<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 26, 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. 18 /X/
AND/OR
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 18
(Check appropriate box or boxes)
------------------------
JOHN HANCOCK WORLD FUND
(Exact name of Registration 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 JANUARY 1, 1996 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.
REGISTRANT FILED THE NOTICE REQUIRED BY RULE 24F-2 FOR ITS FISCAL YEAR ENDED
AUGUST 31, 1995 ON OR ABOUT OCTOBER 20, 1995.
===============================================================================
<PAGE> 2
<PAGE> 2
<TABLE>
CROSS REFERENCE SHEET
Pursuant to Rule 495(b) under the Securities Act of 1933
<CAPTION>
Item Number Statement of Additional
Form N-1A Part A Prospectus Caption Information Caption
---------------- ------------------ -------------------
<S> <C> <C>
1 Front Cover Page *
2 Expense Information; *
The Fund's Expenses;
Shares Price;
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
<PAGE> 3
<TABLE>
<CAPTION>
Item Number Statement of Additional
Form N-1A Part A Prospectus Caption Information Caption
---------------- ------------------ -------------------
<S> <C> <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 * 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
PACIFIC BASIN
EQUITIES FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
JANUARY 1, 1996
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
The Fund's Financial Highlights....................................................... 3
Investment Objective and Policies..................................................... 4
Organization and Management of the Fund............................................... 7
Alternative Purchase Arrangements..................................................... 8
The Fund's Expenses................................................................... 10
Dividends and Taxes................................................................... 11
Performance........................................................................... 12
How to Buy Shares..................................................................... 13
Share Price........................................................................... 14
How to Redeem Shares.................................................................. 20
Additional Services and Programs...................................................... 21
</TABLE>
This Prospectus sets forth information about John Hancock Pacific Basin
Equities Fund (the "Fund"), as a diversified series of John Hancock World Fund
(the "Trust"), that you should know before investing. Please read and retain it
for future reference.
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 January 1, 1996, and incorporated by reference
into this Prospectus, free of charge by writing or telephoning: John Hancock
Investor Services Corporation, P.O. Box 9116, Boston, Massachusetts 02205-9116,
1-800-225-5291 (1-800-554-6713 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 to understand the
various fees and expenses you will bear, directly or indirectly, when you
purchase Fund shares. The operating expenses included in the table and
hypothetical example below are based on actual fees and expenses for the Class A
and Class B shares of the Fund for the fiscal year ended August 31, 1995,
adjusted to reflect current fees and expenses. Actual fees and expenses may be
greater or less than those indicated.
<TABLE>
<CAPTION>
CLASS A CLASS B
SHARES SHARES
------- -------
<S> <C> <C>
SHAREHOLDER TRANSACTION EXPENSE
Maximum sales charge imposed on purchases (As a percentage of offering price).............................. 5.00% None
Maximum sales charge imposed on reinvested dividends....................................................... None None
Maximum deferred sales charge.............................................................................. None* 5.00%
Redemption fees+........................................................................................... None None
Exchange fee............................................................................................... None None
ANNUAL FUND OPERATING EXPENSES (As a percentage of average net assets)
Management fee............................................................................................. 0.80% 0.80%
12b-1 fee**................................................................................................ 0.30% 1.00%
Other expenses............................................................................................. 0.95% 0.95%
Total Fund operating expenses.............................................................................. 2.05% 2.75%
</TABLE>
* No sales charge is payable at the time of purchase on investments in Class A
shares of $1 million or more, but for these investments a contingent deferred
sales charge may be imposed, as described below under the caption "Share
Price," in the event of certain redemption transactions within one year of
purchase.
** The amount of the 12b-1 fee used to cover service expenses will be up to
0.25% of the Fund's average 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.
<TABLE>
<CAPTION>
EXAMPLE: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses for the indicated period of years on a hypothetical
$1,000 investment, assuming a 5% annual return:
Class A Shares.......................................................................... $70 $111 $155 $276
Class B Shares
-- Assuming complete redemption at end of period...................................... $78 $115 $165 $291
-- Assuming no redemption............................................................. $28 $ 85 $145 $291
</TABLE>
(This example should not be considered a representation of past or future
expenses; actual expenses may be greater or lesser than those shown.)
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.'s 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 Contracts."
2
<PAGE> 6
THE FUND'S FINANCIAL HIGHLIGHTS
The following financial highlights have been audited by the Fund's independent
accountants. Price Waterhouse LLP's report on the Fund's financial statements
and financial highlights for the year ended August 31, 1995 is included in the
Annual Report which is included in the Statement of Additional Information.
Further information about the performance of the Fund is contained in the Fund's
Annual Report to Shareholders which may be obtained free of charge by writing or
telephoning John Hancock Investor Services Corporation at the address or
telephone number listed on the front page of this Prospectus.
Selected data for each class of shares outstanding throughout each period
indicated is as follows:
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
------------------------------------------------------
1995 1994 1993 1992 1991 1990
---------- ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Class A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period......................... $15.88 $13.27 $ 8.87 $ 9.05 $10.34 $11.10
----- ------ ------ ------ ------ ------
Net Investment Income (Loss)................................. 0.02(a)(d) (0.10)(a) (0.11)(a) (0.07)(a) (0.01) (0.04)
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions............................... (1.24) 3.12 4.51 (0.11) (0.33) 0.11
----- ------ ------ ------ ------ ------
Total from Investment Operations............................. (1.22) 3.02 4.40 (0.18) (0.34) 0.07
----- ------ ------ ------ ------ ------
Less Distributions:
Dividends from Net Investment Income...................... -- -- -- -- -- --
Distributions from Net Realized Gain on Investments Sold
and Foreign Currency Transactions....................... (0.55) (0.41) -- -- (0.95) (0.83)
----- ------ ------ ------ ------ ------
Total Distributions.......................................... (0.55) (0.41) -- -- (0.95) (0.83)
----- ------ ------ ------ ------ ------
Net Asset Value, End of Period............................... $14.11 $15.88 $13.27 $ 8.87 $ 9.05 $10.34
======== ======= ======= ======= ======= =======
Total Investment Return at Net Asset Value................... (7.65%) 22.82% 49.61% (1.99%) (2.15%) (0.44%)
Total Adjusted Investment Return at Net Asset Value(c)(e).... -- -- 48.31% (5.57%) (5.19%) (2.86%)
------- ------- ------ -------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted).................... $37,417 $50,261 $14,568 $3,222 $4,065 $4,578
Ratio of Expenses to Average Net Assets+..................... 2.05% 2.43% 2.94% 2.73% 2.75% 2.45%
Ratio of Adjusted Expenses to Average Net Assets(c).......... -- -- 4.24% 6.31% 5.79% 4.89%
Ratio of Net Investment Income (Loss) to Average Net
Assets*..................................................... 0.13%(d) (0.66%) (0.98%) (0.82%) (0.06%) (0.28%)
Ratio of Adusted Net Investment Loss to Average Net
Assets(c)................................................... -- -- (2.28%) (4.40%) (3.10%) (2.70%)
Portfolio Turnover Rate...................................... 48% 68% 171% 179% 151% 154%
+Expense Reimburesment Per Share............................. -- -- $0.14 $0.31 $0.24 $0.31
------ ------ ------ ------
<CAPTION>
FOR THE PERIOD
SEPTEMBER 8, 1987
(COMMENCEMENT
OF OPERATIONS)
TO AUGUST 31,
1989 1988
------ -----------------
<S> <C> <C>
Class A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period......................... $ 9.61 $10.00
------ -----
Net Investment Income (Loss)................................. (0.02) 0.01
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions............................... 1.75 (0.37)
------ -----
Total from Investment Operations............................. 1.73 (0.36)
------ -----
Less Distributions:
Dividends from Net Investment Income...................... (0.01) (0.03)
Distributions from Net Realized Gain on Investments Sold
and Foreign Currency Transactions....................... (0.23) --
------ -----
Total Distributions.......................................... (0.24) (0.03)
------ -----
Net Asset Value, End of Period............................... $11.10 $ 9.61
====== ======
Total Investment Return at Net Asset Value................... 18.06% (3.61%)(b)
Total Adjusted Investment Return at Net Asset Value(c)(e).... 15.12% (8.05%)(b)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted).................... $5,116 $4,771
Ratio of Expenses to Average Net Assets+..................... 1.75% 1.75%*
Ratio of Adjusted Expenses to Average Net Assets(c).......... 4.69% 6.19%*
Ratio of Net Investment Income (Loss) to Average Net
Assets*..................................................... (0.15%) 0.04%
Ratio of Adusted Net Investment Loss to Average Net
Assets(c)................................................... (3.09%) (4.40%)
Portfolio Turnover Rate...................................... 227% 148%
+Expense Reimburesment Per Share............................. $0.39% $1.15%
------ ------
</TABLE>
<TABLE>
<CAPTION>
PERIOD
ENDED
YEAR ENDED AUGUST
AUGUST 31, 31,
1995 1994
---------- ------
<S> <C> <C>
Class B**
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period......................... $15.84 $15.11(b)
----- ------
Net Investment Loss.......................................... (0.09)(a) (0.09)(a)
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions............................... (1.24) 0.82
----- ------
Total from Investment Operations............................. (1.33) 0.73
----- ------
Less Distributions:
Distributions from Net Realized Gain on Investments Sold and
Foreign Currency Transactions............................... (0.55) --
Total Distributions.......................................... (0.55) --
Net Asset Value, End of Period............................... $13.96 $15.84
======= =======
Total Investment Return at Net Asset Value................... (8.38%) 4.83%(f)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted).................... $14,368 $9,480
Ratio of Expenses to Average Net Assets...................... 2.77% 3.00%*
Ratio of Net Investment Loss to Average Net Assets........... (0.66%) (1.40%)*
Portfolio Turnover Rate................................... 48% 68%
- ---------------
* On an annualized basis.
** Class B shares commenced operations on March 7, 1994.
(a) On average month end shares outstanding.
(b) Initial price at commencement of operations.
(c) On an unreimbursed basis without expense reduction.
(d) May not accord to amounts shown elsewhere in the financial statements due to
the timing of sales and repurchases of fund shares in relation to
fluctuating market values of the investments of the Fund.
(e) Unaudited.
(f) Not annualized.
</TABLE>
3
<PAGE> 7
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is to achieve long-term capital appreciation
through investment in a diversified portfolio of equity securities of issuers
located in countries of the Pacific Basin. Investments will consist of (1)
securities of companies traded principally on stock exchanges in Pacific Basin
countries, (2) securities of companies deriving at least 50% of their total
revenue from goods produced, sales made or services performed in the Pacific
Basin countries, (3) securities of companies that are organized under the laws
of Pacific Basin countries, which are publicly traded on recognized securities
exchanges outside these countries; and (4) securities of investment companies
and trusts that invest principally in the foregoing. The Fund seeks to increase
the value of shareholder investments, and any current income is incidental to
this objective.
- -------------------------------------------------------------------------------
THE FUND SEEKS LONG-TERM CAPITAL
APPRECIATION THROUGH A DIVERSIFIED
PORTFOLIO OF EQUITY SECURITIES OF ISSUERS
LOCATED IN PACIFIC BASIN COUNTRIES.
- -------------------------------------------------------------------------------
The Pacific Basin is defined as those countries bordering on the Pacific Ocean.
The principal Pacific Basin countries, in which the Fund's portfolio securities
are issued and traded, are Australia, Canada, China, Hong Kong, Indonesia,
Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan,
Thailand, Vietnam and the United States.
Under normal conditions, the Fund will invest at least 65% of its total assets
in Pacific Basin corporate common stock and other equity securities (consisting
of common stock, warrants and securities convertible into common stock). The
balance of the Fund's assets will be invested in (1) equity securities of
issuers located in Asian countries not in the Pacific Basin (including India,
Pakistan, Sri Lanka and Bangladesh) and (2) debt securities of U.S., Japanese,
Australian and New Zealand companies and governments and bank certificates of
deposit. All debt securities purchased by the Fund must be rated A or better by
Moody's Investors Service, Inc. or Standard & Poor's Ratings Group, or, if
unrated, of comparable quality in the judgment of the Fund's adviser. The value
of fixed income securities varies inversely with interest rates. The value of
convertible securities, while influenced by the level of interest rates, is also
affected by the changing value of the underlying common stock into which the
securities are convertible.
To maintain maximum investment flexibility, the Fund has not established any
limits on the allocation of investments among the Pacific Basin countries. When
the Fund's investment adviser, John Hancock Advisers, Inc. (the "Adviser"), and
the Fund's co-subadvisers, Indosuez Asia Advisers Limited and John Hancock
Advisers International Limited (the "Sub-Advisers"), believe that investment
conditions are unfavorable, they may temporarily reduce the proportion of assets
assigned to the Pacific Basin countries and invest a higher than normal
proportion in the debt and other securities described above.
Under normal conditions, up to 35% of the Fund's total assets may be held in
cash or investment grade short-term securities and repurchase agreements
(denominated in U.S. dollars) to meet anticipated redemptions of the Fund's
shares. When the Fund's Adviser or Sub-Advisers (collectively, the "Advisers")
believe it is appropriate to maintain a defensive position, any of the Advisers
may temporarily maintain all or any part of the Fund's assets in money market
instruments,
4
<PAGE> 8
including but not limited to, governmental obligations, certificates of deposit,
banker's acceptances, commercial paper and short-term corporate debt securities,
cash and repurchase agreements. Any of the foregoing, including cash, may be
denominated in U.S. or foreign currencies and may be obligations of foreign
issuers.
FOREIGN SECURITIES. The Fund may purchase foreign securities in the form of
American Depositary Receipts (ADRs), European Depositary Receipts (EDRs) or
other securities convertible into securities of corporations in which the Fund
is permitted to invest. Issuers of unsponsored ADRs are not required to disclose
material information in the United States, and therefore, there may not be a
correlation between that information and the market value of an unsponsored ADR.
Investments in foreign securities may involve risks not present in domestic
investments.
- -------------------------------------------------------------------------------
THE FUND MAY EMPLOY CERTAIN INVESTMENT
STRATEGIES TO HELP ACHIEVE ITS INVESTMENT
OBJECTIVE.
- -------------------------------------------------------------------------------
The Fund is not intended to be a comprehensive investment program. Its
investments will be subject to the market fluctuations and risks inherent in all
securities, and there is no assurance the Fund will always achieve its
investment objective.
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 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 hedging strategies might
reduce the risk of loss due to a decline in the value of the hedged foreign
currency, they may also limit any potential gain which might result from an
increase in the value of that currency.
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
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 the Fund's illiquid securities to not more than 15% of its net assets.
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 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.
5
<PAGE> 9
REPURCHASE AGREEMENTS, FORWARD COMMITMENTS AND WHEN-ISSUED SECURITIES. The Fund
may enter into repurchase agreements and may purchase securities on a forward
commitment or when-issued basis. In a repurchase agreement, the Fund buys a
security subject to the right and obligation to sell it back to the seller 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 and the Fund is delayed in 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 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.
INVESTMENT RESTRICTIONS. The Fund has adopted certain investment restrictions
which are detailed in the Statement of Additional Information, where they are
designated as fundamental or nonfundamental. The investment objective and
fundamental restrictions may not be changed without shareholder approval. All
other investment policies and restrictions are nonfundamental and can be changed
by a vote of the Trustees without shareholder approval. Portfolio turnover rates
of the Fund for recent years are shown in the section "The Fund's Financial
Highlights."
GLOBAL RISKS. Investments in foreign securities may involve certain risks not
present in domestic securities, due to exchange controls, less publicly
available information, more volatile or less liquid securities markets, and the
possibility of expropriation, confiscatory taxation or political, economic or
social instability. There may be difficulty in enforcing legal rights outside
the United States. Some foreign companies are not subject to the same uniform
financial reporting requirements, accounting standards and government
supervision as domestic companies, and foreign exchange markets are regulated
differently from the U.S. stock market. 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. Finally, the expense ratios of
international funds generally are higher than those of domestic funds because
there are greater costs associated with maintaining custody of foreign
securities, and the increased research necessary for international investing
results in a higher advisory fee.
- -------------------------------------------------------------------------------
INVESTMENTS IN FOREIGN SECURITIES MAY
INVOLVE RISKS AND CONSIDERATIONS THAT ARE
NOT PRESENT IN DOMESTIC INVESTMENTS.
- -------------------------------------------------------------------------------
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
6
<PAGE> 10
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 predominantly 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.
When choosing brokerage firms to carry out the Fund's transactions, the Advisers
give 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 established by the Trustees, the Advisers may place securities
transactions with brokers affiliated with the Advisers. 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, the ("Life Company") which in turn indirectly owns the Adviser. Also
included is W. I. Carr Group, a British brokerage firm specializing in Asian
securities, which is directly owned by Banque Indosuez, the indirect parent of
Indosuez Asia Advisers Limited.
- -------------------------------------------------------------------------------
BROKERS ARE CHOSEN BASED ON BEST PRICE AND
EXECUTION.
- -------------------------------------------------------------------------------
ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is a separate, diversified portfolio of the Trust, an open-end
management investment company organized as a Massachusetts business trust in
1986. On October 1, 1992, the Fund changed its name from John Hancock World Fund
- -- Pacific Basin Equities Portfolio. The Trust's Declaration of Trust permits
the Trustees to create and classify shares of beneficial interest into separate
series of the Trust with different investment objectives. The Trustees may also
classify or reclassify any series into one or more classes. Accordingly, the
Trustees have authorized the issuance of two classes of shares of the Fund,
designated as Class A shares and Class B. 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 fees, and Class A and Class B shareholders
have exclusive voting rights with respect to their distribution plans.
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
The Fund is not required to hold annual shareholder meetings, 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.
7
<PAGE> 11
The Adviser was organized in 1968 and is a wholly-owned indirect subsidiary of
the Life 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 Advisers
International Limited, one of the Fund's Sub-Advisers, was formed in 1987, as a
wholly-owned subsidiary of the Adviser providing international investment
research and advisory services to institutional clients. Indosuez Asia Advisers
Limited, formed in 1994, is a wholly-owned subsidiary of Indosuez Asset
Management Asia Limited, which is based in Hong Kong and provides investment
management research and advisory services to international clients. Both of
these organizations are wholly-owned indirect subsidiaries of Compagnie de Suez,
one of the largest financial and industrial groups in Europe, with over $150
billion in assets worldwide at December 31, 1993. The Adviser is solely
responsible for advising the Fund with respect to investments in the U.S. and
Canada. The Sub-Advisers provide advice to the Fund with respect to investments
in countries other than the U.S. and Canada, subject to the review of the
Trustees and the over-all supervision of the Adviser. John Hancock Funds, Inc.
("John Hancock Funds") distributes shares for all of the John Hancock mutual
funds through selected broker-dealers ("Selling Brokers"). Certain Fund 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 A TOTAL VALUE
OF MORE THAN $16 BILLION.
- -------------------------------------------------------------------------------
The Fund is managed by the Advisers' international equities team. All investment
decisions are made by the portfolio management team, and no single person is
primarily responsible for making recommendations to the team.
In order to avoid conflicts with portfolio trades for the Fund, the Adviser, the
Sub-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. A Sub-adviser's
restrictions may differ where appropriate, as long as they maintain the same
intent. These restrictions are a continuation of the basic principle that the
interests of the Fund and its share-
holders 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 (the "Contingent Deferred
Sales Charge Alternative," Class B Shares). If you do not specify on your
account application the class of shares you are purchasing, it will be assumed
that you are investing in Class A shares.
- -------------------------------------------------------------------------------
AN ALTERNATIVE PURCHASE PLAN ALLOWS YOU TO
CHOOSE THE METHOD OF PAYMENT THAT IS BEST
FOR YOU.
- -------------------------------------------------------------------------------
8
<PAGE> 12
CLASS A SHARES. If you elect to purchase Class A shares, you will incur an
initial sales charge unless the amount you 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 of
your dollars to work from the time you make your investment, but the higher
ongoing distribution fee will cause these shares to have higher expenses than
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 Investor Services or the Life Company that had 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 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.
9
<PAGE> 13
Alternatively, you might determine that it is more advantageous to purchase
Class B shares to have all of your funds invested initially. However, you will
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 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 from 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. They will also be in the same
amount, except for differences resulting from each class bearing 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 for the 1995 fiscal year was 0.80% of the Fund's average daily net
assets. The investment management fee paid by the Fund is higher than the fee
paid by most mutual funds, but is believed to be comparable to the fee paid by
similar funds which invest primarily in international securities.
The Adviser pays the Sub-Advisers a portion of its fee. The Fund is not
responsible for payment of the Sub-Advisers' fees.
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 it makes or expenses it
incurs under the Class A Plan, these expenses will not be carried beyond one
year from the date they were incurred.
- -------------------------------------------------------------------------------
THE FUND PAYS DISTRIBUTION AND SERVICE
FEES FOR MARKETING AND SALES-RELATED
SHAREHOLDER SERVICING.
- -------------------------------------------------------------------------------
10
<PAGE> 14
These unreimbursed expenses under the Class B Plan will be carried forward
together with interest on the balance of these unreimbursed expenses. For the
fiscal year ended August 31, 1995 an aggregate of $157,807 of distribution
expenses or 0.2% of the average net assets of the Class B shares of the Fund,
was not reimbursed or recovered by the John Hancock Funds through the receipt
of deferred sales charges or 12b-1 fees in prior periods.
Information of the Fund's total expenses is in the Fund's Financial Highlights
section of the prospectus.
DIVIDENDS AND TAXES
Dividends from the Fund's net investment income are declared and paid annually.
Short-term and long-term capital gains, if any, are generally distributed
annually. Dividends are reinvested in additional shares of your class unless you
elect the option to receive them 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 shares, any dividends on these shares will be lower than those on the Class A
shares. See "Share Price."
TAXATION. Dividends from the Fund's net investment income and net short-term
capital gains are taxable to you as ordinary income. Dividends from the Fund's
net long-term capital gains are taxable as long-term capital gain. These
dividends are taxable whether received in cash or reinvested in additional
shares. Certain dividends may be paid in January of a given year, but they may
be taxable as if you received them the previous December. 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 has qualified and intends to continue 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 tax on any net investment income and net realized
capital gains that are distributed to its shareholders within the time period
prescribed by the Code. When you redeem (sell) or exchange shares, you may
realize a taxable gain or loss.
On the account application, you must certify that your social security or other
taxpayer identification number 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 and the proceeds of redemptions and exchanges.
The Fund anticipates that it will be subject to foreign withholding or other
foreign taxes on income (possibly including, in some cases, capital gains) on
certain of its foreign investments, which will reduce the yield from those
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
11
<PAGE> 15
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 adviser for specific advice.
PERFORMANCE
Total return shows the overall dollar or percentage change in value of a
hypothetical investment in the Fund, 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 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.
- -------------------------------------------------------------------------------
THE FUND MAY ADVERTISE ITS TOTAL RETURN.
- -------------------------------------------------------------------------------
Total return calculations for Class A shares generally include 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 the deduction
of the applicable CDSC 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 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's performance data. The value of the Fund's shares,
when redeemed, may be more or less than their original cost. Total return is a
historical calculation, and is not an indication of future performance. See
"Factors to Consider in Choosing an Alternative."
12
<PAGE> 16
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
OPENING AN ACCOUNT.
- -------------------------------------------------------------------------------
The minimum initial investment is $1,000 ($250 for group investments and
retirement plans). Complete the Account Application attached to this Prospectus.
Indicate whether you are purchasing Class A or Class B shares. If you do not
specify which class of shares you are purchasing, Investor Services will assume
that you are investing in Class A shares.
- --------------------------------------------------------------------------------
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation.
2. Deliver the completed application and check to your registered
representative, Selling Broker or mail it directly to Investor
Services.
- --------------------------------------------------------------------------------
BY WIRE 1. Obtain an account number by contacting your registered
representative or 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 Pacific Basin Equities 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, Selling Broker or mail it directly to Investor
Services.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES.
- -------------------------------------------------------------------------------
1. Complete the "Automatic Investing" and "Bank Information"
MONTHLY sections on the Account Privileges Application, designating
AUTOMATIC a bank account from which your funds may be drawn.
ACCUMULATION
PROGRAM 2. The amount you elect to invest will be automatically withdrawn
(MAAP) from your bank or credit union account.
- --------------------------------------------------------------------------------
BY 1. Complete the "Invest-By-Phone" and "Bank Information" sections
TELEPHONE on the Account Privileges Application designating a bank
account from which your funds may be drawn. Note that in order
to invest by phone, your account 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 name(s) 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 of shares you own, 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.
- --------------------------------------------------------------------------------
13
<PAGE> 17
- -------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES. (CONTINUED)
- -------------------------------------------------------------------------------
First Signature Bank & Trust John Hancock Deposit Account No. 900000260 ABA
Routing No. 211475000 For credit to: John Hancock Pacific Basin Equities Fund
(Class A or Class B shares) Your Account Number Name(s) under which account is
registered
- -------------------------------------------------------------------------------
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 based on the net asset value computed after John Hancock Funds receives
notification of the dollar equivalent from the Fund's 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. 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
according to procedures approved by the Trustees. Short-term debt investments
maturing within 60 days are valued at amortized cost which the Board of Trustees
has determined 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 believe 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.
14
<PAGE> 18
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 as follows:
<TABLE>
<CAPTION>
REALLOWANCE TO
COMBINED SELLING BROKERS
SALES CHARGE AS REALLOWANCE AS
AMOUNT INVESTED SALES CHARGE AS A PERCENTAGE OF AND SERVICE FEE AS A PERCENTAGE OF
(INCLUDING SALES A PERCENTAGE OF THE AMOUNT A PERCENTAGE OF THE OFFERING
CHARGE) OFFERING PRICE INVESTED OFFERING PRICE(+) 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%(***)
</TABLE>
- ---------------
(*) 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. A Selling Broker to whom substantially the entire sales charge is
reallowed may be deemed to be an underwriter under the Securities Act of
1933.
(**) 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 the first year's service fee
(as described in (+) below) to Selling Brokers who initiate and are
responsible for purchases 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.
Sales charges ARE NOT APPLIED to any dividends that are reinvested in additional
Class A shares of the Fund.
John Hancock Funds will pay certain affiliated Selling Brokers at an annual rate
of up to 0.05% of the daily net assets of 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."
15
<PAGE> 19
CONTINGENT DEFERRED SALES CHARGE -- INVESTMENTS OF $1 MILLION OR MORE IN CLASS A
SHARES. Purchases of $1 million or more of Class A shares will be made at net
asset value with no initial sales charge, but if the 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
charge will be imposed. The rate of the 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 the Life Company who were group annuity
contract holders as of September 1, 1994, and 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. However,
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 CDSC will be assessed on an amount equal to the lesser of the current market
value or the original purchase cost of the redeemed Class A shares. 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 Class A
shares.
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.
Therefore, it will be assumed that the redemption is first made from any shares
in your account that are not subject to the CDSC. The CDSC is waived on
redemptions in certain circumstances. See "Waiver of Contingent Deferred Sales
Charges" below.
QUALIFYING FOR A REDUCED SALES CHARGE. If you invest more than $50,000 in Class
A shares of the Fund or a 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 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:
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 funds you hold; 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."
- -------------------------------------------------------------------------------
YOU MAY QUALIFY FOR A REDUCED SALES CHARGE
ON YOUR INVESTMENT IN
CLASS A SHARES.
- -------------------------------------------------------------------------------
16
<PAGE> 20
EXAMPLE:
If you hold Class A shares of a John Hancock fund with a net asset value of
$20,000 and, subsequently, invest $30,000 in Class A shares of the Fund, the
sales charge on this subsequent investment would be 4.50% and not 5.00%. This is
the rate that would otherwise be applicable to investments of less than $50,000.
See "Initial Sales Charge Alternative--Class A Shares."
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.
- -------------------------------------------------------------------------------
CLASS A SHARES MAY BE AVAILABLE WITHOUT A
SALES CHARGE TO CERTAIN INDIVIDUALS
AND ORGANIZATIONS.
- -------------------------------------------------------------------------------
- - Any state, county, city or any instrumentality, department, authority, or
agency of these entities that 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, financial planner, consultant 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 or
services made available to their clients.
- - A former participant in an employee benefit plan with John Hancock Funds, when
he or she withdraws from his or her plan and transfers any or all of his or
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 by 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 entire 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. The 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.
17
<PAGE> 21
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
reinvestment of dividends or distributions, 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 Charge" 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> <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
them to defray its expenses related to providing the Fund with distribution
services in connection with the sale of the 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 an initial sales charge.
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
YEAR IN WHICH CLASS B SHARES CHARGE AS A PERCENTAGE OF
REDEEMED FOLLOWING PURCHASE DOLLAR AMOUNT 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.
18
<PAGE> 22
WAIVER OF CONTINGENT DEFERRED SALES CHARGES. 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 these 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 the waiver.
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. This will occur at the end of the month following eight years
after the shares were purchased, and will result 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 time you purchased the shares in the
original fund. The Fund has been advised that the conversion of Class B shares
to Class A
19
<PAGE> 23
shares should not be taxable for Federal income tax purposes, and should not
change your tax basis or tax holding period for the converted shares.
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 recently made by
check or Invest-by-Phone have been collected (which may take up to 10 calendar
days).
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 usually 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
three business days or longer, as permitted by Federal securities laws.
- --------------------------------------------------------------------------------
BY TELEPHONE All Fund shareholders are eligible automatically 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.
- --------------------------------------------------------------------------------
TO ASSURE ACCEPTANCE OF YOUR REDEMPTION REQUEST, PLEASE
FOLLOW THESE PROCEDURES.
- --------------------------------------------------------------------------------
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 according to 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 collectible after two business
days. Your bank may or may not charge a fee 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 included with 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.
- --------------------------------------------------------------------------------
20
<PAGE> 24
- -------------------------------------------------------------------------------
TYPE OF REGISTRATION REQUIREMENTS
Individual, Joint Tenants, Sole A letter of instruction signed (with titles
Proprietorship, Custodial where applicable) by all persons authorized
(Uniform Gifts or Transfer to to sign for the account, exactly as it is
Minors Act), General Partners registered with the signature(s) guaranteed.
Corporation, A letter of instruction and a corporate
Association 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(s) guaranteed.
(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.
- --------------------------------------------------------------------------------
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 the 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.
- -------------------------------------------------------------------------------
WHO MAY GUARANTEE YOUR SIGNATURE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
THROUGH YOUR BROKER. Your broker may be able to initiate the redemption.
Contact your broker for instructions.
- -------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT REDEMPTIONS.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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. You may not
redeem certificated shares 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
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 further purchases and
dividend reinvestments, if any, exceeds the number of shares redeemed,
repeated redemptions from a smaller account may eventually trigger this
policy.
- --------------------------------------------------------------------------------
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 FOR
SHARES OF THE SAME CLASS OF ANOTHER JOHN
HANCOCK FUND.
- -------------------------------------------------------------------------------
21
<PAGE> 25
Exchanges between funds 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 that are subject to a CDSC may be exchanged into
Class B shares of another John Hancock fund without incurring the CDSC; however,
these shares will be subject to the CDSC schedule of the shares acquired (except
that exchanges into John Hancock Short-Term Strategic Income Fund, John Hancock
Intermediate Maturity Government Fund and John Hancock Limited-Term Government
Fund 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
continue to be subject to the CDSC schedule in effect on your initial purchase
date.
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 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 of 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.
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 prior notice whenever it is reasonably
able to do so, it may impose these restrictions at any time.
22
<PAGE> 26
BY TELEPHONE
1. When you complete the application for your initial 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. 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
REINVESTMENT PRIVILEGE
1. You will not be subject to a sales charge on Class A shares that you reinvest
in John Hancock funds that is otherwise subject to a sales charge, as long as
you reinvest within 120 days from 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. The holding period of the shares
acquired through reinvestment for purposes of computing the CDSC payable upon
a subsequent redemption, will include the holding period of the redeemed
shares.
- -------------------------------------------------------------------------------
IF YOU REDEEM SHARES OF THE FUND, YOU MAY
BE ABLE TO REINVEST ALL OR PART OF 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 Fund shares or in shares
of 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.
23
<PAGE> 27
SYSTEMATIC WITHDRAWAL PLAN
1. You can elect the Systematic Withdrawal Plan at any time by completing the
Account Privileges Application which is attached to this Prospectus. You can
also obtain the application from your registered representative 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
annually or on a selected monthly basis to yourself or any other designated
payee.
- -------------------------------------------------------------------------------
YOU CAN PAY ROUTINE BILLS FROM YOUR
ACCOUNT, OR MAKE PERIODIC DISBURSEMENTS
FROM YOUR RETIREMENT ACCOUNT TO COMPLY
WITH IRS REGULATIONS.
- -------------------------------------------------------------------------------
4. There is no limit on the number of payees you may authorize, but all payments
must be made at the same time or intervals.
5. It is not advantageous to maintain a Systematic Withdrawal Plan concurrently
with purchases of additional Class A or Class B 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 can authorize an investment to be withdrawn automatically each month on
your bank, for investment in Fund shares, under the "Automatic Investing" and
"Bank Information" sections of the Account Privileges Application.
- -------------------------------------------------------------------------------
YOU CAN MAKE AUTOMATIC INVESTMENTS AND
SIMPLIFY YOUR INVESTING.
- -------------------------------------------------------------------------------
2. You can also authorize automatic investment through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.
3. You can 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.
24
<PAGE> 28
GROUP INVESTMENT PROGRAM
1. An individual account will be established for each participant, but the
initial 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 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 Section 457 Plans.
2. The initial investment minimum or aggregate minimum for any of these plans is
$250. However, accounts being established as group IRA, SEP, SARSEP, TSA,
401(k) and Section 457 Plans will be accepted without an initial minimum
investment.
25
<PAGE> 29
(NOTES)
<PAGE> 30
(NOTES)
<PAGE> 31
JOHN HANCOCK
PACIFIC BASIN EQUITIES FUND
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
INVESTMENT SUB-ADVISERS
John Hancock Advisers International
Limited
34 Dover Street
London, England W1X 3RA
Indosuez Asia Advisers Limited
Suite 2606-2608
One Exchange Square
Central
Hong Kong
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
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
Telephone Exchange
Investment-by-Phone call 1-800-225-5291
Telephone Redemption
For TDD call 1-800-554-6713
JOHN HANCOCK
PACIFIC BASIN
EQUITIES FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
JANUARY 1, 1996
FOR INVESTORS SEEKING
LONG-TERM CAPITAL
APPRECIATION THROUGH
INVESTMENT IN A DIVERSIFIED
PORTFOLIO CONSISTING
PRIMARILY OF EQUITY
SECURITIES OF ISSUERS LOCATED
IN COUNTRIES OF THE PACIFIC
BASIN.
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
TELEPHONE 1-800-225-5291
JHD-5800P 1/96 (LOGO) Printed on
Recycled Paper
<PAGE> 32
JOHN HANCOCK PACIFIC BASIN EQUITIES FUND
CLASS A AND CLASS B SHARES
STATEMENT OF
ADDITIONAL INFORMATION
JANUARY 1, 1996
This Statement of Additional Information provides information about John Hancock
Pacific Basin Equities Fund (the "Fund") in addition to the information that is
contained in the Fund's Class A and Class B Shares Prospectus, both dated
January 1, 1996, (the "Prospectus").
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 Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
1-800-225-5291
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Statement of Cross Referenced
Additional to Class A
Information and Class B
Page Prospectus Page
<S> <C> <C>
Organization of the Fund 2 7
Investment Objective and Policies 2 4
Certain Investment Practices 3 4
Investment Restrictions 6 --
Ratings 10 --
Those Responsible for Management 10 7
Investment Advisory and Other Services 16 8
Distribution Contract 19 --
Net Asset Value 20 14
Initial Sales Charge on Class A Shares 21 15
Deferred Sales Charge on Class B Shares 22 17
Special Redemptions 23 21
Additional Services and Programs 23 21
Description of the Fund's Shares 24 14
Tax Status 26 11
Calculation of Performance 30 12
Brokerage Allocation 31 7
Transfer Agent Services 33 Back Cover
Custody of Portfolio 33 Back Cover
</TABLE>
1
<PAGE> 33
<TABLE>
<S> <C>
Independent Auditors 33 Back Cover
Financial Statements -- --
</TABLE>
ORGANIZATION OF THE FUND
John Hancock Pacific Basin Equities Fund (the "Fund") is organized as a
separate, diversified portfolio of John Hancock World Fund (the "Trust"), an
open-end, management investment 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. On October 1,
1992, the Fund changed its name from John Hancock World Fund - Pacific Basin
Equities Portfolio to John Hancock Freedom Pacific Basin Equities Fund. As of
January 1, 1994, the word "Freedom" was deleted from the Fund's name. The
Adviser is an indirect, wholly-owned subsidiary of John Hancock Mutual Life
Insurance Company (the "Life Company"), a Massachusetts life insurance company
chartered in 1862, with national headquarters at John Hancock Place, Boston,
Massachusetts. The Adviser is solely responsible for advising the Fund with
respect to investments in the U.S. and Canada.
The Fund has two sub-advisers: Indosuez Asia Advisers Limited ("IAAL") and John
Hancock Advisers International Limited ("JHAI") together, the "Sub-Advisers".
IAAL is organized under the laws of Hong Kong and indirectly owned by Compagnie
de Suez and its subsidiary, Banque Indosuez through Banque Indosuez's
wholly-owned subsidiary, Indosuez Asset Management Asia Limited ("IAMA"). IAMA
is an experienced investment adviser for funds authorized to invest in the Asian
region, and investment personnel of IAAL also act as portfolio managers of IAMA
in connection with these Asian country funds. Together IAAL and JHAI, a London
based wholly owned subsidiary of the Adviser, are responsible for providing
advice to the Fund with respect to investments other than in the U.S. and
Canada, subject to the review of the Trustees and overall supervision of the
Adviser.
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is to achieve long-term capital appreciation
through investment in a diversified portfolio of equity securities of issuers
located in countries of the Pacific Basin. The principal Pacific Basin
countries, in which the Fund's securities are issued and traded, are Australia,
Canada, China, Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, the
Philippines, Singapore, Taiwan, Thailand, Vietnam and the United States. See
"Investment Objective and Policies" in the Prospectus. There can be no assurance
that the Fund will achieve its investment objective.
The portion of the Fund's assets to be allocated to each of the Pacific Basin
countries will be determined by the Trustees based on recommendations of the
Adviser, in consultation with the Sub-Advisers, as described under the caption
"Those Responsible for Management." In making this allocation recommendation,
the Adviser and the Sub-Advisers will consider several factors, including the
relative economic growth and potential of the various economies and securities
markets, expected levels of inflation, governmental policies influencing
business conditions, regulatory and tax considerations, the domestic and
international strength of the leading industrial sectors and currency stability
relative to the U.S.
2
<PAGE> 34
CERTAIN INVESTMENT PRACTICES
Portfolio Turnover. The Fund may effect portfolio transactions, without regard
to the holding periods (subject to certain tax restrictions for qualification as
a regulated investment company), if the Adviser and the Sub-Advisers deem it
appropriate to do so in view of a change in the financial or business operations
of a particular company or governmental issuer, or changes in a particular
market or the international market taken as a whole.
The Fund does not generally consider the length of time it has held a particular
security in making investment decisions. As described in the Fund's Prospectus,
under certain market conditions, the portfolio turnover rate could exceed 100%.
It is impossible to predict portfolio turnover rates. The portfolio turnover
rate for the Fund is calculated by dividing the lower of the Fund's annual sales
or purchases of portfolio securities (exclusive of purchases or sales of all
securities whose maturities at the time of acquisition were one year or less) by
the monthly average value of the securities in the portfolio during the year.
Depository Receipts. As discussed in the Prospectus, the Fund may invest in the
securities of foreign issuers in the form of American Depository Receipts
("ADRs"), European Depository Receipts ("EDRs") or other securities convertible
into securities of foreign issuers. These securities may not necessarily be
denominated in the same currency as the securities into which they may be
converted but rather in the currency of the market in which they are traded.
ADRs are receipts typically issued by an American bank or trust company which
evidence ownership of underlying securities issued by a foreign corporation.
EDRs are receipts issued in Europe by banks or depositories which evidence a
similar ownership arrangement. Generally, ADRs, in registered form, are designed
for use in U.S. securities markets and EDRs, in bearer form, are designed for
use in European securities markets.
Investments in Taiwan. Due to restrictions on direct investment in equity
securities of issuers located in Taiwan, the Fund will be required to invest in
the country only through a limited number of approved investment vehicles. At
present, investment in Taiwan is accomplished by investing in the securities of
listed and unlisted investment companies. INVESTMENT IN SUCH INVESTMENT
COMPANIES IS SUBJECT TO LIMITATIONS UNDER THE INVESTMENT COMPANY ACT OF 1940, AS
AMENDED (the "Investment Company Act"), AND MARKET AVAILABILITY AND MAY INVOLVE
THE PAYMENT OF SUBSTANTIAL PREMIUMS ABOVE THE VALUE OF SUCH COMPANIES' PORTFOLIO
SECURITIES. THE YIELD ON SUCH COMPANIES' SECURITIES WILL BE REDUCED BY THE
OPERATING EXPENSES OF SUCH COMPANIES. At such time as direct investment in
Taiwan is allowed, the Fund would anticipate investing directly in this market.
Under the Investment Company Act, the Fund may not purchase shares of any other
investment company if immediately thereafter the Fund would own more than 3% of
the total outstanding voting stock of such other investment company have
invested more than 5% of its assets in securities of such investment company
than 10% of its assets in securities of all investment companies. The Fund does
not intend to invest more than 10% of the value of its total assets at the time
of investment in unlisted equity securities, excluding unlisted securities of
investment.
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 also has authority to deal in forward foreign currency
3
<PAGE> 35
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. Transaction hedging is the purchase or sale of forward foreign
currency contracts with respect to specific receivables or payables of the Fund
accruing in connection with the purchase and sale of its portfolio securities
denominated in foreign currencies. Portfolio hedging is the use of forward
foreign currency contracts to offset portfolio security positions denominated or
quoted in such foreign currencies. The Fund may not engage in portfolio hedging
with respect to the currency of a particular country to an extent greater than
the aggregate market value (at the time of making such sale) of the securities
held in its portfolio denominated or quoted in that particular foreign currency.
The Fund will not attempt to hedge all of its foreign portfolio positions and
will enter into such transactions only to the extent, if any, deemed appropriate
by the Adviser and Sub-Advisers. The Fund will not engage in speculative forward
currency transactions.
If the Fund enters into a portfolio hedging transaction in a forward contract
requiring it to purchase a foreign currency, its custodian bank will segregate
cash or liquid, high grade debt securities 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 securities 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 rises. 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.
The U.S. Government has from time to time in the past imposed restrictions,
through taxation and otherwise, on foreign investments by U.S. investors such as
the Fund. If such restrictions should be reinstituted, it might become necessary
for the Fund to invest all or substantially all of its assets in U.S.
securities. In such event, the Fund would review its investment objectives and
investment policies to determine whether changes are appropriate.
The Fund's ability and decisions to purchase or sell portfolio securities may be
affected by laws or regulations relating to the convertibility and repatriation
of assets. Because the shares of the Fund are redeemable on a daily basis in
U.S. dollars, the Fund intends to manage its portfolio so as to give reasonable
assurance that it will be able to obtain U.S. dollars. Under present conditions,
it is not believed that these considerations will have any significant effect on
its portfolio strategy.
4
<PAGE> 36
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
liquid, high grade debt securities denominated in the currency of the purchased
security 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 securities 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 or a Sub-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 or a Sub-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 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
possible decline in the value of the underlying securities during the period in
which the Fund seeks to enforce its rights thereto, possible subnormal levels of
income and lack of access to income during this period, and the expense of
enforcing its rights.
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 may be
reduced. Since the Fund may invest in securities denominated in currencies other
than U.S. dollars, changes in foreign currency exchange rates may affect the
value of portfolio securities. 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.
5
<PAGE> 37
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 in foreign currencies, the value of
the assets of the Fund attributable to such investment as measured in U.S.
dollars, may be affected favorably or unfavorably by changes in the relationship
of the U.S. dollar to 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 three (3) 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 and the Sub-Advisers
monitor the settlement time for foreign securities and take undue settlement
delays into account in considering investment allocations to specific 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.
INVESTMENT RESTRICTIONS
Fundamental Investment Restrictions
The following investment restrictions will not be changed without approval of a
majority of the Fund's outstanding voting securities which, as used in the
Prospectuses and this Statement of Additional Information, means approval by the
lesser of (1) 67% or more of the Fund's shares represented at a meeting if at
least 50% of the Fund's outstanding shares are present in person or by proxy at
that meeting or (2) 50% of the Fund's outstanding shares.
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, issuance of shares of
beneficial interest in multiple classes or series, the purchase or sale of
options, futures contracts and options on futures contracts, and forward
foreign exchange contracts, forward commitments and repurchase agreements
entered into in accordance with the Fund's investment policies, and the
pledge, mortgage or hypothecation of the Fund's assets within the meaning
of paragraph (3) below, are not deemed to be senior securities.
6
<PAGE> 38
(2) Borrow money, except from banks as a temporary measure for
extraordinary emergency purposes in amounts not to exceed 33 1/3% of the
Fund's total assets (including the amount borrowed) taken at market value.
The Fund will not use leverage to attempt to increase income. The Fund will
not purchase securities while outstanding borrowings exceed 5% of the
Fund's total assets.
(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 or any interest therein, 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 (1) 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, (2) enter into repurchase agreements,
and (3) purchase all or a portion of an issue of publicly distributed debt
securities, bank loan participation interests, bank certificates of
deposits, bankers' 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 securities and securities indices,
futures contracts on securities and securities indices and options on such
futures, forward foreign exchange contracts, forward commitments,
securities index put or call warrants and repurchase agreements entered
into in accordance with the Fund's investment policies.
(8) Purchase the securities of issuers conducting their principal business
activity in the same industry if, immediately after such purchase, the
value of its investments in such industry would exceed 25% of its total
assets taken at market value at the time of each investment. This
limitation does not apply to investments in obligations of the U.S.
Government or any of its agencies or instrumentalities.
(9) 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.
7
<PAGE> 39
Non-Fundamental Investment Restrictions
The following restrictions are designated as non-fundamental and may be changed
by the Trustees without shareholder approval.
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 purchase of
marketable portfolio securities with other accounts under the management of
the Adviser or the Sub-Advisers to save commissions or to average prices
among them is not deemed to result in a joint securities trading account.
(b) Purchase securities on margin or make short sales, unless by virtue of
its ownership of other securities, the Fund has the right to obtain
securities equivalent in kind and amount to the securities sold and, if the
right is conditional, the sale is made upon the same conditions, except
that the Fund may obtain such short-term credits as may be necessary for
the clearance of purchases and sales of securities and in connection with
transactions involving forward foreign currency exchange contracts.
(c) 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 Sub-Advisers or any investment management subsidiary of the
Adviser or Sub-Advisers individually owns beneficially more than 0.5%, and
together own beneficially more than 5%, of the securities of such issuer.
(d) Purchase a security if, as a result, (a) more than 10% of the Fund's
assets would be invested in securities of investment companies, (b) such
purchase would result in more than 3% of the total outstanding voting
securities of any one such investment company being held by the Fund, or
(c) more than 5% of the Fund's assets would be invested in any one such
investment company provided, however, the Fund may not purchase a security
of a closed-end investment company unless such purchase is made in the open
market where no commission or profit to the sponsor or dealer results from
the purchase other than customary broker's commissions, except in
connection with a merger or other acquisition.
(e) 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 cause investments of the Fund
in all such issuers to exceed 5% of the value of the total assets of the
Fund.
(f) Invest for the purpose of exercising control over or management of any
company.
(g) 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.
8
<PAGE> 40
(h) 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.
(i) 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. (The staff of the Securities and Exchange Commission considers
over-the-counter options to be illiquid securities subject to the 15%
limit).
(j) 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 or investment
policies more restrictive than those described above. Should the Trustees
determine that any such more restrictive policy is no longer in the best
interests 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.
If a percentage restriction on investment or utilization of assets as set forth
above is adhered to at the time an investment is made, a later change in
percentage resulting from changes in the values of the Fund's assets will not be
considered a violation of the restriction.
Nothing in the foregoing investment restrictions shall be deemed to prohibit the
Fund from purchasing the securities of any issuer pursuant to the exercise of
subscription rights distributed to the Fund by the issuer, except that no such
purchase may be made if as a result, the Fund will no longer be a diversified
investment company as defined in the Investment Company Act or will fail to meet
the diversification requirements for a regulated investment company under the
Internal Revenue Code of 1986, as amended. Japanese corporations frequently
issue additional capital stock by means of subscription rights offerings to
existing shareholders at a price substantially below the market prices of the
shares. The failure to exercise such rights would result in the Fund's interest
in the issuing company being diluted. The market for such rights is not well
developed in all cases and, accordingly, the Fund may not always realize full
value on the sale of rights. Therefore, the exception applies in cases where the
limits set forth in the investment restrictions in the Prospectus would
otherwise be exceeded as a result of fluctuations in the market value of the
Fund's portfolio securities with the result that the Fund would be forced either
to sell securities at a time when it might not otherwise have done so, or to
forego exercising the rights.
9
<PAGE> 41
RATINGS
As described in the Fund's Prospectus, the Fund's investments in debt securities
must be in obligations rated A or better by Moody's Investor Services, Inc.
("Moody's") or Standard & Poor's Ratings Group ("Standard & Poor's") or be of
comparable quality in the judgment of the Adviser or a Sub-Adviser if no rating
has been assigned by either service.
Moody's describes its three highest ratings for corporate bonds as follows:
"Bonds which are rated AAA are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as 'gilt edge'.
Interest payments are protected by a large or by an exceptionally stable margin
and principal is secure. While the various protective elements are likely to
change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
"Bonds which are rated AA are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long term risks appear somewhat larger than in Aaa securities.
"Bonds which are rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment some time in the future."
Standard & Poor's describes its three highest ratings for corporate bonds as
follows:
"AAA. Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
"AA. Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
"A. Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories."
THOSE RESPONSIBLE FOR MANAGEMENT
The business of the Fund is managed by its Trustees, who elect officers who are
responsible for the day-to-day operations of the Trust and who execute policies
formulated by the Trustees. Several of the officers and Trustees of the Trust
are also officers and Directors of the Adviser, or officers and Directors of the
Fund's principal distributor, John Hancock Funds, Inc. ("John Hancock Funds").
The following table sets forth the principal occupation or employment of the
Trustees and principal officers of the Trust during the past five years:
10
<PAGE> 42
<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.
11
<PAGE> 43
<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 Representatives, Inc.;
Director, the Hudson City Savings Bank.
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
31 Milk Street Company (a trust company); Director,
Boston, Massachusetts Groundwater Technology, Inc. (remediation);
Samuel Cabot, Inc.; Advisor, Kestrel Venture
Management.
</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.
12
<PAGE> 44
<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 Company; Director,
John Hancock Place the Adviser, the Affiliated Companies, John
P.O. Box 111 Hancock Distributors, Inc., JH Networking
Boston, Massachusetts 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.
Edward J. Spellman, CPA Trustee (4) Partner, KPMG Peat Marwick LLP (retired June
259C Commercial Bld. 1990).
Lauderdale, 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 Operating Officer, the
101 Huntington Avenue Adviser; Executive Vice President, the Adviser
Boston, Massachusetts (until December 1994); Senior Vice President;
the Adviser (until December 1993); Vice
President, the Adviser, until 1991.
(*)Thomas H. Drohan Senior Vice President and Senior Vice President and Secretary, the
101 Huntington Avenue Secretary Adviser.
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.
13
<PAGE> 45
<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
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,
101 Huntington Avenue Secretary and Compliance the 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.
14
<PAGE> 46
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 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 the Fund's 1995 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 Fund for their services.
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS
AGGREGATE ACCRUED AS
COMPENSATION PART OF THE TOTAL COMPENSATION FROM
FROM FUND'S THE FUND AND JOHN HANCOCK
INDEPENDENT TRUSTEES THE FUND EXPENSES FUND COMPLEX TO TRUSTEES(1)
- -------------------- ------------ ----------- ---------------------------
(Total of 17 Funds)
<S> <C> <C> <C>
Dennis S. Aronowitz $ 858 $ -- $ 61,050.00
Richard P. Chapman 884 616 62,800.00
William J. Cosgrove 858 589 61,050.00
Gail D. Fosler 858 -- 60,800.00
Bayard Henry 833 -- 58,850.00
Edward J. Spellman 858 -- 61,050.00
------ ------ -----------
$5,149 $1,205 $365,600.00
</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, 1995.
The nominees of the Funds may at times be the record holders in excess of 5% of
shares of any one or more Funds by virtue of holding shares in "street name." As
of December 1, 1995, the officers and trustees of the Trusts as a group ownewd
less than 1% of the outstanding shares of each class of each of the Funds.
As of December 1, 1995, the following shareholders beneficially owned 5% or more
of the outstanding shares of the Funds listed below:
<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE TO
NAME AND ADRESS OF FUND AND CLASS OF BENEFICIAL INTERST OUTSTANDING SHARES OF
SHAREHOLDER SHARES OWNED THE CLASS OF THE FUND
------------------ ----------------- ------------------- ---------------------
<S> <C> <C> <C>
First Trust Company TTEE Class A Shares 138,128 5.17%
Perspective Advisory Co
P.O. Box 173736
Denver, CO 90217-3736
</TABLE>
15
<PAGE> 47
INVESTMENT ADVISORY AND OTHER SERVICES
The Fund receives its investment advice from the Adviser and the Sub-Advisers.
Investors should refer to the Prospectus and below for a description of certain
information concerning the investment management contract and the sub-investment
management contracts.
Each of the Trustees and principal officers of the Trust who is also an
affiliated person of the Adviser or the Sub-Advisers is named above, together
with the capacity in which such person is affiliated with the Fund and the
Adviser or the Sub-Advisers.
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 with a continuous investment program,
consistent with the Fund's stated investment objective and policies. The Adviser
is responsible for the management of the Fund's portfolio assets.
The Adviser has entered into a sub-investment management contract with each
Sub-Adviser under which the Sub-Adviser, subject to the review of the Trustees
and the overall supervision of the Adviser is responsible for providing the Fund
with advice with respect to that portion of the assets invested in countries
other than the U.S. and Canada.
Securities held by the Fund may also be held by other funds or investment
advisory clients for which the Adviser, a Sub-Adviser or any of their respective
affiliates provides 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 other funds or clients are selling the same
security. If opportunities for purchase or sale of securities by the Adviser or
the Sub-Advisers for the Fund or for other funds or clients for which the
Adviser or a Sub-Adviser renders investment advice arise for consideration at or
about the same time, transactions in such securities will be 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, a Sub-Adviser or its affiliate 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, the Sub-Advisers and their respective
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 and the Sub-Advisers may from time to time receive statistical or
other similar factual information, and information regarding general economic
factors and trends, from the Life Company and its affiliates.
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 other
officers and employees of the Trust, and pays the expenses of clerical services
relating to the administration of the Fund. Effective January 3, 1994, the
Adviser has permanently waived the right to compensation for payment of any
officers' salaries either directly or through reimbursement by the Fund.
16
<PAGE> 48
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.), and the continuous public
offering of the shares of the Fund are borne by the Fund. Class expenses
properly allocable to either Class A or Class B shares will be borne exclusively
by such class of shares, subject to conditions the Internal Revenue Service
imposes with respect to multiple class structures.
As provided by the investment management contract, the Fund pays the Adviser
monthly an investment management fee, which is based on a stated percentage of
the Fund's average daily net assets as follows:
<TABLE>
<CAPTION>
Net Asset Value Annual Rate
--------------- -----------
<S> <C>
First $200,000,000 0.80%
Amount over $200,000,000 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.
On August 31, 1995, the net assets of the Fund were $51,784,889. The investment
management fee paid by the Fund is higher than the fee paid by most mutual funds
but is comparable to the fee paid by similar funds which invest primarily in
international securities. During the years ended August 31, 1995 and 1994, the
Fund paid the Adviser fees in the amount of $430,725 and $307,356, respectively.
For the year ended August 31, 1993, the Adviser did not receive a fee.
The Adviser pays JHAI a quarterly management fee at the annual rate as follows:
<TABLE>
<CAPTION>
Net Asset Value Annual Rate
--------------- -----------
<S> <C>
First $200,000,000 0.50%
Amount over $200,000,000 0.4375%
</TABLE>
The Fund is not responsible for paying the JHAI's fee. As of September 1,
1994 JHAI has waived all but 0.05% of their fee:
The Adviser pays IAAL a fee at the annual rate equal to (a) .30% of the first
$100 million of the Fund's average daily net assets managed by IAAL plus (b) the
following additional amount, based on a percentage of the gross management fee
received by the Adviser pursuant to the investment management contract with
respect to the Fund's average daily net assets in excess of $100 million which
are managed by IAAL:
<TABLE>
<CAPTION>
Net Assets Percentage of Gross
Managed by IAAL Management Fee
<S> <C>
More than $100 million up to $250 million 40%
More than $250 million 50%
</TABLE>
17
<PAGE> 49
The Fund is not responsible for paying IAAL's fee.
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 may not exceed 2 1/2% of the first $30,000,000 of the Fund's average
net assets, 2% of the next $70,000,000 of such net assets and 1 1/2% of the
remaining average net assets. When calculating the above limit, the Fund may
exclude interest, brokerage commissions and extraordinary expenses.
Pursuant to their respective management contracts, the Adviser and Sub-Advisers
are 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 the contracts
relate, except a loss resulting from willful misfeasance, bad faith or gross
negligence on the part of the Adviser or Sub-Advisers in the performance of
their duties or from reckless disregard by them of their obligations and duties
under the contract.
The Adviser, located at 101 Huntington Avenue, Boston, Massachusetts 02199-7603,
was organized in 1968 and presently has more than $16 billion in assets under
management in its capacity as investment adviser to the Fund and the other
mutual funds and publicly traded investment companies in the John Hancock group
of funds having a combined total of over approximately 1,080,000 shareholders.
The Adviser is an affiliate of the Life Company, one of the most recognized and
respected financial institutions in the nation. With total assets under
management of more than $80 billion, the Life Company is one of ten largest life
insurance companies in the United States, and carries high ratings from Standard
& Poor's and A.M. Best's. Founded in 1862, the Life Company has been serving
clients for over 130 years.
JHAI, with offices located at 34 Dover Street, London, England W1X 3RA, is a
wholly-owned subsidiary of the Adviser and was formed in 1987 to provide
international investment research and advisory services to U.S. institutional
clients.
IAAL is a Hong-Kong based investment adviser located at One Exchange Square,
Suite 2606-2608, Hong Kong.
Under the investment management contract, the Fund may use the name "John
Hancock" 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
the Life Company may grant the nonexclusive 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 the Life Company or any subsidiary or
affiliate thereof or any successor to the business of any subsidiary or
affiliate thereof shall be the investment adviser.
The investment management contract, the sub-investment management contract, and
the distribution contract discussed below, continue in effect from year to year
if approved annually by vote of a majority of the Trustees who are not
interested persons of one of the parties to the contract, cast in person at a
meeting called for the purpose of voting on such approval, and by
18
<PAGE> 50
either the Trustees or the holders of a majority of the Fund's outstanding
voting securities. Each of these contracts automatically terminates upon
assignment and may be terminated without penalty on 60 days' notice at the
option of either party to the respective contract or by vote of a majority of
the outstanding voting securities of the Fund.
DISTRIBUTION CONTRACT
The Fund has entered into a distribution contract with John Hancock Funds. Under
the contract, John Hancock Funds is obligated to use its best efforts to sell
shares of each class of the Fund. Shares of the Fund are also sold by selected
broker-dealers (the "Selling Brokers") 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 any applicable sales charge. In connection with the
sale of Class A or 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 adopted Distribution Plans with respect to Class A and Class
B shares ("the Plans"), pursuant to Rule 12b-1 under the Investment Company Act
of 1940. Under the Plans, the Fund will pay distribution and service fees at an
aggregate annual rate of up to 0.30% and 1.00% respectively, of the Fund's daily
net assets attributable to shares of that class. However, 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
distribution costs incurred in the promotion of sales of Fund shares, 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 a majority of the voting securities of the
Fund. The Plans and all amendments were approved by 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.
19
<PAGE> 51
During the fiscal year ended August 31, 1995, the Funds paid John Hancock Funds
the following amounts of expenses with respect to the Class A and Class B shares
of the Fund:
<TABLE>
<CAPTION>
Expense Items
-------------
Printing and Interest,
Mailing of Carrying or
Prospectuses to Compensation to Other Finance
Advertising New Shareholders Selling Brokers Charges Other
----------- ---------------- --------------- -------------
Pacific Basin Equities
- ----------------------
<S> <C> <C> <C> <C>
Class A shares $442,653 $22,010 $412,277 $ 0
Class B shares $ 79,972 $ 1,282 $245,556 $37,859
</TABLE>
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 in
each case 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 vote of the
Trustees and the Independent Trustees of the Fund. The holders of Class A 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 the
Plans 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 Plan, 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.
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.
20
<PAGE> 52
Equity securities traded on a principal exchange or NASDAQ National Market
Issues are generally valued at last sale price on the day of valuation.
Securities in the aforementioned category for which no sales are reported and
other 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; President's 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 shares of Class A shares of the
Fund are described in the Prospectus. Methods of obtaining a reduced sales
charge 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
Class A shares made at one time, the purchases will be combined if made by (a)
an individual, his or her 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 Charge. As described in the Prospectus, Class A shares of the Fund
may be sold without a sales charge to the persons described in the Prospectus.
21
<PAGE> 53
Accumulation Privilege. Investors (including investors combining purchases) who
are already Class A shareholders may also obtain the benefit of a reduced sales
charge by taking into account not only the money then being invested but also
the purchase price or 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 a sales charge.
Letter of Intention. Reduced sales charges are also applicable to investments
made over a specified 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,
401(k), 403(b) plans, 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 in 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
within 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 Class A 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 Class A shares will be released. If the total investment specified in the
LOI is not completed, the Class A 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 or her
attorney-in-fact to redeem any escrowed Class A 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 Class A 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.
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
22
<PAGE> 54
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
Exchange Privilege. As described more fully in the 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 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, the distribution of cash pursuant to this plan 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
such 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
23
<PAGE> 55
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 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 shareholders bank. The bank shall be under no
obligation to notify the shareholder as to the non-payment of any checks.
The program may be discontinued by the shareholder either by calling Investor
Services or upon written notice to Investor 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 of the other John Hancock funds, subject to the minimum
investment limit in 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 any of the other John Hancock
funds. If a CDSC was paid upon a redemption, a shareholder may reinvest the
proceeds from such 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 charge 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 Fund shares is a taxable transaction for
Federal income tax purposes even if the reinvestment privilege is exercised, and
any gain or loss realized by a shareholder on the redemption or other
disposition of Fund shares will be treated for tax purposes as described under
the caption "Tax Status."
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
two 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 new series of the Trust, into one or more
24
<PAGE> 56
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.
The shares of each class of the Fund represent an equal proportionate
interest in the aggregate net assets attributable to that class of the Fund.
Class A and Class B shares of the Fund will be sold exclusively to members of
the public (other than the institutional investors described in the Prospectus)
at net asset value. A sales charge will be imposed either at the time of the
purchase, for Class A shares, or on a contingent deferred basis, for Class B
shares. For Class A shares, no sales charge is payable at the time of purchase
on investments of $1 million or more, but for such investments a contingent
deferred sales charge may be imposed in the event of certain redemption
transactions within one year of purchase.
Class A and Class B shares have certain exclusive voting rights on matters
relating to their respective distribution plans. The different classes of the
Fund may bear different expenses relating to the cost of holding shareholder
meetings necessitated by the exclusive voting rights of any class of shares.
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) the distribution and service fees
relating to Class A and Class B shares will be borne exclusively by that class
(ii) Class B shares will pay higher distribution and service fees than Class A
shares and (iii) each of Class A and Class B shares will bear any other 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 whether Class A and Class B
shares are purchased.
In the event of liquidation, shareholders are entitled to share pro rata in
the net assets of the Fund available for distribution to such shareholders.
Shares entitle their holders to one vote per share, are freely transferable and
have no preemptive, subscription or conversion rights. When issued, shares are
fully paid and non-assessable, by the Trust, except as set forth below.
Unless otherwise required by the Investment Company Act or the Declaration
of Trust, the Fund has no intention of holding annual meetings of shareholders.
Fund 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 Fund's Declaration of Trust contains an
express disclaimer of shareholder liability for acts, obligations or affairs of
the Fund. The Declaration of Trust also provides for indemnification out of the
Fund's assets for all losses and expenses of any Fund shareholder held
personally liable by reason of being or having been a shareholder. Liability is
therefore limited to circumstances in
25
<PAGE> 57
which the Fund itself would be unable to meet its obligations, and the
possibility of this occurrence is remote.
TAX STATUS
Each series of the Trust, including the Fund, is treated as a separate
entity for tax purposes. The Fund has qualified and elected to be treated as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code") and intends to continue to so qualify 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 in accordance with the timing
requirements of the Code.
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.
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 Prospectuses whether taken 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 each share so received equal to the amount of
cash which 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, 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 stock of certain non-U.S. corporations that receive
at least 75% of their annual gross income from passive sources (such as interest
producing investments, dividends, rents, royalties or capital gain) or hold at
least 50% of their assets in investments producing such passive income ("passive
foreign investment companies"), the Fund could be subject to Federal income tax
and additional interest charges on "excess distributions" received from these
passive foreign investment companies, even if all income or gain actually
received by
26
<PAGE> 58
the Fund is timely distributed to its shareholders. The Fund would not be able
to pass through to its shareholders any credit or deduction for such a tax.
Certain elections if available ameliorate these adverse tax consequences.
Accordingly, the Fund may limit its investments in 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
these investments.
The amount of net realized capital gains, if any, in any given year will
vary depending upon the current investment strategy of the Adviser and
Sub-Advisers and whether the Adviser and the Sub-Advisers believes it to be in
the best interest of the Fund to dispose of portfolio securities that will
generate capital gains. At the time of an investor's purchase of Fund shares, a
portion of the purchase price is often attributable to realized or unrealized
appreciation in the Fund's portfolio or undistributed taxable income of the
Fund. Consequently, subsequent distributions on those shares from such
appreciation or income may be taxable to such investor even if the net asset
value of the investor's shares is, as a result of the distributions, reduced
below the investor's cost for such shares, and the distributions 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 tax
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 Class A 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. This disregarded charge will result in an
increase in the shareholder's tax basis in the Class A shares subsequently
acquired. Also, any loss realized on a redemption or exchange may be disallowed
to the extent the shares disposed of are replaced with other shares of the Fund
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 automatic dividend
reinvestments. 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 its present intention is to distribute all net 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
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
27
<PAGE> 59
increase the adjusted tax basis for his shares in the Fund 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 carryforward a
net realized capital loss in any year to offset net capital gains, if any,
during the eight years following the year of the loss. To the extent subsequent
net 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. The Fund has $586,066 of capital loss carryforwards
which expire on August 31, 2003.
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, if
any. Additionally, any corporate shareholder should consult its tax adviser
regarding the possibility that its tax 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
redemption or other disposition of the shares.
Forward foreign currency contracts and other investment techniques and
practices which the Fund may utilize, as described above under "Investment
Practices," may create "straddles" for United States Federal income tax purposes
and may affect the character and timing of the recognition of gains and losses
by the Fund and its distributions to shareholders. Limitations imposed by the
Internal Revenue Code on regulated investment companies may restrict the Fund's
ability to engage in these transactions.
The Fund may be subject to withholding and other taxes imposed by foreign
countries with respect to its investments in foreign securities. Tax conventions
between certain countries and the U.S. 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 value 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.
If the election is made, 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, against their U.S. Federal income taxes. Shareholders who do
28
<PAGE> 60
not itemize deductions for Federal income tax purposes will not, however, be
able to deduct their pro rata portion of foreign income 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 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 redemption (including an exchange) 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.
Non-U.S. 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. These investors may
be subject to non-resident alien withholding tax at the rate of 30% (or a lower
rate under an applicable tax treaty) on amounts treated as ordinary dividends
from the Fund and, unless an effective IRS Form W-8 or authorized substitute is
on file, to 31% backup withholding on certain other payments from the Fund.
Non-U.S. investors should consult their tax advisers regarding such treatment
and the application of foreign taxes to an investment in the Fund.
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 also not be required to pay any Massachusetts income tax.
HONG KONG TAXES
Taxation of the Fund. The Fund will be subject to Hong Kong profits tax at the
current rate of 16.5% if (i) it carries on business in Hong Kong and (ii) its
profits are derived from a Hong Kong source. Dividends and capital gains are
exempt from profits tax in any event, as are profits from trading in securities
listed on exchanges outside Hong Kong. Profits from trading in securities listed
on a Hong Kong exchange may in certain cases be subject to profits tax.
Taxation of Shareholders. There is no tax in Hong Kong on capital gains arising
from the sale by an investor of shares of the Fund. However, in the case of
certain investors (principally share traders, financial institutions and certain
companies carrying on business in Hong Kong), such
29
<PAGE> 61
gains may be considered to be part of the investor's normal business profits and
in such circumstances will be subject to Hong Kong profits tax at the current
rate of 16.5% for corporations and 15% for individuals. Dividends which the Fund
pays to its shareholders are not taxable in Hong Kong (whether through
withholding or otherwise) under current legislation and practice. No Hong Kong
stamp duty will be payable in respect of transactions in the Fund's shares
provided that the register of shareholders is maintained outside of Hong Kong.
CALCULATION OF PERFORMANCE
The average annual total return on Class A shares of the Fund for the 1
year, 5 years and life-of-fund periods ended August 31, 1995 was (12.29%),
9.11%, and 7.27%, respectively. The average annual total return on Class B
shares of the Fund for the year ended August 31, 1995 since commencement of
operations on March 7, 1994 shares was (12.96%) and (5.30%), respectively.
The Fund's total return is computed by finding the average annual
compounded rate of return over the one year and life-of-fund periods that would
equate the initial amount invested to the ending redeemable value according to
the following formula:
T = (the nth root of ERV divided by 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 years, and life-of-fund periods.
In the case of Class A or Class B shares, this calculation assumes the
maximum sales charge of 5.00% is included in the initial investment or the CDSC
is applied at the end of the period, respectively. 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
30
<PAGE> 62
any time period. Total returns may be quoted with or without taking the Fund's
5.00% sales charge on Class A shares or the CDSC on Class B shares into account.
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 Fund Performance Analysis," a monthly
publication which tracks net assets and total return on 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.
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, BARRON'S, etc. 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 are all examples of items that can increase or decrease
the Fund's performance.
BROKERAGE ALLOCATION
Decisions concerning the purchase and sale of portfolio securities of the
Fund are made by officers of the Trust pursuant to recommendations made by an
investment committee of the Adviser, which consists of officers and directors of
the Adviser, Sub-Advisers, and officers and Trustees who are interested persons
of the Trust. 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 maker reflect
a "spread." 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.
In the U.S. and in some other countries, debt securities are traded
principally in the over-the-counter market on a net basis through dealers acting
for their own account and not as brokers. In other countries, both debt and
equity securities are traded on exchanges at fixed commission rates. Commissions
on foreign transactions are generally higher than the negotiated commission
rates available in the U.S. There is generally less government supervision and
regulation of foreign stock exchanges and broker-dealers than in the U.S.
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 such other
31
<PAGE> 63
policies as the Trustees may determine, the Adviser or a Sub-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 and the
Sub-Advisers 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 and the Sub-Advisers.
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 Company or other advisory
clients of the Adviser or Sub-Advisers, and, conversely, brokerage commissions
and spreads paid by other advisory clients of the Adviser and Sub-Advisers may
result in research information and statistical assistance beneficial to the
Fund. The Fund will make no commitment to allocate portfolio transactions upon
any prescribed basis. While the Adviser, in consultation with the Sub-Advisers,
will be primarily responsible for the allocation of the Fund's brokerage
business, the policies and practices of the Adviser and Sub-Advisers in this
regard must be consistent with the foregoing and at all times be subject to
review by the Trustees. For the fiscal years ended August 31, 1993, 1994, and
1995 the Fund paid negotiated brokerage commissions of $157,024, $405,841 and
$246,610, respectively.
As permitted by Section 28(e) of the Securities Exchange Act of 1934, the
Fund may pay to a broker-dealer which provides brokerage and research services
to the Fund an amount of disclosed commission in excess of the commission which
another broker-dealer would have charged for effecting that transaction. This
practice is subject to a good faith determination by the Trustees that such
price is reasonable in light of the services provided and to such policies as
the Trustees may adopt from time to time. During the fiscal year ended August
31, 1995, the Fund did not pay commissions as compensation to any brokers for
research services such as industry, economic and company reviews and evaluations
of securities.
The Adviser's indirect parent, the Life Company, is the indirect sole
shareholder of John Hancock Distributors, Inc. ("Distributors"), a broker-dealer
and John Hancock Freedom Securities Corporation and its two broker-dealer
subsidiaries, Tucker Anthony Incorporated and Sutro & Company, Inc. ("Sutro"),
each, (an "Affiliated Broker"). Also included is W.I. Carr Group, a British
brokerage firm specializing in Asian securities, which is directly owned by
Banque Indosuez, the indirect parent of Indosuez Asia Advisers Limited. 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. For the fiscal year ended August 31, 1995, the Fund
paid no brokerage commissions to 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
32
<PAGE> 64
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 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 and the sub-Adviser, which are affiliated with the
Affiliated Brokers, have, as investment advisers to the Fund, the obligation to
provide investment management services, which includes 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.
TRANSFER AGENT SERVICES
John Hancock Investor Services Corporation, ("Investor Services"), P.O. Box
9116, Boston, MA 02205-9116, a wholly-owned indirect subsidiary of the Life
Company, is the transfer and dividend paying agent for the Fund. The Fund pays
an annual fee of $16.00 for each Class A shareholder and $18.50 for each Class B
shareholder, plus certain out-of-pocket expenses. These expenses are aggregated
and charged to the Fund and allocated to each class on the basis of the relative
net asset values.
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, State Street Bank
and Trust Company performs custody, portfolio and fund accounting services. The
Trustees have determined that, except as otherwise permitted under applicable
Securities and Exchange Commission "no-action" letters or exemptive orders, it
is in the best interests of the Fund to hold foreign assets of the Fund in
qualified foreign banks and depositories meeting the requirements of Rule 17f-5
under the Investment Company Act.
INDEPENDENT AUDITORS
The independent accountants of the Fund are Price Waterhouse LLP, 160
Federal Street, Boston, Massachusetts 02110. Price Waterhouse LLP audits and
renders an opinion on the Fund's annual financial statements and reviews the
Fund's annual Federal income tax return.
33
<PAGE> 65
FINANCIAL STATEMENTS
John Hancock Funds - Pacific Basin Equities Fund
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
- -------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments at value - Note C:
Common stocks (cost - $47,312,553) ............... $49,005,664
Joint repurchase agreement (cost - $404,000) ..... 404,000
-----------
49,409,664
Cash .............................................. 628
Foreign currency, at value (cost - $2,298,631) .... 2,162,102
Receivable for shares sold ........................ 29,712
Receivable for investments sold ................... 547,615
Interest receivable ............................... 65
Dividends receivable .............................. 49,116
-----------
Total Assets .................... 52,198,902
-----------------------------------------------
LIABILITIES:
Payable for shares repurchased .................... 35,871
Payable for investments purchased ................. 103,467
Foreign taxes payable ............................. 61,007
Payable to John Hancock Advisers, Inc. and
affiliates - Note B .............................. 129,914
Accounts payable and accrued expenses ............. 83,754
-----------
Total Liabilities ............... 414,013
-----------------------------------------------
NET ASSETS:
Capital paid-in ................................... 50,963,701
Accumulated net realized loss on investments and
foreign currency transactions .................... (684,988)
Net unrealized appreciation of investments and
foreign currency transactions .................... 1,506,176
-----------
Net Assets ...................... $51,784,889
===============================================
NET ASSET VALUE PER SHARE:
(Based on net asset values and shares of beneficial
interest outstanding - unlimited number of shares
authorized with no par value, respectively)
Class A - $37,417,107 / 2,651,955 ................. $ 14.11
=================================================================
Class B - $14,367,782 / 1,029,129 ................. $ 13.96
=================================================================
MAXIMUM OFFERING PRICE PER SHARE *
Class A - ($14.11 x 105.26%) ...................... $ 14.85
=================================================================
</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.
THE STATEMENT OF ASSETS AND LIABILITIES IS THE FUND'S BALANCE SHEET AND SHOWS
THE VALUE OF WHAT THE FUND OWNS, IS DUE AND OWES ON AUGUST 31, 1995. YOU'LL ALSO
FIND THE NET ASSET VALUE AND THE MAXIMUM OFFERING PRICE PER SHARE AS OF THAT
DATE.
THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED
AND EXPENSES INCURRED IN OPERATING THE FUND.IT ALSO SHOWS NET GAINS (LOSSES) FOR
THE PERIOD STATED.
STATEMENT OF OPERATIONS
Year ended August 31, 1995
- -----------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (net of foreign withholding taxes of $72,607) $1,046,882
Interest .............................................. 117,947
----------
1,164,829
----------
Expenses:
Investment management fee - Note B ................... 430,725
Transfer agent fee - Note B
Class A ............................................ 167,564
Class B ............................................ 60,092
Custodian fee ........................................ 126,116
Distribution/service fee - Note B
Class A ............................................ 124,405
Class B ............................................ 123,724
Registration and filing fees ......................... 58,256
Printing ............................................. 40,987
Auditing fee ......................................... 30,750
Legal fees ........................................... 17,384
Trustees' fees ....................................... 6,024
Miscellaneous ........................................ 5,526
----------
Total Expenses ...................... 1,191,553
---------------------------------------------------
Net Investment Loss ................. (26,724)
---------------------------------------------------
REALIZED AND UNREALIZED LOSS ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized loss on investments sold ................. (761,693)
Net realized loss on foreign currency transactions .... ( 47,300)
Change in net unrealized appreciation/depreciation
of investments ....................................... (3,737,328)
Change in net unrealized appreciation/depreciation
of foreign currency transactions ..................... (59,090)
Net Realized and Unrealized ----------
Loss on Investments and
Foreign Currency Transactions ....... (4,605,411)
===================================================
Net Decrease in Net Assets
Resulting from Operations ........... $(4,632,135)
===================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 66
FINANCIAL STATEMENTS
John Hancock Funds - Pacific Basin Equities Fund
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- -----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED AUGUST 31,
--------------------------
1995 1994
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss.................................................................................. $ (26,724) $ (270,589)
Net realized gain (loss) on investments sold and foreign currency transactions....................... (808,993) 2,359,655
Change in net unrealized appreciation/depreciation of investments and foreign currency transactions.. (3,796,418) 4,022,518
----------- -----------
Net Increase (Decrease) in Net Assets Resulting from Operations..................................... (4,632,135) 6,111,584
----------- -----------
DISTRIBUTIONS TO SHAREHOLDERS:
Distributions from net realized gain on investments sold and foreign currency transactions
Class A - ($0.5482 and $0.4050 per share, respectively)............................................. (1,615,390) (815,022)
Class B** - ($0.5482 and none per share, respectively).............................................. (485,450) --
------------ -----------
Total Distributions to Shareholders............................................................... (2,100,840) (815,022)
------------- -----------
FROM FUND SHARE TRANSACTIONS -- NET*................................................................... (1,223,114) 39,876,044
------------ -----------
NET ASSETS:
Beginning of period.................................................................................. 59,740,978 14,568,372
------------ -----------
End of period........................................................................................ $51,784,889 $59,740,978
============ ===========
* ANALYSIS OF FUND SHARE TRANSACTIONS:
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
-------------------------------------------------------
1995 1994
-------------------------- --------------------------
SHARES AMOUNT SHARES AMOUNT
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
CLASS A
Shares sold...................................................... 1,831,046 $25,781,273 3,060,288 $ 45,798,982
Shares issued to shareholders in reinvestment of distributions... 112,000 1,558,965 50,799 779,990
---------- ----------- ----------- ------------
1,943,046 27,340,238 3,111,087 46,578,972
Less shares repurchased.......................................... (2,455,590) (34,756,404) (1,044,694) (15,671,855)
---------- ----------- ----------- ------------
Net increase (decrease).......................................... (512,544) $(7,416,166) 2,066,393 $ 30,907,117
========== =========== =========== ============
CLASS B **
Shares sold...................................................... 1,880,511 $26,138,987 633,031 $ 9,493,869
Shares issued to shareholders in reinvestment of distributions... 31,341 434,079 -- --
---------- ----------- ----------- ------------
1,911,852 26,573,066 633,031 9,493,869
Less shares repurchased.......................................... (1,481,266) (20,380,014) (34,488) (524,942)
---------- ----------- ----------- ------------
Net increase..................................................... 430,586 $ 6,193,052 598,543 $ 8,968,927
========== =========== =========== ============
</TABLE>
**Class B shares commenced operations on March 7, 1994
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 67
FINANCIAL STATEMENTS
John Hancock Funds - Pacific Basin Equities Fund
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
periods indicated, investment returns, key ratios and supplemental data are as
follows:
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------------------------------------
1995 1994 1993 1992 1991
------- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period............................... $ 15.88 $ 13.27 $ 8.87 $ 9.05 $10.34
------- ------- ------- ------ ------
Net Investment Income (Loss)....................................... 0.02(a)(d) (0.10)(a) (0.11)(a) (0.07)(a) (0.01)
Net Realized and Unrealized Gain (Loss) on Investments and Foreign
Currency Transactions............................................. (1.24) 3.12 4.51 (0.11) (0.33)
------- ------- ------- ------ ------
Total from Investment Operations.................................. (1.22) 3.02 4.40 (0.18) (0.34)
------- ------- ------- ------ ------
Less Distributions:
Distributions from Net Realized Gain on Investments Sold and
Foreign Currency Transactions..................................... (0.55) (0.41) -- -- (0.95)
------- ------- ------- ------ ------
Total Distributions............................................... (0.55) (0.41) -- -- (0.95)
------- ------- ------- ------ ------
Net Asset Value, End of Period..................................... $ 14.11 $ 15.88 $ 13.27 $ 8.87 $ 9.05
======= ======= ======= ====== ======
Total Investment Return at Net Asset Value......................... (7.65%) 22.82% 49.61% (1.99%) (2.15%)
Total Adjusted Investment Return at Net Asset Value (c)(e)......... -- -- 48.31% (5.57%) (5.19%)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted).......................... $37,417 $50,261 $14,568 $3,222 $4,065
Ratio of Expenses to Average Net Assets**.......................... 2.05% 2.43% 2.94% 2.73% 2.75%
Ratio of Adjusted Expenses to Average Net Assets (c)............... -- -- 4.24% 6.31% 5.79%
Ratio of Net Investment Income (Loss) to Average Net Assets........ 0.13%(d) (0.66%) (0.98%) (0.82%) (0.06%)
Ratio of Adjusted Net Investment Loss to Average Net Assets (c).... -- -- (2.28%) (4.40%) (3.10%)
Portfolio Turnover Rate............................................ 48% 68% 171% 179% 151%
**Expense Reimbursement Per Share.................................. -- -- $ 0.14 $ 0.31 $ 0.24
</TABLE>
THE FINANCIAL HIGHLIGHTS SUMMARIZES THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIOD INDICATED: NET INVESTMENT INCOME, GAINS (LOSSES),
DIVIDENDS AND TOTAL INVESTMENT RETURN OF THE FUND. IT SHOWS HOW THE FUND'S NET
ASSET VALUE FOR A SHARE HAS CHANGED SINCE THE END OF THE PREVIOUS PERIOD.
ADDITIONALLY, IMPORTANT RELATIONSHIPS BETWEEN SOME ITEMS PRESENTED IN THE
FINANCIAL STATEMENTS ARE EXPRESSED IN RATIO FORM.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 68
FINANCIAL STATEMENTS
John Hancock Funds - Pacific Basin Equities Fund
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
- -------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PERIOD
YEAR ENDED ENDED
AUGUST 31, AUGUST 31,
1995 1994
---------- ----------
<S> <C> <C>
CLASS B**
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period......................................................... $ 15.84 $15.11(b)
------- ------
Net Investment Loss.......................................................................... (0.09)(a) (0.09)(a)
Net Realized and Unrealized Loss on Investments and Foreign Currency Transactions............ (1.24) 0.82
------- ------
Total from Investment Operations............................................................ (1.33) 0.73
------- ------
Less Distributions:
Distributions from Net Realized Gain on Investments Sold and Foreign Currency Transactions... (0.55) --
------- ------
Total Distributions......................................................................... (0.55) --
------- ------
Net Asset Value, End of Period............................................................... $ 13.96 $15.84
======= ======
Total Investment Return at Net Asset Value................................................... (8.38%) 4.83%
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted).................................................... $14,368 $9,480
Ratio of Expenses to Average Net Assets...................................................... 2.77% 3.00%*
Ratio of Net Investment Loss to Average Net Assets........................................... (0.66%) (1.40%)*
Portfolio Turnover Rate...................................................................... 48% 68%
<FN>
* On an annualized basis.
** Class B shares commenced operations on March 7, 1994.
(a) On average month end shares outstanding.
(b) Initial price at commencement of operations.
(c) On an unreimbursed basis without expense reduction.
(d) May not accord to amounts shown elsewhere in the financial statements due to
the timing of sales and repurchases of fund shares in relation to
fluctuating market values of the investments of the Fund.
(e) Unaudited.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 69
FINANCIAL STATEMENTS
John Hancock Funds - Pacific Basin Equities Fund
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY THE
PACIFIC BASIN EQUITIES FUND ON AUGUST 31, 1995. IT'S DIVIDED INTO TWO MAIN
CATEGORIES: COMMON STOCKS AND SHORT-TERM INVESTMENTS. COMMON STOCKS ARE FURTHER
BROKEN DOWN BY COUNTRY. SHORT-TERM INVESTMENTS, WHICH REPRESENT THE FUND'S
"CASH" POSITION, ARE LISTED LAST.
<TABLE>
SCHEDULE OF INVESTMENTS
August 31, 1995
- -------------------------------------------------------------------------------------
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- ----------
<S> <C> <C>
COMMON STOCKS
AUSTRALIA (12.50%)
Amcor Ltd. (Paper)............................ 160,000 $1,246,222
Australian National Industries Ltd.
(Diversified Operations)..................... 730,000 642,132
Broken Hill Proprietary Co., Ltd.
(Diversified Operations)..................... 121,000 1,755,733
News Corp. Ltd. (The) (Publishing)............ 207,000 1,188,993
TNT Ltd. (Transportation)..................... 365,600* 497,509
Woolworth's Ltd. (Retail)..................... 501,000* 1,145,057
----------
6,475,646
----------
HONG KONG (19.91%)
Amoy Properties Ltd. (Real Estate)............ 550,000* 493,799
Cheung Kong (Holdings) Ltd.
(Real Estate)................................ 150,000 744,090
CITIC Pacific Ltd. (Diversified Operations)... 400,000 1,139,388
Harbin Power Equipment Co., Ltd.
(Machinery)**................................ 1,300,000* 310,683
Hongkong Electric Holdings Ltd.
(Utilities).................................. 300,000 1,040,563
Hong Kong Telecommunications Ltd.
(Telecommunications)......................... 200,000* 361,710
HSBC Holdings Ltd. (Banks).................... 130,000 1,746,544
Hutchison Whampoa Ltd,
(Diversified Operations)..................... 180,000* 867,330
Hysan Development Co., Ltd.
(Real Estate)................................ 380,000* 797,701
Sun Hung Kai Properties Ltd.
(Real Estate)................................ 160,000 1,162,641
Swire Pacific Ltd. (A Shares)
(Diversified Operations)..................... 170,000 1,273,737
Yizheng Chemical Fibre Co., Ltd.
(Chemicals).................................. 1,250,000* 371,399
-----------
10,309,585
-----------
INDONESIA (3.23%)
PT Bank International Indonesia (Banks)....... 239,800 867,575
PT Indonesian Satellite, American
Depositary Receipts
(Telecommunications)......................... 20,000* 702,500
PT Semen Gresik (Building Products) # 35,000* 105,008
-----------
1,675,083
-----------
JAPAN (21.83%)
Daido Steel Co., Ltd. (Steel)................. 200,000 $ 1,012,581
Fanuc Ltd. (Machinery)........................ 18,000 822,952
Itochu Corp. (Diversified Operations)......... 200,000 1,243,735
Jusco Co., Ltd. (Retail)...................... 63,000 1,411,169
Marui Co., Ltd. (Retail)...................... 69,000 1,213,869
Matsushita Electric Industrial Co., Ltd.
(Electronics)................................ 60,000* 938,938
Minebea Co., Ltd. (Machinery)................. 100,000* 777,335
Sanwa Bank Ltd. (Banks)....................... 39,000* 745,934
Seino Transportation Co., Ltd.
(Transportation)............................. 50,000 833,589
Sumitomo Trust & Banking Co., Ltd.
(The) (Banks)................................ 110,000* 1,496,369
Toshiba Corp. (Electronics)................... 112,000 808,755
-----------
11,305,226
-----------
KOREA (3.91%)
Korea Line Co. (Transportation)............... 12,000* 364,718
Korea Electric Power Corp. (Utilities)........ 22,000* 773,927
L.G. Chemical Ltd. (Chemicals)................ 10,000* 208,226
Samsung Electronics Co. (Electronics)**....... 3,700* 669,943
Samsung Electronics Co. (Ord New 3)...........
(Electronics)**.............................. 45* 8,148
-----------
2,024,962
-----------
MALAYSIA (8.53%)
Aokam Perdana Berhad
(Building Products).......................... 170,400 416,609
DCB Holdings Berhad (Banks)................... 120,000* 355,912
Land & General Berhad (Real Estate)........... 450,000 1,442,886
Petronas Gas Berhad (Oil & Gas)**............. 43,000* 137,876
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 70
FINANCIAL STATEMENTS
John Hancock Funds - Pacific Basin Equities Fund
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----------
<S> <C> <C>
MALAYSIA (CONTINUED)
Resorts World Berhad (Leisure &
Recreation).................................... 250,000* $ 1,302,605
Sime Darby Berhad (Diversified
Operations).................................... 300,000* 763,527
-----------
4,419,415
-----------
NEW ZEALAND (3.86%)
Brierley Investments Ltd. (Diversified
Operations).................................... 735,000* 544,940
Carter Holt Harvey Ltd. (Building
Products)...................................... 393,600 895,942
Telecom Corporation of New Zealand
(Telecommunications)........................... 140,000 555,411
-----------
1,996,293
-----------
PHILIPPINES (2.09%)
Benpres Holdings Corp., Global
Depositary Receipts
(Diversified Operations)**..................... 2,000* 14,500
Manila Electric Co. (B Shares) (Utilities)...... 71,800* 570,633
Pilipino Telephone Corp.
(Telecommunications)**......................... 513,000* 494,792
-----------
1,079,925
-----------
SINGAPORE (13.01%)
Fraser & Neave Ltd. (Beverages)................. 100,000 1,132,845
Hongkong Land Holdings Ltd.
(Real Estate).................................. 280,000 509,600
Jardine Matheson Holdings Ltd.
(Diversified Operations)....................... 130,000 936,000
Keppel Corp. Ltd. (Diversified
Operations).................................... 160,000 1,283,422
Oversea-Chinese Banking Corp, (Banks) 62,000* 698,002
Singapore Press Holdings Ltd.
(Publishing)................................... 82,440 1,136,943
United Overseas Bank Ltd. (Banks) 120,000* 1,038,559
-----------
6,735,371
-----------
THAILAND (5.76%)
Bangkok Bank (Banks)............................ 125,000 1,396,648
Electricity Generating Public Co., Ltd.
(Utilities)**.................................. 110,000* 344,573
Italian-Thai Development Public Co., Ltd.
(Construction)................................. 64,000* 735,515
Shinawatra Computer and Communication
Public Co., Ltd. (Telecommunications).......... 22,000* 507,422
-----------
2,984,158
-----------
TOTAL COMMON STOCKS
(Cost $47,312,553) (94.63%) 49,005,664
------- -----------
</TABLE>
<TABLE>
<CAPTION>
INTREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000'S OMITTED) VALUE
- ------------------- ------- --------------- ------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENTS
JOINT REPURCHASE AGREEMENT (0.78%)
Investment in a joint repurchase
agreement transaction with UBS
Securities Inc. - Dated 08-31-95,
Due 09-01-95 (secured by U.S.
Treasury Bill, 5.540% Due 05-30-96
and by U.S. Treasury Note, 5.625%
Due 01-31-98) - Note A.............. 5.80% $ 404 $ 404,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $404,000) (0.78%) 404,000
------- -----------
TOTAL INVESTMENTS (95.41%) $49,409,664
======= ===========
<FN>
* Securities, other than short-term investments, newly added to the portfolio during the year ended August 31, 1995.
** Non-income producing security.
# Security purchased on a delayed delivery basis. The Fund has segregated cash equal to the amount of the delayed
delivery security. The price of the underlying security and the date when the security will be delivered and paid
for are fixed at the time the transaction is negotiated. The percentage shown for each investment category is the
total value of that category as a percentage of the net assets of the Fund.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 71
FINANCIAL STATEMENTS
John Hancock Funds - Pacific Basin Equities Fund
INDUSTRY DIVERSIFICATION (Unaudited)
- --------------------------------------------------------------------------------
THE FUND PRIMARILY INVESTS IN SECURITIES ISSUED BY COMPANIES OF OTHER COUNTRIES,
PRIMARILY IN THE PACIFIC BASIN REGION. THE PERFORMANCE OF THE FUND IS CLOSELY
TIED TO THE ECONOMIC CONDITIONS WITHIN THE COUNTRIES IT INVESTS. THE
CONCENTRATION OF INVESTMENTS BY COUNTRY FOR INDIVIDUAL SECURITIES HELD BY THE
FUND IS SHOWN IN THE SCHEDULE OF INVESTMENTS. IN ADDITION, THE CONCENTRATION OF
INVESTMENTS CAN BE AGGREGATED BY VARIOUS INDUSTRY GROUPS. THE TABLE BELOW SHOWS
THE PERCENTAGES OF THE FUND'S INVESTMENTS AT AUGUST 31, 1995 ASSIGNED TO THE
VARIOUS INVESTMENT CATEGORIES.
<TABLE>
<CAPTION>
MARKET VALUE OF
SECURITIES AS A
INVESTMENT CATEGORIES % OF NET ASSETS
- --------------------- ---------------
<S> <C>
Banks....................................................... 16.12%
Beverages................................................... 2.19
Building Products........................................... 2.74
Chemicals................................................... 1.12
Construction................................................ 1.42
Diversified Operations...................................... 20.21
Electronics................................................. 4.68
Leisure & Recreation........................................ 2.51
Machinery................................................... 3.69
Oil & Gas................................................... 0.27
Paper....................................................... 2.41
Publishing.................................................. 4.49
Real Estate................................................. 9.95
Retail...................................................... 7.28
Steel....................................................... 1.95
Telecommunications.......................................... 5.06
Transportation.............................................. 3.27
Utilities................................................... 5.27
Short-Term Investments...................................... 0.78
-----
TOTAL INVESTMENTS 95.41%
=====
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 72
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Pacific Basin Equities Fund
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 Pacific Basin Equities Fund (the
"Fund"), John Hancock Global Rx Fund and John Hancock Global Retail 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. Shareholders of a class which bears
distribution/service expenses under terms of a distribution plan, have exclusive
voting rights to such distribution plan. Significant accounting policies of the
Fund are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio are valued on the
basis of market quotations, valuations provided by independent pricing services
or, at fair value as determined in good faith in accordance with procedures
approved by the Trustees. Short-term debt investments maturing within 60 days
are valued at amortized cost which approximates market value. All portfolio
transactions initially expressed in terms of foreign currencies have been
translated into U.S. dollars as described in "Foreign Currency Translation"
below.
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 TRANSACTION 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. Capital gains realized
on some foreign securities are subject to foreign taxes and are accrued, as
applicable.
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 its taxable income, including any net realized gain on
investments, to its shareholders. For federal income tax purposes, the Fund has
$586,066 of capital loss carryforwards available, to the extent provided by
regulations, to offset future net realized capital gains. To the extent that
such carryforwards are used by the Fund, no capital gain distribution will be
made. The carryforward expires on August 31, 2003. Expired capital loss
carryforwards are reclassified to capital paid-in, in the year of expiration.
Additionally, net capital losses of $67,979 attributable to security
transactions incurred after October 31, 1994 are treated as arising on the first
day (September 1, 1995) of the Fund's current taxable year. For federal income
tax purposes, net currency exchange gains and losses from sales of foreign debt
securities must be treated as ordinary income even though such items are gains
and losses for accounting purposes.
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. Foreign income
may be subject to foreign withholding taxes which are accrued as applicable.
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
15
<PAGE> 73
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Pacific Basin Equities Fund
in the same amount, except for the effect of expenses that may be applied
differently to each class as explained previously.
EXPENSES The majority of the expenses of the Trust are directly identifiable to
an individual Fund. Expenses which are not readily 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.
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.
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.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS The Fund may enter into forward
foreign currency exchange contracts as a hedge against the effect of
fluctuations in 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 set price. The aggregate principal amounts of the contracts are
marked-to-market daily at the applicable foreign currency exchange rates. Any
resulting unrealized gains and losses are included in the determination of the
Fund's daily net assets. The Fund records realized gains and losses at the time
the forward foreign currency contract is closed out or offset by a matching
contract. Risks may arise upon entering these contracts from potential inability
of counterparties to meet the terms of the contract and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
These contracts involve market or credit risk in excess of the unrealized
gain or loss reflected in the Fund's Statement of Assets and Liabilities. The
Fund may also purchase and sell forward contracts to facilitate the settlement
of foreign currency denominated portfolio transactions, under which it intends
to take delivery of the foreign currency. Such contracts normally involve no
market risk other than that offset by the currency amount of the underlying
transaction.
At August 31, 1995, there were no open forward foreign currency exchange
contracts.
FOREIGN CURRENCY TRANSLATION All assets and 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.
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
The Adviser is solely responsible for advising the Fund with respect to
investments in the United States and Canada. The Fund and the Adviser also have
a sub-investment management contract with John Hancock Advisers International
Limited ("JHAI"), a wholly-owned subsidiary of the Adviser, under which JHAI,
subject to the review of the Trustees and overall supervision of the Adviser,
provides the Fund with investment management services and advice with respect
16
<PAGE> 74
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Pacific Basin Equities Fund
to that portion of the Fund's assets invested in countries other than the United
States and Canada. The Adviser and Indosuez Asia Advisers Limited ("IAAL") have
a second subadvisary contract. Pursuant to such contract, IAAL serves as
co-subadviser to the Fund with JHAI. IAAL provides additional expertise in Asian
and Pacific Basin countries.
Under the present investment management 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 $200,000,000 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 $200,000,000. The Adviser pays JHAI a quarterly
management fee equivalent, on an annual basis, to the sum of (a) 0.50% of the
first $200,000,000 of the Fund's average daily net asset value and (b) 0.4375%
of the Fund's average daily net asset value in excess of $200,000,000. As of
September 1, 1994, JHAI has waived all but 0.05% of their fee. The Adviser pays
IAAL a quarterly subadvisory fee at the annual rate of (a) 0.30% of the first
$100,000,000 of the Fund's average daily net assets managed by IAAL plus (b)
0.40% of the gross management fee received by the Adviser pursuant to the
investment management contract with respect to the Fund's average daily net
assets in excess of $100,000,000 which are managed by IAAL (the rate increases
to 50% on net assets 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 Fund has a distribution agreement with John Hancock Funds, Inc. ("JH
Funds"), a wholly-owned subsidiary of the Adviser. Prior to January 1, 1995, JH
Funds was known as John Hancock Broker Distribution Services, Inc. For the
period ended August 31, 1995, net sales charges received with regard to sales of
Class A shares amounted to $216,466. Out of this amount, $20,415 was retained
and used for printing prospectuses, advertising, sales literature and other
purposes, $70,900 was paid as sales commissions to unrelated broker-dealers and
$125,151 was paid as sales commissions to sales personnel of John Hancock
Distributors, Inc. ("Distributors"), Tucker Anthony, Incorporated ("Tucker
Anthony") and Sutro & Co., ("Sutro"), all of which are broker dealers. The
Adviser's indirect parent, John Hancock Mutual Life Insurance Company, is the
indirect sole shareholder of Distributors and John Hancock Freedom Securities
Corporation and its subsidiaries, which include FDC, Tucker Anthony and Sutro.
