<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 16, 1995
REGISTRATION NO. 33-10722
REGISTRATION NO. 811-4932
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
------------------------
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT NO. / /
POST-EFFECTIVE AMENDMENT NO. 16 /X/
AND/OR
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 16
(Check appropriate box or boxes)
------------------------
JOHN HANCOCK WORLD FUND
(Exact name of Registrant as Specified in Charter)
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
(Address of Principal Executive Officers)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (617) 375-1760
------------------------
THOMAS H. DROHAN, ESQ.
JOHN HANCOCK ADVISERS, INC.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
(Name and Address of Agent for Service)
Copy to:
JEFFREY N. CARP, ESQ.
HALE AND DORR
60 State Street
Boston, MA 02109
------------------------
IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX)
/ / IMMEDIATELY UPON FILING PURSUANT TO PARAGRAPH (B) OF RULE
485
/X/ ON MARCH 20, 1995 PURSUANT TO PARAGRAPH (B) OF RULE 485
/ / 60 DAYS AFTER FILING PURSUANT TO PARAGRAPH (A) OF RULE 485
/ / ON (DATE) PURSUANT TO PARAGRAPH (A) OF RULE (485 OR 486)
------------------------
PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY ACT OF 1940, REGISTRANT HAS
REGISTERED AN INDEFINITE NUMBER OF SECURITIES UNDER THE SECURITIES ACT OF 1933.
THE REGISTRANT FILED THE NOTICE REQUIRED BY RULE 24F-2 FOR ITS FISCAL YEAR ENDED
AUGUST 31, 1994 ON OR ABOUT OCTOBER 24, 1994.
================================================================================
<PAGE> 2
<TABLE>
CROSS REFERENCE SHEET
PURSUANT TO RULE 495(A) UNDER THE SECURITIES ACT OF 1933
<CAPTION>
ITEM NUMBER STATEMENT OF ADDITIONAL
FORM N-1A PART A PROSPECTUS CAPTION INFORMATION CAPTION
- ----------------- ------------------------------------------------ --------------------------
<C> <S> <C>
1 Front Cover Page *
2 Expense Information; The Fund's Expenses; Shares *
Prices; Additional Services and Programs
3 The Fund's Financial History Performance *
4 Investment Objectives and Policies; Organization *
and Management of the Fund
5 Organization and Management of the Fund; The *
Fund's Expenses
6 Organization and Management of Fund; *
Distribution and Taxes; How to Redeem Shares;
Additional Services and Programs
7 Who Can Buy Shares; How to Buy Shares; Shares *
Price; Additional Services and Programs
8 How to Redeem Shares *
9 Not Applicable *
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
ITEM NUMBER STATEMENT OF ADDITIONAL
FORM N-1A PART B PROSPECTUS CAPTION INFORMATION CAPTION
- ----------------- ------------------------------------------------ --------------------------
<C> <S> <C>
10 * Front Cover Page
11 * Table of Contents
12 * Organization of the Fund
13 * Investment Objective and
Policies; Investment
Restrictions
14 * Those Responsible for
Management
15 * Those Responsible for
Management
16 * Investment Advisory and
Other Services;
Distribution Contract;
Transfer Agent Services;
Custody of Portfolio;
Independent Auditors
17 * Brokerage Allocation
18 * Description of the Fund's
Shares
19 * Net Asset Value;
Additional Services and
Programs
20 * Tax Status
21 * Distribution Contract
22 * Calculation of Performance
23 * Financial Statements
</TABLE>
<PAGE> 4
JOHN HANCOCK
GLOBAL RETAIL FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
MARCH 20, 1995
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
Investment Objective and Policies..................................................... 4
Organization and Management of the Fund............................................... 7
Alternative Purchase Arrangements..................................................... 8
The Fund's Expenses................................................................... 10
Distributions and Taxes............................................................... 11
Performance........................................................................... 12
How to Buy Shares..................................................................... 14
Share Price........................................................................... 15
How to Redeem Shares.................................................................. 22
Additional Services and Programs...................................................... 24
</TABLE>
This Prospectus sets forth information about John Hancock Global Retail Fund
(the "Fund") a diversified series of John Hancock World Fund (the "Trust") that
you should know before investing. It should be read and retained for future
reference. The Fund is a series of John Hancock World Fund (the "Trust").
Additional information about the Fund has been filed with the Securities and
Exchange Commission (the "SEC"). You can obtain a copy of the Fund's Statement
of Additional Information, dated March 20, 1995, and incorporated by reference
into this Prospectus, free of charge by writing to or by telephoning: John
Hancock Investor Services Corporation, P.O. Box 9116, Boston, Massachusetts
02205-9116, or by telephone 1-800-225-5291 (1-800-225-6713 TDD).
SHARES OF THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, AND THE SHARES ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE> 5
EXPENSE INFORMATION
The purpose of the following information is to help you in understanding the
various costs and expenses that you will bear, directly or indirectly. Since the
Fund does not yet have an operating history, the costs and expenses included in
the table and hypothetical example below are based on estimated fees and
expenses for a full fiscal year and should not be considered as representative
of future expenses. Actual expenses may be greater or less than those shown.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum sales charge imposed on purchases (as percentage of offering price)..................... 5.00% None
Maximum sales charge imposed on reinvested dividends............................................ None None
Maximum deferred sales charge................................................................... None* 5.00%*
Redemption fee+................................................................................. None None
Exchange fee.................................................................................... None None
ANNUAL FUND OPERATING EXPENSES (as a percentage of average net assets)
Management fee (net of reimbursement)........................................................... 0.21% 0.21%
12b-1 fee**..................................................................................... 0.30% 1.00%
Transfer agent.................................................................................. 0.30% 0.32%
Other expenses.................................................................................. 0.69% 0.69%
------- -------
Total Fund operating expenses(a)................................................................ 1.50% 2.22%
======= =======
<FN>
* With respect to Class A shares, no sales charge is payable at the time of
purchase on investments of $1 million or more, but for these investments a
contingent deferred sales charge may be imposed, as described under the
caption "Share Price," in the event of certain redemption transactions
within one year of purchase. With respect to Class B shares, the deferred
sales charge on redemptions generally decreases each year following
purchase, as described under the caption "Share Price."
** The amount of the 12b-1 fee used to cover service expenses will be up to
0.25% of the Fund's average daily net assets, and the remaining portion will
be used to cover distribution expenses. See "The Fund's Expenses."
+ Redemption by wire fee (currently $4.00) not included.
(a) Estimated for the Fund based on expenses to have been incurred if the Class
A and Class B shares had been in existence for the entire fiscal year. Total
Fund operating expenses in the table reflect estimated expenses, net of the
Adviser's reimbursement or waiver of the management fee and other expenses
in excess of 0.90% of the Fund's average daily net assets. In the absence of
a reimbursement or waiver by the Adviser, the management fee would have been
0.80% for Class A and Class B shares and the estimated total Fund operating
expenses would have been 2.09% and 2.81% for Class A and Class B shares,
respectively.
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
<S> <C> <C>
You would pay the following expenses for the indicated period of years on a $1,000 investment,
assuming 5% annual return throughout the periods and reinvestment of all dividends:
Class A Shares................................................................................ $65 $95
Class B shares
--Assuming complete redemption at end of period............................................. $73 $99
--Assuming no redemption.................................................................... $23 $69
<FN>
(This example should not be considered a representation of past or future
expenses; actual expenses may be greater or less than those shown.)
</TABLE>
The Fund's payment of a distribution fee may result in a long-term shareholder
indirectly paying more than the economic equivalent of the maximum front-end
sales charge permitted under the National Association of Securities Dealers,
Inc. Rules of Fair Practice.
The management and 12b-1 fees referred to above are more fully explained in
this Prospectus under the caption "The Fund's Expenses" and in the Statement of
Additional Information under the captions "Investment Advisory and Other
Services" and "Distribution Contract."
2
<PAGE> 6
THE FUND'S FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
period indicated, investment returns, key ratios and supplemental data are
listed as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 29, 1994
(COMMENCEMENT OF
OPERATIONS) TO
JANUARY 31, 1995
(UNAUDITED)
------------------
<S> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period........................................ $ 8.50(d)
------
Net Investment Income....................................................... 0.03(b)
Net Realized and Unrealized Loss on Investments and Foreign Currency
Transactions.............................................................. (0.03)
------
Total from Investment Operations.......................................... 0.00
------
Less Distributions:
Dividends from Net Investment Income........................................ (0.03)
------
Net Asset Value, End of Period.............................................. $ 8.47
======
Total Investment Return at Net Asset Value................................ (2.31%)(c)
Total Adjusted Investment Return at Net Asset Value (a)................... (4.43%)(c)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)................................... $ 519
Ratio of Expenses to Average Net Assets**................................... 1.50%
Ratio of Adjusted Expenses to Average Net Assets(a)......................... 7.68%*
Ratio of Net Investment Income to Average Net Assets........................ 0.95%*
Ratio of Adjusted Net Investment Income to Average Net Assets(a)............ (5.23%)*
Portfolio Turnover Rate..................................................... 10%
**Expense Reimbursement Per Share........................................... $ 0.18(b)
<FN>
- ---------------
* On an annualized basis.
(a) On an unreimbursed basis.
(b) On average month end shares outstanding.
(c) Not annualized.
(d) Initial price to commence operations.
</TABLE>
3
<PAGE> 7
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is long-term capital appreciation. The Fund
will invest in a global portfolio consisting primarily of equity securities of
issuers engaged in retail sales of consumer products and services. There can be
no assurance that the Fund will achieve its investment objective.
- -------------------------------------------------------------------------------
THE INVESTMENT OBJECTIVE OF THE FUND IS
LONG-TERM CAPITAL APPRECIATION.
- -------------------------------------------------------------------------------
Under normal circumstances, at least 65% of the Fund's total assets will be
invested in the securities of foreign and domestic companies primarily engaged
in merchandising finished goods and services to consumers ("Retail Sales
Companies"). Retail Sales Companies may include general merchandise retailers,
food retailers, department stores, drug stores and specialty stores (including
apparel, automotive, home furnishings, toy and consumer electronics stores), as
well as firms engaged in selling goods and services through alternative
marketing methods such as direct telephone marketing, mail order and other
means. For purposes of this policy, a company will be deemed to be "primarily
engaged" in retail sales if at least 50% of its assets are committed to, or at
least 50% of its gross income or net profits is derived from, retail sales.
Because the Fund concentrates its investments in Retail Sales Companies, its
performance is closely tied to factors affecting consumer spending and the
various industries that are represented in the products and services sold, such
as food and agriculture, automotive, paper products, textile, pharmaceuticals
and electronics. Retail Sales Companies operate in a very competitive market. To
be successful, a Retail Sales Company must keep pace with consumer demographics
and rapidly changing consumer tastes and advertising trends. Retail sales
activity is particularly affected by changes in household disposable income and
consumer spending, which in turn are influenced by consumer confidence levels
and general economic conditions.
FOREIGN SECURITIES AND RISK CONSIDERATIONS. The Fund invests in common stocks
and in securities convertible into or with rights to purchase common stock of
corporations in which the Fund is permitted to invest. The Fund may also invest
in American Depository Receipts ("ADRs"), which are receipts typically issued by
an American bank or trust company representing underlying shares of foreign
issuers. Issuers of unsponsored ADRs are not required to disclose material
information in the United States and, therefore, there may not be a correlation
between this information and the market value of the ADR. Because the Fund has a
limited scope of investment through its concentration in the retail sales group
of industries, the Fund seeks investments without regard to geographical
borders. Normally, the Fund will invest in the securities markets of at least
three countries including the United States. A significant portion of the Fund's
investments are expected to be in countries with developing markets; and in
smaller capitalization, developing growth companies with relatively limited
operating histories as publicly traded companies. These investments may be made
without regard to a record of profits or dividends.
- -------------------------------------------------------------------------------
THE FUND INVESTS IN DOMESTIC AND FOREIGN
EQUITY SECURITIES.
- -------------------------------------------------------------------------------
Foreign companies may not be subject to accounting standards and government
supervision comparable to those applicable to U.S. companies and there is often
4
<PAGE> 8
less publicly available information about their operations. Foreign markets
generally provide less liquidity than U.S. markets (and thus potentially greater
price volatility), and typically provide fewer regulatory protections for
investors. Foreign securities can also be affected by political or financial
instability abroad. Security trading practices abroad may offer less protection
to investors such as the Fund. In addition, foreign securities may be
denominated in the currency of the country in which the issuer is located.
Consequently, changes in the foreign exchange rate will affect the value of the
Fund's shares and dividends. Additional costs could be incurred in connection
with the Fund's international investment activities. Foreign brokerage
commissions are generally higher than those of the U.S. Expenses may also be
incurred on currency exchanges when the Fund changes investments from one
country to another. Increased custodian costs as well as greater administrative
costs and difficulties because of the need to use foreign custodians may be
associated with the maintenance of assets in foreign jurisdictions.
These risks may be intensified in the case of investments in emerging markets or
countries with limited or developing capital markets. These countries are
located in the Asia-Pacific region, Eastern Europe, Latin and South America and
Africa. Security prices in these markets can be significantly more volatile than
in more developed countries, reflecting the greater uncertainties of investing
in less established markets and economies. Political, legal and economic
structures in many of these emerging market countries may be undergoing
significant evolution and rapid development, and they may lack the social,
political, legal and economic stability characteristic of more developed
countries. Emerging market countries may have failed in the past to recognize
private property rights. They may have relatively unstable governments, present
the risk of nationalization of businesses, restrictions on foreign ownership, or
prohibitions on repatriation of assets, and may have less protection of property
rights than more developed countries. Their economies may be predominately based
on only a few industries, may be highly vulnerable to changes in local or global
trade conditions, and may suffer from extreme and volatile debt burdens or
inflation rates. Local securities markets may trade a small number of securities
and may be unable to respond effectively to increases in trading volume,
potentially making prompt liquidation of substantial holdings difficult or
impossible at times. The Fund may be required to establish special custodial or
other arrangements before making certain investments in those countries.
Securities of issuers located in these countries may have limited marketability
and may be subject to more abrupt or erratic price movements.
FOREIGN CURRENCIES. Due to its investments in foreign securities, the Fund may
hold a portion of its assets in foreign currencies as a result, the Fund may
enter into forward foreign currency exchange contracts to protect against
changes in foreign currency exchange rates. A forward foreign currency exchange
contract involves an obligation to purchase or sell a specific currency at a
future date at a price set at the time of the contract. Although this hedging
strategy can minimize the risk of loss due to a decline in the value of the
hedged foreign currency, it may also limit any potential gain which might result
from an increase in the value of that currency.
5
<PAGE> 9
LENDING OF SECURITIES. The Fund may lend portfolio securities to brokers,
dealers, and financial institutions if the loan is collateralized by cash or
U.S. government securities according to applicable regulatory requirements. The
Fund may reinvest any cash collateral in short-term securities. When the Fund
lends portfolio securities, there is a risk that the borrower may fail to return
the loaned securities. As a result, the Fund may incur a loss or, in the event
of the borrower's bankruptcy, the Fund may be delayed in or prevented from
liquidating the collateral. It is a fundamental policy of the Fund not to lend
portfolio securities having a total value in excess of 33 1/3% of its total
assets.
RESTRICTED SECURITIES. The Fund may purchase restricted securities, including
those eligible for resale to "qualified institutional buyers" pursuant to Rule
144A under the Securities Act of 1933 (the "Securities Act"). The Trustees will
carefully monitor the Fund's investments in these securities, focusing on
certain factors, including valuation, liquidity and availability of information.
Purchases of other restricted securities are subject to an investment
restriction limiting all illiquid securities held by the Fund to not more than
15% of the Fund's net assets.
SHORT SALES. The Fund may engage in short sales "against the box," as well as
short sales to hedge against or for profit from an anticipated decline in the
value of a security. When the Fund engages in a short sale, it will place in a
segregated account and mark to market daily cash or U.S. government securities
according to applicable regulatory requirements. See the Statement of Additional
Information.
FUTURES CONTRACTS AND OPTIONS ON FUTURES. The Fund may buy and sell financial
futures contracts and options on futures to hedge against the effects of
fluctuations in securities prices, interest rates, currency exchange rates and
other market conditions and for speculative purposes. The potential loss
incurred by the Fund in writing options on futures is unlimited and may exceed
the amount of the premium received. The Fund's futures contracts and options on
futures will be traded on a U.S. or foreign commodity exchange or board of
trade. The Fund will not engage in a futures or options transaction for
speculative purposes, if immediately thereafter, the sum of initial margin
deposits on existing positions and premiums required to establish speculative
positions in futures contracts and options on futures would exceed 5% of the
Fund's total assets. The Fund intends to comply with the CFTC regulations with
respect to its speculative transactions. These regulations are discussed further
in the Statement of Additional Information.
The Fund may write listed and over-the-counter covered call options and covered
put options on debt and equity securities, securities indices and foreign
currency in order to earn income from the premiums received. The Fund may write
listed and over-the-counter covered call and put options on up to 100% of its
net assets. In addition, the Fund may purchase listed and over-the-counter call
and put options on securities, securities indices and currency. The SEC
considers over-the-counter options to be illiquid except under prescribed
conditions which are discussed in detail in the Statement of Additional
Information.
- -------------------------------------------------------------------------------
THE FUND MAY ENGAGE IN OPTIONS
TRANSACTIONS.
- -------------------------------------------------------------------------------
The Fund's ability to use futures contracts and options to hedge or increase
total return successfully will depend on the ability of John Hancock Advisers,
Inc. (the "Adviser") to predict accurately the future direction of securities
prices, interest
6
<PAGE> 10
rate changes, currency exchange rate fluctuations and other market factors.
There is no assurance that a liquid market for futures and options will always
exist. In addition, the Fund could be prevented from opening or realizing the
benefits of closing out a futures or options position because of position limits
or limits on daily price fluctuations imposed by an exchange.
REPURCHASE AGREEMENTS, FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES. The Fund
may enter into repurchase agreements and may purchase securities on a forward or
when-issued basis. In a repurchase agreement, the Fund buys a security subject
to the right and obligation to sell it back at a higher price. These
transactions must be fully collateralized at all times, but involve some credit
risk to the Fund if the other party defaults on its obligation to the Fund is
delayed or prevented from liquidating the collateral. The Fund will segregate in
a separate account cash or liquid, high grade debt securities equal in value to
its forward commitments and when-issued securities. Purchasing debt securities
for future delivery or on a when-issued basis may increase the Fund's overall
investment exposure and involves a risk of loss if the value of the securities
declines before the settlement date.
The Fund has adopted investment restrictions which are detailed in the Statement
of Additional Information where they are classified as fundamental or non-
fundamental. The Fund's investment objective and those investment retrictions
designated as fundamental may not be changed without shareholder approval. All
other investment policies and restrictions are non-fundamental and can be
changed by a vote of the Trustees without shareholder approval.
- -------------------------------------------------------------------------------
THE FUND FOLLOWS CERTAIN POLICIES, SOME OF
WHICH MAY HELP TO REDUCE INVESTMENT RISK.
- -------------------------------------------------------------------------------
When choosing brokerage firms to carry out the Fund's transactions, John Hancock
Advisers, Inc. (the "Adviser") gives primary consideration to execution at the
most favorable prices, taking into account the broker's professional ability and
quality of service. Consideration may also be given to the broker's sales of
Fund shares. Pursuant to procedures determined by the Trustees, the Adviser may
place securities transactions with brokers affiliated with the Adviser. These
brokers include Tucker Anthony Incorporated, John Hancock Distributors, Inc. and
Sutro & Company, Inc. They are indirectly owned by John Hancock Mutual Life
Insurance Company, which in turn indirectly owns the Adviser.
- -------------------------------------------------------------------------------
BROKERS ARE CHOSEN BASED ON BEST PRICE AND
EXECUTION.
- -------------------------------------------------------------------------------
The Fund's portfolio turnover rate is not expected to exceed 100%. A high rate
of portfolio turnover (such as 100%) involves a correspondingly greater
brokerage expense which will be borne by the Fund and may, under certain
circumstances, make it more difficult for the Fund to qualify as a regulated
investment company under the Code.
ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is organized as a separate, diversified portfolio of the Trust, an
open-end management investment company organized as a Massachusetts business
trust in 1986. The Trust has an unlimited number of authorized shares of
beneficial interest. The Trust's Declaration of Trust permits the Trustees, to
create and classify shares of beneficial interest into separate series of the
Fund without shareholder approval. As of the date of this Prospectus, the
Trustees have authorized shares of the Fund and two other series. Additional
series may be
- -------------------------------------------------------------------------------
THE TRUSTEES ELECT OFFICERS AND RETAIN THE
INVESTMENT ADVISER WHO IS RESPONSIBLE FOR
THE DAY-TO-DAY OPERATIONS OF THE FUND,
SUBJECT TO THE TRUSTEES' POLICIES AND
SUPERVISION.
- -------------------------------------------------------------------------------
7
<PAGE> 11
added in the future. The Trust's Declaration of Trust also permits the Trustees
to classify and reclassify any series or portfolio of shares into one or more
classes. Accordingly, the Trustees have authorized the issuance of two classes
of the Fund, designated as Class A shares and Class B shares. The shares of
each class represent an interest in the same portfolio of investments of the
Fund and have equal rights as to voting, redemption, dividends and liquidation.
However, each class of shares bears different distribution and transfer agent
fees, and Class A and Class B shareholders have exclusive voting rights with
respect to their distribution plans.
Shareholders have certain rights to remove Trustees. The Fund is not required
and does not intend to hold annual meetings of shareholders, although special
meetings may be held for such purposes as electing or removing Trustees,
changing fundamental investment restrictions and policies or approving a
management contract. The Fund, under certain circumstances, will assist in
shareholder communications with other shareholders.
The Adviser was organized in 1968 and is a wholly-owned indirect subsidiary of
the John Hancock Mutual Life Insurance Company, a financial services company.
The Adviser provides the Fund, and other investment companies in the John
Hancock group of funds, with investment research and portfolio management
services. John Hancock Funds, Inc. ("John Hancock Funds") distributes shares for
all of the John Hancock mutual funds through selected broker-dealers ("Selling
Brokers"). Certain of the Fund's officers are also officers of the Adviser and
John Hancock Funds. Pursuant to an order granted by the Securities and Exchange
Commission, the Fund has adopted a deferred compensation plan for its
independent Trustees which allows Trustees' fees to be invested by the Fund in
other John Hancock funds.
- -------------------------------------------------------------------------------
JOHN HANCOCK ADVISERS, INC. ADVISES
INVESTMENT COMPANIES HAVING TOTAL ASSETS
OF MORE THAN $13 BILLION.
- -------------------------------------------------------------------------------
Bernice S. Behar is portfolio manager of John Hancock Discovery Fund and a
member of the portfolio management team for three of John Hancock's
international funds: John Hancock Pacific Basin Equities Fund, John Hancock
Global Fund and John Hancock International Fund. Ms. Behar joined John Hancock
in 1991 after several years of investment research and portfolio management
experience with Sanyo Securities America in New York.
In order to avoid any conflict with portfolio trades for the Fund, the Adviser
and the Fund have adopted extensive restrictions on personal securities trading
by personnel of the Adviser and its affiliates. Some of these restrictions are:
pre-clearance for all personal trades and a ban on the purchase of initial
public offerings, as well as contributions to specified charities of profits on
securities held for less than 91 days. These restrictions are a continuation of
the basic principle that the interests of the Fund and its shareholders come
first.
ALTERNATIVE PURCHASE ARRANGEMENTS
You can purchase shares of the Fund at a price equal to their net asset value
per share plus a sales charge. At your election, this charge may be imposed
either at the time of the purchase (see "Initial Sales Charge Alternative,"
Class A shares) or on a contingent deferred basis (see "Contingent Deferred
Sales Charge
- -------------------------------------------------------------------------------
AN ALTERNATIVE PURCHASE PLAN ALLOWS YOU TO
CHOOSE THE METHOD OF PAYMENT THAT IS BEST
FOR YOU.
