenses are substantially lower) is that the adviser
has voluntarily agreed to limit your fund's expenses. If the adviser had not
limited your fund's expenses, your fund's annual Class A and Class B expense
ratios would have been equal to 1.87% and 2.57%, respectively, of average net
assets, and would have been substantially similar to Global Fund's current
expense ratios and higher than Global Fund's pro forma expense ratios. In light
of your fund's inability to attract a significant amount of new assets, the
adviser does not plan to continue to subsidize a portion of your fund's expenses
indefinitely. When the adviser discontinues this voluntary limitation, your
fund's expense ratio will rise close to Global Fund's current expense ratio.
The following diagram shows how the reorganization would be carried out.
Global Marketplace Global Marketplace Global Fund receives
Fund transfers assets & Fund's assets assets & assumes
liabilities to Global and liabilities liabilities of Global
Fund Marketplace Fund
Class A Class B Issues Class Issues Class
shareholders shareholders B Shares A Shares
Your fund receives Global Fund
Class B shares and
distributes them to your fund's Class B shareholders
Your fund receives Global Fund
Class A shares and
distributes them to your fund's Class A shareholders
[This diagram represents a graphic illustration of the reorganization]
16
<PAGE>
INVESTMENT RISKS
The funds are exposed to various risks that could cause shareholders to lose
money on their investments in the funds. The following table compares the risks
affecting each fund.
- ------------------- ------------------------------ -----------------------------
Global Marketplace Global
- ------------------- ------------------------------------------------------------
Stock As with any fund that invests primarily in stocks, the
market risk value of each fund's portfolio will change in response to
stock market movements.
- ------------------- ------------------------------------------------------------
Credit risk The debt securities held by each fund are subject to
the risk that the issuer of a security will default or
otherwise fail to meet its obligations.
- ------------------- ------------------------------------------------------------
Interest A rise in interest rates typically causes the value of debt
rate risk securities to fall. A fall in interest rates typically
causes the value of debt securities to rise.
- ------------------- ------------------------------------------------------------
Foreign Each fund's investments in foreign securities are subject
securities and to the risks of adverse foreign government actions,
currency risks political instability or a lack of adequate and accurate
information. Also, currency exchange rate movements could
reduce gains or create losses. These risks of international
investing are higher in emerging markets such as those of
Latin America, Southeast Asia and Eastern Europe.
- ------------------- ------------------------------------------------------------
Risks of The funds' investments in restricted and illiquid
restricted and securities may be difficult or impossible to sell at a
illiquid desirable time or a fair price. Restricted and illiquid
securities securities also present a greater risk of inaccurate
valuation.
- ------------------- ------------------------------------------------------------
Risks of Most derivative instruments involve leverage, which
derivative increases market risks. Leverage magnifies gains and
instruments, losses on derivatives relative to changes in the value of
including underlying assets. If a derivative is used for hedging
financial purposes, changes in the value of the derivative may not
futures, match those of the hedged asset. Over the counter
options on derivatives may be illiquid or hard to value accurately.
futures, In addition, the other party may default on its
securities and obligations. If markets for underlying assets do not move
index options, in the right direction, a fund's performance may be worse
currency than if it had not used derivatives. Since both funds may
contracts. enter into currency contracts, they are exposed to the
risks that fluctuating exchange rates may negatively affect
their investments.
- ------------------- ------------------------------------------------------------
17
<PAGE>
PROPOSAL TO APPROVE THE AGREEMENT
AND PLAN OF REORGANIZATION
Description of Reorganization
You are being asked to approve an Agreement and Plan of Reorganization, a copy
of which is attached as Exhibit A. The Agreement provides for a reorganization
on the following terms:
o The reorganization is scheduled to occur at 5:00 p.m., Eastern
Time, on December 5, 1997, but may occur on any later date
before June 1, 1998. Your fund will transfer all of its assets
to Global Fund and Global Fund will assume all of your fund's
liabilities. This will result in the addition of your fund's
assets to Global Fund's portfolio. The net asset value of both
funds will be computed as of 5:00 p.m., Eastern Time, on the
reorganization date.
o Global Fund will issue to your fund Class A shares in an
amount equal to the aggregate net asset value of your fund's
Class A shares. As part of the liquidation of your fund, these
shares will immediately be distributed to Class A shareholders
of record of your fund in proportion to their holdings on the
reorganization date. As a result, Class A shareholders of your
fund will end up as Class A shareholders of Global Fund.
o Global Fund will issue to your fund Class B shares in an
amount equal to the aggregate net asset value of your fund's
Class B shares. As part of the liquidation of your fund, these
shares will immediately be distributed to Class B shareholders
of record of your fund in proportion to their holdings on the
reorganization date. As a result, Class B shareholders of your
fund will end up as Class B shareholders of Global Fund.
o After the reorganization is over, the existence of your fund
will be terminated.
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<PAGE>
Reasons for the Proposed Reorganization
The board of trustees of your fund believes that the proposed reorganization
will be advantageous to the shareholders of your fund for several reasons. The
board of trustees considered the following matters, among others, in approving
the proposal.
First, that shareholders may be better served by a fund offering greater
diversification. To the extent that combining the funds' assets into a single
portfolio creates a larger asset base, Global Fund's investment portfolio can
achieve greater diversification after the reorganization than is currently
possible for either fund. Greater diversification is expected to benefit the
shareholders of both funds because it may reduce the negative effect that the
adverse performance of any one security may have on the performance of the
entire portfolio.
Second, that the Global Fund shares received in the reorganization will provide
you with a similar investment at a comparable or lower level of risk. The board
of trustees also considered the performance history of each fund.
Third, if, as expected, the voluntary limitation on your fund's expenses is
discontinued, Global Fund's pro forma total expenses would be lower than your
fund's total expenses. Shareholders of your fund would then pay indirectly less
in fees each month as shareholders of Global Fund than they would if the
reorganization did not occur and the voluntary expense limitation on your fund's
expenses were discontinued.
Fourth, that a combined fund offers economies of scale that are expected to lead
to better control over expenses than is possible for your fund. Both funds incur
substantial costs for accounting, legal, transfer agency services, insurance,
and custodial and administrative services.
The board of trustees of Global Fund considered that the reorganization presents
an excellent opportunity for Global Fund to acquire investment assets without
the obligation to pay commissions or other transaction costs that are normally
associated with the purchase of securities. This opportunity provides an
economic benefit to Global Fund and its shareholders.
The boards of trustees of both funds also considered that the adviser and the
funds' distributor will also benefit from the reorganization. For example, the
adviser might realize time savings from a consolidated portfolio management
effort and from the need to prepare fewer reports and regulatory filings as well
as prospectus disclosure for one fund instead of two. The trustees believe,
however, that these savings will not amount to a significant economic benefit.
19
<PAGE>
Comparative Fees and Expense Ratios.
As discussed above in the Summary, Global Fund pays a higher advisory fee rate
at certain asset levels than your fund, pays the same advisory fee rate as your
fund at other asset levels, and pays a lower advisory fee rate than your fund
for all assets over $500 million.
Your fund's historical growth pattern suggests that its asset size probably
would not have increased significantly in the near future to qualify for the
0.70% fee rate. Global Fund is already of sufficient size to qualify for the
0.80% fee rate on assets over $100 million, which is the rate your fund
currently pays. Combining the assets of your fund and Global Fund will enable
Global Fund to more quickly reach the next fee reduction breakpoint, which would
qualify Global Fund for a rate that is lower than the rate currently paid by
your fund.
In addition, Global Fund's other expenses of 0.62%, as well as its pro forma
other expenses of 0.61%, are substantially lower than your fund's other expenses
of 0.77%. However, Global Fund's current annual Class A and Class B expense
ratios (equal to 1.88% and 2.58%, respectively, of average net assets) are
higher than your fund's current expense ratios (equal to 1.61% and 2.31%,
respectively, of average net assets). If the reorganization had occurred on
April 30, 1996, the differential between Global Fund's pro forma Class A and
Class B expense ratios (equal to 1.77% and 2.47%, respectively, of average net
assets) and your fund's current expense ratios would have been smaller.
The reason Global Fund's annual total expenses are higher than your fund's (even
though Global Fund's other expenses are significantly lower) is that the adviser
has voluntarily agreed to limit your fund's expenses. If the adviser had not
limited your fund's expenses, your fund's annual Class A and Class B expense
ratios would have been equal to 1.87% and 2.57%, respectively, of average net
assets and would have been substantially similar to Global Fund's current
expense ratios and higher than Global Fund's pro forma expense ratios. The
adviser had decided to voluntarily limit your fund's expenses in combination
with a concerted marketing effort by your fund's distributor, John Hancock
Funds, Inc., in order to promote asset growth in your fund.
In spite of these efforts, your fund has not been able to significantly increase
its asset size. The trustees do not believe, given your fund's current size and
growth rate, that your fund will grow to an asset size which would allow your
fund to realize the benefits of economies of scale, including better control
over expenses. The trustees also do not believe that your fund will reach an
asset size which will allow your fund to significantly improve the
diversification of its investment portfolio. In light of your fund's inability
20
<PAGE>
to attract a significant amount of new assets, the adviser does not plan to
continue to subsidize a portion of your fund's expenses indefinitely. When the
adviser discontinues this voluntary limitation, your fund's expense ratio will
be close to Global Fund's current expense ratio.
In approving the reorganization, the trustees concluded that Global Fund's
advisory fee rates, although higher at certain asset levels, are reasonable.
They also believe that these higher advisory fee rates would be more than offset
by the lower overall expense ratio likely to be achieved by Global Fund after
the reorganization assuming that the voluntary expense limitations were not
continued.
Comparative Performance. The trustees also took into consideration the relative
performance of your fund and Global Fund. As shown in the table below, your fund
has had better performance for some periods while Global Fund has had better
performance for other periods.
- -------------------------------- ------------------------ ----------------------
Average Annual
Total Return Global Marketplace Global
(without including sales
charges)
------------------------ ----------------------
Class A Class B Class A Class B
- -------------------------------- ----------- ------------ ----------- ----------
1 year ended 4/30/97 (7.64)% (8.24)% 4.81% 4.07%
- -------------------------------- ----------- ------------ ----------- ----------
3 years ended 4/30/97 22.36%* 14.22%* 7.87% 7.13%
- -------------------------------- ----------- ------------ ----------- ----------
5 years ended 4/30/97 N/A N/A 10.04% 9.37%
- -------------------------------- ----------- ------------ ----------- ----------
10 years ended 4/30/97 N/A N/A 9.33%* 7.05%
- -------------------------------- ----------- ------------ ----------- ----------
*Since inception.
Your fund experienced a negative return during the one year period ending April
30, 1997. Due to its larger asset size and more diversified portfolio of
investments, Global Fund achieved a positive return over that same period. The
trustees believe that Global Fund's ability to achieve greater diversification
may provide for more consistent positive returns in the future. This conclusion
is supported by the fact that all of Global Fund's one, three, five and ten year
total return figures are positive.
Unreimbursed Distribution and Shareholder Service Expenses
The boards of trustees of your fund and Global Fund have determined that, if the
reorganization occurs, unreimbursed distribution and shareholder service
expenses incurred under your fund's Rule 12b-1 Plans will be reimbursable
expenses under Global Fund's Rule 12b-1 Plans. However, the maximum amounts
21
<PAGE>
payable annually under Global Fund's Rule 12b-1 Plans (0.30% and 1.00% of
average daily net assets attributable to Class A shares and Class B shares,
respectively) will not increase.
The following table shows the actual and pro forma unreimbursed distribution and
shareholder service expenses of both classes of your fund and Global Fund. The
table shows both the dollar amount of these expenses and the percentage of each
class' average net assets that they represent.
- -------------------------------- ------------------------ ----------------------
Unreimbursed Distribution and
Shareholder Service Expenses Global Marketplace Global
- -------------------------------- ----------- ------------ ----------- ----------
Class A Class B Class A Class B
- -------------------------------- ----------- ------------ ----------- ----------
Actual expenses as of April $153,975 $160,558 $135,738 $805,109
30, 1997 0.69% 0.55% 0.14% 2.78%
- -------------------------------- ------------------------ ----------- ----------
Pro forma combined expenses as $289,713 $965,667
of April 30, 1997 0.25% 1.66%
- -------------------------------- ------------------------ ----------- ----------
Thus, if the reorganization had taken place on April 30, 1997, the pro forma
combined unreimbursed expenses of Global Fund's Class A and Class B shares would
have been higher than if no reorganization had occurred. Nevertheless, Global
Fund's assumption of your fund's unreimbursed Rule 12b-1 expenses will have no
immediate effect upon the payments made under Global Fund's Rule 12b-1 Plans.
These payments will continue to be 0.30% and 1.00% of average daily net assets
attributable to Class A and Class B shares, respectively.
John Hancock Funds, Inc. hopes to recover unreimbursed distribution and
shareholder service expenses for Class B shares over an extended period of time.
However, if Global Fund's board terminates either class' Rule 12b-1 Plan, that
class will not be obligated to reimburse these distribution and shareholder
service expenses. Accordingly, until they are paid or accrued, unreimbursed
distribution and shareholder service expenses do not and will not appear as an
expense or liability in the financial statements of either fund. In addition,
unreimbursed expenses are not reflected in a fund's net asset value or the
formula for calculating Rule 12b-1 payments. The staff of the SEC has not
approved or disapproved the treatment of the unreimbursed distribution and
shareholder service expenses described in this proxy statement.
22
<PAGE>
Tax Status of the Reorganization
The reorganization will be tax-free for federal income tax purposes and will not
take place unless both funds receive a satisfactory opinion from Hale and Dorr
LLP, counsel to the funds, substantially to the effect that:
o The reorganization described above will be a "reorganization"
within the meaning of Section 368(a)(1)(C) of the Internal
Revenue Code of 1986 (the "Code") and each fund will be "a
party to a reorganization" within the meaning of Section 368
of the Code;
o No gain or loss will be recognized by your fund upon (1) the
transfer of all of its assets to Global Fund as described
above or (2) the distribution by your fund of Global Fund
shares to your fund's shareholders;
o No gain or loss will be recognized by Global Fund upon the
receipt of your fund's assets solely in exchange for the
issuance of Global Fund shares and the assumption of all of
your fund's liabilities by Global Fund;
o The basis of the assets of your fund acquired by Global Fund
will be the same as the basis of those assets in the hands of
your fund immediately before the transfer;
o The tax holding period of the assets of your fund in the hands
of Global Fund will include your fund's tax holding period for
those assets;
o The shareholders of your fund will not recognize gain or loss
upon the exchange of all their shares of your fund solely for
Global Fund shares as part of the reorganization;
o The basis of Global Fund shares received by your fund's
shareholders in the reorganization will be the same as the
basis of the shares of your fund surrendered in exchange; and
o The tax holding period of the Global Fund shares received by
you will include the tax holding period of your fund's shares
surrendered in the exchange, provided that the shares of your
fund were held as capital assets on the reorganization date.
23
<PAGE>
Additional Tax Considerations
As of October 31, 1996, Global Marketplace Fund had capital loss carryovers of
approximately $2,061,437, of which $849 expires on October 31, 2003, and
$2,060,588 expires on October 31, 2004. Capital loss carryovers are used to
reduce the amount of realized capital gains that a fund is required to
distribute to its shareholders in order to avoid paying taxes on undistributed
capital gain.
If the reorganization occurs, Global Fund will be able to use Global Marketplace
Fund's capital loss carryovers to offset future realized capital gains, subject
to limitations that may, in certain circumstances, result in the expiration of a
portion of these carryovers before they can be used.
Additional Terms of Agreement and Plan of Reorganization
Surrender of Share Certificates. Shareholders of your fund whose shares are
represented by one or more share certificates should, before the reorganization
date, either surrender their certificates to your fund or deliver to your fund a
lost certificate affidavit, in the form and accompanied by the surety bonds that
your fund may require (collectively, an "Affidavit"). On the reorganization
date, all certificates that have not been surrendered will be canceled, will no
longer evidence ownership of your fund's shares and will evidence ownership of
Global Fund shares. Shareholders may not redeem or transfer Global Fund shares
received in the reorganization until they have surrendered their fund share
certificates or delivered an Affidavit. Global Fund will not issue share
certificates in the reorganization.
Conditions to Closing the Reorganization. The obligation of your fund to
consummate the reorganization is subject to the satisfaction of certain
conditions, including the performance by Global Fund of all its obligations
under the Agreement and the receipt of all consents, orders and permits
necessary to consummate the reorganization (see Agreement, paragraph 6).
The obligation of Global Fund to consummate the reorganization is subject to the
satisfaction of certain conditions, including your fund's performance of all of
its obligations under the Agreement, the receipt of certain documents and
financial statements from your fund and the receipt of all consents, orders and
permits necessary to consummate the reorganization (see Agreement, paragraph 7).
The obligations of both funds are subject to the approval of the Agreement by
the necessary vote of the outstanding shares of your fund, in accordance with
the provisions of your fund's declaration of trust and by-laws. The funds'
obligations are also subject to the receipt of a favorable opinion of Hale and
24
<PAGE>
Dorr LLP as to the federal income tax consequences of the reorganization. (see
Agreement, paragraph 8).
Termination of Agreement. The board of trustees of either your fund or Global
Fund may terminate the Agreement (even if the shareholders of your fund have
already approved it) at any time before the reorganization date, if that board
believes that proceeding with the reorganization would no longer be advisable.
Expenses of the Reorganization. Global Fund and your fund will each be
responsible for its own expenses incurred in connection with entering into and
carrying out the provisions of the Agreement, whether or not the reorganization
occurs. These expenses are estimated to be approximately $107,903 in total.
CAPITALIZATION
The following table sets forth the capitalization of each fund as of
April 30, 1997, and the pro forma combined capitalization of both funds as if
the reorganization had occurred on such date. The table reflects pro forma
exchange ratios of approximately 1.1281 Class A Global Fund shares being issued
for each Class A share of your fund and approximately 1.1644 Class B Global Fund
shares being issued for each Class B share of your fund. If the reorganization
is consummated, the actual exchange ratios on the reorganization date may vary
from the exchange ratios indicated due to changes in the market value of the
portfolio securities of both Global Fund and your fund between April 30, 1997
and the reorganization date, changes in the amount of undistributed net
investment income and net realized capital gains of Global Fund and your fund
during that period resulting from income and distributions, and changes in the
accrued liabilities of Global Fund and your fund during the same period.
APRIL 30, 1997
Global
Marketplace Global Pro Forma
Net Assets $51,489,490 $123,811,817 $175,297,802
Net Asset Value Per Share
Class A $14.27 $12.65 $12.65
Class B $14.15 $12.15 $12.15
Shares Outstanding
Class A 1,568,073 7,498,137 9,267,144
Class B 2,057,887 2,384,165 4,780,266
(1) The deferred organization expense of John Hancock Global Marketplace Fund
was written off as the fund would no longer be in existence. As a result, the
net assets of the surviving fund after the reorganization will be less than the
combined net assets of the surviving fund and acquiring fund prior to the
reorganization.
25
<PAGE>
It is impossible to predict how many Class A shares and Class B shares of Global
Fund will actually be received and distributed by your fund on the
reorganization date. The table should not be relied upon to determine the amount
of Global Fund shares that will actually be received and distributed.
ADDITIONAL INFORMATION ABOUT THE FUNDS' BUSINESSES
The following table shows where in the funds' combined prospectus you can find
additional information about the business of each fund.
- ---------------------------- ---------------------------------------------------
Type of Information Headings in Combined Prospectus
-------------------------- ------------------------
Global Marketplace Global
- ---------------------------- ---------------------------------------------------
Organization Fund Details: Business Structure: How the Funds
and operation are Organized
- ---------------------------- ---------------------------------------------------
Investment objective and Goal and Strategy, Portfolio Securities, Risk
policies Factors; Fund Details: Business Structure:
Portfolio Trades, Investment Goals,
Diversification; More About Risk
- ---------------------------- -------------------------- ------------------------
Portfolio Global Marketplace Fund: Global Fund: Management/
management Portfolio Subadviser
Management
- ---------------------------- ---------------------------------------------------
Investment adviser and Overview: The Management Firm; Fund Details:
distributor Business Structure: How the Funds are Organized,
Sales Compensation
- ---------------------------- ---------------------------------------------------
Expenses Investor Expenses
- ---------------------------- ---------------------------------------------------
Custodian and Fund Details: Business Structure: How the Funds
transfer agent are Organized
- ---------------------------- ---------------------------------------------------
Shares of beneficial Your Account: Choosing a Share Class
interest
- ---------------------------- ---------------------------------------------------
Purchase of shares Your Account: Choosing a Share Class; How Sales
Charges are Calculated; Sales Charge Reductions
and Waivers; Opening an Account; Buying Shares;
Transaction Policies; Additional Investor Services
- ---------------------------- ---------------------------------------------------
Redemption Your Account: Selling Shares, How Sales Charges
or sale of shares are Calculated; Transaction Policies; Additional
Investor Services; Systematic Withdrawal Plan
- ---------------------------- ---------------------------------------------------
Dividends, distributions Dividends and Account Policies
and taxes
- ---------------------------- ---------------------------------------------------
26
<PAGE>
BOARDS' EVALUATION AND RECOMMENDATION
For the reasons described above, the board of trustees of your fund, including
the trustees who are not "interested persons" of either fund or the adviser
("independent trustees"), approved the reorganization. In particular, the
trustees determined that the reorganization was in the best interests of your
fund and that the interests of your fund's shareholders would not be diluted as
a result of the reorganization. Similarly, the board of trustees of Global Fund,
including the independent trustees, approved the reorganization. They also
determined that the reorganization was in the best interests of Global Fund and
that the interests of Global Fund's shareholders would not be diluted as a
result of the reorganization.
- --------------------------------------------------------------------------------
The trustees of your fund recommend that the
shareholders of your fund vote for the proposal to
approve the agreement and plan of reorganization.
- --------------------------------------------------------------------------------
VOTING RIGHTS AND REQUIRED VOTE
Each share of your fund is entitled to one vote. Approval of the above proposal
requires the affirmative vote of a majority of the shares of your fund
outstanding and entitled to vote. For this purpose, a majority of the
outstanding shares of your fund means the vote of the lesser of
(1) 67% or more of the shares present at the meeting, if the holders of more
than 50% of the shares of the fund are present or represented by proxy, or
(2) more than 50% of the outstanding shares of the fund.
Shares of your fund represented in person or by proxy, including shares which
abstain or do not vote with respect to the proposal, will be counted for
purposes of determining whether there is a quorum at the meeting. Accordingly,
an abstention from voting has the same effect as a vote against the proposal.
However, if a broker or nominee holding shares in "street name" indicates on the
proxy card that it does not have discretionary authority to vote on the
proposal, those shares will not be considered present and entitled to vote on
the proposal. Thus, a "broker non-vote" has no effect on the voting in
determining whether the proposal has been adopted in accordance with clause (1)
above, if more than 50% of the outstanding shares (excluding the "broker
non-votes") are present or represented. However, for purposes of determining
27
<PAGE>
whether the proposal has been adopted in accordance with clause (2) above, a
"broker non-vote" has the same effect as a vote against the proposal because
shares represented by a "broker non-vote" are considered to be outstanding
shares.
If the required approval of shareholders is not obtained, your fund will
continue to engage in business as a separate mutual fund and the board of
trustees will consider what further action may be appropriate.