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 the CDSC are paid to JH Funds 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 August 31,
1995, contingent deferred sales charges paid to JH Funds amounted to $51,067.
In addition, to compensate JH Funds for the services it provides as
distributors 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, at an annual rate not exceed 0.30% of Class A
average daily net assets and 1.00% of Class B average daily net assets 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. Under the amended
Rules of Fair Practice, curtailment of a portion of the Fund's 12b-1 payments
could occur under certain circumstances.
17
<PAGE> 75
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Pacific Basin Equities Fund
The Fund has a transfer agent agreement with John Hancock Investor Services
Corporation ("Investor Services"), a wholly-owned subsidiary of The Berkeley
Financial Group. Prior to January 1, 1995, Investor Services was known as John
Hancock Fund Services, Inc. Effective January 1, 1995, Class A and Class B
shares pay transfer agent fees based on transaction volume and the number of
shareholder accounts. Prior to January 1, 1995, the Fund paid Investor Services
a monthly transfer agent fee equivalent, on an annual basis, to 0.40% and 0.42%
of the average daily net asset value of Class A and Class B shares of the Fund,
respectively, plus out-of-pocket expenses incurred by Fund Services on behalf of
the Fund for proxy mailings.
Messrs. Edward J. Boudreau, Jr., Francis C. Cleary, 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 Adviser owns 10,000 shares of beneficial
interest of the Fund. Trustee Edward J. Boudreau, Jr. is Managing Director of
JHAI. The compensation of unaffiliated Trustees is borne by the Fund. Effective
with the fees paid for 1995, the unaffiliated Trustees may elect to defer for
tax purposes their receipt of this compensation under the John Hancock Group of
Funds Deferred Compensation Plan. The Fund will make investments into other John
Hancock funds, as applicable, to cover its liability for the deferred
compensation. Investments to cover the Fund's deferred compensation liability
will be recorded on the Fund's books as an other asset. The deferred
compensation liability will be marked to market on a periodic basis and income
earned by the investment will be recorded on the Fund's books.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than short-term
securities, during the period ended August 31, 1995, aggregated $24,184,740 and
$26,307,535, respectively. There were no purchases or sales of obligations of
the U.S. government and its agencies during the period ended August 31, 1995.
The cost of investments owned at August 31, 1995 (including the joint
repurchase agreement) for federal income tax purposes was $47,747,494. Gross
unrealized appreciation and depreciation of investments aggregated $4,323,146
and $2,660,976, respectively, resulting in net unrealized appreciation of
$1,662,170.
NOTE D --
RECLASSIFICATION OF ACCOUNTS
During the year ended August 31, 1995, the Fund has reclassified amounts to
reflect a decrease in accumulated net realized loss on investments of $135,800,
a decrease in accumulated net investment loss of $26,724 and a decrease in
capital paid-in of $162,524. This represents the cumulative amount necessary to
report these balances on a tax basis, excluding certain temporary differences,
as of August 31, 1995. Additional adjustments may be needed in subsequent
reporting periods. These reclassifications, which have no impact on the net
asset value of the Fund, are primarily attributable to the treatment of net
operating losses in the computation of distributable income and capital gains
under federal tax rules versus generally accepted accounting principle.
18
<PAGE> 76
John Hancock Funds - Pacific Basin Equities Fund
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of John Hancock Pacific Basin Equities Fund and the Trustees
of John Hancock World Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of John Hancock Pacific Basin Equities
Fund (the "Fund") (a portfolio of John Hancock World Fund) at August 31, 1995,
the results of its operations for the year then ended, and the changes in its
net assets and the financial highlights for the periods indicated, in conformity
with generally accepted accounting principles. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 1995 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
October 17, 1995
TAX INFORMATION NOTICE (UNAUDITED)
For Federal income tax purposes, the following information is furnished with
respect to the distributions of the Fund during the fiscal year ended August 31,
1995.
The Fund distributed to shareholders of record December 23, 1994 and paid on
December 29, 1994, a capital gain dividend of $649,953. Shareholders were mailed
a 1994 U.S. Treasury Department Form 1099-DIV in January 1995 representing their
proportionate share. It is anticipated that there will be a distribution from
sales of securities to shareholders of record on December 22, 1995 and payable
December 28, 1995. Shareholders will receive a 1995 U.S. Treasury Department
Form 1099-DIV in January 1996 representing their proportionate share.
None of the distributions qualify for the dividends received deduction
available to corporations.
19
<PAGE> 77
JOHN HANCOCK
GLOBAL Rx
FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
JANUARY 1, 1996
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
The Fund's Financial Highlights....................................................... 3
Investment Objective and Policies..................................................... 4
Organization and Management of the Fund............................................... 8
Alternative Purchase Arrangements..................................................... 9
The Fund's Expenses................................................................... 11
Dividends and Taxes................................................................... 12
Performance........................................................................... 13
How to Buy Shares..................................................................... 14
Share Price........................................................................... 16
How to Redeem Shares.................................................................. 22
Additional Services and Programs...................................................... 24
</TABLE>
This Prospectus sets forth information about John Hancock Global Rx Fund (the
"Fund"), as a non-diversified series of John Hancock World Fund (the "Trust"),
that you should know before investing. Please read and retain it for future
reference.
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 January 1, 1996, 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, 1-800-225-5291, (1-800-554-6713 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> 78
EXPENSE INFORMATION
The purpose of the following information is to help you to understand the
various fees and expenses you will bear, directly or indirectly, when you
purchase shares of the Fund. The operating expenses included in the table and
hypothetical example below are based on actual fees and expenses for the Class A
and Class B shares of the Fund for the fiscal year ended August 31, 1995,
adjusted to reflect current fees and expenses. Actual fees and expenses may be
greater or less than those indicated.
<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 fees+........................................................................................... None None
Exchange fee............................................................................................... None None
ANNUAL FUND OPERATING EXPENSES (As a percentage of average net assets)
Management fee............................................................................................. 0.80% 0.80%
12b-1 fee**................................................................................................ 0.30% 1.00%
Other expenses............................................................................................. 1.48% 1.48%
Total Annual Fund Operating Expenses....................................................................... 2.58% 3.28%
</TABLE>
* No sales charge is payable at the time of purchase on investments in Class A
shares 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.
** The amount of the 12b-1 fee used to cover service expenses will be up to
0.25% of the Fund's average 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.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- -------- -------- ---------
<S> <C> <C> <C> <C>
You would pay the following expenses for the indicated period of years on a
hypothetical $1,000 investment, assuming 5% annual return.
Class A Shares................................................................ $75 $126 $180 $327
Class B Shares
-- Assuming complete redemption at end of period.......................... $82 $131 $191 $342
-- Assuming no redemption................................................. $32 $101 $171 $342
</TABLE>
(This example should not be considered a representation of past or future
expenses. Actual expenses may be greater or less than those shown).
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.'s Rules of Fair Practice.
The management fee and Rule 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 Contracts."
2
<PAGE> 79
THE FUND'S FINANCIAL HIGHLIGHTS
The following financial highlights have been audited by the Fund's independent
accountants. Price Waterhouse LLP's report on the Fund's financial statements
and financial highlights for the year ended August 31, 1995 is included in the
Annual Report which is included in the Statement of Additional Information.
Further information about the performance of the Fund is contained in the Fund's
Annual Report to shareholders which may be obtained free of charge by writing or
telephoning John Hancock Investor Services Corporation, at the address or
telephone number listed on the front page of this Prospectus.
Selected data for each class of shares outstanding throughout each period
indicated is as follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
OCTOBER 1, 1991
YEAR ENDED AUGUST 31, (COMMENCEMENT OF
----------------------------------------------- OPERATIONS) TO
1995 1994 1993 AUGUST 31, 1992
--------------- --------------- ------- -----------------
<S> <C> <C> <C> <C>
Class A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period........................ $ 16.51 $ 13.38 $ 13.34 $ 10.00
------- ------- ------- -------
Net Investment Loss......................................... (0.36)(b) (0.32) (0.23) (0.03)
Net Realized and Unrealized Gain on Investments and
Foreign Currency Transactions............................. 5.46 3.45 0.27 3.37
------- ------- ------- -------
Total from Investment Operations............................ 5.10 3.13 0.04 3.34
------- ------- ------- -------
Net Asset Value, End of Year................................ $ 21.61 $ 16.51 $ 13.38 $ 13.34
======= ======= ======= =======
Total Investment Return at Net Asset Value.................. 30.89% 23.39% 0.30% 33.40%(e)
Total Adjusted Investment Return at Net Asset Value(d)(f)... -- -- 0.04% 32.11%(e)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)................... $24,394 $18,643 $15,647 $14,702
Ratio of Expenses to Average Net Assets+.................... 2.56% 2.55% 2.50% 1.98%*
Ratio of Adjusted Expenses to Average Net Assets(d)......... -- -- 2.76% 3.39%*
Ratio of Net Investment Loss to Average Net Assets.......... (1.99%) (2.01%) (1.67%) (0.51%)*
Ratio of Adjusted Net Investment Loss to Average Net
Assets(d)................................................. -- -- (1.93%) (1.92%)*
Portfolio Turnover Rate..................................... 38% 52% 93% 48%
+Expense Reimbursement Per Share............................ -- -- $ 0.035 $ 0.085
<CAPTION>
YEAR ENDED PERIOD ENDED
AUGUST 31, 1995 AUGUST 31, 1994
------- ---------------
<S> <C> <C>
Class B**
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period........................ $16.46 $17.29(a)
------- -------
Net Investment Loss......................................... (0.55)(b) (0.17)(b)
Net Realized and Unrealized Gain (Loss) on Investments and
Foreign Currency Transactions............................. 5.44 (0.66)(c)
------- -------
Total from Investment Operations............................ 4.89 (0.83)
------- -------
Net Asset Value, End of Period.............................. $21.35 $16.46
======= =======
Total Investment Return at Net Asset Value.................. 29.71% (4.80%)(e)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)................... $6,333 $1,071
Ratio of Expenses to Average Net Assets..................... 3.45% 3.34%*
Ratio of Net Investment Loss to Average Net Assets.......... (2.91%) (2.65%)*
Portfolio Turnover Rate..................................... 38% 52%
</TABLE>
- ---------------
* On an annualized basis.
** Class B shares commenced operations on March 7, 1994.
(a) Initial price at commencement of operations.
(b) On average month end shares outstanding.
(c) May not accord to amounts shown elsewhere in the financial statements due to
the timing of sales and repurchases of fund shares in relation to
fluctuating market values of the investments of the Fund.
(d) On an unreimbursed basis without expense reduction.
(e) Not annualized.
(f) Unaudited.
3
<PAGE> 80
INVESTMENT OBJECTIVE AND POLICIES
The Fund's investment objective is to achieve long-term capital appreciation
through investments in an international portfolio consisting primarily of equity
securities of issuers in the health care industry. Accordingly, the Fund seeks
to increase the value of shareholder investments, and any current income is
incidental to this objective. There can be no assurance that the Fund will
achieve its investment objective.
- -------------------------------------------------------------------------------
THE FUND SEEKS LONG-TERM CAPITAL
APPRECIATION THROUGH AN INTERNATIONAL
PORTFOLIO CONSISTING PRIMARILY OF EQUITY
SECURITIES OF ISSUERS IN THE HEALTH CARE
INDUSTRY.
- -------------------------------------------------------------------------------
Under normal conditions, the Fund will invest at least 65% of its total assets
in the securities of health care companies. A "health care" company is one in
which at least 50% of gross revenues are derived from, or 50% of gross assets
are committed to, health care activities as of the end of its last fiscal year
or its most recent publicly available financial statement. The health care
industry is diverse, including companies which design, produce and/or sell
prescription drugs and over-the-counter medicines, drug delivery systems and
medical and analytical instruments; companies which own and/or manage health
care facilities; and companies involved in biotechnology. Because the Fund
concentrates its investments in the health care industry, its performance is
closely tied to conditions in this industry. The types of products and services
comprising this industry tend to become obsolete quickly with the discovery of
more effective medical techniques. Additionally, the companies providing these
services and products are subject to strict government regulation which could
have an unfavorable impact on the price and supply of their services and
products. Because the Fund is non-diversified it will be more susceptible to
adverse developments affecting any single issuer.
FOREIGN SECURITIES. The Fund invests in common stocks and in securities
convertible into or with rights to purchase common stock of U.S. and foreign
issuers. The value of convertible securities, while influenced by the level of
interest rates, is also affected by the changing value of the underlying common
stock into which the securities are convertible. The Fund will not purchase any
convertible securities rated below "B" by a major rating agency. The Fund may
invest in American Depositary 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 that information and the market value of an unsponsored ADR.
Because the Fund has a limited scope of investment through its concentration in
the health care industry, it 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, and without regard to a record
of profits or dividends. The Fund may invest up to 15% of its net assets in
securities for which no readily available market exists.
- -------------------------------------------------------------------------------
THE FUND MAY EMPLOY CERTAIN INVESTMENT
STRATEGIES TO HELP ACHIEVE ITS INVESTMENT
OBJECTIVE.
- -------------------------------------------------------------------------------
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
4
<PAGE> 81
into forward foreign currency 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 hedging strategies might reduce
the risk of loss due to a decline in the value of the hedged foreign currency,
they may also limit any potential gain which might result from an increase in
the value of that currency.
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
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 the Fund's illiquid securities to not more than 15% of its net assets.
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, 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.
SHORT SALES. The Fund may engage in short sales "against the box," as well as
short sales to hedge against or 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 net 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.
OPTIONS TRANSACTIONS. To earn income from the premiums received, the Fund may
write listed and over-the-counter covered call and put options on debt and
equity securities, securities indices and foreign currency. The Fund may write
listed
5
<PAGE> 82
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's ability to use futures contracts and options to hedge or earn income
successfully will depend on the ability of John Hancock Advisers Inc.'s (the
"Adviser") to predict accurately the future direction of securities prices,
interest rate changes, currency exchange rate fluctuations and other market
factors. The risk of loss on futures transactions is potentially unlimited.
There is no assurance that a liquid market for futures and options will always
exist to permit the Fund to curtail losses by closing out a position. 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.
CASH, REPURCHASE AGREEMENTS AND WHEN-ISSUED SECURITIES. The Fund may hold cash
or invest in investment grade U.S. or foreign corporate debt securities (those
rated at the time of purchase within the four highest grades by Moody's
Investors Services, Inc. or Standard and Poor's Ratings Group, or those which
the Adviser deems to be of comparable quality), and money market instruments or
securities issued by the U.S. and foreign governments and their agencies or
instrumentalities.
The Fund may enter into repurchase agreements and may purchase securities on a
when-issued basis. In a repurchase agreement, the Fund buys a security subject
to the right and obligation to sell it back to the seller 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 and the
Fund is delayed in 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 when-issued securities. Purchasing securities 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's portfolio turnover rate for recent years is shown in the section "The
Fund's Financial Highlights." Over the past several years, political and
economic events in foreign countries and in the health care industry have
affected the Fund's geographic allocation of assets. Consequently, the Fund's
portfolio turnover has been relatively high, as the Fund repositioned its
investments to limit risk and take advantage of evolving investment
opportunities. A high rate of portfolio turnover (100% or more) involves
correspondingly greater brokerage transaction costs which will be borne by the
Fund and its shareholders, and may, under certain circumstances, make it more
difficult for the Fund to qualify as a regulated investment company under the
Internal Revenue Code of 1986, as amended (the "Code").
6
<PAGE> 83
INVESTMENT RESTRICTIONS. The Fund has adopted certain investment restrictions
which are detailed in the Statement of Additional Information, where they are
designated as fundamental or nonfundamental. Fundamental investment restrictions
may not be changed without shareholder approval. All other investment policies
and restrictions are nonfundamental and can be changed by a vote of the Trustees
without shareholder approval. These changes may result in the Fund having
investment objectives different from the objectives which you considered
appropriate at the time of your investment in the Fund.
- -------------------------------------------------------------------------------
THE FUND FOLLOWS CERTAIN POLICIES WHICH
MAY HELP REDUCE INVESTMENT RISK.
- -------------------------------------------------------------------------------
GLOBAL RISKS. Investments in foreign securities may involve certain risks not
present in domestic securities due to exchange controls, less publicly available
information, more volatile or less liquid securities markets, and the
possibility of expropriation, confiscatory taxation or political, economic or
social instability. There may be difficulty in enforcing legal rights outside
the United States. Some foreign companies are not subject to the same uniform
financial reporting requirements, accounting standards and government
supervision as domestic companies, and foreign exchange markets are regulated
differently from the U.S. stock market. 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. Finally, the expense ratios of
international funds generally are higher than those of domestic funds because
there are greater costs associated with maintaining custody of foreign
securities, and the increased research necessary for international investing
results in a higher advisory fee.
- -------------------------------------------------------------------------------
INVESTMENTS IN FOREIGN SECURITIES MAY
INVOLVE RISKS AND CONSIDERATIONS THAT ARE
NOT PRESENT IN DOMESTIC INVESTMENTS.
- -------------------------------------------------------------------------------
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 business, 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 predominantly 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.
7
<PAGE> 84
Investing in securities of smaller capitalization developing-growth companies
also involves greater risk and the possibility of greater portfolio price
volatility. Among the reasons for the greater price volatility in these small
companies and unseasoned stocks are the less certain growth prospects of smaller
firms, the lower degree of liquidity in the markets for these stocks and the
greater sensitivity of small companies to changing economic conditions in their
geographic region. Securities of these companies involve higher investment risks
than those normally associated with larger firms due to the greater business
risks of small size and limited product lines, markets, distribution channels
and financial and managerial resources.
When choosing brokerage firms to carry out the Fund's transactions, 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 established 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 (the "Life Company"), which in turn indirectly owns the Adviser.
- -------------------------------------------------------------------------------
BROKERS ARE CHOSEN BASED ON BEST PRICE AND
EXECUTION.
- -------------------------------------------------------------------------------
ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is a separate, non-diversified portfolio of the Trust, an open-end
management investment company organized as a Massachusetts business trust in
1986. The Trust's Declaration of Trust permits the Trustees to create and
classify shares of beneficial interest into separate series of the Trust with
different investment objectives. The Trustees may also classify or reclassify
any series into one or more classes. Accordingly, the Trustees have authorized
the issuance of two classes of shares 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 fees, and Class A and Class B shareholders have exclusive
voting rights with respect to their distribution plans.
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
The Fund is not required to hold annual shareholder meetings, although special
meetings may be held for such purposes as electing or removing Trustees,
changing fundamental 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 Life 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 Fund officers
are also officers of the Adviser and John Hancock Funds. Pursuant to an
- -------------------------------------------------------------------------------
JOHN HANCOCK ADVISERS, INC.
ADVISES INVESTMENT
COMPANIES HAVING A TOTAL
VALUE OF MORE THAN
$16 BILLION.
- -------------------------------------------------------------------------------
8
<PAGE> 85
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.
Day to day management of the Fund is carried out by Linda Miller. Ms. Miller
joined the Adviser in 1995, after more than ten years as an investment research
analyst in the health-care group at Paine Webber. Ms. Miller is a Vice-President
of the Adviser.
The Fund has an independent advisory board composed of scientific and medical
experts who provide the investment officers of the Fund with advice and
consultation on health care developments.
- -------------------------------------------------------------------------------
THE FUND HAS AN INDEPENDENT MEDICAL
ADVISORY BOARD.
- -------------------------------------------------------------------------------
In order to avoid conflicts 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 Alternative," Class B. Shares). If you do not specify on your
account application the class of shares you are purchasing, it will be assumed
that you are investing in Class A shares.
- -------------------------------------------------------------------------------
AN ALTERNATIVE PURCHASE
PLAN ALLOWS YOU TO CHOOSE
THE METHOD OF PAYMENT
THAT IS BEST FOR YOU.
- -------------------------------------------------------------------------------
CLASS A SHARES. If you elect to purchase Class A shares, you will incur an
initial sales charge unless the amount you 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.
- -------------------------------------------------------------------------------
9
<PAGE> 86
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 of
your dollars to work from the time you make your investment, but the higher
ongoing distribution fee will cause these shares to have higher expenses than
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 Investor Services or the Life Company that had 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
WOULD 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 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 is more advantageous to purchase
Class B shares to have all of your funds invested initially. However, you will
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
10
<PAGE> 87
distribution and service fees, as well as from 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. They will be in the same amount,
except for differences resulting from each class bearing 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 for the 1995 fiscal year, was 0.80% of the Fund's average daily
net assets. The investment management fee paid by the Fund is higher than the
fee paid by most mutual funds but comparable to the fee paid by similar funds
which invest primarily in international securities.
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 it makes or expenses it
incurs by it under the Class A Plan, these expenses will not be carried beyond
one year 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. For the fiscal year ended August 31, 1995 an
aggregate of $205,352 of distribution expenses or 6.09% of the average net
assets of the Class B shares of the Fund, was not reimbursed or recovered by the
John Hancock Funds through the receipt of deferred sales charges or 12b-1 fees
in prior periods.
- -------------------------------------------------------------------------------
THE FUND PAYS DISTRIBUTION AND SERVICE
FEES FOR MARKETING AND SALES-RELATED
SHAREHOLDER SERVICING.
- -------------------------------------------------------------------------------
Information on the Fund's total expenses is in the Fund's Financial Highlights
section of the prospectus.
11
<PAGE> 88
DIVIDENDS AND TAXES
Dividends from the Fund's net investment income are declared and paid annually.
Short-term and long-term capital gains, if any, are generally distributed
annually. Dividends are reinvested in additional shares of your class unless you
elect the option to receive them 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 shares, any dividends on these shares will be lower than those on the Class A
shares. See "Share Price."
TAXATION. Dividends from the Fund's net investment income and net short-term
capital gains are taxable to you as ordinary income. 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 additional
shares. Certain dividends may be paid in January of a given year, but they may
be taxable as if you received them the previous December. 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 has qualified, and intends to continue to qualify, as a regulated
investment company under Subchapter M of the Code of 1986, as amended (the
"Code"). As a regulated investment company, the Fund will not be subject to
Federal income tax on any net investment income and net realized capital gains
that are distributed to its shareholders within the time period prescribed by
the Code. When you redeem (sell) or exchange shares, you may realize a taxable
gain or loss.
On the account application, you must certify that your social security or other
taxpayer identification number is correct and that you are not subject to backup
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 and the proceeds of redemptions and exchanges.
The Fund anticipates that it will be subject to foreign withholding or other
foreign taxes on income (possibly including, in some cases, capital gains) on
certain of its foreign investments, which will reduce the yield from those
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 which represents interest
received by the Fund on direct U.S. Government obligations may be exempt from
tax. You should consult your tax adviser for specific advice.
12
<PAGE> 89
PERFORMANCE
Total return shows the overall dollar or percentage change in value of a
hypothetical investment in the Fund, 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 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.
- -------------------------------------------------------------------------------
THE FUND MAY ADVERTISE ITS TOTAL RETURN.
- -------------------------------------------------------------------------------
Total return calculations for Class A shares generally include the effect of
paying the maximum sales charge (except as shown in "The Fund's Financial
Highlights"). Investments at a lower sales charge would result in higher
performance figures. Total return for the Class B shares reflects the deduction
of the applicable CDSC 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 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 the Fund's performance data. The value of the Fund's shares,
when redeemed, may be more or less than their original cost. Total return is a
historical calculation, and is not an indication of future performance. See
"Factors to Consider in Choosing an Alternative."
13
<PAGE> 90
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
The minimum initial investment is $1,000 ($250 for group investments and
retirement plans).
- -------------------------------------------------------------------------------
OPENING AN ACCOUNT.
- -------------------------------------------------------------------------------
Complete the Account Application attached to this Prospectus. Indicate
whether you are purchasing Class A or Class B shares. If you do not specify
which class of shares you are purchasing, Investor Services will assume
that you are investing in Class A shares.
----------------------------------------------------------------------------
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation.
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 or 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 Rx 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.
- --------------------------------------------------------------------------------
MONTHLY 1. Complete the "Automatic Investing" and "Bank Information"
AUTOMATIC sections on the Account Privileges Application,
ACCUMULATION designating a bank account from which your funds may be
drawn.
-------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A
AND CLASS B SHARES.
- --------------------------------------------------------------------------------
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"
sections on the Account Privileges Application
designating a bank account from which your funds may be
drawn. Note that in order to invest by phone, your
account 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 name(s)
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.
- --------------------------------------------------------------------------------
14
<PAGE> 91
- --------------------------------------------------------------------------------
BY CHECK 1. Either complete the detachable stub included in your account
statement or include a note with your investment listing the
name of the Fund, the class of shares you own, your account
number and the name(s) in which the account is registered.
- -------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES. (CONTINUED)
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
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 Fund
(Class A or Class B shares)
Your Account Number
Name(s) under which account is registered
- --------------------------------------------------------------------------------
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 based on the net asset value computed after John Hancock Funds receives
notification of the dollar equivalent from the Fund's 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.
- -------------------------------------------------------------------------------
15
<PAGE> 92
SHARE PRICE
The net asset value ("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. 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 according to
procedures approved by the Trustees. Short-term debt investments maturing within
60 days are valued at amortized cost which the Board of Trustees has determined
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 believe 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.
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 as follows:
<TABLE>
<CAPTION>
REALLOWANCE TO
COMBINED SELLING BROKERS
AMOUNT SALES CHARGE AS REALLOWANCE AS
INVESTED SALES CHARGE AS A PERCENTAGE OF AND SERVICE FEE AS A PERCENTAGE OF
(INCLUDING A PERCENTAGE OF THE AMOUNT A PERCENTAGE OF THE OFFERING
SALES CHARGE) OFFERING PRICE INVESTED OFFERING PRICE(+) 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%(***)
</TABLE>
(*) 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. A Selling Broker to whom substantially the entire sales charge is
reallowed may be deemed to be an underwriter under the Securities Act of
1933.
(**) 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
16
<PAGE> 93
in the event of certain redemption transactions made within one year of
purchase.
(***) John Hancock Funds may pay a commission and the first year's service fee
(as described in (+) below) to Selling Brokers who initiate and are
responsible for purchases 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.
Sales charges ARE NOT APPLIED to any dividends that are reinvested in additional
Class A shares of the Fund.
John Hancock Funds will pay certain affiliated Selling Brokers at an annual rate
of up to 0.05% of the daily net assets of 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 Class A shares will be made at net
asset value with no initial sales charge, but if the 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
charge will be imposed. The rate of the 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 the Life Company who were group annuity
contract holders as of September 1, 1994, and 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. However,
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 CDSC will be assessed on an amount equal to the lesser of the current market
value or the original purchase cost of the redeemed Class A shares. 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 Class A
shares.
17
<PAGE> 94
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.
Therefore, it will be assumed that the redemption is first made from any shares
in your account that are not subject to the CDSC. The CDSC is waived on
redemptions in certain circumstances. See "Waiver of Contingent Deferred Sales
Charges" below.
QUALIFYING FOR A REDUCED SALES CHARGE. If you invest more than $50,000 in Class
A shares of the Fund or a combination of John Hancock funds (except money market
funds), you may qualify for a reduced sales charge on your investments in 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 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 INVESTMENTS 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 funds you hold; 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."
EXAMPLE:
If you hold Class A shares of a John Hancock fund with a net asset value of
$20,000 and, subsequently, invest $30,000 in Class A shares of the Fund, the
sales charge on this subsequent investment would be 4.50% and not 5.00%. This is
the rate that would otherwise be applicable to investments of less than $50,000.
See "Initial Sales Charge Alternative--Class A shares."
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.
- -------------------------------------------------------------------------------
CLASS A SHARES MAY BE AVAILABLE WITHOUT A
SALES CHARGE TO CERTAIN INDIVIDUALS AND
ORGANIZATIONS.
- -------------------------------------------------------------------------------
- - Any state, county, city or any instrumentality, department, authority, or
agency of these entities that 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.*
18
<PAGE> 95
- - A broker, dealer, financial planner, consultant 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 or
services made available to their clients.
- - A former participant in an employee benefit plan with John Hancock Funds, when
he or she withdraws from his or her plan and transfers any or all of his or
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 entire 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. The 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.
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
reinvestment of dividends or distributions, 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> <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 the Class B shares, such as
compensating Selling Brokers for selling these shares. The combination of the
19
<PAGE> 96
CDSC and the distribution and service fees makes it possible for the Fund to
sell Class B shares without an initial sales charge.
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>
YEAR IN WHICH
CLASS B SHARES CONTINGENT DEFERRED SALES
REDEEMED FOLLOWING CHARGE AS A PERCENTAGE OF
PURCHASE DOLLAR AMOUNT 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.
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 these circumstances defined below:
- -------------------------------------------------------------------------------
UNDER CERTAIN CIRCUMSTANCES, THE CDSC ON
CLASS B AND CERTAIN CLASS A SHARE
REDEMPTIONS WILL BE WAIVED.
- -------------------------------------------------------------------------------
- - 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.
- - 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.
20
<PAGE> 97
- - 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 that 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 the waiver.
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. This will occur at the end of the month eight years after the
shares were purchased, and will result 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 time you purchased the shares in the original
fund. The Fund has been advised that the conversion of Class B shares to Class A
shares should not be taxable for Federal income tax purposes, and should not
change your tax basis or tax holding period for the converted shares.
21
<PAGE> 98
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 recently made by
check or Invest-by-Phone have been collected (which may take up to 10 calendar
days).
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 usually 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
three business days or longer, as permitted by Federal securities laws.
- --------------------------------------------------------------------------------
BY TELEPHONE All Fund shareholders are eligible automatically 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.
- -------------------------------------------------------------------------------
TO ASSURE ACCEPTANCE OF YOUR REDEMPTION
REQUEST, PLEASE FOLLOW THESE PROCEDURES.
- -------------------------------------------------------------------------------
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 according to 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 collectible after two business
days. Your bank may or may not charge a fee 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
included with this Prospectus.
- --------------------------------------------------------------------------------
22
<PAGE> 99
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
TYPE OF REGISTRATION REQUIREMENTS
Individual, Joint Tenants, Sole A letter of instruction signed (with titles
Proprietorship, Custodial where applicable) by all persons authorized
(Uniform Gifts or Transfer to to sign for the account, exactly as it is
Minors Act), General Partners registered with the signature(s) guaran-
teed.
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 a signature(s) guaranteed.
(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.
- -----------------------------------------------------------------------------
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 the 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.
- -------------------------------------------------------------------------------
WHO MAY GUARANTEE YOUR SIGNATURE.
- -------------------------------------------------------------------------------
THROUGH YOUR BROKER. Your broker may be able to initiate the redemption.
Contact your broker for instructions.
- -------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT REDEMPTIONS.
- -------------------------------------------------------------------------------
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. You may not
redeem certificated shares by telephone.
Due to the proportionately high cost of maintaining smaller 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 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 further purchases and dividend reinvestments, if any, exceeds the
number of shares redeemed, repeated redemptions from a smaller account may
eventually trigger this policy.
23
<PAGE> 100
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 only exchange shares of each
class of the Fund 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 FOR
SHARES OF THE SAME CLASS OF ANOTHER JOHN
HANCOCK FUND.
- -------------------------------------------------------------------------------
Exchanges between funds 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 that are subject to a CDSC may be exchanged for Class
B shares of another John Hancock fund without incurring the CDSC; however, these
shares will be subject to the CDSC schedule of the shares acquired (except that
exchanges into John Hancock Short-Term Strategic Income Fund, John Hancock
Intermediate Maturity Government Fund and John Hancock Limited-Term Government
Fund 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
continue to be subject to the CDSC schedule that was in effect at your initial
purchase date.
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 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 of 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.
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
24
<PAGE> 101
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 complete the application for your initial 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. 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 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> 102
REINVESTMENT PRIVILEGE
1. You will not be subject to a sales charge on Class A shares that you reinvest
in John Hancock funds that is otherwise subject to a sales charge, as long as
you reinvest within 120 days from 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. The holding period of the shares
acquired through reinvestment, for purposes of computing the CDSC payable
upon a subsequent redemption, will include the holding period of the redeemed
shares.
- -------------------------------------------------------------------------------
IF YOU REDEEM SHARES OF THE FUND, YOU MAY
BE ABLE TO REINVEST ALL OR PART OF THE
PROCEEDS IN THIS FUND OR ANOTHER JOHN
HANCOCK FUND WITHOUT PAYING AN ADDITIONAL
SALES CHARGE.
- -------------------------------------------------------------------------------
2. Any portion of your redemption may be reinvested in Fund shares or in shares
of 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, the account number and class from which your shares were
originally redeemed.
SYSTEMATIC WITHDRAWAL PLAN
1. You can elect the Systematic Withdrawal Plan at any time by completing the
Account Privileges Application which is attached to this Prospectus. You can
also obtain the application from your registered representative or by calling
1-800-225-5291.
2. To be eligible, you must have at least $5,000 in your account.
- -------------------------------------------------------------------------------
YOU CAN PAY ROUTINE BILLS FROM YOUR
ACCOUNT, OR MAKE PERIODIC DISBURSEMENTS
FROM YOUR RETIREMENT ACCOUNT TO COMPLY
WITH IRS REGULATIONS.
- -------------------------------------------------------------------------------
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 payees you may authorize, but all payments
must be made at the same time or intervals.
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 charges on your purchases of Class A shares or a CDSC 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 can authorize an investment to be withdrawn automatically each month on
your bank, for investment in Fund shares, under the "Automatic Investing" and
"Bank Information" sections on the Account Privileges Application.
- -------------------------------------------------------------------------------
YOU CAN MAKE AUTOMATIC INVESTMENTS AND
SIMPLIFY YOUR INVESTING.
- -------------------------------------------------------------------------------
26
<PAGE> 103
2. You can also authorize automatic investment through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.
3. You can 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
initial 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.
2. The initial aggregate investment of all participants in the group must be at
least $250.
- -------------------------------------------------------------------------------
ORGANIZED GROUPS OF AT LEAST FOUR PERSONS
MAY ESTABLISH ACCOUNTS.
- -------------------------------------------------------------------------------
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 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 Section 457 Plans.
2. The initial investment minimum or aggregate minimum for any of these plans is
$250. However, accounts being established as group IRA, SEP, SARSEP, TSA,
401(k) and Section 457 Plans will be accepted without an initial minimum
investment.
27
<PAGE> 104
JOHN HANCOCK
GLOBAL Rx FUND
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
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
Telephone Exchange
Investment-by-Phone
Telephone Redemption
call 1-800-225-5291
For TDD call 1-800-554-6713
JHD-2800P 1/96 (LOGO) Printed on Recycled Paper
JOHN HANCOCK
GLOBAL Rx
FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
JANUARY 1, 1996
A MUTUAL FUND SEEKING
LONG-TERM CAPITAL
APPRECIATION THROUGH
INVESTMENTS IN AN
INTERNATIONAL
PORTFOLIO CONSISTING
PRIMARILY OF EQUITY
SECURITIES OF ISSUERS
IN THE HEALTH CARE
INDUSTRY.
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS 02199-7603
TELEPHONE 1-800-225-5291
<PAGE> 105
JOHN HANCOCK
GLOBAL RX FUND
CLASS A AND CLASS B SHARES
STATEMENT OF
ADDITIONAL INFORMATION
JANUARY 1, 1996
This Statement of Additional Information provides information about John Hancock
Global Rx Fund (the "Fund") in addition to the information that is contained in
the Fund's Class A and Class B Shares Prospectus, dated January 1, 1996 (the
"Prospectus").
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 Investor Services Corporation
P.O. Box 9116
Boston, Massachusetts 02205-9116
1-(800)-225-5291
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Statement of Cross Referenced
Additional to Class A and
Information Class B
Page Prospectus Page
<S> <C> <C>
Organization Of The Fund 2 8
Investment Objective And Policies 2 4
Certain Investment Practices 2 4
Those Responsible for Management 14 8
Investment Advisory And Other Services 20 9
Distribution Contract 22 --
Net Asset Value 24 16
Initial Sales Charge on Class A shares 24 16
Deferred Sales Charge on Class B shares 26 19
Special Redemptions 26 --
Additional Services And Programs 26 24
</TABLE>
1
<PAGE> 106
<TABLE>
<S> <C> <C>
Description Of The Fund's Shares 28 16
Tax Status 29 12
Calculation Of Performance 33 13
Brokerage Allocation 34 --
Transfer Agent Services 35 Back Cover
Custody Of Portfolio 36 Back Cover
Independent Auditors 36 Back Cover
Appendix A-Description of Bond and Commercial Paper Ratings 37 6
Financial Statements
</TABLE>
ORGANIZATION OF THE FUND
John Hancock Global Rx Fund (the "Fund") is organized as a separate,
non-diversified portfolio of the John Hancock World Fund (the "Trust"), an
open-end management investment company organized in August 1986 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. On January 1, 1995, the Fund
changed its name from John Hancock Freedom Global Rx. The Adviser is an
indirect, wholly owned subsidiary of John Hancock Mutual Life Insurance Company
(the "Life 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 through
investments in an international portfolio consisting primarily of equity
securities of issuers in the health care industry. See "Investment Objective and
Policies" in the Prospectus. There can be no assurance that the Fund will
achieve its investment objective.
CERTAIN INVESTMENT PRACTICES
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.
If the Fund enters into a forward contract to purchase foreign currency, its
custodian bank will segregate cash or liquid high-grade liquid debt securities
(i.e. securities rated in one of the top three rating categories by Moody's
Investor Service, Inc. ("Moodys") or Standard & Poor's Rating Group ("Standard &
Poor's) 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,
2
<PAGE> 107
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 liquid
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 securities 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 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 in
which the Fund seeks to enforce its rights thereto, possible subnormal levels of
income and lack of access to income during this period and the expense of
enforcing its rights.
3
<PAGE> 108
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 securities traded in markets moving in different directions are combined into
a single portfolio, such as that of the Fund, total portfolio volatility may be
reduced. Since the Fund may invest in securities quoted or denominated in
currencies other than U.S. dollars, changes in foreign currency exchange rates
may 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 in foreign currencies, the value of
the assets of the Fund attributable to such investment as measured in U.S.
dollars, will be affected favorably or unfavorably by changes in the
relationship of the U.S. dollar to 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 three (3) 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.
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
4
<PAGE> 109
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 the sale
of securities deemed to have been held for less than three months, which gains
must constitute less than 30% of the Fund's gross income for its taxable year in
order for the Fund to qualify for treatment as a regulated investment company
under the Internal Revenue Code of 1986, as amended (the "Code").
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 changes in interest rates or in security 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
5
<PAGE> 110
and speculative purposes to the extent permitted by the regulations of the
Commodities Futures Trading Commission ("CFTC").
Futures contracts have been designed by boards of trade which have been
designated as "contract markets" by the 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 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.
Successful hedging depends on a strong correlation between the market for the
underlying securities or currency and the futures contract market for those
securities or currency. There are several factors that will probably prevent
this correlation from being a perfect one and even a correct forecast of general
interest rate, securities market or currency trends may not result in a
successful hedging transaction. There are significant differences between the
securities or currency and futures markets which could create an imperfect
correlation between the markets and which could cause a given hedge not to
achieve its objectives. The degree of imperfection of correlation depends on
circumstances such as: variations in speculative market demand for financial
futures and securities, including technical influences in futures trading and
differences between the financial instruments being hedged and the instruments
underlying the standard
6
<PAGE> 111
financial futures contracts available for trading in such respects as interest
rate and securities price levels, maturities, and creditworthiness of issuers.
The degree of imperfection may be increased if the debt securities underlying an
interest rate futures contract are lower-rated and, thus, subject to greater
fluctuation in price than higher-rated securities.
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. In the event
participants decide to make or take delivery 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 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.
7
<PAGE> 112
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 Code for maintaining
its qualification as a regulated investment company for federal income tax
purposes.
When the Fund purchases a 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
which is equal to the underlying value of the futures contract reduced by the
amount of initial and variation margin held in the account of its broker.
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 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)
8
<PAGE> 113
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 written call, 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 Standard & Poor's) in a segregated account with
the Fund's custodian, and (ii) the covering call expires at the same time as on
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 the underlying securities or currency it intends to acquire for the
Fund's portfolio and will maintain in a segregated account with its custodian
bank cash, 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.
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 to the option to be used
for other investments. If the Fund desires to sell a particular security from
its portfolio on which it has
9
<PAGE> 114
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 net 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
a 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 (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. Although the Fund will not make a practice of short-term
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 purchase securities that are not registered
("restricted securities") under the Securities Act of 1933 ("1933 Act"),
including securities offered and sold to "qualified institutional buyers" under
Rule 144A under the 1933 Act. However, the Fund will not invest more than 15% of
its 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
10
<PAGE> 115
trading markets for specific Rule 144A securities, that they are liquid, then
such 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 Trustees,
however, will retain sufficient oversight and be ultimately responsible for the
determinations. The Trustees 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.
FUNDAMENTAL INVESTMENT RESTRICTIONS
The following investment restrictions will not be changed without approval of a
majority of the Fund's outstanding voting securities which, as used in the
Prospectus and this Statement of Additional Information, means approval by the
lesser of (1) 67% or more of the shares represented at a meeting if at least 50%
of the Fund's outstanding shares are present in person or by proxy at that
meeting or (2) 50% of the Fund's outstanding shares.
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 and options on future contracts, forward contracts, forward
commitments and repurchase agreements entered into in accordance with the Fund's
investment policies, and the pledge, mortgage or hypothecation of the Fund's
assets within the meaning of paragraph 3 below, are not deemed to be 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. The Fund will not purchase
securities while outstanding borrowings exceed 5% of the Fund's total assets.
(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 or any interest therein, 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 (1) 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, (2) enter into repurchase agreements, and (3)
purchase all or a portion of an issue of publicly distributed debt securities,
bank loan participation interests, bank certificates of deposit, bankers'
11
<PAGE> 116
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) 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 same industry, except that
the Fund shall invest at least 25% of the value of its total assets on
securities of issuers in the health care industry.
NONFUNDAMENTAL INVESTMENT RESTRICTIONS
The following restrictions are designated as nonfundamental and may be changed
by the Board of Trustees without shareholder approval.
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) such
purchase would result in more than 3% of the total outstanding voting securities
of any one such investment company being held by the Fund, or (iii) more than 5%
of the Fund's assets would be invested in any one such investment company.
12
<PAGE> 117
(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 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.
(The staff of the Securities and Exchange Commission considers over-the-counter
options to be illiquid securities subject to the 15% limit.)
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 or investment
policies more restrictive than those described above. Should the Trustees
determine that any such more restrictive policy is no longer in the best
interests 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 a states securities administrator that it will not purchase the
following securities:
The Fund will not invest in real estate limited partnership interests.
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. The Fund has no current intention of
investing in other investment companies.
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.
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.
The Fund will not invest more than 15% of its total assets in the
aggregate in securities of issuers which, together with any
predecessors, have a record of less than three years
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<PAGE> 118
continuous operation, and in securities of issuers which are restricted
as to disposition, including securities eligible for resale pursuant to
Rule 144A under the Securities Act of 1933.
The Fund will not, with respect to 75% of its total assets, acquire
more than 10% of the outstanding voting securities of any issuer.
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 Trust 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
and directors of the Fund's principal distributor, John Hancock Funds, Inc.
("John Hancock Funds").
The following table sets forth the principal occupation of employment of the
Trustees and principal officers of the Fund:
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<PAGE> 119
<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.
15
<PAGE> 120
<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 Representatives, Inc.;
Director, the Hudson City Savings Bank.
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
31 Milk Street Company (a trust company); Director,
Boston, Massachusetts Groundwater Technology, Inc. (remediation);
Samuel Cabot, Inc.; Advisor, Kestrel Venture
Management.
</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> 121
<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 Company; Director,
John Hancock Place the Adviser, the Affiliated Companies, John
P.O. Box 111 Hancock Distributors, Inc., JH Networking
Boston, Massachusetts 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.
Edward J. Spellman, CPA Trustee (4) Partner, KPMG Peat Marwick LLP (retired June
259C Commercial Bld. 1990).
Lauderdale, 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 Operating Officer, the
101 Huntington Avenue Adviser; Executive Vice President, the Adviser
Boston, Massachusetts (until December 1994); Senior Vice President;
the Adviser (until December 1993); Vice
President, the Adviser, until 1991.
*Thomas H. Drohan Senior Vice President and Senior Vice President and Secretary, the
101 Huntington Avenue Secretary Adviser.
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.
17
<PAGE> 122
<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
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,
101 Huntington Avenue Secretary and Compliance the 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.
18
<PAGE> 123
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 the Fund's 1995 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 Fund for their services.
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
AGGREGATE BENEFITS ACCRUED TOTAL COMPENSATION FROM THE FUND AND
COMPENSATION FROM AS PART OF THE JOHN HANCOCK FUND COMPLEX TO
INDEPENDENT TRUSTEES THE FUND FUND'S EXPENSES TRUSTEES(1)
- -------------------- -------- --------------- -----------
(Total of 17 Funds)
<S> <C> <C> <C>
Dennis S. Aronowitz $ 357 $ -- $ 61,050.00
Richard P. Chapman 367 250 62,800.00
William J. Cosgrove 357 239 61,050.00
Gail D. Fosler 357 -- 60,800.00
Bayard Henry 341 -- 58,850.00
Edward J. Spellman 357 -- 61,050.00
------ ---- -----------
$2,136 $489 $365,600.00
</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, 1995.
The nominees of the Funds may at times be the record holders in excess of 5% of
shares of any one or more Funds by virtue of holding shares in "street name." As
of December 1, 1995, the officers and trustees of the Trusts as a group owned
less than 1% of the outstanding shares of erach class of each of the Funds.
As of December 1, 1995, the following shareholders beneficially owned 5% of or
more of the outstanding shares of the Funds listed below:
<TABLE>
<CAPTION>
NUMBER OF SHARES PERCENTAGE TO
FUND AND CLASS OF OF BENEFICIAL OUTSTANDING SHARES OF
NAME AND ADDRESS OF SHAREHOLDER SHARES INTEREST OWNED THE CLASS OF THE FUND
------------------------------- ------ -------------- ---------------------
<S> <C> <C> <C>
Merrill Lynch Pierce Fenner & Smith, Inc. Class B Shares 35,216 6.94%
Attn: Mutual Fund Operations
4800 Deer Lake Drive East
Jacksonville, FL 32246-6484
</TABLE>
19
<PAGE> 124
As of June 16, 1992, the Trustees established an advisory board in order to
provide information of a general medical and scientific nature to investment
officers of the Fund. The members of the advisory board are distinct from the
Board of Trustees, hold office at the pleasure of the Trustees, are persons with
scientific and medical expertise who do not serve the Fund in any other
capacity, and are persons who have no power to determine what securities are
purchased or sold.
Currently, the advisory board consists of: Mark S. Klempner, M.D., Professor of
Medicine, physician and scientist, since 1978 with the New England Medical
Center Hospitals - Tufts University School Of Medicine, located at 750
Washington Street, Boston, Massachusetts 02111; Deeb Salem, M.D., since 1987 the
Chief of Cardiology and Professor of Medicine with the New England Medical
Center Hospitals - Tufts University School of Medicine, located at 750
Washington Street, Boston, Massachusetts 02111; and Martin A. Samuels, M.D.,
since 1988 Chief of Neurology with Brigham and Woman's Hospitals, 75 Francis
Street, Boston, Massachusetts 02115. The Fund pays each member of the advisory
board an annual retainer fee of $10,000.
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 which the Adviser
provides the Fund with a continuous investment program, consistent with the
Fund's stated investment objective and policies. The Adviser is responsible for
the day to day 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 other
funds or clients 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 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 and
the Fund's advisory board 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 Life Company and its affiliates.
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
20
<PAGE> 125
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. Effective January 3, 1994 the Adviser has permanently waived the payment
of any officers' salaries either directly or through reimbursement by 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), and the continuous public
offering of the shares of the Fund are borne by the Fund. Class expenses
properly allocable to either Class A or Class B shares will be borne exclusively
by such class of shares, subject to conditions the Internal Revenue Service
imposes with respect to multiple class structures.
As provided by the investment management contract, the Fund pays the Adviser
quarterly an investment management fee, which is based on a stated percentage of
the Fund's average daily net assets as follows:
<TABLE>
<CAPTION>
Net Asset Value Annual Rate
--------------- -----------
<S> <C>
First $200,000,000 0.80%
Amount over $200,000,000 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.
On August 31, 1995, the net assets of the Fund were $30,727,481. For the fiscal
years ended August 31, 1995 and 1994, the Adviser received fees of $190,775 and
$145,229, respectively . For the fiscal year ended August 31, 1993, the Adviser
received a fee of $86,937, net of a reimbursement of expenses to the Fund in the
amount of $40,548.
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 may not exceed 2 1/2% of the first $30,000,000 of the Fund's average
net assets, 2% of the next $70,000,000 of such net assets and 1 1/2% of the
remaining average net assets. When calculating the above limit, the Fund may
exclude interest, brokerage commissions and extraordinary expenses.
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 $16 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 1,080,000 shareholders.
21
<PAGE> 126
The Adviser is an affiliate of the Life Company, one of the most recognized and
respected financial institutions in the nation. With total assets under
management of more than $80 billion, the Life Company is one of ten largest life
insurance companies in the United States, and carries high ratings from Standard
& Poor's and A.M. Best's. Founded in 1862, Life Company has been serving clients
for over 130 years.
Under the investment management contract, the Fund may use the name "John
Hancock" 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 Company may grant the nonexclusive 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 the Life Company or any subsidiary or
affiliate thereof or any successor to the business of any subsidiary or
affiliate thereof shall be the investment adviser.
The investment management contract, and the distribution contract discussed
below, continue in effect from year to year if approved annually by vote of a
majority of the Trustees who are not interested persons of one of the parties to
the contract, cast in person at a meeting called for the purpose of voting on
such approval, and by either the Trustees or the holders of a majority of the
Fund's outstanding voting securities. Each of these contracts automatically
terminates upon assignment and may be terminated without penalty on 60 days'
notice at the option of either party to the contract or by vote of a majority of
the outstanding voting securities of the Fund.
DISTRIBUTION CONTRACT
The Fund has entered into a distribution contract pertaining to each class of
shares with John Hancock Funds. Under the contract, John Hancock Funds is
obligated to use its best efforts to sell shares of each class on behalf of the
Fund. Shares of the Fund are also sold by selected broker-dealers (the "Selling
Brokers") 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 any
applicable sales charge. In connection with the sale of Class A or Class B
shares of the Fund, 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 purchase or, in the case of Class B shares, on a deferred basis. The sales
charges are listed in the Fund's Prospectus.
The Fund's Trustees adopted Distribution Plans with respect to Class A and Class
B shares (the "Plans"), pursuant to Rule 12b-1 under the Investment Company Act.
Under the Plans, the Fund will pay distribution and service fees for Class A and
Class B shares at an aggregate annual rate of up to 0.30% and 1.00%,
respectively, of the Fund's daily net assets. However, 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
distribution costs incurred in the promotion of sales of Fund shares, 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
22
<PAGE> 127
as a liability of the Fund. The Plans were approved by a majority of the voting
securities of the Fund. The Plans and all amendments were 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.
During the fiscal year ended August 31, 1995 the Funds paid John Hancock Funds
the following amounts of expenses with respect to the Class A and Class B shares
of the Fund:
Expense Items
<TABLE>
<CAPTION>
Printing and Mailing Interest, Carrying
of Prospectus to New Compensation to or Other Finance
Advertising Shareholders Selling Brokers Charges Other
----------- ------------ --------------- -------------
<S> <C> <C> <C> <C>
Global Rx
Class A shares $19,753 $ 411 $18,110 $ 0
Class B shares $11,932 0 $ 2,782 $5,530
</TABLE>
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 the vote of a majority of the Independent Trustees or
(b) by the vote of a majority of the Fund's outstanding voting securities, in
each case 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 vote of the
Trustees and the Independent Trustees of the Fund. The holders of Class A 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 the
Plans 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 Plan, 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."
23
<PAGE> 128
NET ASSET VALUE
For purposes of calculating the net asset value ("NAV") of a Fund's shares, the
following procedures are utilized wherever applicable.
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 shares 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, 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
Class A 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
24
<PAGE> 129
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 Charge. As described in the Prospectus, Class A shares of the Fund
may be sold without a sales charge to the persons described in the Prospectus.
Accumulation Privilege. Investors (including investors combining purchases) who
are already Class A shareholders may also obtain the benefit of a reduced sales
charge by taking into account not only the amount then being invested but also
the purchase price or 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 a sales charge.
Letter of Intention. Reduced sales charges are also applicable to investments
made over a specified 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 IRAs, SEP, SARSEP, TSA,
401(k), 403(b) plans, 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 in 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 Class A 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 Class A shares will be released. If the total investment specified in the
LOI is not completed, the Class A 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 Class A 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 Class A shares and may be terminated at any
time.
25
<PAGE> 130
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.
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
Exchange Privilege. As described more fully in the 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 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
26
<PAGE> 131
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, the distribution of
cash pursuant to this plan 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 investment 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 check.
The program may be discontinued by the shareholder either by calling
Investor Services or upon written notice to Investor 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 of the other John Hancock mutual funds, subject to the
minimum investment limit in 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 any of the other John Hancock
mutual funds. If a CDSC was paid upon a redemption, a shareholder may reinvest
the proceeds from such 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 charge 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 Fund shares is a taxable transaction for Federal
income tax purposes even if the reinvestment privilege is exercised, and any
gain or loss realized by a shareholder on the redemption or other disposition of
Fund shares will be treated for tax purposes as described under the caption "Tax
Status."
27
<PAGE> 132
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 two 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 new 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.
The shares of each class of the Fund represent an equal proportionate interest
in the aggregate net assets attributable to that class of the Fund. A sales
charge will be imposed either at the time of the purchase, for Class A shares,
or on a contingent deferred basis, for Class B shares. For Class A shares, no
sales charge is payable at the time of purchase on investments of $1 million or
more, but for such investments a contingent deferred sales charge may be imposed
in the event of certain redemption transactions within one year of purchase.
Class A shares and Class B shares have certain exclusive voting rights on
matters relating to their respective distribution plans. The different classes
of the Fund may bear different expenses relating to the cost of holding
shareholder meetings necessitated by the exclusive voting rights of any class of
shares.
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) the distribution and service fees relating
to Class A and Class B shares will be borne exclusively by that class (ii) Class
B shares will pay higher distribution and service fees than Class A shares and
(iii) each of Class A and Class B shares will bear any other 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.
In the event of liquidation, shareholders are entitled to share pro rata in the
net assets of the Fund available for distribution to such shareholders. Shares
entitle their holders to one vote per share, are freely transferable and have no
preemptive, subscription or conversion rights. When issued, shares are fully
paid and non-assessable, by the Trust, except as set forth below.
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.
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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 Fund's Declaration of Trust contains an express
disclaimer of shareholder liability for acts, obligations or affairs of the
Fund. The Declaration of Trust also provides for indemnification out of the
Fund's assets for all losses and expenses of any Fund shareholder held
personally liable by reason of being or having been a shareholder. Liability is
therefore limited to circumstances in which the Fund itself would be unable to
meet its obligations, and the possibility of this occurrence is remote.
TAX STATUS
Each series of the Trust, including the Fund, is treated as a separate entity
for tax purposes. The Fund has qualified and elected to be treated as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code") and intends to continue to so qualify 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 in accordance with the timing
requirements of the Code.
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.
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
Fund's 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 each share so received equal to the amount of
cash which they would have receive 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.
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If the Fund invests in stock of certain non-U.S. corporations that receive at
least 75% of their annual gross income from passive sources (such as interest
producing investments, dividends, rentals, royalties or capital gain) or hold at
least 50% of their assets in investments producing such passive income ("passive
foreign investment companies"), the Fund could be subject to Federal income tax
and additional interest charges on "excess distributions" received from these
passive foreign investment companies, even if all income or gain actually
received by the Fund is timely distributed to its shareholders. The Fund would
not be able to pass through to its shareholders any credit or deduction for such
a tax. Certain elections if available ameliorate these adverse tax consequences.
Accordingly, the Fund may limit its investments in 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
these 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 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 income and losses and hence 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.
In some instances, these tax rules may make it more difficult for the Fund to
qualify as a regulated investment company under the Code.
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. At
the time of an investor's purchase of Fund shares, a portion of the purchase
price is often attributable to realized or unrealized appreciation in the Fund's
portfolio or undistributed taxable income of the Fund. Consequently, subsequent
distributions on shares from such an appreciation of income may be taxable to
such investor even if the net asset value of the investor's shares is, as a
result of the distributions, reduced below the investor's 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 tax 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
Class A 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. This disregarded charge will result in an increase in the
shareholder's tax basis in the Class A shares subsequently acquired. Also, any
loss realized on a
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redemption or exchange may be disallowed to the extent the shares disposed of
are replaced with other shares of the Fund 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 automatic 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 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
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
shares in the Fund 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 net capital gains, if any, during
the eight years following the year of the loss. To the extent subsequent net
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 carry forwards
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, if
any. Additionally, any corporate shareholder should consult its tax adviser
regarding the possibility that its tax 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
redemption or other disposition of the shares.
The Fund may be subject to withholding and other taxes imposed by foreign
countries with respect to its investments in foreign securities. Tax conventions
between certain countries and the
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U.S. 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 value 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.
If the election is made, 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, against their
U.S. Federal 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 income 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 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 redemption (including an exchange) 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, and receipt of distributions, from, the Fund in their particular
circumstances.
Non-U.S. 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. These investors may be
subject to non-resident alien withholding tax at the rate of 30% (or a lower
rate under an applicable tax treaty) on amounts treated as ordinary dividends
from the Fund and, unless an effective IRS Form W-8 or authorized substitute is
on file, to 31% backup withholding on certain other payments from the Fund.
Non-U.S. investors should consult their tax advisers regarding such treatment
and the application of foreign taxes to an investment in the Fund.
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 also not be required to pay any Massachusetts income tax.
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CALCULATION OF PERFORMANCE
The average annual total return on Class A shares of the Fund for the year ended
August 31, 1995 and life of fund was 24.34% and 20.19%, respectively. The
average annual total return on Class B shares of the Fund for the year ended
August 31, 1995 and since commencement of operation on March 7, 1994 was 24.71%
and 30.37%, respectively.
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 = (The nth root of ERV divided by 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 10 year periods.
In the case of Class A or Class B shares, this calculation assumes the
maximum sales charge of 5.00% is included in the initial investment or the CDSC
is applied at the end of the period, respectively. 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 charge 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 5.00% sales charge on Class A
shares or the CDSC on Class B shares into account. 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," monthly publications
which tracks net assets and total return on 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.
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Performance rankings and ratings reported periodically in national financial
publications such as MONEY Magazine, FORBES, BUSINESS WEEK, THE WALL STREET
JOURNAL, MICROPAL, INC., MORNINGSTAR, STANGERS, AND BARRON'S, may 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 are all examples of items that can increase or decrease
the Fund's performance.
BROKERAGE ALLOCATION
Decisions concerning the purchase and sale of portfolio securities of the Fund
are made by officers of the Trust pursuant to recommendations made by an
investment committee of the Adviser, which consists of officers and directors of
the Adviser, officers and Trustees who are interested persons of the Trust.
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 maker reflect a "spread." 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 such other policies as 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 broker 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
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 make no commitment to allocate portfolio transactions upon any
prescribed basis. While the Adviser will be primarily responsible for the
allocation of the Fund's brokerage business, the policies and practices of the
Adviser in this regard must be consistent with the foregoing and will at all
times be subject to review by the Trustees. For the years ended August 31, 1993,
1994, and 1995 the Fund paid negotiated brokerage commissions in the amount of
$31,430, $18,059, and $21,243, respectively.
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As permitted by Section 28(e) of the Securities Exchange Act of 1934, the Fund
may pay to 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 such price is
reasonable in light of the services provided and to such policies as the
Trustees may adopt from time to time. During the fiscal year ended August 31,
1995, the Fund did not pay commissions as compensation to any brokers for
research services such as industry, economic and company reviews and evaluations
of securities.
The Adviser's indirect parent, the Life Company, is the indirect sole
shareholder of John Hancock Distributors, Inc. ("Distributors"), a broker-dealer
and John Hancock Freedom Securities Corporation and its two broker-dealer
subsidiaries, Tucker Anthony Incorporated and Sutro & Company, Inc. ("Sutro"),
each ("an Affiliated Broker"). The Fund may, however, purchase securities from
other members of underwriting syndicates of which Affiliated Brokers are members
but only in accordance with the policy set forth above and procedures adopted
and reviewed periodically by the Trustees. For the fiscal year ended August 31,
1995, the Fund paid no commissions to 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 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 includes 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.
TRANSFER AGENT SERVICES
John Hancock Investor Services Corporation, ("Investor Services"), P.O. Box
9116, Boston, MA 02205-9116, a wholly-owned indirect subsidiary of the Life
Company, is the transfer and dividend paying agent for the Fund. The Fund pays
an annual fee of $16.00 for each Class A shareholder and $18.50 for each Class B
shareholder, plus certain out-of-pocket expenses. These expenses are aggregated
and charged to the Fund and allocated to each class on the basis of the relative
net asset values.
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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, State Street Bank
and Trust Company performs custody, portfolio and fund accounting services.
INDEPENDENT AUDITORS
The independent accountants of the Fund are Price Waterhouse LLP, 160 Federal
Street, Boston, Massachusetts 02110. Price Waterhouse LLP audits and renders an
opinion on the Fund's annual financial statements and reviews the Fund's annual
Federal income tax return.
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APPENDIX A
DESCRIPTION OF BOND RATINGS *
Moody's Bond ratings
Bonds. "Bonds which are rated 'AAA' are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
'gilt edge.' Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most likely to impair
the fundamentally strong position of such issues.
"Bonds which are rated 'AA' are judged to be of high quality by all standards.
Together with the 'Aaa' group they comprise what are generally known as high
grade bonds. They are rated lower than the best bonds because margins of
protection may not be as large as in 'Aaa' securities or fluctuation of
protective elements may be of greater amplitude or there may be other elements
present which make the long term risks appear somewhat larger than in 'Aaa'
securities.
"Bonds which are rated 'A' possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate but elements may be present which
suggest a susceptibility to impairment sometime in the future.
"Bonds which are rated 'BAA' are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.
"Bonds which are rated 'BA' are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of interest
and principal payments may be very moderate and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position,
characterizes bonds in this class.
"Bonds which are rated 'B' generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Where no rating has been assigned or where a rating has been suspended or
withdrawn, it may be for reasons unrelated to the quality of the issue. Should
no rating be assigned, the reason may be one of the following: (i) an
application for rating was not received or accepted; (ii) the issue or issuer
belongs to a group of securities that are not rated as a matter of policy; (iii)
there is a lack of essential data pertaining to the issue or issuer; or (iv) the
issue was privately placed, in which case the rating is not published in Moody's
publications.
Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.
- --------
* As described by the rating companies themselves.
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Standard & Poor's Bond ratings
"AAA. Debt rated 'AAA' has the highest rating by Standard & Poor's. Capacity to
pay interest and repay principal is extremely strong.
"AA. Debt rated 'AA' has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.
"A. Debt rated 'A' has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
"BBB. Debt rated 'BBB' is regarded as having adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than in higher rated categories."
Debt rated "BB," OR "B," is regarded, on balance, as predominantly speculative
with respect to the issuer's capacity to pay interest and pay principal in
accordance with the terms of the obligation. "BB" indicates the lowest degree of
speculation and "CC" the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, these may be outweighed
by large uncertainties or major risk exposures to adverse conditions.
UNRATED. This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular type of obligation as a matter of policy.
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COMMERCIAL PAPER RATINGS
Moody's Commercial Paper Ratings
Moody's ratings for commercial paper are opinions of the ability of issuers to
repay punctually promissory obligations not having an original maturity in
excess of nine months. Moody's two highest commercial paper rating categories
are as follows:
"P-1 -- "Prime-1" indicates the highest quality repayment capacity of the rated
issues.
"P-2 -- "Prime-2" indicates that the issuer has a strong capacity for repayment
of short-term promissory obligations. Earnings trends and coverage ratios, while
sound, will be more subjective to variation. Capitalization characteristics,
while still appropriate, may be more affected by external conditions. Ample
alternate liquidity is maintained." Standard & Poor's Commercial Paper Ratings
Standard & Poor's commercial paper ratings are current assessments of the
likelihood of timely payment of debts having an original maturity of no more
than 365 days. Standard & Poor's two highest commercial paper rating categories
are as follows:
"A-1 -- This designation indicates that the degree of safety regarding timely
payment is very strong. Those issues determined to possess overwhelming safety
characteristics will be denoted with a plus (+) sign designation.
"A-2 -- Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues designated
A-1."
39
<PAGE> 144
FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
THE STATEMENT OF ASSETS AND LIABILITIES IS THE FUND'S BALANCE SHEET AND SHOWS
THE VALUE OF WHAT THE FUND OWNS, IS DUE AND OWES ON AUGUST 31, 1995. YOU'LL ALSO
FIND THE NET ASSET VALUE AND THE MAXIMUM OFFERING PRICE PER SHARE AS OF THAT
DATE.
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Common stocks, warrants and units
(cost - $19,280,894)...................................... $29,754,795
Joint repurchase agreement (cost - $1,065,000).............. 1,065,000
-----------
30,819,795
Receivable for shares sold................................... 86,628
Interest receivable.......................................... 172
Dividends receivable......................................... 12,310
Foreign tax receivable....................................... 1,168
Other assets................................................. 179
Deferred organization expenses - Note A...................... 8,903
-----------
Total Assets................................ 30,929,155
---------------------------------------------------------
LIABILITIES:
Payable for shares repurchased............................... 14,254
Payable to John Hancock Advisers, Inc. and
affiliates - Note B......................................... 83,216
Accounts payable and accrued expenses........................ 104,204
-----------
Total Liabilities........................... 201,674
---------------------------------------------------------
NET ASSETS:
Capital paid-in.............................................. 19,998,374
Accumulated net realized gain on investments and
foreign currency transactions............................... 255,147
Net unrealized appreciation of investments and
foreign currency transactions............................... 10,473,960
-----------
Net Assets.................................. $30,727,481
=========================================================
NET ASSET VALUE PER SHARE:
(Based on net asset values and shares of beneficial
interest outstanding - unlimited number of shares
authorized with no par value, respectively)
Class A - $24,394,496 / 1,128,895............................ $ 21.61
==========================================================================
Class B - $6,332,985 / 296,602............................... $ 21.35
==========================================================================
MAXIMUM OFFERING PRICE PER SHARE*
Class A - ($21.61 x 105.26%)................................. $ 22.75
==========================================================================
<FN>
* 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.
</TABLE>
THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED
AND EXPENSES INCURRED IN OPERATING THE FUND. IT ALSO SHOWS NET GAINS (LOSSES)
FOR THE PERIOD STATED.
<TABLE>
STATEMENT OF OPERATIONS
Year ended August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest..................................................... $ 77,520
Dividends (net of foreign withholding taxes of $4,239)....... 55,919
-----------
133,439
-----------
Expenses:
Investment management fee - Note B.......................... 190,775
Transfer agent fee - Note B
Class A................................................... 88,290
Class B................................................... 21,798
Distribution/service fee - Note B
Class A................................................... 61,433
Class B................................................... 33,692
Custodian fee............................................... 62,189
Registration and filing fees................................ 54,670
Advisory board fee - Note B................................. 45,000
Printing.................................................... 32,218
Auditing fee................................................ 31,500
Organization expense - Note A............................... 8,196
Legal fees.................................................. 3,520
Trustees' fees.............................................. 3,269
Miscellaneous............................................... 2,896
-----------
Total Expenses.............................. 639,446
---------------------------------------------------------
Net Investment Loss......................... (506,007)
---------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
AND FOREIGN CURRENCY TRANSACTIONS:
Net realized gain on investments sold........................ 1,231,564
Net realized loss on foreign currency transactions........... (7,031)
Change in net unrealized appreciation/depreciation of
investments................................................. 5,931,181
Change in net unrealized appreciation/depreciation of
foreign currency transactions............................... (27)
-----------
Net Realized and Unrealized
Gain on Investments and
Foreign Currency Transactions............... 7,155,687
---------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations................... $ 6,649,680
=========================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 145
FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<CAPTION>
YEAR ENDED AUGUST 31,
-----------------------------
1995 1994
------------- -------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment loss......................................................................... $ (506,007) $ (366,484)
Net realized gain (loss) on investments sold and foreign currency transactions.............. 1,224,533 (278,198)
Change in net unrealized appreciation/depreciation of investments and foreign currency
transactions.............................................................................. 5,931,154 4,253,495
------------ ------------
Net Increase in Net Assets Resulting from Operations...................................... 6,649,680 3,608,813
------------ ------------
FROM FUND SHARE TRANSACTIONS -- NET*.......................................................... 4,364,193 457,678
------------ ------------
NET ASSETS:
Beginning of period......................................................................... 19,713,608 15,647,117
------------ ------------
End of period............................................................................... $30,727,481 $19,713,608
============ ============
<FN>
* ANALYSIS OF FUND SHARE TRANSACTIONS:
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
---------------------------------------------------
1995 1994
------------------------ -------------------------
SHARES AMOUNT SHARES AMOUNT
--------- ------------ ---------- -------------
<S> <C> <C> <C> <C>
CLASS A
Shares sold................................................. 517,942 $9,800,086 476,656 $ 7,537,387
Less shares repurchased..................................... (517,990) (9,686,022) (517,274) (8,116,676)
-------- ----------- --------- ------------
Net increase/(decrease)..................................... (48) $ 114,064 (40,618) $ (579,289)
======== =========== ========= ============
CLASS B **
Shares sold................................................. 451,492 $8,376,819 67,168 $ 1,071,145
Less shares repurchased..................................... (219,936) (4,126,690) (2,122) (34,178)
-------- ----------- --------- ------------
Net increase................................................ 231,556 $4,250,129 65,046 $ 1,036,967
======== =========== ========= ============
<FN>
** Class B shares commenced operations on March 7, 1994
</TABLE>
THE STATEMENT OF CHANGES IN NET ASSETS SHOWS HOW THE VALUE OF THE FUND'S NET
ASSETS HAS CHANGED SINCE THE END OF THE PREVIOUS PERIOD. THE DIFFERENCE REFLECTS
EARNINGS LESS EXPENSES, ANY INVESTMENT AND FOREIGN CURRENCY GAINS AND LOSSES,
AND ANY INCREASE OR DECREASE IN MONEY SHAREHOLDERS INVESTED IN THE FUND. THE
FOOTNOTE ILLUSTRATES THE NUMBER OF FUND SHARES SOLD AND REDEEMED DURING THE LAST
TWO PERIODS, ALONG WITH THE CORRESPONDING DOLLAR VALUES.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 146
FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
<TABLE>
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout the
periods indicated, investment returns, key ratios and supplemental data are as
follows:
- ----------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
FOR THE PERIOD
OCTOBER 1, 1991
(COMMENCEMENT
OF OPERATIONS)
YEAR ENDED AUGUST 31, TO AUGUST 31,
------------------------------ ---------------
1995 1994 1993 1992
------- ------- ------- -------
<S> <C> <C> <C> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period.......................................... $ 16.51 $ 13.38 $ 13.34 $ 10.00
------- ------- ------- -------
Net Investment Loss........................................................... (0.36)(b) (0.32) (0.23) (0.03)
Net Realized and Unrealized Gain on Investments and Foreign Currency
Transactions................................................................ 5.46 3.45 0.27 3.37
------- ------- ------- -------
Total from Investment Operations............................................. 5.10 3.13 0.04 3.34
------- ------- ------- -------
Net Asset Value, End of Year.................................................. $ 21.61 $ 16.51 $ 13.38 $ 13.34
======= ======= ======= =======
Total Investment Return at Net Asset Value.................................... 30.89% 23.39% 0.30% 33.40%(e)
Total Adjusted Investment Return at Net Asset Value (d)(f).................... -- -- 0.04% 32.11%(e)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)..................................... $24,394 $18,643 $15,647 $14,702
Ratio of Expenses to Average Net Assets**..................................... 2.56% 2.55% 2.50% 1.98%*
Ratio of Adjusted Expenses to Average Net Assets (d).......................... -- -- 2.76% 3.39%*
Ratio of Net Investment Loss to Average Net Assets............................ (1.99%) (2.01%) (1.67%) (0.51%)*
Ratio of Adjusted Net Investment Loss to Average Net Assets (d)............... -- -- (1.93%) (1.92%)*
Portfolio Turnover Rate....................................................... 38% 52% 93% 48%
**Expense Reimbursement Per Share............................................. -- -- $ 0.035 $ 0.085
</TABLE>
THE FINANCIAL HIGHLIGHTS SUMMARIZES THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIOD INDICATED: NET INVESTMENT LOSS, GAINS (LOSSES),
DIVIDENDS AND TOTAL INVESTMENT RETURN OF THE FUND. IT SHOWS HOW THE FUND'S NET
ASSET VALUE FOR A SHARE HAS CHANGED SINCE THE END OF THE PREVIOUS PERIOD.
ADDITIONALLY, IMPORTANT RELATIONSHIPS BETWEEN SOME ITEMS PRESENTED IN THE
FINANCIAL STATEMENTS ARE EXPRESSED IN RATIO FORM.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 147
FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
<TABLE>
FINANCIAL HIGHLIGHTS (continued)
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
PERIOD
YEAR ENDED ENDED
AUGUST 31, AUGUST 31,
1995 1994
---------- ----------
<S> <C> <C>
CLASS B**
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period....................................................... $ 16.46 $ 17.29(a)
-------- -------
Net Investment Loss........................................................................ (0.55)(b) (0.17)(b)
Net Realized and Unrealized Gain (Loss) on Investments and Foreign Currency Transactions... 5.44 (0.66)(c)
-------- -------
Total from Investment Operations.......................................................... 4.89 (0.83)
-------- -------
Net Asset Value, End of Period............................................................. $ 21.35 $ 16.46
======== =======
Total Investment Return at Net Asset Value................................................. 29.71% (4.80%)(e)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted).................................................. $ 6,333 $ 1,071
Ratio of Expenses to Average Net Assets.................................................... 3.45% 3.34%*
Ratio of Net Investment Loss to Average Net Assets......................................... (2.91%) (2.65%)*
Portfolio Turnover Rate.................................................................... 38% 52%
<FN>
* On an annualized basis.
** Class B shares commenced operations on March 7, 1994.
(a) Initial price at commencement of operations.
(b) On average month end shares outstanding.
(c) May not accord to amounts shown elsewhere in the financial statements due to the timing of sales and repurchases of
fund shares in relation to fluctuating market values of the investments of the Fund.
(d) On an unreimbursed basis without expense reduction.
(e) Not annualized.
(f) Unaudited.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 148
FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY THE
GLOBAL RX FUND ON AUGUST 31, 1995. IT'S DIVIDED INTO THREE MAIN CATEGORIES:
COMMON STOCKS, WARRANTS AND UNITS AND SHORT-TERM INVESTMENTS. THE INVESTMENTS
ARE FURTHER BROKEN DOWN BY INDUSTRY GROUPS. SHORT-TERM INVESTMENTS, WHICH
REPRESENT THE FUND'S "CASH" POSITION, ARE LISTED LAST.
<TABLE>
SCHEDULE OF INVESTMENTS
August 31, 1995
<CAPTION>
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
COMMON STOCKS
BIOMEDICS - GENETICS (0.46%)
Phoenix International Life Sciences,
Inc. (Canada)**............................. 20,000* $ 141,474
-----------
DRUGS - BIOTECHNOLOGY (4.54%)
IDEXX Laboratories, Inc.**................... 30,000 1,005,000
Serologicals Corp.**......................... 25,000* 390,625
-----------
1,395,625
-----------
DRUGS - GENERIC (6.37%)
Dura Pharmaceuticals, Inc.**................. 25,000* 612,500
Fujisawa Pharmaceutical Co. (Japan).......... 40,000* 400,941
Schwarz Pharma AG (Germany)**................ 10,000* 414,991
Teva Pharmaceutical Industries Ltd.
American Depository Receipt
(ADR) (Israel).............................. 14,000 530,250
-----------
1,958,682
-----------
DRUGS - MAJOR (10.52%)
AmeriSource Health Corp. (Class A)**......... 20,000* 445,000
Astra AB (Ser B) (Sweden) **................. 20,000 649,618
Johnson & Johnson............................ 4,000 276,000
Pfizer Inc................................... 8,000 395,000
Roche Holding AG (Switzerland)............... 100 669,710
Sandoz AG (ADR) (Switzerland)................ 12,000 432,339
Schering AG (Germany)........................ 5,000 364,566
-----------
3,232,233
-----------
HEALTHCARE - ALTERNATE SITE (9.79%)
Assisted Living Concepts Inc.**.............. 15,000* 189,375
HEALTHSOUTH Corp.**.......................... 70,000 1,653,750
Integrated Health Services, Inc.............. 5,000 149,375
Lincare Holdings, Inc.**..................... 20,000 595,000
Pediatric Services of America, Inc.**........ 20,000* 422,500
-----------
3,010,000
-----------
HEALTHCARE - COST CONTAINMENT (2.13%)
CRA Managed Care, Inc.**..................... 15,000* 307,500
Value Health, Inc.**......................... 10,000 346,250
-----------
653,750
-----------
HEALTHCARE - HMO (9.42%)
Coventry Corp.**............................. 15,000 298,125
Healthsource, Inc.**......................... 25,000 1,000,000
Humana Inc.**................................ 60,000 1,095,000
OccuSystems Inc.**........................... 12,500* 262,500
Physician Corp. of America **................ 15,000 240,000
-----------
2,895,625
-----------
HEALTHCARE - MANAGEMENT (0.73%)
RTW, Inc.**.................................. 10,000* 225,000
-----------
HEALTHCARE - SOFTWARE/SERVICES (13.31%)
Cerner Corp.**............................... 20,000 680,000
HBO & Co..................................... 20,000 1,090,000
HPR Inc.**................................... 54,000* 1,323,000
Health Management Systems, Inc.**............ 15,000 461,250
PHAMIS, Inc.**............................... 20,000* 535,000
-----------
4,089,250
-----------
HOSPITAL MANAGEMENT (15.00%)
Community Health Systems, Inc.**............. 50,000 1,925,000
Health Management Associates, Inc.
(Class A) **................................ 22,500 753,750
MedPartners, Inc.**.......................... 20,000* 555,000
PhyCor, Inc.**............................... 22,500 939,375
Physician Reliance Network, Inc.**........... 15,000* 435,000
-----------
4,608,125
-----------
MEDICAL - DENTAL (7.39%)
Cardinal Health, Inc......................... 30,000* 1,605,000
Omnicare, Inc................................ 20,000 665,000
-----------
2,270,000
-----------
MEDICAL DEVICES AND PRODUCTS (13.95%)
Boston Scientific Corp.**.................... 25,000* 993,750
i-STAT Corp.**............................... 40,000* 1,440,000
Orthofix International N.V. (Netherlands)**.. 20,000 350,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 149
FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
<TABLE>
SCHEDULE OF INVESTMENTS
August 31, 1995
<CAPTION>
ISSUER, DESCRIPTION NUMBER OF SHARES MARKET VALUE
- ------------------- ---------------- ------------
<S> <C> <C>
MEDICAL DEVICES AND PRODUCTS (CONTINUED)
Steris Corp.**............................... 20,000 $ 587,500
Stryker Corp.**.............................. 6,000 250,500
Sunrise Medical, Inc.**...................... 10,000 258,750
Ventritex, Inc.**............................ 20,000* 405,000
-----------
4,285,500
-----------
NURSING HOMES (3.12%)
Health Care and Retirement Corp.**........... 15,000 472,500
Manor Care, Inc.............................. 15,000 485,625
-----------
958,125
-----------
TOTAL COMMON STOCKS
(Cost $19,250,643) (96.73%) 29,723,389
------ -----------
<CAPTION>
NUMBER OF
WARRANTS, UNITS
---------------
<S> <C> <C>
WARRANTS AND UNITS
DRUGS - BIOTECHNOLOGY (0.08%)
Oxigene, Inc. (Warrants)**................... 15,000 26,250
-----------
DRUGS - GENERIC (0.02%)
Therapeutic Discovery Corp. (Units)**........ 750 5,156
-----------
TOTAL WARRANTS AND UNITS
(Cost $30,252) (0.10%) 31,406
------ -----------
TOTAL COMMON STOCKS,
WARRANTS AND UNITS
(Cost $19,280,894) (96.83%) 29,754,795
------ -----------
</TABLE>
<TABLE>
<CAPTION>
INTEREST PAR VALUE MARKET
ISSUER, DESCRIPTION RATE (000'S OMITTED) VALUE
- ------------------- ---- --------------- -----
<S> <C> <C> <C>
SHORT-TERM INVESTMENT
JOINT REPURCHASE AGREEMENT (3.47%)
Investment in a joint repurchase
agreement transaction with UBS
Securities, Inc. - Dated 08-31-95,
Due 9-01-95 (Secured by US
Treasury Bill, 5.540% due 05-30-96;
and US Treasury Note 5.625%,
due 01-31-98) - Note A.............. 5.800% $ 1,065 $ 1,065,000
-----------
TOTAL SHORT-TERM INVESTMENT
(Cost $1,065,000) (3.47%) 1,065,000
------- -----------
TOTAL INVESTMENTS (100.30%) $30,819,795
======= ===========
<FN>
* Securities, other than short-term investments, newly added to the portfolio
during the year ended August 31, 1995.
** Non-income producing security.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
13
<PAGE> 150
FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
THE GLOBAL RX FUND INVESTS PRIMARILY IN EQUITY SECURITIES OF ISSUERS IN THE
HEALTH CARE INDUSTRY IN THE UNITED STATES AND ABROAD. THE CONCENTRATION OF
INVESTMENTS BY INDUSTRY CATEGORY FOR INDIVIDUAL SECURITIES HELD BY THE FUND IS
SHOWN IN THE SCHEDULE OF INVESTMENTS. IN ADDITION, CONCENTRATION OF INVESTMENTS
CAN BE AGGREGATED BY VARIOUS COUNTRIES. THE TABLE BELOW SHOWS THE PERCENTAGE OF
THE FUND'S INVESTMENTS AT AUGUST 31, 1995 ASSIGNED TO THE VARIOUS COUNTRY
CATEGORIES.
<TABLE>
PORTFOLIO CONCENTRATION (Unaudited)
- --------------------------------------------------------------------------------
<CAPTION>
MARKET VALUE AS A
PORTFOLIO CONCENTRATION % OF NET ASSETS
- ----------------------- -----------------
<S> <C>
Canada..................................................... 0.46%
Germany.................................................... 2.54
Israel..................................................... 1.73
Japan...................................................... 1.30
Netherlands................................................ 1.14
Sweden..................................................... 2.11
Switzerland................................................ 3.59
United States.............................................. 87.43
------
TOTAL INVESTMENTS 100.30%
======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
14
<PAGE> 151
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
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 Rx Fund (the "Fund"), John
Hancock Pacific Basin Fund and John Hancock Global Retail 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. Shareholders of a class which bears
distribution/service expenses under terms of a distribution plan, have exclusive
voting rights to such distribution plan. Significant accounting policies of the
Fund are as follows:
VALUATION OF INVESTMENTS Securities in the Fund's portfolio are valued on the
basis of market quotations, valuations provided by independent pricing services
or, at fair value as determined in good faith in accordance with procedures
approved by the Trustees. Short-term debt investments maturing within 60 days
are valued at amortized cost which approximates market value. All portfolio
transactions initially expressed in terms of foreign currencies have been
translated into U.S. dollars as described in "Foreign Currency Translation"
below.
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 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. Capital gains realized
on some foreign securities are subject to foreign taxes and are accrued, as
applicable.
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. For Federal income tax purposes, net currency exchange gains and
losses from sales of foreign debt securities may be treated as ordinary income
even though such items are gains and losses for accounting purposes.
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. Foreign income
may be subject to foreign withholding taxes which are accrued as applicable.
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.
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.
15
<PAGE> 152
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
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.
Distribution/service fees 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.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS The Fund may enter into forward
foreign currency exchange contracts as a hedge against the effect of
fluctuations in 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 set price. The aggregate principal amounts of the contracts are
marked-to-market daily at the applicable foreign currency exchange rates. Any
resulting unrealized gains and losses are included in the determination of the
Fund's daily net assets. The Fund records realized gains and losses at the time
the forward foreign currency contract is closed out or offset by a matching
contract. Risks may arise upon entering these contracts from potential inability
of counterparties to meet the terms of the contract and from unanticipated
movements in the value of a foreign currency relative to the U.S. dollar.
These contracts involve market or credit risk in excess of the
unrealized gain or loss reflected in the Fund's Statement of Assets and
Liabilities. The Fund may also purchase and sell forward contracts to facilitate
the settlement of foreign currency denominated portfolio transactions, under
which it intends to take delivery of the foreign currency. Such contracts
normally involve no market risk other than the offset by the currency amount of
the underlying transaction.
There were no open forward foreign currency contracts at August 31,
1995.
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.
OPTIONS Listed options are valued at the last quoted sales price on the exchange
on which they are primarily traded. Over-the-counter options are valued at the
mean between the last bid and asked prices. Upon the writing of a call or put
option, an amount equal to the premium received by the Fund is included in the
Statement of Assets and Liabilities as an asset and corresponding liability. The
amount of the liability is subsequently marked-to-market to reflect the current
market value of the written option.
The Fund may use options contracts to manage its exposure to the stock
market. Writing puts and buying calls tend to increase the Fund's exposure to
the underlying instrument and buying puts and writing calls tend to decrease the
Fund's exposure to the underlying instrument, or hedge other Fund investments.
The maximum exposure to loss for any purchased options is limited to the
premium initially paid for the option. In all other cases, the face (or
"notional") amount of each contract at value reflects the maximum exposure of
the Fund in these contracts, but the actual exposure is limited to the change in
value of the contract over the period the contract remains open.
Risks may also arise if counterparties do not perform under the
contracts' terms, or if the Fund is unable to offset a contract with a
counterparty on a timely basis ("liquidity risk"). Exchange-traded
16
<PAGE> 153
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
options have minimal credit risk as the exchanges act as counterparties to each
transaction, and only present liquidity risk in highly unusual market
conditions. To minimize credit and liquidity risks in over-the-counter option
contracts, the Fund continuously monitors the creditworthiness of all its
counterparties.
At any particular time, except for purchased options, market or credit
risk may involve amounts in excess of those reflected in the Fund's period-end
Statement of Assets and Liabilities.
There were no written option transactions for the period ended August
31, 1995.
FINANCIAL FUTURES CONTRACTS The Fund may buy and sell financial futures
contracts for speculative purposes and/or to hedge against the effects of
fluctuations in interest rates, currency exchange rates and other market
conditions. At the time the Fund enters into a financial futures contract, it is
required to deposit with its custodian a specified amount of cash or U.S.
government securities, known as "initial margin", equal to a certain percentage
of the value of the financial futures contract being traded. Each day, the
futures contract is valued at the official settlement price of the board of
trade or U.S. commodities exchange. Subsequent payments, known as "variation
margin", to and from the broker are made on a daily basis as the market price of
the financial futures contract fluctuates. Daily variation margin adjustments,
arising from this "mark to market", are recorded by the Fund as unrealized gains
or losses.
When the contracts are closed, the Fund recognizes a gain or loss. Risks
of entering into futures contracts include the possibility that there may be an
illiquid market and/or that a change in the value of the contracts may not
correlate with changes in the value of the underlying securities.
For Federal income tax purposes, the amount, character and timing of the
Fund's gains and/or losses can be affected as a result of futures contracts.
At August 31, 1995, there were no open positions in financial futures
contracts.
ORGANIZATION EXPENSES Expenses incurred in connection with the organization of
the Fund have been capitalized and are being charged to the Fund's operations
ratably over a five-year period that commenced with the investment operations of
the Fund.
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, ADMINISTRATIVE SERVICES AND
TRANSACTIONS WITH AFFILIATES AND OTHERS
Under the present investment management 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 $200,000,000 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 $200,000,000.
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 Fund has a distribution agreement with John Hancock Funds, Inc. ("JH
Funds"), a wholly-owned subsidiary of the Adviser. Prior to January 1, 1995, JH
Funds was known as John Hancock Broker Distribution Services, Inc. For the
period ended August 31, 1995, JH Funds received net sales charges of $133,497.
Out of this amount $45,279 was retained and used for printing prospectuses,
advertising, sales literature and other purposes, $35,023 was paid as sales
commissions to sales personnel of unrelated broker-dealers and $53,195 was paid
as sales commissions to personnel of John Hancock Distributors, Inc.
("Distributors"), Tucker Anthony Incorporated ("Tucker Anthony") and Sutro &
Co., Inc. ("Sutro"),
17
<PAGE> 154
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
all of which are broker dealers. The Adviser's indirect parent, John Hancock
Mutual Life Insurance Company, is the indirect sole shareholder of Distributors
and John Hancock Freedom Securities Corporation and its subsidiaries, which
include FDC, Tucker Anthony and Sutro.
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 JH Funds 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 August 31,
1995, contingent deferred sales charges paid to Broker Services amounted to
$8,629.
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 makes payments to JH Funds, for
distribution and service expenses at an annual rate not to exceed 0.30% of Class
A average daily net assets and 1.00% of Class B average daily net assets 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. 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 Corporation ("Investor Services"), a wholly-owned subsidiary of The
Berkeley Financial Group. Prior to January 1, 1995, Investor Services was known
as John Hancock Fund Services, Inc. Effective January 1, 1995, the Fund pays
transfer agent fees based on transaction volume and the number of shareholder
accounts. Prior to January 1, 1995, the Fund paid 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 Fund Services on behalf of the Fund for proxy
mailings.
The Fund has an independent advisory board composed of scientific and
medical experts who provide the investment officers of the Fund with advice and
consultation on health care developments, for which the Fund pays the advisory
board a fee.
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.
Effective with the fees paid for 1995, the unaffiliated Trustees may elect to
defer for tax purposes their receipt of this compensation under the John Hancock
Group of Funds Deferred Compensation Plan. The Fund will make investments into
other John Hancock funds, as applicable, to cover its liability for the deferred
compensation. Investments to cover the Fund's deferred compensation liability
will be marked to market on a periodic basis and income earned by the investment
will be recorded on the Fund's books.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than short-term
securities, during the period ended August 31, 1995, aggregated $13,922,461 and
$8,715,229, respectively. There were no purchases or sales of long-term
obligations of the U.S. government and its agencies during the period ended
August 31, 1995.
The cost of investments owned at August 31, 1995 (including the joint
repurchase agreement) for federal income tax purposes was $20,345,894. Gross
unrealized appreciation and depreciation of investments aggregated $10,800,686
and $326,785, respectively, resulting in net unrealized appreciation of
$10,473,901.
18
<PAGE> 155
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Global Rx Fund
NOTE D --
RECLASSIFICATION OF CAPITAL ACCOUNTS
During the year ended August 31, 1995 the Fund has reclassified amounts to
reflect an increase in accumulated net realized gain on investments of $7,031, a
decrease in accumulated net investment loss of $506,007 and a decrease in
capital paid-in of $513,038. This represents the cumulative amount necessary to
report these balances on a tax basis, excluding certain temporary differences,
as of August 31, 1995. Additional adjustments may be needed in subsequent
reporting periods. These reclassifications, which have no impact on the net
asset value of the Fund, are primarily attributable to the treatment of net
operating losses in the computation of distributable income and capital gains
under federal tax rules versus generally accepted accounting principles.
19
<PAGE> 156
John Hancock Funds - Global Rx Fund
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of John Hancock Global Rx Fund and the Trustees of John
Hancock World Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of John Hancock Global Rx Fund (the
"Fund") (a portfolio of John Hancock World Fund) at August 31, 1995, the results
of its operations for the year then ended, and the changes in its net assets and
the financial highlights for the periods indicated, in conformity with generally
accepted accounting principles. These financial statements and financial
highlights (hereafter referred to as "financial statements") are the
responsibility of the Fund's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at August 31, 1995 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
Price Waterhouse LLP
Boston, Massachusetts
October 17, 1995
TAX INFORMATION NOTICE (UNAUDITED)
For Federal income tax purposes, the following information is furnished with
respect to the distributions of the Fund during the fiscal year ended August 31,
1995.
The Fund has not paid any distributions of dividends or net realized gains
during the fiscal year.
20
<PAGE> 157
JOHN HANCOCK
GLOBAL MARKETPLACE FUND
CLASS A AND CLASS B SHARES
PROSPECTUS
JANUARY 1, 1996
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Expense Information................................................................... 2
The Fund's Financial Highlights....................................................... 3
Investment Objective and Policies..................................................... 4
Organization and Management of the Fund............................................... 8
Alternative Purchase Arrangements..................................................... 9
The Fund's Expenses................................................................... 10
Dividends and Taxes................................................................... 12
Performance........................................................................... 13
How to Buy Shares..................................................................... 14
Share Price........................................................................... 15
How to Redeem Shares.................................................................. 21
Additional Services and Programs...................................................... 23
</TABLE>
This Prospectus sets forth information about John Hancock Global Marketplace
Fund (the "Fund") as a diversified series of John Hancock World Fund (the
"Trust") that you should know before investing. Please read and retain it for
future reference.
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, January 1, 1996, 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> 158
EXPENSE INFORMATION
The purpose of the following information is to help you in understanding the
various fees and expenses that you will bear, directly or indirectly when you
purchase Fund shares. The operating expenses included in the table and
hypothetical example below are based on actual fees and expenses of the Fund's
Class A shares for the fiscal year ended August 31, 1995, adjusted to reflect
current fees and expenses. There were no Class B shares issued or outstanding
during the fiscal year ended August 31, 1995. 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 (after expense limitation)....................................................... 0.00% 0.00%
12b-1 fee**..................................................................................... 0.30% 1.00%
Other expenses (after expense limitation)....................................................... 1.20% 1.20%
------- -------
Total Fund operating expenses(a)................................................................ 1.50% 2.20%
======= =======
</TABLE>
* No sales charge is payable at the time of purchase on investments in Class A
shares 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.
** 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) 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 (excluding transfer agent and distribution fees) 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 be 0.80% for Class A and
Class B shares. Other expenses would be 7.90% for class A and B shares and
the total Fund operating expenses would be 9.00% and 9.70% for Class A and
Class B shares, respectively.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
<S> <C> <C> <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 $128 $220
Class B shares
--Assuming complete redemption at end of period............................ $72 $99 $138 $236
--Assuming no redemption................................................... $22 $69 $118 $236
</TABLE>
(This example should not be considered a representation of past or future
expenses; actual expenses may be greater or less than those shown.)
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> 159
THE FUND'S FINANCIAL HIGHLIGHTS
The following financial highlights have been audited by the Fund's independent
accountants. Price Waterhouse LLP's report on the Fund's financial statements
and financial highlights for the period ended August 31, 1995 is included in the
Annual Report which is included in the Statement of Additional Information. No
Class B shares have been issued. Accordingly, no historic financial highlights
exist for Class B shares. Further information about the performance of the Fund
is contained in the Fund's Annual Report to shareholders which may be obtained
free of charge by writing or telephoning John Hancock Investor Services
Corporation, at the address or telephone number listed on the front page of this
Prospectus.
Selected data for Class A shares outstanding throughout the period is as
follows:
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 29, 1994
(COMMENCEMENT OF
OPERATIONS) TO
AUGUST 31, 1996
------------------
<S> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period........................................ $ 8.50(a)
-------
Net Investment Income....................................................... 0.01(b)
Net Realized and Unrealized Gain on Investments and Foreign Currency
Transactions.............................................................. 3.01
-------
Total from Investment Operations.......................................... 3.02
-------
Less Distributions:
Dividends from Net Investment Income........................................ (0.01)
-------
Distributions in excess of net investment income............................ (0.02)
Total Distributions....................................................... (0.03)
Net Asset Value, End of Period.............................................. $11.49
==================
Total Investment Return at Net Asset Value................................ 35.61%(d)
Total Adjusted Investment Return at Net Asset Value(c)(e)................. 28.69%(d)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted)................................... $ 712
Ratio of Expenses to Average Net Assets**................................... 1.50%*
Ratio of Adjusted Expenses to Average Net Assets(c)......................... 9.00%*
Ratio of Net Investment Income to Average Net Assets........................ 0.06%*
Ratio of Adjusted Net Investment Income to Average Net Assets(c)............ (7.44%)*
Portfolio Turnover Rate..................................................... 63%
**Expense Reimbursement Per Share........................................... $ 0.65(b)
</TABLE>
- ---------------
* On an annualized basis.
(a) Initial price to commence operations.
(b) On average month end shares outstanding.
(c) On an unreimbursed basis without expense reduction.
(d) Not annualized.
(e) Unaudited.
3
<PAGE> 160
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. 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. 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 invest in American
Depository Receipts ("ADRs"), or European Depository Receipts ("EDRs") which are
receipts typically issued by an American or European 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 DOMES- TIC AND FOREIGN
EQUITY SECURITIES.
- -------------------------------------------------------------------------------
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
4
<PAGE> 161
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 hedging strategies might
reduce the risk of loss due to a decline in the value of the hedged foreign
currency, they may also limit any potential gain which might result from an
increase in the value of that currency.
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
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.
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, 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.
SHORT SALES. The Fund may engage in short sales "against the box," as well as
short sales to hedge against or 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
5
<PAGE> 162
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'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 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 to the seller 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 and 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.
INVESTMENT RESTRICTIONS. The Fund has adopted certain investment restrictions
which are detailed in the Statement of Additional Information, where they are
designated as fundamental or non-fundamental. The Fund's investment objective
and fundamental restrictions 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's
portfolio turnover rates for recent years are shown in the section "The Fund's
Financial Highlights."
GLOBAL RISKS. Investments in foreign securities may involve certain risks not
present in domestic securities due to exchange controls, less publicly available
information, more volatile or less liquid securities markets, and the
possibility of expropriation, confiscatory taxation or political, economic or
social instability. There may be difficulty in enforcing legal rights outside
the United States. Some foreign companies are not subject to the same uniform
financial reporting requirements, accounting standards and government
supervision as domestic companies, and foreign exchange markets are regulated
differently from the U.S. stock market. 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. Finally, the expense ratios of
international funds generally are higher than those of domestic funds because
there are greater costs associated with
6
maintaining custody of foreign securities, and the increased research necessary
for international investing results in a higher advisory fee.
- -------------------------------------------------------------------------------
INVESTMENTS IN FOREIGN SECURITIES MAY
INVOLVE RISKS AND CONSIDERATIONS THAT ARE
NOT PRESENT IN DOMESTIC INVESTMENTS.
- -------------------------------------------------------------------------------
7
<PAGE> 163
maintaining custody of foreign
securities, and the increased research necessary for international investing
results in a higher advisory fee.
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 business, 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 predominantly 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.
Investing in securities of smaller capitalization developing-growth companies
also involves greater risk and the possibility of greater portfolio price
volatility. Among the reasons for the greater price volatility in these small
companies and unseasoned stocks are the less certain growth prospects of smaller
firms, the lower degree of liquidity in the markets for these stocks and the
greater sensitivity of small companies to changing economic conditions in their
geographic region. Securities of these companies involve higher investment risks
than those normally associated with larger firms due to the greater business
risks of small size and limited product lines, markets, distribution channels
and financial and managerial resources.