- -------------------------------------------------------------------------------
8
<PAGE> 12
Alternative," Class B shares). If you do not specify on your account
application which class of shares you are purchasing, it will be assumed that
you are investing in Class A shares.
CLASS A SHARES. If you elect to purchase Class A shares, you will incur an
initial sales charge unless the amount of your purchase is $1 million or more.
If you purchase $1 million or more of Class A shares, you will not be subject to
an initial sales charge, but you will incur a sales charge if you redeem your
shares within one year of purchase. Class A shares are subject to ongoing
distribution and service fees at a combined annual rate of up to 0.30% of the
Fund's average daily net assets attributable to the Class A shares. Certain
purchases of Class A shares qualify for reduced initial sales charges. See
"Share Price -- Qualifying for a Reduced Sales Charge."
- -------------------------------------------------------------------------------
INVESTMENTS IN CLASS A SHARES ARE SUBJECT
TO AN INITIAL SALES CHARGE.
- -------------------------------------------------------------------------------
CLASS B SHARES. You will not incur a sales charge when you purchase Class B
shares, but the shares are subject to a sales charge if you redeem them within
six years of purchase (the "contingent deferred sales charge" or the "CDSC").
Class B shares are subject to ongoing distribution and service fees at a
combined annual rate of up to 1.00% of the Fund's average daily net assets
attributable to the Class B shares. Investing in Class B shares permits all your
dollars to work from the time you make your investment, but the higher ongoing
distribution fee will cause the shares to have a higher expense ratio than that
of Class A shares. To the extent that any dividends are paid by the Fund, these
higher expenses will also result in lower dividends than those paid on Class A
shares.
- -------------------------------------------------------------------------------
INVESTMENTS IN CLASS B SHARES ARE SUBJECT
TO A CONTINGENT DEFERRED SALES CHARGE.
- -------------------------------------------------------------------------------
Class B shares are not available to full service defined contribution plans
administered by John Hancock Investor Services Corporation or John Hancock
Mutual Life Insurance Company with more than 100 eligible employees at the
inception of the Fund account.
FACTORS TO CONSIDER IN CHOOSING AN ALTERNATIVE
The alternative purchase arrangement allows you to choose the most beneficial
way to buy shares given the amount of your purchase, the length of time you
expect to hold your shares and other circumstances. You should consider whether,
during the anticipated life of your Fund investment, the CDSC and accumulated
fees on Class B shares would be less than the initial sales charge and
accumulated fees on Class A shares purchased at the same time; and to what
extent this differential would be offset by the Class A shares' lower expenses.
To help you make this determination, the table under the caption "Expense
Information" on the inside cover page of this Prospectus shows examples of the
charges applicable to each class of shares. Class A shares will normally be more
beneficial if you qualify for reduced sales charges. See "Share Price --
Qualifying for a Reduced Sales Charge."
- -------------------------------------------------------------------------------
YOU SHOULD CONSIDER WHICH CLASS OF SHARES
WILL BE MORE BENEFICIAL FOR YOU.
- -------------------------------------------------------------------------------
Class A shares are subject to lower distribution and service fees and,
accordingly, pay correspondingly higher dividends per share, to the extent any
dividends are paid. However, because initial sales charges are deducted at the
time of purchase, you would not have all of your funds invested initially and,
therefore, would initially
9
<PAGE> 13
own fewer shares. If you do not qualify for reduced initial sales charges and
expect to maintain your investment for an extended period of time, you might
consider purchasing Class A shares. This is because the accumulated distribution
and service charges on Class B shares may exceed the initial sales charge and
accumulated distribution and service charges on Class A shares during the life
of your investment.
Alternatively, you might determine that it would be more advantageous to
purchase Class B shares to have all of your funds invested initially. However,
you would be subject to higher distribution fees and, for a six-year period, a
CDSC.
In the case of Class A shares, the distribution expenses that John Hancock Funds
incurs in connection with the sale of the shares will be paid from the proceeds
of the initial sales charge and the ongoing distribution and service fees. In
the case of Class B shares, the expenses will be paid from the proceeds of the
ongoing distribution and service fees as well as the CDSC incurred upon
redemption within six years of purchase. The purpose and function of the Class B
shares' CDSC and ongoing distribution and service fees are the same as those of
the Class A shares' initial sales charge and ongoing distribution and service
fees. Sales personnel distributing the Fund's shares may receive different
compensation for selling each class of shares.
Dividends, if any, on Class A and Class B shares will be calculated in the same
manner, at the same time and on the same day and will be in the same amount,
except for differences resulting from the fact that each class will bear only
its own distribution and service fees, shareholder meeting expenses and any
incremental transfer agency costs. See "Dividends and Taxes."
THE FUND'S EXPENSES
For managing its investments and business affairs, the Fund pays a fee to the
Adviser which is based on a stated percentage of the Fund's average daily net
asset value as follows:
<TABLE>
<CAPTION>
NET ASSET VALUE ANNUAL RATE
- ---------------- -----------
<S> <C>
First $250,000,000 0.80%
Amount over $250,000,000 0.70%
</TABLE>
The investment management fee is higher than the fees paid to most mutual funds
but comparable to fees paid by those funds with investment objectives similar to
that of the Fund.
Under the terms of the investment management contract with the Fund, the Adviser
provides the Fund with office space, supplies and other facilities required for
the business of the Fund. The Adviser pays the compensation of all officers and
employees of the Fund, and pays the expenses of clerical services relating to
the administration of the Fund.
All expenses which are not specifically paid by the Adviser and which are
incurred in the operation of the Fund (including fees of Trustees of the Fund
who are not "interested persons," as such term is defined in the Investment
Company Act, but excluding certain distribution related activities required to
be paid by the Adviser or
10
<PAGE> 14
John Hancock Funds), and the continuous public offering of the shares of the
Fund are borne by the Fund. These expenses include the expenses of organizing
the Fund as well as expenses relating to the determination of the net asset
value of shares of the Fund, the expenses of the continuing registration and
qualification of its shares for sale, the charges of custodians, transfer
agents, and auditing and legal expenses.
From time to time, the Adviser may reduce its fee or make other arrangements to
limit the Fund's expenses to a specified percentage of average daily net assets.
The Adviser retains the right to reimpose a fee and recover any other payments
to the extent that, at the end of any fiscal year, the Fund's actual expenses
fall below this limit.
The Adviser has voluntarily agreed to limit Fund expenses, including the
management fee (but not including the transfer agent fee and the 12b-1 fee) to
0.90% of the Fund's average daily net assets. The Adviser reserves the right to
terminate this voluntary limitation in the future.
The Class A and Class B shareholders have adopted distribution plans (each a
"Plan") pursuant to Rule 12b-1 under the Investment Company Act of 1940 (the
"1940 Act"). Under these Plans, the Fund will pay distribution and service fees
at an aggregate annual rate of up to 0.30% of the Class A shares' average daily
net assets and an aggregate annual rate of up to 1.00% of the Class B shares'
average daily net assets. In each case, up to 0.25% is for service expenses and
the remaining amount is for distribution expenses. The distribution fees will be
used to reimburse John Hancock Funds for its distribution expenses, including
but not limited to: (i) initial and ongoing sales compensation to Selling
Brokers and others (including affiliates of John Hancock Funds) engaged in the
sale of Fund shares; (ii) marketing, promotional and overhead expenses incurred
in connection with the distribution of Fund shares; and (iii) with respect to
Class B shares only, interest expenses on unreimbursed distribution expenses.
The service fees will be used to compensate Selling Brokers for providing
personal and account maintenance services to shareholders. In the event John
Hancock Funds is not fully reimbursed for payments made or expenses incurred by
it under the Class A Plan, these expenses will not be carried beyond twelve
months from the date they were incurred. These unreimbursed expenses under the
Class B Plan will be carried forward together with interest on the balance of
these unreimbursed expenses.
- -------------------------------------------------------------------------------
THE FUND PAY DISTRIBUTION AND SERVICE FEES
FOR MARKETING AND SALES-RELATED
SHAREHOLDER SERVICING.
- -------------------------------------------------------------------------------
DIVIDENDS AND TAXES
DIVIDENDS. The Fund generally declares and distributes dividends representing
substantially all net investment income, if any, at least annually. The Fund may
also distribute net short-term or long-term capital gains annually, after the
close of the fiscal year.
Dividends are reinvested in additional shares of your class unless you elect the
option to receive them entirely in cash. If you elect the cash option and the
U.S. Postal Service cannot deliver your checks, your election will be converted
to the reinvestment option. Because of the higher expenses associated with Class
B
11
<PAGE> 15
shares, any dividends on these shares will be lower than those on Class A
shares. See "Share Price."
TAXATION. Dividends from the Fund's net investment income, certain net foreign
exchange gains and net short-term capital gains are taxable to you as ordinary
income, and dividends from the Fund's net long-term capital gains are taxable as
long-term capital gains. These dividends are taxable whether received in cash or
reinvested in them in additional shares. Certain dividends may be paid by the
Fund in January of a given year but they may be taxable as if you received them
the previous December. Corporate shareholders may be entitled to take the
corporate dividends received deduction for dividends received by the Fund from
U.S. domestic corporations, subject to certain restrictions under the Internal
Revenue Code. The Fund will send you a statement by January 31 showing the tax
status of the dividends you received for the prior year.
The Fund intends to qualify as a regulated investment company under Subchapter M
of the Internal Revenue Code of 1986, as amended (the "Code"). As a regulated
investment company, the Fund will not be subject to Federal income taxes on any
net investment income and net realized capital gains that are distributed to its
shareholders at least annually. When you redeem (sell) or exchange shares, you
may realize a gain or loss.
On the account application you must certify that the social security or other
tax payer identification number you provide is correct and that you are not
subject to back-up withholding of Federal income tax. If you do not provide this
information or are otherwise subject to this withholding, the Fund may be
required to withhold 31% of your dividends, redemptions and exchanges.
The Fund anticipates that it will be subject to foreign withholding or other
foreign taxes on certain of its foreign investments, which will reduce the yield
or return from these investments. However, if more than 50% of the Fund's total
assets at the close of its taxable year consists of stock or securities of
foreign corporations and if the Fund so elects, shareholders will include in
their gross incomes their pro rata shares of qualified foreign taxes paid by the
Fund and may be entitled, subject to certain conditions and limitations under
the Code, to claim a federal income tax credit or deduction for their share of
these taxes.
In addition to Federal taxes, you may be subject to state, local or foreign
taxes with respect to your investment in and distributions from the Fund. In
many states, a portion of the Fund's dividends that represents interest received
by the Fund on direct U.S. Government obligations may be exempt from tax. You
should consult your tax advisor for specific advice.
PERFORMANCE
Total return is based on the overall change in value of a hypothetical
investment in shares of the Fund. The Fund's total return shows the overall
dollar or percentage change in value, assuming the reinvestment of all
dividends. Cumulative total return shows the Fund's performance over a period of
time. Average annual total return shows the cumulative return divided over the
number of years included in
- -------------------------------------------------------------------------------
THE FUND MAY ADVERTISE ITS TOTAL RETURN.
- -------------------------------------------------------------------------------
12
<PAGE> 16
the period. Because average annual total return tends to smooth out variations
in the Fund's performance, you should recognize that it is not the same as
actual year-to-year results. Total return for Class A shares includes the
effect of paying the maximum sales charge (except as shown in "The Fund's
Financial Highlights"). Investments at lower sales charges would result in
higher performance figures. Total return for the Class B shares reflects
deduction of the applicable contingent deferred sales charge imposed on a
redemption of shares held for the applicable period. All calculations assume
that all dividends are reinvested at net asset value on the reinvestment
dates during the periods. The total return of Class A and Class B shares will
be calculated separately and, because each class is subject to certain
different expenses, the total return may differ with respect to each class
for the same period. The relative performance of the Class A and Class B shares
will be affected by a variety of factors, including the higher operating
expenses attributable to the Class B shares, whether the Fund's investment
performance is better in the earlier or later portions of the period measured
and the level of net assets of the classes during the period. The Fund will
include the total return of both classes in any advertisement or promotional
materials including Fund performance data. Total return is an historical
calculation and is not an indication of future performance. The value of the
Fund's shares, when redeemed, may be more or less than their original cost. See
"Factors to Consider in Choosing an Alternative."
13
<PAGE> 17
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
The minimum initial investment in Class A and Class B Shares is $1,000
($250 for group investments and $500 for retirement plans).
- -------------------------------------------------------------------------------
OPENING AN ACCOUNT.
- -------------------------------------------------------------------------------
Complete the Account Application attached to this Prospectus. Indicate
whether you are buying Class A or Class B Shares. If you do not specify which
class of shares you are purchasing, it will be assumed you are investing in
Class A shares.
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation ("Investor Services").
2. Deliver the completed application and check to your registered
representative or Selling Broker, or mail it directly to
Investor Services.
- ---------------------------------------------------------------------------------
BY WIRE 1. Obtain an account number by contacting your registered
representative, Selling Broker, or by calling 1-800-225-5291.
2. Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock Global Retail Fund
Class A or Class B shares
Your Account Number
Name(s) under which account is registered
3. Deliver the completed application to your registered
representative or Selling Broker, or mail it directly to
Investor Services.
- ---------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
BUYING ADDITIONAL SHARES.
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
MONTHLY 1. Complete the "Automatic Investing" and "Bank Information"
AUTOMATIC sections on the Account Privileges Application, designating a bank
ACCUMULATION account from which your funds may be drawn.
PROGRAM
(MAAP) 2. The amount you elect to invest will be automatically withdrawn
from your bank or credit union account.
BY TELEPHONE 1. Complete the "Invest-by-Phone" and "Bank Information" section
on the Account Privileges Application, designating a bank
account from which your funds may be drawn. Note that in order
to invest by phone, you must be in a bank or credit union that
is a member of the Automated Clearing House system (ACH).
2. After your authorization form has been processed, you may
purchase additional Class A or Class B shares by calling
Investor Services toll-free at 1-800-225-5291.
3. Give the Investor Services representative the names in which
your account is registered, the Fund name, the class of shares
you own, your account number and the amount you wish to invest.
4. Your investment normally will be credited to your account the
business day following your phone request.
- ---------------------------------------------------------------------------------
BY CHECK 1. Either complete the detachable stub included on your account
statement or include a note with your investment listing the
name of the Fund, the class, your account number and the
name(s) in which the account is registered.
2. Make your check payable to John Hancock Investor Services
Corporation.
3. Mail the account information and check to
John Hancock Investor Services Corporation
P.O. Box 9115
Boston, MA 02205-9115
or deliver it to your registered representative or Selling
Broker.
- ---------------------------------------------------------------------------------
</TABLE>
14
<PAGE> 18
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- --------------------------------------------------------------------------------
BUYING ADDITIONAL SHARES.
(CONTINUED)
- --------------------------------------------------------------------------------
BY WIRE Instruct your bank to wire funds to:
First Signature Bank & Trust
John Hancock Deposit Account No. 900000260
ABA Routing No. 211475000
For credit to: John Hancock Global Retail Fund
Class A or Class B shares
Your Account Number
Name(s) under which account is registered
</TABLE>
- --------------------------------------------------------------------------------
Other Requirements. All purchases must be made in U.S. dollars. Checks written
on foreign banks will delay purchases until U.S. funds are received, and a
collection charge may be imposed. Shares of the Fund are priced at the offering
price listed or the net asset value computed after John Hancock Funds receives
notification of the dollar equivalent from the custodian bank. Wire purchases
normally take two or more hours to complete and, to be accepted the same day,
must be received by 4:00 P.M., New York time. Your bank may charge a fee to
wire funds. Telephone transactions are recorded to verify information.
Certificates are not issued unless a request is made in writing to Investor
Services.
- --------------------------------------------------------------------------------
You will receive a statement of your account after any transaction that affects
your share balance or registration (statements related to reinvestment of
dividends and automatic investment/withdrawal plans will be sent to you
quarterly). A tax information statement will be mailed to you by January 31 of
each year.
- --------------------------------------------------------------------------------
YOU WILL RECEIVE ACCOUNT STATEMENTS WHICH
YOU SHOULD KEEP TO HELP WITH YOUR PERSONAL
RECORDKEEPING.
- --------------------------------------------------------------------------------
SHARE PRICE
The net asset value per share ("NAV") is the value of one share. The NAV is
calculated by dividing the net assets of each class by the number of outstanding
shares of that class. The NAV of each class can differ in value. Securities in
the Fund's portfolio are valued on the basis of market quotations, valuations
provided by independent pricing services or, at fair value as determined in good
faith in accordance with procedures approved by the Trustees. Short-term debt
investments maturing within 60 days are valued at amortized cost which
approximates market value. Foreign securities are valued on the basis of
quotations from the primary market in which they are traded, and are translated
from the local currency into U.S. dollars using current exchange rates. If
quotations are not readily available or, the value has been materially affected
by events occurring after the closing of a foreign market, assets are valued by
a method that the Trustees believes accurately reflects fair value. The NAV is
calculated once daily as of the close of regular trading on the New York Stock
Exchange (generally at 4:00 p.m., New York time) on each day that the Exchange
is open.
- --------------------------------------------------------------------------------
THE OFFERING PRICE OF YOUR SHARES IS THEIR
NET ASSET VALUE PLUS A SALES CHARGE, IF
APPLICABLE, WHICH WILL VARY WITH THE
PURCHASE ALTERNATIVE YOU CHOOSE.
- --------------------------------------------------------------------------------
Shares of the Fund are sold at the offering price based on the NAV computed
after your investment request is received in good order by John Hancock Funds.
If you buy shares of the Fund through a Selling Broker, the Selling Broker must
receive your investment before the close of regular trading on the New York
Stock Exchange and transmit it to John Hancock Funds before its close of
business to receive that day's offering price.
The Fund offers two classes of shares in this Prospectus. Class A shares, which
are subject to an initial sales charge and Class B shares which are subject to a
15
<PAGE> 19
contingent deferred sales charge. If you do not specify a particular class of
shares, it will be assumed that you are purchasing Class A shares and an initial
sales charge will be assessed.
INITIAL SALES CHARGE ALTERNATIVE -- CLASS A SHARES. The offering price you pay
for Class A shares of the Fund equals the NAV plus a sales charge paid at the
time of purchase, as follows:
<TABLE>
<CAPTION>
COMBINED
SALES CHARGE AS REALLOWANCE REALLOWANCE TO
SALES CHARGE AS A PERCENTAGE OF AND SERVICE FEE AS SELLING BROKER AS
AMOUNT INVESTED A PERCENTAGE OF THE AMOUNT A PERCENTAGE OF A PERCENTAGE OF
(INCLUDING SALES CHARGE) OFFERING PRICE INVESTED OFFERING PRICE(+) OFFERING PRICE(*)
- ------------------------ --------------- --------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.00% 5.26% 4.25% 4.01%
$50,000 to $99,999 4.50% 4.71% 3.75% 3.51%
$100,000 to $249,999 3.50% 3.63% 2.85% 2.61%
$250,000 to $499,999 2.50% 2.56% 2.10% 1.86%
$500,000 to $999,999 2.00% 2.04% 1.60% 1.36%
$1,000,000 and over 0.00%(**) 0.00%(**) (***) 0.00%(***)
<FN>
- ---------------
(*) Upon notice to Selling Brokers with whom it has sales agreements, John
Hancock Funds may reallow an amount up to the full applicable sales
charge. In addition to the reallowance allowed to all Selling Brokers,
John Hancock Funds will pay the following: round trip airfare to a resort
will be offered to each registered representative of a Selling Broker (if
the Selling Broker has agreed to participate) who sells certain amounts of
shares of John Hancock funds. John Hancock Funds will make these incentive
payments out of its own resources. Other than distribution fees, the Fund
does not bear distribution expenses. A Selling Broker to whom
substantially the entire sales charge is reallowed may be deemed to be an
underwriter under the Securities Act.
(**) No sales charge is payable at the time of purchase of Class A shares of $1
million or more, but a contingent deferred sales charge may be imposed in
the event of certain redemption transactions made within one year of
purchase.
(***) John Hancock Funds may pay a commission and first year's service fee (as
described in (+) below) to Selling Brokers who initiate and are
responsible for purchases of Class A shares of $1 million or more in the
aggregate as follows: 1% on sales to $4,999,999, 0.50% on the next $5
million and 0.25% on $10 million and over.
(+) At the time of sale, John Hancock Funds pays to Selling Brokers the first
year's service fee in advance in an amount equal to 0.25% of the net
assets invested in the Fund. Thereafter it pays the service fee
periodically in arrears in an amount up to 0.25% of the Fund's average
annual net assets. Selling Brokers receive the fee as compensation for
providing personal and account maintenance services to shareholders.
</TABLE>
Sales charges ARE NOT APPLIED to any dividends which are reinvested in
additional Class A shares of the Fund.
In addition, John Hancock Funds will pay certain affiliated Selling Brokers at
an annual rate of up to 0.05% of the daily net assets of the accounts
attributable to these brokers.
Under certain circumstances described below, investors in Class A shares may be
entitled to pay reduced sales charges. See "Qualifying for a Reduced Sales
Charge."
CONTINGENT DEFERRED SALES CHARGE -- INVESTMENTS OF $1 MILLION OR MORE IN CLASS A
SHARES. Purchases of $1 million or more of the Fund's Class A shares will be
made at net asset value with no initial sales charge, but if shares are redeemed
within 12 months after the end of the calendar month in which the purchase was
made (the contingent deferred sales charge period), a contingent deferred sales
16
<PAGE> 20
charge will be imposed. The rate of CDSC will depend on the amount invested, as
follows:
<TABLE>
<CAPTION>
AMOUNT INVESTED CDSC RATE
- --------------- ---------
<S> <C>
$1 million to $4,999,999 1.00%
Next $5 million to $9,999,999 0.50%
Amounts of $10 million and over 0.25%
</TABLE>
Existing full service clients of John Hancock Mutual Life Insurance Company who
were group annuity contract holders as of September 1, 1994, participant
directed defined contribution plans with at least 100 eligible employees at the
inception of the Fund account may purchase Class A shares with no initial sales
charge, but if the shares are redeemed within 12 months after the end of the
calendar year in which the purchase was made, a contingent deferred sales charge
will be imposed at the above rate.
The charge will be assessed on an amount equal to the lesser of the current
market value or the original purchase cost of the Class A shares redeemed.
Accordingly, no CDSC will be imposed on increases in account value above the
initial purchase price, including any dividends which have been reinvested in
additional shares.
In determining whether a CDSC is applicable to a redemption of Class A shares,
the calculation will be determined in a manner that results in the lowest
possible rate being charged. Therefore, it will be assumed that the redemption
is first made from any shares in the shareholder's account that are not subject
to the CDSC. The CDSC is waived on redemptions in certain circumstances. See
"Waiver of Contingent Deferred Sales Charge" below.
QUALIFYING FOR A REDUCED SALES CHARGE. If you invest more than $50,000 in Class
A shares of the Fund or combination of John Hancock funds (except money market
funds), you may qualify for a reduced sales charge on your investments in Class
A shares through a LETTER OF INTENTION. You may also be able to use the
ACCUMULATION PRIVILEGE and COMBINATION PRIVILEGE to take advantage of the value
of your previous investments in class shares of the John Hancock funds in
meeting the breakpoints for a reduced sales charge. For the ACCUMULATION
PRIVILEGE and COMBINATION PRIVILEGE the applicable sales charge will be based on
the total of:
- -------------------------------------------------------------------------------
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE
ON YOUR INVESTMENT IN CLASS A SHARES.
- -------------------------------------------------------------------------------
1. Your current purchase of Class A shares of the Fund;
2. The net asset value (at the close of business on the previous day) of (a) all
Class A shares of the Fund you hold, and (b) all Class A shares of any other
John Hancock mutual fund held; and
3. The net asset value of all shares held by another shareholder eligible to
combine his or her holdings with you into a single "purchase."
