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John Hancock
Short-Term
Strategic
Income Fund
[LOGO] Prospectus
September 1, 1999
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As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved this fund or determined whether the information in this
prospectus is adequate and accurate. Anyone who indicates otherwise is
committing a federal crime.
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
101 Huntington Avenue, Boston, Massachusetts 02199-7603
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Contents
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A summary of the fund's Short-Term Strategic Income Fund 4
goals, strategies, risks,
performance and expenses.
Your account
Choosing a share class 6
How sales charges are calculated 6
Sales charge reductions and waivers 7
Opening an account 8
Buying shares 9
Selling shares 10
Transaction policies 12
Dividends and account policies 12
Additional investor services 13
Policies and instructions for Fund details
opening, maintaining and
closing an account. Business structure 14
Financial highlights 15
Further information on the For more information back cover
fund.
3
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Short-Term Strategic Income Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks a high level of current income. To pursue this goal,
the fund invests primarily in the following types of securities:
o foreign government and corpo-rate debt securities from developed and emerging
markets
o U.S. government and agency securities
o U.S. corporate debt securities
Under normal circumstances, the fund invests assets in all three of these
sectors, but may invest up to 100% of assets in any one sector. The fund
maintains an average portfolio maturity of three years or less.
In managing the portfolio, the managers allocate assets among the three major
sectors based on analysis of economic factors such as projected international
interest rate movements, industry cycles and political trends.
Within each sector, the managers look for securities that are appropriate for
the overall portfolio in terms of yield, credit quality, structure and industry
distribution. In selecting securities, relative yields and risk/reward ratios
are the primary considerations.
The fund maintains an average portfolio quality rating of A, which is an
investment-grade rating. However, 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.)
The fund may use certain derivatives (investments whose value is based on
indices, securities or currencies).
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
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PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks and potential rewards. The average annual figures reflect sales
charges; the year-by-year and index figures do not, and would be lower if they
did. All figures assume dividend reinvestment. Past performance does not
indicate future results.
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Class B year-by-year total returns - calendar years
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1991 1992 1993 1994 1995 1996 1997 1998
7.22% 2.57% 5.07% 1.57% 9.25% 8.09% 4.60% 1.19%
Best quarter: Q2 `95, 5.49% Worst quarter: Q3 `98, -4.00%
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Average annual total returns - for periods ending 12/31/98
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Life of Life of
1 year 5 year Class A Class B
Class A - began 1/3/92 -1.32% 4.93% 4.79% -
Class B - began 12/28/90 -1.69% 4.89% - 4.91%
Index 9.11% 4.82% 4.14% 4.67%
Index: Salomon Brothers World Money Market Index, an unmanaged index of
short-term foreign bonds.
PORTFOLIO MANAGERS
Frederick L. Cavanaugh, Jr.
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Senior vice president of adviser
Joined team in 1998
Joined adviser in 1986
Began career in 1975
Arthur N. Calavritinos, CFA
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Vice president of adviser
Joined team in 1998
Joined adviser in 1988
Began career in 1986
4
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Main Risks
[Clip Art] The major factors in this fund's performance are interest rates and
credit risk. When interest rates rise, bond prices typically fall. Any bonds
held by the fund could be downgraded in credit rating or go into default. Junk
bonds can fall on bad news about a country, an industry or a company. Share
price, yield and total return may fluctuate more than with less aggressive bond
funds.
Foreign investments are more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
These risks are more significant in emerging markets.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if the managers' country or sector
allocations and securities selection strategies don't perform as expected, the
fund could underperform its peers or lose money.
To the extent that the fund invests in securities with additional risks, those
risks could reduce performance:
o Emerging market securities, derivatives and other higher-risk securities can
be hard to value or to sell at a fair price.
o Certain derivatives could produce disproportionate gains or losses.
Investments in the fund are not bank deposits and are not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency. You
could lose money by investing in this fund.
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YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly. Because Class C shares are new, their expenses are based on Class B
expenses.
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Shareholder transaction expenses Class A Class B Class C
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Maximum sales charge (load) on purchases
as a % of purchase price 3.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price,
whichever is less none(1) 3.00% 1.00%
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Annual operating expenses Class A Class B Class C
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Management fee 0.65% 0.65% 0.65%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.40% 0.40% 0.40%
Total fund operating expenses 1.35% 2.05% 2.05%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
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Expenses Year 1 Year 3 Year 5 Year 10
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Class A $ 433 $ 715 $ 1,017 $ 1,875
Class B - with redemption $ 508 $ 842 $ 1,103 $ 1,958
- without redemption $ 208 $ 643 $ 1,103 $ 1,958
Class C - with redemption $ 308 $ 643 $ 1,103 $ 2,379
- without redemption $ 208 $ 643 $ 1,103 $ 2,379
FUND CODES
Class A
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Ticker JHSAX
CUSIP 409906856
Newspaper STStratA
SEC number 811-4630
Class B
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Ticker FRSWX
CUSIP 409906708
Newspaper STStratB
SEC number 811-4630
Class C
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Ticker -
CUSIP 409906799
Newspaper -
SEC number 811-4630
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
5
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Your account
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CHOOSING A SHARE CLASS
Each share class has its own cost structure, including a Rule 12b-1 plan that
allows it to pay fees for the sale, distribution and service of its shares. Your
financial representative can help you decide which share class is best for you.
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Class A
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o Front-end sales charges, as described at right.
o Distribution and service (12b-1) fees of 0.30%.
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Class B
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o No front-end sales charge; all your money goes to work for you right away.
o Distribution and service (12b-1) fees of 1.00%.
o A deferred sales charge, as described on following page.
o Automatic conversion to Class A shares after five years, thus reducing future
annual expenses.
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Class C
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o No front-end sales charge; all your money goes to work for you right away.
o Distribution and service (12b-1) fees of 1.00%.
o A 1.00% contingent deferred sales charge on shares sold within one year of
purchase.
o No automatic conversion to Class A shares, so annual expenses continue at the
Class C level throughout the life of your investment.
For actual past expenses of each share class, see the fund information earlier
in this prospectus.
Because 12b-1 fees are paid on an ongoing basis, they may cost shareholders more
than other types of sales charges.
Investors purchasing $1 million or more of Class B or Class C shares may want to
consider the lower operating expenses of Class A shares.
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HOW SALES CHARGES ARE CALCULATED
Class A Sales charges are as follows:
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Class A sales charges
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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
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:
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CDSC on $1 million+ investments - all funds
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CDSC on shares
Your investment 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 first 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.
6 YOUR ACCOUNT
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Class B and Class C Shares are offered at their net asset value per share,
without any initial sales charge. However, you may be charged a contingent
deferred sales charge (CDSC) on shares you sell within a certain time after you
bought them, as described in the tables 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 CDSCs are as follows:
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Class B deferred charges
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Years after CDSC on shares
purchase being sold
1st year 3.00%
2nd year 2.00%
3rd year 2.00%
4th year 1.00
5th year none
6th year none
After 6th year none
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Class C deferred charges
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Years after purchase CDSC
1st year 1.00%
After 1st year none
For purposes of these CDSCs, 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.
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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. Retirement plans investing $1 million in Class B
shares may add that value to Class A purchases to calculate charges.
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, or consult the SAI (see the
back cover of this prospectus).
Group Investment Program A group may be treated as a single purchaser under the
accumulation and combination privileges. Each investor has an individual
account, but the group's investments are lumped together for sales charge
purposes, making the investors potentially eligible for reduced sales charges.
There is no charge, no obligation to invest (although initial investments must
total at least $250), and individual investors may close their accounts at any
time.
To utilize: contact your financial representative or Signature Services to find
out how to qualify, or consult the SAI (see the back cover of this prospectus).
CDSC waivers As long as Signature Services is notified at the time you sell, the
CDSC for each 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).
YOUR ACCOUNT 7
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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.
Waivers for certain investors Class A shares may be offered without front-end
sales charges or CDSCs to various individuals and institutions, including:
o selling brokers and their employees and sales representatives
o financial representatives utilizing fund shares in fee-based investment
products under signed 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 from an employee benefit plan into a John
Hancock fund
o certain insurance company contract holders (one-year CDSC usually applies)
o participants in certain retirement plans with at least 100 eligible employees
(one-year CDSC applies)
To utilize: if you think you may be eligible for a sales charge waiver, contact
Signature Services or consult the SAI (see the back cover of this prospectus).
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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
o fee-based clients of selling brokers who placed at least $2 billion in John
Hancock funds: $250
3 Complete the appropriate parts of the account application, carefully following
the instructions. You must submit additional documentation when opening trust,
corporate or power of attorney accounts. You must notify your financial
representative or Signature Services if this information changes. For more
details, please contact your financial representative or call Signature
Services at 1-800-225-5291.
4 Complete the appropriate parts of the account privileges 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 and your
financial representative can initiate any purchase, exchange or sale of
shares.
8 YOUR ACCOUNT
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<TABLE>
<CAPTION>
<S> <C> <C>
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Buying shares
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Opening an account Adding to an account
By check
[Clip Art] o Make out a check for the o Make out a check for the
investment amount, payable investment amount payable to
to "John Hancock Signature "John Hancock Signature
Services, Inc." Services, Inc."
o Deliver the check and your o Fill out the detachable
completed application to investment slip from an
your financial representative, account statement. If no
or mail them to Signature slip is available, include
Services (address below). a note 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
[Clip Art] o Call your financial representative o Call your financial representative
or Signature Services to request an or Signature Services to request an
exchange. exchange.
By wire
[Clip Art] o Deliver your completed o Instruct your bank to wire
application to your financial the amount of your investment
representative, or mail to:
it to Signature Services.
First Signature Bank & Trust
o Obtain your account number Account # 900000260
by calling your financial Routing # 211475000
representative or
Signature Services. Specify the fund name, your
share class, your account
o Instruct your bank to wire number and the name(s) in
the amount of your investment which the account is registered.
to: Your bank may charge a fee to
wire funds.
First Signature Bank & Trust
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
[Clip Art] 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.
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Address:
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
Phone Number: 1-800-225-5291
Or contact your financial representative for
instructions and assistance.
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To open or add to an account using the Monthly Automatic Accumulation Program,
see "Additional investor services."