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 established 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 the ("Life Company"), which in turn indirectly owns the
Adviser.
- -------------------------------------------------------------------------------
BROKERS ARE CHOSEN BASED ON BEST PRICE AND
EXECUTION.
- -------------------------------------------------------------------------------
7
<PAGE> 164
ORGANIZATION AND MANAGEMENT OF THE FUND
The Fund is a separate, diversified portfolio of the Trust, an open-end
management investment company organized as a Massachusetts business trust in
1986. The Trust's Declaration of Trust permits the Trustees to create and
classify shares of beneficial interest into separate series of the Trust with
different investment objectives. The Trustees may also classify or reclassify
any series into one or more classes.
- -------------------------------------------------------------------------------
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.
- -------------------------------------------------------------------------------
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 fees, and Class A and Class B
shareholders have exclusive voting rights with respect to their distribution
plans.
The Fund is not required to hold annual meetings of shareholder, 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 Life 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 $16 BILLION.
- -------------------------------------------------------------------------------
The day-to-day management of the Fund is carried out by Bernice S. Behar who
also manages John Hancock Growth Fund and John Hancock Discovery 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 conflicts 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.
8
<PAGE> 165
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 Alternative," Class B Shares). If you do not specify on your
account application the class of shares you are purchasing, it will be assumed
that you are investing in Class A shares.
- -------------------------------------------------------------------------------
AN ALTERNATIVE PURCHASE PLAN ALLOWS YOU TO
CHOOSE THE METHOD OF PAYMENT THAT IS BEST
FOR YOU.
- -------------------------------------------------------------------------------
CLASS A SHARES. If you elect to purchase Class A shares, you will incur an
initial sales charge unless the amount you 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 higher expenses than 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 Investor Services or the Life 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
WOULD BE MORE BENEFICIAL FOR YOU.
- -------------------------------------------------------------------------------
9
<PAGE> 166
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 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 is more advantageous to purchase
Class B shares to have all of your funds invested initially. However, you will
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 from 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. They will be in the same amount,
except for differences resulting from each class bearing 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.
10
<PAGE> 167
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 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. During the fiscal year ended
August 31, 1995, the Adviser reduced its fees and the Fund's expenses by
$39,446. 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 are
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 it makes or expenses it
incurs under the Class A Plan, these expenses will not be carried beyond one
year 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 PAYS DISTRIBUTION AND SERVICE
FEES FOR MARKETING AND SALES-RELATED
SHAREHOLDER SERVICING.
- -------------------------------------------------------------------------------
Information on the Fund's total expenses is in the Fund's Financial Highlights
section of the prospectus.
11
<PAGE> 168
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 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 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 has qualified and intends to continue 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 tax on any net investment income and net realized
capital gains that are distributed to its shareholders within the time period
prescribed by the Code. When you redeem (sell) or exchange shares, you may
realize a taxable 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 backup 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 and the proceeds of 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
12
<PAGE> 169
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 adviser for specific advice.
PERFORMANCE
Total return shows the overall dollar or percentage change in value of a
hypothetical investment in the Fund, 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 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.
- -------------------------------------------------------------------------------
THE FUND MAY ADVERTISE ITS TOTAL RETURN.
- -------------------------------------------------------------------------------
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
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. The value of the Fund's shares, when redeemed, may be
more or less than their original cost. Total return is an historical calculation
and is not an indication of future performance. See "Factors to Consider in
Choosing an Alternative."
13
<PAGE> 170
HOW TO BUY SHARES
- --------------------------------------------------------------------------------
The minimum initial investment is $1,000 ($250 for group investments and
retirement plans).
- --------------------------------------------------------------------------------
OPENING AN ACCOUNT.
- --------------------------------------------------------------------------------
Complete the Account Application attached to this Prospectus. Indicate
whether you are purchasing Class A or Class B Shares. If you do not specify
which class of shares you are purchasing, Investor Services will assume
that you are investing in Class A shares.
- --------------------------------------------------------------------------------
BY CHECK 1. Make your check payable to John Hancock Investor Services
Corporation.
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 Marketplace 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B
SHARES.
- --------------------------------------------------------------------------------
MONTHLY 1. Complete the "Automatic Investing" and "Bank Information"
AUTOMATIC sections on the Account Privileges Application, designating
ACCUMULATION a bank 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"
sections on the Account Privileges Application,
designating a bank account from which your funds may be
drawn. Note that in order to invest by phone, your
account 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 name(s) 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 of shares you
own, 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.
- --------------------------------------------------------------------------------
14
<PAGE> 171
- --------------------------------------------------------------------------------
----------------------------------------------------------------------------
BUYING ADDITIONAL CLASS A AND CLASS B 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 Marketplace Fund (Class A or Class B
shares) Your Account Number Name(s) under which account is registered
----------------------------------------------------------------------------
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. 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
according to procedures approved by the Trustees. Short-term debt investments
maturing within 60 days are valued at amortized cost which the Trustees have
determined 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 believe accurately reflects fair value. The
NAV is calculated once daily as of the close of regular trading on the New York
Stock Exchange (the "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.
15
<PAGE> 172
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%(***)
</TABLE>
- ---------------
(*) 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. A Selling Broker to whom substantially the entire sales charge is
reallowed may be deemed to be an underwriter under the Securities Act of
1933.
(**) 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 the first year's service fee
(as described in (+) below) to Selling Brokers who initiate and are
responsible for purchases 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.
Sales charges ARE NOT APPLIED to any dividends that are reinvested in additional
Class A shares of the Fund.
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
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 the Life Company who were group annuity
contract holders as of September 1, 1994, and participant directed defined
contribution
16
<PAGE> 173
plans with at least 100 eligible employees at the inception of the Fund account
may purchase Class A shares with no initial sales charge. However, 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 CDSC will be assessed on an amount equal to the lesser of the current market
value or the original purchase cost of the redeemed Class A shares. 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 Class A
shares.
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.
Therefore, it will be assumed that the redemption is first made from any shares
in your 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 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 funds you hold; 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."
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%. This is
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
17
<PAGE> 174
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 that 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, financial planner, consultant 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 or
services made available to their clients.
- - A former participant in an employee benefit plan with John Hancock Funds, when
he or she withdraws from his or her plan and transfers any or all of his or
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 entire 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. The 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.
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
reinvestment of dividends or distributions, 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,
18
<PAGE> 175
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 the 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 an initial 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.
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 these 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.
- -------------------------------------------------------------------------------
19
<PAGE> 176
- - 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 the waiver.
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. This will occur at the end of the month eight years after the
shares were purchased, and will result 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 time you purchased the shares in the original
fund. The Fund has been advised that the conversion of Class B shares to Class A
shares should not be taxable for Federal income tax purposes, and should not
change your tax basis or tax holding period for the converted shares.
20
<PAGE> 177
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).
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 usually 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
three business days or longer, as permitted by Federal securities laws.
- --------------------------------------------------------------------------------
BY TELEPHONE All Fund shareholders are eligible automatically 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.
- -------------------------------------------------------------------------------
TO ASSURE ACCEPTANCE OF YOUR REDEMPTION
REQUEST, PLEASE FOLLOW THESE PROCEDURES.
- -------------------------------------------------------------------------------
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
according to 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 collectible 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 included with 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.
- --------------------------------------------------------------------------------
21
<PAGE> 178
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <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.
- ---------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
WHO MAY GUARANTEE YOUR SIGNATURE.
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
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.
- ---------------------------------------------------------------------------------
</TABLE>
- -------------------------------------------------------------------------------
ADDITIONAL INFORMATION ABOUT REDEMPTIONS.
- -------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
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.
</TABLE>
22
<TABLE>
<S> <C> <C> <C>
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> 179
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 FOR
SHARES OF THE SAME CLASS OF 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 that 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,
John Hancock Intermediate Maturity Government 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 continue to be subject to the CDSC schedule that was in effect at
your initial purchase date.
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 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
24
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.
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
25
<PAGE> 180
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 complete the application for your initial 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. 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
24
<PAGE> 181
REINVESTMENT PRIVILEGE
1. You will not be subject to a sales charge on Class A shares that you reinvest
in John Hancock funds 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. The holding period of the shares you
acquired through reinvestment for purposes of computing the CDSC payable upon
a subsequent redemption, will include the holding period of the redeemed
shares.
- -------------------------------------------------------------------------------
IF YOU REDEEM SHARES OF THE FUND, YOU MAY
BE ABLE TO REINVEST ALL OR PART OF 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 can 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 from 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 payees 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 a CDSC 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 can authorize an investment to be withdrawn automatically each month from
your bank for investment in the Fund shares under the "Automatic Investing"
and "Bank Information" sections of the Account Privileges Application.
- -------------------------------------------------------------------------------
YOU CAN MAKE AUTOMATIC INVESTMENTS AND
SIMPLIFY YOUR INVESTING.
- -------------------------------------------------------------------------------
2. You can also authorize automatic investing through payroll deduction by
completing the "Direct Deposit Investing" section of the Account Privileges
Application.
25
<PAGE> 182
3. You can 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 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 Section 457 Plans.
2. The initial investment minimum or aggregate minimum for any of these plans is
$250. However, accounts being established as group IRA, SEP, SARSEP, TSA,
401(k) and Section 457 Plans will be accepted without an initial minimum
investment.
26
<PAGE> 183
(NOTES)
<PAGE> 184
JOHN HANCOCK
GLOBAL MARKETPLACE FUND
INVESTMENT ADVISER
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
PRINCIPAL DISTRIBUTOR
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199-7603
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
For Telephone Exchange
For Investment-by-Phone
For Telephone Redemption
For TDD call
1-800-225-6713
JHD-3000P 1/96 (LOGO)PRINTED ON RECYCLED PAPER
JOHN HANCOCK
GLOBAL
MARKETPLACE FUND
PROSPECTUS
JANUARY 1, 1996
THE INVESTMENT OBJECTIVE OF
THE
FUND IS LONG-TERM CAPITAL
APPRECIATION.
101 HUNTINGTON AVENUE
BOSTON, MASSACHUSETTS
02199-7603
TELEPHONE 1-800-225-5291
call 1-800-225-5291
<PAGE> 185
JOHN HANCOCK GLOBAL MARKETPLACE FUND
CLASS A AND CLASS B SHARES
STATEMENT OF
ADDITIONAL INFORMATION
JANUARY 1, 1996
This Statement of Additional Information provides information about John Hancock
Global Marketplace 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 January 1, 1996.
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 Cross Referenced
Additional to Class A
Information and Class B
Page Prospectus Page
<S> <C> <C>
Organization of the Fund 2 8
Investment Objective And Policies 2 4
Certain Investment Practices 3 4
Investment Restrictions 11 6
Those Responsible for Management 15 8
Investment Advisory And Other Services 20 9
Distribution Contract 22 10
Net Asset Value 24 15
Initial Sales Charge on Class A Shares 25 16
Deferred Sales Charge On Class B Shares 26 18
Special Redemptions 27 19
Additional Serivces And Programs 27 23
</TABLE>
<PAGE> 186
<TABLE>
<S> <C> <C>
Description of The Fund's Shares 28 16
Tax Status 29 12
Calculation of Performance 34 13
Brokerage Allocation 35 7
Transfer Agent Services 36 Back Cover
Custody of Portfolio 37 Back Cover
Independent Auditors 37 Back Cover
Financial Statements -- --
</TABLE>
ORGANIZATION OF THE FUND
John Hancock Global Marketplace 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. The Fund changed its name on December 11, 1995
from John Hancock Global Retail Fund to John Hancock Global Marketplace Fund.
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 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. The types of
securities in which the Fund invests are listed in the Prospectus. See
"Investment Objective and Policies" in the Prospectus. There can be no assurance
that the Fund will achieve its investment objective.
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.
-2-
<PAGE> 187
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 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 three (3) 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.
CERTAIN INVESTMENT PRACTICES
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.
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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.
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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 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
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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."
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
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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 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.
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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 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.
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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 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.
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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.
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
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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
(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 by the lesser of (1)
67% or more of the shares represented at a meeting if at least 50% of the Fund's
outstanding shares are present in person or by proxy at that meeting or (2) of
50% of the outstanding shares.
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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 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.
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(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 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.
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(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 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 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
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<PAGE> 199
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 its Trustees' 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> 200
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> 201
<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 Representatives, Inc.;
Director, the Hudson City Savings Bank.
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
31 Milk Street Company (a trust company); Director,
Boston, Massachusetts Groundwater Technology, Inc. (remediation);
Samuel Cabot, Inc.; Advisor, Kestrel Venture
Management.
</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.
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<PAGE> 202
<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 Company; Director,
John Hancock Place the Adviser, the Affiliated Companies, John
P.O. Box 111 Hancock Distributors, Inc., JH Networking
Boston, Massachusetts 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.
Edward J. Spellman, CPA Trustee (4) Partner, KPMG Peat Marwick LLP (retired June
259C Commercial Bld. 1990).
Lauderdale, 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 Operating Officer, the
101 Huntington Avenue Adviser; Executive Vice President, the Adviser
Boston, Massachusetts (until December 1994); Senior Vice President;
the Adviser (until December 1993); Vice
President, the Adviser, until 1991.
*Thomas H. Drohan Senior Vice President and Senior Vice President and Secretary, the
101 Huntington Avenue Secretary Adviser.
Boston, Massachusetts
- ------------------
* 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.
</TABLE>
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<PAGE> 203
<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
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,
101 Huntington Avenue Secretary and Compliance the 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 December 1, 1995, the Adviser owned 88.2% of the shares of the Fund and
the officers and Trustees of the Fund as a group owned 4.7% of the outstanding
shares of the Fund. Shareholders of a Fund having beneficial ownership of more
than 25% of the shares of a Fund may be deemed for purposes of the Investment
Company Act of 1940, as amended, to control that Fund.
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 1995 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.
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<PAGE> 204
<TABLE>
<CAPTION>
PENSION OR
RETIREMENT
BENEFITS TOTAL COMPENSATION FROM THE
AGGREGATE ACCRUED AS PART FUND AND JOHN HANCOCK FUND
COMPENSATION FROM OF THE FUND'S COMPLEX TO TRUSTEES(1)
THE FUND EXPENSES (TOTAL OF 17 FUNDS)
----------------- --------------- ---------------------------
INDEPENDENT TRUSTEES
<S> <C> <C> <C>
Dennis S. Aronowitz $ - $ - $ 61,050.00
Richard P. Chapman, Jr. 6.00 6.00 62,800.00
William J. Cosgrove 6.00 6.00 61,050.00
Gail D. Fosler - - 60,800.00
Bayard Henry - - 58,850.00
Edward J. Spellman - - 61,050.00
------ ------ -----------
$12.00 $12.00 $365,600.00
</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, 1995.
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
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<PAGE> 205
advice arise for consideration at or about the same time, transactions in such
securities will be 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 Life 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 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. On August 31, 1995, the net assets of the Fund were
$711,600. For the fiscal year ended August 31, 1995, the Adviser waived the
entire investment management fee.
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%
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<PAGE> 206
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.
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 $16 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 1,080,000 shareholders. The Adviser is an affiliate
of the Life Company, one of the most recognized and respected financial
institutions in the nation. With total assets under management of more than $80
billion, the Life Company is one of ten largest life insurance companies in the
United States, and carries high ratings from Standard & Poor's and A.M. Best's.
Founded in 1862, Life Company has been serving clients for over 130 years.
Under the investment management contract, the Fund may use the name "John
Hancock" 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 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 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 Fund 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 any applicable sales charge. In connection with the sale of Class A or
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 adopted Distribution Plans with respect to Class A and Class
B shares (the "Plans") pursuant to Rule 12b-1 under the Investment Company Act.
Under the Plans, the Fund will pay distribution and service fees at an aggregate
annual rate of up to 0.30% and 1.00%,
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<PAGE> 207
respectively, of the Fund's average daily net assets attributable to shares of
that class. However, 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 distribution costs incurred in the
promotion of sales of Fund shares, 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.
During the fiscal year ended August 31, 1995 the Funds paid John Hancock Funds
the following amounts of expenses with respect to the Class A and Class B shares
of the Fund:
<TABLE>
<CAPTION>
Expense Items
-------------
Printing and
Mailing of
Prospectus to Compensation Interest Carrying
New to Selling or Other Finance
Advertising Shareholders Brokers Charges Other
----------- ------------- ------------ -----------------
Global Maketplace
- -----------------
<S> <C> <C> <C> <C>
Class A Shares $163 $ 0 $544 $ 0
Class B Shares $ 0 $ 0 $ 0 $ 0
</TABLE>
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
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<PAGE> 208
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 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.
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
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<PAGE> 209
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 Prospectus, Class A shares of the Fund
may be sold without a sales charge to the persons described in the Prospectus.
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 purchase price or 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)
-25-
<PAGE> 210
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.
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.
-26-
<PAGE> 211
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 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 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 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 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 checks.
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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. Even if the reinvestment privilege is exercised,
and any gain or loss realized by a shareholder on the redemption or other
disposition of Fund shares will be treated for tax purposes as described under
the caption "Tax Status."
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.
The shares of each class of the Fund represent an equal proportionate interest
in the aggregate net assets attributable to the class of 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 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
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<PAGE> 213
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 Fund'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.
TAX STATUS
Each series of the Trust, including the Fund, is treated as a separate entity
for tax purposes. The Fund has qualified and elected to be treated as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code") and intends to continue to so qualify 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 in accordance with the timing
requirements of the Code.
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.
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
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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 stock of certain non-U.S. corporations that receive at
least 75% of their annual gross income from passive sources (such as interest
producing investments, dividends, rentals, royalties or capital gain) or hold at
least 50% of their assets in investments producing such passive income ("passive
foreign investment companies"), the Fund could be subject to Federal income tax
and additional interest charges on "excess distributions" received from these
passive foreign investment companies, even if all income or gain actually
received by the Fund is timely distributed to its shareholders. The Fund would
not be able to pass through to it shareholders any credit or deduction for such
a tax. Certain elections if available ameliorate these adverse tax consequences.
Accordingly, the Fund may limit its investments in 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
these 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 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.
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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. At
the time of an investor's purchase of Fund shares, a portion of the purchase
price is often attributable to realized or unrealized appreciation in the Fund's
portfolio or undistributed taxable income of the Fund. Consequently, subsequent
distributions on those shares from such appreciation or income may be taxable to
such investor even if the net asset value of the investor's shares is, as a
result of the distributions, reduced below the investor's cost for such shares
and the distributions 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 tax 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. This 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 may be disallowed to the extent the shares
disposed of are replaced with other shares of the Fund 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 automatic 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 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
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.
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<PAGE> 216
For Federal income tax purposes, the Fund is permitted to carry forward a net
realized capital loss in any year to offset net 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, if
any. Additionally, any corporate shareholder should consult its tax adviser
regarding the possibility that its tax 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
redemption or other disposition of the shares.
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, 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
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income taxes paid by the Fund and (ii) the portion of Fund dividends that
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 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 redemption (including an exchange) 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.
Non-U.S. 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. These investors may be
subject to non-resident alien withholding tax at the rate of 30% (or a lower
rate under an applicable tax treaty) on amounts treated as ordinary dividends
from the Fund and, unless an effective IRS Form W-8 or authorized substitute is
on file, to 31% backup withholding on certain other payments from the Fund. Non
U.S. investors should consult their tax advisers regarding such treatment and
the application of foreign taxes to an investment in the Fund.
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 also not be required to pay any Massachusetts income tax.
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CALCULATION OF PERFORMANCE
The total return since commencement of operations on September 29, 1994 to
August 31, 1995 for Class A shares (not annualized) was 28.79%. There were no
Class B shares issued or outstanding during this period. 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 = (the nth root of ERV divided by 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 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.
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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
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
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upon any prescribed basis. While the Trust's officers will be primarily
responsible for the 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. For the year ended August 31,
1995, the Fund paid negotiated brokerage commissions in the amount of $1,273.
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. During the fiscal year ended August 31, 1995, the Fund did not pay
commissions as compensation to any brokers for research services such as
industry, economics, and company reviews and evaluations of securities.
The Adviser's indirect parent, the Life 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. For the fiscal year ended
August 31, 1995, the Fund paid no brokerage commissions to 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 Company, is the
transfer and dividend paying agent for the
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Fund. The Fund pays an annual fee of $16.00 for each Class A shareholder and
$18.50 for each Class B shareholder, plus certain out-of-pocket expenses. These
expenses are aggregated and charged to the Fund and allocated to each class on
the basis of the relative net asset values.
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 on the Fund's annual financial statements and prepares the Fund's annual
Federal income tax return.
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FINANCIAL STATEMENTS
John Hancock Funds - Global Retail Fund
THE STATEMENT OF ASSETS AND LIABILITIES IS THE FUND'S BALANCE SHEET AND SHOWS
THE VALUE OF WHAT THE FUND OWNS, IS DUE AND OWES ON AUGUST 31, 1995. YOU'LL ALSO
FIND THE NET ASSET VALUE AND THE MAXIMUM OFFERING PRICE PER SHARE AS OF THAT
DATE.
<TABLE>
STATEMENT OF ASSETS AND LIABILITIES
August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments at value - Note C:
Common stocks (cost - $504,045) ............................. $ 702,152
Joint repurchase agreement (cost - $13,000) ................. 13,000
---------
715,152
Cash ......................................................... 83
Receivable for investments sold .............................. 13,593
Dividends receivable ......................................... 187
Foreign tax receivable ....................................... 118
Receivable from John Hancock Advisers, Inc. - Note B ......... 39,446
Deferred organization expenses - Note A ...................... 5,925
---------
Total Assets ............................... 774,504
------------------------------------------------------------
LIABILITIES:
Payable for investments purchased ............................ 10,004
Payable to John Hancock Advisers, Inc. and
affiliates - Note B ......................................... 14,281
Accounts payable and accrued expenses ........................ 38,619
---------
Total Liabilities .......................... 62,904
------------------------------------------------------------
NET ASSETS:
Capital paid-in .............................................. 525,920
Accumulated net realized loss on investments and
foreign currency transactions ............................... (12,423)
Net unrealized appreciation of investments and
foreign currency transactions ............................... 198,103
---------
Net Assets ................................. $ 711,600
============================================================
NET ASSET VALUE PER SHARE:
(Based on net asset values and shares of beneficial
interest outstanding - unlimited number of shares
authorized with no par value)
Class A - $711,600/61,946 .................................... $ 11.49
================================================================================
MAXIMUM OFFERING PRICE PER SHARE *
Class A - ($11.49 x 105.26%) ................................. $ 12.09
================================================================================
</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.
THE STATEMENT OF OPERATIONS SUMMARIZES THE FUND'S INVESTMENT INCOME EARNED AND
EXPENSES INCURRED IN OPERATING THE FUND. IT ALSO SHOWS NET GAINS (LOSSES) FOR
THE PERIOD STATED.
<TABLE>
STATEMENT OF OPERATIONS
For the period September 29, 1994
(commencement of operations) to August 31, 1995
- --------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest ..................................................... $ 5,433
Dividends (net of foreign withholding taxes of $258) ......... 2,773
---------
8,206
---------
Expenses:
Custodian fee ............................................... 23,750
Auditing fee ................................................ 7,500
Printing .................................................... 6,069
Investment management fee - Note B .......................... 4,205
Distribution/service fee - Note B ........................... 1,577
Transfer agent fee - Note B ................................. 1,577
Organization expense - Note A ............................... 1,341
Legal fees .................................................. 1,000
Registration and filing fees ................................ 150
Miscellaneous ............................................... 125
Trustees' fees .............................................. 37
---------
Total Expenses ............................. 47,331
------------------------------------------------------------
Less Expenses Reimbursable
by John Hancock Advisers, Inc. -
Note B ..................................... (39,446)
---------
Net Expenses ............................... 7,885
------------------------------------------------------------
Net Investment Income ...................... 321
------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS:
Net realized loss on investments sold ........................ (12,423)
Net realized loss on foreign currency transactions ........... (320)
Change in net unrealized appreciation/depreciation
of investments .............................................. 198,107
Change in net unrealized appreciation/depreciation
of foreign currency transactions ............................ (4)
---------
Net Realized and Unrealized Gain
on Investments and Foreign
Currency Transactions ...................... 185,360
------------------------------------------------------------
Net Increase in Net Assets
Resulting from Operations .................. $ 185,681
============================================================
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
8
<PAGE> 223
FINANCIAL STATEMENTS
John Hancock Funds - Global Retail Fund
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------------------------------------------------
<CAPTION>
FOR THE PERIOD
SEPTEMBER 29, 1994
(COMMENCEMENT OF
OPERATIONS) TO
AUGUST 31, 1995
------------------
<S> <C>
INCREASE (DECREASE) IN NET ASSETS:
FROM OPERATIONS:
Net investment Income .............................................................................. $ 321
Net realized loss on investments sold and foreign currency transactions ............................ (12,743)
Change in net unrealized appreciation/depreciation of investments and foreign
currency transactions ........................................................................... 198,103
---------
Net Increase in Net Assets Resulting from Operations .............................................. 185,681
---------
DISTRIBUTIONS TO SHAREHOLDERS:
Dividends from net investment income
Class A - ($0.0133 per share) ..................................................................... (803)
Distributions in excess of net investment income
Class A - ($0.0140 per share) ..................................................................... (844)
---------
Total Distributions ............................................................................. (1,647)
---------
FROM FUND SHARE TRANSACTIONS -- NET* ................................................................. 27,566
---------
NET ASSETS:
Initial Investment by John Hancock Advisers, Inc. - Note A ......................................... 500,000
---------
End of period ...................................................................................... $ 711,600
=========
</TABLE>
* ANALYSIS OF FUND SHARE TRANSACTIONS:
<TABLE>
<CAPTION>
FOR THE PERIOD
SEPTEMBER 29, 1994
(COMMENCEMENT OF OPERATIONS)
TO AUGUST 31, 1995
----------------------------
SHARES AMOUNT
------ --------
<S> <C> <C>
CLASS A
Shares sold .................................................. 4,064 $ 36,313
Shares issued to shareholders in reinvestment of
distributions ............................................. 5 44
------- ---------
4,069 36,357
Less shares repurchased ...................................... (947) (8,791)
------- ---------
Net increase ................................................. 3,122 27,566
Initial Investment by John Hancock Advisers, Inc. - Note A ... 58,824 500,000
------- ---------
Net increase and shares outstanding end of period ............ 61,946 $ 527,566
======= =========
</TABLE>
The Statement of Changes in Net Assets shows how the value of the Fund's net
assets has changed since the commencement of operations. The difference reflects
earnings less expenses, any investment and foreign currency gains and losses,
distributions paid to shareholders and any increase or decrease in money
shareholders invested in the Fund. The footnote illustrates the number of Fund
shares sold, reinvested and redeemed during the period, along with the
corresponding dollar values.
SEE NOTES TO FINANCIAL STATEMENTS.
9
<PAGE> 224
FINANCIAL STATEMENTS
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 as
follows:
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FOR THE PERIOD SEPTEMBER 29, 1994
(COMMENCEMENT OF OPERATIONS)
TO AUGUST 31, 1995
---------------------------------
<S> <C>
CLASS A
PER SHARE OPERATING PERFORMANCE
Net Asset Value, Beginning of Period ............................................ $ 8.50(a)
------
Net Investment Income ........................................................... 0.01(b)
Net Realized and Unrealized Gain on Investments and Foreign
Currency Transactions 3.01
------
Total from Investment Operations ............................................... 3.02
------
Less Distributions:
Dividends from Net Investment Income ............................................ (0.01)
Distributions in excess of net investment income ................................ (0.02)
------
Total Distributions ............................................................ (0.03)
------
Net Asset Value, End of Period .................................................. $11.49
======
Total Investment Return at Net Asset Value ...................................... 35.61%(d)
Total Adjusted Investment Return at Net Asset Value (c)(e) ...................... 28.69%(d)
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ....................................... $ 712
Ratio of Expenses to Average Net Assets ** ...................................... 1.50%*
Ratio of Adjusted Expenses to Average Net Assets (c) ............................ 9.00%*
Ratio of Net Investment Income to Average Net Assets ............................ 0.06%*
Ratio of Adjusted Net Investment Income to Average Net Assets (c) ............... (7.44%)*
Portfolio Turnover Rate ......................................................... 63%
** Expense Reimbursement Per Share .............................................. $ 0.65(b)
</TABLE>
* On an annualized basis.
(a) Initial price to commence operations.
(b) On average month end shares outstanding.
(c) On an unreimbursed basis without expense reduction.
(d) Not annualized.
(e) Unaudited.
THE FINANCIAL HIGHLIGHTS SUMMARIZES THE IMPACT OF THE FOLLOWING FACTORS ON A
SINGLE SHARE FOR THE PERIOD INDICATED: NET INVESTMENT INCOME, GAINS (LOSSES),
DISTRIBUTIONS OF THE FUND AND TOTAL INVESTMENT RETURN OF THE FUND. IT SHOWS HOW
THE FUND'S NET ASSET VALUE FOR A SHARE HAS CHANGED SINCE THE COMMENCEMENT OF
OPERATIONS. ADDITIONALLY, IMPORTANT RELATIONSHIPS BETWEEN SOME ITEMS PRESENTED
IN THE FINANCIAL STATEMENTS ARE EXPRESSED IN RATIO FORM.
SEE NOTES TO FINANCIAL STATEMENTS.
10
<PAGE> 225
FINANCIAL STATEMENTS
John Hancock Funds - Global Retail Fund
THE SCHEDULE OF INVESTMENTS IS A COMPLETE LIST OF ALL SECURITIES OWNED BY GLOBAL
RETAIL FUND ON AUGUST 31, 1995. IT'S DIVIDED INTO TWO MAIN CATEGORIES: COMMON
STOCKS AND SHORT-TERM INVESTMENTS. THE COMMON STOCKS ARE FURTHER BROKEN DOWN BY
INDUSTRY GROUPS. SHORT-TERM INVESTMENTS, WHICH REPRESENT THE FUND'S "CASH"
POSITION, ARE LISTED LAST.
<TABLE>
SCHEDULE OF INVESTMENTS
August 31, 1995
- --------------------------------------------------------------------------------
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>
COMMON STOCKS
COMPUTER - DEVICES (6.46%)
America Online, Inc.* ........................... 400 $ 26,300
HNC Software, Inc.* ............................. 300 7,350
Netscape Communications Corp.* .................. 250 12,344
--------
45,994
--------
CONSUMER PRODUCTS (5.66%)
Duracraft Corp.* ................................ 300 11,925
Fedders Corp. (Class A) ......................... 500 2,375
Fedders, Corp. .................................. 2,000 13,500
First Team Sports, Inc.* ........................ 600 12,450
--------
40,250
--------
FURNITURE (1.48%)
Industrie Natuzzi Spa, American
Depository Receipt, (ADR) (Italy) .............. 300 10,500
--------
HOTELS & MOTELS (1.90%)
La Quinta Inns, Inc. ............................ 450 13,500
--------
RETAIL - APPAREL/SHOE GROUP (12.97%)
Authentic Fitness Corp. ......................... 500 11,063
Giordano International Ltd.,
(Hong Kong) .................................... 20,000 16,406
Nine West Group, Inc.* .......................... 600 25,575
Oakley, Inc.* ................................... 700 22,487
Tommy Hilfiger Corp.* ........................... 500 16,750
--------
92,281
--------
RETAIL - BUILDING PRODUCTS (4.15%)
Castorama Dubois (France) ....................... 111 17,577
Home Depot, Inc. ................................ 300 11,962
--------
29,539
--------
RETAIL - COMPUTERS/ELECTRONICS (15.38%)
CDW Computer Centers, Inc.* ..................... 300 16,050
Circuit City Stores, Inc. ....................... 300 10,350
Elkjop Norge a. s. (Norway) ..................... 700 18,819
Global DirectMail Corp.* ........................ 800 22,000
Insight Enterprises, Inc.* ...................... 1,000 18,500
Micro Warehouse, Inc.* .......................... 500 23,750
--------
109,469
--------
RETAIL - DISCOUNT & VARIETY (5.46%)
Dollar General Corp. ............................ 300 7,875
Dollar Tree Stores, Inc.* ....................... 500 14,875
Warehouse Group Ltd. (The)
(New Zealand) .................................. 4,800 $ 16,077
--------
38,827
--------
RETAIL - DRUG STORES (3.61%)
Eckerd Corp.* ................................... 300 10,987
Walgreen Co. .................................... 600 14,700
--------
25,687
--------
RETAIL - FOOD & RESTAURANTS (4.15%)
Papa John's International, Inc.* ................ 300 11,850
Rock Bottom Restaurants, Inc.* .................. 700 17,675
--------
29,525
--------
RETAIL - MAIL ORDER/DIRECT (8.15%)
Amway Asia Pacific Ltd. ......................... 300 11,925
CUC International, Inc.* ........................ 450 15,356
Geerlings & Wade, Inc.* ......................... 500 5,250
Seattle Filmworks, Inc.* ........................ 1,200 25,500
--------
58,031
--------
RETAIL - MAJOR DEPARTMENT STORES (2.51%)
Next, PLC (United Kingdom) ...................... 3,000 17,903
--------
RETAIL - MISCELLANEOUS/DIVERSIFIED (19.43%)
Barnes & Noble, Inc.* ........................... 300 11,738
Borders Group, Inc.* ............................ 600 12,150
Cifra S.A. de CV (Series C) (Mexico) ............ 5,000 5,976
Daisytek International Corp.* .................. 1,000 23,250
Dayton Hudson Corp. ............................. 100 7,313
Moovies, Inc.* .................................. 700 12,775
OfficeMax, Inc.* ................................ 750 17,625
PetSmart, Inc.* ................................. 600 18,000
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
11
<PAGE> 226
FINANCIAL STATEMENTS
John Hancock Funds - Global Retail Fund
<TABLE>
<CAPTION>
MARKET
ISSUER, DESCRIPTION NUMBER OF SHARES VALUE
- ------------------- ---------------- -----
<S> <C> <C>
RETAIL - MISCELLANEOUS/DIVERSIFIED (CONTINUED)
PMT Services, Inc.* ............................. 500 $ 9,188
Regal Cinemas, Inc.* ............................ 600 20,250
--------
138,265
--------
RETAIL - SUPERMARKETS (7.36%)
Albertson's, Inc. ............................... 400 12,750
Carrefour Supermarche (France) .................. 40 22,331
Santa Isabel S.A., (ADR) (Chile)* ............... 800 17,300
--------
52,381
--------
TOTAL COMMON STOCKS
(Cost $ 504,045) (98.67%) $702,152
------ --------
</TABLE>
<TABLE>
<CAPTION>
INTEREST PAR VALUE
RATE (000'S OMITTED)
-------- ---------------
<S> <C> <C> <C>
SHORT-TERM INVESTMENT
JOINT REPURCHASE AGREEMENT (1.83%)
Investment in a joint repurchase agreement
transaction with UBS Securities, Inc. -
Dated 08-31-95, Due 09-01-95
(Secured by US Treasury Bill,
5.540% due 05-30-96; and US
Treasury Note, 5.625% due 01-31-98)
Note A ..................................... 5.80% 13 13,000
--------
TOTAL SHORT-TERM INVESTMENT
(Cost $13,000) (1.83)% 13,000
------- --------
TOTAL INVESTMENTS (100.50)% $715,152
======= ========
</TABLE>
* Non-income producing security.
The percentage shown for each investment category is the total value of that
category as a percentage of the net assets of the Fund.
THE CONCENTRATION OF INVESTMENTS BY INDUSTRY GROUP FOR INDIVIDUAL SECURITIES
HELD BY THE FUND IS SHOWN IN THE SCHEDULE OF INVESTMENTS. IN ADDITION, THE
CONCENTRATION OF INVESTMENTS CAN BE AGGREGATED BY THE COUNTRIES IN WHICH THE
FUND INVESTS. THE TABLE BELOW SHOWS THE PERCENTAGES OF THE FUND'S INVESTMENTS AT
AUGUST 31, 1995 ASSIGNED TO THE VARIOUS COUNTRIES.
COUNTRY DIVERSIFICATION (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
MARKET VALUE
OF SECURITIES
AS A PERCENTAGE
OF FUND'S
COUNTRY DIVERSIFICATION NET ASSETS
- ----------------------- ---------------
<S> <C>
Chile ........................................................ 2.43%
France ....................................................... 5.61
Hong Kong .................................................... 2.31
Italy ........................................................ 1.48
Mexico ....................................................... 0.84
New Zealand .................................................. 2.26
Norway ....................................................... 2.64
United Kingdom ............................................... 2.52
United States ................................................ 80.41
------
TOTAL INVESTMENTS 100.50%
======
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
12
<PAGE> 227
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Global Retail Fund
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", which
commenced operations on September 29, 1994), 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 August 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. All
portfolio transactions initially expressed in terms of foreign currencies have
been translated into U.S. dollars as described in "Foreign Currency Translation"
below.
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. Capital gains realized
on some foreign securities are subject to foreign taxes and are accrued, as
applicable.
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. For Federal income tax purposes, net currency exchange gains and
losses from sales of foreign debt securities may be treated as ordinary income
even though such items are gains and losses for accounting purposes.
Additionally, net capital losses of $12,423 attributable to security
transactions incurred after October 31, 1994 are treated as arising on the first
day (September 1, 1995) of the Fund's next taxable year.
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.
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.
FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS The Fund may enter into forward
foreign currency exchange contracts as a hedge against the effect of
fluctuations in currency exchange rates. A forward
13
<PAGE> 228
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Global Retail Fund
foreign currency exchange contract involves an obligation to purchase or sell a
specific currency at a future date at a set price. The aggregate principal
amounts of the contracts are marked-to-market daily at the applicable foreign
currency exchange rates. Any resulting unrealized gains and losses are included
in the determination of the Fund's daily net assets. The Fund records realized
gains and losses at the time the forward foreign currency contract is closed out
or offset by a matching contract. Risks may arise upon entering these contracts
from potential inability of counterparties to meet the terms of the contract and
from unanticipated movements in the value of a foreign currency relative to the
U.S. dollar.
These contracts involve market or credit risk in excess of the
unrealized gain or loss reflected in the Fund's Statement of Assets and
Liabilities. The Fund may also purchase and sell forward contracts to facilitate
the settlement of foreign currency denominated portfolio transactions, under
which it intends to take delivery of the foreign currency. Such contracts
normally involve no market risk other than that offset by the currency amount of
the underlying transaction.
There were no open foreign currency forward contracts at August 31,
1995.
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.
OPTIONS Listed options are valued at the last quoted sales price on the exchange
on which they are primarily traded. Over-the-counter options are valued at the
mean between the last bid and asked prices. Upon the writing of a call or put
option, an amount equal to the premium received by the Fund is included in the
Statement of Assets and Liabilities as an asset and corresponding liability. The
amount of the liability is subsequently marked-to-market to reflect the current
market value of the written option.
The Fund may use option contracts to manage its exposure to the stock
market. Writing puts and buying calls tend to increase the Fund's exposure to
the underlying instrument and buying puts and writing calls tend to decrease the
Fund's exposure to the underlying instrument, or hedge other Fund investments.
The maximum exposure to loss for any purchased options will be limited
to the premium initially paid for the option. In all other cases, the face (or
"notional") amount of each contract at value will reflect the maximum exposure
of the Fund in these contracts, but the actual exposure will be limited to the
change in value of the contract over the period the contract remains open.
Risks may also arise if counterparties do not perform under the
contracts' terms, or if the Fund is unable to offset a contract with a
counterparty on a timely basis ("liquidity risk"). Exchange-traded options have
minimal credit risk as the exchanges act as counterparties to each transaction,
and only present liquidity risk in highly unusual market conditions. To minimize
credit and liquidity risks in over-the-counter option contracts, the Fund
continuously monitors the creditworthiness of all its counterparties.
At any particular time, except for purchased options, market or credit
risk may involve amounts in excess of those reflected in the Fund's period-end
Statement of Assets and Liabilities.
14
<PAGE> 229
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Global Retail Fund
There were no written option transactions for the period ended August
31, 1995.
FINANCIAL FUTURES CONTRACTS The Fund may buy and sell financial futures
contracts for speculative purposes and/or to hedge against the effects of
fluctuations in interest rates, currency exchange rates and other market
conditions. At the time the Fund enters into a financial futures contract, it is
required to deposit with its custodian a specified amount of cash or U.S.
government securities, known as "initial margin", equal to a certain percentage
of the value of the financial futures contract being traded. Each day, the
futures contract is valued at the official settlement price of the board of
trade or U.S. commodities exchange. Subsequent payments, known as "variation
margin", to and from the broker are made on a daily basis as the market price of
the financial futures contract fluctuates. Daily variation margin adjustments,
arising from this "mark to market", are recorded by the Fund as unrealized gains
or losses.
When the contracts are closed, the Fund recognizes a gain or loss. Risks
of entering into futures contracts include the possibility that there may be an
illiquid market and/or that a change in the value of the contracts may not
correlate with changes in the value of the underlying securities. In addition,
the Fund could be prevented from opening or realizing the benefits of closing
out futures positions because of position limits or limits on daily price
fluctuations imposed by an exchange.
For Federal income tax purposes, the amount, character and timing of the
Fund's gains and/or losses can be affected as a result of futures contracts.
At August 31, 1995, there were no open positions in financial futures
contracts.
NOTE B --
MANAGEMENT FEE AND TRANSACTIONS
WITH AFFILIATES AND OTHERS
Under the present investment management 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 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 fees amounted to
$39,446 for the period ended August 31, 1995. The Adviser reserves the right to
terminate this limit in the future.
The Fund has a distribution agreement with John Hancock Funds, Inc. ("JH
Funds"), a wholly-owned subsidiary of the Adviser. For the period ended August
31, 1995, JH Funds received net sales charges of $1,287. Out of this amount,
$358 was retained and used for printing prospectuses, advertising, sales
literature and other purposes, and $929 was paid as sales commissions to
unrelated broker-dealers.
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 at an annual rate not to exceed 0.30% of Class
A average daily net assets and 1.00% of Class B average daily net assets to
reimburse JH Funds for its distribution/service costs. Up to a maximum of 0.25%
of these payments may be service fees as defined by the amended Rules of Fair
Practice of the National Association of Securities Dealers. Under the amended
Rules of Fair Practice, curtailment
15
<PAGE> 230
NOTES TO FINANCIAL STATEMENTS
John Hancock Funds - Global Retail Fund
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 Corporation ("Investor Services"), a wholly-owned subsidiary of The
Berkeley Financial Group. Effective January 1, 1995, the Fund pays transfer
agent fees based on the number of shareholder accounts and certain out-of-pocket
expenses. Prior to January 1, 1995, the Fund paid a monthly transfer agent fee
equivalent, on an annual basis, to 0.30% of the Fund's average daily net asset
value plus out of pocket expenses incurred by Investor Services on behalf of the
Fund for proxy mailings.
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 Adviser owns 58,824 shares of beneficial interest of the Fund. The
compensation of unaffiliated Trustees is borne by the Fund. Effective with the
fees paid for 1995, the unaffiliated Trustees may elect to defer for tax
purposes their receipt of this compensation under the John Hancock Group of
Funds Deferred Compensation Plan. The Fund will make investments into other John
Hancock Funds, as applicable, to cover its liability with regard to the deferred
compensation. Investments to cover the Fund's deferred compensation liability
will be recorded on the Fund's books as an other asset. The deferred
compensation liability will be marked to market on a periodic basis and income
earned by the investment will be recorded on the Fund's books.
NOTE C --
INVESTMENT TRANSACTIONS
Purchases and proceeds from sales of securities, other than short-term
securities, during the period ended August 31, 1995, aggregated $793,489 and
$277,021, respectively.
The cost of investments owned at August 31, 1995 for federal income tax
purposes was $517,045. Gross unrealized appreciation and depreciation of
investments aggregated $209,750 and $11,643, respectively, resulting in net
unrealized appreciation of $198,107.
NOTE D --
RECLASSIFICATION OF CAPITAL ACCOUNTS
During the year ended August 31, 1995, the Fund has reclassified amounts to
reflect a decrease in capital paid-in of $1,646, a decrease in accumulated net
investment loss of $320 and an increase in accumulated net investment income of
$1,326. This represents the cumulative amount necessary to report these balances
on a tax basis, excluding certain temporary differences, as of August 31, 1995.
Additional adjustments may be needed in subsequent reporting periods. These
reclassifications, which have no impact on the net asset value of the Fund, are
primarily attributable to certain differences in the computation of
distributable income and capital gains under federal tax rules versus generally
accepted accounting principles.
16
<PAGE> 231
John Hancock Funds - Global Retail Fund
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders of John Hancock Global Retail Fund
and the Trustees of John Hancock World Fund
In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statement of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of John Hancock Global Retail Fund
(the "Fund") (a portfolio of John Hancock World Fund) at August 31, 1995, and
the results of its operations, the changes in its net assets and financial
highlights for the period September 29, 1994 (commencement of operations)
through August 31, 1995, in conformity with generally accepted accounting
principles. These financial statements and financial highlights (hereafter
referred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit of these financial
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit, which included
confirmation of securities at August 31, 1995 by correspondence with the
custodian and brokers, provides a reasonable basis for the opinion expressed
above.
Price Waterhouse LLP
Boston, Massachusetts
October 17, 1995
TAX INFORMATION NOTICE (UNAUDITED)
For Federal Income Tax purposes, the following information is furnished with
respect to the distributions of the Fund for its fiscal year ended August 31,
1995.
With respect to the Fund's ordinary taxable income for the fiscal year
ended August 31, 1995, 100% of the dividends qualify for the corporate dividends
received deduction.
Shareholders will receive a 1995 U.S. Treasury Department Form 1099-DIV
in January of 1996. This will reflect the total of all distributions which are
taxable for the calendar year 1995.
17
<PAGE> 232
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 Marketplace Fund
------------------------------------
Statement of Assets and Liabilities as of August 31, 1995.
Statement of Operations of the year ended August 31, 1995.
Statement of Changes in Net Asset for each of the period ended August 31.
Notes to Financial Statements.
Financial Highlights for each of the period ended August 31, 1995.
Schedule of Investments as of August 31, 1995.
John Hancock Global Rx Fund
---------------------------
Statement of Assets and Liabilities as of August 31, 1995.
Statement of Operations of the year ended August 31, 1995.
Statement of Changes in Net Asset for each of the two years ended
August 31.
Notes to Financial Statements.
Financial Highlights for each of the period ended August 31, 1995.
Schedule of Investments as of August 31, 1995.
John Hancock Pacific Basin Equities Fund
----------------------------------------
Statement of Assets and Liabilities as of August 31, 1995.
Statement of Operations of the year ended August 31, 1995.
Statement of Changes in Net Asset for each of the two years ended
August 31.
Notes to Financial Statements.
Financial Highlights for each of the period ended August 31, 1995.
Schedule of Investments as of August 31, 1995.
(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.
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<PAGE> 233
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
As of December 1, 1995, the number of record holders of shares of
Registrant was as follows:
<TABLE>
<CAPTION>
Number of Record
----------------
Series Title of Class Holders
------ -------------- -------
<S> <C> <C>
(Shares of Beneficial Interest, without par value)
John Hancock Pacific Basin Equities Class A 5,989
Fund Class B 2,657
John Hancock Global Rx Fund Class A 3,624
Class B 1,627
John Hancock Global Marketplace Fund Class A 30
Class B 0
</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. 18 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> 234
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
C-3
<PAGE> 235
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, 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.
(a) The Registrant's sole principal underwriter is JH Funds, Inc., which
also acts as principal underwriter for the following investment companies:
John Hancock Institutional Series Trust, John Hancock Capital Series, John
Hancock Sovereign Bond Fund, John Hancock Sovereign Investors Fund, Inc.,
John Hancock Special Equities Fund, John Hancock Strategic Series, John
Hancock Tax- Exempt Income Fund, John Hancock Tax-Exempt Series Fund, John
Hancock Technology Series, Inc., John Hancock Limited Term Government Fund,
John Hancock World Fund, Freedom Investment Trust, Freedom Investment Trust
II, Freedom Investment Trust III, John Hancock Bond Fund, John Hancock
California Tax-Free Income Fund, John Hancock Cash Reserve, Inc., John
Hancock Current Interest, John Hancock Investment Trust, John Hancock Series,
Inc. and John Hancock Tax-Free Bond Fund.
(b) The following table lists, for each director and officer of JH Funds,
Inc., the information indicated.
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<PAGE> 236
<TABLE>
<CAPTION>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
<S> <C> <C>
Edward J. Boudreau, Jr. Chairman of Chairman and
101 Huntington Avenue the Board Chief Executive
Boston, Massachusetts Officer
Foster L. Aborn Director None
John Hancock Place
P.O. Box 111
Boston, Massachusetts
William C. Fletcher Director None
53 State Street
Boston, Massachusetts
Robert H. Watts Director None
101 Huntington Avenue
Boston, Massachusetts
C. Troy Shaver, Jr. President, Chief None
101 Huntington Avenue Executive Officer
Boston, Massachusetts and Director
Stephen W. Blair Executive Vice None
101 Huntington Avenue President
Boston, Massachusetts
James V. Bowhers Executive Vice None
101 Huntington Avenue President
Boston, Massachusetts
James W. McLaughlin Senior Vice President None
101 Huntington Avenue and Chief Financial
Boston, Massachusetts Officer
Thomas H. Drohan Senior Vice Senior Vice
101 Huntington Avenue President President and
Boston, Massachusetts Secretary
</TABLE>
C-5
<PAGE> 237
<TABLE>
<CAPTION>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- -------------
<S> <C> <C>
David A. King Director and Senior None
101 Huntington Avenue Vice President
Boston, Massachusetts
James B. Little Senior Vice Senior Vice
101 Huntington Avenue President President and
Boston, Massachusetts Chief
Financial Officer
John A. Morin Vice President Vice President
101 Huntington Avenue
Boston, Massachusetts
Susan S. Newton Vice President Vice President,
101 Huntington Avenue and Secretary Assistant Secretary
Boston, Massachusetts and Compliance
Officer
William S. Nichols Senior Vice President None
101 Huntington Avenue
Boston, Massachusetts
Michael T. Carpenter Senior Vice President None
1000 Louisiana Street
Houston, Texas
Christopher M. Meyer Treasurer None
101 Huntington Avenue
Boston, Massachusetts
Robert G. Freedman Director Vice Chairman and
101 Huntington Avenue Chief Investment
Boston, Massachusetts Officer
</TABLE>
C-6
<PAGE> 238
<TABLE>
<CAPTION>
Positions and Positions and
Name and Principal Offices with Offices with
Business Address Underwriter Registrant
- ------------------ ------------- ------------
<S> <C> <C>
Stephen L. Brown 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
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
(c) None.
</TABLE>
C-7
<PAGE> 239
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-8
<PAGE> 240
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940 the registrant certifies that it meets all of
the requirements for effectiveness of 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 21st day of December, 1995.
JOHN HANCOCK WORLD FUND
By:
---------------------------------
Edward J. Boudreau, Jr.*,Chairman
<TABLE>
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.
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
- ------------------------------- Chairman
Edward J. Boudreau, Jr.* (Principal Executive Officer)
/s/James B. Little
- -------------------------------
James B. Little Senior Vice President and Chief December 21, 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*
</TABLE>
C-9
<PAGE> 241
<TABLE>
<CAPTION>
<S> <C> <C>
- ----------------------------- Trustee
Edward J. Spellman
Thomas H. Drohan December 21, 1995
- -----------------------------
Thomas H. Drohan
(Attorney-in-Fact)
</TABLE>
C-10
<PAGE> 242
EXHIBIT INDEX
The exhibits listed below which are marked by an asterisk (*) have
previously been filed with the Commission and are incorporated by
reference.
Exhibit No. Description Page Number
1 Declaration of Trust of Registrant as amended and
restated February 8, 1994.
1a Establishment and Designation of Class A Shares, Class
B Shares and Class C Shares of Beneficial Interest of John
Hancock Pacific Basin Equities Fund and Class A Shares and
Class B Shares for John Hancock Global Rx Fund dated
February 8, 1994.
1b Establishment and Designation of Class A Shares and
Class B Shares of Beneficial Interest of John Hancock
Global Retail Fund dated September 27, 1994.
1c Abolition of Class C Shares of Beneficial Interest of
John Hancock Pacific Basin Equities Fund dated May 1, 1995.
1d Instrument Changing Names of Series of Shares of the
Trust dated September 27, 1994
1e Written Consent of Sole Shareholder of John Hancock
Global Retail Fund dated September 28, 1994.
1f Instrument Changing Names of Series of Shares of the Trust
dated December 12, 1995.
2 By-Laws as adopted on February 8, 1994.
2a Amendment to By-Laws dated December 19, 1994.
3 None
4 Specimen share certificate for the John Hancock Pacific
Basin Equities Fund Classes A and B.
4a Specimen share certificate for the John Hancock Global
Rx Fund Classes A and B.
5 Investment Management Contract between Registrant and
John Hancock Advisers, Inc. May 5, 1987.
5a Amendment to Investment Management Contract dated
December 19, 1989.
<PAGE> 243
Exhibit No. Description Page Number
5b Investment Management Contract between John Hancock
Global Rx Fund and John Hancock Advisers, Inc. dated
June 24, 1991.
5c Investment Management Contract between John Hancock
Global Retail Fund and John Hancock Advisers, Inc. dated
September 28, 1994.
5d Sub-Investment Management Contract between Registrant,
John Hancock Advisers and John Hancock Advisers
International Fund dated May 5, 1987.
5e Sub-Advisory Agreement between John Hancock Advisers,
Inc. and Indosuez Asia Advisers, Limited dated
September 1, 1994.
6 Distribution Agreement with Registrant and John Hancock
Broker Distribution Services, Inc. dated August 1, 1991.
6a Amendment to Distribution Services Agreement with John
Hancock Global Rx and John Hancock Broker Services, Inc.
dated October 1, 1991.
6b Amendment to Distribution Services Agreement with John
Hancock Global Retail and John Hancock Broker Services, Inc.
dated September 30, 1994.
6c Form of Soliciting Dealer Agreement between John Hancock
Broker Distribution Services, Inc. and Selected Dealers.
7 None
8 Master Custodian Agreement between Registrant and State
Street Bank & Trust Company.
8a Amendment to Master Custodian Agreement between John
Hancock Global Retail Fund dated September 28, 1994.
8b Amendment to Master Custodian Agreement
9 Transfer Agency and Service Agreement between Registrant
and John Hancock Fund Services, Inc. dated January 1, 1991.
9a Amendment to Transfer Agency and Service Agreement
between John Hancock Global Rx Fund and John Hancock Fund
Services, Inc. dated June 24, 1991.
9b Amendment to Transfer Agency and Service Agreement
between John Hancock Global Retail Fund and John Hancock
Fund Services, Inc. dated September 28, 1994.
<PAGE> 244
Exhibit No. Description Page Number
10 Opinion and Consent of Debevoise & Plimpton
11 Consent of Price Waterhouse LLP
12 Financial Statement of the John Hancock Pacific Basin
Equities Fund for the fiscal year ended August 31, 1995
included in Part B.
12a Financial Statement of the John Hancock Global Rx Fund
for the fiscal year ended August 31, 1995 included in Part B.
12b Financial Statement of the John Hancock Global Retail
Fund for the fiscal year ended August 31, 1995 included in
Part B.
13 Subscription Agreement between Registrant and John
Hancock Advisers, Inc.
14 None
15 Class A Distribution Plan between John Hancock Global
Retail Fund and John Hancock Funds, Inc.
15a Class B Distribution Plan between John Hancock Global
Retail Fund and John Hancock Funds, Inc.
15b Class A Distribution Plan between John Hancock Global
Rx Fund and John Hancock Funds, Inc.
15c Class A Distribution Plan between John Hancock Pacific
Basin Equities Fund and John Hancock Funds, Inc.
15d Class B Distribution Plan between John Hancock Pacific
Basin Equities Fund and John Hancock Funds, Inc.
15e Class B Distribution Plan between John Hancock Global
Rx Fund and John Hancock Funds, Inc.
16 Schedule for Computation of Total Return.
17 Powers of Attorney
<PAGE> 245
Exhibit No. Description Page Number
27.1A Pacific Basin
27.1B Pacific Basin
27.2A Global Rx
27.2B Global Rx
27.3A Global Marketplace
<PAGE> 1
Exhibit 1
JOHN HANCOCK WORLD FUND
----------------------
AMENDED AND RESTATED
DECLARATION OF TRUST
Dated February 8, 1994
----------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I -- NAME AND DEFINITIONS ................................................................. 1
Section 1.1 Name.................................................................... 1
Section 1.2 Definitions............................................................. 1
ARTICLE II -- TRUSTEES ............................................................................ 3
Section 2.1 General Powers.......................................................... 3
Section 2.2 Investments............................................................. 4
Section 2.3 Legal Title............................................................. 6
Section 2.4 Issuance and Repurchase of Shares....................................... 6
Section 2.5 Delegation; Committees.................................................. 6
Section 2.6 Collection and Payment.................................................. 7
Section 2.7 Expenses................................................................ 7
Section 2.8 Manner of Acting; By-laws............................................... 7
Section 2.9 Miscellaneous Powers.................................................... 7
Section 2.10 Principal Transactions.................................................. 8
Section 2.11 Litigation.............................................................. 8
Section 2.12 Number of Trustees...................................................... 9
Section 2.13 Election and Term....................................................... 9
Section 2.14 Resignation and Removal................................................. 9
Section 2.15 Vacancies............................................................... 9
Section 2.16 Delegation of Power to Other Trustees................................... 10
ARTICLE III -- CONTRACTS .......................................................................... 10
Section 3.1 Distribution Contract................................................... 10
Section 3.2 Advisory or Management Contract......................................... 11
Section 3.3 Administration Agreement................................................ 11
Section 3.4 Service Agreement....................................................... 11
Section 3.5 Transfer Agent.......................................................... 12
Section 3.6 Custodian............................................................... 12
Section 3.7 Affiliations of Trustees or
Officers, Etc......................................................... 12
Section 3.8 Compliance with 1940 Act................................................ 13
ARTICLE IV -- LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS ............................................................ 13
Section 4.1 No Personal Liability of Shareholders,
Trustees, Etc......................................................... 13
Section 4.2 Non-Liability of Trustees, Etc.......................................... 14
Section 4.3 Mandatory Indemnification............................................... 14
Section 4.4 No Bond Required of Trustees............................................ 16
Section 4.5 No Duty of Investigation; Notice in
Trust Instruments, Etc................................................ 16
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 4.6 Reliance on Experts, Etc................................................ 17
ARTICLE V -- SHARES OF BENEFICIAL INTEREST ........................................................ 17
Section 5.1 Beneficial Interest..................................................... 17
Section 5.2 Rights of Shareholders.................................................. 17
Section 5.3 Trust Only.............................................................. 18
Section 5.4 Issuance of Shares...................................................... 18
Section 5.5 Register of Shares...................................................... 18
Section 5.6 Transfer of Shares...................................................... 19
Section 5.7 Notices................................................................. 19
Section 5.8 Treasury Shares......................................................... 19
Section 5.9 Voting Powers........................................................... 19
Section 5.10 Meetings of Shareholders................................................ 20
Section 5.11 Series or Class Designation............................................. 21
Section 5.12 Assent to Declaration of Trust.......................................... 24
ARTICLE VI -- REDEMPTION AND REPURCHASE OF SHARES ................................................. 24
Section 6.1 Redemption of Shares.................................................... 24
Section 6.2 Price................................................................... 25
Section 6.3 Payment................................................................. 25
Section 6.4 Effect of Suspension of Determination of
Net Asset Value....................................................... 25
Section 6.5 Repurchase by Agreement................................................. 26
Section 6.6 Redemption of Shareholder's Interest.................................... 26
Section 6.7 Reductions in Number of Outstanding Shares
Pursuant to Net Asset Value Formula................................... 26
Section 6.8 Suspension of Right of Redemption....................................... 26
ARTICLE VII -- DETERMINATION OF NET ASSET VALUE, NET INCOME
AND DISTRIBUTIONS .............................................................. 27
Section 7.1 Net Asset Value......................................................... 27
Section 7.2 Distributions to Shareholders........................................... 27
Section 7.3 Determination of Net Income; Constant
Net Asset Value; Reduction of
Outstanding Shares.................................................... 28
Section 7.4 Power to Modify Foregoing Procedures.................................... 29
ARTICLE VIII -- DURATION; TERMINATION OF TRUST OR A SERIES
OR CLASS; AMENDMENT; MERGERS, ETC. ............................................ 30
Section 8.1 Duration................................................................ 30
Section 8.2 Termination of the Trust or a Series or
</TABLE>
<PAGE> 4
<TABLE>
<S> <C> <C>
a Class............................................................... 30
Section 8.3 Amendment Procedure..................................................... 31
Section 8.4 Merger, Consolidation and Sale of
Assets................................................................ 31
Section 8.5 Incorporation........................................................... 32
ARTICLE IX -- REPORTS TO SHAREHOLDERS ............................................................. 32
ARTICLE X -- MISCELLANEOUS ........................................................................ 33
Section 10.1 Execution and Filing.................................................... 33
Section 10.2 Governing Law........................................................... 33
Section 10.3 Counterparts............................................................ 33
Section 10.4 Reliance by Third Parties............................................... 33
Section 10.5 Provisions in Conflict with Law or
Regulations........................................................... 34
</TABLE>
<PAGE> 5
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
JOHN HANCOCK WORLD FUND
DECLARATION OF TRUST made this 8th day of February, 1994 by the
undersigned (together with all other persons from time to time duly elected,
qualified and serving as Trustees in accordance with the provisions of Article
II hereof, the "Trustees");
WHEREAS, pursuant to a Declaration of Trust dated August 25, 1986, as
amended, the Trustees established a trust for the investment and reinvestment of
funds contributed thereto;
WHEREAS, said Declaration of Trust provides that the beneficial
interest in the trust assets be divided into transferable shares of beneficial
interest;
WHEREAS, said Declaration of Trust provides that all money and property
contributed to the trust established thereunder shall be held and managed in
trust for the benefit of the holders, from time to time, of the shares of
beneficial interest issued thereunder and subject to the provisions thereof; and
WHEREAS, the Trustees desire to amend and restate said Declaration of
Trust in its entirety, as hereinafter provided;
NOW, THEREFORE, the undersigned, being a majority of the Trustees of
the Trust, hereby amend and restate said Declaration of Trust in its entirety,
as follows:
ARTICLE I
NAME AND DEFINITIONS
Section 1.1. Name. The name of the trust created hereby is "John
Hancock World Fund."
Section 1.2. Definitions. Wherever they are used herein, the following
terms have the following respective meanings:
<PAGE> 6
(a) "Administrator" means the party, other than the Trust, to the
contract described in Section 3.3 hereof.
(b) "By-laws" means the By-laws of the Trust referred to in Section 2.8
hereof, as from time to time amended.
(c) "Class" means any division of shares within a Series, which Class
is or has been established within such Series in accordance with the provisions
of Article V hereof.
(d) The terms "Commission" and "Interested Person" have the meanings
given them in the 1940 Act. Except as such term may be otherwise defined by the
Trustees in conjunction with the establishment of any Series or Class of Shares,
the term "vote of a majority of the Shares outstanding and entitled to vote"
shall have the same meaning as is assigned to the term "vote of a majority of
the outstanding voting securities" in the 1940 Act.
(e) "Custodian" means any Person other than the Trust who has custody
of any Trust Property as required by Section 17(f) of the 1940 Act, but does not
include a system for the central handling of securities described in said
Section 17(f).
(f) "Declaration" means this Declaration of Trust as amended from time
to time. Reference in this Declaration of Trust to "Declaration," "hereof,"
"herein," or "hereunder" shall be deemed to refer to this Declaration rather
than exclusively to the article or section in which any such word appears.
(g) "Distributor" means the party, other than the Trust, to the
contract described in Section 3.1 hereof.
(h) "Fund" or "Funds," individually or collectively, means the separate
Series of Shares of the Trust, together with the assets and liabilities assigned
thereto.
(i) "Fundamental Restrictions" means the investment restrictions set
forth in the Prospectus and designated as fundamental restrictions therein.
(j) "His" shall include the feminine and neuter, as well as the
masculine, genders.
(k) "Investment Adviser" means the party, other than the Trust, to the
contract described in Section 3.2 hereof.
(l) The "1940 Act" means the Investment Company Act of 1940, as amended
from time to time.
(m) "Person" means and includes individuals, corporations,
partnerships, trusts, associations, joint ventures and other entities, whether
or not legal entities, and governments and agencies and political subdivisions
thereof.
(n) "Prospectus" means the Prospectus and Statement of Additional
Information of any Series of the Trust included in the Registration Statement of
the Trust under the Securities
<PAGE> 7
Act of 1933, as amended, as such Prospectus and Statement of Additional
Information may be amended or supplemented and filed with the Commission from
time to time.
(o) "Series" individually or collectively means the separately managed
component(s) of the Trust (or, if the Trust shall have only one such component,
then that one) as may be established and designated from time to time by the
Trustees pursuant to Section 5.11 hereof.
(p) "Shareholder" means a record owner of Outstanding Shares.
(q) "Shares" means the equal proportionate units of interest into which
the beneficial interest in the Trust shall be divided from time to time,
including the Shares of any and all Series or of any Class within any Series (as
the context may require) which may be established by the Trustees, and includes
fractions of Shares as well as whole Shares. "Outstanding Shares" means those
Shares shown from time to time on the books of the Trust or its Transfer Agent
as then issued and outstanding, but shall not include Shares which have been
redeemed or repurchased by the Trust and which are at the time held in the
treasury of the Trust.
(r) "Transfer Agent" means any Person other than the Trust who
maintains the Shareholder records of the Trust, such as the list of
Shareholders, the number of Shares credited to each account, and the like.
(s) "Trust" means John Hancock World Fund.
(t) The "Trustees" means the persons who have signed this Declaration,
so long as they shall continue in office in accordance with the terms hereof,
and all other persons who now serve or may from time to time be duly elected,
qualified and serving as trustees of the Trust in accordance with the provisions
of Article II hereof, and reference herein to a Trustee or the Trustees shall
refer to such person or persons in this capacity or their capacities as Trustees
hereunder.
(u) "Trust Property" means any and all property, real or personal,
tangible or intangible, which is owned or held by or for the account of the
Trust or the Trustees, including any and all assets of or allocated to any
Series or Class, as the context may require.
ARTICLE II
TRUSTEES
Section 2.1. General Powers. The Trustees shall have exclusive and
absolute control over the Trust Property and over the business of the Trust to
the same extent as if the Trustees were the sole owners of the Trust Property
and business in their own right, but with such powers of delegation as may be
permitted by this Declaration. The Trustees shall have power
<PAGE> 8
to conduct the business of the Trust and carry on its operations in any and all
of its branches and maintain offices both within and without The Commonwealth of
Massachusetts, in any and all states of the United States of America, in the
District of Columbia, and in any and all commonwealths, territories,
dependencies, colonies, possessions, agencies or instrumentalities of the United
States of America and of foreign governments, and to do all such other things
and execute all such instruments as they deem necessary, proper or desirable in
order to promote the interests of the Trust although such things are not herein
specifically mentioned. Any determination as to what is in the interests of the
Trust made by the Trustees in good faith shall be conclusive. In construing the
provisions of this Declaration, the presumption shall be in favor of a grant of
power to the Trustees.
The enumeration of any specific power herein shall not be construed as
limiting the aforesaid powers. Such powers of the Trustees may be exercised
without order of or resort to any court.
Section 2.2. Investments. The Trustees shall have the power:
(a) To operate as and carry on the business of an investment company,
and to exercise all the powers necessary and appropriate to the conduct of such
operations.
(b) To invest in, hold for investment, or reinvest in, cash;
securities, including common, preferred and preference stocks; warrants;
subscription rights; profit-sharing interests or participations and all other
contracts for or evidences of equity interests; bonds, debentures, bills, time
notes and all other evidences of indebtedness; negotiable or non-negotiable
instruments; government securities, including securities of any state,
municipality or other political subdivision, or any governmental or
quasi-governmental agency or instrumentality; and money market instruments
including bank certificates of deposit, finance paper, commercial paper,
bankers' acceptances and all kinds of repurchase agreements, of any corporation,
company, trust, association, firm or other business organization however
established, and of any country, state, municipality or other political
subdivision, or any governmental or quasi-governmental agency or
instrumentality; and the Trustees shall be deemed to have the foregoing powers
with respect to any additional securities in which the Trust may invest should
the Fundamental Restrictions be amended.
(c) To acquire (by purchase, subscription or otherwise), to hold, to
trade in and deal in, to acquire any rights or options to purchase or sell, to
sell or otherwise dispose of, to lend and to pledge any such securities, to
enter into repurchase agreements, reverse repurchase agreements, firm commitment
agreements, and forward foreign currency exchange contracts, to purchase and
sell options on securities, indices, currency or other financial assets, futures
contracts and options on futures contracts of all descriptions and to engage in
all types of hedging and risk management transactions.
(d) To exercise all rights, powers and privileges of ownership or
interest in all securities and repurchase agreements included in the Trust
Property, including the right to vote thereon and otherwise act with respect
thereto and to do all acts for the preservation, protection, improvement and
enhancement in value of all such securities and repurchase agreements.
<PAGE> 9
(e) To acquire (by purchase, lease or otherwise) and to hold, use,
maintain, develop and dispose of (by sale or otherwise) any property, real or
personal, including cash or foreign currency, and any interest therein.
(f) To borrow money and in this connection issue notes or other
evidences of indebtedness; to secure borrowings by mortgaging, pledging or
otherwise subjecting as security the Trust Property; and to endorse, guarantee,
or undertake the performance of any obligation or engagement of any other Person
and to lend Trust Property.
(g) To aid by further investment any corporation, company, trust,
association or firm, any obligation of or interest in which is included in the
Trust Property or in the affairs of which the Trustees have any direct or
indirect interest; to do all acts and things designed to protect, preserve,
improve or enhance the value of such obligation or interest; and to guarantee or
become surety on any or all of the contracts, stocks, bonds, notes, debentures
and other obligations of any such corporation, company, trust, association or
firm.
(h) To enter into a plan of distribution and any related agreements
whereby the Trust may finance directly or indirectly any activity which is
primarily intended to result in sales of the Shares.
(i) To adopt on behalf of the Trust or any Series thereof an
alternative purchase plan providing for the issuance of multiple Classes of
Shares (as authorized herein at Section 5.11).
(j) In general to carry on any other business in connection with or
incidental to any of the foregoing powers, to do everything necessary, suitable
or proper for the accomplishment of any purpose or the attainment of any object
or the furtherance of any power hereinbefore set forth, either alone or in
association with others, and to do every other act or thing incidental or
appurtenant to or arising out of or connected with the aforesaid business or
purposes, objects or powers.
The foregoing clauses shall be construed both as objects and powers,
and the foregoing enumeration of specific powers shall not be held to limit or
restrict in any manner the general powers of the Trustees.
The Trustees shall not be limited to investing in obligations maturing
before the possible termination of the Trust, nor shall the Trustees be limited
by any law limiting the investments which may be made by fiduciaries.
Section 2.3. Legal Title. Legal title to all the Trust Property shall
be vested in the Trustees as joint tenants except that the Trustees shall have
power to cause legal title to any Trust Property to be held by or in the name of
one or more of the Trustees, or in the name of the Trust or any Series of the
Trust, or in the name of any other Person as nominee, on such terms as the
Trustees may determine; provided, that the interest of the Trust therein is
deemed appropriately protected. The right, title and interest of the Trustees in
the Trust Property shall
<PAGE> 10
vest automatically in each Person who may hereafter become a Trustee. Upon the
termination of the term of office, resignation, removal or death of a Trustee he
shall automatically cease to have any right, title or interest in any of the
Trust Property, and the right, title and interest of such Trustee in the Trust
Property shall vest automatically in the remaining Trustees. Such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered.
Section 2.4. Issuance and Repurchase of Shares. The Trustees shall have
the power to issue, sell, repurchase, redeem, retire, cancel, acquire, hold,
resell, reissue, dispose of, transfer, and otherwise deal in Shares and, subject
to the provisions set forth in Articles VI and VII and Section 5.11 hereof, to
apply to any such repurchase, redemption, retirement, cancellation or
acquisition of Shares any funds or property of the Trust, whether capital or
surplus or otherwise, to the full extent now or hereafter permitted by the laws
of The Commonwealth of Massachusetts governing business corporations.
Section 2.5. Delegation; Committees. The Trustees shall have power,
consistent with their continuing exclusive authority over the management of the
Trust and the Trust Property, to delegate from time to time to such of their
number or to officers, employees or agents of the Trust the doing of such things
and the execution of such instruments either in the name of the Trust or any
Series of the Trust or the names of the Trustees or otherwise as the Trustees
may deem expedient, to the same extent as such delegation is permitted by the
1940 Act.
Section 2.6. Collection and Payment. Subject to Section 5.11 hereof,
the Trustees shall have power to collect all property due to the Trust; to pay
all claims, including taxes, against the Trust Property; to prosecute, defend,
compromise or abandon any claims relating to the Trust Property; to foreclose
any security interest securing any obligation, by virtue of which any property
is owed to the Trust; and to enter into releases, agreements and other
instruments.
Section 2.7. Expenses. Subject to Section 5.11 hereof, the Trustees
shall have the power to incur and pay any expenses which in the opinion of the
Trustees are necessary or incidental to carry out any of the purposes of this
Declaration, and to pay reasonable compensation from the funds of the Trust to
themselves as Trustees. The Trustees shall fix the compensation of all officers
and employees of the Trust and of the Trustees.
Section 2.8. Manner of Acting; By-laws. Except as otherwise provided
herein or in the By-laws, any action to be taken by the Trustees may be taken by
a majority of the Trustees present at a meeting of Trustees (a quorum being
present), including any meeting held by means of a conference telephone circuit
or similar communications equipment by means of which all persons participating
in the meeting can hear each other, or by written consents of a majority of the
entire number of Trustees then in office. The Trustees may adopt By-laws not
inconsistent with this Declaration to provide for the conduct of the business of
the Trust and may amend or repeal such By-laws to the extent such power is not
reserved to the Shareholders.
Notwithstanding the foregoing provisions of this Section 2.8 and in
addition to such provisions or any other provision of this Declaration or of the
By-laws, the Trustees may by resolution appoint a committee consisting of less
than the whole number of Trustees then in
<PAGE> 11
office, which committee may be empowered to act for and bind the Trustees and
the Trust, as if the acts of such committee were the acts of all the Trustees
then in office, with respect to the institution, prosecution, dismissal,
settlement, review or investigation of any action, suit or proceeding which
shall be pending or threatened to be brought before any court, administrative
agency or other adjudicatory body.
Section 2.9. Miscellaneous Powers. Subject to Section 5.11 hereof, the
Trustees shall have the power to: (a) employ or contract with such Persons as
the Trustees may deem desirable for the transaction of the business of the Trust
or any Series thereof; (b) enter into joint ventures, partnerships and any other
combinations or associations; (c) remove Trustees or fill vacancies in or add to
their number, elect and remove such officers and appoint and terminate such
agents or employees as they consider appropriate, and appoint from their own
number, and terminate, any one or more committees which may exercise some or all
of the power and authority of the Trustees as the Trustees may determine; (d)
purchase, and pay for out of Trust Property or the Trust Property of the
appropriate Series of the Trust, insurance policies insuring the Shareholders,
Trustees, officers, employees, agents, investment advisers, administrators,
distributors, selected dealers or independent contractors of the Trust against
all claims arising by reason of holding any such position or by reason of any
action taken or omitted by any such Person in such capacity, whether or not
constituting negligence, or whether or not the Trust would have the power to
indemnify such Person against such liability; (e) establish pension,
profit-sharing, Share purchase, and other retirement, incentive and benefit
plans for any Trustees, officers, employees and agents of the Trust; (f) to the
extent permitted by law, indemnify any person with whom the Trust or any Series
thereof has dealings, including the Investment Adviser, Administrator,
Distributor, Transfer Agent and selected dealers, to such extent as the Trustees
shall determine; (g) guarantee indebtedness or contractual obligations of
others; (h) determine and change the fiscal year of the Trust or any Series
thereof and the method by which its accounts shall be kept; and (i) adopt a seal
for the Trust, but the absence of such seal shall not impair the validity of any
instrument executed on behalf of the Trust.
Section 2.10. Principal Transactions. Except in transactions not
permitted by the 1940 Act or rules and regulations adopted by the Commission,
the Trustees may, on behalf of the Trust, buy any securities from or sell any
securities to, or lend any assets of the Trust or any Series thereof to any
Trustee or officer of the Trust or any firm of which any such Trustee or officer
is a member acting as principal, or have any such dealings with the Investment
Adviser, Distributor or Transfer Agent or with any Interested Person of such
Person; and the Trust or a Series thereof may employ any such Person, or firm or
company in which such Person is an Interested Person, as broker, legal counsel,
registrar, transfer agent, dividend disbursing agent or custodian upon customary
terms.
Section 2.11. Litigation. The Trustees shall have the power to engage
in and to prosecute, defend, compromise, abandon, or adjust by arbitration, or
otherwise, any actions, suits, proceedings, disputes, claims, and demands
relating to the Trust, and out of the assets of the Trust or any Series thereof
to pay or to satisfy any debts, claims or expenses incurred in connection
therewith, including those of litigation, and such power shall include without
<PAGE> 12
limitation the power of the Trustees or any appropriate committee thereof, in
the exercise of their or its good faith business judgment, to dismiss any
action, suit, proceeding, dispute, claim, or demand, derivative or otherwise,
brought by any person, including a Shareholder in its own name or the name of
the Trust, whether or not the Trust or any of the Trustees may be named
individually therein or the subject matter arises by reason of business for or
on behalf of the Trust.
Section 2.12. Number of Trustees. The number of Trustees shall be such
number as shall be fixed from time to time by a written instrument signed by a
majority of the Trustees, provided, however, that the number of Trustees shall
in no event be less than two (2) nor more than fifteen (15).
Section 2.13. Election and Term. Except for the Trustees named herein
or appointed to fill vacancies pursuant to Section 2.15 hereof, the Trustees may
succeed themselves and shall be elected by the Shareholders owning of record a
plurality of the Shares voting at a meeting of Shareholders on a date fixed by
the Trustees. Except in the event of resignations or removals pursuant to
Section 2.14 hereof, each Trustee shall hold office until such time as less than
a majority of the Trustees holding office have been elected by Shareholders. In
such event the Trustees then in office will call a Shareholders' meeting for the
election of Trustees. Except for the foregoing circumstances, the Trustees shall
continue to hold office and may appoint successor Trustees.
Section 2.14. Resignation and Removal. Any Trustee may resign his trust
(without the need for any prior or subsequent accounting) by an instrument in
writing signed by him and delivered to the other Trustees and such resignation
shall be effective upon such delivery, or at a later date according to the terms
of the instrument. Any of the Trustees may be removed (provided the aggregate
number of Trustees after such removal shall not be less than two) with cause, by
the action of two-thirds of the remaining Trustees or by action of two-thirds of
the outstanding Shares of the Trust (for purposes of determining the
circumstances and procedures under which any such removal by the Shareholders
may take place, the provisions of Section 16(c) of the 1940 Act shall be
applicable to the same extent as if the Trust were subject to the provisions of
that Section). Upon the resignation or removal of a Trustee, or his otherwise
ceasing to be a Trustee, he shall execute and deliver such documents as the
remaining Trustees shall require for the purpose of conveying to the Trust or
the remaining Trustees any Trust Property held in the name of the resigning or
removed Trustee. Upon the incapacity or death of any Trustee, his legal
representative shall execute and deliver on his behalf such documents as the
remaining Trustees shall require as provided in the preceding sentence.
Section 2.15. Vacancies. The term of office of a Trustee shall
terminate and a vacancy shall occur in the event of his death, retirement,
resignation, removal, bankruptcy, adjudicated incompetence or other incapacity
to perform the duties of the office of a Trustee. No such vacancy shall operate
to annul the Declaration or to revoke any existing agency created pursuant to
the terms of the Declaration. In the case of an existing vacancy, including a
vacancy existing by reason of an increase in the number of Trustees, subject to
the provisions of Section 16(a) of the 1940 Act, the remaining Trustees shall
fill such vacancy by the appointment of such other person as they in their
discretion shall see fit, made by a written instrument signed by a majority of
the Trustees then in office. Any such appointment shall not
<PAGE> 13
become effective, however, until the person named in the written instrument of
appointment shall have accepted in writing such appointment and agreed in
writing to be bound by the terms of the Declaration. An appointment of a Trustee
may be made in anticipation of a vacancy to occur at a later date by reason of
retirement, resignation or increase in the number of Trustees, provided that
such appointment shall not become effective prior to such retirement,
resignation or increase in the number of Trustees. Whenever a vacancy in the
number of Trustees shall occur, until such vacancy is filled as provided in this
Section 2.15, the Trustees in office, regardless of their number, shall have all
the powers granted to the Trustees and shall discharge all the duties imposed
upon the Trustees by the Declaration. A written instrument certifying the
existence of such vacancy signed by a majority of the Trustees in office shall
be conclusive evidence of the existence of such vacancy.
Section 2.16. Delegation of Power to Other Trustees. Any Trustee may,
by power of attorney, delegate his power for a period not exceeding six (6)
months at any one time to any other Trustee or Trustees; provided, that in no
case shall fewer than two (2) Trustees personally exercise the powers granted to
the Trustees under this Declaration except as herein otherwise expressly
provided.
ARTICLE III
CONTRACTS
Section 3.1. Distribution Contract. The Trustees may in their
discretion from time to time enter into an exclusive or non-exclusive
distribution contract or contracts providing for the sale of the Shares to net
the Trust or the applicable Series of the Trust not less than the amount
provided for in Section 7.1 of Article VII hereof, whereby the Trustees may
either agree to sell the Shares to the other party to the contract or appoint
such other party as their sales agent for the Shares, and in either case on such
terms and conditions, if any, as may be prescribed in the By-Laws, and such
further terms and conditions as the Trustees may in their discretion determine
not inconsistent with the provisions of this Article III or of the By-Laws; and
such contract may also provide for the repurchase of the Shares by such other
party as agent of the Trustees.
Section 3.2. Advisory or Management Contract. Subject to approval by a
vote of a majority of the Shares outstanding and entitled to vote, the Trustees
may in their discretion from time to time enter into one or more investment
advisory or management contracts or, if the Trustees establish multiple Series,
separate investment advisory or management contracts with respect to one or more
Series whereby the other party or parties to any such contracts shall undertake
to furnish the Trust or such Series management, investment advisory,
administration, accounting, legal, statistical and research facilities and
services, promotional or marketing activities, and such other facilities and
services, if any, as the Trustees shall from time to time consider desirable and
all upon such terms and conditions as the Trustees may in their discretion
determine. Notwithstanding any provisions of the Declaration, the Trustees may
authorize the Investment Advisers, or any of them, under any such contracts
(subject to
<PAGE> 14
such general or specific instructions as the Trustees may from time to time
adopt) to effect purchases, sales, loans or exchanges of portfolio securities
and other investments of the Trust on behalf of the Trustees or may authorize
any officer, employee or Trustee to effect such purchases, sales, loans or
exchanges pursuant to recommendations of such Investment Advisers, or any of
them (and all without further action by the Trustees). Any such purchases,
sales, loans and exchanges shall be deemed to have been authorized by all of the
Trustees. The Trustees may, in their sole discretion, call a meeting of
Shareholders in order to submit to a vote of Shareholders at such meeting the
approval or continuance of any such investment advisory or management contract.
If the Shareholders of any one or more of the Series of the Trust should fail to
approve any such investment advisory or management contract, the Investment
Adviser may nonetheless serve as Investment Adviser with respect to any Series
whose Shareholders approve such contract.
Section 3.3. Administration Agreement. The Trustees may in their
discretion from time to time enter into an administration agreement or, if the
Trustees establish multiple Series or Classes, separate administration
agreements with respect to each Series or Class, whereby the other party to such
agreement shall undertake to manage the business affairs of the Trust or of a
Series or Class thereof and furnish the Trust or a Series or Class thereof with
office facilities, and shall be responsible for the ordinary clerical,
bookkeeping and recordkeeping services at such office facilities, and other
facilities and services, if any, and all upon such terms and conditions as the
Trustees may in their discretion determine.
Section 3.4. Service Agreement. The Trustees may in their discretion
from time to time enter into Service Agreements with respect to one or more
Series or Classes of Shares whereby the other parties to such Service Agreements
will provide administration and/or support services pursuant to administration
plans and service plans, and all upon such terms and conditions as the Trustees
in their discretion may determine.
Section 3.5. Transfer Agent. The Trustees may in their discretion from
time to time enter into a transfer agency and shareholder service contract
whereby the other party to such contract shall undertake to furnish transfer
agency and shareholder services to the Trust. The contract shall have such terms
and conditions as the Trustees may in their discretion determine not
inconsistent with the Declaration. Such services may be provided by one or more
Persons.
Section 3.6. Custodian. The Trustees may appoint or otherwise engage
one or more banks or trust companies, each having an aggregate capital, surplus
and undivided profits (as shown in its last published report) of at least two
million dollars ($2,000,000) to serve as Custodian with authority as its agent,
but subject to such restrictions, limitations and other requirements, if any, as
may be contained in the By-laws of the Trust. The Trustees may also authorize
the Custodian to employ one or more sub-custodians, including such foreign banks
and securities depositories as meet the requirements of applicable provisions of
the 1940 Act, and upon such terms and conditions as may be agreed upon between
the Custodian and such sub-custodian, to hold securities and other assets of the
Trust and to perform the acts and services of the Custodian, subject to
applicable provisions of law and resolutions adopted by the Trustees.
Section 3.7. Affiliations of Trustees or Officers, Etc. The fact that:
<PAGE> 15
(i)any of the Shareholders, Trustees or officers of the Trust or any
Series thereof is a shareholder, director, officer, partner, trustee, employee,
manager, adviser or distributor of or for any partnership, corporation, trust,
association or other organization or of or for any parent or affiliate of any
organization, with which a contract of the character described in Sections 3.1,
3.2, 3.3 or 3.4 above or for services as Custodian, Transfer Agent or disbursing
agent or for related services may have been or may hereafter be made, or that
any such organization, or any parent or affiliate thereof, is a Shareholder of
or has an interest in the Trust, or that
(ii)any partnership, corporation, trust, association or other organization
with which a contract of the character described in Sections 3.1, 3.2, 3.3 or
3.4 above or for services as Custodian, Transfer Agent or disbursing agent or
for related services may have been or may hereafter be made also has any one or
more of such contracts with one or more other partnerships, corporations,
trusts, associations or other organizations, or has other business or interests,
shall not affect the validity of any such contract or disqualify any
Shareholder, Trustee or officer of the Trust from voting upon or executing the
same or create any liability or accountability to the Trust or its Shareholders.
Section 3.8. Compliance with 1940 Act. Any contract entered into
pursuant to Sections 3.1 or 3.2 shall be consistent with and subject to the
requirements of Section 15 of the 1940 Act (including any amendment thereof or
other applicable Act of Congress hereafter enacted), as modified by any
applicable order or orders of the Commission, with respect to its continuance in
effect, its termination and the method of authorization and approval of such
contract or renewal thereof.
ARTICLE IV
LIMITATIONS OF LIABILITY OF SHAREHOLDERS,
TRUSTEES AND OTHERS
Section 4.1. No Personal Liability of Shareholders, Trustees, Etc. No
Shareholder shall be subject to any personal liability whatsoever to any Person
in connection with Trust Property or the acts, obligations or affairs of the
Trust or any Series thereof. No Trustee, officer, employee or agent of the Trust
or any Series thereof shall be subject to any personal liability whatsoever to
any Person, other than to the Trust or its Shareholders, in connection with
Trust Property or the affairs of the Trust, save only that arising from bad
faith, willful misfeasance, gross negligence or reckless disregard of his duties
with respect to such Person; and all such Persons shall look solely to the Trust
Property, or to the Trust Property of one or more specific Series of the Trust
if the claim arises from the conduct of such Trustee, officer, employee or agent
with respect to only such Series, for satisfaction of claims of any nature
arising in connection with the affairs of the Trust. If any Shareholder,
Trustee, officer, employee, or agent, as such, of the Trust or any Series
thereof, is made a party to any suit or
<PAGE> 16
proceeding to enforce any such liability of the Trust or any Series thereof, he
shall not, on account thereof, be held to any personal liability. The Trust
shall indemnify and hold each Shareholder harmless from and against all claims
and liabilities, to which such Shareholder may become subject by reason of his
being or having been a Shareholder, and shall reimburse such Shareholder or
former Shareholder (or his or her heirs, executors, administrators or other
legal representatives or in the case of a corporation or other entity, its
corporate or other general successor) out of the Trust Property for all legal
and other expenses reasonably incurred by him in connection with any such claim
or liability. The indemnification and reimbursement required by the preceding
sentence shall be made only out of assets of the one or more Series whose Shares
were held by said Shareholder at the time the act or event occurred which gave
rise to the claim against or liability of said Shareholder. The rights accruing
to a Shareholder under this Section 4.1 shall not impair any other right to
which such Shareholder may be lawfully entitled, nor shall anything herein
contained restrict the right of the Trust or any Series thereof to indemnify or
reimburse a Shareholder in any appropriate situation even though not
specifically provided herein.
Section 4.2. Non-Liability of Trustees, Etc. No Trustee, officer,
employee or agent of the Trust or any Series thereof shall be liable to the
Trust, its Shareholders, or to any Shareholder, Trustee, officer, employee, or
agent thereof for any action or failure to act (including without limitation the
failure to compel in any way any former or acting Trustee to redress any breach
of trust) except for his own bad faith, willful misfeasance, gross negligence or
reckless disregard of the duties involved in the conduct of his office.
Section 4.3. Mandatory Indemnification. (a) Subject to the exceptions
and limitations contained in paragraph (b) below:
(i)every person who is, or has been, a Trustee, officer, employee or agent
of the Trust (including any individual who serves at its request as director,
officer, partner, trustee or the like of another organization in which it has
any interest as a shareholder, creditor or otherwise) shall be indemnified by
the Trust, or by one or more Series thereof if the claim arises from his or her
conduct with respect to only such Series, to the fullest extent permitted by law
against all liability and against all expenses reasonably incurred or paid by
him in connection with any claim, action, suit or proceeding in which he becomes
involved as a party or otherwise by virtue of his being or having been a Trustee
or officer and against amounts paid or incurred by him in the settlement
thereof;
(ii)the words "claim," "action," "suit," or "proceeding" shall apply to
all claims, actions, suits or proceedings (civil, criminal, or other, including
appeals), actual or threatened; and the words "liability" and "expenses" shall
include, without limitation, attorneys' fees, costs, judgments, amounts paid in
settlement, fines, penalties and other liabilities.
(b) No indemnification shall be provided hereunder to a Trustee or
officer:
(i)against any liability to the Trust, a Series thereof or the
Shareholders by reason of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office;
<PAGE> 17
(ii)with respect to any matter as to which he shall have been finally
adjudicated not to have acted in good faith in the reasonable belief that his
action was in the best interest of the Trust or a Series thereof;
(iii)in the event of a settlement or other disposition not involving a
final adjudication as provided in paragraph (b)(ii) resulting in a payment by a
Trustee or officer, unless there has been a determination that such Trustee or
officer did not engage in willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his office:
(A) by the court or other body approving the settlement or other
disposition;
(B) based upon a review of readily available facts (as opposed to a
full trial-type inquiry) by (x) vote of a majority of the Non-interested
Trustees acting on the matter (provided that a majority of the Non-interested
Trustees then in office act on the matter) or (y) written opinion of independent
legal counsel; or
(C) a vote of a majority of the Shares outstanding and entitled to vote
(excluding Shares owned of record or beneficially by such individual).
(c) The rights of indemnification herein provided may be insured
against by policies maintained by the Trust, shall be severable, shall not
affect any other rights to which any Trustee or officer may now or hereafter be
entitled, shall continue as to a person who has ceased to be such Trustee or
officer and shall inure to the benefit of the heirs, executors, administrators
and assigns of such a person. Nothing contained herein shall affect any rights
to indemnification to which personnel of the Trust or any Series thereof other
than Trustees and officers may be entitled by contract or otherwise under law.
(d) Expenses of preparation and presentation of a defense to any claim,
action, suit or proceeding of the character described in paragraph (a) of this
Section 4.3 may be advanced by the Trust or a Series thereof prior to final
disposition thereof upon receipt of an undertaking by or on behalf of the
recipient to repay such amount if it is ultimately determined that he is not
entitled to indemnification under this Section 4.3, provided that either:
(i)such undertaking is secured by a surety bond or some other appropriate
security provided by the recipient, or the Trust or Series thereof shall be
insured against losses arising out of any such advances; or
(ii)a majority of the Non-interested Trustees acting on the matter
(provided that a majority of the Non-interested Trustees act on the matter) or
an independent legal counsel in a written opinion shall determine, based upon a
review of readily available facts (as opposed to a full trial-type inquiry),
that there is reason to believe that the recipient ultimately will be found
entitled to indemnification.
As used in this Section 4.3, a "Non-interested Trustee" is one who (i)
is not an Interested Person of the Trust (including anyone who has been exempted
from being an
<PAGE> 18
Interested Person by any rule, regulation or order of the Commission), and (ii)
is not involved in the claim, action, suit or proceeding.
Section 4.4. No Bond Required of Trustees. No Trustee shall be
obligated to give any bond or other security for the performance of any of his
duties hereunder.
Section 4.5. No Duty of Investigation; Notice in Trust Instruments,
Etc. No purchaser, lender, transfer agent or other Person dealing with the
Trustees or any officer, employee or agent of the Trust or a Series thereof
shall be bound to make any inquiry concerning the validity of any transaction
purporting to be made by the Trustees or by said officer, employee or agent or
be liable for the application of money or property paid, loaned, or delivered to
or on the order of the Trustees or of said officer, employee or agent. Every
obligation, contract, instrument, certificate, Share, other security of the
Trust or a Series thereof or undertaking, and every other act or thing
whatsoever executed in connection with the Trust shall be conclusively presumed
to have been executed or done by the executors thereof only in their capacity as
Trustees under this Declaration or in their capacity as officers, employees or
agents of the Trust or a Series thereof. Every written obligation, contract,
instrument, certificate, Share, other security of the Trust or a Series thereof
or undertaking made or issued by the Trustees may recite that the same is
executed or made by them not individually, but as Trustees under the
Declaration, and that the obligations of the Trust or a Series thereof under any
such instrument are not binding upon any of the Trustees or Shareholders
individually, but bind only the Trust Property or the Trust Property of the
applicable Series, and may contain any further recital which they may deem
appropriate, but the omission of such recital shall not operate to bind the
Trustees or the Shareholders individually. The Trustees shall at all times
maintain insurance for the protection of the Trust Property or the Trust
Property of the applicable Series, its Shareholders, Trustees, officers,
employees and agents in such amount as the Trustees shall deem adequate to cover
possible tort liability, and such other insurance as the Trustees in their sole
judgment shall deem advisable.
Section 4.6. Reliance on Experts, Etc. Each Trustee, officer or
employee of the Trust or a Series thereof shall, in the performance of his
duties, be fully and completely justified and protected with regard to any act
or any failure to act resulting from reliance in good faith upon the books of
account or other records of the Trust or a Series thereof, upon an opinion of
counsel, or upon reports made to the Trust or a Series thereof by any of its
officers or employees or by the Investment Adviser, the Administrator, the
Distributor, the Transfer Agent, selected dealers, accountants, appraisers or
other experts or consultants selected with reasonable care by the Trustees,
officers or employees of the Trust, regardless of whether such counsel or expert
may also be a Trustee.
ARTICLE V
SHARES OF BENEFICIAL INTEREST
Section 5.1. Beneficial Interest. The interest of the beneficiaries
hereunder shall be divided into transferable Shares of beneficial interest
without par value. The number of such Shares of beneficial interest authorized
hereunder is unlimited. The Trustees shall have the
<PAGE> 19
exclusive authority without the requirement of Shareholder approval to establish
and designate one or more Series of shares and one or more Classes thereof as
the Trustees deem necessary or desirable. Each Share of any Series shall
represent an equal proportionate Share in the assets of that Series with each
other Share in that Series. Subject to the provisions of Section 5.11 hereof,
the Trustees may also authorize the creation of additional Series of Shares (the
proceeds of which may be invested in separate, independently managed portfolios)
and additional Classes of Shares within any Series. All Shares issued hereunder
including, without limitation, Shares issued in connection with a dividend in
Shares or a split in Shares, shall be fully paid and nonassessable.
Section 5.2. Rights of Shareholders. The ownership of the Trust
Property of every description and the right to conduct any business hereinbefore
described are vested exclusively in the Trustees, and the Shareholders shall
have no interest therein other than the beneficial interest conferred by their
Shares, and they shall have no right to call for any partition or division of
any property, profits, rights or interests of the Trust nor can they be called
upon to share or assume any losses of the Trust or suffer an assessment of any
kind by virtue of their ownership of Shares. The Shares shall be personal
property giving only the rights specifically set forth in this Declaration. The
Shares shall not entitle the holder to preference, preemptive, appraisal,
conversion or exchange rights, except as the Trustees may determine with respect
to any Series or Class of Shares.
Section 5.3. Trust Only. It is the intention of the Trustees to create
only the relationship of Trustee and beneficiary between the Trustees and each
Shareholder from time to time. It is not the intention of the Trustees to create
a general partnership, limited partnership, joint stock association,
corporation, bailment or any form of legal relationship other than a trust.
Nothing in this Declaration shall be construed to make the Shareholders, either
by themselves or with the Trustees, partners or members of a joint stock
association.
Section 5.4. Issuance of Shares. The Trustees in their discretion may,
from time to time without vote of the Shareholders, issue Shares, in addition to
the then issued and outstanding Shares and Shares held in the treasury, to such
party or parties and for such amount and type of consideration, including cash
or property, at such time or times and on such terms as the Trustees may deem
best, except that only Shares previously contracted to be sold may be issued
during any period when the right of redemption is suspended pursuant to Section
6.8 hereof, and may in such manner acquire other assets (including the
acquisition of assets subject to, and in connection with the assumption of,
liabilities) and businesses. In connection with any issuance of Shares, the
Trustees may issue fractional Shares and Shares held in the treasury. The
Trustees may from time to time divide or combine the Shares of the Trust or, if
the Shares be divided into Series or Classes, of any Series or any Class thereof
of the Trust, into a greater or lesser number without thereby changing the
proportionate beneficial interests in the Trust or in the Trust Property
allocated or belonging to such Series or Class. Contributions to the Trust or
any Series thereof may be accepted for, and Shares shall be redeemed as, whole
Shares and/or 1/1,000ths of a Share or integral multiples thereof.
<PAGE> 20
Section 5.5. Register of Shares. A register shall be kept at the
principal office of the Trust or an office of the Transfer Agent which shall
contain the names and addresses of the Shareholders and the number of Shares
held by them respectively and a record of all transfers thereof. Such register
shall be conclusive as to who are the holders of the Shares and who shall be
entitled to receive dividends or distributions or otherwise to exercise or enjoy
the rights of Shareholders. No Shareholder shall be entitled to receive payment
of any dividend or distribution, nor to have notice given to him as provided
herein or in the By-laws, until he has given his address to the Transfer Agent
or such other officer or agent of the Trustees as shall keep the said register
for entry thereon. It is not contemplated that certificates will be issued for
the Shares; however, the Trustees, in their discretion, may authorize the
issuance of share certificates and promulgate appropriate rules and regulations
as to their use.
Section 5.6. Transfer of Shares. Shares shall be transferable on the
records of the Trust only by the record holder thereof or by his agent thereunto
duly authorized in writing, upon delivery to the Trustees or the Transfer Agent
of a duly executed instrument of transfer, together with such evidence of the
genuineness of each such execution and authorization and of other matters as may
reasonably be required. Upon such delivery the transfer shall be recorded on the
register of the Trust. Until such record is made, the Shareholder of record
shall be deemed to be the holder of such Shares for all purposes hereunder and
neither the Trustees nor any Transfer Agent or registrar nor any officer,
employee or agent of the Trust shall be affected by any notice of the proposed
transfer.