17
<PAGE> 21
EXAMPLE:
If you hold Class A shares of a John Hancock fund with a net asset value of
$20,000 and, subsequently, invested $30,000 in Class A shares of the Fund, the
sales charge on this subsequent investment would be 4.50% and not 5.00% (the
rate that would otherwise be applicable to investments of less than $50,000. See
"Initial Sales Charge Alternative -- Class A Shares").
- -------------------------------------------------------------------------------
CLASS A SHARES MAY BE AVAILABLE WITHOUT A
SALES CHARGE TO CERTAIN INDIVIDUALS AND
ORGANIZATIONS.
- -------------------------------------------------------------------------------
If you are in one of the following categories, you may purchase Class A shares
of the Fund without paying a sales charge:
- - A Trustee or officer of the Trust; a Director or officer of the Adviser and
its affiliates or Selling Brokers; employees or sales representatives of any
of the foregoing; retired officers, employees or Directors of any of the
foregoing; a member of the immediate family of any of the foregoing; or any
Fund, pension, profit sharing or other benefit plan for the individuals
described above.
- - Any state, county, city or any instrumentality, department, authority or
agency of these entities which is prohibited by applicable investment laws
from paying a sales charge or commission when it purchases shares of any
registered investment management company.*
- - A bank, trust company, credit union, savings institution or other depository
institution, its trust departments or common trust funds if it is purchasing
$1 million or more for non-discretionary customers or accounts.*
- - A broker, dealer or registered investment adviser that has entered into an
agreement with John Hancock Funds providing specifically for the use of Fund
shares in fee-based investment products made available to their clients.
- - A former participant in an employee benefit plan with John Hancock Mutual
Funds, when s/he withdraws from his/her plan and transfers any or all of
his/her plan distributions directly to the Fund.
- ---------------
* For investments made under these provisions, John Hancock Funds may make a
payment out of its own resources to the Selling Broker in an amount not to
exceed 0.25% of the amount invested.
Class A shares of the Fund may also be purchased without an initial sales charge
in connection with certain liquidation, merger or acquisition transactions
involving other investment companies or personal holding companies.
CONTINGENT DEFERRED SALES CHARGE ALTERNATIVE -- CLASS B SHARES. Class B shares
are offered at net asset value per share without an initial sales charge, so
that your initial investment will go to work at the time of purchase. However,
Class B shares redeemed within six years of purchase will be subject to a CDSC
at the rates set forth below. This charge will be assessed on an amount equal to
the lesser of the current market value or the original purchase cost of the
shares being redeemed. Accordingly, you will not be assessed a CDSC on increases
in account value above the initial purchase price, including shares derived from
dividend reinvestment.
18
<PAGE> 22
In determining whether a CDSC applies to a redemption, the calculation will be
determined in a manner that results in the lowest possible rate being charged.
It will be assumed that your redemption comes first from shares you have held
beyond the six-year CDSC redemption period or those you acquired through
dividend reinvestment, and next from the shares you have held the longest during
the six-year period. The CDSC is waived on redemptions in certain circumstances.
See the discussion "Waiver of Contingent Deferred Sales Charges" below.
EXAMPLE:
You have purchased 100 shares at $10 per share. The second year after your
purchase, your investment's net asset value per share has increased by $2 to
$12, and you have gained 10 additional shares through dividend reinvestment. If
you redeem 50 shares at this time, your CDSC will be calculated as follows:
<TABLE>
<S> <C>
- - Proceeds of 50 shares redeemed at $12 per share $ 600
- - Minus proceeds of 10 shares not subject to CDSC because they were
acquired through dividend reinvestment (10 X $12) -120
- - Minus appreciation on remaining shares, also not subject to CDSC (40 X
$2) -80
------
- - Amount subject to CDSC $ 400
======
</TABLE>
Proceeds from the CDSC are paid to John Hancock Funds. John Hancock Funds uses
all or part of them to defray its expenses related to providing the Fund with
distribution services in connection with the sale of Class B shares, such as
compensating Selling Brokers for selling these shares. The combination of the
CDSC and the distribution and service fees makes it possible for the Fund to
sell Class B shares without deducting a sales charge at the time of the
purchase.
The amount of the CDSC, if any, will vary depending on the number of years from
the time you purchase your Class B shares until the time you redeem them. Solely
for purposes of determining this holding period, any payments you make during
the month will be aggregated and deemed to have been made on the last day of the
month.
<TABLE>
<CAPTION>
CONTINGENT
DEFERRED SALES
CHARGE AS A
PERCENTAGE
YEAR IN WHICH CLASS B SHARES OF DOLLAR AMOUNT
REDEEMED FOLLOWING PURCHASE SUBJECT TO CDSC
- ---------------------------- ------------------
<S> <C>
First 5.0%
Second 4.0%
Third 3.0%
Fourth 3.0%
Fifth 2.0%
Sixth 1.0%
Seventh and thereafter None
</TABLE>
A commission equal to 3.75% of the amount invested and a first year's service
fee equal to 0.25% of the amount invested are paid to Selling Brokers. The
initial service fee is paid in advance at the time of sale for the provision of
personal and account maintenance services to shareholders during the twelve
months following the sale, and thereafter the service fee is paid in arrears.
19
<PAGE> 23
WAIVER OF CONTINGENT DEFERRED SALES CHARGE. The CDSC will be waived on
redemptions of Class B shares, and of Class A shares that are subject to a CDSC,
unless indicated otherwise, in the circumstances defined below:
- - Redemptions of Class B shares made under a Systematic Withdrawal Plan (see
"How To Redeem Shares"), as long as your annual redemptions do not exceed 10%
of your account value at the time you established your Systematic Withdrawal
Plan and 10% of the value of subsequent investments (less redemptions) in that
account at the time you notify Investor Services. This waiver does not apply
to Systematic Withdrawal Plan redemptions of Class A shares that are subject
to a CDSC.
- -------------------------------------------------------------------------------
UNDER CERTAIN CIRCUMSTANCES, THE CDSC ON
CLASS B AND CERTAIN CLASS A SHARE
REDEMPTIONS WILL BE WAIVED.
- -------------------------------------------------------------------------------
- - Redemptions made to effect distributions from an Individual Retirement Account
either before or after age 59 1/2, as long as the distributions are based on
your life expectancy or the joint-and-last survivor life expectancy of you and
your beneficiary. These distributions must be free from penalty under the
Code.
- - Redemptions made to effect mandatory distributions under the Code after age
70 1/2 from a tax-deferred retirement plan.
- - Redemptions made to effect distributions to participants or beneficiaries from
certain employer-sponsored retirement plans including those qualified under
Section 401(a) of the Code, custodial accounts under Section 403(b)(7) of the
Code and deferred compensation plans under Section 457 of the Code. The waiver
also applies to certain returns of excess contributions made to these plans.
In all cases, the distributions must be free from penalty under the Code.
- - Redemptions due to death or disability.
- - Redemptions made under the Reinvestment Privilege, as described in "Additional
Services and Programs" of this Prospectus.
- - Redemptions made pursuant to the Fund's right to liquidate your account if you
own fewer than 50 shares.
- - Redemptions made in connection with certain liquidation, merger or acquisition
transactions involving other investment companies or personal holding
companies.
- - Redemptions from certain IRA and retirement plans which purchased shares prior
to October 1, 1992.
If you qualify for a CDSC waiver under one of these situations, you must notify
Investor Services either directly or through your Selling Broker at the time you
make your redemption. The waiver will be granted once Investor Services has
confirmed that you are entitled to it.
CONVERSION OF CLASS B SHARES. Your Class B shares and an appropriate portion of
reinvested dividends on those shares will be converted into Class A shares
automatically at the end of the month eight years after the shares were
purchased, resulting in lower annual distribution fees. If you exchanged Class B
shares into this Fund from another John Hancock fund, the calculation will be
based on the
20
<PAGE> 24
time you purchased the shares in the original fund. The Fund has obtained a
ruling from the Internal Revenue Service to the effect that the automatic
conversion of Class B shares into Class A shares will be tax-free, the tax
holding period of the Class B shares will include the tax holding period of the
Class A shares converted into such Class B shares, and the tax basis of the
Class B shares will be the same as that of the Class A shares converted into
such Class B shares. There can be no assurance that such ruling will continue to
be in effect at the time any particular conversion occurs.
21
<PAGE> 25
HOW TO REDEEM SHARES
You may redeem all or a portion of your shares on any business day. Your shares
will be redeemed at the next NAV calculated after your redemption request is
received in good order by Investor Services, less any applicable CDSC. The Fund
may hold payment until reasonably satisfied that investments which were recently
made by check or Invest-by-Phone have been collected (which may take up to 10
calendar days).
- -------------------------------------------------------------------------------
TO ASSURE ACCEPTANCE OF YOUR REDEMPTION
REQUEST, PLEASE FOLLOW THESE PROCEDURES.
- -------------------------------------------------------------------------------
Once your shares are redeemed, the Fund generally sends you payment on the next
business day. When you redeem your shares, you may realize a taxable gain or
loss depending on the difference between what you paid for them and what you
receive for them, subject to certain tax rules. Under unusual circumstances, the
Fund may suspend redemptions or postpone payment for up to seven days or longer,
as permitted by Federal securities laws.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
BY TELEPHONE All Fund shareholders are automatically eligible for the
telephone redemption privilege. Call 1-800-225-5291, from
8:00 A.M. to 4:00 P.M. (New York time), Monday through
Friday, excluding days on which the New York Stock Exchange
is closed. Investor Services employs the following
procedures to confirm that instructions received by
telephone are genuine. Your name, the account number,
taxpayer identification number applicable to the account
and other relevant information may be requested. In
addition, telephone instructions are recorded.
You may redeem up to $100,000 by telephone, but the address
on the account must not have changed for the last 30 days.
A check will be mailed to the exact name(s) and address
shown on the account.
If reasonable procedures, such as those described above,
are not followed, the Fund may be liable for any loss due
to unauthorized or fraudulent telephone instructions. In
all other cases, neither the Fund nor Investor Services
will be liable for any loss or expense for acting upon
telephone instructions made in accordance with the
telephone transaction procedures mentioned above.
Telephone redemption is not available for IRAs or other
tax-qualified retirement plans or shares of the Fund that
are in certificate form.
During periods of extreme economic conditions or market
changes, telephone requests may be difficult to implement
due to a large volume of calls. During these times you
should consider placing redemption requests in writing or
using EASI-Line. EASI-Line's telephone number is 1-800-338-
8080.
- ---------------------------------------------------------------------------------
BY WIRE If you have a telephone redemption form on file with the
Fund, redemption proceeds of $1,000 or more can be wired on
the next business day to your designated bank account and a
fee (currently $4.00) will be deducted. You may also use
electronic funds transfer to your assigned bank account and
the funds are usually collectable after two business days.
Your bank may or may not charge for this service.
Redemptions of less than $1,000 will be sent by check or
electronic funds transfer.
This feature may be elected by completing the "Telephone
Redemption" section on the Account Privileges Application
attached to this Prospectus.
- ---------------------------------------------------------------------------------
IN WRITING Send a stock power or letter of instruction specifying the
name of the Fund, the dollar amount or the number of shares
to be redeemed, your name, class of shares, your account
number, and the additional requirements listed below that
apply to your particular account.
- ---------------------------------------------------------------------------------
</TABLE>
22
<PAGE> 26
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
TYPE OF REGISTRATION REQUIREMENTS
Individual, Joint Tenants, Sole A letter of instruction signed (with titles
Proprietorship, Custodial where applicable) by all persons authorized to
(Uniform Gifts or Transfer to sign for the account, exactly as it is
Minors Act), General Partners registered with the signature(s) guaranteed
Corporation, Association A letter of instruction and a corporate
resolution, signed by person(s) authorized to
act on the account with the signature(s)
guaranteed
Trusts A letter of instruction signed by the
Trustee(s) with the signature guarantees. (If
the Trustee's name is not registered on your
account, also provide a copy of the trust
document, certified within the last 60 days.)
If you do not fall into any of these registration categories, please call
1-800-225-5291 for further instructions.
- ---------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
WHO MAY GUARANTEE YOUR SIGNATURE.
- -------------------------------------------------------------------------------
A signature guarantee is a widely accepted way to protect you and the Fund by
verifying the signature on your request. It may not be provided by a notary
public. If the net asset value of the shares redeemed is $100,000 or less, John
Hancock Funds may guarantee the signature. The following institutions may
provide you with a signature guarantee, provided that any such institution meets
credit standards established by Investor Services: (i) a bank; (ii) a securities
broker or dealer, including a government or municipal securities broker or
dealer, that is a member of a clearing corporation or meets certain net capital
requirements; (iii) a credit union having authority to issue signature
guarantees; (iv) a savings and loan association, a building and loan
association, a cooperative bank, a federal savings bank or association; or (v) a
national securities exchange, a registered securities exchange or a clearing
agency.
- ---------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
ADDITIONAL INFORMATION ON REDEMPTIONS.
- -------------------------------------------------------------------------------
THROUGH YOUR BROKER. Your broker may be able to initiate the redemption.
Contact him or her for instructions. If you have certificates for your shares,
you must submit them with your stock power or a letter of instruction. Unless
you specify to the contrary, any outstanding Class A shares will be redeemed
before Class B shares. Redemptions of certificated shares may not be made by
telephone.
Due to the proportionately high cost of maintaining small accounts, the Fund
reserves the right to redeem at net asset value all shares in an account which
holds fewer than 50 shares (except accounts under retirement plans) and to mail
the proceeds to the shareholder or the transfer agent may impose an annual fee
of $10.00. No account will be involuntarily redeemed or any additional fee
imposed, if the value of the account is in excess of the Fund's minimum initial
investment. No CDSC will be imposed on involuntary redemptions of shares.
Shareholders will be notified before these redemptions are to be made or this
fee is imposed and will have 30 days to purchase additional shares to bring
their account balance up to the required minimum. Unless the number of shares
acquired by additional purchases and any dividend reinvestments, exceeds the
number of shares redeemed, repeated redemptions from a smaller account may
eventually trigger this policy.
- ---------------------------------------------------------------------------------
</TABLE>
23
<PAGE> 27
ADDITIONAL SERVICES AND PROGRAMS
EXCHANGE PRIVILEGE
If your investment objective changes, or if you wish to achieve further
diversification, John Hancock offers other funds with a wide range of investment
goals. Contact your registered representative or Selling Broker and request a
prospectus for the John Hancock funds that interest you. Read the prospectus
carefully before exchanging your shares. You can exchange shares of each class
of the Fund only for shares of the same class of another John Hancock fund. For
this purpose, John Hancock funds with only one class of shares will be treated
as Class A whether or not they have been so designated.
- -------------------------------------------------------------------------------
YOU MAY EXCHANGE SHARES OF THE FUND ONLY
FOR SHARES OF THE SAME CLASS IN ANOTHER
JOHN HANCOCK FUND.
- -------------------------------------------------------------------------------
Exchanges between funds with shares which are not subject to a CDSC are based on
their respective net asset values. No sales charge or transaction charge is
imposed. Class B shares of the Fund which are subject to a CDSC may be exchanged
for Class B shares of another John Hancock fund without incurring the CDSC;
however the shares will be subject to the CDSC schedule of the shares acquired
(except shares exchanged into John Hancock Short-Term Strategic Income Fund and
John Hancock Limited Term Government Fund which will be subject to the initial
fund's CDSC). For purposes of computing the CDSC payable upon redemption of
shares acquired in an exchange, the holding period of the original shares is
added to the holding period of the shares acquired in an exchange. However, if
you exchange Class B shares purchased prior to January 1, 1994 for Class B
shares of any other John Hancock fund, you will be subject to the CDSC schedule
that was in effect at your initial purchase date.
You may exchange Class B shares of any John Hancock fund into John Hancock Cash
Management Fund at net asset value. However, you will continue to be subject to
a CDSC upon redemption. The rate of the CDSC will be the rate in effect on the
original fund at the time of the exchange.
The Fund reserves the right to require you to keep previously exchanged shares
(and reinvested dividends) in the Fund for 90 days before you are permitted to
execute a new exchange. The Fund may also terminate or alter the terms of the
exchange privilege upon 60 days' notice to shareholders.
An exchange of shares is treated as a redemption of shares of one fund and the
purchase of shares in another for Federal income tax purposes. An exchange may
result in a taxable gain or loss.
When you make an exchange your account registration in both the existing and new
account must be identical. The exchange privilege is available only in states
where the exchange can be made legally.
Under exchange agreements with John Hancock Funds, certain dealers, brokers and
investment advisers may exchange their clients' Fund shares, subject to the
terms of those agreements and John Hancock Funds' right to reject or suspend
those exchanges at any time. Because of the restrictions and procedures under
those agreements, the exchanges may be subject to timing limitations and other
restrictions that do not apply to exchanges requested by shareholders directly,
as described above.
24
<PAGE> 28
Because Fund performance and shareholders can be hurt by excessive trading, the
Fund reserves the right to terminate the exchange privilege for any person or
group that, in John Hancock Funds' judgment, is involved in a pattern of
exchanges that coincide with a "market timing" strategy that may disrupt the
Fund's ability to invest effectively according to its investment objective and
policies, or might otherwise affect the Fund and its shareholders adversely. The
Fund may also temporarily or permanently terminate the exchange privilege for
any person who makes seven or more exchanges out of the Fund per calendar year.
Accounts under common control or ownership will be aggregated for this purpose.
Although the Fund will attempt to give you prior notice whenever it is
reasonably able to do so, it may impose these restrictions at any time.
BY TELEPHONE
1. When you fill out the application for your purchase of Fund shares, you
automatically authorize exchanges by telephone unless you check the box
indicating that you do not wish to authorize telephone exchanges.
2. Call 1-800-225-5291. Have the account number of your current fund and the
exact name in which it is registered available to give to the telephone
representative.
3. Investors Services employs the following procedures to confirm that
instructions received by telephone are genuine. Your name, the account
number, taxpayer identification number applicable to the account and other
relevant information may be requested. In addition, telephone instructions
are recorded.
IN WRITING
1. In a letter request an exchange and list the following:
--the name and class of the fund whose shares you currently own
--your account number
--the name(s) in which the account is registered
--the name of the fund in which you wish your exchange to be invested
--the number of shares, all shares or the dollar amount you
wish to exchange
Sign your request exactly as the account is registered.
2. Mail the request and information to:
John Hancock Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
25
<PAGE> 29
REINVESTMENT PRIVILEGE
1. You will not be subject to a sales charge on Class A shares that you reinvest
in any John Hancock fund that is otherwise subject to a sales charge, as long
as you reinvest within 120 days of the redemption date. If you paid a CDSC
upon a redemption, you may reinvest at net asset value in the same class of
shares from which you redeemed within 120 days. Your account will be credited
with the amount of the CDSC previously charged and the reinvested shares will
continue to be subject to a CDSC. For purposes of computing the CDSC payable
upon a subsequent redemption, the holding period of the shares you acquired
through reinvestment will include the holding period of the redeemed shares.
- -------------------------------------------------------------------------------
IF YOU REDEEM SHARES OF THE FUND, YOU MAY
BE ABLE TO REINVEST THE PROCEEDS IN SHARES
OF THIS FUND OR ANOTHER JOHN HANCOCK FUND
WITHOUT PAYING AN ADDITIONAL SALES CHARGE.
- -------------------------------------------------------------------------------
2. Any portion of your redemption may be reinvested in the Fund or in any of the
other John Hancock funds, subject to the minimum investment limit of that
fund.
3. To reinvest, you must notify Investor Services in writing. Include the
Fund(s) name, account number and class from which your shares were originally
redeemed.
SYSTEMATIC WITHDRAWAL PLAN
1. You may elect the Systematic Withdrawal Plan at any time by completing the
attached Account Privileges Application which is attached to this Prospectus.
You can also obtain the application by calling your registered repre-
sentative or by calling 1-800-225-5291.
2. To be eligible, you must have at least $5,000 in your account.
3. Payments from your account can be made monthly, quarterly, semi-annually
or on a selected monthly basis to yourself or any other designated payee.
4. There is no limit on the number of payments you may authorize, but all
payments
must be made at the same time or intervals.
- -------------------------------------------------------------------------------
YOU CAN PAY ROUTINE BILLS FROM YOUR
ACCOUNT, OR MAKE PERIODIC DISBURSEMENTS
FROM YOUR RETIREMENT ACCOUNTS TO COMPLY
WITH IRS REGULATIONS.
- -------------------------------------------------------------------------------
5. It is not advantageous to maintain a Systematic Withdrawal Plan concurrently
with purchases of additional shares, because you may be subject to an initial
sales charge on your purchases of Class A shares or to a CDSC imposed on your
redemptions of Class B shares. In addition, your redemptions are taxable
events.
6. Redemptions will be discontinued if the U.S. Postal Service cannot deliver
your checks, or if deposits to a bank account are returned for any reason.
MONTHLY AUTOMATIC ACCUMULATION PROGRAM (MAAP)
1. You may authorize an investment to be drawn automatically each month from
your bank for investment under the "Automatic Investing" and "Bank
Information" sections of the Account Privileges Application.
- -------------------------------------------------------------------------------
YOU CAN MAKE AUTOMATIC INVESTMENTS AND
SIMPLIFY YOUR INVESTING.
- -------------------------------------------------------------------------------
2. You may also authorize automatic investing through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.
26
<PAGE> 30
3. You may terminate your Monthly Automatic Accumulation Program at any time.
4. There is no charge to you for this program, and there is no cost to the Fund.
5. If you have payments withdrawn from a bank account and we are notified that
the account has been closed, your withdrawals will be discontinued.
GROUP INVESTMENT PROGRAM
1. An individual account will be established for each participant, but the sales
charge for Class A shares will be based on the aggregate dollar amount of all
participants' investments. To determine how to qualify for this program,
contact your registered representative or call 1-800-225-5291.
- -------------------------------------------------------------------------------
ORGANIZED GROUPS OF AT LEAST FOUR PERSONS
MAY ESTABLISH ACCOUNTS.
- -------------------------------------------------------------------------------
2. The initial aggregate investment of all participants in the group must be at
least $250.
3. There is no additional charge for this program. There is no obligation to
make investments beyond the minimum, and you may terminate the program at any
time.
RETIREMENT PLANS
1. You may use the Fund as a funding medium for various types of qualified
retirement plans, including Individual Retirement Accounts, Keogh Plans
(H.R.10), Pension and Profit-Sharing Plans (including 401(k) Plans), Tax
Sheltered Annuity Retirement Plans (403(b) or TSA Plans), and 457 Plans.
2. The initial investment minimum or aggregate minimum for any of these plans is
$500. However, accounts being established as group IRA, SEP, SARSEP, TSA,
401(k) and 457 Plans will be accepted without an initial minimum investment.
27
<PAGE> 31
JOHN HANCOCK
GLOBAL RETAIL FUND JOHN HANCOCK
GLOBAL RETAIL
FUND
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR PROSPECTUS
MARCH 20, 1995
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603 THE INVESTMENT OBJECTIVE
OF THE
FUND IS LONG-TERM
CAPITAL
APPRECIATION.
CUSTODIAN
State Street Bank and Trust
Company
225 Franklin Street
Boston, Massachusetts 02110
TRANSFER AGENT
John Hancock Investor Services
Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
INDEPENDENT ACCOUNTANTS
Price Waterhouse LLP
160 Federal Street
Boston, Massachusetts 02110
HOW TO OBTAIN INFORMATION
ABOUT THE FUND
For Service Information 101 HUNTINGTON AVENUE
For Telephone Exchange BOSTON, MASSACHUSETTS 02199-7603
TELEPHONE 1-800-225-5291
call 1-800-225-5291
For Investment-by-Phone
For Telephone Redemption
For TDD call 1-800-225-6713
JHD-3000P 3/95 (LOGO)PRINTED ON RECYCLED PAPER
<PAGE> 32
JOHN HANCOCK GLOBAL RETAIL FUND
CLASS A AND CLASS B SHARES
STATEMENT OF
ADDITIONAL INFORMATION
MARCH 20, 1995
This Statement of Additional Information provides information about John Hancock
Global Retail Fund (the "Fund"), a series of John Hancock World Fund (the
"Trust"), in addition to the information that is contained in the Fund's Class A
and Class B Shares Prospectus (the "Prospectus"), dated March 20, 1995.