YOUR ACCOUNT 9
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Selling shares
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Designed for To sell some or all of your shares
By letter
[Clip Art] o Accounts of any type. o Write a letter of instruction
or complete a stock power
o Sales of any amount. 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
[Clip Art] o Most accounts. o For automated service 24 hours
a day using your touch-tone
o Sales of up to $100,000. phone, call the EASI-Line
at 1-800-338-8080.
o To place your order, call
your financial representative
or Signature Services between
8 a.m. and 4 p.m. Eastern Time
on most business days.
By wire or electronic funds transfer (EFT)
[Clip Art] o Requests by letter to sell o To verify that the telephone
any amount (accounts of redemption privilege is in
any type). place on an account, or to
request the form to add it
o Requests by phone to sell to an existing account, call
up to $100,000 (accounts Signature Services.
with telephone redemption
privileges). 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
[Clip Art] o Accounts of any type. o Obtain a current prospectus
for the fund into which you
o Sales of any amount. are exchanging by calling your
financial representative or
Signature Services.
o Call your financial representative
or Signature Services to request an
exchange.
By check
[Clip Art] o Any account with o Request checkwriting on your
checkwriting privileges. account application.
o Sales of over $100. o Verify that the shares to
be sold were purchased
more than 10 days earlier or
were purchased by wire.
o Write a check for any
amount over $100.
10 YOUR ACCOUNT
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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, unless they were previously provided to Signature Services and are
still accurate. These items are 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 will need to obtain your signature guarantee from a member of the Signature
Guarantee Medallion Program. Most brokers and securities dealers are members of
this program. A notary public CANNOT provide a signature guarantee.
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Seller Requirements for written requests
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Owners of individual, joint, UGMA/UTMA (custodial accounts o Letter of instruction.
for minors).
o On the letter, the signatures of all persons authorized to
sign for the account, exactly as the account is registered.
o Signature guarantee if applicable (see above).
Owners of corporate, sole proprietorship, general partner or o Letter of instruction.
association accounts.
o Corporate business/organization resolution, certified
within the past 12 months, or a business/organization
certification form.
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 Copy of the trust document certified within the past 12
months, or a trust certification form.
o Signature guarantee if applicable (see above).
Joint tenancy shareholders with rights of survivorship whose o Letter of instruction signed by surviving tenant.
co-tenants are deceased.
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, certified within the
past 12 months.
o Signature guarantee if applicable (see above).
Administrators, conservators, guardians and other sellers or o Call 1-800-225-5291 for instructions.
account types not listed above.
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Address:
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
Phone Number: 1-800-225-5291
Or contact your financial representative for
instructions and assistance.
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To sell shares through a systematic withdrawal plan, see "Additional investor
services."
YOUR ACCOUNT 11
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TRANSACTION POLICIES
Valuation of shares The net asset value per share (NAV) for each class of the
fund is determined each business day at the close of regular trading on the New
York Stock Exchange (typically 4 p.m. Eastern Time). The fund uses market prices
in valuing portfolio securities, but may use fair-value estimates if reliable
market prices are unavailable. The fund may trade foreign stock or other
portfolio securities on U.S. holidays and weekends, even though the fund's
shares will not be priced on those days. This may change the fund's NAV on days
when you cannot buy or sell shares.
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 The 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 Signature Services receives your
request in good order.
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, the 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. 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 and Class
C 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.
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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.
Dividends The fund declares income dividends daily and pays them monthly. These
income dividends begin accruing the day after the fund receives payment and
continue through the day your shares are actually sold. The dividends are mostly
from ordinary income. The fund distributes any capital gains 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.
12 YOUR ACCOUNT
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Taxability of dividends Dividends you receive from a fund, whether reinvested or
taken as cash, are generally considered taxable. Dividends from a fund's income
and short-term capital gains are taxable as ordinary income. Dividends from a
fund's long-term capital gains are taxable at a lower rate. Whether gains are
short-term or long-term depends on the fund's holding period. Some dividends
paid in January may be taxable as if they had been paid the previous December.
Dividends may include a return of capital.
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.
Year 2000 compliance The adviser and the fund's service providers are taking
steps to address any year 2000-related computer problems. However, there is some
risk that these problems could disrupt the issuers in which the fund invests,
the fund's operations or financial markets generally.
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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 retirement plans,
including traditional, Roth and Education IRAs, SIMPLE plans, SEPs, 401(k) plans
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.
YOUR ACCOUNT 13
<PAGE>
Fund details
- --------------------------------------------------------------------------------
BUSINESS STRUCTURE
The diagram below shows the basic business structure used by the fund. The
fund's board of trustees oversees the fund's business activities and retains the
services of the various firms that carry out the fund's operations.
Management fees For the year ended October 31, 1998, the fund paid the
investment adviser management fees at an annual rate of 0.65% of the fund's net
assets.
The management firm The fund is 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 $30 billion in assets.
------------
Shareholders
------------
--------------------------------------------
Financial services firms and
their representatives
Advise current and prospective share-
holders on their fund investments, often
in the context of an overall financial plan.
--------------------------------------------
Distribution and
shareholder services
- ------------------------------------------- -------------------------------------------------
Principal distributor Transfer agent
John Hancock Funds, Inc. John Hancock Signature Services, Inc.
Markets the fund and distributes shares Handles shareholder services, including record-
through selling brokers, financial planners keeping and statements, distribution of dividends
and other financial representatives. and processing of buy and sell requests.
- ------------------------------------------- -------------------------------------------------
- ------------------------------- -------------------------------------
Investment adviser Custodian
John Hancock Advisers, Inc. Investors Bank & Trust Co.
101 Huntington Avenue
Boston, MA 02199-7603 Holds the fund's assets, settles all
portfolio trades and collects most of
Manages the fund's business and the valuation data required for
investment activities. calculating the fund's NAV.
- ------------------------------- -------------------------------------
Asset
management
------------------------------
Trustees
Oversee the fund's activities.
------------------------------
14 FUND DETAILS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
These tables detail the performance of the fund's share classes, including total
return information showing how much an investment in the fund has increased or
decreased each year.
Short-Term Strategic Income Fund
Figures audited by PricewaterhouseCoopers LLP.
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 10/94 10/95 10/96 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $9.12 $8.47 $8.41 $8.46 $8.31
Net investment income (loss) 0.76(1) 0.77(1) 0.65 0.61(1) 0.49(1)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions (0.53) (0.06) 0.05 (0.15) (0.39)
Total from investment operations 0.23 0.71 0.70 0.46 0.10
Less distributions:
Dividends from net investment income (0.62) (0.61) (0.57) (0.52) (0.48)
Distributions in excess of net investment income (0.04) - - (0.08) (0.00)(2)
Distributions in excess of net realized gain on investments sold (0.12) - - - -
Distributions from capital paid-in (0.10) (0.16) (0.08) (0.01) (0.01)
Total distributions (0.88) (0.77) (0.65) (0.61) (0.49)
Net asset value, end of period $8.47 $8.41 $8.46 $8.31 $7.92
Total investment return at net asset value(3) (%) 2.64 8.75 8.60 5.55 1.17
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 13,091 16,997 49,338 64,059 50,498
Ratio of expenses to average net assets (%) 1.26 1.33 1.48 1.43 1.35
Ratio of net investment income (loss) to average net assets (%) 8.71 9.13 7.59 7.22 5.97
Portfolio turnover rate (%) 150 147 77 71 74
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 10/94 10/95 10/96 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $9.11 $8.46 $8.40 $8.45 $8.30
Net investment income (loss) 0.70(1) 0.70(1) 0.59 0.55(1) 0.44(1)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions (0.53) (0.06) 0.05 (0.15) (0.38)
Total from investment operations 0.17 0.64 0.64 0.40 0.06
Less distributions:
Dividends from net investment income (0.56) (0.56) (0.52) (0.47) (0.43)
Distributions in excess of net investment income (0.04) - - (0.07) (0.00)(2)
Distributions in excess of net realized gain on investments sold (0.12) - - - -
Distributions from capital paid-in (0.10) (0.14) (0.07) (0.01) (0.01)
Total distributions (0.82) (0.70) (0.59) (0.55) (0.44)
Net asset value, end of period $8.46 $8.40 $8.45 $8.30 $7.92
Total investment return at net asset value(3) (%) 1.93 7.97 7.89 4.83 0.60
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 98,390 84,601 48,137 25,908 19,950
Ratio of expenses to average net assets (%) 1.99 2.07 2.12 2.13 2.02
Ratio of net investment income to average net assets (%) 8.00 8.40 7.07 6.51 5.30
Portfolio turnover rate (%) 150 147 77 71 74
</TABLE>
(1) Based on the average of the shares outstanding at the end of each month.
(2) Less than $0.01 per share.
(3) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
FUND DETAILS 15
<PAGE>
For more information
- --------------------------------------------------------------------------------
Two documents are available that offer further information on the fund:
Annual/Semiannual Report to Shareholders
Includes financial statements, a discussion of the market conditions and
investment strategies that significantly affected performance, as well as the
auditors' report (in annual report only).
Statement of Additional Information (SAI)
The SAI contains more detailed information on all aspects of the fund. The
current annual report is included in the SAI.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference into (is legally a part of) this prospectus.
To request a free copy of the current annual/semiannual report or the SAI,
please contact John Hancock:
By mail:
John Hancock Signature
Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
By phone: 1-800-225-5291
By EASI-Line: 1-800-338-8080
By TDD: 1-800-544-6713
On the Internet:
www.jhfunds.com
Or you may view or obtain these
documents from the SEC:
In person: at the SEC's Public
Reference Room in Washington, DC
By phone: 1-800-SEC-0330
By mail: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
On the Internet: www.sec.gov
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
101 Huntington Avenue
Boston, Massachusetts
02199-7603
JOHN HANCOCK (R)
(C) 1999 John Hancock Funds, Inc.
320PN 9/99
<PAGE>
JOHN HANCOCK
International/
Global Funds
[LOGO] Prospectus
September 1, 1999
- --------------------------------------------------------------------------------
As with all mutual funds, the Securities and Exchange Commission has not
approved or disapproved these funds or determined whether the information in
this prospectus is adequate and accurate. Anyone who indicates otherwise is
committing a federal crime.
European Equity Fund
Global Fund
Global Health Sciences Fund
Global Technology Fund
International Fund
Pacific Basin Equities Fund
[LOGO] JOHN HANCOCK FUNDS
A Global Investment Management Firm
101 Huntington Avenue, Boston, Massachusetts 02199-7603
<PAGE>
Contents
- --------------------------------------------------------------------------------
A fund-by-fund summary European Equity Fund 4
of goals, strategies, risks,
performance and expenses. Global Fund 6
Global Health Sciences Fund 8
Global Technology Fund 10
International Fund 12
Pacific Basin Equities Fund 14
Policies and instructions for Your account
opening, maintaining and
closing an account in any Choosing a share class 16
international/global fund.