INFORMATION CONCERNING THE MEETING
Solicitation of Proxies
In addition to the mailing of these proxy materials, proxies may be solicited by
telephone, by fax or in person by the trustees, officers and employees of your
fund; by personnel of your fund's investment adviser, John Hancock Advisers,
Inc. and its transfer agent, John Hancock Signature Services, Inc.; or by
broker-dealer firms. Signature Services, together with a third party
solicitation firm, has agreed to provide proxy solicitation services to your
fund at a cost of approximately $3,000.
Revoking Proxies
A Global Marketplace Fund shareholder signing and returning a proxy has the
power to revoke it at any time before it is exercised:
o By filing a written notice of revocation with your fund's
transfer agent, John Hancock Signature Services, Inc., 1 John
Hancock Way, Suite 1000, Boston, Massachusetts 02217-1000, or
o By returning a duly executed proxy with a later date before
the time of the meeting, or
o If a shareholder has executed a proxy but is present at the
meeting and wishes to vote in person, by notifying the
secretary of your fund (without complying with any
formalities) at any time before it is voted.
Being present at the meeting alone does not revoke a previously executed and
returned proxy.
28
<PAGE>
Outstanding Shares and Quorum
As of September 17, 1997, 1,351,419 Class A shares and 1,906,416 Class B shares
of beneficial interest of your fund were outstanding. Only shareholders of
record on September 17, 1997 (the "record date") are entitled to notice of and
to vote at the meeting. A majority of the outstanding shares of your fund that
are entitled to vote will be considered a quorum for the transaction of
business.
Other Business
Your fund's board of trustees knows of no business to be presented for
consideration at the meeting other than the proposal. If other business is
properly brought before the meeting, proxies will be voted according to the best
judgment of the persons named as proxies.
Adjournments
If a quorum is not present in person or by proxy at the time any session of the
meeting is called to order, the persons named as proxies may vote those proxies
that have been received to adjourn the meeting to a later date. If a quorum is
present but there are not sufficient votes in favor of the proposal, the persons
named as proxies may propose one or more adjournments of the meeting to permit
further solicitation of proxies concerning the proposal. Any adjournment will
require the affirmative vote of a majority of your fund's shares at the session
of the meeting to be adjourned. If an adjournment of the meeting is proposed
because there are not sufficient votes in favor of the proposal, the persons
named as proxies will vote those proxies favoring the proposal in favor of
adjournment, and will vote those proxies against the reorganization against
adjournment.
Telephone Voting
In addition to soliciting proxies by mail, by fax or in person, your fund may
also arrange to have votes recorded by telephone by officers and employees of
your fund or by personnel of the adviser or transfer agent. The telephone voting
procedure is designed to verify a shareholder's identity, to allow a shareholder
to authorize the voting of shares in accordance with the shareholder's
instructions and to confirm that the voting instructions have been properly
recorded. If these procedures were subject to a successful legal challenge,
these telephone votes would not be counted at the meeting. Your fund has not
obtained an opinion of counsel about telephone voting, but is currently not
aware of any challenge.
o A shareholder will be called on a recorded line at the
telephone number in the fund's account records and will be
asked to provide the shareholder's social security number or
29
<PAGE>
other identifying information.
o The shareholder will then be given an opportunity to authorize
proxies to vote his or her shares at the meeting in accordance
with the shareholder's instructions.
o To ensure that the shareholder's instructions have been
recorded correctly, the shareholder will also receive a
confirmation of the voting instructions by mail.
o A toll-free number will be available in case the voting
information contained in the confirmation is incorrect.
o If the shareholder decides after voting by telephone to attend
the meeting, the shareholder can revoke the proxy at that time
and vote the shares at the meeting.
OWNERSHIP OF SHARES OF THE FUNDS
To the knowledge of the fund, as of August 29, 1997, the following persons owned
of record or beneficially 5% or more of the outstanding Class A and Class B
shares of your fund. No pesons owned of record or beneficially 5% or more of the
outstanding Class A and Class B shares of Global Fund.
- ---------------------------------------------- ----------------------
Names and Addresses of Owners Global Marketplace
of More Than 5% of Shares Fund
---------- -----------
Class A Class B
- ---------------------------------------------- ---------- -----------
Roland & Company 9.69%
C/O Mercantile Bank of
St Louis NA Trust Securities Unit P.O. Box 387
Main Post Office
St. Louis, MO 63166
- ---------------------------------------------- ---------- -----------
MLPF & S for the Sole Benefit of its Customers 15.46%
Attn Fund Administration
480 Deer Lake Drive East
Jacksonville FL 32246
- ---------------------------------------------- ----------------------
As of August 29, 1997, the trustees and officers of your fund and Global Fund,
each as a group, owned in the aggregate less than 1% of the outstanding shares
of their respective funds.
30
<PAGE>
EXPERTS
The financial statements and the financial highlights of Global Marketplace Fund
and Global Fund, each as of October 31, 1996 and for the years then ended, are
incorporated by reference into this proxy statement and prospectus. These
financial statements and highlights have been independently audited by Price
Waterhouse LLP as stated in their reports appearing in the statement of
additional information. These financial statements and highlights are included
in reliance upon the reports given upon the authority of such firms as experts
in accounting and auditing.
AVAILABLE INFORMATION
Each fund is subject to the informational requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 and files reports,
proxy statements and other information with the SEC. These reports, proxy
statements and other information filed by the funds can be inspected and copied
(at prescribed rates) at the public reference facilities of the SEC at 450 Fifth
Street, N.W., Washington, D.C., and at the following regional offices: Chicago
(500 West Madison Street, Suite 1400, Chicago, Illinois); and New York (7 World
Trade Center, Suite 1300, New York, New York). Copies of such material can also
be obtained by mail from the Public Reference Section of the SEC at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition, copies
of these documents may be viewed on-screen or downloaded from the SEC's Internet
site at http://www.sec.gov.
31
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EXHIBIT A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION (the "Agreement") is made this 22nd
day of September, 1997, by and between John Hancock Global Fund (the "Acquiring
Fund"), a series of John Hancock Investment Trust III, a Massachusetts business
trust (the "Trust II"), and John Hancock Global Marketplace Fund (the "Acquired
Fund"), a series of John Hancock World Fund, a Massachusetts business trust (the
"Trust") each with their principal place of business at 101 Huntington Avenue,
Boston, Massachusetts 02199. The Acquiring Fund and the Acquired Fund are
sometimes referred to collectively herein as the "Funds" and individually as a
"Fund."
This Agreement is intended to be and is adopted as a plan of "reorganization,"
as such term is used in Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "Code"). The reorganization will consist of the transfer of all of
the assets of the Acquired Fund to the Acquiring Fund in exchange solely for the
issuance of Class A and Class B shares of beneficial interest of the Acquiring
Fund (the "Acquiring Fund Shares") to the Acquired Fund and the assumption by
the Acquiring Fund of all of the liabilities of the Acquired Fund, followed by
the distribution by the Acquired Fund, on or promptly after the Closing Date
hereinafter referred to, of the Acquiring Fund Shares to the shareholders of the
Acquired Fund in liquidation and termination of the Acquired Fund as provided
herein, all upon the terms and conditions set forth in this Agreement.
In consideration of the premises of the covenants and agreements hereinafter set
forth, the parties hereto covenant and agree as follows:
1. TRANSFER OF ASSETS OF THE ACQUIRED FUND IN EXCHANGE FOR ASSUMPTION OF
LIABILITIES AND ISSUANCE OF ACQUIRING FUND SHARES; LIQUIDATION OF THE
ACQUIRED FUND
1.1 The Acquired Fund will transfer all of its assets (consisting, without
limitation, of portfolio securities and instruments, dividends and interest
receivables, cash and other assets), as set forth in the statement of
assets and liabilities referred to in Paragraph 7.2 hereof (the "Statement
of Assets and Liabilities"), to the Acquiring Fund free and clear of all
liens and encumbrances, except as otherwise provided herein, in exchange
for (i) the assumption by the Acquiring Fund of the known and unknown
liabilities of the Acquired Fund, including the liabilities set forth in
the
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Statement of Assets and Liabilities (the "Acquired Fund Liabilities"),
which shall be assigned and transferred to the Acquiring Fund by the
Acquired Fund and assumed by the Acquiring Fund, and (ii) delivery by the
Acquiring Fund to the Acquired Fund, for distribution pro rata by the
Acquired Fund to its shareholders in proportion to their respective
ownership of Class A and/or Class B shares of beneficial interest of the
Acquired Fund, as of the close of business on December 5, 1997 (the
"Closing Date"), of a number of the Acquiring Fund Shares having an
aggregate net asset value equal, in the case of each class of Acquiring
Fund Shares, to the value of the assets, less such liabilities (herein
referred to as the "net value of the assets") attributable to the
applicable class, assumed, assigned and delivered, all determined as
provided in Paragraph 2.1 hereof and as of a date and time as specified
therein. Such transactions shall take place at the closing provided for in
Paragraph 3.1 hereof (the "Closing"). All computations shall be provided by
Investors Bank & Trust Company (the "Custodian"), as custodian and pricing
agent for the Acquiring Fund and the Acquired Fund.
1.2 The Acquired Fund has provided the Acquiring Fund with a list of the
current securities holdings of the Acquired Fund as of the date of
execution of this Agreement. The Acquired Fund reserves the right to sell
any of these securities (except to the extent sales may be limited by
representations made in connection with issuance of the tax opinion
provided for in paragraph 8.6 hereof) but will not, without the prior
approval of the Acquiring Fund, acquire any additional securities other
than securities of the type in which the Acquiring Fund is permitted to
invest.
1.3 The Acquiring Fund and the Acquired Fund shall each bear its own expenses
in connection with the transactions contemplated by this Agreement.
1.4 On or as soon after the Closing Date as is conveniently practicable (the
"Liquidation Date"), the Acquired Fund will liquidate and distribute pro
rata to shareholders of record (the "Acquired Fund shareholders"),
determined as of the close of regular trading on the New York Stock
Exchange on the Closing Date, the Acquiring Fund Shares received by the
Acquired Fund pursuant to Paragraph 1.1 hereof. Such liquidation and
distribution will be accomplished by the transfer of the Acquiring Fund
Shares then credited to the account of the Acquired Fund on the books of
the Acquiring Fund, to open accounts on the share records of the Acquiring
Fund in the names of the Acquired Fund shareholders and representing the
respective pro rata number and class of Acquiring Fund
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Shares due such shareholders. Acquired Fund shareholders who own Class A
shares of the Acquired Fund will receive Class A Acquiring Fund Shares and
Acquired Fund shareholders who own Class B shares of the Acquired Fund will
receive Class B Acquiring Fund Shares. The Acquiring Fund shall not issue
certificates representing Acquiring Fund Shares in connection with such
exchange.
1.5 The Acquired Fund shareholders holding certificates representing their
ownership of shares of beneficial interest of the Acquired Fund shall
surrender such certificates or deliver an affidavit with respect to lost
certificates in such form and accompanied by such surety bonds as the
Acquired Fund may require (collectively, an "Affidavit"), to John Hancock
Signature Services, Inc. prior to the Closing Date. Any Acquired Fund share
certificate which remains outstanding on the Closing Date shall be deemed
to be canceled, shall no longer evidence ownership of shares of beneficial
interest of the Acquired Fund and shall evidence ownership of Acquiring
Fund Shares. Unless and until any such certificate shall be so surrendered
or an Affidavit relating thereto shall be delivered, dividends and other
distributions payable by the Acquiring Fund subsequent to the Liquidation
Date with respect to Acquiring Fund Shares shall be paid to the holder of
such certificate(s), but such shareholders may not redeem or transfer
Acquiring Fund Shares received in the Reorganization. The Acquiring Fund
will not issue share certificates in the Reorganization.
1.6 Any transfer taxes payable upon issuance of Acquiring Fund Shares in a name
other than the registered holder of the Acquired Fund Shares on the books
of the Acquired Fund as of that time shall, as a condition of such issuance
and transfer, be paid by the person to whom such Acquiring Fund Shares are
to be issued and transferred.
1.7 The existence of the Acquired Fund shall be terminated as promptly as
practicable following the Liquidation Date.
1.8 Any reporting responsibility of the Trust, including, but not limited to,
the responsibility for filing of regulatory reports, tax returns, or other
documents with the Securities and Exchange Commission (the "Commission"),
any state securities commissions, and any federal, state or local tax
authorities or any other relevant regulatory authority, is and shall remain
the responsibility of the Trust.
2. VALUATION
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2.1 The net asset values of the Class A and Class B Acquiring Fund Shares and
the net values of the assets and liabilities of the Acquired Fund
attributable to its Class A and Class B shares to be transferred shall, in
each case, be determined as of the close of business (4:00 p.m. Boston
time) on the Closing Date. The net asset values of the Class A and Class B
Acquiring Fund Shares shall be computed by the Custodian in the manner set
forth in the Acquiring Fund's Declaration of Trust as amended and restated
(the "Declaration"), or By-Laws and the Acquiring Fund's then-current
prospectus and statement of additional information and shall be computed in
each case to not fewer than four decimal places. The net values of the
assets of the Acquired Fund attributable to its Class A and Class B shares
to be transferred shall be computed by the Custodian by calculating the
value of the assets of each class transferred by the Acquired Fund and by
subtracting therefrom the amount of the liabilities of each class assigned
and transferred to and assumed by the Acquiring Fund on the Closing Date,
said assets and liabilities to be valued in the manner set forth in the
Acquired Fund's then current prospectus and statement of additional
information and shall be computed in each case to not fewer than four
decimal places.
2.2 The number of shares of each class of Acquiring Fund Shares to be issued
(including fractional shares, if any) in exchange for the Acquired Fund's
assets shall be determined by dividing the value of the Acquired Fund's
assets attributable to a class, less the liabilities attributable to that
class assumed by the Acquiring Fund, by the Acquiring Fund's net asset
value per share of the same class, all as determined in accordance with
Paragraph 2.1 hereof.
2.3 All computations of value shall be made by the Custodian in accordance with
its regular practice as pricing agent for the Funds.
3. CLOSING AND CLOSING DATE
3.1 The Closing Date shall be December 5, 1997 or such other date on or before
June 30, 1998 as the parties may agree. The Closing shall be held as of
5:00 p.m. at the offices of the Trust II and the Trust, 101 Huntington
Avenue, Boston, Massachusetts 02199, or at such other time and/or place as
the parties may agree.
3.2 Portfolio securities that are not held in book-entry form in the name of
the Custodian as record holder for the Acquired Fund shall be presented by
the Acquired Fund to the Custodian for examination no later than three
business days preceding the Closing Date. Portfolio securities
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which are not held in book-entry form shall be delivered by the Acquired
Fund to the Custodian for the account of the Acquiring Fund on the Closing
Date, duly endorsed in proper form for transfer, in such condition as to
constitute good delivery thereof in accordance with the custom of brokers,
and shall be accompanied by all necessary federal and state stock transfer
stamps or a check for the appropriate purchase price thereof. Portfolio
securities held of record by the Custodian in book-entry form on behalf of
the Acquired Fund shall be delivered to the Acquiring Fund by the Custodian
by recording the transfer of beneficial ownership thereof on its records.
The cash delivered shall be in the form of currency or by the Custodian
crediting the Acquiring Fund's account maintained with the Custodian with
immediately available funds.
3.3 In the event that on the Closing Date (a) the New York Stock Exchange shall
be closed to trading or trading thereon shall be restricted or (b) trading
or the reporting of trading on said Exchange or elsewhere shall be
disrupted so that accurate appraisal of the value of the net assets of the
Acquiring Fund or the Acquired Fund is impracticable, the Closing Date
shall be postponed until the first business day after the day when trading
shall have been fully resumed and reporting shall have been restored;
provided that if trading shall not be fully resumed and reporting restored
on or before June 30, 1998, this Agreement may be terminated by the
Acquiring Fund or by the Acquired Fund upon the giving of written notice to
the other party.
3.4 The Acquired Fund shall deliver at the Closing a list of the names,
addresses, federal taxpayer identification numbers and backup withholding
and nonresident alien withholding status of the Acquired Fund shareholders
and the number of outstanding shares of each class of beneficial interest
of the Acquired Fund owned by each such shareholder, all as of the close of
business on the Closing Date, certified by its Treasurer, Secretary or
other authorized officer (the "Shareholder List"). The Acquiring Fund shall
issue and deliver to the Acquired Fund a confirmation evidencing the
Acquiring Fund Shares to be credited on the Closing Date, or provide
evidence satisfactory to the Acquired Fund that such Acquiring Fund Shares
have been credited to the Acquired Fund's account on the books of the
Acquiring Fund. At the Closing, each party shall deliver to the other such
bills of sale, checks, assignments, stock certificates, receipts or other
documents as such other party or its counsel may reasonably request.
4. REPRESENTATIONS AND WARRANTIES
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4.1 The Trust on behalf of the Acquired Fund represents, warrants and covenants
to the Acquiring Fund as follows:
(a) The Trust is a business trust, duly organized, validly existing and in
good standing under the laws of The Commonwealth of Massachusetts and
has the power to own all of its properties and assets and, subject to
approval by the shareholders of the Acquired Fund, to carry out the
transactions contemplated by this Agreement. Neither the Trust nor the
Acquired Fund is required to qualify to do business in any
jurisdiction in which it is not so qualified or where failure to
qualify would subject it to any material liability or disability. The
Trust has all necessary federal, state and local authorizations to own
all of its properties and assets and to carry on its business as now
being conducted;
(b) The Trust is a registered investment company classified as a
management company and its registration with the Commission as an
investment company under the Investment Company Act of 1940, as
amended (the "1940 Act"), is in full force and effect. The Acquired
Fund is a diversified series of the Trust;
(c) The Trust and the Acquired Fund are not, and the execution, delivery
and performance of their obligations under this Agreement will not
result, in violation of any provision of the Trust's Declaration of
Trust, as amended and restated (the "Trust's Declaration") or By-Laws
or of any agreement, indenture, instrument, contract, lease or other
undertaking to which the Trust or the Acquired Fund is a party or by
which it is bound;
(d) Except as otherwise disclosed in writing and accepted by the Acquiring
Fund, no material litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending or threatened against the Trust or the Acquired Fund or any of
the Acquired Fund's properties or assets. The Trust knows of no facts
which might form the basis for the institution of such proceedings,
and neither the Trust nor the Acquired Fund is a party to or subject
to the provisions of any order, decree or judgment of any court or
governmental body which materially and adversely affects the Acquired
Fund's business or its ability to consummate the transactions herein
contemplated;
(e) The Acquired Fund has no material contracts or other commitments
(other than this Agreement or agreements for the purchase of
securities entered into in the ordinary course of business and
consistent with its obligations under this Agreement) which will not
be terminated without liability to the Acquired Fund at or prior to
the Closing Date;
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(f) The unaudited statement of assets and liabilities, including the
schedule of investments, of the Acquired Fund as of April 30, 1997 and
the related statement of operations for the six months then ended, and
the statement of changes in net assets for the year ended August 31,
1996, and the period from September 1, 1996 to October 31, 1996, and
the six months ended April 30, 1997 (copies of which have been
furnished to the Acquiring Fund) present fairly in all material
respects the financial condition of the Acquired Fund as of April 30,
1997 and the results of its operations for the period then ended in
accordance with generally accepted accounting principles consistently
applied, and there were no known actual or contingent liabilities of
the Acquired Fund as of the respective dates thereof not disclosed
therein;
(g) Since April 30, 1997, there has not been any material adverse change
in the Acquired Fund's financial condition, assets, liabilities, or
business other than changes occurring in the ordinary course of
business, or any incurrence by the Acquired Fund of indebtedness
maturing more than one year from the date such indebtedness was
incurred, except as otherwise disclosed to and accepted by the
Acquiring Fund;
(h) At the date hereof and by the Closing Date, all federal, state and
other tax returns and reports, including information returns and payee
statements, of the Acquired Fund required by law to have been filed or
furnished by such dates shall have been filed or furnished, and all
federal, state and other taxes, interest and penalties shall have been
paid so far as due, or provision shall have been made for the payment
thereof, and to the best of the Acquired Fund's knowledge no such
return is currently under audit and no assessment has been asserted
with respect to such returns or reports;
(i) Each of the Acquired Fund and its predecessors has qualified as a
regulated investment company for each taxable year of its operation
and the Acquired Fund will qualify as such as of the Closing Date with
respect to its taxable year ending on the Closing Date;
(j) The authorized capital of the Acquired Fund consists of an unlimited
number of shares of beneficial interest, no par value. All issued and
outstanding shares of beneficial interest of the Acquired Fund are,
and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and nonassessable by the Trust. All of the
issued and outstanding shares of beneficial interest of the Acquired
Fund will, at the time of Closing, be held by the persons and in the
amounts and classes set forth
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in the Shareholder List submitted to the Acquiring Fund pursuant to
Paragraph 3.4 hereof. The Acquired Fund does not have outstanding any
options, warrants or other rights to subscribe for or purchase any of its
shares of beneficial interest, nor is there outstanding any security
convertible into any of its shares of beneficial interest;
(k) At the Closing Date, the Acquired Fund will have good and marketable
title to the assets to be transferred to the Acquiring Fund pursuant
to Paragraph 1.1 hereof, and full right, power and authority to sell,
assign, transfer and deliver such assets hereunder, and upon delivery
and payment for such assets, the Acquiring Fund will acquire good and
marketable title thereto subject to no restrictions on the full
transfer thereof, including such restrictions as might arise under the
Securities Act of 1933, as amended (the "1933 Act");
(l) The execution, delivery and performance of this Agreement have been
duly authorized by all necessary action on the part of the Trust on
behalf of the Acquired Fund, and this Agreement constitutes a valid
and binding obligation of the Trust and the Acquired Fund enforceable
in accordance with its terms, subject to the approval of the Acquired
Fund's shareholders;
(m) The information to be furnished by the Acquired Fund to the Acquiring
Fund for use in applications for orders, registration statements,
proxy materials and other documents which may be necessary in
connection with the transactions contemplated hereby shall be accurate
and complete and shall comply in all material respects with federal
securities and other laws and regulations thereunder applicable
thereto;
(n) The proxy statement of the Acquired Fund (the "Proxy Statement") to be
included in the Registration Statement referred to in Paragraph 5.7
hereof (other than written information furnished by the Acquiring Fund
for inclusion therein, as covered by the Acquiring Fund's warranty in
Paragraph 4.2(m) hereof), on the effective date of the Registration
Statement, on the date of the meeting of the Acquired Fund
shareholders and on the Closing Date, shall not contain any untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which such statements were made, not
misleading;
(o) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Acquired Fund of the transactions contemplated by this Agreement;
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(p) All of the issued and outstanding shares of beneficial interest of the
Acquired Fund have been offered for sale and sold in conformity with
all applicable federal and state securities laws;
(q) The prospectus of the Acquired Fund, dated March 1, 1997 (the
"Acquired Fund Prospectus"), previously furnished to the Acquiring
Fund, does not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which
they were made, not misleading.