This Statement of Additional Information is not a prospectus. It should be read
in conjunction with the Fund's Prospectus, a copy of which can be obtained free
of charge by writing or telephoning:
John Hancock Investors Services Corporation
P.O. Box 9116
Boston, Massachusetts 02199-9116
1-(800)-225-5291
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Statement of
Additional
Information
Page
<S> <C>
Organization of the Fund 2
Investment Objective And Policies 2
Investment Restrictions 11
Those Responsible for Management 15
Investment Advisory And Other Services 20
Distribution Contract 22
Net Asset Value 23
Initial Sales Charge on Class A Shares 24
Deferred Sales Charge on Class B Shares 25
Special Redemptions 26
Additional Services And Programs 26
Description of The Fund's Shares 28
</TABLE>
<PAGE> 33
<TABLE>
<S> <C>
Tax Status 29
Calculation of Performance 33
Brokerage Allocation 34
Transfer Agent Services 35
Custody of Portfolio 36
Independent Auditors 36
Financial Statements --
</TABLE>
ORGANIZATION OF THE FUND
John Hancock Global Retail Fund (the "Fund") is organized as a separate
diversified portfolio of John Hancock World Fund (the "Trust"), an open-end
investment management company organized in August 1986 by John Hancock Advisers,
Inc. (the "Adviser"), as a Massachusetts business trust under the laws of The
Commonwealth of Massachusetts. Prior to January 1, 1991, when the Trust changed
its name, the Trust was known as John Hancock World Trust. The Trust currently
consists of three separate series: the Fund, John Hancock Pacific Basin Equities
Fund and John Hancock Global Rx Fund. The Fund was established in 1988. The
Adviser is an indirect wholly-owned subsidiary of John Hancock Mutual Life
Insurance Company (the "Life Insurance Company"), a Massachusetts life insurance
company chartered in 1862, with national headquarters at John Hancock Place,
Boston, Massachusetts.
INVESTMENT OBJECTIVE AND POLICIES
The investment objective of the Fund is long-term capital appreciation. The Fund
will invest in a global portfolio consisting primarily equity securities of
issuers engaged in retail sales of consumer products and services. There can be
no assurance that the Fund will achieve its investment objective. The types of
securities in which the Fund invests are listed in the Prospectus. See
"Investment Objective and Policies" in the Fund's Prospectus.
Characteristics and Risks of Foreign Securities Markets. The securities markets
of many countries have in the past moved relatively independently of one
another, due to differing economic, financial, political and social factors.
When markets in fact move in different directions and offset each other, there
may be a corresponding reduction in risk for the Fund's portfolio as a whole.
This lack of correlation among the movements of the world's securities markets
may also affect unrealized gains the Fund has derived from movements in any one
market.
If the securities of markets moving in different directions are combined into a
single portfolio, such as that of the Fund, total portfolio volatility maybe
reduced. Since the Fund will invest in securities denominated in currencies
other than U.S. dollars, changes in foreign currency exchange rates will affect
the value of its portfolio securities. Currency exchange rates may not move in
the same direction as the securities markets in a particular country. As a
result, market gains may be offset by unfavorable exchange rate fluctuations.
Investments in foreign securities may involve risks and considerations not
present in domestic investments. Since foreign securities generally may be
denominated and pay interest or dividends
2
<PAGE> 34
Investments in foreign currencies, the value of the assets of the Fund as
measured in U.S. dollars will be affected favorably or unfavorably by changes in
the relationship of the U.S. dollar and other currency rates. The Fund may incur
costs in connection with the conversion of foreign currencies into U.S. dollars
and may be adversely affected by restrictions on the conversion or transfer of
foreign currencies. In addition, there may be less publicly available
information about foreign companies than U.S. companies. Foreign companies may
not be subject to accounting, auditing, and financial reporting standards,
practices and requirements comparable to those applicable to U.S. companies.
Foreign securities markets, while growing in volume, have for the most part
substantially less volume than U.S. securities markets and securities of foreign
companies are generally less liquid and at times their prices may be more
volatile than securities of comparable U.S. companies. Foreign stock exchanges,
brokers and listed companies are generally subject to less government
supervision and regulation than those in the U.S. The customary settlement time
for foreign securities may be longer than the five (5) day customary settlement
time for U.S. securities, or less frequent than in the U.S., which could affect
the liquidity of the Fund's investments. The Adviser will monitor the settlement
time for foreign securities and take undue settlement delays into account in
considering the desirability of allocating investments among specific countries.
The Fund may invest in companies located in developing countries which, compared
to the U.S. and other developed countries, may have relatively unstable
governments, economies based on only a few industries and securities markets
which trade only a small number and volume of securities. Prices on exchanges
located in developing countries tend to be volatile and, in the past, securities
traded on those exchanges have offered a greater potential for gain (and loss)
than securities traded on exchanges in the U.S. and more developed countries.
In some countries, there is the possibility of expropriation or confiscatory
taxation, seizure or nationalization of foreign bank deposits or other assets,
establishment of exchange controls, the adoption of foreign government
restrictions or other adverse political, social or diplomatic developments that
could affect investments in these countries.
Forward Foreign Currency Transactions. The foreign currency transactions of the
Fund may be conducted on a spot (i.e., cash) basis at the spot rate for
purchasing or selling currency prevailing in the foreign exchange market. The
Fund may also deal in forward foreign currency contracts involving currencies of
the different countries in which it will invest as a hedge against possible
variations in the foreign exchange rate between these currencies. This is
accomplished through contractual agreements to purchase or sell a specified
currency at a specified future date and price set at the time of the contract.
The Fund's dealings in forward foreign currency contracts will be limited to
hedging either specific transactions or portfolio positions. The Fund will not
attempt to hedge all of its foreign portfolio positions. The Fund will not
engage in speculative forward currency transactions.
3
<PAGE> 35
If the Fund enters into a forward contract to purchase foreign currency, its
custodian bank will segregate cash, U.S. government securities, or high-grade
liquid debt securities (i.e., securities rated in one of the top three rating
categories by Moody's Investors Services, Inc. ("Moody's") or Standard & Poor's
Rating's Group ("S & P") in a separate account of the Fund in an amount equal to
the value of the Fund's total assets committed to the consummation of such
forward contract. Those assets will be valued at market daily and if the value
of the assets in the separate account declines, additional cash or liquid assets
will be placed in the account so that the value of the account will equal the
amount of the Fund's commitment with respect to such contracts.
Hedging against a decline in the value of a currency does not eliminate
fluctuations in the prices of portfolio securities or prevent losses if the
prices of such securities decline. Such transactions also preclude the
opportunity for gain if the value of the hedged currency should rise. Moreover,
it may not be possible for the Fund to hedge against a devaluation that is so
generally anticipated that the Fund is not able to contract to sell the currency
at a price above the devaluation level it anticipates.
The cost to the Fund of engaging in foreign currency transactions varies with
such factors as the currency involved, the length of the contract period and the
market conditions then prevailing. Since transactions in foreign currency are
usually conducted on a principal basis, no fees or commissions are involved.
Forward Commitments. The Fund may make contracts to purchase securities for a
fixed price at a future date beyond customary settlement time ("forward
commitments") because new issues of securities are typically offered to
investors, such as the Fund, on that basis. On the date when the Fund enters
into a forward commitment it will segregate in a separate account cash, or
high-grade liquid debt securities having a value at least equal to the amount
required to assure the availability of funds for the purchase price. These
assets will be valued at market daily, and additional cash or liquid assets will
be added to the separate account to the extent the total value of the assets in
the account declines below the amount of the commitment. Forward commitments
involve a risk of loss if the value of the security to be purchased declines
prior to the settlement date. This risk is in addition to the risk of decline in
the value of the Fund's other assets. Although the Fund will enter into forward
commitments with the intention of acquiring the securities, the Fund may dispose
of a commitment prior to the settlement if the Adviser deems it appropriate to
do so. The Fund may realize short-term capital gain or loss upon the sale of
forward commitments.
Repurchase Agreements. A repurchase agreement is a contract under which the Fund
would acquire a security for a relatively short period (usually not more than 7
days) subject to the obligation of the seller to repurchase and the Fund to
resell such security at a fixed time and price (representing the Fund's cost
plus interest). The Fund will enter into repurchase agreements only with member
banks of the Federal Reserve System and with "primary dealers" in U.S.
Government securities. The Adviser will continuously monitor the
creditworthiness of the parties with whom the Fund enters into repurchase
agreements.
The Fund has established a procedure providing that the securities serving as
collateral for each repurchase agreement must be delivered to the Fund's
custodian either physically or in book-entry
4
<PAGE> 36
form and that the collateral must be marked to market daily to ensure that each
repurchase agreement is fully collateralized at all times. In the event of
bankruptcy or other default by a seller of a repurchase agreement, the Fund
could experience delays in liquidating the underlying securities and could
experience losses, including the possible decline in the value of the underlying
securities during the period while the Fund seeks to enforce its rights thereto,
possible subnormal levels of income and lack of access to income during this
period, and expense of enforcing its rights.
Short Sales. The Fund may engage in short sales in order to profit from an
anticipated decline in the value of a security. The Fund may also engage in
short sales to attempt to limit its exposure to a possible market decline in the
value of its portfolio securities through short sales of securities which the
Adviser believes possess volatility characteristics similar to those being
hedged. To effect such a transaction, the Fund must borrow the security sold
short to make delivery to the buyer. The Fund then is obligated to replace the
security borrowed by purchasing it at the market price at the time of
replacement. Until the security is replaced the Fund is required to pay to the
lender any accrued interest and may be required to pay a premium.
The Fund will realize a gain if the security declines in price between the date
of the short sale and the date on which the Fund replaces the borrowed security.
On the other hand, the Fund will incur a loss as a result of the short sale if
the price of the security increases between those dates. The amount of any gain
will be decreased, and the amount of any loss increased, by the amount of any
premium or interest the Fund may be required to pay in connection with a short
sale. The successful use of short selling as a hedging device may be adversely
affected by imperfect correlation between movements in the price of the security
sold short and the securities being hedged.
Under applicable guidelines of the staff of the Securities and Exchange
Commission, if the Fund engages in short sales of the type referred to in
non-fundamental Investment Restriction No. (c) (ii) and (iii) below, it must put
in a segregated account (not with the broker) an amount of cash or U.S.
Government securities equal to the difference between (1) the market value of
the securities sold short at the time they were sold short and (2) any cash or
U.S. Government securities required to be deposited as collateral with the
broker in connection with the short sale (not including the proceeds from the
short sale). In addition, until the Fund replaces the borrowed security, it must
daily maintain the segregated account at such a level that (3) the amount
deposited in it plus the amount deposited with the broker as collateral will
equal the current market value of the securities sold short, and (4) the amount
deposited in it plus the amount deposited with the broker as collateral will not
be less than the market value of the securities at the time they were sold
short.
Short selling may produce higher than normal portfolio turnover which may result
in increased transaction costs to the Fund and may result in gains from be less
than the sale of securities deemed to have been held for less than three months,
which gains must be less than 30% of the Fund's gross income in order for the
Fund to qualify for treatment as a regulated investment company under the
Internal Revenue Code of 1986, as amended. See "Tax Status."
5
<PAGE> 37
The Fund does not intend to enter into short sales (other than those "against
the box") if immediately after such sale the aggregate of the value of all
collateral plus the amount in such segregated account exceeds 5% of the value of
the Fund's net assets. A short sale is "against the box" to the extent that the
Fund contemporaneously owns or has the right to obtain at no added cost
securities identical to those sold short.
Financial Futures Contracts. The Fund may hedge its portfolio by selling
financial futures contracts on debt or equity securities, securities indices or
currency as an offset against the effect of expected increases in interest rates
or declines in securities prices or foreign currency values. In addition, the
Fund may purchase such futures contracts as an offset against the effect of
expected decreases in interest rates or increases in securities prices or
foreign currency values. Although other techniques could be used to reduce the
Fund's exposure to interest rate, securities market and currency fluctuations,
the Fund may be able to hedge its exposure more effectively and at a lower cost
by using financial futures contracts. The Fund will enter into futures contracts
for hedging and speculative purposes to the extent permitted by regulations of
the Commodity Futures Trading Commission ("CFTC").
Futures contracts have been designed by boards of trade which have been
designated as "contract markets" by CFTC. Futures contracts are traded on these
markets in a manner that is similar to the way a stock is traded on a stock
exchange. The boards of trade, through their clearing corporations, guarantee
that the contracts will be performed. It is expected that if new types of
financial futures contracts are developed and traded the Fund may engage in
transactions in such contracts.
Although certain futures contracts by their terms call for actual delivery or
acceptance of securities or currency, in most cases the contracts are closed out
prior to delivery by offsetting purchases or sales of matching futures contracts
(same exchange, underlying security or currency and delivery month). Other
financial futures contracts, such as futures contracts on securities indices, by
their terms call for cash settlements. If the Fund sells a futures contract and
the offsetting purchase price is less than the Fund's original sale price, the
Fund realizes a gain, or if it is more, the Fund realizes a loss. Conversely, if
the Fund purchases a futures contract and the offsetting sale price is more than
the Fund's original purchase price, the Fund realizes a gain, or if it is less,
the Fund realizes a loss. The transaction costs must also be included in these
calculations. The Fund will pay a commission in connection with each purchase or
sale of futures contracts, including a closing transaction. For a discussion of
certain Federal income tax considerations of trading in futures contracts, see
the information under the caption "Tax Status" below.
At the time the Fund enters into a futures contract, it is required to deposit
with its custodian a specified amount of cash or U.S. Government securities,
known as "initial margin." The margin required for a futures contract is set by
the board of trade or exchange on which the contract is traded and may be
modified during the term of the contract. The initial margin is in the nature of
a performance bond or good faith deposit on the futures contract which is
returned to the Fund upon termination of the contract, assuming all contractual
obligations have been satisfied. The Fund expects to earn interest income on its
initial margin deposits. Each day, the futures contract
6
<PAGE> 38
is valued at the official settlement price of the board of trade or exchange on
which it is traded. Subsequent payments, known as "variation margin," to and
from the broker, are made on a daily basis as the market price of the futures
contract fluctuates. This process is known as "mark to the market." Variation
margin does not represent a borrowing or lending by the Fund but is instead a
settlement between the Fund and the broker of the amount one would owe the other
if the futures contract expired. In computing net asset value, the Fund will
mark to the market its open futures positions.
A decision as to whether, when and how to hedge involves the exercise of skill
and judgment, and even a well-conceived hedge may be unsuccessful to some degree
because of market behavior or unexpected interest rate, securities market or
currency trends. The Fund will bear the risk that the price of the securities or
currency being hedged will not move in complete correlation with the price of
the futures contract used as a hedging instrument. Although the Adviser believes
that the use of futures contracts will benefit the Fund, an incorrect prediction
could result in a loss on both the hedged securities or currency in the Fund's
portfolio and the hedging vehicle so that the Fund's return might have been
better had hedging not been attempted. However, in the absence of the ability to
hedge, the Adviser might have taken portfolio actions in anticipation of the
same market movements with similar investment results but, presumably, at
greater transaction costs. In addition, the low margin deposits for futures
transactions permit an extremely high degree of leverage. A relatively small
change in the value of the instrument underlying a futures contract may result
in losses or gains in excess of the amount invested.
Futures exchanges may limit the amount of fluctuation permitted in certain
futures contract prices during a single trading day. The daily limit establishes
the maximum amount that the price of a futures contract may vary either up or
down from the previous day's settlement price at the end of the current trading
session. Once the daily limit has been reached in a futures contract subject to
the limit, no more trades may be made on that day at a price beyond that limit.
The daily limit governs only price movements during a particular trading day and
therefore does not limit potential losses because the limit may work to prevent
the liquidation of unfavorable positions. For example, futures prices have
occasionally moved to the daily limit for several consecutive trading days with
little or no trading, thereby preventing prompt liquidation of positions and
subjecting some holders of futures contracts to substantial losses.
Finally, although the Fund engages in futures transactions only on boards of
trade or exchanges where there appears to be an adequate secondary market, there
is no assurance that a liquid market will exist for a particular futures
contract at any given time. The liquidity of the market depends on participants
closing out contracts rather than making or taking delivery. To the extent other
participants make or take delivery rather than closing out positions, liquidity
in the market could be reduced. In addition, the Fund could be prevented from
executing a buy or sell order at a specified price or closing out a position due
to limits on open positions or daily price fluctuation limits imposed by the
exchanges or boards of trade. If the Fund cannot close out a position, it will
be required to continue to meet margin requirements until the position is
closed.
Options on Financial Futures Contracts. The Fund may purchase and write call and
put options on financial futures contracts. An option on a futures contract
gives the purchaser the right, in
7
<PAGE> 39
return for the premium paid, to assume a position in a futures contract at a
specified exercise price at any time during the period of the option. Upon
exercise, the writer of the option delivers the futures contract to the holder
at the exercise price. The Fund would be required to deposit with its custodian
initial and variation margin with respect to put and call options on futures
contracts written by it. Options on futures contracts involve risks similar to
the risks relating to transactions in financial futures contracts. Also, an
option purchased by the Fund may expire worthless, in which case the Fund would
lose the premium paid therefor.
Other Considerations. The Fund will engage in futures transactions for bona fide
hedging or speculative purposes to the extent permitted by CFTC regulations. The
Fund will determine that the price fluctuations in the futures contracts and
options on futures used for hedging purposes are substantially related to price
fluctuations in securities held by the Fund or which it expects to purchase.
Except as stated below, the Fund's futures transactions will be entered into for
traditional hedging purposes -- i.e., futures contracts will be sold to protect
against a decline in the price of securities that the Fund owns, or futures
contracts will be purchased to protect the Fund against an increase in the price
of securities or the currency in which they are denominated it intends to
purchase. As evidence of this hedging intent, the Fund expects that on 75% or
more of the occasions on which it takes a long futures or option position
(involving the purchase of futures contracts), the Fund will have purchased, or
will be in the process of purchasing, equivalent amounts of related securities
or assets denominated in the related currency in the cash market at the time
when the futures or, option position is closed out. However, in particular
cases, when it is economically advantageous for a Fund to do so, a long futures
position may be terminated or an option may expire without the corresponding
purchase of securities or other assets.
As an alternative to literal compliance with the bona fide hedging definition, a
CFTC regulation permits the Fund to elect to comply with a different test, under
which the aggregate initial margin and premiums required to establish
speculative positions in futures contracts and options on futures will not
exceed 5% of the net asset value of the Fund's portfolio, after taking into
account unrealized profits and losses on any such positions and excluding the
amount by which such options were in-the-money at the time of purchase. The Fund
will engage in transactions in futures contracts only to the extent such
transactions are consistent with the requirements of the Internal Revenue Code
for maintaining its qualification as a regulated investment company for federal
income tax purposes.
When the Fund purchases a financial futures contract, writes a put option
thereon or purchases a call option thereon, an amount of cash or high grade,
liquid debt securities will be deposited in a segregated account with the Fund's
custodian that, together with the amount of initial and variation margin held in
the account of its broker, equals the market value of the futures contract.
Options Transactions. The Fund may write listed and over-the-counter covered
call options and covered put options on securities, securities indices and
currency in order to earn additional income from the premiums received. In
addition, the Fund may purchase such listed and over-the-counter call and put
options. The extent to which the Fund will engage in options transactions will
depend upon market conditions, the availability of alternative strategies and
the
8
<PAGE> 40
future movement of securities prices, interest rates and currency exchange
rates. The Fund may write listed covered and over-the-counter call and put
options on up to 100% of its net assets.
The Fund will write listed and over-the-counter call options only if they are
"covered," which means that the Fund owns or has the immediate right to acquire
the securities or currency underlying the options without additional cash
consideration upon conversion or exchange of other securities held in its
portfolio. A call option written by the Fund will also be "covered" if the Fund
holds on a share-for-share basis a covering call on the same securities or
currency and (i) the exercise price of the covering call held is equal to or
less than the exercise price of the call written or, if the exercise price of
the covering call is greater than the exercise price of the call written, if the
difference is maintained by the Fund in cash, U.S government securities, or
high-grade liquid short-term obligations (i.e., securities rated in one of the
top three rating categories by Moody's or S & P) in a segregated account with
the Fund's custodian, and (ii) the covering call expires at the same time as or
later than the call written. The Fund will cover call options on securities
indices by maintaining an adequate degree of correlation between the securities
in the underlying index and the securities in all or part of its portfolio.
If a covered call option is not exercised, the Fund would keep both the option
premium and the underlying security or currency. If the covered call option
written by the Fund is exercised and the exercise price, less the transaction
costs, is less than the cost to the Fund of the underlying security or currency,
the Fund's loss would be reduced by the amount of the option premium.
As writer of a covered put option, the Fund will write a put option only with
respect to securities or currency it intends to acquire for the Fund's portfolio
and will maintain in a segregated account with its custodian bank cash, U.S.
Government securities or liquid high-grade debt securities with a value equal to
the price at which the underlying security or currency may be sold to the Fund
in the event the put option is exercised by the purchaser. The Fund can also
write a "covered" put option by purchasing on a share-for-share basis a put on
the same security or currency as the put written by the Fund if the exercise
price of the covering put held is equal to or greater than the exercise price of
the put written and the covering put expires at the same time or later than the
put written.
In writing listed or over-the-counter covered put options on securities or
currency, the Fund would earn income from the premiums received. If a covered
put option is not exercised, the Fund would keep the option premium and the
assets maintained to cover the option. If the option is exercised and the
exercise price, including transaction costs, exceeds the market price of the
underlying security or currency, the Fund would realize a loss, but the amount
of the loss would be reduced by the amount of the option premium.
If the Fund as the writer of an exchange-traded option wishes to terminate its
obligation prior to its exercise, the Fund may effect a "closing purchase
transaction." This is accomplished by buying an option of the same series as the
option previously written. The effect of the purchase is that the Fund's
position will be offset by the Options Clearing Corporation.
9
<PAGE> 41
The Fund may not effect a closing purchase transaction after it has been
notified of the exercise of an option. There is no guarantee that a closing
purchase transaction can be effected. Although the Fund will generally write
only those options for which there appears to be an active secondary market,
there is no assurance that a liquid secondary market on an exchange or board of
trade will exist for any particular option or at any particular time, and for
some options no secondary market on an exchange may exist.
In the case of a written call option, effecting a closing transaction will
permit the Fund to write another call option on the underlying security or
currency with either a different exercise price, expiration date or both. In the
case of a written put option, it will permit the cash or proceeds from the
concurrent sale of any securities or currency covering the option to be used for
other investments. If the Fund desires to sell a particular security from its
portfolio on which it has written a call option, it will effect a closing
transaction prior to or concurrently with the sale of the security.
The Fund will realize a gain from a closing transaction if the cost of the
closing transaction is less than the premium received from writing the option.
The Fund will realize a loss from a closing transaction if the cost of the
closing transaction is more than the premium received for writing the option.
However, because increases in the market price of a call option will generally
reflect increases in the market price of the underlying security or currency,
any loss resulting from the repurchase of a call option is likely to be offset
in whole or in part by appreciation in the value of the underlying security or
currency owned by the Fund.
Over-the-Counter Options. The Fund may engage in options transactions on
exchanges and in the over-the-counter markets. In general, exchange-traded
options are third-party contracts (i.e. performance of the parties' obligations
is guaranteed by an exchange or clearing corporation) with standardized strike
prices and expiration dates. Over-the-counter ("OTC") transactions are two-party
contracts with price and terms negotiated by the buyer and seller. The Fund will
acquire only those OTC options for which management believes the Fund can
receive on each business day at least two separate bids or offers (one of which
will be from an entity other than a party to the option) or those OTC options
valued by an independent pricing service. The Fund will write and purchase OTC
options only with member banks of the Federal Reserve System and primary dealers
in U.S. Government securities or their affiliates which have capital of at least
$50 million or whose obligations are guaranteed by an entity having capital of
at least $50 million.