How sales charges are calculated 16
Sales charge reductions and waivers 17
Opening an account 18
Buying shares 19
Selling shares 20
Transaction policies 22
Dividends and account policies 22
Additional investor services 23
Further information on the Fund details
international/global funds.
Business structure 24
Financial highlights 25
For more information back cover
<PAGE>
Overview
- --------------------------------------------------------------------------------
JOHN HANCOCK INTERNATIONAL/GLOBAL FUNDS
These funds invest primarily in foreign and U.S. stocks and seek long-term
growth of capital. Each fund has its own strategy and its own risk profile.
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 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
RISKS OF MUTUAL FUNDS
Mutual funds are not bank deposits and are not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency. Because
you could lose money by investing in these funds, be sure to read all risk
disclosure carefully before investing.
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
$30 billion in assets.
FUND INFORMATION KEY
Concise fund-by-fund descriptions begin on the next page. Each description
provides the following information:
[Clip Art] Goal and strategy The fund's particular investment goals and the
strategies it intends to use in pursuing those goals.
[Clip Art] Main risks The major risk factors associated with the fund.
[Clip Art]Past performance The fund's total return, measured year-by-year and
over time.
[Clip Art]Your expenses The overall costs borne by an investor in the fund,
including sales charges and annual expenses.
3
<PAGE>
European Equity Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks long-term growth of capital. To pursue this goal, the
fund normally invests at least 80% of assets in stocks of European companies,
most of which have large market capitalizations. These companies derive more
than half of their revenues from European operations, are organized under
European law or are traded principally on European stock exchanges. While the
fund invests most heavily in developed economies, it is permitted to invest in
securities of European emerging market companies.
In managing the portfolio, the managers focus primarily on individual stock
selection rather than country allocation. A team of investment analysts
regularly screens European companies, such as those included in the MSCI Europe
Index, identifying those that appear to have strong leadership and potential for
sustained earnings growth. The analysts track these companies and typically
establish target buy and sell prices for each using a quantitative investment
model. The fund generally invests in companies based on further fundamental
financial analysis and on-site visits. The managers use country and sector
allocation guidelines to reduce concentration risk.
The fund may use derivatives (investments whose value is based on indices,
securities or currencies), especially to manage cash flows and currency
exposure. It may also invest in investment-grade debt securities issued by
European or U.S. companies and governments.
In abnormal market conditions, the fund may temporarily invest more than 20% of
assets in investment-grade short-term securities. In these and other cases, the
fund might not achieve its goal.
- --------------------------------------------------------------------------------
PAST PERFORMANCE
[Clip Art] This section normally shows how the fund's total return has varied
from year to year, along with a broad based market index for reference. Because
the fund has not completed a calendar year, there is not a full year of
performance to report.
SUBADVISER
Indocam International
Investment Services
- -------------------------------
Paris-based team responsible
for day-to-day investments
Supervised by the adviser
4
<PAGE>
MAIN RISKS
[Clip Art] As with most growth funds, the value of your investment will go up
and down in response to stock market movements. Because the fund concentrates on
a single region of the world, its performance may be more volatile than that of
a fund that invests globally.
Foreign investments are more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
These risks are more significant in emerging markets.
The fund's management strategy will influence performance significantly.
European or large- capitalization stocks as a group could fall out of favor with
the market, causing the fund to underperform funds that focus on other types of
stocks. Similarly, if the managers' stock selection strategy doesn't perform as
expected, the fund could underperform its peers or lose money.
To the extent that the fund makes investments with additional risks, those risks
could increase volatility or reduce performance:
o Emerging market securities, derivatives and other higher-risk securities can
be hard to value or to sell at a fair price.
o Certain derivatives could produce disproportionate gains or losses.
o Any bonds held by the fund could be downgraded in credit rating or go into
default. Bond prices generally fall when interest rates rise.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly. Because Class C shares are new, their expenses are based on Class B
expenses.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
- ----------------------------------------------------------------------------------------------
Shareholder transaction expenses Class A Class B Class C
- ----------------------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price, whichever is less none(1) 5.00% 1.00%
- ----------------------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- ----------------------------------------------------------------------------------------------
Management fee 0.90% 0.90% 0.90%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 2.11% 2.11% 2.11%
Total fund operating expenses 3.31% 4.01% 4.01%
Expense reimbursement (at least until 3/1/00) 1.41% 1.41% 1.41%
Actual operating expenses 1.90% 2.60% 2.60%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- ----------------------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- ----------------------------------------------------------------------------------------------
Class A $ 683 $ 1,343 $ 2,025 $ 3,833
Class B - with redemption $ 763 $ 1,393 $ 2,138 $ 3,978
- without redemption $ 263 $ 1,093 $ 1,938 $ 3,978
Class C - with redemption $ 363 $ 1,093 $ 1,938 $ 4,128
- without redemption $ 263 $ 1,093 $ 1,938 $ 4,128
FUND CODES
Class A
- --------------------------
Ticker JHEAX
CUSIP 410233886
Newspaper EuropeA
SEC number 811-4932
Class B
- --------------------------
Ticker JHEBX
CUSIP 410233878
Newspaper EuropeB
SEC number 811-4932
Class C
- --------------------------
Ticker -
CUSIP 410233860
Newspaper -
SEC number 811-4932
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
5
<PAGE>
Global Fund
GOAL AND STRATEGY
[Clip Art] 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
does not maintain a fixed allocation of assets, either with respect to
securities type or to geography.
In managing the portfolio, the managers concentrate on country allocation and
securities selection. They also seek to diversify the fund across countries and
sectors. The managers base the fund's country allocation on a quantitative model
as well as analysis of political trends and economic factors such as projected
currency exchange rates.
The investment analysis team is organized by sector and regularly screens large,
well-known companies, such as those listed in the MSCI All Country World Free
Index. The team then uses fundamental financial analysis to identify companies
that appear most promising in terms of stable growth, reasonable valuations and
management strength. The team conducts on-site visits and typically establishes
target buy and sell prices based on the team's valuation estimates.
Although the fund invests primarily in common stocks, it may invest in virtually
any type of equity or debt security, foreign or domestic.
The fund may use certain derivatives (investments whose value is based on
indices, securities or currencies).
In abnormal market conditions, the fund may temporarily invest more than 35% of
assets in investment-grade short-term securities. In these and other cases, the
fund might not achieve its goal.
- --------------------------------------------------------------------------------
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks and potential rewards. The average annual figures reflect sales
charges; the year-by-year and index figures do not, and would be lower if they
did. All figures assume dividend reinvestment. Past performance does not
indicate future results.
- -----------------------------------------------------------------------------------------------------
Class B year-by-year total returns - calendar years
- -----------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
33.00% -19.64% 23.14% -0.27% 33.85% -5.44% 9.86% 11.85% 6.58% 20.73%
Best quarter: Q4 `98, 20.73% Worst quarter: Q3 `90, -22.53%
- -----------------------------------------------------------------------------------------------------
Average annual total returns - for periods ending 12/31/98
- -----------------------------------------------------------------------------------------------------
Life of
1 year 5 year 10 year Class A
Class A - began 1/3/92 15.41% 7.98% - 10.14%
Class B 15.73% 8.09% 10.14% -
Index 21.97% 14.78% 12.01% 13.20%
Index: MSCI All Country World Free Index, an unmanaged index of freely traded
stocks of foreign and U.S. companies.
PORTFOLIO MANAGERS
Miren Etcheverry
- -----------------------------------
Senior vice president of adviser
Joined team in 1996
Joined adviser in 1996
Began career in 1977
Gerardo J. Espinoza
- -----------------------------------
Senior vice president of adviser
Joined team in 1996
Joined adviser in 1996
Began career in 1979
John L.F. Wills Senior
- -----------------------------------
vice president of adviser
Managing director of subadviser
Joined team in 1994
Joined subadviser in 1987
Began career in 1969
SUBADVISER
John Hancock Advisers
International Limited
- -----------------------------------
London-based affiliate of adviser
Founded in 1986
6
<PAGE>
MAIN RISKS
[Clip Art] As with most growth funds, the value of your investment will go up
and down in response to stock market movements.
Foreign investments are more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
These risks are more significant in emerging markets.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
To the extent that the fund makes investments with additional risks, those risks
could increase volatility or reduce performance:
o Emerging market securities, derivatives and other higher-risk securities can
be hard to value or to sell at a fair price.
o Certain derivatives could produce disproportionate gains or losses.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly. Because Class C shares are new, their expenses are based on Class B
expenses.
- -----------------------------------------------------------------------------------------------------
Shareholder transaction expenses Class A Class B Class C
- -----------------------------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price, whichever is less none(1) 5.00% 1.00%
- -----------------------------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- -----------------------------------------------------------------------------------------------------
Management fee 0.86% 0.86% 0.86%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.66% 0.66% 0.66%
Total fund operating expenses 1.82% 2.52% 2.52%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- -----------------------------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- -----------------------------------------------------------------------------------------------------
Class A $ 676 $ 1,044 $ 1,436 $ 2,530
Class B - with redemption $ 755 $ 1,085 $ 1,540 $ 2,684
- without redemption $ 255 $ 785 $ 1,340 $ 2,684
Class C - with redemption $ 355 $ 785 $ 1,340 $ 2,856
- without redemption $ 255 $ 785 $ 1,340 $ 2,856
FUND CODES
Class A
- --------------------------
Ticker JHGAX
CUSIP 409906104
Newspaper GlobA
SEC number 811-4630
Class B
- --------------------------
Ticker FGLOX
CUSIP 409906203
Newspaper GlobB
SEC number 811-4630
Class C
- --------------------------
Ticker -
CUSIP 409906815
Newspaper -
SEC number 811-4630
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
7
<PAGE>
Global Health Sciences Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks long-term growth of capital. To pursue this goal, the
fund normally invests at least 65% of assets in U.S. and foreign stocks of
health care companies. These companies derive more than half of their revenues
from health care-related activities or commit more than half of their assets to
these activities. Because the fund is non-diversified, it may invest more than
5% of assets in securities of a single issuer.
In managing the portfolio, the managers study economic trends to allocate assets
among the following major categories:
o pharmaceuticals and biotechnology, including drug delivery systems
o medical devices, including orthopedic, cardiac and ophthalmic devices as well
as analytical equipment
o health care services, including retail drug stores, nursing homes and HMOs
The managers also use broad economic analysis to identify promising industries
within these categories. Historically, companies that meet these criteria have
generally been U.S.-based companies.