Any person becoming entitled to any Shares in consequence of the death,
bankruptcy, or incompetence of any Shareholder, or otherwise by operation of
law, shall be recorded on the register of Shares as the holder of such Shares
upon production of the proper evidence thereof to the Trustees or the Transfer
Agent, but until such record is made, the Shareholder of record shall be deemed
to be the holder of such Shares for all purposes hereunder and neither the
Trustees nor any Transfer Agent or registrar nor any officer or agent of the
Trust shall be affected by any notice of such death, bankruptcy or incompetence,
or other operation of law.
Section 5.7. Notices. Any and all notices to which any Shareholder may
be entitled and any and all communications shall be deemed duly served or given
if mailed, postage prepaid, addressed to any Shareholder of record at his last
known address as recorded on the register of the Trust.
Section 5.8. Treasury Shares. Shares held in the treasury shall, until
resold pursuant to Section 5.4, not confer any voting rights on the Trustees,
nor shall such Shares be entitled to any dividends or other distributions
declared with respect to the Shares.
Section 5.9. Voting Powers. The Shareholders shall have power to vote
only (i) for the election of Trustees as provided in Section 2.13; (ii) with
respect to any investment advisory contract entered into pursuant to Section
3.2; (iii) with respect to termination of the Trust or a Series or Class thereof
as provided in Section 8.2; (iv) with respect to any amendment of this
Declaration to the limited extent provided in Section 8.3; (v) with respect to
any merger, consolidation or sale of assets as provided in Section 8.4; (vi)
with respect to incorporation of the Trust to the extent and as provided in
Section 8.5; (vii) to the same extent as the stockholders of a Massachusetts
business corporation as to whether or not a court
<PAGE> 21
action, proceeding or claim should or should not be brought or maintained
derivatively or as a class action on behalf of the Trust or a Series thereof or
the Shareholders of either; (viii) with respect to any plan adopted pursuant to
Rule 12b-1 (or any successor rule) under the 1940 Act, and related matters; and
(ix) with respect to such additional matters relating to the Trust as may be
required by this Declaration, the By-laws or any registration of the Trust as an
investment company under the 1940 Act with the Commission (or any successor
agency) or as the Trustees may consider necessary or desirable. Each whole Share
shall be entitled to one vote as to any matter on which it is entitled to vote
and each fractional Share shall be entitled to a proportionate fractional vote.
On any matter submitted to a vote of Shareholders, all Shares shall be voted by
individual Series except (1) when permitted by the 1940 Act, Shares shall be
voted in the aggregate and not by individual Series; and (2) when the Trustees
have determined that the matter affects only the interests of one or more Series
or Classes thereof, then only the Shareholders of such Series or Classes shall
be entitled to vote thereon. The Trustees may, in conjunction with the
establishment of any further Series or any Classes of Shares, establish
conditions under which the several Series or Classes of Shares shall have
separate voting rights or no voting rights. There shall be no cumulative voting
in the election of Trustees. Until Shares are issued, the Trustees may exercise
all rights of Shareholders and may take any action required by law, this
Declaration or the By-laws to be taken by Shareholders. The By-laws may include
further provisions for Shareholders' votes and meetings and related matters.
Section 5.10. Meetings of Shareholders. No annual or regular meetings
of Shareholders are required. Special meetings of the Shareholders, including
meetings involving only the holders of Shares of one or more but less than all
Series or Classes thereof, may be called at any time by the Chairman of the
Board, the President, or any Vice-President of the Trust, and shall be called by
the President or the Secretary at the request, in writing or by resolution, of a
majority of the Trustees, or at the written request of the holder or holders of
ten percent (10%) or more of the total number of Shares then issued and
outstanding of the Trust entitled to vote at such meeting. Meetings of the
Shareholders of any Series or Class thereof shall be called by the President or
the Secretary at the written request of the holder or holders of ten percent
(10%) or more of the total number of Shares then issued and outstanding of such
Series or Class entitled to vote at such meeting. Any such request shall state
the purpose of the proposed meeting.
Section 5.11. Series or Class Designation. (a) Without limiting the
authority of the Trustees set forth in Section 5.1 to establish and designate
any further Series, it is hereby confirmed that the Trust consists of the
presently Outstanding Shares of three (3) Series: John Hancock Freedom Pacific
Basin Equities Fund, John Hancock Freedom Global Rx Fund and John Hancock Global
Retail Fund (the "Existing Series"), each of which consists of one Class of
Shares.
(b) The Shares of the Existing Series and such Classes thereof herein
established and designated and any Shares of any further Series and Classes
thereof that may from time to time be established and designated by the Trustees
shall be established and designated, and the variations in the relative rights
and preferences as between the different Series and Classes
<PAGE> 22
shall be fixed and determined, by the Trustees (unless the Trustees otherwise
determine with respect to further Series or Classes at the time of establishing
and designating the same); provided, that all Shares shall be identical except
that there may be variations so fixed and determined between different Series or
Classes thereof as to investment objective, policies and restrictions, purchase
price, payment obligations, distribution expenses, right of redemption, special
and relative rights as to dividends and on liquidation, conversion rights,
exchange rights, and conditions under which the several Series or Classes shall
have separate voting rights, all of which are subject to the limitations set
forth below. All references to Shares in this Declaration shall be deemed to be
Shares of any or all Series or Classes as the context may require.
(c) As to any existing Series and Classes, both heretofore and herein
established and designated, and any further division of Shares of the Trust into
additional Series or Classes, the following provisions shall be applicable:
(i)The number of authorized Shares and the number of Shares of each Series
or Class thereof that may be issued shall be unlimited. The Trustees may
classify or reclassify any unissued Shares or any Shares previously issued and
reacquired of any Series or Class into one or more Series or one or more Classes
that may be established and designated from time to time. The Trustees may hold
as treasury shares (of the same or some other Series or Class), reissue for such
consideration and on such terms as they may determine, or cancel any Shares of
any Series or Class reacquired by the Trust at their discretion from time to
time.
(ii)All consideration received by the Trust for the issue or sale of
Shares of a particular Series, together with all assets in which such
consideration is invested or reinvested, all income, earnings, profits, and
proceeds thereof, including any proceeds derived from the sale, exchange or
liquidation of such assets, and any funds or payments derived from any
reinvestment of such proceeds in whatever form the same may be, shall
irrevocably belong to that Series for all purposes, subject only to the rights
of creditors of such Series and except as may otherwise be required by
applicable tax laws, and shall be so recorded upon the books of account of the
Trust. In the event that there are any assets, income, earnings, profits, and
proceeds thereof, funds, or payments which are not readily identifiable as
belonging to any particular Series, the Trustees shall allocate them among any
one or more of the Series established and designated from time to time in such
manner and on such basis as they, in their sole discretion, deem fair and
equitable. Each such allocation by the Trustees shall be conclusive and binding
upon the Shareholders of all Series for all purposes. No holder of Shares of any
Series shall have any claim on or right to any assets allocated or belonging to
any other Series.
(iii)The assets belonging to each particular Series shall be charged with
the liabilities of the Trust in respect of that Series or the appropriate Class
or Classes thereof and all expenses, costs, charges and reserves attributable to
that Series or Class or Classes thereof, and any general liabilities, expenses,
costs, charges or reserves of the Trust which are not readily identifiable as
belonging to any particular Series shall be allocated and charged by the
Trustees to and among any one or more of the Series established and designated
from time to time in such manner and on such basis as the Trustees in their sole
discretion deem fair and equitable. Each allocation of liabilities, expenses,
costs, charges and reserves by the Trustees shall be conclusive and binding upon
the Shareholders of all Series and Classes for all purposes. The
<PAGE> 23
Trustees shall have full discretion, to the extent not inconsistent with the
1940 Act, to determine which items are capital; and each such determination and
allocation shall be conclusive and binding upon the Shareholders. The assets of
a particular Series of the Trust shall, under no circumstances, be charged with
liabilities attributable to any other Series or Class thereof of the Trust. All
persons extending credit to, or contracting with or having any claim against a
particular Series of the Trust shall look only to the assets of that particular
Series for payment of such credit, contract or claim.
(iv)The power of the Trustees to pay dividends and make distributions
shall be governed by Section 7.2 of this Declaration. Dividends and
distributions on Shares of a particular Series or Class may be paid with such
frequency as the Trustees may determine, which may be daily or otherwise,
pursuant to a standing resolution or resolutions adopted only once or with such
frequency as the Trustees may determine, to the holders of Shares of that Series
or Class, from such of the income and capital gains, accrued or realized, from
the assets belonging to that Series, as the Trustees may determine, after
providing for actual and accrued liabilities belonging to that Series or Class.
All dividends and distributions on Shares of a particular Series or Class shall
be distributed pro rata to the Shareholders of that Series or Class in
proportion to the number of Shares of that Series or Class held by such
Shareholders at the time of record established for the payment of such dividends
or distributions.
(v)Each Share of a Series of the Trust shall represent a beneficial
interest in the net assets of such Series. Each holder of Shares of a Series or
Class thereof shall be entitled to receive his pro rata share of distributions
of income and capital gains made with respect to such Series or Class net of
expenses. Upon redemption of his Shares or indemnification for liabilities
incurred by reason of his being or having been a Shareholder of a Series or
Class, such Shareholder shall be paid solely out of the funds and property of
such Series of the Trust. Upon liquidation or termination of a Series or Class
thereof of the Trust, Shareholders of such Series or Class thereof shall be
entitled to receive a pro rata share of the net assets of such Series. A
Shareholder of a particular Series of the Trust shall not be entitled to
participate in a derivative or class action on behalf of any other Series or the
Shareholders of any other Series of the Trust.
(vi)On each matter submitted to a vote of Shareholders, all Shares of all
Series and Classes shall vote as a single class; provided, however, that (1) as
to any matter with respect to which a separate vote of any Series or Class is
required by the 1940 Act or is required by attributes applicable to any Class or
is required by any Rule 12b-1 plan, such requirements as to a separate vote by
that Series or Class shall apply, (2) to the extent that a matter referred to in
(1) above, affects more than one Class or Series and the interests of each such
Class or Series in the matter are identical, then, subject to (3) below, the
Shares of all such affected Classes or Series shall vote as a single class; (3)
as to any matter which does not affect the interests of a particular Series or
Class, only the holders of Shares of the one or more affected Series or Classes
shall be entitled to vote; and (4) the provisions of the following sentence
shall apply. On any matter that pertains to any particular Class of a particular
Series or to any Class expenses with respect to any Series which matter may be
submitted to a vote of Shareholders, only Shares of the affected Class or that
Series, as the case may be, shall be entitled to vote
<PAGE> 24
except that: (i) to the extent said matter affects Shares of another Class or
Series, such other Shares shall also be entitled to vote, and in such case
Shares of the affected Class or Series, as the case may be, shall be voted in
the aggregate together with such other Shares; and (ii) to the extent that said
matter does not affect Shares of a particular Class of such Series, said Shares
shall not be entitled to vote (except where otherwise required by law or
permitted by the Trustees acting in their sole discretion) even though the
matter is submitted to a vote of the Shareholders of any other Class or Series.
(vii)Except as otherwise provided in this Article V, the Trustees shall
have the power to determine the designations, preferences, privileges, payment
obligations, limitations and rights, including voting and dividend rights, of
each Class and Series of Shares. Subject to compliance with the requirements of
the 1940 Act, the Trustees shall have the authority to provide that the holders
of Shares of any Series or Class shall have the right to convert or exchange
said Shares into Shares of one or more Series or Classes of Shares in accordance
with such requirements, conditions and procedures as may be established by the
Trustees.
(viii)The establishment and designation of any Series or Class of Shares
shall be effective upon the execution by a majority of the then Trustees of an
instrument setting forth such establishment and designation and the relative
rights and preferences of such Series or Class, or as otherwise provided in such
instrument. At any time that there are no Shares outstanding of any particular
Series or Class previously established and designated, the Trustees may by an
instrument executed by a majority of their number abolish that Series or Class
and the establishment and designation thereof. Each instrument referred to in
this section shall have the status of an amendment to this Declaration.
Section 5.12. Assent to Declaration of Trust. Every Shareholder, by
virtue of having become a Shareholder, shall be held to have expressly assented
and agreed to the terms hereof and to have become a party hereto.
ARTICLE VI
REDEMPTION AND REPURCHASE OF SHARES
Section 6.1. Redemption of Shares. (a) All Shares of the Trust shall be
redeemable, at the redemption price determined in the manner set out in this
Declaration. Redeemed or repurchased Shares may be resold by the Trust. The
Trust may require any Shareholder to pay a sales charge to the Trust, the
underwriter, or any other person designated by the Trustees upon redemption or
repurchase of Shares in such amount and upon such conditions as shall be
determined from time to time by the Trustees.
(b) The Trust shall redeem the Shares of the Trust or any Series or
Class thereof at the price determined as hereinafter set forth, upon the
appropriately verified written application of the record holder thereof (or upon
such other form of request as the Trustees may determine) at such office or
agency as may be designated from time to time for that purpose by the Trustees.
The Trustees may from time to time specify additional conditions, not
inconsistent with the 1940 Act, regarding the redemption of Shares in the
Trust's then effective Prospectus.
<PAGE> 25
Section 6.2. Price. Shares shall be redeemed at a price based on their
net asset value determined as set forth in Section 7.1 hereof as of such time as
the Trustees shall have theretofore prescribed by resolution. In the absence of
such resolution, the redemption price of Shares deposited shall be based on the
net asset value of such Shares next determined as set forth in Section 7.1
hereof after receipt of such application. The amount of any contingent deferred
sales charge or redemption fee payable upon redemption of Shares may be deducted
from the proceeds of such redemption.
Section 6.3. Payment. Payment of the redemption price of Shares of the
Trust or any Series or Class thereof shall be made in cash or in property to the
Shareholder at such time and in the manner, not inconsistent with the 1940 Act
or other applicable laws, as may be specified from time to time in the Trust's
then effective Prospectus, subject to the provisions of Section 6.4 hereof.
Notwithstanding the foregoing, the Trustees may withhold from such redemption
proceeds any amount arising (i) from a liability of the redeeming Shareholder to
the Trust or (ii) in connection with any federal or state tax withholding
requirements.
Section 6.4. Effect of Suspension of Determination of Net Asset Value.
If, pursuant to Section 6.8 hereof, the Trustees shall declare a suspension of
the determination of net asset value with respect to Shares of the Trust or of
any Series or Class thereof, the rights of Shareholders (including those who
shall have applied for redemption pursuant to Section 6.1 hereof but who shall
not yet have received payment) to have Shares redeemed and paid for by the Trust
or a Series or Class thereof shall be suspended until the termination of such
suspension is declared. Any record holder who shall have his redemption right so
suspended may, during the period of such suspension, by appropriate written
notice of revocation at the office or agency where application was made, revoke
any application for redemption not honored and withdraw any Share certificates
on deposit. The redemption price of Shares for which redemption applications
have not been revoked shall be based on the net asset value of such Shares next
determined as set forth in Section 7.1 after the termination of such suspension,
and payment shall be made within seven (7) days after the date upon which the
application was made plus the period after such application during which the
determination of net asset value was suspended.
Section 6.5. Repurchase by Agreement. The Trust may repurchase Shares
directly, or through the Distributor or another agent designated for the
purpose, by agreement with the owner thereof at a price not exceeding the net
asset value per share determined as of the time when the purchase or contract of
purchase is made or the net asset value as of any time which may be later
determined pursuant to Section 7.1 hereof, provided payment is not made for the
Shares prior to the time as of which such net asset value is determined.
Section 6.6. Redemption of Shareholder's Interest. The Trustees, in
their sole discretion, may cause the Trust to redeem all of the Shares of one or
more Series or Classes thereof held by any Shareholder if the value of such
Shares is less than the minimum amount established from time to time by the
Trustees.
<PAGE> 26
Section 6.7. Reductions in Number of Outstanding Shares Pursuant to Net
Asset Value Formula. The Trust may also reduce the number of Outstanding Shares
of the Trust or of any Series of the Trust pursuant to the provisions of Section
7.3.
Section 6.8. Suspension of Right of Redemption. The Trust may declare a
suspension of the right of redemption or postpone the date of payment or
redemption for the whole or any part of any period (i) during which the New York
Stock Exchange is closed other than customary weekend and holiday closings, (ii)
during which trading on the New York Stock Exchange is restricted, (iii) during
which an emergency exists as a result of which disposal by the Trust or a Series
thereof of securities owned by it is not reasonably practicable or it is not
reasonably practicable for the Trust or a Series thereof fairly to determine the
value of its net assets, or (iv) during any other period when the Commission may
for the protection of Shareholders of the Trust by order permit suspension of
the right of redemption or postponement of the date of payment or redemption;
provided, that applicable rules and regulations of the Commission shall govern
as to whether the conditions prescribed in (ii), (iii), or (iv) exist. Such
suspension shall take effect at such time as the Trust shall specify but not
later than the close of business on the business day next following the
declaration of suspension, and thereafter there shall be no right of redemption
or payment on redemption until the Trust shall declare the suspension at an end,
except that the suspension shall terminate in any event on the first day on
which said stock exchange shall have reopened or the period specified in (ii) or
(iii) shall have expired (as to which in the absence of an official ruling by
the Commission, the determination of the Trustees shall be conclusive). In the
case of a suspension of the right of redemption, a Shareholder may either
withdraw his request for redemption or receive payment based on the net asset
value existing after the termination of the suspension as described in Section
6.4 hereof.
ARTICLE VII
DETERMINATION OF NET ASSET VALUE,
NET INCOME AND DISTRIBUTIONS
Section 7.1. Net Asset Value. The net asset value of each Outstanding
Share of the Trust or of each Series or Class thereof shall be determined on
such days and at such time or times as the Trustees may determine. The value of
the assets of the Trust or any Series thereof may be determined (i) by a pricing
service which utilizes electronic pricing techniques based on general
institutional trading, (ii) by appraisal of the securities owned by the Trust or
any Series thereof, (iii) in certain cases, at amortized cost, or (iv) by such
other method as shall be deemed to reflect the fair value thereof, determined in
good faith by or under the direction of the Trustees. From the total value of
said assets, there shall be deducted all indebtedness, interest, taxes, payable
or accrued, including estimated taxes on unrealized book profits, expenses and
management charges accrued to the appraisal date, net income determined and
declared as a distribution and all other items in the nature of liabilities
which shall be deemed appropriate, as incurred by or allocated to the Trust or
any Series or Class of the Trust. The resulting amount which shall represent the
total net assets of the Trust or Series or Class thereof shall be divided by the
number of Shares of the Trust or Series or Class thereof outstanding at the time
and the quotient so obtained shall be deemed to be the net asset value of the
Shares of the Trust or Series or Class thereof. The net asset value of the
Shares
<PAGE> 27
shall be determined at least once on each business day, as of the close of
regular trading on the New York Stock Exchange or as of such other time or times
as the Trustees shall determine. The power and duty to make the daily
calculations may be delegated by the Trustees to the Investment Adviser, the
Administrator, the Custodian, the Transfer Agent or such other Person as the
Trustees by resolution may determine. The Trustees may suspend the daily
determination of net asset value to the extent permitted by the 1940 Act. It
shall not be a violation of any provision of this Declaration if Shares are
sold, redeemed or repurchased by the Trust at a price other than one based on
net asset value if the net asset value is affected by one or more errors
inadvertently made in the pricing of portfolio securities or in accruing income,
expenses or liabilities.
Section 7.2. Distributions to Shareholders. (a) The Trustees shall from
time to time distribute ratably among the Shareholders of the Trust or of a
Series or Class thereof such proportion of the net profits, surplus (including
paid-in surplus), capital, or assets of the Trust or of such Series or Class as
they may deem proper. Such distributions may be made in cash or property
(including without limitation any type of obligations or assets of the Trust or
Series or Class thereof), and the Trustees may distribute ratably among the
Shareholders of the Trust or Series or Class thereof additional Shares of the
Trust or Series or Class thereof issuable hereunder in such manner, at such
times, and on such terms as the Trustees may deem proper. Such distributions may
be among the Shareholders of the Trust or Series or Class thereof at the time of
declaring a distribution or among the Shareholders of the Trust or Series or
Class thereof at such other date or time or dates or times as the Trustees shall
determine. The Trustees may in their discretion determine that, solely for the
purposes of such distributions, Outstanding Shares shall exclude Shares for
which orders have been placed subsequent to a specified time on the date the
distribution is declared or on the next preceding day if the distribution is
declared as of a day on which Boston banks are not open for business, all as
described in the Trust's then effective Prospectus. The Trustees may always
retain from the net profits such amount as they may deem necessary to pay the
debts or expenses of the Trust or a Series or Class thereof or to meet
obligations of the Trust or a Series or Class thereof, or as they may deem
desirable to use in the conduct of its affairs or to retain for future
requirements or extensions of the business. The Trustees may adopt and offer to
Shareholders such dividend reinvestment plans, cash dividend payout plans or
related plans as the Trustees shall deem appropriate. The Trustees may in their
discretion determine that an account administration fee or other similar charge
may be deducted directly from the income or other distributions paid on Shares
to a Shareholder's account in each Series or Class.
(b) Inasmuch as the computation of net income and gains for federal
income tax purposes may vary from the computation thereof on the books, the
above provisions shall be interpreted to give the Trustees the power in their
discretion to distribute for any fiscal year as ordinary dividends and as
capital gain distributions, respectively, additional amounts sufficient to
enable the Trust or a Series or Class thereof to avoid or reduce liability for
taxes.
Section 7.3. Determination of Net Income; Constant Net Asset Value;
Reduction of Outstanding Shares. Subject to Section 5.11 hereof, the net income
of the Series and Classes thereof of the Trust shall be determined in such
manner as the Trustees shall provide by
<PAGE> 28
resolution. Expenses of the Trust or of a Series or Class thereof, including the
advisory or management fee, shall be accrued each day. Each Class shall bear
only expenses relating to its Shares and an allocable share of Series expenses
in accordance with such policies as may be established by the Trustees from time
to time and as are not inconsistent with the provisions of this Declaration or
of any applicable document filed by the Trust with the Commission or of the
Internal Revenue Code of 1986, as amended. Such net income may be determined by
or under the direction of the Trustees as of the close of trading on the New
York Stock Exchange on each day on which such market is open or as of such other
time or times as the Trustees shall determine, and, except as provided herein,
all the net income of any Series or Class of the Trust, as so determined, may be
declared as a dividend on the Outstanding Shares of such Series or Class. If,
for any reason, the net income of any Series or Class of the Trust determined at
any time is a negative amount, the Trustees shall have the power with respect to
such Series or Class (i) to offset each Shareholder's pro rata share of such
negative amount from the accrued dividend account of such Shareholder, or (ii)
to reduce the number of Outstanding Shares of such Series or Class by reducing
the number of Shares in the account of such Shareholder by that number of full
and fractional Shares which represents the amount of such excess negative net
income, or (iii) to cause to be recorded on the books of the Trust an asset
account in the amount of such negative net income, which account may be reduced
by the amount, provided that the same shall thereupon become the property of the
Trust with respect to such Series or Class and shall not be paid to any
Shareholder, of dividends declared thereafter upon the Outstanding Shares of
such Series or Class on the day such negative net income is experienced, until
such asset account is reduced to zero. The Trustees shall have full discretion
to determine whether any cash or property received shall be treated as income or
as principal and whether any item of expense shall be charged to the income or
the principal account, and their determination made in good faith shall be
conclusive upon the Shareholders. In the case of stock dividends received, the
Trustees shall have full discretion to determine, in the light of the particular
circumstances, how much if any of the value thereof shall be treated as income,
the balance, if any, to be treated as principal.
Section 7.4. Power to Modify Foregoing Procedures. Notwithstanding any
of the foregoing provisions of this Article VII, but subject to Section 5.11
hereof, the Trustees may prescribe, in their absolute discretion, such other
bases and times for determining the per Share net asset value of the Shares of
the Trust or a Series or Class thereof or net income of the Trust or a Series or
Class thereof, or the declaration and payment of dividends and distributions as
they may deem necessary or desirable. Without limiting the generality of the
foregoing, the Trustees may establish several Series or Classes of Shares in
accordance with Section 5.11, and declare dividends thereon in accordance with
Section 5.11(c)(iv).
ARTICLE VIII
DURATION; TERMINATION OF TRUST OR A SERIES OR CLASS;
AMENDMENT; MERGERS, ETC.
Section 8.1. Duration. The Trust shall continue without limitation of
time but subject to the provisions of this Article VIII.
<PAGE> 29
Section 8.2. Termination of the Trust or a Series or a Class. The Trust
or any Series or Class thereof may be terminated by (i) the affirmative vote of
the holders of not less than two-thirds of the Shares outstanding and entitled
to vote and present in person or by proxy at any meeting of Shareholders of the
Trust or the appropriate Series or Class thereof, (ii) by an instrument or
instruments in writing without a meeting, consented to by the holders of
two-thirds of the Shares of the Trust or a Series or Class thereof; provided,
however, that, if such termination is recommended by the Trustees, the vote or
written consent of the holders of a majority of the Shares of the Trust or a
Series or Class thereof outstanding and entitled to vote shall be sufficient
authorization, or (iii) notice to Shareholders of the Trust or a Series or a
Class thereof by means of an instrument in writing signed by a majority of the
Trustees, stating that a majority of the Trustees has determined that the
continuation of the Trust or a Series or a Class thereof is not in the best
interest of such Series or such Class, the Trust or their respective
shareholders as a result of such factors or events adversely affecting the
ability of such Series or such Class or the Trust to conduct its business and
operations in an economically viable manner. Such factors and events may include
(but are not limited to) the inability of a Series or Class or the Trust to
maintain its assets at an appropriate size, changes in laws or regulations
governing the Series or Class or the Trust or affecting assets of the type in
which such Series or Class or the Trust invests or economic developments or
trends having a significant adverse impact on the business or operations of such
Series or Class or the Trust. Upon the termination of the Trust or of a Series
or Class:
(i)The Trust, Series or Class shall carry on no business except for the
purpose of winding up its affairs;
(ii)The Trustees shall proceed to wind up the affairs of the Trust, Series
or Class and all of the powers of the Trustees under this Declaration shall
continue until the affairs of the Trust, Series or Class shall have been wound
up, including the power to fulfill or discharge the contracts of the Trust,
Series or Class, collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Property or Trust
Property allocated or belonging to such Series or Class to one or more persons
at public or private sale for consideration which may consist in whole or in
part of cash, securities or other property of any kind, discharge or pay its
liabilities, and do all other acts appropriate to liquidate its business;
provided, that any sale, conveyance, assignment, exchange, transfer or other
disposition of all or substantially all the Trust Property or Trust Property
allocated or belonging to such Series or Class that requires Shareholder
approval in accordance with Section 8.4 hereof shall receive the approval so
required; and
(iii)After paying or adequately providing for the payment of all
liabilities, and upon receipt of such releases, indemnities and refunding
agreements as they deem necessary for their protection, the Trustees may
distribute the remaining Trust Property or the remaining property of the
terminated Series or Class, in cash or in kind or partly each, among the
Shareholders of the Trust or the Series or Class according to their respective
rights.
(b) After termination of the Trust, Series or Class and distribution to
the Shareholders as herein provided, a majority of the Trustees shall execute
and lodge among the
<PAGE> 30
records of the Trust and file with the Office of the Secretary of The
Commonwealth of Massachusetts an instrument in writing setting forth the fact of
such termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties with respect to the Trust or the terminated
Series or Class, and the rights and interests of all Shareholders of the Trust
or of the terminated Series or Class shall thereupon cease.
Section 8.3. Amendment Procedure. (a) This Declaration may be amended
by a vote of a majority of Trustees, without approval of the Shareholders,
except that no amendment can be made by the Trustees to impair any voting or
other rights of shareholders prescribed by federal or state law. Nothing
contained in this Declaration shall permit the amendment of this Declaration to
impair the exemption from personal liability of the Shareholders, Trustees,
officers, employees and agents of the Trust or to permit assessments upon
Shareholders.
(b) A certificate signed by a majority of the Trustees setting forth an
amendment and reciting that it was duly adopted by the Trustees or by the
Shareholders as aforesaid or a copy of the Declaration, as amended, and executed
by a majority of the Trustees, shall be conclusive evidence of such amendment
when lodged among the records of the Trust.
Section 8.4. Merger, Consolidation and Sale of Assets. The Trust or any
Series thereof may merge into or consolidate with any other corporation,
association, trust or other organization or may sell, lease or exchange all or
substantially all of the Trust Property or Trust Property allocated or belonging
to such Series, including its good will, upon such terms and conditions and for
such consideration when and as authorized at any meeting of Shareholders called
for the purpose by the affirmative vote of the holders of two-thirds of the
Shares of the Trust or such Series outstanding and entitled to vote, or by an
instrument or instruments in writing without a meeting, consented to by the
holders of two-thirds of the Shares of the Trust or such Series; provided,
however, that, if such merger, consolidation, sale, lease or exchange is
recommended by the Trustees, the vote or written consent of the holders of a
majority of the Shares of the Trust or such Series outstanding and entitled to
vote shall be sufficient authorization; and any such merger, consolidation,
sale, lease or exchange shall be deemed for all purposes to have been
accomplished under and pursuant to Massachusetts law.
Section 8.5. Incorporation. The Trustees may cause to be organized or
assist in organizing a corporation or corporations under the laws of any
jurisdiction or any other trust, partnership, association or other organization
to take over all or any portion of the Trust Property or of the Trust Property
allocated or belonging to a Series of the Trust or to carry on any business in
which the Trust shall directly or indirectly have any interest, and to sell,
convey and transfer all or any portion of the Trust Property or of the Trust
Property allocated or belonging to such Series to any such corporation, trust,
association or organization in exchange for the shares or securities thereof or
otherwise, and to lend money to, subscribe for the shares or securities of, and
enter into any contracts with any such corporation, trust, partnership,
association or organization, or any corporation, partnership, trust, association
or organization in which the Trust or such Series holds or is about to acquire
shares or any other interest. The Trustees may also cause a merger or
consolidation between the Trust or any successor thereto and any such
corporation, trust, partnership, association or other organization if and to the
extent permitted by law, as provided under the law then in effect. Nothing
contained herein shall be construed as requiring approval of Shareholders for
the
<PAGE> 31
Trustees to organize or assist in organizing one or more corporations, trusts,
partnerships, associations or other organizations and selling, conveying or
transferring all or a portion of the Trust Property to such organization or
entities.
ARTICLE IX
REPORTS TO SHAREHOLDERS
The Trustees shall at least semi-annually submit to the Shareholders of
each Series a written financial report of the transactions of the Trust,
including financial statements which shall at least annually be certified by
independent public accountants.
ARTICLE X
MISCELLANEOUS
Section 10.1. Execution and Filing. This Declaration and any amendment
hereto shall be filed in the office of the Secretary of State of The
Commonwealth of Massachusetts and in such other places as may be required under
the laws of Massachusetts and may also be filed or recorded in such other places
as the Trustees deem appropriate. Each amendment so filed shall be accompanied
by a certificate signed and acknowledged by a Trustee stating that such action
was duly taken in a manner provided herein, and unless such amendment or such
certificate sets forth some later time for the effectiveness of such amendment,
such amendment shall be effective upon its execution. A restated Declaration,
integrating into a single instrument all of the provisions of the Declaration
which are then in effect and operative, may be executed from time to time by a
majority of the Trustees and filed with the Secretary of State of The
Commonwealth of Massachusetts. A restated Declaration shall, upon execution, be
conclusive evidence of all amendments contained therein and may hereafter be
referred to in lieu of the original Declaration and the various amendments
thereto.
Section 10.2. Governing Law. This Declaration is executed by the
Trustees and delivered in The Commonwealth of Massachusetts and with reference
to the laws thereof, and the rights of all parties and the validity and
construction of every provision hereof shall be subject to and construed
according to the laws of said Commonwealth.
Section 10.3. Counterparts. This Declaration may be simultaneously
executed in several counterparts, each of which shall be deemed to be an
original, and such counterparts, together, shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
Section 10.4. Reliance by Third Parties. Any certificate executed by an
individual who, according to the records of the Trust appears to be a Trustee
hereunder, certifying (a) the number or identity of Trustees or Shareholders,
(b) the due authorization of the execution of
<PAGE> 32
any instrument or writing, (c) the form of any vote passed at a meeting of
Trustees or Shareholders, (d) the fact that the number of Trustees or
Shareholders present at any meeting or executing any written instrument
satisfies the requirements of this Declaration, (e) the form of any By-laws
adopted by or the identity of any officers elected by the Trustees, or (f) the
existence of any fact or facts which in any manner relate to the affairs of the
Trust, shall be conclusive evidence as to the matters so certified in favor of
any Person dealing with the Trustees and their successors.
Section 10.5. Provisions in Conflict with Law or Regulations. (a) The
provisions of this Declaration are severable, and if the Trustees shall
determine, with the advice of counsel, that any of such provisions is in
conflict with the 1940 Act, the regulated investment company provisions of the
Internal Revenue Code of 1986, as amended, or with other applicable laws and
regulations, the conflicting provision shall be deemed never to have constituted
a part of this Declaration; provided, however, that such determination shall not
affect any of the remaining provisions of this Declaration or render invalid or
improper any action taken or omitted prior to such determination.
(b) If any provision of this Declaration shall be held invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall
attach only to such provision in such jurisdiction and shall not in any manner
affect such provisions in any other jurisdiction or any other provision of this
Declaration in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have executed this instrument as of
the date first shown above.
/s/Edward J. Boudreau, Jr.
--------------------------
as Trustee and not individually
34 Swan Road
Winchester, Massachusetts 01890
<PAGE> 33
/s/Dennis S. Aronowitz
----------------------
as Trustee and not individually
29 Lee Road
Chestnut Hill, Massachusetts 02167
/s/Richard P. Chapman, Jr.
--------------------------
as Trustee and not individually
107 Upland Road
Brookline, Massachusetts 02146
/s/Francis C. Cleary, Jr.
-------------------------
as Trustee and not individually
58 Avalon Road
Needham, Massachusetts 02192
/s/William J. Cosgrove
----------------------
as Trustee and not individually
20 Buttonwood Place
Saddle River, New Jersey 07458
/s/Bayard Henry
---------------
as Trustee and not individually
65 Goddard Avenue
Brookline, Massachusetts 02146
/s/Richard S. Scipione
----------------------
as Trustee and not individually
4 Sentinel Road
Hingham, Massachusetts 02043
/s/Edward J. Spellman
---------------------
as Trustee and not individually
259C Commercial Boulevard, Suite 200
Lauderdale By the Sea, Florida 33308
<PAGE> 34
THE COMMONWEALTH OF MASSACHUSETTS
SUFFOLK COUNTY, MASSACHUSETTS Febuary 8, 1994
Then personally appeared the above-named persons, Edward J. Boudreau,
Jr., Dennis S. Aronowitz, Richard P. Chapman, Jr., Francis C. Cleary, Jr.,
William J. Cosgrove, Bayard Henry, Richard S. Scipione and Edward J. Spellman,
who acknowledged the foregoing instrument to be their free act and deed.
Before me,
/s/Ann Marie Kalapinski
-----------------------
Notary Public
My commission expires:
10-20-00
<PAGE> 1
EXHIBIT 1a
JOHN HANCOCK WORLD FUND
Establishment and Designation
of
Class A Shares, Class B Shares and Class C Shares
of Beneficial Interest of
John Hancock Freedom Pacific Basin Equities Fund
and
Class A Shares and Class B Shares
of Beneficial Interest of
John Hancock Freedom Global Rx Fund
The undersigned, being a majority of the Trustees of John Hancock World
Fund, a Massachusetts business trust (the "Trust"), acting pursuant to Sections
5.1 and 5.11 of the Amended and Restated Declaration of Trust dated February 8,
1994 of the Trust, as amended from time to time (the "Declaration"), do hereby
divide the shares of beneficial interest (the "Shares") of each of John Hancock
Freedom Pacific Basin Equities Fund ("Pacific Basin Fund") and John Hancock
Freedom Global Rx Fund ("Global Rx Fund") (each, a "Fund," collectively, the
"Funds"), to create multiple classes of Shares of each Fund as follows:
1. The classes of Shares of Pacific Basin Fund established and
designated hereby are "Class A Shares," "Class B Shares," and "Class C Shares,"
respectively.
The classes of Shares of Global Rx Fund established and designated
hereby are "Class A Shares" and "Class B Shares," respectively.
2. Each Class of Shares of each Fund shall each be entitled to all of
the rights and preferences accorded to Shares under the Declaration.
3. The purchase price of each Class of Shares of each Fund, the method
of determining the net asset value of each Class of Shares of each Fund, and the
relative dividend rights of holders of each Class of Shares of each Fund shall
be established by the Trustees of the Trust in accordance with the provisions of
the Declaration and shall be set forth in the Trust's Registration Statement on
Form N- 1A under the Securities Act of 1933 and/or the Investment Company Act of
1940, as amended and as in effect at the time of issuing such Shares.
4. All Shares of each Fund issued prior to the filing of this
instrument with the Secretary of State of The Commonwealth of Massachusetts
shall be deemed Class A Shares of such Fund, and the Trustees, acting in their
sole discretion, may determine that any Shares of each Fund issued after such
time are Class A Shares, Class B Shares, or, in the case of Pacific Basin Fund,
Class C Shares, or are Shares of any other class of such Fund hereafter
established and designated by the Trustees.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned have executed this instrument this
8th day of February, 1994.
/s/Edward J. Boudreau, Jr. /s/William S. Cosgrove
- -------------------------- ----------------------
Edward J. Boudreau. Jr. William S. Cosgrove
as Trustee and not individually as Trustee and not individually
34 Swan Road 20 Buttonwood Place
Winchester, MA 01890 Saddle River, NJ 07458
/s/Dennis S. Aronowitz /s/Bayard Henry
- ---------------------- ---------------
Dennis S. Aronowitz Bayard Henry
as Trustee and not individually as Trustee and not individually
29 Lee Road 65 Goddard Avenue
Chestnut Hill, MA 02167 Brookline, MA 02146
/s/Richard P. Chapman, Jr. /s/Richard S. Scipione
- -------------------------- ----------------------
Richard P. Chapman, Jr. Richard S. Scipione
as Trustee and not individually as Trustee and not individually
107 Upland Road 4 Sentinel Road
Brookline, MA 02146 Hingham, MA 02043
/s/Francis C. Cleary, Jr. /s/Edward J. Spellman
- ------------------------- ---------------------
Francis C. Cleary Edward J. Spellman
as Trustee and not individually as Trustee and not individually
58 Avalon Road 259 C Commercial Blvd.
Needham, MA 02192 Lauderdale By the Sea, FL 33308
The Declaration, a copy of which, together with all amendments thereto,
is on file in the office of the Secretary of State of the Commonwealth of
Massachusetts provides that no Trustee, officer, employee or agent of the Trust
or any Series thereof shall be subject to any personal liability whatsoever to
any Person, other than to the Trust or its shareholders, in connection with
Trust Property or the affairs of the Trust, save only that arising from bad
faith, willful misfeasance, gross negligence, or reckless disregard of his
duties with respect to such Person; and all such Persons shall look solely to
the Trust Property, or to the Trust Property of one or more specific Series of
the Trust if the claim arises from the conduct of such Trustee, officer,
employee
<PAGE> 3
or agent with respect to only such Series, for satisfaction of claims of any
nature arising in connection with the affairs of the Trust.
<PAGE> 1
EXHIBIT 1b
JOHN HANCOCK WORLD FUND
Establishment and Designation
of
Class A Shares and Class B Shares
of Beneficial Interest of
John Hancock Global Retail Fund
The undersigned, being a majority of the Trustees of John Hancock World
Fund, a Massachusetts business trust (the "Trust"), acting pursuant to Sections
5.1 and 5.11 of the Amended and Restated Declaration of Trust dated February 8,
1994 of the Trust, as amended from time to time (the "Declaration"), do hereby
divide the shares of beneficial interest (the "Shares") of John Hancock Global
Retail Fund ("Global Retail Fund") to create multiple classes of Shares of the
Fund as follows:
1. The classes of Shares of Global Retail Fund established and
designated hereby are "Class A Shares" and "Class B Shares,"
respectively.
2. Each Class of Shares of the Fund shall each be entitled to all of
the rights and preferences accorded to Shares under the Declaration.
3. The purchase price of each Class of Shares of the Fund, the method
of determining the net asset value of each Class of Shares of the
Fund, and the relative dividend rights of holders of each Class of
Shares of the Fund shall be established by the Trustees of the Trust
in accordance with the provisions of the Declaration and shall be
set forth in the Trust's Registration Statement on Form N-1A under
the Securities Act of 1933 and/or the Investment Company Act of
1940, as amended and as in effect at the time of issuing such
Shares.
IN WITNESS WHEREOF, the undersigned have executed this instrument this
27th day of September, 1994.
/s/Edward J. Boudreau, Jr. /s/William S. Cosgrove
- -------------------------- ----------------------
Edward J. Boudreau. Jr. William S. Cosgrove
as Trustee and not individually as Trustee and not individually
34 Swan Road 20 Buttonwood Place
Winchester, MA 01890 Saddle River, NJ 07458
<PAGE> 2
/s/Dennis S. Aronowitz /s/Bayard Henry
- ---------------------- ---------------
Dennis S. Aronowitz Bayard Henry
as Trustee and not individually as Trustee and not individually
29 Lee Road 65 Goddard Avenue
Chestnut Hill, MA 02167 Brookline, MA 02146
/s/Richard P. Chapman, Jr. /s/Richard S. Scipione
- -------------------------- ----------------------
Richard P. Chapman, Jr. Richard S. Scipione
as Trustee and not individually as Trustee and not individually
107 Upland Road 4 Sentinel Road
Brookline, MA 02146 Hingham, MA 02043
- ------------------------------- /s/Edward J. Spellman
Francis C. Cleary ---------------------
as Trustee and not individually Edward J. Spellman
58 Avalon Road as Trustee and not individually
Needham, MA 02192 259 C Commercial Blvd.
Lauderdale By the Sea, FL 33308
/s/Gail D. Fosler
- -----------------
Gail D. Fosler
as Trustee and not individually
845 3rd Avenue
New York, NY 10022
The Declaration, a copy of which, together with all amendments thereto,
is on file in the office of the Secretary of State of the Commonwealth of
Massachusetts provides that no Trustee, officer, employee or agent of the Trust
or any Series thereof shall be subject to any personal liability whatsoever to
any Person, other than to the Trust or its shareholders, in connection with
Trust Property or the affairs of the Trust, save only that arising from bad
faith, willful misfeasance, gross negligence, or reckless disregard of his
duties with respect to such Person; and all such Persons shall look solely to
the Trust Property, or to the Trust Property of one or more specific Series of
the Trust if the claim arises from the conduct of such Trustee, officer,
employee or agent with respect to only such Series, for satisfaction of claims
of any nature arising in connection with the affairs of the Trust.
<PAGE> 1
Exhibit 1c
JOHN HANCOCK WORLD FUND
ABOLITION OF CLASS C SHARES
OF BENEFICIAL INTEREST OF
JOHN HANCOCK PACIFIC BASIN EQUITIES FUND (THE "FUND"),
A SERIES OF JOHN HANCOCK WORLD FUND
The undersigned, being a majority of the Trustees of John Hancock World
Fund, a Massachusetts business Trust (the "Trust"), acting pursuant to the
Amended and Restated Declaration of Trust dated February 8, 1994 of the Trust,
as amended from time to time (the "Declaration of Trust"), do hereby abolish the
class of shares of beneficial interest of the Fund previously established and
designated as "Class C Shares" and in connection therewith do hereby extinguish
any and all rights and preferences of such Class C Shares as set forth in the
Declaration of Trust and the Trust's Registration Statement on Form N-1A. The
abolition of the Class C shares of the Fund is effective as of May 1, 1995.
The Declaration of Trust is hereby amended to the extent necessary to
reflect the abolition of Class C Shares.
Capitalized terms not otherwise defined herein shall have the meaning
set forth in the Declaration of Trust.
<PAGE> 2
IN WITNESS WHEREOF, the undersigned have executed this instrument the
1st day of May, 1995.
/s/Edward J. Boudreau, Jr. /s/Dennis S. Aronowitz
- ---------------------------- ----------------------------
Edward J. Boudreau, Jr. Dennis S. Aronowitz
as Trustee, not individually as Trustee, not individually
34 Swan Road Boston University
Winchester, MA 01890 Boston, Massachusetts
/s/Richard P. Chapman, Jr. /s/Edward J. Spellman
- ---------------------------- ----------------------------
Richard P. Chapman, Jr. Edward J. Spellman
as Trustee, not individually as Trustee, not individually
160 Washington Street 259C Commercial Bld.
Brookline, Massachusetts Suite 200
Lauderdale by the Sea, FL
/s/William J. Cosgrove /s/Gail D. Fosler
- ---------------------------- ----------------------------
William J. Cosgrove Gail D. Fosler
as Trustee, not individually as Trustee, not individually
20 Buttonwood Place 4104 Woodbine Street
Saddle River, New Jersey Chevy Chase, MD
- ----------------------------------- -----------------------------------
Bayard Henry Richard S. Scipione
as Trustee, not individually as Trustee, not individually
121 High Street John Hancock Place
Boston, Massachusetts P.O. Box 111
Boston, Massachusetts
<PAGE> 3
The Declaration, a copy of which, together with all amendments thereto,
is on file in the office of the Secretary of State of The Commonwealth of
Massachusetts, provides that no Trustee, officer, employee or agent of the Trust
or any Series thereof shall be subject to any personal liability whatsoever to
any Person, other than to the Trust or its shareholders, in connection with
Trust Property or the affairs of the Trust, save only that arising from bad
faith, willful misfeasance, gross negligence or reckless disregard of his duties
with respect to such Person; and all such Persons shall look solely to the Trust
Property, or to the Trust Property of one or more specific Series of the trust
if the claim arises from the conduct of such Trustee, officer, employee or agent
with respect to only such Series, for satisfaction of claims of any nature
arising in connection with the affairs of the Trust.
<PAGE> 1
Exhibit 1d
JOHN HANCOCK WORLD FUND
Instrument Changing Names of Series of Shares of the Trust
The Trustees of John Hancock World Fund (the "Trust"), hereby amend the
Trust's Declaration of Trust, dated August 25, 1986 as amended and restated
February 8, 1994, to the extent necessary to reflect the change of the name of
the John Hancock Freedom Pacific Basin Equities Fund to John Hancock Pacific
Basin Equities Fund, and John Hancock Freedom Global Rx Fund to John Hancock
Global Rx Fund, effective January 2, 1995.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this
Instrument on the 27th day of September, 1994.
/s/Dennis S. Aronowitz ---------------------
- ---------------------- Gail D. Fosler
Dennis S. Aronowitz
/s/Edward J. Boudreau, Jr. /s/Bayard Henry
- -------------------------- ---------------
Edward J. Boudreau, Jr. Bayard Henry
/s/Richard P. Chapman, Jr. /s/Richard s. Scipione
- -------------------------- ----------------------
Richard P. Chapman, Jr. Richard S. Scipione
- -------------------------- /s/Edward J. Spellman
Francis C. Cleary, Jr. ---------------------
Edward J. Spellman
/s/William J. Cosgrove
- ----------------------
William J. Cosgrove
<PAGE> 1
Exhibit 1e
JOHN HANCOCK WORLD FUND
JOHN HANCOCK GLOBAL RETAIL FUND
Written Consent of Sole Shareholder
The undersigned, being the sole shareholder of John Hancock World Fund
- John Hancock Global Retail Fund (the "Fund"), a series portfolio of
John Hancock World Fund, a Massachusetts business trust, pursuant to
Section 5.13 of the Trust's Amended and Restated Declaration of Trust,
dated February 8, 1994.
1. Acknowledges that the Trustees of the Trust have deemed the adoption
of an Investment Management Contract, dated September 28, 1994, between
the Trust, on behalf of the Fund, and John Hancock Advisers, Inc. to be
in the best interests of the Fund and its shareholders and hereby
approves and consents to the adoption of such Investment Management
Contract;
2. Acknowledges that the Trustees of the Trust have deemed the adoption
of a Distribution Agreement, dated as of August 1, 1991 between the
Trust, on behalf of the Fund, and John Hancock Broker Distribution
Services, Inc. to be in the best interests of the Fund and its
shareholders and hereby approves and consents to the adoption of such
Distribution Agreement;
3. Acknowledges that the Trustees of the Trust have deemed the adoption of
a Class A Distribution Plan, pursuant to Rule 12b-1 under the
Investment Company Act of 1940, as amended, for the Fund to be in the
best interests of the Fund and its Class A shareholders and hereby
approves and consents to the adoption of such Distribution Plans;
4. Acknowledges that the Trustees of the Trust have selected Price
Waterhouse to serve as the independent auditor for the Trust and hereby
ratifies the selection of Price Waterhouse;
5. Acknowledges that Edward J. Boudreau, Jr., Dennis S. Aronowitz.
Richard P. Chapman, Jr., William J. Cosgrove, Gail D. Fosler, Bayard
Henry, Edward J. Spellman, Francis C. Cleary, Jr. and Richard S.
Scipione have been appointed as Trustees of the Trust, and hereby
consents to the appointment of such Trustees.
WITNESS the signature of the undersigned as of the 28th day of September, 1994.
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By: /s/ C. Troy Shaver, Jr.
-----------------------
ATTEST: /s/Susan S. Newton
------------------
Susan S. Newton
Vice President
<PAGE> 1
Exhibit 1f
JOHN HANCOCK WORLD FUND
Instrument Changing Names of Series of Shares of the Trust
----------------------------------------------------------
The Trustees of John Hancock World Fund (the "Trust"), hereby amend the
Trust's Amended and Restated Declaration of Trust dated February 8, 1994, to
the extent necessary to reflect the change of the name of the John Hancock
Global Retail Fund to John Hancock Global Marketplace Fund, effective December
12, 1995.
IN WITNESS WHEREOF, the Trustees of the Trust have executed this
Instrument on the 11th day of December, 1995.
/s/Dennis S. Aronowitz /s/Gail D. Fosler
- ---------------------- -----------------
Dennis S. Aronowitz Gail D. Fosler
/s/Edward J. Boudreau, Jr. /s/Bayard Henry
- -------------------------- ---------------
Edward J. Boudreau, Jr. Bayard Henry
/s/Richard P. Chapman, Jr.
- -------------------------- ---------------------
Richard P. Chapman, Jr. Richard S. Scipione
/s/William J. Cosgrove /s/Edward J. Spellman
- ---------------------- ---------------------
William J. Cosgrove Edward J. Spellman
The Declaration of Trust, a copy which, together with all amendments
thereto, is on file in the office of the Secretary of State of The Commonwealth
of Massachusetts, provides that no Trustee, officer, employee or agent of the
trust or any Series thereof shall be subject to any personal liability
whatsoever to any Person, other than to the Trust or its shareholders, in
connection with Trust Property or the affairs of the Trust, save only that
arising from bad faith, willful misfeasance, gross negligence or reckless
disregard of his duties with respect to such Person; and all such Persons shall
look solely to the Trust Property, or to the Trust Property of one lor more
specific Series of the Trust if the claim arises from the conduct of such
Trustee, officer employee or agent with respect to only such Series, for
satisfaction of claims of any nature arising in connection with the affairs of
the Trust.
<PAGE> 2
COMMONWEALTH OF MASSACHUSETTS)
)ss
COUNTY OF SUFFOLK )
Then personally appeared the above-named Dennis S. Aronowitz, Edward J.
Boudreau, Jr., Richard P. Chapman, Jr., William J. Cosgrove, Gail D. Fosler,
Bayard Henry, and Edward J. Spellman, who each acknowledged the foregoing
instrument to be his or her free act and deed, before me, this 11th day of
December 1995.
Ann Marie Kalapinski
--------------------
Notary Public
My commission expires: 10/20/00
--------
<PAGE> 1
Exhibit 2
BY-LAWS
OF
JOHN HANCOCK WORLD FUND
As Adopted on February 8, 1994
-1-
<PAGE> 2
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I -- Definitions............................................................................. 1
ARTICLE II -- Offices and Seal........................................................................ 1
Section 2.1 Principal Office........................................................... 1
Section 2.2 Other Offices.............................................................. 1
Section 2.3 Seal....................................................................... 1
ARTICLE III -- Shareholders........................................................................... 2
Section 3.1 Meetings................................................................... 2
Section 3.2 Place of Meeting........................................................... 2
Section 3.3 Notice of Meetings......................................................... 2
Section 3.4 Shareholders Entitled to Vote.............................................. 2
Section 3.5 Quorum..................................................................... 3
Section 3.6 Treatment of Abstentions................................................... 3
Section 3.7 Voting of Shares Held in Street Name....................................... 3
Section 3.8 Adjournment................................................................ 3
Section 3.9 Proxies.................................................................... 3
Section 3.10 Inspection of Records...................................................... 4
Section 3.11 Record Dates............................................................... 4
ARTICLE IV -- Meetings of Trustees.................................................................... 4
Section 4.1 Regular Meetings........................................................... 4
Section 4.2 Special Meetings........................................................... 4
Section 4.3 Notice..................................................................... 4
Section 4.4 Waiver of Notice........................................................... 5
Section 4.5 Quorum, Adjournment and Voting............................................. 5
Section 4.6 Compensation............................................................... 5
ARTICLE V -- Executive Committee and Other
Committees............................................................................. 5
Section 5.1 How Constituted............................................................ 5
Section 5.2 Powers of the Executive
Committee................................................................ 6
Section 5.3 Other Committees of Trustees............................................... 6
Section 5.4 Proceedings, Quorum and Manner of
Acting................................................................... 6
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
Section 5.5 Other Committees........................................................... 6
ARTICLE VI -- Officers................................................................................ 6
Section 6.1 General.................................................................... 6
Section 6.2 Election, Term of Office and
Qualifications........................................................... 7
Section 6.3 Resignations and Removals.................................................. 7
Section 6.4 Vacancies and Newly Created
Offices.................................................................. 7
Section 6.5 Chairman of the Board...................................................... 7
Section 6.6 President.................................................................. 8
Section 6.7 Vice President............................................................. 8
Section 6.8 Chief Financial Officer, Treasurer
and Assistant Treasurers................................................. 8
Section 6.9 Secretary and Assistant
Secretaries.............................................................. 9
Section 6.10 Subordinate Officers....................................................... 9
Section 6.11 Remuneration............................................................... 9
Section 6.12 Surety Bonds............................................................... 9
ARTICLE VII -- Execution of Instruments; Voting of
Securities........................................................................... 10
Section 7.1 Execution of Instruments................................................... 10
Section 7.2 Voting of Securities....................................................... 10
ARTICLE VIII -- Fiscal Year, Accountants.............................................................. 10
Section 8.1 Fiscal Year................................................................ 10
Section 8.2 Accountants................................................................ 10
ARTICLE IX -- Amendments.............................................................................. 11
Section 9.1 General.................................................................... 11
</TABLE>
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<PAGE> 4
BY-LAWS
OF
JOHN HANCOCK WORLD FUND
ARTICLE I
Definitions
The terms "Class," "Commission," "Declaration," "Interested Person,"
"1940 Act," "Series," "Shareholder," "Shares," "Trust," "Trust Property" and
"Trustees" have the meanings given them in the Amended and Restated Declaration
of Trust of John Hancock World Fund dated ___________ __, 1994, as amended from
time to time.
ARTICLE II
Offices and Seal
Section 2.1. Principal Office. The principal office of the Trust shall
be located in the City of Boston, The Commonwealth of Massachusetts.
Section 2.2. Other Offices. The Trust may establish and maintain such
other offices and places of business within or without The Commonwealth of
Massachusetts as the Trustees may from time to time determine.
Section 2.3. Seal. The seal of the Trust shall be circular in form and
shall bear the name of the Trust, the year of its organization, and the words
"Common Seal" and "A Massachusetts Voluntary Association." The form of the seal
shall be subject to alteration by the Trustees and the seal may be used by
causing it or a facsimile to be impressed or affixed or printed or otherwise
reproduced. Any officer or Trustee of the Trust shall have authority to affix
the seal of the Trust to any document requiring the same but, unless otherwise
required by the Trustees, the seal shall not be necessary to be placed on, and
its absence shall not impair the validity of, any document, instrument or other
paper executed and delivered by or on behalf of the Trust.
ARTICLE III
Shareholders
Section 3.1. Meetings. A Shareholders' meeting for the election of
Trustees and the transaction of other proper business shall be held when
authorized or required by the Declaration.
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<PAGE> 5
Section 3.2. Place of Meeting. All Shareholders' meetings shall be held
at such place within or without The Commonwealth of Massachusetts as the
Trustees shall designate.
Section 3.3. Notice of Meetings. Notice of all Shareholders' meetings,
stating the time, place and purpose of the meeting, shall be given by the
Secretary or an Assistant Secretary of the Trust by mail to each Shareholder
entitled to notice of and to vote at such meeting at his address as recorded on
the register of the Trust. Such notice shall be mailed at least 10 days and not
more than 60 days before the meeting. Such notice shall be deemed to be given
when deposited in the United States mail, with postage thereon prepaid. Any
adjourned meeting may be held as adjourned without further notice. No notice
need be given (A) to any Shareholder if a written waiver of notice, executed
before or after the meeting by such Shareholder or his attorney thereunto duly
authorized, is filed with the records of the meeting, or (B) to any Shareholder
who attends the meeting without protesting prior thereto or at its commencement
the lack of notice to him. A waiver of notice need not specify the purposes of
the meeting.
Section 3.4. Shareholders Entitled to Vote. If, pursuant to Section
3.11 hereof, a record date has been fixed for the determination of Shareholders
entitled to notice of and to vote at any Shareholders' meeting, each Shareholder
of the Trust shall be entitled to vote, in accordance with the applicable
provisions of the Declaration, in person or by proxy, each Share or fraction
thereof standing in his name on the register of the Trust at the time of
determining net asset value on such record date. If the Declaration or the 1940
Act requires that Shares be voted by Series or Class, each Shareholder shall
only be entitled to vote, in person or by proxy, each Share or fraction thereof
of such Series or Class standing in his name on the register of the Trust at the
time of determining net asset value on such record date. If no record date has
been fixed for the determination of Shareholders so entitled, the record date
for the determination of Shareholders entitled to notice of and to vote at a
Shareholders' meeting shall be at the close of business on the day on which
notice of the meeting is mailed or, if notice is waived by all Shareholders, at
the close of business on the tenth day next preceding the day on which the
meeting is held.
Section 3.5. Quorum. The presence at any Shareholders' meeting in
person or by proxy, of Shareholders entitled to cast a majority of the votes
thereat shall be a quorum for the transaction of business.
Section 3.6. Treatment of Abstentions. Shares represented in person or
by proxy, including Shares which abstain or do not vote with respect to one or
more proposals presented for shareholder approval, will be counted for purposes
of determining whether a quorum is present. Abstentions will be treated as
Shares that are present and entitled to vote with respect to any particular
proposal, but will not be counted as a vote in favor of such proposal. An
abstention from voting on a proposal will have the same effect as a vote against
such proposal.
Section 3.7. Voting of Shares Held in Street Name. If a broker or
nominee holding Shares in "street name" indicates on a proxy that it does not
have discretionary authority to vote those Shares as to a particular proposal
presented for shareholder approval, those Shares
-5-
<PAGE> 6
will be considered to be outstanding, but will not be considered as present and
entitled to vote with respect to such proposal.
Section 3.8. Adjournment. The holders of a majority of the Shares
entitled to vote at the meeting and present thereat, in person or by proxy,
whether or not constituting a quorum, or, if no Shareholder entitled to vote is
present thereat, in person or by proxy, any Trustee or officer present thereat
entitled to preside or act as Secretary of such meeting, may adjourn the meeting
sine die or from time to time. Any business that might have been transacted at
the meeting originally called may be transacted at any such adjourned meeting at
which a quorum is present.
Section 3.9. Proxies. Shares may be voted in person or by proxy. When
any Share is held jointly by several persons, any one of them may vote at any
meeting, in person or by proxy in respect of such Share unless at or prior to
exercise of the vote the Trustees receive a specific written notice to the
contrary from any one of them. If more than one such joint owner shall be
present at such meeting, in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote cast, such vote shall not be received
in respect of such Share. A proxy purporting to be executed by or on behalf of a
Shareholder shall be deemed valid unless challenged at or prior to its exercise
and the burden of proving invalidity shall rest on the challenger.
Section 3.10. Inspection of Records. The records of the Trust shall be
open to inspection by Shareholders to the same extent as is permitted
shareholders of a Massachusetts business corporation.
Section 3.11. Record Dates. The Trustees may fix in advance a date as a
record date for the purpose of determining the Shareholders who are entitled to
notice of and to vote at any meeting or any adjournment thereof, or to express
consent in writing without a meeting to any action of the Trustees, or who shall
receive payment of any dividend or of any other distribution, or for the purpose
of any other lawful action, provided that such record date shall be not more
than 60 days before the date on which the particular action requiring such
determination of Shareholders is to be taken. In such case, subject to the
provisions of Section 3.4, each eligible Shareholder of record on such record
date shall be entitled to notice of, and to vote at, such meeting or
adjournment, or to express such consent, or to receive payment of such dividend
or distribution or to take such other action, as the case may be,
notwithstanding any transfer of Shares on the register of the Trust after the
record date.
ARTICLE IV
Meetings of Trustees
Section 4.1. Regular Meetings. The Trustees from time to time shall
provide by resolution for the holding of regular meetings for the election of
officers and the transaction of other proper business and shall fix the place
and time for such meetings to be held within or without The Commonwealth of
Massachusetts.
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<PAGE> 7
Section 4.2. Special Meetings. Special meetings of the Trustees shall
be held whenever called by the Chairman of the Board, the President (or, in the
absence or disability of the President, by any Vice President), the Treasurer,
the Secretary or two or more Trustees, at the time and place within or without
The Commonwealth of Massachusetts specified in the respective notices or waivers
of notice of such meetings.
Section 4.3. Notice. Notice of regular and special meetings, stating
the time and place, shall be (a) mailed to each Trustee at his residence or
regular place of business at least five days before the day on which the meeting
is to be held or (b) caused to be delivered to him personally or to be
transmitted to him by telegraph, cable or wireless at least two days before the
day on which the meeting is to be held. Unless otherwise required by law, such
notice need not include a statement of the business to be transacted at, or the
purpose of, the meeting. No notice of adjournment of a meeting of the Trustees
to another time or place need be given if such time and place are announced at
such meeting.
Section 4.4. Waiver of Notice. Notice of a meeting need not be given to
any Trustee if a written waiver of notice, executed by him before or after the
meeting, is filed with the records of the meeting, or to any Trustee who attends
the meeting without protesting prior thereto or at its commencement the lack of
notice to him. A waiver of notice need not specify the purposes of the meeting.
Section 4.5. Quorum, Adjournment and Voting. At all meetings of the
Trustees, the presence of a majority of the total number of Trustees authorized,
but not less than two, shall constitute a quorum for the transaction of
business. A majority of the Trustees present, whether or not constituting a
quorum, may adjourn the meeting, from time to time. The action of a majority of
the Trustees present at a meeting at which a quorum is present shall be the
action of the Trustees unless the concurrence of a greater proportion is
required for such action by law, by the Declaration or by these By-Laws.
Section 4.6. Compensation. Each Trustee may receive such remuneration
for his services as such as shall be fixed from time to time by resolution of
the Trustees.
ARTICLE V
Executive Committee and Other Committees
Section 5.1. How Constituted. The Trustees may, by resolution,
designate one or more committees, including an Executive Committee, an Audit
Committee and a Committee on Administration, each consisting of at least two
Trustees. The Trustees may, by resolution, designate one or more alternate
members of any committee to serve in the absence of any member or other
alternate member of such committee. Each member and alternate member of a
committee shall be a Trustee and shall hold office at the pleasure of the
Trustees. The Chairman of the Board and the President shall be members of the
Executive Committee.
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<PAGE> 8
Section 5.2. Powers of the Executive Committee. Unless otherwise
provided by resolution of the Trustees, the Executive Committee shall have and
may exercise all of the power and authority of the Trustees, provided that the
power and authority of the Executive Committee shall be subject to the
limitations contained in the Declaration.
Section 5.3. Other Committees of Trustees. To the extent provided by
resolution of the Trustees, other committees shall have and may exercise any of
the power and authority that may lawfully be granted to the Executive Committee.
Section 5.4. Proceedings, Quorum and Manner of Acting. In the absence
of appropriate resolution of the Trustees, each committee may adopt such rules
and regulations governing its proceedings, quorum and manner of acting as it
shall deem proper and desirable, provided that the quorum shall not be less than
two Trustees. In the absence of any member or alternate member of any such
committee, the members thereof present at any meeting, whether or not they
constitute a quorum, may appoint a Trustee to act in the place of such absent
member or alternate member. Members and alternate members of a committee may
participate in a meeting of such committee by means of a conference telephone or
similar communications equipment if all persons participating in the meeting can
hear each other at the same time. Participation in a meeting by these means
shall constitute presence in person at the meeting.
Section 5.5. Other Committees. The Trustees may appoint other
committees, each consisting of one or more persons who need not be Trustees.
Each such committee shall have such powers and perform such duties as may be
assigned to it from time to time by the Trustees, but shall not exercise any
power which may lawfully be exercised only by the Trustees or a committee
thereof.
ARTICLE VI
Officers
Section 6.1. General. The officers of the Trust shall be a Chairman of
the Board, a President, a Secretary, and a Treasurer, and may include one or
more Vice Presidents, one or more Assistant Secretaries, one or more Assistant
Treasurers, and such other officers as may be appointed in accordance with the
provisions of Section 6.10 of this Article VI.
Section 6.2. Election, Term of Office and Qualifications. The officers
of the Trust and any Series thereof (except those appointed pursuant to Section
6.10) shall be elected by the Trustees at their first meeting. If any officer or
officers are not elected at any such meeting, such officer or officers may be
elected at any subsequent regular or special meeting of the Trustees. Except as
provided in Sections 6.3 and 6.4 of this Article VI, each officer elected by the
Trustees shall hold office until his successor shall have been chosen and
qualified. No person shall hold more than one office of the Trust or any Series
thereof, except that the President may hold the office of Chairman of the Board
and any Treasurer, Assistant Treasurer, Secretary or Assistant Secretary of the
Trust may also hold the office of Vice President. The Chairman of the Board and
the
- -8-
<PAGE> 9
President shall be selected from among the Trustees and may hold such offices
only so long as they continue to be Trustees. Any Trustee or officer may be but
need not be a Shareholder of the Trust.
Section 6.3. Resignations and Removals. Any officer may resign his
office at any time by delivering a written resignation to the Trustees, the
President, the Secretary or any Assistant Secretary. Unless otherwise specified
therein, such resignation shall take effect upon delivery. Any officer may be
removed from office with or without cause by the vote of a majority of the
Trustees at any regular meeting or any special meeting. Except to the extent
expressly provided in a written agreement with the Trust, no officer resigning
and no officer removed shall have any right to any compensation for any period
following his resignation or removal or any right to damages on account of such
removal.
Section 6.4. Vacancies and Newly Created Offices. If any vacancy shall
occur in any office by reason of death, resignation, removal, disqualification
or other cause, or if any new office shall be created, such vacancies or newly
created offices may be filled by the Trustees at any regular or special meeting
or, in the case of any office created pursuant to Section 6.10 of this Article
VI, by any officer upon whom such power shall have been conferred by the
Trustees.
Section 6.5. Chairman of the Board. The Chairman of the Board shall be
the chief executive officer of the Trust and each Series thereof, shall preside
at all Shareholders' meetings and at all meetings of the Trustees and shall be
ex officio a member of all committees of the Trustees and each Series thereof,
except the Audit Committee. Subject to the supervision of the Trustees, he shall
have general charge of the business of the Trust and each Series thereof, the
Trust Property and the officers, employees and agents of the Trust and each
Series thereof. He shall have such other powers and perform such other duties as
may be assigned to him from time to time by the Trustees.
Section 6.6. President. The President shall be the chief operating
officer of the Trust and each Series thereof and, at the request of or in the
absence or disability of the Chairman of the Board, he shall preside at all
Shareholders' meetings and at all meetings of the Trustees and shall in general
exercise the powers and perform the duties of the Chairman of the Board. Subject
to the supervision of the Trustees and such direction and control as the
Chairman of the Board may exercise, he shall have general charge of the
operations of the Trust and each Series and Class thereof and its officers,
employees and agents. He shall exercise such other powers and perform such other
duties as from time to time may be assigned to him by the Trustees.
Section 6.7. Vice President. The Trustees may, from time to time,
designate and elect one or more Vice Presidents who shall have such powers and
perform such duties as from time to time may be assigned to them by the Trustees
or the President. At the request or in the absence or disability of the
President, the Vice President (or, if there are two or more Vice Presidents,
then the senior in length of time in office of the Vice Presidents present and
able to act) may perform all the duties of the President and, when so acting,
shall have all the powers of and be subject to all the restrictions upon the
President.
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<PAGE> 10
Section 6.8 Chief Financial Officer, Treasurer and Assistant
Treasurers. The Chief Financial Officer shall be the principal financial and
accounting officer of the Trust and each Series thereof and shall have general
charge of the finances and books of account of the Trust and each Series and
Class thereof. Except as otherwise provided by the Trustees, he shall have
general supervision of the funds and property of the Trust and each Series
thereof and of the performance by the Custodian, appointed pursuant to Section
3.6 of the Declaration of its duties with respect thereto. The Chief Financial
Officer shall render a statement of condition of the finances of the Trust and
each Series and Class thereof to the Trustees as often as they shall require the
same and he shall in general perform all the duties incident to the office of
the Chief Financial Officer and such other duties as from time to time may be
assigned to him by the Trustees.
The Treasurer or any Assistant Treasurer may perform such duties of the
Chief Financial Officer as the Chief Financial Officer or the Trustees may
assign. In the absence of the Chief Financial Officer, the Treasurer may perform
all duties of the Chief Financial Officer. In the absence of the Chief Financial
Officer and the Treasurer, any Assistant Treasurer may perform all duties of the
Chief Financial Officer.
Section 6.9. Secretary and Assistant Secretaries. The Secretary shall
attend to the giving and serving of all notices of the Trust and each Series and
Class thereof and shall record all proceedings of the meetings of the
Shareholders and Trustees in one or more books to be kept for that purpose. He
shall keep in safe custody the seal of the Trust, and shall have charge of the
records of the Trust and each Series and Class thereof, including the register
of shares and such other books and papers as the Trustees may direct and such
books, reports, certificates and other documents required by law to be kept, all
of which shall at all reasonable times be open to inspection by any Trustee. He
shall perform such other duties as appertain to his office or as may be required
by the Trustees.
Any Assistant Secretary may perform such duties of the Secretary as the
Secretary or the Trustees may assign, and, in the absence of the Secretary, he
may perform all the duties of the Secretary.
Section 6.10. Subordinate Officers. The Trustees from time to time may
appoint such other subordinate officers or agents as they may deem advisable,
each of whom shall have such title, hold office for such period, have such
authority and perform such duties as the Trustees may determine. The Trustees
from time to time may delegate to one or more officers or agents the power to
appoint any such subordinate officers or agents and to prescribe their
respective rights, terms of office, authorities and duties.
Section 6.11. Remuneration. The salaries or other compensation of the
officers of the Trust and any Series thereof shall be fixed from time to time by
resolution of the Trustees, except that the Trustees may by resolution delegate
to any person or group of persons the power to fix the salaries or other
compensation of any subordinate officers or agents appointed in accordance with
the provisions of Section 6.10 hereof.
Section 6.12. Surety Bonds. The Trustees may require any officer or
agent of the Trust or any Series thereof to execute a bond (including, without
limitation, any bond required by the 1940 Act and the rules and regulations of
the Commission) to the Trustees in such sum and with
- -10-
<PAGE> 11
such surety or sureties as the Trustees may determine, conditioned upon the
faithful performance of his duties to the Trust, including responsibility for
negligence and for the accounting of any of the Trust Property that may come
into his hands. In any such case, a new bond of like character shall be given at
least every six years, so that the date of the new bond shall not be more than
six years subsequent to the date of the bond immediately preceding.
ARTICLE VII
Execution of Instruments, Voting of Securities
Section 7.1. Execution of Instruments. All deeds, documents, transfers,
contracts, agreements, requisitions or orders, promissory notes, assignments,
endorsements, checks and drafts for the payment of money by the Trust or any
Series thereof, and other instruments requiring execution either in the name of
the Trust or the names of the Trustees or otherwise may be signed by the
Chairman, the President, a Vice President or the Secretary and by the Chief
Financial Officer, Treasurer or an Assistant Treasurer, or as the Trustees may
otherwise, from time to time, authorize, provided that instructions in
connection with the execution of portfolio securities actions may be signed by
one such officer. Any such authorization may be general or confined to specific
instances.
Section 7.2. Voting of Securities. Unless otherwise ordered by the
Trustees, the Chairman, the President or any Vice President shall have full
power and authority on behalf of the Trustees to attend and to act and to vote,
or in the name of the Trustees to execute proxies to vote, at any meeting of
stockholders of any company in which the Trust or any Series thereof may hold
stock. At any such meeting such officer shall possess and may exercise (in
person or by proxy) any and all rights, powers, and privileges incident to the
ownership of such stock. The Trustees may by resolution from time to time confer
like powers upon any other person or persons.
ARTICLE VIII
Fiscal Year; Accountants
Section 8.1. Fiscal Year. The fiscal year of the Trust and any Series
thereof shall be established by resolution of the Trustees.
Section 8.2. Accountants.
(a) The Trustees shall employ a public accountant or firm of
independent public accountants as their accountant to examine the accounts of
the Trust and to sign and certify at least annually financial statements filed
by the Trust. The accountant's certificates and reports shall be addressed both
to the Trustees and to the Shareholders.
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<PAGE> 12
(b) A majority of the Trustees who are not Interested Persons of the
Trust shall select the accountant at any meeting held before the initial
registration statement of the Trust becomes effective, and thereafter shall
select the accountant annually by votes, cast in person, at a meeting held
within 30 days before or after the beginning of the fiscal year of the Trust.
(c) Any vacancy occurring due to the death or resignation of the
accountant, may be filled at a meeting called for the purpose by the vote, cast
in person, of a majority of those Trustees who are not Interested Persons of the
Trust.
ARTICLE IX
Amendments
Section 9.1. General. These By-Laws may be amended or repealed, in
whole or in part, by a majority of the Trustees then in office at any meeting of
the Trustees, or by one or more writings signed by such a majority.
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<PAGE> 1
EXHIBIT 2a
John Hancock Capital Series
John Hancock Cash Management Fund
John Hancock Income Securities Trust
John Hancock Investors Trust
John Hancock Limited Term Government Fund
John Hancock Sovereign Bond Fund
John Hancock Special Equities Fund
John Hancock Strategic Series
John Hancock Tax-Exempt Income Fund
John Hancock Tax-Exempt Series Fund
John Hancock World Fund
AMENDMENT TO BY-LAWS
--------------------
RESOLVED, that the By-Laws of the Trust be and hereby are amended to
create the office of Vice Chairman of the Trust by adding the following as
Article VI, Sub-Section 6.5A of the By-Laws:
SECTION 6.5A. POWERS AND DUTIES OF THE VICE CHAIRMAN. The Trustees may,
but need not, appoint one or more Vice Chairmen of the Trust. A Vice Chairman
shall be an executive officer of the Trust and shall have the powers and
duties of a Vice President of the Trust, as provided in Section 6.7 of this
Article VI. The Vice Chairman shall perform such duties as may be assigned
to him or her from time to time by the Trustees of the Chairman.
<PAGE> 1
EXHIBIT 4
JOHN HANCOCK WORLD FUND -
JOHN HANCOCK PACIFIC BASIN EQUITIES FUND
A MASSACHUSETTS VOLUNTARY ASSOCIATION
CLASS A
fully paid and non-assessable shares of beneficial interest, without par value,
in John Hancock World Fund - John Hancock Freedom Pacific Basin Equities Fund
(the "Fund"), a Massachusetts voluntary association established by the
Declaration of Trust dated August 25, 1986, as amended from time to time, a copy
of which, together with any amendments thereto (the "Declaration"), is on file
with the Secretary of the Commonwealth of Massachusetts. The provisions of the
Declaration are hereby incorporated in and made a part of this certificate as
fully as if set forth herein in their entirety, to all of which provisions the
holder and every transferee or assignee hereof by accepting or holding the same
agrees to be bound. This certificate, and the shares represented hereby are
negotiable and transferable on the books of the Fund by the registered holder
hereof in person or by attorney upon surrender of this certificate properly
endorsed. This certificate is issued by the Trustees of John Hancock World Fund
- - John Hancock Freedom Pacific Basin Equities Fund, acting not individually but
as such Trustees, and is not valid until countersigned by the Transfer Agent.
The name John Hancock World Fund - John Hancock Freedom Pacific Basin Equities
Fund, is the designation of the Trustees under the Declaration of Trust dated
August 25, 1986, as amended from time to time. The obligations hereunder are not
personally binding upon, nor shall resort be had to the private property of, any
of the Trustees, shareholders, officers, employees or agents of the Fund, but
the Fund property or a specific portion thereof only shall be bound.
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Update date 3/1/94 jjm
Mass Fund
signed by Boudreau, Chairman
fund 58
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JOHN HANCOCK WORLD FUND -
JOHN HANCOCK PACIFIC BASIN EQUITIES FUND
A MASSACHUSETTS VOLUNTARY ASSOCIATION
CLASS B
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Update date 3/1/94 jjm
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signed by Boudreau, Chairman
fund 158
<PAGE> 1
Exhibit 4a
JOHN HANCOCK WORLD FUND -
JOHN HANCOCK GLOBAL RX FUND
A MASSACHUSETTS VOLUNTARY ASSOCIATION
CLASS A
fully paid and non-assessable shares of beneficial interest, without par value,
in John Hancock World Fund - John Hancock Freedom Global Rx Fund (the "Fund"), a
Massachusetts voluntary association established by the Declaration of Trust
dated August 25, 1986, as amended from time to time, a copy of which, together
with any amendments thereto (the "Declaration"), is on file with the Secretary
of the Commonwealth of Massachusetts. The provisions of the Declaration are
hereby incorporated in and made a part of this certificate as fully as if set
forth herein in their entirety, to all of which provisions the holder and every
transferee or assignee hereof by accepting or holding the same agrees to be
bound. This certificate, and the shares represented hereby are negotiable and
transferable on the books of the Fund by the registered holder hereof in person
or by attorney upon surrender of this certificate properly endorsed. This
certificate is issued by the Trustees of John Hancock World Fund - John Hancock
Freedom Global Rx Fund, acting not individually but as such Trustees, and is not
valid until countersigned by the Transfer Agent.
The name John Hancock World Fund - John Hancock Freedom Global Rx Fund is the
designation of the Trustees under the Declaration of Trust dated August 25,
1986, as amended from time to time. The obligations hereunder are not
personally binding upon, nor shall resort be had to the private property of, any
of the Trustees, shareholders, officers, employees or agents of the Fund, but
the Fund property or a specific portion thereof only shall be bound.
- --------------------------
Update date 3/1/94 jjm
Mass Fund 28
signed by Boudreau, Chairman
<PAGE> 2
JOHN HANCOCK WORLD FUND -
JOHN HANCOCK GLOBAL RX FUND
A MASSACHUSETTS VOLUNTARY ASSOCIATION
CLASS B
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Update date 3/1/94 jjm
Mass Fund 128
signed by Boudreau, Chairman
<PAGE> 1
EXHIBIT 5
JOHN HANCOCK WORLD TRUST
INVESTMENT MANAGEMENT CONTRACT
DATED MAY 5, 1987
AS AMENDED DECEMBER 19, 1989 SECTION 6 (SEE ATTACHED)
<PAGE> 2
JOHN HANCOCK WORLD TRUST
WORLD BOND PORTFOLIO
PACIFIC BASIN EQUITIES PORTFOLIO
BOSTON, MASSACHUSETTS
May 5, 1987
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
Investment Management Contract
Dear Sirs:
John Hancock World Trust (the "Trust") has been organized as a business
trust under the laws of the Commonwealth of Massachusetts to engage in the
business of an investment company. The Trust's shares of beneficial interest may
be classified into series, each series representing the entire undivided
interest in a separate portfolio of assets. As of the date hereof, the Trust has
two series of shares, World Bond Portfolio and Pacific Basin Equities Portfolio
(each, a "Fund" and, collectively, the "Funds"), each with a separate portfolio
of assets.
The Trustees of the Trust (the "Trustees") have selected you to provide
investment advice and management for the Trust and the Funds and to provide
certain other services, as more fully set forth below, and you are willing to
provide such advice, management and services under the terms and conditions
hereinafter set forth. Accordingly, the Trust agrees with you as follows:
1. Delivery of Documents. The Trust has furnished you with
copies, properly certified or otherwise authenticated, of each of the following:
(a) Declaration of Trust of the Trust, dated August 25, 1986 (the
"Declaration of Trust").
(b) By-Laws of the Trust as in effect on the date hereof.
(c) Resolutions of the Trustees selecting you as investment
adviser for the Trust and the Funds and approving the form of this Agreement.
(d) Resolutions of the Trustees selecting John Hancock Advisers
International, Limited as sub-adviser to you, the Trust and the Funds (the
"Sub-Adviser") and approving the
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form of the Sub-Adviser's contract with you,
the Trust and the Funds (the "Sub-Investment Management Contract").
(e) The Sub-Investment Management Contract.
(f) Commitments, limitations and undertakings made by the Trust
to state "blue sky" authorities for the purpose of qualifying shares of the
Trust and the Funds for sale in such states.
The Trust will furnish you from time to time with copies, properly
certified or otherwise authenticated, of all amendments of or supplements to the
foregoing, if any.
2. Investment and Management Services. You will use you best
efforts to provide to each Fund continuing and suitable investment programs
consistent with the investment policies, objectives and restrictions of such
Fund. In the performance of your duties hereunder, subject always (x) to the
provisions contained in the documents delivered to you pursuant to Section I as
each of the same may from time to time be amended or supplemented and (y) to the
limitations set forth in the registration statement of the Trust as in effect
from time to time under the Securities Act of 1933, as amended, you will, at
your expense:
(a) furnish each Fund with advice and recommendations consistent
with the investment policies, objectives and restrictions of such Fund, with
respect to the purchase, holding and disposition of portfolio assets, including
advice on the selection and allocation of investments among the nations of the
world, and among equity and debt securities, and what portion of such assets, if
any, should be held in cash or cash equivalents, subject to the provisions of
the Sub-Investment Management Contract respecting the responsibilities of the
Sub-Adviser with respect to such portion of a Fund's assets as shall be
allocated pursuant to Section 3 of this Agreement to investments in countries
other than the U.S. and Canada ("Foreign Assets"), provided, however, that you
shall have sole responsibility for furnishing advice and recommendations with
respect to investments in the United States and Canada ("Domestic Assets").
(b) in consultation with the Sub-Adviser, advise the Funds with
respect to foreign currency matters having regard to foreign exchange controls,
if any, and forward foreign exchange contracts;
(c) advise each Fund in connection with policy decisions to be
made by the Trustees or any committee thereof with respect to such Fund's
investments in Domestic and Foreign Assets and, as requested, furnish such Fund
with research, economic and statistical data in connection with such Fund's
investments and investment policies;
(d) provide administration of the day-to-day investment
operations of each Fund;
(e) submit such reports relating to the valuation of each Fund's
securities as the Trustees may reasonably request;
(f) assist each Fund in any negotiations relating to its
investments with issuers, investment banking firms, securities brokers or
dealers and other institutions or investors;
(g) consistent with the provisions of Section 8 of the Agreement,
place orders for the purchase, sale or exchange of portfolio securities
consisting of Domestic and Foreign Assets for each Fund's accounts with brokers
or dealers selected by you, provided that in connection with the placing of such
orders and the selection of such brokers or dealers you shall seek to obtain
execution and pricing within the policy guidelines determined by the Trustees
and set forth in the Prospectus and Statement of Additional Information of the
Funds as in effect from time to time;
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<PAGE> 4
(h) provide office space and office equipment and supplies, the
use of accounting equipment when required, and necessary executive, clerical and
secretarial personnel for the administration of the affairs of each Fund;
(i) from time to time or at any time requested by the Trustees,
make reports to the Trust of your performance of the foregoing services and
furnish advice and recommendations with respect to other aspects of the business
and affairs of each Fund;
(j) maintain and preserve the records required by the Investment
Company Act of 1940, as amended, to be maintained and preserved by the Trust on
behalf of each Fund (you agree that such records are the property of the Trust
and will be surrendered to the Trust promptly upon request therefor);
(k) obtain and evaluate such information relating to economies,
industries, businesses, securities markets and securities as you may deem
necessary or useful in the discharge of your duties hereunder;
(l) oversee and use your best efforts to assure the performance
of, the activities and services of each custodian, sub-custodian, transfer agent
and other similar agent retained by the Trust; and
(m) give instructions to the custodian and any sub-custodian of
each Fund as to deliveries of securities to and from such custodian or
sub-custodian, transfer of currencies and payments of cash for the account of
each Fund.
3. Allocation of Assets. Subject to the review of the Trustees,
you in consultation with the Sub-Adviser shall determine at least quarterly the
percentage of Fund's assets that shall be allocated to you or to the Sub-Adviser
for investment management (the "Asset Allocation) and the manner in which such
Asset Allocation in general is to be achieved by adjustments to the Fund's
existing portfolio of securities. The Asset Allocation will specify the
percentage of assets of the Fund allocated to you or to the Sub-Adviser for
management on the effective date of such determination and will apply to cash
inflow and outflow thereafter until the Asset Allocation is next redetermined.
If you and the Sub-Adviser cannot agree on an Asset Allocation, you have the
right to make the final determination, subject to review by the Trustees.
4. Expenses of the Funds. You will pay:
(a) the compensation and expenses of all officers and employees
of the Trust and the Funds, except as expressly paid by the Trust or the Funds,
either directly or by reimbursement of the Adviser, pursuant to Section 5(d);
(b) the expenses of office rent, telephone and other utilities,
office furniture, equipment, supplies, and other office expenses of the Trust
and the Funds;
(c) any other expenses incurred by you in connection with the
performance of your duties hereunder;
(d) premiums for such insurance as may be agreed upon by you and
the Trustees; and
(e) fees payable to the Sub-Adviser pursuant to the terms of the
Sub-Investment Management Contract.
5. Expenses of the Trust or the Funds Not Paid By You. You will
not be required to pay any expenses which this Agreement does not expressly make
payable to you. In particular,
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<PAGE> 5
and without limiting the generality of the foregoing but subject to the
provisions of Section 4, you will not be required to pay:
(a) any and all expenses, taxes and governmental fees incurred by
the Trust or any Fund prior to the effective date of the first registration
statement of the Trust under the Securities Act of 1933, as amended;
(b) without limiting the generality of the foregoing clause (a),
the expenses of organizing the Trust and the Funds (including without limitation
legal, accounting and auditing fees and expenses incurred in connection with the
matters referred to in this clause (b), of registering the Trust under the
Investment Company Act of 1940, as amended, and of initially registering the
shares of the Trust under the Securities Act of 1933, as amended, and of
qualifying the shares for sale under state securities laws for the initial
offering and sale of the shares;
(c) the compensation and expenses of Trustees who are not
interested persons (as used in this Agreement, such term shall have the meaning
specified in the Investment Company Act of 1940, as amended) of you, and of
independent advisers, independent contractors, consultants, managers and other
unaffiliated agents employed by the Trust or the Funds other than through you;
(d) with respect to each Fund, the compensation, in the form of
salary, fringe benefits and incentive compensation of the Fund's Chairman of the
Board and President, the Fund's Secretary and the Fund's Compliance Officer who
provide administrative and compliance services to the Fund, the amount of such
compensation to be paid by the Fund to be determined from time to time by the
Trustees who are not interested persons, provided that such compensation paid by
the Fund will not exceed in any fiscal year 0.03% of the average daily net asset
value of the Fund during such year. Any such compensation to be paid by a Fund
will be accrued daily and, if paid by reimbursement of the Adviser, will be paid
quarterly or if paid directly will be paid from time to time at intervals to be
agreed upon by the Fund and the affected officers;
(e) legal, accounting and auditing fees and expenses of the Trust
or the Funds;
(f) the fees or disbursements of custodians and depositories of
the Trust's asset, transfer agents, disbursing agents, plan agents and
registrars;
(g) taxes and governmental fees assessed against the Trust's
assets and payable by the Trust;
(h) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders of any Fund;
(i) brokers' commissions and underwriting fees; and
(j) the expense of periodic calculations of the net asset value
of the shares of the Funds.
6. Compensation of the Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by you as herein provided, for
each Fund, the Trust will pay you quarterly, based on the average daily net
asset value of such Fund for the preceding quarter, a fee at the annual rate of
.80% of the portion of the average daily net asset value of such Fund during
such quarter that does not exceed $200,000,000, and .70% of the portion, if any,
of the average daily net asset value of the Fund during such quarter that is in
excess of $200,000,000.
If in any fiscal year of a Fund, after excluding taxes, interest,
brokerage commissions and extraordinary expense beyond your control but
including only so much of the fee calculated pursuant to the foregoing
provisions of this paragraph 6 as is attributable to such fiscal year, the
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<PAGE> 6
normal expenses of such Fund chargeable to its income account shall exceed the
greater of (a) the sum of (i) 1.5% of the first $30,000,000 of such Fund's daily
net average asset value in excess of $30,000,000, and (ii) 1.0% of such Fund's
daily not average asset value in excess of $30,000,000 and (b) 1.75% of the
Fund's daily average net asset value (subject to receipt of required approvals
of state securities commissioners), you will waive your fee payable under the
foregoing provisions of this paragraph 6 to the extent of such excess, and you
will reimburse such Fund for any amount by which such excess exceeds such fee.
The waiver and reimbursement contemplated by the foregoing sentence shall be
given effect by your paying such Fund an amount equal to the amount of such
waiver or reimbursement promptly after the end of such fiscal year. You
understand that, in connection with the qualification of securities of the Trust
for sale in certain states, the Trust has agreed, and may find it desirable to
agree in the future, that it will secure the consent of the securities
commissioners of certain states prior to treating any expense as an
extraordinary expense beyond your control within the meaning of the foregoing
sentence. Accordingly, you agree that no expense shall be so treated without the
consent of such commissioners. The net asset value of the Funds shall be
determined pursuant to the applicable provisions of the Declaration of Trust of
the Trust and applicable law.
7. Other Activities of Adviser and Its Affiliates. Nothing herein
contained shall prevent you or any affiliate or associate of yours from engaging
in any other business or from acting as investment adviser or investment manager
for any other person or entity, whether or not having investment policies or
portfolios similar to that of any of the Funds; and it is specifically
understood that officers, directors, and employees of yours, of your
subsidiaries and those of your parent company, John Hancock Mutual Life
Insurance Company, may continue to engage in providing portfolio management
services and advice to other investment companies, whether or not registered, to
other investment advisory clients of yours, of your subsidiaries or of said
Insurance Company and to the said Insurance Company itself.
8. Avoidance of Inconsistent Position. In connection with
purchases or sales of portfolio securities for the account of the Trust, neither
you nor any investment management subsidiary of yours, nor any of your or their
directors, officers or employees will act as principal or agent or receive any
commission. If any occasion should arise in which you advise persons concerning
the shares of the Trust, you will act solely on your own behalf and not in any
way on behalf of the Trust or the Funds.
9. No Partnership or Joint Venture. The Trust, the Funds and
you are not partners of or joint venturers with each other and nothing herein
shall be construed so as to make them such partners or joint venturers or impose
any liability as such of any of them.
10. Name of Trust and Funds. The Trust and the Funds may use the
name "John Hancock" or any name derived from or similar to the name "John
Hancock Advisers, Inc." or "John Hancock Mutual Life Insurance Company" only for
so long as this Agreement or any extension, renewal, or amendment hereof remains
in effect. At such time as such Agreement shall no longer be in effect, the
Trust and the Funds will (to the extent they lawfully can) cease to use such a
name or any other name indicating that the Funds are advised by or they are
otherwise connected with you. The Trust acknowledges that it has adopted the
name "John Hancock World
6
<PAGE> 7
Trust" through permission of John Hancock Mutual Life Insurance Company, a
Massachusetts insurance company, and agrees that John Hancock Mutual Life
Insurance Company reserves to itself and any successor to its business the right
to grant the non-exclusive right to use the names "John Hancock" or any similar
name to any other corporation or entity, including but not limited to any
investment company of which John Hancock Mutual Life Insurance Company or any
subsidiary or affiliate thereof or any successor to the business of any thereof
shall be the investment adviser.
11. Limitation of Liability of Adviser. You shall not be liable
for any error of judgment or mistake of law of for any loss suffered by the
Trust or the Funds in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on your part in the performance of your duties or from reckless
disregard by you of your obligations and duties under this Agreement. Any
person, even though also employed by you, who may be or become an employee of
and paid by the Trust or the Funds shall be deemed, when acting within the scope
of his employment by the Trust or the Funds, to be acting in such employment
solely for the Trust or the Funds and not as your employee or agent.
12. Duration and Termination of this Agreement. This Agreement
shall remain in force until the second anniversary of the date upon which this
Agreement was executed by the parties hereto, and from year to year thereafter,
but only so long as such continuance is specifically approved at least annually
by (a) a majority of the Trustees who are not interested persons of you or
(other than as trustees) of the Trust, cast in person at a meeting called for
the purpose of voting on such approval, and (b) either (i) the Trustees or (ii)
with respect to each Fund, a majority of the outstanding voting securities of
such Fund. This Agreement may, on 60 days' written notice, be terminated at any
time by the Trustees without the payment of any penalty by the Trust or the
Funds, by vote with respect to each Fund, of a majority of the outstanding
voting securities of such Fund, or by you. Termination of this Agreement with
respect to a Fund shall not be deemed to terminate or otherwise invalidate any
provision of any Agreement between you and any other series of the Trust. This
Agreement shall automatically terminate in the event of its assignment. In
interpreting the provisions of this Section 12, the definitions contained in
Section 1 (a) of the Investment Company Act of 1940, as amended (particularly
the definitions of "assignment," "interested person" and "voting security")
shall be applied.
13. Amendment of This Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment, transfer,
assignment, sale, hypothecation or pledge of this Agreement shall be effective
until approved by (a) the Trustees, including a majority of the Trustees who are
not interested persons of you or (other than as trustees) of the Trust or any
Fund, cast in person at a meeting called for the purpose of voting on such
approval, and (b) with respect to each Fund, a majority of the outstanding
voting securities of such Fund, as defined in the Investment Company Act of
1940, as amended, provided that no approval shall be required pursuant to this
clause (b) in respect of any contract between you and the holders of outstanding
voting securities of any other series of the Trust.
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<PAGE> 8
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The name John Hancock World Trust is the
designation of the Trustees under the Declaration of Trust, dated August 25,
1986, as amended from time to time. The Declaration of Trust has been filled
with the Secretary of State of the Commonwealth of Massachusetts. The
obligations of the Trust and the Funds are not personally binding upon, nor
shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Trust or the Funds, but only
the Trust's property shall be bound.
Yours very truly,
JOHN HANCOCK WORLD TRUST
-- World Bond Portfolio
-- Pacific Basin Equities Portfolio
By /s/R. Bruce Oliver
------------------
Chairman of the Board
and President
The foregoing contract
is hereby agreed to as
of the date hereof.
JOHN HANCOCK ADVISERS, INC.
By /s/R. Bruce Oliver
------------------
Vice Chairman of the Board,
President and Chief
Executive Officer
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Exhibit 5a
AMENDMENT TO INVESTMENT MANAGEMENT CONTRACT
It is hereby agreed that the second paragraph of Section 6 of the
Investment Management Contract between the undersigned parties dated May 5, 1987
is deleted in its entirety and replaced by the following:
If the total of all ordinary business expenses of the Fund for any
fiscal year exceeds the lowest applicable percentage of average net assets or
income limitations prescribed in any state in which shares of the Fund are
qualified for sale, you shall waive your fee to the extent of such excess and
will reimburse the Fund for any amount by which such excess exceeds your fee.
The waiver and reimbursement contemplated by the foregoing sentence shall be
given effect by your paying the Fund an amount equal to the amount of such
waiver or reimbursement on the same schedule as the Fund pays the Advisory fee,
provided that if at the end of the fiscal year, Fund expenses do not exceed the
annual expense limitations, the Fund will reimburse you for monies paid by you
or fees foregone during the course of the fiscal year.
Unless prescribed otherwise by state law, ordinary business expenses
shall be calculated excluding taxes, interest, brokerage commissions, and
extraordinary expenses beyond your control. You understand that, in connection
with the qualification of securities of the Fund for sale in certain states, the
Fund has agreed, and may find it desirable to agree in the future, that it will
secure the consent of the securities commissioners of certain states prior to
treating any expense as an extraordinary expense beyond your control within the
meaning of the foregoing sentence. Accordingly, you agree that no expense shall
be so treated without the consent of such commissioners. The net asset value of
the Fund shall be determined pursuant to the provisions in the Declaration of
Trust and applicable law.
Executed this 19th day of December, 1989.
JOHN HANCOCK WORLD TRUST
BY: /s/Edward J. Boudreau, Jr.
--------------------------
Chairman and President
JOHN HANCOCK ADVISERS, INC.
By: /s/Edward J. Boudreau, Jr.
--------------------------
President and Chief Executive Officer
<PAGE> 1
Exhibit 5b
JOHN HANCOCK WORLD FUND
JOHN HANCOCK GLOBAL RX FUND
BOSTON, MASSACHUSETTS
June 24, 1991
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
INVESTMENT MANAGEMENT CONTRACT
Dear Sirs:
John Hancock World Fund (the "Trust") has been organized as a business
trust under the laws of the Commonwealth of Massachusetts to engage in the
business of an investment company. The Trust's shares of beneficial interest may
be classified into series, each series representing the entire undivided
interest in a separate portfolio of assets. As of the date hereof, the Trust has
two series of shares, representing interests in World Fund - Pacific Basin
Equities Portfolio and John Hancock Global Rx Fund (the "Fund").
The Trustees of the Trust (the "Trustees") have selected John Hancock
Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Fund and to provide certain other services, as more fully set
forth below, and you are willing to provide such advice, management and services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows:
1. Delivery of Documents. The Trust has furnished you with
copies, properly certified or otherwise authenticated, of each of the following:
(a) Declaration of Trust of the Trust, dated August 25, 1986 as'
amended (the "Declaration of Trust").
(b) By-Laws of the Trust as in effect on the date hereof.
(c) Resolutions of the Trustees selecting the Adviser as the
investment adviser for the Trust and the Fund and approving the form of this
Agreement.
(d) Commitments, limitations and undertakings made by the Trust
to state "blue sky" authorities for the purpose of qualifying shares of the Fund
for sale in such states.
The Trust will furnish you from time to time with copies, properly
certified or otherwise authenticated, of all amendments of or supplements to the
foregoing, if any.