The SEC staff has taken the position that OTC options are illiquid securities
subject to the restriction that illiquid securities are limited to not more than
15% of the Fund's assets. The SEC staff, however, has provided a partial
exemption from the above restrictions on transactions in OTC options. The SEC
staff allows the Fund to exclude from its 15% limitation on illiquid securities
the portion of the value of the OTC options written by the Fund, provided that
two conditions are met. First, the other party to the OTC options must be a
primary U.S. Government securities dealer designated as such by the Federal
Reserve Bank. Second, the Fund must have an absolute contractual right to
repurchase the OTC options at a formula price. If the above conditions are met,
the Fund must treat as illiquid only that portion of the OTC option's value
10
<PAGE> 42
(and the value of its underlying securities) which is equal to the formula price
for repurchasing the OTC option, less the OTC option's intrinsic value.
Portfolio Trading. Purchases and sales of securities will be made whenever
necessary in the management's view to achieve the objectives of the Fund.
Management does not expect that in pursuing the Fund's objective, unusual
portfolio turnover will be required and intends to keep turnover to a minimum
consistent with such objective. Management believes unsettled market and
economic conditions during certain periods may require greater portfolio
turnover in pursuing the Fund's objective than would otherwise be the case.
Restricted Securities. The Fund may invest in restricted securities eligible for
resale to certain institutional investors pursuant to Rule 144A under the
Securities Act of 1933 and foreign securities acquired in accordance with
Regulation S under the Securities Act of 1933. The Fund will not invest more
than 15% of its net assets in illiquid investments, which include repurchase
agreements maturing in more than seven days, securities that are not readily
marketable and restricted securities. However, if the Board of Trustees
determines, based upon a continuing review of the trading markets for specific
Rule 144A securities, that they are liquid, then these securities may be
purchased without regard to the 15% limit. The Trustees may adopt guidelines and
delegate to the Adviser the daily function of determining and monitoring the
liquidity of restricted securities. The Trustee, however, will retain sufficient
oversight and be ultimately responsible for the determinations. The Adviser will
carefully monitor the Fund's investments in these securities, focusing on such
important factors, among others, as valuation, liquidity and availability of
information. This investment practice could have the effect of increasing the
level of illiquidity in the Fund if qualified institutional buyers become for a
time uninterested in purchasing these restricted securities.
INVESTMENT RESTRICTIONS
Fundamental Investment Restrictions
The following investment restrictions may not be changed without approval of a
majority of outstanding voting securities which, as used in the Prospectus and
this Statement of Additional Information, means approval of the lesser of (1)
the holders of 67% or more of the shares of the Fund represented at a meeting if
the holders of more than 50% of the Fund's outstanding shares are present in
person or by proxy or (2) the holders of more than 50% of the outstanding shares
of the Fund.
The Fund observes the following fundamental restrictions. The Fund may not:
(1) Issue senior securities, except as permitted by paragraphs (2), (6) and (7)
below. For purposes of this restriction, the issuance of shares of beneficial
interest in multiple classes or series, the purchase or sale of options, futures
contracts, forward contracts, forward commitments
11
<PAGE> 43
and repurchase agreements entered into in accordance with the Fund's investment
policy, and the pledge, mortgage or hypothecation of the Fund's assets within
the meaning of paragraph 3 below, are not deemed to be the issuance of senior
securities.
(2) Borrow money, except from banks as a temporary measure for extraordinary
emergency purposes in amounts not to exceed 33 1/3% of the value of the Fund's
total assets (including the amount borrowed) taken at market value. The Fund
will not leverage to attempt to increase income.
(3) Pledge, mortgage or hypothecate its assets, except to secure indebtedness
permitted by paragraph (2) above and then only if such pledging, mortgaging or
hypothecating does not exceed 33 1/3% of the Fund's total assets taken at
market value.
(4) Act as an underwriter, except to the extent that, in connection with the
disposition of portfolio securities, the Fund may be deemed to be an underwriter
for purposes of the Securities Act of 1933.
(5) Purchase or sell real estate, any interest therein, or real estate limited
partnership interests, except that the Fund may invest in securities of
corporate or governmental entities secured by real estate or marketable
interests therein or securities issued by companies that invest in real estate
or interests therein.
(6) Make loans, except that the Fund may lend portfolio securities in accordance
with the Fund's investment policies up to 33 1/3% of the Fund's total assets
taken at market value, enter into repurchase agreements and purchase of all or a
portion of an issue of publicly distributed debt securities, bank loan
participation interests, bank certificates of deposit, banker's acceptances,
debentures or other securities, whether or not the purchase is made upon the
original issuance of the securities.
(7) Invest in commodities or in commodity contracts or in puts, calls, or
combinations of both, except options on currency, securities and securities
indices, futures contracts on currency, securities and securities indices and
options on such futures, forward foreign currency exchange contracts, forward
commitments, securities index put or call warrants and repurchase agreements
entered into in accordance with the Fund's investment policies.
(8) With respect to 75% of the Fund's total assets, purchase securities of an
issuer (other than the U.S. Government, its agencies or instrumentalities). if
(i) such purchase would cause more than 5% of the Fund's total assets taken at
market value to be invested in the securities of such issuer, or (ii) such
purchase would at the time result in more than 10% of the outstanding voting
securities of such issuer being held by the Fund.
(9) Purchase securities, other than obligations of the U.S. Government or any of
its agencies or instrumentalities, if such purchase would cause 25% or more of
the value of the Fund's total assets to be invested in securities of issuers
conducting their principal business activities in the
12
<PAGE> 44
same industry, except that the Fund shall invest at least 25% of the value of
its total assets in securities of issuers in the retail sales group of
industries.
For purposes of fundamental investment restriction (9) above, the "retail sales
group of industries" consists of the group of retail industries included under
the caption "Retail and Wholesale Trade-Retail" in the Directory of Companies
Filing Annual Reports with the Securities and Exchange Commission published by
the Securities and Exchange Commission.
Non-Fundamental Investment Restrictions
The following restrictions are designated as non-fundamental and may be changed
by the Board of Trustees without the approval of the Fund's shareholders.
The Fund may not:
(a) Participate on a joint or joint-and-several basis in any securities
trading account. The "bunching" of orders for the sale or repurchase of
marketable portfolio securities with other accounts under the
management of the Adviser to save commissions or to average prices
among them is not deemed to be participation in a joint securities
trading account.
(b) Purchase securities on margin except that the Fund may obtain such
short-term credits as may be necessary for the clearance of purchases
and sales of securities.
(c) Make short sales of securities or maintain a short position unless (i)
at all times when a short position is open the Fund owns an equal
amount of such securities or securities convertible into or
exchangeable, without payment of any further consideration, for
securities of the same issue as, and equal in amount to, the securities
sold short; (ii) for the purpose of hedging the Fund's exposure to an
actual or anticipated market decline in the value of its investments;
or (iii) in order to profit from an anticipated decline in the value of
a security.
(d) Knowingly purchase or retain securities of an issuer if one or more of
the Trustees or officers of the Trust or directors or officers of the
Adviser or any investment management subsidiary of the Adviser
individually owns beneficially more than 0.5% and together own
beneficially more than 5% of the securities of such issuer.
(e) Purchase a security if, as a result, (i) more than 10% of the Fund's
assets would be invested in securities of other investment companies,
(ii) the Fund would hold more than 3% of the total outstanding voting
securities of any one such investment company, or (iii) more than 5% of
the Fund's assets would be invested in any one such investment company.
(f) Purchase securities of any issuer which, together with any
predecessor, has a record of less than three years' continuous
operations prior to the purchase if such purchase would
13
<PAGE> 45
cause investments of the Fund in all such issuers to exceed 5% of the
value of the total assets of the Fund.
(g) Purchase any security, including any repurchase agreement maturing in
more than seven days, which is not readily marketable, if more than
15% of the net assets of the Fund, taken at market value, would be
invested in such securities.
(h) The Fund will not purchase warrants of any issuer, if, as a result of
such purchases, more than 2% of the value of the Fund's total assets
would be invested in warrants which are not listed on the New York
Stock Exchange or the American Stock Exchange or more than 5% of the
value of the total assets of the Fund would be invested in warrants
generally, whether or not so listed. For these purposes, warrants are
to be valued at the lesser of cost or market, but warrants acquired by
the Fund in units with or attached to debt securities shall be deemed
to be without value.
(i) The Fund will not purchase interests in oil, gas or other mineral
exploration programs; however, this policy will not prohibit the
acquisition of securities of companies engaged in the production or
transmission of oil, gas or other minerals.
(j) The Fund will not purchase securities while outstanding borrowings
exceed 5% of the Fund's total assets.
(k) Notwithstanding any investment restriction to the contrary, the Fund
may, in connection with the John Hancock Group of Funds Deferred
Compensation Plan for Independent Trustees/Directors, purchase
securities of other investment companies within the John Hancock Group
of Funds provided that, as a result, (i) no more than 10% of the
Fund's assets would be invested in securities of all other investment
companies, (ii) such purchase would not result in more than 3% of the
total outstanding voting securities of any one such investment company
being held by the Fund and (iii) no more than 5% of the Fund's assets
would be invested in any one such investment company.
In order to permit the sale of shares of the Fund in certain states, the
Trustees may, in their sole discretion, adopt restrictions on investment policy
more restrictive than those described above. Should the Trustees determine that
any such more restrictive policy is no longer in the best
14
<PAGE> 46
interest of the Fund and its shareholders, the Fund may cease offering shares in
the state involved and the Trustees may revoke such restrictive policy.
Moreover, if the states involved shall no longer require any such restrictive
policy, the Trustees may, in their sole discretion, revoke such policy. The Fund
has agreed with state securities administrators that it will not purchase the
following securities:
The Fund may not purchase securities of any open-end investment company except
when such purchase is part of a plan of merger, consolidation, reorganization or
purchase of substantially all of the assets of any other investment company.
THOSE RESPONSIBLE FOR MANAGEMENT
The business of the Fund is managed by the Trustees of the Trust who elect
officers who are responsible for the day-to-day operations of the Fund and who
execute policies formulated by the Trustees. Several of the officers and
Trustees of the Trust are also officers or directors of the Adviser or officers
or directors of the Fund's principal distributor, John Hancock Funds, Inc.
("John Hancock Funds").
15
<PAGE> 47
The following table sets forth the principal occupation or employment of the
Trustees and principal officers of the Trust during the past five years.
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING THE PAST FIVE YEARS
- ------------------ ---------------- -----------------------------
<S> <C> <C>
*Edward J. Boudreau, Jr. Chairman (1,2) Chairman and Chief Executive Officer, the
101 Huntington Avenue Adviser and The Berkeley Financial Group
Boston, Massachusetts ("The Berkeley Group"); Chairman, NM Capital
Management, Inc. ("NM Capital"); John Hancock
Advisers International Limited; ("Advisers
International"); John Hancock Funds, Inc.,
("John Hancock Funds"); John Hancock Investor
Services Corporation ("Investor Services")
and Sovereign Asset Management Corporation
("SAMCorp"); (herein after the Adviser, the
Berkeley Group, NM Capital, Advisers
International, John Hancock Funds, Investor
Services and SAMCorp are collectively
referred to as the "Affiliated Companies");
Chairman, First Signature Bank & Trust;
Director, John Hancock Freedom Securities
Corp., John Hancock Capital Corp., New
England/Canada Business Council; Member,
Investment Company Institute Board of
Governors; Director, Asia Strategic Growth
Fund, Inc.; Trustee, Museum of Science;
President, the Adviser (until July 1992).
Chairman John Hancock Distributors, Inc.
(until April, 1994).
</TABLE>
- --------------
*An "interested person" of the Fund, as such term is defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act:).
(1) A Member of the Executive Committee.
(2) A Member of Investment Committee of the Adviser.
(3) An Alternate Member of the Executive Committee.
(4) A Member of the Audit and Administration Committees.
16
<PAGE> 48
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING THE PAST FIVE YEARS
- ------------------- --------------- ---------------------------
<S> <C> <C>
Dennis S. Aronowitz Trustee (4) Professor of Law, Boston University School
Boston University of Law; Trustee, Brookline Savings Bank;
Boston, Massachusetts Director, Boston University Center for
Banking Law Studies (until 1990).
Richard P. Chapman, Jr. Trustee (4) President, Brookline Savings Bank.
160 Washington Street
Brookline, Massachusetts
William J. Cosgrove Trustee (4) Vice President, Senior Banker and Senior
20 Buttonwood Place Credit Officer, Citibank, N.A. (retired
Saddle River, New Jersey September 1991); Executive Vice President,
Citadel Group Representative, Inc.
Gail D. Fosler Trustee (4) Vice President and Chief Economist, The
4104 Woodbine Street Conference Board (non-profit economic and
Chevy Chase, MD business research).
Bayard Henry Trustee (4) Corporate Advisor; Director, Fiduciary Trust
121 High Street Company (a trust company); Director,
Boston, Massachusetts Groundwater Technology, Inc. (remediation);
Samuel Cabot, Inc.; Advisor, Corning Capital
Corp.
</TABLE>
- -------------------
* An "interested person" of the Fund, as such term is defined in the Investment
Company Act of 1940, as amended (the "Investment Company Act").
(1) A Member of the Executive Committee.
(2) A Member of Investment Committee of the Adviser.
(3) An Alternate Member of the Executive Committee.
(4) A Member of the Audit and Administration Committees.
17
<PAGE> 49
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING THE PAST FIVE YEARS
- ------------------ -------------- -----------------------------
<S> <C> <C>
*Richard S. Scipione Trustee (3) General Counsel, the Life Insurance Company;
John Hancock Place Director, the Adviser, the Affiliated
P.O. Box 111 Companies, John Hancock Distributors, Inc.,
Boston, Massachusetts JH Networking Insurance Agency, Inc., John
Hancock Subsidiaries, Inc., SAMCorp, NM
Capital and John Hancock Property and
Casualty Insurance and its affiliates (until
November, 1993); Trustee; The Berkeley
Group; Director, John Hancock Home Mortgages
Corp. and John Hancock Financial Access,
Inc. (until July 1990).
Edward J. Spellman Trustee (4) Partner, KPMG Peat Marwick (retired June
259C Commercial Bld. 1990).
Suite 200
Lauderdale by the Sea, FL
*Robert G. Freedman Vice Chairman and Chief Vice Chairman and Chief Investment Officer,
101 Huntington Avenue Investment Officer (2) the Adviser; President, the Adviser (until
Boston, Massachusetts December 1994).
*Anne C. Hodsdon President (2) President and Chief Operations Officer, the
101 Huntington Avenue Adviser; Executive Vice President, the
Boston, Massachusetts Adviser (until December 1994).
*Thomas H. Drohan Senior Vice President and Senior Vice President and Secretary, the
101 Huntington Avenue Secretary Adviser.
Boston, Massachusetts
*James K. Ho Senior Vice President (2) Senior Vice President, the Adviser.
101 Huntington Avenue
Boston, Massachusetts
- ------------------
</TABLE>
* An "interested person" of the Fund, as such term is defined in the Investment
Company Act.
(1) A Member of the Executive Committee.
(2) A Member of Investment Committee of the Adviser.
(3) An Alternate Member of the Executive Committee.
(4) A Member of the Audit and Administration Committees
18
<PAGE> 50
<TABLE>
<CAPTION>
POSITIONS HELD PRINCIPAL OCCUPATION(S)
NAME AND ADDRESS WITH THE FUND DURING THE PAST FIVE YEARS
- ------------------ --------------- ---------------------------
<S> <C> <C>
*James B. Little Senior Vice President and Senior Vice President the Adviser.
101 Huntington Avenue Chief Financial Officer (2)
Boston, Massachusetts
*Michael P. DiCarlo Senior Vice President (2) Senior Vice President, the Adviser.
101 Huntington Avenue
Boston, Massachusetts
*John A. Morin Vice President Vice President, the Adviser.
101 Huntington Avenue
Boston, Massachusetts
*Susan S. Newton Vice President, Assistant Vice President and Assistant Secretary, the
101 Huntington Avenue Secretary and Compliance Adviser.
Boston, Massachusetts Officer
*James J. Stokowski Vice President and Treasurer Vice President, the Adviser.
101 Huntington Avenue
Boston, Massachusetts
</TABLE>
- ------------------
* An "interested person" of the Fund, as such term is defined in the Investment
Company Act.
(1) A Member of the Executive Committee.
(2) A Member of Investment Committee of the Adviser.
(3) An Alternate Member of the Executive Committee.
(4) A Member of the Audit and Administration Committees.
As of the date of this Statement of Additional Information, the officers and
Trustees of the Trust as a group owned less than 1% of the outstanding shares of
the Fund and to the knowledge of the registrant, no persons owned of record or
beneficially 5% or more of any class of registrant's outstanding securities.
All of the officers listed are officers or employees of the Adviser or
affiliated companies. Some of the Trustees and officers may also be officers
and/or directors and/or Trustees of one or more of the other funds for which the
Adviser serves as the investment adviser.
The following table provides information regarding the compensation paid by the
Fund and the other investment companies in the John Hancock Fund Complex to the
Independent Trustees for their services for each Fund's 1994 fiscal year. The
two non-Independent Trustees, Messrs. Boudreau and Scipione, and each of the
officers of the Funds are interested persons of the Adviser, are compensated by
the Adviser and receive no compensation from the Funds for their services.
19
<PAGE> 51
<TABLE>
<CAPTION>
TOTAL COMPENSATION
PENSION OR FROM THE FUND AND JOHN
AGGREGATE RETIREMENT BENEFITS ESTIMATED ANNUAL HANCOCK FUND COMPLEX
COMPENSATION FROM ACCRUED AS PART OF BENEFITS UPON TO TRUSTEES(1)
THE FUND THE FUND'S EXPENSES RETIREMENT (TOTAL OF 18 FUNDS)
------------------ ------------------- ---------------- ----------------------
INDEPENDENT TRUSTEES
<S> <C> <C> <C> <C>
Dennis S. Aronowitz ----- - - $ 60,950
Richard P. Chapman, Jr. ----- - - 62,950
William J. Cosgrove ----- - - 60,950
Gail D. Fosler ----- - - 62,950
Bayard Henry ----- - - 60,950
Edward J. Spellman ----- - - 60,950
----- ----------- ----------- ----------
$---- $369,700
</TABLE>
(1)The total compensation paid by the John Hancock Fund Complex to the
Independent Trustees is as of the calendar year ended December 31, 1994.
INVESTMENT ADVISORY AND OTHER SERVICES
As described in the Fund's Prospectus, the Fund receives its investment advice
from the Adviser. Investors should refer to the Prospectus for a description of
certain information concerning the investment management contract.
Each of the Trustees and principal officers affiliated with the Trust who is
also an affiliated person of the Adviser is named above, together with the
capacity in which such person is affiliated with the Trust or the Adviser.
As described in the Fund's Prospectus under the caption "Organization and
Management of the Fund," the Trust on behalf of the Fund has entered into an
investment management contract with the Adviser. Under the investment management
contract, the Adviser provides the Fund (i) with a continuous investment
program, consistent with the Fund's stated investment objectives and policies,
(ii) supervision of all aspects of the Fund's operations except those that are
delegated to a custodian, transfer agent or other agent and (iii) such
executive, administrative and clerical personnel, officers and equipment as are
necessary for the conduct of its business. The Adviser is responsible for the
management of the Fund's portfolio assets.
Securities held by the Fund may also be held by other funds or investment
advisory clients for which the Adviser or affiliates provide investment advice.
Because of different investment objectives or other factors, a particular
security may be bought for one or more funds or clients when one or more are
selling the same security. If opportunities for purchase or sale of securities
by the Adviser for the Fund or for other funds or clients for which the Adviser
renders investment advice arise for consideration at or about the same time,
transactions in such securities will be
20
<PAGE> 52
made, insofar as feasible, for the respective funds or clients in a manner
deemed equitable to all of them. To the extent that transactions on behalf of
more than one client of the Adviser or affiliates may increase the demand for
securities being purchased or the supply of securities being sold, there may be
an adverse effect on price.
No person other than the Adviser and its directors and employees regularly
furnishes advice to the Fund with respect to the desirability of the Fund's
investing in, purchasing or selling securities. The Adviser may from time to
time receive statistical or other similar factual information, and information
regarding general economic factors and trends, from the John Hancock Mutual Life
Insurance Company (the "Life Insurance Company") and its affiliates.
Under the terms of the investment management contract with the Trust, the
Adviser provides the Fund with office space, supplies and other facilities
required for the business of the Fund. The Adviser pays the compensation of all
other officers and employees of the Trust, and pays the expenses of clerical
services relating to the administration of the Fund.
All expenses which are not specifically paid by the Adviser and which are
incurred in the operation of the Fund (including fees of Trustees of the Trust
who are not "interested persons", as such term is defined in the Investment
Company Act but excluding certain distribution related activities required to be
paid by the Adviser or John Hancock Funds) are borne by the Fund. Class expenses
properly allocable to either Class A shares or Class B shares will be borne
exclusively by such class of shares, subject to conditions the Internal Revenue
Service imposes relating to the multiple-class structure.
As provided by the investment management contract, the Fund pays the Adviser
monthly an investment management fee, which is accrued daily, based on a stated
percentage of the average of the daily net assets of the Fund as follows:
<TABLE>
<CAPTION>
Net Asset Value Annual Rate
--------------- -----------
<S> <C>
First $250,000,000 0.80%
Amount over $250,000,000 0.70%
</TABLE>
From time to time, the Adviser may reduce its fee or make other arrangements to
limit the Fund's expenses to a specified percentage of average daily net assets.
The Adviser retains the right to re-impose a fee and recover any other payments
to the extent that, at the end of any fiscal year, the Fund's annual expenses
fall below this limit.
If the total of all ordinary business expenses of the Fund for any fiscal year
exceeds limitations prescribed in any state in which shares of the Fund are
qualified for sale, the fee payable to the Adviser will be reduced to the extent
required by these limitations. At this time, the most restrictive limit on
expenses imposed by a state requires that expenses charged to the Fund in any
fiscal year not exceed 2 1/2% of the first $30,000,000 of the Fund's average net
asset value, 2% of the next $70,000,000 of such net asset value, and 1 1/2% of
the remaining average net asset value. When calculating the limit above, the
Fund may exclude interest, brokerage commissions and extraordinary expenses.
21
<PAGE> 53
Pursuant to the investment management contract, the Adviser is not liable for
any error of judgment or mistake of law or for any loss suffered by the Fund in
connection with the matters to which their respective contract relates, except a
loss resulting from willful misfeasance, bad faith or gross negligence on the
part of the Adviser in the performance of its duties or from reckless disregard
of the obligations and duties under the applicable contract.
The Adviser, located at 101 Huntington Avenue, Boston, Massachusetts 02199-7603,
was organized in 1968 and currently has more than $13 billion in assets under
management in its capacity as investment adviser to the Fund and other mutual
funds and publicly traded investment companies in the John Hancock group of
funds having approximately 1,060,000 shareholders. The Adviser is an affiliate
of the Life Insurance Company, one of the most recognized and respected
financial institutions in the nation. With total assets under management of $80
billion, the Life Insurance Company is one of 10 largest life insurance
companies in the United States, and carries Standard & Poor's and A.M. Best's
highest ratings. Founded in 1862, Life Insurance Company has been serving
clients for over 130 years.
Under the investment management contract, the Fund may use the name "John
Hancock", "Freedom" or any name derived from or similar to it only for so long
as the contract or any extension, renewal or amendment thereof remains in
effect. If the contract is no longer in effect, the Fund (to the extent that it
lawfully can) will cease to use such a name or any other name indicating that it
is advised by or otherwise connected with the Adviser. In addition, the Adviser
or Life Insurance Company may grant the non-exclusive right to use the name
"John Hancock" or any similar name to any other corporation or entity, including
but not limited to any investment company of which Life Insurance Company or any
subsidiary or affiliate thereof or any successor to the business of any
subsidiary or affiliate thereof shall be the investment adviser.