The management team uses fundamental financial analysis to identify individual
companies of any size that appear most attractive in terms of earnings
stability, growth potential and valuation. The team generally assesses the
senior management of companies through interviews and company visits. An
independent advisory board composed of scientific and medical experts provides
advice and consultation on health care developments.
The fund may use certain derivatives (investments whose value is based on
indices, securities or currencies).
In abnormal market conditions, the fund may temporarily invest more than 35% of
assets in investment-grade short-term securities. In these and other cases, the
fund might not achieve its goal.
- --------------------------------------------------------------------------------
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks and potential rewards. The average annual figures reflect sales
charges; the year-by-year and index figures do not, and would be lower if they
did. All figures assume dividend reinvestment. Past performance does not
indicate future results.
- --------------------------------------------------------------------------------------------------
Class A year-by-year total returns - calendar years
- --------------------------------------------------------------------------------------------------
1992 1993 1994 1995 1996 1997 1998
18.36% 1.20% 8.85% 39.88% 6.50% 29.73% 19.49%
Best quarter: Q2 `97, 23.14% Worst quarter: Q1 `93, -18.85%
- --------------------------------------------------------------------------------
Average annual total returns - for periods ending 12/31/98
- --------------------------------------------------------------------------------
Life of Life of
1 year 5 year Class A Class B
Class A - began 10/1/91 13.52% 19.02% 20.36% -
Class B - began 3/7/94 13.68% - - 18.13%
Index 28.60% 24.05% 20.09% 24.83%
Index: Standard & Poor's 500 Stock Index, an unmanaged index of 500 U.S. common
stocks.
PORTFOLIO MANAGERS
Linda I. Miller, CFA
- ----------------------------
Vice president of adviser
Joined team in 1995
Joined adviser in 1995
Began career in 1980
Robert D. Hallisey, Jr.
- ----------------------------
Joined team in 1997
Joined adviser in 1993
Began career in 1993
8
<PAGE>
MAIN RISKS
[Clip Art] As with most growth funds, the value of your investment will go up
and down in response to stock market movements. Another major factor in this
fund's performance is the economic condition of the health care sector. The
value of your investment may fluctuate more widely than it would in a fund that
is diversified across sectors.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if the managers' asset allocation and stock
selection strategies don't perform as expected, the fund could underperform its
peers or lose money.
Foreign investments are more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
These risks are more significant in emerging markets.
To the extent that the fund makes investments with additional risks, those risks
could increase volatility or reduce performance:
o If the fund invests heavily in a single issuer, its performance could suffer
significantly from adverse events affecting that issuer.
o Emerging market securities, derivatives and other higher-risk securities can
be hard to value or to sell at a fair price.
o Certain derivatives could produce disproportionate gains or losses.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly. Because Class C shares are new, their expenses are based on Class B
expenses.
- ---------------------------------------------------------------------------------------------
Shareholder transaction expenses Class A Class B Class C
- ---------------------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price, whichever is less none(1) 5.00% 1.00%
- ---------------------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- ---------------------------------------------------------------------------------------------
Management fee 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.51% 0.51% 0.51%
Total fund operating expenses 1.61% 2.31% 2.31%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- ---------------------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- ---------------------------------------------------------------------------------------------
Class A $ 656 $ 983 $ 1,332 $ 2,316
Class B - with redemption $ 734 $ 1,021 $ 1,435 $ 2,471
- without redemption $ 234 $ 721 $ 1,235 $ 2,471
Class C - with redemption $ 334 $ 721 $ 1,235 $ 2,646
- without redemption $ 234 $ 721 $ 1,235 $ 2,646
FUND CODES
Class A
- ---------------------------
Ticker JHGRX
CUSIP 410233308
Newspaper GIHSciA
SEC number 811-4932
Class B
- ---------------------------
Ticker JHRBX
CUSIP 410233704
Newspaper GIHSciB
SEC number 811-4932
Class C
- ---------------------------
Ticker -
CUSIP 410233852
Newspaper -
SEC number 811-4932
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
9
<PAGE>
Global Technology Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks long-term growth of capital with income as a sec-
ondary objective. To pursue this goal, the fund invests primarily in equity
securities of technology companies. This designation includes U.S. and foreign
companies that rely extensively on technology in their product development or
operations.
In managing the portfolio, the managers focus primarily on individual stock
selection rather than country allocation. The managers seek out companies of any
size whose stocks appear to be trading below their true value, as determined by
fundamental financial analysis of their business models and balance sheets as
well as interviews with senior management. The fund particularly favors
companies that are undergoing a business change that appears to signal
accelerated growth or higher earnings. Historically, companies that meet these
criteria have generally been U.S.-based multinational companies.
The fund may invest up to 10% of assets in debt securities of any maturity,
including bonds rated as low as CC/Ca and their unrated equivalents. (Bonds
rated below BBB/Baa are considered junk bonds.) It may also invest in certain
higher-risk securities, including securities that have not been offered to the
public, called restricted securities.
The fund may use certain derivatives (investments whose value is based on
indices, securities or currencies).
In abnormal market conditions, the fund may temporarily invest more than 35% of
assets in investment-grade short-term securities. In these and other cases, the
fund might not achieve its goal.
- --------------------------------------------------------------------------------
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks and potential rewards. The average annual figures reflect sales
charges; the year-by-year and index figures do not, and would be lower if they
did. All figures assume dividend reinvestment. Past performance does not
indicate future results.
- ----------------------------------------------------------------------------------------
Class A year-by-year total returns - calendar years
- ----------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
16.61% -18.46% 33.05% 5.70% 32.06% 9.62% 46.53% 12.52% 6.68% 49.15%
Best quarter: Q4 `98, 43.01% Worst quarter: Q3 `90, -27.13%
- ----------------------------------------------------------------------------------------
Average annual total returns - for periods ending 12/31/98
- ----------------------------------------------------------------------------------------
Life of
1 year 5 year 10 year Class B
Class A 41.68% 22.26% 17.08% -
Class B - began 1/3/94 43.16% - - 22.78%
Index 28.60% 24.05% 18.95% 24.05%
Index: Standard & Poor's 500 Stock Index, an unmanaged index of 500 U.S. common
stocks.
SUBADVISER
American Fund Advisors, Inc.
- -----------------------------------------
Responsible for day-to-day investments
Founded in 1978
Supervised by the adviser
PORTFOLIO MANAGERS
Barry J. Gordon
- -----------------------------------------
President of subadviser
Joined team in 1983
Began career in 1971
Marc H. Klee, CFA
- -----------------------------------------
Senior vice president of subadviser
Joined team in 1983
Began career in 1977
10
<PAGE>
MAIN RISKS
[Clip Art] As with most growth funds, the value of your investment will go up
and down in response to stock market movements. Another major factor in this
fund's performance is the economic condition of the technology sector. The value
of your investment may fluctuate more widely than it would in a fund that is
diversified across sectors.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if the managers' stock selection strategy
doesn't perform as expected, the fund could underperform its peers or lose
money.
Foreign investments are more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
These risks are more significant in emerging markets.
To the extent that the fund makes investments with additional risks, those risks
could increase volatility or reduce performance:
o Emerging market securities, derivatives and other higher-risk securities can
be hard to value or to sell at a fair price.
o Certain derivatives could produce disproportionate gains or losses.
o Any bonds held by the fund could be downgraded in credit rating or go into
default. Bond prices generally fall when interest rates rise. Junk bond prices
can fall on bad news about the economy, an industry or a company.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
YOUR EXPENSES
[Clip Art]Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly. Because Class C shares are new, their expenses are based on Class B
expenses.
- ------------------------------------------------------------------------------------------
Shareholder transaction expenses Class A Class B Class C
- ------------------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price, whichever is less none(1) 5.00% 1.00%
- -----------------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- -----------------------------------------------------------------------------------------
Management fee 0.79% 0.79% 0.79%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.41% 0.41% 0.41%
Total fund operating expenses 1.50% 2.20% 2.20%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- -----------------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- -----------------------------------------------------------------------------------------
Class A $ 645 $ 950 $ 1,278 $ 2,201
Class B - with redemption $ 723 $ 988 $ 1,380 $ 2,357
- without redemption $ 223 $ 688 $ 1,180 $ 2,357
Class C - with redemption $ 323 $ 688 $ 1,180 $ 2,534
- without redemption $ 223 $ 688 $ 1,180 $ 2,534
FUND CODES
Class A
- ---------------------------
Ticker NTTFX
CUSIP 478032303
Newspaper GITechA
SEC number 811-3392
Class B
- ---------------------------
Ticker FGTBX
CUSIP 478032402
Newspaper GlTechB
SEC number 811-3392
Class C
- ---------------------------
Ticker -
CUSIP 478032600
Newspaper -
SEC number 811-3392
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
11
<PAGE>
International Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks long-term growth of capital. To pursue this goal, the
fund normally invests at least 65% of assets in stocks of companies outside the
United States. The fund does not maintain a fixed allocation of assets, either
with respect to securities type or geography.
In managing the portfolio, the managers concentrate on country allocation and
securities selection. They also seek to diversify the fund across countries and
sectors. The managers base the fund's country allocation on a quantitative model
as well as analysis of political trends and economic factors such as projected
currency exchange rates.
The investment analysis team is organized by sector and regularly screens large
companies, such as those listed in the MSCI All Country World-Ex U.S. Free Index
(an unmanaged global index that excludes U.S. companies). The team then uses
fundamental financial analysis to identify companies that appear most promising
in terms of stable growth, reasonable valuations and management strength. The
team conducts on-site visits and typically establishes target buy and sell
prices based on the team's valuation estimates.
Although the fund invests primarily in common stocks, it may invest in virtually
any type of equity or debt security, foreign or domestic. The fund may use
certain derivatives (investments whose value is based on indices, securities or
currencies). In abnormal market conditions, the fund may temporarily invest more
than 35% of assets in investment-grade short-term securities. In these and other
cases, the fund might not achieve its goal.
- --------------------------------------------------------------------------------
PAST PERFORMANCE
[Clip Art]The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks and potential rewards. The average annual figures reflect sales
charges; the year-by-year and index figures do not, and would be lower if they
did. All figures assume dividend reinvestment. Past performance does not
indicate future results.