<PAGE> 2
2. Investment and Management Services. You will use your best
efforts to provide to the Fund continuing and suitable investment programs with
respect to investments, consistent with the investment policies, objectives and
restrictions of the Fund. In the performance of the Adviser's duties hereunder,
subject always (x) to the provisions contained in the documents delivered to the
Adviser pursuant to Section 1, as each of the same may from time to time be
amended or supplemented, and (y) to the limitations set forth in the
registration statement of the Fund as in effect from time to time under the
Securities Act of 1933, as amended, the Adviser will, at its own expense:
(a) furnish the Fund with advice and recommendations, consistent
with the investment policies, objectives and restrictions of the Fund, with
respect to the purchase, holding and disposition of portfolio securities;
(b) advise the Fund in connection with policy decisions to be
made by the Trustees or any committee thereof with respect to such Fund's
investments and, as requested, furnish the Fund with research, economic and
statistical data in connection with the Fund's investments and investment
policies;
(c) provide administration of the day-to-day investment
operations of the Fund;
(d) submit such reports relating to the valuation of the Fund's
securities as the Trustees may reasonably request;
(e) assist the Fund in any negotiations relating to its
investments with issuers, investment banking firms, securities brokers or
dealers and other institutions or investors;
(f) consistent with provisions of Section 7 of this Agreement,
place orders for the purchase, sale, or exchange of portfolio securities with
brokers or dealers selected by you, provided that in connection with the placing
of such orders and the selection of such brokers or dealers you shall seek to
obtain execution and pricing within the policy guidelines determined by the
Trustees and set forth in the Prospectus and Statement of Additional Information
of the Fund as in effect from time to time;
(g) provide office space and equipment and supplies, the use of
accounting equipment when required, and necessary executive, clerical and
secretarial personnel for the administration of the affairs of the Fund;
(h) from time to time or at any time requested by the Trustees,
make reports to the Trust of your performance of the foregoing services and
furnish advice and recommendations with respect to other aspects of the business
and affairs of the Fund;
(i) maintain and preserve the records required by the Investment
Company Act of 1940, as amended, to be maintained and preserved by the Trust on
behalf of the Fund (you agree that such records are the property of the Trust
and will be surrendered to the Trust promptly upon request therefor);
(j) obtain and evaluate such information relating to economics,
industries, businesses, securities, markets and securities as you may deem
necessary or useful in the discharge of your duties hereunder;
(k) oversee and use your best efforts to assure the performance
of, the activities and services of the custodian, transfer agent and other
similar agents retained by the Trust; and
(l) give instructions to the Fund's custodian as to deliveries of
securities to and from such custodian and transfer of payment for cash for the
account of the Fund.
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<PAGE> 3
3. Expenses of the Fund. You will pay:
(a) the compensation and expenses of all officers and employees
of the Fund, except those expressly paid by the Fund, either directly or by
reimbursement of the Adviser, pursuant to Section 4;
(b) the expenses of office, rent, telephone and other utilities,
office furniture, equipment, supplies and other office expenses of the Fund;
(c) any other expenses incurred by you in connection with the
performance of your duties hereunder; and
(d) premiums for such insurance as may be agreed upon by you and
the Trustees.
4. Expenses of the Trust or the Fund Not Paid by You. You will
not be required to pay any expenses which this Agreement does not expressly make
payable to you. In particular, and without limiting the generality of the
foregoing but subject to the provisions of Section 3, you will not be required
to pay:
(a) any and all expenses, taxes and governmental fees incurred by
the Trust or the Fund prior to the effective date of the Trust's Post Effective
Amendment No. 7.
(b) without limiting the generality of the foregoing clause (a),
the expenses of organizing the Fund (including without limitation legal,
accounting and auditing fees and expenses incurred in connection with the
matters referred to in the clause (b)), of initially registering the shares of
the Fund under the Securities Act of 1933, as amended, and of qualifying the
shares for sale under state securities laws for the initial offering and sale of
shares;
(c) the compensation and expenses of Trustees who are not
interested persons (as used in this Agreement such term shall have the meaning
specified in the Investment Company Act of 1940, as amended) of you, and of
independent advisers, independent contractors, consultants, managers and other
unaffiliated agents employed by the Trust or the Fund other than through you;
(d) legal, accounting and auditing fees and expenses of the Trust
or the Fund;
(e) the fees or disbursements of custodians and depositories of
the Fund's assets, transfer agents, disbursing agents, plan agents and
registrars;
(f) taxes and governmental fees assessed against the Trust's or
the Fund's assets and payable to the Trust;
(g) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders of the Fund;
(h) brokers' commissions and underwriting fees; and
(i) the expenses of periodic calculations of the net asset value
of the shares of the Fund.
3
<PAGE> 4
(j) with respect to the Fund, the compensation, in the form of
salary, fringe benefits and incentive compensation of the Trust's Chairman of
the Board and President, the Trust's Secretary and the Trust's Compliance
Officer who provide administrative and compliance services to the Fund, the
amount of such compensation to be paid by the Fund to be determined from time to
time by the Trustees who are not interested persons, provided that such
compensation paid by the Fund will not exceed in any fiscal year 0.03% of the
average daily net asset value of the Fund during such year. Any such
compensation to be paid by the Fund will be accrued daily and, if paid by
reimbursement of the Adviser, will be paid quarterly or, if paid directly, will
be paid from time to time at intervals to be agreed upon by the Fund and the
affected officers;
5. Compensation of the Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by you as herein provided, the
Fund will pay you quarterly, a fee at the annual rate of .80% of the average
daily net asset value of the Fund during such quarter which does not exceed
$200,000,000 and 0.70% of the portion, if any, of the average daily net asset
value of the Fund during such quarter that is in excess of $200,000,000.
In the event normal operating expenses of the Fund, exclusive of
certain expenses prescribed by state law, are in excess of any limitation
imposed be a state 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 any additional arrangements necessary to
eliminate any remaining excess expenses.
7. Avoidance of Inconsistent Position. In connection with
purchases or sales of portfolio securities for the account of the Fund, neither
your not any investment management subsidiary of your, nor any of your or their
directors, officers or employees will act as principal or agent or receive any
commission. If any occasion shall arise in which you advise persons concerning
the shares of the Trust, you will act solely on your own behalf and not in any
way on behalf of the Trust or the Fund.
8. No Partnership or Joint Venture. The Trust, the Fund, and
you are not partners of or joint venturers with each other and nothing herein
shall be construed so as to make them such partners or joint venturers or impose
any liability as such on any of them.
9. Name of the Trust and Fund. The Trust and the Funds may use
the name "John Hancock" or any name derived from or similar to the name "John
Hancock Advisers, Inc." or "John Hancock Mutual Life Insurance Company" only for
so long as this Agreement remains in effect. At such time as this Agreement
shall no longer be in effect, the Trust and the Fund will (to the extent they
lawfully can) cease to use such a name or any other name indicating that the
Fund is advised by or otherwise connected with you. The Trust acknowledges that
it has adopted the name "John Hancock World Fund" and the Fund has adopted the
name "John Hancock Global Rx Fund" through permission of John Hancock Mutual
Life Insurance Company, a Massachusetts insurance company, and agrees that John
Hancock Mutual Life Insurance Company reserves to itself and any successor to
its business the right to grant the non-exclusive right to use the names "John
Hancock" or any similar name to any other corporation or entity, including but
not limited to any investment company of which John Hancock Mutual Life
Insurance Company or any
4
<PAGE> 5
subsidiary or affiliate thereof or any successor to the business of any thereof
shall be the investment adviser.
10. Limitation of Liability of the Adviser. You shall not be
liable for any error of judgment or mistake of law or for any loss suffered by
the Trust or the Fund in connection with the matters to which this Agreement
relates, except a loss resulting from willful misfeasance, bad faith or gross
negligence on your part in the performance of your duties or from reckless
disregard by you of your obligations and duties under this Agreement. Any
person, even though also employed by you, who may be or become an employee of
and paid by the Trust or the Fund shall be deemed, when acting within the scope
of his employment by the Trust or the Fund, to be acting in such employment
solely for the Trust or the Fund and not as your employee or agent.
11. Duration and Termination of this Agreement. This Agreement
shall remain in force until the second anniversary of the date upon which this
Agreement was executed by the parties hereto, and from year to year thereafter,
but only so long as such continuance is specifically approved at least annually
by (a) a majority of the Trustees who are not interested persons of you or
(other than as trustees) of the Trust, cast in person at a meeting called for
the purpose on voting on such approval, and (b) either (i) the Trustees or (ii)
a majority of the outstanding voting securities of the Fund. This Agreement may,
on 60 days' written notice, be terminated at any time without the payment of any
penalty by the Trust or the Fund by vote of a majority of the outstanding voting
securities of the Fund, or by you. Termination of this Agreement with respect to
the Fund shall not be deemed to terminate or otherwise invalidate any provisions
of any contract between you and any other series of the Trust. This Agreement
shall automatically terminate in the event of its assignment. In interpreting
the provisions of this Section 11, the definitions contained in Section 1(a) of
the Investment Company Act of 1940, as amended, (particularly the definitions of
"assignment," "interested person" or "voting security"), shall be applied.
12. Amendment of this Agreement. No provision of this agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge, or termination is sought, and no amendment, transfer,
assignment, sale, hypothecation or pledge of this Agreement shall be effective
until approved by (a) the Trustees, including a majority of the Trustees who are
not interested persons of you or (other than as Trustees) of the Trust or the
Fund, cast in person at a meeting called for the purpose of voting on such
approval, and (b) a majority of the outstanding voting securities of the Fund,
as defined in the Investment Company Act of 1940, as amended.
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The name John Hancock World Fund is the designation
of the Trustees under Declaration of Trust, dated August 25, 1986, as amended
from time to time. The Declaration of Trust has been filed with the Secretary of
State of the Commonwealth of Massachusetts. The obligations of the Trust and the
Fund are not personally binding upon, nor
5
<PAGE> 6
shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees or agents of the Trust or the Fund, but only
the Fund's property shall be bound. The Fund shall not be liable for the
obligations of any other series of the Trust.
Yours very truly,
JOHN HANCOCK WORLD FUND
-- on behalf of
John Hancock Global Rx Fund
By /s/ Edward J. Boudreau, Jr.
---------------------------
Chairman of the Board
and President
The foregoing contract is hereby
agreed to as of the date hereof.
JOHN HANCOCK ADVISERS, INC.
By /s/ Edward J. Boudreau, Jr.
---------------------------
Chairman of the Board
President and Chief Executive
Officer
6
<PAGE> 1
Exhibit 5c
JOHN HANCOCK WORLD FUND
JOHN HANCOCK GLOBAL RETAIL FUND
Boston, Massachusetts
September 28, 1994
John Hancock Advisers, Inc.
101 Huntington Avenue
Boston, Massachusetts 02199
Investment Management Contract
Dear Sirs/Madam:
John Hancock World Fund (the "Trust") has been organized as a business
trust under the laws of the Commonwealth of Massachusetts to engage in the
business of an investment company. The Trust's shares of beneficial interest may
be classified into series, each series representing the entire undivided
interest in John Hancock World Fund - John Hancock Freedom Pacific Basin
Equities Fund, John Hancock Global Rx Fund and John Hancock Global Retail Fund
(the "Fund").
The Trustees of the Trust (the "Trustees") have selected John Hancock
Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Fund and to provide certain other services, as more fully set
forth below, and you are willing to provide such advice, management and services
under the terms and conditions hereinafter set forth. Accordingly, the Trust
agrees with you as follows:
1. Delivery of Documents. The Trust has furnished you with
copies, properly certified or otherwise authenticated, of each of the
following:
(a) Amended and Restated Declaration of Trust of the Trust, dated
February 8, 1994, as amended from time to time (the
"Declaration of Trust").
(b) By-Laws of the Trust as in effect on the date hereof.
(c) Resolutions of the Trustees selecting the Adviser as the
investment adviser for the Trust and the Fund and approving
the form of this Agreement.
(d) Commitments, limitations and undertakings made by the Trust to
state "blue sky" authorities for the purpose of qualifying
shares of the Fund for sale in such states.
<PAGE> 2
The Trust will furnish you from time to time with copies, properly
certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. Investment and Management Services. You will use your best
efforts to provide to the Fund continuing and suitable investment
programs with respect to investments, consistent with the investment
policies, objectives and restrictions of the Fund. In the performance
of the Adviser's duties hereunder, subject always (x) to the provisions
contained in the documents delivered to the Adviser pursuant to Section
1, as each of the same may from time to time be amended or
supplemented, and (y) to the limitations set forth in the registration
statement of the Fund as in effect from time to time under the
Securities Act of 1933, as amended, the Adviser will, at its own
expense:
(a) furnish the Fund with advice and recommendations, consistent
with the investment policies, objectives and restrictions of
the Fund, with respect to the purchase, holding and
disposition of portfolio securities;
(b) advise the Fund in connection with policy decisions to be made
by the Trustees or any committee thereof with respect to such
Fund's investment and, as requested, furnish the Fund with
research, economic and statistical data in connection with the
Fund's investments and investment policies;
(c) provide administration of the day-to-day investment operations
of the Fund;
(d) submit such reports relating to the valuation of the Fund's
securities as the Trustees may reasonably request;
(e) assist the Fund in any negotiations relating to its
investments with issuers, investment banking firms, securities
brokers or dealers and other institutions or investors;
(f) consistent with provisions of Section 7 of this Agreement,
place orders for the purchase, sale or exchange of portfolio
securities with brokers or dealers selected by you, provided
that in connection with the placing of such orders and the
selection of such brokers or dealers you shall seek to obtain
execution and pricing within the policy guidelines determined
by the Trustees and set forth in the Prospectus and Statement
of Additional information of the Fund as in effect from time
to time;
(g) provide office space and equipment and supplies, the use of
accounting equipment when required, and necessary executive,
clerical and secretarial personnel for the administration of
the affairs of the Fund;
(h) from time to time or at any time requested by the Trustees,
make reports to the Trust of your performance of the foregoing
services and furnish advice and recommendations with respect
to other aspects of the business and affairs of the Fund;
(i) maintain and preserve the records required by the Investment
Company Act of 1940, as amended, to be maintained and
preserved by the Trust on behalf of the Fund (you agree that
such records are the property of the Trust and will be
surrendered to the Trust promptly upon request therefor);
2
<PAGE> 3
(j) obtain and evaluate such information relating to economies,
industries, businesses, securities markets and securities as
you may deem necessary or useful in the discharge of your
duties hereunder;
(k) oversee and use your best efforts to assure the performance
of, the activities and services of the custodian, transfer
agent and other similar agents retained by the Trust; and
(l) give instructions to the Fund's custodian as to deliveries of
securities to and from such custodian and transfer of payments
of cash for the account of the Fund.
3. Expenses of the Fund. You will pay:
(a) the compensation and expenses of all officers and employees of
the Fund;
(b) the expenses of office, rent, telephone and other utilities,
office furniture, equipment, supplies and other office
expenses of the Fund;
(c) any other expenses incurred by you in connection with the
performance of your duties hereunder; and
(d) premiums for such insurance as may be agreed upon be you and
the Trustees.
4. Expenses of the Trust or the Fund Not Paid by You. You will
not be required to pay any expenses which this Agreement does not
expressly make payable by you. In particular, and without limiting the
generality of the foregoing but subject to the provisions of Section 3,
you will not be required to pay:
(a) any and all expenses, taxes and governmental fees incurred by
the Trust or the Fund prior to the effective date of the
Trust's Post Effective Amendment No. 7.
(b) without limiting the generality of the foregoing clause (a),
the expenses of organizing the Fund (including without
limitation legal, accounting and auditing fees and expenses
incurred in connection with the matters referred to in this
clause (b), of initially registering the shares of the Fund
under the Securities Act of 1933, as amended, and of
qualifying the shares for sale under state securities laws for
the initial offering and sale of shares;
(c) the compensation and expenses of Trustees who are not
interested persons (as used in this Agreement such term shall
have the meaning specified in the Investment Company Act of
1940, as amended) of you, and of independent advisers,
independent contractors, consultants, managers and other
unaffiliated agents employed by the Trust or the Fund other
than through you;
(d) legal, accounting and auditing fees and expenses of the Trust
or the Fund;
(e) the fees or disbursements of custodians and depositories of
the Fund's assets, transfer agents, disbursing agents, plan
agents and registrars;
(f) taxes and governmental fees assessed against the Trust's or
the Fund's assets and payable by the Trust;
3
<PAGE> 4
(g) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders of the
Fund;
(h) brokers' commissions and underwriting fees; and
(i) the expense of periodic calculations of the net asset value of
the shares of the Fund.
5. Compensation of the Adviser. For all services to be rendered,
facilities furnished and expenses paid or assumed by you as herein
provided, the Fund will pay you monthly, a fee at the annual rate of
.80% of the average daily net asset value of the Fund during such month
which does not exceed $250,000,000 and 0.70% of the portion, if any, of
the average daily net asset value of the Fund during such month that is
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 any
limitation imposed by a state 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 any
arrangements necessary to eliminate any remaining excess expenses.
7. Avoidance of Inconsistent Position. In connection with
purchases or sales of portfolio securities for the account of the Fund,
neither your nor any investment management subsidiary of yours, nor any
of your or their directors, officers or employees will act as principal
or agent or receive any commission. If any occasion shall arise in
which you advise persons concerning the shares of the Trust, you will
act solely on your own behalf and not in any way on behalf of the Trust
or the Fund.
8. No Partnership or Joint Venture. The Trust, the Fund, and you
are not partners of or joint ventures with each other and nothing
herein shall be construed so as to make them such partners or joint
ventures or impose any liability as such on any of them.
9. Name of the Trust and Fund. The Trust and the Funds may use
the name "John Hancock" or any name derived from or similar to the name
"John Hancock Advisers, Inc." or "John Hancock Mutual Life Insurance
Company" only for so long as this Agreement remains in effect. At such
time as this Agreement shall no longer be in effect, the Trust and the
Fund will (to the extent they lawfully can) cease to use such a name or
any other name indicating that the Fund is advised by or otherwise
connected with you. The Trust acknowledges that it has adopted the name
"John Hancock World Fund" and the Fund has adopted the name "John
Hancock Global Retail Fund" through permission of John Hancock Mutual
Life Insurance Company, a Massachusetts insurance company, and agrees
that John Hancock Mutual Life Insurance Company reserves to itself and
any successor to its business the right to grant the non-exclusive
right to use the names "John Hancock" or any similar name to any other
corporation or entity, including but not limited to any investment
company of which John Hancock Mutual Life Insurance Company or any
subsidiary or affiliate thereof or any successor to the business of any
thereof shall be the investment adviser.
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<PAGE> 5
10. Limitation of Liability of the Adviser. You shall not be
liable for any error of judgment or mistake of law or for any loss
suffered by the Trust or the Fund in connection with the matters to
which this Agreement relates, except a loss resulting from willful
misfeasance, bad faith or gross negligence on your part in the
performance of your duties or from reckless disregard by you of your
obligations and duties under this Agreement. Any person, even though
also employed by you, who may be or become an employee of and paid by
the Trust or the Fund shall be deemed, when acting within the scope of
his employment by the Trust or the Fund, to be acting in such
employment solely for the Trust or the Fund and not as your employee or
agent.
11. Duration and Termination of this Agreement. This Agreement
shall remain in force until the second anniversary of the date upon
which this Agreement was executed by the parties hereto, and from year
to year thereafter, but only so long as such continuance is
specifically approved at least annually by (a) a majority of the
Trustees who are not interested persons of you or (other than as
trustees) of the Trust, cast in person at a meeting called for the
purpose on voting on such approval, and (b) either (i) the Trustees of
(ii) a majority of the outstanding voting securities of the Fund. This
Agreement may, on 60 days' written notice, be terminated at any time
without the payment of any penalty by the Trust or the Fund by vote of
a majority of the outstanding voting securities of the Fund, or by you.
Termination of this Agreement with respect to the Fund shall not be
deemed to terminate or otherwise invalidate any provisions of any
contract between you and any other series of the Trust. This Agreement
shall automatically terminate in the event of its assignment. In
interpreting the provisions of this Section 11, the definitions
contained in Section 1(a) of the Investment Company Act of 1940, as
amended (particularly the definitions of "assignment," "interested
person" or "voting security"), shall be applied.
12. Amendment of this Agreement. No provision of this agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of
the change, waiver, discharge or termination is sought, and no
amendment, transfer, assignment, sale, hypothecation or pledge of this
Agreement shall be effective until approved by (a) the Trustees,
including a majority of the Trustees who are not interested persons of
you or (other than as Trustees) of the Trust or the Fund, cast in
person at a meeting called for the purpose of voting on such approval,
and (b) a majority of the outstanding voting securities of the Fund, as
defined in the Investment Company Act of 1940, as amended.
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<PAGE> 6
13. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The name John Hancock World Fund is the designation
of the Trustees under Amended and Restated Declaration of Trust, dated February
8, 1994, as amended from time to time. The Declaration of Trust has been filed
with the Secretary of State of the Commonwealth of Massachusetts. The
obligations of the Trust and the Fund are not personally binding upon, nor shall
resort be had to the private property of, any of the Trustees, shareholders,
officers, employees or agents of the Trust or the Fund, but only the Fund's
property shall be bound. The Fund shall not be liable for the obligations of any
other series of the Trust.
Yours very truly,
JOHN HANCOCK WORLD FUND
--on behalf of
John Hancock Global Retail Fund
By: /s/ Robert G. Freedman
----------------------
President
The foregoing contract is hereby agreed
to as of the date hereof.
JOHN HANCOCK ADVISERS, INC.
By: /s/ Robert G. Freedman
----------------------
President
6
<PAGE> 1
Exhibit 5d
JOHN HANCOCK WORLD TRUST
SUB-INVESTMENT MANAGEMENT CONTRACT
DATED MAY 5, 1987
<PAGE> 2
JOHN HANCOCK ADVISERS, INC.
Boston, Massachusetts
May 5, 1987
JOHN HANCOCK WORLD TRUST
- -- World Bond Portfolio
- -- Pacific Basin Equities Portfolio
101 Huntington Avenue
Boston, Massachusetts 02199
JOHN HANCOCK ADVISERS,
INTERNATIONAL, LIMITED
37 Park Street
London, England W1Y 3H6
Sub-Investment Management Contract
Dear Sirs:
John Hancock World Trust (the "Trust") has been organized as a business
trust under the laws of the Commonwealth of Massachusetts to engage in the
business of an investment company. The Trust's shares of beneficial interest may
be classified into series, each series representing the entire undivided
interest in a separate portfolio of assets. As of the date hereof, the Trust has
two series of shares, World Bond Portfolio and Pacific Basin Equities Portfolio
(each, a "Fund" and, collectively, the "Funds"), each with a separate portfolio
of assets. The Trustees of the Trust (the "Trustees") have selected John Hancock
Advisers, Inc. (the "Adviser") to provide overall investment advice and
management for the Trust and the Funds, and to provide certain other services,
under the terms and conditions provided in the Investment Management Contract,
dated as of the date hereof, between the Trust and the Adviser (the "Investment
Management Contract").
The Adviser and the Trustees have selected John Hancock Advisers
International Limited (the "Sub-Adviser") to provide the Adviser and the Trust
with the advice and services set forth below with respect to such portion of the
Trust's and the Fund's assets as the Adviser, in consultation with the
Sub-Adviser, shall allocate pursuant to Section 3 of this Agreement to
investments in countries other than the United States and Canada (the "Foreign
Assets"), and the Sub-Adviser is willing to provide such advice and services,
subject to the review of the Trustees and overall supervision of the Adviser,
under the terms and conditions hereinafter set forth. The Sub-Adviser hereby
represents and warrants that it is registered as an investment adviser under the
Investment Advisers Act of 1940, as amended. Accordingly, the Trust and the
Adviser agree with the Sub-Adviser as follows:
<PAGE> 3
1. Delivery of Documents. The Trust has furnished the
Sub-Adviser with copies, properly certified or otherwise authenticated, of each
of the following:
(a) Declaration of Trust of the Trust, dated August 25, 1986 (the
"Declaration of Trust").
(b) By-Laws of the Trust as in effect on the date hereof.
(c) Resolutions of the Trustees selecting the Sub-Adviser as
sub-adviser to the Trust and the Funds and approving the Form of this Agreement.
(d) Resolutions of the Trustees selecting the Adviser as
investment adviser to the Trust and the Funds and approving the form of the
Adviser's Investment Management Contract with the Trust and the Funds.
(e) The Adviser's Investment Management Contract with the Trust
and the Funds.
(f) Commitments, limitations and undertakings made by the Trust
to state "blue sky" authorities for the purpose of qualifying shares of the
Trust and the Fund for sale in such states.
(g) The Adviser's Code of Ethics as currently in effect.
The Trust will furnish the Sub-Adviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. Investment Services. The Sub-Adviser will use its best
efforts to provide to each Fund continuing and suitable investment programs with
respect to investments in Foreign Assets, consistent with the investment
policies, objectives and restrictions of each such Fund. In the performance of
the Sub-Adviser's duties hereunder, subject always (x) to the provisions
contained in the documents delivered to the Sub-Adviser pursuant to Section 1,
as each of the same may from time to time be amended or supplemented, and (y) to
the limitations set forth in the registration statement of the Trust as in
effect from time to time under the Securities Act of 1933, as amended, the
Sub-Adviser will, at its own expense with respect to the Foreign Assets:
(a) furnish the Adviser and each Fund with advice and
recommendations, consistent with the investment policies, objectives and
restrictions of such Fund, with respect to the purchase, holding and disposition
of portfolio securities consisting of Foreign Assets, including advice on the
selection and allocation of investments among foreign securities markets and
among foreign equity and debt securities, and what portion of such assets, if
any, should be held in cash or cash equivalents denominated in United States
dollars or foreign currencies;
(b) furnish the Adviser and each Fund with advice respecting
foreign currency matters having regard to foreign exchange controls, if any,
including advice with respect to entering into forward foreign exchange
contracts;
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<PAGE> 4
(c) furnish the Adviser and each Fund with advice as to the
manner in which voting rights, subscription rights, rights to consent to
corporate action and any other rights pertaining to each Fund's Foreign Assets
shall be exercised;
(d) furnish the Adviser with research, economic and statistical
data in connection with each Fund's investments and investment policies
respecting Foreign Assets;
(e) submit such reports relating to the valuation of each Fund's
securities consisting of Foreign Assets, including forward foreign exchange
contracts relating to such Foreign Assets, as the Adviser may reasonably
request;
(f) subject to prior consultation with the Adviser, engage in
negotiations relating to each Fund's investments in Foreign Assets with issuers,
investment banking firms, securities brokers or dealers and other institutions
or investors;
(g) consistent with the provisions of Section 8 of this Agreement,
place orders for the purchase, sale or exchange of portfolio securities
consisting of Foreign Assets for each Fund's account with brokers or dealers
selected by the Adviser or the Sub-Adviser, provided that in connection with the
placing of such orders and the selection of such brokers or dealers the
Sub-Adviser shall seek to obtain execution and pricing within the policy
guidelines determined by the Trustees and set forth in the Prospectus and
Statement of Additional Information of each Fund.
(h) from time to time or at any time requested by the Adviser or
the Trustees, make reports to the Adviser or the Trust, as requested, of the
Sub-Adviser's performance of the foregoing services;
(i) subject to the supervision of the Adviser, maintain and
preserve the records required by the Investment Company Act of 1940 to be
maintained by the Sub-Adviser (the Sub-Adviser agrees that such records are the
property of the Trust and will be surrendered to the Trust promptly upon request
therefor);
(j) obtain and evaluate such information relating to economies,
industries, businesses and securities markets, as well as portfolio securities
of each Fund, as the Sub-Adviser may deem necessary or useful in the discharge
of its duties hereunder;
(k) give instructions to the custodian and any sub-custodian of
each Fund as to deliveries of securities to and from such custodian or
sub-custodian, transfer of currencies and payments of cash for the account of
each Fund, and advise the Adviser on the same day such instructions are given;
and
(l) cooperate generally with each Fund and the Adviser to provide
information necessary for the preparation of registration statements and
periodic reports to be filed with the Securities and Exchange Commission,
including Forms N-1A and N-1R, periodic statements, shareholder communications
and proxy materials furnished to holders of shares of the Funds,
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<PAGE> 5
filings with state "blue sky" authorities and with United States and foreign
agencies responsible for tax matters, and other reports and filings of like
nature.
3. Allocation of Assets. Subject to the review of the Trustees,
the Adviser, in consultation with the Sub-Adviser, shall determine at least
quarterly the percentage of each Fund's assets that shall be allocated to the
Adviser or the Sub-Adviser for investment management (the "Asset Allocation")
and the manner in which such Asset Allocation in general is to be achieved by
adjustments to each Fund's existing portfolio of securities. The Asset
Allocation will specify the percentage of assets of each Fund allocated to the
Adviser or the Sub-Adviser for management on the effective date of such
determination and will apply to cash inflow and outflow thereafter until the
Asset Allocation is next redetermined. If the Adviser and the Sub-Adviser cannot
agree on an Asset Allocation, the Adviser has the right to make the final
determination, subject to review by the Trustees.
4. Expenses Paid by the Sub-Adviser. The Sub-Adviser will pay
the cost of maintaining the staff and personnel necessary for it to perform its
obligations under this Agreement, the expenses of office rent, telephone,
telecommunications and other facilities it is obligated to provide in order to
perform the services specified in Section 2, and any other expenses incurred by
it in connection with the performance of its duties hereunder.
5. Expenses of the Funds Not Paid by the Sub-Adviser. The
Sub-Adviser will not be required to pay any expenses which this Agreement does
not expressly state shall by payable by it. In particular, and without limiting
the generality of the foregoing but subject to the provisions of Section 4, the
Sub-Adviser will not be required to pay:
(a) the compensation and expenses of Trustees of the Trust, and
of independent advisers, independent contractors, consultants, managers and
other agents employed by the Trust or any Fund other than through the
Sub-Adviser;
(b) legal, accounting and auditing fees and expenses of the Trust
or the Funds;
(c) the fees or disbursements of custodians, sub-custodians and
depositories of the Trust or any Fund's assets, transfer agents, disbursing
agents, plan agents and registrars;
(d) taxes and governmental fees assessed against the Trust's
assets and payable by the Trust;
(e) the cost of preparing and mailing dividends, distributions,
reports, notices and proxy materials to shareholders of the Trust and any Fund,
except that the Sub-Adviser shall bear the costs of providing the information
referred to in Section 2(1);
(f) brokers' commissions and underwriting fees;
(g) fees and other expenses related to foreign currency
transactions, including entering into forward foreign exchange contracts; and
4
<PAGE> 6
(h) the expense of periodic calculations of the net asset value
of any Fund's shares.
6. Compensation of the Sub-Adviser. For all services to be
rendered, facilities furnished and expenses paid or assumed by the Sub-Adviser
as herein provided, for each Fund, the Adviser will pay the Sub-Adviser
quarterly, based on the average daily net asset value of such Fund for the
preceding quarter, a fee at the annual rate of .50% of the portion of the
average daily net asset value of such Fund during such quarter that does not
exceed $200,000,000, and .4375% of the portion, if any, of the average daily net
asset value of such Fund during such quarter that is in excess of $200,000,000,
computed and paid in United Stated dollars. No Fund shall be liable to the
Sub-Adviser for the Sub-Adviser's compensation hereunder.
7. Other Activities of the Sub-Adviser and Its Affiliates.
Nothing herein contained shall prevent the Sub-Adviser or any of its affiliates
or associates from engaging in any other business or from acting as investment
adviser or investment manager for any other person or entity, whether or not
having investment policies or portfolios similar to the Trust or the Funds,
except that, without the written consent of the Adviser, which consent shall not
be unreasonably withheld, the Sub-Adviser shall not act as investment manager
for or provide investment advice to any other investment company registered
under the Investment Company Act of 1940 with investment objectives and policies
similar to the Trust or the Funds'. It is specifically understood that officers,
directors and employees of the Sub-Adviser and those of its affiliates may
engage in providing portfolio management services and advice to other investment
advisory clients of the Sub-Adviser or of its affiliates.
8. Avoidance of Inconsistent Position, etc. In connection with
purchases or sales of portfolio securities for the account of the Trust or any
Fund, neither the Sub-Adviser nor any of its directors, officers or employees
will act as principal or agent or receive any commission. The Sub-Adviser shall
adopt and implement policies and procedures substantially similar to those
contained in the Adviser's Code of Ethics (a copy of which has been furnished to
the Sub-Adviser by the Adviser), which shall apply to the Sub-Adviser, its
officers, directors and employees. The Sub-Adviser shall not knowingly recommend
that the Trust purchase, sell or retain securities of any issuer in which the
Sub-Adviser or any of its affiliates has a financial interest without obtaining
prior approval of the Adviser prior to the execution of any such transaction.
For purposes of the foregoing sentence, the term "affiliate" shall not mean any
client of the Sub-Adviser. If any occasion should arise in which the Sub-Adviser
advises persons concerning the shares of the Trust, the Sub-Adviser will act
solely on its own behalf and not in any way on behalf of the Trust.
9. No Partnership or Joint Venture. The Trust, the Funds, the
Adviser, and the Sub-Adviser are not partners of or joint venturers with each
other and nothing herein shall be construed so as to make them such partners or
joint venturers or impose any liability as such on any of them.
10. Limitation of Liability of the Sub-Adviser. The Sub-Adviser
shall not be liable for any error of judgment or mistake of law or for any loss
suffered by the Trust or the Funds or the
5
<PAGE> 7
Adviser in connection with the matters to which this Agreement relates, except a
loss resulting from willful misfeasance, bad faith, or gross negligence on the
Sub-Adviser's part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement. Any person, even
though also employed by the Sub-Adviser, who may be or become an employee of and
paid by the Trust or the Funds shall be deemed, when acting within the scope of
his employment by the Trust or the Funds, to be acting in such employment solely
for the Trust or the Funds and not as the Sub-Adviser's employee or agent.
11. Duration and Termination of this Agreement. This Agreement
shall remain in force until the second anniversary of the date upon which this
Agreement was executed by the parties hereto, and from year to year thereafter,
but only so long as such continuance is specifically approved at least annually
by (a) a majority of the Trustees who are not interested persons of the Adviser,
of the Sub-Adviser or (other than as Trustees) of the Trust, cast in person at a
meeting called for the purpose of voting on such approval, and (b) either (i)
the Trustees or (ii) with respect to each Fund, a majority of the outstanding
voting securities of such Fund. This Agreement may, on 60 days' written notice,
by terminated at any time without the payment of any penalty by the Trust or the
Funds by vote, with respect to each Fund, of a majority of the outstanding
voting securities of such Fund, by the Adviser or by the Sub-Adviser.
Termination of this Agreement with respect to a Fund shall not be deemed to
terminate or otherwise invalidate any provision of any contract between you and
any other series of the Trust. This Agreement shall automatically terminate in
the event of its assignment or upon the termination of the Adviser's Investment
Management Contract with the Trust. In interpreting the provisions of this
Section 11, the definitions contained in Section 2(a) of the Investment Company
Act of 1940, as amended (particularly the definitions of "assignment"
"interested person," or "voting security"), shall be applied.
12. Amendment of This Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by an
instrument in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, and no amendment, transfer,
assignment, sale, hypothecation or pledge of this Agreement shall be effective
until approved by (a) the Trustees, including a majority of the Trustees who are
not interested persons of the Adviser, of the Sub-Adviser or (other than as
Trustees) of the Trust or any Fund, cast in person at a meeting called for the
purpose of voting on such approval, and (b) with respect to each Fund, a
majority of the outstanding voting securities of such Fund, as defined in the
Investment Company Act of 1940, as amended, provided that no approval shall be
required pursuant to this clause (b) in respect of any contract between you, the
Adviser and the holders of outstanding voting securities of any series of the
Trust other than the Funds.
13. Miscellaneous. The options in this Agreement are included for
convenience of reference only and in no way define or delimit any of the
provisions hereof or otherwise affect their construction or effect. This
Agreement may be executed simultaneously in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The name John Hancock World Trust is the
designation of the Trustees under the Declaration of Trust, dated August 25,
1986, as amended from time to time. The Declaration of Trust has been filed with
the Secretary of State of the Commonwealth of
6
<PAGE> 8
Massachusetts. The obligations of the Trust and the Funds are not personally
binding upon, nor shall resort be had to the private property of, any of the
Trustees, shareholders, officers, employees, or agents of the Trust or the
Funds, but only the Trust's property shall be bound.
14. Governing Law. This Agreement shall be construed in
accordance with the laws of the Commonwealth of Massachusetts and the applicable
provisions of the Investment Company Act of 1940.
Yours very truly,
JOHN HANCOCK ADVISERS, INC.
BY /s/ R. B. Oliver
----------------
Vice Chairman of the
Board, President and Chief
Executive Officer
The foregoing contract
is hereby agreed to as
of the date hereof.
JOHN HANCOCK WORLD TRUST
- --World Bond Portfolio
- --Pacific Basin Equities Portfolio
BY /s/ R. B. Oliver
----------------
Chairman of the Board
and President
JOHN HANCOCK ADVISERS INTERNATIONAL, LIMITED
By /s/ R. B. Oliver
----------------
Chairman of the Board
7
<PAGE> 1
Exhibit 5e
JOHN HANCOCK ADVISERS, INC.
Boston, Massachusetts
September 1, 1994
Indosuez Asia Advisers, Ltd.
One Exchange Square
Suite 2606-2608
Hong Kong
SUB-ADVISORY AGREEMENT
Dear Sirs:
John Hancock Freedom Pacific Basin Equities Fund (the "Fund"), which is
a series of John Hancock World Fund (the "Trust") has been organized under the
laws of the Commonwealth of Massachusetts to engage in the business of an
investment company. The Trust's shares of beneficial interest may be classified
into series and classes, each series representing the entire undivided interest
in a separate portfolio of assets. As of the date hereof, the Fund has three
classes of shares.
The Fund's Board of Trustees of the Trust (the "Trustees") and the
Fund's shareholders have approved the selection of John Hancock Advisers, Inc.
(the "Adviser") to provide overall investment advice and management for the
Fund, and to provide certain other services, under the terms and conditions
provided in the Investment Management Contract, dated May 5, 1987, as amended
December 19, 1989, between the Fund and the Adviser (the "Investment Management
Contract").
The Adviser and the Fund have selected Indosuez Asia Advisers, Ltd.
(the "Sub-Adviser") to provide the Adviser and the Fund with the advice and
services set forth below, and the Sub-Adviser is willing to provide such advice
and services, subject to the review of the Fund and the overall supervision of
the Adviser, under the terms and conditions hereinafter set forth. The
Sub-Adviser hereby represents and warrants that it is registered as an
investment adviser under the Investment Advisers Act of 1940, as amended.
Accordingly, the Adviser agrees with the Sub-Adviser as follows:
1. DELIVERY OF DOCUMENTS. The Adviser has furnished the Sub-Adviser with
copies, properly certified or otherwise authenticated, of each of the following:
(a) The Amended and Restated Declaration of Trust of the Trust
dated February 28, 1992 (the "Declaration").
(b) By-Laws of the Trust as in effect on the date hereof.
(c) Resolutions of the Board of Trustees approving the form of
this Agreement and resolutions adopted by the shareholders of
the Fund approving the form of this Agreement.
<PAGE> 2
(d) Resolutions of the Board of Trustees selecting the Adviser as
investment adviser to the Fund and approving the form of the
Investment Management Contract and resolutions adopted by the
shareholders of the Fund approving the form of the Investment
Management Contract.
(e) The Adviser's Investment Management Contract.
(f) Commitments, limitations and undertakings made by the Trust to
state "blue sky" authorities for the purpose of qualifying
shares of the Fund for sale in such states.
(g) The Fund's portfolio compliance checklists.
(h) The Fund's Prospectus and Statement of Additional Information.
(i) The Trust's Code of Ethics.
The Adviser will furnish the Sub-Adviser from time to time with copies,
properly certified or otherwise authenticated, of all amendments of or
supplements to the foregoing, if any.
2. INVESTMENT SERVICES AND DUTIES. The Sub-Adviser will use its best
efforts to provide to the Fund continuing and suitable investment advice with
respect to investments, consistent with its investment policies, objectives and
restrictions as set forth in the Fund's Prospectus and Statement of Additional
Information. In the performance of the Sub-Adviser's duties hereunder, subject
always to the provisions contained in the documents delivered to the Sub-Adviser
pursuant to Section 1 above, as each of the same may from time to time be
amended or supplemented, the Sub-Adviser will, at its own expense:
(a) furnish the Adviser and the Fund with advice and
recommendations, consistent with the investment policies,
objectives and restrictions of the Fund as set forth above,
with respect to the purchase, holding and disposition of
portfolio securities including the purchase and sale of
options.
(b) furnish the Adviser and the Fund with advice as to the manner
in which voting rights, subscriptions rights, rights to
consent to corporate action and any other rights pertaining to
the Fund's assets shall be exercised, the Trust having the
responsibility to exercise such voting and other rights on
behalf of the Fund;
(c) furnish the Adviser and each Fund with research, economic and
statistical data in connection with the Fund's investments
and investment policies;
(d) submit such reports relating to the valuation of the Fund's
securities as the Adviser may reasonable request;
(e) consistent with the provisions of Section 7 of this Agreement,
place orders for the purchase, sale or exchange of portfolio
securities for the Fund's account with brokers or dealers
selected by the Adviser or the Sub-Adviser, provided that in
connection with the placing of such orders and the selection
of such brokers or
2
<PAGE> 3
dealers the Sub-Adviser shall seek to obtain best price and
execution, except as otherwise provided in the Prospectus and
Statement of Additional Information of the Fund;
(f) from time to time or at any time requested by the Adviser or
the Trust on behalf of the Fund, make reports to the Adviser
or the Trust, as requested, of the Sub-Adviser's performance
of the foregoing services;
(g) subject to the supervision of the Adviser, maintain and
preserve the records required by the Investment Company Act of
1940 to be maintained by the Sub-Adviser (the Sub-Adviser
agrees that such records are the property of the Fund and
copies will be surrendered to the Trust on behalf of the Fund
promptly upon request therefor);
(h) give instructions to the custodian (including any
subcustodian) of the Fund as to deliveries of securities to
and from such custodian and payments of cash for the account
of the Fund, and advise the Adviser on the same day such
instructions are given; and
(i) cooperate generally with the Fund and the Adviser to provide
information necessary for the preparation of registration
statements and periodic reports to be filed with the
Securities and Exchange Commission, including registration
statements on Form N-1A, semi-annual reports on Form N-SAR,
periodic statements, shareholder communications and proxy
materials furnished to holders of shares of the Fund, filings
with state "blue sky" authorities and with United States and
foreign agencies responsible for tax matters, and other
reports and filings of like nature.
(j) In the performance of its duties hereunder, the Sub-Adviser is
and shall be an independent contractor and unless otherwise
expressly provided or authorized shall have no authority to
act for or represent the Fund or Trust in any way or otherwise
be deemed to be an agent of the Fund, the Trust or of the
Adviser.
3. EXPENSES PAID BY THE SUB-ADVISER. The Sub-Adviser will pay the cost of
maintaining the staff and personnel necessary for it to perform its obligations
under this Agreement, the expenses of office rent, telephone, telecommunications
and other facilities required by it to perform the services specified in Section
2, and any other expenses, including legal, audit and professional fees and
expenses, incurred by it in connection with the performance of its duties
hereunder.
4. EXPENSES OF THE FUNDS NOT PAID BY THE SUB-ADVISER. The Sub-Adviser
will not be required to pay any expenses which this Agreement does not expressly
state shall by payable by the Sub-Adviser. In particular, and without limiting
the generality of the foregoing but subject to the provisions of Section 3, the
Sub-Adviser will not be required to pay any Fund expenses or to reimburse the
Adviser for any such expenses that the Adviser is required to pay.
5. COMPENSATION OF THE SUB-ADVISER. For all services to be rendered,
facilities furnished and expenses paid or assumed by the Sub-Adviser as herein
provided, for the Fund, the Adviser
3
<PAGE> 4
will pay the Sub-Adviser quarterly, in arrears a fee at the annual rate of (a)
.30% of the first $100 million of the Fund's average daily net assets managed by
the Sub-Adviser plus (b) the following additional amount, based on a percentage
of the gross management fee received by the Adviser pursuant to the Investment
Management Contract with respect to the Fund's average daily net assets in
excess of $100 million which are managed by the Sub-Adviser:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS PERCENTAGE OF GROSS
MANAGED BY SUB-ADVISER MANAGEMENT FEE
<S> <C>
More than $100 million up to $250 million 40%
More than $250 million 50%
</TABLE>
The Sub-Adviser will receive a pro rata portion of such quarterly fee for any
periods in which the Sub-Adviser advises the Fund less than a full quarter. The
Sub-Adviser understands and agrees that neither the Trust nor the Fund has any
liability for the Sub-Adviser's compensation hereunder. Calculations of the
Sub-Adviser's fee will be based on average net asset values as provided by the
Adviser.
6. OTHER ACTIVITIES OF THE SUB-ADVISER AND ITS AFFILIATES. The Adviser
and Sub-Adviser may enter into a separate agreement which limits the ability of
the Sub-Adviser to act as Sub-Adviser for certain other investment companies and
advisory clients. However, nothing in this Agreement shall prevent the
Sub-Adviser or any of its affiliates or associates from engaging in any other
business or from acting as investment adviser or investment manager for any
other person or entity, whether or not having investment policies or portfolios
similar to the Fund. Subject to the provisions of such separate agreement, it is
specifically understood that officers, directors and employees of the
Sub-Adviser and those of its affiliates may engage in providing portfolio
management services and advice to other investment advisory clients of the
Sub-Adviser or of its affiliates.
7. AVOIDANCE OF INCONSISTENT POSITION. In connection with purchases or
sales of portfolio securities for the account of the Fund, neither the
Sub-Adviser nor any of its directors, officers or employees will act as
principal or agent or receive any commission. The Sub-Adviser shall not
knowingly recommend that the Fund purchase, sell or retain securities of any
issuer in which the Sub-Adviser has a financial interest without obtaining prior
approval of the Adviser prior to the execution of any such transaction. Access
persons (as defined in Rule 17j-1 under the Investment Company Act of 1940, as
amended) of the Sub-Adviser will provide personal trading reports to a
designated representative of the Adviser in accordance with the Trust's Code of
Ethics.
8. NO PARTNERSHIP OR JOINT VENTURE. The Adviser and the Sub-Adviser are
not currently partners of or joint venturers with each other and nothing herein
shall be construed so as to make them such partners or joint venturers or impose
any liability as such on any of them.
9. LIMITATION OF LIABILITY OF THE SUB-ADVISER. The Sub-Adviser shall not
be liable for any error of judgment or mistake of law or for any loss suffered
by the Trust, the Fund or the Adviser in connection with the matters to which
this Agreement relates, except a loss resulting from willful misfeasance, bad
faith, or gross negligence on the Sub-Adviser's part in the performance of its
duties or from reckless disregard by it of its obligations and duties under this
Agreement.
4
<PAGE> 5
10. DURATION AND TERMINATION OF THIS AGREEMENT. Unless terminated as
provided below, this Agreement shall remain in force until June 30, 1996, and
from year to year thereafter, but only so long as such continuance is
specifically approved at least annually by (a) a majority of the Trustees of the
Trust who are not interested persons of the Adviser, of the Sub-Adviser or of
the Trust (other than as Board members), cast in person at a meeting called for
the purpose of voting on such approval, and (b) either (i) the Trustees of the
Trust or (ii) a majority of the outstanding voting securities of the Fund. This
Agreement may, on 60 days' written notice, be terminated at any time, without
the payment of any penalty by vote of a majority of the outstanding voting
securities of the Fund, by the Adviser or by the Sub-Adviser. Termination of
this Agreement shall not be deemed to terminate or otherwise invalidate any
other contract between you and any other series of the Trust. This Agreement
shall automatically terminate in the event of its assignment or upon the
termination of the Adviser's Investment Management Contract. In interpreting the
provisions of this Section 10, the definitions contained in Section 2(a) of the
Investment Company Act of 1940, as amended (particularly the definitions of
"assignment", "interested person," and "voting security"), shall be applied.
11. AMENDMENT OF THIS AGREEMENT. No provision of this Agreement may be
changed or waived orally, but only by an instrument in writing signed by the
party against which enforcement of the change or waiver is sought, and no
amendment, transfer, assignment, sale, hypothecation or pledge of this Agreement
shall be effective until approved by (a) the Board of Trustees of the Trust,
including a majority of the Trustees who are not interested persons of the
Adviser, the Sub-Adviser or the Trust, cast in person at a meeting called for
the purpose of voting on such approval, and (b) a majority of the outstanding
voting securities of the Fund, as defined in the Investment Company Act of 1940,
as amended.
12. MISCELLANEOUS.
(a) The captions in this Agreement are included for convenience of
reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or
effect. This Agreement may be executed simultaneously in two
or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
(b) Nothing herein contained shall limit or restrict the
Sub-Adviser or any of its officers, affiliates or employees
from buying, selling or trading in any securities for its or
their own account or accounts if done in full compliance with
the Trust's Code of Ethics. The Trust acknowledges that the
Adviser or sub-advisers engaged by it and their respective
officers, affiliates and employees, and their other clients
may at any time, have, acquire, increase, decrease or dispose
of positions in investments which are at the same time being
acquired or disposed of by the Fund.
(c) Any of the shareholders, Trustees, officers and employees of
the Trust may be a shareholder, director, officer or employee
of, or be otherwise interested in, the Sub-Adviser, any
interested person of the Sub-Adviser, any organization in
which the Sub-Adviser may have an interest or any organization
which may have an interest in the Sub-Adviser, and the
Sub-Adviser, any such interested person or any such
organization may have an interest in the Trust. Subject to the
provisions of any separate agreement between the Adviser and
the Sub-Adviser, the Sub-
5
<PAGE> 6
Adviser, the Adviser and the Trust may have advisory,
management, service or other contracts with other individuals
or entities, and may have other interests and businesses. When
a security proposed to be purchased or sold for the Fund is
also to be purchased or sold for other accounts managed by the
Sub-Adviser at the same time, the Sub-Adviser shall make such
purchases or sales on a pro-rata, rotating or other equitable
basis so as to avoid any one account's being preferred over
any other account.
13. OVERNING LAW. This Agreement shall be construed in accordance with
the laws of the Commonwealth of Massachusetts and the applicable provisions of
the Investment Company Act of 1940.
Yours very truly,
JOHN HANCOCK ADVISERS, INC.
By: /s/Edward J. Boudreau, Jr.
--------------------------
Chairman of the Board, President and
Chief Executive Officer
INDOSUEZ ASIA ADVISERS, LTD.
By: /s/Ian McEvatt
--------------
President
6
<PAGE> 1
Exhibit 6
August 1, 1991
John Hancock Broker Distribution Services, Inc.
Boston, Massachusetts
Distribution Agreement
Dear Sir:
John Hancock World Fund (the "Fund") has been organized as a business trust
under the laws of the Commonwealth of Massachusetts to engage in the business of
an investment company. The Fund's Board of Directors has selected you to act as
principal underwriter (as such term is defined in Section 2(a)(29) of the
Investment Company Act of 1940, as amended) of the shares of beneficial interest
("shares") of the Fund and you are willing, as agent for the Fund, to sell the
shares to the public, to broker-dealers or to both, in the manner and on the
conditions hereinafter set forth. Accordingly, the Fund hereby agrees with you
as follows:
1. Delivery of Documents. The Fund will furnish you promptly with copies,
properly certified or otherwise authenticated, of any registration statements
filed by it with the Securities and Exchange Commission under the Securities Act
of 1933, as amended, or the Investment Company Act of 1940, as amended, together
with any financial statements and exhibits included therein, and all amendments
or supplements thereto hereafter filed.
2. Registration and Sale of Additional Shares. The Fund will from time to
time use its best efforts to register under the Securities Act of 1933, as
amended, such shares not already so registered as you may reasonably be expected
to sell as agent on behalf of the Fund. This Agreement relates to the issue and
sale of shares that are duly authorized and registered and available for sale by
the Fund if, but only if, the Fund sees fit to sell them. You and the Fund will
cooperate in taking such action as may be necessary from time to time to qualify
shares for sale in Massachusetts and in any other states mutually agreeable to
you and the Fund, and to maintain such qualification if and so long as such
shares are duly registered under the Securities Act of 1933, as amended.
3. Solicitation of Orders. You will use your best efforts (but only in states
in which you may lawfully do so) to obtain from investors unconditional orders
for shares authorized for issue by the Fund and registered under the Securities
Act of 1933, as amended, provided that you may in your discretion refuse to
accept orders for such shares from any particular applicant.
4. Sale of Shares. Subject to the provisions of Sections 5 and 6 hereof and to
such minimum purchase requirements as may from time to time be currently
indicated in the Fund's prospectus, you are authorized to sell as agent on
behalf of the Fund authorized and issued shares registered under the Securities
Act of 1933, as amended. Such sales may be made by you on behalf of the Fund by
accepting unconditional orders to purchase such shares placed with your
investors. The sales price to the public of such shares shall be the public
offering price as defined in Section 6 hereof.
5. Sale of Shares to Investors by the Fund. Any right granted to you to accept
orders for shares or make sales on behalf of the Fund will not apply to shares
issued in connection with the merger or consolidation of any other investment
company with the Fund or its acquisition, by purchase or otherwise, of all or
substantially all the assets of any investment company or substantially all the
outstanding shares of any such company, and such right shall not apply to shares
that may be offered or otherwise issued by the Fund to shareholders by virtue of
their being shareholders of the Fund.
<PAGE> 2
6. Public Offering Price. All shares sold by you as agent for the Fund will
be sold at the public offering price, which will be determined in the manner
provided in the Fund's prospectus or statement of additional information, as now
in effect or as it may be amended.
7. No Sales Discount. The Fund shall receive the applicable net asset value
on all sales of shares by you as agent of the Fund.
8. Delivery of Payments. You will deliver to the Transfer Agent all payments
made pursuant to orders accepted by you, and accompanied by proper applications
for the purchase of shares, no later than the first business day following the
receipt by you in your home office of such payments and applications.
9. Suspension of Sales. If and whenever a suspension of the right of
redemption or a postponement of the date of payment or redemption has been
declared pursuant to the Fund's Declaration of Trust and has become effective,
then, until such suspension or postponement is terminated, no further orders for
shares shall be accepted by you except such unconditional orders placed with you
before you have knowledge of the suspension. The Fund reserves the right to
suspend the sale of shares and your authority to accept orders for shares on
behalf of the Fund if, in the judgment of a majority of the Fund's Board of
Trustees, it is in the best interests of the Fund to do so, such suspension to
continue for such period as may be determined by such majority; and in that
event, no shares will be sold by the Fund or by you on behalf of the Fund while
such suspension remains in effect except for shares necessary to cover
unconditional orders accepted by you before you had knowledge of the suspension.
10. Expenses. The Fund will pay (or will enter into arrangements providing
that persons other than you will pay) all fees and expenses in connection with
the preparation and filing of any registration statement and prospectus or
amendments thereto under the Securities Act of 1933, as amended, covering the
issue and sale of shares and in connection with the qualification of shares for
sale in the various states in which the fund shall determine it advisable to
qualify such shares for sale. It will also pay the issue taxes or (in the case
of shares redeemed) any initial transfer taxes thereon. You will pay all
expenses of printing prospectuses and other sales literature, all fees and
expenses in connection with your qualification as a dealer in various states,
and all other expenses in connection with the sale and offering for sale of the
shares of the Fund which have not been herein specifically allocated to the
Fund.
11. Conformity with Law. You agree that in selling the shares you will duly
conform in all respects with the laws of the United States and any state in
which such shares may be offered for sale by you pursuant to this Agreement.
12. Indemnification. You agree to indemnify and hold harmless the Fund and
each of its Board members and officers and each person, if any, who controls the
Fund within the meaning of Section 15 of the Securities Act of 1933, as amended,
against any and all losses, claims, damages, liabilities or litigation
(including legal and other expenses) to which the Fund or such Board members,
officers or controlling person may become subject under such Act, under any
other statute, at common law or otherwise, arising out of the acquisition of any
shares by any person which (a) may be based upon any wrongful act by you or any
of your employees or representatives or (b) may be based upon any untrue
statement or alleged untrue statement of a material fact contained in a
registration statement, prospectus or statement of additional information
covering shares of the Fund or any amendment thereof or supplement thereto or
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading if
such statement or omission was made in reliance upon information furnished or
confirmed in writing to the Fund by you, or (c) may be incurred or arise by
reason of your acting as the Fund's agent instead of purchasing and reselling
shares as principal in distributing shares to the public, provided that in no
case is your indemnity in favor of a Board member or officer of the Fund or any
other person deemed to protect such Board member or officer of the Fund or other
person against any liability to which any such person would otherwise be subject
by reason of willful misfeasance, bad faith, or gross negligence in the
performance of his duties or by reason of his reckless disregard of obligations
and duties under this Agreement.
<PAGE> 3
You are not authorized to give any information or to make any
representations on behalf of the Fund or in connection with the sale of shares
other than the information and representations contained in a registration
statement, prospectus, or statement of additional information covering shares,
as such registration statement, prospectus and statement of additional
information may be amended or supplemented from time to time. No person other
than you is authorized to act as principal underwriter for the Fund.
13. Duration and Termination of this Agreement. This Agreement shall remain in
force until the conclusion of the first meeting of shareholders of the Fund
following the first public offering of shares and, if approved at that meeting,
from year to year thereafter, but only so long as such continuance is
specifically approved at least annually by (a) a majority of the Board of
Trustees who are not interested persons of you (other than as Board members) or
of the Fund, cast in person at a meeting called for the purpose of voting on
such approval, and (b) either (i) the Board of Trustees of the Fund, or (ii) a
majority of the outstanding voting securities of the Fund. This Agreement may,
on 60 days' written notice, be terminated at any time, without the payment of
any penalty, by the Board of Trustees of the Fund, by a vote of a majority of
the outstanding voting securities of the Fund, or by you. This Agreement will
automatically terminate in the event of its assignment by you. In interpreting
the provisions of this Section 13, the definitions contained in Section 2(a) of
the Investment Company Act of 1940 (particularly the definitions of "interested
person", "assignment" and "voting security") shall be applied.
14. Amendment of this Agreement. No provision of this Agreement may be
changed, waived, discharged or terminated orally, but only by an instrument in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought. If the Fund should at any time deem it
necessary or advisable in the best interests of the Fund that any amendment of
this agreement be made in order to comply with the recommendations or
requirements of the Securities and Exchange Commission or other governmental
authority or to obtain any advantage under state or federal tax laws and should
notify you of the form of such amendment, and the reasons therefor, and if you
should decline to assent to such amendment, the Fund may terminate this
agreement forthwith. If you should at any time request that a change be made in
the Fund's Declaration of Trust or By-Laws, or in its methods of doing business,
in order to comply with any requirements of federal law or regulations of the
Securities and Exchange Commission or of a national securities association of
which you are or may be a member, relating to the sale of shares, and the Fund
should not make such necessary change within a reasonable time, you may
terminate this Agreement forthwith.
<PAGE> 4
15. Miscellaneous. The captions in this Agreement are included for convenience
of reference only and in no way define or limit any of the provisions be
executed simultaneously in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
Very truly yours,
JOHN HANCOCK WORLD FUND
By: /s/Edward J. Boudreau, Jr.
--------------------------
Chairman
The foregoing Agreement is hereby
accepted as of the date hereof.
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By: /s/C. Troy Shaver, Jr.
----------------------
President
<PAGE> 1
Exhibit 6a
October 1, 1991
C. Troy Shaver, Jr.
President
John Hancock Broker Distribution Services, Inc.
101 Huntington Avenue
Boston, MA 02199
Subject: John Hancock World Fund --
John Hancock Global Rx Fund
Dear Mr. Shaver:
Pursuant to Article 2 of the Distribution Agreement dated August 1, 1991,
between John Hancock World Fund (the "Trust") and John Hancock Broker
Distribution Services, Inc., ("Broker Services"), the Trust hereby notifies you
that it desires to have Broker Services render services as principal underwriter
for John Hancock Global Rx Fund, a new series of the Trust, and that such series
of shares become a Fund under the Agreement.
If Broker Services agrees to provide such services, please sign below and return
a signed copy to me.
John Hancock
Distribution Services, Inc. John Hancock World Fund
By: /s/C. Troy Shaver, Jr. By: /s/Thomas H. Drohan
---------------------- -------------------
President Senior Vice President and Secretary
Attest: /s/Thomas H. Connors Attest: /s/Thomas H. Connors
-------------------- --------------------
<PAGE> 1
Exhibit 6b
September 30, 1994
C. Troy Shaver, Jr.
President
John Hancock Broker Distribution Services, Inc.
101 Huntington Avenue
Boston, MA 02199
Subject: John Hancock World Fund--
John Hancock Global Retail Fund
Dear Mr. Shaver:
Pursuant to Article 2 of the Distribution Agreement dated August 1, 1991,
between John Hancock World Fund (the "Trust") and John Hancock Broker
Distribution Services, Inc., ("Broker Services"), the Trust hereby notifies you
that it desires to have Broker Services render services as principal underwriter
for John Hancock Global Retail Fund, a new series of the Trust, and that such
series of shares become a Fund under the Agreement.
If Broker Services agrees to provide such services, please sign below and return
a signed copy to me.
John Hancock Broker
Distribution Services, Inc. John Hancock World Fund
By: /s/C. Troy Shaver, Jr. By: /s/Thomas H. Drohan
---------------------- -------------------
Thomas H. Drohan
Senior Vice President and Secretary
Attest: /s/Avery P. Maher Attest: /s/Carmen M. Pelissier
----------------- ----------------------
<PAGE> 1
EXHIBIT 6c
SOLICITING DEALER AGREEMENT
[LOGO]
JOHN HANCOCK FUNDS, INC.
BOSTON -- MASSACHUSETTS -- 02199-7603
<PAGE> 2
JOHN HANCOCK FUNDS, INC.
101 HUNTINGTON AVENUE
BOSTON, MA 02199-7603
SOLICITING DEALER AGREEMENT
Date
------------------------------
John Hancock Funds, Inc. ("the Distributor" or "Distributor") is the
principal distributor of the shares of beneficial interest (the "securities")
of each of the John Hancock Funds, ("We" or "us"), (the "Funds"). Such Funds
are those listed on Schedule A hereto which may be amended or supplemented from
time to time by the Distributor to include additional Funds for which the
Distributor is the principal distributor. You represent that you are a member
of the National Association of Securities Dealers, Inc., (the "NASD") and,
accordingly, we invite you to become a non-exclusive soliciting dealer to
distribute the securities of the Funds and you agree to solicit orders for the
purchase of the securities on the following terms. Securities are offered
pursuant to each Fund's prospectus and statement of additional information, as
such prospectus and statement of additional information may be amended from
time to time. To the extent that the prospectus or statement of additional
information contains provisions that are inconsistent with the terms of this
Agreement, the terms of the prospectus or statement of additional information
shall be controlling.
OFFERINGS
1. You agree to abide by the Rules of Fair Practice of the NASD and to all
other rules and regulations that are now or may become applicable to
transactions hereunder.
2. As principal distributor of the Funds, we shall have full authority to
take such action as we deem advisable in respect of all matters pertaining to
the distribution. This offer of shares of the Funds to you is made only in
such jurisdictions in which we may lawfully sell such shares of the Funds.
3. You shall not make any representation concerning the Funds or their
securities except those contained in the then- current prospectus or
statement of additional information for each Fund.
4. With the exception of listings of product offerings, you agree not to
furnish or cause to be furnished to any person or display, or publish any
information or materials relating to any Fund (including, without limitation,
promotional materials, sales literature, advertisements, press releases,
announcements, posters, signs and other similar materials), except such
information and materials as may be furnished to you by the Distributor or the
Fund. All other materials must receive written approval by the Distributor
before distribution or display to the public. Use of all approved advertising
and sales literature materials is restricted to appropriate distribution
channels.
5. You are not authorized to act as our agent. Nothing shall constitute you
as a syndicate, association, joint venture, partnership, unincorporated
business, or other separate entity or otherwise partners with us, but you shall
be liable for your proportionate share of any tax, liability or expense based
on any claim arising from the sale of shares of the Funds under this Agreement.
We shall not be under any liability to you, except for obligations expressly
assumed by us in this Agreement and liabilities under Section 11(f) of the
Securities Act of 1933, and no obligations on our part shall be implied or
inferred herefrom.
-2-
<PAGE> 3
6. DEALER COMPLIANCE/SUITABILITY STANDARDS (CLASS A AND CLASS B SHARES) -
Certain mutual funds distributed by the Distributor are being offered with two
or more classes of shares of the same investment portfolio ("Fund") - refer to
each Fund prospectus for availability and details. It is essential that the
following minimum compliance/suitability standards be adhered to in offering
and selling shares of these Funds to investors. All dealers offering shares of
the Funds and their associated persons agree to comply with these general
suitability and compliance standards.
SUITABILITY
With two classes of shares of certain funds available to individual
investors, (Class A and Class B), it is important that each investor purchases
not only the fund that best suits his or her investment objective but also the
class of shares that offers the most beneficial distribution financing method
for the investor based upon his or her particular situation and preferences.
Fund share recommendations and orders must be carefully reviewed by you and
your registered representatives in light of all the facts and circumstances, to
ascertain that the class of shares to be purchased by each investor is
appropriate and suitable. These recommendations should be based on several
factors, including but not limited to:
(A) the amount of money to be invested initially and over a period of
time;
(B) the current level of front-end sales load or back-end sales load
imposed by the Fund;
(C) the period of time over which the client expects to retain the
investment;
(D) the anticipated level of yield from fixed income funds' Class A and
Class B shares;
(E) any other relevant circumstances such as the availability of
reduced sales charges under letters of intent and/or rights of
accumulation.
There are instances when one distribution financing method may be more
appropriate than another. For example, shares subject to a front-end sales
charge may be more appropriate than shares subject to a contingent deferred
sales charge for large investors who qualify for a significant quantity
discount on the front-end sales charge. In addition, shares subject to a
contingent deferred sales charge may be more appropriate for investors whose
orders would not qualify for quantity discounts and who, therefore, may prefer
to defer sales charges and also for investors who determine it to be
advantageous to have all of their funds invested without deduction of a
front-end sales commission. However, if it is anticipated that an investor may
redeem his or her shares within a short period of time, the investor may,
depending on the amount of his or her purchase, bear higher distribution
expenses by purchasing contingent deferred sales charge shares than if he or
she had purchased shares subject to a front-end sales charge.
COMPLIANCE
Your supervisory procedures should be adequate to assure that an
appropriate person reviews and approves transactions entered into pursuant to
this Soliciting Dealer Agreement for compliance with the foregoing standards.
In certain instances, it may be appropriate to discuss the purchase with the
registered representatives involved or to review the advantages and
disadvantages of selecting one class of shares over another with the client.
The Distributor will not accept orders for Class B Shares in any Fund from you
for accounts maintained in street name. Trades for Class B Shares will only be
accepted in the name of the shareholder.
7. CLASS C SHARES - Certain mutual funds distributed by the Distributor may be
offered with Class C shares. Refer to each Fund prospectus for availability
and details. Class C shares are designed for institutional investors and
qualified benefit plans, including pension funds, and are sold without a sales
charge or 12b-1 fee. If a commission is paid to you for transactions in Class
C shares, it will be paid by the Distributor out of its own resources.
SALES
8. Orders for securities received by you from investors will be for the sale
of the securities at the public offering price, which will be the net asset
value per share as determined in the manner provided in the relevant Fund's
prospectus, as now in effect or as amended from time to time, next after
receipt by us (or the relevant Fund's transfer agent) of the purchase
application and payment for the securities, plus the relevant sales charges set
forth in the relevant Fund's then- current prospectus (the "Public Offering
Price"). The procedures relating to the handling of orders shall be subject to
our instructions which we will forward from time to time to you. All orders
are subject to acceptance by us, and we reserve the right in our sole
discretion to reject any order.
-3-
<PAGE> 4
In addition to the foregoing, you acknowledge and agree to the initial
and subsequent investment minimums, which may vary from year to year, as
described in the then-current prospectus for each Fund.
9. You agree to sell the securities only (a) to your customers at the public
offering price then in effect, or (b) back to the Funds at the currently quoted
net asset value.
10. The amount of sales charge to be reallowed to you (the "Reallowance") as a
percentage of the offering price is set forth in the then-current prospectus of
each Fund.
If a sales charge on the purchase is reduced in accordance with the
provisions of the relevant Fund's then-current prospectus pertaining to
"Methods of Obtaining Reduced Sales Charges," the Reallowance shall be reduced
pro rata.
11. We shall pay a Reallowance subject to the provisions of this agreement as
set forth in Schedule B hereto on all purchases made by your customers pursuant
to orders accepted by us (a) where an order for the purchase of securities is
obtained by a registered representative in your employ and remitted to us
promptly by you, (b) where a subsequent investment is made to an account
established by a registered representative in your employ or (c) where a
subsequent investment is made to an account established by a broker/dealer
other than you and is accompanied by a signed request from the account
shareholder that your registered representative receive the Reallowance for
that investment and/or for subsequent investments made in such account. If for
any reason, a purchase transaction is reversed, you shall not be entitled to
receive or retain any part of the Reallowance on such purchase and shall pay to
us on demand in full the amount of the Reallowance received by you in
connection with any such purchase. We may withhold and retain from the amount
of the Reallowance due you a sum sufficient to discharge any amount due and
payable by you to us.
12. Certain of the Funds have adopted a plan under Investment Company Act
Rule 12b-1 ("Distribution Plan" as described in the the prospectus). To the
extent you provide distribution and marketing services in the promotion of the
sale of shares of these Funds, including furnishing services and assistance to
your customers who invest in and own shares of such Funds and including, but
not limited to, answering routine inquiries regarding such Funds and assisting
in changing distribution options, account designations and addresses, you may
be entitled to receive compensation from us as set forth in Schedule C hereto.
All compensation, including 12b-1 fees, shall be payable to you only to the
extent that funds are received and in the possession of the Distributor.
13. We will advise you as to the jurisdictions in which we believe the shares
have been qualified for sale under the respective securities or "blue sky" laws
of such jurisdictions, but we assume no responsibility or obligations as to
your right to sell the shares of the Funds in any state or jurisdiction.
14. Orders may be placed through:
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, MA 02199-7603
1-800-338-4265
SETTLEMENT
15. Settlements for wire orders shall be made within five business days after
our acceptance of your order to purchase shares of the Funds. Certificates,
when requested, will be delivered to you upon payment in full of the sum due
for the sale of the shares of the Funds. If payment is not so received or
made, we reserve the right forthwith to cancel the sale, or, at our option, to
liquidate the shares of the Fund subject to such sale at the then prevailing
net asset value, in which latter case you will agree to be responsible for any
loss resulting to the Funds or to us from your failure to make payments as
aforesaid.
-4-
<PAGE> 5
INDEMNIFICATION
16. The parties to this agreement hereby agree to indemnify and hold harmless
each other, their officers and directors, and any person who is or may be
deemed to be a controlling person of each other, from and against any losses,
claims, damages, liabilities or expenses (including reasonable fees of
counsel), whether joint or several, to which any such person or entity may
become subject insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) arise out of or are based upon, (a) any untrue
statement or alleged untrue statement of material fact, or any omission or
alleged omission to state a material fact made or omitted by it herein, or, (b)
any willful misfeasance or gross misconduct by it in the performance of its
duties and obligations hereunder.
17. NSCC INDEMNITY - SHAREHOLDER AND HOUSE ACCOUNTS - In consideration of the
Distributor and John Hancock Investor Services Corporation ("Investor
Services") liquidating, exchanging, and/or transferring unissued shares of the
Funds for your customers without the use of original or underlying
documentation supporting such instructions (e.g., a signed stock power or
signature guarantee), you hereby agree to indemnify the Distributor, Investor
Services and each respective Fund against any losses, including reasonable
attorney's fees, that may arise from such liquidation exchange, and/or
transfer of unissued shares upon your direction. This indemnification shall
apply only to the liquidation, exchange and/or transfer of unissued shares in
shareholder and house accounts executed as wire orders transmitted via NSCC's
Fund/SERVsystem. You represent and warrant to the Funds, the Distributor and
Investor Services that all such transactions shall be properly authorized by
your customers.
The indemnification in this Section 16 shall not apply to any losses
(including attorney's fees) caused by a failure of the Distributor, Investor
Services or a Fund to comply with any of your instructions governing any of the
above transactions, or any negligent act or omission of the Distributor,
Investor Services or a Fund, or any of their directors, officers, employees or
agents. All transactions shall be settled upon your confirmation through NSCC
transmission to Investor Services.
The Distributor, Investor Services or you may revoke the indemnity
contained in this Section 16 upon prior written notice to each of the other
parties hereto, and in the case of such revocation, this indemnity agreement
shall remain effective as to trades made prior to such revocation.
MISCELLANEOUS
18. We will supply to you at our expense additional copies of the prospectus
and statement of additional information for each of the Funds and any printed
information supplemental to such material in reasonable quantities upon
request.
19. Any notice to you shall be duly given if mailed or telegraphed to you at
your address as registered from time to time with the NASD.
20. Miscellaneous provisions, if any, are attached hereto and incorporated
herein by reference.
21. This agreement, which shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, may be terminated by any party hereto at any
time upon written notice.
-5-
<PAGE> 6
SOLICITING DEALER
-------------------------------------------------
Name of Organization
By:-------------------------------------------------
Authorized Signature of Soliciting Dealer
-------------------------------------------------
Please Print or Type Name
-------------------------------------------------
Title
-------------------------------------------------
Print or Type Address
-------------------------------------------------
Telephone Number
Date:
-------------------------------------------------
In order to service you efficiently, please provide the following
information on your Mutual Funds Operations Department:
OPERATIONS MANAGER:
---------------------------------------------
ORDER ROOM MANAGER:
---------------------------------------------
OPERATIONS ADDRESS:
---------------------------------------------
---------------------------------------------
TELEPHONE: FAX:
-------------------------------- ------------------------------
<TABLE>
<S> <C>
TO BE COMPLETED BY: TO BE COMPLETED BY:
JOHN HANCOCK FUNDS, INC. JOHN HANCOCK INVESTOR
SERVICES CORPORATION
BY: BY:
------------------------------------------- -------------------------------------------
- ---------------------------------------------- ----------------------------------------------
TITLE TITLE
</TABLE>
DEALER NUMBER:
------------------------------------
-6-
<PAGE> 7
JOHNHANCOCK
MUTUAL FUNDS
John Hancock Broker Distrubution Services, Inc.
101 Huntington Avenue Boston, MA 02199-7608 1-800-225-5291
/s/ John Hancock
<PAGE> 8
JOHN HANCOCK FUNDS, INC.
SCHEDULE A
DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
<TABLE>
<S> <C>
John Hancock Sovereign Achievers Fund John Hancock National Aviation & Technology Fund
John Hancock Sovereign Investors Fund John Hancock Regional Bank Fund
John Hancock Sovereign Balanced Fund John Hancock Gold and Government Fund
John Hancock Sovereign Bond Fund John Hancock Global Rx Fund
John Hancock Sovereign U.S. Government Income Fund John Hancock Global Technology Fund
John Hancock Special Equities Fund* John Hancock Global Fund
John Hancock Special Opportunities Fund John Hancock Pacific Basin Equities Fund
John Hancock Discovery Fund John Hancock Global Income Fund
John Hancock Growth Fund John Hancock International Fund
John Hancock Strategic Income Fund John Hancock Global Resources Fund
John Hancock Limited-Term Government Fund John Hancock Emerging Growth Fund
John Hancock Cash Management Fund John Hancock Capital Growth Fund
John Hancock Managed Tax-Exempt Fund John Hancock Growth & Income Fund
John Hancock Tax-Exempt Income Fund John Hancock High Yield Bond Fund
John Hancock Tax-Exempt Series Fund John Hancock Investment Quality Bond Fund
John Hancock Special Value Fund John Hancock Government Securities Fund
John Hancock Strategic Short-Term Income Fund John Hancock U.S. Government Fund
John Hancock CA Tax-Free Fund John Hancock Government Income Fund
John Hancock High Yield Tax-Free Fund John Hancock Intermediate Government Fund
John Hancock Tax-Free Bond Fund John Hancock Adjustable U.S. Government Fund
John Hancock U.S. Government Cash Reserve Fund John Hancock Cash Reserve Money Market B Fund
</TABLE>
From time to time John Hancock Funds, Inc., as principal distributor of the
John Hancock funds, will offer additional funds for sale. These funds will
automatically become part of this Agreement and will be subject to all its
provisions unless otherwise directed by John Hancock Funds, Inc.
*Closed to new investors as of 9/30/94
<PAGE> 9
JOHN HANCOCK FUNDS, INC.
SCHEDULE B
DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
I. REALLOWANCE
The Reallowance paid to the selling Brokers for sales of John Hancock
Funds is set forth in each Fund's then- current prospectus. No Commission will
be paid on sales of John Hancock Cash Management Fund or any John Hancock Fund
that is without a sales charge. Purchases of Class A shares of $1 million or
more, or purchases into an account or accounts whose aggregate value of fund
shares is $1 million or more will be made at net asset value with no initial
sales charge. On purchases of this type, John Hancock Funds, Inc. will pay a
commission as set forth in each Fund's then-current prospectus. John Hancock
Funds, Inc. will pay Brokers for sales of Class B shares of the Funds a
marketing fee as set forth in each Fund's then-current prospectus.
<PAGE> 10
JOHN HANCOCK FUNDS, INC.
SCHEDULE C
DATED JANUARY 1, 1995 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
FIRST YEAR SERVICE FEES
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, John Hancock Funds, Inc. will advance to you a First Year
Service Fee related to the purchase of Class A shares (only if subject to sales
charge) or Class B shares of any of the Funds, as the case may be, sold by your
firm. This Service Fee will be compensation for your personal service and/or
the maintenance of shareholder accounts ("Customer Servicing") during the
twelve-month period immediately following the purchase of such shares, in the
amount not to exceed .25 of 1% of net assets invested in Class A shares or
Class B shares of the Fund, as the case may be, purchased by your customers.
SERVICE FEE SUBSEQUENT TO THE FIRST YEAR
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will pay you quarterly, in arrears, a
Service Fee commencing at the end of the twelve month period immediately
following the purchase of Class A shares (only if subject to sales charge) or
Class B shares, as the case may be, sold by your firm, for Customer Servicing,
in an amount not to exceed .25 of 1% of the average daily net assets
attributable to the Class A shares or Class B shares of the Fund, as the case
may be, purchased by your customers, provided your firm has under management
with the Funds combined average daily net assets for the preceding quarter of
no less than $1 million, or an individual representative of your firm has under
management with the Funds combined average daily net assets for the preceding
quarter of no less than $250,000 (an "Eligible Firm").
<PAGE> 11
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
SCHEDULE D
DATED JULY 1, 1992 TO THE
SOLICITING DEALER AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK MUTUAL FUNDS
No broker/dealer shall represent the FUnds or Distribution Services in any
written communications without prior receipt of written approval from John
Hancock Broker Distribution Services, Inc. This includes but is not limited to
all advertising, public relations, marketing and sales literature, and media
contacts.
Further, subsequent to the creation of such materialsbefore written
approval from JHBDS will be given, a copy of the NASD review document
applicable to such materials must be furnished to John Hancock Broker
Distribution Services, Inc. for its review and files.
FOR PURPOSES OF THIS SCHEDULE D, THE FOLLOWING TERMS ARE DEFINED:
Advertising:
materials designed for the mass market, e.g. print ads, radio and tv
commercials, billboards, etc.
Sales literature:
materials designed for a directed market, e.g. prospecting letters,
brochures, mailers, stuffers, etc.
Coop Advertising:
advertising materials (as defined above) used by selling group members
for which John Hancock pays some or all of the costs of publication
whether the materials were developed by JHBDS Marketing or not.
John Hancock Broker Distribution Services, Inc. Approval of Advertising:
Approval has four meanings:approval of the material itself from a
marketing perspective (JHBDS product managers), proactive compliance
officer), parent company corporate advertising approval (John Hancock
Mutual Life Insurance Company Advertising Dept. personnel) and
approval for use and related cost-sharing arrangements (national sales
coordinators).
NASD Filing:
Materials created by JHBDS will be filed with the NASD by the JHBDS
Compliance Department. Materials not created by JHBDS but to be
included in the coop program will be filed with the NASD by the
broker-dealer creating the materials. However, prior to use of the
materials in our coop program, we will need a copy of the final
version of the material as well as the NASDcomment letter. When this
is received, the above approvals can be obtained.
<PAGE> 12
FINANCIAL INSTITUTION
SALES AND SERVICE AGREEMENT
[LOGO]
JOHN HANCOCK FUNDS, INC.
Boston - Massachusetts - 02199-7603
<PAGE> 13
JOHN HANCOCK FUNDS, INC.
101 HUNTINGTON AVENUE
BOSTON, MA 02199-7603
FINANCIAL INSTITUTION
SALES AND SERVICE AGREEMENT
Date
--------------------------------
John Hancock Funds, Inc. ("The Distributor", or "Distributor"), ("We" or
"us"), is the principal distributor of the shares of beneficial interest (the
"securities") of each of the John Hancock Funds (the "Funds"). Such Funds are
those listed on Schedule A hereto which may be amended or supplemented from
time to time by the Distributor to include additional Funds for which the
Distributor is the principal distributor. You hereby represent that you are a
"bank" as defined in Section 3(a)(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and at the time of each transaction in shares of
the Funds, are not required to register as a broker/dealer under the Exchange
Act or regulations thereunder. We invite you to become a non-exclusive
soliciting financial institution ("Financial Institution") to distribute the
securities of the Funds and you agree to solicit orders for the purchase of the
securities on the following terms. Securities are offered pursuant to each
Fund's prospectus and statement of additional information, as such prospectus
and statement of additional information may be amended from time to time. To
the extent that the prospectus or statement of additional information contains
provisions that are inconsistent with the terms of this Agreement, the terms of
the prospectus or statement of additional information shall be controlling.
OFFERINGS
1. You represent and warrant that you will use your best efforts to ensure
that any purchase of shares of the Funds by your customers constitutes a
suitable investment for such customers. You acknowledge that you will base
such a decision of suitability on all the facts you have gathered about your
customer's financial situation, investment objectives, risk tolerance and
sophistication.
2. You represent and warrant that a copy of the then-current prospectus of a
Fund will be delivered to your customer before any purchase of shares of that
Fund are effected for that customer. You shall not effect any transaction in,
or induce any purchase or sale of, any shares of the Funds by means of any
manipulative, deceptive or other fraudulent device or contrivance, and shall
otherwise deal equitably and fairly with your customers with respect to
transactions in shares of a Fund.
3. You represent and warrant that you will not make shares of any Fund
available to your customers, including your fiduciary customers, except in
compliance with all Federal and state laws and rules and regulations of
regulatory agencies or authorities applicable to you, or any of your affiliates
engaging in such activity, which may affect your business practices. You
confirm that you are not in violation of any banking law or regulations as to
which you are subject. You agree that you will comply with the requirements of
Banking Circular 274 issued by the Office of the Comptroller of the Currency in
offering shares of the Funds to your customers. We agree that we will comply
with all Federal and state laws and rules and regulations of regulatory
agencies or authorities applicable to us. We and you acknowledge and agree
that the offering of shares of the Funds pursuant to this agreement is subject
to the oversight of your management and the regulatory authorities by which you
are subject to review, and that appropriate records and materials relating to
any activity by you or us undertaken pursuant to this agreement may be accessed
by bank examiners in the due course of any regulatory review to which you may
be subject.
4. As principal distributor of the Funds, we shall have full authority to take
such action as we deem advisable in respect of all matters pertaining to the
distribution. This offer of shares of the Funds to you is made only in such
jurisdictions in which we may lawfully sell such shares of the Funds.
-2-
<PAGE> 14
5. You shall not make any representation concerning the Funds or their
securities except those contained in the then-current prospectus or statement
of additional information for each Fund.
6. We will supply to you at our expense additional copies of the then-current
prospectus and statement of additional information for each of the Funds and
any printed information supplemental to such material in reasonable quantities
upon request. It shall be your obligation to ensure that all such information
and materials are distributed to your customers who own or seek to own shares
of the Funds in accordance with securities and/or banking law and regulations
and any other applicable regulations.
7. With the exception of listings of product offerings, you agree not to
furnish or cause to be furnished to any person or display, or publish any
information or materials relating to any Fund (including, without limitation,
promotional materials, sales literature, advertisements, press releases,
announcements, posters, signs and other similar materials), except such
information and materials as may be furnished to you by us the Distributor or
the Fund. All other materials must receive written approval by the Distributor
before distribution or display to the public. Use of all approved advertising
and sales literature materials is restricted to appropriate distribution
channels.
8. You are not authorized to act as our agent. In making available shares of
the Funds under this Financial Institution Sales and Service Agreement, nothing
herein shall be construed to constitute you or any of your agents, employees or
representatives as our agent or employee, or as an agent or employee of the
Funds, and you shall not make any representations to the contrary. Nothing
shall constitute you as a syndicate, association, unincorporated business, or
other separate entity or partners with us, but you shall be liable for your
proportionate share of any tax, liability or expense based on any claim arising
from the sale of shares of the Funds under this Agreement. We shall not be
under any liability to you, except for obligations expressly assumed by us in
this Agreement and liabilities under Section 11(f) of the Securities Act of
1933, and no obligations on our part shall be implied or inferred herefrom.
9. DEALER COMPLIANCE/SUITABILITY STANDARDS (CLASS A AND CLASS B SHARES) -
Certain mutual funds distributed by the Distributor are being offered with two
or more classes of shares of the same investment portfolio ("Fund") - refer to
each Fund prospectus for availability and details. It is essential that the
following minimum compliance/suitability standards be adhered to in offering
and selling shares of these Funds to investors. All soliciting financial
institutions offering shares of the Funds and their agents, employees and
representatives agree to comply with these general suitability and compliance
standards.
SUITABILITY
With two classes of shares of certain funds available to individual
investors, (Class A and Class B), it is important that each investor purchases
not only the fund that best suits his or her investment objective but also the
class of shares that offers the most beneficial distribution financing method
for the investor based upon his or her particular situation and preferences.
Fund share recommendations and orders must be carefully reviewed by you and
your agents, employees and representatives in light of all the facts and
circumstances, to ascertain that the class of shares to be purchased by each
investor is appropriate and suitable. These recommendations should be based on
several factors, including but not limited to:
(A) the amount of money to be invested initially and over
a period of time;
(B) the current level of front-end sales load or back-end
sales load imposed by the Fund;
(C) the period of time over which the customer expects to
retain the investment;
(D) the anticipated level of yield from fixed income
funds' Class A and Class B shares;
(E) any other relevant circumstances such as the
availability of reduced sales charges under letters
of intent and/or rights of accumulation.
There are instances when one distribution financing method may be more
appropriate than another. For example, shares subject to a front-end sales
charge may be more appropriate than shares subject to a contingent deferred
sales charge for large investors who qualify for a significant quantity
discount on the front-end sales charge. In addition, shares subject to a
contingent deferred sales charge may be more appropriate for investors whose
orders would not qualify for quantity discounts and who, therefore, may prefer
to defer sales charges and also for investors who determine it to be
advantageous to have all of their funds invested without deduction of a
front-end sales commission. However, if it is anticipated that an investor may
redeem his or her shares within a short period of time, the investor may,
depending on the amount of his or her purchase, bear higher distribution
expenses by purchasing contingent deferred sales charge shares than if he or
she had purchased shares subject to a front-end sales charge.
-3-
<PAGE> 15
COMPLIANCE
Your supervisory procedures should be adequate to assure that an
appropriate person reviews and approves transactions entered into pursuant to
this Financial Institution Sales and Service Agreement for compliance with the
foregoing standards. In certain instances, it may be appropriate to discuss
the purchase with the agents, employees and representatives involved or to
review the advantages and disadvantages of selecting one class of shares over
another with the client. The Distributor will not accept orders for Class B
Shares in any Fund from you for accounts maintained in your name or in the name
of your nominee for the benefit of certain of your customers. Trades for Class
B Shares will only be accepted in the name of the shareholder.
10. CLASS C SHARES - Certain mutual funds distributed by the Distributor may
be offered with Class C shares. Refer to each Fund prospectus for availability
and details. Class C shares are designed for institutional investors and
qualified benefit plans, including pension funds, and are sold without a sales
charge or 12b-1 fee. If a commission is paid to you for transactions in Class
C shares, it will be paid by the Distributor out of its own resources.
SALES
11. With respect to any and all transactions in the shares of any Fund
pursuant to this Financial Institution Sales and Service Agreement it is
understood and agreed in each case that: (a) you shall be acting solely as
agent for the account of your customer; (b) each transaction shall be initiated
solely upon the order of your customer; (c) we shall execute transactions only
upon receiving instructions from you acting as agent for your customer or upon
receiving instructions directly from your customer; (d) as between you and your
customer, your customer will have full beneficial ownership of all shares; (c)
each transaction shall be for the account of your customer and not for your
account; and (f) unless otherwise agreed in writing we will serve as a clearing
broker for you on a fully disclosed basis, and you shall serve as the
introducing agent for your customers' accounts. Subject to the foregoing,
however, and except for Class B shares, as described in Section 8 above, you
may maintain record ownership of such customers' shares in an account
registered in your name or the name of your nominee, for the benefit of such
customers. Each transaction shall be without recourse to you provided that you
act in accordance with the terms of this Financial Institution Sales and
Service Agreement. You represent and warrant to us that you will have full
right, power and authority to effect transactions (including, without
limitation, any purchases and redemptions) in shares of the Funds on behalf of
all customer accounts provided by you.
12. Orders for securities received by you from your customers will be for the
sale of the securities at the public offering price, which will be the net
asset value per share as determined in the manner provided in the relevant
Fund's prospectus, as now in effect or as amended from time to time, next after
receipt by us (or the relevant Fund's transfer agent) of the purchase
application and payment for the securities, plus the relevant sales charges set
forth in the relevant Fund's then-current prospectus (the "Public Offering
Price"). The procedures relating to the handling of orders shall be subject to
our instructions which we will forward from time to time to you. All orders
are subject to acceptance by us, and we reserve the right in our sole
discretion to reject any order.
In addition to the foregoing, you acknowledge and agree to the initial and
subsequent investment minimums, which may vary from year to year, as described
in the then-current prospectus for each Fund.
13. You agree to sell the securities only (a) to your customers at the public
offering price then in effect, or (b) back to the Funds at the currently quoted
net asset value.
14. The amount of sales charge to be reallowed to you (the "Reallowance") as a
percentage of the offering price is set forth in the then-current prospectus of
each Fund.
If a sales charge on the purchase is reduced in accordance with the
provisions of the relevant Fund's then- current prospectus pertaining to
"Methods of Obtaining Reduced Sales Charges," the Reallowance shall be reduced
pro rata.
15. We shall pay a Reallowance subject to the provisions of this agreement as
set forth in Schedule B hereto on all purchases made by your customers pursuant
to orders accepted by us (a) where an order for the purchase of securities is
obtained by you and remitted to us promptly by you, (b) where a subsequent
investment is made to an account established by you or (c) where a subsequent
investment is made to an account established by a financial institution or
-4-
<PAGE> 16
registered broker/dealer other than you and is accompanied by a signed request
from the account shareholder that you receive the Reallowance for that
investment and/or for subsequent investments made in such account. If for any
reason, a purchase transaction is reversed, you shall not be entitled to
receive or retain any part of the Reallowance on such purchase and shall pay to
us on demand in full the amount of the Reallowance received by you in
connection with any such purchase. We may withhold and retain from the amount
of the Reallowance due you a sum sufficient to discharge any amount due and
payable by you to us.
16. Certain of the Funds have adopted a plan under Investment Company Act
Rule 12b-1 ("Distribution Plan" as described in the prospectus). To the extent
you provide distribution and marketing services in the promotion of the sale of
shares of these Funds, including furnishing services and assistance to your
customers who invest in and own shares of such Funds and including, but not
limited to, answering routine inquiries regarding such Funds and assisting in
changing distribution options, account designations and addresses, you may be
entitled to receive compensation from us as set forth in Schedule C hereto.
All compensation, including 12b-1 fees, shall be payable to you only to the
extent that funds are received and in the possession of the Distributor.
17. We will advise you as to the jurisdictions in which we believe the shares
have been qualified for sale under the respective securities or "blue sky" laws
of such jurisdictions, but we assume no responsibility or obligations as to
your right to sell the shares of the Funds in any state or jurisdiction.
18. Orders may be placed through:
John Hancock Funds, Inc.
101 Huntington Avenue
Boston, MA 02199-7603
1-800-338-4265
SETTLEMENT
19. Settlements for wire orders shall be made within five business days after
our acceptance of your order to purchase shares of the Funds. Certificates,
when requested, will be delivered to you upon payment in full of the sum due
for the sale of the shares of the Funds. If payment is not so received or
made, we reserve the right forthwith to cancel the sale, or, at our option, to
liquidate the shares of the Fund subject to such sale at the then prevailing
net asset value, in which latter case you will agree to be responsible for any
loss resulting to the Funds or to us from your failure to make payments as
aforesaid.
INDEMNIFICATION
20. The parties to this agreement hereby agree to indemnify and hold harmless
each other, their officers and directors, and any person who is or may be
deemed to be a controlling person of each other, from and against any losses,
claims, damages, liabilities or expenses (including reasonable fees of
counsel), whether joint or several, to which any such person or entity may
become subject insofar as such losses, claims, damages, liabilities or expenses
(or actions in respect thereof) arise out of or are based upon, (a) any untrue
statement or alleged untrue statement of material fact, or any omission or
alleged omission to state a material fact made or omitted by it herein, or, (b)
any willful misfeasance or gross misconduct by it in the performance of its
duties and obligations hereunder.
MISCELLANEOUS
21. Any notice to you shall be duly given if mailed or telegraphed to you at
your address as most recently furnished to us by you.
22. Miscellaneous provisions, if any, are attached hereto and incorporated
herein by reference.
23. This agreement, which shall be construed in accordance with the laws of
the Commonwealth of Massachusetts, may be terminated by any party hereto at any
time upon written notice.
-5-
<PAGE> 17
FINANCIAL INSTITUTION
-------------------------------------------------
Financial Institution
By:
-------------------------------------------------
Authorized Signature of Financial Institution
-------------------------------------------------
Please Print or Type Name
-------------------------------------------------
Title
-------------------------------------------------
Print or Type Address
-------------------------------------------------
Telephone Number
Date:
-------------------------------------------------
In order to service you efficiently, please provide the
following information on your Mutual Funds Operations Department:
OPERATIONS MANAGER:
---------------------------------------------
ORDER ROOM MANAGER:
---------------------------------------------
OPERATIONS ADDRESS:
---------------------------------------------
---------------------------------------------
TELEPHONE: FAX:
--------------------- ----------------------------
TO BE COMPLETED BY: JOHN HANCOCK INVESTOR
JOHN HANCOCK FUNDS, INC. SERVICES CORPORATION
By: By:
--------------------------------- ------------------------------------
- ------------------------------------ ------------------------------------
Title Title
TO BE COMPLETED BY:
FINANCIAL INSTITUTION NUMBER:
----------------------------------------------
-6-
<PAGE> 18
JOHN HANCOCK FUNDS, INC.
SCHEDULE A
DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
<TABLE>
<S> <C>
John Hancock Sovereign Achievers Fund John Hancock National Aviation & Technology Fund
John Hancock Sovereign Investors Fund John Hancock Regional Bank Fund
John Hancock Sovereign Balanced Fund John Hancock Gold and Government Fund
John Hancock Sovereign Bond Fund John Hancock Global Rx Fund
John Hancock Sovereign U.S. Government Income Fund John Hancock Global Technology Fund
John Hancock Special Equities Fund* John Hancock Global Fund
John Hancock Special Opportunities Fund John Hancock Pacific Basin Equities Fund
John Hancock Discovery Fund John Hancock Global Income Fund
John Hancock Growth Fund John Hancock International Fund
John Hancock Strategic Income Fund John Hancock Global Rescources Fund
John Hancock Limited Term Government Fund John Hancock Emerging Growth Fund
John Hancock Cash Management Fund John Hancock Capital Growth Fund
John Hancock Managed Tax-Exempt Fund John Hancock Growth & Income Fund
John Hancock Tax-Exempt Income Fund John Hancock High Yield Bond Fund
John Hancock Tax-Exempt Series Fund John Hancock Investment Quality Bond Fund
John Hancock Special Value Fund John Hancock Government SecurritiesFund
John Hancock Strategic Short-Term Income Fund John Hancock U.S. Government Fund
John Hancock CA Tax-Free Fund John Hancock Governtment Income Fund
John Hancock High Yield Tax-Free Fund John Hancock Intermediate Government Fund
John Hancock Tax-Free Bond Fund John Hancock Adjustable U.S. Government Fund
John Hancock U.S. Government Cash Reserve Fund John Hancock Cash Reserve Money Market B Fund
</TABLE>
From time to time John Hancock Funds, as principal distributor of the
John Hancock Funds, will offer additional funds for sale. These funds will
automatically become part of this Agreement and will be subject to all its
provisions unless otherwise directed by John Hancock Funds, Inc.
* Closed to new invstors as of 9/30/94.
<PAGE> 19
JOHN HANCOCK FUNDS, INC.
SCHEDULE B
DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
I. REALLOWANCE
The Reallowance paid to Financial Institutions for sales of John Hancock
Funds is the same as that paid to Selling Brokers described and set forth
in each Fund's then-current prospectus. No Commission will be paid on
sales of John Hancock Cash Management Fund or any John Hancock Fund that is
without a sales charge. Purchases of Class A shares of $1 million or more,
or purchases into an account or accounts whose aggregate value of fund
shares is $1 million or more will be made at net asset value with no
initial sales charge. On purchases of this type, the Distributor will pay a
commission as set forth in each Fund's then-current prospectus. John
Hancock Funds, Inc. will pay Financial Institutions for sales of Class B
shares of the Funds a marketing fee as set forth in each Fund's then-
current prospectus for Selling Brokers.
<PAGE> 20
JOHN HANCOCK FUNDS, INC.
SCHEDULE C
DISTRIBUTION PLAN SCHEDULE OF COMPENSATION
DATED JANUARY 1, 1995 TO THE
FINANCIAL INSTITUTION SALES AND SERVICE
AGREEMENT RELATING TO SHARES OF
JOHN HANCOCK FUNDS
FIRST YEAR SERVICE FEE
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will advance to you a First Year Service
Fee related to the purchase of Class A shares (only if subject to sales charge)
or Class B shares of any of the Funds, as the case maybe, sold by your firm on
or after July 1, 1993. This Service Fee will be compensation for your personal
service and/or the maintenance of shareholder accounts ("Customer Servicing")
during the twelve-month period immediately following the purchase of such
shares, in an amount not to exceed .25 of 1% of the average daily net assets
attributable to Class A shares or Class B shares of the Fund, as the case may
be, purchased by your customers.
SERVICE FEE SUBSEQUENT TO THE FIRST YEAR
Pursuant to the Distribution Plan applicable to each of the Funds
listed in Schedule A, the Distributor will pay you quarterly, in arrears, a
Service Fee commencing at the end of the twelve-month period immediately
following the purchase of Class A shares (only if subject to sales charge) or
Class B shares, as the case may be, sold by your firm, for Customer Servicing,
in an amount not to exceed .25 of 1% of the average daily net assets
attributable to the Class A shares or Class B shares of the Fund, as the case
may be, purchased by your customers, provided your Financial Institution has
under management with the Funds combined average daily net assets for the
preceding quarter of no less than $1 million, or an individual representative
of your Financial Institution has under management with the Funds combined
average daily net assets for the preceding quarter of no less than $250,000 (an
"Eligible Financial Institution").