DISTRIBUTION CONTRACT
The Trust has a distribution contract with John Hancock Funds. Under the
contract, John Hancock Funds is obligated to use its best efforts to sell shares
on behalf of the Fund. Shares of the Fund are also sold by selected
broker-dealers which have entered into selling agency agreements with John
Hancock Funds. John Hancock Funds accepts orders for the purchase of the shares
of the Fund which are continually offered at net asset value next determined
plus the applicable sales charge. In connection with the sale of Class A and
Class B shares, John Hancock Funds and Selling Brokers receive compensation in
the form of a sales charge imposed, in the case of Class A shares, at the time
of sale, or, in the case of Class B shares, on a deferred basis. The sales
charges are discussed further in the Prospectus.
The Fund's Trustees have adopted Distribution Plans with respect to Class A and
Class B shares pursuant to Rule 12b-1 under the Investment Company Act. Under
the Class A and Class B Plan, the Fund will pay distribution and service fees at
an aggregate annual rate of 0.30% and 1.00%, respectively, of the Fund's average
daily net assets attributable to shares of that class. However, the amount of
the service fee will not exceed 0.25% of the Fund's average daily net assets
attributable to each class of shares. The distribution fees reimburse John
Hancock Funds for its
22
<PAGE> 54
distribution costs incurred in the promotion of sales of shares of the Fund, and
the service fees compensate Selling Brokers for providing personal and account
maintenance services to shareholders. In the event that John Hancock Funds is
not fully reimbursed for expenses incurred by it under the Class B Plan in any
fiscal year, John Hancock Funds may carry these expenses forward, provided
however, that the Trustees may terminate the Class B Plan and thus the Fund's
obligation to make further payments at any time. Accordingly, the Fund does not
treat unreimbursed expenses relating to the Class B shares as a liability of the
Fund. The Plans were approved by the Adviser as the initial sole shareholder of
Class A and Class B shares. The Plans have also been approved by a majority of
the Trustees, including a majority of the Trustees who are not interested
persons of the Fund and who have no direct or indirect financial interest in the
operation of the Plans (the "Independent Trustees"), by votes cast in person at
meetings called for the purpose of voting on such Plans.
Pursuant to the Plans, at least quarterly, John Hancock Funds provides the Fund
with a written report of the amounts expended under the Plans and the purpose
for which these expenditures were made. The Trustees review these reports on a
quarterly basis.
Each of the Plans provides that it will continue in effect only so long as its
continuance is approved at least annually by a majority of both the Trustees and
the Independent Trustees. Each of the Plans provides that it may be terminated
without penalty (a) by vote of a majority of the Independent Trustees, (b) by a
vote of a majority of the Fund's outstanding shares of the applicable class upon
60 days' written notice to John Hancock Funds and (c) automatically in the event
of assignment. Each of the Plans further provides that it may not be amended to
increase the maximum amount of the fees for the services described therein
without the approval of a majority of the outstanding shares of the class of the
Fund which has voting rights with respect to the Plan. And finally, each of the
Plans provides that no material amendment to the Plan will, in any event, be
effective unless it is approved by a majority vote of both the Trustees and the
Independent Trustees of the Trust. The holders of Class A shares and Class B
shares have exclusive voting rights with respect to the Plan applicable to their
respective class of shares. In adopting the Plans, the Trustees concluded that,
in their judgment, there is a reasonable likelihood that each Plan will benefit
the holders of the applicable class of shares of the Fund.
When the Trust seeks an Independent Trustee to fill a vacancy or as a nominee
for election by shareholders, the selection or nomination of the Independent
Trustee is, under resolutions adopted by the Trustees contemporaneously with
their adoption of the Plans, committed to the discretion of the Committee on
Administration of the Trustees. The members of the Committee on Administration
are all Independent Trustees and are identified in this Statement of Additional
Information under the heading "Those Responsible for Management."
NET ASSET VALUE
For purposes of calculating the net asset value ("NAV") of a Fund's shares, the
following procedures are utilized wherever applicable.
23
<PAGE> 55
Debt investment securities are valued on the basis of valuations furnished by a
principal market maker or a pricing service, both of which generally utilize
electronic data processing techniques to determine valuations for normal
institutional size trading units of debt securities without exclusive reliance
upon quoted prices. Equity securities traded on a principal exchange are
generally valued at last sale price on the day of valuation. Securities in the
aforementioned category for which no sales are reported and securities traded
over-the-counter are generally valued at the last available bid price.
Short-term debt investments which have a remaining maturity of 60 days or less
are generally valued at amortized cost which approximates market value. If
market quotations are not readily available or if in the opinion of the Adviser
any quotation or price is not representative of true market value, the fair
value of the security may be determined in good faith in accordance with
procedures approved by the Trustees. Any assets or liabilities expressed in
terms of foreign currencies are translated into U.S. dollars by the custodian
bank based on London currency exchange quotations as of 5:00 p.m., London time
(12:00 noon, New York time) on the date of any determination of a Fund's NAV.
A Fund will not price its securities on the following national holidays: New
Year's Day; Presidents' Day; Good Friday; Memorial Day; Independence Day; Labor
Day; Thanksgiving Day; and Christmas Day. On any day an international market is
closed and the New York Stock Exchange is open, any foreign securities will be
valued at the prior day's close with the current day's exchange rate. Trading of
foreign securities may take place on Saturdays and U.S. business holidays on
which a Fund's NAV is not calculated. Consequently, a Fund's portfolio
securities may trade and the NAV of the Fund's redeemable securities may be
significantly affected on days when a shareholder has no access to the Fund.
INITIAL SALES CHARGE ON CLASS A SHARES
The sales charges applicable to purchases of Class A shares of the Fund are
described in the Fund's Prospectus. Methods of obtaining reduced sales charges
referred to generally in the Prospectus are described in detail below. In
calculating the sales charge applicable to current purchases of Class A shares
of the Fund, the investor is entitled to cumulate current purchases with the
greater of the current value (at offering price) of the Class A shares of the
Fund owned by the investor, or if Investor Services is notified by the
investor's dealer or the investor at the time of the purchase, the cost of the
Class A shares owned.
Combined Purchases. In calculating the sales charge applicable to purchases of
shares made at one time, the purchases will be combined if made by (a) an
individual, his spouse and their children under the age of 21, purchasing
securities for his or their own account, (b) a trustee or other fiduciary
purchasing for a single trust, estate or fiduciary account and (c) certain
groups of four or more individuals making use of salary deductions or similar
group methods of payment whose funds are combined for the purchase of mutual
fund shares. Further information about combined purchases, including certain
restrictions on combined group purchases, is available from Investor Services or
a Selling Broker's representative.
Without Sales Charges. As described in the Class A and Class B Prospectus, Class
A shares of the Fund may be sold without a sales charge to the persons described
in the Prospectus.
24
<PAGE> 56
Accumulation Privilege. Investors (including investors combining purchases) who
are already Class A shareholders may also obtain the benefit of the reduced
sales charge by taking into account not only the amount then being invested but
also the current account value of the Class A shares already held by such
person.
Combination Privilege. Reduced sales charges (according to the schedule set
forth in the Prospectus) also are available to an investor based on the
aggregate amount of his concurrent and prior investments in Class A shares of
the Fund and shares of all other John Hancock funds which carry an initial sales
charge.
Letter of Intention. The reduced sales charges are also applicable to
investments made over a thirteen-month period pursuant to a Letter of Intention
(the "LOI"), which should be read carefully prior to its execution by an
investor. The Fund offers two options regarding the specified period for making
investments under the LOI. All investors have the option of making their
investments over a specified period of thirteen (13) months. Investors who are
using the Fund as a funding medium for a qualified retirement plan, however, may
opt to make the necessary investments called for by the LOI over a forty-eight
(48) month period. These qualified retirement plans include group IRA, SEP,
SARSEP, TSA and 401(k), TSA and 457 plans. Such an investment (including
accumulations and combinations) must aggregate $50,000 or more invested during
the specified period from the date of the LOI or from a date within ninety (90)
days prior thereto, upon written request to Investor Services. The sales charge
applicable to all amounts invested under the LOI is computed as if the aggregate
amount intended to be invested had been invested immediately. If such aggregate
amount is not actually invested, the difference between the sales charge
actually paid and the sales charge payable had the LOI not been in effect is due
from the investor. However, for the purchases actually made within the specified
period (either 13 or 48 months) the sales charge applicable will not be higher
than that which would have applied (including accumulations and combinations)
had the LOI been for the amount actually invested.
The LOI authorizes Investor Services to hold in escrow sufficient shares
(approximately 5% of the aggregate) to make up any difference in sales charges
on the amount intended to be invested and the amount actually invested, until
such investment is completed within the specified period, at which time the
escrow shares will be released. If the total investment specified in the LOI is
not completed, the shares held in escrow may be redeemed and the proceeds used
as required to pay such sales charge as may be due. By signing the LOI, the
investor authorizes Investor Services to act as his attorney-in-fact to redeem
any escrowed shares and adjust the sales charge, if necessary. A LOI does not
constitute a binding commitment by an investor to purchase, or by the Fund to
sell, any additional shares and may be terminated at any time.
DEFERRED SALES CHARGE ON CLASS B SHARES
Investments in Class B shares are purchased at net asset value per share without
the imposition of an initial sales charge so that the Fund will receive the full
amount of the purchase payment.
25
<PAGE> 57
Contingent Deferred Sales Charge. Class B shares which are redeemed within six
years of purchase will be subject to a contingent deferred sales charge ("CDSC")
at the rates set forth in the Prospectus as a percentage of the dollar amount
subject to the CDSC. The charge will be assessed on an amount equal to the
lesser of the current market value or the original purchase cost of the Class B
shares being redeemed. Accordingly, no CDSC will be imposed on increases in
account value above the initial purchase prices, including Class B shares
derived from reinvestment of dividends or capital gains distributions.
The amount of the CDSC, if any, will vary depending on the number of years from
the time of payment for the purchase of Class B shares until the time of
redemption of such shares. Solely for purposes of determining the number of
years from the time of any payment for the purchases of shares, all payments
during a month will be aggregated and deemed to have been made on the last day
of the month.
Proceeds from the CDSC are paid to John Hancock Funds and are used in whole or
in part by John Hancock Funds to defray its expenses related to providing
distribution-related services to the Fund in connection with the sale of the
Class B shares, such as the payment of compensation to select Selling Brokers
for selling Class B shares. The combination of the CDSC and the distribution and
service fees facilitates the ability of the Fund to sell the Class B shares
without a sales charge being deducted at the time of the purchase. See the
Prospectus for additional information regarding the CDSC.
SPECIAL REDEMPTIONS
Although it would not normally do so, the Fund has the right to pay the
redemption price of shares of the Fund in whole or in part in portfolio
securities as prescribed by the Trustees. When the shareholder sells portfolio
securities received in this fashion he would incur a brokerage charge. Any such
securities would be valued for the purposes of making such payment at the same
value as used in determining net asset value. The Fund has, however, elected to
be governed by Rule 18f-1 under the Investment Company Act. Under that rule, the
Fund must redeem its shares for cash except to the extent that the redemption
payments to any shareholder during any 90-day period would exceed the lesser of
$250,000 or 1% of the Fund's net asset value at the beginning of such period.
ADDITIONAL SERVICES AND PROGRAMS FOR CLASS A AND CLASS B SHARES
Exchange Privilege. As described more fully in the Class A and Class B
Prospectus, the Fund permits exchanges of shares of any class of the Fund for
shares of the same class in any other John Hancock fund offering that class.
Systematic Withdrawal Plan. As described briefly in the Fund's Class A and Class
B Prospectus, the Fund permits the establishment of a Systematic Withdrawal
Plan. Payments under this plan represent proceeds arising from the redemption of
Fund shares. Since the redemption price of the Fund shares may be more or less
than the shareholder's cost, depending upon the market value of the securities
owned by the Fund at the time of redemption, a withdrawal pursuant to this plan
26
<PAGE> 58
may result in realization of gain or loss for purposes of Federal, state and
local income taxes. The maintenance of a Systematic Withdrawal Plan concurrently
with purchases of additional Class A or Class B shares of the Fund could be
disadvantageous to a shareholder because of the initial sales charge payable on
purchases of Class A shares and the CDSC imposed on redemptions of Class B
shares and because redemptions are taxable events. Therefore, a shareholder
should not purchase Class A or Class B shares at the same time that a Systematic
Withdrawal Plan is in effect. The Fund reserves the right to modify or
discontinue the Systematic Withdrawal Plan of any shareholder on 30 days' prior
written notice to such shareholder, or to discontinue the availability of such
plan in the future. The shareholder may terminate the plan at any time by giving
proper notice to Investor Services.
Monthly Automatic Accumulation Program ("MAAP"). This program is explained fully
in the Prospectus. The program, as it relates to automatic investment checks, is
subject to the following conditions:
The investments will be drawn on or about the day of the month indicated.
The privilege of making investments through the Monthly Automatic Accumulation
Program may be revoked by Investor Services without prior notice if any
investment is not honored by the shareholder's bank. The bank shall be under no
obligation to notify the shareholder as to the non-payment of any drafts.
The program may be discontinued by the shareholder either by calling Fund
Services or upon written notice to Fund Services which is received at least five
(5) business days prior to the due date of any investment.
Reinvestment Privilege. A shareholder who has redeemed shares of the Fund may,
within 120 days after the date of redemption, reinvest without payment of a
sales charge any part of the redemption proceeds in shares of the same class of
the Fund or in any other John Hancock mutual fund, subject to the minimum
investment limit of that fund. The proceeds from the redemption of Class A
shares may be reinvested at net asset value without paying a sales charge in
Class A shares of the Fund or in Class A shares of another John Hancock mutual
fund. If a CDSC was paid upon a redemption, a shareholder may reinvest the
proceeds from this redemption at net asset value in additional shares of the
class from which the redemption was made. The shareholder's account will be
credited with the amount of any CDSC charged upon the prior redemption and the
new shares will continue to be subject to the CDSC. The holding period of the
shares acquired through reinvestment will, for purposes of computing the CDSC
payable upon a subsequent redemption, include the holding period of the redeemed
shares. The Fund may modify or terminate the reinvestment privilege at any time.
A redemption or exchange of shares of the Fund is a taxable transaction for
Federal income tax purposes. Any gain realized is recognized for tax purposes
even if the reinvestment privilege is exercised, and any loss realized by a
shareholder on the redemption or other disposition of shares of the Fund will be
treated for tax purposes as described under the caption "Tax Status."
27
<PAGE> 59
DESCRIPTION OF THE FUND'S SHARES
The Trustees of the Trust are responsible for the management and supervision of
the Fund. The Declaration of Trust permits the Trustees to issue an unlimited
number of full and fractional shares of beneficial interest of the Fund without
par value. Under the Declaration of Trust, the Trustees have the authority to
create and classify shares of beneficial interest in separate series, without
further action by shareholders. As of the date of this Statement of Additional
Information, the Trustees have authorized shares of the Fund and three other
series. Additional series may be added in the future. The Declaration of Trust
also authorizes the Trustees to classify and reclassify the shares of the Fund,
or any other series of the Trust, into one or more classes. As of the date of
this Statement of Additional Information, the Trustees have authorized the
issuance of two classes of shares of the Fund, designated as Class A and
Class B.
Class A and Class B shares of the Fund represent an equal proportionate interest
in the aggregate net assets belonging to the Fund. The holders of Class A and
Class B shares each have certain exclusive voting rights on matters relating to
their respective Rule 12b-1 distribution plans. Dividends paid by the Fund, if
any, with respect to each class of shares will be calculated in the same manner,
at the same time and on the same day and will be in the same amount, except that
(i) Class B shares will pay higher distribution and service fees than Class A
shares and (ii) each of Class A shares and Class B shares will bear any class
expenses properly allocable to such class of shares, subject to the conditions
set forth in a private letter ruling that the Fund has received from the
Internal Revenue Service relating to its multiple-class structure. Similarly,
the net asset value per share may vary depending on the class of shares
purchased. When issued, shares are fully paid and non-assessable, by the Trust.
In the event of liquidation, shareholders are entitled to share pro rata in
proportion to the net asset value of the shares in the new assets of the Fund
available for distribution to these shareholders. Shares entitle their holders
to one vote per share, are freely transferable and have no preemptive,
subscription or conversion rights.
Unless otherwise required by the Investment Company Act or the Declaration of
Trust, the Trust has no intention of holding annual meetings of shareholders.
Trust shareholders may remove a Trustee by the affirmative vote of at least
two-thirds of the Trust's outstanding shares and the Trustees shall promptly
call a meeting for such purpose when requested to do so in writing by the record
holders of not less than 10% of the outstanding shares of the Trust.
Shareholders may, under certain circumstances, communicate with other
shareholders in connection with requesting a special meeting of shareholders.
However, at any time that less than a majority of the Trustees holding office
were elected by the shareholders, the Trustees will call a special meeting of
shareholders for the purpose of electing Trustees.
Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for acts or obligations
of the trust. However, the Trust's Declaration of Trust contains an express
disclaimer of shareholder liability for acts, obligations or affairs of the
Trust. The Declaration of Trust also provides for indemnification out of the
Trust assets for all losses and expenses of any shareholder held personally
liable by reason of being or having been a shareholder. Liability is therefore
limited to circumstances in which the Trust itself would be unable to meet its
obligations, and the possibility of this occurrence is remote.
28
<PAGE> 60
TAX STATUS
Each series of the Trust, including the Fund, is treated as a separate entity
for tax purposes. The Fund has elected or intends to elect to be treated as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
(the "Code") and intends to qualify as such for each taxable year. As such and
by complying with the applicable provisions of the Code regarding the sources of
its income, the timing of its distributions, and the diversification of its
assets, the Fund will not be subject to Federal income tax on taxable income
(including net realized capital gains) which is distributed to shareholders at
least annually.
Distributions of net investment income (which includes original issue discount
and accrued recognized market discount) and any net realized capital gains, as
computed for Federal income tax purposes, will be taxable as described in the
Prospectus whether made in shares or in cash. Shareholders electing to receive
distributions in the form of additional shares will have a cost basis for
Federal income tax purposes in the shares so received equal to the amount of
cash they would have received had they elected to receive the distribution in
cash.
Foreign exchange gains and losses realized by the Fund in connection with
certain transactions involving foreign currency-denominated debt securities,
forward foreign currency contracts, certain options or futures contracts on
foreign currencies, foreign currencies, or payables or receivables denominated
in a foreign currency are subject to Section 988 of the Code, which generally
causes such gains and losses to be treated as ordinary income and losses and may
affect the amount, timing and character of distributions to shareholders. Any
such transactions that are not directly related to the Fund's investment in
stock or securities may increase the amount of gain it is deemed to recognize
from the sale of certain investments held for less than three months, which gain
is limited under the Code to less than 30% of its annual gross income, and may
under future Treasury regulations produce income not among the types of
"qualifying income" from which the Fund must derive at least 90% of its annual
gross income. If the net foreign exchange loss for a year treated as ordinary
loss under Section 988 were to exceed the Fund's investment company taxable
income computed without regard to such loss (i.e. all of the Fund's net income
other than any excess of net long-term capital gain over net short-term capital
loss) the resulting overall ordinary loss for such year would not be deductible
by the Fund or its shareholders in future years.
If the Fund invests in certain non-U.S. corporations that receive at least 75%
of their annual gross income from passive sources (such as sources that produce
interest, dividend, rental, royalty or capital gain income) or hold at least 50%
of their assets in such passive sources ("passive foreign investment
companies"). In certain cases, an election may be available that would
ameliorate these adverse tax consequences. Accordingly, the Fund may limit its
investments in such passive foreign investment companies and will undertake
appropriate actions, including the consideration of any available elections, to
limit its tax liability, if any, with respect to such investments.
Options written or purchased and futures or forward contracts (collectively,
"derivatives") entered into by the Fund may cause the Fund to recognize income,
gains or losses from marking to market
29
<PAGE> 61
at the end of its taxable year even though such options may not have lapsed,
been closed out or exercised and such futures or forward contracts may not have
been terminated or delivery may not have been made thereunder. The tax rules
applicable to these derivatives may also affect the characterization as
long-term or short-term of some capital gains and losses realized by the Fund
or, in the case of certain derivatives relating to foreign currency, result in
the realization of ordinary rather than capital gains or losses. Losses on
certain derivatives and/or portfolio positions offset by such derivatives may be
deferred and/or recharacterized under certain straddle rules. The Fund will take
into account these special tax rules that apply to derivatives, which may affect
the amount, timing and character of its distributions to shareholders, and may
make certain elections, if available, to minimize any potential adverse tax
consequences or to simplify the required tax accounting.
The amount of net realized capital gains, if any, in any given year will result
from sales of securities or the use of options or future contracts made with a
view to the maintenance of a portfolio believed by the Fund's management to be
most likely to attain the Fund's objective. Such sales and transactions, and any
resulting gains or losses, may therefore vary considerably from year to year.
Since, at the time of an investor's purchase of Fund shares, a portion of the
per share net asset value by which the purchase price is determined may be
represented by realized or unrealized appreciation in the Fund's portfolio or
undistributed taxable income of the Fund, subsequent distributions (or portions
thereof) on such shares may be taxable to such investor even if the net asset
value of his shares is, as a result of the distributions, reduced below his cost
for such shares and the distributions (or portions thereof) in reality represent
a return of a portion of the purchase price.
Upon a redemption of shares (including by exercise of the exchange privilege) a
shareholder will ordinarily realize a taxable gain or loss depending upon his
basis in his shares. Such gain or loss will be treated as capital gain or loss
if the shares are capital assets in the shareholder's hands and will be
long-term or short-term, depending upon the shareholder's holding period for the
shares. A sales charge paid in purchasing Class A shares of the Fund cannot be
taken into account for purposes of determining gain or loss on the redemption or
exchange of such shares within 90 days after their purchase to the extent shares
of the Fund or another John Hancock fund are subsequently acquired without
payment of a sales charge pursuant to the reinvestment or exchange privilege.
Such disregarded charge will result in an increase in the shareholder's tax
basis in the shares subsequently acquired. Also, any loss realized on a
redemption or exchange will be disallowed to the extent the shares disposed of
are replaced within a period of 61 days, beginning 30 days before and ending 30
days after the shares are disposed of, such as pursuant to the Dividend
Reinvestment Plan. In such a case, the basis of the shares acquired will be
adjusted to reflect the disallowed loss. Any loss realized upon the redemption
of shares with a tax holding period of six months or less will be treated as a
long-term capital loss to the extent of any amounts treated as distributions of
long-term capital gain with respect to such shares.
Although the Fund's present intention is to distribute all net realized capital
gains, if any, the Fund reserves the right to retain and reinvest all or any
portion of the excess, as computed for Federal income tax purposes, of net
long-term capital gain over net short-term capital loss in any year. The Fund
will not in any event distribute net long-term capital gain realized in any year
to the
30
<PAGE> 62
extent that a capital loss is carried forward from prior years against such
gain. To the extent such excess was retained and not exhausted by the
carryforward of prior years' capital losses, it would be subject to Federal
income tax in the hands of the Fund. Each shareholder would be treated for
Federal income tax purposes as if the Fund had distributed to him on the last
day of its taxable year his pro rata share of such excess, and he had paid his
pro rata share of the taxes paid by the Fund and reinvested the remainder in the
Fund. Accordingly, each shareholder would (a) include his pro rata share of such
excess as long-term capital gain income in his return for his taxable year in
which the last day of the Fund's taxable year falls, (b) be entitled either to a
tax credit on his return for, or to a refund of, his pro rata share of the taxes
paid by the Fund, and (c) be entitled to increase the adjusted tax basis for his
Fund shares by the difference between his pro rata share of such excess and his
pro rata share of such taxes.
For Federal income tax purposes, the Fund is permitted to carry forward a net
realized capital loss in any year to offset realized capital gains, if any,
during the eight years following the year of the loss. To the extent subsequent
net realized capital gains are offset by such losses, they would not result in
Federal income tax liability to the Fund and as noted above would not be
distributed as such to shareholders. Presently, there are no realized capital
loss carryforwards available to offset against future net realized capital
gains.