- -------------------------------------------------------------------------------------
Class A year-by-year total returns - calendar years
- -------------------------------------------------------------------------------------
1994 1995 1996 1997 1998
-6.61% 5.34% 11.36% -7.73% 17.67%
Best quarter: Q4 `98, 22.17% Worst quarter: Q3 `98, -17.06%
- -------------------------------------------------------------------------------------
Average annual total returns - for periods ending 12/31/98
- -------------------------------------------------------------------------------------
1 year 5 year
Class A - began 1/3/94 11.84% 2.48%
Class B - began 1/3/94 11.77% 2.43%
Index 21.97% 14.78%
Index: MSCI All Country World-Ex U.S. Free Index, an unmanaged index of freely
traded stocks of foreign companies.
PORTFOLIO MANAGER
Miren Etcheverry
- ----------------------------------
Senior vice president of adviser
Joined team in 1996
Joined adviser in 1996
Began career in 1977
Gerardo J. Espinoza
- ----------------------------------
Senior vice president of adviser
Joined team in 1996
Joined adviser in 1996
Began career in 1979
John L.F. Wills Senior
- ----------------------------------
vice president of adviser
Managing irector of subadviser
Joined team in 1994
Joined subadviser in 1987
Began career in 1969
SUBADVISER
John Hancock Advisers
International Limited
- ----------------------------------
London-based affiliate of adviser
Founded in 1986
12
<PAGE>
MAIN RISKS
[Clip Art] As with most growth funds, the value of your investment will go up
and down in response to stock market movements.
Foreign investments are more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse.
These risks are more significant in emerging markets.
The fund's management strategy will influence performance significantly. If the
fund invests in countries or regions that experience economic downturns,
performance could suffer. Similarly, if certain investments or industries don't
perform as expected, or if the managers' stock selection strategy doesn't
perform as expected, the fund could underperform its peers or lose money.
To the extent that the fund makes investments with additional risks,
those risks could increase volatility or reduce performance:
o Emerging market securities, derivatives and other higher-risk securities can
be hard to value or to sell at a fair price.
o Certain derivatives could produce disproportionate gains or losses.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly. Because Class C shares are new, their expenses are based on Class B
expenses.
- --------------------------------------------------------------------------------------------
Shareholder transaction expenses Class A Class B Class C
- --------------------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price, whichever is less none(1) 5.00% 1.00%
- --------------------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- --------------------------------------------------------------------------------------------
Management fee 1.00% 1.00% 1.00%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 2.35% 2.35% 2.35%
Total fund operating expenses 3.65% 4.35% 4.35%
Expense reimbursement (at least until 3/1/00) 1.86% 1.86% 1.86%
Annual operating expenses 1.79% 2.49% 2.49%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- -------------------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- -------------------------------------------------------------------------------------------
Class A $ 673 $ 1,398 $ 2,143 $ 4,096
Class B - with redemption $ 752 $ 1,450 $ 2,259 $ 4,239
- without redemption $ 252 $ 1,150 $ 2,059 $ 4,239
Class C - with redemption $ 352 $ 1,150 $ 2,059 $ 4,385
- without redemption $ 252 $ 1,150 $ 2,059 $ 4,385
FUND CODES
Class A
- -----------------------------
Ticker FINAX
CUSIP 409906500
Newspaper IntlA
SEC number 811-4630
Class B
- -----------------------------
Ticker FINBX
CUSIP 409906609
Newspaper IntlB
SEC number 811-4630
Class C
- -----------------------------
Ticker -
CUSIP 409906831
Newspaper -
SEC number 811-4630
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
13
<PAGE>
Pacific Basin Equities Fund
GOAL AND STRATEGY
[Clip Art] The fund seeks long-term growth of capital. To pursue this goal, the
fund invests primarily in a diversified portfolio of equity securities of
companies in the Pacific Basin. The Pacific Basin includes all countries
bordering the Pacific Ocean, but the managers focus on Japan, Hong Kong,
Australia, Singapore, South Korea and Taiwan. The fund may invest in other
Pacific Basin countries, such as Indonesia, Malaysia, New Zealand, the
Philippines, Thailand, China and Vietnam. Some of these are emerging market
countries.
The fund may also invest in stocks of Asian companies outside the Pacific Basin
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.
In managing the portfolio, the managers focus primarily on individual stock
selection rather than country allocation. A team of investment analysts
regularly screens larger and more established companies in these countries which
may be small- or medium-capitalization companies by U.S. standards. The team
identifies those that appear to have capable management and the potential for
strong earnings growth. They track these companies and typically establish
target buy and sell prices for each using a quantitative investment model. The
fund generally invests in 50 to 100 companies based on further fundamental
financial analysis and on-site visits. The managers use country and sector
allocation guidelines to reduce concentration risk.
Although the fund invests primarily in common stocks, it may invest in virtually
any type of equity security, foreign or domestic. The fund may use certain
derivatives (investments whose value is based on indices, securities or
currencies).
In abnormal market conditions, the fund may temporarily invest more than 35% of
assets in investment-grade short-term securities. In these and other cases, the
fund might not achieve its goal.
- --------------------------------------------------------------------------------
PAST PERFORMANCE
[Clip Art] The graph shows how the fund's total return has varied from year to
year, while the table shows performance over time (along with a broad-based
market index for reference). This information may help provide an indication of
the fund's risks and potential rewards. The average annual figures reflect sales
charges; the year-by-year and index figures do not, and would be lower if they
did. All figures assume dividend reinvestment. Past performance does not
indicate future results.
- ----------------------------------------------------------------------------------------------------
Class A year-by-year total returns - calendar years
- ----------------------------------------------------------------------------------------------------
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
19.04% -23.01% 12.68% 2.02% 70.45% -9.28% 4.95% 3.37% -27.87% -10.72%
Best quarter: Q4 `93, 23.91% Worst quarter: Q4 `97, -25.64%
- ----------------------------------------------------------------------------------------------------
Average annual total returns - for periods ending 12/31/98
- ----------------------------------------------------------------------------------------------------
Life of
1 year 5 year 10 year Class B
Class A -15.19% -9.65% 0.79% -
Class B - began 3/7/94 -15.83% - - -9.01%
Index 2.69% -3.95% -0.71% -6.73%
Index: MSCI Pacific Index, an unmanaged index of stocks of companies in
Australia, Japan and certain other Pacific Rim countries.
SUBADVISERS
Indocam Asia Advisers Limited
- ------------------------------------
Hong Kong-based team responsible
for day-to-day investments
Supervised by the adviser
John Hancock Advisers
International Limited
- ------------------------------------
London-based affiliate of
adviser
Founded in 1986
PORTFOLIO MANAGERS
Ayaz Ebrahim
- -----------------------------------
Director and CIO of Indocam
Joined team in 1997
Began career in 1988
Miren Etcheverry
- -----------------------------------
Senior vice president of adviser
Joined team and adviser in 1996
Began career in 1977
Gerardo J. Espinoza
- -----------------------------------
Senior vice president of adviser
Joined team and adviser in 1996
Began career in 1979
John L.F. Wills
- -----------------------------------
Senior vice president of adviser
Managing director of JHAI
Joined team in 1988
Joined subadviser in 1987
Began career in 1969
14
<PAGE>
MAIN RISKS
[Clip Art] As with any growth fund, the value of your investment will go up and
down in response to stock market movements. Because the fund concentrates on a
single region of the world, its performance may be more volatile than that of a
fund that invests globally.
Foreign investments are more risky than domestic investments. Investments in
foreign securities may be affected by fluctuations in currency exchange rates,
incomplete or inaccurate financial information on companies, social upheavals
and political actions ranging from tax code changes to governmental collapse. In
emerging market economies, including much of the Pacific Basin, these risks are
more significant than in developed economies.
The fund's management strategy will influence performance significantly. Pacific
Basin stocks as a group could fall out of favor with the market, causing the
fund to underperform funds that focus on other types of stocks. Similarly, if
the managers' stock selection strategy doesn't perform as expected, the fund
could underperform its peers or lose money.
To the extent that the fund makes investments with additional risks, those risks
could increase volatility or reduce performance:
o Emerging market securities, derivatives and other higher-risk securities can
be hard to value or sell at a fair price.
o Stocks of small- and medium- capitalization companies tend to be more volatile
than those of larger companies.
o Certain derivatives could produce disproportionate gains or losses.
o Any bonds held by the fund could be downgraded in credit rating or go into
default. Bond prices generally fall when interest rates rise.
The fund may trade securities actively, which could increase its transaction
costs (thus lowering performance) and increase your taxable dividends.
- --------------------------------------------------------------------------------
YOUR EXPENSES
[Clip Art] Transaction expenses are charged directly to your account. Operating
expenses are paid from the fund's assets, and therefore are paid by shareholders
indirectly. Because Class C shares are new, their expenses are based on Class B
expenses.
- -------------------------------------------------------------------------------------------
Shareholder transaction expenses Class A Class B Class C
- -------------------------------------------------------------------------------------------
Maximum sales charge (load) on purchases
as a % of purchase price 5.00% none none
Maximum deferred sales charge (load)
as a % of purchase or sale price, whichever is less none(1) 5.00% 1.00%
- -------------------------------------------------------------------------------------------
Annual operating expenses Class A Class B Class C
- -------------------------------------------------------------------------------------------
Management fee 0.80% 0.80% 0.80%
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 1.36% 1.36% 1.36%
Total fund operating expenses 2.46% 3.16% 3.16%
The hypothetical example below shows what your expenses would be if you invested
$10,000 over the time frames indicated, assuming you reinvested all
distributions and that the average annual return was 5%. The example is for
comparison only, and does not represent the fund's actual expenses and returns,
either past or future.
- -------------------------------------------------------------------------------------------
Expenses Year 1 Year 3 Year 5 Year 10
- -------------------------------------------------------------------------------------------
Class A $ 737 $ 1,228 $ 1,745 $ 3,156
Class B - with redemption $ 819 $ 1,274 $ 1,854 $ 3,306
- without redemption $ 319 $ 974 $ 1,654 $ 3,306
Class C - with redemption $ 419 $ 974 $ 1,654 $ 3,467
- without redemption $ 319 $ 974 $ 1,654 $ 3,467
FUND CODES
Class A
- -------------------------------
Ticker JHWPX
CUSIP 410233209
Newspaper PacBasA
SEC number 811-4932
Class B
- -------------------------------
Ticker FPBBX
CUSIP 410233506
Newspaper PacBasB
SEC number 811-4932
Class C
- -------------------------------
Ticker -
CUSIP 410233605
Newspaper -
SEC number 811-4932
(1) Except for investments of $1 million or more; see "How sales charges are
calculated."