4.2 The Trust II on behalf of the Acquiring Fund represents, warrants and
covenants to the Acquired Fund as follows:
(a) The Trust II is a business trust duly organized, validly existing and
in good standing under the laws of The Commonwealth of Massachusetts
and has the power to own all of its properties and assets and to carry
out the Agreement. Neither the Trust II nor the Acquiring Fund is
required to qualify to do business in any jurisdiction in which it is
not so qualified or where failure to qualify would subject it to any
material liability or disability. The Trust II has all necessary
federal, state and local authorizations to own all of its properties
and assets and to carry on its business as now being conducted;
(b) The Trust II is a registered investment company classified as a
management company and its registration with the Commission as an
investment company under the 1940 Act is in full force and effect. The
Acquiring Fund is a diversified series of the Trust II;
(c) The prospectus (the "Acquiring Fund Prospectus") and statement of
additional information for Class A and Class B shares of the Acquiring
Fund, each dated March 1, 1997, and any amendments or supplements
thereto on or prior to the Closing Date, and the Registration
Statement on Form N-14 to be filed in connection with this Agreement
(the "Registration Statement") (other than written information
furnished by the Acquired Fund for inclusion therein, as covered by
the Acquired Fund's warranty in Paragraph 4.1(m) hereof) will conform
in all material respects to the applicable requirements of the 1933
Act and the 1940 Act and the rules and regulations of the Commission
thereunder, the Acquiring Fund Prospectus does not include any untrue
statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements
therein, in light of the
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circumstances under which they were made, not misleading and the
Registration Statement will not include any untrue statement of
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
(d) At the Closing Date, the Trust II on behalf of the Acquiring Fund will
have good and marketable title to the assets of the Acquiring Fund;
(e) The Trust II and the Acquiring Fund are not, and the execution,
delivery and performance of their obligations under this Agreement
will not result, in violation of any provisions of the Trust II's
Declaration, or By-Laws or of any agreement, indenture, instrument,
contract, lease or other undertaking to which the Trust II or the
Acquiring Fund is a party or by which the Trust II or the Acquiring
Fund is bound;
(f) Except as otherwise disclosed in writing and accepted by the Acquired
Fund, no material litigation or administrative proceeding or
investigation of or before any court or governmental body is currently
pending or threatened against the Trust II or the Acquiring Fund or
any of the Acquiring Fund's properties or assets. The Trust II knows
of no facts which might form the basis for the institution of such
proceedings, and neither the Trust II nor the Acquiring Fund is a
party to or subject to the provisions of any order, decree or judgment
of any court or governmental body which materially and adversely
affects the Acquiring Fund's business or its ability to consummate the
transactions herein contemplated;
(g) The unaudited statement of assets and liabilities, including the
schedule of investments, of the Acquiring Fund as of April 30, 1997
and the related statement of operations for the six months then ended,
and the statement of changes in net assets for the year ended October
31, 1996, and the six months ended April 30, 1997 (copies of which
have been furnished to the Acquired Fund) present fairly in all
material respects the financial condition of the Acquiring Fund as of
April 30, 1997 and the results of its operations for the period then
ended in accordance with generally accepted accounting principles
consistently applied, and there were no known actual or contingent
liabilities of the Acquiring Fund as of the respective dates thereof
not disclosed therein;
(h) Since April 30, 1997, there has not been any material adverse change
in the Acquiring Fund's financial condition, assets, liabilities or
business other than changes occurring in the ordinary course of
business, or any
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incurrence by the Trust II on behalf of the Acquiring Fund of
indebtedness maturing more than one year from the date such
indebtedness was incurred, except as disclosed to and accepted by the
Acquired Fund;
(i) Each of the Acquiring Fund and its predecessors has qualified as a
regulated investment company for each taxable year of its operation
and the Acquiring Fund will qualify as such as of the Closing Date;
(j) The authorized capital of the Trust II consists of an unlimited number
of shares of beneficial interest, no par value per share. All issued
and outstanding shares of beneficial interest of the Acquiring Fund
are, and at the Closing Date will be, duly and validly issued and
outstanding, fully paid and nonassessable by the Trust II. The
Acquiring Fund does not have outstanding any options, warrants or
other rights to subscribe for or purchase any of its shares of
beneficial interest, nor is there outstanding any security convertible
into any of its shares of beneficial interest;
(k) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary action on the part of the Trust II on
behalf of the Acquiring Fund, and this Agreement constitutes a valid
and binding obligation of the Acquiring Fund enforceable in accordance
with its terms;
(l) The Acquiring Fund Shares to be issued and delivered to the Acquired
Fund pursuant to the terms of this Agreement, when so issued and
delivered, will be duly and validly issued shares of beneficial
interest of the Acquiring Fund and will be fully paid and
nonassessable by the Trust II;
(m) The information to be furnished by the Acquiring Fund for use in
applications for orders, registration statements, proxy materials and
other documents which may be necessary in connection with the
transactions contemplated hereby shall be accurate and complete and
shall comply in all material respects with federal securities and
other laws and regulations applicable thereto; and
(n) No consent, approval, authorization or order of any court or
governmental authority is required for the consummation by the
Acquiring Fund of the transactions contemplated by the Agreement,
except for the registration of the Acquiring Fund Shares under the
1933 Act and the 1940 Act.
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5. COVENANTS OF THE ACQUIRING FUND AND THE ACQUIRED FUND
5.1 Except as expressly contemplated herein to the contrary, the Trust on
behalf of the Acquired Fund and the Trust II on behalf of Acquiring Fund,
will operate their respective businesses in the ordinary course between the
date hereof and the Closing Date, it being understood that such ordinary
course of business will include customary dividends and distributions and
any other distributions necessary or desirable to avoid federal income or
excise taxes.
5.2 The Trust will call a meeting of the Acquired Fund shareholders to consider
and act upon this Agreement and to take all other action necessary to
obtain approval of the transactions contemplated herein.
5.3 The Acquired Fund covenants that the Acquiring Fund Shares to be issued
hereunder are not being acquired by the Acquired Fund for the purpose of
making any distribution thereof other than in accordance with the terms of
this Agreement.
5.4 The Trust on behalf of the Acquired Fund will provide such information
within its possession or reasonably obtainable as the Trust II on behalf of
the Acquiring Fund requests concerning the beneficial ownership of the
Acquired Fund's shares of beneficial interest.
5.5 Subject to the provisions of this Agreement, the Acquiring Fund and the
Acquired Fund each shall take, or cause to be taken, all action, and do or
cause to be done, all things reasonably necessary, proper or advisable to
consummate the transactions contemplated by this Agreement.
5.6 The Trust on behalf of the Acquired Fund shall furnish to the Trust II on
behalf of the Acquiring Fund on the Closing Date the Statement of Assets
and Liabilities of the Acquired Fund as of the Closing Date, which
statement shall be prepared in accordance with generally accepted
accounting principles consistently applied and shall be certified by the
Acquired Fund's Treasurer or Assistant Treasurer. As promptly as
practicable but in any case within 60 days after the Closing Date, the
Acquired Fund shall furnish to the Acquiring Fund, in such form as is
reasonably satisfactory to the Trust II, a statement of the earnings and
profits of the Acquired Fund for federal income tax purposes and of any
capital loss carryovers and other items that will be carried over to the
Acquiring Fund as a result of Section 381 of the Code, and which statement
will be certified by the President of the Acquired Fund.
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5.7 The Trust II on behalf of the Acquiring Fund will prepare and file with the
Commission the Registration Statement in compliance with the 1933 Act and
the 1940 Act in connection with the issuance of the Acquiring Fund Shares
as contemplated herein.
5.8 The Trust on behalf of the Acquired Fund will prepare a Proxy Statement, to
be included in the Registration Statement in compliance with the 1933 Act,
the Securities Exchange Act of 1934, as amended (the "1934 Act"), and the
1940 Act and the rules and regulations thereunder (collectively, the
"Acts") in connection with the special meeting of shareholders of the
Acquired Fund to consider approval of this Agreement.
6. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST ON BEHALF OF THE ACQUIRED
FUND
The obligations of the Trust on behalf of the Acquired Fund to complete the
transactions provided for herein shall be, at its election, subject to the
performance by the Trust II on behalf of the Acquiring Fund of all the
obligations to be performed by it hereunder on or before the Closing Date, and,
in addition thereto, the following further conditions:
6.1 All representations and warranties of the Trust II on behalf of the
Acquiring Fund contained in this Agreement shall be true and correct in all
material respects as of the date hereof and, except as they may be affected
by the transactions contemplated by this Agreement, as of the Closing Date
with the same force and effect as if made on and as of the Closing Date;
and
6.2 The Trust II on behalf of the Acquiring Fund shall have delivered to the
Acquired Fund a certificate executed in its name by the Trust II's
President or Vice President and its Treasurer or Assistant Treasurer, in
form and substance satisfactory to the Acquired Fund and dated as of the
Closing Date, to the effect that the representations and warranties of the
Trust II on behalf of the Acquiring Fund made in this Agreement are true
and correct at and as of the Closing Date, except as they may be affected
by the transactions contemplated by this Agreement, and as to such other
matters as the Trust on behalf of the Acquired Fund shall reasonably
request.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST II ON BEHALF OF THE
ACQUIRING FUND
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The obligations of the Trust II on behalf of the Acquiring Fund to complete the
transactions provided for herein shall be, at its election, subject to the
performance by the Acquired Fund of all the obligations to be performed by it
hereunder on or before the Closing Date and, in addition thereto, the following
conditions:
7.1 All representations and warranties of the Acquired Fund contained in this
Agreement shall be true and correct in all material respects as of the date
hereof and, except as they may be affected by the transactions contemplated
by this Agreement, as of the Closing Date with the same force and effect as
if made on and as of the Closing Date;
7.2 The Trust on behalf of the Acquired Fund shall have delivered to the Trust
II on behalf of the Acquiring Fund the Statement of Assets and Liabilities
of the Acquired Fund, together with a list of its portfolio securities
showing the federal income tax bases and holding periods of such
securities, as of the Closing Date, certified by the Treasurer or Assistant
Treasurer of the Trust;
7.3 The Trust on behalf of the Acquired Fund shall have delivered to the Trust
II on behalf of the Acquiring Fund on the Closing Date a certificate
executed in the name of the Acquired Fund by a President or Vice President
and a Treasurer or Assistant Treasurer of the Trust, in form and substance
satisfactory to the Trust II on behalf of the Acquiring Fund and dated as
of the Closing Date, to the effect that the representations and warranties
of the Acquired Fund in this Agreement are true and correct at and as of
the Closing Date, except as they may be affected by the transactions
contemplated by this Agreement, and as to such other matters as the Trust
II on behalf of the Acquiring Fund shall reasonably request; and
7.4 At or prior to the Closing Date, the Acquired Fund's investment adviser, or
an affiliate thereof, shall have made all payments, or applied all credits,
to the Acquired Fund required by any applicable contractual expense
limitation.
8. FURTHER CONDITIONS PRECEDENT TO OBLIGATIONS OF THE TRUST AND THE TRUST II
The obligations hereunder of the Trust II on behalf of the Acquiring Fund and
the Trust on behalf of the Acquired Fund are each subject to the further
conditions that on or before the Closing Date:
A-14
<PAGE>
8.1 The Agreement and the transactions contemplated herein shall have been
approved by the requisite vote of the holders of the outstanding shares of
beneficial interest of the Acquired Fund in accordance with the provisions
of the Trust's Declaration and By-Laws, and certified copies of the
resolutions evidencing such approval by the Acquired Fund's shareholders
shall have been delivered by the Acquired Fund to the Trust II on behalf of
the Acquiring Fund;
8.2 On the Closing Date no action, suit or other proceeding shall be pending
before any court or governmental agency in which it is sought to restrain
or prohibit, or obtain changes or other relief in connection with, this
Agreement or the transactions contemplated herein;
8.3 All consents of other parties and all other consents, orders and permits of
federal, state and local regulatory authorities (including those of the
Commission and their "no-action" positions) deemed necessary by the Trust
or the Trust II to permit consummation, in all material respects, of the
transactions contemplated hereby shall have been obtained, except where
failure to obtain any such consent, order or permit would not involve a
risk of a material adverse effect on the assets or properties of the
Acquiring Fund or the Acquired Fund, provided that either party hereto may
waive any such conditions for itself;
8.4 The Registration Statement shall have become effective under the 1933 Act
and the 1940 Act and no stop orders suspending the effectiveness thereof
shall have been issued and, to the best knowledge of the parties hereto, no
investigation or proceeding for that purpose shall have been instituted or
be pending, threatened or contemplated under the 1933 Act or the 1940 Act;
8.5 The Acquired Fund shall have distributed to its shareholders, in a
distribution or distributions qualifying for the deduction for dividends
paid under Section 561 of the Code, all of its investment company taxable
income (as defined in Section 852(b)(2) of the Code determined without
regard to Section 852(b)(2)(D) of the Code) for its taxable year ending on
the Closing Date, all of the excess of (i) its interest income excludable
from gross income under Section 103(a) of the Code over (ii) its deductions
disallowed under Sections 265 and 171(a)(2) of the Code for its taxable
year ending on the Closing Date, and all of its net capital gain (as such
term is used in Sections 852(b)(3)(A) and (C) of the Code), after reduction
by any available capital loss carryforward, for its taxable year ending on
the Closing Date; and
A-15
<PAGE>
8.6 The parties shall have received an opinion of Hale and Dorr LLP,
satisfactory to the Trust on behalf of the Acquired Fund and the Trust II
on behalf of the Acquiring Fund, substantially to the effect that for
federal income tax purposes:
(a) The acquisition by the Acquiring Fund of all of the assets of the
Acquired Fund solely in exchange for the issuance of Acquiring Fund
Shares to the Acquired Fund and the assumption of all of the Acquired
Fund Liabilities by the Acquiring Fund, followed by the distribution
by the Acquired Fund, in liquidation of the Acquired Fund, of
Acquiring Fund Shares to the shareholders of the Acquired Fund in
exchange for their shares of beneficial interest of the Acquired Fund
and the termination of the Acquired Fund, will constitute a
"reorganization" within the meaning of Section 368(a) of the Code, and
the Acquired Fund and the Acquiring Fund will each be "a party to a
reorganization" within the meaning of Section 368(b) of the Code;
(b) No gain or loss will be recognized by the Acquired Fund upon (i) the
transfer of all of its assets to the Acquiring Fund solely in exchange
for the issuance of Acquiring Fund Shares to the Acquired Fund and the
assumption of all of the Acquired Fund Liabilities by the Acquiring
Fund; and (ii) the distribution by the Acquired Fund of such Acquiring
Fund Shares to the shareholders of the Acquired Fund;
(c) No gain or loss will be recognized by the Acquiring Fund upon the
receipt of the assets of the Acquired Fund solely in exchange for the
issuance of the Acquiring Fund Shares to the Acquired Fund and the
assumption of all of the Acquired Fund Liabilities by the Acquiring
Fund;
(d) The basis of the assets of the Acquired Fund acquired by the Acquiring
Fund will be, in each instance, the same as the basis of those assets
in the hands of the Acquired Fund immediately prior to the transfer;
(e) The tax holding period of the assets of the Acquired Fund in the hands
of the Acquiring Fund will, in each instance, include the Acquired
Fund's tax holding period for those assets;
(f) The shareholders of the Acquired Fund will not recognize gain or loss
upon the exchange of all of their shares of beneficial interest of the
Acquired Fund solely for Acquiring Fund Shares as part of the
transaction;
A-16
<PAGE>
(g) The basis of the Acquiring Fund Shares received by the Acquired Fund
shareholders in the transaction will be the same as the basis of the
shares of beneficial interest of the Acquired Fund surrendered in
exchange therefor; and
(h) The tax holding period of the Acquiring Fund Shares received by the
Acquired Fund shareholders will include, for each shareholder, the tax
holding period for the shares of the Acquired Fund surrendered in
exchange therefor, provided that the Acquired Fund shares were held as
capital assets on the date of the exchange.
The Trust II and the Trust agree to make and provide representations with
respect to the Acquiring Fund and the Acquired Fund, respectively, which are
reasonably necessary to enable Hale and Dorr LLP to deliver an opinion
substantially as set forth in this Paragraph 8.6. Notwithstanding anything
herein to the contrary, neither the Trust nor the Trust II may waive the
conditions set forth in this Paragraph 8.6.
9. BROKERAGE FEES AND EXPENSES
9.1 The Trust II on behalf of the Acquiring Fund, and the Trust on behalf of
the Acquired Fund each represent and warrant to the other that there are no
brokers or finders entitled to receive any payments in connection with the
transactions provided for herein.
9.2 The Acquiring Fund and the Acquired Fund shall each be liable solely for
its own expenses incurred in connection with entering into and carrying out
the provisions of this Agreement whether or not the transactions
contemplated hereby are consummated.
10. ENTIRE AGREEMENT; SURVIVAL OF WARRANTIES
10.1 The Trust II on behalf of the Acquiring Fund, and the Trust on behalf of
the Acquired Fund agree that neither party has made any representation,
warranty or covenant not set forth herein or referred to in Paragraph 4
hereof and that this Agreement constitutes the entire agreement between the
parties.
10.2 The representations, warranties and covenants contained in this Agreement
or in any document delivered pursuant hereto or in connection herewith
shall survive the consummation of the transactions contemplated hereunder.
A-17
<PAGE>
11. TERMINATION
11.1 This Agreement may be terminated by the mutual agreement of the Trust II,
on behalf of the Acquiring Fund, and the Trust on behalf of the Acquired
Fund. In addition, either party may at its option terminate this Agreement
at or prior to the Closing Date:
(a) because of a material breach by the other of any representation,
warranty, covenant or agreement contained herein to be performed at or
prior to the Closing Date;
(b) because of a condition herein expressed to be precedent to the
obligations of the terminating party which has not been met and which
reasonably appears will not or cannot be met;
(c) by resolution of the Trust II's Board of Trustees if circumstances
should develop that, in the good faith opinion of such Board, make
proceeding with the Agreement not in the best interests of the
Acquiring Fund's shareholders; or
(d) by resolution of the Trust's Board of Trustees if circumstances should
develop that, in the good faith opinion of such Board, make proceeding
with the Agreement not in the best interests of the Acquired Fund's
shareholders.
11.2 In the event of any such termination, there shall be no liability for
damages on the part of the Trust II, the Acquiring Fund, the Trust, or the
Acquired Fund, or the Trustees or officers of the Trust II or the Trust,
but each party shall bear the expenses incurred by it incidental to the
preparation and carrying out of this Agreement.
12. AMENDMENTS
This Agreement may be amended, modified or supplemented in such manner as may be
mutually agreed upon by the authorized officers of the Trust and the Trust II.
However, following the meeting of shareholders of the Acquired Fund held
pursuant to Paragraph 5.2 of this Agreement, no such amendment may have the
effect of changing the provisions regarding the method for determining the
number of Acquiring Fund Shares to be received by the Acquired Fund shareholders
under this Agreement to the detriment of such shareholders without their further
approval; provided that nothing contained in this Article 12
A-18
<PAGE>
shall be construed to prohibit the parties from amending this Agreement to
change the Closing Date.
13. NOTICES
Any notice, report, statement or demand required or permitted by any provisions
of this Agreement shall be in writing and shall be given by prepaid telegraph,
telecopy or certified mail addressed to the Acquiring Fund or to the Acquired
Fund, each at 101 Huntington Avenue, Boston, Massachusetts 02199, Attention:
President, and, in either case, with copies to Hale and Dorr LLP, 60 State
Street, Boston, Massachusetts 02109, Attention: Pamela J.
Wilson, Esq.
14. HEADINGS; COUNTERPARTS; GOVERNING LAW; ASSIGNMENT
14.1 The article and paragraph headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14.2 This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original.
14.3 This Agreement shall be governed by and construed in accordance with the
laws of The Commonwealth of Massachusetts.
14.4 This Agreement shall bind and inure to the benefit of the parties hereto
and their respective successors and assigns, but no assignment or transfer
hereof or of any rights or obligations hereunder shall be made by any party
without the prior written consent of the other party. Nothing herein
expressed or implied is intended or shall be construed to confer upon or
give any person, firm or corporation, other than the parties hereto and
their respective successors and assigns, any rights or remedies under or by
reason of this Agreement.
14.5 All persons dealing with the Trust or the Trust II must look solely to the
property of the Trust or the Trust II, respectively, for the enforcement of
any claims against the Trust or the Trust II as the Trustees, officers,
agents and shareholders of the Trust or the Trust II assume no personal
liability for obligations entered into on behalf of the Trust or the Trust
II, respectively. None of the other series of the Trust or the Trust II
shall be responsible for any obligations assumed by on or behalf of the
Acquired Fund or the Acquiring Fund, respectively, under this Agreement.
A-19
<PAGE>
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first set forth above by its President or Vice President
and has caused its corporate seal to be affixed hereto.
JOHN HANCOCK INVESTMENT TRUST III on behalf of
JOHN HANCOCK GLOBAL FUND
By: /s/ Anne C. Hodsdon
-----------------------------------------
Anne C. Hodsdon
President
JOHN HANCOCK WORLD FUND on behalf of
JOHN HANCOCK GLOBAL MARKETPLACE FUND
By: /s/ Susan S. Newton
------------------------------------------
Susan S. Newton
Vice President and Secretary
A-20
<PAGE>
Thank
You
for mailing
your Proxy Card
promptly!
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
John Hancock Funds, Inc.
101 Huntington Avenue, Boston, MA 02199-7603
1-800-225-5291 1-800-554-6713 (TDD)
John Hancock
Financial Services 300PX 9/97
<PAGE>
JOHN HANCOCK
INTERNATIONAL/
GLOBAL FUNDS
[graphic omitted]
PROSPECTUS
MARCH 1, 1997
This prospectus gives vital information about these funds. For your own benefit
and protection, please read it before you invest, and keep it on hand for future
reference.
Please note that these funds:
o are not bank deposits
o are not federally insured
o are not endorsed by any bank or government agency
o are not guaranteed to achieve their goal(s)
Short-Term Strategic Income Fund may invest up to 67% in junk bonds; read risk
information carefully.
Like all mutual fund shares, these securities have not been approved or
disapproved by the Securities and Exchange Commission or any state securities
commission, nor has the Securities and Exchange Commission or any state
securities commission passed upon the accuracy or adequacy of this prospectus.
Any representation to the contrary is a criminal offense.
GROWTH
GLOBAL FUND
GLOBAL MARKETPLACE FUND
GLOBAL RX FUND
GLOBAL TECHNOLOGY FUND
INTERNATIONAL FUND
PACIFIC BASIN EQUITIES FUND
INCOME
SHORT-TERM STRATEGIC INCOME FUND
WORLD BOND FUND
[GRAPHIC OMITTED] JOHN HANCOCK FUNDS
A Global Investment Management Firm
101 Huntington Avenue, Boston, Massachusetts 02199-7603
<PAGE>
CONTENTS
- -------------------------------------------------------------------------------
A fund-by-fund look at goals, strategies, risks, expenses and financial history.
[GRAPHIC OMITTED] GROWTH
GLOBAL FUND 4
GLOBAL MARKETPLACE FUND 6
GLOBAL RX FUND 8
GLOBAL TECHNOLOGY FUND 10
INTERNATIONAL FUND 12
PACIFIC BASIN EQUITIES FUND 14
[GRAPHIC OMITTED] INCOME
SHORT-TERM STRATEGIC INCOME FUND 16
WORLD BOND FUND 18
Policies and instructions for opening, maintaining and closing an account in any
international/global fund.