<PAGE> 1
Exhibit 8
MASTER CUSTODIAN AGREEMENT
between
JOHN HANCOCK MUTUAL FUNDS
and
STATE STREET BANK AND TRUST COMPANY
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3
2. Employment of Custodian and Property to be held by it . . . . . . . . . 3-4
3. Duties of the Custodian with Respect to Property of the Fund . . . . . 4
A. Safekeeping and Holding of Property . . . . . . . . . . . . . . . . 4
B. Delivery of Securities . . . . . . . . . . . . . . . . . . . . . . 4-7
C. Registration of Securities . . . . . . . . . . . . . . . . . . . . 7
D. Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
E. Payments for Shares of the Fund . . . . . . . . . . . . . . . . . . 8
F. Investment and Availability of Federal Funds . . . . . . . . . . . 8
G. Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9
H. Payment of Fund Moneys . . . . . . . . . . . . . . . . . . . . . . 9-10
I. Liability for Payment in Advance of Receipt of
Securities Purchased . . . . . . . . . . . . . . . . . . . . . . . 10
J. Payments for Repurchases of Redemptions of Shares of the Fund . . . 11
K. Appointment of Agents by the Custodian . . . . . . . . . . . . . . 11
L. Deposit of Fund Portfolio Securities in Securities Systems . . . . 12-13
M. Deposit of Fund Commercial Paper in an Approved
Book-Entry System for Commercial Paper . . . . . . . . . . . . . . 14-16
N. Segregated Account . . . . . . . . . . . . . . . . . . . . . . . . 16
O. Ownership Certificates for Tax Purposes . . . . . . . . . . . . . . 16
</TABLE>
ii
<PAGE> 3
<TABLE>
<S> <C> <C>
P. Proxies ................................................. 17
Q. Communications Relating to Fund Portfolio
Securities .............................................. 17
R. Exercise of Rights; Tender Offers .................... 17-18
S. Depository Receipts ..................................... 18
T. Interest Bearing Call or Time Deposits .................. 18
U. Options, Futures Contracts and
Foreign Currency Transactions ........................ 18-20
V. Actions Permitted Without Express Authority ............. 20
4. Duties of Bank with Respect to Books of Account and
Calculations of Net Asset Value ......................... 20-21
5. Records and Miscellaneous Duties ........................... 21
6. Opinion of Fund's Independent Public Accountants ........... 22
7. Compensation and Expenses of Bank .......................... 22
8. Responsibility of Bank .................................. 22-23
9. Persons Having Access to Assets of the Fund ................ 23
10. Effective Period, Termination and Amendment;
Successor Custodian ........................................ 24
11. Interpretive and Additional Provisions ..................... 25
12. Certification as to Authorized Officers .................... 25
13. Notices .................................................... 25
14. Massachusetts Law to Apply ................................. 25
15. Adoption of the Agreement by the Fund ...................... 26
</TABLE>
iii
<PAGE> 4
MASTER CUSTODIAN AGREEMENT
This Agreement is made as of June 15, 1994 between each investment
company advised by John Hancock Advisers, Inc. which has adopted this Agreement
in the manner provided herein and State Street Bank and Trust Company
(hereinafter called "Bank", "Custodian" and "Agent"), a trust company
established under the laws of Massachusetts with a principal place of business
in Boston, Massachusetts.
Whereas, each such investment company is registered under the
Investment Company Act of 1940 and has appointed the Bank to act as Custodian
of its property and to perform certain duties as its Agent, as more fully
hereinafter set forth; and
Whereas, the Bank is willing and able to act as each such investment
company's Custodian and Agent, subject to and in accordance with the provisions
hereof;
Now, therefore, in consideration of the premises and of the mutual
covenants and agreements herein contained, each such investment company and the
Bank agree as follows:
1. Definitions
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
(a) "Fund" shall mean the investment company which has adopted this
Agreement and is listed on Appendix A hereto. If the Fund is a Massachusetts
business trust or Maryland corporation, it may in the future establish and
designate other separate and distinct series of shares, each of which may be
called a "portfolio"; in such case, the term "Fund" shall also refer to each
such separate series or portfolio.
(b) "Board" shall mean the board of directors/trustees/managing general
partners/director general partners of the Fund, as the case may be.
(c) "The Depository Trust Company", a clearing agency registered with
the Securities and Exchange Commission under Section 17A of the Securities
Exchange Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(d) "Authorized Officer", shall mean any of the following officers of
the Trust: The Chairman of the Board of Trustees, the President, a Vice
President, the Secretary, the Treasurer or Assistant Secretary or Assistant
Treasurer, or any other officer of the Trust duly authorized to sign by
appropriate resolution of the Board of Trustees of the Trust.
<PAGE> 5
(e) "Participants Trust Company", a clearing agency registered with the
Securities and Exchange Commission under Section 17A of the Securities Exchange
Act of 1934 which acts as a securities depository and which has been
specifically approved as a securities depository for the Fund by the Board.
(f) "Approved Clearing Agency" shall mean any other domestic clearing
agency registered with the Securities and Exchange Commission under Section 17A
of the Securities Exchange Act of 1934 which acts as a securities depository
but only if the Custodian has received a certified copy of a vote of the Board
approving such clearing agency as a securities depository for the Fund.
(g) "Federal Book-Entry System" shall mean the book-entry system
referred to in Rule 17f-4(b) under the Investment Company Act of 1940 for
United States and federal agency securities (i.e., as provided in Subpart O of
Treasury Circular No. 300, 31 CFR 306, Subpart B of 31 CFR Part 350, and the
book-entry regulations of federal agencies substantially in the form of
Subpart O).
(h) "Approved Foreign Securities Depository" shall mean a foreign
securities depository or clearing agency referred to in rule 17f-4 under the
Investment Company Act of 1940 for foreign securities but only if the Custodian
has received a certified copy of a vote of the Board approving such depository
or clearing agency as a foreign securities depository for the Fund.
(i) "Approved Book-Entry System for Commercial Paper" shall mean a
system maintained by the Custodian or by a subcustodian employed pursuant to
Section 2 hereof for the holding of commercial paper in book-entry form but
only if the Custodian has received a certified copy of a vote of the Board
approving the participation by the Fund in such system.
(j) The Custodian shall be deemed to have received "proper
instructions" in respect of any of the matters referred to in this Agreement
upon receipt of written or facsimile instructions signed by such one or more
person or persons as the Board shall have from time to time authorized to give
the particular class of instructions in question. Electronic instructions for
the purchase and sale of securities which are transmitted by John Hancock
Advisers, Inc. to the Custodian through the John Hancock equity trading system
and the John Hancock fixed income trading system shall be deemed to be proper
instructions; the Fund shall cause all such instructions to be confirmed in
writing. Different persons may be authorized to give instructions for different
purposes. A certified copy of a vote of the Board may be received and accepted
by the Custodian as conclusive evidence of the authority of any such person to
act and may be considered as in full force and effect until receipt of written
notice to the contrary. Such instructions may be general or specific in terms
and, where appropriate, may be standing instructions. Unless the vote
delegating authority to any person or persons to give a particular class of
instructions specifically requires that the approval of any person, persons or
committee shall first have been obtained before the Custodian may act on
instructions of that class,
2
<PAGE> 6
the Custodian shall be under no obligation to question the right of the person
or persons giving such instructions in so doing. Oral instructions will be
considered proper instructions if the Custodian reasonably believes them to
have been given by a person authorized to give such instructions with respect
to the transaction involved. The Fund shall cause all oral instructions to be
confirmed in writing. The Fund authorizes the Custodian to tape record any and
all telephonic or other oral instructions given to the Custodian. Upon receipt
of a certificate signed by two officers of the Fund as to the authorization by
the President and the Treasurer of the Fund accompanied by a detailed
description of the communication procedures approved by the President and the
Treasurer of the Fund, "proper instructions" may also include communications
effected directly between electromechanical or electronic devices provided that
the President and Treasurer of the Fund and the Custodian are satisfied that
such procedures afford adequate safeguards for the Fund's assets. In performing
its duties generally, and more particularly in connection with the purchase,
sale and exchange of securities made by or for the Fund, the Custodian may take
cognizance of the provisions of the governing documents and registration
statement of the Fund as the same may from time to time be in effect (and
votes, resolutions or proceedings of the shareholders or the Board), but,
nevertheless, except as otherwise expressly provided herein, the Custodian may
assume unless and until notified in writing to the contrary that so-called
proper instructions received by it are not in conflict with or in any way
contrary to any provisions of such governing documents and registration
statement, or votes, resolutions or proceedings of the shareholders or the
Board.
2. Employment of Custodian and Property to Be Held By It
The Fund hereby appoints and employs the Bank as its Custodian and
Agent in accordance with and subject to the provisions hereof, and the Bank
hereby accepts such appointment and employment. The Fund agrees to deliver to
the Custodian all securities, participation interests, cash and other assets
owned by it, and all payments of income, payments of principal and capital
distributions and adjustments received by it with respect to all securities and
participation interests owned by the Fund from time to time, and the cash
consideration received by it for such new or treasury shares ("Shares") of the
Fund as may be issued or sold from time to time. The Custodian shall not be
responsible for any property of the Fund held by the Fund and not delivered by
the Fund to the Custodian. The Fund will also deliver to the Bank from time to
time copies of its currently effective charter (or declaration of trust or
partnership agreement, as the case may be), By-Laws, prospectus, statement of
additional information and distribution agreement with its principal
underwriter, together with such resolutions, votes and other proceedings of the
Fund as may be necessary for or convenient to the Bank in the performance of
its duties hereunder.
The Custodian may from time to time employ one or more subcustodians to
perform such acts and services upon such terms and conditions as shall be
approved from time to time by the Board. Any such subcustodian so employed by
the Custodian shall be deemed to be the agent of the Custodian, and the
Custodian shall remain primarily
3
<PAGE> 7
responsible for the securities, participation interests, moneys and other
property of the Fund held by such subcustodian. Any foreign subcustodian shall
be a bank or trust company which is an eligible foreign custodian within the
meaning of Rule 17f-5 under the Investment Company Act of 1940, and the foreign
custody arrangements shall be approved by the Board and shall be in accordance
with and subject to the provisions of said Rule. For the purposes of this
Agreement, any property of the Fund held by any such subcustodian (domestic or
foreign) shall be deemed to be held by the Custodian under the terms of this
Agreement.
3. Duties of the Custodian With Respect to Property of the Fund
A. Safekeeping and Holding Of Property. The Custodian shall keep safely
all property of the Fund and on behalf of the Fund shall from time to
time receive delivery of Fund property for safekeeping. The Custodian
shall hold, earmark and segregate on its books and records for the
account of the Fund all property of the Fund, including all
securities, participation interests and other assets of the Fund (1)
physically held by the Custodian, (2) held by any subcustodian
referred to in Section 2 hereof or by any agent referred to in
Paragraph K hereof, (3) held by or maintained in The Depository Trust
Company or in Participants Trust Company or in an Approved Clearing
Agency or in the Federal Book-Entry System or in an Approved Foreign
Securities Depository, each of which from time to time is referred to
herein as a "Securities System", and (4) held by the Custodian or by
any subcustodian referred to in Section 2 hereof and maintained in any
Approved Book-Entry System for Commercial Paper.
B. Delivery of Securities. The Custodian shall release and deliver
securities or participation interests owned by the Fund held (or
deemed to be held) by the Custodian or maintained in a Securities
System account or in an Approved Book-Entry System for Commercial
Paper account only upon receipt of proper instructions, which may be
continuing instructions when deemed appropriate by the parties, and
only in the following cases:
1) Upon Sale of such securities or participation interests for the
account of the Fund, but only against receipt of payment
therefor; if delivery is made in Boston or New York City, payment
therefor shall be made in accordance with generally accepted
clearing house procedures or by use of Federal Reserve Wire
System procedures; if delivery is made elsewhere payment therefor
shall be in accordance with the then current "street delivery"
custom or in accordance with such procedures agreed to in writing
from time to time by the parties hereto; if the sale is effected
through a Securities System, delivery and payment therefor shall
be made in accordance with the provisions of Paragraph L hereof;
if the sale of commercial paper is to be effected through an
Approved Book-Entry System for Commercial Paper, delivery and
payment
4
<PAGE> 8
therefor shall be made in accordance with the provisions of
Paragraph M hereof; if the securities are to be sold outside the
United States, delivery may be made in accordance with procedures
agreed to in writing from time to time by the parties hereto; for
the purposes of this subparagraph, the term "sale" shall include
the disposition of a portfolio security (i) upon the exercise of
an option written by the Fund and (ii) upon the failure by the
Fund to make a successful bid with respect to a portfolio
security, the continued holding of which is contingent upon the
making of such a bid;
2) Upon the receipt of payment in connection with any repurchase
agreement or reverse repurchase agreement relating to such
securities and entered into by the Fund;
3) To the depository agent in connection with tender or other
similar offers for portfolio securities of the Fund;
4) To the issuer thereof or its agent when such securities or
participation interests are called, redeemed, retired or
otherwise become payable; provided that, in any such case, the
cash or other consideration is to be delivered to the Custodian
or any subcustodian employed pursuant to Section 2 hereof;
5) To the issuer thereof, or its agent, for transfer into the name
of the Fund or into the name of any nominee of the Custodian or
into the name or nominee name of any agent appointed pursuant to
Paragraph K hereof or into the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof; or for
exchange for a different number of bonds, certificates or other
evidence representing the same aggregate face amount or number of
units; provided that, in any such case, the new securities or
participation interests are to be delivered to the Custodian or
any subcustodian employed pursuant to Section 2 hereof;
6) To the broker selling the same for examination in accordance with
the "street delivery" custom; provided that the Custodian shall
adopt such procedures as the Fund from time to time shall approve
to ensure their prompt return to the Custodian by the broker in
the event the broker elects not to accept them;
7) For exchange or conversion pursuant to any plan of merger,
consolidation, recapitalization, reorganization or readjustment
of the securities of the issuer of such securities, or pursuant
to provisions for conversion of such securities, or pursuant to
any deposit agreement; provided that, in any such case, the new
securities and cash, if any, are
5
<PAGE> 9
to be delivered to the custodian or any subcustodian employed
pursuant to Section 2 hereof;
8) In the case of warrants, rights or similar securities, the
surrender thereof in connection with the exercise of such
warrants, rights or similar securities, or the surrender of
interim receipts or temporary securities for definitive
securities; provided that, in any such case, the new securities
and cash, if any, are to be delivered to the Custodian or any
subcustodian employed pursuant to Section 2 hereof;
9) For delivery in connection with any loans of securities made by
the Fund (such loans to be made pursuant to the terms of the
Fund's current registration statement), but only against receipt
of adequate collateral as agreed upon from time to time by the
Custodian and the Fund, which may be in the form of cash or
obligations issued by the United States government, its agencies
or instrumentalities.
10) For delivery as security in connection with any borrowings by the
Fund requiring a pledge or hypothecation of assets by the Fund
(if then permitted under circumstances described in the current
registration statement of the Fund), provided, that the
securities shall be released only upon payment to the Custodian
of the monies borrowed, except that in cases where additional
collateral is required to secure a borrowing already made,
further securities may be released for that purpose; upon receipt
of proper instructions, the Custodian may pay any such loan upon
redelivery to it of the securities pledged or hypothecated
therefor and upon surrender of the note or notes evidencing the
loan;
11) When required for delivery in connection with any redemption or
repurchase of Shares of the Fund in accordance with the
provisions of Paragraph J hereof;
12) For delivery in accordance with the provisions of any agreement
between the Custodian (or a subcustodian employed pursuant to
Section 2 hereof) and a broker-dealer registered under the
Securities Exchange Act of 1934 and, if necessary, the Fund,
relating to compliance with the rules of The Options Clearing
Corporation or of any registered national securities exchange, or
of any similar organization or organizations, regarding deposit
or escrow or other arrangements in connection with options
transactions by the Fund;
13) For delivery in accordance with the provisions of any agreement
among the Fund, the Custodian (or a subcustodian employed
pursuant to Section 2 hereof), and a futures commission merchant,
relating to
6
<PAGE> 10
compliance with the rules of the Commodity Futures Trading Commission
and/or of any contract market or commodities exchange or similar
organization, regarding futures margin account deposits or payments in
connection with futures transactions by the Fund;
14) For any other proper corporate purpose, but only upon receipt of, in
addition to proper instructions, a certified copy of a vote of the
Board specifying the securities to be delivered, setting forth the
purpose for which such delivery is to be made, declaring such purpose
to be proper corporate purpose, and naming the person or persons to
whom delivery of such securities shall be made.
C. Registration of Securities Securities held by the Custodian (other than
bearer securities) for the account of the Fund shall be registered in the
name of the Fund or in the name of any nominee of the Fund or of any nominee
of the Custodian, or in the name or nominee name of any agent appointed
pursuant to Paragraph K hereof, or in the name or nominee name of any
subcustodian employed pursuant to Section 2 hereof, or in the name or
nominee name of The Depository Trust Company or Participants Trust Company
or Approved Clearing Agency or Federal Book-Entry System or Approved
Book-Entry System for Commercial Paper; provided, that securities are held
in an account of the Custodian or of such agent or of such subcustodian
containing only assets of the Fund or only assets held by the Custodian or
such agent or such subcustodian as a custodian or subcustodian or in a
fiduciary capacity for customers. All certificates for securities accepted
by the Custodian or any such agent or subcustodian on behalf of the Fund
shall be in "street" or other good delivery form or shall be returned to the
selling broker or dealer who shall be advised of the reason thereof.
D. Bank Accounts The Custodian shall open and maintain a separate bank account
or accounts in the name of the Fund, subject only to draft or order by the
Custodian acting in pursuant to the terms of this Agreement, and shall hold
in such account or accounts, subject to the provisions hereof, all cash
received by it from or for the account of the Fund other than cash
maintained by the Fund in a bank account established and used in accordance
with Rule 17f-3 under the Investment Company Act of 1940. Funds held by the
Custodian for the Fund may be deposited by it to its credit as Custodian in
the banking department of the Custodian or in such other banks or trust
companies as the Custodian may in its discretion deem necessary or
desirable; provided, however, that every such bank or trust company shall be
qualified to act as a custodian under the Investment Company Act of 1940 and
that each such bank or trust company and the funds to be deposited with each
such bank or trust company shall be approved in writing by an Authorized
Officer. Such funds shall be deposited by the Custodian in its capacity as
Custodian and shall be subject to withdrawal only by the Custodian in that
capacity.
7
<PAGE> 11
E. Payment for Shares of the Fund The Custodian shall make appropriate
arrangements with the Transfer Agent and the principal underwriter of
the Fund to enable the Custodian to make certain it promptly receives
the cash or other consideration due to the Fund for such new or
treasury Shares as may be issued or sold from time to time by the
Fund, in accordance with the governing documents and offering
prospectus and statement of additional information of the Fund. The
Custodian will provide prompt notification to the Fund of any receipt
by it of payments for Shares of the Fund.
F. Investment and Availability of Federal Funds Upon agreement between
the Fund and the Custodian, the Custodian shall, upon the receipt of
proper instructions, which may be continuing instructions when deemed
appropriate by the parties, invest in such securities and instruments
as may be set forth in such instructions on the same day as received
all federal funds received after a time agreed upon between the
Custodian and the Fund.
G. Collections The Custodian shall promptly collect all income and other
payments with respect to registered securities held hereunder to which
the Fund shall be entitled either by law or pursuant to custom in the
securities business, and shall promptly collect all income and other
payments with respect to bearer securities if, on the date of payment
by the issuer, such securities are held by the Custodian or agent
thereof and shall credit such income, as collected, to the Fund's
custodian account.
The Custodian shall do all things necessary and proper in connection with such
prompt collections and, without limiting the generality of the foregoing, the
Custodian shall
1) Present for payment all coupons and other income items requiring
presentations;
2) Present for payment all securities which may mature or be called,
redeemed, retired or otherwise become payable;
3) Endorse and deposit for collection, in the name of the Fund, checks,
drafts or other negotiable instruments;
4) Credit income from securities maintained in a Securities System or in an
Approved Book-Entry System for Commercial Paper at the time funds become
available to the Custodian; in the case of securities maintained in The
Depository Trust Company funds shall be deemed available to the Fund not
later than the opening of business on the first business day after
receipt of such funds by the Custodian.
8
<PAGE> 12
The Custodian shall notify the Fund as soon as reasonably practicable whenever
income due on any security is not promptly collected. In any case in which the
Custodian does not receive any due and unpaid income after it has made demand
for the same, it shall immediately so notify the Fund in writing, enclosing
copies of any demand letter, any written response thereto, and memoranda of all
oral responses thereto and to telephonic demands, and await instructions from
the Fund; the Custodian shall in no case have any liability for any nonpayment
of such income provided the Custodian meets the standard of care set forth in
Section 8 hereof. The Custodian shall not be obligated to take legal action for
collection unless and until reasonably indemnified to its satisfaction.
The Custodian shall also receive and collect all stock dividends, rights and
other items of like nature, and deal with the same pursuant to proper
instructions relative thereto.
H. Payment of Fund Moneys Upon receipt of proper instructions, which may
be continuing instructions when deemed appropriate by the parties, the
Custodian shall pay out moneys of the Fund in the following cases only:
1) Upon the purchase of securities, participation interests, options,
futures contracts, forward contracts and options on futures
contracts purchased for the account of the Fund but only (a) against
the receipt of:
(i) such securities registered as provided in Paragraph C hereof
or in proper form for transfer or
(ii) detailed instructions signed by an officer of the Fund
regarding the participation interests to be purchased or
(iii) written confirmation of the purchase by the Fund of the
options, futures contracts, forward contracts or options on
futures contracts
by the Custodian (or by a subcustodian employed pursuant to Section
2 hereof or by a clearing corporation of a national securities
exchange of which the Custodian is a member or by any bank, banking
institution or trust company doing business in the United States or
abroad which is qualified under the Investment Company Act of 1940
to act as a custodian and which has been designated by the Custodian
as its agent for this purpose or by the agent specifically
designated in such instructions as representing the purchasers of a
new issue of privately placed securities); (b) in the case of a
purchase effected through a Securities System, upon receipt of the
securities by the Securities System in accordance with the
conditions set forth in Paragraph L hereof; (c) in the case of a
purchase of commercial paper effected through an Approved Book-Entry
System for Commercial Paper, upon receipt of the paper by the
Custodian or subcustodian in
9
<PAGE> 13
accordance with the conditions set forth in Paragraph M hereof;
(d) in the case of repurchase agreements entered into between the
Fund and another bank or a broker-dealer, against receipt by the
Custodian of the securities underlying the repurchase agreement
either in certificate form or through an entry crediting the
Custodian's segregated, non-proprietary account at the Federal
Reserve Bank of Boston with such securities along with written
evidence of the agreement by the bank or broker-dealer to
repurchase such securities from the Fund; or (e) with respect to
securities purchased outside of the United States, in accordance
with written procedures agreed to from time to time in writing by
the parties hereto;
2) When required in connection with the conversion, exchange or
surrender of securities owned by the Fund as set forth in
Paragraph B hereof;
3) When required for the redemption or repurchase of Shares of the
Fund in accordance with the provisions of Paragraph J hereof;
4) For the payment of any expense or liability incurred by the Fund,
including but not limited to the following payments for the
account of the Fund: advisory fees, distribution plan payments,
interest, taxes, management compensation and expenses,
accounting, transfer agent and legal fees, and other operating
expenses of the Fund whether or not such expenses are to be in
whole or part capitalized or treated as deferred expenses;
5) For the payment of any dividends or other distributions to
holders of Shares declared or authorized by the Board; and
6) For any other proper corporate purpose, but only upon receipt of,
in addition to proper instructions, a certified copy of a vote of
the Board, specifying the amount of such payment, setting forth
the purpose for which such payment is to be made, declaring such
purpose to be a proper corporate purpose, and naming the person
or persons to whom such payment is to be made.
I. Liability for Payment in Advance of Receipt of Securities Purchased
In any and every case where payment for purchase of securities for the
account of the Fund is made by the Custodian in advance of receipt of
the securities purchased in the absence of specific written
instructions signed by two officers of the Fund to so pay in advance,
the Custodian shall be absolutely liable to the Fund for such
securities to the same extent as if the securities had been received
by the Custodian; except that in the case of a repurchase agreement
entered into by the Fund with a bank which is a member of the
10
<PAGE> 14
Federal Reserve System, the Custodian may transfer funds to the
account of such bank prior to the receipt of (i) the securities in
certificate form subject to such repurchase agreement or (ii) written
evidence that the securities subject to such repurchase agreement have
been transferred by book-entry into a segregated non-proprietary
account of the Custodian maintained with the Federal Reserve Bank of
Boston or (iii) the safekeeping receipt, provided that such securities
have in fact been so transferred by book-entry and the written
repurchase agreement is received by the Custodian in due course; and
except that if the securities are to be purchased outside the United
States, payment may be made in accordance with procedures agreed to
from time to time by the parties thereto.
J. Payments for Repurchases or Redemptions of Shares of the Fund From
such funds as may be available for the purpose, but subject to any
applicable votes of the Board and the current redemption and
repurchase procedures of the Fund, the Custodian shall, upon receipt
of written instructions from the Fund or from the Fund's transfer
agent or from the principal underwriter, make funds and/or portfolio
securities available for payment to holders of Shares who have caused
their Shares to be redeemed or repurchased by the Fund or for the
Fund's account by its transfer agent or principal underwriter.
The Custodian may maintain a special checking account upon which
special checks may be drawn by shareholders of the Fund holding Shares
for which certificates have not been issued. Such checking account and
such special checks shall be subject to such rules and regulations as
the Custodian and the Fund may from time to time adopt. The Custodian
or the Fund may suspend or terminate use of such checking account on
such special checks (either generally or for one or more shareholders)
at any time. The Custodian and the Fund shall notify the other
immediately of any such suspension or termination.
K. Appointment of Agents by the Custodian The Custodian may at any time
or times in its discretion appoint (and may at any time remove) any
other bank or trust company (provided such bank or trust company is
itself qualified under the Investment Company Act of 1940 to act as a
custodian or is itself an eligible foreign custodian within the
meaning of Rule 17f-5 under said Act) as the agent of the Custodian to
carry out such of the duties and functions of the Custodian described
in this Section 3 as the Custodian may from time to time direct;
provided, however, that the appointment of any such agent shall not
relieve the Custodian of any of its responsibilities or liabilities
hereunder, and as between the Fund and the Custodian the Custodian
shall be fully responsible for the acts and omissions of any such
agent. For the purposes of this Agreement, any property of the Fund
held by any such agent shall be deemed to be held by the Custodian
hereunder.
11
<PAGE> 15
L. Deposit of Fund Portfolio Securities in Securities Systems The
Custodian may deposit and/or maintain securities owned by the Fund
(1) in The Depository Trust Company;
(2) in Participants Trust Company;
(3) in any other Approved Clearing Agency;
(4) in the Federal Book-Entry System; or
(5) in an Approved Foreign Securities Depository
in each case only in accordance with applicable Federal Reserve Board
and Securities and Exchange Commission rules and regulations, and at
all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep securities of
the Fund in a Securities System provided that such securities are
maintained in a non-proprietary account ("Account") of the
Custodian or such subcustodian in the Securities System which
shall not include any assets of the Custodian or such
subcustodian or any other person other than assets held by the
Custodian or such subcustodian as a fiduciary, custodian, or
otherwise for its customers.
(b) The records of the Custodian with respect to securities of the
Fund which are maintained in a Securities System shall identify
by book-entry those securities belonging to the Fund, and the
Custodian shall be fully and completely responsible for
maintaining a record keeping system capable of accurately and
currently stating the Fund's holdings maintained in each such
Securities System.
(c) The Custodian shall pay for securities purchased in book-entry
form for the account of the Fund only upon (i) receipt of notice
or advice from the Securities System that such securities have
been transferred to the Account, and (ii) the making of any entry
on the records of the Custodian to reflect such payment and
transfer for the account of the Fund. The Custodian shall
transfer securities sold for the account of the Fund only upon
(i) receipt of notice or advice from the Securities System that
payment for such securities has been transferred to the Account,
and (ii) the making of an entry on the records of the Custodian
to reflect such transfer and payment for the account of the Fund.
Copies of all notices or advises from the Securities System of
transfers of securities for the account of the Fund shall
identify the Fund, be maintained for the Fund by the Custodian
and be promptly provided to the Fund at its request. The
Custodian shall promptly send to the Fund
12
<PAGE> 16
confirmation of each transfer to or from the account of the Fund
in the form of a written advice or notice of each such
transaction, and shall furnish to the Fund copies of daily
transaction sheets reflecting each day's transactions in the
Securities System for the account of the Fund on the next
business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to
the Securities System's accounting system, system of internal
accounting controls or procedures for safeguarding securities
deposited in the Securities System; the Custodian shall promptly
send to the Fund any report or other communication relating to
the Custodian's internal accounting controls and procedures for
safeguarding securities deposited in any Securities System; and
the Custodian shall ensure that any agent appointed pursuant to
Paragraph K hereof or any subcustodian employed pursuant to
Section 2 hereof shall promptly send to the Fund and to the
Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any
Securities System. The Custodian's books and records relating to
the Fund's participation in each Securities System will at all
times during regular business hours be open to the inspection of
the Funds's Authorized Officers, employees or agents.
(e) The Custodian shall not act under this Paragraph L in the absence
of receipt of a certificate of an Authorized Officer that the
Board has approved the use of a particular Securities System; the
Custodian shall also obtain appropriate assurance from an
Authorized Officer that the Board has annually reviewed and
approved the continued use by the Fund of each Securities System,
so long as such review and approval is required by Rule 17f-4
under the Investment Company Act of 1940, and the Fund shall
promptly notify the Custodian if the use of a Securities System
is to be discontinued; at the request of the Fund, the Custodian
will terminate the use of any such Securities System as promptly
as practicable.
(f) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to
the Fund resulting from use of the Securities System by reason
of any negligence, misfeasance or misconduct of the Custodian or
any of its agents or subcustodians or of any of its or their
employees or from any failure of the Custodian or any such agent
or subcustodian to enforce effectively such rights as it may have
against the Securities System or any other person; at the
election of the Fund, it shall be entitled to be subrogated to
the rights of the Custodian with respect to any claim against the
Securities System or any other person which the Custodian may
have as a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such loss or
damage.
13
<PAGE> 17
M. Deposit of Fund Commercial Paper in an Approved Book-Entry System for
Commercial Paper Upon receipt of proper instructions with respect to
each issue of direct issue commercial paper purchased by the Fund, the
Custodian may deposit and/or maintain direct issue commercial paper
owned by the Fund in any Approved Book-Entry System for Commercial
Paper, in each case only in accordance with applicable Securities and
Exchange Commission rules, regulations, and no-action correspondence,
and at all times subject to the following provisions:
(a) The Custodian may (either directly or through one or more
subcustodians employed pursuant to Section 2) keep commercial
paper of the Fund in an Approved Book-Entry System for Commercial
Paper, provided that such paper is issued in book entry form by
the Custodian or subcustodian on behalf of an issuer with which
the Custodian or subcustodian has entered into a book-entry
agreement and provided further that such paper is maintained in a
non-proprietary account ("Account") of the Custodian or such
subcustodian in an Approved Book-Entry System for Commercial
Paper which shall not include any assets of the Custodian or such
subcustodian or any other person other than assets held by the
Custodian or such subcustodian as a fiduciary, custodian, or
otherwise for its customers.
(b) The records of the Custodian with respect to commercial paper of
the Fund which is maintained in an Approved Book-Entry System for
Commercial Paper shall identify by book-entry each specific issue
of commercial paper purchased by the Fund which is included in
the System and shall at all times during regular business hours
be open for inspection by authorized officers, employees or
agents of the Fund. The Custodian shall be fully and completely
responsible for maintaining a record keeping system capable of
accurately and currently stating the Fund's holdings of
commercial paper maintained in each such System.
(c) The Custodian shall pay for commercial paper purchased in
book-entry form for the account of the fund only upon
contemporaneous (i) receipt of notice or advice from the issuer
that such paper has been issued, sold and transferred to the
Account, and (ii) the making of an entry on the records of the
Custodian to reflect such purchase, payment and transfer for the
account of the Fund. The Custodian shall transfer such commercial
paper which is sold or cancel such commercial paper which is
redeemed for the account of the Fund only upon contemporaneous
(i) receipt of notice or advice that payment for such paper has
been transferred to the Account, and (ii) the making of an entry
on the records of the Custodian to reflect such transfer or
redemption and payment for the account of the Fund. Copies of all
14
<PAGE> 18
notices, advises and confirmations of transfers of commercial paper
for the account of the Fund shall identify the Fund, be maintained
for the Fund by the Custodian and be promptly provided to the Fund
at its request. The Custodian shall promptly send to the Fund
confirmation of each transfer to or from the account of the Fund in
the form of a written advice or notice of each such transaction,
and shall furnish to the Fund copies of daily transaction sheets
reflecting each day's transactions in the System for the account of
the Fund on the next business day.
(d) The Custodian shall promptly send to the Fund any report or other
communication received or obtained by the Custodian relating to
each System's accounting system, system of internal accounting
controls or procedures for safeguarding commercial paper deposited
in the System; the Custodian shall promptly send to the Fund any
report or other communication relating to the Custodian's internal
accounting controls and procedures for safeguarding commercial
paper deposited in any Approved Book-Entry System for Commercial
Paper; and the Custodian shall ensure that any agent appointed
pursuant to Paragraph K hereof or any subcustodian employed
pursuant to Section 2 hereof shall promptly send to the Fund and to
the Custodian any report or other communication relating to such
agent's or subcustodian's internal accounting controls and
procedures for safeguarding securities deposited in any Approved
Book-Entry System for Commercial Paper.
(e) The Custodian shall not act under this Paragraph M in the absence
of receipt of a certificate of an officer of the Fund that the
Board has approved the use of a particular Approved Book-Entry
System for Commercial Paper; the Custodian shall also obtain
appropriate assurance from an Authorized Officer that the Board
has annually reviewed and approved the continued use by the Fund of
each Approved Book-Entry System for Commercial Paper, so long as
such review and approval is required by Rule 17f-4 under the
Investment Company Act of 1940, and the Fund shall promptly notify
the Custodian if the use of an Approved Book-Entry System for
Commercial Paper is to be discontinued; at the request of the Fund,
the Custodian will terminate the use of any such System as promptly
as practicable.
(f) The Custodian (or subcustodian, if the Approved Book-Entry System
for Commercial Paper is maintained by the subcustodian) shall issue
physical commercial paper or promissory notes whenever requested to
do so by the Fund or in the event of an electronic system failure
which impedes issuance, transfer or custody of direct issue
commercial paper by book-entry.
15
<PAGE> 19
(g) Anything to the contrary in this Agreement notwithstanding, the
Custodian shall be liable to the Fund for any loss or damage to the
Fund resulting from use of any Approved Book-Entry System for
Commercial Paper by reason of any negligence, misfeasance or
misconduct of the Custodian or any of its agents or subcustodians
or of any of its or their employees or from any failure of the
Custodian or any such agent or subcustodian to enforce effectively
such rights as it may have against this System, the issuer of the
commercial paper or any other person; at the election of the Fund,
it shall be entitled to be subrogated to the rights of the
Custodian with respect to any claim against this System, the issuer
of the commercial paper or any other person which the Custodian may
have as a consequence of any such loss or damage if and to the
extent that the Fund has not been made whole for any such loss or
damage.
N. Segregated Account The Custodian shall upon receipt of proper instructions
establish and maintain a segregated account or accounts for and on behalf of
the Fund, into which account or accounts may be transferred cash and/or
securities, including securities maintained in an account by the Custodian
pursuant to Paragraph L hereof, (i) in accordance with the provisions of any
agreement among the Fund, the Custodian and any registered broker-dealer (or
any futures commission merchant), relating to compliance with the rules of
the Options Clearing Corporation and of any registered national securities
exchange (or of the Commodity Futures Trading Commission or of any contract
market or commodities exchange), or of any similar organization or
organizations, regarding escrow or deposit or other arrangements in
connection with transactions by the Fund, (ii) for purposes of segregating
cash or U.S. Government securities in connection with options purchased,
sold or written by the Fund or futures contracts or options thereon
purchased or sold by the Fund, (iii) for the purposes of compliance by the
Fund with the procedures required by Investment Company Act Release No.
10666, or any subsequent release or releases of the Securities and Exchange
Commission relating to the maintenance of segregated accounts by registered
investment companies and (iv) for other proper purposes, but only, in the
case of clause (iv), upon receipt of, in addition to proper instructions, a
certificate signed by two officers of the Fund, setting forth the purpose
such segregated account and declaring such purpose to be a proper purpose.
O. Ownership Certificates for Tax Purposes The Custodian shall execute
ownership and other certificates and affidavits for all federal and state
tax purposes in connection with receipt of income or other payments with
respect to securities of the Fund held by it and in connection with
transfers of securities.
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<PAGE> 20
P. Proxies The Custodian shall, with respect to the securities held by
it hereunder, cause to be promptly delivered to the Fund all forms of
proxies and all notices of meetings and any other notices or
announcements or other written information affecting or relating to
the securities, and upon receipt of proper instructions shall execute
and deliver or cause its nominee to execute and deliver such proxies
or other authorizations as may be required. Neither the Custodian nor
its nominee shall vote upon any of the securities or execute any proxy
to vote thereon or give any consent or take any other action with
respect thereto (except as otherwise herein provided) unless ordered
to do so by proper instructions.
Q. Communications Relating to Fund Portfolio Securities The Custodian
shall deliver promptly to the Fund all written information (including,
without limitation, pendency of call and maturities of securities and
participation interests and expirations of rights in connection
therewith and notices of exercise of call and put options written by
the Fund and the maturity of futures contracts purchased or sold by
the Fund) received by the Custodian from issuers and other persons
relating to the securities and participation interests being held for
the Fund. With respect to tender or exchange offers, the Custodian
shall deliver promptly to the Fund all written information received by
the Custodian from issuers and other persons relating to the
securities and participation interests whose tender or exchange is
sought and from the party (or his agents) making the tender or
exchange offer.
R. Exercise of Rights: Tender Offers In the case of tender offers,
similar offers to purchase or exercise rights (including, without
limitation, pendency of calls and maturities of securities and
participation interests and expirations of rights in connection
therewith and notices of exercise of call and put options and the
maturity of futures contracts) affecting or relating to securities and
participation interests held by the Custodian under this Agreement,
the Custodian shall have responsibility for promptly notifying the
Fund of all such offers in accordance with the standard of reasonable
care set forth in Section 8 hereof. For all such offers for which the
Custodian is responsible as provided in this Paragraph R, the Fund
shall have responsibility for providing the Custodian with all
necessary instructions in timely fashion. Upon receipt of proper
instructions, the custodian shall timely deliver to the issuer or
trustee thereof, or to the agent of either, warrants, puts, calls,
rights or similar securities for the purpose of being exercised or
sold upon proper receipt therefor and upon receipt of assurances
satisfactory to the Custodian that the new securities and cash, if
any, acquired by such action are to be delivered to the Custodian or
any subcustodian employed pursuant to Section 2 hereof. Upon receipt
of proper instructions, the Custodian shall timely deposit securities
upon invitations for tenders of securities upon proper receipt
therefor and upon receipt of assurances satisfactory to the Custodian
that the consideration to be paid or delivered or the tendered
securities are to be
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<PAGE> 21
returned to the Custodian or subcustodian employed pursuant to Section 2
hereof. Notwithstanding any provision of this Agreement to the contrary,
the Custodian shall take all necessary action, unless otherwise directed
to the contrary by proper instructions, to comply with the terms of all
mandatory or compulsory exchanges, calls, tenders, redemptions, or
similar rights of security ownership, and shall thereafter promptly
notify the Fund in writing of such action.
S. Depository Receipts The Custodian shall, upon receipt of proper
instructions, surrender or cause to be surrendered foreign securities to
the depository used by an issuer of American Depository Receipts,
European Depository Receipts or International Depository Receipts
(hereinafter collectively referred to as "ADRs") for such securities,
against a written receipt therefor adequately describing such securities
and written evidence satisfactory to the Custodian that the depository
has acknowledged receipt of instructions to issue with respect to such
securities ADRs in the name of a nominee of the Custodian or in the name
or nominee name of any subcustodian employed pursuant to Section 2
hereof, for delivery to the Custodian or such subcustodian at such place
as the Custodian or such subcustodian may from time to time designate.
The Custodian shall, upon receipt of proper instructions, surrender ADRs
to the issuer thereof against a written receipt therefor adequately
describing the ADRs surrendered and written evidence satisfactory to the
Custodian that the issuer of the ADRs has acknowledged receipt of
instructions to cause its depository to deliver the securities
underlying such ADRs to the Custodian or to a subcustodian employed
pursuant to Section 2 hereof.
T. Interest Bearing Call or Time Deposits The Custodian shall,
upon receipt of proper instructions, place interest bearing fixed term
and call deposits with the banking department of such banking
institution (other than the Custodian) and in such amounts as the Fund
may designate. Deposits may be denominated in U.S. Dollars or other
currencies. The Custodian shall include in its records with respect to
the assets of the Fund appropriate notation as to the amount and
currency of each such deposit, the accepting banking institution and
other appropriate details and shall retain such forms of advice or
receipt evidencing the deposit, if any, as may be forwarded to the
Custodian by the banking institution. Such deposits shall be deemed
portfolio securities of the applicable Fund for the purposes of this
Agreement, and the Custodian shall be responsible for the collection of
income from such accounts and the transmission of cash to and from such
accounts.
U. Options Futures Contracts and Foreign Currency Transactions
1. Options. The Custodians shall, upon receipt of proper
instructions and in accordance with the provisions of any
agreement between the Custodian, any registered broker-dealer
and, if necessary, the Fund,
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<PAGE> 22
relating to compliance with the rules of the Options Clearing
Corporation or of any registered national securities exchange or
similar organization or organizations, receive and retain
confirmations or other documents, if any, evidencing the
purchase or writing of an option on a security, securities
index, currency or other financial instrument or index by the
Fund; deposit and maintain in a segregated account of each Fund
separately, either physically or by book-entry in a Securities
System, securities subject to a covered call option written by
the Fund; and release and/or transfer such securities or other
assets only in accordance with a notice or other communication
evidencing the expiration, termination or exercise of such
covered option furnished by the Options Clearing Corporation,
the securities or options exchange on which such covered option
is traded or such organization as may be responsible for
handling such options transactions.
2. Futures Contracts The Custodian shall, upon receipt of
proper instructions, receive and retain confirmations and other
documents, if any, evidencing the purchase or sale of a futures
contract or an option on a futures contract by the Fund; deposit
and maintain in a segregated account, for the benefit of any
futures commission merchant, assets designated by the Fund as
initial, maintenance or variation "margin" deposits (including
mark-to-market payments) intended to secure the Fund's
performance of its obligations under any futures contracts
purchased or sold or any options on futures contracts written
by Fund, in accordance with the provisions of any agreement or
agreements among the Fund, the Custodian and such futures
commission merchant, designed to comply with the rules of the
Commodity Futures Trading Commission and/or of any contract
market or commodities exchange or similar organization regarding
such margin deposits or payments; and release and/or transfer
assets in such margin accounts only in accordance with any such
agreements or rules.
3. Foreign Exchange Transactions The Custodian shall,
pursuant to proper instructions, enter into or cause a
subcustodian to enter into foreign exchange contracts, currency
swaps or options to purchase and sell foreign currencies for
spot and future delivery on behalf and for the account of the
Fund. Such transactions may be undertaken by the Custodian or
subcustodian with such banking or financial institutions or
other currency brokers, as set forth in proper instructions.
Foreign exchange contracts, swaps and options shall be deemed to
be portfolio securities of the Fund; and accordingly, the
responsibility of the Custodian therefor shall be the same as
and no greater than the Custodian's responsibility in respect of
other portfolio securities of the Fund. The Custodian shall be
responsible for the transmittal to and receipt of cash from the
currency broker or banking or financial
19
<PAGE> 23
institution with which the contract or option is made, the
maintenance of proper records with respect to the transaction and
the maintenance of any segregated account required in connection
with the transaction. The Custodian shall have no duty with
respect to the selection of the currency brokers or banking or
financial institutions with which the Fund deals or for their
failure to comply with the terms of any contract or option.
Without limiting the foregoing, it is agreed that upon receipt of
proper instructions and insofar as funds are made available to
the Custodian for the purpose, the Custodian may (if determined
necessary by the Custodian to consummate a particular transaction
on behalf and for the account of the Fund) make free outgoing
payments of cash in the form of U.S. dollars or foreign currency
before receiving confirmation of a foreign exchange contract or
swap or confirmation that the countervalue currency completing
the foreign exchange contract or swap has been delivered or
received. The Custodian shall not be responsible for any costs
and interest charges which may be incurred by the Fund or the
Custodian as a result of the failure or delay of third parties to
deliver foreign exchange; provided that the Custodian shall
nevertheless be held to the standard of care set forth in, and
shall be liable to the Fund in accordance with, the provisions of
Section 8.
V. Actions Permitted Without Express Authority The Custodian may in its
discretion, without express authority from the Fund:
1) make payments to itself or others for minor expenses of handling
securities or other similar items relating to its duties under
this Agreement, provided, that all such payments shall be
accounted for by the Custodian to the Treasurer of the Fund;
2) surrender securities in temporary form for securities in
definitive form;
3) endorse for collection, in the name of the Fund, checks, drafts
and other negotiable instruments; and
4) in general, attend to all nondiscretionary details in connection
with the sale, exchange, substitution, purchase, transfer and
other dealings with the securities and property of the Fund
except as otherwise directed by the Fund.
4. Duties of Bank with Respect to Books of Account and Calculations of Net
Asset Value
The Bank shall as Agent (or as Custodian, as the case may be) keep such
books of account and render as at the close of business on each day a detailed
statement of the
20
<PAGE> 24
amounts received or paid out and of securities received or delivered for the
account of the Fund during said day and such other statements, including a
daily trial balance and inventory of the Fund's portfolio securities; and shall
furnish such other financial information and data as from time to time
requested by the Treasurer or any Authorized Officer of the Fund; and shall
compute and determine, as of the close of regular trading on the New York Stock
Exchange, or at such other time or times as the Board may determine, the net
asset value of a share in the Fund, such computation and determination to be
made in accordance with the governing documents of the Fund and the votes and
instructions of the Board at the time in force and applicable and promptly
notify the Fund and its investment adviser and such other persons as the Fund
may request of the result of such computation and determination. In computing
the net asset value the Custodian may rely upon security quotations received by
telephone or otherwise from sources or pricing services designated by the Fund
by proper instructions, and may further rely upon information furnished to it
by any authorized officer of the Fund relative (a) to liabilities of the Fund
not appearing on its books of account, (b) to the existence, status and proper
treatment of any reserve or reserves, (c) to any procedures established by the
Board regarding the valuation of portfolio securities, and (d) to the value to
be assigned to any bond, note, debenture, Treasury bill, repurchase agreement,
subscription right, security, participation interest or other asset or property
for which market quotations are not readily available.
5. Records and Miscellaneous Duties
The Bank shall create, maintain and preserve all records relating to its
activities and obligations under this Agreement in such manner as will meet the
obligations of the Fund under the Investment Company Act of 1940, with
particular attention to Section 31 thereof and Rules 31a-1 and 31a-2 thereunder,
applicable federal and state tax laws and any other law or administrative rules
or procedures which may be applicable to the Fund. All books of account and
records maintained by the Bank in connection with the performance of its duties
under this Agreement shall be the property of the Fund, shall at all times
during the regular business hours of the Bank be open for inspection by
authorized officers, employees or agents of the Fund, and in the event of
termination of this Agreement shall be delivered to the Fund or to such other
person or persons as shall be designated by the Fund. Disposition of any account
or record after any required period of preservation shall be only in accordance
with specific instructions received from the Fund. The Bank shall assist
generally in the preparation of reports to shareholders, audits of accounts, and
other ministerial matters of like nature; and, upon request, shall furnish the
Fund's auditors with an attested inventory of securities held with appropriate
information as to securities in transit or in the process of purchase or sale
and with such other information as said auditors may from time to time request.
The Custodian shall also maintain records of all receipts, deliveries and
locations of such securities, together with a current inventory thereof, and
shall conduct periodic verifications (including sampling counts at the
Custodian) of certificates representing bonds and other securities for which it
is responsible under this Agreement in such manner as the Custodian shall
determine from time to time to be advisable in order to verify the accuracy of
such
21
<PAGE> 25
inventory. The Bank shall not disclose or use any books or records it has
prepared or maintained by reason of this Agreement in any manner except as
expressly authorized herein or directed by the Fund, and the Bank shall keep
confidential any information obtained by reason of this Agreement.
6. Opinion of Fund's Independent Public Accountants
The Custodian shall take all reasonable action, as the Fund may from time to
time request, to enable the Fund to obtain from year to year favorable opinions
from the Fund's independent public accountants with respect to its activities
hereunder in connection with the preparation of the Fund's registration
statement and Form N-SAR or other periodic reports to the Securities and
Exchange Commission and with respect to any other requirements of such
Commission.
7. Compensation and Expenses of Bank
The Bank shall be entitled to reasonable compensation for its services as
Custodian and Agent, as agreed upon from time to time between the Fund and the
Bank. The Bank shall be entitled to receive from the Fund on demand
reimbursement for its cash disbursements, expenses and charges, including
counsel fees, in connection with its duties as Custodian and Agent hereunder,
but excluding salaries and usual overhead expenses.
8. Responsibility of Bank
So long as and to the extent that it is in the exercise of reasonable care, the
Bank as Custodian and Agent shall be held harmless in acting upon any notice,
request, consent, certificate or other instrument reasonably believed by it to
be genuine and to be signed by the proper party or parties.
The Bank as Custodian and Agent shall be entitled to rely on and may act upon
advice of counsel (who may be counsel for the Fund) on all matters, and shall
be without liability for any action reasonably taken or omitted pursuant to
such advice.
The Bank as Custodian and Agent shall be held to the exercise of reasonable
care in carrying out the provisions of this Agreement but shall be liable only
for its own negligent or bad faith acts or failures to act. Notwithstanding the
foregoing, nothing contained in this paragraph is intended to nor shall it be
construed to modify the standards of care and responsibility set forth in
Section 2 hereof with respect to subcustodians and in subparagraph f of
Paragraph L of Section 3 hereof with respect to Securities Systems and in
subparagraph g of Paragraph M of Section 3 hereof with respect to an Approved
Book-Entry System for Commercial Paper.
The Custodian shall be liable for the acts or omissions of a foreign banking
institution to the same extent as set forth with respect to subcustodians
generally in Section 2 hereof,
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<PAGE> 26
provided that, regardless of whether assets are maintained in the custody of a
foreign banking institution, a foreign securities depository or a branch of a
U.S. bank, the Custodian shall not be liable for any loss, damage, cost,
expense, liability or claim resulting from, or caused by, the direction of or
authorization by the Fund to maintain custody of any securities or cash of the
Fund in a foreign country including, but not limited to, losses resulting from
nationalization, expropriation, currency restrictions, acts of war, civil war
or terrorism, insurrection, revolution, military or usurped powers, nuclear
fission, fusion or radiation, earthquake, storm or other disturbance of nature
or acts of God.
If the Fund requires the Bank in any capacity to take any action with respect
to securities, which action involves the payment of money or which action may,
in the opinion of the Bank, result in the Bank or its nominee assigned to the
Fund being liable for the payment of money or incurring liability of some other
form, the Fund, as a prerequisite to requiring the Custodian to take such
action, shall provide indemnity to the Custodian in an amount and form
satisfactory to it.
If the Fund requires the Custodian, its affiliates, subsidiaries or agents, to
advance cash or securities for any purpose (including but not limited to
securities settlements, foreign exchange contracts and assumed settlement) or
in the event that the Custodian or its nominee shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Contract, except such as may arise from its or its
nominee's own negligent action, negligent failure to act or willful misconduct,
any property at any time held for the account of the Fund shall be security
therefor and should the Fund fail to repay the Custodian promptly, the
Custodian shall be entitled to utilize available cash and to dispose of the
Fund assets to the extent necessary to obtain reimbursement.
9. Persons Having Access to Assets of the Fund
(i) No trustee, director, general partner, officer, employee or agent
of the Fund shall have physical access to the assets of the Fund
held by the Custodian or be authorized or permitted to withdraw
any investments of the Fund, nor shall the Custodian deliver any
assets of the Fund to any such person. No officer or director,
employee or agent of the Custodian who holds any similar position
with the Fund or the investment adviser of the Fund shall have
access to the assets of the Fund.
(ii) Access to assets of the Fund held hereunder shall only be
available to duly Authorized Officers, employees, representatives
or agents of the Custodian or other persons or entities for whose
actions the Custodian shall be responsible to the extent permitted
hereunder, or to the Fund's independent public accountants in
connection with their auditing duties performed on behalf of the
Fund.
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<PAGE> 27
(iii) Nothing in this Section 9 shall prohibit any Authorized Officer,
employee or agent of the Fund or of the investment adviser of
the Fund from giving instructions to the Custodian or
executing a certificate so long as it does not result in
delivery of or access to assets of the Fund prohibited by
paragraph (i) of this Section 9.
10. Effective Period, Termination and Amendment; Successor Custodian
This Agreement shall become effective as of its execution, shall continue in
full force and effect until terminated as hereinafter provided, may be amended
at any time by mutual agreement of the parties hereto and may be terminated by
either party by an instrument in writing delivered or mailed, postage prepaid to
the other party, such termination to take effect not sooner than sixty (60) days
after the date of such delivery or mailing; provided, that the Fund may at any
time by action of its Board, (i) substitute another bank or trust company for
the Custodian by giving notice as described above to the Custodian, or (ii)
immediately terminate this Agreement in the event of the appointment of a
conservator or receiver for the Custodian by the Federal Deposit Insurance
Corporation or by the Banking Commissioner of The Commonwealth of Massachusetts
or upon the happening of a like event at the direction of an appropriate
regulatory agency or court of competent jurisdiction. Upon termination of the
Agreement, the Fund shall pay to the Custodian such compensation as may be due
as of the date of such termination and shall likewise reimburse the Custodian
for its costs, expenses and disbursements.
Unless the holders of a majority of the outstanding shares of the Fund vote to
have the securities, funds and other properties held hereunder delivered and
paid over to some other bank or trust company, specified in the vote, having not
less than $2,000,000 of aggregate capital, surplus and undivided profits, as
shown by its last published report, and meeting such other qualifications for
custodians set forth in the Investment Company Act of 1940, the Board shall,
forthwith, upon giving or receiving notice of termination of this Agreement,
appoint as successor custodian, a bank or trust company having such
qualifications. The Bank, as Custodian, Agent or otherwise, shall, upon
termination of the Agreement, deliver to such successor custodian, all
securities then held hereunder and all funds or other properties of the Fund
deposited with or held by the Bank hereunder and all books of account and
records kept by the Bank pursuant to this Agreement, and all documents held by
the Bank relative thereto. In the event that no such vote has been adopted by
the shareholders and that no written order designating a successor custodian
shall have been delivered to the Bank on or before the date when such
termination shall become effective, then the Bank shall not deliver the
securities, funds and other properties of the Fund to the Fund but shall have
the right to deliver to a bank or trust company doing business in Boston,
Massachusetts of its own selection, having an aggregate capital, surplus and
undivided profits, as shown by its last published report, of not less than
$2,000,000, all funds, securities and properties of the Fund held by or
deposited with the Bank, and all books of account and records kept by the Bank
pursuant
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<PAGE> 28
to this Agreement, and all documents held by the Bank relative thereto.
Thereafter such bank or trust company shall be the successor of the Custodian
under this Agreement.
11. Interpretive and Additional Provisions
In connection with the operation of this Agreement, the Custodian and
the Fund may from time to time agree on such provisions interpretive of or in
addition to the provisions of this Agreement as may in their joint opinion be
consistent with the general tenor of this Agreement. Any such interpretive or
additional provisions shall be in a writing signed by both parties and shall be
annexed hereto, provided that no such interpretive or additional provisions
shall contravene any applicable federal or state regulations or any provision
of the governing instruments of the Fund. No interpretive or additional
provisions made as provided in the preceding sentence shall be deemed to be an
amendment of this Agreement.
12. Certification as to Authorized Officers
The Secretary of the Fund shall at all times maintain on file with the
Bank his certification to the Bank, in such form as may be acceptable to the
Bank, of the names and signatures of the Authorized Officers of each fund, it
being understood that upon the occurrence of any change in the information set
forth in the most recent certification on file (including without limitation
any person named in the most recent certification who has ceased to hold the
office designated therein), the Secretary of the Fund shall sign a new or
amended certification setting forth the change and the new, additional or
omitted names or signatures. The Bank shall be entitled to rely and act upon
instructions from any officers named in the most recent certification.
13. Notices
Notices and other writings delivered or mailed postage prepaid to the
Fund addressed to Thomas H. Drohan, John Hancock Advisers, Inc., 101 Huntington
Avenue, Boston, Massachusetts 02199, or to such other address as the Fund may
have designated to the Bank, in writing, or to State Street Bank and Trust
Company, shall be deemed to have been properly delivered or given hereunder to
the respective addresses.
14. Massachusetts Law to Apply; Limitations on liability
This Agreement shall be construed and the provisions thereof
interpreted under and in accordance with the laws of The Commonwealth
of Massachusetts.
If the Fund is a Massachusetts business trust, the Custodian expressly
acknowledges the provision in the Fund's declaration of trust limiting the
personal liability of the trustees and shareholders of the Fund; and the
Custodian agrees that it shall have recourse only to the assets of the Fund for
the payment of claims or obligations as between the Custodian
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<PAGE> 29
and the Fund arising out of this Agreement, and the Custodian shall not seek
satisfaction of any such claim or obligation from the trustees or shareholders
of the Fund. Each Fund, and each series or portfolio of a Fund, shall be liable
only for its own obligations to the Custodian under this Agreement and shall
not be jointly or severally liable for the obligations of any other Fund,
series or portfolio hereunder.
15. Adoption of the Agreement by the Fund
The Fund represents that its Board has approved this Agreement and has
duly authorized the Fund to adopt this Agreement. This Agreement shall be
deemed to supersede and terminate, as of the date first written above, all
prior agreements between the Fund and the Bank relating to the custody of the
Fund's assets.
* * * * *
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<PAGE> 30
In Witness Whereof, the parties hereto have caused this agreement to be
executed in duplicate as of the date first written above by their respective
officers thereunto duly authorized.
John Hancock Mutual Funds listed on Appendix A
by: /s/ James B. Little
-------------------------------------------
James B. Little
Senior Vice President and
Chief Financial Officer
Attest:
/s/ Avery P. Maher
- ------------------
State Street Bank and Trust Company
by: /s/ Ronald E. Logue
-------------------------------
Attest:
/s/ Sharon Baker Morin
- ----------------------
27
<PAGE> 31
APPENDIX A
[EFFECTIVE JUNE 15, 1994]
John Hancock Cash Management Fund
John Hancock World Fund
John Hancock Freedom Pacific Basin Equities Fund
John Hancock Freedom Global Rx Fund
Patriot Premium Dividend Fund I
Patriot Premium Dividend Fund II
Patriot Select Dividend Trust
Patriot Global Dividend Fund
Patriot Preferred Dividend Fund
Freedom Investment Trust II
John Hancock Freedom Global Fund
John Hancock Freedom Global Income Fund
John Hancock Short-Term Strategic Income Fund
John Hancock Freedom International Fund
Freedom Investment Trust III
John Hancock Discovery Fund
John Hancock Freedom Environmental Fund
The Southeastern Thrift and Bank Fund, Inc.
28
<PAGE> 1
Custodian
Exhibit 8a
September 28, 1994
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
Re: John Hancock Global Retail Fund
a series of John Hancock World Fund
Dear Sirs:
John Hancock World Fund (the "Trust"), a Massachusetts business
trust, on behalf of John Hancock Global Retail Fund, a series of the Trust
(the "Fund"); hereby notifies State Street Bank and Trust Company
(the "Bank") that the Trust desires to place and maintain the Fund's
securities and cash in the custody of the Bank pursuant to the Master
Custodian Agreement between John Hancock Mutual Funds and the Bank dated
June 15, 1994.
If the Bank agrees to provide such services, please sign below and
return a signed copy of this letter to the undersigned.
STATE STREET BANK JOHN HANCOCK WORLD FUND
AND TRUST COMPANY On behalf of John Hancock
Global Retail Fund
By: /s/Theresa McGuire By: /s/Robert G. Freedman
------------------ ---------------------
Name: Theresa McGuire Name:
Title: Vice President Title:
Attest: /s/ William M. Mauier Attest: /s/ Avery P. Maher
--------------------- ------------------
<PAGE> 1
Exhibit 8b
AMENDMENT TO MASTER CUSTODIAN AGREEMENT
Agreement made by and between State Street Bank and Trust Company (the
Custodian ) and each investment company advised by John Hancock Advisers, Inc.
which has adopted the Master Custodian Agreement (each a Fund ).
WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated June 15, 1994 (the Master Custodian Agreement ) governing the terms and
conditions under which the Custodian maintains custody of the securities and
other assets of the Fund; and
WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund s securities and other
non-cash property in the custody of certain foreign sub-custodians in
conformity with the requirements of Rule 17f-5 under the Investment Company Act
of 1940, as amended;
NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Master Custodian Agreement
by the addition of the following terms and provisions;
1. Notwithstanding any provisions to the contrary set forth in the
Master Custodian Agreement, the Custodian may hold securities and other
non-cash property for all of its customers, including the Fund, with a foreign
sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, PROVIDED HOWEVER, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by book-entry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian, Custodian or of others.
2. Except as specifically superseded or modified herein, the terms
and provisions of the Master Custodian Agreement shall continue to apply with
full force and effect.
IN WITNESS WHEREOF, each of the parties has caused this instrument to
be executed in duplicate by its duly authorized representative this 15th day of
September, 1995.
JOHN HANCOCK FUNDS LISTED ON APPENDIX A
By: /s/ James B. Little
-------------------------
Title: Senior Vice President
-------------------------
STATE STREET BANK AND TRUST COMPANY
By: /s/ Ronald E. Logue
-------------------------
Title: Executive Vice President
-------------------------
<PAGE> 1
Exhibit 9
JOHN HANCOCK WORLD FUND
TRANSFER AGENCY AND SERVICE AGREEMENT
Dated January 1, 1991
<PAGE> 2
TRANSFER AGENCY AND SERVICE AGREEMENT
AGREEMENT made as of the 1st day of January, 1991 by and between John
Hancock World Fund, a Massachusetts business trust, having its principal office
and place of business at 101 Huntington Avenue, Boston, Massachusetts (the
"Fund"), and John Hancock Fund Services, Inc., a Delaware corporation having its
principal office and place of business at 101 Huntington Avenue, Boston,
Massachusetts 02117 ("JHFSI").
WITNESSETH:
WHEREAS, the Fund desires to appoint JHFSI as its transfer agent,
dividend disbursing agent and agent in connection with certain other activities,
and JHFSI desires to accept such appointment;
WHEREAS, the Fund is authorized to issue shares in one series, with each
such series representing interests in a separate portfolio of securities and
other assets; and
WHEREAS, the Fund intends to initially offer Shares in one series, the
Pacific Basin Equities Portfolio; (such series, together with all other series
subsequently established by the Fund and made subject to this Agreement in
accordance with Article 8, being herein referred to as the "Fund(s)");
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:
ARTICLE 1 TERMS OF APPOINTMENT: DUTIES OF JHFSI
1.01 Subject to the terms and conditions set forth in this Agreement,
the Fund hereby,
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<PAGE> 3
employs and appoints JHFSI to act as, and JHFSI agrees to act as transfer agent
for the Fund's authorized and issued shares of capital stock ("Shares"), with
any accumulation, open-account or similar plans provided to the shareholders of
the Fund ("Shareholders") and set out in the currently effective prospectus of
the Fund, including without limitation any periodic investment plan or periodic
withdrawal program.
1.02 JHFSI agrees that it will perform the following services:
(a) In accordance with procedures established from time to time by
agreement between the Fund and JHFSI, JHFSI shall:
(i) Receive for acceptance, orders for the purchase of
Shares, and promptly deliver payment and appropriate
documentation therefor to the Custodian of the Fund
authorized pursuant to the Declaration of Trust of the
Fund (the "Custodian");
(ii) Pursuant to purchase orders, issue the appropriate
number of Shares and hold such Shares in the
appropriate Shareholder account;
(iii) Receive for acceptance, redemption requests and
redemption directions and deliver the appropriate
documentation therefor to the Custodian;
(iv) At the appropriate time as and when it receives monies
paid to it by the Custodian with respect to any
redemption, pay over or cause to be paid over in the
appropriate manner such monies as instructed by the
redeeming Shareholders;
(v) Effect transfers of Shares by the registered owners
thereof upon receipt of appropriate instructions;
(vi) Prepare and transmit payments for dividends and
distributions declared by the Fund; and
(vii) Maintain records of account for and advise the Fund
and its Shareholders as to the foregoing; and
(viii) Record the issuance of Shares of the Fund and maintain
pursuant to SEC
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<PAGE> 4
Rule 17Ad-10(e) a record of the total number of Shares
of the Fund which are authorized, based upon data
provided to it by the Fund, and issued and outstanding.
JHFSI shall also provide the Fund on a regular basis
with the total number of Shares which are authorized
and issued and outstanding and shall have no
obligation, when recording the issuance of Shares, to
monitor the issuance of such Shares or to take
cognizance of any laws relating to the issue or sale of
such Shares, which functions shall be the sole
responsibility of the Fund.
(b) In addition to and not in lieu of the services set forth in the
above paragraph (a), JHFSI shall: (i) perform all of the customary services of a
transfer agent, dividend disbursing agent and, as relevant, agent in connection
with accumulation, open-account or similar plans (including without limitation
any periodic investment plan or periodic withdrawal program); including but not
limited to: maintaining all Shareholder accounts, preparing Shareholder meeting
lists, mailing proxies, receiving and tabulating proxies, mailing Shareholder
reports and prospectuses to current Shareholders, withholding taxes on U.S.
resident and non-resident alien accounts, preparing and filing U.S. Treasury
Department Forms 1099 and other appropriate forms required with respect to
dividends and distributions by federal authorities for all Shareholders,
preparing and mailing confirmations forms and statements of account to
Shareholders for all purchases and redemptions of Shares and other confirmable
transactions in Shareholder accounts, preparing and mailing activity statements
for Shareholders, and providing Shareholder account information and (ii) provide
a system which will enable the Fund to monitor the total number of Shares sold
in each State.
(c) In addition, the Fund shall (i) identify to JHFSI in writing
those transactions and assets to be treated as exempt from the blue sky
reporting for each State and (ii) verify the establishment of transactions for
each State on the system prior to activation and thereafter monitor the daily
activity for each State. The responsibility of JHFSI for the Fund's blue sky
State registration status is solely limited to the initial establishment of
transactions subject to blue
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<PAGE> 5
sky compliance by the Fund and the reporting of such transactions to the Fund as
provided above.
(d) Additionally, JHFSI shall:
(i) Utilize a system to identify all share transactions
which involve purchase and redemption orders that are processed at a
time other than the time of the computation of net asset value per share
next computed after receipt of such orders, and shall compute the net
effect upon the Fund of such transactions so identified on a daily and
cumulative basis.
(ii) If upon any day the cumulative net effect of such
transactions upon the Fund is negative and exceed a dollar amount
equivalent to 1/2 of 1 cent per share, JHFSI shall promptly make a
payment to the Fund in cash or through the use of a credit, in the
manner described in paragraph (iv) below, in such amount as may be
necessary to reduce the negative cumulative net effect to less than 1/2
of 1 cent per share.
(iii) If on the last business day of any month the cumulative
net effect upon the Fund (adjusted by the amount of all prior payments
and credits by JHFSI and the Fund) is negative, the Fund shall be
entitled to a reduction in the fee next payable under the Agreement by
an equivalent amount, except as provided in paragraph (iv) below. If on
the last business day in any month the cumulative net effect upon the
Fund (adjusted by the amount of all prior payments and credits by JHFSI
and the Fund) is positive, JHFSI shall be entitled to recover certain
past payments and reductions in fees, and to credit against all future
payments and fee reductions that may be required under the Agreement as
herein described in paragraph (iv) below.
(iv) At the end of each month, any positive cumulative net
effect upon the Fund shall be deemed to be a credit to JHFSI which shall
first be applied to permit JHFSI to recover any prior cash payments and
fee reductions made by it to the Fund under paragraphs (ii) and (iii)
above during the calendar year, by increasing the amount of the monthly
fee under the Agreement next payable in an amount equal to prior
payments and
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<PAGE> 6
fee reductions made by JHFSI during such calendar year, but not
exceeding the sum of that month's credit and credits arising in prior
months during such calendar year to the extent such prior credits have
not previously been utilized as contemplated by this paragraph. Any
portion of a credit to JHFSI not so used by it shall remain as a credit
to be used as payment against the amount of any future negative
cumulative net effects that would otherwise require a cash payment or
fee reduction to be made to the Fund pursuant to paragraphs (ii) or
(iii) above (regardless of whether or not the credit or any portion
thereof arose in the same calendar year as that in which the negative
cumulative net effects or any portion thereof arose).
(v) JHFSI shall supply to the Fund from time to time, as
mutually agreed upon, reports summarizing the transactions identified
pursuant to paragraph (i) above, and the daily and cumulative net
effects of such transactions, and shall advise the Fund at the end of
each month of the net cumulative effect at such time. JHFSI shall
promptly advise the Fund if at any time the cumulative net effect
exceeds a dollar amount equivalent to 1/2 of 1 cent per share.
(vi) In the event that this Agreement is terminated for
whatever cause, or this provision 1.02 (d) is terminated pursuant to
paragraph (vii) below, the Fund shall promptly pay to JHFSI an amount in
cash equal to the amount by which the cumulative net effect upon the
Fund is positive or, if the cumulative net effect upon the Fund is
negative, JHFSI shall promptly pay to the Fund an amount in cash equal
to the amount of such cumulative net effect.
(vii) This provision 1.02 (d) of the Agreement may be
terminated by JHFSI at any time without cause, effective as of the close
of business on the date written notice (which may be by telex) is
received by the Fund.
Procedures applicable to certain of these services may be establishes
from time to time by agreement between the Fund and JHFSI.
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<PAGE> 7
ARTICLE 2 FEES AND EXPENSES
2.01 For performance by JHFSI pursuant to this Agreement, the Fund
agrees to pay JHFSI an annual maintenance fee for each Shareholder account as
set out in the initial fee schedule attached hereto. Such fees and out-of-pocket
expenses and advances identified under Section 2.02 below may be changed from
time to time subject to mutual written agreement between the Fund and JHFSI.
2.02 In addition to the fee paid under Section 2.01 above. the Fund
agrees to reimburse JHFSI for out-of-pocket expenses or advances incurred by
JHFSI for the items set out in the fee schedule attached hereto. In addition,
any other expenses incurred by JHFSI at the request or with the consent of the
Fund, will be reimbursed by the Fund.
2.03 The Fund agrees to pay all fees and reimbursable expenses
promptly following the mailing of the respective billing notice. Postage for
mailing of dividends, proxies, Fund reports and other mailings to all
shareholder accounts shall be advanced to JHFSI by the Fund at least seven (7)
days prior to the mailing date of such materials.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF JHFSI
JHFSI represents and warrants to the Fund that:
3.01 It is a Delaware corporation duly organized and existing and in
good standing under the laws of the State of Delaware, and as a Foreign
Corporation under the Laws of the Commonwealth of Massachusetts.
3.02 It is duly qualified to carry on its business in the
Commonwealth of Massachusetts.
3.03 It is empowered under applicable laws and by its charter and
By-Laws to enter into and perform this Agreement.
3.04 All requisite corporate proceedings have been taken to authorize
it to enter into and perform this Agreement
-7-
<PAGE> 8
3.05 It has and will continue to have access to the necessary
facilities, equipment and personnel to perform its duties and obligations under
this Agreement.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE FUND
The Fund represents and warrants to JHFSI that:
4.01 It is a business trust duly organized and existing and in good
standing under the laws of the Commonwealth of Massachusetts.
4.02 It is empowered under applicable laws and by its Declaration of
Trust and By-Laws to enter into and perform this Agreement.
4.03 All Trust proceedings required by said Declaration of Trust and
By-Laws have been taken to authorize it to enter into and perform this
Agreement.
4.04 It is an open-end and diversified investment company registered
under the Investment Company Act of 1940.
4.05 A registration statement under the Securities Act of 1933 is
currently effective and will remain effective, and appropriate state securities
law filings have been made and will continue to be made, with respect to all
Shares of the Fund being offered for sale.
ARTICLE 5 INDEMNIFICATION
5.01 JHFSI shall not be responsible for, and the Fund shall indemnify
and hold JHFSI harmless from and against, any and all losses, damages, costs,
charges, counsel fees, payments, expenses and liabilities arising out of or
attributable to:
(a) All actions of JHFSI or its agent or subcontractors required to
be taken pursuant to this Agreement, provided that such actions are taken in
good faith and without negligence or willful misconduct.
(b) The Fund's refusal or failure to comply with the terms of this
Agreement, or which arise out of the Fund's lack of good faith, negligence or
willful misconduct or which arise out of the breach of any representation or
warranty of the Fund hereunder.
(c) The reliance on or use by JHFSI or its agents or subcontractors
of information,
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<PAGE> 9
records and documents which (i) are received by JHFSI or its agents or
subcontractors and furnished to it by or on behalf of the Fund, and (ii) have
been prepared and/or maintained by the Fund or any other person or firm on
behalf of the Fund.
(d) The reliance on, or the carrying out by JHFSI or its agents or
subcontractors of any instructions or requests of the Fund.
(e) The offer or sale of Shares in violation of any requirement
under the federal securities laws or regulations or the securities laws or
regulations of any state that such Shares be registered in such state or in
violation of any stop order or other determination or ruling by any federal
agency or any state with respect to the offer or sale of such Shares in such
state.
5.02 JHFSI shall indemnify and hold the Fund harmless from and
against any and all losses, damages, costs, charges, counsel fees, payments,
expenses and liabilities arising out of or attributed to any action or failure
or omission to act by JHFSI as a result of JHFSI's lack of good faith,
negligence or willful misconduct.
5.03 At any time JHFSI may apply to any officer of the Fund for
instructions, and may consult with legal counsel with respect to any matter
arising in connection with the services to be performed by JHFSI under this
Agreement, and JHFSI and its agents or subcontractors shall not be liable and
shall be indemnified by the Fund for any action taken or omitted by it in
reliance upon such instructions or upon the opinion of such counsel. JHFSI, its
agents and subcontractors shall be protected and indemnified in acting upon any
paper or document furnished by or on behalf of the Fund, reasonably believed to
be genuine and to have been signed by the proper person or persons, or upon any
instruction, information, data, records or documents provided JHFSI or its
agents or subcontractors by machine readable input, telex, CRT data entry or
other similar means authorized by the Fund, and shall not be held to have notice
of any change of authority of any person, until receipt of written notice
thereof from the Fund. JHFSI, its agents and subcontractors shall also be
protected and indemnified in recognizing stock certificates which are reasonably
believed to bear the proper manual or facsimile signatures of the officer of
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<PAGE> 10
the Fund, and the proper countersignature of any former transfer agent or
registrar, or of a co-transfer agent or co-registrar.
5.04 In the event either party is unable to perform its obligations
under the terms of this Agreement because of acts of God, strikes, equipment or
transmission failure or damage reasonably beyond its control, or other causes
reasonably beyond its control, such party shall not be liable for damages to the
other for any damages resulting from such failure to perform or otherwise from
such causes.
5.05 Neither party to this Agreement shall be liable to the other
party for consequential damages under any provision of this Agreement or for any
act or failure to act hereunder.
5.06 In order that the indemnification provisions contained in this
Article 5 shall apply, upon the assertion of a claim for which either party may
be required to indemnify the other, the party seeking indemnification shall
promptly notify the other party of such assertion, and shall keep the other
party advised with respect to all developments concerning such claim. The party
who may be required to indemnify shall have the option to participate with the
party seeking indemnification in the defense of such claim. The party seeking
indemnification shall in no case confess any claim or make any compromise in any
case in which the other party may be required to indemnify it except with the
other party's prior written consent.
ARTICLE 6 COVENANTS OF THE FUND AND JHFSI
6.01 The Fund shall promptly furnish to JHFSI the following:
(a) A certified copy of the resolution of the Trustee of the Fund
authorizing the appointment of JHFSI and the execution and delivery of this
Agreement.
(b) A copy of the Declaration of Trust and By-Laws of the Fund and
all amendments thereto.
6.02 JHFSI hereby agrees to establish and maintain facilities and
procedures reasonably acceptable to the Fund for safekeeping of stock
certificates, check forms and facsimile signature imprinting devices, if any;
and for the preparation or use, and for keeping account of, such
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<PAGE> 11
certificates, forms and devices.
6.03 JHFSI shall keep records relating to the services to be
performed hereunder, in the form and manner as it may deem advisable. To the
extent required by Section 31 of the Investment Company Act of 1940, as amended,
and the Rules thereunder, JHFSI agrees that all such records prepared or
maintained by JHFSI relating to the services to be performed by JHFSI hereunder
are the property of the Fund and will be preserved, maintained and made
available in accordance with such Section and Rules, and will be surrendered to
the Fund on and in accordance with its request.
6.04 JHFSI and the Fund agree that all books, records, information
and data pertaining to the business of the other party which are exchanged or
received pursuant to the negotiation or the carrying out of this Agreement shall
remain confidential, and shall not be voluntarily disclosed to any other person,
except as may be required by law.
6.05 In case of any requests or demands for the inspection of the
Shareholder records of the Fund, JHFSI will endeavor to notify the Fund and to
secure instructions from an authorized officer of the Fund as to such
instruction. JHFSI reserves the right, however, to exhibit the Shareholder
records to any person whenever it is advised by its counsel that it may be held
liable for the failure to exhibit the Shareholder records to such person.
ARTICLE 7 TERMINATION OF AGREEMENT
7.01 This Agreement may be terminated by either party upon one
hundred twenty (120) days written notice to the other.
7.02 Should the Fund exercise its right to terminate, all
out-of-pocket expenses associated with the movement of records and material will
be borne by the Fund. Additionally, JHFSI reserves the right to charge for any
other reasonable expenses associated with such termination.
ARTICLE 8 ADDITIONAL FUNDS
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<PAGE> 12
8.01 In the event that the Fund establishes one or more of series of
Shares in addition to the Pacific Basin Equities Portfolio with respect to which
it desires to have JHFSI render services as a transfer agent under the terms
hereof, it shall so notify JHFSI in writing, and if JHFSI agrees in writing to
provide such services, such series of Shares shall become a Fund hereunder.
ARTICLE 9 ASSIGNMENT
9.01 Except as provided in Section 9.03 below, neither this Agreement
nor any rights or obligations hereunder may be assigned by either party without
the written consent of the other party.
9.02 This Agreement shall inure to the benefit of and be binding upon
the parties and their respective permitted successors and assigns.
9.03 JHFSI may, without further consent on the part of the Fund,
subcontract for the performance hereof with (i) Boston Financial Data Services,
Inc., a Massachusetts corporation ("BFDS") which is duly registered as a
transfer agent pursuant to Section 17A (c)(1) of the Securities Exchange Act of
1934 ("Section 17A (c)(1)"), (ii) 440 Financial Group, (iii) or any other entity
JHFSI deems appropriate in order to comply with the terms and conditions of this
Agreement, provided, however, that JHFSI shall be as fully responsible to the
Fund for the acts and omissions of any subcontractor as it is for its own acts
and omissions.
ARTICLE 10 AMENDMENT
10.01 This Agreement may be amended or modified by a written agreement
executed by both parties and authorized or approved by a resolution of the
Trustees of the Fund.
ARTICLE 11 MASSACHUSETTS LAW TO APPLY
11.01 This Agreement shall be construed and the provisions thereof
interpreted under and In accordance with the laws of The Commonwealth of
Massachusetts.
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<PAGE> 13
ARTICLE 12 MERGER OF AGREEMENT
12.01 This Agreement constitutes the entire agreement between the
parties hereto and supersedes any prior agreement with respect to the subject
hereof whether oral or written.
ARTICLE 13 LIMITATION ON LIABILITY
13.01 The name John Hancock World Fund is the designation of the
Trustees under the Declaration of Trust dated August 25, 1986, as amended from
time to time. The obligations of such Trust as not personally binding upon, nor
shall resort be had to the property of, any of the Trustees, shareholders,
officers, employees or agents of such Trust, but the Trust's property only shall
be bound.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their names and on their behalf under their seals by and through
their duly authorized officers, as of the day and year first above written.
ATTEST: JOHN HANCOCK WORLD FUND
/s/ Thomas H. Drohan BY: /s/ Edward J. Boudreau, Jr.
- -------------------- ---------------------------
ATTEST: JOHN HANCOCK FUND SERVICES, INC.
/s/ Thomas H. Drohan BY: /s/ Robert H. Watts
- -------------------- -------------------
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<PAGE> 1
Exhibit 9a
June 24, 1991
Mr. David King
President
John Hancock Fund Services
P.O. Box 9114
Boston, MA 02199-9114
Subject: John Hancock World Fund --
John Hancock Global Rx Fund
Dear Mr. King:
Pursuant to Article 8.01 of the Transfer Agency and Service Agreement dated
January 1, 1991, between John Hancock World Fund (the "Trust") and John Hancock
Fund Service, Inc., the Trust hereby notifies you that it desires to have you
render services as transfer agent to the John Hancock Global Rx Fund, a new
series of the Trust, and that such series of shares become a Fund under the
Agreement.
If John Hancock Fund Services agrees to provide such services, please sign below
and return a signed copy to me.
John Hancock Fund Services, Inc. John Hancock World Fund
By: /s/David A. King By: /s/Richard T. Foote
------------------------ ------------------------
President Assistant Secretary
Attest: /s/Carmen Pelissier Attest: /s/Susan S. Newton
------------------- -------------------
<PAGE> 1
Exhibit 9b
September 28, 1994
Mr. David King
President
John Hancock Fund Services
P.O. Box 9114
Boston, MA 02199-9114
Subject: John Hancock World Fund
John Hancock Global Retail Fund
Dear Mr. King:
Pursuant to Article 8.01 of the Transfer Agency and Service Agreement dated
January 1, 1991, between John Hancock World Fund (the "Trust") and John Hancock
Fund Services, Inc. the Trust hereby notifies you that it desires to have you
render services as transfer agent to the John Hancock Global Retail Fund, a new
series of the Trust, and that such series of shares become a Fund under the
Agreement, at a fee equal to that of other series of the Trust.
If John Hancock Fund Services agrees to provide such services, please sign below
and return a signed copy to me.
John Hancock Fund Services, Inc. John Hancock World Fund
By: /s/David A. King By: /s/Thomas H. Drohan
---------------- -------------------
Thomas H. Drohan
Senior Vice President &
Corporate Secretary
Attest: /s/Avery P. Maher Attest: /s/Carmen M. Pelissier
----------------- ----------------------
<PAGE> 1
Exhibit 10
May 6, 1987
John Hancock World Trust
101 Huntington Avenue
Boston, Massachusetts 02199
John Hancock World Trust
Dear Sirs:
We have acted as counsel for John Hancock World Trust (the "Trust") in
connection with the offer by the Trust of an unlimited number of shares of
beneficial interest of the Trust (the "Shares") which have been classified as
two series portfolios -- World Bond Portfolio and Pacific Basin Equities
Portfolio (each a "Fund" and, together, the "Funds"). We have participated in
the preparation of the Trust's Registration Statement (the "Registration
Statement") on Form N-1A (Registration No. 33-10722) relating to the Shares
filed with the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended, on December 10, 1986 and Pre-Effective
Amendment No. 1 to the Registration Statement to be filed with the Commission on
May 7, 1987. The Prospectus included in each Registration Statement as amended
to date is herein called the "Prospectus."
In so acting, we have participated in the preparation of the
Declaration of Trust of the Trust, dated August 25, 1986 (the "Declaration of
Trust"). We have also examined and relied upon the originals, or copies
certified or otherwise identified to our satisfaction, of such records,
documents, certificates and other instruments, and have made such other
investigations, as in our judgment are necessary or appropriate to enable us to
render the opinion expressed below.
We are of the following opinion:
1. The Trust has been duly established as an unincorporated voluntary
association under Massachusetts law and has made all filings required to be made
by a voluntary association under Chapter 182 of the Massachusetts General Laws.
2. Upon the issue of Shares for cash at a Fund's net asset value and
receipt by the Trust of the authorized consideration therefor as set forth in
the Prospectus, the Shares so issued will be validly issued, fully paid and
nonassessable by the Trust.
The Trust is an entity of the type commonly known as a "Massachusetts
business trust." Under Massachusetts law, holders of Shares could, under certain
circumstances, by held personally liable for the obligations of the Trust.
However, the Declaration of Trust disclaims shareholder liability for acts,
obligations or affairs of the Trust and request that notice of such disclaimer
be given in each agreement, obligation or instrument entered into or executed by
the Trust or the Trustees on behalf of the Trust. The Declaration of Trust
provides for
<PAGE> 2
indemnification out of the Trust's property for all loss and expense of any
shareholder held personally liable for the obligations of the Trust. This, the
risk of a shareholder's incurring financial loss on account of shareholder
liability is limited to circumstances in which the Trust itself would be unable
to meet its obligations.
We understand that this opinion is to be used in connection with the
registration of the Shares for offering and sale pursuant to the Securities Act
of 1933, as amended. We consent to the filing of this opinion with and as part
of the Registration Statement.
Very truly yours,
/s/ Debevoise V. Plimpton
-------------------------
<PAGE> 1
Exhibit 11
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Statements of Additional Information
constituting parts of this Post Effective Amendment No. 16 to the registration
statement on Form N-1A (the "Registration Statement") of our reports dated
October 17, 1995, relating to the financial statements and financial highlights
appearing in the August 31, 1995 Annual Reports to Shareholders of John Hancock
Pacific Basin Equities Fund, John Hancock Global Rx Fund and John Hancock Retail
Fund, which appear in such Statements of Additional Information and to the
incorporation by reference of our reports into the Prospectuses which constitute
part of this Registration Statement. We also consent to the references to us
under the headings "Independent Auditors" in the Statements of Additional
Information and to the references to us under the headings "The Fund's Financial
Highlights" in the Prospectuses.
/s/ PRICE WATERHOUSE LLP
- ------------------------
Boston, Massachusetts
December 19, 1995
<PAGE> 1
Exhibit 13
May 5, 1987
SUBSCRIPTION AGREEMENT
JOHN HANCOCK WORLD TRUST, a business trust organized under the laws of
the Commonwealth of Massachusetts (the "Trust") and consisting of two series
portfolios, namely, John Hancock World Trust -- World Bond Portfolio ("World
Bond Portfolio"), and John Hancock World Trust -- Pacific Basin Equities
Portfolio, ("Pacific Basin Portfolio") (the "Funds"), and JOHN HANCOCK ADVISERS,
INC., a Delaware corporation (the "Purchaser"), hereby agree with each other as
follows:
1. Proposed Registration of Shares of Beneficial Interest. The
Trust and the Funds propose to issue and sell to the public shares of beneficial
interest ("Shares") pursuant to a registration statement on Form N-1A (the
"Registration Statement") to be filed with the Securities and Exchange
Commission. In order to provide the Trust with a net worth of at least $100,000
as required by Section 14 of the Investment Company Act of 1940, as amended, and
additional capitalization, the Trust hereby offers the Purchaser at private
placement 20,000 Shares of the Trust representing 10,000 shares each of World
Bond Portfolio and Pacific Basin Portfolio at a price of $10.00 per share for
purchase prior to the effective date of the Registration Statement.
2. Purchase of Shares. The Purchaser agrees to purchase 20,000
Shares two days prior to the effective date of the Registration Statement (or
such earlier date as the parties may agree upon). The Shares will be purchased
at the purchase price of $10.00 per share. The Purchaser will make payment for
the 20,000 Shares to be purchased by it by delivery of a certified or official
bank check payable to the order of the Trust at least two business days prior to
the date specified by the Trust as the proposed effective date of the
Registration Statement in a written notice delivered to the Purchaser by the
Trust no later than three business days prior to such proposed effective date.
3. Purchase for Investment. The Purchaser represents and
warrants to the Trust that the Shares are being acquired by it for investment
and not with a view to the resale or further distribution thereof and that it
has no present intention to redeem the Shares.
4. Execution. This instrument is executed and made on behalf of
the Trust and the Funds by an officer of the Trust and the Funds. The name John
Hancock World Trust is the designation of the Trustees under the Declaration of
Trust, dated August 25, 1986, as amended from time to time. The Declaration of
Trust has been filed with the Secretary of State of the Commonwealth of
Massachusetts. The obligations of the Trust are not personally binding upon, nor
shall resort be had to the private property of, any of the Trustees,
shareholders, officers, employees, or agents of the Trust or the Funds, but the
Trust's property only shall be bound.
<PAGE> 2
5. Assignment. The right of the Purchaser to purchase the
Shares as set forth herein is not assignable without the consent of the Trust.
6. Notices, etc. All notices, requests and other communications
hereunder shall be in writing and shall be deemed to have been sufficiently
given if mailed by first-class mail or telegraphed and addressed as follows:
To the Trust: 101 Huntington Avenue
Boston, Massachusetts 02199
To the Funds: 101 Huntington Avenue
Boston, Massachusetts 02199
To the Purchaser: 101 Huntington Avenue
Boston, Massachusetts 02199
or in any case to such other address as shall have been specified by notice from
the addressee to the sender of such notice, request or other communication.
IN WITNESS WHEREOF, the parties hereto have executed this
agreement as of the date first above written.
JOHN HANCOCK WORLD TRUST
By: /s/R. Bruce Oliver
-----------------------
Chairman of the Board
and President
JOHN HANCOCK ADVISERS, INC.
By: /s/R. Bruce Oliver
-----------------------
Vice Chairman of the Board,
President and Chief
Executive Officer
2
<PAGE> 1
Exhibit 15
JOHN HANCOCK WORLD FUND --
JOHN HANCOCK GLOBAL RETAIL FUND
Amended and Restated Distribution Plan
Class A Shares
September 28, 1994
ARTICLE I. THIS PLAN
This amended and restated Distribution Plan (the "Plan") sets forth the
terms and conditions on which John Hancock World Fund (the "Trust"), on behalf
of John Hancock Global Retail Fund (the "Fund"), a series portfolio of the
Trust, on behalf of its Class A shares, will, after the effective date hereof,
pay certain amounts to John Hancock Broker Distribution Services, Inc. ("Broker
Services") in connection with the provision by Broker Services of certain
services to the Fund and its Class A shareholders, as set forth herein. Certain
of such payments by the Fund may, under Rule 12b-1 of the Securities and
Exchange Commission, as from time to time amended (the "Rule"), under the
Investment Company Act of 1940, as amended (the "Act"), be deemed to constitute
the financing of distribution by the Fund of its shares. This Plan describes all
material aspects of such financing as contemplated by the Rule and shall be
administered and interpreted, and implemented and continued, in a manner
consistent with the Rule. The Trust and Broker Services heretofore entered into
a Distribution Agreement, dated August 1, 1991 (the "Agreement"), the terms of
which, as heretofore and from time to time continued, are incorporated herein by
reference.
ARTICLE II. DISTRIBUTION AND SERVICE EXPENSES
The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class A shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services of the Fund or other
broker-dealers ("Selling Brokers") that have entered into an agreement with
Broker Services for the sale of Class A shares of the Fund, (b) direct
out-of-pocket expenses incurred in connection with the distribution of Class A
shares of the Fund, including expenses related to printing of prospectuses and
reports to other than existing Class A shareholders of the Fund, and
preparation, printing and distribution of sales literature and advertising
materials, and (c) an allocation of overhead and other branch office expenses of
Broker Services related to the distribution of Class A shares of the Fund.
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish
<PAGE> 2
personal and shareholder account maintenance services to Class A shareholders
of the Fund.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed 0.30% of the average daily
net asset value of the Class A shares of the Fund (determined in accordance with
the Fund's prospectus as from time to time in effect) on an annual basis to
cover Distribution Expenses and Service Expenses, provided that the portion of
such fee used to cover service expenses shall not exceed an annual rate of up to
0.25% of the average daily net asset value of the Class A shares of the Fund.
Such expenditures shall be calculated and accrued daily and paid monthly or at
such other intervals as the Trustees shall determine. In the event Broker
Services is not fully reimbursed for payments made or other expenses incurred by
it under this Plan, such expenses will not be carried beyond one year from the
date such expenses were incurred. Any fees paid to Broker Services under this
Plan during any fiscal year of the Fund and not expended or allocated by Broker
Services for actual or budgeted Distribution Expenses and Service Expenses
during such fiscal year will be promptly returned to the Fund.
ARTICLE IV. EXPENSES BORNE BY THE FUND
Notwithstanding any other provision of this Plan, the Trust, the Fund
and its investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall
bear the respective expenses to be borne by them under the Investment Management
Contract, dated September 28, 1994 as from time to time continued and amended
(the "Management Contract"), and under the Fund's current prospectus as it is
from time to time in effect. Except as otherwise contemplated by this Plan, the
Trust, and the Fund shall not, directly or indirectly, engage in financing any
activity which is primarily intended to or should reasonably result in the sale
of shares of the Fund.
ARTICLE V. APPROVAL BY TRUSTEES, ETC.
This Plan shall not take effect until it has been approved, together
with any related agreements, by votes, cast in person at a meeting called for
the purpose of voting on this Plan or such agreements, of a majority (or
whatever greater percentage may, from time to time, be required by Section 12(b)
of the Act or the rules and regulations thereunder) of (a) all of the Trustees
of the Fund and (b) those Trustees of the Fund who are not "interested persons"
of the Fund, as such term may be from time to time defined under the Act, and
have no direct or indirect financial interest in the operation of this Plan or
any agreements related to it (the "Independent Trustees").
2
<PAGE> 3
ARTICLE VI. CONTINUANCE
This Plan and any related agreements shall continue in effect for so
long as such continuance is specifically approved at least annually in advance
in the manner provided for the approval of this Plan in Article V.
ARTICLE VII. INFORMATION
Broker Services shall furnish the Fund and its Trustees quarterly, or
at such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Service Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Trustees may request.
ARTICLE VIII. TERMINATION
This Plan may be terminated (a) at any time by vote of a majority of
the Trustees, a majority of the Independent Trustees, or a majority of the
Fund's outstanding voting Class A shares, or (b) by Broker Services on 60 days'
notice in writing to the Fund.
ARTICLE IX. AGREEMENTS
Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be terminated at any
time, without payment of any penalty, by vote of a majority of the Independent
Trustees or by vote of a majority of the Fund's then outstanding voting Class A
shares.
(b) That such agreement shall terminate automatically in the event of its
assignment.
ARTICLE X. AMENDMENTS
This Plan may not be amended to increase the maximum amount of the fees
payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class A shares of the Fund. No material amendment to the Plan
shall, in any event, be effective unless it is approved in the same manner as is
provided for approval of this Plan in Article V.
ARTICLE XI. LIMITATION OF LIABILITY
The names "John Hancock World Fund" and "John Hancock Global Retail
Fund" are the designations of the Trustees under the Amended and Restated
Declaration of Trust, dated February 8, 1994, as amended from time to time. The
Declaration of Trust has been filed with the Secretary of State of the
Commonwealth of Massachusetts. The
3
<PAGE> 4
obligations of the Trust and the Fund are not personally binding upon, nor shall
resort be had to the private property of, any of the Trustees, shareholders,
officers, employees or agents of the Fund, but only the Fund's property shall be
bound. No series of the Trust shall be responsible for the obligations of any
other series of the Trust.
IN WITNESS WHEREOF, the Fund has executed this amended and restated
Distribution Plan effective as of the 28th day of September, 1994 in Boston,
Massachusetts.
JOHN HANCOCK WORLD FUND --
John Hancock Global Retail Fund
By: /s/ Robert A. Freedman
----------------------
President
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By: /s/ C. Troy Shaver, Jr.
-----------------------
President
4
<PAGE> 1
Exhibit 15a
JOHN HANCOCK WORLD FUND --
JOHN HANCOCK GLOBAL RETAIL FUND
Amended and Restated Distribution Plan
Class B Shares
September 28, 1994
ARTICLE I. THIS PLAN
This amended and restated Distribution Plan (the "Plan") sets forth the
terms and conditions under which John Hancock World Fund (the "Trust"), on
behalf of John Hancock Global Retail Fund (the "Fund"), a series portfolio of
the Trust, on behalf of its Class B shares, will, after the effective date
hereof, pay certain amounts to John Hancock Broker Distribution Services, Inc.
("Broker Services") in connection with the provision by Broker Services of
certain services to the Fund and its Class B shareholders, as set forth herein.
Certain of such payments by the Fund may, under Rule 12b-1 of the Securities and
Exchange Commission, as from time to time amended (the "Rule"), under the
Investment Company Act of 1940, as amended (the "Act"), be deemed to constitute
the financing of distribution by the Fund of its shares. This Plan describes all
material aspects of such financing as contemplated by the Rule and shall be
administered and interpreted, and implemented and continued, in a manner
consistent with the Rule. The Trust and Broker Services heretofore entered into
a Distribution Agreement, dated August 1, 1991 (the "Agreement"), the terms of
which, as heretofore and from time to time continued, are incorporated herein by
reference.
ARTICLE II. DISTRIBUTION AND SERVICE EXPENSES
The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class B shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services or other broker-dealers
("Selling Brokers") that have entered into an agreement with Broker Services for
the sale of Class B shares of the Fund, (b) direct out-of pocket expenses
incurred in connection with the distribution of Class B shares of the Fund,
including expenses related to printing of prospectuses and reports to other than
existing Class B shareholders of the Fund, and preparation, printing and
distribution of sales literature and advertising materials, (c) an allocation of
overhead and other branch office expenses of Broker Services related to the
distribution of Class B shares of the Fund, and (d) interest expenses on
unreimbursed distribution expenses related to Class B shares, as described in
Article IV.
Service Expenses include payments made to, or on account of account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish personal and shareholder account maintenance services to
Class B shareholders of the Fund.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed 1.00% of the average daily
net asset value of the Class B shares of
<PAGE> 2
the Fund (determined in accordance with the Fund's prospectus as from time to
time in effect) on an annual basis to cover Distribution Expenses and Service
Expenses, provided that the portion of such fee used to cover Service Expenses,
shall not exceed an annual rate of up to 0.25% of the average daily net asset
value of the Class B shares of the Fund. Such expenditures shall be calculated
and accrued daily and paid monthly or at such other intervals as the Trustees
shall determine.
ARTICLE IV. UNREIMBURSED DISTRIBUTION EXPENSES
In the event that Broker Services is not fully reimbursed for payments
made or expenses incurred by it as contemplated hereunder, in any fiscal year,
Broker Services shall be entitled to carry forward such expenses to subsequent
fiscal years for submission to the Class B shares of the Fund for payment,
subject always to the annual maximum expenditures set forth in Article III
hereof; provided, however, that nothing herein shall prohibit or limit the
Trustees from terminating this Plan and all payments hereunder at any time
pursuant to Article IX hereof.
ARTICLE V. EXPENSES BORNE BY THE FUND
Notwithstanding any other provision of this Plan, the Trust, the Fund
and its investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall
bear the respective expenses to be borne by them under the Investment Management
Contract between them, dated September 28, 1994, as from time to time continued
and amended (the "Management Contract"), and under the Fund's current prospectus
as it is from time to time in effect. Except as otherwise contemplated by this
Plan, the Trust and the Fund shall not, directly or indirectly, engage in
financing any activity which is primarily intended to or should reasonably
result in the sale of shares of the Fund.
ARTICLE VI. APPROVAL BY TRUSTEES, ETC.
This Plan shall not take effect until it has been approved, together
with any related agreements, by votes, cast in person at a meeting called for
the purpose of voting on this Plan or such agreements, of a majority (or
whatever greater percentage may, from time to time, be required by Section 12(b)
of the Act or the rules and regulations thereunder) of (a) all of the Trustees
of the Fund and (b) those Trustees of the Fund who are not "interested persons"
of the Fund, as such term may be from time to time defined under the Act, and
have no direct or indirect financial interest in the operation of this Plan or
any agreements related to it (the "Independent Trustees").
ARTICLE VII. CONTINUANCE
This Plan and any related agreements shall continue in effect for so
long as such continuance is specifically approved at least annually in advance
in the manner provided for the approval of this Plan in Article VI.