15
<PAGE>
Your account
- --------------------------------------------------------------------------------
CHOOSING A SHARE CLASS
Each share class has its own cost structure, including a Rule 12b-1 plan that
allows it to pay fees for the sale, distribution and service of its shares. Your
financial representative can help you decide which share class is best for you.
- --------------------------------------------------------------------------------
Class A
- --------------------------------------------------------------------------------
o Front-end sales charges, as described at right.
o Distribution and service (12b-1) fees of 0.30%.
- --------------------------------------------------------------------------------
Class B
- --------------------------------------------------------------------------------
o No front-end sales charge; all your money goes to work for you right away.
o Distribution and service (12b-1) fees of 1.00%.
o A deferred sales charge, as described on following page.
o Automatic conversion to Class A shares after eight years, thus reducing future
annual expenses.
- --------------------------------------------------------------------------------
Class C
- --------------------------------------------------------------------------------
o No front-end sales charge; all your money goes to work for you right away.
o Distribution and service (12b-1) fees of 1.00%.
o A 1.00% contingent deferred sales charge on shares sold within one year of
purchase.
o No automatic conversion to Class A shares, so annual expenses continue at the
Class C level throughout the life of your investment.
For actual past expenses of each share class, see the fund-by-fund information
earlier in this prospectus.
Because 12b-1 fees are paid on an ongoing basis, they may cost shareholders more
than other types of sales charges.
Investors purchasing $1 million or more of Class B or Class C shares may want to
consider the lower operating expenses of Class A shares.
- --------------------------------------------------------------------------------
HOW SALES CHARGES ARE CALCULATED
Class A Sales charges are as follows:
- --------------------------------------------------------------------------------
Class A sales charges
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
CDSC on shares
Your investment 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 first 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.
16 YOUR ACCOUNT
<PAGE>
Class B and Class C Shares are offered at their net asset value per share,
without any initial sales charge. However, you may be charged a contingent
deferred sales charge (CDSC) on shares you sell within a certain time after you
bought them, as described in the tables 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 CDSCs are as follows:
- --------------------------------------------------------------------------------
Class B deferred charges
- --------------------------------------------------------------------------------
CDSC on shares
Years after purchase being sold
1st year 5.00%
2nd year 4.00%
3rd year 3.00%
4th year 3.00%
5th year 2.00%
6th year 1.00%
After 6th year none
- --------------------------------------------------------------------------------
Class C deferred charges
- --------------------------------------------------------------------------------
Years after purchase CDSC
1st year 1.00%
After 1st year none
For purposes of these CDSCs, 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. Retirement plans investing $1 million in Class B
shares may add that value to Class A purchases to calculate charges.
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, or consult the SAI (see the
back cover of this prospectus).
Group Investment Program A group may be treated as a single purchaser under the
accumulation and combination privileges. Each investor has an individual
account, but the group's investments are lumped together for sales charge
purposes, making the investors potentially eligible for reduced sales charges.
There is no charge, no obligation to invest (although initial investments must
total at least $250), and individual investors may close their accounts at any
time.
To utilize: contact your financial representative or Signature Services to find
out how to qualify, or consult the SAI (see the back cover of this prospectus).
CDSC waivers As long as Signature Services is notified at the time you sell, the
CDSC for each 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).
YOUR ACCOUNT 17
<PAGE>
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.
Waivers for certain investors Class A shares may be offered without front-end
sales charges or CDSCs to various individuals and institutions, including:
o selling brokers and their employees and sales representatives
o financial representatives utilizing fund shares in fee-based investment
products under signed 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 from an employee benefit plan into a John
Hancock fund
o certain insurance company contract holders (one-year CDSC usually applies)
o participants in certain retirement plans with at least 100 eligible employees
(one-year CDSC applies)
To utilize: if you think you may be eligible for a sales charge waiver, contact
Signature Services or consult the SAI (see the back cover of this prospectus).
- --------------------------------------------------------------------------------
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
o fee-based clients of selling brokers who placed at least $2 billion in John
Hancock funds: $250
3 Complete the appropriate parts of the account application, carefully following
the instructions. You must submit additional documentation when opening trust,
corporate or power of attorney accounts. You must notify your financial
representative or Signature Services if this information changes. For more
details, please contact your financial representative or call Signature
Services at 1-800-225-5291.
4 Complete the appropriate parts of the account privileges 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 and your
financial representative can initiate any purchase, exchange or sale of
shares.
18 YOUR ACCOUNT
<PAGE>
- --------------------------------------------------------------------------------
Buying shares
- --------------------------------------------------------------------------------------
Opening an account Adding to an account
By check
[Clip Art] o Make out a check for the o Make out a check for the
investment amount, payable investment amount payable
to "John Hancock Signature to "John Hancock Signature
Services, Inc." Services, Inc."
o Deliver the check and your o Fill out the detachable
completed application to your investment slip from an
financial representative, or account statement. If no
mail them to Signature Services slip is available, include
(address below). a note 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
[Clip Art] o Call your financial o Call your financial
representative or representative or
Signature Services to Signature Services to
request an exchange. request an exchange.
By wire
[Clip Art] o Deliver your completed o Instruct your bank to
application to your wire the amount of your
financial representative, investment to:
or mail it to Signature
Services. First Signature Bank & Trust
Account # 900000260
o Obtain your account number Routing # 211475000
by calling your financial
representative or Signature Specify the fund name, your
Services. share class, your account
number and the name(s) in
o Instruct your bank to wire which the account is registered.
the amount of your investment Your bank may charge a fee to
to: wire funds.
First Signature Bank & Trust
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
[Clip Art] 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" section
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, Suite 1000
Boston, MA 02217-1000
Phone Number: 1-800-225-5291
Or contact your financial representative for
instructions and assistance.
- -------------------------------------------------
To open or add to an account using the Monthly Automatic Accumulation Program,
see "Additional investor services."
YOUR ACCOUNT 19
<PAGE>
- --------------------------------------------------------------------------------
Selling shares
- --------------------------------------------------------------------------------
Designed for To sell some or all of your shares
By letter
[Clip Art] o Accounts of any type. o Write a letter of instruction
or complete a stock power
o Sales of any amount. 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
[Clip Art] o Most accounts. o For automated service 24
hours a day using your
o Sales of up to $100,000. touch-tone phone, call the
EASI-Line at 1-800-338-8080.
o To place your order, call your
financial representative or
Signature Services between 8 a.m.
and 4 p.m. Eastern Time on most
business days.
By wire or electronic funds transfer (EFT)
[Clip Art] o Requests by letter to sell o To verify that the telephone
any amount (accounts of any redemption privilege is in
type). place on an account, or to
request the form to add it
o Requests by phone to sell to an existing account, call
up to $100,000 (accounts Signature Services.
with telephone redemption
privileges). 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
[Clip Art] o Accounts of any type. o Obtain a current prospectus
for the fund into which you
o Sales of any amount. are exchanging by calling your
financial representative or
Signature Services.
o Call your financial representative
or Signature Services to request
an exchange.
20 YOUR ACCOUNT
<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, unless they were previously provided to Signature Services and are
still accurate. These items are 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 will need to obtain your signature guarantee from a member of the Signature
Guarantee Medallion Program. Most brokers and securities dealers are members of
this program. A notary public CANNOT provide a signature guarantee.
- ------------------------------------------------------------------------------------------------------------------------------------
Seller Requirements for written requests
- ------------------------------------------------------------------------------------------------------------------------------------
Owners of individual, joint, UGMA/UTMA (custodial accounts o Letter of instruction.
for minors).
o On the letter, the signatures of all persons
authorized to sign for the account, exactly
as the account is registered.
o Signature guarantee if applicable (see above).
Owners of corporate, sole proprietorship, general partner or o Letter of instruction.
association accounts.
o Corporate business/organization resolution,
certified within the past 12 months, or a
business/organization certification form.
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 Copy of the trust document certified within the past
12 months, or a trust certification form.
o Signature guarantee if applicable (see above).
Joint tenancy shareholders with rights of survivorship whose o Letter of instruction signed by surviving tenant.
co-tenants are deceased.
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, certified
within the past 12 months.
o Signature guarantee if applicable (see above).
Administrators, conservators, guardians and other sellers or o Call 1-800-225-5291 for instructions.
account types not listed above.
- -------------------------------------------------
Address:
John Hancock Signature Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
Phone Number: 1-800-225-5291
Or contact your financial representative for
instructions and assistance.
- -------------------------------------------------
To sell shares through a systematic withdrawal plan, see "Additional investor
services."
YOUR ACCOUNT 21
<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). The funds use market prices in
valuing portfolio securities, but may use fair-value estimates if reliable
market prices are unavailable. The fund may also value securities at fair value
if the value of these securities has been materially affected by events
occurring after the close of a foreign market. The funds may trade foreign stock
or other portfolio securities on U.S. holidays and weekends, even though the
funds' shares will not be priced on those days. This may change a fund's NAV on
days when you cannot buy or sell shares.
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 Signature Services receives your
request in good order.
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. 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 and Class
C 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.
- --------------------------------------------------------------------------------
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.
Dividends The funds generally distribute most or all of their net earnings
annually in the form of dividends. Most of these dividends are from capital
gains.
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.
22 YOUR ACCOUNT
<PAGE>
Taxability of dividends Dividends you receive from a fund, whether reinvested or
taken as cash, are generally considered taxable. Dividends from a fund's income
and short-term capital gains are taxable as ordinary income. Dividends from a
fund's long-term capital gains are taxable at a lower rate. Whether gains are
short-term or long-term depends on the fund's holding period. Some dividends
paid in January may be taxable as if they had been paid the previous December.
Dividends may include a return of capital.
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.
Year 2000 compliance The adviser and the funds' service providers are taking
steps to address any year 2000-related computer problems. However, there is some
risk that these problems could disrupt the issuers in which the funds invest,
the funds' operations or financial markets generally.
- --------------------------------------------------------------------------------
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 retirement plans,
including traditional, Roth and Education IRAs, SIMPLE plans, SEPs, 401(k) plans
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.
YOUR ACCOUNT 23
<PAGE>
Fund details
- --------------------------------------------------------------------------------
BUSINESS STRUCTURE
The diagram below shows the basic business structure used by the John Hancock
international/global funds. Each fund's board of trustees oversees the fund's
business activities and retains the services of the various firms that carry out
the fund's operations.