YOUR ACCOUNT
CHOOSING A SHARE CLASS 20
HOW SALES CHARGES ARE CALCULATED 20
SALES CHARGE REDUCTIONS AND WAIVERS 21
OPENING AN ACCOUNT 22
BUYING SHARES 23
SELLING SHARES 24
TRANSACTION POLICIES 26
DIVIDENDS AND ACCOUNT POLICIES 26
ADDITIONAL INVESTOR SERVICES 27
Details that apply to the international/global funds as a group.
FUND DETAILS
BUSINESS STRUCTURE 28
SALES COMPENSATION 29
MORE ABOUT RISK 31
FOR MORE INFORMATION BACK COVER
<PAGE>
OVERVIEW
- -------------------------------------------------------------------------------
GOAL OF THE INTERNATIONAL/GLOBAL FUNDS
John Hancock international/global funds invest in foreign and U.S. securities.
Most of the funds invest primarily in stocks and seek long-term growth of
capital. Two funds invest primarily in bonds and seek current income or maximum
total return. Each fund has its own strategy and own risk/reward profile.
Because you could lose money by investing in these funds, be sure to read all
risk disclosure carefully before investing.
WHO MAY WANT TO INVEST
These funds may be appropriate for investors who:
o are seeking to diversify a portfolio of domestic investments
o are seeking access to markets that can be less accessible to individual
investors
o are seeking funds for the growth or income portion of an asset allocation
portfolio
o are investing for goals that are many years in the future
International/global funds may NOT be appropriate if you:
o are investing with a shorter time horizon in mind
o are uncomfortable with an investment whose value may vary substantially
o want to limit your exposure to foreign securities
THE MANAGEMENT FIRM
All John Hancock international/global funds are managed by John Hancock
Advisers, Inc. Founded in 1968, John Hancock Advisers is a wholly owned
subsidiary of John Hancock Mutual Life Insurance Company and manages more than
$19 billion in assets.
FUND INFORMATION KEY
Concise fund-by-fund descriptions begin on the next page. Each description
provides the following information:
[GRAPHIC OMITTED] Goal and strategy The fund's particular investment goals and
the strategies it intends to use in pursuing those goals.
[GRAPHIC OMITTED] Portfolio securities The primary types of securities in which
the fund invests. Secondary investments are described in "More about risk" at
the end of the prospectus.
[GRAPHIC OMITTED] Risk factors The major risk factors associated with the fund.
[GRAPHIC OMITTED] Portfolio management The individual or group (including
subadvisers, if any) designated by the investment adviser to handle the fund's
day-to-day management.
[GRAPHIC OMITTED] Expenses The overall costs borne by an investor in the fund,
including sales charges and annual expenses.
[GRAPHIC OMITTED] Financial highlights A table showing the fund's financial
performance for up to ten years, by share class. A bar chart showing total
return allows you to compare the fund's historical risk level to those of other
funds.
<PAGE>
GLOBAL FUND
REGISTRANT NAME: FREEDOM INVESTMENT TRUST II TICKER SYMBOL CLASS A: JHGAX
CLASS B: FGLOX
- -------------------------------------------------------------------------------
GOAL AND STRATEGY
[GRAPHIC OMITTED] The fund seeks long-term growth of capital. To pursue this
goal, the fund invests primarily in common stocks of foreign and U.S. companies.
The fund maintains a diversified portfolio of company and government securities
from around the world. Under normal circumstances, the fund expects to invest in
the securities markets of at least three countries at any one time, potentially
including the U.S.
The fund does not maintain a fixed allocation of assets, either with respect to
securities type or to geography.
PORTFOLIO SECURITIES
[GRAPHIC OMITTED] Under normal circumstances, the fund invests at least 65% of
assets in common stocks and convertible securities, but may invest in virtually
any type of security, foreign or domestic, including preferred and convertible
securities, warrants and investment-grade debt securities. Not counting
short-term securities, the fund generally expects that no more than 5% of assets
will be invested in debt securities.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, and may engage in other investment
practices.
RISK FACTORS
[GRAPHIC OMITTED] As with any growth fund, the value of your investment will
fluctuate in response to stock market movements.
Because it invests internationally, the fund carries additional risks, including
currency, information, natural event and political risks. These risks, which may
make the fund more volatile than a comparable domestic growth fund, are defined
in "More about risk" starting on page 31. The risks of international investing
are higher in emerging markets such as those of Latin America, Southeast Asia
and Eastern Europe.
To the extent that the fund utilizes higher-risk securities and practices, it
takes on further risks that could adversely affect its performance. Please read
"More about risk" carefully before investing.
MANAGEMENT/SUBADVISER
[GRAPHIC OMITTED] Miren Etcheverry, John L.F. Wills and Gerardo J. Espinoza lead
the portfolio management team. Ms. Etcheverry and Mr. Espinoza are senior vice
presidents and joined John Hancock Funds in December 1996, having been in the
investment business since 1978 and 1979, respectively. Mr. Wills is a senior
vice president of the adviser and managing director of the subadviser, John
Hancock Advisers International. He joined John Hancock Funds in 1987 and has
been in the investment business since 1969.
- -------------------------------------------------------------------------------
INVESTOR EXPENSES
[GRAPHIC OMITTED] Fund investors pay various expenses, either directly or
indirectly. The figures below show the expenses for the past year, adjusted to
reflect any changes. Future expenses may be greater or less.
- -------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
- -------------------------------------------------------------------------------
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
- -------------------------------------------------------------------------------
Maximum sales charge imposed on reinvested dividends none none
- -------------------------------------------------------------------------------
Maximum deferred sales charge none(1) 5.00%
- -------------------------------------------------------------------------------
Redemption fee(2) none none
- -------------------------------------------------------------------------------
Exchange fee none none
- -------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
- -------------------------------------------------------------------------------
Management fee(3) 0.96% 0.96%
- -------------------------------------------------------------------------------
12b-1 fee(4) 0.30% 1.00%
- -------------------------------------------------------------------------------
Other expenses 0.63% 0.63%
- -------------------------------------------------------------------------------
Total fund operating expenses 1.89% 2.59
- -------------------------------------------------------------------------------
EXAMPLE The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
- -------------------------------------------------------------------------------
SHARE CLASS YEAR 1 YEAR 3 YEAR 5 YEAR 10
- -------------------------------------------------------------------------------
Class A shares $68 $106 $147 $260
- -------------------------------------------------------------------------------
Class B shares
Assuming redemption at end of period $76 $111 $158 $275
- -------------------------------------------------------------------------------
Assuming no redemption $26 $ 81 $138 $275
- -------------------------------------------------------------------------------
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Includes a subadviser fee equal to 0.70% of the fund's net assets.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly
pay more than the equivalent of the maximum permitted front-end sales
charge.
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
[GRAPHIC OMITTED] The figures below have been audited by the fund's independent
auditors, Price Waterhouse LLP.
<TABLE>
<CAPTION>
VOLATILITY, AS
INDICATED BY CLASS
B YEAR-BY-YEAR TOTAL
INVESTMENT
RETURN (%) 35.42(4) 7.05 30.22 14.04 34.95 7.97 9.10
- ---------------------------------------------------------------------------------------------------------------------------------
(scale varies from (16.97)(4) (10.42) (3.85) (1.01)
fund to fund)
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS A - PERIOD ENDED: 10/92(1) 10/93 10/94 10/95 10/96
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $11.31 $10.55 $14.30 $14.16 $12.67
- -------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.04)(2) (0.10)(2) (0.07)(2) (0.03)(2) (0.02)(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign
currency transactions (0.72) 3.85 1.24 (0.13) 1.20
- ---------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.76) 3.75 1.17 (0.16) 1.18
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from net realized gain on investments
sold and foreign currency transactions -- -- (1.31) (1.33) (0.88)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.55 $14.30 $14.16 $12.67 $12.97
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE(3) (%) (6.72)(4) 35.55 8.64 (0.37) 9.87
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) ($) 76,980 90,787 100,973 93,597 94,746
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) 2.47(5) 2.12 1.98 1.87 1.88
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) (0.60)(5) (0.86) (0.54) (0.23) (0.19)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 69 108 61 60 98
- ---------------------------------------------------------------------------------------------------------------------------------
Average brokerage commission rate(6) ($) N/A N/A N/A N/A 0.0221
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
CLASS B -
PERIOD ENDED: 5/87(7) 10/87(8) 10/88 10/89 10/90 10/91 10/92 10/93 10/94 10/95 10/96
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning
of period $9.60 $13.00 $10.42 $10.67 $13.58 $ 9.94 $10.92 $10.50 $14.17 $13.93 $12.36
- ---------------------------------------------------------------------------------------------------------------------------------
Net investment
income (loss) 0.08 (0.05) 0.01 (0.10) (0.02) (0.01)(2) (0.12)(2) (0.15)(2) (0.15)(2) (0.11)(2) (0.10)(2)
- ---------------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gain
(loss) on
investments and
foreign currency
transactions 3.32 (2.08) 0.69 3.25 (1.12) 1.35 (0.30) 3.82 1.22 (0.13) 1.16
- ---------------------------------------------------------------------------------------------------------------------------------
Total from
investment
operations 3.40 (2.13) 0.70 3.15 (1.14) 1.34 (0.42) 3.67 1.07 (0.24) 1.06
- ---------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions
from ne
investment
income -- (0.12) -- (0.01) -- -- -- -- -- -- --
- ---------------------------------------------------------------------------------------------------------------------------------
Distributions
from net
realized
gain on
investments
sold and
foreign
currency
transactions -- (0.33) (0.45) (0.23) (2.50) (0.36) -- -- (1.31) (1.33) (0.88)
- ---------------------------------------------------------------------------------------------------------------------------------
Total
distributions -- (0.45) (0.45) (0.24) (2.50) (0.36) -- -- (1.31) (1.33) (0.88)
- ---------------------------------------------------------------------------------------------------------------------------------
Net asset value,
end of period $13.00 $10.42 $10.67 $13.58 $9.94 $10.92 $10.50 $14.17 $13.93 $12.36 $12.54
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT
RETURN AT NET
ASSET
VALUE(3)(%) 35.42(4) (16.97)(4) 7.05 30.22 (10.42) 14.04 (3.85) 34.95 7.97 (1.01) 9.10
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS AND
SUPPLEMENTAL
DATA
- ---------------------------------------------------------------------------------------------------------------------------------
Net assets,
end of period
(000s omitted)($) 62,264 50,883 34,380 35,596 33,281 28,686 11,475 19,340 31,822 24,570 27,599
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of
expenses to
average net
assets (%) 2.38(5 2.56(5) 2.55 2.30 2.46 2.60 2.68 2.49 2.59 2.57 2.54
- ---------------------------------------------------------------------------------------------------------------------------------
Ratio of net
investment
income (loss)
to average
net assets(%) 0.99(5) (0.78)(5) 0.09 (0.47) (0.59) (0.12) (1.03) (1.25) (1.12) (0.89) (0.83)
- ---------------------------------------------------------------------------------------------------------------------------------
Portfolio
turnover rate(%) 91 81 142 138 58 106 69 108 61 60 98
- ---------------------------------------------------------------------------------------------------------------------------------
Average brokerage
commission
rate(6)($) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 0.0221
- ---------------------------------------------------------------------------------------------------------------------------------
(1) Class A shares commenced operations on January 3, 1992.
(2) Based on the average of the shares outstanding at the end of each month.
(3) Assumes dividend reinvestment and does not reflect the effect of sales charges.
(4) Not annualized.
(5) Annualized.
(6) Per portfolio share traded. Required for fiscal years that began September 1, 1995 or later.
(7) For the period September 2, 1986 (commencement of operations) to May 31, 1987.
(8) For the period June 1, 1987 to October 31, 1987.
</TABLE>
<PAGE>
GLOBAL MARKETPLACE FUND
REGISTRANT NAME: JOHN HANCOCK WORLD FUND TICKER SYMBOL CLASS A: JHGMX
CLASS B: JHMBX
- -------------------------------------------------------------------------------
GOAL AND STRATEGY
[GRAPHIC OMITTED] The fund seeks long-term capital appreciation. To pursue this
goal, the fund invests primarily in foreign and U.S. stocks of companies that
merchandise goods and services to consumers or to consumer companies. The fund
seeks companies of any size that appear to possess a competitive advantage, such
as a unique product or distribution method, new technologies or innovative
marketing or sales methods. Under normal circumstances, the fund invests at
least 65% of assets in these companies, and expects to invest in the securities
markets of at least three countries at any one time, potentially including the
U.S.
PORTFOLIO SECURITIES
[GRAPHIC OMITTED] The fund invests primarily in the common stocks of U.S. and
foreign companies. It also may invest in warrants, preferred stocks and
convertible securities.
For liquidity and flexibility, the fund may invest up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, and may engage in other investment
practices.
RISK FACTORS
[GRAPHIC OMITTED] As with any growth fund, the value of your investment will
fluctuate in response to stock market movements. Because the fund concentrates
on a single sector (consumer businesses), its performance may be
disproportionately affected by a few key factors, such as economic conditions
and consumer confidence levels.
Also, because the fund invests internationally, it carries additional risks,
including currency, information, natural event and political risks. These risks,
which may make the fund more volatile than a comparable domestic growth fund,
are defined in "More about risk" starting on page 31.
To the extent that the fund invests in smaller capitalization companies or
emerging markets, or utilizes higher-risk securities and practices, it takes on
further risks that could adversely affect its performance. Please read "More
about risk" carefully before investing.
PORTFOLIO MANAGEMENT
[GRAPHIC OMITTED] Bernice S. Behar, CFA, leader of the fund's portfolio
management team since the fund's inception in September 1994, is a senior vice
president of the adviser. She joined the adviser in 1991 and has been in the
investment business since 1986.
- -------------------------------------------------------------------------------
INVESTOR EXPENSES
[GRAPHIC OMITTED] Fund investors pay various expenses, either directly or
indirectly. The figures below are based on expenses for the past year, adjusted
to reflect any changes. Future expenses may be greater or less.
- -------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
- -------------------------------------------------------------------------------
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
- -------------------------------------------------------------------------------
Maximum sales charge imposed on
reinvested dividends none none
- -------------------------------------------------------------------------------
Maximum deferred sales charge none(1) 5.00%
- -------------------------------------------------------------------------------
Redemption fee(2) none none
- -------------------------------------------------------------------------------
Exchange fee none none
- -------------------------------------------------------------------------------
<PAGE>
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
- -------------------------------------------------------------------------------
Management fee (after expense limitation)(3) 0.22% 0.22%
- -------------------------------------------------------------------------------
12b-1 fee(4) 0.30% 1.00%
- -------------------------------------------------------------------------------
Other expenses 1.02% 1.02%
- -------------------------------------------------------------------------------
Total fund operating expenses (after limitation)(3) 1.54% 2.24%
- -------------------------------------------------------------------------------
EXAMPLE The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
- -------------------------------------------------------------------------------
SHARE CLASS YEAR 1 YEAR 3 YEAR 5 YEAR 10
- -------------------------------------------------------------------------------
Class A shares $65 $96 $130 $224
- -------------------------------------------------------------------------------
Class B shares
- -------------------------------------------------------------------------------
Assuming redemption at end of period $73 $100 $140 $240
- -------------------------------------------------------------------------------
Assuming no redemption $23 $ 70 $120 $240
- -------------------------------------------------------------------------------
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Reflects the adviser`s agreement to limit expenses (except for 12b-1 and
transfer agent expenses). Without this limitation, management fees would be
0.80% for each class and total fund operating expenses would be 2.12% for
Class A and 2.82% for Class B. The adviser may terminate this limitation at
any time.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
<PAGE>
- -------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
[GRAPHIC OMITTED] The figures below have been audited by the fund's independent
auditors, Price Waterhouse LLP.
<TABLE>
<CAPTION>
VOLATILITY, AS INDICATED BY CLASS A YEAR-BY-YEAR TOTAL INVESTMENT RETURN (%) 35.61(5) 31.94 0.99(5)
- -----------------------------------------------------------------------------------------------------------------------------------
(scale varies from fund to fund) two
months
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A - PERIOD ENDED: 8/95(1) 8/96 10/96(2)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $8.50 $11.49 $15.16
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.01(3) (0.08)(3) (0.02)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 3.01 3.75 0.17
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.02 3.67 0.15
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.01) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions in excess of net investment income (0.02) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.03) -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $11.49 $15.16 $15.31
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE(4) (%) 35.61(5) 31.94 0.99(5)
- -----------------------------------------------------------------------------------------------------------------------------------
Total Adjusted Investment Return at Net Asset Value(4,6) (%) 28.69(5) 29.69 0.89(5)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) ($) 712 16,966 21,782
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) 1.50(7) 1.45 1.54(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted expenses to average net assets(8) (%) 9.00(7) 3.70 2.12(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) 0.06(7) (0.57) (0.70)(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted net investment income (loss) to average net assets(8) (%) (7.44)(7) (2.82) (1.28)(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 63 52 12
- -----------------------------------------------------------------------------------------------------------------------------------
Fee reduction per share ($) 0.65(3) 0.31 0.02
- -----------------------------------------------------------------------------------------------------------------------------------
Average brokerage commission rate(9) ($) N/A 0.0140 0.0079
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B - PERIOD ENDED: 8/96(1) 10/96(2)
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $11.95 $15.09
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.11)(3) (0.04)(3)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and foreign currency transactions 3.25 0.17
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.14 0.13
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.09 $15.22
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE(4) (%) 26.28(5) 0.86(5)
- -----------------------------------------------------------------------------------------------------------------------------------
Total adjusted investment return at net asset value(4,6) (%) 25.50(5) 0.76(5)
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) ($) 22,246 30,133
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) 2.15(7) 2.24(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted expenses to average net assets(8) (%) 3.49(7) 2.82(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) (1.28)(7) (1.42)(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted net investment income (loss) to average net assets(8) (%) (2.62)(7) (2.00)(7)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 52 12
- -----------------------------------------------------------------------------------------------------------------------------------
Fee reduction per share ($) 0.11 0.02
- -----------------------------------------------------------------------------------------------------------------------------------
Average brokerage commission rate(9) ($) 0.0140 0.0079
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Class A and Class B shares commenced operations September 29, 1994 and January 22, 1996, respectively.
(2) Effective October 31, 1996, the fiscal year end changed from August 31 to October 31.
(3) Based on the average of the shares outstanding at the end of each month.
(4) Assumes dividend reinvestment and does not reflect the effect of sales charges.
(5) Not annualized.
(6) An estimated total return calculation that does not take into consideration fee reductions by the adviser during the
periods shown.
(7) Annualized.
(8) Unreimbursed, without fee reduction.
(9) Per portfolio share traded. Required for fiscal years that began September 1, 1995 or later.
</TABLE>
<PAGE>
GLOBAL RX FUND
REGISTRANT NAME: JOHN HANCOCK WORLD FUND TICKER SYMBOL CLASS A: JHGRX
CLASS B: JHRBX
- --------------------------------------------------------------------------------
GOAL AND STRATEGY
[GRAPHIC OMITTED] The fund seeks long-term growth of capital. To pursue this
goal, the fund invests primarily in stocks of foreign and U.S. health care
companies. The fund defines health care companies as those deriving at least
half of their gross revenues, or committing at least half of their gross assets,
to health care-related activities. Under normal circumstances, the fund invests
at least 65% of assets in these companies, including small- and medium-sized
companies. The fund expects to invest in the securities markets of at least
three countries at any one time, potentially including the U.S. Because the fund
is non-diversified, it may invest more than 5% of assets in securities of a
single issuer.
The fund has an independent advisory board composed of scientific and medical
experts to provide advice and consultation on health care developments.
PORTFOLIO SECURITIES
[GRAPHIC OMITTED] The fund invests primarily in foreign and domestic common
stocks, and may invest in warrants, preferred stocks and convertible debt
securities.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, and may engage in other investment
practices.
RISK FACTORS
[GRAPHIC OMITTED] As with any growth fund, the value of your investment will
fluctuate in response to stock market movements. Because the fund concentrates
on a single sector (health care), and because this sector has historically been
volatile, investors should expect above-average volatility.
Also, because the fund invests internationally, it carries additional risks,
including currency, information, natural event and political risks. These risks,
which may make the fund more volatile than a comparable domestic growth fund,
are defined in "More about risk" starting on page 31.
To the extent that the fund invests in smaller capitalization companies or
utilizes higher-risk securities and practices, it takes on further risks that
could adversely affect its performance. Please read "More about risk" carefully
before investing.
PORTFOLIO MANAGEMENT
[GRAPHIC OMITTED] Linda I. Miller, CFA, leader of the fund's portfolio
management team since January 1996, is a vice president of the adviser. She
joined John Hancock Funds in November 1995 and has been in the investment
business with a focus on the health care industry since 1980.
INVESTOR EXPENSES
[GRAPHIC OMITTED] Fund investors pay various expenses, either directly or
indirectly. The figures below show the expenses for the past year, adjusted to
reflect any changes. Future expenses may be greater or less.
- --------------------------------------------------------------------------------
Shareholder transaction expenses Class A Class B
- --------------------------------------------------------------------------------
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
- --------------------------------------------------------------------------------
Maximum sales charge imposed on
reinvested dividends none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge none(1) 5.00%
- --------------------------------------------------------------------------------
Redemption fee(2) none none
- --------------------------------------------------------------------------------
Exchange fee none none
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------
Management fee 0.80% 0.80%
- --------------------------------------------------------------------------------
12b-1 fee(3) 0.30% 1.00%
- --------------------------------------------------------------------------------
Other expenses 0.82% 0.82%
- --------------------------------------------------------------------------------
Total fund operating expenses 1.92% 2.62%
- --------------------------------------------------------------------------------
EXAMPLE The table below shows what you would pay
if you invested $1,000 over the various time frames indicated. The example
assumes you reinvested all dividends and that the average annual return was 5%.
- --------------------------------------------------------------------------------
SHARE CLASS YEAR 1 YEAR 3 YEAR 5 YEAR 10
Class A shares $69 $107 $148 $263
- --------------------------------------------------------------------------------
Class B shares
- --------------------------------------------------------------------------------
Assuming redemption
at end of period $77 $111 $159 $278
- --------------------------------------------------------------------------------
Assuming no redemption $27 $81 $139 $278
- --------------------------------------------------------------------------------
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
[GRAPHIC OMITTED] The figures below have been audited by the fund's independent
auditors, Price Waterhouse LLP.