For purposes of the dividends-received deduction available to corporations,
dividends received by the Fund from U.S. domestic corporations in respect of any
share of stock held by the Fund, for U.S. Federal income tax purposes, for at
least 46 days (91 days in the case of certain preferred stock) and distributed
and designated by the Fund may be treated as qualifying dividends. Any corporate
shareholder should consult its tax adviser regarding the possibility that its
basis in its shares may be reduced, for Federal income tax purposes, by reason
of "extraordinary dividends" received with respect to the shares, for the
purpose of computing its gain or loss on the shares. Corporate shareholders must
meet the minimum holding period requirement stated above (46 or 91 days) with
respect to their Fund shares in order to qualify for the deduction and, if they
borrow to acquire Fund shares, may be denied a portion of the dividends received
deduction. The entire qualifying dividend, including the otherwise-deductible
amount, will be included in determining alternative minimum tax liability.
The Fund may be subject to withholding and other taxes imposed by foreign
countries. Tax conventions between certain countries and the U.S. or deductions
may reduce or eliminate such taxes. Investors may be entitled to claim U.S.
foreign tax credits or deductions with respect to such taxes, subject to certain
provisions and limitations contained in the Code. Specifically, if more than 50%
of the Fund's total assets at the close of any taxable year consists of stock or
securities of foreign corporations, the Fund may file an election with the
Internal Revenue Service pursuant to which shareholders of the Fund will be
required to (i) include in ordinary gross income (in addition to taxable
dividends actually received) their pro rata shares of foreign income taxes paid
by the Fund even though not actually received, and (ii) treat such respective
pro rata portions as foreign income taxes paid by them.
Shareholders may then deduct such pro rata portions of foreign income taxes in
computing their taxable incomes, or, alternatively, use them as foreign tax
credits, subject to applicable limitations,
31
<PAGE> 63
against their U.S. income taxes. Shareholders who do not itemize deductions for
Federal income tax purposes will not, however, be able to deduct their pro rata
portion of foreign taxes paid by the Fund, although such shareholders will be
required to include their shares of such taxes in gross income. Shareholders who
claim a foreign tax credit for such foreign taxes may be required to treat a
portion of dividends received from the Fund as a separate category of income for
purposes of computing the limitations on the foreign tax credit. Tax-exempt
shareholders will ordinarily not benefit from this election. Each year that the
Fund files the election described above, its shareholders will be notified of
the amount of (i) each shareholder's pro rata share of foreign income taxes paid
by the Fund and (ii) the portion of Fund dividends which represents income from
each foreign country.
Different tax treatment, including penalties on certain excess contributions and
deferrals, certain pre-retirement and post-retirement distributions and certain
prohibited transactions, is accorded to accounts maintained as qualified
retirement plans. Shareholders should consult their tax advisers for more
information.
The Fund will be subject to a four percent nondeductible Federal excise tax on
certain amounts not distributed (and not treated as having been distributed) on
a timely basis in accordance with annual minimum distribution requirements. The
Fund intends under normal circumstances to avoid liability for such tax by
satisfying such distribution requirements.
The Fund is not subject to Massachusetts corporate excise or franchise taxes.
Provided that the Fund qualifies as a regulated investment company under the
Code, it will not be required to pay any Massachusetts income tax.
The foregoing discussion relates solely to U.S. Federal income tax law as
applicable to U.S. persons (i.e., U.S. citizens or residents and U.S. domestic
corporations, partnerships, trusts or estates) subject to tax under such law.
The discussion does not address special tax rules applicable to certain classes
of investors, such as tax-exempt entities, insurance companies, and financial
institutions. Dividends, capital gain distributions, and ownership of or gains
realized on the exchange or redemption of Fund shares may also be subject to
state and local taxes. Shareholders should consult their own tax advisers as to
the Federal, state or local tax consequences of ownership of shares of the Fund
in particular circumstances.
Foreign investors not engaged in a U.S. trade or business with which their Fund
investment is effectively connected will be subject to U.S. Federal income tax
treatment that is different from that described above, including a possible 30%
U.S. withholding tax (or lower treaty rate) on dividends representing ordinary
income, and should consult their tax advisers regarding such treatment and the
application of foreign taxes to an investment in the Fund.
32
<PAGE> 64
CALCULATION OF PERFORMANCE
The Fund's total return is computed by finding the average annual compounded
rate of return over the 1 year, 5 year and 10 year periods that would equate the
initial amount invested to the ending redeemable value according to the
following formula:
T = (n)/ERV/P-1
Where:
P = a hypothetical initial investment of $1,000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value of a hypothetical $1,000
investment made at the beginning of the 1 year, 5
year and life of fund periods.
This calculation assumes that all dividends and distributions are reinvested at
net asset value on the reinvestment dates during the period. The "distribution
rate" is determined by annualizing the result of dividing the declared dividends
of the Fund during the period stated by the maximum offering price or net asset
value at the end of the period. Excluding the Fund's sales load from the
distribution rate produces a higher rate.
In addition to average annual total returns, the Fund may quote unaveraged or
cumulative total returns reflecting the simple change in value of an investment
over a stated period. Cumulative total returns may be quoted as a percentage or
as a dollar amount, and may be calculated for a single investment, a series of
investments and/or a series of redemptions over any time period. Total returns
may be quoted with or without taking the Fund's 5.0% sales charge on Class A
shares or the CDSC on Class B shares into account. The "distribution rate" is
determined by annualizing the result of dividing the declared dividends of the
Fund during the period stated by the maximum offering price or net asset value
at the end of the period. Excluding the Fund's sales charge on Class A shares
and the CDSC on Class B shares from a total return calculation produces a higher
total return figure.
From time to time, in reports and promotional literature, the Fund's total
return will be compared to indices of mutual funds such as Lipper Analytical
Services, Inc.'s "Lipper - Mutual Performance Analysis," a monthly publication
which tracks net assets, total return and yield on more than 1,000 equity mutual
funds in the United States. Ibottson and Associates, CDA Weisenberger and F.C.
Towers are also used for comparison purposes, as well as the Russell and
Wilshire Indices.
33
<PAGE> 65
Performance rankings and ratings reported periodically in national financial
publications such as MONEY Magazine, FORBES, BUSINESS WEEK, THE WALL STREET
JOURNAL, MICROPAL, INC., MORNINGSTAR, STANGER'S and BARRON'S may also be
utilized.
The performance of the Fund is not fixed or guaranteed. Performance quotations
should not be considered to be representations of performance of the Fund for
any period in the future. The performance of the Fund is a function of many
factors including its earnings, expenses and number of outstanding shares;
fluctuating market conditions; purchases, sales and maturities of portfolio
securities; sales and redemptions of shares of beneficial interest; and changes
in operating expenses.
BROKERAGE ALLOCATION
Decisions concerning the purchase and sale of portfolio securities and the
allocation of brokerage commissions are made by the officers of the Trust
pursuant to recommendations made by an investment committee of the Adviser,
which consists of officers and directors of the Adviser and affiliates and
officers and Trustees who are interested persons of the Fund. Orders for
purchases and sales of securities are placed in a manner which, in the opinion
of the officers of the Trust, will offer the best price and market for the
execution of each such transaction. Purchases from underwriters of portfolio
securities may include a commission or commissions paid by the issuer and
transactions with dealers serving as market makers reflect a "spread."
Investments in debt securities are generally traded on a net basis through
dealers acting for their own account as principals and not as brokers; no
brokerage commissions are payable on such transactions.
The Fund's primary policy is to execute all purchases and sales of portfolio
instruments at the most favorable prices consistent with best execution,
considering all of the costs of the transaction including brokerage commissions.
This policy governs the selection of brokers and dealers and the market in which
a transaction is executed. Consistent with the foregoing primary policy, the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.
and other policies that the Trustees may determine, the Adviser may consider
sales of shares of the Fund as a factor in the selection of broker-dealers to
execute the Fund's portfolio transactions.
To the extent consistent with the foregoing, the Fund will be governed in the
selection of brokers and dealers, and the negotiation of brokerage commission
rates and dealer spreads, by the reliability and quality of the services,
including primarily the availability and value of research information and to a
lesser extent statistical assistance furnished to the Adviser of the Fund, and
their value and expected contribution to the performance of the Fund. It is not
possible to place a dollar value on information and services to be received from
brokers and dealers, since it is only supplementary to the research efforts of
the Adviser. The receipt of research information is not expected to reduce
significantly the expenses of the Adviser. The research information and
statistical assistance furnished by brokers and dealers may benefit the Life
Insurance Company or other advisory clients of the Adviser, and, conversely,
brokerage commissions and spreads paid by other advisory clients of the Adviser
may result in research information and statistical assistance beneficial to the
Fund. The Fund will not make commitments to allocate portfolio transactions upon
any prescribed basis. While the Trust's officers will be primarily responsible
for the
34
<PAGE> 66
allocation of the Fund's brokerage business, their policies and practices in
this regard must be consistent with the foregoing and will at all times be
subject to review by the Trustees.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, the Fund
may pay a broker which provides brokerage and research services to the Fund an
amount of disclosed commission in excess of the commission which another broker
would have charged for effecting that transaction. This practice is subject to a
good faith determination by the Trustees that the commission is reasonable in
light of the services provided and to policies that the Trustees may adopt from
time to time.
The Adviser's indirect parent, the Life Insurance Company, is the indirect sole
shareholder of John Hancock Freedom Securities Corporation and other
subsidiaries, three of which, Tucker Anthony Incorporated, John Hancock
Distributors, Inc. and Sutro & Company, Inc., are broker-dealers ("Affiliated
Brokers"). Pursuant to procedures determined by the Trustees and consistent with
the above policy of obtaining best net results, the Fund may execute portfolio
transactions with or through Affiliated Brokers.
Any of the Affiliated Brokers may act as broker for the Fund on exchange
transactions, subject, however, to the general policy of the Fund set forth
above and the procedures adopted by the Trustees pursuant to the Investment
Company Act. Commissions paid to an Affiliated Broker must be at least as
favorable as those which the Trustees believe to be contemporaneously charged by
other brokers in connection with comparable transactions involving similar
securities being purchased or sold. A transaction would not be placed with an
Affiliated Broker if the Fund would have to pay a commission rate less favorable
than the Affiliated Broker's contemporaneous charges for comparable transactions
for its other most favored, but unaffiliated, customers except for accounts for
which the Affiliated Broker acts as clearing broker for another brokerage firm,
and any customers of the Affiliated Broker not comparable to the Fund as
determined by a majority of the Trustees who are not "interested persons" (as
defined in the Investment Company Act) of the Fund, the Adviser or the
Affiliated Broker. Because the Adviser, which is affiliated with the Affiliated
Brokers, has, as an investment adviser to the Fund, the obligation to provide
investment management services, which include elements of research and related
investment skills, such research and related skills will not be used by the
Affiliated Broker as a basis for negotiating commissions at a rate higher than
that determined in accordance with the above criteria. The Fund will not effect
principal transactions with Affiliated Brokers.
TRANSFER AGENT SERVICES
John Hancock Investor Services Corporation, P.O. Box 9116, Boston, MA
02205-9116, a wholly owned indirect subsidiary of the Life Insurance Company, is
the transfer and dividend paying agent for the Fund. The Fund pays Investor
Services an annual fee for Class A of $16.00 per shareholder account and for
Class B shares of $18.50.
35
<PAGE> 67
CUSTODY OF PORTFOLIO
Portfolio securities of the Fund are held pursuant to a custodian agreement
between the Trust and State Street Bank and Trust Company, 225 Franklin Street,
Boston, Massachusetts 02110. Under the custodian agreement, Investors Bank &
Trust Company perform custody, portfolio and fund accounting services.
INDEPENDENT AUDITORS
The independent auditors of the Fund are Price Waterhouse LLP, 160 Federal
Street, Boston, Massachusetts 02110. Price Waterhouse audits and renders an
opinion of the Fund's annual financial statements and prepares the Fund's annual
Federal income tax return.
36
<PAGE> 68
John Hancock Funds - Global Retail Fund
<TABLE>
<CAPTION>
Statement of Assets and Liabilities
January 31, 1995 (Unaudited)
<S> <C>
Assets:
Investments at value - Note C:
Common stocks (cost - $409,565)...................................................... $410,763
Joint repurchase agreement (cost - $148,000)......................................... 148,000
--------
558,763
Cash 920
Foreign currency, at value (cost - $15,676).......................................... 15,676
Interest receivable.................................................................. 24
Dividends receivable................................................................. 14
Receivable from John Hancock Advisers, Inc. - Note B................................. 10,853
Foreign tax receivable............................................................... 8
--------
Total Assets.................................................................. 586,258
--------
Liabilities:
Payable for investments purchased.................................................... 54,176
Payable for shares repurchased....................................................... 10
Payable to John Hancock Advisers, Inc.
and affiliates - Note B............................................................. 2,116
Accounts payable and accrued expenses................................................ 11,018
--------
Total Liabilities.............................................................. 67,320
--------
Net Assets:
Capital paid-in...................................................................... 520,638
Accumulated net realized loss on investments
and foreign currency transactions.................................................. (2,894)
Net unrealized appreciation of investments
and foreign currency transactions.................................................. 1,179
Undistributed net investment income.................................................. 15
--------
Net Assets..................................................................... $518,938
--------
Net Asset Value Per Share - Class A:
(Based on 61,237 shares of
beneficial interest outstanding - unlimited
number of shares authorized with no par value...................................... $8.47
========
Maximum Offering Price Per Share - Class A*
($8.47 x 105.26%).................................................................. $8.92
========
</TABLE>
* On single retail sales of less than $50,000. On sales of $50,000 or more
and on group sales the offering price is reduced.
SEE NOTES TO FINANCIAL STATEMENTS
1
<PAGE> 69
John Hancock Funds - Global Retail Fund
Statement of Operations
<TABLE>
<CAPTION>
For the period September 29, 1994 (commencement of operations) to
January 31, 1995 (Unaudited)
<S> <C>
Investment Income:
Interest........................................................... $4,048
Dividends (net of foreign withholding taxes of $24)................ 251
-------
4,299
-------
Expenses:
Investment management fee - Note B................................. 1,406
Distribution/service fee - Note B.................................. 527
Transfer agent fee - Note B........................................ 527
Custodian fee...................................................... 5,564
Auditing fee....................................................... 2,782
Legal fees......................................................... 928
Registration and filing fees....................................... 779
Printing........................................................... 742
Trustees' fees..................................................... 190
Miscellaneous...................................................... 46
-------
Total Expenses................................................ 13,491
Less expenses reimbursable by John
Hancock Advisers, Inc.- Note B.............................. (10,854)
--------
Net Expenses.................................................. 2,637
--------
Net Investment Income......................................... 1,662
--------
Realized and Unrealized Gain (Loss) on Investments
and Foreign Currency Transactions:
Net realized loss on investments sold.............................. (2,628)
Net realized loss on foreign currency transactions................. (266)
Change in net unrealized appreciation/depreciation
of investments................................................... 1,198
Change in net unrealized appreciation/depreciation
of foreign currency transactions................................. (19)
--------
Net Realized and Unrealized Loss on Investments and
Foreign Currency Transactions............................... (1,715)
--------
Net Decrease in Net Assets Resulting from Operations.......... ($53)
========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
2
<PAGE> 70
John Hancock Funds - Global Retail Fund
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 29, 1994
(COMMENCEMENT OF
OPERATIONS) TO
JANUARY 31, 1995
(UNAUDITED)
------------------
<S> <C>
Increase (Decrease) in Net Assets:
From Operations:
Net investment Income......................................................... $1,662
Net realized loss on investments sold and foreign
currency transactions........................................................ (2,894)
Change in net unrealized appreciation/depreciation of
investments and foreign currency transactions................................ 1,179
---------
Net Decrease in Net Assets Resulting from Operations..................... (53)
---------
Distributions to Shareholders:
Dividends from net investment income
Class A - ($0.0273 per share)............................................... (1,647)
---------
From Fund Share Transactions - Net*........................................... 20,638
---------
Net Assets:
Initial Investment by John Hancock Advisers, Inc. - Note A.................... 500,000
---------
End of period (including undistributed net investment income of $15).......... $518,938
========
</TABLE>
* Analysis of Fund Share Transactions:
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 29, 1994
(COMMENCEMENT OF OPERATIONS)
TO JANUARY 31, 1995
(UNAUDITED)
SHARES AMOUNT
------- --------
<S> <C> <C>
CLASS A
Shares sold......................................................... 2,514 $21,488
Shares issued to shareholders in reinvestment of distributions...... 5 44
------ --------
2,519 21,532
Less shares repurchased............................................. (106) (894)
------- --------
Net increase........................................................ 2,413 20,638
Initial Investment by John Hancock Advisers, Inc. - Note A.......... 58,824 500,000
------- --------
Net increase and shares outstanding end of period................... 61,237 $520,638
======= ========
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
3
<PAGE> 71
John Hancock Funds - Global Retail Fund
Financial Highlights
Selected data for a share of beneficial interest outstanding throughout the
period indicated, investment returns, key ratios and supplemental data are
listed as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD SEPTEMBER 29, 1994
(COMMENCEMENT OF OPERATIONS)
TO JANUARY 31, 1995 (UNAUDITED)
---------------------------------
<S> <C>
Class A
Per Share Operating Performance
Net Asset Value, Beginning of Period....................................... $8.50 (d)
------
Net Investment Income...................................................... 0.03 (b)
Net Realized and Unrealized Loss on Investments
and Foreign Currency Transactions........................................ (0.03)
------
Total from Investment Operations......................................... 0.00
------
Less Distributions:
Dividends from Net Investment Income...................................... (0.03)
------
Net Asset Value, End of Period............................................ $8.47
======
Total Investment Return at Net Asset Value..................................... (2.31%) (c)
Total Adjusted Investment Return at Net Asset Value (a)........................ (4.43%) (c)
Ratios and Supplemental Data
Net Assets, End of Period (000's omitted)................................ $519
Ratio of Expenses to Average Net Assets **............................... 1.50% *
Ratio of Adjusted Expenses to Average Net Assets (a)..................... 7.68% *
Ratio of Net Investment Income to Average Net Assets..................... 0.95% *
Ratio of Adjusted Net Investment Income to Average Net Assets (a)........ (5.23%) *
Portfolio Turnover Rate.................................................. 10%
** Expense Reimbursement Per Share....................................... $0.18 (b)
</TABLE>
* On an annualized basis.
(a) On an unreimbursed basis.
(b) On average month end shares outstanding.
(c) Not annualized.
(d) Initial price to commence operations.
SEE NOTES TO FINANCIAL STATEMENTS
4
<PAGE> 72
John Hancock Funds - Global Retail Fund
Schedule of Investments
January 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- ------
<S> <C> <C>
COMMON STOCKS
Computer - Devices (4.18%)
America Online, Inc. *........................................... 400 $21,700
-------
Consumer Products (7.61%)
First Alert, Inc. *.............................................. 500 7,500
First Team Sports, Inc. *........................................ 800 20,600
Safety 1st, Inc. *............................................... 400 11,400
------
39,500
------
Hotels & Motels (1.70%)
La Quinta Motor Inns, Inc........................................ 450 8,831
------
Retail - Apparel/Shoe Group (6.09%)
AnnTaylor Stores, Inc. *......................................... 300 10,050
Gymboree Corp. *................................................. 400 9,500
Nordstrom, Inc................................................... 300 12,075
------
31,625
------
Retail - Building Products (7.41%)
Castorama Dubois (France)........................................ 100 13,415
Home Depot, Inc.................................................. 300 14,025
Lowe's Cos., Inc................................................. 300 11,025
------
38,465
------
Retail - Computers/Electronics (7.43%)
CDW Computer Centers, Inc. *..................................... 300 9,750
Elkjop (Norway).................................................. 700 10,474
Insight Enterprises, Inc. *...................................... 1,000 10,250
Micro Warehouse, Inc. * ......................................... 300 8,100
------
38,574
------
Retail - Discount & Variety (2.45%)
Dollar General Corp.............................................. 400 12,700
------
Retail - Drug Stores (4.26%)
Eckerd Corp. *................................................... 300 7,875
Walgreen Co...................................................... 300 14,250
------
22,125
------
Retail - Food & Restaurants (1.86%)
Papa John's International, Inc. *................................ 300 9,675
------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
5
<PAGE> 73
John Hancock Funds - Global Retail Fund
Schedule of Investments
January 31, 1995 (Unaudited)
<TABLE>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -------
<S> <C> <C>
Retail - Mail Order/Direct (10.31%)
CUC International, Inc. *........................... 300 $10,388
Gander Mountain, Inc. *............................. 400 5,500
Geerlings & Wade, Inc. *............................ 1,300 16,250
Seattle Filmworks, Inc. *........................... 800 14,000
Williams-Sonoma, Inc. *............................. 300 7,350
--------
53,488
--------
Retail - Major Department Stores (5.39%)
Cifra S.A. de CV (Series C) (Mexico)................ 5,000 6,496
Next, PLC (United Kingdom).......................... 3,000 11,909
Woolworth's Ltd. (Australia)........................ 4,500 9,540
--------
27,945
--------
Retail - Miscellaneous/Diversified (16.20%)
Barnes & Noble, Inc. *.............................. 300 8,925
Daisytek International Corp. *...................... 1,000 16,500
Office Depot, Inc. *................................ 400 10,400
OfficeMax, Inc. *................................... 500 13,000
PetSmart Inc. *..................................... 300 10,350
Sports & Recreation, Inc. *......................... 300 6,863
Urban Outfitters, Inc. *............................ 300 7,725
Viking Office Products, Inc. *...................... 400 10,300
--------
84,063
--------
Retail - Supermarkets (2.98%)
Carrefour Supermarche (France)...................... 40 15,447
--------
Textile (1.28%)
Authentic Fitness Corp. *........................... 500 6,625
--------
TOTAL COMMON STOCKS (COST $409,565)............... (79.15%) 410,763
-------- --------
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS
6
<PAGE> 74
John Hancock Funds - Global Retail Fund
Schedule of Investments
January 31, 1995 (Unaudited)
<TABLE>
<CAPTION>
INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000'S OMITTED) VALUE
- ------------------- -------- --------------- ----------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
Joint Repurchase Agreement (28.52%)
Investment in a joint repurchase agreement
transaction with Lehman Bros., Inc. -
Dated 1-31-95, Due 02-01-95
(Secured by US Treasury Notes, 3.875% thru 8.500%
due 10-31-95 thru 11-30-97) Note A..................... 5.81% $148 $148,000
---------
TOTAL SHORT-TERM INVESTMENTS......................... (28.52%) 148,000
--------- ---------
TOTAL INVESTMENTS................................ (107.67%) $558,763
========== =========
</TABLE>
* Non-income producing security.
Parenthetical disclosure of a foreign country in the security description
represents the country of foreign issuer, however security is U.S. dollar
denominated.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
SEE NOTES TO FINANCIAL STATEMENTS
7
<PAGE> 75
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
NOTE A --
ACCOUNTING POLICIES
John Hancock World Fund (the "Trust") is an open-end management investment
company, registered under the Investment Company Act of 1940. The Trust consists
of three series portfolios: John Hancock Global Retail Fund (the "Fund") John
Hancock Pacific Basin Equities Fund and John Hancock Global RX Fund.
The Trustees have authorized the issuance of multiple classes of shares of
the Fund, designated as Class A and Class B shares. The shares of each class
represent an interest in the same portfolio of investments of the Fund and have
equal rights to voting, redemptions, dividends, and liquidation, except that
certain expenses subject to the approval of the Trustees, may be applied
differently to each class of shares in accordance with current regulations of
the Securities and Exchange Commission and the Internal Revenue Service.
Shareholders of a class which bears distribution/service expenses under terms of
a distribution plan, have exclusive voting rights to such distribution plan.