ARTICLE VIII. INFORMATION
Broker Services shall furnish the Fund and its Trustees quarterly, or
at such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Services Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Trustees may request.
-2-
<PAGE> 3
ARTICLE IX. TERMINATION
This Plan may be terminated (a) at any time by vote of a majority of
the Trustees, a majority of the Independent Trustees, or a majority of the
Fund's outstanding voting Class B shares, or (b) by Broker Services on 60 days'
notice in writing to the Fund.
ARTICLE X. AGREEMENTS
Each Agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be
terminated at any time, without payment of any penalty, by
vote of a majority of the Independent Trustees or by vote of a
majority of the Fund's then outstanding Class B shares.
(b) That such agreement shall terminate automatically in the
event of its assignment.
ARTICLE XI. AMENDMENTS
This Plan may not be amended to increase the maximum amount of the fees
payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class B shares of the Fund. No material amendment to the Plan
shall, in any event, be effective unless it is approved in the same manner as is
provided for approval of this Plan in Article VII.
ARTICLE XII. LIMITATION OF LIABILITY
The names "John Hancock World Fund" and "John Hancock Global Retail
Fund" are the designations of the Trustees under the Amended and Restated
Declaration of Trust, dated February 8, 1994, as amended from time to time. The
Declaration of Trust has been filed with the Secretary of State of the
Commonwealth of Massachusetts. The obligations of the Trust and the Fund are not
personally binding upon, nor shall resort be had to the private property of, any
of the Trustees, shareholders, officers, employees or agents of the Fund, but
only the Fund's property shall be bound. No series of the Trust shall be
responsible for the obligations of any other series of the Trust.
IN WITNESS WHEREOF, the Fund has executed this amended and restated
Distribution Plan effective as of the 28th day of September 1994 in Boston,
Massachusetts.
JOHN HANCOCK WORLD FUND--
JOHN HANCOCK GLOBAL RETAIL FUND
By: /s/ Robert A. Freedman
----------------------
President
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By: /s/ C. Troy Shaver, Jr.
-----------------------
President
-3-
<PAGE> 1
Exhibit 15b
JOHN HANCOCK WORLD FUND --
JOHN HANCOCK FREEDOM GLOBAL RX FUND
Amended and Restated Distribution Plan
Class A Shares
January 3, 1994
ARTICLE I. THIS PLAN
This amended and restated Distribution Plan (the "Plan") sets forth the
terms and conditions on which John Hancock World Fund (the "Trust"), on behalf
of John Hancock Freedom Global Rx Fund (the "Fund"), a series portfolio of the
Trust, on behalf of its Class A shares, will, after the effective date hereof,
pay certain amounts to John Hancock Broker Distribution Services, Inc. ("Broker
Services") in connection with the provision by Broker Services of certain
services to the Fund and its Class A shareholders, as set forth herein. Certain
of such payments by the Fund may, under Rule 12b-1 of the Securities and
Exchange Commission, as from time to time amended (the "Rule"), under the
Investment Company Act of 1940, as amended (the "Act"), be deemed to constitute
the financing of distribution by the Fund of its shares. This Plan describes all
material aspects of such financing as contemplated by the Rule and shall be
administered and interpreted, and implemented and continued, in a manner
consistent with the Rule. The Trust and Broker Services heretofore entered into
a Distribution Agreement, dated August 1, 1991 (the "Agreement"), the terms of
which, as heretofore and from time to time continued, are incorporated herein by
reference.
ARTICLE II. DISTRIBUTION AND SERVICE EXPENSES
The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class A shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services of the Fund or other
broker-dealers ("Selling Brokers") that have entered into an agreement with
Broker Services for the sale of Class A shares of the Fund, (b) direct
out-of-pocket expenses incurred in connection with the distribution of Class A
shares of the Fund, including expenses related to printing of prospectuses and
reports to other than existing Class A shareholders of the Fund, and
preparation, printing and distribution of sales literature and advertising
materials, and (c) an allocation of overhead and other branch office expenses of
Broker Services related to the distribution of Class A shares of the Fund.
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish
<PAGE> 2
personal and shareholder account maintenance services to Class A shareholders
of the Fund.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed 0.30% of the average daily
net asset value of the Class A shares of the Fund (determined in accordance with
the Fund's prospectus as from time to time in effect) on an annual basis to
cover Distribution Expenses and Service Expenses, provided that the portion of
such fee used to cover service expenses shall not exceed an annual rate of up to
0.25% of the average daily net asset value of the Class A shares of the Fund.
Such expenditures shall be calculated and accrued daily and paid monthly or at
such other intervals as the Trustees shall determine. In the event Broker
Services is not fully reimbursed for payments made or other expenses incurred by
it under this Plan, such expenses will not be carried beyond one year from the
date such expenses were incurred. Any fees paid to Broker Services under this
Plan during any fiscal year of the Fund and not expended or allocated by Broker
Services for actual or budgeted Distribution Expenses and Service Expenses
during such fiscal year will be promptly returned to the Fund.
ARTICLE IV. EXPENSES BORNE BY THE FUND
Notwithstanding any other provision of this Plan, the Trust, the Fund
and its investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall
bear the respective expenses to be borne by them under the Investment Management
Contract, as amended, dated June 24, 1991 as from time to time continued and
amended (the "Management Contract"), and under the Fund's current prospectus as
it is from time to time in effect. Except as otherwise contemplated by this
Plan, the Trust, and the Fund shall not, directly or indirectly, engage in
financing any activity which is primarily intended to or should reasonably
result in the sale of shares of the Fund.
ARTICLE V. APPROVAL BY TRUSTEES, ETC.
This Plan shall not take effect until it has been approved, together
with any related agreements, by votes, cast in person at a meeting called for
the purpose of voting on this Plan or such agreements, of a majority (or
whatever greater percentage may, from time to time, be required by Section 12(b)
of the Act or the rules and regulations thereunder) of (a) all of the Trustees
of the Fund and (b) those Trustees of the Fund who are not "interested persons"
of the Fund, as such term may be from time to time defined under the Act, and
have no direct or indirect financial interest in the operation of this Plan or
any agreements related to it (the "Independent Trustees").
2
<PAGE> 3
ARTICLE VI. CONTINUANCE
This Plan and any related agreements shall continue in effect for so
long as such continuance is specifically approved at least annually in advance
in the manner provided for the approval of this Plan in Article V.
ARTICLE VII. INFORMATION
Broker Services shall furnish the Fund and its Trustees quarterly, or
at such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Service Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Trustees may request.
ARTICLE VIII. TERMINATION
This Plan may be terminated (a) at any time by vote of a majority of
the Trustees, a majority of the Independent Trustees, or a majority of the
Fund's outstanding voting Class A shares, or (b) by Broker Services on 60 days'
notice in writing to the Fund.
ARTICLE IX. AGREEMENTS
Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be terminated at any
time, without payment of any penalty, by vote of a majority of the Independent
Trustees or by vote of a majority of the Fund's then outstanding voting Class A
shares.
(b) That such agreement shall terminate automatically in the event of its
assignment.
ARTICLE X. AMENDMENTS
This Plan may not be amended to increase the maximum amount of the fees
payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class A shares of the Fund. No material amendment to the Plan
shall, in any event, be effective unless it is approved in the same manner as is
provided for approval of this Plan in Article V.
ARTICLE XI. LIMITATION OF LIABILITY
The names "John Hancock World Fund" and "John Hancock Freedom Global Rx
Fund" are the designations of the Trustees under the Declaration of Trust, dated
August 25, 1986, as amended from time to time. The Declaration of Trust has been
filed with the Secretary of State of the Commonwealth of Massachusetts. The
obligations of the Trust
3
<PAGE> 4
and the Fund are not personally binding upon, nor shall resort be had to the
private property of, any of the Trustees, shareholders, officers, employees or
agents of the Fund, but only the Fund's property shall be bound. No series of
the Trust shall be responsible for the obligations of any other series of the
Trust.
IN WITNESS WHEREOF, the Fund has executed this amended and restated
Distribution Plan effective as of the 3rd day of January, 1994 in Boston,
Massachusetts.
JOHN HANCOCK WORLD FUND --
JOHN HANCOCK FREEDOM GLOBAL Rx FUND
By /s/ Robert G. Freedman
------------------------------------
President
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By /s/ C. Troy Shaver, Jr
------------------------------------
President
4
<PAGE> 1
Exhibit 15c
JOHN HANCOCK WORLD FUND --
JOHN HANCOCK FREEDOM PACIFIC BASIN EQUITIES FUND
Amended and Restated Distribution Plan
Class A Shares
January 3, 1994
ARTICLE I. THIS PLAN
This amended and restated Distribution Plan (the "Plan") sets forth the
terms and conditions on which John Hancock World Fund (the "Trust"), on behalf
of John Hancock Freedom Pacific Basin Equities Fund (the "Fund"), a series
portfolio of the Trust, on behalf of its Class A shares, will, after the
effective date hereof, pay certain amounts to John Hancock Broker Distribution
Services, Inc. ("Broker Services") in connection with the provision by Broker
Services of certain services to the Fund and its Class A shareholders, as set
forth herein. Certain of such payments by the Fund may, under Rule 12b-1 of the
Securities and Exchange Commission, as from time to time amended (the "Rule"),
under the Investment Company Act of 1940, as amended (the "Act"), be deemed to
constitute the financing of distribution by the Fund of its shares. This Plan
describes all material aspects of such financing as contemplated by the Rule and
shall be administered and interpreted, and implemented and continued, in a
manner consistent with the Rule. The Trust and Broker Services heretofore
entered into a Distribution Agreement, dated August 1, 1991 (the "Agreement"),
the terms of which, as heretofore and from time to time continued, are
incorporated herein by reference.
ARTICLE II. DISTRIBUTION AND SERVICE EXPENSES
The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class A shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services of the Fund or other
broker-dealers ("Selling Brokers") that have entered into an agreement with
Broker Services for the sale of Class A shares of the Fund, (b) direct
out-of-pocket expenses incurred in connection with the distribution of Class A
shares of the Fund, including expenses related to printing of prospectuses and
reports to other than existing Class A shareholders of the Fund, and
preparation, printing and distribution of sales literature and advertising
materials, and (c) an allocation of overhead and other branch office expenses of
Broker Services related to the distribution of Class A shares of the Fund.
<PAGE> 2
Service Expenses include payments made to, or on account of, account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish personal and shareholder account maintenance services to
Class A shareholders of the Fund.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed 0.30% of the average daily
net asset value of the Class A shares of the Fund (determined in accordance with
the Fund's prospectus as from time to time in effect) on an annual basis to
cover Distribution Expenses and Service Expenses, provided that the portion of
such fee used to cover service expenses shall not exceed an annual rate of up to
0.25% of the average daily net asset value of the Class A shares of the Fund.
Such expenditures shall be calculated and accrued daily and paid monthly or at
such other intervals as the Trustees shall determine. In the event Broker
Services is not fully reimbursed for payments made or other expenses incurred by
it under this Plan, such expenses will not be carried beyond one year from the
date such expenses were incurred. Any fees paid to Broker Services under this
Plan during any fiscal year of the Fund and not expended or allocated by Broker
Services for actual or budgeted Distribution Expenses and Service Expenses
during such fiscal year will be promptly returned to the Fund.
ARTICLE IV. EXPENSES BORNE BY THE FUND
Notwithstanding any other provision of this Plan, the Trust, the Fund
and its investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall
bear the respective expenses to be borne by them under the Investment Management
Contract, as amended, dated May 5, 1987, as from time to time continued and
amended (the "Management Contract"), and under the Fund's current prospectus as
it is from time to time in effect. Except as otherwise contemplated by this
Plan, the Trust, and the Fund shall not, directly or indirectly, engage in
financing any activity which is primarily intended to or should reasonably
result in the sale of shares of the Fund.
ARTICLE V. APPROVAL BY TRUSTEES, ETC.
This Plan shall not take effect until it has been approved, together
with any related agreements, by votes, cast in person at a meeting called for
the purpose of voting on this Plan or such agreements, of a majority (or
whatever greater percentage may, from time to time, be required by Section 12(b)
of the Act or the rules and regulations thereunder) of (a) all of the Trustees
of the Fund and (b) those Trustees of the Fund who are not "interested persons"
of the Fund, as such term may be from time to time defined under the Act, and
have no direct or indirect financial interest in the operation of this Plan or
any agreements related to it (the "Independent Trustees").
2
<PAGE> 3
ARTICLE VI. CONTINUANCE
This Plan and any related agreements shall continue in effect for so
long as such continuance is specifically approved at least annually in advance
in the manner provided for the approval of this Plan in Article V.
ARTICLE VII. INFORMATION
Broker Services shall furnish the Fund and its Trustees quarterly, or
at such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Service Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Trustees may request.
ARTICLE VIII. TERMINATION
This Plan may be terminated (a) at any time by vote of a majority of
the Trustees, a majority of the Independent Trustees, or a majority of the
Fund's outstanding voting Class A shares, or (b) by Broker Services on 60 days'
notice in writing to the Fund.
ARTICLE IX. AGREEMENTS
Each agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be terminated at any
time, without payment of any penalty, by vote of a majority of the Independent
Trustees or by vote of a majority of the Fund's then outstanding voting Class A
shares.
(b) That such agreement shall terminate automatically in the event of its
assignment.
ARTICLE X. AMENDMENTS
This Plan may not be amended to increase the maximum amount of the fees
payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class A shares of the Fund. No material amendment to the Plan
shall, in any event, be effective unless it is approved in the same manner as is
provided for approval of this Plan in Article V.
ARTICLE XI. LIMITATION OF LIABILITY
The names "John Hancock World Fund" and "John Hancock Freedom Pacific
Basin Equities Fund" are the designations of the Trustees under the Declaration
of Trust, dated August 25, 1986, as amended from time to time. The Declaration
of Trust has been filed with the Secretary of State of the Commonwealth of
Massachusetts. The obligations
3
<PAGE> 4
of the Trust and the Fund are not personally binding upon, nor shall resort be
had to the private property of, any of the Trustees, shareholders, officers,
employees or agents of the Fund, but only the Fund's property shall be bound. No
series of the Trust shall be responsible for the obligations of any other series
of the Trust.
IN WITNESS WHEREOF, the Fund has executed this amended and restated
Distribution Plan effective as of the 3rd day of January, 1994 in Boston,
Massachusetts.
JOHN HANCOCK WORLD FUND --
JOHN HANCOCK FREEDOM PACIFIC BASIN EQUITIES FUND
By: /s/Robert Freedman
------------------
President
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By: /s/C. Troy Shaver, Jr.
----------------------
President
<PAGE> 1
Exhibit 15d
JOHN HANCOCK WORLD FUND --
JOHN HANCOCK FREEDOM PACIFIC BASIN EQUITIES FUND
Amended and Restated Distribution Plan
Class B Shares
March 4, 1994
ARTICLE I. THIS PLAN
This amended and restated Distribution Plan (the "Plan") sets forth the
terms and conditions under which John Hancock World Fund (the "Trust"), on
behalf of John Hancock Freedom Pacific Basin Equities Fund (the "Fund"), a
series portfolio of the Trust, on behalf of its Class B shareholders, will,
after the effective date hereof, pay certain amounts to John Hancock Broker
Distribution Services, Inc. ("Broker Services") in connection with the provision
by Broker Services of certain services to the Fund and its Class B shareholders,
as set forth herein. Certain of such payments by the Fund may, under Rule 12b-1
of the Securities and Exchange Commission, as from time to time amended (the
"Rule"), under the Investment Company Act of 1940, as amended (the "Act"), be
deemed to constitute the financing of distribution by the Fund of its shares.
This Plan describes all material aspects of such financing as contemplated by
the Rule and shall be administered and interpreted, and implemented and
continued, in a manner consistent with the Rule. The Trust and Broker Services
heretofore entered into a Distribution Agreement, dated August 1, 1991 (the
"Agreement"), the terms of which, as heretofore and from time to time continued,
are incorporated herein by reference.
ARTICLE II. DISTRIBUTION AND SERVICE EXPENSES
The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class B shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services or other broker-dealers
("Selling Brokers") that have entered into an agreement with Broker Services for
the sale of Class B shares of the Fund, (b) direct out-of pocket expenses
incurred in connection with the distribution of Class B shares of the Fund,
including expenses related to printing of prospectuses and reports to other than
existing Class B shareholders of the Fund, and preparation, printing and
distribution of sales literature and advertising materials, (c) an allocation of
overhead and other branch office expenses of Broker Services related to the
distribution of Class B shares of the Fund, and (d) interest expenses on
unreimbursed distribution expenses related to Class B shares, as described in
Article IV.
Service Expenses include payments made to, or on account of account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish personal and shareholder account maintenance services to
Class B shareholders of the Fund.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed 1.00% of the average daily
net asset value of the Class B shares of the Fund (determined in accordance with
the Fund's prospectus as from time to time in effect) on an annual basis to
cover Distribution Expenses and Service Expenses, provided that the portion of
<PAGE> 2
such fee used to cover Service Expenses, shall not exceed an annual rate of up
to 0.25% of the average daily net asset value of the Class B shares of the Fund.
Such expenditures shall be calculated and accrued daily and paid monthly or at
such other intervals as the Trustees shall determine.
ARTICLE IV. UNREIMBURSED DISTRIBUTION EXPENSES
In the event that Broker Services is not fully reimbursed for payments
made or expenses incurred by it as contemplated hereunder, in any fiscal year,
Broker Services shall be entitled to carry forward such expenses to subsequent
fiscal years for submission to the Class B shares of the Fund for payment,
subject always to the annual maximum expenditures set forth in Article III
hereof; provided, however, that nothing herein shall prohibit or limit the
Trustees from terminating this Plan and all payments hereunder at any time
pursuant to Article IX hereof.
ARTICLE V. EXPENSES BORNE BY THE FUND
Notwithstanding any other provision of this Plan, the Trust, the Fund
and its investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall
bear the respective expenses to be borne by them under the Investment Management
Contract between them, dated May 5, 1987 as from time to time continued and
amended (the "Management Contract"), and under the Fund's current prospectus as
it is from time to time in effect. Except as otherwise contemplated by this
Plan, the Trust and the Fund shall not, directly or indirectly, engage in
financing any activity which is primarily intended to or should reasonably
result in the sale of shares of the Fund.
ARTICLE VI. APPROVAL BY TRUSTEES, ETC.
This Plan shall not take effect until it has been approved, together
with any related agreements, by votes, cast in person at a meeting called for
the purpose of voting on this Plan or such agreements, of a majority (or
whatever greater percentage may, from time to time, be required by Section 12(b)
of the Act or the rules and regulations thereunder) of (a) all of the Trustees
of the Fund and (b) those Trustees of the Fund who are not "interested persons"
of the Fund, as such term may be from time to time defined under the Act, and
have no direct or indirect financial interest in the operation of this Plan or
any agreements related to it (the "Independent Trustees").
ARTICLE VII. CONTINUANCE
This Plan and any related agreements shall continue in effect for so
long as such continuance is specifically approved at least annually in advance
in the manner provided for the approval of this Plan in Article VI.
ARTICLE VIII. INFORMATION
Broker Services shall furnish the Fund and its Trustees quarterly, or
at such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Services Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Trustees may request.
ARTICLE IX. TERMINATION
This Plan may be terminated (a) at any time by vote of a majority of
the Trustees, a majority of the Independent Trustees, or a majority of the
Fund's outstanding voting Class B shares, or (b) by Broker Services on 60 days'
notice in writing to the Fund.
-2-
<PAGE> 3
ARTICLE X. AGREEMENTS
Each Agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be
terminated at any time, without payment of any penalty, by
vote of a majority of the Independent Trustees or by vote of a
majority of the Fund's then outstanding Class B shares.
(b) That such agreement shall terminate automatically in the
event of its assignment.
ARTICLE XI. AMENDMENTS
This Plan may not be amended to increase the maximum amount of the fees
payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class B shares of the Fund. No material amendment to the Plan
shall, in any event, be effective unless it is approved in the same manner as is
provided for approval of this Plan in Article VII.
ARTICLE XII. LIMITATION OF LIABILITY
The names "John Hancock World Fund" and "John Hancock Freedom Pacific
Basin Equities Fund" are the designations of the Trustees under the Amended and
Restated Declaration of Trust, dated February 8, 1994, as restated and amended
from time to time. The Declaration of Trust has been filed with the Secretary of
State of the Commonwealth of Massachusetts. The obligations of the Trust and the
Fund are not personally binding upon, nor shall resort be had to the private
property of, any of the Trustees, shareholders, officers, employees or agents of
the Fund, but only the Fund's property shall be bound. No series of the Trust
shall be responsible for the obligations of any other series of the Trust.
IN WITNESS WHEREOF, the Fund has executed this amended and restated
Distribution Plan effective as of the 4th day of March, 1994 in Boston,
Massachusetts.
JOHN HANCOCK WORLD FUND--
JOHN HANCOCK FREEDOM PACIFIC BASIN EQUITIES FUND
By: /s/Robert G. Freedman
---------------------
President
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By: /s/C. Troy Shaver, Jr.
----------------------
President
-3-
<PAGE> 1
Exhibit 15e
JOHN HANCOCK WORLD FUND --
JOHN HANCOCK FREEDOM GLOBAL RX FUND
Amended and Restated Distribution Plan
Class B Shares
March 4, 1994
ARTICLE I. THIS PLAN
This amended and restated Distribution Plan (the "Plan") sets forth the
terms and conditions under which John Hancock World Fund (the "Trust"), on
behalf of John Hancock Freedom Global Rx Fund (the "Fund"), a series portfolio
of the Trust, on behalf of its Class B shareholders, will, after the effective
date hereof, pay certain amounts to John Hancock Broker Distribution Services,
Inc. ("Broker Services") in connection with the provision by Broker Services of
certain services to the Fund and its Class B shareholders, as set forth herein.
Certain of such payments by the Fund may, under Rule 12b-1 of the Securities and
Exchange Commission, as from time to time amended (the "Rule"), under the
Investment Company Act of 1940, as amended (the "Act"), be deemed to constitute
the financing of distribution by the Fund of its shares. This Plan describes all
material aspects of such financing as contemplated by the Rule and shall be
administered and interpreted, and implemented and continued, in a manner
consistent with the Rule. The Trust and Broker Services heretofore entered into
a Distribution Agreement, dated August 1, 1991 (the "Agreement"), the terms of
which, as heretofore and from time to time continued, are incorporated herein by
reference.
ARTICLE II. DISTRIBUTION AND SERVICE EXPENSES
The Fund shall pay to Broker Services a fee in the amount specified in
Article III hereof. Such fee may be spent by Broker Services on any activities
or expenses primarily intended to result in the sale of Class B shares of the
Fund, including, but not limited to the payment of Distribution Expenses (as
defined below) and Service Expenses (as defined below). Distribution Expenses
include but are not limited to, (a) initial and ongoing sales compensation out
of such fee as it is received by Broker Services or other broker-dealers
("Selling Brokers") that have entered into an agreement with Broker Services for
the sale of Class B shares of the Fund, (b) direct out-of pocket expenses
incurred in connection with the distribution of Class B shares of the Fund,
including expenses related to printing of prospectuses and reports to other than
existing Class B shareholders of the Fund, and preparation, printing and
distribution of sales literature and advertising materials, (c) an allocation of
overhead and other branch office expenses of Broker Services related to the
distribution of Class B shares of the Fund, and (d) interest expenses on
unreimbursed distribution expenses related to Class B shares, as described in
Article IV.
Service Expenses include payments made to, or on account of account
executives of selected broker-dealers (including affiliates of Broker Services)
and others who furnish personal and shareholder account maintenance services to
Class B shareholders of the Fund.
ARTICLE III. MAXIMUM EXPENDITURES
The expenditures to be made by the Fund pursuant to this Plan, and the
basis upon which such expenditures will be made, shall be determined by the
Fund, and in no event shall such expenditures exceed 1.00% of the average daily
net asset value of the Class B shares of
<PAGE> 2
the Fund (determined in accordance with the Fund's prospectus as from time to
time in effect) on an annual basis to cover Distribution Expenses and Service
Expenses, provided that the portion of such fee used to cover Service Expenses,
shall not exceed an annual rate of up to 0.25% of the average daily net asset
value of the Class B shares of the Fund. Such expenditures shall be calculated
and accrued daily and paid monthly or at such other intervals as the Trustees
shall determine.
ARTICLE IV. UNREIMBURSED DISTRIBUTION EXPENSES
In the event that Broker Services is not fully reimbursed for payments
made or expenses incurred by it as contemplated hereunder, in any fiscal year,
Broker Services shall be entitled to carry forward such expenses to subsequent
fiscal years for submission to the Class B shares of the Fund for payment,
subject always to the annual maximum expenditures set forth in Article III
hereof; provided, however, that nothing herein shall prohibit or limit the
Trustees from terminating this Plan and all payments hereunder at any time
pursuant to Article IX hereof.
ARTICLE V. EXPENSES BORNE BY THE FUND
Notwithstanding any other provision of this Plan, the Trust, the Fund
and its investment adviser, John Hancock Advisers, Inc. (the "Adviser"), shall
bear the respective expenses to be borne by them under the Investment Management
Contract between them, dated June 24, 1991 as from time to time continued and
amended (the "Management Contract"), and under the Fund's current prospectus as
it is from time to time in effect. Except as otherwise contemplated by this
Plan, the Trust and the Fund shall not, directly or indirectly, engage in
financing any activity which is primarily intended to or should reasonably
result in the sale of shares of the Fund.
ARTICLE VI. APPROVAL BY TRUSTEES, ETC.
This Plan shall not take effect until it has been approved, together
with any related agreements, by votes, cast in person at a meeting called for
the purpose of voting on this Plan or such agreements, of a majority (or
whatever greater percentage may, from time to time, be required by Section 12(b)
of the Act or the rules and regulations thereunder) of (a) all of the Trustees
of the Fund and (b) those Trustees of the Fund who are not "interested persons"
of the Fund, as such term may be from time to time defined under the Act, and
have no direct or indirect financial interest in the operation of this Plan or
any agreements related to it (the "Independent Trustees").
ARTICLE VII. CONTINUANCE
This Plan and any related agreements shall continue in effect for so
long as such continuance is specifically approved at least annually in advance
in the manner provided for the approval of this Plan in Article VI.
ARTICLE VIII. INFORMATION
Broker Services shall furnish the Fund and its Trustees quarterly, or
at such other intervals as the Fund shall specify, a written report of amounts
expended or incurred for Distribution Expenses and Services Expenses pursuant to
this Plan and the purposes for which such expenditures were made and such other
information as the Trustees may request.
<PAGE> 3
ARTICLE IX. TERMINATION
This Plan may be terminated (a) at any time by vote of a majority of
the Trustees, a majority of the Independent Trustees, or a majority of the
Fund's outstanding voting Class B shares, or (b) by Broker Services on 60 days'
notice in writing to the Fund.
ARTICLE X. AGREEMENTS
Each Agreement with any person relating to implementation of this Plan
shall be in writing, and each agreement related to this Plan shall provide:
(a) That, with respect to the Fund, such agreement may be
terminated at any time, without payment of any penalty, by
vote of a majority of the Independent Trustees or by vote of a
majority of the Fund's then outstanding Class B shares.
(b) That such agreement shall terminate automatically in the event
of its assignment.
ARTICLE XI. AMENDMENTS
This Plan may not be amended to increase the maximum amount of the fees
payable by the Fund hereunder without the approval of a majority of the
outstanding voting Class B shares of the Fund. No material amendment to the Plan
shall, in any event, be effective unless it is approved in the same manner as is
provided for approval of this Plan in Article VII.
ARTICLE XII. LIMITATION OF LIABILITY
The names "John Hancock World Fund" and "John Hancock Freedom Global Rx
Fund" are the designations of the Trustees under the Amended and Restated
Declaration of Trust, dated February 8, 1994, as restated and amended from time
to time. The Declaration of Trust has been filed with the Secretary of State of
the Commonwealth of Massachusetts. The obligations of the Trust and the Fund are
not personally binding upon, nor shall resort be had to the private property of,
any of the Trustees, shareholders, officers, employees or agents of the Fund,
but only the Fund's property shall be bound. No series of the Trust shall be
responsible for the obligations of any other series of the Trust.
IN WITNESS WHEREOF, the Fund has executed this amended and restated
Distribution Plan effective as of the 4th day of March, 1994 in Boston,
Massachusetts.
JOHN HANCOCK WORLD FUND--
JOHN HANCOCK FREEDOM GLOBAL RX FUND
By: /s/Robert G. Freedman
---------------------
President
JOHN HANCOCK BROKER DISTRIBUTION SERVICES, INC.
By: /s/C. Troy Shaver, Jr.
----------------------
President
<PAGE> 1
Exhibit 16
JOHN HANCOCK GLOBAL RETAIL FUND (CLASS A) - SEC TOTAL RETURN
<TABLE>
<S> <C> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------------------- --------------------------------------------
Average Annual Total Return Investment Value at End of Period
10 Year Return: N/A 10 Year Value: $0.00
5 Year Return: N/A 5 Year Value: $0.00
----------
3 Year Return: N/A 3 Year Value: $0.00 Cumm.
Return YTD
0.92 Year Return: 39.25% 1 Year Value: $1,356.08 35.61%
----------
Year to Date Return: 32.53% Year to Date Value: $1,325.26
Monthly Return: 2.22% Monthly Value: $1,022.24
- --------------------------------------------------- --------------------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year
-------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9 / 29 / 94 $8.50 $8.50 0.00%
9 / 94 $8.53 $8.53 0.00%
10 / 94 $8.76 $8.76 0.00%
11 / 94 $8.57 $8.57 0.00%
12 / 94 $8.67 $8.67 0.00% 12/23/94 $0.02726 $8.52
1 / 95 $8.47 $8.47 0.00%
2 / 95 $8.62 $8.62 0.00%
3 / 95 $9.27 $9.27 0.00%
4 / 95 $9.30 $9.30 0.00%
5 / 95 $9.37 $9.37 0.00%
6 / 95 $10.27 $10.27 0.00%
7 / 95 $11.24 $11.24 0.00%
8 / 95 $11.49 $11.49 0.00%
</TABLE>
<TABLE>
<CAPTION>
1-Year Year-to-Date Monthly
-------------------------------------------------------------------------------------------------
Month Dividend # Shares Shares Dividend # Shares Shares Dividend # Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9 / 29 / 94 117.647
9 / 94 $0.00 0.000 117.647
10 / 94 $0.00 0.000 117.647
11 / 94 $0.00 0.000 117.647
12 / 94 $3.21 0.376 118.023 115.340
1 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
2 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
3 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
4 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
5 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
6 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
7 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340 88.968
8 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340 $0.00 0.000 88.968
</TABLE>
<PAGE> 2
JOHN HANCOCK GLOBAL RETAIL FUND (CLASS A) - SEC TOTAL RETURN
<TABLE>
<S> <C> <C> <C> <C>
Initial Investment: $1,000.00
---------------------------------------------------- ---------------------------------------------
Average Annual Total Return Investment Value at End of Period
10 Year Return: N/A 10 Year Value: $0.00
5 Year Return: N/A 5 Year Value: $0.00
----------
3 Year Return: N/A 3 Year Value: $0.00 Cumm.
Return YTD
0.92 Year Return: 31.65% 1 Year Value: $1,287.90 28.79%
----------
Year to Date Return: 25.85% Year to Date Value: $1,258.49
Monthly Return: -2.87% Monthly Value: $971.26
- ----------------------------------------------------- ---------------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year
-------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/29/94 $8.50 $8.95 5.00%
9 / 94 $8.53 $8.98 5.00%
10 / 94 $8.76 $9.22 5.00%
11 / 94 $8.57 $9.02 5.00%
12 / 94 $8.67 $9.13 5.00% 12/23/94 $0.02726 $8.52
1 / 95 $8.47 $8.92 5.00%
2 / 95 $8.62 $9.07 5.00%
3 / 95 $9.27 $9.76 5.00%
4 / 95 $9.30 $9.79 5.00%
5 / 95 $9.37 $9.86 5.00%
6 / 95 $10.27 $10.81 5.00%
7 / 95 $11.24 $11.83 5.00%
8 / 95 $11.49 $12.09 5.00%
</TABLE>
<TABLE>
<CAPTION>
1-Year Year-to-Date Monthly
------------------------------------------------------------------------------------------------------
Month Dividend # Shares Shares Dividend # Shares Shares Dividend # Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/29/94 111.732
9 / 94 $0.00 0.000 111.732
10 / 94 $0.00 0.000 111.732
11 / 94 $0.00 0.000 111.732
12 / 94 $3.05 0.357 112.089 109.529
1 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
2 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
3 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
4 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
5 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
6 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
7 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529 84.531
8 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529 $0.00 0.000 84.531
</TABLE>
<PAGE> 3
JOHN HANCOCK GLOBAL RX - TOTAL RETURN CLASS A
Initial Investment: $1,000.00
<TABLE>
<S> <C>
- ------------------------------- -----------------------------------
Average Annual Total Return Investment Value at End of Period
10 Year Return: N/A 10 Year Value: N/A
3.91 Year Return: 21.78% 3.25 Year Value: $2,161.00
3 Year Return: 17.44% 3.00 Year Value: $1,619.95
1 Year Return: 30.89% 1 Year Value: $1,308.90
YTD Return: 23.70% YTD Value: $1,236.98
Monthly Return: 3.94% Monthly Return: $1,039.44
- ------------------------------- -----------------------------------
</TABLE>
* Since Inception
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
Payment/ 5-Year
----------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/1/91 $10.00 $10.00 0.00% 100.000
10 / 91 $10.79 $10.79 0.00% $0.0000 0.000 100.000
11 / 91 $10.83 $10.83 0.00% $0.0000 0.000 100.000
12 / 91 $13.40 $13.40 0.00% $0.0000 0.000 100.000
1 / 92 $14.86 $14.86 0.00% $0.0000 0.000 100.000
2 / 92 $14.38 $14.38 0.00% $0.0000 0.000 100.000
3 / 92 $13.77 $13.77 0.00% $0.0000 0.000 100.000
4 / 92 $12.87 $12.87 0.00% $0.0000 0.000 100.000
5 / 92 $13.01 $13.01 0.00% $0.0000 0.000 100.000
6 / 92 $12.60 $12.60 0.00% $0.0000 0.000 100.000
7 / 92 $13.63 $13.63 0.00% $0.0000 0.000 100.000
8 / 92 $13.34 $13.34 0.00% $0.0000 0.000 100.000
9 / 92 $13.09 $13.09 0.00% $0.0000 0.000 100.000
10 / 92 $13.89 $13.89 0.00% $0.0000 0.000 100.000
11 / 92 $15.19 $15.19 0.00% $0.0000 0.000 100.000
12 / 92 $15.86 $15.86 0.00% $0.0000 0.000 100.000
1 / 93 $15.41 $15.41 0.00% $0.0000 0.000 100.000
2 / 93 $12.54 $12.54 0.00% $0.0000 0.000 100.000
3 / 93 $12.87 $12.87 0.00% $0.0000 0.000 100.000
4 / 93 $12.85 $12.85 0.00% $0.0000 0.000 100.000
5 / 93 $13.58 $13.58 0.00% $0.0000 0.000 100.000
6 / 93 $13.72 $13.72 0.00% $0.0000 0.000 100.000
7 / 93 $13.47 $13.47 0.00% $0.0000 0.000 100.000
8 / 93 $13.38 $13.38 0.00% $0.0000 0.000 100.000
9 / 93 $14.22 $14.22 0.00% $0.0000 0.000 100.000
10 / 93 $14.94 $14.94 0.00% $0.0000 0.000 100.000
11 / 93 $14.65 $14.65 0.00% $0.0000 0.000 100.000
12 / 93 $16.05 $16.05 0.00% $0.0000 0.000 100.000
1 / 94 $17.34 $17.34 0.00% $0.0000 0.000 100.000
2 / 94 $17.31 $17.31 0.00% $0.0000 0.000 100.000
3 / 94 $15.78 $15.78 0.00% $0.0000 0.000 100.000
4 / 94 $15.89 $15.89 0.00% $0.0000 0.000 100.000
5 / 94 $15.81 $15.81 0.00% $0.0000 0.000 100.000
6 / 94 $14.72 $14.72 0.00% $0.0000 0.000 100.000
7 / 94 $15.12 $15.12 0.00% $0.0000 0.000 100.000
8 / 94 $16.51 $16.51 0.00% $0.0000 0.000 100.000
9 / 94 $16.81 $16.81 0.00% $0.0000 0.000 100.000
10 / 94 $17.03 $17.03 0.00% $0.0000 0.000 100.000
11 / 94 $16.69 $16.69 0.00% $0.0000 0.000 100.000
12 / 94 $17.47 $17.47 0.00% $0.0000 0.000 100.000
1 / 95 $17.84 $17.84 0.00% $0.0000 0.000 100.000
2 / 95 $18.57 $18.57 0.00% $0.0000 0.000 100.000
3 / 95 $19.65 $19.65 0.00% $0.0000 0.000 100.000
4 / 95 $18.92 $18.92 0.00% $0.0000 0.000 100.000
5 / 95 $18.80 $18.80 0.00% $0.0000 0.000 100.000
6 / 95 $19.02 $19.02 0.00% $0.0000 0.000 100.000
7 / 95 $20.79 $20.79 0.00% $0.0000 0.000 100.000
8 / 95 $21.61 $21.61 0.00% $0.0000 0.000 100.000
- ------------------------------------------------------------------------------------------------------------------
End of Period (update for formulas above):
21.610 100.000
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
3-Year 1-Year
------------------------------------------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10/1/91
10 / 91
11 / 91
12 / 91
1 / 92
2 / 92
3 / 92
4 / 92
5 / 92
6 / 92
7 / 92
8 / 92 74.963
9 / 92 $0.0000 0.000 74.963
10 / 92 $0.0000 0.000 74.963
11 / 92 $0.0000 0.000 74.963
12 / 92 $0.0000 0.000 74.963
1 / 93 $0.0000 0.000 74.963
2 / 93 $0.0000 0.000 74.963
3 / 93 $0.0000 0.000 74.963
4 / 93 $0.0000 0.000 74.963
5 / 93 $0.0000 0.000 74.963
6 / 93 $0.0000 0.000 74.963
7 / 93 $0.0000 0.000 74.963
8 / 93 $0.0000 0.000 74.963
9 / 93 $0.0000 0.000 74.963
10 / 93 $0.0000 0.000 74.963
11 / 93 $0.0000 0.000 74.963
12 / 93 $0.0000 0.000 74.963
1 / 94 $0.0000 0.000 74.963
2 / 94 $0.0000 0.000 74.963
3 / 94 $0.0000 0.000 74.963
4 / 94 $0.0000 0.000 74.963
5 / 94 $0.0000 0.000 74.963
6 / 94 $0.0000 0.000 74.963
7 / 94 $0.0000 0.000 74.963
8 / 94 $0.0000 0.000 74.963 60.569
9 / 94 $0.0000 0.000 74.963 $0.0000 0.000 60.569
10 / 94 $0.0000 0.000 74.963 $0.0000 0.000 60.569
11 / 94 $0.0000 0.000 74.963 $0.0000 0.000 60.569
12 / 94 $0.0000 0.000 74.963 $0.0000 0.000 60.569
1 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
2 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
3 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
4 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
5 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
6 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
7 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
8 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
- ---------------------------------------------------------------------------------
74.963 60.569
- ---------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
JOHN HANCOCK GLOBAL RX - TOTAL RETURN CLASS A
Initial Investment: $1,000.00
<TABLE>
<S> <C>
- ------------------------------- -----------------------------------
Average Annual Total Return Investment Value at End of Period
10 Year Return: N/A 10 Year Value: N/A
3.91 Year Return: 21.78% 3.25 Year Value: $2,161.00
3 Year Return: 17.44% 3.00 Year Value: $1,619.95
1 Year Return: 30.89% 1 Year Value: $1,308.90
YTD Return: 23.70% YTD Value: $1,236.98
Monthly Return: 3.94% Monthly Return: $1,039.44
- ------------------------------- -----------------------------------
</TABLE>
* Since Inception
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
Payment/ YTD
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/1/91 $10.00 $10.00 0.00%
10 / 91 $10.79 $10.79 0.00%
11 / 91 $10.83 $10.83 0.00%
12 / 91 $13.40 $13.40 0.00%
1 / 92 $14.86 $14.86 0.00%
2 / 92 $14.38 $14.38 0.00%
3 / 92 $13.77 $13.77 0.00%
4 / 92 $12.87 $12.87 0.00%
5 / 92 $13.01 $13.01 0.00%
6 / 92 $12.60 $12.60 0.00%
7 / 92 $13.63 $13.63 0.00%
8 / 92 $13.34 $13.34 0.00%
9 / 92 $13.09 $13.09 0.00%
10 / 92 $13.89 $13.89 0.00%
11 / 92 $15.19 $15.19 0.00%
12 / 92 $15.86 $15.86 0.00%
1 / 93 $15.41 $15.41 0.00%
2 / 93 $12.54 $12.54 0.00%
3 / 93 $12.87 $12.87 0.00%
4 / 93 $12.85 $12.85 0.00%
5 / 93 $13.58 $13.58 0.00%
6 / 93 $13.72 $13.72 0.00%
7 / 93 $13.47 $13.47 0.00%
8 / 93 $13.38 $13.38 0.00%
9 / 93 $14.22 $14.22 0.00%
10 / 93 $14.94 $14.94 0.00%
11 / 93 $14.65 $14.65 0.00%
12 / 93 $16.05 $16.05 0.00%
1 / 94 $17.34 $17.34 0.00%
2 / 94 $17.31 $17.31 0.00%
3 / 94 $15.78 $15.78 0.00%
4 / 94 $15.89 $15.89 0.00%
5 / 94 $15.81 $15.81 0.00%
6 / 94 $14.72 $14.72 0.00%
7 / 94 $15.12 $15.12 0.00%
8 / 94 $16.51 $16.51 0.00%
9 / 94 $16.81 $16.81 0.00%
10 / 94 $17.03 $17.03 0.00%
11 / 94 $16.69 $16.69 0.00%
12 / 94 $17.47 $17.47 0.00% 57.241
1 / 95 $17.84 $17.84 0.00% $0.0000 0.000 57.241
2 / 95 $18.57 $18.57 0.00% $0.0000 0.000 57.241
3 / 95 $19.65 $19.65 0.00% $0.0000 0.000 57.241
4 / 95 $18.92 $18.92 0.00% $0.0000 0.000 57.241
5 / 95 $18.80 $18.80 0.00% $0.0000 0.000 57.241
6 / 95 $19.02 $19.02 0.00% $0.0000 0.000 57.241
7 / 95 $20.79 $20.79 0.00% $0.0000 0.000 57.241
8 / 95 $21.61 $21.61 0.00% $0.0000 0.000 57.241
- --------------------------------------------------------------------------------------------------------------------
End of Period (update for formulas above):
21.610 57.241
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Monthly
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------------------------------------------
<S> <C> <C> <C>
10/1/91
10 / 91
11 / 91
12 / 91
1 / 92
2 / 92
3 / 92
4 / 92
5 / 92
6 / 92
7 / 92
8 / 92
9 / 92
10 / 92
11 / 92
12 / 92
1 / 93
2 / 93
3 / 93
4 / 93
5 / 93
6 / 93
7 / 93
8 / 93
9 / 93
10 / 93
11 / 93
12 / 93
1 / 94
2 / 94
3 / 94
4 / 94
5 / 94
6 / 94
7 / 94
8 / 94
9 / 94
10 / 94
11 / 94
12 / 94
1 / 95
2 / 95
3 / 95
4 / 95
5 / 95
6 / 95
7 / 95 48.100
8 / 95 $0.0000 0.000 48.100
- ---------------------------------------------
48.100
- ---------------------------------------------
</TABLE>
<PAGE> 5
JOHN HANCOCK GLOBAL RX - TOTAL RETURN CLASS A
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ----------------------------------------- ------------------------------------
Average Annual Total Return Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: N/A 10 Year Value: N/A
3.91 Year Return: 20.19% 3.25 Year Value: $2,052.24
3 Year Return: 15.46% 3.00 Year Value: $1,539.17
1 Year Return: 24.34% 1 Year Value: $1,243.37
YTD Return: 17.51% YTD Value: $1,175.09
Monthly Return: -1.23% Monthly Return: $987.66
- ----------------------------------------- ------------------------------------
</TABLE>
* Since Inception
Constant Sales Charge: 6.00%
<TABLE>
<CAPTION>
Payment/ 5-Year
----------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/1/91 $10.00 $10.53 5.00% 94.967
10 / 91 $10.79 $11.36 5.00% $0.0000 0.000 94.967
11 / 91 $10.83 $11.40 5.00% $0.0000 0.000 94.967
12 / 91 $13.40 $14.11 5.00% $0.0000 0.000 94.967
1 / 92 $14.86 $15.64 5.00% $0.0000 0.000 94.967
2 / 92 $14.38 $15.14 5.00% $0.0000 0.000 94.967
3 / 92 $13.77 $14.49 5.00% $0.0000 0.000 94.967
4 / 92 $12.87 $13.55 5.00% $0.0000 0.000 94.967
5 / 92 $13.01 $13.69 5.00% $0.0000 0.000 94.967
6 / 92 $12.60 $13.26 5.00% $0.0000 0.000 94.967
7 / 92 $13.63 $14.35 5.00% $0.0000 0.000 94.967
8 / 92 $13.34 $14.04 5.00% $0.0000 0.000 94.967
9 / 92 $13.09 $13.78 5.00% $0.0000 0.000 94.967
10 / 92 $13.89 $14.62 5.00% $0.0000 0.000 94.967
11 / 92 $15.19 $15.99 5.00% $0.0000 0.000 94.967
12 / 92 $15.86 $16.69 5.00% $0.0000 0.000 94.967
1 / 93 $15.41 $16.22 5.00% $0.0000 0.000 94.967
2 / 93 $12.54 $13.20 5.00% $0.0000 0.000 94.967
3 / 93 $12.87 $13.55 5.00% $0.0000 0.000 94.967
4 / 93 $12.85 $13.53 5.00% $0.0000 0.000 94.967
5 / 93 $13.58 $14.29 5.00% $0.0000 0.000 94.967
6 / 93 $13.72 $14.44 5.00% $0.0000 0.000 94.967
7 / 93 $13.47 $14.18 5.00% $0.0000 0.000 94.967
8 / 93 $13.38 $14.08 5.00% $0.0000 0.000 94.967
9 / 93 $14.22 $14.97 5.00% $0.0000 0.000 94.967
10 / 93 $14.94 $15.73 5.00% $0.0000 0.000 94.967
11 / 93 $14.65 $15.42 5.00% $0.0000 0.000 94.967
12 / 93 $16.05 $16.89 5.00% $0.0000 0.000 94.967
1 / 94 $17.34 $18.25 5.00% $0.0000 0.000 94.967
2 / 94 $17.31 $18.22 5.00% $0.0000 0.000 94.967
3 / 94 $15.78 $16.61 5.00% $0.0000 0.000 94.967
4 / 94 $15.89 $16.73 5.00% $0.0000 0.000 94.967
5 / 94 $15.81 $16.64 5.00% $0.0000 0.000 94.967
6 / 94 $14.72 $15.49 5.00% $0.0000 0.000 94.967
7 / 94 $15.12 $15.92 5.00% $0.0000 0.000 94.967
8 / 94 $16.51 $17.38 5.00% $0.0000 0.000 94.967
9 / 94 $16.81 $17.69 5.00% $0.0000 0.000 94.967
10 / 94 $17.03 $17.93 5.00% $0.0000 0.000 94.967
11 / 94 $16.69 $17.57 5.00% $0.0000 0.000 94.967
12 / 94 $17.47 $18.39 5.00% $0.0000 0.000 94.967
1 / 95 $17.84 $18.78 5.00% $0.0000 0.000 94.967
2 / 95 $18.57 $19.55 5.00% $0.0000 0.000 94.967
3 / 95 $19.65 $20.68 5.00% $0.0000 0.000 94.967
4 / 95 $18.92 $19.92 5.00% $0.0000 0.000 94.967
5 / 95 $18.80 $19.79 5.00% $0.0000 0.000 94.967
6 / 95 $19.02 $20.02 5.00% $0.0000 0.000 94.967
7 / 95 $20.79 $21.88 5.00% $0.0000 0.000 94.967
8 / 95 $21.61 $22.75 5.00% $0.0000 0.000 94.967
- ----------------------------------------------------------------------------------------------------------------
End of Period (update for formulas above):
21.610 94.967
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
3-Year 1-Year
----------------------------------------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/1/91
10 / 91
11 / 91
12 / 91
1 / 92
2 / 92
3 / 92
4 / 92
5 / 92
6 / 92
7 / 92
8 / 92 71.225
9 / 92 $0.0000 0.000 71.225
10 / 92 $0.0000 0.000 71.225
11 / 92 $0.0000 0.000 71.225
12 / 92 $0.0000 0.000 71.225
1 / 93 $0.0000 0.000 71.225
2 / 93 $0.0000 0.000 71.225
3 / 93 $0.0000 0.000 71.225
4 / 93 $0.0000 0.000 71.225
5 / 93 $0.0000 0.000 71.225
6 / 93 $0.0000 0.000 71.225
7 / 93 $0.0000 0.000 71.225
8 / 93 $0.0000 0.000 71.225
9 / 93 $0.0000 0.000 71.225
10 / 93 $0.0000 0.000 71.225
11 / 93 $0.0000 0.000 71.225
12 / 93 $0.0000 0.000 71.225
1 / 94 $0.0000 0.000 71.225
2 / 94 $0.0000 0.000 71.225
3 / 94 $0.0000 0.000 71.225
4 / 94 $0.0000 0.000 71.225
5 / 94 $0.0000 0.000 71.225
6 / 94 $0.0000 0.000 71.225
7 / 94 $0.0000 0.000 71.225
8 / 94 $0.0000 0.000 71.225 57.537
9 / 94 $0.0000 0.000 71.225 $0.0000 0.000 57.537
10 / 94 $0.0000 0.000 71.225 $0.0000 0.000 57.537
11 / 94 $0.0000 0.000 71.225 $0.0000 0.000 57.537
12 / 94 $0.0000 0.000 71.225 $0.0000 0.000 57.537
1 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
2 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
3 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
4 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
5 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
6 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
7 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
8 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
- ---------------------------------------------------------------------------------
71.225 57.537
- ---------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
JOHN HANCOCK GLOBAL RX - TOTAL RETURN CLASS A
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ----------------------------------------- ------------------------------------
Average Annual Total Return Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: N/A 10 Year Value: N/A
3.91 Year Return: 20.19% 3.25 Year Value: $2,052.24
3 Year Return: 15.46% 3.00 Year Value: $1,539.17
1 Year Return: 24.34% 1 Year Value: $1,243.37
YTD Return: 17.51% YTD Value: $1,175.09
Monthly Return: -1.23% Monthly Return: $987.66
- ----------------------------------------- ------------------------------------
</TABLE>
* Since Inception
Constant Sales Charge: 6.00%
<TABLE>
<CAPTION>
Payment/ YTD
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/1/91 $10.00 $10.53 5.00%
10 / 91 $10.79 $11.36 5.00%
11 / 91 $10.83 $11.40 5.00%
12 / 91 $13.40 $14.11 5.00%
1 / 92 $14.86 $15.64 5.00%
2 / 92 $14.38 $15.14 5.00%
3 / 92 $13.77 $14.49 5.00%
4 / 92 $12.87 $13.55 5.00%
5 / 92 $13.01 $13.69 5.00%
6 / 92 $12.60 $13.26 5.00%
7 / 92 $13.63 $14.35 5.00%
8 / 92 $13.34 $14.04 5.00%
9 / 92 $13.09 $13.78 5.00%
10 / 92 $13.89 $14.62 5.00%
11 / 92 $15.19 $15.99 5.00%
12 / 92 $15.86 $16.69 5.00%
1 / 93 $15.41 $16.22 5.00%
2 / 93 $12.54 $13.20 5.00%
3 / 93 $12.87 $13.55 5.00%
4 / 93 $12.85 $13.53 5.00%
5 / 93 $13.58 $14.29 5.00%
6 / 93 $13.72 $14.44 5.00%
7 / 93 $13.47 $14.18 5.00%
8 / 93 $13.38 $14.08 5.00%
9 / 93 $14.22 $14.97 5.00%
10 / 93 $14.94 $15.73 5.00%
11 / 93 $14.65 $15.42 5.00%
12 / 93 $16.05 $16.89 5.00%
1 / 94 $17.34 $18.25 5.00%
2 / 94 $17.31 $18.22 5.00%
3 / 94 $15.78 $16.61 5.00%
4 / 94 $15.89 $16.73 5.00%
5 / 94 $15.81 $16.64 5.00%
6 / 94 $14.72 $15.49 5.00%
7 / 94 $15.12 $15.92 5.00%
8 / 94 $16.51 $17.38 5.00%
9 / 94 $16.81 $17.69 5.00%
10 / 94 $17.03 $17.93 5.00%
11 / 94 $16.69 $17.57 5.00%
12 / 94 $17.47 $18.39 5.00% 54.377
1 / 95 $17.84 $18.78 5.00% $0.0000 0.000 54.377
2 / 95 $18.57 $19.55 5.00% $0.0000 0.000 54.377
3 / 95 $19.65 $20.68 5.00% $0.0000 0.000 54.377
4 / 95 $18.92 $19.92 5.00% $0.0000 0.000 54.377
5 / 95 $18.80 $19.79 5.00% $0.0000 0.000 54.377
6 / 95 $19.02 $20.02 5.00% $0.0000 0.000 54.377
7 / 95 $20.79 $21.88 5.00% $0.0000 0.000 54.377
8 / 95 $21.61 $22.75 5.00% $0.0000 0.000 54.377
- ----------------------------------------------------------------------------------------------------------------
End of Period (update for formulas above):
21.610 54.377
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Monthly
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------------------------------------------
<S> <C> <C> <C>
10/1/91
10 / 91
11 / 91
12 / 91
1 / 92
2 / 92
3 / 92
4 / 92
5 / 92
6 / 92
7 / 92
8 / 92
9 / 92
10 / 92
11 / 92
12 / 92
1 / 93
2 / 93
3 / 93
4 / 93
5 / 93
6 / 93
7 / 93
8 / 93
9 / 93
10 / 93
11 / 93
12 / 93
1 / 94
2 / 94
3 / 94
4 / 94
5 / 94
6 / 94
7 / 94
8 / 94
9 / 94
10 / 94
11 / 94
12 / 94
1 / 95
2 / 95
3 / 95
4 / 95
5 / 95
6 / 95
7 / 95 45.704
8 / 95 $0.0000 0.000 45.704
- ---------------------------------------------
45.704
- ---------------------------------------------
</TABLE>
<PAGE> 7
JOHN HANCOCK GLOBAL RX TOTAL RETURN - CLASS B
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ----------------------------------------------- ----------------------------------------------
Average Annual Total Return Investment Value at End of Period
CDSC
Excluding With Excluding % CDSC Ending
CDSC CDSC CDSC CDSC Amount Value
<S> <C> <C> <C> <C> <C> <C>
10 Year Return: N/A N/A N/A 0.00% N/A
5 Year Return: N/A N/A N/A 2.00% N/A
1.49 Year Return: 36.93% 30.37% $1,234.82 4.00% $40.00 $1,194.82
1.00 Year Return: 29.71% 24.71% $1,297.08 5.00% $50.00 $1,247.08
YTD Return: 22.91% 17.91% $1,229.14 5.00% $50.00 $1,179.14
Monthly Return: 3.84% -1.16% $1,038.42 5.00% $50.00 $988.42
- ----------------------------------------------- ----------------------------------------------
</TABLE>
Constant Sales Charge: N/A
<TABLE>
<CAPTION>
3-Year
----------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/07/94 $17.29 $17.29 N/A 57.837
3 / 94 $15.78 $15.78 N/A $0.0000 0.000 57.837
4 / 94 $15.88 $15.88 N/A $0.0000 0.000 57.837
5 / 94 $15.78 $15.78 N/A $0.0000 0.000 57.837
6 / 94 $14.69 $14.69 N/A $0.0000 0.000 57.837
7 / 94 $15.08 $15.08 N/A $0.0000 0.000 57.837
8 / 94 $16.46 $16.46 N/A $0.0000 0.000 57.837
9 / 94 $16.74 $16.74 N/A $0.0000 0.000 57.837
10 / 94 $16.95 $16.95 N/A $0.0000 0.000 57.837
11 / 94 $16.60 $16.60 N/A $0.0000 0.000 57.837
12 / 94 $17.37 $17.37 N/A $0.0000 0.000 57.837
1 / 95 $17.73 $17.73 N/A $0.0000 0.000 57.837
2 / 95 $18.44 $18.44 N/A $0.0000 0.000 57.837
3 / 95 $19.49 $19.49 N/A $0.0000 0.000 57.837
4 / 95 $18.75 $18.75 N/A $0.0000 0.000 57.837
5 / 95 $18.62 $18.62 N/A $0.0000 0.000 57.837
6 / 95 $18.82 $18.82 N/A $0.0000 0.000 57.837
7 / 95 $20.56 $20.56 N/A $0.0000 0.000 57.837
8 / 95 $21.35 $21.35 N/A $0.0000 0.000 57.837
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1-Year YTD Monthly
----------------------------------------------------------------------------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/07/94
3 / 94
4 / 94
5 / 94
6 / 94
7 / 94
8 / 94 60.753
9 / 94 $0.0000 0.000 60.753
10 / 94 $0.0000 0.000 60.753
11 / 94 $0.0000 0.000 60.753
12 / 94 $0.0000 0.000 60.753 57.571
1 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
2 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
3 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
4 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
5 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
6 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
7 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571 48.638
8 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571 $0.0000 0.000 48.638
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.00 0.00%
09/87 $10.00 $10.00 0.00%
10/87 $8.98 $8.98 0.00%
11/87 $8.94 $8.94 0.00%
12/87 $9.05 $9.05 0.00% 12/30/87 $0.0275 $9.15
01/88 $9.37 $9.37 0.00%
02/88 $9.96 $9.96 0.00%
03/88 $10.66 $10.66 0.00%
04/88 $11.03 $11.03 0.00%
05/88 $10.73 $10.73 0.00%
06/88 $10.35 $10.35 0.00%
07/88 $10.52 $10.52 0.00%
08/88 $9.61 $9.61 0.00%
09/88 $9.87 $9.87 0.00%
10/88 $10.68 $10.68 0.00%
11/88 $11.20 $11.20 0.00%
12/88 $10.90 $10.90 0.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain
01/89 $11.04 $11.04 0.00%
02/89 $11.16 $11.16 0.00%
03/89 $10.99 $10.99 0.00%
04/89 $11.30 $11.30 0.00%
05/89 $10.70 $10.70 0.00%
06/89 $10.13 $10.13 0.00%
07/89 $10.95 $10.95 0.00%
08/89 $11.10 $11.10 0.00%
09/89 $11.88 $11.88 0.00%
10/89 $11.81 $11.81 0.00%
11/89 $12.44 $12.44 0.00%
12/89 $12.14 $12.14 0.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain
01/90 $11.85 $11.85 0.00%
02/90 $11.31 $11.31 0.00%
03/90 $10.92 $10.92 0.00%
04/90 $10.58 $10.58 0.00%
05/90 $11.34 $11.34 0.00%
06/90 $11.59 $11.59 0.00%
07/90 $12.33 $12.33 0.00%
08/90 $10.34 $10.34 0.00%
09/90 $8.88 $8.88 0.00%
10/90 $9.77 $9.77 0.00%
11/90 $9.31 $9.31 0.00%
12/90 $8.36 $8.36 0.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain
01/91 $8.43 $8.43 0.00%
02/91 $9.22 $9.22 0.00%
03/91 $9.35 $9.35 0.00%
</TABLE>
<TABLE>
<CAPTION>
10-Year 5-Year
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
9/8/87 100.000
09/87 $0.0000 0.000 100.000
10/87 $0.0000 0.000 100.000
11/87 $0.0000 0.000 100.000
12/87 $2.7500 0.301 100.301
01/88 $0.0000 0.000 100.301
02/88 $0.0000 0.000 100.301
03/88 $0.0000 0.000 100.301
04/88 $0.0000 0.000 100.301
05/88 $0.0000 0.000 100.301
06/88 $0.0000 0.000 100.301
07/88 $0.0000 0.000 100.301
08/88 $0.0000 0.000 100.301
09/88 $0.0000 0.000 100.301
10/88 $0.0000 0.000 100.301
11/88 $0.0000 0.000 100.301
12/88 $24.3230 2.217 102.518
01/89 $0.0000 0.000 102.518
02/89 $0.0000 0.000 102.518
03/89 $0.0000 0.000 102.518
04/89 $0.0000 0.000 102.518
05/89 $0.0000 0.000 102.518
06/89 $0.0000 0.000 102.518
07/89 $0.0000 0.000 102.518
08/89 $0.0000 0.000 102.518
09/89 $0.0000 0.000 102.518
10/89 $0.0000 0.000 102.518
11/89 $0.0000 0.000 102.518
12/89 $84.5774 7.054 109.572
01/90 $0.0000 0.000 109.572
02/90 $0.0000 0.000 109.572
03/90 $0.0000 0.000 109.572
04/90 $0.0000 0.000 109.572
05/90 $0.0000 0.000 109.572
06/90 $0.0000 0.000 109.572
07/90 $0.0000 0.000 109.572
08/90 $0.0000 0.000 109.572 96.712
09/90 $0.0000 0.000 109.572 $0.0000 0.000 96.712
10/90 $0.0000 0.000 109.572 $0.0000 0.000 96.712
11/90 $0.0000 0.000 109.572 $0.0000 0.000 96.712
12/90 $104.3673 2.933 122.505 $92.1182 11.415 108.127
01/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
02/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
03/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
</TABLE>
<PAGE> 9
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $9.80 0.00%
05/91 $9.80 $9.80 0.00%
06/91 $9.36 $9.36 0.00%
07/91 $9.42 $9.42 0.00%
08/91 $9.05 $9.05 0.00%
09/91 $9.27 $9.27 0.00%
10/91 $9.36 $9.36 0.00%
11/91 $9.09 $9.09 0.00%
12/91 $9.42 $9.42 0.00%
01/92 $9.41 $9.41 0.00%
02/92 $9.28 $9.28 0.00%
03/92 $8.91 $8.91 0.00%
04/92 $8.96 $8.96 0.00%
05/92 $9.47 $9.47 0.00%
06/92 $9.27 $9.27 0.00%
07/92 $8.83 $8.83 0.00%
08/92 $8.87 $8.87 0.00%
09/92 $9.03 $9.03 0.00%
10/92 $9.33 $9.33 0.00%
11/92 $9.49 $9.49 0.00%
12/92 $9.61 $9.61 0.00%
01/93 $9.94 $9.94 0.00%
02/93 $10.52 $10.52 0.00%
03/93 $10.91 $10.91 0.00%
04/93 $11.82 $11.82 0.00%
05/93 $12.54 $12.54 0.00%
06/93 $12.13 $12.13 0.00%
07/93 $12.49 $12.49 0.00%
08/93 $13.27 $13.27 0.00%
09/93 $13.22 $13.22 0.00%
10/93 $14.52 $14.52 0.00%
11/93 $14.13 $14.13 0.00%
12/93 $15.96 $15.96 0.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain
01/94 $15.92 $15.92 0.00%
02/94 $15.55 $15.55 0.00%
03/94 $14.49 $14.49 0.00%
04/94 $14.84 $14.84 0.00%
05/94 $15.35 $15.35 0.00%
06/94 $14.93 $14.93 0.00%
07/94 $15.14 $15.14 0.00%
08/94 $15.88 $15.88 0.00%
09/94 $15.49 $15.49 0.00%
10/94 $15.85 $15.85 0.00%
11/94 $14.56 $14.56 0.00%
12/94 $13.93 $13.93 0.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain
</TABLE>
<TABLE>
<CAPTION>
10-Year 5-Year
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
04/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
05/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
06/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
07/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
08/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
09/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
10/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
11/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
12/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
01/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
02/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
03/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
04/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
05/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
06/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
07/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
08/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
09/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
10/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
11/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
12/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
01/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
02/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
03/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
04/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
05/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
06/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
07/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
08/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
09/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
10/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
11/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
12/93 $49.6096 3.228 125.733 $43.7871 2.849 110.976
01/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
02/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
03/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
04/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
05/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
06/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
07/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
08/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
09/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
10/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
11/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
12/94 $68.9243 4.951 130.684 $60.8348 4.370 115.346
</TABLE>
<PAGE> 10
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $12.58 0.00%
2/95 $13.12 $13.12 0.00%
3/95 $13.49 $13.49 0.00%
4/95 $13.85 $13.85 0.00%
5/95 $14.22 $14.22 0.00%
6/95 $13.83 $13.83 0.00%
7/95 $14.63 $14.63 0.00%
8/95 $14.11 $14.11 0.00%
</TABLE>
<TABLE>
<CAPTION>
10-Year 5-Year
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
1/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
2/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
3/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
4/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
5/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
6/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
7/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
8/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
</TABLE>
<PAGE> 11
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.00 0.00%
09/87 $10.00 $10.00 0.00%
10/87 $8.98 $8.98 0.00%
11/87 $8.94 $8.94 0.00%
12/87 $9.05 $9.05 0.00% 12/30/87 $0.0275 $9.15
01/88 $9.37 $9.37 0.00%
02/88 $9.96 $9.96 0.00%
03/88 $10.66 $10.66 0.00%
04/88 $11.03 $11.03 0.00%
05/88 $10.73 $10.73 0.00%
06/88 $10.35 $10.35 0.00%
07/88 $10.52 $10.52 0.00%
08/88 $9.61 $9.61 0.00%
09/88 $9.87 $9.87 0.00%
10/88 $10.68 $10.68 0.00%
11/88 $11.20 $11.20 0.00%
12/88 $10.90 $10.90 0.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain
01/89 $11.04 $11.04 0.00%
02/89 $11.16 $11.16 0.00%
03/89 $10.99 $10.99 0.00%
04/89 $11.30 $11.30 0.00%
05/89 $10.70 $10.70 0.00%
06/89 $10.13 $10.13 0.00%
07/89 $10.95 $10.95 0.00%
08/89 $11.10 $11.10 0.00%
09/89 $11.88 $11.88 0.00%
10/89 $11.81 $11.81 0.00%
11/89 $12.44 $12.44 0.00%
12/89 $12.14 $12.14 0.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain
01/90 $11.85 $11.85 0.00%
02/90 $11.31 $11.31 0.00%
03/90 $10.92 $10.92 0.00%
04/90 $10.58 $10.58 0.00%
05/90 $11.34 $11.34 0.00%
06/90 $11.59 $11.59 0.00%
07/90 $12.33 $12.33 0.00%
08/90 $10.34 $10.34 0.00%
09/90 $8.88 $8.88 0.00%
10/90 $9.77 $9.77 0.00%
11/90 $9.31 $9.31 0.00%
12/90 $8.36 $8.36 0.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain
01/91 $8.43 $8.43 0.00%
02/91 $9.22 $9.22 0.00%
03/91 $9.35 $9.35 0.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year 1-Year
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
9/8/87
09/87
10/87
11/87
12/87
01/88
02/88
03/88
04/88
05/88
06/88
07/88
08/88
09/88
10/88
11/88
12/88
01/89
02/89
03/89
04/89
05/89
06/89
07/89
08/89
09/89
10/89
11/89
12/89
01/90
02/90
03/90
04/90
05/90
06/90
07/90
08/90
09/90
10/90
11/90
12/90
01/91
02/91
03/91
</TABLE>
<PAGE> 12
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $9.80 0.00%
05/91 $9.80 $9.80 0.00%
06/91 $9.36 $9.36 0.00%
07/91 $9.42 $9.42 0.00%
08/91 $9.05 $9.05 0.00%
09/91 $9.27 $9.27 0.00%
10/91 $9.36 $9.36 0.00%
11/91 $9.09 $9.09 0.00%
12/91 $9.42 $9.42 0.00%
01/92 $9.41 $9.41 0.00%
02/92 $9.28 $9.28 0.00%
03/92 $8.91 $8.91 0.00%
04/92 $8.96 $8.96 0.00%
05/92 $9.47 $9.47 0.00%
06/92 $9.27 $9.27 0.00%
07/92 $8.83 $8.83 0.00%
08/92 $8.87 $8.87 0.00%
09/92 $9.03 $9.03 0.00%
10/92 $9.33 $9.33 0.00%
11/92 $9.49 $9.49 0.00%
12/92 $9.61 $9.61 0.00%
01/93 $9.94 $9.94 0.00%
02/93 $10.52 $10.52 0.00%
03/93 $10.91 $10.91 0.00%
04/93 $11.82 $11.82 0.00%
05/93 $12.54 $12.54 0.00%
06/93 $12.13 $12.13 0.00%
07/93 $12.49 $12.49 0.00%
08/93 $13.27 $13.27 0.00%
09/93 $13.22 $13.22 0.00%
10/93 $14.52 $14.52 0.00%
11/93 $14.13 $14.13 0.00%
12/93 $15.96 $15.96 0.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain
01/94 $15.92 $15.92 0.00%
02/94 $15.55 $15.55 0.00%
03/94 $14.49 $14.49 0.00%
04/94 $14.84 $14.84 0.00%
05/94 $15.35 $15.35 0.00%
06/94 $14.93 $14.93 0.00%
07/94 $15.14 $15.14 0.00%
08/94 $15.88 $15.88 0.00%
09/94 $15.49 $15.49 0.00%
10/94 $15.85 $15.85 0.00%
11/94 $14.56 $14.56 0.00%
12/94 $13.93 $13.93 0.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain
</TABLE>
<TABLE>
<CAPTION>
3-Year 1-Year
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
04/91
05/91
06/91
07/91
08/91
09/91
10/91
11/91
12/91
01/92
02/92
03/92
04/92
05/92
06/92
07/92
08/92 112.740
09/92 $0.00 0.000 112.740
10/92 $0.00 0.000 112.740
11/92 $0.00 0.000 112.740
12/92 $0.00 0.000 112.740
01/93 $0.00 0.000 112.740
02/93 $0.00 0.000 112.740
03/93 $0.00 0.000 112.740
04/93 $0.00 0.000 112.740
05/93 $0.00 0.000 112.740
06/93 $0.00 0.000 112.740
07/93 $0.00 0.000 112.740
08/93 $0.00 0.000 112.740
09/93 $0.00 0.000 112.740
10/93 $0.00 0.000 112.740
11/93 $0.00 0.000 112.740
12/93 $45.66 2.970 115.710
01/94 $0.00 0.000 115.710
02/94 $0.00 0.000 115.710
03/94 $0.00 0.000 115.710
04/94 $0.00 0.000 115.710
05/94 $0.00 0.000 115.710
06/94 $0.00 0.000 115.710
07/94 $0.00 0.000 115.710
08/94 $0.00 0.000 115.710 62.972
09/94 $0.00 0.000 115.710 $0.0000 0.000 62.972
10/94 $0.00 0.000 115.710 $0.0000 0.000 62.972
11/94 $0.00 0.000 115.710 $0.0000 0.000 62.972
12/94 $63.43 4.557 120.267 $34.5200 2.480 65.452
</TABLE>
<PAGE> 13
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $12.58 0.00%
2/95 $13.12 $13.12 0.00%
3/95 $13.49 $13.49 0.00%
4/95 $13.85 $13.85 0.00%
5/95 $14.22 $14.22 0.00%
6/95 $13.83 $13.83 0.00%
7/95 $14.63 $14.63 0.00%
8/95 $14.11 $14.11 0.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year 1-Year
------------------------------------ -------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
2/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
3/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
4/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
5/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
6/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
7/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
8/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
</TABLE>
<PAGE> 14
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.00 0.00%
09/87 $10.00 $10.00 0.00%
10/87 $8.98 $8.98 0.00%
11/87 $8.94 $8.94 0.00%
12/87 $9.05 $9.05 0.00% 12/30/87 $0.0275 $9.15
01/88 $9.37 $9.37 0.00%
02/88 $9.96 $9.96 0.00%
03/88 $10.66 $10.66 0.00%
04/88 $11.03 $11.03 0.00%
05/88 $10.73 $10.73 0.00%
06/88 $10.35 $10.35 0.00%
07/88 $10.52 $10.52 0.00%
08/88 $9.61 $9.61 0.00%
09/88 $9.87 $9.87 0.00%
10/88 $10.68 $10.68 0.00%
11/88 $11.20 $11.20 0.00%
12/88 $10.90 $10.90 0.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain
01/89 $11.04 $11.04 0.00%
02/89 $11.16 $11.16 0.00%
03/89 $10.99 $10.99 0.00%
04/89 $11.30 $11.30 0.00%
05/89 $10.70 $10.70 0.00%
06/89 $10.13 $10.13 0.00%
07/89 $10.95 $10.95 0.00%
08/89 $11.10 $11.10 0.00%
09/89 $11.88 $11.88 0.00%
10/89 $11.81 $11.81 0.00%
11/89 $12.44 $12.44 0.00%
12/89 $12.14 $12.14 0.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain
01/90 $11.85 $11.85 0.00%
02/90 $11.31 $11.31 0.00%
03/90 $10.92 $10.92 0.00%
04/90 $10.58 $10.58 0.00%
05/90 $11.34 $11.34 0.00%
06/90 $11.59 $11.59 0.00%
07/90 $12.33 $12.33 0.00%
08/90 $10.34 $10.34 0.00%
09/90 $8.88 $8.88 0.00%
10/90 $9.77 $9.77 0.00%
11/90 $9.31 $9.31 0.00%
12/90 $8.36 $8.36 0.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain
01/91 $8.43 $8.43 0.00%
02/91 $9.22 $9.22 0.00%
03/91 $9.35 $9.35 0.00%
</TABLE>
<TABLE>
<CAPTION>
YTD Monthly
------------------------------------ -------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
9/8/87
09/87
10/87
11/87
12/87
01/88
02/88
03/88
04/88
05/88
06/88
07/88
08/88
09/88
10/88
11/88
12/88
01/89
02/89
03/89
04/89
05/89
06/89
07/89
08/89
09/89
10/89
11/89
12/89
01/90
02/90
03/90
04/90
05/90
06/90
07/90
08/90
09/90
10/90
11/90
12/90
01/91
02/91
03/91
</TABLE>
<PAGE> 15
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $9.80 0.00%
05/91 $9.80 $9.80 0.00%
06/91 $9.36 $9.36 0.00%
07/91 $9.42 $9.42 0.00%
08/91 $9.05 $9.05 0.00%
09/91 $9.27 $9.27 0.00%
10/91 $9.36 $9.36 0.00%
11/91 $9.09 $9.09 0.00%
12/91 $9.42 $9.42 0.00%
01/92 $9.41 $9.41 0.00%
02/92 $9.28 $9.28 0.00%
03/92 $8.91 $8.91 0.00%
04/92 $8.96 $8.96 0.00%
05/92 $9.47 $9.47 0.00%
06/92 $9.27 $9.27 0.00%
07/92 $8.83 $8.83 0.00%
08/92 $8.87 $8.87 0.00%
09/92 $9.03 $9.03 0.00%
10/92 $9.33 $9.33 0.00%
11/92 $9.49 $9.49 0.00%
12/92 $9.61 $9.61 0.00%
01/93 $9.94 $9.94 0.00%
02/93 $10.52 $10.52 0.00%
03/93 $10.91 $10.91 0.00%
04/93 $11.82 $11.82 0.00%
05/93 $12.54 $12.54 0.00%
06/93 $12.13 $12.13 0.00%
07/93 $12.49 $12.49 0.00%
08/93 $13.27 $13.27 0.00%
09/93 $13.22 $13.22 0.00%
10/93 $14.52 $14.52 0.00%
11/93 $14.13 $14.13 0.00%
12/93 $15.96 $15.96 0.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain
01/94 $15.92 $15.92 0.00%
02/94 $15.55 $15.55 0.00%
03/94 $14.49 $14.49 0.00%
04/94 $14.84 $14.84 0.00%
05/94 $15.35 $15.35 0.00%
06/94 $14.93 $14.93 0.00%
07/94 $15.14 $15.14 0.00%
08/94 $15.88 $15.88 0.00%
09/94 $15.49 $15.49 0.00%
10/94 $15.85 $15.85 0.00%
11/94 $14.56 $14.56 0.00%
12/94 $13.93 $13.93 0.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain
</TABLE>
<TABLE>
<CAPTION>
YTD Monthly
------------------------------------ -------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
04/91
05/91
06/91
07/91
08/91
09/91
10/91
11/91
12/91
01/92
02/92
03/92
04/92
05/92
06/92
07/92
08/92
09/92
10/92
11/92
12/92
01/93
02/93
03/93
04/93
05/93
06/93
07/93
08/93
09/93
10/93
11/93
12/93
01/94
02/94
03/94
04/94
05/94
06/94
07/94
08/94
09/94
10/94
11/94
12/94 71.788
</TABLE>
<PAGE> 16
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $12.58 0.00%
2/95 $13.12 $13.12 0.00%
3/95 $13.49 $13.49 0.00%
4/95 $13.85 $13.85 0.00%
5/95 $14.22 $14.22 0.00%
6/95 $13.83 $13.83 0.00%
7/95 $14.63 $14.63 0.00%
8/95 $14.11 $14.11 0.00%
</TABLE>
<TABLE>
<CAPTION>
YTD Monthly
------------------------------------ -------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1/95 $0.0000 0.000 71.788
2/95 $0.0000 0.000 71.788
3/95 $0.0000 0.000 71.788
4/95 $0.0000 0.000 71.788
5/95 $0.0000 0.000 71.788
6/95 $0.0000 0.000 71.788
7/95 $0.0000 0.000 71.788 68.353
8/95 $0.0000 0.000 71.788 $0.0000 0.000 68.353
</TABLE>
<PAGE> 17
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
10-Year
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.53 5.00% 94.967
09/87 $10.00 $10.53 5.00% $0.0000 0.000 94.967
10/87 $8.98 $9.45 5.00% $0.0000 0.000 94.967
11/87 $8.94 $9.41 5.00% $0.0000 0.000 94.967
12/87 $9.05 $9.53 5.00% 12/30/87 $0.0275 $9.15 $2.6116 0.285 95.252
01/88 $9.37 $9.86 5.00% $0.0000 0.000 95.252
02/88 $9.96 $10.48 5.00% $0.0000 0.000 95.252
03/88 $10.66 $11.22 5.00% $0.0000 0.000 95.252
04/88 $11.03 $11.61 5.00% $0.0000 0.000 95.252
05/88 $10.73 $11.29 5.00% $0.0000 0.000 95.252
06/88 $10.35 $10.89 5.00% $0.0000 0.000 95.252
07/88 $10.52 $11.07 5.00% $0.0000 0.000 95.252
08/88 $9.61 $10.12 5.00% $0.0000 0.000 95.252
09/88 $9.87 $10.39 5.00% $0.0000 0.000 95.252
10/88 $10.68 $11.24 5.00% $0.0000 0.000 95.252
11/88 $11.20 $11.79 5.00% $0.0000 0.000 95.252
12/88 $10.90 $11.47 5.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain $23.0986 2.106 97.358
01/89 $11.04 $11.62 5.00% $0.0000 0.000 97.358
02/89 $11.16 $11.75 5.00% $0.0000 0.000 97.358
03/89 $10.99 $11.57 5.00% $0.0000 0.000 97.358
04/89 $11.30 $11.89 5.00% $0.0000 0.000 97.358
05/89 $10.70 $11.26 5.00% $0.0000 0.000 97.358
06/89 $10.13 $10.66 5.00% $0.0000 0.000 97.358
07/89 $10.95 $11.53 5.00% $0.0000 0.000 97.358
08/89 $11.10 $11.68 5.00% $0.0000 0.000 97.358
09/89 $11.88 $12.51 5.00% $0.0000 0.000 97.358
10/89 $11.81 $12.43 5.00% $0.0000 0.000 97.358
11/89 $12.44 $13.09 5.00% $0.0000 0.000 97.358
12/89 $12.14 $12.78 5.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain $80.3204 6.699 104.057
01/90 $11.85 $12.47 5.00% $0.0000 0.000 104.057
02/90 $11.31 $11.91 5.00% $0.0000 0.000 104.057
03/90 $10.92 $11.49 5.00% $0.0000 0.000 104.057
04/90 $10.58 $11.14 5.00% $0.0000 0.000 104.057
05/90 $11.34 $11.94 5.00% $0.0000 0.000 104.057
06/90 $11.59 $12.20 5.00% $0.0000 0.000 104.057
07/90 $12.33 $12.98 5.00% $0.0000 0.000 104.057
08/90 $10.34 $10.88 5.00% $0.0000 0.000 104.057
09/90 $8.88 $9.35 5.00% $0.0000 0.000 104.057
10/90 $9.77 $10.28 5.00% $0.0000 0.000 104.057
11/90 $9.31 $9.80 5.00% $0.0000 0.000 104.057
12/90 $8.36 $8.80 5.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain $99.1143 12.282 116.339
01/91 $8.43 $8.87 5.00% $0.0000 0.000 116.339
02/91 $9.22 $9.71 5.00% $0.0000 0.000 116.339
03/91 $9.35 $9.84 5.00% $0.0000 0.000 116.339
<CAPTION>
5-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------------
<S> <C> <C> <C>
9/8/87
09/87
10/87
11/87
12/87
01/88
02/88
03/88
04/88
05/88
06/88
07/88
08/88
09/88
10/88
11/88
12/88
01/89
02/89
03/89
04/89
05/89
06/89
07/89
08/89
09/89
10/89
11/89
12/89
01/90
02/90
03/90
04/90
05/90
06/90
07/90
08/90 91.912
09/90 $0.0000 0.000 91.912
10/90 $0.0000 0.000 91.912
11/90 $0.0000 0.000 91.912
12/90 $87.5462 10.848 102.760
01/91 $0.0000 0.000 102.760
02/91 $0.0000 0.000 102.760
03/91 $0.0000 0.000 102.760
</TABLE>
<PAGE> 18
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
10-Year
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $10.32 5.00% $0.0000 0.000 116.339
05/91 $9.80 $10.32 5.00% $0.0000 0.000 116.339
06/91 $9.36 $9.85 5.00% $0.0000 0.000 116.339
07/91 $9.42 $9.92 5.00% $0.0000 0.000 116.339
08/91 $9.05 $9.53 5.00% $0.0000 0.000 116.339
09/91 $9.27 $9.76 5.00% $0.0000 0.000 116.339
10/91 $9.36 $9.85 5.00% $0.0000 0.000 116.339
11/91 $9.09 $9.57 5.00% $0.0000 0.000 116.339
12/91 $9.42 $9.92 5.00% $0.0000 0.000 116.339
01/92 $9.41 $9.91 5.00% $0.0000 0.000 116.339
02/92 $9.28 $9.77 5.00% $0.0000 0.000 116.339
03/92 $8.91 $9.38 5.00% $0.0000 0.000 116.339
04/92 $8.96 $9.43 5.00% $0.0000 0.000 116.339
05/92 $9.47 $9.97 5.00% $0.0000 0.000 116.339
06/92 $9.27 $9.76 5.00% $0.0000 0.000 116.339
07/92 $8.83 $9.29 5.00% $0.0000 0.000 116.339
08/92 $8.87 $9.34 5.00% $0.0000 0.000 116.339
09/92 $9.03 $9.51 5.00% $0.0000 0.000 116.339
10/92 $9.33 $9.82 5.00% $0.0000 0.000 116.339
11/92 $9.49 $9.99 5.00% $0.0000 0.000 116.339
12/92 $9.61 $10.12 5.00% $0.0000 0.000 116.339
01/93 $9.94 $10.46 5.00% $0.0000 0.000 116.339
02/93 $10.52 $11.07 5.00% $0.0000 0.000 116.339
03/93 $10.91 $11.48 5.00% $0.0000 0.000 116.339
04/93 $11.82 $12.44 5.00% $0.0000 0.000 116.339
05/93 $12.54 $13.20 5.00% $0.0000 0.000 116.339
06/93 $12.13 $12.77 5.00% $0.0000 0.000 116.339
07/93 $12.49 $13.15 5.00% $0.0000 0.000 116.339
08/93 $13.27 $13.97 5.00% $0.0000 0.000 116.339
09/93 $13.22 $13.92 5.00% $0.0000 0.000 116.339
10/93 $14.52 $15.28 5.00% $0.0000 0.000 116.339
11/93 $14.13 $14.87 5.00% $0.0000 0.000 116.339
12/93 $15.96 $16.80 5.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain $47.1126 3.065 119.404
01/94 $15.92 $16.76 5.00% $0.0000 0.000 119.404
02/94 $15.55 $16.37 5.00% $0.0000 0.000 119.404
03/94 $14.49 $15.25 5.00% $0.0000 0.000 119.404
04/94 $14.84 $15.62 5.00% $0.0000 0.000 119.404
05/94 $15.35 $16.16 5.00% $0.0000 0.000 119.404
06/94 $14.93 $15.72 5.00% $0.0000 0.000 119.404
07/94 $15.14 $15.94 5.00% $0.0000 0.000 119.404
08/94 $15.88 $16.72 5.00% $0.0000 0.000 119.404
09/94 $15.49 $16.31 5.00% $0.0000 0.000 119.404
10/94 $15.85 $16.68 5.00% $0.0000 0.000 119.404
11/94 $14.56 $15.33 5.00% $0.0000 0.000 119.404
12/94 $13.93 $14.66 5.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain $65.4549 4.702 124.106
<CAPTION>
5-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------------
<S> <C> <C> <C>
04/91 $0.0000 0.000 102.760
05/91 $0.0000 0.000 102.760
06/91 $0.0000 0.000 102.760
07/91 $0.0000 0.000 102.760
08/91 $0.0000 0.000 102.760
09/91 $0.0000 0.000 102.760
10/91 $0.0000 0.000 102.760
11/91 $0.0000 0.000 102.760
12/91 $0.0000 0.000 102.760
01/92 $0.0000 0.000 102.760
02/92 $0.0000 0.000 102.760
03/92 $0.0000 0.000 102.760
04/92 $0.0000 0.000 102.760
05/92 $0.0000 0.000 102.760
06/92 $0.0000 0.000 102.760
07/92 $0.0000 0.000 102.760
08/92 $0.0000 0.000 102.760
09/92 $0.0000 0.000 102.760
10/92 $0.0000 0.000 102.760
11/92 $0.0000 0.000 102.760
12/92 $0.0000 0.000 102.760
01/93 $0.0000 0.000 102.760
02/93 $0.0000 0.000 102.760
03/93 $0.0000 0.000 102.760
04/93 $0.0000 0.000 102.760
05/93 $0.0000 0.000 102.760
06/93 $0.0000 0.000 102.760
07/93 $0.0000 0.000 102.760
08/93 $0.0000 0.000 102.760
09/93 $0.0000 0.000 102.760
10/93 $0.0000 0.000 102.760
11/93 $0.0000 0.000 102.760
12/93 $41.6137 2.707 105.467
01/94 $0.0000 0.000 105.467
02/94 $0.0000 0.000 105.467
03/94 $0.0000 0.000 105.467
04/94 $0.0000 0.000 105.467
05/94 $0.0000 0.000 105.467
06/94 $0.0000 0.000 105.467
07/94 $0.0000 0.000 105.467
08/94 $0.0000 0.000 105.467
09/94 $0.0000 0.000 105.467
10/94 $0.0000 0.000 105.467
11/94 $0.0000 0.000 105.467
12/94 $57.8149 4.153 109.620
</TABLE>
<PAGE> 19
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
10-Year
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $13.24 5.00% $0.0000 0.000 124.106
2/95 $13.12 $13.81 5.00% $0.0000 0.000 124.106
3/95 $13.49 $14.20 5.00% $0.0000 0.000 124.106
4/95 $13.85 $14.58 5.00% $0.0000 0.000 124.106
5/95 $14.22 $14.97 5.00% $0.0000 0.000 124.106
6/95 $13.83 $14.56 5.00% $0.0000 0.000 124.106
7/95 $14.63 $15.40 5.00% $0.0000 0.000 124.106
8/95 $14.11 $14.85 5.00% $0.0000 0.000 124.106
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
5-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------------
<S> <C> <C> <C>
1/95 $0.0000 0.000 109.620
2/95 $0.0000 0.000 109.620
3/95 $0.0000 0.000 109.620
4/95 $0.0000 0.000 109.620
5/95 $0.0000 0.000 109.620
6/95 $0.0000 0.000 109.620
7/95 $0.0000 0.000 109.620
8/95 $0.0000 0.000 109.620
- ------------------------------------------------
</TABLE>
<PAGE> 20
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year
-------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.53 5.00%
09/87 $10.00 $10.53 5.00%
10/87 $8.98 $9.45 5.00%
11/87 $8.94 $9.41 5.00%
12/87 $9.05 $9.53 5.00% 12/30/87 $0.0275 $9.15
01/88 $9.37 $9.86 5.00%
02/88 $9.96 $10.48 5.00%
03/88 $10.66 $11.22 5.00%
04/88 $11.03 $11.61 5.00%
05/88 $10.73 $11.29 5.00%
06/88 $10.35 $10.89 5.00%
07/88 $10.52 $11.07 5.00%
08/88 $9.61 $10.12 5.00%
09/88 $9.87 $10.39 5.00%
10/88 $10.68 $11.24 5.00%
11/88 $11.20 $11.79 5.00%
12/88 $10.90 $11.47 5.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain
01/89 $11.04 $11.62 5.00%
02/89 $11.16 $11.75 5.00%
03/89 $10.99 $11.57 5.00%
04/89 $11.30 $11.89 5.00%
05/89 $10.70 $11.26 5.00%
06/89 $10.13 $10.66 5.00%
07/89 $10.95 $11.53 5.00%
08/89 $11.10 $11.68 5.00%
09/89 $11.88 $12.51 5.00%
10/89 $11.81 $12.43 5.00%
11/89 $12.44 $13.09 5.00%
12/89 $12.14 $12.78 5.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain
01/90 $11.85 $12.47 5.00%
02/90 $11.31 $11.91 5.00%
03/90 $10.92 $11.49 5.00%
04/90 $10.58 $11.14 5.00%
05/90 $11.34 $11.94 5.00%
06/90 $11.59 $12.20 5.00%
07/90 $12.33 $12.98 5.00%
08/90 $10.34 $10.88 5.00%
09/90 $8.88 $9.35 5.00%
10/90 $9.77 $10.28 5.00%
11/90 $9.31 $9.80 5.00%
12/90 $8.36 $8.80 5.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain
01/91 $8.43 $8.87 5.00%
02/91 $9.22 $9.71 5.00%
03/91 $9.35 $9.84 5.00%
<CAPTION>
1-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------------------------------------------
<S> <C> <C> <C>
9/8/87
09/87
10/87
11/87
12/87
01/88
02/88
03/88
04/88
05/88
06/88
07/88
08/88
09/88
10/88
11/88
12/88
01/89
02/89
03/89
04/89
05/89
06/89
07/89
08/89
09/89
10/89
11/89
12/89
01/90
02/90
03/90
04/90
05/90
06/90
07/90
08/90
09/90
10/90
11/90
12/90
01/91
02/91
03/91
</TABLE>
<PAGE> 21
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year
-------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $10.32 5.00%
05/91 $9.80 $10.32 5.00%
06/91 $9.36 $9.85 5.00%
07/91 $9.42 $9.92 5.00%
08/91 $9.05 $9.53 5.00%
09/91 $9.27 $9.76 5.00%
10/91 $9.36 $9.85 5.00%
11/91 $9.09 $9.57 5.00%
12/91 $9.42 $9.92 5.00%
01/92 $9.41 $9.91 5.00%
02/92 $9.28 $9.77 5.00%
03/92 $8.91 $9.38 5.00%
04/92 $8.96 $9.43 5.00%
05/92 $9.47 $9.97 5.00%
06/92 $9.27 $9.76 5.00%
07/92 $8.83 $9.29 5.00%
08/92 $8.87 $9.34 5.00% 107.066
09/92 $9.03 $9.51 5.00% $0.00 0.000 107.066
10/92 $9.33 $9.82 5.00% $0.00 0.000 107.066
11/92 $9.49 $9.99 5.00% $0.00 0.000 107.066
12/92 $9.61 $10.12 5.00% $0.00 0.000 107.066
01/93 $9.94 $10.46 5.00% $0.00 0.000 107.066
02/93 $10.52 $11.07 5.00% $0.00 0.000 107.066
03/93 $10.91 $11.48 5.00% $0.00 0.000 107.066
04/93 $11.82 $12.44 5.00% $0.00 0.000 107.066
05/93 $12.54 $13.20 5.00% $0.00 0.000 107.066
06/93 $12.13 $12.77 5.00% $0.00 0.000 107.066
07/93 $12.49 $13.15 5.00% $0.00 0.000 107.066
08/93 $13.27 $13.97 5.00% $0.00 0.000 107.066
09/93 $13.22 $13.92 5.00% $0.00 0.000 107.066
10/93 $14.52 $15.28 5.00% $0.00 0.000 107.066
11/93 $14.13 $14.87 5.00% $0.00 0.000 107.066
12/93 $15.96 $16.80 5.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain $43.36 2.821 109.887
01/94 $15.92 $16.76 5.00% $0.00 0.000 109.887
02/94 $15.55 $16.37 5.00% $0.00 0.000 109.887
03/94 $14.49 $15.25 5.00% $0.00 0.000 109.887
04/94 $14.84 $15.62 5.00% $0.00 0.000 109.887
05/94 $15.35 $16.16 5.00% $0.00 0.000 109.887
06/94 $14.93 $15.72 5.00% $0.00 0.000 109.887
07/94 $15.14 $15.94 5.00% $0.00 0.000 109.887
08/94 $15.88 $16.72 5.00% $0.00 0.000 109.887
09/94 $15.49 $16.31 5.00% $0.00 0.000 109.887
10/94 $15.85 $16.68 5.00% $0.00 0.000 109.887
11/94 $14.56 $15.33 5.00% $0.00 0.000 109.887
12/94 $13.93 $14.66 5.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain $60.24 4.327 114.214
<CAPTION>
1-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------------------------------------------
<S> <C> <C> <C>
04/91
05/91
06/91
07/91
08/91
09/91
10/91
11/91
12/91
01/92
02/92
03/92
04/92
05/92
06/92
07/92
08/92
09/92
10/92
11/92
12/92
01/93
02/93
03/93
04/93
05/93
06/93
07/93
08/93
09/93
10/93
11/93
12/93
01/94
02/94
03/94
04/94
05/94
06/94
07/94
08/94 59.809
09/94 $0.0000 0.000 59.809
10/94 $0.0000 0.000 59.809
11/94 $0.0000 0.000 59.809
12/94 $32.7861 2.355 62.164
</TABLE>
<PAGE> 22
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year
-------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $13.24 5.00% $0.00 0.000 114.214
2/95 $13.12 $13.81 5.00% $0.00 0.000 114.214
3/95 $13.49 $14.20 5.00% $0.00 0.000 114.214
4/95 $13.85 $14.58 5.00% $0.00 0.000 114.214
5/95 $14.22 $14.97 5.00% $0.00 0.000 114.214
6/95 $13.83 $14.56 5.00% $0.00 0.000 114.214
7/95 $14.63 $15.40 5.00% $0.00 0.000 114.214
8/95 $14.11 $14.85 5.00% $0.00 0.000 114.214
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
1-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------------------------------------------
<S> <C> <C> <C>
1/95 $0.0000 0.000 62.164
2/95 $0.0000 0.000 62.164
3/95 $0.0000 0.000 62.164
4/95 $0.0000 0.000 62.164
5/95 $0.0000 0.000 62.164
6/95 $0.0000 0.000 62.164
7/95 $0.0000 0.000 62.164
8/95 $0.0000 0.000 62.164
- ---------------------------------------------
</TABLE>
<PAGE> 23
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
YTD
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.53 5.00%
09/87 $10.00 $10.53 5.00%
10/87 $8.98 $9.45 5.00%
11/87 $8.94 $9.41 5.00%
12/87 $9.05 $9.53 5.00% 12/30/87 $0.0275 $9.15
01/88 $9.37 $9.86 5.00%
02/88 $9.96 $10.48 5.00%
03/88 $10.66 $11.22 5.00%
04/88 $11.03 $11.61 5.00%
05/88 $10.73 $11.29 5.00%
06/88 $10.35 $10.89 5.00%
07/88 $10.52 $11.07 5.00%
08/88 $9.61 $10.12 5.00%
09/88 $9.87 $10.39 5.00%
10/88 $10.68 $11.24 5.00%
11/88 $11.20 $11.79 5.00%
12/88 $10.90 $11.47 5.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain
01/89 $11.04 $11.62 5.00%
02/89 $11.16 $11.75 5.00%
03/89 $10.99 $11.57 5.00%
04/89 $11.30 $11.89 5.00%
05/89 $10.70 $11.26 5.00%
06/89 $10.13 $10.66 5.00%
07/89 $10.95 $11.53 5.00%
08/89 $11.10 $11.68 5.00%
09/89 $11.88 $12.51 5.00%
10/89 $11.81 $12.43 5.00%
11/89 $12.44 $13.09 5.00%
12/89 $12.14 $12.78 5.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain
01/90 $11.85 $12.47 5.00%
02/90 $11.31 $11.91 5.00%
03/90 $10.92 $11.49 5.00%
04/90 $10.58 $11.14 5.00%
05/90 $11.34 $11.94 5.00%
06/90 $11.59 $12.20 5.00%
07/90 $12.33 $12.98 5.00%
08/90 $10.34 $10.88 5.00%
09/90 $8.88 $9.35 5.00%
10/90 $9.77 $10.28 5.00%
11/90 $9.31 $9.80 5.00%
12/90 $8.36 $8.80 5.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain
01/91 $8.43 $8.87 5.00%
02/91 $9.22 $9.71 5.00%
03/91 $9.35 $9.84 5.00%
<CAPTION>
Monthly
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- --------------------------------------------
<S> <C> <C> <C>
9/8/87
09/87
10/87
11/87
12/87
01/88
02/88
03/88
04/88
05/88
06/88
07/88
08/88
09/88
10/88
11/88
12/88
01/89
02/89
03/89
04/89
05/89
06/89
07/89
08/89
09/89
10/89
11/89
12/89
01/90
02/90
03/90
04/90
05/90
06/90
07/90
08/90
09/90
10/90
11/90
12/90
01/91
02/91
03/91
</TABLE>
<PAGE> 24
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
YTD
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $10.32 5.00%
05/91 $9.80 $10.32 5.00%
06/91 $9.36 $9.85 5.00%
07/91 $9.42 $9.92 5.00%
08/91 $9.05 $9.53 5.00%
09/91 $9.27 $9.76 5.00%
10/91 $9.36 $9.85 5.00%
11/91 $9.09 $9.57 5.00%
12/91 $9.42 $9.92 5.00%
01/92 $9.41 $9.91 5.00%
02/92 $9.28 $9.77 5.00%
03/92 $8.91 $9.38 5.00%
04/92 $8.96 $9.43 5.00%
05/92 $9.47 $9.97 5.00%
06/92 $9.27 $9.76 5.00%
07/92 $8.83 $9.29 5.00%
08/92 $8.87 $9.34 5.00%
09/92 $9.03 $9.51 5.00%
10/92 $9.33 $9.82 5.00%
11/92 $9.49 $9.99 5.00%
12/92 $9.61 $10.12 5.00%
01/93 $9.94 $10.46 5.00%
02/93 $10.52 $11.07 5.00%
03/93 $10.91 $11.48 5.00%
04/93 $11.82 $12.44 5.00%
05/93 $12.54 $13.20 5.00%
06/93 $12.13 $12.77 5.00%
07/93 $12.49 $13.15 5.00%
08/93 $13.27 $13.97 5.00%
09/93 $13.22 $13.92 5.00%
10/93 $14.52 $15.28 5.00%
11/93 $14.13 $14.87 5.00%
12/93 $15.96 $16.80 5.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain
01/94 $15.92 $16.76 5.00%
02/94 $15.55 $16.37 5.00%
03/94 $14.49 $15.25 5.00%
04/94 $14.84 $15.62 5.00%
05/94 $15.35 $16.16 5.00%
06/94 $14.93 $15.72 5.00%
07/94 $15.14 $15.94 5.00%
08/94 $15.88 $16.72 5.00%
09/94 $15.49 $16.31 5.00%
10/94 $15.85 $16.68 5.00%
11/94 $14.56 $15.33 5.00% 68.213
12/94 $13.93 $14.66 5.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain
<CAPTION>
Monthly
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- --------------------------------------------
<S> <C> <C> <C>
04/91
05/91
06/91
07/91
08/91
09/91
10/91
11/91
12/91
01/92
02/92
03/92
04/92
05/92
06/92
07/92
08/92
09/92
10/92
11/92
12/92
01/93
02/93
03/93
04/93
05/93
06/93
07/93
08/93
09/93
10/93
11/93
12/93
01/94
02/94
03/94
04/94
05/94
06/94
07/94
08/94
09/94
10/94
11/94
12/94
</TABLE>
<PAGE> 25
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
YTD
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $13.24 5.00% $0.0000 0.000 68.213
2/95 $13.12 $13.81 5.00% $0.0000 0.000 68.213
3/95 $13.49 $14.20 5.00% $0.0000 0.000 68.213
4/95 $13.85 $14.58 5.00% $0.0000 0.000 68.213
5/95 $14.22 $14.97 5.00% $0.0000 0.000 68.213
6/95 $13.83 $14.56 5.00% $0.0000 0.000 68.213
7/95 $14.63 $15.40 5.00% $0.0000 0.000 68.213
8/95 $14.11 $14.85 5.00% $0.0000 0.000 68.213
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Monthly
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- --------------------------------------------
<S> <C> <C> <C>
1/95
2/95
3/95
4/95
5/95
6/95
7/95 64.935
8/95 $0.0000 0.000 64.935
- --------------------------------------------
</TABLE>
<PAGE> 26
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"B SHARES"
<TABLE>
Initial Investment: $1,000.00
<CAPTION>
------------------------------------------------- -------------------------------------------
Average Annual Total Return Investment Value at End of Period
CDSC
Excluding With Excluding % CDSC Ending
CDSC CDSC CDSC CDSC Amount Value
<S> <C> <C> <C> <C> <C> <C>
10 Year Return: N/A N/A N/A 0.00% N/A
5 Year Return: N/A N/A N/A 2.00% N/A
1.49 Year Return: (2.67)% (5.30)% $960.45 4.00% $38.42 $922.03
1 Year Return: (8.38)% (12.96)% $916.19 5.00% $45.81 $870.38
YTD Return: 0.79% (4.21)% $1,007.94 5.00% $50.00 $957.94
Monthly (3.66)% (8.48)% $963.42 5.00% $48.17 $915.25
------------------------------------------------- -------------------------------------------
Constant Sales Charge: N/A
</TABLE>
<TABLE>
<CAPTION>
10-Year
----------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 /4/ 94 $15.11 $15.11 N/A
3 / 94 $14.48 $14.48 N/A
4 / 94 $14.82 $14.82 N/A
5 / 94 $15.32 $15.32 N/A
6 / 94 $14.91 $14.91 N/A
7 / 94 $15.11 $15.11 N/A
8 / 94 $15.84 $15.84 N/A
9 / 94 $15.43 $15.43 N/A
10 / 94 $15.79 $15.79 N/A
11 / 94 $14.49 $14.49 N/A
12 / 94 $13.85 $13.85 N/A 12/23/94 $0.5482 $13.85 $0.5482 Cap Gain
1 / 95 $12.50 $12.50 N/A
2 / 95 $13.03 $13.03 N/A
3 / 95 $13.39 $13.39 N/A
4 / 95 $13.74 $13.74 N/A
5 / 95 $14.10 $14.10 N/A
6 / 95 $13.70 $13.70 N/A
7 / 95 $14.49 $14.49 N/A
8 / 95 $13.96 $13.96 N/A
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
5-Year 3-Year
---------------------------------- ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3 /4/ 94 66.181
3 / 94 $0.0000 0.000 66.181
4 / 94 $0.0000 0.000 66.181
5 / 94 $0.0000 0.000 66.181
6 / 94 $0.0000 0.000 66.181
7 / 94 $0.0000 0.000 66.181
8 / 94 $0.0000 0.000 66.181
9 / 94 $0.0000 0.000 66.181
10 / 94 $0.0000 0.000 66.181
11 / 94 $0.0000 0.000 66.181
12 / 94 $36.2791 2.619 68.800
1 / 95 $0.0000 0.000 68.800
2 / 95 $0.0000 0.000 68.800
3 / 95 $0.0000 0.000 68.800
4 / 95 $0.0000 0.000 68.800
5 / 95 $0.0000 0.000 68.800
6 / 95 $0.0000 0.000 68.800
7 / 95 $0.0000 0.000 68.800
8 / 95 $0.0000 0.000 68.800
- -----------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE> 27
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"B SHARES"
<TABLE>
Initial Investment: $1,000.00
<CAPTION>
------------------------------------------------- -------------------------------------------
Average Annual Total Return Investment Value at End of Period
CDSC
Excluding With Excluding % CDSC Ending
CDSC CDSC CDSC CDSC Amount Value
<S> <C> <C> <C> <C> <C> <C>
10 Year Return: N/A N/A N/A 0.00% N/A
5 Year Return: N/A N/A N/A 2.00% N/A
1.49 Year Return: (2.67)% (5.30)% $960.45 4.00% $38.42 $922.03
1 Year Return: (8.38)% (12.96)% $916.19 5.00% $45.81 $870.38
YTD Return: 0.79% (4.21)% $1,007.94 5.00% $50.00 $957.94
Monthly (3.66)% (8.48)% $963.42 5.00% $48.17 $915.25
------------------------------------------------- -------------------------------------------
Constant Sales Charge: N/A
</TABLE>
<TABLE>
<CAPTION>
1-Year
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 /4/ 94 $15.11 $15.11 N/A
3 / 94 $14.48 $14.48 N/A
4 / 94 $14.82 $14.82 N/A
5 / 94 $15.32 $15.32 N/A
6 / 94 $14.91 $14.91 N/A
7 / 94 $15.11 $15.11 N/A
8 / 94 $15.84 $15.84 N/A 63.131
9 / 94 $15.43 $15.43 N/A $0.0000 0.000 63.131
10 / 94 $15.79 $15.79 N/A $0.0000 0.000 63.131
11 / 94 $14.49 $14.49 N/A $0.0000 0.000 63.131
12 / 94 $13.85 $13.85 N/A 12/23/94 $0.5482 $13.85 $0.5482 Cap Gain $34.6072 2.499 65.630
1 / 95 $12.50 $12.50 N/A $0.0000 0.000 65.630
2 / 95 $13.03 $13.03 N/A $0.0000 0.000 65.630
3 / 95 $13.39 $13.39 N/A $0.0000 0.000 65.630
4 / 95 $13.74 $13.74 N/A $0.0000 0.000 65.630
5 / 95 $14.10 $14.10 N/A $0.0000 0.000 65.630
6 / 95 $13.70 $13.70 N/A $0.0000 0.000 65.630
7 / 95 $14.49 $14.49 N/A $0.0000 0.000 65.630
8 / 95 $13.96 $13.96 N/A $0.0000 0.000 65.630
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YTD Monthly
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3 /4/ 94
3 / 94
4 / 94
5 / 94
6 / 94
7 / 94
8 / 94
9 / 94
10 / 94
11 / 94
12 / 94 72.202
1 / 95 $0.0000 0.000 72.202
2 / 95 $0.0000 0.000 72.202
3 / 95 $0.0000 0.000 72.202
4 / 95 $0.0000 0.000 72.202
5 / 95 $0.0000 0.000 72.202
6 / 95 $0.0000 0.000 72.202
7 / 95 $0.0000 0.000 72.202 69.013
8 / 95 $0.0000 0.000 72.202 $0.0000 0.000 69.013
- --------------------------------------------------------------------------------------
</TABLE>
Page 2
<PAGE> 1
Exhibit 16
JOHN HANCOCK GLOBAL RETAIL FUND (CLASS A) - SEC TOTAL RETURN
<TABLE>
<S> <C> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------------------- --------------------------------------------