<TABLE>
<CAPTION>
VOLATILITY, AS INDICATED BY CLASS A YEAR-BY-YEAR TOTAL
INVESTMENT RETURN (%) 33.40(5) 30.89 23.39 18.39 0.30
- ----------------------------------------------------------------------------------------------------------------------------------
(scale varies from fund to fund) (1.26)(5)
two
months
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS A - PERIOD ENDED: 8/92(1) 8/93 8/94 8/95 8/96 10/96(2)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.00 $13.34 $13.38 $16.51 $21.61 $25.43
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.03) (0.23) (0.32) (0.36)(3) (0.19)(3) (0.05)(3)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 3.37 0.27 3.45 5.46 4.15 (0.27)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 3.34 0.04 3.13 5.10 3.96 (0.32)
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments
sold and foreign currency transactions -- -- -- -- (0.14) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $13.34 $13.38 $16.51 $21.61 $25.43 $25.11
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE(4) (%) 33.40(5) 0.30 23.39 30.89 18.39 (1.26)(5)
- ----------------------------------------------------------------------------------------------------------------------------------
Total adjusted investment return at net asset
value(4,6) (%) 32.11(5) 0.04 -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) ($) 14,702 15,647 18,643 24,394 42,405 42,618
Ratio of expenses to average net assets (%) 1.98(7) 2.50 2.55 2.56 1.80 1.92(7)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted expenses to average net assets(8) (%) 3.39(7) 2.76 -- -- -- --
Ratio of net investment income (loss) to average net
assets (%) (0.51)(7) (1.67) (2.01) (1.99) (0.75) (1.04)(7)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted net investment income (loss) to average
net assets(8) (%) (1.92)(7) (1.93) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 48 93 52 38 68 24
- ----------------------------------------------------------------------------------------------------------------------------------
Fee reduction per share ($) 0.085 0.035 -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Average brokerage commission rate(9) ($) N/A N/A N/A N/A 0.0181 0.0726
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS B - PERIOD ENDED: 8/94(1) 8/95 8/96 10/96(2)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $17.29 $16.46 $21.35 $24.94
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.17)(3) (0.55)(3) (0.34)(3) (0.08)(3)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments
and foreign currency transactions (0.66) 5.44 4.07 (0.26)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.83) 4.89 3.73 (0.34)
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments
sold and foreign currency transactions -- -- (0.14) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $16.46 $21.35 $24.94 $24.60
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE(4) (%) (4.80)(5) 29.71 17.53 (1.36)(5)
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) ($) 1,071 6,333 36,591 37,521
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) 3.34(7) 3.45 2.42 2.62(7)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net
assets (%) (2.65)(7) (2.91) (1.33) (1.74)(7)
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 52 38 68 24
- ----------------------------------------------------------------------------------------------------------------------------------
Average brokerage commission rate(9) ($) N/A N/A 0.0181 0.0726
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Class A and Class B shares commenced operations on October 1, 1991 and March 7, 1994, respectively.
(2) Effective October 31, 1996, the fiscal year end changed from August 31 to October 31.
(3) Based on the average of the shares outstanding at the end of each month.
(4) Assumes dividend reinvestment and does not reflect the effect of sales charges.
(5) Not annualized.
(6) An estimated total return calculation that does not take into consideration fee reductions by the adviser during the periods
shown.
(7) Annualized.
(8) Unreimbursed, without fee reduction.
(9) Per portfolio share traded. Required for fiscal years that began September 1, 1995 or later.
</TABLE>
<PAGE>
GLOBAL TECHNOLOGY FUND
REGISTRANT NAME: JOHN HANCOCK SERIES TRUST TICKER SYMBOL CLASS A: NTTFX
CLASS B: FGTBX
- --------------------------------------------------------------------------------
GOAL AND STRATEGY
[GRAPHIC OMITTED] The fund seeks long-term growth of capital. To pursue this
goal, the fund invests primarily in stocks of foreign and U.S. companies that
rely extensively on technology in their product development or operations. Under
normal circumstances, the fund invests at least 65% of assets in these
companies, and expects to invest in the securities markets of at least three
countries at any one time, potentially including the U.S. Income is a secondary
goal.
PORTFOLIO SECURITIES
[GRAPHIC OMITTED] The fund invests primarily in foreign and domestic common
stocks, and may invest in warrants, preferred stocks and convertible debt
securities. The fund may invest up to 10% of assets in debt securities of any
maturity. These may include securities rated as low as CC/Ca and their unrated
equivalents. Bonds rated lower than BBB/Baa are considered junk bonds.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, including restricted securities, and
may engage in other investment practices.
RISK FACTORS
[GRAPHIC OMITTED] As with any growth fund, the value of your investment will
fluctuate in response to stock market movements. Because the fund concentrates
on a single sector (technology), and because this sector has historically been
volatile, investors should expect above-average volatility.
Also, because the fund invests internationally, it carries additional risks,
including currency, information, natural event and political risks. These risks,
which may make the fund more volatile than a comparable domestic growth fund,
are defined in "More about risk" starting on page 31. The risks of international
investing are higher in emerging markets such as those of Latin America, Asia
and Eastern Europe. To the extent that the fund invests in smaller
capitalization companies or junk bonds, it further increases the chances for
fluctuations in share price and total return. Please read "More about risk"
carefully before investing.
MANAGEMENT/SUBADVISER
[GRAPHIC OMITTED] Barry J. Gordon and Marc H. Klee lead the fund's management
team, as they have since the fund's inception in 1983. They are principals of
American Fund Advisors, Inc. (AFA), which was the fund's adviser until 1991.
Since 1991, AFA has been the fund's subadviser.
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
[GRAPHIC OMITTED] Fund investors pay various expenses, either directly or
indirectly. The figures below show the expenses for the past year, adjusted to
reflect any changes. Future expenses may be greater or less.
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
- --------------------------------------------------------------------------------
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
- --------------------------------------------------------------------------------
Maximum sales charge imposed on
reinvested dividends none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge none(1) 5.00%
- --------------------------------------------------------------------------------
Redemption fee(2) none none
- --------------------------------------------------------------------------------
Exchange fee none none
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------
Management fee(3) 0.79% 0.79%
- --------------------------------------------------------------------------------
12b-1 fee(4) 0.30% 1.00%
- --------------------------------------------------------------------------------
Other expenses 0.48% 0.48%
- --------------------------------------------------------------------------------
Total fund operating expenses 1.57% 2.27%
- --------------------------------------------------------------------------------
EXAMPLE The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
- --------------------------------------------------------------------------------
SHARE CLASS YEAR 1 YEAR 3 YEAR 5 YEAR 10
- --------------------------------------------------------------------------------
Class A shares $65 $97 $131 $227
- --------------------------------------------------------------------------------
Class B shares
- --------------------------------------------------------------------------------
Assuming redemption
at end of period $73 $101 $142 $243
- --------------------------------------------------------------------------------
Assuming no redemption $23 $71 $122 $243
- --------------------------------------------------------------------------------
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Includes a subadviser fee that will not exceed 0.40% of the fund's net
assets.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
[GRAPHIC OMITTED] The figures below have been audited by the fund's
independent auditors, Price Waterhouse LLP.
<TABLE>
<CAPTION>
VOLATILITY, AS
INDICATED BY CLASS A
YEAR-BY-YEAR TOTAL
INVESTMENT RETURN (%) 2.89 2.84 10.48 16.61 33.05 5.70 32.06 9.62 46.53 5.22(4)
- ----------------------------------------------------------------------------------------------------------------------------------
(scale varies from fund (18.46) ten
to fund) months
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS A - PERIOD
ENDED: 12/86 12/87 12/88 12/89 12/90 12/91 12/92 12/93 12/94 12/95 10/96(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $13.57 $13.80 $13.98 $15.31 $16.93 $12.44 $15.60 $14.94 $17.45 $17.84 $24.51
Net investment
income (loss) 0.14 0.15 0.15 0.10 (0.04) 0.05 (0.15) (0.21) (0.22)(2) (0.22)(2) (0.14)(2)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gain
(loss) on
investments and
foreign currency
transactions 0.25 0.26 1.32 2.43 (3.09) 4.11 1.00 4.92 1.87 8.53 1.42
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations 0.39 0.41 1.47 2.53 (3.13) 4.16 0.85 4.71 1.65 8.31 1.28
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net
investment income (0.16) (0.23) (0.14) (0.13) -- (0.04) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from
net realized gain on
investments and
foreign currency
transactions -- -- -- (0.78) (1.36) (0.96) (1.51) (2.20) (1.26) (1.64) --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.16) (0.23) (0.14) (0.91) (1.36) (1.00) (1.51) (2.20) (1.26) (1.64) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end
of period $13.80 $13.98 $15.31 $16.93 $12.44 $15.60 $14.94 $17.45 $17.84 $24.51 $25.79
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT
RETURN AT NET ASSET
VALUE(3) (%) 2.89 2.84 10.48 16.61 (18.46) 33.05 5.70 32.06 9.62 46.53 5.22(4)
- ----------------------------------------------------------------------------------------------------------------------------------
Total adjusted
investment return
at net asset
value(3,5) -- -- -- -- -- -- 5.53 -- -- 46.41 --
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of
period (000s
omitted) ($) 56,927 44,224 38,594 40,341 28,864 31,580 32,094 41,749 52,193 155,001 166,010
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) 1.75 1.63 1.75 1.90 2.36 2.32 2.05 2.10 2.16 1.67 1.57(6)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted
expenses to average
net assets(7) (%) -- -- -- -- -- -- 2.22 -- -- 1.79 --
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net
investment income
(loss) to average
net assets (%) 0.77 0.75 0.89 0.60 (0.28) 0.34 (0.88) (1.49) (1.25) (0.89) (0.68)(6)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted
net investment
income (loss) to
average net
assets(7) (%) -- -- -- -- -- -- (1.05) -- -- (1.01) --
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover
rate (%) 6 9 12 30 38 67 76 86 67 70 64
- ----------------------------------------------------------------------------------------------------------------------------------
Fee reduction per
share ($) -- -- -- -- -- -- 0.03 -- -- 0.02(2) --
- ----------------------------------------------------------------------------------------------------------------------------------
Average brokerage
commission rate(8) ($) N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A 0.0685
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS B - PERIOD ENDED: 12/94(9) 12/95 10/96(1)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value,
beginning of period $17.24 $17.68 $24.08
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income
(loss) (0.35)(2) (0.39)(2) (0.28)(2)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and
unrealized gain (loss)
on investments 2.05 8.43 1.40
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations 1.70 8.04 1.12
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Distributions from
net realized gain
on investments sold (1.26) (1.64) --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $17.68 $24.08 $25.20
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN
AT NET ASSET VALUE(3) (%) 10.02 45.42 4.65(4)
- ----------------------------------------------------------------------------------------------------------------------------------
Total adjusted investment
return at net asset
value(3,5) -- 45.30 --
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000s omitted) ($) 9,324 35,754 50,949
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to
average net assets (%) 2.90(6) 2.41 2.27(6)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted
expenses to average
net assets(7) (%) -- 2.53 --
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets (%) (1.98)(6) (1.62) (1.38)(6)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted net
investment income (loss) to
average net assets(7) (%) -- (1.74) --
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 67 70 64
- ----------------------------------------------------------------------------------------------------------------------------------
Fee reduction per share ($) -- 0.03(2) --
- ----------------------------------------------------------------------------------------------------------------------------------
Average brokerage
commission rate(8) ($) N/A N/A 0.0685
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Effective October 31, 1996, the fiscal year end changed from December 31 to October 31.
(2) Based on the average of the shares outstanding at the end of each month.
(3) Assumes dividend reinvestment and does not reflect the effect of sales charges.
(4) Not annualized.
(5) An estimated total return calculation that does not take into consideration fee reductions by the adviser during the periods
shown.
(6) Annualized.
(7) Unreimbursed, without fee reduction.
(8) Per portfolio share traded. Required for fiscal years that began September 1, 1995 or later.
(9) Class B shares commenced operations on January 3, 1994.
</TABLE>
<PAGE>
International Fund
REGISTRANT NAME: FREEDOM INVESTMENT TRUST II TICKER SYMBOL CLASS A: FINAX
CLASS B: FINBX
- --------------------------------------------------------------------------------
GOAL AND STRATEGY
[GRAPHIC OMITTED] The fund seeks long-term growth of capital. To pursue this
goal, the fund invests primarily in stocks of foreign companies. Under normal
circumstances, the fund invests at least 65% of assets in these companies. The
fund maintains a diversified portfolio of company and government securities from
around the world, and generally expects that at any one time it will invest in
the securities markets of at least three non-U.S. countries.
The fund does not maintain a fixed allocation of assets, either with respect to
securities type or to geography. The fund looks for companies of any size whose
earnings show strong growth or that appear to be undervalued.
PORTFOLIO SECURITIES
[GRAPHIC OMITTED] Under normal circumstances, the fund invests primarily in
common stocks and other equity securities, but may invest in almost any type of
security, foreign or domestic, including preferred and convertible securities,
warrants and investment-grade debt securities.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, and may engage in other investment
practices.
RISK FACTORS
[GRAPHIC OMITTED] As with any growth fund, the value of your investment will
fluctuate in response to stock market movements.
Because it invests internationally, the fund carries additional risks, including
currency, information, natural event and political risks. These risks, which may
make the fund more volatile than a comparable domestic growth fund, are defined
in "More about risk" starting on page 31. The risks of international investing
are higher in emerging markets such as those of Latin America, Asia and Eastern
Europe.
To the extent that the fund invests in smaller capitalization companies or
utilizes higher-risk securities and practices, it takes on further risks that
could adversely affect its performance. Please read "More about risk" carefully
before investing.
MANAGEMENT/SUBADVISER
[GRAPHIC OMITTED] Miren Etcheverry, John L.F. Wills and Gerardo J. Espinoza lead
the fund's portfolio management team. Ms. Etcheverry and Mr. Espinoza are senior
vice presidents and joined John Hancock Funds in December 1996, having been in
the investment business since 1978 and 1979, respectively. Mr. Wills is a senior
vice president of the adviser and managing director of the subadviser, John
Hancock Advisers International. He joined John Hancock Funds in 1987 and has
been in the investment business since 1969.
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
[GRAPHIC OMITTED] Fund investors pay various expenses, either directly or
indirectly. The figures below show the expenses for the past fiscal year,
adjusted to reflect any changes. Future expenses may be greater or less.
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
- --------------------------------------------------------------------------------
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
- --------------------------------------------------------------------------------
Maximum sales charge imposed on
reinvested dividends none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge none(1) 5.00%
- --------------------------------------------------------------------------------
Redemption fee(2) none none
- --------------------------------------------------------------------------------
Exchange fee none none
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------
Management fee (after expense limitation)(3,4) 0.00% 0.00%
- --------------------------------------------------------------------------------
12b-1 fee(5) 0.30% 1.00%
- --------------------------------------------------------------------------------
Other expenses (after limitation)(3) 1.45% 1.45%
- --------------------------------------------------------------------------------
Total fund operating expenses (after limitation)(3) 1.75% 2.45%
- --------------------------------------------------------------------------------
Example The table below shows what you would pay
if you invested $1,000 over the various time frames indicated. The example
assumes you reinvested all dividends and that the average annual return was 5%.
- --------------------------------------------------------------------------------
SHARE CLASS YEAR 1 YEAR 3 YEAR 5 YEAR 10
- --------------------------------------------------------------------------------
Class A shares $67 $102 $140 $246
- --------------------------------------------------------------------------------
Class B shares
Assuming redemption
at end of period $75 $106 $151 $261
- --------------------------------------------------------------------------------
Assuming no redemption $25 $76 $131 $261
- --------------------------------------------------------------------------------
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Reflects the adviser`s agreement to limit expenses (except for 12b-1 and
transfer agent expenses). Without this limitation, management fees would be
1.00% for each class, other expenses would be 2.02% for each class and total
fund operating expenses would be 3.32% for Class A and 4.02% for Class B.
The adviser may terminate this limitation at any time.
(4) Includes a subadviser fee equal to 0.70% of the fund's net assets.
(5) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
[GRAPHIC OMITTED] The figures below have been audited by the fund's independent
auditors, Price Waterhouse LLP.
<TABLE>
<CAPTION>
VOLATILITY, AS INDICATED BY CLASS A YEAR-BY-YEAR TOTAL INVESTMENT RETURN (%) 1.77(4) 6.88
- -----------------------------------------------------------------------------------------------------------------------------------
(scale varies from fund to fund) (4.96)
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS A - PERIOD ENDED: 10/94(1) 10/95 10/96
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $8.50 $8.65 $8.14
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.07(2) 0.04 0.06(2)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 0.08 (0.47) 0.50
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.15 (0.43) 0.56
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- -----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income -- (0.03) --
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments
sold and foreign currency transactions -- (0.05) --
- -----------------------------------------------------------------------------------------------------------------------------------
Total distributions -- (0.08) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.65 $8.14 $8.70
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE(3) (%) 1.77(4) (4.96) 6.88
- -----------------------------------------------------------------------------------------------------------------------------------
Total adjusted investment return at net asset value(3,5) (%) (0.52)(4) (8.12) 5.33
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) ($) 4,426 4,215 5,098
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) 1.50(6) 1.64 1.75
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted expenses to average net assets(7) (%) 3.79(6) 4.80 3.30
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) 1.02(6) 0.56 0.68
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted net investment income (loss) to average
net assets(7) (%) (1.27)(6) (2.60) (0.87)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 50 69 83
- -----------------------------------------------------------------------------------------------------------------------------------
Fee reduction per share ($) 0.16(2) 0.25(2) 0.14(2)
- -----------------------------------------------------------------------------------------------------------------------------------
Average brokerage commission rate(8) ($) N/A N/A 0.0192
- -----------------------------------------------------------------------------------------------------------------------------------
CLASS B - PERIOD ENDED: 10/94(1) 10/95 10/96
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $8.50 $8.61 $8.05
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.02(2) (0.03) 0.00(2,9)
- -----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 0.09 (0.48) 0.50
- -----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.11 (0.51) 0.50
- -----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized gain on investments
sold and foreign currency transactions -- (0.05) --
- -----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.61 $8.05 $8.55
- -----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE(3) (%) 1.29(4) (5.89) 6.21
- -----------------------------------------------------------------------------------------------------------------------------------
Total adjusted investment return at net asset value(3,5) (%) (1.00)(4) (9.05) 4.66
- -----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) ($) 3,948 3,990 8,175
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) 2.22(6) 2.52 2.45
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted expenses to average net assets(7) (%) 4.51(6) 5.68 4.00
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) 0.31(6) (0.37) 0.02
- -----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted net investment income (loss) to average
net assets(7) (%) (1.98)(6) (3.53) (1.53)
- -----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 50 69 83
- -----------------------------------------------------------------------------------------------------------------------------------
Fee reduction per share ($) 0.16(2) 0.25(2) 0.14(2)
- -----------------------------------------------------------------------------------------------------------------------------------
Average brokerage commission rate(8) ($) N/A N/A 0.0192
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Class A and Class B shares commenced operations on January 3, 1994.
(2) Based on the average of the shares outstanding at the end of each month.
(3) Assumes dividend reinvestment and does not reflect the effect of sales charges.
(4) Not annualized.
(5) An estimated total return calculation that does not take into consideration fee reductions by the adviser during the periods
shown.
(6) Annualized.
(7) Unreimbursed, without fee reduction.
(8) Per portfolio share traded. Required for fiscal years that began September 1, 1995 or later.
(9) Less than one cent per share.
</TABLE>
<PAGE>
PACIFIC BASIN EQUITIES FUND
REGISTRANT NAME: JOHN HANCOCK WORLD FUND TICKER SYMBOL CLASS A: JHWPX
CLASS B: FPBBX
- --------------------------------------------------------------------------------
GOAL AND STRATEGY
[GRAPHIC OMITTED] The fund seeks long-term growth of capital. To pursue this
goal, the fund invests primarily in a diversified portfolio of stocks of Pacific
Basin companies. The Pacific Basin includes countries bordering the Pacific
Ocean. Under normal circumstances, the fund invests at least 65% of assets in
these companies, with the balance invested in equities of companies not in the
Pacific Basin countries and in investment-grade debt securities of U.S.,
Japanese, Australian and New Zealand issuers.
The fund does not maintain a fixed allocation of assets. The fund may at times
invest less than 65% of assets in Pacific Basin equities.
PORTFOLIO SECURITIES
[GRAPHIC OMITTED] Under normal circumstances, the fund invests primarily in
common stocks and other equity securities, but may invest in virtually any type
of security, foreign or domestic, including preferred and convertible
securities, warrants and investment-grade debt securities.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest up to 100% in these securities as a defensive tactic. The fund also may
invest in certain higher-risk securities, and may engage in other investment
practices.
RISK FACTORS
[GRAPHIC OMITTED] As with any growth fund, the value of your investment will
fluctuate in response to stock market movements. Because the fund concentrates
on one region, investors should expect above-average volatility.
Also, because the fund invests internationally, it carries additional risks,
including currency, information, natural event and political risks. These risks,
which may make the fund more volatile than a comparable domestic growth fund,
are defined in "More about risk" starting on page 31. The risks of international
investing are higher in emerging markets, a category that includes many Pacific
Basin countries.
To the extent that the fund utilizes higher-risk securities practices, it takes
on further risks that could adversely affect its performance. Please read "More
about risk" carefully before investing.
MANAGEMENT/SUBADVISERS
[GRAPHIC OMITTED] The fund's management is carried out jointly by the adviser's
international equities portfolio management team and two subadvisers, Indosuez
Asia Advisers Limited and John Hancock Advisers International. Indosuez is
majority owned by Caisse Nationale de Credit Agricole, a French banking
institution.
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
[GRAPHIC OMITTED] Fund investors pay various expenses, either directly or
indirectly. The figures below show the expenses for the past year, adjusted to
reflect any changes. Future expenses may be greater or less.
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
- --------------------------------------------------------------------------------
Maximum sales charge imposed on purchases
(as a percentage of offering price) 5.00% none
- --------------------------------------------------------------------------------
Maximum sales charge imposed on
reinvested dividends none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge none(1) 5.00%
- --------------------------------------------------------------------------------
Redemption fee(2) none none
- --------------------------------------------------------------------------------
Exchange fee none none
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------
Management fee(3) 0.80% 0.80%
- --------------------------------------------------------------------------------
12b-1 fee(4) 0.30% 1.00%
- --------------------------------------------------------------------------------
Other expenses 1.10% 1.10%
- --------------------------------------------------------------------------------
Total fund operating expenses 2.20% 2.90%
- --------------------------------------------------------------------------------
EXAMPLE The table below shows what you would pay
if you invested $1,000 over the various time frames indicated. The example
assumes you reinvested all dividends and that the average annual return was 5%.
- --------------------------------------------------------------------------------
SHARE CLASS YEAR 1 YEAR 3 YEAR 5 YEAR 10
- --------------------------------------------------------------------------------
Class A shares $71 $115 $162 $291
- --------------------------------------------------------------------------------
Class B shares
- --------------------------------------------------------------------------------
Assuming redemption
at end of period $79 $120 $173 $306
- --------------------------------------------------------------------------------
Assuming no redemption $29 $90 $153 $306
- --------------------------------------------------------------------------------
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Includes a subadviser fee equal to 0.35% of the fund's net assets.
(4) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
[GRAPHIC OMITTED] The figures below have been audited by the fund's
independent auditors, Price Waterhouse LLP.