There were no Class B shares outstanding during the period ended January 31,
1995.Significant accounting policies of the Fund are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio are valued on the
basis of market quotations, valuations provided by independent pricing sources
or, at fair value as determined in good faith in accordance with procedures
approved by the Trustees. Short-term debt investments maturing within 60 days or
less are valued at amortized cost, which approximates market value.
JOINT REPURCHASE AGREEMENT Pursuant to an exemptive order issued by the
Securities and Exchange Commission, the Fund, along with other registered
investment companies having a management contract with John Hancock Advisers,
Inc. (the "Adviser"), a wholly-owned subsidiary of The Berkeley Financial Group,
may participate in a joint repurchase agreement transaction. Aggregate cash
balances are invested in one or more large repurchase agreements, whose
underlying securities are obligations of the U.S. government and/or its
agencies. The Fund's custodian bank receives delivery of the underlying
securities for the joint account on the Fund's behalf. The Adviser is
responsible for ensuring that the agreement is fully collateralized at all
times.
INVESTMENT TRANSACTIONS Investment transactions are recorded as of the date of
purchase, sale or maturity. Net realized gains and losses on sales of
investments are determined on the identified cost basis.
FEDERAL INCOME TAXES The Fund's policy is to comply with the requirements of the
Internal Revenue Code that are applicable to regulated investment companies and
to distribute all of its taxable income, including any net realized gain on
investment, to its shareholders. Therefore, no federal income tax provision is
required.
DIVIDENDS, DISTRIBUTIONS AND INTEREST Dividend income on investment securities
is recorded on the ex-dividend date, or, in the case of some foreign securities,
on the date thereafter when the Fund is made aware of the dividend. Interest
income on investment securities is recorded on the accrual basis.
The Fund records all distributions to shareholders from net investment
income and realized gains on the ex-dividend date. Such distributions are
determined in conformity with income tax regulations, which may differ from
generally accepted accounting principals. Dividends paid by the Fund with
respect to each class of shares will be calculated in the same manner, at the
same time and will be in the same amount, except for the effect of expenses that
may be applied differently to each class as explained previously.
8
<PAGE> 76
NOTES TO FINANCIAL STATEMENTS
EXPENSES The majority of the expenses of the Trust are directly identifiable to
an individual Fund. Expenses which are not identifiable to a specific Fund are
allocated in such a manner as deemed equitable, taking into consideration, among
other things, the nature and type of expense and the relative sizes of the
Funds.
FOREIGN CURRENCY TRANSLATION All assets or liabilities initially expressed in
terms of foreign currencies are translated into U.S. dollars based on London
currency exchange quotations as of 5:00 p.m., London time, on the date of any
determination of the net asset value of the Fund. Transactions affecting
statement of operations accounts and net realized gain/(loss) on investments are
translated at the rates prevailing at the dates of the transactions.
The Fund does not isolate that portion of the results of operations
resulting from changes in foreign exchange rates on investments from the
fluctuations arising from changes in market prices of securities held. Such
fluctuations are included with the net realized and unrealized gain or loss from
investments.
Reported net realized foreign exchange gains or losses arise from sales of
foreign currency, currency gains or losses realized between the trade and
settlement dates on securities transactions and the difference between the
amounts of dividends, interest, and foreign withholding taxes recorded on the
Fund's books and the U.S. dollar equivalent of the amounts actually received or
paid. Net unrealized foreign exchange gains and losses arise from changes in the
value of assets and liabilities other than investments in securities at fiscal
year end, resulting from changes in the exchange rate.
CLASS ALLOCATIONS Income, common expenses and realized and unrealized gains
(losses) are calculated at the Fund level and allocated daily to each class of
shares based on the appropriate net assets of the respective classes. Transfer
agent expenses and distribution/service fees, if any, are calculated daily at
the class level based on the appropriate net assets of each class and the
specific expense rate(s) applicable to each class. DISCOUNT ON SECURITIES The
Fund accretes discount from par value on securities purchased from either the
date of issue or the date of purchase over the life of the security, as required
by the Internal Revenue Code.
NOTE B --
MANAGEMENT FEE AND TRANSACTIONS WITH AFFILIATES AND OTHERS
Under the present investment mamagement contract, the Fund pays a monthly
management fee to the Adviser for a continuous investment program equivalent, on
an annual basis, to the sum of (a) 0.80% of the first $250,000,000 of the Fund's
average daily net asset value and (b) 0.70% of the Fund's average daily net
asset value in excess of $250,000,000.
In the event normal operating expenses of the Fund, exclusive of certain
expenses prescribed by state law, are in excess of the most restrictive state
limit where the Fund is registered to sell shares of beneficial interest, the
fee payable to the Adviser will be reduced to the extent of such excess, and the
Adviser will make additional arrangements necessary to eliminate any remaining
excess expenses. The current limits are 2.5% of the first $30,000,000 of the
Fund's average daily net asset value, 2.0% of the next $70,000,000, and 1.5% of
the remaining average daily net asset value.
The Adviser has voluntarily agreed to limit Fund expenses, including the
management fee (but not including the transfer agent fee and the 12b-1 fee), to
0.90% of the Fund's daily net assets. Accordingly, the reduction in the
Adviser's fee amounted to $10,854 for the period ended January 31, 1995. The
Adviser reserves the right to terminate this voluntary limit in the future.
9
<PAGE> 77
NOTES TO FINANCIAL STATEMENTS
The Fund has a distribution agreement with John Hancock Funds, Inc. ("JH
Funds"), a wholly-owned subsidiary of the Adviser. For the period ended January
31, 1995, JH Funds received net sales charges of $2 which was paid as sales
commissions to sales personnel of unrelated broker-dealers.
Class B shares which are redeemed within six years of purchase will be
subject to a contingent deferred sales charge ("CDSC") at declining rates
beginning at 5.0% of the lesser of the current market value at the time of
redemption or the original purchase cost of the shares being redeemed. Proceeds
from CDSC are paid to Broker Services and are used in whole or in part to defray
its expenses related to providing distribution related services to the Fund in
connection with the sale of Class B shares. For the period ended January 31,
1995, contingent deferred sales charges received by JH Funds amounted to none.
In addition, to compensate JH Funds for the services it provides as
distributor of shares of the Fund, the Fund has adopted Distribution Plans with
respect to Class A and Class B pursuant to Rule 12b-1 under the Investment
Company Act of 1940. Accordingly, the Fund will make payments to JH Funds, for
distribution and service expenses which, in total, will not exceed on an annual
basis 0.30% of the Fund's average daily net assets attributable to Class A
shares and 1.00% of the Fund's average daily net assets attributable to Class B
shares, to reimburse JH Funds for its distribution/service costs. Up to a
maximum of 0.25% of such payments may be service fees as defined by the amended
Rules of Fair Practice of the National Association of Securities Dealers, which
became effective July 7, 1993. Under the amended Rules of Fair Practice,
curtailment of a portion of the Fund's 12b-1 payments could occur under certain
circumstances.
The Fund has a transfer agent agreement with John Hancock Investor
Services, Corp. ("Investor Services"), a wholly-owned subsidiary of The Berkeley
Financial Group. The Fund pays a monthly transfer agent fee equivalent, on an
annual basis to 0.40% and 0.42% of the Fund's average daily net asset value of
Class A and Class B shares of the Fund, respectively, plus out of pocket
expenses incurred by Investor Services on behalf of the Fund for proxy mailings.
Effective January 1, 1995, Class A and Class B shares will pay transfer agent
fees based on transaction volume and the number of shareholder accounts.
Messrs. Edward J. Boudreau, Jr. and Richard S. Scipione are directors
and/or officers of the Adviser, and/or its affiliates, as well as Trustees of
the Fund. The compensation of unaffiliated Trustees is borne by the Fund.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than short-term
securities, during the period ended January 31, 1995, aggregated $439,015 and
$26,822, respectively.
The cost of investments owned at January 31, 1995 (including the joint
repurchase agreement) for federal income tax purposes was $557,565. Gross
unrealized appreciation and depreciation of investments aggregated $6,684 and
$5,486, respectively, resulting in net unrealized appreciation of $1,198.
10
<PAGE> 78
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements included in the Registration Statement:
John Hancock World Trust--
John Hancock Global Retail Fund
(Unaudited)
Statement of Assets and Liabilities for the period ended January 31, 1995
Statement of Operations of the period ended January 31, 1995
Statement of changes in Net Assets for the period ended January 31, 1995
Notes to Financial Statements
Schedule of Investments for the period January 31, 1995
John Hancock Global Rx Fund
Not Applicable
John Hancock Pacific Basin Equities Fund
Not Applicable
(b) Exhibits:
The exhibits to this Registration Statement are listed in the Exhibits
Index hereto and are incorporated herein by reference.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
No person is directly or indirectly controlled by or under common control
with Registrant.
C-1
<PAGE> 79
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of February 28, 1995, the number of record holders of shares of
Registrant was as follows:
<TABLE>
<CAPTION>
Number of Record
Series Title of Class Holders
------ -------------- ------------------
(Shares of Beneficial Interest, without par value)
<S> <C> <C>
John Hancock Pacific Basin Equities Class A 6,854
Fund Class B 2,300
Class C 0
John Hancock Global Rx Fund Class A 3,267
Class B 571
John Hancock Global Retail Fund Class A 18
</TABLE>
ITEM 27. INDEMNIFICATION
(a) Under Registrant's Declaration of Trust. Sections 4.1, 4.2 and 4.3
of Article VI of the Registrant's Amended and Restated Declaration of Trust
provide for indemnification of the Registrant's Trustees and Officers under
certain circumstances. A copy of the Registrant's Amended and Restated
Declaration of Trust is attached as Exhibit 1 to this Post-Effective Amendment
No. 14 to the Registration Statement of the Registrant.
(b) Under the Distribution Agreement. Under Section 12 of the
Distribution Agreement, John Hancock Funds, Inc. ("John Hancock Funds" ) has
agreed to indemnify the Registrant and its Trustees, officers and controlling
persons against claims arising out of certain acts and statements of John
Hancock Funds.
C-2
<PAGE> 80
Section 9(a) of the By-Laws of the Insurance Company provides, in effect,
that the Insurance Company will, subject to limitations of law, indemnify each
present and former director, officer and employee of the of the Insurance
Company who serves as a Trustee or officer of the Registrant at the direction or
request of the Insurance Company against litigation expenses and liabilities
incurred while acting as such, except that such indemnification does not cover
any expense or liability incurred or imposed in connection with any matter as to
which such person shall be finally adjudicated not to have acted in good faith
in the reasonable belief that his action was in the best interests of the
Insurance Company. In addition, no such person will be indemnified by the
Insurance Company in respect of any liability or expense incurred in connection
with any matter settled without final adjudication unless such settlement shall
have been approved as in the best interests of the Insurance Company either by
vote of the Board of Directors at a meeting composed of directors who have no
interest in the outcome of such vote, or by vote of the policyholders. The
Insurance Company may pay expenses incurred in defending an action or claim in
advance of its final disposition, but only upon receipt of an undertaking by the
person indemnified to repay such payment if he should be determined to be
entitled to indemnification.
Article IX of the respective By-Laws of John Hancock Funds and the Adviser
provide as follows:
"Section 9.01. Indemnity: Any person made or threatened to be made a party to
any action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was at any time since the
inception of the Corporation a serving at the request of the Corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall be indemnified by the Corporation
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and the liability was not
incurred by reason of gross negligence or reckless disregard of the duties
involved in the conduct of his office, and expenses in connection therewith may
be advanced by the Corporation, all to the full extent authorized by the law."
"Section 9.02. Not Exclusive; Survival of Rights: The indemnification provided
by Section 9.01 shall not be deemed exclusive of any other right to which those
indemnified may be entitled, and shall continue as to a person who has ceased to
be a director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such as person."
Insofar as indemnification for liabilities under the Securities Act of 1933 (the
"Act") may be permitted to Trustees, officers and controlling persons of
Registrant pursuant to the Registrant's Amended and Restated Articles of
Incorporation, Article 10.1 of the Registrant's By-Laws, The underwriting
Agreement, the By-Laws of Distributors, the Adviser, or the Insurance Company or
otherwise, Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against policy as expressed in the
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such Trustee, officer or controlling person in connection with the
securities being registered, Registrant will,
C-3
<PAGE> 81
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
ITEM 28. Business and Other Connections of Investment Advisers
For information as to the business, profession, vocation or employment
of a substantial nature of each of the officers and Directors of the Investment
Adviser, reference is made to Forms ADV (801-8124) filed under the Investment
Advisers Act of 1940, herein incorporated by reference.
(b) Subadviser
Registrant's subadvisers, John Hancock Advisers International
Limited ("JHAIL"), 34 Dover Street, WIX 3RA, London, England and Indosuez Asia
Advisers Limited ("Indosuez "), Suite 2606-2608, One Exchange Square, Central,
Hong Kong, also acts as investment adviser to other Investment Company clients.
Information pertaining to the officers and directors of JHAIL and Indosuez and
their affiliations is set forth in the Form ADV of JHAIL (File No. 801-29498)
and Indosuez (File No. 801-45773 which are hereby incorporated by reference.
ITEM 29.
Principal Underwriters
(a) John Hancock Funds acts as principal underwriter for
the Registrant and also serves as principal underwriter or
distributor of shares for John Hancock Cash Reserve, Inc., John
Hancock Bond Fund, John Hancock Capital Growth Fund, John Hancock
Current Interest, John Hancock Series, Inc., John Hancock Tax-Free
Bond Fund, John Hancock California Tax-Free Income Fund, John Hancock
Capital Series, John Hancock Limited Term Government Fund, John
Hancock Tax-Exempt Fund, John Hancock Sovereign Investors Fund, Inc.,
John Hancock Cash Management Fund, John Hancock Special Equities Fund,
John Hancock Sovereign Bond Fund, John Hancock Tax-Exempt Series Fund,
John Hancock Strategic Series, John Hancock Technology Series, Inc.
and John Hancock World Fund, John Hancock Freedom Investment Trust,
John Hancock Freedom Investment Trust II and John Hancock Freedom
Investment Trust III.
(b) The following table lists, for each director and officer of
John Hancock Funds, the information indicated.
C-4
<PAGE> 82
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
-------------------- ---------------------- -----------------------
<S> <C> <C>
Edward J. Boudreau, Jr. Chairman Chairman
101 Huntington Avenue
Boston, Massachusetts
Robert H. Watts Director and Senior None
101 Huntington Avenue Vice President
Boston, Massachusetts
C. Troy Shaver, Jr. Director, President, Chief None
101 Huntington Avenue Executive Officer and
Boston, Massachusetts
Robert G. Freedman Director Vice Chairman, Chief
101 Huntington Avenue Investment Officer
Boston, Massachusetts
James W. McLaughlin Senior Vice President and Chief None
101 Huntington Avenue Financial Officer
Boston, Massachusetts
William S. Nichols Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts
Stephen M. Blair Executive Vice President None
101 Huntington Avenue
Boston, Massachusetts
James V. Bowhers Executive Vice President None
101 Huntington Avenue
Boston, Massachusetts
Thomas H. Drohan Senior Vice President Senior Vice President and
101 Huntington Avenue Secretary
Boston, Massachusetts
</TABLE>
C-5
<PAGE> 83
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
------------------ ----------------------- ------------------------
<S> <C> <C>
David A. King Director, Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts
James B. Little Senior Vice President Senior Vice President and Chief
101 Huntington Avenue Financial Officer
Boston, Massachusetts
John A. Morin Vice President Vice President
101 Huntington Avenue
Boston, Massachusetts
Susan S. Newton Secretary Vice President, Assistant
101 Huntington Avenue Secretary and Compliance
Boston, Massachusetts Officer
Christopher M. Meyer Treasurer None
101 Huntington Avenue
Boston, Massachusetts
Hugh A. Dunlap, Jr. Director None
101 Huntington Avenue
Boston, Massachusetts
Stephen L. Brown Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Foster L. Aborn Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Thomas E. Moloney Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Jeanne M. Livermore Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
</TABLE>
C-6
<PAGE> 84
<TABLE>
<CAPTION>
NAME AND PRINCIPAL POSITIONS AND OFFICES POSITIONS AND OFFICES
BUSINESS ADDRESS WITH UNDERWRITER WITH REGISTRANT
------------------ ---------------------- -----------------------
<S> <C> <C>
Richard S. Scipione Director Trustee
John Hancock Place
P.O. Box 111
Boston, Massachusetts
John Goldsmith Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
Richard O. Hansen Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
John M. DeCiccio Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
William C. Fletcher Director None
53 State Street
Boston, Massachusetts
</TABLE>
(c) None.
ITEM 30. Location of Accounts and Records
Registrant maintains the records required to be maintained by it under Rules
31a-1 (a), 31a-a(b), and 31a-2(a) under the Investment Company Act of 1940 as
its principal executive offices at 101 Huntington Avenue, Boston Massachusetts
02199-7603. Certain records, including records relating to Registrant's
shareholders and the physical possession of its securities, may be maintained
pursuant to Rule 31a-3 at the main office of Registrant's Transfer Agent and
Custodian.
ITEM 31. Management Services
Not applicable.
ITEM 32. Undertakings
(a) Not applicable.
(b) Not applicable
(c) The Registrant on behalf of each of its each of its series
undertakes to furnish each person to whom a prospectus is delivered with a copy
of such series' annual report to shareholders, upon request and without charge.
C-7
<PAGE> 85
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the Registrant has duly caused this Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized, in the City of Boston, and the
Commonwealth of Massachusetts on the 16th day of March, 1995.
JOHN HANCOCK WORLD FUND
By:____________________________________
Edward J. Boudreau, Jr.*,Chairman
Pursuant to the requirements of the Securities Act of 1933, the
Registration has been signed below by the following persons in the capacities
and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
________________________ Chairman
Edward J. Boudreau, Jr.* (Principal Executive Officer)
James B. Little
- ---------------
James B. Little Senior Vice President and Chief March 16, 1995
Financial Officer (Principal
Financial and Accounting Officer)
________________________ Trustee
Dennis S. Aronowitz*
________________________ Trustee
Richard P. Chapman, Jr.*
________________________ Trustee
William J. Cosgrove*
________________________ Trustee
Gail D. Fosler*
________________________ Trustee
Bayard Henry*
________________________ Trustee
Richard S. Scipione*
________________________ Trustee
Edward J. Spellman*
*By: Thomas H. Drohan March 16, 1995
----------------
Thomas H. Drohan
</TABLE>
C-8
<PAGE> 86
EXHIBIT INDEX
The exhibits listed below which are marked by an asterisk (*) have
previously been filed with the Commission as indicated and are incorporated
herein by reference.
Exhibit Description
Exhibit No.
1* Amended and Restated Declaration of Trust (filed, Post-Effective
Amendment No. 14 )
1a* Instrument Establishing and Designating of Class A Shares and
Class B Shares of Beneficial Interest of the Registrant (file,
Post-Effective Amendment No. 14)
2* By-Laws of Registrant (filed, Registration Statement)
2a* Amended and Restated By-Laws of the Registrant (filed,
Post-Effective Amendment No. 14)
4* Form of Certificate for Shares of Beneficial Interest in the World
Bond Portfolio (filed, Pre-Effective Amendment No. 1)
4a* Form of Certificate representing shares of beneficial interest in
the Pacific Basin Equities Portfolio (filed, Pre-Effective Amendment
No. 1)
4b* Certificate representing shares of beneficial interest in the John
Hancock Global Rx Fund.
5* Form of Investment Management Contract between Registrant and
John Hancock Advisers, Inc. (filed, Registration Statement)
5a* Form of Sub-Investment Management Contract between Registrant,
John Hancock Advisers, Inc. and John Hancock Advisers
International, Limited (filed, Post-Effective Amendment No. 1)
5b* Form of Investment Management Contract between John Hancock Global
Rx and John Hancock Advisers, Inc. (filed, Post-Effective Amendment
No. 4)
5c* Investment Management Contract between the John Hancock Global Rx
Fund and John Hancock Advisers, Inc. (filed, Post-Effective
Amendment No. 8)
<PAGE> 87
5d* Investment Management Contract between John Hancock Global Retail
Fund and John Hancock Advisers, Inc. (filed, Post-Effective
Amendment No. 14)
5e* Sub-Investment Management Contract between Registrant, John Hancock
Advisers, Inc. and Indosuez Asia Advisers, Ltd.
6* Form of Distribution Agreement between Registrant and John Hancock
Distributors, Inc. (filed, Registration Statement)
6a* Form of Selling Agreement between John Hancock Distributors, Inc.
and selected broker-dealers (filed, Pre-Effective Amendment No. 1)
6b* Form of Selling Agency Agreement between Registrant and John
Hancock Broker Distribution Services, Inc.
6c* Letter to John Hancock Broker Distribution Services, Inc giving
nature of John Hancock Global Retail Fund and its inclusion in the
Distribution Contract. (filed, Post-Effective Amendment No. 14)
8a* Master Custodian Agreement between Registrant and State Street
Bank and Trust Company (filed, Post-Effective Amendment No. 14)
8b* Letter to State Street Bank & Trust Company giving nature of
John Hancock giving nature of John Hancock Freedom Global Retail
Fund and its inclusion in the Custodian Agreement (filed, Post
Effective Amendment No. 14)
9* Form of Transfer Agency Agreement between Registrant and State
Street Bank and Trust Company (filed, Pre-Effective Amendment No. 1)
9a* Amendment to Transfer Agency Fee Schedule (filed, Post-Effective
Amendment No. 4)
9b* Transfer Agency Agreement between Registrant and John Hancock
Fund Services, Inc. (filed, Post-Effective Amendment No. 7)
9c* Letter to John Hancock Fund Services, Inc. giving notice of the
creation of John Hancock Global R/x Fund and its inclusion in the
Transfer Agreement. (filed, Post-Effective Amendment No. 8)
9d* Letter to John Hancock Fund Services, Inc. giving nature of John
Hancock Global Retail Fund and its inclusion in the Transfer
Agreement. (filed, Post-Effective Amendment No. 14)
<PAGE> 88
10* Opinion and consent of Debevoise & Plimpton (Pre-Effective
Amendment No. 1
11 None
13* Form of Subscription Agreement between Registrant and John Hancock
Advisers Inc. (filed, Registration Statement)
15* Form of Distribution Plan between Registrant and John Hancock
Distributors, Inc. (filed Pre-Effective Amendment No.1)
15a* Form of Distribution Plan between Registrant and John Hancock
Broker Distribution Services, Inc. (filed, Post-Effective Amendment
No. 7)
15b* Amendment to Distribution Plan between Registrant and John Hancock
Broker Distribution Services, Inc. (filed, Post-Effective Amendment
No. 8)
15c* Amended and Restated Distribution Plans between John Hancock
Freedom Global R/x Fund, John Hancock Freedom Pacific Basin
Equities Fund and John Hancock Broker Distribution Services, Inc.
(filed, Post Effective Amendment No. 12).
15d* Class A Distribution Plan between John Hancock Freedom Pacific
Basin Equities Fund and John Hancock Broker Distribution Services,
Inc. (filed, Post-Effective Amendment No. 13
15e* Class B Distribution Plan between John Hancock Freedom Pacific
Basin Equities Fund and John Hancock Broker Distribution Services,
Inc. (filed, Post-Effective Amendment No. 13
15f* Class A Distribution Plan between John Hancock Freedom Global Rx
Fund and John Hancock Broker Distribution Services, Inc. (filed,
Post-Effective Amendment No. 13
15g* Class B Distribution Plan between John Hancock Freedom Globa Rx Fund
and John Hancock Broker Distribution Services, Inc. (filed,
Post-Effective Amendment No. 13
15h* Class A Distribution Plan between John Hancock Global Retail Fund
and John Hancock Broker Distribution Services, Inc. (filed,
Post-Effective Amendment No. 14)
<PAGE> 89
15i* Class B Distribution Plan between John Hancock Global Retail
Fund and John Hancock Broker Distribution Services, Inc. (filed,
Post-Effective Amendment No. 14)
16* Schedules for computation of total return for period. (filed,
Post-Effective Amendment No. 6.)