Average Annual Total Return Investment Value at End of Period
10 Year Return: N/A 10 Year Value: $0.00
5 Year Return: N/A 5 Year Value: $0.00
----------
3 Year Return: N/A 3 Year Value: $0.00 Cumm.
Return YTD
0.92 Year Return: 39.25% 1 Year Value: $1,356.08 35.61%
----------
Year to Date Return: 32.53% Year to Date Value: $1,325.26
Monthly Return: 2.22% Monthly Value: $1,022.24
- --------------------------------------------------- --------------------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year
-------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9 / 29 / 94 $8.50 $8.50 0.00%
9 / 94 $8.53 $8.53 0.00%
10 / 94 $8.76 $8.76 0.00%
11 / 94 $8.57 $8.57 0.00%
12 / 94 $8.67 $8.67 0.00% 12/23/94 $0.02726 $8.52
1 / 95 $8.47 $8.47 0.00%
2 / 95 $8.62 $8.62 0.00%
3 / 95 $9.27 $9.27 0.00%
4 / 95 $9.30 $9.30 0.00%
5 / 95 $9.37 $9.37 0.00%
6 / 95 $10.27 $10.27 0.00%
7 / 95 $11.24 $11.24 0.00%
8 / 95 $11.49 $11.49 0.00%
</TABLE>
<TABLE>
<CAPTION>
1-Year Year-to-Date Monthly
-------------------------------------------------------------------------------------------------
Month Dividend # Shares Shares Dividend # Shares Shares Dividend # Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9 / 29 / 94 117.647
9 / 94 $0.00 0.000 117.647
10 / 94 $0.00 0.000 117.647
11 / 94 $0.00 0.000 117.647
12 / 94 $3.21 0.376 118.023 115.340
1 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
2 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
3 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
4 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
5 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
6 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340
7 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340 88.968
8 / 95 $0.00 0.000 118.023 $0.00 0.000 115.340 $0.00 0.000 88.968
</TABLE>
<PAGE> 2
JOHN HANCOCK GLOBAL RETAIL FUND (CLASS A) - SEC TOTAL RETURN
<TABLE>
<S> <C> <C> <C> <C>
Initial Investment: $1,000.00
---------------------------------------------------- ---------------------------------------------
Average Annual Total Return Investment Value at End of Period
10 Year Return: N/A 10 Year Value: $0.00
5 Year Return: N/A 5 Year Value: $0.00
----------
3 Year Return: N/A 3 Year Value: $0.00 Cumm.
Return YTD
0.92 Year Return: 31.65% 1 Year Value: $1,287.90 28.79%
----------
Year to Date Return: 25.85% Year to Date Value: $1,258.49
Monthly Return: -2.87% Monthly Value: $971.26
- ----------------------------------------------------- ---------------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year
-------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/29/94 $8.50 $8.95 5.00%
9 / 94 $8.53 $8.98 5.00%
10 / 94 $8.76 $9.22 5.00%
11 / 94 $8.57 $9.02 5.00%
12 / 94 $8.67 $9.13 5.00% 12/23/94 $0.02726 $8.52
1 / 95 $8.47 $8.92 5.00%
2 / 95 $8.62 $9.07 5.00%
3 / 95 $9.27 $9.76 5.00%
4 / 95 $9.30 $9.79 5.00%
5 / 95 $9.37 $9.86 5.00%
6 / 95 $10.27 $10.81 5.00%
7 / 95 $11.24 $11.83 5.00%
8 / 95 $11.49 $12.09 5.00%
</TABLE>
<TABLE>
<CAPTION>
1-Year Year-to-Date Monthly
------------------------------------------------------------------------------------------------------
Month Dividend # Shares Shares Dividend # Shares Shares Dividend # Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/29/94 111.732
9 / 94 $0.00 0.000 111.732
10 / 94 $0.00 0.000 111.732
11 / 94 $0.00 0.000 111.732
12 / 94 $3.05 0.357 112.089 109.529
1 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
2 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
3 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
4 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
5 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
6 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529
7 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529 84.531
8 / 95 $0.00 0.000 112.089 $0.00 0.000 109.529 $0.00 0.000 84.531
</TABLE>
<PAGE> 3
JOHN HANCOCK GLOBAL RX - TOTAL RETURN CLASS A
Initial Investment: $1,000.00
<TABLE>
<S> <C>
- ------------------------------- -----------------------------------
Average Annual Total Return Investment Value at End of Period
10 Year Return: N/A 10 Year Value: N/A
3.91 Year Return: 21.78% 3.25 Year Value: $2,161.00
3 Year Return: 17.44% 3.00 Year Value: $1,619.95
1 Year Return: 30.89% 1 Year Value: $1,308.90
YTD Return: 23.70% YTD Value: $1,236.98
Monthly Return: 3.94% Monthly Return: $1,039.44
- ------------------------------- -----------------------------------
</TABLE>
* Since Inception
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
Payment/ 5-Year
----------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/1/91 $10.00 $10.00 0.00% 100.000
10 / 91 $10.79 $10.79 0.00% $0.0000 0.000 100.000
11 / 91 $10.83 $10.83 0.00% $0.0000 0.000 100.000
12 / 91 $13.40 $13.40 0.00% $0.0000 0.000 100.000
1 / 92 $14.86 $14.86 0.00% $0.0000 0.000 100.000
2 / 92 $14.38 $14.38 0.00% $0.0000 0.000 100.000
3 / 92 $13.77 $13.77 0.00% $0.0000 0.000 100.000
4 / 92 $12.87 $12.87 0.00% $0.0000 0.000 100.000
5 / 92 $13.01 $13.01 0.00% $0.0000 0.000 100.000
6 / 92 $12.60 $12.60 0.00% $0.0000 0.000 100.000
7 / 92 $13.63 $13.63 0.00% $0.0000 0.000 100.000
8 / 92 $13.34 $13.34 0.00% $0.0000 0.000 100.000
9 / 92 $13.09 $13.09 0.00% $0.0000 0.000 100.000
10 / 92 $13.89 $13.89 0.00% $0.0000 0.000 100.000
11 / 92 $15.19 $15.19 0.00% $0.0000 0.000 100.000
12 / 92 $15.86 $15.86 0.00% $0.0000 0.000 100.000
1 / 93 $15.41 $15.41 0.00% $0.0000 0.000 100.000
2 / 93 $12.54 $12.54 0.00% $0.0000 0.000 100.000
3 / 93 $12.87 $12.87 0.00% $0.0000 0.000 100.000
4 / 93 $12.85 $12.85 0.00% $0.0000 0.000 100.000
5 / 93 $13.58 $13.58 0.00% $0.0000 0.000 100.000
6 / 93 $13.72 $13.72 0.00% $0.0000 0.000 100.000
7 / 93 $13.47 $13.47 0.00% $0.0000 0.000 100.000
8 / 93 $13.38 $13.38 0.00% $0.0000 0.000 100.000
9 / 93 $14.22 $14.22 0.00% $0.0000 0.000 100.000
10 / 93 $14.94 $14.94 0.00% $0.0000 0.000 100.000
11 / 93 $14.65 $14.65 0.00% $0.0000 0.000 100.000
12 / 93 $16.05 $16.05 0.00% $0.0000 0.000 100.000
1 / 94 $17.34 $17.34 0.00% $0.0000 0.000 100.000
2 / 94 $17.31 $17.31 0.00% $0.0000 0.000 100.000
3 / 94 $15.78 $15.78 0.00% $0.0000 0.000 100.000
4 / 94 $15.89 $15.89 0.00% $0.0000 0.000 100.000
5 / 94 $15.81 $15.81 0.00% $0.0000 0.000 100.000
6 / 94 $14.72 $14.72 0.00% $0.0000 0.000 100.000
7 / 94 $15.12 $15.12 0.00% $0.0000 0.000 100.000
8 / 94 $16.51 $16.51 0.00% $0.0000 0.000 100.000
9 / 94 $16.81 $16.81 0.00% $0.0000 0.000 100.000
10 / 94 $17.03 $17.03 0.00% $0.0000 0.000 100.000
11 / 94 $16.69 $16.69 0.00% $0.0000 0.000 100.000
12 / 94 $17.47 $17.47 0.00% $0.0000 0.000 100.000
1 / 95 $17.84 $17.84 0.00% $0.0000 0.000 100.000
2 / 95 $18.57 $18.57 0.00% $0.0000 0.000 100.000
3 / 95 $19.65 $19.65 0.00% $0.0000 0.000 100.000
4 / 95 $18.92 $18.92 0.00% $0.0000 0.000 100.000
5 / 95 $18.80 $18.80 0.00% $0.0000 0.000 100.000
6 / 95 $19.02 $19.02 0.00% $0.0000 0.000 100.000
7 / 95 $20.79 $20.79 0.00% $0.0000 0.000 100.000
8 / 95 $21.61 $21.61 0.00% $0.0000 0.000 100.000
- ------------------------------------------------------------------------------------------------------------------
End of Period (update for formulas above):
21.610 100.000
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
3-Year 1-Year
------------------------------------------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
10/1/91
10 / 91
11 / 91
12 / 91
1 / 92
2 / 92
3 / 92
4 / 92
5 / 92
6 / 92
7 / 92
8 / 92 74.963
9 / 92 $0.0000 0.000 74.963
10 / 92 $0.0000 0.000 74.963
11 / 92 $0.0000 0.000 74.963
12 / 92 $0.0000 0.000 74.963
1 / 93 $0.0000 0.000 74.963
2 / 93 $0.0000 0.000 74.963
3 / 93 $0.0000 0.000 74.963
4 / 93 $0.0000 0.000 74.963
5 / 93 $0.0000 0.000 74.963
6 / 93 $0.0000 0.000 74.963
7 / 93 $0.0000 0.000 74.963
8 / 93 $0.0000 0.000 74.963
9 / 93 $0.0000 0.000 74.963
10 / 93 $0.0000 0.000 74.963
11 / 93 $0.0000 0.000 74.963
12 / 93 $0.0000 0.000 74.963
1 / 94 $0.0000 0.000 74.963
2 / 94 $0.0000 0.000 74.963
3 / 94 $0.0000 0.000 74.963
4 / 94 $0.0000 0.000 74.963
5 / 94 $0.0000 0.000 74.963
6 / 94 $0.0000 0.000 74.963
7 / 94 $0.0000 0.000 74.963
8 / 94 $0.0000 0.000 74.963 60.569
9 / 94 $0.0000 0.000 74.963 $0.0000 0.000 60.569
10 / 94 $0.0000 0.000 74.963 $0.0000 0.000 60.569
11 / 94 $0.0000 0.000 74.963 $0.0000 0.000 60.569
12 / 94 $0.0000 0.000 74.963 $0.0000 0.000 60.569
1 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
2 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
3 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
4 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
5 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
6 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
7 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
8 / 95 $0.0000 0.000 74.963 $0.0000 0.000 60.569
- ---------------------------------------------------------------------------------
74.963 60.569
- ---------------------------------------------------------------------------------
</TABLE>
<PAGE> 4
JOHN HANCOCK GLOBAL RX - TOTAL RETURN CLASS A
Initial Investment: $1,000.00
<TABLE>
<S> <C>
- ------------------------------- -----------------------------------
Average Annual Total Return Investment Value at End of Period
10 Year Return: N/A 10 Year Value: N/A
3.91 Year Return: 21.78% 3.25 Year Value: $2,161.00
3 Year Return: 17.44% 3.00 Year Value: $1,619.95
1 Year Return: 30.89% 1 Year Value: $1,308.90
YTD Return: 23.70% YTD Value: $1,236.98
Monthly Return: 3.94% Monthly Return: $1,039.44
- ------------------------------- -----------------------------------
</TABLE>
* Since Inception
Constant Sales Charge: 0.00%
<TABLE>
<CAPTION>
Payment/ YTD
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/1/91 $10.00 $10.00 0.00%
10 / 91 $10.79 $10.79 0.00%
11 / 91 $10.83 $10.83 0.00%
12 / 91 $13.40 $13.40 0.00%
1 / 92 $14.86 $14.86 0.00%
2 / 92 $14.38 $14.38 0.00%
3 / 92 $13.77 $13.77 0.00%
4 / 92 $12.87 $12.87 0.00%
5 / 92 $13.01 $13.01 0.00%
6 / 92 $12.60 $12.60 0.00%
7 / 92 $13.63 $13.63 0.00%
8 / 92 $13.34 $13.34 0.00%
9 / 92 $13.09 $13.09 0.00%
10 / 92 $13.89 $13.89 0.00%
11 / 92 $15.19 $15.19 0.00%
12 / 92 $15.86 $15.86 0.00%
1 / 93 $15.41 $15.41 0.00%
2 / 93 $12.54 $12.54 0.00%
3 / 93 $12.87 $12.87 0.00%
4 / 93 $12.85 $12.85 0.00%
5 / 93 $13.58 $13.58 0.00%
6 / 93 $13.72 $13.72 0.00%
7 / 93 $13.47 $13.47 0.00%
8 / 93 $13.38 $13.38 0.00%
9 / 93 $14.22 $14.22 0.00%
10 / 93 $14.94 $14.94 0.00%
11 / 93 $14.65 $14.65 0.00%
12 / 93 $16.05 $16.05 0.00%
1 / 94 $17.34 $17.34 0.00%
2 / 94 $17.31 $17.31 0.00%
3 / 94 $15.78 $15.78 0.00%
4 / 94 $15.89 $15.89 0.00%
5 / 94 $15.81 $15.81 0.00%
6 / 94 $14.72 $14.72 0.00%
7 / 94 $15.12 $15.12 0.00%
8 / 94 $16.51 $16.51 0.00%
9 / 94 $16.81 $16.81 0.00%
10 / 94 $17.03 $17.03 0.00%
11 / 94 $16.69 $16.69 0.00%
12 / 94 $17.47 $17.47 0.00% 57.241
1 / 95 $17.84 $17.84 0.00% $0.0000 0.000 57.241
2 / 95 $18.57 $18.57 0.00% $0.0000 0.000 57.241
3 / 95 $19.65 $19.65 0.00% $0.0000 0.000 57.241
4 / 95 $18.92 $18.92 0.00% $0.0000 0.000 57.241
5 / 95 $18.80 $18.80 0.00% $0.0000 0.000 57.241
6 / 95 $19.02 $19.02 0.00% $0.0000 0.000 57.241
7 / 95 $20.79 $20.79 0.00% $0.0000 0.000 57.241
8 / 95 $21.61 $21.61 0.00% $0.0000 0.000 57.241
- --------------------------------------------------------------------------------------------------------------------
End of Period (update for formulas above):
21.610 57.241
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Monthly
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------------------------------------------
<S> <C> <C> <C>
10/1/91
10 / 91
11 / 91
12 / 91
1 / 92
2 / 92
3 / 92
4 / 92
5 / 92
6 / 92
7 / 92
8 / 92
9 / 92
10 / 92
11 / 92
12 / 92
1 / 93
2 / 93
3 / 93
4 / 93
5 / 93
6 / 93
7 / 93
8 / 93
9 / 93
10 / 93
11 / 93
12 / 93
1 / 94
2 / 94
3 / 94
4 / 94
5 / 94
6 / 94
7 / 94
8 / 94
9 / 94
10 / 94
11 / 94
12 / 94
1 / 95
2 / 95
3 / 95
4 / 95
5 / 95
6 / 95
7 / 95 48.100
8 / 95 $0.0000 0.000 48.100
- ---------------------------------------------
48.100
- ---------------------------------------------
</TABLE>
<PAGE> 5
JOHN HANCOCK GLOBAL RX - TOTAL RETURN CLASS A
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ----------------------------------------- ------------------------------------
Average Annual Total Return Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: N/A 10 Year Value: N/A
3.91 Year Return: 20.19% 3.25 Year Value: $2,052.24
3 Year Return: 15.46% 3.00 Year Value: $1,539.17
1 Year Return: 24.34% 1 Year Value: $1,243.37
YTD Return: 17.51% YTD Value: $1,175.09
Monthly Return: -1.23% Monthly Return: $987.66
- ----------------------------------------- ------------------------------------
</TABLE>
* Since Inception
Constant Sales Charge: 6.00%
<TABLE>
<CAPTION>
Payment/ 5-Year
----------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/1/91 $10.00 $10.53 5.00% 94.967
10 / 91 $10.79 $11.36 5.00% $0.0000 0.000 94.967
11 / 91 $10.83 $11.40 5.00% $0.0000 0.000 94.967
12 / 91 $13.40 $14.11 5.00% $0.0000 0.000 94.967
1 / 92 $14.86 $15.64 5.00% $0.0000 0.000 94.967
2 / 92 $14.38 $15.14 5.00% $0.0000 0.000 94.967
3 / 92 $13.77 $14.49 5.00% $0.0000 0.000 94.967
4 / 92 $12.87 $13.55 5.00% $0.0000 0.000 94.967
5 / 92 $13.01 $13.69 5.00% $0.0000 0.000 94.967
6 / 92 $12.60 $13.26 5.00% $0.0000 0.000 94.967
7 / 92 $13.63 $14.35 5.00% $0.0000 0.000 94.967
8 / 92 $13.34 $14.04 5.00% $0.0000 0.000 94.967
9 / 92 $13.09 $13.78 5.00% $0.0000 0.000 94.967
10 / 92 $13.89 $14.62 5.00% $0.0000 0.000 94.967
11 / 92 $15.19 $15.99 5.00% $0.0000 0.000 94.967
12 / 92 $15.86 $16.69 5.00% $0.0000 0.000 94.967
1 / 93 $15.41 $16.22 5.00% $0.0000 0.000 94.967
2 / 93 $12.54 $13.20 5.00% $0.0000 0.000 94.967
3 / 93 $12.87 $13.55 5.00% $0.0000 0.000 94.967
4 / 93 $12.85 $13.53 5.00% $0.0000 0.000 94.967
5 / 93 $13.58 $14.29 5.00% $0.0000 0.000 94.967
6 / 93 $13.72 $14.44 5.00% $0.0000 0.000 94.967
7 / 93 $13.47 $14.18 5.00% $0.0000 0.000 94.967
8 / 93 $13.38 $14.08 5.00% $0.0000 0.000 94.967
9 / 93 $14.22 $14.97 5.00% $0.0000 0.000 94.967
10 / 93 $14.94 $15.73 5.00% $0.0000 0.000 94.967
11 / 93 $14.65 $15.42 5.00% $0.0000 0.000 94.967
12 / 93 $16.05 $16.89 5.00% $0.0000 0.000 94.967
1 / 94 $17.34 $18.25 5.00% $0.0000 0.000 94.967
2 / 94 $17.31 $18.22 5.00% $0.0000 0.000 94.967
3 / 94 $15.78 $16.61 5.00% $0.0000 0.000 94.967
4 / 94 $15.89 $16.73 5.00% $0.0000 0.000 94.967
5 / 94 $15.81 $16.64 5.00% $0.0000 0.000 94.967
6 / 94 $14.72 $15.49 5.00% $0.0000 0.000 94.967
7 / 94 $15.12 $15.92 5.00% $0.0000 0.000 94.967
8 / 94 $16.51 $17.38 5.00% $0.0000 0.000 94.967
9 / 94 $16.81 $17.69 5.00% $0.0000 0.000 94.967
10 / 94 $17.03 $17.93 5.00% $0.0000 0.000 94.967
11 / 94 $16.69 $17.57 5.00% $0.0000 0.000 94.967
12 / 94 $17.47 $18.39 5.00% $0.0000 0.000 94.967
1 / 95 $17.84 $18.78 5.00% $0.0000 0.000 94.967
2 / 95 $18.57 $19.55 5.00% $0.0000 0.000 94.967
3 / 95 $19.65 $20.68 5.00% $0.0000 0.000 94.967
4 / 95 $18.92 $19.92 5.00% $0.0000 0.000 94.967
5 / 95 $18.80 $19.79 5.00% $0.0000 0.000 94.967
6 / 95 $19.02 $20.02 5.00% $0.0000 0.000 94.967
7 / 95 $20.79 $21.88 5.00% $0.0000 0.000 94.967
8 / 95 $21.61 $22.75 5.00% $0.0000 0.000 94.967
- ----------------------------------------------------------------------------------------------------------------
End of Period (update for formulas above):
21.610 94.967
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
3-Year 1-Year
----------------------------------------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
10/1/91
10 / 91
11 / 91
12 / 91
1 / 92
2 / 92
3 / 92
4 / 92
5 / 92
6 / 92
7 / 92
8 / 92 71.225
9 / 92 $0.0000 0.000 71.225
10 / 92 $0.0000 0.000 71.225
11 / 92 $0.0000 0.000 71.225
12 / 92 $0.0000 0.000 71.225
1 / 93 $0.0000 0.000 71.225
2 / 93 $0.0000 0.000 71.225
3 / 93 $0.0000 0.000 71.225
4 / 93 $0.0000 0.000 71.225
5 / 93 $0.0000 0.000 71.225
6 / 93 $0.0000 0.000 71.225
7 / 93 $0.0000 0.000 71.225
8 / 93 $0.0000 0.000 71.225
9 / 93 $0.0000 0.000 71.225
10 / 93 $0.0000 0.000 71.225
11 / 93 $0.0000 0.000 71.225
12 / 93 $0.0000 0.000 71.225
1 / 94 $0.0000 0.000 71.225
2 / 94 $0.0000 0.000 71.225
3 / 94 $0.0000 0.000 71.225
4 / 94 $0.0000 0.000 71.225
5 / 94 $0.0000 0.000 71.225
6 / 94 $0.0000 0.000 71.225
7 / 94 $0.0000 0.000 71.225
8 / 94 $0.0000 0.000 71.225 57.537
9 / 94 $0.0000 0.000 71.225 $0.0000 0.000 57.537
10 / 94 $0.0000 0.000 71.225 $0.0000 0.000 57.537
11 / 94 $0.0000 0.000 71.225 $0.0000 0.000 57.537
12 / 94 $0.0000 0.000 71.225 $0.0000 0.000 57.537
1 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
2 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
3 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
4 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
5 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
6 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
7 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
8 / 95 $0.0000 0.000 71.225 $0.0000 0.000 57.537
- ---------------------------------------------------------------------------------
71.225 57.537
- ---------------------------------------------------------------------------------
</TABLE>
<PAGE> 6
JOHN HANCOCK GLOBAL RX - TOTAL RETURN CLASS A
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ----------------------------------------- ------------------------------------
Average Annual Total Return Investment Value at End of Period
<S> <C> <C> <C>
10 Year Return: N/A 10 Year Value: N/A
3.91 Year Return: 20.19% 3.25 Year Value: $2,052.24
3 Year Return: 15.46% 3.00 Year Value: $1,539.17
1 Year Return: 24.34% 1 Year Value: $1,243.37
YTD Return: 17.51% YTD Value: $1,175.09
Monthly Return: -1.23% Monthly Return: $987.66
- ----------------------------------------- ------------------------------------
</TABLE>
* Since Inception
Constant Sales Charge: 6.00%
<TABLE>
<CAPTION>
Payment/ YTD
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10/1/91 $10.00 $10.53 5.00%
10 / 91 $10.79 $11.36 5.00%
11 / 91 $10.83 $11.40 5.00%
12 / 91 $13.40 $14.11 5.00%
1 / 92 $14.86 $15.64 5.00%
2 / 92 $14.38 $15.14 5.00%
3 / 92 $13.77 $14.49 5.00%
4 / 92 $12.87 $13.55 5.00%
5 / 92 $13.01 $13.69 5.00%
6 / 92 $12.60 $13.26 5.00%
7 / 92 $13.63 $14.35 5.00%
8 / 92 $13.34 $14.04 5.00%
9 / 92 $13.09 $13.78 5.00%
10 / 92 $13.89 $14.62 5.00%
11 / 92 $15.19 $15.99 5.00%
12 / 92 $15.86 $16.69 5.00%
1 / 93 $15.41 $16.22 5.00%
2 / 93 $12.54 $13.20 5.00%
3 / 93 $12.87 $13.55 5.00%
4 / 93 $12.85 $13.53 5.00%
5 / 93 $13.58 $14.29 5.00%
6 / 93 $13.72 $14.44 5.00%
7 / 93 $13.47 $14.18 5.00%
8 / 93 $13.38 $14.08 5.00%
9 / 93 $14.22 $14.97 5.00%
10 / 93 $14.94 $15.73 5.00%
11 / 93 $14.65 $15.42 5.00%
12 / 93 $16.05 $16.89 5.00%
1 / 94 $17.34 $18.25 5.00%
2 / 94 $17.31 $18.22 5.00%
3 / 94 $15.78 $16.61 5.00%
4 / 94 $15.89 $16.73 5.00%
5 / 94 $15.81 $16.64 5.00%
6 / 94 $14.72 $15.49 5.00%
7 / 94 $15.12 $15.92 5.00%
8 / 94 $16.51 $17.38 5.00%
9 / 94 $16.81 $17.69 5.00%
10 / 94 $17.03 $17.93 5.00%
11 / 94 $16.69 $17.57 5.00%
12 / 94 $17.47 $18.39 5.00% 54.377
1 / 95 $17.84 $18.78 5.00% $0.0000 0.000 54.377
2 / 95 $18.57 $19.55 5.00% $0.0000 0.000 54.377
3 / 95 $19.65 $20.68 5.00% $0.0000 0.000 54.377
4 / 95 $18.92 $19.92 5.00% $0.0000 0.000 54.377
5 / 95 $18.80 $19.79 5.00% $0.0000 0.000 54.377
6 / 95 $19.02 $20.02 5.00% $0.0000 0.000 54.377
7 / 95 $20.79 $21.88 5.00% $0.0000 0.000 54.377
8 / 95 $21.61 $22.75 5.00% $0.0000 0.000 54.377
- ----------------------------------------------------------------------------------------------------------------
End of Period (update for formulas above):
21.610 54.377
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Monthly
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------------------------------------------
<S> <C> <C> <C>
10/1/91
10 / 91
11 / 91
12 / 91
1 / 92
2 / 92
3 / 92
4 / 92
5 / 92
6 / 92
7 / 92
8 / 92
9 / 92
10 / 92
11 / 92
12 / 92
1 / 93
2 / 93
3 / 93
4 / 93
5 / 93
6 / 93
7 / 93
8 / 93
9 / 93
10 / 93
11 / 93
12 / 93
1 / 94
2 / 94
3 / 94
4 / 94
5 / 94
6 / 94
7 / 94
8 / 94
9 / 94
10 / 94
11 / 94
12 / 94
1 / 95
2 / 95
3 / 95
4 / 95
5 / 95
6 / 95
7 / 95 45.704
8 / 95 $0.0000 0.000 45.704
- ---------------------------------------------
45.704
- ---------------------------------------------
</TABLE>
<PAGE> 7
JOHN HANCOCK GLOBAL RX TOTAL RETURN - CLASS B
Initial Investment: $1,000.00
<TABLE>
<CAPTION>
- ----------------------------------------------- ----------------------------------------------
Average Annual Total Return Investment Value at End of Period
CDSC
Excluding With Excluding % CDSC Ending
CDSC CDSC CDSC CDSC Amount Value
<S> <C> <C> <C> <C> <C> <C>
10 Year Return: N/A N/A N/A 0.00% N/A
5 Year Return: N/A N/A N/A 2.00% N/A
1.49 Year Return: 36.93% 30.37% $1,234.82 4.00% $40.00 $1,194.82
1.00 Year Return: 29.71% 24.71% $1,297.08 5.00% $50.00 $1,247.08
YTD Return: 22.91% 17.91% $1,229.14 5.00% $50.00 $1,179.14
Monthly Return: 3.84% -1.16% $1,038.42 5.00% $50.00 $988.42
- ----------------------------------------------- ----------------------------------------------
</TABLE>
Constant Sales Charge: N/A
<TABLE>
<CAPTION>
3-Year
----------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/07/94 $17.29 $17.29 N/A 57.837
3 / 94 $15.78 $15.78 N/A $0.0000 0.000 57.837
4 / 94 $15.88 $15.88 N/A $0.0000 0.000 57.837
5 / 94 $15.78 $15.78 N/A $0.0000 0.000 57.837
6 / 94 $14.69 $14.69 N/A $0.0000 0.000 57.837
7 / 94 $15.08 $15.08 N/A $0.0000 0.000 57.837
8 / 94 $16.46 $16.46 N/A $0.0000 0.000 57.837
9 / 94 $16.74 $16.74 N/A $0.0000 0.000 57.837
10 / 94 $16.95 $16.95 N/A $0.0000 0.000 57.837
11 / 94 $16.60 $16.60 N/A $0.0000 0.000 57.837
12 / 94 $17.37 $17.37 N/A $0.0000 0.000 57.837
1 / 95 $17.73 $17.73 N/A $0.0000 0.000 57.837
2 / 95 $18.44 $18.44 N/A $0.0000 0.000 57.837
3 / 95 $19.49 $19.49 N/A $0.0000 0.000 57.837
4 / 95 $18.75 $18.75 N/A $0.0000 0.000 57.837
5 / 95 $18.62 $18.62 N/A $0.0000 0.000 57.837
6 / 95 $18.82 $18.82 N/A $0.0000 0.000 57.837
7 / 95 $20.56 $20.56 N/A $0.0000 0.000 57.837
8 / 95 $21.35 $21.35 N/A $0.0000 0.000 57.837
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
1-Year YTD Monthly
----------------------------------------------------------------------------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3/07/94
3 / 94
4 / 94
5 / 94
6 / 94
7 / 94
8 / 94 60.753
9 / 94 $0.0000 0.000 60.753
10 / 94 $0.0000 0.000 60.753
11 / 94 $0.0000 0.000 60.753
12 / 94 $0.0000 0.000 60.753 57.571
1 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
2 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
3 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
4 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
5 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
6 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571
7 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571 48.638
8 / 95 $0.0000 0.000 60.753 $0.0000 0.000 57.571 $0.0000 0.000 48.638
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 8
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.00 0.00%
09/87 $10.00 $10.00 0.00%
10/87 $8.98 $8.98 0.00%
11/87 $8.94 $8.94 0.00%
12/87 $9.05 $9.05 0.00% 12/30/87 $0.0275 $9.15
01/88 $9.37 $9.37 0.00%
02/88 $9.96 $9.96 0.00%
03/88 $10.66 $10.66 0.00%
04/88 $11.03 $11.03 0.00%
05/88 $10.73 $10.73 0.00%
06/88 $10.35 $10.35 0.00%
07/88 $10.52 $10.52 0.00%
08/88 $9.61 $9.61 0.00%
09/88 $9.87 $9.87 0.00%
10/88 $10.68 $10.68 0.00%
11/88 $11.20 $11.20 0.00%
12/88 $10.90 $10.90 0.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain
01/89 $11.04 $11.04 0.00%
02/89 $11.16 $11.16 0.00%
03/89 $10.99 $10.99 0.00%
04/89 $11.30 $11.30 0.00%
05/89 $10.70 $10.70 0.00%
06/89 $10.13 $10.13 0.00%
07/89 $10.95 $10.95 0.00%
08/89 $11.10 $11.10 0.00%
09/89 $11.88 $11.88 0.00%
10/89 $11.81 $11.81 0.00%
11/89 $12.44 $12.44 0.00%
12/89 $12.14 $12.14 0.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain
01/90 $11.85 $11.85 0.00%
02/90 $11.31 $11.31 0.00%
03/90 $10.92 $10.92 0.00%
04/90 $10.58 $10.58 0.00%
05/90 $11.34 $11.34 0.00%
06/90 $11.59 $11.59 0.00%
07/90 $12.33 $12.33 0.00%
08/90 $10.34 $10.34 0.00%
09/90 $8.88 $8.88 0.00%
10/90 $9.77 $9.77 0.00%
11/90 $9.31 $9.31 0.00%
12/90 $8.36 $8.36 0.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain
01/91 $8.43 $8.43 0.00%
02/91 $9.22 $9.22 0.00%
03/91 $9.35 $9.35 0.00%
</TABLE>
<TABLE>
<CAPTION>
10-Year 5-Year
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
9/8/87 100.000
09/87 $0.0000 0.000 100.000
10/87 $0.0000 0.000 100.000
11/87 $0.0000 0.000 100.000
12/87 $2.7500 0.301 100.301
01/88 $0.0000 0.000 100.301
02/88 $0.0000 0.000 100.301
03/88 $0.0000 0.000 100.301
04/88 $0.0000 0.000 100.301
05/88 $0.0000 0.000 100.301
06/88 $0.0000 0.000 100.301
07/88 $0.0000 0.000 100.301
08/88 $0.0000 0.000 100.301
09/88 $0.0000 0.000 100.301
10/88 $0.0000 0.000 100.301
11/88 $0.0000 0.000 100.301
12/88 $24.3230 2.217 102.518
01/89 $0.0000 0.000 102.518
02/89 $0.0000 0.000 102.518
03/89 $0.0000 0.000 102.518
04/89 $0.0000 0.000 102.518
05/89 $0.0000 0.000 102.518
06/89 $0.0000 0.000 102.518
07/89 $0.0000 0.000 102.518
08/89 $0.0000 0.000 102.518
09/89 $0.0000 0.000 102.518
10/89 $0.0000 0.000 102.518
11/89 $0.0000 0.000 102.518
12/89 $84.5774 7.054 109.572
01/90 $0.0000 0.000 109.572
02/90 $0.0000 0.000 109.572
03/90 $0.0000 0.000 109.572
04/90 $0.0000 0.000 109.572
05/90 $0.0000 0.000 109.572
06/90 $0.0000 0.000 109.572
07/90 $0.0000 0.000 109.572
08/90 $0.0000 0.000 109.572 96.712
09/90 $0.0000 0.000 109.572 $0.0000 0.000 96.712
10/90 $0.0000 0.000 109.572 $0.0000 0.000 96.712
11/90 $0.0000 0.000 109.572 $0.0000 0.000 96.712
12/90 $104.3673 2.933 122.505 $92.1182 11.415 108.127
01/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
02/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
03/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
</TABLE>
<PAGE> 9
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $9.80 0.00%
05/91 $9.80 $9.80 0.00%
06/91 $9.36 $9.36 0.00%
07/91 $9.42 $9.42 0.00%
08/91 $9.05 $9.05 0.00%
09/91 $9.27 $9.27 0.00%
10/91 $9.36 $9.36 0.00%
11/91 $9.09 $9.09 0.00%
12/91 $9.42 $9.42 0.00%
01/92 $9.41 $9.41 0.00%
02/92 $9.28 $9.28 0.00%
03/92 $8.91 $8.91 0.00%
04/92 $8.96 $8.96 0.00%
05/92 $9.47 $9.47 0.00%
06/92 $9.27 $9.27 0.00%
07/92 $8.83 $8.83 0.00%
08/92 $8.87 $8.87 0.00%
09/92 $9.03 $9.03 0.00%
10/92 $9.33 $9.33 0.00%
11/92 $9.49 $9.49 0.00%
12/92 $9.61 $9.61 0.00%
01/93 $9.94 $9.94 0.00%
02/93 $10.52 $10.52 0.00%
03/93 $10.91 $10.91 0.00%
04/93 $11.82 $11.82 0.00%
05/93 $12.54 $12.54 0.00%
06/93 $12.13 $12.13 0.00%
07/93 $12.49 $12.49 0.00%
08/93 $13.27 $13.27 0.00%
09/93 $13.22 $13.22 0.00%
10/93 $14.52 $14.52 0.00%
11/93 $14.13 $14.13 0.00%
12/93 $15.96 $15.96 0.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain
01/94 $15.92 $15.92 0.00%
02/94 $15.55 $15.55 0.00%
03/94 $14.49 $14.49 0.00%
04/94 $14.84 $14.84 0.00%
05/94 $15.35 $15.35 0.00%
06/94 $14.93 $14.93 0.00%
07/94 $15.14 $15.14 0.00%
08/94 $15.88 $15.88 0.00%
09/94 $15.49 $15.49 0.00%
10/94 $15.85 $15.85 0.00%
11/94 $14.56 $14.56 0.00%
12/94 $13.93 $13.93 0.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain
</TABLE>
<TABLE>
<CAPTION>
10-Year 5-Year
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
04/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
05/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
06/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
07/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
08/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
09/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
10/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
11/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
12/91 $0.0000 0.000 122.505 $0.0000 0.000 108.127
01/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
02/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
03/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
04/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
05/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
06/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
07/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
08/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
09/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
10/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
11/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
12/92 $0.0000 0.000 122.505 $0.0000 0.000 108.127
01/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
02/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
03/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
04/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
05/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
06/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
07/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
08/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
09/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
10/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
11/93 $0.0000 0.000 122.505 $0.0000 0.000 108.127
12/93 $49.6096 3.228 125.733 $43.7871 2.849 110.976
01/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
02/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
03/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
04/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
05/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
06/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
07/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
08/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
09/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
10/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
11/94 $0.0000 0.000 125.733 $0.0000 0.000 110.976
12/94 $68.9243 4.951 130.684 $60.8348 4.370 115.346
</TABLE>
<PAGE> 10
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $12.58 0.00%
2/95 $13.12 $13.12 0.00%
3/95 $13.49 $13.49 0.00%
4/95 $13.85 $13.85 0.00%
5/95 $14.22 $14.22 0.00%
6/95 $13.83 $13.83 0.00%
7/95 $14.63 $14.63 0.00%
8/95 $14.11 $14.11 0.00%
</TABLE>
<TABLE>
<CAPTION>
10-Year 5-Year
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------
<C> <C> <C> <C> <C> <C> <C>
1/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
2/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
3/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
4/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
5/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
6/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
7/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
8/95 $0.0000 0.000 130.684 $0.0000 0.000 115.346
</TABLE>
<PAGE> 11
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.00 0.00%
09/87 $10.00 $10.00 0.00%
10/87 $8.98 $8.98 0.00%
11/87 $8.94 $8.94 0.00%
12/87 $9.05 $9.05 0.00% 12/30/87 $0.0275 $9.15
01/88 $9.37 $9.37 0.00%
02/88 $9.96 $9.96 0.00%
03/88 $10.66 $10.66 0.00%
04/88 $11.03 $11.03 0.00%
05/88 $10.73 $10.73 0.00%
06/88 $10.35 $10.35 0.00%
07/88 $10.52 $10.52 0.00%
08/88 $9.61 $9.61 0.00%
09/88 $9.87 $9.87 0.00%
10/88 $10.68 $10.68 0.00%
11/88 $11.20 $11.20 0.00%
12/88 $10.90 $10.90 0.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain
01/89 $11.04 $11.04 0.00%
02/89 $11.16 $11.16 0.00%
03/89 $10.99 $10.99 0.00%
04/89 $11.30 $11.30 0.00%
05/89 $10.70 $10.70 0.00%
06/89 $10.13 $10.13 0.00%
07/89 $10.95 $10.95 0.00%
08/89 $11.10 $11.10 0.00%
09/89 $11.88 $11.88 0.00%
10/89 $11.81 $11.81 0.00%
11/89 $12.44 $12.44 0.00%
12/89 $12.14 $12.14 0.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain
01/90 $11.85 $11.85 0.00%
02/90 $11.31 $11.31 0.00%
03/90 $10.92 $10.92 0.00%
04/90 $10.58 $10.58 0.00%
05/90 $11.34 $11.34 0.00%
06/90 $11.59 $11.59 0.00%
07/90 $12.33 $12.33 0.00%
08/90 $10.34 $10.34 0.00%
09/90 $8.88 $8.88 0.00%
10/90 $9.77 $9.77 0.00%
11/90 $9.31 $9.31 0.00%
12/90 $8.36 $8.36 0.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain
01/91 $8.43 $8.43 0.00%
02/91 $9.22 $9.22 0.00%
03/91 $9.35 $9.35 0.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year 1-Year
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
9/8/87
09/87
10/87
11/87
12/87
01/88
02/88
03/88
04/88
05/88
06/88
07/88
08/88
09/88
10/88
11/88
12/88
01/89
02/89
03/89
04/89
05/89
06/89
07/89
08/89
09/89
10/89
11/89
12/89
01/90
02/90
03/90
04/90
05/90
06/90
07/90
08/90
09/90
10/90
11/90
12/90
01/91
02/91
03/91
</TABLE>
<PAGE> 12
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $9.80 0.00%
05/91 $9.80 $9.80 0.00%
06/91 $9.36 $9.36 0.00%
07/91 $9.42 $9.42 0.00%
08/91 $9.05 $9.05 0.00%
09/91 $9.27 $9.27 0.00%
10/91 $9.36 $9.36 0.00%
11/91 $9.09 $9.09 0.00%
12/91 $9.42 $9.42 0.00%
01/92 $9.41 $9.41 0.00%
02/92 $9.28 $9.28 0.00%
03/92 $8.91 $8.91 0.00%
04/92 $8.96 $8.96 0.00%
05/92 $9.47 $9.47 0.00%
06/92 $9.27 $9.27 0.00%
07/92 $8.83 $8.83 0.00%
08/92 $8.87 $8.87 0.00%
09/92 $9.03 $9.03 0.00%
10/92 $9.33 $9.33 0.00%
11/92 $9.49 $9.49 0.00%
12/92 $9.61 $9.61 0.00%
01/93 $9.94 $9.94 0.00%
02/93 $10.52 $10.52 0.00%
03/93 $10.91 $10.91 0.00%
04/93 $11.82 $11.82 0.00%
05/93 $12.54 $12.54 0.00%
06/93 $12.13 $12.13 0.00%
07/93 $12.49 $12.49 0.00%
08/93 $13.27 $13.27 0.00%
09/93 $13.22 $13.22 0.00%
10/93 $14.52 $14.52 0.00%
11/93 $14.13 $14.13 0.00%
12/93 $15.96 $15.96 0.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain
01/94 $15.92 $15.92 0.00%
02/94 $15.55 $15.55 0.00%
03/94 $14.49 $14.49 0.00%
04/94 $14.84 $14.84 0.00%
05/94 $15.35 $15.35 0.00%
06/94 $14.93 $14.93 0.00%
07/94 $15.14 $15.14 0.00%
08/94 $15.88 $15.88 0.00%
09/94 $15.49 $15.49 0.00%
10/94 $15.85 $15.85 0.00%
11/94 $14.56 $14.56 0.00%
12/94 $13.93 $13.93 0.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain
</TABLE>
<TABLE>
<CAPTION>
3-Year 1-Year
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
04/91
05/91
06/91
07/91
08/91
09/91
10/91
11/91
12/91
01/92
02/92
03/92
04/92
05/92
06/92
07/92
08/92 112.740
09/92 $0.00 0.000 112.740
10/92 $0.00 0.000 112.740
11/92 $0.00 0.000 112.740
12/92 $0.00 0.000 112.740
01/93 $0.00 0.000 112.740
02/93 $0.00 0.000 112.740
03/93 $0.00 0.000 112.740
04/93 $0.00 0.000 112.740
05/93 $0.00 0.000 112.740
06/93 $0.00 0.000 112.740
07/93 $0.00 0.000 112.740
08/93 $0.00 0.000 112.740
09/93 $0.00 0.000 112.740
10/93 $0.00 0.000 112.740
11/93 $0.00 0.000 112.740
12/93 $45.66 2.970 115.710
01/94 $0.00 0.000 115.710
02/94 $0.00 0.000 115.710
03/94 $0.00 0.000 115.710
04/94 $0.00 0.000 115.710
05/94 $0.00 0.000 115.710
06/94 $0.00 0.000 115.710
07/94 $0.00 0.000 115.710
08/94 $0.00 0.000 115.710 62.972
09/94 $0.00 0.000 115.710 $0.0000 0.000 62.972
10/94 $0.00 0.000 115.710 $0.0000 0.000 62.972
11/94 $0.00 0.000 115.710 $0.0000 0.000 62.972
12/94 $63.43 4.557 120.267 $34.5200 2.480 65.452
</TABLE>
<PAGE> 13
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $12.58 0.00%
2/95 $13.12 $13.12 0.00%
3/95 $13.49 $13.49 0.00%
4/95 $13.85 $13.85 0.00%
5/95 $14.22 $14.22 0.00%
6/95 $13.83 $13.83 0.00%
7/95 $14.63 $14.63 0.00%
8/95 $14.11 $14.11 0.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year 1-Year
------------------------------------ -------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
2/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
3/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
4/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
5/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
6/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
7/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
8/95 $0.00 0.000 120.267 $0.0000 0.000 65.452
</TABLE>
<PAGE> 14
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.00 0.00%
09/87 $10.00 $10.00 0.00%
10/87 $8.98 $8.98 0.00%
11/87 $8.94 $8.94 0.00%
12/87 $9.05 $9.05 0.00% 12/30/87 $0.0275 $9.15
01/88 $9.37 $9.37 0.00%
02/88 $9.96 $9.96 0.00%
03/88 $10.66 $10.66 0.00%
04/88 $11.03 $11.03 0.00%
05/88 $10.73 $10.73 0.00%
06/88 $10.35 $10.35 0.00%
07/88 $10.52 $10.52 0.00%
08/88 $9.61 $9.61 0.00%
09/88 $9.87 $9.87 0.00%
10/88 $10.68 $10.68 0.00%
11/88 $11.20 $11.20 0.00%
12/88 $10.90 $10.90 0.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain
01/89 $11.04 $11.04 0.00%
02/89 $11.16 $11.16 0.00%
03/89 $10.99 $10.99 0.00%
04/89 $11.30 $11.30 0.00%
05/89 $10.70 $10.70 0.00%
06/89 $10.13 $10.13 0.00%
07/89 $10.95 $10.95 0.00%
08/89 $11.10 $11.10 0.00%
09/89 $11.88 $11.88 0.00%
10/89 $11.81 $11.81 0.00%
11/89 $12.44 $12.44 0.00%
12/89 $12.14 $12.14 0.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain
01/90 $11.85 $11.85 0.00%
02/90 $11.31 $11.31 0.00%
03/90 $10.92 $10.92 0.00%
04/90 $10.58 $10.58 0.00%
05/90 $11.34 $11.34 0.00%
06/90 $11.59 $11.59 0.00%
07/90 $12.33 $12.33 0.00%
08/90 $10.34 $10.34 0.00%
09/90 $8.88 $8.88 0.00%
10/90 $9.77 $9.77 0.00%
11/90 $9.31 $9.31 0.00%
12/90 $8.36 $8.36 0.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain
01/91 $8.43 $8.43 0.00%
02/91 $9.22 $9.22 0.00%
03/91 $9.35 $9.35 0.00%
</TABLE>
<TABLE>
<CAPTION>
YTD Monthly
------------------------------------ -------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
9/8/87
09/87
10/87
11/87
12/87
01/88
02/88
03/88
04/88
05/88
06/88
07/88
08/88
09/88
10/88
11/88
12/88
01/89
02/89
03/89
04/89
05/89
06/89
07/89
08/89
09/89
10/89
11/89
12/89
01/90
02/90
03/90
04/90
05/90
06/90
07/90
08/90
09/90
10/90
11/90
12/90
01/91
02/91
03/91
</TABLE>
<PAGE> 15
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $9.80 0.00%
05/91 $9.80 $9.80 0.00%
06/91 $9.36 $9.36 0.00%
07/91 $9.42 $9.42 0.00%
08/91 $9.05 $9.05 0.00%
09/91 $9.27 $9.27 0.00%
10/91 $9.36 $9.36 0.00%
11/91 $9.09 $9.09 0.00%
12/91 $9.42 $9.42 0.00%
01/92 $9.41 $9.41 0.00%
02/92 $9.28 $9.28 0.00%
03/92 $8.91 $8.91 0.00%
04/92 $8.96 $8.96 0.00%
05/92 $9.47 $9.47 0.00%
06/92 $9.27 $9.27 0.00%
07/92 $8.83 $8.83 0.00%
08/92 $8.87 $8.87 0.00%
09/92 $9.03 $9.03 0.00%
10/92 $9.33 $9.33 0.00%
11/92 $9.49 $9.49 0.00%
12/92 $9.61 $9.61 0.00%
01/93 $9.94 $9.94 0.00%
02/93 $10.52 $10.52 0.00%
03/93 $10.91 $10.91 0.00%
04/93 $11.82 $11.82 0.00%
05/93 $12.54 $12.54 0.00%
06/93 $12.13 $12.13 0.00%
07/93 $12.49 $12.49 0.00%
08/93 $13.27 $13.27 0.00%
09/93 $13.22 $13.22 0.00%
10/93 $14.52 $14.52 0.00%
11/93 $14.13 $14.13 0.00%
12/93 $15.96 $15.96 0.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain
01/94 $15.92 $15.92 0.00%
02/94 $15.55 $15.55 0.00%
03/94 $14.49 $14.49 0.00%
04/94 $14.84 $14.84 0.00%
05/94 $15.35 $15.35 0.00%
06/94 $14.93 $14.93 0.00%
07/94 $15.14 $15.14 0.00%
08/94 $15.88 $15.88 0.00%
09/94 $15.49 $15.49 0.00%
10/94 $15.85 $15.85 0.00%
11/94 $14.56 $14.56 0.00%
12/94 $13.93 $13.93 0.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain
</TABLE>
<TABLE>
<CAPTION>
YTD Monthly
------------------------------------ -------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
04/91
05/91
06/91
07/91
08/91
09/91
10/91
11/91
12/91
01/92
02/92
03/92
04/92
05/92
06/92
07/92
08/92
09/92
10/92
11/92
12/92
01/93
02/93
03/93
04/93
05/93
06/93
07/93
08/93
09/93
10/93
11/93
12/93
01/94
02/94
03/94
04/94
05/94
06/94
07/94
08/94
09/94
10/94
11/94
12/94 71.788
</TABLE>
<PAGE> 16
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- --------------------------------------- ----------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.97% 10 Year Value: $1,843.95
5 Year Return: 10.23% 5 Year Value: $1,627.53
3 Year Return: 19.28% 3 Year Value: $1,696.97
1 Year Return: (7.65)% 1 Year Value: $923.53
YTD Return: 1.29% YTD Value: $1,012.92
Monthly (3.55)% Monthly $964.46
- -------------------------------------- ---------------------------------
Constant Sales Charge: 0.00%
</TABLE>
<TABLE>
<CAPTION>
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains
Ended NAV Price Charge Date Amount Price Information
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $12.58 0.00%
2/95 $13.12 $13.12 0.00%
3/95 $13.49 $13.49 0.00%
4/95 $13.85 $13.85 0.00%
5/95 $14.22 $14.22 0.00%
6/95 $13.83 $13.83 0.00%
7/95 $14.63 $14.63 0.00%
8/95 $14.11 $14.11 0.00%
</TABLE>
<TABLE>
<CAPTION>
YTD Monthly
------------------------------------ -------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1/95 $0.0000 0.000 71.788
2/95 $0.0000 0.000 71.788
3/95 $0.0000 0.000 71.788
4/95 $0.0000 0.000 71.788
5/95 $0.0000 0.000 71.788
6/95 $0.0000 0.000 71.788
7/95 $0.0000 0.000 71.788 68.353
8/95 $0.0000 0.000 71.788 $0.0000 0.000 68.353
</TABLE>
<PAGE> 17
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
10-Year
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.53 5.00% 94.967
09/87 $10.00 $10.53 5.00% $0.0000 0.000 94.967
10/87 $8.98 $9.45 5.00% $0.0000 0.000 94.967
11/87 $8.94 $9.41 5.00% $0.0000 0.000 94.967
12/87 $9.05 $9.53 5.00% 12/30/87 $0.0275 $9.15 $2.6116 0.285 95.252
01/88 $9.37 $9.86 5.00% $0.0000 0.000 95.252
02/88 $9.96 $10.48 5.00% $0.0000 0.000 95.252
03/88 $10.66 $11.22 5.00% $0.0000 0.000 95.252
04/88 $11.03 $11.61 5.00% $0.0000 0.000 95.252
05/88 $10.73 $11.29 5.00% $0.0000 0.000 95.252
06/88 $10.35 $10.89 5.00% $0.0000 0.000 95.252
07/88 $10.52 $11.07 5.00% $0.0000 0.000 95.252
08/88 $9.61 $10.12 5.00% $0.0000 0.000 95.252
09/88 $9.87 $10.39 5.00% $0.0000 0.000 95.252
10/88 $10.68 $11.24 5.00% $0.0000 0.000 95.252
11/88 $11.20 $11.79 5.00% $0.0000 0.000 95.252
12/88 $10.90 $11.47 5.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain $23.0986 2.106 97.358
01/89 $11.04 $11.62 5.00% $0.0000 0.000 97.358
02/89 $11.16 $11.75 5.00% $0.0000 0.000 97.358
03/89 $10.99 $11.57 5.00% $0.0000 0.000 97.358
04/89 $11.30 $11.89 5.00% $0.0000 0.000 97.358
05/89 $10.70 $11.26 5.00% $0.0000 0.000 97.358
06/89 $10.13 $10.66 5.00% $0.0000 0.000 97.358
07/89 $10.95 $11.53 5.00% $0.0000 0.000 97.358
08/89 $11.10 $11.68 5.00% $0.0000 0.000 97.358
09/89 $11.88 $12.51 5.00% $0.0000 0.000 97.358
10/89 $11.81 $12.43 5.00% $0.0000 0.000 97.358
11/89 $12.44 $13.09 5.00% $0.0000 0.000 97.358
12/89 $12.14 $12.78 5.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain $80.3204 6.699 104.057
01/90 $11.85 $12.47 5.00% $0.0000 0.000 104.057
02/90 $11.31 $11.91 5.00% $0.0000 0.000 104.057
03/90 $10.92 $11.49 5.00% $0.0000 0.000 104.057
04/90 $10.58 $11.14 5.00% $0.0000 0.000 104.057
05/90 $11.34 $11.94 5.00% $0.0000 0.000 104.057
06/90 $11.59 $12.20 5.00% $0.0000 0.000 104.057
07/90 $12.33 $12.98 5.00% $0.0000 0.000 104.057
08/90 $10.34 $10.88 5.00% $0.0000 0.000 104.057
09/90 $8.88 $9.35 5.00% $0.0000 0.000 104.057
10/90 $9.77 $10.28 5.00% $0.0000 0.000 104.057
11/90 $9.31 $9.80 5.00% $0.0000 0.000 104.057
12/90 $8.36 $8.80 5.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain $99.1143 12.282 116.339
01/91 $8.43 $8.87 5.00% $0.0000 0.000 116.339
02/91 $9.22 $9.71 5.00% $0.0000 0.000 116.339
03/91 $9.35 $9.84 5.00% $0.0000 0.000 116.339
<CAPTION>
5-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------------
<S> <C> <C> <C>
9/8/87
09/87
10/87
11/87
12/87
01/88
02/88
03/88
04/88
05/88
06/88
07/88
08/88
09/88
10/88
11/88
12/88
01/89
02/89
03/89
04/89
05/89
06/89
07/89
08/89
09/89
10/89
11/89
12/89
01/90
02/90
03/90
04/90
05/90
06/90
07/90
08/90 91.912
09/90 $0.0000 0.000 91.912
10/90 $0.0000 0.000 91.912
11/90 $0.0000 0.000 91.912
12/90 $87.5462 10.848 102.760
01/91 $0.0000 0.000 102.760
02/91 $0.0000 0.000 102.760
03/91 $0.0000 0.000 102.760
</TABLE>
<PAGE> 18
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
10-Year
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $10.32 5.00% $0.0000 0.000 116.339
05/91 $9.80 $10.32 5.00% $0.0000 0.000 116.339
06/91 $9.36 $9.85 5.00% $0.0000 0.000 116.339
07/91 $9.42 $9.92 5.00% $0.0000 0.000 116.339
08/91 $9.05 $9.53 5.00% $0.0000 0.000 116.339
09/91 $9.27 $9.76 5.00% $0.0000 0.000 116.339
10/91 $9.36 $9.85 5.00% $0.0000 0.000 116.339
11/91 $9.09 $9.57 5.00% $0.0000 0.000 116.339
12/91 $9.42 $9.92 5.00% $0.0000 0.000 116.339
01/92 $9.41 $9.91 5.00% $0.0000 0.000 116.339
02/92 $9.28 $9.77 5.00% $0.0000 0.000 116.339
03/92 $8.91 $9.38 5.00% $0.0000 0.000 116.339
04/92 $8.96 $9.43 5.00% $0.0000 0.000 116.339
05/92 $9.47 $9.97 5.00% $0.0000 0.000 116.339
06/92 $9.27 $9.76 5.00% $0.0000 0.000 116.339
07/92 $8.83 $9.29 5.00% $0.0000 0.000 116.339
08/92 $8.87 $9.34 5.00% $0.0000 0.000 116.339
09/92 $9.03 $9.51 5.00% $0.0000 0.000 116.339
10/92 $9.33 $9.82 5.00% $0.0000 0.000 116.339
11/92 $9.49 $9.99 5.00% $0.0000 0.000 116.339
12/92 $9.61 $10.12 5.00% $0.0000 0.000 116.339
01/93 $9.94 $10.46 5.00% $0.0000 0.000 116.339
02/93 $10.52 $11.07 5.00% $0.0000 0.000 116.339
03/93 $10.91 $11.48 5.00% $0.0000 0.000 116.339
04/93 $11.82 $12.44 5.00% $0.0000 0.000 116.339
05/93 $12.54 $13.20 5.00% $0.0000 0.000 116.339
06/93 $12.13 $12.77 5.00% $0.0000 0.000 116.339
07/93 $12.49 $13.15 5.00% $0.0000 0.000 116.339
08/93 $13.27 $13.97 5.00% $0.0000 0.000 116.339
09/93 $13.22 $13.92 5.00% $0.0000 0.000 116.339
10/93 $14.52 $15.28 5.00% $0.0000 0.000 116.339
11/93 $14.13 $14.87 5.00% $0.0000 0.000 116.339
12/93 $15.96 $16.80 5.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain $47.1126 3.065 119.404
01/94 $15.92 $16.76 5.00% $0.0000 0.000 119.404
02/94 $15.55 $16.37 5.00% $0.0000 0.000 119.404
03/94 $14.49 $15.25 5.00% $0.0000 0.000 119.404
04/94 $14.84 $15.62 5.00% $0.0000 0.000 119.404
05/94 $15.35 $16.16 5.00% $0.0000 0.000 119.404
06/94 $14.93 $15.72 5.00% $0.0000 0.000 119.404
07/94 $15.14 $15.94 5.00% $0.0000 0.000 119.404
08/94 $15.88 $16.72 5.00% $0.0000 0.000 119.404
09/94 $15.49 $16.31 5.00% $0.0000 0.000 119.404
10/94 $15.85 $16.68 5.00% $0.0000 0.000 119.404
11/94 $14.56 $15.33 5.00% $0.0000 0.000 119.404
12/94 $13.93 $14.66 5.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain $65.4549 4.702 124.106
<CAPTION>
5-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------------
<S> <C> <C> <C>
04/91 $0.0000 0.000 102.760
05/91 $0.0000 0.000 102.760
06/91 $0.0000 0.000 102.760
07/91 $0.0000 0.000 102.760
08/91 $0.0000 0.000 102.760
09/91 $0.0000 0.000 102.760
10/91 $0.0000 0.000 102.760
11/91 $0.0000 0.000 102.760
12/91 $0.0000 0.000 102.760
01/92 $0.0000 0.000 102.760
02/92 $0.0000 0.000 102.760
03/92 $0.0000 0.000 102.760
04/92 $0.0000 0.000 102.760
05/92 $0.0000 0.000 102.760
06/92 $0.0000 0.000 102.760
07/92 $0.0000 0.000 102.760
08/92 $0.0000 0.000 102.760
09/92 $0.0000 0.000 102.760
10/92 $0.0000 0.000 102.760
11/92 $0.0000 0.000 102.760
12/92 $0.0000 0.000 102.760
01/93 $0.0000 0.000 102.760
02/93 $0.0000 0.000 102.760
03/93 $0.0000 0.000 102.760
04/93 $0.0000 0.000 102.760
05/93 $0.0000 0.000 102.760
06/93 $0.0000 0.000 102.760
07/93 $0.0000 0.000 102.760
08/93 $0.0000 0.000 102.760
09/93 $0.0000 0.000 102.760
10/93 $0.0000 0.000 102.760
11/93 $0.0000 0.000 102.760
12/93 $41.6137 2.707 105.467
01/94 $0.0000 0.000 105.467
02/94 $0.0000 0.000 105.467
03/94 $0.0000 0.000 105.467
04/94 $0.0000 0.000 105.467
05/94 $0.0000 0.000 105.467
06/94 $0.0000 0.000 105.467
07/94 $0.0000 0.000 105.467
08/94 $0.0000 0.000 105.467
09/94 $0.0000 0.000 105.467
10/94 $0.0000 0.000 105.467
11/94 $0.0000 0.000 105.467
12/94 $57.8149 4.153 109.620
</TABLE>
<PAGE> 19
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
10-Year
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $13.24 5.00% $0.0000 0.000 124.106
2/95 $13.12 $13.81 5.00% $0.0000 0.000 124.106
3/95 $13.49 $14.20 5.00% $0.0000 0.000 124.106
4/95 $13.85 $14.58 5.00% $0.0000 0.000 124.106
5/95 $14.22 $14.97 5.00% $0.0000 0.000 124.106
6/95 $13.83 $14.56 5.00% $0.0000 0.000 124.106
7/95 $14.63 $15.40 5.00% $0.0000 0.000 124.106
8/95 $14.11 $14.85 5.00% $0.0000 0.000 124.106
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
5-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ------------------------------------------------
<S> <C> <C> <C>
1/95 $0.0000 0.000 109.620
2/95 $0.0000 0.000 109.620
3/95 $0.0000 0.000 109.620
4/95 $0.0000 0.000 109.620
5/95 $0.0000 0.000 109.620
6/95 $0.0000 0.000 109.620
7/95 $0.0000 0.000 109.620
8/95 $0.0000 0.000 109.620
- ------------------------------------------------
</TABLE>
<PAGE> 20
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year
-------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.53 5.00%
09/87 $10.00 $10.53 5.00%
10/87 $8.98 $9.45 5.00%
11/87 $8.94 $9.41 5.00%
12/87 $9.05 $9.53 5.00% 12/30/87 $0.0275 $9.15
01/88 $9.37 $9.86 5.00%
02/88 $9.96 $10.48 5.00%
03/88 $10.66 $11.22 5.00%
04/88 $11.03 $11.61 5.00%
05/88 $10.73 $11.29 5.00%
06/88 $10.35 $10.89 5.00%
07/88 $10.52 $11.07 5.00%
08/88 $9.61 $10.12 5.00%
09/88 $9.87 $10.39 5.00%
10/88 $10.68 $11.24 5.00%
11/88 $11.20 $11.79 5.00%
12/88 $10.90 $11.47 5.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain
01/89 $11.04 $11.62 5.00%
02/89 $11.16 $11.75 5.00%
03/89 $10.99 $11.57 5.00%
04/89 $11.30 $11.89 5.00%
05/89 $10.70 $11.26 5.00%
06/89 $10.13 $10.66 5.00%
07/89 $10.95 $11.53 5.00%
08/89 $11.10 $11.68 5.00%
09/89 $11.88 $12.51 5.00%
10/89 $11.81 $12.43 5.00%
11/89 $12.44 $13.09 5.00%
12/89 $12.14 $12.78 5.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain
01/90 $11.85 $12.47 5.00%
02/90 $11.31 $11.91 5.00%
03/90 $10.92 $11.49 5.00%
04/90 $10.58 $11.14 5.00%
05/90 $11.34 $11.94 5.00%
06/90 $11.59 $12.20 5.00%
07/90 $12.33 $12.98 5.00%
08/90 $10.34 $10.88 5.00%
09/90 $8.88 $9.35 5.00%
10/90 $9.77 $10.28 5.00%
11/90 $9.31 $9.80 5.00%
12/90 $8.36 $8.80 5.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain
01/91 $8.43 $8.87 5.00%
02/91 $9.22 $9.71 5.00%
03/91 $9.35 $9.84 5.00%
<CAPTION>
1-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------------------------------------------
<S> <C> <C> <C>
9/8/87
09/87
10/87
11/87
12/87
01/88
02/88
03/88
04/88
05/88
06/88
07/88
08/88
09/88
10/88
11/88
12/88
01/89
02/89
03/89
04/89
05/89
06/89
07/89
08/89
09/89
10/89
11/89
12/89
01/90
02/90
03/90
04/90
05/90
06/90
07/90
08/90
09/90
10/90
11/90
12/90
01/91
02/91
03/91
</TABLE>
<PAGE> 21
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year
-------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $10.32 5.00%
05/91 $9.80 $10.32 5.00%
06/91 $9.36 $9.85 5.00%
07/91 $9.42 $9.92 5.00%
08/91 $9.05 $9.53 5.00%
09/91 $9.27 $9.76 5.00%
10/91 $9.36 $9.85 5.00%
11/91 $9.09 $9.57 5.00%
12/91 $9.42 $9.92 5.00%
01/92 $9.41 $9.91 5.00%
02/92 $9.28 $9.77 5.00%
03/92 $8.91 $9.38 5.00%
04/92 $8.96 $9.43 5.00%
05/92 $9.47 $9.97 5.00%
06/92 $9.27 $9.76 5.00%
07/92 $8.83 $9.29 5.00%
08/92 $8.87 $9.34 5.00% 107.066
09/92 $9.03 $9.51 5.00% $0.00 0.000 107.066
10/92 $9.33 $9.82 5.00% $0.00 0.000 107.066
11/92 $9.49 $9.99 5.00% $0.00 0.000 107.066
12/92 $9.61 $10.12 5.00% $0.00 0.000 107.066
01/93 $9.94 $10.46 5.00% $0.00 0.000 107.066
02/93 $10.52 $11.07 5.00% $0.00 0.000 107.066
03/93 $10.91 $11.48 5.00% $0.00 0.000 107.066
04/93 $11.82 $12.44 5.00% $0.00 0.000 107.066
05/93 $12.54 $13.20 5.00% $0.00 0.000 107.066
06/93 $12.13 $12.77 5.00% $0.00 0.000 107.066
07/93 $12.49 $13.15 5.00% $0.00 0.000 107.066
08/93 $13.27 $13.97 5.00% $0.00 0.000 107.066
09/93 $13.22 $13.92 5.00% $0.00 0.000 107.066
10/93 $14.52 $15.28 5.00% $0.00 0.000 107.066
11/93 $14.13 $14.87 5.00% $0.00 0.000 107.066
12/93 $15.96 $16.80 5.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain $43.36 2.821 109.887
01/94 $15.92 $16.76 5.00% $0.00 0.000 109.887
02/94 $15.55 $16.37 5.00% $0.00 0.000 109.887
03/94 $14.49 $15.25 5.00% $0.00 0.000 109.887
04/94 $14.84 $15.62 5.00% $0.00 0.000 109.887
05/94 $15.35 $16.16 5.00% $0.00 0.000 109.887
06/94 $14.93 $15.72 5.00% $0.00 0.000 109.887
07/94 $15.14 $15.94 5.00% $0.00 0.000 109.887
08/94 $15.88 $16.72 5.00% $0.00 0.000 109.887
09/94 $15.49 $16.31 5.00% $0.00 0.000 109.887
10/94 $15.85 $16.68 5.00% $0.00 0.000 109.887
11/94 $14.56 $15.33 5.00% $0.00 0.000 109.887
12/94 $13.93 $14.66 5.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain $60.24 4.327 114.214
<CAPTION>
1-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------------------------------------------
<S> <C> <C> <C>
04/91
05/91
06/91
07/91
08/91
09/91
10/91
11/91
12/91
01/92
02/92
03/92
04/92
05/92
06/92
07/92
08/92
09/92
10/92
11/92
12/92
01/93
02/93
03/93
04/93
05/93
06/93
07/93
08/93
09/93
10/93
11/93
12/93
01/94
02/94
03/94
04/94
05/94
06/94
07/94
08/94 59.809
09/94 $0.0000 0.000 59.809
10/94 $0.0000 0.000 59.809
11/94 $0.0000 0.000 59.809
12/94 $32.7861 2.355 62.164
</TABLE>
<PAGE> 22
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
3-Year
-------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $13.24 5.00% $0.00 0.000 114.214
2/95 $13.12 $13.81 5.00% $0.00 0.000 114.214
3/95 $13.49 $14.20 5.00% $0.00 0.000 114.214
4/95 $13.85 $14.58 5.00% $0.00 0.000 114.214
5/95 $14.22 $14.97 5.00% $0.00 0.000 114.214
6/95 $13.83 $14.56 5.00% $0.00 0.000 114.214
7/95 $14.63 $15.40 5.00% $0.00 0.000 114.214
8/95 $14.11 $14.85 5.00% $0.00 0.000 114.214
- ------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
1-Year
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- ---------------------------------------------
<S> <C> <C> <C>
1/95 $0.0000 0.000 62.164
2/95 $0.0000 0.000 62.164
3/95 $0.0000 0.000 62.164
4/95 $0.0000 0.000 62.164
5/95 $0.0000 0.000 62.164
6/95 $0.0000 0.000 62.164
7/95 $0.0000 0.000 62.164
8/95 $0.0000 0.000 62.164
- ---------------------------------------------
</TABLE>
<PAGE> 23
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
YTD
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
9/8/87 $10.00 $10.53 5.00%
09/87 $10.00 $10.53 5.00%
10/87 $8.98 $9.45 5.00%
11/87 $8.94 $9.41 5.00%
12/87 $9.05 $9.53 5.00% 12/30/87 $0.0275 $9.15
01/88 $9.37 $9.86 5.00%
02/88 $9.96 $10.48 5.00%
03/88 $10.66 $11.22 5.00%
04/88 $11.03 $11.61 5.00%
05/88 $10.73 $11.29 5.00%
06/88 $10.35 $10.89 5.00%
07/88 $10.52 $11.07 5.00%
08/88 $9.61 $10.12 5.00%
09/88 $9.87 $10.39 5.00%
10/88 $10.68 $11.24 5.00%
11/88 $11.20 $11.79 5.00%
12/88 $10.90 $11.47 5.00% 12/29/88 $0.2425 $10.97 $0.2325 Cap Gain
01/89 $11.04 $11.62 5.00%
02/89 $11.16 $11.75 5.00%
03/89 $10.99 $11.57 5.00%
04/89 $11.30 $11.89 5.00%
05/89 $10.70 $11.26 5.00%
06/89 $10.13 $10.66 5.00%
07/89 $10.95 $11.53 5.00%
08/89 $11.10 $11.68 5.00%
09/89 $11.88 $12.51 5.00%
10/89 $11.81 $12.43 5.00%
11/89 $12.44 $13.09 5.00%
12/89 $12.14 $12.78 5.00% 12/29/89 $0.8250 $11.99 $0.8250 Cap Gain
01/90 $11.85 $12.47 5.00%
02/90 $11.31 $11.91 5.00%
03/90 $10.92 $11.49 5.00%
04/90 $10.58 $11.14 5.00%
05/90 $11.34 $11.94 5.00%
06/90 $11.59 $12.20 5.00%
07/90 $12.33 $12.98 5.00%
08/90 $10.34 $10.88 5.00%
09/90 $8.88 $9.35 5.00%
10/90 $9.77 $10.28 5.00%
11/90 $9.31 $9.80 5.00%
12/90 $8.36 $8.80 5.00% 12/31/90 $0.9525 $8.07 $0.9525 Cap Gain
01/91 $8.43 $8.87 5.00%
02/91 $9.22 $9.71 5.00%
03/91 $9.35 $9.84 5.00%
<CAPTION>
Monthly
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- --------------------------------------------
<S> <C> <C> <C>
9/8/87
09/87
10/87
11/87
12/87
01/88
02/88
03/88
04/88
05/88
06/88
07/88
08/88
09/88
10/88
11/88
12/88
01/89
02/89
03/89
04/89
05/89
06/89
07/89
08/89
09/89
10/89
11/89
12/89
01/90
02/90
03/90
04/90
05/90
06/90
07/90
08/90
09/90
10/90
11/90
12/90
01/91
02/91
03/91
</TABLE>
<PAGE> 24
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
YTD
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
04/91 $9.80 $10.32 5.00%
05/91 $9.80 $10.32 5.00%
06/91 $9.36 $9.85 5.00%
07/91 $9.42 $9.92 5.00%
08/91 $9.05 $9.53 5.00%
09/91 $9.27 $9.76 5.00%
10/91 $9.36 $9.85 5.00%
11/91 $9.09 $9.57 5.00%
12/91 $9.42 $9.92 5.00%
01/92 $9.41 $9.91 5.00%
02/92 $9.28 $9.77 5.00%
03/92 $8.91 $9.38 5.00%
04/92 $8.96 $9.43 5.00%
05/92 $9.47 $9.97 5.00%
06/92 $9.27 $9.76 5.00%
07/92 $8.83 $9.29 5.00%
08/92 $8.87 $9.34 5.00%
09/92 $9.03 $9.51 5.00%
10/92 $9.33 $9.82 5.00%
11/92 $9.49 $9.99 5.00%
12/92 $9.61 $10.12 5.00%
01/93 $9.94 $10.46 5.00%
02/93 $10.52 $11.07 5.00%
03/93 $10.91 $11.48 5.00%
04/93 $11.82 $12.44 5.00%
05/93 $12.54 $13.20 5.00%
06/93 $12.13 $12.77 5.00%
07/93 $12.49 $13.15 5.00%
08/93 $13.27 $13.97 5.00%
09/93 $13.22 $13.92 5.00%
10/93 $14.52 $15.28 5.00%
11/93 $14.13 $14.87 5.00%
12/93 $15.96 $16.80 5.00% 12/23/93 $0.4050 $15.37 $0.4050 Cap Gain
01/94 $15.92 $16.76 5.00%
02/94 $15.55 $16.37 5.00%
03/94 $14.49 $15.25 5.00%
04/94 $14.84 $15.62 5.00%
05/94 $15.35 $16.16 5.00%
06/94 $14.93 $15.72 5.00%
07/94 $15.14 $15.94 5.00%
08/94 $15.88 $16.72 5.00%
09/94 $15.49 $16.31 5.00%
10/94 $15.85 $16.68 5.00%
11/94 $14.56 $15.33 5.00% 68.213
12/94 $13.93 $14.66 5.00% 12/23/94 $0.5482 $13.92 $0.5482 Cap Gain
<CAPTION>
Monthly
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- --------------------------------------------
<S> <C> <C> <C>
04/91
05/91
06/91
07/91
08/91
09/91
10/91
11/91
12/91
01/92
02/92
03/92
04/92
05/92
06/92
07/92
08/92
09/92
10/92
11/92
12/92
01/93
02/93
03/93
04/93
05/93
06/93
07/93
08/93
09/93
10/93
11/93
12/93
01/94
02/94
03/94
04/94
05/94
06/94
07/94
08/94
09/94
10/94
11/94
12/94
</TABLE>
<PAGE> 25
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"A SHARES"
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Initial Investment: $1,000.00
- ---------------------------------------------- -----------------------------------------
Average Annual Total Return Value at End of Period
7.98 Year Return: 7.27% 10 Year Value: $1,751.14
5 Year Return: 9.11% 5 Year Value: $1,546.74
3 Year Return: 17.24% 3 Year Value: $1,611.56
1 Year Return: (12.29)% 1 Year Value: $877.13
YTD Return: (3.75)% YTD Value: $962.48
Monthly (8.38)% Monthly $916.23
- ---------------------------------------------- -----------------------------------------
Constant Sales Charge: 5.00%
</TABLE>
<TABLE>
<CAPTION>
YTD
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1/95 $12.58 $13.24 5.00% $0.0000 0.000 68.213
2/95 $13.12 $13.81 5.00% $0.0000 0.000 68.213
3/95 $13.49 $14.20 5.00% $0.0000 0.000 68.213
4/95 $13.85 $14.58 5.00% $0.0000 0.000 68.213
5/95 $14.22 $14.97 5.00% $0.0000 0.000 68.213
6/95 $13.83 $14.56 5.00% $0.0000 0.000 68.213
7/95 $14.63 $15.40 5.00% $0.0000 0.000 68.213
8/95 $14.11 $14.85 5.00% $0.0000 0.000 68.213
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Monthly
------------------------------------
Month Dividend # of Shares Shares
Ended Received Reinv. Outstanding
- --------------------------------------------
<S> <C> <C> <C>
1/95
2/95
3/95
4/95
5/95
6/95
7/95 64.935
8/95 $0.0000 0.000 64.935
- --------------------------------------------
</TABLE>
<PAGE> 26
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"B SHARES"
<TABLE>
Initial Investment: $1,000.00
<CAPTION>
------------------------------------------------- -------------------------------------------
Average Annual Total Return Investment Value at End of Period
CDSC
Excluding With Excluding % CDSC Ending
CDSC CDSC CDSC CDSC Amount Value
<S> <C> <C> <C> <C> <C> <C>
10 Year Return: N/A N/A N/A 0.00% N/A
5 Year Return: N/A N/A N/A 2.00% N/A
1.49 Year Return: (2.67)% (5.30)% $960.45 4.00% $38.42 $922.03
1 Year Return: (8.38)% (12.96)% $916.19 5.00% $45.81 $870.38
YTD Return: 0.79% (4.21)% $1,007.94 5.00% $50.00 $957.94
Monthly (3.66)% (8.48)% $963.42 5.00% $48.17 $915.25
------------------------------------------------- -------------------------------------------
Constant Sales Charge: N/A
</TABLE>
<TABLE>
<CAPTION>
10-Year
----------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 /4/ 94 $15.11 $15.11 N/A
3 / 94 $14.48 $14.48 N/A
4 / 94 $14.82 $14.82 N/A
5 / 94 $15.32 $15.32 N/A
6 / 94 $14.91 $14.91 N/A
7 / 94 $15.11 $15.11 N/A
8 / 94 $15.84 $15.84 N/A
9 / 94 $15.43 $15.43 N/A
10 / 94 $15.79 $15.79 N/A
11 / 94 $14.49 $14.49 N/A
12 / 94 $13.85 $13.85 N/A 12/23/94 $0.5482 $13.85 $0.5482 Cap Gain
1 / 95 $12.50 $12.50 N/A
2 / 95 $13.03 $13.03 N/A
3 / 95 $13.39 $13.39 N/A
4 / 95 $13.74 $13.74 N/A
5 / 95 $14.10 $14.10 N/A
6 / 95 $13.70 $13.70 N/A
7 / 95 $14.49 $14.49 N/A
8 / 95 $13.96 $13.96 N/A
- ----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
5-Year 3-Year
---------------------------------- ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3 /4/ 94 66.181
3 / 94 $0.0000 0.000 66.181
4 / 94 $0.0000 0.000 66.181
5 / 94 $0.0000 0.000 66.181
6 / 94 $0.0000 0.000 66.181
7 / 94 $0.0000 0.000 66.181
8 / 94 $0.0000 0.000 66.181
9 / 94 $0.0000 0.000 66.181
10 / 94 $0.0000 0.000 66.181
11 / 94 $0.0000 0.000 66.181
12 / 94 $36.2791 2.619 68.800
1 / 95 $0.0000 0.000 68.800
2 / 95 $0.0000 0.000 68.800
3 / 95 $0.0000 0.000 68.800
4 / 95 $0.0000 0.000 68.800
5 / 95 $0.0000 0.000 68.800
6 / 95 $0.0000 0.000 68.800
7 / 95 $0.0000 0.000 68.800
8 / 95 $0.0000 0.000 68.800
- -----------------------------------------------------------------------------------
</TABLE>
Page 1
<PAGE> 27
John Hancock Pacific Basin Equities Fund - SEC TOTAL RETURN
"B SHARES"
<TABLE>
Initial Investment: $1,000.00
<CAPTION>
------------------------------------------------- -------------------------------------------
Average Annual Total Return Investment Value at End of Period
CDSC
Excluding With Excluding % CDSC Ending
CDSC CDSC CDSC CDSC Amount Value
<S> <C> <C> <C> <C> <C> <C>
10 Year Return: N/A N/A N/A 0.00% N/A
5 Year Return: N/A N/A N/A 2.00% N/A
1.49 Year Return: (2.67)% (5.30)% $960.45 4.00% $38.42 $922.03
1 Year Return: (8.38)% (12.96)% $916.19 5.00% $45.81 $870.38
YTD Return: 0.79% (4.21)% $1,007.94 5.00% $50.00 $957.94
Monthly (3.66)% (8.48)% $963.42 5.00% $48.17 $915.25
------------------------------------------------- -------------------------------------------
Constant Sales Charge: N/A
</TABLE>
<TABLE>
<CAPTION>
1-Year
------------------------------------
Month Offering Sales Ex-Div Dividend Reinv. Capital Gains Dividend # of Shares Shares
Ended NAV Price Charge Date Amount Price Information Received Reinv. Outstanding
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
3 /4/ 94 $15.11 $15.11 N/A
3 / 94 $14.48 $14.48 N/A
4 / 94 $14.82 $14.82 N/A
5 / 94 $15.32 $15.32 N/A
6 / 94 $14.91 $14.91 N/A
7 / 94 $15.11 $15.11 N/A
8 / 94 $15.84 $15.84 N/A 63.131
9 / 94 $15.43 $15.43 N/A $0.0000 0.000 63.131
10 / 94 $15.79 $15.79 N/A $0.0000 0.000 63.131
11 / 94 $14.49 $14.49 N/A $0.0000 0.000 63.131
12 / 94 $13.85 $13.85 N/A 12/23/94 $0.5482 $13.85 $0.5482 Cap Gain $34.6072 2.499 65.630
1 / 95 $12.50 $12.50 N/A $0.0000 0.000 65.630
2 / 95 $13.03 $13.03 N/A $0.0000 0.000 65.630
3 / 95 $13.39 $13.39 N/A $0.0000 0.000 65.630
4 / 95 $13.74 $13.74 N/A $0.0000 0.000 65.630
5 / 95 $14.10 $14.10 N/A $0.0000 0.000 65.630
6 / 95 $13.70 $13.70 N/A $0.0000 0.000 65.630
7 / 95 $14.49 $14.49 N/A $0.0000 0.000 65.630
8 / 95 $13.96 $13.96 N/A $0.0000 0.000 65.630
- -----------------------------------------------------------------------------------------------------------------------------
<CAPTION>
YTD Monthly
------------------------------------ ------------------------------------
Month Dividend # of Shares Shares Dividend # of Shares Shares
Ended Received Reinv. Outstanding Received Reinv. Outstanding
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3 /4/ 94
3 / 94
4 / 94
5 / 94
6 / 94
7 / 94
8 / 94
9 / 94
10 / 94
11 / 94
12 / 94 72.202
1 / 95 $0.0000 0.000 72.202
2 / 95 $0.0000 0.000 72.202
3 / 95 $0.0000 0.000 72.202
4 / 95 $0.0000 0.000 72.202
5 / 95 $0.0000 0.000 72.202
6 / 95 $0.0000 0.000 72.202
7 / 95 $0.0000 0.000 72.202 69.013
8 / 95 $0.0000 0.000 72.202 $0.0000 0.000 69.013
- --------------------------------------------------------------------------------------
</TABLE>
Page 2
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF JOHN HANCOCK PACIFIC BASIN
EQUITIES FUND - CLASS A FOR THE 12 MONTHS ENDED AUGUST 31, 1995 AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<SERIES>
<NUMBER> 021
<NAME> JOHN HANCOCK PACIFIC BASIN EQUITIES FUND - CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 47,716,553
<INVESTMENTS-AT-VALUE> 49,490,664
<RECEIVABLES> 626,508
<ASSETS-OTHER> 2,349,665
<OTHER-ITEMS-ASSETS> 1,506,176
<TOTAL-ASSETS> 52,198,902
<PAYABLE-FOR-SECURITIES> 103,467
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 310,546
<TOTAL-LIABILITIES> 414,013
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 50,963,701
<SHARES-COMMON-STOCK> 2,651,955
<SHARES-COMMON-PRIOR> 3,164,499
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (684,988)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,506,176
<NET-ASSETS> 51,784,889
<DIVIDEND-INCOME> 1,046,882
<INTEREST-INCOME> 117,947
<OTHER-INCOME> 0
<EXPENSES-NET> 1,191,553
<NET-INVESTMENT-INCOME> (26,724)
<REALIZED-GAINS-CURRENT> (808,993)
<APPREC-INCREASE-CURRENT> (3,796,418)
<NET-CHANGE-FROM-OPS> (4,632,135)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1,615,390)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,831,046
<NUMBER-OF-SHARES-REDEEMED> 2,455,590
<SHARES-REINVESTED> 112,000
<NET-CHANGE-IN-ASSETS> (7,956,089)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 2,089,045
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 430,725
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,191,553
<AVERAGE-NET-ASSETS> 41,468,203
<PER-SHARE-NAV-BEGIN> 15.88
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> (1.24)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.55)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.11
<EXPENSE-RATIO> 2.05
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF JOHN HANCOCK PACIFIC BASIN
EQUITIES FUND - CLASS B FOR THE 12 MONTHS ENDED AUGUST, 31, 1995 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<SERIES>
<NUMBER> 22
<NAME> JOHN HANCOCK PACIFIC BASIN EQUITIES FUND - CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 47,716,553
<INVESTMENTS-AT-VALUE> 49,409,664
<RECEIVABLES> 626,508
<ASSETS-OTHER> 2,349,665
<OTHER-ITEMS-ASSETS> 1,506,176
<TOTAL-ASSETS> 52,198,902
<PAYABLE-FOR-SECURITIES> 103,467
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 310,546
<TOTAL-LIABILITIES> 414,013
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 50,963,701
<SHARES-COMMON-STOCK> 1,029,129
<SHARES-COMMON-PRIOR> 598,543
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (684,988)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,506,176
<NET-ASSETS> 51,784,889
<DIVIDEND-INCOME> 1,046,882
<INTEREST-INCOME> 117,947
<OTHER-INCOME> 0
<EXPENSES-NET> 1,191,553
<NET-INVESTMENT-INCOME> (26,724)
<REALIZED-GAINS-CURRENT> (808,993)
<APPREC-INCREASE-CURRENT> (3,796,418)
<NET-CHANGE-FROM-OPS> (4,632,135)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (485,450)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,880,511
<NUMBER-OF-SHARES-REDEEMED> 1,481,266
<SHARES-REINVESTED> 31,341
<NET-CHANGE-IN-ASSETS> (7,956,089)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 2,089,045
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 430,725
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,191,553
<AVERAGE-NET-ASSETS> 12,372,452
<PER-SHARE-NAV-BEGIN> 15.84
<PER-SHARE-NII> (0.09)
<PER-SHARE-GAIN-APPREC> (1.24)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (0.55)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 13.96
<EXPENSE-RATIO> 2.77
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF JOHN HANCOCK GLOBAL RX FUND -
CLASS A FOR THE 12 MONTHS ENDED AUGUST 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<SERIES>
<NUMBER> 031
<NAME> JOHN HANCOCK GLOBAL RX FUND - CLASS A
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 20,345,894
<INVESTMENTS-AT-VALUE> 30,819,795
<RECEIVABLES> 100,278
<ASSETS-OTHER> 9,023
<OTHER-ITEMS-ASSETS> 10,473,960
<TOTAL-ASSETS> 30,929,155
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 201,674
<TOTAL-LIABILITIES> 201,674
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19,998,374
<SHARES-COMMON-STOCK> 1,128,895
<SHARES-COMMON-PRIOR> 1,128,943
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 255,147
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,473,960
<NET-ASSETS> 30,727,481
<DIVIDEND-INCOME> 55,919
<INTEREST-INCOME> 77,520
<OTHER-INCOME> 0
<EXPENSES-NET> 639,446
<NET-INVESTMENT-INCOME> (506,007)
<REALIZED-GAINS-CURRENT> 1,224,533
<APPREC-INCREASE-CURRENT> 5,931,154
<NET-CHANGE-FROM-OPS> 6,649,680
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 517,942
<NUMBER-OF-SHARES-REDEEMED> 517,990
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 11,013,873
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (976,417)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 190,775
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 20,477,666
<PER-SHARE-NAV-BEGIN> 16.51
<PER-SHARE-NII> (0.36)
<PER-SHARE-GAIN-APPREC> 5.46
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.61
<EXPENSE-RATIO> 2.56
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF JOHN HANCOCK GLOBAL RX FUND -
CLASS B FOR THE 12 MONTHS ENDED AUGUST 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<SERIES>
<NUMBER> 032
<NAME> JOHN HANCOCK GLOBAL RX FUND - CLASS B
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-01-1994
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 20,345,894
<INVESTMENTS-AT-VALUE> 30,819,795
<RECEIVABLES> 100,278
<ASSETS-OTHER> 9,023
<OTHER-ITEMS-ASSETS> 10,473,960
<TOTAL-ASSETS> 30,929,155
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 201,674
<TOTAL-LIABILITIES> 201,674
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 19,998,374
<SHARES-COMMON-STOCK> 296,602
<SHARES-COMMON-PRIOR> 65,046
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 255,147
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,473,960
<NET-ASSETS> 30,727,481
<DIVIDEND-INCOME> 55,919
<INTEREST-INCOME> 77,520
<OTHER-INCOME> 0
<EXPENSES-NET> 639,446
<NET-INVESTMENT-INCOME> (506,007)
<REALIZED-GAINS-CURRENT> 1,224,533
<APPREC-INCREASE-CURRENT> 5,931,154
<NET-CHANGE-FROM-OPS> 6,649,680
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 451,492
<NUMBER-OF-SHARES-REDEEMED> 219,936
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 11,013,873
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> (976,417)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 190,775
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 0
<AVERAGE-NET-ASSETS> 3,369,184
<PER-SHARE-NAV-BEGIN> 16.46
<PER-SHARE-NII> (0.55)
<PER-SHARE-GAIN-APPREC> 5.44
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.35
<EXPENSE-RATIO> 3.45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED CONDENSED FINANCIAL STATEMENTS OF JOHN HANCOCK GLOBAL RETAIL FUND
FOR THE 12 MONTHS ENDED AUGUST 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<SERIES>
<NUMBER> 041
<NAME> JOHN HANCOCK GLOBAL RETAIL FUND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-START> SEP-29-1994
<PERIOD-END> AUG-31-1995
<INVESTMENTS-AT-COST> 517,045
<INVESTMENTS-AT-VALUE> 715,152
<RECEIVABLES> 53,344
<ASSETS-OTHER> 6,012
<OTHER-ITEMS-ASSETS> 198,103
<TOTAL-ASSETS> 774,504
<PAYABLE-FOR-SECURITIES> 10,004
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,900
<TOTAL-LIABILITIES> 62,904
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 525,920
<SHARES-COMMON-STOCK> 61,946
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (12,423)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 198,103
<NET-ASSETS> 711,600
<DIVIDEND-INCOME> 2,773
<INTEREST-INCOME> 5,433
<OTHER-INCOME> 0
<EXPENSES-NET> 7,885
<NET-INVESTMENT-INCOME> 321
<REALIZED-GAINS-CURRENT> (12,743)
<APPREC-INCREASE-CURRENT> 198,103
<NET-CHANGE-FROM-OPS> 185,681
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 803
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 844
<NUMBER-OF-SHARES-SOLD> 4,064
<NUMBER-OF-SHARES-REDEEMED> 947
<SHARES-REINVESTED> 5
<NET-CHANGE-IN-ASSETS> 711,600
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 4,205
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 47,331
<AVERAGE-NET-ASSETS> 543,428
<PER-SHARE-NAV-BEGIN> 8.50
<PER-SHARE-NII> 0.01
<PER-SHARE-GAIN-APPREC> 3.01
<PER-SHARE-DIVIDEND> 0.01
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0.02
<PER-SHARE-NAV-END> 11.49
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