<TABLE>
<CAPTION>
VOLATILITY, AS INDICATED BY CLASS
A YEAR-BY-YEAR TOTAL INVESTMENT
RETURN (%) 18.06 49.61 22.82 4.47
- ----------------------------------------------------------------------------------------------------------------------------------
(scale varies from fund to fund) (3.61)(6) (0.44) (2.15) (1.99) (7.65) (1.83)(6)
two
months
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS A - PERIOD ENDED: 8/88(1) 8/89 8/90 8/91 8/92 8/93 8/94 8/95 8/96 10/96(2)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $10.00 $9.61 $11.10 $10.34 $9.05 $8.87 $13.27 $15.88 $14.11 $14.74
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.01 (0.02) (0.04) (0.01) (0.07)(3) (0.11)(3) (0.10)(3) 0.02(3,4) (0.02)(3) (0.02)(3)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions (0.37) 1.75 0.11 (0.33) (0.11) 4.51 3.12 (1.24) 0.65 (0.25)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.36) 1.73 0.07 (0.34) (0.18) 4.40 3.02 (1.22) 0.63 (0.27)
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment
income (0.03) (0.01) -- -- -- -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized
gain on investments sold
and foreign currency
transactions -- (0.23) (0.83) (0.95) -- -- (0.41) (0.55) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.03) (0.24) (0.83) (0.95) -- -- (0.41) (0.55) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.61 $11.10 $10.34 $9.05 $8.87 $13.27 $15.88 $14.11 $14.74 $14.47
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET
ASSET VALUE(5) (%) (3.61)(6) 18.06 (0.44) (2.15) (1.99) 49.61 22.82 (7.65) 4.47 (1.83)(6)
- ----------------------------------------------------------------------------------------------------------------------------------
Total adjusted investment return
at net asset value(5,7) (%) (8.05)(6) 15.12 (2.86) (5.19) (5.57) 48.31 -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000s omitted) ($) 4,771 5,116 4,578 4,065 3,222 14,568 50,261 37,417 41,951 38,694
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%) 1.75(8) 1.75 2.45 2.75 2.73 2.94 2.43 2.05 1.97 2.21(8)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted expenses to
average net assets(9) (%) 6.19(8) 4.69 4.89 5.79 6.31 4.24 -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) 0.04(8) (0.15) (0.28) (0.06) (0.82) (0.98) (0.66) 0.13(4) (0.15) (0.83)(8)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted net investment
income (loss) to average
net assets(9) (%) (4.40)(8) (3.09) (2.70) (3.10) (4.40) (2.28) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 148 227 154 151 179 171 68 48 73 15
- ----------------------------------------------------------------------------------------------------------------------------------
Fee reduction per share ($) 1.15 0.39 0.31 0.24 0.31(3) 0.14(3) -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Average brokerage commission
rate(10) ($) N/A N/A N/A N/A N/A N/A N/A N/A 0.0183 0.0221
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS B - PERIOD ENDED: 8/94(1) 8/95 8/96 10/96(2)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $15.11 $15.84 $13.96 $14.49
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (0.09)(3)(0.09)(3) (0.13)(3) (0.04)(3)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
(loss) on investments and
foreign currency transactions 0.82 (1.24) 0.66 (0.25)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.73 (1.33) 0.53 (0.29)
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from net realized
gain on investments sold
and foreign currency transactions -- (0.55) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $15.84 $13.96 $14.49 $14.20
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET
ASSET VALUE(5) (%) (4.83)(6)(8.38) 3.80 (2.00)(6)
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s
omitted) ($) 9,480 14,368 32,342 30,147
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net
assets (%) 3.00(8) 2.77 2.64 2.90(8)
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income
(loss) to average net assets (%) (1.40)(8)(0.66) (0.86) (1.52)(8)
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 68 48 73 15
- ----------------------------------------------------------------------------------------------------------------------------------
Average brokerage commission rate(10) ($) N/A N/A 0.0183 0.0221
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Class A and Class B shares commenced operations on September 8, 1987 and March 7, 1994, respectively.
(2) Effective October 31, 1996, the fiscal year end changed from August 31 to October 31.
(3) Based on the average of the shares outstanding at the end of each month.
(4) May not accord to amounts shown elsewhere in the financial statements due to the timing of sales and repurchases of fund
shares in relation to fluctuating market values of the investments of the fund.
(5) Assumes dividend reinvestment and does not reflect the effect of sales charges.
(6) Not annualized.
(7) An estimated total return calculation that does not take into consideration fee reductions by the adviser during the periods
shown.
(8) Annualized.
(9) Unreimbursed, without fee reduction.
(10) Per portfolio share traded. Required for fiscal years that began September 1, 1995 or later.
</TABLE>
<PAGE>
SHORT-TERM STRATEGIC INCOME FUND
REGISTRANT NAME: FREEDOM INVESTMENT TRUST II TICKER SYMBOL CLASS A: JHSAX
CLASS B: FRSWX
- --------------------------------------------------------------------------------
GOAL AND STRATEGY
[GRAPHIC OMITTED] The fund seeks a high level of current income. To pursue this
goal, the fund invests primarily in debt securities issued or guaranteed by:
o foreign governments and companies including those in emerging markets
o the U.S. Government, its agencies or instrumentalities
o U.S. companies
Under normal circumstances, the fund invests assets in all three of these
sectors, but may invest up to 100% in any one sector. The fund maintains an
average portfolio maturity of three years or less.
PORTFOLIO SECURITIES
[GRAPHIC OMITTED] The fund may invest in all types of debt securities. The
fund's U.S. Government securities may include mortgage-backed securities. The
fund may invest up to 67% of assets in securities rated as low as B and their
unrated equivalents. Bonds rated lower than BBB/Baa are considered junk bonds.
However, the fund maintains an average portfolio quality rating of A, which is
an investment-grade rating.
Because the fund is non-diversified, it may invest more than 5% of assets in
securities of a single issuer, but no more than 25% of assets in the securities
of any one foreign government. The fund also may invest in certain other
investments, including derivatives, and may engage in other investment
practices.
RISK FACTORS
[GRAPHIC OMITTED] The value of your investment in the fund will fluctuate with
changes in currency exchange rates as well as interest rates. Typically, a rise
in interest rates causes a decline in the market value of fixed income
securities.
International investing, particularly in emerging markets, carries additional
risks, including currency information, natural event and political risks. Junk
bonds may carry above-average credit and market risks and mortgage-backed
securities may carry extension and prepayment risks. These risks are defined in
"More about risk" starting on page 31.
To the extent that the fund utilizes higher-risk securities practices, it takes
on further risks that could adversely affect its performance. Please read "More
about risk" carefully before investing.
PORTFOLIO MANAGEMENT
[GRAPHIC OMITTED] Anthony A. Goodchild, Lawrence J. Daly and Janet L. Clay lead
the portfolio management team. Messrs. Goodchild and Daly are senior vice
presidents and joined John Hancock Funds in July 1994, having been in the
investment business since 1968 and 1972, respectively. Ms. Clay, a second vice
president, joined John Hancock Funds in August 1995 and has been in the
investment business since 1990.
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
[GRAPHIC OMITTED] Fund investors pay various expenses, either directly or
indirectly. The figures below show the expenses for the past year, adjusted to
reflect any changes. Future expenses may be greater or less.
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
- --------------------------------------------------------------------------------
Maximum sales charge imposed on purchases
(as a percentage of offering price) 3.00% none
- --------------------------------------------------------------------------------
Maximum sales charge imposed on
reinvested dividends none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge none(1) 3.00%
- --------------------------------------------------------------------------------
Redemption fee(2) none none
- --------------------------------------------------------------------------------
Exchange fee none none
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------
Management fee 0.65% 0.65%
- --------------------------------------------------------------------------------
12b-1 fee(3) 0.30% 1.00%
- --------------------------------------------------------------------------------
Other expenses 0.52% 0.52%
- --------------------------------------------------------------------------------
Total fund operating expenses 1.47% 2.17%
- --------------------------------------------------------------------------------
EXAMPLE The table below shows what you would pay
if you invested $1,000 over the various time frames indicated. The example
assumes you reinvested all dividends and that the average annual return was 5%.
- --------------------------------------------------------------------------------
Share class Year 1 Year 3 Year 5 Year 10
- --------------------------------------------------------------------------------
Class A shares $45 $75 $108 $200
- --------------------------------------------------------------------------------
Class B shares
- --------------------------------------------------------------------------------
Assuming redemption
at end of period $52 $88 $116 $209
- --------------------------------------------------------------------------------
Assuming no redemption $22 $68 $116 $209
- --------------------------------------------------------------------------------
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
[GRAPHIC OMITTED] The figures below have been audited by the fund's independent
auditors, Price Waterhouse LLP.
<TABLE>
<CAPTION>
VOLATILITY, AS INDICATED BY CLASS B YEAR-BY-YEAR TOTAL INVESTMENT
RETURN (%) 8.85(4) 0.64 5.98 1.93 7.97 7.89
- ----------------------------------------------------------------------------------------------------------------------------------
(scale varies from fund to fund)
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS A - PERIOD ENDED: 10/92(1) 10/93 10/94 10/95 10/96
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $9.86 $9.32 $9.12 $8.47 $8.41
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.65 0.83(2) 0.76(2) 0.77(2) 0.65
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments and
foreign currency transactions (0.55) (0.20) (0.53) (0.06) 0.05
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.10 0.63 0.23 0.71 0.70
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.64) (0.83) (0.62) (0.61) (0.57)
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions in excess of net investment income -- -- (0.04) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions in excess of net realized gain on investments sold -- -- (0.12) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from capital paid-in -- -- (0.10) (0.16) (0.08)
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.64) (0.83) (0.88) (0.77) (0.65)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.32 $9.12 $8.47 $8.41 $8.46
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE(3) (%) 1.16(4) 6.78 2.64 8.75 8.60
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) ($) 20,468 11,130 13,091 16,997 49,338
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) 1.37(4) 1.21 1.26 1.33 1.48
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average net assets (%) 8.09(4) 8.59 8.71 9.13 7.59
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 86 306 150 147 77
- ---------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS B - PERIOD ENDED: 10/91(1) 10/92 10/93 10/94 10/95 10/96
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.00 $10.01 $9.31 $9.11 $8.46 $8.40
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.76 0.87 0.75(2) 0.70(2) 0.70(2) 0.59
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on investments
and foreign currency transactions 0.01 (0.80) (0.20) (0.53) (0.06) 0.05
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 0.77 0.07 0.55 0.17 0.64 0.64
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends from net investment income (0.76) (0.77) (0.75) (0.56) (0.56) (0.52)
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions in excess of net investment income -- -- -- (0.04) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions in excess of net realized gain on
investments sold -- -- -- (0.12) -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from capital paid-in -- -- -- (0.10) (0.14) (0.07)
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.76) (0.77) (0.75) (0.82) (0.70) (0.59)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $10.01 $9.31 $9.11 $8.46 $8.40 $8.45
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE(3) (%) 8.85(4) 0.64 5.98 1.93 7.97 7.89
- ----------------------------------------------------------------------------------------------------------------------------------
Total adjusted investment return at net asset
value(3,5) (%) 8.81(4) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) ($) 218,562 236,059 142,873 98,390 84,601 48,137
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) 1.89(4) 2.07 2.01 1.99 2.07 2.12
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted expenses to average net assets(6) (%) 1.93(4) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income to average net assets (%) 8.72(4) 8.69 7.81 8.00 8.40 7.07
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of adjusted net investment income to average net
assets(6) (%) 8.68(4) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 22 86 306 150 147 77
- ----------------------------------------------------------------------------------------------------------------------------------
Fee reduction per share ($) 0.0039 -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Class A and Class B shares commenced operations on January 3, 1992 and December 28,1990, respectively.
(2) Based on the average of the shares outstanding at the end of each month.
(3) Assumes dividend reinvestment and does not reflect the effect of sales charges.
(4) Annualized.
(5) An estimated total return calculation that does not take into consideration fee reductions by the adviser during the periods
shown.
(6) Unreimbursed, without fee reduction.
</TABLE>
<PAGE>
WORLD BOND FUND
REGISTRANT NAME: FREEDOM INVESTMENT TRUST II TICKER SYMBOL CLASS A: FGLAX
CLASS B: FGLIX
- --------------------------------------------------------------------------------
GOAL AND STRATEGY
[GRAPHIC OMITTED] The fund seeks a high total investment return -- a combination
of current income and capital appreciation. To pursue this goal, the fund
invests at least 65% of assets in debt securities issued or guaranteed by: o
foreign governments and companies including those in emerging markets o
multinational organizations such as the World Bank o the U.S. Government, its
agencies or instrumentalities
Under normal circumstances, the fund expects to invest in the securities markets
of at least three countries at any one time, potentially including the U.S. The
fund does not maintain a fixed allocation of assets.
PORTFOLIO SECURITIES
[GRAPHIC OMITTED] The fund may invest in all types of debt securities of any
maturity, including preferred and convertible securities. Less than 35% of
assets may be invested in junk bonds rated as low as CCC/Caa, or equivalent.
Because the fund is non-diversified, it may invest more than 5% of assets in
securities of a single issuer, but no more than 25% of assets in the securities
of any one foreign government.
For liquidity and flexibility, the fund may place up to 35% of assets in
investment-grade short-term securities. In abnormal market conditions, it may
invest more assets in these securities as a defensive tactic. The fund also may
invest in certain other investments, including derivatives, and may engage in
other investment practices.
RISK FACTORS
[GRAPHIC OMITTED] As with most bond funds, the value of your investment in the
fund will fluctuate with changes in interest rates. Typically, a rise in
interest rates causes a decline in the market value of fixed income securities.
International investing, particularly in emerging markets, carries additional
risks, including currency, information, natural event and political risks. Junk
bonds may carry above-average credit and market risks and mortgage-backed
securities may carry extension and prepayment risks. These risks are defined in
"More about risk" starting on page 31.
To the extent that the fund utilizes higher-risk securities practices, it takes
on further risks that could adversely affect its performance. Please read "More
about risk" carefully before investing.
PORTFOLIO MANAGEMENT
[GRAPHIC OMITTED] Anthony A. Goodchild, Lawrence J. Daly and Janet L. Clay lead
the portfolio management team. Messrs. Goodchild and Daly are senior vice
presidents and joined John Hancock Funds in July 1994, having been in the
investment business since 1968 and 1972, respectively. Ms. Clay, a second vice
president, joined John Hancock Funds in August 1995 and has been in the
investment business since 1990.
- --------------------------------------------------------------------------------
INVESTOR EXPENSES
[GRAPHIC OMITTED] Fund investors pay various expenses, either directly or
indirectly. The figures below show the expenses for the past year, adjusted to
reflect any changes. Future expenses may be greater or less.
- --------------------------------------------------------------------------------
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B
- --------------------------------------------------------------------------------
Maximum sales charge imposed on purchases
(as a percentage of offering price) 4.50% none
- --------------------------------------------------------------------------------
Maximum sales charge imposed on
reinvested dividends none none
- --------------------------------------------------------------------------------
Maximum deferred sales charge none(1) 5.00%
- --------------------------------------------------------------------------------
Redemption fee(2) none none
- --------------------------------------------------------------------------------
Exchange fee none none
- --------------------------------------------------------------------------------
ANNUAL FUND OPERATING EXPENSES (AS A % OF AVERAGE NET ASSETS)
- --------------------------------------------------------------------------------
Management fee 0.75% 0.75%
- --------------------------------------------------------------------------------
12b-1 fee(3) 0.30% 1.00%
- --------------------------------------------------------------------------------
Other expenses 0.54% 0.54%
- --------------------------------------------------------------------------------
Total fund operating expenses 1.59% 2.29%
- --------------------------------------------------------------------------------
EXAMPLE The table below shows what you would pay if you invested $1,000 over the
various time frames indicated. The example assumes you reinvested all dividends
and that the average annual return was 5%.
- --------------------------------------------------------------------------------
SHARE CLASS YEAR 1 YEAR 3 YEAR 5 YEAR 10
- --------------------------------------------------------------------------------
Class A shares $60 $93 $128 $225
- --------------------------------------------------------------------------------
Class B shares
- --------------------------------------------------------------------------------
Assuming redemption
at end of period $73 $102 $143 $245
- --------------------------------------------------------------------------------
Assuming no redemption $23 $72 $123 $245
- --------------------------------------------------------------------------------
This example is for comparison purposes only and is not a representation of the
fund's actual expenses and returns, either past or future.
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
(2) Does not include wire redemption fee (currently $4.00).
(3) Because of the 12b-1 fee, long-term shareholders may indirectly pay more
than the equivalent of the maximum permitted front-end sales charge.
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
[GRAPHIC OMITTED] The figures below have been audited by the fund's independent
auditors, Price Waterhouse LLP.
<TABLE>
<CAPTION>
VOLATILITY, AS INDICATED BY
CLASS B YEAR-BY-YEAR TOTAL
INVESTMENT RETURN (%) 65.96(4) 1.59(4) 20.09 5.47 11.84 10.44 1.72 6.77 11.51 4.78
----------------------------------------------------------------------------------------------------------------------------------
(scale varies from fund to fund) (1.88)
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS A - PERIOD ENDED: 10/92(1) 10/93 10/94 10/95 10/96
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of period $10.57 $9.76 $9.62 $8.85 $9.30
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.64 0.76 0.64(2) 0.57(2) 0.51(2)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) on
investments and foreign currency transactions (0.74) (0.10) (0.78) 0.48 (0.02)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.10) 0.66 (0.14) 1.05 0.49
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
Dividends from net investment income (0.71) (0.38) (0.11) (0.59) (0.50)
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions in excess of net investment income -- (0.04) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from capital paid-in -- (0.38) (0.52) (0.01) (0.01)
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.71) (0.80) (0.63) (0.60) (0.51)
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.76 $9.62 $8.85 $9.30 $9.28
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN AT NET ASSET VALUE(3) (%) (0.88)(4) 7.14 (1.30) 12.25 5.48
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period (000s omitted) ($) 12,880 12,882 8,949 35,334 27,537
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets (%) 1.41(4) 1.46 1.59 1.48 1.58
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment income (loss) to average
net assets (%) 7.64(4) 7.89 7.00 6.43 5.54
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 476 363 174 263 214
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
CLASS B - PERIOD ENDED: 5/87(5) 10/87(6) 10/88 10/89 10/90 10/91 10/92 10/93 10/94 10/95 10/96
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, beginning of
period $9.60 $10.79 $10.32 $10.98 $10.21 $10.38 $10.44 $9.74 $9.62 $8.85 $9.30
- ----------------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) 0.31 0.25 0.67 0.83 0.85 0.90 0.78 0.72 0.59(2) 0.55(2) 0.45(2)
- ----------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) on investments
and foreign currency
transactions 1.29 (0.18) 1.31 (0.27) 0.28 0.13 (0.59) (0.09) (0.78) 0.44 (0.02)
- ----------------------------------------------------------------------------------------------------------------------------------
Total from investment
operations 1.60 0.07 1.98 0.56 1.13 1.03 0.19 0.63 (0.19) 0.99 0.43
- ----------------------------------------------------------------------------------------------------------------------------------
Less distributions:
- ----------------------------------------------------------------------------------------------------------------------------------
Dividends from net
investment income (0.26) (0.28) (0.68) (0.84) (0.85) (0.73) (0.89) (0.33) (0.06) (0.53) (0.44)
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from net
realized gain on
investments (0.15) (0.26) (0.64) (0.49) -- (0.24) -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions in excess
of net investment income -- -- -- -- -- -- -- (0.04) -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Distributions from capital
paid-in -- -- -- -- (0.11) -- -- (0.38) (0.52) (0.01) (0.01)
- ----------------------------------------------------------------------------------------------------------------------------------
Total distributions (0.41) (0.54) (1.32) (1.33) (0.96) (0.97) (0.89) (0.75) (0.58) (0.54) 0.45
- ----------------------------------------------------------------------------------------------------------------------------------
Net asset value, end of
period $10.79 $10.32 $10.98 $10.21 $10.38 $10.44 $9.74 $9.62 $8.85 $9.30 $9.28
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENT RETURN
AT NET ASSET VALUE(3) (%) 65.96(4) 1.59(4) 20.09 5.47 11.84 10.44 1.72 6.77 (1.88) 11.51 4.78
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS AND SUPPLEMENTAL DATA
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets, end of period
(000s omitted) ($) 18,253 58,658 174,833 255,214 186,524 192,687 199,102 197,166 114,656 65,600 45,897
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average
net assets (%) 2.41(4) 2.19(4) 1.74 1.75 1.82 1.90 1.91 1.91 2.17 2.16 2.25
- ----------------------------------------------------------------------------------------------------------------------------------
Ratio of net investment
income (loss) to average
net assets (%) 8.69(4) 6.32(4) 6.04 8.07 8.67 8.74 7.59 7.45 6.41 6.03 4.87
- ----------------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (%) 140(4) 152(4) 364 333 186 159 476 363 174 263 214
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Class A shares commenced operations on January 3, 1992.
(2) Based on the average of the shares outstanding at the end of each month.
(3) Assumes dividend reinvestment and does not reflect the effect of sales charges.
(4) Annualized.
(5) For the period December 17, 1986 (commencement of operations) to May 31, 1987.
(6) For the period June 1, 1987 to October 31, 1987.
</TABLE>
<PAGE>
YOUR ACCOUNT
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
All John Hancock international/global funds offer two classes of shares, Class A
and Class B. Each class has its own cost structure, allowing you to choose the
one that best meets your requirements. Your financial representative can help
you decide.
- --------------------------------------------------------------------------------
CLASS A CLASS B
- --------------------------------------------------------------------------------
o Front-end sales charges, as o No front-end sales charge; all your
described below. There are several money goes to work for you right
ways to reduce these charges, also away.
described below.
o Higher annual expenses than Class A
o Lower annual expenses than Class B shares.
shares.
o A deferred sales charge, as
described below.
o Automatic conversion to Class A
shares after eight years (five years
for Short-Term Strategic Income
Fund), thus reducing future annual
expenses.
For actual past expenses of Class A and B shares, see the fund-by-fund
information earlier in this prospectus.
- --------------------------------------------------------------------------------
HOW SALES CHARGES ARE CALCULATED
CLASS A Sales charges are as follows:
- --------------------------------------------------------------------------------
CLASS A SALES CHARGES - SHORT-TERM STRATEGIC INCOME
- --------------------------------------------------------------------------------
AS A % OF AS A % OF YOUR
YOUR INVESTMENT OFFERING PRICE INVESTMENT
- --------------------------------------------------------------------------------
Up to $99,999 3.00% 3.09%
- --------------------------------------------------------------------------------
$100,000 - $499,999 2.50% 2.56%
- --------------------------------------------------------------------------------
$500,000 - $999,999 2.00% 2.04%
- --------------------------------------------------------------------------------
$1,000,000 and over See below
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASS A SALES CHARGES - WORLD BOND
- --------------------------------------------------------------------------------
AS A % OF AS A % OF YOUR
YOUR INVESTMENT OFFERING PRICE INVESTMENT
- --------------------------------------------------------------------------------
Up to $99,999 4.50% 4.71%
- --------------------------------------------------------------------------------
$100,000 - $249,999 3.75% 3.90%
- --------------------------------------------------------------------------------
$250,000 - $499,999 2.75% 2.83%
- --------------------------------------------------------------------------------
$500,000 - $999,999 2.00% 2.04%
- --------------------------------------------------------------------------------
$1,000,000 and over See below
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CLASS A SALES CHARGES - GROWTH FUNDS
- --------------------------------------------------------------------------------
AS A % OF AS A % OF YOUR
YOUR INVESTMENT OFFERING PRICE INVESTMENT
- --------------------------------------------------------------------------------
Up to $49,999 5.00% 5.26%
- --------------------------------------------------------------------------------
$50,000 - $99,999 4.50% 4.71%
- --------------------------------------------------------------------------------
$100,000 - $249,999 3.50% 3.63%
- --------------------------------------------------------------------------------
$250,000 - $499,999 2.50% 2.56%
- --------------------------------------------------------------------------------
$500,000 - $999,999 2.00% 2.04%
- --------------------------------------------------------------------------------
$1,000,000 and over See below
- --------------------------------------------------------------------------------
INVESTMENTS OF $1 MILLION OR MORE Class A shares are available with no front-end
sales charge. However, there is a contingent deferred sales charge (CDSC) on any
shares sold within one year of purchase, as follows:
- --------------------------------------------------------------------------------
CDSC ON $1 MILLION+ INVESTMENTS (ALL FUNDS)
- --------------------------------------------------------------------------------
YOUR INVESTMENT CDSC ON SHARES BEING SOLD
- --------------------------------------------------------------------------------
First $1M - $4,999,999 1.00%
- --------------------------------------------------------------------------------
Next $1 - $5M above that 0.50%
- --------------------------------------------------------------------------------
Next $1 or more above that 0.25%
- --------------------------------------------------------------------------------
For purposes of this CDSC, all purchases made during a calendar month are
counted as having been made on the LAST day of that month.