The trustees of the European Equity, Global Health Sciences and International
funds have the power to change these funds' respective investment goals without
shareholder approval.
Management fees The management fees paid to the investment adviser by the John
Hancock international/ global funds last fiscal year are as follows:
- --------------------------------------------------------------------------------
Fund % of net assets
- --------------------------------------------------------------------------------
European Equity 0.00%
Global 0.86%
Global Health Sciences 0.80%
Global Technology 0.79%
International 0.00%
Pacific Basin Equities 0.80%
------------
Shareholders
------------
--------------------------------------------
Financial services firms and
their representatives
Advise current and prospective share-
holders on their fund investments, often
in the context of an overall financial plan.
--------------------------------------------
Distribution and
shareholder services
------------------------------------------- -------------------------------------------------
Principal distributor Transfer agent
John Hancock Funds, Inc. John Hancock Signature Services, Inc.
Markets the funds and distributes shares Handles shareholder services, including record-
through selling brokers, financial planners keeping and statements, distribution of dividends
and other financial representatives. and processing of buy and sell requests.
------------------------------------------- -------------------------------------------------
- -----------------------------
Subadvisers ------------------------------- ------------------------------------
John Hancock Advisers Investment adviser Custodians
International Limited
32-36 Duke Street John Hancock Advisers, Inc. Investors Bank & Trust Co. Asset
St. James SWIY6DF 101 Huntington Avenue management
London, U.K. Boston, MA 02199-7603 State Street Bank and Trust Company
American Fund Advisors, Inc. Manages the funds' business and Hold the funds' assets, settle all
1415 Kellum Place investment activities. portfolio trades and collect most of
Garden City, NY 11530 the valuation data required for
------------------------------- calculating each fund's NAV.
Indocam Asia Advisers Limited
One Exchange Square ------------------------------------
Hong Kong
Indocam International
Investment Services ------------------------------
90 Boulevard Pasteur
Paris, France 75015 Trustees
Provide portfolio management Oversee the funds' activities.
to certain funds.
------------------------------
- ----------------------------
24 FUND DETAILS
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
These tables detail the performance of each fund's share classes, including
total return information showing how much an investment in the fund has
increased or decreased each year.
European Equity Fund
Figures audited by PricewaterhouseCoopers LLP.
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 10/98(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $10.00
Net investment income loss(2) 0.01
Net realized and unrealized gain (loss) on investments,
financial futures contracts and foreign currency transactions 0.06
Total from investment operations 0.07
Net asset value, end of period $10.07
Total investment return at net asset value(3)(%) 0.70(4)
Total adjusted investment return at net asset value(3,5)(%) (0.24)(4)
Ratios and supplemental data Net assets, end of period (000s omitted) ($) 12,147
Ratio of expenses to average net assets (%) 1.90(6)
Ratio of adjusted expenses to average net assets(7) (%) 3.31(6)
Ratio of net investment income (loss) to average net assets (%) 0.16(6)
Ratio of adjusted net investment income (loss) to average net assets(7) (%) (1.25)(6)
Portfolio turnover rate (%) 31
Fee reduction per share(2) ($) 0.10
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 10/98(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $11.07
Net investment income (loss)(2) (0.04)
Net realized and unrealized gain (loss) on investments,
financial futures contracts and foreign currency transactions (0.99)
Total from investment operations (1.03)
Net asset value, end of period $10.04
Total investment return at net asset value(3) (%) (9.30)(4)
Total adjusted investment return at net asset value(3,5) (%) (9.89)(4)
Ratios and supplemental data Net assets, end of period (000s omitted) ($) 15,847
Ratio of expenses to average net assets (%) 2.60(6)
Ratio of adjusted expenses to average net assets(7) (%) 4.01(6)
Ratio of net investment income (loss) to average net assets (%) (1.12)(6)
Ratio of adjusted net investment income (loss) to average net assets(7) (%) (2.53)(6)
Portfolio turnover rate (%) 31
Fee reduction per share(2) ($) 0.06
(1) Class A and Class B shares began operations on March 2, 1998 and June 1,
1998, 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) 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.
FUND DETAILS 25
<PAGE>
Global Fund
Figures audited by PricewaterhouseCoopers LLP.
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 10/94 10/95 10/96 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $14.30 $14.16 $12.67 $12.97 $12.94
Net investment income (loss)(1) (0.07) (0.03) (0.02) (0.05) (0.05)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 1.24 (0.13) 1.20 1.21 1.53
Total from investment operations 1.17 (0.16) 1.18 1.16 1.48
Less distributions:
Distributions from net realized gain on investments sold and
foreign currency transactions (1.31) (1.33) (0.88) (1.19) (0.96)
Net asset value, end of period $14.16 $12.67 $12.97 $12.94 $13.46
Total investment return at net asset value(2) (%) 8.64 (0.37) 9.87 9.36 11.88
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 100,973 93,597 94,746 92,127 120,775
Ratio of expenses to average net assets (%) 1.98 1.87 1.88 1.81(3) 1.82(3)
Ratio of net investment income (loss) to average net assets (%) (0.54) (0.23) (0.19) (0.36) (0.33)
Portfolio turnover rate (%) 61 60 98 81 160
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 10/94 10/95 10/96 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $14.17 $13.93 $12.36 $12.54 $12.39
Net investment income (loss)(1) (0.15) (0.11) (0.10) (0.14) (0.13)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 1.22 (0.13) 1.16 1.18 1.46
Total from investment operations 1.07 (0.24) 1.06 1.04 1.33
Less distributions:
Distributions from net realized gain on investments sold and
foreign currency transactions (1.31) (1.33) (0.88) (1.19) (0.96)
Net asset value, end of period $13.93 $12.36 $12.54 $12.39 $12.76
Total investment return at net asset value(2) (%) 7.97 (1.01) 9.10 8.67 11.15
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 31,822 24,570 27,599 28,007 55,229
Ratio of expenses to average net assets (%) 2.59 2.57 2.54 2.49(3) 2.46(3)
Ratio of net investment income (loss) to average net assets (%) (1.12) (0.89) (0.83) (1.04) (0.97)
Portfolio turnover rate (%) 61 60 98 81 160
(1) Based on the average of the shares outstanding at the end of each month.
(2) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(3) Expense ratios do not include interest expense due to bank loans, which
amounted to less than $0.01 per share.
26 FUND DETAILS
<PAGE>
Global Health Sciences Fund
Figures audited by PricewaterhouseCoopers LLP.
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 8/94 8/95 8/96 10/96(1) 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $13.38 $16.51 $21.61 $25.43 $25.11 $30.25
Net investment income (loss) (0.32) (0.36)(2) (0.19)(2) (0.05)(2) (0.19)(2) (0.23)(2)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 3.45 5.46 4.15 (0.27) 6.56 4.38
Total from investment operations 3.13 5.10 3.96 (0.32) 6.37 4.15
Less distributions:
Distributions from net realized gain on investments sold and
foreign currency transactions - - (0.14) - (1.23) (0.51)
Net asset value, end of period $16.51 $21.61 $25.43 $25.11 $30.25 $33.89
Total investment return at net asset value(3) (%) 23.39 30.89 18.39 (1.26)(4) 26.63 13.91
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 18,643 24,394 42,405 42,618 53,122 83,928
Ratio of expenses to average net assets (%) 2.55 2.56 1.80 1.92(5) 1.68 1.61
Ratio of net investment income (loss) to average net assets (%) (2.01) (1.99) (0.75) (1.04)(5) (0.71) (0.71)
Portfolio turnover rate (%) 52 38 68 24 57 39
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 8/94(6) 8/95 8/96 10/96(1) 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $17.29 $16.46 $21.35 $24.94 $24.60 $29.40
Net investment income (loss)(2) (0.17) (0.55) (0.34) (0.08) (0.37) (0.45)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions (0.66) 5.44 4.07 (0.26) 6.40 4.25
Total from investment operations (0.83) 4.89 3.73 (0.34) 6.03 3.80
Less distributions:
Distributions from net realized gain on investments sold and
foreign currency transactions - - (0.14) - (1.23) (0.51)
Net asset value, end of period $16.46 $21.35 $24.94 $24.60 $29.40 $32.69
Total investment return at net asset value(3) (%) (4.80)(4) 29.71 17.53 (1.36)(4) 25.76 13.11
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 1,071 6,333 36,591 37,521 53,436 123,880
Ratio of expenses to average net assets (%) 3.34(5) 3.45 2.42 2.62(5) 2.38 2.31
Ratio of net investment income (loss) to average net assets (%) (2.65)(5) (2.91) (1.33) (1.74)(5) (1.41) (1.41)
Portfolio turnover rate (%) 52 38 68 24 57 39
(1) Effective October 31, 1996, the fiscal year end changed from August 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) Annualized.
(6) Class B shares began operations on March 7, 1994.
FUND DETAILS 27
<PAGE>
Global Technology Fund
Figures audited by Ernst & Young LLP.
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 12/93 12/94 12/95 10/96(1) 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $14.94 $17.45 $17.84 $24.51 $25.79 $30.05
Net investment income (loss) (0.21) (0.22)(2) (0.22)(2,3) (0.14)(2) (0.27)(2) (0.28)(2)
Net realized and unrealized gain (loss) on
investments and options 4.92 1.87 8.53 1.42 5.76 1.09
Total from investment operations 4.71 1.65 8.31 1.28 5.49 0.81
Less distributions:
Distributions from net realized gain on investments sold
and options (2.20) (1.26) (1.64) - (1.23) (2.40)
Net asset value, end of period $17.45 $17.84 $24.51 $25.79 $30.05 $28.46
Total investment return at net asset value(4) (%) 32.06 9.62 46.53 5.22(5) 21.90 3.95
Total adjusted investment return at net asset value(4) (%) - - 46.41(6) - - -
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 41,749 52,193 155,001 166,010 184,048 186,259
Ratio of expenses to average net assets (%) 2.10 2.16 1.67(3) 1.57(7) 1.51 1.50
Ratio of net investment income (loss) to average net assets (%) (1.49) (1.25) (0.89)(3) (0.68)(7) (0.95) (0.97)
Portfolio turnover rate (%) 86 67 70 64 104 86
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 12/94(8) 12/95 10/96(1) 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $17.24 $17.68 $24.08 $25.20 $29.12
Net investment income (loss)(2) (0.35) (0.39)(3) (0.28) (0.45) (0.45)
Net realized and unrealized gain (loss) on investments and options 2.05 8.43 1.40 5.60 1.02
Total from investment operations 1.70 8.04 1.12 5.15 0.57
Less distributions:
Distributions from net realized gain on investments sold (1.26) (1.64) - (1.23) (2.40)
Net asset value, end of period $17.68 $24.08 $25.20 $29.12 $27.29
Total investment return at net asset value(4) (%) 10.02(5) 45.42 4.65(5) 21.04 3.20
Total adjusted investment return at net asset value(4) (%) - 45.30(6) - - -
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 9,324 35,754 50,949 65,851 77,999
Ratio of expenses to average net assets (%) 2.90(7) 2.41(3) 2.27(7) 2.21 2.20
Ratio of net investment income (loss) to average net assets (%) (1.98)(7) (1.62)(3) (1.38)(7) (1.65) (1.67)
Portfolio turnover rate (%) 67 70 64 104 86
(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) Reflects voluntary fee reductions and expense limitations in effect during
the year ended December 31, 1995, which amounted to $0.02 and $0.03 per share
for Class A and Class B shares, respectively. Absent such reductions the ratio
of expenses to average net assets would have been 1.79% and 2.53% for Class A
and Class B shares, respectively, and the ratio of net investment loss to
average net assets would have been (1.01%) and (1.74%) for Class A and Class B
shares, respectively.
(4) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(5) Not annualized.
(6) An estimated total return calculation which takes into consideration fees
and expenses waived or borne by the adviser during the periods shown.
(7) Annualized.
(8) Class B shares began operations on January 3, 1994.
28 FUND DETAILS
<PAGE>
International Fund
Figures audited by PricewaterhouseCoopers LLP.
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Class A - period ended: 10/94(1) 10/95 10/96 10/97 10/98
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Per share operating performance
Net asset value, beginning of period $8.50 $8.65 $8.14 $8.70 $8.41
Net investment income (loss) 0.07(2) 0.04 0.06(2) (0.02)(2) 0.00(2,3)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 0.08 (0.47) 0.50 (0.26) 0.47
Total from investment operations 0.15 (0.43) 0.56 (0.28) 0.47
Less distributions:
Dividends from net investment income - (0.03) - (0.01) -
Distributions from net realized gain on investments sold and
foreign currency transactions - (0.05) - - (0.07)
Total distributions - (0.08) - (0.01) (0.07)
Net asset value, end of period $8.65 $8.14 $8.70 $8.41 $8.81
Total investment return at net asset value(4) (%) 1.77(5) (4.96) 6.88 (3.22) 5.61
Total adjusted investment return at net asset value(4,6) (%) (0.52)(5) (8.12) 5.33 (4.52) 3.75
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 4,426 4,215 5,098 4,965 6,116
Ratio of expenses to average net assets (%) 1.50(7) 1.64 1.75 1.73(8) 1.79(8)
Ratio of adjusted expenses to average net assets(9) (%) 3.79(7) 4.80 3.30 3.03(8) 3.65(8)
Ratio of net investment income (loss) to average net assets (%) 1.02(7) 0.56 0.68 (0.16) 0.04
Ratio of adjusted net investment income (loss) to
average net assets(9) (%) (1.27)(7) (2.60) (0.87) (1.46) (1.82)
Portfolio turnover rate (%) 50 69 83 169 129
Fee reduction per share(2) ($) 0.16 0.25 0.14 0.12 0.17
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 10/94(1) 10/95 10/96 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $8.50 $8.61 $8.05 $8.55 $8.22
Net investment income (loss) 0.02(2) (0.03) 0.00(2,3) (0.08)(2) (0.06)(2)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 0.09 (0.48) 0.50 (0.25) 0.46
Total from investment operations 0.11 (0.51) 0.50 (0.33) 0.40
Less distributions:
Distributions from net realized gain on investments sold and
foreign currency transactions - (0.05) - - (0.07)
Net asset value, end of period $8.61 $8.05 $8.55 $8.22 $8.55
Total investment return at net asset value(4) (%) 1.29(5) (5.89) 6.21 (3.86) 4.88
Total adjusted investment return at net asset value(4,6) (%) (1.00)(5) (9.05) 4.66 (5.16) 3.02
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 3,948 3,990 8,175 8,713 9,720
Ratio of expenses to average net assets (%) 2.22(7) 2.52 2.45 2.43(8) 2.49(8)
Ratio of adjusted expenses to average net assets(9) (%) 4.51(7) 5.68 4.00 3.73(8) 4.35(8)
Ratio of net investment income (loss) to average net assets (%) 0.31(7) (0.37) 0.02 (0.88) (0.66)
Ratio of adjusted net investment income (loss) to
average net assets(9) (%) (1.98)(7) (3.53) (1.53) (2.18) (2.52)
Portfolio turnover rate (%) 50 69 83 169 129
Fee reduction per share(2) ($) 0.16 0.25 0.14 0.12 0.17
FUND DETAILS 29
<PAGE>
International Fund continued
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Class C - period ended: 10/98(1)
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $9.36
Net investment income (loss)(2) (0.03)
Net realized and unrealized gain (loss) on investments and foreign currency transactions (0.78)
Total from investment operations (0.81)
Net asset value, end of period $8.55
Total investment return at net asset value(4) (%) (8.65)(5)
Total adjusted investment return at net asset value (4,6) (%) (9.43)(5)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 23
Ratio of expenses to average net assets (%) 2.29(7,8)
Ratio of adjusted expenses to average net assets(9) (%) 4.15(7,8)
Ratio of net investment income (loss) to average net assets (%) (1.27)(7)
Ratio of adjusted net investment income (loss) to average net assets(9) (%) (3.13)(7)
Portfolio turnover rate (%) 129
Fee reduction per share(2) ($) 0.07
(1) Class A and Class B shares began operations on January 3, 1994. Class C
shares began operations on June 1, 1998.
(2) Based on the average of the shares outstanding at the end of each month.
(3) Less than $0.01 per share.
(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) Expense ratios do not include interest expense due to bank loans, which
amounted to less than $0.01 per share.
(9) Unreimbursed, without fee reduction.
30 FUND DETAILS
<PAGE>
Pacific Basin Equities Fund
Figures audited by PricewaterhouseCoopers LLP.
- ------------------------------------------------------------------------------------------------------------------------------------
Class A - period ended: 8/94 8/95 8/96 10/96(1) 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $13.27 $15.88 $14.11 $14.74 $14.47 $11.63
Net investment income (loss)(2) (0.10) 0.02(3) (0.02) (0.02) (0.07) 0.02
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 3.12 (1.24) 0.65 (0.25) (2.66) (2.89)
Total from investment operations 3.02 (1.22) 0.63 (0.27) (2.73) (2.87)
Less distributions:
Distributions from net realized gain on investments sold and
foreign currency transactions (0.41) (0.55) - - (0.11) -
Net asset value, end of period $15.88 $14.11 $14.74 $14.47 $11.63 $8.76
Total investment return at net asset value(4) (%) 22.82 (7.65) 4.47 (1.83)(5) (19.03) (24.68)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 50,261 37,417 41,951 38,694 21,109 14,717
Ratio of expenses to average net assets (%) 2.43 2.05 1.97 2.21(6) 2.06 2.46
Ratio of net investment income (loss) to average net assets (%) (0.66) 0.13(3) (0.15) (0.83)(6) (0.49) 0.22
Portfolio turnover rate (%) 68 48 73 15 118 230
- ------------------------------------------------------------------------------------------------------------------------------------
Class B - period ended: 8/94(7) 8/95 8/96 10/96(2) 10/97 10/98
- ------------------------------------------------------------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $15.11 $15.84 $13.96 $14.49 $14.20 $11.32
Net investment income (loss)(2) (0.09) (0.09) (0.13) (0.04) (0.18) (0.04)
Net realized and unrealized gain (loss) on investments and
foreign currency transactions 0.82 (1.24) 0.66 (0.25) (2.59) (2.81)
Total from investment operations 0.73 (1.33) 0.53 (0.29) (2.77) (2.85)
Less distributions:
Distributions from net realized gain on investments sold and
foreign currency transactions - (0.55) - - (0.11) -
Net asset value, end of period $15.84 $13.96 $14.49 $14.20 $11.32 $8.47
Total investment return at net asset value(4) (%) 4.83(5) (8.38) 3.80 (2.00)(5) (19.67) (25.18)
Ratios and supplemental data
Net assets, end of period (000s omitted) ($) 9,480 14,368 32,342 30,147 17,320 13,166
Ratio of expenses to average net assets (%) 3.00(6) 2.77 2.64 2.90(6) 2.76 3.16
Ratio of net investment income (loss) to average net assets (%) (1.40)(6) (0.66) (0.86) (1.52)(6) (1.19) (0.48)
Portfolio turnover rate (%) 68 48 73 15 118 230
</TABLE>
(1) Effective October 31, 1996, the fiscal year end changed from August 31 to
October 31.
(2) Based on the average of the shares outstanding at the end of each month.
(3) 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.
(4) Assumes dividend reinvestment and does not reflect the effect of sales
charges.
(5) Not annualized.
(6) Annualized.
(7) Class B shares began operations on March 7, 1994.
FUND DETAILS 31
<PAGE>
For more information
- --------------------------------------------------------------------------------
Two documents are available that offer further information on John Hancock
international/global funds:
Annual/Semiannual Report to Shareholders
Includes financial statements, a discussion of the market conditions and
investment strategies that significantly affected performance, as well as the
auditors' report (in annual report only).
Statement of Additional Information (SAI)
The SAI contains more detailed information on all aspects of the funds. The
current annual report is included in the SAI.
A current SAI has been filed with the Securities and Exchange Commission and is
incorporated by reference into (is legally a part of) this prospectus.
To request a free copy of the current annual/semiannual report or the SAI,
please contact John Hancock:
By mail:
John Hancock Signature
Services, Inc.
1 John Hancock Way, Suite 1000
Boston, MA 02217-1000
By phone: 1-800-225-5291
By EASI-Line: 1-800-338-8080
By TDD: 1-800-544-6713
On the Internet:
www.jhfunds.com
Or you may view or obtain these
documents from the SEC:
In person: at the SEC's Public
Reference Room in Washington, DC
By phone: 1-800-SEC-0330
By mail: Public Reference Section
Securities and Exchange Commission
Washington, DC 20549-6009
(duplicating fee required)
On the Internet: www.sec.gov
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A Global Investment Management Firm
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GLIPN 9/99
JOHN HANCOCK (R)