The CDSC is based on the lesser of the original purchase cost or the current
market value of the shares being sold, and is not charged on shares you acquired
by reinvesting your dividends. To keep your CDSC as low as possible, each time
you place a request to sell shares we will first sell any shares in your account
that are not subject to a CDSC.
<PAGE>
CLASS B Shares are offered at their net asset value per share, without any
initial sales charge. However, there is a contingent deferred sales charge
(CDSC) on shares you sell within a certain time after you bought them, as
described in the table below. There is no CDSC on shares acquired through
reinvestment of dividends. The CDSC is based on the original purchase cost or
the current market value of the shares being sold, whichever is less. The longer
the time between the purchase and the sale of shares, the lower the rate of the
CDSC:
- --------------------------------------------------------------------------------
CLASS B DEFERRED CHARGES
- --------------------------------------------------------------------------------
YEARS AFTER CDSC ON SHORT-TERM CDSC ON ALL
PURCHASE STRATEGIC INCOME OTHER FUND SHARES
SHARES BEING SOLD BEING SOLD
- --------------------------------------------------------------------------------
1st year 3.00% 5.00%
- --------------------------------------------------------------------------------
2nd year 2.00% 4.00%
- --------------------------------------------------------------------------------
3rd year 2.00% 3.00%
- --------------------------------------------------------------------------------
4th year 1.00% 3.00%
- --------------------------------------------------------------------------------
5th year None 2.00%
- --------------------------------------------------------------------------------
6th year None 1.00%
- --------------------------------------------------------------------------------
After 6 years None None
- --------------------------------------------------------------------------------
For purposes of this CDSC, all purchases made during a calendar month are
counted as having been made on the FIRST day of that month.
CDSC calculations are based on the number of shares involved, not on the value
of your account. To keep your CDSC as low as possible, each time you place a
request to sell shares we will first sell any shares in your account that carry
no CDSC. If there are not enough of these to meet your request, we will sell
those shares that have the lowest CDSC.
- --------------------------------------------------------------------------------
SALES CHARGE REDUCTIONS AND WAIVERS
REDUCING YOUR CLASS A SALES CHARGES There are several ways you can combine
multiple purchases of Class A shares of John Hancock funds to take advantage of
the breakpoints in the sales charge schedule. The first three ways can be
combined in any manner.
o Accumulation Privilege -- lets you add the value of any Class A shares you
already own to the amount of your next Class A investment for purposes of
calculating the sales charge.
o Letter of Intention -- lets you purchase Class A shares of a fund over a
13-month period and receive the same sales charge as if all shares had been
purchased at once.
o Combination Privilege -- lets you combine Class A shares of multiple funds for
purposes of calculating the sales charge.
To utilize: complete the appropriate section of your application, or contact
your financial representative or Signature Services to add these options (see
the back cover of this prospectus).
GROUP INVESTMENT PROGRAM Allows established groups of four or more investors to
invest as a group. Each investor has an individual account, but for sales charge
purposes the group's investments are lumped together, making the investors
potentially eligible for reduced sales charges. There is no charge, no
obligation to invest (although initial aggregate investments must be at least
$250) and you may terminate the program at any time.
To utilize: contact your financial representative or Signature Services to find
out how to qualify.
CDSC WAIVERS As long as Signature Services is notified at the time you sell, the
CDSC for either share class will generally be waived in the following cases:
o to make payments through certain systematic withdrawal plans
o to make certain distributions from a retirement plan
o because of shareholder death or disability
To utilize: if you think you may be eligible for a CDSC waiver, contact your
financial representative or Signature Services, or consult the SAI (see the back
cover of this prospectus).
REINSTATEMENT PRIVILEGE If you sell shares of a John Hancock fund, you may
reinvest some or all of the proceeds in the same share class of any John Hancock
fund within 120 days without a sales charge, as long as Signature Services is
notified before you reinvest. If you paid a CDSC when you sold your shares, you
will be credited with the amount of the CDSC. All accounts involved must have
the same registration.
To utilize: contact your financial representative or Signature Services.
<PAGE>
WAIVERS FOR CERTAIN INVESTORS Class A shares may be offered without front-end
sales charges or CDSCs to various individuals and institutions, including:
o government entities that are prohibited from paying mutual fund sales charges
o financial institutions or common trust funds investing $1 million or more for
non-discretionary accounts
o selling brokers and their employees and sales representatives
o financial representatives utilizing fund shares in fee-based investment
products under agreement with John Hancock Funds
o fund trustees and other individuals who are affiliated with these or other
John Hancock funds
o individuals transferring assets to a John Hancock fund from an employee
benefit plan that has John Hancock funds
o members of an approved affinity group financial services program
o certain insurance company contract holders (one-year CDSC usually applies)
o participants in certain retirement plans with at least 100 members (one-year
CDSC applies)
o clients of AFA, when their funds are transferred directly to Global Technology
Fund from accounts managed by AFA
o certain former shareholders of John Hancock National Aviation & Technology
Fund and Nova Fund (applies to Global Technology Fund only).
To utilize: if you think you may be eligible for a sales charge waiver, contact
your financial representative or Signature Services, or consult the SAI.
- --------------------------------------------------------------------------------
OPENING AN ACCOUNT
1 Read this prospectus carefully.
2 Determine how much you want to invest. The minimum initial investments for
the John Hancock funds are as follows:
o non-retirement account: $1,000
o retirement account: $250
o group investments: $250
o Monthly Automatic Accumulation Plan (MAAP):
$25 to open; you must invest at least $25 a month
3 Complete the appropriate parts of the account application, carefully
following the instructions. If you have questions, please contact your
financial representative or call Signature Services at 1-800-225-5291.
4 Complete the appropriate parts of the account privileges section of the
application. By applying for privileges now, you can avoid the delay and
inconvenience of having to file an additional application if you want to add
privileges later.
5 Make your initial investment using the table on the next page. You can
initiate any purchase, exchange or sale of shares through your financial
representative.
<PAGE>
- --------------------------------------------------------------------------------
BUYING SHARES
- --------------------------------------------------------------------------------
OPENING AN ACCOUNT ADDING TO AN ACCOUNT
- --------------------------------------------------------------------------------
BY CHECK
- --------------------------------------------------------------------------------
[graphic omitted]
o Make out a check for the investment o Make out a check for the investment
amount, payable to "John Hancock amount payable to "John Hancock
Signature Services, Inc." Signature Services, Inc."
o Deliver the check and your completed o Fill out the detachable investment
application to your financial slip from an account statement. If
representative, or mail them to no slip is available, include a note
Signature Services (address below). specifying the fund name, your share
class, your account number and the
name(s) in which the account is
registered.
o Deliver the check and your
investment slip or note to your
financial representative, or mail
them to Signature Services (address
below).
- --------------------------------------------------------------------------------
BY EXCHANGE
- --------------------------------------------------------------------------------
[graphic omitted]
o Call your financial representative o Call Signature Services to request
or Signature Services to request an an exchange.
exchange.
- --------------------------------------------------------------------------------
By wire
- --------------------------------------------------------------------------------
[graphic omitted]
o Deliver your completed application o Instruct your bank to wire the
to your financial representative, or amount of your investment to:
mail it to Signature Services. First Signature Bank & Trust
o Obtain your account number by Account # 900000260
calling your financial Routing # 211475000
representative or Signature Specify the fund name, your share
Services. class, your account number and the
o Instruct your bank to wire the name(s) in which the account is
amount of your investment to: registered. Your bank may charge a
First Signature Bank & Trust fee to wire funds.
Account # 900000260
Routing # 211475000
Specify the fund name, your choice
of share class, the new account
number and the name(s) in which the
account is registered. Your bank may
charge a fee to wire funds.
- --------------------------------------------------------------------------------
By phone
- --------------------------------------------------------------------------------
[graphic omitted]
See "By wire" and "By exchange." o Verify that your bank or credit
union is a member of the Automated
Clearing House (ACH) system.
o Complete the "Invest-By-Phone" and
"Bank Information" sections on your
account application.
o Call Signature Services to verify
that these features are in place on
your account.
o Tell the Signature Services
representative the fund name, your
share class, your account number,
the name(s) in which the account is
registered and the amount of your
investment.
ADDRESS
John Hancock Signature Services, Inc.
1 John Hancock Way STE 1000
Boston, MA 02217-1000
PHONE NUMBER
1-800-225-5291
Or contact your financial To open or add to an account using the
representative for instructions and Monthly Automatic Accumulation
assistance. Program, see "Additional investor
services."
<PAGE>
- --------------------------------------------------------------------------------
SELLING SHARES
- --------------------------------------------------------------------------------
DESIGNED FOR TO SELL SOME OR ALL OF YOUR SHARES
- --------------------------------------------------------------------------------
BY LETTER
- --------------------------------------------------------------------------------
[graphic omitted]
o Accounts of any type. o Write a letter of instruction or
o Sales of any amount. complete a stock power indicating
the fund name, your share class,
your account number, the name(s) in
which the account is registered and
the dollar value or number of shares
you wish to sell.
o Include all signatures and any
additional documents that may be
required (see next page).
o Mail the materials to Signature
Services.
o A check will be mailed to the
name(s) and address in which the
account is registered, or otherwise
according to your letter of
instruction.
- --------------------------------------------------------------------------------
BY PHONE
- --------------------------------------------------------------------------------
[graphic omitted]
o Most accounts. o For automated service 24 hours a day
o Sales of up to $100,000. using your touch-tone phone, call
the EASI-Line at 1-800-338-8080.
o To place your order with a
representative at John Hancock
Funds, call Signature Services
between 8 A.M. and 4 P.M. Eastern
Time on most business days.
- --------------------------------------------------------------------------------
BY WIRE OR ELECTRONIC FUNDS TRANSFER (EFT)
- --------------------------------------------------------------------------------
[graphic omitted]
o Requests by letter to sell any o Fill out the "Telephone Redemption"
amount (accounts of any type). section of your new account
o Requests by phone to sell up to application.
$100,000 (accounts with telephone o To verify that the telephone
redemption privileges). redemption privilege is in place on
an account, or to request the forms
to add it to an existing account,
call Signature Services.
o Amounts of $1,000 or more will be
wired on the next business day. A $4
fee will be deducted from your
account.
o Amounts of less than $1,000 may be
sent by EFT or by check. Funds from
EFT transactions are generally
available by the second business
day. Your bank may charge a fee for
this service.
- --------------------------------------------------------------------------------
BY EXCHANGE
- --------------------------------------------------------------------------------
[graphic omitted]
o Accounts of any type. o Obtain a current prospectus for the
o Sales of any amount. fund into which you are exchanging
by calling your financial
representative or Signature
Services.
o Call Signature Services to request
an exchange.
- --------------------------------------------------------------------------------
BY CHECK
- --------------------------------------------------------------------------------
[graphic omitted]
o Short-Term Strategic Income Fund o Request checkwriting on your account
only. application.
o Any account with checkwriting o Verify that the shares to be sold
privileges. were purchased more than 10 days
o Sales of over $100. earlier or were purchased by wire.
o Write a check for any amount over
$100.
ADDRESS
John Hancock Signature Services, Inc.
1 John Hancock Way STE 1000
Boston, MA 02217-1000
PHONE NUMBER
1-800-225-5291
Or contact your financial
To sell shares through a systematic representative for instructions and
withdrawal plan, see "Additional assistance.
investor services."
<PAGE>
SELLING SHARES IN WRITING In certain circumstances, you will need to make your
request to sell shares in writing. You may need to include additional items with
your request, as shown in the table below. You may also need to include a
signature guarantee, which protects you against fraudulent orders. You will need
a signature guarantee if:
o your address of record has changed within the past 30 days
o you are selling more than $100,000 worth of shares
o you are requesting payment other than by a check mailed to the address of
record and payable to the registered owner(s)
You can generally obtain a signature guarantee from the following sources:
o a broker or securities dealer
o a federal savings, cooperative or other type of bank
o a savings and loan or other thrift institution
o a credit union
o a securities exchange or clearing agency
A notary public CANNOT provide a signature guarantee.
- --------------------------------------------------------------------------------
SELLER REQUIREMENTS FOR WRITTEN REQUESTS
- --------------------------------------------------------------------------------
[graphic omitted]
Owners of individual, joint, sole o Letter of instruction.
proprietorship, UGMA/UTMA (custodial o On the letter, the signatures and
accounts for minors) or general titles of all persons authorized to
partner accounts. sign for the account, exactly as the
account is registered.
o Signature guarantee if applicable
(see above).
- --------------------------------------------------------------------------------
Owners of corporate or association o Letter of instruction.
accounts. o Corporate resolution, certified
within the past 90 days.
o On the letter and the resolution,
the signature of the person(s)
authorized to sign for the account.
o Signature guarantee if applicable
(see above).
- --------------------------------------------------------------------------------
Owners or trustees of trust accounts. o Letter of instruction.
o On the letter, the signature(s) of
the trustee(s).
o If the names of all trustees are not
registered on the account, please
also provide a copy of the trust
document certified within the past
60 days.
o Signature guarantee if applicable
(see above).
- --------------------------------------------------------------------------------
Joint tenancy shareholders whose o Letter of instruction signed by
co-tenants are deceased. surviving tenant.
o Copy of death certificate.
o Signature guarantee if applicable
(see above).
- --------------------------------------------------------------------------------
Executors of shareholder estates. o Letter of instruction signed by
executor.
o Copy of order appointing executor.
o Signature guarantee if applicable
(see above).
- --------------------------------------------------------------------------------
Administrators, conservators, o Call 1-800-225-5291 for
guardians and other sellers or account instructions.
types not listed above.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
TRANSACTION POLICIES
VALUATION OF SHARES The net asset value per share (NAV) for each fund and class
is determined each business day at the close of regular trading on the New York
Stock Exchange (typically 4 P.M. Eastern Time) by dividing a class's net assets
by the number of its shares outstanding.
BUY AND SELL PRICES When you buy shares, you pay
the NAV plus any applicable sales charges, as described earlier. When you sell
shares, you receive the NAV minus any applicable deferred sales charges.
EXECUTION OF REQUESTS Each fund is open on those days when the New York Stock
Exchange is open, typically Monday through Friday. Buy and sell requests are
executed at the next NAV to be calculated after your request is accepted by
Signature Services.
At times of peak activity, it may be difficult to place requests by phone.
During these times, consider using EASI-Line or sending your request in writing.
In unusual circumstances, any fund may temporarily suspend the processing of
sell requests, or may postpone payment of proceeds for up to three business days
or longer, as allowed by federal securities laws.
TELEPHONE TRANSACTIONS For your protection, telephone requests may be recorded
in order to verify their accuracy. In addition, Signature Services will take
measures to verify the identity of the caller, such as asking for name, account
number, Social Security or other taxpayer ID number and other relevant
information. If appropriate measures are taken, Signature Services is not
responsible for any losses that may occur to any account due to an unauthorized
telephone call. Also for your protection, telephone transactions are not
permitted on accounts whose names or addresses have changed within the past 30
days. Proceeds from telephone transactions can only be mailed to the address of
record.
EXCHANGES You may exchange shares of one John Hancock fund for shares of the
same class of any other, generally without paying any additional sales charges.
The registration for both accounts involved must be identical. Class B shares
will continue to age from the original date and will retain the same CDSC rate
as they had before the exchange, except that the rate will change to the new
fund's rate if that rate is higher. A CDSC rate that has increased will drop
again with a future exchange into a fund with a lower rate.
To protect the interests of other investors in the fund, a fund may cancel the
exchange privileges of any parties that, in the opinion of the fund, are using
market timing strategies or making more than seven exchanges per owner or
controlling party per calendar year. A fund may also refuse any exchange order.
A fund may change or cancel its exchange policies at any time, upon 60 days'
notice to its shareholders.
CERTIFICATED SHARES Most shares are electronically recorded. If you wish to have
certificates for your shares, please write to Signature Services. Certificated
shares can only be sold by returning the certificates to Signature Services,
along with a letter of instruction or a stock power and a signature guarantee.
SALES IN ADVANCE OF PURCHASE PAYMENTS When you place a request to sell shares
for which the purchase money has not yet been collected, the request will be
executed in a timely fashion, but the fund will not release the proceeds to you
until your purchase payment clears. This may take up to ten business days after
the purchase.
FOREIGN CURRENCIES Purchases must be made in U.S. dollars. Purchases in foreign
currencies must be converted, which may result in a fee and delayed execution.
ELIGIBILITY BY STATE You may only invest in, or exchange into, fund shares
legally available in your state.
- --------------------------------------------------------------------------------
DIVIDENDS AND ACCOUNT POLICIES
Account statements In general, you will receive account statements as follows:
o after every transaction (except a dividend reinvestment) that affects your
account balance
o after any changes of name or address of the registered owner(s)
o in all other circumstances, every quarter
Every year you should also receive, if applicable, a Form 1099 tax information
statement, mailed by January 31.
<PAGE>
DIVIDENDS The income funds generally declare income dividends daily and pay them
monthly. These income dividends begin accruing the day after payment is received
by the fund and continue through the day your shares are actually sold. The
growth funds pay income dividends, if any, annually. All funds distribute
capital gains, if any, annually.
DIVIDEND REINVESTMENTS Most investors have their dividends reinvested in
additional shares of the same fund and class. If you choose this option, or if
you do not indicate any choice, your dividends will be reinvested on the
dividend record date. Alternatively, you can choose to have a check for your
dividends mailed to you. However, if the check is not deliverable, your
dividends will be reinvested.
TAXABILITY OF DIVIDENDS As long as a fund meets the requirements for being a
tax-qualified regulated investment company, which each fund has in the past and
intends to in the future, it pays no federal income tax on the earnings it
distributes to shareholders.
Consequently, dividends you receive from a fund, whether reinvested or taken as
cash, are generally considered taxable. Dividends from a fund's long-term
capital gains are taxable as capital gains; dividends from other sources are
generally taxable as ordinary income.
Some dividends paid in January may be taxable as if they had been paid the
previous December. Corporations may be entitled to take a dividends-received
deduction for a portion of certain dividends they receive from the growth funds.
The Form 1099 that is mailed to you every January details your dividends and
their federal tax category, although you should verify your tax liability with
your tax professional.
TAXABILITY OF TRANSACTIONS Any time you sell or exchange shares, it is
considered a taxable event for you. Depending on the purchase price and the sale
price of the shares you sell or exchange, you may have a gain or a loss on the
transaction. You are responsible for any tax liabilities generated by your
transactions.
SMALL ACCOUNTS (NON-RETIREMENT ONLY) If you draw down a non-retirement account
so that its total value is less than $1,000, you may be asked to purchase more
shares within 30 days. If you do not take action, your fund may close out your
account and mail you the proceeds. Alternatively, Signature Services may charge
you $10 a year to maintain your account. You will not be charged a CDSC if your
account is closed for this reason, and your account will not be closed if its
drop in value is due to fund performance or the effects of sales charges.
- --------------------------------------------------------------------------------
ADDITIONAL INVESTOR SERVICES
MONTHLY AUTOMATIC ACCUMULATION PROGRAM (MAAP) MAAP lets you set up regular
investments from your paycheck or bank account to the John Hancock fund(s) of
your choice. You determine the frequency and amount of your investments, and you
can terminate your program at any time. To establish:
o Complete the appropriate parts of your account application.
o If you are using MAAP to open an account, make out a check ($25 minimum) for
your first investment amount payable to "John Hancock Signature Services,
Inc." Deliver your check and application to your financial representative or
Signature Services.
SYSTEMATIC WITHDRAWAL PLAN This plan may be used for routine bill payments or
periodic withdrawals from your account. To establish:
o Make sure you have at least $5,000 worth of shares in your account.
o Make sure you are not planning to invest more money in this account (buying
shares during a period when you are also selling shares of the same fund is
not advantageous to you, because of sales charges).
o Specify the payee(s). The payee may be yourself or any other party, and there
is no limit to the number of payees you may have, as long as they are all on
the same payment schedule.
o Determine the schedule: monthly, quarterly, semi-annually, annually or in
certain selected months.
o Fill out the relevant part of the account application. To add a systematic
withdrawal plan to an existing account, contact your financial representative
or Signature Services.
RETIREMENT PLANS John Hancock Funds offers a range of qualified retirement
plans, including IRAs, SEPs, 401(k) plans, 403(b) plans (including TSAs) and
other pension and profit-sharing plans. Using these plans, you can invest in any
John Hancock fund (except tax-free income funds) with a low minimum investment
of $250 or, for some group plans, no minimum investment at all. To find out
more, call Signature Services at 1-800-225-5291.
<PAGE>
FUND DETAILS
- --------------------------------------------------------------------------------
BUSINESS STRUCTURE
HOW THE FUNDS ARE ORGANIZED Each John Hancock international/global fund is an
open-end management investment company or a series of such a company.
Each fund is supervised by a board of trustees, an independent body that has
ultimate responsibility for the fund's activities. The board retains various
companies to carry out the fund's operations, including the investment adviser,
custodian, transfer agent and others (see diagram). The board has the right, and
the obligation, to terminate the fund's relationship with any of these companies
and to retain a different company if the board believes it is in the
shareholders' best interests.
At a mutual fund's inception, the initial shareholder (typically the adviser)
appoints the fund's board. Thereafter, the board and the shareholders determine
the board's membership. The boards of the John Hancock international/global
funds may include individuals who are affiliated with the investment adviser.
However, the majority of board members must be independent.
The funds do not hold annual shareholder meetings, but may hold special meetings
for such purposes as electing or removing board members, changing fundamental
policies, approving a management contract or approving a 12b-1 plan (12b-1 fees
are explained in "Sales compensation").
------------
SHAREHOLDERS
------------
| --------------------------------------------
| FINANCIAL SERVICES FIRMS AND
| THEIR REPRESENTATIVES
| DISTRIBUTION AND
| SHAREHOLDERS SERVICES Advise current and prospective share-
| holders on their fund investments, often
| in the context of an overall financial plan.
| --------------------------------------------
|
| <TABLE>
| <S> <C>
| ------------------------------------------- -------------------------------------------------
| PRINCIPAL DISTRIBUTOR TRANSFER AGENT
|
| John Hancock Funds, Inc. John Hancock Signature Services, Inc.
| 101 Huntington Avenue 1 John Hancock Way STE 1000
| Boston, MA 02199-7603
| Handles shareholder services, including record-
| Markets the funds and distributes shares keeping and statements, distribution of dividends
| through selling brokers, financial planners and processing of buy and sell requests.
| and other financial representatives. -------------------------------------------------
| -------------------------------------------
</TABLE>
<TABLE>
<S> <C> <C> <C>
- ------------------------------ ------------------------------- ------------------------------------ |
SUBADVISERS INVESTMENT ADVISER CUSTODIANS |
American Fund Advisors, Inc. John Hancock Advisers, Inc. Investors Bank & Trust Co. |
1415 Kelium Place 101 Huntington Avenue 89 South Street |
Garden City, NY 11530 Boston, MA 02199-7603 Boston, MA 02111 ASSET |
MANAGEMENT |
John Hancock Advisers Manages the fund's business and State Street Bank and Trust Company |
International Limited investment activities. 225 Franklin Street |
34 Dover Street ------------------------------- Boston, MA 02110 |
London, UK W1X 3RA |
Hold the funds' assets , settle all |
Indosuez Asia Advisers Limited portfolio trades and collect most of |
One Exchange Square the valuation data required for |
Hong Kong calculating each fund's NAV. |
------------------------------------ |
Provide portfolio management
to certain funds.
- ------------------------------
</TABLE>
-------------------------------
TRUSTEES
Supervise the funds' activities
-------------------------------
<PAGE>
ACCOUNTING COMPENSATION The funds (except for Global Technology) compensate the
adviser for performing tax and financial management services. Annual
compensation is not expected to exceed 0.02% of each fund's average net assets.
Global Technology pays a $100,000 administration fee to the adviser.
PORTFOLIO TRADES In placing portfolio trades, the adviser may use brokerage
firms that market the fund's shares or are affiliated with John Hancock Mutual
Life Insurance Company, but only when the adviser believes no other firm offers
a better combination of quality execution (i.e., timeliness and completeness)
and favorable price.
INVESTMENT GOALS Except for Global Rx Fund,
International Fund and World Bond Fund, each fund's investment goal is
fundamental and may only be changed with shareholder approval.
DIVERSIFICATION Except for Global Rx Fund, Short-Term Strategic Income Fund and
World Bond Fund, all of the international/global funds are diversified.
- --------------------------------------------------------------------------------
SALES COMPENSATION
As part of their business strategies, the funds, along with John Hancock Funds,
pay compensation to financial services firms that sell the funds' shares. These
firms typically pass along a portion of this compensation to your financial
representative.
Compensation payments originate from two sources: from sales charges and from
12b-1 fees that are paid out of the funds' assets ("12b-1" refers to the federal
securities regulation authorizing annual fees of this type). The 12b-1 fee rates
vary by fund and by share class, according to Rule 12b-1 plans adopted by the
funds. The sales charges and 12b-1 fees paid by investors are detailed in the
fund-by-fund information. The portions of these expenses that are reallowed to
financial services firms are shown on the next page.
Distribution fees may be used to pay for sales compensation to financial
services firms, marketing and overhead expenses and, for Class B shares,
interest expenses.
- --------------------------------------------------------------------------------
CLASS B UNREIMBURSED DISTRIBUTION EXPENSES(1)
- --------------------------------------------------------------------------------
UNREIMBURSED AS A % OF
FUND EXPENSES NET ASSETS
- --------------------------------------------------------------------------------
Global $ 800,320 3.06%
- --------------------------------------------------------------------------------
Global Marketplace $ 172,913 0.64%
- --------------------------------------------------------------------------------
Global Rx $ 461,009 1.19%
- --------------------------------------------------------------------------------
Global Technology $ 1,170,398 2.59%
- --------------------------------------------------------------------------------
International $ 435,589 3.59%
- --------------------------------------------------------------------------------
Pacific Basin Equities $ 979,454 3.04%
- --------------------------------------------------------------------------------
Short-Term Strategic Income $ 2,532,676 3.87%
- --------------------------------------------------------------------------------
World Bond $ 4,967,286 9.07%
- --------------------------------------------------------------------------------
(1) As of the most recent fiscal year end covered by each fund's financial
highlights. These expenses may be carried forward indefinitely.
INITIAL COMPENSATION Whenever you make an investment in a fund or funds, the
financial services firm receives either a reallowance from the initial sales
charge or a commission, as described below. The firm also receives the first
year's service fee at this time.
ANNUAL COMPENSATION Beginning with the second year after an investment is made,
the financial services firm receives an annual service fee of 0.25% of its total
eligible net assets. This fee is paid quarterly in arrears.
Financial services firms selling large amounts of fund shares may receive extra
compensation. This compensation, which John Hancock Funds pays out of its own
resources, may include asset retention fees as well as reimbursement for
marketing expenses.
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
CLASS A INVESTMENTS
- ---------------------------------------------------------------------------------------------------------------------------
MAXIMUM
SALES CHARGE REALLOWANCE FIRST YEAR MAXIMUM
PAID BY INVESTORS OR COMMISSION SERVICE FEE TOTAL COMPENSATION(1)
(% of offering price) (% of offering price) (% of net investment) (% of offering price)
- ---------------------------------------------------------------------------------------------------------------------------
SHORT-TERM STRATEGIC INCOME FUND
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Up to $99,999 3.00% 2.26% 0.25% 2.50%
- ---------------------------------------------------------------------------------------------------------------------------
$100,000 - $499,999 2.50% 2.01% 0.25% 2.25%
- ---------------------------------------------------------------------------------------------------------------------------
$500,000 - $999,999 2.00% 1.51% 0.25% 1.75%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
WORLD BOND FUND
- ---------------------------------------------------------------------------------------------------------------------------
Up to $99,999 4.50% 3.76% 0.25% 4.00%
- ---------------------------------------------------------------------------------------------------------------------------
$100,000 - $249,999 3.75% 3.01% 0.25% 3.25%
- ---------------------------------------------------------------------------------------------------------------------------
$250,000 - $499,999 2.75% 2.06% 0.25% 2.30%
- ---------------------------------------------------------------------------------------------------------------------------
$500,000 - $999,999 2.00% 1.51% 0.25% 1.75%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
GROWTH FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
Up to $49,999 5.00% 4.01% 0.25% 4.25%
- ---------------------------------------------------------------------------------------------------------------------------
$50,000 - $99,999 4.50% 3.51% 0.25% 3.75%
- ---------------------------------------------------------------------------------------------------------------------------
$100,000 - $249,999 3.50% 2.61% 0.25% 2.85%
- ---------------------------------------------------------------------------------------------------------------------------
$250,000 - $499,999 2.50% 1.86% 0.25% 2.10%
- ---------------------------------------------------------------------------------------------------------------------------
$500,000 - $999,999 2.00% 1.36% 0.25% 1.60%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
REGULAR INVESTMENTS OF
$1 MILLION OR MORE (ALL FUNDS)
- ---------------------------------------------------------------------------------------------------------------------------
First $1M - $4,999,999 -- 0.75% 0.25% 1.00%
- ---------------------------------------------------------------------------------------------------------------------------
Next $1 - $5M above that -- 0.25% 0.25% 0.50%
- ---------------------------------------------------------------------------------------------------------------------------
Next $1 or more above that -- 0.00% 0.25% 0.25%
- ---------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------
WAIVER INVESTMENTS(2) -- 0.00% 0.25% 0.25%
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
CLASS B INVESTMENTS
- ---------------------------------------------------------------------------------------------------------------------------
MAXIMUM
REALLOWANCE FIRST YEAR MAXIMUM
OR COMMISSION SERVICE FEE TOTAL COMPENSATION
(% of offering price) (% of net investment) (% of offering price)
- ---------------------------------------------------------------------------------------------------------------------------
SHORT-TERM STRATEGIC INCOME FUND
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
All amounts 2.25% 0.25% 2.50%
- ---------------------------------------------------------------------------------------------------------------------------
ALL OTHER FUNDS
- ---------------------------------------------------------------------------------------------------------------------------
All amounts 3.75% 0.25% 4.00%
- ---------------------------------------------------------------------------------------------------------------------------
(1) Reallowance/commission percentages and service fee percentages are calculated from different amounts, and therefore may
not equal total compensation percentages if combined using simple addition.
(2) Refers to any investments made by municipalities, financial institutions, trusts and affinity group members that take
advantage of the sales charge waivers described earlier in this prospectus.
CDSC revenues collected by John Hancock Funds may be used to pay commissions
when there is no initial sales charge.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
MORE ABOUT RISK
A fund's risk profile is largely defined by the fund's primary securities and
investment practices. You may find the most concise description of each fund's
risk profile in the fund-by-fund information.
The funds are permitted to utilize -- within limits established by the trustees
- -- certain other securities and investment practices that have higher risks and
opportunities associated with them. To the extent that a fund utilizes these
securities or practices, its overall performance may be affected, either
positively or negatively. On the following pages are brief descriptions of these
securities and practices, along with the risks associated with them. The funds
follow certain policies that may reduce these risks.
As with any mutual fund, there is no guarantee that the performance of a John
Hancock international/global fund will be positive over any period of time --
days, months or years. However, international markets have performed better over
the past two decades than domestic markets.
- --------------------------------------------------------------------------------
TYPES OF INVESTMENT RISK
CORRELATION RISK The risk that changes in the value of
a hedging instrument will not match those of the asset being hedged (hedging is
the use of one investment to offset the effects of another investment).
CREDIT RISK The risk that the issuer of a security, or the counterparty to a
contract, will default or otherwise become unable to honor a financial
obligation.
CURRENCY RISK The risk that fluctuations in the exchange rates between the U.S.
dollar and foreign currencies may negatively affect an investment. Adverse
changes in exchange rates may erode or reverse any gains produced by foreign
currency denominated investments, and may widen any losses.
EXTENSION RISK The risk that an unexpected rise in interest rates will extend
the life of a mortgage-backed security beyond the expected prepayment time,
typically reducing the security's value.
INFORMATION RISK The risk that key information about a security or market is
inaccurate or unavailable.
INTEREST RATE RISK The risk of market losses attributable to changes in interest
rates. With fixed-rate securities, a rise in interest rates typically causes a
fall in values, while a fall in rates typically causes a rise in values.
LEVERAGE RISK Associated with securities or practices (such as borrowing) that
multiply small index or market movements into large changes in value.
o HEDGED When a derivative (a security whose value is based on another security
or index) is used as a hedge against an opposite position that the fund also
holds, any loss generated by the derivative should be substantially offset by
gains on the hedged investment, and vice versa. While hedging can reduce or
eliminate losses, it can also reduce or eliminate gains.
o SPECULATIVE To the extent that a derivative is not used as a hedge, the fund
is directly exposed to the risks of that derivative. Gains or losses from
speculative positions in a derivative may be substantially greater than the
derivative's original cost.
LIQUIDITY RISK The risk that certain securities may be difficult or impossible
to sell at the time and the price that the seller would like. The seller may
have to lower the price, sell other securities instead, or forego an investment
opportunity, any of which could have a negative effect on fund management or
performance.
MANAGEMENT RISK The risk that a strategy used by a fund's management may fail to
produce the intended result. Common to all mutual funds.
MARKET RISK The risk that the market value of a security may move up and down,
sometimes rapidly and unpredictably. These fluctuations may cause a security to
be worth less than it was worth at an earlier time. Market risk may affect a
single issuer, industry, sector of the economy or the market as a whole. Common
to all stocks and bonds and the mutual funds that invest in them.
NATURAL EVENT RISK The risk of losses attributable to natural disasters, crop
failures and similar events.
OPPORTUNITY RISK The risk of missing out on an investment opportunity because
the assets necessary to take advantage of it are tied up in less advantageous
investments.
POLITICAL RISK The risk of losses attributable to government or political
actions, from changes in tax or trade statutes to governmental collapse and war.
PREPAYMENT RISK The risk that unanticipated prepayments may occur, reducing the
value of mortgage-backed securities.
VALUATION RISK The risk that a fund has valued certain of its securities at a
higher price than it can sell them for.
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
HIGHER-RISK SECURITIES AND PRACTICES
- ------------------------------------------------------------------------------------------------------------------------------------
This table shows each fund's investment limitations as a percentage of portfolio assets.
In each case the principal types of risk are listed (see previous page for definitions).
Numbers in this table show allowable usage only; for actual usage, consult the fund's annual/semi-annual reports.
10 Percent of total assets ( [ ] )
10 Percent of net assets (roman type)
X No policy limitation on usage; fund may be using currently
o Permitted, but has not typically been used
- -- Not permitted
- ------------------------------------------------------------------------------------------------------------------------------------
Pacific Short-Term
Global Global Basin Strategic World
Global Marketplace Global Rx Technology International Equities Income Bond
------ ----------- --------- ---------- ------------- -------- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
INVESTMENT PRACTICES
BORROWING: REVERSE REPURCHASE
AGREEMENTS The borrowing of money from
banks or through reverse repurchase
agreements. Leverage credit risks. [10] [33.3] [33.3] 10 [33.3] [33.3] [10] 10
CURRENCY TRADING The direct trading or
holding of foreign currencies as an
asset. Currency risk. X X X X X X X X
REPURCHASE AGREEMENTS The purchase of
a security that must later be sold
back to the issuer at the same price
plus interest. Credit risk. X X X X X X X X
SECURITIES LENDING The lending of
securities to financial institutions,
which provide cash or government
securities as collateral. Credit risk. [10] [33.3] [33.3] [33.3] [33.3] [33.3] [30] [30]
SHORT SALES The selling of securities
which have been borrowed on the
expectation that the market price will
drop.
o Hedged. Hedged leverage, market,
correlation, liquidity, opportunity
risks -- o o -- o o -- --
o Speculative. Speculative leverage,
market, liquidity risks. -- o o -- o -- -- --
SHORT-TERM TRADING Selling a security
soon after purchase. A portfolio
engaging in short-term trading will
have higher turnover and transaction
expenses. Market risk. X X X X X X X X
WHEN-ISSUED SECURITIES AND FORWARD
COMMITMENTS The purchase or sale of
securities for delivery at a future
date; market value may change before
delivery. Market, opportunity,
leverage risks. X X X X X X X X
- ------------------------------------------------------------------------------------------------------------------------------------
CONVENTIONAL SECURITIES
FOREIGN DEBT SECURITIES Debt
securities issued by foreign
governments or companies. Credit,
currency, interest rate, market,
political risks. [5] [35](1) [35](1) 10(2) [35](1) [35](1) X(1) X(1)
NON-INVESTMENT-GRADE DEBT SECURITIES
Debt securities rated below BBB/Baa
are considered junk bonds. Credit,
market, interest rate, liquidity,
valuation, information risks. -- -- [35] 10(2) -- -- [67] [35]
RESTRICTED AND ILLIQUID SECURITIES
Securities not traded on the open
market. May include illiquid Rule 144A
securities. Liquidity, valuation,
market risks. 15 15 15 15 15 15 15 15
- ------------------------------------------------------------------------------------------------------------------------------------
UNLEVERAGED DERIVATIVE SECURITIES
ASSET-BACKED SECURITIES Securities
backed by unsecured debt, such as
credit card debt; these securities are
often guaranteed or
over-collateralized to enhance their
credit quality. Credit, interest rate
risks. o o o o o o X X
MORTGAGE-BACKED SECURITIES Securities
backed by pools of mortgages,
including passthrough certificates,
PACs, TACs and other senior classes of
collateralized mortgage obligations
(CMOs). Credit, extension, prepayment,
interest rate risks. o o o o o o X X
PARTICIPATION INTERESTS Securities
representing an interest in another
security or in bank loans. Credit,
interest rate, liquidity, valuation
risks. -- -- -- 10(2) -- -- 15(3) 15(3)
</TABLE>
<PAGE>
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
HIGHER-RISK SECURITIES AND PRACTICES (cont'd)
- ------------------------------------------------------------------------------------------------------------------------------------
Pacific Short-Term
Global Global Basin Strategic World
Global Marketplace Global Rx Technology International Equities Income Bond
------ ----------- --------- ---------- ------------- -------- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
LEVERAGED DERIVATIVE SECURITIES
CURRENCY CONTRACTS Contracts involving
the right or obligation to buy or sell
a given amount of foreign currency at
a specified price and future date.
o HEDGED. Currency, hedged leverage,
correlation, liquidity, opportunity
risks. X X X X X X X X
o SPECULATIVE. Currency, speculative
leverage, liquidity risks. o o o o o o o o
FINANCIAL FUTURES AND OPTIONS;
SECURITIES AND INDEX OPTIONS Contracts
involving the right or obligation to
deliver or receive assets or money
depending on the performance of one or
more assets or an economic index.
o FUTURES AND RELATED OPTIONS.
Interest rate, currency, market,
hedged or speculative leverage,
correlation, liquidity, opportunity
risks. X X X o X X X X
o OPTIONS ON SECURITIES AND INDICES.
Interest rate, currency, market,
hedged or speculative leverage,
correlation, liquidity, credit,
opportunity risks. o o o o o o o o
STRUCTURED SECURITIES Indexed and/or
leveraged mortgage-backed and other
debt securities, including
principal-only and interest-only
securities, leveraged floating rate
securities and others. These
securities tend to be highly sensitive
to interest rate movements and their
performance may not correlate to these
movements in a conventional fashion.
Credit, interest rate, extension,
prepayment, market, speculative
leverage, liquidity, valuation risks. X X X 10(2) X X X X
(1) No more than 25% of the fund's assets will be invested in securities of any one foreign government.
(2) Included in the 10% limitation on debt securities.
(3) Included in the 15% limitation on illiquid securities.
(4) Applies to purchased options only.
</TABLE>
- --------------------------------------------------------------------------------
ANALYSIS OF FUNDS WITH 5% OR MORE JUNK BONDS(1)
- --------------------------------------------------------------------------------
INVESTMENT-GRADE BONDS
QUALITY RATING SHORT-TERM STRATEGIC
(S&P/MOODY'S)(2) INCOME FUND
----------------- --------------------
AAA/Aaa 12.8%
AA/Aa 26.6%
A/A 6.0%
BBB/Baa 7.6%
- --------------------------------------------------------------------------------
JUNK BONDS
QUALITY RATING SHORT-TERM STRATEGIC
(S&P/MOODY'S)(2) INCOME FUND
----------------- --------------------
BB/Ba 26.2%
B/B 14.9%
CCC/Caa 1.0%
CC/Ca 0.0%
C/C 0.0%
D 0.2%
% OF PORTFOLIO IN BONDS 95.3%
- --------------------------------------------------------------------------------
INVESTMENT-GRADE BONDS
QUALITY RATING WORLD BOND
(S&P/MOODY'S)(2) FUND
----------------- ----------
AAA/Aaa 65.7%
AA/Aa 25.5%
A/A 2.3%
BBB/Baa 0.3%
- --------------------------------------------------------------------------------
JUNK BONDS
QUALITY RATING WORLD BOND
(S&P/MOODY'S)(2) FUND
----------------- ----------
BB/Ba 2.6%
B/B 1.3%
CCC/Caa 0.0%
CC/Ca 0.0%
C/C 0.0%
D 0.0%
% OF PORTFOLIO IN BONDS 97.7%
- --------------------------------------------------------------------------------
(1) Average weighted quality distribution for the most recent fiscal year.
(2) In cases where the S&P and Moody's ratings for a given bond issue do not
agree, the issue has been counted in the higher category.
<PAGE>
FOR MORE INFORMATION
- --------------------------------------------------------------------------------
Two documents are available that offer further information on John Hancock
international/global funds:
ANNUAL/SEMI-ANNUAL REPORT TO SHAREHOLDERS
Includes financial statements, detailed performance information, portfolio
holdings, a statement from portfolio management and the auditor's report.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI contains more detailed information on all aspects of the funds. The
current annual/ semi-annual report is included in the SAI.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference (is legally a part of this prospectus).
To request a free copy of the current annual/semi-annual report or SAI, please
write or call:
John Hancock Signature Services, Inc.
1 John Hancock Way STE 1000
Boston, MA 02217-1000
Telephone: 1-800-225-5291
EASI-Line: 1-800-338-8080
TDD: 1-800-544-6713
Internet: www.jhancock.com/funds
101 Huntington Avenue
Boston, Massachusetts 02199-7603
(C) 1996 John Hancock Funds, Inc.
GLIPN 3/97
<PAGE>
JOHN HANCOCK FUNDS
A GLOBAL INVESTMENT MANAGEMENT FIRM
VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL
SAVE YOUR FUND THE EXPENSE OF ADDITIONAL MAILINGS
JOHN HANCOCK GLOBAL MARKETPLACE FUND
101 HUNTINGTON AVENUE, BOSTON, MASSACHUSETTS 02199
SPECIAL MEETING OF SHAREHOLDERS - NOVEMBER 12, 1997
PROXY SOLICITATION BY THE BOARD OF TRUSTEES
The undersigned, revoking previous proxies, hereby appoint(s) Edward J.
Boudreau, Jr., Susan S. Newton and James B. Little, with full power of
substitution in each, to vote all the shares of beneficial interest of John
Hancock Global Marketplace Fund ("Global Marketplace Fund") which the
undersigned is (are) entitled to vote at the Special Meeting of Shareholders
(the "Meeting") of Global Marketplace Fund to be held at 101 Huntington Avenue,
Boston, Massachusetts, on November 22, 1997 at 9:00 a.m., Boston time, and at
any adjournment(s) of the Meeting. All powers may be exercised by a majority of
all proxy holders or substitutes voting or acting, or, if only one votes and
acts, then by that one. Receipt of the Proxy Statement dated September 22, 1997
is hereby acknowledged. If not revoked, this proxy shall be voted for the
proposal:
PLEASE SIGN, DATE AND RETURN
PROMPTLY IN ENCLOSED ENVELOPE
Date __________________, 1997
NOTE: Signature(s) should agree
with name(s) printed herein. When
signing as attorney, executor,
administrator, trustee or guardian,
please give your full title as
such. If a corporation, please sign
in full corporate name by president
or other authorized officer. If a
partnership, please sign in
partnership name by authorized
person.
-----------------------------------
Signature(s)
<PAGE>
JOHN HANCOCK FUNDS
A GLOBAL INVESTMENT MANAGEMENT FIRM
VOTE THIS PROXY CARD TODAY! YOUR PROMPT RESPONSE WILL SAVE YOUR FUND THE EXPENSE
OF ADDITIONAL MAILINGS.
THIS PROXY SHALL BE VOTED IN FAVOR OF (FOR) PROPOSAL 1 IF NO SPECIFICATION IS
MADE BELOW. AS TO ANY OTHER MATTER, THE PROXY OR PROXIES SHALL VOTE IN
ACCORDANCE WITH THEIR BEST JUDGEMENT. PLEASE VOTE BY FILLING IN THE APPROPRIATE
BOX BELOW, AS SHOWN, USING BLUE OR BLACK INK OR DARK PENCIL. DO NOT USE RED INK.
(1) To approve an Agreement and Plan of Reorganization between Global
Marketplace Fund and John Hancock Global Fund. Under this Agreement, Global
Marketplace Fund would transfer all of its assets to Global Fund in
exchange for shares of Global Fund. These shares will be distributed
proportionately to you and the other shareholders of Global Marketplace
Fund. Global Fund will also assume Global Marketplace Fund's liabilities.
---- ---- ----
FOR |____| AGAINST |____| ABSTAIN |____|
PLEASE DO NOT FORGET TO SIGN THE REVERSE SIDE OF THIS CARD.
